Ramchander Krishnaiyer, Hyderabad V. Income Tax Officer, Ward-6(4) , Hyderabad

ITA 52/Hyd/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5849 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-04-2021
• Assessment Year: 2009-2010
• Appeal Filed On: 17-01-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KANIKA AGARWALDR
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained cash credit; Business income; Search and seizure; Additional evidence; Tax effect
• Section: 133(6); 131; 148

Judgement Text

ITA NO 52 OF 2020 RAMCHANDER KRISHNAIYER HYDERA BAD PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.52/HYD/2020 ASSESSMENT YEAR: 2009-10 SRI RAMCHAND ER KRISHNAIYER HYDERABAD PAN:ADFPK5165L VS. INCOME TAX OFFICER WARD 6(4) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI A.V. RAGHURAM REVENUE BY : SMT. KANIKA AGARWAL,DR DATE OF HEARING: 08/04/2021 DATE OF PRONOUNCEMENT: 28/04/2021 ORDER THIS IS ASSESSEES APPEAL FOR THE A.Y 2009-10 AGAIN ST THE ORDER OF THE CIT (A)-6, HYDERABAD, DATED 30.08. 2019. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED CIT(A) IS NOT ONLY ERR ONEOUS BOTH ON FACTS AND IN LAW BUT IS PERVERSE. 2. THE ORDER OF THE LEARNED CIT(A) IS WITHOUT JURIS DICTION, AS THE APPELLANT'S CASE IS TRANSFERRED FROM RANGE 6 TO RAN GE 12 BY THE TIME THE APPEAL IS HEARD. 3. THE LEARNED CIT(A) HAVING CALLED FOR REMAND REPO RT ERRED IN DECIDING THE APPEAL WITHOUT RECEIVING THE REMAND RE PORT OR MIGHT HAVE ANTI DATED THE ORDER AFTER RECEIVING THE REMAND REPORT FROM THE AO OF WARD 12(2), AS THE AO HAS INI TIATED REMAND PROCEEDINGS VIDE LETTER DATED 14-10-2019 ADD RESSED TO THE ASSESSEE AND COLLECTED INFORMATION. 4. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE AO IN THE EARLIER ASSESSMENT WHICH IS RE-OPENED UJS.148 HAS A CCEPTED THE ADVANCES AFTER VERIFYING THE SOURCES AND WHEN A DVANCES IS RECEIVED BACK NO MORE EVIDENCE THAN CONFIRMATION FROM THE RECIPIENT OF ADVANCE IS ENOUGH TO PROVE THE CREDIT AND THEREBY ERRED IN CONFIRMING THE ACTION OF THE AO IN MAKING ADDITION OF RS.16,30,259. ITA NO 52 OF 2020 RAMCHANDER KRISHNAIYER HYDERA BAD PAGE 2 OF 6 5. THE LEARNED CIT(A) ERRED IN CONFIRMING THE FINDI NG OF THE AO ABOUT CLAIM OF DEDUCTION U/S.80GG OF AN AMOUNT OF R S.24,000 WITHOUT WAITING FOR REMAND REPORT. (TAX EFFECT - RS .5,11,166) FOR THESE AND OTHER GROUNDS THAT MAY BE URGED, IT I S PRAYED THAT THE HON'BLE TRIBUNAL MAY BE PLEASED TO ALLOW T HE APPEAL. 2. AS REGARDS GROUND NO.5, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FILED ADDI TIONAL EVIDENCE IN SUPPORT OF THE DEDUCTION U/S 80GG OF THE ACT AND PRAYED FOR ADMISSION OF THE ADDITIONAL EVIDENCE AND RECONSIDER ATION OF THE ISSUE IN ACCORDANCE WITH LAW. THE LEARNED DR ALSO HAD NO OBJECTION TO THE SAME. THEREFORE, I ADMIT THE ADDI TIONAL EVIDENCE FILED BY THE ASSESSEE AND REMAND THE ISSUE TO THE F ILE OF THE ASSESSING OFFICER FOR DENOVO RECONSIDERATION IN ACC ORDANCE WITH LAW. 3. AS REGARDS GROUND NO.4, BRIEF FACTS ARE THAT THE ASSESSEE INDIVIDUAL, ENGAGED IN THE BUSINESS OF RUN NING AN AUTOMOBILE WORKSHOP, FILED HIS RETURN OF INCOME FOR THE A.Y 2009- 10 ON 30.07.2009 ADMITTING A TOTAL INCOME OF RS.1,9 8,510/-. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3), THE A SSESSING OFFICER REQUIRED THE ASSESSEE TO FILE INFORMATION I NCLUDING COPIES OF THE BANK A/C STATEMENTS FOR THE FINANCIAL YEAR 2 009-10 ALONG WITH DETAILS OF THE TRANSACTIONS AND THE SOURCES FO R THE CREDITS THEREIN. THE ASSESSEE FURNISHED THE INFORMATION CAL LED FOR. ON PERUSAL OF THE SAME, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MADE CASH DEPOSITS TO THE EXTENT OF RS .14,86,061/- INTO HIS BANK A/C MAINTAINED WITH STATE BANK OF HYD ERABAD. THE ASSESSING OFFICER OBTAINED THE DETAILS OF THE BANK A/C FROM SBH, RAIDURG BRANCH U/S 133(6) OF THE ACT AND ALSO OBSER VED THAT THE ASSESSEE HAS TWO ACCOUNTS WITH THE SAME BRANCH VIZ. ONE SAVINGS BANK A/C IN HIS NAME AND ONE CURRENT A/C IN THE NAM E OF HIS PROPRIETARY CONCERN SRI LAKSHMI MOTORS. THE ASSESSE E WAS ITA NO 52 OF 2020 RAMCHANDER KRISHNAIYER HYDERA BAD PAGE 3 OF 6 THEREFORE, ASKED TO EXPLAIN THE CASH DEPOSITS INTO THESE A/CS ALONG WITH NECESSARY AND SUFFICIENT EVIDENCE. IN RE SPONSE, THE ASSESSEE SUBMITTED 2 CASH BOOKS I.E. ON IN THE NAME OF PROPRIETARY CONCERN EXPLAINING THE CASH DEPOSITS IN HIS CURRENT A/C AND ANOTHER IN HIS INDIVIDUAL NAME. ON VERIFICA TION OF THE SAID CASH BOOKS, THE ASSESSING OFFICER FOUND THAT T HE SOURCES FOR THE CASH DEPOSITS IN HIS CURRENT A/C ARE SHOWN TO B E MAINLY FROM HIS BUSINESS RECEIPTS, WHEREAS THE SOURCES FOR THE CASH DEPOSITS IN HIS SAVINGS BANK A/C IS SHOWN TO BE AN OPENING B ALANCE OF RS.4,19,302/-, WITHDRAWALS FROM THE BANK A/C AND TH E RECEIPT OF ADVANCE OF RS.31,86,000/- TO SMT. G. SUREKHA GIVEN IN THE FINANCIAL YEAR 2007-08 FOR PURCHASE OF PLOT WHICH I S RECEIVED BACK DURING THE RELEVANT FINANCIAL YEAR. THE ASSESSING O FFICER FURTHER CHECKED THE CASH BOOK AND FOUND THAT THE OPENING BA LANCE WAS OF RS.94,000/- ONLY AND NOT RS.4,19,302/- AS CLAIMED B Y THE ASSESSEE. HE THEREFORE, MADE THE ADDITIONS AS UNEXP LAINED CASH DEPOSITS. 4. WITH REGARD TO THE AMOUNT WHICH IS ALLEGEDLY REC EIVED BACK FROM SMT. G. SUREKHA, HE OBSERVED THAT THE SAI D AMOUNT WAS PAID IN CASH AS WELL AS THROUGH CHEQUES I.E. RS .14.00 LAKHS AND THE BALANCE IN THE FORM OF CASH ON VARIOUS DATE S. WHEN THE VENDEE SMT. G. SUREKHA WAS SUMMONED U/S 131 OF THE I.T. ACT, HER HUSBAND SRI G. RATNA RAO APPEARED AND SUBMITTED THAT SMT. G. SUREKHA DOES NOT HAVE ANY BANK A/C AND THAT THE CHEQUES OF RS.8.00 LAKHS AND 6.00 LAKHS WERE NOT RECEIVED DIRE CTLY BY HER AS SHE REQUESTED THE ASSESSEE TO GIVE THE SAID CHEQUES IN THE NAME OF SRI MOHD ABDUL SAMAD (A FRIEND OF HER HUSBAND) A S HE WAS IN URGENT NEED OF MONEY AND THAT SRI MOHD ABDUL SAMAD HAD RETURNED THE AMOUNT BACK TO HER IN CASH AFTER SELLI NG HIS LAND, WHICH SHE RETURNED BACK TO THE ASSESSEE. THE ASSES SING OFFICER, ITA NO 52 OF 2020 RAMCHANDER KRISHNAIYER HYDERA BAD PAGE 4 OF 6 HOWEVER, HELD THAT THE ASSESSEE COULD NOT CONCLUSIV ELY PROVE THE SOURCES OF RS.14.00 LAKHS GIVEN BY HIM BY WAY OF CH EQUES. THEREFORE, HE TREATED THE NEGATIVE BALANCE OF CASH OF RS.19,55,661/- AS UNEXPLAINED CASH CREDIT AND BROUG HT IT TO TAX. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) WHO GRANTED PARTIAL RELIEF TO THE ASSESSEE BY HOLDING T HAT THE CLOSING CASH BALANCE OF THE EARLIER YEAR CANNOT BE TINKERED WITH BY THE ASSESSING OFFICER AND THAT THE CLOSING BALANCE OF R S.4,19,302/- SHOULD BE ACCEPTED AS OPENING BALANCE OF THIS FINAN CIAL YEAR. THUS, HE GRANTED RELIEF OF RS.3,25,302/- 5. AS REGARDS THE CASH RECEIPTS OF RS.31,86,300/- F ROM SMT. G. SUREKHA, THE CIT (A) HELD THAT THE ASSESSEE HAS FAILED TO PROVE THAT THERE WAS ANY AGREEMENT OF SALE WITH SM T. G. SUREKHA AND THAT SHE REPAID THE AMOUNT TO THE ASSESSEE. 6. AS REGARDS THE CASH WITHDRAWALS FROM THE BANK NO T BEING TREATED AS SOURCES FOR CASH DEPOSITS, THE CIT (A) CONFIRMED THE ASSESSMENT ORDER AND THE ASSESSEE IN IN SECOND APPEAL BEFORE US. 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ADVANCES WERE GIVEN BY THE ASSESSEE TO SMT. G. SUREKHA IN THE EARLIER ASSESSMENT FOR THE A.Y 2008-09 WHICH WA S REOPENED U/S 148 OF THE ACT AND THE ASSESSING OFFICER HAS AC CEPTED THE SOURCES FOR THE ADVANCES WHICH ARE RECEIVED BACK DU RING THE A.Y BEFORE US. HE SUBMITTED THAT THE CONFIRMATION LETTE R OF SMT. G. SUREKHA WAS FURNISHED TO PROVE THAT THE AMOUNT WAS PAID AND RECEIVED BACK BY THE ASSESSEE AND THEREFORE, THE AS SESSING OFFICER AND THE CIT (A) HAVE ERRED IN MAKING THE ADDITION O F ITA NO 52 OF 2020 RAMCHANDER KRISHNAIYER HYDERA BAD PAGE 5 OF 6 RS.16,30,250/-. THE LEARNED COUNSEL FOR THE ASSESSE E HAS DRAWN MY ATTENTION TO THE CASH BOOK OF THE ASSESSEE FOR T HE RELEVANT PERIOD AND ALSO THE ASSESSMENT ORDER FOR A.Y 2008-0 9 IN SUPPORT OF HIS CONTENTION. 8. THE LEARNED DR HOWEVER, SUBMITTED THAT THERE WAS NO EVIDENCE THAT SMT. G. SUREKHA EXISTED AND THAT THE IDENTITY OF THE PERSON WHO IS ALLEGED TO HAVE RECEIVED ADVANCE OF R S.14.00 LAKHS BY WAY OF CHEQUES ALSO IS NOT PROVED AND THEREFORE, THERE IS NO REASONABLE EXPLANATION GIVEN BY THE ASSESSEE WITH R EGARD TO THE RECEIPT OF THIS AMOUNT. 9. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, I FIND THAT THE UNEXPLAINED CASH CREDIT TO THE EXTENT OF RS.16.00 LAKHS WAS NEEDED TO BE EXPLAINED BY THE AS SESSEE. AS FAR AS THE RECEIPT OF RETURN OF ADVANCE BY SMT. G. SURE KHA IS CONCERNED, WHEN SUMMONS WERE ISSUED TO HER, HER HUS BAND SHRI G. RATNA RAO APPEARED AND SUBMITTED THE EXPLANATION . THEREFORE, THE IDENTITY OF SMT. G. SUREKHA IS ESTABLISHED. AS FAR AS THE EXPLANATION GIVEN THAT THE CHEQUES WERE GIVEN IN TH E NAME OF HER HUSBANDS FRIEND MR.MOHD ABDUL SAMAD IS CONCERNED, I FIND THAT IT IS SUPPORTED BY THE BANK STATEMENT. IT IS ALSO E STABLISHED THAT SMT.G.SUREKHA IS NOT IN ANY WAY RELATED TO THE ASSE SSEE. THEREFORE, THE CONFIRMATION GIVEN BY SMT. SUREKHA I S TO BE EXAMINED AND CONSIDERED ON ITS OWN LEGS. IT IS TO B E NOTED THAT THE ASSESSEE HAS NOT FILED THE CONFIRMATION OF MR MOHD ABDUL SAMAD, BUT THE CHEQUES ARE UNDISPUTEDLY ISSUED IN THE NAME OF MR.ABDUL SAMAD. IN THE EARLIER A.Y, THE ASSESSEE HAS EXPLAIN ED THE SOURCES FOR THE ADVANCES GIVEN FOR PURCHASE OF THE PROPERTY AND THE SAID ASSESSMENT WAS REOPENED AND THE SOURCES WERE ACCEPT ED BY THE ITA NO 52 OF 2020 RAMCHANDER KRISHNAIYER HYDERA BAD PAGE 6 OF 6 ASSESSING OFFICER. THEREFORE, THE TRANSACTION OF GI VING ADVANCE BY THE ASSESSEE IS PROVED. WHAT IS LEFT TO BE PROVED I S THAT THE SAID AMOUNT HAS BEEN RETURNED BY SMT. G. SUREKHA. ALL TH E CASH DEPOSITS TO THE EXTENT OF RS.14.00 LAKHS ARE ALLEGE DLY MADE BY SMT. G. SUREKHA. WHEN THE ASSESSING OFFICER FOR THE A.Y 2008-09 HAS ACCEPTED THAT THE ASSESSEE HAS GIVEN ADVANCE FO R PURCHASE OF A PROPERTY AND SINCE THERE IS NO PURCHASE OF PROPER TY DURING THE RELEVANT A.Y, THE CIRCUMSTANTIAL EVIDENCE IS IN FAV OUR OF THE ASSESSEE THAT HE HAS RECEIVED BACK THE ADVANCE PAID IN THE EARLIER A.Y. THEREFORE, I AM OF THE OPINION THAT THE SOURC ES FOR THE EXTENT OF RS.14.00 LAKHS IS TO BE DEEMED AS EXPLAINED BY T HE ASSESSEE. WITH REGARD TO THE OTHER BALANCE I.E. CASH WITHDRAW ALS WHICH WERE UTILIZED FOR OTHER PURPOSES THAN THE DEPOSITS INTO THE BANK, I DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT (A). THE ADDITION OF SUCH AN ACCOUNT IS ACCORDINGLY CONFIRME D. 10. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH APRIL, 2021. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 28 TH APRIL, 2021. VINODAN/SPS COPY TO: S.NO ADDRESSES 1 SRI K. RAMCHANDER, 13-6-434/C/13 AND 14 MARUTINAG AR, PILLAR NO.84, LANGAR HOUSE, HYDERABAD 500008 2 INCOME TAX OFFICER WARD 6(4) PRESENTLY WITH INCOME TAX OFFICER WARD 12(2) HYDERABAD 3 CIT (A)-6, HYDERABAD 4 PR. CIT -6, HYDERABAD 5 DR, ITAT HYDERABAD BENCHES 6 GUARD FILE BY ORDER