K. Srinivas Rao, Hyderabad V. DCIT, Hyderabad

ITA 693/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9838 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 05-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K KAMAKSHI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.693/HYD/10 : ASSESSMENT YEAR 2008-09 SHRI K.SRINIVAS RAO, HYDERABAD. ( PAN AFMPK 1766 N ) V/S. DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 2, HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.V.S.S.PRASAD RESPONDENT BY : SMT. K.KAMAKSHI O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2008- 09 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME -TAX(APPEALS). 2. GROUNDS OF APPEAL OF THE ASSESSEE IN THIS APPEAL REA D AS UNDER- 1. THE LEARNED CIT(A) IS ERRONEOUS IN LAW AND ON T HE FACTS OF THE CASE. 2. A) THE LEARNED CIT(A) ERRED IN SUSTAINING THE AD DITION OF RS.2,45,290/- DESPITE THE FACT THAT THIS CASH WAS P ART OF WHAT WAS ALREADY AVAILABLE WITH THE APPELLANT AND F AMILY MEMBERS ON THE DATE OF SEARCH AS PER BOOKS. B) THE LD CIT(A) ERRED IN OBSERVING THAT THE ASSESS MENT RECORD DOES NOT SHOW THAT THE APPELLANT HAS FILED A NY CASH FLOW STATEMENT SO AS TO EXPLAIN THE AMOUNT O F RS.2,45,290/-, THOUGH THE BOOKS OF ACCOUNT WERE PRODUCED BEFORE LEARNED AO. C) THE LEARNED CIT(A) OUGHT TO HAVE ACCEPTED THE CONTENTION OF THE APPELLANT THAT THE ENTIRE AMOUNT OF RS.31,00,290/- WAS ACCOUNTED FOR AS VOLUNTARILY DEC LARED ITA NO.693./HYD/10 SHRI K.SRINIVAS RAO, HYDERABAD. 2 INCOME AND CASH AVAILABLE AT TIME OF SEARCH INSTEAD OF ONLY RS.28,55,000/- BASED ON THE BOOKS OF ACCOUNT A ND OTHER EVIDENCE PRODUCED BY THE APPELLANT. D) THE LEARNED CIT(A) IS NOT JUSTIFIED IN CONCLUDIN G THAT THE COMPONENT OF RS.2,45,290/- AS UNEXPLAINED INCOME. 3) THE APPELLANT DISPUTES THE ADDITION OF RS.2,45,2 90/- SUSTAINED BY THE LEARNED CIT(A) AND HENCE THIS APPEAL. 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSE SSEE IS AN INDIVIDUAL AND A SEARCH OPERATION WAS CONDUCTED AT TH E RESIDENCE OF THE ASSESSEE ON 9.10.2007. AT TIME OF SEARCH, CASH OF RS.26,50 ,290 WAS FOUND AT THE ASSESSEES RESIDENCE, AND AN AMOUNT OF RS.4,50,000 W AS FOUND IN THE LOCKER OF THE ASSESSEE, MAKING A TOTAL OF RS.31,00,290. T HE ASSESSEE VOLUNTARILY DECLARED IN HIS DULY SWORN DEPOSITION THAT RS.24.05 LAKHS MAY BE TREATED AS INCOME FOR THE RELEVANT ASSESSMENT YEAR 2008-0 9. ASSESSEE EXPLAINED BEFORE THE DDIT THAT AS PER BOOKS OF MAINT AINED AND SEIZED AT THE TIME OF SEARCH, CASH BALANCE OF RS.16,01,8865 WAS AVAILABL E IN THE ASSESSEES INDIVIDUAL ACCOUNT, AND THE ACCOUNTS OF HIS HUF, WIF E AND MOTHER AND HENCE CREDIT FOR SUCH CASH AVAILABILITY IN THE BOOKS B E ALLOWED. HOWEVER, THE ASSESSEE IN HIS RETURN OF INCOME FILED, DECLARED THE SA ID SUM OF RS.24.05 LAKHS AS INCOME RELEVANT TO ASSESSMENT YEAR 2008-09 AND P AID TAXES THEREON. THE ASSESSING OFFICER WRONGLY ADDED THE ENTIRE AMOUNT OF RS.31,00,290 AS UNEXPLAINED CASH. THE CIT(A), ON APPEAL , GAVE RELIEF OF RS.28,55,000 OUT OF RS.31,00,290 AND CONFIRMED THE BAL ANCE ADDITION OF RS.2,45,290 MADE BY THE ASSESSING OFFICER. LEARNED COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS A CLOSING BALANCE OF RS. 8,06,980 AS ON 31.3.2008, WHICH WAS AVAILABLE AS PER BOOKS OF ACCOU NT. HE SUBMITTED THAT THE AMOUNT OF RS.2,45,290 WAS PART OF T HE AMOUNT OF RS.8,06,980 WHICH WAS THE CLOSING BALANCE OF CASH AS ON 31. 3.2008. HE REFERRED TO THE COPY OF THE BALANCE SHEET AS ON 31.3.2 008 FILED AT PAGE 21 OF ITA NO.693./HYD/10 SHRI K.SRINIVAS RAO, HYDERABAD. 3 THE PAPER-BOOK, WHEREIN THE CASH OF RS.8,06,980 HAS BE EN SHOWN AS CASH IN HAND WITH THE ASSESSEE. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS OPPOSE D THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. SHE SUBM ITTED THAT NO CASH FLOW STATEMENT WAS FILED BY THE ASSESSEE AND THEREFORE , THE ASSESSEE COULD NOT PROVE THAT THE AMOUNT OF RS.2,45,290 WAS PAR T OF THE AMOUNT OF CLOSING CASH BALANCE AS ON 31.3.2008 OF RS.8,06,980. SH E RELIED ON THE ORDER OF THE CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PE RUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND COPIES O F THE STATEMENTS OF ACCOUNT FILED IN THE COMPILATION BEFORE US. WE FIND THAT THE TOTAL OF RS.31,00,290 WAS FOUND WITH THE ASSESSEE AT THE TIME OF SE ARCH AT HIS RESIDENCE AND IN HIS LOCKER. ASSESSEE VOLUNTARILY DECLARED IN HIS DULY SWORN DEPOSITION THAT RS.24,05 LAKHS MAY BE TREATED AS INCOME FOR THE RELEVANT ASSESSMENT YEAR 2008-09. HOWEVER, THE ASSESSEE EXPLAINED BE FORE THE DDIT THAT AS PER BOOKS MAINTAINED AND SEIZED AT THE TIME OF SEARCH, CASH BALANCE OF RS.16,01,885 WAS AVAILABLE IN THE BOOKS OF THE ASSESSEE (INDIVIDUAL), AND THE ACCOUNTS OF HIS HUF, WIFE AND MOTHER AND HENCE CREDIT FOR SUCH CASH AVAILABLE AS PER BOOKS MAY BE ALLOWED. WE FIND THAT THE ASSESSEE IN HIS RETURN OF INCOME FILED HAS HONOURED HIS DECLARATION GI VEN AT THE TIME OF SEARCH FOR TAXING THE AMOUNT OF RS.24.05 LAKHS AS INCOME AND ACCORDINGLY DECLARED THE SAID AMOUNT OF RS.24.05 LAKHS AS INCOME FOR THE RELEVANT ASSESSMENT YEAR, VIZ. 2008-09 AND HAS PAID TAXES THEREON. WE FIND THAT A SUM OF RS.8,06,980 WAS AVAILABLE AS CLOSING BALANCE OF CASH AS ON 31.3.2008 IN THE CASH BOOK OF THE ASSESSEE INDIVIDUAL, AS PER COPY OF THE CASH BOOK AND BALANCE SHEET AS ON 31.3.2008 OF THE ASSESSEE(INDIVIDUAL ) FILED IN THE COMPILATION BEFORE US. THE TOTAL CASH FOUND AT THE TI ME OF SEARCH AT THE ITA NO.693./HYD/10 SHRI K.SRINIVAS RAO, HYDERABAD. 4 RESIDENCE OF THE ASSESSEE AND IN THE LOCKER OF THE ASSESSEE IS COVERED WITH THE AMOUNT OF RS.24.05 LAKHS SURRENDERED THE ASSESSEE IN HIS RETURN OF INCOME OF ASSESSMENT YEAR 2008-09 AND THE AMOUNT OF RS.8 .06 LAKHS REPRESENTING CLOSING BALANCE OF CASH AS ON 31.3.2008 IN THE ACCOUNT BOOKS OF THE ASSESSEE (INDIVIDUAL). ACCORDINGLY, THERE REMAINS NO SCO PE FOR ANY FURTHER ADDITION IN THIS MATTER. THE ARGUMENT OF THE REVENUE THAT THE ASSESSEE COULD NOT FILE ANY CASH FLOW STATEMENT TO SHOW THAT THE AMOU NT OF RS.2,45,290 WAS PART OF THE CASH IN HAND AS PER THE ASSESSEES BOOKS OF A CCOUNT AS ON 31.3.2008, IS DEVOID OF ANY MERIT. CASH FOUND DURING THE COURSE OF SEARCH IS COVERED WITH THE DECLARATION OF INCOME MADE IN THE ASSE SSEES RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 AND CASH IN HAND AV AILABLE AS PER THE ACCOUNT BOOKS OF THE ASSESSEE(INDIVIDUAL) AND THE DEPA RTMENT HAD NOT DOUBTED THE GENUINENESS OF THE ENTRIES IN THE ACCOUNT B OOKS OF THE ASSESSEE. IN THESE FACTS OF THE CASE, WE HOLD THAT THE ADD ITION OF RS.2,45,290 OUT OF CASH FOUND AT THE TIME OF SEARCH, SUST AINED BY THE CIT(A) IS LIABLE TO BE DELETED. WE DO SO ACCORDINGLY AND THE G ROUNDS OF APPEAL FOR THE ASSESSEE ARE ALLOWED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 11.2.2011 SD/- SD/- (CHANDRA POOJARI) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 11.2.2011 COPY FORWARDED TO: 1. SHRI K.SRINIVAS RAO, C/O. PRASAD AND PRASAD, CHARTE RED ACCOUNTANTS, 30 & 31 /FIRST FLOOR, REDDY HOSTEL SHOPPING COMPLEX, T ILAK ROAD, ITA NO.693./HYD/10 SHRI K.SRINIVAS RAO, HYDERABAD. 5 ABIDS, HYDERABAD 500001. 2. DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 2, HY DERABAD 3. COMMISSIONER OF INCOME-TAX(APPEALS) I, HYDERABAD 4. COMMISSIONER OF INCOME-TAX CENTRAL, HYDERABAD 5. THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S