Mediga Ashok Kumar, Secunderabad V. Income Tax Officer, Ward-1, Suryapet

ITA 1674/HYD/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7708 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 03-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: M V ANIL KUMAR
• Keywords: Business income
• Section: 142(1); 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.1674/HYD/2013 ASSESSMENT YEAR 2005-2006 MEDIGA ASHOK KUMAR, SURYAPET, PAN AAIHM7634L VS. THE INCOME TAX OFFICER, WARD-1, SURYAPET. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. M.V. ANIL KUMAR FOR REVENUE : MR. RAJAT MITRA DATE OF HEARING : 10.12.2014 DATE OF PRONOUNCEMENT : 29.12.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS IS AN ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A)-XVIII, MUMBAI HAVING CONCURRENT JURISDIC TION OF LD. CIT(A)-VI, HYDERABAD DATED 13.09.2013 FOR THE A.Y. 2005-06. THE ISSUE IN THIS APPEAL IS WITH REFERENCE TO ADDIT ION OF AN AMOUNT OF RS.10,45,120. 2. CONSEQUENT TO THE RECEIPT OF ANNUAL INFORMATION REPORT, A.O. HAS COME TO NOTICE THAT ASSESSEE HAS M ADE DEPOSITS OF RS.10,45,120 IN THE BANK ACCOUNT MAINTA INED WITH M/S. SUDHA COOP. URBAN BANK LTD. ASSESSEE FILED RET URN OF INCOME ADMITTING INCOME OF RS.1,00,300 ESTIMATING I NCOME AT 5% OF TURNOVER OF RS.20,06,000 IN THE CLOTH BUSINES S IN THE STATUS OF HUF. A.O. ASKED THE ASSESSEE TO SUBMIT TH E SOURCE OF DEPOSITS WHICH THE ASSESSEE HAS NOT RESPONDED WITHI N THE TIME GIVEN BY ASSESSING OFFICER. A.O. BY RECORDING THAT THE CASE IS 2 GETTING TIME BARRED BY LIMITATION BY 31.12.2007, PA SSED THE ORDER ON 24.12.2007 MAKING ADDITION OF RS.10,45,120 AS INCOME UNDER SECTION 68 OF THE I.T. ACT. 3. BEFORE THE LD. CIT(A), ASSESSEE CONTENDED THAT ASSESSEE IS A SMALL BUSINESSMAN HAVING TURNOVER OF LESS THAN RS. 40 LAKHS AND SO HAS COMPUTED THE INCOME AS PER THE PROVISIONS OF SECTION 44AF ESTIMATING INCOME AT 5% ON THE TURNOVER. SINCE, HE HAS NOT MAINTAINED THE BOOKS OF ACCOUNTS, QUESTION OF ADDITION UNDER SECTION 68 CANNOT BE MAD E AS WAS DONE BY A.O. BY RELYING ON THE DECISION OF THE BOMB AY HIGH COURT IN THE CASE OF CIT VS. BHAICHAND N. GANDHI (1 982) 11 TAXMAN 59 AND COORDINATE BENCH DECISION IN THE CASE OF ITO VS. KAMAL KUMAR MISHRA (2013) 33 TAXMANN.COM 610 (LUCKNOW-TRIB.). LD. CIT(A), HOWEVER, NOTICED THAT ASSESSEE WAS GIVEN OPPORTUNITIES TO EXPLAIN THE SOURCE OF TH E DEPOSITS AND SINCE THE ASSESSEE FAILED TO FURNISH THE EVIDEN CE TO PROVE THE SOURCE OF CASH DEPOSIT, HE ANALYSED THE ISSUE U NDER LEGAL PROVISIONS. WHILE ACCEPTING THAT PROVISIONS OF SEC TION 68 ARE NOT APPLICABLE AS ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOUNTS, LD. CIT(A) WAS OF THE OPINION THAT PROVIS IONS OF SECTION 69 ARE APPLICABLE AND RELYING ON THE DECISI ON OF COORDINATE BENCH OF BANGALORE TRIBUNAL IN THE CASE OF P.V. RAJENDAR VS. ITO 57 TTJ 159, HE CHANGED THE SECTION UNDER WHICH ADDITION WAS MADE AND CONFIRMED THE AMOUNT ST ATING THAT ASSESSEE HAS FAILED TO SUBMIT ANY EVIDENCE TO PROVE THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT. ASSESS EE IS AGGRIEVED. 4. AFTER CONSIDERING THE RIVAL CONTENTIONS AND PERUSING THE PAPER BOOK PLACED ON RECORD, WE ARE OF THE OPINION THAT THERE IS NO NEED TO MAKE ANY ADDITION IN 3 ASSESSEES CASE. AS SEEN FROM THE SUBMISSIONS ON TH E RECORD, ASSESSEE IS RUNNING A RETAIL CLOTH BUSINESS IN THE NAME AND STYLE OF A-STAR SILKS AT SURYAPET AND THE TOTAL TUR NOVER WAS AT RS.20,06,000. THE BANK ACCOUNT MAINTAINED BY ASSESS EE IS FOR THE PURPOSE OF BUSINESS BUT IN THE JOINT NAME OF AS SESSEE AND ASSESSEES WIFE. IT WAS THE EXPLANATION OF ASSESSEE THAT THE CASH DEPOSITS MADE ARE BUSINESS RECEIPTS AND THERE ARE REGULAR WITHDRAWALS FOR THE PURPOSE OF BUSINESS DURING THE YEAR. THEREFORE, SEPARATE ADDITION OF THE DEPOSITS CANNOT BE MADE. 5. AS CAN BE SEEN FROM THE ORDER OF ASSESSIN G OFFICER, A.O. HAS ISSUED ONLY ONE NOTICE UNDER SECTION 143(2) AND 142(1) POSTING THE CASE ON 24.12.2007. A.O. RECORDS THE F OLLOWING IN THE ORDER : IN RESPONSE TO NOTICE ISSUED UNDER SECTION 143(2) AND 143(1), ASSESSEES AUTHORISED REPRESENTATIVE MR. S. RAMAKRISHNA, INCOME TAX PRACTITIONER APPEARED ON 24.12.2007 AND THEREAFTER, SEEKING NUMBER OF ADJOURNMENTS REPEATEDLY WITHOUT DISCLOSING THE REQU ISITE INFORMATION CALLED FOR VIDE NOTICE UNDER SECTION 14 2(1). AS SEEN FROM THE DATE OF ORDER, THE ORDER WAS COMPL ETED ON 24.12.2007 ITSELF. WE ARE UNABLE TO UNDERSTAND HOW THE INCOME TAX PRACTITIONER WHO APPEARED ON 24.12.2007 COULD SEEK REPEATED ADJOURNMENTS WHEN THE ASSESSMENT ORDE R ITSELF WAS COMPLETED ON THE SAME DAY. THEREFORE, THE OBSER VATION OF THE LD. CIT(A) THAT A.O. GAVE NUMBER OF OPPORTUNITI ES TO ASSESSEE CANNOT BE ACCEPTED. 6. BE THAT AS IT MAY, ASSESSEE HAS NOT MAINTA INED BOOKS OF ACCOUNTS. THEREFORE, ASSESSEES EXPLANATIO N THAT DEPOSITS IN THE BANK ACCOUNT ARE OUT OF PROCEEDS OF BUSINESS CANNOT BE BRUSHED ASIDE. SINCE THE DEPOSITS IN THE BANK 4 ACCOUNT ARE LESS THAN THE TURNOVER SHOWN BY ASSESSE E, A PRESUMPTION CAN BE DRAWN ACCEPTING ASSESSEES EXPLA NATION THAT THE DEPOSITS ARE NOTHING BUT BUSINESS RECEIPTS . SINCE THE PROVISIONS OF SECTION 44AF ARE INVOKED IN THE CASE, WE ARE OF THE OPINION THAT SEPARATE ADDITION OF DEPOSITS AS U NEXPLAINED CREDITS CANNOT BE APPROVED. IN VIEW OF THIS, ASSESS EES GROUNDS ARE ALLOWED. A.O. IS DIRECTED TO ACCEPT THE INCOME RETURNED AS SUCH. GROUND OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.12.2014. SD/- SD/- (SAKTIJIT DEY) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 29 TH DECEMBER, 2014 VBP/- COPY TO 1. MR. MEDIGA ASHOK KUMAR, SURYAPET, C/O. M. ANANDAM & CO., CHARTERED ACCOUNTANTS, 7-A, SURYA TOWERS, S.P. ROAD, SECUNDERABAD 3. 2. INCOME TAX OFFICER, WARD-1, SURYAPET 3. CIT(A)-18, MUMBAI 4. CIT(A)-VI, HYDERABAD 5. CIT-5/6, HYDERABAD 6. D.R. ITAT B BENCH, HYDERABAD.