Prabhudayal Kedia, Hyderabad, Hyderabad V. ITO, Ward-8(3), Hyderabad, Hyderabad

ITA 673/HYD/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6473 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 20-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 20-05-2015
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Keywords: Revision of order; Opportunity of being heard
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 673/HYD/2015 ASSESSMENT YEAR: 2008-09 PRABHUDAYAL KEDIA, HYDERABAD [PAN: ADOPK5679E] VS INCOME TAX OFFICER, WARD-8(3), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI K.C. DEVDAS, AR FOR REVENUE : SHRI M. SITARAM, DR DATE OF HEARING : 20-06-2016 DATE OF PRONOUNCEMENT : 24-06-2016 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-2 HYDERABAD DA TED 20-03-2015 AND ASSESSEE HAS RAISED THE FOLLOWING GRO UNDS OF APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (AP PEALS) II, HYDERABAD, IN SO FAR AS IT IS AGAINST THE APPELLANT , IS CONTRARY TO LAW AND FACTS OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) II ERRED IN UPHOLDING THE ADDITION OF RS. 27,75,226. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) II ERRED IN NOT CONSIDERING THE FACT THAT REFUND RS. 21,00,000 IS N OT CLAIMED AND IS NOT MADE TO THE ASSESSEE FROM THE PD ACCOUNT IN THE NAME OF THE ASSESSEE. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) II, HAS FAILED TO APPRECIATE THAT THE INCOME TAX OFFICER HAS NOT F OLLOWED THE OBSERVATIONS OF THE COMMISSIONER OF INCOME TAX IN S O FAR AS CONCERNS THE ESTABLISHMENT OF OWNERSHIP OF CASH OF RS. 12,01,641 AT I.T.A. NO. 673/HYD/2015 PRABHUDAYAL KEDIA :- 2 -: THE HANDS OF M/S BINJU METALS AND ALLOYS INDUSTRIES PRIVATE LIMITED. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) II, HAS FAILED TO CONSIDER THE STATEMENTS UNDER SECTION 132( 4) AN D AFFIDAVITS ON RECORD IN RESPECT OF OWNERSHIP OF THE CASH OF RS. 2 1,00,000 AND HAS FAILED TO CONSIDER THE CONTENTIONS OF THE ASSESSEE WITH REGARD TO, 'POSSESSION' OF CASH VIS-A-VIS INCOME OF THE 'ASSES SEE' AND ACCEPTANCE OF PART OF STATEMENTS UNDER SECTION 132( 4). 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) II, HAS FAILED TO CONSIDER THE CONTENTIONS OF THE ASSESSEE WITH RE GARD TO ASSESSEE NOT HAVING ANY SOURCE OF INCOME TO JUSTIFY THE ADDI TION OF RS. 27,75,226. 7. THE APPELLANT CRAVES LEAVE TO ADD OR TO ALTER AN Y OF THE GROUNDS, OR PLEAD ANY OTHER REASONS THAT MAY BE PRESENTED BE FORE OR AT THE TIME OF HEARING OF APPEAL. 2. IT WAS SUBMITTED BY THE LD. COUNSEL THAT THERE WAS A SE IZURE OF CASH TO AN EXTENT OF RS. 30,50,000/- IN ASSESSEES PREMISES WHICH WAS EXPLAINED AS PERTAINING TO THE COMPANIES IN WHICH HE WAS DIRECTOR. AN AMOUNT OF RS. 2,74,774/- WAS STATED TO BE BELONGING TO M/S. BINJUSARIA SUPER FOOD & FERTILIZER S AND BALANCE OF RS. 27,75,226/- WAS PERTAINING TO M/S. BINJU METAL S & ALLOYS (P) LIMITED. IT WAS FURTHER SUBMITTED THAT WHILE COMPLETING TH E ASSESSMENT IN THE HANDS OF THE M/S. BINJU METALS & ALL OYS (P) LIMITED, ASSESSING OFFICER (AO) GAVE A FINDING IN PAGE NO. 2 OF THE ORDER AS THE AMOUNT OF RS. 27,75,226/- WAS PART OF THE DISCLOSURE MADE IN THE COMPANYS HANDS AND ALSO ACKNOWLEDGED THE WORKING SHEET INDICATING THE OWNERSHIP OF THE MONEY. IT WAS F URTHER SUBMITTED THAT THE SAID AMOUNT WAS ADJUSTED TOWARDS TAX OF T HE COMPANY AND NEVER PART OF OWNERSHIP OF ASSESSEE-INDI VIDUAL. THIS CONTENTION WAS ACCEPTED AND ASSESSMENT WAS COMPLETED U /S. 143(3) OF THE INCOME TAX ACT, [ACT] ON 29-12-2009, WH EREAS THE ASSESSMENT IN THE HANDS OF THE COMPANY ACCEPTING THE DI SCLOSURE WAS MADE MUCH EARLIER ON 18-12-2009. IT WAS FURTHER SUBMITTED I.T.A. NO. 673/HYD/2015 PRABHUDAYAL KEDIA :- 3 -: THAT LD. CIT INVOKED THE PROVISIONS OF SECTION 263 ON THE REASON THAT VERIFICATION OF THE ADMISSION WAS NOT MADE BY THE AO , SET ASIDE THE ISSUE TO THE OFFICER WITH THE FOLLOWING DIRECTI ONS: IN VIEW OF THE ABOVE, I SET ASIDE THE ORDER WITH A DIRECTION TO THE ASSESSING OFFICER TO MAKE DETAILED ENQUIRIES WI TH REGARD TO THE CASH FOUND IN THE PREMISES OF THE ASSESSEE AND RE-C OMPUTE THE INCOME OF THE ASSESSEE BY INCLUDING THE UNEXPLAINED CASH ARISING OUT OF THE CONCLUSIONS DRAWN FROM THE ENQUIRIES CAR RIED OUT AS STATED ABOVE. THE ASSESSING OFFICER IS DIRECTED TO ALLOW OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, BEFORE PASSING THE REVISED ASSESSMENT ORDER. 3. IT WAS SUBMITTED THAT ASSESSEE HAS NOT PREFERRED THE S ECOND APPEAL ON THE ORDER OF THE CIT AS HE HAS ONLY DIRECTE D TO VERIFY AND THERE ARE NO DIRECTIONS TO MAKE ADDITIONS. IT WAS FURTHE R SUBMITTED THAT AO WHILE COMPLETING THE CONSEQUENTIAL ASSE SSMENT, AO DID NOT ACCEPT ASSESSEES EXPLANATION AND MADE THE A DDITION OF RS. 27,75,226/- WHICH WAS CONFIRMED BY THE LD. CIT O N THE REASON THAT AO COMPLETED THE ASSESSMENT INVOLVING THE DIRECTION S OF THE CIT. 4. AS CAN BE SEEN FROM THE ORDER U/S 263, LD. CIT HA S NOT GIVEN ANY DIRECTIONS TO SPECIFICALLY ADD ANY AMOUNT BUT ONL Y TO CAUSE NECESSARY ENQUIRIES AND JURISDICTION WAS LEFT TO AO TO MAKE NECESSARY ENQUIRIES BEFORE MAKING THE ADDITION. IN VIEW OF THE OPERATIVE PART OF THE CITS ORDER, I AM OF THE OPINION THAT LD. CIT(A) ERRED IN DISMISSING THE APPEAL BY STATING AS UNDER: GROUND NO. 5: IN CONSONANCE WITH THE SPEAKING ORD ER OF THE ORDER CIT(CENTRAL) U/S. 263 OF I.T. ACT DATED 12.03 .2012 THE AO WAS DIRECTED TO MAKE ENQUIRIES WITH REGARD TO THE CASH FOUND IN THE PREMISES OF THE APPELLANT WHICH WAS DONE. THIS IS NOT A MATTER FOR A CIT(A) TO ADJUDICATE UPON AS IT INVOLVES THE DIRE CTIONS OF THE CIT (CENTRAL). HENCE, THIS GROUND OF APPEAL IS DISMISS ED. I.T.A. NO. 673/HYD/2015 PRABHUDAYAL KEDIA :- 4 -: 5. I AM OF THE VIEW THAT THE OPINION EXPRESSED BY THE CI T(A) IS ERRONEOUS IN THE SENSE THAT THERE IS NO SPECIFIC DIREC TION BY THE CIT TO ADD THE AMOUNT AND AO IS DIRECTED TO MAKE ENQUIRIES AND DECIDE ACCORDINGLY. THEREFORE, THE MERITS OF THE ADDI TION CAN BE QUESTIONED BEFORE THE CIT(A), WHEN AO EXERCISES HIS D ISCRETION IN MAKING ADDITION. EVEN THOUGH, PRIMA-FACIE , ASSESSEE SUBMITTED THAT THERE IS NO CASE FOR AN ADDITION, I DO NOT INTEND TO ADJUDICATE THE ISSUE SINCE THE FIRST APPELLATE AUTHORITY HAS NOT AP PLIED HIS MIND TO THE ISSUES INVOLVED. THEREFORE, WITHOUT EXPRE SSING ANY OPINION ON THE MERITS OF THE CONTENTIONS, I SET ASIDE THE ORDER OF LD. CIT(A) WITH A DIRECTION TO ADJUDICATE THE ISSUES ON M ERITS AFTER EXAMINING THE CONTENTIONS RAISED. ASSESSEE IS FREE TO SUBMIT THE NECESSARY DETAILS BEFORE THE CIT(A), WHO IS DIRECTED TO EXAMINE AND DECIDE ACCORDINGLY. 6. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JUNE, 2016 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 24 TH JUNE, 2016 TNMM I.T.A. NO. 673/HYD/2015 PRABHUDAYAL KEDIA :- 5 -: COPY TO : 1. PRABHUDAYAL KEDIA, C/O. M/S. SARANG SHAH & COMPANY, CHARTERED ACCOUNTANTS, 3-5-1090/A2, OPP. YMCA NARAYANGUDA, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-8(1), IT TOWERS, HYDERABAD. 3. COMMISSIONER OF INCOME TAX(APPEALS)-2, HYDERABAD 4. THE PR. COMMISSIONER OF INCOME TAX-2, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.