Income Tax Officer, Hyderabad V. Sri Achan Srihari, Hyderabad

ITA 1405/HYD/2013

• Counselvise Citation: 140522514 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 25-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 28-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: P BALAKRISHNA
• Keywords: Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SMT.ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.1405/HYD/13 : ASSESSMENT YEAR 2009 - 10 INCOME TAX OFFICER WARD 6(1), HYDERABAD V/S. SHRI ACHAN SRIHARI, HYDERABAD (PAN AJPPA 6675 H ) (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.18/HYD/2014 (IN ITA NO.1405/HYD/13) : ASSESSMENT YEAR 2009 - 10 SHRI ACHAN SRIHARI, HYDERABAD (PAN AJPPA 6675 H ) V/S. INCOME TAX OFFICER WARD 6(1), HYDERABAD (CROSS OBEJCTOR) (APPELLANT IN APPEAL) APPELLANT BY : S HRI RAJAT MITRA, DR RESPONDENT BY : SHRI P.BALAKRISHNA DATE OF HEARING 2 5 .2.2015 DATE OF PRONOUNCEMENT 26.2.2015 O R D E R PER P.M.JAGTAP, ACCOUNTANT MEMBER : TH IS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A) IV, HYDERABAD DATED 16.8.2013, WHEREBY SHE DELETED THE ADDITION OF RS.31,42,000 MADE BY THE ASSESSING OFFICER AND DIRECT E D THE ASSESSING OFFICER TO ESTIM A T E THE INCOME O F THE ASSESSEE BY APPLYING A NET P R OFIT RATE OF 1. 1 5% OF THE TURNOVER, AND IT IS BEIN G DISPOSED OF ALONGWITH TH E CROSS OBJECTION F IL E D BY TH E ASSESSEE BEING CO NO.18/HYD/2014, WHICH ME R ELY SUPPORTS T HE ORDER O F THE LEARNED CIT(A). I TA NO. 1 405 /H YD/20 1 3 & CO THEREIN SHRI ACHAN SRIHARI, HY DERABAD 2 2. THE ASSESSEE IN TH E PR E SEN T CA S E IS AN I ND I V I D UAL, WHO I S ENGAGED IN TH E BU S IN ES S OF PROVIDING TEMPORARY FUN D S TO THE VISA STUDENTS. TH E RETURN O F INCOME FO R TH E Y E AR UN D ER CONSIDERATION WAS FIL E D BY HIM ON 26.11.2009 DECLARING A TOTAL INCOME O F RS .2,66,700. AS PER THE AIR IN F ORM A TION RECEIVED BY THE ASSESSING OFFICER, TH E ASSESSEE WAS M A INTAININ G A BANK ACCOUNT WITH ICICI BANK REFLECTING SEVERAL CASH TRAN S ACTION S . DU R IN G TH E COU R SE ASSESSMENT P ROCEEDINGS, THE ASSESSEE , THEREFORE , WAS C ALL E D UPON BY THE ASSESSING OFFICER TO FURNISH THE DETAILS OF THE BANK AC C OUN T MAIN T AINED WITH ICICI BANK. IN REPLY, I T W AS SUBMITTED BY THE ASSESSEE T HAT HE IS HAVING ONLY TWO BANK AC C OUN T S WITH ROYAL BANK OF SCO T L AND AND UNION BANK OF INDIA AND NO ACCOUNT WA S MAINTAINED WITH ICICI BANK. FURTHER ENQUI R I E S MADE BY THE ASSESSING OFFICER , HOWEVER , REVEALED THAT THE ASSESSEE WAS MAINTAINING AN AC C OUN T BEARING NO.000801543335 WITH ICICI BANK, KHAIRATABAD BRANCH, RE F LEC TING SEVERAL CASH TRAN SA CTIONS, THE PEAK CREDIT OF WHICH WAS RS.31,42,400. THE ASSESSING OFFICER THEREFORE, REQUIRED THE ASSESSEE TO OFFER HIS EXPLANATION IN THE MATTER, AND SIN C E NO SUCH EXPLANATION W AS OFFERED BY TH E ASSESSEE , AN ADDITION OF RS .31 ,42,400 WAS MADE BY TH E ASSESSING OFFICER TO THE TOTAL INCOME OF TH E ASSESSEE ON ACC O UN T OF PEAK CREDIT IN TH E B A NK ACCOUNT WITH ICICI BANK, IN TH E ASSESSMENT COMPL E TED UN D ER S.143(3 ) VIDE ORDER D A TE D 30.11.2011. 3. AGAINST THE O R DER OF THE ASSESSING OFFICER PASSED U N DER S.143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE B E FORE THE LEARNED CIT(A). DURING TH E COU R SE OF APPELLATE P R OCE E DIN G S BEFORE THE LEARNED CIT(A), IT WAS SUB M I T TED BY THE ASSESSEE T HA T TH E BANK AC C OUNT WITH THE ICICI BANK HAVING BEEN ALREADY CLOSED IN JUNE, 2009, THE E X ISTENC E OF THE BANK AC C OUN T WAS DENIED DURING TH E COU R SE OF ASSESSMENT PROCE E DIN G S. IT WAS ALSO SUBMITTED BY THE ASSESSEE THAT THE TR A NSACTION S RE F LECTE D IN THE SAID BANK AC C OUN T I TA NO. 1 405 /H YD/20 1 3 & CO THEREIN SHRI ACHAN SRIHARI, HY DERABAD 3 REL A TED TO HIS BUSINESS OF PROVIDING TEMPO R ARY LOANS TO THE VISA STUDENTS AND THE SAME WERE DULY REFLECTED I N THE TURNOVER OF THE ASSESSEES BUSINESS AMOUNTING TO RS.3,12,92,175. IT WAS CONTENDED THAT A PROFIT OF RS.3,04,700 AT THE RATE OF 0.97% OF TH E SAID TUR N OV E R WAS ALREADY OFFERED BY THE ASSESSEE IN TH E RETURN OF INCOME AND SIN C E THE TOTAL CREDITS OF R S .2,58 , 27,200 REFL E CTED IN THE ICICI BANK ACCO U NT WERE ALR E ADY IN C LU D ED IN THE TOTAL TURNOVER OF R S .3,12,92,175, NO ADDIT I ON ON AC C OUNT O F TH E TRANSACTION S REFLECTED IN THE I CICI BANK ACC OUNT WAS SEPARATELY CALLED FOR. THE LEARNED CIT(A) FOUND MERIT IN THE CONTENTIONS OF THE ASSESSEE ON THIS ISSUE, AND DIRECTED THE ASSESSING OFFICER TO ESTIMATE THE INCOME OF THE ASSESSEE AT 1.15% OF THE TOTAL TURNOVER INCLUDING THE TURNOVER REFLECTED IN T HE ICICI BANK ACCOUNT. AGG R IEVED BY THE ORDER OF THE LEARNED CIT(A), R E VENU E HAS PREFERRED THIS APPEAL B E FORE THE T RI B UNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED TH A T THE ASSESSEE DURING TH E COURSE OF ASSESSMENT P R OCEE D INGS HAD DENIED BEFORE THE ASSESSING OFFICER OF HAVING ANY BANK ACCOUNT WITH THE ICICI BANK . ON EN Q UIRY MADE BY THE ASSESSING OFFICER, IT WAS HOWEVER, REVEALED THAT A BANK ACCOUNT WITH ICICI BANK KHAIRATABAD WAS BEING MAINTAINED BY TH E ASSESSEE R E FLECTING VARIOUS CASH TRANS A CTION S DURING THE YEAR UN D ER CONSIDERATION WITH PEAK CREDIT OF R S .3 1 ,42,400 AS WORKED OUT BY THE ASSESSING OFFICER. WHEN THIS POSITION W AS CONFRONTED BY TH E ASSESSING OFFICER TO THE ASSESSE E, THE LATTER FAIL E D TO OFFER ANY EXPLANATION AND THE ASSESSING OFFICER WAS LEFT WITH NO OPTION, BUT TO ADD THE AMOUN T O F P E AK CREDIT TO THE TOTAL INCOME O F TH E ASSESSEE . DURI NG THE COURSE OF H E ARING B E FORE THE LEARNED CIT(A), THE ASSESSEE , HO WE VER , ACCEP TED THE EXI S TENCE OF THE B A NK AC C OUN T WITH I CICI BANK IN HIS NAME AN D E XPLAIN E D THAT T H E TRANSACTION S REFLECTED THEREIN WE R E I TA NO. 1 405 /H YD/20 1 3 & CO THEREIN SHRI ACHAN SRIHARI, HY DERABAD 4 NOTHING BUT THE RE G ULAR TRANS A C T ION S RELATING TO HIS BU S IN E SS OF PROVIDING TEMPORARY LO A NS TO VISA STUDENTS. HE ALSO EXPLAIN E D THAT THE TOTAL CR E DITS REFLECTED IN THE SAID BANK ACCOUNT AMOUNTING TO RS.2,58,2 7 ,200 WER E ALREADY IN C LU D ED IN T HE TURNOVER OF RS.3,12,92,175 ON WHIC H INCOME OF RS .3,04,700 CO MING T O A NET PROFIT OF 0.97% WAS OFFERED IN TH E RETURN OF INCOME. AS RIGHTLY CON TENDED BY T H E LEARNED DEPARTMENTAL REPRESENTATIVE , THIS EXPLANATION OF THE ASSESSEE WAS ACCEPTED BY THE LEARNED CIT(A) WITHOUT VERIFYING THE SAM E FROM THE BOOK S O F ACCOUNT OR OTHER RELEVANT RECORD. SH E ALSO DID NO T GIVE ANY OPPORTUNITY TO TH E ASSESSING OF FICER TO VERIFY THE S AME IN SPI T E OF THE FACT THAT T HE EXI S TENC E OF BANK ACCOUNT WITH ICICI BANK WA S D E NI E D B Y TH E ASSESSEE DURING TH E COURSE OF ASSESSMENT PR O CE E DIN G S, AND THE EXPLANATION AS REGARDS THE TRANSAC T ION S R E FLECT E D IN THE SAID BANK AC C OUN T AS O F FER ED BEFORE THE LEARNED CIT(A), WAS NO T OFFERED BEFOR E TH E ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEE D IN G S DES P ITE SUF F I CI ENT OPPOR T UNITY GIVEN BY TH E ASSESSING OFFICER. 5. AT THE TIM E OF H E ARING B E FORE US, THE LEARNED DEPARTMENTA L REPRESENTATIVE HAS FI L ED A COPY OF TH E INCOME AND EXPENDITURE ACCOUNT O F TH E ASSESSEE FOR TH E Y E AR UN D ER CONSIDERATION , WHICH S H OWS THAT TH E GROSS REC E IPTS AS DECLARED BY THE ASSESSEE WERE ONLY RS.9,08,650. HE HAS ALSO FIL E D A COPY OF THE BALANCE SHEET OF THE ASSESSEE AS ON 31.3.2009, WHI CH SHOW ED THE TOTAL BANK BALANCE OF RS.5,825 ONLY , WHEREAS THE ACCOUNT OF TH E ASSESSEE WITH I CICI BANK WAS HAVING A BALANCE OF RS.17,873 AS ON 31.3.2009. H AVING REGARD TO ALL THESE FACTS OF TH E C A S E, WE FIND M E RIT I N TH E CONTENTION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE M A T T ER SHOULD B E SEN T BACK TO THE ASSESSING OFFICER FOR DECIDING THE SAME AFR E SH AFTER VERIFYING THE E XPLANATION OF TH E ASSESSEE F R OM THE RELEVANT RECORDS. EVEN THE LEARNED COUN SE L FOR I TA NO. 1 405 /H YD/20 1 3 & CO THEREIN SHRI ACHAN SRIHARI, HY DERABAD 5 THE ASSESSEE AT THE TIME O F H E ARING B E FORE US HAS NO T BEEN ABLE TO RAISE ANY M AT ERIAL CONTENTION TO OBJECT TO THE SAME. WE TH E R E FORE, SET ASIDE THE I M PU G N E D ORDER OF THE LEARNED CIT(A) AND RESTORE THE MATTER TO TH E FILE O F TH E ASSESSING OFFICER FOR DECIDING TH E SAME AFRESH, AF T ER VERIFYING THE EXPLANATION OF TH E ASSESSEE AS REGARDS THE TRANSAC T ION S REFLECTED IN TH E ICICI BANK ACCOUNT. NEEDLESS TO O B S ERVE THAT THE ASSESSING OFFICER SHALL AFFORD SU FF IC IE NT OPPOR T U N ITY OF B E ING H EARD TO THE ASSESSEE BEFORE DECI DI NG THE ISSUE. 6. TH E CROSS OBJECTION FILED BY TH E ASSESSEE ONLY SUPPORTS THE IMPU G N E D ORD E R OF TH E LEARNED CIT(A), AND S IN C E THE SAME HAS BEEN SET ASIDE BY US, TH E CRO S S OBJ E CTION OF TH E ASSESSEE IS TR E ATED AS DISMISS ED. 7. IN THE RESULT, APPEAL O F THE REVENUE IS TR E A T ED AS ALLOWED FOR STATISTICAL PURPO S ES AND THE CROSS OBJECTION OF TH E ASSESSEE IS DISMI S SED. ORDER PRONOUNCED IN THE COURT ON 26 TH FEBRUARY, 2015 SD/ - SD/ - ( ASHA VIJAYARAGHAVAN ) ( P.M.JAGTAP ) JUDICIAL MEMBER ACCOUNTANT MEMBER D T/ - 26 TH FEBRUARY, 201 5 \ C OPY FORWARDED TO: 1. SHRI ACHAN SRIHARI, 6 - 3 - 661/4/2, PLOT NO.74, SANGEET NAGAR, SOMAJIGUDA, HYDERABAD 2 . INCOME TAX OFFICER WARD 6( 1 ), HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) I V HYDERABAD 4. COMMISSIONER OF INCOME - TAX I II , HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S