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Income Tax Appellate Tribunal, Hyderabad ‘B‘ Bench, Hyderabad
Before: Shri Laliet Kumar & Shri Madhusudan Sawdia
Per Laliet Kumar, J.M This appeal filed by the assessee is directed against the assessment order dated 31/10/2023 relating to A.Y.2021-22 u/s 143(3) r.w.s. 144C(13) of the I.T. Act, 1961.
The assessee raised the following grounds:
ITA 640 of 2023 Sridhar Gurram ITA 640 of 2023 Sridhar Gurram ITA 640 of 2023 Sridhar Gurram ITA 640 of 2023 Sridhar Gurram ITA 640 of 2023 Sridhar Gurram
Facts of the case, in brief, are that the assessee is a non-resident, filed the return of income for the A.Y 2021-22 on 30.12.2021 declaring income of Rs.Nil. Subsequently, the case was selected for scrutiny assessment under CASS in accordance with the provisions of the I.T. Act, 1961 for the reason “Large cash deposits in bank account and assessee has also purchased/sold one or more properties during the year (both buying and selling transactions are to be considered). Statutory notices u/s 143 (2) and 142(1) of the I.T. Act, 1961 were issued and served on the ITA 640 of 2023 Sridhar Gurram assessee to which the assessee filed the requisite details as called for by the Assessing Officer from time to time. The assesee has thus submitted that the sources of cash deposits were from the amounts received from father and wife and cash withdrawals of earlier period, but has not given proper documentary evidences. Since the assessee is a Non-Resident, the matter was referred to DRP who justified the action of the Assessing Officer. Rejecting all the objections and claims made by the assessee, the Assessing Officer completed the assessment and assessed the total income of the assessee at Rs.1,36,50,000/- the details of which are as under:
ITA 640 of 2023 Sridhar Gurram
ITA 640 of 2023 Sridhar Gurram In view of the above payment details, it is ascertained from the submission made by the assesse and the case record that, against the total investment of Rs.3,05,93,390/- towards purchase of above discussed property vide documents no.1429/2021 dated 20-01-2021, the total amount paid from banking loan and out of cash deposits stands to be Rs.2,47,16,424/- (20674904 + 4041520) only as per all the submission made by the assesse and after verifying all bank account statement on the record. It is also observed from the ICICI Bank A/c. No. 801086355 statement that out of total cash deposits of Rs.74,50,000/- the payments made towards M/s.Aqua Space Developers Private Limited found to be Rs.40,41,520/- and in the same financial year i.e. F.Y.2020-21 a total amount of Rs.37,62,500/- paid towards purchase of another property and payments made to M/s. My Home Cons (As shown in bank account statement)”
Aggrieved with such order of the Assessing Officer, the assessee is in appeal before the Tribunal.
The learned Counsel for the assessee submitted that the assessee being an NRI, does not have any source of earning in India and that there is no scope or intention to evade the tax in India, since the assessee has maintained proper record for the transactions and discharged its onus by furnishing (a) nature of transaction (b) genuineness of transactions and (c) creditworthiness of the gifts given to the assessee. It is the ITA 640 of 2023 Sridhar Gurram contention of the learned AR that the assessee during the year under consideration has made the total investment of Rs.3,85,37,076/- (by making payment to M/s. Aqua Space Developers (P) Ltd (Rs.3,43,87,076/-) and also making the investment in My Home Constructions (P) Ltd for an amount of Rs.41,50,000/-). The explanation of the assessee before the DRP was mentioned at page 7 of the DRP is as under:
The DRP has sought a remand report on the basis of the explanation and the evidences filed by the assessee, the Assessing Officer had objected and filed the remand report. In this regard, the DRP noted as under:
ITA 640 of 2023 Sridhar Gurram ITA 640 of 2023 Sridhar Gurram ITA 640 of 2023 Sridhar Gurram
The Assessing Officer filed the remand report on 21.9.2023 and the same has been reproduced by the DRP in para 2.2.5. In the remand report, the Assessing Officer has dealt with the submission and the explanation of the income of father-in-law and mother-in-law and concluded that the transaction does not appears to be genuine. The relevant paras 4.5 to 4.10 of the remand report as reproduced by the DRP is as under:
ITA 640 of 2023 Sridhar Gurram
ITA 640 of 2023 Sridhar Gurram
The DRP had rejected the contention of the assessee with respect to the explanation given by the assessee for Rs.74,50,000/- and also for Rs.35.00 lakhs and Rs.27.00 lakhs. The contention of the learned AR before us are that the assessee had submitted that the father and wife were earning income from agricultural activities and for that purposes, the assessee had placed on record the certificate of income from MRO and Tehsildar. The assessee had also placed on record the evidences with respect to the details of crop grown etc. However, the learned AR submitted that the DRP relying upon the remand report of the Assessing Officer rejected the submission of the assessee. Similarly, the DRP had also rejected the contention of the assessee with respect to the explanation, explaining the source of the amount of Rs.35.00 lakhs received from Smt. P Bharathi on the ground that the assessee has entered into alleged round- tripping of his own money. Further, the DRP had also rejected that the explanation of the assessee with respect to Rs.27.00 lakhs which was given by the brother-in-law of the assessee. For all these, the assessee had filed affidavit, documents and ITR of all the 3 persons.
It is the contention of the AR that the Assessing Officer/DRP has not examined the issue in details and have failed to take cognizance of the documents filed by the assessee and had wrongly rejected the documents filed by the assessee. It is the submission of the assessee that since the findings of the DRP given in Para 2.2.13.2 to 2.13.4 which is to the following effect is ITA 640 of 2023 Sridhar Gurram very cryptic, non-speaking, therefore, it is the submission that the matter may kindly be remitted back to the file of the lower authorities for passing a fresh order. Relevant paras 2.2.13.2 to 2.2.13.4 is reproduced as under:
The learned DR, on the other hand, heavily relied upon the order passed by the Assessing Officer and the DRP. The learned DR relied upon the decisions in the case of Smt. Prema Sundari reported in 42 Taxmann.com 178 & Rakesh Kumar Gupta, 115 Taxmann.com 438.
We have heard the rival arguments made by both sides and perused the material available on record as well as the documents filed before us and also before the Assessing Officer. As discernible from the order passed by the DRP, it is clear that ITA 640 of 2023 Sridhar Gurram the DRP while upholding the addition, has not given any reasons for not accepting the evidences filed by the assessee with respect to the amount of Rs.74,50,000/-, Rs.35,00,000/- and Rs.27,00,000/-. We are of the considered opinion that the detailed reasonings/basis for rejecting the document, more particularly when the assessee has filed the documents from Revenue Authorities showing ownership of the agricultural land(his father-in-law) and Pattadar Pas Book and certificate from the Tehsildar become necessary, it was incumbent upon the authorities to examine the document and reject thereof more particularly when the assessee’s father-in-law was holding agricultural land of 15.31 acres and carrying out agricultural activities. Similarly, his wife was also holding agricultural land of 2.93 acres which were duly supported by the documents. In our view, ends of justice would be served if another opportunity is granted to the assessee for proving its case before the lower authorities. Simultaneously, the lower authorities shall examine the documents and shall give reasons for accepting or rejecting the submissions/documents of the assessee. Needless to say, the authority shall also consider the applicable decisions in this regard as may be cited by the learned AR and now relied upon by the DR. Considering the totality of the facts of the case and in the interest of natural justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to re-do the assessment afresh after providing sufficient opportunities of being heard to the assessee. The assessee is also hereby directed to appear before the Assessing Officer on the appointed date and ITA 640 of 2023 Sridhar Gurram time and furnish the requisite details without seeking any adjournment under any pretext. We hold and direct accordingly.
In the result, appeal filed by the assessee is allowed for statistical purposes.