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2015 (10) TMI 315 - ITAT HYDERABAD

2015 (10) TMI 315 - ITAT HYDERABAD - TMI - Unexplained cash deposits found to be made in the bank account - CIT(A) deleted the addition - Held that:- In the submissions made before the Ld. CIT(A), a reference was made by the assessee only to his bank account with Development Credit Bank Ltd. The Ld. Counsel for the assessee therefore was directed by us to file copy of the bank account of the assessee maintained with Development Credit Bank Ltd., in order to establish the nexus between the amount .....

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s the matter has to go back to the A.O. for verifying the trail of Mr. Venugopal Reddy, Hyderabad. funds stated to be received from different students by the assessee in cash and drawing of demand drafts by the assessee on behalf of the said students. Even the explanation of the assessee as regards the cash deposits of ₹ 14,62,719 having been made from the contract receipts of his business requires verification by the A.O. We therefore, set aside the impugned order of the Ld. CIT(A) and re .....

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na Bandi For The Assessee : Mr. S. Rama Rao ORDER PER P.M. JAGTAP, A.M. This appeal is preferred by the Revenue against the Order of the Ld. CIT(A)-V, Hyderabad dated 30.09.2013 and the solitary issue raised therein relates to the deletion by the Ld. CIT(A) of the addition of ₹ 47,86,800 made by the A.O. on account of unexplained cash deposits found to be made in the bank account of the assessee. 2. The assessee in the present case is an individual who is stated to be carrying on business .....

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d not comply with the notices issued by the A.O. during the course of assessment proceedings and did not offer any explanation as regards the cash deposits found to be made in his bank account. The A.O. therefore, was left with no option but to complete the assessment exparte under section 144 to the best of his judgment on the basis of the material available on record. In such assessment made vide order dated 30.12.2011, he added the entire amount of ₹ 47,86,800 of cash deposits found to .....

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0, the total turnover was ₹ 15,02,400 and the appellant estimated the income at 10% of such receipts or at ₹ 1,50,240. He filed the return of Mr. Venugopal Reddy, Hyderabad. income on 29-01-2010 admitting an income of ₹ 1.50,240. During the previous year relevant for the assessment year under consideration, the appellant maintained the accounts with Development Credit Bank Ltd., A bids, Hyderabad. Certain deposits were made into the bank account by the students going to foreign .....

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,100 18 11.08.2008 University of Teesside 3625 pounds 4. Ichapuram Srikanth Rs.2,85,000 45 14.08.2008 University of Teesside 3625 pounds 5. Rashid Hussain Sayeed Rs.3,28,000 44 14.08.2008 University of Teesside 3625 pounds 6. Prasanth Kumar Kandukuri Rs.3,50,000 2036 14.08.2008 University of Teesside 3625 pounds 7. Haq Mohd. Anwar Ul Rs.3,50,000 118 09.09.2008 Middlesex University 4200 pounds 8. Juluru Panduranga Rs.2,98,000 1703 19.11.2008 University of Teesside 3625 pounds 9. Naddi Karthik Kum .....

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ested in leaving India for higher studies for purchase of Demand Drafts in favour of the respective Mr. Venugopal Reddy, Hyderabad. Universities in which they intend to admit for higher studies. In fact, the Development Credit Bank offers DDs without any commission. The persons concerned have used the appellant's bank account for transferring the amounts to the concerned universities. This clearly indicates that the amount deposited into the bank account does not relate to the appellant here .....

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Assessing Officer ought to have observed the fact that cash was deposited and on the same day or on the next day DDs were purchased in favour of the relevant Universities which would clearly indicate that the students have deposited the cash into the bank account of the appellant and purchased DDs. The Assessing Officer ought to have seen that it is only to facilitate the purchase of DDs by the said students, the appellant allowed his bank account to be operated by outsiders. If this was to be .....

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Mr. Venugopal Reddy, Hyderabad. allowing his bank account to be utilized by the students for drawing the demand drafts. He also stated that the explanation offered by the assessee for the cash deposits being the amounts received from students for taking the demand draft was not supported by any cogent evidence. When these comments made by the A.O. in the remand report were confronted by the Ld. CIT(A) to the assessee, the following further submission was made by the assessee in writing : In con .....

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of the appellant. During the course of the appeal proceedings, the appellant stated the following facts: The appellant was in receipt of petty contracts of ₹ 15, 02, 400/The appellant's bank account i.e. Development Credit Bank Ltd., Abid Road, Hyderabad was utilized by 11 different persons who were proposing to prosecute their studies in foreign universities. They deposited on various dates, the amounts belonging to them and the appellant facilitated issue of Demand Drafts in Pounds. .....

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arded to the Assessing Officer and the Addl. CIT they commented that such additional evidence need not be admitted. In this regard, the appellant humbly submits that as stated above the deposits were made into the bank account by various persons prosecuting their studies in foreign universities. To ascertain the details from the persons concerned, it took substantial time and in the meantime the Assessing Officer completed the assessment ex-parte. It can be seen from the certificate issued by th .....

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onths time and the appellant could not obtain the details from the banks and various persons within the limited time. Therefore, the information provided is authentic being the bank accounts and, therefore, the Assessing Officer ought to have suggested that the additional evidence be admitted. The appellant submits that the Addl. CIT is of the view that there is no reason as to why the students have deposited the amounts with the bank account of the appellant. In this regard, the appellant submi .....

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the date on which such DD was drawn from the bank and the amount deposited are also furnished. Neither the Assessing Officer nor the Addl. CIT have doubt about the actual facts on record. Therefore, the appellant submits that the additional evidence filed my kindly be admitted. With regard to the addition, it is submitted that the total amount of addition made by the Assessing Officer was ₹ 47,86,800/-. It is submitted that the total deposits made for purchase of demand drafts amounted to .....

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e Assessing Officer is not justified in making any addition on this account. In the circumstances, the appellant requests the Hon'ble Commissioner of Income-Tax (A) to kindly allow the appeal as prayed for. 3.2. The Ld. CIT(A) found the explanation offered by the assessee as regards the cash deposits found to be made in his bank account as acceptable and deleted the addition of ₹ 47,86,800 made by the A.O. for the following reasons given in paragraph 7.1 and 7.2 of his impugned order : .....

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t there were cash withdrawals from the bank account and cash deposits made into the same bank account. Considering all these facts, I am of the view that the deposits in the bank account do not represent the income of the appellant as they are properly explained by the appellant. The addition of ₹ 47,86,800 made by the Assessing Officer is, therefore, deleted. 4. Aggrieved by the Order of the Ld. CIT(A) giving relief to the assessee, the Revenue has preferred this appeal before the Tribuna .....

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ge by the said students to different foreign universities. He has also invited our attention to the copy of certificate issued by the Development Credit Bank placed at page No.20 of his paper book to support and substantiate the case of the assessee that the deposits made in bank account with ICICI were finally utilized by the assessee to draw the demand drafts on behalf of the concerned students. It is however observed that in the submissions made before the Ld. CIT(A), there was no reference m .....

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