P. Sreenivasulu Reddy, , Nellore V. DCIT, Circle-1, Nellore, Nellore

ITA 964/HYD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9420 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 06-05-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 05-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DINESH PADUCHURI
• Assessee Lawyers: A V RAGHURAM
• Keywords: Peak credit
• Section: 142(1); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 964 / HYD/201 7 ASSESSMENT YEAR: 20 1 1 - 12 P. SRINIVASULU REDDY, NELLORE. PAN A FSPP0551L VS. DY. COMMISSIONER OF INCOME - TAX, CIRCLE 1 , HYDERABAD ASSESSEE RESPONDENT ASSESSEE BY: S H RI A.V. RAGHURAM REVENUE BY: S HRI DINESH PADUCHURI DATE OF HEARING: 06 / 0 5 / 201 9 DATE OF PRONOUNCEMENT: 05 / 0 7 /201 9 O R D E R PER S. RIFAUR RAHMAN , AM: T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A), TIRUPATI , DATED, 16 / 03 /201 7 FOR AY 20 1 1 - 1 2 . 2. BRIEF FACTS OF THE CASE ARE, THE ASSESSEE , A SALARIED EMPLOYEE, E - FILED HIS RETURN OF INCOME FOR THE AY 2011 - 12 ON 13/08/2011 DECLARING TOTAL INCOME OF RS. 18,96,100/ - , WHICH WAS PROCESSED U/S 143(1) OF THE INCOME - TAX ACT, 1961 ( IN SHORT THE ACT ). SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS TO VERIFY THE DEPOSITS MADE IN THE BANK ACCOUNT. ACCORDINGLY, A NOTICE U/S 143(2) WAS ISSUED AND DULY SERVED ON THE ASSESSEE. FURTHER, A DETAILED QUESTIONNAIRE U/S 142(1) DATED 14/08/2013 WAS I SSUED AND SERVED ON THE ASSESSEE. IN RESPONSE TO THE ABOVE NOTICES, THE AR OF THE ASSESSEE FURNISHED THE DETAILS AS CALLED FOR. I.T.A. NO. 964/H /1 7 P. SRINIVASULU REDDY, NELLORE 2 2.1 O N PERUSAL OF THE BANK ACCOUNTS, THE AO NOTICED THAT DURING THE FINANCIAL YEAR 2010 - 11 RELEVANT TO THE ASSESSMENT YEAR 201 1 - 12, CERTAIN CASH DEPOSITS WERE MADE IN THE BANK ACCOUNTS HELD BY THE ASSESSEE IN HDFC BANK, ACCOUNT NO . 01411000057046 , ICIC I BANK ACCOUNT N O. 631001115712 AND HDFC BANK ACCOUNT NO.1536959 1 ON VARIOUS DATES. THE TOTAL DEPOSITS MADE IN THE ABOVE ACCOUNTS A RE AS UNDER: SL.NO. NAME AND ADDRESS OF THE BANK AMOUNT OF DEPOSIT (RS.) 1 HDFC BANK, NO. 10, 3 RD CROSS STREET, CHENNAI. A/C NO. 01411000057046 14,00,000/ - 2 ICICI BANK, G.T. ROAD, NELLORE. A/C NO. 631001115712 18,55,000/ - 3 HDFC BANK, L.B. ROAD, ADAYAR, CHENNAI (ACCOUNT NO. 15369591) 4,07,220 TOTAL 36,62,220/ - 2.2 IN ORDER TO VERIFY THE SOURCES FOR THE ABOVE CASH DEPOSITS, THE AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCES ALONG WITH MATERIAL EVIDENCE IN SUPPORT OF HIS CL AIMS. HOWEVER, LD. AR OF THE ASSESSEE WAS NOT ABLE TO EXPLAIN THE SOURCES FOR CASH DEPOSITS MADE IN THE ABOVE BANK ACCOUNTS. HENCE, A SHOW - CAUSE LETTER DATED 21.03.2014 WAS ISSUED TO THE ASSESSEE CALLING FOR OBJECTIONS FOR PROPOSED ADDITIONS TO THE INCOME RETURNED. IN RESPONSE, THE ASSESSEE'S AR FILED A LETTER ON 28.03.14 OFFERING POINT - WISE EXPLANATION TO THE SHOW - CAUSE LETTER. BRIEF OF HIS EXP LA NATION IS AS UNDER: 'WITH REGARD TO DEPOSITS MADE IN H D FC BANK , CHENNAI, THE ASSESSEE EXPLAINED THAT THE ACCOUNT IS A SALARY ACCOUNT AND DEPOSITS MADE IN SUCH ACCOUNT OUT OF HIS SALARY ACCUMULATIONS AND PREVIOUS WI TH D RA WAL FROM H DFC BANK THROUGH ATM, CHEQUE WITHDRAWALS BY HIS STAFF. FURTHER, IN RESPECT OF DEPOSITS MA DE IN ICICI BANK ACCOUNT, HE STATED THAT HIS MOTHER AND ALL HIS FAMILY MEMBERS ARE STAYING AT MANEGUNTAPADU VILLAGE AND ALL MEMBERS ARE HAVING AGRICULTURAL LANDS IN TH A T VILLAGE AND DOING AGRICULTURE OPERATIONS. HIS MOTHER'S AGRICULTURAL GROSS INCOME WAS D EPOSITED IN ICICI BANK ACCOUNT, NELLORE AND THE SAME WAS TRANSFERRED TO PERSONAL ACCOUNT OF ASSESSEE HELD IN H D FC BANK, CHENNAI '. I.T.A. NO. 964/H /1 7 P. SRINIVASULU REDDY, NELLORE 3 2.3 THE AO OBSERVED THAT I N RESPECT OF HDFC BANK ACCOUNT, SALARY IS DEPOSITED. IN ADDITION TO SALARY, AN AMOUNT OF RS.14,00,000/ - WAS DEPOSITED BY WAY O F CASH ON VARIOUS DATES. FURTHER, HE OBSERVED THAT T HE AR WAS NEITHER ABLE TO EXPLAIN THE SOURCE N OR PRODUCED ANY EVIDENCE WITH RE FERENCE TO R S .14 LAKHS OF CASH DEPOSITS. THE AR'S CONTENTION THAT AMOUNT WAS WITHDRAWN AND AGAIN DEPOSITED HAS NO GROUND , AS THE A TM WITHDRAWAL WAS ONLY A MEAGER AMOUNT OF RS.3,64, 000 / - WHICH COULD HAVE BEEN WITHDRAWN FOR MEETING HIS PERSONAL EXPENSES. TH E AO, THEREFORE, TREATED THE SAID AMOUNT OF RS. 14,00,000/ - AS UNEXPLAINED MONEY U/S 69A OF THE ACT AND ADDED THE SAME TO THE RETURNED INCOME OF THE ASSESSEE. 2.4 FURTHER, WITH REGARD TO ICICI BANK DEPOSITS, THE AO OBSERVED THAT TH E ASSESSEE STATED THAT HIS FAMILY MEMBERS HAVE OPERATED THE BANK ACCOUNT AND THEIR AGRICULTURAL INCOME HAVE BEEN DEPOSITED IN THE ACCOUNT. HOWEVER, THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE IN SUPPORT OF AGRICULTURAL LAND HOLDINGS BY HIS MOTHER OR HIS FA MILY MEMBERS DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSEE SUBMITTED EVIDENCE IN SUPPORT OF LAND HOLDINGS OF 12 ACRES OF DRY LAND HELD BY HIM AND THE INCOME FROM SUCH LANDS WAS ADMITTED AT RS.1,50, 000/ - IN THE RETURN OF INCOME FILED BY HIM IN HUF CAPACI TY WHEREAS THE BANK ACCOUNT IS HELD IN THE NAME OF INDIVIDUAL AND NOT IN HUF CAPACITY OR BY HIS FAMILY MEMBERS AND THE DEPOSITS WERE MADE IN THE ACCOUNT AT REGULAR INTERVALS DURING THE PERIOD FROM JULY TO DECEMBER. HENCE, THE AO REJECTED THE CLAIM OF THE ASSESSEE THAT THE CASH DEPOSITED IN THE ACCOUNT IS FROM HUF ON THE GROUND THAT THE SOURCES WERE NOT EXPLAINED . ACCORDINGLY, THE AO TREATED T HE DEPOSITS OF RS,18,55, 000/ - AS I.T.A. NO. 964/H /1 7 P. SRINIVASULU REDDY, NELLORE 4 UNACCOUNTED MONEY U / S.69A OF THE ACT AND ADDED TO THE TOTAL INCOME RETURNED. 3. A GGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). 4. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AS WELL AS REMAND REPORT OBTAINED FROM THE AO AND REPLY TO THE REMAND REPORT BY THE ASSESSEE, TABULATED THE PE AK CASH DEPOSITS CONSISTING OF BOTH THE BANKS TO SEE HOW MUCH CASH DEPOSITED IS UNEXPLAINED. ACCORDINGLY, WORKED OUT THE COMBINED PEAK CASH CREDIT AFTER GIVING ALLOWANCE FOR WITHDRAWALS. AFTER REDUCING AGRICULTURAL INCOME OF RS. 3,00,000/ - FROM THE SAID AM OUNT, THE ADDITION OF RS. 27,21,000/ - WAS TREATED AS UNEXPLAINED CASH DEPOSITS BY THE CIT(A). 5. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS BOTH ON FACTS AND IN LAW TO THE EXTENT IT IS PREJUDICIAL TO THE ASSESSEE. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION TO THE EXTENT OF 27,21,000 OUT OF RS.32,55,000 MADE AS UNEXPLAINED CASH DEPOSITS IN HDFC AND ICICL BANK. 3. THE LEARNED CIT (A) ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSEE'S ONLY SOURCE OF TAXABLE INCOME IS SALARY AND THERE CANNOT BE ANY UNDISCLOSED INCOME AND THEREBY ERRED IN CONFIRMING THE ADDITION. 4. THE LEARNED CIT(A) WHILE CONSIDERING THE AGRICULTURAL INCOME TO THE EXTENT OF RS.3,00,000 ERRED IN CONSIDERING ONLY THE CURRENT YEAR AGRICULTURAL INCOME OF ASSESSEE AND HIS HUF IGNORING THE INCOME OF MOTHER AND ALSO SAVINGS OF PAST YEARS AGRICULTURAL INCOME THAT COULD BE AVAILABLE AND THEREBY ERRED IN HOLDING THE DEPO SITS IN BANK AS NOT EXPLAINED AND CONFIRMING THE ADDITION. I.T.A. NO. 964/H /1 7 P. SRINIVASULU REDDY, NELLORE 5 5. THE LEARNED CLT(A) FURTHER ERRED IN NOT CONSIDERING THE HUGE CASH BALANCE THAT IS BEING SHOWN IN W.T. RETURNS HOLDING IT TO BE ONLY A PASSING REMARK MADE AND NOT PART OF SUBMISSION INSTEAD OF CONSIDERING THE SAME ALSO AS A SOURCE FOR THE DEPOSITS . 6. A NY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 6. BEFORE US, LD. AR SUBMITTED THAT ASSESSEE IS A SALARIED EMPLOYEE AND ONLY SALARIES WERE DEPOSITED AND THE ASSESSEE HAS EXPLAINED B EFORE AO THAT THE FAMILY HAS AGRICULTURAL LAND. THE DEPOSITS MADE IN THESE ACCOUNTS WERE OUT OF AGRICULTURAL INCOME. FURTHER, HE BROUGHT TO OUR NOTICE THE WEALTH TAX RETURN AS PER WHICH ASSESSEE WAS HOLDING SUBSTANTIAL CASH BALANCE AND DEPOSITS WERE MADE O UT OF SUCH CASH. HE BROUGHT TO OUR NOTICE THE STATEMENT OF PEAK CASH DEPOSITS PREPARED BY CIT(A). HE SUBMITTED THAT IT IS NOT CLEAR HOW LD. CIT(A) HAS ARRIVED THE PEAK CREDIT OF RS. 30.21. LAKHS AND ON WHAT BASIS. HE PRAYED THAT THIS SHOULD BE REMITTED BAC K TO AO FOR PROPER VERIFICATION AND ASSESSMENT. 7. LD. DR SUBMITTED THAT THERE WAS SPECIFIC ENQUIRY CONDUCTED IN THIS CASE AND FINDINGS OF TAX AUTHORITIES ARE PROPER AND CORRECT. THE CLAIM OF HOLDING HUGE CASH IN WEALTH TAX RETURN IS AN AFTER THOUGH AND THERE IS NO ACKNOWLEDGMENT FOR FILING OF SUCH WEALTH TAX RETURN. FURTHER, H E SUBMITTED THAT THERE IS NO RETURN OF INCOME FILED BY ANY MEMBER OF THE FAMILY INCLUDING ASSESSEE DECLARING AGRICULTURAL INCOME. THE SUBMISSIONS OF THE ASSESSEE ARE NOT BELIEVABLE. 8 CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. A SSESSEE MAINTAINED TW O SEPARATE BANK ACCOUNTS AND ONE OF THEM IS SALARY ACCOUNT (HDFC BANK ACCOUNT) . IN THIS ACCOUNT, HE DEPOSITED CERTAIN CASH DEPOSITS AND AT THE SAME TIME, THERE ARE CERTAIN WITHDRAWALS. HE I.T.A. NO. 964/H /1 7 P. SRINIVASULU REDDY, NELLORE 6 SUBMITTED THAT ALL THE DEPOSITS WERE MADE OUT OF AGRICULTURAL INCOME OF THE FAMILY AND PERSONAL ACCUMULATIONS. THE DOCUMENTS SUBMITTED BEFORE TAX AUTHORITIES WERE VERIFIED BY CIT(A) AND AO IN REMAND PROCEEDINGS. ASSESSEE COULD NOT EXPLAIN THE ACTUAL INCOME OUT OF AGRICULTURAL ACTIVITIES. FROM THE RECORDS, CIT(A) HAS ARRIVED RS. 3 LAKHS AS THE MAXIMUM INCOME ASSESSEE COULD HAVE EARNED. 8.1 WITH REG ARD TO BANK DEPOSITS, ASSESSEE SUBMITTED BEFORE CIT(A) TO ARRIVE THE PEAK CASH DEPOSITS, ACCORDINGLY, CIT(A) CALCULATED THE PEAK CREDIT BUT FOR SOME REASON, HE COULD NOT EXPLAIN THE SAME IN HIS REPORT. NOW, LD. AR SUBMITS THAT CIT(A) HAS ARRIVED THE PEAK C ASH DEPOSIT, WHICH IS NOT CLEAR. WE VERIFIED THE SAME AND FOUND TO BE CORRECT. IT IS GIVEN BELOW: DATE DEPOSITS WITHDRAWALS PEAK CREDIT OUTSTANDING BALANCE 01/04/10 15000 - 15000 09/04/10 15000 - 30000 12/04/10 25000 - 55000 15/04/10 10000 - 65000 17/04/10 5000 - 70000 19/04/10 15000 - 85000 21/04/10 20000 - 105000 01/05/10 20000 - 125000 02/05/10 20000 - 145000 10/05/10 100000 - 45000 22/05/10 10000 - 55000 07/06/10 20000 - 75000 12/06/10 20000 - 95000 28/06/10 20000 - 115000 01/07/10 100000 - 15000 07/07/10 150000 135000 23/07/10 10000 125000 23/07/10 140000 265000 29/07/10 20000 245000 05/08/10 20000 225000 05/08/10 20000 205000 11/08/10 125000 330000 11/08/10 900000 1230000 12/08/10 10000 1220000 18/08/10 300000 1520000 I.T.A. NO. 964/H /1 7 P. SRINIVASULU REDDY, NELLORE 7 19/08/10 10000 1510000 21/08/10 550000 2060000 28/08/10 10000 2050000 09/09/10 120000 2170000 13/09/10 20000 2150000 23/09/10 20000 2130000 02/10/10 10000 2120000 05/10/10 10000 2110000 16/10/10 250000 236 0000 16/10/10 30000 2390000 11/11/10 10000 2380000 12/11/10 30000 2410000 25/11/10 20000 2390000 27/11/10 10000 2380000 04/12/10 5000 2375000 18/12/10 300000 2675000 22/12/10 520000 3195000 AFTER CONSIDERING THE PEAK DEPOSITS AND MAXIMUM AGRICULTURAL INCOME THAT COULD HAVE BEEN EARNED BY THE ASSESSEE AND HIS FAMILY, WE ARE INCLINED TO ACCEPT THE FINDINGS OF LD. CIT(A). ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 8.2 FURTHER, ASSESSEE CLAIMS THAT ASSESSEE ALWAYS MAINTAINED HUGE CASH BALANCE, FOR WHICH, HE SUBMITTED THE WEALTH TAX RETURN, WE DECLINE TO ACCEPT THE SAME AS AN AFTER THOUGH T AND THE SAME WAS FILED AFTER COMPLETION OF ORIGINAL ASSESSMENT. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 5 TH JULY , 201 9. SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 5 TH JULY , 201 9. KV I.T.A. NO. 964/H /1 7 P. SRINIVASULU REDDY, NELLORE 8 COPY FORWARDED TO: 1. P. SRINIVASULU REDDY, C/O S/SHRI K. VASANTKUMAR, AV RAGHURAM, P. VINOD & M. NEELIMA DEVI, ADVOCATES, 610 BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD 500 001. 2 . DC IT , CIRCLE 1, NELLORE 3 . CIT (A) , TIRUPATI 4. PR. CIT , TIRUPATI 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE