Appeal details
Counselvise Citation
[2019] 116 COUNSELVISE.COM (IT) 1994 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 4 month(s) 2 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
05-09-2019
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB-A
Next Hearing Date
30-07-2019
Assessment Year
2013-2014
Appeal Filed On
03-05-2018
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A - SMC BENCH : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 819 /HYD./2018 ASSESSMENT YEAR: 20 13 - 14 SHRI OMKAR NUTHALAPATI VS. ACIT, CIRCLE 14(1) NO.1203, BLOCK H, APARNA SAROVAR HYDERABAD NALLAGANDLA LINGAMPALLY S ERILINGAMPALLY, R.R.DIST. TELANGANA 46. PAN: AA IPO5366P (APPELLANT) (RESPONDENT) FOR ASSESSE : S H. PAWAN KUMAR CHAKRAPANI, A.R. FOR REVENUE : S H. C.RAJWSWARA REDDY , D.R. DATE OF HEARING : 30 /07/19 DATE OF PRONOUNCEMENT : 05 /0 9 /19 O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR A.Y. 20 13 - 14 AGAINST THE ORDER OF THE LD.CIT(A) - 6 , HYDERABAD DATED 19.02.2018 . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE , AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF MEDIA & ENTERTAINMENT INDUSTRY, HAS E - FILED HIS RETURN OF INCOME FOR A.Y. 2013 - 14 ON 30.09.2013 ADMITTING TOTAL INCOME OF RS.39,66,8 70/ - . THE SAID RETURN WAS INITIALLY PROCESSED U/S 143(1) OF THE I.T. ACT, 1961 AND SUBSEQUENTLY WAS SELECTED FOR SCRUTINY UNDER CASS. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE I.T. ACT , THE A.O. OBSERVED THAT THERE WAS A SURVEY U/S 133A OF THE ACT CONDUCTED ON 29.11.2012 IN THE CASE OF THE ASSESSEE AND DURING SURVEY PROCEEDINGS CERTAIN LOOSE SHEETS AND ITA NO. 819/HYD/2018 A.Y. 2013 - 14 SHRI OMKAL NUTHALAPATI, HYD. 2 DOCUMENTS WERE FOUND. FROM THE SAID DOCUMENTS, THE AO OBSERVED THAT THE ASSESSEE HAD PURCHASED A FLAT BEARING NO. H - 1203 , APARNA SAROVAR, SURVE Y NOS. 12/1 & 13, GACHIBOWLI, SERILINGAMPALLI , ACCORDING TO WHICH CASH OF RS.9,00,000/ - WAS PAID TOWARDS THE PURCHASE OF THE FLAT . THE ASSESSEE WAS THEREFORE REQUIRED TO SHOW CAUSE AS TO WHY THE SAID AMOUNT OF CASH OF RS.9,00,000/ - PAID TO THE BUILDER SHOULD NOT BE TREATED AS UNACCOUNTED INCOME AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. IN REPLY , ASSESSEE FILED A LETTER D ATED 22.03.2016 STATING THAT THE ASSESSEE HAS PURCHASED A FLAT FROM MR. M. KAMALAKAR AND NOT FROM THE BUILDER M/S APARNA INFRASTRUCTURE PVT. LTD. THROUGH MOU DATED 29.6.2010 AND THAT IT IS A SECOND PURCHASE AND THAT THE RELEVANT DOCUMENTS ARE FILED THOUG H HIS LETTER DATED 9.3.2016 ALONG WITH ADDRESS OF THE SELLER. HE ALSO DENIED TO HAVE PAID ANY CASH EITHER TO BUILDER OR TO MR.M.KAMALAKAR. THE AO HOWEVER, DID NOT ACCEPT THE CONTENTIONS OF THE ASSESSEE. HE HELD THAT IT IS CLEAR FROM THE IMPUGNED MATERI AL THAT THE ASSESSEE HAD PAID RS.9,00,000/ - FOR PURCHASE OF FLAT AND THE SAME IS NOT ACCOUNTED IN THE BOOKS OF ACCOUNTS. HE, THEREFORE, TREATED IT AS UNEXPLAINED INVESTMENT AND BROUGHT IT TO THE TAX. 3. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO CONSIDERED THE FACTS AND MATERIALS PLACED ON RECORD AND HELD THAT IN THE IMPOUNDED DOCUMENTS, THERE IS NO MENTION OF THE DATE OF THE PAYMENT OF CASH OF RS.9 LAKHS, NOR NAME OF THE PERSON TO WHOM IT IS PAID ETC. EXCEPT CERTAIN SCRIBBLINGS W ITH REGARD TO CASH OF RS.9 LAKHS. FURTHER, HE ALSO HELD THAT THERE IS NO EVIDENCE THAT THE ASSESSEE HAD PAID CASH IN CONNECTION WITH PURCHASE OF THE PROPERTY AND THAT EXCEPT SOME SCRIBBLINGS MADE IN PENCIL THERE WAS NO OTHER CORROBORATORY EVIDENCE TO HOL D THAT ASSESSEE HAD ACTUALLY PAID CASH DURING THE F.Y. 2012 - 13 RELEVANT TO A.Y. 2013 - 14. HE ALSO HELD THAT EVEN AFTER PRESUMING THAT ASSESSEE HAD PAID CASH OF RS.9 LAKHS , THE AO HAS NOT BROUGHT ANY EVIDENCE TO SHOW THAT THE SAID CASH PAYMENT WAS RE COR DED IN BOOKS OF ACCOUNTS MAINTAINED BY ASSESSEE OR THAT THE SAME WAS PAID OUT OF UNACCOUNTED INCOME/SOURCES AND THAT THE AO HAS NOT RECORDED ANY STATEMENT FROM THE ACCOUNTANT WHO ACTUALLY MADE NOTINGS ON THE NOTE SHEET. THE CIT(A) ALSO HELD THAT THE ASS ESSEE ACTUALLY PURCHASED A FLAT DURING ITA NO. 819/HYD/2018 A.Y. 2013 - 14 SHRI OMKAL NUTHALAPATI, HYD. 3 F.Y. 201 0 - 11 RELEVANT TO A.Y. 2011 - 12 , T HEREFORE THE SAID CASH MIGHT HAVE BEEN PAID DURING FY 2010 - 11 RATHER THAN F.Y. 2012 - 13. HE ALSO OBSERVED THAT THE BUILDER HAS HANDED OVER POSSESSION OF THE FLAT ON 25.08.2010 WHICH FALLS IN F.Y. 2010 - 11 RELEVANT TO A.Y. 2011 - 12. THEREFORE , HE CONCLUDED THAT THE ISSUE OF ASSEESMENT OF CASH PAYMENT OF RS.9 LAKHS AS INCOME OF ASSESSEE HAS TO BE RECORDED IN THE F.Y. 2010 - 11 RELEVANT TO A.Y. 2011 - 12 RATHER THAN TH E IMPUGNED A.Y. 2013 - 14. HE DELETED THE ADDITION MADE BY THE AO IN THE A.Y. 2013 - 14. THEREAFTER , THE CIT(A) FURTHER PROCEEDED TO ISSUE A DIRECTION U/S 15 0( 1 ) OF THE ACT DIRECTING THE AO TO CONDUCT PROPER ENQUIRIES BASED ON THE IMPUGNED MATERIAL SO AS TO ASCERTAIN THE EXACT AMOUNT OF UNACCOUNTED INVESTMENT MADE BY ASSESSEE FOR PURCHASE OF FLAT FROM MR. M.KAMALAKAR OR THE BUILDER M/S APARNA INFRA HOUSING PVT.LTD. AS THE CASE MAY BE AND THE EXACT F.Y. DURING WHICH SUCH PAYMENT WAS MADE. HE ACCORDINGLY DIRECTED THAT SUCH UNACCOUNTED INVESTMENT MAY BE BROUGHT TO TAX IN THE C ORRECT A.Y. HE ALSO DIRECTED THAT THE ASSESSEE MAY BE PROVIDED A FAIR OPPORTUNITY OF HEARING, BEFORE FINAL ISING THE PROCEEDINGS IN ACCORDANCE WITH DIRECTIONS ISSUED U/S 15 0( 1 ) OF THE ACT. 4. AGAINST TH ESE DIRECTIONS OF CIT(A), ASSESSEE IS IN APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS OF APPEAL. 1. THE ORDER OF THE AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROBABILITIES AND THE FACTS AND CIRCUMSTANCES IN THE APPELLANTS CASE. 2. THE APPELLANT DENIES HIMSELF LIABLE TO BE ASSESSED OVER AND ABOVE THE RETURNED INCOME BY THE APPELLANT OF RS.39,66,870/ - UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WHETHER THE LD.CIT(A) - 6, HYDERABAD, IS JUSTIFIED IN GIVING DIRECTIONS U/S 150(1) OF THE ACT, TO THE AO, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. WHETHER THE LD.CIT(A) - 6, HYDERABAD, IS JUSTIFIED IN GIVING DIRECTIONS U/S 150(1) OF THE ACT , TO RE - OPEN THE ASSESSMENT FOR THOSE YEAR WHEN THE SAID INVESTMENT BE BROUGHT TO TAX, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO. 819/HYD/2018 A.Y. 2013 - 14 SHRI OMKAL NUTHALAPATI, HYD. 4 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR SUBSTITUTE ANY OF GROUNDS URGED ABOVE. 6. IN THE VIEW OF THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF THE HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED IN THE INTEREST OF JUSTICE AND EQUITY. 5. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDI TION WAS MADE BY THE AO DURING THE A.Y. 2013 - 14 WHEREAS THE CIT(A) HAS CLEARLY HELD THAT THE SAME CANNOT BE BROUGHT TO TAX IN THE A.Y. 2013 - 14. HE SUBMITTED THAT THE CIT(A) HAS CLEARLY GIVEN A FINDING THAT IT IS NOT CLEAR FROM THE DOCUMENTS THAT THE ASSE SSEE HAS MADE THE PAYMENT OF RS.9 LAKHS IN CASH OR THE PARTY TO WHOM SUCH PAYMENT WAS MADE, NOR THE DATE O N WHICH SUCH PAYMENT WAS MADE. H E SUBMITTED THAT CIT(A) WITHOUT GIVING A FINDING SHOULD NOT HAVE GIVEN DIRECTIONS U/S 15 0( 1 ) OF THE ACT. HE SUBMITT ED THAT DIRECTIONS GIVEN BY CIT(A) AT PARA 8.2 OF HIS ORDER IS NOT NECESSARY FOR DISPOSAL OF THE APPEAL BEFORE HIM FOR A.Y. 2013 - 14. HE SUBMITTED THAT BY SUCH VAGUE DIRECTIONS , THE CIT(A) HAS GIVEN THE A.O. THE AUTHORITY TO MAKE RO V ING ENQUIRIES WHICH IS NOT PERMISSIBLE. 6. THE LD. DR , ON THE OTHER HAND , SUPPORTED THE ORDER OF CIT(A) AND SUBMITTED THAT THE POWER OF CIT(A) IS CO - TERMINOUS WITH THAT OF AO AND CIT(A) C OULD HAVE ANNULLED , ENHANCED OR AMENDED THE ASSESSMENT ORDER AND C OULD HAVE DIRECTED THE AO , IF THE AO HAS FAILED TO LOOK INTO THE ROOT OF THE ISSUE. 7. THE LD.COUNSEL FOR THE ASSEEE ALSO RELIED UPON THE FOLLOWING CASE LAWS IN SUPPORT OF HIS CONTENTION THAT THE DIRECTION GIVEN BY CIT(A) IS NOT NECESSARY FOR DISPOSAL OF THE APPEAL : I. CIT VS. RAJINDER NATH (1979) 120 ITR 14 (SC); II. ACIT VS. LOTUS INVESTMENTS LTD. (2007) 288 ITR 459 III. ACIT VS. SRI BISWAJIT CHATTERJEE IN ITA NO.565/KOL/2013 . 8. HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL PLACED ON RECORD, WE FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RAJINDER NATH (SUPRA) HAS HELD THAT CONSIDERING THE POWERS OF AAC U/S 153 OF THE ACT AND ITA NO. 819/HYD/2018 A.Y. 2013 - 14 SHRI OMKAL NUTHALAPATI, HYD. 5 THE EXPRESSIONS , FINDING AND DIRECTION A FINDING GIVEN IN APPEAL, REVISION OR REFERENCE ARISING OF ASSESSMENT MUST BE A FINDING NECESSARY FOR DISPOSAL OF THE PARTICULAR CASE, THAT IS TO SAY IN RESPECT OF THE PARTICULAR ASSESSEE AND IN RELATION TO PARTICULAR A.Y. (A) THE HONBLE BOMBAY HIG H COURT IN THE CASE OF LOTUS INVESTMENTS (SUPRA) AT PARA 32 OF ITS ORDER HAS HELD AS UNDER. 32. THE FACT THAT THE CIT(A) IN HIS ORDER DT. 24TH DEC, 2004 HAS OBSERVED THAT THE AO IS FREE TO LOOK INTO AND CONSIDER THE DISALLOWANCES UNDER SECTION 148 OF THE ACT IN THE RELEVANT ASSESSMENT YEARS IN TERMS OF SECTION 150(1) R/W EXPLN. 2 TO SECTION 153 CAN NOT BE CONSTRUED TO BE A DIRECTION TO REOPEN THE ASSESSMENTS SO AS TO ISSUE REASSESSMENT NOTICES EVEN AFTER THE EXPIRY OF SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEARS, AS CONTEMPLATED UNDER SE CTION 150 OF THE ACT. THE ABOVE OBSERVATIONS MADE BY THE CIT(A) CAN AT BEST BE SAID TO BE A SUGGESTION MADE TO THE AO TO CONSIDER AS TO WHETHER SUCH DISALLOWANCES COULD BE MADE BY INITIATING REASSESSMENT PROCEEDINGS. IF THE FINDINGS GIVEN BY THE CIT(A) WER E THAT, THERE IS EVIDENCE OR MATERIAL ON RECORD TO SUGGEST THAT INCOME HAS ESCAPED ASSESSMENT BUT THE SAME CANNOT BE BROUGHT TO TAX IN THE BLOCK ASSESSMENT AND ACCORDINGLY IF ANY DIRECTIONS WERE GIVEN FOR REOPENING OF THE ASSESSMENTS THEN IT WOULD BE A TOT ALLY DIFFERENT MATTER. HOWEVER, IN THE PRESENT CASE, THE CIT(A) HAS GIVEN A CLEAR FINDING THAT THERE IS NO EVIDENCE OR MATERIAL ON RECORD TO SUSTAIN THE ADDITIONS AND, HENCE, THE CIT(A) COULD NOT HAVE GIVEN DIRECTIONS TO THE ITO TO INITIATE REASSESSMENT PR OCEEDINGS. THEREFORE, THE CONTENTION OF THE REVENUE THAT THE CIT(A) HAS DIRECTED THE AO TO INITIATE REASSESSMENT PROCEEDINGS CANNOT BE ACCEPTED. (B) THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. SRI BISWAJIT CHATTERJEE IN ITA 565/KOL/2013 FOR AY 2007 - 08 VIDE ORDER DATED 10.11.2017 HAD AT PARA 11 O F ITS ORDER HELD AS UNDER. 11. NOW THE REVENUE HAS AGITATED BEFORE US THAT LD. CIT(A) ERRED IN NOT GIVING DIRECTION TO REOPEN THE CASE OF EARLIER YEARS OF THE ASSESSEE IN WHIC H INVESTMENTS WERE MADE. IN THIS REGARD, WE FIND THAT LD. CIT(A) HAS BEEN GIVEN POWER U/S. 251 OF THE ACT TO CONFIRM THE ORDER OF AO REDUCE, ENHANCE OR ANNUL ASSESSMENT ORDER UNDER THE PROVISION OF ACT THERE IS NO POWER AVAILABLE TO LD. CIT(A) TO GIVE DIRE CTION TO AO FOR REOPENING THE CASE OF OTHER YEARS. THE INCOME TAX ACT PROVIDES DIFFERENT SCHEMES WHEREIN THE AO IS EMPOWERED TO ASSESS OR RE - ASSESS THE INCOME WHICH HAS ESCAPED ASSESSMENT. SO AT THE MOST , IF THE REVENUE WISHES TO TAX THE ESCAPEMENT OF INCOME THEN IT HAS FOLLOWED THE SCHEME PROVIDED UNDER THE ACT. THE RELEVANT PROVISIONS FOR TAXING THE ESCAPE INCOME ARE GIVEN U/S 147/263 OF THE ACT. IN HOLDING SO, WE FIND SUPPORT AND GUIDANCE FROM THE JUDG MENT OF HON'BLE SUPREME COURT IN THE CASE OF ITO VS. MURLIDHAR BHAGHUBABU REPORTED IN 52 ITR 335 (SC). THE RELEVANT EXTRACT OF THE JUDGMENT IS REPRODUCED BELOW: - 'SECTION 33(4) OF 1922 ACT ONLY REFERS TO A FINDING OR DIRECTION MADE BY AN APPELLATE AUTHORITY AND DOES NOT ITSELF CONFER ANY POWER ON AN APPELLATE AUTHORITY TO MAKE A FINDING OR DIRECTION. INDEED, SECTION 34 OF 1922 ACT DEALS WITH ENTIRELY A DIFFERENT ASPECT, THAT OF EMPOWERING AN ITO TO BRING TO ASSESSMENT ESCAPED INCOME, AND HAS NO CONCERN WITH THE POWERS OF AN APPELLATE AUTHORITY. THE PROVISION WHICH DEALS WITH THE POWERS OF AN APPELLATE AUTHORITY IS SECTION 31 OF 1922 ACT.' ITA NO. 819/HYD/2018 A.Y. 2013 - 14 SHRI OMKAL NUTHALAPATI, HYD. 6 RESPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF MURLIDHAR BHAGHUBABU (SUPRA) WE CONCLUDE THAT LD. CIT(A) HAS NO POWER UNDER THE PROVISION OF LAW FOR GIVING ANY DIRECTION TO AO FOR REOPENING OF ASSESSMENT. THE APPEAL BEFORE LD. CIT(A) IS CONFINED TO THE PARTICULAR ASSESSMENT YEAR WHICH IS BEFORE HIM. THUS, IN VIEW OF THE ABOVE PROPOSITION, ITA NO.565/KOL/2013 A.Y 2007 - 08 ITO WD - 1(2) HGL. VS. SH. BISWAJIT CHATTERJEE PAGE 8 WE DISMISS THE GROUND OF REVENUE'S APPEAL. CONSEQUENTLY, REVENUE'S GROUND IS DISMISSED. 9. FROM THE ABOVE JUDGEMENTS, IT CAN NOW BE SEEN THAT THE CIT(A) U/S 150 OF THE ACT CAN ONLY GIVE DIRECTIONS WITH REGARD TO A PARTICULAR ASSESSEE AND FOR A PARTICULAR A.Y. ONLY . IN THE CASE BEFORE US, AS ALREADY OBSERVED BY US, THE CIT(A) HAS NOT GIVEN A F INDING THAT THE AMOUNT IS TAXABLE IN THE A.Y. 2011 - 12 BUT IS DIRECTING THE AO TO CONDUCT A FRESH AND RO V ING ENQUIR Y TO FIND OUT WHETHER THE ASSESSEE HAS MADE A PAYMENT AND IF YES, THEN THE YEAR IN WHICH THE AMOUNT IS PAID TO BE BROUGHT TO TAX. AS HELD BY HONBLE SUPREME COURT AND THE HONBLE BOMBAY HIGH COURT IN THE ABOVE CITED CASES, THE DIRECTION OF THE CIT(A) U/S 150 IS NOT SUSTAINABLE AND IS ACCORDINGLY IS SET ASIDE . ACCORDINGLY, ASSESSEES APPEAL IS ALLOWED. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 05 TH SEPTEMBER , 2019. SD/ - SD/ - ( S.RIFAUR RAHMAN ) (P MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 05 TH SEPTEMBER , 2019. *GMV ITA NO. 819/HYD/2018 A.Y. 2013 - 14 SHRI OMKAL NUTHALAPATI, HYD. 7 COPY FORWARDED TO: 1. SRI OMKAR NUTHALAPATI, FLAT NO.1203, BLOCK H, APARNA SAROVAR, NALLAGANDLA, LINGAMPALLY, SERILINGAMPALLY, RANGA REDDY DIST., TELANGANA. 2. ACIT, CIRCLE 14(1), HYDERABAD. 3. PR.CIT - 6 , HYD. 4. D.R. ITAT HYDERABAD 5. GUARD FILE // C O P Y // ITA NO. 819/HYD/2018 A.Y. 2013 - 14 SHRI OMKAL NUTHALAPATI, HYD. 8 1. DRAFT DICTATED ON 02/08/19 2. DRAFT PLACED BEFORE THE AUTHOR 05/08/19 08/08/19 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY SECOND MEMBER 5. APPROVED DRAFT COMES TO SRPS 6. KEPT FOR PRONOUNCEMENT 05/09/19 7. FILE SENT TO BENCH CLERK
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