Sri Sharad Pitti, Hyderabad v. DCIT, Hyderabad

ITA 1443/HYD/2010 | 1995-1996
Pronouncement Date: 25-02-2011 | Result: Allowed

Appeal Details

RSA Number 144322514 RSA 2010
Assessee PAN ADFPP2418K
Bench Hyderabad
Appeal Number ITA 1443/HYD/2010
Duration Of Justice 3 month(s) 2 day(s)
Appellant Sri Sharad Pitti, Hyderabad
Respondent DCIT, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 25-02-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 25-02-2011
Assessment Year 1995-1996
Appeal Filed On 22-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI AKBER BASHA ACCOUNTANT MEMBER ITA NO.1443/HYD/2010 ASSESSMENT YEAR 1995-96 SHRI SHARAD B.PITTI HYDERABAD. (PAN ADFPP 2418 K) VS DY. COMMISSIONER OF INCOME TAX CIRCLE 16(3) HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI LAXMINIWAS SHAR MA RESPONDENT BY : SHRI B.V.PRASAD REDDY O R D E R PER G.C.GUPTA VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 1995-96 IS DIRECTED AGAINST THE ORDER OF THE COMMISSION ER OF INCOME- TAX(APPEALS). 2. THE ONLY ISSUE IN THE GROUNDS OF APPEAL OF THE A SSESSEE IS REGARDING VALIDITY OF THE PENALTY IMPOSED UNDER S.27 1(1)(C) OF THE INCOME TAX ACT 1961. 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS VOLUNTARILY FILED RETURN DECLARING INCOME OF RS.10 00 660 WHICH WAS LATER ON REVISED TO RS.10 71 61 0. THE REVISED RETURN WAS FILED BEYOND TIME AND THEREFORE THE ASSESSING OFFICER ISSUED NOTICE UNDER S.147 OF THE ACT TO REGULAR ISE THE SAME. ASSESSEE WAS ASSESSED ON AN INCOME OF RS.40.10 LAKHS BY THE ITA NO.1443/H/2010 SHRI SHARAD B.PITTI HYDERABAD 2 ASSESSING OFFICER AND IN APPEAL THE CIT(A) DELETED ALL THE ADDITIONS EXCEPT ADDITION REPRESENTING PEAK OF THE ADVANCE MONEY RECEIVED FROM VARIOUS PERSONS AMOUNTING TO RS.12 58 000 WHICH AD DITION WAS CONFIRMED BY THE CIT(A) AND ALSO BY THE TRIBUNAL. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS PROVED THE IDENTITY OF THE PARTIES WHO HAVE GIVEN ADVANCE FOR PURCHASE OF LAND TO THE ASSESSEE. THOSE PARTIES HAVE GIVEN CONFIRMATION AFFIDAVITS STATING THAT THEY HAVE GIVEN THE AMOUNTS OF ADVANCE MONEY TO THE ASSESSEE FOR PURCHASE OF LAND. THE PARTIES WERE CALLED FOR BY THE ASSESSING OFFICER AND ALL T HE PARTIES APPEARED BEFORE THE ASSESSING OFFICER AND STATED ON OATH THE FACT OF HAVING GIVEN ADVANCE MONIES TO THE ASSESSEE. HE SUBMITTED THAT MOST OF THE 24 CREDITORS WERE EXISTING INCOME-TAX ASSESSEES AND HAVE GIVEN THEIR PERMANENT ACCOUNT NUMBERS AND ONLY TH REE OR FOUR OF THEM WERE NOT INCOME-TAX ASSESSEES. THE ASSESSING OFFICER AND THE CIT(A) DISBELIEVED THE STATEMENTS OF THE CREDITOR PARTIES ON THE PLEA THAT THE AMOUNTS WERE RECEIVED IN CASH FROM THE E MPLOYEES AND FRIENDS OF THE ASSESSEE AND THEY WERE ALSO PAID BACK IN CA SH AND THAT THERE WAS NO AGREEMENT FOR SALE OF LAND AND NONE OF T HEM HAVE IN FACT PURCHASED THE LAND FOR WHICH THE ADVANCES WERE GIVE N. IN SUPPORT OF HIS ARGUMENTS HE RELIED ON A SERIES OF DECISIO NS NOTED HEREUNDER- (A) STAR INTERNATIONAL P.LTD. V/S.ACIT(308 ITR (AT) 33) -LUCKNOW (B) DILIP N.SHROFF V/S. JCIT (291 ITR 519) SC (C) CIT V/S. RELIANCE PETROPRODUCTS PVT. LTD. (322 ITR 158) - SC ITA NO.1443/H/2010 SHRI SHARAD B.PITTI HYDERABAD 3 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS OPPO SED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE R EFERRED TO THE RELEVANT PORTIONS OF THE ORDER OF THE CIT(A) WHEREIN HE HAS RECORDED THAT THE ASSESSEE HAS CHANGED HIS STAND WITH REGARD TO THE FIGURES OF ADVANCE MONEY RECEIVED FROM THE SALE OF LAND AND THAT IT IS SURPRISING AND BEYOND HUMAN PROBABILITY THAT THE DETA ILS OF MONEY RECEIVED WOULD NOT BE KNOWN TO THE ASSESSEE. ASSESSEE HAS P ROVIDED THE DETAILS OF ENTIRE AMOUNT AND DETAILS OF OBTAINING ADVANCES FROM VARIOUS PERSONS WHILE CLAIMING AT THE SAME TIME THAT H E DID NOT HAVE ANY DETAILS OR BOOKS OF ACCOUNT. HE SUBMITTED THAT THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE TO SHOW THAT HE HAS RECEIV ED ANY ADVANCE WITH REGARD TO THE SO CALLED SALE OF LAND. HE SUBMITTED THAT THE STAND OF THE ASSESSEE WAS INCONSISTENT AND THAT THE T RANSACTION OF ADVANCES WAS IN CASH ONLY. THE PARTIES WERE MOSTLY EMPLO YEES OF THE ASSESSEE AND THERE WAS NO WRITTEN AGREEMENT WITH THE M. ASSESSEE COULD NOT PRODUCE ANY EVIDENCE TO PROVE THE CREDITWORTHINESS OF THE PARTIES AND THE GENUINENESS OF T HE TRANSACTIONS AND THAT THE ADDITION MADE IN THE ASSESSMENT OF THE ASSESSEE HAS ALREADY BEEN UPHELD BY THE TRIBUNAL. HE REL IED ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). 6. THE LEARNED COUNSEL FOR THE ASSESSEE IN HIS REJOIND ER HAS SUBMITTED THAT THE CHANGE IN THE FIGURE OF ADVANCE MON EY WAS DUE TO THE FACT THAT NO BOOKS OF ACCOUNT WERE MAINTAINED BY TH E ASSESSEE AND THE REVISED FIGURES WERE FILED BEFORE THE ASSESSING O FFICER DURING THE ASSESSMENT PROCEEDINGS ITSELF. ALL THE PARTIES HAVE CON FIRMED THE FACT OF HAVING ADVANCED THE MONEY TO THE ASSESSEE FOR TH E PURCHASE OF LAND. ITA NO.1443/H/2010 SHRI SHARAD B.PITTI HYDERABAD 4 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY A ND PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A ). WE FIND THAT THE ASSESSEE HAS FILED CONFIRMATION LETTERS OF 24 PER SONS FROM WHOM HE HAS CLAIMED TO HAVE RECEIVED THE AMOUNTS AS ADVA NCE FOR SALE OF LAND. THEIR COMPLETE ADDRESSES WERE FURNISHED TO THE ASSESSING OFFICER. THE ASSESSEE HAS FILED THEIR CONFIRMATIONS AND AFFIDAVITS STATING THAT THEY HAVE ADVANCED THE MONIES TO THE ASSESSEE. THE PARTIES IN PERSON APPEARED BEFORE THE ASSESSIN G OFFICER AND HAVE ADMITTED THAT THEY HAVE ADVANCED MONIES TO T HE ASSESSEE FOR THE PURCHASE OF LAND. THE ASSESSING OFFICER HAS NOWHERE DOUBTED THE IDENTITY OF ANY OF THE 24 PERSONS WHO HAVE CLAIME D TO HAVE ADVANCED THE MONEY TO THE ASSESSEE. MOST OF THESE PERSONS WERE EXISTING INCOME-TAX ASSESSEES AND THEY HAVE FURNISHED THEIR PERMANENT ACCOUNT NUMBERS. THERE IS NO MATERIAL BROUGH T ON RECORD ON BEHALF OF THE REVENUE TO SHOW THAT ANY ENQUIRIES W ERE MADE BY THE ASSESSING OFFICER WITH REFERENCE TO THE INCOME TAX A SSESSMENT RECORDS OF THOSE PERSONS BY THE DEPARTMENT. THE DEPARTME NT HAS NOT ACCEPTED THE CONFIRMATION OF THE CREDITOR PARTIES AS THE AMOUNTS WERE RECEIVED AND PAID BACK BY THE ASSESSEE IN CASH AND MOST OF THE CREDITOR PARTIES WERE EMPLOYEES OR FRIENDS OF THE ASSESSEE AND THAT THERE WAS NO WRITTEN AGREEMENT FOR THE SALE OF LAND W ITH THOSE PARTIES. THESE FACTS MAY GIVE RISE TO SUSPICION ABOUT THE CLAIM OF THE ASSESSEE OF HAVING RECEIVED THE ADVANCES FOR SALE OF LAND A ND BASED ON PREDOMINANCE OF PROBABILITIES THESE AMOUNTS MAY BE HELD AS ASSESSABLE IN THE HANDS OF THE ASSESSEE. BUT THESE FACTS ALONE ARE NOT SUFFICIENT TO HOLD THAT THE REVENUE HAS PROVED THA T THE ASSESSEE HAS CONCEALED ITS INCOME OR HAS FILED INACCURATE PARTICULARS OF INCOME WITH REGARD TO THESE AMOUNTS CLAIMED AS ADVANCE MONEY RE CEIVED BY THE ASSESSEE FOR THE SALE OF LAND. AS FOR THE CHANGE IN T HE FIGURE OF ITA NO.1443/H/2010 SHRI SHARAD B.PITTI HYDERABAD 5 ADVANCES RECEIVED WE FIND THAT THE ASSESSEE HAS EXPLAINED THAT THE CHANGE WAS DUE TO THE FACT THAT THE ASSESSEE WAS NOT MAINT AINING ANY BOOKS OF ACCOUNT AND THE REVISED FIGURES WERE SUBMITT ED TO THE ASSESSING OFFICER ITSELF DURING THE COURSE OF ASSESSMENT PROCEED INGS. THIS EXPLANATION OF THE ASSESSEE COULD NOT BE REBUTTED ON BEHALF OF THE REVENUE. WE ARE UNABLE TO SUSTAIN THE REASONING OF THE CIT(A) THAT THE ASSESSEE HAS PROVIDED THE DETAILS OF THE NAMES AN D DETAILS OF OBTAINING ADVANCES FROM VARIOUS PERSONS WHILE STATING ON THE OTHER HAND THAT HE DID NOT HAVE ANY DETAILS OR BOOKS OF A CCOUNT. ANOTHER REASONING OF THE CIT(A) IN SUSTAINING THE PENALTY IMP OSED WAS THAT THE ASSESSEE DID NOT PRODUCE ANY PIECE OF EVIDENCE OR AGRE EMENT TO SHOW THAT THE ASSESSEE HAD RECEIVED ANY ADVANCE TOWARDS THE SALE OF LAND. THIS REASONING OF THE CIT(A) ALSO DOES NOT SEEM T O BE SUSTAINABLE. WE FIND THAT THE TRIBUNAL HAS SUSTAINED TH E ADDITION IN THE QUANTUM CASE OF THE ASSESSEE BY OBSERVING THAT THE SWOR N STATEMENTS OF THE ALLEGED CREDITORS REVEAL MORE INCREDIB LE FACTS WHICH DO NOT INFUSE MUCH CONFIDENCE ABOUT THE GENUINENESS OF T HE TRANSACTIONS AND HAS CITED THE DECISION OF THE HONBLE SUP REME COURT IN SUMATI DAYAL V/S. CIT AND ANR 214 ITR 801(SC) AN D HAS CONCLUDED THAT THERE IS PRIMA FACIE EVIDENCE AGAINST THE ASSESSEE WIT H REGARD TO RECEIPT OF MONEY AND IF THE ASSESSEE FAILS TO REBUT THE SA ID EVIDENCE IT CAN BE USED AGAINST HIM BY HOLDING THAT IT WAS A RE CEIPT OF INCOME NATURE IN HIS HANDS. IT WAS FURTHER HELD BY THE TRI BUNAL THAT IN THIS CASE THE CREDITWORTHINESS OF THE LENDER OR THE GENUINEN ESS OF THE TRANSACTION WAS NOT PROVED BY THE ASSESSEE. IN OUR CONSIDERE D OPINION THESE FINDINGS OF THE TRIBUNAL MAY BE SUFFICI ENT TO UPHOLD THE ADDITION MADE IN THE QUANTUM CASE OF THE ASSESSEE ON THE BASIS OF THE PREDOMINANCE OF PROBABILITIES AND THE PRIMA FACIE EVIDENCE AGAINST THE ASSESSEE WHICH THE ASSESSEE HAS FAILED TO REBUT BUT THE ITA NO.1443/H/2010 SHRI SHARAD B.PITTI HYDERABAD 6 SAME IS NOT SUFFICIENT TO HOLD THAT THE ASSESSEE HAS CONCEALED ITS INCOME OR HAS FILED INACCURATE PARTICULARS OF HIS INCOME A ND THAT MONIES RECEIVED CLAIMED AS ADVANCES RECEIVED FROM VARIOUS PERSONS WERE IN FACT CONCEALED INCOME OF THE ASSESSEE. THE ADDITIO N HAS BEEN SUSTAINED BY DISBELIEVING THE STATEMENTS GIVEN BY THE V ARIOUS PERSONS. BUT THE FACT REMAINS THAT THE IDENTITY OF ALL THE PERSONS HAS BEEN ESTABLISHED AND THEY HAVE ADMITTED TO HAVE ADVAN CED THE MONEY FOR PURCHASE OF LAND TO THE ASSESSEE AND HAVE ALSO ADMITTED THAT THEY HAVE RECEIVED THE MONEY BACK FROM THE ASSESSEE WHEN THE TRANSACTION OF PURCHASE OF LAND COULD NOT MATERIALISE. THERE IS NO MATERIAL BROUGHT ON RECORD TO SUGGEST THAT THERE IS ANY EVIDENCE TO CONCLUDE THAT THE SAID STATEMENTS GIVEN BY THESE PERSONS WERE FALSE. THE LENDERS WERE MOSTLY INCOME-TAX ASSESSEES AND NO EFFORT WAS MADE BY THE DEPARTMENT TO VERIFY THE FACTS FROM THE I NCOME-TAX RECORDS OF THESE PERSONS. IN THESE FACTS OF THE CASE WE ARE OF THE VIEW THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY UND ER S.271(1)(C) OF THE ACT WHICH IS CANCELLED. ACCORDINGLY GROUNDS OF APPE AL OF THE ASSESSEE ARE ALLOWED. 8. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 25.2.2011 SD/- SD/- (AKBER BASHA) (G.C. GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DATED THE 25TH FEBRUARY 2011 ITA NO.1443/H/2010 SHRI SHARAD B.PITTI HYDERABAD 7 COPY FORWARDED TO: 1. SHRI SHARAD B.PITTI 6-3-648/2 MOTI BHAVAN SOM AJIGUDA HYDERABAD 2. DY. COMMISSIONER OF INCOME-TAX CIRCLE 16(3) HYDE RABAD 3. CIT(A)-V HYDERABAD. 4. COMMISSIONER OF INCOME-TAX-IV HYDERABAD 5. THE D.R. ITAT HYDERABAD. B.V.S.