Kamala Devi, Kakinada V. The ACIT, Rajahmundry

ITA 116/VIZ/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2068 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 06-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SONAWAL
• Assessee Lawyers: P PRABHAKARA MURTHY
• 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. 1 16 / VIZ /201 7 (ASST. YEAR : 2009 - 10 ) SMT. KAMALA DEVI, W/O MAHENDRA KUMAR JAIN, PROPX: SRI RAJ JEWELLERS, D.NO. 34 - 1 - 28, KAKINADA. V S . A CIT, CENTRAL CIRCLE , RAJAHMUNDRY . PAN NO. AHDPK 3736 F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P. PRABHAKARA MURTHY , ADV. DEPARTMENT BY : SHRI D.K. SONAWAL CIT DR DATE OF HEARING : 1 3 / 1 1 /201 8 . DATE OF PRONOUNCEMENT : 16 / 1 1 /201 8 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 3 , VISAKHAPATNAM , DATED 21 / 11 /201 6 FOR THE ASSESSMENT YEAR 2009 - 10 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT ASSESSEE IS CARRYING ON THE BUSINESS OF MONEY LENDING AND TRADE OF GOLD AND SILVER. A SURVEY AND SEIZURE OPERATION WAS CONDUCTED IN THE GROUP CASES OF THE ASSESSEE ON 03/02/2009 . THE ASSESSEE HAD FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009 - 10 BY DECLARING TOTAL 2 ITA NO. 1 16 /VIZ/2017 ( SMT. KAMALA DEVI ) INCOME OF RS. 3,06,000/ - , THE SAME WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TA X ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT') . SUBSEQUENTLY, IT WAS CONVERTED INTO SCRUTINY BY ISSUING NOTICE UNDER SECTION 143(2) AND THEREAFTER ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION , THE ASSESSEE OBTAINED LOANS FROM THE FOLLOWING 05 PERSONS: - SL. N O . NAME OF THE CREDITOR DATE OF LOAN TAKEN AMOUNT (RS.) 1. SRI J. APPA RAO 06/06/2008 17,000 2 SRI MVR NAIDU 15/04/2008 17,500 3 SRI P. VENKATESWARA RAO 25/04/2008 15,000 4 SRI N.V. CHAKRADHAR BABU 28/04/2008 17,500 5 SRI P. PRAKASH 09/06/2008 15,000 THE ASSESSEE HAS FILED CONFIRMATION LETTERS FROM ALL THE FIVE LENDERS . THE ASSESSING OFFICER AFTER CONSIDERING THE CONFIRMATION LETTERS AND SUBMISSIONS MADE BY THE ASSESSEE, HE HAS OBSERVED THAT THE ASSESSEE HAS FAILED TO FILE THE DETAILS AND EVIDENCES WITH REFERENCE TO THE ACCUMULATION OF THE SAVINGS OF THE LOAN CREDITORS . ACCORDINGLY, HE DISBELIEVED THE ENTIRE EXPLANATION AND CONFIRMATION LETTERS ISSUED BY THE CREDITORS AND ADDED THE ENTIRE AMOUNT OF RS. 82,000/ - AND INTEREST IN THE HANDS OF THE ASSESSEE. 3 ITA NO. 1 16 /VIZ/2017 ( SMT. KAMALA DEVI ) 3 . ON APPEAL, LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 4 . ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 5. LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS BORROWED SMALL AMOUNTS FROM FIVE PARTIES , FROM WHOM CONFIRMATIONS LETTERS HAVE BEEN TAKEN AND FILED BEFORE THE ASSESSING OFFICER . THE ASSESSEE ALSO EXPLAINED THE SOURCE OF INVESTMENT AND INTEREST ALONG WITH PRINCIPAL AMOUNT PAID TO THEM . THEREFORE, THE ADDITION MADE BY THE ASSESSEE AND CONFIRMED BY THE L D. CIT(A) IS NOT CORRECT. 6 . ON OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 7 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 8 . THE ASSESSEE HAS B ORROWED AN AMOUNT OF RS. 82,000/ - FROM FIVE PERSONS AND INTEREST OF RS. 8,748/ - IS ALSO PAID ALONG WITH PRINCIPAL AMOUNT. THE ASSESSEE HAS FILED CONFIRMATION LETTERS OF THE FIVE PARTIES ALON G WITH THEIR DETAILED ADDRESSES, WHEREIN THE CREDITORS HAVE EXPLAINED THE SOURCE OF THEIR INCOME. THE ASSESSING OFFICER MADE THE ADDITION ON THE GROUND THAT THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF THE LOAN CREDITORS. T HE 4 ITA NO. 1 16 /VIZ/2017 ( SMT. KAMALA DEVI ) CONFIRMATION LETTERS ITSELF C LEARLY SHOW THE SOUR C E OF ADVANCE BY THE LOAN CREDITORS, PARTICULARLY, WHEN THE AMOUNTS SO SMALL, BELOW RS. 20,000/ - , IN OUR OPINION, THE ASSESSING OFFICER IS NOT CORRECT IN REJECTING THE CONFIRMATION LETTERS WITHOUT ANY BASIS. BY CONSIDERING THE ENTIRE F ACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) IS NOT CORRECT. IN VIEW OF THE ABOVE, THE ORDER PASSED BY THE LD. CIT(A) IS REVERSED. THUS, THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 1 6 T H DAY OF NOV ., 201 8 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 6 T H NOVEMBER , 201 8 . VR/ - COPY TO: 1. THE ASSESSEE SMT. KAMALA DEVI, W/O MAHENDRA KUMAR JAIN, PROPX: SRI RAJ JEWELLERS, D.NO. 34 - 1 - 28, KAKINADA. 2. THE REVENUE ACIT, CENTRAL CIRCLE, RAJAHMUNDRY. 3. THE PR. CIT (CENTRAL), VISAKHAPATNAM. 4. THE CIT(A) - 3, VISAKHAPATNAM. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE . BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.