The ITO, Vakkapatlavani Palem V. Sunitha Simhadri, Visakhapatnam

ITA 109/VIZ/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6480 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 01-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K C DAS
• Keywords: Unexplained investment

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI D.MANMOHAN, VICE PRESIDENT & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO . 10 9 / VIZ / 201 5 ( / ASSESSMENT YEAR: 20 1 1 - 1 2 ) THE ITO, WARD - 4(2) 3 RD FLOOR, MVP COLONY VISAKHAPATNAM VS. SMT. SUNITHA SIMHADRI D.NO.48 - 8 - 18, DWARAKA NAGAR VISAKHAPATNAM ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI K.C.DAS, DR / RESPONDENT BY : SHRI G.V.N.HARI, AR / DATE OF HEARING : 0 7 . 1 2 .2017 / DATE OF PRONOUNCEMENT : 08 . 1 2 .2017 / O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER : 1 . TH IS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) [CIT(A)] - 1 , VI S A KHAPATNAM VIDE ITA NO.1 232 /2013 - 14/ ITO W - 1(4) VSP/201 4 - 1 5 DATED 27 .0 1 .201 5 FOR THE A.Y. 20 1 1 - 1 2 . 2 ITA NO . 10 9 /VIZ/201 5 SMT. SUNITHA SIMHADRI , VISAKHAPATNAM 2 . ALL THE GROUNDS OF APPEAL ARE RELATED TO THE ADDITION OF RS. 2,15,70,073/ - RELATING TO THE CASH DEPOSITS MADE IN THE BANK ACCOUNT. DURING THE ASSESSMENT PROCEEDINGS THE A SSESSING O FFICER(AO) FOUND THAT THE ASSESSEE MADE CASH DEPOSITS OF RS.2,15,70,073/ - IN SAVINGS BANK ACCOUNT MAINTAINED WITH CORPORATION BANK, VISAKHAPATNAM VIDE ACCOUNT NO.SB/011006556. THE ASSESSEE EXPLAINED BEFORE THE AO THAT THE ASSESSEE MADE CASH DEPO SITS OUT OF CIRCULATION OF CASH DRAWN FROM M/S SIMHADRI CONSTRUCTIONS P. LTD. AND HER HUSBAND SHRI S. SAIJI RAO. THE ASSESSEE EXPLAINED THAT DUE TO FINANCIAL CRUNCH, THE CHEQUES WERE ISSUED IN THE NAME OF S.SAIJI RAO AND SIMHADRI CONSTRUCTIONS PVT. LTD., A ND THE CASH WAS WITHDRAWN AND DEPOSITED IN THE BANK ACCOUNT TO MAINTAIN THE LIMITS OF THE BANK. NOT BEING CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, THE AO MADE THE ADDITION OF RS.2,15,70,073/ - AS UNEXPLAINED INVESTMENT AND BROUGHT TO TAX. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEF ORE THE CIT(A) AND THE LD.CIT(A ) EXAMINED THE ASSESSEES CLAIM WITH REFERENCE TO THE BANK STATEMENTS AND OBSERVED THAT THE CASH DEPOSITS IN THE ASSESSEES ACCOUNT PRECEDED BY ISSUE OF CHEQU ES IN FAVOUR OF SIMHADRI SAIJI RAO AND M/S SIMHADRI SAIJI CONSTRUCTIONS PVT. LTD AND IN SOME INSTANCES IN 3 ITA NO . 10 9 /VIZ/201 5 SMT. SUNITHA SIMHADRI , VISAKHAPATNAM FAVOUR OF K.SATYANARAYANA. THESE CHEQUES WERE DISCOUNTED BY THESE PARTIES WITH THE ABOVE REFERRED BANKS, A FEW DAYS PRIOR TO THE DATE OF DEBIT OF TH ESE CHEQUES IN THE ASSESSEES BANK ACCOUNT. THE CHEQUES WERE DISCOUNTED AND THE PROCEEDS CREDITED INTO THE INDIAN BANK ACCOUNTS OF MR.SIMHADRI SAIJI RAO, K.SATYANARAYANA AND M/S SIMHADRI CONSTRUCITONS PVT. LTD AND ALSO IN THE TAMIL NADU MERCANTILE BANK HE LD BY M/S SIMHADRI SAIJI CONSTRUCTIONS P.LTD. AND DEPOSITED THE SAME IN THE A SSESSEES BANK ACCOUNT. THE CIT(A) OBSERVED THE THERE WAS A DEFINITE PATTERN AND FLOW OF FUNDS AS CLAIMED BY THE ASSESSEE AND ACCORDINGLY ACCEPTED THE EXPLANATION OF THE ASSESSEE AND ALLOWED THE APPEAL OF THE ASSESSEE. THE LD.CIT(A) FOUND THE DIFFERENCE OF A SUM OF RS.1,41,000/ - IN THE AGGREGATE CASH DEPOSITS OF THE BANK AND DISCOUNTED CHEQUES AND CONFIRMED THE ADDITION OF RS.1,41,000/ - AND DELETED THE BALANCE AMOUNT. 4. AGGRIE VED BY THE ORDER OF THE LD.CIT(A), THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. THE AO MADE THE ADDITION BECAUSE NO EXPLANATION WAS FURNISHED BY THE ASSESSEE AND THE ASSESSEE FAILED TO FURNISH ANY PROOF WITH REGARD TO 4 ITA NO . 10 9 /VIZ/201 5 SMT. SUNITHA SIMHADRI , VISAKHAPATNAM THE DEPOSITS MADE IN THE ASSESSEES BANK ACCOUNT AND THE WITHDRAWALS MADE FROM THE ACCOUNTS OF SIMHADRI SAIJI RAO AND SIMHADRI CONSTRUCTIONS PVT. LTD. THE ASSESSEE ALSO FAILED TO FURNISH EVIDENCE WITH REGARD TO THE RECEIPT OF S A ME CASH FROM THE ABOVE PARTIES. WHEREAS THE LD.CIT(A), HAS GIVEN A FINDING THAT THE DEPOSITS WERE MADE OUT OF THE WITHDRAWALS MADE BY SIMHADRI SAIJI RAO, K SATYANARAYANA AND SIMHADRI CONSTRUCTIONS PVT. LTD. , ON THE BASIS OF EVIDENCES PLACED BEFORE HIM. THE CIT(A) HAS NEITHER CALLED FOR THE REMAND REPORT NOR GIVEN AN OPPORTUNITY TO THE AO TO FIND OUT THE FACTS. H ENCE THIS ISSUE NEEDS FURTHER VERIFICATION AT THE END OF THE AO TO VERIFY THE WITHDRAWALS MADE BY S IMHADRI SAIJI RAO, SIMHADRI C O NSTRUCT I ONS AND K.SATYANARAYANA VIS - - VIS DEPOSITS MADE IN THE ASSESSEES ACCOUNT. THEREFORE WE ARE OF THE CONSIDERED OPINION THAT T HE AO SHOULD VERIFY BANK ACCOUNT S OF THE PARTIES AND DECIDE THE IS SUE AFRESH ON MERITS. ACCO RDINGLY WE REMIT THE MATTER BACK TO THE FILE OF THE AO TO DECIDE THE ISSUE AFRESH ON MERITS. 5 ITA NO . 10 9 /VIZ/201 5 SMT. SUNITHA SIMHADRI , VISAKHAPATNAM 6. IN THE RESULT, APPEAL OF THE R EVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 8 TH DEC 2017. SD/ - SD/ - ( . ) ( . . ) ( D. MANMOHAN ) ( D.S. SUNDER SINGH ) / VICE PRESIDENT / ACCOUNTANT MEMBER / VISAKHAPATNAM /DATED : 08 .12.2017 L. RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE APPELLANT - THE ITO, WARD - 4(2), 3 RD FLOOR, MVP COLONY VISAKHAPATNAM 2 . / THE RESPONDENT SMT. SUNITHA SIMHADRI, D.NO.48 - 8 - 18, DWARAKA NAGAR, VISAKHAPATNAM 3. THECOMMISSIONER OF INCOME TAX - 1 , VI SAKHAPATNAM 4 . THE COMMISSIONER OF INCOME TAX (APPEALS) - 1, 2 (I/C) VI SAKHAPATNAM AND RAJAHMUNDRY 5 . , , / DR , ITAT , VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT , VISAKHAPATNAM