9911796707
TMI Blog2015 (12) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... d. V/s. DCIT (2012 (7) TMI 222 - ITAT MUMBAI(SB)). Admittedly, in the present case, as far as agricultural income is concerned, it has been considered in the original assessment proceedings. Therefore, in the absence of any incriminating material found during the second search and seizure operation conducted on 8.12.2011, to show that agricultural income was inflated, the Assessing Officer cannot consider this issue again in the impugned re-assessment proceedings. Accordingly, we delete the addition made by the Assessing Officer treating part of the agricultural income declared as income from other sources. - Decided in favour of assessee Unexplained investment under S.69B - Held that:- As the statement of Srhi T.Ranga Rao, the entire charge sheet(s) filed by CBI and information gathered by the department through enquiry have not been brought on record before us either by assessee or department, we are unable to examine the extent of assessee’s involvement, if at all, in the irregularities alleged by CBI or whether the assessee has also been implicated by the investigation agency or any other person. Therefore, in our view, issue relating to payment of on-money requires to be ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment dates are in sequence. It is to be noted, as per the seized document, the payment immediately after assessee is ₹ 10 lakhs to Puri Jagannadh in February, 2011. Since, all subsequent payments are in chronological order, assessee’s contention that payment made to him, if at all, is prior to February, 2011 is acceptable. Keeping these facts in view when the Bench made a specific query to Learned Departmental Representative to explain how Assessing Officer has correlated the payment to the impugned assessment year, he has no valid answer for the same. Therefore, even accepting for argument’s sake that contents of seized document are correct, but certainly, it cannot be linked to the impugned assessment year. Thus, looked at from any angle, the addition cannot be sustained. Accordingly, allowing assessee’s ground, we delete the addition of ₹ 2 crores. - Decided in favour of assessee Allowance of TDS credit of ₹ 5 lakhs - Held that:- Assessing Officer does not dispute the fact that the assessee actually received ₹ 45 lakhs by way of cheque and balance ₹ 5 lakhs by way of TDS. It is also not disputed that the assessee returned the entire amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure operation under S.132 of the Act was conducted in the case of the assessee on 8.12.2011. Consequent to the said search and seizure operation, as aforesaid, the Assessing Officer issued notice under S.153A of the Act, calling upon the assessee to furnish his return of income. In response to the said notice, the assessee filed his return of income on 31.10.2013 declaring loss of ₹ 1,29,795 besides agricultural income of ₹ 1,39,945 as declared in the original return. The Assessing Officer while completing the assessment, however, was of the view that in view of the fact that agricultural income of only ₹ 63,400 was accepted in assessment year 2008-09, treated the balance agricultural income declared in the year under consideration of ₹ 76,545 as income from other sources. 5. Being aggrieved by the assessment order, assessee preferred appeal before the first appellate authority on this issue, who, however, dismissed the assessee s appeal on this issue, confirming the addition made by the Assessing Officer, and hence, the assessee is in second appeal before us. 6. The learned counsel submitted before us that prior to the date of search i.e. 8.12.2011, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings. Therefore, in the absence of any incriminating material found during the second search and seizure operation conducted on 8.12.2011, to show that agricultural income was inflated, the Assessing Officer cannot consider this issue again in the impugned re-assessment proceedings. Accordingly, we delete the addition of ₹ 76,545 made by the Assessing Officer treating part of the agricultural income declared as income from other sources. 9. Consequently, this appeal of the assessee is allowed. ITA No.286/Hyd/2015 : Assessment year 2007-08 10. The only issue involved in this appeal, directed against the order of the Commissioner of Income-tax(Appeals) 12, Hyderabad dated 29.1.2015 for the assessment year 2007-08, is challenging the validity of assessment under S.153A. 11. Facts in this appeal are more or less identical to the facts discussed in the context of appeal for assessment year, viz. ITA No.256/Hyd/2015 for assessment year 2006-07. Only difference being in this assessment year, assessee declared agricultural income of ₹ 66,000 and the Assessing Officer while completing the assessment has restricted the agricultural income to ₹ 63,400 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e before the CIT(A), who, however, sustained the disallowance made by the Assessing Officer. Hence, assessee is in second appeal before us on this issue. 16. We have considered the submissions of the parties and perused the material on record. As could be seen, though the extent of agricultural land holding of the assessee, i.e. 3.95 acres remained the same all through, the income declared by the assessee varied from year to year. It is, however relevant to note, the fact that the assessee has earned agricultural income is not disbelieved by the departmental authorities, though not to the extent declared by the assessee. However, considering the extent of land held by the assessee and the fact that the Departmental authorities also did not dispute the earning of agricultural income by the assessee, we hold that the income declared from agricultural activities by the assessee is reasonable. Therefore, we delete the disallowance made by the Assessing Officer on this aspect and allow this ground. 17. The next issue raised in ground No.3 relates to the addition made of ₹ 1,99,20,000 as unexplained investment under S.69B of the Act. 18. Briefly, facts relating to this iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded in the registered sale deeds. He further observed that in the appellate proceedings in the case of EHTPL, additional evidence brought in the form of charge-sheets and supplemental charge sheets filed by the CBI, also revealed that buyers of plots have paid on money in addition to the recorded sale consideration. Thus, on the basis of the statement of Shri Tummala Ranga Rao and the information gathered from certain buyers of plots, the Assessing Officer observed that assessee s version that he has not paid any on money towards purchase of plot cannot be believed. Accordingly, by observing that actual sale value paid by the assessee to EHTPL is not ₹ 5,000 per sq. yard as mentioned in sale deed, but ₹ 15,000 per sq.yad, made an addition of ₹ 1,99,20,000 under S.69B of the Act. 19. Being aggrieved by the addition made, assessee challenged the same before the CIT(A). Before the first appellate authority, it was pleaded by the assessee that entire payment was made through bank account of the assessee and his wife and the payments are duly reflected in the financial statements and books of account and apart from the recorded payment, no on money was paid . It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation/material gathered without supplying the same to the assessee is in violation of rules of natural justice, and hence, the assessment made has to be struck down. In this context, he relied upon the decision of the Hon'ble Supreme Court in the case of Andaman Timber Industries V.s. CCE (Appeal No.4228 of 2006). 21. The Learned Departmental Representative, on the other hand, submitted that the information gathered by the Assessing Officer clearly revealed that on-money was paid by the assessee for purchasing the Villa. However, the Learned Departmental Representative submitted that if it is felt that there is violation of principles of natural justice because the Assessing Officer has not confronted the assessee with the materials utilised for making the addition, and has not allowed opportunity to the assessee to cross examine Shri T.Ranga Rao, then the matter may be remitted back to the Assessing Officer for giving an opportunity to the assessee to cross examine the witness, and put forth his say on the adverse material gathered by the Assessing Officer, so that principles of natural justice are complied with. 22. In the rejoinder, the learned counsel for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer to conduct any enquiry or investigation as found necessary for ascertaining the real nature of transaction or income, at the same time, it is salutary principle of law that any adverse material gathered by him, which he proposes to utilise against the assessee, must be confronted to the assessee for allowing him an effective opportunity of rebuttal. This is in keeping with the principle of natural justice that no person should be condemned without giving a fair opportunity of hearing. In the present case, though the basis for addition is the statement recorded from Shri T. Ranga Rao, admittedly, the Assessing Officer has neither supplied a copy of the statement to the assessee nor allowed him an opportunity to cross examine him, though the assessee in his letter dated 13.3.2014 has specifically asked for cross examination of Shri T.Ranga Rao. In the aforesaid view of the matter, there is violation of rules of natural justice by the Assessing Officer while making the addition of ₹ 1,99,20,000. Therefore, the addition made by the Assessing Officer, on account of alleged payment of on-money, cannot be sustained. 24. Having held so, it is necessary to exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of on-money requires to be examined afresh by Assessing Officer after confronting evidence/material sought to be relied upon to the assessee and seeking his response on them. The Assessing Officer must also disclose to the assessee the material/information on the basis of which he has quantified the on-money payment of ₹ 1,99,20,000. If the Assessing Officer is able to establish on the basis of evidence gathered that the assessee has paid onmoney to the extent quantified by him, then he can make the addition under S.69B. On the flip side, if there is no evidence available on record to directly link the assessee towards payment of on-money, then merely on the basis of the fact that some other buyers have accepted payment of on-money, no addition can be made. With the aforesaid observations, we remit the issue to the file of the Assessing Officer with a direction to re-decide the same afresh in accordance with law, after giving reasonable opportunity to the assessee, duly complying with the principles of natural justice. This ground of the assessee is allowed for statistical purposes. 