P.Harsha Vardhan Reddy, Hyd, Hyderabad V. DCIT, Central Circle-2, Hyderabad

ITA 798/HYD/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53543 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 02-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V SRINIVAS; T DIWAKAR PRASAD
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Unexplained investment; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO. 798/HYD/2011 A.Y. 2003-04 ITA NO. 890/HYD/2011 A.Y. 2006-07 ITA NO. 812/HYD/2011 A.Y. 2005-06 MR. P. HARSHA VARDHAN REDDY HYDERABAD PAN: AALPR2677M VS DCIT CENTRAL CIRCLE-2 HYDERABAD APPELLANT RESPONDENT ITA NO. 955/HYD/2011 A.Y. 2005-06 DCIT CENTRAL CIRCLE-2 HYDERABAD VS MR. P. HARSHA VARDHAN REDDY HYDERABAD PAN: AALPR2677M APPELLANT RESPONDENT ASSESSEE BY: SHRI P. MURALIMOHAN RAO REVENUE BY: SHRI V. SRINIVAS & SHRI T. DIWAKAR PRASAD DATE OF HEARING: 23.8.2011 DATE OF PRONOUNCEMENT: 26.8.2011 ORDER PER CHANDRA POOJARI, A.M. APPEAL NOS. 798, 890 AND 812/HYD/2011 BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER OF THE CIT(A)-III , HYDERABAD DATED 8.3.2011. THE REVENUE ALSO PREFERRED AN APPEAL IN I.T.A. NO. 955/HYD/2011 AGAINST THE SAME ORDER OF THE CIT(A). SINCE THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON IN THESE APPEA LS, THESE APPEALS ARE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THI S COMMON ORDER. 2. IN I.T.A. NOS. 798 AND 812/HYD/2011, THE GRIEVAN CE OF THE ASSESSEE IS WITH REGARD TO NON-CONSIDERATION OF CER TAIN ADDITIONAL EVIDENCES FILED BEFORE THE CIT(A) ON 28.6.2010. AC CORDING TO THE ASSESSEE'S COUNSEL THESE DOCUMENTS FILED BEFORE THE CIT(A) ARE VERY ITA NOS. 798, 890, 955 & 812/HYD/2011 SHRI P. HARSHA VARDHAN REDDY, HYDERABAD ============================ 2 IMPORTANT WHICH WILL GO TO THE ROOT OF THE MATTER A ND REQUESTED THE BENCH TO GIVE DIRECTION TO THE CIT(A) TO CONSIDER T HESE DOCUMENTS. 3. THE LEARNED DR STRONGLY OPPOSED THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE. 4. WE HAVE HEARD BOTH THE PARTIES AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. SIMILAR ISSUE CAME UP FOR CON SIDERATION IN ASSESSEES OWN CASE I.T.A. NOS. 697 & 698/HYD/2011 FOR ASSESSMENT YEARS 2001-02 AND 2002-03. THE TRIBUNAL VIDE ORDER DATED 28.6.2011 CONSIDERED THE ISSUE AND HELD AS FOLLOWS: CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, IN OUR OPINION, WHEN THE ASSESSEE HAS FILED THESE DOCU MENTS, IT IS FAIR TO CONSIDER THE SAME UNLESS THE INTENTION O F THE ASSESSEE IS MALA FIDE. THE DEPARTMENT HAS NOT DEMO NSTRATED ANY NON BONAFIDENESS ON THE PART OF THE ASSESSEE. IN OUR OPINION, THE DOCUMENTS FURNISHED BY THE ASSESSEE BE FORE THE CIT(A) ON 28.6.2010 IS TO BE CONSIDERED BY THE CIT( A) AND IF REQUIRED HE IS DIRECTED TO CALL FOR THE REMAND REPO RT FROM THE ASSESSING OFFICER AND DECIDE THE ISSUE ACCORDINGLY. AT THIS STAGE, WE REFRAIN FROM GOING INTO THE OTHER GROUNDS RAISED BY THE ASSESSEE. 5. FOLLOWING THE ABOVE ORDER OF THIS TRIBUNAL, WE A RE INCLINED TO SET ASIDE THESE THREE APPEALS TO THE FILE OF THE CIT(A) TO CONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE DOCUMENTS FILED BY THE A SSESSEE ON 28.6.2010. THUS, THE APPEALS IN I.T.A. NOS. 798 AND 812/HYD/20 11 ARE ALLOWED FOR STATISTICAL PURPOSES. 6. COMING TO I.T.A. NO. 890/HYD/2011, THE GRIEVANCE OF THE ASSESSEE IS WITH REGARD TO TREATMENT OF GOLD JEWELL ERY OF 350 GRAMS VALUED AT RS. 6,14,525 AS UNEXPLAINED INVESTMENT OF THE ASSESSEE. 7. BRIEF FACTS OF THE ISSUE ARE THAT DURING THE SEA RCH OPERATION U/S. 132(1) OF THE ACT IN THE CASE OF THE ASSESSEE, JEWE LLERY WEIGHING 1102 GRAMS WORTH RS. 10,95,265/- WAS FOUND AT THE RESIDE NTIAL PREMISES OF THE ASSESSEE. HE FURTHER MENTIONED THAT ON THE DAY OF SEARCH SMT. LAVANYA REDDY, WIFE OF THE ASSESSEE, COULD NOT GIVE EXPLANATION FOR THE SAID JEWELLERY OF 1102 GRAMS FOUND IN THE ASSES SEE'S PREMISES AND ITA NOS. 798, 890, 955 & 812/HYD/2011 SHRI P. HARSHA VARDHAN REDDY, HYDERABAD ============================ 3 THE BANK LOCKER. HE, HOWEVER, NOTED THAT HAVING RE GARD TO THE CBDT'S INSTRUCTION NO. 1916 DATED 11.05.1994, JEWELLERY WE IGHING 355 GRAMS VALUING RS. 6,14,525/- WERE SEIZED, LEAVING THE BAL ANCE 747 GRAMS WORTH OF RS. 4,80,740/-. FURTHER AS NOTED BY HIM, IN RESPONSE TO THE QUESTIONNAIRE DATED 25.10.2007 AND THE SUBSEQUENT L ETTER ISSUED ON 23.11.2007, THE ASSESSEE HAS NOT FILED ANY DETAILS RELATING TO THE ASSETS AND THE JEWELLERY. UNDER THE CIRCUMSTANCES, THE ASSESSEE TREATED THE SAID JEWELLERY WORTH RS. 6,14,525/- SEI ZED AT THE TIME OF SEARCH AS UNEXPLAINED INVESTMENT MADE BY HIM IN SUC H ASSET AND ADDED THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE FOR THIS ASSESSMENT YEAR. 8. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION. A GGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 9. WE HAVE HEARD BOTH THE PARTIES AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AS PER PAGE NO. 8 OF THE PAPE R BOOK FILED BY THE ASSESSEE, THE ASSESSEE IS A REGULAR WEALTH-TAX ASSE SSEE AND THE SAME HAS BEEN DISCLOSED TO THE DEPARTMENT FOR THE A SSESSMENT YEAR 1981-82 VALUED AT RS. 2,22,716 AS ON VALUATION DATE 31.3.1981. BEING SO, IN OUR OPINION, THE JEWELLERY WEIGHING 350 GRAM S VALUED AT RS. 6,14,525 CANNOT BE CONSIDERED AS UNEXPLAINED INVEST MENT OF THE ASSESSEE IN THE ASSESSMENT YEAR UNDER CONSIDERATION . 10. THE REVENUE IN I.T.A. NO. 955/HYD/2011 RAISED A GROUND WITH REGARD TO DELETION OF ADDITION OF RS. 20,42,289 BEI NG THE COST OF CONSTRUCTION INCURRED BY THE ASSESSEE IN PUNNAIAH P LAZA. 11. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. THE CIT(A) DELETED THE ADDITION OF RS. 20,42,289 BY PLACING RE LIANCE ON HIS ORDER DATED 25.2.2011 IN I.T.A. NO. 0012 TO 0014/CIT(A)-I II/09-10 IN THE CASE OF ASSESSEE'S FATHER SHRI P.R. GOPALAKRISHNA REDDY. HOWEVER, NONE OF THE PARTIES BROUGHT THE SAID ORDER ON RECORD BEF ORE THIS TRIBUNAL AND ALSO THE PARTIES HEREIN HAVE NOT MADE IT CLEAR WHET HER ANY APPEAL IS PREFERRED BY THE REVENUE AGAINST THE SAID ORDER OF THE CIT(A). HENCE ITA NOS. 798, 890, 955 & 812/HYD/2011 SHRI P. HARSHA VARDHAN REDDY, HYDERABAD ============================ 4 AT THIS STAGE, WE FEEL IT APPROPRIATE TO SET ASIDE THE ISSUE TO THE FILE OF THE CIT(A) TO DECIDE THE SAME ON THE BASIS OF FINAL OUTCOME OF THE ORDER OF THE CIT(A) IN THE CASE OF SHRI P.R. GOPALA KRISHNA REDDY. IF THERE IS NO APPEAL AGAINST THE ORDER OF THE CIT(A) IN THE CASE OF SHRI P.R. GOPALAKRISHNA REDDY, THE REVENUE IS DIRECTED T O FOLLOW THAT ORDER IN THE PRESENT CASE ALSO AS IT REACHED FINALITY. THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, I.T.A. NOS. 890/HYD/2011 IS ALLO WED AND THE OTHER APPEALS IN I.T.A. NOS. 798, 812 AND 955/HYD/2011 AR E ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2011. SD/- G.C. GUPTA SD/- CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER HYDERABAD, DATED THE 26 TH AUGUST, 2011 COPY FORWARDED TO: 1. SRI P. HARSHA VARDHAN REDDY, C/O. M/S. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD-82. 2. DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2 , HYDERABAD. 3. THE CIT(A)-III, HYDERABAD. 4. THE CIT (CENTRAL), HYDERABAD 5. THE DR, A-BENCH, ITAT, HYDERABAD. TPRAO