Aka Damodar (HUF), Tirupathi V. ACIT, Central Circle, Tirupathi

ITA 666/HYD/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6581 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-03-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 15-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Opportunity of being heard
• Section: 143(3); 2(14); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER S.NO. ITA NO. AY ASSESSEE RESPONDENT 1 1654/H/10 2004-05 ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, TIRUPATHI AKA DAMODAR, TIRUPATHI PAN AJDPR9371H 2 666/H/11 2004-05 AKA DAMODAR, TIRUPATHI PAN AJDPR9371H ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, TIRUPATHI 3 665/H/11 2008-09 -DO- -DO- ASSESSEE BY: SRI S. RAMA RAO REVENUE BY: SRI M. SITARAM DATE OF HEARING: 16/03/2016 DATE OF PRONOUNCEMENT: 22/04/2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: APPEAL BEING ITA NO. 666/H/11 AND 1654/H/10 ARE CR OSS APPEALS DIRECTED AGAINST THE ORDER OF CIT(A)-VII, H YDERABAD DATED 21/10/2010 FOR AY 2004-05. APPEAL BEING ITA N O. 665/H/11 FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-VII, HYDERABAD DATED 11/01/2011 FOR AY 2008- 09. ITA NO. 1654/H/10 BY THE REVENUE 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL: 1. THE LEARNED CIT(A) HAS ERRED ON LAW AND FACT WH ILE ALLOWING APPEAL OF THE ASSESSEE ON ACCOUNT OF ADDIT ION MADE TOWARDS UNDISCLOSED OPENING STOCK DESPITE THE FACT THAT THE ASSESSEE FILED NIL RETURN FOR THE AY 2003- 04. I.T.A. NOS. 666, 665/HYD/2011 & 1654/HYD/2010 M/S AKA DAMODAR 2 2. THE CIT (A) OUGHT TO HAVE CONSIDERED THE FACT TH AT WITH OUT DISCLOSING ANY CLOSING STOCK IN THE EARLIER YEA R THE ASSESSEE HAS BROUGHT HUGE OPENING STOCK FOR THE AY 2004-05 AND IT HAS TO BE ASSESSED AS UNEXPLAINED INVESTMENT ONLY. 3. THE LEARNED CIT(A) HAS ERRED ON LAW AND FACT WHI LE ALLOWING APPEAL OF THE ASSESSEE ON ACCOUNT OF ADDIT ION MADE TOWARDS OPENING CAPITAL OF RS.18,69,000/- DESP ITE THE FACT THAT THE ASSESSEE FILED NIL RETURN FOR THE AY 2003-04. 4. THE CIT (A) OUGHT TO HAVE APPRECIATED THE FACT T HAT WITH OUT DISCLOSING ANY CLOSING BALANCE OF CAPITAL ACCOUNT IN THE EARLIER YEAR THE ASSESSEE HAS BROUGHT HUGE OPENING BALANCE FOR THE AY 2004-05 AND IT HAS TO BE ASSESSES AS UNEXPLAINED INVESTMENT ONLY. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THERE WA S A SEARCH & SEIZURE OPERATION U/S 132 OF THE IT ACT, 1961 IN THE CASE SRI K.C. REDDAPPA NAIDU ON 27/09/2007. DURING THE SEARC H OPERATION, CERTAIN INCRIMINATING DOCUMENTS WERE FOU ND AND SEIZED. SUBSEQUENTLY, ASSESSEES CASE WAS NOTIFIED TO THE ACIT, CENTRAL CIRCLE, TIRUPATHI AND THE ASSESSMENT WAS COMPLETED BASED ON THE INFORMATION GATHERED BY THE ASSESSING OFFICER. 4. AS REGARDS GROUND NOS. 1 & 2, IT IS OBSERVED THA T THE ASSESSEE HAD SHOWN OPENING STOCK OF RS. 12.75 LAKHS IN THE TRADING ACCOUNT. SINCE, THE ASSESSEE FAILED TO EXPL AIN THE SAID OPENING STOCK, ASSESSING OFFICER TREATED THE SAME A S UNEXPLAINED INVESTMENT. 5. ON AN APPEAL BEFORE THE CIT(A), IT WAS EXPLAINED BY THE AUTHORIZED REPRESENTATIVE THAT THE ASSESSEE BEING A SMALL TIME SAREE VENDOR, HAS BEEN OFFERING THE INCOME FRO M THE SALE OF SAREES U/S 44AF OF THE I.T. ACT, 1961. THEREFORE , THE OPENING STOCK ADMITTED BY THE ASSESSEE SHOULD NOT H AVE BEEN ADDED. THE ASSESSEE HAS BEEN DOING THIS SAREE BUSIN ESS FOR I.T.A. NOS. 666, 665/HYD/2011 & 1654/HYD/2010 M/S AKA DAMODAR 3 SEVERAL YEARS. SINCE THE ASSESSEE DID NOT HAVE A TA XABLE INCOME, NO RETURN OF INCOME WAS FILED. WHEREAS FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE'S INCOME WAS ESTIMATED U/S 44AF OF THE I.T. ACT, 1961 AND OF FERED FOR TAX. THE ASSESSEE, HOWEVER, HAS BEEN DOING BUSINESS FOR SEVERAL YEARS AND THE INVESTMENT IN THE STOCK IS PA RTLY TAKEN ON CREDITS AND THE STOCK IS AVAILABLE IN THE BUSINE SS FOR LAST SEVERAL YEARS. THEREFORE, THE ASSESSING OFFICER SHO ULD NOT HAVE TREATED THE ENTIRE STOCK AS IT IS BOUGHT IN T HE PREVIOUS YEAR UNDER CONSIDERATION. SINCE THE STOCK IS COMING FOR THE LAST SEVERAL YEARS, THE ASSESSING OFFICER SHOULD N OT HAVE TREATED IT AS INCOME OF THE ASSESSEE FOR THE ASSESS MENT YEAR UNDER CONSIDERATION. 6. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) OBSERVED THAT THE ASSESSEE IS A SMALL TIME S AREE VENDOR WHO SELLS SAREES TO FARMERS IN VILLAGES AND THE ASSESSEE'S PURCHASES ARE NOT VERY HIGH AND MOSTLY T HE OPENING STOCK HAPPENS TO BE ACCUMULATION OF PREVIOU S YEARS. THEREFORE, HE WAS OF THE VIEW THAT ADDING THE OPENI NG STOCK IS NOT JUSTIFIED AS THE SAME HAS BEEN BOUGHT IN THE RE LEVANT ASSESSMENT YEAR. THE CIT(A) FURTHER OBSERVED THAT IN THE TRADING ACCOUNT THERE WERE SOME SALES AND SOME CLO SING STOCK AND, THEREFORE, THE OPENING STOCK WHATSOEVER WAS ADMITTED IS PERTAINING TO THE PREVIOUS YEARS. HOWEV ER, THE ASSESSEE HAS ADMITTED THE TAXABLE INCOME U/S 44AF O F THE IT ACT, 1961 FOR THE ASSESSMENT YEAR UNDER CONSIDERATI ON. HENCE, TAKING ALL THE FACTS AND CIRCUMSTANCES OF TH E CASE, THE CIT(A) WAS OF THE OPINION THAT MAKING AN ADDITION ON BROUGHT FORWARD STOCK OF PREVIOUS YEARS IS NOT BASED ON THE VALID REASONS, THEREFORE, HE ALLOWED THE GROUND OF APPEAL OF ASSESSEE. I.T.A. NOS. 666, 665/HYD/2011 & 1654/HYD/2010 M/S AKA DAMODAR 4 7. AS REGARDS GROUND NOS. 3 & 4, THE ASSESSEE HAD S HOWN OPENING BALANCE OF CAPITAL ACCOUNT AT RS. 18.69. SI NCE THE ASSESSEE FAILED TO EXPLAIN HOW HE HAS ARRIVED AT TH E SAID AMOUNT, THE ASSESSING OFFICER TREATED THE SAME AS UNEXPLAINED CAPITAL INTRODUCED DURING THE YEAR AND ACCORDINGLY ADDED THE SAME TO THE INCOME OF ASSESSEE. 8. BEFORE THE CIT(A), IT WAS EXPLAINED BY THE AUTH ORIZED REPRESENTATIVE THAT THE ASSESSING OFFICER AGAIN HAS ADDED THE BROUGHT FORWARD BALANCE IN THE CAPITAL ACCOUNT AMOU NTING TO RS.18,69,000/- WHICH IS NOT WARRANTED. IT WAS FURTH ER SUBMITTED THAT SINCE THE ASSESSEE HAS BEEN DOING TH E BUSINESS IN THE SMALL WAY AND HAS GOT ACCUMULATED P ROFITS AND CAPITAL ACCOUNT. THEREFORE, THE BROUGHT FORWARD CAP ITAL ACCOUNT IS CONSISTING OF MAINLY DUES RECEIVABLE FRO M THE FARMERS FOR HAVING SOLD THE SAREES, CLOSING STOCK A ND CASH ON HAND. THEREFORE, THE CAPITAL ACCOUNT BALANCE AS IT IS SEEN AT RS.18,63,200 IS NOT OF CAPITAL CONSISTING OF LIQUID CASH AND BANK BALANCE BUT IT IS CONSISTING OF CLOSING STOCK, DUES RECEIVABLE FROM THE FARMERS AND SOME CASH. SINCE TH ESE CAPITAL ACCOUNT BALANCE IS ACCUMULATED BALANCE, THE ASSESSING OFFICER SHOULD NOT HAVE TREATED THE SAID AMOUNT FOR TAX PURPOSE. IT WAS ALSO ARGUED THAT SINCE THIS IS A BROUGHT FORWARD BALANCE IN THE CAPITAL ACCOUNT PERTAINING T O SO MANY PREVIOUS YEARS, IT SHOULD NOT HAVE BEEN TAXED IN TH E ASSESSEE'S HAND UNDER CONSIDERATION. 9. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) OBSERVED THAT HAVING VERIFIED THE FACTS AND CIRCUMSTANCES OF THE CASE, IT APPEARS THAT ASSESSI NG OFFICER WAS NOT JUSTIFIED TO MAKE AN ADDITION OF RS.18,69,0 00/- TOWARDS BROUGHT FORWARD BALANCES IN THE CAPITAL ACC OUNT WHICH CONSISTS OF CLOSING STOCK OF RS.12,75,000, DEBTS RE CEIVABLE I.T.A. NOS. 666, 665/HYD/2011 & 1654/HYD/2010 M/S AKA DAMODAR 5 AND CASH IN HAND. THE ASSESSING OFFICER, HOWEVER, H AS NOT PROVED THAT THE ENTIRE OPENING BALANCE IN THE CAPIT AL ACCOUNT IS PERTAINING TO THE ASSESSMENT YEAR UNDER CONSIDER ATION. CIT(A) NOTED THAT RS.12,75,000/- PERTAINING TO CLOS ING STOCK IS SEPARATELY ADDED BY THE ASSESSING OFFICER. THEREFOR E, HAVING VERIFIED THE FACTS OF THE CASE, CIT(A) WAS OF THE OPINION THAT THE ADDITION MADE BY THE ASSESSING OFFICER IS WITHO UT VERIFYING THE FACTS WHETHER IT IS BROUGHT FORWARD BALANCES OF CAPITAL ACCOUNT OR THE CAPITAL BROUGHT IN THE ASSESSMENT YE AR UNDER CONSIDERATION. SINCE THE BROUGHT FORWARD CAPITAL BA LANCE IS PERTAINING TO PREVIOUS YEARS BALANCES IN THE CAPITA L ACCOUNT, CONSISTING OF CLOSING STOCK AND OTHERS, THE CIT(A) DELETED THE ADDITION MADE ON THIS COUNT. 10. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL FACTS ON RECORD. THERE IS NO DOUBT THAT TH E ASSESSEE HAD FILED RETURN OF INCOME U/S 44AF OF THE ACT. SIN CE, THE ASSESSEE IS A SMALL TRADER PREFERRED TO DECLARE INC OME U/S 44AF ON PRESUMPTION BASIS. AS PER THE STATUTE, THE ASSESSEE NEED NOT HAVE TO MAINTAIN BOOKS OF ACCOUNT. THE DUT Y OF THE ASSESSING OFFICER WAS TO DETERMINE THE GROSS SALES OR RECEIPTS OF THE ASSESSEE AND MAKE SURE THAT INCOME IS OFFERE D CORRECTLY. IN OUR CONSIDERED VIEW, ASSESSING OFFICE R HAS GONE BEYOND HIS DUTY AND MADE ADDITION MERELY ON SUSPICI ON. HE HAS ADDED THE OPENING STOCK AND OPENING BALANCE OF CAPITAL ACCOUNT, WHICH HAS NO RELEVANCE FOR DETERMINING THE INCOME FOR THE CURRENT AY. MOREOVER, HE HAS NOT BROUGHT AN Y COGENT MATERIAL TO SUBSTANTIATE HIS STAND. SINCE, THE ASSE SSMENT WAS MADE U/S 143(3) R.W.S. 153C OF THE ACT, IN THE INTE REST OF JUSTICE, WE REMIT THE CASE BACK TO THE FILE OF THE ASSESSING I.T.A. NOS. 666, 665/HYD/2011 & 1654/HYD/2010 M/S AKA DAMODAR 6 OFFICER TO RECOMPUTE THE ASSESSEES INCOME U/S 44AF OF THE ACT. 12. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 666/HYD/2011 BY THE ASSESSEE FOR AY 2004-05 13. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING SUBSTANTIVE GROUNDS OF APPEAL: 1. THE ORDER OF THE LD. CIT(A) IS ERRONEOUS TO THE EXTENT IT IS PREJUDICIAL TO THE ASSESSEE HEREIN. 2. THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION O F THE ASSESSING OFFICER IN DISALLOWING THE CLAIM FOR DED UCTION OF RS. 4,41,500/- FROM THE SALE CONSIDERATION OF R S. 4,50,000 FOR THE PURPOSE OF DETERMINING THE CAPITA L GAIN. 14. BRIEFLY THE FACTS OF THE CASE ARE THE ASSESSEE HAD BOUGHT A SITE FOR RS. 1,09,000 ON WHICH THE ASSESSE E HAS BUILT A HOUSE AT THE COST OF RS. 3,32,500 AND THEREAFTER THE SAID HOUSE WHICH IS COSTING RS. 4,41,500 WAS SOLD FOR RS .4,50,000 IN THE SAME YEAR OF CONSTRUCTION. THE ASSESSEE OFFE RED CAPITAL GAIN OF RS.8,500. HOWEVER, THE ASSESSING OFFICER DI D NOT BELIEVE THAT THE COST OF THE CONSTRUCTION ADMITTED BY THE ASSESSEE AT RS.4,41,500/- AS GENUINE. THEREFORE, HE HAS ADDED THE COST OF THE SITE AS WELL AS COST OF THE C ONSTRUCTION OF THE HOUSE TREATING AS UNEXPLAINED INVESTMENT/RECEIP T IN ASSESSEES HAND. 15. ON AN APPEAL BEFORE THE CIT(A), IT WAS THE SUBM ISSION OF THE AUTHORIZED REPRESENTATIVE THAT THE ASSESSING OFFICER IS NOT JUSTIFIED TO MAKE SUCH ADDITION WHEN ASSESSEE H AD EXPLAINED HIS DEALING IN THE PROPERTY. I.T.A. NOS. 666, 665/HYD/2011 & 1654/HYD/2010 M/S AKA DAMODAR 7 16. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSE E, THE CIT(A) OBSERVED THAT THE ASSESSEE IS SAID TO HAVE INVESTED IN CONSTRUCTING THE HOUSE AMOUNTING TO RS.4,41,500/- D URING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR. HOWE VER, THE ASSESSEE THOUGH ADMITTED TO HAVE INVESTED RS.4,41,5 00/- FOR THE CONSTRUCTION OF THE HOUSE BUT NO DETAILS IN THI S REGARD IS SEEN TO HAVE BEEN FURNISHED BEFORE THE ASSESSING OF FICER. FURTHER THE CIT(A) OBSERVED THAT DURING THE APPEAL PROCEEDINGS ALSO, THE ASSESSEE HAS NOT GIVEN DETAIL S WITH REGARD TO THE SITE PURCHASED INCURRING COST OF RS.1 ,09,000/- AND COST OF THE CONSTRUCTION OF THE HOUSE AT RS.3,3 2,500 TOTALLING TO RS.4,41,500/-. THE CIT(A) NOTED THAT THE ASSESSEE HAS CLAIMED TO HAVE OFFERED RS.8,500 AS SHORT TERM CAPITAL GAIN FOR HAVING SOLD THE HOUSE COSTING RS 4,41,500 AND SOLD FOR RS.4,50,000/-, BUT, THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF THE INVESTMENT OF THE HOUSE. THEREFORE, T HE CIT(A) WAS OF THE OPINION THAT THE ADDITION MADE BY THE AS SESSING OFFICER AT RS. 4,41,500/- HAS TO BE TREATED AS UNEX PLAINED INVESTMENT IN ASSESSEES HAND. THEREFORE, THIS GROU ND OF APPEAL IS TREATED AS DISMISSED BY THE CIT(A). 17. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES AN D PERUSED THE MATERIAL FACTS ON RECORD AND LD. AR SUB MITTED THAT THE DETAILS OF INVESTMENTS WERE ALREADY SUBMITTED B EFORE THE ASSESSING OFFICER. SINCE, WE DIRECTED THE ASSESSING OFFICER TO RECOMPUTE THE INCOME OF THE ASSESSEE U/S 44AF, THE ASSESSEE IS DIRECTED TO SUBMIT THE RELEVANT INFORMA TION BEFORE THE ASSESSING OFFICER AND WE DIRECT THE ASSESSING O FFICER TO RECONSIDER THE EVIDENCE OF INVESTMENT AND REDO THE ASSESSMENT AFRESH. 18. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NOS. 666, 665/HYD/2011 & 1654/HYD/2010 M/S AKA DAMODAR 8 ITA NO. 665/HYD/2011 BY THE ASSESSEE FOR AY 2008-09 19. THIS APPEAL IS DIRECTED AGAINST THE ORDER OF CI T(A)-VII, HYDERABAD WHEREIN THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME -TAX (APPEALS) IS ERRONEOUS TO THE EXTENT IT IS PREJUDIC IAL TO THE APPELLANT HEREIN. 2. THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS ) ERRED IN CONFIRMING THE ADDITION OF RS.60,000/- OUT OF RS.1,20,000/- MADE BY THE ASSESSING OFFICER DISBELI EVING THE AGRICULTURAL INCOME. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.45,000/- MAD E TO THE SHORT TERM CAPITAL GAIN DISBELIEVING THE DEVELO PMENT CHARGES INCURRED. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.7,92,100/- B EING THE DEPOSITS MADE INTO THE BANK ACCOUNT WITHOUT CONSIDE RING THE RECEIPTS FOR THE YEAR UNDER CONSIDERATION. 20. BRIEFLY THE FACTS OF THE CASE ARE THAT, THE ASS ESSEE HAD FILED RETURN OF INCOME ON 15/12/2009, ADMITTING TOT AL INCOME OF RS. 4,70,660/- AND AGRICULTURAL INCOME OF RS. 1,20, 000/-. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE AS TO THE LAND HOLDINGS AND SALE PROCE EDS OF AGRICULTURAL PRODUCE. THE ASSESSING OFFICER THEREFO RE TREATED THE SAID AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. 21. ON AN APPEAL, BEFORE THE CIT(A) THE AR OF THE A SSESSEE CONTENDED THAT THE ASSESSING OFFICER WAS NOT JUSTIF IED IN MAKING THE ADDITION BY TREATING THE AGRICULTURAL IN COME AS INCOME FROM OTHER SOURCES EVEN AFTER FURNISHING THE DETAILS OF AGRICULTURAL LAND AND AGRICULTURAL INCOME EARNED TH EREFROM. THE AR ALSO FILED CERTAIN CONFIRMATIONS FROM THE T ENANTS WHO HAVE BEEN CULTIVATING LANDS OF THE ASSESSEE. I.T.A. NOS. 666, 665/HYD/2011 & 1654/HYD/2010 M/S AKA DAMODAR 9 22. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE, THE CIT(A) OBSERVED THAT THE CONFIRMATION LETTERS FROM SRI JAYAKRISHNA AND SRI ROSI REDDY WHO HAVE CLAIMED TO HAVE CULTIVATED THE AGRICULTURAL LAND OF THE ASSESSEE AN D WHO ARE STATED TO HAVE PAID CERTAIN AGRICULTURAL INCOME TO THE ASSESSEE HAVE BEEN FILED. HOWEVER, HE NOTED THAT THE ASSESS EE HAS NOT PRODUCED ANY DETAILS OF LAND HOLDING AND AGRICU LTURAL CROP CULTIVATED ETC., THEREFORE, THE AGRICULTURAL INCOME CLAIMED CANNOT BE ACCEPTED TOTALLY. HENCE, THE CIT(A) INCLI NED TO ACCEPT THE AGRICULTURAL INCOME AT RS.60,000 ONLY AN D THE BALANCE IS TREATED AS INCOME FROM OTHER SOURCES. 23. AS REGARDS, GROUND NO. 3, THE ASSESSEE DISPOSE D OFF PROPERTY AT ADUSUPALEM VILLAGE, RENIGUNTA FOR RS. 6 ,40,000/-. WHILE ARRIVING AT SHORT TERM CAPITAL GAINS, HE HAS DEBITED RS. 45,000/- TOWARDS IMPROVEMENT CHARGES. SINCE THE ASS ESSEE COULD NOT PRODUCE ANY EVIDENCE LIKE BILLS/VOUCHERS, NATURE OF WORK, DATE OF WORK ETC., THE ASSESSING OFFICER ADDE D THE SAME TO THE RETURNED INCOME. THE CIT(A) CONFIRMED THE SA ME ON THE GROUND THAT DID NOT HAVE ANY INFORMATION IN RESPEC T OF EXPENSES CLAIMED. 24. WITH REGARD TO THE GROUND NO. 4, THE ASSESSING OFFICER NOTED THAT THERE WAS A CASH CREDIT OF RS. 2,36,100/ - AND RS. 1,56,000/-, RS. 4,00,000/- ON 29/11/2007, 01/12/200 7 AND 13/03/2008 RESPECTIVELY IN ASSESSEES SAVING BANK A /C BEARING NO. 30060697289 OF SBI, TILAK ROAD BRANCH, TIRUPATH I. WHEN IT WAS QUESTIONED ABOUT THE SOURCE OF THE SAME, THE ASSESSEE COULD NOT REPLY PROPERLY. IN THE ABSENCE OF BOOKS O F ACCOUNT AND SATISFACTORY EXPLANATION, THE ASSESSING OFFICER TREATED THE SAID AMOUNTS TOTALLING TO RS. 7,92,100/- AS UNEXPLA INED. I.T.A. NOS. 666, 665/HYD/2011 & 1654/HYD/2010 M/S AKA DAMODAR 10 25. BEFORE THE CIT(A), IT WAS THE SUBMISSION OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE ASSESSEE SOLD CERTAIN PROPERTIES AND HE MADE THE DEPOSITS IN BANK AS ON ABOVE DATES. THE CIT(A) OBSERVED THAT THE ASSESS EE THOUGH HAS FILED THE DETAILS OF THE SALE DEEDS OF T HE PROPERTIES FOR HAVING SOLD BUT HAS NOT GIVEN ANY DETAILS WITH REGARD TO THE PURCHASE OF THE SAID PROPERTIES AND CAPITAL GAINS I F ANY ARISING THEREFROM. HE WAS OF THE VIEW THAT THE ASSESSEE SHO ULD HAVE EXPLAINED THE CASE WITH REGARD TO THE INVESTMENT MA DE IN THE PROPERTIES AND AFTER SALE OF THE SAID PROPERTIES WH ETHER THEY ARE ATTRACTED FOR CAPITAL GAINS TAX. THE CIT(A) NOT ED THAT THE ASSESSEE HAS NOT FURNISHED THESE DETAILS ON THE GRO UND THAT THE AGRICULTURAL LANDS PURCHASED AND SOLD ARE NOT C OMING WITHIN THE PURVIEW OF THE CAPITAL GAINS TAX AND HAS ALSO NOT FURNISHED DETAILS WITH REGARD TO THE PROPERTIES IN WHICH INVESTMENTS WERE MADE AND THE AMOUNT OF COST INVEST ED IN PROPERTIES. THE CIT(A), THEREFORE, HELD THAT IN THE ABSENCE OF THESE DETAILS, THE ASSESSING OFFICER HAS TREATED TH E ENTIRE DEPOSITS MADE IN THE BANK PASS BOOK AS UNEXPLAINED DEPOSITS AND CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 26. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL FACTS ON RECORD. WE HAVE NOTICED THAT THE ASSESSEE HAD DECLARED INCOME OF RS. 1.20 LAKHS AND ASSESSING OFF ICER TREATED THE ABOVE INCOME AS INCOME FROM OTHER SOURC ES, WHICH IS BASED ON MERE SUSPICION. SECONDLY, THE ASSESSING OFFICER HAD DISALLOWED RS. 45,000/- WHICH WAS CLAIMED FOR DEVELOPMENT CHARGES. IN OUR VIEW, ASSESSEE HAD SOLD AGRICULTURAL LAND AND EARNED SHORT TERM CAPITAL GAI N. THE SAME WAS NOT TAXABLE U/S 2(14) OF THE ACT. THE ASSESSING OFFICER HAD DISALLOWED RS. 45,000/-. THE SAME WILL INCREASE THE SHORT TERM CAPITAL GAIN TO THE EXTENT OF RS. 45,000/- AND SUCH SHORT TERM CAPITAL GAIN WILL ALSO BE EXEMPT U/S 2(14) OF THE ACT. I.T.A. NOS. 666, 665/HYD/2011 & 1654/HYD/2010 M/S AKA DAMODAR 11 (REFER STATEMENT OF INCOME). FINALLY, THE ASSESSING OFFICER HAD ADDED RS. 7,92,120/- AS UNEXPLAINED DEPOSITS. W HEREAS, THE ASSESSEE SUBMITTED THAT IT WAS DEPOSITED OUT OF SALE OF AGRICULTURAL PROPERTY. IT WAS NOT PROPERLY VERIFIED BY THE ASSESSING OFFICER. HENCE, WE REMIT THE APPEAL BACK TO THE FILE OF THE ASSESSING OFFICER TO REDO THE ASSESSMENT AFR ESH AND ASSESSEE MAY BE GIVEN OPPORTUNITY OF BEING HEARD. 27. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. 28. TO SUM UP, ALL THREE APPEALS UNDER CONSIDERATIO N ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 22 ND APRIL, 2016 SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER SD/- (S. RIFAUR RAHMAN) ACCOUNTANT MEMBER HYDERABAD, DATED 22 ND APRIL, 2016 KV COPY FORWARDED TO: 1. AKA DAMODAR, FLAT NO. 407B, CHENJI PLAZA, KT ROA D, TIRUPATHI. 2. ASST. COMMISSIONER OF INCOME-TAX, CC, HYDERABAD. 3. CIT(A) - VII, HYDERABAD 4 CIT (CENTRAL), HYDERABAD 5 THE DR, ITAT, HYDERABAD I.T.A. NOS. 666, 665/HYD/2011 & 1654/HYD/2010 M/S AKA DAMODAR 12 S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER