Muralidhar Harwani, Hyd, Hyderabad V. DCIT, Circle 8(1), Hyderabad, Hyderabad

ITA 900/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6170 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 15-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SITARAMA RAO
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 900/HYD/2016 BLOCK PERIOD: 1996-97 TO 2001-02 MURALIDHAR HARWANI, HYDERABAD. PAN AAFPH 1546 M VS. DY. COMMISSIONER OF INCOME- TAX, CIRCLE 8(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P. MURALI MOHAN RAO REVENUE BY : SHRI SITARAMA RAO DATE OF HEARING 30-01-2017 DATE OF PRONOUNCEMENT 03-02-2017 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A) - 2, HYDERABAD, DATED 19/02/2016 FOR THE BLOCK PERIOD 1996-97 TO 2001-02. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS A MANAGING DIRECTOR IN M/S. SUPREME RECORDING CO (P) LTD, THE COMPANY ENGAGED IN PURCHASE OF AUDIO RIGHTS AND WHO LESALE-CUM- RETAIL TRADING OF RECORDED MUSIC, CASSETTES AND CDS . HE IS BEING ASSESSED TO TAX REGULARLY WITH PAN NO. AAFPH 1546 M . SEARCH AND SEIZURE OPERATIONS U/S.132 WERE CARRIED OUT ON 29/1 1/2002 AT THE RESIDENTIAL PREMISES OF THE ASSESSEE. NOTICES WERE ISSUED U/S.158 BC AND WERE ACCORDINGLY COMPLIED WITH BY FILING RETURN OF INCOME. THE ASSESSMENT PROCEEDINGS WERE COMPLETED U/S.158 BC AN D THE INCOME WAS ASSESSED AT RS.5,39,995/-. 2 ITA NO. 900/H/16 MURALIDHAR HARWANI 2.1 AGGRIEVED BY THE ABOVE ORDER PASSED, THE ASSESS EE FILED APPEAL BEFORE THE CIT(APPEALS),GUNTUR. THE CIT(APPEALS),GU NTUR HAVE DISMISSED THE APPEAL FILED BY THE ASSESSEE AND CONF IRMED THE ORDER OF THE AO. 2.2 HAVING FAILED BEFORE THE CIT(APPEALS),GUNTUR, T HE ASSESSEE FILED APPEAL BEFORE THE HONBLE ITAT, HYDERABAD. TH E HONBLE ITAT, HYDERABAD HAS PARTLY ALLOWED THE APPEAL BY OBSERVI NG AS UNDER: ' THE ASSESSING OFFICER IS REQUIRED TO DETERMINE TH E UNDISCLOSED INCOME EITHER ON THE BASIS OF INCOME METHOD OR INVE STMENT METHOD. FURTHER, IN THIS CASE THE BOOKS OF ACCOUNT ARE NOT WRITTEN UP TO THE DATE OF SEARCH HENCE THE ASSESSING OFFICE R IS DIRECTED TO GIVE DUE CREDIT TO THE AVAILABLE CASH BALANCE AS ON DATE OF SEARCH IN THE BOOKS OF ACCOUNT TO THE PHYSICAL CASH FOUND DURING THE COURSE OF SEARCH. FURTHER, HE HAS TO GIVE CREDI T AND TELESCOPE OUT OF THE UNDISCLOSED INCOME DETERMINED BY HIM DUR ING THAT PERIOD COVERING THE BLOCK PERIOD. 2.3 ACCORDINGLY, COMPLYING WITH THE ABOVE DIRECTION S, THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT BY ASSESSING T HE INCOME TO RS. 4,79,672/- AND RAISED THE DEMAND OF RS.59,607/-. 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT( A) AGAINST THE ORDER OF THE AO. THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE FOR NON-APPEARANCE BEFORE HIM THOUGH THE SUFFICIENT OPP ORTUNITIES WERE PROVIDED, FOLLOWING THE DECISIONS OF HONBLE SUPREM E COURT AND VARIOUS HIGH COURTS INCLUDING THE DECISION OF HONB LE DELHI COURT IN THE CASE OF CIT VS. MULTIPLAN (INDIA) LTD., 38 ITD 320 (DEL.). 3.1 ON MERITS ALSO, THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE OBSERVING THAT THE ACTION OF THE AO IN TRE ATING RS. 1,22,772/.- CASH FOUND IN THE PREMISES AS UNEXPLAIN ED IS JUSTIFIED AND HENCE THE SAME IS CONFIRMED. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LD.CIT(A)-2, HYDERABAD IS ERRON EOUS BOTH ON FACTS AND IN LAW. 3 ITA NO. 900/H/16 MURALIDHAR HARWANI 2. THE LD. CIT(A) ERRED IN UPHOLDING THE ADDITION O F RS. 1,22,772/- 3. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE DIR ECTION OF ITAT TO DETERMINE THE UNDISCLOSED INCOME EITHER ON THE B ASIS OF INCOME METHOD OR INVESTMENT METHOD. 4. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THA T THERE CANNOT BE DOUBLE ADDITION ONE IN THE FORM OF UNDISC LOSED INCOME AND THE OTHER IN THE FORM OF UNDISCLOSED INVESTMENT . 5. THE ASSESSEE MAY ADD, ALTER, OR MODIFY OR SUBSTI TUTE ANY OTHER POINTS TO THE GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF APPEAL. 5. BEFORE US, THE LD. AR OF THE ASSESSEE CONTENDED THAT WHILE PASSING THE ASSESSMENT ORDER, THE ASSESSING OFFICER OUGHT TO HAVE APPRECIATED THE DIRECTION OF ITAT, HYDERABAD TO GIV E DUE CREDIT TO THE AVAILABLE CASH BALANCE AS ON DATE OF SEARCH IN THE BOOKS OF ACCOUNT TO THE PHYSICAL CASH FOUND DURING THE COURSE OF SEA RCH AND FURTHER TO GIVE CREDIT AND TELESCOPING OUT OF THE UNDISCLOSED INCOME DETERMINED BY HIM DURING THAT PERIOD COVERING THE BLOCK PERIOD BEFORE TREATING THE CASH FOUND IN THE PREMISES OF THE ASSESSEE AS UNEXP LAINED. HE SUBMITTED THAT THE CIT(A) WRONGLY CONFIRMED THE ORD ER OF THE AO. 5.1 LD. AR ALSO BROUGHT TO OUR NOTICE THE CALCULATI ON MISTAKE MADE BY THE AO WHILE COMPUTING THE ASSESSED INCOME. 6. THE LD. DR RELIED ON THE ORDERS OF REVENUE AUTHO RITIES AND CONCEDED THE MISTAKE IN CALCULATION OF ASSESSED INC OME IN THE ASSESSMENT ORDER. 7. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. LD. AR HAS BROUGHT TO OUR NOTICE THE CAL CULATION MISTAKE IN ASSESSMENT ORDER, WHICH IS AS BELOW: A) UNDISCLOSED INCOME RS. 1,11,900 B) UNDISCLOSED COMMISSION INCOME RS. 2,45,000 RS. 3,56,900/- LESS : UNEXPLAINED CASH FOUND IN THE PREMISES OF THE ASSESSEE AND ATTRIBUTED TO HIM 4 ITA NO. 900/H/16 MURALIDHAR HARWANI BY THE AOS ORDER. RS. 1,83,095/- LESS : CASH BALANCE AVAILABLE IN SUPREME RECORDING CO. (P) LTD., WHICH IS TO BE REDUCED AS PER ITATS ORDER RS. 60,323/- RS. 1,22,772/- TOTAL RS. 4,79,672/ - BOTH THE LD. AR AND DR ACKNOWLEDGE THAT IN CASE THI S MISTAKE IS RECTIFIED, THERE IS NO NEED FOR ANY TELESCOPIC EFFE CT TO BE GIVEN ON THE UNDISCLOSED INCOME. CONCEDING TO THE ABOVE, WE ARE INCLINED TO DIRECT THE AO TO RECTIFY THE MISTAKE AND ASSESS THE INCOME AT RS.2,34,128/-. ACCORDINGLY, WE DIRECT THE AO TO TAKE INTO CONSIDER ATION THE SAID AMOUNT OF RS. 2,34,128/- AS INCOME OF THE ASSESSEE FOR THE YEAR CONSIDERATION. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON 3 RD FEBRUARY, 2017. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 3 RD FEBRUARY, 2017 KV COPY TO:- 1) SRI MURALIDHAR HARWANI, C/O. P. MURALI & CO., CA S., 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 500 082 2) DCIT, CIRCLE 8 (1), HYDERABAD. 3) CIT(A) - 2, HYDERABAD 4 PR. CIT - 2, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE 5 ITA NO. 900/H/16 MURALIDHAR HARWANI S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR 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