A.Poturaju, Hyd, Hyderabad V. ACIT, Circle-8(1), Hyd, Hyderabad

ITA 895/HYD/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6248 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 06-10-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 03-07-2015
• Court: TRIBUNAL
• Department Lawyers: A SITARAMA RAO
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 895/HYD/2015 ASSESSMENT YEAR: 2008-09 SHRI A. POTURAJU, HYDERABAD [PAN: ADUPA5296P] VS ASST. COMMISSIONER OF INCOME TAX, RANGE-8(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A. SRINIVAS, AR FOR REVENUE : SHRI A. SITARAMA RAO, DR DATE OF HEARING : 12-01-2017 DATE OF PRONOUNCEMENT : 18-01-2017 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-2, HYDERABAD, DATED 20-04-2015 CONFIRMING THE ADDITION OF RS. 7,44,999/- MADE BY THE ASSESSING OFFICER (AO). 2. BRIEFLY STATED, IN THE SEARCH AND SEIZURE OPERATIONS CONDUCTED IN THE CASE OF ONE MR. D. NAGARJUNA RAO, C ERTAIN DOCUMENT PERTAINING TO FIRM M/S. S.V.K. SREE SEETARA MANJANEYA CONSTRUCTIONS WAS FOUND. THAT SHEET INDICATES PAYMENT OF INTEREST TO AN EXTENT OF RS. 7,44,999/- ON 22-10-2007 TO ASSESS EE. AO IN THE ASSESSMENT PROCEEDINGS MADE AN ADDITION OF THE ABOV E AMOUNT STATING AS UNDER: I.T.A. NO. 895/HYD/2015 :- 2 -: 3. AS PER PAGE NO.83 TO THE ANNEXURE-A/DNR/04 OF THE SEIZED MATERIAL, IT WAS FOUND THAT MR. A. POTHURAJU, ASSES SEE HAS EARNED UNACCOUNTED INTEREST INCOME OF RS. 7,44,999/- ON TH E CAPITAL INTRODUCED OF RS. 40,00,101/- IN THE FIRM M/S.SVK SREE SEETARAMAN JANEYA CONSTRUCTIONS. 3.1. AS THE ASSESSEE HAS CONFIRMED THAT HE HAS MAD E AN INVESTMENT OF RS.40,00,001/- IN THE FIRM M/S.SVK SREE SEETARAM ANJANEYA CONSTRUCTIONS IN REPLY TO THE Q.NO.8 OF THE STATEME NT RECORDED U/S. 131 OF THE INCOME-TAX ACT, 1961 ON 06.02.2008, VIDE ORDER SHEET NOTING DATED 29.12.2009, THE ASSESSEE HAS BEEN ASKED TO EXPLAIN WHY THE INTEREST INCOME OF RS. 7,44,999/- ON THE CAPITAL INTRODUCED IN THE ABOVE FIRM SHOULD NOT BE TREATED AS UNACCOUNTED INCOME. IN RE SPONSE TO THE SAME, ASSESSEE HAS NOT SUBMITTED ANY EXPLANATION. 3.2. IN VIEW OF THE ABOVE, THE INTEREST INCOME EAR NED OF RS. 7,44,999/- ON THE CAPITAL INTRODUCED IN THE FIRM M/ S.SVK SREE SEETARAMANJANEYA CONSTRUCTIONS, IS TREATED AS UNEXP LAINED INCOME OF THE ASSESSEE AND ACCORDINGLY ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 2.1. HOWEVER, IN THE COMPUTATION OF INCOME, THE ADDITIO N WAS MADE U/S. 68 OF THE INCOME TAX ACT [ACT] AS UNEXPLAIN ED INVESTMENT (AS DISCUSSED IN PARA 4.2, WHEREAS THE DI SCUSSION WAS IN PARA 3.2.) ASSESSEE AGGRIEVED BY THE ORDER OF AO , PREFERRED AN APPEAL BEFORE THE LD.CIT(A)-2. LD.CIT(A) IN HIS BRI EF ORDER HAS DISMISSED THE ASSESSEES APPEAL STATING AS UNDER: 5.1. DURING THE COURSE OF APPEAL PROCEEDINGS THE APPELLANT SUBMITTED WRITTEN SUBMISSIONS ALONG WITH COPY OF AC KNOWLEDGEMENT OF RETURN OF INCOME, COMPUTATION OF INCOME, BALANCE SH EET AND PROFIT & LOSS ACCOUNT OF M/S. SVK SREE SEETARAMANJANEYA CONSTRUCT IONS WHERE THE APPELLANT HAS MADE AN INVESTMENT OF RS. 40,00,101/- . AFTER PERUSAL OF THE ABOVE DOCUMENTS, IT IS CLEAR THAT THIS DOES NOT IN ANY WAY ESTABLISH THAT THE INTEREST INCOME WHICH HAS BEEN TREATED AS UNEXPLAINED INVESTMENT AS PER PARA 3.1 OF THE ASSESSMENT ORDER WAS INCORRECT. HENCE, GROUND NO.2 IS DISMISSED. 3. AFTER CONSIDERING THE RIVAL CONTENTIONS OF THE LD. C OUNSEL AND LD.DR, WE ARE UNABLE TO UNDERSTAND HOW THE LD.CIT(A) C ONFIRMED THE AMOUNT WITHOUT GIVING ANY VERIFIABLE REASON. MOREO VER, AO MENTIONS THAT THIS IS AN INCOME RECEIVED WHEREAS LD.CIT (A) I.T.A. NO. 895/HYD/2015 :- 3 -: CONSIDERED IT AS UNEXPLAINED INVESTMENT. EVEN THOUGH LD.CIT(A) STATES THAT ASSESSEE HAS MADE WRITTEN SUBMISSIONS, NO DI SCUSSION WHAT-SO-EVER WAS MADE BY THE LD.CIT(A) SO THAT THE DECI SION OF THE CIT(A) COULD BE EXAMINED ON THAT BASIS. THERE SEEMS TO BE NO APPLICATION OF MIND WHILE DISMISSING ASSESSEES APPE AL. CONSEQUENTLY, WITHOUT GOING TO THE MERITS OF ADDITION MAD E BY THE AO AS WELL AS THE SUBMISSIONS OF ASSESSEE THAT NO SU CH AMOUNT WAS RECEIVED BY HIM, WE ARE OF THE OPINION THAT THE IS SUE IS TO BE RE-EXAMINED BY THE LD.CIT(A), AFTER CONSIDERING ASSE SSEES SUBMISSIONS. IN VIEW OF THAT, WE SET ASIDE THE IMPUGN ED ORDER AND THE APPEAL BEFORE HIM IS RESTORED FOR CONSIDERING ASSESSEES CONTENTIONS AND AOS ORDER AFRESH, IN THE LIGHT OF THE FACTS AND LAW ON THE ISSUE. THE CONTENTIONS OF THE ASSESSEE AND WHAT HAPPENED IN THE CASE OF THE FIRM WHO IS STATED TO HAVE PAID INTE REST AND OTHERS WHO RECEIVED AS STATED IN THE SAID SHEET ALSO R EQUIRE EXAMINATION. WE EXPECT THE LD.CIT(A) TO PASS A DETAILE D ORDER RATHER THAN DISMISSING WITH A CRYPTIC ORDER WITHOUT GIVI NG ANY REASONS. WITH THESE OBSERVATIONS, ASSESSEES GROUNDS ARE CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. 4. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH JANUARY, 2017 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 18 TH JANUARY, 2017 TNMM I.T.A. NO. 895/HYD/2015 :- 4 -: COPY TO : 1. SHRI A. POTURAJU, FLAT NO. 410, PUJITHA ESTATES, KAVYA BLOCK, SUNDER NAGAR, HYDERABAD. 2. ASST. COMMISSIONER OF INCOME TAX, RANGE-8(1 ), HYDERABAD. 3. CIT (APPEALS)-2, HYDERABAD. 4. PR.CIT-2, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.