V.Nagamani, Hyd, Hyderabad V. ITO, Ward-8(1), Hyd, Hyderabad

ITA 851/HYD/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6017 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 24-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: V RAGHAVENDRA RAO
• Keywords: Unexplained cash credit; Unexplained investment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 851/HYD/2015 ASSESSMENT YEAR: 2009-10 V. NAGAMANI, HYDERABAD. PAN ABQPV 1362 D VS. INCOME-TAX OFFICER, WARD 8(1), HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V. RAGHAVENDRA RAO REVENUE BY : SHRI K.J. RAO DATE OF HEARING 18-10-2016 DATE OF PRONOUNCEMENT 16 -11-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(A) - VI, HYD ERABAD, DATED 6 TH MAY, 2015 FOR AY 2009-10. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS AN INDIVIDUAL DERIVING INCOME FROM HOUSE PROPERTY. SHE FILED HER RETURN OF INCOME ON 26/03/2010 DECLARING TOTAL INCOME OF RS. 3,09,830/-. THE AO COMPLETED THE ASSESSMENT U/S 143(3) BY MAKING TH E FOLLOWING ADDITIONS: 1. UNEXPLAINED INVESTMENT IN PURCHASE OF LAND RS. 12,50,000/- 2. UNEXPLAINED INVESTMENT IN HOUSE PROPERTY RS. 19 ,00,000/- 3. UNEXPLAINED CREDITS IN THE BANK A/C RS. 3,13 ,710/- ACCORDINGLY, THE AO DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS. 37,73,540/-. ON APPEAL, THE CIT(A) CONFIRMED TH E ORDER OF THE AO. 2 ITA NO. 851/H/15 V. NAGAMANI 3. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US R AISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED ON FACTS AND IN LAW. 2. LEARNED CIT (A) IS NOT JUSTIFIED IN HOLDING THAT THE AMOUNT OF RS. 12.50 LAKH PAID ON 22.10.2008 TO THE SELLER OF THE PROPERTY HAS BEEN MADE OUT OF UNEXPLAINED SOURCES. THE ENTRI ES IN CASH FLOW STATEMENT ARE UNREASONABLY DOUBTED. 3. (A) LEARNED CIT(A) IS NOT JUSTIFIED IN SUSTAININ G THE ADDITION OF RS.19,00,000/- AS UNEXPLAINED INVESTMENT. THE ENTRI ES IN CASH FLOW STATEMENT ARE UNREASONABLY DOUBTED. (B) LEARNED CIT(A) IS NOT AT AN JUSTIFIED IN DOUBTI NG THE SOURCE OF RS. 13.45 LAKH GIVEN TO THE ASSESSEE BY HER SON FOR THE PURPOSE OF CONSTRUCTION FROM OUT OF THE LOAN OBTAINED BY HI M. 4. LEARNED CIT(A) IS NOT JUSTIFIED IN SUSTAINING TH E ADDITION OF RS. 3,13,710/- APPEARING IN THE CENTRAL BANK OF INDIA, KALYANA NAGAR BRANCH ACCOUNT OF THE ASSESSEE. 5. HAVING HELD THAT THE EARNING OF THE ASSESSEE WER E SUFFICIENT ONLY FOR THE LIVELIHOOD OF THE ASSESSEE, THE LOWER AUTHORITIES HAVE UNJUSTIFIABLY MADE ADDITIONS TO THE INCOME RET URNED WITHOUT ANY IOTA OF EVIDENCE THAT THE ASSESSEE HAD ANY OTHE R SOURCE OF INCOME. THE RATIO OF THE DECISION OF THE SUPREME CO URT IN THE CASE OF CIT VS. P.K. NOORJEHAN BEGUM (237 ITR 570) APPLIES TO THE FACTS OF THE CASE. 4. GROUND NOS. 1 & 5 ARE GENERAL IN NATURE. 5. AS REGARDS GROUND NO. 2 RELATING TO THE ADDITION OF RS. 12,50,000/-, THE ASSESSEE ENTERED INTO AN AGREEMENT FOR PURCHASE OF LAND AT KONDAPUR AND PAID RS.50 LAKHS TOWARDS HER S HARE. WHEN QUESTIONED ABOUT THE SOURCES FOR PAYMENT OF RS.50 L AKHS, IT WAS EXPLAINED THAT THE SAME WAS MET OUT FROM HER OWN SO URCES, LOAN ACCOUNT OF SPOUSE AND SON ON DIFFERENT DATES THROUG H CASH AND CHEQUES. OUT OF THE TOTAL SOURCES EXPLAINED BY THE ASSESSEE, THE ASSESSING OFFICER ACCEPTED THE SAME UPTO AN EXTENT OF RS.37.50 LAKHS AND TREATED THE AMOUNT OF RS.12.5 LAKHS CLAIM ED TO HAVE BEEN PAID ON 22.10.2008 AS UNEXPLAINED. THE MAIN REASON BROUGHT OUT BY 3 ITA NO. 851/H/15 V. NAGAMANI THE ASSESSING OFFICER FOR TREATING THE AMOUNT OF RS .12.5 LAKHS AS UNEXPLAINED IS THAT THE ASSESSEE LATER DEVIATED FRO M HER EARLIER VERSION OF SOURCES FOR THE SAID AMOUNT. 6. BEFORE THE CIT(A), THE ASSESSEE FILED A CASH FLO W STATEMENT WHEREIN THE ASSESSEE SUBMITTED THAT THE AMOUNT OF R S.12.50 LAKHS WAS PAID ON 22.10.2008. THE SOURCES WERE EXPLAINED AS LOANS TAKEN BY HER, HER SPOUSE AND HER SON. HOWEVER, THERE IS A GAP OF AROUND 3 MONTHS FROM THE DATE OF OBTAINING THE LOANS AND THE PAYMENT MADE TOWARDS PURCHASE OF LAND AT KONDAPUR. WHEN THE CIT( A) REMANDED THE CASH FLOW STATEMENT TO THE AO, THE ASSESSING O FFICER REFERRING TO THE CASH FLOW STATEMENT POINTED OUT THAT THE ASSESS EE HAS PILED UP THE CASH BALANCE TO THAT DATE TO FILL UP THE DEFICI ENCIES POINTED BY THE ASSESSING OFFICER AND THIS STATEMENT IS PREPARED AF TER-THOUGHT WITHOUT ANY BASIS AND DO NOT CARRY ANY EVIDENTIARY VALUE. 6.1 AGAINST THESE COMMENTS OF THE ASSESSING OFFICER IN REMAND REPORT, THE ASSESSEE SUBMITTED THAT THE CONSOLIDATE D CASH FLOW STATEMENT WAS NEVER CALLED FOR BY THE ASSESSING OFF ICER AND THIS WAS FILED DURING APPEAL PROCEEDINGS AND THIS CANNOT BE CONSTRUED AS PREPARED TO SUIT THE CONVENIENCE AND FILL UP THE VA CUUMS POINTED OUT BY THE ASSESSING OFFICER. REFERRING TO THE GAP IN W ITHDRAWALS FROM BANK AND PAYMENT ON SUBSEQUENT DATE, THE ASSESSEE R EVERTS TO THE CASH FLOW STATEMENT AND HAS NOT EXPLAINED THE GAP WITH ANY PLAUSIBLE EXPLANATION. 6.2 THE CIT(A) OBSERVED THAT IT IS PERTINENT TO MEN TION HERE THAT THE ASSESSEE IS CLAIMING THAT THE ASSESSING OFFICER HAD NOT CALLED FOR THE CONSOLIDATED CASH FLOW STATEMENT. HE FURTHER OBSERV ED THAT THOUGH HE DID NOT HAVE ANY OCCASION TO CALL FOR ANY CASH FLOW STATEMENT FROM THE ASSESSEE, IT IS ONLY ON HER OWN, FILED THE-CASH FLO W STATEMENT EXPLAINING THE SOURCES FOR CASH PAYMENTS FOR PURCHA SE OF LAND AT KONDAPUR. NO REASONS WERE BROUGHT BY THE ASSESSEE F OR NOT FURNISHING SUCH STATEMENT BEFORE THE ASSESSING OFFI CER DURING 4 ITA NO. 851/H/15 V. NAGAMANI ASSESSMENT PROCEEDINGS AND WHAT PROMPTED THEM TO FI LE THE SAME DURING APPEAL PROCEEDINGS, EXCEPT MENTIONING TO THE LACK OF PROPER AWARENESS IN THE MATTER ON THE PART OF THE ASSESSEE . THEREFORE, IN THE ABSENCE OF ANY CONCLUSIVE EVIDENCES FOR THE SOURCES OF CASH PAYMENT OF RS.12.50 LAKHS ON 22.10.2008, THE CIT(A) CONFIRM ED THE ADDITION MADE BY THE AO ON THIS COUNT. 7. BEFORE US, THE LD. AR OF THE ASSESSEE REFERRED T O THE LETTER DATED 10/10/2011 FILED BY THE ASSESSEE TO AO WHEREI N IT WAS STATED AS UNDER: 'ON 19.07.2008 I HAVE PAID BY CASH RS. 25,00,000/- (RUPEES TWENTY FIVE LAKHS ONLY) AS ADVANCE WHICH WAS DRAWN FROM MY LOAN ACCOUNT NO. (TLN- 573 RS. 15.00 LAKHS) (P 17 O F P.S) AND RS. 10.00 LAKHS (P 22 OF P.S) FROM MY HUSBAND V. VE NKATESWARA RAO LOAN ACCOUNT (NO. TLN 569 (RS. 15.00 LAKHS) (P 22 OF P.S) AND SUBSEQUENTLY PAID RS. 12.50 LAKHS ON 09.08.2008 BY WAY CHEQUE NO. 560712 (P 17 OF P.B) DRAWN ON ADARSH BAN K SB A/C. NO. 19641 AND FINALLY PAID RS. 12.50 LAKHS ON 22.10 .2008 FROM THE AMOUNT RECEIVED FROM MY SON V. SRINIVAS PRADEEP LOAN ACCOUNT NO. TLN 574 WHICH WAS DRAWN ON 21.07.2008 ( RS. 20.00 LAKHS)' (P 25 OF P.B). 7.1 REFERRING TO THE ABOVE, THE LD. AR SUBMITTED TH AT THE ASSESSEE HAS CLARIFIED THAT SHE HAD ALSO RECEIVED RS. 5,00,0 0/- FROM HUSBAND, SRI VENKATESWARA RAO AND RS. 7.50 LAKHS FROM HER SO N. THIS IS THE AMOUNT WITHDRAWN FROM HIS ADARSH BANK LOAN ACCOUNT ON 21.07.08 AND ON 21/10/2008. (PAGE 22 OF PAPER BOOK). A WORK ING OF THE SOURCE AND PAYMENT OF RS. 50,00,000/- HAS BEEN GIVEN TO THE A.O (PAGE 8 OF THE PAPER BOOK). L D. AR SUBMITTED THAT THE ASSESSEE, HER HUSBAND AND HER SON V. SRE ENIVAS PRADEEP RAISED TOTAL LOANS OF RS. 50,00,000/- BEING, RS. 15 ,00,000/-, RS. 15,00,000/- & RS. 20,00,000/- RESPECTIVELY FROM ADA RSH BANK WITH A VIEW TO ACQUIRE THE SITE FOR WHICH THEY PAID THE AM OUNTS AND THE WITHDRAWALS ARE FROM THOSE LOAN ACCOUNTS ROUTED THR OUGH THEIR SAVINGS BANK ACCOUNTS. COPIES OF SAVINGS BANK ACCOU NTS FOR THE PREVIOUS YEAR OF ALL THE THREE FORM PART OF THE PAP ER BOOK (P 17, 22 & 25 OF THE P .B). HE SUBMITTED THAT ASSESSEE PAID CA SH OF RS. 5 ITA NO. 851/H/15 V. NAGAMANI 12,50,000/- (THAT ISRS. 7,50,000/- OUT OF SON'S LOA N AND RS. 5,00,000/- HUSBAND'S LOAN) ON 22.10.2008. HE CONTENDED THAT TH E AO HAS NOT ACCEPTED THAT THE CASH COULD BE KEPT WITH HER FOR A BOUT 3 MONTHS. 7.2 THE LD. AR CONTENDED THAT CIT(A) ALSO WENT ALO NG WITH THE AO ON THE POINT. HE SUBMITTED THAT THE ASSESSEE EXPLAI NED DURING REMAND PROCEEDINGS THAT THERE WERE DOUBTS ABOUT THE TITLE TO THE LAND WHICH CROPPED UP AFTER THE AGREEMENT AND THAT THE CASH WA S PAID LATER ON 22.10.2008 (PAGE 2 OF THE P.B) AND NOT IMMEDIATELY. IN FACT, TILL TODAY THE LAND REMAINS UNREGISTERED BY WAY OF REGULAR SA LE DEED. HE SUBMITTED THAT THE AO AND THE CIT(A) BOTH DID NOT E VEN ADVERT TO THE EXPLANATION, IN THE REMAND REPORT OR IN THE APPELLA TE ORDER, RESPECTIVELY. 7.3 IT IS SUBMITTED THAT THE ADDITION OF RS. 12,50, 000/- IS TOTALLY UNJUSTIFIED. THE EXPLANATION IS REJECTED PURELY ON THE BASIS OF SUSPICION, SURMISE OR CONJECTURE. THERE IS NO MATER IAL TO SUGGEST THAT THE AMOUNT OF RS. 12,50,000/- WAS NOT AVAILABLE TO PAY TO THE VENDOR. IN THIS CONTEXT, THE AR RELIED ON THE OBSERVATION O F THE SUPREME COURT IN THE CASE OF UMACHARAN SHAW & BROS V. CIT (37 ITR 271) THAT 'MERE SUSPICION HOWEVER STRONG, CANNOT TAKE THE PLACE OF EVIDENCE'. SIMILAR OBSERVATIONS HAVE BEEN MADE BY THE HON'BLE SUPREME COURT IN THE CASE OF OMAR SALAY MOHMED SAIT V. CIT (37 ITR 171). THE HON'BLE DELHI BENCH OF THE TRIBUNAL HELD IN THE CASE OF ACI T V. BALDEV RAJ CHARLA AND ORS (2009) 121 TTJ 366 ITAT (DEL) AS FOL LOWS: 'THERE IS NO FINDING RECORDED BY THE LEARNED AO OR BY LEARNED CIT(A) THAT APART FROM DEPOSITING THESE CASH INTO BANK AS EXPLAINED B Y THE ASSESSEE, THERE WAS ANY OTHER USER BY THE ASSESSEE OF THESE A MOUNTS AND IN THE ABSENCE OF THAT, SIMPLY BECAUSE THERE 'WAS A TI ME GAP, THE EXPLANATION OF THE ASSESSEE CANNOT BE REJECTED AND HENCE THE ADDITION CONFIRMED BY THE LEARNED CIT (A) IS NOT CO RRECT. WE, THEREFORE, DELETE THE SAME. THIS GROUND OF THE ASSE SSEE IS ALLOWED'. 6 ITA NO. 851/H/15 V. NAGAMANI 8. THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORD ERS OF REVENUE AUTHORITIES. 9. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. THE FACTS ARE THAT THE ASSESSEE IS DERIV ING INCOME ONLY FROM RENTAL AND THERE IS NO OTHER SOURCE BROUGHT ON RECORD. CONSIDERING THE FACT, THE ASSESSEE WOULD NOT HAVE C ONSIDERED THIS ADDITIONAL INVESTMENT EXCEPT BY TAKING LOAN FROM BA NK OR FROM HER RELATIVES. THE ASSESSEE HAD CLEARLY EXPLAINED THE S OURCE OF RS. 50 LAKHS, FROM THE LOAN TAKEN BY HER, HER SPOUSE AND H ER SON. IT WAS NOT BROUGHT ON RECORD ANY OTHER UTILISATION FOR THE LOA N TAKEN BY HER AND HER FAMILY. HER SON WITHDREW CASH OF RS. 20 LAKHS O N 21/07/2008 AND THE SAME WAS UTILIZED TO PAY ON 22/10/2008. THERE I S NO OTHER DIVERSION OR UTILISATION OF RS. 20 LAKH WAS BROUGHT ON RECORD. CONSIDERING THE ABOVE DISCUSSION, IN OUR VIEW, THE ASSESSEE HAS CLEARLY EXPLAINED THE SOURCES FOR THE INVESTMENT. T HE REVENUE DISPUTES ON RS. 12.50 LAKHS PAYMENT FOR WHICH THERE IS CLEAR EVIDENCE THAT HER HUSBAND WITHDREW RS. 5 LAKHS AND HER SON W ITHDREW RS. 7.50 LAKHS FROM THEIR RESPECTIVE BANK ACCOUNT. ONCE THE ASSESSEE DEMONSTRATES THE SOURCES CLEARLY, THERE IS NO ROOM FOR OTHER VIEWS. THERE MAY BE SOME DELAY IN MAKING THE PAYMENT BUT T HE SOURCES ARE CLEAR, IT HAS TO BE CONSIDERED. ACCORDINGLY, THIS G ROUND OF ASSESSEE IS ALLOWED. 10. AS REGARDS GROUND NO. 3 PERTAINING TO THE ADDI TION OF RS. 19,00,000/- TREATING THE INVESTMENT IN HOUSE PROPER TY AS UNEXPLAINED, THE FACTS ARE THAT THE ASSESSEE CLAIMED TO HAVE INV ESTED RS.19 LAKHS IN CONSTRUCTION OF HOUSE DURING THE FINANCIAL YEAR 2008-09. THE SOURCES FOR THIS INVESTMENT WERE EXPLAINED AS LOAN OF RS.15 LAKHS FROM ADARSHA BANK. HOWEVER, OBSERVING THAT THE SAID LOAN WAS OBTAINED ON 24.11.2011, THE ASSESSING OFFICER QUEST IONED THE SOURCES FOR INVESTMENT MADE DURING CURRENT YEAR. FO R THIS, IT WAS BROUGHT OUT BY THE ASSESSEE THAT THE SAME WAS MET O UT OF RECEIPTS FROM HER BROTHER SRI V K NAIDU (RS.10 LAKHS), HER S ON SRI V S PRADEEP 7 ITA NO. 851/H/15 V. NAGAMANI (RS.13.40 LAKHS) AND THE BALANCE FROM HER SPOUSE SR I V V RAO. REFERRING TO THE CHANGE OF STANCES IN THE VERSION O F THE ASSESSEE AND BRINGING OUT THE MISMATCH OF DATES AND LOANS OBTAIN ED, THE ASSESSING OFFICER TREATED THE ENTIRE INVESTMENT OF RS. 19 LAK HS IN CONSTRUCTION OF HOUSE PROPERTY AS UNEXPLAINED. 11. BEFORE THE CIT(A), IN SUPPORT OF HER CLAIM, TH E ASSESSEE REFERRED TO THE CASH FLOW STATEMENT AND CLAIMS THAT THE TOTAL SOURCES WERE OUT OF LOANS FROM HER SON AND RECEIPTS FROM HE R BROTHER. WHEN REMANDED THE SAME TO AO, IN THE REMAND REPORT, THE ASSESSING OFFICER BROUGHT OUT THAT THE ASSESSEE IS CHANGING H ER VERSION WHENEVER A LAPSE WAS POINTED IN THE EARLIER VERSION AND THAT THE CASH FLOW STATEMENT FILED AFTER CONCLUSION OF THE ASSESS MENT PROCEEDINGS IS AN AFTERTHOUGHT TO FILL IN THE GAPS POINTED OUT IN THE ASSESSMENT AND THAT SUCH CASH FLOW STATEMENT WITHOUT ANY SUPPORTIN G EVIDENCES CANNOT BE CONSIDERED. 11.1 AGAINST THE ABOVE COMMENTS OF THE ASSESSING OF FICER, THE ASSESSEE SUBMITTED THAT THE AMOUNT OF RS.19 LAKHS W AS MET OUT OF LOANS OBTAINED BY HER SON SRI V S PRADEEP FROM M/S RELIANCE CAPITAL ON 12.11.2008, WHICH WAS WITHDRAWN FROM AXIS BANK O N 17.11.2008. 11.2 THE CIT(A) HELD THAT FROM THE MATERIAL FURNIS HED BY THE ASSESSEE, SRI V S PRADEEP OBTAINED A LOAN OF RS.13. 70 LAKHS AND HAS WITHDRAWN RS.13.54 LAKHS ON 17.11.2008. THERE IS NO IOTA OF EVIDENCE THAT THE SAID AMOUNT WAS GIVEN TO HIS MOTHER AND TH E SAME WAS INVESTED IN CONSTRUCTION. APART FROM THIS FIGURE OF RS.13.54 LAKHS, THERE IS NO MENTION ABOUT THE SOURCES OF THE BALANC E AMOUNT INVESTED IN CONSTRUCTION. THERE IS NO WHISPER OF AMOUNT RECE IVED FROM HER BROTHER SRI V K NAIDU. THE CIT(A), THEREFORE, CONCL UDED THAT IN THE ABSENCE OF ANY COGENT MATERIAL EVIDENCES THAT THE L OAN AMOUNT WITHDRAWN BY HER SON WAS UTILIZED FOR CONSTRUCTION OF HOUSE PROPERTY AND NO SOURCES FOR THE BALANCE AMOUNT, CONFIRMED TH E ACTION OF THE AO. 8 ITA NO. 851/H/15 V. NAGAMANI 12. BEFORE US, THE LD. AR SUBMITTED THAT EXPLANATIO N OF THE ASSESSEE HAS NOT BEEN ACCEPTED MAINLY DUE TO THE FA CT THAT IN THE LETTER DATED 10.10.2011(PAGE 16 OF THE PAPER BOOK), A LOAN DRAWN MUCH LATER THAN THE PREVIOUS YEAR HAS BEEN STATED AS THE SOURCE. THIS WAS CLARIFIED IN THE REMARKS ON THE REMAND REP ORT (LAST TWO PARAS OF PAGE 2 OF THE PAPER 'BOOK). ONE MAIN SOURC E IS STATED TO BE THE MONEY PROVIDED BY SON MR. V. SRINIVAS PRADEEP O F RS. 13,40,000/- WHICH WAS WITHDRAWN FROM HIS AXIS BANK ACCOUNT (PAG E 32 OF PAPER BOOK). SOURCE OF THIS MONEY IS LOAN OBTAINED FROM R ELIANCE CAPITAL AND TRANSFERRED BY CHEQUE TO AXIS BANK ACCOUNT FROM WHERE WITHDRAWAL HAS BEEN MADE. APART FROM RS. 13,40,000 /- ASSESSEE HAS SHOWN SEVERAL WITHDRAWALS FROM BANK ACCOUNTS TO EXP LAIN THE SOURCE OF CONSTRUCTION COST OF RS. 19,00,000/-. THEY ARE C ASH DRAWN FROM CENTRAL BANK OF INDIA BANK ACCOUNT OF RS. 3,00,000/ - ON 26.04.2008 AND OF RS. 5,00,000/- ON 04.02.2009 'P 12 & 13 OF P .B) THESE AMOUNTS HAVE BEEN SHOWN DURING ASSESSMENT PROCEEDI NGS (PAGE 8 OF PAPER BOOK) TO PROVE THE SOURCE FOR CONSTRUCTION . 12.1 THE LD. AR SUBMITTED THAT IN THE COURSE OF APP EAL PROCEEDINGS, ASSESSEE HAS PREPARED A CASH FLOW STATEMENT TO PROV E THE AVAILABILITY. HE SUBMITTED THAT ASSESSEE HAS ALSO I NCOMES FROM RENTS, AGRICULTURAL INCOMES WHICH ARE SHOWN IN CASH FLOW S TATEMENT. ACCORDING TO CASH FLOW STATEMENT, RS. 13,40,000/- A ND OTHER INCOME SOURCES HAVE BEEN INCLUDED. SOURCE OF RS. 19,00,000 /- AS WELL AS HOUSE HOLD EXPENSES ETC HAVE ALSO BEEN EXPLAINED. N O FLAW WAS FOUND IN THE CASH FLOW STATEMENT. HE SUBMITTED THAT IT IS REJECTED ONLY ON THE GROUND THAT IT WAS NOT FILED AT THE TIME OF ORIGINAL PROCEEDINGS. BUT, IN PARTICULAR, SOURCE OF RS. 13,40,000/- HAVE BEEN SHOWN IN THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF AS WELL AS AGRICULTURAL INCOME RECEIPTS AND OTHER CASH WITHDRAWALS FROM CEN TRAL BANK OF INDIA (PAGE 8 OF THE PAPER BOOK). HE CONTENDED THAT THE ASSESSEES EXPLANATION HAS BEEN REJECTED ONLY ON THE GROUND TH AT THE SAME WAS NOT GIVEN AT THE TIME OF FILING THE ORIGINAL LETTER DATED 10.10.2011. 9 ITA NO. 851/H/15 V. NAGAMANI 12.2. THE LD. AR SUBMITTED THAT THE ASSESSEE BAS SH OWN AVAILABILITY OF THE BULK FUNDS OF RS. 50,00,000/- (ALL LOANS FRO M ADARSH BANK BY THE MEMBER OF THE FAMILY) AND RS. 13,40,000/- (LOAN FROM RELIANCE CAPITAL RAISED BY THE SON) TO EXPLAIN RS. 69,00,000 /- OF INVESTMENT. AS THE ASSESSEE HAS OTHER INCOMES ALSO AND AS THE A .O HAS DOUBTED THE EXPLANATIONS ONLY ON THE GROUND OF NOT STATING IT ALL IN THE VERY FIRST INSTANCE, A CASH FLOW STATEMENT HAS BEEN PRE PARED & FILED BEFORE THE LEARNED CIT(A) WHICH HE SENT TO A.O FOR REMAND REPORT. BUT IT HAS BEEN REJECTED BY A.O DURING REMAND PROCE EDINGS ON SUSPICION THAT IT WAS A CONTRIVED STATEMENT. BUT, N OT A SINGLE MISTAKE OR INCORRECTNESS HAS BEEN NOTICED OR COMMENTED UPON . IT HAS BEEN UNREASONABLY REJECTED. 13. THE LD. DR, ON THE OTHER HAND RELIED ON THE ORD ERS OF REVENUE AUTHORITIES. 14. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL FACTS ON RECORD. THE ASSESSEE HAS SHOWN THAT THE AMOUNT O F RS. 13.4 LAKHS WAS RECEIVED FROM HER SON, WHICH WAS TAKEN AS LOAN BY HER SON FROM RELIANCE CAPITAL. THE ASSESSING OFFICER IN HIS REMA ND REPORT REJECTED THIS SOURCE BASED ON THE FACT THAT HER SON HAS NOT INDICATED THAT THIS AMOUNT WAS GIVEN TO HER. THE ASSESSEE AND HER FAMIL Y HAS NOT INVESTED THE AMOUNT TAKEN ON LOAN OR AT LEAST IT WA S NOT BROUGHT ON RECORD BY THE ASSESSING OFFICER THAT THEY UTILIZED THE AMOUNT TAKEN ON LOAN FOR MAKING ANY OTHER INVESTMENT OTHER THAN THE INVESTMENT OF CONSTRUCTION OF HOUSE, WE CANNOT DENY THE BENEFIT O F ACCEPTING THEIR CONTENTION. THE FAMILY HAS NO OTHER SOURCE TO MAKE THE INVESTMENT. HENCE, WE ACCEPT THE SUBMISSION OF THE ASSESSEE AND ACCORDINGLY GROUND RAISED BY THE ASSESSEE IS ALLOWED. 15. GROUND NO. 4 IS PERTAINING TO THE ADDITION TOWA RDS UNEXPLAINED CREDITS OF RS.3,13,710/-. THE AO MADE THE SAID ADDI TION ON THE GROUND THAT THE EXPLANATION OF THE ASSESSEE WITH RE GARD TO THE SOURCE 10 ITA NO. 851/H/15 V. NAGAMANI OF CASH DEPOSITS WAS NOT ACCEPTABLE, HENCE, THE SAM E TREATED AS UNEXPLAINED CREDITS. 16. DURING APPEAL PROCEEDINGS, IT WAS CONTENDED BY THE ASSESSEE THAT SHE HAS BEEN EARNING AGRICULTURAL INCOME AND O THER SOURCES AND THAT THE CREDITS WERE OUT OF HER PAST SAVINGS. IN T HE REMAND REPORT, IT WAS OPINED BY THE ASSESSING OFFICER THAT THE PAST E ARNINGS ARE SUFFICIENT FOR THE LIVELIHOOD OF THE ASSESSEE AND T HE PAST SAVINGS CANNOT BE A SOURCE FOR THE PRESENT CREDITS APPEARIN G IN THE BANK ACCOUNT. 17. AGAINST THESE COMMENTS OF THE ASSESSING OFFICE R, IT WAS BROUGHT OUT BY THE ASSESSEE THAT THE EARNINGS OF HE R HUSBAND AND SON ARE SUFFICIENT FOR HER LIVELIHOOD AND HER PAST EARN INGS ARE THE SOURCE FOR THE CREDITS APPEARING IN THE BANK ACCOUNT. 18. THE CIT(A) OBSERVED THAT THE SUBMISSIONS OF THE ASSESSEE WERE GENERAL IN NATURE AND NO SPECIFIC EVIDENCES WERE FU RNISHED EXPLAINING THE SOURCES OF CREDITS APPEARING IN HER BANK ACCOUN T. HE THEREFORE CONFIRMED THE ADDITION MADE BY THE AO. 19. BEFORE US, THE LD. AR SUBMITTED THAT THESE AMOU NTS ARE THREE CASH DEPOSITS IN THE ASSESSEE'S ACCOUNT OF CENTRAL BANK OF INDIA (PAGE 12 OF THE PAPER BOOK). ASSESSEE GAVE THE EXPL ANATION FOR THE SOURCE OF CASH DEPOSITS AT P 8 OF THE PAPER BOOK. T HE SOURCES ARE RECEIPTS FROM V.L PRASANNA'S (EMPLOYED UNMARRIED DA UGHTER) ICICI BANK A/ C, CASH WITHDRAWALS FROM HUSBAND (HUSBAND W AS AN ASSISTANT REGISTRAR OF COOP SOCIETIES AT THE TIME) ACCOUNT AP ART FROM RENTAL INCOME FOR TWO PRECEDING MONTHS. ASSESSEE HAD ALSO AGRICULTURAL INCOME RECEIPTS OF RS. 2,90,800/- DURING THE YEAR. AO HAS NOT CONSIDERED THE EXPLANATION AT ALL. 19.1 LD. AR SUBMITTED THAT DURING APPEAL PROCEEDING S, ASSESSEE SUBMITTED CASH FLOW STATEMENT TO SHOW THE AVAILABIL ITY OF FUNDS. AO REMARKED IN HIS REMAND REPORT THAT THE AGRICULTURAL INCOME WOULD HAVE 11 ITA NO. 851/H/15 V. NAGAMANI BEEN SUFFICIENT FOR FAMILY NEEDS (PAGE 7 OF THE PB) . IN REPLY, ASSESSEE SUBMITTED THAT FOR THE FAMILY NEEDS, THERE ARE SOURCES OF SALARIES OF RS. 3,00,000/- PER ANNUM OF HUSBAND AND OF RS. 7,00,000/- OF UNMARRIED SON (PAGE 2 OF PB). ASSESSEE FURTHER S UBMITTED THAT SHE FILED COPIES OF THEIR RETURNS BEFORE THE AO IN SUPP ORT OF THE INCOMES. HOWEVER, LEARNED CIT(A) HELD THAT PROOF WAS NOT FIL ED. CIT(A) OMITTED TO TAKE NOTE OF THE FACT OF FILING OF COPIES OF RET URNS AND SIMPLY BRUSHED ASIDE THE EXPLANATION OF THE ASSESSEE HOLDI NG THAT THE STATEMENT OF INCOMES IS TOO GENERAL IN NATURE. BOTH LEARNED AO & CIT(A) DID NOT TAKE COGNIZANCE OF THE CASH FLOW STA TEMENT IN WHICH REGULAR RENTAL INCOME OF THE ASSESSEE AGRICULTURAL INCOMES AND HOUSEHOLD EXPENSES WERE ALL INCLUDED. THE ADDITION OF RS. 3,13,710/- AND ITS BEING UPHELD BY THE LEARNED CIT(A) IS NOT J USTIFIED. IT IS SUBMITTED THAT THE SAME MAY ALSO BE DELETED. 20. LD. DR, ON THE OTHER HAND, RELIED ON THE ORDERS OF REVENUE AUTHORITIES. 21. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL FACTS ON RECORD. FROM THE RECORD, THE ASSESSING OFFICER H AS NOT BROUGHT ON RECORD ANY OTHER MATERIAL TO SHOW THAT THE ASSESSEE HAS OTHER SOURCE OF INCOME. THE ASSESSEE IS EARNING ONLY RENTAL INC OME. ASSESSEE HAS CLAIMED THAT SHE HAS INCOME FROM AGRICULTURE AL SO, WE ARE NOT SURE WHETHER THE SAME WAS DECLARED IN RETURN OF INC OME, IT WAS NOT PLACED ON RECORD. EVEN OTHERWISE, AS CLAIMED, THE A SSESSEE IS NOT DEPENDED ON THE INCOME TO RUN THE FAMILY. SHE IS EA RNING RENTAL INCOME OF RS. 26,000/- PER MONTH. THIS ITSELF IS EN OUGH TO MAKE THE ABOVE DEPOSITS IN THE BANK. IN THE ABSENCE OF ANY C OGENT MATERIAL FOUND BY THE REVENUE, WE GIVE BENEFIT OF DOUBT IN F AVOUR OF THE ASSESSEE AND ACCORDINGLY, WE DELETE THE ADDITION. 12 ITA NO. 851/H/15 V. NAGAMANI 22. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. PRONOUNCED IN THE OPEN COURT ON 16 TH NOVEMBER, 2016. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 16 TH NOVEMBER, 2016 KV COPY TO:- 1) V. NAGAMAI, 8-3-224/9/10/D, PLOT NO. H-73, MADHU RANAGAR, HYDERABAD - 500 038 2) ITO, WARD 6(5), 6 TH FLOOR, C BLOCK, IT TOWERS, AC GUARDS, HYD. 3) CIT(A) - VI, HYDERABAD 4 CIT - VI, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE