Sri Rameshbabu Reddy Nallareddy, Hyderabad V. ADIT (IT)-II, Hyderabad

ITA 1030/HYD/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6450 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 26-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained cash credit; Salary income; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1030/HYD/2014 ASSESSMENT YEAR 2009-10 SRI RAMESHBABU REDDY NALLAREDDY, HYDERABAD PAN: AAHPN7153J VS. THE ASST. DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION)-II, HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SRI A.V. RAGHU RAM RESPONDENT BY: SRI R. MOHAN REDDY DATE OF HEARING: 0 7 .0 7 .2014 DATE OF PRONOUNCEMENT: 16 .07.2014 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-V, HYDERABAD DATED 07.02.2014 F OR ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2009-10 ON 15.10.201 ADMITTING INCOME FROM SALARY A ND OTHER SOURCES. SUBSEQUENTLY THE ASSESSEE FILED REV ISED RETURN OF INCOME ON 24.11.2010 ADMITTING INCOME OF RS. 3,46,627. ASSESSMENT WAS COMPLETED BY THE AO DETERMINING TOTAL INCOME AT RS. 73,97,400 BY MAKING THE FOLLOWING ADDITIONS: (A) ADDITION OF CASH CREDITS - RS. 70,50,000 (B) ADDITION OF INTEREST IN SB A/C. - RS. 770 2 ITA NO. 1030/HYD/2014 SRI RAMESHBABU REDDY NALLAREDDY =========================== 3. THE AO IN HER ASSESSMENT ORDER, MADE THE ADDITION OF RS. 70,50,000 FOR THE FOLLOWING REASONS: 'IT IS SEEN FROM THE AIR INFORMATION THAT THE ASSESSEE HAS MADE CASH DEPOSITS AMOUNTING TO RS. 70,50,000 IN BANK. THE DETAILS ARE OBTAINED FROM THE ASSESSEE. AS SEEN FROM THE ASSESSEE'S BANK STATEMENT OF AXIS BANK, A CASH DEPOSIT OF RS. 40,00,000/- WAS MADE ON 23/07/2008, OF RS. 28,00,000/- ON 22/09/2008, RS. 2,50,000/- ON 06/10/2008. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE NATURE OF ABOVE CASH DEPOSITS. THE ASSESSEE SUBMITTED THAT THE ABOVE CASH DEPOSITS WERE ON ACCOUNT OF THE ADVANCES RECEIVED IN RESPECT OF SALE OF TWO LANDS. AS PER THE COPIES OF AGREEMENT OF SALE SUBMITTED BY THE ASSESSEE, THE FIRST LAND IS IN TIKKAVARAM VILLAGE, NELLORE DISTRICT, IN RESPECT OF WHICH, AN AMOUNT OF RS. 40,00,000/- WAS GIVEN AS ADVANCE BY A SET OF FARMERS. THE SECOND LAND IS IN KAKIVAKAM VILLAGE IN RESPECT OF WHICH THE ADVANCE AMOUNT IS SHOWN AS RS. 28,00,000/-. THOUGH THESE AMOUNTS ARE CORRESPONDING TO THE AMOUNTS APPEARING AS CASH DEPOSITS IN BANK, IT IS SEEN THAT THE SAID DOCUMENTS ARE UNREGISTERED AND NOT VERIFIABLE. THE ASSESSEE ALSO FAILED TO SUBMIT CONFIRMATIONS FROM THE FARMERS IN SUPPORT OF THE SAID PAYMENTS. IT IS ALSO SEEN THAT THE TITLE OF DOCUMENT IS 'STHIRAASTHI VIKRAYA PATRAM' (IN TETUGU). WHICH TRANSLATES AS 'IMMOVABLE PROPERTY SALE DEED'. IT IS A GENERAL PRACTICE THAT SALE DEEDS FRUCTIFY ONLY WHEN THEY ARE REGISTERED. IN THIS CASE, THE COPY OF THE SALE DEED CLEARLY SHOWS THAT IT IS UNREGISTERED. FURTHER, THE NAMES AND ADDRESSES OF THE FARMERS WHO PURPORTEDLY GAVE THE AMOUNTS TO THE ASSESSEE AS ADVANCE, ARE NOT AVAILABLE IN THE DOCUMENT. THIS IS IN CONTRAST TO THE GENERAL PRACTICE WHERE ANY SALE DEED COMES WITH AN ANNEXURE SHOWING THE EXTENT OF LAND, ITS BOUNDARIES AND THE NAMES AND ADDRESSES ALONG WITH SIGNATURES OF BOTH 3 ITA NO. 1030/HYD/2014 SRI RAMESHBABU REDDY NALLAREDDY =========================== THE BUYER(S) AND THE SELLER(S). IN THIS CASE, THE SO-CALLED SALE DEED DOES NOT EVIDENCE ANY SUCH PARTICULARS. IN VIEW OF THE ABOVE, THERE REMAINS REASONABLE DOUBT ABOUT THE GENUINENESS OF THE SAID DOCUMENT. AS THE ASSESSEE FAILED TO PRODUCE ANY CONFIRMATIONS FROM THE FARMERS ALSO, THE GENUINENESS OF THE DOCUMENT REMAINS UNSUBSTANTIATED. THE ASSESSEE FAILED TO PRODUCE ANY CONFIRMATION LETTERS FROM THE FARMERS REGARDING CREDITWORTHINESS AND GENUINENESS DESPITE GIVING SEVERAL OPPORTUNITIES. THEREFORE, ANY ATTEMPT OF THE ASSESSEE TO FURNISH ANY ADDITIONAL INFORMATION AT THE APPELLATE STAGE SHOULD NOT BE ACCEPTED AS ADDITIONAL EVIDENCE AS PER RULE 46A OF THE I.T. RULES, 1962 AS THE GENUINENESS OF THE DOCUMENTS SO FURNISHED WILL BE QUESTIONABLE. IN VIEW OF THE ABOVE, THE UNSUBSTANTIATED CASH CREDITS AMOUNTING TO RS. 70,50,000 ARE HEREBY DISALLOWED U/S 68 OF THE ACT.' 4. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT THE AO HAD ENQUIRED INTO THE ADVANCE OF RS. 70,50,000 RECEIVED IN CASH IN RESPECT OF SALE OF LANDS AT TIK KAVARAM REVENUE VILLAGE AND KAKIVAKAM VILLAGE, NELLORE DIST RICT. 5. THE LEARNED AR SUBMITTED HE HAD GIVEN THE COPY OF AGREEMENT TO WHICH THE ADVANCES WERE PERTAINING. HOWEVER, IT WAS ALSO SUBMITTED THAT THE TRANSACTION S FOR SALE OF LAND COULD NOT FRUCTIFY AND THE AMOUNT WAS PAID BACK TO THE SAID PERSONS WHO HAD GIVEN ADVANCES. T HE LEARNED AR SUBMITTED THAT THE SAID AMOUNTS WERE RECEIVED AND PAID THROUGH THE BANK ACCOUNT. IT WAS FURTHER POINTED OUT THAT THOUGH THE ASSESSEE HAD 4 ITA NO. 1030/HYD/2014 SRI RAMESHBABU REDDY NALLAREDDY =========================== EXPRESSED HIS READINESS TO PRODUCE CONFIRMATION LET TERS AND TO PRODUCE THE PERSONS FOR EXAMINATION, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT ABRUPTLY ALLEGING THAT THE ASSESSEE FAILED TO PRODUCE ANY CONFIRMATION LETTERS FROM THE FARMERS REGARDING CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION S. THE CIT(A) AGREED WITH THE OBSERVATIONS OF THE ASSE SSING OFFICER REGARDING THE CASH CREDITS AND HELD THAT TH E AO HAD RIGHTLY MADE THE ADDITION OF RS. 70,50,000 TOWA RDS UNEXPLAINED CASH CREDIT IN THE ABSENCE OF CONFIRMAT ION LETTERS FROM THE FARMS WHO HAD ADVANCED THE AMOUNTS , TO PROVED THEIR CREDITWORTHINESS AND GENUINENESS OF TH E TRANSACTIONS AND ALSO THE DOCUMENTS. AGGRIEVED, TH E ASSESSEE IS IN APPEAL BEFORE US. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SRI A.V. RAGHU RAM SUBMITTED THAT THE LEARNED CIT(A) ERRED IN PASS ING EX-PARTE ORDER WITHOUT GIVING SUFFICIENT OPPORTUNIT Y TO THE ASSESSEE. THE CIT(A) HAVING ACCEPTED THE PETITION F OR ADJOURNMENT FILED ON BEHALF OF THE ASSESSEE AND IND ICATED TO ISSUE A FRESH NOTICE OF HEARING, COULD NOT HAVE DISMISSED THE APPEAL BEHIND THE BACK OF THE ASSESSE E. IT WAS SUBMITTED THAT THE LEARNED CIT(A) ERRED IN CONF IRMING THE ADDITION