Income Tax Officer, Ward-16(2), Hyderabad V. Sri P. Chandrasekhar, Nalgonda District

ITA 1385/HYD/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8989 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 24-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ESTHER NIANGH AUVUNG HANGAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Salary income; Corroborative evidences; Non compliance
• Section: 142(1)

Judgement Text

ITA NO.1385 OF 2013 P CHANDRASEKHAR, BHONGIR PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1385/HYD/2013 (ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER WARD 16(2) HYDERABAD VS. SR I P. CHANDRASEKHAR 1-3-25/1 KISAN NAGAR, BHONGIR, NALGONDA DISTT. PAN:ACJPP 6123 C (APPELLANT) (RESPONDENT) DEPARTMENT BY: SMT.ESTHER NIANGH AUVUNG HANGAL, (DR) ASSESSEE BY: SHRI S. RAMA RAO, ADVOCATE DATE OF HEARING: 21/01/2015 DATE OF PRONOUNCEMENT: 28/01/2015 O R D E R PER SAKTIJIT DEY, J.M. THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF THE LD CIT (A)-V, HYDERABAD, DATED 31.07.2013 PERTAINING TO A. Y 2009-10. THE DEPARTMENT BEING AGGRIEVED WITH THE DECISION OF THE LD CIT (A) IN DELETING THE ADDITION OF RS.50,89,000/- HAS RAIS ED THE FOLLOWING EFFECTIVE GROUNDS: 1. THE CIT (A) OUGHT TO HAVE NOT ALOWED RELIEF TO THE ASSESSEE IGNORING THE REMAND REPORT WHICH IS BASED ON INFORMATION FILED BY THE ASSESSEE. THE ASSESSEES ARGUMENT BEFORE THE CIT (A) IS WITHDRAWALS ARE RE- DEPOSITED IN THE BANK ACCOUNT, WHEREAS BEFORE THE A O THE SOURCE WAS SHOWN AS WITHDRAWALS FROM CHIT FUND COMPANY M/S PCS CHITS PVT LTD IN WHICH ASSESSEE IS A DIRECTOR. 2. THE CIT (A) OUGHT TO HAVE CONSIDERED THE REQUEST OF THE ASSESSEES WRITTEN SUBMISSION THAT ALTERNATI VELY, ITA NO.1385 OF 2013 P CHANDRASEKHAR, BHONGIR PAGE 2 OF 7 THE AO SHOULD HAVE CONSIDERED THE PEAK DEPOSITS OF CASH, INSTEAD OF THE GROSS AMOUNTS DEPOSITED (REFER PAGE 3 PARA 4 OF THE ORDER OF CIT (A)-V. 2. BRIEF FACTS OF THE CASE ARE, THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM SALARY; HOUSE PROPERTY, BUSINE SS IN CLOTH AND INCOME FROM OTHER SOURCES BESIDES AGRICULTURAL INCOME. FOR THE A.Y UNDER CONSIDERATION, THE ASSESSEE FILED HIS RETURN OF INCOME ON 23.01.2010 DECLARING TOTAL INCOME OF RS.5 ,01,884/-. ON THE BASIS OF INFORMATION AVAILABLE WITH THE AO T HAT THE ASSESSEE HAS MADE CASH DEPOSITS OF RS.19,01,000/- IN HIS SAVING BANK ACCOUNT WITH ICICI BANK, SECUNDERABAD AND RS.3 1,88,000/- IN YADAGIRI LAKSHMI NARASIMHA BANK, BHONGIR DURING THE FINANCIAL YEAR 2008-09, ASSESSEES CASE WAS SELECTE D FOR SCRUTINY ASSESSMENT. AS NOTED BY THE AO IN THE ASSESSMENT OR DER, INSPITE OF NOTICES ISSUED U/S 142(1) ON MORE THAN ONE OCCAS ION AS WELL AS SHOW CAUSE NOTICES ISSUED, NEITHER THE ASSESSEE, NO R ANY REPRESENTATIVE OF THE ASSESSEE APPEARED BEFORE THE AO TO EXPLAIN THE CASH DEPOSITS. IN VIEW OF THE NON COMPLIANCE OF THE ASSESSEE, AO PROCEEDED TO COMPLETE THE ASSESSMENT EX PARTE ON THE BASIS OF INFORMATION AVAILABLE ON RECORD. THE AO OBSERVED, A S THE ASSESSEE HAS NOT EXPLAINED THE SOURCES OF CASH DEPOSITED INT O THE BANK ACCOUNT, THE SAME HAS TO BE TREATED AS UNEXPLAINED CASH DEPOSIT AND ADDED TO THE INCOME. ACCORDINGLY HE MADE THE AD DITION AS A RESULT OF WHICH THE TOTAL INCOME WAS DETERMINED AT RS.55,90,884/- 3. BEING AGGRIEVED OF THE ADDITION MADE, ASSESSEE PREFERRED APPEAL BEFORE THE LD CIT (A). IN COURSE OF PROCEEDI NGS BEFORE THE LD CIT (A), ASSESSEE SUBMITTED THAT THE CASH DEPOSITS MADE INTO THE TWO SAVINGS BANK ACCOUNTS WERE FROM EXPLAINABLE SOU RCES. IT WAS ITA NO.1385 OF 2013 P CHANDRASEKHAR, BHONGIR PAGE 3 OF 7 SUBMITTED THAT DURING THE RELEVANT FINANCIAL YEAR, ASSESSEE HAD THE FOLLOWING RECEIPTS: A) RECEIPTS FROM CLOTH BUSINESS CARRIED ON IN THE NAME OF SRI MALLIKARJUNA AGENCIES, BHONGIR- RS.31,85,660 B) REMUNERATION RECEIVED FROM M/S PCS CHITS (P) LTD , BHONGIR: RS.9.00 LAKHS C) INCOME FROM HOUSE PROPERTY BEING RENT: RS. 1,62, 000 4. BESIDES THESE, IT WAS ALSO SUBMITTED BY THE ASSE SSEE, WITHDRAWALS DURING THE RELEVANT FINANCIAL YEAR FROM THE TWO BANK ACCOUNTS REFERRED TO BY THE AO WERE TOTALING TO RS. 53,02,800/-. THUS IT WAS SUBMITTED AS THE CASH DEPOSITS WERE MAD E OUT OF FUNDS AVAILABLE WITH THE ASSESSEE, THE ADDITIONS MA DE IS NOT JUSTIFIED. ON THE BASIS OF THE SUBMISSIONS MADE, TH E LD CIT (A) CALLED FOR A REMAND REPORT FROM THE AO. AFTER CONSI DERING THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPORT O F THE AO, AS WELL AS OTHER MATERIALS BROUGHT ON RECORD, THE LD C IT (A) DELETED THE ADDITIONS BY HOLDING AS UNDER: 7.1 THE LD AR BEFORE ME FILED THE DETAILS OF THE DEPOSITS MADE AND THE SOURCES AVAILABLE FOR MAKING EACH OF SUCH DEPOSIT. IT IS SUBMITTED BY THE LD AR THAT THE APPELLANT DERIVED INCOME OF RS.9.00 LAKHS FROM SALARY; RS.1,82,381/- TOWARDS INCOME FROM HOUSE PROPERTY AND ALSO ACHIEVED A TURNOVER OF RS.31,85,660/- FROM HIS BUSINESS. IT IS FURTHER SUBMITTED BY THE LD AR THAT THERE WERE WITHDRAWALS OF RS.26,95,000/- FROM ICICI BANK AND RS.26.00 LAKHS FROM UADAGIRI LAXMI NARASIMHA SWAMY BANK, BHONGIR WHICH ARE ALSO AVAILABLE WITH THE APPELLANT FOR RE-DEPOSIT. THE APPELLANT, THEREFORE, PLEADED T HAT HE POSSESSED THE REQUIRED SOURCES FOR THE DEPOSITS MADE INTO THE BANK. ITA NO.1385 OF 2013 P CHANDRASEKHAR, BHONGIR PAGE 4 OF 7 7.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS FIL ED BY THE APPELLANT. I FIND THAT THE SUBMISSIONS ALSO CONTAINED THE DETAILS OF WITHDRAWALS AND THE DEPOSI TS MADE. ON PERUSAL OF THE RECEIPTS AND PAYMENTS OF CASH, IT IS CLEAR THAT THE APPELLANT WAS IN THE POSSESSION OF THE REQUIRED SOURCES FOR THE DEPOSITS MADE. I ALSO FIND THAT THE GROSS RECEIPTS FROM ALL THE SOURCES AGGREGATE TO RS.42,47,660/- AND THE SAID AMOUNT WAS AVAILABLE WITH THE APPELLANT. FURTHER, T HE APPELLANT WAS IN POSSESSION OF EXCESS OF WITHDRAWAL S TO DEPOSITS BY RS.9,94,000/-. IF THE RECEIPTS FROM THE DECLARED SOURCES AND WITHDRAWALS FROM THE BANKS ARE CONSIDERED, IT CAN BE CONCLUDED THAT THE APPELLANT WAS IN POSSESSION OF THE REQUIRED SOURCES. THEREFORE, I AM SATISFIED THAT THE APPELLANT SATISFACTORILY EXPLAIN ED THE SOURCES FOR THE DEPOSITS AND THEREFORE, I DIRECT TH E AO TO DELETE THE ADDITION OF RS.50,89,000/-. 5. BEING AGGRIEVED OF THE AFORESAID DECISION OF THE LD CIT (A), THE DEPARTMENT IS IN APPEAL BEFORE US. THE LD DR SUBMIT TED THAT THE ASSESSEE HAS NOT AT ALL EXPLAINED THE SOURCES OF CA SH DEPOSITED INTO THE BANK ACCOUNTS AS THERE WAS TOTAL NON COMPL IANCE BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S. IT WAS SUBMITTED, EVEN BEFORE THE CIT (A) ALSO THE EVIDENC ES PRODUCED DOES NOT REVEAL THE FACT THAT THE ASSESSEE HAS BEEN ABLE TO MATCH THE DEPOSITS WITH WITHDRAWALS. IN THIS CONTEXT THE LD DR RELIED UPON THE OBSERVATIONS MADE BY THE AO IN THE REMAND REPORT. THUS IT WAS SUBMITTED THAT THE CIT (A) WAS NOT CORR ECT IN DELETING THE ENTIRE ADDITION. 6. THE LD AR ON THE OTHER HAND REFERRING TO THE WRI TTEN SUBMISSIONS AND EVIDENCES PRODUCED BEFORE THE FIRST APPELLATE AUTHORITY, SUBMITTED THAT THE ASSESSEE HAS SUFFICIE NTLY EXPLAINED ITA NO.1385 OF 2013 P CHANDRASEKHAR, BHONGIR PAGE 5 OF 7 THE SOURCE OF DEPOSITS INTO THE BANK ACCOUNT. THE L D AR REFERRING THE WORKSHEET OF WITHDRAWALS AND DEPOSITS, A COPY O F WHICH WAS ENCLOSED AT PAGE NO.26 OF THE PAPER BOOK, SUBMITTED THAT A VERIFICATION OF THE WITHDRAWALS AND DEPOSITS WOULD CLEARLY ESTABLISH ASSESSEES CLAIM THAT THE CASH DEPOSITED INTO THE TWO BANK ACCOUNTS WERE OUT OF CASH AVAILABLE WITH THE A SSESSEE FROM THE EARLIER WITHDRAWALS FROM THE SAME ACCOUNTS, AS WELL AS OTHER FUNDS. THE LD AR SUBMITTED THAT EVEN THOUGH ALL THE SE EVIDENCES WERE SUBMITTED BEFORE THE AO IN THE COURSE OF THE R EMAND PROCEEDINGS, BUT WITHOUT POINTING OUT ANY DISCREPAN CY IN ASSESSEES CLAIM, THE AO HAS MERELY RAISED DOUBTS R EGARDING THE SOURCE OF DEPOSITS. 7. IN THE REJOINDER LD DR SUBMITTED, ASSESSEES CL AIM THAT IT HAS RECEIPTS FROM CLOTH BUSINESS IS NOT VERIFIABLE AS THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNTS, NOR HE HA D MAINTAINED ANY PERSONAL CASH BOOK. THEREFORE, AT LEAST PEAK OF DEPOSITS CAN BE CONSIDERED FOR ADDITION. 8. WE HAVE HEARD THE PARTIES, PERUSED THE ORDERS OF THE REVENUE AUTHORITIES, AS WELL AS THE MATERIALS ON RECORD. IT IS A FACT ON RECORD THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE DID NOT COMPLY WITH THE NOTICES ISSUED BY THE AO, THERE FORE, THE AO WAS COMPELLED TO COMPLETE THE ASSESSMENT EX PARTE B Y ADDING THE CASH DEPOSITS MADE INTO THE TWO BANK ACCOUNTS REFER RED TO BY THE AO, SINCE THE SOURCE OF SUCH DEPOSITS REMAINED UNEX PLAINED. HOWEVER, BEFORE THE FIRST APPELLATE AUTHORITY, AS I T APPEARS FROM THE ORDER OF THE LD CIT (A) AS WELL AS MATERIALS PL ACED ON RECORD, ITA NO.1385 OF 2013 P CHANDRASEKHAR, BHONGIR PAGE 6 OF 7 THE ASSESSEE HAS NOT ONLY EXPLAINED THE SOURCE OF C ASH DEPOSITS, BUT HAS ALSO SUBMITTED SUPPORTING EVIDENCES IN THAT REGARD. ON A PERUSAL OF THE DETAILS OF DEPOSITS AND WITHDRAWALS AS SUBMITTED IN THE WORKSHEET, VIS--VIS BANK STATEMENT OF THE TWO BANK ACCOUNTS, THE CONTENTION OF THE ASSESSEE THAT IT WAS HAVING S UFFICIENT BALANCE OUT OF WITHDRAWALS MADE EARLIER TO MAKE THE DEPOSITS APPEARS TO BE CORRECT. MOREOVER, IT IS ALSO A FACT ON RECORD THAT THE ASSESSEE HAS RECEIPTS FROM CLOTH BUSINESS, INCOME F ROM SALARY, AS WELL AS RENTAL INCOME WHICH IS QUITE SUBSTANTIAL. T HEREFORE, IF THE CASH WITHDRAWALS MADE EARLIER FROM THE BANK ACCOUNT IS CONSIDERED TOGETHER WITH THE OTHER RECEIPTS, IT WIL L CLEARLY SHOW THAT THEY ARE SUFFICIENT TO EXPLAIN THE CASH DEPOSI TS MADE IN THE TWO BANK ACCOUNTS. IT IS ALSO EVIDENT THAT DURING T HE REMAND PROCEEDINGS, THE ASSESSEE HAS EXPLAINED THE SOURCE OF DEPOSITS DATE-WISE BY FURNISHING NECESSARY DETAILS. IT IS AL SO APPARENT FROM THE REMAND REPORT, A COPY OF WHICH WAS SUBMITTED BE FORE US, THE AO HAS VERIFIED ALL THESE EVIDENCES AND HAS NOT FOU ND ANY JUSTIFIABLE REASON TO DISBELIEVE THEM. HOWEVER, BY ENTERTAINING DOUBTS THE AO HAS OBSERVED THAT THE CLAIM OF THE AS SESSEE THAT IT HAS UTILIZED THE SAME WITHDRAWALS FOR THE PURPOSE O F DEPOSITS IN THE BANK ACCOUNT COULD NOT BE VERIFIED. IN OUR VIEW , SUCH OBSERVATION OF THE AO IS WITHOUT ANY BASIS. SINCE THE ASSESSEE HAS EXPLAINED THE SOURCE OF CASH DEPOSITS WITH SUPP ORTING EVIDENCES, IN OUR VIEW, THE LD CIT (A) WAS JUSTIFIE D IN DELETING THE ADDITION MADE BY THE AO. WE ALSO CANNOT ACCEPT THE SUBMISSIONS OF THE LD DR, THE CIT (A) SHOULD HAVE CONSIDERED TH E PEAK CASH DEPOSITS FOR ADDITION. AS STATED EARLIER, THE ASSES SEE HAS FURNISHED THE DETAILS OF THE WITHDRAWALS AND DEPOSITS IN A WO RKSHEET. A PERUSAL OF THE SAME CLEARLY REVEALS THAT THE WITHDR AWALS ARE MORE ITA NO.1385 OF 2013 P CHANDRASEKHAR, BHONGIR PAGE 7 OF 7 THAN THE DEPOSITS AND THERE ARE NO PEAK DEPOSITS. I N THESE CIRCUMSTANCES, NO ADDITION CAN BE MADE ON THE BASIS OF PEAK CASH DEPOSITS. IN VIEW OF THE AFORESAID, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CIT (A) WHICH IS ACCORDINGLY UP HELD. GROUNDS RAISED BY THE DEPARTMENT ARE DISMISSED. 9. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JANUARY, 2015. S D/ - S D/ - (P.M. JAGTAP) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 28 TH JANUARY, 2015. VNODAN/SPS COPY TO: 1. INCOME TAX OFFICER WARD 16(2) ROOM NO.615, 6 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH HYDERABAD 500004 2. SHRI P. CHANDRASEKHAR, 1-3-25/1 KISAN NAGAR, BHONGI R, NALGONDA 3. THE CIT(A) - V HYDERABAD 4. THE CIT HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER