INCOME TAX OFFICER, WARD-4(3), HYDERABAD vs. VENUGOPAL REDDY CHINTA REDDY, HYDERABAD

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ITA 713/HYD/2018Status: DisposedITAT Hyderabad06 May 2021AY 2014-1517 pages

In favour of the Revenue: the Revenue's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the CIT(Appeals) erred in deleting the addition. The assessee failed to discharge the onus of proving the genuineness and creditworthiness of the explanation, as the alleged vendees had disproportionately small landholdings and incomes, and sale deeds were not registered.

What were the facts?

The Assessing Officer treated cash deposits totaling Rs. 1,91,57,420 in the assessee's bank accounts as unexplained. The assessee claimed the source was advances received for the sale of agricultural lands.

What were the issues?

Whether the cash deposits in the bank accounts were genuinely explained as advances for agricultural land sales, and if the assessee discharged the onus of proof regarding the genuineness of the transactions.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 68

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, HYDERABAD ‘ B ‘ BENCH, HYDERABAD.

Before: SHRI A. MOHAN ALANKAMONY & SHRI S.S. GODARAShri Chinta Reddy Venugopal Reddy,

For Appellant: Shri Rohit Majumdar (D.R)

O R D E R Per Shri S.S. Godara, J.M. : This Revenue’s appeal for Asst. Year 2014-15 arises from the Commissioner of Income Tax (Appeals)-1, Hyderabad’s order dt.20.12.2017 passed in case No.0210/CIT(A)- 1/Hyd/2016-17/2017-18 in proceedings under Section 143(3) of Income Tax Act, 1961 (‘the Act’).

Heard both the parties. Case file perused.

2.

We notice from a perusal of Revenue’s pleadings at the outset that the sole substantive grievance seeks to revive the Assessing Officer's action treating the alleged cash deposit in assessee's savings account maintained with M/s. Vijaya Bank and State Bank of Hyderabad to the tune of Rs.97,70,700 and Rs.93,86,720; totaling respectively to Rs.1,91,57,420 as unexplained. The CIT(Appeals) lower appellate order has deleted the impugned addition as under :

3.

We have given our thoughtful consideration to rival contentions against and in support of CIT(Appeals) above extracted findings. Learned departmental representative vehemently reiterated the Revenue’s pleadings that the Assessing Officer has rightly made the impugned addition in assessee's hands. He took us to the detailed discussion in assessment order dt.29.12.2016 to this effect making it clear that the assessee had claimed the source of the cash and time deposits out of advances received for sale of the agricultural lands in the relevant previous year. He has produced the so called agreement(s) of sale on a plain paper involving 6 farmers / vendors from Eeeturu village, Thirumalagiri Mandal, Nalgonda District. It is not in dispute as per the assessment order itself

Sri Moola Prasad and Chillara Chandramouli only got recorded their statements on 8.12.2015 and thereafter, the assessee also submitted affidavit(s) with aadhar card(s) and confirmations. The Assessing Officer observed in the light of each and every party, agricultural land holding, annual income and amount of advance claimed that the same lacked genuineness / credit worthiness and therefore he proceeded to make 68 addition which stands deleted in the CIT(Appeals) order.

4.

Learned authorised representative contended in the light of CIT(Appeals) detailed discussion that cash transaction of sale / purchases of agriculture land already stand confirmed by way of affidavit(s) and statement(s) recorded before the Assessing Officer. On a querry to the learned authorised representative to know as to whether the assessee has transferred the lands in question to the said vendees or not, the reply received is in negative only. Meaning thereby that the said 6 vendees had land holdings measuring NIL, 4 acres, 8 acres, 1 acre(wife), 4.2 acres and 5.39 acres as against the advances of Rs.29.50 lakhs;

Rs.35 lakhs; Rs.39 lakhs; Rs.25 lakhs; Rs.32 lakhs and Rs.42 lakhs respectively. All this detailed exercise carried out by the Assessing Officer sufficiently indicates that the assessee has failed to discharge his onus of genuineness / credit worthiness of the explanation rendered before the lower authorities. This is for the reason that even his own two vendees who had appeared before the Assessing Officer has made it clear that their annual income was around Rs.5 lakhs each only as against alleged advance of Rs.32 lakhs and Rs.42 lakhs; respectively.

Hon'ble apex court land mark decision in Sumati Dayal Vs. CIT (1995) 214 ITR 801 (SC) and CIT Vs. Durga Prasad More (1971)

82 ITR 540 (SC) held long back that any explanation under the provisions of the Act has to be appreciated in light of human probability after removing all blinkers. When we apply the same to his facts and circumstances of the instant case, it is very much apparent that even a single penny has not come via banking channel followed by the grossly disproportionate source(s) of the so called vendees who have not even bothered to get six corresponding sale deeds registered even after a time period of almost a decade. We therefore are of the opinion in view of all the facts and circumstances narrated in the preceding paragraphs that the CIT(Appeals) had erred in law & on facts in deleting the impugned addition of Rs.1,81,57,440 income from undisclosed sources. The same stands restored therefore.

5.

No other argument has been raised before us.

6.

This Revenue’s appeal is allowed in above terms.

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