Sivasankar Cilipireddy, Tirupati, Tirupathi V. ITO, Ward-1(1). Tirupathi, Tirupathi

ITA 799/HYD/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2973 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-07-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 08-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V RAMA MOHAN
• Assessee Lawyers: S RAMA RAO
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES CIRCUIT BENCH A, AT TIRUPATI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 799/HYD/2017 ASSESSMENT YEAR: 2010-11 SIVASANKAR CHILIPIREDDY, TIRUPATI [PAN: ABVPC2474J] VS INCOME TAX OFFICER, WARD-1(1), TIRUPATI (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI V. RAMA MOHAN, DR DATE OF HEARING : 16-05-2018 DATE OF PRONOUNCEMENT : 23-05-2018 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-TIRUPATI, DATED 17-03-2017. THE GROUNDS RAISED ARE AS UNDER: 2) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN CONFIRMING AN ADDITION OF RS.6,00,000/- ON THE GROUND THAT THE RE WAS NO VALID EXPLANATION FOR THE CASH DEPOSIT OF RS.6,00,000/- O UT OF RS.20,00,000/ - ON 01.08.2009 OUT OF RS.20,00,000/-. 3) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.6,00,000/- DEPOSITED ON 04.06.20 09 INTO THE BANK ACCOUNT WITHOUT CONSIDERING THE FACT THAT THE APPEL LANT EXPLAINED THE SOURCE FOR CASH DEPOSIT FROM THE AGRICULTURAL INCOM E; 4) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.3,00,450/- ON THE GROUND THAT IT REPRESENT THE UNEXPLAINED LOAN. I.T.A. NO. 799/HYD/2017 :- 2 - : 5) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.45,000/- WITHOUT CONSIDERING THE FACT THAT THE SAID AMOUNT REPRESENT REALISATION FROM THE DEBTORS. GROUND NOS. 1 & 6 ARE GENERAL IN NATURE. 2. BRIEFLY STATED FACTS ARE, ASSESSEE IS AN INDIVIDUAL FILED HIS RETURN OF INCOME FOR THE AY. 2010-11 ON 02-08-2010 AD MITTING AN INCOME OF RS. 2,55,340/-. ASSESSEE WAS AN EMPLOYEE OF TIRUMALA TIRUPATI DEVASTHANAMS. HE IS ASSESSED TO TAX IN TWO C APACITIES, I.E., INDIVIDUAL CAPACITY AND HUF CAPACITY. FOR T HE AY. 2010-11, ASSESSEE FILED HIS RETURN OF INCOME IN HIS INDIVIDUA L CAPACITY ON 02- 08-2010. HE FILED HIS RETURN OF INCOME WITH A TOTAL IN COME OF RS. 2,55,340/-. THE RETURN WAS SELECTED FOR SCRUTINY AND AO ISSUED THE NOTICES U/S. 143(2) ON 14-09-2011 AND NOTICE U/S. 142(1) ON 19-02-2013. AO COMPLETED THE ASSESSMENT ON 28-03-201 2. AO MADE ADDITIONS OF RS. 29,57,542/-. AO ENQUIRED ABOUT THE SOURCES OF CASH DEPOSITS IN BANK ACCOUNTS. ASSESSEE EXPLAIN ED THAT HE RECEIVED AN AMOUNT OF RS. 20 LAKHS AS ADVANCE FOR SA LE OF PROPERTY WHICH WAS LATER CANCELLED. AN AMOUNT OF RS. 6 LAKHS D EPOSIT WAS OUT OF SAID ADVANCE. ANOTHER DEPOSIT OF RS. 6 LAKHS WA S OUT OF AGRICULTURAL INCOME. RS 3,45,400 WAS RETURN OF ADVAN CE MADE EARLIER. AO DISBELIEVED THE EXPLANATION AND MADE ASSE SSMENT MAKING THE FOLLOWING ADDITIONS: S.NO. PARTICULARS AMOUNT (RS) 1. UNEXPLAINED MONEY 20,00,000 2. UNEXPLAINED CASH 6,00,000 3. UN-ADMITTED BANK INTEREST 12,142 4. UNEXPLAINED LOANS 3,45,400 GRAND TOTAL 29,57,542 AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE L D.CIT(A). I.T.A. NO. 799/HYD/2017 :- 3 - : 3. LD.CIT(A) WHILE DELETING THE AMOUNT OF RS. 20LAKHS CONFIRMED AN AMOUNT OF RS. 6 LAKHS OUT OF RS. 20 LAKH S AND THE OTHER TWO ADDITIONS. HENCE THE PRESENT APPEAL. 4. LD. COUNSEL SUBMITTED THAT ON AN ENQUIRY LD.CIT(A) A CCEPTED THAT ASSESSEE HAS RECEIVED ADVANCE OF RS. 20 LAKHS WH ICH WAS RETURNED LATER AND THE CASH DEPOSIT OF RS. 6 LAKHS WAS OUT OF THE SAID AMOUNT. HE REFERRED TO THE FINDING OF AO IN THE ASSESSMENT ORDER. REGARDING THE DEPOSIT OF RS. 6 LAKHS WHICH W AS AGRICULTURAL INCOME AND THE BALANCE OF THE MONEY WAS RECEIPT OUT OF ADVANCE GIVEN EARLIER. IF THE OTHER PARTY DENIED THE TRANSACTIO N, AFTER GIVING CONFIRMATION TO ASSESSEE, THEN THE CASH BALANCE TO THAT E XTENT WOULD BE AVAILABLE. SO, THE ADDITIONS CONFIRMED BY TH E LD.CIT(A) ARE NOT CORRECT. 5. LD.DR RELIED ON THE ORDERS OF THE LD.CIT(A)/AO. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE PAPER BOOK. AO MADE AN ADDITION OF RS. 20 LAKHS STATE D TO BE ADVANCE RECEIVED BY ASSESSEE FOR SALE OF PROPERTY, WHICH WAS CANCELLED SUBSEQUENTLY. AO DOUBTED THE TRANSACTION WHEN ASSESSEE EXPLAINED THE SOURCE OF CASH DEPOSIT OF RS. 6 LAKHS MADE IN THE BANK ACCOUNT. AO GAVE A FINDING THAT RS. 6 LA KHS WAS NOT BEING ADDED SEPARATELY AS THE ENTIRE RS. 20 LAKHS WA S ADDED. THE SUBSEQUENT ENQUIRIES BEFORE THE LD.CIT(A) REVEALED THA T THE RECEIPT OF RS. 20 LAKHS TOWARDS ADVANCE WAS GENUINE AS THE PA RTIES CONFIRMED THE SAME. THEREFORE, THE DEPOSIT OF RS. 6 L AKHS OUT OF RS. 20 LAKHS IN BANK ACCOUNT STANDS EXPLAINED. THE A DDITION SUSTAINED BY LD.CIT(A) IS NOT CORRECT AS THE SOURCE OF MONEY WAS I.T.A. NO. 799/HYD/2017 :- 4 - : THE ADVANCE RECEIVED ITSELF. THE ADDITION STANDS DELET ED. GROUND NO. 2 IS ALLOWED. 6.1. WITH REFERENCE TO SOURCE OF AGRICULTURAL INCOME OF RS. 6 LAKHS DEPOSITED IN BANK ACCOUNT, ASSESSEE RETURNED AGRICULTU RAL INCOME OF RS. 3,45,000/- IN THE RETURN ITSELF. THE GROSS SAL E PROCEEDS AND INCOME MAY VARY BUT THE SOURCE CANNOT BE DISBELIEVED. HENCE, WE ACCEPT THE EXPLANATION GIVEN BY ASSESSEE AND DELETE THE SAME. GROUND NO. 3 IS ALLOWED. 6.2. COMING TO THE ADDITION OF RS. 3,45,450/- BEING RECEIPTS IN CASH FLOW STATEMENT, ASSESSEE EXPLANATION WAS THAT IT WA S RECOVERY OF MONEY ADVANCED EARLIER AND SHOWN IN THE RETURNS IN EARLIER YEARS. IF THE PARTY DENIES THE TRANSACTION, THAT CANNOT BE A REASON TO SUSTAIN THE ADDITION, AS MONEY WOULD BE AVAILABLE IF THE LOANS GIVEN EARLIER WAS IGNORED. SINCE THE ADVANCE AND SU BSEQUENT RECEIPT ARE INTERLINKED, THE SOURCE OF MONEY STANDS EX PLAINED AS THE STATEMENTS IN EARLIER YEAR REFLECTS THE ADVANCE FOR WHICH ASSESSEE HAS SOURCE. THEREFORE, THE SAME CANNOT BE TAX ED AS UNEXPLAINED IN THIS YEAR. THERE IS MERIT IN THE ASSE SSEE CONTENTIONS. HENCE THE GROUND NOS. 4 & 5 ARE ALLOWED. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD MAY, 2018 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT ME MBER HYDERABAD, DATED 23 RD MAY, 2018 TNMM I.T.A. NO. 799/HYD/2017 :- 5 - : COPY TO : 1. SHRI SIVASANKAR CHILIPIREDDY, FLAT NO. 122, L.S. NAGAR, TIRUPATI. 2. THE INCOME TAX OFFICER, WARD-1(1), TIRUPATI. 3. CIT(APPEALS)-TIRUPATI. 4. PR.CIT-TIRUPATI. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.