Sri Dhanekula Venkateswara Rao, Vijayawada V. The ITO, Vijayawada

ITA 355/VIZ/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3798 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 25-07-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Gift; Peak credit; Corroborative evidences; Set aside
• Section: 54F; 133A; 40(a)(ia); 69; 148; 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER ./ I.T.A.NO. 376 /VIZ/201 6 ( / ASSESSMENT YEAR:20 07 - 08 ) ./ I.T.A.NO. 377 /VIZ/201 6 ( / ASSESSMENT YEAR:20 08 - 09 ) ./ I.T.A.NO. 378 /VIZ/201 6 ( / ASSESSMENT YEAR:20 09 - 10 ) ./ I.T.A.NO. 379 /VIZ/201 6 ( / ASSESSMENT YEAR:20 10 - 11 ) THE INCOME TAX OFFICER WARD - 1(3 ) VI JAYAWADA VS. SRI DHANEKULA VENKATESWARA RAO, D.NO.6 - 67, DEVINENIVARI STREET, NEAR POST OFFICE GOLLAPUDI, VIJAYAWADA [PAN : A TXPD2306G ] ( / APPELLANT) ( / RESPONDENT) ./ I.T.A.NO. 354 /VIZ/201 6 ( / ASSESSMENT YEAR:20 07 - 08 ) ./ I.T.A.NO. 355 /VIZ/201 6 ( / ASSESSMENT YEAR:20 08 - 09 ) ./ I.T.A.NO. 356 /VIZ/201 6 ( / ASSESSMENT YEAR:20 09 - 10 ) SRI DHANEKULA VENKATESWARA RAO D.NO.6 - 67, DEVINENIVARI STREET NEAR POST OFFICE GOLLAPUDI, VIJAYAWADA [PAN : A TXPD2306G ] VS. THE INCOME TAX OFFICER WARD - 1 (2) VI JAYAWADA ( / APPELLANT) ( / RESPONDENT) / REVENUE BY / ASSESSEE BY : : SHRI M. K.SETHI , DR SHRI C SUBRA H MANYAM, AR / DATE OF HEARING : 05.10.2017 / DATE OF PRONOUNCEMENT : 27 .10 .2017 2 ITA NO S . 35 4 - 356 /VIZ/201 6 AND ITA NOS.376 - 379/VIZ/2016 SRI DHANEKULA VENKATESWARA RAO , V IJAYAWADA / O R D E R PER BENCH: ITA 376 - 378 /VIZ/2016 1. THESE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)], VIJAYAWADA VIDE ITA NOS. 79 , 8 1 , 78 & 8 0 /CIT(A)/VJA/2014 - 15 DATED 31 . 03 .2016 FOR THE A.YS. 200 8 - 0 9 , 200 7 - 0 8 , 2009 - 10 AND 2010 - 11 . SINCE, THE COMMON GROUNDS ARE INVOLVED, ALL THE APPEALS ARE CLUBBED HEARD TOGETHER AND DISPOSED OFF IN COMMON ORDER AS UNDER. 2 . A SURVEY U/S 133A WAS CONDUCTED IN THE CASE OF M/S VASUDHA SHELTERS, VIJAYAWADA AND DURING THE COURSE OF SURVEY IT WAS FOUND THAT M/S VASUDHA SHELTERS HAD ENTERED INTO DEVELOPMENT AGREEMENT WITH DHANEKULA VENKATESWARA RAO AND OTHERS (LAND OWNERS ). HENCE T HE ASSESSING OFFICER CONDUCTED SURVEY U/S 133A IN THE CASE OF SRI DHANEKULA VENKATESWARA RAO, FATHER OF THE ASSESSEE ON 23.02.2010 AND DURING THE COURSE OF SURVEY, LOOSE SHEETS, DOCUMENTS, BANK STATEMENTS EVIDENCING THE CASH DEPOSITS WERE FOUND AND IMPOUNDED U/S 133A OF INCOME TAX ACT. THE ASSESSEE HA S SAVINGS BANK ACCOUNT IN STATE BANK OF INDIA BY 30011766785 3 ITA NO S . 35 4 - 356 /VIZ/201 6 AND ITA NOS.376 - 379/VIZ/2016 SRI DHANEKULA VENKATESWARA RAO , V IJAYAWADA AND ANDHRA BANK, SAVINGS ACCOUNT NO. 105710025031112 AND FOUND CASH DEPOSITS MADE FOR THE ASSESSMENT YEAR 2006 - 07 TO 2010 - 11 AS UNDER : AS ST.YEAR AMOUNT 200 7 - 0 8 19,56,700 2008 - 09 69,47,000 2009 - 10 67,29, 000 2010 - 11 44,70,000 3 . THE ASSESSING OFFICER COMPLETED THE ASSESSMENT HOLDING THAT THE ENTIRE CASH DEPOSITS AS UNEXPLAINED INCOME AND ACCORDINGLY BROUGHT TO TAX. THE ASSESSEE WENT ON APPEAL BEFORE THE CIT (A) AND THE LD.CIT(A) APPLIED THE PEAK CREDIT THEORY AND CONFIRMED THE ADDITION OF RS. 6 , 7 5,000/ - FOR THE A.Y. 200 7 - 0 8 , RS.5,05,000/ - FOR THE A.Y.2009 - 10 AND THE GIFTS OF RS.5,00,000/ - FOR THE A.Y. 2008 - 09 AND DELETED THE REMAINING ADDITION S . AGGRIEVED BY THE ORDER OF THE L D.CIT(A), THE REVENUE IS IN APPEAL BEFORE US . 4 . APPEARING FOR THE REVENUE, LD.DR ARGUED THAT THE ASSESSEE HAS MADE HUGE CASH DEPOSITS IN THE BANK ACCOUNT AND THE LD.CIT(A) CONFIRMED THE ADDITION OF RS.6,75,000/ - IN THE ASSESSMENT YEAR 2007 - 08 AND RS.5,05,000/ - FOR A.Y.2009 - 10 BY APPLYING PEAK CREDIT AND THE GIFT S OF RS.5,00,000 IN A.Y. 2008 - 09 AND DELETED THE REMAINING ADDITION EVEN THOUGH THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE WITH REGARD TO THE BALANCE AMOUNT OF DEPOSITS . THOUGH THE ASSESSEE HAS MADE HUGE CASH 4 ITA NO S . 35 4 - 356 /VIZ/201 6 AND ITA NOS.376 - 379/VIZ/2016 SRI DHANEKULA VENKATESWARA RAO , V IJAYAWADA DEPOSITS FOR WHICH THE SOURCE WAS NOT EXPLAINED, THE CIT(A) DELETED THE ADDITION APPLYING PEAK CREDIT THEORY WHICH IS NOT CORRECT. THE ASSESSING OFFICER HAS EXAMINED THE SUBMISSIONS OF T HE ASSESSEE AND SINCE THE ASSESSEE FAILED TO EXPLAIN THE NATURE AND SOURCE OF EACH RECEIPT, THE ASSESSING OFFICER MADE THE ADDITION U/S 69 OF THE I.T.ACT. LD.DR ARGUED THAT CLOSE SCRUTINY OF THE BANK ACCOUNT OF THE ASSESSEE REVEALS THAT THE ASSESSEE HAS W ITHDRAWN THE AMOUNTS AFTER SUFFICIENT GAP OF TIME AND DURING THE INTERVENING PERIOD, THE ASSESSEE HAS WITHDRAWN THE SMALL AMOUNTS ALSO WHICH INDICATE THAT THERE WAS NO CASH AVAILABLE WITH THE ASSESSEE OUT OF THE WITHDRAWALS TO MAKE THE REDEPOSIT . THE COND UCT OF ACCOUNT CLEARLY SHOWS THAT THE ASSESSEE HAS MADE USE OF THE WITHDRAWN AMOUNT AND THEN DEPOSITED THE CASH FOR WHICH SOURCE WAS NOT EXPLAINED. THOUGH THE ASSESSEE HAS CLAIMED THAT THE ASSESSEE WAS IN THE BUSINESS, THE NATURE OF BUSINESS WAS NOT EXPLA INED BY THE ASSESSEE AND NEVER FILED THE RETURNS OF INCOME. THE RETURNS OF INCOME WERE FILED ONLY AFTER THE ISSUE OF NOTICES U/S 148. THE HUGE CREDITS AND DEBITS OF THE CASH DEPOSITS SHOWED THAT THE ASSESSEE IS IN THE UNKNOWN BUSINESS. THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE TO SHOW THAT IT HAS CARRIED ON BUSINESS. THOUGH THE LD.CIT(A) APPLIED PEAK CREDIT THEORY, THE LD.CIT(A) HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSESSING OFFICER AT LEAST TO VERIFY THE TRUE NATURE OF THE RECEIPTS BEFORE APPLYING THE PEAK CREDIT 5 ITA NO S . 