THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(1), , VISAKHAPATNAM vs. DEVI TATIPARTI, , VISAKHAPATNAM

Ground No.1, 6 and 7 are general in nature which does not require specific adjudication.

Ground No.2 is related to the addition of Rs.42,00,000/- made u/s 69A of the Income Tax Act, 1961 (in short ‘Act’) in respect of cash deposits made during the demonetization period in specified bank notes. During the assessment proceedings, the Assessing Officer (AO) found that the assessee has made cash deposits of Rs.42,00,000/- in South Indiann Bank. The assessee was asked to explain the source, but the assessee has not offered any explanation regarding the source of such money. Therefore, the AO made addition u/s 69A of the Act.

Against which, the assessee went on appeal before the CIT(A)and The assessee explained that bank account of South Indian Bank was disclosed in the books of accounts and the cash deposits were also duly accounted. The Ld.CIT(A) perused the documents filed along with paper book and found that the assessee had deposited Rs.30,00,000/- on 10.11.2016, Rs.9,00,000/- on 16.11.2016 and Rs.3,00,000/- on 30.12.2016

Against which the department is in appeal before this Tribunal. During the appeal hearing, the Ld.DR supported the order of the AO and argued that during the assessment proceedings, the AO has called for the information, but the assessee failed to furnish the information. The Ld.CIT(A) did not call for the remand report though assessee had furnished the information before the CIT(A). Therefore, argued that deleting the addition is bad in law, hence requested to set aside the order of the Ld.CIT(A) and allow the appeal of the revenue.

On the other hand, the Ld.AR vehemently supported the order of the Ld.CIT(A).

We have heard both the parties and perused the material placed on record. The assessee has furnished the paper book on 21.06.2021. In paper book, the assessee has furnished the copy of cash book as well as statement of South Indian Bank Ltd. along with the paper book. The department did not place any material to show that the entries made in the cash book furnished along with paper book were incorrect or defective. Though the assessee has filed the paper book, the department did not take any steps to verify the correctness of the information in the paper book. The assessee furnished the entire details before the CIT(A) and the Ld.CIT(A) verified the material placed before him and allowed the appeal of the assessee. As per section 250(4 )of the Act, The Ld.CIT(A) is empowered to make further enquiry or may direct the AO to make further enquiry in disposing the appeal. In the instant case, the Ld.CIT(A) has perused the material placed before him and allowed the appeal of the assessee holding that the deposits made in the bank account are recorded in the books of account. No other material was placed by the department to show that the finding of the Ld.CIT(A) was incorrect. Therefore, we find no reason to interfere with the order of the Ld.CIT(A) and the same is upheld. Appeal of the revenue on this ground is dismissed.

Ground No.3 is related to the addition made by the AO u/s 69A in respect of long term capital gains amounting to Rs.77,74,373/- which was deleted by the Ld.CIT(A). During the assessment proceedings, the AO found that the assessee has claimed the amount of Rs.77,74,373/- under the head ‘others, including exempt income of minor child’. On perusal of computation of income, the AO found that the assessee has sold the shares for consideration of Rs.83,74,373/- and after deducting the cost of acquisition for an amount of Rs.6,00,000/- arrived at the long term capital gains on sale of shares at Rs.77,74,373/- and claimed as exempt income u/s 10(38) of the act. The AO has called for the details but the assessee failed to furnish the details, therefore, the AO made addition u/s 69A for an amount of Rs.77,74,343/-.

The assessee went on appeal before the CIT(A) and the Ld.CIT(A) deleted the addition holding that the AO has erroneously invoked section 69A for making the addition, therefore, held that the addition made by the AO is unsustainable, accordingly deleted the addition.

Against the order of the Ld.CIT(A), the department is in appeal before this Tribunal. During the appeal hearing, the Ld.DR supported the order of the AO and argued that the assessee did not furnish any details during the

On the other hand, the Ld.AR argued that the AO made the addition u/s 69A. There is no dispute that the receipt was under long term capital gains for sale of shares. The details have been furnished in the paper book. The Ld.AR further argued that the Ld.CIT(A) is empowered to cause enquiries for disposing the appeal and in the instant case the assessee has furnished the paper book containing the complete details and the Ld.CIT(A) disposed off the appeal after due verification and therefore, argued that there is no case for remitting the matter back to the file of the AO, hence, requested to uphold the order of the Ld.CIT(A).

We have heard both the parties and perused the material placed on record. In this case, there is no dispute that the assessee furnished the details before the Ld.CIT(A) and copy of the paper book was placed before us. As per the information placed in the paper book it is evident that the assessee has sold the shares of Legacy Mercantile Limited and received an amount of Rs.83,74,373/- on sale of shares and claimed the same as exempt u/s 10(38) of the Act. The assessee sold the shares through DEMAT

Ground No.4 is related to the addition of Rs.1,67,983/-, profit from sale of car. During the assessment proceedings, the AO found that the assessee has shown the sum of Rs.1,67,983/- as profit on sale of car. The assessee reduced the said amount from P&L account, but not offered the same under the head Capital Gains. The AO issued show cause notice and the assessee failed to furnish the details. Therefore, the AO made the addition of Rs.1,67,982/- u/s 69A of the Act.

Against which the assessee went on appeal before the CIT(A) and the Ld.CIT(A) found from the computation of income that the assessee has reduced the profit on sale of car and made necessary adjustment in the depreciation statement. The contention of the assessee was that the sale proceeds of the car was reduced from the written down value, while computing the depreciation statement, hence, no separate addition is warranted. The Ld.CIT(A) extracted the depreciation on machinery @15% which is as under : Machinery @15% Rs.

Against which the department has filed appeal before this Tribunal. During the appeal hearing, the Ld.DR relied on the order of the AO.

Per contra, the Ld.AR relied on the order of the Ld.CIT(A).

We have heard both the parties and perused the material placed on record. In the instant case, the assessee credited the profit on sale of car in Profit & Loss account, but the car is part of the block of assets and the sale consideration of the car required to be reduced from the block of assets. As per the computation given by the Ld.CIT(A) in appeal order, we find that the assessee has rightly reduced the sale of old car from the block of assets

Ground No.5 is related to the department’s contention that the assessee has filed additional information in respect of long term capital gains and sale of old car, therefore, contended that the Ld.CIT(A) ought to have remitted the matter back to the file of the AO. During the appeal hearing, the Ld.DR vehemently supported the contention raised by the department.

Per contra, the Ld.AR submitted that the Ld.CIT(A) is vested with the power to direct the AO to make further enquiries or the Ld.CIT(A) himself can make enquiries before disposing the appeal as per section 250(4) of the Act. The Ld.CIT(A) duly verified the information placed before him before disposing the appeal, which is evident from the Ld.CIT(A)’s order, hence, argued that there is no need to remit the matter back to the file of the AO and requested that the revenue’s appeal may be dismissed.

We have heard both the parties and perused the material placed on record. As per the provisions of section 250(4 )of the Act, the Ld.CIT(A) is

The assessee filed cross objections supporting the order of the Ld.CIT(A). Since the appeal of the revenue is dismissed, the cross objections filed by the assessee becomes infructuous, hence dismissed.

In the result appeal of the revenue as well as the cross objections of the assessee are dismissed.