Income Tax Appellate Tribunal - Hyderabad
Shri K Ch Subba Rao,, Hyderabad vs Department Of Income Tax on 22 October, 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH 'A', HYDERABAD
BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER
AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER
ITA No.98/Hyd/14 : Assessment year 2008-09
ITA No.99/Hyd/14 : Assessment year 2009-10
Dy. Commissioner of Income- V/s. Shri K.Ch.Subba Rao, Hyderabad
tax Central Circle 3, Hyderabad
(PAN - AHLPK 3647 B)
(Appellant) (Respondent)
Appellant by : Shri B.Ramakrishna, DR
Respondent by : Shri P.Murali Mohan Rao
Date of Hearing 16.10.2014
Date of Pronouncement 22.10.2014
ORDER
Per P.M.Jagtap, Accountant Member :
These two appeals are preferred by the revenue against a common order of the learned Commissioner of Income- tax(Appeals)-I, Hyderabad 20th November, 2013, whereby she deleted the further additions made by the Assessing Officer for both the years under consideration, i.e. assessment year 2008-09 and 2009-10 on account of unexplained cash credits worked out on the basis of peak credit by way of rectification orders passed under S.154.
2. The assessee in the present case is an individual, who is the working partner in M/s. Balaji Transport Agency, a partnership firm which is engaged in coal business. A search and seizure action under S.132 was conducted in the business premises of the said firm as well as the residential premises of the assessee. On the basis of the incriminating material found during the course of search, assessments were completed by the Assessing Officer under 2 ITA No.98 & 99/Hyd/2014 Shri K.Ch.Subba Rao, Hyderabad S.143(3) read with S.153A of the Act in the case of the assessee for assessment years 2008-09 and 2009-10 making additions of Rs.1,04,73,034 and Rs.2,80,00,000 respectively on account of unexplained cash credits worked out on peak credit basis. Subsequently, the Assessing Officer noticed that the peak credits for assessment years 2008-09 and 2009-10 were actually more than what was taken by him in the assessments and the income of the assessee thus was short computed by Rs.10,40,805 and Rs.5,35,666 for assessment years 2008-09 and 2009-10 respectively. He therefore, passed two separate orders under S.154 of the Act on 10.12.2012 rectifying his assessments for assessment years 2008-09 and 2009-10 and accordingly made further additions of Rs.10,40,805 and Rs.5,35,666 respectively to the total income of the assessee on account of unexplained cash credits.
3. Against the orders passed by the Assessing Officer under S.154, appeals were preferred by the assessee before the learned CIT(A). After considering the submissions made on behalf of the assessee as well as the material available on record, the learned CIT(A) cancelled rectification orders passed by the Assessing Officer under S.154 for assessment years 2008-09 and 2009-10 for the following reasons given in paragraph No.8 of her impugned order-
"8. The order u/s. 154 and the submissions of the appellant have been carefully considered. For invoking the provision of sec.154, the mistake must be apparent from the record. The Assessing Officer has not given any working as to how he arrived at the peak credit and how there has been a mistake apparent. The working of peak credit itself is not automatic 3 ITA No.98 & 99/Hyd/2014 Shri K.Ch.Subba Rao, Hyderabad and is itself controversial and peak credit has to be culled out from the entries from the books and when such details are not part of the assessment order on record, rectifying the same without any facts and figures is not correct and not in the spirit of the provisions of section 154 and hence, the rectification order passed u/s. 154 by the Assessing Officer is not justified and therefore cancelled."
4. Aggrieved by the order of the learned CIT(A), Revenue has preferred these appeals before the Tribunal.
5. We have heard the arguments of both the sides and also perused the relevant material on record. As pointed out by the learned counsel for the assessee, the additions on account of unexplained cash credits as originally made by the Assessing Officer to the total income of the assessee on peak credit basis for both the years under consideration have already been deleted by the Tribunal vide its order dated 16.9.2014 passed in ITA Nos.1657 and 1658/Hyd/2013, holding that the corresponding receipts and payments found recorded in the relevant seized documents, were related to the coal business carried on by the partnership firm, and the additions on account of the said transactions as worked out on the basis of peak credit treating the same as unexplained cash credits could not be made in the hands of the assessee in his individual capacity. Keeping in view this decision of the Tribunal holding that no addition on account of unexplained cash credits on the basis of the entries appearing in the relevant seized documents which related to the coal business of the partnership firm, could be made in the hands of the assessee in individual capacity, the very basis of the rectification orders passed by the Assessing Officer enhancing the quantum of additions to be made on account of 4 ITA No.98 & 99/Hyd/2014 Shri K.Ch.Subba Rao, Hyderabad unexplained cash credits, no more survives and the said orders are liable to be cancelled, having no legs to stand. We, therefore, uphold the impugned order of the learned CIT(A), cancelling the orders passed by the Assessing Officer under S.154 of the Act although on different ground.
6. In the result, both the appeals of the Revenue are dismissed.
\ Order pronounced in the court on 22nd October, 2014 Sd/- Sd/-
(Saktijit Dey) (P.M.Jagtap)
Judicial Member Accountant Member
Dt/- 22nd October, 2014
Copy forwarded to:
1. Shri K.Ch.Subba Rao, 8-2-269/S/15, Plot No.15, Sagar Society, Road No.2, Banjara Hills, Hyderabad
2. Dy. Commissioner of Income-tax Central Circle 3, Hyderabad
3. Commissioner of Income-tax(Appeals) I, Hyderabad
4. Commissioner of Income-tax Central, Hyderabad
5. Departmental Representative, ITAT, Hyderabad.
B.V.S