ITO, Ward-12(5), Hyd, Hyderabad V. Guthula Nagamani, Hyd, Hyderabad

CO 77/HYD/2015

• Counselvise Citation: [2016] 112 COUNSELVISE.COM (IT) 4125 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-06-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 22-06-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 08-12-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Assessee Lawyers: K VIJAYALAKSHMI
• Keywords: Salary income; Onus to prove; Revised return

Judgement Text

ITA NO 1281 OF 2015 GUTHULA NAGAMANY HYDERABAD PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER & SHRI PARTHA SARATHI CHAUDHURI, JUDICIAL MEMBER ITA NO.1281/HYD/2015 (ASSESSMENT YEAR: 2011-12) AND C.O. NO.77/HYD/2015 (ARISING OUT OF ITA NO.1281/HYD/2015) (A.Y. 2011-12) INCOME TAX OFFICER WARD 12(5) HYDERABAD VS. SMT. GUTHULA NAGAMANY HYDERABAD PAN: AMBPG 7084 R (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI M. SITARAM, DR FOR ASSESSEE : SHRI K. VIJAYA LAKSHM I DATE OF HEARING : 22 .06.2016 DATE OF PRONOUNCEMENT : 29 .06.2016 O R D E R PER SHRI PARTHA SARATHI CHAUDHURI, J.M. THE APPEAL AND CROSS OBJECTION ARE FILED BY THE REV ENUE AND THE ASSESSEE RESPECTIVELY AGAINST THE ORDER OF THE LEARNED CIT (A)-1, DATED 31.08.2015 FOR THE RELEVANT A.Y 2011-1 2. THE GROUNDS RAISED BY THE REVENUE IS REPRODUCED BELOW: A) THE ORDER OF THE CIT (A) IS ERRONEOUS IN LAW AND ON FACTS OF THE CASE. B) THE LEARNED CIT (A) ERRED IN HOLDING THAT THE CASH DEPOSITS IN BANK A/C OF THE ASSESSEE RELATE TO ITA NO 1281 OF 2015 GUTHULA NAGAMANY HYDERABAD PAGE 2 OF 6 BUSINESS ACTIVITY OF ASSESSEES HUSBAND, SOLELY RELYING ON THE ASSESSEES DECLARATION AND THE LETTE R FILED BY THE ASSESSEES HUSBAND C) THE LEARNED CIT (A) ERRED IN HOLDING THAT THE AO HA S NOT BROUGHT ON RECORD ANY MATERIAL TO SHOW THAT THESE DEPOSITS ARE MADE BY THE ASSESSEE, WITHOUT CONSIDERING THE FACT THAT THE ONUS TO PROVE THE SOURCES FOR DEPOSITS MADE IN THE ASSESSEES BANK ACCOUNT LIES WITH THE ASSESSEE . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, I S AN INDIVIDUAL DERIVING INCOME FROM SALARY. SHE FILED H ER RETURN OF INCOME ON 28.07.2011 FOR THE A.Y 2011-12 ADMITTING AN INCOME OF RS.2,74,840. THE AO COMPLETED THE ASSESSMENT ON 8.3.2014 U/S 143 (3) OF THE ACT BY MAKING FOLLOWING ADDITION S: I) DISALLOWANCE OF HRA - RS. 49,328 II) UNEXPLAINED CASH DEPOSITS - RS.48,07,730 3. FIRST, WE TAKE UP THE GROUNDS OF APPEAL BY THE R EVENUE. GROUND NO.1 AND 4 ARE GENERAL IN NATURE, HENCE NEED NO ADJUDICATION. SO FAR AS THE GROUND NOS. 2 & 3 ARE C ONCERNED, THE MAIN ISSUE IS WHETHER THE CASH DEPOSITS IN THE BANK A/C OF THE ASSESSEE RELATES TO THE BUSINESS ACTIVITIES OF THE ASSESSEES HUSBAND OR BELONGS TO THE ASSESSEE HEREIN. AO NOTIC ED CASH DEPOSIT MADE INTO THE ASSESSEES BANK ACCOUNT AMOUN TING TO RS.48,07,730. ASSESSEE WAS ASKED TO EXPLAIN THE SOU RCES OF THE SAME. ASSESSEE EXPLAINED THAT THE BANK A/C WAS IN T HE JOINT NAME OF THE ASSESSEE AND HER HUSBAND SRI K. BASAVAI AH AND THAT HER HUSBAND WAS ENGAGED IN TRADING IN RICE AND THE ASSESSEE HAD NOTHING TO DO WITH THE BUSINESS. THE ASSESSEE EXPLA INED TO THE AO THAT THE CASH DEPOSITS IN THE BANK A/C REPRESENT ED SALE ITA NO 1281 OF 2015 GUTHULA NAGAMANY HYDERABAD PAGE 3 OF 6 PROCEEDS OF RICE, WHEREAS THE OUTGOINGS OR TRANSFER OF AMOUNTS THROUGH NEFT/RTGS REPRESENTED PAYMENTS TO THE FARME RS WHO SUPPLIED RICE TO HIM FOR SALE. THE ASSESSEE ALSO FU RNISHED EVIDENCE IN SUPPORT OF BUSINESS CARRIED OUT BY HER HUSBAND. FROM THE ENTRIES IN THE BANK A/C, THE AO IDENTIFIED ELECTRONIC TRANSFER OF MONEY TO THE A/C OF SRI VEERABHADRA RAO OF RAICHUR. WHEN QUESTIONED ABOUT THIS, THE LEARNED COUNSEL FOR THE ASSESSEE EXPLAINED THAT THE ASSESSEES HUSBAND PURC HASED RICE FROM HIM. THE ASSESSEE SUBMITTED TO THE AO THAT SRI VEERABHADRA RAO WAS A LANDLORD AND WAS NOT A BUSINE SSMAN. HE BEING ONLY A FARMER AND HE WAS NOT AN INCOME TAX AS SESSEE AND THAT HE EVEN DID NOT HAVE A PAN. BEING NOT CONVINC ED, THE AO ADDED THE ENTIRE DEPOSITS IN THE BANK A/C IN THE HA NDS OF THE ASSESSEE, AS INCOME FROM UNEXPLAINED SOURCES. 4. BEING AGGRIEVED, THE ASSESSEE PREFERRED APPEAL B EFORE THE CIT (A), WHO IN HIS ORDER OBSERVED THAT THE ASSESSE E AS STATED BEFORE THE AO AND ALSO DURING THE APPELLATE PROCEED INGS THAT THE CASH DEPOSIT OF RS.48,07,730 MADE IN THE JOINT A/C BELONGS TO HER HUSBAND SHRI K. BASAVAIAH. ASSESSEE FURTHER CON TENDED THAT THE AO ASKED FOR THE ACCOUNT COPY OF THE ASSESSEES HUSBAND AS APPEARED IN THE BOOK FOR VERIFICATION. BEFORE THE L EARNED CIT (A) ASSESSEE FURTHER SUBMITTED THAT HER HUSBAND IS A RE GULAR TAX PAYER. HIS INCOME IS COMING FROM TRADING OF RICE. A SSESSEES HUSBAND ALSO FILED A CONFIRMATION LETTER DATED 27.0 8.2015 STATING THAT THE ENTIRE CASH DEPOSIT OF RS.48,07,730 RELATE TO THE RICE BUSINESS AND THAT HIS WIFE HAS NO CONNECTION WITH T HE CASH DEPOSIT. THE LETTER OF MR. K. BASAVAIAH WAS REPRODU CED BY THE CIT (A) AS UNDER: ITA NO 1281 OF 2015 GUTHULA NAGAMANY HYDERABAD PAGE 4 OF 6 THIS IS WITH REFERENCE TO THE ABOVE SUBJECT, I WISH TO STATE THAT I MR. K. BASAVAIAH, HUSBAND OF G. NAGAMANY AGE D ABOUT 33 YEARS R/O HIG 136 & 137, REVATHI NILAYAM, 6 TH PHASE, KPHB COLONY, HYDERABAD 500072. I HEREBY STAT E THAT THE CASH DEPOSIT OF RS.48,07,730/- MADE DURING THE FINANCIAL YEAR 2010-11 INTO THE JOINT BANK A/C WITH MY WIFE SMT. G. NAGAMANI VIDE SBI A/C NO.30588257363 MAINTAINED WITH SBI KUKATAPALLY TEMPLE BRANCH ARE ENTIRELY RELATE TO MY RICE BUSINESS. MY WIFE G. NAG AMANI HAS NO CONNECTION WHATSOEVER WITH THESE CASH DEPOSI TS MADE INTO THE JOINT BANK A/C. 5. THE LEARNED CIT (A) IN HIS ORDER HELD THAT IN VI EW OF THE CATEGORICAL DECLARATION GIVEN BY THE ASSESSEES HUS BAND MR. K. BASAVAIAH, THE SOURCES HAVE TO BE EXAMINED IN HIS H ANDS. FURTHER, THE AO HAS NOT BROUGHT ON RECORD ANY MATER IAL TO SHOW THAT THESE DEPOSITS ARE MADE BY THE ASSESSEE. THERE FORE, THE AO WAS DIRECTED TO INTIMATE THE CONCERNED AO WHERE MR. K. BASAVAIAH IS ASSESSED, SO THAT THE SOURCES CAN BE V ERIFIED THEREIN AND ACCORDINGLY THE ADDITIONS MADE IN THE ASSESSEE S HANDS WAS DELETED BY THE LEARNED CIT (A). BEING AGGRIEVED, TH E REVENUE IS IN FURTHER APPEAL BEFORE US ON THIS ISSUE. 6. THE LEARNED DR RELIED ON THE ORDER OF THE AO, WH EREAS THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS MADE BEFORE THE FIRST APPELLATE AUTHORITY AND ALSO RELIED ON THE ORDER OF THE LEARNED CIT (A). 7. WE HAVE PERUSED THE DETAILED SUBMISSIONS OF THE DR AS WELL AS THE LEARNED COUNSEL FOR THE ASSESSEE AND ON THE RELATED FACTS AND CIRCUMSTANCES, WE ARRIVE AT OUR CONSIDERE D VIEW THAT HERE IS A CASE WHERE HUSBAND AND WIFE ARE HAVING JO INT BANK A/C, ITA NO 1281 OF 2015 GUTHULA NAGAMANY HYDERABAD PAGE 5 OF 6 BANK STATEMENT AND ACCOUNTS WERE PRODUCED BEFORE US AND EVEN THE BANK STATEMENT REGARDING THE RELEVANT TRANSACTI ONS WERE ALSO BROUGHT IN BEFORE US WHICH ARE ALREADY ON RECORD. T HE ASSESSEES HUSBAND HAS CATEGORICALLY STATED THROUGH AFFIDAVIT AND CONFIRMATION LETTER FILED BEFORE THE CIT (A) THAT H E IS EARNING INCOME FROM RICE BUSINESS AND THAT HE IS HAVING A J OINT A/C WITH HIS WIFE THE ASSESSEE HERE IN SBI A/C NO.3058825736 3 WITH THE SBI KUKATAPALLY TEMPLE BRANCH. WE HAVE NOTICED THAT THE BANK A/C INDICATES THAT THE DEPOSITS ARE BY SRI K. BASAV AIAH ALSO AND PAYMENTS ARE FOR RICE PURCHASE. THIS INDICATES THAT THE ENTIRE CASH DEPOSIT OF RS.48,07,730 RELATES TO HIS RICE BU SINESS. THE LEARNED CIT (A) HAS CORRECTLY ORDERED THE CONCERNED AO WITHIN WHOSE JURISDICTION THE HUSBAND OF THE ASSESSEE IS A SSESSED TO VERIFY THE SANCTITY OF THE CLAIM IN THE RICE BUSINE SS. HAVING SAID SO, JUST BECAUSE THE ASSESSEE IS A JOINT HOLDER OF THAT ACCOUNT, ANY AMOUNT DEPOSITED BY HER HUSBAND WHICH HE WOULD HAVE EARNED FROM A SEPARATE BUSINESS, IT CANNOT BE ADDED TO THE HANDS OF THE ASSESSEE. THEREFORE, WE DO NOT FIND AN Y REASON TO INTERFERE WITH THE ORDER OF THE LEARNED CIT (A) ON THE RELIEF GRANTED TO THE ASSESSEE BY THE CIT (A). THE GROUNDS ARE REJECTED. 8. NOW WE TAKE UP THE MATTER IN CROSS OBJECTION FIL ED BY THE ASSESSEE. THE GROUND WITH REGARD TO THE DISALLOWANC E OF HRA OF RS.49,328, THE AO HAS NOTICED FROM THE RETURN OF IN COME OF THE ASSESSEES HUSBAND HAS CLAIMED DEDUCTION U/S 80GG. HOWEVER, DURING THE COURSE OF THE APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED THAT HER HUSBAND FILED HIS REVISED RETURN OF INCOME WITHDRAWING THE CLAIM U/S 80GG. A COPY OF THE REVIS ED RETURN WAS ALSO FILED BEFORE THE FIRST APPELLATE AUTHORITY . THE LEARNED CIT ITA NO 1281 OF 2015 GUTHULA NAGAMANY HYDERABAD PAGE 6 OF 6 (A) ORDERED TO VERIFY THE GENUINENESS OF THE ASSESS EES CLAIM AND ALLOW THE CLAIM OF HRA AFTER VERIFYING THE FACTS. W ITH REGARD TO THIS ISSUE, OUR CONSIDERED VIEW IS THAT WHOSOEVER P AID THE RENT CAN CLAIM THE DEDUCTION AND AS DIRECTED BY THE FIRS T APPELLATE AUTHORITY, IT IS FOR THE AO TO VERIFY THE FACTS WHE THER THE ASSESSEE WILL GET THE CLAIM OR NOT. ON THIS ISSUE WE DO NOT SEE ANY REASON TO MODIFY THE DIRECTION OF THE CIT (A). THE GROUND IS ACCORDINGLY REJECTED. 9. TO SUM UP, REVENUES APPEAL AND ASSESSEES CROSS OBJECTION ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JUNE, 2016. SD/ - SD/ - (B. RAMAKOTAIAH) (PARTHA SARATHI CHAUDHURI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 29 TH JUNE, 2016. VNODAN/SPS COPY TO: 1. INCOME TAX OFFICER WARD 12(5) HYDERABAD 2. SMT. GUTHULA NAGAMANI, FLAT NO.203, HIG 130 & 137, REVATHI NILAYAM, 6 TH PHASE, KPHB, HYDERABAD 500072 3. CIT-1 HYDERABAD 4. PRINCIPAL CIT-1 HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER