Subramanyam Tammareddy, Hyd, Hyderabad V. ITO, Ward-12(1), Hyderabad, Hyderabad

ITA 547/HYD/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6410 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 29-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 19-04-2016
• Court: TRIBUNAL
• Department Lawyers: K E SUNIL BABU
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 547/HYD/2016 ASSESSMENT YEAR: 2010-11 SUBRAMANYAM TAMMAREDDY, HYDERABAD [PAN: AEXPT5443H] VS INCOME TAX OFFICER, WARD-12(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI T. CHAITANYA KUMAR, AR FOR REVENUE : SHRI K.E. SUNIL BABU, DR DATE OF HEARING : 01-07-2016 DATE OF PRONOUNCEMENT : 13-07-2016 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-I, HYDERABAD, DATED 30-12-2015. 2. THE ISSUE IN THIS APPEAL IS WITH REFERENCE TO THE D EPOSITS IN THE BANK ACCOUNTS OF ASSESSEE. ASSESSEE IS HAVING I NCOME FROM SALARY AND FILED RETURN OF INCOME DECLARED AN AMOUNT OF RS. 2,81,750/-. AS THERE WERE DEPOSITS IN THE SAVINGS ACC OUNT OF ICICI TO AN EXTENT OF RS. 16,57,100/-, THE CASE WAS SELECTED UNDER CASS. IN THE NOTICES ISSUED, THE ASSESSING OFFICER (AO) RECO RDS THAT ASSESSEES WIFE APPEARED IN RESPONSE TO THE NOTICES AN D FURNISHED VARIOUS DETAILS AND CONFIRMATION LETTERS. IT WAS THE CON TENTION OF ASSESSEE THAT HE HAS FOUR CREDIT CARDS WHICH WERE UTILI SED FOR AVAILING TEMPORARY LOANS FOR A FRIEND OF HIM AND THE Y WERE DRAWING FUNDS FROM M/S. SPOORTHY TECHNOLOGIES OR M/S HI TECH MOTORS AND I.T.A. NO. 547/HYD/2016 SUBRAMANYAM TAMMAREDDY :- 2 -: THESE FUNDS ARE DEPOSITED IN THE BANK ACCOUNTS AND ROTATE D FREQUENTLY. THERE ARE CERTAIN HAND LOANS ALSO TAKEN F ROM VARIOUS FRIENDS FOR WHICH CONFIRMATIONS WERE FILED. THE AO DISBELIEVED THE CONTENTIONS AND BROUGHT THE ENTIRE AMOUNT TO TAX. BEFORE THE LD. CIT(A), ASSESSEE WAS UNSUCCESSFUL. LD. CIT(A) IN THE VERY BRIEF ORDER DID NOT DISCUSS ANY OF THE ISSUES AND AGREED W ITH THE AO THAT THE CREDIT WORTHINESS OF THE LENDERS HAS NOT BEEN P ROVED OR ESTABLISHED. 3. LD. COUNSEL FOR ASSESSEE REFERRING TO THE BANK ACCOUNT, EXTRACT OF CREDIT CARD RECEIPT AND PAYMENT SLIPS AND CONFIRMA TION LETTERS FILED BEFORE THE AO, SUBMITTED THAT ASSESSEE IS A SMALL TIME EMPLOYEE AND WAS HAVING VARIOUS CREDIT CARDS AND IN ORDER TO ACCOMMODATE A FRIEND FOR CERTAIN LOANS, HE WAS DISCOU NTING CREDIT CARD FROM M/S. SPOORTHY TECHNOLOGIES AND M/S HI TEC H MOTORS ON 2% COMMISSION BASIS BY SWIPING THE CARDS. THESE MO NIES WERE DEPOSITED IN THE BANK ACCOUNTS. THERE WERE ALSO CERTAI N ADVANCES TAKEN FROM KNOWN PERSONS. IT WAS SUBMITTED THAT THESE TRANSACTIONS ARE GENUINE TRANSACTIONS SUPPORTED BY THE C REDIT CARD STATEMENTS. IN THE ALTERNATE, IT WAS SUBMITTED THAT PEAK CR EDIT OF AN AMOUNT OF RS. 2,37,661/- ON 05-12-2009 MAY BE CON FIRMED IN THE ABSENCE OF ACCEPTANCE OF THE CONFIRMATION LETTERS BY THE AUTHORITIES. HE RELIED ON THE CO-ORDINATE BENCH DECIS ION IN THE CASE OF MR. C. VAMSI MOHAN, ITA NO. 469/HYD/2014 DT. 27-03-2015 IN SUPPORT OF THE CONTENTIONS. 4. LD. DR HOWEVER, SUBMITTED THAT ASSESSEE HAS NOT DIS CHARGED HIS ONUS AND ACCORDINGLY THE AMOUNTS ARE CONFIRMED. I.T.A. NO. 547/HYD/2016 SUBRAMANYAM TAMMAREDDY :- 3 -: 5. I HAVE EXAMINED THE RIVAL CONTENTIONS AND PERUSED TH E ORDERS. AS SEEN FROM THE ASSESSMENT ORDER, THE AO CLE ARLY MENTIONS THAT ASSESSEES WIFE APPEARED DURING THE PROC EEDINGS AND GAVE EXPLANATION. IN FACT ASSESSEES WIFE SMT. SOWMYA , ALSO SEEMS TO HAVE ADVANCED AN AMOUNT OF RS. 1,11,850/- FROM OU T OF HER SAVINGS AND SALARY. EVEN THIS CONFIRMATION LETTER FIL ED BEFORE THE AO WAS DISBELIEVED. NO STATEMENT WAS RECORDED FROM HER NOR ANY VERIFICATION WAS UNDERTAKEN. THIS INDICATES THAT AO HAS COME TO A PRE-JUDGED NOTION OF MAKING ADDITION OF THE ENTIRE AM OUNT. AT THE SAME TIME, IT IS ALSO NOTICED THAT CONFIRMATION LETTERS F URNISHED BY ASSESSEE DOES NOT EVEN MENTION THE COMPLETE ADDRESS O F THE PERSONS WHO ADVANCED THE FUNDS, THE RELATIONSHIP WITH ASSESSEE, DATES OF LENDING MONEY AND THE SOURCES OF LENDING MON EY. THE OTHER EVIDENCE WITH REFERENCE TO THE TRANSACTIONS OF CRED IT CARDS WAS NOT EXAMINED IN CORRECT PERSPECTIVE EITHER BY THE A O OR BY THE CIT(A). AS SEEN FROM THE SBI CARD, CITI BANK CARD AN D STATEMENTS FILED ON RECORD, THERE ARE WITHDRAWAL OF AMOUNTS FROM M/S. SPOORTHY TECHNOLOGIES AND M/S HI TECH MOTORS ETC., WH EN THERE IS EVIDENCE IN THE FORM OF TRANSACTION STATEMENTS, I AM NOT S URE HOW AO DID NOT ENQUIRE OR VERIFY THE STATEMENT OF ASSESSEE WITH REFERENCE TO THOSE TRANSACTIONS. 5.1. THERE IS ALSO NO CLARITY ON THE EXTENT OF TRANSAC TIONS PERTAINING TO CREDIT CARDS AND LOANS. ENTIRE AMOUNT HAS BEEN ADDED WITH OUT EXAMINING THE NATURE OF TRANSACTIONS. IN VIEW OF THE ABOVE, I AM OF THE OPINION THAT PROPER ENQUIRY IS R EQUIRED TO BE MADE AT THE END OF THE AO TO VERIFY ASSESSEES EXPLANATI ON ABOUT SOURCE OF CREDIT CARD TRANSACTIONS, DISCOUNTING THEM FO R TEMPORARY LOANS AND FURTHER VERIFICATION OF THE LOANS RECEIVED FROM OTHERS WITH THE NECESSARY DATES AND CREDITWORTHINESS. THE A O IS ALSO I.T.A. NO. 547/HYD/2016 SUBRAMANYAM TAMMAREDDY :- 4 -: DIRECTED TO EXAMINE WHETHER PEAK CREDIT CAN BE CONSIDE RED AS SUBMITTED BY LD. COUNSEL. HOWEVER, THESE ASPECTS ARE L EFT TO THE JUDGMENT OF THE AO WHO SHOULD EXAMINE THE FACTS AND THEN DECIDE THE ISSUE ON THE BASIS OF FACTS AND LAW. CONSEQUENTLY, I SET ASIDE THE ORDERS OF AO AND CIT(A) AND RESTORE THE ISSUE OF BANK DEPOSITS TO THE FILE OF AO FOR FRESH CONSIDERATION. 6. IN THE RESULT, ASSESSEES APPEAL IS CONSIDERED ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH JULY, 2016 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 13 TH JULY, 2016 TNMM COPY TO : 1. SHRI SUBRAMANYAM TAMMAREDDY, HYDERABAD. C/O. SHRI T. CHAITANYAKUMAR, ADVOCATE, FLAT NO. 102, GOU RI APARTMENT, URDULANE, HIMAYATNAGAR, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-12(1), HYDERABAD. 3. COMMISSIONER OF INCOME TAX(APPEALS)-I, HYDERABAD , 4. THE PR. COMMISSIONER OF INCOME TAX-I, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.