Sri Ram Babu Atmakuru,, Warangal vs Department Of Income Tax

ITA No.658/Hyd/2013 : Asst. Year 2009-10

Income Tax Officer Ward 2, V/s. Shri Ram Babu Atmakuru, Warangal, Hanamkonda, Dist. Warangal.

( PAN - ABLPA 4354 M )

(Appellant) (Respondent)

Appellant by : Shri Rajat Mitra

Respondent by : Shri A.V.Raghuram

Date of Hearing 22..01.2015 Date of Pronouncement 22.01.2015

ORDER

Per D.Manmohan, Vice President

This appeal by the Revenue is directed against the order passed by the Commissioner of Income-tax(Appeals) VI, Hyderabad and it pertains to assessment year 2009-10.

2. The only ground urged before us reads as under-

"The CIT(A) ought to have discussed the reasons of Assessing Officer before deleting the addition. It is not clear, how earlier cash withdrawls forms part of deposit of Rs.13.50 lakhs. It is totally against the normal conduct to deposit past accumulation without spending the same. When the assessee is having cash, how can it again withdraw cash regularly."

2 ITA No.658/Hyd/2013 Shri Ram Babu Atmakuru, Hanamkonda, Dist. Warangal.

3. Facts necessary for the disposal of the appeal are stated in brief. Assessee is engaged in the business of purchase and sale of cloth on wholesale and retail basis. For the year under consideration, he declared total income of Rs.3,04,770 from business, whereas the assessment was completed by determining the income at Rs.30,48,450 which consisted of addition on account of unexplained credit of Rs.13,50,000. As could be noticed from page 4 of the assessment order, an amount of Rs.13,50,000 was reflected in the cash book as on 30.9.2008. On the same day, the assessee paid advance towards purchase of plot. It is not disputed by the Assessing Officer that the assessee tendered an explanation wherein he stated that he received loan from ICICI Bank. However, the information of the Assessing Officer is that the cheque received from the Bank towards loan was not deposited in any of the assessee's bank accounts. He therefore, inferred that the cheque issued by ICICI Bank must have been used for some other purpose, and he must have introduced his unaccounted money to the tune of Rs.13,50,000 in his cash book which was utilised for giving advance towards purchase of land.

4. Aggrieved, assessee contended before the CIT(A) that it was brought to the notice of the Assessing Officer that a sum of Rs.13,50,000 was received as loan from ICICI Bank and the same has been credited in the books of account of the assessee, and thus, the Assessing Officer erred in holding the same as unexplained income. Before the learned CIT(A), it was stated that he has received a sum of Rs.13,34,830 from ICICI Bank by way of cheque. As could be noticed from para 8.2, it was brought to the notice of the learned CIT(A) that the bank account copy reflects the factum of deposit of cheque for a sum of Rs.13,34,830 on 5.9.2008, which was the amount received from the ICICI Bank HFC Ltd. It was also explained that the assessee had withdrawn the amounts 3 ITA No.658/Hyd/2013 Shri Ram Babu Atmakuru, Hanamkonda, Dist. Warangal.

subsequently and deposited the same in the books of account of proprietary business concern by 30.9.2008.

5. The learned CIT(A) appears to have perused the material papers furnished before him. In this regard, he observed as under-

"8.3. .....However, on examination of the bank account, it makes the fact clear that the appellant's bank account was credited with a considerable amount of Rs.13.34 lacs on 05.09.2008 against which certain cash withdrawals were made which are explained to be the sources for the cash deposit made into the books on 30.09.2008. In this case, the bone of contention was the doubt regarding the encashment of the cheque, which has been explained by submission of the bank account.

The sources for the cash deposit too stand explained with the subsequent cash withdrawals made form the bank account, which are considerable amounts. Under the circumstances, I am of the considered opinion that the ground on which the Assessing Officer treated the credits into the books a unexplained, do not exist on facts, and as such, the addition made on the said basis do not survive. ....."

Aggrieved, Revenue is in appeal before us.

6. Learned Departmental Representative strongly supported the order passed by the Assessing Officer by submitting that there is no evidence to prove that the money withdrawn out of the loan received from ICICI Bank was available with the assessee and utilised by the assessee towards purchase of land/plot. However, neither a copy of the bank account nor the copy of the cash book, which was stated to have been furnished before the CIT(A), was placed before us to contradict the findings of the learned CIT(A).

4 ITA No.658/Hyd/2013 Shri Ram Babu Atmakuru, Hanamkonda, Dist. Warangal.

7. On the other hand, the learned counsel appearing on behalf of the assessee placed before us copy of the bank account to show that loan/cheque was deposited on 5.9.2008 whereas the Assessing Officer assumed that the cheque was not deposited and on that limited count, he sought to make the addition; having regard to the fact that the factum of crediting of the loan is verified by the CIT(A), and it is not controverted by the Revenue, there is no case for making any addition.

8. We have carefully considered the rival submissions and perused the record. As rightly pointed out by the learned CIT(A), the addition was made by the Assessing Officer mainly on the ground that the cheque was not deposited in any of the bank accounts on 30.9.2008, whereas it was established before the CIT(A), by furnishing the bank account copy, that the cheque was in fact deposited on 5.9.2008. In the absence of any material placed before us to contradict the finding of the learned CIT(A), we are unable to accept the plea of the Revenue. In the circumstances, we uphold the order of the learned CIT(A) and dismiss the appeal filed by the Revenue.

9. In the result, Revenue's appeal is dismissed.

Order pronounced in the court on 22nd January, 2015

Sd/- Sd/-

(B.Ramakotaiah) (D.Manmohan) Accountant Member Vice President

Dt/- 22nd January, 2015 5 ITA No.658/Hyd/2013 Shri Ram Babu Atmakuru, Hanamkonda, Dist. Warangal.

Copy forwarded to:

1. Shri Ram Babu Atmakuru, H.No.6-2-49/4, Main Road, Chowrastha, Hanamkonda, Dist. Warangal.

2. Income Tax Officer Ward 2, Warangal

3. Commissioner of Income-tax(Appeals)-VI , Hyderabad

4. Commissioner of Income-tax V, Hyderabad

5. Departmental Representative, ITAT, Hyderabad.

B.V.S