2013 (12) TMI 1367 - AT - Income Tax

Assessee prevails in tax appeals for multiple assessment years, Tribunal finds explanations credible

Dy. Commissioner of Income Tax Versus CV. Thotadri, Tirupathi

The Tribunal dismissed Revenue's appeals for AY 2006-07 and AY 2007-08, upholding the Assessee's appeal for AY 2007-08. The Tribunal found the Assessee's ... Unexplained cash deposits - Held that:- On perusal of documents impounded during search which are ways and means account and balance sheet and copy of bank statement of Andhra Bank, there were entries with reference to the deposits and corresponding withdrawals - The genuineness of these transactions have been demonstrated by Assessee by way of documentary evidence - Since the assessment was made based on the ways and means statement, the learned CIT(A) has rightly deleted the addition by giving a categorical finding that it is clear from the ways and means account that Assessee had sufficient funds to deposit the amounts in the Banks - Decided against Revenue. Discharge of income tax liability before proceedings - Held that:- Assessee had paid the tax before the appeal was heard by the CIT(A), therefore, the ground is not material - Facts on record indicate that assessee discharged the tax liability by the time CIT(A) heard the case - Decided against Revenue. Unexplained income - Held that:- Copy of ways and means account, and copies of bank statement of account from Andhra Bank, Tirupathi and Bank of Baroda are placed to establish that the entries of the said deposits have been appeared in the said statements - Since Assessee has proved the genuineness of his claim by way of documentary evidence - Decided in favour of assessee. Issues:1. Unexplained cash deposits of Rs. 5,00,000/- and Rs. 12,00,000/- for AY 2006-07.2. Payment of tax on admitted income for AY 2007-08.3. Addition of Rs. 18,30,000/- as unexplained income on account of deposits made in banks for AY 2007-08.Analysis:1. For the first issue regarding unexplained cash deposits for AY 2006-07, the AO had added Rs. 5,00,000/- and Rs. 12,00,000/- as unexplained credits. The CIT(A) deleted the addition of Rs. 5,00,000/- after verifying the ways and means account, which showed sufficient funds for the deposits. The Tribunal upheld the CIT(A)'s decision, emphasizing the genuineness of the transactions and the availability of funds as per the ways and means statement.2. Moving on to the second issue of tax payment on admitted income for AY 2007-08, the Revenue contended that the appeal should be dismissed due to non-payment of tax. However, it was clarified that the tax was paid before the appeal was heard by the CIT(A), rendering the ground raised by Revenue irrelevant. The Tribunal dismissed the Revenue's appeal based on precedents and the timely tax payment by the Assessee.3. Lastly, the third issue involved the addition of Rs. 18,30,000/- as unexplained income for AY 2007-08. The AO treated various cash deposits as unexplained credits, which the CIT(A) upheld. However, the Tribunal overturned the CIT(A)'s decision after considering the documentary evidence provided by the Assessee, including ways and means accounts and bank statements. The Tribunal found the deposits to be genuine and supported by the financial records, leading to the allowance of the Assessee's appeal.In conclusion, the Tribunal dismissed the appeals of Revenue for AY 2006-07 and AY 2007-08, while allowing the Assessee's appeal for AY 2007-08. The judgments were pronounced on 20th December 2013.