DCIT, Hyderabad v. Sri R Venkatesh, Hyderabad

ITSSA 1/HYD/2009 | misc
Pronouncement Date: 23-04-2010 | Result: Partly Allowed

Appeal Details

RSA Number 122516 RSA 2009
Bench Hyderabad
Appeal Number ITSSA 1/HYD/2009
Duration Of Justice 1 year(s) 3 month(s) 15 day(s)
Appellant DCIT, Hyderabad
Respondent Sri R Venkatesh, Hyderabad
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 23-04-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 23-04-2010
Date Of Final Hearing 20-04-2010
Next Hearing Date 20-04-2010
Assessment Year misc
Appeal Filed On 07-01-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER IT(SS)A NO.1/HYD/2009 A.Y. 1990-91 TO 1999-2000 DY. COMMISSIONER OF INCOME TAX CIRCLE 1 HYDERABAD VS SHRI R. VENKATESH SANJEEV REDDY NAGAR HYDERABAD (PAN ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.S. CHANDRASEKARAN DR RESPONDENT BY : V. RAGHAVENDRA RAO. O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER: THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGA INST THE ORDER PASSED BY THE CIT(A) I HYDERABAD DATED 8/10/ 2008 AND PERTAINS TO THE ASSESSMENT BLOCK PERIOD 1990-91 TO 1999 2000. 2. FIRST GROUND RAISED BY THE REVENUE IN THIS APPEA L IS THAT THE CIT(A) ERRED IN QUASHING THE BLOCK ASSESSMENT BEING ILLEG AL AND VOID SINCE THE ISSUE OF NOTICE U/S 143(2) OF THE INCOME TAX ACT WAS ISSUED BEYOND ONE YEAR. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON EARLIER OCCASION ON THIS POINT THE DEPARTMENT CAME APPEAL BEFORE THIS TRIBUNAL IN IT(SS)A-73/HYD/200 3 FOR THE BLOCK PERIOD 1990-1991 TO 1999-2000 AND FROM 1.4.199 TO 1 2.1.2000. THE TRIBUNAL VIDE ITS ORDER DATED 25/1/2006 CONSIDERED THE GROUND RELATING TO ISSUE OF NOTICE U/S 143(2) TO THE ASSESSEE. THE TRIBUNA L GONE THROUGH THIS GROUND IN THE LIGHT OF THE ORDER OF TH E TRIBUNAL LUCKNOW 2 2 BENCH (SPECIAL BENCH) IN THE CASE OF NAWAL KISHORE & SON S JEWELLERS VS. DCIT (87 ITD 407) AND ALSO THE ASSESSEE NOT RAISED ANY OBJECTION WITH REGARD TO THE APPLICATION OF THIS DECISION. AS SU CH THIS GROUND WAS DECIDED AGAINST ASSESSEE AND THE OTHER GROUND RELATING TO MERIT WAS SET ASIDE TO THE FILE OF CIT (A) WITH A DIRECTION TO CO NSIDER THE MATTER IN ACCORDANCE WITH LAW ON AFTER GIVING THE ASSESSEE A REASONAB LE OPPORTUNITY OF BEING HEARD. THUS IT MEANS THAT THE TRIBUNAL DECIDED THE GROUND RELATING TO ISSUE OF NOTICE U/S 143(2) OF TH E IT ACT AGAINST THE ASSESSEE AND AS SUCH THE CIT(A) CANNOT ONCE AGAIN ADJUD ICATE THE GROUND RELATING TO ISSUE OF NOTICE U/S 143(2) OF THE IT ACT. THIS HAS REACHED FINALITY BY THE SAID ORDER OF THE TRIBUNAL. THE