Satpal Singh Bagga, Hyderabad V. Income Tax Officer, Ward-14(2), Hyderabad

ITA 721/Hyd/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4534 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 24-01-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 19-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: P MURALI MOHANA RAO
• Keywords: Opportunity of being heard; Additional evidence; Agreed addition
• Section: 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 721/ HYD/201 8 AND SA NO. 134/HYD/18 ASSESSMENT YEAR: 20 1 3 - 14 SATPAL SINGH BAGGA, HYDERABAD. PAN A BXPB 9330J VS. INCOME - TAX OFFICER, WARD 14 ( 2 ), HYDERABAD. APPELLANT RESPONDENT ASSESSEE BY: S HRI P. MURALI MOHANA RAO REVENUE BY: SHRI NILANJAN DEY DATE OF HEARING: 2 4 / 0 1 / 201 9 DATE OF PRONOUNCEMENT: 08 / 0 2 /201 9 O R D E R PER S. RIFAUR RAHMAN , AM: T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) 6 , HYDERABAD, DATED, 02 /0 1 /201 8 FOR AY 20 1 3 - 14. 2. BRIEF FACTS OF THE CASE ARE THAT THE A SSESSEE , AN INDIVIDUAL , DERIVING INCOME FROM BUSINESS, CAPITAL GAINS, AND OTHER SOURCES, FILED HIS RETURN OF INCOME FOR THE AY 201 3 - 1 4 ON 31 /0 8 /201 3, DECLARING TOTAL INCOME OF RS. 17,81,000/ - , WHICH WAS PROCESSED U/S 143(1) OF THE INCOME - TAX ACT, 1961 ( IN SHORT THE ACT). SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S 143(2) WAS ISSUED ON 03 /0 9 /201 4 AN D ALSO NOTICE U/S 1 42(1) WAS ISSUED ON 13/01/2015. IN RESPONSE, THE AR OF THE ASSESSEE, FILED THE REQUIRED INFORMATION. I.T.A. NO. 721 /HYD/1 8 & SA NO. 134/HYD/18 SATPAL SINGH BAGGA 2 2.1. ON VERIFICATION OF THE RETURN OF INCOME, STATEMENT OF COMPUTATION OF INCOME AND INFORMATION FURNISHED BY THE ASSESSEE, THE AO OBSERVED THAT THE ASS ESSEE HAS CLAIMED LOSS OF RS. 8,00,000/ - ON ACCOUNT OF SALE OF LIQUOR LICENCE. WHEN QUESTIONED, THE ASSESSEE SUBMITTED THAT THE ASSESSEE ALONG WITH TWO OTHERS HAD PU RC HASED LIQUOR LICENCE A ND HIS SHA R E FOR THE SAME IS RS. 1 0,27,161/ - . AS SHOP / GODOWN PLAC E FOR CONDUCTING BUSINESS AT JUBILEE H ILLS WAS NOT AVAILABLE, THEY HAVE SOLD THE LICENSE AND RECEIVED RS. 2,27,161/ - AS HIS SHARE, THEREBY I NCURRED LOSS OF RS. 8,00,000/ - . THE AO HELD THAT A S THE ASSESSEE HAS NOT PERFORMED ANY BUSINESS D URING THE YEAR UNDER CONSIDERATION AND THE SALE OF THE LICENSE IS NOT A BUSINESS ACTIVITY , THE LOSS OF RS.8.00, 000/ - CLAIMED AS BUSINESS LOSS BY THE ASSESSEE WAS DISALLOWED FOR WHICH THE A.R. OF THE ASSESSEE WAS AGREED UPON. 3. WHEN THE ASSESSEE PREFERRED AN APPEAL AGAINST THE ORDER OF AO BEFORE THE CIT(A), THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSE E ON THE GROUND THAT IT IS AGREED ADDITION AND FURTHER PROCEEDED TO DISPOSE OF THE APPEAL ON MERIT ALSO. THE LD. CIT(A) HAS FOUND SHORT COMINGS IN THE SUBMISSION OF THE ASSESSEE THAT IT IS NOT SUPPORTED WITH THE PROPER EVIDENCES. 4. AGAINST THE ORDER OF C IT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING AS MANY AS 25 GROUNDS, THE SUM AND SUBSTANCE OF WHICH IS THE ACTION OF CIT(A) IN CONFIRMING THE ADDITION OF RS. 8,00,000/ - MADE BY THE AO TOWARDS DISALLOWANCE OF ASSESSEES CLAIM OF LOSS ON SALE OF LIQUOR LICENCE. 5. BEFORE US, THE LD. AR OF THE ASSESSEE FILED A PETITION REQUESTING TO ADMIT THE FOLLOWING ADDITIONAL EVIDENCE, WHICH I.T.A. NO. 721 /HYD/1 8 & SA NO. 134/HYD/18 SATPAL SINGH BAGGA 3 W AS NOT FILED BEFORE THE LOWER AUTHORITIES ON THE GROUND THAT THE A DDITIONAL EVIDENCE WAS NOT AVAILABLE DURING THE PROCEEDINGS BEFORE THE LOWER AUTHORITIES, HENCE, FILED AS ADDITIONAL EVIDENCE BEFORE ITAT. HE FURTHER SUBMITTED THAT THE THIS ADDITIONAL EVIDENCE IS IMPORTANT IN CONNECTION WITH THE DISPOSAL OF THE APPEAL: 1. MEMORANDUM OF UNDERSTANDING WITH CHEGURU VENKATA GOUD, WHI CH IS AT PAGES 35 TO 37 OF THE PAPER BOOK FILED 6. LD. DR, OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE SUBMITTED BY THE LD. AR AND SUPPORTED THE ORDERS OF REVENUE AUTHORITIES BELOW. 7. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON R ECORD. BEFORE US, THE ASSESSEE FILED AN ADDITIONAL EVIDENCE, FOR THE FIRST TIME, STATING THAT THE SAME IS NOT AVAILABLE TO SUBMIT DURING THE PROCEEDINGS BEFORE THE LOWER AUTHORITIES. WE ARE OF THE CONSIDERED OPINION THAT THE RELEVANT MEMORANDUM OF UNDERSTA NDING BETWEEN THE ASSESSEE AND OTHER RELATED PARTIES ARE RELEVANT AND BINDING EVIDENCE FOR TRANSFER OF LIQUOR LICENCE. THIS DOCUMENT WILL GIVE ANSWERS TO THE SHORT COMINGS HIGHLIGHTED BY THE LD. CIT(A) IN HIS ORDER. FURTHER , THE AO ALSO HAD NO OCCASION TO CONSIDER THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE FOR THE FIRST TIME BEFORE US AND ALSO AO CAN VERIFY THE ADDITIONAL EVIDENCE WITH THE FINDINGS OF LD. CIT(A). HENCE , THE CASE IS REMITTED BACK TO THE FILE OF THE AO WITH A DIRECTION TO CONSIDER THE EVIDENCE FILED BY THE ASSESSEE AND ADJUDICATE THE ISSUE DE - NOVO IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE MATTER. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NO. 721 /HYD/1 8 & SA NO. 134/HYD/18 SATPAL SINGH BAGGA 4 7. AS THE CORRESPONDING APPEAL OF THE SA IS ADJUDICATED AS ABOVE, THE SA FILED BY THE ASSESSEE BECOMES INFRUCTUOUS AND THEREFORE, THE SAME IS DISMISSED AS INFRUCTUOUS. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AND THE SA IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 8 TH FEBRUA RY, 201 9. SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 8 TH FEBRUARY , 201 9. KV COPY FORWARDED TO: 1. SATPAL SINGH BAGGA, C/O P. MURALI & CO., CAS, 6 - 3 - 655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82 2 . ITO, WARD 14 ( 2 ), HYDERABAD . 3 . CIT (A) - 6 , HYDERABAD 4. PR. CIT 6 , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE