Chandramouli Manchikanti, Hyderabad vs Department Of Income Tax

This appeal is preferred by the Revenue against the order of the CIT (A)-V, Hyderabad dated 31.10.2014 relating to A.Y 2010-

11.

2. Brief facts of the case are that the assessee, an individual and Managing Partner of M/s Guru Raghavendra Constructions, engaged in the business of Civil Construction, filed his return of income for A.Y 2010-11 on 9.3.2011 admitting total income of Rs.10,86,360. During the assessment proceedings u/s 143(3) of the I.T. Act, AO observed that the assessee has shown a sum of Rs.71,51,710 as opening cash as on 1.4.2009. On verification of the firm's cash book, he observed that the assessee has withdrawn an amount of Rs.50.00 lakhs as cash from the firm on 31.03.2009. Since the assessee could not explain the source

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of balance cash of Rs.21,51,710, AO treated it as unexplained cash credit and brought it to tax.

3. Aggrieved, the assessee preferred appeal before the CIT (A) stating that the AO has considered only the cash withdrawal of Rs.50.00 lakhs from the firm, but has not considered the other sources of his income as well as his income from earlier years and more particularly his returned income of Rs.51,58,180 for A.Y 2009-10. He also made a statement that apart from his income, family cash drawings from the firm as on 31.03.2009 also included Rs.30.00 lakhs in his wife's name. Thus, he explained that the assessee had sufficient cash of Rs.71,51,710 as on 1.4.2009. The CIT (A) accepted the contention of the assessee that the cash withdrawals of his wife explained the sources for the balance of the cash on hand and deleted the additions made by the AO. Against the relief given by the CIT (A), the Revenue is in appeal before us.

4. It is the case of the Revenue that the CIT (A) has erred in giving relief to the assessee without properly verifying the evidence filed by the assessee. It was submitted that the assessee had not shown the cash withdrawal made by his wife as loan either in the balance sheet of the firm or in his personal statement of affairs for the A.Y 2011-12 and 2012-13 and therefore, the addition made ought to have been confirmed. None appeared on behalf of the assessee.

5. On perusal of the material filed by the assessee and the orders of the authorities below, we find that the assessee had claimed that the assessee's wife Smt. M. Vishala had withdrawn a sum of Rs.30.00 lakhs from the firm as is evident from page 7

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of the paper book filed by the Revenue. We also find that in the balance sheet of the assessee, unsecured loan from Smt. M. Vishala is shown as Rs.43,65,843. From pages 4 to 6 is the cash book for the financial year 2009-10 wherein the opening balance is shown as Rs.71,51,709. Though the assessee has explained the source of the opening balance to be a loan from his wife Smt. M. Vishala, the details of the unsecured loan from Smt.Vishala is Rs.43,65,843 are not available and it is not known as to whether it included the loan of Rs.30.00 lakhs as claimed by the assessee. In our opinion, these facts need verification by the AO. In view of the same, we deem it proper and fit to set aside the issue to the file of the AO only to verify whether the unsecured loan from Smt. M. Vishala include the loan of Rs.30.00 lakhs which she had withdrawn from the firm and whether it is the source for the balance cash with the assessee and if it is found to be correct, then no addition shall be made.

6. In the result, appeal filed by the Revenue is treated as allowed for statistical purposes.

Order pronounced in the Open Court on 24th April, 2015.

Sd/- Sd/- (P.M. Jagtap) (P. Madhavi Devi) Accountant Member Judicial Member Hyderabad, dated 24 April, 2015. th

Vnodan/sps Copy to:

1. Income Tax Officer, Ward 4(2) Hyderabad

2. Sri Chandramouli Manchikanti, 3-4-15 Flat No.101, Megaciti Residency, Narayanguda Hyderabad

3. The CIT(A) V Hyderabad

4. The CIT - IV Hyderabad

5. The DR, ITAT, Hyderabad

6. Guard File

By Order

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