THE ITO WARD - 2, RAJAHMUNDRY vs. SRI METLU RAGHAVA REDDY, RAJAHMUNDRY

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ITA 124/VIZ/2014Status: DisposedITAT Visakhapatnam09 May 2018AY 2005-068 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The CIT(A) admitted the additional evidence and considered the assessee's explanation that notices were sent to an old address. Based on the additional evidence and remand report, the CIT(A) found that the assessee had indeed purchased property in 1999 and sold it in 2004 and 2005.

What were the facts?

The Assessing Officer added Rs. 42,12,900/- as unexplained income from undisclosed sources for investment in property, as the assessee failed to provide supporting evidence. The assessee later submitted additional evidence from the SRO indicating no transaction in their name on a specific date.

What were the issues?

Whether the addition of investment in property as unexplained income was justified without considering the additional evidence provided by the assessee regarding the source of funds.

Which sections of the Income-tax Act were involved?

Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI V. DURGA RAO, HON’BLE & SHRI D.S. SUNDER SINGH, HON’BLEShri V. Appala Raju – Sr.DR

For Respondent: Shri V. Appala Raju – Sr.DR
Hearing: 24/04/2018

PER V. DURGA RAO, JUDICIAL MEMBER

This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals), Visakhapatnam, dated 04/02/2014 for the Assessment Year 2005-06. 2. Facts of the case, in brief, are that assessee is an individual. As per AIR data, the assessee has made investment in purchase of property at Rs. 42,12,900/-. The Assessing Officer has issued a notice under section 142(1) along with copy of individual transaction statement, which was served on the assessee on (Metlu Raghava Reddy)

05/09/2007 asking to file a true and correct return of income for Assessment Year 2005-06. In the assessment order, the Assessing Officer has observed that since the assessee failed to produce any supportive evidence with the source of investment made in the property to the extent of Rs. 42,12,900/-, the same has been treated as unexplained income from undisclosed source and added the same in the hands of the assessee.

3.

On appeal before the ld. CIT(A), the assessee has filed an additional evidence from the SRO, Saroor Nagar addressing to Assessing Officer that there is no transaction in the name of the assessee on 01/12/2004. The same was forwarded to Assessing Officer for his comments. The Assessing Officer filed his reply vide letter dated 28/08/2013, which was forwarded to the assessee for his comments/objections. The assessee has submitted that no notice was served on him, as it was sent to old address, hence, he could not attend on the date of hearing. Accordingly, ld. CIT(A) by considering the explanation given by the assessee, admitted the additional evidence. The ld. CIT(A) also considered the remand report and the objections filed by the assessee, which are reproduced as under:- “5.3 From the report, it is seen that the assessee along with 4 others had purchased property i.e., two plots of land of an extent of 1452 sq.yds. each at Ramakrishnapuram, (Metlu Raghava Reddy)

Saroornagar for a consideration of Rs. 1,80,000/- each from Vissam Raju and two others vide sale deed dated.16.12.1999 registered as Doc. No.1925/2000 & Doc.No.1926/2000. It is also seen that the assessee along with 4 others referred in the above sale deeds sold away the above plots of land to Sunil Kumar Reddy by way of Agreement cum General Power of Attorney dated 1st December, 2004 and to B.V.V.S.N.Raju and Chandrasekhar Reddy by way of Agreement cum General Power of Attorney at 19th March, 2005 for Rs.31,78,500/- and Rs.31,65,500/- respectively. The documents were registered as Doc. No.5862/2004 and Doc.No.1256/05. The report of the AO along with above referred documents was sent to the assessee for his comments/objection and the case was fixed for hearing on 06.01.2014. The assessee filed reply vide letter dtd.06.01.2014 stating as under:- The assessing officer has not disproved the clarification issued by the office of Sub-

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