BHARATHAM SATHYAVANI,HYDERABAD vs. INCOME TAX OFFICER,(INTERNATIOAN TAXATION) -2, HYDERABAD

It could be seen from the record that there is a delay of 84 days in preferring this appeal and the reason attributed for the delay in filing the appeal to the pandemic. As a matter of fact, though the learned DR does not concede to condone the delay, there is no denial of the fact that the Hon'ble Supreme Court in the Suo Motu proceedings in the case of M.A.No. 21/2022 in M.A.No. 665/2021 in SMW(C) No.3 of 2020 by order dated 10/01/2022 held that in cases, where the limitation would have expired during the period between 15/03/2020 and 28/02/2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01/03/2022, and in the event of actual balance period of limitation remaining with effect from 01/03/2022 is greater than 90 days, that longer period shall apply. Respectfully following the same, I hold that no delay could be reckoned and, therefore, now shall proceed to hear the appeal on merits.

Brief facts of the case necessary for disposal of this appeal are that it has come to the notice of the learned Assessing Officer that there were certain deposits in the account of the assessee to the tune of Rs. 6.45 lakhs during the financial yar 2016-17. Learned Assessing Officer further found that the assessee did not file the return of income and, therefore, issued notice under section 142(1) of the Income Tax Act, 1961 (for short “the Act”). Assessee though not filed the return of income, sent certain information through E-mails. Not being satisfied with such information, the learned Assessing Officer proceeded further and assessed the income at Rs. 6.45 lakhs for the assessment year 2017-18 by order dated 20/12/2019 under section 144 of the Act.

Aggrieved by such an action of the learned Assessing Officer in not considering the submissions made by her, assessee preferred this appeal stating that the information furnished was not considered in its proper perspective.

Before the Learned learned CIT(A) it was submitted by the assessee that insofar as an amount of Rs. 2.45 lakhs is concerned, she received the same from her father, he expired and the mother expressed her inability to produce the proof in support of deriving of agricultural income. She produced the record in support of such transaction. Learned learned CIT(A) satisfied with the explanation offered by the assessee in the light of the evidence produced and directed the learned Assessing Officer to delete the addition to the tune of Rs. 2.45 lakhs.

Insofar as the balance Rs. 4 lakhs is concerned, the plea taken by the assessee is that her husband, Shri Bharatham Venkateswarlu possessed certain agricultural lands to the extent of two acres at Bukkapuram Village, Mahanandi Mandal and 67.5 cents of land at Koduru Village and having derived the agricultural income to the tune of Rs. 4 lakhs, he directly deposited the same in the joint account he had with the assessee. Learned learned CIT(A) did not believe this version of the assessee and while agreeing with the learned Assessing Officer, he confirmed the same. Ld. learned CIT(A), therefore, partly allowed the appeal, granting relief only to the extent of Rs. 2.45 lakhs.

Assessee is aggrieved by the order of Learned learned CIT(A) in upholding the addition to the tune of Rs. 4 lakhs and preferred this appeal. It is submitted that there was no enquiry conducted by the Learned Assessing Officer properly in support of the amounts to be found in the bank account of the assessee and the Learned learned CIT(A) also failed to consider the evidence produced by the assessee in support of the legality of the deposit to the tune of Rs. 4 lakhs in her account. Learned AR further submitted that this deposit of Rs. 4 lakhs in the account of the assessee relates to the period prior to the demonetization and, therefore, these deposits cannot be looked from the angle of suspicion.

Learned DR, per contra, vehemently opposed the arguments advanced by the assessee, submitted that absolutely there is no evidence to suggest the legality of the deposits to the tune of Rs. 4 lakhs and according to her inasmuch as the husband of the assessee is not cultivating the land and he must have been receiving the sums from the tenants and in which case, the confirmation from the tenant become crucial. She submits that for want of evidence from the tenant, the version advanced by the assessee cannot be believed and she, therefore, submitted that there are no grounds, much less valid grounds to interfere with the findings of the facts written by the learned CIT(A).

We have gone through the record in the light of the submissions made on either side. The total deposits were to the tune of Rs. 6.45 lakhs. Rs. 2.45 lakhs represents the amount alleged to have been received by the assessee from her father towards his agricultural income. Learned CIT(A) believed the explanation offered by the assessee and directed the deletion of this addition. So what falls for our consideration now is only an extent of Rs. 4 lakhs which the assessee attributes to the agricultural income received by her husband.

Learned AR drew our attention to the confirmation letter given by the husband of the assessee, which is to be found at pages 17 and 18 of the paper book, wherein the husband of the assessee in unequivocal terms states that he possessed certain ancestral agricultural property in respect of which he received Rs. 4 lakhs and deposited in the joint account held by himself and the assessee. Learned AR further brought to our notice the material to show that he possessed certain agricultural lands. Further it could be seen from the bank account to be found from page 23 of the paper book there were certain deposits in the account at the rate of Rs. 49,000/- every month in the account of the assessee and it is explained to be the rent received regularly from the tenant. Admittedly these deposits are prior to the demonetisation period and the deposits are regularly for a certain amount which establishes the periodicity of the purpose.

There is nothing for me not to believe the explanation offered by the assessee that these amounts represent the monthly rents received by her husband towards rent. Considering the smallness of the amount I do not think it proper to direct the verification at the end of the learned Assessing Officer by remanding the issue. Material on record makes the explanation offered by the assessee highly probable, I am, therefore, of the considered opinion that there is nothing for me not to believe this explanation. While accepting the explanation offered by the assessee, I held that this amount does not go un-explained deposits and, therefore, any addition on account of Section 69A of the Act cannot be sustained. With this view of the matter, I allow the grounds raised by the assessee and direct the learned Assessing Officer to delete the addition of Rs. 4 lakhs.

In the result, appeal of the assessee is allowed.