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Income Tax Appellate Tribunal, HYDERABAD ‘ SMC ’ BENCH, HYDERABAD.
Before: SHRI RAMA KANTA PANDA
O R D E R This appeal filed by the assessee is directed against the order dt.15.2.2022 of the learned Commissioner of Income Tax (Appeals)- 3, Visakhapanam for the Assessment Year 2007-08.
Facts of the case in brief, are that the assessee is an individual and filed the Return of Income for the Assessment Year 2007-08 on 31.07.2007 declaring total income of Rs.773. The return was processed u/s. 143(1) of the Income Tax Act, 1961 (in short ‘the Act’)
2 ITA 110/Hyd/2022 and subsequently the case was taken up for scrutiny. In response to notice u/s. 143(2) of the Act, the representative of the assessee appeared before the Assessing Officer and expressed his inability to furnish the details as the assessee's records were seized by the CBI. It was further stated that the income earned by the assessee by way of interest and dividend is exempt. The Assessing Officer noted that the assessee did not file any reply to the letters dt.29.9.2009 & 20.11.2009 showing what efforts he has taken to obtain the seized documents. The Assessing Officer noted that the assessee was having Bank account in Axis Bank with A/c. No.008010100612203 wherein the following credits were appearing :
Sr. No. Date Amount (Rs.) 1. 13.4.2006 2,323 2. 31.07,2006 2,33,822 3. 31.07.2006 1,32,500 Total : 3,68,645 The Assessing Officer therefore asked the assessee to substantiate the credits in the bank account. The assessee again submitted that he was not in possession of the record as they are seized by the investigating agencies. In absence of any 3 ITA 110/Hyd/2022 satisfactory explanation given by the assessee, the Assessing Officer made addition of Rs.3,68,645 to the total income of the assessee.
Before the ld. CIT (Appeals), the assessee filed written submission by mail.
However, the ld. CIT (Appeals) was also not satisfied with the arguments advanced by the assessee and upheld the additions made by the Assessing Officer by observing as under :
“7. The addition was made by the AO as credits appearing in the bank statement were not explained with necessary evidence during the assessment proceedings. In the absence of proper explanation the AD treated the credit entries in the bank account as income from other sources. From the table reproduced by the AO in para 4 of the assessment order pertaining to the deposits made on different dates it is noticed that the deposits are appearing on different dates from 13.04.2006 to 31.10.2006 aggregating Rs.3,68,645/-. In the written submissions except stating that the receipts were on account of dividend income received and a loan was taken from Shri B. Ramalinga Raju (individual) there is no material in support of the above submissions made. The appellant had been accorded adequate opportunity to furnish the relevant details and despite the same no material has been brought on record. In the absence of Cogent material the addition made by the AO for Rs.3,68,645/- by treating the same as income from other sources is confirmed and this ground of appeal is dismissed.”
4. Aggrieved by the order of CIT (Appeals), the assessee is in appeal before the Tribunal by raising the following grounds :
“ 1. The order of the Ld. ClT (A) in confirming the addition of Rs. 3,68,645/- is unsustainable both on facts and in law.
4 ITA 110/Hyd/2022 2. The Ld. ClT (A) failed to consider the evidence tendered with supporting Bank statement and on a wrong foundation of reasoning arising out of non-appreciation of facts erred in confirming the addition of Rs. 3,68,645/-.
3. The Ld. ClT (A) erred in confirming the addition of Rs. 3,68,645/- without proper appreciation of the facts and evidence that were brought to his notice by reference to the submissions of the appellant.
Any other ground or grounds that may be urged at the time of hearing.”
The learned counsel for the assessee filed detailed paper book running into 26 pages which is as under :
He submitted that although the assessee filed the requisite details before the CIT (Appeals), however the ld. CIT (Appeals) without considering the same upheld the additions made by the Assessing Officer. He submitted that the amount of Rs.1,32,500 received by the assessee is dividend received from M/s. Maytas Infra
5 ITA 110/Hyd/2022 Limited which is exempt from income tax u/s. 10(34) of the Act. Despite the full details given, the ld. CIT (Appeals) upheld this addition made by the Assessing Officer. Similarly, the assessee filed statement of wealth for the year ended 31.03.2006 according to which there is a liability towards wealth tax of HUF amounting to Rs.2,33,822. For payment of wealth tax liability, a loan of Rs.2,33,822 was taken from Shri B. Ramalinga Raju by account payee cheque which was credited on 31.07.2006 in the bank account. Thus the assessee had explained the full details before the ld. CIT (Appeals) and therefore the ld. CIT (Appeals) was not justified in sustaining the addition. In his alternate contention, he submitted that he has no objection if the matter is set aside to the file of Assessing Officer.
Learned Departmental Representative, on the other hand, heavily relied on the orders of Assessing Officer and ld. CIT (Appeals).
I have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and ld. CIT (Appeals) and the paper book filed on behalf of the assessee. I find the Assessing Officer in the instant case, made addition of Rs.3,68,645 being the credits appearing in the Axis Bank account maintained by the assessee on the ground that the assessee could not explain the source of the deposits in the bank account. I find the ld. CIT (Appeals) upheld the 6 ITA 110/Hyd/2022 action of the Assessing Officer the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the learned counsel for the assessee that since the documents were seized by the CBI, the assessee was unable to substantiate the source of the deposit in the bank account maintained with Axis Bank before the Assessing Officer. However, the assessee had given full details before the ld. CIT (Appeals) and despite proper explanation given for each of the deposit, the ld. CIT (Appeals) without appreciating the facts properly has sustained the addition which is not justified. I find force in the above arguments of the learned counsel for the assessee. A perusal of the written submission filed by the assessee before the ld. CIT (Appeals) shows that the ld. CIT (Appeals) has not considered the same properly. It is also a fact that during the assessment proceedings, the assessee could not file any reply since the documents were seized by the investigating agencies. Considering the totality of the facts of the case and in the interest of justice, I deem it proper to restore the issue to the file of Assessing Officer with a direction to grant one last opportunity to the assessee to substantiate the credits in the bank account and decide the issue as per fact and law. The assessee is also hereby directed to appear before the Assessing Officer without seeking any adjournment under any circumstances failing which the Assessing Officer is at liberty to pass appropriate order as per law. I hold and direct
7 ITA 110/Hyd/2022 accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 21.06.2021.