The Commissioner of Income Tax (Central) vs. Sri A.Girish Reddy

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ITTA/548/2014HC TelanganaHBHC01047477201408 August 20143 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal on a preliminary ground. The Court observed that the ITAT's order under appeal (ITA.No.1095/Hyd/2012) was a common order that followed its earlier decisions in ITA.No.988/Hyd/2012 and ITA.No.1437/Hyd/2012. The Tribunal had merely adverted to its earlier decision in ITA.No.1437/Hyd/2012 to confirm the deletion of the addition by the CIT(A) in the context of ITA.No.988/Hyd/2012. The Revenue's counsel was unable to state whether any appeals had been preferred against these earlier ITAT orders. The High Court held that unless the decisions in those earlier appeals were also tested, there was no possibility for the Revenue to subject the present consequential decision of the Tribunal, which followed the said earlier decisions, to scrutiny. Therefore, on this short ground, the High Court was disinclined to entertain the appeal.

What were the facts?

The Revenue, represented by the Commissioner of Income Tax (Central), Hyderabad, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 10.05.2013 passed by the Income Tax Appellate Tribunal (ITAT). The ITAT's order pertained to assessment year 2008-09 and concerned the deletion of an addition made by the Assessing Officer (AO). The appeal was filed against the ITAT's decision in ITA.No.1095/Hyd/2012. The High Court noted that the ITAT's order was a common order that also dealt with ITA.No.988/Hyd/2012. The Revenue's counsel was unable to confirm if appeals had been filed against the earlier ITAT decisions that the impugned order followed.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was justified in deleting the addition made by the AO when the AO established a lack of creditworthiness on the part of the creditor? (Question of law and fact, concerning Section 68 of the Income Tax Act, 1961). 2. Whether the ITAT was justified in holding that the creditors had enough sources for the amount credited when there was a huge gap between the date of cash withdrawal and the subsequent bank deposit? (Question of law and fact, concerning Section 68 of the Income Tax Act, 1961). 3. Whether the ITAT was justified in holding that the unexplained credit in the hands of the assessee is not sustainable when the assessee admitted Rs.50 lakhs out of a total advance of Rs.1.50 crores as undisclosed income, and consequently, whether the ITAT was justified in holding that part of the advance/credit is genuine while the other part is not genuine and admittedly undisclosed? (Question of law and fact, concerning Section 68 of the Income Tax Act, 1961). Revenue's contentions: The Revenue argued that the AO had established a lack of creditworthiness and a significant gap between cash withdrawal and deposit, suggesting the ITAT's deletion of additions was unjustified. They also pointed to the assessee's admission of Rs.50 lakhs as undisclosed income out of a total advance of Rs.1.50 crores, questioning the ITAT's finding of genuineness for part of the credit. Assessee's contentions: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 260A,Section 68

AI-generated summary — verify with the full judgment below

HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH

THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR

I.T.T.A. No. 548 of 2014

Date: 08.08.2014

Between:

The Commissioner of Income Tax (Central), Hyderabad. … Appellant

And

Sri A. Girish Reddy, Hyderabad … Respondent

This Court made the following:

THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR

I.T.T.A. No. 548 of 2014

JUDGMENT: (Per the Hon’ble Sri Justice Sanjay Kumar) This appeal by the Revenue under Section 260A of the Income Tax Act, 1961, seeks to raise the following suggested questions of law in connection with the order dated 10.05.2013 of the Income Tax Appellate Tribunal in ITA.No.1095/Hyd/2012 relating to assessment year 2008-09. “1. Whether on the fact and in the circumstances of the case, ITAT was justified in deleting the addition made by the AO when the fact on record shows that the AO established lack of credit worthiness on the part of the creditor?

2.

Whether the ITAT was justified in holding that the creditors had enough sources for the amount credited when the fact is that there was a huge gap between the date of withdrawal of cash and the subsequent deposit into the bank account?

3.

Whether the ITAT was justified in holding that the unexplained credit in the hands of the assessee is not sustainable when the fact remains that out of the total advance of Rs.1.50 crores the assessee himself had admitted Rs.50 lakhs as undisclosed income during the course of search. Consequently, whether the ITAT was justified in holding that the part of the advance/credit is genuine when the other part is not genuine and admittedly undisclosed?

Sri J.V. Prasad, learned counsel for the Revenue, states that para 25.10 of the order of the Tribunal deals with the issue sought to be raised in this appeal.

Perusal of this paragraph reveals that the Tribunal did not independently adjudicate the matter but merely followed its decision in

ITA.No.988/Hyd/2012. The order under appeal is a common order relating to both ITA.Nos.988/Hyd/2012 as well as ITA.No.1095/Hyd/2012, which is the subject matter of the appeal before us.

Paras 18 and 18.1 of the common order deal with ITA.No.988/Hyd/2012 and perusal thereof reflects that the Tribunal merely adverted to its earlier decision in ITA.No.1437/Hyd/2012 and basing thereon, it confirmed the deletion of the addition by the Commissioner of Income Tax (Appeals). Sri J.V. Prasad, learned counsel, is unable to state as to whether any appeals have been preferred against the orders of the Tribunal in ITA.Nos.988/Hyd/2012 and 1437/Hyd/2012.

Unless the decisions of the Tribunal in those appeals are also tested, there is no possibility for the revenue to subject the present consequential decision of the Tribunal following the said earlier decisions. On this short ground, we are disinclined to entertain this appeal. The appeal is accordingly dismissed. No order as to costs.

___________________ K.J. SENGUPTA, CJ

___________________ SANJAY KUMAR, J

Date: 08.08.2014 ES

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