NIZAR BHAILAKHANI, HYDERABAD,HYDERABAD vs. ITO, WARD-5(2), HYDERABAD, HYDERABAD

At the outset, it is seen that there is a delay of 115 days in filing of the appeal before the Tribunal. The assessee has filed an application for condonation of delay stating that the period of 60 days in filing of the appeal ended on 6.9.2016 but during the period from 2.9.2016 onwards the petitioner fell sick due to acute slip disc and was advised absolute bed rest initially for three months but he had to undergo rest till 27.12.2016 for complete recovery from illness and therefore, there is a delay of 115 days in filing of the appeal. The petition is accompanied by an affidavit and a medical certificate from the Medical Officer of the Osmania General Hospital, Hyderabad. Taking the same into consideration, the delay in filing of the appeal is condoned and the appeal is taken up for adjudication. of 2016 Nizar Bhai Lakhani Hyderabad.

Brief facts of the case are that the assessee, an individual, engaged in the business of automobile consultancy, filed his return of income for the A.Y 2008-09 on 21.08.2008 declaring total income of Rs.1,13,840/-. During the assessment proceedings u/s 143(3), the assessee was issued with notices u/s 143(2) of the Act. However, the notice was returned with the remark “shifted 3 months back and new address not known”. Thereafter, the Inspector of the relevant Ward on 13.10.2010 served the notice u/s 143(2) by way of affixture on 30.09.2010 at the known address i.e. the address given in the return of income filed and also as was mentioned in the Bank Statement of the assessee with the Development Credit Bank, Abids, Hyderabad. In response to the said notice, the assessee’s father filed a letter dated 15.11.2010 stating that his son used to stay with him long ago and he is not in touch with him nor he had any connections with him. However, since the assessment was getting time barred, the notice was issued u/s 142(1) and requested the assessee to explain the sources for the deposits in the Development Credit Bank A/c. Since there was no response from the assessee to the said notice, the AO completed the assessment by bringing to tax the sum of Rs.18,05,600/- as unexplained credit. The assessment was completed u/s 144 of the I.T. Act.

Thereafter, aggrieved by the assessment order, the assessee filed an appeal before the CIT (A) stating that during the relevant financial year, the assessee had tried for a US Visa and for the said purpose, had borrowed funds from his relatives and friends and deposited the same in his Bank A/c and as he did not get the visa, the moneys’ mobilized were returned to the respective persons within a short span. The CIT (A) however, observed that the assessee did not furnish any proof with regard to the deposits Page 2 of 4 of 2016 Nizar Bhai Lakhani Hyderabad.

The learned Counsel for the assessee reiterated the submissions made by the assessee before the authorities below and has also furnished additional evidence which are confirmation letters from the friends and relatives of the assessee and requested for admission of the additional evidence and remand the issue to the AO for his comments or for re- assessment of the assessee’s income.

The learned DR, however, opposed the admission of the additional evidence stating that the evidence is from the friends and relatives who are staying with the assessee and that the assessee has not explained as to why it took more than 9 years for him to produce the confirmation letters from the said parties. Therefore, according to her, the confirmation letters are nothing but an afterthought and should not be entertained.

Having regard to the rival contentions and the material on record, I find that the assessment was made u/s 144 as the notice could not be served on the assessee and the assessee did not appear before the AO. Before the CIT (A), the assessee has filed the appeal with a different address and before the CIT (A) the assessee had taken a stand that the funds were mobilized for a USA Visa, but has failed to furnish the relevant confirmations before the CIT (A). Now the assessee has filed some confirmation letters before the Tribunal as additional evidence. Since the genuineness of the said creditors and the creditworthiness of the Page 3 of 4 of 2016 Nizar Bhai Lakhani Hyderabad.

In the result, assessee’s appeal is allowed for statistical purposes.