MALLELA RAJESH NAIDU,VIJAYAWADA vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, GUNTUR

This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], Visakhapatnam vide DIN & Order No. ITBA/APL/S/250/2022-23/1049221489(1) dated 30.01.2023, arising out of order passed u/s 143(3) of the Income Tax Act, 1961 (in short ‘Act’) dated 28.09.2021 for the Assessment Year (A.Y.) 2020-21.

Brief facts of the case are that the assessee is an individual and a commission agent in buffalo trade. As per the information received from Mallela Rajesh Naidu, Chilakaluripet AIU-HYD, the assessee was intercepted at Gannavaram Airport around 08:30 p.m. on 14.10.2019 and it was found that the assessee was carrying cash of Rs.27 lakhs in his hand baggage. The assessee could not produce any kind of documents to explain the source for the cash he was carrying. Summons u/s 131 were served on him and statement u/s 131(1A) was recorded on 14.10.2019. It was stated by the assessee that Rs.11 lakhs was withdrawn from the bank account of M.R.Global Merchandise Pvt. Ltd. on 05.10.2019, Rs.13 lakhs was received from Sri Vema Gopala Krishna, cousin of the assessee at Hyderabad and Rs.3 lakhs from his own savings. Since the assessee could not properly explain the sources and failed to furnish proof for receipt of Rs.13 lakhs claimed to have received from his cousin, Sri Vema Gopala Krishna, the entire amount of Rs.27 lakhs was seized u/s 132 of the Act on 15.10.2019. After considering the submissions of the assessee, the assessment was completed and the Assessing Officer(AO) made an addition of Rs.27 lakhs to the returned total income. 3. On being aggrieved, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) partly allowed the appeal filed by the assessee and sustained the addition of Rs.13 lakhs as the assessee has not submitted necessary evidence before the Ld.CIT(A).

On being aggrieved, the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal :

On the other hand, the Ld.DR submitted that the confirmation letter does not contain the place of payment made to the assessee. Therefore, it requires verification. Moreover, the said confirmation letter was not placed either before the AO or the CIT(A) . The Ld.DR, therefore, pleaded to remit the matter back to the file of the AO to examine the creditor.

I have heard both the parties and perused the material available on record. It is an admitted fact that the revenue authorities seized an amount of Rs.27 lakhs at Gannavaram Airport around 8:30 p.m. on 14.10.2019. After considering the submissions, the Ld.CIT(A) sustained the addition of Rs.13 lakhs, as the assessee has not produced any satisfactory evidence before him and deleted an amount of Rs.14 lakhs as the assessee has explained the source. Now the assessee filed the confirmation letter by way of affidavit, which shows that the assessee borrowed an amount of Rs.13 lakhs from Sri Vema Gopala Krishna on 14.10.2019. On this aspect, the main contention of the Ld.DR is that there was no mention in the affidavit / confirmation letter that the amount was paid to the assessee at Hyderabad. However, it was the submission of the assessee that at the time of recording the statement u/s 131(1A), the assessee categorically deposed that he had borrowed an amount of Rs.13 lakhs from his cousin, by name, Vema Gopala Krishna at Mallela Rajesh Naidu, Chilakaluripet Hyderabad. But, the assessee has not filed confirmation letter before the revenue authorities saying that he borrowed an amount of Rs.13 lakhs from his cousin at Hyderabad on 14.10.2019. The assessee filed confirmation letter before me and on perusal of the said letter, there is no mention of the place, where the assessee had received an amount of Rs.13 lakhs from his cousin. Apart from this, in the confirmation letter, the loan was given to the assessee on 14.10.2019 by his cousin, Sri Vema Gopala Krishna, who is resident of Kanchikacherla, Krishna Dist. and the said amount was also seized on the same day at Gannavaram airport exit gate. Since there is ambiguity, I remit the matter back to the file of the AO to examine the issue and if the assessee proves that he had received the loan amount of Rs.13,00,000/- from his cousin on 14.10.2019 at Hyderabad, then the assessee is entitled to relief claimed by the assessee for an amount of Rs.13 lakhs. Accordingly, the grounds raised