Sri Lakshmi Motors, Hyderabad V. ACIT, Hyderabad

ITA 695/HYD/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3332 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-03-2010
• Assessment Year: 1999-2000
• Appeal Filed On: 25-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A PATRA
• Assessee Lawyers: Y R RAO
• Keywords: Unexplained cash credit; Unexplained investment
• Section: 43B; 68; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER . ITA NO.695/HYD/09 : A SSESSMENT YEAR 1999-2000 SRI LAXMI MOTORS, HYDERABAD. PAN:AACFS52448D VS ACIT, CIR-9(1), HYDERABAD. (APPLICANT) (RESPONDENT) APPELLANT BY : SHRI Y.R. RAO RESPONDENT BY : SHRI A. PATRA O R D E R PER AKBER BASHA, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER UNDER S.263 OF THE ACT OF THE CIT, HYDERABAD DATED 30 -3-2009 AND IT PERTAINS TO THE ASSESSMENT YEAR 2003-04. 2. GROUNDS RAISED IN THIS APPEAL ARE AS FOLLOWS: '1. THE ORDER UNDER SECTION 263 IN F.NO.46/263/CI T-VI/07-08 DATED 30TH MARCH, 2009 PASSED BY THE CIT-6 HYDERABAD IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. (A) THE CIT ERRED BOTH ON FACTS AND IN LAW IN TREATI NG RS.7,00,000 AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 I N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2 (B)THE CIT FAILED TO APPRECIATE THAT THE AMOUNT RECEI VED BY THE ASSESSEE IS DEBT TO DUE TO IT BUT NOT CASH CREDIT FALLI NG WITHIN THE PROVISIONS OF SECTION 68. 3. (A) THE CIT ERRED IN TREATING THE AMOUNT OF RS.8, 13,293 AS UNPAID SALES TAX LIABILITY WITHOUT CONSIDERING THE PROO F FILED BEFORE HIM REGARDING PAYMENT OF SALES TAX WITHIN THE TIME ALLOWED. (B) WHILE IN THE SHOW CAUSE NOTICE THE CIT PROPOSED ADDI TION OF RS.3,00,000 IN THE FINAL ORDER, HOWEVER, HE PROCEE DED TO ADD RS. 8,13,293 WITHOUT GIVING THE ASSESSEE ANY FURTHER OPPORTUNITY TO EXPLAIN THE DISCREPANCY, IF ANY. (C) THE CIT ALSO ERRED IN DISBELIEVING THE CERTIFICATE ISSUED REGARDING THE PAYMENT BY THE SALES TAX AUTHORITIES ON THE GROUND OF CERTAIN INCONSISTENCIES, WHICH IS CONTRARY TO TH E FACTS ON RECORD. 4. THE ASSESSEE CRAVES LEAVE TO MODIFY OR AMEND ANY GROU NDS OR ADD ANY FURTHER GROUNDS.' 3. AT THE OUTSET, WE FIND THAT THE CIT ASSUMED HIS JU RISDICTION UNDER S.263 OF THE ACT HOLDING THAT THE ASSESSMENT COMPLE TED BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE ON TWO ISSUES. THE FIRST ISSUE BEING, TH E CIT DIRECTED THE ASSESSING OFFICER TO BRING TO TAX AN AMOUNT OF RS.7,0 0,000/- BEING CASH RECEIPT FOUND REFLECTED IN THE ASSESSEE'S BOOKS OF ACCOU NT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER B ROUGHT THE SAID AMOUNT TO TAX AS UNEXPLAINED INVESTMENT IN HI S ORDER UNDER S.143 (3) OF THE ACT ON 22-3-2000. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT (A). THE CIT (A) DELETED THE SAID ADDITION OF RS.7 LAKHS VIDE HIS ORDER DATED 31-1-2001 ON THE GROUND THAT THE ASSESSE E HAD 3 SUFFICIENT CASH BALANCE TO MAKE SUCH ADVANCE OF PURCHASE OF THE LAND AND HENCE, THE ADDITION CANNOT BE SUSTAINED AS UNEXPLAI NED INVESTMENT IN THE CASE OF THE ASSESSEE. THE DEPARTMENT FILED AN APPE AL BEFORE THIS TRIBUNAL AND IN TURN DISMISSED THE APPEAL OF THE REVEN UE AND CONFIRMED THE ORDER OF THE CIT (A). WE NOTICED THAT THE ASSESSMEN T WAS REOPENED UNDER S.263 OF THE ACT ONLY AFTER THE DECISION RENDERE D BY THE ITAT IN THE INSTANT CASE ON THE SAME ISSUE, I.E., THE TRIBUNAL R ENDERED THE DECISION ON 27-4-2005 WHEREAS THE SHOW CAUSE NOTICE WAS ISSUE D BY THE CIT FOR REVISION UNDER S.263 OF THE ACT ON 6-2-2009. HENCE IN OUR CONSIDERED OPINION, THE CIT IS NOT JUSTIFIED IN ASSUMING HIS JURISDICTION UNDER S. 263 OF THE ACT BECAUSE, THE DISCUSSION IN THE OR DER UNDER S.263 AND THE FIGURES DISCUSSED THEREIN ARE PART OF THE GROUNDS OF THE APPEAL BEFORE THE ITAT AND SINCE THE MATTER WAS ALREAD Y DISCUSSED BY THE CIT (A) AND REACHED ITS FINALITY BEFORE THIS TRIBU NAL, THIS ISSUE IS OUTSIDE THE SCOPE OF THE PROVISIONS OF SECTION 263 OF THE ACT. THE DEPARTMENT CANNOT BE PERMITTED TO BEGIN WITH FRESH LI TIGATION BECAUSE OF NEW VIEWS AND ENTERTAINING NEW FACTS OR NEW VERSIONS. 4. THE SECOND ISSUE BEING DISALLOWANCE OF SALES-TAX PAYME NT UNDER S.43B OF THE ACT. IT IS EVIDENT FROM THE CERTI FICATES OF THE CTO DATED 4-5-2009 PLACED AT PAGE-98 OF THE PAPER BOOK ( VOL.1) AND CONFIRMATION FROM THE BANK DATED 22-5-2009, WHICH IS P LACED AT PAGE- 99 OF THE PAPER BOOK (VOL.1) THAT THE ASSESSEE HAD PAID THE TAXES BEFORE THE DUE DATE OF FILING OF THE RETURN AND HENCE THE SA ME WAS PAID WITHIN THE TIME ALLOWED. IN VIEW OF THIS, THERE IS NO CASE FOR ADDITION OF ANY AMOUNT UNDER S. 43B OF THE ACT. IN VIEW OF OUR ABOVE FINDING, THE COMMISSIONER IS NOT JUSTIFIED IN ASSUMING HIS JURISDICTIO N UNDER S. 263 OF THE ACT ON BOTH THE ABOVE ISSUES AS THE ORDER PASSED BY THE ASSESSING OFFICER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO T HE INTERESTS OF 4 REVENUE. WE THEREFORE DEEM IT PROPER TO CANCEL HIS ORD ER AND RESTORE THAT OF THE ASSESSING OFFICER. WE ORDER ACCORDINGLY. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STAND S ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 30-4-2010. SD/- SD/- (G.C. GUPTA) (AKBER BASHA) VICE PRESIDENT ACCOUNTANT MEMBER. DT/-30-4-2010. COPY FORWARDED TO: 1. SRI LAKSHMI MOTORS, 16-11-20/6/1/172, SALEEM NAG AR COLONY, OPP. MALAKPET TV TOWER, HYDERABAD. 2. 3. THE ACIT, CIR-9(1), HYDERABAD. CIT,A P, HYDERABAD. 4. THE D.R., ITAT, HYDERABAD JMR *