VENKATA MALLESWARA RAO ,SECUNDERABAD vs. INCOME TAX OFFICER, WARD-15(1), HYDERABAD

The assessee has raised 7 grounds of appeal, the sum and substance of which is against the addition of Rs.

Briefly the facts of the case are that the assessee filed his return of income for the AY 2011-12 admitting total income at Rs. 3,57,063/-. The case was reopened u/s 147 and notice u/s 148 was issued on 28/03/2017 and served upon the assessee. The AO completed the assessment u/s 143(3) rws 147 dated 22/12/2017 determined the total income of the assessee at Rs. 63,23,033/- by making the following additions: 1. Cash credit in the ICICI Bank A/c – Rs. 59,90,000 2. Business income - Rs. 79,886/-.

Aggrieved by the order of CIT(A), the assessee is in appeal before the ITAT.

The only issued involved in this appeal is whether the amount received by the assessee is on account of the repayment of loan from Sri K.V. Ramana and whether the explanation offered by the assessee in respect of the source of the following amounts credited in the bank account of the assessee is genuine.

The AO asked the assessee to furnish the loan details given to Sri K.V. Ramana and the AR of the assessee did not produce any details and, therefore, the confirmation given by Shri KV Ramana was rejected. The AO, therefore, made the addition of Rs. 59,90,500/- which reflected as credits on various dates in the account of the assessee held with ICICI Bank during FY 2010-11.

The CIT(A) after considering the submissions of the assessee, confirmed the addition made by the AO by observing as under:

We have considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. It is observed that the burden lies upon the assessee to explain the nature of the transactions, when the amounts were given to Sri K.V. Ramana and the rate of interest. The assessee failed to discharge the onus cast upon him to explain the nature and genuineness of the transaction before the revenue authorities and even before us. Therefore, we find no infirmity in the order of the CIT(A) in confirming the addition of Rs. 59,90,000/- towards repayment of loan received from Sri K.V. Ramana. Accordingly, the grounds raised by the assessee on this issue are dismissed.

As regards the additional ground raised by the assessee contending that the notice issued u/s 148 is invalid, In this connection, CIT(A) observed as under: “4.1 On perusal of the information, I find that the Assessing Officer has fully applied his mind about escapement of income with respect to the deposits in the bank account on the basis of the information obtained from Investigation Unit. The Assessing Officer had independently verified the information obtained from Investigation Unit with the return of income filed by the appellant and came to a conclusion that the income of Rs.33,27,859/- had escaped assessment. The contention of the AR of the appellant that the Assessing Officer did not make enquiries to come to a conclusion that Rs.33,27,859/- remained unexplained. This contention of the AR of the appellant is not acceptable. The Assessing Officer while recording the reasons came to a definite conclusion that the deposit of Rs.66,55,718/- belongs to assessee and his spouse and assessee's share worked out at Rs.33,27,859/-. However, during the course of reassessment proceedings, the appellant gave an explanation that all the amounts reflected in the bank account belongs to him only, eventhough, the account is a joint account and on the basis of the further investigation, the Assessing Officer made an addition of Rs.59,90,OOO/-. In view of the above, I am convinced that the Assessing Officer had reasons to believe that an amount of Rs.33,27,859/- escaped assessment. Hence, I am of the considered view that the reopening of assessment made by the AO is legally correct. Hence, this ground of appeal is rejected.”

In the result, appeal of the assessee is dismissed in above terms. Pronounced in the open court on 11th January, 2022.