Dy.CIT, Central Circle-3, Hyderabad V. Shri K Ch Subba Rao, Hyderabad

ITA 99/HYD/2014

• Counselvise Citation: 9922514 RSA 2014
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 24-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B RAMA KRISHNA
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Unexplained cash credit; Rectification of order; Peak credit
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.98/HYD/14 : ASSESSMENT YEAR 2008 - 09 ITA NO.99/HYD/14 : ASSESSMENT YEAR 2009 - 10 DY. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 3, HYDERABAD V/S. SHRI K.CH.SUBBA RAO, HYDERABAD (PAN AHLPK 3647 B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.RAMAKRISHNA, DR RESPONDENT BY : SHRI P.MURALI MOHAN RAO DATE OF HEARING 16 . 1 0.2014 DATE OF PRONOUNCEMENT 2 2 .10.2014 O R D E R PER P.M.JAGTAP, ACCOUNTANT MEMBER : THESE TWO APPEALS ARE PREFERRED BY THE REVENUE AGAINST A COMMON ORDER O F THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) - I, HYDERABAD 20 TH N O V EMB E R, 2013, WHEREBY S HE DELETED THE FURTHER ADDITIONS MADE BY THE ASSESSING OFFICER FOR BOTH THE YEARS UNDER CON S I D ERATION, I.E. ASSESSMENT YEAR 2008 - 09 AND 2009 - 10 ON ACCO U NT OF UNEXPLAINED CASH CREDITS WORKED OUT ON THE BASIS OF PEAK CREDIT BY WAY OF RECTIFI C ATION ORDERS PASSED UNDER S.154. 2. THE ASSESSEE IN THE PR E SEN T CA S E IS AN INDIVIDUAL, WHO IS THE WORKING PARTNER IN M/S. BALAJI TRANSPORT AGENCY, A PARTNER S HIP FIRM WHICH IS ENGAGED IN COAL BU S IN E SS. A SEA R CH AND SEIZURE ACTION UNDER S.132 WAS CONDUCTED IN TH E BU S IN E SS PREMISES OF THE SAID FIRM AS WELL AS THE RESIDENTIAL PREMI SE S OF THE ASSESSEE. ON THE BASIS OF THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, ASSESSMENTS WERE COMPL E TED BY THE ASSESSING OFFICER UNDER I TA NO. 98 & 99/H YD/20 14 SHRI K.CH.SUBBA RAO, HYDERABAD 2 S.143(3) READ WITH S.153A OF THE ACT IN TH E CA S E OF THE ASSESSEE FOR ASSESSMENT YEAR S 2008 - 09 AND 2009 - 10 MAKING ADDITIONS OF RS .1,04,73,034 AND R S . 2,80,00,000 RESPECTIVELY ON ACCO U NT OF UN E XPLAIN E D CASH CREDITS WORKED OUT ON PEAK C REDIT BASIS. SUBSEQUENTLY, THE ASSESSING OFFICER NOTICED THAT THE PEAK CREDIT S FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 W ERE ACTUALLY MORE THAN WHAT WAS TAKEN BY HIM IN THE ASSESSMENTS AND THE INCOME O F THE ASSESSEE THUS WAS SHO R T COMPUTED BY R S .10,40,8 05 AND RS.5,35,666 FOR ASSESSMENT YEAR S 2008 - 09 AND 2009 - 10 RE S P E CTIVELY. HE TH E R E FORE, PASSED TWO SEPARATE ORDERS UNDER S.154 OF THE ACT ON 10.12.2012 RECTIFYING HIS ASSESSMENTS FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 A N D ACCORDINGLY MADE FURTH E R ADDIT IONS OF R S .10,40,805 AND RS.5,35,666 RESP E CTIVELY TO THE TOTAL IN C OM E OF TH E ASSESSEE ON ACCOUNT OF UN E XPLAIN E D CASH CREDITS. 3. AGAINST THE ORDERS PASSED BY THE ASSESSING OFFICER UNDER S. 1 54, APP E ALS WERE PREFER R E D BY TH E ASSESSEE BEFORE THE LEARNED CIT(A) . A FTER CON S ID E RING THE SUBMI S SION S MADE ON BEHALF OF TH E ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LEARNED CIT(A) CANCELLED RECTIFICATION ORDERS PASSED BY THE ASSESSING OFFICER UNDER S.154 FOR ASSESSMENT YEARS 2008 - 09 AND 2 009 - 10 FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO.8 OF H ER IMPUGNED ORDER - 8. THE ORDER U/S. 154 AND THE SUBMI S SION S OF THE APPELLANT HAVE BEEN CAREFULLY CON S I D ERED. FOR INVOKING THE P R OVIS I ON OF SEC.154, THE MISTAKE MU S T BE APPARENT FROM THE RECO RD. THE ASSESSING OFFICER HAS NO T GIVEN ANY WORKING AS TO HOW HE ARRIVED A T THE P E AK CREDIT AND HOW THERE HAS BEEN A MISTAKE APPARENT. THE WORKING OF PEAK CREDIT ITSELF IS NO T A UTOMATI C I TA NO. 98 & 99/H YD/20 14 SHRI K.CH.SUBBA RAO, HYDERABAD 3 AND IS ITSELF CONTROVERSIAL AND PEAK CREDIT HAS TO B E CULLED OUT F R OM THE E N TR IES F R OM TH E BOOK S AND WHEN SUCH DETAILS ARE NOT P A RT OF THE ASSESSMENT ORDER ON RECORD, REC T I F YING THE SAME WITHOUT ANY FACTS AND FIGURES IS NOT CORRECT AND NOT IN THE SPI R IT OF THE P R OVIS I ON S OF SECTION 154 AND HENCE, THE RECTIFICATION ORDER P A SSED U/S. 154 BY THE ASSESSING OFFICER IS NO T JU S TIFIED AND THE RE FORE CANCELLED. 4. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A), REVENUE HAS PREFERRED THESE APPEALS BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PE RUSED THE RELEVANT MATERIAL ON RECORD. AS POIN T ED OUT BY THE LEARNED CO U N SE L FOR THE ASSESSEE, TH E ADDITIONS ON ACCOUN T OF UN E XPLAIN ED CASH CRE D ITS AS O R IG I NALLY MADE BY THE ASSESSING OFFICER TO THE TOTAL IN C OM E O F TH E ASSESSEE ON PE AK CREDIT BASIS FOR BOTH THE YEARS UNDER CONSI DE RATION HAVE ALREADY BEEN DELETED BY THE TRIBUNAL VIDE ITS ORDER DATED 16.9.2014 PASSED IN ITA NOS.1657 AND 1658/HYD/2013, HOL D IN G TH A T THE CORRESPON D IN G RECEIPTS AND PAYM E N T S FOUND RECORDED IN THE RELEVANT SEIZED DOCUM E N T S, WERE RELATED TO THE COAL BUSINESS CARRIED ON BY THE PARTNERSHIP FIRM, AND THE ADDITIONS ON ACCOUNT OF THE SAID TR A N S ACTIONS AS WORKED OUT ON THE BASIS OF PEAK CREDIT TR E ATIN G THE SAME AS UN E XPLAIN E D CASH CREDITS COULD NO T BE MADE IN THE HANDS OF THE ASSESS EE IN HIS IN DI VIDU A L CAPACITY. KE E P I NG IN VIEW THIS DECISION OF THE TRIBUNAL HOL D ING THAT NO ADDITION ON ACCOUNT OF UN E XPLAINED CASH CREDITS ON THE B A SIS O F THE ENT R IES APPEARING IN TH E RELEVANT SEIZED DOCUM E N TS WHICH RELATED TO THE COAL BUSINESS OF THE P A RTNERS H IP FIRM, COULD B E MADE IN THE H A N D S OF THE ASSESSEE IN INDIVIDUAL CAPACITY, THE VERY B A SI S OF THE RECT I FICATION ORDERS PASSED BY TH E ASSESSING OFFICER ENHANCING THE QUANTUM OF ADDITI O NS TO BE MADE ON ACCOUNT OF I TA NO. 98 & 99/H YD/20 14 SHRI K.CH.SUBBA RAO, HYDERABAD 4 UN E XPLAIN E D CASH CREDITS, NO MORE S URVIVES AND THE SAID ORDERS ARE LIABLE TO BE CANCELLED, HAVING NO LEGS TO STAND. W E, THEREFORE, UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(A), CANCELLING THE ORDERS PASSED BY THE ASSESSING OFFICER UNDER S.154 OF THE ACT ALTHOUGH ON DIFFERENT GROUND. 6. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. \ ORDER PRONOUNCED IN THE COURT ON 22 ND O CTOBER , 2014 SD/ - SD/ - ( SAKTIJIT DEY ) ( P.M.JAGTAP ) JUDICIAL MEMBER ACCOUNTANT MEMBER DT/ - 22 ND OCTOBER, 2014 COPY FORWARDED TO: 1. SHRI K.CH.SUBBA RAO, 8 - 2 - 269/S/15, PLOT NO.15, SAGAR SOCIETY, ROAD NO.2, BANJARA HILLS, HYDERABAD 2 . DY. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 3, HYDERABAD 3. 4. COMMISSIONER OF INCOME - TAX(APPEALS) I, HYDERABAD COMMISSIONER OF INCOME - TAX CENTRAL , HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S