P.Ramachandra Reddy , Tirupati V. Income Tax Officer, Ward-1(2), Tirupati

ITA 1012/Hyd/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8751 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2010-2011
• Appeal Filed On: 21-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Keywords: Unexplained cash credit; Source of fund
• Section: 143(3)

Judgement Text

ITA NO 1012 OF 2018 P RAMACHANDRA REDDY TIRUPATI. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B SMC BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.1012/HYD/2018 ASSESSMENT YEAR: 2010-11 SHRI P. RAMACHANDRA REDDY, TIRUPATI PAN:AEIPP2820H VS. INCOME TAX OFFICER WARD 1(2) TIRUPATI (APPELLANT) (RESPONDENT) ASSESSEE BY: SMT. S. SANDHYA REVENUE BY : SMT. N. SWAPNA, DR DATE OF HEARING: 08/01/2020 DATE OF PRONOUNCEMENT: 17/01/2020 ORDER THIS IS ASSESSEES APPEAL FOR THE A.Y 2010-11 AGAIN ST THE ORDER OF THE CIT (A)-TIRUPATI, DATED 16.03.2016 . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, FILED HIS RETURN OF INCOME FOR THE A.Y 2010-11 ON 31.03.2011, ADMITTING AN INCOME OF RS.3,32,212/-. D URING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE A O CALLED FOR COPIES OF THE BANK STATEMENTS, DETAILS OF AGRICULTU RAL INCOME EARNED DURING THE RELEVANT FINANCIAL YEAR, CASH FLO W STATEMENT IN RESPECT OF SOURCES OF INCOME FOR THE DEPOSITS AND A PPLICATION FOR WITHDRAWALS MADE IN THE BANK A/C AND OTHER DOCUMENT S IN SUPPORT OF THE CLAIMS MADE IN THE RETURN OF INCOME. THE ASSESSEE FILED THE RELEVANT DOCUMENTS. 3. ON PERUSAL OF THE SAME, THE AO OBSERVED FROM THE JOINT STATEMENT OF THE JOINT BANK A/C HELD BY THE A SSESSEE ALONG ITA NO 1012 OF 2018 P RAMACHANDRA REDDY TIRUPATI. PAGE 2 OF 4 WITH HIS WIFE SMT. J. BHARGAVI, WITH THE SBI, TTD A DMINISTRATIVE BUILDING BRANCH THAT ON 11.03.2010 AN AMOUNT OF RS.15,00,000/- WAS DEPOSITED INTO THE SAID A/C. THE ASSESSEE WAS THEREFORE, ASKED TO EXPLAIN THE SOURCES FOR SUCH CA SH DEPOSITS. THE ASSESSEE CLAIMED THAT DURING THE YEAR 2009-10, HIS WIFE SMT. J. BHARGAVI HAD BORROWED A SUM OF RS.15.00 LAKHS BY CHEQUES FROM THEIR FAMILY FRIENDS FOR THE PURPOSES OF INVES TMENT FOR PURCHASE OF A SITE AND SINCE THE DEAL COULD NOT BE MATERIALSED, THE AMOUNT WAS REDEPOSITED INTO THE BANK A/C AND WAS RE FUNDED TO THE CONCERNED PERSONS BY CHEQUES. THE AO, HOWEVER, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE. HE HELD THAT THE ASSESSEE HAS TAKEN LOANS FOR CONSTRUCTION OF A HOUSE WHICH W ERE IMMEDIATELY WITHDRAWN THEREAFTER FROM HIS A/C THROU GH SELF CHEQUES AND ALSO BY WAY OF CHEQUES ISSUED IN THE NA MES OF TWO PERSONS BY NAME K. SANDEEP AND K. SUNDAR RESPECTIVE LY AND THEREFORE, THE ASSESSEE DID NOT HAVE FURTHER FUNDS TO DEPOSIT RS.15.00 LAKHS ON 11.03.2010. HE THEREFORE, BROUGHT THE SUM OF RS.15.00 LAKHS TO TAX AS UNEXPLAINED CASH CREDIT U/ S 68. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A), WHO CONFIRMED THE ORDER OF THE AO AND THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW, WHIL E THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, I FIND THAT THE ASSESSEE HAS FILED THE C OPY OF BANK A/C STATEMENT AT PAGE 18 OF THE PAPER BOOK. IT IS SEEN THEREFROM THAT THE ASSESSEE HAS RECEIVED THROUGH CHEQUES, A SUM OF RS.5.00 ITA NO 1012 OF 2018 P RAMACHANDRA REDDY TIRUPATI. PAGE 3 OF 4 LAKHS ON 21.10.2009 AND ANOTHER RS.4.00 LAKHS ON 22 .10.2009 OUT OF WHICH RS.4,00,000/- HAS BEEN WITHDRAWN ON 21 /10/2009 AND ANOTHER RS.4,00,000/- AND RS.20,000/- ON 22.10. 2009. THE ASSESSEE HAD WITHDRAWN A SUM OF RS.4,20,000/-. THE ASSESSEE HAD AGAIN RECEIVED A SUM OF RS.6.00 LAKHS ON 23.10. 2009 BY WAY OF TWO CHEQUES AND ON 26.10.2009 AND 27.10.2009 THE ASSESSEE HAD WITHDRAWN SUMS OF RS.4.00 LAKHS AND RS.3.00 LAK HS RESPECTIVELY IN THE NAMES OF K. SANDEEP AND K. SUND AR. THEREAFTER, THERE ARE NO MAJOR DEPOSITS INTO THE BA NK A/C EXCEPT THE SALARY OF RS.40,959/- AND IT IS ONLY ON 11.03.2 010, THAT THE ASSESSEE HAS DEPOSITED THE CASH OF RS.15.00 LAKHS W HICH HAS BEEN UTILIZED TO REPAY THE LOANS BY WAY OF CHEQUES TO THE CREDITORS. THE AO AND THE CIT (A) DID NOT ACCEPT TH E ASSESSEES CONTENTION OF THIS FUND OF RS.15.00 LAKHS HAS BEEN KEPT WITH THE ASSESSEE FOR A PERIOD OF 4 MONTHS BEFORE REDEPOSITI NG IT INTO THE BANK A/C. THE CIT (A), IN PARA 3 AND 3.1 OF HIS ORD ER HAS BROUGHT OUT THAT THE ASSESSEE AND HIS WIFE ARE CONSTRUCTING A HOUSE AN THEREFORE, THE CASH WITHDRAWN FROM THE BANK WAS REQ UIRED FOR UTILIZATION IN THE CONSTRUCTION OF THE SAID BUILDIN G AND SHOULD NOT BE CONSIDERED AS AVAILABLE WITH THE ASSESSEE FOR RE DEPOSITING IT INTO THE BANK A/C ON 11.03.2010. HOWEVER, NEITHER T HE AO NOR THE CIT (A) HAVE BEEN ABLE TO SHOW THAT THE INVESTM ENT MADE BY THE ASSESSEE AND HIS WIFE IN CONSTRUCTION OF THE HO USE WAS MUCH MORE THAN THE FUNDS AVAILABLE WITH THEM BY WAY OF H OME LOANS TAKEN BY THEM. THE FINDING OF THE AO AND THE CIT (A ) THAT THE ASSESSEE HAS NOT PRODUCED ANY AGREEMENT OR DOCUMENT THAT THERE WAS NO INVESTMENT IN THE PROPERTY IS NOT SUSTAINABL E BECAUSE, WHEN THE ASSESSEE COULD NOT PURCHASE THE SITE, THER E CANNOT BE ANY DOCUMENT TO SUPPORT THE SAME. IF THERE IS ANY T RANSACTION, THERE WOULD BE SOME DOCUMENT. THE ASSESSEE CANNOT B E EXPECTED TO PROVE THE NEGATIVE. SINCE THE PERIOD OF RECEIPT AND REPAYMENT IS ITA NO 1012 OF 2018 P RAMACHANDRA REDDY TIRUPATI. PAGE 4 OF 4 ONLY 4 MONTHS AND THERE IS NOTHING BROUGHT ON RECOR D TO SHOW THAT THE ASSESSEE HAS INVESTED THE ENTIRE MONEY IN THE CONSTRUCTION OF THE HOUSE, I AM OF THE OPINION THAT THE ASSESSEES CONTENTION NEEDS TO BE ACCEPTED. THE AO HAS ALSO NO T BROUGHT OUT THAT THE ASSESSEE HAS ANY OTHER SOURCE OF INCOME OT HER THAN THE SALARY RECEIVED BY HIM. THEREFORE, THE APPEAL OF TH E ASSESSEE IS ALLOWED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JANUARY, 2020. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 17 TH JANUARY, 2020. VINODAN/SPS COPY TO: 1 SHRI P. RAMACHANDRA REDDY, 8-14/1 PADMAVATHIPURAM , TIRUPATI 2 ITO WARD 1(2) KT ROAD, TIRUPATI 3 CIT (A)-TIRUPATI 4 PR. CIT - TIRUPATI 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER