ITO, Ward-8(2), Hyderabad V. Sri Bhoopal Reddy M, R.R.Dist

ITA 972/HYD/2013

• Counselvise Citation: 97222514 RSA 2013
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 11-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KIRAN KATTA
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Corroborative evidences
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 972/HYD/2013 ASSESSMENT YEAR : 2005-06 THE INCOME TAX OFFICER, WARD 8(2), 8 TH FLOOR, D-BLOCK, IT TOWERS, AC GUARDS, HYDERABAD. SRI BHOOPAL REDDY M., RALLAGUDA, SHAMSHABAD MANDAL, RR DT. PAN ASWPM 7265 P M (APPELLANT) (RESPONDENT) REVENUE BY SHRI KIRAN KATTA ASSESSEE BY SHRI S. RAMA RAO DATE OF HEARING 22-09-2014 DATE OF PRONOUNCEMENT 15-10-2014 O R D E R PER SAKTIJIT DEY, J.M.: THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER DATED 11/03/2013 OF CIT(A), VIJAYAWADA RELATING TO AY 2005-06. 2. THE ONLY ISSUE ARISING OUT OF THE GROUND RAISED BY THE DEPARTMENT IS IN RESPECT OF DELETION BY CIT(A)OF AD DITION FOR AN AMOUNT OF RS. 22,75,000. 3. BEREFT OF UNNECESSARY DETAILS, FACTS IN BRIEF AR E, DURING THE REASSESSMENT PROCEEDING INITIATED U/S 147 OF THE AC T, AO ON THE BASIS OF MATERIAL AVAILABLE WITH HIM FOUND THAT DUR ING THE RELEVANT PREVIOUS YEAR ASSESSEE HAS DEPOSITED AN AMOUNT OF R S. 29,30,500 IN TO HIS BANK ACCOUNT. HE, THEREFORE, REQUIRED THE ASSESSEE TO 2 ITA NO.972/HYD/2013 SHRI BHOOPAL REDDY M. EXPLAIN THE SOURCE OF SUCH DEPOSIT IN TO THE BANK A CCOUNT. IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED, ASSESSEE EXPLAINED THAT HE WAS HAVING NO OTHER SOURCE OF INCOME EXCEPT AGRI CULTURAL INCOME. IT WAS SUBMITTED THAT ANCESTORS OF ASSESSEE HAILED FROM AGRICULTURAL FAMILY AND ASSESSEE HAD INHERITED AGRI CULTURAL LAND AND CARRYING ON AGRICULTURAL ACTIVITIES FROM THE INCEPT ION. IT WAS SUBMITTED THAT AFTER DEATH OF ASSESSEES FATHER ON 13/10/1996, THE EXISTING AGRICULTURAL LAND WAS DIVIDED BETWEEN ASSE SSEE AND HIS MOTHER IN EQUAL PROPORTION. ASSESSEE ALSO FURNISHED DETAILS OF LAND HOLDING BY HIMSELF AND HIS MOTHER. IT WAS SUBMITTED THAT BEING THE ONLY SON OF HIS PARENTS, EVEN AFTER PARTITION OF TH E PROPERTY BETWEEN HIMSELF AND HIS MOTHER AND AS ASSESSEES MOTHER IS AN AGED PERSON AND IS DEPENDING UPON ASSESSEE FOR ALL PURPO SES, AGRICULTURAL LAND HELD BY HER IS ALSO CULTIVATED BY ASSESSEE ALONG WITH HIS SHARE OF LAND. IT WAS, THUS, SUBMITTED THA T THE ENTIRE LAND BELONGING TO BOTH HIMSELF AND HER MOTHER WAS CULTIV ATED BY HIM AND INCOME DERIVED THERE FROM WAS AVAILABLE WITH THE AS SESSEE. ASSESSEE FURTHER SUBMITTED THAT IN APRIL2000, ASSE SSEE AND HER MOTHER HAD SOLD SOME AGRICULTURAL LAND AND RECEIVED SALE CONSIDERATION OF RS. 5,76,625, WHICH WAS AVAILABLE WITH THE ASSESSEE. FURTHER ON 10/06/2004 SOME MORE LAND WAS SOLD FOR CONSIDERATION OF RS. 4,47,500, WHICH WAS ALSO AVAIL ABLE WITH ASSESSEE. IT WAS SUBMITTED THAT BESIDES SAVINGS FRO M AGRICULTURAL INCOME AND SALE PROCEEDS FROM SALE OF AGRICULTURAL LAND, DURING THE MONTH OF JUNE, 2004, ONE SHRI YALAMANCHI RAVINDRA K UMAR OF HYDERABAD, WHO HAD PURCHASED AGRICULTURAL LAND FROM ASSESSEE, WAS DESIROUS OF PURCHASING SOME MORE AGRICULTURAL L AND IN THE NEIGHBORHOOD WITH THE HELP OF ASSESSEE. THEREFORE, FOR LOCATING SUITABLE LAND AND FACILITATE PAYMENTS TOWARDS ADVAN CE TO THE VENDORS HE HAS KEPT AN AMOUNT OF RS. 10 LAKHS WITH THE ASSESSEE. IT WAS SUBMITTED THAT THE SAID AMOUNT OF RS. 10 LAK HS WAS ALSO 3 ITA NO.972/HYD/2013 SHRI BHOOPAL REDDY M. DEPOSITED IN THE BANK ACCOUNT WITH GOLKONDA GRAMEEN A BANK. IT WAS SUBMITTED THAT SINCE ASSESSEE WAS NOT ABLE TO FINALIZE THE DEALS, THE AMOUNT OF RS. 10 LAKHS WAS REFUNDED BACK TO THE PERSON CONCERNED BY WITHDRAWING FROM THE SAID BANK ACCOUNT . IN THIS CONTEXT, AFFIDAVIT FROM SHRI YALAMANCHI RAVINDRA KU MAR WAS ALSO FILED BEFORE THE AO. THUS, IT WAS SUBMITTED BY ASSE SSEE THAT THE MONIES AVAILABLE WITH ASSESSEE FROM AGRICULTURAL IN COME, SALE OF AGRICULTURAL LAND AND AMOUNT RECEIVED FROM SHRI YAL AMANCHI RAVINDRA KUMAR WERE THE SOURCE FOR MAKING DEPOSIT I N THE BANK. IN SUPPORT OF SUCH CLAIM, ASSESSEE ALSO FILED YEAR-WIS E CASH FLOW STATEMENTS FROM AY 1996-97 TILL 2004-05. AO, HOWEVE R, WAS NOT CONVINCED WITH THE EXPLANATION OF ASSESSEE. HE WAS OF THE VIEW THAT NO PRUDENT MAN WILL KEEP CASH WITH HIM WITHOUT INVESTING IN A PROFITABLE MANNER. HE, THEREFORE, DISBELIEVING THE EXPLANATION OF ASSESSEE, HELD THAT THE DEPOSITS IN THE SAVING BANK ACCOUNT TO THE EXTENT OF RS. 29,30,500 AND INTEREST OF RS. 27,458/ - ARE TO BE TREATED AS UNEXPLAINED INVESTMENT OF ASSESSEE. HAVI NG HELD SO, AO REDUCED THERE FROM AN AMOUNT OF RS. 4,47,500 ON ACC OUNT OF SALE OF AGRICULTURAL LAND AND AN AMOUNT OF RS. 2,35,458 TOWARDS AGRICULTURAL INCOME. ULTIMATELY, HE QUANTIFIED THE UNEXPLAINED INVESTMENT AT RS. 22,75,000. BEING AGGRIEVED OF THE ADDITION, SO MADE, ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). 4. IN COURSE OF PROCEEDING BEFORE THE CIT(A), IT WA S SUBMITTED, ASSESSEE NOT ONLY IS HAVING SUBSTANTIAL AGRICULTURA L LAND HOLDING BUT HAS ALSO TAKEN ON LEASE CERTAIN AGRICULTURAL LA NDS WHEREIN HE CARRIES ON AGRICULTURAL ACTIVITIES. IT WAS SUBMITTE D BY ASSESSEE THAT FROM THE ASSESSMENT YEAR 1996-97 ONWARDS, ASSESSEE WAS EARNING SUBSTANTIAL INCOME FROM AGRICULTURAL ACTIVITY. IN S UPPORT OF SUCH CONTENTION, ASSESSEE ALSO FURNISHED DOCUMENTARY EVI DENCE IN FORM OF PATTADAR PASSBOOK ETC. ASSESSEE ALSO SUBMITTED A COPY OF 4 ITA NO.972/HYD/2013 SHRI BHOOPAL REDDY M. AFFIDAVIT FROM SHRI YALAMANCHI RAVINDRA KUMAR IN SU PPORT OF THE CLAIM THAT AMOUNT OF RS. 10 LAKH WAS RECEIVED FROM HIM, WHICH WAS ALSO AVAILABLE WITH ASSESSEE. IT WAS ALSO BROUGHT T O THE NOTICE OF CIT(A) THAT ASSESSEE AND HIS MOTHER SOLD AGRICULTUR AL LANDS AND RECEIVED SALE CONSIDERATION OF RS. 5,86,625 DURING THE YEAR 2000 AND RS. 4,47,500 DURING FY 2004-05. IN THIS CONTEXT , ASSESSEE ALSO SUBMITTED SUPPORTING EVIDENCE IN THE FORM OF COPIES OF SALE DEED. THE CIT(A) AFTER EXAMINING THE SUBMISSIONS OF ASSES SEE IN THE CONTEXT OF EVIDENCE AVAILABLE ON RECORD, ACCEPTED T HE FACT THAT ASSESSEE WAS HAVING SUBSTANTIAL INCOME FROM AGRICUL TURAL SOURCES, AS WELL AS FROM SALE OF AGRICULTURAL LAND. HE WAS O F THE VIEW THAT WHEN ASSESSEE IS HAVING EXPLAINABLE SOURCE OF INCOM E, THE DEPOSITS IN THE BANK ACCOUNT ALSO HAVE TO BE TREATE D AS OUT OF THOSE EXPLAINABLE SOURCES. THE CIT(A), THEREFORE, F OLLOWING A NUMBER OF DECISIONS OF THE HONBLE SUPREME COURT AS WELL AS DIFFERENT HIGH COURTS AND ITAT, ULTIMATELY, CONCLUD ED THAT AS ASSESSEE WAS HAVING SUFFICIENT SOURCE TO MAKE DEPOS ITS IN THE BANK ACCOUNT, DELETED THE ADDITION MADE BY AO. 5. HAVING CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIALS ON RECORD, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A). ON PERUSAL OF THE ASSESSME NT ORDER, IT IS CLEAR THAT ASSESSEE HAS SUBMITTED NECESSARY DETAILS EXPLAINING THE SOURCE OF DEPOSITS. FURTHER, IT IS EVIDENT THAT AO DOES NOT DISPUTE THE AGRICULTURAL LAND HOLDING OF ASSESSEE AND ALSO THE FACT THAT ASSESSEE CARRIES ON AGRICULTURAL ACTIVITIES. THIS I S BECAUSE HE HAS ACCEPTED A PART OF AGRICULTURAL INCOME AND ALSO PAR T OF SALE PROCEED FROM SALE OF AGRICULTURAL LAND. IT IS ALSO CRUCIAL FACT THAT AO HAS NOT FOUND ANY OTHER OSTENSIBLE SOURCE OF INCOME EXCEPT AGRICULTURAL INCOME. IN THE AFORESAID CIRCUMSTANCES , WHEN THERE ARE EVIDENCES TO SHOW THE EARNING OF AGRICULTURAL INCOM E AND ALSO 5 ITA NO.972/HYD/2013 SHRI BHOOPAL REDDY M. OTHER EXPLAINABLE SOURCE OF MAKING DEPOSITS IN THE BANK ACCOUNT, AO WAS NOT JUSTIFIED IN MAKING ADDITION ON MERE PRE SUMPTIONS AND SURMISES BY IGNORING THE EVIDENCES PRODUCED BY ASSE SSEE. IN THE AFORESAID FACTS AND CIRCUMSTANCES, WE DO NOT FIND A NY REASON TO INTERFERE WITH THE ORDER OF CIT(A), WHICH IS ACCORD INGLY UPHELD DISMISSING THE GROUNDS RAISED BY THE DEPARTMENT. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 15 TH OCTOBER, 2014. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 15 TH OCTOBER, 2014 KV COPY TO:- 1) ITO, WARD 8(2), 8 TH FLOOR, D-BLOCK, IT TOWERS, AC GUARDS, HYDERABAD. 2) SRI BHOOPAL REDDY M., H.NO. 10-5, RALLAGUDA, HU DA COLONY, HYDERABAD. 3) CIT(A), VIJAYAWADA. 4) CIT-II, HYDERABAD 5)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD.