K Gangadhar & Others, Secunderabad V. ACIT, Circle-1, Nizamabad

ITA 1335/HYD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91784 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 16-07-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 21-07-2014
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: M V ANIL KUMAR
• Keywords: Additional evidence
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1335/HYD/2014 ASSESSMENT YEAR: 2005-06 K. GANGADHAR & OTHERS, NIZAMABAD [PAN: AAAAK5618B] VS THE ASST. COMMISSIONE R OF INCOME TAX, CIRCLE-I, NIZAMABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI M.V. ANIL KUMAR, AR FOR REVENUE : S HRI RAJAT MITRA , DR DATE OF HEARING : 1 6 - 0 7 - 201 5 DATE OF PRONOUNCEMENT : 22 - 0 7 - 2015 O R D E R THIS IS AN APPEAL BY THE AOP AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-18, MUMBAI (HA VING CONCURRENT JURISDICTION OVER HYDERABAD CASES) CONFIRMING THE A DDITION MADE BY THE ASSESSING OFFICER (AO) OF RS. 2,80,380/-. 2. BRIEFLY STATED, AS A PART OF ENQUIRY AGAINST PUR CHASE OF DEMAND DRAFTS WORTH RS. 1900 CRORES DEPOSITED WITH A.P. GO VERNMENT IN ORDER TO PARTICIPATE IN AUCTION/LOTTERY SYSTEM FOR ALLOTT ING BUSINESS FOR RETAIL LIQUOR SHOPS, THE DEPARTMENT HAS CONDUCTED SEARCHE S IN VARIOUS PLACES. ONE OF SUCH CASES IS THE CASE OF SHRI V. SRIKANTH A ND OTHERS. IN THAT SEARCH, THE DEPARTMENT CAME TO KNOW THAT ASSESSEE-A OP HAS PURCHASED DEMAND DRAFT WORKTH RS. 2,75,000/- AND AN AMOUNT OF RS. 82,500/- I.T.A. NO. 1335/HYD/2014 K. GANGADHAR & OTHERS :- 2 -: WAS SEIZED TOWARDS TAX (AS STATED BY THE AO IN THE ASSESSMENT ORDER). ASSESSEE HEREIN EXPLAINED THAT THE AOP WAS FORMED W ITH AN UNDERSTANDING TO PARTICIPATE IN THE AUCTION AND FOU R PERSONS CONTRIBUTED THE AMOUNT. I. K. GANGADHAR RS. 80,000 II. SMT. G. SUJANA RS. 50,000 III. S. SUDHAKAR GOUD RS. 75,000 IV. G. NAVEEN REDDY RS. 75,000 3. IT WAS SUBMITTED THAT THESE AMOUNTS WERE DEPOSIT ED IN THE BANK ACCOUNT OF SMT. G. SUJANA AND DEMAND DRAFT FOR RS. 2,75,000/- WAS PURCHASED FROM HER ACCOUNT AND SINCE THEY WERE NOT SUCCESSFUL IN THE AUCTION, THE AMOUNT WAS RETURNED. AO HOWEVER, ASKE D FOR EVIDENCE OF THE SOURCE OF ABOVE AMOUNTS AND BOOKS OF ACCOUNTS. ASSESSEE SUBMITTED THAT NO BUSINESS WAS DONE, HENCE NO BOOKS OF ACCOUNTS WERE MAINTAINED. AO WAS OF THE OPINION THAT ASSESSEE D ID NOT PRODUCE MEMBERS OF THE AOP AND HE TREATED THE AMOUNT OF RS. 2,80,380/- AS UN-EXPLAINED INVESTMENT FOR OBTAINING DEMAND DRAFT AND BROUGHT TO TAX THE SAME AMOUNT. 4. BEFORE THE LD.CIT(A), ASSESSEE HAS GIVEN DETAILE D EXPLANATIONS AND ALSO ADDITIONAL EVIDENCES IN THE FORM OF AFFIDAVITS FROM THE MEMBERS OF THE AOP. THESE WERE SENT TO THE AO FOR NECESSARY EXAMINATION AND AO VIDE LETTER DT. 18-08-2011 HAS SENT DETAILED REPORT TO CIT(A) NOT ACCEPTING THE CONTENTIONS THEREIN. LD. CIT(A) REPE ATING THE SAME AND HOLDING THAT ASSESSEE HAS FAILED TO SUBMIT DOCUMENT ARY EVIDENCE TO THE SATISFACTION OF AO, CONFIRMED THE SAME. I.T.A. NO. 1335/HYD/2014 K. GANGADHAR & OTHERS :- 3 -: 5. BEFORE US, LD. COUNSEL FILED ADDITIONAL EVIDENCE IN THE FORM OF ASSESSMENT ORDER COMPLETED IN THE CASE OF SMT. G. SUJANA, ONE OF THE MEMBERS OF AOP, WHO IN FACT WAS INSTRUMENTAL IN PUR CHASING THE DEMAND DRAFT FOR RS. 2,75,000/-. IT WAS SUBMITTED THAT HER BOOKS OF ACCOUNTS ALONG WITH THE DETAILS OF THE BANK DEPOSIT S AND WITHDRAWALS WERE SUBMITTED TO AO IN THE SCRUTINY ASSESSMENT AN D AO, DCIT, CIRCLE- I, NIZAMABAD HAS ACCEPTED ASSESSEE'S RETURN IN THE PROCEEDINGS U/S. 147 R.W.S. 148 OF THE ACT DT. 24-12-2009. IT WAS THE S UBMISSION THAT SINCE THE EXPLANATION IN THE HANDS OF ONE OF THE MEMBERS, WHO PURCHASED THE DEMAND DRAFT FOR THE ENTIRE AMOUNT WAS ACCEPTED BY THE AO, THE SAME SHOULD BE ACCEPTED IN THE HANDS OF THE AOP ALSO. 6. LD. DR HOWEVER, SUBMITTED THAT ASSESSEE HAS NOT FURNISHED ANY EVIDENCES IN SUPPORT AND RELIED ON THE ORDERS OF CI T(A). 7. I HAVE CONSIDERED THE ISSUE AND EXAMINED THE DOC UMENTS ON RECORD. THERE IS NO DOUBT THAT THE DEMAND DRAFT WA S PURCHASED FROM THE BANK ACCOUNT OF SMT. G. SUJANA. THERE WAS AN A MOUNT OF RS. 3,10,000/- DEPOSITED IN THE BANK ACCOUNT ON THAT DA TE I.E., ON 08-02- 2005. A PAY ORDER FOR RS. 2,75,000/- WAS PURCHASED IN THE NAME OF SUPERINTENDENT, EXCISE DEPARTMENT ON 18-02-2005. T HERE WAS ALSO OTHER CASH DEPOSITS IN THE BANK ACCOUNT AND THAT AS SESSEE'S EXPLANATION WAS ACCEPTED BY THE DY.CIT, CIRCLE-I, NIZAMABAD, IN THE SCRUTINY ASSESSMENT ORDER, WHICH WAS IN FACT CONSEQUENT TO R EOPENING OF THE ASSESSMENT TO VERIFY THE DEPOSITS MADE DURING THE Y EAR IN THE BANK ACCOUNT. SINCE THE EXPLANATION OF THE SAME PERSONS WAS ACCEPTED IN THE HANDS OF ONE OF THE MEMBER, WHO INCIDENTALLY HAPPEN ED TO BE PURCHASING THE DEMAND DRAFT FROM HER BANK ACCOUNT, I DO NOT SEE ANY REASON TO UPHOLD THE ORDER OF THE CIT(A). SINCE TH E AMOUNT CONTRIBUTED BY ONE OF THE MEMBERS WAS ACCEPTED ALONG WITH RECEI PTS FROM OTHER I.T.A. NO. 1335/HYD/2014 K. GANGADHAR & OTHERS :- 4 -: MEMBERS, THE ACTION OF AO RESULT IN ACCEPTING THE G ENUINENESS OF CREDITS BY THE MEMBERS OF AOP. THERE IS NO JUSTIFICATION IN TREATING THE VERY SAME AMOUNTS AS NOT GENUINE IN THE HANDS OF AOP. I N VIEW OF THIS, I MODIFY THE ORDERS OF THE CIT(A) AND DELETE THE ADDI TION MADE BY THE AO. 8. IN THE RESULT, ASSESSEE'S APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JULY, 2015. SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMB ER HYDERABAD, DATED 22 ND JULY, 2015 TNMM COPY TO : 1. K. GANGADHAR & OTHERS, NIZAMABAD. C/O. M. ANA NDAM & CO., CHARTERED ACCOUNTANTS, 7A, SURYA TOWERS, S.P. ROAD, SECUNDERABAD. 2. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1, NIZA MABAD. 3. CIT(APPEALS)-18, MUMBAI. 4. CIT-5/6, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.