Sri K.C. Subba Rao,, Hyderabad v. ACIT,Central Circle-3, Hyderabad

ITA 1235/HYD/2014 | 2006-2007
Pronouncement Date: 26-11-2014 | Result: Allowed

Appeal Details

RSA Number 123522514 RSA 2014
Assessee PAN ADSPK7977M
Bench Hyderabad
Appeal Number ITA 1235/HYD/2014
Duration Of Justice 5 month(s) 2 day(s)
Appellant Sri K.C. Subba Rao,, Hyderabad
Respondent ACIT,Central Circle-3, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 26-11-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 26-11-2014
Assessment Year 2006-2007
Appeal Filed On 23-06-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY JUDICIAL MEMBER ITA NOS. 1235 & 1236/HYD/2014 ASSESSMENT YEARS : 2006-07 & 2008-09 SRI K.C. SUBBA RAO GUNTUR PAN ADSPK 7977 M ASST. COMMISSIONER OF INCOME- TAX CENTRAL CIRCLE 3 HYDERABAD (APPELLANT) (RESPONDENT) ITA NOS. 1237/HYD/2014 ASSESSMENT YEAR : 2008-09 SRI K. PARVATHI GUNTUR PAN ALJSPK 0477H ASST. COMMISSIONER OF INCOME- TAX CENTRAL CIRCLE 3 HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI K.A. SAI PRASAD REVENUE BY SHRI RAJAT MITRA DATE OF HEARING 13-11-2014 DATE OF PRONOUNCEMENT 26-11-2014 O R D E R PER SAKTIJIT DEY J.M.: THESE APPEALS BY TWO DIFFERENT ASSESSEES ARE DIREC TED AGAINST SEPARATE ORDERS OF LD. CIT(A)-V HYDERABAD ALL DATE D 15/01/2014 PERTAINING TO AYS 2006-07 AND 2008-09. AS ISSUES ARE COMMON THESE APPEALS ARE CLUBBED AND HEARD TOGETHER AND DI SPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIEN CE. 2 ITA NOS. 1235 TO 1237/HYD/2014 SRI K. C. SUBBA RAO AND SMT. K. PARVATHI ITA NO. 1235/HYD/2014 2. ASSESSEE HEREIN IS AN INDIVIDUAL. A SEARCH AND S EIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED IN CASE OF M/S AMR CONSTRUCTIONS LTD. AND OTHER GROUP CONCERNS ON 16/1 2/2008. CONSEQUENT TO SEARCH AS ALLEGED BY DEPARTMENT CERTA IN INCRIMINATING MATERIAL AND DOCUMENTS RELATING TO ASSESSEE AND HIS WIFE WERE FOUND AND SEIZED. AS A RESULT NOTICE U/S 153C OF THE ACT WAS ISSUED TO ASSESSEE DIRECTING HIM TO FILE RETURN OF INCOME FOR THE AYS 2003-04 TO 2008-09. SIMILAR NOTICE WAS ALSO ISSUED TO ASSESSEE S WIFE SMT. K. PARVATHI. IN RESPONSE TO THE NOTICE ISSUED ASSESSEE FILED HIS RETURN OF INCOME. IN COURSE OF ASSESSMENT PROCEEDING FOR THE AY 2006-07 AO WHILE EXAMINING THE STATEMENT OF AFFAIRS NOTICED TH AT ASSESSEE HAS SHOWN AN AMOUNT OF RS. 14 27 798 AS UNSECURED LOAN RECEIVED FROM FIVE PERSONS. SIMILARLY AO NOTICED THAT IN THE CAP ITAL ACCOUNT FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDIN G ASSESSEE HAS SHOWN UNSECURED LOAN OF RS. 8 85 000 FROM SMT. K. C HENCHAMMA. HE THEREFORE CALLED UPON ASSESSEE TO PROVE THE UN SECURED LOANS. THOUGH ASSESSEE IN COURSE OF ASSESSMENT PROCEEDING FURNISHED ACCOUNT COPIES AND SOME OTHER DETAILS BUT AO NOT BEING SATISFIED WITH THE EVIDENCES PRODUCED BY ASSESSEE TREATED THE ENTIRE UNSECURED LOAN AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT AND ADDED THE SAME TO INCOME OF ASSESSEE. BEING AGGRIEV ED OF SUCH ADDITION ASSESSEE PREFERRED APPEAL BEFORE LD. CIT( A) WHO CONFIRMED THE ADDITION MADE IN AN EX-PARTE ORDER PASSED BY HO LDING AS UNDER: 6. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER FOR MAKING AN ADDITION OF RS. 23 12 798 TOWARDS UNEXPLA INED CREDITS UNDER THE GUISE OF LOANS. THE AO FOR HIS DE TAILED REASONS AND THE CASE-LAWS RELIED UPON HAS RIGHTLY HELD THAT THE APPELLANT HAD NOT DISCHARGED THE ONUS CAST ON HIM U /S 68 OF THE ACT IN PROVING THE IDENTITY OF THE CREDITORS CONF IRMATION OF THE CREDITS CREDITWORTHINESS OF THE CREDITORS AND THE GENUINENESS OF THE TRANSACTION AMOUNTING TO RS. 14 27 798. THE SAME WAS THE CASE WITH REGARD TO AN AMOUNT OF RS. 8 85 000 T AKEN BY THE APPELLANT AS UNSECURED LOAN. HENCE I HAVE NO HESIT ATION IN CONFIRMING THE ADDITION OF RS. 23 12 798. 3 ITA NOS. 1235 TO 1237/HYD/2014 SRI K. C. SUBBA RAO AND SMT. K. PARVATHI 3. THE LEARNED AR SUBMITTED BEFORE US THAT DUE TO H IS OWN PERSONAL DIFFICULTIES HE COULD NOT APPEAR BEFORE L D. CIT(A) ON THE DATE FIXED FOR HEARING. ELABORATING FURTHER LD. AR SUBMITTED WHEN APPEAL WAS FIXED FOR HEARING HIS SON WAS NOT WELL A ND UNDERWENT A MAJOR SPINE SURGERY. ON THE LAST DATE FIXED HE HIM SELF FELL SICK HENCE ADJOURNMENT WAS SOUGHT. HOWEVER LD. CIT(A) DECIDED THE APPEAL EXPARTE WITHOUT GRANTING ADJOURNMENT. IN THE PROCESS ADDITIONS MADE BY AO WAS CONFIRMED. LD. AR SUBMITTED THE PR ESENT AO GOT JURISDICTION OVER THE FILE ON 09/12/2010 AND THE AS SESSMENT ORDER WAS PASSED ON 27/12/2012 AFTER GETTING APPROVAL. IN THE SHORT TIME AVAILABLE AO ISSUED ONLY ONE NOTICE U/S 142(1) AND COMPLETED THE ASSESSMENT. IT WAS SUBMITTED THOUGH BEFORE THE PR EDECESSOR AO ASSESSEE HAD APPEARED AND PRODUCED DETAILS AND EVID ENCES BUT DUE TO PAUCITY OF TIME AO DID NOT EXAMINE IN DETAIL TH E CONFIRMATIONS FROM CREDITORS. IT WAS SUBMITTED ALL THE CREDITORS ARE INCOME TAX ASSESSEES AND LOANS WERE RECEIVED THROUGH BANKING CHANNELS. L D. AR SUBMITTED ADDITIONS MADE U/S 68 WAS ALSO WITHOUT ANY REFERENC E TO THE SEIZED MATERIAL. THOUGH BEFORE CIT(A) A LEGAL GROUND WAS RAISED ON THE ISSUE BUT HE DID NOT DECIDE IT WHILE DISPOSING OF F THE APPEAL EXPARTE. THUS LD. AR SUBMITTED AS ASSESSEE WAS DEPRIVED OF PROPERLY REPRESENTING HIS CASE MATTER MAY BE REMITTED BACK T O THE AO FOR PROPER EXAMINING OF FACTS. 4. THE LEARNED DR HOWEVER OBJECTED TO SUCH CONTE NTION OF ASSESSEES COUNSEL BY SUBMITTING THAT IN SPITE OF A FFORDING A NUMBER OF OPPORTUNITIES ASSESSEE DID NOT APPEAR BEFORE LD . CIT(A) HENCE HE CANNOT BE GIVEN ONE MORE OPPORTUNITY. HE SUBMITTED THAT EVEN AT ASSESSMENT STAGE ALSO ASSESSEE HAS NOT PROVED THE SOURCE OF CREDIT. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. A S CAN BE SEEN FROM THE FACTS ON RECORD DURING ASSESSMENT PROCEEDING ASSESSEE HAS 4 ITA NOS. 1235 TO 1237/HYD/2014 SRI K. C. SUBBA RAO AND SMT. K. PARVATHI FURNISHED CERTAIN CONFIRMATION LETTERS FROM THE CRE DITORS WHICH HOWEVER WERE REJECTED BY AO ON THE GROUND THAT ASSE SSEE HAS FAILED TO DISCHARGE HIS ONUS. IT IS ALSO A FACT THAT ASSES SEES APPEAL HAS BEEN DECIDED EXPARTE. HOWEVER CONSIDERING THE FACT THAT THE COUNSEL FOR ASSESSEE COULD NOT APPEAR BEFORE LD. CIT(A) DUE TO HIS PERSONAL DIFFICULTIES WE ARE OF THE VIEW THAT LIBERAL APPRO ACH NEEDS TO BE TAKEN AS ASSESSEE SHOULD NOT SUFFER FOR LACK OF PROPER RE PRESENTATION. IT ALSO APPEARS THAT DUE TO GENUINE DIFFICULTIES THE COUNSEL COULD NOT APPEAR BEFORE THE FIRST APPELLATE AUTHORITY WHICH RESULTED IN DISMISSAL OF THE APPEAL EXPARTE. THEREFORE CONSIDERING THE T OTALITY OF FACTS AND CIRCUMSTANCES OF CASE WE ARE INCLINED TO REMIT THE MATTER BACK TO THE FILE OF AO FOR DECIDING AFRESH AFTER EXAMINING ALL FACTS AND MATERIALS ON RECORD. AO MUST AFFORD REASONABLE OPPORTUNITY TO ASSESSEE TO PROVE HIS CASE. ASSESSEE IS ALSO DIRECTED TO COOPER ATE IN FINALIZATION OF THE PROCEEDING. 6. IN COURSE OF HEARING ASSESSEE HAS RAISED AN ADD ITIONAL GROUND WITH REGARD TO VALIDITY OF THE PROCEEDING INITIATED U/S 153 C OF THE ACT HOWEVER SINCE WE HAVE REMITTED THE MATTER BACK TO THE FILE OF AO IT IS OPEN FOR THE ASSESSEE TO ALSO RAISE LEGAL ISSUE BEFORE AO. ITA NOS. 1236 & 1237/HYD/2014 FOR AY 2008-09. 7. IN COURSE OF ASSESSMENT PROCEEDING FOR IMPUGNED AY AO NOTICED THAT ASSESSEE AND HIS WIFE SMT. K. PARVATHI HAVE SOLD A PROPERTY IN VIZAYANAGARAM AND AS PER THE AGREEMENT OF SALE FOUND AT THE TIME OF SEARCH SALE CONSIDERATION MENTIONED THE REIN WAS RS. 1 91 01 011. HOWEVER AS PER THE REGISTERED SALE DE ED SALE CONSIDERATION WAS MENTIONED AT RS. 52 00 000 ONLY. AO THEREFORE PROPOSED TO TREAT THE DIFFERENTIAL AMOUNT OF RS. 1 39 01 011 AS ON MONEY PAID IN CASH OUTSIDE THE BOOKS OF ACCOUNT AN D ADD THE SAME TO THE INCOME OF ASSESSEES. THOUGH ASSESSEES OBJECT ED TO SUCH ADDITION AO REJECTING THE SUBMISSIONS OF ASSESSEE TREATED THE 5 ITA NOS. 1235 TO 1237/HYD/2014 SRI K. C. SUBBA RAO AND SMT. K. PARVATHI DIFFERENTIAL AMOUNT AS INCOME OF ASSESSEE AND HIS W IFE AND ADDED IT TO THE TOTAL INCOME OF ASSESSEE. AO ALSO DISALLOWED DEDUCTION CLAIMED U/S 54 OF THE ACT. BEING AGGRIEVED OF SUCH ADDITION ASSESSEES PREFERRED APPEALS BEFORE LD. CIT(A). 8. LIKE IN AY 2006-07 APPEALS FOR THE IMPUGNED ASS ESSMENT YEAR IN CASE OF ASSESSEE AS WELL AS HIS WIFE SMT. K. PAR AVATHI WERE ALSO DISMISSED BY LD. CIT(A) EXPARTE BY CONFIRMING ADDIT IONS MADE BY AO. 9. THE LEARNED AR ADVANCED SIMILAR ARGUMENTS AS ADV ANCED IN ITA NO. 1235/HYD/14 (SUPRA) AND REQUESTED TO REMIT THE ISSUE BACK TO THE FILE OF AO FOR GRANTING ASSESSEE OPPORTUNITY TO REPRESENT HIS CASE PROPERLY. 10. CONSIDERING THE SUBMISSIONS OF THE PARTIES AND FOLLOWING OUR DECISION IN ITA NO. 1235/HYD/14 WE ARE INCLINED TO REMIT THESE MATTERS ALSO BACK TO THE FILE OF AO FOR DECIDING A FRESH AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO ASSESSEE. SINCE WE HAVE REMITTED THE ISSUE BACK TO THE FILE OF AO WE ARE N OT INCLINED TO GO INTO THE ADDITIONAL GROUND RAISED BY ASSESSEES BEFORE US . HOWEVER IF SO ADVISED ASSESSEES ARE AT LIBERTY TO RAISE THE ISSU E RAISED IN ADDITIONAL GROUND BEFORE AO. 11. IN THE RESULT ALL THE THREE APPEALS UNDER CONS IDERATION ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 26/11/2014. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD DATED: 26 TH NOVEMBER 2014 6 ITA NOS. 1235 TO 1237/HYD/2014 SRI K. C. SUBBA RAO AND SMT. K. PARVATHI KV COPY TO:- 1) SRI K.C. SUBBA RAO AND 2) SMT. K. PARVATHI C/O CH. PARTHASARATHY & CO. 1-1-298/2/B/3 1 ST FLOOR SOWBHAGYA AVENUE ST. NO. 1 ASHOKNAGAR HYDERABAD 500 020 2) ACIT CENTRAL CIRCLE 3 HYDERABAD 3) CIT(A)-V HYDERABAD 4) CIT(CENTRAL) HYDERABAD 5)THE DEPARTMENTAL REPRESENTATIVE I.T.A.T. HYDER ABAD.