Sri Musunuri Bala Manmadha Rao, Penamaluru V. The ACIT, Circle-1(1), Vijayawada

ITA 148/VIZ/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94084 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 year(s) 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 28-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M N M NAIK SR
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68

Judgement Text

ITA NO.148/VIZAG/2011 M.B. MANMADHA RAO, PENAMALURU IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B.R. BASKARAN , ACCOUNTANT MEMBER ITA NO.148/VIZAG/2011 ASSESSMENT YEAR : 2007-08 SRI MUSUNURI BALA MANMADHA RAO PENAMALURU VS. ACIT CIRCLE-1(1) VIJAYAWADA (APPELLANT) (RESPONDENT) (PAN NO.AICPM 3523E) ASSESSEE BY: SHRI C. SUBRAHMANYAM, CA REVENUE BY: SHRI M.N.M. NAIK, SR.AR DATE OF HEARING : 27.07.2015 DATE OF PRONOUNCEMENT : 27.07.2015 ORDER PER D. MANMOHAN, VICE PRESIDENT:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 11.2.2011 PASSED BY THE CIT(A) VIJAYAWADA AND IT PE RTAINS TO THE ASSESSMENT YEAR 2007-08. ADDITION MADE BY THE ASSESSING OFFIC ER U/S 68 OF THE INCOME- TAX ACT HAVING BEEN CONFIRMED BY THE CIT(A), ASSESS EE IS IN APPEAL BEFORE US. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE A.O. NOTICED THAT THE ASSESSEE TOOK LOANS FROM PERSONS AND PAID INTEREST THEREON. WHEN CALLED UPON TO EXPLAIN, THE ASSESSEE FURNISHED DOCUMENTS I N SUPPORT OF IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND ALSO FURNISHE D DOCUMENTS TO PROVE THE GENUINENESS OF THE TRANSACTIONS. OUT OF THE 30 CAS H CREDITS, THE ASSESSING OFFICER NOTICED THAT WITH REGARD TO 12 CREDITORS TH E ASSESSEE WAS NOT ABLE TO PROVE THE GENUINENESS OF THE CREDITS AND ACCORDINGL Y ADDED A SUM OF RS.35,50,000/- U/S 68 OF THE ACT AND ALSO DISALLOWE D INTEREST PAID ON UNSECURED LOANS AND UNPROVED CREDITS. ON APPEAL FI LED BY THE ASSESSEE THE LD. CIT(A) GAVE SOME PART RELIEF. AGGRIEVED BY THE 10 CASH CREDITS CONFIRMED BY THE CIT(A), ASSESSEE PREFERRED AN APPEAL BEFORE US. IT MAY BE NOTICED THAT IN GROUND NO.1, THE ASSESSEE WRONGLY MENTIONED THE NUMBER OF CREDITORS ITA NO.148/VIZAG/2011 M.B. MANMADHA RAO, PENAMALURU 2 IN DISPUTE AS 12, WHEREAS THE DISPUTE IS WITH REGAR D TO 10 CREDITORS. THE ASSESSEE NOW CHALLENGES THE ADDITION OF RS.31,50,00 0/- MADE BY THE A.O. U/S 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED CASH CREDIT S REFERABLE TO FOLLOWING PERSONS AND AS A CONSEQUENCE IT WAS ALSO CONTENDED THAT THE INTEREST ON BORROWALS DISALLOWED SHOULD BE ALLOWED. 1. A. SIVA PRASAD 2. A. SUMAN CHAKRAVARTHI 3. G. SRINIVASA RAO 4. K. SRIMANNARAYANA 5. K. SIVA PARAVATHI 6. K. SUBHAKAR 7. D. SUJATHA 8. K. ANJANEYULU 9. K. RAMA CHANDRA RAO 10. Y. SAMBASIVA RAO AT THE TIME OF HEARING, LD. COUNSEL SUBMITTED THAT THE AMOUNTS WERE ADVANCED BY AGRICULTURISTS AND SMALL TIME EMPLOYEES AND HE COULD NOT OBTAIN CONFIRMATION LETTERS AND PROPER DETAILS TO PROVE CR EDITWORTHINESS OF THE FOLLOWING CREDITORS AND HENCE THE ASSESSEE IS NOT I NTERESTED IN CONTESTING THE FOLLOWING ADDITIONS: 1. A. SUMAN CHAKRAVARTHI - RS.2,00,000/- 2. D. SUJATHA - RS.2,00,000/- 3. Y. SAMBASIVA RAO - RS.9,00,000/- WITH RESPECT TO SHRI A. SIVA PRASAD IT WAS SUBMITTE D THAT THOUGH ASSESSEE FURNISHED EVIDENCE TO PROVE THE GENUINENES S AND CREDITWORTHINESS, IN THE FORM OF CONFIRMATION LETTERS AND CERTIFICATE OF AGRICULTURAL INCOME, ETC., THE ASSESSING OFFICER REJECTED THE PLEA OF THE ASSE SSEE MERELY ON THE GROUND THAT BANK ACCOUNT IS NOT PRODUCED AND CIT(A) HAS NO T GIVEN ANY ADVERSE FINDING EXCEPT GENERAL OBSERVATIONS I.E. ASSESSEE H AS TO PROVE 3 ESSENTIAL INGREDIENTS I.E. IDENTITY, GENUINENESS AND CREDITWO RTHINESS OF EACH CREDITOR. REGARDING OTHER 6 CREDITORS ASSESSEE FILED ONLY BAS IC DETAILS. 2. THE CASE OF THE ASSESSEE IS BY FURNISHING BASIC DETAILS, THE ASSESSEE HAS DISCHARGED THE INITIAL ONUS CAST UPON HIM AND T HE ASSESSING OFFICER COULD HAVE CONDUCTED INDEPENDENT ENQUIRIES IF HE HAD ANY DOUBT ABOUT THE ITA NO.148/VIZAG/2011 M.B. MANMADHA RAO, PENAMALURU 3 GENUINENESS, CREDITWORTHINESS OR IDENTITY OF THE CR EDITORS. THE LD. CIT(A) BASED HIS CONCLUSIONS ON THE REMAND REPORT OF THE A SSESSING OFFICER TO COME TO THE CONCLUSION THAT IT IS FOR THE ASSESSEE TO FU RNISH THE DETAILS AND ASSESSING OFFICER IS NOT REQUIRED TO SPECIFY OR PRO VE THE 3 INGREDIENTS. LD. COUNSEL SUBMITS THAT UNDER THESE CIRCUMSTANCES, THE ASSESSEE HAD TO MAKE SOME EFFORTS TO OBTAIN FURTHER DETAILS WITH REGARD TO THE BALANCE 6 CREDITORS AND OBTAIN DETAILS SUCH AS PATTADAR PASS BOOK, AGRI CULTURAL INCOME CERTIFICATE, BANK PASS BOOK/BANK LOAN LETTER/INCOME CERTIFICATE OF PRO ETC. AND NOW SEEKS TO PRODUCE THE SAME IN THE FORM OF ADDITIONAL EVIDE NCE ALONG WITH A PETITION U/R 29 OF THE APPELLATE TRIBUNAL RULES, WHEREIN IT WAS SUBMITTED THAT SOME OF THE CREDITORS COULD NOT TRACE PATTADAR PASS BOOK OR COULD NOT GET INCOME CERTIFICATES AND THUS IT HAS TAKEN SOME TIME FOR TH E ASSESSEE TO OBTAIN RELEVANT DETAILS AND SOON AFTER OBTAINING THE DETAI LS FROM THE CREDITORS, EFFORTS WERE MADE TO FURNISH THE SAME BEFORE THE TRIBUNAL A ND THUS THERE WAS JUSTIFIABLE REASON FOR NOT FURNISHING THE DETAILS B EFORE THE A.O./CIT(A) AND REQUESTED FOR ACCEPTING THE SAME AS ADDITIONAL EVID ENCE. LD. D.R. DID NOT RAISE ANY SPECIFIC OBJECTION WITH REGARD TO THE ADM ISSION OF THE ADDITIONAL EVIDENCE THOUGH IT WAS SUBMITTED THAT BEFORE THE AS SESSING OFFICER AS WELL AS CIT(A), THE ASSESSEE COULD NOT FURNISH THE INFORMAT ION. 3. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE RECORD. IT IS NO DOUBT TRUE THAT THE INITIAL ONUS I S CAST UPON THE ASSESSEE TO PROVE THE 3 INGREDIENTS SUCH AS IDENTITY, GENUINENE SS AND CREDITWORTHINESS OF A TRANSACTION BUT IN A GIVEN CASE IF IT IS BEYOND T HE ASSESSEE TO FURNISH SUCH DETAILS AND PLEADS BEFORE THE A.O. THAT HE WAS UNAB LE TO FURNISH THE DETAILS AND ALSO REQUESTS FOR COLLECTING THE DETAILS FROM T HE PARTIES DIRECTLY, PLEADING HIS HELPLESSNESS, IT CAN BE SAID THAT THE INITIAL O NUS CAST UPON THE ASSESSEE IS DISCHARGED AS COULD BE NOTICED FROM PARA 9.2 OF THE ORDER OF THE CIT(A). THE ASSESSEE REQUESTED THE ASSESSING OFFICER TO MAKE IN DEPENDENT ENQUIRIES. BUT IT APPEARS THAT THE TAX AUTHORITIES WERE OF THE OPI NION THAT THE LEGAL OBLIGATION IS UPON THE ASSESSEE TO PROVE THE SOURCE OF THE CRE DIT. UNDER THESE CIRCUMSTANCES, THE ASSESSEE HAD TO MAKE FURTHER EFF ORTS TO OBTAIN ADDITIONAL EVIDENCE. IN THE PECULIAR CIRCUMSTANCES OF THE CAS E, WE ADMIT THE ADDITIONAL ITA NO.148/VIZAG/2011 M.B. MANMADHA RAO, PENAMALURU 4 EVIDENCE AND SET ASIDE THE MATTER TO THE FILE OF TH E ASSESSING OFFICER WHO IS DIRECTED TO RE-EXAMINE THE MATTER IN THE LIGHT OF T HE ADDITIONAL EVIDENCE FILED BEFORE US AND DECIDE THE SAME IN ACCORDANCE WITH LA W. WITH THESE OBSERVATIONS, THE APPEAL FILED BY THE ASSESSEE IS T REATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 27 TH JULY, 2015 SD/- SD/- (B.R. BASKARAN) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT VISAKHAPATNAM, DATED 27 TH JULY, 2015 VG/SPS COPY TO 1 SRI MUSUNURI BALA MANMADHA RAO, D.NO.4-15, PENAMA LURU, KRISHNA DIST. 2 ACIT CIRCLE-1(1), VIJAYAWADA 3 THE CIT, VIJAYAWADA 4 THE CIT(A), VIJAYAWADA 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER ASST. REGISTRAR INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM