Income Tax Appellate Tribunal - Hyderabad
Mr. Anil Kishore Agarwal, Hyd, ... vs Dcit, Central Circle-4, Hyderabad on 9 December, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCHES "A", HYDERABAD
BEFORE SHRI D. MANMOHAN, VICE PRESIDENT
AND
SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER
I.T.A. No. 1223/HYD/2011
Assessment Year: 2006-07
Mr. Anil Kishore Agarwal, Deputy Commissioner of
HYDERABAD Vs Income Tax,
[PAN: ABGPA5830R] Circle-4,
HYDERABAD
(Appellant) (Respondent)
For Assessee : Shri P. Murali Mohan Rao, AR
For Revenue : Shri A. Sitarama Rao, DR
Date of Hearing : 25-10-2016
Date of Pronouncement : 09-12-2016
ORDER
PER B. RAMAKOTAIAH, A.M. :
This appeal was originally heard along with batch of appeals in the group of M/s. Jai Balaji Sanitary Stores and has been disposed-off vide order dt. 28-05-2014. Later on, assessee has preferred a Miscellaneous Application stating that the grounds B and C covering 4 to 9 grounds have not been adjudicated in the order.
I.T.A. No. 1223/Hyd/2011
:- 2 -: Mr. Anil Kishore Agarwal
2. After considering the grounds raised and the order passed, the ITAT has allowed the Miscellaneous Application and recalled the order of Tribunal dt. 28-05-2014 for adjudication of ground Nos. 4 to 6 and 7 to 9. Consequently, the case is heard and after considering the rival contentions the relevant grounds were decided in this order. The grounds raised by assessee are as under:
"B. Addition towards unexplained Investments of Rs. 10,00,000/- :
4. The Dy. Commissioner of Income Tax Central Circle-4, while passing the order wherein a sum of Rs. 10,00,000/- has been added to the returned income for the assessment year 2006-2007 towards the unexplained investments as undisclosed investments in the hands of the Assessee for the assessment year 2006-2007.
5. The Assessee has furnished the explanations to the Assessing officer which has not been considered and the amount has been added on the basis of the estimated figures which has been arrived by the imagination of the assessing officer which is not correct and not justified and bad in law.
6. Actually the Assessee has received the amount towards the sale of goods to the above named persons mentioned in the list in the assessment order and the details had already been furnished to the assessing officer as the amount has been received by the Assessee towards the sale of the goods in the shop by the Assessee and amount is not towards the investments and hence the additions made is not correct and not justified and bad in law.
C. Addition towards unexplained Income of Rs. 10,95,000/- :
7. The Dy. Commissioner of Income Tax while passing the order has added a sum of Rs. 10,95,000/- which is not correct as the Assessee has purchased the property at Bogulkunta and the amount has been reflected in the books of the assessee also. There is no question of additions of the same as already been reflected in the books of the assessee.
8. The Assessee has furnished the explanations to the Assessing officer which has not been considered and the amount has been added on the basis of the estimated figures which has been arrived by the imagination I.T.A. No. 1223/Hyd/2011 :- 3 -: Mr. Anil Kishore Agarwal of the assessing officer which is not correct and not justified and bad in law.
9. Actually the Asessee has received the amount towards the sale of goods to the above named persons mentioned in the list in the assessment order and the details had already been furnished to the assessing officer as the amount has been received by the Assessee towards the sale of the goods in the shop by the Assessee and amount is not towards the investments and hence the additions made is not correct and not justified and bad in law".
2.1. The issue in the above grounds are with reference to unexplained investment of Rs. 10 Lakhs and unexplained income of Rs. 10,95,000/-.
3. With reference to the first issue of unexplained investment of Rs. 10 Lakhs, the AO has noted that assessee has advanced an amount of Rs. 10 Lakhs toward Ameerpet property to Shri Shiv Mohan Reddy on 01-10-2005. As per evidence in Sl. No. 78 of Annexure A/HIMA/RES/6, AO noted that cash of Rs. 10 Lakhs was deposited in assessee's SB a/c and since assessee has not explained the source, the same was treated as 'unexplained investment'. AO also enquired from Shri Shiv Mohan Reddy and the statement was recorded on 20-02-2007, wherein it was stated that the transaction did not materialise and the token advance of Rs. 10 Lakhs was returned through cheque and DD. In answer to Question No. 5, Shri Mohan Reddy has admitted that the amount of Rs. 10 Lakhs as advanced was given vide cheque dt. 30-09-2005 drawn on Andhra Bank, however, the AO made an addition of Rs. 10 Lakhs.
I.T.A. No. 1223/Hyd/2011 :- 4 -: Mr. Anil Kishore Agarwal
4. Before the Ld. CIT(A), it was the submission that this amount was recorded in the books of account and since the deal has not materialised, the amount was returned to assessee. It is also further submitted that amount was paid by way of cheque and same was returned to assessee. On the reason that the source of Rs. 10 Lakhs was not explained, Ld. CIT(A) confirmed the amount.
5. It was submitted that assessee has enough cash balances and it was part of the cash flow statement submitted to the AO. Referring to the order of ITAT in para 37 and also para 58, it was submitted that assessee can explain the sources from the papers filed before the AO, if the matter was restored to the file of AO for deciding afresh in line with other grounds which were sent back to AO.
5.1. Ld. DR however, submitted that there is no explanation for the above amount which was deposited in the bank account.
6. After considering the submissions of the parties and perusing the material on record and the orders on similar grounds by the ITAT, we are of the opinion that this issue requires to be examined afresh by the AO after considering the cash flow statements, availability of funds with assessee and its family in line with the directions given in para 37 and para 52 & 58. Accordingly, this ground is considered allowed for statistical purposes.
7. Next issue for consideration is amount of investment of Rs. 10 Lakhs in the property at Boggulakunta. Vide Sheet No. 2 of I.T.A. No. 1223/Hyd/2011 :- 5 -: Mr. Anil Kishore Agarwal seized item A/HIMA/RES/PO/13, it has come to the knowledge that assessee has acquired a house at Bogulkunta for an amount of Rs. 10 Lakhs and it was registered for an amount of Rs. 95,200/-. Since the source of the above funds are not explained, the AO has added the amount as 'unaccounted income' in the assessee's hands invested in the above property. Ld. CIT(A) also noted that assessee has not given any details with regard to the said investment, even though it was claimed that the said purchase cost has been reflected in the books of account. Accordingly, the amount was confirmed.
7.1. Before us, Ld. Counsel submitted that the amount is brought through assessee's known sources and has been shown in the Balance Sheet at the time of filing the return itself. He also referred to the explanation given which has not been verified by the AO. In view of that, it is submitted that this issue also can be restored to the file of AO as the transaction is recorded in the books of account and has gone through the bank account.
7.2. Considering the arguments and material available on record, we are of the opinion that this issue also requires examination by the AO afresh. If the money has been paid through bank account and has been part of assessee's books of account and Balance Sheet, there is no need to consider the amount as unaccounted. Both AO and CIT(A) recorded that assessee has not explained the sources before them. In view of that, we are of the opinion that this issue requires re-examination by the AO after considering assessee's explanation, the books of account, bank accounts and the cash flow statement furnished during the course I.T.A. No. 1223/Hyd/2011 :- 6 -: Mr. Anil Kishore Agarwal of assessment. With these directions, the issue in this ground is also restored to the file of AO for fresh examination and consideration.
8. In the result, appeal is allowed for statistical purposes to the above extent.
Order pronounced in the Open Court on 9th December, 2016 Sd/- Sd/-
(D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad, Dated 9th December, 2016 TNMM Copy to :
1. Mr. Anil Kishore Agarwal, Hyderabad. C/o. P. Murali & Co., Chartered Accountants, 6-3-655/2/3, 1st Floor, Somajiguda, Hyderabad.
2. The Deputy Commissioner of Income Tax, Circle-4, Hyderabad.
3. CIT (Appeals)-VII, Hyderabad.
4. CIT(Central), Hyderabad.
5. D.R. ITAT, Hyderabad.
6. Guard File.