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Income Tax Appellate Tribunal, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE
आदेश /O R D E R 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) vide DIN & Order No.ITBA/NFAC/S/250/2022- 23/1047736906(1) dated 30.11.2022 for the Assessment Year 2013-14.
Brief facts of the case mentioned in assessment order are that the assessee is an individual, engaged in the business of selling medicines and general items in the name and style M/s Renuka Medical and General Stores. The assessee filed return of income for the A.Y.2013-14 on
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30.09.2013, declaring gross total income at Rs.3,76,402/-, on which deduction was claimed under Chapter VIA of Rs.74,861/-. The assessee also claimed agricultural income of Rs.78,000/-. The return was processed u/s 143(1). The case was selected for scrutiny under CASS and the notices u/s 143(2) and 142(1) of the Income Tax Act, 1961 (in short ‘Act’) were issued and served on the assessee. In response to the notices, the representative of the assessee produced certain details. The Assessing Officer (AO) asked for the details of account of liabilities of Rs.8,43,000/-, difference in cash balance as per cash book of Rs.3,56,758/- with that of the balance sheet of Rs.18,057/-, amount shown in the HDFC Account No.9524 as balance, though no amount shown in the balance sheet, balance outstanding in the statement of loan with APSFC in two loans of Rs.9.79 lakhs as per details filed though as per balance sheet, the same was shown at Rs.9.92 lakhs, interest paid by the assessee as per statement of loan with APSFC of Rs.1,88,346/-, but as claimed in the accounts of Rs.2,06,840/-, names and addresses of loan creditors for unsecured loans of Rs.20,00,000/- along with confirmations, explanation regarding turnover shown of Rs.1,12,94,526/- not commensurate with the bank deposits made and amount received of Rs.13,00,000/- from assessee’s father, Shri Appala Naidu on different
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dates in cash along with copies of returns of income and necessary evidences of father regarding the sources of Rs.13,00,000/-. But the assessee, inspite of all these admitted only to the extent of Rs.1,08,000/- in the return of income. The AO has issued show cause notice, but the assessee did not respond. Therefore, the assessment was completed on the available records and thereby making an addition of Rs.1,26,000/- on account of income from house property, of Rs.8,43,000/- on account of fictitious liability, of Rs.13,00,000/- on account of deposits in bank given by assessee’s father, Shri Ch.Appala Naidu and charging of tax u/s 115BBE.
Aggrieved by the order of the Ld.AO, the assessee preferred an appeal before the Ld.CIT(A). Considering the submissions of the assessee, the Ld.CIT(A) partly allowed the appeal.
On being aggrieved, the assessee preferred appeal before the Tribunal and raised the following grounds :
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. 2. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs.13,00,000 made by the assessing officer u/s 69 of the Act towards alleged unexplained cash deposits in bank account. 3. Without prejudice to the above, the learned Commissioner of Income Tax (Appeals) ought to have held that the assessing officer is not
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justified in subjecting the above addition of Rs.13,00,000 to tax under the provisions of s..115BBE of the Act. 4. Any other grounds may be urged at the time of hearing.
Ground No.1 and 4 are general in nature which does not require specific adjudication.
The only issue raised in ground no. 2 and 3 before me is whether the AO / CIT(A) is justified in sustaining the addition of Rs.13,00,000/- as unexplained cash deposits in the bank account. The contention of the Ld.AR is that the assessee deposited an amount of Rs.13,00,000/- given by his father, Shri Ch.Appala Naidu, who is a landlord, having sizeable agricultural holdings. Therefore, the father of the assessee had given cash of Rs.13,00,000/- to him from time to time, which in turn was deposited on various dates in the bank account of the assessee. The Ld.AR contended that the assessee has shown the agricultural income of the assessee in the return of income and the amount received from his father, by selling the agricultural produce from time to time. But the Ld.CIT(A) without considering the same, dismissed the appeal of the assessee. The Ld.AR submitted that assessment order was passed on 10.03.2016, much prior to the demonetisation period. The Ld.AR further submitted that the assessee
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has explained the sources of his deposits, therefore, the order passed by the Ld.CIT(A) be set aside.
On the other hand, the Ld.DR submitted that the assessee has not properly explained the source of cash deposits, therefore, the AO made addition u/s 69 of the Act and the Ld.CIT(A) rightly confirmed the same. Therefore, the orders passed by the Ld.CIT(A) be confirmed.
I have heard both the parties and perused the material placed on record. There is no dispute about the fact that the father of the assessee has an agricultural land to the extent of 17 acres. The only contention of the revenue is that the assessee is having 4 acres of agricultural land, thereby he earned Rs.78,000/- and the assessing officer considered the average income per acre and computed the income of the father of the assessee for his entire 17 acres. But the contention of the assessee is that the amount which was deposited is not only the income received from his father, but it includes the amounts whatever received from the father of the assessee by selling the agricultural produce and handed over to the assessee, which was deposited. Considering the facts and circumstances of the case and considering the agricultural holdings of the assessee and his father and operations of the assessee and the fact that the assessee has not
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deposited the entire Rs.13 lakhs on one day, but it is more than 6 to 7 times, I am of the view that the assessee has explained the source of deposits that his father has given money to him. Hence, I direct the AO to delete the addition made u/s 115BBE and allow the grounds raised by the assessee.
In the result, appeal of the assessee is allowed. Order pronounced in the open court on 8th March, 2023.
Sd/- Sd/- (एस बालाकृष्णन) (दुव्वूरु आर.एल रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सदस्य/ACCOUNTANT MEMBER न्याधयक सदस्य/JUDICIAL MEMBER Dated : 08.03.2023 L.Rama, SPS
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आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– Chalumuru Venkata Rao, #1, Opp. RTC Complex, Vizianagaram 2. रधजस्व/The Revenue – Income Tax Officer, Ward-1, Vizianagaram 3. 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