ACIT,Central Circle - 9, Hyderabad V. M/s Prapurna Properties Pvt Ltd, Secunderabad

ITA 630/HYD/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82614 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 04-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 630/HYD/2014 ASSESSMENT YEAR: 2009-10 ASST. COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE 9, HYD. M/S PRAPURNA PROPERTIES PVT. LTD., SECUNDERABAD. PAN AACCS 8996A (APPELLANT) (RESPONDENT) REVENUE BY SHRI RAJAT MITRA ASSESSEE BY SHRI K.C. DEVDAS DATE OF HEARING 16-12-2014 DATE OF PRONOUNCEMENT 19-12-2014 O R D E R PER SAKTIJIT DEY, J.M.: THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST ORDER DATED 29/01/2014 OF LD. CIT(A)-I, HYDERABAD FOR THE ASSES SMENT YEAR 2009- 10. 2. DEPARTMENT IS AGGRIEVED WITH THE DECISION OF LD. CIT(A) IN DELETING THE ADDITION OF RS. 1,10,66,000 MADE BY AO U/S 68 OF THE ACT. 3. BRIEFLY THE FACTS RELATING TO THE ISSUE IN DISPU TE ARE, ASSESSEE IS A COMPANY. FOR AY UNDER CONSIDERATION, ASSESSEE HA D FILED ITS RETURN OF INCOME ON 29/09/2010 DECLARING INCOME OF RS. 17, 62,590. DURING THE SCRUTINY ASSESSMENT PROCEEDING, ON EXAMINING TH E BANK STATEMENT FURNISHED BY ASSESSEE, AO NOTICED THAT AS SESSEE DURING 2 ITA NO. 630/HYD/2014 M/S PRAPURNA PROPERTIES PVT. LTD. THE RELEVANT PREVIOUS YEAR HAS MADE THE FOLLOWING C ASH DEPOSITS IN DIFFERENT BANK ACCOUNTS HELD BY IT ANDHRA BANK, PET BASHEERBAG A/C NO. SOD/01/00009999 DATE AMOUNT IN RS. 09/06/2008 25,00,000 11/06/2008 20,00,000 02/09/2008 4,50,000 12/12/2008 1,50,000 TOTAL 51,00,000 ANDHRA BANK, JUBILEE HILLS A/C NO. CA/0100900376 DATE AMOUNT IN RS. 07/05/2008 20,00,000 11/06/2008 25,00,000 TOTAL 45,00,000 ANDHRA BANK, JUBILEE HILLS A/C NO. 021811011900298 DATE AMOUNT IN RS. 27/08/2008 10,00,000 06/10/2008 3,00,000 07/01/2008 1,66,000 TOTAL 14,66,000 ON FINDING SUCH CASH DEPOSITS, AO CALLED UPON ASSES SEE TO EXPLAIN THE SOURCE OF SUCH CASH DEPOSITS. IN REPLY TO THE Q UERY MADE BY AO, ASSESSEE SUBMITTED THAT IT IS IN REAL ESTATE BUSINE SS AND THE MAIN OBJECT OF ASSESSEE COMPANY IS DEVELOPMENT AND CONST RUCTION OF PROPERTIES. IT WAS SUBMITTED, DURING THE YEAR 2008- 09, REAL ESTATE BUSINESS IN AND AROUND HYDERABAD WAS IN ENCOURAGING STATE, HENCE, MANAGEMENT WANTED TO PURCHASE LAND FOR DEVELOPMENT AND CONSTRUCTION. TOWARDS THIS PURPOSE, MANAGEMENT APPR OACHED SOME LAND LORDS TO PURCHASE LAND IN AND AROUND HYDERABA D. AS MOST OF THE LAND OWNERS ARE AGRICULTURISTS, GENERALLY THEY DEMA ND PAYMENT THROUGH CASH ONLY. FOR THAT REASON ALONE, THE MANAG EMENT WITHDREW CASH FROM THE BANKS FOR MAKING PAYMENT TO AGRICULTU RISTS. HOWEVER, IN THE MEANTIME, DUE TO FINANCIAL CRISIS MANAGEMENT DE CIDED TO CANCEL ALL NEW PURCHASES. THEREFORE, MANAGEMENT NEGOTIATED WITH LAND 3 ITA NO. 630/HYD/2014 M/S PRAPURNA PROPERTIES PVT. LTD. OWNERS AND COLLECTED THE AMOUNTS PAID TO THEM, WHIC H WERE DEPOSITED IN THE RESPECTIVE BANK ACCOUNTS. IN SUPPORT OF SUCH CONTENTION, ASSESSEE ALSO PRODUCED THE CASH BOOK TO SHOW THAT C ASH DEPOSITS MADE WERE FROM OUT OF THE CASH AVAILABLE AND ROUTED THROUGH CASH BOOK. AO, HOWEVER, WAS NOT CONVINCED WITH THE EXPL ANATION OF ASSESSEE. HE OBSERVED THAT ASSESSEE COMPANY DID NOT FURNISH ANY DOCUMENTARY EVIDENCE LIKE RECEIPTS COLLECTED ON ADV ANCES MADE TO LAND LORDS, DETAILS OF LAND LORDS TO WHOM ADVANCES WERE MADE, DETAILS OF ADVANCES RECOVERED FROM LAND LORDS AND AGREEMENT IF ANY ENTERED BY ASSESSEE WITH LAND LORDS. THOUGH AO ACCEPTED THE FACT THAT ASSESSEES CASH BOOK HAD SUFFICIENT CASH BALANCES O N THE DATES OF DEPOSITS INTO THE BANK ACCOUNT, HOWEVER, HE OBSERVE D, IT DID NOT SHOW ANY CASH ADVANCES MADE TO THE LAND LORDS AND CASH A DVANCES RECOVERED FROM THE LAND LORDS. AO OBSERVE D THAT AS THERE IS NO DIRECT NEXUS BETWEEN CASH WITHDRAWALS AND CASH DEPOSITS, A SSESSEES EXPLANATION CANNOT BE ACCEPTED. HE FURTHER OBSERVED THAT NO DOCUMENTARY EVIDENCE WAS ALSO FURNISHED BY ASSESSEE IN SUPPORT OF THE CLAIM MADE. AO, ULTIMATELY, REJECTING THE SUBMI SSIONS OF ASSESSEE, TREATED THE ENTIRE CASH DEPOSIT OF RS. 1, 10,66,000 AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. BEING AG GRIEVED OF SUCH ADDITION, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT( A). 4. IN COURSE OF HEARING OF APPEAL BEFORE LD. CIT(A) , ASSESSEE SUBMITTED THAT SIMILAR ADDITION MADE FOR THE PRECED ING AY I.E. AY 2008-09 IN ASSESSEES OWN CASE WAS DELETED BY LD. C IT(A) AND DEPARTMENTS APPEAL AGAINST LD. CIT(A)S ORDER WAS ALSO DISMISSED BY ITAT. 5. LD. CIT(A) AFTER TAKING NOTE OF THE OBSERVATIONS MADE BY ASSESSEE, LD. CIT(A) IN ASSESSEES OWN CASE FOR AY 2008-09 WHILE DELETING SIMILAR ADDITION AND AS WELL AS OBSERVATIO NS MADE BY ITAT IN ITA NO. 22/HYD/2012 WHILE CONFIRMING THE ORDER OF L D. CIT(A), DELETED THE ADDITION MADE BY AO BY HOLDING AS UNDER: 4 ITA NO. 630/HYD/2014 M/S PRAPURNA PROPERTIES PVT. LTD. 5.7 IT MAY BE NOTED THAT PRINCIPLE OF RES JUDICATA DOES NOT APPLY TO THE INCOME TAX PROCEEDINGS BUT IN THE INSTANT CASE, THE AO MADE ADDITION ON THE SAME LINES AND WI TH THE SAME ARGUMENT WITHOUT ANY CORROBORATIVE EVIDENCE OR FINDINGS AS DONE IN AY 2008-09. EVEN I AM NOT IN AGREEMENT W ITH THE CONTENTION OF THE APPELLANT THAT YEAR AFTER YEAR, I T WITHDRAWS MONIES FROM THE BANKS AND FINDING THAT THERE IS POO R REAL ESTATE MARKET AND FINANCIAL CRISIS, HAS RE-DEPOSITED THE S AME INTO THE BANK ACCOUNTS AGAIN. BUT SINCE THE AO HAS NOT REJE CTED THE BOOKS OF ACCOUNT AND HAS GIVEN A FINDING THAT THERE IS SUFFICIENT CASH BALANCE IN ITS CASH BOOK AND THERE WAS NO DISC USSION WHATSOEVER ON THE GENERATION OF THE UNACCOUNTED MON EY IN THIS CASE, I CONCUR WITH THE FINDING GIVEN BY MY COLLEAG UE, CIT(A)- VII WHICH HAS BEEN CONFIRMED BY THE HONBLE ITAT, H YDERABAD. ACCORDINGLY, THE ADDITION OF RS. 1,10,66,000 MADE U /S 68 OF THE ACT IS ORDERED TO BE DELETED. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. BOTH THE LD. DR AND LD. AR AGREED THAT SIMILAR NATU RE OF ADDITION MADE IN THE PRECEDING AY I.E. AY 2008-09 WAS DELETE D BY LD. CIT(A) AND TRIBUNAL ALSO CONFIRMED THE ORDER OF LD. CIT(A) WHILE DISMISSING DEPARTMENTS APPEAL. ON PERUSAL OF THE FACTS AND MA TERIALS ON RECORD AS WELL AS THE ORDERS PASSED BY LD. CIT(A) AS WELL AS ITAT IN ASSESSEES OWN CASE FOR PREVIOUS AY 2008-09, WHICH HAVE BEEN REPRODUCED IN THE IMPUGNED ORDER OF LD. CIT(A), IT IS EVIDENT THAT IDENTICAL NATURE OF ADDITION WAS MADE BY AO AT THE HANDS OF ASSESSEE IN THE PRECEDING AY. HOWEVER, LD. CIT(A) FINDING TH AT THERE WAS SUFFICIENT CASH BALANCE IN THE CASH BOOK, WHICH HAV E NEXUS WITH THE DEPOSITS MADE IN THE BANK ACCOUNT, DELETED THE ADDI TION. ITAT ALSO CONFIRMED THE ORDER OF LD. CIT(A) IN ORDER PASSED I N ITA NO. 22/HYD/12. FACTS ARE MATERIALLY SAME IN THE IMPUGNE D AY ALSO. AS CAN BE SEEN FROM THE ASSESSMENT ORDER ITSELF, AO HA S ACKNOWLEDGED THAT THERE WAS SUFFICIENT CASH BALANCE IN THE CASH BOOK ON THE DATE CASH DEPOSITS WERE MADE IN THE BANK ACCOUNTS. THAT BEING THE CASE, ASSESSEES EXPLANATION THAT CASH DEPOSITS INTO THE BANK ACCOUNTS WERE OUT OF CASH AVAILABLE WITH IT CANNOT BE DISBEL IEVED UNLESS THERE 5 ITA NO. 630/HYD/2014 M/S PRAPURNA PROPERTIES PVT. LTD. ARE STRONG EVIDENCES BROUGHT ON RECORD TO FALSIFY A SSESSEES CLAIM. AS IN THE PRESENT CASE, AO HAS NOT BROUGHT ANY EVIDENC E ON RECORD TO FALSIFY ASSESSEES CLAIM AND THE ADDITION HAS BEEN MADE MERELY ON PRESUMPTIONS AND SURMISES, WE ARE INCLINED TO UPHOL D THE ORDER OF LD. CIT(A). FROM THE GROUNDS RAISED BY DEPARTMENT, IT I S ALSO CLEAR THAT THE DEPARTMENT DOES NOT DISPUTE THE FACT THAT ITAT IN PRECEDING AY HAS DECIDED THE SIMILAR ISSUE IN FAVOUR OF ASSESSEE . HOWEVER, ONLY BECAUSE THE DEPARTMENT WANTS TO PREFER APPEAL AGAIN ST SUCH ORDER OF ITAT, THEY HAVE PREFERRED THE PRESENT APPEAL. IN OU R VIEW THAT IS NOT A VALID GROUND TO SET ASIDE THE ORDER OF LD. CIT(A). IN THE AFORESAID VIEW OF THE MATTER, WE UPHOLD THE ORDER OF LD. CIT(A) BY DISMISSING THE GROUNDS RAISED BY DEPARTMENT. 7. IN THE RESULT, DEPARTMENTS APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 19/12/2014 SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 19 TH DECEMBER, 2014 KV COPY TO:- 1) ACIT (I/C), CENTRAL CIRCLE 9, 8 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD 500 004. 2) M/S PRAPURNA PROPERTIES PVT. LTD., SURVEY NO. 74 /E, NEAR LYO COLLEGE, SECUNDERABAD 500 055 3) CIT(A)-I, HYDERABAD 4) CIT(CENTRAL) 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6 ITA NO. 630/HYD/2014 M/S PRAPURNA PROPERTIES PVT. LTD. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S. 2. DRAFT PLACED BEFORE AUTHOR SR.P.S 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER VP 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S. 6. KEPT FOR PRONOUNCEMENT ON SR.P S. 7. FILE SENT TO THE BENCH CLERK SR.P.S. 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER