C Vamsi Mohan, Hyderabad V. Income Tax Officer, Ward-1, Nandyal

ITA 469/HYD/2014

• Counselvise Citation: 46922514 RSA 2014
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 26-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 20-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained cash credit
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA.NO.469/HYD/2014 ASSESSMENT YEAR 2009-2010 MR. C. VAMSI MOHAN NANDYAL. PAN ABVPC7070A VS. THE INCOME TAX OFFICER, WARD-1, NANDYAL. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. A.V. RAGHURAM FOR REVENUE : MR. RAMAKRISHNA BANDI DATE OF HEARING : 26.03.2015 DATE OF PRONOUNCEMENT : 27.03.2015 ORDER PER P.M. JAGTAP, A.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-IV, HYDERABAD DATED 10.01.2014 WHEREBY HE CONFIRMED THE ADDITION OF RS. 21 LAKHS MADE BY THE A.O. ON ACCOUNT OF CASH DEPOSIT OF RS. 21 LAKHS FOUND TO BE MADE IN THE BANK ACCOUNT OF THE ASSESSE E TREATING THE SAME AS UNEXPLAINED CASH CREDIT. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDU AL WHO IS ENGAGED IN THE BUSINESS OF DEALING IN MEDICI NE AND OTHER PRODUCTS ON RETAIL BASIS IN THE NAME AND STYL E OF HIS PROPRIETARY M/S. C.P. MEDICAL AND FANCY STORE. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED B Y HIM ON 31.03.2010 DECLARING TOTAL INCOME OF RS.1,60,490. D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE BANK ACCOUNT MAINTAINED BY THE ASSESSEE WITH STATE BANK OF INDIA WAS 2 ITA.NO.469/HYD/2014 MR. C. VAMSI MOHAN, NANDYAL VERIFIED BY THE A.O. AND ON SUCH VERIFICATION, HE F OUND THAT THERE WERE CASH DEPOSITS MADE FROM TIME TO TIME AGG REGATING TO RS.33,75,000. ALTHOUGH IT WAS EXPLAINED BY THE ASSE SSEE THAT THE SAID AMOUNT WAS DEPOSITED OUT OF CASH WITHDRAWA LS MADE FROM THE SAME ACCOUNT ON EARLIER DATES AS WELL AS S ALE PROCEEDS OF HIS PROPRIETARY BUSINESS, THE A.O. DID NOT FIND THE SAME TO BE ACCEPTABLE IN THE ABSENCE OF ANY SUPPORT ING EVIDENCE. ACCORDINGLY, A SUM OF RS.21 LAKHS WAS ADD ED BY HIM TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSME NT COMPLETED UNDER SECTION 143(3) VIDE ORDER DATED 21. 10.2011. 3. AGAINST THE ORDER PASSED BY THE A.O. UNDER SECT ION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(A) AND THE SUBMISSION AS MADE BEFORE THE A.O. W AS REITERATED ON BEHALF OF THE ASSESSEE WHILE EXPLAINI NG THE CASH DEPOSIT OF RS. 21 LAKHS FOUND TO BE MADE IN HIS BAN K ACCOUNT ON 24.12.2008. THE LD. CIT(A) HOWEVER, DID NOT FIND THE SAME TO BE ACCEPTABLE AND CONFIRMED THE ADDITION OF RS. 21 LAKHS MADE BY THE A.O. FOR THE FOLLOWING REASONS GIVEN IN PARAS 4.2 TO 4.4 OF HIS IMPUGNED ORDER. 4.2. I HAVE CONSIDERED THE FACTS ON RECORD AND THE SUBMISSIONS OF THE A.R. I HAVE ALSO EXAMINED THE CA SH FLOW STATEMENT PREPARED BY THE APPELLANT ON THE BAS IS OF THE BANK TRANSACTIONS. THE EXPLANATION OF THE A.R. IS BASED ENTIRELY ON THE CLAIM THAT THE DEPOSITS HAD B EEN MADE OUT OF THE CASH WITHDRAWALS EARLIER MADE FROM THE SAME ACCOUNT. HOWEVER, CONTRARY TO THE A.RS CLAIM, I DO NOT FIND ANY PROXIMITY BETWEEN THE WITHDRAWALS AND THE DEPOSITS. FOR EXAMPLE, THE APPELLANT MADE A SERIES OF FIVE WITHDRAWALS RANGING FROM RS.2,00,000 TO RS.4,00,000 AGGREGATING TO RS.12,50,000 BETWEEN THE PERIOD 02.05.2008 AND WITHDREW ANOTHER SUM OF RS.8,00,000 ON 31.06.2008. THERE WAS NO REASON FOR THE APPELLANT T O MAKE THE REPEATED WITHDRAWALS IF HE HAD THE AMOUNTS WITHDRAWN EARLIER AVAILABLE WITH HIM. INDEED THE TRANSACTIONS FOLLOW A SIMILAR PATTERN THROUGH THE Y EAR. 3 ITA.NO.469/HYD/2014 MR. C. VAMSI MOHAN, NANDYAL 4.3. SIMILARLY, THE APPELLANT HAD MADE A DEPOSIT OF RS.21,00,000 ON 24.12.2008. THERE WAS A WITHDRAW AL OF RS.13,00,000 ON 17.12.2008 BEFORE THE DEPOSIT AN D OF RS.16,00,000 ON 30.12.2008 AFTER IT. THE APPELLANT HAS FAILED TO EXPLAIN WHY A SUBSTANTIAL SUM OF RS.13,00 ,000 WAS WITHDRAWN FROM THE BANK MERELY TO KEEP IT IDLE AS CASH ONLY TO REDEPOSIT IT A WEEK LATER. THE APPELLA NT HAS ALSO FAILED TO EXPLAIN WHY THE APPELLANT NEEDED TO CONTINUE WITHDRAWING CASH EVEN WHEN APPARENTLY LARG E CASH BALANCE WERE AVAILABLE WITH HIM. 4.4. THE LOGICAL EXPLANATION FOR SUCH LARGE WITHDRAWALS WOULD BE THAT THE APPELLANT NEEDED THE MONEY EITHER FOR HIS BUSINESS OR PERSONAL EXPENSES OR FOR MAKING INVESTMENTS, IN WHICH CASE THE CASH WITHDRAW N WOULD HAVE BEEN UTILIZED AND NOT BE AVAILABLE FOR REDEPOSIT. THE APPELLANT WOULD HAVE ME BELIEVE THAT HE HAD NOTHING BETTER TO DO THAN TO WITHDRAW AND DEPOS IT CASH IN A RANDOM MANNER APPARENTLY AS A PASTIME. TH E EXPLANATION OF THE APPELLANT IS CONTRARY TO THE PRO BABILITIES OF HUMAN BEHAVIOR AND IS, THEREFORE, REJECTED. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. L D. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT ALTHOUGH THERE WAS NO CASH BOOK MAINTAINED BY THE ASSESSEE TO SHOW THAT T HE DEPOSIT OF RS. 21 LAKHS MADE IN THE BANK ACCOUNT ON 24.12.2 008 WAS OUT OF THE WITHDRAWALS MADE ON EARLIER DATES, WITHD RAWAL OF RS. 13 LAKHS MADE FROM THE SAME BANK ACCOUNT JUST A WEE K BEFORE I.E., ON 17.12.2008 SHOULD ATLEAST BE TREATED AS TH E SOURCE OF CASH DEPOSIT MADE ON 24.12.2008. ALTHOUGH LEARNED D.R. IN THIS REGARD HAS CONTENDED THAT THE ASSESSEE MIGHT H AVE UTILIZED THE AMOUNT OF RS. 13 LAKHS WITHDRAWN ON 17 .12.2008 FOR SOME OTHER PURPOSE, WE FIND THAT THERE IS NOTHI NG ON RECORD TO SHOW THAT THE AMOUNT OF RS. 13 LAKHS WITHDRAWN B Y THE 4 ITA.NO.469/HYD/2014 MR. C. VAMSI MOHAN, NANDYAL ASSESSEE ON 17.12.2008 WAS USED FOR SOME OTHER PURP OSE. IN OUR OPINION, THE SAID WITHDRAWAL HAVING BEEN MADE B Y THE ASSESSEE JUST BEFORE A WEEK I.E. ON 17.12.2008, THE SAME CAN REASONABLY BE TREATED AS AVAILABLE WITH THE ASSESSE E FOR CASH DEPOSIT OF RS.21 LAKHS MADE ON 24.12.2008 ESPECIALL Y WHEN THERE IS NOTHING TO SHOW THAT THE AMOUNT OF RS. 13 LAKHS WITHDRAWN ON 17.12.2008 WAS UTILIZED BY THE ASSESSE E FOR SOME OTHER PURPOSE. WE, THEREFORE, TREAT THE CASH D EPOSIT OF RS. 21 LAKHS MADE BY THE ASSESSEE IN THE BANK ACCOU NT ON 24.12.2008 AS EXPLAINED TO THE EXTENT OF RS. 13 LAK HS AND SUSTAIN THE ADDITION MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) ON THIS ISSUE TO THE EXTENT OF RS. 8 LAK HS. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.03.201 5. SD/- SD/- (ASHA VIJAYARAGHAVAN) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 27 TH MARCH, 2015 VBP/- COPY TO 1. MR. C. VAMSI MOHAN, NANDYAL. C/O. MR. K. VASANTKUMA R & A.V.RAGHURAM, ADVOCATES, 610, 6 TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD 1. 2. THE INCOME TAX OFFICER, WARD 1, NANDYAL. 3. CIT(A)-IV, HYDERABAD. 4. CIT-III, HYDERABAD 5. D.R. I.T.A.T. A BENCH, HYDERABAD. 6. GUARD FILE