Sri P Ramaswamy, Hyderabad v. ITO,Ward-8(2),, Hyderabad

ITA 1124/HYD/2014 | 2008-2009
Pronouncement Date: 07-11-2014 | Result: Partly Allowed

Appeal Details

RSA Number 112422514 RSA 2014
Assessee PAN AETPP6856L
Bench Hyderabad
Appeal Number ITA 1124/HYD/2014
Duration Of Justice 5 month(s) 2 day(s)
Appellant Sri P Ramaswamy, Hyderabad
Respondent ITO,Ward-8(2),, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 07-11-2014
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 07-11-2014
Assessment Year 2008-2009
Appeal Filed On 04-06-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN JUDICIAL MEMBER ITA. NO. 1124/HYD/2014 ASSESSMENT YEAR 2008-2009 SRI P. RAMASWAMY SHAMSHABAD R.R. DIST. PAN AETPP6856L VS. THE INCOME TAX OFFICER WARD 8(2) HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. K.A. SAI PRASAD FOR REVENUE : MR. RAJAT MITRA DATE OF HEARING : 09.10.2014 DATE OF PRONOUNCEMENT : 07.11.2014 ORDER PER B. RAMAKOTAIAH A.M. THIS IS AN ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A) VIJAYAWADA DATED 06.03.2014 FOR THE ASS ESSMENT YEAR 2008-09. 2. ASSESSEE IS AN INDIVIDUAL AND IS PARTNER IN THR EE FIRMS VIZ. M/S. RAMASWAMY & SONS M/S. RAMA ENTERP RISES AND M/S. SRI RAMA GARDENS. THERE WERE SURVEY OPERAT IONS CONDUCTED IN THE BUSINESS PREMISES OF ASSESSEES FI RMS ON 21.02.2008. IN THE CONSEQUENTIAL SCRUTINY PROCEEDIN GS A.O. EXAMINED VARIOUS ISSUES AND MADE ADDITIONS OF ABOUT NINE ITEMS AND DETERMINED THE TOTAL INCOME AT RS.1 50 21 308 AS AGAINST RS.3 10 920 ADMITTED BY ASSESSEE. AMONGST V ARIOUS ADDITIONS MADE BY A.O. AFTER CONSIDERING THE SUBMIS SIONS OF ASSESSEE LD. CIT(A) DELETED MOST OF THEM WHILE CON FIRMING 2 ITA.NO.1124/HYD/2014 MR. P. RAMASWAMY SHAMSHABAD R.R. DIST. SOME. ASSESSEE IS AGGRIEVED ON THREE SUCH ISSUES IN THE PRESENT APPEAL. 3. WE HAVE HEARD THE LD. COUNSEL AND LEARNED D.R. IN THIS REGARD AND THE CONTENTIONS ARE DECIDED ISSU E-WISE. GROUNDS NO. 1 AND 5 ARE GENERAL IN NATURE AND HENCE DOES NOT REQUIRE ADJUDICATION. 4. GROUND NO.2 IS WITH REFERENCE TO ADDITION OF RS.3 52 315 MADE BY A.O. TOWARDS CASH FOUND AT THE TIME OF SURVEY. IN THE COURSE OF SURVEY THE ABOVE AMOUNT W AS IDENTIFIED AND ASSESSEE WAS ASKED TO EXPLAIN THE SO URCE OF THE ABOVE AMOUNT. ASSESSEE PREPARED A STATEMENT OF RECE IPTS AND PAYMENTS FOR THE PERIOD AND EXPLAINED IT BY DRAWING A BALANCE SHEET. A.O. DID NOT AGREE WITH THE EXPLANATION GIVE N BY ASSESSEE THAT THE SOURCE OF FUNDS ARE FROM BANK WIT HDRAWALS AND WITHDRAWALS FROM THE FIRMS AND WAS HOLDING WITH HIM FOR THE PURPOSE OF SONS MARRIAGE. A.O. MADE THE ABOVE ADDITION AS UNEXPLAINED CASH AVAILABLE WITH ASSESSEE ON THE DAT E OF SURVEY. 5. BEFORE THE LD. CIT(A) ASSESSEE EXPLAINED THAT THE SOURCE OF FUNDS ARE WITHDRAWALS FROM FIRM AND BANK WITHDRAWALS AND TOOK SUPPORT FROM STATEMENTS PREPAR ED IN THE FORM OF INCOME EXPENDITURE STATEMENT. A.O. REPORT ED THAT THE CLAIM OF FUNDS HAVE BEEN DRAWN FROM BANK ACCOUNTS A ND FROM THE FIRMS AND WERE KEPT FOR HIS SONS MARRIAGE COUL D NOT BE SUBSTANTIATED BY ASSESSEE AS HE HAS NEITHER PRODUC ED THE COPIES OF BANK ACCOUNTS NOR THE ACCOUNTS OF THE FIR M TO SUPPORT THE CONTENTION. IN THE ABSENCE OF DETAILS THE ARGUMENT OF ASSESSEE WAS NOT BELIEVABLE AND THEREFORE ADDIT ION WAS CONFIRMED. 3 ITA.NO.1124/HYD/2014 MR. P. RAMASWAMY SHAMSHABAD R.R. DIST. 6. LD. COUNSEL REITERATED THE SUBMISSIONS WHEREAS LEARNED D.R. POINTED OUT THAT THE CONTENTIONS WERE UNSUBSTANTIATED. THERE IS NO DISPUTE THAT THE AMOUN T BELONGS TO ASSESSEE AND WAS FOUND IN THE COURSE OF SURVEY. IT WAS THE CONTENTION OF ASSESSEE THAT THE SOURCES ARE WITHDRA WALS FROM BANK ACCOUNTS AND FIRMS ACCOUNTS BUT NO SUCH EVIDE NCE WAS FURNISHED EITHER BEFORE A.O. OR BEFORE APPELLATE AU THORITY. EVEN BEFORE US EXCEPT MAKING THE ARGUMENTS NO EVIDENCE HAS BEEN FURNISHED. IN THE ABSENCE OF ANY SUPPORTING CONTENT IONS WE ARE OF THE OPINION THAT THE AUTHORITIES ARE JUSTIFI ED IN CONFIRMING THE ADDITION. ACCORDINGLY GROUND NO.2 R AISED BY ASSESSEE IS DISMISSED. 7. GROUND NO.3 PERTAINS TO SUSTAINING THE ADDITION OF RS.2 50 000 MADE BY A.O. TOWARDS UNEXPLAINED WITHDR AWALS WHICH ARE NOT SUBSTANTIATED. 8. BRIEFLY STATED THE FACTS ARE THAT IN INCOME AN D EXPENDITURE STATEMENT PREPARED BY ASSESSEE IT WAS SHOWN THAT AN AMOUNT OF RS.11 50 000 WAS STATED TO HAVE B EEN WITHDRAWN FROM FIRMS ACCOUNTS SUCH AS SRI RAMA GAR DEN RS. 9 LAKHS M/S. RAMASWAMY & SONS RS. 1 LAKH AND M/S. SREE RAMA ENTERPRISES RS.1 50 000. SINCE NO EVIDENCE OF WITHDRAWALS FROM THE FIRMS WERE FILED A.O. TREATED THE AMOUNT AS UNEXPLAINED CREDITS UNDER SECTION 68 AND ADDED T O THE INCOME OF ASSESSEE. BEFORE THE LD. CIT(A) ASSESSEE ARGUED THAT THESE AMOUNTS ARE WITHDRAWALS FROM THE ABOVE MENTIO NED FIRMS. WHEN THE MATTER WAS REMITTED TO A.O. FOR VER IFICATION HE REPORTED THAT ONLY AN AMOUNT OF RS. 9 LAKHS WITHDRA WN FROM M/S. SRI RAMA GARMENTS IS FOUND TO BE EVIDENCED AT PAGE 45 OF PAPER BOOK AND THERE IS NO EVIDENCE FOR OTHER TW O AMOUNTS. LD. CIT(A) DELETED THE AMOUNT OF RS. 9 LAKHS WHILE CONFIRMING 4 ITA.NO.1124/HYD/2014 MR. P. RAMASWAMY SHAMSHABAD R.R. DIST. THE AMOUNT OF RS.2 50 000. BEFORE US ALSO ASSESSEE COULD NOT SUBSTANTIATE BY WAY OF ANY CONFIRMATION OR ACCOUNT COPIES OF THE SO-CALLED WITHDRAWALS FROM THE FIRMS. BY A SEPA RATE ORDER WE HAVE ALSO DEALT WITH THE APPEAL IN THE CASE OF M /S. RAMASWAMY & SONS WHICH IS SUPPOSED TO HAVE BEEN ADV ANCED RS. 1 LAKH TO ASSESSEE. IN THAT CASE THERE ARE NO BOOKS OF ACCOUNTS AND ASSESSMENTS HAVE BEEN COMPLETED ON EST IMATION BASIS AS THAT ASSESSEE HAS NOT EVEN FILED RETURN. I N THE ABSENCE OF ANY EVIDENCE WITH REFERENCE TO CONFIRMATION OF A MOUNTS RECEIVED AS CREDITS THE AMOUNT OF RS.2 50 000 WAS RIGHTLY CONFIRMED BY LD. CIT(A). WE SEE NO REASON TO INTERF ERE WITH THE ORDER. ACCORDINGLY GROUND NO.3 IS DISMISSED. 9. GROUND NO.4 PERTAINS TO CLAIM OF EXEMPTION UNDE R SECTION 10(37) AS AN ADDITIONAL GROUND RAISED BEFOR E LD. CIT(A). ASSESSEE FILED RETURN ADMITTING CAPITAL GAINS ON SA LE OF AGRICULTURAL LANDS AND CLAIMED EXEMPTION UNDER SECT ION 54F ON A PROPERTY SUPPOSED TO HAVE BEEN CONSTRUCTED IN MADHAPUR. IN THE COURSE OF ASSESSMENT PROCEEDINGS A.O. OBJECTED TO THE CLAIM OF DEDUCTION UNDER SECTION 54 F ON THE REASON THAT ASSESSEE HAD TWO HOUSES SO DEDUCTION UNDER SECTION 54F IS NOT ELIGIBLE. IN THE COURSE OF APPEA L PROCEEDINGS ASSESSEE WHILE FILING THE ADDITIONAL GROUND THAT TH E AMOUNT OF CAPITAL GAIN IS NOT TAXABLE ON THE REASON OF COMPUL SORY ACQUISITION BY GOVERNMENT UNDER SECTION 10(37) ALS O MADE ALTERNATE CLAIM OF CLAIMING UNDER 54F IN ANOTHER PR OPERTY PURCHASED WITHIN ONE YEAR FROM THE DATE OF TRANSFER . LD. CIT(A) WHILE DISMISSING THE ADDITIONAL GROUND RAISED ON TH E REASON THAT THE CLAIM WAS NOT MADE AT THE TIME OF ASSESSME NT HOWEVER ALLOWED THE ALTERNATE CLAIM OF ANOTHER PRO PERTY OF EXEMPTION UNDER SECTION 54. ASSESSEE HAS RAISED GRO UND AS A 5 ITA.NO.1124/HYD/2014 MR. P. RAMASWAMY SHAMSHABAD R.R. DIST. REGULAR GROUND BEFORE US AS THE ADDITIONAL GROUND R AISED BEFORE LD. CIT(A) WAS DISMISSED. 10. REFERRING TO THE PRINCIPLES LAID DOWN BY HONB LE GUJARAT HIGH COURT IN THE CASE OF S.R. KOSHTI VS. C IT 276 ITR 165 IT WAS THE SUBMISSION OF LD. COUNSEL THAT TAX CAN BE COLLECTED ONLY AS PER STATUTORY PROVISIONS. SINCE A SSESSEE WRONGLY OFFERED CAPITAL GAINS ON SALE OF AGRICULTUR AL LAND WHICH WAS COMPULSORILY ACQUIRED BY HYDERABAD URBAN DEVELO PMENT AUTHORITY (HUDA) FOR THE PURPOSE OF OUTER-RING RO AD THE SAME IS NOT TAXABLE UNDER THE PROVISIONS OF SECTION 10(37). IT WAS SUBMITTED THAT COORDINATE BENCH IN THE CASE OF MIRZA ZALEEL AHMED AND OTHERS IN ITA.944/H/2011 AND OTHER S DATED 31.05.2012 THAT ASSESSEE WAS NOT PRECLUDED FROM RAI SING LEGAL ISSUE WHICH GOES TO THE ROOT OF THE MATTER. LD. COU NSEL ALSO RELIED ON THE PRINCIPLES LAID DOWN BY HONBLE HIGH COURT OF GAUHATI IN THE CASE OF ASSAM ROOFING LTD. VS. CIT 43 TAXMAN.COM 316 (GAU.) FOR THE PROPOSITION THAT ASSE SSEE CAN SEEK BENEFIT OUT OF ANY REMEDIES AVAILABLE TO ASSES SEE UNDER THE ACT IN ORDER TO DEAL WITH THE GRIEVANCE ARISING AFTER THE ORDERS OF A.O. LEARNED D.R. HOWEVER SUBMITTED THAT LD. CIT(A) RIGHTLY REJECTED THE GROUND. 11. BEFORE ADJUDICATING THE GROUND IT IS NECESSAR Y TO EXAMINE THE PROVISIONS OF SECTION 10(37) WHICH ARE AS UNDER : INCOMES NOT INCLUDED IN TOTAL INCOME. 10. IN COMPUTING THE TOTAL INCOME OF A PREVIOUS YE AR OF ANY PERSON ANY INCOME FALLING WITHIN ANY OF THE FO LLOWING CLAUSES SHALL NOT BE INCLUDED.. (1).. 6 ITA.NO.1124/HYD/2014 MR. P. RAMASWAMY SHAMSHABAD R.R. DIST. (37) IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUA L OR A HINDU UNDIVIDED FAMILY ANY INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS ARISING FROM THE TRANSFER OF AGRICULTURAL LAND WHERE (I) SUCH LAND IS SITUATE IN ANY AREA REFERRED TO IN ITEM (A) OR ITEM (B) OF SUB-CLAUSE (III) OF CLAUSE (14) OF S ECTION2; (II) SUCH LAND DURING THE PERIOD OF TWO YEARS IMMEDIATELY PRECEDING THE DATE OF TRANSFER WAS BEING USED FOR AGRICULTURAL PURPOSES BY SUCH HINDU UNDIVIDED FAMILY OR INDIVIDUAL OR A PARENT OF HIS; (III) SUCH TRANSFER IS BY WAY OF COMPULSORY ACQUI SITION UNDER ANY LAW OR A TRANSFER THE CONSIDERATION FOR WHICH IS DETERMINED OR APPROVED BY THE CENTRAL GOVERNMENT OR THE RESERVE BANK OF INDIA; (IV) SUCH INCOME HAS ARISEN FROM THE COMPENSATIO N OR CONSIDERATION FOR SUCH TRANSFER RECEIVED BY SUCH ASSESSEE ON OR AFTER THE 1ST DAY OF APRIL 2004. EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE THE EXPRESSION 'COMPENSATION OR CONSIDERATION' INCLUDES THE COMPENSATION OR CONSIDERATION ENHANCED OR FURTHER ENHANCED BY ANY COURT TRIBUNAL OR OTHER AUTHORITY; 12. AS CAN BE SEEN FROM THE ABOVE PROVISION THE CAPITAL GAINS IS EXEMPT IN THE CASE OF ASSESSEE BEI NG AN INDIVIDUAL ARISING FROM THE TRANSFER OF AGRICULTUR AL LAND WHERE SUCH TRANSFER IS BY WAY OF COMPULSORY ACQUISITION UNDER ANY LAW AS PER SEC. {10(37)(III)}. AGRICULTURAL LAND I S DEFINED UNDER SECTION 2(14) (III) OF IT ACT AS NOT BEING LAND SIT UATED IN ANY AREA WHICH COMPRISES WITHIN THE JURISDICTION OF MU NICIPALITY CANTONMENT BOARD OR AN AREA WITHIN SUCH DISTANCE NO T BEING MORE THAN 8 KM FROM THE LOCAL LIMITS OF MUNICIPALIT Y OR CANTONMENT AS NOTIFIED AND OTHER CONDITIONS ARE SPE CIFIED. THERE IS NOTHING ON RECORD TO INDICATE THAT THE LAN D WHICH IS ACQUIRED BY HUDA AS STATED BY ASSESSEE WAS AGRICUL TURAL 7 ITA.NO.1124/HYD/2014 MR. P. RAMASWAMY SHAMSHABAD R.R. DIST. LAND UNDER THE DEFINITION OF THE I.T. ACT EVEN TH OUGH THE LAND MAY BE USED FOR AGRICULTURAL PURPOSES. SINCE ASSES SEE HIMSELF OFFERED THE CAPITAL GAIN. A.O. HAD NO OCCASION TO E XAMINE THIS ISSUE WHETHER THE LAND IN QUESTION IS EXIGIBLE TO CAPITAL GAINS OR NOT. BEFORE THE LD. CIT(A) WHEN ASSESSEE HAS RAI SED AS AN ADDITIONAL GROUND HE SHOULD HAVE EXAMINED THE FACT S REQUIRED AND SHOULD HAVE ADJUDICATED THE SAME ON LEGAL PRINC IPLES AS IT GOES TO THE ROOT OF THE MATTER WHETHER CAPITAL GAIN S CAN BE OFFERED OR NOT. SINCE THE LD. CIT(A) REJECTED WITHO UT ADJUDICATING THE SAME/EXAMINING THE SAME WE ARE OF THE OPINION THAT ASSESSEE SHOULD BE GIVEN AN OPPORTUNIT Y TO EXPLAIN WHETHER THE CAPITAL GAINS OFFERED IN THE RE TURN OF INCOME IS CORRECT OR NOT. THEREFORE IN THE INTERES T OF JUSTICE WE ARE OF THE OPINION THAT THIS MATTER IS TO BE RE- EXAMINED BY A.O. AFTER OBTAINING NECESSARY INFORMATION/EVIDENCE OR FACTS FOR ESTABLISHING THAT THE LAND IN QUESTION IS AGRI CULTURAL LAND AS PER THE DEFINITION OF THE I.T. ACT AND THE SAME IS COMPULSORILY ACQUIRED BY HUDA AND PROVISIONS OF SEC TION 10(37) ARE APPLICABLE. ASSESSEE IS DIRECTED TO FILE NECESSARY EVIDENCE BEFORE A.O. IN ORDER TO EXAMINE THE ISSUE. WITH THESE OBSERVATIONS GROUND IS CONSIDERED ALLOWED FOR STAT ISTICAL PURPOSES. 13. IN THE RESULT APPEAL OF ASSESSEE IS PARTLY AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07.11.2014. SD/- SD/- (ASHA VIJAYARAGHAVAN) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD DATED 07 TH NOVEMBER 2015. VBP/- 8 ITA.NO.1124/HYD/2014 MR. P. RAMASWAMY SHAMSHABAD R.R. DIST. COPY TO 1. SRI P. RAMASWAMY C/O. CH. PARTHASARATHY & CO. 1-1- 298/2/B/3 1 ST FLOOR SOWBHAGYA AVENUE STREET NO.1 ASHOKNAGAR HYDERABAD 500 020. 2. THE INCOME TAX OFFICER WARD 8(2) HYDERABAD. 3. COMMISSIONER OF INCOME TAX (APPEALS)-III HYDERA BAD. 4. COMMISSIONER OF INCOME TAX-II HYDERABAD. 5. D.R. ITAT B BENCH HYDERABAD