Ramu Veeravalli, Hyderabad V. ITO,Ward 3(1), Hyderabad

ITA 653/HYD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91563 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 09-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 653/HYD/2014 ASSESSMENT YEAR: 2009-10 RAMU VEERAVALLI, HYDERABAD PAN ACNPV 5313 L VS. THE INCOME-TAX OFFICER, WARD 3(1), HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI T. CHAITANYA KUMAR REVENUE BY : SHRI RAMAKRISHNA BANDI DATE OF HEARING 15-04-2015 DATE OF PRONOUNCEMENT 15-04-2015 O R D E R PER P.M. JAGTAP, A.M.: THIS APPEAL FILED BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-IV, HYDERABAD DATED 06/12/2013 AND THE SOLIT ARY ISSUE INVOLVED THEREIN RELATING TO THE ADDITION OF RS. 32 ,49,000 MADE BY AO AND CONFIRMED BY LD. CIT(A) ON ACCOUNT OF UNEXPLAIN ED CASH CREDITS U/S 68 OF THE ACT, IS RAISED BY THE ASSESSEE BY WAY OF FOLLOWING GROUNDS: 1. THE ORDER OF HONBLE CIT(A) IS ERRONEOUS IN LAW AS WELL AS THE FACTS OF THE CASE. 2. THE HONBLE CIT(A) OUGHT TO HAVE ADMITTED THE AD DITIONAL EVIDENCE FURNISHED WHILE DECIDING THE APPEAL. 3. THE HONBLE CIT(A) ERRED IN UPHOLDING ACTION OF THE AO IN TREATING THE AMOUNTS DEPOSITED THROUGH CHEQUES ON P AR WITH CASH DEPOSITS AND TREATED ALL THE DEPOSITS AS UNEXP LAINED IN SPITE OF THE FACT THAT SECTION 68 OF THE IT ACT COV ERS ONLY CASH DEPOSITS AND NOT CHEQUE DEPOSITS. 2 ITA NO. 653/HYD/2014 RAMU VEERAVALLI 4. THE HONBLE CIT(A) OUGHT TO HAVE OBSERVED THAT T HE AO WITHOUT TAKING INTO CONSIDERATION THE EXPLANATION O F THE ASSESSEE WITH REGARD TO CASH AS WELL AS CHEQUE DEPO SITS IN THE BANK ACCOUNT AND OUGHT NOT TO HAVE CONFIRMED THE AD DITION. 5. THE HONBLE CIT(A) OUGHT TO HAVE HELD THAT THE A DDITION OF RS. 32,49,000 AS UNEXPLAINED CASH CREDIT BY THE AO IS WITHOUT ANY PROPER BASIS AND THEREFORE THE SAME IS LIABLE T O BE DELETED. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L WHO IS A WORKING DIRECTOR OF M/S SAIDEEP AGRITECH PVT. LTD. RETURN OF INCOME FOR THE AY UNDER CONSIDERATION WAS FILED BY HIM ON 19/01/2010 DECLARING TOTAL INCOME OF RS. NIL. DURING THE COURS E OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE AO THAT ASSESSEE HAS MAINTAINED SAVINGS BANK ACCOUNTS IN AXIS BANK, STATE BANK OF H YDERABAD AND BANK OF BARODA. IT WAS ALSO NOTICED BY AO THAT TOTA L DEPOSITS IN CASH AND BY WAY OF CHEQUES AGGREGATING TO RS. 23,96,439 AND RS. 12,72,561 RESPECTIVELY WERE MADE IN THE SAID ACCOUN TS OF ASSESSEE. WHEN ASSESSEE WAS CALLED UPON BY AO TO EXPLAIN THE SAID DEPOSITS/CREDITS APPEARING IN HIS BANK ACCOUNTS, HE FURNISHED SUMMARY CASH FLOW GIVING THE DETAILS OF RECEIPTS AND PAYMENTS. WITH THE HELP OF THE SAID CASH FLOW, ASSESSEE ALSO MADE AN ATTEMPT TO EXPLAIN THE SOURCE OF DEPOSITS FOUND TO BE MADE IN HIS BANK ACCOUNTS. IN THE ABSENCE OF ANY CASH BOOK MAINTAINED BY ASSES SEE AS WELL AS OTHER EVIDENCES PRODUCED IN SUPPORT, AO, HOWEVER, F OUND THE EXPLANATION OFFERED BY ASSESSEE TO BE NOT ACCEPTABL E/VERIFIABLE, EXCEPT IN CASE OF TWO DEPOSITS OF RS. 4,20,000 FOUN D TO BE MADE IN THE BANK ACCOUNTS OF ASSESSEE BY WAY OF AMOUNTS TRA NSFERRED BY TWO COMPANIES. HE, ACCORDINGLY, TREATED THE BALANCE DEP OSITS OF RS. 32,49,000 FOUND TO BE MADE IN THE BANK ACCOUNTS OF ASSESSEE AS UNEXPLAINED AND ADDED THE SAID AMOUNT TO THE TOTAL INCOME OF ASSESSEE U/S 68 IN THE ASSESSMENT COMPLETED U/S 143 (3) VIDE AN ORDER DATED 05/12/2011. 3 ITA NO. 653/HYD/2014 RAMU VEERAVALLI 3. AGAINST THE ORDER PASSED BY AO U/S 143(3), AN AP PEAL WAS PREFERRED BY ASSESSEE BEFORE LD. CIT(A). DURING TH E COURSE OF APPELLATE PROCEEDINGS BEFORE LD. CIT(A), ADDITIONA L EVIDENCE WAS FILED BY THE ASSESSEE IN THE FORM OF CONSTRUCTED CA SH BOOK FOR THE PERIOD 01/04/2008 TO 31/03/2008 AND EXTRACTS OF HIS DIARY SHOWING FINANCIAL TRANSACTIONS. A REQUEST WAS ALSO MADE BY ASSESSEE TO LD. CIT(A) TO ADMIT THE SAID ADDITIONAL EVIDENCE ON THE GROUND THAT HE WAS REGULARLY ON BUSINESS TOURS FOR CANVASSING THE BUSINESS ACTIVITIES AND BOOKING ORDERS, ETC DURING THE RELEVANT PERIOD, AS A RESULT OF WHICH, HE COULD NOT PROVIDE THE REQUIRED ASSISTANCE TO HIS AUTHORISED REPRESENTATIVE FOR THE PURPOSE OF COMPLETING HIS AS SESSMENTS. LD. CIT(A) DID NOT ACCEDE TO THE REQUEST OF ASSESSEE AS HE FOUND FROM THE REMAND REPORT SUBMITTED BY AO THAT SUFFICIENT O PPORTUNITY WAS ALREADY GIVEN TO ASSESSEE DURING THE COURSE OF ASSE SSMENT PROCEEDINGS TO EXPLAIN THE CREDITS APPEARING IN HIS BANK ACCOUNTS. HE, THEREFORE, REJECTED THE APPLICATION OF ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCE AND CONFIRMED THE ADDITION MADE BY AO U/S 68 OBSERVING THAT THE ADDITIONAL EVIDENCE, EVEN IF IT WERE TO BE ADMITTED, WAS NOT GOING TO HELP ASSESSEES CAUSE IN ANY WAY. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE HAS PREFERRED THI S APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSE RVED THAT ADDITIONAL EVIDENCE SOUGHT TO BE FILED BY ASSESSEE BEFORE LD. CIT(A) IN THE FORM OF CONSTRUCTED CASH BOOK FOR THE RELEVANT PERIOD AS WELL AS EXTRACT OF ASSESSEES DIARY SHOWING FINANCIAL TRANSACTIONS WAS VERY MUCH RELEVANT TO THE ISSUE INVOLVED IN THE CASE OF ASSES SEE RELATING TO ADDITION MADE ON ACCOUNT OF UNEXPLAINED DEPOSITS FO UND TO BE MADE IN HIS BANK ACOCUNTS. IT APPEARS THAT, LD. CIT(A), HOWEVER, OVERLOOKED THIS VITAL ASPECT WHILE REJECTING THE AP PLICATION OF ASSESSEE FOR ADMISSION OF THE SAID ADDITIONAL EVIDE NCE. IN OUR OPINION, LD. CIT(A) HAVING REGARD TO ALL THE FACTS OF THE CASE INCLUDING 4 ITA NO. 653/HYD/2014 RAMU VEERAVALLI THE RELEVANCE OF DOCUMENTS FILED BY ASSESSEE AS ADD ITIONAL EVIDENCE, OUGHT TO HAVE ADMITTED THE SAME IN THE INTEREST OF JUSTICE. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF LD. CIT( A), AND REMIT THE MATTER RELATING TO THE ADDITION OF RS. 32,49,000 MA DE TO THE TOTAL INCOME OF ASSESSEE U/S 68 BACK TO HIM WITH A DIRE CTION TO DECIDE THE SAME AFRESH IN THE LIGHT OF ADDITIONAL EVIDENCE FIL ED BY ASSESSEE. NEEDLESS TO OBSERVE THAT LD. CIT(A) SHALL AFFORD PR OPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO ASSESSEE ON THIS ISSU E. 5. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 15 TH APRIL, 2015 UPON CONCLUSION OF HEARING. SD/- SD/- (SAKTIJIT DEY) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 15 TH APRIL, 2015 KV COPY TO:- 1) RAMU VEERAVALLI,C/O B. NARSING RAO & CO., CAS., PLOT NO. 554, ROAD NO. 92, JUBILEE HILLS, HYDERABAD 500 096 2) ITO, WARD 3(1), HYDERABAD. 3 CIT(A)-IV, HYDERABAD 4)CIT-III, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.