Sampath Rao Perala , Mahabubabad V. Income Tax Officer, Ward-4, Hyderabad

ITA 1599/Hyd/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8127 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-12-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 26-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 80C; 142(1); 133(6); 143(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 1 599 / HYD/201 8 ASSESSMENT YEAR S : 20 13 - 14 SAMPATH RAO PERALA , MAHABUBABAD. PAN ABSPP3821B VS. INCOME - TAX OFFICER, WARD 4 , HYDERABAD. APPELLANT RESPONDENT A SSESSEE BY: S HRI A.V. RAGHURAM RE VENUE BY: SHRI NILANJAN DEY DATE OF HEARING: 04 / 1 2 / 201 8 DATE OF PRONOUNCEMENT: 26 / 1 2 /201 8 O R D E R PER S. RIFAUR RAHMAN , AM: T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDERS OF CIT(A) 3 , HYDERABAD, DATED, 24 TH MAY , 201 8 FOR AY 20 1 3 - 14. 2. BRIEF FACTS OF THE CASE ARE THAT THE A SSESSEE, A PROPRIETOR OF M/S SRI SAI KRISHNA MEDICAL STORES, MAHUBA BAD, FILED HIS RETURN OF INCOME FOR THE AY 2013 - 14 ON 26/05/2014 DECLARING TOTAL INCOME AT RS. 2,30,340/ - , WHICH WAS PROCESSED U/S 143(1) OF THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT). SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) DATED 31/08/2015 WAS ISSUED AND SERVED ON THE ASSESSEE AND NOTICES U/S 142(1) WERE ISSUED ON SEVERAL OCCASIONS AND ASSESSEE SUBMITTED THE INFORMATIO N. 3. DURING THE COURSE OF SCRUTINY PROCEEDINGS, THE ASSESSEE WAS ASKED TO PRODUCE THE STATEMENT OF ALL BANK ACCOUNTS I.T.A. NO. 1599 /HYD/18 SAMPATH RAO PERALA, MAHABUBABAD 2 MAINTAINED BY HIM DURING THE FY 2012 - 13 AND THE ASSESSEE SUBMITTED THE ACCOUNT STATEMENT OF ONLY ONE ACCOUNT MAINTAINED WITH THE SBI, MAHABUBAD BRANCH. 3.1 WHEN THE INFORMATION AVAILABL E WITH THE DEPARTMENT WAS VERIFIED BY THE AO, IT WAS FOUND THAT ASSESSEE IS HAVING ONE MORE BANK ACCOUNT IN HIS NAME MAINTAINED WITH ING VYSYA BANK LTD. (NOW KNOWN AS KOTA MAHINDRA BANK) HAVING ACCOUNT NO. 74710112770 AND THE SAME WAS NOT DISCLOSED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS DESPITE SPECIFICALLY ASKED VIDE NOTICE U/S 142(1) DATED 07/12/2015 TO SUBMIT THE STATEMENT OF ALL BANK ACCOUNTS MAINTAINED BY THE ASSESSEE. 3.2 THE AO SENT A LETTER TO ING VYSYA BANK LTD. CALLING FOR INFORMATION U/S 133(6) TO PRODUCE STATEMENT FOR THE AY 2012 - 13 AND THE SAME WAS OBTAINED FROM THE BANK. ON VERIFICATION OF THE BANK STATEMENT, THE AO FOUND THAT THERE WERE MANY CASH DEPOSITS IN THE SAID ACCOUNT. THEREFORE, THE AO SENT A NOTICE U/S 142(1) DATED 04/02 /2016 ASKING THE ASSESSEE TO EXPLAIN THE CASH TRANSACTIONS IN HIS BANK ACCOUNTS. HOWEVER, NEITHER ASSESSEE APPEARED NOR SUBMITTED ANY REPLY IN THIS REGARD AND EVEN AFTER ISSUING A SHOW CAUSE CUM FINAL OPPORTUNITY LETTER DATED 22/02/2016, THERE WAS NO COMP LIANCE FROM ASSESSEE. 3.3 AS THE ASSESSEE FAILED TO EXPLAIN THE CASH CREDITS, THE CASH CREDITS OF RS. 14,96,500/ - IN THE KOTAK MAHINDRA BANK ACCOUNT WAS TREATED AS UNEXPLAINED CASH CREDITS U/S 68 BY THE AO. AO ALSO MADE ADDITION ON ACCOUNT OF ASSESSEES CLAIM OF DEDUCTION OF RS. 26,798/ - U/S 80C OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS NOT FURNISHED THE PROOF OF THE CLAIM FOR THE SAME. I.T.A. NO. 1599 /HYD/18 SAMPATH RAO PERALA, MAHABUBABAD 3 4. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). 5. THE CIT(A) PASSED AN EX - PARTE ORDER UPHOLDING THE ORDER OF AO , DISMISSING THE APPEAL OF THE ASSESSEE ON THE GROUND THAT THOUGH NUMBER OF OPPORTUNITIES GIVEN TO APPEAR , BUT ASSESSEE FAILED TO APPEAR OR NOT FURNISHED ANY WRITTEN SUBMISSIONS. EVEN ON MERITS ALSO, THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 6. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US CONTENDING IN THE GROUNDS OF APPEAL TH AT THE CIT(A) ERRED IN DISMISSING THE APPEAL OF THE ASSESSEE EXPARTE WITHOUT GIVING PROPER OPPORTUNITY TO THE ASSESSEE THEREBY VIOLATING PRINCIPLES OF NATURAL JUSTICE. 7. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT T HE AO MADE THE ADDITION OF RS. 14,96,500/ - U/S 68 ON THE GROUND THAT THE ASSESSEE NEITHER APPEARED NOR FURNISHED ANY DOCUMENTARY EVIDENCE TO SUBSTANTIATE HIS CLAIM WHEN CALLED FOR. EVEN BEFORE THE CIT(A) , THE ASSESSEE COULD NOT APPEAR AND SUBSTANTIATE HIS CLAIM BY WAY OF DOCUMENTARY EVIDENCE. ON CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, TO MEET THE ENDS OF JUSTICE, WE REMIT THE MATTER BACK TO THE FILE OF AO TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE HIS CLAIM AND PA SS THE ORDER IN ACCORDANCE WITH LAW AND ON MERITS . THE ASSESSEE IS DIRECTED TO FILE THE NECESSARY EVIDENCES BEFORE THE AO TO SUBSTANTIATE HIS CLAIM. I.T.A. NO. 1599 /HYD/18 SAMPATH RAO PERALA, MAHABUBABAD 4 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PR ONOUNCED IN THE OPEN COURT ON 26 TH DECEMBER , 2018. SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 26 TH DECEMBER , 2018 KV COPY FORWARDED TO: 1. SRI SAMPATH RAO PERALA, C/O S/SHRI K. VASANTKUMAR, AV RAGHURAM, P. VINOD & M. NEELIMA DEVI, ADVOCATES, 610 BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD 500 001. 2 . ITO, WARD 4, AAYAKAR BHAVAN, STATION ROAD, WARANGAL 506 002. 3 . CIT (A) - 3 , HYDERABAD 4. PR. CIT 3, HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE