Y Naveen Srinivasa , Hyderabad V. Asst. Commissioner of Income Tax, Circle-14(1), Hyderabad

ITA 1953/Hyd/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5823 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 06-08-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 25-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T. MADAN
• Keywords: Opportunity of being heard; Additional evidence
• Section: 143(3); 201; 20

Judgement Text

IN T HE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO S . 1 953 /HYD/201 8 AND 666/HYD/19 AND SA NOS. 175 & 176/HYD/2019 ASSESSMENT YEAR S : 20 15 - 16 & 2016 - 17 Y. NAVEEN SRINIVASA, HYDERABAD. PAN A BCPY 0555F VS. ASST. COMMISSIONER OF INCOME - TAX, CIRCLE 14(1), HYDERABAD. ( APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI A.V. RAGHURAM REVENUE BY : S HRI T. MADAN DATE OF HEARING : 2 5 / 0 7 /201 9 DATE OF PRONOUNCEMENT : 09 / 0 8 / 201 9 O R D E R PER S . RIFAUR RAHMAN , A .M. : BOTH THESE APPEAL S FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER S OF CIT(A) 6 , HYDERABAD , F OR AY S 2015 - 16 AND 2016 - 17. 2. BRIEF FACTS OF THE CASE AS TAKEN FROM AY 2015 - 16, THE ASSESSEE, BEING AN INDIVIDUAL, DERIVING INCOME UNDER VARIOUS HEADS I.E., HOUSE PROPERTY, OTHER SOURCES AND SALARY FROM M / S. SATHYAVATHI BIO - LIFE SCIENCES LTD., THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE IM PUGNED AY 2015 - 16 ON 24.08.2015, ADMITTING A TOTAL INCOME OF RS.2,44,99,900 / - . THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND THE SCRUTINY ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT, VIDE ORDER DATED 20.12.2017, DETERMINING THE TOTAL TAXABLE INCOME OF THE ASSESSEE AT RS. 2,82,77,700/ - . WHILE DOING SO, THE AO MADE AN ADDITION OF RS. 38,27,800 / - , BEING CASH DEPOSITS FOUND IN THE BANK ACCOUNTS OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS FAILED 2 ITA NO S . 1953 & 666 /HYD/1 8 Y. NAVEEN SRINIVASA, HYD. . TO EXPLAIN THE GENUINE SOURCE OF SUCH CASH DEPOSIT S. THE RELEVANT PORTION OF THE ASSESSMENT ORDER IN THIS REGARD IS REPRODUCED BELOW : 'THE SUBMISSIONS OF THE ASSESSEE THAT THE CASH DEPOSITS ARE MADE OUT OF THE CASH BALANCE AVAILABLE ARE NOT ACCEPTABLE IN VIEW OF THE FOLLOWING FACTS: (I) THE LAST WT R E T URN F ILED BY THE ASSESSEE IS FOR THE A.Y 20I1 - 1 2 I.E. FOR THE YEAR ENDING 31.03.2011. THE FACT THAT THE SAME CASH IS AVAILABLE WITH THE ASSESSEE TILL THE PREVIOUS YEAR RELEVANT TO THE A.Y.2015 - 16 FOR DEPOSITING THE SAME IN BANK IS HIGHLY PREPOSTEROUS. FURT HER, NO EVIDENCE HAS BEEN PRODUCED BY THE ASSESSEE TO PROVE THAT THE SAME CASH WAS AVAILABLE WITH HIM. (II) IT IS SEEN THAT THE ASSESSEE HAS WITHDRAWN HUGE CASH FROM THE BANK I.E. AT MS WHEN THERE WAS SUFFICIENT CASH BALANCE AVAILABLE WITH HIM WHICH IS HIGHLY CONTRADICTORY. (III) THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TO PROVE THE DIRE NECESSITY/EXIGEN CY WHICH FORCED HIM TO WITHDRAW CASH FROM THE BANK WHEN HE HAS SUFFICIENT CASH AVAILABLE WITH HIM. (IV) THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TO PROVE THAT THE CASH WAS WITHDRAWN FROM ATMS WHICH ARE REMOTE / OR WHEN HE WAS OUT OF STATION WHICH PERFO RCED HIM TO WITHDRAW CASH. (V) IT CAN BE SEEN FROM THE COPY OF THE HDFC BANK ACCOUNT STATEMENT FOR THE F.Y 2011 - 12 (COPY ENCLOSED VIDE ANNEXURE - I) TO THIS ORDER WHEREIN ON ACCOUNT OF ADDITION ON THE SAME ISSUE RELIEF WAS GRANTED THAT THE CASH DEPOSITED H AVE BEEN TRANSFERRED TO OTHER ACCOUNTS. THEREFORE , THE CLAIM OF THE ASSESSEE THAT THE CASH BALANCE AVAILABLE WITH HIM AS PER WEALTH TAX RETURN IS FALSE AS THE THIS CASH BALANCE ALREADY STANDS UTILISED/EXHAUSTED AS THIS HAS BEEN TRANSFERRED TO OTHER ACCOUNT S. (VI) THERE IS NO IMMEDIATE NEXUS OF THE CASH WITHDRAWAL AND THE DEPOSITS. IN VIEW OF THE ABOVE, THE CASH DEPOSITS OF RS.38,27,800/ IS TREATED AS UNEXPLAINED CASH DEPOSITS AND ADDED TO THE RETURNED INCOME.' 3. AGGRIEVED BY THE ORDER OF AO, THE ASSE SSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND CONTENDED THAT THE AO COMMITTED A MISTAKE IN NOT CONSIDERING THE CASH WITHDRAWALS MADE FROM THE BANK ACCOUNT AS 3 ITA NO S . 1953 & 666 /HYD/1 8 Y. NAVEEN SRINIVASA, HYD. . SOURCE OF CASH DEPOSITS. ALSO, IT IS CONTENDED BY THE ASSESSEE THAT THE ASSESSEE PRODUCED THE RE LEVANT EVIDENCE BEFORE THE AO IN THE FORM OF BANK STATEMENTS AND CASH FLOW STATEMENTS, BUT THE AO IGNORED THE SAME . THE RELEVANT PORTION OF THE WRITTEN SUBMISSIONS MADE BY THE ASSESSEE ON 19.03.2018 WAS EXTRACTED BY THE CIT(A) AT PAGES 5 & 6 OF HIS ORDER. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A) DISCUSSED THE ISSUE AT LENGTH WITH VARIOUS CASE LAW AND HELD THAT I DONT FIND FAULT WITH THE ACTION OF THE AO IN COMING TO THE CONCLUSION THAT THE ASSESSEE HAS FAILED TO EXPLAIN ACCOUNTED SOURCES OF FUNDS FOR CASH DEPOSITS MADE IN THE BANK ACCOUNTS AND, THEREFORE, ASSESSING THE AMOUNT OF CASH DEPOSITS OF RS. 38,27,800/ - AS INCOME OF THE ASSESSEE. HE, THEREFORE, CONFIRMED THE ORDER OF AO. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE I S IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL, WHICH ARE COMMON IN BOTH THE APPEALS UNDER CONSIDERATION, EXCEPT THE QUANTUM OF ADDITION : 1. THE ORDER OF THE LEARNED CIT(A) CONFIRMING THE ADDITION OF RS.38,27,800 IS NOT ONLY ERRONEOUS BOTH ON FACTS AND IN LAW BUT IS PERVERSE. 2. THE LEARNED CIT(A) CONFIRMED THE ADDITION MADE BY THE AO MORE ON THE BASIS OF PRESUMPTIONS AND SURMISES THAN THE FACTS AND POSITION OF LAW. 3. THE LEARNED CIT(A) ERRED IN OBSERVING ABOUT HUMAN PROBABILITIES FOR CONCLUDING THAT NO PERSON WOULD HOLD CASH WITHDRAWN WHEN NOT USED WITHOUT DEPOSITING THE SAME IN BANK RATHER THAN APPRECIATING THE FACT THAT SUCH PRESUMPTI ON WOULD DEPEND ON THE STATUS OF THE PERSON. 4. THE LEARNED CIT(A) ERRED IN CONCLUDING THAT THE ASSESSEE IS NOT LEFT WITH CASH OUT OF OPENING CASH BALANCE OF F.Y.2011 - 12 ON THE PREMISE THAT ENTIRE AMOUNT IS DEPOSITED IN THE BANK WITHOUT APPRECIATING THAT IT WAS CONTINUOUS PROCESS AND THE ASSESSEE'S C LAIM IS WITH REGARD TO THE OPENING CASH BALANCE AS ON 1 - 4 - 2014 OF RS.22,24,257 AND NOT THAT OF F.Y.2011 - 12 AND THE AO NEVER DEMONSTRATED THAT THERE CANNOT BE ANY OPENING 4 ITA NO S . 1953 & 666 /HYD/1 8 Y. NAVEEN SRINIVASA, HYD. . CASH BALANCE AS ON 1 - 4 - 2014 BY EXAMINING PREVIOUS YEARS CASH FLOW AND THUS ERRED IN CO NFIRMING THE ADDITION OF RS.38,27,800 AS UNEXPLAINED CASH DEPOSIT. 5. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 6. BEFORE US, LD. AR OF THE ASSESSEE FILED A PETITION UNDER RULE 29 OF APPELLATE TRIBUNAL RULES, 1963 FOR ADMISSION OF TH E FOLLOWING DOCUMENTS AS ADDITIONAL EVIDENCE: 1. CASH BOOK OF THE ASSESSEE FOR THE PERIOD 01/04/2011 TO 31/03/2012 ALONG WITH HDFC BANK STATEMENT FOR THE RELEVANT PERIOD. 2. DETAILS STATEMENT OF CASH DEPOSITS AND WITHDRAWALS MADE BY THE ASSESSEE FOR THE P ERIOD 01/04/2012 TO 31/03/2013 ALONG WITH INDIAN OVERSEAS BANK, HDFC BANK STATEMENTS FOR THE RELEVANT PERIOD. 3. DETAILED STATEMENT OF CASH DEPOSITS AND WITHDRAWALS MADE BY THE ASSESSEE FOR THE PERIOD 01/04/2013 TO 31/03/2014 ALONG WITH HDFC BANK STATEMEN T FOR THE RELEVANT PERIOD. 6.1 LD. AR SUBMITTED THAT CIT(A) HAS GIVEN A FINDING THAT THE ASSESSEE IS NOT LEFT WITH CASH OUT OF OPENING CASH BALANCE OF F Y .2011 - 12 ON THE PREMISE THAT ENTIRE AMOUNT IS DEPOSITED IN THE BANK AND FURTHER THAT THE CIT(A) HAS GIVEN A FINDING THAT THE ASSESSEE HAS NOT FILED COPIES OF CASH BOOK MAINTAINED, IF ANY OR CASH FLOW STATEMENT, AS THE CASE MAY BE FOR THE MISSING PERIOD I.E ., FROM 01.04.2011 TO 31.03.2014 TO CLAIM THE AVAILABILITY OF CASH IN HAND OF RS.22,24,257 AS AT 01.04.2014 AND THEREFORE THERE IS NO CASH BALANCE AVAILABLE WITH THE ASSESSEE TO MAKE DEPOSITS. IT IS THEREFORE THE ASSESSEE IS FILING THE DETAILED STATEMENT O F CASH DEPOSITS AND WITHDRAWALS ALONG WITH BANK STATEMENTS OF THE ASSESSEE FOR THE PERIOD 01.04.2011 TO 31.03.2014 AS ADDITIONAL EVIDENCE BEFORE THE HON'BLE TRIBUNAL TO DEMONSTRATE THAT THE ASSESSEE WAS HAVING SUFFICIENT OPENING BALANCE FOR THE YEAR UNDER CONSIDERATION. 6.2 HE SUBMITTED THAT THERE IS NO WILFUL INTENTION NOT TO FILE THE ABOVE DETAILED STATEMENT OF CASH DEPOSITS AND WITHDRAWALS ALONG WITH 5 ITA NO S . 1953 & 666 /HYD/1 8 Y. NAVEEN SRINIVASA, HYD. . THE BANK STATEMENTS OF THE ASSESSEE FOR THE PERIOD 01/04/2011 TO 31/03/2014 BEFORE THE LOWER AUTHORITIE S. 7. THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORDERS OF REVENUE AUTHORITIES. 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE ADMIT THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE, WHICH ARE THE IMPORTANT MATERIAL TO DECID E THE ISSUE UNDER CONSIDERATION. IN FACT, THE REVENUE AUTHORITIES MADE THE ADDITION ON ACCOUNT OF CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE WHEN ASSESSEE FAILED TO EXPLAIN THE GENUINE SOURCE OF SUCH CASH DEPOSITS BY WAY OF DOCUMENTARY EVIDENCE. SIN CE THE ADDITIONAL EVIDENCE FILED FOR THE FIRST TIME BEFORE US AND THE REVENUE HAS NO OCCASION TO EXAMINE THE SAME, WE REMIT THE ISSUE BACK TO THE FILE OF THE AO WITH A DIRECTION TO EXAMINE THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. AS THE FACTS AND GROUNDS ARE MATERIALLY IDENTICAL IN AY 2016 - 17 TO THAT OF AY 2015 - 16, FOLLOWING THE DECISION THEREIN, WE REMIT THIS APPEAL ALSO TO THE FILE OF THE AO WITH SIMILAR DIRECTIONS. 10. AS THE CORRESPONDING APPEALS HAVE BEEN ADJUDICATED, THE SAS FIELD BY THE ASSESSEE BECOME INFRUCTUOUS AND THEREFORE, THE SAME ARE DISMISSED AS INFRUCTUOUS. 6 ITA NO S . 1953 & 666 /HYD/1 8 Y. NAVEEN SRINIVASA, HYD. . 1 1 . IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES AND THE SAS ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 9 TH AUGUST , 201 9 . SD/ - SD/ - ( P. MADHAVI DEVI ) (S . RIFAUR RAHMAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 9 TH AUGUST , 201 9 . KV C OPY TO: - 1) SRI Y. NAVEEN SRINIVASA, C/O S/SHRI K. VASANTKUMAR, AV RAGHURAM, P. VINOD & M. NEELIMA DEVI, ADVOCATES, 610 BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD 500 001. 2) AC IT, CIRCLE 1 4 ( 1 ) , IT TOWERS, MASABTANK, HYDERABAD 3) CIT(A) 6 HYDERABAD. 4) PR. CIT - 6 , HYD. 5 ) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6 ) GUARD FILE