Income Tax Appellate Tribunal - Hyderabad
Suttari Rekha (Lr Of M. ... vs Ito, Ward-1, Karimnagar, Karimnagar on 14 June, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCHES "B", HYDERABAD
BEFORE SHRI D. MANMOHAN, VICE PRESIDENT
AND
SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER
I.T.A. No. 790/HYD/2016
Assessment Year: 2007-08
Smt. Suttari Rekha, The Income Tax Officer,
(LR of Late Smt. M. Vs Ward-1,
Ramachandramma) KARIMNAGAR
HYDERABAD
[PAN: BDMPS0490Q]
(Appellant) (Respondent)
For Assessee : Shri A.V. Raghu Ram, AR
For Revenue : Smt N. Swapna, DR
Date of Hearing : 12-06-2017
Date of Pronouncement : 14-06-2017
ORDER
PER B. RAMAKOTAIAH, A.M. :
This is an appeal by assessee (Represented by Smt S. Rekha as LR) against the order of the Commissioner of Income Tax (Appeals)-10, Hyderabad dated 31-12-2015. Assessee has raised the following grounds:
"1. On the facts and in the circumstances of the case, the order of the Commissioner of Income Tax (Appeals)-10, Hyderabad, dismissing the appeal is erroneous, illegal and unsustainable in law.
2. The Commissioner (Appeals) erred in sustaining the addition of Rs. 8,61,740 being part of the source of Rs.29,11,740, explained as earned from past many years from agricultural activity. The Commissioner (Appeals) failed to appreciate that the Appellant's mother was holding agricultural lands since many years and was dependent only on the agricultural income, and admittedly had no other known source of income.
3. The Commissioner (Appeals) failed to appreciate that the Assessing Officer has not disbelieved the factum of having agricultural lands but had I.T.A. No. 790/Hyd/2016 :- 2 -:
suspension only about the income derived from such agricultural lands. The Commissioner (Appeals) ought to have appreciated that even on a very conservative estimate of the income from agricultural lands would leave sufficient fund in the hands of the Appellant's mother for the purpose of investment and therefore the addition of Rs.8,61,740 from the said source is unsustainable on facts and in law.
4. The Commissioner (Appeals) erred in sustaining the addition of Rs.15 lakhs being part of the source of Rs.29,11,740, explained as received by Appellant's mother from Sri K.Y.Chary. The authorities below failed to appreciate that the said amount was agreed to be paid by the Appellant's mother only after finalization of development agreement with M/s.Pruthviraj Projects Pvt. Ltd., in respect of the land purchased by her as she strongly apprehended that the said small piece of land is otherwise not useful.
5. The Commissioner (Appeals) failed to appreciate the basic facts with respect to M/s.SMR Builders Pvt. Ltd., entering into MOU with the original land owner, and further fact that they have brought in various other purchasers into picture as they failed to conclude the MOU. The Commissioner (Appeals) ought to have appreciated that all the transactions relating to purchase of plots by various buyers was at the instance of M/s.SMR Builders Pvt. Ltd., which undertook to develop the property over the entire extent of land and therefore one of the essential conditions insisted by the Appellant's mother is for making balance payment of Rs.23,61,740 only after entering into development agreement.
6. The finding of the Commissioner (Appeals) that the will dated 08.10.2008 of Appellant's mother does not have a mention of the amount payable to Mr.K.Y.Chary and therefore the stand of Appellant for the source of investment to have been received from Mr.K.Y.Chary is an afterthought, is an incorrect inference. The Commissioner (Appeals) failed to appreciate that it is not essential that a 'Will' should contain the details of the loan in as much it all depends on the person who is writing the 'Will' and as to whether he wants to pass on the liability along with the assets.
The inference of the Commissioner (Appeals) is incorrect and is unsustainable on facts and in law.
For these and other grounds that may be urged at the time of hearing, it is prayed that the Hon'ble Tribunal may be pleased to allow the appeal".
2. Ld. Counsel submitted that assessee has purchased site of 133 Sq. Yds., which in turn was transferred to a developer and assessee was instrumental only in getting the property registered I.T.A. No. 790/Hyd/2016 :- 3 -:
and giving it to development. The amount which was reflected in the document was paid by her grandson and the so called cash supposed to have been paid in the transaction was sourced partly from her agricultural income and partly from borrowal from one Mr. K. Ram Mohan through Shri K.Y. Chary. It was the submission that both the authorities have not accepted assessee's contentions and inspite of filing submissions, they have not been accepted. It was the submission that assessee is in a position to substantiate the contentions and also produce Mr. K.Y. Chary for verification of the department if one more opportunity is given.
3. Ld.DR, however objected to state that assessee was given ample opportunity and principles of natural justice have been followed. It was the submission that assessee did not avail all the opportunities, hence, there is no need to set aside to the AO.
Ld.DR referred to the orders of the AO and CIT(A) to substantiate that there is no merit in assessee's contentions.
4. We have considered the rival contentions and perused the order. As seen from the sequence of the events of the property transactions, assessee along with others have purchased small bits of land of 133 Sq. Yds., gave it in turn to the developer. It is also noticed that the developer is also a confirming party in the purchase transaction. It is the submission of assessee that the so called on money was not paid by assessee but routed through her. In order to explain the amount which was ultimately paid to the land owners, she has stated that she is having agricultural income as well as a borrowal from Shri K. Ram Mohan. Even though confirmation was filed substantiating her stand, on the reason that I.T.A. No. 790/Hyd/2016 :- 4 -:
Shri K.Y. Chary was not produced before the AO, the authorities confirmed the amount. Assessee raised the contention before the CIT(A) that AO never asked for production of Shri K.Y. Chary. With reference to the discrepancy of borrowal later than the date of registration, it was the submission that assessee has paid the amount later, after the development was confirmed and referred to the registration of document of development in the month of January. As seen from the development document they are dated 20-01-2007 and some of the notings by the registration office also reflects January 29th, so there seems to be some genuineness in assessee's claim that the so called on money was paid subsequently only after the development agreement was entered. It is also to be noted that the developer is also a confirming party in the purchase agreement. Considering these facts, we are of the opinion that assessee's contentions have not been verified or analysed in the correct perspective. Since assessee has stated to have given the relevant information to the AO, we are of the opinion that the matter can be re-examined by the AO after giving another opportunity to assessee to substantiate. Accordingly, we set aside the orders of the AO and CIT(A) for fresh consideration after giving due opportunity to assessee.
5. In the result, appeal of assessee is allowed for statistical purposes.
Order pronounced in the open court on 14th June, 2017 Sd/- Sd/-
(D. MANMOHAN) (B. RAMAKOTAIAH)
VICE PRESIDENT ACCOUNTANT MEMBER
Hyderabad, Dated 14th June, 2017
TNMM
I.T.A. No. 790/Hyd/2016
:- 5 -:
Copy to :
1.Smt. Suttari Rekha (LR of Late Smt. M.
Ramachandramma), C/o. K. Vasant Kumar, A.V. Raghu Ram, Advocates, 610, Babukhan Estate, Basheer Bagh, Hyderabad.
2. The Income Tax Officer, Ward-1, Karimnagar.
3. CIT (Appeals)-10, Hyderabad.
4. CIT (IT&TP), Hyderabad.
5. D.R. ITAT, Hyderabad.
6. Guard File.