PUTLUR NAGESWAR REDDY, ANANTAPUR,HYDERABAD vs. ITO, WARD-2, ANANTAPUR, ANANTAPUR

ITA 1057/HYD/2016Status: DisposedITAT Hyderabad31 August 2018AY 2009-103 pages

AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found the assessee's contention probable given the timing of the F-1 visa certificate and bank deposits. The authorities below had not adequately verified the deposits and subsequent withdrawals.

What were the facts?

The assessee explained bank deposits of Rs. 20,05,253 as short-term borrowings from friends and relatives to meet visa eligibility requirements for his children's studies abroad. The amounts were allegedly returned after the visa was granted.

What were the issues?

Whether the bank deposits were adequately explained as temporary borrowings for visa purposes and if the AO and CIT(A) properly verified the evidence provided by the assessee.

Which sections of the Income-tax Act were involved?

Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ Bench, Hyderabad

Before: Smt. P. Madhavi Devi & Shri Inturi Rama RaoShri Putlur Nageswar

Hearing: 29.08.2018Pronounced: 31.08.2018

Per Smt. P. Madhavi Devi, J.M.

This is assessee’s appeal for the A.Y 2009-10 against the order of the CIT (A)-Kurnool, dated 29.04.2016. The assessee has raised the following grounds of appeal: “ 1. The order of the CIT (A) is erroneous both on facts and in law. 2. The learned CIT (A) erred in confirming the addition of Rs.20,05,253 representing the deposits made into the Bank A/c. 3. The learned CIT (A) ought to have seen that the deposits made into the Bank A/c are properly explained and therefore, the learned CIT (A) ought to have allowed the relief as prayed for, 4. Any other ground or grounds that may be urged at the time of hearing”.

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ITA No 1057 of 2016 Putlur Nageswar Reddy Anantapur.

The learned Counsel for the assessee while reiterating the submissions made by the assessee before the authorities below, submitted that the assessee had borrowed funds from various parties who are his friends and relatives, to enable the assessee’s son and daughter-in-law to get eligibility for further study abroad and immediately after the visa was granted, the amounts were returned to the respective parties. But the CIT (A) has not accepted the assessee’s contention and has made the addition made by the AO u/s 154 of the Act. He filed the copy of the Bank statement and also the certificate of eligibility of getting student visa (F-1) to support his contention.

The learned DR however, supported the orders of the authorities below.

Having regard to the rival contentions and the material on record, we find that the assessment was completed u/s 144 of the Act and before the CIT (A), the assessee has furnished the relevant information and the remand report was also called for by the CIT(A). In the remand report, the AO had only commented that the assessee’s versions are baseless and afterthoughts, but he had not given any adverse comments on the evidence, such as F-1 certificate and also the Bank statements furnished by the assessee. The assessee submitted that he was also filed the confirmation letters from the respective parties and the evidence in support of their creditworthiness, but the same was not considered by the AO. We find that the F-1 certificate was issued in the month of March, 2009 and the deposits were also made in

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ITA No 1057 of 2016 Putlur Nageswar Reddy Anantapur.

the same month. Therefore, we find that the assessee’s contention that the amounts were short term borrowals for meeting the visa requirements seems probable. The assessee’s contention that he has withdrawn the entire amount and repaid the amount to the respective parties after the interview also has not been verified by the authorities below. In view of the same, we deem it fit and proper to remand the issue to the file of the AO for verification of the assessee’s contention and if it is found that the deposits and the withdrawals are around the date of the assessee’s children visa interview, then no addition shall be made.

In the result, assessee’s appeal is treated as allowed for statistical purposes.

Order pronounced in the Open Court on 31st August, 2018.

Sd/- Sd/- (Inturi Rama Rao) (P. Madhavi Devi) Accountant Member Judicial Member

Hyderabad, dated 31st August, 2018. Vinodan/sps Copy to: 1 Shri S.Rama Rao, Advocate, Flat No.102, Shriya's Elegance, 3-6- 643, Street No.9, Himayatnagar, Hyderabad 500029 2 ITO Ward-2 Aayakar Bhavan, Opp: Sai Baba Temple, Anantapur 3 CIT (A)-Kurnool 4 Pr. CIT - Kurnool 5 The DR, ITAT Hyderabad 6 Guard File

By Order

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