Srikishan Sharma., Hyderabad V. Dy. Commissioner of Income Tax, Cent. Circle-2., Hyderabad.

ITA 1257/Hyd/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0718 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 03-07-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 20-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: RAMA KRISHNA
• Keywords: Unexplained cash credit
• Section: 143(3); 133A; 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.1257/HYD/2017 ASSESSMENT YEAR: 2007 - 08 SRIKISHAN SHARMA, HYDERABAD. PAN: AQAPS 0594 D VS. DCIT, CENTRAL CIRCLE - 2, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI RAMA KRISHNA REVENUE BY: SRI NILANJAN DE Y, DR DATE OF HEARING: 03/07/2019 DATE OF PRONOUNCEMENT: 26 /07/2019 ORDER PER A. MOHAN ALANKAMONY, AM.: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) - 7, HYDERABAD IN APPEAL NO.178/CIT(A) - 7/2015 - 16, DATED 09/12/2016 PASSED U/S. 143(3) R.W.S 153A & U/S. 250(6) OF THE ACT FOR THE ASSESSMENT YEAR 2007 - 08. 2. T HE ASSESSEE HAS RAISED 4 GROUNDS IN HIS APPEAL HOWEVER , THE CRUX OF THE ISSUE THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE LD. AO WHO HAD MADE ADDITION OF RS. 5 LAKHS TOWARDS UNEXPLAINED CASH CREDITS. 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL FILED HIS RETURN OF INCOME ON 11/5/2010 PURSUANT TO SEARCH CONDUCTED U/S. 132 OF THE ACT AND SUBSEQUENT TO NOTICE ISSUED U/S. 133A OF THE ACT ON 30/03/2010 AND SHOW CAUSE LETTER DATED 29/4/2010 BY ADMITTING INCOME OF RS. 3,50,000 / - AND AGRICULTURAL INCOME OF RS. 60,000 / - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE LD. AO THAT THE ASSESSEE HAD PURCHASED IMMOVABLE PROPERTY ALONG WITH OTHER FAMILY MEMBERS. ON QUERY, IT WAS SUBMITTED THAT THE ASS ESSEE HAD RECEIVED LOAN FROM SRI PRAMOD THAKUR AND FROM G. PRASAD. THE ASSESSEE ALSO FURNISHED THE CONFIRMATION LETTERS FROM THE CREDITORS. HOWEVER, SINCE THE ASSESSEE HA D NOT PRODUCED THE OTHER PARTICULARS OF THE LOAN CREDITORS TO ESTABLISH THE IR GENUIN ENESS THE LD. AO TREATED THE AMOUNT OF RS. 5 LAKHS AS THE UNEXPLAINED CASH CREDIT. ON APPEAL, LD. CIT (A) CONFIRMED THE ORDER OF THE LD. AO BY OBSERVING AS UNDER: 4.2. I HAVE CONSIDERED THE ASSESSMENT ORDER, SUBMISSION OF THE ASSESSEE AND THE DOCUMENTS PLACED BEFORE ME. IT IS SEEN THAT THE ASSESSEE HAS FILED CONFIRMATION, FORM - 16 ISSUED BY EMPLOYER OF THE CREDITORS AND COPIES OF THEIR BANK ACCOUNT. IT IS SEEN FROM THE DOCUMENTS THAT BOTH THE LOAN CREDITORS HAVE ANNUAL INCOME OF RS. 1,26,307/ - FOR ASST. YEAR 2006 - 07 AND AFTER DEDUCTION FOR SAVINGS, THE NET COMES TO RS. 99,307/ - , WHICH IS AROUND RS. 8,300/ - PER MONTH. THEY DO NOT SHOWN TO BE HAVING ANY OTHER SOURCES. THEIR INCOME IS BARELY ENOUGH FOR THEIR PERSONAL EXPENSES. FURTHER, EXAMINATION OF THE BANK ACCOUNT SHOWS THAT THERE IS CASH DEPOSITED IN THE ACCOUNT IMMEDIATELY BEFORE THE CHEQUE IS ISSUED. BOTH OF THEM CLAIM THE ASSESSEE TO BE CHILDHOOD FRIEND AND HAVE NOT CHARGED ANY INTEREST ON THEM. CONSIDERING THE FACTS AS ABOVE, IT IS HELD THAT CRE DITWORTHINESS AS WELL AS GENUINENESS OF THE TRANSACTIONS ARE NOT PROVED. THE ADDITION MADE IS CONFIRMED AND THE GROUND RAISED IS REJECTED. 3 4. BEFORE US, THE LD. AR SUBMITTED THAT THE ASSESSEE HAD FURNISHED THE NAME S , ADDRESS AND CONFIRMATION LETTERS ETC., FROM THE LOAN CREDITORS HOWEVER, THE LD. AO WITHOUT EXAMINING THE CREDITORS AND DISBELIEVING THE CONFIRMATION STATEMENT TREATED THE AMOUNT OF RS. 5 LAKHS AS UNEXPLAINED CASH CREDIT WHICH IS ERRONEOUS. IT WAS THEREFORE PLEADED THAT THE ADDITI ON MADE BY THE LD. AO WHICH WAS FURTHER CONFIRMED BY THE LD. CIT (A) MAY BE DELETED. THE LD. DR ON THE OTHER HAND VEHEMENTLY ARGUED IN SUPPORT OF THE ARGUMENTS OF THE LD. REVENUE AUTHORITIES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED T HE MATERIALS ON RECORD. FROM THE FACTS OF THE CASE IT IS EVIDENT THAT THE ASSESSEE HAS FURNISHED THE CONFIRMATION STATEMENTS FROM THE CREDITORS BEFORE THE LD. REVENUE AUTHORITIES. IT WAS FURTHER EXPLAINED BY THE LD.AR THAT THE CREDITORS WERE ASSESSEES C HILDHOOD FRIENDS. THOUGH THE CREDITORS HAD MEAGRE SOURCE OF INCOME IT CANNOT BE SIMPLY PRESUMED THAT THEY WILL NOT BE ABLE TO MOBILISE EVEN AN AMOUNT OF RS. 2,50,000 EACH IN ORDER TO EXTEND FINANCIAL SUPPORT TO THE IR CHILDHOOD FRIEND FOR A SPECIFIC GENUIN E PURPOSE . WHEN THE CONFIRMATION STATEMENT, NAMES AND ADDRESS OF THE SUNDRY CREDITORS WERE PROVIDED , IT WOULD HAVE BEEN APPROPRIATE ON THE PART OF THE LD. REVENUE AUTHORITIES TO EXAMINE THE CREDITORS AND THEREAFTER ARRIVE AT A CONCLUSION RATHER THAN DECIDE THE ISSUE SIMPLY BASED ON PRESUMPTIONS. CONSIDERING THE FACTS AND 4 CIRCUMSTANCES OF THE CASE AND THE PETTY AMOUNT INVOLVED OF RS. 2,50,000/ - BEING THE LOAN EXTENDED BY EACH OF THE TWO INDIVIDUALS TO THE ASSESSEE WE ARE OF THE CONSIDERED VIEW THAT ADDITION OF RS. 5 LAKHS MADE TOWARDS UNEXPLAINED CASH CREDITED IN THE HANDS OF THE ASSESSEE IS NOT WARRANTED. THEREFORE, WE HEREBY DIRECT THE LD. AO TO DELETE THE ADDITION MADE OF RS. 5 LAKHS IN THE HANDS OF THE ASSESSEE TOWARDS UNEXPLAINED CASH CREDIT. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 26 TH JULY, 2019. SD/ - SD/ - (P. MADHAVI DEVI) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 26 TH JULY , 2019 OKK COPY TO: - 1) N. NAGARAJU & N. ARVIND, ADVOCATE & TAX CONSULTANTS, FLAT NO.12, MANOHAR APTS, VIDYAAGAR, HYDERABAD - 44. 2) DCIT, CIRCLE - 2, HYDERABAD. 3) THE CIT(A) - 7, HYDERABAD 4) THE PR. CIT - 7, HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE