Ganna Sarvaiah, Hyderabad V. Income -Tax Officer, Suryapet

ITA 1555/HYD/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77883 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 16-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 09-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.1555/HYD/12 : ASSESSMENT YEAR 2008 - 09 SHRI GANNA SARVAIAH, KODAD ( PAN - AMKPG 4755 A) V/S. INCOME TAX OFFICER, SURYAPET (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.RAMA RAO RESPONDENT BY : SHRI JEEVAN LAL LAVIDIYA DR DATE OF HEARING 04.03.2014 DATE OF PRONOUNCEMENT 25.04.2014 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX(APPEALS) VI, HYDERABAD DATED 10.8.2012 FOR THE ASSESSMENT YEAR 2008 - 09. 2. THE ONLY EFFECTIVE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO AN ADDITION OF RS.16,45,000 MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A) ON ACCOUNT OF UNEXPLAINED INVESTMENT. 3. THE ASSESSEE HAS FILED RETURN OF INCOME ON 18.7.2008 DECLAR ING TOTAL INCOME OF RS.1,15,002, APART FROM AGRICULTURAL INCOME OF RS.1,98,000. A SURVEY UNDER S.133A WAS CONDUCTED IN THE BU S IN E SS PRE M ISES OF THE ASSESSEE ON 8.3.2010. DURING TH E COU R SE OF SURVEY IT WAS FOUND THAT THE ASSESSEE HAD STARTED CON S TRUCTION O F A CEN T RALISED AIR - CON D ITONED FUN C TION HALL. FURTH E R, IT WAS NOTIC E D THAT THE ASSESSEE PURCHASED A RESIDENTIAL HOU S E AD MEASURING 302.50 SQ. YARDS ON 8.10.2007 FOR AN AMO U NT OF RS.10,20,000. SIMILARLY, ON 28.10.2007, IT WAS NOTICED, THE ASSESSEE PURCHASED A PLOT MEASURING 250 SQ. ITA NO. 1555/ HYD/20 12 SHRI GANNA SARVAIAH, KODAD 2 YA R DS FOR AN AMOUNT OF RS.6,25,000. THE ASSESSING OFFICER EXAMINED THE BANK ACCOUNT AND TAKING INTO ACCOUNT THE DEPOSITS AND WITHDRAWALS MADE DURING THE RELEVANT PERIOD, HELD THAT WITHDRAWALS FROM BANK COULD NO T B E CONSIDERED AS SOU R CE FOR MAKING THE INVESTMENTS, AND ACCORDINGLY MADE AN ADDITION OF RS.16,45,000 ON ACCOUNT OF UNEXPLAINED INVESTMENT . 4. ON APPEAL, BEFORE THE CIT(A) , V IDE LETTER DATED 28.12.2011, THE AUTHORISED REPRESENTATIVE FOR THE ASSESSEE HAS SUBMITTED THAT THE AMOUNTS WERE WITHDRAWN FROM THE BANK FROM TIME TO TIME, AS THE PAYMENTS WERE TO BE MADE TO THE VENDOR IN ADVANCE, BEFORE THE PURCHASE. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE WAS IN POSSESSION OF RS .26 LAKH S FROM THE WITHDRAWALS MADE WITHIN TWO MO N THS PRECEDING THE TRANSACTION OF RS.10,20,000 ON 8.10.2007 AND IT COULD NOT BE SAID THAT THE AMOUNT WAS NOT UTILISE D FOR THE PU R PO S E OF ACQUISITION OF THE PROPERTY. SIMILARLY, IT WAS SUBMITTED THAT THE A SSESSEE WAS IN POSSESSION OF RS.18,00,000 ON 28.12.2007 TO ENABLE HIM TO MAKE AN INVESTMENT OF RS.6,25,000 ON THAT DATE. THE AUTHORISED REPRESENTATIVE FURTHER SUBMITTED THAT IN THE SURVEY UNDER S.133A CONDUCTED AT THE PREMISES OF THE ASSESSEE, THERE WAS NO INFORMATION TO SHOW THAT THE ASSESSEE HAD UTILIZED SUCH WITHDRAWALS FOR ANY OTHER PURPOSES. THE AUTHORISED REPRESENTATIVE RELIED ON THE DECISION OF THE KERALA HIGH COURT IN THE CASE OF CIT V/S. K.SRIDHARAN(201 ITR 1010). T HE CIT(A) AFTER DUE CONSIDERATIO N OF THE SUBMISSIONS OF THE ASSESSEE , WAS NOT CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, AND ACCORDINGLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER, ON THE GROUND THAT THE AMOUNT WITHDRAWN AS HAVING BEEN MADE FOR A SPECIFIC PURPOSES AND ALSO OBSERVED THAT SINCE THE ASSESSEE WAS NOT IN THE HABIT OF KEEPING FUNDS IN CASH, THE ADDITION MADE BY THE ASSESSING OFFICER HAS TO BE SUSTAINED. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), ASSESSEE IS IN APPEAL BEFORE US. ITA NO. 1555/ HYD/20 12 SHRI GANNA SARVAIAH, KODAD 3 6. LEARNED COUN S EL FOR THE ASSESSEE, REIT E RATIN G THE CON TE N T ION S U R GED BEFORE THE REVENUE AUTHORITIES, SUBMITTED THAT AS PER THE BANK STATEMENT, EXTRACTED AT PARA 5.2 OF THE IMPUGNED ORDER OF THE CIT(A), THE OPENING BALANCE AS ON 31.3.2007 WAS ONLY RS.6,083.84. SUBSEQUENTLY, THERE HAVE BEEN WITHDRAWALS FROM THE DEPOSITS IN THE BANK ACCOUNT. THE MAIN CREDITS ARE INWARD REMITTANCES FROM USA. IT IS THE CONTENTION O F THE LEARNED COUNSEL FOR THE ASSESSEE THAT HE HAD WITHDRAWN RS.32,80,000 FROM 8.8.2007 17.1.2008 AND HENCE, HE HAD SUFFI CIENT CASH BALANCE TO PAY RS.16,45,000 FOR THE PURCHASE OF PROPERTY DURING THIS PERIOD. IN THE CIRCUMSTANCES, H E PLEADED THAT THERE IS NO JU S TIFICATION FOR THE IMPUGN E D ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A), AS THE ASSESSEE HA S SATISFACTORILY EXPLAINED THE SOURCES FOR THE INVESTMENTS. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, RELIED ON THE ORDERS OF THE R E VENUE AUTHORITIES. 8. W E HEARD BOTH SIDES AND PERUSED THE IMPUGNED ORDERS OF TH E REVENUE AUTHO RITIES AND OTHER MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE WITHDRAWALS HAVE BEEN MADE FROM OUT OF THE DEPOSITS MADE INTO THE BANK ACCOUNT, WITHIN A VERY SHORT SPAN OF TIME AND HENCE THE AMOUNTS OF WITHDRAWALS SHOULD BE CONSIDERED AS AVAILABLE FOR RE - D EPOSITING. FURTHER, THE GENUINENESS OF THE CREDITS ARE NOT TO BE QUESTIONED, AS THE MAJOR AMOUNTS OF DEPOSITS WERE ON ACCOUNT OF REMITTANCES FROM USA. THE REVENUE HAS NOT BROUGHT ON RECORD ANY MATERIAL TO PROVE THAT THE WITHDRAWN AMOUNTS WERE USED FOR A NY OTHER PURPOSES. IN THESE CIRCUMSTANCES, WE HOLD THAT THE WITHDRAWALS FROM BANK BY THE ASSESSEE DURING THE YEAR BEFORE THE RESPECTIVE DATES OF INVESTMENTS SHOULD BE CONSIDERED AS AVAILABLE FOR MAKING THE INVESTMENTS OF RS.16,45,000. HOWEVER, THERE ARE WITHDRAWALS BY WAY OF ENCASHMENT OF CHEQUES ISSUED BY THE ASSESSEE IN THE NAMES OF OTHERS. THESE AMOUNTS CANNOT BE SAID TO BE AVAILABLE WITH THE ASSESSEE FOR INVESTMENT UNLESS THE ASSESSEE CAN PROVE TO THE SATISFACTION OF THE DEPARTMENT THAT ITA NO. 1555/ HYD/20 12 SHRI GANNA SARVAIAH, KODAD 4 WITHDRAWALS BY WAY OF ENCASHMENT OF CHEQUES ISSUED TO THE THIRD PARTIES, WERE ALSO AVAILABLE TO THE ASSESSEE FOR INVESTMENT. KEEPING THIS ASPECT IN MIND, WE SET ASIDE THE IMPUGNED ORDER O F THE CIT(A) AND R E STORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER, WITH A DIRECTION TO RE - WORK THE ADDITION OF RS.16,45,000 BY REDUCING THE AMOUNTS WITHDRAWN FROM THE BANK PRIOR TO THE DATES OF RESPECTIVE INVESTMENTS , TO THE EXTENT SUCH WITHDRAWALS WERE FOUND TO HAVE NOT BEEN UTILISED OTHERWISE THAN FOR INVESTMENTS IN QUESTION . THE ASSESSING OFFICER SHALL GIVE REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE, AND SHALL DISPOSE OF THE MATTER AFRESH IN ACCORDANCE WITH LAW BY PASSING A SPEAKING ORDER ON ALL THE RELEVANT ASPECTS OF THE MATTER. 9. IN THE RESULT, ASSESSEES APPEA L IS ALLOWED FOR STATISTICAL PURPOSES ORDER PRONOUNCED IN THE COURT ON 25.04.2 0 14 SD/ - SD/ - (CHANDRA POOJARI ) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DT/ - 25 TH APRIL , 2014 COPY FORWARDED TO: 1. SHRI GANNA SARVAIAH, (KODAD), C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 2 . INCOME TAX OFFICER SURYAPET 3. COMMISSIONER OF INCOME - TAX(APPEALS) V I HYDERABAD 4. COMMISSIONER OF INCOME - TAX V , HYDERABAD 5 DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S