PONGURU SHARANI,NELLORE vs. ACIT, CENTRAL CIRCLE-2(3), HYDERABAD

First we take up ITA 71/Hyd/2023 for the A.Y 2018- 19. Facts of the case, in brief, are that the assessee is an individual and filed her return of income for the A.Y 2018-19 and 2019-20, the details of which are as under:

Subsequently, a search and seizure operation u/s.132 of Income Tax Act was conducted in the case of M/s. KMR Estates and Builders Private Limited on 04-02-2019. During the course of the search, certain incriminating evidences with regard to receipt of on money from buyers of villas were found and seized, including the assessee, who is one of such buyers. Notice u/s 153C was issued to the assessee for AY 2018-19 on 23.02.2021 and in response to the same, the assessee filed her return of income u/s. 153C for A.Y 2018-19 on 09.03.2021 admitting total income of Rs.76,35,810/-. For A.Y 2019-20, assessment proceedings u/s. 143(3) were initiated by issuing notice u/s. 143(2) dated 23.02.2021. Subsequently, assessment were completed for both the AYs by making the following additions to the income returned:.

Before the CIT (A), the assessee apart from challenging the addition on merit challenged the validity of the notice issued u/s 153C. However, the CIT (A) dismissed the appeal filed by the assessee on both counts.

Aggrieved with such order of the CIT (A), the assessee is in appeal before the Tribunal by raising the following grounds:

The learned Counsel for the assessee submitted that no sufficient opportunity was granted to the assessee to substantiate her case. Further, the CIT (A) has not considered the written submission filed by the assessee properly. She submitted that in the interest of justice, the assessee should be given an opportunity to substantiate her case.

The learned DR, on the other hand, strongly challenged the submissions made by the learned Counsel for the assessee. He submitted that the learned CIT (A), on the basis of the written submission filed by the assessee, has passed a detailed order and therefore, it cannot be said that no sufficient opportunity was granted to the assessee. He submitted that the order of the CIT (A) is very exhaustive and should be upheld and the grounds raised by the assessee should be dismissed.

We have heard the rival arguments made by both the sides and perused the orders of the AO and the learned CIT (A). We find the AO in the instant case made addition of Rs.1,11,64,179/- u/s 69 of the I.T. Act as unexplained investment in Villa on the basis of certain incriminating evidences found during the course of search in the case of M/s. KMR Estates & Builders (P) Ltd on 4.2.2011which has been upheld by the CIT (A). It is the submission of the learned Counsel for the assessee that the CIT (A) has not granted proper opportunity before disposal of the appeal and has not considered properly the detailed explanation submitted by the assessee. It is her submission that the CIT (A) while sustaining the addition made by the Assessing Officer has relied on the assessment made in the case of other purchasers of villa without considering the fact that the assessee took possession of the constructed area which was incomplete and incurred additional expenditure by herself and the total cost incurred is more than the value for which the sales were effected by the builders. It is also the submission of the learned Counsel for the assessee that no proper opportunity was granted Page 4 of 6 to cross examine Shri Madhav Reddy, Managing Director of KMR Estates & Builders (P) Ltd by the assessee on the basis of whose statement the addition has been made. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the learned CIT (A) with a direction to grant one last opportunity to the assessee to substantiate her case and decide the issue as per fact and law. The assessee is also hereby directed to appear before the learned CIT (A) and substantiate her case by filing the requisite details without seeking any adjournment under any pretext failing which the learned CIT (A) is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee in A.Y 2018-19 are allowed for statistical purposes.

In the result, appeal filed by the assessee is allowed for statistical purposes. – A.Y 2019-20 10. The grounds raised