Melody Multimedia Pvt. Ltd. V. Asst. Commissioner of Income Tax, Circle-13 (1), Hyderabad

ITTA/457/2010

AI Insights

The case involves Melody Multimedia Pvt. Ltd., the appellant, contesting an order by the Assistant Commissioner of Income Tax, Circle-13 (1), Hyderabad, regarding an unexplained cash deposit of Rs.2,19,960 in the company's bank account. The Income Tax Appellate Tribunal upheld the addition of this amount to the assessee's income, as the company could not satisfactorily explain the source of the deposit. The High Court, upon appeal, agreed with the Tribunal's decision, emphasizing that the cash book was not produced for verification at the lower levels and that the source of the cash remained unexplained.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 797118 (HC-HYDERABAD)
• Appeal Type: Others
• Pronouncement Date: 09-08-2010
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: A V KRISHNA KAUNDINYA
• Keywords: Cash deposit; Income Tax; Section 68; Undisclosed income
• Section: 68; 260A

Judgement Text

"THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN ITTA No.457 of 2010 Dated:09.08.2010 Between: Melody Multimedia Pvt.Ltd. …Appellant and Asst.Commissioner of Income Tax, Circle-13 (1), Hyderabad. …Respondent THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN ITTA No.457 of 2010 JUDGMENT: (per Hon’ble Sri Justice Ramesh Ranganathan) This appeal under Section 260A of the Income Tax Act, 1961 (the Act) is preferred against the order of the Income Tax Appellate Tribunal, Hyderabad Bench, in ITA No.700/Hyd/2005, dated 05.06.2009 to the limited extent, the Tribunal upheld the order of the Commissioner of Income Tax (Appeals), with regards Rs.2,19,960/-, which was credited to the assessee’s bank account. The Tribunal, in the order under appeal, notes that, the said amount of Rs.2,19,960/- was found to be credited in the assessee’s account with Global Trust Bank; since the assessee could not explain this deposit, the Assessing Officer had added the same to the total income under Section 68 of the Act; before the Commissioner of Income Tax (Appeals) it was contended that the said amount was deposited out of the cash balance of Rs.2,19,960/-, which was reflected in the cash book; the Commissioner of Income Tax (Appeals) did not accept the contention on the ground that the cash book was not produced for verification and, further, there was no explanation for the source of the cash in the cash book. The Tribunal examined the rival contentions urged before it, both on behalf of the assessee and the revenue, and observed that though the assessee’s Counsel had drawn their attention to page 3 of the paper book to contend that the cash book was produced for verification, it did not find any clear indication that the cash book was indeed produced before either of the lower authorities; further, there was no reply to the contention of the Commissioner of Income Tax (Appeals) regarding the source of cash in the cash book remaining unexplained and, in such circumstances, the Tribunal did not consider it worthwhile to remit the matter back for verification more so, as the matter was quite old, and the time and energy that may be consumed further may be disproportionate to the amount involved. Before us, Sri A.V.Krishna Kaundinya, learned Counsel for the appellant-assessee, contends that, since the cash book was produced before the Tribunal for verification, the Tribunal ought to have remanded the matter back to the Assessing Authority to cause verification of the cash book in order to ascertain whether or not the source of cash balance of Rs.2,19,960/- was reflected therein. Learned Counsel would submit that the Tribunal, being the final fact finding authority, ought to have either examined the cash book itself or ought to have remanded the matter back to the Assessing Officer for verification. We must express our inability to interfere with the order of the Tribunal as the finding recorded by it, that the appellant-assessee did not furnish any reply to the contention of the Commissioner of Income Tax (Appeals) regarding the source of cash in the cash book remaining unexplained, can neither be said to be perverse or to be based on no evidence. Even in the grounds of appeal filed in the appeal before us the source of cash, for the cash balance in the cash book for Rs.2,19,960/-, has not been explained. In the absence of the source of cash being explained, the authorities were justified in treating it as undisclosed income, and bringing the same to the tax under Section 68 of the Act. No question of law arises for consideration in this appeal. The appeal fails and is, accordingly, dismissed. __________________ (V.V.S.RAO, J) ______________________________ (RAMESH RANGANATHAN, J) 09.08.2010 vs "