Venkat Reddy Jajapuram, Hyd, Hyderabad V. ITO, Ward-9(3) (now Ward 9(4), Hyd, Hyderabad

ITA 941/HYD/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9609 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 28-11-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 31-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: A V RAGHURAM
• Keywords: Additional evidence
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES SMC, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER I.T.A. NO. 941/HYD/2017 ASSESSMENT YEAR: 2007-08 SRI JAJAPURAM VENKAT REDDY, HYDERABAD [PAN: AFQPJ0148D] VS INCOME TAX OFFICER, WARD-9(3) [NOW WARD-9(4)], HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V.RAGHU RAM, AR FOR REVENUE : SHRI NILANJAN DEY, DR DATE OF HEARING : 28-11-2019 DATE OF PRONOUNCEMENT : 08-01-2020 O R D E R THIS APPEAL FILED BY THE ASSESSEE FOR THE AY.2007-08, IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCO ME TAX (APPEALS)11, HYDERABAD, DATED 28-02-2017. 2. BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE IS AN INDIVIDUAL, EARNING INCOME FROM LABOUR CONTRACT WORKS . HE ALSO HAS INCOME FROM HOUSE PROPERTY. ONE SMT. R.RAJ ANI HAD GIVEN A COMPLAINT AGAINST THE ASSESSEE TO THE POLICE A BOUT DOWRY HARASSMENT AND ACCORDINGLY, FIRST INFORMATION R EPORT (FIR) WAS REGISTERED BY THE SUB-INSPECTOR OF POLICE, NEREDUCHERALA POLICE STATION, WHEREIN IT WAS ALLEGED T HAT THE ASSESSEE RECEIVED AS DOWRY AN AMOUNT OF RS.38 LAKHS IN THE FINANCIAL YEAR 2006-07. THIS COMPLAINT WAS FORWARDE D TO THE ASSESSING OFFICER (AO). AS THE AMOUNT INVOLVED EXCEED ED RS.25,000/-, AO OBSERVED THAT THE SAME IS LIABLE TO BE CHARGED TO TAX U/S.56(2)(V) OF THE OF THE INCOME TAX ACT [ACT]. ITA NO. 941/HYD/2017 :- 2 -: ACCORDINGLY, NOTICE U/S.142(1) OF THE ACT WAS ISSUED O N 12-11- 2008, CALLING FOR A RETURN OF INCOME FOR THE AY.2007- 08. 2.1 IN REPLY THERETO, THE ASSESSEE FILED A LETTER DT.18- 11-2008 STATING THAT THE RETURN WAS ALREADY FILED BY HIM ON 12-0 7-2007 AND COPY OF THE SAME WAS ENCLOSED. ON PERUSAL OF THE SAID RETURN OF INCOME, AO OBSERVED THAT THE ASSESSEE HAS NOT DISCLOSED THE AMOUNT OF RS.38 LAKHS IN THE RETURN OF IN COME AND THEREFORE A NOTICE U/S.148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 21-11-2008 CALLING FOR RETURN OF INCOME, DISCLOSING TRUE AND CORRECT PARTICULARS. THE ASSESSEE FILED A LETTE R DT.26-02-2009 SUBMITTING THAT THE RETURN FILED ON 12-07-2 007 BE TREATED AS A RETURN FILED IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. THEREAFTER, THE ASSESSEE APPEARED BEFORE THE AO AN D FURNISHED NECESSARY INFORMATION. THE AO OBSERVED THAT THERE ARE TOTAL DEPOSITS TO THE EXTENT OF RS.56,53,240/- INTO THE SAVINGS BANK A/C MAINTAINED BY THE ASSESSEE IN HDFC B ANK, STATE BANK OF MYSORE AND ICICI BANK LIMITED. ASSESSEE WAS DIRECTED TO EXPLAIN THE SOURCES FOR THE SAID DEPOSITS A ND THE ASSESSEE EXPLAINED THE SOURCES TO THE EXTENT OF RS. 35,11,490/-. AO OBSERVED THAT FOR THE BALANCE OF THE A MOUNT, ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE SOURCES AN D THEREFORE HE TREATED THE SAID AMOUNT AS INCOME FROM UN- EXPLAINED SOURCES AND BROUGHT IT TO TAX U/S.69 OF THE ACT. ACCORDINGLY, AN AMOUNT OF RS.21,41,750/- WAS ADDED TO THE RETURNED INCOME OF THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFOR E THE CIT(A), STATING THAT A SUM OF RS.2,90,000/- WAS RECEIVE D BY HIM FROM HIS BROTHER-IN-LAW TO MEET THE EDUCATION AND OTHER ITA NO. 941/HYD/2017 :- 3 -: LIVING EXPENSES OF HIS BROTHER-IN-LAWS DAUGHTER, WHI CH WERE BORNE BY THE ASSESSEE. WITH REGARD TO OTHER DEPOSITS, THE ASSESSEE HAD STATED THAT SOME OF THE FUNDS HAVE BEEN REC EIVED FROM THE ASSESSEES SON-IN-LAW AND THE BALANCE AMOUN TS ARE ALSO FROM THE WITHDRAWALS MADE FROM OTHER BANK ACCOUN TS, IMMEDIATELY PRIOR TO DEPOSITS. LD.CIT(A) ACCEPTED T HE SOURCE TO THE EXTENT OF RS.10 LAKHS AND ODD AND CONFIRMED THE ADD ITION TO THE EXTENT OF RS.8,25,000/- AND RS.2,90,000/- TOTALLIN G TO RS.11,15,000/-. 4. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TR IBUNAL, RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ORDER OF THE LD.COMMISSIONER OF INCOME TAX (APPEALS)-11, HYDERAB AD, ALLOWING THE APPEAL ONLY IN PART IS ERRONEOUS, ILLEGAL AND U NSUSTAINABLE ON FACTS AND IN LAW. THE COMMISSIONER (APPEALS) OUGHT TO HAVE ALLOWED THE APPEAL IN ENTIRETY AS PRAYED FOR BY THE APPELLA NT. 2. THE COMMISSIONER (APPEALS) ERRED IN SUSTAINING T HE ADDITION OF RS.8,25,000 BEING THE AMOUNTS REDEPOSITED INTO BANK . THE COMMISSIONER (APPEALS) OUGHT TO HAVE APPRECIATED TH AT THE SOURCE FOR THE DEPOSIT, IN THE FORM OF EARLIER WITHDRAWAL, WAS EXPLAINED BY THE APPELLANT AND THEREFORE THE ADDITION OF RS.8,25,000 IS UNSUSTAINABLE ON FACTS AND IN LAW. 3. THE COMMISSIONER (APPEALS) FAILED TO APPRECIATE THAT THERE IS NO PRESUMPTION IN LAW THAT THE MONEY WITHDRAWN FROM BA NK IS ALWAYS TAKEN TO HAVE BEEN SPENT. THE COMMISSIONER (APPEALS ) OUGHT TO HAVE APPRECIATE THAT IN THE ABSENCE OF ANY INFORMATION W ITH THE REVENUE THAT THE AMOUNT WITHDRAWN WAS USED FOR ANY OTHER PU RPOSES, THE EXPLANATION OF THE APPELLANT THAT THE SAME IS REDEP OSITED CANNOT BE BRUSHED ASIDE. 4. THE COMMISSIONER (APPEALS) ERRED IN SUSTAINING T HE ADDITION OF RS.2,90,000 BEING THE AMOUNT RECEIVED FROM SRI M.VE NUGOPAL REDDY. THE COMMISSIONER (APPEALS) FAILED TO APPRECIATE THA T THE SAID AMOUNT WAS GIVEN TO THE APPELLANT TO DEFRAY EDUCATION EXPE NDITURE OF HIS NIECE. 5. THE COMMISSIONER (APPEALS) OUGHT TO HAVE GIVEN S UFFICIENT TIME TO FURNISH THE NOTARIZED AFFIDAVIT FROM SRI M.VENUGOPA L REDDY RATHER ITA NO. 941/HYD/2017 :- 4 -: THAN HURRIEDLY CONCLUDING THE APPEAL PROCEEDING. TH E COMMISSIONER (APPEALS) FAILED TO APPRECIATE THAT THE APPELLANT H AS SUBMITTED THE CONFIRMATION LETTER OF SRI M.VENUGOPAL REDDY AND CO ULD NOT PRODUCE THE NOTARIZED AFFIDAVIT FOR WANT OF TIME. 6. THE COMMISSIONER (APPEALS) OUGHT TO HAVE ACCEPTE D THE CONFIRMATION LETTER SUBMITTED BY SRI M.VENUGOPAL RE DDY RATHER THAN INSISTING UPON THE NOTARIZED AFFIDAVIT. 4.1. IN ADDITION TO THE ABOVE GROUNDS, THE ASSESSEE AL SO FILED ADDITIONAL GROUNDS, CHALLENGING THE VALIDITY OF RE-OP ENING OF THE ASSESSMENT. HOWEVER, AT THE TIME OF HEARING, LD.COUN SEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITIONAL GROUNDS R AISED BY THE ASSESSEE ARE NOT BEING PRESSED. THEREFORE, THE ADDITIONAL GROUNDS ARE NOT ADMITTED AND ADJUDICATED. 5. AS REGARDS THE SUM OF RS.11,15,000/- IS CONCERNE D, I FIND THAT THE SAID AMOUNT COMPRISES OF TWO AMOUNTS ON E IS RS.2,90,000/- ALLEGEDLY RECEIVED BY THE ASSESSEE FRO M HIS BROTHER-IN-LAW AND RS.8,25,000/- WHICH ARE ALLEGEDLY THE DEPOSITS FROM THE WITHDRAWALS MADE EARLIER. LD.COUNS EL FOR THE ASSESSEE HAS DRAWN MY ATTENTION TO PARA 7 OF THE CIT(A) S ORDER, WHEREIN WITHDRAWALS AND IMMEDIATE DEPOSITS THE REOF ARE EXPLAINED: S.NO AMOUNT RS. 1 02.02.2007 DRAWN RS.100000 AND 05.02.2007 DEPOSITED 1,00,000 2 09.10.2006 DRAWN RS.350000 AND 13.10.2006 AND 14.10.2006 DEPOSITED 2,75,000 3 24.10.2006 DRAWN RS.264000 AND 26.10.2006 DEPOSITED 50,000 4 10.04.2006 DRAWN RS.86000 AND 12.04.2006 DEPOSITED 86,000 5 NRI AMOUNTS RECEIVED FROM SON-IN-LAW DURING THE PREVIOUS YEAR IS ALSO DEPOSITED DURING THE YEAR 4,00,000 THUS, HE EXPLAINED THE SOURCES FOR THE DEPOSITS. ITA NO. 941/HYD/2017 :- 5 -: 6. AS REGARDS THE SUM OF RS.2,90,000/- IS CONCERNED, THE ASSESSEE SUBMITTED THAT HE HAS RECEIVED THE SAID SUM FR OM HIS BROTHER-IN-LAW THROUGH CHEQUE AND THE BANK ACCOUNT OF THE ASSESSEE WOULD PROVE THE SAME. HE ALSO SUBMITTED THAT TH E CIT(A) HAD CONFIRMED THE ADDITION, ONLY ON THE GROUND THAT NOTARISED CONFIRMATION OF HIS BROTHER-IN-LAW WAS NOT SUBMITTED. HE ALSO SUBMITTED THAT THE SAME IS NOW FILED B EFORE THE TRIBUNAL AS ADDITIONAL EVIDENCE AND PRAYED FOR AD MISSION OF THE SAME. 7. LD.DR WAS ALSO HEARD, WHO SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 8. HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL ON RECORD, I FIND THAT THE SUM OF RS.2,90,000/- IS ALLEGE DLY RECEIVED BY THE ASSESSEE THROUGH CHEQUES FROM HIS BRO THER-IN- LAW. A COPY OF THE BANK ACCOUNT, (WHEREIN THESE DEPOS ITS ARE RECORDED) IS ALSO FILED BEFORE THE TRIBUNAL IN THE FO RM OF A PAPER BOOK AT PAGE NOS.14 & 15. I FIND THAT THE SUM O F RS.50,000/- AND RS.1,20,000/- HAVE BEEN DEPOSITED TH ROUGH CHEQUES ON 25-08-2006 AND 07-09-2006 RESPECTIVELY, TOTALLING TO RS.1,70,000/-. THE BALANCE OF RS.1,20,000/- IS AL SO PAID BY CHEQUE ON 14-10-2006. WHEN THE RELEVANT TRANSACTIONS AR E REFLECTED IN THE BANK ACCOUNT, IT SHOULD NOT HAVE BEEN DIFFICULT FOR THE DEPARTMENT TO VERIFY THE SOURCE OF THESE TRANSFERS FROM THE BANK. THEREFORE, I AM INCLINED TO ACCEPT THE SAID CREDITS FROM ASSESSEES BROTHER-IN-LAW SHRI VENUGOPAL REDDY S A/C, AS EXPLAINED AND THE ADDITION TO THE EXTENT OF RS.2,90,000/- IS DELETED. ITA NO. 941/HYD/2017 :- 6 -: 8.1. AS REGARDS THE SUM OF RS.8,25,000/- IS CONCERN ED, I AM SATISFIED WITH THE WITHDRAWALS AND RE-DEPOSITS TO THE EX TENT OF RS.4,25,000/- ONLY. HOWEVER, WITH REGARD TO SUM OF R S.4 LAKHS ALLEGEDLY RECEIVED FROM THE ASSESSEES SON-IN- LAW, THERE IS NO EVIDENCE OR PROOF OF THE SAME. THEREFORE, I DE EM IT FIT AND PROPER TO DELETE THE SAME TO THE EXTENT OF RS.4,25,000/- A ND THE BALANCE OF RECEIPT OF RS.4 LAKHS IS CONFIRMED. 8.2 ACCORDINGLY, THE GROUNDS RAISED BY ASSESSEE ARE TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL OF ASSESSEE IS TREATED AS P ARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH JANUARY, 2020 SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED: 08-01-2020 TNMM COPY TO : 1. SRI JAJAPURAM VENKAT REDDY, C/O. SHRI A.V.RAGHU RAM, P.VINOD & M.NEELIMA DEVI, ADVOCATES, 610, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2. INCOME TAX OFFICER, WARD-9(4), HYDERABAD. 3. CIT(APPEALS)-11, HYDERABAD. 4. PR.CIT-7, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.