Income Tax Officer, Ward -2, Kadapa V. Sri B.C. Gangi Reddy, Kadapa

ITA 1341/HYD/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5601 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 03-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained cash credit; Gift; Peak credit; Cost of acquisition
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 1341/HYD/2012 ASSESSMENT YEAR 2009-10 THE INCOME TAX OFFICER WARD-2 KADAPA VS. SRI B.C. GANGI REDDY PULIVENDULA, KADAPA DIST. PAN: AHAPB7810Q [APPELLANT] [RESPONDENT] APPELLANT BY: SMT. K. HARITHA RESPONDENT BY: SRI A.V. RAGHURAM DATE OF HEARING: 19.02.2014 DATE OF PRONOUNCEMENT: 19.02.2014 ORDER PER CHANDRA POOJARI, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A), GUNTUR DATED 21.06.2012 FOR AS SESSMENT YEAR 2009-10. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS: (1) THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS OF THE CASE. (2) THE LEARNED CIT(A) ERRED IN HOLDING THAT THERE ARE NO CASH DEPOSITS. THE LEARNED CIT(A) OUGHT TO HAVE HELD TH AT THE PEAK CREDIT OF RS. 22,63,563 ARRIVED AT IS BASED ON UNACCOUNTED CASH DEPOSITS APPEARING IN THE ASSESSEE 'S BOOKS OF ACCOUNT. (3) THE LEARNED CIT(A) OUGHT TO HAVE RECOGNISED THAT TH E CASH GIFT OF RS. 11,20,000/- BY ASSESSEE'S WIFE IS MADE WITHOUT ANY OCCASION AND ERRED IN HOLDING THAT THE GIFT IS GENUINE. ITA NO. 1341/HYD/2012 SRI B.C. GANGI REDDY, PULIVENDULA ============================ 2 (4) THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT T HE ASSESSEE FAILED TO PROVE THE LOAN CREDITORS TO THE EXTENT OF RS. 9,48,500/-. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2009-10 ON 23.09.2009, DE CLARING INCOME OF RS. 1,63,117/-. IT IS SEEN FROM THE ASSE SSMENT ORDER THAT THE ASSESSEE HAS MADE CASH DEPOSITS OF R S. 36,00,000/- IN ANDHRA BANK, PULIVENDULA. BESIDES T HE CASH DEPOSITS OF RS. 36 LAKHS, THE ASSESSEE HAS A CLOSIN G BALANCE OF RS. 3,60,023/- AS ON 31.03.2009 BUT THE CLOSING BAL ANCE WAS NOT ADMITTED IN HIS BALANCE SHEET FILED ALONG WITH THE RETURN OF INCOME. ACCORDING TO THE AO, THE ASSESSEE HAS NO T ADMITTED THESE TRANSACTIONS IN THE RETURN OF INCOME FILED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE HAS BEEN ASKED TO EXPLAIN THE SOURCES FOR THE ABOVE CASH DEPOSITS MADE IN HIS ACCOUNT. FURTHER, DURING THE Y EAR UNDER CONSIDERATION, THE ASSESSEE HAS PURCHASED A IMMOVAB LE PROPERTY BEARING FLAT NO. E-2, MCH NO. 6-3-1219/1/3/E- 2 IN CSR'S JUBILIANT RESIDENCY WITH A BUILT UP AREA OF 2 400 SFT, AT HYDERABAD FOR A CONSIDERATION OF RS. 37,62,850/-. T HE ASSESSEE HAS MADE CASH DEPOSIT ON VARIOUS DATES AS UNDER: SL. NO. DATE OF DEPOSIT AMOUNT (RS.) SOURCES 1. 09.04.2008 6,51,628 BELONGS TO HUF 2. 09.04.2008 7,09,009 MATURITY AMOUNT OF RD 3. 05.11.2008 15,00,000 GIFT OF RS. 11.20 LAKHS RECEIVED FROM WIFE SMT. VARA LAKSHMI AND LOAN CREDITORS OF RS. 3.80 LAKHS. ITA NO. 1341/HYD/2012 SRI B.C. GANGI REDDY, PULIVENDULA ============================ 3 4. 06.11.2008 20,00,000 ADVANCE GIVEN TO SRI AL REDDY FOR PURCHASE OF AGRICULTURAL LAND AND RECEIVED BACK RS. 11 LAKHS. 5. 06.02.2009 1,00,000 RS. 5,68,500 FROM LOAN CREDITORS, RS. 2.50 LAKHS WAS REALISED FROM DEBTORS AND RS. 1,81,500 FROM AGRICULTURAL INCOME. 4. THE ASSESSING OFFICER HAS OBSERVED THAT THOUGH SRI AL REDDY HAS GIVEN A STATEMENT THAT HE HAS RECEIVED RS . 11 LAKHS FROM THE ASSESSEE AND RETURNED SUBSEQUENTLY, NO DOCUMENTARY EVIDENCE WAS FILED IN SUPPORT OF THIS C LAIM. THE AO HAS ALSO OBSERVED THAT THE DEPOSIT OF RS. 6,51,6 28/- STATED TO BE RECEIVED FROM HUF STATUS, THE SAID CASH DEPOS IT WAS NOT FIGURED IN THE BALANCE SHEET OF HUF. THE AO HAS OBS ERVED THAT THE TOTAL LOAN CREDITORS MENTIONED IN THE RETU RN OF INCOME FILED WAS AT RS. 9,48,500/- IN THE NAME OF F OUR PERSONS AND SRI AL REDDY HAS ALSO GIVEN RS. 2 LAKHS , THROUGH PAY ORDER AND THE ASSESSEE HAS NOT MENTIONED THE IN TEREST PAID TO THE CREDITORS. THE AO HAS OPINED THAT THE GIFT STATED TO HAVE BEEN GIVEN BY THE ASSESSEE'S WIFE AMOUNTING TO RS. 11.20 LAKHS HAD NOT BEEN PROVED SUFFICIENTLY AND TH E SO- CALLED GIFT WAS MADE WITHOUT ANY OCCASION. KEEPING IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, THE AO HAD OP INED THAT THERE ARE SEVERAL UNACCOUNTED CASH DEPOSITS MADE IN THE ACCOUNT AND THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT SATISFACTORY AND ADOPTED THE PEAK BALANCE TO BE THE ITA NO. 1341/HYD/2012 SRI B.C. GANGI REDDY, PULIVENDULA ============================ 4 UNEXPLAINED CASH CREDIT AND THE PEAK BALANCE IS RS. 22,63,563/- AND THE SAME WAS ADDED U/S 68 OF THE IT ACT. 5. ON APPEAL, THE CIT(A) OBSERVED THAT THE ASSESSEE IS HAVING FOLLOWING SOURCES AND THERE IS NO NEED TO SU STAIN THE ADDITION. SL. NO. PARTICULARS AMOUNT (RS.) 1. CASH GIFT FROM WIFE SMT. B. VARALAKSHMI ASSESSEE UNDER THE FILES OF ITO, WARD-2, KADAPA SINCE THE YEAR 2003. P AN IS AHAPB7809F 11,20,000.00 2. LOAN FROM OUTSIDERS VIDE ACCOUNT PAY CHEQUES / D DS. 9,48,500.00 3. MATURITY OF DEPOSIT WITH SHRIRAM CHIT (P) LTD., INVESTED BY BC GANGI REDDY HUF ORIGINAL INVESTMENT WAS IN THE Y EAR 2003, IS RS. 3,25,000 MATURED FOR RS. 6,51,628.75 A ND ISSUED A DD. 6,52,628.75 4. DD ISSUED BY SBI, PULIVENDULA (DEPOSITED RS. 10, 000 P.M. IN RD A/C. OF SBI WITH EFFECT FROM 1.4.2003 ON MATURIT Y OF RD A/C. 7,09,009.00 5. BALANCE OUT OF OWN SAVINGS 3,33,713.00 TOTAL PURCHASE COST OF APARTMENT 37,62,850.00 ACCORDINGLY, HE DELETED THE ADDITION. AGAINST THIS , THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAS DEPOSITED THE FOLLOWING AMOUNT INTO THE BANK A/C. WITH ANDHRA BANK: SL. NO. DATE OF DEPOSIT AMOUNT CREDITED IN THE BANK A/C. (RS.) 1. 09.04.2008 6,51,628.75 2. 09.04.2008 7,09,009.00 3. 04.08.2008 INTEREST 7,719.00 4. 05.11.2008 15,00,000.00 5. 06.11.2008 20,00,000.00 TOTAL 48,68,356.75 ITA NO. 1341/HYD/2012 SRI B.C. GANGI REDDY, PULIVENDULA ============================ 5 7. ACCORDING TO THE ASSESSEE, THE ABOVE DEPOSIT WAS MA DE BY THE ASSESSEE FROM THE FOLLOWING SOURCES: (I) RS. 6,51,628 WHICH REPRESENTS MATURITY OF DOUBLE BOND ISSUED BY SHRIRAM CHITS PVT. LTD., AND THE SAME PERTAINS TO ASSESSEE HUF. (II) RS. 7,09,009 WAS DEPOSITED ON 9.4.2008 REPRESENTS RD OPERATED WITH SBI WHEREIN HE MADE RD OF RS. 10,000 PER MONTH FROM THE YEAR 2003 AND THE SAME HAD MATURED IN THE YEAR UNDER CONSIDERATION AND GOT RS. 7,09,009. (III) ANOTHER RS. 15 LAKHS DEPOSIT MADE ON 5.11.2008 IS OUT OF LOAN RAISED FROM FOUR PERSONS TO THE TUNE OF RS. 9,48,500 BY WAY DD AND BALANCE AMOUNT IS GIFT MADE BY HIS WIFE ASSESSED TO TAX WITH THE SAME AO WITH PAN: AHAPB7809F. (IV) ANOTHER RS. 20 LAKHS DEPOSITED WITH BANK ON 6.11.2008 REPRESENTS AMOUNT RETURNED BY A. LAKSHMI REDDY TO WHOM THE ASSESSEE ADVANCED THE AMOUNT FOR PURCHASE OF LAND WHICH WAS RETURNED ON CANCELLATION OF THE TRANSACTION AT RS. 11 LAKHS I.E., (1) ON 26.4.2008 AT RS. 8 LAKHS AND (2) ON 5.5.2008 AT RS. 3 LAKHS. (V) FURTHER, IT WAS SUBMITTED THAT THE ASSESSEE RECEIVED ANOTHER GIFT FROM HIS WIFE AT RS. 11,26,000 WHICH WAS DISCLOSED TO THE DEPARTMENT IN HER RETURN OF INCOME. ITA NO. 1341/HYD/2012 SRI B.C. GANGI REDDY, PULIVENDULA ============================ 6 8. BEING SO, CONSIDERING ALL THE FACTS AND CIRCUMSTANC ES OF THE CASE, THE CIT(A) DELETED THE ADDITION. AGAINST THESE FINDINGS OF THE CIT(A), THERE IS NO CONTRA MATERIAL BROUGHT ON RECORD BY THE AO. BEING SO, WHAT WAS EXPLAINED BY THE ASSESSEE IS TO BE CONSIDERED AS TRUE AND CORRECT AN D ACCORDINGLY, WE ARE INCLINED TO CONFIRM THE ORDER O F THE CIT(A) AND THE GROUNDS RAISED BY THE REVENUE ARE DI SMISSED. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH FEBRUARY, 2014. SD/- (SAKTIJIT DEY) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 19 TH FEBRUARY, 2014 TPRAO COPY FORWARDED TO: 1. THE INCOME TAX OFFICER, WARD-2, SIMHAPURI COLONY , KADAPA. 2. SRI B.C. GANGI REDDY, 1-157-M11, TEACHERS COLONY , PULIVENDULA, KADAPA DIST. 3. THE CIT(A), GUNTUR. 4. THE CIT, TIRUPATI. 5. THE DR BENCH 'A', ITAT, HYDERABAD