Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ SMC Bench, Hyderabad
Before: Smt. P. Madhavi Devi
This is assessee’s appeal for the A.Y 2009-10 against the order of the CIT (A)-4, Hyderabad, dated 14.05.2019.
Brief facts of the case are that the assessee, an individual, filed his return of income for the A.Y 2009-10 on 14.5.2019 admitting income of Rs.3,53,684/-. The case was selected for scrutiny under CASS to verify: i) the sources of expenditure/investments including information from AIR, vis-à-vis Gross Receipts. ii) the source of cash deposits above the threshold limit in saving bank account made by the assessee.
The assessment was accordingly completed u/s 143(3) on 30-12-2011 by making the additions of (i) unexplained cash deposits of Rs.25.00 lakhs u/s 69A and (ii) interest not admitted by the assessee of Rs.20,136/-. On appeal to the CIT (A), the of 2019 Annam Naidu Uppada Secunderabad.
addition of Rs.25.00 lakhs was deleted and on further appeal by the Revenue to the Tribunal, the Tribunal remanded the issue to the file of the AO for fresh examination and deciding the issue by affording the assessee an opportunity to explain the sources of the deposits. The ITAT observed that the assessee has explained the source of the source but not the immediate source of the deposits because the deposits happened much later to the death of the assessee’s father-in-law.
The AO therefore, issued notices u/s 142(2) to the assessee calling for certain details such as (i) furnishing names of the persons from whom moneys were collected so as to deposit the same into Bank A/c and also to explain the time gap from the death of father-in-law and why the moneys are kept in F.Ds in the assessee’s name when the same were to be distributed to the heirs as per the will. The assessee was also required to submit the HDFC Bank A/c No.06961930001125 Pet Basheerabad, Hyderabad for the period 16.11.2009 to 24.09.2010. The assessee furnished the relevant information and explained that as per the directions of his father-in-law Shri Bairagi Naidu, the assessee’s wife Smt. U. Vanisree, had put the money of Rs.25.00 lakhs in circulation by lending it to four persons and after the death of Shri Bairagi Naidu, the assessee’s wife collected money from the parties and deposited it into the assessee’s HDFC Bank A/c. The AO, therefore, issued summons to the said persons. One of the persons, Mr. M.A. Khaliq appeared and confirmed the receipt of Rs.4.00 lakhs from the assessee in the year April, 2008 and also confirmed that the same was repaid in December, 2008 and the mode of payment was through cash. Another person Shri G. Jogi Raju also confirmed the loan of Rs.2.00 lakhs taken from the of 2019 Annam Naidu Uppada Secunderabad.
assessee in the year April, 2008 and that the same was repaid in December, 2008 and the mode of payment was through cash. The AO was, however, was not convinced with the confirmations of these two parties. The AO also asked the assessee the reasons for keeping the money in FDs in the name of the assessee even after the death of Shri Bairagi Naidu though he was supposed to distribute it to his heirs as per the will. The assessee explained that though Shri Bairagi Naidu had executed the will and died on 15.06.2008, the will was traced only in January, 2010 and immediately thereafter, the assessee distributed the same amongst the heirs. This explanation of the assessee also was not accepted by the AO and she made the addition of Rs.25.00 lakhs to the returned income of the assessee. Aggrieved, the assessee preferred an appeal before the CIT (A) who confirmed the order of the AO and the assessee is in second appeal before the Tribunal.
The learned Counsel for the assessee reiterated the submissions made by the assessee before the authorities below while the learned DR supported the orders of the AO.
I find that the assessee has explained the source of the cash deposits to be the amount given to him by his father-in-law for safe custody and that it has kept in circulation and subsequently been distributed to the legal heirs of his father-in- law according to the will executed by him. I also find that all the persons who have allegedly taken loan, and have returned the money have confirmed the transactions. The assessee has filed the necessary confirmation letters before the AO and also to the CIT (A) and therefore, the source for the cash deposits into the Bank A/c has been explained. Particularly, the will of Mr. Bairagi of 2019 Annam Naidu Uppada Secunderabad.
Naidu also mentioned the existence of Rs.25.00 lakhs with the assessee and the relevant confirmation letters of the LRs also proves that they have received the money from the assessee. The copy of the will executed by Mr. Baigari Naidu is placed at pages 18A and 18B of the paper book filed by the assessee which is executed on 15.05.2008 in the hand-writing of the father-in-law and it is clearly stated that Rs.25.00 lakhs is due from the assessee to him which has to be distributed amongst his legal heirs. Therefore, I am convinced about the source of deposits into the Bank A/c and accordingly delete the addition of Rs.25.00 lakhs made by the AO and confirmed by the CIT (A). The assessee gets relief accordingly.
In the result, assessee’s, appeal is allowed.
Order pronounced in the Open Court on 10th January, 2020.