Shri K. Haragopal, Hyderabad v. The DCIT, Hyderabad

ITA 31/HYD/2010 | 2006-2007
Pronouncement Date: 23-04-2010 | Result: Dismissed

Appeal Details

RSA Number 3122514 RSA 2010
Assessee PAN ABWPK5883A
Bench Hyderabad
Appeal Number ITA 31/HYD/2010
Duration Of Justice 3 month(s) 12 day(s)
Appellant Shri K. Haragopal, Hyderabad
Respondent The DCIT, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 23-04-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 23-04-2010
Assessment Year 2006-2007
Appeal Filed On 11-01-2010
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.31/HYD/10 : ASSE SSMENT YEAR 2006-07 K. HARAGOPPAL HYDERABAD. PAN:ABWPK5883A VS THE DCIT CENTRAL CIR-2 HYDERABAD. (APPLICANT) (RESPONDENT) APPELLANT BY : SHRI K. VASANT KUMAR RESPONDENT BY : SHRI A. PATRA- CIT DR O R D E R PER AKBER BASHA ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT (A)-I HYDERABAD DATED 3-11-2009 AND IT RELA TES TO THE ASSESSMENT YEAR 2006-07. 2. FOLLOWING GROUNDS WERE RAISED BY THE ASSESSEE IN THIS APPEAL- I. THE ORDER OF THE LEARNED CIT (A) IS ERRONEOUS BOTH ON FACTS AND IN LAW. II. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS.9 33 451 HOLDING THAT THERE IS UNEXPLAINED INVESTME NT. III. THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACT THAT THERE IS NO SOURCE OF INCOME TO THE ASSESSEE AND THAT THE PAYMENTS 2 ARE ALL MADE THROUGH CHEQUES AND THEREFORE OUGHT NOT TO HAVE CONFIRMED THE ADDITION.' 2. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE O PERATION WAS CARRIED OUT IN THE CASE OF THE ASSESSEE AND CONSEQUENTLY A NOTICE UNDER SECTION 153A WAS ISSUED BY THE ASSESSING OFFICER. IN RESPONSE TO THE SAID NOTICE THE ASSESSEE DID NOT FILE ANY RETURN OF INCOM E AND SUBSEQUENTLY A NOTICE UNDER SECTION 142(1) WAS ISSUED BY THE ASSESSING OFFICER. THE ASSESSEE FINALLY FILED A REPLY BY ENCLOSING THE COPY OF THE ORIGINAL RETURN OF INCOME FILED EARLIER AND REQUESTED THAT THE SAME MAY BE TREATED AS THE RETURN FILED IN RESPONSE TO NOTICE UN DER SECTION 153A OF THE ACT. THE ASSESSING OFFICER THEREAFTER CALLED FOR VARIOUS DETAILS AND NO SUCH DETAILS WERE FURNISHED BY THE ASSESSEE. IN THE COU RSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER RELIED ON CERTAIN INCRIMINATING DOCUMENTS RELATING TO UNEXPLAINED INVESTM ENT WHICH WAS FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATION. THE ASSESSING OFFICER OBSERVED THAT AS PER THE NOTING IN THE SEIZED D OCUMENT THE TOTAL INVESTMENT MADE BY THE ASSESSEE IN THE HOUSE PROPERTY WAS RS.24.16 LAKHS WHEREAS IN THE RETURN OF INCOME THE ASSESSEE HAD D ISCLOSED AN INVESTMENT OF RS.12.5 LAKHS WHICH INCLUDED COST OF ACQUISIT ION FOR THE PROPERTY AT RS.8 37 LAKHS AND COST OF RENOVATION OF RS. 4.2 LAKHS AND THE ASSESSING OFFICER RELIED ON THE SEIZED MATERIAL REFERRED AT PAGE 37 AND HELD THAT THE TOTAL INVESTMENT IN THE HOUSE PROPERTY AS PER SEIZED MATERIAL WAS RS.24.16 LAKHS. ACCORDINGLY THE ASSESSING OFF ICER MADE AN ADDITION OF RS.11.66 LAKHS BEING UNEXPLAINED INVESTMEN T U/S 69B. BEING AGGRIEVED THE ASSESSEE WENT IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3 3. IT WAS CONTENDED BY THE LEARNED AR OF THE ASSESSEE BEF ORE THE FIRST APPELLATE AUTHORITY THAT THE ONLY SOURCE OF INCOM E OF THE ASSESSEE IS SALARY AND RENT AND THE AUTHORITIES HAVE NOT FOUND AN Y OTHER SOURCE DURING THE SEARCH PROCEEDINGS AND MERELY ON THE BASIS OF NOTING ON A SLIP OF PAPER WITHOUT ANY CORROBORATIVE EVIDENCE IT IS NOT CORRECT TO HOLD THAT THE INVESTMENT IN PURCHASE OF PROPERTY IS RS.24.16 LAKHS. FURTHER THE SEIZED PAPER RELIED ON BY THE ASSESSING OFFICER INDICA TES THE PAYMENTS MADE BY CHEQUES AND THEY CANNOT BE HELD TO BE UNDISCLOSED INVESTMENTS AND THEREFORE THE ASSESSING OFFICER SHOULD HAVE GIVEN SET OFF FOR THE AMOUNT OF RS.17.75 LAKHS TOWARDS SALE CONSIDE RATION OF HOUSE FOR THE ASSESSMENT YEAR 2005-06 SINCE THE SALE CONSIDERATION SHOULD BE CONSIDERED AS AVAILABLE FOR INVESTMENT. THE CIT (A) AF TER GOING THROUGH THE FACTS OF THE CASE AND SEIZED DOCUMENT RELIED UPON BY THE ASSESSING OFFICER AND AT PAGE-37 OF THE SAID DOCUMENT THE DETAI LS RELATING TO THE PAYMENTS FOR HOUSE PROPERTY PURCHASED BY THE ASSESSEE WAS ME NTIONED AND AS PER THE NOTING IN THE SAID SEIZED PAPER RS.7.22 LAKHS HAVE BEEN PAID BY DD AND PAY ORDER OF SYNDICATE BANK IN THE MO NTH OF FEB. 2005 AND FURTHER PAYMENT OF RS.4 LAKHS AND RS.1 561 LAKHS HA S BEEN PAID IN THE MONTH OF AUGUST CORROBORATED BY CORRESPONDING ENTRY IN THE BANK ACCOUNT AND SINCE PART OF THE ENTRIES IN THE SEIZED PAPE R ARE VERIFIABLE IT CANNOT BE SAID THAT THE TOTAL FIGURE HAS NO EVIDENTI ARY VALUE AND HE WAS THEREFORE OF THE OPINION THAT THE ASSESSING OFFICER HAS R IGHTLY ADOPTED RS. 24.16 LAKHS AS THE CONSIDERATION PAID FOR PURCHASE OF THE PROPERTY AT BANJARA HILLS. AFTER CONSIDERING THE FACTS AND THE CIRCUMSTA NCES OF THE CASE THE CIT(A) DIRECTED THE ASSESSING OFFICER TO ALLOW RS.2 32 549 BEING THE AMOUNT AVAILABLE WITH THE ASSESSEE FROM OUT OF UNDI SCLOSED SALE CONSIDERATION FOR INVESTMENT IN THE NEW HOUSE PROPERTY AND HE ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO RECOMPUTED THE INCOME. 4 AGAINST THE FINDINGS OF THE CIT (A) THE ASSESSEE CAME IN APPEAL BEFORE THE TRIBUNAL. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ONLY SOURCE OF INCOME FOR THE ASSESSEE IS FROM SALARY AND RENT AN D THE DEPARTMENT DID NOT FIND ANY OTHER SOURCE OF INCOME DU RING THE COURSE OF SEARCH U/S 132 OF THE ACT. MERELY ON THE BASIS OF NOTING ON A SLIP OF PAPER WITHOUT ANY CORROBORATIVE EVIDENCE THAT TOO WH EN ANOTHER PARTY IS INVOLVED IN THE TRANSACTION IT IS NOT CORRECT TO HOLD T HAT THE INVESTMENT IN PURCHASE OF THE PROPERTY IS RS.24.16 LAKHS. IT IS AL SO SUBMITTED THAT THE ASSESSEE HAS SOLD A HOUSE FOR RS.17.75 LAKHS DURING THE ASSESSMENT YEAR 2005-06 AND HENCE THE ASSESSING OFFICER SHOULD HAVE G IVEN SET OFF FOR THIS AMOUNT BECAUSE THE SAME WAS AVAILABLE FOR INVEST MENT. IN SUPPORT OF HIS CONTENTION HE FILED A PAPER BOOK CONTAI NING COPY OF RETURN OF INCOME SEIZED MATERIAL BANK STATEMENT AND FINANCIAL STATEMENT OF STOCK BROKER. 5. ON THE OTHER HAND THE LEARNED DR SUBMITTED THAT THE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH ARE SPEAKING DOCUMENTS AND NOT DUMP DOCUMENTS. SINCE THE ADDITION CONFIRMED BY THE LO WER AUTHORITIES AS UNEXPLAINED INVESTMENT U/S 69B OF THE ACT IS BASED ON THE SEIZED DOCUMENT NOTHING MORE IS LEFT FOR ANY SET OFF. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE CIT ( A) AFTER GOING THROUGH THE FACTS OF THE CASE AND SEIZED DOCUMENT RELIED UPON BY THE ASSESSING OFFICER AND AT PAGE-37 OF THE SAID DOCUMENT THE DETAILS RELATING TO THE PAYMENTS FOR HOUSE PROPERTY PURCHASED B Y THE ASSESSEE WAS MENTIONED AND AS PER THE NOTING IN THE SAID SEIZED PAPER RS.7.22 5 LAKHS HAVE BEEN PAID BY DD AND PAY ORDER OF SYNDICATE BANK IN THE MONTH OF FEB. 2005 AND FURTHER PAYMENT OF RS.4 LAKHS AND RS.1.561 LAKHS HAS BEEN PAID IN THE MONTH OF AUGUST CORROBORATED BY CORRESPONDING ENTRY IN THE BANK ACCOUNT AND SINCE PART OF THE ENTRIES IN THE SEIZED PAPER ARE VERIFIABLE IT CANNOT BE SAID THA T THE TOTAL FIGURE HAS NO EVIDENTIARY VALUE AND HE WAS THEREFORE OF THE OPINION THAT THE ASSESSING OFFICER HAS RIGHTLY ADOPTED RS.24.16 LAKHS AS THE CONSIDERATION PAID FOR PURCHASE OF THE PROPERTY AT BANJARA HILLS. HENC E WE NOT SEE ANY INFIRMITY IN THE ORDER OF THE CIT (A) IN CONFIRM ING THE ACTION OF THE ASSESSING OFFICER IN ADOPTING RS.24.16 LAKHS AS THE CONSIDER ATION PAID FOR PURCHASE OF NEW HOUSE. 7. WE FIND THAT OUT OF 17.75 LAKHS RECEIVED BY THE A SSESSEE ON SALE OF OLD PROPERTY DURING THE ASSESSMENT YEAR 2005-06 THE ASSESSEE HAS ALREADY DISCLOSED RS.10.42 LAKHS TO THE DEPARTMENT AND RS.5 LAKHS WAS UTILISED FOR CLEARING HIS HOUSING LOAN AND HENCE THE BALANCE AMOUNT AVAILABLE PHYSICALLY WITH THE ASSESSEE SHOULD BE RS.2.33 LA KHS ONLY. THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT BRING ANY SUPPORT ING MATERIAL TO HOLD THAT THE ASSESSEE IN FACT KEPT THE ENTIRE SALE CO NSIDERATION OF THE OLD HOUSE PROPERTY FOR PURCHASE OF THIS NEW PROPERTY. HE NCE AFTER CONSIDERING THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE CIT (A) HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO ALLOW RS.2 32 54 9 BEING THE AMOUNT AVAILABLE WITH THE ASSESSEE FROM OUT OF UNDISCLOSED SALE CONSIDERATION FOR INVESTMENT IN THE NEW HOUSE PROPERTY AND HE ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO RE-COMPUTE THE INCOME. IN VIEW OF THE ABOVE AND AFTER CONSIDERING THE TOTALI TY OF FACTS AND THE CIRCUMSTANCES OF THE CASE WE DID NOT FIND ANY FLAW IN THE ORDER OF THE CIT (A) AND NO INTERFERENCE IS CALLED FOR. THEREFORE WE UPHOLD THE 6 FINDINGS OF THE LEARNED CIT (A) AND REJECT THE GROUND S RAISED BY THE ASSESSEE IN THIS APPEAL. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS DI SMISSED. ORDER WAS PRONOUNCED IN THE COURT ON 23-4-2010. SD/- SD/- (G.C. GUPTA) (AKBER BASHA) VICE PRESIDENT ACCOUNTANT MEMBER. DT/- 23-4-2010. COPY FORWARDED TO: 1. C/O K. VASANT KUMAR ADVOCATE 403 MANISHA TOWE RS D.NO.10-1- 18/31 SHYAM NAGAR HYDERABAD. 2. 3. 4. THE DCIT CENTRAL CIR-2 HYDERABAD. CIT(A))-I HYDERABAD. CIT AP HYDERABAD. 5. THE D.R. ITAT HYDERABAD JMR*