Narender Reddy Gangidi, Hyderabad V. Income Tax Officer,(International Taxation), Hyderabad

ITA 309/Hyd/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4263 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-09-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 13-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHAN REDDY
• Assessee Lawyers: N VENKATARAM
• Keywords: Unexplained cash credit; Corroborative evidences
• Section: 142(1)

Judgement Text

TH E INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE S MT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S . RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 3 09 /HYD/201 8 ASSESSMENT YEAR: 20 13 - 14 NARENDER REDDY GANGIDI , HYDERABAD. PAN AUYPG 0169L VS. INCOME - TAX OFFICER (INTERNATIONAL TAXATION) , HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI N. VENKATARAM REVENUE BY : SHRI MOHAN REDDY DATE OF HEARING : 25 - 0 9 - 201 8 DATE OF PRONOUNCEMENT : 10 - 1 0 - 201 8 O R D E R PER S . RIFAUR RAHMAN, A .M.: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) 10 , HYDERABAD, DATED 22 / 09 /201 7 FOR AY 20 13 - 14 . 2. BRIEF FACTS OF THE CASE ARE, ASSESSEE A NON - RESIDENT, FILED HIS RETURN OF INCOME FOR THE AY 2013 - 14 ON 26/07/2013 ADMITTING TOTAL INCOME OF RS. 4,84,430/ - , WHICH WAS PROCESSED U/S 143(1) OF THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT) ON 18/10/2014. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SC RUTINY UNDER CASS. ACCORDINGLY, STATUTORY NOTICES U/S 143(2) AND 142(1) WERE ISSUED AND SERVED ON THE ASSESSEE. IN RESPONSE TO THE SAID NOTICES, THE ASSESSEES AR FURNISHED THE INFORMATION CALLED FOR. 2.1 ON VERIFICATION OF THE BANK ACCOUNT STATEMENT OF T HE ASSESSEE BEARING NO. 6221 5716995 IN STATE BANK OF HYDERABAD, THE AO OBSERVED THAT THE ASSESSEE HAS MADE CASH DEPO SITS TO THE TUNE OF 2 ITA NO. 309 /HYD/201 8 NARENDER REDDY GANGIDI RS.21,00,000/ - ON VARIOUS DATES IN THE ACCOUNT. WHEN ASKED TO FURNISH THE EXPLANATION FOR THE CASH DEP OSITS OF RS.21 , 00,000/ - ALONG WITH SUPPORTING EVIDENCES FOR SOURCES THEREOF, THE ASSESSEE PRODUCED THE EXPLANATION VIDE HIS LETTER DT 14.03.20 1 6 STATING THAT CASH DEPOSIT IN THE BANK WERE MADE OUT OF THE MONIES THAT WERE EARNED ABROAD WHICH HAVE BEEN BROUGHT TO INDIA D UR ING HIS VISIT. FURTHER T HE ASSESSEE HIMSELF ADMITTED THAT HE DID NOT MAINTAIN THE COPIES OF THE DOCUMENTS THAT ARE GIVEN BY THE AUTHORIZED AGENTS WHO CONVERT FOREIGN CURRENCY TO RUPEES. FURTHER, THE ASSESSEE OFFERED TO PAY A SUM OF RS. 4,20,000/ - BEING 20% OF THE GROSS CASH DEPOSITS. THE EXPLANATION AND OFFER OF THE ASSESSEE TO PAY A SUM OF RS. 4,20,000/ - BEING 20% OF THE GROSS DEPOSITS, WAS NOT FOUND FAVOUR WITH THE AO ON THE GROUND THAT THERE WAS NO CO RR OBORATIVE EVIDENCE OF THE SAME AND HENCE, THE C ASH DEPOSITS TO THE TUNE OF RS.2 1 ,00,000 / - WA S TREATED AS UNEXPLAINED CREDITS AND ACCORDINGLY THE SAME WA S BROUGHT TO TAX IN THE HANDS OF THE ASS ESSEE. 3. WHEN THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), THE CIT(A) CONFIRMED THE ADDITION MADE BY T HE AO BY OBSERVING THAT NO EVIDENCE HAS BEEN PRODUCED TO ESTABLISH A CLEAR LINKAGE BETWEEN THE MONEY EARNED ABROAD OR BROUGHT IN AND THE CASH DEPOSITS MADE IN THE BANK ACCOUNT, THE SOURCE FOR CASH DEPOSITS REMAIN UNEXPLAINED. 4. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL. 1. THE ORDER OF THE CIT A IS ERRONEOUS AND NOT BASED ON THE FACTS OF THE CASE. 2. THE CIT - A HAS IGNORED THE FACT THAT THERE CANNOT BE ANY CASE WHERE A PERSON MAKES HUND RED PERCENT OR MORE PROFIT EVEN IF THE ENTIRE SUM OF RS 21,00,000/ - IS TREATED AS INCOME AND HENCE THE LEARNED ITO SHOULD HAVE ACCEPTED THE OFFER MADE BY THE ASSESSEE BEING 20% OF THE CASH DEPOSITED INTO BANK AS INCOME THAT IS TO SAY RS 420000/ - 3. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 3 ITA NO. 309 /HYD/201 8 NARENDER REDDY GANGIDI 5. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WHEN THE AO ASKED THE ASSESSEE TO EXPLAIN THE CASH DEPOSITS OF RS. 21 LAKHS, THE ASSESSEE STATED THAT THE SOURCE FOR CAS H DEPOSITS WAS THE MONEY THAT WAS EARNED ABROAD WHICH WAS BROUGHT TO INDIA DURING HIS VISIT. IN THIS CONNECTION, HE FILED ACKNOWLEDGMENT OF INCOME TAX RETURNS FROM 2012 TO 2017 FROM THE INTERNAL REVENUE SERVICE, UNITED STATES DEPARTMENT OF THE TREASURY, WH ICH SHOW THAT THE EXPLANATION GIVEN BY THE ASSESSEE IS PROPER AND GENUINE . EVEN TO AVOID LITIGATION, THE ASSESSEE OFFERED TO PAY 20% OF GROSS DEPOSITS. THE ASSESSEE HAS PROVED THAT HE IS NRI AND REVENUE HAS NOT BROUGHT ON RECORD THAT ASSESSEE HAS ANY SOURC E OF INCOME IN INDIA. AFTER CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE SET ASIDE THE ORDER OF CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION MADE ON ACCOUNT OF DEPOSITS MADE IN BANK AND ACCORDINGLY, ASSESSEE OFFERS TO PAY TAX @ 20% AS I NCOME ON DEPOSIT S MADE . EVEN ANY INCOME EARNED IN INDIA WILL FETCH SIMILAR INCOME. THEREFORE, AO IS DIRECTED ACCORDINGLY. HENCE, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER , 2018. SD/ - SD/ - ( P. MADHAVI DEVI ) (S . RIFAUR RAHMAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 10 TH OCTOBER , 2 018. KV COPY TO: - 1) SHRI NARENDER REDDY GANGIDI, C/O N. VENKATRAM CA 1 - 10 - 63/16, CHIKOTI GARDENS, BEGUMPET, HYDERABAD 500 016 2) ITO (INTERNATIONAL TAXATION) 1, AYAKAR BHAVAN, HYDERABAD - 04 3) CIT(A) 10, HYDERABAD. 4) CIT (T & TP) , HYD . 5 ) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6 ) GUARD FILE