Usha Rani Konijeti , Hyderabad V. Income Tax Officer, Ward-7(2), Hyderabad

ITA 768/Hyd/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9303 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 24-06-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 25-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJEEV BENIWAL
• Assessee Lawyers: LAXMINIWAS SHAR MA
• Keywords: Retraction
• Section: 133A

Judgement Text

ITA NOS 767 766 AND 768 OF 2019 ASHOK KUMAR KONIJET I AND OTHERS HYDERABAD. PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER APPEAL IN ITA NO ASSESSEE RESPONDENT A.Y 767/HYD/2018 ASHOK KUMAR KONIJETI HYDERABAD PAN:AHBPK1507C INCOME TAX OFFICER WARD 7(2) HYDERABAD 2015-16 766/HYD/2018 PALLAVI MANASANAPALLI HYDERABAD PAN:AFXPM9508H -DO- 2015-16 768/HYD/2018 USHA RANI KONIJETI HYDERABAD PAN:AHBPK1510H -DO- 2015-16 FOR ASSESSEE : SHRI LAXMI NIWAS SHARMA FOR REVENUE : SHRI RAJEEV BENIWAL, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. ALL THE THREE APPEALS ARE FILED BY THE RESPECTIVE ASSESSEES FOR THE A.Y 2015-16 AGAINST THE ORDER OF THE CIT (A)-8, HYDERABAD, DATED 22.02.2018. SINCE THE ISSUE IS CO MMON IN ALL THE THREE APPEALS AND THE CIT (A) HAS ALSO PASSED A COMMON AND CONSOLIDATED ORDER, ALL THE THREE APPEALS WERE HEAR D TOGETHER AND ARE DISPOSED OF BY THIS COMMON AND CONSOLIDATED ORD ER. DATE OF HEARING: 24.06.2019 DATE OF PRONOUNCEMENT : 03.07.2019 ITA NOS 767 766 AND 768 OF 2019 ASHOK KUMAR KONIJET I AND OTHERS HYDERABAD. PAGE 2 OF 7 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEES B EFORE US ARE SHRI ASHOK KUMAR KONIJETI, HIS WIFE SMT. USHA R ANI AND DAUGHTER MS.PALLAVI MANASANAPALLI. THEY ARE OWNING AND RUNNING THREE FUNCTION HALLS IN THE NAME AND STYLE OF ASHOK A GARDENS, USHA GARDENS AND PALLAVI GARDENS. THERE WAS A SURVE Y U/S 133A OF THE ACT IN THE BUSINESS PREMISES OF THE ASSESSEE I.E. SHRI ASHOK KUMAR KONIJETI ON 19.9.2014, DURING THE COURSE OF W HICH, THE ASSESSEE ADMITTED ADDITIONAL INCOME OF RS.60.00 LAK HS BEING THE AMOUNT INVESTED FOR RENOVATION OF FUNCTION HALLS. R S. 12,18,500/- OF CASH FOUND AT THE TIME OF SURVEY WAS EXPLAINED T O THE SUM RECEIVED AS ADVANCES FROM CUSTOMERS WHO BOOKED THE FUNCTION HALLS, BUT NO DETAILS WERE AVAILABLE. THE AO OBSERV ED THAT ALL THE THREE PERSONS WERE MAINTAINING THE ACCOUNTS AT ONE PLACE AND THE ADDITIONAL INCOME DECLARED BY SHRI ASHOK WAS REQUES TED TO BE CONSIDERED IN ALL OF THEIR HANDS EQUALLY. ACCORDING LY, HE BROUGHT TO TAX RS.20.00 LAKHS IN EACH OF THREE ASSESSEES. H OWEVER, THE ASSESSEES WHILE FILING THEIR RETURNS OF INCOME, DID NOT OFFER THE ADDITIONAL INCOME TO TAX. WHEN ASKED AS TO WHY THE ADDITIONAL INCOME OFFERED AT THE TIME OF SURVEY WAS NOT DECLAR ED, THE ASSESSEE SHRI ASHOK FILED ANOTHER P&L A/C WHEREIN T HE RENT RECEIVED FROM M/S. ASHOKA GARDEN OF RS.30.00 LAKHS WAS BIFURCATED AND RS.20.00 LAKHS SHOWN AS RENT RECEIVE D AND BALANCE OF RS.10.00 LAKHS AS DISCLOSURE DURING THE SURVEY. THE AO HOWEVER, FOUND THAT THE ASSESSEE DID NOT PRODUCE ANY BILL/RECEIPT EVIDENCING THAT THE RENT RECEIVED FROM ASHOK GARDENS IS ONLY RS.20.00 LAKHS. THEREFORE, OBSERVING THAT T HE BIFURCATION OF RENT IS AN AFTERTHOUGHT, HE HELD THAT THE ADDITIONA L INCOME OFFERED DURING THE COURSE OF SURVEY HAS TO BE SHOWN SEPARAT ELY. THEREFORE, HE BROUGHT A SUM OF RS.24,06,200/- TO TA X IN THE ITA NOS 767 766 AND 768 OF 2019 ASHOK KUMAR KONIJET I AND OTHERS HYDERABAD. PAGE 3 OF 7 HANDS OF THE ASSESSEE. SIMILAR ADDITIONS WERE ALSO MADE IN THE HANDS OF HIS WIFE AND DAUGHTER WHO ARE ALSO ASSESSE ES BEFORE US. AGGRIEVED, ALL THE THREE ASSESSEES PREFERRED APPEAL S BEFORE THE CIT (A), WHO CONFIRMED THE ORDER OF THE AO AND THE ASSE SSEES ARE IN FURTHER APPEALS BEFORE US. 3. THE ASSESSEE, SHRI AHOK KUMAR KONIJETI, HAS RAIS ED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADD ITION OF RS.20,00,000 MADE BY AO MERELY ON THE BASIS OF SWORN STATEMENT GIVEN BY ASSESSEE, WHICH WAS GIVEN UNDER THE COERCION AND PRESSURE OF THE OFFICER. 2. THE LEARNED CIT (A) ERRED IN IGNORING THE FACT T HAT NEITHER AO NOR THE SURVEY OFFICER HAS BROUGHT ON RE CORD ANY CORROBORATIVE EVIDENCE TO SUBSTANTIATE THE ADDI TIONS MADE. 3. THE LEARNED CIT (A) ERRED IN IGNORING THE SUBMIS SIONS OF THE ASSESSEE THAT NO LOOSE PAPER WAS FOUND DURIN G SURVEY AND IN FACT ASSESSEE WAS PRESSURIZED TO MAKE SUCH DISCLOSURE ABOUT INVESTMENTS. ALL THE BOOKS/DOCUMENTS ARE IN THE CUSTODY OF THE DEPARTMEN T. THEY CAN PRODUCE THE EVIDENCE. 4. THE LEARNED CIT (A) ERRED IN STATING THAT NO RECEIPTS/BILLS WERE PRODUCED BEFORE AO FOR VERIFICA TION IGNORING THAT ALL BOOKS/DOCUMENTS AND LOOSE SHEETS WERE IMPOUNDED BY INCOME TAX OFFICER. 5. FOR THESE AND ANY OTHER GROUNDS WHICH MAY BE RAISED ON OR BEFORE HEARING OF THE APPEAL. 4. THE LEARNED COUNSEL FOR THE ASSESSEE, WHILE REIT ERATING THE SUBMISSIONS MADE BY THE ASSESSEES BEFORE THE AU THORITIES BELOW, SUBMITTED THAT DURING THE SURVEY, DUE TO COE RCION AND UNDUE INFLUENCE, THE ASSESSEE HAD ADMITTED THE ADDI TIONAL INCOME OF RS.60.00 LAKHS IN ALL THE THREE HANDS BUT HAS RE TRACTED THE SAME BY NOT OFFERING THE SAME TO TAX IN THEIR RETUR NS OF INCOME. ITA NOS 767 766 AND 768 OF 2019 ASHOK KUMAR KONIJET I AND OTHERS HYDERABAD. PAGE 4 OF 7 HE SUBMITTED THAT WHEN THERE IS NO MATERIAL FOUND D URING THE COURSE TO CORROBORATE TO THE STATEMENT GIVEN DURING THE SURVEY AND THE INCOME IS NOT OFFERED TO TAX IN THE RETURNS OF INCOME, IT AMOUNTS TO THE ADMISSION BEING RETRACTED, THEN THE ADDITION CANNOT BE SUSTAINED. IN SUPPORT OF HIS CONTENTION, HE PLACED RELIANCE UPON THE FOLLOWING DECISIONS: I) HON'BLE HIGH COURT OF ANDHRA PRADESH IN THE CASE OF GANJAM CHINA YELLAPPA & OTHERS VS. ITO 370 OTR 671 II) HON'BLE HIGH COURT OF A.P. IN THE CASE OF CIT V S. NARESH KUMAR AGARWAL, 369 ITR 171 III) ITAT HYDERABAD IN THE CASE OF BS LTD VS. ACIT IN ITA NO.2187/HYD/2017 IV) ITAT HYDERABAD IN THE CASE OF SHRI K.CH SUBBA R AO VS. ACIT IN ITA NO.1657/HYD/2013 V) ITAT LUCKNOW IN THE CASE OF M/S. HABBIB TANNERY PVT. LTD VS. DCIT IN ITA NO.394/LKW/2018. VI) ITAT DELHI IN THE CASE OF ACIT CENTRAL CIRCLE 1 7 VS. BRAHM DATT IN ITA NO.6318/DEL/2015. 5. FURTHER, HE SUBMITTED THAT THE OTHER TWO ASSESSE ES SMT. USHA RANI AND SMT. PALLAVI ARE INDEPENDENT ASS ESSEES AND NEITHER WERE THEY SURVEYED, NOR WERE THEIR STATEMEN TS RECORDED DURING THE COURSE OF SURVEY OR DURING THE ASSESSMEN T PROCEEDINGS. IT IS SUBMITTED THAT ON THE BASIS OF S TATEMENT OF SHRI ASHOK KUMAR KONIJETI, ADDITIONS CANNOT BE MADE IN T HE HANDS OF THESE TWO ASSESSEES. HE FURTHER SUBMITTED THAT USHA GARDENS WAS ALREADY DEMOLISHED BY THE TIME OF SURVEY AND THEREF ORE, THERE COULD NOT HAVE BEEN ANY EXPENDITURE ON RENOVATION O F THE ALLEGED FUNCTION HALL. HE SUBMITTED THAT THE AO HAS NOT BEE N ABLE TO BRING ANY MATERIAL ON RECORD TO SUBSTANTIATE THE AD DITIONS MADE BY THE AO. HE SUBMITTED THAT THESE FACTS WERE ALSO BROUGHT TO THE NOTICE OF THE CIT (A), BUT THE CIT (A) HAS NOT APPR ECIATED THE SAME ITA NOS 767 766 AND 768 OF 2019 ASHOK KUMAR KONIJET I AND OTHERS HYDERABAD. PAGE 5 OF 7 AND MERELY CONFIRMED THE SAME. THEREFORE, ACCORDING TO HIM, THE ADDITIONS MADE BY THE AO AND CONFIRMED BY THE CIT ( A) HAVE TO BE DELETED. 6. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THA T THE ASSESSEE HAS NOT RETRACTED THE STATEMENTS GIVEN BY HIM DURING THE SURVEY PROCEEDINGS, BUT IN FACT, HAS GIVEN ANOT HER STATEMENT DURING THE COURSE OF ASSESSMENT PROCEEDINGS CONFIRM ING THAT HE HAS INCURRED A SUM OF RS.60.00 LAKHS WHICH HAVE BEE N INVESTED ON RENOVATION OF THE FUNCTION HALLS. HE FURTHER SUB MITTED THAT THE ASSESSEES CONTENTION OF COERCION AND UNDUE INFLUEN CE ARE NOT BORNE BY ANY EVIDENCE AND THE ASSESSEE HAS NEVER RE TRACTED THE STATEMENTS BEFORE THE AO, BUT ONLY RAISED IT IN THE STATEMENT MADE BEFORE THE CIT (A) AND THE TRIBUNAL, AND IS TH EREFORE, CLEARLY AN AFTERTHOUGHT. THE LEARNED DR, THEREFORE, PRAYED FOR CONFIRMATION OF THE ADDITIONS. 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT DURING THE COURSE OF SURVEY , ALLEGEDLY THERE WAS A SMALL PIECE OF PAPER WHICH WAS FOUND AN D IT WAS ON THE BASIS OF SUCH DOCUMENT THAT THE AO ENQUIRED THE ASSESSEE ABOUT THE RENOVATION MADE BY HIM IN THE FUNCTION HA LLS AND THE ASSESSEE HAD ADMITTED RS.60.00 LAKHS IN THE HANDS O F ALL THE THREE PERSONS I.E. HIMSELF, HIS WIFE AND HIS DAUGHT ER. THE ASSESSEE HAS NOT RETRACTED THE STATEMENT BUT HAS NOT DECLARE D THE ADDITIONAL INCOME IN THE RETURNS OF INCOME FILED BY EACH OF THE ASSESSEES. THE ASSESSEES CONTENTION THAT BY NOT OF FERING THE DECLARED INCOME IN HIS RETURN OF INCOME, ITSELF IS RETRACTION OF THE ITA NOS 767 766 AND 768 OF 2019 ASHOK KUMAR KONIJET I AND OTHERS HYDERABAD. PAGE 6 OF 7 STATEMENT. HOWEVER, WE ARE NOT ABLE TO AGREE WITH T HIS CONTENTION OF THE ASSESSEE, WHEREAS ACCORDING TO THE ASSESSEE, A STATEMENT HAS BEEN RECORDED UNDER UNDUE INFLUENCE AND COERCIO N, HE CAN ALWAYS RETRACT THE SAME BY FILING A LETTER BEFORE T HE AO OR THE CIT (A) OR THE HIGHER AUTHORITIES. THE ASSESSEE HAS NOT ADOPTED ANY OF SUCH METHODS. IN FACT, THE ASSESSEE HAS NOT TAKEN S UCH ARGUMENT EVEN BEFORE THE AO, BUT HAS RAISED SOME GROUNDS BEF ORE THE CIT (A). BY OFFERING THE ADDITIONAL INCOME DURING THE C OURSE OF SURVEY, THE ASSESSEE HAS PREVENTED OR STOPPED THE SURVEY PA RTY FROM MAKING FURTHER INVESTIGATION AND VERIFICATION. THER EFORE, THE ASSESSEE CANNOT RETRACT HIS STATEMENT AT THIS LATE STAGE. HOWEVER, THE ASSESSEES CONTENTION THAT ONLY THE STATEMENT O F SHRI ASHOK KUMAR KONIJETI, WITHOUT ANY SUPPORTING AND CORROBOR ATIVE EVIDENCE, CANNOT BE THE BASIS OF THE ADDITION IN HI S HANDS AS WELL AS OF USHA AND PALLAVI. FURTHER, THESE TWO PERSONS ARE ALSO INDEPENDENT ASSESSEES, BUT SINCE THEY WERE STAYING WITH THE ASSESSEE AND ALL THE BOOKS ARE MAINTAINED AT ONE PL ACE, AO HAS RELIED ON HIS STATEMENT TO MAKE ADDITIONS IN THE HA NDS OF THESE TWO ASSESSEES ALSO. THE ASSESSEE, SMT. USHA RANI HA D ALSO TAKEN A GROUND BEFORE THE CIT (A) THAT THE FUNCTION HALL WAS DEMOLISHED AND THERE WAS NO CASE OF RENOVATION ALSO. THIS CONT ENTION OF THE ASSESSEE HAS NEITHER BEEN ACCEPTED OR REJECTED BY T HE DEPARTMENT. IF THERE IS NO FUNCTION HALL, THEN THER E CAN BE NO EXPENDITURE ON RENOVATION OF THE SAME. IN VIEW OF T HE SAME, WE ARE OF THE OPINION THAT THE ADDITION OF RS.60.00 LA KHS MADE BY THE AO, COMBINED IN THE HANDS OF ALL THE THREE PERSONS NOT ON THE BASIS OF ANY MATERIAL FOUND DURING THE COURSE OF SU RVEY. THOUGH, THE LEARNED DR REFERRED TO THE PIECE OF PAPER REFER RED TO IN THE STATEMENT, NO COPY OF ANY SUCH PAPER IS FILED BEFOR E US. THEREFORE, ITA NOS 767 766 AND 768 OF 2019 ASHOK KUMAR KONIJET I AND OTHERS HYDERABAD. PAGE 7 OF 7 WE HOLD THAT NO ADDITION CAN BE MADE IN THE HANDS O F THE RESPECTIVE ASSESSEES ONLY ON THE BASIS OF ASSESSEE S STATEMENT WITHOUT ANY CORROBORATIVE EVIDENCE. THE COMMON PRIN CIPLE LAID DOWN IN ALL THE DECISIONS RELIED UPON BY THE LEARNE D COUNSEL FOR THE ASSESSEE IS THAT NO ADDITIONS CAN BE MADE ONLY ON THE BASIS OF A STATEMENT RECORDED IN THE COURSE OF SEARCH OR SUR VEY. 8. IN THE RESULT, ASSESSEES APPEAL IN ITA NOS.768 & 766/HYD/2018 ARE ALLOWED AND APPEAL IN ITA NO. 767/ HYD/2018 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD JULY, 2019. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 3 RD JULY, 2019. VINODAN/SPS COPY TO: 1 SHRI ASHOK KUMAR KONIJETI, 13-6-447, KONIJETI ENC LAVE, GUDIMALKAPUR, HYDERABAD 500028 2 SMT. PALLAVI MANASANAPALLI, 13-6-447, KONIJETI EN CLAVE, GUDIMALKAPUR, HYDERABAD 500028 3 4 5 USHA RANI KONIJETI, 13-6-447, KONIJETI ENCLAVE, GUD IMALKAPUR, HYDERABAD 500028 ITO WARD 7-2 HYDERABAD CIT (A)-8 HYDERABAD 6 PR. CIT -3 HYDERABAD 7 THE DR, ITAT HYDERABAD 8 GUARD FILE BY ORDER