TunnurChanna Reddy (HUF), Yadgir V. CIT, Gulbarga

ITA 874/BANG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7648 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 31-05-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 28-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI JT BENGALURU
• Assessee Lawyers: V K GURUNATHAN
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.874/BANG/2016 ASSESSMENT YEAR : 2011-12 M/S. TUNNUR CHANNA REDDY (HUF), C/O. SRI TUNNUR PAMPANNA GOWDA, NO.133, BASAVESHWAR GUNJ, YADGIR 585 201. PAN: AAQHS 4992B VS. THE INCOME TAX OFFICER, WARD 2, GULBARGA. APPELLANT RESPONDENT APPELLANT BY : SHRI V.K. GURUNATHAN, ADVOCATE RESPONDENT BY : SMT. PADMA MEENAKSHI, JT.CIT(DR)(ITAT), BENGALURU DATE OF HEARING : 29.08.2017 DATE OF PRONOUNCEMENT : 31.08.2017 O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(APPEALS) INTER ALIA ON VARIOUS GROUNDS. 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL F OR THE ASSESSEE SUBMITTED THAT THOUGH VARIOUS GROUNDS ARE RAISED BY THE ASSESSEE, BUT EXCEPT GROUND NOS.5, 6, 13 & 14, THE OTHER GROUNDS ARE NOT PRESSED. ACCORDINGLY, THE GROUNDS TAKEN UP FOR ADJUDICATION ARE AS UNDER:- 5. THE LEARNED ASSESSING AUTHORITY ERRED IN ADDING A SUM OF RS.843000/- TO THE INCOME RETURNED AS UNEXPLAINED C ASH CREDIT LIABLE TO TAX U/S. 68 OF THE INCOME TAX ACT, 1961. ITA NO.874/BANG/2016 PAGE 2 OF 4 6. THE LEARNED FIRST APPELLATE AUTHORITY ERRED IN C ONFIRMING THE ADDITION OF A SUM OF RS.843000/- TO THE INCOME RETURNED MADE BY THE AO AS UNEXPLAINED CASH CREDIT LIABLE TO TAX U/S. 68 OF THE INCOME TAX, 1961. 13. THE LEARNED ASSESSING AUTHORITY ERRED IN NOT A CCEPTING THE PLEA OF THE PETITIONER THAT THE DIFFERENCE BETWEEN CASH DEPOSITS AND CASH WITHDRAW AMOUNTING TO RS.843000 WAS OUT OF OPENING CAPITAL CREDIT. 14. THE LEARNED FIRST APPELLATE AUTHORITY ERRED IN NOT ACCEPTING THE PLEA OF THE PETITIONER THAT THE DIFFERENCE BETW EEN CASH DEPOSITS AND CASH WITHDRAWS AMOUNTING TO RS.843000/ - WAS OUT OF OPENING CAPITAL CREDIT. 3. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE HAS SUBMITTED THAT THE AO HAS NOTED THE DEPOSIT AND WIT HDRAWAL ENTRIES IN THE BANK ACCOUNT AND MADE ADDITION OF THE DIFFERENCE OF RS.8,43,000 AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE INCOME-TAX A CT, 1961 [THE ACT]. 4. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS), BUT DI D NOT FIND FAVOUR WITH HIM. HE FURTHER CONTENDED THAT BEFORE THE AO, ASS ESSEE HAS FURNISHED THE EVIDENCE WITH REGARD TO DEPOSITS IN THE BANK ON DIF FERENT DATES BY WAY OF CONFIRMATION LETTERS FROM THE AGRICULTURISTS FROM W HOM IT HAS RECEIVED BACK THE LOAN ADVANCED TO THEM IN EARLIER YEARS. THE AO , WITHOUT LOOKING TO THE CONFIRMATION LETTERS, MADE ADDITION OF THE DIFFEREN CE BETWEEN THE DEPOSITS AND WITHDRAWALS AS UNEXPLAINED CASH CREDIT. THEREF ORE, THE ADDITION MADE BY THE AO IS NOT SUSTAINABLE, MOREOVER, IN THE LIGH T OF THE FACT THAT ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT. ITA NO.874/BANG/2016 PAGE 3 OF 4 5. THE LD. DR PLACED RELIANCE UPON THE ORDER OF CIT (APPEALS). 6. HAVING CAREFULLY EXAMINED THE ORDERS OF LOWER AU THORITIES IN THE LIGHT OF RIVAL SUBMISSIONS, I FIND THAT BEFORE THE AO THE ASSESSEE HAS EXPLAINED CERTAIN DEPOSITS ON WHICH QUESTIONS WERE RAISED BY THE AO BY FILING THE CONFIRMATION LETTERS OF VARIOUS AGRICULTURISTS WITH THE SUBMISSION THAT THE ASSESSEE HAS ADVANCED THE LOANS TO THESE AGRICULTUR ISTS IN THE EARLIER YEARS. WHEN THE ASSESSEE HAS CERTAIN EXPLANATION W ITH REGARD TO SOURCE OF DEPOSITS ALONG WITH THE EVIDENCE, THE AO SHOULD HAV E EXAMINED THE SAME. BUT HE DID NOT DO THE SAME. MOREOVER, THE CIT(APPE ALS) OUGHT TO HAVE EXAMINED IT, BUT HE ALSO DID NOT DO IT. IN THESE C IRCUMSTANCES, I AM OF THE VIEW THAT THE ISSUE REQUIRES FRESH ADJUDICATION FRO M THE AO. ACCORDINGLY, I SET ASIDE THE ORDER OF THE CIT(APPEALS) AND RESTORE THE MATTER TO THE FILE OF THE AO, WITH A DIRECTION TO READJUDICATE THE ISSUE AFRESH, AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF AUGUST, 2017. SD/- (SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE, DATED, THE 31 ST AUGUST, 2017. / D ESAI S MURTHY / ITA NO.874/BANG/2016 PAGE 4 OF 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.