Siddeshwar Aitha , Warangal V. Income Tax Officer, Ward-3, Warangal

ITA 2063/Hyd/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1626 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 03-06-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 22-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V APARNA
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained cash credit; Source of fund
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 2063 / HYD/201 8 ASSESSMENT YEAR: 20 14 - 15 SIDDESHWAR AITHA , WARANGAL. PAN A PEPA 3520 N VS. INCOME - TAX OFFICER, WARD 3, WARANGAL A PPELLANT RESPONDENT ASSESSEE BY: S H RI S. RAMA RAO REVENUE BY: S MT. V. APARNA DATE OF HEARING: 03 / 0 6 / 201 9 DATE OF PRONOUNCEMENT: 12 / 0 6 /201 9 O R D E R PER S. RIFAUR RAHMAN , AM: T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) 3 , HYDERABAD, DATED, 10 /0 7 /201 8 FOR AY 20 14 - 15 . 2. BRIEF FACTS OF THE CASE ARE, THE ASSESSEE , AN INDIVIDUAL, DERIVES INCOME FROM COMMISSION AND BROKERAGE, FILED HIS RETURN OF INCOME FOR THE AY 20 14 - 15 ON 2 0 / 01 /20 15 DECLARING TOTAL INCOME OF RS . 2,31,670/ - . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) WAS ISSUED. THE AR OF THE ASSESSEE FILED THE REQUIRED INFORMATION IN RESPONSE TO THE SAID NOTICE. 2.1 DURING THE SCRUTINY PROCEEDINGS, ON EXAMINATION OF THE BANK ACCOUNT STATEMENT OF SBH AND ANDHRA BANK DETAILS, THE AO FOUND THAT THE ASSESSEE DID NOT OFFER INTEREST INCOME OF RS. 25,370/ - . WHEN ASKED THE ASSESSEE TO EXPLAIN, THE I.T.A. NO. 2063 /HYD/1 8 SIDDESHWAR AITHA, WARANGAL 2 ASSESSEE REPLIED THAT IT HAP PENED DUE TO OMISSION AT THE TIME OF FILING OF RETURN OF INCOME AND AGREED FOR THE ADDITION. 2.2 FURTHER, THE AO FOUND THAT THE ASSESSEE HAD DEPOSITED CASH AMOUNT OF RS. 28,71,200/ - AND RS. 23,61,500/ - RESPECTIVELY. ON EXAMINATION OF COMPUTATION STATEMEN T SUBMITTED, IT WAS FOUND THAT THE ASSESSEE HAD SHOWN GROSS RECEIPTS OF RS. 31,68,740/ - AND INCURRED EXPENDITURE TO THE TUNE OF RS. 28,99,380/ - AND AFTER MEETING THE EXPENDITURE, THE ASSESSEE HAD OFFERED NET INCOME OF RS. 2,69,370/ - . 2.3 THE AO ASKED THE ASESSESSEE TO SUBSTANTIATE HIS SOURCES OF INCOME. IT WAS S T ATED THAT THE MONEY RECEIVED FROM SELLING OF CLOTHES AND THE SALE PROCEEDS WAS DEPOSITED IN THE BANK ACCOUNT. THE ASSES S EE'S AR WAS CONFRONTED AND ASKED WHY THE BUSINESS TRANSACTION HAS MADE IN SB ACCOUNT AND WHAT IS THE NEED FOR WITHDRAWAL FREQUENTLY AND SIMULTANEOUSLY DEPOSITS THE AMOUNT. THE ASSESSEE'S AR REPLIED THAT THE ASSESSEE WAS NOT AWARE O F THE CONSEQUENCE OF THE BUSINESS TRANSACTION IN SB A /C AND INADVERTENTLY HE HAD MADE TRANSACTIONS. I N FACT, ALL THE DEPOSITS ARE NOTHING BUT RECEIPTS FROM SELLING OF CLOTHES. HOWEVER, THE ASSESSEE COULD NEITHER ESTABLISH THE CORRECT SOURCE OF INCOME NOR EXPLAIN THE FREQUENT WITHDRAWAL AND DEPOSIT THE AMOUNT IN THE BANK. THEREFORE, AO HELD THAT THE ASSESS EE FAILED TO CORRELATE THE WITHDRAWAL AND DEPOSIT OF MONEY AND HENCE, THE ASSESSEE'S VERSION IS NOT ACCEPTABLE. IN THE ABSENCE OF THE CORRECT SOURCE OF CASH DEPOSIT, THE AO ADOPTED PEAK CASH CREDIT METHOD TO ARRIVE THE ASSESSEES TAXABLE INCOME. ACCORDINGL Y, PEAK CASH CREDIT AMOUNTS ARRIVED AT RS. 17,71,800/ - FROM SBH A/C AND RS. 16,04,000/ - FROM ANDHRA BANK A/C WAS ADDED TO THE RETURNED INCOME OF THE ASSESSEE TOWARDS UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT. I.T.A. NO. 2063 /HYD/1 8 SIDDESHWAR AITHA, WARANGAL 3 3. AGGRIEVED BY THE ORDER OF AO, THE ASSESSE E PREFERRED AN APPEAL BEFORE THE CIT(A). SINCE THERE WAS NO COMPLIANCE FROM THE ASSESSEE TO THE NOTICES ISSUED BY THE CIT(A), THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISIN G THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LD. C I T(A) IS ERRONEOUS BOTH ON FACTS A N D LAW. 2. THE LD. CIT(A) OUGHT TO HAVE PROVIDED FURTHER OPPORTUNITY BEFORE THE APPEAL IS DECIDED. 3. THE LD. C I T(A) ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER OF RS. 33,75,800/ - REPRESENTING THE AGGREGATE OF THE DEPOSITS MADE BY THE APPELLAN T. THE LD. C I T(A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE APPELLANT IS IN THE BUSINESS OF OLD FOUR WHEELERS AND THAT THE INCOME FROM SUCH ACTIVITY IS ALREADY ADMITTED IN THE RETURN OF INCOME. 4 . THE LD. C I T(A) OUGHT TO HAVE PROVIDED OPPORTUNITY BEFORE COMING TO THE CONCLUSION THAT THERE IS NO EXPLAINABLE SOURCE FOR THE DEPOSITS MADE INTO THE BANK ACCOUNT. 5 . ANY OTHER GROUND / GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 5 . CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICE THAT CIT(A) HAS GIVEN SEVERAL OPPORTUNITIES TO THE ASSESSEE AND SINCE THERE WAS NO RESPONSE, HE HAS DISMISSED THE APPEAL WITHOUT DECIDING THE APPEAL ON MERIT. BEFORE US, LD. AR SUBMITS THAT CIT(A) SHOULD HAVE GIVEN ONE MORE OPPORTUNITY BEFORE DEC IDING THE ISSUE AND ASSESSEE HAS NO OPPORTUNITY TO REPRESENT THE CASE ON MERIT AND PRAYED FOR ONE MORE OPPORTUNITY. TO MEET THE ENDS OF JUSTICE, WE ARE INCLINED TO REMIT THIS ISSUE BACK TO THE FILE OF I.T.A. NO. 2063 /HYD/1 8 SIDDESHWAR AITHA, WARANGAL 4 CIT(A) WITH A DIRECTION TO PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE TO ARGUE HIS CASE ON MERITS AND THEREAFTER DECIDE THE ISSUES IN ACCORDANCE WITH LAW. THE ASSESSEE IS DIRECTED TO COMPLY WITH THE NOTICES OF THE CIT(A) AND REPRESENT BEFORE HIM. 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PR ONOUNC ED IN THE OPEN COURT ON 12 TH JUNE, 2019. SD / - ( P. MADHAVI DEVI ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 12 TH JUNE , 201 9. KV COPY FORWARDED TO: 1. SIDDESHWAR AITHA, H.NO. 17 - 35, OLD BUS STAND, CHERIAL, WARANGAL 506 223. 2 . ITO, WARD 3, AAYAKAR BHAVAN, STATION ROAD, WARANGAL 506 002. 3 . CIT (A) - 3 , HYDERABAD 4. PR. CIT - 3 , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE