M. Manohar Reddy, Hyderabad, Hyderabad V. ITO, Ward-9(3), Hyderabad, Hyderabad

ITA 664/HYD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9841 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC-A
• Next Hearing Date: 25-03-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 11-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KIRAN KATHA
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained investment
• Section: 143(3); 147; 69; 148

Judgement Text

ITA NO 664 OF 2017 MANOHAR REDDY MALIPEDHI HYDERABA D. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A SMC BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.664/HYD/2017 (ASSESSMENT YEAR: 2008-09) SHRI MANOHAR REDDY MALIPEDHI, HYDERABAD PAN:ADMPM6090P VS INCOME TAX OFFICER WARD 9(3) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V. RAGHURAM FOR REVENUE : SHRI KIRAN KATHA, DR O R D E R THIS IS ASSESSEES APPEAL FOR THE A.Y 2008-09 AGAIN ST THE ORDER OF THE CIT (A)-9, HYDERABAD, DATED 29.12. 2016. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, IS AN IRON AND STEEL MERCHANT AND WAS C ARRYING ON HIS BUSINESS ACTIVITY UNDER THE NAME AND STYLE OF M/S. BALAJI IRON, STEEL & HARDWARE MART. FOR THE RELEVANT A.Y, HE FIL ED HIS RETURN OF INCOME ON 14.11.2008 DECLARING A TOTAL INCOME OF RS .2,30,245/- AND AGRICULTURAL INCOME OF RS.25,000/-. 3. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE AO NOTICED THAT THE ASSESSEE HAD INTRODUCE D ADDITIONAL CAPITAL OF RS.7,64,736/- DURING THE YEAR WITHOUT OF FERING THE SAME TO INCOME TAX IN THE COMPUTATION STATEMENT AND THAT HE DID NOT DATE OF HEARING : 25.03.2019 DATE OF PRONOUNCEMENT: 03.04.2019 ITA NO 664 OF 2017 MANOHAR REDDY MALIPEDHI HYDERABA D. PAGE 2 OF 4 EXPLAIN THE SOURCES FOR THE ADDITIONAL CAPITAL INTR ODUCED. OBSERVING THAT THE INCOME OF RS.7,64,736/- HAD ESCA PED ASSESSMENT, THE CASE WAS REOPENED U/S 147 AFTER REC ORDING THE REASONS. DURING THE RE-ASSESSMENT PROCEEDINGS ALSO, NONE APPEARED FOR THE ASSESSEE AND THEREFORE, THE AO TRE ATED THE SUM OF RS.7,64,736/- AS UNEXPLAINED INVESTMENT U/S 69 O F THE ACT AND BROUGHT IT TO TAX. AGGRIEVED, THE ASSESSEE PREFERRE D AN APPEAL BEFORE THE CIT (A) CHALLENGING THE VALIDITY OF THE NOTICE U/S 148 AND ALSO THE ADDITION MADE U/S 69 OF THE ACT. THE C IT (A) CONFIRMED THE ORDER OF THE AO. 4. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL BEFO RE US BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ORDER OF THE ID. COMMISSIONER OF INCOME TAX (APPEAL S) DISMISSING THE APPEAL OF THE APPELLANT IS ERRONEOUS , ILLEGAL AND UNSUSTAINABLE IN LAW. 2. THE ID. COMMISSIONER (APPEALS) ERRED IN SUSTAINI NG THE ACTION OF THE ASSESSING OFFICER ON THE ISSUE OF REO PENING ASSESSMENT, DEHORS ANY MATERIAL. THE ID. COMMISSION ER (APPEALS) OUGHT TO HAVE APPRECIATED THAT EVEN IN A CASE WHERE THERE IS NO SCRUTINY ASSESSMENT, ASSESSMENT C AN BE REOPENED BASED ON THE FRESH INFORMATION THAT HAS CO ME INTO THE POSSESSION OF THE ASSESSING OFFICER. 3. WITHOUT PREJUDICE TO ABOVE GROUND, THE ID. COMMISSIONER (APPEALS) ERRED IN SUSTAINING THE ADDI TION OF RS.7,64,736 MADE UNDER SECTION 69 AS UNEXPLAINED CAPITAL INTRODUCED BY THE APPELLANT. THE ID. COMMIS SIONER (APPEALS) FAILED TO APPRECIATE THE EVIDENCE SUBMITT ED BY THE APPELLANT AND SO ALSO THE SUBMISSIONS MADE BY T HE APPELLANT IN PROPER PERSPECTIVE. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT TH E TIME OF HEARING, IT IS PRAYED THAT THE HON'BLE TRIBUNAL MAY BE PLEASED TO ALLOW THE APPEAL. ITA NO 664 OF 2017 MANOHAR REDDY MALIPEDHI HYDERABA D. PAGE 3 OF 4 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ADDITIONAL CAPITAL OF RS.7,64,736/- WAS INTRODU CED BY THE ASSESSEE IN VARIOUS STAGES AND THE SOURCES ARE STAT ED TO BE OUT OF THE CONTRIBUTION MADE BY HIS WIFE MRS. GIRIJA OUT O F HER PERSONAL SAVINGS. OBSERVING THAT NO DETAILS WITH REGARD TO H IS WIFES INCOME OR TAX STATEMENTS ARE FILED BY THE ASSESSEE, THE CI T (A) CONFIRMED THE ADDITION. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. ON A QUERY RAISED BY US DURING THE COURSE OF HEARING, THE LEARNED COU NSEL FOR THE ASSESSEE ADMITTED THAT THE ASSESSEES WIFE HAS NO I NDEPENDENT SOURCE OF INCOME AND THAT SHE IS NOT AN INDEPENDENT TAX ASSESSEE. BUT HE SUBMITTED THAT IT CANNOT BE RULED OUT THAT S HE HAD HER OWN PERSONAL SAVINGS WHICH SHE HAS CONTRIBUTED TO H ER HUSBAND AND SOME AMOUNT MAY BE ACCEPTED AS HER CONTRIBUTION . 6. THE LEARNED DR, HOWEVER, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ONUS WAS O N THE ASSESSEE TO PROVE THE SOURCES OF INVESTMENT AND SIN CE THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS, THE CIT (A) HAS RIGHTLY CONFIRMED THE ADDITIONS MADE BY THE AO TOWARDS THE UNEXPLAINED INVESTMENT TO TAX. 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, I FIND THAT THE ASSESSEE HAS TRIED TO EX PLAIN THE SOURCES FOR THE ADDITIONAL CAPITAL AS A CONTRIBUTION FROM H ER WIFE. ADMITTEDLY, THE ASSESSEES WIFE HAS NO INDEPENDENT SOURCE OF INCOME. ALTHOUGH ASSESSEES CONTENTION THAT SHE ALS O COULD HAVE CONTRIBUTED FROM HER PERSONAL SAVINGS CANNOT BE RUL ED OUT TOTALLY, ITA NO 664 OF 2017 MANOHAR REDDY MALIPEDHI HYDERABA D. PAGE 4 OF 4 WITHOUT ANY EVIDENCE, THE SAME CANNOT BE ACCEPTED O R GIVEN ANY CREDIT. THEREFORE, I SEE NO REASON TO INTERFERE WIT H THE ORDER OF THE CIT (A) IN CONFIRMING THE ADDITION MADE BY THE AO. ASSESSEES APPEAL IS ACCORDINGLY DISMISSED. 8. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD APRIL, 2019. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 3 RD APRIL, 2019. VINODAN/SPS COPY TO: 1 AV RAGHURAM P VINOD ADVOCATES, 610 BABUKHAN ESTAT E, BASHEERBAGH HYDERABAD 50001 2 ITO WARD 9(3) IT TOWERS, AC GUARDS, HYDERABAD 3 CIT (A)-9 HYDERABAD 4 PR. CIT 5 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER