ITO, Ward-2, Warangal V. Sri Thula Vijay Kumar (HUF), Hanamkonda

CO 41/HYD/2013

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2638 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 4 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-12-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 04-07-2016
• Assessment Year: misc
• Appeal Filed On: 12-09-2013
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1034/HYD/2013 ASSESSMENT YEAR: 2009-10 THE INCOME TAX OFFICER, WARD-2, WARANGAL VS SRI THULA VIJAY KUMAR (HUF), HANAMKONDA, WARANGAL (DT.) [PAN: AABHT8176P] (APPELLANT) (RESPONDENT) C.O. NO. 41/HYD/2013 (IN ITA NO.1034/HYD/2013) ASSESSMENT YEAR: 2009-10 SRI THULA VIJAY KUMAR (HUF), HANAMKONDA, WARANGAL (DT.) [PAN: AABHT8176P] VS THE INCOME TAX OFFICER, WARD-2, WARANGAL (CROSS-OBJECTOR) (RESPONDENT) FOR REVENUE : SHRI K. J. RAO, DR FOR ASSESSEE : SHRI A.V. RAGHU RAM, AR DATE OF HEARING : 29-11-2016 DATE OF PRONOUNCEMENT : 16-12-2016 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS APPEAL IS BY REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VI, HYDERABAD DATED I.T.A. NO. 1034/HYD/2013 C.O.NO. 41/HYD/2013 :- 2 -: 20-03-2013 ON THE DELETION OF RS.54,87,917 OUT OF CASH CREDITS BROUGHT TO TAX AND CROSS-OBJECTION IS BY ASSESSEE ON TH E AMOUNT OF CONFIRMATION MADE BY THE CIT(A) IN THE ORDER TO AN EXT ENT OF RS. 13,80,628/-. 2. BRIEFLY STATED, ASSESSEE IS IN THE BUSINESS OF BAR AND RESTAURANT, RUNNING IN THE NAME OF M/S. GIRIJA RESTAURA NT AND BAR AS A PROPRIETOR IN HUF CAPACITY. FOR THE ASSESS MENT YEAR UNDER CONSIDERATION, HE FILED RETURN OF INCOME OF RS. 3,87,868/-. ASSESSEE HAS FILED VARIOUS STATEMENTS INCLUDING AUDIT R EPORT ALONG WITH RETURN OF INCOME, WHEREIN THE TRANSACTIONS WITH RE FERENCE TO THE BANK ACCOUNT IN VIJAYA BANK HAVE NOT BEEN MENTIONED . ALL THE DDS PURCHASED FOR THE PURPOSE OF PURCHASE OF LIQUOR ETC., WERE SHOWN TO HAVE BEEN CASH PURCHASES IN THE CASH BOOK. ASSESSING OFFICER (AO) HOWEVER, CAME TO KNOW THAT ASSESSEE HAS M AINTAINED AN ACCOUNT WITH VIJAYA BANK AND MONEYS WERE DEPOSITED IN THAT ACCOUNT AND BANKERS CHEQUES/DDS IN FAVOUR OF AP BEVE RAGES CORPORATION LTD., (APBCL) WERE TAKEN FROM THAT ACCOUNT. ON EXAMINATION OF CASH BOOK AND BANK ACCOUNT, AO OPINED THAT THE DEPOSITS INTO THE BANK ACCOUNT DID NOT EMANATE FROM THE CASH BOOK AND AS THE SOURCES WERE NOT EXPLAINED, HE BROUGH T TO TAX THE TOTAL CREDITS IN THE SAID BANK ACCOUNT TO AN EXTENT OF R S. 94,57,444/-. 3. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE TH E CIT(A) AND FURNISHED VARIOUS STATEMENTS AND EVIDENCES WITH REFERE NCE TO THE USE OF VIJAYA BANK ACCOUNT, BUSINESS IN INDIVIDUAL CAPACITY AND SOURCES FOR DEPOSITS IN THE BANK ACCOUNT INCLUDING TR ANSACTIONS OF HIS RELATIVES WHO ARE ALSO IN THE WINE BUSINESS WHO UTILISED I.T.A. NO. 1034/HYD/2013 C.O.NO. 41/HYD/2013 :- 3 -: ASSESSEES ACCOUNT FOR PURCHASE OF DDS IN FAVOUR OF APBCL AND EXPLAINING THE SOURCES THEREIN. ASSESSEES SUBMISSION S OF TOTAL DEPOSITS ARE AS UNDER: S.NO. AMOUNT RS. 1. CASH DEPOSITED BY ASSESSEE FOR PURCHASE OF DDS 58,73,899 2. CASH DEPOSITED BY SIX PERSONS FOR PURCHASE OF DDS OF APBCL 22,02,917 3. CASH DEPOSITED OUT OF SELF-WITHDRAWALS FROM OD A/C 13,80,628 TOTAL: 94,57,444 4. IN THE LIGHT OF THE SUBMISSIONS BY ASSESSEE ALONG W ITH REVISED BOOKS/STATEMENTS, THE MATTER WAS REFERRED TO THE AO AND A FTER GETTING THE REMAND REPORT AND TAKING OBJECTIONS FROM ASSE SSEE, THE LD. CIT(A) GAVE RELIEF TO ASSESSEE SUBSTANTIALLY AND CONFIRMED ONLY AN AMOUNT OF RS. 13,80,628/- IN THE ORDER. HE HAS G IVEN FINDINGS ON SOME AMOUNTS AS UNDER: I) THE AO IN HER REMAND REPORT HAD ACCEPTED THE DE POSITS OF RS. 58,87,917/- AND RS. 22,02,917/- AS EXPLAINED AND ; II) SINCE THE OD ACCOUNT IS HELD IN SEPARATE STATUS (INDIVIDUAL) AND NOT RELATED TO ASSESSEE, AND EVEN OTHERWISE ALSO TH E DETAILS OF CASH DEPOSIT OF RS.16,66,610/- WAS ALSO EXPLAINED AS ABO VE. 5. FURTHER AFTER ANALYSING THE REPORTS OF THE AO AND AS SESSEE, LD. CIT(A) GAVE RELIEF FROM THE ADDITION MADE AND CON FIRMED AN AMOUNT OF RS. 13,80,628/- AS UNDER: 5.9 PERUSED THE SUBMISSIONS OF THE APPELLANT BOTH AT THE STAGE OF THE ASSESSMENT, REMAND AND APPELLATE PROCEEDINGS AL ONG WITH THE OBSERVATIONS OF THE ASSESSING OFFICER IN ASSESSMENT ORDER AND THE REMAND REPORT. AS COULD BE SEEN FROM THE FACTS OF THE CASE , THE APPELLANT ENGAGED I.T.A. NO. 1034/HYD/2013 C.O.NO. 41/HYD/2013 :- 4 -: IN THE BUSINESS OF RUNNING RESTAURANT IN THE STATUS OF HUF, SHOWN TO HAVE FILED THE RETURNS OF INCOME IN INDIVIDUAL STATUS AS WELL AND MAINTAINED AN OD/MORTGAGE ACCOUNT WHOSE TRANSACTIONS ARE CLUBBED WITH HUF BUSINESS, RESULTING IN THE SITUATION THAT HAS RESUL TED THE ADDITIONS IN THE ASSESSMENT ORDER. IN ADDITION, THE BANK ACCOUNT OF THE APPELLANT WERE USED BY THIRD PARTIES FOR TAKING THE DDS IN FAVOUR OF THE APBCL, WHICH ARE LATER SUBMITTED TO BE THE AMOUNTS NOT RELATED TO HI S BUSINESS. THIS HAS RESULTED IN RECASTING THE BOOKS AND RE-EXAMINATION BY THE ASSESSING OFFICER AND SUBMISSION OF THE REMAND REPORT. AS PER THE ASSESSING OFFICER, THE TOTAL OF THE TRANSACTIONS WERE PUT AT RS. 1,13, 61,816/-, WHICH ARE NOTHING BUT THE OUTFLOW OF THE AMOUNTS FROM THE OD ACCOUNT MAINTAINED IN INDIVIDUAL STATUS, WHICH OF COURSE WAS SHOWN TO HAV E MERGED WITH THE ACCOUNTS OF BUSINESS CARRIED IN HUF STATUS. INSTEAD OF VERIFYING THE SOURCES FOR THE UNEXPLAINED CREDITS OF RS. 94,57,44 4/-, WHICH WERE ADDED BY THE ASSESSING OFFICER, THE OUTFLOW WAS TAKEN AS BASIS BY THE ASSESSING OFFICER. THE INDICATIONS ARE THAT THE TOTAL CREDITS OF RS. 94,57,444 ARE SHOWN TO HAVE BEEN EXPLAINED BY THE CREDITS OF RS. 58,73,899/-, REPRESENTING THE DEPOSITS MADE FOR PURCHASE OF DDS FROM THE ASSESSEE'S BUSINESS AND RS. 22,02,917/- REPRESENTED THE DEPOSI TS MADE BY THE SIX PERSONS FOR PURCHASE OF DDS FOR THEIR BUSINESS, THE REBY LEAVING A BALANCE OF RS. 13,80,628/- TO BE EXPLAINED. AS PER THE APPE LLANT, THE SAID AMOUNT IS SHOWN TO HAVE DEPOSITED OUT OF THE CASH WITHDRAW AL OF RS. 32,50,000/- MADE EARLIER FROM THE SAME ACCOUNT. THUS, ALL THE C REDITS TO THE EXTENT OF RS. 94,57,444/- STAND EXPLAINED AND ENTIRE AMOUNTS OF ADDITION REQUIRED TO BE DELETED, AS PER THE APPELLANT. 5.10 IN THIS REGARD IT IS TO BE OBSERVED THAT THE B ANK ACCOUNT THAT IS TAKEN AS BASIS IS THE OD ACCOUNT, AND AT THE END OF THE PERIOD, THE AMOUNTS OVERDRAWN WAS PUT AT RS. 18,22,603/- FOR WH ICH THE INTEREST AND BANKING CHARGES TO THE EXTENT OF RS. 1,23,899/- SHO WN TO HAVE BEEN CHARGED. THE OD ACCOUNT DOES NOT EXPLAIN THE CASH W ITHDRAWALS WHERE THE OVER DRAFT FACILITIES ARE ALLOWED AND THE CASH WITHDRAWALS ALMOST MEANT FOR THE SPECIFIC PURPOSE, WHICH FURTHER DENOT E THAT SUCH CASH WITHDRAWN, MAY NOT FIND ITS REENTRY INTO THE SAME B ANK ACCOUNT. FURTHER, THE PATTERN OF CASH WITHDRAWAL DO NOT EXPLAIN THE C ASH REDEPOSITS. UNDER THE CIRCUMSTANCES, I AM OF THE CONSIDERED OPINION T HAT THE SOURCES FOR THE CREDITS OF RS. 13,80,628/-REMAINED TO BE EXPLAINED REASONABLY AND AS SUCH DESERVE TO BE TREATED AS UNEXPLAINED CREDITS. THUS, THE ADDITION ON ACCOUNT OF UNEXPLAINED CREDIT STAND CONFIRMED AT RS . 13,80,628/- AS AGAINST THE TOTAL ADDITION OF RS. 94,57,444/-, MADE IN THE ASSESSMENT ORDER. THE ARGUMENT OF THE APPELLANT THAT THE CREDI TS ARE IN INDIVIDUAL STATUS, AS AGAINST THE ASSESSMENT MADE IN HUF, MAY NOT HOLD GOOD, WHERE THE REVISED ACCOUNTS WERE FURNISHED, BY APPEL LANT BY INCORPORATING BOTH THE STATUES, TO EXPLAIN THE TRANSACTIONS UNDER REFERENCE. ACCORDINGLY, THIS GROUND OF APPEAL IS TREATED AS PARTLY ALLOWED . I.T.A. NO. 1034/HYD/2013 C.O.NO. 41/HYD/2013 :- 5 -: 6. LD. DR AND LD. COUNSEL REITERATED THE RESPECTIVE S TANDS. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSI NG THE DETAILED ORDER OF THE LD. CIT(A), WE DO NOT FIND ANY R EASON TO INTERFERE WITH THE SAID ORDER. AS FAR AS THE RELIEF G IVEN BY THE CIT(A) IS CONCERNED, THE AO IN THE REMAND REPORT ITSELF HAS A CCEPTED THAT THE DEPOSITS OF RS. 54,87,917/- ARE EXPLAINED. LD. D R FAIRLY ADMITTED THAT THESE AMOUNTS WERE ACCEPTED BY THE AO BUT RE VENUE PREFERRED THE APPEAL ON AN AMOUNT OF 54,87,917, WHERE AS THE APPEAL SHOULD HAVE BEEN PREFERRED ON THE AMOUNT OF RS . 22,02,917/- PERTAINING TO THE THIRD PARTIES WHICH WAS NOT CONTESTED. THEREFORE, WE DO NOT FIND ANY MERIT IN REV ENUES GROUNDS RAISED ON THE DELETION OF THE AMOUNT OF RS. 54 ,87,917/-, CONTESTED IN THE GROUND. 8. COMING TO ASSESSEES CROSS-OBJECTION, IT WAS THE CO NTENTION OF LD. COUNSEL THAT RE-DEPOSITS ARE OUT OF THE WITHDRAWAL S MADE EARLIER. THIS EXPLANATION OF ASSESSEE IS NOT SUPPORT ED BY ANY DOCUMENTS PLACED BEFORE US. NO CASH FLOW STATEMENT WAS ALSO FURNISHED BEFORE US. THERE MAY BE WITHDRAWALS FROM THE BANK ACCOUNTS BUT AS RIGHTLY POINTED OUT BY THE AO, THE ACCO UNT ITSELF PERTAINING TO INDIVIDUAL STATUS WHICH WAS USED NOT ONL Y BY ASSESSEE BUT ALSO BY OTHERS FOR VARIOUS TRANSACTIONS. I N THE ABSENCE OF ANY ONE TO ONE RELATIONSHIP WITH THE WITHDRA WALS AND DEPOSITS, WE ARE UNABLE TO ACCEPT ASSESSEES CONTENTION, WHICH IS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. AS LD. CIT (A) HAS EXAMINED IN DETAIL ALL THE TRANSACTIONS INCLUDING THE R EVISED SET OF BOOKS OF ACCOUNT FURNISHED BEFORE HIM, WE DO NOT S EE ANY REASON I.T.A. NO. 1034/HYD/2013 C.O.NO. 41/HYD/2013 :- 6 -: TO INTERFERE WITH THE WELL-REASONED ORDER OF LD.CIT(A) . ACCORDINGLY, THE CROSS-OBJECTION IS REJECTED. 9. IN THE RESULT, BOTH APPEAL OF REVENUES AND CROSS-O BJECTION OF ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH DECEMBER, 2016 SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEM BER HYDERABAD, DATED 16 TH DECEMBER, 2016 TNMM COPY TO : 1. THE INCOME TAX OFFICER, WARD-2, WARANGAL. 2. SRI THULA VIJAY KUMAR, HANAMKONDA, WARANGAL (DT. ) C/O. SRI K. VASANT KUMAR, A.V. RAGHU RAM & P. VINOD , ADVOCATES, 610, BABUKHAN ESTATES, BASHEER BAGH, HYDERABAD. 3. CIT (APPEALS)-VI, HYDERABAD. 4. THE CIT-VI, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.