DCIT, Central Circle-2, Hyderabad V. Sri Rao Subba Rao, Hyderabad

ITA 718/HYD/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53521 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 25-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A BHASKAR REDDY
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained investment; Unexplained expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.717/HYD/2011 : ASSESSMENT YEA R 2000-01 ITA NO.718/HYD/2011 : ASSESSMENT YEA R 2002-03 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2 HYDERABAD VS SHRI RAO SUBBA RAO , HYDERABAD (PAN ABSPR 4642 J ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.BHASKAR REDDY RESPONDENT BY : SHRI A.V.RAGHURAM O R D E R PER G.C.GUPTA, VICE PRESIDENT: THESE TWO APPEALS BY THE REVENUE FOR THE ASSESSME NT YEARS 2000-01 AND 2002-03 ARE DIRECTED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME-TAX(APPEALS). BOTH THESE AP PEALS ARE BEING DISPOSED OFF WITH THIS CONSOLIDATED ORDER FOR THE S AKE OF CONVENIENCE. ITA NO.717/HYD/2011 : ASSESSMENT YEAR 2000-01 2. GROUND OF APPEAL NO.1 OF THE REVENUE IS GENERAL IN NATURE AND NEEDS NO ADJUDICATION. 3. GROUND OF APPEAL NO.2 OF THE REVENUE READS AS U NDER- THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.5 LAKHS ON ACCOUNT OF P AYMENT MADE TO SRI C.SUDHAKAR, AS THERE ARE CONTRADICTIONS IN THE REPLY OF THE ASSESSEE WHO EARLIER STATED THAT SUCH TRANSACTION DOES NOT RELATE TO HIM, WHERE AS THE CI T(A) HAD MENTIONED THAT SAID AMOUNT IS REFLECTED IN THE CAS H FLOW STATEMENT OF THE ASSESSEE. ITA NO.717-718/H/2011 SHRI RAO SUBBA RAO, HYDERABAD 2 4. LEARNED DEPARTMENTAL REPRESENTATIVE HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CIT(A) HAS CALLED FOR REMAND REPORT ON THE ISSU E AND THE ASSESSING OFFICER HAS ACCEPTED IN HIS REMAND REPORT THAT THE CLAIM OF THE ASSESSEE MAY BE CONSIDERED ON MERITS, AS THE CASH FLOW STATE MENT REFLECTS THE AMOUNT OF RS.5 LAKHS. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THE CIT(A) HAS CALLED FOR A REMAND REPORT ON THE ISSUE OF ADDITION OF RS .5 LAKHS RELATING TO CASH PAYMENT TO SHRI SUDHAKAR. THE ASSESSING OFFICER IN THE REMAND REPORT HAS ACCEPTED THE CLAIM OF THE ASSESSEE AND HAS STATED THAT THE CLAIM OF THE ASSESSEE MAY BE CONSID ERED ON MERITS, AS THE CASH FLOW STATEMENT REFLECTED THE SAME. IN THIS VI EW OF THE MATTER AND CONSIDERING THE REMAND REPORT OF THE ASSESSING OFFI CER ACCEPTING THAT THE AMOUNT IN QUESTION IS REFLECTED IN THE CASH FLOW ST ATEMENT OF THE ASSESSEE, THE CIT(A) HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. THERE BEING NO MISTAKE IN THE ORDER OF THE CIT(A) IN DELETING THE ADDITION ON THE BASIS OF THE CASH FLOW STATEMENT FI LED BY THE ASSESSEE, WHEREIN THE SAID AMOUNT OF RS. 5 LAKHS WAS REFLECTE D AND DULY ACCEPTED BY THE ASSESSING OFFICER IN HIS REMAND REPORT, WE C ONFIRM THE ORDER OF THE CIT(A) ON THIS ISSUE AND THE GROUND OF APPEAL NO.2 OF THE REVENUE IS REJECTED. 6. GROUND OF APPEAL NO.3 OF THE REVENUE READS AS U NDER- THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) HA S ERRED IN DELETING THE ADDITION OF RS.15,59,852/- BE ING UNACCOUNTED RECEIPT FROM M/S. SPAN CONSTRUCTIONS AS THERE IS CONTRADICTION IN THE REPLY OF THE ASSESSEE THAT THE SAID AMOUNT PERTAINS TO HIM OR TO ANY OTHER PERSON. 7. LEARNED DEPARTMENTAL REPRESENTATIVE HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ITA NO.717-718/H/2011 SHRI RAO SUBBA RAO, HYDERABAD 3 THE ISSUE OF ADDITION OF RS.15,59,852 ON ACCOUNT OF RECEIPT FROM MS/. SPAN CONSTRUCTIONS HAS BEEN ACCEPTED BY THE ASSESSI NG OFFICER IN HIS REMAND REPORT SUBMITTED TO THE CIT(A), AND ACCORDIN GLY, THERE IS NO MISTAKE IN THE ORDER OF THE CIT(A) IN DELETING THE ADDITION IN THIS BEHALF MADE BY THE ASSESSING OFFICER. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THE CIT(A) HAS CALLED FOR A REMAND REPORT FROM THE ASSE SSING OFFICER ON THE ISSUE OF ADDITION OF RS.15,59,852 REPRESENTING THE RECEIPT FROM M/S. SPAN CONSTRUCTIONS AND IN HIS REMAND REPORT, THE AS SESSING OFFICER HAS SUBMITTED THAT FACTS MENTIONED IN THE EXPLANATION O F THE ASSESSEE AND THE CLAIM OF THE ASSESSEE ARE CORRECT. THE ASSESSI NG OFFICER HAS STATED IN THE REMAND REPORT THAT AS PER THE SEIZED MATERIAL, SUCH AN AMOUNT WAS SHOWN AS RECEIVABLE ON 20.3.1999 AND THAT THE SAID ISSUE PERTAINS TO THE PERIOD PRIOR TO BLOCK PERIOD. THE CIT(A) HAS DELET ED THE ADDITION ON THE BASIS OF THE REMAND REPORT SUBMITTED BY THE ASSESSI NG OFFICER ACCEPTING THE CLAIM OF THE ASSESSEE AND HAS FURTHER OBSERVED THAT AS PER THE SEIZED DOCUMENT, SAID AMOUNT WAS SHOWN AS RECEIVABLE AS O N 20.3.1999, I.E. PRIOR TO THE BLOCK PERIOD OF SIX YEARS IN THIS CASE . THERE BEING NO MISTAKE IN THE ORDER OF THE CIT(A) ON THIS ISSUE, WE CONFIR M THE ORDER OF THE CIT(A) AND THE GROUND OF APPEAL NO.3 OF THE REVENUE IS REJECTED. 9. IN THE RESULT, APPEAL OF THE REVENUE FOR THE AS SESSMENT YEAR 2000-01, BEING ITA NO.717/HYD/2011, IS DISMISSED. ITA NO.718/HYD/2011 : ASSESSMENT YEAR 2002-03 10. GROUND OF APPEAL NO.1 OF THE REVENUE IS GENERA L IN NATURE AND NEEDS NO ADJUDICATION. ITA NO.717-718/H/2011 SHRI RAO SUBBA RAO, HYDERABAD 4 11. GROUND OF APPEAL NO.2 OF THE REVENUE READS AS UNDER- THE COMMISSIONER OF INCOME-TAX(A) HAS ERRED IN DEL ETING THE ADDITION OF RS.4,30,000/- AS UNEXPLAINED INVEST MENT IN CONSTRUCTION OF VICTORIA CASTLE WHERE THE ASSESSEE HIMSELF HAD ADMITTED THE SAME AS UNACCOUNTED INVESTMENT DUR ING THE SEARCH OPERATION. 12. LEARNED DEPARTMENTAL REPRESENTATIVE HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION WAS DELETED BY THE CIT(A) ON THE BASIS OF THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER IN WHICH THE CLA IM OF THE ASSESSEE WAS ACCEPTED BY THE ASSESSING OFFICER. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THE CIT(A) HAS CALLED FOR A REMAND REPORT FROM THE ASSE SSING OFFICER REGARDING THE ADDITION OF RS.4,30,000 ON ACCOUNT OF INVESTMENT IN THE CONSTRUCTION OF VICTORIA CASTLE. THE ASSESSING OFF ICER IN HIS REMAND REPORT SUBMITTED THAT THE INVESTMENT IN QUESTION WAS REFLE CTED IN THE CASH FLOW STATEMENT OF THE ASSESSEE FILED BEFORE THE DDIT(INV ). WE FIND THAT THE CIT(A) HAS DELETED THE ADDITION IN QUESTION CONSID ERING THE FACT THAT THE INVESTMENT WAS REFLECTED IN THE ORIGINAL CASH FLOW STATEMENT FILED BEFORE THE DDIT(INV) AND THE ASSESSING OFFICER HAS RELIED ON THE SAME WHILE FURNISHING HIS REMAND REPORT. THERE BEING NO MISTA KE IN THE ORDER OF THE CIT(A) IN DELETING THE ADDITION ON THE BASIS OF THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER ACCEPTING THE CL AIM OF THE ASSESSEE AND ALSO THE FACT THAT THE INVESTMENT WAS REFLECTED IN THE ORIGINAL CASH FLOW STATEMENT FILED BEFORE THE DDIT(INV), ORDER OF THE CIT(A) IS CONFIRMED AND THE GROUND OF APPEAL NO.2 OF THE REVE NUE IS REJECTED. 14. GROUND OF APPEAL NO.3 OF THE REVENUE READS AS UNDER- THE COMMISSIONER OF INCOME-TAX(A) FAILED TO APPREC IATE THE FACT THAT THE ASSESSEE INITIALLY ADMITTED THE P AYMENT OF ITA NO.717-718/H/2011 SHRI RAO SUBBA RAO, HYDERABAD 5 RS.5 LAKHS TO SRI D.N.CHENOY AS UNACCOUNTED AND BUT LATER THE ASSESSEE DISCLOSED THE SAME AS EXPLAINED. 15. LEARNED DEPARTMENTAL REPRESENTATIVE HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION WAS DELETED BY THE CIT(A) ON THE BASIS OF THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER IN WHICH THE CLA IM OF THE ASSESSEE WAS ACCEPTED BY THE ASSESSING OFFICER. 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THE CIT(A) HAS CALLED FOR A REMAND REPORT FROM THE ASSE SSING OFFICER REGARDING THE ADDITION OF RS.5,00,000 MADE BY THE A SSESSING OFFICER WITH REGARD TO PAYMENT CLAIMED TO HAVE BEEN MADE TO SHRI D.N.CHENOY, WHICH WAS NOT ACCOUNTED FOR. THE ASSESSING OFFICER IN HIS REMAND REPORT SUBMITTED THAT THE PAYMENT IN QUESTION WAS REFLECTE D IN THE CASH FLOW STATEMENT OF THE ASSESSEE FILED BEFORE THE DDIT(INV ). WE FIND THAT THE CIT(A) HAS DELETED THE ADDITION IN QUESTION CONSIDE RING THE FACT THAT THE INVESTMENT WAS REFLECTED IN THE ORIGINAL CASH FLOW STATEMENT FILED BEFORE THE DDIT(INV) AND THE ASSESSING OFFICER HAS RELIED ON THE SAME WHILE FURNISHING HIS REMAND REPORT. THERE BEING NO MISTA KE IN THE ORDER OF THE CIT(A) IN DELETING THE ADDITION ON THE BASIS OF THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER ACCEPTING THE CL AIM OF THE ASSESSEE AND ALSO THE FACT THAT THE INVESTMENT WAS REFLECTED IN THE ORIGINAL CASH FLOW STATEMENT FILED BEFORE THE DDIT(INV), ORDER OF THE CIT(A) ON THIS ISSUE IS CONFIRMED AND THE GROUND OF APPEAL NO.3 OF THE REVENUE IS REJECTED. 17. GROUND OF APPEAL NO.4 OF THE REVENUE READS AS UNDER- THE COMMISSIONER OF INCOME-TAX(A) ERRED IN DELETIN G THE ADDITION OF RS.20 LAKHS OBSERVING THAT THE SAID SAL E TRANSACTION WAS RECORDED IN THE BOOKS OF THE FIRM, M/S. ITA NO.717-718/H/2011 SHRI RAO SUBBA RAO, HYDERABAD 6 GOWTHAMI CONSTRUCTIONS, BUT IT WAS RECORDED IN THE BOOKS OF THE FIRM SUBSEQUENT TO THE DATE OF SEARCH. 18. LEARNED DEPARTMENTAL REPRESENTATIVE HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PURCHASE OF LAND AT DOSKAL WAS SHOWN UNDER FIXE D ASSETS DURING BOTH THE FINANCIAL YEARS 2001-02 AND 2002-03 AND THE CLA IM OF THE ASSESSEE WAS VERIFIED BY THE ASSESSING OFFICER AND HAS BEEN ACCEPTED IN THE REMAND REPORT SUBMITTED BY THE CIT(A). 19. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THE CLAIM OF THE ASSESSEE PURCHASE OF LAND AT DOSKAL WAS SHOWN UNDER THE HEAD FIXED ASSETS DURING BOTH THE FINANCIAL YEARS 2001-02 AND 2002-03 AND THE TOTAL INVESTMENT AS ON 31.3.2003 WAS SHOWN BY THE ASSESSEE AT RS.20,08,400. THE EXPLANATION OF THE ASSESSEE WAS VERIFIED AND ACCEPTED BY THE ASSESSING OFFICER IN HIS REMAND REPORT SUBMI TTED TO THE CIT(A). IN THESE FACTS, WE HOLD THAT THERE IS NO MISTAKE IN TH E ORDER OF THE CIT(A) IN DELETING THE ADDITION OF RS. 20 LAKHS MADE ON ACCOU NT OF THE TRANSACTION, WHICH WAS RECORDED UNDER THE HEAD FIXED ASSETS AN D HAS BEEN ACCEPTED BY THE ASSESSING OFFICER IN HIS REMAND REPORT SUBMI TTED TO THE CIT(A). ACCORDINGLY, THE ORDER OF THE CIT(A) IS CONFIRMED A ND GROUND OF APPEAL NO.4 OF THE REVENUE IS REJECTED. 20. GROUND OF APPEAL NO.5 OF THE REVENUE READS AS UNDER- THE COMMISSIONER OF INCOME-TAX(A) FAILED TO APPREC IATE THE FACT THAT THE ASSESSEE INITIALLY AGREED THE PAY MENT OF RS.2 LAKHS TO SRI DWARAKA PRASAD AS UNEXPLAINED EXPENDITURE. 21. LEARNED DEPARTMENTAL REPRESENTATIVE HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PAYMENT OF RS. 2 LAKHS TO SHRI DWARAKA PRASAD W AS REFLECTED IN THE ITA NO.717-718/H/2011 SHRI RAO SUBBA RAO, HYDERABAD 7 CASH FLOW STATEMENT FILED BEFORE THE DDIT(INV) AND THEREFORE, NO ADDITION AS CALLED FOR. HE SUBMITTED THAT THE ASSESSING OFF ICER HAS ACCEPTED THE CLAIM OF THE ASSESSEE IN THIS REGARD IN HIS REMAND REPORT SUBMITTED TO THE CIT(A). 22. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN T HE FACTS OF THE CASE, WE HOLD THAT THERE IS NO MISTAKE IN THE ORDER OF THE CIT(A) IN DELETING THE ADDITION OF RS. 2 LAKHS ON ACCOUNT OF PAYMENT OF RS.2 LAKHS MADE TO SHRI DWARAKA PRASAD, SINCE THE SAME WAS REF LECTED IN THE CASH FLOW STATEMENT FILED BY THE ASSESSEE BEFORE THE DDI T(INV) AND THE SAME WAS ALSO ACCEPTED BY THE ASSESSING OFFICER IN HIS R EMAND REPORT SUBMITTED BEFORE THE CIT(A). ACCORDINGLY, THE ORDER OF THE C IT(A) ON THIS ISSUE IS CONFIRMED AND THE GROUND OF APPEAL NO.5 OF THE REVE NUE IS REJECTED. 23. IN THE RESULT, REVENUES APPEAL FOR THE ASSESS MENT YEAR 2002-03, BEING ITA NO.718/HYD/2011, IS ALSO DISMISS ED. 24. TO SUM UP, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 5 TH AUGUST, 2011 SD/- SD/- (CHANDRA POOJARI) (G.C. GUPTA) A CCOUNTANT MEMBER V ICE PRESIDENT DATED THE 5 TH AUGUST, 2011 COPY FORWARDED TO: 1. SHRI RAO SUBBA RAO, PLOT NO.415, ROAD NO.18, JUB ILEE HILLS, HYDERABAD 2. DY. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 2, HYDERABAD 3. COMMISSIONER OF INCOME-TAX(APPEALS) III, HYDERAB AD 4. COMMISSIONER OF INCOME - TAX , CENTRAL, HYDERABAD 5. THE D.R., ITAT, HYDERABAD. B.V.S