VENKATA PRABHAKAR RAO AMANCHARLA ,NELLORE vs. INCOME TAX OFFICER, WARD-5, NELLORE

Assessee is an individual, filed his return of income for the assessment year 2014-15 on 24/02/2015, declaring income of Rs.4,56,350/-. Assessment under section 144 of the Income tax Act, 1961 (“the Act”) was completed by order dated 30/12/2016 by making certain additions, which include, for the purpose of this appeal, Rs.2,39,223/- towards short computation of capital gains, Rs.24,880/- under section 50C of the Act, Rs.11,50,000/- towards disallowance of credit in the name of Shri K.Bhaskar Reddy, Rs.2.87 lakhs towards unexplained deposits in SBI account, Rs.10.72 lakhs towards unexplained deposits in Axis bank, Rs.4,00,000/- by way of estimation of income from aqua business.

Assessee preferred appeal before the learned CIT(A) challenging these additions, but the learned CIT(A) did not agree with the contentions raised by the assessee and upheld the additions. Hence, this appeal.

Learned AR submitted that in so far as the short computation of capital gain to the tune of Rs.2,39,223 is concerned, such an amount represents interest on housing loan. Assessee produced a certificate from the banker, which clearly shows that the assessee obtained loan for purchase of house and paid interest during the year. Since it is explained properly, I accept the same and this addition is liable to be deleted.

Assessee has not pressed ground No.2 in respect of income under section 50C of the Act to the tune of Rs.24,880/-. Hence, this ground is dismissed.

Coming to the addition of Rs.11.5 lakhs disallowance of credit in the name of Sri Kalikati Bhaskar Reddy is concerned, there is no dispute of the fact that the said loan was obtained and repaid in the same year and having regard to this fact, I accept the contention of the assessee and direct the learned Assessing Officer to delete this addition.

Assessee explained the deposit in the State Bank of India to the tune of Rs.2.87 lakhs, stating that for the purpose of depositing the said amount in the housing loan, he withdrew identical amounts from his State Bank of India account on 16/04/2013 and 17/06/2013. On perusal of the bank statement, I am satisfied that this contention of the assessee is supported by the bank statement and can be accepted. I, therefore, direct the learned Assessing Officer to delete this addition also.

Insofar as the addition of Rs.10.72 lakhs of deposits in Axis bank is concerned, no evidence is produced by the assessee and though the assessee contended that part of this amount namely, Rs.9,00,000/- represent the loan taken from Shri Bhaskar Reddy is deposited in Axis bank, I do not find any substance in the contention, because such a loan amount is given credit towards the Kotak Mahindra bank and therefore, no basis for this deposit is explained. So also the estimate from the aqua business is concerned, assessee did not adduce any evidence and on the other hand not pressed the same. I, therefore, dismiss the ground to this extent.

To summarize my findings, this appeal stands allowed insofar as the addition of Rs.2,39,223/- made on account of short term capital gains, Rs.11.5 lakhs representing the credit in the name of Shri Bhaskar Reddy and Rs.2.87 lakhs deposits in the SBI. Appeal stands dismissed in respect of addition of Rs.24,880/- made under section 50C of the Act, Rs.10.72 lakhs towards the deposits in Axis Bank and Rs.4 lakhs made on estimation from the business of aqua are concerned.

In the result, appeal of the assessee is allowed in part. Order pronounced in the open court on this the 7th day of October, 2024.