M.V.Kameswera Rao, Hyderabad v. DCIT, Hyderabad

ITA 1430/HYD/2008 | 1996-1997
Pronouncement Date: 21-05-2010 | Result: Partly Allowed

Appeal Details

RSA Number 143022514 RSA 2008
Assessee PAN ACQPM1190D
Bench Hyderabad
Appeal Number ITA 1430/HYD/2008
Duration Of Justice 1 year(s) 8 month(s) 11 day(s)
Appellant M.V.Kameswera Rao, Hyderabad
Respondent DCIT, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 21-05-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 21-05-2010
Date Of Final Hearing 13-05-2010
Next Hearing Date 13-05-2010
Assessment Year 1996-1997
Appeal Filed On 09-09-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA-1430/HYD/2008 A.Y. 1996-97 SHRI M.V. KAMESWARA RAO HYDERABAD. (PAN ACQPM1190 D) VS DY.CIT CIRCLE 6(4) HYDERABAD (PRESENTLY DCIT CIRCLE 10(4) HYD. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI RAVI SESHAGIRI RAO RESPONDENT BY: SHRI K.V.N. CHARYA DR O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER PASSED BY THE CIT (A) HYDERABAD DATED 30.6.200 8 AND PERTAINS TO THE ASSESSMENT YEAR 1996-97. 2. THE FIRST GROUND IN THE APPEAL OF THE ASSESSEE IS WITH REGARD TO CONFIRMING THE ADDITION OF RS.1 LAKH PAID TOWARDS T HE COST OF PURCHASE OF PROPERTY. 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER FOUND THAT THE ASSESSEE PURCHASED A FLAT FROM M/S SAI SRUTHI CONSTRUCTIONS IN GOK UL APARTMENTS ASHOKNAGAR HYDERABAD FOR A CONSIDERATION OF RS.4 64 00 0/-. THE ASSESSEE CLAIMED TO HAVE BEEN PAID AN AMOUNT OF RS.2 25 0 00/- TO THE ITA-1430/HYD/2008 SHRI M.V. KAMESWARA RAO HYDERABAD 2 2 BUILDER. THE ASSESSING OFFICER MADE ENQUIRIES FROM THE B UILDER AND FOUND THAT AN AMOUNT OF RS.3 25 000 WAS PAID TO THE B UILDER. THE ASSESSEE WHEN CONFRONTED WITH THE FINDING STATED THAT HIS WIFE PAID THE AMOUNT OF RS.1 LAKH AS TEMPORARY HAND LOAN ON HIS BEHA LF TO THE BUILDER. THE ASSESSING OFFICER GOT THE MATTER ENQUIRED FROM THE BANK WHERE THE PAYMENT WAS SUPPOSED TO HAVE BEEN MADE AND FOUND THAT THE CLAIM OF THE ASSESSEE THAT TWO CHEQUES WERE ISSUED FOR MAKING SUCH PAY MENT OF RS.1 LAKHS WAS NOT CORRECT AS THE SAID CHEQUES WERE ISSUED BY A COMPANY CALLED M/S RAMKI CORPORATE SERVICES (P) LTD. T HE CHEQUES WERE DRAWN ON SELF AND CASH WAS WITHDRAWN AGAINST SUCH CHE QUES. ACCORDINGLY HE DISBELIEVED THE EXPLANATION OF THE ASSE SSEE AND MADE THE ADDITION. 4. ON APPEAL CIT(A) OBSERVED THAT FROM THE ACCOUNT COPY OF THE ASSESSEE OBTAINED FROM THE BUILDER THE ASSESSEE PAID A N AMOUNT OF RS.3 25 000/- WHEREAS THE ACCOUNTS OF THE ASSESSEE SHOWED PA YMENT OF RS.2 25 000/-. IF THE ASSESSEE HAD TAKEN TEMPORARY HAND LOANS FROM HIS WIFE HE SHOULD HAVE MADE SUCH ENTRIES IN HIS BOOKS OF ACCOUNTS BEING A CHARTERED ACCOUNT AND MAINTAINING REGULAR BOO KS OF ACCOUNTS. THERE IS NO REASON WHY HE DID NOT MAKE ENTRIES REGARDI NG SUCH TRANSACTIONS. WHEN FURTHER ENQUIRED IT CAME TO LIGHT THAT HIS WIFE DID NOT ISSUE ANY CHEQUES OR MADE ANY PAYMENT TO THE BUIL DER HERSELF. THE IT WAS CLAIMED THAT THE PAYMENT WAS MADE FROM THE ACCOU NT OF M/S ITA-1430/HYD/2008 SHRI M.V. KAMESWARA RAO HYDERABAD 3 3 RAMKI CORPORATE SERVICES (P) LTD. IN WHICH THE ASSESSEE AN D HIS WIFE WERE DIRECTORS. IN SUCH CASE THE CHEQUES SHOULD HAVE BEEN ISSUED DIRECTLY IN THE BUILDERS NAME AND COLLECTED BY THE BUI LDER THROUGH HIS BANK ACCOUNT. WHEN THE CHEQUES WERE OBTAINED AND SEEN B Y THE ASSESSING OFFICER HE REALIZED THAT THE CHEQUES WERE SELF DRAWN CHEQUES FOR THE PURPOSE OF WITHDRAWING CASH. IN FACT THE BANK HAD PAID CASH AGAINST THE TWO CHEQUES. THERE IS NO REASON WHY THE CO MPANY HAD TO ISSUE SELF CHEQUES IF THEY WERE MEANT FOR PAYMENT TO BU ILDER ON BEHALF OF THE ASSESSEE. FROM THE CHEQUES IT CANNOT BE PROVED THA T THE SAME PAYMENT HAS GONE TO THE BUILDER. MOREOVER IN THE COM PANYS ACCOUNT THE ASSESSEE WOULD NOT HAVE SHOWN THE PAYMENT AGAINST HIS OR HIS WIFES NAME THERE IS NO REASON FOR THE COMPANY TO ISSUE CHEQUES DRAWN ON SELF. MOREOVER AS DISCUSSION BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER REGARDING THE ISSUE OF SOME RECEIPTS BY TH E BUILDER AND SUBSEQUENT DESTROYING THEM BY THE BUILDER ON PAGE 38 & 39 OF THE ASSESSMENT ORDER IT IS PROVED THAT THE PAYMENT OF RS.1 L AKH MADE TO THE BUILDER IS DIFFERENT FROM THE WITHDRAWAL OF RS.1 LAKH FROM THE BANK ACCOUNT OF THE COMPANY. THE ASSESSEE FOUND THE COINCIDENCE OF THE WITHDRAWAL FROM THE COMPANYS ACCOUNT AND TRIED TO USE T HE SAME TO RELATE IT TO THE PAYMENT MADE TO THE BUILDER. ACCORD INGLY THE ADDITION OF RS.1 LAKH MADE BY THE ASSESSING OFFICER IS CONFIRMED. A CCORDING TO THE LOWER AUTHORITIES THE AMOUNT OF THIS 1 LAKH IS NO T AVAILABLE TO ITA-1430/HYD/2008 SHRI M.V. KAMESWARA RAO HYDERABAD 4 4 ASSESSEE FOR MAKING PAYMENT TO BUILDER AND THE ADDITIO N WAS MADE TO THAT EXTENT. HENCE ASSESSEE IS IN APPEAL BEFORE US ON THI S ISSUE. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MATER IAL AVAILABLE ON RECORD. ADMITTEDLY THE AMOUNT OF RS.1 LAKH WAS WITHDRAWN BY TWO CHEQUES BEARING NO.822203 AND NO.412975 OF CO RPORATION BANK DATED 18/11/1995 AND 11/11/95 FOR RS.75 000/- & RS.2 5 000/. RESPECTIVELY BOTH THE CHEQUES WERE RELATING TO THE AC COUNT OF M/S RAMKI CORPORATE SERVICES WHEREIN THE ASSESSEE AS WELL AS HI S WIFE ARE DIRECTORS. THE CONTENTION OF THE DEPARTMENT IS THAT TH IS AMOUNT WAS NOT AT ALL USED FOR MAKING THE PAYMENT TO THE BUILDER M/ S SAI SRUTHI CONSTRUCTIONS HYDERABAD. HOWEVER THEY HAVE NOT BROUG HT ANY MATERIAL EVIDENCE ON RECORD TO SHOW THAT THIS MONEY HAS BEEN USED FOR ANY PURPOSE OTHER THAN FOR MAKING PAYMENT TO M/S SAI SRUTHI CONSTRUCTIONS. THE EXPLANATION GIVEN BY THE ASSESSEE IS O NE OF THE PROBABLE EXPLANATIONS. UNLESS THERE IS CONTRARY EVIDENCE WE HAVE TO GIVE CREDIT TO THE CONTENTION OF THE ASSESSEE. IN OUR OP INION THE ADDITION WAS MADE BY THE LOWER AUTHORITIES ONLY ON SUR MISES AND CONJUNCTURE BASIS WITHOUT BRINGING PROPER EVIDENCE ON RECORD. ACCORDINGLY WE INCLINED TO DELETE THE ADDITIONS. 6. THE NEXT GROUND IS ON LOW DRAWINGS BY THE ASSESSEE. IN THIS CASE AN ADDITION OF RS.72 000/-WAS MADE TOWARDS LOW DRAW INGS. THE ITA-1430/HYD/2008 SHRI M.V. KAMESWARA RAO HYDERABAD 5 5 ASSESSEE SHOWN MEAGER DRAWINGSOF RS.7633/- . THE EXPLANAT ION GIVEN BY THE ASSESSEE IS THAT THE ASSESSEE HAS BEEN STAYING WITH HI S FATHER. HIS EXPENSES WERE MINIMAL AND HIS FAMILY CONSISTS OF HIS WIFE AND A CHILD. AFTER EXAMINING THE ENTIRE FACTS OF THE CASE IN OUR OPINION THIS IS AN ASSESSMENT RELATING TO ASSESSMENT YEAR 1996-97. IN THAT YEAR THE COST OF LIVING IS COMPARATIVELY LOW. ACCORDINGLY WE DI RECT THE ASSESSING OFFICER TO CONSIDER AN AMOUNT OF RS.36 000/- OVER AND ABOVE THE DRAWINGS SHOWN BY THE ASSESSEE AND THEN AN ADDITION OF R S.36 000/- DELETED. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.5.2010 SD/- SD/- G.C. GUPTA CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER DATED THE 21ST MAY 2010 COPY FORWARDED TO: 1. SHRI S. RAMA RAO ADVOCATE FLAT NO.103 H.NO.3-6- 542/4 INDIRADEVI NILAYAM ST.NO.7 HIMAYATNAGAR HYDERABAD -29. 2. DCIT CIRCLE 6(4) HYDERABAD 3. CIT(A)-VI HYDERABAD. 4. CIT HYDERABAD 5. THE D.R. ITAT HYDERABAD. NP