M/s Narayana Reddy Agencies, Mandapeta V. THE ITO., WARD-1, Kakinada

ITA 150/VIZ/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6800 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 14-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D J P ANAND
• Keywords: Unexplained cash credit
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, HON'BLE JUDICIAL MEMBER ITA NO. 150 / VIZ /201 3 (ASST. YEAR : 20 09 - 1 0 ) M/S. NARAYANA REDDY AGENCIES, CINEMA ROAD, MANDAPETA, EAST GODAVARI DISTRICT. VS. IT O , WARD - 1, KAKINADA. PAN NO. AABFN 8256 G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SHRI D.J.P. ANAND - SR. DR DATE OF HEARING : 08 / 0 8 /201 7 . DATE OF PRONOUNCEMENT : 30 / 0 8 /201 7 . O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), VISAKHAPATNAM , DATED 0 7 /0 2 /2013 FOR THE ASSESSMENT YEAR 2009 - 10 . 2. FACTS ARE IN BRIEF THAT THE ASSESSEE - FIRM ENGAGED WHOLESALE TRADE IN GUNNIES, EGGS ETC., FILED ITS RETURN OF INCOME BY DECLARING TOTAL INCOME OF 1,35,610/ - . THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT'). LATER ON, ASSESSEES CASE WAS SELECTED FOR SCRUTINY. AFTER FOLLOWING DUE PROCEDURE, ASSESSMENT IS COMPLETED UNDER SECTION 143(3) OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE 2 ITA NO. 150/VIZ/2013 (M/S. NARAYANA REDDY AGENCIES) ASSESSING OFFICER HAS ISSUED A NOTICE TO THE ASSESSEE TO FILE THE DETAILS OF ALL SUNDRY CREDITORS. IN RESPONSE TO THE NOTICE, THE ASSESSEE HAS FILED DETAILS OF THE SUNDRY CREDITORS WHICH ARE AS FOLLOWS: - S L . NO. NAME OF THE SUNDRY CREDITOR ADDRESS DATE OF PURCHASE AMOUNT (RS .) 1 A. ANANDA REDDY RAMACHANDRAPURAM 1,84,067 2 A. VEERRAJU RAYAVARAM 1,19,542 3 A.V. SUBBA RAO ANAPARTHI 2,97,675 4 KAMA RAJU PULAGURTHA 1,39,970 5 SRINIVASA RAO PALATHODU 2,55,197 6 VEERABADHARA RAO KALERU 17/3/2009 TO 24/03/2009 1,62,540 7 G. KOTESHWARA RAO VALLURU 16/03/2009 TO 24/03/2009 1,83,973 8 G. KRISHNA ALAMURU 16/03/2009 TO 24/03/2009 1,22,377 9 G. SURIBABU VALLURU 17/03/2009 TO 23/03/2009 2,34,360 10 G. TULASIRAM MACHAVARAM 16/03/2009 TO 22/03/2009 1,27,575 11 N.RAMACHANDRA RAO EDIDA 17/03/2009 TO 23/03/2009 2,01,928 12 P. PRAKASH RAO TAPESWARAM 18/03/2009 TO 25/03/2009 2,94,538 13 R. SUNDHAKAR RAMACHANDRAPURAM 21/03/2009 TO 25/03/2009 1,83,330 14 S. BABU RAO CHINTALURU / 17/03/2009 TO 25/03/2009 2,70,830 15 T. PAPA RAO PULAGURTHA 16/03/2009 TO 22/03/2009 1,55,925 TOTAL CREDIT PURCHASES IN THE THIRD WEEK OF MARCH, 2009 29,33,827 THE ASSESSING OFFICER AFTER CONSIDERING THE DETAILS FILED BY THE ASSESSEE, HE DEPUTED INSPECTOR FOR VERIFICATION AND ACCORDINGLY THE INSPECTOR MADE ENQUIRIES AS PER THE LIST GIVEN BY THE ASSESSEE , BUT N O SUCH PERSON IN THE LIST WAS FOUND. T HE ASSESSING OFFICER INFORMED THE SAME TO THE MANAGING PARTNER OF THE ASSESSEE - FIRM AND ASKED SURNAME, FATHERS NAME, DOOR NUMBER AND FULL ADDRESS ES OF THE SUNDRY CREDITORS . THE ASSESSEE - FIRM HAS FAILED TO GIVE SUCH INFORMATION. AGAIN ASSESSING 3 ITA NO. 150/VIZ/2013 (M/S. NARAYANA REDDY AGENCIES) OFFICER ON 22/11/2011 AS K E D THE MANAGING PARTNER WHAT IS THE REASON FOR NON - PRODUCTION OF SUNDRY CREDITORS . IT WAS SUBMITTED THAT THESE CREDIT PURCHASES WERE MADE THROUGH BROKERS AND THEY ARE NOT READY TO APPEAR BEFORE THE INCOME TAX AUTHORITIES DUE TO FEAR, HENCE, HE IS UNABLE TO PRODUCE THEM. SINCE THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE CREDITORS AND EXPLANATION OFFER ED IS NOT SATISFACTORY, THE ASSESSING OFFICER TREATED THE TOTAL CREDIT PURCHASES OF 29,33,827/ - AS UNEXPLAINED CREDITS AND THE SAME IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 3. BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT ASSESSEE HAS REPAID THE AMOUNTS TO THE SUNDRY CREDITORS AND THEREFORE, THE ASSESSING OFFICER IS NOT CORRECT IN TREATING THE TRANSACTIONS ARE NOT GENUINE. THE LD.CIT(A) AFTER CONSIDERING THE EXPLANATION GIVEN BY THE A SSESSEE , HE HAS OBSERVED THAT ACCORDING TO THE ASSESSEE, HE HAS MADE CASH PAYMENTS AND NO EVIDENCE IS FILED. THE ASSESSEE ALSO NOT FILED BILLS/VOUCHERS FOR PURCHASE OF EGGS FROM THE CREDITORS. THE ASSESSEE HAS ALSO FAILED TO FURNISH ADDRESS ES OF THE CRED ITORS, I DENTITY AND GENUINENESS OF THE TRANSACTIONS AND CONFIRMED THE ORDER PASSED BY THE ASSESSING OFFICER. 4 . ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL . 5 . IT IS SUBMITTED THAT THE ASSESSEE HAS PURCHASED EGGS FROM BROKERS AND THEREFORE HE IS NOT ABLE FURNISH THE DETAILS OF THE CREDITORS 4 ITA NO. 150/VIZ/2013 (M/S. NARAYANA REDDY AGENCIES) AND SUBMITTED THAT ALL THE TRANSACTIONS ARE GENUINE, ADDITION MAY BE DELETED. 6 . ON THE OTHER HAND, L EARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7 . I HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 8 . THE CASE OF THE ASSESSEE IS THAT HE PURCHASED THE EGGS FROM 15 PARTIES ON DIFFERENT DATES IN THE MONTH OF MARCH, 2009 , WHIC H IS SHOWN IN HIS BOOKS AS SUNDRY CREDITORS. WHEN THE ASSESSING OFFICER ASKED THE ASSESSEE TO FILE THE ADDRESSES OF THE SUNDRY CREDITORS, HE SUBMITTED THAT NO DETAILS ARE AVAILA B LE AND EXPLAINED THAT HE PURCHASED THE EGGS THROUGH BROKERS. I FIND THAT WHEN ASSESSEE PURCHASED THE EGGS FROM THE BROKERS, HE MUST KNOW THE NAMES OF THE BROKERS AT LEAST . HE HAS NOT GIVEN ANY DETAILS OF THE BROKERS ALSO BEFORE THE ASSESSING OFFICER. IF AT ALL, HE PURCHASED THE EGGS FROM THE BROKERS, HOW DID HE KNOW THE NAMES OF 15 PERSONS , WHO ARE CONSIDERED BY THE ASSESSEE AS SUNDRY CREDITORS ? ACCORDING TO ASSESSEE HIMSELF, HE DOES NOT ANY CONTACT WITH THE SUNDRY CREDITORS , ONLY HE KNOWS THE BROKERS. WHEN THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE EVEN BROKERS , HE FAILED TO PRODUCE BY SAYING THAT BR O KERS ARE IN FEAR TO APPEAR BEFORE THE INCOME TAX AUTHORITIES. THIS EXPLANATION GIVEN BY THE ASSESSEE CANNOT BE ACCEPTED. IN THIS CASE, THE ASSESSEE HAS FAILED TO GIVE DETAILS OF ALL THE PARTIES, IDENTITY OF THE PAR T I ES, GENUINENESS OF THE TRANSACTION, 5 ITA NO. 150/VIZ/2013 (M/S. NARAYANA REDDY AGENCIES) THE RE FORE, THE ASSESSING OFFICER HAS RIGHTLY CONSIDERED THE ENTIRE TRANSACTIONS ARE NOT GENUINE, ACCORDINGLY HE MADE THE ADDITION , WHICH IS CONFIRMED BY THE LD. CIT(A). IN VIEW OF THE ABOVE, I FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND UPHOLD THE ORDER PASSED BY THE LD.CIT(A). THUS, THIS APPEAL FILED BY THE ASSESSEE IS DISMISSED. 9 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN OPEN COURT ON THIS 3 0 T H DAY OF AUGUST , 201 7 . S D / - ( V. DURGA RAO ) JUDICIAL MEMBER DATED : 3 0 T H AUGUST , 201 7 . VR/ - COPY TO: 1. THE ASSESSEE - M/S. NARAYANA REDDY AGENCIES, CINEMA ROAD, MANDAPETA, EAST GODAVARI DISTRICT. 2. THE REVENUE ITO, WARD - 1, KAKINADA. 3. THE CIT, RAJAHMUNDRY. 4. THE CIT(A) , VISAKHAPATNAM. 5. THE D.R. , VISAKHAPATNAM. 6. GUARD FILE . BY ORDER (VUKKEM RAMBABU) SENIOR PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.