Giridhar Somisetty, Nellore V. Income tax Officer, Ward-12(1), Hyderabad

ITA 1996/Hyd/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7455 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 03-01-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 04-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained cash credit
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 19 96 /HYD/201 7 ASSESSMENT YEAR: 20 1 0 - 11 GIRIDHAR SOMISETTY, NELLORE PAN A MRPS5539F VS. INCOME - TAX OFFICER, W ARD 1 2 (1) , HYDERABAD ( APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI A. V. RAGHURAM REVENUE BY : S HRI NILANJAN DEY DATE OF HEARING : 0 2 / 0 1 /201 9 DATE OF PRONOUNCEMENT : 11 / 0 1 / 201 9 O R D E R PER S . RIFAUR RAHMAN , A .M. : T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 1 , HYDERABAD, DATED 16 / 0 8 /201 7 FOR AY 20 1 0 - 11 . 2 . BRIEF FACTS OF THE CASE ARE, THE ASSESSEE , AN EMPLOYEE OF AXIS BANK, NELLORE BRANCH, FILED HIS RETURN OF INCOME FOR THE AY 2010 - 11 ON 29/12/2010 ADMITTING A TOTAL INCOME AT RS. 5,07,970/ - . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS AND NOTICES WERE ISSUED U/S 143(2) AND U/S 142(1). AO COMPLETED THE ASSESSMENT U/S 143(3) ON 31/03/2013 DETERMINING TOTAL INCOME AT RS. 17,72,950/ - BY MAKING ADDITION OF RS. 12,50,000/ - TOWARDS UNEXPLAINED CASH CREDITS. 2 .1 AS PER THE AIR INFORMATION RECEI VED, THE ASSESSEE HAS MADE CASH DEPOSITS OF RS.17,50,000/ - IN INDUSIND BANK SAVINGS BANK ACCOUNT DURING THE PERIOD 01.04.200 9 TO 31.03.2010. THE ASSESSING OFFICER ASKED THE ASSESSEE TO SUBMIT THE EXPLANATION FOR CASH DEPOSITS MADE IN SAVINGS ACCOUNT. IN RE SPONSE, THE ASSESSEE 2 ITA NO. 1996 /HYD/1 7 G IRIDHAR SOMISETTY SUBMITTED THAT HE HA S MOBILISED FUNDS FROM HIS SOURCES FOR THE PURPOSE OF PURCHASE OF RESIDENTIAL HOUSE. THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER MADE THE FO LLOWING OBSERVATIONS: A) SRI SUBBARAYULU SNETTV (FATHER OF THE APPE LLANT ) DEPOSITED RS.6,50,000/ - ON 25.06.2009 & 10.11.2009. BUT FAILEDTO FURNISH ANY EVIDENCE FOR THE SOURCE OF ABOVE DEPOSIT, THEREFORE, THE SOURCE FOR THE DEPOSIT WAS NOT PROVED. B) SMT. S.T.KRISHNAVENI (WIFE OF THE APPELLANT) HAS DEPOSITED RS.5,50,000/ - ON 25.06.2009 AND 26.06.2009. AS SEEN FROM HER CAPITAL ACCOUNT, SHE HAS NOT DRAWN ANY AMOUNT FROM HER CAPITAL ACCOUNT DURING THE YEAR. FURTHER, S HE HAS DECLARED INCOME OF RS.2,00,170/ - DURING THE YEAR. THEREFORE, THE SOURCE OF DEPOSITS WAS NOT PROVED. C) SRI GIRIDHAR (APPELLANT) HAS DEPOSITED AN AMOUNT RS.50,000/ - ON 25.06.2009 & 26.06.2009 AND RS.5,00,000/ - ON 10.11.2009 SAID TO HAVE BEEN TAKEN FROM SMT. S.T.KRISHNAVENI. IN THE CAPITAL ACCOUNT OF SMT. S.T.KRISHNAVENI, SRI GIRIDHAR WAS SHOWN AS A DEBTOR. THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE FOR THE SOURCE OF DEPOSIT OF RS. 50,000/ - MADE ON 25TH AND 26TH JUNE, 2009. THEREFORE, THE SOURCE FOR THE DEPOSIT OF RS.50,000/ - WAS NOT PROVED. IN VIEW OF THE ABOVE, THE ASSESSING OFFICER TREATED CASH DEPOSITS OF RS.12,50,000/ - AS UNEXPLAINED INCOME OF THE ASSESSEE AND ADDED BACK TO THE INCOME RETURNED. 3. WHEN THE ASSESSEE PREFERRED AN APPEAL BEFORE T HE CIT(A), THE CIT(A) UPHELD THE ADDITION MADE BY THE AO BY HOLDING THAT THE CONTENTION OF THE ASSESSEE THAT THE MONEY WAS DEPOSITED BY HIS FATHER AND HIS WIFE COULD NOT BE PROVED. 4. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - L, HYDERABAD, IS PERVERSE, ILLEGAL AND UNSUSTAINABLE IN LAW. 2. THE COMMISSIONER (APPEALS) ERRED IN SU STAINING THE ADDITION OF RS.12,50,000/ - AS UNEXPLAINED DEPOSITS IN THE HANDS OF THE 3 ITA NO. 1996 /HYD/1 7 G IRIDHAR SOMISETTY APPELLANT. THE COMMISSIONER (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE AMOUNT OF RS.50,000 WAS DEPOSITED BY THE APPELLANT, RS.6.5 LAKHS WAS DEPOSITED BY APPELLANT'S FATHE R AND RS.5.5 LAKHS WAS DEPOSITED BY HIS WIFE. 3. THE COMMISSIONER (APPEALS) OUGHT TO HAVE APPRECIATED THAT APPELLANT IS A SALARIED PERSONA AND IS A REGULAR INCOME TAX ASSESSEE, AND HAD ENOUGH SOURCE TO DEPOSIT RS.50,000/ - . 4. THE COMMISSIONER (APPEALS) FAILED TO APPRECIATE THAT THE DEPOSITS MADE BY HIS FATHER AND HIS WIFE IN THE JOINT ACCOUNT BELONGED TO THEM AND WAS OUT OF THEIR BUSINESS. THE COMMISSIONER (APPEALS) OUGHT TO HAVE APPRECIATED THAT THEY BEING INDEPENDENT ASSESSEES' FILING RETURNS OF INCOM E, THE DEPOSITS MADE BY THEM COULD NOT HAVE BEEN TAXED IN THE HANDS OF THE APPELLANT. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED, IT IS PRAYED THAT THE APPEAL MAY BE ALLOWED. 5 . CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICE THAT ASSESSEE HAVING A JOINT ACCOUNT WITH HIS FATHER AND WIFE. IN THIS JOINT ACCOUNT, ASSESSEE OR THE JOINT ACCOUNT HOLDERS DEPOSITED CASH AS BELOW: 1. 25.06.2009 - 9,00,000/ - CASH DEPOSIT 2. 26.06.2009 - 2,00,000/ - CASH DEPO SIT 3. 26.06.2009 - 5,50,000/ - FD ACCOUNT OPEN ED IN THE NAME OF HIS WIFE 4. 26.06.2009 - 5,00,000/ - FD ACCOUNT OPENED IN THE NAME OF HIS FATHER 5. 10.11.2009 - 6,50,000/ - CASH DE POSIT 6. 26.11.2009 - 6,50,000/ - TRANSFERRED T O NEW ACCOUNT NO. 0504U 23231001, INDUSIND BANK , BANJARA HILLS BRANCH. SUBSEQUENTLY, THE FDS WERE CLOSED ON 23.12.2009 & 24.12.2009, THE SAME FUNDS WERE UTILIZED TO PAY TO M/S. NARAYANA COACHING CENTRE ON 29.12.2009. FROM THE ABOVE INFORMATION, IT IS CLEAR THAT CASH DEPOSITS WERE MADE AND FD ACCOUNTS WERE OPENED IN THE NAME OF WIFE AND FATHER. FURTHER CASH DEPOSITS WERE MADE AND THE SAME W ERE TRANSFERRED TO A NEW ACCOUNT WITH INDUS IND BANK , BANJARA HILLS BRANCH. IT IS NOT BROUGHT TO OUR NOTICE, WHO OWNS THE ABOVE ACCOUNT. ON BROADER VIEW, IT CAN BE SAID THAT THERE DEPOSITS WERE MADE BY 4 ITA NO. 1996 /HYD/1 7 G IRIDHAR SOMISETTY ASSESSEES FATHER AND WIFE CONSIDERING THAT THEY HAVE INDEPENDENT SOURCE. AT THE SAME TIME, WE VERIFIED THE STATEMENT OF AFFAIRS OF ASSESSEES WIFE AND FATHER. FROM THAT STATEMENT, IT IS NOT CLEAR HOW THEY MADE THE CASH DEPOSITS AND THERE IS NO ADDITIONAL SOURCE FOR THEM TO MA K E SUCH HUGE CASH DEPOSITS. SIN CE THE BANK ACCOUNT S W ERE MAINTAINED JOINTLY AND ALL THE THREE HAS SEPARATE SOURCE OF INCOME AND CLAIMED TO HAVE SEPARATE LENDING BUSINESS. IN OUR OPINION, THE A.O SHOULD VERIFY THE DETAILS DE - NOV O AND COLLECT THE OTHER ACCOUNTS MAINTAIN ED BY THE FAMILY AND MATCH THE FUNDS MOVEMENT IN THOSE ACCOUNTS AND MAKE THE ASSESSMENT AFRESH. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 11 TH JANUARY , 201 9 . SD/ - SD/ - ( P. MADHAVI DEVI ) (S . RIFAUR RAHMAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 11 TH JANUARY , 201 9 . KV C OPY TO: - 1) GIRIDHAR SOMISETTY, C/O S/SHRI K. VASANTKUMAR, AV RAGHURAM, P. VINOD & M. NEELIMA DEVI, ADVOCATES, 610 BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD 500 001. 2) ITO, WARD 12 ( 1 ) , AAYAKAR BHAVAN, BASHEERBAGH , HYDERABAD 500 001 3) CIT(A) 1 , HYDERABAD. 4) PR. CIT - 1 , HYD. 5 ) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6 ) GUARD FILE