Income Tax Officer, Ward-2, Warangal V. Smt.Rama Veligati, Warangal

ITA 1754/HYD/2013

• Counselvise Citation: 175422514 RSA 2013
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 19-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B SHANTI KUMAR
• Keywords: Salary income; Onus to prove
• Section: 142(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA.NO.1754/HYD/2013 ASSESSMENT YEAR 2009-2010 ITO, WARD 2 WARANGAL VS. SMT. RAMA VELIGATI HANAMKONDA, WARANGAL PAN AHSPV-9155C (APPELLANT) (RESPONDENT) FOR REVENUE MR. SOLGY JOSE T. KOTTARAM FOR ASSESSEE MR. B. SHANTI KUMAR DATE OF HEARING 24.07.2014 DATE OF PRONOUNCEMENT 13.08.2014 ORDER PER SMT. ASHA VIJAYARAGHAVAN, J.M. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-VI, HYDERABAD DATED 16.09.2 013 FOR THE ASSESSMENT YEAR 2009-2010. ASSESSEE IS AN INDIVIDUA L DERIVING INCOME FROM SALARY AND INTEREST FREE PARTNERSHIP CO NCERNED. SHE FILED HER RETURN OF INCOME FOR A.Y. 2009-2010 A DMITTING TOTAL INCOME OF RS.2,80,340. 2. THE FACTS IN ISSUE ARE THAT ASSESSEE WAS HOLDIN G A BANK ACCOUNT WITH ICICI HANAMKONDA BRANCH WITH ACCO UNT NO.020101506384 WHEREIN CASH AND CHEQUE DEPOSITS TO THE TUNE OF RS.77,33,902 WERE FOUND TO BE MADE AND A.O. WAS OF THE VIEW THAT THIS ACCOUNT WAS NOT DISCLOSED. ASSES SING OFFICER ISSUED SHOW CAUSE NOTICES UNDER SECTION 143(2) AND 142(1) ON 2 ITA.NO.1754/HYD/2013 SMT. RAMA VELIGATI, WARANGAL VARIOUS DATES AND THE LD. A.R. WAS DIRECTED TO PROD UCE THE INFORMATION CALLED FOR VIDE NOTICE UNDER SECTION 14 2(1). LD. A.R. FAILED TO PRODUCE THE SAME AND HENCE, A.O. PROCEEDE D TO COMPLETE THE ASSESSMENT UNDER SECTION 144. A.O. BRO UGHT TO TAX THE TOTAL DEPOSITS OF RS.77,33,902, I.E., CASH DEPOSITS OF RS.53,02,326 AND CHEQUE DEPOSITS OF RS.24,31,577, T O TAX BY TREATING THEM AS UNEXPLAINED INCOME OF THE ASSESSEE . 3. AGGRIEVED, ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) AND SUBMITTED THAT SHE HAD FILED RETURN OF I NCOME FOR THE A.Y. 2009-2010 OFFERING INCOME FROM SALARY AND INTEREST, INCOME FROM PARTNERSHIP CONCERNED BY NAME TEJA GRAN ITES AND ALSO INCOME WHICH DERIVED FROM ENGAGEMENT OF MARRIA GE ALLIANCES. IT WAS STATED THAT THE BANK ACCOUNT MAIN TAINED IN THE ICICI BANK WHEREIN DEPOSITS OF RS.77,33,902 WAS FOUND WAS THE JOINT ACCOUNT OF THE ASSESSEE AND HER HUSBA ND. IT WAS SUBMITTED THAT THE ASSESSEE HAD NOT MAINTAINED ANY BOOKS OF ACCOUNTS AND HENCE, THE DISCLOSURE OF THE BANK ACCO UNT DID NOT ARISE. IT WAS STATED THAT ACCOUNT WAS THE JOINT ACCOUNT WITH HER HUSBAND MR. RAJA REDDY WHO WAS DERIVING INCOME FROM COMMISSION AND BROKERAGE IN THE BUSINESS OF GRANITE S. IT WAS SUBMITTED THAT THERE WAS NO SOURCE FOR HER TO DEPOS IT SUCH HUGE AMOUNTS AND SHE STATED THAT THE DEPOSITS WERE MADE BY HER HUSBAND INTO THE JOINT ACCOUNT. COPY OF THE RET URN OF INCOME FILED BY MR. RAJA REDDY HUSBAND OF THE ASSES SEE WAS FURNISHED BEFORE THE LD. CIT(A). THE LD. CIT(A) FOR WARDED THE SUBMISSIONS OF THE ASSESSEE AND COPIES OF THE BANK ACCOUNT TO THE A.O. FOR MAKING NECESSARY ENQUIRIES AND FOR FUR NISHING OF THE REPORT. 4. THE ASSESSING OFFICER VIDE REMAND REPORT SUBMITTED THAT THE ASSESSEES HUSBAND SRI. V.RAJI R EDDY 3 ITA.NO.1754/HYD/2013 SMT. RAMA VELIGATI, WARANGAL ALONG WITH THE AR WAS PRESENT BEFORE THE ASSESSING OFFICER AND FURNISHED LETTER OF THE ASSESSEE DATED 03.06.20 13 STATING THAT THE BOOKS OF ACCOUNT PREPARED FOR THE BUSINESS CARRIED ON BY HER HUSBAND PROVE THAT THE AMOUNTS OF DEPOSITS IN THE BANK ACCOUNT DOES NOT BELONG TO HER . IT WAS STATED BY THE ASSESSING OFFICER THAT ASSESSEE'S HUS BAND SRI. V. RAJI REDDY HAD FILED THE RETURN OF INCOME F OR THE AY 2009-10 ON 27.3.2012 ADMITTING TOTAL INCOME OF RS.1,45,250/- AFTER CLAIMING DEDUCTION U/S.80C. IT WAS FURTHER STATED THAT A PERUSAL OF PURCHASE/SALE REGI STERS DRAWN FOR THE PERIOD FROM 01.04.2008 TO 31.3.2009 A ND ON COMPARISON WITH BANK TRANSACTIONS DO NOT TALLY WITH THE ENTRIES MADE IN THE REGISTER. FURTHER THERE WERE AT M/CASH WITHDRAWALS ON VARIOUS DATES FOR DIFFERENT AMOUNTS AND THE ONUS TO PROVE THE SAME LIES WITH THE ASSESSEE'S HUS BAND TO THE EFFECT THAT ALL THESE DEPOSITS AND WITHDRAWALS BELONG TO THE BUSINESS OF SRI. V. RAJI REDDY. IT WAS STATED T HAT UNTIL AND UNLESS A THOROUGH SCRUTINY IS DONE IN THE CASE OF THE ASSESSEE'S HUSBAND SRI.V. RAJI REDDY, NO CONCLUSION CAN BE DRAWN TOWARDS THE CLAIM MADE BY THE ASSESSEE THAT T HE DEPOSITS DO NOT BELONG TO THE ASSESSEE. THE ASSESSING OFFICER FURTHER OPINED THAT THE RETURN OF INCOME FI LED BY THE ASSESSEE'S HUSBAND SRI. V. RAJI REDDY WAS A BELATED ONE AND REQUIRES TO BE REOPENED AND SCRUTINISED TO CONF IRM THE VERACITY OF THE TRANSACTIONS. THE ASSESSING OFFICER FURTHER MAINTAINED THAT THE BOOKS OF ACCOUNT PREPARED AND PRODUCED RELATING TO ASSESSEE'S HUSBAND, REVEAL THA T THE BUSINESS WAS CARRIED ON WITH A STOCK OF RS. 23,37,3 36 AND CORRESPONDING SALE OF RS.21,64,577, WHEREAS THE BAN K ACCOUNT MAINTAINED WITH ICICI BANK HAD DEPOSIT OF RS.77,33,902. THE ASSESSING OFFICER THUS, OPINED TH AT THE 4 ITA.NO.1754/HYD/2013 SMT. RAMA VELIGATI, WARANGAL ASSESSEE'S CLAIMS NEED TO BE REJECTED AND SOUGHT FO R DIRECTIONS TO EXAMINE THE SOURCES FOR CASH DEPOSITS IN THE HANDS OF SRI. V. RAJI REDDY. 5. ASSESSEE OBJECTED TO THE REMAND REPORT IN ITS REJOINDER AND SUBMITTED THAT UNLESS AND UNTIL A THO ROUGH SCRUTINY WAS DONE IN THE CASE OF HER HUSBAND, NO CO NCLUSION CAN BE DRAWN. IT WAS FURTHER SUBMITTED THAT THE A.O . HAD NOT CALLED FOR ANY OTHER INFORMATION OR EVIDENCE FROM T HE ASSESSEE NOR DID HE GATHER CONFIRMATION FROM THE PERSONS WIT H WHOM MR. V. RAJA REDDY TRANSACTED IN THE COURSE OF CARRY ING ON HIS BUSINESS ACTIVITY AND WITH BANK AUTHORITIES REGARDI NG CASH DEPOSIT ENTRIES. ASSESSEES A.R. FURNISHED COPY OF CONFIRMATION GIVEN BY ICICI BANK TO THE EFFECT THAT TRANSACTIONS IN THE JOINT S.B. ACCOUNT DURING THE PERIOD 01.04.2008 TO 31.03. 2009 BELONG TO THE ASSESSEES HUSBAND MR. V. RAJA REDDY ALONE. 6. IT WAS FURTHER SUBMITTED THAT THE ASSESSEES HUSBAND HAD USED THE BANK ACCOUNTS OF ICICI BANK AN D ANDHRA BANK FOR THE GRANITE BUSINESS AND THE CASH/C HEQUE DEPOSITS OF RS.7,33,902 INTO ICICI BANK DO NOT BELO NG TO HER ONLY AND RELATE TO HER HUSBAND. THE SUBMISSIONS ALO NG WITH THE AFFIDAVITS AND THE CERTIFICATE ISSUED BY THE IC ICI BANK INDICATING THAT THE ACCOUNT WAS OPERATED BY SRI V. RAJI REDDY, HUSBAND OF THE ASSESSEE, WERE FURTHER FORWARDED TO THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE AND S UBMIT REPORT ON THE SUBMISSIONS OF THE ASSESSEE. 7. THE ASSESSING OFFICER IN THE FURTHER REMAND REP ORT OPINED THAT THE FRESH EVIDENCE ADMITTED DURING THE COURSE OF APPELLATE PROCEEDINGS DOES NOT SATISFY THE PROVISIO NS OF RULE 46(1) OF IT RULES, 1961, IN VIEW OF THE FACT THAT S EVERAL OPPORTUNITIES WERE AFFORDED TO THE ASSESSEE BEFORE PROCEEDINGS 5 ITA.NO.1754/HYD/2013 SMT. RAMA VELIGATI, WARANGAL TO FINALISE THE SCRUTINY ASSESSMENT AND OPINED THAT THE CASE BE DECIDED BASED ON MERITS. 8. LD. CIT(A) OBSERVED THAT THE BANK ACCOUNT IS JO INT ACCOUNT IN THE NAMES OF THE ASSESSEE AND HER HUSBAN D AND THEREFORE, THE ENTIRE CREDITS INTO THE SAID BANK AC COUNT CANNOT BE TREATED AS UNEXPLAINED INCOME IN THE HANDS OF TH E ASSESSEE ALONE. THE LD. CIT(A) POINTED OUT THAT THE ASSESSEE HAD FURNISHED THE CERTIFICATE FROM BANK INDICATING THE NATURE OF ACCOUNT AND THE PERSON WHO WAS ACTUALLY OPERATING S UCH ACCOUNT AND THE INFORMATION GIVEN BY THE ASSESSEE W AS SUPPORTED BY THE AFFIDAVITS FILED BY THE ASSESSEE A ND HER HUSBAND. IT WAS POINTED OUT FURTHER THAT THE A.O. D ID NOT BRING ANY MATERIAL ON RECORD TO SHOW THAT THE FACTS REVEA LED IN THE AFFIDAVITS WHICH WERE FILED WERE INCORRECT AND THE CREDITS PERTAIN TO THE ASSESSEE AND NOT TO MR. V. RAJA REDD Y HUSBAND OF THE ASSESSEE. THE LD. CIT(A) OBSERVED THAT THE A .O. HAD FAILED TO ENQUIRE IN THIS REGARD AND HAD NOT EVEN E NQUIRED INTO THE CHEQUES WHICH WERE DEPOSITED WHICH WOULD EASILY REVEAL AS TO WHOM THE CHEQUES BELONG TO. THE LD. CIT(A) CONCL UDED THAT MR. V. RAJA REDDY IS ALSO ASSESSED IN THE SAME WARD AS THAT OF THE ASSESSEE AND HENCE, THE A.O. IS FREE TO CONDUCT FURTHER ENQUIRIES INTO THE MATTER AND TO DRAW THE CONCLUSIO NS AND THEREAFTER, INITIATE APPROPRIATE PROCEEDINGS AGAINS T THE REAL OWNERS OF THE CREDIT. 9. AGGRIEVED, THE DEPARTMENT IS IN APPEAL BEFORE U S AND HAS FILED THE FOLLOWING GROUND . 2. THE CIT(A) OUGHT TO HAVE UPHELD THE ASSESSING OFFICERS DECISION OF TREATING THE AMOUNT OF RS.7,3 3,902/- AS UNEXPLAINED INCOME OF THE ASSESSEE AS THE SOURCES F OR THE DEPOSITS COULD NOT BE EXPLAINED WITH APPROPRIATE EV IDENCES 6 ITA.NO.1754/HYD/2013 SMT. RAMA VELIGATI, WARANGAL AND THE SAID BANK A/C. WAS NOT DISCLOSED TO THE DEPARTMENT. 10. GROUNDS NO.1 AND 3 ARE GENERAL IN NATURE AND THEREFORE, IT NEED NOT BE ADJUDICATED. ON THE OTHER HAND, LD. D.R. REITERATED THE ARGUMENTS PUT-FORTH BEFORE THE LOWER AUTHORITIES AND RELIED ON THE ORDER OF THE A.O. 11. IT IS AN UNDISPUTED FACT THAT THE BANK ACCOUNT IS A JOINT ACCOUNT OF THE ASSESSEE WITH HER HUSBAND IN T HE ICICI BANK AND THE SAME HAS BEEN CONFIRMED BY THE BANK AUTHORITIES, TO THE EFFECT THAT THE TRANSACTIONS IN THE IMPUGNED JOINT BANK ACCOUNT DURING THE PERIOD 01.04.2008 TO 31.03.2009 BELONG TO THE ASSESSEES HUSBAND MR. V. RAJA REDDY ALONE AND FURTHER AFFIDAVITS HAD BEEN FURNISH ED IN THIS REGARD BY BOTH THE ASSESSEE AND MR. V. RAJA REDDY. THE BANK AUTHORITIES HAVE INDICATED THAT THE ACCOUNT WAS OPE RATED BY MR. V. RAJA REDDY HUSBAND OF THE ASSESSEE AND CASH AND CHEQUE DEPOSITS OF RS.77,33,902 RELATING TO THE GRA NITE BUSINESS HAD BEEN DEPOSITED PRESUMABLY BY HER HUSBA ND. SINCE THE ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCO UNTS, DISCLOSING THE BANK ACCOUNT TO THE DEPARTMENT DOES NOT ARISE. THE DEPARTMENT SHOULD HAVE MADE FURTHER ENQUIRIES W HICH WOULD REVEAL THE FACT THAT WHETHER THE RECEIPTS BEL ONG TO MR. V. RAJA REDDY OR NOT, ESPECIALLY WHEN MR. V. RAJA REDD Y BELONG TO THE SAME WARD AS THAT OF THE ASSESSEE. A.O. HAS NOT BROUGHT ANY INFORMATION ON RECORD TO SHOW THAT THE ENTIRE C REDITS IN THE BANK ACCOUNT BELONG TO THE ASSESSEE AND THEREFORE, IS TO BE TREATED AS UNEXPLAINED INCOME IN THE HANDS OF THE A SSESSEE UNDER SECTION 68 OF THE ACT. ASSESSEE IS DERIVING I NCOME FROM SALARY AND INTEREST FROM PARTNERSHIP FIRM CONCERNED ALONG WITH COMMISSION ON MARRIAGE BUREAU, WHICH IS NOT A SUBST ANTIAL AMOUNT. IN THE ABSENCE OF MATERIAL BROUGHT BY THE DEPARTMENT 7 ITA.NO.1754/HYD/2013 SMT. RAMA VELIGATI, WARANGAL TO PROVE THAT THE ENTIRE CREDITS IN THE S.B. ACCOUN T WERE MADE BY THE ASSESSEE AND THE FACT THAT THE JOINT ACCOUNT IS BEING OPERATED BY THE HUSBAND OF THE ASSESSEE, PERSUADES US TO AFFIRM THE VIEW OF CIT(A) THAT THE ENTIRE ADDITION MADE OF RS.77,33,902 MADE IN THE HANDS OF THE ASSESSEE CANN OT BE SUSTAINED. WE CONFIRM THE ORDER OF THE LD. CIT(A) A ND DISMISS THE REVENUE GROUND. 12. IN THE RESULT, APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.08.2014. SD/- SD/- (B.RAMAKOTAIAH) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 13 TH AUGUST, 2014 VBP/- COPY TO 1. INCOME TAX OFFICER, WARD-2, AAYAKAR BHAVAN, STAT ION ROAD, WARANGAL. 2. SMT. RAMA VELIGATI, H.NO.5-11-1159, NAYEEM NAGAR , HANAMKONDA, WARANGAL. 3. CIT(A)-VI, HYDERABAD 4. CIT-VI, HYDERABAD 5. D.R. B BENCH, ITAT, HYDERABAD.