Raghu Babu Yerra, Hyd, Hyderabad V. Addl. CIT, Range-13, Hyd, Hyderabad

ITA 1271/HYD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2462 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 04-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U MINICHANDRAN
• Keywords: Unexplained cash credit; Peak credit
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1271/HYD/2015 ASSESSMENT YEAR: 2011-12 RAGHU BABU YERRA, HYDERABAD PAN AAZPY6336Q VS. ADDL. COMMISSIONER OF INCOME-TAX, RANGE 13, HYD. (ASSESSEE) (RESPONDENT) ASSESSEE BY : SHRI K.C. DEVDAS REVENUE BY : SMT. U. MINICHANDRAN DATE OF HEARING 15/02/2018 DATE OF PRONOUNCEMENT 28/02/2018 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 14/08/2015 PASSED BY CIT(A) VI, HYDERABAD RELATI NG TO AY 2011- 12. 2. BRIEFLY THE FACTS OF THE CASE ARE, THE ASSESSEE, A PROFESSIONAL ARTIST, FILED HIS RETURN OF INCOME FOR RS. 17,47,24 3/- ON 26/12/2011 AND THE ASSESSMENT U/S 143(3) OF THE INCOME-TAX ACT, 19 61 (IN SHORT THE ACT) WAS COMPLETED UPON A TOTAL INCOME OF RS. 60,9 0,743/- BY MAKING ADDITION OF RS. 43,43,500/- U/S 68 OF THE ACT. 2.1 THE CASE OF THE ASSESSEE WAS PICKED UP IN CASS AS PER THE AIR INFORMATION TO EXAMINE THE SOURCE OF CASH DEPOS ITS IN THE 3 SAVINGS BANK ACCOUNTS. IT IS TO BE SEEN THAT DURING THE YEAR, CASH HAD BEEN DEPOSITED / WITHDRAWN ON DIFFERENT DATES. THE ASSESSEE HAS TRIED TO EXPLAIN THE SOURCE OF CASH DEPOSITS TO BE FROM AGRICULTURAL 2 ITA NO. 1271 /HYD/2015 RAGHU BABU YERRA, HYD. INCOME BELONGING TO HIM AND THE MEMBERS OF HIS FAMI LY. IT WAS ALSO STATED TO BE FROM SUFFICIENT CASH BALANCE WITH THE ASSESSEE OUT OF WITHDRAWALS MADE IN EARLIER YEARS. THE ASSESSING OF FICER DID NOT ACCEPT THIS EXPLANATION OF THE ASSESSEE AS NO EVIDE NCE WAS SUBMITTED IN SUPPORT OF THIS CLAIM. A PEAK OF CASH DEPOSITS RELATING TO ALL THE 3 BANK ACCOUNTS WAS ARRIVED AT RS.93,43,500 /-. OUT OF THIS, THE ASSESSING OFFICER ALLOWED RS.50,00,000/- BEING AMOU NT RECEIVED AS ADVANCE FOR SALE OF LAND AND CONSIDERED THE BALANCE AMOUNT OF RS.43,43,500/- AS UNEXPLAINED. AGGRIEVED, THE ASSE SSEE PREFERRED AN APPEAL BEFORE THE CIT(A). 3. BEFORE THE CIT(A), THE ASSESSEE REITERATED THE S UBMISSIONS AS MADE BEFORE THE AO. HE PLACED RELIANCE ON CERTIFICA TES FROM REVENUE AUTHORITIES (TAHSELDAR), WHICH CERTIFIED THAT ASSES SEE, HIS MOTHER, SISTER AND BROTHER HELD LAND HOLDINGS FROM WHICH AG RICULTURAL INCOME TO THE TUNE OF RS. 9 LAKHS, RS. 4 LAKHS, RS. 10 LAK HS AND RS. 10 LAKHS RESPECTIVELY WAS CERTIFIED TO HAVE BEEN EARNED. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) RESTRICTED THE ADDITION TO RS. 33,43,500/- AS AGAIN ST RS. 43,43,500/- MADE BY THE AO BY OBSERVING AS UNDER: 7.0 THE SUBMISSIONS MADE BY THE ASSESSEE HAVE BEEN CONSIDERED. IT IS SEEN THAT THE ASSESSEE HAS TRIED TO EXPLAIN THE SOURCE OF CASH DEPOSITS BY WAY OF PAST SAVINGS AND OUT OF AGRICULTURAL INCOME EARNED BY HIS FAMILY AND HIMSEL F. IN SUPPORT OF HIS CLAIM, HE HAD FURNISHED CERTIFICATES FROM TH E REVENUE AUTHORITY IN THE NAME OF HIS MOTHER, BROTHER & SIST ER WHICH HAS STATED THAT RS.24 LAKHS WAS EARNED BY THEM FROM AGR ICULTURAL ACTIVITY. THERE IS NO BASIS GIVEN FOR ARRIVING AT T HIS AMOUNT AND EVEN IF THAT IS CONSIDERED TO BE CORRECT, NO EVIDEN CE HAS BEEN GIVEN WITH RESPECT TO DEPOSITS OF SUCH INCOME IN TH E BANK ACCOUNTS OF THE ASSESSEE. NO CONFIRMATIONS HAVE ALS O BEEN GIVEN BY THE PARTIES STATING THAT THEY HAVE GIVEN M ONEY TO THE ASSESSEE. THE ASSESSING OFFICER HAS NOT DISPUTED TH AT THE ASSESSEE HAD EARNED RS.3 LAKHS AS AGRICULTURAL INCO ME. THE TEHSILDAR WHO ISSUED THE CERTIFICATE HAS STATED IT TO BE RS.9 LAKHS IN ASSESSEE'S NAME. THIS ITSELF SHOWS THAT TH E CERTIFICATE IS NOT RELIABLE AND IN ANY CASE THE QUANTUM OF INCO ME IN THE CERTIFICATE IS GROSSLY EXAGGERATED. BUT THE ASSESSE E'S 3 ITA NO. 1271 /HYD/2015 RAGHU BABU YERRA, HYD. EXPLANATION REGARDING HIS FAMILY CIRCUMSTANCES AND THE FACT OF AGRICULTURAL LAND HOLDINGS MERIT SOME CONSIDERATION . 07.1 IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, IT WOULD BE REASONABLE TO HOLD THAT AN AMOUNT OF RS.10 LAKHS COULD HAVE BEEN EARNED BY THE ASSESSEE AND HIS FAMILY MEMBERS AS THEIR AGRICULTURAL INCOME AND THE SAME COULD HAVE BEEN PA RT OF THE CASH DEPOSITS IN THE BANK ACCOUNTS. IT IS CLARIFIED THAT THE AMOUNT WOULD INCLUDE CURRENT INCOME AND PAST SAVING S IF ANY. IN VIEW OF IT, THE AMOUNT OF RS.10 LAKHS IS CONSIDE RED IS TO BE EXPLAINED AND THE BALANCE STANDS CONFIRMED. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE I S IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE HON'BLE CIT (A)IS ERRONEOUS IN LAW AS WELL AS FACTS OF THE CASE. 2. THE HON'BLE CIT (A) OUGHT TO HAVE ACCEPTED THE E XPLANATION OF THE ASSESSEE AND SHOULD NOT HAVE SUSTAINED THE A DDITION OF RS.33,43,500/- AS UNEXPLAINED CASH DEPOSITS U/S.68 OF THE I.T. ACT. 3. THE HON'BLE CIT (A) IN THE ABSENCE OF ANY SUPPOR TING INFORMATION ON RECORD OUGHT NOT TO HAVE SUSTAINED T HE ADDITION OF PEAK CREDIT TO THE TUNE OF RS.33,43,500/- AS UNE XPLAINED CASH CREDIT. 4. THE HON'BLE CIT (A) OUGHT NOT TO HAVE TREATED TH E AMOUNT OF RS.33,43,500/- AS UNEXPLAINED CASH CREDIT U/S.68 OF THE IT ACT AND THEREFORE THE SAME IS LIABLE TO BE DELETED. 5. ANY OTHER GROUND WILL BE RAISED AT THE TIME OF H EARING. 6. LD. AR OF THE ASSESSEE RELIED ON THE WRITTEN SUB MISSIONS FILED BEFORE THE CIT(A). 7. LD. DR RELIED ON THE ORDER OF LD. CIT(A). 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSMENT WAS SELECTED MAINLY TO VERIF Y THE CASH DEPOSITS IN THE BANK ACCOUNT MAINTAINED BY THE ASSE SSEE. IN THE SUBMISSIONS BEFORE THE AO & CIT(A), THE ASSESSEE HA S SUBMITTED THAT THESE CASH DEPOSITS WERE OUT OF ADVANCE FOR SALE OF PROPERTY, AGRICULTURAL INCOME OF PERSONAL AND FAMILY MEMBERS AS WELL AS CASH IN HAND, WHICH IS HELD OUT OF CASH WITHDRAWALS IN THE EARLIER PERIOD. AO 4 ITA NO. 1271 /HYD/2015 RAGHU BABU YERRA, HYD. HAS REJECTED THE SUBMISSION OF THE ASSESSEE AND ADO PTED THE PEAK CREDIT BY FACTORING THE ADVANCE OF SALE OF PROPERTY . FURTHER, LD. CIT(A) HAS GRANTED ADDITIONAL RELIEF TO ASSESSEE BY ACCEPT ING THE AGRICULTURAL INCOME TO THE EXTENT OF RS. 10 LAKHS BUT WITHOUT AN Y BASIS, MERELY ON ADHOC BASIS. AT THE SAME TIME, ASSESSEE CLAIMED INC OME TO THE EXTENT OF RS. 33 LAKHS WITH THE LAND HOLDING OF 18 ACRES. THE CLAIM OF THE ASSESSEE IS ABOUT RS. 1.833 LAKHS PER ACRE, WHI CH WAS ALSO DULY CERTIFIED BY THE TEHSILDAR. THIS CERTIFICATE ALSO D OES NOT CONTAIN ANY BASIS OF CERTIFICATION. IT DOES NOT CONTAIN ANY INF ORMATION LIKE TYPE OF CULTIVATION, YIELD ETC. WE ARE INTENDED TO REMIT TH IS BACK TO AO BUT IT WILL NOT YIELD ANY BENEFIT TO EITHER SIDE. THEREFOR E, WE TRIED TO GET DATA FROM GOOGLE ON THE NET INCOME PER ACRE OF LAND IN INDIA/AP. BUT, THE NET INCOME PER ACRE DEPENDS UPON THE TYPE OF LAND, (KHARIF OR RABI), TYPE OF CROP CULTIVATED ETC. WE NOTICE THAT THE RAN GE OF INCOME EARNED BY THE FARMERS ARE RS. 75,000/- TO 1.50 LAKHS PER A CRE. IT IS DIFFICULT TO FIX THE INCOME EARNING CAPACITY OF THE FARMERS. IN ORDER TO SETTLE THE ISSUE, WE DIRECT THE AO TO ACCEPT THE INCOME EARNED BY THE ASSESSEE IN HIS HANDS AT RS. 1.25 LAKH PER ACRE I.E. RS. 22. 50 LAKHS FROM AGRICULTURAL INCOME. FURTHER, WE ARE NOT IN A POSIT ION TO ACCEPT THE CONTENTION OF THE ASSESSEE THAT THE OTHER CASH DEPO SITS ARE OUT OF PREVIOUS WITHDRAWALS, WHICH IS NOT SUPPORTED WITH A NY DOCUMENTARY EVIDENCE. ASSESSEE HAS NOT MAINTAINED NOR SUBMITTE D ANY CASH BOOK ETC. TO SUBSTANTIATE ITS CLAIM. THEREFORE, WE ENHA NCE THE AGRICULTURAL INCOME FURTHER TO EXTENT OF RS. 12.5 LAKHS. ACCORDI NGLY, GROUND RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2018. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 28 TH FEBRUARY, 2018 KV 5 ITA NO. 1271 /HYD/2015 RAGHU BABU YERRA, HYD. COPY TO:- 1) RAGHU BABU YERRA, C/O B. NARSING RAO & CO., CAS, PLOT NO. 554, ROAD NO. 92, JUBILEE HILS, HYD. - 36 2) ADDL. CIT, RANGE 13, HYD. 3) CIT(A) VI, HYD. 4) PR. CIT 6, HYD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE /