Tigulla Venkateswara Goud., Hyderabad V. ITO, Ward 9(1), Hyderabad

ITA 923/HYD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6545 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 08-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 03-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHGRI NILKHIL KUMAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT. P.MADHAVI DEVI, JUDICIAL MEMBER A ND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.923/HYD/2014 : ASSESSMENT YEARS 2008-0 9 ITA NO.924/HYD/2014 : ASSESSMENT YEARS 2009-1 0 SHRI TIGULLA VENKATESWARA GOUD HYDERABAD (PAN - ACRPT 0173 C ) V/S INCOME TAX OFFICER WARD 9(1), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.C.DEVDAS RESPONDENT BY : SHGRI NILKHIL KUMAR DR DATE OF HEARING 8.3.2016 DATE OF PRONOUNCEMENT 18.5.2016 O R D E R PER SMT. P.MADHAVI DEVI, JUDICIAL MEMBER : BOTH ARE ASSESSEES APPEALS FOR ASSESSMENT YEARS 2008-09 AND 2009-10 RESPECTIVELY. ITA NO.923/HYD/2014 : ASSESSMENT YEARS 2008-09 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 ON 6.9.20 09 ADMITTING AN INCOME OF RS.2,95,000. DURING THE ASSESSMENT PROCE EDINGS UNDER S.143(3) OF THE ACT, THE ASSESSEE WAS ASKED TO FUR NISH COPY OF THE RETURN OF INCOME ALONGWITH STATEMENTS, BOOKS OF ACC OUNTS, VOUCHERS AND BANK ACCOUNT STATEMENTS. THOUGH THE ASSESSEES CA APPEARED ON 22.9.2010, THERE WAS NO RESPONSE FROM THE ASSESSEE OR HIS REPRESENTATIVE THEREAFTER, IN SPITE OF ISSUANCE OF SUMMONS UNDER S.133(1) OF THE ACT. THE ASSESSING OFFICER PERUSED THE INFORMATION AVAILABLE ON RECORD AND FOUND THAT THE ASSESSEE HAS MADE CASH DEPOSITS OF RS.36,50,000 IN HIS BANK ACCOUNT WITH A BN AMRO BANK, ITA NO.923-924/HYD/2014 SHRI TIGULLA VENKATESWARA GOUD HYDERABAD 2 KOLKATA. SINCE THE ASSESSEE FAILED TO FURNISH ANY I NFORMATION, THE ASSESSING OFFICER TREATED THE ENTIRE CASH DEPOSIT O F RS.36,50,000 AS UNEXPLAINED AND ADDED AS INCOME OF THE ASSESSEE U NDER S.69 OF THE ACT. 3. THE ASSESSING OFFICER FURTHER OBSERVED THAT TH E ASSESSEE HAS INVESTED A SUM OF RS.12 LAKHS IN MUTUAL FUNDS A ND SINCE ASSESSEE HAS NOT FURNISHED ANY EXPLANATION WITH REGARD TO SO URCES FOR THE INVESTMENTS, HE TREATED THE SAME AS UNEXPLAINED INV ESTMENT AND BROUGHT IT TO TAX. 4. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE TH E CIT(A) AD EXPLAINED THE SOURCES FOR THE CASH DEPOSITS AS RENT AL INCOME OF RS.4,50,000 AND ADVANCES RETURNED BY SHRI B.NAGESWA RA RAO OF RS.3,00,000 AND ADVANCE RECEIVED FROM SHRI BARKAT A LI PANJWANI OF RS.29,00,000. THE CIT(A) CALLED FOR A REMAND REPOR T FROM THE ASSESSING OFFICER AND THEREAFTER ACCEPTED THE RENTA L INCOME AND ADVANCE RETURNED BY SHRI B.NAGESWARA RAO AS EXPLAI NED. HOWEVER, AS REGARDS THE ADVANCE RECEIVED FROM SHRI BARKAT ALI P ANJWANI OF RS.29,00,000 THE CIT(A) RELIED UPON THE REMAND REPO RT OF THE ASSESSING OFFICER TO DISALLOW THE SAME. SIMILARLY, AS REGARDS THE INVESTMENTS IN MUTUAL FUNDS ALSO, THE CIT(A) DID NO T ACCEPT THE ASSESSEES CONTENTION AND CONFIRMED THE ASSESSMENT ORDER, BRINGING THE SAME TO TAX. 5. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. 6. AS REGARDS THE ADVANCE RECEIVED OF RS.29,00,000 , IT IS THE CASE OF THE ASSESSEE THAT HE HAD INHERITED A PROPER TY AT GADDINANNARAM ALONGWITH HIS BROTHERS AND SINCE THE RE WERE DISPUTES ITA NO.923-924/HYD/2014 SHRI TIGULLA VENKATESWARA GOUD HYDERABAD 3 WITH REGARD TO THE SAID PROPERTY AMONGST THE BROTHE RS, THE ASSESSEE INTENDED TO SELL THE PROPERTY AT A PRICE LESS THAN THE MARKET PRICE AND HAD ACCORDINGLY ENTERED INTO AN AGREEMENT OF SALE W ITH SHRI BARKAT ALI PANJWANI ON 16.8.2007 AND ACCORDINGLY RECEIVED VAR IOUS AMOUNTS IN CASH, WHICH HAVE BEEN DEPOSITED BY THE ASSESSEE IN HIS BANK ACCOUNT. HE SUBMITTED THAT THE SALE ULTIMATELY DID NOT TAKE PLACE AND THEREFORE, THE REGISTERED DOCUMENT HAS NOT BEEN EXECUTED. THE ASSESSEE HAS FURNISHED AN AFFIDAVIT OF SHRI BARKAT ALI PANJWANI AS WELL AS COPY OF HIS US PASS PASSPORT TO PROVE THAT SHRI PANJWAI IS A RE SIDENT OF US AND ALSO THAT HE HAS ADVANCED THE SUM OF RS.29 LAKHS DU RING THE RELE4VANT PREVIOUS YEAR FOR THE PROPERTY. THE ASSESSEE HAS FI LED A COPY OF THE AGREEMENT OF SALE, CONFIRMATION LETTER AS ADDITIONA L EVIDENCE AND PRAYED THAT THE SAME MAY BE ADMITTED AND THE MATTER REMITTED TO THE ASSESSING OFFICER FOR VERIFICATION AND RECONSIDERAT ION OF THE MATTER ACCORDINGLY. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAD CA LLED FOR THE REMARKS OF THE ASSESSING OFFICER ON THE ADDITIO NAL EVIDENCE FILED BY THE ASSESSEE. THE ASSESSING OFFICER HAS FILED A REP ORT STATING THAT THE ASSESSEE COULD NOT SATISFACTORILY EXPLAIN THE ADVAN CE GIVEN BY SHRI PANJWANI. COPY OF THE SAID REPORT IS FILED BEFORE U S. 8. ON GOING THROUGH THE AGREEMENT OF SALE, CONFIR MATION LETTER OF SHRI PANJWANI AND HIS BANK STATEMENT, WE FIND THAT THE AGREEMENT OF SALE IS DATED 16.8.2007 PURPORTEDLY EX ECUTED AT HYDERABAD, BUT THERE ARE NO WITNESSES TO THE DOCUME NT AND ALSO NO EVIDENCE IS FILED BEFORE US TO SHOW THAT THE ASSESS EE AS WELL AS SHRI PANJWANI, BOTH OF WHOM ARE RESIDENTS OF USA HAVE VI SITED INDIA DURING THE RELEVANT PERIOD. FURTHER, AS RIGHTLY POINTED OU T BY THE ASSESSING OFFICER, THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN AS TO WHY THE ITA NO.923-924/HYD/2014 SHRI TIGULLA VENKATESWARA GOUD HYDERABAD 4 TRANSACTIONS HAVE BEEN DONE IN CASH, WHEN BOTH THE PARTIES WERE RESIDING AT US AND HAD TO WITHDRAW IN CASH AND DEPO SIT IN CASH, WHEN IT COULD HAVE BEEN DONE BY CHEQUE AS STATED IN THE ALLEGED AGREEMENT OF SALE. ASSESSEE ALSO HAS NOT BEEN ABLE TO EXPLAI N AS TO WHETHER HE HAS RETURNED THE ADVANCE TO SHRI PANJWANI, SINCE TH E SALE COULD NOT BE EFFECTED. FURTHER, IT HAS BEEN STATED THAT THE PRO PERTY HAS BEEN INHERITED BY THE ASSESSEE ALONGWITH HIS BROTHERS, B UT IN THIS AGREEMENT OF SALE, ONLY THE ASSESSEE IS SHOWN AS THE VENDEE A ND THOUGH THE EXISTENCE OF DISPUTE IS MENTIONED AND THE RELEVANT DOCUMENTS ARE FILED, WE FIND THAT THE TWO OF HIS BROTHERS ARE ALS O THE PLAINTIFFS ALONGWITH THE ASSESSEE, BUT ARE NOT MADE PARTIES TO THE SAID AGREEMENT OF SALE. THEREFORE, THE EXECUTION OF THE AGREEMENT OF SALE IS NOT PROVED AND THE RECEIPT OF ADVANCE FOR SUCH TRAN SACTION IS ALSO NOT PROVED. IN THE ABSENCE OF ALL THESE DOCUMENTARY E VIDENCE, IT IS DIFFICULT TO ACCEPT THE ASSESSEES CONTENTIONS AND EXPLANATION FOR THE SOURCE OF CASH DEPOSIT INTO ABN AMRO BANK. SINCE T HE ASSESSING OFFICER HAS ALREADY SUBMITTED HIS REMARKS ON THE AD DITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE US, WE DO NOT SEE ANY REASON TO ADMIT THE SAME TO REMAND THE MATTER TO THE FILE OF THE ASSESS ING OFFICER FOR RECONSIDERATION. THEREFORE, WE CONFIRM THE ADDITIO N MADE BY THE ASSESSING OFFICER ON THIS ACCOUNT. 9. AS REGARDS THE ADDITION OF RS.12 LAKHS ON ACCOU NT OF INVESTMENTS IN MUTUAL FUNDS, WE FIND THAT THE ASSES SEE HAS EXPLAINED THE SAME TO BE INVESTMENTS MADE BY HIS DAUGHTER, MS . ANUSHA T. GOUD. LEARNED COUNSEL FOR THE ASSESSEE HAS DRAWN O UR SPECIFIC ATTENTION TO THE PORTFOLIO STATEMENT OF THE TRANSAC TIONS IN MUTUAL FUNDS. FROM PERUSAL THEREOF, WE FIND THAT MS. ANUSH A GOUD HAS PURCHASED RS.5 LAKHS WORTH OF EQUITY FUNDS IN BNP M ULTI MANAGER FUND SERIES 2B ON 12.3.2007, WHICH WAS REDEEMED ON 25.11 .2007 FOR AN ITA NO.923-924/HYD/2014 SHRI TIGULLA VENKATESWARA GOUD HYDERABAD 5 AMOUNT OF RS.5,89,487. THIS SUM WAS AVAILABLE WITH HER FOR PURCHASE OF JP MORGAN INDIA SMALLER COMPANIES FUND GROWTH PL AN OF RS.4 LAKHS, PART OF WHICH WAS LATER REDEEMED ON 5.3.2009 FOR RS .1,07,188. THE SUM OF RS.1,89,823 AVAILABLE INITIALLY WITH MS.ANU SHA GOUD WAS UTILISED FOR PURCHASE OF ICICI PRUDENTIAL INFRASTRU CTURE FUND AND ALSO HSBC UNIQUE OPPORTUNITIES FUND. THUS, IT WAS EXPL AINED THAT THE INITIAL INVESTMENT MADE WAS ONLY OF RS.4 LAKHS AND OTHER INVESTMENTS HAVE BEEN MADE OUT OF THE REDEEMED FUNDS AVAILABL E. WE FIND THAT THESE FACTS HAVE NOT BEEN CONSIDERED BY ANY OF THE AUTHORITIES BELOW. IN VIEW OF THE SAME, WE DEEM IT FIT AND PROPER TO R EMAND THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER, WITH A DIRECTION TO VERIFY THE SAME AND ONLY SUCH SUM WHICH HAS BEEN INVESTED BY THE ASSESS EE IN THE NAME OF HIS DAUGHTER INITIALLY, SHALL BE TREATED AS INVESTM ENT MADE BY THE ASSESSEE AND IF THE ASSESSEE IS ABLE TO EXPLAIN THE SOURCE FOR THE SAID INITIAL INVESTMENT, THEN NO ADDITION UNDER S.69 MA Y BE MADE. IN OTHER WORDS, THIS ISSUE IS REMITTED TO THE FILE O F THE ASSESSING OFFICER FOR FRESH CONSIDERATION IN ACCORDANCE WITH LAW, AFT ER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 10. IN THE RESULT, ASSESSEES APPEAL IS PARTLY AL LOWED FOR STATISTICAL PURPOSES. ITA NO.924/HYD/2014 : ASSESSMENT YEARS 2009-10 11. THE FIRST ISSUE INVOLVED IN THIS APPEAL RELATE S TO THE ADDITION OF RS.47,50,000 ON ACCOUNT OF DEPOSITS MAD E INTO ASSESSEES BANK ACCOUNT, THE SOURCE OF WHICH IS CLAIMED TO BE THE ADVANCE FROM SHRI BARKAT ALI PANJWANI RECEIVED DURING THE RELEVA NT PREVIOUS YEAR. FOR THE REASONS STATED ABOVE, WHILE DEALING WITH TH E CORRESPONDING ADDITION MADE FOR THE ASSESSMENT YEAR 2008-09 IN IT A NO.923/HYD/2014 IN PARA 8 HEREINABOVE, WE CONFIRM T HE ADDITION ITA NO.923-924/HYD/2014 SHRI TIGULLA VENKATESWARA GOUD HYDERABAD 6 MADE FOR THIS YEAR ALSO, REJECTING THE GROUNDS OF T HE ASSESSEE ON THIS ISSUE. 12. THE OTHER ISSUE INVOLVED IN THIS APPEAL RELATE S TO AN ADDITION OF RS.7 LAKHS SUSTAINED BY THE CIT(A), OUT OF THE CASH DEPOSITS MADE INTO THE BANK ACCOUNT OF THE ASSESSEE WITH ROY AL BANK OF SCOTLAND, WHICH IS CLAIMED TO HAVE BEEN DEPOSITED B Y THE ASSESSEES BROTHER SHRI NARENDER GOUD. THE ASSESSEE HAD FILED CONFIRMATION LETTER OF HIS BROTHER FOR THE DEPOSIT OF RS.7 LAKHS. THE A SSESSING OFFICER, DURING THE REMAND PROCEEDINGS, VERIFIED THE BANK AC COUNT OF SHRI NARENDER GOUD AND STATED THAT WITHDRAWALS WERE MADE BY HIM MUCH EARLIER TO THE DATE OF DEPOSIT INTO THE ASSESSEES ACCOUNT, AND THEREFORE, THERE IS NO NEXUS BETWEEN THE WITHDRAWAL S MADE AND THE DEPOSITS IN QUESTION. THE CIT(A) ACCEPTED THE REPO RT OF THE ASSESSING OFFICER TO CONFIRM THE ADDITION. THE LEARNED COUNSE L FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHOR ITIES BELOW AND PLACED RELIANCE UPON THE DECISION OF THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF SUDHIRBHAI PRAVINKANT THAK KAR V/S. ITO (44 ITR (TRIB) 135), WHEREIN THE EXPLANATION OF THE AS SESSEE THAT THE AMOUNT WITHDRAWN ON VARIOUS DATES DURING THE PREVIO US YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION HAS TO B E ACCEPTED AS THE SOURCE OF DEPOSITS MADE SUBSEQUENT THERETO. 13. THE LEARNED DEPARTMENTAL REPRESENTATIVE HOWEV ER, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 14. HAVING REGARD TO THE RIVAL CONTENTIONS AND TH E MATERIAL ON RECORD, WE FIND THAT IN THE REMAND REPORT, THE ASSE SSING OFFICER HAS STATED THAT THERE ARE WITHDRAWALS AND DEPOSITS OF R S.7.85 LAKHS IN THE BANK ACCOUNT OF THE ASSESSEES BROTHER, SHRI NAREND ER GOUD. IT HAS ITA NO.923-924/HYD/2014 SHRI TIGULLA VENKATESWARA GOUD HYDERABAD 7 ALSO NOT BEEN ESTABLISHED THAT THESE AMOUNTS WITHDR AWN WERE UTILISED BY THE SAID PERSON FOR ANY OTHER PURPOSE. THE ASSES SEE HAS FILED A CONFIRMATION LETTER FROM THE ASSESSEES HIS BROTHER , SHRI NARENDER GOUD WITH REGARD TO THE SAID DEPOSIT. IN THE ABSEN CE OF ANY EVIDENCE TO THE CONTRARY THAT THESE AMOUNTS OF WITHDRAWALS W ERE UTILISED BY SHRI NARENDER GOUD FOR ANY OTHER PURPOSE, THE CONFIRMATI ON LETTER OF SHRI NARENDER GOUD CANNOT BE DISREGARDED. CONSEQUENTLY, WE DELETE THE ADDITION OF RS.7 LAKHS CONFIRMED BY THE CIT(A), ALL OWING THE GROUNDS OF THE ASSESSEE ON THIS ASPECT. 15. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 16. TO SUM UP, ITA NO.923/HYD/2014 FOR ASSESSMENT YEAR 2008-09 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES, ITA NO.924/HYD/2014 FOR ASSESSMENT YEAR 2009-10 IS PART LY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 18 TH MAY, 2016 SD/- SD/- (S.RIFAUR RAHMAN) (P.MADHAVI DEVI) ACCOUNTANT MEMBER. JUDICIAL MEMBER DT/- 18 TH MAY, 2016 COPY FORWARDED TO: 1. SHRI TIGULLA VENKATESWARA GOUD C/O. MAHESH, VIRE NDER & SRIRAM, CHARTERED ACCOUNTANTS, 6-3-788/36 & 37A, AMEERPET, HYDERABAD HYDERABAD 2. INCOME TAX OFFICER WARD 9(1), HYDERABAD 3. COMMISSIONER OF INCOME-TAX V HYDERABAD 4. COMMISSIONER OF INCOME - TAX VI 5. DEPARTMENTAL REPRESENTATIVE ITAT, HYDERABAD B.V.S.