Shankar Reddy Saddi, Hyd, Hyderabad V. ITO, Ward-11(3), Hyd, Hyderabad

ITA 1153/HYD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5985 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 11-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Assessee Lawyers: P RAVI SESHAGIRI RAO
• Keywords: Unexplained expenditure; Salary income
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.1153/HYD/2015 ASSESSMENT YEAR 2009-2010 MR. SHANKAR REDDY SADDI, HYDERABAD. PAN AVLPS9081K VS. THE INCOME TAX OFFICER, WARD-11(3), HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. P. RAVISESHAGIRI RAO FOR REVENUE : MR. M. SITARAM DATE OF HEARING : 2 3 .02.2016 DATE OF PRONOUNCEMENT : 04 .0 3 .2016 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y. 2009- 2010. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE LD. CIT(A)-5, HYDERABAD DATED 18.06.20 15 IN CONFIRMING THE ADDITION MADE BY THE A.O. OF (I) RS.2,28,950 (II) ESTIMATION OF THE PROFIT OF RS.3,5 3,445 ON THE BASIS OF CREDITS IN THE BANK ACCOUNTS, AND (III ) ADDITION OF RS.3,58,133 OUT OF RS.6,48,859, TREATING THE TRANSACTIONS THROUGH CREDIT CARDS AS UNEXPLAINED EXPENDITURE. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL WHO IS ENGAGED IN THE BUSINESS OF SAL E OF 2 ITA.NO.1153/HYD/2015 MR. SHANKAR REDDY SADDI, HYDERABAD. PUMP SETS ON COMMISSION BASIS. HE FILED HIS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR 2009-2010 O N 21.08.2009 DECLARING THE TAXABLE INCOME OF RS.1,99, 492. DURING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143 (3) OF THE I.T. ACT, THE ASSESSEE WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNT, CASH FLOW STATEMENTS, CREDIT/DEBI T RECEIPTS AND SOURCE OF INCOME. BUT THE ASSESSEE DID NOT APPEAR NOR DID HE PRODUCE ANY INFORMATION AS CALLED FOR AND THEREFORE, THE A.O. COMPLETED THE ASSESSMENT UN DER SECTION 144 OF THE I.T. ACT BY MAKING VARIOUS ADDIT IONS. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO PARTLY ALLOWED THE SAME. AGAINST THE CONFIRMATION OF SOME OF THE ADDITIONS, THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 3. AS REGARDS THE FIRST ADDITION OF RS.2,28,950 CONFIRMED BY THE LD. CIT(A), THE LD. COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE ASSESSEE WAS AN EMPLOYE E OF M/S. VARUN SALES CORPORATION AND WAS IN RECEIPT OF SALARY OF RS.1,44,000 DURING THE YEAR UNDER CONSIDERATION AND FROM THE BANK ACCOUNT OF THE ASSESSEE MAINTAINED WI TH THE ICICI BANK, THE A.O. OBSERVED THAT THERE WERE DEPOSITS IN REGULAR MONTHLY FASHION AT RS.28,250 FO R THE FIRST TWO MONTHS AND RS.31,625 FOR THE NEXT TEN MON THS AND THEREFORE, THE A.O. HAS TREATED THE TOTAL OF TH ESE DEPOSITS I.E., RS.3,72,950 AS SALARY INCOME OF THE ASSESSEE AND AFTER REDUCING THE DECLARED SALARY INCOME OF RS.1,44,000, THE BALANCE OF RS.2,28,950 WAS BROUGHT TO TAX. DURING THE COURSE OF APPEAL PROCEEDINGS, THE 3 ITA.NO.1153/HYD/2015 MR. SHANKAR REDDY SADDI, HYDERABAD. ASSESSEE FURNISHED COPIES OF THE BANK ACCOUNTS HELD BY HIM AT CORPORATION BANK, ICICI BANK AND STATE BANK OF INDIA AND STATED THAT THE AMOUNT WAS PAID FROM SBI, MARKET STREET BRANCH TO CORPORATION BANK AND ICICI BANK AND THUS THE ADDITION OF RS.2,28,950 DOES NOT REPRESENT SALARY. THE LD. CIT(A) HOWEVER, OBSERVED THAT THE INFORMATION BROUGHT ON RECORD DOES INDICATE THA T THE ASSESSEE HAS MAINTAINED ACCOUNTS WITH THREE BANKS V IZ., ICICI BANK, CORPORATION BANK AND STATE BANK OF INDI A AND THAT THERE WERE FEW CREDITS IN ICICI BANK AND S BI WHICH WERE RECURRING IN THE NATURE AND IN THE SAME AMOUNTS WHICH WERE TREATED AS SALARY RECEIVED BY TH E ASSESSEE FOR THE YEAR. HE ALSO OBSERVED THAT THOUGH THERE WERE TRANSFER ENTRIES IN THE ACCOUNT OF THE ASSESSE E WITH SBI, ASSESSEE COULD NOT EXPLAIN THE SOURCE FOR CRED ITS INTO THE SAID ACCOUNT WITH SBI AND THUS HE ACCEPTED THE ADDITION AS UNEXPLAINED INCOME OF THE ASSESSEE. 4. AT THE TIME OF HEARING BEFORE US, LD. COUNSEL FOR THE ASSESSEE, WHILE REITERATING THE ABOVE SUBMI SSIONS BEFORE THE LD. CIT(A), HAS DRAWN OUR ATTENTION TO B ANK ACCOUNT STATEMENTS OF ICICI BANK AND ANDHRA BANK TO DEMONSTRATE THAT THERE WERE CREDITS FROM THE SBI AC COUNT TO THE ICICI BANK ACCOUNT BY CHEQUE. FURTHER, WE FI ND THAT THERE WERE CASH DEPOSITS IN THE ICICI BANK ACC OUNT ALSO WHICH HAS NOT BEEN EXPLAINED BY THE ASSESSEE N OR HAS IT BEEN ENQUIRED BY THE A.O. OR THE LD. CIT(A) AFTER GIVING THE ASSESSEE AN OPPORTUNITY TO EXPLAIN THESE CREDITS. THEREFORE, WE DEEM IT FIT AND PROPER TO RE MIT THIS 4 ITA.NO.1153/HYD/2015 MR. SHANKAR REDDY SADDI, HYDERABAD. ISSUE TO THE FILE OF THE A.O. FOR RECONSIDERATION A FTER GIVING THE ASSESSEE A FAIR OPPORTUNITY OF HEARING. 5. AS REGARDS THE OTHER ADDITION I.E., ESTIMATION OF PROFIT OF RS.3,53,445 ON THE BASIS OF THE CREDITS I N THE BANK ACCOUNTS AND ALSO OF RS.3,58,133 ON ACCOUNT OF TRANSACTION OF CREDIT CARDS ALSO, WE FIND THAT THE ASSESSEE NEEDS TO EXPLAIN THE NATURE OF THE CREDITS INTO THE BANK ACCOUNT AND WHETHER THEY ARE IN THE NATURE OF INCOM E OF THE ASSESSEE AND ALSO THE NATURE OF EXPENDITURE INC URRED THROUGH CREDIT CARDS. THEREFORE, IN THE INTEREST OF JUSTICE, THESE TWO ADDITIONS ARE ALSO SET ASIDE TO THE FILE OF THE A.O. FOR DENOVO CONSIDERATION. NEEDLESS TO MENTION THAT ASSESSEE SHALL BE GIVEN A FAIR OPPORTUNITY OF HEARI NG. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 04.03.2016 SD/- SD/- (B. RAMAKOTAIAH) (SMT. P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 04 TH MARCH, 2016 VBP/- COPY TO 1. MR. SHANKAR REDDY SADDI, HYDERABAD. C/O. MR. S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYA S ELEGANCE, 3-6-643, STREET NO.9, HIMAYATNAGAR, HYDER ABAD 500 029. 2. THE INCOME TAX OFFICER, WARD-11(3), HYDERABAD. 3. CIT(A)-5, I.T. TOWERS, 6 TH FLOOR, A-BLOCK, A.C. GUARDS, HYDERABAD. 4. PR. CIT-5, HYDERABAD. 5. D.R. ITAT A BENCH, HYDERABAD 6. GUARD FILE.