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Income Tax Appellate Tribunal, “B’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
These two appeals by revenue are directed against different orders of CIT(A), Mysore for the assessment years 2006-07 & 2008- 09 dated 30.10.2014. The revenue has raised following grounds of appeals: Assessment Year 2006-07: 1. “Whether on the facts and circumstances of the case, the Ld. CIT(A) erred in allowing relief of Rs.78,09,410/- without appreciating that the assessee had not given any evidence to explain the sources for the investment made in Anekal land and therefore it is requested that the Hon’ble Tribunal may kindly set aside this issue to the file of the Assessing Officer for verification of the above.
ITA Nos.29 & 30/Bang/202015 P.N. Manjunath, Bangalore
Page 2 of 7 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) erred in allowing relief of Rs.1 Crore without appreciating that the assessee had not given any evidence to explain the sources for the investment made in Development of Anekal land and therefore it is requested that the Hon’ble Tribunal may kindly set aside this issue to the file of the Assessing Officer for verification of the above. 3. Whether on the facts and circumstances of the case, the Ld. CIT(A) erred in allowing relief of Rs.83 lakhs being the loan stated to have been taken from Shri Suresh Babu without appreciating that no evidence was filed in this regard; no confirmation was filed by Sri Suresh Babu and hence it is requested that the Hon’ble Tribunal may kindly set aside this issue to the file of the Assessing Officer for verification of the above.”
Assessment year 2008-09: 1. Whether on the facts and circumstances of the case, the Ld. CIT(A) erred in allowing relief of Rs.5 lakhs without appreciating that the assessee had not given the correct address and existence of Shri Christudass for verification and therefore it is requested that the Hon’ble Tribunal may kindly set aside this issue to the file of the Assessing Officer for verification of the above. 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) erred in allowing relief of Rs.25 lakhs without appreciating that the assessee had voluntarily disclosed additional income of Rs.25 lakhs from his projects, had not substantiated that the amounts received were in the nature of advances but not sale consideration while retracting the disclosure and therefore it is requested that the Hon’ble Tribunal may kindly set aside this issue to the file of the Assessing Officer for verification of the above. 3. Whether on the facts and circumstances of the case, the Ld. CIT(A) erred in allowing relief of Rs.2,58,75,000/- without appreciating that the assessee had not given the correct address and existence of Shri Christudass for verification and therefore it is requested that the Hon’ble Tribunal may kindly set aside this issue to the file of the Assessing Officer for verification of the above. 4. Whether on the facts and circumstances of the case, the Ld. CIT(A) erred in allowing relief of Rs.5,20,000/- without verification from the bank authorities regarding the withdrawal of Rs.9 lakhs on a day prior to search dates and therefore it is requested that the Hon’ble Tribunal may kindly set aside this issue to the file of the Assessing Officer for verification of the above.”
ITA Nos.29 & 30/Bang/202015 P.N. Manjunath, Bangalore
Page 3 of 7 2. First we take up the facts for the assessment year 2006-07. The brief facts of the case are that the assessee is an individual and is assessed to tax in the status of `Individual'. A search u/s.132 of the Income-tax Act,1961 ['the Act' for short] was carried out in the assessee's case on 28.12.2007. Consequently, a notice u/s.153A of the Act was issued. The assessee is engaged in the business as a land developer and is also a partner of M/s. Soundarya Silk Process and M/s.Soundarya Promoters 86 Developers, etc. The Assessee filed his return of income on 10.12.2009 admitting an income of Rs.3,91,472/- which was the remuneration received from M/s. Soundarya Silk Process and income from other sources. The Assessing Officer was of the view that the., assessee had purchased landed properties from one Sri.B.S.Rangappa to an extent of 8 acres and 20 guntas for Rs.34,20,000/-after incurring an expense of Rs.8,08,000/- towards Stamp Duty and Registration charges. It was explained that the properties were purchased on 26.05.2005 from Ashwathanarayana and others and there was an understanding between the parties to the effect that the sellers would be getting the BMRDA approvals and other related approvals for development work and the total agreed price was Rs.72,25,000/-. One of the modes of payment of a part of the agreed amount was by way of transferring the flats in M/s. Soundarya Nest Projects Developers by M/s. Soundarya Promoters & Developers. There was no written agreement executed between the parties. It was also explained that the total investment made by the assessee towards development of the said land was Rs.28,93,250/- and the, total expenditure incurred towards the said property was shown at Rs.1,91,33,169/-. The Assessing Officer vide his order dated 31.12.2009 u/s.143(3) r.w.s.153A of the Act has held that the explanation of the assessee was not acceptable and, therefore, added Rs.78,09,410/- u/s.69B of the Act. With regard to the
ITA Nos.29 & 30/Bang/202015 P.N. Manjunath, Bangalore
Page 4 of 7 investment of Rs.1.00 crore by the assessee for development of Anekal land, the Assessing Officer did not accept the explanation and treated the same as income without any basis. Further, the assessee had borrowed loan of Rs.83 lakhs from one Sri Suresh Babu. The same was also added on the surmises by the Assessing Officer. Thus, to these he made further additions of Rs.1,40,420/- being income from the House Property after disallowing the interest claimed towards borrowed capital, interest on capital from M/s. Soundarya Silk Process of Rs.72,000/-, remuneration of Rs.1,23,450/-, remuneration from M/s. Soundarya Promoters 86 Developers of Rs.1,80,000/-. He also charged interest u/s.234A, 234B and 234C. On appeal, the CIT(A) deleted the addition made by the A.O. Hence, the revenue is in appeal before us.
Similarly, for the assessment year 2008-09 the assessee raised an appeal before the Ld. CIT(A) and the brief facts of the case are that the assessee is an individual and is assessed to tax in the status of `Individual'. A search u/s.132 of the Act was carried out in the assessee 's case on 28.12.2007. Consequently, a notice u/s.153A was issued. The assessee is engaged in the business as a land developer and is also a partner of M/s. Soundarya Silk Process and M/s. Soundarya Promoters 86 Developers, etc. For the year under reference, the assessee filed his return of income on 10.12.2009 admitting an income of Rs.2,58,890/- which was the remuneration received from M/s. Soundarya Silk Process, M/s. Soundarya Promoters 86 Developers and income from house property. The assessee had claimed deduction of Rs.1,61,615/- being the interest paid on the borrowed capital against the income from house property. Further, the assessee had also paid Rs.25,541/- as interest on borrowed capital which was sought to be set off against the remuneration from M/s. Soundarya Silk Process. The Assessing
ITA Nos.29 & 30/Bang/202015 P.N. Manjunath, Bangalore
Page 5 of 7 Officer without any justification, disallowed these interest payments by invoking Section 14A. Further, the assessee had declared remuneration of Rs.17,688/- from M/s. Soundarya Silk Process. The Assessing Officer without any justification or any material with him to the contrary, made an addition of Rs.1.00 lakh alleging that the same was admitted during the course of search that took place on 28.12.2007. Further, the assessee had also claimed interest payment of Rs.25„541/- on the borrowed capital which was sought to be set off against the remuneration. The Assessing Officer again by invoking Section 14A, disallowed the same. Further, the assessee had paid Rs.10.00 lakhs to one Sri Sudheendra Babu on two different dates, i.e., on 03.11.2007 and 08.11.2007, but it was erroneously recorded under the head "Construction Expenses Account" as Rs.5.00 lakhs only. The Assessing Officer without appreciating the explanation of the assessee, made an addition of Rs.5.00 lakhs by invoking Section 69C of the Act. Further, the Assessing Officer made an addition of Rs.25.00 lakhs alleging that the same was agreed to be offered by the assessee during his statement recorded at the time of search and he also did not accept the explanation offered by the assessee. During the year the assessee had borrowed a sum of Rs.1,95,00,000/- from one Sri. Christu Das. Ignoring the explanation of the assessee, the AO added the entire amount of Rs.2,58,75,000/- as 'undisclosed income' which included assessee’s funds to the extent of Rs.57.00 lakhs and also Rs.6,75,000/- being the amount borrowed from the assessee’s wife. He also charged interest u/s 234A, 234B and 234C of the Act. On appeal, the CIT(A) deleted the addition made by the A.O. Hence, the revenue is in appeal before us.
The Ld. D.R. submitted that the CIT(A) has not given proper opportunity of hearing to the A.O. while deleting the addition made
ITA Nos.29 & 30/Bang/202015 P.N. Manjunath, Bangalore
Page 6 of 7 by him and submitted that the issue may be remitted back to the file of the A.O. for his reconsideration.
The Ld. A.R. relied on the orders of the lower authorities.
We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. Ld. D.R. submitted that in these assessment years, assessee has filed the additional evidences along with written submissions before Ld. CIT(A) on 23.3.2013. The same were forwarded to the A.O. by Ld. CIT(A). The A.O. submitted remand report on 21.10.2013. The assessee once again filed submissions before Ld. CIT(A) on 16.1.2014. The Ld. CIT(A), on the basis of these submissions and additional evidences without confronting these submissions to the A.O. deleted the additions. By reading the Ld.CIT(A)’s order, we are not in a position to appreciate on what is the basis for deletion of the additions made by the A.O. The order does not show any evidence that Ld. CIT(A) has considered to delete the additions and it is not based on any concrete evidence. Being so, in our opinion, in the interest of justice, it is appropriate to remit the entire issue to the file of the A.O. for reconsideration of the case afresh. 7. In the result, the appeals of the revenue are allowed for statistical purposes. Order pronounced in the open court on 1st April, 2021
Sd/- Sd/- (Beena Pillai) (Chandra Poojari) Judicial Member Accountant Member
Bangalore, Dated 1st April, 2021. VG/SPS
ITA Nos.29 & 30/Bang/202015 P.N. Manjunath, Bangalore
Page 7 of 7 Copy to:
The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order
Asst. Registrar, ITAT, Bangalore.