TMI Blog2017 (5) TMI 1319X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment. Be that as it may, as we are satisfied that there is no unaccounted income to be brought to tax u/s. 68 of the Act, the issue of reopening becomes academic. - Decided in favour of assessee. - 761/Hyd/16, And 762/Hyd/16 - - - Dated:- 23-5-2017 - SHRI D. MANMOHAN, VICE PRESIDENT, AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER For The Assessee : Shri K.A. Sai Prasad, AR For The Revenue : Shri A. Sitarama Rao, DR ORDER PER B. RAMAKOTAIAH, A.M. : These appeals are by two assessees against the order(s) of the Commissioner of Income Tax (Appeals)-Kurnool, both dated 24-03-2016. Since the facts are similar in both the cases, we decide these two appeals in this order itself. Assessees are aggrieved on the re-assessment proceedings as well as the addition made of ₹ 33,33,088/- and ₹ 27,81,761/- respectively. The appeal in the case of Sri A Mallikarjuna Reddy is discussed in detail. ITA No. 761/Hyd/2016: 2. The facts leading to the present appeal are that assessee is an individual deriving income from car hires, commission and brokerage etc. He filed return of income for AY. 2009-10 on 05-03- 2010 admitting total income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e letter was issued on 07-02-2014 and same was served on assessee by speed post. A scanned copy of the show cause notice was made part of assessment order and as assessee has not responded to the said notice, the AO completed the assessment u/s. 144 by bringing to tax the difference of ₹ 33,33,088/-. 4. Before the Ld.CIT(A), assessee contended that the said notices referred to by the AO were not received and the said speed post was received by him on 22-02-2014 after the due date. Assessee submitted his reply on 24-02-2014 through inward section, explaining the reasons for the difference which was not considered by the AO, though the order was passed later on 21-03- 2014. Assessee explained that assessee has advanced an amount of ₹ 36 Lakhs for land purchases before 31-03-2007 which was debited to the capital account in those years and a sum of ₹ 35,07,400/- was received back and credited to the capital account on 01-04-2008. Instead of reflecting the opening balance and fresh addition on 01-04-2008, the amount was wrongly uploaded in the electronic filing of the return at the gross amount. Thus, the so called discrepancy was nothing but receipt of return of ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove persons on 01.04.2008 was found to be not genuine, though the parties have deposed that they have returned the advance money to the assessee for the following reasons. i. The assessee paid the advance money in the F.Y.2006-07 on different dates. ii. As per sale agreement, there is no such condition of return of advance money by the parties for the default of the intended purchaser of lands. The seller of the land has to forfeit the advance money, as the assessee went back from the purchase of land as per the agreement entered by the parties. iii. The persons who received the advances from the assessee have already utilized the amounts towards advances for purchase of fertile lands from the prospective sellers. It is deposed by the sellers that they have recovered the advances given by them to prospective sellers of fertile lands and the same was repaid to the assessee on 01.04.2008 is appeared to be far away from the reality since no material evidence is produced in support of their claim and also for the reason that number of persons involved in the said tractions. iv. It is also observed that the assessee has purchased half share of another property a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is nothing left except to bring to tax the unexplained increase of ₹ 33,33,088 in his opening capital balance as on 01-04-2008. Rejection of opening capital on the ground that assessee failed to prove source was also justified in the case of C.Packirisamy VS ACIT 315 ITR 293 (Mad). Hence, the difference of ₹ 33,33,088 between the closing capital balance for AY 2008-09 and the opening balance for AY 2009-10 is, added u/s 68 of the income Tax Act, 1961 as unexplained credits since the assessee failed to prove the source of capital. 9.3 It is significant to mention here that in the original assessment completed in this case, the issue of purchase of property was not examined by the AO and the appellant also did not submit any information relating to the said transaction. 9.4 I have carefully examined the various submissions of the appellant which are on record as well as the remand report of the AD which has been highlighted above. The issue in question is the unaccounted money introduced into the capital account of the appellant in the guise of repayments received back from the prospective sellers is in my considered view a after thought of the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the receipt back of the advances given earlier are the sources for increase in capital in the assessment year under appeal. 6. The learned First Appellate Authority failed to appreciate the fact that the Assessing Officer having accepted the contention of the appellant that advances were given in earlier years, is not justified in not accepting the claim of receipt back of such advances, especially when both the facts are confirmed by the concerned parties in their sworn depositions. 7. The observations of the learned First Appellate Authority at paras 9.4; 9.5 9.6 are not based on any material facts and are devoid of merits. 8. The learned First Appellate Authority failed to appreciate the fact that the CASS reasons were already examined in the initial proceedings u/s. 143(3) and hence his observations at para 9.6 are factually not correct. 9. The appellant craves leave to add, amend or alter any of the above grounds of appeal . 7. Since Ground No. 2 raised above is not contested before the CIT(A), subsequently assessee filed petition for admission of additional ground which is nothing but Ground No. 2 above. This additional ground is legal ground w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order that information was called for and was furnished and after examining the details and facts of the case, the income returned was accepted. When AO gave such clear findings, on enquiry on purchase of property, Ld. Counsel submitted that the finding given by the CIT(A) that no enquiry was done by the AO is totally out of context and on presumptions, so as to put assessee in bad colour. 11. Coming to paras 9.4 9.5 of the impugned order the observations of CIT(A) were totally unwarranted, as assessee was clearly stating that the advances issued earlier were returned, supported by the agreements of sale of 2006 and cancellation of the same and also as affirmed by the parties in the statements u/s.131 recorded by AO. It was submitted that the order of the CIT(A) is not based on facts and therefore, same is required to be quashed. 12. Ld.DR, in reply submitted that there was an audit objection and the proceedings emanated from the audit. There was discrepancy in the uploaded figures as pointed out by the AO as on 31-03-2008 and 01-04-2008 which lead to the present proceedings. However, Ld.DR fairly admitted that order sheet entries in the original assessment time clearl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those people have confirmed returning of the amounts, it is not proper on the part of the AO, to deny the facts based on allegations and wild guess. Ld.CIT(A) also did not examine the facts properly and in fact his order had more erroneous findings, as pointed out by the Ld. Counsel in the course of arguments. 15.1. After considering the facts on record, we are satisfied that assessee has the capacity to advance the amounts earlier and as confirmed by the parties, assessee received the amounts on 01-04- 2008. It was a simple mistake in uploading the data, while filing the return of income for AY. 2009-10 and there is no unaccounted income which was brought to capital account. The allegations of AO are unfounded and the presumptions of the CIT(A) are equally unfounded. Being a senior officer of the department it is not expected from the CIT(A) to give wrong findings, so as to confirm the order of the AO. Since we have examined the facts, we are satisfied that there is no unaccounted income brought to capital account by assessee. Accordingly, grounds are accepted. Even though assessee contended that the proceedings are wrongly initiated, we are of the opinion that prima-facie th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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