Rachamalla Omprakash, Hyd, Hyderabad V. ITO, Ward-8(2), Hyderabad, Hyderabad

ITA 586/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2375 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 25-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N RAVI BABU
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained cash credit; Unexplained expenditure; Source of fund
• Section: 69; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 586/HYD/2016 ASSESSMENT YEAR: 2008-09 SHI RACHAMALLA OMPRAKASH HYDERABAD. PAN AFGPR8241F VS. THE INCOME TAX OFFICER, WARD-8(2), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. RAMA RAO REVENUE BY : SHRI N. RAVI BABU DATE OF HEARING : 08-06-2017 DATE OF PRONOUNCEMENT : 30-06-2017 ORDER PER P. MADHAVI DEVI, J.M.: THIS APPEAL IS FILED BY THE ASSESSEE FOR THE A.Y 2008- 09 AGAINST THE ORDER OF THE CIT(A)-2 DATED 18-01-2016, HYDERABAD. AT THE OUTSET, IT IS NOTICED THAT THE APPEAL IS BARRED BY LIMITATION BY TWO DAYS. THE ASSESSEE SUBMITTED THAT THE OBJECTION RAISED BY THE REGISTRY WAS NOT CORRECT SINCE THE APPEAL WAS SUPPOSED TO BE FILED ON OR BEFORE 23- 04-2016, BUT IT IS FILED ON 25-04-2016, BECAUSE 23 RD OF APRIL, 2016 HAPPENED TO BE A SATURDAY WHICH IS A HOLIDAY FOR ITAT AND THEREFORE, THE ASSESSEE HAD FILED THE APPEAL ON IMMEDIATELY THE NEXT WORKING DAY I.E ON MONDAY BEING 25- 04-2016, AND THEREFORE THERE IS NO DELAY. WE HAVE VERIFIED THE CALENDAR FOR THE MONTH OF APRIL 2016 AND FIND THE ASSESSEES CONTENTION TO BE CORRECT. THEREFORE, WE HOLD 2 ITA NO. 586/HYD/2016 SHRI RACHAMALLA OMPRAKASH, HYDERABAD. THAT THERE IS NO DELAY IN FILING OF THE APPEAL BEFORE THE TRIBUNAL. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LD. CIT(A) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF THE A.O IN COMPLETING THE ASSESSMENT EXPARTE UNDER SEC. 144 OF THE I.T ACT. 3. THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 28,330/- MADE HOLDING THAT THERE ARE UNEXPLAINED CREDITS. 4. THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 3,00,000/- MADE BY THE A.O ON ACCOUNT OF DRAWINGS. 5. ANY OTHER GROUND THAT MAY BE URGED AT TIME OF HEARING. 2. AT THE TIME OF HEARING THE LD. COUNSEL FOR ASSESSEE SUBMITTED THAT THE ASSESSEE IS NOT PRESSING GROUND NO. 2 AND 3. THEY ARE ACCORDINGLY REJECTED. 3. AS REGARDS THE GROUND NO. 4, BRIEF FACTS ARE THAT THE ASSESSEE, AN INDIVIDUAL, IS A DEALER IN WINES. HE DID NOT FILE ANY RETURN OF INCOME FOR THE A.Y 2008-09 AND THEREFORE, A NOTICE U/S 148 OF THE IT ACT, DATED 14-05-2010, WAS ISSUED AND SERVED ON THE ASSESSEE. THE ASSESSEE DID NOT RESPOND TO THE SAID NOTICE OR THE SUBSEQUENT NOTICES. THE A.O THEREFORE, COMPLETED THE ASSESSMENT EX-PARTE U/S 144 OF THE IT ACT ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE A.O CONSIDERING THE DEPOSITS MADE INTO THE BANK ACCOUNT OF THE ASSESSEE, TREATED A SUM OF RS. 28,380/- AS UNEXPLAINED CREDITS U/S 69 OF THE IT ACT. FURTHER, HE ALSO 3 ITA NO. 586/HYD/2016 SHRI RACHAMALLA OMPRAKASH, HYDERABAD. CONSIDERED THE SIZE AND STATUS OF THE ASSESSEES FAMILY AND HELD THE SUM OF RS. 3,00,000/- AS REASONABLE EXPENDITURE TOWARDS DOMESTIC AND PERSONAL PURPOSES AND BROUGHT IT TO TAX U/S 69 OF THE IT ACT AS UNEXPLAINED EXPENDITURE. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) STATING THAT THE ASSESSEE IS THE OWNER AND PROPRIETOR OF SRI R.S. WINES, SAI BALAJI WINES AND SRI SAPTAGIRI WINES AND TOTAL WITHDRAWAL FROM THESE CONCERNS WAS RS. 80,000/- DURING THE YEAR. IT WAS ALSO SUBMITTED THAT THE HUF OF THE ASSESSEE WAS ALSO HAVING SUBSTANTIAL INCOME WHICH WAS AVAILABLE FOR THE ASSESSEE TO MEET HIS DOMESTIC AND PERSONAL EXPENSES AND THEREFORE THE ADDITIONS ON ACCOUNT OF LOW WITHDRAWALS WAS NOT WARRANTED. A COPY OF THE RETURN OF THE INCOME OF THE HUF WAS ALSO SUBMITTED. THE CIT(A) HOWEVER, OBSERVED THAT THOUGH THE ASSESSEE STATED TO HAVE WITHDRAWN FROM HIS PROPRIETARY CONCERNS, HE HAS NOT SHOWN ANY EVIDENCE TO SUPPORT THE SAID CONTENTION. THEREFORE, HE CONFIRMED THE ADDITION. 5. THE LD. COUNSEL FOR THE ASSESSEE HAS FILED BEFORE US THE PAPER BOOK CONSISTING OF RETURN OF INCOME OF THE HUF FOR A.Y 2008-09 AND ALSO THE ASSESSMENT ORDER OF THE HUF ALONG WITH THIS WRITTEN SUBMISSIONS FILED BEFORE THE CIT(A). AS SEEN FROM THE RETURN OF INCOME OF HUF, THE ASSESSEE HAS TAXABLE INCOME OF RS. 4,86,300/- FROM HOUSE PROPERTY AND ALSO RENTAL INCOME FROM TATA TELE SERVICES OF RS. 42,000/- AND THE TOTAL TAXABLE INCOME WAS RS. 5,28,300/-. FROM THE ASSESSMENT ORDER FOR THE A.Y 2008-09 OF THE HUF, IT IS SEEN THAT THE ASSESSEE ALSO RETURNED LONG TERM AND 4 ITA NO. 586/HYD/2016 SHRI RACHAMALLA OMPRAKASH, HYDERABAD. SHORT TERM CAPITAL GAINS AND THE TOTAL TAXABLE INCOME WAS ARRIVED AT RS. 1,56,47,090/-. FURTHER, THE LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT THE ASSESSEE AND HIS WIFE ARE THE ONLY MEMBERS OF THE HUF. THEREFORE, CONSIDERING THE MATERIAL BEFORE US, WE ARE SATISFIED THAT THE ASSESSEE HAS SUFFICIENT SOURCES OF INCOME TO MEET HIS DOMESTIC AND PERSONAL EXPENSES AND THEREFORE, THE ADDITION OF RS. 3,00,000/- IS NOT CALLED FOR. ACCORDINGLY, THE ASSESSEES APPEAL IS TREATED AS PARTLY ALLOWED. 6. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE, 2017. SD/- SD/- (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED:30 TH JUN , 2017. KRK 1 SRI RACHAMALLA OMPRAKASH, C/O SRI RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAYATNAGAR, HYDERABAD-500029. 2 INCOME TAX OFFICER, WARD -8(2), HYDERABAD. 3 CIT(A)-2, HYDERABAD. 4 THE PR. COMMISSIONER OF INCOME TAX-2, HYDERABAD. 5 THE DR, ITAT HYDERABAD 6 GUARD FILE