M/s Srinivasa Auto Financiers, Ponnuru V. THE DCIT, CENTRAL CIRCLE, Vijayawada

MA 15/VIZ/2017

AI Insights

The case involves multiple Miscellaneous Applications filed by M. Rama Seshagiri Rao and associated entities against the orders of the Income Tax Appellate Tribunal, Visakhapatnam. The primary contention was regarding the alleged double assessment of income from the sale proceeds of three plots, which was assessed in both the hands of the assessee and his daughter-in-law, Smt. M. Jayasri. The Tribunal's earlier decision had upheld the assessment made by the CIT(A), which reworked the net profit from the sale of these plots. The Tribunal found no merit in the assessee's argument that the income should not be taxed in his hands since it was already assessed in the hands of Smt. M. Jayasri. Furthermore, other related applications were dismissed based on precedents set in earlier cases where similar issues were addressed.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 128486 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-12-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-11-2022
• Assessment Year: misc
• Appeal Filed On: 02-04-2022
• Other Referred Cases: Y.V. Anjaneyulu vs. DCIT, E.N. Gopakumar vs. CIT (Central)
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income; Onus to prove
• Section: 143(3); 153A; 13; 153C

Judgement Text

आयकर अपीलȣयअͬधकरण, ͪवशाखापटणम पीठ, ͪवशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM Įी दुåवूǽ आर एल रेɬडी, ÛयाǓयक सदèय एवं Įी एस बालाकृçणन, लेखा सदèय के सम¢ BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER MA No.07/Viz/2017 (In आयकर अपील सं./ I.T.A. No.144/Viz/2014) (Ǔनधा[रण वष[ / Assessment Year: 2007-08) M. Rama Seshagiri Rao, D.No. 14-1-17, Ram Nagar, GBC Road, Ponnuru, Guntur District. PAN: ABHPP 7275A Vs. Dy. Commissioner of Income Tax, Central Circle, Autonagar, Vijayawada. (अपीलाथȸ/ Appellant) (Ĥ×यथȸ/ Respondent) MA No.08, 09, 10, 12, 13 & 14/Viz/2017 (In आयकर अपील सं./ I.T.A. No.535, 536, 537,538, 539 & 540 /Viz/2013) (Ǔनधा[रण वष[ / Assessment Year: 2004-05, 2005-06, 2006-07, 2008-09, 2009-10, 2010-11) & MA No.11/Viz/2017 (In ITA No. 150/Viz/2014 (AY 2007-08) M/s. Lakshmi Auto Financiers, D.No.14-1-17, Ramnagar, GBC Road, Ponnuru, Guntur Dist. PAN: AABFL 9689 N Vs. Dy. Commissioner of Income Tax, Central Circle, Vijayawada. (अपीलाथȸ/ Appellant) (Ĥ×यथȸ/ Respondent) 2 MA No.15 & 16/Viz/2017 (In आयकर अपील सं./ I.T.A. No.533 & 534/Viz/2013 (Ǔनधा[रण वष[ / Assessment Year:2004-05 & 2005-06) MA No.17, 18 & 19/Viz/2017 (In आयकर अपील सं./ I.T.A. No.151, 152 & 153/Viz/2014 (Ǔनधा[रण वष[ / Assessment Year:2006-07, 2007-08 & 2008-09) M/s. Srinivasa Auto Financiers, D.No. 14-1-17, Ram Nagar, GBC Road, Ponnuru, Guntur Dist. PAN: AATFS 5240 B Vs. Dy. Commissioner of Income Tax, Central Circle, Vijayawada. (अपीलाथȸ/ Appellant) (Ĥ×यथȸ/ Respondent) अपीलाथȸ कȧ ओर से/ Appellant by : Sri D.L. Narasimharao, Advocate Ĥ×याथȸ कȧ ओर से / Respondent by : Sri ON Hari Prasada Rao, Sr. AR सुनवाई कȧ तारȣख / Date of Hearing : 18/11/2022 घोषणा कȧ तारȣख/Date of Pronouncement : 15/12/2022 O R D E R PER S. BALAKRISHNAN, Accountant Member : This Miscellaneous Application filed by the assessee against the order of the Tribunal in ITA No. 144/Viz/2014 passed vide the consolidated order dated 27/10/2016. 2. The assessee in his memorandum of written submissions submitted that there is a double assessment to the extent of Rs. 57,75,690/- which was assessed in the hands of the daughter-in- 3 law of the assessee Smt. M. Jayasri and also in the hands of the assessee. The Ld. AR submitted that this amount of Rs. 57,75,690/- pertaining to the sale proceeds of three plots at Nagaramm, Maheswarama Mandal, RR District as admitted by Smt. M. Jayasri while filing a return of income of 26/3/2009 for the AY 2007-08 which was accepted and assessment was completed U/s. 143(3) r.w.s 153C of the Act on 28/12/2011. The Ld. AR submitted that while disposing off the appeal, the Ld. CIT(A), Guntur considered the above sale proceeds in the hands of the assessee. The Ld. AR further submitted that he is not disputing the quantum of assessment but only agitating against the income which is taxable in the hands of Smt. M. Jayasri or the assessee. The Ld. AR further pleaded that since the income has been assessed