M/s Saralaya Srinivassaiah Sripathy (HUF) , Bangalore V. The Income Tax Officer ward-2(2)(1), Bangalore

ITA 734/BANG/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4806 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 08-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMIR SINGH MEENA BENGALU RU
• Assessee Lawyers: B P RAO
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO S . 73 3 & 73 4 /BANG/2018 ASSESSMENT YEAR S : 2013 - 14 & 2014 - 15 M/S. SARALAYA SRINIVASAIAH SRIPATHY (HUF), NO.45, CENTRAL STREET, KUMARA PARK WEST, BANGALORE 560 020. PAN: AADHS 6662K VS. THE INCOME TAX OFFICER, WARD 2(2)(1), BANGALORE. APP ELLANT RESPONDENT APP ELLANT BY : SHRI B.P. RAO, CA RESPONDENT BY : SHRI SUMIR SINGH MEENA, ADDL.CIT(DR)(ITAT), BENGALU RU. DATE OF HEARING : 27.03.2018 DATE OF PRONOUNCEMENT : 31 .05.2018 O R D E R THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAI NST THE RESPECTIVE ORDER OF THE CIT(APPEALS) PERTAINING TO ASSESSMENT YEARS 2013- 14 & 2014-15 ON THE COMMON GROUNDS. SINCE THE GROU NDS ARE COMMON IN BOTH THESE APPEALS, THE GROUNDS RAISED IN APPEAL IN ITA NO.734/BANG/2018 ARE EXTRACTED HEREUNDER:- 1. THE ACTION OF THE AO IN COMPUTING RS 27,50,000 AS UNEXPLAINED CREDIT AND INCREASING THE RETURNED INCO ME IS OPPOSED TO LAW, EQUITY, PROBABILITY AND CIRCUMSTANCES OF TH E CASE. ITA NOS.733 & 734/BANG/2018 PAGE 2 OF 4 2. THE AO HAS ERRED IN APPLYING SECTION 68 BY ADDIN G CERTAIN AMOUNTS AS UNEXPLAINED CREDITS IN THE BOOKS, WHEN T HE APPELLANT HAD NOT MAINTAINED ANY BOOKS OF ACCOUNTS AND APPELL ANT WAS NOT REQUIRED TO MAINTAIN ANY BOOKS OF ACCOUNTS AS PER I NCOME TAX ACT 1961. 3. THE AO HAS NOT IDENTIFIED IN THE ASSESSMENT ORD ER, THE CREDIT/S' IN THE BANK STATEMENT, WHICH ARE UNEXPLAI NED AND HAS WRONGLY COMPUTED RS.27,50,000 AS UNEXPLAINED CREDIT WITHOUT ANY BASIS. 4. THE AO HAS FAILED TO APPRECIATE THE FACT THAT T HE APPELLANT HAS ONLY AGRICULTURAL ACTIVITY AND ANY INCOME FROM AGRICULTURE IS OUTSIDE THE PURVIEW OF CHARGEABILITY OF SECTION 4 O F THE INCOME TAX ACT,1961. 5. THE AO HAS IGNORED THE FACTS AND EXPLANATIONS P ROVIDED BY THE APPELLANT DURING THE HEARING AND HAS ERRED I N COMPUTING RS.27,50,000 AS UNEXPLAINED CREDIT STATING THAT THE SUM REPRESENT UNEXPLAINED AMOUNT. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED. 2. THOUGH VARIOUS GROUNDS ARE RAISED, BUT THEY ALL RELATE TO THE ADDITION MADE U/S. 68 AFTER RESTRICTING THE AGRICUL TURAL INCOME DECLARED BY THE ASSESSEE WHILE COMPLETING THE ASSESSMENT BY THE AO. 3. THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT IN THE AY 2013- 14, THE ASSESSEE HAS CLAIMED THE AGRICULTURAL INCOM E AT RS.26.50 LAKHS AND RS.35 LAKHS IN AY 2014-15 IN THE RETURN OF INCO ME FILED. THE RETURN OF INCOME WAS INITIALLY PROCESSED U/S. 143(1) OF THE A CT, LATER ON SCRUTINY ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT. W HILE FRAMING THE REGULAR ASSESSMENT, THE AO ASKED THE ASSESSEE TO JU STIFY THE AGRICULTURAL ITA NOS.733 & 734/BANG/2018 PAGE 3 OF 4 INCOME CLAIMED BY IT. IN RESPONSE TO THAT QUERY, T HE ASSESSEE HAS FILED A LETTER DATED 07.11.2016 STATING THEREIN THAT IN FAC T THE AGRICULTURAL INCOME IN AY 13-14 IS OF RS.18,57,446 AGAINST THE AGRICULTURA L INCOME DECLARED AT RS.26.50 LAKHS AND DIFFERENCE OF RS.7,92,554 WAS AD DED BACK TO THE RETURNED INCOME OF THE ASSESSEE. IN AY 2013-14, AG RICULTURAL INCOME OF RS.7.5 LAKHS WAS TAKEN AGAINST DECLARED INCOME OF R S.35 LAKHS AND THE BALANCE OF RS.27,50,000 WAS ADDED TO THE RETURNED I NCOME. 4. THE ASSESSEE PREFERRED APPEALS BEFORE THE CIT(AP PEALS), BUT DID NOT FIND FAVOUR WITH HIM. 5. NOW THE ASSESSEE IS APPEALS BEFORE US WITH THE S UBMISSION THAT ONCE THE RETURN WAS PROCESSED U/S. 143(1), THE AO C ANNOT MAKE ADDITIONS OF THE DIFFERENCE AMOUNT AS THE AGRICULTURAL INCOME WAS TAKEN FOR THE TAX PURPOSES. HE HAS ALSO FILED WRITTEN SUBMISSIONS. 6. THE LD. DR, ON THE OTHER HAND, HAS CONTENDED THA T WHEN THE ASSESSEE WAS ASKED TO EXPLAIN THE DECLARED AGRICULT URAL INCOME, HE CAME FORWARD WITH A LETTER STATING THEREIN THAT PARTICUL AR INCOME IS THE AGRICULTURAL INCOME OF THE ASSESSEE WHICH WAS LATER ON ACCEPTED BY THE AO AND HE MADE THE ADDITION OF THE DIFFERENCE. THEREFORE, NO INTERFERENCE IN THE ORDER OF CIT(APPEALS) IS CALLED FOR. 7. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOW ER AUTHORITIES IN THE LIGHT OF RIVAL SUBMISSIONS, I AM OF THE VIEW THAT T HE AO HAS MADE THE ITA NOS.733 & 734/BANG/2018 PAGE 4 OF 4 ADDITIONS ON THE BASIS OF THE ADMITTED AGRICULTURAL INCOME BY THE ASSESSEE. WHEN THE ASSESSEE ITSELF HAS COME FORWARD BEFORE TH E AO THROUGH THE LETTER AND CONTENDED THAT AGRICULTURAL INCOME DECLA RED IN THE RETURN OF INCOME WAS NOT PROPER AND CORRECT INCOME WAS DECLAR ED IN THE LETTER. IN THIS SITUATION I AM OF THE VIEW THAT THE AO HAS RIG HTLY MADE THE ADDITION OF THE DIFFERENCE IN THE AGRICULTURAL INCOME SHOWN AND ACCEPTED BY THE AO TO THE RETURN OF INCOME. I THEREFORE FIND NO INFIRMIT Y IN THE ORDER OF THE CIT(APPEALS). ACCORDINGLY, I CONFIRM THE SAME. 8. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE D ISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF MAY, 2018. SD/- ( SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE, DATED, THE 31 ST MAY, 2018. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.