NAGARURU SRINIVASA RAO,KURNOOL vs. ACIT., CIRCLE-1, KURNOOL

Assessee is an individual and was deriving income from business of real estate, capital gains and other sources. For the assessment year 2011- 12, he filed the return of income on 31/3/2012 declaring an income of ₹ 2,78,840/-. It was processed under section 143(1) of the Income Tax Act, 1961 (for short “the Act”). Subsequently notice under section 148 of the Act was issued to the assessee and the assessee filed his return of income on 2/11/2018 declaring the same income.

During assessment, learned Assessing Officer asked the assessee to explain the source as per the deposit of ₹ 1.55 crores in his bank account with ICICI bank. Assessee explained that such amount constitutes the gift of ₹ 55 Lacs and 85 Lacs from his father Sri Nagaruru Subrahmanyam and the balance was out of his withdrawals from the bank. He further explained to the learned Assessing Officer that the same was satisfactorily explained to the Assistant Director of Income Tax, investigation unit. Despite the same, the learned Assessing Officer rejected the explanation offered by the assessee and completed the assessment by making addition of ₹ 1.55 crores under section 69B of the Act.

Aggrieved assessee preferred appeal before the learned CIT(A) and reiterated his plea. Learned CIT(A), however, brushed aside the plea of the assessee and observed that the assessee failed to prove his onus as to the sources of gifts received from his father as well as property transaction and no documentary evidence was submitted before the learned Assessing Officer or NFAC, and therefore, no interference was called for with the addition made. 5. Assessee, therefore, preferred this appeal contending that the sources for the deposits to the tune of ₹ 1.55 crores were properly explained by the assessee before the Assistant Director, investigation and also before the authorities but they failed to appreciate the same in its proper perspective and without calling for any record whatsoever, they held that for want of evidence the plea taken by the assessee cannot be Page 2 of 7 accepted. Assessee also produced before us not only the Ledger and cash book but also the bank statements to prove that the gifts made by his father were genuine and were out of the withdrawals made from his bank accounts and a part of such deposit, an amount was the cash withdrawn by him from his own bank account.

Per contra, learned DR disputed the statement made on behalf of the assessee and stated that the assessee did not produce any evidence before the authorities and therefore there was no opportunity for the authorities to verify the veracity of the plea taken by the assessee and also the genuineness of the documents produced by the assessee.

We have gone through the record in the light of the submissions made on either side. When the assessee produced the Ledger and the cash book to support the plea that the money was transferred by his father and also there are certain withdrawals from his bank account, the Bench sought the corroborating evidence to establish the correctness of the entries in the Ledger and cash book. Assessee produced the bank statements and explained the following entries of deposits under credits in his own bank account as well as the account of his father, and such details are as follows:- Nagaruru Srinivasa Rao Cash Deposit and Withdrawn (01.04.2010 to 24.09.2010) S.No. Date Debit Credit Bank Bank Cash (withdrawn) (Deposit) Names Statement book Pg.No. pg.no. 1. 03.04.2010 1,50,000 Andhra 116 156 2. 15.04.2010 3,05,550 KVB-88 148 156 3. 15.04.2010 10,000 Axis 118 156 4. 15.04.2010 4,000 Axis 118 156 5. 15.04.2010 14,000 Axis 118 156 6. 28.04.2010 55,000 IDBI 138 156 7. 06.05.2010 4,00,000 KVB-88 148 156 8. 26.05.2010 9,00,000 KVB-88 148 156 9. 31.05.2010 6,00,000 KVB-88 148 156 10. 31.05.2010 50,000 Axis 118 156 11. 05.06.2010 4,90,000 KVB-88 148 156 12. 14.06.2010 8,00,000 KVB-88 150 158

The above statements clearly establish that during the year the assessee withdrew a sum of ₹ 1.19 crores from his bank accounts, whereas he deposited only about ₹ 57 lakhs which shows that there was some cash

There is no dispute that the assessee has been dealing in real estate, capital gains and other sources. The entries in the cash book of the assessee and his father show the availability of cash in the hands. Further, the assessee submitted the bank statements in support of every entry of the above bank statements and the genuineness of the bank statements is accepted, it leaves no doubt in our mind that there was enough cash available to the assessee and his father and also the gift of money by the father to the son. The impugned orders do not show that the authorities considered this aspect nor did they seek from the assessee as to any documents corroborating the entries in the Ledger and cash book.

In these circumstances, we are of the considered opinion that, if on verification the bank statements are found to be genuine, there is nothing suspicious in this matter and the addition has to be deleted. We, therefore, direct the learned Assessing Officer to verify the entries given in the above table with reference to the entries in the bank statements furnished by the assessee and if such bank statements are found to be genuine, to delete the addition. Subject to the above verification, the appeal of the assessee stands allowed. Grounds are answered accordingly.