Sri. P. V. Sitaramaswamy Naidu, Hyderabad V. Addl. CIT, Range-8, Hyderabad

MA 106/HYD/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0566 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-07-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 15-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained cash credit; Business income; Income from undisclosed sources
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER MA NO. 106/HYD/2013 IN I.T.A. NO. 264/HYD/2012 ASSESSMENT YEAR 2008-09 SRI P.V. SITARAMASWAMY NAIDU, HYDERABAD PAN: AAOPP7713J VS. ADDL. COMMISSIONER OF INCOME-TAX, RANGE-8, HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SRI A.V. RAGHURAM RESPONDENT BY: SRI K.J. RAO DATE OF HEARING: 26 . 07. 201 3 DATE OF PRONOUNCEMENT: 26 . 07. 201 3 ORDER PER CHANDRA POOJARI, AM: THIS MISCELLANEOUS APPLICATION (MA) BY THE ASSESSE E IS SEEKING RECTIFICATION IN THE ORDER OF THE TRIBUNAL IN ITA NO. 264/HYD/2012. 2. THE LEARNED AR SUBMITTED THAT THE ASSESSEE RAISED EFFECTIVE GROUND NOS. 2 TO 10 IN HIS GROUNDS OF APP EAL. ACCORDING TO THE AR, THE TRIBUNAL DECIDED GROUND NO S. 1 TO 4 AND GROUND NO. 10. HOWEVER, THE TRIBUNAL NOT ADJUDICATED GROUND NOS. 5 TO 9 WHICH ARE RELATING T O THE MERIT OF THE ADDITION MADE U/S. 68 OF THE ACT AND T HE TRIBUNAL HAS NOT APPRISED SUBSTANTIAL EVIDENCE ON R ECORD TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENES S OF THE TRANSACTION. BEING SO TO ADJUDICATE THE GROUND NOS . 5 TO 9, THE ORDER OF THE TRIBUNAL IS TO BE RECALLED. MA NO. 106/HYD/2013 SRI P.V. SITARAMASWAMY NAIDU ======================== 2 3. ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT TH E TRIBUNAL MINUTELY CONSIDERED THE EVIDENCE BROUGHT O N RECORD WHICH IS EVIDENCED BY THE FINDING OF TRIBUNA L IN PARA 12 OF THE TRIBUNAL ORDER. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE ARGUMENT OF THE ASSESSEE'S COUNSEL IS TOTALLY MISCONCEIVED. THE TRIBUNAL CONSIDERED T HE CREDITS SHOWN IN THE NAME OF MRS. DEVI INDUKURI AT RS. 30,0 7,392 AND IN THE NAME OF MR. NANDYALA BHASKAR REDDY AT RS . 80,00,000 TOTALLING TO RS. 1,10,07,392 AND GIVEN A FINDING THAT IN THE PRESENT CASE THE ASSESSEE NEVER TOOK SP ECIFIC STAND THAT THESE UNEXPLAINED CASH CREDITS ARE REFER ABLE TO THE INCOME FROM DISCLOSED SOURCES VIZ., BUSINESS, W HOSE INCOME HAS BEEN ESTIMATED BY THE REVENUE AUTHORITIE S. IN ORDER TO DELETE THIS ADDITION, THE ASSESSEE IS BOUN D TO EXPLAIN THE SOURCE OF CREDIT, GENUINENESS OF THE TR ANSACTION AND THE CAPACITY OF THE LENDER TO ADVANCE THE SAME. AS THE ASSESSEE FAILED TO EXPLAINED THESE CRITERIA, WE HAV E NO HESITATION IN CONFIRMING THE ACTION OF THE CIT(A). AS THE ASSESSEE FAILED TO EXPLAIN THIS CRITERIA, THE TRIBU NAL CONFIRMED THE ABOVE ADDITION WHICH IS EVIDENT FROM PARA 12 OF THE TRIBUNAL ORDER WHICH IS REPRODUCED HEREIN BE LOW: '12. WE HAVE CAREFULLY GONE THROUGH THIS JUDGEMENT. THIS JUDGEMENT IS WITH REGARD TO ALLOWABILITY OF DEDUCTI ON WHILE COMPUTING BUSINESS INCOME OF THE ASSESSEE. NOW, WE ARE CONCERNED WITH THE ADDITION MADE U/S. 68 OF THE ACT . IN THE PRESENT CASE, THE ASSESSING OFFICER MADE ADDITION W ITH REGARD TO CREDIT SHOWN IN THE NAME OF MS. DEVI INDUKURI AT RS. 30,07,392 AND IN THE NAME OF MR. NANDYALA BHASKAR R EDDY AT RS. 80,00,000 TOTALLING TO RS. 1,10,07,392. WHEN T HE CREDIT ENTRY IS SHOWN IN THE BOOKS OF ACCOUNT IT IS INCUMB ENT UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF CREDIT , CREDITWORTHINESS OF THE PARTY AND GENUINENESS OF TH E TRANSACTION. THE FACT THAT THE ENTRIES ARE SHOWN I N THE BOOKS OF ACCOUNT OF THE ASSESSEE WHOSE INCOME HAD ALREADY BE EN COMPUTED ON THE BASIS OF THE ESTIMATE BUT NOT ON TH E RETURN FILED BY THE ASSESSEE, THAT DOES NOT PREVENT THE ITO FROM TREATING, BUT MA NO. 106/HYD/2013 SRI P.V. SITARAMASWAMY NAIDU ======================== 3 ENTITLES HIM TO TREAT, THE UNEXPLAINED CASH CREDIT AS INCOME FROM UNDISCLOSED SOURCES WHICH FALLS UNDER THE HEAD OF INCOME 'INCOME FROM OTHER SOURCES'. UNLESS THE ASSESSEE, BY INDEPENDENT AND SATISFACTORY EVIDENCE, ESTABLISHES THAT THOSE AMOUNTS RELATE OR REFERABLE TO THE UNDISCLOSED INCO ME FROM KNOWN OR DISCLOSED SOURCES VIZ., THE BUSINESS, WHOS E INCOME HAD ALREADY BEEN ESTIMATED. IN THE PRESENT CASE, T HE ASSESSEE DID NOT ABLE TO ESTABLISH THE CASH CREDITS MENTIONE D ABOVE AS GENUINE CREDITS. THE ASSESSEE'S STAND FROM THE BEG INNING AND ALSO BEFORE US IS THAT THE CASH CREDITS ARE GENUINE . THE ASSESSEE NEVER TOOK SPECIFIC STAND THAT THESE UNEXP LAINED CASH CREDITS ARE REFERABLE TO THE INCOME FROM DISCLOSED SOURCES VIZ., BUSINESS, WHOSE INCOME HAS BEEN ESTIMATED BY THE RE VENUE AUTHORITIES. IN ORDER TO DELETE THIS ADDITION, THE ASSESSEE IS BOUND TO EXPLAIN THE SOURCE OF CREDIT, GENUINENESS OF THE TRANSACTION AND THE CAPACITY OF THE LENDER TO ADVAN CE THE SAME. AS THE ASSESSEE FAILED TO EXPLAINED THESE CRITERIA, WE HAVE NO HESITATION IN CONFIRMING THE ACTION OF THE CIT(A). FOR THIS PURPOSE, WE PLACE RELIANCE ON THE JUDGEMENT OF JURI SDICTIONAL HIGH COURT IN THE CASE OF CIT V. MADURI RAJAIAHGARI KISTAIAH (120 ITR 294). FURTHER, WE PLACE RELIANCE ON THE J UDGEMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT V. DEVI PR ASAD VISWANATH PRASAD (72 ITR 194) WHEREIN HELD THAT ON REJECTION OF BOOKS OF ACCOUNT, BUSINESS INCOME ESTIMATED, ADD ITION TOWARDS UNEXPLAINED CASH CREDIT SEPARATELY VALUED.' 5. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE OPIN ION THAT THERE IS NO MISTAKE APPARENT ON RECORD WHICH WARRAN TS RECALLING EARLIER ORDER OF THE TRIBUNAL. FURTHER, THE ORDER OF THE TRIBUNAL IS TO BE READ IN A WHOLE AND NOT IN A PIECEMEAL MANNER . FOR THIS PURPOSE, WE PLACE RELIANCE ON THE JUDGEMENT OF SUPR EME COURT IN THE CASE OF CIT VS. KARAM CHAND THAPAR & BROS. PVT. LTD. (176 ITR 535) WHEREIN HELD THAT THE DECISION OF THE TRIBUNAL HAS NOT TO BE SCRUTINISED SENTENCE BY SENTENCE MERELY TO FIND OUT WHETHER ALL FACTS HAVE BEEN SET OUT IN DETAIL BY THE TRIBUNAL O R WHETHER SOME INCIDENTAL FACT WHICH APPEARS ON THE RECORD HAS NOT BEEN NOTICED BY THE TRIBUNAL IN ITS JUDGMENT. IF THE COURT, ON A FAIR READING OF THE JUDGMENT OF THE TRIBUNAL, FINDS THAT IT HAS TAK EN INTO ACCOUNT ALL RELEVANT MATERIAL AND HAS NOT TAKEN INTO ACCOUN T ANY IRRELEVANT MATERIAL IN BASING ITS CONCLUSIONS, THE DECISION OF THE TRIBUNAL IS NOT LIABLE TO BE INTERFERED WITH, UNLESS, OF COURSE , THE CONCLUSIONS ARRIVED AT BY THE TRIBUNAL ARE PERVERSE. IT IS N OT NECESSARY FOR THE TRIBUNAL TO STATE IN ITS JUDGEMENT SPECIFICALLY OR IN EXPRESS MA NO. 106/HYD/2013 SRI P.V. SITARAMASWAMY NAIDU ======================== 4 WORDS THAT IT HAS TAKEN INTO ACCOUNT THE CUMULATIVE EFFECT OF THE CIRCUMSTANCES OR HAS CONSIDERED THE TOTALITY OF THE FACTS, AS IF THAT WERE A MAGIC FORMULA; IF THE JUDGEMENT OF THE TRIBU NAL SHOWS THAT IT HAS, IN FACT, DONE SO, THERE IS NO REASON TO INT ERFERE WITH THE DECISION OF THE TRIBUNAL. 6. IN THE RESULT, MA BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH JULY, 2013. SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 26 TH JULY, 2013 TPRAO COPY FORWARDED TO: 1. SRI P.V. SITARAMASWAMY NAIDU, 8 - 3 - 548/549, FLAT NO. 517, MY HOME MADHUBAN APARTMENTS, SRINAGAR COLONY, AMEERPET, HYDERABAD. 2. THE ADDL. COMMISSIONER OF INCOME - TAX, RANGE - 8, I.T. TOWERS, AC GUARDS, HYDERABAD. 3. THE CIT(A) - III, HYDERABAD. 4. THE CIT - II, HYDERABAD. 5. THE DR B BENCH, ITAT, HYDERABAD.