OF RS. 70,50,000 AS UNEXPLAINED DEPOSI TS IN BANK ACCOUNT AND FAILED TO APPRECIATE THAT THE SAID AMOUNTS ARE ADVANCES RECEIVED IN RESPECT OF AGRICUL TURAL LANDS THAT WERE PROPOSED TO BE SOLD. IT WAS FURTHE R CONTENDED THAT THE LEARNED CIT(A) FAILED TO APPRECI ATE THAT THE ASSESSEE EXPRESSED HIS READINESS TO PRODUCE THE PERSONS WHO WANTED TO PURCHASE THE AGRICULTURAL LAN DS AND THAT AO HAS NOT SHOWN ANY INCLINATION TO EXAMIN E THE PERSONS AND THE LEARNED CIT(A) FURTHER FAILED T O 5 ITA NO. 1030/HYD/2014 SRI RAMESHBABU REDDY NALLAREDDY =========================== APPRECIATE THAT SOME OF THE PAYMENTS WERE THROUGH CHEQUES AND THE NAMES OF THE SAID BUYERS WERE APPEA RING IN THE BANK ACCOUNT. 7. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO PRODUCED BEFORE US THE DOCUMENTS WHICH WERE FILED BEFORE THE AO AND SUBMITTED THAT THE SAME COULD NOT BE FILED BEFO RE THE CIT(A) ON ACCOUNT OF EX-PARTE ORDER, WHICH ARE AS U NDER: A) AGREEMENT OF SALE DATED 23.07.2008. B) ENGLISH TRANSLATION OF ABOVE AOS. C) AGREEMENT OF SALE DATED 22.09.2008. D) ENGLISH TRANSLATION OF ABOVE AOS. E) BANK ACCOUNT STATEMENT OF ASSESSEE WITH AXIS BANK FOR THE PERIOD 1.4.2004 TO 11.10.2011. F) BANK ACCOUNT STATEMENT OF ASSESSEE WITH ICICI BANK FOR THE PERIOD 1.8.2009 TO 31.03.2010. 8. THE LEARNED COUNSEL ALSO FILED PETITION FOR ADMISSI ON OF ADDITIONAL EVIDENCE WHEREIN HE HAD FILED THE FOL LOWING DOCUMENTS: A) PASSPORT OF THE ASSESSEE. B) DETAILS OF REPAYMENT OF ADVANCES FOR SALE AGREEMENT DATED 23.7.2008 ALONG WITH CONFIRMATION LETTERS. C) DETAILS OF REPAYMENT OF ADVANCES FOR SALE AGREEMENT DATED 22.8.2008 ALONG WITH CONFIRMATION LETTERS. 9. WE HAVE HEARD BOTH THE PARTIES. WE FIND THAT IN SPITE OF READINESS OF THE ASSESSEE TO PRODUCE PERSO NS WHO WANTED TO PURCHASE THE AGRICULTURAL LANDS, THE AO H AD NOT EXAMINED THE PERSONS. THE CIT(A) PASSED THE APPELLATE ORDER EX-PARTE AND DID NOT GO THROUGH THE ACCOUNTS WHERE SOME OF THE REPAYMENTS WERE THROUGH 6 ITA NO. 1030/HYD/2014 SRI RAMESHBABU REDDY NALLAREDDY =========================== CHEQUES AND DETAILS OF THE BANK STATEMENTS FILED BE FORE HIM. IN THESE CIRCUMSTANCES, WE DEEM IT FIT TO RES TORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WHO SHA LL EXAMINE THE EVIDENCES FILED WITH RESPECT TO THE REPAYMENTS TO THE BUYERS AS THE SALE TRANSACTIONS D ID NOT FRUCTIFY AND AFTER GOING THROUGH THE BANK STATEMENT S AND EXAMINING THE PERSONS, IF NECESSARY, DECIDE THE ISS UE IN ACCORDANCE WITH LAW. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 16 TH JULY, 2014 SD/ - (B. RAMAKOTAIAH) ACCOUNTANT MEMBER SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER HYDERABAD, DATED THE 16 TH JULY, 2014 TPRAO COPY TO: 1. SRI RAMESHBABU REDDY NALLAREDDY, C/O. S RI K. VASANT KUMAR, A.V. RAGHU RAM & P. VINOD, ADVOCATES, FLAT NO. 610, 6 TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD-500 001. 2. THE ASST. DIRECTOR OF INCOME - TAX (INTERNATIONAL TAXATION)-II, HYDERABAD. 3. THE CIT(A) - V , HYDERABAD. 4. THE CIT - I V , HYDERABAD. 5. THE DR, A - BENCH, ITAT, HYDERABAD.