Sri Peddi Nagghabhushanam, Hyderabad vs Department Of Income Tax

Income-tax Officer, Ward - 9(2), Sri Peddi Nagabhushanam, Hyderabad C/o Peddi Naghabhushanam Broiler Farm, Teegul (V), Jagadevpur (M), Medak Dist

PAN - ANFPP 06595 (Appellant) (Respondent)

Revenue by Shri Rajat Mitra Assessee by Shri S. Rama Rao

Date of hearing 10-12-2014 Date of pronouncement 07-01-2015

O RDE R

PER SAKTIJIT DEY, J.M.:

This appeal of the department is directed against order dated 14/08/2013 of ld. CIT(A)-VI, Hyderabad pertaining to AY 2009-10. The effective ground raised by the department is as under:

"The ld. CIT(A) erred in accepting the submissions of the assessee regarding the unexplained in India Infoline Ltd. opining that the sources for investments of Rs. 15,54,000 are out of sale proceedings of agricultural land, sale of flats, transfer from other bank accounts and borrowal from friends and relatives."

2. Briefly the facts relating to the issue in dispute are, assessee is an individual. For the AY under dispute, assessee filed his return of income on 02/09/09 declaring total income of Rs. 1,62,790 and agricultural income of Rs. 1 lakh. During the assessment proceeding, AO while examining the bank statement of the account held by 2 ITA No. 167 6/Hyd/20 13 Sri Peddi Na gab husha na m

assessee with HDFC bank noticed that assessee has made purchase and sale transactions of shares with India Infoline Ltd. on different dates amounting to Rs. 15,54,000. He, therefore, called upon assessee to explain why such deposits should not be treated as unexplained income of assessee. Though assessee objected to such action on the part of AO, but, AO by observing that assessee could not furnish any satisfactory explanation regarding the source of investment, except, furnishing ledger extract of his account with India Infoline Ltd., treated the amount of Rs. 15,54,000 as unexplained investment u/s 69 of the Act and added to the income of assessee. Being aggrieved of such addition, assessee preferred appeal before ld. CIT(A).

3. In course of appeal hearing, it was submitted by assessee that the amount of Rs. 15,54,000 was invested in future and options and shares through Demat account of M/s India Infoline Ltd. and the sources of such investments are through HDFC Bank, which in turn, were out of sale proceeds of land, sale proceeds of flat, transfer from other bank account, etc. Further, it was submitted by assessee that the source of such investments were explained before AO, but, he made addition merely on conjectures and surmises without bringing any contrary evidence to disprove assessee's claim.

4. Ld. CIT(A) after considering the submissions of assessee in the context of facts and materials on record found that assessee maintained accounts with two banks i.e. SBH, Gazwel claimed to be for business purposes and HDFC bank for personal transactions. He further noticed that the investments in to futures and options as well as shares were through the Demat account of India Infoline Ltd. have flown from HDFC bank and the main sources for such investments, in turn, were out of sale proceeds of agricultural land, sale of flats and transfer from bank account and borrowals from friends and relatives, which were also examined by AO separately. Ld. CIT(A) finding that 3 ITA No. 167 6/Hyd/20 13 Sri Peddi Na gab husha na m

source of such investments were adequately explained, deleted the addition made by AO.

5. We have considered the submissions of the parties and perused the orders of revenue authorities as well as other materials on record. As can be seen, AO has made the addition of Rs. 15,54,000 without properly considering the facts and materials brought to his notice. On the contrary, it is evident from the order of ld. CIT(A) that the sources of such investments have been properly explained by assessee through supporting evidences. It is also a fact on record that AO without appreciating facts and materials brought on record by assessee has made addition merely on conjectures and surmises and no contrary material has been brought on record by AO to disprove the claim of assessee. Even at the time of hearing before us, ld. DR has failed to controvert the factual finding of ld. CIT(A) that the investments were made from explained sources. In the aforesaid view of the matter, we do not find any infirmity in the order of ld. CIT(A), which is accordingly upheld. Ground raised by department is, therefore, dismissed.

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

Pronounced in the open court on 07/01/2015.

Sd/- Sd/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER

Hyderabad, Dated: 7 th January, 2015 kv 4 ITA No. 167 6/Hyd/20 13 Sri Peddi Na gab husha na m

Copy to:-

1) ITO, Ward - 9(2), 2 nd Floor, D-Block, IT Towers, Hyderabad.

2) Sri Peddi Nagabhushanam, 17-1-391/1/s/358&359/F.No. 305, Sai Sarover Residency, Singareni Colony, Hyderabad.

3) CIT(A)-VI, Hyderabad

4) CIT-VI, Hyderabad

5) The Departmental Representative, I.T.A.T., Hyderabad.