V Krishnaiah, Hyderabad V. ACIT, Hyderabad

ITSSA 34/HYD/2009

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 7968 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-02-2011
• Assessment Year: misc
• Appeal Filed On: 12-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K SRINIVAS
• Keywords: Unexplained investment; Loose papers; Opportunity of being heard; Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND CHANDRAPOOJARI, ACCOUNTANT MEMBER IT(SS)A NO.34/HYD/2009 BLOCK ASSESSMENT YEAR1986-87 TO 1995-9 6 V.KRISHNAIAH, HYDERABAD. (PAN/ GIR NO.K-737) VS ACIT,CIRCLE - 10(1), HYDERABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : MOHD.AFZAL RESPONDENT BY : SHRI K.SRINIVAS DATE OF HEARING: 28-11-2011. DATE OF PRONOUNCEMENT: 30 - 11-2011. O R D E R PER BENCH: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF THE ACIT, CIRCLE-10(1), HYDERABAD DATED 30-12-20 08 AND IT PERTAINS TO THE BLOCK ASSESSMENT PERIOD FROM 1986-87 TO 1995 -96. 2. THE ASSESSEE HAS AGITATED IN THIS APPEAL AGAINS T THE ADDITION AS UNEXPLAINED INVESTMENTS OF RS.3 LAKHS AND RS.12 LA KHS WRONGLY MADE BY THE ASSESSING OFFICER FOR THE YEARS UNDER CONSID ERATION IN THE CASES OF M/S VEENA HOSIERY AND M/S SANDHYA TEXTILES RESPE CTIVELY. IN THE COURSE OF SEARCH AT THE RESIDENTIAL PREMISES OF SRI V. LINGAIAH, PROP. IT(SS)A NO.34/HYD/2009- V. KRISHNAIAH, SECBAD. L.L ========================== 2 SANDHYA TEXTILES, CERTAIN LOOSE SHEETS BEARING NO.V L/1/19 TO24 WERE PARE MENTIONED AS PARTNERS IN VEENA HOSIERY WITH DE TAILS OF INVESTMENTS NOTED AGAINST THEIR NAMES:- SRI A.BALAKISHAN RS.10 LAKHS + 10 0780 =1100780 SRI G.JAGANNATHAM RS.2 LAKHS SRI C.CHANDRAMOULI RS.2 LAKHS SRI V. KRISHNAIAH RS.2 LAKHS SRI U. LINGAIAH RS.2 LAKHS SRI G. RAJU RS.1.97 LAKHS SRI PUNDALIKAM RS.1 LAKH IN VIEW OF THE SEIZED MATERIAL, ADDITION OF RS. 3 L AKHS HAS BEEN MADE IN THE HAND OF SRI V. KRISHNAIAH. SIMILAR ADDITIONS WE RE MADE IN THE NAMES OF OTHER PERSONS ALSO. IN THE COURSE OF SEARCH PRO CEEDINGS, A BUNCH OF LOOSE SHEETS WAS ALSO FOUND AND SEIZED FROM THE RES IDENTIAL PREMISES OF SRI V.LINGAIAH A PARTNER OF SANDHYA TEXTILES. THE B UNCH IS INVENTORISED AS THE SEIZED MATERIAL IN ANNEXURE VL/1,PAGE 18 OF THE ANNEXURE VL CONTAINS BALANCE SHEET OF SANDHYA TEXTILES AND SADH ANA TEXTILES. AS PER THIS BALANCE-SHEET, THE ACTUAL PARTNER IN THE ABOVE TWO CONCERNS ARE 1. SRIG. BANGARAIAH, (2) SRI G. JAGANNATHAM, 3) SRI V. LINGAIAH AND M/S SAMPOORNA TEXTILES. SRI V. KRISHNAIAH IN HIS SWORN STATEMENT REPLIED THAT ACTUALLY SAMPOORNA TEXTILES IS A PARTNERSHIP F IRM BETWEEN HIMSELF AND SRI G. CHANDRAMOULI. 3. AS PER HIS STATEMENT, HE HIMSELF AND CHANDRAMOU LI TOGETHER INVESTED IN THE TWO FIRMS AN AMOUNT OF RS.16,63,788 /- AND EARNED A PROFIT OF RS.4,46,955/-. PAGE 27 OF ANNEXURE VL/1 C ONTAINS THE DETAILS OF IT(SS)A NO.34/HYD/2009- V. KRISHNAIAH, SECBAD. L.L ========================== 3 AMOUNTS RECEIVED BY SAMPOORNA TEXTILES AT THE TIME OF RETIREMENT FROM THE PARTNERSHIP FIRM SANDHYA TEXTILES ON 31-3-1995 AND THOSE DETAILS ARE AS UNDER:- CAPITAL OF M/S SAMPOORNA TEXTILES IN SANDHYA TEXTILES R S.16,63,798 ADD: PROFIT IN SANDHYA TEXTILES RS. 4 ,46,956 ADD: SHARE OF GOODWILL RS. 3,05,000 ---------------- RS.24,15,754 LESS: WITHDRAWAL OF CHANDRAMOULI AND KRISHNAIAH RS. 3,95,714 -------------------- RS.20,20,040 LESS: GENERATOR RS. 10,000 ----------------- RS.20,10,040 ----------------- THE ASSESSEE IN HIS STATEMENT FURTHER STATED THAT T HEY ACTUALLY RECEIVED THE ENTIRE AMOUNT OF RS.24,15,754/- AND IT IS OUTSI DE BOOKS OF ACCOUNTS AND THE SAME IS OFFERED FOR TAXATION. SUBSEQUENTLY , THE ASSESSEE SUBMITTED AN AFFIDAVIT BEFORE THE ACIT (INVESTIGATI ON), CIRCLE-5(1) ON 22-01-1997 DENYING THE DECLARATION MADE EARLIER ON INVESTMENT IN AND PROFIT FROM SANDHYA TEXTILES AT RS. 12 LAKHS. HOWEV ER, THE ASSESSING OFFICER MADE ADDITION OF RS.15 LAKHS ON THE ABOVE C OUNTS. AGGRIEVED AGAINST THE ORDER OF THE ASSESSING OFFICER, THE ASS ESSEE WENT BEFORE THE TRIBUNAL. THE TRIBUNAL VIDE ORDER DATED 9-3-2007 SET ASIDE THE ISSUE TO IT(SS)A NO.34/HYD/2009- V. KRISHNAIAH, SECBAD. L.L ========================== 4 THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GIVE A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WHILE PASSING THE FRESH ASSESSMENT ORDER, THE ASSESSING OFFICER CONFIRMED T HE ABOVE ADDITIONS. 4. THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASS ESSEE SUBMITTED BEFORE US THAT THE ISSUED INVOLVED IN THIS APPEAL IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF SRI CHANDR AMOULI VS. ACIT IN IT (SS)A NO.33/HYD/2009 DATED 31-8-2010 DELETED THE A BOVE ADDITIONS VIDE PARA-17 OF THEIR ORDER WHICH READS AS UNDER:- WE SEE MERIT IN THE ARGUMENTS OF THE LEARNED COUNS EL FOR THE ASSESSEE THAT THE ADDITIONS OF RS.3,00,000 AND RS.1 2,00,000 TOWARDS ALLEGED INVESTMENTS IN VEENA HOSIERY AND SA MPOORNA TEXTILES RESPECTIVELY WERE MADE SOLELY RELYING ON T HE SLIPS OF PAPERS FOUND IN THE HOUSE OF SHRI LINGAIAH, WHEN TH E SIMILAR ADDITIONS WERE NOT MADE IN THE CASE OF THOSE INDIVI DUALS WHOSE NAMES ALSO APPEARED IN THE SAID SLIPS OF PAPERS. T HE DEPARTMENT DID NOT BRING ANY MATERIAL ON RECORD TO SHOW THAT N EITHER THE ASSESSEE NOR HIS WIFE IS PARTNERS OF THE SAID FIRMS . THE ASSESSEE HAD RETRACTED HIS EARLIER STATEMENT ON THIS ISSUE B Y FILING THE AFFIDAVIT AND EXPLAINED THE CIRCUMSTANCES IN WHICH THOSE PAPERS WERE PREPARED FOR OBTAINING LOAN FROM THE BANKS AND IN FACT THEY WERE ALSO NOT FILED BEFORE THE BANK AUTHORITIES AND THESE LOOSE SHEETS NEED NOT BE TAKEN AS TRUE AND CORRECT POSITI ON OF THE STATE OF AFFAIRS FOR ARRIVING AT THE UNDISCLOSED INCOME. IN OUR CONSIDERED OPINION, THE SAID LOOSE PAPERS ARE DUMB DOCUMENT AN D ADDITION CANNOT BE MADE ON THE BASIS OF THIS DUMB DOCUMENT W ITHOUT ANY CORROBORATIVE AND SUPPORTIVE EVIDENCE. THE DEPARTM ENT FAILS TO IT(SS)A NO.34/HYD/2009- V. KRISHNAIAH, SECBAD. L.L ========================== 5 BRING ANY SUCH EVIDENCE TO SUPPORT ITS CASE. AFTER CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCE OF THE CASE, WE DIRECT THYE ASSESSING OFFICER TO DELETE BOTH THE ADDITIONS OF R S.3,00,000 AND RS.12,00,000/- MADE BY THE ASSESSING OFFICER FROM T HE UNDISCLOSED INCOME OF THE ASSESSEE. ACCORDINGLY, B OTH GROUNDS RAISED BY THE ASSESSEE ON THESE ISSUES ARE ALLOWED. THE FACTS AND THE CIRCUMSTANCES OF THE PRESENT CASE ARE SIMILAR TO THE ABOVE CASE CONSIDERED BY THE TRIBUNAL ON EARLIER OC CASION, RESPECTFULLY FOLLOWING THE SAME, WE ARE INCLINED TO DELETE THE A DDITIONS IN THE INSTANT CASE, ON SIMILAR LINES. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 30-11-2011 . SD/- SD/- ( H.S. SIDHU ) (CHANDRA POOJARI) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DT/- 30-11-2011. COPY FORWARDED TO: 1. MOHD. AFZAL, ADVOCATER, 11 - 5 - 465, FLAT NO.402, SHERSONS RESIDENCY CRIMINAL COURT ROAD, RED HILLS, HYDERABAD . 2. ACIT,CIRCLE - 10(1), HYDERABAD. 3 . CIT, AP, HYDERABAD. 4. THE D.R., ITAT, HYDERABAD. JMR* IT(SS)A NO.34/HYD/2009- V. KRISHNAIAH, SECBAD. L.L ========================== 6