M/s. Srinivasa Poultry Complex, Tanuku V. The ACIT, Circle -1, Eluru

CO 12/VIZ/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3742 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-04-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 08-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C DAS
• Keywords: Unexplained investment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 315 / VIZ /201 6 (ASST. YEAR : 20 12 - 13 ) ACIT, CIRCLE - 1, ELURU. V S . M/S. SRINIVASA POULTRY COMPLEX, D.NO. 9 - 8, VELPUR POST, PANDURANGA TEMPLE, TANUKU, WEST GODAVARI DISTRICT. PAN NO. AAZFS 9391 K (APPELLANT) (RESPONDENT) C.O.NO. 12/VIZ/2017 ( ITA NO. 315 / VIZ /201 6) (ASST. YEAR : 20 12 - 13 ) M/S. SRINIVASA POULTRY COMPLEX, D.NO. 9 - 8, VELPUR POST, PANDURANGA TEMPLE, TANUKU, W . G . DISTRICT. VS. ACIT, CIRCLE - 1, ELURU. PAN NO. AAZFS 9391 K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SHRI K.C. DAS SR. DR DATE OF HEARING : 13 / 0 4 /201 8 . DATE OF PRONOUNCEMENT : 18 / 04 /201 8 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE REVENUE AN D THE CROSS O BJECTION BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME 2 ITA NO. 315/VIZ/2016 & C.O.NO. 12/VIZ/2017 ( M/S. SRINIVASA POULTRY COMPLEX ) TAX (APPEALS) , RAJAHMUNDRY , DATED 16 /0 3 /201 6 FOR THE ASSESSMENT YEAR 20 12 - 13 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT ASSESSEE IS A FIRM, FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 2,67,180/ - . A SURVEY IN THE CASE OF M/S. LAXMI PRASANNA AGRO PAPER INDUSTRIES LTD. WAS CONDUCTED ON 13/12/2011 , IN WHICH IT WAS NOTED TH A T THE MANAGING PARTNER OF THE ASSESSEE FIRM MADE SOME INVESTMENTS IN THE SAID COMPANY . ACCORDINGLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ASSESSMENT IS COMPLETED UNDER SECTION 143(3) OF THE ACT BY MAKING AN ADDITION OF RS. 50.00 LAKHS AS UNEXPLAINED INVESTMENT . IN THE ASSES SMENT ORDER, THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE HAS MADE AN INVESTMENT OF RS.50.00 LAKHS , IN CASH , IN M/S. LAXMI PRASANNA AGRO PAPER INDUSTRIES LTD. AND CALLED THE ASSESSEE TO EXPLAIN FOR THE SOURCE OF INVESTMENTS. THE ASSESSEE HAS SUBMITTE D BEFORE THE ASSESSING OFFICER THAT THE INVESTMENTS MADE BY THE ASSESSEE IN CASH BELONGING TO THE ASSESSEE FIRM AND WERE WITHDRAWN FROM THE ASSESSEES BANK HELD WITH HDFC AND THAT THE SAID AMOUNT WAS WITHDRAWN FOR ADVANCE TO PURCHASE OF THE LAND . H OWEVER, AS THE LAND PURCHASE DID NOT MATERIALISE , THE ASSESSEE GOT BACK THE MONEY AND THE SAME IS UTILIZED FOR INVESTMENT IN M/S. LAXMI PRASANNA AGRO PAPER INDUSTRIES LTD. THE ASSESSING OFFICER HAS 3 ITA NO. 315/VIZ/2016 & C.O.NO. 12/VIZ/2017 ( M/S. SRINIVASA POULTRY COMPLEX ) DISBELIEVED THE EXPLANATION OF THE ASSESSEE AND IS OF TH E OPINION THAT THE ASSESSEE HAS MADE INVESTMENTS IN CASH, THEREFORE THE TRANSACTION IS NOT A GENUINE TRANSACTION. ACCORDINGLY, HE MADE ADDITION OF RS. 50.00 LAKHS AS UNEXPLAINED INVESTMENT. 3 . ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE HAS FILED A COPY OF THE BANK STATEMENT WITH HDFC BANK, LEDGER EXTRACT FOR ADVANCE OF PROPERTY AND INVESTMENT IN SHARES AND THE COPIES OF THE REPLIES SUBMITTED TO THE ASSESSING OFFICER VIDE LETTER DATED 17/01/2014 & 20/0 1/2014 AND SUBMITTED THAT THE ASSESSEE HAS WITHDRAWN MONEY FROM HIS BANK ACCOUNT WITH HDFC FOR THE PURPOSE OF PURCHASE OF LAND , WHEN THE SAME IS NOT MATERIALISED , THE AMOUNT RECEIVED BACK WAS UTILIZED TO MAKE THE IMPUGNED INVESTMENTS. THE LD. CIT(A) AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 4 . ON BEING AGGRIEVED, REVENUE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 5. LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER PASSED BY THE ASSESSIN G OFFICER. 6 . ON THE OTHER HAND, LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS WITHDRAWN MONEY FROM HIS BANK ACCOUNT HELD WITH HDFC AND THE SAME IS INVESTED IN CASH IN M/S. LAXMI PRA SANNA AGRO PAPER INDUSTRIES LTD., T HIS FACT IS NOT 4 ITA NO. 315/VIZ/2016 & C.O.NO. 12/VIZ/2017 ( M/S. SRINIVASA POULTRY COMPLEX ) DISPUTED BY THE ASSESSING OFFICER. TH E ONLY DISPUTE WITH THE ASSESSING OFFICER IS THAT ASSESSEE HAS INVESTED IN CASH IN THE SAID COMPANY , THEREFORE, IT IS NOT A GENUINE TRANSACTION , HENCE, HE MADE THE ADDITION . IT IS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT ASSESSING OFFICER IS NOT CORRECT IN MAKING THE ADDITION AS THE SOURCE OF INVESTMENT IS EXPLAINED WITH DOCUMENTARY EVIDENCE. 7 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 8 . THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WHETHER INVESTMENT MADE BY THE ASSESSEE IN M/S. LAXMI PRASANNA AGRO PAPER INDUSTRIES LTD. IS A GENUINE TRANSACTION OR NOT. THE ASSESSEE IS ESTABLISHED BEYOND THE DOUBT BEFORE THE ASSESSING OFFICER THAT HE HAS WITHDRAWN THE MONEY FROM HIS BANK ACCOUNT FOR PURCHASE OF LAND , HOWEVER, IT WAS NOT MATERIALISED THEREFORE , THE SAME IS INVES T ED IN THE ABOVE SAID COMPANY . SO, THE ASSESSEE HAS PROVED BEYOND DOUBT THAT TH E INVESTMENT MADE BY HIM IN M/S. LAXMI PRASANNA AGRO PAPER INDUSTRIES LTD. IS FROM THE WITHDR A WAL S OF HIS BANK ACCOUNT. ONCE, THE ASSESSEE HAS WITHDRAWN MONEY FROM HIS BANK ACCOUNT, THIS FACT IS PROVED , W HETHER HE PAID IN CASH OR IN CHEQUE IS IMMATERIAL, IF AT ALL , ASSESSING OFFICER IS DOUBTED THE 5 ITA NO. 315/VIZ/2016 & C.O.NO. 12/VIZ/2017 ( M/S. SRINIVASA POULTRY COMPLEX ) TRANSACTION, HAS TO PROVE THAT THE MONEY INVESTED BY THE ASSESSEE IS NOT THE MONEY , WHICH IS WITHDRAWN FROM HIS BANK ACCOUNT. IN THIS CASE, ASSESSEE HAS FULLY DISCHARGED HIS BURDEN THAT THE MONEY INVESTED IN THE SAID COMPANY IS WITHDRAWAL FROM HIS ACCOUNT . UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. WE ALSO FIND THAT THE ASSESSING OFFICER MA DE THE ADDITION WITHOUT APPLICATION OF MIND. THE ASSESSING OFFICER BEING A QUASI JUDICIA RY AUTHORITY , BEFORE MAKING THE ADDITION HE SHOULD HAVE TO CONSIDER THE EVIDENCE PROPERL Y AND TO APPLY HIS MIND AND SHOULD HAVE BEEN PASSED ASSESSMENT. FOR THE SAKE OF CONVENIENCE , THE RELEVANT PORTION OF THE ORDER OF THE LD. CIT(A) IS EXTRACTED AS UNDER: - 5.3 . I HAVE CONSIDERED THE SUBMISSIONS AND THE DETAILS FILED. FROM THE PERUSAL OF DETAILS FILED, IT IS SEEN THAT THE AMOUNTS HAVE BEEN WITHDRAWN FROM THE ASSESSEE'S BANK ACCOUNT WHICH HAS PROVIDED CREDIT FACILITIES. THESE WITHDRAWALS HAVE BEEN ULTIMATELY UTILIZED FO R THE IMPUGNED ADVANCES. THE AO HAS ALSO NOT POINTED ANY DISCREPANCY ON THIS EXPLANATION AS TO SOURCE. THEREFORE, THE SOURCE FOR THE INVESTMENT HAS TO BE TAKEN AS EXPLAINED. THE REASONING IN THE ORDER FOR THE IMPUGNED ADDITION WAS MERELY BECAUSE THE TRANSA CTION WAS MADE IN CASH. SUCH A REASONING GIVEN BY THE AO FOR THE IMPUGNED ADDITION IS NOT JUSTIFIED, WHEN SOURCE HAS BEEN SATISFACTORILY EXPLAINED. BESIDES, THE ASSESSEE HAS DECLARED THIS IMPUGNED INVESTMENT IN ITS BALANCE SHEET FILED. THUS THE AO IS NOT J USTIFIED IN MAKING THE IMPUGNED ADDITION TOWARDS UNEXPLAINED INVESTMENT. THUS, CONSIDERING THE OVERALL FACTS AND DETAILS FRIED; I AM OF THE VIEW THAT THE IMPUGNED ADDITION HAS BEEN MADE WITHOUT ANY MATERIAL BASIS. THEREFORE, THE AO IS DIRECTED TO DELETE TH E SAME. 6 ITA NO. 315/VIZ/2016 & C.O.NO. 12/VIZ/2017 ( M/S. SRINIVASA POULTRY COMPLEX ) 9. IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS, WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A). THUS, THIS APPEAL FILED BY THE REVENUE IS DISMISSED. 10 . WITH REGARD TO CROSS OBJECTION FILED BY THE ASSESSEE IS CONCERNED, IS ONLY SUPPORTIVE TO THE ORDER OF THE LD. CIT(A). IN VIEW OF OUR DECISION IN THE APPEAL FILED BY THE REVENUE, THE CROSS OBJECTION HAS BECOME INFRUCTUOUS AND IS DISMISSED. 11 . IN THE RESULT, APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 1 8 T H DAY OF APRIL , 201 8 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 8 T H APRIL , 201 8 . VR/ - COPY TO: 1. THE ASSESSEE - M/S. SRINIVASA POULTRY COMPLEX, D.NO. 9 - 8, VELPUR POST, PANDURANGA TEMPLE, TANUKU, WEST GODAVARI DIST. 2. THE REVENUE ACIT, CIRCLE - 1, ELURU. 3. THE CIT, RAJAHMUNDRY. 4. THE CIT(A) , RAJAHMUNDRY. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.