Ravikanti Manohar, Hyderabad V. ITO, Ward-1, Karimnagar, Karimnagar

ITA 1862/HYD/2014

• Counselvise Citation: 186222514 RSA 2014
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-04-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 05-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained cash credit; Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.1862/HYD/2014 ASSESSMENT YEAR 2005-2006 MR. RAVIKANTI MANOHAR, MANTHANI, KARIMNAGAR DISTRICT. PAN AAYPR0517P VS. THE INCOME TAX OFFICER, WARD-1, KARIMNAGAR. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. S. RAMA RAO FOR REVENUE : MR. RAJAT MITRA DATE OF HEARING : 01.04.2015 DATE OF PRONOUNCEMENT : 08 .04.2015 ORDER PER SAKTIJIT DEY, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. CIT(A)-III, HYDERABAD DATED 15.10. 2014 FOR THE A.Y. 2005-2006. THE SOLITARY ISSUE ARISING FOR CONS IDERATION IS WITH REFERENCE TO AN ADDITION OF RS.12,59,000 MADE BY THE A.O. AND CONFIRMED BY LD. CIT(A). 2. BRIEFLY THE FACTS ARE THE ASSESSEE AN INDIVID UAL IS ENGAGED IN CLOTH BUSINESS. FOR THE A.Y. UNDER CONSI DERATION ASSESSEE FILED HIS RETURN OF INCOME ON 12.09.2005 D ECLARING TOTAL INCOME OF RS.1,47,390. DURING THE COURSE OF A SSESSMENT PROCEEDINGS THE A.O. ON THE BASIS OF INFORMATION AV AILABLE ON RECORD FOUND THAT THE ASSESSEE HAD MADE CASH DEPOSI TS TO THE TUNE OF RS.13,72,640 IN THE SAVINGS BANK ACCOUNT MA INTAINED BY HIM IN STATE BANK OF HYDERABAD, MANTHANI DURING THE 2 ITA.NO.1862/HYD/2014 MR. RAVIKANTI MANOHAR, MANTHANI, KARIMNAGAR DIST., RELEVANT PREVIOUS YEAR. WHEN THE A.O. CALLED UPON T HE ASSESSEE TO EXPLAIN SOURCE OF SUCH CASH DEPOSITS, IT WAS EXP LAINED BY THE ASSESSEE, ALMOST ALL THE DEPOSITS MADE IN THE B ANK ACCOUNT ARE OUT OF REGULAR BUSINESS TRANSACTIONS AND HAS BE EN ROUTED THROUGH THE BOOKS OF ACCOUNT. THE A.O. ON EXAMINING ASSESSEES EXPLANATION WITH REGARD TO EACH OF THE C ASH DEPOSITS MADE OBSERVED THAT ASSESSEE DID NOT HAVE SUFFICIE NT CASH BALANCE IN THE BOOKS TO MAKE THE CASH DEPOSITS. THE A.O. ALSO OBSERVED, ASSESSEES EXPLANATION WITH REGARD TO SO ME OF THE CASH DEPOSITS HAVING BEEN MADE OUT OF UNSECURED LOA NS IS NOT ACCEPTABLE AS IT IS NOT BELIEVABLE THAT THE ASSESSE E WOULD BORROW MONEY TO MAKE DEPOSITS IN THE BANK. ACCORDIN GLY, THE A.O. TREATED CASH DEPOSITS TO THE TUNE OF RS.12,59, 000 AS UNEXPLAINED CREDIT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE WHILE COMPLETING THE ASSESSMENT. 3. BEING AGGRIEVED OF SUCH ADDITION, ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT (A) HOWEVER, CONFIRMED THE ADDITION MADE BY THE A.O. BY MERELY O BSERVING THAT THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS TO PROVE THE CREDIT MADE INTO THE BANK ACCOUNT. 4. LEARNED A.R. MORE OR LESS REITERATED THE SUBMISS IONS MADE BEFORE THE DEPARTMENTAL AUTHORITIES AND SUBMIT TED THAT NEITHER THE A.O. NOR THE CIT(A) HAVE PROPERLY APPRE CIATED THE FACTS AND MATERIALS BROUGHT ON RECORD. IT WAS SUBMI TTED, THOUGH THERE IS SUFFICIENT CASH BALANCE IN THE CASH BOOK TO EXPLAIN EACH OF THE DEPOSITS MADE INTO THE BANK ACC OUNT, THE A.O. WITHOUT ANALYSING THE AVAILABILITY OF CASH IN CASH BOOK HAS MADE THE ADDITIONS ON PRESUMPTIONS AND SURMISES . HE FURTHER SUBMITTED, THE A.O. HAS ALSO DISBELIEVED TH E UNSECURED 3 ITA.NO.1862/HYD/2014 MR. RAVIKANTI MANOHAR, MANTHANI, KARIMNAGAR DIST., LOANS TAKEN BY THE ASSESSEE WITHOUT MAKING ANY ENQU IRY OR EXAMINING THE FACT AS TO WHETHER THEY ARE GENUINE O R NOT. THUS, IT WAS SUBMITTED BY A.R. AS THE DEPARTMENTAL AUTHORITIES WITHOUT PROPERLY EXAMINING THE FACTS AND EVIDENCES BROUGHT ON RECORD HAVE MADE THE ADDITION THE SAME HAS TO BE DE LETED. 4. LEARNED D.R. ON THE OTHER HAND, RELIED UPON THE REASONING OF A.O. AND LD. CIT(A). 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES A S WELL AS RELEVANT MATERIALS ON RECORD. THERE IS NO DISPUTE T O THE FACT THAT ASSESSEE HAS MADE CASH DEPOSITS INTO THE SAVIN GS BANK ACCOUNT DURING THE RELEVANT FINANCIAL YEAR. IT IS A LSO EVIDENT, ASSESSEE HAS EXPLAINED THE SOURCE OF CASH DEPOSITS BY PRODUCING THE CASH BOOK BEFORE THE A.O. AS WELL AS THE LD. CIT(A). IT IS THE SPECIFIC CONTENTION OF THE A.R. B EFORE US THAT SUFFICIENT BALANCE IS AVAILABLE IN THE CASH BOOK TO EXPLAIN EACH OF THE DEPOSITS MADE INTO THE BANK ACCOUNT. ON PERU SAL OF THE WRITTEN SUBMISSIONS FILED BEFORE THE LD. CIT(A), A COPY OF WHICH IS AT PAGE NO.1 OF ASSESSEES PAPER BOOK, IT IS EVI DENT THAT ASSESSEE HAS EXPLAINED THE SOURCE OF CASH DEPOSITS MADE ON EACH DAY IN THE SAVINGS BANK ACCOUNT. AS IT APPEARS FROM THE SAID WRITTEN SUBMISSIONS, THERE ARE CASH AVAILABLE IN THE CASH BOOK TO MAKE SUCH DEPOSITS. FURTHER, THE SOURCE OF CASH DEPOSITS MADE ON CERTAIN DATES WAS CLAIMED TO BE OU T OF UNSECURED LOANS OBTAINED BY THE ASSESSEE. AS IT APP EARS THE A.O. WITHOUT MAKING ANY ENQUIRY OR EXAMINING THE GENUINENESS OF ASSESSEES CLAIM HAS ON PRESUMPTION AND SURMISES REJECTED UNSECURED LOANS. IN OUR VIEW, WHE N THE ASSESSEE HAS OFFERED EXPLANATION TO EXPLAIN THE SOU RCE OF CASH 4 ITA.NO.1862/HYD/2014 MR. RAVIKANTI MANOHAR, MANTHANI, KARIMNAGAR DIST., DEPOSITS MADE INTO THE SAVINGS BANK ACCOUNT, AND WH ICH ACCORDING TO ASSESSEE IS ALSO FULLY SUPPORTED BY C ASH BOOK; THE EXPLANATION OF ASSESSEE IS REQUIRED TO BE EXAMINED PROPERLY. UNFORTUNATELY, NEITHER THE A.O. NOR THE LD. CIT(A) HAS APPROACHED THE ISSUE WITH THE ATTENTION IT DESERVED . WE ARE SORRY TO SAY, THOUGH, ASSESSEE HAS MADE A DETAILED SUBMISSION BEFORE LD. CIT(A), BUT, HE HAS SIMPLY BRUSHED IT AS IDE CURSORILY BY MERELY OBSERVING THAT IT IS AFTER THOUGHT OF ASS ESSEE. CONSIDERING THE FACT THAT ASSESSEES EXPLANATION WI TH REGARD TO SOURCE OF DEPOSITS HAVE NOT BEEN PROPERLY APPRECIA TED BY ANALYSING THE ENTRIES OF CASH BOOK AND OTHER MATERI ALS ON RECORD, WE ARE INCLINED TO SET ASIDE THE IMPUGNED O RDER OF LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF THE A.O. TO EXAMINE THE ISSUE AFRESH AND DECIDE THE SAME AFTER CONSIDERING ALL THE FACTS AND MATERIALS ON RECORD A ND SPECIFICALLY THE CASH BOOK MAINTAINED BY THE ASSESS EE. NEEDLESS TO SAY ASSESSEE MUST BE GIVEN A FAIR OPPOR TUNITY TO REPRESENT HIS CASE. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08.04.2 015. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACOUNTANT MEMBER JUDICIALMEMB ER HYDERABAD, DATED 8 TH APRIL, 2015 VBP/- 5 ITA.NO.1862/HYD/2014 MR. RAVIKANTI MANOHAR, MANTHANI, KARIMNAGAR DIST., COPY TO : 1. MR. RAVIKANTI MANOHAR, PROP. SRI RAMA CLOTH STORES, GANDHI CHOWK, MANTHANI, KARIMNAGAR DISTRICT. C/O. MR. S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYA S ELEGANCE, 3-6-643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500 029. 2. THE INCOME TAX OFFICER, WARD - 1, KARIMNAGAR. 3. CIT(A) - III, HYDERABAD. 4. CIT - II, HYDERABAD 5. D.R. ITAT B BENCH, HYDERABAD. 6. GUARD FILE