Chukka Amar Sandeep, Visakhapatnam V. Income Tax Officer, Ward-4(2), Visakhapatnam

ITA 250/VIZ/2021

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The case involves Chukka Amar Sandeep, a proprietor of Alameer Sai Wines, who appealed against the order of the Commissioner of Income Tax (Appeals) which upheld the addition of Rs.34,88,060 to his income as unexplained cash deposits under section 69A of the Income Tax Act, 1961. The assessee had declared a net taxable income of Rs.9,78,280 for the Assessment Year 2017-18 and was subjected to scrutiny due to substantial cash deposits during the year. Despite providing some explanations and documents, the assessee could not satisfactorily explain the sources of all cash deposits, particularly those amounting to Rs.34,88,060, leading to their classification as unexplained money and subsequent taxation.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135977 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 06-03-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 24-11-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PROVIDING ANY
• Section: 143(3); 142(1); 143(1); 143(2); 69A

Judgement Text

आयकरअपीलीयअधिकरण, धिशाखापटणम “एसएमसी”पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER आयकर अपील सं./I.T.A.No.250/Viz/2021 (ननधधारण वर्ा / Assessment Year : 2017-18) Chukka Amar Sandeep D.No.9-433, Near Bhashyam School Ravi Nagar Vepagunta, Visakhapatnam [PAN : AGVPC9247J] Vs. Income Tax Officer Ward-4(2) Visakhapatnam (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : Shri G.V.N.Hari, AR प्रत्यधथी की ओर से / Respondent by : Shri O.N.Hari Prasada Rao, DR सुनवधई की तधरीख / Date of Hearing : 07.03.2023 घोर्णध की तधरीख/Date of Pronouncement : 01.06.2023 आदेश /O R D E R Per Shri Duvvuru RL Reddy, Judicial Member : This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi vide DIN & Order No.ITBA/NFAC/S/250/2021-22/1036050872(1) arising out of assessment order passed u/s 143(3) of the Income Tax Act, 1961 (in short ‘Act’) dated 19.12.2019 for the Assessment Year (A.Y.) 2017-18. 2 I.T.A. No.250/Viz/2021, A.Y.2017-18 Chukka Amar Sandeep, Visakhapatnam 2. Brief facts of the case are that the assessee filed his return of income on 27.10.2017 declaring a net taxable income of Rs.9,78,280/-. The return was processed 143(1) of the Act and the case was selected for limited scrutiny under CASS for the reason “Cash deposit during the year”. Notices u/s 143(2) and 142(1) were issued calling for information in respect of the nature and sources of cash deposits made by the assessee along with a copy of the bank account maintained by him. As there was no response, show cause notice was issued on 21.11.2019. In response to which, the assesee filed his reply along with bank account statements maintained with State Bank of India and Indian Bank. Since the assessee has not furnished anything about the nature and sources of the cash deposits made, data pertaining to the assessee available from the e-filing portal was analysed and found that the assessee during the financial year made total cash deposits of Rs.3,26,61,800/- as against the gross turnover declared by the assessee at Rs.2,91,73,740/-. The assessee failed to explain the sources for cash deposits of Rs.34,88,060/-, though sufficient opportunities were given. Accordingly, the amount of Rs.34,88,060/- representing cash deposits made during the demonetisation period was treated as unexplained money and brought to tax u/s 69A of the Act. 3 I.T.A. No.250/Viz/2021, A.Y.2017-18 Chukka Amar Sandeep, Visakhapatnam 3. On being aggrieved, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) upheld the addition made by the AO and dismissed the appeal of the assessee. 4. On being aggrieved, the assessee preferred an appeal before the Tribunal by raising the following grounds : 1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs.34,88,060 made by the assessing officer u/s 69A of the Act towards alleged unexplained cash credits in bank account 3. Any other grounds may be urged at the time of hearing. Ground No.1 and 3 are general in nature which do not require specific adjudication. 5. Ground No.2 is related to addition of Rs.34,88,060/- made u/s 69A of the Act. The Ld.AR submitted that the assessee is a proprietor of Alameer Sai Wines, dealing with IMFL retail with license approved from Andhra Pradesh State Excise and Prohibition Department, as per the license condition, the assessee has to purchase IMFL from Andhra Pradesh Beverage Corporation Ltd. (APBCL) for onward retail sale. The assessee is a regular filer of income tax returns. The Ld.AR further 4 I.T.A. No.250/Viz/2021, A.Y.2017-18 Chukka Amar Sandeep, Visakhapatnam submitted that Sri B.Suryanaraya, Prop.Karthikeya Wines, a close associate of the assessee requested the assessee to transfer on behalf of him to APBCL for purchase of IMFL, for which cash of Rs.36,50,000/- was received and deposited into the bank account and the balance amount of Rs.7,33,000/- was transferred from his bank account to assessee’s IMFL account for purchases. The Ld.AR submitted that the details of funds transferred was explained before the CIT(A) and the balance sheet, Profit & Loss account, computation of total income, acknowledgement, 26AS, audit report u/s 44AB, bank statements were also produced. The Ld.AR, therefore, submitted that addition made u/s 69A is unjustified and prayed to delete the addition made and allow the appeal of the assessee. 6. Per contra, the Ld.DR submitted that the Ld.CIT(A) is justified in upholding the addtion made by the assessee, since the assessee failed to bring any material on record in support of his explanation. He, therefore, pleaded to uphold the addition made by the Ld.CIT(A) and dismiss the appeal of the assessee. 7. I have heard both the parties and perused the material placed on record. It is apparent from record that the turnover of the assessee was declared at Rs.2,91,73,740/- and the assessee admitted net profit of 5 I.T.A. No.250/Viz/2021, A.Y.2017-18 Chukka Amar Sandeep, Visakhapatnam Rs.9,87,778/-. It is observed that the assessee made total cash deposits during the finacial year 2016-17 including the demonetisation period aggregating to Rs.3,26,61,800/- as against the gross turnover declared by the assessee at Rs.2,91,73,740/-. Hence, the onus passed on the assessee to explain the sources for cash deposits amounting to Rs.34,88,060/- made in the bank accounts of the assessee. The contention of the assessee that the amounts were received from Shri B.Suryanarayana, Proprietor, Kartikeya Wines was not substantiated by the assessee by providing any confirmation letter from Shri B.Suryanarayana before the revenue authorities or before us. Further, from the order of the Ld.CIT(A), I observe that the assessee has not accounted both the transactions i.e. payment to APBCL or amount received from Shri B.Suryanarayana. As per the provisions of sec.69A of the Act, “where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him, for any source of income, and the assessee offers no explanation about the nature and sources of acquisition of the money, bullion, jewellery or other valuable article, or the explanantion offered by him is not in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, 6 I.T.A. No.250/Viz/2021, A.Y.2017-18 Chukka Amar Sandeep, Visakhapatnam jewellery or other valuable article may be deemed to be the income of the assessee for such financial year’. Since the assessee failed to bring any material on record in support of his explanation, I find that the Ld.revenue authorities have rightly held the amount of Rs.34,88,060/- as unexplained and made addition u/s 69A of the Act. I, therefore, find no infirmity in the order of the Ld.CIT(A) on this ground and the appeal of the assessee is dismissed. 9. In the result, appeal of the assessee is dismissed. Order pronounced in the open court on 1 st June, 2023. Sd/- (द ु व्वूरु आर.एल रेड्डी) (DUVVURU RL REDDY) न्याधयक सदस्य/JUDICIAL MEMBER Dated : 01.06.2023 L.Rama, SPS आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– Chukka Amar Sandeep, D.No.9-433, Near Bhashyam School, Ravi Nagar, Vepagunta, Visakhapatnam 2. रधजस्व/The Revenue – The Income Tax Officer, Ward-4(2), Visakhapatnam 3. The Principal Commissioner of Income Tax, Visakhapatnam 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 5..गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam