Income Tax Officer, Ward - 1, Kadapa V. Sri. G. Chakrapani, Proddatur

ITA 1290/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66554 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 31-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIDISHA KALRA
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Peak credit; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMB ER ITA NO.1290/HYD/2012 : ASSESSM ENT YEAR 2009-10 INCOME - TAX OFFICER, WARD - 1, KADAPA. V/S. SHRI G.CHAKRAPANI, PRODDATUR. ( PAN - AHIPG 3230 N ) (APPELLANT) (RESPONDENT) APPELLANT BY : S MT. VIDISHA KALRA, DR RESPONDENT BY : S HRI T.CHAITANYA KUMAR DATE OF HEARING 3 . 12 .2012 DATE OF PRONO UNCEMENT 7.12.2012 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS), GUNTUR DATED 2 2.6.2012 FOR THE ASSESSMENT YEAR 2009-10. 2. THE ONLY EFFECTIVE GRIEVANCE OF THE REVENUE IN THIS APPEAL IS AGAINST THE ACTION OF THE CIT(A) IN DELETING AN ADD ITION OF RS.14,05,500 MADE BY THE ASSESSING OFFICER. 3. FACTS IN BRIEF LEADING TO THE FILING OF THE PRE SENT APPEAL ARE THAT THE ASSESSEE, AN INDIVIDUAL, DERIVING INCOME FROM F URNITURE AND ELECTRONIC SHOP, AND BY WAY OF COMMISSION FROM LIC OF INDIA, F ILED RETURN ADMITTING AN ITA NO.1290/HYD/2012 SHRI G.CHAKRAPANI, PRODDATUR. 2 INCOME OF RS.2,28,890 FOR THE ASSESSMENT YEAR 2009- 10. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER NOTICED THAT T HE ASSESSEE MADE CERTAIN DEPOSITS INTO HIS BANK ACCOUNT WITH ICICI BANK, AND THE PEAK CREDIT ON ACCOUNT OF SUCH DEPOSITS WAS RS.14,05,500. WHEN TH E ASSESSING OFFICER, PROPOSING TO MAKE AN ADDITION IN RELATION TO THE SA ID PEAK CREDIT AND CALLED FOR THE EXPLANATION OF THE ASSESSEE, IT WAS EXPLAIN ED THAT ALL THE WITHDRAWALS WERE IN CASH AND WERE USED FOR THE PURPOSE OF BUSIN ESS. IT WAS ALSO EXPLAINED THAT ATM AND BANK CREDIT CARDS ARE REQUIR ED FOR THE PURPOSE OF THE ASSESSEES BUSINESS AND INSTEAD OF CARRYING THE CAS H, THE SAID ATM/CREDIT CARDS WERE CARRIED BY DEPOSITING THE AMOUNTS INTO T HE BANK ACCOUNT. AS ALL THE AMOUNTS SPENT WERE RECORDED IN THE BOOKS OF ACC OUNT AND AS THE OPENING AND CLOSING BALANCES ARE VERY NOMINAL AND AS THE TR ANSACTIONS ARE MOSTLY CASH DEPOSITS AND WITHDRAWALS THROUGH ATM/CREDIT CA RDS, NO ENTRIES WERE MADE IN THE BOOKS OF ACCOUNT. THE ASSESSING OFFICER , NOT CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, MADE AN ADDITION OF TH E SAID AMOUNT OR RS.14,05,500 AND ACCORDINGLY COMPLETED THE ASSESSME NT ON A TOTAL INCOME OF RS.16,34,390 AS AGAINST THE RETURNED INCOME OF R S.2,28,890, VIDE ORDER OF ASSESSMENT DATED 29.12.2011 PASSED UNDER S.144 OF THE INCOME-TAX ACT, 1961. 4. ON APPEAL, THE CIT(A) DELETED THE SAID ADDITION OF RS.14,05,500 MADE BY THE ASSESSING OFFICER, WITH THE FOLLOWING O BSERVATIONS- 3. I PERUSED THE ASSESSMENT ORDER AND GONE THROU GH THE WRITTEN SUBMISSIONS AND ALSO EXAMINED THE EVIDENCE PRODUCED BEFORE ME, I.E. CASH BOOK, BANK ACCOUNT, ETC. I FIND THAT THERE WAS CASH BALANCE ON ALL THE DAYS WHEN THE DEPOSITS WERE MADE INTO THE SAID BANK ACCOUNT. I VERIFIED THE CASH BOOK AND FOUND T HAT THE APPELLANTS CONTENTIONS ARE CORRECT. I ALSO FOUND THAT THE AMO UNT DEPOSITED WITH THE ICICI BANK WAS MOSTLY WITHDRAWN THROUGH ATM OR BANK CREDIT CARDS. THEREFORE, THE EXPLANATION OF THE APPELLAN T IS ACCEPTABLE. THE ASSESSING OFFICER EXPRESSED A DOUBT WITH REGARD TO THE SOURCE OF THE DEPOSIT WHERE AS THE APPELLANT DEMONSTRATED BEFORE ME THAT HE HAD CASH BALANCES WITH HIM AS ON THE DATES OF DEPOSITS MADE INTO THE BANK ACCOUNT. THEREFORE, I AM OF THE VIEW THAT THE DEPOS ITS INTO THE BANK ACCOUNT ARE PROPERLY EXPLAINED. FROM THE BANK ACCOU NT, I OBSERVED ITA NO.1290/HYD/2012 SHRI G.CHAKRAPANI, PRODDATUR. 3 THAT THE CASH WAS WITHDRAWN FROM THE BANK ACCOUNT E ITHER THROUGH THE ATM OF THROUGH CASH AND SUCH CASH WAS AGAINST AVAIL ABLE FOR USE IN THE BUSINESS. THERE WAS NO OPENING BALANCE IN THE ACCOUNT AND THE CLOSING BALANCE WAS LESS THAN RS.300. I, THEREFORE , AM OF THE VIEW THAT THE CASH AVAILABLE IN THE CASH WAS DEPOSITED INTO T HE BANK ACCOUNT AND WHENEVER REQUIRED FOR THE BUSINESS WAS WITHDRAWN EI THER THROUGH ATM OR TROUGH OTHER MEANS. THEREFORE, I AM SATISFIED WITH THE EXPLANATION OF THE APPELLANT THAT THE CASH WAS AVAI LABLE ON ALL THE DAYS WHEN THE DEPOSIT WAS MADE IN THE BANK ACCOUNT. THER EFORE, I DELETE THE ADDITION MADE OF RS.14,05,500/- BY THE ASSESSIN G OFFICER. 5. AGGRIEVED BY THE RELIEF GRANTED BY THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMIT TED THAT SINCE THE ASSESSEE DID NOT SUBMIT ANY SATISFACTORY EXPLAN ATION WITH SUPPORTING EVIDENCE, EXPLAINING THE SOURCE OF DEPOSITS INTO TH E BANK ACCOUNT IN SPITE OF AVAILING ADEQUATE OPPORTUNITIES, THE ASSESSING OFFI CER WAS COMPELLED TO COMPLETE THE ASSESSMENT UNDER S.144 OF THE ACT, ON THE BASIS OF MATERIAL ON RECORD BEFORE HIM. THE LEARNED DEPARTMENTAL REPRESE NTATIVE FURTHER SUBMITTED THAT THE CIT(A) WITHOUT PROPERLY EXAMININ G THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT, HAS ACCEPTED THE ASSESSEES EX PLANATION. 7. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE CIT(A). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. UNDISPUTEDLY, THE ASSESSING O FFICER COMPLETED THE ASSESSMENT UNDER S.144 OF THE ACT, BY MAKING THE A DDITION OF RS.14,05,500, ON ACCOUNT OF CASH DEPOSITS IN THE BANK ACCOUNT, IN THE ABSENCE OF SATISFACTORY EXPLANATION AND SUPPORTING EVIDENCE BE ING SUBMITTED BY THE ASSESSEE DESPITE SEVERAL OPPORTUNITIES GIVEN TO THE ASSESSEE FOR THAT PURPOSE. IT IS EVIDENT FROM THE ORDERS OF THE CIT(A ) THAT THE ASSESSEE HAS PRODUCED CERTAIN EVIDENCE, IN THE FORM OF CASH BOO K, BANK ACCOUNT COPY, ITA NO.1290/HYD/2012 SHRI G.CHAKRAPANI, PRODDATUR. 4 ETC., IN THE COURSE OF HEARING BEFORE THE CIT(A), AND HAS ALSO FURNISHED SOME EXPLANATION WITH REGARD TO THE DEPOSITS MADE IN THE BANK ACCOUNT. IT IS APPARENT THAT THESE ITEMS OF EVIDENCE AND EXPLANATI ON OF THE ASSESSEE WHICH WEIGHED WITH THE CIT(A), WERE NOT SUBMITTED BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER, THEREFORE, DID NOT HAVE THE OPPORTUNITY OF EXAMINING SUCH EXPLANAT ION AND EVIDENCE FURNISHED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE CIT(A), BEFORE ARRIVING AT HIS CONCLUSIONS IN THE COURSE OF ASSESSMENT. IT APPEARS FROM THE ORDER OF THE CIT(A) ALSO THAT HE HAS ACCEPTED THE EXPLANATI ON OF THE ASSESSEE SUBMITTED BEFORE HIM, WITHOUT GIVING OPPORTUNITY TO THE ASSESSING OFFICER TO OFFER HIS COMMENTS IF ANY, IN THE LIGHT OF THE SAID EXPLANATION, AND WITHOUT HIMSELF PROPERLY EXAMINING THE SOURCE OF SUCH DEPOS ITS. IN THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE DEEM IT JUST AND PROP ER TO SET ASIDE THE IMPUGNED ORDERS OF THE LOWER AUTHORITIES AND RESTOR E THE MATTER TO THE FILE OF THE ASSESSING OFFICER, FOR FRESH CONSIDERATION OF T HE MATTER IN DISPUTE IN ACCORDANCE WITH LAW AND AFTER GIVING REASONABLE OPP ORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSING OFFICER IS DIRECTED TO REF RAME THE ASSESSMENT IN ACCORDANCE WITH LAW, AFTER GIVING REASONABLE OPPORT UNITY OF HEARING TO THE ASSESSEE TO PUT FORTH ITS CASE. 9. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 7.12.2012 SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED/- 7 TH DECEMBER, 2012 ITA NO.1290/HYD/2012 SHRI G.CHAKRAPANI, PRODDATUR. 5 COPY FORWARDED TO: 1. SHRI G.CHAKRAPANI, PROP : SRI VENKATESWARA FURNITUR E AND ELECTRONICS, ROOM NO.1, BVS SHOPPING COMPLEX, PRODD ATUR. 2. 3. 4. INCOME - TAX OFFICER, WARD - 1 KADAPA. COMMISSIONER OF INCOME-TAX(APPEALS) GUNTUR C OMMISSIONER OF INCOME - TAX, TIRUPATI 5 DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.