ITO, Kakinada V. Karuturi Raveendra, Kakinada

MA 12/VIZ/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6492 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 29-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D J P ANAND DR SHRI G V N HARI
• Keywords: Business income
• Section: 143(3)

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 M .A.NO. 12 /VIZ/ 201 8 (ARISING OUT OF I.T.A.NO.382/VIZ/2015) ( / ASSESSMENT YEAR: 20 11 - 1 2 ) / O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER : T HIS MISCELLANEOUS APPLICATION IS FILED BY THE REVENUE AGAINST THE ORDER OF THE ITAT IN ITA NO.382/VIZ/2015 DATED 06.10.2017 FOR THE ASSESSMENT YEAR 2011 - 12. I NCOME TAX OFFICER , WARD - 2(1) RAJAHMUNDRY VS. KARUTURI RAVEENDRA C/O J.S.SUNDARAM& CO., D.NO.10 - 4 - 56/3 SESHAGIRIRAO STREET RAMARAO PET KAKINADA [PAN :AGRPR4550M] ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI D.J.P.ANAND, DR / RESPONDENT BY : SHRI G.V.N.HARI, AR / DATE OF HEARING : 0 6 . 04. 2018 / DATE OF PRONOUNCEMENT : 13 .0 4 .2018 2 M.A.NO.12/VIZ/2018 SHRI KARUTURI RAVEENDRA, KAKINDADA 2. IN THIS CASE, THE ASSESSEE FILED RETURN OF INCOME ADMITTING TOTAL INCOME OF RS.12,39,870/ - AND THE ASSESSMENT WAS COMPLETED U/S 143(3) OF I.T .ACT ON TOTAL INCOME OF RS.93,17,529/ - . THE ASSESSING OFFICER (AO) COMPLETED THE ASSESSMENT BY ESTIMATION OF INCOME AND MADE SEPARATE ADDITION OF RS.73,36,678/ - RELATING TO CASH DEPOSITS IN THE BANK ACCOUNT. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSES SEE WENT ON APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] AND THE LD.CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL. THE ITAT DECIDED THE APPEAL BY AN ORDER IN I.T.A.NO.382/VIZ/2015 DATED 06.10.2017. THE AO ESTIMATED THE INCOME AND MADE A SEPARATE ADDITION TOWARDS CASH DEPOSITS IN THE BANK ACCOUNT AMOUNTING TO 73,36,678/ - . DURING THE COURSE OF HEARING THE APPEAL, THE LD.AR SUBMITTED THAT AGAINST THE CONTRACT RECEIPTS OF RS.3,32,64,044/ - , THE ASSESSEE HAS ADMITTED THE GROSS RECEIPTS OF RS.3,96,17,204/ - WHICH INCLUDES THE RECEIPTS IN RESPECT OF CASH DEPOSITS RELATING TO THE SALE OF GRAVEL, SUPPLY OF LABOUR ETC. THE LD.AR FURTHER SUBMITTED T HAT THE CASH DEPOSITS MADE IN THE BANK ACCOUNTS WERE DECLARED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. AFTER HEARING BOTH THE PARTIES, THE ITAT HELD THAT THE GROSS 3 M.A.NO.12/VIZ/2018 SHRI KARUTURI RAVEENDRA, KAKINDADA RECEIPTS OF RS.3,96,17,204/ - INCLUDES THE CASH DEPOSITS MADE IN THE BANK ACCOUNT, ACCORDIN GLY GIVEN A RULING THAT , HAVING ESTIMATED THE INCOME ON THE GROSS RECEIPTS, NO SEPARATE ADDITION IS REQUIRED TO BE MADE. THE TRIBUNAL ALSO TAKEN THE SUPPORT OF THE ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT OF ANDHRA PRADESH IN THE CASE OF INDWELL CO NSTRUCTIONS VS. CIT [232 ITR 776] . 5. AGGRIEVED BY THE ORDER OF THE TRIBUNAL, THE REVENUE HAS FILED MISCELLANEOUS APPLICATION STATING THAT THE ITAT HAS TO CONSIDER THE CASH DEPOSITS AS A SEPARATE ADDITION OVER AND ABOVE THE CONTRACT RECEIPTS . THE REVENU E IN ITS APPLICATION STATED THA T THE CASH DEPOSITS WERE NOT RELATED TO THE INCOME DECLARED IN GROSS RECEIPTS IN THE P&L ACCOUNT AS THE NEXUS IS NOT PROVED BY FURNISHING ANY EVIDENCE. DURING THE HEARING, T HE LD.DR ARGUED THAT CASH DEPOSITS REQUIRED TO BE SEP ARATELY ASSESSED SINCE THEY DO NOT FORM PART OF BUSINESS RECEIPTS AND ARGUED THAT NOT CONSIDERING THE CASH DEPOSITS SEPARATELY IS A MISTAKE WHICH REQUIRE RECTIFICATION U/S 254 (2) OF I.T.ACT. 6. ON THE OTHER HAND, THE LD.AR SUPPORTED THE ORDERS OF THE ITAT AND SUBMITTED THAT THERE IS NO MISTAKE IN THE ORDER OF THE ITAT. THE LD.AR FURTHER ARGUED THAT THE ISSUES RAISED BY THE REVENUE IN ITS MISCELLANEOUS APPLICATION RELAT ING TO RECEIPTS AS PER 26AS , VIOLATION OF PROVISION OF SECTION 40 A (3) AND THE 4 M.A.NO.12/VIZ/2018 SHRI KARUTURI RAVEENDRA, KAKINDADA BALANCE SHEET ITEMS DISCUSSED IN PARA NO.5 ETC ARE NOT BORN OUT OF EITHER ASSESSMENT ORDER OR THE LD.CIT(A) ORDER. IT WAS FURTHER SUBMITTED THAT THE L D.DR ALSO DID MAKE ANY ARGUMENT WITH REGARD TO THE ISSU ES DISCUSSED IN THE MISCELLANEOUS APPLICATION. THE LD.AR FURTHER AR G UED THAT THE CONTENTS OF THE MISCELLANEOUS APPLICATION SHOWS THAT THE DEPARTMENT INTENDS TO REVIEW T H E ORDER BY INCORPORATING THE NEW ISSUE S AND FRESH FACTS WHICH WERE NOT DISCUSSED IN THE ASSESSMENT ORDER DID NOT ARGUE DURING THE APPEAL HEARING . THE LD.AR SUBMITTED THAT THE HONBLE ITAT HAS CONSIDERED THE CASH DEPOSIT MADE IN THE BANK ACCOUNT AND ESTIMATION MADE BY THE AO AND TAKEN CONSCIOUS DECISION ON APPRECIATION OF FACTSTHAT THE GROSS RECEIPT OF RS.3,96,17,024/ - INCLUDE CASH DEPOSITS. FURTHE R THE AO HAS NOT MADE THE ADDITION BY INVOKING ANY OF THE SECTIONS OF THE ACT AND DID NOT MAKE OUT A CASE OF CASH DEPOSIT AS SEPARATE SOURCE OF INCOME OR OVER AND ABOVE THE GROSS RECEIPTS OF RS.3,96,17, 0 24/ - BY RECONCILING THE GROSS RECEIPTS WITH THE DEPOSITS AND WITHDRAWALS MADE IN THE BANK ACCOUNT. HENCE , SUBMITTED THAT THERE IS NO MISTAKE WHICH REQUIRE MO DIFICATION OF ORDER U/S 254(2) AND ARGUED THAT UNDER SECTION 254(2) REVIEW OF THE ORD ER IS NOT PERMISSIBLE. 7 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. AS PER PARA NO.4 OF THE ASSESSMENT ORDER, THE GROSS RECEIPTS RECEIVED FROM THE GAYATRI PROJECTS LIMITED AND PROGRESSIVE CONSTRUCTION LIMITED WERE 5 M.A.NO.12/VIZ/2018 SHRI KARUTURI RAVEENDRA, KAKINDADA RS.3,32, 64,044/ - AGAINST WHICH THE AO HAS CONSIDERED THE GROSS RECEIPTS OF RS.3,96,17,024/ - FOR ESTIMATION OF INCOME AND THE DIFFERENCE AMOUNT OF RS.63,52,980/ - WAS NOT R ECONCILED BY THE AO, INSPITE OF THE FACT THAT THE ASSESSEE HAS STATED BEFORE THE AO THAT THE D IFFERENCE RECEIPTS REPRESENT THE BUSINESS RECEIPTS RECEIVED ON ACCOUNT OF SUPPLY OF MATERIALS AND LABOUR ON WHICH THE OTHER PARTIES DID NOT DEDUCT TDS. THOUGH THE REVENUE STATED IN M.A. THAT THE CONTRACT RECEIPTS AS PER 26A S WERE RS. 3,39,70 , 344 / - AND THE ITAT CONSIDERED THE SAME AT RS.3,32,64,044/ - THIS CONTENTION WAS NOT SUPPORTED BY THE ASSESSMENT ORDER AND NOT RAISED DURING THE APPEAL HEARING. THOUGH THE LD.AO MADE THE ADDITION OF RS.73,36,678/ - ON ACCOUNT OF CASH DEPOSITS IN THE BANK ACCO UNT, THE AO DID NOT SPECIFY UNDER WHICH SECTION OF THE I NCOME T AX A CT T HE ADDITION WAS MADE. THE AO SIMPLY MADE THE ADDITION WITHOUT INVOKING ANY OF THE PROVISIONS OF THE IT ACT. THE ASSESSEE CONTEN DED BEFORE THE AO THAT THE DIFFERENCE REPRESENT S THE CASH RECEIPTS OF THE SAME BUSINESS BUT THE AO WITHOUT RECONCILING THE DEPOSITS MADE IN THE BANK ACCOUNT BRUSHED ASIDE THE ARGUMENT OF THE ASSESSEE. ALL THE BANK ACCOUNTS REFERRED BY THE AO IN HIS ORDER ARE THE DISCLOSED BANK ACCOUNTS AND IF THE AO IS OF THE VIE W THAT CERTAIN CASH DEPOSITS WERE UNEXPLAINED, IT IS THE DUTY OF THE AO T O UNDERTAKE THE EXERCISE OF THE GROSS RECEIPTS, THE TOTAL DEPOSITS MADE IN THE BANK ACCOUNT AND THE WITHDRAWALS MADE FROM THE BANK ACCOUNT WHICH WERE USED FOR REDEPOSIT AND WORK OUT THE EXCESS 6 M.A.NO.12/VIZ/2018 SHRI KARUTURI RAVEENDRA, KAKINDADA RECEIPTS IF ANY TO ESTABLISH THE UNDISCLOSED DEPOSITS. NO SUCH EXERCISE WAS UNDER TAKEN BY THE AO AND FAILED TO ESTABLISH THAT THE CASH DEPOSITS REPRESENT UNEXPLAINED SOURCE OF THE INCOME OF THE ASSESSEE. THE ITAT HAS CONSIDERED THE ENTIRE MATERIAL PLACED BEFORE IT, THE ARGUMENTS OF THE LD. DR AND THE LD. C OUNSEL . I N THE ABSENCE OF RECONCILIATION OF THE RECEIPTS , LACK OF EVIDENCE RECORD TO ESTABLISH THAT THE CASH DEPOSITS REFERRED ABOVE ARE FROM SEPARATE SOU RCE OR FROM UNEXPLAINED SOURCES, HELD THAT THE GROSS RECEIPTS OF RS.3,96,17,024/ - ARE INCLUSIVE OF CASH DEPOSIT S MADE IN THE BANK ACCOUNT AND ACCORDINGLY HELD THAT NO SEPARATE ADDITION IS REQUIRED ON ACCOUNT OF CASH DEPOSITS. THE ENTIRE FACTS AND THE ISSUES RAISED IN THE ASSESSMENT ORDER AS WELL AS THE LD.CIT(A) AND THE ARGUMENTS MADE BY THE LD.DR AND THE AR WER E CONSIDERED BY THE ITAT WHILE SETTING ASIDE THE ORDERS OF TH E LOWER AUTHORITIES AND DELETING THE ADDITION OF RS. 73,36,678/ - . THE ITAT TAKEN THE SUPPORT OF THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF INDWELL CONSTRUCTIONS (SUPRA) ALSO CORRECTLY . THEREFORE, THERE IS NO MISTAKE WHICH REQUIRE RECTIFICATION U/S 254(2) OF I.T.ACT, HENCE THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS DISMISSED. 8 . THE AO MADE CERTAIN ARGUMENTS AND DISCUSSED SOME ISSU E S IN MISCELLANEOUS APPLICATION WHICH ARE BEYOND THE SCOPE OF THE PROVISION OF SECTION 254(2) OF THE ACT. THE SUBMISSION MADE BY THE AO IN HIS PETITION WOULD RESULT 7 M.A.NO.12/VIZ/2018 SHRI KARUTURI RAVEENDRA, KAKINDADA INTO REVIEW OF THE ORDER AND THE SAME IS NOT PERMISSIBLE U/S 254(2) OF I.T.ACT. ACCORDINGLY , WE D E CLINE TO ENTERTAIN TH E OTHER ISSUES OR ARGUMENTS RAISED IN THE PETITION. 8 . IN THE RESULT, MISCELLANEOUS APPLICATION OF THE REVENUE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 13 TH APR , 20 1 8 . SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 13 .0 4 .2018 L.RAMA, SPS 8 M.A.NO.12/VIZ/2018 SHRI KARUTURI RAVEENDRA, KAKINDADA / COPY OF THE ORDER FORWARDED TO: - 1. / THE APPELLANT KARUTURI RAVEENDRA, C/O J.S.SUNDARAM& CO., D.NO.10 - 4 - 56/3, SESHAGIRIRAO STREET, RAMARAO PET, KAKINADA 2 . / THE RESPONDENT INCOME TAX OFFICER , WARD - 2 (1), RAJAHMUNDRY 3 . THE COMMISSIONER OF INCOME TAX - 2, VISAKHAPATNAM 4. THE COMMISSIONER OF INCOME TAX (APPEALS), VISAKHAPATNAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM