Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, HYDERABAD BENCHES “SMC”, HYDERABAD
Before: SMT. P. MADHAVI DEVI
BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER Assessment Year: 2007-08 Sri Jajapuram Venkat Reddy, Income Tax Officer, HYDERABAD Vs Ward-9(3) [PAN: AFQPJ0148D] [now Ward-9(4)], HYDERABAD (Appellant) (Respondent) For Assessee : Shri A.V.Raghu Ram, AR For Revenue : Shri Nilanjan Dey, DR Date of Hearing : 28-11-2019 Date of Pronouncement : 08-01-2020 O R D E R This appeal filed by the assessee for the AY.2007-08, is directed against the order of the Commissioner of Income Tax (Appeals)–11, Hyderabad, dated 28-02-2017.
Brief facts of the case are that, the assessee is an individual, earning income from labour contract works. He also has income from house property. One Smt. R.Rajani had given a complaint against the assessee to the police about dowry harassment and accordingly, First Information Report (FIR) was registered by the Sub-Inspector of Police, Nereducherala Police Station, wherein it was alleged that the assessee received as dowry an amount of Rs.38 Lakhs in the Financial Year 2006-07. This complaint was forwarded to the Assessing Officer (AO). As the amount involved exceeded Rs.25,000/-, AO observed that the same is liable to be charged to tax u/s.56(2)(v) of the of the Income Tax Act [Act].
Accordingly, notice u/s.142(1) of the Act was issued on 12-11- 2008, calling for a return of income for the AY.2007-08. 2.1 In reply thereto, the assessee filed a letter dt.18-11-2008 stating that the return was already filed by him on 12-07-2007 and copy of the same was enclosed. On perusal of the said return of income, AO observed that the assessee has not disclosed the amount of Rs.38 Lakhs in the return of income and therefore a notice u/s.148 of the Act was issued to the assessee on 21-11-2008 calling for return of income, disclosing true and correct particulars. The assessee filed a letter dt.26-02-2009 submitting that the return filed on 12-07-2007 be treated as a return filed in response to notice u/s.148 of the Act. Thereafter, the assessee appeared before the AO and furnished necessary information. The AO observed that there are total deposits to the extent of Rs.56,53,240/- into the Savings Bank A/c maintained by the assessee in HDFC Bank, State Bank of Mysore and ICICI Bank Limited. Assessee was directed to explain the sources for the said deposits and the assessee explained the sources to the extent of Rs. 35,11,490/-. AO observed that for the balance of the amount, assessee has not been able to explain the sources and therefore he treated the said amount as “income from un- explained sources” and brought it to tax u/s.69 of the Act. Accordingly, an amount of Rs.21,41,750/- was added to the returned income of the assessee.
Aggrieved, the assessee preferred an appeal before the CIT(A), stating that a sum of Rs.2,90,000/- was received by him from his brother-in-law to meet the education and other living expenses of his brother-in-law’s daughter, which were borne by the assessee. With regard to other deposits, the assessee had stated that some of the funds have been received from the assessee’s son-in-law and the balance amounts are also from the withdrawals made from other bank accounts, immediately prior to deposits. Ld.CIT(A) accepted the source to the extent of Rs.10 Lakhs and odd and confirmed the addition to the extent of Rs.8,25,000/- and Rs.2,90,000/- totalling to Rs.11,15,000/-.
Aggrieved, the assessee is in appeal before the Tribunal, raising the following Grounds of Appeal: “1. On the facts and in the circumstances of the case, the order of the ld.Commissioner of Income Tax (Appeals)-11, Hyderabad, allowing the appeal only in part is erroneous, illegal and unsustainable on facts and in law. The Commissioner (Appeals) ought to have allowed the appeal in entirety as prayed for by the Appellant.
2. The Commissioner (Appeals) erred in sustaining the addition of Rs.8,25,000 being the amounts redeposited into bank. The Commissioner (Appeals) ought to have appreciated that the source for the deposit, in the form of earlier withdrawal, was explained by the Appellant and therefore the addition of Rs.8,25,000 is unsustainable on facts and in law.
3. The Commissioner (Appeals) failed to appreciate that there is no presumption in law that the money withdrawn from bank is always taken to have been spent. The Commissioner (Appeals) ought to have appreciate that in the absence of any information with the Revenue that the amount withdrawn was used for any other purposes, the explanation of the Appellant that the same is redeposited cannot be brushed aside.
4. The Commissioner (Appeals) erred in sustaining the addition of Rs.2,90,000 being the amount received from Sri M.Venugopal Reddy. The Commissioner (Appeals) failed to appreciate that the said amount was given to the Appellant to defray education expenditure of his niece.
5. The Commissioner (Appeals) ought to have given sufficient time to furnish the notarized affidavit from Sri M.Venugopal Reddy rather than hurriedly concluding the appeal proceeding. The Commissioner (Appeals) failed to appreciate that the Appellant has submitted the confirmation letter of Sri M.Venugopal Reddy and could not produce the notarized affidavit for want of time.
6. The Commissioner (Appeals) ought to have accepted the confirmation letter submitted by Sri M.Venugopal Reddy rather than insisting upon the notarized affidavit”.
4.1. In addition to the above grounds, the assessee also filed Additional Grounds, challenging the validity of re-opening of the assessment. However, at the time of hearing, Ld.Counsel for the assessee submitted that the Additional Grounds raised by the assessee are not being pressed. Therefore, the Additional Grounds are not admitted and adjudicated.
As regards the sum of Rs.11,15,000/- is concerned, I find that the said amount comprises of two amounts – one is Rs.2,90,000/- allegedly received by the assessee from his brother-in-law and Rs.8,25,000/- which are allegedly the deposits from the withdrawals made earlier. Ld.Counsel for the assessee has drawn my attention to para 7 of the CIT(A)’s order, wherein withdrawals and immediate deposits thereof are explained:
S.No Amount Rs. 1 02.02.2007 drawn Rs.100000 and 1,00,000 05.02.2007 deposited 2 09.10.2006 drawn Rs.350000 and 2,75,000 13.10.2006 and 14.10.2006 deposited 3 24.10.2006 drawn Rs.264000 and 50,000 26.10.2006 deposited 4 10.04.2006 drawn Rs.86000 and 86,000 12.04.2006 deposited 5 NRI amounts received from son-in-law 4,00,000 during the previous year is also deposited during the year Thus, he explained the sources for the deposits.
As regards the sum of Rs.2,90,000/- is concerned, the assessee submitted that he has received the said sum from his brother-in-law through cheque and the bank account of the assessee would prove the same. He also submitted that the CIT(A) had confirmed the addition, only on the ground that notarised confirmation of his brother-in-law was not submitted. He also submitted that the same is now filed before the Tribunal as additional evidence and prayed for admission of the same.
Ld.DR was also heard, who supported the orders of the authorities below.
Having regard to the rival contentions and material on record, I find that the sum of Rs.2,90,000/- is allegedly received by the assessee through cheques from his brother-in- law. A copy of the bank account, (wherein these deposits are recorded) is also filed before the Tribunal in the form of a Paper Book at Page Nos.14 & 15. I find that the sum of Rs.50,000/- and Rs.1,20,000/- have been deposited through cheques on 25-08-2006 and 07-09-2006 respectively, totalling to Rs.1,70,000/-. The balance of Rs.1,20,000/- is also paid by cheque on 14-10-2006. When the relevant transactions are reflected in the bank account, it should not have been difficult for the Department to verify the source of these transfers from the bank. Therefore, I am inclined to accept the said credits from assessee’s brother-in-law Shri Venugopal Reddy’s A/c, as explained and the addition to the extent of Rs.2,90,000/- is deleted.
8.1. As regards the sum of Rs.8,25,000/- is concerned, I am satisfied with the withdrawals and re-deposits to the extent of Rs.4,25,000/- only. However, with regard to sum of Rs.4 Lakhs allegedly received from the assessee’s son-in-law, there is no evidence or proof of the same. Therefore, I deem it fit and proper to delete the same to the extent of Rs.4,25,000/- and the balance of receipt of Rs.4 Lakhs is confirmed.
8.2 Accordingly, the Grounds raised by assessee are treated as partly allowed for statistical purposes.
In the result, the appeal of assessee is treated as partly allowed for statistical purposes.
Order pronounced in the open court on 8th January, 2020