R Gowreesham, Hyderabad v. ACIT, Hyderabad

ITSSA 56/HYD/2009 | misc
Pronouncement Date: 31-12-2010 | Result: Partly Allowed

Appeal Details

RSA Number 5622516 RSA 2009
Assessee PAN AFFPG1912F
Bench Hyderabad
Appeal Number ITSSA 56/HYD/2009
Duration Of Justice 1 year(s) 1 month(s) 3 day(s)
Appellant R Gowreesham, Hyderabad
Respondent ACIT, Hyderabad
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 31-12-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 31-12-2010
Date Of Final Hearing 13-12-2010
Next Hearing Date 13-12-2010
Assessment Year misc
Appeal Filed On 27-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI G.C.GUPTA VICE PRESIDENT A ND SHRI AKBER BASHA ACCOUNTANT MEMBER IT(SS)A NO.56/HYD/2009 ( BLOCK PERIOD FROM 1991-92 TO 2000-01(UPTO 14.9.2000) ) SHRI R.GOWREESHAM HYDERABAD ( PAN- AFFPG 1912 F ) V/S ASST. COMMISSIONER OF INCOME- TAX CENTRAL CIRCLE 5 HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.RAMA RAO RESPONDENT BY : SHRI V . SRINIVAS CIT-DR O R D E R PER AKBER BASHA ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) I HYDERABAD DATED 13.10.2009 FOR THE BLO CK PERIOD FROM 1991-92 TO 2000-01 (UPTO 14.9.2000). 2. EFFECTIVE GROUNDS OF THE ASSESSEE IN THIS APPEAL READ AS FOLLOWS- '1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOM E- TAX(APPEALS) IS ERRONEOUS TO THE EXTENT IT IS PREJU DICIAL TO THE APPELLANT HEREIN. 2. THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING THE EXPENDITURE TO BE CONSIDERED IN THE ASSESSMENT OF THE APPELLANT AT RS.2 93 700/-. HE OUGHT TO HAVE CONSID ERED THE EXPLANATION OF THE APPELLANT HEREIN AND ARRIVED AT THE CORRECT AMOUNT OF EXPENDITURE TO BE CONSIDERED IN T HE ASSESSMENT OF THE APPELLANT HEREIN. IT(SS)A.NO.56/HYD/20 09 SHRI R.GOWREEESHAM HYDERABAD 2 3. THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING THE A DDITION MADE BY THE ASSESSING OFFICER WITHOUT CONSIDERING T HE AVAILABLE SOURCES FOR THE APPELLANT AND HIS FAMILY MEMBERS. THE LEARNED CIT(APPEALS) OUGHT TO HAVE CORRECTLY A NALYSED THE ORDER OF THE HONOURABLE ITAT AND DIRECTED THE A SSESSING OFFICER TO DELETE THE AMOUNT TO THE EXTENT THE SOUR CES PROVED FROM OUT OF THE ADMITTED INCOME BY THE APPEL LANT HEREIN.' 3. FACTS OF THE CASE IN BRIEF ARE THAT CONSEQUENT TO A SEARCH OPERATION UNDER S.132 OF THE ACT AT RESIDENTIAL PREMI SES OF THE ASSESSEE ON 14.9.2000 ASSESSMENT WAS COMPLETED UNDER S.143(3 ) READ WITH S.153C ON 30.9.2002 DETERMINING THE TOTAL INCOME OD THE ASSESSEE AT RS.23 95 322 WHICH INCLUDES ADDITION ON ACCOUNT OF UNACCOUNTED COURT EXPENSES AND UNDISCLOSED INCOME ASSESSABLE UN DER THE HEAD SALARY. ON APPEAL THE CIT(A) HAS GIVEN PAR TIAL RELIEF. ON FURTHER APPEAL FILED BEFORE THE TRIBUNAL THE TRIBU NAL VIDE ITS ORDER DATED 20.6.2008 IN IT(SS)A NO.178/HYD/2005 DIRECTED THE ASSESSING OFFICER TO DELETE THE SALARY INCOME AS IT DOES NOT REPRE SENT UNDISCLOSED INCOME AND IN OF FAR AS COURT EXPENDITURE IS CONCERNED THE TRIBUNAL HAS DIRECTED THAT EXPENSES ON LITIGATION I NCURRED BETWEEN 28.12.1999 TILL THE DATE OF SEARCH WILL BE TAKEN INTO CONSIDERATION AND 50% THEREOF TO BE CONSIDERED AS EXPENDITURE INCURRED BY THE ASSESSEE AFTER DEDUCTING THE KNOWN SOURCES OF INCOME ADMITTED. IN PURSUANCE OF THE DIRECTION OF THE TRIBUNAL THE ASSESSING OFFICER F RAMED THE ASSESSMENT VIDE ORDER DATED 9.2.2009 UNDER S.143(3) R .W.S. 158BC AND S.254 OF THE I.T. ACT WHEREBY HE DETERMINED THE TOTAL UNDISCLOSED INCOME OF THE ASSESSEE AT RS.5 79 852 REDETERMINING THE ADDITION ON ACCOUNT OF UNACCOUNTED COURT EXPENSES COMPUTED AS PER THE DIRECTIONS OF THE TRIBUNAL AT RS.1 42 850. ON APPEAL THOUGH THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE INSOFA R AS DISALLOWANCE OF COURT EXPENSES IS CONCERNED HE CONFIRMED T HE IT(SS)A.NO.56/HYD/20 09 SHRI R.GOWREEESHAM HYDERABAD 3 UNACCOUNTED COURT EXPENSES TAKEN BY THE ASSESSING OFFICER AT RS.2 65 350 AND ALSO CONFIRMED ADDITION MADE BY THE A SSESSING OFFICER IN THAT BEHALF. AGGRIEVED BY THE ORDER OF TH E CIT(A) ON THE ASPECT OF DISALLOWANCE OF COURT EXPENSES THE ASSESSEE PREFER RED THE PRESENT APPEAL BEFORE US. 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATING T HE CONTENTIONS URGED BEFORE THE LOWER AUTHORITIES SUBMITT ED THAT THE CIT(A) WAS NOT CORRECT IN DETERMINING THE UNACCOUNTED COU RT EXPENSES AT RS.1 42 850. INVITING OUR ATTENTION TO PAGES 16 A ND 18 OF THE PAPER-BOOK HE SUBMITTED THAT THERE WAS DUPLICATION O F RS.35 000 AGAINST THE NAME OF PURA PANDARI OS 12/2000 AND CA SH OF RS.25 000 PAID TO R.YADAGIRI THROUGH CHEPURI BRAHMANANDAM AS IT FIGURED TWICE IN THE LIST OF THE EXPENSES ON THE SUITS FILED. IF THI S DUPLICATION IS RECTIFIED THE EXPENSES WOULD SCALE DOWN BY RS.60 000 FRO M RS.2 65 350 TO RS.2 05 350 AND CONSEQUENTLY THE ADDI TION MADE BY THE ASSESSING OFFICER HAS TO BE FURTHER REDUCED. HE FURTHE R SUBMITTED THAT SINCE ASSESSEE HIS WIFE AS WELL AS HIS SON ARE ALL INCOME- TAX ASSESSEES THE EXPENSES ON ACCOUNT OF COURT EXPENSES HAVE BEEN MET BY VARIOUS MEMBERS OF FAMILY AND AS SUCH ASSESSEE SHOULD BE DEEMED TO HAVE EXPLAINED SOURCES FOR SOME MORE AMOUNT O F COURT EXPENSES. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND STRONGLY SUPPORTING THE ORDERS OF THE LOWER AUTH ORITIES SUBMITTED THAT THE ADDITION ON ACCOUNT OF UNACCOUNTED COU RT EXPENSES SUSTAINED BY THE CIT(A) SHOULD BE UPHELD. IT(SS)A.NO.56/HYD/20 09 SHRI R.GOWREEESHAM HYDERABAD 4 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. IT CANNOT BE DISPUTE D THAT ALL THE ITEMS OF COURT EXPENSES HAVE NOT BEEN PROPERLY ACCOUNTED BY TH E ASSESSEE AND UNACCOUNTED COURT EXPENSES HAVE COME TO LIGHT AS A R ESULT OF SEARCH ACTION UNDER S.132 OF THE ACT ON THE RESIDENTIAL PREMISES OF THE ASSESSEE. THE QUESTION FOR CONSIDERATION IS WITH REGARD T O DETERMINATION OF SUCH UNACCOUNTED COURT