I.Pattabi Ramarao, Vijayawada V. THE ITO , WARD - 1(1), Vijayawada

ITA 717/VIZ/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2114 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 16-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: I SARISH KUMAR
• Assessee Lawyers: N O N E
• Keywords: Unexplained cash credit; Unexplained investment; Salary income
• Section: 142(1); 68

Judgement Text

ITA NO.717/VIZAG/2013 I. PATTABHIRAMA RAO, VIJAYAWADA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , ' BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.717/VIZAG/2013 ( / ASSESSMENT YEAR : 2011-12) I. PATTABHIRAMA RAO VIJAYAWADA VS. ITO WARD-1(1) VIJAYAWADA [ PAN: AACPI3705Q] ( / APPELLANT) ( / RESPONDENT ) / APPELLANT BY : N O N E '# / RESPONDENT BY : SHRI I. SARISH KUMAR, DR / DATE OF HEARING : 20.01.2016 ' / DATE OF PRONOUNCEMENT : 28.01.2016 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A), VIJAYAWADA DATED 26.9.2013 AND IT PERTAINS TO THE ASSESSMENT YEAR 2011-12. 2. THE BRIEF FACTS OF THE CASE, ARE THAT THE ASSESS EE IS AN INDIVIDUAL DERIVING INCOME FROM SALARY AND INCOME FROM OTHER S OURCES, HAS FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 ON 18.8.2012 ITA NO.717/VIZAG/2013 I. PATTABHIRAMA RAO, VIJAYAWADA 2 DECLARING TOTAL INCOME OF RS.3,89,850/-. THE RETUR N WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CAL LED AS THE ACT) ON 23.11.2011. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND ACCORDINGLY, NOTICES U/S 143(2) & 142(1) O F THE ACT WERE ISSUED. IN RESPONSE TO NOTICES, THE AUTHORIZED REP RESENTATIVE OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FURNISHED T HE INFORMATION CALLED FOR. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE A.O. NOTICED THAT THE ASSESSEE HAD DEPOSITED AN AMOUNT O F RS.30 LAKHS TO HIS SAVINGS BANK ACCOUNT VIDE ACCOUNT NO.01401010043486 7 WITH AXIS BANK. THEREFORE, THE A.O. ISSUED A SHOW CAUSE NOTI CE AND ASKED TO EXPLAIN THE NATURE OF CREDIT AND SOURCES FOR THE CR EDITS IN TO THE BANK ACCOUNT. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT HE HAS TAKEN LOAN FROM HIS FRIENDS AND RELATIV ES TO LEND MONEY TO HIS EMPLOYER COMPANY FOR HIS BUSINESS PURPOSES TO A CHIEVE THE TARGETS. THE A.O., AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, MADE ADDITIONS OF RS.30 LAKHS AND BROUGHT TO TAX U/S 68 OF THE ACT. WHILE DOING SO, THE A.O. HELD THAT THE ASSESSEE COULD NOT SUBMIT CONFIRMATION LETTERS FROM THE PERSONS FROM WHOM HE HAS ACCEPTED LOANS, THEREBY, HE HAS FAILED TO EXPLAIN THE SOURCE FOR THE CREDITS IN TO THE BANK ACCOUNT. WITH THESE OBSERVATIONS, THE A.O. MADE ADDITIONS U/S 68 OF THE ACT. 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE A SSESSEE SUBMITTED THAT THE SOURCE FOR THE CASH DEPOSITS WERE MADE OUT OF THE LOANS BORROWED FROM HIS FRIENDS AND RELATIVES. THE ASSES SEE FURTHER SUBMITTED THAT HE HAS DEPOSITED CASH INTO BANK ACCOUNT TO LEN D THE MONEY TO HIS EMPLOYER COMPANY FOR BUSINESS PURPOSES. THE ASSESS EE FURTHER SUBMITTED THAT THE EMPLOYER COMPANY HAS REFUNDED TH E SAID AMOUNT ON ITA NO.717/VIZAG/2013 I. PATTABHIRAMA RAO, VIJAYAWADA 3 18.11.2010 AND THE SAME WAS WITHDRAWN FROM BANK AND RETURNED TO THE PERSONS FROM WHOM LOAN IS BORROWED. HE FURTHER SUBM ITTED THAT THERE IS NO INCREASE IN THE NET WORTH SO AS TO TREAT THE CAS H DEPOSIT AS UNEXPLAINED INCOME, BECAUSE THE SAID TRANSACTION IS NEITHER UNEXPLAINED INVESTMENT NOR UNEXPLAINED CASH CREDIT, AS THE AMOU NT BORROWED WAS REPAID DURING THE SAME FINANCIAL YEAR. HOWEVER, TH E CIT(A) DISMISSED THE ASSESSEES APPEAL AND CONFIRMED THE ADDITIONS M ADE BY THE A.O. WHILE DOING SO, THE CIT(A) WAS OF THE OPINION THAT T HE ASSESSEE IS FAILED TO PROVE THE IDENTITY OF THE CREDITOR, GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE PERSONS FROM WHOM HAND LOAN S WERE TAKEN, THEREFORE, THE DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE WERE STANDS UNEXPLAINED. AGGRIEVED BY THE CIT(A) ORDER, THE AS SESSEE IS IN APPEAL BEFORE US. 4. WHEN THIS APPEAL IS TAKEN UP FOR HEARING, WE FIND THAT THE ASSESSEE HAS FILED A LETTER DATED 19.1.2016, WHEREI N HE HAS REQUESTED THAT THE APPEAL MAY BE DISPOSED BASED ON THE WRITTE N SUBMISSION FILED ALONG WITH FORM NO.36. ON THE OTHER HAND, THE LD. D .R. STRONGLY SUPPORTED THE ORDER OF CIT(A). 5. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTA TIVE AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE A.O . MADE ADDITION OF RS.30 LAKHS U/S 68 OF THE ACT TOWARDS CASH CREDITS IN BANK ACCOUNT. THE A.O. WAS OF THE OPINION THAT THE ASSESSEE HAS NOT E XPLAINED THE NATURE OF CREDIT AND SOURCE FOR CREDIT IN THE BANK ACCOUNT . IT WAS THE CONTENTION OF THE ASSESSEE THAT HE HAS TAKEN LOANS FROM HIS FRIENDS AND RELATIVES TO LEND MONEY TO HIS EMPLOYER COMPANY. T HE ASSESSEE FURTHER CONTENDED THAT THE EMPLOYER COMPANY HAS RETURNED TH E MONEY WITHIN ITA NO.717/VIZAG/2013 I. PATTABHIRAMA RAO, VIJAYAWADA 4 THE SAME FINANCIAL YEAR AND WHICH WAS WITHDRAWN FRO M THE BANK AND RETURNED TO THE PERSONS FROM WHOM HE HAS TAKEN LOAN . THEREFORE, NO ADDITIONS CAN BE MADE U/S 68 OF THE ACT. THE CIT(A ) CONFIRMED THE ADDITIONS MADE BY THE A.O. FOR THE REASON THAT THE ASSESSEE HAS NOT PROVED THE CREDITS IN BANK ACCOUNT BY FURNISHING ID ENTITY, GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE CREDIT ORS. THE FACTS REMAIN SAME EVEN BEFORE US. THE ASSESSEE HAS NOT PROVED T HE CREDITS IN BANK ACCOUNT BY FURNISHING ANY CONFIRMATION LETTER FROM THE CREDITORS. THE ASSESSEE HAS FAILED TO PROVE THE CREDITS BY PROVING THE GENUINENESS OF THE TRANSACTIONS AND ALSO CREDITWORTHINESS OF THE C REDITORS. JUST BECAUSE, THE TRANSACTION WAS SQUARED UP DURING THE FINANCIAL YEAR, IT CANNOT BE SAID THAT THE SOURCE FOR INITIAL CASH DEP OSIT WAS EXPLAINED. THE ASSESSEE MERELY STATED THAT HE HAS BORROWED LOAN FR OM FRIENDS, BUT FAILED TO PROVE THE LOAN WITH EVIDENCES. THEREFORE, WE ARE OF THE OPINION, THAT THE A.O. HAS RIGHTLY MADE THE ADDITIO NS U/S 68 OF THE ACT TOWARDS CASH CREDITS IN BANK ACCOUNT. WE DO NOT FIND ANY ERROR OR INFIRMITY IN THE ORDERS OF THE LOWER AUTHORITIES. HENCE, WE UPHOLD THE CIT(A)S ORDER AND DISMISS THE APPEAL FILED BY THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28 TH JAN16. SD/- SD/- (. ) ( . ) ( V. DURGA RAO ) ( G. MANJUNATHA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ) /VISAKHAPATNAM: - / DATED : 28.01.2016 VG/SPS ITA NO.717/VIZAG/2013 I. PATTABHIRAMA RAO, VIJAYAWADA 5 ' /) 0)/ COPY OF THE ORDER FORWARDED TO :- 1. / THE APPELLANT SHRI L. NARASIMHARAO & CO., CHARTERED ACCOUNTANTS, D.NO.27-23-152, APOORVA ESTATES, DURGAIAH STREET, G OVERNORPET, VIJAYAWADA-520 002. 2. '# / THE RESPONDENT THE ITO WARD-1(1), VIJAYAWADA 3. 3 / THE CIT, VIJAYAWADA 4. 3 () / THE CIT (A), VIJAYAWADA 5. ) ' 8, ' 8 , ) / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // => 8 ( SR.PRIVATE SECRETARY ) ' 8 , ) / ITAT, VISAKHAPATNAM