Jayaprakash Varma Mantena, Hyderabad, Hyderabad V. ITO, Ward-12(3), Hyderabad, Hyderabad

ITA 890/HYD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6260 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 30-09-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 23-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANJALA SAHU
• Assessee Lawyers: A V RAGHURAM
• Keywords: Gift; Salary income
• Section: 143(3); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A - SMC, HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.890/HYD/2017 ASSESSMENT YEAR: 2007 - 08 MANTENA JAYA PRAKASH VARMA, H.NO. 27, LAKSHMI NARAYAN A ESTATE, 7 - A, NEAR HUDA MAYURI NAGAR, MIYAPUR, HYDERABAD - 500049. PAN: AKNPM 1221 G VS. INCOME TAX OFFICER, WARD - 12(3), AAYAKAR BHAVAN, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI A.V. RAGHURAM REVENUE BY: SMT. ANJALA SAHU, DR DATE OF HEARING: 30/09/2019 DATE OF PRONOUNCEMENT: 10 /10/2019 ORDER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) - 1, HYDERABAD DATED 10/01/2017 IN APPEAL NO.0032/CIT(A) - 1/HYD/2010 - 11/2016 - 17 PASSED U/S. 143(3) R.W.S 250(6) OF THE ACT FOR THE ASSESSMENT YEAR 2007 - 08. 2. THE ASSESSEE HAS RAISED 5 GROUNDS IN THIS APPEAL HOWEVER, THE CRUX OF THE ISSUE IS THAT T HE LD. CIT (A) HAS ERRED IN CONFIRMING THE ORDER 2 OF THE LD. AO WHO HAD MADE ADDITION OF RS. 1 5 LAKHS TOWARDS UNDISCLOSED SOURCE OF INCOME. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL EMPLOYED IN TCS, HYDERABAD AS A SOFTWARE ENGINEER EARNING SALARY INCOME , FILED HIS RETURN OF INCOME ON 26/7/2007 DECLARING INCOME OF R S. 4,88,215 / - . INITIALLY THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT AND SUBSEQUENTLY THE CASE WAS TAKEN UP FOR SCRUTINY UNDER CASS . THEREAFTER, THE ASSESSMENT WAS COMPLETED U/S. 143 (3) OF THE ACT WHEREIN TH E LD. AO MADE ADDITION OF RS. 10 LAKHS AND RS. 5 LAKHS AS THE UNDISCLOSED SOURCE OF INCOME. 4. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE LD. AO THAT THE ASSESSEE HAD DEPOSITED CASH IN HIS BANK ACCOUNT AMOUNTING TO RS. 10 LAKHS ON 29/07/2006 . O N QUERY IT WAS EXPLAINED BY THE ASSESSEE THAT AMOUNT OF RS. 10,37,282 / - WAS RECEIVED BY HIM ON THE OCCASION OF HIS MARRIAGE FROM CLOSE RELATIVES, FRIENDS AND OTHERS. THE ASSESSEE HAS FURTHER CLARIFIED THAT HE BELONGS TO A RESPECTABLE FAMILY WHICH OWNS AGRICULTURAL LAND. THE LD. AO ON FURTHER EXAMINING THE ISSUE OBSERVED THAT THE ASSESSEE HAD ISSUED A CHEQUE IN THE NAME OF M/S. SAI RAM IMPORTS AND EXPORTS FOR RS. 9,95,000/ - ON THE VERY SAME DAY HE DEPOSITED CASH IN HIS BACK ACCOUNT. THEREFORE, THE LD. AO OPINED THAT THE ASSESSEE HAD INTRODUCED HIS UNDISCLOSED INCOME IN HIS BANK ACCOUNT AND REJECTED THE EXPLANATION 3 OFFERED BY THE ASSESSEE THAT THE AMOUNT DEPOSITED IN THE BANK ACCOUNT WAS THE GIFT RECEIVED BY HIM ON THE OCCASION OF HIS MARRIAGE. IT WAS FURTHER OBSERVED BY THE LD. AO THAT THE ASSESSEE HAS DEPOSITED ANOTHER AMOUNT OF RS. 5 LAKHS IN HIS BANK ACCOUNT ON 27/7/2006. SINCE NO EXPLANATION WAS OFFERED , THE LD. AO ADDED THE SAME ALSO AS HIS UNDISCLOSED SOURCE OF INCOME. 5. ON APPEAL, THE LD. CIT (A) AGREED WITH T HE VIEW OF THE LD. AO AND CONFIRMED THE ADDITION , AGGRIEVED BY WHICH THE ASSESSEE IS NOW O N APPEAL BEFORE THE TRIBUNAL. 6. THE LD. AR VEHEMENTLY ARGUED BEFORE ME STATING THAT THE ASSESSEE IS A SOFTWARE ENGINEER EMPLOYED IN TCS DRAWING SALARY OF APPROXIMATE LY RS. 5 LAKHS PER ANNUM. HE FURTHER SUBMITTED THAT THE ASSESSEE BELONGS TO A WELL REPUTED FAMILY AND IT IS A COMMON PRACTICE IN HIS COMMUNITY FOR BEING BESTOWED WITH GIFTS AT THE TIME OF MARRIAGE. HE FURTHER ARGUED STATING THAT THE ENTIRE GIFT WAS DEPO SITED IN HIS BANK ACCOUNT AND UTILISED. IT WAS FURTHER EXPLAINED THAT PREDOMINANTLY THE GIFTS WERE RECEIVED FROM HIS CLOSE RELATIVES AND FRIENDS AT THE TIME OF HIS MARRIAGE AND HENCE EXEMPT FROM TAX AS PER THE PROVISION OF SECTION 56(1)(V) OF THE ACT. HENCE , IT WAS PLEADED THAT THE ADDITION MADE BY THE LD. AO WHICH WAS FURTHER CONFIRMED BY THE LD. CIT (A) MAY BE DELETED. THE LD. DR O N THE OTHER HAND VEHEMENTLY ARGUED IN SUPPORT OF THE ORDERS OF THE LD. REVENUE AUTHORITIES AND PLEADED FOR CONFIRMING THE SAME. 4 7. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. FROM THE FACTS OF THE CASE IT IS APPARENT THAT THE ASSESSEE HAILS FROM A WELL REPUTED FAMILY OWNING AGRICULTURAL LAND WHICH IS NOT IN DISPUTE. THE ASSESSEE IS ALSO WELL EDUCATED AND EMPLOYED IN SOFTWARE COMPANY VIZ., TCS DRAWING A HEFTY SALARY. IT IS ALSO A COMMON PRACTICE IN HIS COMMUNITY TO BE BESTOWED WITH GIFTS IN CASH AT THE TIME OF MARRIAGE WHICH CANNOT BE DISPUTED . IN THIS SITUATION, THE EXPLANATION OFFERED BY THE ASSESSEE THAT THE AMOUNT OF RS. 15 LAKHS OF GIFT RECEIVED BY HIM ON THE OCCASION OF HIS MARRIAGE CANNOT BE SIMPLY REJECTED. FR OM THE ORDER OF THE LD. AO AND THE LD. CIT (A) ALSO IT APPEARS THAT THEY HAVE NOT MADE FURTHER ENQUIRIES FROM THE ASSESSEE IN ORDER TO FURNISH THE NAMES AND ADDRESSES OF THE PERSONS WHO HAD EXTENDED GIFTS TO THE ASSESSEE. FROM THE FACTS OF THE CASE IT IS ALSO APPARENT THAT A SUSPICION IS CREATED IN THE MINDS OF THE LD. REVENUE AUTHORITIES BECAUSE THE ASSESSEE HAD ISSUED CHEQUE IN THE NAME OF M/S. SAI RAM IMPORTS AND EXPORTS FOR A SUM OF RS. 9,95,000 / - ON THE VERY SAME DAY THE CASH WAS DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. IN SUCH CIRCUMSTANCES, IT IS ALSO VERY MUCH POSSIBLE THAT THE MONEY DEPOSITED BY THE ASSESSEE IN HIS BANK ACCOUNT MIGHT HAVE BEEN THE UNDISCLOSED INCOME OF M/S. SAI RAM IMPORTS AND EXPORTS WHICH IS NOW REVERTED BACK AS ACCOUNTED MONEY. THE LD. REVENUE AUTHORITIES HAVE FAILED TO EXAMINE THESE ASPECTS OF THE CASE ALSO. THEREFORE, THERE IS EVERY POSSIBILITY THAT THE INNOCENT ASSESSEE IS BROUGHT TO TAX WHILE AS AN 5 ESTABLISHED BUSINESS HOUSE ESCAPES FROM BEING TAXED ON ITS UNACCOUNTE D INCOME. CONSIDERING THESE FACTS AND CIRCUMSTANCES OF THE CASE I AM OF THE CONSIDERED VIEW THAT THE ADDITION MADE BY THE LD. AO FOR RS. 15 LAKHS IN THE HANDS OF THE ASSESSEE AS HIS UNDISCLOSED INCOME WHICH IS FURTHER CONFIRMED BY THE LD. CIT (A) IS NOT A PPROPRIATE. THEREFORE, I HEREBY DIRECT THE LD. AO TO DELETE THE ADDITION OF RS. 15 LAKHS MADE IN THE HANDS OF THE ASSESSEE AS HIS UNDISCLOSED SOURCE OF INCOME. IT IS ORDERED ACCORDINGLY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER, 2019. SD/ - ( A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER HYDERABAD, DATED: 10 TH OCTOBER , 2019 OKK COPY TO: - 1) MANTENA JAYA PRAKASH C/O. P.R. DATLA & CO., CHARTERED ACCOUNTANTS, 6 - 3 - 788/A/9, FIRST FLOOR, DURGA NAGAR, AMEERPET, HYDERABAD. 2) THE INCOME TAX OFFICER, WARD - 12(3), AAYAKAR BHAVAN, HYDERABAD. 3) THE CIT(A) - 1, HYDERABAD 4) THE PR. CIT - 1, HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE