Dr. Bhaskar Peddi, Warangal v. Income Tax Officer, Ward-1, Warangal

ITA 688/Hyd/2018 | 2009-2010
Pronouncement Date: 29-11-2019 | Result: Allowed

Appeal Details

RSA Number 68822514 RSA 2018
Assessee PAN ACHPP4588P
Bench Hyderabad
Appeal Number ITA 688/Hyd/2018
Duration Of Justice 1 year(s) 7 month(s) 12 day(s)
Appellant Dr. Bhaskar Peddi, Warangal
Respondent Income Tax Officer, Ward-1, Warangal
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2019
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB-B
Tribunal Order Date 29-11-2019
Date Of Final Hearing 27-11-2019
Next Hearing Date 27-11-2019
Last Hearing Date 03-12-2018
First Hearing Date 10-09-2018
Assessment Year 2009-2010
Appeal Filed On 16-04-2018
Judgment Text
ITA NO 688 OF 2018 DR BHASKAR PEDDI WARANGAL. PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B SMC BENCH HYDERABAD BEFORE SMT. P. MADHAVI DEVI JUDICIAL MEMBER ITA NO.688/HYD/2018 ASSESSMENT YEAR: 2009-10 DR. BHASKAR PEDDI WARANGAL PAN:ACHPP4588P VS. INCOME TAX OFFICER WARD 1 WARANGAL (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI M.V.ANIL KUMAR REVENUE BY : SRI D.J.P. ANAND DR DATE OF HEARING: 27/11/2019 DATE OF PRONOUNCEMENT: 29/11/2019 ORDER THIS IS ASSESSEES APPEAL FOR THE A.Y 2009-10 AGAIN ST THE ORDER OF THE CIT (A)-3 HYDERABAD DATED 17.11. 2017. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE A N INDIVIDUAL DERIVING INCOME FROM SALARY AND PROFESS ION FILED HIS RETURN OF INCOME FOR THE A.Y 2009-10 ON 29-07-2009 ADMITTING TOTAL INCOME OF RS.4 46 640/-. DURING THE ASSESSMEN T PROCEEDINGS U/S 143(3) OF THE ACT THE AO OBSERVED THAT THE ASSESSEE HAS MADE SEVERAL CASH DEPOSITS INTO HIS SB A/C MAINTAINED AT SBH SHIVANAGAR AT WARANGAL BRANCH. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCES FOR THE S AID CASH DEPOSITS. THE ASSESSEE EXPLAINED THAT HE WAS EMPLOY ED WITH KAKATIA MEDICAL COLLEGE WARANGAL AND RECEIVED SALAR Y THROUGH SB A/C NO.30309445755 AT THE SBI INDUSTRIAL ESTATE BR ANCH WARANGAL. IT WAS SUBMITTED THAT HE WAS ALSO DOING P RIVATE PRACTICE AND THE AMOUNTS THEREFROM WERE DEPOSITED I NTO HIS SB ITA NO 688 OF 2018 DR BHASKAR PEDDI WARANGAL. PAGE 2 OF 5 A/C IN SBH SHIVANAGAR BRANCH WARANGAL AND FROM TH IS A/C THE ASSESSEE MADE REGULAR PAYMENTS THEREFROM. THE AO A FTER EXAMINING THE ABOVE REPLY FURTHER DIRECTED THE ASS ESSEE TO EXPLAIN THE SOURCES FOR CASH DEPOSITS OF RS.18.00 L AKHS SINCE HIS GROSS TOTAL RECEIPTS FROM HIS PROFESSION WAS SHOWN AT RS.3.00 LAKHS ONLY. THEREFORE HE WAS ASKED TO EXPLAIN AS TO WHY THIS AMOUNT SHOULD NOT BE TREATED AS HIS UNEXPLAINED INC OME. THE ASSESSEE REPLIED THAT AN AMOUNT OF RS.9.00 LAKHS WA S DRAWN FROM HIS SB A/C OF ICICI BANK HANAMAKONDA ON 1.10.2008 AND THAT THE SAME WAS DEPOSITED IN SBH A/C TO REPAY LOANS. T HE ASSESSEE ALSO SUBMITTED THAT THE RECEIPTS TO THE EXTENT OF R S.2 76 330/- HAS BEEN SHOWN FROM HIS PRIVATE PRACTICE. THE AO HO WEVER DID NOT ACCEPT THE ASSESSEES CONTENTION AND THEREFORE HE OBSERVED THAT THE ASSESSEE HAS NOT EXPLAINED THE SOURCES FOR THE CASH DEPOSITS TO THE EXTENT OF RS.9 42 500/- AND TREATED THE SAME AS UNEXPLAINED INCOME OF THE ASSESSEE. 3. THEREAFTER HE ALSO PROCEEDED TO CONSIDER THE SO URCES FOR THE CASH DEPOSITS MADE INTO HIS A/C MAINTAINED WITH ICICI BANK. THE ASSESSEE EXPLAINED THAT THE SOURCES FOR T HESE DEPOSITS ARE THE WITHDRAWALS FROM SBI SHIVANAGAR BRANCH A/C AND FURTHER THAT HE HAS TAKEN LOAN OF RS.22.00 LAKHS FROM HIS F RIENDS AND RELATIVES. HE DID NOT ACCEPT THIS CONTENTION OF THE ASSESSEE HOLDING IT TO BE AN AFTERTHOUGHT AND BROUGHT IT TO TAX. 4. FURTHER THE AO NOTICED THAT THE ASSESSEE HAS DE BITED AN AMOUNT OF RS.96 000/- ON ACCOUNT OF INTEREST PAI D TO BORROWERS. THE AO HAVING NOT ACCEPTED RS.2.00 LAKH S TO BE LOAN FROM FRIENDS AND RELATIVES DISALLOWED THE INTEREST ALSO AND BROUGHT IT TO TAX. HE ALSO BROUGHT TO TAX THE INCOM E FROM TRADING OF SHARES ADMITTED BY THE ASSESSEE AT RS.1 27 584/- . ITA NO 688 OF 2018 DR BHASKAR PEDDI WARANGAL. PAGE 3 OF 5 5. AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE T HE CIT (A) AGAINST THE ADDITIONS OF UNEXPLAINED CASH DEPO SITS IN SBH SHIVANAGAR BRANCH AND THE UNEXPLAINED CASH DEPOSITS IN ICICI BANK A/C AND THE INTEREST PAID ON BORROWED CAPITAL. THE CIT (A) CONFIRMED THE ORDER OF THE AO AND THE ASSESSEE IS I N SECOND APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL. 1. THE CIT(A) AS WELL AS THE ASSESSING OFFICER ERRE D IN LAW AND FACTS OF THE CASE IN ADDING RS. 9 42 500/- AS UNEXPLAINED CASH DEPOSIT IN THE SBH SHIVANAGAR BRA NCH WARANGAL. YOUR APPELLANT OBJECTS TO THE ADDITION. 2. THE CIT(A) AS WELL AS THE ASSESSING OFFICER OUGH T TO HAVE ACCEPTED THE LOANS TAKEN FROM FRIENDS AND RELA TIVES AS THE SOURCE FOR DEPOSIT IN ICICI BANK ACCOUNT OF RS. 2 00 000/- THEREFORE THE ADDITION MAY BE DELETED. 3. THE CIT(A) AS WELL AS THE ASSESSING OFFICER OUGH T TO HAVE APPRECIATED THE FACT THAT ALL THE FRIENDS AND RELATIVES HAVE CONFIRMED TO HAVE GIVEN LOAN TO YOUR APPELLANT RS. 2 00 000/- CANNOT BE CONSIDERED AS UNEXPLAINED CASH CREDIT. 4. THE CIT(A) OUGHT TO HAVE ALLOWED THE INTEREST PA ID ON BORROWED CAPITAL OF RS. 96 000/- AND APPRECIATED TH E FACT THAT UNSECURED LOANS ARE GENUINE. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING YOUR APPELLANT PRAYS THAT THE A DDITION MAY BE DELETED. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ADDITIONS MADE BY THE AO ARE ON ACCOUNT OF CASH DEPOSITS INTO HIS TWO BANK A/CS THOUGH THE ASSESSEE HAS CLEA RLY EXPLAINED THE CASH WITHDRAWALS FROM ONE BANK A/C IN ICICI BAN K TO BE THE SOURCES FOR CASH DEPOSITS INTO THE OTHER BANK A/C I N SBH A/C. HE SUBMITTED THAT IN VIEW OF THE SAME ONLY THE PEAK C REDIT SHOULD BE CONSIDERED FOR MAKING THE ADDITION AND NOT THE ENTI RE CASH DEPOSITS AS MADE BY THE AO. ITA NO 688 OF 2018 DR BHASKAR PEDDI WARANGAL. PAGE 4 OF 5 7. THE LEARNED DR ON THE OTHER HAND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 8. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD I FIND THAT THE ADDITIONS ARE ON ACCOUNT OF UN-EXPLAINED SOURCES FOR THE CASH DEPOSITS INTO BANK A/CS OF THE ASSESSEE IN SBH AND ICICI. THE TOTAL OF THE DEPOSITS WERE RS.18 .00 LAKHS OUT OF WHICH THE AO HAS ACCEPTED THE SOURCES FOR RS.9 L AKHS ONLY AND THE BALANCE HAVE BEEN BROUGHT TO TAX AS UNEXPLAINED CASH. THROUGH CASH FLOW STATEMENT THE ASSESSEE HAS EXPLAI NED AS TO HOW THE AMOUNTS WITHDRAWN FROM ICICI BANK A/C HAVE BEEN DEPOSITED INTO THE SBH BANK A/C. I FIND THAT THE A O HAS NOT RECORDED THAT HE THE ASSESSEE HAVING ANY OTHER SOUR CE OF INCOME. IN SUCH CIRCUMSTANCES I FEEL THAT THE AO OUGHT NOT TO HAVE TREATED THE ENTIRE DEPOSITS AS UNACCOUNTED INCOME O F THE ASSESSEE. IF THE SAID CASH DEPOSITS ARE TREATED AS INCOME FROM PROFESSION THEN ONLY NET INCOME OUGHT TO HAVE BEE N BROUGHT TO TAX AND IF THE SOURCES OF DEPOSITS ARE NOT ACCEPTED THEN ONLY PEAK CREDIT HAS TO BE CONSIDERED. HAVING GONE THROUGH TH E CASH FLOW STATEMENT SUBMITTED BY THE ASSESSEE AND I AM SATISF IED THAT THE WITHDRAWALS FROM ONE BANK A/C ARE THE SOURCES OF DE POSITS INTO THE OTHER BANK A/C AS THE DATES AND AMOUNT OF WITHD RAWALS AND DEPOSITS COINCIDE. THEREFORE I AGREE WITH THE LEAR NED COUNSEL FOR THE ASSESSEE THAT THE PEAK CREDIT ALONE THE SOURCE OF WHICH IS NOT EXPLAINED BY THE ASSESSEE IS TO BE BROUGHT TO TAX. THE AO IS DIRECTED ACCORDINGLY. 9. AS REGARDS THE HAND LOAN OF RS.2.00 LAKHS WHICH REMAINED UNEXPLAINED I FIND THAT THE ASSESSEE HAS NOT FILED ANY EVIDENCE EVEN BEFORE THE TRIBUNAL TO PROVE THAT TH EY ARE HAND ITA NO 688 OF 2018 DR BHASKAR PEDDI WARANGAL. PAGE 5 OF 5 LOANS. HENCE THE SAME IS CONFIRMED AND DISALLOWANCE OF INTEREST THEREON IS ALSO CONFIRMED. 10. IN THE RESULT ASSESSEES APPEAL IS PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH NOVEMBER 2019. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD DATED 29 TH NOVEMBER 2019. VINODAN/SPS COPY TO: 1 DR. BHASKAR PEDDI C/O M. ANANDAM & CO. C.AS 7A S URYA TOWERS SP ROAD SECUNDERABAD 3 2 ITO WARD-1 WARANGAL 3 CIT (A)-3 HYDERABAD 4 PR. CIT 3 HYDERABAD 5 THE DR ITAT HYDERABAD 6 GUARD FILE BY ORDER