THE ITO., WARD-1, Narasaraopeta., Narasaraopeta V. Smt. Mellacheruvu Radhika, Narasaraopeta

CO 1/VIZ/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9772 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-07-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 03-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D MANOJ KUMAR
• Assessee Lawyers: A C GANGAIAH
• Keywords: Unexplained cash credit; Revised return; Reassessment proceedings
• Section: 143(3); 133A; 147; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH , VISAKHAPATNAM BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER SL.NO. ITA NO. AY APPELLANT RESPONDENT 1 747/V/13 2006-07 MELLACHERUVU RADHIKA, NARASARAOPET PAN AFSPM5850R INCOME-TAX OFFICER, WARD 1, NARASARAOPET 2 314/V/12 2006-07 INCOME-TAX OFFICER, WARD 1, NARASARAOPET MELLACHERUVU RADHIKA, NARASARAOPET PAN AFSPM5850R AND SL.NO. C.O AY CROSS OBJECTOR RESPONDENT 3 01/V/13 (IN ITA NO. 314/V/12 2006-07 MELLACHERUVU RADHIKA, NARASARAOPET PAN AFSPM5850R INCOME-TAX OFFICER, WARD 1, NARASARAOPET ASSESSEE BY SHRI A.C. GANGAIAH REVENUE BY SHRI D. MANOJ KUMAR DATE OF HEARING 08-07-2014 DATE OF PRONOUNCEMENT 08-07-2014 O R D E R PER BENCH.: THESE APPEALS ARE FILED BY THE REVENUE, AS WELL A S THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF CIT(A) FOR THE A SSESSMENT YEAR 2006- 07. THE ASSESSEE ALSO FILED A C.O. 2 ITA NOS. 747/V/13 , 314/V/12 & CO NO. 1/VIZ/13 MELLACHERUVU RADHIKA ITA NO. 747/VIZ/2013 2. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGA INST THE ORDER OF CIT(A), PASSED U/S 154 OF THE ACT. 3. THE ASSESSMENT FACTS IN BRIEF ARE THAT THE ASSES SEE FILED HER RETURN OF INCOME FOR AY 2006-07 ON 31/03/2007 AND THE SAME WAS PROCESSED U/S 143(1) OF THE ACT. THERE WAS A SURVEY OPERATION U/S 133A OF THE ACT CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 29/10/2007. THEREAFTER, A NOTICE U/S 148 WAS ISSUED. THE ASSESS EE FILED REVISED RETURN OF INCOME ADMITTING TOTAL INCOME OF RS. 2,22,600/- AS AGAINST TOTAL INCOME OF RS. 2,02,510/- ADMITTED IN THE ORIGINAL RETURN O F INCOME. THE AO COMPLETED THE ASSESSMENT U/S 143(3) READ WITH SECTI ON 147 OF THE ACT ON 30/12/2008 DETERMINING THE TOTAL INCOME AT RS. 17,8 6,630/-. 4. ON APPEAL, THE FIRST APPELLATE AUTHORITY GRANTED PART RELIEF. AT PARA 2.2 OF HIS ORDER, THE FIRST APPELLATE AUTHORITY HEL D AS FOLLOWS: 2.3 THE AO HAS ADDED BACK RS. 9,02,342/- AS DIFFERE NCE IN CASH BALANCE BETWEEN ORIGINAL AND REVISED BALANCE SHEETS . THE AR SUBMITTED THAT THE APPELLANTS HUSBAND MANAGED THE CONSTRUCTION, AND DURING THE PROCESS OF CONSTRUCTION, HE SPENT HI S OWN AMOUNTS OUT OF FUNDS AVAILABLE WITH THE HUF AND IN HIS INDI VIDUAL STATUS. IT WAS FURTHER SUBMITTED THAT ALTHOUGH THE RECEIPTS WE RE NOT RECORDED IN THE APPELLANTS BOOKS, THE PAYMENTS WERE RECORDE D. THIS ARGUMENT CANNOT BE ACCEPTED. THE FACT IS THAT THERE IS A DIFFERENCE IN CASH BALANCE AND CASH TO THE EXTENT O F RS. 9,02,342/- HAS NOT BEEN RECORDED IN THE APPELLANTS BOOKS. THE ADDITION MADE BY THE AO IS UPHELD. 