IN INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH : Hyderabad Before Smt. P. Madhavi Devi, Judicial Member ITA No.1455/Hyd./2018 Assessment Year: 2014-15 Sri Bommireddy Satyavardhan Reddy vs. ITO, Ward-1 C/o Ch.Parthasarathy & Co. Suryapet 508 213 1-1-298/2/B/3, 1st Floor Sowbhagya Avenue, St.No.1 Ashoknagar Hyderabad 500 020 (Appellant) (Respondent) For Appellant: Sh. K.A.Sai Prasad, A.R. For Respondent: Sh. Nilanjan Dey, D.R. Date of Hearing : 13/08/19 Date of Pronouncement : 28/08/19 ORDER This is assessee s appeal for A.Y. 2014-15 against order of Ld.CIT(A)-8, Hyderabad dated 27.04.2018. 2. Brief facts of case are that assessee is Doctor by profession and is running hospital under name Sathya Hospital. Assessee filed his return of income for A.Y. 2014-15 declaring net income of Rs.1,84,320/-. return was initially processed u/s 143(1) of I.T.Act, 1961 (the Act) and thereafter case was selected for scrutiny under CASS category. Therefore, notice u/s 143(2) of Act was served on assessee and assessee was directed to provide details/information. ITA No.1455/Hyd/2018 AY 2014-15 Sh. Bommireddy Satyavardhan Reddy, Nalgonda vs. ITO, Ward 1, Suryapet assessee furnished relevant information. AO noticed that case was selected for scrutiny under CASS to verify large volume of deposits in Cooperative banks and there was low other source income in return of income as compared to very high aggregate deposits as per UCB data. He observed that assessee was having total bank deposits in Pochampally Cooperative Urban Bank Ltd. Of Rs.14,50,000/-. Assessee filed his explanations dated 28.11.2016, but AO observed that assessee has not been able to explain sources of these bank deposits properly. Therefore, AO treated all bank deposits as business receipts and treated Rs.14,50,000/- as income of assessee. AO, therefore, made addition of only Rs.11,34,750/- to returned income of Rs.3,15,250/- to arrive at total income of Rs.14,50,000/- and accordingly computed tax. Aggrieved, assessee preferred appeal before Ld.CIT(A) who observed that cash deposited in bank account came to notice of department only on collection of data from UCBs and further that contention of assessee that such cash deposits in bank account are professional receipts is completely erroneous and misplaced. He held that professional receipts for entire year were deposited on only 02 days of year that too huge amounts of Rs.10,00,000/- and Rs.4,00,000/- was deposited by assessee is not acceptable. He, therefore, directed AO that entire cash deposits are to be brought to tax. 3. Aggrieved, assessee is in appeal before us. 4. Ld.Counsel for assessee submitted that AO has treated Rs.14,50,000/- as total professional receipts of assessee and CIT(A) has wrongly held that these are not 2 ITA No.1455/Hyd/2018 AY 2014-15 Sh. Bommireddy Satyavardhan Reddy, Nalgonda vs. ITO, Ward 1, Suryapet professional receipts without any evidence. He has drawn our attention to returns of income filed by assessee, according to which net profit offered by assessee is 40.80%. He submitted that it is settled position that entire receipts cannot be treated as income of assessee and only income portion of receipts is to be brought to tax. He therefore prayed that net profit as offered by assessee may be adopted even for unexplained deposits in bank account which are treated as professional income by A.O. 5. Ld.DR supported orders of authorities below. 6. Having regard to rival contentions and material placed on record, we find that A.O. has treated these receipts as professional receipts of assessee. Ld.CIT(A), without any evidence to contrary, has held that income cannot be treated as professional receipts. There is no evidence that assessee is deriving income from any other source/sources. Therefore, we hold that these deposits have to be treated as professional receipts of assessee and only profit element of these deposits/receipts is to be brought to tax. Therefore, AO is directed to apply net profit offered by assessee to these receipts also and compute tax demand accordingly. 7. In result, assessee s appeal is allowed. Pronounced in Open Court on 28th August, 2019. Sd/- (P.MADHAVI DEVI) JUDICIAL MEMBER Dated: 28th August, 2019. *gmv 3 ITA No.1455/Hyd/2018 AY 2014-15 Sh. Bommireddy Satyavardhan Reddy, Nalgonda vs. ITO, Ward 1, Suryapet Copy forwarded to: 1. Sri Bommireddy Satyavardhan Reddy, C/o Ch.Parthasarathy & Co., 1-1- 298/2/B/3, 1st Floor, Sowbhagya Avenue, St.No.1, Ashoknagar, Hyderabad 500 020. 2. ITO, Ward-1, Opp. High Tech Bus Stand, Suryapet 508 213. 3. CIT(A)-8, Hyderabad 4. D.R. ITAT Hyderabad 5. Guard File // C o p y // 4 ITA No.1455/Hyd/2018 AY 2014-15 Sh. Bommireddy Satyavardhan Reddy, Nalgonda vs. ITO, Ward 1, Suryapet 1. Draft dictated on 13/08/19 2. Draft placed before author 22/08/19 3. Draft placed before second Member 4. Draft approved by second Member 5. Approved Draft comes to SrPS 6. Kept for Pronouncement 7. File sent to Bench Clerk 5 Bommireddy Satyavardhan Reddy v. ITO, Ward- 1, Suryapet