Sri Kakarlapudi Ajay Kumar, Hyderabad V. ITO, Hyderabad

ITA 1617/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3282 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 23-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 20-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B V PRASADA REDDY
• Assessee Lawyers: K NEERAJA
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER ITA NO.1617/HYD/10 : A SSTT. YEAR 2006-07 SHRI KAKARLAPUDI AJAY KUMAR, HYDERABAD ( PAN - AKHPK 2042 H ) V/S. INCOME - TAX OFFICER, WARD 16(1), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. K.NEERAJA RESPONDENT BY : SHRI B.V.PRASADA REDDY O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YE AR 2006-07 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME-TAX(APPEALS). 2. GROUNDS OF APPEAL OF THE ASSESSEE ARE AS UNDER - 1. THE ORDER OF THE LEARNED. CIT(A) IN UPHOLDING THE A DDITION OF CASH CREDITS OF RS.23,00,000/-, IS ERRONEOUS BOTH ON FA CTS AND IN LAW. 2. THE LEARNED. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION BY REJECTING THE EXPLANATION GIVEN BY THE APPELLANT WI THOUT EXAMINING THE CREDITORS, IN SPITE OF THE APPELLANT S REQUEST TO EXAMINE THEM PERSONALLY WHICH AMOUNTS TO FAILURE OF NATURAL JUSTICE. 3. THE LEARNED CIT(A) IS NOT CORRECT IN UPHOLDING THE ADDITION ON THE SOLE GROUND THAT THE SIGNATURES OF THE TWO CREDITOR S I.E., K.MURTHY RAJU AND K.MURALI IN THE CONFIRMATORY LETTERS AND A FFIDAVITS WERE NOT TALLYING WITHOUT HAVING THE CORRECT SIGNATURE B EFORE HIM. 4. THE MERE FACT THAT NON-TALLY OF THE SIGNATURES CANN OT BE TAKEN AS A CONCLUDING PROOF TO DETERMINE THE IDENTITY AND CR EDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION. ITA NO.1617/HYD/10 SHRI KAKARLAPUDI AJAY KUMAR, HYDERABAD 2 5. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE ADVANC ED AT THE TIM E OF HEARING, THE APPELLANT PRAYS THAT THE ADDITION CONFIRMED BY THE CIT(A) MAY BE DELETED OR ALTERNATIVELY THE A PPEAL MAY BE SET ASIDE TO THE ASSESSING OFFICER FOR PROPER EXAMI NATION OF THE CREDITORS TO DO JUSTICE TO THE APPELLANT. 3. LEARNED COUNSEL FOR THE ASSESSEE FOR THE ASSES SEE SUBMITTED THAT THE ASSESSING OFFICER DURING THE ASSESSMENT P ROCEEDINGS NEVER CALLED FOR THE EVIDENCE IN SUPPORT OF THE CLAIM OF THE ASS ESSEE THAT THE CREDITORS WERE HAVING SUFFICIENT AGRICULTURAL INCOME AND THE IR CREDIT-WORTHINESS WAS BEYOND ANY DOUBT. SHE SUBMITTED THAT THE CONFIRMAT ION LETTERS FILED BY THE CREDITORS WERE REJECTED BY THE REVENUE AUTHORITIES IN SPITE OF THE ASSESSEES REQUEST TO EXAMINE THEM PERSONALLY, WHI CH AMOUNTS TO FAILURE OF NATURAL JUSTICE. 4. LEARNED DEPARTMENTAL REPRESENTATIVE HAS OPPOSE D THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE AND SUBMITTED THAT SUFFICIENT OPPORTUNITY WAS PROVIDED BY THE ASSESSIN G OFFICER AS WELL AS THE CIT(A) TO THE ASSESSEE TO LEAD EVIDENCE IN SUPPORT OF ITS CASE REGARDING THE GENUINENESS OF THE CREDIT ENTRY AND THEREFORE, THER E WAS NO JUSTIFICATION FOR SETTING ASIDE THE ISSUE TO THE FILE OF THE ASSESSIN G OFFICER. HE SUBMITTED THAT THE ASSESSEE HAS FAILED TO PRODUCE ANY CORROBO RATIVE EVIDENCE IN SUPPORT OF ITS CLAIM OF CREDITWORTHINESS OF THE CRE DITORS. HE REFERRED TO THE RELEVANT PARAS OF THE ORDERS OF THE ASSESSING OFFIC ER AND THE CIT(A) IN SUPPORT OF THE CASE OF THE REVENUE. HE SUBMITTED T HAT THE CREDIT ENTRIES AMOUNTING TO RS.23 LAKHS WERE FROM UNEXPLAINED SOUR CES AND THEREFORE, THE ADDITION MADE WAS WHOLLY JUSTIFIED. HE RELIED ON T HE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION CAREFUL LY AND HAVE PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). WE FIND THAT THE ASSESSEE HAS REQUESTED THE REVENUE AUTHORITIES FOR EXAMINATION OF THE ITA NO.1617/HYD/10 SHRI KAKARLAPUDI AJAY KUMAR, HYDERABAD 3 CREDITORS PERSONALLY AND THE SAME WAS NOT ACCEPTED BY THE REVENUE AUTHORITIES FOR NO VALID REASON. DURING THE REMAND PROCEEDINGS BEFORE THE ASSESSING OFFICER, THE ASSESSEE WROTE A LETTER DATE D 21.9.2010 INFORMING THAT HE IS IN A POSITION TO PRODUCE BEFORE HIM SHRI K.MURALI, SHRI K.MURTHY RAJU AND SHRI P.SIVA PRASAD FOR VERIFICATION OF THE CREDIT ENTRY. ALTHOUGH THE ONUS IS ON THE ASSESSEE TO PROVE THE IDENTITY AND C REDITWORTHINESS OF THE CREDITORS AND THE GENUINENESS OF THE CREDIT ENTRY B EFORE THE REVENUE AUTHORITIES, IT IS EQUALLY TRUE THAT THE ASSESSEE H AS TO BE PROVIDED SUFFICIENT OPPORTUNITY TO DISCHARGE ITS ONUS IN PROVING THE CR EDIT ENTRY. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW T HAT IT SHALL BE IN THE INTERESTS OF JUSTICE TO PROVIDE ONE MORE OPPORTUNIT Y TO THE ASSESSEE TO PROVE ITS CASE REGARDING THE CREDIT ENTRY, AND ACCORDINGL Y THE ISSUE IN THE GROUNDS OF APPEAL OF THE ASSESSEE IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER WITH DIRECTION TO FRAME A DE NOVO ASSESSMENT IN ACCORDAN CE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE SHALL BE AT LIBERTY TO LEAD EVIDENCE IN SUPPORT OF ITS CASE REGARDING THE CREDITWORTHINESS OF THE CREDITOR AND THE GENUINENES S OF THE CREDIT ENTRY. WE DIRECT ACCORDINGLY. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 3-6-2011 SD/- SD/- (AKBER BASHA) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 03-06-2011 COPY FORWARDED TO: 1. SHRI KAKARLAPUDI AJAY KUMAR, 6 - 3 - 597/101, INDIRA HEIGHTS, ANANDNAGAR COLONY, KHAIRATABAD, HYDERABAD ITA NO.1617/HYD/10 SHRI KAKARLAPUDI AJAY KUMAR, HYDERABAD 4 2. INCOME - TAX OFFICER, WARD - 16(1), HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS), V, HYDERABAD. 4. COMMISSIONER OF INCOME - TAX IV , HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.