SRI BHAGAVAN REDDY KOTHA,WARANGAL vs. INCOME TAX OFFICER, WARD-1, WARANGAL

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ITA 1921/HYD/2017Status: DisposedITAT Hyderabad09 May 2018AY 2009-103 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The tribunal held that the CIT(A)'s order sustaining the addition was perverse, as it ignored the findings in the remand reports. Consequently, the addition was deleted.

What were the facts?

The assessee's appeal concerned an addition of Rs. 21,63,000/- for alleged unexplained bank deposits. Both the Assessing Officer and the Joint Commissioner, in their remand reports, opined that the assessee had explained the sources of these deposits and the addition should be deleted.

What were the issues?

Whether the CIT(A) was justified in sustaining an addition for unexplained deposits despite favorable remand reports from the AO and JCIT.

Which sections of the Income-tax Act were involved?

Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES “B” (SMC

Before: SHRI J. SUDHAKARA REDDY

This is an appeal filed by the assessee, directed against the order of the Commissioner of Income Tax (Appeals)-3, Hyderabad, dated 19-09-2017, passed u/s. 250 of the Income Tax Act, 1961 [the Act]. The sole issue that arises for my adjudication is whether the Ld.CIT(A) is right in sustaining an addition of Rs. 21,63,000/- being alleged unexplained deposits in the bank account of the assessee, despite a remand report given by the Assessing Officer (AO) stating that the assessee has explained the sources of the cash deposits with evidence and that the addition in question should be deleted and when the JCIT, Warangal Range, Warangal has in his report also opined that the assessee has explained the sources of cash deposit and the addition in question should be deleted.

I.T.A. No. 1921/Hyd/2017 :- 2 -:

2.

I find that the ITO, Ward-2, Warangal in his remand report dt. 01-09-2017 concluded as follows: “…..In view of the above explanation, it appears that the sources for cash deposits are explained and the Hon'ble CIT(A) can consider for deleting the addition towards ‘unexplained income’.”

3.

JCIT, Warangal Range, Warangal vide letter dt. 07-09-2017 stated as follows: “……In view of the above explanation, since the sources of cash deposits are explained, the addition made towards ‘unexplained income’ may be considered for deletion”.

4.

The Ld.CIT(A) without application of mind has stated as follows: “……The appellant was given adequate opportunities to explain the sources for cash deposits in the bank account. The appellant did not appear before the AO nor furnished cogent information regarding the sources of the deposits……….”.

5.

The conclusion of the Ld.CIT(A) is perverse. Such orders lead to unnecessary harassment to the citizens of our country and bring a bad name to the Income Tax Department. On the face of the findings in the remand report, this addition cannot be sustained. Hence the same is deleted. Costs Rs. 20,000/-.

6.

In the result, appeal of assessee is allowed.

Order pronounced in the open court on 9th May, 2018

Sd/- (J. SUDHAKARA REDDY) ACCOUNTANT MEMBER Hyderabad, Dated 9th May, 2018 TNMM

I.T.A. No. 1921/Hyd/2017 :- 3 -:

Copy to : 1. Sri Bhagavan Reddy Kotha, Warangal. C/o. A.V. Raghu Ram, P. Vinod, Advocates, 610, Babukhan Estate, Basheerbagh, Hyderabad. 2. Income Tax Officer, Ward-1, Warangal.

3.

CIT (Appeals)-3, Hyderabad. 4. Pr.CIT-3, Hyderabad.

5.

D.R. ITAT, Hyderabad.

6.

Guard File.

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