Venugopal Rao Vidala, Hyderabad, Secunderabad V. ITO, Ward-12(3), Hyderabad, Hyderabad

ITA 83/HYD/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2288 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-12-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 16-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M V ANIL KUMAR
• Keywords: Salary income
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 83/HYD/2017 ASSESSMENT YEAR: 2009-10 SRI V. VENUGOPAL RAO, HYDERABAD [PAN: ACAPV1032H] VS THE INCOME TAX OFFICER, WARD-12(3), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI M.V. ANIL KUMAR, AR FOR REVENUE : SHRI PRABHAT KUMAR GUPTA, DR DATE OF HEARING : 06-12-2017 DATE OF PRONOUNCEMENT : 20-12-2017 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-1, HYDERABAD, DATED 04-10-2016, FOR THE AY. 2009-10. THE ISSUE IN THIS AP PEAL IS WITH REFERENCE TO DEPOSITS MADE IN THE BANK ACCOUNT BY ASSES SEE, WHO IS AN EMPLOYEE IN LLOYD INSULATIONS (INDIA) LTD. 2. BRIEFLY STATED, FOR THE AY. 2009-10, ASSESSEE FILED RETURN OF INCOME ADMITTING SALARY INCOME OF RS. 1,40,630/-. TH E ASSESSING OFFICER (AO) NOTICED THAT ASSESSEE HAD MADE CASH DEPO SITS IN ICICI BANK TO THE TUNE OF RS. 11,43,713/-. HE ALSO FOUND OUT THAT THERE ARE CERTAIN CASH DEPOSITS IN CREDIT CARD ACCOUNTS ALSO AMOUNTING TO RS. 3,16,700/-. ON THE REASON THAT ASSESSEE HAS NOT E XPLAINED THE AMOUNT, AO ADDED AN AMOUNT OF RS. 14,60,413/- [WRONG LY SHOWN AS RS. 26,16,222/- IN THE ASSESSMENT ORDER]. ASSESS EE CONTESTED BEFORE THE CIT(A) THAT HE WAS NOT GIVEN DUE OPPORTUNITY TO SUBMIT THE INFORMATION CALLED FOR AND ALSO EXPLAINED THE SOUR CE OF FUNDS I.T.A. NO. 83/HYD/2017 :- 2 - : BEING THAT OF COMPANY. LD.CIT(A) DISMISSED THE ASSESSE ES CONTENTIONS, HOWEVER, GAVE CERTAIN FINDINGS IN THE ORDE R, WHICH IS AS UNDER: THE APPELLANT HAD SUBMITTED COPIES OF BANK STATEME NT FROM ICICI BANK AND CREDIT CARD STATEMENTS FROM HSBC, STANDARD CHARTERED, CITI BANK AND STATEMENT FOR VARIOUS EXPENSES. AFTER VERIFYING THE ABOVE, IT IS NOTICED THAT - (1) THE APPELLANT BEFORE THE ASSESSING OFFICER HAS GIVE N EXPLANATION REGARDING CHEQUE PAYMENTS AND NOT FOR CASH DEPOSITS . (2) HE HAS GIVEN MONTH-WISE CREDIT CARD PAYMENTS WHICH WERE PAID ALL IN CASH. (3) MOST OF THE DEPOSITS IN THE BANK IS CASH DEPOSITS A ND TRANSFER FROM LLOYDS (EMPLOYER). (4) AS PER THE FORM-16 SUBMITTED FROM M/S. LLOYD INSULA TIONS (I) LTD., CHENNAI, WHERE HE WAS SR. MANAGER (CONT. SALES), TH E GROSS TOTAL INCOME IS SHOWN AT RS.2,62,095/- WHILE CASH DEPOSIT S IN HIS BANK ACCOUNT ARE RS.14.60 LAKHS. (5) APPELLANT ALSO SUBMITTED IN STATEMENT OF FACTS THAT HE USED TO DEPOSIT THE AMOUNTS RECEIVED AS TRAVEL ADVANCE. HOW EVER, AS SEEN FROM THE STATEMENT FOR VARIOUS EXPENSES, THE TOUR A MOUNT IS VERY SMALL AMOUNT FROM RS.1000/- TO RS.5000/- AND MOST O F CAR AND TELEPHONE BILLS RECEIVED FROM THE COMPANY AND FOOD, MOBILE, PETROL, VEHICLE MAINTENANCE, CASH ALLOWANCES ETC., TOTALING TO RS. 2,60,703/-. THIS IS NOT INCLUDED IN HIS SALARY INCO ME. THESE ARE PERKS. HENCE, THE CASH DEPOSITS IN HIS BANK ACCOUNT REMAIN UNEXPLAINED. I AGREE WITH THE ASSESSING OFFICER AND THE ADDITION I S UPHELD. ASSESSEE IS AGGRIEVED. 3. IT WAS THE SUBMISSION OF LD. COUNSEL THAT THE ENTIRE EXPLANATION WAS GIVEN FOR CASH DEPOSITS AND TRANSFERS AND ALSO FOR CREDIT CARD PAYMENTS AND CIT(A) WAS WRONG IN CONSIDER ING THAT THE AMOUNTS SHOULD HAVE BEEN CONSIDERED AS PERKS WITHOU T GIVING I.T.A. NO. 83/HYD/2017 :- 3 - : OPPORTUNITY OR WITHOUT EXPLAINING HOW THEY BECOME PER KS. IT WAS THE SUBMISSION THAT IF THE MATTER IS RESTORED TO THE FIL E OF AO, ASSESSEE WOULD HAVE EXPLAINED VARIOUS DEPOSITS IN THE BANK ACCOUNTS. 4. LD.DR, HOWEVER, RELIED ON THE ORDERS OF AO AND CI T(A). 5. IT IS THE CONTENTION OF ASSESSEE BEFORE THE CIT(A) TH AT HE WAS NOT GIVEN PROPER OPPORTUNITY TO EXPLAIN BEFORE THE AO. EVEN THOUGH CERTAIN INFORMATION WAS FURNISHED BEFORE THE CIT (A) INCLUDING CERTIFICATE FROM THE EMPLOYER THAT THEIR TRANSAC TIONS ARE ALSO BEING DONE THROUGH HIS ACCOUNT BEING AREA MANAGE R, STATIONED AT HYDERABAD BUT LOOKING AFTER PROJECTS IN AN D AROUND HYDERABAD AND VISAKHAPATNAM LD. CIT(A) HAS NOT CONSID ERED THE SAME. LD.CIT(A) GIVES FINDING THAT MOST OF THE CASH DE POSITS ARE TRANSFER FROM LLOYD INSULATIONS (INDIA) LTD., EMPLOYE R. INSPITE OF THAT, LD. CIT(A) WENT ON TO CONFIRM THE AMOUNTS HOLDING THAT THESE BECOME PERKS, WITHOUT ANALYZING WHETHER THEY ARE TAXABL E PERKS OR NOT? BE THAT AS IT MAY, AS SEEN FROM THE ASSESSMENT OR DER, AO RECORDS AS UNDER: IN RESPONSE TO THE SAID NOTICES, THE ASSESSEE HAS APPEARED ON 15/12/2011 AND HE WAS ASKED TO FURNISH THE SOURCES FOR CASH DEPOSITS IN ICICI BANK, KHAIRATABAD BRANCH, HYDERABAD. NOTICES U/S. 142(1) WERE ISSUED TO ASSESSEE. SUBSEQUENTLY, A FINAL OPPORTUNI TY LETTER DT. 02/12/2011 WAS ISSUED TO ASSESSEE TO EXPLAIN THE CA SH DEPOSITS. AFTER VERIFYING THE INFORMATION FURNISHED BY THE ASSESSEE AND THE INFORMATION AVAILABLE ON RECORD, THE ASSESSMENT IS COMPLETED. 5.1. EVEN THOUGH AO STATES THAT ASSESSEE HAS APPEARED ON 15-12- 2011 AND SUBSEQUENTLY, A FINAL OPPORTUNITY LETTER DT. 0 2-12-2011 WAS ISSUED, IT IS NOT UNDERSTANDABLE HOW A FINAL OPPO RTUNITY LETTER CAN BE GIVEN DT. 02-12-2011, WHEN THE CASE WAS HEARD ON 15-12- I.T.A. NO. 83/HYD/2017 :- 4 - : 2011. AS SEEN FROM THE FIRST PAGE OF THE ASSESSMENT OR DER ALSO, THERE IS ONLY ONE DATE OF HEARING I.E., 15-12-2011 ON THE DATE WHICH, ASSESSEE APPEARED IN PERSON. FURTHER, THERE S EEMS TO BE NO OPPORTUNITY GIVEN TO ASSESSEE, BUT AO WRONGLY MENTIONS THAT A FINAL OPPORTUNITY WAS GIVEN DT. 02-12-2011, AFTER HEA RING THE CASE ON 15-12-2011. THERE SEEMS TO BE SOME MISCOMMUNICAT ION OR MISMATCH BUT THE FACT IS THAT ASSESSEE WAS NOT GIVEN PROP ER OPPORTUNITY. CONSIDERING THIS, I AM OF THE OPINION THA T THE ISSUE OF CASH DEPOSITS AND DEPOSITS FOR CREDIT CARD PAYMENTS SHO ULD BE EXAMINED AFRESH BY THE AO, AFTER GIVING DUE OPPORTUNI TY TO ASSESSEE AND ALSO CONSIDERING THE EXPLANATION GIVEN B Y THE EMPLOYER THAT ASSESSEES BANK ACCOUNT IS BEING USED FOR SOME OF THE TRANSACTIONS OF THE COMPANY IN WHICH HE IS WORKING. FOR THIS PURPOSE, THE ORDERS OF AO AND CIT(A) ARE SET ASIDE AN D THE ISSUE IS RESTORED TO THE FILE OF AO FOR FRESH CONSIDERATION, ON THE BASIS OF THE FACTS AND LAW. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH DECEMBER, 2017 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 20 TH DECEMBER, 2017 TNMM I.T.A. NO. 83/HYD/2017 :- 5 - : COPY TO : 1. SRI V. VENUGOPAL RAO, C/O. M. ANANDAM & CO., CHARTERED ACCOUNTANTS, 7A, SURYA TOWERS, S.P. ROAD, SECUNDERABAD. 2. THE INCOME TAX OFFICER, WARD-12(3), HYDERABAD. 3. CIT (APPEALS)-1, HYDERABAD. 4. PR.CIT-1, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.