ITO, Ward-3, Warangal V. Dr. V. Ravinder Reddy (HUF), Warangal

ITA 876/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61896 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 11-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M H NAYAK
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Unexplained investment; Depreciation; Revised return
• Section: 133A; 144

Judgement Text

1 ITA NO. 876/HYD/2011 DR. V. RAVINDER REDDY(HUF) IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 876/HYD/2011 ASSESSMENT YEAR : 2002-03 INCOME-TAX OFFICER, APPELLANT WARD 3, HYDERABAD. VS. DR. V. RAVINDER REDDY (HUF) RESPONDENT WARANGAL. (PAN/GIR NO. V-2081) APPELLANT BY : MR. M.H. NAYAK RESPONDENT BY : MR.T. CHAITANYA KUMAR DATE OF HEARING : 17/04/2012 DATE OF PRONOUNCEMENT : 1 8/05/2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-VI, HYDERABAD DATED 13/01/2011 FOR THE ASSES SMENT YEAR 2002- 03. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS A PRACTICING DOCTOR AND A SURVEY OPERATION WAS CONDUCTED U/S 133A OF THE A CT, ON 08/03/2002. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILE D HIS RETURN OF INCOME DECLARING INCOME FROM HOUSE PROPERTY AT RS. 2,63,81 0/- BESIDES AGRICULTURAL INCOME OF RS. 8,90,000/-. SUBSEQUENTL Y, THE CASE WAS SELECTED FROM SCRUTINY AND THE ASSESSMENT WAS COMPL ETED U/S 144 OF THE ACT, BY MAKING ADDITIONS TO THE EXTENT OF RS. 25,20 ,000/- TO THE RETURNED INCOME. ON APPEAL, THE CIT(A) WHILE GIVING SUBSTANT IAL RELIEF TO THE ASSESSEE HAD SUSTAINED THE ADDITIONS MADE ON ACCOUN T OF UNEXPLAINED INVESTMENTS IN WARANGAL INSTITUTE OF MEDICAL SCIENC ES (WIMS) AND 2 ITA NO. 876/HYD/2011 DR. V. RAVINDER REDDY(HUF) WARANGAL COOPERATIVE BANK FOR RS. 14,00,000/- AND R S. 77,000/- RESPECTIVELY. THEREAFTER, THE ASSESSING OFFICER INI TIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT, ON THE GROUND THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME OR FURNISHED IN ACCURATE PARTICULARS OF SUCH INCOME AND HELD THAT THE ASSESSEE HAD WILLF ULLY CONCEALED PARTICULARS OF INCOME TO THE EXTENT OF RS. 14,77,90 0/- AND THEREBY TRIED TO EVADE TAX OF RS. 4,52,237/-. HE, THEREFORE, LEV IED A MINIMUM PENALTY OF RS. 4,52,237/- U/S 271(1)(C) OF THE ACT. AGGRIEV ED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). 3. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT T HE AO COMPLETED THE ASSESSMENT U/S 144 OF THE ACT AND DETERMINED TH E TOTAL INCOME AT RS. 24,40,430/-. THE AO FOR THE REASONS MENTIONED I N THE ASSESSMENT ORDER ARBITRARILY FIXED THE TOTAL RECEIPTS AT RS. 3 2,21,300/- AND ESTIMATED THE NET INCOME THEREON AT 40%OR AT RS. 12,88,520/-. THE AO ALLOWED DEPRECIATION OF RS. 2,50,277/- AND ARRIVED AT THE N ET INCOME OF RS. 10,38,243/-. THE AO ALSO ADDED THE INCOME BELONGING TO HIS WIFE SMT. V. SHOBHA WHICH WAS DETERMINED BY HIM IN THE ASSESSMEN T OF SMT. SHOBHA AT RS. 14,02,191/-. 4. HE FURTHER SUBMITTED THAT WHEN THE APPEAL CAME U P BEFORE THE CIT(A), THE CIT(A) HELD THAT THE SAME WAS TAXABLE I N THE ASSESSMENT OF SMT. SHOBHA AND NOT IN THE ASSESSMENT OF THE ASSESS EE HEREIN. THE DEPARTMENT FILED AN APPEAL BEFORE THE HONBLE ITAT AND THE ITAT VIDE ORDER DATED 18/06/2010 DISMISSED THE APPEAL FILED B Y THE DEPARTMENT. THEREFORE, THE ADDITION MADE OF RS. 14,02,191/- BY THE AO AS BELONGING TO THE ASSESSEE WAS DELETED. 5. IT WAS SUBMITTED THAT WITH REGARD TO THE PROFESS IONAL INCOME ESTIMATED BY THE AO OF RS. 10,38,243/-, THE CIT(A) ESTIMATED THE PROFESSIONAL INCOME AT RS. 7,50,000/- AS AGAINST RS . 10,38,243/-. ON APPEAL BEFORE THE ITAT AGAINST THE ESTIMATION OF TH E PROFESSIONAL INCOME AT RS. 7,50,000/-, THE ITAT VIDE ORDER DATED 18/06/ 2010 HELD THAT THE AMOUNT OF INCOME AS STATED DURING THE COURSE OF SUR VEY AT RS. 4,75,000/- BE ASSESSED AS THE INCOME. THEREFORE, TH E ITAT OBSERVED THAT 3 ITA NO. 876/HYD/2011 DR. V. RAVINDER REDDY(HUF) WHAT WAS STATED DURING THE COURSE OF SURVEY AT RS. 4,75,000/- BE ASSESSED AS THE INCOME AS AGAINST RS. 7,50,000/- DE TERMINED BY THE CIT(A). 6. IT WAS SUBMITTED THAT THE TOTAL AMOUNT OF PROFES SIONAL INCOME WAS ARRIVED AT ONLY ON ESTIMATE. FURTHER, WHILE RECORDI NG THE STATEMENT, THE ASSESSEE HEREIN DID CONSIDER THE DEPRECIATION ALLOW ABLE OF RS.2,50,277/-, WHICH WAS ALLOWED BY THE AO. IF THE AMOUNT ADMITTED AS THE INCOME BY THE ASSESSEE DURING THE COURSE OF SURVEY OF RS. 4,7 5,000/- IS CONSIDERED AND THE DEPRECIATION ALLOWABLE IS REDUCED, THE NET INCOME WOULD WORK OUT TO RS. 2,24,723/-. AS AGAINST THIS AMOUNT, THE ASSESSEE OFFERED AN AMOUNT OF RS. 2,43,430/-. THEREFORE, THERE WILL BE NO CONCEALMENT OF INCOME. 7. AFTER CONSIDERING THE SAID SUBMISSIONS OF THE AS SESSEE, THE CIT(A) HELD AS UNDER:- 5.2 I HAVE GONE THROUGH THE SUBMISSIONS OF THE APPE LLANT AND THE FACTS OF THE CASE AND THE ORDERS OF THE CIT(A) AND THE HONBLE ITAT. SINCE THE ASSESSING OFFICER PROCEEDED TO FINALISE T HE PENALTY PROCEEDINGS PENDING APPEALS BEFORE HONBLE ITAT AND THAT THE QUANTUM APPEALS HAVE BEEN DECIDED AGAINST THE REVEN UE AND IN PARTIAL MODIFICATION TO THE GROUNDS RAISED BY THE A PPELLANT, THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT AGAINST A P REVIOUS QUANTUM ASSESSMENT HAD NO LEGS TO STAND AND AS SUCH REQUIRE S TO BE DELETED. HOWEVER, AS THE QUANTUM ASSESSMENT HAS BEEN MODIFIE D PARTIALLY BY HONBLE ITAT, THE ASSESSING OFFICER IS DIRECTED TO REQUANTIFY THE INCOME IN CONSONANCE WITH THE ORDER OF THE HONBLE ITAT AND PROCEED FURTHER ACCORDING TO LAW. 8. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL:- 1. THE CIT(A) ERRED ON BOTH FACTS AND LAW. 2. THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT T HAT ASSESSE HAS CONCEALED THE PARTICULARS OF INCOME. FURTHER, THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE ASSESSEE HAS AL SO NOT REFLECTED THE INVESTMENT IN HIS ORIGINAL RETURN OF INCOME. 3. THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT T HAT THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE WAS NOT VAL ID AS THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE WAS NOT IN TIME. 9. WE HAVE HEARD ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDERS OF THE AU THORITIES BELOW. WE 4 ITA NO. 876/HYD/2011 DR. V. RAVINDER REDDY(HUF) FIND THAT IN THE QUANTUM APPEAL, THE ADDITIONS MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A) HAD BEEN MODIFI ED PARTIALLY BY THE ITAT, THEREFORE, WE SET ASIDE THE ORDER OF THE CIT( A) U/S 271(1)(C) AND RESTORE THE MATTER TO THE ASSESSING OFFICER TO DECI DE THE SAME AFRESH IN CONSONANCE WITH THE ORDER OF THE ITAT IN QUANTUM AP PEAL., WHICH HAS BEEN SET ASIDE TO THE ASSESSING OFFICER FOR REQ-QUA NTIFICATION OF THE INCOME. 8. IN THE RESULT, APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 18/05/2012. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJ AYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 18 TH MAY, 2012 KV COPY TO:- 1) ITO-WARD-3, WARANGAL. 2) DR.V. RAVINDER REDDY (HUF), 4-32, WARDHAPET, WARANGAL. 3) THE CIT (A)-VI, HYDERABAD 4) THE CIT-VI, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., H YDERABAD ` 5 ITA NO. 876/HYD/2011 DR. V. RAVINDER REDDY(HUF) S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON 26/04/12 SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR 15/05/12 SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER