B. Prabhakar Reddy, Hyd, Hyderabad V. ACIT, Circle-16(3), Hyderabad, Hyderabad

ITA 276/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5930 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 22-11-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 09-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained cash credit; Peak credit; Condonation of delay
• Section: 143(3)

Judgement Text

ITA NO 276 OF 2016 B PRABHAKAR REDDY HYDERABAD PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.276/HYD/2016 (ASSESSMENT YEAR: 2005-06) SHRI B. PRABHAKAR REDDY HYDERABAD PAN: ADHPB 1469 J VS ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 16(3) HYDERABAD FOR ASSESSEE : SHRI S. RAMA RAO FOR REVENUE : SHRI K.J. RAO, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2005-06. IN T HIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF T HE CIT (A)-4, HYDERABAD, DATED 4.12.2015 IN DIRECTING THE AO TO T AKE THE PEAK OF THE CASH BALANCE OF RS.7,11,676 AS UNEXPLAINED M ONEY U/S 69A OF THE ACT AND BRING IT TO TAX. 2. AT THE OUTSET, IT IS SEEN THAT THERE IS A DELAY OF 4 DAYS IN FILING OF THE APPEAL. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY AND ON CONSIDERING THE REASONS GIVEN THEREIN, WE ARE SATISFIED THAT THE DELAY IS NOT WIL LFUL OR WANTON. THEREFORE, THE DELAY IS CONDONED. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, T HE MANAGING DIRECTOR OF M/S. PIONEER E LABS PRIVATE LI MITED, FILED HIS RETURN OF INCOME FOR THE A.Y 2005-06 DECLARING A TOTAL INCOME DATE OF HEARING : 30.11.2016 DATE OF PRONOUNCEMENT : 21.12.2016 ITA NO 276 OF 2016 B PRABHAKAR REDDY HYDERABAD PAGE 2 OF 3 OF RS.1,86,275. DURING THE ASSESSMENT PROCEEDINGS U /S 143(3) R.W.S. 254 OF THE I.T. ACT, THE ASSESSEE WAS DIRECT ED TO EXPLAIN THE SOURCES FOR THE DEPOSITS INTO THE BANK A/C OF THE O RIENTAL BANK OF COMMERCE. ON 28.12.2012, THE ASSESSEE SUBMITTED A L ETTER REQUESTING THE AO TO CONSIDER THE PEAK OF THE CASH BALANCE OF RS.7,11,676 AND COMPLETE THE ASSESSMENT. THE AO, HO WEVER, DID NOT ACCEPT THE ASSESSEES CONTENTION AND HELD THAT THE ASSESSEE HAS NOT EXPLAINED THE SOURCES FOR THE DEPOSITS. THE REFORE, HE CONSIDERED THE DAY TO DAY BALANCES IN THE BANK A/C BY NETTING OF CASH DEPOSITS AND THE CASH WITHDRAWALS AND THE HIGH EST BALANCE OF RS.17,23,900 AS ON 09.03.2005 IS TAKEN AS PEAK C REDIT. THEREFORE, HE BROUGHT THIS SUM OF RS.17,23,900 TO T AX AS UNEXPLAINED CASH CREDIT U/S 69A OF THE I.T. ACT. AG GRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) WHO GRANTED PARTIAL RELIEF AND CONFIRMED THE DISALLOWANCE AT RS .7,11,676. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE IS THE OWNER OF LARGE EXTENT OF AGRICU LTURAL LAND AND THE ASSESSEE HAS DEPOSITED THE RECEIPTS FROM AGRICU LTURAL PRODUCE INTO THE BANK A/C AND THE ASSESSEE ALSO HAD OVER-DR AFT FACILITY OF RS.8.00 LAKHS. THEREFORE, ACCORDING TO HIM, THE ASS ESSEE HAS EXPLAINED THE SOURCES FOR THE DEPOSITS BUT THE AUTH ORITIES BELOW HAVE NOT CONSIDERED THE SAME IN PROPER PERSPECTIVE. THEREFORE, ACCORDING TO HIM, THE ENTIRE ADDITION SHOULD HAVE B EEN DELETED. 5. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE ITSELF VIDE LETTER DATED 28.11.2012 REQUESTED THE A O TO CONSIDER THE PEAK CASH BALANCE OF RS.7,48,900 AS UNEXPLAINED CASH CREDIT AND COMPLETE THE ASSESSMENT. HE SUBMITTED THAT THE CIT (A) HAS ITA NO 276 OF 2016 B PRABHAKAR REDDY HYDERABAD PAGE 3 OF 3 IN FACT CONFIRMED THE ADDITION OF RS.7,11,676 WHICH IS LESS THAN RS.7,48,900 ADMITTED BY THE ASSESSEE AND THEREFORE, THE ASSESSEE SHOULD NOT HAVE ANY GRIEVANCE. 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE CALCULATION OF PEAK CREDIT BY THE ASSESSEE IS NOT CORRECT. WHEN THERE ARE CASH DE POSITS INTO THE ASSESSEES BANK A/C, THE ONUS LIES ON THE ASSESSEE TO EXPLAIN THE SOURCE FOR EACH OF THESE DEPOSITS. THE PEAK CREDIT NEEDS TO BE CONSIDERED ONLY WHEN THE ASSESSEE IS NOT ABLE TO EX PLAIN THE SOURCES FOR CASH DEPOSITS. VIDE LETTER DATED 28.11. 2012, THE ASSESSEE HIMSELF HAS ACCEPTED THAT A SUM OF RS.7,48 ,900 MAY BE CONSIDERED AS PEAK CREDIT AND TREATED AS UNEXPLAINE D DEPOSIT. THE CIT (A) HAS RESTRICTED THE DISALLOWANCE TO RS.7,11, 676 WHICH IS LESS THAN THE SUM OFFERED BY THE ASSESSEE. THEREFOR E, WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE CIT (A). 7. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST DECEMBER, 2016. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 21 ST DECEMBER, 2016. VINODAN/SPS COPY TO: 1 SHRI S.RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYA'S E LEGANCE, 3-6- 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 2 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 16(2),A AYAKAR BHAVAN, BASHEERBAGH, HYDERABAD 3 CIT (A)-4 HYDERABAD 4 PR.CIT 4 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER