Smt Narendruni Roopa, Nalgonda District V. ITO, Suryapet

CO 41/HYD/2009

• Counselvise Citation: [2010] 122 COUNSELVISE.COM (IT) 4928 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 16 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 30-06-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y N BHANU NARAYANA RAO
• Assessee Lawyers: K V N CHARYA
• Keywords: Unexplained cash credit; Business income; Peak credit
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI AKBER BASHA, ACCOUNTANT MEMBER ITA NO.434/H/2009 A.Y. 2005-06 THE INCOME TAX OFFICER, SURYAPET (APPELLANT) VS SMT. NARENDRUNI ROOPA, SURYAPET (PAN ACFPN 9470 L (RESPONDENT) CO.NO.41/H/2009 A.Y. 2005-06 SMT. NARENDRUNI ROOPA, SURYAPET(PAN ACFPN 9470 L) (APPELLANT) VS THE INCOME TAX OFFICER, SURYAPET (RESPONDENT) APPELLANT BY : SHRI K.V.N. CHARYA, DR RESPONDENT BY : SHRI Y.N. BHANU NARAYANA RAO O R D E R PER: N.R.S. GANESAN, JUDICIAL MEMBER THE REVENUE FILED THE APPEAL AGAINST THE ORDER PASSED BY THE CIT(A)-III, HYDERABAD DATED 19.1.2009 AND PERTAINS TO THE ASSESSMENT YEAR 2005-06. THE ASSESSEE HAS FILED CROSS OBJECTION. THE REFORE, WE HEARD BOTH THE APPEALS OF THE REVENUE AND THE CROSS OB JECTION OF THE ASSESSEE TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON O RDER. 2. LET US FIRST TAKE THE REVENUE APPEAL IN ITA NO.43 4/HYD/2009. SHRI K.V.N. CHARYA, THE LEARNED DEPARTMENTAL REPRESE NTATIVE SUBMITTED THAT THERE WAS A SURVEY IN THE PREMISES OF THE ASSESSEE. DURING THE COURSE OF SURVEY OPERATION, THE REVENUE AUTHORITIES FOU ND CERTAIN INCRIMINATING MATERIALS AGAINST THE ASSESSEE. THE ASSESSEE A LSO DEPOSITED TO THE EXTENT OF RS.20,95,028/- IN M/S SUDHA COOPERATIVE ITA NO.434/H/2009 & CO.41/H/2009 SMT. NARENDRUNI ROOPA, HYDERABAD 2 2 URBAN BANK LTD., SURYAPET. AS PER THE INFORMATION R ECEIVED BY THE DEPARTMENT, THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE O F DEPOSIT FOR SUCH FUNDS. ACCORDING TO THE LEARNED REPRESENTATIVE IN THE ABSENCE OF PROPER EXPLANATION, THE ASSESSING OFFICER TREATED THE ENTIRE AMOUNT OF RS.20,95,028/- AS UNEXPLAINED CASH CREDIT. HOWEVER, ON A PPEAL BY THE ASSESSEE, THE CIT(A) FOUND THAT THE AMOUNT DEPOSITED IN THE BANK ACCOUNT ARE RELATED TO THE PROPRIETARY BUSINESS OF THE A SSESSEE. THE CIT(A) FOUND THAT IN THE ABSENCE OF PROPER EXPLANATIO N, THE AMOUNT DEPOSITED IN THE BANK HAS TO BE TREATED AS INCOME OF TH E ASSESSEE U/S 69 OF THE INCOME TAX ACT. HOWEVER, BY ACCEPTING ALTERNA TIVE SUBMISSION OF THE ASSESSEE WITH THE CIT(A) ONLY THE PEAK CR EDIT HAS TO BE CONSIDERED FOR TAXATION. THE LEARNED REPRESENTATIV E SUBMITTED THAT HE IS PLACING RELIANCE ON THE OBSERVATION OF THE ASSESSIN G OFFICER. IN THE ABSENCE OF ANY EXPLANATION AND MATERIAL, THE ENTIRE CR EDIT HAS TO BE TREATED AS UNEXPLAINED CASH CREDIT. 3. ON THE CONTRARY, SHRI Y.V. BHANU NARAYANA RAO, T HE LEARNED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A PARTNER IN M/S ROOPA PLASTIC INDUSTRIES, NEW ROOPA PLASTIC INDUSTRI ES. THE ASSESSEE IS ALSO A PROPRIETRESS OF M/S ROOPA PVC PRODUCTS. ACCORDING TO THE LEARNED REPRESENTATIVE, THE BUSINESS RECEIPTS WERE DEPOSITED WITH M/S SUDHA COOPERATIVE URBAN BANK LTD. HE SUBMITTED TH AT THE BANK ACCOUNT WAS OPENED IN JOINT NAMES OF THE ASSESSEE AND HER H USBAND. THE LEARNED REPRESENTATIVE FURTHER SUBMITTED THAT TH E WITHDRAWALS WERE MADE THROUGH HER SON AND EMPLOYEES. ALL THE DEPOSITS AND WITHDRAWALS ARE ONLY FOR BUSINESS PURPOSES. THEREFORE THE ADDITIONS MADE BY THE LOWER AUTHORITIES ARE NOT JUSTIFIED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT DISPUTED THAT THE ITA NO.434/H/2009 & CO.41/H/2009 SMT. NARENDRUNI ROOPA, HYDERABAD 3 3 ASSESSEE HAS MADE CASH DEPOSITS TO THE EXTENT OF RS.20,95,028 /- WITH M/S SUDHA COOPERATIVE URBAN BANK LTD. FROM THE ORDE R OF THE LOWER AUTHORITIES IT APPEARS THAT ON THE BASIS OF THE ANNUAL INFORMATION REPORT RECEIVED FROM THE BANK, THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE FOR MAKING SUCH DEPOSITS. THE ASSESSEE EXPLAINED BEFORE TH E ASSESSING OFFICER THAT THE BUSINESS RECEIPTS OF M/S ROOPA PVC PROD UCTS WAS DEPOSITED. THE LOWER AUTHORITIES FOUND THAT M/S ROOPA PVC PRODUCTS IS A PROPRIETARY CONCERN OF THE ASSESSEE. HOWEVER, THE BANK ACCOUNT STANDS IN THE NAME OF THE ASSESSEE AND HER HUSBAND. THER EFORE, AS RIGHTLY OBSERVED BY THE ASSESSING OFFICER IT MAY NOT BE CORRECT TO SAY THAT THE BUSINESS RECEIPTS WERE DEPOSITED IN THE JOINT N AMES OF THE ASSESSEE AND HER HUSBAND. MOREOVER, DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, THE TOTAL TURNOVER OF THE PROPRI ETARY CONCERN WAS RS.4,69,407/-. HOWEVER, THE DEPOSIT WAS MADE TO THE EXTENT OF RS.20,95,028/-. WHEN THE TURNOVER ITSELF WAS RS.4,69, 407/-, THE ASSESSEE COULD NOT HAVE RECEIVED RS.20,95,028/- IN THE TRA NSACTION. THEREFORE THE EXPLANATION OF THE ASSESSEE THAT THE ENT IRE AMOUNT WAS RECEIVED IN THE COURSE OF BUSINESS ACTIVITY CANNOT BE ACCEPTE D. IN THE ABSENCE OF ANY ACCEPTABLE EXPLANATION, IN OUR OPINION, THE SAID AMOUNT HAS TO BE TREATED AS UNEXPLAINED CASH CREDIT. HOWEVER, A S FOUND BY THE CIT(A), IT IS APPROPRIATE TO TAKE THE PEAK CREDIT FOU ND IN THE BANK ACCOUNT. ACCORDINGLY, THE CIT(A) HAS RIGHTLY DIRECTED T HE ASSESSING OFFICER TO TAKE THE PEAK CREDIT AFTER EXCLUDING THE PA YMENT MADE BY CHEQUE OR CASH TO THE PERSON OTHER THAN THE ASSESSEE. THER EFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AU THORITIES. 5. NOW COMING TO THE CROSS OBJECTION FILED BY THE ASSESSEE , THE ONLY CONTENTION OF THE ASSESSEE IS THAT THE BANK ACCOUNT WAS OPER ATED THROUGH HER SON AND EMPLOYEES. THE LEARNED REPRESENTA TIVE SUBMITTED THAT THE WITHDRAWALS WERE MADE BY WAY OF SELF DRAWING CHEQUES THROUGH ITA NO.434/H/2009 & CO.41/H/2009 SMT. NARENDRUNI ROOPA, HYDERABAD 4 4 HER SON AND EMPLOYEES OF THE PARTNERSHIP FIRM. WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE LEARNED REPRESENTATIVE OF THE A SSESSEE. WHEN THE TOTAL TURNOVER OF THE PROPRIETARY CONCERN IS ONLY RS.4, 69,407/-, THE ASSESSEE COULD NOT HAVE RECEIVED RS.20,95,028/- FROM THE B USINESS RECEIPTS. THEREFORE, IN THE ABSENCE OF ANY PROPER EXPL ANATION, THE PEAK CREDIT HAS TO BE TAKEN INTO CONSIDERATION FOR THE PURPO SE OF TAXATION. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE LOWER AUTHORITIES. 6. IN THE RESULT, THE FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT :16.7.2010 SD/- SD/- AKBER BASHA N.R.S. GANESAN ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 16 TH JULY, 2010 COPY FORWARDED TO: 1. SMT. ROOPA N., PROP. ROOPA PVC PRODUCTS, PILLALAMA RRY (V), SURYAPET 2. ITO, KRISHNA NAGAR COLONY, OPP. HI TECH BUS STAND, SURYAPET. 3. CIT(A)-III HYDERABAD. 4. CIT, HYDERABAD 5. THE D.R., ITAT, HYDERABAD. NP