ITO, Ward-3(2), Hyderabad V. Mrs. T.Prapoorna Reddy, Anantapur

ITA 1607/HYD/2013

• Counselvise Citation: 160722514 RSA 2013
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 27-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Unexplained cash credit; Gift; Opportunity of being heard
• Section: 68

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER S.NO. ITA NO. AY APPELLANT RESPONDENT 1. 1514/H/13 2009-10 SMT. T. PRAPOORNA REDDY, HYDERABAD PAN AGUPR9172J INCOME-TAX OFFICER, WARD 3(2), HYDERABAD. 2. 1607/H/13 2009-10 INCOME-TAX OFFICER, WARD 3(2), HYDERABAD. SMT. T. PRAPO- ORNA REDDY, HYDERABAD PAN AGUPR9172J 3. 1515/H/13 2009-10 SRI T. SRIDHAR REDDY, HYDERABAD PAN AGKPR0950N INCOME-TAX OFFICER, WARD 3(2), HYDERABAD. 4 1608/H/13 2009-10 INCOME-TAX OFFICER, WARD 3(2), HYDERABAD. SRI T. SRIDHAR REDDY, HYDERABAD PAN AGKPR0950N ASSESSEE BY SHRI K.A. SAI PRASAD REVENUE BY SHRI SOLGY JOSE T KOTTARAM DATE OF HEARING 17-07-2014 DATE OF PRONOUNCEMENT 28-08-2014 O R D E R PER SAKTIJIT DEY, J.M.: THESE CROSS APPEALS IN CASE OF TWO DIFFERENT ASSES SEES ARE AGAINST SEPARATE ORDERS OF CIT(A)-IV, HYDERABAD BOT H DATED 06/09/2013. SINCE IDENTICAL ISSUES ARE INVOLVED IN THESE APPEALS, THEY WERE CLUBBED AND HEARD TOGETHER, THEREFORE, WE DISP OSE OFF THESE APPEALS BY WAY OF CONSOLIDATED ORDER FOR THE SAKE O F CONVENIENCE. 2 ITA NO. 1514, 1515, 1607 & 1608/HYD13 SMT. T. PRAPOORNA REDDY AND OTHERS ITA NO. 1514/H/2013 BY THE ASSESSEE IN CASE OF SMT. T. PRAPOORNA REDDY. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE AS ARISES FROM THE GROUND RAISED IS IN RESPECT OF ADDITION OF AN AMOUN T OF RS. 63,55,000/- MADE U/S 68 OF THE ACT. 3. BRIEFLY THE FACTS ARE, ASSESSEE AN INDIVIDUAL IS ONE OF THE DIRECTOR OF SHRI RITHVIKAA CARS PVT. LTD. FOR THE I MPUGNED ASSESSMENT YEAR, ASSESSEE FILED RETURN OF INCOME ON 29/09/2009 DECLARING TOTAL INCOME OF RS. 5,40,440/-. DURING T HE ASSESSMENT PROCEEDING, THE AO NOTICED THAT ASSESSEE HAS INTROD UCED AN AMOUNT OF RS. 63,55,000/- INTO CAPITAL ACCOUNT OF SRI RITH VIKAA CARS PVT. LTD. WHEN AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF SUCH INVESTMENT IN CAPITAL, ASSESSEE EXPLAINED THAT SHE HAS RECEIVED THE AMOUNT, IN QUESTION, AS GIFT FROM THE FOLLOWING PER SONS: SL.NO. NAME OF THE PERSON GIVING THE GIFT RELATIONSHIP WITH THE ASSESSEE AMOUNT OF GIFT RECEIVED (RS.) 1. A. SAVITHRAMMA GRAND MOTHER 10,00,000 2. A. RAM MOHAN REDDY FATHER BROTHER 10,00,000 3. A. VASUDHA MOTHER 5,00,000 4. C. SUMANGALA MOTHERS SISTER 2,55,000 5. D. VENKATA RAMANA REDDY GRAND FATHER 33,00,000 6. M. USHA REDDY FATHERS BROTHERS WIFE 3,00,000 TOTAL 63,55,000 4. THE AO AFTER VERIFYING THE DETAILS ASKED THE ASS ESSEE TO PROVE THE IDENTITY, CREDITWORTHINESS OF THE