Smt Gundala Sarojanamma, Nellore V. ITO, Ward-4, Nellore

ITA 1609/HYD/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6442 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 14-06-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 16-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained cash credit; Unexplained investment; Gift
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC) : HYDERABAD BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA.NO.1609 & 1610/HYD/2014 ASSESSMENT YEARS 2002-03 & 2003-04 SMT. GUNDALA SAROJANAMMA, ATMAKUR, SPSR NELLORE DIST., PAN AELPG5297C VS. THE INCOME TAX OFFICER, WARD-4, CIRCLE-1, OFFICE OF THE INCOME TAX, DARGAMITTA, NELLORE. PIN - 524004 (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. S. RAMA RAO FOR REVENUE : MR. M. SITARAM DATE OF HEARING : 14.06.2016 DATE OF PRONOUNCEMENT : 17 .06.2016 ORDER BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AND ARE DIRECTED AGAINST THE SEPARATE ORDER OF THE CIT(A), GUNTUR, DATED 25.06.2014 FOR THE A.YS. 2002-03 AND 2003-04. ITA.NO.1609/HYD/2014 A.Y. 2002-03 : 2. FIRST, I TAKE-UP THE APPEAL FOR THE A.Y. 2002- 03. THE EFFECTIVE GROUNDS OF APPEAL READS AS UNDER : 2. THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION MADE OF RS.1,50,000 UNDER SECTION 68 OF THE I.T. ACT. 3. THE LD. CIT(A) OUGHT TO HAVE SEEN THAT THE APPELLANT DISCHARGED THE ONUS CAST ON HER AND 2 ITA.NOS.1609 & 1610/HYD/2014 SMT. GUNDALA SAROJANAMMA, ATMAKUR, NELLORE DIST., THEREFORE, THE PROVISIONS OF SECTION 68 HAVE NO APPLICATION. 3. AFTER HEARING RIVAL CONTENTIONS, I FIND THAT TH E A.O. MADE AN ADDITION OF UNEXPLAINED CASH CREDITS U NDER SECTION 68 OF THE ACT OF RS.1,50,000. WHEN ASKED, T HE ASSESSEE SUBMITTED THAT SHE HAS RECEIVED CASH GIFTS FROM THREE OF HER BROTHERS VIZ., SHRI CHALLA SHANKAR RED DY, SHRI CHALLA NARAYANA REDDY AND SHRI CHALLA JANARDHA N REDDY OF RS.50,000 EACH. THE DONORS WERE SUMMONED B Y THE A.O. THEY CONFIRMED HAVING GIVEN GIFTS AS PASU PU KUMKUMA. THE A.O. DID NOT BELIEVE THE STATEMENT AN D MADE THE ADDITION. AFTER PERUSING THE PAPERS ON REC ORD AND THE EVIDENCE FILED BY THE ASSESSEE IN SUPPORT O F HER CONTENTION THAT THESE CASH CREDITS WERE GENUINE, I AM OF THE CONSIDERED OPINION THAT THE ADDITION IS UNWARRA NTED. WHEN THE DONORS WHO ARE BROTHERS OF THE ASSESSEE, APPEARED BEFORE THE A.O. AND STATED ON OATH THAT TH EY HAVE IN FACT GIVEN THESE GIFTS, THE QUESTION OF ADD ING THE SAME AMOUNTS UNDER SECTION 68 DOES NOT ARISE. THERE FORE, ADDITION ON THIS ISSUE IS DELETED. 4. IN THE RESULT, ITA.NO.1609/HYD/2014 OF THE ASSESSEE IS ALLOWED. ITA.NO.1610/HYD/2014 A.Y. 2003-04 5. NOW, I TAKE-UP THE APPEAL FOR THE A.Y. 2003- 04. THE FIRST ISSUE IS AGAINST THE ADDITION OF RS.2 ,20,000 CLAIMED AS CREDIT TOWARDS SALE OF INHERITED GOLD AN D SILVER ITEMS. THE A.O. DISBELIEVED THE CONTENTION OF THE A SSESSEE 3 ITA.NOS.1609 & 1610/HYD/2014 SMT. GUNDALA SAROJANAMMA, ATMAKUR, NELLORE DIST., AND MADE THE ADDITION. THE ASSESSEES CASE IS THAT HER MOTHER SMT. CHALLA RAMANAMMA DIED IN THE YEAR 2001 AND WAS IN POSSESSION OF 100 SOVEREIGNS OF GOLD. OU T OF THE SAME, AS PER FAMILY SETTLEMENT, 50 SOVEREIGNS O F GOLD WAS GIVEN TO THE ASSESSEE. THE REST OF THE GOLD WAS SHARED BETWEEN THE THREE BROTHERS. IT WAS STATED BY THE TH REE BROTHERS THAT IN LIEU OF THE SHARE OF 50 SOVEREIGNS GOLD TO BE GIVEN TO THE ASSESSEE HEREIN, A CASH AMOUNT OF RS.2,20,000 WAS GIVEN TO HER BY THEM WHICH IS AS FO LLOWS: I. SHRI NARAYANA REDDY RS.70,000 II. SHRI JANARDHAN REDDY RS.70,000 III. SHRI SHANKAR REDDY RS.80,000 5.1. THE THREE BROTHERS WERE EXAMINED BY THE A.O. ON OATH AND THEY HAVE CONFIRMED THESE CLAIMS. THE A .O. DID NOT BELIEVE THESE STATEMENTS AND MADE THE ADDIT ION. IN MY VIEW, SUCH AN ADDITION IS UN-CALLED FOR. WHEN THE BROTHERS ARE APPEARED BEFORE THE A.O. AND GAVE STAT EMENT ON OATH, THE SAME HAS TO BE BELIEVED UNLESS CONTRAR Y EVIDENCE IS FOUND. ON THIS ISSUE, THERE IS NO CONTR ARY EVIDENCE. HENCE, I DELETE THE ADDITION ON THIS ISSU E. 6. THE SECOND ISSUE IS ON THE CLAIM OF ADVANCES RECEIVED BY THE ASSESSEE FROM FIVE PERSONS AGAINST SALE OF LAND TO THE TUNE OF RS.5,75,000. 6.1. THE ASSESSEE CLAIMS THAT ADVANCE ON SALE OF PROPERTY WAS TAKEN FROM SMT. M. RAMANAMMA, SHRI B. SUBBA REDDY, SHRI CH. JAGADISH REDDY AND OTHERS. TH E 4 ITA.NOS.1609 & 1610/HYD/2014 SMT. GUNDALA SAROJANAMMA, ATMAKUR, NELLORE DIST., ASSESSEES CLAIM IS THAT SHE HAD ORIGINALLY PURCHAS ED SOME LAND AND THE SAME WAS NOT REGISTERED IN HER NA ME. IN THE MEANWHILE, SHE SOLD THIS LAND AND TAKEN ADVA NCE. THE LAND SO SOLD COULD NOT BE REGISTERED AS ON THE DATE OF TAKING ADVANCE, AS THE SAME WAS NOT YET REGISTERED IN HER NAME. DURING THE SUBSEQUENT ASSESSMENT YEAR, THIS L AND WAS IN FACT SOLD AND REGISTERED. THE FINDING OF THE LD. CIT(A) IS THAT THE ASSESSEE DID NOT SUBSEQUENTLY SE LL ANY PLOT OF LAND TO ANY OF THE FIVE PERSONS, WHO GAVE A DVANCE IS FACTUALLY INCORRECT. EVIDENCE OF SUCH SALE HAS B EEN FILED BY THE ASSESSEE. THE PARTIES WHO HAD GIVEN THE ADVA NCES HAVE SUBSEQUENTLY PURCHASED THE LAND. THEY HAVE CONFIRMED THE TRANSACTION BEFORE THE A.O. UNDER SUC H CIRCUMSTANCES, THE ADDITION ON THIS ISSUE IS DELETE D. THUS, THIS GROUND OF THE ASSESSEE IS ALLOWED. 7. THE THIRD ISSUE IS ON THE ADDITION OF RS.19,127 MADE ON THE GROUND THAT THE ASSESSEE HAD MADE UNACCOUNTED INVESTMENT TOWARDS LIC PREMIUM. THE LD. CIT(A) WAS OF THE VIEW THAT THE TOTAL DRAWINGS OF RS.96,564 MADE FOR FAMILY HOUSE HOLD PURPOSE WAS INSUFFICIENT TO COVER THE EXPENDITURE TOWARDS LIC PREMIUM. I DO NOT THINK SO. THE ASSESSEE BEING A HO USE WIFE AND PART OF A LARGER FAMILY, HAS SUFFICIENT DR AWINGS TO MEET THE EXPENDITURE CLAIMED BY HER TOWARDS LIC PREMIUM. THE INCOME AND DRAWINGS OF ALL THE FAMILY MEMBERS HAVE TO BE CONSIDERED. THEREFORE, I DELETE THIS ADDITION AS UNWARRANTED. 5 ITA.NOS.1609 & 1610/HYD/2014 SMT. GUNDALA SAROJANAMMA, ATMAKUR, NELLORE DIST., 8. IN THE RESULT, ITA.NO.1610/HYD/2014 OF THE ASSESSEE IS ALLOWED. 9. TO SUM-UP, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.06.201 5. SD/- (J.SUDHAKAR REDDY) ACCOUNTANT MEMBER HYDERABAD, DATED 17 TH JUNE, 2016. VBP/- COPY TO 1. SMT. GUNDALA SAROJANAMMA, GUNDALAVARI STREET, ATMAKUR, SPSR NELLORE DISTRICT., C/O. SHRI S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS ELEGANCE, 3-6-643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500 029. 2. THE INCOME TAX OFFICER, WARD - 4 , DARGAMITTA, NELLORE 524 004. 3. CIT(A), GUNTUR. 4. CIT, GUNTUR 5. D.R. ITAT A BENCH (SMC) HYDERABAD. 6. GUARD FILE