RAKESH BABU PUNUGA,HYDERABAD vs. INCOME TAX OFFICER, WARD-12(3), HYDERABAD

आदेश / ORDER Aggrieved by the order dated 15/01/2024 passed by the learned Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), in the case of Rakesh Babu Punuga (“the assessee”) for the assessment year 2017-18, assessee preferred this appeal. 2. Brief facts of the case are that the assessee is an individual and filed his return of income for the assessment year 2017-18 on 10/10/2017 disclosing an income of Rs. 2,59,030/- as income from salary. The case was selected for scrutiny through CASS to verify cash deposits made during demonetization period in the financial year 2016-17. On verification of the cash deposits in the bank accounts of the assessee with ICICI Bank and Axis Bank, learned Assessing Officer found those to be to the tune of Rs. 5,04,000/- and Rs. 5,10,500/- respectively, stating that the assessee did

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not respond to the notices issued, the learned Assessing Officer passed the order dated 16/09/2019 under section 144 of the Income Tax Act, 1961 (‘the Act’), making the addition of the entire amount of Rs. 10,14,500/-. 3. Aggrieved, assessee preferred appeal before the learned CIT(A) and submitted that the bank statements and explanation justifying the deposits. Learned CIT(A) accepted such an explanation in respect of Rs. 1.84 lakhs in ICICI Bank and Rs. 1,10,500/- in Axis Bank and confirmed the balance of addition of Rs. 3.2 lakhs in ICICI Bank and Rs. 4 lakhs in Axis Bank. While doing so, learned CIT(A) observed that the plea of the assessee as to the deposit of withdrawal amounts cannot be accepted because, such withdrawals were made from ATM in small amounts. In respect of Rs. 4 lakhs with Axis Bank, learned CIT(A) observed that there was no evidence at all. 4. Assessee, therefore, filed this appeal. At the time of hearing, learned AR submitted that learned CIT(A) without causing any enquiry as to the genuineness of the withdrawal of amounts to the tune of Rs. 3.2 lakhs, dismissed the plea taken by the assessee, but as a matter of fact, such withdrawals totally cover the amount of Rs. 3.2 lakhs in ICICI Bank. He also submitted that the assessee filed the confirmation letters in respect of Rs. 4 lakhs with Axis Bank, which now needs verification. He submitted that not having any knowledge about the tax proceedings, the assessee being an individual, could not produce these confirmation letters earlier. 5. Learned DR vehemently opposed the request made on behalf of the assessee on the ground that more than sufficient opportunity was granted by the Revenue authorities, but without availing the same, it is not open for the assessee now to seek the verification of the new evidence now produced in the shape of verification letters. He further submitted that the learned CIT(A) perused the bank statements and took a view that the

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withdrawals were through ATM and that too small amounts. According to learned DR, if such a request is granted, it would lead to never ending process and contended that in the absence of any evidence what-so-ever, the authorities are justified in making the addition made. 6. On a careful consideration of the material now brought to my notice at the time of hearing, I found an entry at page No. 19 of the paper book at serial No. 337 representing withdrawal of Rs. 2 lakhs. In the same page, I further found withdrawals through ATM of an amount of Rs. 70,000/- @ Rs. 10,000/- each on the same day. Like-wise at page No. 29, there was withdrawal of Rs. 50,000/- @ Rs. 10,000/- each on 08/11/2016. Put together, all these withdrawals make up an amount of Rs. 3.2 lakhs found to have been deposited in ICICI Bank during demonetization period. When an addition of Rs. 3.2 lakhs is confirmed, in my opinion it cannot be said that the corresponding withdrawals are trivial in nature. If such withdrawals are found to be correct, non-utilization of such withdrawals, per se, cannot be a ground to reject the same. 7. In respect of the confirmed addition of Rs. 4 lakhs in Axis Bank, assessee produced two confirmation letters in the shape of affidavits of his father and father-in-law, which are to be found at page Nos. 32 to 36 of the paper book. These confirmation letters were not produced before the Revenue authorities and the assessee pleads that being non-conversant with the tax proceedings, he could not produce the same at relevant time. I do not find anything suspicious about this, since it is a verifiable fact and causing verification will not prejudice the case of the Revenue. 8. I am, therefore, of the considered opinion that causing verification of the withdrawals to explain the deposits with ICICI Bank and confirmation letters to explain the deposit with Axis Bank would be proper and would go to the root of the matter. Further, the highest that would happen by affording an opportunity to the assessee to prosecute his case

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diligently before the learned Assessing Officer by submitting the evidence, is that a cause could be decided on merits. When the technicalities are pitted against the delivery of substantial justice, the former must give way to the latter.

Order pronounced in the open court on this the 23rd day of April, 2024. Sd/- (K. NARASIMHA CHARY) JUDICIAL MEMBER Hyderabad, Dated: 23/04/2024

TNMM

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