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2017 (2) TMI 508 - ITAT HYDERABAD

2017 (2) TMI 508 - ITAT HYDERABAD - TMI - Reopening of assessment - unexplained investment - procedure followed for affixture of notice not followed - Held that:- The address on which the notice was affixed was not the address of assessee, neither in the past nor later. As seen from the written submissions and the copies placed on record of returns filed, the address of assessee was 8-2-686/8/2, Road No. 12, Banjara Hills, Hyderabad. The same address was also stated in the sale deeds placed on r .....

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e was not given any opportunity. Neither the so called statement was furnished nor the cross-examination of the person was provided. Even the Ld.CIT(A) did not examine how the said ‘Manasa Estates’ came into picture when the document indicates that the monies were received through ‘Janmabhoomi Estates’. Since the very basis for addition is not reliable, the addition per se cannot be sustained. - Decided in favour of assessee - I.T.A. No. 953/HYD/2016 - Dated:- 8-2-2017 - SHRI B. RAMAKOTAIAH, ACC .....

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justified in confirming the addition of ₹ 4,80,000/- without proper and reasonable evidence. Ground No. 3 is general in nature. 3. Facts leading to the present appeal are that the Assessing Officer (AO) has served a notice u/s. 148 Income Tax Act [Act] by affixture and completed proceedings of assessment, wherein an amount of ₹ 4,80,000/- has been brought to tax stating as under: Unexplained Investment: As per the information, stated above, it was noticed that the assessee had purcha .....

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ails/documentary evidences regarding, extent, cost of plot total payments, date/year of payment, mode of payment etc., In response, the assessee furnished the details of properties purchased during the year and also receipts and payments account explaining the sources for investment. On verification of the details, it is seen that the assessee has purchased three plots of 600 sq. yds., 300 sq. yds and 300 sq. yds from Manasa Estates. The assessee has explained sources to the extent of the cheque .....

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ed and the same is brought to tax. In view of the above, an amount of ₹ 4,80,000/- is added to the income returned . 4. Before the Ld.CIT(A), assessee questioned the service of notice as well as addition on merits stating as under: The appellant has been filing regularly his returns of income. The address mentioned in the various assessment years are furnished below: Asst. Year Date of filing of the Return of income Address mentioned therein 2005-06 21-12-2005 8-2-686/8/2, Road No.12, Banj .....

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the assessee received a notice u/s. 142(1) dated 6-9-2012, requiring, inter alia, compliance with the notice u/s 148 dated 22-3-2012. The address given on this notice u/s. 142(1) is as under: "I.Prabhakar Reddy, s/o I.Bapu Reddy, House No.315, Plot No.195/A, Road No.13, Wilite House, Jubilee Hills; Hyderabad-033" 3. During the course of hearing in response to the notice u/s 142(1), it was understood that a notice u/s.148 dated 22-3-2012 was served by affixture at the above address. Wh .....

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22-3-2012, was Plot No.48, Kavuri Hills, 1- Phase, Jubilee Hills, Hyderabad. Even according to the Return for immediately earlier' year i.e., AY 2010-11, the address was 8-2-686/8/2, Road No.12, Banjara Hills. It is, thus, clear that the notice was not affixed at the last known address. The service of notice u/s 148 is, therefore, not a valid one and the consequent assessment u/s 143(3) r.w.s.147 is also not a valid assessment, even though the appellant cooperated in completion of the assess .....

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sment, in the above circumstances of the case. 5.1 Without prejudice to the above contention, it is submitted that the learned Assessing Officer made an addition of ₹ 4,80,000 with the following observation: "As per the information available the assessee has paid cash of ₹ 400 per sq.yards. to Manasa Estates. The assessee has purchased 1200 sq.yds and has paid cash of ₹ 4,80,000/-. As the assessee failed to explain the sources for cash paid for purchase of plots, the inves .....

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es of the three sale deeds reflecting the purchase of three plots - all dated 27th August 2004. Copies of these deeds are enclosed. The vendor and GPA holder are the partners of Manasa Estates. The details of the area of the plots, consideration, market value etc., mentioned in the Sale Deeds are as under: Document No. and date Plot No. Area Consideration (Rs) Market value (Rs) 6965 dt.27-8-2004 307 600 sq.yds 1,80,000 2,64,000 @ 440 per sq.yard 6972 dt.27-8-2004 434 300 sq.yds 90,000 1,32,000 @ .....

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upees Ninty thousand only) received through M/s Janmabhoomi Estates, and thus the Vendor hereby admits and acknowledges the receipt of the entire sale amount having received from the Vendee………….. " 5.5 The learned Assessing Officer did not notice the fact mentioned in the Sale deed that the consideration was received through M/s Janmabhoomi Estates. 5.6 It is submitted that the learned Assessing Officer did not establish by any reasonable evidence that the appell .....

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ted the contentions stating that it is the normal practice that when a notice cannot be served through postal authorities, it is generally served by affixture. It was further noticed that AO has served through the last known address and assessee has participated in the proceedings by filing a letter dt. 07-11-2012. On merits, the Ld.CIT(A) has confirmed the addition on the basis that from the communication received from Addl. CIT, Range-6, the assessee had paid consideration in cash over and abo .....

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