Manpreet Kaur, Hyd, Hyderabad V. ITO, Ward-5(2),Hyd, Hyderabad

ITA 1181/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2293 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 07-12-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 09-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K J DIVYA
• Assessee Lawyers: B SHANTHI KUMAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1181/HYD/2016 ASSESSMENT YEAR: 2011-12 SMT. MANPREET KAUR, HYDERABAD [PAN: BGWPK1935M] VS THE INCOME TAX OFFICER, WARD-5(2), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI B. SHANTHI KUMAR, AR FOR REVENUE : MS. K.J. DIVYA, DR DATE OF HEARING : 07-12-2017 DATE OF PRONOUNCEMENT : 20-12-2017 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-4, HYDERABAD, DATED 24-06-2016, FOR THE AY. 2011-12. THE GROUNDS RAISED BY ASSESSEE ARE AS UNDER: 1. THE CIT(APPEALS) ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING ADDITION TO THE EXTENT OF RS. 8,38,000/- OUT OF ADDITION OF RS. 12,78,000/-. 2. THE CIT(APPEALS) OUGHT TO HAVE ACCEPTED ASSESSEE S EXPLANATION FOR THE SOURCES OF ENTIRE DEPOSITS INTO THE BANK AND DELETE D THE ADDITION OF RS. 12,78,000/- INSTEAD OF CONFIRMING ADDITION TO THE T UNE OF RS. 8,38,000/-. GROUND NO. 3 IS GENERAL IN NATURE. 2. BRIEFLY STATED, ASSESSEE IS AN INDIVIDUAL AND HAS INCOME FROM DEPOSITS BY WAY OF INTERESTS. DURING THE YEAR, THE ASS ESSING OFFICER (AO) NOTICED THAT ASSESSEE HAD DEPOSITS IN BANK ACCOUNT AND ON GETTING EXPLANATION, TREATED THE FOLLOWING DEPOSITS AS U NEXPLAINED. I.T.A. NO. 1181/HYD/2016 :- 2 - : SL.NO. PARTICULARS DATE AMOUNT (RS.) 1 CASH DEPOSIT 12.06.2010 2,00,000 2 CASH DEPOSIT 14.06.2010 1,70,000 3 CASH DEPOSIT 26.07.2010 90,000 4 CASH DEPOSIT 09.09.2010 1,50,000 5 CASH DEPO SIT 01.10.2010 1,00,000 6 CASH DEPOSIT 23.10.2010 48,000 7 CASH DEPOSIT 09.12.2010 5,00,000 8 CASH DEPOSIT 18.03.2011 20,000 TOTAL: 12,78,000 2.1. IT WAS THE EXPLANATION OF ASSESSEE THAT THE DEPOSITS ARE EARLIER WITHDRAWALS AND RETURN OF ADVANCES ON WHICH I NTEREST WAS OFFERED PARTLY IN LAST YEAR AND PARTLY IN THE YEAR. AO DID NOT ACCEPT THE EXPLANATION. 3. BEFORE THE LD.CIT(A), ASSESSEE EXPLAINED AS UNDER : 4. THE APPELLANT CONTENDS THAT THE AO IS NOT JUSTI FIED IN REJECTING THE EXPLANATION WITHOUT CONSIDERING THE FULL FACTS OF T HE CASE. THIS IS BECAUSE- (A) NO REASON IS MENTIONED FOR REJECTING THE AVAILABILI TY OF OPENING CASH BALANCE OF RS. 79,517/- (B) WHEN IT WAS SUBMITTED THAT THE LOANS AMOUNTING TO RS. 5,85,000/- GIVEN ON INTEREST WAS RECEIVED BACK AND THAT THE LO ANS BEING PETTY IN NATURE THEREFORE THE NAMES AND ADDRESSES COULD N OT BE GIVEN, THE AO IS NOT JUSTIFIED IN GIVING CREDIT. ON THIS VERY AMOUNT INTEREST OF RS. 1,16,400/- WAS DISCLOSED IN THE PRECEDING YEAR AND INTEREST OF RS. 58,150/- IS DISCLOSED IN THIS YEAR. (C) WITHOUT MENTIONING ANYTHING IN THE ASSESSMENT ORDER , THE AO REJECTED THE EXPLANATION THAT THE APPELLANT HAD WIT HDRAWN RS. 7,40,000/- FROM THE SAME ACCOUNT. AS THIS REMAINED UNUTILIZED, WAS AVAILABLE FOR DEPOSITING IN THE BANK. THIS CLAIM IS SUPPORTED BY THE DECISION OF ITAT, HYDERABAD BENCH 'A' IN ITA NO.469 /HYD/2014 DT. 27-03-2015 IN THE CASE OF C. VAMSI MOHAN VS. ITO, W ARD-1, NANDYAL. IN THE LIGHT OF THE ABOVE FACTS AND JUDICIAL PRONOU NCEMENT, THE APPELLANT PRAYS FOR DELETING THE ADDITION OF RS. 12,78,000/- AND OBLIGE. I.T.A. NO. 1181/HYD/2016 :- 3 - : 4. LD.CIT(A) HAS CONSIDERED AND DECIDED THE ISSUE AS UNDER: 6. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R AND THE SUBMISSIONS OF THE APPELLANT. DURING THE COURSE OF APPEAL PROCEEDINGS, THE CASH FLOW STATEMENT WAS SUBMITTED BY THE APPELLANT. ON VERIFICATION OF THE CASH FLOW STATEMENT, IT IS OBSERVED THAT THERE IS C ASH DEPOSITS OF RS. 80,000/- ON 04-06-2010, RS. 2,00,000/- ON 12-06-201 0 AND RS. 1,70,000/- ON 14-06-2010, TOTALING TO RS. 4,50,000/ -. FOR WHICH THERE IS NO SOURCES EXPLAINED BY THE APPELLANT. THEREFORE, T HE ADDITION OF RS. 4,50,000/- CONFIRMED. HOWEVER, THIS AMOUNT WAS AVAI LABLE AS CASH AND NEXT ON 14-06-2010, THERE IS FIXED DEPOSIT OF RS. 4 ,00,000/- WHICH NEEDS TO BE TREATED AS EXPLAINED. AGAIN THERE ARE CASH BA LANCES ON 26-07-2010 OF RS. 90,000/-, ON 09-09-2010 OF RS. 1,50,000/-, O N 01-10-2010 OF RS. 1,00,000/- AND ON 23-10-2010 OF RS. 48,000/- TOTALL ING TO RS. 3,88,000/-. THESE AMOUNTS TO BE TREATED AS NOT EXPLAINED, THERE FORE TO BE CONFIRMED. 7. THE CASH WITHDRAWAL SHOWN IN THE STATEMENT ON 01 -10-2010, OF RS. 2,00,000/-, THE APPELLANT EXPLAINED IT AS BANK LOAN, THEREFORE THE SAME IS CONSIDERED AS EXPLAINED. ON 02-12-2010 THER E IS DEPOSITS OF RS. 4,01,578/-, FOR WHICH THE APPELLANT EXPLAINED THAT THE SAID AMOUNT WAS RECEIVED ON CLOSING OF EARLIER FD MADE ALONG WITH I NTEREST OF RS. 4,00,000/-. HENCE, THIS AMOUNT TO BE CONSIDERED AS EXPLAINED. 5. IT WAS THE CONTENTION OF LD. COUNSEL THAT LD.CIT(A) SHOULD HAVE ACCEPTED ASSESSEES CONTENTIONS, BUT WRONGLY CONF IRMED THE AMOUNT TO AN EXTENT OF RS. 8,38,000/-, WHEREAS AN AMOU NT OF RS. 10,00,000/- WAS TREATED AS EXPLAINED. 6. LD.DR RELIED ON THE ORDERS. 7. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND EXAMINE D THE STATEMENT OF AFFAIRS AND BANK STATEMENT PLACED ON RECORD. THE ORDER OF LD.CIT(A) IS PARTLY CORRECT AND PARTLY MISLEA DING ON FACTS. WHILE ACCEPTING THE AMOUNT OF DEPOSITS AT RS. 4,50,000/ - UPTO 14-06-2010, LD.CIT(A) CONSIDERED A DEPOSIT OF RS. 8 0,000/- ON 04-06-2010. THERE IS NO SUCH DEPOSIT ON THAT DAY. E VEN THE AOS DEPOSITS LISTED IN THE ORDER STARTS FROM 12-06-2010, AS FIRST CASH I.T.A. NO. 1181/HYD/2016 :- 4 - : DEPOSIT WHICH IS VERIFIABLE FROM BANK STATEMENT AS WELL . THEREFORE, WITHOUT RELYING FULLY ON THE ORDER OF LD.CIT(A), TH E ISSUE IS RECONSIDERED AS UNDER: A) THE FIRST SET OF DEPOSITS TO THE TUNE OF RS. 3,70,000/- WAS ON 12-06-2010 & 14-06-2010 FOR WHICH ASSESSEE DREW AN AMOUNT OF RS. 3,20,000/- ON 05-04-2010 AND 08-04-201 0. ONLY IF THE CASH BALANCE ON HAND IS ACCEPTED, THEN TH E DEPOSITS ON THOSE DAYS STANDS EXPLAINED; B) THE NEXT SET OF DEPOSITS ARE FROM 26-07-2010 TO 23-10- 2010 TOTALLING TO RS. 3,88,000/-. THERE ARE NO WITHDRAWALS FROM BANK A/C TO SUPPORT. EXPLANATION WAS THAT THESE ARE S OURCED FROM EARLIER ADVANCES, SHOWN AS DEBTORS IN BALANCE S HEET IN LAST YEAR AND INTEREST EARNED. C) THE THIRD SET OF DEPOSIT WAS ON 09-12-2010 OF RS. 5,00 ,000/- AGAIN FOR WHICH THERE IS A WITHDRAWAL OF RS. 2,00,00 0/- ON 07-12-2010. BALANCE NOT SUPPORTED BY WITHDRAWALS. D) THE LAST DEPOSIT OF RS. 20,000/- ON 08-03-2011 WAS SO URCED FROM EARLIER WITHDRAWALS OF RS. 10,000/- EACH ON 03- 03-2010 AND 09-03-2010. THIS CAN BE EXPLAINED. THUS, RS. 50,000/- EXTRA DEPOSIT IN ITEM (A), RS. 3,8 8,000/- IN ITEM (B) AND RS. 3,00,000/- AND IN ITEM (C) REQUIRE EXPLA NATION. 8. ASSESSEE HAS NOT PLACED THE EARLIER YEAR STATEMENTS OR THIS YEAR STATEMENTS OF BALANCE SHEET AND P&L A/C ON RECORD , SO AS TO VERIFY THE CONTENTION THAT THESE ARE SOURCED FROM CASH BA LANCE AND I.T.A. NO. 1181/HYD/2016 :- 5 - : DEBTORS AND INTEREST. SINCE THESE DETAILS ARE NOT PLACE D ON RECORD, THE VERACITY OF THEM COULD NOT BE VERIFIED. EVEN THE AO OR CIT(A) HAS NOT COMMENTED ABOUT THAT. THEREFORE, I AM OF THE O PINION THAT THE AO IS REQUIRED TO VERIFY THE STATEMENTS OF EARLIER Y EAR AND OF THIS YEAR TO SEE WHETHER THE CONTENTION OF ASSESSEE IS CO RRECT. IN CASE OF EXISTENCE OF DEBTORS AND CASH BALANCE OF EAR LIER YEAR AND THERE IS CORRESPONDING REDUCTION OF BALANCES IN THIS YEAR, THEN AO CAN GIVE CREDIT TO THAT EXTENT. IN CASE, THE CASH BALAN CE AND DEBTORS HAVE INCREASED, AO CAN GIVE OPPORTUNITY TO AS SESSEE AND THEN MAY CONFIRM TO THAT EXTENT. THESE REQUIRE VERIFICATIO N OF STATEMENTS ALREADY FILED WITH THE RETURNS. ASSESSEE SHOUL D BE GIVEN OPPORTUNITY TO EXPLAIN. THUS, OUT OF THE AMOUNT OF RS . 8,38,000/- CONFIRMED BY LD.CIT(A), AN AMOUNT OF RS. 7,38,000/- IS RESTORED TO THE FILE OF AO FOR NECESSARY VERIFICATION AND BALANCE IS CONSIDERED AS EXPLAINED. GROUNDS ARE PARTLY ALLOWED FOR STATISTIC AL PURPOSES. 9. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH DECEMBER, 2017 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 20 TH DECEMBER, 2017 TNMM I.T.A. NO. 1181/HYD/2016 :- 6 - : COPY TO : 1. SMT. MANPREET KAUR, C/O. B. SHANTHI KUMAR, ADVOC ATE, 111, TARAMANDAL COMPLEX, 5-9-13, SAIFABAD, HYDERABA D. 2. THE INCOME TAX OFFICER, WARD-5(2), HYDERABAD. 3. CIT (APPEALS)-4, HYDERABAD. 4. PR.CIT-4, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.