Chandra Sekhar Nangunuri, Hyderabad V. The ITO, Ward 10(4), Hyderabad

ITA 1699/HYD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2872 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 21-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PHANI RAJU
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained investment; Corroborative evidences
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1699 /HYD/2012 ASSESSMENT YEAR 2009-10 CHANDRASEKHAR NANGUNURI, BEGUMNPET,HYDERABAD. PAN:ACGPN 6472 M VS INCOME-TAX OFFICER, WARD-10(4), HYDERABAD. {APPELLANT) (RESPONDENT) APPELLANT BY : SRI A.V. RAGHU RAM RESPONDENT BY: SHRI PHANI RAJU DATE OF HEARING : 05-6-2013 DATE OF PRONOUNCEMENT : 17-6-2013 ORDER PER SAKTIJIT DEY, JUDICIAL MEMBER. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 17-9-2012 OF CIT (A)-VI, HYDERABAD PASSED IN APPEAL NO.0666/2011-12/CIT(A) VI AND IT PERTAINS TO THE ASSESSMENT YEAR 2009-10. 2. THE ONLY DISPUTE IN THE PRESENT APPEAL IS WITH REGA RD TO THE ADDITION OF RS.36,93,565/- AS UNEXPLAINED CRED ITS IN THE BANK ACCOUNT. BRIEFLY THE FACTS ARE THE ASSESSEE IS AN INDIVIDUAL. FOR THE YEAR UNDER DISPUTE, THE ASSESSEE FILED HIS RETURN OF INCOME ON 8-12-2010 DECLARING A TOTAL INCOME OF RS. 4,38,820/-. IN COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE A SSESSING ITA NO.1699 OF 2012 CHANDRASEKHAR NANGUNURI., HYD. ================== 2 OFFICER ON EXAMINING THE BANK ACCOUNTS OF THE ASSES SEE HELD IN DIFFERENT BANKS SUCH AS TIRUMALA COOPERATIVE URBA N BANK LTD., (TCUB), BANK OF INDIA, UCO BANK AND LAKSHMI VILAS B ANK FOUND CREDITS OF RS.35,43,365/- FOR THE PERIOD FROM 1-4- 2008 TO 31-3- 2009.WHEN THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH THE DETAILS OF AMOUNTS CREDITED IN THE BANK ACCOUNT WITH SOURCE OF SUCH DEPOSITS, THE ASSESSEE IN HIS RELY SUBMITT ED THAT THE DEPOSITS WERE MADE OUT OF THE CASH WITHDRAWALS MADE FROM ALL THE BANK ACCOUNTS AMOUNTING TO RS.49,11,612/-DURING THE FINANCIAL YEAR 2008-09. IT WAS FURTHER SUBMITTED B Y THE ASSESSEE THAT HE HAD AVAILED LOAN FROM DIFFERENT BA NKS AS WELL AS FROM RELIANCE CAPITAL LTD., AND THE SURPLUS CASH AVAILABLE WERE DEPOSITED INTO THE BANK ACCOUNTS ON DIFFERENT DATES. IN SUPPORT OF HIS SUBMISSIONS, THE ASSESSEE ALSO SUBMI TTED CASH FLOW STATEMENT. THE ASSESSING OFFICER OPINED THAT THOUGH THE ASSESSEE WAS IN RECEIPT OF LOAN OF RS.56 LAKHS ON M ORTGAGE OF PROPERTY WITH M/S RELIANCE CAPITAL LTD. TOWARDS ACQ UISITION OF THE PROPERTY BUT IN REALITY, THE ASSESSEE HAS PAID A FURTHER SUM OF RS.30 LAKHS IN CASH OVER AND ABOVE RS.26,66,000/ -. OTHERWISE, THERE WAS NO NEED TO OBTAIN LOAN OF RS.5 6 LAKHS AND WITHDRAW AN AMOUNT OF RS.30 LAKHS IN CASH FROM THE BANK ACCOUNT. THE ASSESSING OFFICER THEREFORE HELD THAT THE SELF WITHDRAWALS OF RS.30 LAKHS WERE MADE BY THE ASSESSE E FOR SPECIFIC PURPOSE OF ACQUIRING THE PROPERTY AND IS N OT AVAILABLE WITH THE ASSESSEE AS SURPLUS. THE ASSESSING OFFICER FURTHER HELD THAT THE ASSESSEE HAS ALSO REPAID LOAN OF RS.18,91, 000/- TAKEN FROM VARIOUS PERSONS. THEREFORE, THE CASH WITHDRAW N FROM THE BANK WERE UTILISED FOR REPAYMENT OF LOAN BORROWED AND AS SUCH THE CASH WITHDRAWAL MADE COULD NOT BE AVAILABLE AS SURPLUS WITH THE ASSESSEE TO BE DEPOSITED INTO THE BANK ACCOUNT. THE ASSESSING OFFICER THUS CAME TO A CONCLUSION THAT FR OM THE ITA NO.1699 OF 2012 CHANDRASEKHAR NANGUNURI., HYD. ================== 3 WITHDRAWALS MADE FROM THE BANK ACCOUNT AMOUNTING TO RS.44,44,012/- THE ASSESSEE HAS UTILISED RS.30 LAKH S FOR ACQUIRING THE PROPERTY AND AN AMOUNT OF RS.18,91,00 0/- FOR REPAYMENT OF LOAN. THEREFORE, NO SURPLUS CASH WAS AVAILABLE WITH THE ASSESSEE FOR DEPOSITING INTO THE BANK ACCO UNT. ACCORDINGLY, THE ASSESSING OFFICER CAME TO A CONCLU SION THAT THE AMOUNT OF CASH DEPOSITS INTO BANK ACCOUNT AMOUNTING TO RS.35,43,565/- IS THE UNEXPLAINED INVESTMENT OF THE ASSESSEE U/S 69 OF THE ACT. HOWEVER, WHILE COMPUTING THE IN COME, THE ASSESSING OFFICER ACTUALLY ADDED AN AMOUNT OF RS.36 ,93,565/-. THE ASSESSEE BEING AGGRIEVED OF THE ADDITION MADE P REFERRED AN APPEAL BEFORE THE CIT (A). 3. THE CIT (A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE WAS SATISFIED THAT THE ASSESSEE HAD ONLY P AID AN AMOUNT OF RS.26,66,000/- FOR ACQUISITION OF THE PRO PERTY AND NOT RS.56 LAKHS AS HELD BY THE ASSESSING OFFICER. THE OBSERVATIONS MADE BY THE CIT (A) IN THIS REGARD ARE REPRODUCED B ELOW:- IN THE COURSE OF THE APPELLATE PROCEEDINGS, THE AR HAS SUBMITTED THAT THE ASSESSEE HAD AVAILED LOAN OF RS.56,00,000/- FROM RELIANCE CAPITAL LTD., AGAINST MORTGAGE OF PROPERTY BEARING NO.1-11-252/31, MOTILA L NEHRU NAGAR, BEGUMPET, HYDERABAD, THAT THE PROPERTY WAS JOINTLY OWNED BY THE ASSESSEE ALONG WITH HIS BR OTHER N. AMARNATH, THAT THE ASSESSEE HAD PURCHASED HIS BROTHERS HALF SHARE BY ISSUING POST DATED CHEQUE FOR RS.26,66,000/- AND GOT THE RELEASE DEED EXECUTED ON 27- 3-2008, AND THAT ON SUBMISSION OF THE RELEASE DEED AND OTHER RELEVANT DOCUMENTS, RELIANCE CAPITAL HAS DISB URSED THE LOAN OF RS.56,00K000/- ON 29-3-2008 WHICH WAS USED FOR HONOURING THE CHEQUE ISSUED TO HIS BROTHER FOR RS.26,66,000/-. THE AR ALSO FILED COPIES OF THE SA NCTION ITA NO.1699 OF 2012 CHANDRASEKHAR NANGUNURI., HYD. ================== 4 LETTER FROM RELIANCE CAPITAL LD., AND THE RELEASE D EED EXECUTED BY N. AMARNATH. I FIND FROM A PERUSAL OF THESE DOCUMENTS THAT THE ASSESSEE WAS ALREADY A 50% OWNER OF THE PROPERTY AND THAT CONSIDERING THAT THE LOAN OF RS.56,00,000/- WAS SANCTIONED AGAINST THE ENTIRE PROPERTY, THE PAYMENT OF RS.26,66,000/- FOR THE 50% SHARE OF THE BROTHER APPEARS TO BE LOGICAL. SINCE, THE ASSESSEE WAS MAKING A PAYMENT FOR ACQUIRING ONLY 50 % OF THE SHARE OF THE PROPERTY, PAYMENT OF THE ENTIRE 56,00,000/- TO THE BROTHER DID NOT ARISE. FURTHER, THE ASSESSEE HAD MERELY TAKEN A LOAN AGAINST MORTGAGE O F THE PROPERTY AND THERE IS NO REASON TO PRESUME THAT THE LOAN WAS FOR ACQUISITION OF THE PROPERTY. THE OBSE RVATION OF THE ASSESSING OFFICER THAT THE WITHDRAWAL OF RS.30,00,000 WAS SPENT FOR ACQUIRING THE PROPERTY I S, THEREFORE, MERELY A PRESUMPTION WHICH IS NOT BORNE OUT BY THE FACTS. 4. THE CIT (A) ALSO ACCEPTED THE FACT THAT THE WITH DRAWALS OF RS.44,44,412/- WAS NOT UTILISED FOR LOAN REPAYMENT OF RS.18,91,000/-. HOWEVER, THE CIT (A) TAKING INTO C ONSIDERATION THE FACT THAT THE ASSESSEE HAD MADE WITHDRAWALS OF RS.19,300 AND RS.23,350/- IMMEDIATELY AFTER CASH WITHDRAWALS OF RS.30 LAKHS, WAS OF THE VIEW THAT SINCE THE ASSESSEE WAS HAVING THE CASH AVAILABLE WITH HIM OUT OF WITHDRAWALS MADE, TH ERE WAS NO NEED FOR HIM TO FURTHER WITHDRAW THE SPECIFIC AMOUN TS OF RS.19,300/- AND RS.23,350/- WHICH ACCORDING TO THE CIT (A) WERE TO MEET SPECIFIC REQUIREMENTS. THE CIT (A) FU RTHER TAKING NOTE SOME OF THE WITHDRAWALS MADE BY THE ASSESSEE ON DIFFERENT DATES CAME TO A CONCLUSION THAT WHEN THE ASSESSEE WAS HAVING CASH BALANCE IN EXCESS OF 15 TO 16 LAKHS THR OUGHOUT THE FINANCIAL YEAR IT WAS INCONCEIVABLE ON HIS PART TO MAKE SUCH PETTY WITHDRAWALS. ACCORDINGLY, THE CIT (A) HOLDIN G THAT THE ITA NO.1699 OF 2012 CHANDRASEKHAR NANGUNURI., HYD. ================== 5 WITHDRAWALS OF RS.44,44,412/- BY THE ASSESSEE WERE UTILISED FOR SPECIFIC PURPOSES AND WERE NOT AVAILABLE FOR MAKING SUBSEQUENT DEPOSITS SUSTAINED THE ADDITION MADE BY THE ASSESSI NG OFFICER. THE FINDING OF THE CIT (A) IN THIS REGARD IS EXTRAC TED FOR READY REFERENCE:- HOWEVER, THE ASSESSEE HAS NOT EXPLAINED WHY IT HAD MADE SUCH HUGE WITHDRAWALS FROM THE BANK IF NOT TO MEET SPECIFIC REQUIREMENTS FOR EXPENSES OR INVESTME NT. A PERUSAL OF THE CASH FLOW STATEMENT SHOWS THAT DES PITE THE ALLEGED CASH BALANCE OF RS.32,53,180/- AFTER TH E CASH WITHDRAWAL OF RS.30,00,000/- ON 2-4-2008, THE ASSES SEE CHOSE TO WITHDRAW RS.19,300/- AND RS.23,350/- IMMEDIATELY THEREAFTER ON 3-4-2008. IT IS AGAINST ALL NORMS OF PROBABLE HUMAN BEHAVIOUR THAT SUCH MINOR WITHDRAWALS WOULD BE MADE WHEN THE ASSESSEE WAS ALLEGEDLY SITTING ON A PILE OF CASH OF MORE THAN RS.32,00,000/-. IT IS ALSO RELEVANT THAT THE TWO WITHDRAWALS ARE OF VERY PRECISE AMOUNTS AND NOT IN ROUND FIGURES. IT SHOWS THAT THE WITHDRAWALS WERE MADE BECAUSE THE ASSESSEE NEEDED THESE PRECISE AMOUNTS T O MEET SPECIFIC REQUIREMENTS AND THE ASSESSEE OBVIOU SLY DID NOT HAVE THE CASH AVAILABLE FOR IT. SIMILARLY, THE ASSESSEE CONTINUED TO MAKE SIMILAR WITHDRAWALS OF SPECIFIC AMOUNTS ALL THROUGH THE YEAR THOUGH HIS CA SH BALANCE ALLEGEDLY CONTINUED TO BE ABOVE RS.10,00,00 0/- THROUGHOUT THE YEAR. FOR EXAMPLE, WITHDRAWALS WERE MADE OF RS.13,575/- ON 21-5-2008, RS.5,100/- ON 18- 6- 2008, RS.2,575/- ON 6-9-2008, RS.18,300 ON 17-10-20 08, RS.2500/- ON 6-11-2008, RS.13,500/- ON 24-12-2008, AND RS.11,342/- ON 3-2-2009. IT IS INCONCEIVABLE T HAT A PERSON HAVING CASH BALANCES IN EXCESS OF RS.15-16 L AKHS WOULD NEED TO MAKE SUCH PETTY WITHDRAWALS. I, THERE FORE, HOLD THAT THE WITHDRAWALS OF RS.44,44,412/- MADE B Y THE ASSESSEE WERE UTILISED FOR SPECIFIC PURPOSES AN D WERE NOT AVAILABLE FOR MAKING THE SUBSEQUENT DEPOSITS. THE ADDITION MADE BY THE ASSESSING OFFICER IS, THEREFOR E, UPHELD. 5. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE AS SESSEE SUBMITTED BEFORE US THAT WHEN THE CIT (A) ACCEPTS T HE FACTS THAT RS.30 LAKHS WAS WITHDRAWN BY THE ASSESSEE, WAS NOT UTILISED FOR ACQUIRING THE PROPERTY, SHE WAS NOT JUSTIFIED IN RE JECTING ASSESSEES CONTENTION OF DEPOSITS MADE INTO THE BAN K ACCOUNT. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSES SEE REFERRING ITA NO.1699 OF 2012 CHANDRASEKHAR NANGUNURI., HYD. ================== 6 TO THE LANGUAGE OF SECTION 69 OF THE ACT SUBMITTED THAT WHEN THE ASSESSEE HAS EXPLAINED THE SOURCE OF DEPOSITS, THE ONUS LIES ON THE DEPARTMENT TO PROVE THAT THE AMOUNT AVAILABLE W ITH THE ASSESSEE FROM THE WITHDRAWALS MADE FROM THE BANK AC COUNT WAS OTHERWISE UTILISED. THE LEARNED AUTHORISED REPRESE NTATIVE FOR THE ASSESSEE SUBMITTED THAT SINCE THE ASSESSEE WAS HAVI NG ADEQUATE CASH BALANCE TO MAKE DEPOSITS TO THE BANK ACCOUNTS, NO ADDITION CAN BE MADE REJECTING SUCH EXPLANATION. IN SUPPORT OF SUCH CONTENTION, THE LEARNED AUTHORISED REPRESEN TATIVE FOR THE ASSESSEE RELIED UPON THE FOLLOWING DECISIONS:- 1) ACIT VS. SHAHZAD LOOKMAN QADIR (3 ITR (TRIB.) 177 (MUM.) 2) ANAND AUTORIDE LTD. VS. JCIT (99 ITD 227) 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUPPORTING THE ORDERS OF THE CIT (A) SUBMITTE D THAT SINCE THE ASSESSEE COULD NOT PROVE THE SOURCE OF THE DEPO SITS INTO THE BANK ACCOUNT SUCH DEPOSITS WERE RIGHTLY HELD AS UNE XPLAINED INVESTMENT OF THE ASSESSEE. IN SUPPORT OF SUCH CON TENTION, THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE DECISIONS OF HONBLE SUPREME COURT IN CASE OF SUMATI DAYAL V S. CIT( 214 ITR 801 (SC) AND THE DECISION IN THE CASE OF CIT VS. DURGA PRASAD MORE (82 ITR 540) (SC). 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS OF THE PA RTIES AND PERUSED THE MATERIAL ON RECORD. WE HAVE ALSO APPLIE D OUR MIND TO THE DECISIONS CITED BY THE PARTIES. THE SOLE IS SUE IN THE PRESENT APPEAL IS WHETHER CASH DEPOSITS MADE IN DIF FERENT BANK ACCOUNTS OF THE ASSESSEE WERE OUT OF THE WITHDRAWAL S MADE BY THE ASSESSEE AS PER THE CLAIM OF THE ASSESSEE OR NO T. FROM THE ORDER OF THE CIT (A) REPRODUCED ABOVE, IT IS QUITE EVIDENT THAT ITA NO.1699 OF 2012 CHANDRASEKHAR NANGUNURI., HYD. ================== 7 THE CIT (A) HAS ACCEPTED THE FACT THAT THE ASSESSEE HAS PAID RS.26,66,000/- TOWARDS ACQUISITION OF THE PROPERTY AND NOT RS.56 LAKHS AS HELD BY THE ASSESSING OFFICER. THER EFORE, THE SELF WITHDRAWAL OF RS.30 LAKHS IN CASH WAS AVAILABLE WIT H THE ASSESSEE. SIMILARLY, THE CIT (A) HAS ALSO ACCEPTED THE FACT THAT LOAN REPAYMENT OF RS.18,91,000/- TO DIFFERENT PERSO NS WAS NOT OUT OF THE CASH WITHDRAWALS OF RS.44,44,412/-. THE REFORE, THE NATURAL COROLLARY WOULD BE THE SAID AMOUNT OF WITHD RAWALS MADE FROM THE BANK ACCOUNTS WERE AVAILABLE WITH THE ASSE SSEE AS PER THE EXPLANATION SUBMITTED BY HIM. ONLY BECAUSE THE ASSESSEE HAD MADE SOME WITHDRAWALS FROM THE BANK ACCOUNT OF SPECIFIC AMOUNT, A CONCLUSION CANNOT BE DRAWN THAT NO SURPLU S CASH WAS AVAILABLE WITH THE ASSESSEE OUT OF WITHDRAWALS MADE BY HIM FROM BANK ACCOUNT. THOUGH THE ASSESSEE HAS EXPLAI NED THAT THE AMOUNT OF RS.44,44,412/- WITHDRAWN FROM BANK AC COUNTS WERE AVAILABLE WITH HIM WHICH WAS RE-DEPOSITED INT O THE BANK ACCOUNTS AGAIN, THE CIT (A) HAS NOT ACCEPTED SUCH C ONTENTION BY OBSERVING THAT THE ASSESSEE HAS UTILISED THE AMOUNT FOR SPECIFIC PURPOSES. AS IT APPEARS THE INFERENCE DRAWN BY THE CIT (A) IS BASED MORE ON PRESUMPTION AND SUSPICION RATHER THAN ANY CLINCHING MATERIAL AND EVIDENCE BROUGHT ON RECORD. BEFORE COMING TO THE CONCLUSION THAT THE ASSESSEE HAS UTIL ISED THE WITHDRAWN AMOUNT OF RS.44,44,412/- FOR SOME SPECIFI C PURPOSE, IT WAS INCUMBENT ON THE PART OF THE REVENUE AUTHORI TIES TO ESTABLISH ON RECORD WITH SUPPORTING EVIDENCE WHAT ARE THE SPECIFIC PURPOSES FOR WHICH THE AMOUNT WAS UTILISED BY THE ASSESSEE. WITHOUT BRINGING ANY MATERIAL ON RECORD, ASSESSEES EXPLANATION REGARDING AVAILABILITY OF CASH CANNOT B E REJECTED ON PRESUMPTION AND SURMISES WHEN THERE IS NO MATERIAL ON RECORD TO PROVE THAT THE ASSESSEE HAD ACQUIRED ANY ASSET O R UTILISED SUCH FUNDS FOR ANY PURPOSE. PRESUMPTION AND SUSPICI ON HOWEVER ITA NO.1699 OF 2012 CHANDRASEKHAR NANGUNURI., HYD. ================== 8 STRONG MAY BE CANNOT TAKE THE PLACE OF EVIDENCE. T HEREFORE, CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT, THE EXPLANATION SUBMITTED BY THE ASSESSEE THAT THE AMOUNTS WITHDRAWN FROM THE BANK W AS AGAIN RE-DEPOSITED IN TO THE BANK ACCOUNT HAS TO BE ACCEP TED WHEN THERE IS NO OTHER MATERIAL BROUGHT ON RECORD TO SHO W THAT THE ASSESSEE HAS UTILISED IT FOR SOME OTHER PURPOSE. AC CORDINGLY, THE ADDITION MADE CANNOT BE SUSTAINED AND THE ASSESSING OFFICER IS DIRECTED TO DELETE THE SAME. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE STAN DS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 17-06-201 3. SD/- (CHANDRA POOJARI) SD/- (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE 17 TH JUNE, 2013. COPY FORWARDED TO: 1. C/O S/SRI A.V. RAGHURAM & K. VASANTKUMAR, ADVOCATES , 610, 6 TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2. ITO, WARD- 10(4), HYDERABAD. 3. CIT (A)-VI, HYDERABAD. 4. CIT CONCERNED, HYDERABAD. 5. THE DR, ITAT, HYDERABAD JMR* ITA NO.1699 OF 2012 CHANDRASEKHAR NANGUNURI., HYD. ================== 9 ITA NO.1699 OF 2012 CHANDRASEKHAR NANGUNURI., HYD. ================== 10