G.Mohan Rao, Sec'bad, Hyderabad V. ITO, Ward-10(1), Hyd, Hyderabad

ITA 94/HYD/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6258 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 28-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: B SHANTHI KUMAR
• Keywords: Unexplained investment; Opportunity of being heard; Additional evidence
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 94/HYD/2016 ASSESSMENT YEAR: 2010-11 G. MOHAN RAO, SECUNDERABAD. PAN AEEPG 6713 N VS. INCOME TAX OFFICER, WARD 10(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI B. SHANTHI KUMAR REVENUE BY : SHRI K.J. RAO DATE OF HEARING 14-07-2016 DATE OF PRONOUNCEMENT 27-07-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(A) - 4, HYDE RABAD FOR AY 2010-11. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED HIS RETURN OF INCOME FOR THE AY. 2010-11 ON 20/09/2011 DECLARING TOTAL INCOME AT RS.2,54,340/- THE RETURN WAS PROCESSED U/ S 143(1) OF THE I.T. ACT, 1961. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS CATEGORY AND ACCORDINGLY, NOTICES U/S 143(2) & 142(1) WERE ISSUED. IN RESPONSE TO THE NOTICES ISSUED, SRI. B. PRABHAKAR, CA AND AR OF THE ASSESSEE APPEARED AND PRODUCED PART INFOR MATION. 2.1 DURING THE SCRUTINY PROCEEDINGS, THE AR OF THE ASSESSEE PRODUCED THE COPIES OF BANK ACCOUNT STATEMENT OF CO RPORATION BANK THE SAME WAS VERIFIED AND FURTHER THE ASSESSEE WAS ASKED TO 2 ITA NO. 94/H/16 G. MOHAN RAO, SECBAD. PRODUCE DETAILED EXPLANATION FOR EACH CASH DEPOSITS AMOUNTING TO RS. 23,74,500/- IN THE CORPORATION BANK. THE ASSESSEE V IDE ITS LETTER DT.20/02/2013 SUBMITTED THE PART INFORMATION AND ST ATED THAT THE SOURCES FOR SUCH CASH DEPOSITS ARE COMMISSION, WHIC H HE RECEIVED FOR ARRANGING FUNDS FROM FINANCIERS TO THE NEEDY BUSINE SSMAN. FURTHER THE ASSESSEE WAS ASKED TO PRODUCE DETAILS OF FINANC IERS ALONG WITH THEIR ADDRESS AND IT PARTICULARS AND EVIDENCE OF RE CEIVING COMMISSION. IN RESPONSE TO THE SAME THE ASSESSEE CO ULD NOT GIVE THE REQUISITE INFORMATION. HOWEVER, A FINAL OPPORTUNIT Y WAS GIVEN TO THE ASSESSEE TO APPEAR AND SUBMIT THE BALANCE REQUISITE INFORMATION ON OR BEFORE 27/03/2013 BUT THERE WAS NO RESPONSE FROM THE ASSESSEE. AS THE ASSESSEE FAILED TO SUBMIT THE EVIDENCE OF RE CEIVING AMOUNTS FROM FINANCIERS, THE AO THEREFORE TREATED THE CASH DEPOSITS MADE IN THE BANK ACCOUNT AS UNEXPLAINED INVESTMENTS IN THE HANDS OF THE ASSESSEE AND ACCORDINGLY THE CASH DEPOSITS OF RS. 2 3,74,500/- WAS BROUGHT TO TAX. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE P REFERRED AN APPEAL BEFORE THE CIT(A). 4. IN THE COURSE OF THE APPELLATE PROCEEDINGS, THE ASSESSEE HAS FURNISHED ADDITIONAL EVIDENCES, WHICH WERE FORWARDE D TO THE AO FOR REMAND REPORT AND THE AO SUBMITTED HIS REMAND REPOR T ON 19 TH OCTOBER, 2015 AS UNDER: ON VERIFICATION OF THE INFORMATION FILED BY THE ASSESSEE, IT IS FOUND THAT THE COMMISSION WORKS OUT TO RS. 5,42,688 /- AND INTEREST WORKS OUT TO RS.2,64,000/- TOTALING TO RS. 8,06,688/-. AS AGAINST THE COMMISSION, THE ASSESSEE PROVIDED EVIDE NCE FOR RS.2,74,391/- AS PAID TO FINANCIERS. HOWEVER, AS PE R THE BANK ENTRIES, THE ACTUAL PAYMENT WORKED OUT TO RS.49,000 /-. THEREFORE, THE EXPENDITURE IS TO BE RESTRICTED TO RS.49,000/-A S AGAINST RS.2,74,391/- CLAIMED. THUS, THE NET 'COMMISSION' I NCOME SHALL BE RS.4,93,688J- (RS.5,42,688 RS.49,000) AS AGAINS T RS.90,000/- ADMITTED IN THE ROI. SIMILARLY, THE INTEREST INCOME WORKED OUT TO RS.2, 64,000/- AS AGAINST RS.1,20,000/- ADMITTED IN THE ROI. 3 ITA NO. 94/H/16 G. MOHAN RAO, SECBAD. AS SUBMITTED ABOVE, THE COMMISSION AND INTEREST IN COMES WORK OUT TO RS.4,93,688/- AND RS.2,64,000- RESPECTIVELY TOTALING TO RS.7,57,680/- AS AGAINST RS.2,10,000/- ADMITTED IN THE ROI. THUS, THE ASSESSEE HAS SHORT ADMITTED INCOME TO TH E EXTENT OF RS.5,47,688/-. THIS MAY KINDLY BE CONSIDERED WHILE ADJUDICATING THE ISSUES. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E AND REMAND REPORT OF THE AO, THE CIT(A) WAS NOT CONVINCED WITH THE REMAND REPORT SUBMITTED BY THE AO AND CONFIRMED THE ORIGIN AL ORDER PASSED BY THE AO. 6. AGGRIEVED WITH THE ORDER OF THE CIT(A), THE ASSE SSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF A PPEAL: 1. THE CIT(A) ERRED BOTH IN LAW AND ON FACTS IN CON FIRMING THE. ADDITION OF RS. 23,74,500/- MADE BY THE ITO. 2. BOTH THE AO AND THE CIT(A) ARE NOT JUSTIFIED IN REJECTING APPELLANTS EXPLANATION THAT THE CASH DEPOSITS MADE INTO THE BANKS REPRESENT COMMISSION RECEIVED FOR ARRANGING F UNDS FROM FINANCIERS TO NEEDY BUSINESSMEN. 7. BEFORE US THE LD. AR OF THE ASSESSEE SUBMITTED T HAT THOUGH THE AO ACCEPTED THE ADDITIONAL EVIDENCES PRODUCED BY TH E ASSESSEE IN THE REMAND PROCEEDINGS AND SUBMITTED HIS FINDINGS, THE CIT(A) WAS NOT CONVINCED WITH THE REMAND REPORT AND CONFIRMED THE ORIGINAL ASSESSMENT ORDER PASSED BY THE AO. THEREFORE, THE L D. AR SUBMITTED THAT THE ORDER OF THE CIT(A) MAY BE SET ASIDE AND T HE MATTER MAY BE REMANDED TO THE FILE OF THE AO. 8. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE O RDER OF THE CIT(A) IN SUPPORT OF REVENUES CASE. 9. CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PE RUSED THE MATERIAL FACTS ON RECORD AS WELL AS THE ORDERS OF R EVENUE AUTHORITIES. AS THE CIT(A) HAS NOT PROPERLY APPRECIATED THE REMA ND REPORT SUBMITTED BY THE AO AND CONFIRMED THE ORIGINAL ORDE R PASSED BY THE AO IN THE STATE OF SUSPICION TO MEET THE ENDS OF JU STICE, WE REMIT THE ISSUE BACK TO THE FILE OF THE CIT(A) WITH A DIRECTI ON TO DECIDE THE APPEAL DE-NOVO AFTER TAKING INTO CONSIDERATION THE ADDITIONAL 4 ITA NO. 94/H/16 G. MOHAN RAO, SECBAD. EVIDENCES FILED BY THE ASSESSEE IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 27 TH JULY, 2016. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 27 TH JULY, 2016 KV COPY TO:- 1) G. MOHAN RAO, C/O SHRI B. SHANTHI KUMAR, ADVOCA TE, 111, TARAMANDAL COMPLEX, 5-9-13, SAIFABAD, HYDE RABAD500 04. 2) ITO, WARD 10(1), INCOME TAX TOWERS, AC GUARDS, HYD. 3) CIT(A) - 4, HYDERABAD 4)PR. CIT - 6 , HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.