Income Tax Officer, Ward-10(1), Hyderabad V. Sri S.V.N. Ravi Kumar, Secunderabad

ITA 991/HYD/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6672 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-04-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 22-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Gift; Depreciation
• Section: 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA.NO.991/HYD/2014 ASSESSMENT YEAR 2007-2008 THE INCOME TAX OFFICER, WARD-10(1), HYDERABAD. VS. MR. SVN RAVI KUMAR, SECUNDERABAD. PAN AFBPS6911E (APPELLANT) (RESPONDENT) FOR REVENUE : MR. M. SITARAM FOR ASSESSEE : MR. KA SAIPRASAD DATE OF HEARING : 07.04.2016 DATE OF PRONOUNCEMENT : 13 .04.2016 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS REVENUES APPEAL FOR THE A.Y. 2007-08. IN THIS APPEAL, THE REVENUE IS AGGRIEVED BY THE ORD ER OF THE CIT(A) IN DELETING THE DISALLOWANCE OF RS.55 LA KHS BEING THE AMOUNT RECEIVED BY THE ASSESSEE FROM HIS WIFE SMT. S.V. GEETA AND THE CONSEQUENTIAL ADDITION MAD E BY THE A.O. UNDER SECTION 68 OF THE I.T. ACT, 1961. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL, FILED HIS RETURN OF INCOME FOR THE A.Y. 2007-08 ON 23.10.2007 DECLARING TOTAL INCOME OF RS.3,86,186 . DURING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143 (3) OF THE I.T. ACT, THE A.O. MADE VARIOUS DISALLOWANCE S AND 2 ITA.NO.991/HYD/2014 MR. SVN RAVI KUMAR, SECUNDERABAD. THE CONSEQUENTIAL ADDITIONS AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 10(3) OF THE I.T. ACT ON 31.12.2009 RAISING A DEMAND OF RS.89,12,450. AGGRIE VED, ASSESSEE CARRIED THE MATTER IN APPEAL TO THE CIT(A) AND SUBSEQUENTLY TO ITAT. VIDE ORDERS DATED 13.10.2011 IN ITA.NO.1153/HYD/2011, THE ITAT REMANDED THE ISSUE T O THE FILE OF THE A.O. WITH A DIRECTION TO THE A.O. T O RECONSIDER THE ADDITIONS MADE UNDER SECTIONS 68 AND 69 OF THE ACT AND ALSO THE ADDITION MADE TOWARDS UN- VOUCHED EXPENSES AND DISALLOWANCE AND DEPRECIATION ON CAR AFRESH. CONSEQUENT THERETO, THE A.O. PROCEEDED TO RECONSIDER THE ADDITION MADE UNDER SECTION 68 OF TH E ACT. DURING THE REMAND PROCEEDINGS, THE ASSESSEES REPRESENTATIVE PRODUCED THE FOLLOWING INFORMATION : 1. COPIES OF RETURN OF INCOME AND ITS ENCLOSURES FOR THE A.Y. 2007-08. 2. BANK ACCOUNT STATEMENTS FOR THE PERIOD OF F.Y. 2006 - 07. 3. DETAILS OF DEPRECIATION CLAIMED DURING THE AY.2007- 08 ALONG WITH PURCHASE INVOICES. 4. BOOKS OF ACCOUNTS ALONG WITH BILLS AND VOUCHERS PERTAINING TO THE AY.2007-08. 5. DETAILS OF LAND PURCHASED/SOLD BY ASSESSEE AND HIS WIFE ALONG WITH EVIDENCES DURING THE AY. 2007-08. 6. DETAILS OF AMOUNTS RECEIVED FROM CENTRE FOR ECONOMI C AND SOCIAL STUDIES ALONG WITH EVIDENCES. 3 ITA.NO.991/HYD/2014 MR. SVN RAVI KUMAR, SECUNDERABAD. 7. CONFIRMATION LETTER FROM M/S V.S.R. CONSTRUCTIONS & PROPERTY & DEVELOPERS PVT. LTD. REGARDING RECEIVING OF RS. 1,50,00,000/- BY SRI S.V.N. RAVI KUMAR AS SALE CONSIDERATION TOWARDS PROPERTY SITUATED AT SY.NO.57 & 58, MAHABBAT VILLAGE, MAHESHWARAM MANDAL, R. R. DISTRICT. 8. CONFIRMATION LETTER FROM M/S V.S.R. CONSTRUCTIONS & PROPERTY & DEVELOPERS PVT. LTD. REGARDING RECEIVING OF RS. 80,00,000/- BY SMT. S.V.GEETHA AS SALE CONSIDERATION TOWARDS PROPERTY SITUATED AT SY.NO.57 & 58, MAHABBAT VILLAGE, MAHESHWARAM MANDAL, R. R. DISTRICT. 9. DETAILS OF AMOUNT RECEIVED BY SRI SVN.RAVI KUMAR OF RS. 50,00,000/- AS GIFT FROM HIS WIFE SMT. SV.GEETH A ALONG WITH COPY OF REGISTERED GIFT DEED. 2.1. ON VERIFICATION OF THE INFORMATION FILED BY T HE LD. COUNSEL FOR THE ASSESSEE, THE A.O. OBSERVED THA T THE ASSESSEE WAS ABLE TO SUBSTANTIATE ALL THE CLAIMS EX CEPT THE RECEIPT OF CASH OF RS.55 LAKHS AS GIFT FROM HIS WIFE. HE OBSERVED THAT THE ASSESSEE HAS EXPLAINED THAT HE HA S RECEIVED A GIFT OF RS.55 LAKHS FROM HIS WIFE, SMT. S.V. GEETHA, AS SHE HAS RECEIVED AN AMOUNT OF RS.80 LAKH S TOWARDS SALE CONSIDERATION OF PROPERTY SITUATED AT SURVEY NOS. 57 AND 58 OF MOHABBAT (V), MAHESWARAM (M), RAN GA REDDY DISTRICT FROM M/S. VSR CONSTRUCTIONS AND PROP ERTY AND DEVELOPERS P. LTD., IN TWO INSTALLMENTS. IT WAS SUBMITTED THAT THE FIRST INSTALLMENT OF RS.30 LAKHS WAS RECEIVED BY CHEQUE WHILE A SUM OF RS.50 LAKHS WAS 4 ITA.NO.991/HYD/2014 MR. SVN RAVI KUMAR, SECUNDERABAD. RECEIVED BY CASH ON 24.05.2006, OUT OF WHICH, SHE H AS GIFTED A SUM OF RS.55 LAKHS ON 27.05.2006 TO THE AS SESSEE WHICH WAS DEPOSITED BY THE ASSESSEE HEREIN IN HIS ACCOUNT IN PUNJAB NATIONAL BANK. WHEN THE ASSESSEE WAS ASKED TO PRODUCE THE EVIDENCE ON RECEIVING CASH OF RS.50 LAKHS BY HIS WIFE, THE ASSESSEE SUBMITTED THE COPY OF THE AGREEMENT OF SALE ENTERED INTO BY HIS WIFE SMT. S.V . GEETHA WITH M/S. VSR CONSTRUCTIONS AND PROPERTY DEVELOPERS P. LTD. THE ASSESSEE ALSO PRODUCED THE ADDRESS OF THE PERSON TO WHOM THE PROPERTY WAS SOLD WHICH IS M/S. VSR CONSTRUCTIONS AND PROPERTY DEVELOPERS P. LTD., PLOT NO.22, NAVODAYA COLONY, OP P GANAPATHI COMPLEX, BEHIND NICE SPICE RESTAURANT, SRINAGAR COLONY POST, HYDERABAD 73. THE A.O. OBSE RVED THAT THE COPY OF THE AGREEMENT OF SALE IS NOT REGIS TERED. HE THEREFORE, DEPUTED HIS INSPECTOR TO ENQUIRE THE WHEREABOUTS OF THE SAID VENDEE AND FOUND THAT THERE WAS NO SUCH CONCERN EXISTING IN THE ADDRESS WHICH WAS G IVEN BY THE ASSESSEE. THEREFORE, HE HELD THAT THE ASSESS EE HAS NOT BEEN ABLE TO EXPLAIN THE CASH CREDIT OF RS.55 L AKHS AND BROUGHT IT TO TAX UNDER SECTION 68 OF THE ACT. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO ALLOWED THE SAME AND AGGRIEVED BY THE DECISION OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 3. THE LD. D.R., WHILE SUPPORTING THE ORDER OF THE A.O, SUBMITTED THAT THE ASSESSEES WIFE HAD ENTERED INTO AN AGREEMENT OF SALE WITH M/S. VSR CONSTRUCTIONS AN D PROPERTY AND DEVELOPERS P. LTD., FOR A SUM OF RS.80 LAKHS 5 ITA.NO.991/HYD/2014 MR. SVN RAVI KUMAR, SECUNDERABAD. BUT ULTIMATELY HAS CONVEYED THE TITLE BY THE REGIST ERED DEED IN WHICH THE CONSIDERATION IS MENTIONED ONLY A S RS.30 LAKHS. HE FURTHER SUBMITTED THAT SMT. S.V. GE ETHA HAS ALSO NOT RETURNED THE SALE CONSIDERATION IN HER RETURN OF INCOME AND THEREFORE, THE SUM OF RS.80 LAKHS ALL EGEDLY RECEIVED FROM SMT. S.V. GEETHA CANNOT BE ACCEPTED A S THE SOURCE FOR THE CASH DEPOSIT OF RS.55 LAKHS IN THE ASSESSEES BANK ACCOUNT. 4. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, SUPPORTED THE ORDER OF THE CIT(A) AND SUBMITT ED THAT EVEN THE ASSESSEE HAD SOLD THE LAND BELONGING TO HIM ADJACENT TO THE LAND OF HIS WIFE TO THE VERY SAME P ARTY FOR A SUM OF RS.1,50,00,000 AS REFLECTED IN THE AGREEME NT OF SALE, THOUGH IN THE REGISTERED SALE DEED, IT WAS ME NTIONED AS RS.25 LAKHS ONLY. HE SUBMITTED THAT IN THE ASSES SEES CASE, THE REVENUE HAS TAKEN THE SALE CONSIDERATION AS RS.1,50,00,000 ONLY WHEREAS, THEY HAVE REFUSED TO A CCEPT THE SALE CONSIDERATION REFLECTED BY THE ASSESSEES WIFE IN THE AGREEMENT OF SALE AS RS.80 LAKHS. HE SUBMITTED THAT THE CIT(A) AFTER GOING THROUGH ALL THE DETAILS HAS HELD THAT SOURCE OF DEPOSIT IS PROVED. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE IS TH E OWNER AND POSSESSOR OF AC.6.20 GUNTAS OF LAND IN SURVEY N OS. 57 AND 58 OF MOHABBAT (V), MAHESWARAM (M), RANGA REDDY DISTRICT AND HAS ENTERED INTO AN AGREEMENT OF SALE OF THE SAID LAND WITH M/S. VSR CONSTRUCTIONS & PROPERTY 6 ITA.NO.991/HYD/2014 MR. SVN RAVI KUMAR, SECUNDERABAD. DEVELOPERS P. LTD., FOR A CONSIDERATION OF RS.1,50, 00,000 WHILE THE ASSESSEES WIFE IS ALSO THE OWNER AND POS SESSOR OF AC.3.00 OF LAND IN THE VERY SAME SURVEY NUMBERS OF THE SAME VILLAGE. THUS, IT CAN BE SEEN THAT THEY ARE TH E OWNERS OF THE ADJACENT PIECE OF LAND IN THE VERY SA ME LOCALITY. THE A.O. HAS ACCEPTED THE SALE CONSIDERAT ION REFLECTED IN THE AGREEMENT OF SALE ENTERED INTO BY THE ASSESSEE WITH THE VERY SAME PARTY I.E., M/S. VSR CONSTRUCTIONS AND PROPERTY AND DEVELOPERS P. LTD., WHILE HE HAS REFUSED TO ACCEPT THE SALE CONSIDERATION MEN TIONED IN THE AGREEMENT OF SALE BY THE ASSESSEES WIFE WIT H THE VERY SAME PARTY. THE FIRST INSTALLMENT OF THE SALE CONSIDERATION HAS ALLEGEDLY BEEN RECEIVED BY THE ASSESSEES WIFE BY CHEQUE, WHILE THE BALANCE OF RS. 50 LAKHS HAS ALLEGEDLY BEEN RECEIVED BY WAY OF CASH. A S RIGHTLY POINTED OUT BY THE CIT(A), THE REVENUE CANN OT ADOPT DIFFERENT STANDARDS FOR SIMILAR TRANSACTIONS. IN OUR OPINION, THE ASSESSEE HAS BEEN, ABLE TO SATISFACTOR ILY EXPLAIN THE SOURCE OF THE CASH DEPOSIT INTO HIS ACC OUNT AND THEREFORE, WE DO NOT SEE ANY REASON TO INTERFER E WITH THE ORDER OF THE CIT(A). FURTHER, THE LD. COUNSEL F OR THE ASSESSEE, HAS ALSO DRAWN OUR ATTENTION TO THE RETUR N OF INCOME FILED BY THE ASSESSEES WIFE AND THE COMPUTA TION OF THE INCOME ANNEXED THERETO, WHEREIN THE ASSESSEES WIFE HAS SHOWN THE CONSIDERATION OF RS.80 LAKHS RECEIVED ON SALE OF AGRICULTURAL LAND AND HAS MENTIONED THAT TH E SAID TRANSACTION IS EXEMPT UNDER SECTION 2(14)(III) OF T HE I.T. ACT AND HENCE NOT CONSIDERED THE SAME IN HER COMPUTATION OF INCOME. THE SAID RETURN OF INCOME 7 ITA.NO.991/HYD/2014 MR. SVN RAVI KUMAR, SECUNDERABAD. APPEARS TO HAVE BEEN ACCEPTED BY THE REVENUE. FOR T HIS REASON ALSO, THE SOURCE OF THE GIFT IS CONSIDERED T O HAVE BEEN EXPLAINED. IN VIEW OF THE SAME, THE REVENUES APPEAL IS DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.04.2016. SD/- SD/- (S. RIFAUR RAHMAN) (SMT. P. MADHAVI DEVI) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 13 TH APRIL, 2016 VBP/- COPY TO : 1. THE INCOME TAX OFFICER, WARD - 10(1), ROOM NO.516, 5 TH FLOOR, A BLOCK, I.T. TOWERS, A.C. GUARDS, HYDERABAD. 2. MR. SVN RAVI KUMAR, D.NO.1 - 7 - 317 & 318, PARKLANE, SECUNDERABAD. 3. CIT(A) - VI, HYDERABAD. 4. CIT - V, HYDERABAD 5. D.R. ITAT A BENCH, HYDERABAD. 6. GUARD FILE