Sri Shapuram Malla Reddy, Hyderabad V. ITO, Ward - 8(2), Hyderabad

ITA 1346/HYD/2014

• Counselvise Citation: 134622514 RSA 2014
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 09-10-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 25-07-2014
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: A V RAGHURAM
• Keywords: Reasonable cause
• Section: 142(1); 147; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1346/HYD/2014 ASSESSMENT YEAR: 2005-06 SRI SHAPURAM MALLA REDDY, KANAKAMAMIDI VILLAGE, RANGA REDDY DISTRICT [PAN: BPOPS0598P] VS INCOME TAX OFFICER, WARD-8(2), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V. RAGHU RAM, AR FOR REVENUE : SHRI B. KURMI NAIDU, DR DATE OF HEARING : 3 0 - 1 0 - 201 5 DATE OF PRONOUNCEMENT : 20 - 1 1 - 2015 O R D E R THIS APPEAL IS PREFERRED BY ASSESSEE AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-III, HYDERABAD DATED 15-04-2014. THE APPEAL WAS FILED BELATEDLY WITH A DELAY OF TWENTY DAYS AND ASSESSEE FILED CONDONATION PETITION EXPLAI NING THE DELAY. IT WAS SUBMITTED THAT THE ORDER OF LD. CIT(A)-III W AS RECEIVED ON 06-05-2014 AND APPEAL SHOULD HAVE BEEN FILED ON OR BEFORE 06-07-2014. IT WAS SUBMITTED THAT DELAY IN FILING IS ON ACCOUNT OF STRINGENT FINANCIAL POSITION TO PAY THE APPEAL FEE. ACCORDINGLY, THERE WAS DELAY IN ARRANGING THE AMOUNT TO PAY THE APPEAL FEE AND ASSESSEE REQUESTED FOR CONDONING THE DELAY OF TWENT Y DAYS IN FILING THE APPEAL. 2. AFTER CONSIDERING THE CONTENTIONS OF DR, I AM OF THE OPINION THAT THERE IS A REASONABLE CAUSE FOR FILING THE APP EAL BELATEDLY BY I.T.A. NO.1346 /HYD/2014 SRI SHAPURAM MALLA REDDY :- 2 -: ASSESSEE AND ACCORDINGLY, THE DELAY IS CONDONED AND THE APPEAL IS ADMITTED. 3. BRIEFLY STATED, ASSESSEE IS AN AGRICULTURIST AND HAS NO OTHER INCOME. THE ASSESSING OFFICER (AO) SEEMS TO HAVE R ECEIVED SOME INFORMATION THAT ASSESSEE HAS DEPOSITED MONEYS IN T HE BANK ACCOUNT. ORIGINALLY, ASSESSMENT PROCEEDINGS WERE IN ITIATED BY ISSUING NOTICE U/S. 142(1) OF THE INCOME TAX ACT [A CT] AND ASSESSMENT WAS COMPLETED U/S. 144 OF THE ACT. THIS ASSESSMENT WAS QUASHED BY THE CIT(A)-III, HYDERABAD AS THE ISS UANCE OF NOTICE WAS NOT VALID AND WAS NOT SERVED WITHIN THE STIPULA TED TIME. THEREAFTER, AO AGAIN RESORTED TO PROCEEDINGS U/S. 1 47 BY ISSUING NOTICE ON 30-03-2008. EVEN THOUGH IT SEEMS ASSESSE E HAD FILED VARIOUS DETAILS, BASED ON THE EARLIER ORDER U/S. 14 4, AO TREATED CASH DEPOSITS TO THE EXTENT OF RS. 10,06,100/- AS UNEXPLAINED. DURING THE IMPUGNED YEAR, ASSESSEE HAS DEPOSITED AM OUNTS IN THE BANK ACCOUNT FROM 26-11-2004 TO 19-03-2005 TO AN EX TENT OF RS. 11,24,500/-. IT WAS EXPLAINED THAT ASSESSEE HAS SO LD AGRICULTURAL LAND SITUATED AT SURVEY NO. 66/C/1 AND SURVEY NO. 6 7/C/1 FOR A CONSIDERATION OF RS. 7,84,000/- AND THE SAME WAS DE POSITED IN THE BANK. NOT ONLY THAT, THE NEIGHBORING AGRICULTURIST ALSO SOLD THEIR LANDS AND THE MONEYS WERE DEPOSITED IN ASSESSEES A CCOUNT WHICH WAS LATER ON RETURNED BY WAY OF CHEQUES. IT WAS S UBMITTED THAT ALL THE DEPOSITS PERTAIN TO SALE OF AGRICULTURAL LAND O F NOT ONLY ASSESSEE, BUT ALSO OF NEIGHBORING AGRICULTURISTS AN D ASSESSEE FILED NECESSARY EVIDENCES IN SUPPORT OF THE CONTENTIONS, INCLUDING THE AGREEMENT OF SALE ENTERED BEFORE THE PROPERTY WAS R EGISTERED. HOWEVER, AO GIVE CREDIT TO THE AMOUNT OF RS. 1,18,0 00/- ON THE BASIS OF THE ENCUMBRANCE CERTIFICATE ISSUED BY THE SUB-REGISTRAR, CHEVELLA AND BROUGHT THE BALANCE AMOUNT TO TAX, IGN ORING THE I.T.A. NO.1346 /HYD/2014 SRI SHAPURAM MALLA REDDY :- 3 -: CONTENTIONS OF ASSESSEE. BEFORE THE LD. CIT(A) IT WAS CONTENDED THAT AO RELIED ON THE ORDER U/S. 144 WHICH WAS QUAS HED AND IGNORED ALL THE SUBMISSIONS MADE BY ASSESSEE BEFORE THE AO AND IN FACT SPECIFICALLY BROUGHT TO THE NOTICE OF THE CIT( A) THAT ASSESSEE HAD TO COMPLAIN TO ADDL. CIT WHO INSTRUCTED THE AO TO TAKE ON RECORD THE MATERIAL AND PERHAPS BEARING GRUDGE FOR COMPLAINING TO THE ADDL. CIT, AO HAS COMPLETED THE ASSESSMENT WITH OUT GOING INTO THE MATERIAL FILED. IT WAS FURTHER REQUESTED BEFOR E THE CIT(A) THAT ALL FACTS ARE VARIABLE AND WITHOUT VERIFICATION, AO BRUSHED ASIDE THE SAME ON THE GROUND THAT THE DETAILS WERE NOT FILED DURING THE EARLIER PROCEEDINGS, HENCE AN AFTERTHOUGHT. IT WAS FURTHER PRAYED TO THE CIT(A) TO CONSIDER VERIFICATION OF THE MATER IAL THAT WAS FILED BEFORE THE AO WITH THE SUBMISSIONS WHICH DEMONSTRAT E THE SOURCES FOR DEPOSITS. 4. LD. CIT(A), HOWEVER, REJECTED ASSESSEES CONTENT IONS BY STATING AS UNDER: 4.3 I HAVE SEEN CAREFULLY THE FACTS AND EVIDENCE AND I FIND THAT THE EXPLANATION OF THE APPELLANT IS UNACC EPTABLE. FIRST OF ALL, IT IS BEYOND HUMAN PROBABILITY THAT I N THE AREA THE APPELLANT IS THE ONLY ONE WHO HAS A BANK ACCOUNT. IT IS ONCE AGAIN BEYOND HUMAN PROBABILITY THAT PEOPLE WOULD SE LL THEIR LANDS AND DEPOSIT THE MONEY IN THE APPELLANTS BANK ACCOUNTS AND THAT TOO WITHOUT ANY RECEIPT OR ANY PAPERWORK. FURTHER, IN SOME CASES, THE AMOUNT HAS BEEN PURPORTED TO BE GIV EN BACK BY CHEQUE. IT IS NOT UNDERSTOOD AS TO WHY THE AMOU NT WOULD BE DEPOSITED IN THE APPELLANTS BANK ACCOUNT WHEN T HE OTHER PERSON HAD HIS OWN BANK ACCOUNT AND WAS RECEIVING T HE MONEY BY CHEQUE. 4.4 MOREOVER, IT IS TO BE UNDERSTOOD THAT THE APPEL LANT IS IN CONTRACT WITH THE BANK AT THE TIME OF OPENING A BANK ACCOUNT AND THAT CONTRACT CLEARLY STATES THAT THE A PPELLANT CANNOT ALLOW HIS BANK ACCOUNT TO BE USED FOR DEPOSI TING OR USING ANYBODY ELSES MONEY. THIS IS A CONTRAVENTIO N OF NOT I.T.A. NO.1346 /HYD/2014 SRI SHAPURAM MALLA REDDY :- 4 -: ONLY THE ACCOUNT OPENING CONTRACT BUT ALSO A CONTRA VENTION OF THE BANKING STATUES. SECONDLY, THE RETURN OF THIS MONEY IS NOT EVIDENCED IN OTHER CASES EXCEPT FOR ONE. 4.5 GIVEN THE ABOVE FACTS AND CIRCUMSTANCES, I HOLD THAT THE EXPLANATION AND EVIDENCE PRESENTED BY THE APPELLANT IS ONLY SELF-SERVING IN NATURE AND CANNOT EXPLAIN T HE SOURCE OF DEPOSITS IN THE BANK ACCOUNT OF THE APPELLANT. THE REFORE, I HOLD THAT THE ADDITION MADE BY THE ASSESSING OFFICER IS CORRECT AND DOES NOT REQUIRE ANY INTERFERENCE. 5. LD. COUNSEL REFERRING TO THE EXPLANATIONS GIVEN BEFORE THE AO AND THE INFORMATION FILED WITH THE AO ON 07-12-2009 ALONG WITH ENCLOSURES SUBMITTED THAT ASSESSEE IS HAVING ONLY A GRICULTURAL INCOME. IT WAS DECLARED AT RS. 1,64,400/- AND FURT HER REFERRED TO THE AGREEMENT OF SALE WHEREIN ASSESSEE HAS RECEIVED ADVANCES AND SALE CONSIDERATION WAS SHOWN AT A HIGHER AMOUNT. I T WAS FURTHER SUBMITTED THAT SALE AGREEMENT WAS FOR AN AMOUNT OF RS. 5,55,000/- PER ACRE. IN SUPPORT OF THE CONTENTIONS ALSO FILED CONFIRMATION LETTERS FROM THE NEIGHBORING AGRICULTU RIST, CONFIRMING THE DEPOSIT OF SALE PROCEEDS IN ASSESSEES BANK ACC OUNT. IT WAS FURTHER SUBMITTED THAT ASSESSEE HAS NO OTHER SOURCE S OF INCOME AND ONLY SOURCE WAS INCOME FROM AGRICULTURAL LAND. THE CONTENTIONS ARE REJECTED WITHOUT ANY VERIFICATION. IT WAS FURTHER SUBMITTED THAT ASSESSEE IS SEMI-LITERATE PERSON AND DID NOT KNOW THE IMPLICATIONS OF DEPOSITING OTHERS MONEY IN THE BANK ACCOUNT AND SUBMITTED THAT WITH A LOT OF DIFFICULTY, HE IS ABLE TO GATHER EVIDENCES IN SUPPORT OF THE CONTENTIONS, WHICH ARE FACTS, WHICH THE LD. CIT(A) ALSO REJECTED WITHOUT ANY VERIFICATION. LD. DR HOWEVER, RELIED ON THE ORDER OF THE AO AND CIT(A) TO SUBMIT THAT ASSESSEE HAS NOT GIVEN ANY PROPER EXPLANATION. I.T.A. NO.1346 /HYD/2014 SRI SHAPURAM MALLA REDDY :- 5 -: 6. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERU SED THE PAPER BOOK ON RECORD. THERE SEEMS TO BE INJUSTICE DONE TO ASSESSEE IN THE PROCEEDINGS. BASICALLY, ASSESSEE I S AN AGRICULTURIST AND DOES NOT HAVE ANY OTHER SOURCE OF INCOME. IT I S A FACT THAT ASSESSEE HAS SOLD SOME AGRICULTURAL LAND AND HAS DE POSITED THE PROCEEDS IN THE BANK ACCOUNT. THE NEIGHBORING AGRI CULTURIST ALSO SOLD LANDS AT THE SAME TIME AND THEY ALSO CONFIRMED THAT AMOUNTS WERE DEPOSITED BY THEM ALSO IN THE SAME ACCOUNT. L D. CIT(A) WHILE ACKNOWLEDGING THAT ASSESSEE HAS SUBMITTED EVIDENCES ONLY IN ONE CASE, ABOUT THE REFUNDING THE MONEY BY WAY OF CHEQU E, HOWEVER, DID NOT EVEN HAS GIVEN CREDIT TO THE AMOUNT. IT IS ALREADY ON RECORD THAT PROCEEDINGS INITIATED U/S. 142(1) EARLIER WERE QUASHED BY THE AO. ON THE SAME MATERIAL, ON THE SAME ISSUE, PROCE EDINGS WERE AGAIN INITIATED U/S. 147. BE THAT AS IT MAY, AO RE FUSED TO TAKE THE EVIDENCES BEING FILED BY ASSESSEE IN THE PENDING PR OCEEDINGS WHICH ARE NO WAY CONNECTED WITH THE EARLIER PROCEEDINGS. SINCE ASSESSEE HAS COMPLAINED TO THE ADDL. CIT, THERE COULD BE TRU TH IN ASSESSEES CONTENTIONS THAT AO MAY HAVE HAD SOME GRUDGE AGAINS T ASSESSEE. CONSIDERING THE FACTS OF THE CASE AND THE EVIDENCES FURNISHED BY ASSESSEE AND ALSO KEEPING IN MIND THAT ASSESSEE DO NOT HAVE ANY SOURCE EXCEPT INCOME FROM AGRICULTURAL OPERATIONS A ND SALE OF AGRICULTURAL LAND WHICH ITSELF IS EXEMPT FROM CAPIT AL GAINS, I AM OF THE OPINION THAT ASSESSEE HAS GENUINELY AND BONAFID ELY EXPLAINED THE SOURCES. SINCE EITHER THE AO OR CIT(A) REFUSED TO MAKE VERIFICATION, I AM OF THE OPINION THAT NO USEFUL PU RPOSE WOULD BE SERVED IF THE MATTER IS RESTORED AGAIN TO THE SAME AO. CONSIDERING THE FACTS PLACED ON RECORD, I AM SATISFIED THAT ASS ESSEE HAS SOURCES FOR THE CASH DEPOSITS IN THE BANK ACCOUNT AS EXPLAI NED BY HIM AND THEREFORE, NO AMOUNT CAN BE TREATED AS UNEXPLAINED UNDER THE I.T.A. NO.1346 /HYD/2014 SRI SHAPURAM MALLA REDDY :- 6 -: PROVISIONS OF THE ACT. AO IS DIRECTED TO DELETE TH E AMOUNT. THE GROUNDS RAISED ARE ALLOWED. 7. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH NOVEMBER, 2015 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 20 TH NOVEMBER, 2015 TNMM COPY TO : 1. SRI SHAPURAM MALLA REDDY, KANAKAMAMIDI VILLAGE, RANGA REDDY DISTRICT. C/O. K. VASANTKUMAR, A.V. RA GHU RAM, ADVOCATES, 610, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2. INCOME TAX OFFICER, WARD-8(2), I.T. TOWERS, A.C. GUARDS, HYDERABAD. 3. CIT(APPEALS)-III, HYDERABAD 4 . CIT - II , HYDERABAD . 5 . D.R. ITAT, HYDERABAD. 6 . GUARD FILE.