Nagaruru Srinivasa Rao, Kurnool V. ACIT., Circle-1, Kurnool

ITA 422/Hyd/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0361 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 17-07-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 13-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Capital Gains
• Section: 148; 143(1); 69B; 208

Judgement Text

आयकर अपीलीय अधिकरण, हैदराबाद पीठ में IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B”, HYDERABAD BEFORE SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER & SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं / ITA No.422/Hyd/2023 (निर्धारण वर्ा / Assessment Year: 2011-12) Nagaruru Srinivasa Rao Venugopal and Chenoy Chartered Accountants 4-1-889/162, Tilak Road Hyderabad [PAN : BNEPS8456A] Vs. Assistant Commissioner of Income Tax Circle-1 Kurnool अपीलधर्थी / Appellant प्रत्‍यर्थी / Respondent निर्धाररती द्वधरध/Assessee by: B.Satyanarayana Murthy, AR रधजस्‍व द्वधरध/Revenue by: Ms. Sheetal Sarin, DR सुिवधई की तधरीख/Date of hearing: 18/07/2024 घोर्णध की तधरीख/Pronouncement on: 08/08/2024 आदेश / ORDER PER K. NARASIMHA CHARY, J.M: Aggrieved by the order dated 26/06/2023 passed by the learned Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), in the case of Nagaruru Srinivasa Rao (“the assessee”) for the assessment year 2011-12, assessee preferred this appeal. Page 2 of 7 2. Assessee is an individual and was deriving income from business of real estate, capital gains and other sources. For the assessment year 2011- 12, he filed the return of income on 31/3/2012 declaring an income of ₹ 2,78,840/-. It was processed under section 143(1) of the Income Tax Act, 1961 (for short “the Act”). Subsequently notice under section 148 of the Act was issued to the assessee and the assessee filed his return of income on 2/11/2018 declaring the same income. 3. During assessment, learned Assessing Officer asked the assessee to explain the source as per the deposit of ₹ 1.55 crores in his bank account with ICICI bank. Assessee explained that such amount constitutes the gift of ₹ 55 Lacs and 85 Lacs from his father Sri Nagaruru Subrahmanyam and the balance was out of his withdrawals from the bank. He further explained to the learned Assessing Officer that the same was satisfactorily explained to the Assistant Director of Income Tax, investigation unit. Despite the same, the learned Assessing Officer rejected the explanation offered by the assessee and completed the assessment by making addition of ₹ 1.55 crores under section 69B of the Act. 4. Aggrieved assessee preferred appeal before the learned CIT(A) and reiterated his plea. Learned CIT(A), however, brushed aside the plea of the assessee and observed that the assessee failed to prove his onus as to the sources of gifts received from his father as well as property transaction and no documentary evidence was submitted before the learned Assessing Officer or NFAC, and therefore, no interference was called for with the addition made. 5. Assessee, therefore, preferred this appeal contending that the sources for the deposits to the tune of ₹ 1.55 crores were properly explained by the assessee before the Assistant Director, investigation and also before the authorities but they failed to appreciate the same in its proper perspective and without calling for any record whatsoever, they held that for want of evidence the plea taken by the assessee cannot be Page 3 of 7 accepted. Assessee also produced before us not only the Ledger and cash book but also the bank statements to prove that the gifts made by his father were genuine and were out of the withdrawals made from his bank accounts and a part of such deposit, an amount was the cash withdrawn by him from his own bank account. 6. Per contra, learned DR disputed the statement made on behalf of the assessee and stated that the assessee did not produce any evidence before the authorities and therefore there was no opportunity for the authorities to verify the veracity of the plea taken by the assessee and also the genuineness of the documents produced by the assessee. 7. We have gone through the record in the light of the submissions made on either side. When the assessee produced the Ledger and the cash book to support the plea that the money was transferred by his father and also there are certain withdrawals from his bank account, the Bench sought the corroborating evidence to establish the correctness of the entries in the Ledger and cash book. Assessee produced the bank statements and explained the following entries of deposits under credits in his own bank account as well as the account of his father, and such details are as follows:- Nagaruru Srinivasa Rao Cash Deposit and Withdrawn (01.04.2010 to 24.09.2010) S.No. Date Debit (withdrawn) Credit (Deposit) Bank Names Bank Statement Pg.No. Cash book pg.no. 1. 03.04.2010 1,50,000 Andhra 116 156 2. 15.04.2010 3,05,550 KVB-88 148 156 3. 15.04.2010 10,000 Axis 118 156 4. 15.04.2010 4,000 Axis 118 156 5. 15.04.2010 14,000 Axis 118 156 6. 28.04.2010 55,000 IDBI 138 156 7. 06.05.2010 4,00,000 KVB-88 148 156 8. 26.05.2010 9,00,000 KVB-88 148 156 9. 31.05.2010 6,00,000 KVB-88 148 156 10. 31.05.2010 50,000 Axis 118 156 11. 05.06.2010 4,90,000 KVB-88 148 156 12. 14.06.2010 8,00,000 KVB-88 150 158 Page 4 of 7 13. 25.06.2010 25,000 Axis 118 158 14. 06.07.2010 8,00,000 KVB-88 150 158 15. 06.07.2010 2,00,000 KVB-88 150 158 16. 13.07.2010 3,00,000 KVB-88 150 158 17. 13.07.2010 9,00,000 KVB-1349 140 158 18. 21.07.2010 20,000 Axis 118 158 19. 22.07.2010 75,000 IDBI 138 158 20. 22.07.2010 1,82,000 IDBI 138 158 21. 28.07.2010 9,00,000 KVB-88 150 158 22. 28.07.2010 3,00,000 KVB-88 150 158 23. 28.07.2010 9,00,000 KVB321 144 158 24. 28.07.2010 9,00,000 KVB-564 146 158 25. 28.07.2010 9,00,000 ICICI 126 160 26. 31.07.2010 2,00,000 KVB-88 150 160 27. 03.08.2010 9,00,000 KVB-88 150 160 28. 03.08.2010 4,00,000 KVB-88 150 160 29. 16.08.2010 2,70,000 KVB-88 150 160 30. 16.08.2010 80,000 IDBI 136 160 31. 17.08.2010 2,50,000 Axis 118 160 32. 06.09.2010 14,00,000 Andhra 116 160 33. 06.09.2010 11,00,000 Andhra 116 160 34. 17.09.2010 9,00,000 Axis 118 160 35. 18.09.2010 9,00,000 Andhra 116 160 36. 18.09.2010 5,00,000 Andhra 116 160 37. 24.09.2010 5,00,000 Axis 120 160 Total 1,19,16,550 56,64,000 Nagaruru Subrahmanyam Cash Deposit and Withdrawn (01.04.2010 to 23.09.2010) S.No. Date Debit (withdrawn) Credit (Deposit) Bank Names Bank Statement Pg.No. Cash book pg.no. 1. 10.04.2010 12,00,000 Andhra 162 210 2. 15.04.2010 5,00,000 Axis 166 210 3. 16.04.2010 6,00,000 Axis 166 210 4. 16.04.2010 4,00,000 KVB- 00232 194 210 5. 28.04.2010 IDBI 184 212 6. 08.05.2010 1,00,000 Axis 166 212 7. 08.05.2010 2,00,000 Andhra Pragathi 174 212 8. 26.05.2010 5,00,000 IDBI 184 212 9. 26.05.2010 1,25,000 IDBI 190 212 10. 31.05.2010 9,00,000 Axis 168 212 11. 31.05.2010 3,00,000 Axis 168 212 12. 31.05.2010 9,00,000 Axis 168 212 13. 31.05.2010 6,00,000 Axis 168 212 14. 31.05.2010 8,00,000 Axis 168 212 15. 31.05.2010 5,00,000 Axis 168 212 16. 05.06.2010 8,00,000 Axis 168 212 Page 5 of 7 17. 05.06.2010 7,00,000 Axis 168 212 18. 14.06.2010 5,00,000 Axis 168 212 19. 14.06.2010 4,00,000 IDBI 184 212 20. 14.06.2010 25,000 IDBI 184 212 21. 19.06.2010 50,000 Andhra 162 212 22. 23.06.2010 5,50,000 IDBI 184 212 23. 23.06.2010 9,00,000 IDBI 184 212 24. 25.06.2010 3,00,000 KVB- 00232 194 212 25. 25.06.2010 35,000 Axis 168 212 26. 03.07.2010 15,000 Axis 168 216 27. 08.07.2010 9,00,000 SBI-4864 204 216 28. 08.07.2010 9,00,000 SBI-4864 204 216 29. 09.07.2010 36,00,000 SBI-4864 204 218 30. 09.07.2010 24,00,000 SBI-4864 204 218 31. 13.07.2010 1,00,000 SBI-4864 204 220 32. 13.07.2010 3,16,050 SBI-4864 204 220 33. 13.07.2010 3,00,000 KVB- 00232 194 220 34. 13.07.2010 16,000 SBI-4864 204 220 35. 17.07.2010 9,00,000 SBI-4864 204 220 36. 17.07.2010 8,00,000 SBI-4864 204 220 37. 17.07.2010 7,00,000 SBI-4864 204 220 38. 22.07.2010 62,000 IDBI 190 220 39. 27.07.2010 5,00,000 KVB- 53161 200 220 40. 27.07.2010 5,00,000 KVB- 53161 200 220 41. 27.07.2010 5,00,000 KVB- 53161 200 220 42. 27.07.2010 5,00,000 KVB- 53161 200 220 43. 27.07.2010 5,00,000 KVB- 53161 200 220 44. 27.07.2010 5,00,000 KVB- 53161 200 222 45. 17.08.2010 9,00,000 Axis 168 222 46. 17.08.2010 3,50,000 IDBI 190 222 47. 06.09.2010 14,00,000 Andhra 162 222 48. 06.09.2010 11,00,000 Andhra 162 222 49. 13.09.2010 30,000 IDBI 190 222 50. 17.09.2010 5,00,000 ICICI 178 222 51. 18.09.2010 9,00,000 Andhra 162 222 52. 18.09.2010 5,00,000 Andhra 162 222 53. 21.09.2010 9,000 SBI-2059 208 224 Total 2,30,16,050 85,80,000 8. The above statements clearly establish that during the year the assessee withdrew a sum of ₹ 1.19 crores from his bank accounts, whereas he deposited only about ₹ 57 lakhs which shows that there was some cash Page 6 of 7 available in the hand of the assessee as on the date of the impugned deposit of ₹ 1.55 crores on 24/9/2010. So also the statement of debits and credits in the bank accounts of his father also establish that his father withdrew a sum of ₹2.3 crores from his various bank accounts and deposited only a sum of about ₹ 86 Lacs, thereby showing the possibility of availability of cash in his hands to gift his son. 9. There is no dispute that the assessee has been dealing in real estate, capital gains and other sources. The entries in the cash book of the assessee and his father show the availability of cash in the hands. Further, the assessee submitted the bank statements in support of every entry of the above bank statements and the genuineness of the bank statements is accepted, it leaves no doubt in our mind that there was enough cash available to the assessee and his father and also the gift of money by the father to the son. The impugned orders do not show that the authorities considered this aspect nor did they seek from the assessee as to any documents corroborating the entries in the Ledger and cash book. 10. In these circumstances, we are of the considered opinion that, if on verification the bank statements are found to be genuine, there is nothing suspicious in this matter and the addition has to be deleted. We, therefore, direct the learned Assessing Officer to verify the entries given in the above table with reference to the entries in the bank statements furnished by the assessee and if such bank statements are found to be genuine, to delete the addition. Subject to the above verification, the appeal of the assessee stands allowed. Grounds are answered accordingly. In the result, appeal of the assessee is allowed in the above terms. Order pronounced in the open court on this the 8 th day of Aug, 2024. Sd/- Sd/- (MADHUSUDAN SAWDIA) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad / Dated : 08/08/2024 Page 7 of 7 Copy forwarded to: 1. Nagaruru Srinivasa Rao, Venugopal and Chenoy, Chartered Accountants, 4-1-889/162, Tilak Road, Hyderabad 2. The Assistant Commissioner of Income Tax, Circle-1, Kurnool 3. The Pr.CIT, Hyderabad 4. DR, ITAT, Hyderabad. 5. GUARD FILE TRUE COPY ASSISTANT REGISTRAR ITAT, HYDERABAD