The ITO, Vijayawada V. Sri Dhanekula Chowdary, Vijayawada

ITA 381/VIZ/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6561 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 25-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M K SETHI
• Keywords: Peak credit; Corroborative evidences
• Section: 54F; 133A; 12; 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. 380 /VIZ/201 6 ( / ASSESSMENT YEAR:20 06 - 07 ) ./ I.T.A.NO. 381 /VIZ/201 6 ( / ASSESSMENT YEAR:20 08 - 09 ) ./ I.T.A.NO. 382 /VIZ/201 6 ( / ASSESSMENT YEAR:20 09 - 10 ) ./ I.T.A.NO S . 383 /VIZ/201 6 ( / ASSESSMENT YEAR:20 10 - 11 ) THE INCOME TAX OFFICER WARD - 1(3) VIJAYAWADA SRI DHANEKULA CHOWDARY D.NO.6 - 67, DEVINENIVARI STREET , NEAR POST OFFICE GOLLAPUDI, VIJAYAWADA [PAN : ALWPD9351L] ( / APPELLANT) ( / RESPONDENT) ./ I.T.A.NO. 353 /VIZ/201 6 ( / ASSESSMENT YEAR:20 06 - 07 ) SRI DHANEKULA CHOWDARY D.NO.6 - 67, DEVINENIVARI STREET NEAR POST OFFICE GOLLAPUDI, VIJAYAWADA [ PAN : A LWPD9351L ] THE INCOME TAX OFFICER WARD - 1 (2) VI JAYAWADA ( / APPELLANT) ( / RESPONDENT) / REVENUE BY : SHRI M.K.SETHI, DR / ASSESSEE BY : SHRI C SUBRA H MANYAM, AR / DATE OF HEARING : 05 . 10 .2017 / DATE OF PRONOUNCEMENT : 27 .10 .2017 2 ITA NO S . 353 /VIZ/201 6 AND ITA NOS.380 - 383/VIZ/2016 SRI DHANEKULA CHOWDARY , V IJAYAWADA / O R D E R PER BENCH: THESE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)], VIJAYAWADA VIDE ITA NOS.84, 85, 86 & 87/CIT(A)/VJA/2014 - 15 DATED 31 . 03 .2016 FOR THE A.YS. 200 6 - 07 , 200 8 - 0 9, 2009 - 10 AND 2010 - 11 . SINCE THE COMMON GROUNDS ARE INVOLVED, ALL THE APPEALS ARE CLUBBED, HEARD TO G ETHER AND DISPOSED OFF IN COMMON ORDER AS UNDER. 2. COMMON GROUNDS OF APPEAL IN REVENUES APPEAL S FOR ALL THE A.Y.S ARE RELATED TO THE DELETION OF ADDITION MADE BY THE ASSESSING OFFICER TOWARDS UNEXPLAINED CASH DEPOSITS. A SURVEY U/S 133A WAS CONDUCTED IN THE CASE OF M/S VASUDHA SHELTERS, LIC COLONY, GOLLAPUDI, VIJAYAWADA ON 23.02.2010 AND D URING THE SURVEY THE ASSESSI NG OFFICER FOU ND THAT M/S VASUDHA SHELTERS HAD ENTERED INTO DEVELOPMENT AGREEMENT DATED 16.06.2008 WITH SHRI DHANEKULA CHOWDARY AND OTHERS (LAND OWNERS) FOR CONSTRUCTION OF APARTMENTS AT GOLLAPUDI. SIMULTANEOUSLY, THE ASSESSING OFFICER CONDUCTED SURVEY U/S 133A IN THE CASE OF SRI DHANEKULA VENKATESWARA RAO, FATHER OF THE ASSESSEE ON 23.02.2010 AND DURIN G THE COURSE OF SU RVEY, LOOSE SHEETS, 3 ITA NO S . 353 /VIZ/201 6 AND ITA NOS.380 - 383/VIZ/2016 SRI DHANEKULA CHOWDARY , V IJAYAWADA DOCUMENTS, BANK STATEMENTS WERE FOUND AND IMPOUNDED U/S 133A OF INCOME TAX ACT. THE ASSESSEE I S HAVING SAVINGS BANK ACCOUNT IN STATE BANK OF INDIA, GOLLAPUDI WITH A/C NO. 10103383038 AND ALSO IN ANDHRA BANK, SAVINGS ACCOUNT NO.257031000 31048 AND FOUND CASH DEPOSITS FOR THE ASSESSMENT YEAR 2006 - 07 AND 2008 - 09 TO 2010 - 11 AS UNDER : ASST.YEAR AM OUNT (RS.) 2006 - 07 18,6 0,000 2008 - 09 48,16,650 2009 - 10 52,93,000 2010 - 11 9,30,000 2.1. 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 THEORY OF PEAK CREDIT AND CONFIRMED THE ADDITION OF RS .11,55,000/ - FOR THE ASSESSMENT YEAR 200 6 - 07 AND DELETED THE ADDITIONS FOR THE REMAINING YEARS. A GGRIEVED BY THE ORDER OF THE L D.CIT(A) , THE REVENUE IS IN APPEAL BEFORE US AND THE ASSESS E E FILED THE APPEAL FOR THE A.Y.2006 - 07 REQUESTING FOR CREDIT OF OPENING BALANCE. 3. APPEARING FOR THE REVENUE, LD.DR ARGUED THAT THE ASSESSEE HAS MADE FREQUENT CASH DEPOSITS AND WITHDRAWALS IN THE BANK ACCOUNT . THOUGH THE 4 ITA NO S . 353 /VIZ/201 6 AND ITA NOS.380 - 383/VIZ/2016 SRI DHANEKULA CHOWDARY , V IJAYAWADA ASSESSEE STATED THAT THE SOURCE OF DEPOSIT WAS REAL ESTATE BUSINESS, T HE ASSESSE E HA S NOT ESTABLISHED THE REAL ESTATE BUSINESS AND THE I NCOME EARNED ON IT BY HIM AND DID NOT FURNISH T HE NAMES AND ADDRESSES OF PERSONS FROM WHOM THE MONIES WERE RECEIVED AND TO WHOM THE MONIES WERE PAID. THERE WAS NO IOTA OF EVIDENCE HAVING CARRIED ON THE BUSINESS BY THE ASSESSEE AND THE DEPOSITS MADE IN THE BANK ACCOUNT WERE FROM UNEXPLAINED SOURCES AND THERE IS NO EVIDENCE TO SHOW THAT THE WITHDRAWALS WERE USED FOR REDEPOSITING IN THE BANK ACCOUNT. HENCE, THE THEORY OF PEAK CREDIT IS NOT APPLICABLE IN THE CASE OF THE ASSESS E ES CASE. IN THIS CASE, THE ASSESSEE DID NOT EXPLAIN THE SOURCE AND ALSO DID NOT EXPLAIN THE DESTINATION OF WITHDRAWAL, THEREFORE IT CANNOT BE PRESUMED THAT EVERY WITHDRAWAL IS AVAILABLE TO THE ASSESSEE TO MAKE THE CREDIT IN THE BANK ACCOUNT. THE PEAK CREDIT THEOR Y IS APPLIED WHEN THE SAME CASH WAS IN CIRCULATION FOR DEPOSIT AND WITHDRAWALS. IN THE ASSESSEES CASE, THE ASSESSEE HAS NOT ESTABLISHED THAT THE MONEY WAS CIRCULATED BY HIM. ACCORDINGLY, LD.DR ARGUED THAT THE ENTIRE CASH DEPOSITS REQUIRED TO BE ADDED TO THE INCOME WITHOUT APPLYING PEAK CREDIT THEORY. 4. ON THE OTHER HAND, LD.AR ARGUED THAT THE ASSESSEE WAS IN THE REAL ESTATE BUSINESS FOR THE PAST SO MANY YEARS. HE WAS RECEIVING ADVANCES 5 ITA NO S . 353 /VIZ/201 6 AND ITA NOS.380 - 383/VIZ/2016 SRI DHANEKULA CHOWDARY , V IJAYAWADA FROM THE CUSTOMERS WHICH WE RE USED FOR PURCHASE OF THE PROPERTY. THE AMOUNT RECEIVED BY THE ASSESSEE WA S DEPOSITED IN THE BANK ACCOUNT AND THE SAME WA S UTILIZED BY THE ASSESSEE FOR PAYMENT OF PROPERTY BY WITHDRAWING THE SAME FROM THE BANK ACCOUNT. LD.AR ARGUED THAT THE LD.CIT(A) HAS RIGHTLY APPLIED PEAK CREDIT THEORY HOLDING THAT THE CASH DEPOSITS WERE MADE OUT OF WITHDRAWAL FROM SAVINGS BANK ACCOUNT AND IN CASE THE PEAK CREDIT THEORY IS NOT FOLLOWED IT AMOUNTS AMOUNTS TO DOUBLE TAXATION OF THE SAME AMOUNT. THE LD.AR ARGUED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS ACTIVITY OF REAL ESTATE, HENCE ESTIMATION OF REASONABLE INCOME INSTEAD OF ENTIRE CASH DEPOSITS WOULD BE FAIR AND REASONABLE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED ON RECORD. THE ASSESSEE HAS FILED RETURN OF INCOME SUBSEQUENT TO THE SURVEY FOR THE ASSESSMENT YEARS 2006 - 07 TO 2010 - 11 AND AFTER ISSUE OF NOTICE U/S 147. IN THE RETURN OF INCOME, THE AS SESSEE HAS DECLARED THE BUSINESS OF CONSTRUCTION AND REAL ESTATE AND ADMITTED THE INCOME FROM BUSINESS. THE ASSESSEE SUBMITTED THAT THE SOURCES FOR THE CASH DEPOSITS WERE THE AMOUNTS RECEIVED FROM THE CUSTOMERS FOR PURCHASE OF PROPERTY AND THE ASSESSEE HA S NOT MAINTAI NED THE BOOKS OF ACCOUNTS. HOWEVER, THE 6 ITA NO S . 353 /VIZ/201 6 AND ITA NOS.380 - 383/VIZ/2016 SRI DHANEKULA CHOWDARY , V IJAYAWADA ASSESSING OFFICER WAS NOT BEING CONVINCED WITH THE EXPLANATION OF THE ASSESSEE AND MADE THE ENTIRE DEPOSITS AS ADDITION. THE LD.CIT(A) HELD THAT THE ASSESSE HAD MADE FREQUENT CASH DEPOSITS AND THE WITHD RAWALS AND THE ADDITION OF PEAK CRED IT IS REASONABLE AND ACCORDINGLY ALLOWED THE PARTIAL RELIEF. THE LD. CIT(A) UPHELD PEAK CREDIT THEORY AND CONFIRMED THE ADDITION OF RS.11,55,000/ - FOR THE A.Y. 2006 - 07 AND DELETED THE ADDITIONS IN THE REMAINING ASSESSME NT YEARS. THE ASSESSEE HAD MADE CASH DEPOSITS AS FOLLOWS: ASST.YEAR AMOUNT (RS.) 2006 - 07 - 18,60,000/ - 2008 - 09 - 48,16,650/ - 2009 - 10 - 52,93,000/ - 2010 - 11 - 9,30,000/ - 5.1. THOUGH THE ASSESSEE HAS MADE HUGE CASH DEPOSITS AND WITHDRAWALS RANGING FROM MULTIPLES OF LACS TO SMALL AMOUNTS , THE LD. CIT(A) APPLIED THE PEAK CREDIT THEORY. IN THIS CASE, THE ASSESSEE HAS NOT GIVEN ANY EVIDENCE TO SHOW THAT THE ASSESSEE HAS CARRIED ON ANY REAL ESTATE BUSINESS AND THE RETURNS WERE NOT FILED TILL THE SURVEY WAS CONDUCTED AND THE NOTICES WERE ISSUED U/S 148. THE ASSESSEE HAS NOT PRODUCED ANY MATERIAL EVIDENCE ON RECORD TO SHOW THAT THE DEPOSITS WERE MADE OUT OF PREVIOUS WITHDR AWALS. THOUGH THE ASSESSEE HAS SUBMITTED THAT HE HAD RECE IVED THE ADVANCES FOR 7 ITA NO S . 353 /VIZ/201 6 AND ITA NOS.380 - 383/VIZ/2016 SRI DHANEKULA CHOWDARY , V IJAYAWADA PURCHASE OF PROPERTIES FROM THE PROSPECTIVE BUYERS AND MADE THE PAYMENT FOR PURCHASE OF THE PROPERTIES THE ASSESSE NEITHER FURNISHED THE NAMES OF THE BUYERS NOR THE VENDORS . T HE CONDUCT OF THE BA NK ACCOUNT DOES NOT SUPPORT THAT THE WITHDRAWALS ARE AVAILABLE TO THE ASSESSE TO MAKE REDEPOSIT IN THE BANK ACCOUNT. ON CAREFUL VERIFICATION OF THE BANK ACCOUNT IT REVEALS THAT THE ASSESSE MADE DEPOSIT S IN BANK ACCOUNT AND WITHDRAWN SUBSTANTIAL AMOUNTS AND ALSO SMALL AMOUNTS LIKE RS.3,400/ - , RS.1,000/ - , RS.500/ - ON VARIOUS DATES GIVING INDICATION THAT AMOUNT WITHDRAWN WERE MADE USE OF AND NO CASH IS AVAILABLE TO REDEPOSIT. FOR EXAMPLE, THE ASSESSEE HAS WITHDRAWN SMALL AMOUNTS AS FOLLOWS: ASST.YEAR AMOU NT (RS.) 07.01.2006 - RS. 1000/ - 20.01.2006 - RS. 1000/ - 13.02.2006 - RS. 500/ - 17.02.2006 - RS. 500/ - 5.2. O N 3.4.2007 THE ASSESS E E HAD WITHDRAWN RS. 12,48,000/ - AND ON 4.4.2007 THE ASSE SSEE HAD DEPOSIT ED A SUM OF RS. 4,50 ,000/ - . SUBSEQUENTLY ON 19.4.2007 AND 21.4.2007, THE ASSESSEE HAS WITHDRAWN RS. 5,000/ - . THE ABOVE CONDUCT OF THE ACCOUNT CLEARLY INDICATES THAT THE PERIODICAL WITHDR A W A L WERE USED BY THE ASSESSE E AND NO CASH WAS LEFT WITH HIM FOR MAKING THE REDEPOSIT. IT IS COMMON UNDERSTANDING THAT A PERSON DOES NOT 8 ITA NO S . 353 /VIZ/201 6 AND ITA NOS.380 - 383/VIZ/2016 SRI DHANEKULA CHOWDARY , V IJAYAWADA WITHDRAW FREQUENTLY IN SMALL AMOUNTS WHEN SUBSTANTIAL CASH IS AVAILABLE WITH HIM. THE ABOVE CONDUCT OF THE ACCOUNT CLEARLY SHOWS THAT THE ASSESSEE HAS NOT WI THDRAWN THE CASH WITH PURPOSE TO REDEPOSIT . THEREF ORE, IT IS FOR THE ASSESSEE TO EXPLAIN AND ESTABLISH EACH SOURCE OF THE CREDIT AND DESTINATION OF THE WITHDRAWALS. IN THE CASE OF ASSESSEE, THE WITHDRAWALS AND DEPOSITS DO NOT INDICATE THAT THE WITHDRAWN AMOUNT WAS IN CIRCULATION. EVEN THE ASSESSEES EXP LANATION THAT THE ADVANCES WERE RECEIVED FROM THE CUSTOMERS FOR PURCHASE OF PROPERTY WAS USED FOR MAKING ADVANCES ON BEHALF OF THE CUSTOMERS, T HE SAME SHOULD BE ESTABLISHED BY THE ASSESSEE WITH THE NAME S AND ADDRESS OF THE PERSONS FROM WHOM THE MONIES WERE RECEIVED AND THE NAME AND ADDRESS OF THE PERSONS TO WHOM THE ADVANCES WERE MADE SO THAT BOTH THE BUYER AND VENDOR EXPLAIN THE SOURCE AND TO PAY THE CAPITAL GAIN TAX. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. D.K. GARG REPORTED IN 84 TAXMANN.COM 257 HELD THAT IN A CASE OF ACCOMMODATION ENTRY PROVIDER IF THE ASSESSE E IS UNABLE TO EXPLAIN THE SOURCES OF DEPOSITS AND CORRESPONDING PAYMENTS HE WOULD NOT BE ENTITLED TO BENEFIT OF PEAK CREDIT. IN THE INSTANT CASE IN THE ABSENCE OF DETAILS SUCH AS THE NAMES AND ADDRESSES OF THE PERSON FROM WHOM THE MONIES WERE RECEIVED AND PAID, IT IS NOT POSSIBLE TO ASCERTAIN WHETHER THE ASSESSEE IS REALLY ENGAGED IN REAL ESTATE BUSINESS, MONEY LAUNDERING, HAWALA OPER ATOR 9 ITA NO S . 353 /VIZ/201 6 AND ITA NOS.380 - 383/VIZ/2016 SRI DHANEKULA CHOWDARY , V IJAYAWADA OR THE ENTRY PROVIDERS. THEREFORE, IN THIS CASE, THE CREDITS AND DEBITS REQUIRE FURTHER VERIFICATION BY THE A.O. TO FIND OUT THE TRUE NATURE OF TRANSACTION. THE ASSESSING OFFICER SIMPLY MADE THE ADDITION WITHOUT VERIFYING THE TRUE N ATURE OF RECEIPTS AND THE LD.CIT(A) ADOPTED THE PEAK CREDIT THEORY WITHOUT GOING INTO THE FURTHER DETAILS . THOUGH THE LD.CIT(A) UPHELD THE PEAK CREDIT, THE CIT(A) DID NOT COMPUTE THE INCOME ON THE BALANCE TURNOVER THOUGH THE ASSESSEE HAD AGREED FOR ESTIMAT ION OF INCOME. DURING THE APPEAL HEARING ALSO THE LD.AR DID NOT FURNISH ANY EVIDENCE FOR BUSINESS CARRIED OUT BY THE ASSESSEE AND MODUS OPERANDI OF THE ASSESSEE WITH EVIDENCE. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT ISSUE NEEDS DETAILED INVESTIGA TION BY THE A.O. ACCORDINGLY WE REMIT THE MATTER BACK TO FILE OF THE A.O. TO EXAMINE TRUE NATURE OF TRANSACTIONS AND VERIFY THE SOURCE OF EACH CREDIT AND THE DESTINATION OF EACH PAYMENT / INVESTMENT AND DECIDE THE ISSUE AFRESH ON MERITS. APPEALS OF THE R EVENUE ON THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSE. ITA NO.382/VIZ/2016 6 . THE NEXT ISSUE IN THIS APPEAL NO.382/VIZ/2016 FOR THE A.Y. 2009 - 10 IS THE ASSESSEE S CLAIM OF DEDUCTION U/S 54F TO THE EXTENT OF RS.7,61,000/ - . 10 ITA NO S . 353 /VIZ/201 6 AND ITA NOS.380 - 383/VIZ/2016 SRI DHANEKULA CHOWDARY , V IJAYAWADA THE ASSESSEE HAS ADMITTED THE LONG TERM CAPITAL GAINS OF RS.7,61,000/ - AND CLAIMED THE DEDUCTION U/S 54F OF I.T.ACT. THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE STATING THAT THE ASSESSEE HAS ENTERED INTO LEASE AGREEMENT WITH M/S NRI ACADEMY AND THE SUBJECT F LAT WAS GIVEN FOR RUNNING THE SCHOOL. SINCE THE PROPERTY WAS NOT USED FOR THE PURPOSE OF RESIDENTIAL PURPOSE, THE ASSESSING OFFICER VIEWED THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 54F. ACCORDINGLY REJECTED THE CLAIM OF THE ASSESSEE U/S 54F OF I.T.ACT . THE LD.CIT(A) DELETED THE ADDITION AND THE REVENUE IS IN APPEAL BEFORE US. 7 . 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 ACADEMY FOR RUNNING THE SCHOOL. THE AO IS OF THE VIEW THAT THE ASSESSE HAD ACQUIRED THE COMMERCIAL PROPERTY BUT NOT THE RESIDENTIAL PROPERTY AND USING IT FOR COMMERCIAL PURPOSE. IT IS NOT ASCERTAINABLE FROM THE INFORMATION WHETHER THE FLAT IN QUESTION WAS RESIDENTIAL OR NOT AND REQUIRE VERIFICATION AT THE LEVEL OF AO. THEREFORE WE R EMIT THE MATTER BACK TO THE FILE OF THE AO TO MAKE PHYSICAL VERIFICATION OF THE IMPUGNED PROPERTY AND GIVE FINDING WHETHER THE PROPERTY GIVEN FOR RENT TO THE SCHOOL IS RESIDENTIAL PROPERTY WITH ALL 11 ITA NO S . 353 /VIZ/201 6 AND ITA NOS.380 - 383/VIZ/2016 SRI DHANEKULA CHOWDARY , V IJAYAWADA 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.353/VIZ/2016 8 . 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. 9 . GROUND NO. 1.3 IS RE LATED TO THE ADDITION OF RS. RS.7,80, 000/ - CONFIRMED BY TH E LD.CIT(A) . THE ASSESSE HAD CLAIMED THE OPENING CASH BALANCE OF RS.7,80,000/ - AND REQUESTED FOR RELIEF. THE LD.CIT(A) DID NOT ALLOW THE CREDI T HOLDING THAT OPENING BALANCE CANNOT BE TREATED AS EXPLAINED UNLESS THE ASSESSE PRODUCE EVIDENCE IN SUPPORT OF HI S CLAIM. SINCE THE ASSESS E E FAILED TO FURNISH EVIDENCE THE LD.CIT(A) CONFIRMED THE ADDITION RELYING ON THE DECISION OF HONBLE MADRAS HIGH COURT JUDGEMENT IN THE CASE OF C.PAKIRSAMY VS . ACIT (MAD) 315 ITR 293. AGGRIVED BY THE ORDER OF THE CIT(A) T HE ASSESSEE FILED APPEAL REQUESTING TO ALLOW THE CREDIT OF OPENING BALANCE FROM THE PEAK CREDIT. 12 ITA NO S . 353 /VIZ/201 6 AND ITA NOS.380 - 383/VIZ/2016 SRI DHANEKULA CHOWDARY , V IJAYAWADA 1 0 . LD.AR ARGUED DURING THE APPEAL PROCEEDINGS THAT THE ASSESSEE HAD OPENING CASH BALANCE OF RS.7,80,000/ - AS ON 01.04.2005 WHICH SHOULD BE ALLOWED AS D EDUCTION FROM THE PEAK CREDIT. THE ASSES S EE RELIED ON THE FOLLOWING CASE LAWS : (A) RAHUL VIJAY MUNOT VS. ITO, ITA NO.1923/PN/2013 ITAT, PUNE BENCH, 'B' PUNE. (B) IN THE DELHI BENCH OF ITAT IN SANJEEV KAPOOR CASE, ITA 2091/DEI/2010. (C) ITA NO.1434/KOI/2009 IN THE ITAT 'A' BENCH KOLKATA. (D) HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. FERTILIZER TRADERS, (2014) 98 DTR 323(ALL) (E) HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. JAWANMAL GEMAJI GANDHI, (1985) 151 1TR353(BOM) 1 1 . LD.CIT(A) HAS CONFIRMED THE ADDITION HOLDING THAT THE ASSESSEE DID NOT FILE 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. 1 2 . WE HAVE HEARD BOTH THE PARTIES AND PE RUSED THE MATERIAL PLACED ON RECORD. THOUGH THE ASSESSEE STATED TO HAVE OPENING CASH B ALANCE OF RS.7,80,000/ - THERE WAS NO EVIDENCE TO ESTABLISH THAT THERE WAS OPENING CASH BALANCE WITH THE ASSESSEE. THE ASSESSEE ALSO DID NOT ESTABLISH THAT HE 13 ITA NO S . 353 /VIZ/201 6 AND ITA NOS.380 - 383/VIZ/2016 SRI DHANEKULA CHOWDARY , V IJAYAWADA HAS EARNED THE INCOME FROM THE BUSINESS. 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 NOT ACCEPTABLE. LD.CIT(A) RELIED ON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF SRI C.PAKIRSAMY VS. ACIT [315 ITR 293] AND CONFIRMED THE ADDITIO N. 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 UP HELD. 13. IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE AND THE APPEAL OF THE ASSESSEE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 27 TH OCT 20 17 . SD/ - SD/ - ( . . ) ( . ) ( D.S. SUNDER SINGH ) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER /VISAKHAPATNAM /DATED : 27 . 10 .2017 L. RAMA, SPS 14 ITA NO S . 353 /VIZ/201 6 AND ITA NOS.380 - 383/VIZ/2016 SRI DHANEKULA CHOWDARY , V IJAYAWADA /COPY OF THE ORDER FORWARDED TO: - 1. / THE REVENUE - THE INCOME TAX OFFICER , WARD - 1(3) , VIJAYAWADA 2 . / THE ASSESSEE SRI DHANEKULA CHOWDARY, D.NO.6 - 67, DEVINENIVARI STREET , NEAR POST OFFICE, GOLLAPUDI, VIJAYAWADA 3 . THE COMMISSIONER OF INCOME TAX - 2, VISAKHAPATNAM 4. THE COMMISSIONER OF INCOME TAX (APPEALS) - 2, VISAKHAPATNAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM