Income Tax Officer, Ward-15(4), Hyderabad V. Malipedi Ranji Reddy, Hyderabad

ITA 1840/Hyd/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1964 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 10-11-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: N O N E
• Keywords: Unexplained cash credit; Business income; Additional evidence
• Section: 143(3)

Judgement Text

ITA NO 1840 OF 2017 MALI PEDI RANJI REDDY HYDERABAD. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.1840/HYD/2017 (ASSESSMENT YEAR: 2013-14) INCOME TAX OFFICER WARD 15(4) HYDERABAD VS SRI MALIPEDI RANJI REDDY H.NO.1-2 M, KACHIVANI SINGRAM VILLAGE, GHATKESAR MANDAL, RANGA REDDY PAN: AIGPR7001L (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI K.J. RAO, DR FOR ASSESSEE: N O N E O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS REVENUES APPEAL FOR THE A.Y 2013-14 AGAINS T THE ORDER OF THE CIT (A)-7, HYDERABAD, DATED 23.-06 .2017. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, FILED HIS RETURN OF INCOME FOR THE A.Y 2013-14 ON 8.8.2014 ADMITTING AN INCOME OF RS.2,39,800. DURING THE SCRUTINY PROCEEDINGS U/S 143(3) OF THE ACT, THE AO EXAMINED THE INFORMATION AND THE STATEMENTS OF SAVINGS BANK ACCO UNTS MAINTAINED AND FURNISHED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. THEREAFTER, HE PROCEEDED TO MAKE AN ADDITION OF RS.1,04,54,129 U/S 69A OF THE ACT FOR FAILING TO FU RNISH DATE OF HEARING: 06.08.2018 DATE OF PRONOUNCEMENT: 07 . 0 9 .2018 ITA NO 1840 OF 2017 MALI PEDI RANJI REDDY HYDERABAD. PAGE 2 OF 4 SATISFACTORY EXPLANATION REGARDING THE NATURE AND S OURCES FOR THE DEPOSITS MADE INTO THE SAVINGS BANK ACCOUNTS OF HDF C BANK & CANARA BANK. HE ALSO MADE AN ADDITION OF RS.39,374/ - AS INCOME FROM OTHER SOURCES AND DISALLOWED THE CLAIM OF DEDU CTION UNDER CHAPTER VIA OF THE I.T. ACT TO THE TUNE OF RS.46,09 0/-. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT (A), WHO PARTLY ALLOWED THE SAME BY DIRECTING T HE AO TO TREAT 8% OF THE ABOVE BANK DEPOSITS AS INCOME. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE HAD PRODUCED CONFIRMATION LETTERS FROM LOAN CREDITORS IN RESPECT OF UNSECURED LOANS AND TH E CIT (A) CALLED FOR A REMAND REPORT FROM THE AO WHICH WAS FURNISHED . AFTER CONSIDERING THE REMAND REPORT AND ALSO THE ASSESSEE S CONTENTIONS, THE CIT (A) HELD THAT THE UNSECURED LO ANS TO THE EXTENT OF RS.43,85,250 ONLY ARE PROVED. HE ACCORDIN GLY DELETED THE ADDITION. AS REGARDS THE BALANCE ADDITION OF RS.60, 68,879 ON ACCOUNT OF DEPOSITS IN THE BANK A/C, HE OBSERVED TH AT THE TOTAL DEPOSITS ASSESSED BY THE AO INCLUDE BOTH THE CASH A ND CHEQUE DEPOSITS AND OBSERVING THAT THE ASSESSEE HAD ADMITT ED THE INCOME ON ACCOUNT OF THE TRANSACTIONS IN THESE BANK ACCOUN TS ONLY, HE DIRECTED THE ESTIMATION OF INCOME ON THESE DEPOSITS @ 8%. AGAINST THESE DIRECTIONS OF THE CIT (A), THE REVENUE IS IN APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE CIT (A) ERRED BOTH ON FACTS AND IN LAW OF T HE CASE. 2. THE LEARNED CIT (A) ERRED IN NOT APPRECIATING TH E FACTS AND CIRCUMSTANCES OF THE CASE. WITHOUT CONSIDERING THE FINDINGS OF THE AO HAS ALLOWED THE APPEAL OF THE AS SESSEE. 3. THE LEARNED CIT (A) ERRED IN ALLOWING THE ASSESS EES CLAIM ALTHOUGH THE ASSESSEE DID NOT SUBSTANTIATE HI S REAL ESTATE BUSINESS BEFORE THE AO AND AS WELL AS BEFORE THE CIT (A) WHILE FURNISHING ADDITIONAL EVIDENCE. ITA NO 1840 OF 2017 MALI PEDI RANJI REDDY HYDERABAD. PAGE 3 OF 4 4. THE CIT (A) ERRED IN DIRECTING THE AO TO ESTIMAT E THE INCOME @ 8% ON CREDITS IN THE BANK A/C OF RS.60.68 LAKHS, WITHOUT FINDING ANY FAULT BY THE AO ON TREATING THE SAME AS UNEXPLAINED CASH CREDITS. 4. THOUGH THE NOTICE OF HEARING HAS BEEN SERVED ON THE ASSESSEE, THROUGH THE LEARNED DR, NONE APPEARED FOR THE ASSESSEE. THEREFORE, THE APPEAL IS HEARD AND DECIDE D EX-PARTE THE ASSESSEE. THE LEARNED DR SUBMITTED THAT THE CIT (A) OUGHT NOT TO HAVE DIRECTED ESTIMATION OF INCOME @ 8% ON THE DEPO SITS INTO BANK ACCOUNTS WHICH HAVE NOT BEEN PROVED BY THE ASS ESSEE, INSTEAD, THE ENTIRE DEPOSITS OUGHT TO HAVE BEEN BRO UGHT TO TAX. WE FIND THAT THE ASSESSEE HAS FILED CONFIRMATION ONLY TO THE EXTENT OF RS.43,85,250 AND THE BALANCE INCLUDES BOTH THE CASH AND CHEQUE DEPOSITS. AS FAR AS CHEQUE DEPOSITS ARE CONCERNED, WE FIND THAT THE IDENTITY OF THE PERSON IS PROVED BUT THEIR CRED ITWORTHINESS AND THE GENUINENESS OF THE TRANSACTION IS TO BE PROVED AND IN SUCH CIRCUMSTANCES, THE CIT (A) OUGHT NOT TO HAVE DIRECT ED THE AO ONLY TO TREAT ONLY 8% OF THE SAID DEPOSITS AS INCOME. TH E ESTIMATION @ 8% WOULD BE VALID ONLY IF IT IS FOUND THAT THESE DE POSITS ARE HIS TRADE RECEIPTS. BUT THERE IS NO SUCH FINDING BEFORE US. IN VIEW OF THE SAME, WE DEEM IT FIT AND PROPER TO REMAND THE I SSUE TO THE FILE OF THE AO WITH A DIRECTION TO CONSIDER WHETHER THE ASSESSEE WAS CARRYING ON THE BUSINESS OF REAL ESTATE AND CONSTRU CTION AS CONTENDED BY HIM AND ONLY IF HE IS FOUND TO BE IN S UCH BUSINESS, AND THE DEPOSITS INTO THE BANK A/C ARE HIS BUSINESS RECEIPTS, 8% OF SUCH RECEIPTS CAN BE CONSIDERED AS INCOME OF THE ASSESSEE. OTHERWISE, ALL THE DEPOSITS WILL HAVE TO BE TREATED AS ASSESSEES INCOME. WITH THIS DIRECTION, THE REVENUES APPEAL I S TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO 1840 OF 2017 MALI PEDI RANJI REDDY HYDERABAD. PAGE 4 OF 4 5. IN THE RESULT, REVENUES APPEAL IS TREATED AS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH SEPTEMBER, 2018. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 7 TH SEPTEMBER, 2018. VINODAN/SPS COPY TO: 1 INCOME TAX OFFICER, WARD 15(4) ROOM NO.547, D-BLO CK, 5 TH FLOOR, IT TOWERS , AC GUARDS, HYDERABAD 500004 2 SHRI MALIPEDI RANJI REDDY, H.NO.1-2M, KACHIVANI S INGRAM VILLAGE, GHATKESAR MANDAL, RR DISTT. 3 CIT (A)-7, HYDERABAD 4 PR. CIT 7 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER