B.SRINIVASA RAO,VIJAYAWADA vs. THE INCOME TAX OFFICER, WARD-2(1), VIJAYAWADA

This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], Vijayawada in Appeal No.10054/CIT(A)/VJA/17-18 dated 20.12.2018 for the Assessment Year (A.Y.)2015-16.

All the grounds of appeal are related to the addition of Rs.5,00,000/- made by the Assessing Officer (AO) which was confirmed by the Ld.CIT(A). Brief facts of the case are that the assessee has deposited a sum of Rs.5,13,000/- in cash, in his savings bank account No.52208960232, State Bank of Hyderabad, Gayatri Nagar, Vijayawada on 30.03.2015. The AO called for the explanation of the assessee to explain the source for the deposit of Rs.5,13,000/- and the assessee had explained that the sum of Rs.5,16,000/- was given by his son, Sri Bhimana Sujit Raviteja, which was gifted by his father-in-law, Sri Adika Manohar Rao, out of his accumulated savings from his income and drawn from his savings bank account No.52160910769 with SBI Kothagudem. The above gift was given to the assessee’s son in connection with marriage of his son with Dr.Mounica who happens to be the daughter of Sri Adika Manohar Rao. In brief, the gist of explanation was that the assessee had received the sum of Rs.5,13,000/- from his son for purchase of car which was deposited in his bank account. His son, Sri Bhimana Sujit Raviteja had received the above sum, by way of gift from his father-in-law, Sri Adika Manohar Rao. The gift was received in connection with the marriage of his son with daughter of Sri Adika Manohar Rao. However, the AO did not accept the explanation observing that there were no sufficient withdrawals made by Sri Adika Manohar Rao

Against which the assessee filed the appeal before the CIT(A) and the Ld.CIT(A) confirmed the addition holding that the assessee has failed to prove the genuineness of the transaction and hence, the assessee is in appeal before this Tribunal.

We have heard both the parties and perused the material placed on record. In the instant case, the assessee has deposited a sum of Rs.5,13,000/- in his bank account. The said sum was explained to be received from his son. The source for receipt of his son was gift by his father in law, Sri Adika Manohar Rao and the occasion for the receipt of the gift was the marriage of assessee’s son with Dr.Mounica, daughter of Sri Adika Manohar Rao. From the order of the Ld.CIT(A), we have observed that Sri Adika Manohar Rao has withdrawn the sum of Rs.16,75,000/- from 09.12.2013 to 13.03.2015 which is sufficient to meet the gift. In the instant case, the AO did not doubt the genuineness of the gift received from his son. The AO’s suspicion was the source of source i.e. donor, Sri Adika Manohar Rao. Since the assessee has discharged his burden by placing evidence with regard to receipt of gift from his son, we do not find any reason to make

The assessee raised additional ground stating that the case was selected for limited scrutiny for mismatch of sales turnover and made the addition of Rs.5,13,000/- u/s 68 or 69A of the Act without the prior approval of the Principal CIT, Vijayawada. Therefore, argued that as per the provisions of law, the case cannot be converted to full scrutiny as per the instructions of CBDT without the approval of the Ld.CIT. Hence, argued that the addition made by the AO required to be deleted on this ground also.

Since we have adjudicated the ground on merits and allowed the appeal of the assessee, we consider it is not necessary to adjudicate the additional ground raised by the assessee. Accordingly, the appeal is of the assessee is allowed.

In the result, appeal of the assessee is allowed.