Hanmaiya Naik Pemawath, Hyd, Hyderabad V. ITO, Ward-13(3), Hyd, Hyderabad

ITA 362/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2642 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 22-11-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 22-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: L R AMJI RAO
• Assessee Lawyers: B SHANTI KUMAR
• Keywords: Unexplained cash credit; Additional evidence; Condonation of delay
• Section: 143(3)

Judgement Text

ITA NO 362 OF 2016 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A (SMC) BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.362/HYD/2016 (ASSESSMENT YEAR: 2011-12) SRI HANMIYA NAIK PEMAWATH HYDERABAD PAN: ACUPP 7201 N VS INCOME TAX OFFICER WARD 13(3) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI B. SHANTI KUMAR FOR REVENUE : SHRI L. RAMJI RAO, DR O R D E R THIS IS ASSESSEES APPEAL FOR THE A.Y 2011-12 AGAIN ST THE ORDER OF THE CIT (A)-4, HYDERABAD, DATED 9.11.2 015. 2. AT THE OUTSET, IT IS SEEN THAT THERE IS A DELAY OF 60 DAYS IN FILING OF THE APPEAL BEFORE THE TRIBUNAL. THE AS SESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY ALONG WITH AN AFFIDAVIT STATING THAT THE ASSESSEE HAS NOT RECEIVED THE APPE LLATE ORDER AND THE ASSESSEES COUNSEL WHO HAD RECEIVED THE SAME HA D NOT INTIMATED TO THE ASSESSEE AND IT WAS ONLY AFTER THE RECEIPT OF THE SHOW CAUSE NOTICE FOR PENALTY THAT THE ASSESSEE HAS CONTACTED HIS AUDITOR AND OBTAINED THE APPELLATE ORDER AND THEREF ORE, THE DELAY OF 2 MONTHS IN FILING OF THE APPEAL. 3. THE LEARNED DR OPPOSED THE CONDONATION OF THE DE LAY. DATE OF HEARING : 21.08.2017 DATE OF PRONOUNCEMENT : 30.08.2017 ITA NO 362 OF 2016 PAGE 2 OF 6 4. HAVING REGARD TO THE CONTENTIONS IN THE AFFIDAVI T AND ALSO HAVING NOTICED THAT IN FORM NO.34 THE ASSESSEE HAS GIVEN HIS OFFICIAL ADDRESS AND SINCE THE ASSESSEE HAS RETIRED BEFORE THE COMPLETION OF THE APPELLATE PROCEEDINGS AND THE APP ELLATE ORDER WOULD HAVE BEEN SENT TO THE OFFICE ADDRESS, THE ASS ESSEE COULD NOT HAVE RECEIVED THE COPY OF THE ORDER. THEREFORE, I A M SATISFIED THAT THE ASSESSEE HAS SHOWN SUFFICIENT CAUSE FOR THE DEL AY IN FILING OF THE APPEAL BEFORE US. I THEREFORE, CONDONE THE DELA Y AND THEREFORE, PROCEED TO DISPOSE OF THE APPEAL. 5. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL: 1. THE CIT (A) ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.34,00,000 MADE BY THE AO. 2. THE CIT (A) IS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS.34,00,000 MADE BY THE AO BY TREATING CASH DEPOSITS MADE INTO HIS BANK A/C AS UNEXPLAINED CREDITS. 3. THE CIT (A) OUGHT TO HAVE ACCEPTED ASSESSEES EXPLANATION SUBMITTED BOTH BEFORE THE AO AND DURING APPELLATE PROCEEDING FOR THE SOURCE OF DEPOSIT OF RS.34,00,000 BEING ADVANCE RECEIVED TOWARDS SALE OF AGRICULTURAL LANDS . 6. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL AND A RETIRED EMPLOYEE, FILED HIS RETURN OF INCOME FOR THE A.Y 2011-12 ON 27.7.2014 ADMITTING AN INCOME OF RS.8,45,301. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE AO CALLED FOR THE STATEMENT OF THE BAN K A/CS MAINTAINED BY THE ASSESSEE. ON VERIFICATION OF THE BANK ITA NO 362 OF 2016 PAGE 3 OF 6 STATEMENTS OF THE ASSESSEE WITH THE STATE BANK OF H YDERABAD, ADARSH NAGAR, HYDERABAD, THE AO FOUND A MAJOR CASH DEPOSIT OF RS.34.00 LAKHS. THE ASSESSEE WAS, THEREFORE, ASKED TO EXPLAIN THE SOURCE FOR THE CASH DEPOSIT. IN RESPONSE TO THE SAM E, THE ASSESSEE FILED A LETTER DATED 27.03.2014 STATING THAT THE SO URCE FOR THE DEPOSIT IS THE ADVANCE RECEIVED TOWARDS THE SALE OF HIS AGRICULTURAL LAND. TO THAT EFFECT, THE ASSESSEE ALSO FILED CONFI RMATION LETTER AND COPY OF THE SALE AGREEMENT. AFTER VERIFICATION OF T HE INFORMATION FURNISHED BY THE ASSESSEE, THE AO ASKED THE ASSESSE E TO PRODUCE THE COPY OF THE SALE DEED. HOWEVER, THE ASSESSEE SU BMITTED THAT SINCE THE VENDEES COULD NOT FULFILL THE TERMS & CON DITIONS AS PER THE AGREEMENT OF SALE, THE SALE OF AGRICULTURAL LAN D STOOD CANCELLED AND THEREFORE, HE CANNOT PRODUCE THE SALE DEED AND ALSO THE BANK STATEMENT AND THE INCOME CERTIFICATE OF THE VENDEE. THE AO WAS, HOWEVER, NOT CONVINCED WITH THE ASSESSEES REPLY AN D THEREFORE, TREATED THE SUM OF RS.34.00 LAKHS AS UNEXPLAINED CA SH CREDIT AND BROUGHT IT TO TAX. AGGRIEVED, THE ASSESSEE PREFERRE D AN APPEAL BEFORE THE CIT (A) REITERATING THE SUBMISSIONS MADE BEFORE THE AO. THE CIT (A) CONSIDERED THE FACT THAT THE AGREEMENT OF SALE WAS ENTERED INTO ON 13.10.2010 AND IN ACCORDANCE WITH T HE SAID SALE AGREEMENT, THE ASSESSEE WAS SUPPOSED TO RECEIVE AN AMOUNT OF ONLY RS.2.00 LAKHS AS ON THAT DATE, WHEREAS A SUM O F RS.34.00 LAKHS WAS DEPOSITED ON 18.10.2010. THEREFORE, ACCOR DING TO HER, THE ASSESSEES CONTENTION THAT THE SOURCE FOR THE D EPOSIT IS THE ADVANCE RECEIVED ON ENTERING INTO THE AGREEMENT OF SALE IS NOT CORRECT. FURTHER SHE ALSO CONSIDERED THE ASSESSEES CONTENTION THAT THE AGREEMENT OF SALE WAS CANCELLED AND OBSERV ED THAT THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE OF RETURNING THE SUM OF RS.34.00 LAKHS AND THEREFORE, HELD THAT THE SAID SU M SINCE HAS ITA NO 362 OF 2016 PAGE 4 OF 6 NOT BEEN RETURNED, IS TO BE BROUGHT TO TAX. ACCORDI NGLY, THE CIT (A) CONFIRMED THE ADDITIONS MADE BY THE AO. THE ASSESSE E IS IN SECOND APPEAL BEFORE US. 7. THE LEARNED COUNSEL FOR THE ASSESSEE, WHILE REIT ERATING THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE AUT HORITIES BELOW, HAS ALSO FILED THE ADDITIONAL EVIDENCE VIDE LETTERS DATED 16.8.2016 AND 18.8.2017 RESPECTIVELY. IT IS SUBMITT ED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THESE DOCUMEN TS ARE IN EVIDENCE OF THE FACT THAT THE ASSESSEE OWNS AGRICUL TURAL LAND AND THAT THE ASSESSEE HAD INITIALLY ENTERED INTO AN AGR EEMENT FOR SALE WHICH WAS SUBSEQUENTLY CANCELLED AND THE ASSESSEE L ATER ON SOLD THE VERY SAME LAND TO THE OTHER PARTIES. THEREFORE, THE CONTENTION OF THE ASSESSEE THAT HE HAS RECEIVED THE ADVANCE TO WARDS THE SALE OF LAND SHOULD HAVE BEEN ACCEPTED. HE FURTHER SUBMI TTED THAT THOUGH, IN THE AGREEMENT OF SALE, IT WAS MENTIONED THAT THE ASSESSEE WAS TO RECEIVE ONLY RS.2.00 LAKHS AS ON TH E DATE OF AGREEMENT, IN FACT, THE ASSESSEE HAS RECEIVED RS.32 .00 LAKHS AND THE BALANCE ONLY WAS TO BE RECEIVED LATER ON. HE HA S ALSO DRAWN OUR ATTENTION TO THE PASS BOOKS OF THE ASSESSEE TO DEMONSTRATE THAT THE ASSESSEE HAS SUBSEQUENTLY RETURNED THE AMO UNTS TO THE VENDEES BY WITHDRAWING THE CASH FROM HIS BANK A/C. THEREFORE, HE PRAYED THAT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BE ADMITTED AND REMANDED TO THE FILE OF THE AO FOR REC ONSIDERATION OF THE ISSUE ON MERITS. 8. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THA T THE ASSESSEE HAS NOT FILED ANY EVIDENCE BEFORE THE AUTH ORITIES BELOW ITA NO 362 OF 2016 PAGE 5 OF 6 AND EVEN IF THE ADDITIONAL EVIDENCE NOW FILED IS TO BE TAKEN INTO CONSIDERATION, AS PER THE SALE AGREEMENT DATED 13.1 0.2010, THE SALE CONSIDERATION WAS MUCH MORE THAN THE SUBSEQUEN T SALE DEED DATED 7.12.2010 FOR THE VERY SAME LAND WHICH IS NOT BELIEVABLE. THEREFORE, ACCORDING TO HIM, THE CONTENTIONS OF THE ASSESSEE ARE NOT ACCEPTABLE. 9. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, I FIND THAT THERE WAS A DEPOSIT OF RS.34 .00 LAKHS ON 18.10.2010 WHICH THE ASSESSEE HAS EXPLAINED TO BE F ROM THE ADVANCE RECEIVED ON ENTERING INTO THE AGREEMENT OF SALE FOR SALE OF HIS AGRICULTURAL LAND. EVEN AS PER THE AGREEMENT OF SALE, THE ASSESSEE HAS RECEIVED ONLY RS.2.00 LAKHS AS ON THE DATE OF THE AGREEMENT AND WAS SUPPOSED TO RECEIVE THE BALANCE I N VARIOUS INSTALLMENTS MENTIONED THEREIN. THIS AGREEMENT OF S ALE IS NOT A REGISTERED DOCUMENT AND FURTHER THE ASSESSEE HAS NO T FILED ANY INDEPENDENT EVIDENCE TO PROVE THAT HE HAS RECEIVED RS.34.00 LAKHS BY 18.10.2010. EVEN IN THE CANCELLATION DEED, THOUGH IT IS MENTIONED THAT THE ASSESSEE HAS RECEIVED AN ADVANCE AMOUNT OF RS.34.00 LAKHS AS PER THE AGREEMENT OF SALE, THE DA TES OF THE PAYMENT OR THE MODE OF PAYMENT IS NOT MENTIONED THE REIN. ONE OF THE REASONS FOR DISBELIEVING THE ASSESSEES CONTENT ION WAS THAT THE ASSESSEE HAS NOT PROVED THAT HE HAS RETURNED THE SA ID ADVANCE TO THE VENDEE. EVEN THE ADDITIONAL EVIDENCE FILED BEFO RE ME ONLY SHOWS THAT HE HAS WITHDRAWN CERTAIN AMOUNTS BUT THE RE IS NO EVIDENCE THAT THESE WITHDRAWN AMOUNTS HAVE BEEN PAI D TO THE PARTIES TO THE AGREEMENT OF SALE EXCEPT FOR THE SUM OF RS.2.25 LAKHS PAID TO SMT. J. SHEELA BHAI VIDE CHEQUE DATED 12.4.2012. THE ASSESSEE HAS ALSO NOT FILED ANY CONFIRMATION LE TTERS FROM THE ITA NO 362 OF 2016 PAGE 6 OF 6 PARTIES TO STATE THAT THEY HAVE RECEIVED THE CONSID ERATION PAID BY THEM ON CANCELLATION OF THE AGREEMENT OF SALE. IN V IEW OF THE SAME, I AM NOT READY TO ACCEPT THE ASSESSEES CONTENTION OF THE ADVANCE RECEIVED FOR AGREEMENT OF SALE TO BE THE SOURCE FOR THE ENTIRE DEPOSIT OF RS.34.00 LAKHS. HOWEVER, SINCE THE AGREE MENT OF SALE IS NOT DENIED AND THE ASSESSEE HAS ADMITTEDLY RECEIVED RS.2.00 LAKHS VIDE AGREEMENT OF SALE, I AM INCLINED TO ACCE PT THE SOURCE TO THE EXTENT OF RS.2.00 LAKHS AND THE BALANCE OF RS.3 2.00 LAKHS IS TO BE TREATED AS THE INCOME OF THE ASSESSEE FROM UN EXPLAINED SOURCES. THEREFORE, I CONFIRM THE ADDITION TO THE E XTENT OF RS.32.00 LAKHS AND THE ASSESSEE GETS RELIEF TO THE EXTENT OF RS.2.00 LAKHS ONLY. 10. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH AUGUST, 2017. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 30 TH AUGUST, 2017. VINODAN/SPS COPY TO: 1 SHRI B. SHANTHI KUMAR, ADVOCATE, 111 TARAMANDAL C OMPLEX, 5-9- 13, SAIFABAD, HYDERABAD 2 INCOME TAX OFFICER WARD 13(3) AAYAKAR BHAVAN, BAS HEERBAGH, HYDERABAD 500004 3 CIT (A)-4 HYDERABAD 4 CIT 4 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER