BUDUMURU SANDEEP KUMAR,VIZIANAGARAM vs. INCOME TAX OFFICER, WARD-1, VIZIANAGARAM
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Income Tax Appellate Tribunal, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE
Per Shri Duvvuru RL Reddy, Judicial Member :
This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi in DIN & Order No. ITBA/NFAC/S/250/2023-24/1056143063(1) dated 15.09.2023, arising out of order passed u/s 143(3) of the Income Tax Act, 1961 (in short ‘Act’) dated 30.12.2019 for the Assessment Year (A.Y.) 2017-18. 2 I.T.A. No.282/Viz/2023, A.Y.2017-18 Budumuru Sandeep Kumar, Vizianagaram
Brief facts of the case are that the assessee filed his return of income for A.Y.2017-18 on 30.07.2017, admitting total income of Rs.4,98,710/-. The assessee’s case was selected for scrutiny through CASS to verify the credit card payments made during the A.Y.2017-18. The Assessing Officer (AO) issued various statutory notices to the assessee to file certain details and information was also called for from the bank u/s 133(6) of the Act. On perusal of the bank statement, the AO noticed that the assessee had deposited Rs.12,45,450/- during the F.Y.2016-17, out of which Rs.5,30,600/- was made in cash. The AO completed the assessment and made addition of Rs.12,45,450/- as unexplained investment u/s 69A of the Act, taxed @60% u/s 115BBE of the Act and passed order dated 30.12.2019, as the assessee failed to furnish the complete details regarding the source of cash payment made towards credit cards during F.Y.2016-17, relevant to the A.Y.2017-18. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A), the Ld.CIT(A) upheld the order of the AO and dismissed the appeal of the assessee.
Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal :
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The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case.
The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs.12,45,450 made by the assessing officer u/s 69A of the Act towards alleged unexplained payment of credit card dues.
The learned Commissioner of Income Tax (Appeals) ought to have granted opportunity to the appellant before rejecting the affidavits filed by the appellant by treating the same as additional evidence.
Any other grounds may be urged at the time of hearing.
It is the contention of the Ld.AR that the assessee is having credit card and all the deposits of Rs.12,45,450/- made in his IndusInd Bank account are nothing but the repayment of credit card dues made by his parents and his friend, Mr.Jambuluri Tejaswara Reddy as they used his card for their needs. Out of Rs.12,45,450/-, cash of Rs.5,30,600/- was deposited by assessee’s parents and the source being the cash receipts from the small departmental store which they run. Further, fund transfer of Rs.2,45,000/- and Rs.4,15,000/- were made by his parents and friend respectively. The Ld.AR further submitted that to that effect, the assessee filed affidavits as evidence before the Ld.CIT(A), but the Ld.CIT(A) has not considered the affidavits since the assessee has not filed petition under Rule 46A of Income Tax Rules to admit the additional evidence. He submitted that there is no unexplained investment u/s 69A of the Act and 4 I.T.A. No.282/Viz/2023, A.Y.2017-18 Budumuru Sandeep Kumar, Vizianagaram
thus levying of tax u/s 115BBE does not arise as it was only repayment of credit card dues. He, therefore, pleaded to set aside the orders passed by the revenue authorities and allow the appeal of the assessee.
Per contra, the Ld.DR submitted that the assessee has not filed petition u/s 46A before the CIT(A) and hence, the Ld.CIT(A) has not considered the additional evidence filed by the assessee. The Ld.DR therefore pleaded to uphold the order passed by the Ld.CIT(A) and dismiss the appeal of the assessee.
I have heard both the parties and perused the material available on record. It is undisputed fact that major portion of the cash was withdrawn through credit card of the assessee and utilized by the parents of the assessee and his friend, who repaid the same. To that extent, the assessee filed affidavits from his parents and friend. Moreover except an amount of Rs.5,30,600/-, remaining amount of Rs.7,14,850/- was paid through banking channels as fund transfer of Rs.6,60,000/- (Rs.2,45,000/- + Rs.4,15,000/-) from his parents and friend and the balance amount of Rs.54,850/- was met through assessee’s salary earnings, but the revenue authorities have not considered the same and made addition of Rs.12,45,450/- as unexplained investment u/s 69A of 5 I.T.A. No.282/Viz/2023, A.Y.2017-18 Budumuru Sandeep Kumar, Vizianagaram
the Act. Therefore, considering the affidavits filed by the assessee explaining the source for cash deposit of Rs.5,30,600/- derived from a small departmental store which they operate and the receipts are mostly in cash and fund transfer of the balance amount of Rs.7,14,850/- through banking channels, I am of the opinion that the assessee has properly explained the source for cash deposits of Rs.5,30,600/-. Moreover, the assessee or his parents have not purchased any asset through credit card and most of the times, they utilised the card only for withdrawal of the cash. Therefore, considering the above facts and circumstances of the case and since the assessee has explained the source for cash deposits, I direct the AO to delete the addition made. Accordingly, the grounds raised by the assessee are allowed.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 28th February, 2024. (दुव्वूरु आर.एल रेड्डी) (DUVVURU RL REDDY) न्याधयक सदस्य/JUDICIAL MEMBER Dated : 28 .02.2024 L.Rama, SPS
6 I.T.A. No.282/Viz/2023, A.Y.2017-18 Budumuru Sandeep Kumar, Vizianagaram
आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– Shri Budumuru Sandeep Kumar, Near Ramabhajana, Rangaraya Puram, Bobbili, Vizianagaram 2. रधजस्व/The Revenue – Income Tax Officer, Income Tax Office, Ward-1, Koppu Guarana Building, Siddartha Nagar, Vizianagaram
The Principal Commissioner of Income Tax, Visakhapatnam 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 5..गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam
