M/s Megacity (Bangalore) Developers & Builders Limited , Bangalore V. The Deputy Commissioner of Income Tax Circle-4(1)(2), Bangalore

ITA 884/BANG/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9238 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-07-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 24-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHI MISRA
• Assessee Lawyers: K MALLAHARAO
• Keywords: Unexplained cash credit; Additional evidence; Set aside
• Section: 250; 13; 147; 131; 68; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES B BENCH: BANGALORE BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 884 /BANG/201 9 (ASSESSMENT YEAR: 20 11 - 12 ) M/S. MEGACITY (BANGALORE) DEVELOPERS & BUILDERS LTD., NO.120, MEGA TOWERS, KH ROAD, BANGALORE - 560 027 .APPELLANT PAN AABCM2013K VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE 4(1)(2), BANGALORE. RESPONDENT. ASSESSEE BY: SHRI K. MALLAHA RAO, ADVOCATE. REVENUE BY: SHRI PRIYADARSHI MISRA, JCIT (D.R) DATE OF HEARING : 27.07 .20 20. DATE OF PRONOUNCEMENT : 13 .08 .20 20. O R D E R PER SHRI PAVAN KUMAR GADA LE, JM : THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF C OMMISSIONER OF INCOME TAX (APPEALS) - 4 , BANGALORE PASSED U/S 1 44 R.W.S 14 7 AND 250 OF THE INCOME TAX ACT, 1961 (THE ACT) . 2. THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL : 2 ITA NO. 884/BANG/2019 3 ITA NO. 884/BANG/2019 3. THE BRIEF FACTS OF THE CASE ARE THAT , THE ASSESSEE COMPANY IS ENGAGED IN THE B USINESS OF ACQUISITION OF LAND, CONVERSION , FORMATION OF APPROVED LAYOUT AND SALE OF LANDS. DURING THE FI NANCIAL YEAR AS PER CIB INFORMATION, THE ASSESSEE COMPANY HAS MADE CASH DEPOSITS IN THE B ANK ACCOUNT MAINTAINED WITH ROYAL BANK OF SCOTLAN D, RESIDENCY ROAD, BANGALORE. T HE ASSESSEE COMPANY HAS NOT FILED THE RETURN OF I NCO ME FOR THE ASST. YEAR 2011 - 12, THEREFORE THE ASSESSING O FFICER HAS INITIATED REASSESSMENT PRO CEED INGS UNDER SECTION 147 OF THE ACT AND ISSUED NOTICE UNDER S ECTI ON 148 ON 31.3.2018. SINCE THERE WAS NO RESPONSE TO NOTICE U/SEC148 OF THE ACT, THE ASSESSING OFFICER HAS ISSUED SUMMONS UNDER SECTION 131 OF THE ACT TO THE D IRECTOR OF THE ASSESSEE COMPANY AND T HE STATEMENT WAS RECORDED. SUBSEQUENTLY , SHOWCASE NOTICE WAS IS SUED TO THE ASSESSEE COMPANY TO EXPLAIN CASH DEPOSITS AGGREGATING TO RS.42 , 61,000 / - DEPOSITED IN THE RO YAL BANK OF SCOTLAND ON 4 ITA NO. 884/BANG/2019 VARIOUS DATES. IN RESPONSE THE LDAR OF THE ASSE SSEE COMPANY APPE ARED AND FURNISHED THE COPY OF COMPUTATION OF INCOME, AUDITED FINANCIAL STATEMENTS AND B ANK STATEMENT OF ROYAL BANK OF SCOTLAND AND SOUGHT TIME FOR SUBMITTING THE RETURN OF INCOME AND R EPLY TO SHOW CAUSE NOTICE . HOWEVER ASSESSING OFFICER FOUND THAT NO R ETU RN OF INCOME WAS FILED BY THE ASSESSEE OR REPLY WAS FURNISHED . T HE AO ON PERUSAL OF B ANK STATEMENT , FOUND THAT THE TOTA L CASH DEPOSITS IN THE BANK ACCOUNT IN THE FINANCIAL YEAR 2010 - 2011 AGGREGATED TO RS.89,86,000 / - AND OBSERVED THAT IN SPITE OF PROVIDING SEVERAL OPPORTUNITIES TO THE ASSESSEE , NO EXPLANATIONS WERE FURNISHED AND HENCE M ADE AN ADDITION OF DEPOSITS AS UNEXPLAINED CASH CREDITS UNDER SECT ION 68 OF THE ACT AND ASSESSED THE TOTAL INCOME OF RS.1,23,55,792 / - AND PASSED ORDER UNDER SECTION 144 R.W.S . 147 OF THE ACT D T.26.12.2018. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT (APPEALS) , WHEREAS THE CIT (APPEALS ) CONSIDERED THE GROUNDS OF APPEAL , STATEMENT OF FACTS, FINDINGS OF THE ASSESSING OFFICER AND WRITTEN SUBMISSIONS OF TH E ASSESSEE FOUND THAT ADEQUATE OPPORTUNITIES OF HEARING WERE PROVIDED BY THE ASSESSING OFFICER BUT THE ASSESSEE COMPANY HAS NOT FILED THE RETURN OF INCOME NOR EXPLANATIONS WERE FURNISHED WITH REGARD TO DEPOSITS IN BANK ACCOUNT. FURTHER ASSESSEE FAILED TO S UBSTAN TIATE WITH EVIDENCE, THAT THE AMOUNTS DEPOSITED IN THE BANK ACCOUNT REPRESENTS THE ADVANC ES RETURNED BACK FROM BUILDERS. FINALLY THE LDCIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER AND DIS MISSED THE ASSESSEE'S APPEAL. 5 ITA NO. 884/BANG/2019 AGGRIEVED BY THE ORDER OF CIT (APP EALS), THE ASSESSEE HAS FILED APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING, T HE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE CIT (APPEALS) HAS ERRED IN IGNORING THE FACT S , THAT THE CASH DEPOSITS MADE IN ROYAL BANK OF SCOTLAN D ARE SUPPORTED WITH SOURCES, WHICH INCLUDES RS.74,00,000 / - PERTAINING TO L AND ADVANCES RETURNED BY THE FARMERS AND RS.6,21,000 / - WAS DEPOSITED OUT OF THE OPENING BALANCE ON HAND AND RS.9,65,000 / - ARE THE DEPOSIT S OUT OF SELF WITHDRAWALS OF CASH MADE BY TH E ASSESSEE. FURTHER THE LDAR FILED AN APPLICATION UND ER RULE 29 OF ITAT RULES FOR ADMISSION OF ADDITIONAL EVIDENCE WHICH WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER OR CIT(A) AND PRAYED FOR ADMISSION OF ADDITIONAL EVIDENCE AND OPPORTUNITY TO SUBSTANTI ATE THE CASE BEFORE LOWER AUTHORITIES . CONTRA, THE LD DR SUPPORTED THE ORDERS OF CIT (APPEALS) AND OBJECTED FOR THE ADMISSION OF ADDITIONAL EVIDENCE . 5. WE HEARD THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL ON RECORD. THE LEARNED A UTHORIZED R EPRESENTATIV E SUBMITTED THAT THE ASSESSEE COMPANY IS IN THE BUS INESS OF ACQUISITION OF LAND, CONVERSION AND FO RMATION OF LAYOUT . THE ASSESSEE COMPANY RECEIVES AD V ANCES FRO M THE CUSTOMERS FOR LAND PURCHASES AND FURTHER ADVANCES RE TURNED BY THE FARMERS ARE ALSO DEPOSITE D IN THE ROYAL BANK OF SCOTLAND AND THE ASSESSEE COMPANY HAS SOURCES SUPPORTING THE DEPOSITS. THE LDAR EMPHASIZED THAT 6 ITA NO. 884/BANG/2019 THE ASSESSEE HAS FILED AN APPLICATION UNDER RULE 29 OF ITAT RULES FOR ADMISSION OF ADDITIONAL EVIDENCE WHICH WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER OR CIT(A) AND SUCH EVIDENCES PLAYS A VITAL ROLE IN DECISION MAKING AND GOES TO ROOTS OF THE CASE AND PRAYED FOR OP PORTUNITY OF HEARING . WE FOUND , THE A O HAS MADE BEST JUDGMENT ASSESSMENT UNDER SECTION 144 R.W.S 147 OF THE ACT AS THE ASS ESSEE HAS FAILED TO FURNISH THE DETAILS FOR VARIOUS REASONS. THE LDDR HAS OBJECTED FOR ADMISSION OF EVIDENCES AS THE ASSESSING OFFICER WAS DENIED THE OPPORTUN ITY OF EXAMINING THE EVIDENCES. WE ARE OF THE OPINION THAT , THE ASSESSING OF FICER SHOULD BE PROVID E D AN OPPORTUNITY TO VERIFY AND EXAMINE THE EVIDENCES FILED IN THE COURSE OF HEARING. ACCORDINGLY , IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF CIT(A) AND ADMIT THE ADDITIONAL EVIDENCE S AND REMIT THE ENTIRE DISPUTED ISSUES ALONG WITH EVIDENCES TO THE FILE OF ASSESSING O FFICER TO VERIFY AND EXAMINE THE CLAIM OF THE ASSESSEE AND ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/ - SD/ - ( B.R. B ASKARAN ) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13.08. 20 20 . *REDDY GP 7 ITA NO. 884/BANG/2019 COPY TO 1. THE APPELLANT 2. THE RESP ONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE