P.Kamalakar Reddy, Nellore v. ACIT, Tirupathi

ITSSA 99/HYD/2004 | misc
Pronouncement Date: 13-01-2011 | Result: Allowed

Appeal Details

RSA Number 9922516 RSA 2004
Assessee PAN YEARS1978T
Bench Hyderabad
Appeal Number ITSSA 99/HYD/2004
Duration Of Justice 6 year(s) 3 month(s) 14 day(s)
Appellant P.Kamalakar Reddy, Nellore
Respondent ACIT, Tirupathi
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 13-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 13-01-2011
Assessment Year misc
Appeal Filed On 29-09-2004
Judgment Text
` IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI N.R.S. GANESAN JUDICIAL MEMBER AND SHRI AKBER BASHA ACCOUNTANT MEMB ER IT (SS) A NO.99/HYD/04 :BLOCK ASSTT. PERIOD 1 991-92 TO 2001-02 P. KAMALAKAR REDDY 14/91 KAPU STREET NELLORE. VS ACIT CENTRAL CIRCLE TIRUPATI. (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. K. UMA RESPONDENT BY : SMT. VASUNDHRA SINHA O R D E R PER AKBER BASHA ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF THE CIT (A) TIRUPATI DATED 28-7-2004 AND IT PERTAI NS TO THE BLOCK ASSESSMENT PERIOD FROM 1991-92 TO 2001-02 & BROKEN PERI OD FROM 1-4- 2000 TO 9-11-2000. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AGGRIE VED AGAINST THE ADDITIONS OF RS.5 80 000 OF UNDISCLOSED INCO ME MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT [A] IN THE BLO CK ASSESSMENT AS AGAINST NIL RETURN OF INCOME FILED. A SEARCH AND SEI ZURE OPERATION UNDER SECTION 132 WAS CONDUCTED IN THE RESIDENTIAL PREMI SES OF THE ASSESSEE ON 9-11-2000. CASH AND OTHER DOCUMENTS WERE SEIZE D. THE ASSESSEE APART FROM EARNING INCOME AS TEACHER WAS ALSO EAR NING IT(SS)A NO. 99/HYD /2004 SHRI KAMALAKAR REDDY NELLO RE ======================== . 2 INCOME FROM AGRICULTURAL ACTIVITY. IT IS CLAIMED THAT HE WAS WORKING AS A TEACHER AT NELLORE DURING THE YEARS 1978 TO 1989. THE ASSESSEE FILED THE BLOCK RETURN SHOWING NIL UNDISCLOSED INCOME. ON T HE BASIS OF THE SEIZED MATERIAL THE ASSESSING OFFICER FOUND THAT LOAN D EBTORS OF RS.5 80 000/- COULD NOT BE EXPLAINED BY THE ASSESSEE AS TO THE SOURCE OF SUCH ASSETS AND ACCORDINGLY CONSIDERED THE SAME AS UNEXPLAI NED INVESTMENT UNDER SECTION 69 OF THE ACT AND ACCORDINGLY AD DED AS UNDISCLOSED INCOME OF THE ASSESSEE. ON APPEAL THE CIT [ A] CONFIRMED THE ACTION OF THE ASSESSING OFFICER. AGGRIEVED FURTHER THE ASSESSEE IS IN APPEAL BEFORE US. EVEN THOUGH ELABORATE GROUNDS O F APPEAL ARE FILED BY THE ASSESSEE BEFORE US NARRATING VARIOUS ISSUES INCLUDING LEGALITY AND VALIDITY OF BLOCK ASSESSMENT THE LEARNED COUNSEL FOR THE ASSESSEE ARGUED ONLY WITH REGARD TO OPENING MONEY LENDING CAP ITAL OF RS.50 000/- AND EXISTENCE OF NSC BONDS DATED 9-6-1987 OF RS.80 000/- AND ITS ACCUMULATION OF INTEREST WAS THE SOURCE S FOR THE INVESTMENT IN LOAN DEBTORS. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE ASSESSEE HAD OPENING MONEY LENDING CAPITAL OF RS.50 000 EXISTENCE OF 6 YEARS NSC BONDS ETC. OF RS.80 000/- AS PER SEIZED MATE RIAL APKR5/2. ON ITS LATER MATURITY PROCEEDS OF RS.1.60 LAKHS AND THE 11 YEAR ANNUAL EARNINGS OF INTEREST OF RS.3 41 000/- THE ASSESSEE HAD SUF FICIENT SOURCE TO LEND DEBTS OF RS.5 80 000/-. THEREFORE THERE WA S NO UNEXPLAINED INVESTMENT IN MONEY LENDING DEBTS OF RS.5.80 LAKHS WHICH COULD NOT BE TREATED AS UNDISCLOSED AND UNEXPLAINED INVESTMENT INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD UNDER CONSIDERATION. IN SUPP ORT OF HIS CLAIM THE LEARNED COUNSEL FOR THE ASSESSEE FILED ADDITIO NAL EVIDENCE IN THE FORM OF CERTIFICATE ISSUED BY THE POST MASTER MENTION ING THE IT(SS)A NO. 99/HYD /2004 SHRI KAMALAKAR REDDY NELLO RE ======================== . 3 PARTICULARS SUCH AS NUMBER OF CERTIFICATE AMOUNT AND INTE REST DATE OF INVESTMENT AND DATE OF MATURITY AND PAGE NUMBER IN T HE REGISTER OF POST OFFICE. 4. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REP RESENTATIVE RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE SEAR CH WAS CONDUCTED IN THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 9-1-2000. THE CIT [A] CONFIRMED THE ADDITION MAINLY ON THE REASONS THAT THE ASSESSEES SALARY INCOME IS VERY LOW WHICH IS SUFFICIENT TO MAINTAIN HIS FA MILY AND THE SAVINGS OF RS.50 000/- OUT OF THE SAID SALARY CLAIMED TO BE THE LENDING CAPITAL IS UNIMAGINABLE AND ALSO WITH REGARD TO EXISTEN CE OF NSC BONDS IN 1991 THE DETAILS ON WHICH THE ASSESSEE RELIED UPON DI D NOT PROVIDE ANY CLARITY THAT THE INVESTMENTS ON NSC BONDS WAS AVAIL ABLE TO HIM ON OR BEFORE 31 ST MARCH 1991 TOGETHER INTEREST AFTER ENCASHMENT. WE FI ND THAT THE ASSESSEE WAS A PHYSICAL TRAINING TEACHER FOR AROUN D 14 YEARS AND ALSO DOING SOME AGRICULTURAL ACTIVITIES. HENCE THE SAV INGS FROM SALARY INCOME AND OTHER AGRICULTURE ACTIVITIES TO THE TU NE OF RS.50000/- IN THE YEAR 1990 APPEARS TO BE REASONABLE. WE FIND THAT THE LOWER AUTHORITIES OMITTED TO CONSIDER THE NSC BONDS OF RS.80 0 00/- EXISTED IN 1987 AS AVAILABLE TO THE ASSESSEE FOR LATER INVESTMENT IN MONEY LENDING ON SIMPLE GROUND THAT NO ENCASHMENT PARTICULARS OF NSC BONDS HAVE BEEN SUBMITTED. THE ENTIRE ADDITIONS MADE BY THE L OWER AUTHORITIES ARE MERELY ON SUSPICIONS AND SURMISES. THE REVENUE DID NOT BRI NG ANY THING ON RECORD TO SHOW THAT THE NSC BONDS BELONGS TO THE HUF OF THE ASSESSEE AND NOT IN HIS INDIVIDUAL CAPACITY. WHEREAS THE LEARNED IT(SS)A NO. 99/HYD /2004 SHRI KAMALAKAR REDDY NELLO RE ======================== . 4 COUNSEL FOR THE ASSESSEE CLEARLY POINTED OUT THAT AS PER THE BALANCE SHEET OF THE HUF FOR THE FINANCIAL YEAR 1990-91 THE B ALANCE SHOWN AGAINST NSC BONDS WAS RS.6 938/- ONLY. HENCE IN OUR CON SIDERED VIEW THE EXISTENCE OF NSC BONDS OF RS.80 000 IN 1987 APPEAR S TO BELONG TO THE ASSESSEE IN HIS INDIVIDUAL CAPACITY ONLY AND THEREFOR E IF BOTH THE ITEMS I.E. OPENING SAVINGS OF RS.50 000/- AND NSC BOND S OF RS.80 000/- TAKEN TOGETHER WITH THE INTEREST ACCUMULATI ON FOR 11 YEARS COULD BE THE SOURCES FOR HIS UNEXPLAINED INVESTMENT WHI CH HAS BEEN CONSIDERED BY THE REVENUE UNDER SECTION 69 OF THE ACT. AFTER CONSIDERING THE TOTALITY OF FACTS AND THE CIRCUMSTANCES OF T HE CASE WE ARE OF THE VIEW THAT THE LOWER AUTHORITIES ARE NOT J USTIFIED IN TREATING THE SAID INVESTMENTS I.E. LOAN DEBTORS OF RS.5 80 000/- AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD UNDER CONSIDER ATION. ACCORDINGLY WE DIRECT TO DELETE THE SAME. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 13-01-2011. SD/- SD/- (N.R.S. GANESAN) (AKBER BASHA) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DT/- 13-01-2011. COPY FORWARDED TO: 1. SRI P. KAMALAKAR REDDY 14/91 KAPU STREET NELL ORE-1. 2. 3. 4.. 5. JMR* ACIT CENTRAL CIRCLE TIRUPATI. CIT (A) TIRUPATI. CIT AP. HYDERABAD. THE DR ITAT HYDERABAD. IT(SS)A NO. 99/HYD /2004 SHRI KAMALAKAR REDDY NELLO RE ======================== . 5