Cheeti Laxman Rao, Hyderabad V. Income Tax Officer, Ward-15(1), Hyderabad

ITA 437/Hyd/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1292 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 13-03-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 01-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D J PRABHAKAR ANAND
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Business income
• Section: 143(3)

Judgement Text

ITA NOS 436 & 437 OF 2018 CHEETI LAXMAN RAO SECUNDE RABAD. PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B SMC BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NOS. 437/HYD/2018 (ASSESSMENT YEAR: 2013-14) SHRI CHEETI LAXMAN RAO SECUNDERABAD PAN;AEAPC7046Q VS INCOME TAX OFFICER WARD 15(1) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI T. CHAITANYA KUMAR FOR REVENUE : SHRI D.J.PRABHAKAR ANAND O R D E R THIS IS ASSESSEES APPEAL FOR THE A.Y 2013-14 AGAIN ST THE ORDER OF THE CIT (A)-7, HYDERABAD, DATED 28.11. 2017 CONFIRMING THE PENALTY LEVIED BY THE AO U/S 271A OF THE ACT. 2. THE AO INITIATED THE PENALTY U/S 271A SINCE IN T HE ASSESSMENT ORDER U/S 143(3) OF THE ACT, THE GROSS R ECEIPTS HAD BEEN ARRIVED AT RS.1,72,87,696/- AND SINCE IT EXCEE DED RS.1.00 CRORE, THE ASSESSEE WAS REQUIRED TO MAINTAIN THE BO OKS U/S 44AB OF THE ACT AND THE ASSESSEE HAS FAILED TO DO SO. SI NCE THE ASSESSEE FAILED TO APPEAR AND SHOW CAUSE AS TO WHY THE PENAL TY SHOULD NOT BE LEVIED, THE AO LEVIED THE PENALTY OF RS.25,000/- U/S 271A OF THE ACT. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEA L BEFORE THE CIT (A) WHO CONFIRMED THE ORDER OF PENALTY AND THE ASSESSEE IS IN SECOND APPEAL BEFORE THIS TRIBUNAL. DATE OF HEARING : 13.03.2019 DATE OF PRONOUNCEMENT: 15.03.2019 ITA NOS 436 & 437 OF 2018 CHEETI LAXMAN RAO SECUNDE RABAD. PAGE 2 OF 3 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION TO THE GROSS RECEIPTS HAS BEEN MADE BY THE AO ON THE GROUND THAT THE CASH CREDITS MADE INTO THE BANK A/C HAVE NOT BEEN EXPLAINED BY THE ASSESSEE. HE ARGUED THAT THE BANK A/C CANNOT BE TREATED AS BOOKS OF ACCOUNT OF THE ASSESS EE. HE SUBMITTED THAT THE GROSS RECEIPTS OF THE ASSESSEE W ERE LESS THAN RS.1.00 CRORE AND THEREFORE, HE WAS NOT REQUIRED TO MAINTAIN ANY BOOKS OF ACCOUNT. THEREFORE, HE PRAYED FOR DELETION OF THE PENALTY U/S 271A OF THE ACT. 4. THE LEARNED DR, HOWEVER, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. HAVING REGARDS TO THE FACTS OF THE CASE, I FIND THAT ACCORDING TO THE ASSESSEE HIS GROSS RECEIPTS WERE L ESS THAN RS.1.00 CRORE AND THEREFORE, HE NEED NOT HAVE MAINT AINED THE BOOKS OF ACCOUNT. THE GROSS RECEIPTS HAVE EXCEEDED RS.1.00 CRORE ONLY BECAUSE OF TREATING THE UNEXPLAINED CASH CREDI TS ALSO AS TURNOVER OF THE ASSESSEE. THE AO HAS MADE THE ADDIT ION TO THE TURNOVER BECAUSE THE ASSESSEE COULD NOT EXPLAIN THE CASH CREDITS BUT THERE IS NO POSITIVE EVIDENCE THAT ALL THESE DE POSITS ARE THE BUSINESS RECEIPTS OF THE ASSESSEE. THEREFORE, BY VI RTUE OF INCREASE IN THE TURNOVER DUE TO THE ASSESSMENT ORDER, THE AS SESSEE CANNOT BE EXPECTED TO HAVE MAINTAINED BOOKS OF ACCOUNT U/S 44AB OF THE ACT. THEREFORE, I AM SATISFIED THAT THE PENALTY U/S 271A IS NOT LEVIABLE IN THIS CASE. THE APPEAL OF THE ASSESSEE I S ACCORDINGLY ALLOWED. ITA NOS 436 & 437 OF 2018 CHEETI LAXMAN RAO SECUNDE RABAD. PAGE 3 OF 3 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ACCORDINGLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH MARCH, 2019. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 15 TH MARCH, 2019. VINODAN/SPS COPY TO: 1 SHRI T. CHAITANYA KUMAR, ADVOCATE, FLAT NO.102, G OWRI APARTMENTS, UDRU LANE, HIMAYATNAGAR, HYDERABAD 2 ITO WARD 15(1) HYDERABAD 3 CIT (A)-7 HYDERABAD 4 PR. CIT 7 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER