Kandula Ranga Reddy, Hyderabad V. ACIT,Central Circle, Vijayawada

ITA 89/VIZ/2022

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0217 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 24-04-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Salary income
• Section: 132; 143(3); 142(1); 153A; 143(2); 139(1); 13

Judgement Text

आयकर अपीऱीयअधिकरण, विशाखापटणम पीठ, विशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्ि ू रु आर एऱ रेड्डी, न्याययक सदस्य एिं श्री एस बाऱाक ृ ष्णन, ऱेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अऩीऱ सं./ I.T.A. No.89/Viz/2022 (ननधधारण वषा / Assessment Year :2015-16) Kandula Ranga Reddy, Hyderabad. PAN: ALTPK 9573 C Vs. Asst. Commissioner of Income Tax, Central Circle, Vijayawada. (अऩीऱधथी/ Appellant) (प्रत्यथी/ Respondent) अऩीऱधथी की ओर से/ Appellant by : Sri M.V. Prasad, CA प्रत्यधथी की ओर से / Respondent by : Sri MN Murthy Naik, CIT-DR स ु नवधई की तधरीख / Date of Hearing : 27/06/2022 घोषणध की तधरीख/Date of Pronouncement : 27/07/2022 O R D E R PER S. BALAKRISHNAN, Accountant Member : This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Appeals)-12,Hyderabad [the Ld. CIT(A)] in appeal no. 10412/2019-20, dated 24/01/2022 arising out of the order passed U/s. 143(3) r.w.s 153A of the Income Tax Act, 1961 [“the Act”] for the AY 2018-19. 2 2. In this appeal, there is a delay of 31 days in filing the appeal before the Tribunal. In this regard, the Ld. AR brought our attention to the affidavit filed by the assessee and submitted that during the relevant period the assessee was fully engaged in shifting of his office from Vijayawada to Hyderabad because of lack of business avenues at Vijayawada and this consumed time and moreover because of change of assessee’s address, the CIT(A)’s order could not be received in time. Under these circumstances, the assessee filed the appeal beyond the prescribed time limit. Therefore, the Ld. AR prayed for condonation of the delay. After hearing the Ld. AR and on perusal of the Affidavit filed by the assessee, we are of the view that there is a sufficient and reasonable cause for not filing the appeal before the Tribunal within the prescribed time limit and hence we hereby condone the delay of 31 days and proceed to adjudicate the appeal on merits. 3. Brief facts of the case are that the assessee is a Director in M/s. Yugaandhar Housing Private Limited filed his return of income on 31/3/2017 declaring a total income of Rs.20,86,110/-. A search and seizure operation u/s. 132 of the Act was conducted in the group cases of M/s. Yugaandhar Housing 3 Private Limited and others on 25/10/2017 including the residence of the assessee. Consequent to the search notice U/s. 153C of the Act calling for return of income was issued to the assessee and served on 11/09/2019. As there was no response, another notice U/s. 142(1) was issued on assessee on 05/12/2019 and again on 13/12/2019. In response to the final notice, assessee filed his return of income on 14/12/2019 with the same total income filed U/s. 139(1) of the Act. Subsequently, notice U/s. 143(2) was issued to the assessee on 16/12/2019. The AO also issued a show cause letter dated 17/12/2019 to explain the source of payment of advances of Rs. 29,89,500/- paid to the persons as advance for purchase of immovable property as detailed in page 3 of the assessment order. In response to the notice assessee filed a reply through his Authorized Representative and the AO considering the submissions made by the Authorized representative assessed the income of the assessee at Rs. 16,89,500 as unexplained money U/s. 69 of the Act. Aggrieved by the order of the Ld. AO, the assessee went on appeal before the Ld. CIT(A). The Ld. CIT(A) observed that in respite of several opportunities provided to the assessee the assessee has not appeared for or furnished the 4 details called for dismissed the appeal of the assesse in limine. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us. 4. The assessee raised the following grounds of appeal: “1. The Ld. CIT(A) erred in f acts and law while passing the order. 2. The Ld. CIT(A) ought to have considered the appeal based on merits of the case instead of dismissing the appeal. 3. On the f acts and circumstances of the case, the Ld. CIT(A) ought to have noticed that the Assessing Officer is not justified in making the additions towards unexplained investment in land as the sources for the same is out of earlier period savings in salary derived from Yugaandhar Housing Private Limited and also current year salary. 4. On the f acts and circumstances of the case the Ld. CIT(A) ought to have noticed that the Assessing Officer is not correct and erred in not considering that the appellant is regular income tax assessee filing the returns of income. 5. Any other ground or grounds that may be urged at the time of hearing of the appeal.” 5. The Ld. AR submitted that the assessee is a salaried employee deriving income of Rs. 18 lakhs as salary from the company. The Ld. AR further submitted that the investment of Rs. 29,89,500/- towards acquisition of immovable property was 5 made out of the funds available from the salary income and out of the own savings by the assessee from the salary income earned in earlier years. Per contra, the Ld. DR relied on the order of the Ld. AO. 6. We have heard both the sides and perused the material available on record and the orders of the authorities below. Admitted facts are that the assessee’s sources of income from salary Rs. 18 lakhs was not disputed by the Ld.AO and the Ld. AO has considered Rs. 13 lakhs as surplus available for investment made by the assessee. However, it is observed that the Ld. AO has not given any credit for the savings made by the assessee out of the salary income earned during the earlier years. We find merit in the argument of the Ld. AR that the amount of Rs. 16,89,500/- is met out of the own savings of the assessee and cannot be treated as unexplained investment. The Ld. AO has merely stated that the savings from salary earned in the previous years is not acceptable and hence could not be treated as investment in the immovable properties. The Ld. AO has considered a surplus balance available with the assessee Rs. 13 lakhs out of the salary income of Rs. 18 lakhs earned during the current Financial Year but has failed to appreciate the fact that 6 the similar savings shall be available with the assessee for the earlier assessment years. Therefore, we are of the considered view that the mere assumption of the AO that the assessee was not having sufficient accumulated cash balances out of the salary income earned during the earlier years is not acceptable and therefore we hereby quash the orders of the Ld. Revenue Authorities and allow the appeal of the assessee. 7. In the result, appeal of the assessee is allowed. Pronounced in the open Court on the 27 th July, 2022. Sd/- Sd/- (द ु व्ि ू रु आर.एऱ रेड्डी) (एस बाऱाक ृ ष्णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) न्याययकसदस्य/JUDICIAL MEMBER ऱेखा सदस्य/ACCOUNTANT MEMBER Dated : 27.07.2022 OKK - SPS आदेश की प्रतिलिपि अग्रेपिि/Copy of the order forwarded to:- 1. ननधधाररती/ The Assessee – Kandula Ranga Reddy C/o. MV Prasad, CA, D.NO.60-7-13, Ground Floor, Siddhartha Nagar, 4 th Lane, Vijayawada, Andhra Pradesh-520010. 2. रधजस्व/The Revenue – The Asst. Commissioner of Income Tax, Central Circle, Stalin Towers, Autonagar, Vijayawada, Andhra Pradesh – 520007. 7 3. The Principal Commissioner of Income Tax (Central), Visakhapatnam. 4. आयकर आय ु क्त (अऩीऱ)/ The Commissioner of Income Tax-12, Hyderabad. 5. ववभधगीय प्रनतननधध, आयकर अऩीऱीय अधधकरण, ववशधखधऩटणम/ DR, ITAT, Visakhapatnam 6. गधर्ा फ़धईऱ / Guard file आदेशधन ु सधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam