U. Venkateswara Rao, Hyderabad V. ITO, Ward-6(4), Hyderabad

ITA 292/HYD/2014

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5793 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 20-01-2020
• Assessment Year: 2009-2010
• Appeal Filed On: 25-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained cash credit; Additional evidence
• Section: 143(3); 234B; 133(6)

Judgement Text

ITA NO 292 OF 2014 U VENKATESWARA RAO HYDERABAD. PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.292/HYD/2014 ASSESSMENT YEAR: 2009-10 SHRI U. VENKATESWARA RAO HYDERABAD PAN:AAEPU1538P VS. INCOME TAX OFFICER WARD 6(4) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI S. RAMA RAO REVENUE BY : SMT.AMISHA S.GUPT, DR DATE OF HEARING: 20/01/2020 DATE OF PRONOUNCEMENT: 31/01/2020 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2009-10 AGAIN ST THE ORDER OF THE CIT (A)-4, HYDERABAD, DATED 20-12- 2013. 2. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE GROUNDS 1 & 8 ARE GENER AL IN NATURE AND THEREFORE, NEEDS NO ADJUDICATION AND THE ASSESS EE IS NOT PRESSING GROUNDS 5 & 6. THEY ARE ACCORDINGLY REJECT ED AS NOT PRESSED. 3. THE OTHER GROUNDS WHICH ARE AGITATED BY THE ASSE SSEE ARE AS UNDER: 2. THE LEARNED CIT (A) ERRED IN NOT ADMITTING THE ADDITIONAL EVIDENCE SUBMITTED WITH REGARD TO THE SOURCE OF INCOME FOR THE CREDITORS. THE LEARNED CIT (A) ITA NO 292 OF 2014 U VENKATESWARA RAO HYDERABAD. PAGE 2 OF 8 OUGHT TO HAVE SEEN THAT THE ADDITIONAL EVIDENCE SUBMITTED IS RELEVANT FOR DETERMINING THE CREDIT WORTHINESS OF THE CREDITORS AND THEREFORE, OUGHT TO HAVE ADMITTED SUCH ADDITIONAL EVIDENCES. 3. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDI TION OF RS.25 LAKHS MADE BY THE AO TOWARDS UNEXPLAINED CREDITS. THE LEARNED CIT (A) OUGHT TO HAVE ACCEPTED THE SOURCE OF CASH CREDITS INTRODUCED BY THE APPELLANT. 4. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDI TION OF RS.14 LAKHS DISBELIEVING THE SALE OF GOLD JEWELL ERY BY THE APPELLANT. THE LEARNED CIT (A) OUGHT TO HAVE SEEN THAT THE APPELLANT FILED LETTERS OF CONFIRMATI ON TO THE EFFECT THAT THE APPELLANT SOLD GOLD JEWELLERY A ND REALIZED THE AMOUNT OF RS.14 LAKHS. 7. THE LEARNED CIT (A) ERRED IN CONFIRMING LEVY OF INTEREST U/S 234A OF RS.84,690/- AND U/S 234B OF RS.5,58,954/-. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, DOING BUSINESS OF JOB WORK AND ALSO BEI NG A PARTNER IN FIRMS, FILED HIS RETURN OF INCOME FOR THE A.Y 2009- 10 ON 23.12.2009 DECLARING A TOTAL INCOME OF RS.6,25,279 AND AGRICULTURAL INCOME OF RS.44,860/-. DURING THE ASSE SSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE AO NOTICED T HAT THE ASSESSEE HAS DEPOSITED CASH OF RS.47,19,000/- IN HI S SAVINGS BANK A/C MAINTAINED WITH ANDHRA BANK, JUBILEE HILLS , HYDERABAD. THE ASSESSEE WAS THEREFORE, ASKED TO FUR NISH COPIES OF ALL THE BANK A/C STATEMENTS ALONG WITH SOURCES FOR CREDITS THEREIN. SINCE THERE WAS NO COMPLIANCE BY THE ASSES SEE, THE AO OBTAINED THE INFORMATION FROM THE BANKS U/S 133(6) OF THE I.T. ACT AND WHEN CONFRONTED, THE ASSESSEE APPEARED AND SUBM ITTED A LETTER DATED 21-12-2011 STATING THAT THE TOTAL TRAN SACTIONS IN THE BANK A/C STATEMENT IS RS.86,33,598/- AS AGAINST THE REPORTED TURN OVER OF RS.38,00,000/-. THE ASSESSEE EXPLAINED THE DIFFERENCE OF RS.48.00 LAKHS AS REPRESENTING THE CAPITAL RECEI PTS RECEIVED ITA NO 292 OF 2014 U VENKATESWARA RAO HYDERABAD. PAGE 3 OF 8 FROM THE SALE OF GOLD AND OWN SAVINGS AND SOUGHT TI ME TO SUBSTANTIATE THE SAME. VIDE LETTER DATED 26.12.2011 , THE ASSESSEE SUBMITTED A COPY OF THE CASH BOOK FOR THE FINANCIAL YEAR 2008-09. ON VERIFICATION OF THE SAME, THE AO OBSERVED THAT T HE ASSESSEE HAS INTRODUCED FRESH CAPITAL AND ADVANCES BY WAY OF CASH ON THE FOLLOWING DATES: DATE AMOUNT (IN RS.) MODE OF RECEIPT AND SOURCE 2-4-2008 5,00,000 CASH-HAND LOAN FROM FRIENDS & RELATIVES 3-5-2008 5,00,000 -DO- 2-6-2008 5,00,000 -DO- 2-7-2008 14,00,000 CASH RECEIVED BY WAY OF SALE OF GOLD ORNAMENTS 31-7-2008 8,05,682 CASH CAPITAL 2-2-2009 29,360 CASH CAPITAL 31-3-2009 1,04,658 ADVANCES FROM CUSTOMERS 31-3-2009 2,95,000 CASH CAPITAL 5. THE ASSESSEE WAS THEREFORE, ASKED TO FURNISH THE SOURCES FOR CASH DEPOSITS AND TO SUBMIT THE NECESSA RY EVIDENCE TO ESTABLISH THE GENUINENESS OF THE SOURCES. THE ASSES SEE, VIDE LETTER DATED 27.12.2011, FURNISHED THE CONFIRMATION FROM 5 PERSONS AND STATED THAT THERE IS A DIFFERENCE OF RS.22,12,594/- BETWEEN THE CASH DEPOSITS AND CASH WITHDRAWALS SHOWING EXCESS C ASH DEPOSITS WHICH IS SUBSTANTIATED BY THE CONFIRMATION LETTERS ISSUED BY THE FIVE PERSONS WHO ARE AS FOLLOWS: NAME OF THE PERSON AMOUNT ADVANCED (IN RS.) SOURCES FOR ADVANCE D.B.SIVARAMA PRASAD 5,00,000 AGRICULTURE G.SUDHAKARA RAO 5,00,000 -DO- A.T.V. RAMANA 5,00,000 -DO- V. SUBBA RAO 5,0 0,000 -DO- B.NAGESWARA RAO 5,00,000 -DO- TOTAL 25,00,000 ITA NO 292 OF 2014 U VENKATESWARA RAO HYDERABAD. PAGE 4 OF 8 6. ON VERIFICATION OF THE SAME, THE AO OBSERVED THA T THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED INTEREST FREE LOANS OF RS.25.00 LAKHS FROM THE ABOVE PERSONS WHO ARE AGRI CULTURISTS BUT SINCE THEIR SOURCE OF INCOME WAS ONLY AGRICULTURE A ND THEY ARE NOT INCOME TAX ASSESSEES THOUGH THEY HAVE CONFIRMED TO GIVEN THE AMOUNT TO THE ASSESSEE DURING THE PERIOD 2007-09, T HE AMOUNTS WERE RECEIVED DURING THE FINANCIAL YEAR 2008-09 AND THEREFORE, HELD THAT THE CREDITWORTHINESS OF THE CREDITORS IS NOT PROVED. HE THEREFORE, TREATED THE SUM OF RS.25.00 LAKHS AS UNE XPLAINED CREDITS AND BROUGHT IT TO TAX. 7. WITH REGARD TO THE SALE OF GOLD ORNAMENTS, THE A O OBSERVED THAT THE ASSESSEE HAS FILED ONLY COPIES OF THE ESTIMATES WITH VALUE OF GOLD ORNAMENTS SOLD WHICH DID NOT CON TAIN ANY NAME OF THE CONCERNED PERSONS TO WHOM THEY ARE SOLD . THEREFORE, THE AO HELD THAT THE AMOUNT OF RS.14.00 LAKHS ALLEG EDLY RECEIVED ON SALE OF GOLD IS NOT PROPER AND HE ACCORDINGLY BR OUGHT IT TO TAX. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) ALONG WITH THE ADDITIONAL EVIDENCE IN THE FORM OF C ONFIRMATION LETTERS AND THE CERTIFICATES OF VRO CERTIFYING THAT THE CREDITORS OF THE ASSESSEE WERE AGRICULTURISTS OWNING AGRICULTURA L LAND AND ALSO ESTIMATION OF INCOME THEREFROM. COPIES OF PATTEDAR PASS BOOKS WERE ALSO FILED AS ADDITIONAL EVIDENCE. THE CIT (A) HOWEVER, OBSERVED THAT THE ADDITIONAL EVIDENCE BEING PATTEDA R PASS BOOK AND VRO LETTERS, CONSTITUTE ONLY THE EVIDENCE THAT THE CREDITORS OWNED AGRICULTURAL LAND IN QUESTION, BUT IT DID NOT ESTABLISH THAT THEY WERE ACTUALLY DERIVING ANY AGRICULTURAL INCOME . THEREFORE, HE HELD THAT THE EVIDENCE DID NOT ESTABLISH THE QUANTU M OF AGRICULTURAL INCOME DERIVED FROM THE LAND. HE RELIE D UPON THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL I N THE CASE OF ITA NO 292 OF 2014 U VENKATESWARA RAO HYDERABAD. PAGE 5 OF 8 PARAS COLLINS DISTILLERIES V ITO (2011) 07 ITR 614 WHEREIN THE ASSESSEE THEREIN, A PARTNERSHIP FIRM HAD CLAIMED TO HAVE INTRODUCED CAPITAL AND HAD EXPLAINED THE SOURCES FO R THE INTRODUCTION OF CAPITAL BY ONE OF THE PARTNERS ON T HE BASIS OF A CERTIFICATE FROM TAHSILDAR WHICH DISCLOSED ANNUAL Y IELD PER ACRE, AND THE ITAT HELD THAT MERE HOLDING OF LAND DOES NO T PROVE THAT THE SAID PERSONS HAVE DERIVED ANY AGRICULTURAL INCO ME AND THAT THE ASSESSEE THEREIN HAS NOT PRODUCED ANY EVIDENCE IN THE FORM OF BILLS AND INVOICES OF THE AGRICULTURAL OPERATIONS. THE CIT(A) FURTHER RELIED UPON THE DECISION OF THE COORDINATE BENCH IN THE CASE OF ACIT VS. INDIAN ART EMPORIUM (1994) 209 ITR (AT) 1( THIRD MEMBER) WHEREIN IT WAS HELD THAT IF THE APPELLANT D O NOT ESTABLISH THE AVAILABILITY OF CASH WITH THE CREDITORS ON THE DATE OF MAKING THE ADVANCES TO THE APPELLANT , THE SAME CANNOT BE USED AS EVIDENCE TO PROVE THEIR CREDITWORTHINESS. THUS, THE CIT (A) CONFIRMED THE ADDITION OF RS.25.00 LAKHS. 8. WITH REGARD TO THE RECEIPT OF RS.14.00 LAKHS BY WAY OF SALE OF GOLD ORNAMENTS, THE ASSESSEE FILED CONFIRMA TION LETTERS OF TWO PERSONS WHO ARE JEWELLERS WHO CONFIRMED THAT GO LD JEWELLERY BELONGING TO THE ASSESSEE HAS BEEN SOLD THROUGH THE M. THE CIT (A) HOWEVER, DID NOT ACCEPT THE ADDITIONAL EVIDENCE ON THE GROUND THESE WERE NOT FILED BEFORE THE AO AND THE ASSESSEE HAS NOT EXPLAINED THE SAME BEFORE THE AO DURING THE ASSESSM ENT PROCEEDINGS. HE THEREFORE, REFUSED TO CONSIDER THE SAME AND CONFIRMED THE ADDITION MADE BY THE AO. AGGRIEVED, T HE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. ITA NO 292 OF 2014 U VENKATESWARA RAO HYDERABAD. PAGE 6 OF 8 9. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE REITE RATING THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW S UBMITTED THAT THOUGH THE ASSESSEE HAS FILED THE CONFIRMATION LETT ERS OF THE CREDITORS BEFORE THE AO WITH REGARD TO THE CREDITOR S, HE DID NOT CONSIDER THE SAME AND THE ADDITION WAS MADE BY THE AO. HE SUBMITTED THAT IN ORDER TO SUBSTANTIATE THE ABOVE C LAIM, THE IDENTITY OF THE CREDITORS AND THE GENUINENESS OF TH E TRANSACTIONS AND THE CREDITWORTHINESS OF THE CREDITORS, HE HAS F ILED THE CERTIFICATES OF THE RESPECTIVE VROS CONFIRMING THE LAND HOLDING OF THE CREDITORS AND THEIR INCOME PER ACRE. HE SUBMITT ED THAT THE CIT (A) OUGHT TO HAVE ADMITTED THE SAME AND CALLED FOR A REMAND REPORT FROM THE AO, BUT INSTEAD HE HAS REFUSED TO C ONSIDER THE EVIDENCE. HE TRIED TO DISTINGUISH THE DECISIONS REL IED UPON BY THE CIT (A) FROM THE FACTS OF THE CASE BEFORE US. 10. AS REGARDS THE SALE OF GOLD ALSO, HE REFERRED T O THE CONFIRMATION LETTERS OF TWO PERSONS WHO ARE ALLEGED LY JEWELERS WHO CONFIRMED THAT THE ASSESSEE HAS SOLD HIS JEWELLERY THROUGH THEM. HE SUBMITTED THAT THESE CONFIRMATION LETTERS WERE F ILED BEFORE THE CIT (A) BUT THE CIT(A) HAS REJECTED THE SAME. THERE FORE, HE PRAYED THAT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND THE EVIDENCE WHICH HAS NOT BEEN CONSIDERED BY THE AO MAY BE REMA NDED TO THE CIT (A). 11. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT JUST BEFORE THE COMPLETION OF TIME BARRING ASSESSMENT, THE ASSESSEE HAS FILED THE EVIDENCES BEFORE THE AO. THEREFORE, HE SUBMITTED TH AT THE ASSESSEE DID NOT COOPERATE WITH THE AO FOR PROPER A SSESSMENT OF ITA NO 292 OF 2014 U VENKATESWARA RAO HYDERABAD. PAGE 7 OF 8 HIS INCOME. FURTHER SUPPORTING THE ORDERS OF THE CI T (A) ON MERITS, SHE SUBMITTED THAT THE CREDITORS WITH REGAR D TO WHOM, THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE HAVE NOT BEE N PROVED TO BE PEOPLE WITH MEANS OR AVAILABILITY OF SUCH HUGE CASH TO BE ADVANCED TO THE ASSESSEE. WITH REGARD TO THE GOLD J EWELLERY BEING SOLD THROUGH TWO PERSONS, SHE SUBMITTED THAT THE AS SESSEE HAS FAILED TO SUBSTANTIATE THE SAME AT THE TIME OF THE ASSESSMENT PROCEEDINGS. 12. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS NOT FILED THE DETAILS OF THE LAND HOLDING OF THE CREDITORS BEFORE THE AO. THEREF ORE, THE AO WAS CONSTRAINED TO HOLD THE GENUINENESS AND CREDITWORTH INESS OF THE PERSONS AS NOT BEING PROVED. BUT THE ASSESSEE HAS F ILED THE DETAILS OF THEIR LAND HOLDING AND ALSO THE ANNUAL INCOME OF SUCH PEOPLE FROM THEIR LAND IN THE FORM OF CERTIFICATES FROM TH E VRO. WE ARE OF THE OPINION THAT THE CIT (A) OUGHT TO HAVE ATLEAST CALLED FOR A REMAND REPORT BEFORE HOLDING THAT THE CREDITWORTHIN ESS OF THE CREDITORS IS NOT PROVED. WITH REGARD TO THE SALE OF GOLD JEWELLERY ALSO, THE ASSESSEE HAS FILED THE CONFIRMATION OF TW O PERSONS WHO ARE ALLEGEDLY GOLDSMITHS WHO CONFIRMED SELLING OF A SSESSEES GOLD BUT EXCEPT FOR THE QUANTUM, THE DETAILS OF THE ORNA MENTS WHICH ARE SOLD IS NOT GIVEN. THE AO AND THE CIT (A) HAVE NOT ACCEPTED THESE CONFIRMATIONS ON THE GROUND THAT THEY WERE NO T FILED BEFORE THE AO. IN VIEW OF THE SAME, WE ARE INCLINED TO ADM IT THE CONFIRMATION LETTERS AS ADDITIONAL EVIDENCE. IN THE INTEREST OF JUSTICE, WE DEEM IT FIT AND PROPER TO REMAND THE IS SUES TO THE FILE OF THE AO FOR RE-ADJUDICATION OF THE ISSUES. NEEDLE SS TO SAY THAT THE ASSESSEE SHALL BE GIVEN A FAIR OPPORTUNITY OF H EARING. ITA NO 292 OF 2014 U VENKATESWARA RAO HYDERABAD. PAGE 8 OF 8 13. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2020. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 31 ST JANUARY, 2020. VINODAN/SPS COPY TO: 1 SHRI S.RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYA'S ELEGANCE, 3-6- 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 2 ITO WARD 6(4) HYDERABAD 3 CIT (A)-IV HYDERABAD 4 CIT III HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER