ITO, Ward-9(1), Hyderabad, Hyderabad V. Sampath Kumar Deshagoni, Hyd, Hyderabad

ITA 199/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6221 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 03-10-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 22-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A SITARAMA RAO
• Assessee Lawyers: B SHANTHI KUMAR
• Keywords: Unexplained cash credit
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC) : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT ITA.NO.199/HYD/2016 ASSESSMENT YEAR 2011-2012 THE INCOME TAX OFFICER, WARD-9(1), HYDERABAD. VS. MR. SAMPATH KUMAR DESHAGONI, HYDERABAD. PAN AJXPD7967M (APPELLANT) (RESPONDENT) FOR REVENUE : MR.A. SITARAMA RAO FOR ASSESSEE : MR. B. SHANTHI KUMAR DATE OF HEARING : 03.10.2016 DATE OF PRONOUNCEMENT : 03.10.2016 ORDER PER D. MANMOHAN, V.P. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY CIT(A)-VII, HYDERABAD AND IT PERTAINS TO THE A.Y. 2011- 2012. 2. THE ASSESSEE DECLARED TOTAL INCOME OF RS.3,53,870 FOR THE YEAR UNDER CONSIDERATION. THE MATTER WAS TAKEN-UP FO R SCRUTINY AND SEVERAL NOTICES/SUMMONS WERE ISSUED BU T IT WAS REPORTED THAT THE ASSESSEE WAS NOT RESIDING IN THE ADDR ESS AVAILABLE ON RECORD AND INCOME TAX INSPECTOR REPORTE D THAT THE ASSESSEE SHIFTED FROM THE LAST KNOWN ADDRESS. THEREFOR E, THE ASSESSMENT WAS PROPOSED TO BE COMPLETED UNDER SECTION 144 OF THE ACT. DURING THE COURSE OF BEST JUDGMENT ASSESSMENT PROCEEDING, THE ASSESSING OFFICER NOTICED THAT ASSESSEE MADE CASH DEPOSITS AGGREGATING TO RS.40,67,300 IN THE SAVI NGS ACCOUNT MAINTAINED WITH AXIS BANK AND THE SOURCE THEREOF COULD NOT BE 2 ITA.NO.199/HYD/2016 MR. SAMPATH KUMAR DESOGNI, HYDERABAD. EXPLAINED. THEREFORE, THE ENTIRE AMOUNT WAS ADDED AS UNEXPLAINED INCOME BY INVOKING THE PROVISIONS OF SEC TION 68 OF THE ACT. THUS THE ASSESSMENT WAS COMPLETED ON A TOTAL IN COME OF RS.43,19,790. 3. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE CIT(A) T HAT HE WAS DEALING IN USED CARS AND IN THE NORMAL COURS E OF BUSINESS ACTIVITY ASSESSEE DEPOSITED CASH WHICH WAS TAKEN FROM THE CUSTOMERS AND AS AND WHEN CARS WERE PURCHASED THE AM OUNT WAS PAID TO THEM. THEREFORE, THE ADDITION, REFERABLE TO THE ENTIRE DEPOSIT, IS NOT SUSTAINABLE IN LAW. 4. LD. CIT(A) OBSERVED THAT THOUGH THERE WAS NO EVID ENCE WITH REGARD TO THE CASH DEPOSITS IN THE BANK ACCOUNT, GO ING BY THE FACT THAT THE MONEY WAS DEPOSITED AND WITHDRAWN, ONLY ADDITION OF RS.10,37,417 WAS ADDED AS UNEXPLAINED CR EDIT. HE FURTHER OBSERVED THAT THE TURNOVER HAS TO BE TAKEN AS RS.74,11,872 AND THE ASSESSEE HAVING DECLARED RS.43, 86,970, ON THE BALANCE TURNOVER INCOME AT 20% WAS ESTIMATED. 5. AGGRIEVED, BOTH THE ASSESSEE AS WELL AS REVENUE PREFERRED APPEALS. BUT IT APPEARS THAT THE APPEAL PREFE RRED BY THE REVENUE WAS NOT KNOWN TO THE ASSESSEE. WHEN THE APPE AL PREFERRED BY THE ASSESSEE HAD COME-UP FOR HEARING BE FORE THE TRIBUNAL EVEN THE REVENUE HAS NOT BROUGHT TO THE NOTICE OF THE BENCH THAT THERE IS A CROSS-APPEAL FILED BY THE REVENU E. THUS, THE APPEAL FILED BY THE ASSESSEE WAS TAKEN-UP FOR HEAR ING WHEREIN THE BENCH OBSERVED THAT ESTIMATION OF COMMISSION AT 15% OF THE TURNOVER IS REASONABLE AND IT HAD UPHELD THE ADDITION TO WARDS UNEXPLAINED CREDIT AT RS.10,37,417 IMPLYING THEREBY TH AT THE UNEXPLAINED CASH DEPOSIT WAS NOT SEPARATELY TAKEN INTO 3 ITA.NO.199/HYD/2016 MR. SAMPATH KUMAR DESOGNI, HYDERABAD. CONSIDERATION. HOWEVER, IN THE DEPARTMENTAL APPEAL, WHI CH IS NOW POSTED FOR HEARING, THE LD. D.R. SUBMITS THAT A SE PARATE ADDITION IS CALLED FOR, REFERABLE TO CASH DEPOSITS IN BANK ACCOUNT AND IT WAS FURTHER CONTENDED THAT THE LD. CIT(A) OUGHT NO T TO HAVE RESTRICTED THE INCOME AT 20% OF THE DEPOSITS AND THE ENTIRE AMOUNT OF RS.30,24,902 SHOULD HAVE BEEN TREATED AS UNEXPLAINED CASH CREDITS. 6. BOTH THE LEARNED COUNSEL FOR THE ASSESSEE AS WELL AS THE LD. D.R. SUBMITTED THAT ASSESSEES APPEAL (ITA.NO.96 /HYD/ 2016 DATED 15.07.2016) HAVING BEEN DISPOSED OF BY ES TIMATING THE INCOME AT 15% OF DEPOSITS, SEPARATE ADDITION OF UNE XPLAINED CASH CREDIT CANNOT BE MADE. 7. UNDER THESE CIRCUMSTANCES, I AM OF THE OPINION THAT THE APPEAL FILED BY THE REVENUE DESERVES TO BE DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 03.10.2016. SD/- (D.MANMOHAN) VICE PRESIDENT HYDERABAD, DATED 03 RD OCTOBER, 2016 VBP/- COPY TO 1. THE INCOME TAX OFFICER, WARD - 9(1), BLOCK NO.2D, I.T. TOWERS, A.C. GUARDS, HYDERABAD. 2. MR. SAMPATH KUMAR DESOGNI, D.NO.12 - 1 - 170/4, FATHULLAGUDA, NAGOLE, HYDERABAD. 3. CIT(A) - 7, HYDERABAD. 4. PR. CIT - 7, HYDERABAD. 5. DEPARTMENTAL REPRESENTATIVE ITAT, A (SMC) BENCH , HYDERABAD 6. GUARD FILE.