Deen Dayal, Hyderabad V. DCIT, Circle-9(1), Hyderabad

ITA 870/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66160 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 1998-1999
• Appeal Filed On: 31-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V V RAMANA RAO
• Assessee Lawyers: S RAMA RAO
• Keywords: Opportunity of being heard
• Section: 143(3); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 870/HYD/2012 ASSESSMENT YEAR: 1998-99 DEEN DAYAL, APPELLANT HYDERABAD (PAN ABBPD8815E) VS. DY. COMMISSIONER OF INCOME TAX, RESPONDENT CIRCLE 9(1), HYDERABAD APPELLANT BY : SHRI S. RAMA RAO RESPONDENT BY : SHRI V.V. RAMANA RAO DATE OF HEARING : 08/08/2012 DATE OF PRONOUNCEMENT : ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-VI, HYDERABAD, DATED 25/08/2011 FOR THE ASSESSMENT YEAR 1998-99. 2. WE FIND THAT THE APPEAL WAS FILED BY THE ASSESSE E BEFORE THE ITAT ON 31/05/2012 WITH A DELAY OF 202 DAYS. IN THI S REGARD, THE ASSESSEE FILED PETITION REQUESTING FOR CONDONATION OF DELAY, WHEREIN IT WAS STATED AS UNDER:- THE PETITIONER HUMBLY SUBMITS THAT THE ORDER OF THE CIT(A)- VI, HYDERABAD IN APPEAL NO. 0324/07-08/CIT(A)-VI, D ATED 25/08/2011 WAS SERVED ON THE PETITIONERS COUNSEL. THE COPY OF THE ORDER WAS HANDED OVER TO THE PETITIONERS BR OTHER TOWARDS END OF SEPTEMBER, 2011. AT THE RELEVANT POI NT OF TIME, THE PETITIONER WAS SUFFERING FROM ACUTE DIABE TES AND ITA NO. 870/HYD/2012 DEEN DAYAL 2 HYPERTENSION SINCE MIDDLE OF SEPTEMBER, 2011 AND HE WAS ADVISED COMPLETE REST AND NOT TO ATTEND REGULAR ACT IVITIES. THEREFORE, THE MATTER WAS NOT INFORMED TO THE PETIT IONER BY HIS BROTHER. IN THE MEANTIME, THE FESTIVAL OF DEEP AVALI HAS FALLEN ON 26/10/11 AND IN THE PROCESS OF WHILE WASH ING THE BUSINESS PREMISES THE RECORDS ETC., LYING IN THE SH OP WERE SHIFTED TO HIS RESIDENCE ADJACENT TO THE SHOP. THE ORDER OF THE CIT(A) GOT MIXED UP WITH THE OTHER PAPERS RELAT ING TO THE BUSINESS ACTIVITY. IN THE LAST WEEK OF MAY, 201 2 WHEN THE PETITIONER WAS ABLE TO ATTEND THE SHOP WHILE SE GREGATING THE RECORDS THE MATTER HAS COME TO HIS KNOWLEDGE AN D IMMEDIATELY, THEREAFTER THE APPEAL WAS GOT PREPARED AND FILED BEFORE THE HONBLE ITAT 31/05/2012 WITH A DEL AY 202 DAYS. THE PETITIONER HUMBLY SUBMITS THAT THE DELAY IN FILING THE APPEAL IS FOR THE REASONS STATED ABOVE WHICH AR E BEYOND THE CONTROL OF THE PETITIONER. THE PETITIONER, THER EFORE, HUMBLY THE HONBLE ITAT TO KINDLY CONDONE THE DELAY AND PASS APPROPRIATE ORDERS IN THE MATTER. 3. AFTER CONSIDERING THE EXPLANATION OF THE ASSESSE E FOR DELAY IN FILING OF THE APPEAL, WE CONDONE THE DELAY OF 20 2 DAYS IN FILING THE APPEAL BEFORE US AND ADMIT THE APPEAL FOR ADJUD ICATION. 4. THE FACTS ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 06/04/1999 ADMITTING AN INCOME OF RS. 52,490/-. THE AO IN HIS ORDER DATED 18/10/2000 BROUGHT A SUM OF RS. 1,70,00 0/- SHOWN AS SUNDRY DEPOSITS IN HIS BALANCE SHEET, TO TAX U/S 69. ON APPEAL, THE ITAT IN ITS ORDER IN ITA NO. 630/HYD/2002, DATE D 09/06/2006, HELD AS FOLLOWS:- THE FACT THAT THE ASSESSEE MADE A DEPOSIT TO THE EX TENT OF RS. 1,70,000/- IS NOT IN DISPUTE. THE DETAILS OF LO ANS BORROWED FROM VARIOUS PERSONS WERE ALSO AVAILABLE B EFORE THE AO. IN THOSE CIRCUMSTANCES, THE AO HAS TO FIND OUT WHETHER THE ASSESSEE HAS REALLY INVESTED FROM THE F UNDS AVAILABLE WITH HIM OR NOT. SINCE THE AO HAS NOT EXA MINED THOSE ASPECTS, IN MY OPINION, THE MATTER HAS TO BE RE- EXAMINED BY THE AO. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE. THE AO IS DIRECTED TO EX AMINE THE AVAILABILITY OF FUNDS AS DISCLOSED IN THE RETURN OF INCOME AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD T O THE ASSESSEE. ITA NO. 870/HYD/2012 DEEN DAYAL 3 THE AO PASSED AN ORDER U/S 143(3) RWS 254 OF THE IT ACT AND BROUGHT THE SUM OF RS. 1,70,000/- TO TAX AGAIN. THE PRESENT APPEAL HAS BEEN FILED AGAINST THIS ADDITION . 5. ON APPEAL AGAINST THE ORDER OF AO PASSED U/S 143 (3) R.W.S. 254 BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT HE HAD ADMITTED UNDISCLOSED INCOME IN THE COURSE OF SEARCH CONDUCTED IN HIS CASE ON 16/07/1997 INCLUDING INCOME OF RS. 6,00 ,000/- FROM MONEY LENDING. THE AR OF THE ASSESSEE SUBMITTED THA T THE AMOUNT OF RS. 1.7 LAKHS WAS INCLUDED IN THE SUM OF RS. 6 LAKHS. THE AR OF THE ASSESSEE CONTENDED THAT THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE ON THE GROUND TH AT IT WAS AN AFTER THOUGHT AND THAT THE UNDISCLOSED INCOME OFFER ED FOR BLOCK PERIOD HAD NOTHING TO DO WITH THE AVAILABILITY OF F UNDS FOR DEPOSIT OF RS. 1.70 LAKHS. THE AR FURTHER SUBMITTED THAT SE CTION 69 APPLIES ONLY TO INVESTMENTS NOT RECORDED IN THE BOO KS OF ACCOUNT AND SINCE THE AMOUNT WAS REFLECTED IN THE BALANCE S HEET IT DID NOT FALL U/S 69 OF THE ACT. AFTER CONSIDERING THE SUBM ISSIONS OF THE ASSESSEE, THE CIT(A) HELD THAT BEYOND MAKING THE CL AIM THAT THE INVESTMENT WAS OUT OF UNDISCLOSED INCOME DECLARED B Y THE ASSESSEE DURING THE COURSE OF SEARCH, NO EVIDENCE S HOWING THAT THE UNDISCLOSED INCOME ADMITTED IN THE BLOCK PERIOD WAS ACTUALLY ROOTED IN THE INVESTMENT OF RS. 1.7 LAKHS WAS MADE BY THE ASSESSEE. FURTHER, THE CIT(A) HELD THAT THE ASSESSE E HAS NOT ESTABLISHED THE CORRECTNESS OF HIS CLAIM AND THE AS SESSING OFFICER WAS CORRECT IN REJECTING THE CLAIM OF UNDISCLOSED I NCOME BEING THE SOURCE FOR INVESTMENT. THE CIT(A), THUS, UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. 6. ON APPEAL BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE, SHRI RAMA RAO FILED THAT THE CAPITAL ACCOUNT FOR TH E YEAR ENDED 31/03/1998 AND REFERRED TO PAGE 3 OF THE PAPER BOO K AND ITA NO. 870/HYD/2012 DEEN DAYAL 4 POINTED OUT THAT 1.7 LAKHS WAS INCLUDED IN THE INCO ME OF RS. 6.00 LAKHS FROM MONEY LENDING. 7. AFTER CONSIDERING THE SUBMISSIONS OF THE PARTIES AND PERUSING THE RECORD, WE ARE OF THE VIEW THAT SINCE THE ASSESSEE HAS PRODUCED THE EVIDENCE TO ESTABLISH THE CORRECTN ESS OF HIS CLAIM, WE DELETE THE ADDITION OF RS. 1.7 LAKHS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A), WHO HAD DISBELIEVED THE SOURCES EXPLAINED FOR THE SAID AMOU NT FOUND IN THE BALANCE SHEET. 8. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 24 TH AUGUST, 2012. SD/- SD/- (D. KARUNAKARA RAO) (ASHA VIJAYARAGHAVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBE R HYDERABAD, DATED: 24 TH AUGUST, 2012. KV COPY TO:- 1) SHRI DEEN DAYAL, C/O SHRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, H.NO. 3-6-643, ST.NO. 9, HIMAYATNAGAR, HYDERABAD 500 029. 2) DCIT, CIRCLE 9(1), HYDERABAD 3) THE CIT (A)-VI, HYDERABAD 4) THE CIT-VI, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.