Ganta Srinivasa Rao, Visakhapatnam V. The Assistant Commissioner of Income Tax, Circle-3(1), Visakhapatnam

CO 4/VIZ/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5713 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 17-09-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 17-02-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K SONOWAL
• Keywords: Capital asset; Cost of acquisition; Set aside; Capital Gains
• Section: 201; 48; 13; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM , . . , BEFORE SHRI N.K.CHOUDHRY, HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, HONBLE ACCOUNTANT MEMBER ./ I.T. A.NO. 417/VIZ/2019 ( / A SSESSMENT Y EAR : 2013 - 14) ASST. COMMISSIONER OF INCOME TAX CIRCLE - 3( 1 ) VISAKHAPATNAM VS. SHRI GANTA SRINIVASA RAO D.NO.1 - 84 - 16/1/1, PLOT NO.231/4 , MVP COLONY VISAKHAPATNAM [PAN : ADYPG4435G] ( / APPELLANT) ( / RESPONDENT) CROSS OBJECTION NO. 0 4 /VIZ/202 0 (ARISING OUT OF I.T. A.NO. 41 7 /VIZ/20 19 ) ( / A SSESSMENT Y EAR : 201 3 - 14 ) SHRI GANTA SRINIVASA RAO D.NO.1 - 84 - 16/1/1, PLOT NO.231/4 MVP COLONY VISAKHAPATNAM [PAN : ADYPG4435G] VS. ASST. COMMISSIONER OF INCOME TAX CIRCLE - 3(1) VISAKHAPATNAM ( / APPELLANT) ( / RESPONDENT) ./ I.T. A.NO. 423/VIZ/2019 & 424/VIZ/2019 ( / A SSESSMENT Y EAR : 2013 - 14 AND 2014 - 15 ) SHRI GANTA SRINIVASA RAO D.NO.1 - 84 - 16/1/1, PLOT NO.231/4 MVP COLONY VISAKHAPATNAM [PAN : ADYPG4435G] VS. ASST. COMMISSIONER OF INCOME TAX CIRCLE - 3(1) VISAKHAPATNAM /REVENUE BY : SHRI D.K.SONOWAL, CIT(DR) / ASSESSEE BY : SHRI G.V.N.HARI, AR / DATE OF HEARING : 07.09.2021 / DATE OF PRONOUNCEMENT : 17 .09.2021 2 ITA NO. 417/VIZ/2019, CO NO.04/VIZ/2020 ITA NO.423/VIZ/2019 AND 424/VIZ/2019 A.Y.20 13 - 14 & 2014 - 15 GANTA SRINIVASA RAO , VISAKHAPATNAM / O R D E R P ER BENCH : THE REVENUE FILED APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] - 1, VISAKHAPATNAM IN ITA NO.10224/2017 - 18/ACIT, C - 3(1), VSP/2017 - 18 DATED 25.03.2019 AND THE ASSESSEE FILED CROSS OBJECTION IN SUPPORT OF THE ORDER OF THE LD.CIT(A). THE ASSESSEE ALSO FILED CROSS APPEALS FOR THE ASSESSMENT YEAR (A.Y.) 2013 - 14. FOR THE A.Y 2014 - 15 THE ASSESSEE FILED THE APPEAL. SINCE THE FACTS ARE IDENTICAL, THESE APPEALS ARE CLUBBED, HEARD TOGETHER AND A COMMON ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AS UNDER. 1.1. BRIEF FACTS OF THE CASE FOR THE A.Y.2013 - 14 ARE THAT THE ASSESSEE HAD FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.2,05,60,960/ - AND AGRICULTURAL INCOME OF RS.1,28,900/ - . SINCE THE RETURN OF INCOME WAS FIL ED BEYOND THE DUE DATE FOR FILING THE RETURNS OF INCOME, THE ASSESSING OFFICER (AO) ISSUED NOTICE U/S 148 AND TAKEN UP THE CASE FOR ASSESSMENT. DURING THE COURSE OF SCRUTINY PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE WAS THE CO - OWNER OF LAND ADMEASURING 1.45 ACRES LOCATED AT OLD SURVEY NO.318/3A1, NEW SURVEY NO.318/3A1B, 318/3A1C, 318/3A1D &318/3A1E, NOLAMBUR VILLAGE, AMBATTUR TALUK, THIRUVALLUR DISTRICT OF TAMILNADU. OUT OF TOTAL LAND HOLDING OF 1.45 ACRES, THE ASSESSEE OWNS 0.45 3 ITA NO. 417/VIZ/2019, CO NO.04/VIZ/2020 ITA NO.423/VIZ/2019 AND 424/VIZ/2019 A.Y.20 13 - 14 & 2014 - 15 GANTA SRINIVASA RAO , VISAKHAPATNAM ACRES. THE ASSESSEE ALONG WITH OTHER CO - OWNERS HAVE ENTERED INTO DEVELOPMENT AGREEMENT WITH M/S BBCL VAJRA (PROMOTERS), NO.20, MYLAI RANGANATHAN STREET, T.NAGAR, CHENNAI FOR THEIR LAND ADMEASURING 1.45 ACRES FOR RESIDENTIAL AND COMMERCIAL DEVELOPMENT. AS PER THE JOINT DEVELOPMENT AGREEMENT (JDA) ENTERED INTO BETWEEN THE LAND OWNERS AND THE PROMOTERS, THE LAND OWNERS WE RE ENTITLED FOR 1/3 SHARE OF SUPER BUILT UP AREA AND THE PROMOTERS WE RE ENTITLED FOR 2/3 SHARE OF THE SUPER BUILT UP AREA ALONG WITH PROPORTIONATE CAR PARKING SPACE. AS PER THE AGREEMENT, BOTH THE PARTIES HAVE ALSO AGREED TO PURCHASE PREMIUM FSI AND THE CHARGES FOR PREMIUM FSI WERE TO BE BORNE IN THE RATIO OF 2/3 AND 1/3 RESPECTIVELY BY THE LAND OWNERS AND THE PROMOTERS. T HE SHARE OF CONSTRUCTED AREA WOULD REMAIN THE SAME I.E 2/3 RD AND 1/3 RD RATIO FOR THE PROMOTERS AND THE LAND OWNERS. HOWEVER, AS SEEN FROM THE ASSESSMENT ORDER, DUE TO DELAY IN HANDING OVER OF THE PROPERTY TO THE DEVELOPERS AND AS DEMANDED BY THE DEVELOPER, THE ENTIRE DEVELOPMEN T CHARGES ON PREMIUM FSI WAS BORNE BY THE LAND OWNERS CONTRARY TO THE RECITALS OF THE AGREEMENT. THUS, THE CO - OWNERS OF THE LAND HAVE PAID THE DEVELOPMENT CHARGES OF RS.16,72,20,000/ - TO THE CHENNAI METROPOLITAN DEVELOPMENT AUTHORITY TOWARDS PREMIUM FSI AND OTHER CHARGES AND TRANSFERRED THE LAND ALONG WITH BUNDLE OR RIGHTS FOR PREMIUM FSI TO THE DEVELOPERS FOR 4 ITA NO. 417/VIZ/2019, CO NO.04/VIZ/2020 ITA NO.423/VIZ/2019 AND 424/VIZ/2019 A.Y.20 13 - 14 & 2014 - 15 GANTA SRINIVASA RAO , VISAKHAPATNAM CONSTRUCTION OF THE RESIDENTIAL CUM COMMERCIAL VENTURE AT NOLAMBUR VILLAGE. THE ASSESSEE IS HAVING 0.45 ACRES EQUIVALENT TO 19602 SQ.FT IN THE COO WNERSHIP. THE ASSESSEE RECEIVED THE TOTAL SALE CONSIDERATION OF RS.7,43,59,249/ - AND CLAIMED THE DEDUCTIONS TOWARDS THE SHARE OF DEVELOPMENT CHARGES, INDEXED COST OF ACQUISITION AND ARRIVED AT THE CAPITAL GAINS AND ACCORDINGLY FILED THE RETURN OF INCOME. IN THE ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HAD TRANSFERRED THE LAND OF 19602 SQ.FT TO THE DEVELOPER, THEREFORE, VIEWED THAT THE ENTIRE LAND OF 19602 SQ.FT NEED TO BE TAXED AS LONG TERM CAPITAL GAINS IN THE HANDS OF THE ASSESSEE . ACC ORDINGLY, VALUED THE ENTIRE SHARE OF LAND OF THE ASSESSEE ADMEASURING 0.45 ACRES EQUIVALENT TO 19602 SQ.FT @5,500 PER SQ.FT AND ARRIVED AT THE SALE THE CONSIDERATION OF RS.10,78,11,000/ - AFTER REDUCING THE INDEXED COST OF ACQUISITION , THE BALANCE AMOUNT O F RS.10,75,79,050/ - (10,78,11,000 - 2,31,950) WAS BROUGHT TO TAX. THE AO ALSO REJECTED THE ASSESSEES CLAIM FOR PROPORTIONATE SHARE OF EXPENSES INCURRED, OUT OF THE TOTAL EXPENSES PAID TO CMDA TOWARDS DEVELOPMENT AND PREMIUM FSI CHAR GES AMOUNTING TO RS.16,72,20,000/ - , WHICH WAS RS.5,18,95,862/ - CLAIMED IN THE RETURN OF INCOME. 2. AGAINST THE ORDER OF THE AO THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) FOUND THAT THE ASSESSEE WAS CO - OWNER FOR 0.45 5 ITA NO. 417/VIZ/2019, CO NO.04/VIZ/2020 ITA NO.423/VIZ/2019 AND 424/VIZ/2019 A.Y.20 13 - 14 & 2014 - 15 GANTA SRINIVASA RAO , VISAKHAPATNAM ACRES AND TRANSFE RRED THE ENTIRE LAND TO THE DEVELOPER, IN LIEU OF HIS SHARE OF BUILT UP AREA OF 1/3 RD OF CONSTRUCTED SPACE . THE LD.CIT(A) VIEWED THAT SINCE THE ASSESSEE WAS ENTITLED FOR 1/3 RD OF CONSTRUCTED AREA ALONG THE CAR PARKING , HE RETAINED THE 1/3 RD SHARE OF LAND AND TRANSFERRED THE 2/3RDS OF LAND WHICH WORKS OUT 13,608 SQ FEET TO THE PROMOTERS . THUS, THE LD.CIT(A) HELD THAT HAVING TRANSFERRED THE ENTIRE LAND IN LIEU OF 1/3 SHARE OF BUILT UP SPACE, THE AO IS INCORRECT IN TAXING THE ENTIRE AREA OF 1 9602 SQ.FT INSTEAD OF 13068 SQ.FT WHICH WAS TRANSFERRED TO THE DEVELOPER. SINCE THE ASSESSEE HAS RETAINED 1/3 SHARE AND TRANSFERRED 2/3 SHARE TO THE DEVELOPER, THE LD.CIT(A) HELD THAT ONLY THE SALE CONSIDERATION OF 13608 SQ.FT NEEDS TO BE BROUGHT TO CAPIT AL GAINS TAX, AFTER DEDUCTING THE COST OF ACQUISITION. ACCORDINGLY DIRECTED THE AO TO COMPUTE THE CAPITAL GAINS. 2.1 . WITH REGARD TO THE PROPORTIONATE SHARE OF DEVELOPMENT CHARGES, AFTER HAVING GONE THROUGH THE JDA, THE LD.CIT(A) OBSERVED THAT THE FSI AND OTHER EXPENDITURE IS INTRINSICALLY RELATED TO THE PROJECT, THEREFORE, IT IS NOTHING BUT THE COST OF IMPROVEMENT, HENCE DIRECTED THE AO TO ALLOW THE PRO - RATA EXPENSES OF RS5.18 CRORES AND RECOMPUTE THE CAPITAL GAINS ACCORDINGLY. 3. AGAINST THE ORDER OF THE LD.CIT(A)THE DEPARTMENT HAS FILED APPEAL BEFORE THIS TRIBUNAL. DURING THE APPEAL HEARING, THE LD.DR VEHEMENTLY SUPPORTED THE ORDER OF THE AO AND ARGUED THAT SINCE, THE ASSESSEE HAS 6 ITA NO. 417/VIZ/2019, CO NO.04/VIZ/2020 ITA NO.423/VIZ/2019 AND 424/VIZ/2019 A.Y.20 13 - 14 & 2014 - 15 GANTA SRINIVASA RAO , VISAKHAPATNAM TRANSFERRED THE ENTIRE LAND TO THE DEVELOPER, THE ENTIRE SALE CONSIDERAT ION OF 19602 SQ.FT NEEDS TO BE CONSIDERED FOR THE PURPOSE OF CAPITAL GAINS AND ACCORDINGLY ARGUED THAT THE AO RIGHTLY TAXED THE CAPITAL GAINS WHICH WORKED OUT TO RS.10.78 CRORES AND NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD.AO AND H ENCE REQUEST ED TO SET ASIDE THE ORDER OF THE LD.CIT(A) AND RESTORE THE ORDER OF THE AO. 3.1 . IN RESPECT OF PRO - RATA SHARE OF EXPENSES, THE LD.DR SUPPORTED THAT OSR CHARGES, PREMIUM FSI ETC.. ARE NEITHER RELATED TO IMPROVEMENT NOR RELATED TO TRANSFER OF THE CAPITAL AS SET, HENCE ARGUED THAT THEY NEVER FALL UNDER SPECIFIC ITEMS OF DEDUCTION U/S 48 OF THE INCOME TAX ACT, THEREFORE, NOT ALLOWABLE DEDUCTIONS AND HENCE, REQUESTED TO SET ASIDE THE ORDER OF THE LD.CIT(A) AND ALLOW THE APPEAL OF THE REVENUE. 3.2 . ON THE OT HER HAND, THE LD.AR RELIED ON THE ORDER OF THE LD.CIT(A) AND ARGUED THAT THE AO ERRONEOUSLY TAKEN THE ENTIRE LAND OF 19602 SQ.FT FOR COMPUTING THE CAPITAL GAINS. SINCE THE ASSESSEE WAS SUPPOSED TO RECEIVE 1/3 RD SHARE OF BUILT UP AREA, THEREFORE HE RETAIN ED 1/3 RD SHARE OF LAND, HENCE, SUBMITTED THAT WHAT WAS TRANSFERRED TO THE DEVELOPER WAS ONLY 2/3 RD OF THE LAND HOLDING, BUT NOT THE ENTIRE LAND. HENCE, SUBMITTED THAT THE LD.CIT(A) RIGHTLY DIRECTED THE AO TO CONSIDER ONLY 2/3 RD SHARE OF THE 7 ITA NO. 417/VIZ/2019, CO NO.04/VIZ/2020 ITA NO.423/VIZ/2019 AND 424/VIZ/2019 A.Y.20 13 - 14 & 2014 - 15 GANTA SRINIVASA RAO , VISAKHAPATNAM LAND FOR CA PITAL GAINS AN D NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD.CIT(A). 3.3 . WITH REGARD TO PRO - RATA SHARE OF DEVELOPMENT EXPENSES, THE LD.AR ARGUED THAT IT IS THE PROJECT COST AND AS PER THE AGREEMENT, THE ASSESSEE NEEDS TO BEAR THE 2/3 OF EXPENSES, HOWEVER, DUE TO DELAY, THE LAND OWNERS WERE FORCED TO BEAR THE ENTIRE EXPENSES, THUS, TRANSFERRED THE BUNDLE OF RIGHTS ALONG WITH ADDITIONAL FSI. THEREFORE, ARGUED THAT THE BUNDLE OF RIGHT S ACCRUED TO THE ASSESSEE ON ACCOUNT OF ADDITIONAL SPACE IS NOTHING BUT IMPROVEMENT WHICH IS RELATED TO THE TRANSFER OF LAND, HENCE, ARGUED THAT THE LD.CIT(A) HAS RIGHTLY DIRECTED THE AO TO ALLOW THE SUM OF RS.5.18 CRORES OUT OF RS.16.72 CRORES AND NO INTERFERENCE IS CALLED FOR. 4. WE HAVE HEARD BOTH THE PARTIES AND PER USED THE MATERIAL PLACED ON RECORD. AS PER THE JDA, LAND OWNERS WE RE ENTITLED FOR 1/3 RD SHARE OF CONSTRUCTED AREA ALONG WITH 1/3 RD SHARE OF CAR PARKING. THUS, IT IS CLEAR THAT OUT OF THE TOTAL LAND TRANSFERRED TO THE DEVELOPER, THE LAND OWNERS WE RE ENTIT LED FOR 1/3 RD SHARE OF LAND. W HAT WAS TRANSFERRED TO THE DEVELOPER WAS ONLY 2/3RDS OF THE LAND, BUT NOT THE ENTIRE LAND AS RIGHTLY OBSERVED BY THE LD.CIT(A). THEREFORE, WHAT IS TO BE BROUGHT TO TAX UNDER CAPITAL GAINS IS 2/3 RD OF LAND AREA, BUT NOT THE ENTIRE LAND. THUS, THE LD.CIT(A)HAS RIGHTLY 8 ITA NO. 417/VIZ/2019, CO NO.04/VIZ/2020 ITA NO.423/VIZ/2019 AND 424/VIZ/2019 A.Y.20 13 - 14 & 2014 - 15 GANTA SRINIVASA RAO , VISAKHAPATNAM DIRECTED THE AO TO ADOPT 2/3 RD OF 19602 SQ.FT INSTEAD OF 19602 SFT. ADOPTING THE SRO RATE OF RS.5,500 PER SQ.FT WHICH WORKED OUT TO 13068. HENCE, WE DO NOT FIND ANY REASON TO INTERFER E WITH THE ORDER OF THE LD.CIT(A) AND THE SAME IS UPHELD. THE APPEAL OF THE REVENUE ON THIS GROUND IS DISMISSED. 5. THE NEXT ISSUE IS WITH REGARD TO PRO - RATA DEVELOPMENT EXPENSES OF RS.5.18 CRORES OUT OF TOTAL EXPENDITURE OF RS.16,72,00,000/ - INCURRED FOR THE PROJECT TOWARDS ADDITIONAL FSI AND DEVELOPMENT CHARGES. AS PER THE AGREEMENT, THE ASSESSEE HAS TO BEAR 2/3 RD OF DEVELOPMENT AND FSI CHARGES . H OWEVER, DUE TO DELAY IN HANDING OVER THE SITE, ON THE DEMAND MADE BY THE DEVELOPER, THE LANDOWNERS HAVE PAID THE ENTIRE DEVELOPMENT AND ADDITIONAL FSI CHARGES WHICH WAS NOT DISPUTED BY THE AO. IT IS A FACT THAT THE LANDOWNERS HAVE PAID THE DEVELOPMENT CHARGES, ADDITIONAL FSI AND OTHER EXPENDITURE RELATED TO THE PROJECT. THE SAID DEVELOPMENT CHARGES WE RE INTRIN SICALLY RELATED TO THE PROJECT LAND. THE BENEFIT ON ACCOUNT OF ADDITIONAL FSI WOULD ACCRUE TO THE LANDOWNERS ALSO. THUS, THE LAND OWNERS HAVE TRANSFERRED THE BUNDLE OF RIGHTS FOR CONSTRUCTING THE RESIDENTIAL CUM COMMERCIAL PROJECT INCLUDING ADDITIONAL FS I, WHICH IS NOTHING BUT COST OF IMPROVEMENT. ONCE IT IS AGREED THAT THE ADDITIONAL FSI AND DEVELOPMENT CHARGES ARE IN THE NATURE OF IMPROVEMENT, THE SAME REQUIRED TO BE ALLOWED AS DEDUCTION. IT IS NOT THE CASE OF THE DEPARTMENT THAT BOTH LAND OWNERS 9 ITA NO. 417/VIZ/2019, CO NO.04/VIZ/2020 ITA NO.423/VIZ/2019 AND 424/VIZ/2019 A.Y.20 13 - 14 & 2014 - 15 GANTA SRINIVASA RAO , VISAKHAPATNAM AND THE PROMOTERS HAVE CLAIMED THE EXPENDITURE. THEREFORE, THE AO IS INCORRECT IN HOLDING THAT THE DEVELOPMENT CHARGES AND ADDITIONAL FSI CHARGES ARE NEITHER RELATED TO TRANSFER NOR COST OF IMPROVEMENT. WE ARE OF THE CONSIDERED VIEW THAT THE AMOUNT OF RS.16.7 2 CRORES, THE EXPENDITURE ON THE PROJECT ON ACCOUNT OF DEVELOPMENT AND ADDITIONAL FSI NEEDS TO BE CONSIDERED AS COST OF IMPROVEMENT AND THE ASSESSEE WOULD BE ENTITLED FOR DEDUCTION OF RS.5.18 CRORES OUT OF RS.16.72 CRORES AS OBSERVED BY THE LD.CIT(A). THU S THE DEDUCTION IS COVERED IN SECTION 48 OF THE ACT, HENCE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) AND THE SAME IS UPHELD. APPEAL OF THE REVENUE ON THIS GROUND IS DISMISSED. CO NO.04/VIZ/2020 6. THE ASSESSEE FILED CROSS OB JECTIONS, SUPPORTING THE ORDER OF THE LD.CIT(A) IN RESPECT OF COMPUTING THE CAPITAL GAINS BY ALLOWING THE RELATED EXPENDITURE, COST OF IMPROVEMENT OF THE ASSETS. SINCE THE APPEAL OF THE REVENUE IS DISMISSED, THE CROSS OBJECTIONS OF THE ASSESSEE BECOMES INFRUCTUOUS, HENCE DISMISSED. IN THE RESULT, APPEAL OF THE REVENUE AND CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED AND THE CROSS APPEAL OF THE ASSESSEE IS ALLOWED. 10 ITA NO. 417/VIZ/2019, CO NO.04/VIZ/2020 ITA NO.423/VIZ/2019 AND 424/VIZ/2019 A.Y.20 13 - 14 & 2014 - 15 GANTA SRINIVASA RAO , VISAKHAPATNAM I.T.A.NO.423/VIZ/2019, A.Y.2013 - 14 7 . THE ASSESSEE FILED THIS CROSS APPEAL AGITATING THE ADDITION OF RS.3,50,000/ - CONFIRMED BY THE LD.CIT(A) RELATING TO BANK DEPOSITS. THE ASSESSEE HAS MADE THE CASH DEPOSIT OF RS.3,50,000/ - ON 23.04.2012 AND EXPLAINED THE SOURCE AS SELF WITHDRAWALS MADE FROM 05.04.2011 TO 12.01.201 2 ON VARIOUS DATES. THE AO DID NOT BELIEVE THE SOURCE AS WITHDRAWALS SINCE, THE ASSESSEE HAS MADE WITHDRAWALS SUBSEQUENTLY AND VIEWED THAT IF THE ASSESSEE IS HOLDING THE CASH O N HAND, THERE IS NO REQUIREMENT FOR SUBSEQUENT WITHDRAWAL AND RELIED ON THE DE CISION OF ITAT HYDERABAD BENCH IN THE CASE OF MIR BASHEERUDDIN ALI KHAN VS. ITO, WARD - 6(3), HYDERABAD. REPORTED IN [2014] 42 TAXMANN.COM 69 AND MADE THE ADDITION U/S 69 OF THE A CT. 8 . AGAINST WHICH THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE AO. AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 9 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. THE ASSESSEE HAS FURNISHED THE DETAILS OF WITHDRAWALS MADE FROM THE B ANK AND THE DEPARTMENT DID NOT MAKE OUT A CASE THAT THE ASSESSEE HAS SPENT THE ABOVE AMOUNTS FOR PERSONAL PURPOSES OR OTHERWISE MADE THE 11 ITA NO. 417/VIZ/2019, CO NO.04/VIZ/2020 ITA NO.423/VIZ/2019 AND 424/VIZ/2019 A.Y.20 13 - 14 & 2014 - 15 GANTA SRINIVASA RAO , VISAKHAPATNAM INVESTMENTS. THE AR RELIED ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF MANDAVA RAVI KUMAR IN ITA NO.184/VIZ/2015 D ATED 25.07.2018, WHEREIN, ON SIMILAR FACTS, THIS TRIBUNAL HAS ALLOWED THE APPEAL OF THE ASSESSEE RELATING TO CASH DEPOSITS MADE IN THE BANK. MERELY BECAUSE, THE ASSESSEE HAS WITHDRAWN THE AMOUNTS SUBSEQUENTLY, THE AO CANNOT DISBELIEVE THE SOURCE OF CASH A ND IT IS A FACT THAT A SUM OF RS.3,50,000/ - WITHDRAWN BY THE ASSESSEE AND IS AVAILABLE TO MAKE USE OF THE SAME. THE CASE LAW OF MIR BASHEERUDDIN ALI KHAN VS. ITO, WARD - 6(3), HYDERABAD REPORTED IN [2014] 42 TAXMANN.COM 69 (HYDERABAD - TRIB), THE C ASH DE POSITS OF RS.6,50,000/ - WERE MADE ON 08.09.2014 WAS STATED TO BE OUT OF PERIODICAL WITHDRAWALS MADE BY THE ASSESSEE FROM FEBRUARY 2002 TO SEPTEMBER, 2003. THUS, THERE WAS TIME GAP OF MORE THAN ONE YEAR AND THE CASH WAS NOT WITHDRAWN AT ONE GO. IN THE INST ANT CASE THE ASSESSEE HAD WITHDRAWN THE AMOUNTS IN THE IMMEDIATELY PRECEDING YEAR ON SIX OCCASIONS. THUS THE FACTS OF THE CASE LAW RELIED UP ON BY THE AO IS DISTINGUISHABLE AND HAS NO APPLICATION TO THE INSTANT CASE , T HEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEES CASE IS SQUARELY COVERED BY THE DECISION OF THIS TRIBUNAL IN MANDAVA RAVI KUMAR ( SUPRA ) AND ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD.CIT(A) AND DELETE THE ADDITION MADE BY THE AO. THE APPEAL OF THE ASSESSEE IS ALLOWED. 12 ITA NO. 417/VIZ/2019, CO NO.04/VIZ/2020 ITA NO.423/VIZ/2019 AND 424/VIZ/2019 A.Y.20 13 - 14 & 2014 - 15 GANTA SRINIVASA RAO , VISAKHAPATNAM I.T.A. 424/VIZ/2 019, A.Y.2014 - 15 10. FOR THE A.Y.2014 - 15 AO FOUND THAT THE ASSESSEE MADE CASH DEPOSIT OF RS.25,00,000/ - IN STATE BANK OF HYDERABAD ACCOUNT ON 18.07.2013 AND 19.07.2013 AMOUNTING TO RS.10,00,000/ - AND RS.15,00,000/ - RESPECTIVELY. THE SOURCE OF THE CASH WAS EXPLAINED TO BE WITHDRAWALS MADE FROM THE BANK ACCOUNT ON 13.10.2012. THE AO DID NOT ACCEPT THE SOURCE OF THE CASH, SINCE THE ASSESSEE HAD WITHDRAWN SOME SMALL AMOUNTS SUBSEQUENT TO THE WITHDRAWAL OF CASH OF RS.25,00,000/ - . HENCE THE AO VIEWED THAT TH E ASSESSEES EXPLANATION IS NOT SATISFACTORY, ACCORDINGLY, TREATED THE CASH DEPOSIT AS UNEXPLAINED AND MADE ADDITION U/S 69 OF THE INCOME TAX ACT. 11. AGAINST WHICH THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) CONCURRED WITH THE VIEW O F THE AO, STATING THAT THE PROBABILITY OF KEEPING THE WITHDRAWN CASH FOR LONG TIME IS NOT CONVINCING IN THE LIGHT OF WITHDRAWALS MADE BY THE ASSESSEE SUBSEQUENTLY. HENCE CONFIRMED THE ADDITION AND DISMISSED THE APPEAL OF THE ASSESSEE. 12. WE HAVE HEARD B OTH THE PARTIES, PERUSED THE MATERIAL PLACED ON RECORD. THE ASSESSEE HAD WITHDRAWN THE CASH OF RS.25,00,000/ - ON 13.10.2012 AND THERE IS NO DISPUTE ON WITHDRAWAL OF CASH. THE AO DID NOT GIVE ANY FINDING WITH REGARD TO USAGE OF THE WITHDRAWN MONEY. THERE WAS 13 ITA NO. 417/VIZ/2019, CO NO.04/VIZ/2020 ITA NO.423/VIZ/2019 AND 424/VIZ/2019 A.Y.20 13 - 14 & 2014 - 15 GANTA SRINIVASA RAO , VISAKHAPATNAM NO EVIDENCE HAVING MADE THE INVESTMENTS OR INCURRED ANY OTHER EXPENSES BY THE ASSESSEE. THE AO RELIED ON THE DECISION OF MIR BASHEERUDDIN ALI KHAN VS. ITO, WARD - 6(3), HYDERABAD REPORTED IN [2014] 42 TAXMANN.COM 69 (HYDERABAD - TRIB), WHERE IN, ITAT CONF IRMED THE ADDITION. IN THE CITED CASE , C ASH DEPOSIT OF RS.6,50,000/ - MADE ON 08.09.2014 WAS STATED TO BE OUT OF PERIODICAL WITHDRAWALS MADE BY THE ASSESSEE FROM FEBRUARY 2002 TO SEPTEMBER, 2003 AND THERE WAS TIME GAP OF MORE THAN ONE YEAR AND THE CASH WAS NOT WITHDRAWN AT ONE GO. IN THE INSTANT CASE, THE ASSESSEE HAS WITHDRAWN THE MONEY AT ONE GO ON 13 . 10 . 2012 , WHICH WAS LATER DEPOSITED. THUS, KEEPING IN VIEW THE EXPLANATION OF THE LD.AR THAT THE ASSESSEE KEP T THE CASH FOR SOME TIME TO MEET THE UNFORESEE N EXPENSES APPEARS TO BE SATISFACTORY AND THE FACTS OF THE CASE RELIED UPON BY THE AO IS DISTINGUISHABLE. THIS TRIBUNAL IN THE CASE OF MANDAVA RAVI KUMAR SUPRA ON SIMILAR FACTS ACCEPTED THE SOURCE OF EARLIER WITHDRAWALS FOR DEPOSITS MADE IN THE BANK ACCOU NT. THEREFORE, RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THE TRIBUNAL, WE HOLD THAT THE EXPLANATION OF THE ASSESSEE THAT THE DEPOSITS WERE MADE OUT OF EARLIER WITHDRAWALS IS ACCEPTABLE. ACCORDINGLY, WE DELETE THE ADDITION MADE BY THE AO AND ALLOW THE APPEA L OF THE ASSESSEE. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. 14 ITA NO. 417/VIZ/2019, CO NO.04/VIZ/2020 ITA NO.423/VIZ/2019 AND 424/VIZ/2019 A.Y.20 13 - 14 & 2014 - 15 GANTA SRINIVASA RAO , VISAKHAPATNAM 13. IN THE RESULT, APPEAL OF THE REVENUE AND CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED AND THE APPEALS OF THE ASSESSEE FOR THE A.Y.2013 - 14 AND 2014 - 15 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH SEPTEMBER, 2021. SD/ - SD/ - ( ) ( . . ) (N.K.CHOUDHRY) (D.S.SUNDER SINGH) / JUDICIAL MEMBER / ACCOUNTANT MEMBER DATED : 17 .0 9 .2021 L.RAMA, SPS / COPY OF THE ORDER FORWARDED TO : - 1 . / THE REVENUE - ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 3(1) VISAKHAPATNAM 2 . / THE ASSESSEE - SHRI GANTA SRINIVASA RAO, D.NO.1 - 84 - 16/1/1, PLOT NO.231/4, MVP COLONY, VISAKHAPATNAM 3. THE PR.COMMISSIONER OF INCOME TAX - 1 , VISAKHAPATNAM 4. THE COMMISSIONER OF INCOME TAX (APPEALS) - 1 , VISAKHAPATNAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM