Smt. Pothuneedi Medha, Visakhapatnam V. THE DCIT, CIRCLE - 3(1), Visakhapatnam

CO 95/VIZ/2013

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1777 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 1 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 30-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M NARAYANA RAO
• Keywords: Additional evidence

Judgement Text

ITA NO.321/VIZAG/2013 & CO 95/VIZAG/2013 POTHUNEEDI MEDHA, VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , . . . . , $ $ $ $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.321/VIZAG/2013 ( / ASSESSMENT YEAR : 2007-08 ) DCIT CIRCLE - 3(1) VISAKHAPATNAM VS. SMT. P. MEDHA VISAKHAPATNAM [ PAN : AORPP0362H] ( & & & & / APPELLANT) ( '(& '(& '(& '(& / RESPONDENT ) C.O. NO.95/VIZAG/2013 (ARISING OUT OF I.T.A.NO.321/VIZAG/2013) ( / ASSESSMENT YEAR : 2007-08 ) SMT. P . MEDHA VISAKHAPATNAM VS. DCIT CIRCLE - 3(1) VISAKHAPATNAM ( & & & & / APPELLANT) ( '(& '(& '(& '(& / RESPONDENT ) & ) / APPELLANT BY : SHRI M. NARAYANA RAO, DR '(& ) / RESPONDENT BY : SH RI G.V.N. HARI, AR ) - / DATE OF HEARING : 20.11.2015 ) - / DATE OF PRONOUNCEMENT : 11/12/2015 ITA NO.321/VIZAG/2013 & CO 95/VIZAG/2013 POTHUNEEDI MEDHA, VISAKHAPATNAM 2 / O R D E R PER BENCH: THIS APPEAL FILED BY THE REVENUE AND CROSS OBJECTI ON FILED BY THE ASSESSEE, ARE DIRECTED AGAINST THE ORDER OF THE CIT (A), VISAKHAPATNAM DATED 18.3.2013 FOR THE ASSESSMENT YEAR 2007-08. S INCE, THE ISSUE INVOLVED IN THESE APPEALS IS COMMON, THEY ARE CLUBB ED, HEARD TOGETHER AND DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEF FACTS OF THE CASE, ARE THAT THE ASSESSEE I S AN INDIVIDUAL FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 ON 10.8.2007, DECLARING A TOTAL INCOME OF RS.61,26,540/-. THE RE TURN WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) ON 18.6.2008. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT, ACCORDINGLY, NOTICES U/S 143(2) & 142(1 ) OF THE ACT WERE ISSUED. IN RESPONSE TO THE NOTICES, THE ASSESSEES A.R. APPEARED FROM TIME TO TIME AND SUBMITTED THE DETAILS CALLED FOR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT THE A SSESSEE HAS MADE CASH DEPOSIT OF RS.37 LAKHS ON 26.3.2007, WITH ING VYSYA BANK, AMEERPET BRANCH, HYDERABAD. THEREFORE, THE ASSESSE E WAS ASKED TO EXPLAIN THE SOURCES FOR THE CASH DEPOSIT APPEARING IN THE BANK ACCOUNT. ITA NO.321/VIZAG/2013 & CO 95/VIZAG/2013 POTHUNEEDI MEDHA, VISAKHAPATNAM 3 IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE EXPLAINED THAT THE SOURCES FOR THE CASH DEPOSIT IN BANK ACCOUNT, WAS C ASH WITHDRAWN FROM THE SAME BANK IN EARLIER OCCASIONS I.E. ON 30.12.20 06 & 3.1.2007 FOR THE PURPOSE OF PURCHASE OF AGRICULTURAL LAND. SHE FURTH ER SUBMITTED THAT SINCE, THE TRANSACTION COULD NOT MATERIALIZE THE SA ME WAS DEPOSITED BACK INTO THE BANK ACCOUNT. THE ASSESSEE FURTHER S UBMITTED THAT DURING THE YEAR UNDER CONSIDERATION, SHE HAD SOLD PROPERTY AND DECLARED CAPITAL GAIN OF RS.52,64,665/-. THE SOURCES FOR THE CASH DE POSITS WERE FROM THE SALE OF THE LAND, THEREFORE, THE CASH DEPOSITS TO B ANK STANDS EXPLAINED OUT OF THE SALE PROCEEDS OF THE LAND. HOWEVER, THE A.O., DID NOT CONVINCED WITH THE EXPLANATIONS OFFERED BY THE ASSE SSE, HELD THAT THE ASSESSEE DID NOT OFFERED SATISFACTORY EXPLANATIONS ABOUT THE SOURCE FOR THE CASH DEPOSIT, AS THERE WAS A THREE MONTHS GAP B ETWEEN THE CASH WITHDRAWAL FROM THE BANK AND CASH DEPOSITS TO THE B ANK. THEREFORE, MADE ADDITION OF RS.37 LAKHS AND BROUGHT TO TAX U/S 69B OF THE ACT. 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE A SSESSEE SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION, SHE HAD S OLD A PROPERTY AND DECLARED A CAPITAL GAIN OF RS.52,64,605/-. SHE FUR THER SUBMITTED THAT, SHE HAD WITHDRAWN AN AMOUNT OF RS.10 LAKHS ON 30.12 .2006 AND FURTHER ITA NO.321/VIZAG/2013 & CO 95/VIZAG/2013 POTHUNEEDI MEDHA, VISAKHAPATNAM 4 SUM OF RS.27 LAKHS ON 3.1.2007 FOR THE PURPOSE OF P URCHASE OF AGRICULTURAL LAND. SINCE, THE TRANSACTIONS DID NOT MATERIALIZE DUE TO LEGAL DEFECTS, THE ADVANCE AMOUNT GIVEN TO PROSPECTIVE SE LLER WAS RETURNED AND THE SAME WAS DEPOSITED TO BANK ON 26.3.2007. T O THIS EFFECT, THE ASSESSEE HAS FILED A CONFIRMATION FROM ONE SMT. DRA KSHAYANI DEVI, STATING THAT SHE HAD RECEIVED RS. 37 LAKHS ADVANCE FROM THE ASSESSEE FOR SALE OF AGRICULTURAL LAND AND RETURNED THE SAME , AS THE TRANSACTIONAL DID NOT MATERIALIZE. SINCE, ASSESSEE HAD FILED THE CONFIRMATION LETTER IN THE FORM OF ADDITIONAL EVIDENCE, THE CIT(A), DURING THE COURSE OF APPELLATE PROCEEDINGS, CONFRONTED THE CONFIRMATION LETTER FILED BY THE ASSESSEE TO THE ASSESSING OFFICER AND CALLED FOR RE MAND REPORT. THE A.O. GAVE REMAND REPORT VIDE LETTER DATED 11.1.2013 AND OBJECTED THE ADDITIONAL EVIDENCE FILED BY THE ASSESSE, STATING T HAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE STATED THAT SHE HAD WITHDRAWN THE CASH AND KEPT THE SAME WITH HER FOR PURCHASE OF AGRICULTURAL LAND, SINCE THE TRANSACTION COULD NOT MATERIALIZE, THE SA ME WAS DEPOSITED INTO THE BANK ACCOUNT. BUT, DURING THE APPELLATE PROCEE DINGS, SHE HAD TAKEN A DIFFERENT STAND THAT SHE HAD GIVEN ADVANCE TO ONE SMT. DRAKSHAYANI DEVI, THEREFORE THE SAME CANNOT BE CONSIDERED. THE CIT(A), GAVE AN OPPORTUNITY TO THE ASSESSEE TO FILE HER COMMENTS ON THE AOS REMAND REPORT. IN RESPONSE TO THE AOS REMAND REPORT, THE ASSESSEE SUBMITTED ITA NO.321/VIZAG/2013 & CO 95/VIZAG/2013 POTHUNEEDI MEDHA, VISAKHAPATNAM 5 THAT THE FACTS TO THE EXTENT OF CASH WITHDRAWAL OUT OF THE SALE PROCEEDS OF THE LAND WAS BROUGHT TO THE NOTICE OF THE A.O. A T THE TIME OF ASSESSMENT. THE A.O. DISBELIEF IS ONLY WITH REGARD TO THE INTERVENING TRANSACTIONS RELATING TO THE UTILIZATION OF CASH, W HICH WOULD NOT ENTITLE THE A.O. TO MAKE AN ADVERSE INFERENCE AS TO THE SOU RCE OF THE CASH DEPOSIT. SHE WAS ALSO CONTENDED THAT THERE IS NO B ASIS FOR THE A.O. TO BELIEVE THAT THE CASH DEPOSIT IN BANK IS OUT OF UNE XPLAINED INCOME AND IT IS A MERE PRESUMPTION. THE CIT(A), AFTER CONSIDERI NG THE EXPLANATIONS FURNISHED BY THE ASSESSE, HELD DELETING THE ADDITIO NS MADE BY THE A.O., THAT THE EXPLANATIONS GIVEN FOR THE WITHDRAWAL AND REDEPOSIT OF CASH APPEAR TO BE REASONABLE AND THUS, FURTHER SUPPORTED BY CONFIRMATION OF THE OTHER PARTY. THE CIT(A), FURTHER HELD THAT EVE N ASSUMING, THE EXPLANATIONS REGARDING THE ADVANCE MADE FOR THE PUR CHASE OF AGRICULTURAL LAND IS NOT BELIEVABLE FOR WANT OF ONE TO ONE CONFIRMATION AS TO DETAILS, IT WOULD NOT RENDER AS SUCH THE IMPUGNE D DEPOSIT UNEXPLAINED, AS IT WAS NOT PROVED THAT WITHDRAWALS WERE UTILIZED FOR OTHER PURPOSES. THEREFORE, DELETED THE ADDITIONS M ADE BY THE A.O. AGGRIEVED BY THE CIT(A) ORDER, THE REVENUE IS IN AP PEAL BEFORE US. 4. THE LD. D.R. SUBMITTED THAT THE CIT(A), WAS ERRE D IN DELETING THE ADDITIONS MADE BY THE A.O. U/S 69B OF THE ACT, IN R ESPECT OF CASH ITA NO.321/VIZAG/2013 & CO 95/VIZAG/2013 POTHUNEEDI MEDHA, VISAKHAPATNAM 6 DEPOSITS IN BANK ACCOUNT, AS THE SAID CASH DEPOSITS STOOD UNEXPLAINED. THE D.R. FURTHER SUBMITTED THAT THERE WAS A GAP OF MORE THAN 3 MONTHS IN RESPECT OF CASH WITHDRAWAL AND REDEPOSIT INTO TH E BANK. THEREFORE, THE ASSESSEE DID NOT EXPLAINED THE REASONS FOR KEEP ING THE CASH FOR SUCH A LONG PERIOD WITH HER AND REDEPOSIT INTO THE BANK ACCOUNT. THE D.R. FURTHER SUBMITTED THAT DURING THE ASSESSMENT PROCEE DINGS, THE ASSESSEE HAS TAKEN ONE STAND AND AT THE APPELLATE STAGE, SHE CHANGED HER VERSION, THEREFORE, THE CIT(A) WAS ERRED IN ACCEPTI NG THE ASSESSEES EXPLANATIONS AND DELETED THE ADDITIONS MADE BY THE A.O., THEREFORE, URGED TO UPHOLD THE ORDER OF THE A.O. ON THE OTHER HAND, THE A.R. OF THE ASSESSEE STRONGLY SUPPORTED THE ORDER OF THE CI T(A). 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MA TERIALS AVAILABLE ON RECORD. THE A.O. MADE THE ADDITIONS O F RS.37 LAKHS U/S 69B OF THE ACT, ON THE GROUND THAT THE CASH DEPOSITS TO THE BANK ACCOUNT MAINTAINED AT ING VYSYA BANK, AMEERPET BRANCH, HYDE RABAD, IS UNEXPLAINED. THE ASSESSEE CONTENDED THAT SHE HAD SO LD A LAND, DURING THE YEAR UNDER CONSIDERATION AND THE SOURCES FOR TH E CASH DEPOSITS WERE EXPLAINED OUT OF THE SALE PROCEEDS OF THE LAND, THE REFORE, CASH DEPOSITS CANNOT BE CONSIDERED AS UNEXPLAINED. THE ASSESSEE FURTHER, CONTENDED THAT SHE HAD WITHDRAWN A SUM OF RS.37 LAKHS ON TWO OCCASIONS I.E. ITA NO.321/VIZAG/2013 & CO 95/VIZAG/2013 POTHUNEEDI MEDHA, VISAKHAPATNAM 7 30.12.2006 AND 3.1.2007 AND PAID ADVANCE TOWARDS PU RCHASE OF AGRICULTURAL LAND TO ONE SMT. DRAKSHAYANI DEVI. SI NCE, THE SAID TRANSACTION COULD NOT MATERIALIZE BECAUSE OF LEGAL PROBLEMS IN THE DOCUMENTS, THE SELLER RETURNED THE ADVANCE PAID FOR PURCHASE OF LAND AND THE SAME WAS DEPOSITED IN TO BANK ACCOUNT ON 25 .3.2007. TO THIS EFFECT, FILED A CONFIRMATION LETTER FROM ONE SMT. D RAKSHAYANI DEVI, STATING THAT SHE HAD PAID ADVANCE OF RS.37 LAKHS AN D LATER IT WAS RETURNED BACK. THE CIT(A), FORWARDED THE ADDITIONA L EVIDENCE TO THE A.O. AND OBTAINED HIS REMAND REPORT. THOUGH, THE A .O. OBJECTED THE ADDITIONAL EVIDENCE FILED BY THE ASSESSE, STATING T HAT THE ASSESSEE HAS CHANGED HER STAND DURING THE APPELLATE PROCEEDINGS, THE CIT(A) CONSIDERED THE EVIDENCE AND DELETED THE ADDITIONS. 6. WE HAVE EXAMINED THE RECORDS. ON PERUSAL OF THE E VIDENCES FILED BY THE ASSESSE, WE NOTICED THAT THE CASH WITHDRAWAL S WERE ORIGINALLY FROM THE SALE PROCEEDS OF THE LAND, SOLD DURING THE FINANCIAL YEAR, WHICH IS NOT DISPUTED BY THE A.O. BUT, A.O. DOUBTED THE INTERVENING TRANSACTIONS, BEING, SHE HAD PAID ADVANCE FOR PURCH ASE OF LAND AND THE SAME WAS RETURNED BY THE PARTY BECAUSE THE SALE COU LD NOT TAKE PLACE. THE A.O. NEVER DOUBTED THE SOURCE FOR THE CASH DEP OSITS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. HAS MADE DETAILED ITA NO.321/VIZAG/2013 & CO 95/VIZAG/2013 POTHUNEEDI MEDHA, VISAKHAPATNAM 8 ENQUIRIES AS TO THE SOURCES OF INVESTMENTS IN THE F ORM OF CASH DEPOSIT TO THE BANK. DESPITE VARIOUS ENQUIRIES CONDUCTED, THE A.O. COULD NOT COME TO ANY CONCLUSION THAT THE WITHDRAWALS FOUND UTILIZ ED FOR ANY OTHER PURPOSES OR EXPENDITURE, SO AS TO SAY THAT THEY WER E NOT AVAILABLE TO MAKE THE CASH DEPOSIT IN TO BANK. THE ONLY CONTENT ION OF THE A.O. IS THAT THERE IS A GAP OF 3 MONTHS BETWEEN THE CASH WI THDRAWALS FROM THE BANK AND CASH DEPOSIT TO THE BANK. IN SUCH A FACTU AL SCENARIO, WE ARE OF THE OPINION, THAT THE A.O. WAS NOT CORRECT IN CO MING TO THE CONCLUSION THAT THE IMPUGNED CASH DEPOSIT REPRESENTS INCOME OF ASSESSEE FROM UNDISCLOSED SOURCES. FURTHER, IT IS NOTED THAT THE TIME SPAN FOR THE REDEPOSIT WAS ONLY A MATTER OF THREE MONTHS, WHICH IN OUR OPINION GIVES REASONABLE NEXUS OF SUCH WITHDRAWAL TO MAKE AVAILAB LE THE IMPUGNED CASH DEPOSIT, PARTICULARLY WHEN NO MATERIAL WAS BRO UGHT ON RECORD TO SHOW THAT THE WITHDRAWALS WERE UTILIZED FOR ANY OTH ER INVESTMENT OR EXPENDITURE. IN THE ABSENCE OF ANY CONTRARY EVIDEN CE ON RECORD TO SHOW THAT THE CASH WITHDRAWAL WAS UTILIZED FOR OTHE R PURPOSES, THE A.O. WAS NOT CORRECT IN HOLDING THAT THE ASSESSEE DID NO T EXPLAINED THE SOURCES FOR THE CASH DEPOSIT TO BANK THEREFORE, WE ARE OF THE OPINION, THAT THE EXPLANATIONS GIVEN BY THE ASSESSEE FOR THE WITHDRAWAL AND DEPOSIT OF CASH APPEAR TO BE REASONABLE AND ALSO IS FURTHER SUPPORTED BY THE CONFIRMATION LETTER FROM OTHER PARTY, REGARDING REFUND OF ADVANCE ITA NO.321/VIZAG/2013 & CO 95/VIZAG/2013 POTHUNEEDI MEDHA, VISAKHAPATNAM 9 GIVEN FOR PURCHASE OF LAND. THE CIT(A), AFTER CONS IDERING THE ASSESSEES EXPLANATIONS, DELETED THE ADDITIONS MADE BY THE A.O . WE DO NOT FIND ANY ERROR OR INFIRMITY IN THE ORDER OF THE CIT(A), THEREFORE, WE INCLINED TO UPHOLD THE ORDER OF THE CIT(A) AND DELETE THE ADDIT IONS MADE BY THE A.O. 7. THE CROSS OBJECTION FILED BY THE ASSESSE, IS ONL Y SUPPORTING THE ORDER OF CIT(A). THEREFORE, FOR THE REASONS RECORD ED IN THE PRECEDING PARAGRAPHS, WE DISMISS THE CROSS OBJECTION FILED BY THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALSO DISMI SSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11 TH DEC15. SD/- SD/- ( . ) ( . . . . ) ( (( ( V. DURGA RAO ) )) ) ( G. MANJUNATHA) / // / JUDICIAL MEMBER / // / ACCOUNTANT MEMBER /VISAKHAPATNAM: 3 / DATED : 11/12/2015 VG/SPS ITA NO.321/VIZAG/2013 & CO 95/VIZAG/2013 POTHUNEEDI MEDHA, VISAKHAPATNAM 10 ) ' 4 / COPY OF THE ORDER FORWARDED TO :- 1. & / THE APPELLANT THE DCIT, CIRCLE-3(1), VISAKHAPATNAM 2. '(& / THE RESPONDENT SMT. P. MEDHA, D.NO.1-67-7, M.V.P. COLONY, VISAKHAPATNAM 3. 5 / THE CIT-1, VISAKHAPATNAM 4. 5 () / THE CIT (A), VISAKHAPATNAM 5. ' , , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE / BY ORDER // TRUE COPY // 9: ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM SL. NO. DESCRIPTION DATE INITIALS 1. DATE OF DICTATION BY THE AUTHOR SR.PS 2. DRAFT PLACED BEFORE THE DICTATING MEMBER SR.PS 3. DRAFT PLACED BEFORE THE SECOND MEMBER SR. PS 4. DRAFT APPROVED BY THE SECOND MEMBER SR. PS 5. DATE OF APPROVED ORDER COMES TO THE SR. PS SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER SR. PS 7. DATE OF FILE SENT TO THE BENCH CLERK SR. PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK HD. C LK 9. DATE OF DISPATCH OF ORDER SR. PS