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Income Tax Appellate Tribunal - Hyderabad

B. Janardhan Reddy, Hyderabad, ... vs Dcit, Circle-6(1), Hyderabad, ... on 8 December, 2017

           IN THE INCOME TAX APPELLATE TRIBUNAL
              HYDERABAD BENCH 'A', HYDERABAD

      BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER
     AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER

                         ITA No. 663/Hyd/2017
                       Assessment Year: 2008-09

B. Janardhan Reddy,              vs.     Dy. Commissioner of
Hyderabad.                               Income-tax, Circle - 6(1)
                                         Hyd.
PAN -
           Appellant                              Respondent

                   Assessee by: Sri A.V. Raghuram
                    Revenue by: Smt. Suman Malik

                Date of hearing: 23/11/2017
        Date of pronouncement: 08/12/2017

                               O RDE R

PER S. RIFAUR RAHMAN, AM:

This appeal is filed by the assessee against the order of CIT(A) - 9, Hyderabad dated 30/12/2016 relates to the AY 2008-09.

2. Briefly the facts of the case are that the assessee filed his return of income for the AY 2008-09 on 18/07/2008 declaring total income of Rs. 8,62,290/- and agriculture income at Rs. 49,100/-. Assessment u/s 143(3) was completed determining total income of Rs. 15,87,290/-. On appeal CIT (A) dismissed the appeal. On further appeal, Hon'ble ITAT vide order dt. 28.02.2013 in ITA No. 1514/Hyd/10 gave a relief of Rs. 50,000/- and remitted the issue of unexplained investment of u/s 69A of Rs. 5,00,000/- to the file of Assessing Officer whereas the remaining additions were confirmed.

B. Janardhan Reddy, Hyd.

2.1 During assessment proceedings taken up in consequence of ITAT order, Assessing Officer again assessed as income of Rs. 5 lakhs on account of currency notes of Rs. 1000/- denomination found during the search, which are serially numbered as assessee could not furnish any further explanation.

3. Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A).

4. During the appellate proceedings, assessee submitted that cash found during search is out of accumulation of cash withdrawals of earlier period and the same is supported by the cash available in the books. These notes were exchanged with new currency which are serially numbered.

5. The CIT(A) after considering the submissions of the assessee, confirmed the addition made by the AO by observing as under:

5. I have considered the arguments of the assessee and have gone through the original assessment order and the present assessment order under appeal. The Hon'ble ITAT has set aside the issue of unexplained money to the file of Assessing Officer to frame the assessment afresh after considering the arguments of the assessee. During the original assessment proceedings, the assessee explained that cash is available with him out of withdrawal of last two years.

Assessing Officer therefore held that the serially numbered new 1000/- notes cannot be out of old withdrawals. Further, as per cash book cash on hand is not 5 lakhs but less than that. The assessee did not claim in the original assessment proceedings that the cash available is out of exchange of old currency if any. This argument is brought forward now and there is no evidence furnished to substantiate this new claim even during the assessment proceeding or appellate proceedings. If the claim of the assessee is correct then the money in serial numbered notes should have come 3 I.T.A. No. 663/Hyd/2017 B. Janardhan Reddy, Hyd.

from a single source the details of which the assessee is not in a position to furnish. Therefore, the argument of the assessee is treated to be only an afterthought for which there is no cogent evidence available. In view of the above I hold that the Assessing Officer correctly rejected the explanation of the assessee and hence I find no reason to interfere with the order of the Assessing Officer. Therefore, the addition is confirmed."

6. Aggrieved by the order of CIT(A), the assessee is in appeal before us raising the following grounds of appeal:

" 1. The order of the learned CIT(A) confirming the order of the AO is erroneous both on facts and in law in so far as it is prejudicial to the assessee.

2. The learned CIT(A) erred in confirming the addition of Rs.5,00,000/- made as unexplained cash found during search in spite of evidence of availability of cash in cash book though entries in such cash is not proved to be false merely on the ground that the cash is found in serially numbered notes.

3. The learned CIT(A) failed to appreciate that what is legally required is whether there is source for holding such amount of cash and not the form in which it should be available and thereby erred in holding the cash found to be unexplained and confirming the addition.

4. Any other ground that may be urged at the time of hearing."

7. Considered the rival submissions and perused the material facts on record. While confirming the addition made by the AO, the CIT(A) gave a categorical finding that "the assessee did not claim in the original assessment proceedings that the cash available is out of exchange of old currency if any. This argument is brought forward now and there is no evidence furnished to substantiate this new claim even during the assessment proceeding or appellate proceedings. If the claim of the assessee is correct then the money in serial numbered notes should have come from a single source the details of which the assessee is not in a position to furnish.

B. Janardhan Reddy, Hyd.

Therefore, the argument of the assessee is treated to be only an afterthought for which there is no cogent evidence available.". Even before us, the AR of the assessee failed to substantiate the claim of the assessee by way of corroborative evidence and, hence, we find no infirmity in the order of the CIT(A) in confirming the addition made by the AO. Accordingly, we uphold the order of the CIT(A) and dismiss the grounds raised by the assessee.

8. In the result, appeal of the assessee is dismissed.

Pronounced in the open court on 8 th December, 2017 Sd/- Sd/-

               (P. MADHAVI DEVI)                   (S. RIFAUR RAHMAN)
               JUDICIAL MEMBER                    ACCOUNTANT MEMBER


        Hyderabad, dated 8 th December, 2017

        kv

        Copy forwarded to:

1. Shri B. Janardhan Reddy, C/o S/Shri K. Vasantkumar, AV Raghuram, P. Vinod & M. Neelima Devi, Advocates, 610 Babukhan Estate, Basheerbagh, Hyderabad - 500 001.

2. DCIT, Circle - 6(1), IT Towers, Hyd.

3. CIT(A) - 9, Hyderabad 4 Pr. CIT - 6, Hyderabad 5 The DR, ITAT, Hyderabad Description Date Intls S.No.

1. Draft dictated on Sr.P.S./P.S

2. Draft placed before author Sr.P.S/PS Draft proposed & placed before the JM/AM 3 second Member 4 Draft discussed/approved by second JM/AM Member 5 Approved Draft comes to the Sr.P.S./P.S Sr.P.S./PS

6. Kept for pronouncement on Sr. P.S./P.S. 5 I.T.A. No. 663/Hyd/2017 B. Janardhan Reddy, Hyd.

7. File sent to the Bench Clerk Sr.P.S./P.S 8 Date on which file goes to the Head Clerk 9 Date of Dispatch of order