CIT(A) IS NOT SUPPOSED TO TRAVEL BEYOND THE DIRECTION OF THE TRIBUNA L AS THE TRIBUNAL IS THE SUPERIOR FORUM AS COMPARED TO CIT(A). THE ASSESSEE RELIED ON THE ORDER OF THE TRIBUNAL DATED 5.1.2010 IN IT(SS)A-43/ HYD/2009 IN THE CASE OF SHRI I RAGHAVENDRA RAO AND ALSO JUDGEMENT OF HO NBLE SUPREME COURT IN THE CASE OF ACIT VS. BLUE MOON HOTELS (321 ITR 362). SINCE WE HAVE HELD THAT THERE IS NO GROUND BEFORE THE CIT(A) RELATING TO THE ISSUE OF NOTICE U/S 143(2) AND THERE IS NO RELEVANCE OF THESE JUDGEMENTS AT THIS STAGE. ACCORDINGLY WE ALLOW THIS GROUND TAKEN BY THE REVENUE. 4. THE NEXT GROUND IS WITH REGARD TO DELETION OF ADDITION RELATING ACCOMMODATING BOGUS EXPENDITURE TO M/S OCTL. 5. BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSEE WAS EN GAGED IN FOR BOOKING OF BOGUS EXPENSES BY M/S OIL COUNTRY TUBULA R LTD. (OCTL) AND THE MODUS OPERANDI FOLLOWED WAS THAT CHEQUES WERE I SSUED BY OCTL IN THE NAME OF THE ASSESSEE AND OTHERS IN SIMILAR POSITION S WHO USED TO ENCASH THE SAME AND AFTER RETAINING 2% OF THE CHEQUE VA LUE RETURN THE BALANCE AMOUNT TO THE INTERMEDIARIES WHO WOULD BE KE EPING 8% WITH THEM AND THE BALANCE 90% OF THE CHEQUE VALUE WOULD GO TO THE OCTL IN THE FORM OF CASH. THE FACTUAL FINDING HAS BEEN MADE DU RING THE COURSE 3 3 OF SEARCH AND SUBSEQUENTLY STATEMENTS HAVE BEEN RECORDED B OTH FROM OCTL THE INTERMEDIARIES AND THE ASSESSEE AND SIMILARLY P LACED PERSONS. THE ASSESSING OFFICER HAS DISCUSSED THE FACTS ELABORATELY IN TH E ASSESSMENT ORDER AND THERE WAS NO OCCASION FOR DOUBTING THA T THE ASSESSEE HAS KEPT MORE THAN 2% OF THE CHEQUE AMOUNT OR TH AT THE ASSESSEE WAS NOT ENGAGED IN ACCOMMODATING ENTRIES FOR OCTL . IN VIEW OF THE FACTUAL FINDING BY THE ASSESSING OFFICER HIMSELF HA S ADDED 2% OF CHEQUE VALUE AS COMMISSION RECEIVED IN THE HANDS OF THE A SSESSEE AND 90% AMOUNT WHICH HAS GONE BACK TO THE OCTL HAS BEEN ADDED IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS. INCIDENTALLY T HE ASSESSING OFFICER HAS NOT CONSIDERED BALANCE 8% FOR ADDITION IN TH E HANDS OF THE ASSESSEE PROBABLY BECAUSE THE ASSESSING OFFICER UNDERSTANDS THE SAME IS ASSESSABLE IN THE HANDS OF THE INTERMEDIARIES. THE CIT (A) DELETED THE ADDITION MADE ON ACCOUNT OF COMMISSION OF 2% ON THE REA SON THAT THE SAME WAS OFFERED IN THE REGULAR ASSESSMENT AND HE HAS DELE TED THE ADDITION OF 90% OF THE BILL AMOUNT MADE IN THE HAN DS OF THE ASSESSEE ON PROTECTIVE BASIS AT RS.67 27 297/- AND RS.47 58 215/- FOR THE ASSESSMENT YEARS 1998-99 AND 1999-2000 SINCE IT IS PROTECTIV E BASIS. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE MAIN CONTENTION OF THE ASSESSEE COUNSEL IS THAT SIMILAR ADDITIONS WERE MADE IN THE CASE OF OTHER ASSESSEES VIZ. S/ SHRI C.N. CHANDRASEKHAR RAMACHANDRA MURTHY C.A. RAVINDRANATH C.B. SANMUKESARA RAO AND S. RAVINDRANATH HAVE BEEN DELETE D BY THE CIT(A) AGAINST WHICH THE DEPARTMENT HAS NOT FILED ANY APPEA L AND SUBMITTED THAT IN VIEW OF THESE FACTS THE DEPARTMENT CANNOT HAVE ANY GRIEVANCE IN THE CASE OF PRESENT ASSESSEE ALSO. WE HAVE CAREFULLY GONE THROUGH THE CIT(A) ORDER IN ALL THESE CASES ALSO. IN THE PRESENT CA SE OF THE ASSESSEE THE CIT(A) HAS NOT GIVEN ANY REASON WHATSOEVER F OR DELETING THE ADDITION WITH REFERENCE TO 90% OF THE CHEQUE VALUE. FURTHER THE CIT(A) HAS NOT GONE THROUGH THE ORDERS OF THE SETTLEM ENT COMMISSIONER 4 4 ON THE IMPUGNED ISSUE TO SAY WHAT HAPPENED TO THE SUBSTA NTIVE ASSESSMENT MADE IN THE HANDS OF OTHER PARTIES. THE CIT(A ) ALSO REQUIRED TO SEE THE RELEVANCE OF ORDER OF CIT(A) IN O THER CASES CITED SUPRA WHEREIN SIMILAR ADDITIONS WERE DELETED. MORE SO THE LOWER AUTHORITIES REQUIRED TO ESTABLISH THE NEXUS OF SEIZED M ATERIAL TO THE IMPUGNED ADDITION. SINCE THERE IS NO DISCUSSION BY TH E CIT(A) ON THESE FACTS WE ARE UNABLE TO EXPRESS ANY OPINION ON TH IS ISSUE AT THIS STAGE. ACCORDINGLY WE SET ASIDE THE ISSUE RELATING TO A DDITION OF 90% OF CHEQUE VALUE TO THE FILE OF CIT(A) TO PASS SPEAKING ORD ER IN ACCORDANCE WITH LAW. REGARDING THE DELETION OF ADDITION OF 2% OF COMMISSION OF CHEQUE VALUE WE ARE OF THE OPINION SINCE THIS INCOME WAS OFFERED BY THE ASSESSEE IN REGULAR ASSESSMENT AND THE SAME ISSUE CANNOT B E DEALT IN BLOCK ASSESSMENT AND OTHERWISE IT AMOUNTS TO DOUBLE TA XATION AS SUCH THE DELETION BY CIT(A) TO THAT EXTENT IS JUSTI FIED. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 23. 4. 2010 SD/- SD/- G.C. GUPTA CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER DATED THE 23RD APRIL 2010 COPY FORWARDED TO: 1. THE DY. CIT CIRCLE 1 ROOM NO.703 7 TH FLOOR AAYAKAR BHAVAN BASHEERBAGH HYDERABAD-500 004. 2. SHRI R. VENGATESH 372/2RT SANJEEVA REDDY NAGAR HYDERABAD 3. CIT(A)- I HYDERABAD. 4. CIT HYDERABAD 5. THE D.R. ITAT HYDERABAD. NP 5 5 1 DATE OF DICTATION 20.4.2020 2 DATE ON WHICH TYPED DRAFT IS PLACED BEFORE THE DICT ATING MEMBER 20.4.2010 3 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S 20.4.2010 4 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER: AND OTHER MEMBERS 5 DATE ON WHICH THE FAIR ORDER GOES TO THE SR. P.S 6 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 8 DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGIST RAR 9 DATE OF DESPATCH OF THE TRIBUNAL ORDER