Mutchuakarla Appa Rao, Visakhapatnam V. The Income Tax Officer, Ward-3(2), Visakhapatnam

MA 41/VIZ/2023

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 9357 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-12-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-12-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 11-07-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 69A; 254(2)

Judgement Text

1 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 M.A. No. 41/Viz/2023 (In आयकर अपील सं./ I.T.A. No.668/Viz/2019) (Ǔनधा[रण वष[ / Assessment Year : 2011-12) Sri Mutchuakarla Appa Rao, Visakhapatnam. PAN: AHVPM 9813 F Vs. Income Tax Officer, Ward-3(2), Visakhapatnam. (अपीलाथȸ/ Appellant) (Ĥ×यथȸ/ Respondent) अपीलाथȸ कȧ ओर से/ Assessee by : Sri C. Subrahmanyam, CA Ĥ×याथȸ कȧ ओर से / Revenue by : Sri Madhukar Aves, Sr. AR Sr. AR सुनवाई कȧ तारȣख / Date of Hearing : 08/12/2023 घोषणा कȧ तारȣख/Date of Pronouncement : 22/12/2023 O R D E R PER S. BALAKRISHNAN, Accountant Member : This Miscellaneous Application is filed by the assessee U/s. 254(2) of the Income Tax Act, 1961 [the Act] seeking rectification of the Tribunal’s order dated 17/03/2023 in ITA No. 668/Viz/2019 (AY: 2011- 12). 2 2. At the outset, the Ld. AR submitted that there is a mistake apparent on record in the order of the Tribunal dated 17/3/2023 (supra) while considering the submissions of the assessee with respect to the issue involved in Ground No.3 of the Revenue’s appeal. In this regard, the Ld. AR read out the Ground No.3 of the Revenue’s appeal in ITA No. 668/Viz/2019 (supra) which is as follows: “3. The Ld. CIT(A) erred in deciding ownership of the two immovable properties vide registered deeds No. 15558/2010 to be in the hands of the firm M/s. AR Builders rather than in the hands of the assessee individual by ignoring the fact that the assessee himself has acquired the properties in his name and subsequent action on these lands ie., the development agreement and the sale agreement have been entered by the individual assessee but not the firm.” 3. Referring to the above Ground No.3 of the Revenue’s appeal, the Ld. AR submitted that the issue involved in this ground relates to the sources for the purchase of property, which was purchased and consideration was paid by the firm M/s. AR Builders wherein the assessee is a partner and whether the registration made in the name of the assessee can be considered as appropriate in the eyes of law as per the facts and circumstances of the case. The Ld. AR further submitted that while adjudicating the issue involved in this Ground No.3, the Tribunal did not accept the payment made by cash by the firm M/s. AR Builders for purchase of the property by holding that the cash book 3 submitted by the Ld. AR could not be relied upon on the issue of receipt of advance from Mr. RP Naidu who also happened to be the power holder of the vendor. Hence, we find the cash book of the firm M/s. AR Builders could not be relied upon on the cash payments made by the firm towards purchase of the land from Mr. RP Naidu. The Ld. AR further submitted that during the hearing it was brought to the notice of the Hon’ble Bench that the case of M/s. AR Builders was subjected to scrutiny wherein the queries were raised during the scrutiny with regard to the sources for purchase of the impugned land as well as the advance amount given by Mr. RPT Naidu of Rs. 18 lakhs. The Ld. AR further submitted that since the Ld. AO and the Ld. CIT(A) have accepted the books of account of AR Builders, the observation of the Hon’ble Tribunal (supra) by holding that the rejection of the books of accounts of AR Builders as a reason for reversing the decision of the Ld. CIT (A) is mistake apparent on record. Therefore, the Ld. AR pleaded that the Tribunal may consider the issue involved in the MA and pass the orders as deem fit by rectifying the Tribunal’s order dated 17/03/2023. 4. Per contra, the Ld. Departmental Representative heavily relied on the order of the Hon’ble Tribunal (supra), dated 17/3/2023 and supported the decision taken by the Tribunal. 4 5. We have heard the rival submissions and carefully perused the order of the Tribunal in ITA No. 668/Viz/2019 (AY: 2011), dated 17/03/2023 (supra). Ground No.3 of the Revenue’s appeal relates to the decision of the Ld. CIT(A) in deciding the ownership of the two immovable properties and mainly the sources and the mode of payment for acquiring such immovable properties. While adjudicating this ground, the Tribunal noted from the material available before the Bench that the sale document was registered in the individual name of the assessee but, as per the assessee the sources for purchase of the said property was out of the funds of the partnership firm M/s. AR Builders wherein the assessee and his wife are the partners. Further, the Tribunal did not appreciate the argument of the Ld. AR that the property was purchased in the name of the assessee due to sentimental reasons. The Tribunal also brushed aside the contention of the assessee to treat the property as the firm’s property because the assessee has paid Rs. 30 lakhs in cash for purchase of the property but has not furnished any sources for the cash payment and could not demonstrate with valid documentary evidence. We also cannot appreciate the argument of the Ld. AR that with regard to cash payments the firm was funded by way of the capital infusion by the partners because the assessee is one of the partners in the same firm M/s. AR Builders. Further, the Tribunal made it clear that 5 the Bench cannot rely on the cash book submitted by the Ld. AR on this issue, which was rejected by the Ld. AO treating it as an afterthought, as the sources for the cash payment of Rs. 30 lakhs made towards purchase of land has not been properly explained by the assessee by furnishing the supporting documents. Considering all the above stated facts and the material available on record, the Tribunal vide para 8 of the Tribunal’s order dated 17/3/2023 (supra) has upheld the addition of Rs. 30,00,000/- out of the total addition of Rs. 43,59,500/- made by the Ld. AO U/s. 69A of the Act and grated relief to the assessee to the extent of Rs. 13,59,500/- which was paid towards stamp duty and was paid through cheques. For the sake of immediate reference, the findings of the Hon’ble Tribunal in para 8 of its order is extracted herein below: “8. We have heard both the parties and perused the material available on record and the orders of the Ld. Revenue Authorities. We find from the sale deed copies submitted by the Ld. AR in page 51 of the paper book that the assessee has paid registration fees by way of cheque for registering the documents on 29/4/2010. Further, we find that the partnership firm M/s. AR Builders has paid a cheque of Rs. 15 lakhs for each document by way of cheque to the power holder of the vendors. The payment of cash of Rs. 15 lakhs for each for the two documents was also mentioned in the copies of the sale deed submitted before us. However, the cash book submitted by the Ld. AR could not be relied upon on the issue of receipt of advance from Mr. RP Naidu who also happened to be the power holder of the vendor. Hence, we find the cash book of the firm M/s. AR Builders could not be relied upon on the cash payments made by the firm towards purchase of the land from Mr. RP Naidu. We therefore are of the considered view that the sources for the cash of Rs. 30 lakhs paid for the purchase of the land has not been properly explained by the Ld. AR and we hereby uphold the order of the Ld. AO on this ground for the limited amount of Rs. 30 lakhs where the balance of Rs. 13,59,500/- paid towards the registration charges has been demonstrated by the Ld. AR. We therefore partly allow the ground raised by the Revenue on this issue.” 6 6. From the above, we make it clear that while adjudicating the Ground No.3 raised by the Revenue in its appeal (supra), the Tribunal has perused all the material available before the Bench and considered the rival submissions as well as the orders of the Ld. Revenue Authorities on the matter. Therefore, in our considered opinion the queries raised by the assessee in his MA are already answered by the Tribunal vide paras 7 & 8 of its order dated 17/3/2023 (supra) and therefore there is no mistake apparent from the record in the order of the Tribunal (supra). Hence, the Miscellaneous Application filed by the assessee is devoid of merits and thereby dismissed. 7. In the result, Miscellaneous Application filed by the assessee is dismissed. Pronounced in the open Court on 22 nd December, 2023. Sd/- Sd/- (दुåवूǽ आर.एल रेɬडी) (एस बालाकृçणन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) ÛयाǓयकसदèय/JUDICIAL MEMBER लेखा सदèय/ACCOUNTANT MEMBER Dated :22/12/2023. OKK - SPS 7 आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the order forwarded to:- 1. Ǔनधा[ǐरती/ The Assessee – Sri Mutchakarla Appa Rao, Flat No.B/1A, D.No. 15-1-74, Sea Doll Apartment, Opp. Grant Bay Hotel, Visakhapatnam, Andhra Pradesh – 530003. 2. राजèव/The Revenue – Income Tax Officer, Ward-3(2), 1 st Floor, Infinity Towers, Sankara Matham Road, Visakhapatnam, Andhra Pradesh – 530016. 3. The Principal Commissioner of Income Tax-1, Visakhapatnam. 4. आयकर आयुÈत (अपील)/ The Commissioner of Income Tax (Appeals)-2, Guntur. 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, ͪवशाखापटणम/ DR, ITAT, Visakhapatnam 6. गाड[ फ़ाईल / Guard file आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam