ACIT Circle - 10(1), Hyderabad v. Shri Vikram Prashanth, Secunderabad

ITA 1036/HYD/2011 | 2005-2006
Pronouncement Date: 28-10-2016 | Result: Partly Allowed

Appeal Details

RSA Number 103622514 RSA 2011
Assessee PAN AGMPP9704A
Bench Hyderabad
Appeal Number ITA 1036/HYD/2011
Duration Of Justice 5 year(s) 5 month(s) 2 day(s)
Appellant ACIT Circle - 10(1), Hyderabad
Respondent Shri Vikram Prashanth, Secunderabad
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2016
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 28-10-2016
Date Of Final Hearing 20-10-2016
Next Hearing Date 20-10-2016
Assessment Year 2005-2006
Appeal Filed On 26-05-2011
Judgment Text
ITA NOS 1035 1036 1037 OF 2011 VIK RAM PRASHANT SECUNDERABAD PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH HYDERABAD BEFORE SMT. P. MADHAVI DEVI JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN ACCOUNTANT MEMBER ITA NOS.1035 1036 & 1037/HYD/2011 (ASSESSMENT YEARS: 2003-04 2005-06 & 2006-07) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 10(1) HYDERABAD VS SRI P.S.VIKRAM PRASHANTH OLD ALWAL SECUNDERABAD PAN: AGMPP 9704 A FOR REVENUE: SHRI A.SITARAMA RAO DR FOR ASSESSEE : SHRI A.V. RAGHURAM O R D E R PER BENCH. ALL ARE REVENUES APPEALS FOR THE A.Y S 2003-04 20 05- 06 AND 2006-07. 2. AT THE TIME OF HEARING IT IS BROUGHT TO OUR NOTICE BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE TAX E FFECT OF THE REVENUES APPEALS FOR THE A.Y 2003-04 AND 2006-07 IS LESS THAN RS.10.00 LAKHS. THE ORDERS OF THE AO GIVING EFFECT TO THE ORDERS OF THE CIT (A) FOR THE RESPECTIVE A.YS ARE ALSO FILED B EFORE US IN SUPPORT OF THE ABOVE CONTENTION. IT IS SEEN THAT FO R THE A.Y 2003- 04 THE INCOME ASSESSED AS PER THE ASSESSMENT ORDER DATED 31.12.2007 IS RS.34 69 156 WHICH CONSTITUTES THE FO LLOWING: (I) PEAK CREDIT OF RS.12 74 287 (II) INVESTMENT IN HOUSE PROPERTY OF RS.21 94 869 DATE OF HEARING : 20.10.2016 DATE OF PRONOUNCEMENT : 28.10.2016 ITA NOS 1035 1036 1037 OF 2011 VIK RAM PRASHANT SECUNDERABAD PAGE 2 OF 8 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT AS PER THE REMAND REPORT OF THE AO THE PEAK CREDIT HAS BEEN WORKED OUT AT RS.5 06 137 AND IF THE SAME IS GIVEN EFFECT TO THE ADDITION ON ACCOUNT OF PEAK CREDIT WOULD BE ONLY RS .5 067 137 AND THE TOTAL OF THE ADDITION WOULD BE RS.27 10 186 AND THE TAX EFFECT THEREON IS LESS THAN RS.10.00 LAKHS. WE ALSO FIND FROM THE GROUNDS OF APPEAL RAISED BY THE REVENUE THAT THE GR IEVANCE OF THE REVENUE IS THAT THE CIT (A) HAS DELETED THE ENTIRE ADDITION MADE ON THE BASIS OF PEAK CREDIT EVEN THOUGH IN THE REM AND REPORT AFTER CONSIDERING THE ADDITIONAL EVIDENCE FURNISHED BY THE ASSESSEE THE PEAK CREDIT WAS REDUCED BY THE AO FRO M RS.12 74 287 TO RS.5 06 317. THEREFORE THE RELIEF CHALLENGED BY THE AO IS ON DELETING OF THE ADDITIONS TO THE EXTEN T OF RS.5 06 317 ONLY AND THE GRIEVANCE OF THE REVENUE IS ONLY ON TH E SAID AMOUNT. THEREFORE WE AGREE WITH THE CONTENTION OF THE ASSE SSEE THAT THE TAX EFFECT IS LESS THAN RS.10.00 LAKHS AND BY VIRTU E OF THE CBDT CIRCULAR NO.21/2015 DATED 10 TH DECEMBER 2015 THE APPEAL OF THE REVENUE FOR THE A.Y 2003-04 IS DISMISSED. 4. SIMILARLY FOR THE A.Y 2006-07 THE COPY OF THE O RDER OF THE AO GIVING EFFECT TO THE CIT (A)S ORDER IS FILE D BEFORE US. IT IS SEEN THAT THE TOTAL INCOME ASSESSED IS RS.20 42 482 AND THE RELIEF GIVEN BY THE CIT (A) IS ALSO THE SAME. THEREFORE T HE TAX EFFECT IS LESS THAN RS.10.00 LAKHS. THEREFORE THE REVENUES APPEAL FOR A.Y 2006-07 IS ALSO DISMISSED. 5. AS FAR AS THE REVENUES APPEAL FOR THE A.Y 2005-0 6 IS CONCERNED BRIEF FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND IS ITA NOS 1035 1036 1037 OF 2011 VIK RAM PRASHANT SECUNDERABAD PAGE 3 OF 8 A PROPRIETOR OF M/S SRINIVASA TEXTILES. THERE WAS A SEARCH OPERATION U/S 132 OF THE ACT IN RESPECT OF SAVINGS BANK A/C NO.CA/01/00000024 HELD IN THE NAME OF THE ASSESSEE AT ANDHRA BANK VANDANA DEGREE COLLEGE EC VENKATAPURAM SECU NDERABAD ON 12.04.2005. IT HAD COME TO THE KNOWLEDGE OF THE SEARCH PARTY THAT THE ASSESSEE HAS DEPOSITED CASH INTO THE BANK A/C FOR PURCHASE OF DEMAND DRAFTS TO BE SUBMITTED WITH APPL ICATION FOR PROCURING LICENSE FOR RETAIL LIQUOR SHOP FROM THE G OVT. THE TOTAL AMOUNT OF THE DDS WAS RS.24 65 000. THE ASSESSEE A PPEARED BEFORE THE ADIT (INVESTIGATION) ON 6/06/2005 AND DU RING THE COURSE OF RECORDING OF HIS SWORN STATEMENT HE FURN ISHED THE SOURCES FOR THE DEPOSITS. IN THE SAID STATEMENT HE ADMITTED A SUM OF RS.8 50 000 TO BE HIS INCOME FROM UNACCOUNTED SO URCES FOR WHICH HE DOES NOT HAVE ANY EXPLANATION. THEREAFTER A NOTICE U/S 153A OF THE ACT WAS ISSUED TO THE ASSESSEE ON 19.02 .2007 REQUIRING HIM TO FURNISH HIS RETURN OF INCOME BY 31 .03.2007. THE ASSESSEE DID NOT COMPLY WITH THE SAID NOTICE OR THE SUBSEQUENT NOTICES ISSUED BY THE AO. THEREFORE THE AO COMPLET ED THE ASSESSMENT EX-PARTE U/S 144 OF THE ACT ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORDS. THE AO OBSERVED THAT THE ASSESSEE HAS EXPLAINED THE SOURCES OF INVESTMENT ORALLY BUT THE SAME CANNOT BE ACCEPTED WITHOUT ANY CORROBORATIVE EVIDEN CE. THE AO OBSERVED THAT THE ASSESSEE IS MAINTAINING SAVINGS B ANK A/C NO.12756 WITH SYNDICATE BANK BOLLARAM BRANCH JT. A/C NO.30322010071610 WITH HIS MOTHER SMT. P. RADHA WIT H SYNDICATE BANK PICKET BRANCH AND THE CURRENT A/C NO.01/0000024 IN THE NAME OF M/S. SRINIVASA TEXTIL ES WITH THE ANDHRA BANK VENKATAPURAM BRANCH. HE THEREFORE CON SIDERED VARIOUS ENTRIES IN THE BANK A/CS AND FOUND THAT THE ASSESSEE HAS ITA NOS 1035 1036 1037 OF 2011 VIK RAM PRASHANT SECUNDERABAD PAGE 4 OF 8 TAKEN DEMAND DRAFTS AMOUNTING TO RS.24 65 000 FROM ANDHRA BANK A/C AND SINCE THERE IS NO EVIDENCE TO SUPPORT THE CLAIM OF THE ASSESSEE WITH REGARD TO THE SOURCES FOR THE SAM E HE TREATED THE ENTIRE AMOUNT OF RS.24 65 000 AS ASSESSEES INC OME. THEREAFTER HE ALSO CONSIDERED THE TWO BANK ACCOUNT S MAINTAINED BY THE ASSESSEE IN HIS INDIVIDUAL AS WELL AS THE JO INT A/C MAINTAINED WITH SYNDICATE BANK AND OBSERVED THAT TH ERE IS A PEAK CREDIT OF RS.11 00 925 ON 25.10.2004. HE THERE FORE TREATED THE SAME AS UNEXPLAINED CASH CREDIT WITHIN THE MEAN ING OF SECTION 68 OF THE ACT. THEREAFTER HE PROCEEDED TO CONSIDER THE FACT THAT THE ASSESSEE HAS PURCHASED A HYUNDAI CAR FOR A N AMOUNT OF RS.7 88 000 AND THAT RS.5 00 000 IS STATED TO HAVE BEEN TAKEN FROM ICICI BANK FOR THIS PURPOSE. AS THE ASSESSEE C OULD NOT PRODUCE ANY STATEMENT OR MATERIAL IN SUPPORT OF TH E ABOVE CONTENTION HE TREATED THE ENTIRE AMOUNT OF RS.7 88 000 AS UNEXPLAINED INVESTMENT WITHIN THE MEANING OF SECTIO N 69 OF THE ACT. THEREFORE THE AO BROUGHT TO TAX A SUM OF RS.8 50 000 AS THE INCOME DECLARED BY THE ASSESSEE RS.11 00 925 AS UN EXPLAINED CASH CREDIT AND RS.16 15 000 AS UNEXPLAINED INVESTM ENTS IN DEMAND DRAFTS BEING THE DIFFERENCE BETWEEN (RS.24 6 5 000 AND RS.8 50 000) AND RS.7 88 000 AS UNEXPLAINED INVESTM ENTS. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) WHO PARTLY ALLOWED THE SAME AND AGAINST THE RELIEF GRAN TED BY THE CIT (A) THE REVENUE IS IN APPEAL BEFORE US. 6. THE LEARNED DR SUPPORTED THE ORDER OF THE AO WH ILE THE LEARNED COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE CIT (A). ITA NOS 1035 1036 1037 OF 2011 VIK RAM PRASHANT SECUNDERABAD PAGE 5 OF 8 7. ON GOING THROUGH THE MATERIAL ON RECORD AS WELL AS THE ORDER OF THE CIT (A) WE FIND THAT THE ASSESSEE HAS FILED RELEVANT MATERIAL BEFORE THE CIT (A) FOR THE A.Y 2002-03 AND 2003-04 IN SUPPORT OF HIS CONTENTIONS AND THE CIT (A) HAS CALL ED FOR A REMAND REPORT FROM THE AO FOR THE A.YS 2002-03 AND 2003-04. NO REMAND REPORT WAS HOWEVER CALLED FOR FOR THE A.Y 2006-07. THE CIT (A) TAKING NOTE OF THE REMAND REPORT FOR A.Y 2002-03 AND 2003-04 ALSO CONSIDERED THE MATERIAL FILED BY THE ASSESSEE BEFORE HER AND CAME TO THE CONCLUSION THAT THE SOURCES FOR THE DEP OSITS INTO THE ANDHRA BANK A/C FOR PURCHASE OF THE DEMAND DRAFTS A RE DULY EXPLAINED BY THE ASSESSEE. SHE THEREFORE DELETED T HE ENTIRE ADDITION OF RS.24 65 000. SHE ALSO CONSIDERED THAT THE AO HAS MERGED THE INDIVIDUAL A/C OF THE ASSESSEE WITH THE JT. ACCOUNT HELD IN HIS MOTHER AND HAS CONSIDERED THE PEAK CRED IT WHICH INCLUDED THE HOUSE LOAN A/C IN THE NAME OF THE ASS ESSEES MOTHER ALSO. THEREFORE SHE HELD THAT THE PEAK CREDIT WORK ED OUT BY THE AO IS NOT CORRECT. AS REGARDS THE UNEXPLAINED INVES TMENT IN HYUNDAI CAR IS CONCERNED SHE CONSIDERED THE STATEM ENT OF LOAN A/C WITH THE ICICI BANK AND ACCEPTED A SUM OF RS.5. 00 LAKHS AS EXPLAINED AND CONFIRMED THE BALANCE OF RS.2 88 000. AGAINST THIS ORDER OF THE CIT (A) THE REVENUE IS IN APPEAL BEFO RE US. 8. THE LEARNED DR HAS SUBMITTED THAT THE CIT (A) HA S ERRONEOUSLY RELIED UPON THE REMAND REPORT OF THE AO FOR THE A.Y 2002-03 AND 2003-04 IN GRANTING RELIEF TO THE ASSES SEE WITHOUT VERIFYING THE ADDITIONAL EVIDENCE FILED BY THE ASSE SSEE. THEREFORE ACCORDING TO HIM THERE IS A VIOLATION OF RULE 46A OF THE INCOME TAX RULES AND THE ORDER OF THE CIT (A) HAS TO BE SE T ASIDE. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTHER HAND WHILE ITA NOS 1035 1036 1037 OF 2011 VIK RAM PRASHANT SECUNDERABAD PAGE 6 OF 8 SUPPORTING THE ORDER OF THE CIT (A) SUBMITTED THAT THE REVENUE HAS NOT RAISED ANY GROUND OF APPEAL FOR ALLEGED VIO LATION OF RULE 46A AND THEREFORE THE LEARNED DR CANNOT AGITATE TH E SAME BEFORE THE TRIBUNAL. FURTHER HE ALSO SUBMITTED THAT THE A SSESSEE HAS FILED ALL THE RELEVANT DETAILS BEFORE THE CIT (A) A ND THE CIT (A) HAS VERIFIED THE SAME HERSELF AND THEREAFTER ALLOWED TH E PLEA OF THE ASSESSEE. HE HAS ALSO DRAWN OUR ATTENTION TO THE RE GISTERED SALE DEEDS EXECUTED BY THE ASSESSEE FOR THE SOURCES OF T HE DEPOSITS OF RS.8.50 LAKHS AND RS.8 70 000 BEING THE SALE CONSID ERATION RECEIVED BY THE ASSESSEE BY WAY OF CHEQUES AND ALSO DEPOSITED INTO THE BANK A/C AND ALSO THE STATEMENT OF THE ICI CI BANK IN EVIDENCE OF LOAN TAKEN FOR PURCHASE OF CAR. THEREFO RE ACCORDING TO HIM THE ORDER OF THE CIT (A) HAS TO BE SUSTAINED. HE ALSO POINTED OUT THAT THE ASSESSEE HAS FILED THE RETURN OF INCOM E THOUGH BELATEDLY FOR THE A.Y 2005-06 OFFERING AN INCOME OF RS.8.50 LAKHS WHICH WAS ADMITTED BY HIM DURING THE COURSE OF SEAR CH. HE SUBMITTED THAT THE CIT (A) HAS TAKEN NOTE OF THIS R ETURN ALSO BEFORE GRANTING RELIEF TO THE ASSESSEE. IN REBUTTAL THE LEARNED DR SUBMITTED THAT THE CIT (A) WHILE GRANTING RELIEF TO THE ASSESSEE HAS DELETED THE ADDITION OF RS.8.50 LAKHS ALSO WHIC H IS MADE ON ACCOUNT OF THE ADMISSION OF THE ASSESSEE DURING THE COURSE OF SEARCH WITHOUT CONSIDERING THAT THE ASSESSEE HAS OF FERED THIS INCOME IN HIS BELATED RETURN OF INCOME AND THEREFOR E WHILE GIVING EFFECT TO THE APPEAL ORDER THE ASSESSED INCOME HAS BECOME LESS THAN THE RETURNED INCOME OF THE ASSESSEE WHICH IS U NSUSTAINABLE. 9. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD WE FIND THAT AS FAR AS THE SOURCE OF CAS H DEPOSITS INTO ITA NOS 1035 1036 1037 OF 2011 VIK RAM PRASHANT SECUNDERABAD PAGE 7 OF 8 THE ANDHRA BANK FOR PURCHASE OF DEMAND DRAFTS ARE C ONCERNED THE ASSESSEE HAS BEEN ABLE TO EXPLAIN ALONG WITH TH E RELEVANT SOURCES I.E. THE REGISTERED SALE DEEDS PRODUCED BY THE ASSESSEE IN SUPPORT OF THE SALE CONSIDERATION TO THE EXTENT OF NEARLY RS.16.00 LAKHS AND THE ASSESSEE HIMSELF HAS OFFERED THE BALA NCE SUM OF RS.8.50 LAKHS IN THE RETURN OF INCOME THOUGH FILED BELATEDLY. THEREFORE THE SOURCES FOR THE PURCHASE OF THE DDS ARE CLEARLY EXPLAINED BY THE ASSESSEE EXCEPT FOR THE SUM OF RS. 8.50 LAKHS. AS REGARDS THE PEAK CASH CREDITS ARE CONCERNED WE FIN D THAT THE ASSESSEE HAS DEPOSITED A SUM OF RS.8.70 LAKHS BEING THE SALE CONSIDERATION (CITED SUPRA) IN HIS BANK A/C AND THE AO HAS TAKEN THE SAID DEPOSIT ALSO INTO CONSIDERATION FOR CALCULATING THE PEAK CASH CREDIT. FURTHER AS POINTED OUT BY THE CIT (A) THE AO HAS MERGED THE BANK ACCOUNTS OF THE ASSESSEE AS WEL L AS THE JT. A/C HELD BY HIM WITH HIS MOTHER FOR THE SAID CALCUL ATION AND THE JT. A/C ALSO CONTAINED THE HOUSE LOAN A/C OF HIS MO THER. THEREFORE WE AGREE WITH THE FINDING OF THE CIT (A) THAT THE CORRECT PEAK CREDIT HAS NOT BEEN WORKED OUT BY THE AO. AS R EGARDS THE INVESTMENT IN HYUNDAI CAR IS CONCERNED THE ASSESSE E HAS FILED THE STATEMENT OF THE LOAN A/C WITH THE ICICI BANK FOR PURCHASE OF THE VEHICLE AND THE CIT (A) HAS CONSIDERED THE SAME IN GRANTING RELIEF UPTO RS.5.00 LAKHS ONLY. TAKING THE SAME INT O CONSIDERATION WE SEE NO REASON TO INTERFERE WITH T HE ORDER OF THE CIT (A). HOWEVER AS HELD BY THE HON'BLE SUPREME CO URT IN THE CASE OF SHELLY PRODUCTS REPORTED IN (2003) 216 ITR 367 THE ASSESSED INCOME CANNOT BE LESS THAN THE RETURNED IN COME OF THE ASSESSEE. THE ASSESSEE HAD OFFERED A SUM OF RS.8.50 LAKHS DURING THE COURSE OF SEARCH AND HAS ALSO OFFERED THE SAME IN HIS RETURN OF INCOME FILED BELATEDLY. THEREFORE WE HOLD THAT THE ASSESSED ITA NOS 1035 1036 1037 OF 2011 VIK RAM PRASHANT SECUNDERABAD PAGE 8 OF 8 INCOME SHALL NOT BE LESS THAN THE RETURNED INCOME O F THE ASSESSEE AS ALSO AGREED TO BY THE LEARNED COUNSEL FOR THE AS SESSEE AT THE TIME OF HEARING. AO IS DIRECTED TO ASSESS THE INCOM E ACCORDINGLY. 10. IN THE RESULT REVENUES APPEAL FOR A.Y 2005-06 IS PARTLY ALLOWED AND APPEALS FOR THE A.YS 2003-04 & 20 06-07 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER 2016. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD DATED 28 TH OCTOBER 2016. VINODAN/SPS COPY TO: 1 ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 10(1) ROOM NO.515 AC GUARDS IT TOWERS HYDERABAD 2 SHRI VIKRAM PRASHANTH 1-5-142/3 VASAVINAGAR COLO NY OLD ALWAL SECUNDERABAD 3 CIT (A)-VI HYDERABAD 4 CIT V HYDERABAD 5 THE DR ITAT HYDERABAD 6 GUARD FILE BY ORDER