ITO, WARD-2, WARANGAL, WARANGAL vs. DR. AKULA SANJEEVAIAH, WARANGAL, WARANGAL

PDF · subscribers
ITA 1309/HYD/2016Status: DisposedITAT Hyderabad22 June 2018AY 2011-125 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that an admission made during a survey must be corroborated by documentary evidence. In the absence of such evidence, an addition based solely on an admission is not sustainable.

What were the facts?

During a survey, the assessee, a doctor, admitted to an additional income of Rs. 45 lakhs. However, in his return, he declared a lower income and claimed a refund on taxes paid on the higher amount. The Assessing Officer added the difference to his income, citing the admission.

What were the issues?

Whether an addition to income based solely on an admission made during a survey, without corroborative evidence, is valid.

Which sections of the Income-tax Act were involved?

Section 133A,Section 143(1),Section 143(3)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, HYDERABAD BENCH “B”, HYDERABAD

Before: SMT. P. MADHAVI DEVI & SHRI S. RIFAUR RAHMAN

For Appellant: Shri K.V. Chalamaiah
For Respondent: Smt. N. Swapna, Shri K.V. Chalamaiah

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “B”, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No. 1309/Hyd/2016 Assessment Year: 2011-12 ITO, vs. Dr. Akula Sanjeevaiah, Ward-2, Warangal. Warangal. PAN – ACNPA5446P

(Applicant) (Respondent) Revenue by : Smt. N. Swapna Assessee by : Shri K.V. Chalamaiah

Date of hearing : 13-06-2018 Date of pronouncement : 22-06-2018 ORDER PER P. MADHAVI DEVI, J.M.: This is Revenue’s appeal for the A.Y 2007-08, against the order of the CIT(A)-3, Hyderabad, dated 22.07.2016.

2.

Brief facts of the case are that the assessee, a medical professional, filed his return of income for the A.Y 2011-12 on 19.04.2012, declaring total income of Rs. 24,57,830/- which includes professional income, income from other sources and capital gains. The return was processed u/s 143(1) of the IT Act. Since there was survey operation u/s 133A of the Act on 08.10.2010, the assessment for the A.Y

2 ITA.No. 1309/Hyd/2016 Sri Dr. A. Sanjeevaiah, Warangal. 2011-12 was converted into compulsory scrutiny as per CBDT guidelines and during the assessment proceedings u/s 143(3) of the IT Act, the A.O asked the assessee to show cause as to why the entire additional income of Rs. 45 lakhs declared during the course of survey has not been returned by the assessee. In show cause notice, it was stated that in spite of admission of Rs. 45 lakhs as additional income during the course of survey, in the return of income, the assessee has admitted only a sum of Rs. 24,57,830/- whereas the assessee has paid taxes of Rs. 15 lakhs on the entire additional income, but claimed refund of Rs. 10,09,140. The assessee submitted his explanation stating that he had offered additional income of Rs. 45 lakhs from his profession and other sources during the course of survey, but after considering fact that due to increase in the number of doctors for the past two years who have started their practice in Parkala town, and the assessee is being in Government Services, could not spare much time on the practice, the income offered by him in the return of income was correct.

3.

The A.O however did not accept the assessee’s contentions. He perused the copies of the bank

3 ITA.No. 1309/Hyd/2016 Sri Dr. A. Sanjeevaiah, Warangal. statements, inpatient and outpatient records and x-ray collection registers for the month of January 2011 and observed that the assessee has not filed any documentary evidence and books of accounts in support of his contentions with reference to letter dated 30.12.2013. Holding that the assessee has failed to substantiate his claim, he brought the additional income of Rs. 33,44,000/- to tax. Aggrieved, the assessee preferred an appeal before the CIT(A), who allowed the same by observing that the addition made by the A.O is without any corroborative evidence. Aggrieved by the order of the CIT(A) the Revenue is in appeal before us.

4.

The Ld. DR supported the order of the A.O and submitted that the assessee during the course of survey had admitted the additional income of Rs. 45 lakhs and has also paid the taxes on said amount while filing the return of income but has claimed the refund of the taxes on the income of Rs. 33,44,000/-. Therefore, according to her, the assessee has not retracted his statement even at the time of filing of the return of the income, but has only retracted it subsequently, which is not permissible. He placed reliance upon the decision of the Hon’ble Punjab

4 ITA.No. 1309/Hyd/2016 Sri Dr. A. Sanjeevaiah, Warangal. and Haryana High Court in the case of Navdeep Dhingra Vs. CIT (2015) 56 taxmann.com 75 (P&H), wherein, under the similar circumstances, it was held that the retraction after two years of survey is not acceptable.

5.

The Ld. Counsel for the assessee, on the other hand, submitted that the assessee had erroneously offered and admitted additional income of Rs. 45 lakhs at the time survey, but later, on verification of his books of accounts, he found that the entire amount cannot be treated as his income. He therefore, filed the return of income ad admitted the actual admissible income, which has been brought it to tax. He, therefore, supported the order of the CIT(A).

6.

Having regard to the rival contentions and the material on record, we find that the assessee has been surveyed but there was no material or evidence found and impounded to show that the assessee had undisclosed income. The only basis for addition of undisclosed income is the admission of the assessee. However, at the time of filing of the return of income, though the assessee has paid the taxes on the income of Rs. 45 lakhs, the assessee has offered only a sum of Rs. 24,57,830/-, we find that there is

5 ITA.No. 1309/Hyd/2016 Sri Dr. A. Sanjeevaiah, Warangal. no material, whatsoever, before the A.O to support the addition made of undisclosed income. As held by various courts in catena of cases, an admission during the course of survey, has to be corroborated by documentary evidence. In the absence of the same, such an addition is not sustainable. In the result, the revenue’s appeal is dismissed.

7.

In the result the appeal filed by the Revenue is dismissed.

Pronounced in the open court on 22nd June, 2018.

Sd/- Sd/- (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Hyderabad, Dated: 22nd June, 2018 KRK 1) Dr.A. Sanjeevaiah C/o H. No. 20-99, Jaya Talkies Road, Parkal, Warangal. 2) ITO, Ward-2, Warangal. 3) CIT(A)-3, Hyderabad 4) Addl.CIT, Warangal Range, Warangal. 5) The Departmental Representative, I.T.A.T., Hyderabad. 6) Guard File.

More judgments on Section 133A

All 5,893 judgments and leading authorities on Section 133A →

Recent GST High Court judgments

Search GST case law →