Income Tax Appellate Tribunal - Bangalore
Mr.Jadeppa Chandra Sekhar Gadwal , ... vs The Income Tax Officer Ward-2, Raichur , ... on 1 June, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
"SMC-C" BENCH : BANGALORE
BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER
ITA No. 483/Bang/2018
Assessment Year :2014-15
Shri Jadeppa Chandra
Sekhar Gadwal,
The Income Tax Officer,
# 5-6-50, Netaji Road,
Vs. Ward - 2,
Netaji Nagar,
Raichur.
Raichur.
PAN: ALWPG7030K
APPELLANT RESPONDENT
Appellant by : Shri Suresh Muthukrishnan, CA
Respondent by : Smt. Padma Meenakshi, JCIT (DR)
Date of hearing : 09.05.2018
Date of Pronouncement : 01.06.2018
ORDER
Per Shri A.K. Garodia, Accountant Member
This appeal is filed by theassessee which is directed against the order of ld. CIT (A), Gulbarga dated 18.12.2017 for Assessment Year 2014-15.
2. The grounds raised by the assessee are as under.
"1. The order of the learned A 0 in so far as it is against the appellant is opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.
2. The appellant denies himself liable to be assessed on a total income of Rs.13,06,900/- determined by the learned A.O. as against the reported total taxable income of Rs.2,16,900/- by the appellant under the facts and circumstances of the case.
3. Without prejudice to the above, the learned A.O. is not justified in making an addition of a sum of Rs.10,90,000/- being the alleged cash deposits made in savings bank account under the facts and in the circumstances of the appellant's case
4. Without prejudice to the above, the learned A.O. is not justified in treating the entire deposits made in the Bank account as the ITA No. 483/Bang/2018 Page 2 of 4 unexplained investments u/s.69 of the Act., under the facts and circumstances of the appellant's case.
5. Without prejudice to the above, the learned A.O has erred in not appreciating the fact that the gifts were received by the appellant on the occasion of his marriage from his father in law who is an agriculturist and his identity is not in doubt.
6. Without prejudice to the above, the learned CIT[A] has erred in not appreciating the evidence filed in support of the agricultural income of the Donors and has made the addition on a suspicion of the source of source, which is contrary to law.
7. Without prejudice to the above, the learned A.O has erred in treating the entire business receipts of the appellant as Income under the facts and circumstances of the case.
8. Without prejudice to the above, the learned A.O has erred in not giving credit to the Income earned by the Appellant during the financial year, which sum has been offered to tax.
9. Without prejudice to the above, the learned A.O. grossly erred in applying the tax rate at 30% MMR u/s.115B on the entire deposits made in the Bank account as the unexplained investments u/s.69 of the Act., under the facts and circumstances of the appellant's case
10. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies himself liable to be charged to interest u/s 234A and 234B of the Act, which under the facts and in the circumstances of the appellant's case deserves to be cancelled.
11. In law and as per the facts and in the circumstances of the appellant's case the learned AO had erred in initiating penalty u/s. 271(1)(c) of the IT Act,1961.
12. Wherefore the Appellant prays that this Hon'ble Tribunal be pleased to allow the appeal and set-aside the orders passed by the authorities below to the extent they are against the appellant and pass such other order as this Hon'ble Tribunal deem fit and proper on the facts and circumstances of the case in the interest of justice and equity."
3. It was submitted by ld. AR of assessee that the assessee was married on 29.05.2013 and the certificate of Marriage is available on page 20 of paper book. He also submitted that as per the affidavit of Shri Eshwarappa Hayyal father-in-law of the assessee, it can be seen that a gift of Rs. 3 Lakhs was ITA No. 483/Bang/2018 Page 3 of 4 given by the parents-in-law of the assessee in cash and hence, to this extent, the cash deposit in bank account should be accepted as properly explained. It is also submitted that out of cash deposit of Rs. 5,50,000/- on 06.11.2013 as per bank statement available on page no. 3 of the paper book, Rs. 2,50,000/- is out of the assessee's income for the present year and savings out of the earlier years. In this regard, he submitted that in the present year, as per the return of income filed by the assessee, the assessee has shown an income of Rs. 2,16,900/- and it is noted by the AO that the assessee is deriving income from other sources. He submitted that when the assessee is having income of Rs. 2,16,900/- in the present year, it cannot be said that the assessee was not having any income in the earlier years and hence, having savings of Rs. 2.50 Lakhs cannot be ruled out. Regarding other deposits of Rs. 1,10,000/- on 11.11.2013, Rs. 1,30,000/- on 11.12.2013 and Rs. 3 Lakhs on 16.12.2013 total Rs. 5,40,000/-, it was submitted that these amounts were deposited by the parties from whom the assessee was earning income as commission. It was submitted that these parties deposit money in the bank account of the assessee at the place where the parties were residing and the assessee used to withdraw the amount from his bank account on the same day and give back to these persons when they visit the assessee's place on the same day at Raichur so that these persons were saved from the risk of carrying cash from their places to Raichur and hence, these cash deposits should also be accepted as explained. The ld. DR of revenue supported the order of AO and CIT(A).
4. I have considered the rival submissions. I find that out of total cash deposit in Bank of Rs. 10.90 Lakhs, the AO has also bifurcated the same in two parts. Regarding Rs. 5.50 Lakhs it is the explanation of the assessee that the same is out of past savings, current years income and gift of Rs. 3 Lakhs. In view of this fact that the assessee has declared income of Rs. 2.16 Lakhs in the present year and the assessee is submitting the evidence regarding the gift from his in-laws along with the explanation of their sources being out of their agricultural income, this much cash deposit is acceptable as out of past savings, current years income and out of gift. I hold that source of this cash ITA No. 483/Bang/2018 Page 4 of 4 deposit of Rs. 5.50 lacs is properly explained. Regarding the remaining three cash deposit of Rs. 1.10 Lakhs, Rs. 1.30 Lakhs and Rs. 3 Lakhs (Total Rs. 5.40 lacs) which were deposited on the same date and withdrawn by way of cash withdrawal on the same date, the explanation of the assessee is this that these three deposits were made by assessee's clients from whom the assessee is earning commission income and assessee is withdrawing the cash on the same date and returned to these persons in order to save them from the risk of carrying cash from their place to Raichur i.e. assessee's place. In the facts of the present case, this explanation does not appear to be unreasonable and hence, I hold that these cash deposits of Rs. 5.40 Lakhs are also properly explained and hence, I delete the entire addition of Rs. 10.90 Lakhs.
5. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on the date mentioned on the caption page.
Sd/-
(ARUN KUMAR GARODIA) Accountant Member Bangalore, Dated, the 01st June, 2018.
/MS/ Copy to:
1. Appellant 4. CIT(A)
2. Respondent 5. DR, ITAT, Bangalore
3. CIT 6. Guard file By order Senior Private Secretary, Income Tax Appellate Tribunal, Bangalore.