Viswanadha Naidu Kasturi , Tirupati V. Asst. Commissioner of Income Tax, Central Circle-2(3), Hyderabad

ITA 1820/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5382 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 23-03-2021
• Assessment Year: 2016-2017
• Appeal Filed On: 10-09-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR PANDEY
• Keywords: Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 1820/HYD/2018 ASSESSMENT YEAR: 2016-17 SRI VISWANADHA NAIDU KASTURI, TIRUPATI [PAN: AKGPK2780D] VS ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(3), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S.RAMA RAO, AR FOR REVENUE : SHRI SUNIL KUMAR PANDEY, DR DATE OF HEARING : 23-03-2021 DATE OF PRONOUNCEMENT : 06-05-2021 O R D E R PER S.S.GODARA, J.M. : THIS ASSESSEES APPEAL FOR AY.2016-17 ARISES FROM TH E CIT(A)-12, HYDERABADS ORDER DATED 25-06-2018 PASSED IN CASE NO.10461/2017-18, IN PROCEEDINGS U/S.143(3) OF THE I NCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE GRIEVANCE RAISED I N THE INSTANT APPEAL CHALLENGES CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION ADDING ALLEGED HIS UN-DISCLOSED I NCOME OF RS.8 LAKHS IN THE COURSE OF ASSESSMENT DT.29-12-2017 AFFIRMED IN CIT(A)S ORDER VIDE FOLLOWING DETAILED D ISCUSSION: ITA NO. 1820/HYD/2018 :- 2 -: 6.0 ADDITION ON ACCOUNT OF CASH FOUND OF RS.8,00,0 00/-: 6.1 THE ADDITION WAS MADE BY THE AO ON THE FOLLOWIN G GROUNDS: 'DURING THE COURSE OF SEARCH, CASH AMOUNTING TO RS. 8,00,000/- WAS FOUND IN LOCKER NO.42 IN DHANLAKSHMI BANK RC ROAD, TIRUPATI. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF SUCH CASH FOUND. SRI K.VISHWANATH NAIDU VIDE LETTER DATED 29.12.201 STAT ED THAT THE CASH WAS OUT OF RECEIPTS COLLECTED FROM THE LOT OWNERS A HARITAVANAM PROJECT AND THUS CANNOT BE TREATED AS UNDISCLOSED I NCOME. THE CONTENTION OF THE ASSESSEE IN UNCONVINCING AND NO E VIDENCES HAVE BEEN BROUGHT FORTH BY THE ASSESSEE TO SUBSTANTIATE SUCH CLAIM. SINCE THE SOURCE OF SUCH CASH HAS NOT BEEN CLEARLY SUBSTA NTIATED, THE AMOUNT OF RS.8,00,000/- IS ADDED TO THE TOTAL INCOM E OF THE ASSESSEE. PENALTY PROCEEDINGS U/S 271AAB ARE INITIATED AS PER THE PROVISIONS OF THE ACT. (ADDITION RS.8,00,000) 6.2 THE SUBMISSIONS MADE BY THE APPELLANT'S AR ON T HIS ISSUE ARE AS UNDER: 'GROUND NO.2 IS AGAINST THE ADDITION OF RS.8 LAKHS. THE ASSESSING OFFICER ADDED RS.8,00,000/- REPRESENTING CASH FOUND ON THE DATE OF SEARCH. THE SEARCH WAS ON 14.03.2016. THE ASSESSEE SUBMITTED THAT CASH WAS COLLECTED FROM THE LOT OWNERS FOR DEVELOPM ENT OF THE PLOTS. THE ASSESSING OFFICER, WHILE DECIDING THE ASSESSMEN T OF THE COMPANY, HELD THAT SUBSTANTIAL CASH RECEIPTS WERE FOUND DURI NG THE SEARCH AND SEIZURE OPERATIONS. THE SAID AMOUNT WAS RECEIVED BY THE ASSESSEE TO MEET THE EXPENDITURE TOWARDS DEVELOPMENT. THE ASSES SING OFFICER DISBELIEVED THE EXPLANATION WITHOUT ANY REASON. IN FACT THE RECEIPTS AGAINST THE EXPENDITURE ADDED IN THE ASSESSMENT OF THE COMPANY ARE AS UNDER: ASST.YEAR AMOUNT (IN RS.) 2012-13 4,83,68,146 2013-14 6,51,24,122 2014-15 2,90,18,114 2015-16 11,79,01,710 2016-17 5,32,77,565 TOTAL ADDITION: 31,36,89,657 THE ASSESSEE IS THE MANAGING DIRECTOR OF THE COMPAN Y. THE AMOUNTS RECEIVED AFTER INCLUDING THE EXPENDITURE IS AVAILAB LE WITH THE ASSESSEE. THE ASSESSEE IN THE SAID APPEAL CONTESTED THE ADDITION ON THE GROUND THAT EXPENDITURE TO BE INCURRED IS TO BE REDUCED AND AND ONLY NET INCOME CAN BE ASSESSED. IN THE CIRCUMSTANC ES THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.8,00,000/- AS THE ASSESSEE WAS IN POSSESSION OF THE ABOVE AMOUNTS. T HE SAME MAY PLEASE BE DIRECTED TO BE DELETED.' ITA NO. 1820/HYD/2018 :- 3 -: 6.3 FROM THE ABOVE, IT IS SEEN THAT IT HAS BEEN THE CONTENTION OF THE APPELLANT DURING ASSESSMENT AS WELL AS APPELLATE PR OCEEDINGS THAT THE CASH WAS OUT OF RECEIPTS COLLECTED FROM THE PLO T OWNERS. HOWEVER, NO EVIDENCES TO SUBSTANTIATE THIS CLAIM WERE FILED DURING ASSESSMENT PROCEEDINGS. DURING APPELLATE PROCEEDINGS ALSO, THE SAME ARGUMENT HAS BEEN REPEATED, BUT NOT AN IOTA OF EVIDENCE IS F URNISHED IN SUPPORT OF THIS CONTENTION. MOREOVER, THE CASH HAS BEEN FOU ND FROM THE LOCKER OF THE APPELLANT, AND IF THE CASH WAS INDEED RECEIV ED FROM PLOT OWNERS TO MEET EXPENDITURE ON DEVELOPMENT, AS CLAIM ED BY THE APPELLANT'S AR, IT IS NOT UNDERSTANDABLE WHY IT WOU LD BE KEPT IN LOCKER. ALSO, NO CASH BOOK OR CASH-FLOW STATEMENT H AS BEEN FURNISHED. IN VIEW THEREOF, I FIND NO REASONS TO INTERFERE WIT H THE ORDER OF THE ASSESSING OFFICER ON THIS ISSUE, AND THE ADDITION M ADE IS CONFIRMED. 3. LEARNED AUTHORISED REPRESENTATIVE VEHEMENTLY CONTEND ED DURING THE COURSE OF HEARING THAT BOTH THE LOWER AUTHOR ITIES HAVE ERRED IN LAW ON FACTS IN MAKING THE IMPUGNED ADD ITION DESPITE THE FACT THAT THE SAME BELONGS TO THE COMPANY, M/S.VARSHA VISWANATH PROPERTIES PVT. LTD. AND THAT THIS COMPANY HAD RECEIVED THE IMPUGNED SUM AS LAND DEVELO PMENT ADVANCE(S) FROM VARIOUS CUSTOMERS FOLLOWED BY ITS DEC LARATION BEFORE THE DEPARTMENTAL AUTHORITIES TO THE TUNE OF RS.31 .36 CRORES (SUPRA). 4. MR.RAMA RAO, FURTHER SOUGHT TO CLARIFY THAT THE IMPUGNED SUM ALREADY STANDS ASSESSED IN THE HANDS OF THE COMPANY WHICH MAKES IT AN INSTANCE OF DOUBLE ADDITION ONLY. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL PLEADINGS AGAINST AND IN SUPPORT OF THE IMPUGNED ADDITI ON. AS RIGHTLY POINTED OUT AT THE REVENUES BEHEST AND IN VIEW OF THE CIT(A)S DETAILED DISCUSSION, IT IS SUFFICIENTLY CLEAR THAT THE IMPUGNED SUM HAS BEEN RECOVERED FROM A BANK LOCKER MAINTAINED IN THE NAME OF THE ASSESSEE-INDIVIDUAL THAN THE COMPANY. HE HAS ALSO NOT GIVEN ANY DETAILS ABOUT THE P ARTIES ITA NO. 1820/HYD/2018 :- 4 -: PAYING THE IMPUGNED ADVANCES TO THE COMPANY AS WELL. FACED WITH THIS SITUATION, WE ARE OF THE OPINION THAT BOTH THE LEARNED LOWER AUTHORITIES HAVE RIGHTLY MADE THE IMPUGNED ADDITI ON IN ASSESSEES HANDS IN INDIVIDUAL CAPACITY AFTER ASSESS ING THAT THE SAME REPRESENTS HIS UN-DISCLOSED INCOME ONLY. 6. THIS ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH MAY, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 06-05-2021 TNMM ITA NO. 1820/HYD/2018 :- 5 -: COPY TO : 1.SRI VISWANADHA NAIDU KASTURI, H.NO.3/525/1, GAYATRINAGAR, TIRUPATI, CHITTOOR DIST. ANDHRA PRADE SH. 2.THE ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRC LE-2(3), HYDERABAD. 3.CIT(APPEALS)-12, HYDERABAD. 4.PR.CIT(CENTRAL)-HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.