Narayan Reddy Peddakotla, Hyderabad, Hyderabad V. ITO, Ward-12(4), Hyderabad, Hyderabad

ITA 878/HYD/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2587 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 22-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained cash credit; Peak credit; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 878/HYD/2017 ASSESSMENT YEAR: 2005-06 SRI PEDDAKOTLA NARAYAN REDDY, HYDERABAD [PAN: AFWPP9367A] VS INCOME TAX OFFICER, WARD-12(4), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V. RAGHU RAM, AR FOR REVENUE : SMT. SUMAN MALIK, DR DATE OF HEARING : 30-01-2018 DATE OF PRONOUNCEMENT : 09-02-2018 O R D E R THE ISSUE IN THIS APPEAL BY ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, HYDERABA D, DATED 28-02-2017 FOR THE AY. 2005-06, IS WITH REFERENCE TO THE ADDITION OF RS. 11,46,569/- BEING THE UNEXPLAINED CAS H CREDITS. 2. IN THE SCRUTINY ASSESSMENT, ASSESSING OFFICER (AO) ASKED TO EXPLAIN THE DEPOSITS IN THE BANK A/C, AS ASSESSEE IS A SALARIED EMPLOYEE. ASSESSEE EXPLAINED THAT HE HAD CA RRIED OUT MANUFACTURING OF BRICKS WITH OTHER PARTNERS AND SOME OF THE SALES MADE AT HYDERABAD WERE DEPOSITED IN HIS UTI BAN K A/C. HE ALSO EXPLAINED THAT VARIOUS WITHDRAWALS ARE FOR THE SAME BUSINESS. HOWEVER, ASSESSEE COULD NOT PRODUCE ANY EVIDENCE IN THAT REGARD AND AO TREATED THE AMOUNTS OF DEPOSITS AS UNEXPLAINED CASH CREDITS. I.T.A. NO. 878/HYD/2017 :- 2 -: 3. BEFORE THE LD.CIT(A), ASSESSEE FURNISHED CERTAIN ADDITIONAL EVIDENCES WHICH WERE SENT ON REMAND. THER E WERE ALLEGATIONS BY ASSESSEE THAT AO HAD NOT GIVEN OPPORTUNIT Y AND PERSONS PRODUCED WERE NOT EXAMINED ETC., BUT AT THE END, LD.CIT(A) CONFIRMED THE ACTION OF AO. 4. ASSESSEE RAISED THE FOLLOWING GROUND BEFORE US: 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDI TION OF RS. 11,46,569/- MERELY ON THE BASIS OF SECOND REMAND RE PORT WHICH IS NOTHING BUT REPRODUCTION OF ORDER SHEET ENTRIES WHI CH IS ALLEGED BY THE ASSESSEE THROUGH AFFIDAVITS BOTH OF HIMSELF AND OTH ERS TO BE FALSE WITHOUT MAKING ANY EFFORT TO CROSS CHECK THE SAME W ITH VISITORS BOOK. GROUND NOS. 1 & 3 ARE GENERAL IN NATURE. 5. REFERRING TO THE SEQUENCE OF EVENTS AND EVIDENCE FURNISHED, IT WAS THE SUBMISSION OF LD. COUNSEL THAT T HE DEPOSITS IN THE BANK ACCOUNT PERTAIN TO THE BUSINESS UNDERTAKEN. HOWEVER, AS THE AO DID NOT ENQUIRE, LD. COUNSEL SUBMITTED THAT ASSESSEE IS PREPARED TO ACCEPT, PROVIDED PEAK CREDIT IS WORKED OUT AND ONLY THAT AMOUNT IS ADDED. IT WAS SUBMITTED THAT THERE ARE WITHDRAWALS WHICH WERE CONFIRMED ON ENQUIRY AND IF CREDIT WAS GIVEN TO THAT ASSESSEE IS PRE PARED TO SUFFER TAX ON PEAK CREDITS TO AVOID FURTHER PROCEEDINGS AND SETTLE THE MATTER. 6. AFTER CONSIDERING THE RIVAL CONTENTIONS AND PERUSIN G THE DETAILS ON RECORD, I AM OF THE OPINION THAT ASSESSEE TR IED TO EXPLAIN THE CREDITS AS THAT OF BUSINESS. HOWEVER, THE S AME WERE NOT ACCEPTED BY THE AUTHORITIES. IN VIEW OF THAT, AS THE RE ARE I.T.A. NO. 878/HYD/2017 :- 3 -: WITHDRAWALS (STATED TO BE BUSINESS WITHDRAWALS), THE SAM E CAN BE TREATED AS SOURCE FOR FURTHER DEPOSITS IN THE ABSENC E OF ANY BUSINESS CONNECTION. THEREFORE, ONLY PEAK CREDIT CAN BE BROUGHT TO TAX. AO IS DIRECTED TO WORK OUT THE PEAK CREDIT IN THE SAID BANK ACCOUNT, AFTER GIVING DUE OPPORTUNITY TO ASSESSEE AND RESTRICT THE ADDITION TO THAT AMOUNT. DIRECTED ACCORDI NGLY. 7. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH FEBRUARY, 2018 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 9 TH FEBRUARY, 2018 TNMM I.T.A. NO. 878/HYD/2017 :- 4 -: COPY TO : 1. SRI PEDDAKOTLA NARAYAN REDDY, C/O. K. VASANT KUM AR, A.V. RAGHU RAM, P. VINOD & M. NEELIMA DEVI, ADVOCAT ES, 610, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2. INCOME TAX OFFICER, WARD-12(4), HYDERABAD. 3. CIT (APPEALS)-5, HYDERABAD. 4. PR.CIT-1, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.