G.V.N. Sreedhar Raju, Hyd, Hyderabad V. ACIT, Central Circle-5, Hyderabad, Hyderabad

ITA 963/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6180 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 28-06-2016
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Unexplained cash credit; Search and seizure; Salary income; Opportunity of being heard; Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 963/HYD/2016 ASSESSMENT YEAR: 2006-07 SHRI G.V.N. SREEDHAR RAJU, HYDERABAD [PAN: ACWPG4559Q] VS ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-5, HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P. MURALI MOHAN RAO, AR FOR REVENUE : SHRI K.J. RAO, DR DATE OF HEARING : 01-02-2017 DATE OF PRONOUNCEMENT : 08-02-2017 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-9, HYDERABAD, DATED 28-03-2016 ON THE ISSUE OF ADDITION OF RS. 6,19,000/- DEPOSITED IN THE BANK ACCOUNT AS UNEXPLAINED CREDITS. 2. BRIEFLY STATED, ASSESSEE DERIVES SALARY INCOME AS AN EXECUTIVE IN M/S. GODAVARI EXPORTS & IMPORTS PVT. LTD. ASSESSEE IS CONNECTED TO SUJANA GROUP WHERE SEARCH AND SEIZURE PROCEEDINGS HAVE BEEN CONDUCTED. ASSESSEE WAS ALSO FOUND TO HA VE DEPOSITED UNEXPLAINED CASH DEPOSIT OF RS. 2.07 CRORES FROM AYS . 2001-02 TO 2005-06. IN THE COURSE OF CONSEQUENTIAL PROCEEDINGS FOR THE ABOVE ASSESSMENT YEARS, THE ADDITIONS MADE PROTECTIVELY IN THE CASE OF ASSESSEE WERE DELETED, AS ONE SHRI P.V. RAMANA REDD Y HAS ACCEPTED THE DEPOSITS AS HIS INCOME AND THEY WERE SUSTA INED SUBSTANTIALLY IN HIS HANDS. THE CIT(A) IN EARLIER Y EARS HAD DELETED THE ADDITIONS MADE IN ASSESSEES CASE AS THE AMOUNTS W ERE I.T.A. NO. 963/HYD/2016 SHRI G.V.N. SREEDHAR RAJU :- 2 - : ASSESSED IN THE HANDS OF SHRI P.V. RAMANA REDDY. HOWEVER, FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, AS THERE IS NO THING ON RECORD TO ESTABLISH THAT THE SAID CASH DEPOSITS HAVE BEE N ACCEPTED BY SHRI P.V. RAMANA REDDY, THE AO MADE ADDITION ON SUBSTANTIAL BASIS IN HIS HANDS, WHICH WAS CONFIRMED BY THE LD. C IT(A). 3. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 2. THE LD.CIT(A)-9 ERRED IN CONFIRMING THE ADDITIO N MADE BY THE AO AMOUNTING TO RS. 6,91,000/- TOWARDS UNEXPLAINED CAS H DEPOSITS. 3. THE LD.CIT(A)-9 OUGHT TO APPRECIATED THE FACT TH AT THE SOURCES OF CASH DEPOSIT MADE IN THE ASSESSEES BANK ACCOUNT HA S BEEN EXPLAINED DURING THE ASSESSMENT PROCEEDINGS. 4. WE WOULD LIKE TO SUBMIT THAT AS PER THE RATIO LA ID DOWN BY THE HONOURABLE SUPREME COURT OF INDIA IN THE CASE OF NA TIONAL THERMAL POWER CO. LTD., VS. CIT (1998) 299 ITR 383 (SC) THE ITAT HAS JURISDICTION TO EXAMINE THE QUESTION OF LAW WHICH THOUGH NOT AROSE BEFORE THE AO BUT AROSE BEFORE THE ITAT FOR THE FIRST TIME. 5. THE LD.CIT(A)-9 OUGHT TO HAVE CONSIDERED THAT TH E AO HAS NOT PROVIDED ANY REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. THE LD.CIT(A)-9 OUGHT TO HAVE APPLIED THE PRINCI PLE OF TELESCOPING FOR INVESTMENT MADE DURING THE YEAR AGAINST THE UNE XPLAINED INCOME OF PREVIOUS YEAR. GROUND NOS. 1 & 7 ARE GENERAL IN NATURE. 4. LD. COUNSEL FAIRLY ADMITTED THAT ASSESSEE HAS NOT ASK ED FOR THE APPLICATION OF PRINCIPLE OF TELESCOPING FOR INV ESTMENT MADE DURING THE YEAR AGAINST THE EXPLAINED/UNEXPLAINED IN COME OF THE PREVIOUS YEARS AND HENCE THIS IS A NEW PLEA WHICH RE QUIRES EXAMINATION. LD. COUNSEL ALSO FAIRLY ADMITTED THAT EVEN THOUGH THE INCOMES WERE OFFERED IN THE HANDS OF SHRI P.V. RA MANA REDDY, ASSESSEE WAS WITHDRAWING THE FUNDS FROM THE BANK ACCO UNTS AND WAS HAVING CASH SOURCES TO EXPLAIN THE DEPOSITS IN THE BANK I.T.A. NO. 963/HYD/2016 SHRI G.V.N. SREEDHAR RAJU :- 3 - : ACCOUNT. IT WAS REQUESTED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE CIT(A) TO EXAMINE THIS CONTENTION AFRESH. 5. LD.DR, HOWEVER, SUBMITTED THAT ASSESSEE HAS EXPLAIN ED THE FACTS IN EARLIER YEARS AND SUBMITTED THAT ASSESSEE HAS N OT FURNISHED ANY EXPLANATION BEFORE THE AUTHORITIES. 6. AFTER CONSIDERING THE RIVAL CONTENTIONS, I AM OF THE OPINION THAT THIS NEW PLEA RAISED REQUIRES RE-EXAMINATION. AT THE OUTSET, ASSESSEE ACCEPTS THE DEPOSITS MADE IN THE BANK ACCOUNT A S PERTAINING TO HIM AND NOT TO SHRI P.V. RAMANA REDDY. HOWEVER, ASSESSEE, BEING AN EXECUTIVE IN A COMPANY AND ALSO H AD MUCH AMOUNT OF DEPOSITS IN THE BANK ACCOUNT IN HIS NAME IN EARLIER YEARS, THE REQUEST FOR TELESCOPING OF EARLIER WITHDRAWA LS TO THE DEPOSITS DURING THE YEAR CANNOT BE REJECTED WITHOUT VE RIFICATION. IN VIEW OF THAT, THE ORDERS OF THE CIT(A) TO THAT EXTENT A RE MODIFIED AND ISSUE IS RESTORED TO THE FILE OF THE CIT(A) TO CALL FOR A REMAND REPORT FROM THE AO AND EXAMINE THE SOURCES OF THE DEPOS ITS IN THE BANK ACCOUNT, ALONG WITH THE PLEA OF TELESCOPING MAD E BY ASSESSEE AT PRESENT AND DECIDE IT AFRESH BASED ON THE FACTS OF THE CASE. GROUNDS ARE CONSIDERED ALLOWED FOR STATISTICAL PURPOS ES. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH FEBRUARY, 2017 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 8 TH FEBRUARY, 2017 TNMM I.T.A. NO. 963/HYD/2016 SHRI G.V.N. SREEDHAR RAJU :- 4 - : COPY TO : 1. SHRI G.V.N. SREEDHAR RAJU, HYDERABAD. C/O. P. MU RALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 2. THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CI RCLE-5, HYDERABAD. 3. COMMISSIONER OF INCOME TAX(APPEALS)-9, HYDERABAD . 4. THE PR. COMMISSIONER OF INCOME TAX-6, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.