DONORS AND GE NUINENESS OF THE TRANSACTION. THE ASSESSEE, IN RESPONSE TO THE QUERY MADE BY THE AO FURNISHED CONFIRMATION FROM THE DONORS. FURTHER, TH E ASSESSEE ALSO PRODUCED PATTADAR PASSBOOKS IN SUPPORT OF AGRICULTU RAL LAND HOLDINGS OF THE DONORS AS WELL AS AGRICULTURAL INCOME CERTIF ICATE ISSUED BY THE LOCAL VILLAGE AUTHORITIES IN SUPPORT OF EARNING OF AGRICULTURAL INCOME BY THE DONORS. THE AO POINTING OUT VARIOUS DEFECTS AND DEFICIENCIES IN 3 ITA NO. 1514, 1515, 1607 & 1608/HYD13 SMT. T. PRAPOORNA REDDY AND OTHERS THE CERTIFICATES ISSUED BY THE VILLAGE LEVEL OFFICE RS ULTIMATELY CAME TO HOLD THAT THE DONORS DO NOT HAVE CREDITWORTHINESS T O GIFT THE AMOUNT AS CLAIMED BY THE ASSESSEE. THE AO RELYING UPON VAR IOUS DECISIONS OF THE HONBLE SUPREME COURT AS WELL AS HIGH COURT HEL D THAT AS THE ASSESSEE HAS FAILED TO PROVE CREDITWORTHINESS OF TH E CREDITORS AND GENUINENESS OF THE TRANSACTION, GIFTS RECEIVED HAVE TO BE TREATED AS UNEXPLAINED CREDIT OF THE ASSESSEE U/S 68 OF THE AC T AND ACCORDINGLY, MADE ADDITION OF RS. 63,55,000/-. BEING AGGRIEVED O F SUCH ADDITION, ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), IT WAS SUBMITTED BY THE ASSESSEE THAT ALL THE DONORS A RE CLOSE RELATIVES OF THE ASSESSEE AND NOT ONLY THEY HAVE CONFIRMED TH E GIFTS BUT EVIDENCE WAS ALSO PRODUCED IN SUPPORT OF THEIR CRED ITWORTHINESS SUCH AS PATTADAR PASSBOOKS AND AGRICULTURAL INCOME CERTI FICATES ISSUED BY GOVERNMENT OFFICIALS. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND EXAMINING THE EVIDENCES PRODUCED B EFORE HER FOUND THAT THOUGH THERE IS DISCREPANCY BETWEEN FIGURE OF INCOME AS STATED IN WORDS AND IN FIGURES, THE FACT REMAINS THAT THE CERTIFICATES WERE ISSUED BY GOVERNMENT OFFICIALS AND AS SUCH PATTADAR PASSBOOKS AND THE CERTIFICATES HAVE EVIDENTIARY VALUE TO SHOW THA T DONORS WERE LAND LORDS. HOWEVER, THE CIT(A) OPINED THAT THE DOCUMENT S PRODUCED DO NOT ESTABLISH THAT THE DONORS ACTUALLY DERIVED ANY AGRICULTURAL INCOME FROM THE AGRICULTURAL LAND HELD BY THEM. SHE HELD T HAT CERTIFICATES OR PATTADAR PASSBOOKS DOES NOT ESTABLISH QUANTUM OF AG RICULTURAL INCOME, IF ANY, DERIVED FROM THE LAND. THE CIT(A) R ELYING UPON A DECISION OF THE ITAT, HYDERABAD BENCH IN CASE OF P ARAS COLLINS DISTILLERIES VS. ITO [2011] 07 ITR 614, HELD THAT T HE CLAIM OF CREDITWORTHINESS CANNOT BE ACCEPTED MERELY ON THE B ASIS OF AGRICULTURAL LAND OR ON THE BASIS OF A CERTIFICATE ISSUED BY VILLAGE LEVEL OFFICER. SHE WAS OF THE VIEW THAT CLAIM OF AG RICULTURAL INCOME CANNOT BE ACCEPTED WITHOUT EVIDENCE IN THE FORM OF BILLS AND INVOICES OF AGRICULTURAL OPERATIONS CARRIED OUT BY THE PERSO NS CONCERNED. THE CIT(A) FURTHER RELIED UPON A DECISION OF THE TRIBUN AL IN CASE OF ACIT VS. INDIAN ART EMPORIUM [1994] 209 ITR (AT) 1(TM) W HEREIN THE 4 ITA NO. 1514, 1515, 1607 & 1608/HYD13 SMT. T. PRAPOORNA REDDY AND OTHERS TRIBUNAL HELD THAT MERE DISCLOSURE IN A RETURN FILE D BEFORE THE DEPARTMENT DOES NOT PROVE THE EXISTENCE OF INCOME I N CASH EITHER ON THE DATE RETURN WAS FILED OR AT THE END OF THE PREV IOUS YEAR OR ON THE LAST DAY OF PREVIOUS YEAR IN RESPECT OF WHICH THAT RETURN WAS FILED. ACCORDINGLY, THE CIT(A) CONCLUDING THAT THE ASSESSE E FAILED TO DISCHARGE ONUS CAST ON HER TO ESTABLISH CREDITWORTH INESS OF THE DONORS AND GENUINENESS OF THE TRANSACTIONS, CONFIRMED THE ADDITION OF RS. 63,55,000/-. 5. THE LEARNED AR SUBMITTED BEFORE US THAT WHEN THE ASSESSEE HAS SUBMITTED ALL EVIDENCES TO SUBSTANTIATE THE GIF TS RECEIVED LIKE CONFIRMATIONS FROM DONORS, SOURCE OF INCOME OF DONO RS BY WAY OF PATTADAR PASS BOOKS AND AGRICULTURAL INCOME CERTIFI CATES ISSUED BY V.R.O IN RESPECT OF AGRICULTURAL INCOME, THERE IS N O JUSTIFICATION IN TREATING THE GIFTS AS UNEXPLAINED CREDITS U/S 68 OF THE ACT. IT WAS SUBMITTED WHEN THE ASSESSEE HAS DISCHARGED ITS ONUS OF PROVING IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANS ACTION, NOTHING IS LEFT FOR HER TO PROVE. IT WAS SUBMITTED THAT WHAT T HE DEPARTMENT WANTS THE ASSESSEE TO PROVE IS THE SOURCE OF SOURCE, WHIC H IS NOT REQUIRED UNDER THE LAW. THE LEARNED AR SPECIFICALLY INVITING OUR ATTENTION TO THE OBSERVATIONS MADE BY THE CIT(A) SUBMITTED, WHEN THE CIT(A) DOES NOT DISPUTE THE EVIDENCES PRODUCED BY THE ASSESSEE IN THE SHAPE OF PATTADAR PASSBOOKS AND AGRICULTURAL INCOME CERTIFIC ATES AND ADMITS THAT THEY DO CONSTITUTE EVIDENCES TO SHOW THAT DONO RS ARE AGRICULTURAL LAND HOLDERS, THERE IS NO REASON WHY SHE SHOULD REJ ECT GIFTS RECEIVED MERELY ON PRESUMPTION AND SURMISES. 6. THE LEARNED DR, ON THE OTHER HAND, SUPPORTING TH E ORDER OF THE REVENUE AUTHORITIES SUBMITTED THAT THE ENTIRE GIFT WAS RECEIVED IN CASH FROM PERSONS WHO HAVE NO OTHER SOURCE OF INCOME EXC EPT AGRICULTURAL, INCOME AS CLAIMED BY THEM. IT WAS SUBMITTED THAT WH EN THE DONORS HAVE GIFTED SUBSTANTIAL AMOUNTS TO THE ASSESSEE, TH E ONUS IS ON THE ASSESSEE TO PROVE THAT DONORS HAD THE CAPACITY TO G IFT AMOUNT IN 5 ITA NO. 1514, 1515, 1607 & 1608/HYD13 SMT. T. PRAPOORNA REDDY AND OTHERS QUESTION. UNLESS THE ASSESSEE PROVES THAT THE DONOR S HAD THE CAPACITY TO GIFT THE AMOUNT, GENUINENESS OF THE TRA NSACTION CANNOT BE ESTABLISHED. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIALS ON RECORD AS WELL AS THE ORDERS OF TH E REVENUE AUTHORITIES. AS CAN BE SEEN, GIFTS OF RS. 63,55,000 /- WAS RECEIVED IN CASH BY THE ASSESSEE. HOWEVER, IT IS THE CLAIM OF T HE ASSESSEE GIFTS WERE RECEIVED FROM CLOSE RELATIVES WHO HAVE SUBSTAN TIAL AGRICULTURAL LAND HOLDING AND DERIVE ENOUGH AGRICULTURAL INCOME TO GIFT THE AMOUNT TO THE ASSESSEE. HOWEVER, WHEN THE ENTIRE GIFT HAS BEEN RECEIVED IN CASH, IT CERTAINLY RAISES A PRESUMPTION WITH REGARD TO THE GENUINENESS OF THE TRANSACTION. THEREFORE, IT IS INCUMBENT UPON THE ASSESSEE TO PROVE THAT THE DONORS HAD AVAILABILITY OF CASH WITH THEM TO GIFT TO THE ASSESSEE. AS CAN BE SEEN FROM RECORD TO PROVE THE A GRICULTURAL INCOME OF THE DONORS, ASSESSEE HAS PRODUCED PATTADA R PASS BOOKS AND AGRICULTURAL INCOME CERTIFICATES. UNDISPUTEDLY, THERE ARE SOME DEFECTS IN AGRICULTURAL INCOME CERTIFICATES. AS IT APPEARS, THE AO BY LATCHING ON TO THOSE DEFECTS HAS COME TO A CONCLUS ION THAT CERTIFICATES ISSUED ARE NOT GENUINE. SIMILARLY, TH OUGH, THE CIT(A) DOES NOT DISPUTE THE FACT THAT DONORS HAVE AGRICULT URAL LAND HOLDING AND THEY MAY BE DERIVING SOME AGRICULTURAL INCOME, BUT, SHE HAS RAISED DOUBT WITH REGARD TO QUANTUM OF AGRICULTURAL INCOME EARNED BY THE DONORS AND HAS ACCORDINGLY HELD THAT THE CREDIT WORTHINESS OF THE DONORS AND GENUINENESS OF THE TRANSACTION HAVE NOT BEEN PROVED. AFTER PERUSING THE ORDERS OF THE REVENUE AUTHORITIE S AND OTHER MATERIALS ON RECORD, WE ARE OF THE VIEW THAT PROPER ENQUIRY HAS NOT BEEN DONE BY THE DEPARTMENTAL AUTHORITIES BEFORE CO MING TO THE CONCLUSION THAT GIFTS ARE NOT GENUINE. SIMILARLY, C ONSIDERING THE FACT THAT ENTIRE GIFT HAS BEEN RECEIVED IN CASH, IT RAIS ES A DOUBT WITH REGARD TO AVAILABILITY OF SO MUCH AMOUNT IN CASH WI TH THE DONORS FOR ENABLING THEM TO GIFT THE AMOUNT TO THE ASSESSEE. T HEREFORE, ASSESSEE IS REQUIRED TO PROVE THAT DONORS IN FACT H AVE EARNED 6 ITA NO. 1514, 1515, 1607 & 1608/HYD13 SMT. T. PRAPOORNA REDDY AND OTHERS AGRICULTURAL INCOME TO THE EXTENT TO ENABLE THEM TO GIFT THE AMOUNT IN QUESTION TO THE ASSESSEE AFTER MEETING THEIR OWN EX PENDITURES. MORE SO, WHEN THE DONORS HAVE NO OTHER OSTENSIBLE SOURCE OF INCOME EXCEPT AGRICULTURE. CONSIDERING THE AFORESAID ASPEC TS, WE DEEM IT PROPER TO SET ASIDE THE ORDER OF THE CIT(A) AND REM IT THE MATTER BACK TO THE FILE OF THE AO FOR DECIDING THE ISSUE AFRESH AFTER CONDUCTING NECESSARY ENQUIRY. IF NECESSARY AO MAY ALSO EXAMINE DONORS TO ASCERTAIN THE FACT OF GIFT. THE AO MUST AFFORD A R EASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE M ATTER. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1607/HYD/2013 BY THE REVENUE IN CASE OF MRS . T. PRAPOORNA REDDY 9. THE DEPARTMENT IS AGGRIEVED WITH THE DECISION OF THE CIT(A) IN DELETING THE ADDITION MADE BY THE AO AMOUNTING TO R S. 14,13,000/- AS UNEXPLAINED CASH DEPOSITS IN THE BANK ACCOUNT. 10. BRIEFLY, THE FACTS RELATING TO THE ISSUE IN DIS PUTE ARE, DURING ASSESSMENT PROCEEDING WHILE EXAMINING THE ASSESSEE S BANK ACCOUNT WITH KARNATAKA BANK AND HDFC. THE AO FOUND DEPOSITS TO THE TUNE OF RS. 14,13,000/-. WHEN THE AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF SUCH CASH DEPOSITS, IT WAS STATED BY THE ASSESSEE THAT AN AMOUNT OF RS. 5.00 LAKHS DEPOSITED ON 05/08/2008 WA S OUT OF WITHDRAWAL MADE EARLIER AND AMOUNT OF RS. 9 LAKH DE POSITED ON 13/10/2008 WAS DRAWN FROM M/S RITHVIKAA CARS PVT. L TD.. THE AO DISBELIEVING THE EXPLANATION OF THE ASSESSEE, ADDED THE AMOUNT OF RS. 14,13,000/- U/S 68 OF THE ACT. THE ASSESSEE CHA LLENGED THE ADDITION BEFORE THE CIT(A). 7 ITA NO. 1514, 1515, 1607 & 1608/HYD13 SMT. T. PRAPOORNA REDDY AND OTHERS 11. DURING THE HEARING OF APPEAL BEFORE THE CIT(A), IT WAS EXPLAINED BY THE ASSESSEE THAT THE DEPOSITS WERE MADE OUT OF EARLIER CASH WITHDRAWALS FROM M/S RITHVIKAA CARS PVT. LTD. AND NOT M/S RITHVIKAA LUBRICANTS AS WRONGLY MENTIONED BY THE AO. IT WAS F URTHER SUBMITTED BY THE ASSESSEE THAT SHE HAS MAINTAINED REGULAR BOO KS OF ACCOUNT AND ALL THE CASH DEPOSITS HAVE BEEN DULY REFLECTED IN CASH BOOK. IN SUPPORT OF SUCH CONTENTION, ASSESSEE ALSO PRODUCED CASH BOOK BEFORE THE CIT(A). THE CIT(A) AFTER EXAMINING THE FACTS OF THE CASE, DELETED THE ADDITION BY HOLDING AS UNDER: 5.4 I HAVE EXAMINED THE SUBMISSIONS OF THE AR AND T HE FACTS ON RECORD. A PERUSAL OF THE CASH BOOK SHOWS THAT TH E DEPOSITS IN THE BANK WERE DULY RECORDED IN CASH BOOK AND ALS O THAT THE APPELLANT HAD ADEQUATE CASH BALANCE PRIOR TO SUCH D EPOSITS. THEREFORE, THERE IS NO BASIS FOR THE ADDITION OF RS . 14,13,000/- SO LONG AS THE DEBITS IN THE CASH BOOK ARE ADEQUATE LY EXPLAINED. 5.5 SOME OF THESE DEBITS ARE IN FACT THE SUBJECT MA TTER OF A SEPARATE ADDITION OF RS. 63,55,000/- TO THE TOTAL I NCOME OF THE APPELLANT U/S 68. THE APPELLANT HAD DEPOSITED A SUM OF RS. 5,00,000/- IN HIS KARNATAKA BANK ACCOUNT ON 05/08/2 008 OUT OF A SUM OF RS. 5,00,000/- RECEIVED ON 04/08/2008 AS G IFT FROM A. VASUDHA. THE GENUINENESS OF THIS GIFT WAS QUESTIONE D BY THE AO AND WAS SEPARATELY BROUGHT TO TAX U/S 68 ( AS PA RT OF THE ADDITION OF RS. 63,55,000). THE DEPOSIT MADE IN THE BANK ACCOUNT OUT OF THIS GIFT CANNOT THEREFORE BE AGAIN BROUGHT TO TAX. 5.6 SIMILARLY, THE APPELLANT HAD DEPOSITED A SUM OF RS. 9,00,000/- ON 30/10/2008 FOR WHICH THE SOURCE WAS E XPLAINED TO BE WITHDRAWAL FROM THE APPELLANTS CURRENT ACCOUNT IN RITHIVIKA MOTORS. THIS DEPOSIT IS ALSO, THEREFORE, ADEQUATELY EXPLAINED. 5.7 IN VIEW OF THE FACTS AND CIRCUMSTANCES AS NARRA TIVE ABOVE, THE ADDITION OF RS. 14,13,000/- IS DIRECTED TO BE D ELETED AND THE SECOND AND THIRD GROUNDS OF APPEAL ARE ALLOWED. 12. THE LEARNED DR SUBMITTED BEFORE US THAT DURING ASSESSMENT PROCEEDING, ASSESSEE WHILE EXPLAINING THE SOURCE OF SUCH DEPOSIT HAS STATED THAT THEY WERE OUT OF THE WITHDRAWALS FROM T HE BUSINESS. WHEREAS THE CIT(A) HAS LINKED SUCH DEPOSITS TO THE GIFTS RECEIVED AND DELETED THE SAID ADDITION ON THE GROUND THAT WHEN T HE GIFTS HAVE 8 ITA NO. 1514, 1515, 1607 & 1608/HYD13 SMT. T. PRAPOORNA REDDY AND OTHERS ALREADY BEEN ADDED THERE IS NO REASON TO ADD DEPOSI TS MADE OUT OF SUCH GIFTS . IT WAS SUBMITTED THAT BEFORE THE CIT(A ) ASSESSEE HAS PRODUCED CASH BOOK WHICH WAS NOT PRODUCED BEFORE TH E AO. HENCE, IT WAS SUBMITTED THAT AS THE CIT(A) CONSIDERED ADDITI ONAL EVIDENCE WITHOUT GIVING OPPORTUNITY TO THE AO, THE CIT(A)S ORDER ON THIS ISSUE SHOULD BE SET ASIDE. 13. THE LEARNED AR DRAWING OUR ATTENTION TO THE OBS ERVATION MADE BY THE AO IN THE ASSESSMENT ORDER SUBMITTED THAT DU RING THE ASSESSMENT PROCEEDING, ASSESSEE HAS PRODUCED HIS BO OKS OF ACCOUNT AND THE AO HAS ALSO EXAMINED THEM. THEREFORE, THE D EPARTMENT CANNOT SAY THAT THE CASH BOOK WAS PRODUCED FOR THE FIRST TIME BEFORE THE CIT(A). THE LEARNED AR SUBMITTED THAT THE CIT(A ) AFTER EXAMINING CASH BOOK HAVING FOUND THAT ALL THE DEPOSITS IN THE BANK ACCOUNTS ARE ROUTED THROUGH CASH BOOK, THE ADDITION WAS RIGHTLY DELETED BY HER. 14. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES ON THIS ISSUE AND PERUSED THE MATERIALS ON RECORD AS WELL A S THE ORDERS OF THE REVENUE AUTHORITIES. ON PERUSAL OF THE ASSESSMENT O RDER, IT IS EVIDENT THAT THE ASSESSEE WHILE EXPLAINING SOURCE OF DEPOSI TS IN THE BANK ACCOUNT HAS STATED THAT THEY ARE OUT OF HER BUSINES S. WHEREAS THE CIT(A) AFTER EXAMINING CASH BOOK HAS OBSERVED, THE DEPOSITS WERE OUT OF GIFT RECEIVED. FURTHER, ON A PERUSAL OF THE ASSESSMENT ORDER IT APPEARS, THAT THE ASSESSEE HAS NOT SPECIFICALLY BRO UGHT THE ENTRIES MADE IN THE CASH BOOK TO THE NOTICE OF THE AO, THOU GH THE AO HAS OBSERVED THAT THE ASSESSEE HAS PRODUCED BOOKS OF AC COUNT. CONSIDERING THE AFORESAID FACTS AND ALSO KEEPING IN VIEW THE FACT THAT WE HAVE DIRECTED THE AO TO EXAMINE THE GIFTS, THIS ISSUE IS ALSO REMITTED BACK TO THE FILE OF THE AO FOR CONSIDERING AFRESH AFTER EXAMINING THE CASH BOOK AND AFTER AFFORDING REASONA BLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IF ON VERIFICATION, IT IS FOUND THAT THE DEPOSITS IN THE BANK ACCOUNTS ARE ROUTED THROUGH CA SH BOOK, THEN, CERTAINLY ADDITION CANNOT BE MADE BY THE AO. 9 ITA NO. 1514, 1515, 1607 & 1608/HYD13 SMT. T. PRAPOORNA REDDY AND OTHERS 15. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1515/HYD/13 BY THE ASSESSEE IN CASE OF SRI T. SRIDHAR REDDY 16. BRIEFLY THE FACTS ARE, ASSESSEE AN INDIVIDUAL I S ONE OF THE DIRECTOR OF SHRI RITHVIKAA CARS PVT. LTD. FOR THE I MPUGNED ASSESSMENT YEAR, ASSESSEE FILED RETURN OF INCOME ON 29/09/2009 DECLARING A TOTAL INCOME OF RS. 5,40,440/-. DURING THE ASSESSMENT PROCEEDING, THE AO NOTICED THAT ASSESSEE HAS INTROD UCED AN AMOUNT OF RS. 29,00,000/- INTO CAPITAL ACCOUNT OF SRI RITH VIKAA CARS PVT. LTD. WHEN AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF SUCH INVESTMENT IN CAPITAL, ASSESSEE EXPLAINED THAT HE H AS RECEIVED THE AMOUNT, IN QUESTION, AS GIFT FROM THE FOLLOWING PER SONS: SL.NO. NAME OF THE PERSON GIVING THE GIFT RELATIONSHIP WITH THE ASSESSEE AMOUNT OF GIFT RECEIVED (RS.) 1. J. RAMAKRISHNA REDDY MOTHERS BROTHER 10,00,000 2. J. RAVINDRANATH REDDY -DO- 7,00,000 3. J. SIDDA REDDY -DO- 3,00,000 4. J. RAJENDRA PRASAD REDDY -DO- 3,00,000 5. D. LAXMI NARASIMHA -DO- 6,00,000 TOTAL 29,00,000 17. THE AO AFTER VERIFYING THE DETAILS ASKED THE AS SESSEE TO PROVE THE IDENTITY, CREDITWORTHINESS OF THE DONORS AND GE NUINENESS OF THE TRANSACTION. THE ASSESSEE, IN RESPONSE TO THE QUERY MADE BY THE AO FURNISHED CONFIRMATION FROM THE DONORS. FURTHER, TH E ASSESSEE ALSO PRODUCED PATTADAR PASSBOOKS IN SUPPORT OF AGRICULTU RAL LAND HOLDINGS OF THE DONORS AS WELL AS AGRICULTURAL INCOME CERTIF ICATE ISSUED BY THE LOCAL VILLAGE AUTHORITIES IN SUPPORT OF EARNING OF AGRICULTURAL INCOME BY THE DONORS. THE AO POINTED OUT VARIOUS DEFECTS AND DEFICIENCIES IN THE CERTIFICATES ISSUED BY THE VILLAGE LEVEL OFFICE RS AND ULTIMATELY CAME TO HOLD THAT THE DONORS DO NOT HAVE CREDITWORTHINES S TO GIVE THE 10 ITA NO. 1514, 1515, 1607 & 1608/HYD13 SMT. T. PRAPOORNA REDDY AND OTHERS AMOUNT AS CLAIMED BY THE ASSESSEE. THE AO RELYING U PON VARIOUS DECISIONS OF THE HONBLE SUPREME COURT AS WELL AS H IGH COURT HELD THAT AS THE ASSESSEE HAS FAILED TO PROVE CREDITWORT HINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION HAS TO BE HELD AS UNEXPLAINED CREDIT OF THE ASSESSEE U/S 68 OF THE AC T AND ACCORDINGLY, MADE ADDITION OF RS. 29,00,000/-. ON APPEAL, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A) AFTER EXAMI NING THE ISSUE WITH CASE LAWS, CONFIRMED THE ADDITION MADE BY THE AO. 18. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 19. WE HAVE HEARD THE PARTIES, PERUSED THE MATERIAL S ON RECORD AS WELL AS THE ORDERS OF THE REVENUE AUTHORITIES. SIMI LAR ISSUE HAS BEEN DECIDED BY US IN ITA NO. 1514/HYD/2013 IN CASE OF S MT. T. PRAPOORANA REDDY VIDE PARA 7 OF THIS ORDER (SUPRA) WHEREIN WE HAVE REMITTED THE ISSUE BACK TO THE FILE OF THE AO FOR DECIDING THE ISSUE AFRESH AFTER CONDUCTING NECESSARY ENQUIRY TO ASCERT AIN CLAIM OF GIFTS RECEIVED BY THE ASSESSEE. SINCE THE ISSUE IS IDENTI CAL IN THE PRESENT CASE, FOLLOWING THE DECISION IN ITA NO. 1514/HYD/20 13, WE REMIT THIS ISSUE ALSO TO THE FILE OF THE AO TO DECIDE THE SAME WITH IDENTICAL DIRECTIONS. THUS, THIS GROUND IS ALLOWED FOR STATIS TICAL PURPOSES. 20. IN THE RESULT, THIS APPEAL IS ALLOWED FOR STATI STICAL PURPOSES. ITA NO. 1608/H/13 BY THE REVENUE IN CASE OF MR. T. SREEDHAR REDDY 21. THE DEPARTMENT IS AGGRIEVED WITH THE DECISION O F THE CIT(A) IN DELETING THE ADDITION MADE BY THE AO AMOUNTING TO R S. 28,15,180/- AS UNEXPLAINED CASH DEPOSITS IN THE BANK ACCOUNT. 22. THE AO NOTED THAT THE ASSESSEE HAD EITHER NO EX PLANATION FOR THE SOURCES OF THE CASH DEPOSITS OR HAD CLAIMED THA T THE DEPOSITS WERE MADE OUT OF WITHDRAWALS FROM THE BUSINESS, FOR WHICH NO 11 ITA NO. 1514, 1515, 1607 & 1608/HYD13 SMT. T. PRAPOORNA REDDY AND OTHERS DOCUMENTARY EVIDENCE WAS FILED. HE, THEREFORE, BROU GHT THE SUM OF RS. 28,15,800 TO TAX U/.S 68 OF THE ACT. 23. BEFORE THE CIT(A) , THE AR HAS SUBMITTED THAT T HE SOURCES OF THE DEPOSITS WERE OUT OF EITHER EARLIER CASH WITHDR AWALS OR RECEIVED FROM M/S RITHVIKA CARS PVT. LTD. (WRONGLY MENTIONED AS M/S RITHVIKAA LUBRICANTS BY THE AO IN THE ASSESSMENT ORDER. THE A R FURTHER SUBMITTED THAT THE CASH DEPOSITS, DULY NOTED IN THE CASH BOOK, WERE OUT OF THE CASH BALANCES AVAILABLE WITH THE ASSESSE E, THE SOURCES OF WHICH WERE ADEQUATELY EXPLAINED BY THE DEBITS IN TH E CASH BOOK. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A) DIRECTED THE AO TO DELETE THE ADDITION MADE ON THIS COUNT BY GIVING A CATEGORICAL FINDING THAT THE GENUINENESS OF THIS GI FT WAS QUESTIONED BY THE AO AND WAS SEPARATELY BROUGHT TO TAX U/S 68, HE NCE, THE DEPOSIT MADE IN THE BANK ACCOUNT OUT OF THIS GIFT CANNOT TH ERE BE AGAIN BROUGHT TO TAX. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 24. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES, P ERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF THE REVENUE AUTHORITIES. SIMILAR ISSUE HAS BEEN DECIDED BY US I N REVENUES APPEAL IN ITA NO. 1607/H/13 IN CASE OF MRS. T. PRAPOORNA R EDDY VIDE PARA NO. 14 (SUPRA) WHEREIN WE HAVE REMITTED THE ISSUE T O THE FILE OF THE AO FOR CONSIDERING AFRESH AFTER EXAMINING CASH BOOK AND AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. SINCE THE ISSUE UNDER CONSIDERATION IS IDENTICAL, FOLLOWING T HE DECISION IN ITA NO. 1607/H/13, WE REMIT THE ISSUE BACK TO THE FILE OF THE AO WITH IDENTICAL DIRECTIONS. 25. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 12 ITA NO. 1514, 1515, 1607 & 1608/HYD13 SMT. T. PRAPOORNA REDDY AND OTHERS 26. TO SUM UP, ALL THE APPEALS UNDER CONSIDERATION ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 28/08/2014. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 28 TH AUGUST, 2014 KV COPY TO:- 1) SMT. T. PRAPOORNA REDDY, 2) MR. T. SRIDHAR REDDY C/OCH. PARTHASARATHY & CO., 1-1-298/2/B/3, 1 ST FLOOR, SOWBHAGYA AVENUE, ST.NO. 1, ASHOKNAGAR, HYDERABAD 500 020. 2)ITO, WARD 3(2), HYDERABAD. 3) CIT(A)-IV, HYDERABAD. 4) THE CIT -I, HYDERABAD 5)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD.