Sri J. Chitti Babu, Hyderabad V. ITO, Ward-10(4), Hyderabad

ITA 1620/HYD/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5996 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 17-02-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 12-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Unexplained expenditure; Gift; Salary income; Source of fund
• Section: 69C; 69; 148; 6

Judgement Text

GIN 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. 1619/HYD/2011 ASSESSMENT YEARS: 2003-04 J.V. RATNAMANI, HYDERABAD. PAN AFTPJ9171M VS. INCOME TAX OFFICER, WARD 10(4), HYDERABAD. APPELLANT RESPONDENT ITA NO. 1620/HYD/2011 ASSESSMENT YEARS: 2003-04 J.V. CHITTI BABU, HYDERABAD. PAN AFTPJ9170L VS. INCOME TAX OFFICER, WARD 10(4), HYDERABAD. APPELLANT RESPONDENT ASSESSEE BY: SHRI S. RAMA RAO REVENUE BY: SHRI B. KURMI NAIDU DATE OF HEARING: 17/02/2016 DATE OF PRONOUNCEMENT: /02/2016 O R D E R PER S. RIFAUR RAHMAN, A.M: APPEAL IN ITA NO. 1619/H/11 FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) - VI, HYD ERABAD, DATED 30/04/2008 FOR THE AY 2003-04. ANOTHER APPEAL IN ITA NO. 1620/H/11 FILED BY THE ASSESSEE ON BEHALF OF HE R LATE HUSBAND SHRI J.V. CHITTI BABU AGAINST THE ORDER OF CIT(A)-VI, HYDERABAD, DATED 30/04/2008 FOR AY 2003-04. SINCE T HE ISSUES IN BOTH THE APPEALS ARE SIMILAR, FOR THE SA KE OF CONVENIENCE, WE DISPOSE OF THESE APPEALS BY WAY OF A COMMON ORDER. I.T.A. NOS. 1619 & 1620/HYD/2011 J.V. RATNAMANI & J.V. CHITTI BABU 2 2. TO DISPOSE OF THESE APPEALS, WE CONSIDER THE FAC TS IN ITA NO. 1619/HYD/2011. 3. BRIEFLY THE FACTS ARE, ASSESSEE FILED HER RETURN OF INCOME FOR THE AY 2003-04 ON 25/02/2005 DECLARING LOSS OF RS. 16,143/- ALONG WITH AGRICULTURAL INCOME OF RS. 84,0 00/-. SUBSEQUENTLY, A NOTICE U/S 148 OF THE INCOME-TAX AC T, 1961 (IN SHORT ACT) WAS ISSUED TO THE ASSESSEE ON 20/07/05 . THE ASSESSING OFFICER HAD DETERMINED THE TOTAL INCOME O F THE ASSESSEE AT RS. 40,86,260/-. 3.1 THE ASSESSEE IS AN INDIVIDUAL AND HAD CONSTRUC TED A WAREHOUSE UNDER GRAMEEN BHANDAR YOZANA SCHEME AT GUNDARAM VILLAGE OF NIZAMABAD DISTRICT. THE TOTAL C OST OF THE WAREHOUSE WAS RS. 77,96,876/-. ASSESSEE HAS BORROWE D LOAN FROM ICICI BANK TO CONSTRUCT THE WAREHOUSE. WHEN TH E ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCES FOR THE FUNDS FOR MAKING THE INVESTMENT, THERE WAS NO PROPER COMPLIANCE FROM THE ASSESSEE AND THE ASSESSING OFFI CER AFTER CONSIDERING THE EVIDENCE AVAILABLE ON RECORD MADE T HE FOLLOWING ADDITIONS: 1. RS. 39,04,888/- AS UNEXPLAINED INVESTMENT U/S 6 9 OF THE ACT. 2. 1,89,330/- TOWARDS UNEXPLAINED EXPENDITURE FOR REPAYMENT OF INTEREST ON BANK LOAN U/S 69C OF THE IT ACT. 4. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). 5. IN THE COURSE OF APPEAL PROCEEDINGS, THE ASSESSE E HAD SUBMITTED THAT TO CONSTRUCT WAREHOUSE, SHE HAS MOBI LISED INVESTMENT AS UNDER APART FROM LOAN, FROM ICICI BAN K: A) AGRICULTURAL INCOME RS. 84,000 B) TAILORING RECEIPTS RS. 69,000 I.T.A. NOS. 1619 & 1620/HYD/2011 J.V. RATNAMANI & J.V. CHITTI BABU 3 C) PAST RENTAL INCOME & HOUSE HOLD SAVINGS RS. 6,2 0,000 D) GIFT FROM SRI K. SURYANARAYANA RS. 3,00,000 E) GIFT FROM SRI D. RAMMOHAN RAO RS. 75,000 F) ADVANCE ON SALE OF PLOT RS. 6,50,000 G) HAND LOANS RS. 1,50,000 6. THE CIT(A) ACCEPTED THE FOLLOWING CLAIMS OF ASSE SSEE: 1. TAILORING INCOME OF RS. 69,000 2. AGRICULTURAL INCOME OF RS. 84,000 3. PAST RENTAL INCOME INCOME & HOUSEHOLD SAVINGS T O THE EXTENT OF RS. 3,00,000/- 4. GIFT FROM SHRI K. SURYANARAYANA OF RS. 3,00,000 6.1 THE CIT(A) SUSTAINED THE FOLLOWING ADDITIONS: 1. PART OF RENTAL INCOME & HOUSEHOLD SAVINGS RS. 3 ,20,000 2. GIFT FROM SHRI D. RAMMOHAN RAO RS. 75,000 3. ADVANCE ON SALE OF PLOT RS. 6,50,000 4. HAND LOANS RS. 1,50,000 5. SUNDRY CREDITORS RS. 18,13,888 6.2 CIT(A) ALSO SUSTAINED ADDITION MADE BY THE ASSE SSING OFFICER U/S 69C OF THE ACT OF RS. 1,83,330, TOWARDS THE UNEXPLAINED EXPENDITURE. 7. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING SUBST ANTIVE GROUNDS: 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN CONFIRMING THE ADDITION OF RS.30,53,170/- OUT OF R S. 39,04,888/- MADE BY THE ASSESSING OFFICER BY APPLYING THE PROVI SIONS OF SEC.69 OF THE IT. ACT. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE CONSIDERED THE FACT THAT AL L THE AMOUNTS HAVE BEEN PROPERLY EXPLAINED AS FROM THE RECEIPTS; OWN FUNDS OUT OF SAVINGS, SUNDRY CREDITORS, ETC., WHICH SHOULD HA VE BEEN ACCEPTED BY THE ASSESSING OFFICER. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN CONFIRMING THE ADDITION OF RS.L,83,330/- ON THE GRO UND THAT INTEREST ON THE LOAN TAKEN FORM ICICI BANK IS NOT PROPERLY E XPLAINED. I.T.A. NOS. 1619 & 1620/HYD/2011 J.V. RATNAMANI & J.V. CHITTI BABU 4 8. WITH REGARD TO GROUND NO. 2, THE LD. AR SUBMITTE D THAT ASSESSEE HAS CLAIMED RS. 6.20 LAKHS AS PAST RENTAL INCOME AND HOUSEHOLD SAVINGS. HE SUBMITTED THAT ASSESSEE W AS HOLDING A HOUSE BEARING NO. 74-11-4, PRAKASH NAGAR, RAJAHMUNDRY SINCE 1983. IT HAS SEVEN PORTIONS OF DW ELLING HOUSE, OUT OF WHICH, SHE WAS GETTING RENT FROM FIVE PORTIONS. HE SUBMITTED THAT SINCE THE ASSESSEE IS A HOUSE WIF E AND SHE NEED NOT HAVE TO SPEND HOUSEHOLD EXPENDITURE AND SA VINGS OF RS. 6.20 LAKHS OUT OF THIS SOURCE IS GENUINE AND RE ASONABLE. 8.1 WITH REGARD TO SUNDRY CREDITORS, THE LD. AR SUB MITTED THAT ALL THESE SUNDRY CREDITORS WERE GENUINE AND TH E ADVANCES TAKEN FROM THE CREDITORS WERE INCURRED FOR CONSTRUC TION OF WAREHOUSE BUILDING. THESE SUNDRY CREDITORS ARE CONS IST OF SMALL AGENTS, WHO ARE DEALING WITH THE CONSTRUCTION MATERIALS. THERE IS A TOTAL OF 38 CREDITORS AND CONFIRMATIONS FROM THEM WERE ALREADY FILED BEFORE THE ASSESSING OFFICER. TH ESE ARE ALL SMALL FARMERS IN AND AROUND THE VILLAGE OF THE ASS ESSEE. THESE SUNDRY CREDITORS WERE GENUINE BECAUSE THESE C REDITORS WERE SETTLED IN THE SUBSEQUENT FY BY TAKING FURTHER LOAN FROM ANDHRA BANK AND OUT OF RENTAL INCOME FROM WAREHOUSE . LD. AR FURTHER SUBMITTED THAT ASSESSEE HAS ENTERED INTO AN AGREEMENT TO SELL A LAND PROPERTY AND MOBILISED FUR THER SUM OF RS. 6.50 LAKHS, FOR WHICH AGREEMENT FOR SALE WAS AL READY SUBMITTED BEFORE THE ASSESSING OFFICER. 8.2 LD. AR SUBMITTED THAT THE ASSESSEE HAD ALSO REC EIVED A GIFT FROM HER BROTHER SHRI D. RAMAMOHAN RAO. HE SUB MITTED THAT THE DONOR HAS CAPACITY TO GIVE A GIFT OF RS. 7 5,000/- TO HIS SISTER AND THE GIFT IS GENUINE AND THE ASSESSEE EST ABLISHED THE IDENTITY OF THE DONOR AND ALSO BEFORE THE ASSESSING OFFICER. I.T.A. NOS. 1619 & 1620/HYD/2011 J.V. RATNAMANI & J.V. CHITTI BABU 5 8.3 LD. AR SUBMITTED THAT CASH CREDIT ENTRIES IN TH E FIRST YEAR OF ITS BUSINESS DID NOT REPRESENT THE INCOME OR PRO FIT OF THE ASSESSEE. FOR THIS PROPOSITION, HE RELIED ON THE DE CISION IN THE CASE OF CIT VS. BHARAT ENGG. CONSTRUCTION COMPANY, 83 ITR 187. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUBMITTED THAT THE CIT(A) AND ASSESSING OFFIC ER HAS GIVEN LOT OF OPPORTUNITIES TO THE ASSESSEE TO PROVE THE GENUINENESS OF THE SOURCE OF FUNDS AND THE CIT(A) H AS ALREADY GIVEN REASONABLE RELIEF TO ASSESSEE AND REL IED ON THE ORDER OF CIT(A). 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS MATERI AL FACTS ON RECORD. IN BRIEF, THE ASSESSEE IS IN APPEAL BEFORE US FOR THE FOLLOWING SOURCE OF INVESTMENTS: 1. SUNDRY CREDITORS RS. 18,13,000 2. RENTAL INCOME SAVINGS RS. 3,20,000 3. ADVANCE FOR SALE OF PLOT RS. 6,50,000 4. GIFT RS. 75,000 10.1 WITH REGARD TO SUNDRY CREDITORS OUTSTANDING AS ON 31/03/2003 AT RS. 18.14 LAKHS, THE CIT(A) HAS CONFI RMED THE SAID ADDITION, BUT, THE ASSESSEE HAS COMPLETED WARE HOUSE BUILDING WITH HER OWN SOURCE OF FUNDS AND TAKING CO NSTRUCTION MATERIAL ON CREDIT. SHE HAS ALSO SUBMITTED THE CONF IRMATIONS FROM THE 38 SMALL CREDITORS WHO ARE BASICALLY SMALL FARMERS, WHO WERE DEALING WITH THE CONSTRUCTION MATERIAL AS SMALL TIME AGENTS. WHAT IS IMPORTANT IS, THE ASSESSEE HAS SETT LED THE ABOVE SUNDRY CREDITORS IN THE SUBSEQUENT AY AND SHO WING A NET OUTSTANDING BALANCE OF RS. 6.51 LAKHS. AFTER AN ALYSING THE BALANCE SHEET AND INCOME STATEMENT OF THE ASSESSEE FILED I.T.A. NOS. 1619 & 1620/HYD/2011 J.V. RATNAMANI & J.V. CHITTI BABU 6 BEFORE THE CIT(A) AND ALSO BEFORE US, THE ASSESSEE HAS RENTAL INCOME TO THE EXTENT OF RS. 7.59 LAKHS AND AFTER SE TTLING THE INTEREST LIABILITY TO BANK, THE ASSESSEE HAD SURPLU S OF RS. 1.51 LAKHS. THE ASSESSEE HAS ALSO TAKEN ADDITIONAL BANK LOAN DURING FY 2003-04 TO THE EXTENT OF RS. 9.25 LAKHS. FROM THE ABOVE SURPLUS OF RENTAL INCOME AND ADDITIONAL LOAN FROM BANK AS WELL AS AGRICULTURE INCOME, SHE HAD SETTLED THE SUNDRY CREDITORS TO THE EXTENT OF RS. 11.63 LAKHS. FROM TH E ABOVE, IT IS CLEAR THAT ASSESSEE HAS ENOUGH FUNDS TO REPAY THE S UNDRY CREDITORS TO THE EXTENT OF RS. 11.63 LAKHS. THEREFO RE, WE ARE OF THE VIEW THAT ASSESSEE HAS ALREADY SUBMITTED THE CONFIRMATIONS FROM THE CREDITORS AND THEY ARE FROM THE SMALL FARMER COMMUNITY AND THE ASSESSEE IS HAILING FROM A SMALL VILLAGE AND MOREOVER NO INVOLVEMENT OF BANK. IN OUR VIEW, THE ASSESSEE HAS ALREADY ESTABLISHED THE GENUINENESS OF THE CREDITORS AND THE TRANSACTION MAY BE UNDER SCRUTINY DUE TO THE FACT THAT IN VILLAGES, FUNDS ARE SETTLED IN CASH. S INCE IT IS A SMALL VILLAGE AND INVOLVEMENT OF SMALL FARMERS, WE ARE INCLINED TO ACCEPT THE SUBMISSIONS OF THE ASSESSEE IN THIS R EGARD. ACCORDINGLY, WE DELETE THE ADDITION MADE ON THIS CO UNT. 10.2 WITH REGARD TO ADVANCE RECEIVED FOR SALE OF LA ND OF RS. 6.5 LAKHS, THE ASSESSEE HAS SUBMITTED AGREEMENT FOR SALE EXECUTED IN FAVOUR OF SMT. Y. NALINI, WHO IS STATE D TO BE RESIDING IN USA. WE ARE NOT IN A POSITION TO ACCEPT THE GENUINENESS OF THE TRANSACTION AS THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED RS. 6.5 LAKHS AND ALSO CONTINUE TO HOLD THE LAND. THERE IS NO EVIDENCE TO SHOW THAT THE ABOVE L AND WAS TRANSFERRED OR THE MONEY TAKEN AS ADVANCE IS RETURN ED. ALSO IN THE SALE AGREEMENT CLAUSE, IT WAS STATED THAT IT I S AGREED BETWEEN THE PARTIES THAT THE BALANCE SALE CONSIDERA TION SHALL BE PAID WITHIN THREE YEARS FROM THE DATE MENTIONED ABOVE OR AT THE TIME OF REGISTRATION WHICHEVER IS EARLIER A ND ALSO THAT IF I.T.A. NOS. 1619 & 1620/HYD/2011 J.V. RATNAMANI & J.V. CHITTI BABU 7 THE PURCHASER FAILS TO PAY THE AGREED BALANCE PAYME NT ON OR BEFORE AGREED PERIOD, THE VENDOR IS AGREED TO REPAY 6 LAKHS BY RETAINING RS. 50,000 TOWARDS TERMINATION OF THIS SA LE AGREEMENT. WE HAVE NOT COME ACROSS ANY REFUND OR CANCELLATION OF THIS AGREEMENT TO SHOW THAT THE TRA NSACTION IS GENUINE, HENCE, WE REJECT THE CLAIM OF THE ASSESSEE ON THIS COUNT. 10.3 WITH REGARD TO PAST RENTAL INCOME AND HOUSE HO LD SAVINGS TO THE EXTENT OF RS. 6.2 LAKHS CLAIMED BY T HE ASSESSEE, THE CIT(A) HAS ALREADY AGREED TO DELETE R S. 3 LAKHS. IN OUR CONSIDERED VIEW, THE CIT(A) COULD HAV E ALLOWED THE BALANCE OF RS. 3.2 LAKHS ALSO AS THE ASSESSEE W AS IN THE POSSESSION OF RESIDENTIAL PROPERTY FROM 1983 ONWARD S I.E. FOR A PERIOD OF 19 YEARS AND ON AN AVERAGE, FIVE PORTIONS OF THE HOUSE PROPERTY WERE ON LEASE, THEREFORE, ASSESSEE C OULD HAVE MADE THE SAVINGS TO THE EXTENT OF RS. 6.2 LAKHS OVE R THIS PERIOD. HENCE, WE DELETE THE TOTAL ADDITION OF RS. 6.2 LAKHS. 11. WITH REGARD TO GROUND NO. 3, ASSESSEE HAS NOT B ROUGHT ON RECORD ANYTHING TO SHOW THAT ANY ADDITIONAL INCO ME TO COVER PAYMENT OF INTEREST TO BANK. THEREFORE, WE CONFIRM THE ACTION OF THE CIT(A) IN SUSTAINING THE ADDITION MADE BY TH E ASSESSING OFFICER. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO. 1620/HYD/2011 13. IN THIS APPEAL, THE AO HAS MADE THE FOLLOWING ADDITIONS: 1. RS. 38,39,337/- AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. 2. 1,75,995/- TOWARDS UNEXPLAINED EXPENDITURE FOR REPAYMENT OF INTEREST ON BANK LOAN U/S 69C OF THE IT ACT. I.T.A. NOS. 1619 & 1620/HYD/2011 J.V. RATNAMANI & J.V. CHITTI BABU 8 14. BEFORE THE CIT(A), THE ASSESSEE HAD CLAIMED THE FOLLOWING SOURCES FOR MAKING INVESTMENT IN THE CONS TRUCTION OF WAREHOUSE: 1. PROFESSIONAL INCOME RS. 78,000 2. AGRICULTURAL INCOME RS. 68,000 3. PAST SALARY SAVINGS RS. 8,80,000 4. GIFT FROM HIS BROTHER, SRI JRK RAO RS. 6,50,000 5. GPF AMOUNT RS. 2,25,000 6. CREDITORS RS. 18,28,337 15. OUT OF THE SAID CLAIMS, THE CIT(A) HAS SUSTAINE D THE FOLLOWING ADDITIONS: 1. PAST SALARY SAVINGS TO THE EXTENT OF RS. 4.30 L AKHS 2. GP AMOUNT OF RS. RS. 2,25,000 3. CREDITORS RS. 18,28,337 15.1 THE CIT(A) ALSO CONFIRMED THE ADDITION OF RS. 1,75,995/- MADE BY THE ASSESSING OFFICER TOWARDS UNEXPLAINED EXPENDITURE U/S 69C OF THE ACT ON ACCOUNT OF PAYMEN T OF INTEREST ON LOAN TO ICICI. 16. THE ASSESSEE, THEREFORE, IS IN APPEAL BEFORE US AND HAS RAISED THE GROUNDS PERTAINING TO THE ABOVE CLAIMS, WHICH WERE CONFIRMED BY THE CIT(A). 17. AS REGARDS THE PAST SALARY SAVINGS, THE FACTS A RE THAT THE ASSESSEE WORKED AS DY. EXECUTIVE ENGINEER WITH THE GOVT. OF AP AND RETIRED IN FEBRUARY, 2002. HE PRODUCED HIS L AST PAY CERTIFICATE INDICATING HIS LAST PAY DRAW AT RS. 21, 321/-. FOR THE MONTH OF FEBRUARY, 2002. HE FURNISHED YEAR-WISE PAR TICULARS OF PAY DRAWN BY HIM INCLUDING THE NET PAY AFTER DEDUCT IONS. DURING THE PERIOD FROM 1990-2002, HE CLAIMED TO HAV E BEEN I.T.A. NOS. 1619 & 1620/HYD/2011 J.V. RATNAMANI & J.V. CHITTI BABU 9 RECEIVED NET SALARY OF RS. 14,30,390/-. ACCORDING T O HIM, HE HAD SALARY SAVINGS OF RS. 9,29,754/- AFTER MEETING DOMESTIC EXPENDITURE OF RS. 5,00,637/-. HE SUBMITTED THAT HE ALWAYS RECEIVED THE SALARY IN CASH AND NEVER MAINTAINED A BANK ACCOUNT. OUT OF SALARY SAVINGS, HE CLAIMED TO HAVE INVESTED AN AMOUNT OF RS. 8,80,000 IN CONSTRUCTION OF WAREHOUSE . THE ASSESSING OFFICER REJECTED THE SUBMISSIONS OF THE A SSESSEE AND REJECTED THE SAID CLAIM OF ASSESSEE. 18. THE CIT(A) OBSERVED THAT THE CLAIM OF THE ASSES SEE WAS FOUND TO BE DISPROPORTIONATE WHEN COMPARED TO HIS N ET SALARY RECEIVED IN THE LAST 10 YEARS. JUST BECAUSE THE ASS ESSEE DID NOT MAINTAIN BANK ACCOUNT, IT CANNOT BE SAID THAT H E DID NOT HAVE ANY SAVING FROM SALARY AT ALL. CONSIDERING ALL THE CIRCUMSTANCES, CIT(A) HELD THAT THE ASSESSEES SALA RY SAVINGS WOULD BE ABOUT 30% OF NET SALARY RECEIVED BY HIM IN THE LAST 10 YEARS WHICH WORKS OUT TO RS. 4.30 LAKHS (30% OF RS. 14,30,390/-). ACCORDINGLY, HE DIRECTED THE ASSESSIN G OFFICER TO GIVE CREDIT FOR THE AMOUNT OF RS. 4.30 LAKHS FROM S ALARY SAVINGS. 19. LD. AR SUBMITTED THAT THE ASSESSEE HAD MADE SAV INGS OF RS. 8.80 LAKHS AND MET THE CONSTRUCTION EXPENSES OU T OF THESE SAVINGS. 20. LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF CIT(A). 21. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE COUNSELS AND MATERIAL FACTS ON RECORD. THE ASSESSEE HAD NOT BROUGHT ANY COGENT MATERIALS BEFORE US TO PROVE THA T HE HAD MADE THE ABOVE SAVINGS OUT OF THE SALARY INCOME. TH E ASSESSEEALSO HAD TO MEET THE DOMESTIC EXPENSES. AS PER RECORDS, THE ONLY REPORTED INCOME WAS SALARY. IN O UR I.T.A. NOS. 1619 & 1620/HYD/2011 J.V. RATNAMANI & J.V. CHITTI BABU 10 CONSIDERED VIEW, IT IS NOT POSSIBLE TO MAKE SAVINGS TO THAT EXTENT OF RS. 8.80 LAKHS. THE CIT(A) HAD PROPERLY C ONSIDERED THE ADDITION AND WE SUSTAIN THE FINDINGS OF THE CIT (A). 22. AS REGARDS GPF AMOUNT, THE ASSESSEE CLAIMED TH AT THIS AMOUNT WAS UTILIZED FOR CONSTRUCTION OF THE WAREHOU SE. ASSESSING OFFICER VERIFIED THE CLAIM AND REJECTED T HE CLAIM. THE CIT(A) HELD THAT IT IS SEEN FROM THE EVIDENCE T HAT THE GPF AMOUNT WAS RECEIVED BY THE ASSESSEE ON 05/05/2003 R ELEVANT TO AY 2004-05 AND HENCE SAME WAS NOT AVAILABLE FOR AY 2003- 04. 23. LD. AR SUBMITTED THAT THE CIT(A) WAS WRONG THAT THE GPF AMOUNT WAS NOT AVAILABLE IN AY 2003-04 AS THE A SSESSEE RECEIVED THE SAME ON 05/05/2003. 24. LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON T HE ORDER OF CIT(A). 25. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS TH E CIT(A) CATEGORICALLY HELD THAT THE ASSESSEE RECEIVE D THE GPF AMOUNT ON 05/05/2003 RELEVANT TO AY 2004-05 AND HEN CE THE SAME WAS NOT AVAILABLE FOR AY 2003-04. WE, THEREFOR E, REJECT THE SUBMISSIONS OF ASSESSEE AND CONFIRM THE ACTION OF THE CIT(A). 26. AS REGARDS SUNDRY CREDITORS OF RS. 18,28,337/-, IT IS OBSERVED THAT SIMILAR ISSUE ON IDENTICAL SET OF FAC TS HAS BEEN DECIDED BY US IN ITA NO. 1619/H/11 (SUPRA) VIDE PAR A NO. 10.1, THEREFORE, FOLLOWING THE CONCLUSIONS DRAWN TH EREIN, WE DELETE THE ADDITION MADE ON THIS COUNT. I.T.A. NOS. 1619 & 1620/HYD/2011 J.V. RATNAMANI & J.V. CHITTI BABU 11 27. WITH REGARD TO THE ADDITION OF RS. 1,75,995/- T OWARDS UNEXPLAINED EXPENDITURE U/S 69 C OF THE ACT, ASSES SEE HAS NOT BROUGHT ANYTHING ON RECORD TO SHOW THAT ANY ADD ITIONAL INCOME TO COVER PAYMENT OF INTEREST TO BANK. THEREF ORE, WE CONFIRM THE ACTION OF THE CIT(A) IN SUSTAINING THE ADDITION MADE BY THE ASSESSING OFFICER. 28. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 29. TO SUM UP BOTH THE APPEALS UNDER CONSIDERATION ARE PARTLY ALLOWED. PRONO UNCED IN THE OPEN COURT ON 16 TH MARCH, 2016 SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER SD/- (S. RIFAUR RAHMAN) ACCOUNTANT MEMBER HYDERABAD, DATED 16 TH MARCH, 2016 KV COPY FORWARDED TO: 1. 1. J.V. RATNAMANI & 2) J.V. CHITTI BABU, C/O SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, H. NO. 3-6-643, ST. NO. 9, HIMAYAT NAGAR, HYDERABAD 500 029. 2. ITO, WARD 10(4), HYDERABAD 3. CIT - VI, HYDERABAD 4 CIT - V, HYDERABAD 5 THE DR, ITAT, HYDERABAD I.T.A. NOS. 1619 & 1620/HYD/2011 J.V. RATNAMANI & J.V. CHITTI BABU 12 S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER I.T.A. NOS. 1619 & 1620/HYD/2011 J.V. RATNAMANI & J.V. CHITTI BABU 13