Mr.Pramod Kumar Gupta, Hyderabad V. Dy.CIT, Central Circle-3, Hyderabad

ITA 849/HYD/2014

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3886 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 25-11-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 06-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: SANJAY KUMAR SHARDA ARS
• Keywords: Unexplained investment; Search and seizure; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI V.DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 849/HYD/2014 ASSESSMENT YEAR: 2007-08 MR.PRAMOD KUMAR GUPTA, HYDERABAD [PAN: ACGPG2294L] VS DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3, HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI SUNIL KUMAR JAIN & SHRI SANJAY KUMAR SHARDA, ARS FOR REVENUE : SHRI Y.V.S.T.SAI, CIT-DR DATE OF HEARING : 25-11-2019 DATE OF PRONOUNCEMENT : 26-11-2019 O R D E R PER D.KARUNAKARA RAO, A.M. : THIS APPEAL OF ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VII, HYDERABAD , DATED 27-02-2014, FOR THE AY.2007-08. 2. THE GROUND(S) OF APPEAL RAISED BY ASSESSEE ARE E XTRACTED AS UNDER: 1. IN COMPUTING THE TOTAL INCOME THE LEARNED ASSE SSING OFFICER HAS MADE FOLLOWING ADDITIONS: A) THE CIT(A) OUGHT TO HAVE DELETED THE INAPPROPRIATE ADDITION TO TOTAL INCOME MADE BY THE AO STATING IT AS UNEXPLAINED INV ESTMENT TO THE EXTENT OF RS.95,59,140/- ITA NO. 849/HYD/2014 :- 2 -: 3. BRIEFLY STATED RELEVANT FACTS INCLUDE THAT THE ASSESSEE FILED RETURN OF INCOME, DECLARING A TOTAL INCOME OF RS.12,99 ,902/- U/S.143(3) R.W.S.153A OF THE INCOME TAX ACT [ACT]. TH ERE WAS A SEARCH AND SEIZURE ACTION ON THE ASSESSEE ON 11-03-20 10. IN THE LIGHT OF THE SEIZED PAPERS/DOCUMENTS, THE ASSESSING OF FICER (AO) NOTED THAT THE ASSESSEE MADE VARIOUS PAYMENTS BOTH IN CA SH AND CHEQUE TOWARDS PURCHASE OF LANDS AT GHATKESAR, BODUPPA L, KUNTLUR, BHIMILI AND NADARGUL ETC. THE AO DID NOT D ISCUSS MUCH ABOUT THESE LAND TRANSACTIONS AND THE PAYMENTS THERE-OF IN HIS ORDER. THE AO SUMMARILY MADE AN ADDITION OF RS.1,25 ,42,100/- FOR WANT OF EXPLANATION OF SOURCES OF THE PAYMENTS. FURTHER, THE AO FOUND CERTAIN OTHER PAPERS AND IT CONTAINS THE DETAILS O F THE TRANSACTION OF PURCHASE OF 10 ACRES OF LAND AT KUKATPA LLY FOR A CONSIDERATION OF RS.1 CRORE. FOR THAT, MAJOR PART OF TH E PAYMENT WAS MADE IN CASH. ON THIS COUNT, THE AO MADE AN ADDITIO NAL AMOUNT OF RS.47,50,000/- AND QUANTIFIED THE ASSESSE D INCOME AT RS.1,85,92,002/- EVENTUALLY. 4. DURING THE FIRST APPELLATE PROCEEDINGS, THE ASSESSEE MADE VARIOUS SUBMISSIONS AND DETAILS, ARGUED FOR DELETION OF THE ADDITIONS. IN HIS ORDER, THE CIT(A) DISCUSSED THE TRANS ACTIONS RELATING TO ALL THESE LAND DEALS AND GAVE PART RELIEF. THE APPEAL WAS PARTLY ALLOWED EVENTUALLY. 5. AGGRIEVED WITH CONFIRMING OF THE ADDITION AMOUNTING TO RS.95,59,140/-, THE ASSESSEE FILED THE PRESENT APPEAL WITH THE GROUND(S) MENTIONED ABOVE. ITA NO. 849/HYD/2014 :- 3 -: 6. BEFORE US, AT THE OUTSET, LD.COUNSEL FOR THE ASSESSEE ARGUED FOR REMANDING THE ENTIRE ISSUE TO THE FILE OF AO, CON SIDERING THE NON-SPEAKING ORDER OF THE AO AS WELL AS DUE TO ABSENCE OF CATEGORICAL FINDING OF AO ON THE DOCUMENTS. BRINGING O UR ATTENTION TO VARIOUS LAND PURCHASE TRANSACTIONS NARRATED ABOVE, L D.COUNSEL FOR THE ASSESSEE SUBMITTED THAT MOST OF THE FACTS AVAILABL E ON THE SEIZED PAPERS WERE IMPROPERLY APPRECIATED BY THE CIT( A), WITHOUT CALLING FOR ANY REPORT FROM THE ASSESSING AUTHORITY. FURTHER, LD.COUNSEL SUBMITTED THAT THE AO NEVER APPRECIATED THE S EIZED MATERIAL IN CORRECT PERSPECTIVE AND THEREFORE JUSTIFIED HIS REQUEST FOR REMANDING THE ISSUE TO THE ASSESSING AUTHORITY. 7. PER CONTRA, LD.DR FOR THE REVENUE RELIED HEAVILY O N THE ORDER OF THE CIT(A) AND THAT OF THE AO AS WELL. 8. WE HEARD BOTH THE COUNSELS AND VARIOUS ORDERS OF TH E REVENUE. WHILE REFERRING TO THE ORDER OF THE ASSESSIN G AUTHORITY I.E., CENTRAL CIRCLE-3, HYDERABAD, WE FOUND THE FOLLOWING R EASONS IN THE OPERATIVE PART OF THE ASSESSMENT ORDER, LEADING TO THE HU GE ADDITION OF RS.1,85,92,002/-. FOR THE SAKE OF COMPLETENESS, RE LEVANT LINES ARE EXTRACTED HERE UNDER: 3. DURING THE COURSE OF SEARCH PROCEEDINGS EVIDENC ES REGARDING REAL ESTATE TRANSACTIONS UNDERTAKEN BY SRI PRAMOD KUMAR GUPTA W ERE FOUND AND SEIZED AT THE O/O.M/S.EGGWOOD BOARDS & PANELS PVT L TD (EBPL) VIDE ANNEXUXRE A/EBPL/OFF/1/01, VARIOUS DOCUMENTS HAVE B EEN SEIZED WHICH INDICATE TOWARDS PURCHASE OF LANDS BY SRI PRA MOD KUMAR GUPTA THROUGH P.JANAKI RAMA RAO AND SRI A.PANDURANGAM. I T IS OBSERVED THAT DURING THE F.Y.2006-07, RELEVANT FOR THE A.Y.2007-0 8, THE ASSESSEE HAS MADE PAYMENT OF RS.77,22,100/- BY CASH TOWARDS PURC HASE OF LAND AT GHATKESAR, RS.5,55,000/- CASH FOR LAND AT BODUPPAL, RS.10 LAKHS CASH AT KUNTLUR, RS.50,000/- FOR LAND AT BHIMLI, RS.32,15,0 00/- TOWARDS LAND AT NADARGUL. ITA NO. 849/HYD/2014 :- 4 -: 3.2. AS THE ASSESSEE WAS NOT ABLE TO EXPLAIN THE SO URCES OF THE PAYMENT, AN AMOUNT OF RS.1,25,42,100/-, THE SAME IS TREATED AS UNEXPLAINED INVESTMENT IN THE HANDS OF THE ASSESSEE. 3.3. AS SEEN FROM ANOTHER DOCUMENT FOUND AND SEIZED DURING THE COURSE OF SEARCH, THE ASSESSEE ALONG WITH SRI P.JANAKI RAMA R AO, HAS PURCHASED 10 ACRES OF LAND AT KUKATPALLY FOR A CONSIDERATION OF RS.1 CRORE. OUT OF THIS, ONLY AN AMOUNT OF RS.5 LAKHS IS PAID BY CHEQUE AND THE BALANCE AMOUNT IS PAID BY CASH. THE ASSESSEE HAS ADMITTED PAYMENT OF RS.60 LAKHS AS UNEXPLAINED CASH PAYMENTS. HOWEVER, CONSIDERING TH E AGREEMENT OF RS.1 CRORE AND ONLY RS.5 LAKHS ONLY HAS BEEN PAID BY WAY OF CHEQUE, 50% OF THE SHARE OF THE ASSESSEE OF RS.47,50,000/- IS TREATED AS UNEXPLAINED INVESTMENT IN THE HANDS OF THE ASSESSEE. 8.1. FROM THE ABOVE, IT IS OBVIOUS THAT THE AO NEVER HAD AN OCCASION TO WRITE FEW MEANINGFUL LINES GIVING HIS FI NDINGS ON THE TRANSACTIONS AND GIVING REASONING OF HIS DECISION ON ADDITIONS ABOUT EACH OF THE TRANSACTIONS. AO DID NOT CONSIDER THE STATEMEN TS RECORDED BY THE INVESTIGATION AUTHORITIES DURING THE SE ARCH AND SEIZURE ACTION ETC. PARA 3.2 OF THE AOS ORDER IS T HE ONLY OPERATIVE PARA LEADING TO THE HUGE ADDITION OF RS.1,25,42,100/-. IN OUR VIEW, THE ORDER OF AO SHOULD BE CONSIDERED DEFECTIVE SO FAR AS THE REASON FOR MAKING ADDITION IS CONCERNED. IN OUR VIEW, THER EFORE, SUCH ORDER SHOULD BE CONSIDERED AS NON-SPEAKING ORDER. FURTHER, WE HAVE EXAMINED THE ORDER OF THE CIT(A) (29 PAGES) AND FIND THAT THE AOS CONTRIBUTION IN MAKING THE ORDER FROM THE CIT(A) IS MAR GINAL. COMMENTING ON THE ORDER OF THE CIT(A), ELABORATE DETAILS ARE FOUND PLACED IN THE ORDER OF CIT(A) AND THE SOURCE OF SUCH INFORMATION IS NOT KNOWN. IN OUR VIEW, THE REQUEST OF THE LD.AR FOR TH E ASSESSEE APPEARS TO BE APPROPRIATE AND THE GROUND RAISED SHOULD BE REMANDED TO THE FILE OF AO FOR DENOVO ASSESSMENT. THE ASSESSING AUTHORITY IS DIRECTED TO GRANT AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH THE SAID PROVISIONS OF N ATURAL JUSTICE. ITA NO. 849/HYD/2014 :- 5 -: THE GROUND RAISED BY ASSESSEE IS ACCORDINGLY ALLOWE D FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL OF ASSESSEE IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH NOVEMBER, 2019 SD/- SD/- (V. DURGA RAO) (D. KARUNAKARA R AO) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 26 TH NOVEMBER, 2019 TNMM ITA NO. 849/HYD/2014 :- 6 -: COPY TO : 1. MR.PRAMOD KUMAR GUPTA, 3-5-784/B&C, NAGEENA, KING KOTI, HYDERABAD. 2. THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CI RCLE-3, HYDERABAD. 3. CIT(APPEALS)-VII, HYDERABAD. 4. CIT(CENTRAL), HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.