Sri Thota Sai Vamsee Krishna, Hyderabad V. ITO, Ward-12(3), Hyderabad

ITA 1089/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74759 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 23-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K HARITA
• Assessee Lawyers: CHAITANYA KUM
• Keywords: Unexplained cash credit; Salary income
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1089/HYD/2013 ASSESSMENT YEAR 2008-09. SRI THOTA SAI VAMSEE KRISHNA, -V- IT O, WARD-12(3) HYDERABAD. HYDERABAD. PAN:AEEPT8596G (APPELLANT) (RESPONDENT) APPELLANT BY SHRI CHAITANYA KUM AR RESPONDENT BY SMT. K. HARITA DATE OF HEARING 12-02-2014 DATE OF PRONOUNCEMENT 21-03-2014 ORDER PER SAKTIJIT DEY, J.M: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 22-4-2013 OF CIT (A) PASSED IN ITA NO.0112/CIT(A)-II , HYDERABAD/2010- 11 PERTAINING TO ASSESSMENT YEAR 2008-09. 2 . THE ONLY ISSUE IN THE AFORESAID APPEAL OF THE ASSESSE E IS WITH REGARD TO THE ADDITION OF AN AMOUNT OF RS.20,40,000/- A S UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 3. BRIEFLY STATED, THE ASSESSEE IS AN INDIVIDUAL. THE ASSESSEE DERIVED INCOME FROM SALARY BEING AN EMPLOYEE OF M/S. ING VYSYA LIFE 2 ITA NO.1089 OF 2013 THOTA SAI VAMSEE KRISHNA, HYD. INSURANCE COMPANY. FOR THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE FLED RETURN OF INCOME ON 29-7-2008 ADMITTING TOTAL IN COME OF RS.4,58,977/-. DURING SCRUTINY ASSESSMENT PROCEEDI NGS, THE ASSESSING OFFICER NOTICING CASH DEPOSITS OF RS.18,24,000/- IN HI S BANK ACCOUNT CALLED UPON THE ASSESSEE TO FURNISH THE BANK STATEMEN T FOR THE FINANCIAL YEAR 2007-08 ALONG WITH SOURCES OF SUCH CASH DEPOSIT. THE ASSESSEE SUBMITTED THAT THE CASH DEPOSITS MADE INTO THE BANK A CCOUNT BELONGED TO CUSTOMERS TOWARDS PAYMENT OF INSURANCE PREMIA AND T HE SAME HAS BEEN ROUTED THROUGH HIS ACCOUNT BEFORE PURCHASING THE POLICIES. AS OBSERVED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IN ABSENCE OF PROPER EXPLANATION BY THE ASSESSEE TO SUBSTANTIATE HIS CLAIM THAT THE DEPOSITS IN THE BANK ACCOUNTS ACTUALLY BELONG TO THE C USTOMERS AND HAS BEEN REINVESTED FOR PURCHASE OF INSURANCE POLICIES, TH E ASSESSING OFFICER PROCEEDED TO TREAT THE DEPOSITS AMOUNTING TO RS. 20,40,000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT AND ADDED IT TO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED OF SUCH ADDITION, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A). THE CIT (A) ALSO CONFIR MED THE ADDITION BY HOLDING AS UNDER:- 7. IT MAY BE NOTED THAT DURING THE ASSESSMENT PROCE EDINGS THE APPELLANT DID NOT FILE ANY DETAILS OF THE CASH CRED ITS APPEARING IN HIS BANK ACCOUNTS. EVEN THOUGH DURING THE APPEAL PROCE EDINGS THE APPELLANT HAS SUBMITTED THAT THE MONIES DEPOSITED I N HIS BANK ACCOUNT ARE ACTUALLY THE CASH RECEIVED FROM THE CUS TOMERS AND THE SAME WAS USED FOR THE PURCHASE OF DDS TOWARDS THE I NSURANCE POLICIES IN THE NAMES OF HIS CUSTOMERS, HE DID NOT FILE ANY CONFIRMATIONS FROM THE PERSONS CONCERNED NEITHER BE FORE ME NOR BEFORE THE ASSESSING OFFICER DURING THE REMAND PROC EEDINGS. IN FACT, AFTER FORWARDING THE REMAND REPORT TO THE APPELLANT VIDE LETTER 3 ITA NO.1089 OF 2013 THOTA SAI VAMSEE KRISHNA, HYD. DATED 22-1-2013, ANOTHER FINAL OPPORTUNITY WAS ALSO ACCORDED TO HIM VIDE LETTER DATED 5-3-2013, HOWEVER, HE CHOSE NOT T O COMPLY OR EXPLAIN HIS CASE. AS POINTED OUT BY THE ASSESSING OFFICER THE ICICI PRUDENTIAL LIFE AND ING VYSYA LIFE INSURANCE HAVE N OT CONFIRMED THE CONTENTION OF THE APPELLANT. UNDER THESE CIRCUMSTA NCES, I JAM CONSTRAINED TO CONFIRM THE ADDITION MADE BY T HE AS SESSING OFFICER AND ACCORDINGLY THE APPEAL IS DISMISSED. 4. THE LEARNED AR REITERATING HIS STAND TAKEN BEFORE THE REVENUE AUTHORITIES SUBMITTED BEFORE US THAT THE CASH DEPOSITS IN FACT WERE THE PREMIUM AMOUNTS RECEIVED FROM THE CUSTOMERS AND SUBSE QUENTLY THE PREMIUM AMOUNTS WERE PAID BY PURCHASING DDS. TO SUBS TANTIATE HIS CLAIM, THE LEARNED AR REFERRED TO THE BANK STATEMENT AND SUBMITTED THAT IMMEDIATELY AFTER THE AMOUNTS WERE DEPOSITED INT O HIS BANK ACCOUNTS, THE SAME WERE WITHDRAWN AND THE DDS WERE P URCHASED TOWARDS DEPOSITS OF PREMIUM . 5. THE LEARNED DR THOUGH SUPPORTED THE ORDERS OF THE A SSESSING OFFICER AS WELL AS THE CIT (A) BUT AT THE SAME TIME SUBMITTED THAT THE MATTER CAN BE VERIFIED BY THE ASSESSING OFFICER AGA IN. 6. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS OTHER MATERIAL ON RECORD. IT I S THE CONTENTION OF THE ASSESSEE ALTHOUGH THAT THE CASH DEPOSITS IN THE B ANK ACCOUNTS REPRESENT THE PREMIUM AMOUNTS OF CUSTOMERS AND IMMED IATELY AFTER THE DEPOSIT OF THE SAID AMOUNT INTO THE BANK ACCOUNT, T HE SAME WERE WITHDRAWN AND DDS WERE PURCHASED IN FAVOUR OF M/S. IN G VYSYA LIFE INSURANCE COMPANY IN RESPECT OF PREMIA OF RESPECTIVE CUSTOMERS. IN THIS CONTEXT, THE LEARNED AR REFERRED TO CERTAIN CASH DEPOSITS IN THE BANK ACCOUNT AND WITHDRAWALS MADE IMMEDIATELY THEREA FTER TO 4 ITA NO.1089 OF 2013 THOTA SAI VAMSEE KRISHNA, HYD. SUBSTANTIATE ITS CLAIM THAT THE AMOUNTS DEPOSITED BE LONGED TO CUSTOMERS FOR THE PURPOSE OF PAYMENT TO INSURANCE PREMIU MS. HAVING CONSIDERED THE SUBMISSION OF THE LEARNED AR VIS-V-VIS THE BANK STATEMENTS AND OTHER MATERIALS ON RECORD, WE ARE OF TH E VIEW THAT THE ASSESSEE DESERVES AN OPPORTUNITY TO EXPLAIN THE CASH DEPOSITS MADE IN THE BANK ACCOUNT BY RECONCILING THEM WITH THE PREMIUM CLAIMED TO HAVE BEEN PAID OUT OF THOSE AMOUNTS BY PURCHASING DDS. FOR THIS PURPOSE, WE REMIT THIS ISSUE BACK TO THE FILE OF THE A SSESSING OFFICER WHO SHALL CONSIDER THE SAME AFTER TAKING INTO CONSIDERA TION ALL THE FACTS AND MATERIALS ON RECORD AND AFFORDING A REASONABLE OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 21 -03-2014 . S D / - (CHANDRA POOJARI) ACCOUNTANT MEMBER S D / - (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 21 ST MARCH, 2014. JMR* COPY TO:- 1) SRI THOTA SAI VAMSEE KRISHNA, 74 HIG, BHEL, RAMACHANDRAPURAM, HYDERABAD. 2) ITO, WARD 12(3), HYDERABAD. 3) CIT(A)-II, HYDERABAD. 4) CIT-I, HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D. 5 ITA NO.1089 OF 2013 THOTA SAI VAMSEE KRISHNA, HYD.