ITO, Ward-2, Warangal V. Sri Ramesh Veldi, Warangal

ITA 1051/HYD/2013

• Counselvise Citation: 105122514 RSA 2013
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 03-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADAGIRI
• Assessee Lawyers: D SATYANARAYANA
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 1051/HYD/2013 ASSESSMENT YEAR : 2009-10 INCOME-TAX OFFICER, WARD 2, WARANGAL. SRI RAMESH VELDI, H.NO. 16-4-1514,SHIVANAGAR, WARANGAL. PAN AERPV 6720 M (APPELLANT) (RESPONDENT) REVENUE BY SHRI B. YADAGIRI ASSESSEE BY SHRI D. SATYANARAYANA DATE OF HEARING 06-02-2014 DATE OF PRONOUNCEMENT 06-02-2014 O R D E R PER B. RAMAKOTAIAH, A.M.: THIS IS A REVENUE APPEAL AGAINST THE ORDER OF CIT(A )-VI, DATED 20/02/2013. REVENUE IS CONTESTING THAT IN THE ABSEN CE OF PROPER EXPLANATION OF THE UNEXPLAINED CREDITS TO THE TUNE OF RS. 17,23,600/-, THE CIT(A) OUGHT TO HAVE UPHELD SUCH ADDITION MADE BY AO. THERE WAS A DELAY OF 44 DAYS IN FILING THE APPEAL. CONSID ERING THE AFFIDAVIT FILED BY THE AO (ITO, WARD 2, WARANGAL), THE DELA Y IN FILING APPEAL IS CONDONED AND APPEAL IS ADMITTED. 2. BRIEFLY STATED FACTS ARE, ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN FRUITS AND FILED RETURN OF INCOME ON 30.09.2009, FOR THE YEAR UNDER REFERENCE, DECLARING A TAXABLE INCOME OF RS. 1,92,730/-. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, TH E A.O OBSERVED 2 ITA NO. 1051/HYD/2013 SHRI RAMESH VELDI THAT DEPOSITS WERE MADE INTO THE 5B ACCOUNT MAINTAI NED WITH AXIS BANK, WARANGAL AND IN ABSENCE OF PROPER COMPLIANCE/ EXPLANATION FROM THE ASSESSEE, THE ENTIRE CREDITS OF. RS. 34,75,360/- WERE TREATED AS UNEXPLAINED AND ASSESSED THE TOTAL INCOM E AT RS. 36,68,090/-. 3. BEFORE THE CIT(A), THE ASSESSEE OBJECTED TO SUCH ADDITION AND SUBMITTED THAT THE APPELLANT BEING IN THE BUSINESS OF TRADING IN FRUITS, DEPOSITED THE LOCAL SALE PROCEEDS IN CASH, AND THE SALES OUTSIDE WARANGAL WERE RECEIVED IN CHEQUE/DD AND WERE DEPOSI TED INTO THE BANK ACCOUNT MAINTAINED WITH AXIS BANK, 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E AND AFTER OBTAINING A REMAND REPORT FROM ASSESSING OFFICER, T HE LD. CIT(A) DECIDED THE ISSUE AS UNDER: 4.4 PERUSED THE SUBMISSIONS OF THE APPELLANT WITH REFERENCE TO THE OBSERVATIONS OF THE A.A IN THE ASSESSMENT OR DER AS WELL AS THE REMAND REPORT. AS COULD BE SEEN FROM TH E FACTS OF THE CASE, THE APPELLANT IS ENGAGED IN THE BUSINE SS OF TRADING IN FRUITS AND FOR THE YEAR UNDER REFERENCE. THE TOTAL TURNOVER WAS SHOWN AT RS. 45,92,684/-, OUT OF WHICH RS. 9,84,400/- REPRESENTING SALES THROUGH CHEQUES AND B ALANCE OF RS. 36,08,284/-, AS THE CASH SALES. IN THIS BACK GROUND, THE CREDITS OF RS. 34,75,360/-, MADE IN TO AXIS BAN K WERE REQUIRED TO BE EXAMINED WITH REFERENCE TO THEIR SOU RCES, AS THE SAME WERE TREATED AS UNEXPLAINED CREDITS BY THE AO IN ASSESSMENT ORDER, FOR LACK OF NEEDED INFORMATION. THE CREDITS BY CHEQUE/BANK DRAFTS AMOU NTING TO RS. 17,51,760/-, AND WERE EXPLAINED THROUGH THE SAL ES OF RS. 9,84,400/- BY CHEQUES OR DDS AND OTHER CREDITS, AS PER THE AO'S REPORT, WHO STATED TO HAVE EXAMINED THE BOOKS. THE ISSUE REMAINS TO BE FURTHER EXAMINED IS THE SOURCES FOR THE CASH CREDITS OF RS. 17,23,600/-, WHICH WERE EXPLAIN ED THROUGH THE CASH SALES MADE BY THE ASSESSEE DURING THE YEAR, THAT HAVE BEEN QUANTIFIED AT RS. 36,08,284/-. THE OBSERVATIONS OF THE A.O, TO SAY THAT VOUCHERS ARE N OT MATCHING WITH BOOKS, MAY NOT BE FULLY RELEVANT, SIN CE THE BOOKS WERE AUDITED, AND THE CASH SALES RECORDED ARE MORE THAN THE CASH CREDITS INTO THE BANK ACCOUNT. THE RE LEVANCE OF THE BANK ACCOUNT UNDER REFERENCE, IN THE BOOKS OF T HE ACCOUNTS ALSO CANNOT BE BRUSHED ASIDE, SINCE THE BA NK 3 ITA NO. 1051/HYD/2013 SHRI RAMESH VELDI BALANCES AS REFLECTED IN BANK ACCOUNT AND THE BANK BALANCES AS SHOWN IN BALANCE SHEET OF THE APPELLANT ARE ONE AND THE SAME. SINCE THE INCORPORATION OF BANK TRANSACTIONS IN THE BOOKS IS ESTABLISHED, THE SALES OF THE BUSINESS AND ENTRIES IN BANK ACCOUNTS GETS INTEGRATED. SINCE THE CASH SALES ARE MORE THAN THE CASH CREDITS, AND WITH NO ANOMALY POINTED AS REGARD TO THE CASH ENTRI ES IN CASH BOOK AND THE BANK CREDITS, THE CASH DEPOSITS I N THE BANK ACCOUNT (RS. 17,23,600/-) STAND EXPLAINED. ON THESE FACTS, IT CAN BE HELD THAT THE CREDITS INTO BANK AC COUNT, STAND ESTABLISHED AND EXPLAINED. ACCORDINGLY, THE A DDITION OF RS. 34,75,360/-, ON ACCOUNT OF TREATING THE ENTIRE CREDITS INTO BANK ACCOUNT, AS UNEXPLAINED CREDITS, IS NOT SUSTAI NABLE SINCE THE ENTRIES BY CHEQUES/BANK DRAFTS AS WELL AS THE CASH ENTRIES, INTO THE BANK ACCOUNT, AT AXIS BANK, WARAN GAL, STAND EXPLAINED. HENCE, THIS GROUND OF APPEAL IS TREATED AS ALLOWED. 5. ON CONSIDERING THE RIVAL CONTENTIONS, WE DO NOT SEE ANY MERIT IN THE GROUND RAISED BY REVENUE. OBVIOUSLY, ALL THE DE POSITS IN THE BANK ACCOUNT HAVE FLOWN FROM BUSINESS AND VERIFIABLE ON THE BASIS OF BOOKS OF ACCOUNT. AT THE TIME OF ASSESSMENT, THE AO CONSI DERED THE AMOUNT AS UNEXPLAINED AS ASSESSEE DID NOT REPLY. THE ASSES SMENT WAS COMPLETED U/S 144. BEFORE CIT(A), THE DETAILS WERE FURNISHED AND A REMAND WAS CALLED FOR. SINCE, THE FACTS ARE VERIFIE D BY THE LD. CIT(A), WE DO NOT SEE ANY REASON TO INTERFERE, AS REVENUE H AS NOT BROUGHT ANYTHING ON RECORD TO DIFFER FROM THE FINDINGS. THE GROUND TAKEN BY THE REVENUE IS REJECTED. 6. IN THE RESULT, REVENUE APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 6TH FEBRUARY, 201 4. SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH ) VICE PRESIDENT ACCO UNTANT MEMBER HYDERABAD, DATED: 6TH FEBRUARY, 2014 BVS 4 ITA NO. 1051/HYD/2013 SHRI RAMESH VELDI COPY TO:- 1) ITO, WARD 2, AAYAKAR BHAVAN, STATION ROAD, WAR ANGAL. 2) SHRI RAMESH VELDI, H.NO. 16-4-1514, SHIVANAGAR, WARANGAL. 3) CIT(A)-VI, HYDERABAD. 4) CIT-VI, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.