Randeep Gampa, Secunderabad V. Income Tax Officer, Ward-9(4), Hyderabad

ITA 1218/Hyd/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0116 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Assessment Year: 2013-2014
• Appeal Filed On: 05-08-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: M V ANIL KUMAR
• Keywords: Business income; Salary income
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES SMC, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER I.T.A. NO. 1218/HYD/2019 ASSESSMENT YEAR: 2013-14 RANDEEP GAMPA, HYDERABAD [PAN: AEGPG6498A] VS INCOME TAX OFFICER, WARD-9(4), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI M.V.ANIL KUMAR, AR FOR REVENUE : SHRI NILANJAN DEY, DR DATE OF HEARING : 30-12-2019 DATE OF PRONOUNCEMENT : 30-12-2019 O R D E R THIS APPEAL FILED BY THE ASSESSEE FOR THE AY.2013-14, IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCO ME TAX (APPEALS)7, HYDERABAD, DATED 29-05-2019. THE GROUND S RAISED BY ASSESSEE IN THIS APPEAL ARE AS UNDER: 1. THE ASSESSING OFFICER AS WELL AS CIT(A) ERRED I N LAW AND FACTS OF THE CASE IN ESTIMATION OF PERQUISITE VALUE OF FURNI TURE AT RS. 20,000/- IN ABSENCE OF ANY EVIDENCE THAT THE ACCOMMODATION I S FURNISHED. 2. THE CIT(A) OUGHT TO HAVE CONSIDERED THE VOUCHERS PRODUCED FOR VERIFICATION AND APPRECIATED THE FACT THAT THE AMOU NTS RECEIVED ARE TRADE ADVANCES AND HENCE, PROVISIONS OF THE SECTION 68 ARE NOT APPLICABLE TO THE FACTS OF THE CASE, THEREFORE THE ADDITION OF RS.8,06,500/- MAY BE DELETED. 3. YOUR, APPELLANT SUBMITS THAT THE AMOUNTS RECEIVE D ARE TOWARDS TRADE ADVANCES WHICH ARE SUBSEQUENTLY RETURNED IN T HE EVENT OF NON- SUPPLY OF MATERIAL, HENCE, THE ADDITION U/S. 68 IS BAD IN LAW. 4. YOUR APPELLANT SUBMITS THAT THE CIT(A) ERRED IN HOLDING THAT THE STAND TAKEN BY THE APPELLANT THAT THE AMOUNTS ARE T RADE ADVANCES IS AN AFTER THOUGHT, WITHOUT APPRECIATING THE FACT THA T THE APPELLANT RUNS ITA NO. 1218/HYD/2019 :- 2 -: A RETAIL BUSINESS OUGHT TO HAVE CONSIDERED THE SUBM ISSION AND DELETE THE ADDITION U/S 68. 5. THE CIT(A) AS WELL AS THE ASSESSING OFFICER OUGH T TO HAVE APPRECIATED THE FACT THE AMOUNT RECEIVED AND REPAID ARE IN THE SAME FINANCIAL YEAR AND CANNOT BE CONSIDERED AS UNEXPLAI NED CASH CREDIT. 6. FOR THESE GROUNDS AND SUCH GROUNDS AS MAY BE URG ED AT THE TIME OF HEARING, YOUR APPELLANT PRAYS THAT THE ADDITIONS MAY BE DELETED. 2. BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE, AN INDIVIDUAL, IS A PROPRIETOR OF M/S.GANAPA ENTERPRISES . HE FILED HIS RETURN OF INCOME FOR THE AY.2013-14, DECLARING IN COME FROM SALARY, INCOME FROM HOUSE PROPERTY AND ALSO PR OFIT FROM BUSINESS OF PROPRIETORSHIP CONCERN AND CLAIMED LOSS FROM OTHER SOURCES. SUBSEQUENTLY, HE FILED A REVISED RET URN OF INCOME FOR THE AY.2013-14 ON 30-01-2014, DECLARING TO TAL INCOME OF RS.11,12,420/-. THE SAID RETURN OF INCOME WAS SELECTED FOR SCRUTINY UNDER CASS AND DURING THE ASSESS MENT PROCEEDINGS U/S.143(3) OF THE OF THE INCOME TAX ACT [A CT], THE ASSESSING OFFICER (AO) NOTICED THAT THE ASSESSEE HAS RECEIVED A RENT FREE ACCOMMODATION FROM THE COMPANY. ASSUMING THAT IT IS A FURNISHED ACCOMMODATION, THE AO HAS TREATED 10% CO ST OF THE FURNITURE (INCLUDING TV SET, REFRIGERATOR, AIR-CON DITIONERS ETC.,) I.E., RS.20,000/- AS A PERQUISITE UNDER THE HEAD INCOME FROM SALARY. 2.1. THEREAFTER, THE AO ALSO PERUSED THE BOOKS OF ACC OUNT AND ON VERIFICATION OF THE CASH BOOK, NOTICED THAT THE A SSESSEE HAS ACCEPTED CASH LOANS OF BELOW RS.20,000/- ON VARI OUS DATES, TOTALLING TO RS.9,01,500/-. THE ASSESSEE WAS THER EFORE REQUIRED TO FURNISH THE DETAILS SUCH AS ADDRESSES AND COMPLETE ITA NO. 1218/HYD/2019 :- 3 -: LIST OF NAMES OF PERSONS, WHO HAVE ADVANCED LOANS. T HE ASSESSEE FAILED TO FURNISH THE REQUIRED INFORMATION, B UT STATED THAT SUM OF RS.8,06,500/- WERE ADVANCE FROM CUSTOMERS AND NOT LOANS AND THE LOANS ARE ONLY AGGREGATING TO RS.95, 000/-. THE AO VERIFIED THE SAME AND ACCEPTED THE ASSESSEES EXPLANATION TO THE EXTENT OF RS.95,000/-, WHICH ARE THE LOANS FROM RELATIVES AND INSOFAR AS THE BALANCE OF RS.8,06, 500/- IS CONCERNED, THE AO TREATED IT AS UN-EXPLAINED CASH CRED ITS U/S.68 OF THE ACT AND BROUGHT IT TO TAX. 2.2. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEF ORE THE CIT(A), WHO CONFIRMED THE ORDER OF AO AS FAR AS THESE TWO GROUNDS ARE CONCERNED AND THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 3. AS REGARDS GROUND NO.1, THE LD.COUNSEL FOR THE ASS ESSEE SUBMITTED THAT IT WAS ASSESSEES OWN ACCOMMODATION, WHICH WAS TAKEN ON LEASE BY THE COMPANY AND GIVEN TO THE ASSE SSEE AS A RENT FREE ACCOMMODATION. HE SUBMITTED THAT THE INCO ME RECEIVED FROM THE COMPANY HAS BEEN OFFERED BY THE ASS ESSEE TO TAX AS INCOME FROM HOUSE PROPERTY. HE SUBMITTED THAT TH E ASSESSEE WAS GIVEN THE SAID PROPERTY AS RENT FREE ACCOMMODATION BY THE COMPANY AND IT WAS NOT A FURNISHED ACCOMMODATION AND THEREFORE, THERE WAS NO NEED FOR ESTIMATION OF VALUE OF THE FURNITURE AND TREATING IT AS A PERQUISITE IN HIS HANDS. 4. LD.DR WAS ALSO HEARD. ITA NO. 1218/HYD/2019 :- 4 -: 5. I FIND THAT THE ASSESSEES OWN ACCOMMODATION HAS BE EN TAKEN ON LEASE AND GIVEN BACK TO HIM AS RENT-FREE ACCOMMODATION BY THE COMPANY. THEREFORE, THE FURNITURE IF ANY, BELONGS TO ASSESSEE-INDIVIDUAL HIMSELF AND THE SAME CANNOT BE TREATED AGAIN AS A PERQUISITE GIVEN BY THE C OMPANY TO THE ASSESSEE. THEREFORE, I AM INCLINED TO DELETE THE ADDITION OF RS.20,000/- MADE BY THE AO. 6. AS REGARDS THE CASH CREDITS ARE CONCERNED, NONE O F THE CASH CREDITS ARE EXCEEDING RS.20,000/-. THE ASSESSEE THOUGH INITIALLY HAS STATED THEM TO BE LOANS, HAS SUBSEQUENTLY CLARIFIED THAT THEY ARE TRADE ADVANCES AND THAT FOR NON- SUPPLY OF MATERIAL, THE ASSESSEE HAD RETURNED THOSE ADVANCES. BOTH THE AO AS WELL AS THE CIT(A) HAVE REFUSED TO ACCEPT THIS CONTENTION OF THE ASSESSEE ON THAT GROUND THAT THE ASSESSEE WAS NOT ABLE TO PRODUCE THE DETAILS TO ESTABLISH THE IDENTI TY OF THOSE PERSONS FROM WHOM HE HAS TAKEN LOANS/ADVANCES. 6.1. THE LD.COUNSEL FOR THE ASSESSEE ALSO MADE AN AL TERNATIVE ARGUMENT BEFORE THE TRIBUNAL THAT THE SAID CREDITS MAY BE TREATED AS TURNOVER OF THE ASSESSEE AND INCOME MAY BE ESTIMATED ON SUCH TURNOVER. 6.2. LD.DR DID NOT AGREE TO THE SAME AND SUBMITTED THAT SINCE THE ASSESSEE, HAS FAILED TO SUBMIT IDENTITY OF THE CREDITORS, ENTIRE CREDITS ARE TO BE TREATED AS INCOME OF THE ASSESSEE U/S.68 OF THE ACT. ITA NO. 1218/HYD/2019 :- 5 -: 6.3. LD.COUNSEL FOR THE ASSESSEE HAS DRAWN MY ATTENTION TO THE EVIDENCE FILED BY THE ASSESSEE BEFORE THE CIT(A) I .E., THE VOUCHERS GIVEN FOR RETURN OF THE ADVANCES BY THE ASSES SEE. 6.4. HAVING REGARD TO THE RIVAL CONTENTIONS AND ALSO T HE EVIDENCE FURNISHED BEFORE THE CIT(A), I AM INCLINED TO ACCEPT THE ALTERNATIVE CLAIM OF THE ASSESSEE. ALL THESE CREDIT S ARE TO BE TREATED AS TOTAL TURNOVER/GROSS RECEIPTS OF THE ASSESSEE A ND THE INCOME OF ASSESSEE IS TO BE ESTIMATED AT THE SAME RATE, AT WHICH THE ASSESSEE HAS OFFERED HIS BUSINESS INCOME. AO IS DIRECTED ACCORDINGLY. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS TREATED AS P ARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER, 2019 SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED: 30-12-2019 TNMM ITA NO. 1218/HYD/2019 :- 6 -: COPY TO : 1. SHRI RANDEEP GAMPA, C/O.M.ANANDAM& CO., CHARTERE D ACCOUNTANTS, FLAT NO.7A, SURYA TOWERS, S.P.ROAD, SECUNDERABAD. 2. INCOME TAX OFFICER, WARD-9(4), HYDERABAD. 3. CIT(APPEALS)-7, HYDERABAD. 4. PR.CIT-7, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.