RUGARAM KAG, R.R.Dist, Hyderabad V. ITO, Ward-1, Vikarabad, Vikarabad

ITA 942/HYD/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6236 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 13-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U MINICHANDRAN
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.942/HYD/2015 ASSESSMENT YEAR 2008-2009 MR. RUGARAM KAG SHANKERPALLY, R.R. DIST., PAN AFWPK8581P VS. THE INCOME TAX OFFICER, WARD-1, VIKARABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. S. RAMA RAO FOR REVENUE : SMT. U. MINICHANDRAN DATE OF HEARING : 01.09.2016 DATE OF PRONOUNCEMENT : 21.09.2016 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y. 2008-09. IN THIS APPEAL THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE C IT(A) IN CONFIRMING THE ADDITION OF RS.10,28,664 MADE BY THE A SSESSING OFFICER AS UNEXPLAINED INVESTMENT IN STOCK. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL, ENGAGED IN TRADING OF JEWELLERY AND MONE Y LENDING. A SURVEY OPERATION UNDER SECTION 133A OF THE ACT WAS COND UCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 11.10.2007. DURING THE COURSE OF SURVEY, STOCK OF GOLD AND SILVER TO THE TUNE OF RS.26,56,664 AND GIRVI ITEMS TO THE TUNE OF RS.11,60,16 0 WERE FOUND. THE ASSESSEE FILED HIS RETURN OF INCOME FOR TH E RELEVANT A.Y. 2008-09 ON 25.03.2008 DECLARING INCOME OF RS.1 1,48,303. DURING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE 2 ITA.NO.942/HYD/2015 MR. RUGARAM KAG, SHANKERPALLY, R.R. DIST., ACT, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA D OFFERED THE VALUE OF THE STOCK AT RS.26,56,664 FOUND DURING THE COURSE OF SEARCH AS UNEXPLAINED INVESTMENT, BUT THE ASSESSEE HAS NOT DECLARED THE SAME IN THE RETURN OF INCOME. ON A QUERY FROM THE ASSESSING OFFICER, THE ASSESSEE REPLIED THAT AN AMOUNT OF RS.7,30,000 HAS BEEN DISCLOSED IN THE A.Y. 2007-08 AND RS.9 LAKHS HAS BEEN DISCLOSED IN THE A.Y. 2008-09. AS REG ARDS THE BALANCE OF RS.10,26,664, THE ASSESSEE EXPLAINED THAT TH ESE RELATES TO CREDIT PURCHASES FROM CERTAIN PARTIES TO THE TU NE OF RS.1,64,586 AND RS.1,54,607 BEING PROPORTIONATE INCO ME AS ON 11.10.2007 AND THE BALANCE OF RS.7,10,471 ARE LOANS TAKEN FROM VARIOUS PERSONS. THE DETAILS OF THE LOAN CREDITORS WER E ALSO FURNISHED. THE ASSESSING OFFICER HOWEVER, WAS NOT CO NVINCED WITH THE CONTENTION OF THE ASSESSEE AND HOLD THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE HIS CLAIM WITH ANY EVIDENCE. HE THEREFORE, TREATED THE SUM OF RS.10,26,664 AS UNEXPLAINED INVESTM ENT IN STOCK OF GOLD AND SILVER AND BROUGHT IT TO TAX. AGGRIEVE D, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO CONFIRMED THE ORDER OF THE ASSESSING OFFICER AND THE ASSESSEE IS IN SECOND A PPEAL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FILED THE DETAILS OF THE CREDIT PURCHAS ES ALONG WITH THE XEROX COPIES OF THE BILLS FOR SUCH CREDIT PUR CHASES BEFORE THE ASSESSING OFFICER AS WELL AS THE CIT(A). AS REGA RDS THE LOANS TAKEN FROM VARIOUS PERSONS, THE LEARNED COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FILED THE CONFIRMATIONS FR OM THE CREDITORS BOTH BEFORE THE ASSESSING OFFICER AS WELL A S THE CIT(A) BUT BOTH THE AUTHORITIES HAVE NOT ACCEPTED THE SAME WITHO UT EVEN VERIFICATION OF THE SAME. HE SUBMITTED THAT THE AUTHORITI ES BELOW 3 ITA.NO.942/HYD/2015 MR. RUGARAM KAG, SHANKERPALLY, R.R. DIST., HAVE PROCEEDED ON THE PREMISE THAT ASSESSEE HAS ADMITTED TO THE ADDITIONAL INCOME DURING THE COURSE OF SURVEY AND THER EFORE, SHOULD HAVE DECLARED THE SAME IN THE RETURN OF INCOME. HE HAS ALSO PLACED RELIANCE UPON THE VARIOUS DECISIONS TO TH E EFFECT THAT THE STATEMENT RECORDED DURING THE COURSE OF SURVEY IS NOT ON OATH AND THEREFORE, CANNOT BE GIVEN ANY EVIDENTIARY VALUE AND THE ASSESSEE CAN REBUT THE SAME WITH RELEVANT EVIDENCE. THE REFORE, HE PRAYED THAT THE ADDITIONS BE DELETED. 4. LD. D.R. ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE HIS CLAIM WITH ANY EVIDENCE. SHE FURTHE R SUBMITTED THAT THE STATEMENTS GIVEN BY THE ASSESSEE THAT HE W AS NOT AWARE OF THE ACTUAL FACTS AT THE TIME OF SURVEY AND THAT HE HAS GIVEN THE STATEMENT UNDER PRESSURE IS NOT CORRECT PARTICULARLY SINCE THE ASSESSEE HAD NOT REVOKED THE SAI D STATEMENT IMMEDIATELY AFTER THE SURVEY. THEREFORE, SHE PRAYED THAT THE ORDERS OF THE AUTHORITIES BELOW BE CONFIRMED. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT FOR A SUM OF RS.10,2 6,664 THE ASSESSEE HAS EXPLAINED THE SOURCE AS UNDER : (I) RS.1,61,586 FROM PURCHASES, (II) RS.1,54,607 FROM CREDIT PURCHASES; (III) RS.75,000 LOAN FROM FATHER-IN-LAW; (IV) RS.75,000 LOAN FROM MOTHER; AND (V) RS.6,07,800 LOANS FROM OTHER PERSONS. 5.1. WE FIND THAT THE ASSESSEE HAS FILED THE XEROX COPIES OF THE PURCHASE BILLS WITH REGARD TO THE GOLD JEWELLERY P URCHASED ON 4 ITA.NO.942/HYD/2015 MR. RUGARAM KAG, SHANKERPALLY, R.R. DIST., CREDIT AND HAS ALSO FILED THE CONFIRMATION LETTERS OF HIS MOTHER AND FATHER-IN-LAW AS REGARDS LOAN TAKEN FROM THEM. BO TH THE AUTHORITIES BELOW HAVE NOT VERIFIED THE DOCUMENTS FILED BY THE ASSESSEE BUT HAVE CONFIRMED THE ADDITION MERELY ON THE BASIS OF THE STATEMENT OF THE ASSESSEE RECORDED DURING THE COUR SE OF SURVEY. IT HAS BEEN HELD IN VARIOUS DECISIONS THAT ME RE STATEMENT RECORDED, EVEN DURING A SEARCH, CANNOT BE THE BASIS F OR MAKING AN ADDITION UNLESS IT IS CORROBORATED BY NECESSARY EV IDENCE. IT IS ALSO SETTLED LAW THAT THE ASSESSEE CAN REBUT THE STATEMENT RECORDED DURING THE COURSE OF SEARCH WITH RELEVANT M ATERIAL. IN THE CASE BEFORE US, SINCE THE ASSESSEE HAS FILED RELE VANT MATERIAL, IT IS INCUMBENT UPON THE ASSESSING OFFICER AND ALSO TH E CIT(A) TO VERIFY THE SAME AND MAKE THE ADDITION ONLY IF THE ASSE SSING OFFICER IS NOT SATISFIED WITH THE EVIDENCE FILED BEFO RE THEM. AS NONE OF THE AUTHORITIES HAVE VERIFIED THE ABOVE ISSUES, WE DEEM IT FIT AND PROPER TO SET ASIDE THE ORDERS OF THE ASSESSING OFFICER AND CIT(A) AND REMIT THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO CONSIDERATION IN THE LIGHT OF EVIDENCE FILED BY THE ASSESSEE. NEEDLESS TO MENTION THAT THE ASSESSEE SHALL BE GIVEN FAIR OPPORTUNITY OF HEARING. 6. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21.09.2016. SD/- SD/- (B. RAMAKOTAIAH) (SMT. P. MADHAVI DEVI) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 21 ST SEPTEMBER, 2016 VBP/- 5 ITA.NO.942/HYD/2015 MR. RUGARAM KAG, SHANKERPALLY, R.R. DIST., COPY TO : 1. MR. RUGARAM KAG, SHANKERPALLY, R.R. DISTRICT. C/O. MR. R. JASRAJ & CO., ADVOCATES, 15-1-91/4/A/1, 2 ND FLOOR, PAPALAL PLAZA, OLD FEELKHANA, HYDERABAD 500 012. 2. THE INCOME TAX OFFICER, WARD-1, VIKARABAD. 3. CIT(A)-2, HYDERABAD. 4. PR. CIT-2, HYDERABAD. 5. D.R. ITAT B BENCH, HYDERABAD. 6. GUARD FILE.