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Income Tax Appellate Tribunal, HYDERABAD SM-A BENCH : HYDERABAD
Before: SHRI VIJAY PAL RAO & SHRI G. MANJUNATHA
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “SM-A” BENCH : HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA.No.1282/Hyd/2024 Assessment Year 2017-2018 Pasupuleti Venkateswara vs., The Income Tax Officer, Rao Pasupuleti Ward-12(3), Balakrishna, Hyderabad PAN ATKPP9009K Hyderabad. (Appellant) (Respondent) For Assessee : Shri K. Chandrasekhar Reddy Advocate For Revenue : Shri Ashutosh Pradhan, Sr. AR Date of Hearing : 19.02.2025 Date of Pronouncement : 24.02.2025 ORDER PER G.MANJUNATHA, A.M. :
This appeal has been filed by the assessee against the Order of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, relating to the assessment year 2017-2018.
At the very outset, there is a delay of 72 days in filing the appeal before the Tribunal. The Learned Counsel
2 ITA.No.1282/Hyd./2024 for the Assessee filed petition for condonation of delay explaining the reasons for the delay, more particularly, on account of his ill-health. He further submitted that the assessee has prima facie case on merits and has got fair chances to succeed. He, therefore, prayed that the impugned delay of 72 days in filing the appeal be please be condoned in the interest of justice.
The learned DR, on the other hand, strongly opposed for condonation of delay in filing the appeal before the Tribunal. He submitted that the Assessing Officer made the impugned addition of Rs.16 lakhs u/sec.69A of the Act in the hands of the assessee which was deposited by him in the Bank during the demonetization period. As the assessee was failed to prove the source of the amount, the Assessing Officer rightly made the addition which has been confirmed by the learned CIT(A) in absence of any documentary evidence placed before him. He accordingly, submitted that the assessee has no case at all and the delay should not be condoned in the interest of justice.
3 ITA.No.1282/Hyd./2024 4. We have heard the rival submissions of both the parties and perused the material on record. We find the Hon’ble Supreme Court in the case of Collector, Land Acquisition vs., MST Katiji (supra) has held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. It has further been held that refusing to condone delay can result in a meritorious matter being thrown-out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. In view of the above decision of Hon’ble Supreme Court in the case of Collector, Land Acquisition vs., MST Katiji (supra) and considering the contents of the condonation application filed along with the affidavits, the delay of 72 days in filing the instant appeal before the Tribunal is condoned and the above appeal is admitted for adjudication.
4 ITA.No.1282/Hyd./2024 5. Facts of the case, in brief, are that the assessee is an individual, derives income from salary and filed his return of income on 15.03.2018 declaring income of Rs.8,18,996/-. The case of the assessee has been selected for scrutiny under CASS and the Assessing Officer has issued statutory notices u/sec.143(2) and 142(1) of the Act calling the assessee to furnish the sources for cash deposits during the demonetization period with necessary evidences along with explanation and the bank accounts statements, Form No.16 for the F.Y. 2016-2017. In response to the said notices, the assessee has furnished his submissions. After verification of the same, the Assessing Officer noted that the assessee has shown return of income at Rs.8,18,996/- and as per Form No.16 the income of the assessee is Rs.9,19,586/-. Similarly, from the careful perusal of the bank statements, the Assessing Officer noted that during demonetization period the assessee had deposited a sum of Rs.16 lakhs and since the assessee could not furnished the evidences regarding the source of such cash deposit, the Assessing Officer treated the same as unexplained cash
5 ITA.No.1282/Hyd./2024 credit and made addition of Rs.16 lakhs in the hands of the assessee u/sec.69A of the Act and determined the total income of the assessee at Rs.21,69,140/- vide order dated 30.08.2019 passed u/sec.143(3) of the Income Tax Act, 1961.
On being aggrieved, the assessee carried the matter in appeal before the learned CIT(A) and reiterated his submissions. Before the learned CIT(A), it was the submission of the assessee that he is having two bank accounts i.e., one is with SBI, Ameerpet Branch which is the salary account of the assessee and the second one is Indusind Bank, Miyapur Branch which is personal bank account used for personal transactions as well as family members transactions which is near to assessee’s home and that assessee having joint family staying with his mother, father, brother and his wife along with daughter and since the assessee is the elder in the family all the family members transfer their salary to assessee’s personal account i.e., Indusind Bank, Miyapur. He, therefore, submitted that the entire sum is not belonged to him, but,
6 ITA.No.1282/Hyd./2024 of all the family members and the source of deposits were out of previous years savings of his family members, his savings. However, the learned CIT(A) did not fully satisfied with the explanation offered by the assessee and, therefore, granted part relief by sustaining the addition to the extent of Rs.8,95,000/- out of Rs.16 lakhs made by the Assessing Officer u/sec.69A of the Act.
Aggrieved by the order of the learned CIT(A) the assessee carried the matter in appeal before the Tribunal and reiterated his submissions made before the lower authorities on the sole substantive issue of making the impugned addition in the hands of the assessee u/sec.69A of the Act as unexplained cash credit by relying on the decisions of Hon’ble Supreme Court in the case of CIT vs. Durga Prasad More [1971] 82 ITR 540 (SC) and Sumati Dayal vs. CIT [1995] 214 ITR 801 (SC).
During the course of hearing, Learned Counsel for the Assessee submitted that the impugned addition of Rs.16 lakhs made by the Assessing Officer is not in accordance with law and even the learned CIT(A) did not 7 ITA.No.1282/Hyd./2024 properly appreciated the facts of the case that the assessee had in fact deposited a sum of Rs.3,39,000/- only during the demonetization period i.e., from 9.11.2016 to 31.12.2016. Further, the assessee has made cash deposit of Rs.10,95,000/- after demonetization period. The source of the cash deposit is out of income from salary and past savings and also income of family members. In support of this contention, the assessee has filed certain evidences including copies of income tax returns filed by his family members under Rule 29 of ITAT Rules, 1962 as additional evidence. He submitted that the source of the cash deposit in the bank account is out of amount received from Smt. Indira Pasupuleti, Mother of the assessee and Smt. Surekha, Wife of the assessee through banking channel and both of them are income tax assessee’s and filed regular returns of income declaring sufficient income to explain source of impugned cash deposits. Learned Counsel for the Assessee submitted that the assessee is residing in joint family and during the period of 2017 there was a marriage in the family and because of this, the assessee has pooled
8 ITA.No.1282/Hyd./2024 the cash available with all the family members and deposited in the bank account. These additional evidences could not be filed before the learned CIT(A). Therefore, he pleaded that the additional evidence filed by the assessee under Rule 29 of the ITAT Rules, 1962 may be admitted as it goes to root of the matter and the addition made towards cash deposit may be deleted.
The Learned DR, on the other hand, strongly opposed for admission of the additional evidence filed by the assessee before the Tribunal. He submitted that it is only an afterthought and as such, the additional evidence filed by the assessee should not be admitted and pleaded that the learned CIT(A) after considering the submissions of the assessee has already given part relief which is just and reasonable. He accordingly submitted that the order of the learned CIT(A) be confirmed.
We have heard rival submissions of both the parties and perused the material on record. We find that the learned CIT(A) has sustained the addition to the extent of Rs.8,95,000/- towards cash deposit made in the bank
9 ITA.No.1282/Hyd./2024 account on the ground that the assessee could not establish source for the balance cash deposit with no source of income. To substantiate his claim, the assessee has filed additional evidences such as income tax returns filed by Smt. Indira Pasupuleti-Mother of assessee and Smt. Surekha-Wife of the assessee for the A.Y. 2017-2018 which are already with the Department and also an affidavit from Smt. Indira Pasupuleti and Smt. Surekha, Mother and Wife of the assessee, respectively, where they were admitted to have paid cash to the assessee and to establish the source of cash deposit and source of income. From the careful perusal of the above documentary evidences placed before the Tribunal, we find that the assessee has deposited the cash in the Bank out of the income of family members for the purpose of marriage expenditure appears to be bonafide and reasonable. Therefore, we are of the considered view that the learned CIT(A) ought to have allow the balance sum of Rs.8,95,000/- [i.e., out of 69A total addition of Rs.16,00,000 (-) part relief granted by learned CIT(A) of Rs.7,05,000]. Thus, we direct the Assessing Officer to delete
10 ITA.No.1282/Hyd./2024 the addition sustained by the CIT(A) of Rs.8,95,000/- towards cash deposit made in the bank account of the assessee. Accordingly, the grounds raised by the assessee are allowed.
In the result, appeal of the assessee is allowed.
Order pronounced in the open Court on 24.02.2025 Sd/- Sd/- [VIJAY PAL RAO] [G. MANJUNATHA] VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad, Dated 24th February, 2025 VBP Copy to Pasupuleti Venkateswara Rao Pasupuleti Balakrishna, 1. H.No.1-59/115, Street No.7, Miyapur, Hyderabad PIN - 500 049, Telangana. 2. The Income Tax Officer, Ward-12(3), Hyderabad 3. The PCIT/CIT 4. The CIT(A)/DCIT(A) 5. The DR ITAT SM-A Bench, Hyderabad. 6. Guard File. //By Order// //True Copy//
Sr. Private Secretary, ITAT, Hyderabad Benches, Hyderabad.