ITO, Ward-1(2), Hyd, Hyderabad v. Ch. Srinivasulu Reddy, Hyd, Hyderabad

CO 66/HYD/2015 | 2008-2009
Pronouncement Date: 28-09-2016

Appeal Details

RSA Number 6622523 RSA 2015
Assessee PAN AATPC3959K
Bench Hyderabad
Appeal Number CO 66/HYD/2015
Duration Of Justice 10 month(s) 11 day(s)
Appellant ITO, Ward-1(2), Hyd, Hyderabad
Respondent Ch. Srinivasulu Reddy, Hyd, Hyderabad
Appeal Type Cross Objection
Pronouncement Date 28-09-2016
Appeal Filed By Assessee
Bench Allotted DB-B
Tribunal Order Date 28-09-2016
Date Of Final Hearing 17-05-2016
Next Hearing Date 17-05-2016
Assessment Year 2008-2009
Appeal Filed On 16-11-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B HYDERABAD BEFORE SMT. P. MADHAVI DEVI JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER I.T.A. NOS. 1386 & 1387/HYD/2013 ASSESSMENT YEARS: 2007-08 & 2008-09 INCOME TAX OFFICER WARD-1(4) HYDERABAD VS SRI SRINIVASULU REDDY CHENNAREDDY HYDERABAD [PAN: AATPC3959K] (APPELLANT) (RESPONDENT) C.O. NOS. 65 & 66/HYD/2015 (IN ITA NOS. 1386 & 1387/HYD/2013) ASSESSMENT YEAR: 2007-08 & 2008-09 SRI SRINIVASULU REDDY CHENNAREDDY HYDERABAD [PAN: AATPC3959K] VS INCOME TAX OFFICER WARD-1(2) HYDERABAD (CROSS-OBJECTOR) (RESPONDENT) FOR REVENUE : SHRI K. J. RAO DR FOR ASSESSEE : SHRI K.C. DEVDAS AR DATE OF HEARING : 15-09-2016 DATE OF PRONOUNCEMENT : 28-09-2016 O R D E R PER B. RAMAKOTAIAH A.M. : THESE APPEALS ARE BY REVENUE AND CROSS-OBJECTIONS AR E BY ASSESSEE AGAINST THE ORDERS OF THE LD. COMMISSIONER O F INCOME TAX (APPEALS)-II HYDERABAD DATED 27-08-2013 FOR AYS. 2 007-08 & 2008-09 ON THE ISSUE OF LEVY OF PENALTY U/S. 271D FO R VIOLATION OF I.T.A. NOS. 1386 & 1387/HYD/13 C.O. NOS. 65 & 66/HYD/15 :- 2 -: THE PROVISIONS OF SECTION 269SS OF THE INCOME TAX ACT [ACT]. ISSUES BEING SIMILAR IN BOTH THE YEARS THESE ARE CONSIDERED TOGETHER. 2. BRIEFLY STATED FACTS FOR AY. 2007-08 AS STATED IN LD . CIT(A) ORDER IN PAGE 3 ARE AS UNDER: A) THE ASSESSEE FILED HIS RETURN OF INCOME OF RS. 2 46 940/- ALONGWITH AGRICULTURAL INCOME OF RS. 83 600/- FOR THE AY. 200 7-08. B) THE ORDER U/S. 143(3) DATED 05.08.2009 WAS PASSED A CCEPTING THE INCOME RETURNED. C) THE PENALTY NOTICE U/S. 271D WAS ISSUED ON 27.09.20 11 ASKING THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY SHOULD NOT BE LEVIED FOR RECEIVING THE LOANS IN CASH EXCEEDING RS. 20 000/- IN VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT. D) IN THE MEANTIME THE CIT-I PASSED ORDER U/S. 263 DAT ED 19.03.2012 DIRECTING THE ASSESSING OFFICER TO VERIFY THE GENUI NENESS OF THE CASH CREDITS INTRODUCED IN THE BOOKS OF THE ASSESSEE AND THE ASSESSMENT ORDER WAS SET ASIDE. E) PENALTY ORDER U/S. 271D WAS PASSED ON 31.03.2012 LE VYING PENALTY OF RS. 13 65 000/-. F) ORDER U/S. 143(3) R.W.S. 263 WAS PASSED ON 11.01.20 13 BY HOLDING THE CASH CREDITS OF RS. 14 40 000/- WAS UNEXPLAINED CASH CREDIT U/S. 68 OF THE I.T. ACT. PENALTY PROCEEDINGS U/S. 271(1)(C) WERE ALSO INITIATED. G) IT IS PERTINENT TO MENTION THAT AS ON DATE THE ORDE R U/S. 263 DATED 19.03.2012 IS PENDING BEFORE THE HON'BLE ITAT ANDH RA PRADESH. 3. LD. CIT(A) AFTER CONSIDERING THE GROUNDS HAS FINAL LY ALLOWED THE ASSESSEES APPEAL BY STATING AS UNDER: 12. THE EIGHTH AND NINTH GROUNDS OF APPEAL ARE THA T SINCE THE CIT HAD PASSED ORDER U/S. 263 SETTING ASIDE THE ORIGINAL ASSESSMENT AS ON THE DATE OF PASSING PENALTY U/S. 2 71D THERE WAS NO CONCLUSION WITH REGARD TO THE CASH DEPOSITS. IN THE ABSENCE OF SUCH CONCLUSION NO PENALTY CAN BE LEVIED. I.T.A. NOS. 1386 & 1387/HYD/13 C.O. NOS. 65 & 66/HYD/15 :- 3 -: 12.1. IT IS TO BE MENTIONED HERE THAT IN SET ASIDE ASSESSMENT PROCEEDINGS U/S. 143(3) R.W.S. 263 DATED 11.01.2013 THE CASH LOANS OF RS. 14 40 000/- WERE TREATED AS UNEXPLAINED CASH CREDITS U/S. 68 AND ADDED TO THE INCOME RETURNED. 12.2. NOW THE MOOT POINT IS IF THE CASH LOANS ARE TREATED AS INCOME OF THE APPELLANT AND ARE TAXED IN HIS HANDS NOW THE PENALTY PROCEEDINGS U/S. 271D CAN BE LEVIED ON THE GROUND T HAT THE LOANS WERE RECEIVED IN CASH FROM THE THIRD PERSON. THE M OMENT SUCH CASH CREDITS ARE ASSESSED IN THE HANDS OF THE ASSESSEE A S HIS INCOME NO PENALTY U/S. 271D CAN BE INITIATED AS HELD IN THE F OLLOWING CASE LAWS: (A) DIWAN ENTERPRISES VS. CIT (2000) 246 ITR 571 (DEL) ; (B) CIT VS. STANDARD BRANDS LTD (2006) 204 CTR (DEL) 4 8; SINCE THE DEPARTMENT STAND IS THAT THE CASH LOANS W ERE APPELLANTS OWN INCOME AND ARE TAXED IN HIS HANDS P ENALTY LEVIED U/S. 271D IS DELETED. 4. AGGRIEVED REVENUE HAS RAISED THE FOLLOWING GROUN DS: 1. THE ORDER OF THE CIT(A) IS ERRONEOUS IN LAW AND ON FACTS OF THE CASE. 2. THE CIT(A) ERRED IN DELETING THE PENALTY U/S. 27 1D OF THE I.T. ACT. 3. THE CIT(A) OUGHT TO HAVE CONSIDERED THE FACT THA T THE ASSESSEES APPEAL IS PENDING BEFORE THE ITAT AND HAS NOT REACH ED ITS FINALITY. 4. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O F HEARING. 5. LD. DR SUBMITTED THAT THE ORDER OF CIT U/S. 263 HAS B EEN SET ASIDE BY ITAT THEREFORE LD. CIT(A) SHOULD HAVE CONS IDERED THE PENALTY ON MERITS AND SHOULD NOT HAVE DELETED. 6. LD. COUNSEL SUBMITTED THAT ASSESSEE HAS PREFERRED CR OSS- OBJECTIONS AS THE GENUINENESS OF THE CREDITORS HAS NOT B EEN ADJUDICATED. HE RELIED ON THE CO-ORDINATE BENCH DECI SION IN THE CASE OF M.S. LOKAIAH IN ITA NO. 1272/HYD/2015 DT. 03 -08-2016 I.T.A. NOS. 1386 & 1387/HYD/13 C.O. NOS. 65 & 66/HYD/15 :- 4 -: AND JUDGEMENT OF THE HON'BLE ALLAHABAD HIGH COURT IN TH E CASE OF CIT VS. DIMPLE YADAV IN ITA NO. 174 OF 2015 DT. 21-0 8-2015. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE DOCUMENTS PLACED ON RECORD. LD.CIT(A) HAS NOT EXAMIN ED THE CONTENTIONS OF ASSESSEE AS THE RELIEF WAS GIVEN ON THE REASON THAT THE CREDITS WERE TREATED AS INCOME IN THE CONSEQUENTI AL PROCEEDINGS AFTER THE ORDER U/S. 143(3) WAS SET ASIDE U/S. 263. NOW THAT THE ORIGINAL ORDER U/S. 143(3) IS RESTORED TH E CREDITS ARE NO LONGER TREATED AS INCOME OF ASSESSEE. THE CONTE NTIONS OF ASSESSEE ARE TO BE EXAMINED IN THE LIGHT OF PROVISIONS OF SECTION 271D R.W.S. 269SS AND CASE LAW ON THE ISSUE. THERE FORE ALLOWING THE GROUNDS OF REVENUE WE RESTORE THE APPEAL OF ASSES SEE BEFORE LD.CIT(A) TO BE ADJUDICATED AFRESH ON MERITS. THE ORD ER OF LD.CIT(A) IS ACCORDINGLY SET ASIDE AND APPEAL IS RES TORED TO THE FILE OF LD.CIT(A). 8. FACTS IN AY. 2008-09 ARE SIMILAR EXCEPT THE AMOUNTS INVOLVED. THEREFORE FOR THE REASONS STATED ABOVE IN PARA 7 THE ORDER OF LD.CIT(A) IN AY. 2008-09 IS ALSO SET ASIDE AND THE APPEAL BEFORE LD.CIT(A) IS RESTORED FOR FRESH ADJUDICATION. 9. CROSS-OBJECTIONS OF ASSESSEE ARE FILED WITH A DEL AY OF 630 (SIX HUNDRED AND THIRTY) DAYS ACCOMPANIED BY AN AFFIDAVI T AND PRAYER FOR CONDONATION OF DELAY. SINCE THE REVENUE APPEALS ARE ALLOWED THERE IS NO NEED TO ADJUDICATE THE CONTENTIONS RAISED IN CROSS- OBJECTIONS. ASSESSEE IS FREE TO RAISE THE CONTENTIONS BEFORE THE LD. CIT(A) WHO SHOULD CONSIDER THE FACTS AND LAW ON THE I SSUE WHILE I.T.A. NOS. 1386 & 1387/HYD/13 C.O. NOS. 65 & 66/HYD/15 :- 5 -: ADJUDICATING THESE APPEALS AFRESH. CROSS-OBJECTIONS ARE TREATED AS ACADEMIC IN NATURE. 10. IN THE RESULT BOTH THE REVENUE APPEALS ARE ALLOWE D FOR STATISTICAL PURPOSES AND CROSS-OBJECTIONS RAISED BY AS SESSEE ARE TREATED AS DISMISSED BEING ACADEMIC IN NATURE. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH SEPTEMBER 2016 SD/- SD/- (P. MADHAVI DEVI) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMB ER HYDERABAD DATED 28 TH SEPTEMBER 2016 TNMM COPY TO : 1. THE INCOME TAX OFFICER WARD-1(4) HYDERABAD. 2. THE INCOME TAX OFFICER WARD-1(2) HYDERABAD. 3. SRI SRINIVASULU REDDY CHENNAREDDY PLOT NO. 24 SUNDAR NAGAR COLONY OPP: ERRGADDA RYTHU BAZAR HYDERABAD. 4. CIT(APPEALS)-II HYDERABAD. 5. CIT-I HYDERABAD. 6. D.R. ITAT HYDERABAD. 7. GUARD FILE.