M/s. Sainath Estates (P) Ltd., Hyderabad V. DCIT, Central Circle-2, Hyderabad

MA 37/Hyd/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5454 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 05-07-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 24-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 254(2); 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI RIFAUR RAHMAN , ACCOUNTANT MEMBER M.A. NO. 37 /HYD./201 9 (IN ITA NO. 1 256 /HYD./1 2 ) A.Y. 2009 - 10 M/S SAINATH ESTATES (P) LTD. , VS. DCIT, CENTRAL CIRCLE 2 1 - 8 - 333 & 334, A WANE HYDERABAD BEGUMPET HYDERABAD 500 033 PAN: AA F C S 0211D (APPELLANT) (RESPONDENT) FOR ASSESSE : NONE. FOR REVENUE : SMT. AMISHA S GUPTA, D.R. DATE OF HEARING : 05/07/19 DATE OF PRONOUNCEMENT : 27/09/19 O R D E R PER SMT. P. MADHAVI DEVI, J.M. TH IS MISCELLANEOUS APPLICATION IS FILED BY ASSESSEE SEEKING RECTIFICATION OF ALLEGED MISTAKE CREPT IN THE ORDER OF TRIBUNAL DATED 11.01.2019 IN ITA NO.1256/HYD./ 2012. IN THE MISC. APPLICATION THE ASSESSEE HAS SUBMITTED AS UNDER: 1. THE HON'BLE TRIBUNAL VIDE ORDER DATED 11.01.2019 WHILE DEALING WITH BATCH CASE RELATING TO THE ABOVE ASSESSEE FOR AYS. 2007 - 08 TO 2011 - 12 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE (ITA.NO.1256 / HYD / 2012) FOR AY 2009 - 10. ONE OF THE ISSUES THAT FELL M.A. NO. 37 /HYD./201 9 A.Y. 2009 - 10 (IN ITA NO. 1 256 /HYD./1 2 ) M/S SAINATH ESTATES P LTD. VS. DCIT, C.C.2 , HYD. 2 FOR CONSIDERATION OF THE HON'BLE TRIBUNAL WAS THE CASH FOUND AND SEIZED OF RS .4, 00,62,250. OUT OF THE ABOVE AMOUNT, RS.3 CRORES WAS FOUND WITH SRI KRV UDAYCHARAN RAO AND SRI HARISH KUMAR KUNDRA ON 17.03.2009 AT INDIRA GANDHI INTERNATIONAL AIRPORT, NEW DELHI AND THE BALANCE AMOUNT OF RS.1,00,62,250 WAS FOUND IN THE BUSINESS PREMISES OF THE APPELLANT COMPANY. WHEN QUESTIONED ABOUT THE CASH, BOTH S RI KRV UDAYCHARAN RAO AND THE SRI PREMSAGAR RAO, M.D. OF THE COMPANY HAVE STATED THAT THE MONEY BELONGED TO THE APPELLANT AND WAS OUT OF WITHDRAWALS MADE FROM THE BANK AND OUT OF THE CASH AVAILABLE FROM BUSINESS OPERATIONS. IN SUPPORT OF THE SAME, THE CASH BOOK (WHICH WAS NOT UPDATED AS ON THE DATE OF SEARCH VIZ.,17.03.2009) BUT WAS LATER UPDATED WAS FILED BEFORE DEPARTMENTAL AUTHORITIES. 2. THE AO AS WELL AS THE CIT(A) FOUND THAT CASH WAS DRAWN FROM BANK ACCOUNT OF THE APPELLANT ON 11.03.2009 AND WAS AVAI LABLE. APART FROM THAT CASH WAS AVAILABLE IN THE CASH BOOK FROM BUSINESS TRANSACTIONS. HOWEVER, THE AUTHORITIES BELOW HAVE NOT ACCEPTED THE AVAILABILITY OF CASH AS ON 17.03.2009 ON THE ALLEGED GROUND THAT THE APPELLANT HAD DRAWN CASH FROM BANK THROUGH MULT IPLE CHEQUES WHICH COULD HAVE BEEN DRAWN THROUGH SINGLE CHEQUE. THE ONLY REASON FOR REJECTING THE AVAILABILITY OF CASH WAS THAT THE APPELLANT HAS FAILED TO ESTABLISH THE LINK BETWEEN THE CASH WITHDRAWN AND THE CASH FOUND AT THE TIME OF THE SEARCH. 3. THE APPELLANT IN THE COURSE OF HEARING BEFORE THE HO N 'BLE TRIBUNAL SUBMITTED THAT THE ABOVE REASONS FOR REJECTING THE AVAILABILITY OF CASH OF RS .4 ,00,62,250 AS ON THE DATE OF SEARCH (17.03.2009), IS INCORRECT AS MOST OF THE AMOUNT WAS DRAWN FROM SYNDICATE BANK ON 11.03.2009 AND THE SAME ALONG WITH BALANCE IN CASH BOOK (OUT OF BUSINESS OPERATIONS) WAS AVAILABLE WITH THE APPELLANT. OUT OF THIS, RS.3 CRORES WAS CARRIED BY SRI KRV UDAYCHARAN RAO AND THE BALANCE WAS AVAILABLE IN THE OFFICE PREMISES OF THE APPELL ANT AS ON THE DATE OF SEARCH. IN SUPPORT OF THE ABOVE CONTENTION, THE APPELLANT FILED BANK ACCOUNT STATEMENT FROM PAGES 154 TO 165 IN THE PAPER BOOK (VOL - III). IN THE COURSE OF THE HEARING, THE APPELLANT POINTED OUT AT THE LETTER DATED 20.02.2016 ISSUED BY THE SYNDICATE BANK, R.P.ROAD BRANCH, SECUNDERABAD WHICH CLARIFIED THAT ALL THE FOUR CHEQUES (CHEQUE NOS.123112 TO M.A. NO. 37 /HYD./201 9 A.Y. 2009 - 10 (IN ITA NO. 1 256 /HYD./1 2 ) M/S SAINATH ESTATES P LTD. VS. DCIT, C.C.2 , HYD. 3 129115) WERE UTILIZED FOR CASH WITHDRAWALS FROM CURRENT ACCOUNT NO.30181010004411 BY THE APPELLANT. THE CASH WITHDRAWN FROM BANK ALONG WIT H CASH FROM BUSINESS OPERATIONS WAS AVAILABLE WITH THE APPELLANT AS ON THE DATE OF SEARCH 17.03.2009 AND THE APPELLANT ACCORDINGLY HAD ESTABLISHED THE LIVE LINK BETWEEN THE CASH FOUND AND THE SOURCE FOR THE SAME. AS A MATTER OF FACT, SINCE AUTHORITIES BELO W COULD NOT LOOK INTO THE UPDATED CASH BOOK IN PROPER PERSPECTIVE, A SUBMISSION WAS MADE REQUESTING FOR REMITTING BACK THIS ISSUE TO THE FILE OF AO TO LOOK INTO THE SAME AFRESH. 4. HOWEVER, THE HONBLE TRIBUNAL BY OVERSIGHT HAS NOT CONSIDERED THE ABOVE E SSENTIAL FACTS WHICH ARE AVAILABLE ON RECORD, BUT WENT BY THE FINDINGS OF THE AUTHORITIES BELOW, WHICH WERE PERVERSE AND WERE CONTRARY TO THE EVIDENCE ON RECORD. IT IS SUBMITTED THAT THE CASH WITHDRAWAL FROM THE SYNDICATE BANK BARELY 6 DAYS BEFORE THE DAT E OF SEARCH (11.0 - 3.2009) COULD NOT HAVE BEEN ESCHEWED FROM CONSIDERATION FOR DETERMINING THE AVAILABILITY OF CASH AS ON THE DATE OF SEARCH ON 17.03.2009. FURTHER, THE PRINCIPLE LAID DOWN IN THE CASE OF THIRD MEMBER DECISION IN THE CASE OF MS.AISHWARYA K RAI VS. DCIT(2007) 104 ITD 166 THAT EVEN A CONSTRUCTED CASH BOOK HAS TO BE LOOKED INTO WHILE DETERMINING AVAILABILITY OF CASH WAS ALSO NOT CONSIDERED. THE LIVE LINK VIZ., AVAILABILITY OF FUNDS FROM BANK COULD NOT HAVE BEEN DISREGARDED AS THIS IS A CASE O F SEARCH U/S 132 OF THE ACT, AND THE AUTHORITIES BELOW HAVE NOT FOUND THAT THE SAME WAS UTILISED ELSEWHERE. IN VIEW OF THE ABOVE, THE HON'BLE TRIBUNAL MAY KINDLY CORRECT THE MISTAKE APPARENT FROM RECORD, WHICH HAS CREPT IN ON ACCOUNT OF NOT CONSIDERING THE SUBMISSIONS OF THE APPELLANT AND THE EVIDENCE AVAILABLE IN CORRECT PERSPECTIVE. 2. LD.COUNSEL FOR THE ASSESSEE WHILE REITERATING THE STATEMENTS ABOVE, SUBMITTED THAT THE FINDING OF THE TRIBUNAL THAT THE ASSESSEE COULD NOT ESTABLISH THE LIVE LINK BETWEEN THE WITHDRAWALS FROM BANK AND CASH FOUND AT THE TIME OF SEARCH IS ERRONEOUS FINDING OF FACT AND , THEREFORE , IT IS A MISTAKE RECTIFIABLE U/S 254(2) OF T HE I.T.ACT. M.A. NO. 37 /HYD./201 9 A.Y. 2009 - 10 (IN ITA NO. 1 256 /HYD./1 2 ) M/S SAINATH ESTATES P LTD. VS. DCIT, C.C.2 , HYD. 4 3. LD.D.R. HOWEVER, SUBMITTED THAT THERE IS NO MISTAKE APPARENT FROM RECORD WHICH CAN BE RECTIFIED U/S 254(2) OF THE I.T.ACT. 4. HAVING REGARD TO RIVAL CONTENTIONS AND ALSO THE MATERIAL PLACED ON RECORD, WE FIND THAT THE ARGUMENT OF THE ASSESSE E HAS BEEN THAT THE CASH FOUND FROM SHRI KRV UDAY CHARAN RAO AND SHRI PREMSAGAR RAO ON 17.3.2009 AT INDIRA GANDHI INTERNATIONAL AIRPORT , NEW DELHI BELONGED TO THE ASSESSEE COMPANY I.E. M/S SAINATH ESTATES PVT.LTD. AND THE SOURCE FOR THE SAME HAS BEEN STATED TO BE WITHDRAWALS FROM THE BANK AND THE CASH AVAILABLE FROM BUSINESS OPERATIONS . THE LD.COUNSEL FOR THE ASSESSEE POINTED OUT THAT AS L ONG AS THE AMOUNT WITHDRAWN FROM THE BANK IS SUFFICIENT AND CASH AVAILABLE FROM BUSINESS OPERATIONS IS AVAILABLE AND IS SUFFICIENT TO EXPLAIN THE CASH F O UND IN THE HANDS OF THE ASSESSEE AND ITS DIRECTORS, AT THE TIME OF SEARCH, THE ADDITION U/S 69 OF THE I.T.ACT CANNOT BE MADE AND, T HEREFORE, ACCORDING TO HIM THE FINDING OF THE TRIBUNAL CONFIRMING THE ORDER OF THE CIT(A) THAT THERE SHOULD BE A LIVE LINK BETWEEN THE CASH WITHDRAWALS AND THE CASH FOUND AT THE TIME OF SEARCH IS A MISTAKE APPARENT FROM RECORD WHICH CAN BE RECTIFIED U/S 254(2) OF THE ACT . 4.1 SINCE THE ASSESSEE HAD DRAWN OUR ATTENTION TO THE FINDINGS OF THE REVENUE OFFICERS THAT THE CASH BALANCES WITHDRAWN FROM THE BANK WERE SUFFICIENT TO EXPLAIN THE CASH FOUND IN THE HANDS OF SHRI KRV UDAY CHARAN RAO AND SHRI PREMSAGAR RAO , BUT WAS DISALLOWED ONLY FOR THE REASON THAT THE ASSESSEE FAILED TO ESTABLISH THE CASH FOUND WITH THE SOURCE, WE DEEM IT FI T AND PROPER TO MODIFY M.A. NO. 37 /HYD./201 9 A.Y. 2009 - 10 (IN ITA NO. 1 256 /HYD./1 2 ) M/S SAINATH ESTATES P LTD. VS. DCIT, C.C.2 , HYD. 5 THE LAST 5 LINES OF PARA 12 OF ITAT ORDER. THE FOLLOWING SENTENCES SHALL BE SUBSTITUTED : SINCE BOTH THE AO AND THE CIT(A) HAVE VERIFIED THE CASH AND BANK STATEMENTS AND HAVE COME TO THE CONCLUSION THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCES FOR THE CASH FOUND AT THE TIME OF SEARCH, AND EVEN BEFORE US, THE ASSESSEE COULD NOT ESTABLISH THE LIVE LINK, WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). THUS, GROUND NO.4 RAISED BY THE ASSESSEE COMPANY IS ACCORDINGLY REJECTED. BY THE FOLLOWING LINES : S INCE B OTH THE AO AND CIT(A) HAVE MADE THE ADDITION ON THE GROUND THAT THE ASSESSEE COULD NOT ESTABLISH THE LIVE LINK, WE ARE OF THE OPINION THAT IF THE ASSESSEE IS ABLE TO SATISFY THAT THERE WERE SUFFICIENT BANK WITHDRAWALS TO EXPLAIN THE FUNDS IN THEIR HANDS, N O ADDITION CAN BE MADE. THEREFORE, WE DEEM IT FIT AND PROPER TO REMAND THIS ISSUE TO THE FILE OF THE AO FOR REVERIFICATION OF THE ISSUE. 5. IN THE RESULT, THE M.A. FILED BY ASSESS EE IS ACCORDINGLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 27/09/2019 . SD/ - SD/ - ( S. RIFAUR RAHMAN ) (P MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27/9/2019 . *GMV M.A. NO. 37 /HYD./201 9 A.Y. 2009 - 10 (IN ITA NO. 1 256 /HYD./1 2 ) M/S SAINATH ESTATES P LTD. VS. DCIT, C.C.2 , HYD. 6 COPY FORWARDED TO: 1. M/S SAINATH ESTATES (P) LTD., 1 - 8 - 333 & 334, A - WANE, BEGUMPET, HYDERABAD. 2. DY.CIT , CENTRAL CIRCLE 2, HYDERABAD. 3. AC IT(A) , CENTRAL RANGE - 1, HYDERABAD. 4. THE CIT (CENTRAL), HYDERABAD. 5. D.R. ITAT HYDERABAD. 6. GUARD FILE 7. CIT(A) - 1, HYDERABAD // C O P Y // ASST. REGISTRAR ITAT HYDERABAD BENCH HYDERABAD M.A. NO. 37 /HYD./201 9 A.Y. 2009 - 10 (IN ITA NO. 1 256 /HYD./1 2 ) M/S SAINATH ESTATES P LTD. VS. DCIT, C.C.2 , HYD. 7 1. DRAFT DICTATED ON 05/07/19 2. DRAFT PLACED BEFORE THE AUTHOR 09/07/19 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY SECOND MEMBER 5. APPROVED DRAFT COMES TO SRPS 6. KEPT FOR PRONOUNCEMENT 27/9/19 7. FILE SENT TO BENCH CLERK