Srinivasa Chakravarthi Raju Gokaraju, Hyd, Hyderabad V. DCIT,Circle-16(1), Hyderabad, Hyderabad

ITA 870/Hyd/2017

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 9348 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2008-2009
• Appeal Filed On: 18-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Keywords: Unexplained cash credit; Unexplained investment; Additional evidence
• Section: 147; 68; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES : BENCH “B” HYDERABAD (Through Video Conference) BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A. No. 869/Hyd./2017 A.Y : 2007-08 Sri Srinivasa Chakravarthi Raju Gokaraju vs. Dy.CIT, Circle 16(1) Hyderabad Hyderabad [PAN: AEIPG9059B] I.T.A. No. 1045/Hyd./2017 A.Y : 2007-08 ACIT, Circle 16(1) vs. Sri Srinivasa Chakravarthi Raju Gokaraju Hyderabad Hyderabad I.T.A. No. 870/Hyd./2017 A.Y : 2008-09 Sri Srinivasa Chakravarthi Raju Gokaraju vs. Dy.CIT, Circle 16(1) Hyderabad Hyderabad I.T.A. No. 1046/Hyd./2017 A.Y : 2008-09 ACIT, Circle 16(1) vs. Sri Srinivasa Chakravarthi Raju Gokaraju Hyderabad Hyderabad I.T.A. No. 871/Hyd./2017 A.Y : 2009-10 Sri Srinivasa Chakravarthi Raju Gokaraju vs. Dy.CIT, Circle 16(1) Hyderabad Hyderabad I.T.A. No. 1047/Hyd./2017 A.Y : 2009-10 ACIT, Circle 16(1) vs. Sri Srinivasa Chakravarthi Raju Gokaraju Hyderabad Hyderabad a n d I.T.A. No. 872/Hyd./2017 A.Y : 2012-13 Sri Srinivasa Chakravarthi Raju Gokaraju vs. Dy.CIT, Circle 16(1) Hyderabad Hyderabad (Appellant) (Respondent) ITA Nos. 869 to 872/Hyd/2017 AYs: 2007-08, 2008-09, 2009-10 & 2012-13 Shri Srinivasa Chakravarthi Raju Gokaraju vs. Dy.CIT, Circle 16(1) ITA Nos. 1045 to 1047Hyd/17 ACIT Circle 16(1) vs. Srinivasa Chakravarthi Raju Gokaraju 2 For Assessee: None For Revenue: Shri Y V S T Sai, CIT, D.R. Date of Hearing : 27/09/2021 Date of Pronouncement : 20/10/2021 O R D E R PER S.S. GODARA, J.M. The instant batch of seven appeals pertains to a single assessee Sri Srinivasa Chakravarthi Raju Gokaraju. The assessee’s three appeals ITA 869 to 872/Hyd/17 along with Revenue’s Cross appeals in former three of them; as the case may be, arise against CIT(A)-4, Hyderabad’s separate orders all dated 30 th March, 2017 in case nos. 234 to 238/2016-17 (assessment year wise); involving proceedings u/s 143(3) rws 147 of the Income Tax Act, 1961 (the Act for short) for AY 2007-08 to 2009-10 and u/s 143(3) of the Act for AY 2012-13 respectively. Case called twice. None appears at assessee’s behest. Nor anybody has filed his vakalat in the case files till date. We note that these cases are being listed for hearing since 07.11.2017 wherein the assessee had been duly represented by his counsel without vakalat. We therefore proceed ex parte against him keeping in mind the fact that all these appeals are “very old” cases. 2. A combined perusal of these case files indicates that assessee’s former appeals ITA 869 to 871/H/17 challenge validity of sec 148/147 proceedings taken recourse by both the lower authorities along with addition(s) in the nature of ‘income from other sources’ thereby disallowing agricultural income exemption claim u/s 10(1) of the Act to the extent of 50%; involving varying sums; respectively. The assessee’s sole substantive grievance in last appeal ITA 872/Hyd/17 for AY 2012-13 raises sole substantive grievance of ITA Nos. 869 to 872/Hyd/2017 AYs: 2007-08, 2008-09, 2009-10 & 2012-13 Shri Srinivasa Chakravarthi Raju Gokaraju vs. Dy.CIT, Circle 16(1) ITA Nos. 1045 to 1047Hyd/17 ACIT Circle 16(1) vs. Srinivasa Chakravarthi Raju Gokaraju 3 agricultural income being treated as ‘income from other sources’ after disallowing sec10(1) exemption in tune with the earlier three assessment years. 3. The Revenue’s identical sole substantive grievance in all three cross appeals ITA 1045 to 1047/H/17 seeks to reverse the CIT(A)’s action deleting sec.68/69 unexplained cash credits addition(s) involving varying sums after admitting additional evidence in contravention of Rule 46A of the Income Tax Rules; respectively. 4. We proceed to deal with the assessee’s former legal ground in AY 2007- 08 to 2009-10. There is hardly any dispute that he had not filed his regular return despite having made the impugned investments.. This made the Assessing officer to form reasons to believe that his taxable income had escaped assessment regarding the foregoing unexplained investments as well as alleged bogus agricultural income He thereafter set into motion sec.148/147 mechanism and framed all the three consequential assessments herein making the twin unexplained cash credits as well as bogus agricultural income additions. We find from a combined perusal of assessee’s three appeals; and more particularly in light of Assessing officer’s re-opening reasons, that he had gone by sufficient tangible material to record the foregoing reasons. We thus find no merit in the assessee’s instant identical former substantive ground in AY 2007-08 to 2008-09. 5. Next comes his latter substantive ground in the foregoing three appeals and sole grievance in AY 2012-13 that both the lower authorities have erred in law and on facts in treating his agricultural income; involving varying sums, as ‘income from other sources’ on approximate method. 5.1. Ld.CIT-DR fails to rebut the clinching fact that there is no discussion even while in the re-assessment or in CIT(A)’s detailed findings considering ITA Nos. 869 to 872/Hyd/2017 AYs: 2007-08, 2008-09, 2009-10 & 2012-13 Shri Srinivasa Chakravarthi Raju Gokaraju vs. Dy.CIT, Circle 16(1) ITA Nos. 1045 to 1047Hyd/17 ACIT Circle 16(1) vs. Srinivasa Chakravarthi Raju Gokaraju 4 the assessee’s lends along with the crops sown therein before partly rejecting his sec. 10(1) exemption. We thus accept the assessee’s corresponding substantive grounds in all these assessments and restore the instant common issue back to the Assessing officer for his afresh factual verification within three effective opportunities of hearing. The assesseee’s identical latter substantive grievance in AY 2007-08 and 2009-10 and the sole substantive ground in AY 2012-13 are allowed for statistical purposes. His appeals ITA nos. 869 to 871/H/17 are partly allowed for statistical purposes and last appeal ITA 872/H/17 is allowed for statistical purposes. 6. Next come the Revenue’s Cross appeals 1045 to 1047/H/17 seeking to revive sec.68 unexplained cash credits additions ; involving varying sums, for the reason that the CIT(A) had admitted additional evidence in violation of Rule 46A of the Income Tax Rules. We note from a combined perusal of the Assessing officer’s re-assessments dated 31.3.2015; and more particularly in para 6, that the assessee had neither offered an explanation nor submitted the corresponding information in support of the investment sum(s) forming subject matter of the impugned addition. The CIT(A)’s detailed discussion has accepted the assessee’s identical second substantive ground as under: “7. The ground no.s 3 and 4 are with regard to treating the amount of Rs. 12,05,00,000/- representing investment in share capital and share premium amount of Leo Meridian Infrastructure Projects & Hotels Pvt.. Ltd. As the income of the appellant u/s 68 of the Act. 7.1. With regard to above grounds, the AO during the course of assessment proceedings, observed as under: As per the information gathered the assessee has made investments to the extent of Rs. 12,05,00,000/- in M/s Leo Meridian Infrastructure Projects & Hotels Pvt Ltd. These investments are from unexplained sources, as the assessee has not disclosed these incomes/investments in his return for the AY 2007-08. ITA Nos. 869 to 872/Hyd/2017 AYs: 2007-08, 2008-09, 2009-10 & 2012-13 Shri Srinivasa Chakravarthi Raju Gokaraju vs. Dy.CIT, Circle 16(1) ITA Nos. 1045 to 1047Hyd/17 ACIT Circle 16(1) vs. Srinivasa Chakravarthi Raju Gokaraju 5 ITA Nos. 869 to 872/Hyd/2017 AYs: 2007-08, 2008-09, 2009-10 & 2012-13 Shri Srinivasa Chakravarthi Raju Gokaraju vs. Dy.CIT, Circle 16(1) ITA Nos. 1045 to 1047Hyd/17 ACIT Circle 16(1) vs. Srinivasa Chakravarthi Raju Gokaraju 6 ITA Nos. 869 to 872/Hyd/2017 AYs: 2007-08, 2008-09, 2009-10 & 2012-13 Shri Srinivasa Chakravarthi Raju Gokaraju vs. Dy.CIT, Circle 16(1) ITA Nos. 1045 to 1047Hyd/17 ACIT Circle 16(1) vs. Srinivasa Chakravarthi Raju Gokaraju 7 ITA Nos. 869 to 872/Hyd/2017 AYs: 2007-08, 2008-09, 2009-10 & 2012-13 Shri Srinivasa Chakravarthi Raju Gokaraju vs. Dy.CIT, Circle 16(1) ITA Nos. 1045 to 1047Hyd/17 ACIT Circle 16(1) vs. Srinivasa Chakravarthi Raju Gokaraju 8 the company instead there is repayment received. However, the fresh investment was from Sri Prasanth Kolluri and not from the appellant. Therefore, ITA Nos. 869 to 872/Hyd/2017 AYs: 2007-08, 2008-09, 2009-10 & 2012-13 Shri Srinivasa Chakravarthi Raju Gokaraju vs. Dy.CIT, Circle 16(1) ITA Nos. 1045 to 1047Hyd/17 ACIT Circle 16(1) vs. Srinivasa Chakravarthi Raju Gokaraju 9 the AO is not correct to add Rs. 12,05,00,000/- which was the opening balance of the appellant during this year as unexplained. Since this amount not introduced during this year therefore, does not pertain to this year, hence, the addition made by the AO deleted. However, the AO is free to verify and to take necessary action in the earlier AYs, if necessary. 7. It is sufficiently clear from a perusal of the CIT(A)’s foregoing detailed discussion that the assesseee’s details of the impugned sum(s) forming part of opening capital as on 01.04.2007 and afterwards; as the case may be, had remained unverified from the Assessing officer’s end since the same had nowhere been placed on record during the course of all these assessments. We are also very well conscious of the fact that the assessee had not filed any return(s) in the said earlier assessment years so as to prove the corresponding closing opening balances. We accordingly find merit in Revenue’s instant argument alleging violation of Rule 46A of Income tax Rules and deem it proper to restore its identical sole substantive grievance back to the Assessing officer for his afresh adjudication as per law within three effective opportunities of hearing. Ordered accordingly. Revenue’s instant three appeals ITA 1045 to 1047/H/17 are allowed for statistical purposes. 8. To sum up, assessee’s appeals ITA 869 to 871/Hyd/2017 along with Revenue’s Cross appeals ITA 1045/H/17 to 1047/H/17 are allowed for statistical purposes in above terms. The assessee’s last appeal ITA 872/Hyd/17 is allowed for statistical purposes in above terms. Ordered accordingly. A copy of this common order be placed in the respective case files. Pronounced in Open Court on 20th October, 2021. Sd/- Sd/- (L.P. SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: the 20th October, 2021. * gmv ITA Nos. 869 to 872/Hyd/2017 AYs: 2007-08, 2008-09, 2009-10 & 2012-13 Shri Srinivasa Chakravarthi Raju Gokaraju vs. Dy.CIT, Circle 16(1) ITA Nos. 1045 to 1047Hyd/17 ACIT Circle 16(1) vs. Srinivasa Chakravarthi Raju Gokaraju 10 Copy of the Order forwarded to: 1. Sri Srinivasa Chakravarthi Raju Gokaraju, C/o Sri T. Chaitanya Kumar, Advocate, Flat no. 102, Gauri Apartments, Urdu lane, Himayatnagar, Hyderabad 500 028, Telangana 2. Dy.CIT, Circle 16(1), Hyderabad 3. ACIT, Range - 16, Hyderabad 4. CIT(A)-4, Hyderabad 5. Pr.CIT-4 , Hyderabad 6. DR, ITAT, Hyderabad. 7. Guard File.