Srinivas Pulluri , Karimnagar V. Income Tax Officer, Ward-3, Karimnagar

ITA 516/Hyd/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8182 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 02-12-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 10-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KIRAN KATTA
• Keywords: Gift; Set aside
• Section: 143(3); 143(1); 13; 22; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH, HYDERABAD BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER ITA NO. 516 / HYD /201 9 (ASST. YEAR : 20 15 - 16 ) SRINIVAS PULLURI , 6 - 1 - 114, ASHOKNAGAR, KARIMNAGAR . V S . IT O , WARD - 3 , KARIMNAGAR . PAN NO. AUUPP 3451 A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.C. DEVDAS AR . DEPARTMENT BY : SHRI KIRAN KATTA SR. DR DATE OF HEARING : 02 / 12 /201 9 . DATE OF PRONOUNCEMENT : 22 / 0 1 /20 20 . O R D E R TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 12 , HYDERABAD , DATED 04 /0 2 /201 9 FOR THE ASSESSMENT YEAR 20 15 - 16 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT ASSESSEE IS RUNNING A KIRANA & GENERAL STORE, FILED HIS RETURN OF INCOME BY DECLARING TOTAL INCOME OF RS. 4,34,420/ - . THE RETURN FILED BY THE ASSESSEE WAS PROCESSED U/SEC. 143(1) AND SUBSEQUENTLY SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED U/SEC. 143(3) DATED 06/12/2017 . IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTED THAT ASSESSEE WAS INVESTED IN SECURITIES TRANSACTIONS AND 2 ITA NO. 516 / HYD /2019 ( SRINIVAS PULLURI ) REQUESTED TO PRODUCE THE SOURCE OF INVESTMENT . THE ASSESSEE HAS FILED THE BANK STATEMENT BEFORE THE ASSESSING OFFICER AND ON VERIFICATION OF THE SAME IT WAS OBSERVED THAT ASSESSEE HAS MADE SEVERAL CASH DEPOSITS IN HIS BANK ACCOUNT AND IN TURN INVESTED IN SECURITIES. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF SUCH DEPOSITS WHICH WAS INVESTED IN SHARE TRADING/SECURITIES TRANSACTIONS. IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT HE IS RUNNING A RETAIL BUSINESS IN THE NAME AND STYLE OF M/S.P.SRINIVAS KIRANA & GENERAL STORE FROM PAST 35 YEARS AND DID NOT HAVE ANY TAXABLE INCOME DURING THE PERIOD 1993 - 94 TO 2010 - 11 . AS THE ASSESSEES INCOME EXCEEDED THE TAXABLE INCOME , ASSESSEE FILED RETURNS FOR THE PERIOD 2011 - 12, 2012 - 13 & 2013 - 14 RESPECTIVELY . THE SOURCES OF INVESTMENT IN SHARE TRANSACTION S ARE HIS SAVINGS ACCUMULATED DURING THE PREVIOUS YEARS AND AMOUNT RECEIVED FROM HIS SON SHRI PULLURI SRAVAN . THE ASSESSING OFFICER AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE OBSERVED THAT THE AR OF THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF CASH DEPOSITS OF RS. 13,12,000/ - IN ACCOUNT BEARING NO. 2498101052872 WITH CANARA BANK, KARIMNAGAR BRANCH AND THEREFORE SAME IS TREATED AS UNEXPLAINED INCOME OF THE ASSESSEE FOR INVESTMENT IN SHARES TRANSACTIONS . ACCORDINGLY, ADDITION WAS MADE. 3 ITA NO. 516 / HYD /2019 ( SRINIVAS PULLURI ) 3 . BEFORE THE LD. CIT(A) , THE ASSESSEE HAS SUBMITTED THAT HE IS RUNNING KIRANA & GENERAL STORE FROM THE PAST 35 YEARS AND HE HAS DEPOSITED THE SAVINGS IN THE BANK ACCOUNT FROM THE SAME BUSINESS. HE HAS NOT FILED RETURNS OF INCOME BECAUSE HIS TAXABLE INCOME IS BELOW AS PRESCRIBED BY THE ACT AND SUBMITTED THAT ADDITION MAY BE DELETED . THE LD. CIT(A) AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE HAS OBSERVED THAT THE HOUSEHOLD EXPENSES INCURRED BY THE ASSESSEE ARE ABSOLUTELY LOW LEVEL AND SO FAR AS GIFT RECEIVED IN CA SH BY THE ASSESSEE FROM HIS RELATIVES, RANGING FROM RS. 75,000/ - TO AS MUCH AS RS. 10,85,000/ - FOR WHICH NO EVIDENCE WHATSOEVER HAS BEEN FURNISHED EITHER DURING THE ASSESSMENT PROCEEDINGS OR DURING THE APPELLATE PROCEEDINGS , HENCE, CONFIRMED THE ORDER OF T HE ASSESSING OFFICER. 4 . ON BEING AGGRIEVED , ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 5. LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE IS RUNNING A KIRANA & GENERAL STORE AND OUT OF HIS PAST SAVINGS , HE HAS DEPOSITED CASH IN HIS BANK ACCOUNT AND PURCHASED THE SHARES AND SECURITIES, THEREFORE THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) CANNOT SURVIVE . 6 . ON THE OTHER HAND, LD.DR STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4 ITA NO. 516 / HYD /2019 ( SRINIVAS PULLURI ) 7 . I HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD . 8 . THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO CASH DEPOSITS MADE BY THE ASSESSEE TO THE TUNE OF RS. 13.12 LAKHS FROM THAT ASSESSEE MADE INVESTMENTS IN SHARES AND SECURITIES. WHEN THE ASSESSING OFFICER ASKED THE EXPLANATION, THE ASSESSEE HAS SUBMITTED THAT CASH DEPOSITS MADE BY THE ASSESSEE ARE OUT OF HIS BUSINESS ACTIVITY OF KIRANA & GENERAL STORE AND SUBMITTED TH A T SAME MAY BE CARRI ED AS A SOURCE OF INVESTMENT . H OWEVER, THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND MADE THE ADDITION . O N APPEAL BEFORE THE LD. CIT(A) , THE ASSESSEE HAS REITERATED THE SUBMISSIONS WHICH WERE MADE BEFO R E THE ASSESSING OFFICER AND FURTHER SUBMITTED THAT TO THE TUNE OF RS.10.85 LAKH WAS RECEIVED FROM HIS RELATIVES AS GIFTS. THE LD.CIT(A) HAS OBSERVED THAT ASSESSEE HAS NOT FILED ANY EVIDENCE IN RESPECT OF CASH GIFTS RECEIVED FROM HIS RELATIVES. IN MY OPINION, WHEN THE ASSESSEE HAS SUBMITTED THAT HE HAS RECEIVED CASH GIFTS FROM HIS REL A TIVES, THE DETAILS OF THE CASH RECEIPTS OUGHT TO HAVE BEEN ASKED BY THE LD. CIT(A). THE LD. CIT(A) HAS NOT ASKED THE ASSESSEE TO SUBMIT THE DETAILS NOR ASSESSEE FILED THE SAME. UNDER THESE CIRCUMSTANCES , IN MY OPINION, ONE MORE OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE TO SUBSTANTIATE HIS CASE BEFORE THE 5 ITA NO. 516 / HYD /2019 ( SRINIVAS PULLURI ) LD.CIT(A). THEREFORE, I SET ASIDE THE ORDER PASSED BY THE LD.CIT(A) AND REMIT THE MATTER BACK TO HIM WITH A DIRECTION TO EXAMINE THE DET AILS IN RESPECT OF CASH GIFTS RECEIVED FROM HIS RELATIVES AND PASS ORDERS AFRESH IN ACCORDANCE WITH LAW AND ALSO DIRECT THE ASSESSEE TO FILE ALL THE RELEVANT DETAILS BEFORE TH E LD. CIT(A) WHEN THE DATE IS GIVEN FOR HEARING. THUS, THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 9 . IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON TH IS 2 2 N D DAY OF JAN. , 20 20 . S D / - ( V. DURGA RAO ) JUDICIAL MEMBER DATED : 2 2 N D JANUARY , 20 20 . VR/ - COPY TO: 1. THE ASSESSEE SRINIVAS PULLURI, 6 - 1 - 114, ASHOKNAGAR, KARIMNAGAR. 2. THE REVENUE ITO, WARD - 3, KARIMNAGAR. 3. THE PR. CIT - II, HYDERABAD . 4. THE CIT(A) - 12, HYDERABAD. 5. THE D.R . , HYDERABAD. 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.