Sri Bhanuprakash Ranga, Mahabubnagar ... vs Department Of Income Tax

ITA No.1641/Hyd/2013 : Assessment year 2009-10

Income Tax Officer Ward 2, V/s. Shri Bhanu Prakash Ranga, Mahabubnagar Jadcherla, Mahabubnagar Dist.

(PAN - AECPR 0957 F) (Appellant) (Respondent)

Appellant by : Shri Rajat Mitra DR

Respondent by : Shri Mohd Afzal

Date of Hearing 30.4.2015 Date of Pronouncement 01.05.2015

ORDER

Per G.C.Gupta, Vice President:

This appeal by the Revenue for the assessment year 2009-10 is directed against the order of the Commissioner of Income-tax(Appeals) V, Hyderabad dated 21.08.2013.

2. Grounds of appeal of the Revenue are as under-

"1. The CIT(A) erred both in law and in facts.

2. The CIT(A) overlooked the fact that the DDs were utilised not at the initial stages either for participating in the auction or towards payment of caution deposit but for carrying on the liquor trade towards purchase of stocks.

3. ....."

2 ITA No.1641/Hyd/2013 Shri Bhanu Prakash Ranga, Jadcherla, Mahabubnagar Dist.

3. The Learned Departmental Representative submitted that the Demand Drafts were claimed to have been purchased by the friends of the assessee and not by the assessee himself for the payment to the concerned Government Department, but the assessee could not prove the same. He referred to the relevant portion of the assessment order in support of the case of the Revenue. He has relied on the order of the Assessing Officer.

4. The learned counsel for the assessee submitted that the two persons, viz. Shri Balavardhan Goud and Shri Rajvardhan Goud were friends of the assessee and he has allowed them to use his account to deposit cash for purchase of demand drafts payable to M/s. AP Beverages Corporation, Mahabubnagar, as these persons were not having bank accounts at that time. He submitted that assessee has filed confirmation from these two persons that they were not having any bank account initially and accordingly the assessee's bank account was utilised. He also submitted that the two persons were assessed to income-tax regularly with the same Assessing Officer with whom the jurisdiction of the assessee's assessment lies. All the details of the cheque No. date, amount, etc. and also the copy of the ledger in the books of M/s.AP Beverages Corporation Ltd., Mahabubnagar were filed before the Revenue authorities. He submitted that there is no justification for any addition made in the case of the assessee. The learned counsel for the assessee further pointed out that both these persons had appeared before the Assessing Officer in confirmation of the above facts. He relied on the order of the CIT(A).

5. We have considered the rival submissions and perused the orders of the Assessing Officer and the CIT(A). We find that the assessee has claimed right form the assessment stage that the 3 ITA No.1641/Hyd/2013 Shri Bhanu Prakash Ranga, Jadcherla, Mahabubnagar Dist.

above mentioned two persons were his friends and he has allowed them to use his account to deposit cash for purchase of demand drafts payable to the M/s. AP Beverages Corporation, Mahabubnagar, as these two persons were not having bank account at the relevant time. The assessee has filed confirmation letters from the two persons to the effect that they were not having bank account initially and as such, the assessee's bank account was utilised. It is also undisputed that these two persons were assessed to income-tax regularly and have confirmed these transactions. All the relevant details of the bank were submitted before the Assessing Officer. A copy of the retailer ledger info in the books of AP Beverages Corporation, Mahabubnagar was also filed wherein the amounts in question were clearly reflected and tallied in the case of M/s. Koilkonda Wines and Shri Sai Durga Wines owned by the above mentioned two friends of the assessee. The assessee has produced these two persons before the Assessing Officer, who are regular IT assessees and have filed their PAN Numbers. It is claimed that these two persons are IT assessees with the same circle of Assessing Officer, where the assessee himself is being assessed. We find that the CIT(A) has given a finding that it has verified under powers vested in him under S.250(4) of the Act that the amounts mentioned in the letter of the bank in respect of the bank account of the assessee and the amounts mentioned in the ledger accounts of AP Beverages Corporation Mahabubnagar are correct. The CIT(A) has observed that if the Assessing Officer had any doubt about the genuineness of the cash deposits in the assessee's bank account, he could have verified the income-tax returns of Shri Balavardhan Goud and Shri Rajvardhan Goud for the relevant assessment years. In these facts, we are of the view that it could not be said that the amounts deposited in the bank account of the assessee were investments of the assessee and accordingly, 4 ITA No.1641/Hyd/2013 Shri Bhanu Prakash Ranga, Jadcherla, Mahabubnagar Dist.

we confirm the order of the CIT(A) on this issue, deleting the addition, and grounds of the Revenue are dismissed.

6. In the result, appeal of the Revenue is dismissed.

Order pronounced in the court on 1st May, 2015

Sd/- Sd/-

(P.M.Jagtap) (G.C.Gupta) Accountant Member Vice President

Dt/- 1st May, 2015

Copy forwarded to:

1. Shri Bhanu Prakash Ranga, 31-55,Gouri Shankar Colony, Jadcherla, Mahabubnagar Dist.

2. Income Tax Officer WArde 2, Mahabubnagar

3. Commissioner of Income-tax(Appeals) V Hyderabad

4. Commissioner of Income-tax IV, Hyderabad

5. Departmental Representative, ITAT, Hyderabad. B.V.S