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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” , HYDERABAD
Before: SHRI LALIET KUMAR, HON’BLE & SHRI G. MANJUNATHA, HON’BLE
2. Mohammad Lal Pasha, -do- Warangal, PAN : CADPM6575R. (Appellants) (Respondent) Assessee by: Shri A.V. Raghuram, Advocate Revenue by: Shri S. Mookambikeyan, Sr.A.R. Date of hearing: 25.07.2024 Date of pronouncement: 25.07.2024 O R D E R PER MANJUNATHA G. A.M.
These appeals filed by the assessees are directed against the separate, orders, both dated 19.02.2024 of the Ld.CIT(A) – 12, Hyderabad relating to assessment year 2021-22.
These appeals are time barred by 21 days. The parties were heard on delay in filing of appeals and after hearing both sides, the delay in filing appeals is condoned.
2.1 The brief facts of the case are that, information was received from Police Authorities, Sironcha Police Station, Gadchiroli District that cash of Rs.1,20,00,000/- lakhs was found in the possession of Sri Sanjay Gangaram Awathare along with his driver on 02.06.2020. He was not having any supporting documents to establish the source of cash. Sanjay Gangaram Awathare submitted that he is working for Mr. Mohd Bashu Miya, who is a Tendu Patta Contractor and he was carrying the cash belonging to Mr. Mohd Bashu Miya for making payment to Tendu Patta gatherers in contract area of Bhamragarh, Gadchiroli and surrounding villages. The police authorities informed the same to the Income Tax Department and accordingly, a warrant of authorization u/s 132A of the Act was executed on Mr. Mohd Bashu Miya and Sanjay Gangaram Awathare on 26.06.2020. During the course of investigation, Sanjay Gangaram Awathare submitted copies of agreement executed between the officials of Gram Sabha / Panchayat for procuring Tendu Patta. He further submitted that source for cash of Rs.1,20,00,000/- was out of cash withdrawal from Warangal Urban Bank Co-operative Bank Limited by five persons namely, Thalapalli Nawab, Sanjay Awathare, Manda Srinivas, Arif Pasha Mohammad and Lal Pasha, including him. Consequent to proceedings u/s 132A of the Act, the assessment has been taken and during the course of assessment proceedings, the Assessing Officer called upon the assessee to explain source for cash of Rs.9,00,000/- claimed to have been withdrawn from bank account. Since the assessee could not file necessary evidence, the Assessing Officer made addition of Rs.9,00,000/- on protective basis in the hands of the assessee as unexplained money under Section 69 of the Income Tax Act, 1961 (“the Act”) and taxed @ 60% under Section 115BBE of the Act.
The assessee carried the matter in appeal before the first appellate authority. Before the Ld.CIT(A), the assessee reiterated his arguments before the investigation wing and before the Assessing Officer and submitted that the cash belonging to Mr. Mohd Bashu Miya and he was carrying the money on behalf of his employer for making payment to formers to purchase Tendu Patta. The Ld.CIT(A) after considering and also taken note of the relevant facts, confirmed the addition made by the Assessing Officer in the hands of the assessee on substantive basis, as the assessee has claimed in the appellate proceedings that an amount of Rs.9,00,000/- belongs to him.
Aggrieved by the order of Ld.CIT(A), the assessee is now in appeal before us.
The learned counsel for the assessee Sri A.V. Raghuram, submitted that the Ld.CIT(A) has erred in confirming additions made by the Assessing Officer, towards cash found in possession of the assessee amounting to Rs.9,00,000/-, even though, the assessee stated before the police authorities and even before the investing officer that the said cash belongs to Mr. Mohd Bashu Miya, a Tendu merchant. The counsel for the assessee further submitted that the Assessing Officer had made additions on protective basis. However, the Ld.CIT(A) confirmed the addition on substantive basis even though the entire amount of Rs.1,20,00,000/- cash found in possession of Sanjay Gangaram Awathare was added in the hands of Mr. Mohd Bashu Miya. Therefore, he submitted that additions made by the Assessing Officer should be deleted.
On the other hand, Shri Mookambikeyan, Sr.A.R. supporting the orders of Ld.CIT(A) submitted that the assessee could not establish the source of cash found in his possession amounting to Rs.9,00,000/- and thus, the Ld.CIT(A) has rightly sustained additions on substantive basis and therefore, the order of Ld.CIT(A) should be upheld.
Heard both the parties, perused the materials available on record and gone through the orders of authorities below. The Assessing Officer made addition on protective basis for Rs.9,00,000/- after considering the relevant explanation given by the assessee during the course of investigation that the said cash belonged to Mr. Mohd Bashu Miya, a tendu merchant, because, substantive addition has been made in the hands of Mr. Mohd Bashu Miya in his assessment. The learned AR for the assessee submitted that the appeal filed by the Mr. Mohd Bashu Miya is pending before the Ld.CIT(A). Once the substantive addition made in the case of other person is pending for adjudication before the first appellate authority, in our considered view, the protective addition made in the hands of the appellant cannot be decided independently. In our considered view, the Ld.CIT(A) should have consolidated the appeals of the present assessee along with the appeal of Mr. Mohd Bashu Miya. Therefore, we set aside the order passed by the Ld.CIT(A) and restore the issue back to the file of Ld.CIT(A) and also direct the Ld.CIT(A) to decide this appeal along with appeal filed by Mr. Mohd Bashu Miya in and decide the issue in accordance with law.
In the result, the appeal of the assessee is allowed for statistical purposes.
ITA 496/Hyd/2024
The facts and issues involved in this appeal are identical to the facts and issues which we had considered in in the case of Shri Arif Mohammad for A.Y. 2021-22. The facts considered by us and reasons given in preceding paragraph no.7 shall apply mutatis and mutandis to this appeal, as well. Therefore, for similar reasons, we set aside the order of Ld.CIT(A) to decide this appeal along with the appeal filed by the assessee in ITA No.12/10033/2021 and decide the issue in accordance with law.
In the result, the appeal of assessee is allowed for statistical purposes.
In the combined result, both the appeals of assessees are allowed for statistical purposes.
Order pronounced in the Open Court on 25th July, 2024.