5. THE ASSESSEE FILED AN APPLICATION U/S 154 OF THE ACT. THE GRIEVANCE OF THE ASSESSEE U/S 154 APPLICATION IS EXTRACTED BE LOW: THE CASH BALANCE IN RESPECT OF ORIGINAL RETURN AND REVISED RETURNS ARE ON THE ASSESSMENT FILES. IT IS THE DUTY OF THE ASSESSEE TO FURNISH THE FACTS. THE FACTUAL AND LEGAL INFERENCE IS THE R IGHT OF THE AO. THE APPEAL IS A PROCEEDING IN CONTINUATION OF ASSESSMEN T PROCEEDINGS. THE DIFFERENCE BETWEEN ORIGINAL AND REVISED CAN BE PURSUED EITHER BY AO OR CIT(A). THE APPELLANT CLEARLY SPECIFIED TO AO AND CIT(A) THAT THE DIFFERENCE IS DUE TO NOT ACCOUNTING THE RE CEIPTS PROPERLY WHICH CAN BE VERIFIED FROM THE INFORMATION ON RECOR D. 3 ITA NOS. 747/V/13 , 314/V/12 & CO NO. 1/VIZ/13 MELLACHERUVU RADHIKA THE INFORMATION OF BALANCE SHEET AT THE TIME OF ORI GINAL RETURN AND REVISED RETURN IS ON THE RECORD. THE DIFFERENCE OF CASH BALANCE IS RS. 9,02,342/- WHEREAS REDUCTION OF SUNDRY DEBTORS IS RS. 10,12,223.48. THE DIFFERENCE IN CASH BETWEEN ORIGIN AL AND REVISED MIGHT HAVE BEEN SEEN FROM THE REDUCTION OF SUNDRY A LONG WITH OTHER ITEMS. ANY HOW THE CASH FLOW STATEMENT BETWEEN TWO BALANCE SHEETS ARE ENCLOSED WITH A PRAYER TO RECTIFY THE MISTAKE A PPARENT ON RECORD AND ALLOW THE APPEAL ON THE ISSUE OF CASH DIFFERENC E OF RS. 9,02,342/-. THE SUBMISSION OF THE APPELLANT THAT CA SH RECEIPTS WERE NOT RECORDED PROPERLY IN BALANCE SHEET FILED WITH O RIGINAL RETURN OF INCOME; IS ON RECORD IN APPEAL ORDERS. THE SUBMISSIONS WAS NEITHER REJECTED WITH ANY CASE LAW NOR GIVEN ANY REASONS ON FACTS. THE DIFFERENCE IN CASH CAN NE ITHER BE TREATED AS UNEXPLAINED CASH CREDIT NOR UNEXPLAINED INVESTME NT. IT SHOULD BE LINKED WITH UNEXPLAINED INCOME TO ADD. THE REASONIN G GIVEN IS WITHOUT EXAMINING THE DOCUMENTS ON THE FILE. HENCE CIT(A) PRAYED TO ADMIT THE APPLICATION/PETITION AND PASS APPROPRI ATE ORDERS. 6. THE CIT(A) VIDE HIS ORDER DATED 31/07/2013, DISM ISSED THE APPLICATION BY HOLDING THAT THERE IS NO MISTAKE APP ARENT ON RECORD, WHICH IS RECTIFIABLE U/S 154. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD SHRI A.C. GANGAIAH, THE LEARNED CO UNSEL FOR THE ASSESSEE AND SHRI D. MANOJ KUMAR, THE LEARNED SR. D R ON BEHALF OF THE REVENUE. 8. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRC UMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE FIR ST APPELLATE AUTHORITY WAS RIGHT IN REJECTING THE APPLICATION OF THE ASSES SEE FOR RECTIFICATION OF HIS ORDER DATED 13/11/2009 U/S 154 OF THE ACT. IN OUR V IEW, THE ASSESSEE SEEKS REVIEW OF THE ORDER OF THE FIRST APPELLATE AU THORITY U/S 154, WHICH IS NOT PERMISSIBLE. IT IS WELL SETTLED THAT ONLY THE M ISTAKES APPARENT ON RECORD CAN BE RECTIFIED IN PROCEEDING U/S 154 OF THE ACT. AS THE ASSESSEE SEEKS REVIEW OF THE ORDER ON MERITS, WHICH IS IMPERMISSIB LE UNDER THE LAW, THE LD. CIT(A) HAS RIGHTLY DISMISSED THE SAME. 9. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS DI SMISSED. 4 ITA NOS. 747/V/13 , 314/V/12 & CO NO. 1/VIZ/13 MELLACHERUVU RADHIKA ITA NO. 314/VIZ/2012 AND C.O. NO. 1/VIZ/2013 10. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A), GUNTUR, DATED 14/06/2012 FOR THE AY 2006-07, WHERE IN HE CANCELLED THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT V IDE HIS ORDER DATED 29/03/20145. 11. THE FACTS ARE BROUGHT OUT AT PARA 2.1 OF THE OR DER OF CIT(A), ARE AS FOLLOWS: 11.1 THE ASSESSEE ORIGINALLY FILED HER RETURN OF IN COME FOR THE AY 2006- 07 ON 31/03/2007, ADMITTING INCOME AT RS. 2,02,510/ -. SUBSEQUENTLY, A SURVEY U/S 133A WAS CONDUCTED ON 29/10/2007 AND SOM E INCRIMINATING MATERIAL WAS FOUND AND THE ASSESSMENT WAS REOPENED BY ISSUE OF NOTICE U/S 148. IN RESPONSE, THE ASSESSEE FILED RETURN OF INCOME ADMITTING TOTAL INCOME AT RS. 2,22,660/-. THE REASSESSMENT WAS COMP LETED ON 30/12/2008 BY MAKING VARIOUS ADDITIONS. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, NOTICE U/S 274 R.W.S. 271 WAS ISSUED TO THE ASSESSEE. AGAINST THE REASSESSMENT ORDER DATED 30/1 2/2008, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) WHILE DECIDING THE APPEAL, SUSTAINED THE ADDITIONS OF RS. 64,164/- BEI NG DISALLOWANCE OF CLAIM OF INTEREST ON BORROWAL FOR CONSTRUCTION OF P ROPERTY AND RS. 9,02,342/- BEING DIFFERENCE IN CASH BALANCE SHOWN I N THE ORIGINAL RETURN AND THE OTHER ADDITIONS WERE DELETED. WHILE COMPLET ING THE PENALTY PROCEEDINGS U/S 271(1)(C) IN RESPECT OF DISALLOWANC E OF CLAIM OF INTEREST AMOUNTING TO RS. 64,164/- AND DIFFERENCE OF RS. 9,0 2,342/- IN CASH BALANCE, THE AO HAD REJECTED THE EXPLANATION OFFERE D BY THE ASSESSEE THAT SHE HAD FURNISHED THE FULL PARTICULARS IN RESPECT O F INTEREST AND WITH REGARD TO CASH BALANCE IT IS A MISTAKE COMMITTED BY HER A CCOUNTANT AND LEVIED A MINIMUM PENALTY OF RS. 3,25,328/- U/S 271(1)(C) OF THE IT ACT. 5 ITA NOS. 747/V/13 , 314/V/12 & CO NO. 1/VIZ/13 MELLACHERUVU RADHIKA 12. WE HAVE HEARD SHRI D. MANOJ KUMAR, THE LEARNED SR. DR ON BEHALF OF THE REVENUE AND SHRI A.C. GANGAIAH, THE LEARNED COUNSEL FOR THE ASSESSEE. 13. THE ASSESSEE HAS, IN RESPONSE TO THE NOTICE U/S 271(1)((C), FILED THE EXPLANATION WITH THE AO STATING THAT THE ADDITIONS, WHICH WERE SUSTAINED BY THE FIRST APPELLATE AUTHORITY WERE MERELY ACCOUN TING MISTAKES COMMITTED BY THE ACCOUNTANT OF THE ASSESSEE. IT WAS PLEADED THAT ASSESSEE HAD NO KNOWLEDGE OF ACCOUNTS AND THAT SHE DID NOT REALIZE THE MISTAKES IN THE BOOKS OF ACCOUNT. SUBSEQUENTLY, AFT ER SURVEY OPERATIONS, PROFESSIONAL ADVISE WAS TAKEN AND THE BOOKS CORRECT ED BY RECTIFYING THE ENTRIES AND REVISED RETURN OF INCOME WAS FILED WITH THESE REVISED FIGURES. HENCE, IT WAS PLEADED THAT THERE IS NO FURNISHING O F INACCURATE PARTICULARS OR CONCEALMENT OF INCOME BY THE ASSESSEE FILED IN R ESPONSE TO THE NOTICE U/S 148 OF THE ACT. THE LEARNED CIT(A) CONSIDERED T HESE EXPLANATIONS OF THE ASSESSEE AND HELD THAT LEVY OF CONCEALMENT PENA LTY WAS RELATED TO ONLY TWO ADDITIONS, I.E., A) CLAIM OF INTEREST AND B) DIFFERENCE IN ASSETS AND LIABILITIES OF THE BALANCE SHEETS; WHEN REVISED RETURN WAS COMPARED WITH ORIGINAL RETURN, HE AGREED WITH THE CONTENTION S OF THE ASSESSEE THAT THESE ARE ARITHMETICAL MISTAKES. THUS, HE HELD THAT NO PENALTY CAN BE LEVIED ON SUCH RECTIFIABLE MISTAKES. WE AGREE WITH THESE FINDINGS OF THE FIRST APPELLATE AUTHORITY. HENCE, WE UPHOLD THE ORD ER OF THE CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 14. AS THE C.O. FILED BY THE ASSESSEE IS ONLY IN SU PPORT OF THE FIRST APPELLATE AUTHORITY, IN VIEW OF OUR DECISION IN REV ENUE APPEAL UPHOLDING THE ORDER OF FIRST APPELLATE AUTHORITY, THE CO BECO MES INFRUCTUOUS AND DISMISSED AS SUCH. 6 ITA NOS. 747/V/13 , 314/V/12 & CO NO. 1/VIZ/13 MELLACHERUVU RADHIKA 15. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE AS WELL AS REVENUE AND THE C.O BY THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 08/07/2014. SD/- SD/- (SAKTIJIT DEY) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER VISAKHAPATNAM, DATED: 8 TH JULY, 2014 KV COPY TO:- 1) SMT. MELLACHERUVU RADHIKA, W/O M.V.B. GUPTA, D.N O. 6-3-269, SATTENAPALLI ROAD, NARASARAOPET, 2) ITO, WARD 1, PRAKASH NAGAR, NARASARAOPET 3) CIT(A), GUNTUR 4) CIT), GUNTUR 5)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., VIZAG.