NARESH VUDAYAGIRI,HYDERABAD vs. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-7(1), HYDERABAD

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ITA 97/HYD/2020Status: DisposedITAT Hyderabad30 March 2022AY 2017-188 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that neither the assessee nor the department had fully substantiated their claims. Therefore, a lump sum addition of Rs. 25 lakhs was deemed just and proper, providing relief to the assessee.

What were the facts?

The assessee's appeal concerns an addition of Rs. 37.35 lakhs for unexplained cash seized during assessment proceedings. The assessee claimed the sum represented accumulated balances and cash sales from their liquor business.

What were the issues?

The primary issue was the validity of the addition for unexplained cash seized, and whether the assessee had provided sufficient explanation for its source.

Which sections of the Income-tax Act were involved?

Section 69A,Section 143(3),Section 153A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD ‘A’ BENCH, HYDERABAD.

For Appellant: Shri A. Srinivas, Adv

O R D E R Per Shri S.S. Godara, J.M. : This assessee’s appeal for Asst. Year 2017-19 arises from the Commissioner of Income Tax (Appeals)-3, Hyderabad’s order dt.15.11.2019 passed in case No.10429/ACIT-7(1)/CIT(A)-3/2018-19 in proceedings under Section 143(3) r.w.s. 153A of Income Tax Act, 1961 (‘the Act’ in short).

Heard both the parties. Case file perused.

2.

Coming to the assessee's sole substantive issue of correctness of 69A unexplained cash seized addition of Rs.37.35 lakhs made in the course of assessment dt.31.12.2018 and upheld in the lower appellate proceedings, we note that the CIT(A)’s detailed discussion to this effect reads as under :

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3.

Learned counsel vehemently contended during the course of hearing that it is clear from a perusal of the assessee's income tax return, computation and balance sheet that the impugned sum represents the accumulated balances as well as cash sales realized in liquor business.

4.

The Revenue has chosen to place strong reliance on the CIT(A)’s foregoing discussion.

5.

We have given our thoughtful consideration to rival pleadings and find no reason to accept either party’s foregoing submissions in entirety. This is for the reason that neither the assessee has been able to reconcile the liquor stock in trade with the sales / profits realized therefrom vis-à-vis the cash seized nor the department could altogether rebut the foregoing prima facie evidence to this effect. Faced with this situation, we deem it

Rs.25 lakhs than that in issue of sum of Rs.37.35 lakhs would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs.12.35 lakhs in other terms. Necessary computation shall follow as per law.

6.

This assessee's appeal is partly allowed in above terms.

Order pronounced in the open court on 30th Mar., 2022.

Sd/- Sd/- (L.P. SAHU) (S.S. GODARA) Accountant Member Judicial Member Hyderabad, Dt.30.03.2022. * Reddy gp Copy to :

1. 1. Shri Naresh Vudayagiri, Plot No.159, HUDA Sai Nagar Colony, Vanashalipuram, Hyderabad-500 070 2. ACIT, Circle 7(1), Hyderabad.

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