25. Ground No.4 relates to disallowance of assessee s claim for depreciation of an amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold the orders of the Revenue authorities on this issue, and reject this ground. 31. In the result, this appeal of the assessee is treated as partly allowed. ITA No.56/Hyd/2015 : Assessment year 2010-11 ITA No.57/Hyd/2015 : Assessment year 2011-12 ITA No.58/Hyd/2015 : Assessment year 2012-13 32. In these three appeals directed against similar but separate orders of the learned Commissioner of Income-tax(Appeals)-12, Hyderabad, dated 28.11.2014 for the assessment years 2010-11 and 2011-12 and dated 12.12.2014, the first common effective ground relates to the additions made treating part of agricultural income declared by the assessee as income from other sources. The additions made are ₹ 1,19,000 (out of agricultural income claimed of ₹ 2,10,000) for assessment year 2010-11, ₹ 1,01,000 (out of agricultural income claimed of ₹ 2,10,000) for assessment year 2011-12 and ₹ 89,000 (out of agricultural income claimed of ₹ 2,20,000) for assessment year 2012-13. Facts and circumstances of the case involved in these years are similar to those considered in the preceding years. Hence, for the reasons discussed hereinabov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheque from the movie Businessman without disclosing the amount of ₹ 2 crore in cash as revealed from seized material. The Assessing Officer, therefore, issued summons to both assessee and the producer Shri j.V.Phanindra Reddy. As observed by Assessing Officer, both assessee and Shri Reddy flatly denied of any payment having been made in cash over and above the cheque payments. Assessing Officer, however, disbelieved the statements of assessee and Shri Reddy. He observed that when the cheque payments recorded in the seized material was accepted as correct, cash payments recorded cannot be denied. He further observed, in view of the specific provision of S.292C presumption could be, the contents of seized material are true. Though assessee strongly protested before the Assessing Officer by stating that loose sheets seized from a third party cannot form the basis for addition and also relied upon some judicial authorities in that context, the Assessing Officer rejecting all contentions of assessee treated the amount of ₹ 2 crore as the undisclosed income of the assessee for the year. Though the assessee challenged the addition in appeal, the learned CIT(A) sustained the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mittedly, apart from this document, no other evidence/material was found or has been brought on record to demonstrate that cash payment of ₹ 2 crore was actually made to assessee. More importantly, even though a search operation was also carried out in the case of assessee, no incriminating material was found. It is also a fact on record that pursuant to summons issued, both the assessee as well as the producer of the movie appeared before the Assessing Officer and denied of having made any cash transaction as recorded in the seized document. In fact, a confirmation letter obtained from the producer stating therein that entire remunerations are paid in cheques was also submitted before the Assessing Officer. Further, remuneration received by the assessee for the movie Businessman as reflected in assessee s bank account and books of account is also in agreement with the books of accounts maintained by the producer. In these circumstances, explanation furnished by Shri Phanindra Reddy before the Assessing Officer to the effect that payments recorded in the loose sheet are for enhancement of budget from exhibitors appears plausible. Moreover, except the loose sheet seized from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed cross objections in these appeals raising some technical issues. 43. Having considered the rival submission of the parties and perused the material on record, in the light of the relevant statutory provisions as well as judicial precedents cited, we are of the view that in so far as the appeals for the assessment years 2009-10 to 2011-12 are concerned, the orders of the learned first appellate authority on the issue is in accordance with statutory provisions hence, they call for no interference. Accordingly, we uphold the decision of the learned CIT(A) for those years and dismiss the appeals of the Revenue. 44. As for the appeal for assessment year 2012-13, viz. ITA 395/Hyd/2015, it is a regular assessment under S.143(3) of the Act. Therefore, in our view, interest computed by the Assessing Officer under S.234B is in order. However, considering the fact that we have deleted the addition of ₹ 2 crores made by the Assessing Officer, while dealing with the appeal of the assessee, being ITA No.58/Hyd/2015, for that year hereinabove, we direct the Assessing Officer to recompute the interest under S.234B of the Act, giving consequential relief to the assessee. This app ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