EXPENSES AND DET ERMINING REASONABLE ADDITION THAT CAN BE MADE ON THAT ACCOUNT. AS NOTED ABOVE TAKING US THROUGH PAGE 16 AND 18 OF THE PAPER -BOOK WHICH CONTAINS THE DETAILS OF THE COURT EXPENSES INCURRED BY T HE ASSESSEE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE WAS DUPLICATION OF TWO AMOUNTS OF RS.35 000 AND RS.25 000 BEING AMOU NTS PAID TO PURA PANDARI AND CASH PAID TO R.YADAGIRI THROUGH CHE PURI BRAHMANANDAM WHICH APPEARED TWICE IN THE DETAILS OF EXPENSES. WE ARE NOT CONVINCED WITH THIS EXPLANATION OF THE ASSESSEE F IRSTLY BECAUSE IT NEED NOT BE NECESSARY THAT THERE WAS DUPLICATION IN R ECORDING EXPENSES PAID TO THESE PARTIES AND THEY COULD IN FACT BE REPRESENTING PAYMENT OF IDENTICAL AMOUNTS TO THESE TWO PARTIES ON TWO OCCASIONS. ASSESSEE HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO SUBSTANTI ATE ITS CLAIM THAT THERE WAS DUPLICATION IN RECORDING THESES TWO PAYMENTS. FURTHER THE DETAILS OF COURT EXPENSES ON PAGE 18 ARE NOT FURNISHED DATE WISE AND IN BETWEEN THESE TWO AMOUNTS PAID TO TH ESE PARTIES RECORDED TWICE IN THE LIST THERE ARE SEVERAL OTHER PAY MENTS WHICH ALSO GIVES RISE TO SITUATION WHERE ONE CAN BELIEVE THAT THEY MAY BE REPRESENTING EXPENSES OF IDENTICAL AMOUNTS INCURRED ON T WO DIFFERENT OCCASIONS IN RESPECT OF TWO SETS OF DIFFERENT TRANSACTIONS WITH THE VERY SAME PARTIES. IN THE ABSENCE OF ANY CLINCHING EVIDENCE TO SUGGEST THAT THERE WAS INDEED DUPLICATION WE ARE NOT INCLINED TO ACCEPT THE IT(SS)A.NO.56/HYD/20 09 SHRI R.GOWREEESHAM HYDERABAD 5 VERSION OF THE ASSESSEE IN THAT BEHALF. HOWEVER CONSIDERI NG THE FACT THAT THE ASSESSEE'S WIFE AS WELL AS HIS SON ARE INCOME-TAX A SSESSEES THEY TOO MIGHT HAVE MET PART OF THE COURT EXPENSES. WE FIND SOME FORCE IN THE CONTENTION OF THE ASSESSEE IN THIS BEHALF. I N VIEW OF THIS AND CONSIDERING TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE WE FEEL THAT A ROUNDSUM ADDITION OF RS.1 00 000 AFTER GIVING 50% WEIGHTAGE IN TERMS OF THE DIRECTIONS OF THE TRIBUNAL IN ITS EARLI ER ORDER OUT OF THE TOTAL UNACCOUNTED COURT EXPENSES WOULD MEET THE ENDS OF JUSTICE. WE ACCORDINGLY AND SUSTAIN A ROUNDSUM ADDITION OF RS.1 00 000 ON ACCOUNT OF UNACCOUNTED FOR COURT EXPENSES. REMAINING ADDIT ION SUSTAINED BY THE CIT(A) IS DELETED AND TO THIS EXTENT GROUNDS OF THE ASSESSEE IN THIS APPEAL ARE ALLOWED. 7. IN THE RESULT ASSESSEE'S APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 31ST DECEMBER 2010 SD/- SD/- (G.C.GUPTA) (AKBER BASHA) VICE PRESIDENT. ACCOUNTANT MEMBER. DT/- 31ST DECEMBER 2010 COPY FORWARDED TO: 1. SHRI R.GOWREESHAM C/O. SHRI S.RAMA RAO ADVOCATE 102 SHRIYA'S ELEGANCE DOOR NO.3-6-643 STREET NO.9 HIMAYATNAGAR HYDERABAD. 2. ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 5 HYDERABAD 3. CIT(A) I HYDERABAD 4. COMMISSIONER OF INCOME-TAX-III HYDERABAD. 5. THE D.R. ITAT HYDERABAD. B.V.S. IT(SS)A.NO.56/HYD/20 09 SHRI R.GOWREEESHAM HYDERABAD 6