CHENNA REDDY PATLOLLA,HYDERABAD vs. INCOME TAX OFFICER, WARD-8(3), HYDERABAD

These assessee’s appeals for A.Ys. 2013-14 and 2014-15 arises from the separate orders of Commissioner of Income Tax (Appeals)-12, Hyderabad’s orders; both dated 06.11.2019, in case No.10140 and 10138/2019-20 involving proceedings u/s. 143(3) r.w.s. 153C of the Income Tax Act, 1961 [in short, ‘the Act’], respectively.

Heard both the parties. Case files perused.

Learned counsel for the assessee submits very fairly that the assessee no more wishes to press for the identical second substantive ground challenging validity of section 153C proceedings. Rejected accordingly.

Next comes the assessee’s identical latter substantive grievance seeking to revise both the lower authorities’ action making unexplained expenditure addition of Rs.5,25,000/- each in the impugned pre-assessment years. There is hardly any dispute that both the learned lower authorities have proceeded to made the impugned addition after initiating section 153C proceedings. The department had carried out the search in question on 25.07.2013 in case of M/s. Arihant Educational Society wherein it found / seized the impugned incriminating material pointing out the assessee to have paid capitation fee / donation in cash over and above that specified by the Medical Council of India for the purpose of taking admission for his son Dr. P. Siddhardh Reddy. Learned counsel fails to dispute the clinching fact that the impugned addition is very much based on the incriminating material found / seized during the course of search culminating in initiation of section 153C proceedings. We therefore uphold the learned lower authorities’ action to this effect in principle.

Next comes the equally important aspect of quantification of the impugned addition. Learned departmental representative could not rebut the basic fact that this assessee is the practicing doctor wherein the day-to-day cash practice as well as accumulation thereon could not be per se ruled out. Neither the Assessing Officer nor the learned CIT(A) is considered the same whilst making the entire donation amount as unexplained.

Faced with this situation, we are of the opinion that the lumpsum addition amount of Rs.2.5 lacs each out of that Rs.5.25 lacs in issue in both these assessment years would be just and proper. We order accordingly with a rider that our instant estimation shall not be taken as precedent in in any other case. Necessary computation shall follow as per law.

No other ground has been pressed before us.

Thus, assessee’s appeals are partly allowed in above terms. A copy of this common order be placed in the respective case files.