Gampa Mallesham, Hyderabad V. Dy. Commissioner of Income Tax , Circle-4(1), Hyderabad

ITA 725/Hyd/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0571 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-B
• Next Hearing Date: 07-04-2020
• Assessment Year: 2009-2010
• Appeal Filed On: 23-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment
• Section: 143(3); 147; 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH SMC - B , HYDERABAD BEFORE SHRI P. MADHAVI DEVI, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCE) ITA NO. 725/HYD/2018 ASSESSMENT YEAR: 20 09 - 10 GAMPA MALLESHAM, HYDERABAD. PAN ACAPG1850 C VS. DY. COMMISSIONER OF INCOME - TAX, CIRCLE 4 (1), HYDERABAD. (APP ELLANT ) (RESPONDENT ) ASSESSEE BY : S HRI S. RAMA RAO REVENUE BY : S HRI SUNKU SRINIVAS DATE OF HEARING : 18 - 0 6 - 20 20 DATE OF PRONOUNCEMENT : 18 - 0 6 - 20 20 ORDER THIS IS AN ASSESSEE S APPEAL FOR THE AY 2009 - 10 AGAINST THE ORDER OF CIT(A) 1 , HYDERABAD, DATED 1 5 /1 2 /201 7 . 2. TH IS CASE W AS TAKEN UP FOR HEARING ON 18 - 06 - 2020 THROUGH VIDEO CONFERENCING AND BOTH THE PARTIES WERE HEARD. 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL, CARRYING ON BUSINESS AS CLEARING & FORWARDING AGENT FOR TWO PHARMACEUTICAL COMPANIES, FILED HIS RETURN OF INCOME FOR THE AY 2009 - 10 ON 30/09/2009 ADMITTING TOTAL INCOME OF RS. 6,79,363/ - . THE 2 ITA.NO. 725/HYD/2018 GAMPA MALLESHAM, HYD . AS SESSMENT WAS INITIALLY COMPLETED ON 16/12/2011 DETERMINING TOTAL INCOME AT RS. 8,33,608/ - THEREAFTER, THE AO ISSUED NOTICE U/S 148 OF THE IT ACT AND DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) RWS 147 OF THE ACT, FROM THE BALANCE SHEET OF THE ASSESSEE THE AO NOTICED THAT THE ASSESSEE HAD SHOWN LIABILITIES OF (I) AN AMOUNT OF RS. 17,14,587/ - TOWARDS HOUSING LOAN ON GANDHINAGAR HOUSE @ 50% TAKEN FROM ICICI BANK , AND (II) AN AMOUNT OF RS. 13,88,305/ - TOWARDS HOUSING LOAN FOR ALWAL HOUSE TAKEN FROM IDBI BANK. OBSERVING THAT THE ASSESSEE HAD NOT SHOWN THE CONSTRUCTION COST IN RESPECT OF THE ABOVE PROPERTIES, THE AO WAS OF THE OPINION THAT THE PROPERTIES SHOWN ON THE LIABILITIES SIDE OF THE BALANCE SHEET ARE UNEXPLAINED INVESTMENT S AND HE ACCORDINGLY, BROUGHT TH E ABOVE AMOUNTS TO TAX U/S 69 OF THE ACT. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) STATING THAT THE LOANS WERE TAKEN FROM THE RESPECTIVE BANKS AND WERE USED IN THE CONSTRUCTION OF THE BUILDINGS AND, THEREFORE, THE ADDITION U/S 69 I S NOT SUSTAINABLE. 5. THE CIT(A), HOWEVER, DISMISSED THE APPEAL BY OBSERVING THAT THE LOAN FROM ICICI BANK WAS TAKEN AF TER THE PURCHASE OF THE PROPERTY AND FURTHER WITH REGARD TO THE LOAN FROM IDBI BANK , SHE HELD THAT IT WAS TAKEN BY ONE SHRI GAMPA SRINIVAS AND, THE ASSESSEE WAS NOT THE LOANEE. S HE ACCORDINGLY DISMISSED THE APPEAL OF THE ASSESSEE AND THE ASSESSEE IS IN S ECOND BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 3 ITA.NO. 725/HYD/2018 GAMPA MALLESHAM, HYD . 1) THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ACTI ON OF THE ASSESSING OFFICER IN INITIATING PROCEEDINGS U/S 147 OF THE I.T.ACT. . 3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.31,02,892/ - MADE BY THE ASSESSING OFFICER TOWARDS UNEXPLAINED INVESTMENT IN ACQUIRIN G THE PROPERTIES SITUATED AT H.NO.1 - 3 - 176/35/22/4, PLOT NO.4, BHAGYALAKSHMI NAGAR, GANDHI NAGAR, HYDERABAD AND HOUSE AT ALWAL BEARING NO.1 - 2140/1/130, PLOT NO.130, SAIBABA NAGAR, ALWAL VILLAGE, MALKAJGIRI MANDAL, RANGA REDDY DISTRICT. 4) ANY OTHER GROUND/ GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 6. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PROPERTIES WERE PURCHAS ED DURING THE EARLIER AYS I.E. 2007 - 08 AND 2008 - 09 AND THE LOANS WERE ALSO TAKEN IN THE EARLIER F YS AND, THEREFORE, THE LOAN AMOUNTS CANNOT BE BROUGHT TO TAX IN THE AY UNDER CONSIDERATION AS UNEXPLAINED INVESTMENT. HE SUBMITTED THAT BOTH THE AO AND CIT(A) HAVE FAIL ED TO CONSIDER THE SAME AND ERRONEOUSLY MADE THE ADDITION U/S 69 OF THE ACT. 7. THE LD. DR, HOWEVER, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 8. HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL ON RECORD, I FIND THAT THE AO HAS MADE THE ADDITI ON U/S 69 OF THE ACT TOWARDS UNEXPLAINED INVESTMENT IN THE PROPERTIES, ONE AT GANDHINAGAR AND THE OTHER AT ALWAL. AS SEEN FROM THE SALE DEED FILED IN THE PAPER BOOK 4 ITA.NO. 725/HYD/2018 GAMPA MALLESHAM, HYD . AT PAGES 12 TO 19, THE PROPERTY AT GANDHINAGAR WAS PURCHASED ON 10 TH NOVEMBER, 2006 BY REGI STERED SALE DEED NO. 4294 OF 2006 AND THE PAYMENT OF THE CONSIDERATION WAS MADE BY WAY OF C ASH AND ALSO BY WAY OF LOAN DRAWN FROM ING VYSYA BANK. THE ASSESSEE HAS SUBSEQUENTLY TAKEN A MORTGAGE LOAN FROM ICICI BANK AND THAT TOO IN FY 2006 - 07 RELEVANT TO AY 2007 - 08. THEREFORE, NEITHER THE PROPERTY WAS PURCHASED DURING THE RELEVANT AY , NOR WAS THE LOAN TAKEN DURING THE RELEVANT F Y. THEREFORE, THE ADDITION MADE TOWARDS UNEXPLAINED INVESTMENT FOR THIS PROPERTY LOAN IS NOT SUSTAINABLE. 8.1 FURTHER, I FIND THAT THE PROPERTY AT ALWAL WAS PURCHASED VIDE REGISTERED SALE DEED NO. 212 OF 2008 BY THE ASSESSEE AND HIS BROTHER SHRI G. SRINIVAS ON 5 TH FEBRUARY, 2008 RELEVANT TO AY 2008 - 09 AND THE LOAN FOR THE SAME WAS ALSO OBTAINED BY G. SRINIVAS FROM IDBI BANK ON 04/01/2008. THE ASSESSEE SUBMITTED THAT HE IS CO - APPLICANT TO THE LOAN. BUT, SINCE HIS NAME IS NOT MENTIONED IN THE ACCOUNT STATEMENT, THE SAME CANNOT BE ACCEPTED AS CORRECT. HOWEVER, THE PROPERTY HAS BEEN PURCHASED DURING THE FY 2007 - 08 RELE VANT TO AY 2008 - 09 AND NOT DURING THE AY BEFORE US I.E. 2009 - 10. THEREFORE, THE ADDITION MADE U/S 69 AS UNEXPLAINED INVESTMENT IN THIS PROPERTY IS ALSO NOT SUSTAINABLE. 5 ITA.NO. 725/HYD/2018 GAMPA MALLESHAM, HYD . 8.2. THEREFORE , THE ADDITION OF RS. 31,02,892/ - MAD E U/S 69 TOWARDS UNEXPLAINED INV ESTMENT IN THE ABOVE PROPERTIES IS HEREBY DELETED. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 18 T H JUNE , 20 20 SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMEBR HYDERABAD, DATED: 18 TH JUNE, 2020 KV 1) SRI GAMPA MALLESHAM, 1 - 3 - 183/40/21/23, P&T COLONY, SRI RAJA RESIDENCY, OPP. GANDHINAGAR POST OFFICE, HYDERABAD 500 029 2) DCIT, CIRCLE 4(1), IT TOWERS, AC GUARDS, HYDERABAD . 3) CIT(A) - 1 , HYDERABAD 4) PR. CIT - 1 HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6) GUARD FILE.