M.Panduranga Rao, Visakhapatnam V. THE ITO, Visakhapatnam

ITA 39/VIZ/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6648 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 02-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V APPALA RAJU
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, HON'BLE JUDICIAL MEMBER ITA NO. 39 / VIZ /201 6 (ASST. YEAR : 20 09 - 1 0 ) M UNAMA PANDURANGA RAO, PROP. M/S. HANUMAN TRANSPORT, D.NO. 44 - 34 - 44, NANDAGIRI NAGAR, VISAKHAPATNAM. VS. IT O , WARD - 4(1), VISAKHAPATNAM. PAN NO. ABVPM 2164 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SHRI V. APPALA RAJU - SR. DR DATE OF HEARING : 02 / 0 8 /201 7 . DATE OF PRONOUNCEMENT : 04 / 1 0 /201 7 . O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 2 , GUNTUR , DATED 24 / 11 /201 5 FOR THE ASSESSMENT YEAR 2009 - 10 . 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS AN INDIVIDUAL CARRYING IN THE BUSINESS OF OPERATING GOODS TRANSPORT VEHICLES BY ENGAGING HIRE D AS WELL AS OWN VEHICLES . THE ASSESSEE HAS FILED HIS RETURN OF INCOME BY DE CLARING TOTAL INCOME OF 5,20,620/ - , WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT'). AFTER FOLLOWING DUE PROCEDURE, ASSESSMENT IS COMPLETED UNDER SECTION 143(3) BY ADDING UNACCOUNTED CASH DEPOSITS OF 15 LAKHS AND ALSO DEFICIT IN CASH BOOK OF 91,182/ - . DURING THE COURSE OF 2 ITA NO. 39 /VIZ/2016 (M. PANDURANGA RAO) ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER HAS OBSERVED THAT AS PER ITS DATA , IT IS NOTED THAT THE ASSESSEE HAD DEPOSITED 16 LAKHS IN AXIS BANK S AVINGS ACCOUNT , BUT IT WAS NOT REFLECTED IN HIS REGULAR BOOKS OF ACCOUNT . WHEN THIS WAS POINTED OUT, ASSESSEE PRODUCED A COPY OF STATEMENT OF ACCOUNTS OF AXIS BANK NO. 369010100202107 , WHICH WAS H E L D JOINTLY BY THE ASSESSEE AND HIS WIFE SMT. PADMAVATI . IN THE SAID ACCOUNT, 9 LAKHS WAS DEPOSITED IN CASH ON 10/01/2009 AND AGAIN ANOTHER 6 LAKHS WAS DEPOSITED ON 19/02/2009 . OUT OF THIS AMOUNT, 1 LAKH WAS TRANSFERRED TO HIS CAPITAL ACCOUNT IN THE BOOKS OF M/S.HANUMAN TRANSPORT ON 01/03/2009 AND 6 LAKHS WAS WITH DRAWN , IN CASH ON 12/03/2009 . THEREAFTER, ON 28/03/2009, THERE WAS A CASH DEPOSIT OF 1 LAKH. AS ON 31/03/2009, THE BALANCE IN THE ACCOUNT WAS 9,11,235/ - AFTER TAKING INTO ACCOUNT INTEREST OF 6,342/ - ACCRUED TO T HE ACCOUNT. 3. THE ASSESSING OFFICER CALLED FOR EXPLANATION FROM THE ASSESSEE FOR THE SAID DEPOSITS. IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT ASSESSEE OWNS 6.38 ACRES OF WET AGRICULTURAL LAND , WHICH IS ANCESTRAL FROM HIS HUF AND GOT PARTITIONED IN THE YEAR 1982 AND THE SAME WAS CULTIVATED BY HIS BROTHER SHRI MURAHARI RAO AND EARNED NET INCOME OF 65,000/ - PER YEAR . THIS AMOUNT WAS KEPT WITH HIS BROTHER SINCE 1994 AND RECEIVED 9 LAKHS FROM HIM FOR THE PURPOSE OF PERFORMING HIS DAUGHTERS MARRIAGE IN THE MONTH OF NOVEMBER, 2009 AND THE SAME WAS DEPOSITED IN THE BANK ON 10/01/2009 . IT WAS FURTHER SUBMITTED THAT HIS WIFE SMT. PADMAVATI HAS GOT 3 .00 ACRES OF LAND, WHICH WAS RECEIVED AS 3 ITA NO. 39 /VIZ/2016 (M. PANDURANGA RAO) SRIDHAN IN THE YEAR 1979 . THE ACCUMULATED AGRICULTURAL INCOME WAS KEPT WITH HER MOTHER SINCE 1979 AND RECEIVED 6 LAKHS IN CASH AND DEPOSITED THE SAME IN THE BANK ON 19/02/2009. AFTER CONSIDERING THE EXPLANATION GIVEN BY THE ASSESSEE, THE ASSESSING OFFICER HAS OBSERVED THAT THOUGH THE ASSESSEE HAS FILED THE DETAILS OF THE LAND AND CONFIRMATION LETTER GIVEN BY HIS BROTHER, HOWEVER, THE ASSESSEE HAS NOT GIVEN ANY PROPER EXPLANATION WHY HE HAS KEPT MONEY WITH HIS BROTHER SUCH A LONG PERIOD AND WHAT IS THE SOURCE OF HIS BROTHER TO REPAY SUCH HUGE AMOUNT . THEREFO RE, ASSESSING OFFICER DISBELIEVED THE EXPLANATION GIVEN BY THE ASSESSEE AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 4 . ON APPEAL, LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 5 . ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 6 . LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE KEPT AGRICULTURAL INCOME WITH HIS BROTHER FOR THE PUR P OSE OF PERFORMING HIS DAUGHTERS MARRIAGE , THEREFORE , THE LD. CIT(A) IS NOT CORRECT IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER. THEREFORE, H E PRAYED THAT SAME MAY BE DELETED. ALTERNATIVELY, HE SUBMITTED THAT SO FAR AS ADDITION IN RESPECT OF 6 LAKHS , IF AT ALL MADE, IT HAS TO BE MADE IN THE HANDS OF ASSESSEES WIFE . 7 . ON THE OTHER HAND , L EARNED DEPARTMENTAL REPRESENTATIVE HAS SUBMITTED THAT ASSESSEE HAS FAILED TO GIVE ANY EXPLANATION AS TO WHY 4 ITA NO. 39 /VIZ/2016 (M. PANDURANGA RAO) SAVINGS BANK ACCOUNT WITH AXIS BANK IS NOT DISCLOSED IN THE BOOKS OF ACCOUNT. THE ASSESSEE INTENDS TO CONCEAL THE INCOME AND NOT GIVEN EXPLANATION WHY SUCH AMOUNT IS KEPT WITH HIS BROTHER NEAR ABOUT 17 YEARS , IS UN BELIEVABLE AND STRONGLY SUPPORTED THE ORDERS PASSED BY THE AUTHORITIES BELOW. SO FAR AS ALTERNATIVE PLEA IS CONCERNED , THERE IS NO EXPLANATION IN RESPECT OF DEPOSIT OF 6 LAKHS AND THEREFORE ASSESSING OFFICER HAS RIGHTLY MADE THE ADDITION AND WAS CONFIRMED BY THE LD.CIT(A). 8 . I HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 9 . THE ASSESSEE HAS FILED RETURN OF INCOME, WHICH WAS PROCESSED AND THEREAFTER CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ASSESSMENT IS COMPLETED UNDER SECTION 143(3) OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , AS PER ITS DATA, THE ASSESSING OFFICER HAS FOUND THAT THER E IS A DEPOSIT OF 16 LAKS IN THE JOINT ACCOUNT MAINTAINED BY THE ASSESSEE AND HIS WIFE . AN AMOUNT OF 9 LAKHS WAS DEPOSITED ON 10/01/2009 AND AGAIN ANOTHER AMOUNT OF 6 LAKHS WAS DEPOSITED ON 19/02/2009. THIS ACCOUNT WAS NOT DISCL O SED IN THE REGULAR BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE . WHEN ASSESSING OFFICER ASKED THE ASSESSEE AS TO WHY THIS ACCOUNT IS NOT DISCLOSED IN THE REGULAR BOOKS OF ACCOUNT, ASSESSEE HAS NOT GIVEN ANY ANSWER . EVEN BEFORE US , THE ASSESSEE HAS NOT EXPLAINED AS TO WHY TH IS ACCOUNT IS NOT DISCLOSED IN THE REGULAR BOOKS OF ACCOUNT. INSOFAR AS DEPOSITS ARE CONCE RNED, IT IS SUBMITTED BEFORE THE ASSESSING OFFICER THAT ASSESSEE AND HIS W IFE HAVE 5 ITA NO. 39 /VIZ/2016 (M. PANDURANGA RAO) GOT AGRICULTURAL LAND. SO FAR AS AGRICULTURAL INCOME OF THE ASSESSEE IS CONCERNED , SINCE 1994 ONWARDS, AGRICULTURAL INCOME IS KEPT WITH HIS BROTHER FOR THE PURPOSE OF PER FORMING HIS DAUGHTERS MARRIAGE. H OWEVER, ASSESSEE HAS NOT GIVEN ANY PROPER EXPLANATION WHY HUGE AMOUNT IS KEPT WITH HIS BROTHER FOR A LONG PERIOD AND WHAT IS THE SOURCE OF HIS BROTHER TO REPAY THE SAME. SO FAR AS AGRICULTURAL INCOME OF THE ASSESSEES WIFE IS CONCERNED, HE HAS NOT PRODUCED ANY C REDIBLE EVIDENCE TO SHOW THAT THE AMOUNT IS RECEIVED FROM H ER MOTHER . UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE , I AM OF THE OPINION THAT THE ASSESSEE FAILED TO DISCHARGE THE BURDEN CASTED UPON HIM THAT THE DEPOSITS IN THE BANK ARE FROM HIS AGRICULTURAL INCOME , TH ER EFORE, BOTH THE AUTHORITIES BELOW CORRECTLY HELD THAT THE AMOUNTS DEPOSITED IN THE BANK ACCOUNT ARE INCOME FROM OTHER SOURCES . 10 . SO FAR AS ALTERNATIVE PLEA IS CONCERNED , ONCE THE AMOUNT IS DEPOSITED IN THE JOINT ACCOUNT OF AS SESSEE AND HIS WIFE AND NO EXPLANATION IS OFFERED FOR THE SOURCE OF SAID DEPOSITS, PARTICULARLY ASSESSEE FAILED TO SUBSTANTIATE THAT THE AMOUNT OF 6 LAKHS RECEIVED AS A SOURCE OF AGRICULTURAL INCOME, THE ASSESSING OFFICER HA S RIGHTLY MADE THE ADDITION. WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A) ON THIS GROUND. THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 1 1 . INSOFAR AS ADDITION OF 91,182/ - IS CONCERNED, THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS OBSERVED TH AT ON 17/04/2008 CERTAIN P AYMENTS WERE MADE IN CASH, BUT THERE WAS NO CASH BALANCE 6 ITA NO. 39 /VIZ/2016 (M. PANDURANGA RAO) AVAILABLE AS PER THE BOOKS OF ACCOUNT , HENCE , IT IS DEEMED THAT THE ASSESSEE HAS MADE THESE TRANSACTIONS FROM HIS UNDISCLOSED SOURCE, IN RESULT , CASH DEFICIT OF 91,182/ - IS ASSESSED AS INCOME FROM OTHER SOURCES . 1 2 . ON APPEAL, LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 13 . I FIND THAT SO FAR AS BUSINESS INCOME OF THE ASSESSEE IS CONCERNED, THE ASSESSING OFFICER HAS ESTIMATED THE INCOME OF THE ASSESSEE AND THEREFORE MAKING SEPARATE ADDITION ON ACCOUNT OF CERTAIN PAYMENTS ON THE GROUND THAT THERE IS NO SUFFICIENT AMOUNT IN THE CASH BOOK, IN MY OPINION, IS NOT CORRECT. THEREFORE, TH E ORDER PASSED BY THE LD. CIT(A) ON THIS COUNT , IS SET ASIDE AND THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED. 14. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 0 4 T H DAY OF OCTOBER, 201 7 . S D / - ( V. DURGA RAO ) JUDICIAL MEMBER DATED : 0 4 T H OCTOBER , 201 7 . VR/ - 7 ITA NO. 39 /VIZ/2016 (M. PANDURANGA RAO) COPY TO: 1. THE ASSESSEE - MUNAMA PANDURANGA RAO, PROP. M/S. HANUMAN TRANSPORT, D.NO. 44 - 34 - 44, NANDAGIRI NAGAR, VISAKHAPATNAM. 2. THE REVENUE - ITO, WARD - 4(1), VISAKHAPATNAM. 3. THE P CIT - 2 , VISAKHAPATNAM. 4. THE CIT(A) - 2, GUNTUR. 5. THE D.R. , VISAKHAPATNAM . 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SENIOR PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.