Income Tax Officer,, Hyderabad v. Shri Syed Adeeluddin,, Hyderabad

ITA 1190/HYD/2013 | 2007-2008
Pronouncement Date: 31-07-2014 | Result: Dismissed

Appeal Details

RSA Number 119022514 RSA 2013
Assessee PAN AYFPS9511H
Bench Hyderabad
Appeal Number ITA 1190/HYD/2013
Duration Of Justice 11 month(s) 25 day(s)
Appellant Income Tax Officer,, Hyderabad
Respondent Shri Syed Adeeluddin,, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 31-07-2014
Assessment Year 2007-2008
Appeal Filed On 06-08-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B' HYDERABAD BEFORE SHRI B.RAMAKOTAIAH ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN JUDICIAL MEMBER ITA NO.1190/HYD/13 : ASSESSMENT YEAR 2007 - 08 INCOME TAX OFFICER WARD 7(1) HYDERABAD V/S. SHRI SYED ADEELUDDIN HYDERABAD ( PAN - AYFPS 9511 H) (APPELLANT) (RESPONDENT) ITA NO.1209/HYD/13 : ASSESSMENT YEAR 2007 - 08 SHRI SYED ADEELUDDIN HYDERABAD ( PAN - AYFPS 9511 H) V/S. INCOME TAX OFFICER WARD 7(1) HYDERABAD (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SOLGY JOSE T.KOTTARAM DR ASSESSEE BY : NONE DATE OF HEARING 24 .0 7 .2014 DATE OF PRONOUNCEMENT 31.07.2014 O R D E R PER SMT. ASHA VIJAYARAGHAVAN JUDICIAL MEMBER: THESE ARE CROSS APPEALS FOR THE ASSESSMENT YEAR 2007 - 08 AND THEY ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX(APPEALS) VI HYDERABAD DATED 13.5.2013. SINCE ONLY A COMMON IS SUE IS INVOLVED THESE APPEALS ARE BEING DISPOSED OF WITH THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ONLY ISSUE INVOLVED IN THESE APPEALS RELATES TO THE ADDITION MADE BY THE ASSESSING OFFICER UNDER S.69 OF THE ACT ON ACCOUNT OF UN E XPLAIN E D I NVESTMENT PART OF WHICH WA S DELETED BY THE CIT(A). ITA NO. 1 190 & 1 209 /HYD/201 3 SHRI SYED ADEELUDDIN HYDERABAD 2 3. FATS OF THE CA S E IN B R IEF ARE THAT THE ASSESSEE IS A PARTNER IN M /S. VISTAS CON S TRUCTION S AND M /S. NEW VISTAS CON S TRUCTION S . ASSESSEE IS ALSO SHOWN TO BE AN ELE C TRIC CONTRACTOR. DURIN G TH E YEAR UNDER CON S I D ERATION ASSESSEE WAS SHOWN TO HAVE INVESTED AN AMOUNT O F R S .21 50 000 AS CAPITAL IN M /S.VISTAS CON S TRUCTIONS. ON EXAMINATION THE SOU R CES FOR SUCH INVESTMENTS WERE CLAIMED TO BE OUT OF LOANS TO THE E X TENT OF R S .15 00 000 ( FROM THE ASSE SSEES MOTHER MRS.NA DEERA ANEES (RS. 5 00 000) AND FROM A DISTANT RELATIVE BY NAME MRS.TAHERA FATIMA(RS.10 00 000) ) FOR WHICH CONFIRMATION LETTERS WERE FURNISHED. BALANCE AMOU N T OF R S .6 50 000 W AS SHOWN TO BE OUT O F THE CONTRACT RECEIPTS OF RS .5 00 000 RECEIVED BY THE ASSESSEE DURING THE YEAR AND PAID OUT OF THE BALAN C ES LYING IN THE BANK. THE ASSESSING OFFICER TREATED THE SAID CONTRIBUTION OF TH E CAPITAL AS UNE X PLAIN E D INVESTMENT ON TH E G R OUND THAT THE EXPLANATION OF THE ASSESSEE THAT THE SAID AMOUNT S ARE OUT OF LOANS OBTAINED NO OTHER INFORMATION EXCEPT FOR CONFIRMATION WAS FILED. NOTHING IS FURNISHED SPECIFICALLY W ITH REGARD TO THE CREDITWORTHINESS O F T H E LOAN CREDITORS LIKE I T ASSESSMENT DE T AILS ETC. WERE FURNISHED. THE SOU R CE FOR RS.6 50 000 STATED TO B E OUT OF OWN FUNDS WITH SPECIF IC REFERENCE TO THE CONTRACT RECEIPTS OF THE ASSESSEE WAS DISBELIEVED BY THE ASSESSING OFFICER SINCE THE D ETAILS OF CONTRACTS WERE NO T FURNISHED. CON S I D ERING THIS AND THE FACT THAT THE YEAR UNDER CONSIDERATION IS THE FIRST Y E AR OF CONTRACT THE ASSESSING OFFICER CONCLUDED THAT WITH MEAGER SOU RC ES OF OTHER INCOMES INCLUDING AGRICULTURAL INCOME I T IS DIFFICULT TO ASSUME THAT SUCH INVESTMENTS EMANATED FROM THE SOU R CES EXPLAIN E D. THE ASSESSING OFFICER ACCORDINGLY DISB E LI E VING THE VERSION O F TH E ASSESSEE MADE AN ADDITION OF R S .21 50 000 TOWARDS UNEXPLAINED INVESTMENT WHILE COMPLETING T H E ASSESSMENT ON A TOTAL INCOME OF R S .22 84 600 AS AGAINST ADMITTED INCOME OF RS .1 12 100 VIDE ORDER OF ASSESSMENT DATED 30.12. 2011 PASSED UNDER S.143(3) READ WITH S.147 OF THE ACT. 4. AGGRI E VED ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) AND IN THE COURSE OF APPELLATE P R OCEEDIN G S FURNISHED CONFIRMATION FROM THE LOAN CREDITORS ITA NO. 1 190 & 1 209 /HYD/201 3 SHRI SYED ADEELUDDIN HYDERABAD 3 ALONGWITH THEIR BANK ACCOUNT EXTRACTS AND SUB MITTED THAT IDENTITY OF THE PARTIES HAVING BEEN ESTABLISHED ALONGWITH TH E GENUINENESS O F THE TRANSACTIONS THERE IS NO REASON FOR MAKING THE ADDITION ON TH E GROUND OF IN S UFFICIENT INFORMATION AS REGARDS THE CREDIT W ORTH I NESS AND OTHER RELATED ASPECTS OF T HE CREDITORS. SINCE THE INFORMATION FURNISHED BEFORE HIM CONSTITUTED ADDITIONAL EVIDENCE THE CIT(A) FORWARDED THE SAME TO THE ASSESSING OFFICER. 5. THE CIT(A) AFTER DETAILED CONSIDERATION OF THE MATTER THEREAFTER CONFIRMED THE ADDITION TO THE EXTE NT OF RS.15 00 000 BY DIVIDING THE ISSUE INVOLVED INTO THREE ASPECTS VIZ. RS.6 50 000 CLAIM E D TO B E OUT OF OWN SOU R CES OF ASSESSEE ; RS.5 00 000 BEING LOAN FROM MR S. NADEERA ANEES; AND RS.10 00 000 BEING LOAN FROM MRS.TAHERA FATIMA. AS FOR THE FIRST ASPECT OF THE MATTER RELATING TO OWN SOUR C ES OF R S .6 50 000 THE CIT(A) ACCEPTED THE EXPLANATION OF THE ASSESSEE TO THE EXTENT OF R S. 1 50 000 BEING THE COMBINED INCOMES FROM PROPERTY AND AGRICULTURE LEAVING A GAP OF RS.5 00 000 WHICH BEING WITH UNPROV EN SOURCES WAS HELD AS UNEXPLAINED. AS FOR THE LOANS OF RS.5 00 000 FROM SMT. NA D IRA AN E ES AND R S .10 0 000 FROM MRS.T A HERA FATIMA IN THE REMAND REPORT THE ASSESSING OFFICER WAS O F THE VIEW THAT THE ASSESSEE FAIL E D TO P ROV ED THE CREDIT - WOR T HINESS OF THE CREDITORS BY P R O D U C IN G THE PARTIES AND WITH THE HELP O F THE IT ASSESSMENT PARTICULARS ETC. THOUGH CONFIRMATIONS WERE FURNI S H E D FROM THEM. IT WAS SUBMITT E D BY THE ASSESSEE THAT THE CREDITOR W A S THE MO T H E R OF THE ASSESSEE AND IT WAS QUITE BUT HUMAN N ATURE T HAT IN NEED OF MONEY A PERSON FALLS BACK ON THE FAMILY MEMBER AND THE AMOUNT WAS LENT THROUGH BANKING CHANNEL AND THE C REDITOR CONFIRMED THE TRANSACTION THROUGH LET T ER AND SUB M I T TED ASSESSMENT PARTICULARS. AS FOR LOAN OF R S .10 00 000 FROM MRS. TAHIRA FATIMA ASSESSING OFFICER OBSERVED THAT LOAN WAS O B T AINED FROM MR.MOHD. ABDUL KAREEM WHEREAS CONFIRMATION AS PROVIDED BY MRS.FATIMA WIFE OF ABDUL KAREEM. THE ASSESSING OFFICER FURTHER OBSERVED THAT ON BOTH THE OCCASION S OF OBTAINING LOAN AN AMOU NT OF RS .5 00 000 EACH WAS CREDITED INTO THE ACCOUNT O F MR.ABDUL KAREEM JUT A DAY BEFORE ADVANCING ITA NO. 1 190 & 1 209 /HYD/201 3 SHRI SYED ADEELUDDIN HYDERABAD 4 THE AMOUNTS TO THE ASSESSEE AND THE ASSESSEE FAIL E D TO PROVE THE CREDITWORT H INESS OF THE CREDITORS. WITH REGARD TO THIS CREDITOR ASSESSEE SUBMITTED THAT THE AMOUNTS ORIGINATED FROM NRE ACCOUN T WITH ANDHRA BANK MEHDIPATNAM BRANCH FOR WHI C H CONFIRMATION L E TTER WAS FURNISHED BY THE WIFE OF THE CR ED ITOR M R.ABDUL KAREEM SINCE HE IS AWAY FROM TH E COUN T RY AND IN SPI T E OF THE COGENT EVIDENCE THE ASSESSING OFFIC ER TREATED THE AMOUNTS AS UN E XPLAIN E D. THE CIT(A) TAKING NOTE OF THE LAPSES ON THE PART OF THE ASSESSING OFFICER IN NOT EXAMINING THE PARTICULARS FURNISHED BY THE ASSESSEE BEFORE COMING TO TH E CONCLUSION THAT THE CREDIT - W ORTHINESS IS NOT EXPLAINED AND OBSERVING THAT THE IDENTITY OF THE CREDITORS AND THE GENUINENESS OF THE TRANSACTIONS WERE ESTABLISHED WITH REFERENCE TO THE BANK ACCOUNTS DELETED THE ADDITION OF RS.15 00 000 MADE BY THE ASSESSING OFFICER UNDER S.69 OF THE ACT. 6. AGGRIEVED BY THE ADDITIONS SUSTAINED BY THE CIT(A) ASSESSEE IS IN APPEAL WHEREAS THE REVENUE PREFERRED ITS APPEAL CONTESTING THE RELIEF GRANTED BY THE CIT(A). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE REVENUE AUTHORITI ES. THE ASSESSING OFFICER MADE THE ADDITION OF RS.21 50 000 UNDER S.69 OF THE ACT AS THE ASSESSEE COULD NOT EXPLAIN THE SOURCES FOR THE CAPITAL INTRODUCED BY THE ASSESSEE TO HIS SATISFACTION. AS FOR THE AMOUNT OF RS.6 50 000 CLAIMED BY THE ASSESSEE TO H AVE INVESTED FROM OUT OF OWN FUNDS IT COMPRISES OF (A) ACCUMULATED SAVINGS OUT OF INCOME FROM PROPERTY AND AGRICULTURE; AND (B) CONTRACT RECEIPTS. THE CIT(A) ACCEPTED THE FIRST SOURCE SINCE THE AMOUNT REPRESENTED BY THE SAME TO THE EXTENT OF RS.1 50 000 HAS BEEN RECEIVED FROM OUT OF BANKING CHANNELS. AS FOR THE BALANCE AMOUNT OF RS.5 00 000 REPRESENTED BY CONTRACT RECEIPTS IN THE ABSENCE OF ANY COGENT EVIDENCE BROUGHT ON RECORD BY THE ASSESSEE IN SUPPORT OF THE SAID CLAIM AS THE NET PRESUMED NET PRO FIT/MARGIN AS AVAILABLE TO THE ASSESSEE WOUL D NO T SUPPO R T THE CAU S E OF THE ASSESSEE T H A T ENTIRE CONTRACT RECEIPTS ARE AVAILABLE FOR MAKING THE INVESTMENT MORE SO SINCE THE YEAR ITA NO. 1 190 & 1 209 /HYD/201 3 SHRI SYED ADEELUDDIN HYDERABAD 5 UNDER CONSIDERATION WAS SHOWN AS THE FIRST YEAR OF CONTRACT AND THERE WAS NO ACCUMULATED SOURCES OF INCOME OTHER THAN THE MARGINAL INCOMES FROM THE PROPERTY AND AGRICULTURAL INCOME. WE DO NOT FIND ANY INFIRMITY IN THE VIEW TAKEN BY THE CIT(A) WITH REGARD TO THE OWN SOURCES BY ACCEPTI NG THE CL A IM OF THE ASSESSEE PARTLY. WE ACCORDINGLY REJECT THE GROUNDS OF THE ASSESSEE AS WELL AS THE REVENUE ON THIS ASPECT IN THEIR RESPECTIVE APPEALS. 8. EVEN WITH REGARD TO THE AMOUNTS BORROWED FROM MOTHER SMT.ANEES NADIRAA AND A DISTANT RELATIVE SHRI ABDUL KAREEM THE REASONING GIVEN BY THE CIT(A) CANNOT BE FOUND FAULT WITH. THE FORMER BEING ASSESSEES MOTHER AND THE MONEY HAVING BEEN LENT FROM BANKING CHANNELS THERE IS NO DISPUTE WITH REGARD TO EITHER IDENTITY OR GENUINENESS OF THE TRANSACTI ON. SINCE THE SAID CREDITOR WAS ALSO CLAIMED TO HAVE BEEN ASSESSED TO TAX THE ASSESSING OFFICER OUGHT TO HAVE VERIFIED THE PARTICULARS GIVEN IF HE HAS ANY DOUBT WITH REGARD TO THE CREDIT - WO R T HINESS OR GENUINENESS OF THE TRANSACTION. EVEN WITH REGARD TO OTHER CREDITOR MR.ABDUL KAREEM THE AMOUN T WAS CLAIMED TO HAVE ORIGINATED FROM AN NRE ACCOUNT WITH ANDHRA BANK AND THE SAID CREDITOR HAVING BEEN AWAY FROM THE COUNTRY HIS WIFE SMT. FATIMA WAS CLAIMED TO H A VE FILED THE CONFIRMATION L E T T E R ON BEHALF OF HER HUSBAND. MERELY ON THE G R OUND THAT CONFIRMATION LETTER WAS FILED BY ANOTHER PERSON THE GENUINENESS OF THE TRANSACTION CANNOT BE DOUBTED SINCE THERE CAN BE NO DOUBT WITH REGARD TO EITHER IDENTITY OF THE CREDITOR AND HIS CREDIT - WO R THINESS OR THE GENU INENESS OF THE TRANSACTION. IN THIS VIEW OF THE MATTER WE DO NOT FIND A NY INFIRMITY IN THE VIEW TAKEN BY THE CIT(A) WHILE ACCEPTING THE SOURCES EXPLAINED BY THE ASSESSEE FOR INVESTING THE CAPITAL BY BORROWING THE MONIES FROM THESE TWO PERSONS VIZ. M OTHER AND DISTANT RELATIVE . WE ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A) REJECTING THE GROUNDS OF THE REVENUE ON THIS ASPECT. 9. THOUGH T HERE IS ONE MORE GROUND IN THE APPEAL OF THE ASSESSEE WHICH RELATES TO CHARGING OF INTEREST UNDER S.234A AND S.234B OF THE ACT WHEREIN THE CONTENTION OF THE ASSESSEE IS THAT THE INTEREST HAS NOT BEEN ITA NO. 1 190 & 1 209 /HYD/201 3 SHRI SYED ADEELUDDIN HYDERABAD 6 CALCULATED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT NO SPECIFIC ARGUMENTS HAVE BEEN ADVANCED ON THIS ASPECT AT THE TIME OF HEARING. IN ANY EVENT W E DO NOT F IND ANY MERIT IN THIS GROUND OF THE ASSESSEE WHICH IS A C CORD I NGLY REJECT E D. 10. IN THE RESULT BOTH THE APPEALS O F THE ASSESSEE AS WELL AS REVENUE ARE DISMISSED. O RDER PRONOUNCED IN THE COURT ON JULY 31 2014 SD / - SD/ - ( B.RAMAKOTAIAH ) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DT/ - 31 ST JULY 2014 COPY FORWARDED TO: 1. SHRI SYED ADEELUDDIN C/OI. M.M.FIRDOS ADVOCATE 11 - 3 - 942 1 ST FLOOR NEW MALLEPALLY HYDERABAD HYDERABAD 2 . INCOME TAX OFFICER WARD 7(1) HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) V I HYDERABAD 4. COMMISSIONER OF INCOME - TAX V L HYDERABAD 5 DEPARTMENTAL REPRESENTATIVE ITAT HYDERABAD. B.V.S