in the hands of Smt. M. Jayasri, the same cannot be included in the hands of the assessee. The Ld. Departmental Representative relied on the order of the ITAT. 3. We have heard both the sides and perused the material available on record as well as the consolidated order of the Tribunal dated 27/10/2016 (supra). On going through the records, we found that the assessee has never raised any objection in the grounds of appeal filed in ITA No. 144/Viz/2014 4 before the Hon’ble Tribunal. The ITAT while passing its detailed order held as follows: “62. Having heard both the sides and considered materials on record, we do not find any merits in the arguments of the assessee for the reason that the seized documents clearly indicates that the assessee has sold flats over and above the sale consideration shown in the sale deeds. It is also an undisputed fact that his daughter in law Smt. M. Jayasree had admitted undisclosed income of Rs.57,75,690/- towards sale of 3 flats for a consideration of Rs.4,300/- and Rs.3,900/- per. Sq.yd. respectively. Though assessee claims to have sold certain flats to his immediate relatives, fails to prove that those flats were sold as stated in the sale deed contradicting the findings recorded by the A.O. based on the seized documents. The CIT(A) after considering the relevant facts has reworked the profit from the project taking into consideration the fact that the assessee has sold flats in November, 2006, while the seized documents reflects the price of March, 2007 and also other relevant facts such as the flats sold by the assessee are not adjacent to main road and an element of discount to friends and relatives is possible. Taking into account all these facts has taken a selling price of Rs.2,700/- per. Sq.yd. towards flat sold to outsiders and sale consideration shown in the sale deeds in respect of flats sold to his relatives and worked out a net profit of Rs.92,83,282/-. The relevant findings of the CIT(A) is extracted below: 7.11 I am also in agreement that three of the plots have been sold and registered in the names of the appellant’s brothers and sister in law i.e., his immediate family members and it is natural to assume that profit would not have been obtained in respect of these plots. However, I do not accept the contention of the appellant that plots have been sold to friends and cousins at cost. It is possible that some discount may have been given, but it is unacceptable that the sale price to cousins and friends would be well below the actual market place. 7.12 The appellant has cited judicial pronouncements in favour of his contention that the burden of proof is on the Department to show that he has received a higher consideration than the stated one. While it is accepted that the burden of proof to furnish evidence in such cases lies on the Department, the requirement is not that actual sale price of each unit sold has to be backed by documentary evidence. It is enough if the evidence available indicates that the sale price reflected in the accounts of the appellant differs substantially from the sale price mentioned in seized documentary evidence, even though the evidence may be in respect of only a small part of the total sales made. In this case, evidence has been found in respect of four plots of land, which indicates that the actual sale price varied from Rs.3,900/¬per Sq. Yard on 17.03.2007 to Rs.4,300/- per Sq. Yard on 29.03.2007. This contrasts substantially from the sale price reflected by the appellant, which is Rs.700/- per Sq. Yard to Rs.1,000/- 5 per Sq. Yard. Moreover, even in respect of those plots, where seized document reflects sale price of Rs.4,300/- per Sq. Yard, the stated consideration is only in the region of Rs.1,000/- a Sq. Yard. Thus, it is apparent that the appellant has grossly under stated the sales consideration and to that extent the Assessing Officer's action is justifiable. However, I am inclined to agree with the appellant to the extent that the attendant circumstances indicate a rapid increase in the land prices. The SRO Value itself has risen by 42% between November and March of the same financial year. Secondly, the lay out plan also substantiates the appellant's contention that the plots sold by Smt.M.Jayasree are on the main road to Shamshabad while a large number of plots sold by the appellant do not have access by any road. Thirdly, the appellant has sold a large number of plots in November, 2006 as against plots sold by Smt. M.Jayasree on 29.03.2007. Even amongst the plots sold by Smt. M.Jayasree, a substantial price variation of Rs.400/¬per Sq. Yard over 12 days has been noticed. Some of the plots have been sold to cousins and friends and hence an element of discount cannot be ruled out. 7.13 Keeping in view all the attendant facts and circumstances, what emerges is that the appellant has sold three plots to his immediate family members i.e., brothers and sister in law, for which the sales consideration reflected in the registered document can be adopted. In respect of other plots, the seized documents clearly indicated that the actual sales consideration is much higher than the stated consideration. However, (i) taking into account the fact that the appellant has sold his plots in November, 2006, while the seized document reflects the price on 29.03.2007, (ii) some of the appellant's plots are not on the main road, (iii) an element of discount to friends and relatives is possible, the sales consideration being adopted in respect of plots sold by the appellant other than to his brothers and sister in law, is Rs.2,700/- per Sq. Yard. Out of the total area of 6,115.99 Sq. Yards sold by the appellant, plots sold to his brothers and sister in law aggregate 2,227.35 Sq. Yards. Thus, for plots sold to others, measuring 3,888.64 Sq. Yards © Rs.2,700/¬per Sq. Yard, the sales consideration in respect of these 9 plots is Rs.1,04,99,328/-. The stated consideration for plots sold to appellant's brothers and sister in law is Rs.15,59,145/-. Thus, the total consideration in respect of the 12 plots works out to Rs.1,20,58,473/-. The unaccounted profit in respect of Nagaram plots is worked out as under: Sale consideration for 12 plots measuring 6,115.99 Sq. Yards Rs.1,20,58,473 Less : Proportionate cost of land Rs. 17,17,125 Less : Proportionate development expenditure Rs. 10,58,066 Rs. 92,83,282 7.14 It should also be noted that the appellant has reflected Rs.9,09,000/- as profit from sale of land at Nagaram and Kollapadakal. Credit for the same shall have to be given to the appellant. This has not been considered while determining profit in respect of the Kollapadakal land. Hence, the entire amount is being reduced from the unrecorded profit from Nagaram plots sale. The profit is hence determined at Rs.83,74,282/- as against 6 Rs.2,31,64,017/- determined by the Assessing Officer. The appellant's grounds of appeal No.4 & 5 are partly allowed.” 63. The CIT(A) has considered all the facts and re-worked net profit from the project. The assessee fails to brought on record any evidences to prove the finding of the fact recorded by the CIT(A) is incorrect. Therefore, we are of the view that the CIT(A) has rightly re-worked the net profit from Nagaram lands and his order does not require any interference. Hence, we inclined to uphold the CIT(A) order and reject the ground raised by the assessee.” 4. The Hon’ble ITAT found that the Ld. CIT(A) has considered all the facts and reworked out the profit of the assessee. The relevant paras of the said Tribunal order (supra) are extracted as under: “63. The CIT(A) has considered all the facts and re-worked net profit from the project. The assessee fails to brought on record any evidences to prove the finding of the fact recorded by the CIT(A) is incorrect. Therefore, we are of the view that the CIT(A) has rightly re-worked the net profit from Nagaram lands and his order does not require any interference. Hence, we inclined to uphold the CIT(A) order and reject the ground raised by the assessee.” 5. We therefore find that the order of the Tribunal (supra) has considered the facts of the case and has rightly adjudicated the grounds raised by the assessee while finalizing the original appeal. Therefore, we are not inclined to interfere in the order of the ITAT dated 27/10/2016 and thereby dismiss the Miscellaneous Application filed by the assessee. 6. In the result, Miscellaneous Application filed by the assessee is dismissed. 7 MA Nos. 8 to 19/Viz/ 2019 7. These Miscellaneous Applications filed against the order of the Tribunal dated 30/09/2016 in ITA Nos. 533 & 534/Viz/2013; 151 to 154/Viz/2014; 535 to 540/Viz/2013 and ITA No. 150/Viz/2014. 8. The assessees in these Miscellaneous Applications have raised the legal ground stating that without any incriminating material, the additions made by the Ld. AO in the case of non- abated assessments are not valid in law. The Ld. AR argued that in the absence of any incriminating material found during the search proceedings, no additions can be made U/s. 153A of the Act. The Ld. AR also relied on the Coordinate Bench, Visakhapatnam decision in ITA Nos. 513 & 514/Viz/2013 (AY 2004-05 & 2005-06) in the case of Y.V. Anjaneyulu vs. DCIT, dated 9/6/2017. The Ld. AR also pleaded for telescoping benefit with respect to the additions made. Per contra, the Ld. DR submitted that the Hon’ble ITAT in para 5 of the consolidated order (surpa) has considered the grounds raised by the assessee and hence pleaded that Miscellaneous Applications filed by the assessees may be dismissed. The Ld. DR also relied on the decision of the Hon’ble Kerala High Court in the case of E.N. 8 Gopakumar vs. CIT (Central) reported in [2015] 75 taxmann.com 215 (Kerala). 9. We have heard both the sides and perused the material available on record as well as the order of the Tribunal dated 30/09/2016. Since the assessee has raised common grounds in all the MAs, for the sake of convenience, they are clubbed and disposed off in this consolidated order by taking MA No.8/Viz/2017 as a lead Miscellaneous Application. 10. We find from the order of the Tribunal (supra), as argued by the Ld. DR, in para 5 of its order the ITAT has held as follows: “5. The assessee also argued a legal issue without raising any specific ground in any of the years, in relation to validity of assessment order passed by the A.O. The Ld. A.R. for the assessee, submitted that theA.O. was erred in making additions without seized materials for the completed assessment years. The A.R. referred to the provisions of section 153A and submitted that in case of completed assessments, the A.O. has no jurisdiction to make additions without any seized materials. In case of abated assessment, the A.O. has jurisdiction to assess the total income including undisclosed income found as a result of search. In the present case, the A.O. made additions to returned income without any seized materials, therefore, the assessment orders passed by the A.O. is invalid, consequently addition are liable to be deleted. Having considered the arguments and having considered materials on record, we find that there is no merits in the arguments of the ld. A.R. for the assessee, as the assessee did not raised this legal ground before us or even before the CIT(A). Hence, the legal arguments put-fourth by the Ld. A.R. is rejected.” 11. We find that the legal issue raised by the assessee in the MA has already been considered by the Tribunal in its order dated 30/09/2016. We are therefore of the view that the same issue 9 raised by the assessee through the MA cannot be considered. Therefore, we dismiss the MA field by the assessee. 12. Since the Grounds raised in MA Nos. 9 to 19/Viz/2017 are similar to that of the ground raised in MA No. 8/Viz/2017 as above, our decision rendered in MA No.8/Viz/2017 mutatis mutandis applies to the MA Nos. 9 to 19/Viz/2017 also. 13. In the result, all the MAs filed by the assessees are dismissed. Pronounced in the open Court on the 15 t h December, 2022. Sd/- Sd/- (दुåवूǽ आर.एल रेɬडी) (एस बालाकृçणन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) ÛयाǓयकसदèय/JUDICIAL MEMBER लेखा सदèय/ACCOUNTANT MEMBER Dated :15.12.2022 OKK - SPS आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the order forwarded to:- 1. Ǔनधा[ǐरती/ The Assessee – Sri Movva Ramaseshagiri Rao, D.No. 14- 1-117, Ram Nagar, GBC Road, Ponnuru, Guntur District. (ii) M/s. Lakshmi Auto Financiers, 14-11-117,j Ramnagar, GBC Road, Ponnuru, Guntur District. 2. राजèव/The Revenue – The DCIT, Central Circle, Vijayawada. 3. The Principal Commissioner of Income Tax, (ii) CIT (Central), Hyderabad. 10 4. आयकर आयुÈत (अपील)/ The Commissioner of Income Tax (A) Guntur. 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, ͪवशाखापटणम/ DR, ITAT, Visakhapatnam 6. गाड[ फ़ाईल / Guard file आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam