Kota Muralidhar, Tekkali V. The ITO, Srikakulam

ITA 97/VIZ/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6666 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 02-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K SETHI
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 97 /VIZ/ 201 7 ( / ASSESSMENT YEAR: 201 3 - 1 4 ) KOTA MURALIDHAR PROP: DAMARUKA ENTERPRISES D.NO.1 - 1 - 54/17/17 CHAKIPALLI TEKKALI SRIKAKULAM DIST. [ PAN : A GTPK2700L ] THE INCOME TAX OFFICER WARD - 2, PALAKONDA ROAD SRIKAKULAM 532 001 ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI S.RAMA RAO , AR / RESPONDENT BY : S HRI M.K.SETHI, DR / DATE OF HEARING : 0 5 .0 9 .2017 / DATE OF PRONOUNCEMENT : 13 . 0 9 .2017 / O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] - 2 , VISAKHAPATNAM VIDE ITA NO.2 83 /201 5 - 1 6 /CIT (A) - 2/VSP/W - 2/SKL/2016 - 17 DATED 20 . 12 .201 6 . 2 ITA NO. 97 /VIZ/201 7 KOTA MURALIDHAR, TEKKALI 2. ALL GROUNDS OF APPEAL ARE RELATED TO THE ADDITION MA DE BY THE ASSESSING OFFICER U/S 68 OF I.T.ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THERE WAS AN OUTSTANDING LOAN OF RS.5,00,000/ - IN THE NAME OF MR.B.RAMAMURTHY. THE LOAN WAS GIVEN BY THE C REDITOR TO THE ASSESSEE IN 2007 AN D THE SAME WAS OUTSTANDING SINCE 30.09.2007 ONWARDS. THE CREDITOR HAS GIVEN THE LOAN WITHOUT INTEREST WHICH LED TO THE SUSPICION OF THE ASSESSING OFFICER REGARDING ITS GENUINE NE SS . THE ASSESSING OFFICER WAS OF THE VIEW THAT IT IS NOT POSSIBLE FOR A COMMO N MAN LIKE MR.B.RAMAMURTHY TO GIVE HUGE AMOUNT OF RS.5 ,00,000/ - INTEREST FREE LOAN FOR SIX YEARS. HENCE, HE SUSPECTED THE GENUINE NE SS OF THE TRANSACTI ON OF RS.5 ,00,000/ - AND BROUGHT TO TAX . 3. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESS EE WENT ON APPEAL BEFORE THE CIT (A) AND THE LD. CIT (A) CONFIRMED THE ADDITION HOLDING THAT IT IS IMPROBABLE TO AN AGED MAN TO GIVE AWAY HIS RETIREMENT BENEFITS WITHOUT ANYTHING IN RETURN. HENCE, THE LD.CIT(A) CONCURRED WITH THE ASSESSING OFFICER THAT THE G ENUINENESS OF THE TRANSACTION WAS DOUBTFUL. ACCORDINGLY CONFIRMED THE ADDITION MADE BY THE ASSESSING 3 ITA NO. 97 /VIZ/201 7 KOTA MURALIDHAR, TEKKALI OFFICER. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL. 4 . APPEARING FOR THE ASSESSEE, THE LD.AR ARGUED THAT MR.B.RAMAMURTHY IS AN AGED MAN, WHO WORKED IN VISAKHA DIARY AND CLOSELY RELATED TO THE ASSESSEE. HE RECEIVED THE BENEFITS FROM VISAKHA DIARY AFTER RETIREMENT AND FROM THE RETIREMENT BENEFITS, THE AMOUNT OF RS.5 ,00,000/ - WAS INVESTED IN THE ASSESSEES BUSI NESS. SINCE, THE AGED OLD MAN IS RESIDING WITH THE ASSESSEE AND THE ASSESSEE IS TAKING CARE OF T HE CREDITOR, THERE IS NO ELEMENT OF INTEREST INVOLVED AND THE LOAN IS GENUINE. LD. AR FURTHER ARGUED THAT THERE WAS NO DOUBT REGARDING THE IDENTITY, GENUINEN ESS AND CAPACITY OF THE CREDITOR. ALL THE DETAILS REQUIRED TO PROVE THE GENUINENESS OF THE T RANSACTION WERE SUBMITTED TO THE ASSESSING OFFICER. HENCE, THERE I S NO CA SE FOR MAKING THE ADDITION AND THE ADDITION MAY BE DELETED. 5 . ON THE OTHER HAND, LD.DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 4 ITA NO. 97 /VIZ/201 7 KOTA MURALIDHAR, TEKKALI 6 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED ON RECORD. THE LOAN WAS GIVEN BY THE CREDITOR ON 30.09.2007 RELEVANT TO THE ASSESSMENT YEAR 2008 - 09. AS PER SECTION 68 OF THE I.T. ACT, THE CREDITS MADE DURING THE YEAR FOR WHICH THE SOURCE IS NOT EXPLAINED REQUIRED TO BE BROUGHT TO TAX AS AN UNEXPLAINED CASH CREDIT. THE CREDIT WAS NOT RELATING TO THE YEAR UNDER CONSIDERATION, BUT RELATED TO THE ASSESSMENT YEAR 2008 - 09. THEREFORE, TH E ADDITION CANNOT BE MADE IN THE ASSESSMENT YEAR 2013 - 14 FOR THE CREDITS INTRODUCED IN THE FINANCIAL YEAR 2007 - 08. FURTHER, IN THIS CASE, THERE IS NO DOUBT REGARDING THE GENUINENESS OF THE TRANSACTIONS, THE SOU RCE AND IDENTITY OF THE CREDITOR . THE ASSESSI NG OFFICER MADE A DDITION MERELY WITH A SUSPICION AND NO EVIDENCE WAS BROUGHT ON RECORD TO PROVE THAT THE LOAN OF RS.5 , 00 ,000/ - WAS BOGUS OR THE ASSESSEE HAS MADE THE REPAYMENT OF LOAN TO MR.B.RAMAMURTHY AND SHOWING AS BOGUS CREDIT. HENCE, THERE IS NO CAS E FOR MAKING THE ADDITION OF RS.5 ,00,000/ - AND THE SAME IS DELETED. ACCORDINGLY WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES A LLO W THE APPEAL OF THE ASSESSE E . 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. 5 ITA NO. 97 /VIZ/201 7 KOTA MURALIDHAR, TEKKALI T HE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 13 TH SEP 20 17 . SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 13 . 0 9 .2017 L. RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE APPELLANT KOTA MURALIDHAR, PROP: DAMARUKA ENTERPRISES , D.NO.1 - 1 - 54/17/17 CHAKIPALLI, TEKKALI, SRIKAKULAM DIST. 2 . / THE RESPONDENT THE INCOME TAX OFFICER, WARD - 2, PALAKONDA ROAD, SRIKAKULAM 532 001 3 . THE COMMISSIONER OF INCOME - TAX - 2 , VISAKHAPATNAM 4 . ( ) / THE CIT (A) - 2 , VISAKHAPATNAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM