Sri Ram Vyas, Hyderabad V. ITO, Ward 7(4), Hyderabad

ITA 652/HYD/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6472 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 03-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHRI SOLGY JOSE T KOTTARAM
• Assessee Lawyers: U L N SUDHAKAR
• Keywords: Business income; Additional evidence
• Section: 80C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A ', HYDERABAD BEFORE SHRI CHANDRA POOJARI AND SHRI SAKTIJIT DEY ITA NO. 652 /HYD/201 3 : ASST. YEAR 2009 - 10 SHRI SRI RAM VYAS, HYDERABAD, ( PAN - ACAPV 3270 H ) V/S. INCOME TAX OFFICER WARD 11(3), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : S HRI U.L.N.SUDHAKAR RESPONDENT BY : SHRI SHRI SOLGY JOSE T.KOTTARAM DR DATE OF HEARING 15 . 5 .201 4 DATE OF PRONOUNCEMENT 23.5.2014 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE SI DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME - TAX(APPEALS) VI HYDERABAD DATED 24.1.2013 FOR THE ASSESSMENT YEAR 2009 - 10. 2. THOUGH AS MANY AS SIX GROUNDS HAVE BEEN RAISED BY THE ASSES SEE, EFFECTIVE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS AGAINST ADDITION UNDER S.69 TO THE EXTENT OF RS.16,92,176 SUSTAINED BY THE CIT(A). 3. FACTS OF THE CASE IN BRIEF ARE THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM THE BUSINESS OF CONFECTIONERY AND NAMKEEN ITEMS, APART FROM INCOME BY WAY OF INTER E ST AND ITEMS OF MISCELLANEOUS N ATURE . HE FIL E D HIS RETURN OF IN C O ME FOR THE ASSESSMENT YEA R 2009 - 10 ON 21.8.2009, ADMITTING TAXABLE INCOME OF RS .1,57,200, AFTER CLAIMIN G DEDUC T ION U/S. 80C FOR RS.1,00,000. DURING THE COU R SE OF ASSESSMENT PROCEE D INGS, THE ASSESSING OFFICER OBSERVED THAT THER E WERE CREDITS INTO THE BANK ACCOUNT MAINTAINED WITH ICICI BANK, BEGUMPET BRANCH, IN THE NAMES OF HI M SELF AND HIS MOTHER, SMT.PADMA BAI, WHEREIN THE TOTAL CREDITS FOR THE Y E AR UNDER CONSIDERATION AS Q UANTIFIED AT R S .29,70,000. IT WAS THE CLAIM OF THE ASSE SSEE BEFORE THE ASSESSING OFFICER ITA NO. 652 /HYD/201 3 SHRI SRI RAM VYAS, HYDERABAD 2 THAT THE GROSS SALES OF BUSINESS OF RS.25,60,000, MISCELLANEOUS RECEIPTS OF R S .37,400 AND INTEREST OF R S .18,000, AMONG OTHERS CONSTITUTED THE SOURCES FOR THE SAID AMOUNT OF DEPOSITS AGGREGATING TO RS.29,70,000. THE ASSESS ING OFFICER OBSERVED THAT THE ASSESSEE FAILED TO FURNISH THE DETAILS O F THE TURNOVERS, ETC. REFLECTED THROUGH THE REL E VANT COLU MNS OF RETURNS OF INCOME AND FAILED TO PR O DUCE THE RELE V ANT DETAIL S SUCH AS PURCHASE BILLS OR SALE BILLS, RELATED TO THE BUSINESS TRANSACTIONS. H E FURTHER OBSERVED THAT INTEREST RECEIPTS AS WELL AS MISCELLANEOUS RECEIPTS ARE ALSO NOT INDICATED IN THE RELEVANT COLUMNS O F THE RETURN. THE ASSESSING OFFICER ALSO NOTED THAT THE RENTAL RECEIPTS AND EXPENSES RELATED TO PROPERTY SUCH AS M UNICIPAL TAXES ARE RELATED TO HIS MOTHER VIZ. SMT. PADMA BAI. IN THIS VIEW OF THE MATTER, AND IN THE ABSENCE OF ANY DETAILS OR STATEMENT OF AFFAIRS IN RELATION TO OTHER TRANSACTIONS, THE ASSESSING OFFICER TREATED THE ENTIRE CREDITS OF RS.29,70,000 AS UNEX PLAINED AND ACCORDINGLY MADE ADDITION UNDER S.69 OF THE ACT, WHILE COMPLETING THE ASSESSMENT ON A TOTAL INCOME OF RS.32,26,200, VIDE ORDER DATED 23.11.2011 PASSED UNDER S.143(3) OF THE INCOME - TAX ACT, 1961. 4. ON APPEAL BEFORE THE CIT(A) , THE ASSESSEE BLAMING THE AUTHORISED REPRESENTATIVE AT THE STAGE OF ASSESSMENT PROCEEDINGS FOR NOT REPRESENTING HIS CASE BY FURNISHING PROPER INFORMATION/EXPLANATIONS ON THE CREDITS, PRAYED FOR FRESH OPPORTUNITY OF EXAMINING THE INFORMATION/EVIDENCE RELATED TO SUCH C REDITS BY TREATING THE SUBMISSIONS AS ADDITIONAL EVIDENCE OR SUBMISSIONS. THE CIT(A) ACCORDINGLY GAVE OPPORTUNITY TO THE ASSESSEE BEFORE THE ASSESSING OFFICER, AND AFTER CONSIDERING THE REMAND REPORT OF THE ASSESSING OFFICER, PROCEEDED TO DISPOSE OF THE A PPEAL, OBSERVING AT THE OUTSET THAT AS COULD B E SEEN FROM THE REMAND REPORT, BU S IN E SS RECEIPTS OF THE ASSESSEE AND TH E SOU R CES FOR CASH DEPO S ITS WHICH WERE SHOWN AS CASH WITHDRAWALS MADE EARLIER ARE REPORTED TO B E VERIFIED AND NO OBJ E CTION S WERE RAISED BY THE ASSESSING OFFICER, AS AGAINST THE DISBELIEVING OF SUCH EXPLANATIONS AT THE TIM E OF ASSESSMENT P R OCEE D INGS. 5. T HE CIT(A), FURTHER, CONSIDERING THE ELABORATE SUBMI S SION S O F TH E ASSESSEE BEFORE HIM, SUMMARIZED THE SOU R CES FOR THE CREDITS INTO THE BANK ACCOUNT EXPLAINED BY THE ASSESSEE AS FOLLOWS - ITA NO. 652 /HYD/201 3 SHRI SRI RAM VYAS, HYDERABAD 3 TOTAL CRE D ITS 29,70,000 LESS: SOU R CES I ) OPENING CASH BALANCE 9,80,626 II ) AMOUN T S REL A TED TO PADMABAI A) AMOUN T S BY CHEQUE 79,200 B)AMOUNT BY CASH 2,73,000 13,32,826 -- -------------------- NET AMOUNT 16,37,176 I ) BUSINESS RECEIPTS 2,62,500 II ) AMOUNTS FROM CREDIT CARDS 1,29,600 3,92,100 NET BALANCE RS. 12,45,076 THUS, THE CIT(A) NOTED THAT AS PER THE ASSESSEE, THE AMOUNT OF R S .12,45,076 REPR E SENT THE CASH BALANCES AVAILABLE WITH HIM AND THE CASH WITHDRAWALS MADE FROM THE BANK ACCOUNT EARLIER AFTER CLAIMING CREDITS FOR BUSINESS RECEIPTS AND RECEIPTS THROUGH CREDIT CARDS, AS INDICATED IN THE ABOVE SUMMARY. THE CIT(A) OBSERVED THAT THE CASH BALA NCE AS ON 31.3.2009 AS PER THE CASH STATEMENT PREPARED WAS RS.31,876, AS AGAINST THE CASH BALANCE ON HAND, WHICH WAS PUT AT R S .4,47,100, AS PER THE STATEMENT O F A F FAIRS FOR THE FINANCIAL YEAR ENDING ON 31.3.2009 , AND THUS THE CASH STA T EM E NT PREPARED AND RE LIED UPON BY THE ASSESSEE IS NO T A COMPLETELY VERIFIABLE AND RELIABLE DOCU M ENT. HE FURTHER NOTED AS A MATTER OF FACT THAT THE ENTIRE OPENING CASH BALANCE OF RS.9,80,626 WAS NO T AVAILABLE TO THE ASSESSEE TO DEPOSIT THE SAME INTO THE BANK ACCOUNT, SINCE THE CLOSING BALANCES WERE ALSO S H OWN AS AVAILABLE ON HAND TO THE ASSESSEE. IN THE TOTALITY OF FACTS AND CIRCUMSTANCES O F TH E CA S E, THE CIT(A) HAS DRAWN THE FOLLOWING CONCLUSIONS - - ASSUMING THAT ALL THE ABOVE MENTIONED CREDITS AS CLAIMED BY THE ASSESSEE WERE AVAILABLE AGAINST THE DEPOSITS OF R S .29,70,000, THE UNEXPLAINED BALANCE AMOUNTS REMAIN AT RS.12,45,076 - IF THE CLO S IN G BALANCE O F R S .4,47,100 AS INDICATED IN TH E STATEMENT O F AFFAIRS FOR FY 208 - 09, IS REDUCED FROM THE OPENING BALANCE, THE ACTUAL AMOUNTS AV AILABLE FOR DEPOSITING INTO THE BANK ACCOUNT WOULD GET ITA NO. 652 /HYD/201 3 SHRI SRI RAM VYAS, HYDERABAD 4 REDUCED TO RS.5,33,526 (RS.9,80,626 RS.4,47,100) AND ACCORDINGLY, THE B ALANCES TO B E EXPLAINED WOULD STAND IN C REASED TO RS.16,92,176 (RS.12,45,076 + RS.4,47,100) - THE TOTAL AMOUNTS TO BE EXPL A IN E D THR OUGH THE CASH WITHDRAWALS THUS STAND AT R S .16,92,176. 6. THE CIT(A) THEREAFTER NOTED THAT THE CA S H WITHDRAWALS MADE FROM THE BANK A R E EITHER REPRESENTED BY ATM WITHDRAWALS OR THE AMOUNTS PAID THROUGH B E ARER CHEQUES FOR SPECIFIC PU R PO S ES. HE FURTHER NOTED THAT THERE WERE NO WITHDRAWAL OF CASH BY SELF CHEQUES SO AS TO ASSUME THEM TO BE THE CASH WITHDRAWALS BY WHICH CASH IS AVAILABLE TO THE ASSESSEE. FURTHER, THE CR E DIT WAS ALREADY GIVEN TO THE CASH AVAILABLE ON HAND, AFT E R RECOGNIZING THE O P ENING BALANCES AND CLOSING BALANCES AS SHOWN IN THE STATEMENT OF AFF A IRS PREPARED BY THE ASSESSEE. FOR THESE REASONS, THE CIT(A) FOUND THE EXPLANATION OF THE ASSESSEE THAT CASH WITHDRAWALS MADE ARE AVAILABLE FOR RE - DEPOSITING INTO THE BANK ACCOUNT AS NOT MAINTAINABLE. IN THE CIRCUMSTANCES , THE CIT(A) HELD THAT THE CREDITS INTO THE BANK ACCOUNT OF RS.29,70,000, STAND EXPLAINED ONLY TO THE E X TENT OF RS.12,77,824, REPR E SENT BY THE AMOUNTS IN THE FO R M OF BUSINESS RECEIPTS RS .2,62,5400, CR E DIT CARDS RS. 1,29,600 , AMOUNTS BELONGING TO SMT.PADMA BAI RS.3,92,100 AND CASH ON HAND RS.5,33,526, AND THE BALANCE TO THE TUN E OF RS.16,92,176 REMAINED UNEXPLAINED. THE CIT(A) ACCORDINGLY SUSTAINED THE ADDITION TO THE EXTENT OF RS.16,92,176 MADE BY THE ASSESSING OFFIC ER. 7. AGGRIEVED, ASSESSEE IS IN SECON D APPEAL, CONTESTING THE ADDITION SUSTAINED BY THE CIT(A). 8. THE LEARNED COUNSEL FOR THE ASSESSEE, REITERATIN G THE CON T ENTION S URGED BEFORE THE REVENUE AUTHORITIES SUBMI T TED THAT THE CIT(A) WAS NOT JUSTIFIED IN SUSTAINING ANY PART OF THE ADDITION MADE BY THE ASSESSING OFFICER. HE SUBMITTED THE ASSESSEE COULD EXPLAIN ALL THE DEPOSITS MADE INTO THE BANK ACCOUNT, WHEREAS THE CIT(A) HAS ACCEPTED ONLY PART OF THE EXPLANATION OF THE ITA NO. 652 /HYD/201 3 SHRI SRI RAM VYAS, HYDERABAD 5 ASSESSEE AND GRANTED RELIEF. IT I S SUBMITTED THAT THE CIT(A) OUGHT TO HAVE CON S I D ERED THE EXPLANATION OF THE ASSESSEE IN ITS ENTIRETY AND DELETED THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER, TREATING THE DEPOSITS MADE INTO THE BANK ACCOUNT AS UNEXPLAINED. 9. THE LEARNED DEPARTMEN TAL REPRESENTATIVE, ON THE CONTRARY, STRONGLY RELIED UPON THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE CIT(A) HAS GRANTED REASONABLE RELIEF CONSIDERING THE EXPLANATION OF THE ASSESSEE, AND IT IS ONLY IN RESPECT OF THE AMOUNTS OF DEPOSIT WHICH COULD NOT B E SATISFACTORILY EXPLAINED, THAT THE CIT(A) SUSTAINED THE ADDITION. 10 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES. WHILE THE ASSESSEE HAS EXPLAINED THE OSTENSIBLE SOURCES FOR ALL THE DEPOSITS AGGREGATING TO R S .29.70,000 MADE INTO BANK ACCOUNT, THE ASSESSING OFFICER DISBELIEVED THE EXPLANATION OF THE ASSESSEE IN ITS ENTIRETY, AND ADDED THE ENTIRE AMOUNT UNDER S.69 OF THE ACT. THE CIT(A) RESTRICTED THE SAID ADDITION TO AN AMOUNT OF RS.1 6,92 , 176 , WHICH COMPRISES OF DISCREPANCY IN THE OPENING AND CLOSING CASH BALANCES CLAIMED AND THE DEPOSITS CLAIMED TO HAVE BEEN MADE OUT OF THE WITHDRAWALS MADE EARLIER. AS FAR AS THE DISCREPANCY NOTICED IN THE OPENING AND CLOSING CASH BALANCES OF RS.4,47,100 IS CONCERNED, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE CIT(A), SINCE THE AGGREGATE SUM FOR WHICH THE EXPLANATION OF THE ASSESSEE AS TO SOURCES FALLS SHORT BY THAT FURTHER SUM, AND CONVERSELY, THE SUM FOR WHICH THE ASSESSEE HAS TO EXPLAIN SOURCES GOES UP BY THAT AMOUNT. HOWEVER, TH E ASSESSEE CLAIMED THAT AN AMOUNT OF RS.10,04,700 DEPOSITED INTO THE BANK ACCOUNT WAS MADE OUT OF EARLIER WITHDRAWALS . W E FIND THAT TH IS ASPECT HAS NOT BEEN PROPERLY EXAMINED EITHER BY THE CIT(A) OR BY TH E ASSESSING OFFICER, SO AS TO ARRIVE AT A DEFINITE CONCLUSION THAT THE SUM WITHDRAWN EARLIER WOULD NOT HAVE BEEN AVAILABLE TO THE ASSESSEE TO DEPOSIT THE SAME BACK INTO BANK ACCOUNT. THE ASSESSING OFFICER OUGHT TO HAVE EXAMINED THE WITHDRAWALS MADE BY THE ASSESSEE DURING THE RELEVANT PERIOD, THE TIME GAP BETWEEN THE WITHDRAWAL MADE AND THE DEPOSIT MADE, AND IN THE PROCESS, THE POSSIBLE NEXUS BETWEEN THE WITHDRAWAL ITA NO. 652 /HYD/201 3 SHRI SRI RAM VYAS, HYDERABAD 6 MADE EARLIER AND THE REDEPOSIT MADE BY THE ASSESSEE, INSTEAD OF BRUSHING ASIDE THE EXPLANATIO N OF THE ASSESSEE IN THAT BEHALF, IN A SUMMARY MANNER. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE IMPUGNED ORDER OF THE CIT(A), AN D RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER, WITH A DIRECTION TO EXAMINE THE SOURCE EXPLAINED BY THE ASSESSE E WITH REGARD TO THE SOURCE FOR THE DEPOSITS TO THE EXTENT OF RS.1 0 , 0 4, 700 , BEING WITHDRAWALS MADE EARLIER , IN THE LIGHT OF OUR ABOVE OBSERVATIONS. THE ASSESSING OFFICER SHALL ACCORDINGLY REDECIDE THE ISSUE TO THIS LIMITED EXTENT, IN ACCORDANCE WITH LAW A ND AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 11 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 23.5.2014 SD/ - SD/ - (CHANDRA POOJARI ) ( SAKTIJIT DEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER DT/ - 23 RD MAY, 2014 COPY FORWARDED TO: 1. SHRI RAM VYAS, 15 - 8 - 90, FEELKHANA, BEGAM BAZAR, HYDERABAD 2 . INCOME TAX OFFICER WARD 7(4) , HYDERABAD 3. 4. COMMISSIONER OF INCOME - TAX(APPEALS) VI HYDERABAD COMMISSIONER OF INCOME - TAX V HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S