Income Tax Appellate Tribunal - Hyderabad
Ramchander Krishnaiyer, Hyderabad vs Income Tax Officer, Ward-6(4) , ... on 28 April, 2021
ITA No 52 of 2020 Ramchander Krishnaiyer Hyderabad
IN THE INCOME TAX APPELLATE TRIBUNAL
Hyderabad SMC Bench, Hyderabad
(Through Video Conferencing)
Before Smt. P. Madhavi Devi, Judicial Member
ITA No.52/Hyd/2020
Assessment Year: 2009-10
Sri Ramchand er Krishnaiyer Vs. Income Tax Officer
Hyderabad Ward 6(4)
PAN:ADFPK5165L Hyderabad
(Appellant) (Respondent)
Assessee by: Sri A.V. Raghuram
Revenue by: Smt. Kanika Agarwal,DR
Date of hearing: 08/04/2021
Date of pronouncement: 28/04/2021
ORDER
This is assessee's appeal for the A.Y 2009-10 against the order of the CIT (A)-6, Hyderabad, dated 30.08.2019. The assessee raised the following grounds of appeal:
"1. The order of the learned CIT(A) is not only erroneous both on facts and in law but is perverse.
2. The order of the learned CIT(A) is without jurisdiction, as the appellant's case is transferred from Range 6 to Range 12 by the time the appeal is heard.
3. The learned CIT(A) having called for remand report erred in deciding the appeal without receiving the remand report or might have anti dated the order after receiving the remand report from the AO of Ward 12(2), as the AO has initiated remand proceedings vide letter dated 14-10-2019 addressed to the assessee and collected information.
4. The learned CIT(A) failed to appreciate that the AO in the earlier assessment which is re-opened ujs.148 has accepted the advances after verifying the sources and when advances is received back no more evidence than confirmation from the recipient of advance is enough to prove the credit and thereby erred in confirming the action of the AO in making addition of Rs.16,30,259.Page 1 of 6
ITA No 52 of 2020 Ramchander Krishnaiyer Hyderabad
5. The learned CIT(A) erred in confirming the finding of the AO about claim of deduction u/s.80GG of an amount of Rs.24,000 without waiting for remand report. (Tax effect - Rs.5,11,166) For these and other grounds that may be urged, it is prayed that the Hon'ble Tribunal may be pleased to allow the appeal".
2. As regards Ground No.5, the learned Counsel for the assessee submitted that the assessee has filed additional evidence in support of the deduction u/s 80GG of the Act and prayed for admission of the additional evidence and reconsideration of the issue in accordance with law. The learned DR also had no objection to the same. Therefore, I admit the additional evidence filed by the assessee and remand the issue to the file of the Assessing Officer for denovo reconsideration in accordance with law.
3. As regards Ground No.4, brief facts are that the assessee individual, engaged in the business of running an Automobile Workshop, filed his return of income for the A.Y 2009- 10 on 30.07.2009 admitting a total income of Rs.1,98,510/-. During the assessment proceedings u/s 143(3), the Assessing Officer required the assessee to file information including copies of the Bank A/c statements for the financial year 2009-10 along with details of the transactions and the sources for the credits therein. The assessee furnished the information called for. On perusal of the same, the Assessing Officer observed that the assessee has made cash deposits to the extent of Rs.14,86,061/- into his Bank A/c maintained with State Bank of Hyderabad. The Assessing Officer obtained the details of the Bank A/c from SBH, Raidurg Branch u/s 133(6) of the Act and also observed that the assessee has two Accounts with the same Branch viz. one Savings Bank A/C in his name and one current A/C in the name of his proprietary concern Sri Lakshmi Motors. The assessee was Page 2 of 6 ITA No 52 of 2020 Ramchander Krishnaiyer Hyderabad therefore, asked to explain the cash deposits into these A/Cs along with necessary and sufficient evidence. In response, the assessee submitted 2 cash books i.e. on in the name of proprietary concern explaining the cash deposits in his current A/C and another in his individual name. On verification of the said cash books, the Assessing Officer found that the sources for the cash deposits in his current A/C are shown to be mainly from his business receipts, whereas the sources for the cash deposits in his Savings Bank A/c is shown to be an opening balance of Rs.4,19,302/-, withdrawals from the Bank A/c and the receipt of Advance of Rs.31,86,000/- to Smt. G. Surekha given in the financial year 2007-08 for purchase of plot which is received back during the relevant financial year. The Assessing Officer further checked the cash book and found that the opening balance was of Rs.94,000/- only and not Rs.4,19,302/- as claimed by the assessee. He therefore, made the additions as unexplained cash deposits.
4. With regard to the amount which is allegedly received back from Smt. G. Surekha, he observed that the said amount was paid in cash as well as through cheques i.e. Rs.14.00 lakhs and the balance in the form of cash on various dates. When the vendee Smt. G. Surekha was summoned u/s 131 of the I.T. Act, her husband Sri G. Ratna Rao appeared and submitted that Smt. G. Surekha does not have any Bank A/c and that the cheques of Rs.8.00 lakhs and 6.00 lakhs were not received directly by her as she requested the assessee to give the said cheques in the name of Sri Mohd Abdul Samad (a friend of her husband) as he was in urgent need of money and that Sri Mohd Abdul Samad had returned the amount back to her in cash after selling his land, which she returned back to the assessee. The Assessing Officer, Page 3 of 6 ITA No 52 of 2020 Ramchander Krishnaiyer Hyderabad however, held that the assessee could not conclusively prove the sources of Rs.14.00 lakhs given by him by way of cheques. Therefore, he treated the negative balance of cash of Rs.19,55,661/- as unexplained cash credit and brought it to tax. Aggrieved, the assessee preferred an appeal before the CIT (A) who granted partial relief to the assessee by holding that the closing cash balance of the earlier year cannot be tinkered with by the Assessing Officer and that the closing balance of Rs.4,19,302/- should be accepted as opening balance of this financial year. Thus, he granted relief of Rs.3,25,302/-
5. As regards the cash receipts of Rs.31,86,300/- from Smt. G. Surekha, the CIT (A) held that the assessee has failed to prove that there was any agreement of sale with Smt. G. Surekha and that she repaid the amount to the assessee.
6. As regards the cash withdrawals from the Bank not being treated as sources for cash deposits, the CIT (A) confirmed the assessment order and the assessee in in second appeal before us.
7. The learned Counsel for the assessee submitted that the advances were given by the assessee to Smt. G. Surekha in the earlier assessment for the A.Y 2008-09 which was reopened u/s 148 of the Act and the Assessing Officer has accepted the sources for the advances which are received back during the A.Y before us. He submitted that the confirmation letter of Smt. G. Surekha was furnished to prove that the amount was paid and received back by the assessee and therefore, the Assessing Officer and the CIT (A) have erred in making the addition of Page 4 of 6 ITA No 52 of 2020 Ramchander Krishnaiyer Hyderabad Rs.16,30,250/-. The learned Counsel for the assessee has drawn my attention to the cash book of the assessee for the relevant period and also the assessment order for A.Y 2008-09 in support of his contention.
8. The learned DR however, submitted that there was no evidence that Smt. G. Surekha existed and that the identity of the person who is alleged to have received advance of Rs.14.00 lakhs by way of cheques also is not proved and therefore, there is no reasonable explanation given by the assessee with regard to the receipt of this amount.
9. Having regard to the rival contentions and the material on record, I find that the unexplained cash credit to the extent of Rs.16.00 lakhs was needed to be explained by the assessee. As far as the receipt of return of advance by Smt. G. Surekha is concerned, when summons were issued to her, her husband Shri G. Ratna Rao appeared and submitted the explanation. Therefore, the identity of Smt. G. Surekha is established. As far as the explanation given that the cheques were given in the name of her husband's friend Mr.Mohd Abdul Samad is concerned, I find that it is supported by the Bank statement. It is also established that Smt.G.Surekha is not in any way related to the assessee. Therefore, the confirmation given by Smt. Surekha is to be examined and considered on its own legs. It is to be noted that the assessee has not filed the confirmation of Mr Mohd Abdul Samad, but the cheques are undisputedly issued in the name of Mr.Abdul Samad. In the earlier A.Y, the assessee has explained the sources for the advances given for purchase of the property and the said assessment was reopened and the sources were accepted by the Page 5 of 6 ITA No 52 of 2020 Ramchander Krishnaiyer Hyderabad Assessing Officer. Therefore, the transaction of giving advance by the assessee is proved. What is left to be proved is that the said amount has been returned by Smt. G. Surekha. All the cash deposits to the extent of Rs.14.00 lakhs are allegedly made by Smt. G. Surekha. When the Assessing Officer for the A.Y 2008-09 has accepted that the assessee has given advance for purchase of a property and since there is no purchase of property during the relevant A.Y, the circumstantial evidence is in favour of the assessee that he has received back the advance paid in the earlier A.Y. Therefore, I am of the opinion that the sources for the extent of Rs.14.00 lakhs is to be deemed as explained by the assessee. With regard to the other balance i.e. cash withdrawals which were utilized for other purposes than the deposits into the Bank, I do not find any reason to interfere with the order of the CIT (A). The addition of such an account is accordingly confirmed.
10. In the result, assessee's appeal is partly allowed.
Order pronounced in the Open Court on 28th April, 2021.
Sd/-
(P. MADHAVI DEVI) JUDICIAL MEMBER Hyderabad, dated 28th April, 2021.
Vinodan/sps Copy to:
S.No Addresses
1 Sri K. Ramchander, 13-6-434/C/13 and 14 Marutinagar, Pillar No.84,
Langar House, Hyderabad 500008
2 Income Tax Officer Ward 6(4) presently with Income Tax Officer Ward
12(2) Hyderabad
3 CIT (A)-6, Hyderabad
4 Pr. CIT -6, Hyderabad
5 DR, ITAT Hyderabad Benches
6 Guard File
By Order
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