N Padmaja, Hyd, Hyderabad V. DCIT, Circle-3(2), Hyderabad, Hyderabad

ITA 647/HYD/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9837 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 08-06-2021
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROHIT MAJUMDAR
• Assessee Lawyers: P MURALI MOHANA RAO
• Keywords: Unexplained investment; Deemed dividend
• Section: 143(3); 2(22)(e); 201; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD. BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI L . P . SAHU, ACCOUNTANT MEMBER (THROUGH VIRTUAL HEARING) ITA NO. 647 /HYD/20 16 (ASSESSMENT YEAR : 20 09 - 10 ) S MT. N. PADMAJA, HYDERABAD. PAN ABCPN 2453P ..APPELLANT. VS. DY. COMMISSIONER OF INCOME TA X, CIRCLE 3(2), HYDERABAD. ..RESPONDENT. APPELLANT BY : SHRI P. MURALI MOHANA RAO. C.A. RESPONDENT BY : SHRI ROHIT MAJUMDAR. (D.R.) DATE OF HEARING : 8.6.202 1. DATE OF PRONOUNCEMENT : 12 .0 7 .2021. O R D E R PER SHRI S.S. GODARA, J.M. : THIS ASSESSEES APPEAL FOR ASST. YEAR 20 09 - 10 ARISES FROM THE COMMISSIONER OF INCOME TAX (APPEALS) - 3 , HYDERABAD S ORDER DT. 21.03. 201 6 PASSED IN CASE 2 ITA NO. 647/HYD/2016 NO. 1014/DC - 3(2)/CIT(A) - 3/14 - 15 IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 148 OF INCOME TAX ACT, 1961 (THE ACT). HEARD BOTH THE PARTIES . C ASE FILE PERUSED. 2. IT EMERGES DURING THE COURSE OF HEARING THAT THE ASSESSEE'S SOLE SUBSTANTIVE GRIEVANCE CHALLENG ES THE CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION MAKING ADDITION OF RS.74,85,100 COMPRISING OF ALLEGED UNEXPLAINED INVESTMENT IN PURCHASE OF JEWELLERY TO THE TUNE OF RS.61,17,000; TRADING ADVANCES RECEIVED OF RS.11 LAKHS FROM M/S. SPR INFRASTRUCTURE LIMITED AS NOT EXPLAINED AS WELL AS FORMING 2 ( 22 ) (E) DEEMED DIVIDEND S AND THE REMAINING SUM OF RS.2,67,000 AS UNEXPLAINED CASH, RESPECTIVELY. 3. WE NEXT NOTICE THAT THE INSTANT THREE ADDITIONS DO NOT NEED US TO D ELVE MUCH DEEPER IN THE RELEVANT FACTS . THE REVENUES CASE IS THAT IT HAS PRECISELY GONE BY THE INCRIMINATING MATERIAL FOUND/SEIZED IN THE SURVEY ACTI O N DT.20.7.2011 AT THE BUSINESS PREMISES OF M/S. SPR INFRASTRUCTURE PUBLICATION PVT. LTD. L EARNED DEPARTMENTAL 3 ITA NO. 647/HYD/2016 REPRESENTATIVE HAS VE HEMENTLY SUBMITTED THAT SECTION 292C OF THE ACT CARRY PRESUMPTION OF CORRECTNESS OF THE SEIZED MATERIAL AND APPLIES IN CASE OF A SURVEY ACTION AS WELL. 4. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL PLEADINGS AGAINST AND IN SUPPORT OF THE IMP UGNED ADDITION ( S ) . WE FIND NO REASON TO SUSTAIN ATLEAST FORMER TWIN ADDITIONS OF RS.61,17,100 AS WELL AS RS.11 LAKHS. THE FIRST ONE HEREIN DOES NOT DESERVE TO BE CONCURRED WITH FOR THE PRECISE REASON THAT THE SAME IS BASED ON THE IMPOUNDED MATERIAL BUT THE AM OUNT SHOWN IS MENTIONED THEREIN HAS BEEN STATED AS EXISTING OUTSTANDING BALANCE AS ON 26.04.2009. WE MAKE IT CLEAR THAT W E ARE IN ASSESSMENT YEAR 2009 - 10 INVOLVING F.Y. 2008 - 09 AND GOING BY THE ALLEGED INCRIMINATING DOCUMENT ITSELF, THE IMPUGNED A MOUNT IS SHO WN AS OUTSTANDING GOES NOT ONLY UPTO 31.03.2009 BUT VERY WELL BEYOND THAT. ALL THIS LEADS US TO THE CONCLUSION THAT SECTION 292C PRESUMPTION REGARDING CORRECTNESS OF THE SEIZED DOCUMENT SUPPORTS THE ASSESSEES CASE RATHER THAN THAT OF DEPARTMENT. WE DELETE TH E FIRST ADDITION OF RS.61,17,100 IN THESE FACTS AND CIRCUMSTANCES . 4 ITA NO. 647/HYD/2016 5. NEXT COMES THE 2 ND ADDITION OF RS.11 LAKHS. L EARNED CIT(A)S DETAILED DISCUSSION IN HIS LOWER APPELLATE ORDER ACCEPTS THE ASSESSEE'S EXPLANATION THA T THE SOURCE THEREOF IS WITHDRAWAL FROM THE COMPANY M/S.SPR INFRASTRUCTURE PVT LTD. , BUT , AT THE SAME TIME, HE HAS TREATED THE VERY SUM AS DEEMED DIVIDEND S U/S. 2(22)(E) OF THE ACT. WE NOTICE HEREIN AS WELL FROM A PE RUSAL OF THE ASSESSEE'S LEDGER ACCOUNT IN THE BOOKS OF M/S. SPR INFRASTRUCTURE LTD. FROM 18.12.2008 TO 3112.2008 THAT THE IMPUGNED SUM OF R S.11 LAKHS REPRESENTS AN ADVANCE AMOUNT PAID TOWARDS PURCHASE OF PROPERTY THAN A LOAN AND THEREFORE NOT COVERED U/S.2(22)(E) OF TH E ACT. WE CONCLUDE THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN ISSUING THE NECESSARY DIRECTION S TO THIS EFFECT TO THE ASSESSING OFFICER. THE IMPUGNED ADDITION OF RS.11 LAKHS IS DELETED. 7. MR. MURALI MOHANA RAO HAS NOT PRESSED THE THIRD LI MB OF ADDITION OF RS.2,67,000 KEEPING IN MIND THE SMALLNESS THERE OF. ORDERED ACCORDINGLY. 5 ITA NO. 647/HYD/2016 8. THIS ASSESSEE'S APPEAL IS PARTLY ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 12TH JU LY , 2021. SD/ - SD/ - (L .P. SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DT. 12. 0 7 .2021. * REDDY GP COPY TO : 1. SMT. N. PADMAJA, DIRECTOR, M/S. SPR PUBLICATIONS PVT. LTD., 317/A/A, MLA COLONY, ROAD NO.12, BANJARA HILLS, HYDERABAD. 2. DCIT, CIRCLE 3(2), HYDERABAD. 3. PR. C I T - 3 , HYDERABAD. 4. CIT(APPEALS) - 3, HYDERABAD. 5. DR, ITAT, HYDERABAD. 6. GUARD FILE. BY ORDER SR. PVT. SECRETARY, ITAT, HYDERABAD.