A Ramulu, Hyderabad v. ACIT, Hyderabad

ITSSA 20/HYD/2007 | misc
Pronouncement Date: 30-07-2012 | Result: Allowed

Appeal Details

RSA Number 2022516 RSA 2007
Assessee PAN ABQPA4168K
Bench Hyderabad
Appeal Number ITSSA 20/HYD/2007
Duration Of Justice 5 year(s) 5 month(s) 7 day(s)
Appellant A Ramulu, Hyderabad
Respondent ACIT, Hyderabad
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 30-07-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-07-2012
Date Of Final Hearing 18-07-2011
Next Hearing Date 18-07-2011
Assessment Year misc
Appeal Filed On 21-02-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH HYDERABAD BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY JUDICIAL MEMBER IT(SS) 20/HYD/07 46/HYD/2009 AND 3/HYD/09 BLOCK ASST. PERIODS. 1996-97 TO 2002-03 & 1991-92 TO 2000-01 & FROM 12-4-2000 TO 12-6-2000 AND BLOCK PERIOD FROM 31-3-96 12-6-2001 TO 31-3-2003 RESPECTIVELY 1) A.RAMULU HYDERABAD PAN: ABQPA 4168 K 2) A. ANJAIAH HYDERABAD. PAN:ABLPA 3094 Q AND 3) SRI LATE A. RAMULU L/R A. ARVIND HYDERABAD. PAN: ABQPA 4168 K .... APPELLANTS VS. DCIT CENTRAL CIR-1 . HYDERABAD. DCIT CIR-9(1) HYD. RESPONDENTS APPELLANTS BY : S/ SHRI K.A. SAI PRASAD & M.S. DAYAKAR RESPONDENT BY : SMT. NIVEDITA BISWAS DATE OF HEARING : 31-05-2012 DATE OF PRONOUNCEMENT: 30 -07-2012 ORDER PER SAKTIJIT DEY J.M.: THESE THREE APPEALS FILED BY DIFFERENT ASSESSEES AR E DIRECTED AGAINST SEPARATE ORDERS OF CIT (A)-VI HYD ERABAD AND THEY PERTAIN TO THE ASSESSMENT PERIODS AS MENTI ONED 2 IT(SS)A 20 46 AND 3 OF 2009 M. RAMULU HYDERABAD.. ABOVE. SINCE COMMON ISSUES ARE INVOLVED IN THESE A PPEALS THESE ARE CLUBBED TOGETHER AND DISPOSED OF BY THIS COMBINED ORDER FOR THE SAKE OF CONVENIENCE. IT(SS)A 20/HYD/2007 AND 46/HYD/2009 :- 2. GROUNDS RAISED IN THESE TWO APPEALS ARE IDENTICA L AND HENCE CLUBBED TOGETHER. FOR THE SAKE OF BREVITY THE FA CTS AS MENTIONED IN IT (SS)A 20/HYD/2007 ARE DEALT WITH HEREUNDER. A SEARC H AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED IN THE H OUSE OF SHRI ABMATI SATYANARAYANA ON 12-6-2000 WHO WAS A RETIRED EMPLO YEE OF THE DRDL HYDERABAD AND WAS ENGAGED IN REAL ESTATE BUSINESS. AS A RESULT OF SEARCH IT WAS FOUND THAT LAND ADMEASURING 10160 SQ . YARDS SITUATED AT SURVEY NO.102/1 AND 102/2 NAMPALLY HYDERABAD WAS U NDER THE POSSESSION OF THREE GROUPS OF PEOPLE AS DESCRIBED B ELOW:- I) SMT. N. ANDALAMMA AND RELATIVES HAVING 31.5% SHARE IN THIS PROPERTY BEING 3202 SQ. YARDS. II) SRI A. ANJAIAH/SRI A. KESAVULU/ SRI A RAMULU HOLDIN G JOINT SHARE OF 38.5% OF TAHE TOTAL AREA OF 10160 SQ. YARD S APPROX. 3313 SQ YARDS III) SRI A. SRINIVAS/SRI N. GANESH/SRI RAJU HAVING 30% J OINT SHARE IN THE TOTAL LAND OF 10160 SQ. YARDS I.E. APPROX. 3 049 SQ. YARDS. THE ENTIRE PROPERTY OF 10160 SQ. YARDS WAS A SERVIC E INAMDARI LAND WHICH WAS ORIGINALLY ALLOTTED TO SRI NARKARI ANANTHAIAH A ND SRI A. CHENNAIAH AND THREE GROUPS OF PERSONS STATED ABOVE HAPPENED TO BE THE DESCENDENT OF THE ORIGINAL OWNERS. A COMPANY IN THE NAME AND STYLE OF M/S SAI SRI FINANCIERS AND M/S SAI SRI PROJECTS PVT. LIMITED OW NED BY ONE SRI M. 3 IT(SS)A 20 46 AND 3 OF 2009 M. RAMULU HYDERABAD.. SAMBASIVA RAO HAD ENGAGED MR. AMBATI SATYANARAYANA AS A MIDDLEMAN/BROKER FOR NEGOTIATING A PURCHASE DEAL O F THE ENTIRE LAND OF 10160 SQ. YARDS FROM THE THREE GROUP OF OWNERS AS M ENTIONED ABOVE. SOME SALE AGREEMENTS WERE ALSO PREPARED FOR SUCH PR OPOSED TRANSFER OF LAND BY SRI AMBATI SATYANARAYANA ON BEHALF OF THE O WNERS IN SEPTEMBER 1999 THE ENFORCEMENT DIRECTORATE GOVERNMENT OF IN DIA HAD CONDUCTED CERTAIN INQUIRIES/INVESTIGATION IN TO ALLEGED VIOLA TION OF FOREIGN EXCHANGE REGULATION ACT PROVISION BY SRI SAMABASIVA RAO PRO MOTER OF TWO COMPANIES MENTIONED ABOVE COMPRISING OF RECEIPT OF CERTAIN SECRET COMMISSION IN FOREIGN EXCHANGE FROM M/S KARSAN LIMI TED IN TURKEY OUT OF A CONTRACT FOR THE SUPPLY OF TWO LAKHS MT OF URE A BY M/S KARSAN LIMITED TO M/S NFL INDIA BUT TRANSMITTED TO INDIA THROUGH U NAUTHORISED CHANNELS WITHOUT THE AUTHORITY FROM THE RBI. SUCH SECRET CO MMISSION WAS USED BY SRI SAMBASIVA RAO AND HIS COMPANIES IN PURCHASE OF 10160 SQ. YARDS OF LAND LOCATED AT NAMPALLY HYDERABAD FROM THE THREE GROUPS OF PERSONS MENTIONED HEREINABOVE SOMETIME IN THE YEAR 1995-96. SUBSEQUENTLY ON THE BASIS OF DEPARTMENTAL INFORMATION SEARCH AND S EIZURE OPERATIONS U/S 132 OF THE ACT WERE CONDUCTED IN THE OFFICE OF AMB ATI SATYANARAYANA IN JUNE 2000. ON THE BASIS OF INCRIMINATING MATERIAL SEIZED IN COURSE OF SEARCH OPERATION IT WAS FOUND THAT VARIOUS PAYMENT S WERE MADE TO THE OWNERS OF THE LAND. THE SEIZED MATERIAL FOUND AS A RESULT OF SEARCH IN THE RESIDENCE OF SRI AMBATI SATYANARAYA AND HIS REL ATIVE SUBBA RAO REVEALED VARIOUS PAYMENTS TO THE OWNERS OF THE LAND . THESE SEIZED MATERIALS WERE UTILISED IN INITIATING BLOCK ASSESSM ENT PROCEEDINGS U/S 158BDE OF THE ACT. 3. ON THE BASIS OF MATERIALS AVAILABLE AS A RESULT OF SEARCH IN THE RESIDENCE OF A. SATYANARAYANA AND R. SUBBA RAO TH E AO CAME TO A CONCLUSION THAT THE TRANSACTION RELATING TO TRANSFE R OF LAND BY THE ASSESSEE AND HIS OTHER RELATIVES IN THE FINANCIAL YEAR 1995- 96 WERE NOT DISCLOSED IN THE REGULAR RETURN OF INCOME FILED. THE AO OBSERVE D THAT THE ACTUAL SALE 4 IT(SS)A 20 46 AND 3 OF 2009 M. RAMULU HYDERABAD.. CONSIDERATION RECEIVED BY THE ASSESSEE FROM THE PUR CHASER I.E. SRI SAI SREE FINANCIERS AND SRI SAI SREE PROJECTS WAS RS.84 LAKHS. THE AO FURTHER OBSERVED THAT THE SINCE THE PROPERTY WAS INHERITED BY THE ASSESSEE ALONG WITH HIS OTHER RELATIVES FROM THEIR FORE FATHERS PRIOR TO 1-4-1981 THE COST OF ACQUISITION WAS ADOPTED AT RS.40/- PER SQ. YARD ON THE BASIS OF INFORMATION OBTAINED FROM THE LAND REGISTERING AUTH ORITIES AND THE INDEXED COST OF ACQUISITION FOR THE YEAR OF SALE 1995-96 WA S DETERMINED AT RS.1 09 958/-. ON THE BASIS OF INDEXED COST OF ACQ UISITION AN AMOUNT OF RS.82 90 015/- WAS CHARGED TO TAX AS LONG TERM CAPI TAL FOR BLOCK PERIOD 1995-96 TO 2002-03. THE ASSESSEE BEING AGGRIEVED F ILED AN APPEAL BEFORE THE CIT (A). 4. THE CIT (A) TAKING INTO CONSIDERATION THE FACT THAT ANDALAMMA GROUP HAD AGREED TO THE ACTUAL SALE OF LAND IN RESP ECT OF THEIR SHARE AS MENTIONED ABOVE CAME TO A CONCLUSION THAT THE ASS ESSEE HAD ACTUALLY RECEIVED RS.8000 PER SQ. YARD IN RESPECT OF THEIR S HARE OF LAND. ON THE BASIS OF AFORESAID FINDING THE CIT (A) CAME TO A C ONCLUSION THAT THE ORDER PASSED BY THE AO ADOPTING THE ACTUAL SALE CONSIDERA TION OF RS. 84 LAKHS IN CASE OF THE ASSESSEE IS JUSTIFIED. 5. THE LD. AR AT THE OUTSET SUBMITTED BEFORE US THA T THE ASSESSMENT IN CASE SMT. ANDALAMMA ON THE BASIS OF WHICH THE CIT (A) HAS COME TO A FINDING THAT THE ASSESSEE HAS RECEIVED RS.84 LAKHS TOWARDS SALE CONSIDERATION HAS BEEN SET ASIDE BY THE ITAT HYDER ABAD BENCH TO THE FILE OF AO FOR RE-EXAMINING THE ISSUE. THE LD. AR THER EFORE SUBMITTED THAT SINCE THE ASSESSMENTS IN THE CASE OF SMT. ANDALAMMA HAS BEEN SET ASIDE THE ASSESSMENT IN CASE OF ASSESSEE ALSO NEEDS O BE SET ASIDE TO THE FILE OF THE AO FOR RE-EXAMINATION. 5 IT(SS)A 20 46 AND 3 OF 2009 M. RAMULU HYDERABAD.. 6. THE LEARNED DR ALSO IS OF THE VIEW THAT THE ASSE SSMENT NEEDS TO BE SET ASIDE TO THE FILE OF THE AO FOR RE-EXAMINATION. 7. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN FROM THE ORDER OF ITAT PASSE D IN CASE OF SMT. ANDALAMMA IN IT(SS)A NO.25/HYD/2007 THE ITAT AFTER CONSIDERING THE FACT THAT IN THE CASE OF THE PURCHASER M/S SAI SRE E PROJECTGS PVT. LTD. THE CO-ORDINATE BENCH OF THE TRIBUNAL VIDE ITS ORDE R DATED 9-3-2012 HAS DECIDED THE ISSUE BY SETTING ASIDE THE ORDER OF THE CIT (A) AND RESTORING THE ENTIRE ISSUE TO THE FILE OF THE AO FOR RE-EXAM INATION. THE ITAT IN CASE OF SMT. ANDALAMMA THOUGHT IT JUST AND PROPER TO SET ASIDE THE ISSUE TO THE FILE OF THE AO FOR RE-EXAMINATION. FOR THE SAKE OF READY REFERENCE THE RELEVANT PORTION FROM THE ORDER OF THE TRIBUNAL IS EXTRACTED HEREUNDER:- WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIALS AVAILABLE ON RECORD. WE FIND THAT THE CIT (A) HAS NOT CONSIDERED THE FACTS OF THE CASE AND IN THE CASE OF THE PURCHASER M/S SAI SREE PROJECTS PVT. LTD. THE CO-O RDINATE BENCH OF THE TRIBUNAL VIDE ITS ORDER DATED 10-2-201 2 HAS DECIDED THE ISSUE IN IT(SS)A NOS. 26 AND 27/HYD/200 7. THE TRIBUNAL HAS HELD AS FOLLOWS: WE HEARD BOTH THE SIDES AND PERUSED THE IMPUGNED OR DER OF THE CIT (A) IN THE LIGHT OF THE ABOVE GROUNDS OF THE RE VENUE ALLEGING VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND RULE 46A OF THE ACT BY THE CIT (A). WE FIND THAT THE FIRST APPELLATE AUTHO RITY HAS INDEED RELIED ON CERTAIN AVERMENTS MADE DURING THE COURSE OF HEARING AND WRITTEN SUBMISSIONS FILED BEFORE HIM WITH REGA RD TO THE CASE 6 IT(SS)A 20 46 AND 3 OF 2009 M. RAMULU HYDERABAD.. FILED BY N. ANDALAMMA AND OTHERS BEFORE THE CHIEF J UDGE CIVIL COURT IN SR NO.17560/2000 IN OP NO.518 OF 1997 AND THE COMMISSIONER OF INCOME-TAX BASED HIS CONCLUSION ON THE AVERMENTS MADE IN THIS PETITION WITHOUT APPRECIATI NG THAT THE SAME HAVE NOT ATTAINED FINALITY HAVING BEEN NOT AC CEPTED BY THE JUDICIAL AUTHORITY BEFORE WHICH THE SAME HAVE BEEN MADE. THIS ACTION OF THE CIT (A) IN THIS BEHALF IN OUR OPINIO N IS BAD IN LAW. FURTHER THE AO HAS NOT OCCASION TO GO THROUGH THES E AVERMENTS AND OFFER HIS COMMENTS THEREON. IN THE CIRCUMSTANC ES WE ARE OF THE VIEW THAT IT WOULD BE IN THE INTERESTS OF JUSTI CE TO SET ASIDE THE ORDER OF THE CIT (A) AND RESTORE THE ENTIRE ISSUE T O THE FILE OF THE AO TO RE-EXAMINE THE SAME AND REDECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEA RING TO THE ASSESSEE. 7. IN THE CASE OF VENDEE M/S SAI SREE PROJECTS PV T. LTD. THE MATTER HAS BEEN SET ASIDE TO THE FILE OF THE AO TO RE-EXAMINE WE DEEM IT FIT TO SET ASIDE THE ISSUE IN THE CASE OF V ENDOR SHEET ANDALAMMA ALSO TO THE FILE OF AO TO RE-EXAMINE THE ISSUE. 8. IT IS SEEN FROM THE ORDER THAT THE FACTS ARE IDE NTICAL AND THE ASSESSEES BELONG TO ONE OF THE GROUPS OUT OF ABOVE- MENTIONED THREE GROUPS. WHEN THE CIT (A) HAS BASED HIS FINDINGS ON THE FACTS RELATING TO SMT. ANDALAMMA WE THINK IT PROPER TO SET ASIDE THE ORDER PASSED BY THE CIT (A) IN CASE OF THE PRESENT ASSESSEE ALSO AND R ESTORE THE MATTER BACK TO THE FILE OF THE AO WHO SHALL RE-EXAMINE THE ISSU E IN THE LIGHT OF OUR ABOVE DIRECTIONS. 9. IN THE RESULT BOTH THE APPEALS ARE TREATED AS A LLOWED FOR STATISTICAL PURPOSES. IT(SS) A NO. 3/HYD/09: - 7 IT(SS)A 20 46 AND 3 OF 2009 M. RAMULU HYDERABAD.. 10. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 28- 3-2008 PASSED BY THE CIT-VI HYDERABAD U/S 263 OF T HE ACT. 11. THOUGH THE ASSESSEE HAS RAISED 8 GROUNDS AT TH E OUTSET THE LEARNED AR CONFINES HIS ARGUMENTS TO GROUND NO.2 ON LY WHICH RELATES TO FAILURE ON THE PART OF THE CIT TO AFFORD A REASONA BLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE PASSING ORDER U/S 263 OF THE ACT. 12. BRIEFLY THE FACTS ARE THE ASSESSEE HAD FILED A RETURN OF INCOME ON 5-3-2004 DECLARING NIL UNDISCLOSED INCOME FOR THE PERIOD FROM 31-3-1996 TO 31-3-2003. THE ACIT CIRCLE-9(1) HYDERABAD COMP LETED THE ASSESSMENT U/S 143(3) READ WITH SECTION 158BD ON 31 -1-2006 DETERMINING THE UNDISCLOSED INCOME AT RS.82 90 015/ -. THE CIT INVOKING HIS JURISDICTION U/S 263 OF THE ACT CALLED FOR THE ASSESSMENT RECORDS FOR THE BLOCK PERIOD FROM 31-3-1996 TO 31-3-2003 AND AF TER EXAMINING IT FOUND THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PR EJUDICIAL TO THE INTERESTS OF REVENUE AND ISSUED A NOTICE TO THE ASS ESSEE TO SHOW CAUSE AS TO WHY THE ASSESSMENT SHOULD NOT BE REVISED OR SET ASIDE. AS PER SHOW CAUSE NOTICE WHICH WAS SERVED ON SRI ARVIND SON OF SRI A. RAMULU THE DATE OF HEARING WAS 20-8-2008. SINCE 20-3-2008 WAS DECLARED HOLIDAY T HE CASE WAS AGAIN POSTED FOR HEARING ON 2 7-3-2008. ON THE DATE OF HEARING SRI ARVIND FILED A LETTER BEING S UPPORTED BY A MEDICAL CERTIFICATE PRAYING FOR ADJOURNMENT OF THE CASE ON THE GROUND THAT HE WAS ADVISED BED REST FOR COUPLE OF WEEKS. THE CIT REJE CTING THE REQUEST FOR ADJOURNMENT PASSED AN ORDER U/S 263 ON THE GROUND T HAT DUE TO PAUCITY OF TIME NO FURTHER OPPORTUNITY OF BEING HEARD TO B E GIVEN. 13. THE LEARNED AR SUBMITS THAT THE CIT ON THE FIRS T DATE OF HEARING ITSELF HAS PASSED THE ORDER WITHOUT AFFORDING AN OP PORTUNITY OF HEARING TO THE ASSESSEE AFTER REJECTING THE APPLICATION FOR AD JOURNMENT. THE LEARNED AR SUBMITTED THAT IN THIS FACTUAL BACKGROUND THE O RDER PASSED U/S 263 NEEDS TO BE SET ASIDE. 8 IT(SS)A 20 46 AND 3 OF 2009 M. RAMULU HYDERABAD.. 14. THE LEARNED DR ALSO FAIRLY SUBMITTED THAT THE O RDER U/S 263 REQUIRES TO BE SET ASIDE AS NO OPPORTUNITY OF HEARING WAS GR ANTED TO THE ASSESSEE. 15. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED HE MATERIALS ON RECORD. IT IS APPARENT FROM THE ORDER PASSED U/S 26 3 BY THE CIT THAT THE CASE WAS POSTED ON 27-3-2008 ON WHICH DATE SON OF THE ASSESSEE FILED A LETTER PRAYING FOR ADJOURNMENT ON MEDICAL GROUND. T HE CIT PASSED HIS ORDER ON THE VERY DAY ITSELF REJECTING THE REQUEST OF THE ASSESSEE. IN OUR VIEW SUCH AN ORDER PASSED BY THE CIT IS IN GROSS V IOLATION OF NATURAL JUSTICE AS NO PROPER OPPORTUNITY OF BEING HEARD WAS EXTENDED TO THE ASSESSEE. WE THEREFORE SET ASIDE THE ORDER PASSED BY THE CIT U/S 263 AND DIRECT THE CIT TO PASS AN ORDER AFRESH AFTER AF FORDING AN ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. SINCE WE ARE REMITTING THE MATTER BACK TO THE FILE OF CIT THE OTHER GROUNDS R AISED IN THIS APPEAL HAVE BECOME MERELY ACADEMIC AND THEREFORE NOT ADJUD ICATED UPON. 16. IN THE RESULT ALL THREE APPEALS FILED BY THE A SSESSES ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 30-7-2012. SD/- SD /- (CHANDRA POOJARI) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD DATED 30 TH JULY 2012. COPY TO:- 1) ALL ASSESSEES C/O GANDHI & GANDHI CAS 1002 PAI GAH PLAZA BASHEERBAGH HYDERFABAD. 2) ACIT/DCIT CIR-9(1) GAGAN VIHAR HYDERABAD. 3) THE CIT (A)-VI HYDERABAD. 4) THE CIT CONCERNED HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE I.T.A.T. HYDERABA D. JMR* 9 IT(SS)A 20 46 AND 3 OF 2009 M. RAMULU HYDERABAD..