TALLURI VENKATA NARAYANAMMA ,HYDERABAD vs. INCOME TAX OFFICER, WARD-15(1), HYDERABAD

Both the assessees before the Tribunal are related to each other i.e. the assessee Sri Talluri Vijay Rahul is the son of the assessee Smt. Talluri Venkata Narayanamma and the issue is common in both the appeals. Therefore, all these appeals were heard together and are disposed of by this common and consolidated order.

In response to the same, the Assessing Officer received information from i) the Tehsildar, Bodhanampadu, Kurichedu Mandal, Prakasham District, vide his letter No.Ldis/37/2016, dated 29.02.2016, stating that the income certificate dated 20.6.2013 filed by the assessee was not issued from the Tehsildar’s Office, Kurichedu and that as mentioned in the income certificate, the agricultural land situated at Bodhanampadu, Kurichedu Mandal, Prakasham District under survey No.146-1 Ac 9.41 to 1384 and 1678 of 2019 Talluri Vijay Rahul Hyderabad cents does not belong to the assessee i.e. Sri Talluri Vijay Rahul S/o Venkata Ramana as per their record and that since the land does not belong to the assessee, the assessee is not in enjoyment of the land and Patta Pass Book was not issued to him; ii) From the company M/s. Terra Firms Projects (P) Ltd, a letter dated 24.02.2016, stating that they have not made any transaction with the assessee and have not issued him any certificate towards purchase of Sweet Lime and payment of Rs.23,00,000/-; and iii). The Income Tax Officer Ward-3 Ongole, vide his letter dated 03.03.2016, has forwarded an enquiry report of their Inspector of Income Tax along with copies of 1-B proforma Register and Survey No.wise land record details in respect of the assessee and letter dated 29.02.2016 of Tehsildar, Kurichedu Mandal stating that the lands in Survey No.146/1 at Bodanampadu, Kurichedu Mandal, Prakasham District do not belong to the assessee and that the assessee does not have any agricultural land in the above survey number. With regard to the Patta Pass Book No.382 it was stated that the Patta Pass Book was in the name of Sri Shaik Silar and not in the name of the assessee and that the income certificate stated to have issued by the Tehsildar was also not issued by him.

When all these information was put to the assessee, the assessee could not offer any explanation and therefore, the assessment for the A.Y 2013-14 was completed on 11.3.2016 by Page 4 of 11 to 1384 and 1678 of 2019 Talluri Vijay Rahul Hyderabad bringing to tax the gross agricultural income declared by the assessee as “income from other sources”. Thereafter, similar addition was made for the A.Y 2014-15 as well.

Subsequently, on verification of the returns of income for the earlier A.Ys i.e. 2010-11 and 2011-12,, the Assessing Officer observed that the assessee has admitted net agricultural income of Rs.8.00 lakhs for the A.Y 2010-11 and Rs.10,09,000/- for the A.Y 2011-12 as well. Since it was proved beyond doubt that the assessee did not own any agricultural lands, and that the agricultural income shown by the assessee has to be brought to tax as “income from other sources”, the Assessing Officer reopened the assessment by issuance of a notice u/s 148. During the re-assessment proceedings u/s 147 of the Act, the agricultural income declared by the assessee was brought to tax as “income from other sources”.

Aggrieved, the assessee preferred appeals before the CIT (A) for all the A.Ys stating that he was a student during the A.Y 2010-11 and did not derive any income during the relevant previous year. It was submitted that the returns for all the years were filed by the assessee under the guidance and advice of one Shri Raja Rao, ITP who advised the assessee that if the income was offered in the hands of the assessee, the assessee would be able to get educational loans from Bank to pursue higher education and that it is on the advice of the ITP, that the returns were filed declaring the agricultural income and has claimed it as exempt in the computation of income. The CIT (A) did not accept the assessee’s contention and held that the contention of the assessee that the returns were manipulated by Shri Raja Rao was not substantiated with any evidence. Thus, the CIT (A) confirmed the order of the Assessing Officer and the assessee is in second appeal before the Tribunal by raising the following grounds of appeal. Except for the quantum, the grounds against the disallowance of agricultural income and addition as “income from other sources” for all the A.Ys are the same. “A.Y 2010-11

The learned Counsel for the assessee reiterated the submissions made by the assessee before the authorities below that the assessee was a student during the A.Ys 2010-11 and therefore, was not having any source of income and was advised by Mr. Raja Rao, ITP , that to get the educational loan for higher education, the assessee would have to show some income and accordingly has declared the agricultural income. In support of her contention that Shri Raja Rao is not a fair person, she filed a copy of the charge sheet filed against him for preparation of fake returns of income. Therefore, she submitted that the assessee under the misguidance of an ITP, has filed his returns of income and since he did not have any source of income, the additions are without any basis and should be deleted. to 1384 and 1678 of 2019 Talluri Vijay Rahul Hyderabad 8. The learned DR, on the other hand, pointed out and has relied upon the findings of the Assessing Officer that the assessee has created false documents of income certificate and ownership of land to declare agricultural income and claimed it as exempt. Since the assessee has declared the income in his return of income and the assessee could not prove that he owns any agricultural land to declare agricultural income, the same has been treated as “income from other sources” and therefore, according to him, the addition made by the Assessing Officer and confirmed by the CIT (A) should be confirmed by the ITAT.

Having regard to the rival contentions and the material on record, I find that the assessee is allegedly studying at that point of time and his father is an Architect. Therefore, the assessee’s contention that year after year he has been misguided by a person i.e. Mr. Raja Rao, an ITP, to file his returns of income declaring agricultural income on the basis of false documents cannot be accepted. Further, the assessee has not taken any action against the said person. The returns of income were not filed all together at one point of time but were filed year after year. Therefore, the bonafides of the assessee are not proved and since the assessee himself has declared the income, I am satisfied that the Assessing Officer after being satisfied that the assessee had no agricultural income, had no option but to treat it as “income from other sources” and bring it to tax. Therefore, the assessee’s grounds of appeal on this issue are rejected.

Aggrieved, the assessee preferred an appeal before the CIT (A), who confirmed the order of the Assessing Officer and the assessee is in second appeal before the Tribunal by raising the following ground of appeal on this issue:

The learned Counsel for the assessee reiterated that under the misguidance of Shri Raja Rao, ITP, the assessee has filed the returns of income and since there was no income earned by the assessee, the additions should be deleted. The learned DR was also heard.

Having regard to the rival contentions and the material on record, I find that the CIT (A) had called for a remand report from the Assessing Officer and the Assessing Officer reported that the assessee had received residential house as a gift from his to 1384 and 1678 of 2019 Talluri Vijay Rahul Hyderabad father and that the assessee is in receipt of rental income. Taking the same into consideration only, the CIT (A) has confirmed the addition of Rs.48035/- made by the Assessing Officer, and the assessee is second appeal before the Tribunal. The assessee could not submit any evidence before me to contradict this finding of the Assessing Officer and the CIT (A). Therefore, I do not see any reason to interfere with the order of the Assessing Officer for the A.Ys 2011-12 and accordingly it is rejected.

Further, for the A.Y 2011-12 to 2014-15 another issue emanating from the assessment orders is that the Assessing Officer during the assessment proceedings perused the P&L a/c of the assessee and noticed that the assessee has admitted income from business or profession. In connection with the expenditure claim, the assessee was asked to produce the bills and vouchers, but the assessee could not produce any evidence and therefore, the Assessing Officer disallowed some of the expenditure and brought it to tax. Aggrieved, the assessee preferred an appeal before the CIT (A), but could not produce any evidence before the CIT (A). Therefore, the CIT (A) confirmed the order of the Assessing Officer and the assessee is in second appeal before the Tribunal . However, even before the Tribunal no evidence is filed. Therefore, the said disallowance for all the A.Ys is confirmed.

Further, for the A.Y 2014-15, the assessee has raised ground No.5 that Municipal taxes paid of Rs.1,975/- should be allowed while computing the income from house property. Since this is a factual issue, I deem it fit and proper to remand it to the Assessing Officer and direct him/her to verify the same and allow it if found to have been paid. to 1384 and 1678 of 2019 Talluri Vijay Rahul Hyderabad 16. In the result, assessee’s appeals for the A.Ys 2010-11, 2011-12 and 2013-14 are dismissed, while the appeal for the A.Y 2014-15 is partly allowed for statistical purposes.

In the result, all the appeals of the assessee are dismissed.

As regards the appeals of Smt. Talluri Venkata Narayanamma, the only issue in all the appeals is with regard to the agricultural income declared by the assessee which has been brought to tax by the Assessing Officer as “income from other sources” as was done in the case of Sri Talluri Vijay Rahul. In the case of this assessee also, the assessee did not own any agricultural land but has shown agricultural income claiming that she owns agricultural land of 13.22 guntas situated at Bodanampadu, Kurichedu Mandal, Prakasham District, and as evidence thereof Patta Pass Book No.332 was filed. Similar evidence as in the case of Shri Talluri Vijay Rahul was also filed in the case of the assessee herein and similar enquiry by the Assessing Officer revealed that the assessee did not own any agricultural land and that the Patta Pass Book 332 was not in the name of Sri Talluri Venkata Narayanamma. Since the facts and circumstances in the assessee’s case are the same as in the case of Talluri Vijay Rahul, for the detailed reasons given above, the appeals of this assessee for the relevant A.Ys are also dismissed.

In the result, appeals filed by Smt. Talluri Venkata Narayanamma in to 1677/Hyd/2019 are dismissed.