35 4 - 356 /VIZ/201 6 AND ITA NOS.376 - 379/VIZ/2016 SRI DHANEKULA VENKATESWARA RAO , V IJAYAWADA THEORY. FURTHER, THE ASSESSEE HIMSELF HAS ADMITTED DURING THE ASSESSMENT PROCEEDINGS TO ESTIMATE THE INCOME @ 5% TO 8% ON THE RECEIPTS WHICH THE LD.CIT(A) DID NOT CONSIDER DUR ING THE APPELLATE PROCEEDINGS. THEREFORE, LD.DR ARGUED THAT THE AGGREGATE OF DEPOSITS SHOULD BE CONFIRMED AND THE CIT(A)S ORDER IS TO BE SET ASIDE AND THE ASSESSING OFFICERS ORDER TO BE RESTORED. 5 . ON THE OTHER HAND, LD.AR ARGUED THAT THE ASSESSEE IS IN REAL ESTATE ACTIVITY EARNING COMMISSION INCOME TOWARDS SERVICES RENDERED TO THE CUSTOMERS. THE ASSESSEE HAS RECEIVED THE ADVANCE FOR PURCHASE OF LANDED PROPERTY ON BEHALF OF ITS CUSTOMERS WHICH WAS P AID TO THE VENDORS. THE CREDITS AND DEBITS IN THE SAVINGS BANK ACCOUNT RELATED TO THE REAL ESTATE BUSINESS. THEREFORE, LD.AR ARGUED THAT NO PRUDENT PERSON WILL MAKE HUGE WITHDRAWALS AND DEPOSITS WITHIN THE SHORT PERIOD UNLESS HE IS ENGAGED IN THE BUSINES S ACTIVITY. THEREFORE, LD.AR ARGUED THAT THE LD.CIT(A) HAS RIGHTLY APPLIED THE PEAK CREDIT THEORY WHICH IS IN CONSONANCE WITH THE JUDICIAL PR E CED ENT S AND THE SAME TO BE UPHELD. 6 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED ON RECORD. DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR, THE 6 ITA NO S . 35 4 - 356 /VIZ/201 6 AND ITA NOS.376 - 379/VIZ/2016 SRI DHANEKULA VENKATESWARA RAO , V IJAYAWADA ASSESSEE HAS MADE THE CASH DEPOSITS IN THE SAVINGS BANK ACCOUNT S AS PER THE DETAILS GIVEN BELOW ASST.YEAR AMOUNT 2007 - 08 19,56,700/ - 2008 - 09 69,47,000/ - 2009 - 10 67,39,000/ - 2010 - 11 44,70,000/ - 7 . THE ASSESSEE ALSO HAS MADE CASH WITHDRAWALS OUT OF THE ABOVE DEPOSITS. HOWEVER, THE ASSESSEE HAS NOT FURNISHED THE RETURN OF INCOME , THE DETAILS OF BUSINESS CARRIED IN THE EARLIER YEARS AND NO EVIDENCE WAS FURNISHED BY THE ASSESSEE WITH REGARD TO THE BUSINESS CARRIED ON BY THE ASSESSEE. DURING THE SURVEY PROCEEDINGS ALSO, THE DEPARTMENT COULD NOT LAY THEIR HANDS ON THE BUSINESS ACTIVITY CARRIED ON BY THE ASSESSEE. IN THESE FACTS AND CIRCUMSTANCES, THE TRUE AND CORRECT NATURE OF THE RECEIPTS WAS NOT ASCERTAINED. THOUGH THE ASSESSEE STATED THAT IT HAD RECEIVED THE ADVANCES FROM THE BUYERS OF THE LANDS AND PAID TO THE VENDORS, THE NAMES AND ADDRESSES OF THE BUYERS AND V ENDORS WAS NOT FURNISHED BY THE ASSESSEE. IN THE ABSENCE OF NON FURNISHING THE NAMES AND ADDRESSES OF THE BUYERS AND VENDORS, THE ASSESSEE HAS BECOME AN INSTRUMENT TO EVADE THE INCOME TAX BY THE BUYERS AND VENDORS OF THE PROPERTIES. THOUGH THE ASSESSEES SUBMISSION THAT THE ASSESSEE HAD RECEIVED THE AMOUNTS FROM THE BUYERS 7 ITA NO S . 35 4 - 356 /VIZ/201 6 AND ITA NOS.376 - 379/VIZ/2016 SRI DHANEKULA VENKATESWARA RAO , V IJAYAWADA AND VENDORS IS ACCEPTED , IT IS NOT CLEAR WHETHER THE ASSESSEE HAS PURCHASED THE PROPERTY AND SOLD OR MERELY ACTED AS AN AGENT OR THE ASSESSEE HAS CARRIED ON HAWALA ACTIVITY FOR TRANSFER OF FUNDS FROM ONE HAND TO ANOTHER. IF IT IS ACCEPTED THAT THE ASSESSEE IS CARRYING ON BUSINESS THE APPLICABILITY OF THE PROVISIONS OF SECTION 4 0 A (3) AND 40(A)(IA) ALSO REQUIRED TO BE EXAMINED FOR COMPUTING THE INCOME WHICH WAS NOT EXAMINED BY THE ASSESSIN G OFFICER. THOUGH THE ASSESSING OFFICER MADE THE ADDITION OF CASH DEPOSITS MADE IN THE BANK ACCOUNT WHILE APPLYING THE PEAK CREDIT THEORY, THE LD.CIT(A) HAS NEITHER CONDUCTED THE NECESSARY ENQUIRY NOR GIVEN ANY OPPORTUNITY TO THE ASSESSING OFFICER TO FIND OUT THE TRUE AND CORRECT NATURE OF THE RECEIPTS. THE CONDUCT OF THE ACCOUNT SHOWS THAT WITHDRAWALS W ERE MADE AFTER SUBSTANTIAL GAP OF CREDIT AND IN BETWEEN THE ASSESSEE HAS WITHDRAWN SMALL AMOUNTS ALSO ON CERTAIN OCCASIONS. THE ACCOUNT SHOWS THAT THE AMO UNTS WITHDRAWN ARE NOT AVAILABLE TO THE ASSESSEE FOR REDEPOSIT. THE ASSESSEE HAS WITHDRAWN THE AMOUNTS IN QUICK SUCCESSION WHICH SHOWS THAT THE AMOUNTS ARE NOT AVAILABLE TO THE ASSESSEE FOR MAKING ANY DEPOSITS FROM THE SAME WITHDRAWALS . THEREFORE, IT IS NECESSARY TO ASCERTAIN THE TRUE NATURE OF THE RECEIPTS, NAMES OF THE PERSONS FROM WHOM THE ADVANCES WERE RECEIVED AND NAMES AND ADDRESSES OF THE PERSONS TO WHOM THE ADVANCES WERE PAID. IN THE ABSENCE OF ANY SUCH INFORMATION, THE ENTIRE DEPOSITS 8 ITA NO S . 35 4 - 356 /VIZ/201 6 AND ITA NOS.376 - 379/VIZ/2016 SRI DHANEKULA VENKATESWARA RAO , V IJAYAWADA REQUIRED T O BE BROUGHT TO TAX SINCE THE ASSESSEE NEITHER ESTABLISHED THAT IT HAS CARRIED ON THE BUSINESS NOR ESTABLISHED THE SOURCE OF THE CREDIT. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DK GARG , 84 TAXMANN.COM 257 HELD THAT IN THE CASE OF ACCOMMODATION ENTRY PROVIDER IF THE ASSESSEE IS UNABLE TO EXPLAIN ALL SOURCES OF DEPOSITS AND CORRESPONDING PAYMENTS HE WOULD NOT BE ENTITLED TO BENEFIT OF PEAK CREDIT. IN THE ASSESSEES CASE, THE ASSESSEE HAS NEITHER ESTABLISHED THE FACT THAT HE IS CARRYING ON BUSINE SS AND THE SOURCES OF THE CREDIT. THOUGH THE ASSESSEE HAD OFFERED THE INCOME ON ESTIMATION BASIS RANGING FROM 5% TO 8% ON TURNOVER, THE LD.CIT(A) HAS NOT EXAMINED THE SAME AT THE TIME OF DISPOSING THE APPEAL. DURING THE APPEAL HEARING ALSO THE ASSESSEE COULD NOT FURNISH ANY DETAILS WITH REGARD TO THE SOURCES OF DEPOSIT AND THE DESTINATION OF PAYMENT. NO EVIDENCE WAS FILED BY THE ASSESSEE TO ESTABLISH THAT HE IS CARRYING ON THE BUSINESS. THEREFORE, WE REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO ASCERTAIN THE TRUE NATURE OF THE RECEIPTS AND PAYMENTS. THE AO IS DIRECTED TO OBTAIN THE INFORMATION WITH REGARD TO THE NAMES AND ADDRESSES OF THE PERSONS FROM WHOM THE ADVANCES WERE RECEIVED AND THE NAMES AND ADDRESS OF PERSONS TO WHOM THE PAYMENTS WERE MADE AND FIND OUT THE MODUS OPERANDI AND COMPUTE THE TAXABLE INCOME . ACCORDINGLY, APPEAL OF 9 ITA NO S . 35 4 - 356 /VIZ/201 6 AND ITA NOS.376 - 379/VIZ/2016 SRI DHANEKULA VENKATESWARA RAO , V IJAYAWADA THE REVENUE ON THIS ISSUE FOR THE ASSESSMENT YEAR 2007 - 08 TO 2010 - 11 IS ALLOWED FOR STATISTICAL PURPOSES. 8 . THE NEXT ISSUE OF REVENUE FOR THE ASSESSMENT YEAR 2009 - 10 IS THE ASSESSEES CLAIM OF DEDUCTION U/S 54F OF I.T.ACT. THE ASSESSEE CLAIMED DEDUCTION U/S 54F ON CAPITAL GAINS, WHICH WAS REJECTED BY THE A SSESSING OFFICER , S INCE THE ASSESSEE HAS GIVEN THE PROPERTY ON RENT TO NRI ACADEMY WHICH IS AN EDUCATIONAL ACADEMY. T HE PROPERTY WAS NOT USED FOR THE PURPOSE OF RESIDENTIAL, HENCE THE ASSESSING OFFICER VIEWED THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTI ON U/S 54F. ACCORDINGLY REJECTED THE CLAIM OF THE ASSESSEE U/S 54F OF I.T.ACT. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER , THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE. HENCE THE REVENUE IS IN APP EAL BEFORE US. 9 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED ON RECORD. AS PER THE DEVELOPMENT AGREEMENT, THE ASSESSEE HAS ACQUIRED THE RESIDENTIAL FLAT BUT GIVEN IT TO NRI ACADEM Y FOR RUNNING THE SCHOOL. THE ASSESSING OFFICER IS OF THE VIEW THAT THE ASSESSE E HAD ACQUIRED THE COMMERCIAL PROPERTY BUT NOT THE RESIDENTIAL PROPERTY AND USING IT FOR COMMERCIAL PURPOSE. IT IS NOT ASCERTAINABLE FROM THE INFORMATION WHETHER 10 ITA NO S . 35 4 - 356 /VIZ/201 6 AND ITA NOS.376 - 379/VIZ/2016 SRI DHANEKULA VENKATESWARA RAO , V IJAYAWADA THE FLAT IN QU ESTION WAS RESIDENTIAL OR NOT AND REQUIRE VERIFICATION AT THE LEVEL OF ASSESSING OFFICER . THEREFORE WE REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO MAKE FURTHER VERIFICATION S OF THE IMPUGNED PROPERTY AND GIVE FINDING WHETHER THE PROPERTY G IVEN FOR RENT TO THE SCHOOL IS RESIDENTIAL PROPERTY WITH ALL AMENITIES LIKE KITCHEN ETC.. OR NOT AND DECIDE THE ISSUE AFRESH ON MERITS. THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.354/VIZ/2016, A.Y.2007 - 08 1 0 . THE ASSESSEE HAS RAISED SIX GROUNDS IN THIS APPEAL AND HAS NOT PRESSED GROUND NOS.1.0, 1.1., 1.2, 1.4 AND 1.5 THEREFORE GROUND NO.1.0,1.1,1.2,1.4 AND 1.5 ARE DISMISSED AS NOT PRESSED EXCEPT GROUND NO.1.3. 1 1 . GROUND NO.1.3 IS RELATED TO OPENING CASH BALANCE. AS DISCUSSED EARLIER IN THIS ORDER THE ASSESSING OFFICER FOUND CASH DEPOSITS IN BANK ACCOUNTS AND THE ADDITION OF AGGREGATE DEPOSITS IN THE RESPECTIVE ASSESSMENT YEARS FOR 2007 - 08 TO 2010 - 11. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) CONFIRMED THE PEAK CREDITS INSTEAD OF AGGREGATE DEPOSITS. 11 ITA NO S . 35 4 - 356 /VIZ/201 6 AND ITA NOS.376 - 379/VIZ/2016 SRI DHANEKULA VENKATESWARA RAO , V IJAYAWADA 1 2 . AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL REQUESTING TO ALLOW THE OPENING CASH BALANCE AS ON 01.04.2005. ACCORDING TO THE LD.AR AS ON 01.04.2005, THERE WAS OPENING CASH BALANCE OF RS.12,10,500/ - WHICH SHOULD BE ALLOWED FROM THE PEAK CREDIT WORKED OUT BY THE LD.CIT(A). LD.CIT(A) REJECTED THE CLAIM OF THE ASSESSEE S INCE THE ASSESSEE FAILED TO FURNISH THE RETURN OF INCOME FOR THE EARLIER YEARS AND THERE WAS NO EVIDENCE TO SHOW THAT THE ASSESSEE HAS CARRIED ON THE BUSINESS. THE ASSESSEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNTS AND DID NOT FILE ANY REGULAR RETURN OF INCOM E TILL THE SURVEY WAS CONDUCTED AND NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE. IN THE ABSENCE OF ANY EVIDENCE TO ESTABLISH THE BUSINESS CARRIED ON BY THE ASSESSEE AND THE INCOME EARNED , THE LD.CIT(A) HELD THAT THE OPENING CASH BALANCE CLAIMED BY THE ASSE SSEE IS NOT ESTABLISHED AND CANNOT BE TREATED AS EXPLAINED. LD.CIT(A) RELIED ON THE JUDGEMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF C.PAKIRSAMY VS. ACIT(MAD) [315 ITR 293] AND DISMISSED THE APPEAL OF THE ASSESSEE. LD.CIT(A) HAS CONFIRMED THE ADDITI ON HOLDING THAT THE ASSESSEE DID NOT FILE THE RETURN OF INCOME AND FAILED TO FURNISH ANY EVIDENCE WITH REGARD TO THE OPENING CASH BALANCE ON REAL ESTATE BUSINESS AND DID NOT MAINTAIN THE BOOKS OF ACCOUNTS. 12 ITA NO S . 35 4 - 356 /VIZ/201 6 AND ITA NOS.376 - 379/VIZ/2016 SRI DHANEKULA VENKATESWARA RAO , V IJAYAWADA 1 3 . WE HAVE HEARD BOTH THE PARTIES AND PERU SED THE MATERIAL PLACED ON RECORD. THOUGH THE ASSESSEE STATED TO HAVE OPENING CASH BALANCE OF RS.12,10,500/ - THERE WAS NO EVIDENCE TO ESTABLISH CASH BALANCE AVAILABLE WITH THE ASSESSEE. AS RIGHTLY STATED BY THE CIT(A), THE ASSESSEE HAS NOT FURNISHED THE RETURN OF INCOME FOR THE EARLIER YEARS AND IN THE ABSENCE OF ANY EVIDENCE TO SHOW THAT THE CASH BALANCE WAS SUFFERED TO TAX THE SAME REQUIRED TO BE ASSESSED TO TAX. MERE CLAIM OF AVAILABILITY OF SUFFICIENT OPENING BALANCE WITHOUT SUPPORTING EVIDENCE IS N OT ACCEPTABLE. LD.CIT(A) RELIED ON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF SRI C.PAKIRISAMY VS. ACIT [315 ITR 293] AND CONFIRMED THE ADDITION. DURING THE APPEAL PROCEEDINGS BEFORE US ALSO, THE ASSESSEE HAS NOT PLACED ANY EVIDENCE TO SHOW THAT THERE WAS SUFFICIENT CASH BALANCE AVAILABLE WITH THE ASSESSEE. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A) AND THE SAME IS UPHELD. THE APPEAL OF THE ASSESSEE IS DISMISSED. ITA NO.355/VIZ/2016, A.Y.2008 - 09 1 4 . IN THIS APPEAL, GROUND NOS. 1.0 AND 1.2 ARE NOT PRESSED BY THE ASSESSEE THEREFORE GROUND NOS. 1.0 AND 1.2 ARE DISMISSED AS NOT PRESSED. 13 ITA NO S . 35 4 - 356 /VIZ/201 6 AND ITA NOS.376 - 379/VIZ/2016 SRI DHANEKULA VENKATESWARA RAO , V IJAYAWADA 1 5 . GROUND NOS. 1.1 IS RELATED TO THE ADDITION OF RS.2.5 LAKHS GIFTS EACH FROM ASSESSEES WIFE AND HIS BROTHER - IN - LAW. 1 6 . THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE IS HAVING SAVINGS BANK ACCOUNT IN ANDHRA BANK JAGGAIAHPET BRANCH A/C NO.25703100031112. IN THE SAVINGS BANK ACCOUNT THE ASSESSEE HAS MADE CASH DEPOSIT OF RS.5,01,000/ - . THE AS SESSEE HAD EXPLAINED THAT HE HAD RECEIVED THE GIFTS OF RS.2,50,000/ - EACH FROM SMT.DHANEKULA LAKSHMI AND SRI GUDE MOHAN RAO IN CASH BUT DID NOT PRODUCE BANK ACCOUNT STATEMENT OF THE DONORS TO THE ASSESSING OFFICER. HENCE, THE ASSESSING OFFICER MA DE THE ADDIT ION OF RS.1 5,00,000/ - DISBELIEVING THE GENUINENESS OF THE GIFTS. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER SINCE THE AS SESSEE FAILED TO ESTABLISH THE GENUINENESS OF THE GIFTS AND THE CAPACITY OF THE DONORS WITH SUPPORTING EVIDENCES. 17 . AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. DURING THE APPEAL HEARING BEFORE US ALSO, THE ASSESSEE D ID NOT PRODUCE ANY EVIDENCE OR ESTABLISH THE GENUINENESS OF THE GIFTS. IT IS FOR THE 14 ITA NO S . 35 4 - 356 /VIZ/201 6 AND ITA NOS.376 - 379/VIZ/2016 SRI DHANEKULA VENKATESWARA RAO , V IJAYAWADA ASSESSEE TO PROVE THE GENUINENESS AND CREDIT WORTHINESS AND CAPACITY OF THE DONORS. IN THE CASE OF THE ASSESSEE, THE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE TO ESTABLISH THE GENUINENESS OF THE GIFTS. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A) AND THE SAME IS UPHELD. THE APPEAL OF THE ASSESSEE ON THIS GROUND IS DISMISSED. ITA NO.356/VIZ/2016, A.Y. 2009 - 10 1 8 . THE ONLY GROUND PRESSED BY THE LD.AR IN THIS CASE IS RELATING TO CREDIT FOR OPENIONG CASH BALANCE OUT OF THE PEAK CREDIT CONFIRMED BY THE LD.CIT(A) AMOUNTING TO RS.5,05,000/ - . 19 . IN THIS CASE, WHILE DECIDING APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 200 7 - 0 8 IN APPEAL N O. 3 54 /VIZ/2016 WE HAVE CONFIRMED THE ORDER OF THE LD.CIT(A) AND DISMISSED THE APPEAL OF THE ASSESSEE. SINCE THE FACTS OF THE CASE ARE THE SAME ON THE SAME REASONING GIVEN IN APPEAL NO.354/VIZ/2016, THE APPEAL OF THE ASSESSEE IS DISMISSED AND THE ORDER OF THE L D.CIT(A) IS UPHELD. 2 0 . IN THE RESULT APPEAL S OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSE AND THE APPEAL S OF THE ASSESSEE ARE DISMISSED . 15 ITA NO S . 35 4 - 356 /VIZ/201 6 AND ITA NOS.376 - 379/VIZ/2016 SRI DHANEKULA VENKATESWARA RAO , V IJAYAWADA THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 27 TH OCT 2017. SD/ - SD/ - ( . . ) ( . ) ( D.S. SUNDER SINGH ) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIALMEMBER /VISAKHAPATNAM /DATED : 27 .10.2017 L. RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE A SSESSEE - SRI DHANEKULA VENKATESWARA RAO, D.NO.6 - 67, DEVINENIVARI STREET, NEAR POST OFFICE, GOLLAPUDI, VIJAYAWADA 2 . / THE RE VENUE THE INCOME TAX OFFICER , WARD - 1 (2) & 1(3), VI JAYAWADA 3 . THE PR. COMMISSIONER OF INCOME TAX, VIJAYAWADA 4. THE COMMISSIONER OF INCOME TAX (APPEALS) - , VIJAYAWADA 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY// SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM