ITO, Ward-8(1), Hyderabad, Hyderabad V. Vasepalli Subba Reddy, R.R.Dist., R.R.Dist

ITA 179/HYD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91661 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 27-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained investment; Corroborative evidences
• Section: 142(1); 147; 68; 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 179/HYD/2015 ASSESSMENT YEAR: 2005-06 INCOME TAX OFFICER, WARD 8(1), MAHABUBNAGAR. VS. VASEPALLY SUBBA REDDY, R.R. DISTRICT. PAN AGVPV1792K) (APPELLANT) (RESPONDENT) REVENUE BY : SHRI RAMAKRISHNA BANDI ASSESSEE BY : SHRI A.V. RAGHURAM DATE OF HEARING 19-05-2015 DATE OF PRONOUNCEMENT 27-05-2015 O R D E R PER SAKTIJIT DEY, J.M.: THIS APPEAL OF THE DEPARTMENT IS DIRECTED AGAINST ORDER DATED 15/12/14 OF LD. CIT(A) - 2, HYDERABAD FOR THE AY 20 05-06. 2. THE DEPARTMENT IS AGGRIEVED WITH THE DECISION OF LD. CIT(A) IN DELETING THE ADDITION OF RS. 17,15,169 MADE BY AO. 3. BRIEFLY THE FACTS RELATING TO THE ISSUE IN DISPU TE ARE, ASSESSEE AN INDIVIDUAL IS HAVING A SMALL DAIRY BUSINESS WITH FIVE ANIMALS. ON THE BASIS OF INFORMATION RECEIVED ON ACCOUNT OF AIR DATA, AO FOUND THAT ASSESSEE HAS MADE CASH DEPOSITS TO THE TUNE OF RS. 17,15,169 IN SB A/C HELD BY HIM IN CORPORATION BANK, JUBILEE HIL LS BRANCH, HYDERABAD DURING FY 2004-05 RELEVANT TO AY UNDER DI SPUTE. AS ASSESSEE HAD NOT FILED ANY RETURN OF INCOME, AO REO PENED THE ASSESSMENT U/S 147 OF THE ACT AND ISSUED NOTICE U/S 148 OF THE ACT. 2 ITA NO. 179 /HYD/2015 VASEPALLI SUBBA REDDY SUBSEQUENTLY, A NOTICE U/S 142(1) WAS ALSO ISSUED T O ASSESSEE CALLING UPON HIM TO FILE RETURN OF INCOME FOR THE AY UNDER CONSIDERATION. DURING THE ASSESSMENT PROCEEDING, WHEN AO CALLED UP ON ASSESSEE TO EXPLAIN THE SOURCE OF CASH DEPOSITS MADE INTO BANK ACCOUNT, ASSESSEE SUBMITTED AN AFFIDAVIT STATING THEREIN THA T THE SAID AMOUNT WAS TAKEN FROM ONE SRI S.N. MURTHY, A MANPOWER CONS ULTANT FOR THE PURPOSE OF OBTAINING VISA FOR HIS SON SRI V. RAMIRE DDY, WHO WANTED TO PURSUE HIGHER EDUCATION IN USA. HE FURTHER STATED T HAT SRI S.N. MURTHY HAD DEPOSITED THE AMOUNT IN HIS BANK ACCOUNT AND HAS IMMEDIATELY WITHDRAWN THE SAME AFTER VISA FORMALITI ES. WHEN AO CALLED UPON ASSESSEE TO PROVE THE AFORESAID FACT, A S IT APPEARS, ASSESSEE STATED THAT SRI S.N. MURTHY HAS VACATED HI S BUSINESS PREMISES AND NOT AVAILABLE. WHEN AO DEPUTED AN INSP ECTOR TO FIND WHEREABOUTS OF SRI S.N. MURTHY, INSPECTOR REPORTED THAT NO SUCH PERSON WAS RESIDING IN THE GIVEN ADDRESS. THEREFORE , DISBELIEVING THE EXPLANATION OF ASSESSEE, AO TREATED THE ENTIRE CASH DEPOSITS MADE INTO THE BANK ACCOUNT AS UNEXPLAINED INVESTMENT U/S 69 AND ADDED IT TO THE INCOME OF ASSESSEE. BEING AGGRIEVED OF SUCH ADDITION, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A). 4. BEFORE LD. CIT(A) ALSO, ASSESSEE REITERATED WHAT WAS STATED BEFORE AO AND ALSO SUBMITTED A FRESH AFFIDAVIT REIT ERATING THE SAME FACTS. IT WAS SUBMITTED BY ASSESSEE THAT IT WAS SRI S.N. MURTHY WHO HAD DEPOSITED THE ENTIRE AMOUNT OF RS. 17,15,169 IN CASH AND IMMEDIATELY WITHDREW THE ENTIRE AMOUNT, ALSO IN CAS H, ON THE VERY SAME DAY ONCE THE FORMALITIES FOR VISA WERE COMPLET ED. IT WAS SUBMITTED THAT APPELLANT BEING AN ILLITERATE PERSON EKING OUT LIVELIHOOD BY SELLING MILK IN GOPANPALLY AREA DOES NOT HAVE TH E INCOME OR CAPACITY TO DEPOSIT SUCH HUGE AMOUNT. LD. CIT(A) AF TER CONSIDERING THE SUBMISSIONS OF ASSESSEE IN THE CONTEXT OF FACTS AND MATERIALS ON RECORD, DELETED THE ADDITION OBSERVING AS UNDER: 6. THE SUBMISSIONS OF THE APPELLANT, THE ORDER OF THE AO AND THE FACTS AND ISSUES WERE CAREFULLY CONSIDERED. AN AFFIDAVIT WAS 3 ITA NO. 179 /HYD/2015 VASEPALLI SUBBA REDDY FILED BY THE APPELLANT BEFORE THE AO DATED 18/12/20 09 AND THE SAME WAS REITERATED BY SIMILAR AFFIDAVIT IN APPEAL. KEEPING IN VIEW THE GAMUT OF FACTS, ISSUES AND CIRCUMSTANCES O F THE CASE, THE CONTENTIONS OF THE APPELLANT HOLD WATER AND THE APPEAL IS ALLOWED. 5. LD. DR SUBMITTED BEFORE US, ONLY ON THE BASIS OF THE AFFIDAVIT FILED BY ASSESSEE, LD. CIT(A) HAS DELETED THE ADDIT ION WITHOUT CONSIDERING THE FACT THAT ASSESSEE HAS FAILED TO PR OPERLY EXPLAIN THE SOURCE OF CASH DEPOSITS MADE INTO THE BANK ACCOUNT WITH SUPPORTING EVIDENCE. LD. DR FURTHER SUBMITTED, THOUGH, AO HAS MADE ADDITION U/S 69 OF THE ACT, BUT, INGREDIENTS OF SECTION 68 S UCH AS, IDENTITY OF THE CREDITOR, GENUINENESS OF THE TRANSACTION AND CR EDITWORTHINESS OF THE CREDITOR ARE ALSO REQUIRED TO BE ESTABLISHED IN A TRANSACTION OF THIS NATURE. SINCE THE BURDEN IS ON ASSESSEE TO DISCHARG E THE ONUS, WHICH THE ASSESSEE HAS FAILED TO DISCHARGE ADDITION MAD E BY AO HAS TO BE RESTORED. 6. LD. AR STRONGLY SUPPORTING THE ORDER OF LD. CIT( A) SUBMITTED BEFORE US, ASSESSEES SON AN ENGINEERING GRADUATE, WANTED TO PROSECUTE HIGHER STUDIES IN USA. IT WAS SUBMITTED, FOR OBTAINING EDUCATION VISA, BANK BALANCE IS REQUIRED TO BE DECL ARED BEFORE IMMIGRATION AUTHORITIES. THEREFORE, ON THE ADVICE OF MANPOWER CONSULTANT SRI S.N. MURTHY. A SAVINGS BANK ACCOUNT WAS OPENED IN THE NAME OF ASSESSEE IN CORPORATION BANK AND AN AMO UNT OF RS. 17,15,169 WAS DEPOSITED IN CASH BY SRI S.N. MURTHY HIMSELF AND ONCE VISA FORMALITIES WERE COMPLETED, SRI S.N. MURTHY WI THDREW THE AMOUNT THROUGH SELF CHEQUES OBTAINED FROM ASSESSEE AND TOO KAWAY HIS MONEY. THUS, THE DEPOSITS MADE CANNOT BE TREATED AS UNEXPLAINED INVESTMENT OF ASSESSEE. LD. AR REFERRING TO THE BAN K STATEMENT, COPY OF WHICH HAS BEEN SUBMITTED IN THE PAPER BOOK, SUBM ITTED, APART FROM THE CASH DEPOSITS MADE ON 21/06/14 AMOUNTING TO RS. 17,15,169 THERE IS NO OTHER MAJOR DEPOSIT IN THE SAID BANK AC COUNT. HE ALSO REFERRED TO THE IMMIGRATION CERTIFICATE AND VISA GR ANTED TO ASSESSEES SON TO EMPHASIZE THE FACT THAT DEPOSITS WERE MADE B Y SRI S.N. MURTHY 4 ITA NO. 179 /HYD/2015 VASEPALLI SUBBA REDDY FOR THE PURPOSE OF OBTAINING EDUCATIONAL VISA FOR A SSESSEE SON. LD. AR SUBMITTED, ONLY BECAUSE ASSESSEE WAS NOT ABLE TO OBTAIN ANY CONFIRMATION FROM SRI S.N. MURTHY OR SRI S.N. MURTH Y WAS NOT FOUND IN THE ADDRESS FOR WHATEVER MAY BE THE REASON, IT WILL NOT LEAD TO BELIEVE THAT THE CASH DEPOSITS WERE NOT MADE BY SRI S.N. MU RTHY, BUT, BY ASSESSEE. LD. AR SUBMITTED, THE STATEMENTS MADE BY ASSESSEE IN AFFIDAVIT ARE PRESUMED TO BE CORRECT UNLESS EVIDENC E TO THE CONTRARY IS BROUGHT ON RECORD. THUS, HE SUBMITTED, FINDING OF LD. CIT(A) DESERVES TO BE UPHELD. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS OTHER MATERIAL ON RECORD. UNDISPUTEDLY, THERE ARE CASH DEPOSITS OF RS. 17,15, 169 IN THE SB A/C OF ASSESSEE. HOWEVER, ASSESSEE HAS SUBMITTED AN AFF IDAVIT NOT ONLY BEFORE AO BUT ALSO BEFORE LD. CIT(A) EXPLAINING THE SOURCE OF SUCH DEPOSIT BY STATING THAT CASH DEPOSITS WERE MADE ACT UALLY BY SRI. S.N. MURTHY, WHO IS A MANPOWER CONSULTANT FOR OBTAINING EDUCATION VISA FOR ASSESSEES SON, WHO WANTED TO PURSUE HIGHER STUDIES IN USA. IN FACT AO HAS ALSO ACKNOWLEDGED THIS FACT IN THE ASSESSMEN T ORDER. HOWEVER, HE HAS DISBELIEVED THE STATEMENT OF ASSESS EE FOR THE REASON THAT SRI S.N. MURTHY WAS NOT FOUND IN THE GI VEN ADDRESS OR HIS WHEREABOUTS COULD NOT BE ASCERTAINED TO VERIFY THE CORRECTNESS OF ASSESSEES STATEMENT. HOWEVER, ON PERUSAL OF THE BA NK STATEMENT COPY, IT APPEARS THAT THE ENTIRE AMOUNT OF RS. 17,1 5,169 WAS DEPOSITED ON 21/06/14 AND THE ENTIRE AMOUNT WAS ALS O WITHDRAWN ON THE VERY SAME DAY THROUGH SELF CHEQUES. APART FROM THESE DEPOSITS, THERE ARE NO OTHER DEPOSITS IN THE BANK ACCOUNT. IN FACT THE BANK ACCOUNT COPY REVEALS THAT VIRTUALLY THERE IS NO OTH ER SUBSTANTIAL TRANSACTION IN THE BANK ACCOUNT APART FROM THE DEPO SITS MADE ON 21/06/14. IT IS ALSO EVIDENT THAT ASSESSEES SON WA S GRANTED VISA ON 17/12/04 FOR PURSUING HIGHER STUDIES IN USA. THOUGH , IT MAY BE A FACT THAT ASSESSEES STATEMENT COULD NOT BE CROSS VERIFI ED BY EXAMINING SRI S.N. MURTHY AS HIS WHEREABOUTS COULD NOT BE FOU ND OUT, BUT, THAT 5 ITA NO. 179 /HYD/2015 VASEPALLI SUBBA REDDY ITSELF WILL NOT LEAD TO THE CONCLUSION THAT THE STA TEMENTS MADE BY ASSESSEE IN THE AFFIDAVIT ARE FALSE WHEN CIRCUMSTAN TIAL EVIDENCES AS FOUND FROM THE BANK ACCOUNT COPY AND VISA GRANTED TO CERTAIN EXTENT PROVE THE FACT THAT THE STATEMENTS MADE IN THE AFFI DAVIT BY ASSESSEE CANNOT BE REJECTED OUTRIGHT AND ARE BELIEVABLE. IT FURTHER NEEDS TO BE MENTIONED THAT AO HAS NOT FOUND OUT ANY OTHER OSTEN SIBLE SOURCE OF INCOME, APART FROM SOURCE OF INCOME DISCLOSED BY AS SESSEE, WHICH COULD INDICATE EARNING OF SUCH HUGE INCOME BY ASSES SEE. IN THE AFORESAID FACTS AND CIRCUMSTANCES, WE ARE OF THE VI EW THAT CONCLUSION DRAWN BY LD. CIT(A) IN THE PECULIAR FACTS AND CIRCU MSTANCES OF THE CASE DESERVES TO BE UPHELD. 8. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMI SSED. PRONOUNCED IN THE OPEN COURT ON 27 TH MAY, 2015. SD/- SD/- (P.M. JAGTAP) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 27 TH MAY, 2015 KV COPY TO:- 1) ITO, WARD 8(1), 8 TH FLOOR, D-BLOCK, IT TOWERS, AC GUARDS, HYDERABAD 2) VASEPALLI SUBBA REDDY, 1-100/29/2/1, GOPANPALLE VILLAGE, SERILINGAMPALLY MANDAL, RR DISTRICT. 3 CIT(A)-2, HYDERABAD 4) CIT-2, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.