K.Anantha Rao (HUF), Amadalavalasa V. THE ITO, WARD - 1, Srikakulam

ITA 178/VIZ/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6508 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 28-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHRIM N MURTHYNAIK
• Assessee Lawyers: SHRI GVN HARI
• Keywords: Unexplained cash credit; Unexplained investment; Additional evidence; Onus to prove; Revised return
• Section: 139(5); 6; 69

Judgement Text

IN THEINCOMETAXAPPELLATETRIBUNAL VISAKHAPATNAMBENCH,VISAKHAPATNAM BEFORESHRI V. DURGA RAO,HONBLEJUDICIAL MEMBER& SHRI D.S.SUNDERSINGH,HONBLEACCOUNTANTMEMBER ITA NO.178/VIZ/2014 (ASST.YEAR :2010-11) K.ANANTHARAO (HUF), D.NO.16-1-154, OPP.INDUSTRIALESTATE, CHINTADA, AMADALAVALASA, SRIKAKULAM. VS. ITO,WARD-1, SRIKAKULAM. PAN NO.AAHHK6541 D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRIG.V.N.HARI ADVOCATE. DEPARTMENTBY : SHRIM.N.MURTHYNAIK SR.DR DATE OFHEARING : 24/10/2017. DATE OFPRONOUNCEMENT : 17/11/2017. ORDE R PERV.DURGA RAO,JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), VISAKHAPATNAM, DATED 19/02/2014 FORTHEASSESSMENT YEAR2010-11. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN HUF DERIVING INCOME FROM OTHER SOURCES BY WAY OF DIVIDEND INCOME FROM CHITS, INTEREST ON FDRS AND OTHER INCOME. FOR THE ASSESSMENT YEAR 2010-11, IT HAD FILED A RETURN OF INCOME ON 2 ITANO.178/VIZ/2014 (K. ANANTHARAO) 04/10/2010 DECLARING TOTAL INCOME OF RS. 5,86,454/-. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT') ON 12/01/2011. AS PER AIR INFORMATION THROUGH CASS, THE ASSESSEE HAD TWO BANK ACCOUNTS AND ALSO HOLDING CERTAIN FIXED DEPOSITS WHICH WERE NOT DECLARED TO THE DEPARTMENT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED A REVISED RETURN OF INCOME ON 24/01/2012 BY DECLARING INCOME OF RS. 8,05,000/- UNDER OTHER SOURCES. THE ASSESSING OFFICER HAS NOTED THAT THE SECOND RETURN WAS NOT VALID ONE, IN TERMS OF SECTION 139(4) OF THE ACT AND DID NOT CONSIDER THE SAME. THE ASSESSING OFFICER HAS MADE TWO ADDITIONS ONE IS IN RESPECT OF UNEXPLAINED INVESTMENT UNDER SECTION 69 OF RS. 39,74,113/- AND SECOND ONE IS UNEXPLAINED CREDITSUNDERSECTION68 OFRS.2,96,500/-. 3 . THE FIRST GROUND OF APPEAL RAISED BY THE ASSESSEE IN RESPECT OF UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE ACT OF RS.39,74,113/-,THEASSESSINGOFFICERHAS NOTEDAS UNDER:- 4.2 AS PER THE DETAILS FILED WITH ORIGINAL RETURN, THE ASSESSEE- APPELLANT HAD SHOWN FIXED DEPOSITS OF RS.11,59,660/-, CAPITAL OF RS.21,75,269/- AS ON 31.03.2010, AND THE TOTAL INCOME ADMITTED WAS RS.5,82,454/-. IN THE SECOND RETURN THE ASSESSEE HAS SHOWN FIXED DEPOSITS OF RS.56,52,773/-, CAPITAL OF RS.65,83,634/- AND THE TOTAL INCOME ADMITTED UNDER THE HEAD 'OTHER SOURCES' WAS RS.10,91,015/-. IT WAS REPRESENTED THAT THE BOOKS OF ACCOUNT WERE REVISED TAKING INTO ACCOUNT THE ADDITIONAL FIXED DEPOSITS, AND THAT THE REVISED CAPITAL ACCOUNT SHOWED INTRODUCTION OF CAPITAL BOTH IN CASH AND CHEQUES ON VARIOUS DATES AS UNDER:- 3 ITANO.178/VIZ/2014 (K. ANANTHARAO) 28.07.2009 CASH :RS. 1,00,000/- 30.07.2009 CASH :RS. 1,00,000/- 10.03.2010 CASH :RS. 7,00,000/- 15.03.2010 CASH :RS. 10,10,000/- BYTRANSFER :RS. 19,90,000/- RS. 39,00,000/- 4.3 THE ASSESSEE SOUGHT TO EXPLAIN THE SOURCE FOR THE FIXED DEPOSITS TO BE THE CASH AND CHEQUES CREDITED IN ITS CAPITAL ACCOUNT. THE SOURCE FOR THE ADDITIONAL CREDITS IN THE CAPITAL ACCOUNTWAS PARTLY EXPLAINEDASFOLLOWS:- 1. RS.7,00,000/- FROM SRI PALISETTI SURYAPRAKASARAO, S/O.LATE KRISHNAMURTY, RESIDENT OF AMADALAVALASA, SRIKAKULAMDISTRICT. 2. RS.30,00,000/- FROM LAVETI DILESWARA RAO, S/O.LATE ADINARAYANA AND SMT.LAVETI RAMADEVI, W/O.DILESWARA RAO, RESIDENT OF KUDDULURU NEYVELI, TAMIL NADU. 4.4. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE FILED CONFIRMATION FROM P.SURYAPRAKASARAO, BUT FAILED TO FURNISH ANY EVIDENCE FOR THE CREDITS SAID TO BE RECEIVED FROM L.DILESWARA RAO. THE ASSESSEE HAD SUBMITTED THAT IT HAD TAKEN CASH OF RS.7,00,000/- FROM P.SURYAPRAKASA RAO TOWARDS ADVANCE FOR SALE OF HIS PROPERTY WHICH WAS UTILIZED TO MAKE THE IMPUGNED FIXED DEPOSITS. THE ASSESSING OFFICER EXAMINED SRI P.SURYAPRAKASA RAO AND NOTED THAT HE WAS A RETIRED EMPLOYEE AND DID NOT HAVE THE CAPACITY TO MAKE THE SAID ADVANCE, AND FURTHER HE COULD NOT SUBSTANTIATE HIS CLAIM THAT HE BORROWED MONEY FROM HIS FRIENDS AND PLEDGED HIS WIFE'S JEWELLERY TO MAKE THE IMPUGNED ADVANCE TO THE ASSESSEE. HENCE THE AO HELD THE FIXED DEPOSITS TO THE TUNE OF RS.7 LAKHS TO BE UNEXPLAINED U/S.69 OF THE I.T.ACT, 1961. WITH REGARD TO THE CLAIM THAT THE ASSESSEE HAD RECEIVED RS.30 LAKHS FROM ONE DILLESWARA RAO, THE ASSESSEE COULD NOT FURNISH ANY EVIDENCE. HENCE THE AO HELD DEPOSITS TO THE TUNE OF RS.37 LAKHS TO BE UNEXPLAINED US.69 OF THE I.T.ACT. AS REGARDS THE BALANCE AMOUNT OF RS.7,83,113/- (RS.44,83,113/- - RS.37,00,000/-), THE AO ACCEPTED CREDIT FOR RS.5,09,000/- AND THE BALANCE TO THE TUNE OF RS.2,74,113/- WAS FOUND TO BE UNEXPLAINED. THUS OUT OF THE UNACCOUNTED FIXED DEPOSITS TO THE TUNE OF RS.44,83,113/- THE AO FOUND THAT THE SOURCE FOR THE DEPOSITS TO THE TUNE OF RS.39,74,113/- WAS NOT UNEXPLAINED IN TERMS OF SECTION 69 OF THE I.T. ACT, 1961 AND MADE THE IMPUGNED ADDITIONOFRS.39,74,113/-. 4. ON BEING AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). BEFORE THE LD. CIT(A) ASSESSEE HAS FILED AN ADDITIONAL EVIDENCE UNDER RULE 46A OF THE I.T. RULES, 1962. THE ADDITIONAL 4 ITANO.178/VIZ/2014 (K. ANANTHARAO) EVIDENCE FILED BY THE ASSESSEE IN RESPECT OF CONFIRMATION LETTERS FROMSHRI APPA RAO ANDL.DILESHWARA RAO. 5. SO FAR AS SHRI APPA RAO IS CONCERNED, THE ASSESSEE HAS NOT GIVEN ANY SATISFACTORY EXPLANATION WHY THIS CONFIRMATION WAS NOT FILED BY THE ASSESSING OFFICER. THEREFORE, LD. CIT(A) REJECTED TO ADMIT THE ADDITIONAL EVIDENCE IN RESPECT OF SHRI APPA RAO. SO FAR AS SHRI L. DILESHWARA RAO IS CONCERNED, IT WAS SUBMITTED BEFORE LD. CIT(A) THAT SHRI L. DILESHWARA RAOS SON WAS MET WITH AN ACCIDENT, THEREFORE, ASSESSEE WAS NOT COLLECTED AND FILED CONFIRMATION LETTER BEFORE THE ASSESSING OFFICER. THEREFORE, THE LD. CIT(A) HAS ADMITTED ADDITIONAL EVIDENCE IN RESPECT OF SHRI L.DILESHWARA RAO AND FORWARDED THE SAME TO THE ASSESSING OFFICER. IN THE REMAND PROCEEDINGS, THE ASSESSING OFFICER HAS NOTED THAT SHRI L. DILESHWARA RAO IS RELATIVE TO THE ASSESSEE AND HAS STATED THAT HE HAS GIVEN RS. 30 LAKHS IN CASH AS ADVANCE FOR PURCHASE OF CERTAIN PROPERTY OF AN EXTENT OF 0.13 CENTS BELONGING TO THE ASSESSEE. IT WAS STATED THAT THE CASH WAS HANDED-OVER IN THREE INSTALMENTS OF RS. 10 LAKH EACH, BUT HE COULD NOT GIVE THE DATES OF THE PAYMENTS OF THE SAID CASH. THE BANK ACCOUNT OF SHRI L. DILESHWARA RAO DID NOT INDICATE THAT HE HAD SUFFICIENT FUNDS TO ADVANCE THE SAID AMOUNT. IN THIS REGARD, THE ASSESSING OFFICER HAS SUBMITTED A DETAILED REMAND REPORT TO LD. CIT(A). THE 5 ITANO.178/VIZ/2014 (K. ANANTHARAO) LD.CIT(A) AFTER CONSIDERING THE REMAND REPORT AND ALSO BY CONSIDERING THE EXPLANATION GIVEN BY THE ASSESSEE, HAS OBSERVED ASUNDER:- 4.10 I HAVE CONSIDERED THE VARIOUS SUBMISSIONS AND DETAILS ON RECORD. AT THE OUTSET, IT HAS TO BE SEEN WHETHER THE REVISED RETURN FILED BY THE ASSESSEE IS VALID. IT IS NOTED THAT THE ORIGINAL RETURN WAS FILED ON 04.10.2010 AND THE REVISED RETURN WAS FILED ON 24.01.2012. AS PER SECTION 139(5) OF THE I.T.ACT, ONLY A RETURN FILED WITHIN THE DUE DATE COULD BE REVISED WITHIN ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE COMPLETION OF ASSESSMENT WHICHEVER IS EARLIER. IN THE INSTANT CASE THE ORIGINAL RETURN WAS A BELATED ONE AND HENCE COULD NOT BE REVISED IN VIEW OF CONDITIONS SPECIFIED IN SECTION 139(5) OF THE I.T.ACT. THEREFORE THE AG IS JUSTIFIED IN NOT RECOGNIZING THE SECOND RETURN WHICH IS NON-EST IN LAW. 4.11 THE NEXT ISSUE IS WHETHER THE AG IS JUSTIFIED IN TAKING INTO ACCOUNT THE ADDITIONAL INCOME OFFERED IN THE INVALID REVISED RETURN. IT IS TO BE NOTED THAT IT IS A SETTLED PRINCIPLE OF LAW THAT EVEN THOUGH THE RETURN IS INVALID, THE INFORMATION AVAILABLE IN THE RETURN CAN BE USED BY THE DEPARTMENT. IN THE INSTANT CASE, THE AO WAS ALREADY IN POSSESSION OF INFORMATION AS TO UNDISCLOSED INVESTMENTS MADE BY THE ASSESSEE IN THE FORM OF FDS. IN THE REVISED RETURN THE ASSESSEE HAD OFFERED CERTAIN INCOME TO EXPLAIN AWAY SOME OF THE INVESTMENTS NOTED BY THE AO HENCE THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE WAS ADDED TO THE TOTAL INCOME BY THE AG. ALTERNATIVELY SUCH PORTION OF ADDITIONAL INCOME WOULD HAVE REMAINED AS UNEXPLAINED INVESTMENT TO BE ADDED U/S.69 OF THE I.T.ACT. HENCE, I DO NOT FIND ANY INFIRMITY IN THE AO'S ACTION AND IT WOULD NOT AMOUNT TO VALIDATING THE INVALID REVISED RETURN. 4.12 THE NEXT ISSUE FOR CONSIDERATION IS WHETHER THE AG IS JUSTIFIED IN MAKING THE ADDITION AS UNEXPLAINED INVESTMENT U/S.69. IT IS ALREADY DISCUSSED THAT THE REVISED RETURN IS NOT VALID. HENCE THE AG IS JUSTIFIED IN EXAMINING THE CLAIM WITH REFERENCE TO THE ORIGINAL BOOKS OF ACCOUNTS, AND AS THE IMPUGNED INVESTMENTS WERE NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT, THE AG IS JUSTIFIED IN ASSESSING SUCH INVESTMENTS NOT RECORDED IN THE ORIGINAL BOOKS OF ACCOUNT AS UNEXPLAINED INVESTMENT U/S.69. 6 ITANO.178/VIZ/2014 (K. ANANTHARAO) 4.13 THE AR ALSO RAISED THE PLEA THAT IN REGARD TO ADDITION MADE OF UNEXPLAINED INVESTMENT U/S.69, THE ASSESSEE IS NOT REQUIRED TO PROVE THE CREDITWORTHINESS OF THE PERSON AND THE GENUINENESS OF THE TRANSACTION, AND THAT IT WOULD BE SUFFICIENT TO FURNISH THE DETAILS OF THE PARTIES WHO HAD ADVANCED THE AMOUNTS TO MAKE THE IMPUGNED INVESTMENT. 4.14 I HAVE CONSIDERED THE PLEA AND DO NOT FIND ANY MERIT IN SUCH CONTENTION. IT IS TO BE NOTED THAT THE ASSESSEE HAD RAISED THE CLAIM THAT IT HAD RECEIVED ADVANCE TO THE TUNE OF RS.37 LAKHS ON SALE OF SOME OF ITS PROPERTIES AND WHICH AMOUNT WAS UTILIZED TO MAKE THE IMPUGNED INVESTMENTS IN FDS. THEREFORE, IT IS THE BURDEN OF THE ASSESSEE TO PROVE SUCH CLAIM SATISFACTORILY. IT IS THE FUNDAMENTAL PRINCIPLE OF LAW OF EVIDENCE THAT A PERSON WHO MAKES THE CLAIM HAS TO PROVE SUCH CLAIM. FURTHER, THE BURDEN PLACED U/S.69, IS THAT THE ASSESSEE IS REQUIRED TO PROVE THE NATURE AND SOURCE FOR THE INVESTMENT SATISFACTORILY. SUCH BURDEN IS SIMILAR TO THE ONE U/S.68, WHICH ALSO REQUIRES THE ASSESSEE TO PROVE THE NATURE AND SOURCE OF THE CREDIT SATISFACTORILY. THUS, NATURE OF EVIDENCE AND BURDEN PLACED UPON THE ASSESSEE U/S.68 AND U/S.69 ARE SIMILAR. THEREFORE, IT HAS TO BE SEEN WHETHER THE ASSESSEE HAD SATISFACTORILY DISCHARGED SUCH BURDEN TO PROVE THE NATURE AND SOURCE OF THE INVESTMENT. BESIDES, THE EXPLANATION OFFERED BY THE ASSESSEE IS IN THE NATURE OF CERTAIN CREDITS OBTAINED BY IT AGAINST SALE OF ITS PROPERTIES AND HENCE THE CONDITIONS AS TO (A) IDENTITY; (B) CREDITWORTHINESS AND (C) GENUINENESS WOULD BE RELEVANT TO PROVE SUCH CLAIM SATISFACTORILY. 4.15 AS REGARDS THE AMOUNT SAID TO BE ADVANCED BY SRI P.SURYAPRAKASA RAO, THE ASSESSEE'S CLAIM IS THAT SURYAPRAKASA RAO ENTERED INTO AN AGREEMENT FOR PURCHASE OF 2.54 CENTS OF LAND AT THE RATE OF RS.4 LAKHS PER CENT AND HAD PAID AN AMOUNT OF RS.7 LAKHS TO THE ASSESSEE IN CASH IN MARCH, 2010. ON INQUIRY IT WAS NOTED THAT THE SAID SURYAPRAKASA RAO IS A RETIRED PENSIONER AND DID NOT APPARENTLY HAVE SUFFICIENT SOURCE. HE COULD NOT GIVE ANY EXPLANATION AS TO HIS SOURCE FOR MAKING THE PAYMENT OF RS.7 LAKHS. ONLY A CLAIM WAS MADE THAT THE AMOUNT OF RS.7 LAKHS WAS GIVEN OUT OF BORROWINGS FROM FRIENDS AND PLEDGE OF WIFE'S JEWELLERY BUT COULD NOT SUPPORT SUCH CLAIM WITH ANY EVIDENCE. THE AO HAD QUESTIONED HIM AS TO THE VALUE OF THE TRANSACTION IN RESPONSE TO WHICH THE SAID SRI SURYAPRAKASA RAO HAD DEPOSED THAT HE DID NOT KNOW THE CONTENT OF THE AGREEMENT AND THAT HE HAD SIGNED WHAT THE ASSESSEE HAD ASKED HIM TO SIGN. IT IS FURTHER TO BE NOTED THAT HE HAD NOT MENTIONED 7 ITANO.178/VIZ/2014 (K. ANANTHARAO) ANYTHING ABOUT THE CANCELLATION OF THE TRANSACTION IN HIS SWORN DEPOSITION. THE ASSESSEE ALSO DID NOT MAKE SUCH AVERMENT DURING THE ASSESSMENT PROCEEDINGS. BESIDES, IT IS STRANGE TO NOTE THAT A PERSON WOULD BORROW AND PLEDGE HIS WIFE'S JEWELLERY TO MAKE ADVANCE IN CASH WITHOUT PROPER DOCUMENTATION, AND WITHOUT PROPER IDENTIFICATION OF THE PROPERTY. THE MANNER IN WHICH THE AMOUNT IS SAID TO BE ADVANCED IN CASH AND SAID TO BE RETURNED IN CA9H WITHIN A SHORT DURATION WITHOUT PROPER REGISTRATION OF DOCUMENT WOULD ONLY SHOW THAT IT IS ONLY A MAKE BELIEVE ARRANGEMENT AND NOT A GENUINE TRANSACTION FOR PURCHASE OF PROPERTY. 4.16 AS REGARDS THE PURPORTED TRANSACTION WITH DILLESWARA RAO, THE ASSESSEE COULD NOT GIVE ANY EVIDENCE DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSEE ALSO DID NOT GIVE ANY DETAILS RELATING TO THE TRANSACTION EXCEPT CLAIMING ADVANCE WAS RECEIVED TOWARDS PURCHASE OF PROPERTY. ONLY DURING THE APPELLATE PROCEEDINGS, CONFIRMATION LETTER OF DILLESWARA RAO WAS FILED AS ADDITIONAL EVIDENCE. THE ASSESSEE'S CASE WAS THAT IT HAD RECEIVED ADVANCE OF RS.30 LAKHS FROM DILLESWARA RAO TOWARDS SALE OF ITS PROPERTY AND SUCH AMOUNT WAS CREDITED IN ITS CAPITAL ACCOUNT. THE ENTRIES IN THE CAPITAL ACCOUNT SHOW RECEIPT OF CASH OF RS.10,10,000/- AND CHEQUE TRANSFER OF RS.19,90,000/- WHICH WERE SAID TO REPRESENT THE AMOUNTS RECEIVED FROM DILLESWARA RAO. IT IS SEEN FROM THE ASSESSEE'S ACCOUNT WITH SHALANTRI BRANCH, THERE WERE CHEQUE DEPOSITS OF RS.9,95,000/- ON 18,03.2010 AND RS.9,95,000/- ON 18.03.2010, AGGREGATING TO RS.19,90,000/-. ON THE OTHER HAND, THE SAID DILLESHWARA RAO IN HIS SWORN DEPOSITION HAD STATED THAT HE HAD GIVEN CASH OF RS.10 LAKHS EACH IN THREE INSTALLMENTS TO THE ASSESSEE. THUS THE ASSESSEE HAS NOT SATISFACTORILY EXPLAINED THE SOURCE FOR THE ABOVE CHEQUE DEPOSITS OF RS.19,90,000/- IN ITS SHALANTRI BRANCH ACCOUNT. DURING THE APPEAL HEARING, THE ASSESSEE WAS ASKED TO EXPLAIN FROM WHOM THESE CHEQUES WERE OBTAINED AND HOW THE CHEQUE DEPOSITS ARE EXPLAINED WHEN DILLESHWARA RAO HAS DEPOSED THAT HE HAD GIVEN CASH. INITIALLY IT HAS STATED THAT THEY WERE SELF-CHEQUES FROM THE OTHER ACCOUNT HELD BY THE ASSESSEE. SUCH A CLAIM WAS FOUND TO BE INCORRECT, AND THE ASSESSEE WAS AGAIN ASKED TO CLARIFY THE SAME. THE AR SUBMITTED THAT THE ASSESSEE WAS NOT ABLE TO FURNISH THE RELEVANT INFORMATION OR TO EXPLAIN THE SAME. THUS, IT IS TO BE NOTED THAT THE ASSESSEE HAD NOT GIVEN COMPLETE INFORMATION ABOUT THE TRANSACTION EITHER DURING THE ASSESSMENT PROCEEDINGS OR DURING THE APPELLATE PROCEEDINGS. NO SATISFACTORY EXPLANATION WAS GIVEN FOR THE SOURCE OF CHEQUE DEPOSITS OF RS.19,95,000/-. FURTHER, IT IS TO BE SEEN THAT THE SAID 8 ITANO.178/VIZ/2014 (K. ANANTHARAO) DILLESHWARA RAO DID NOT HAVE SOURCE TO ADVANCE THE SAID AMOUNT. HIS CLAIM THAT THE MONEY WAS GIVEN OUT OF THE SREEDHAN RECEIVED BY HIS WIFE IN 1985 IS NOT SUPPORTED BY ANY EVIDENCE. IT IS ALSO SEEN FROM RECORD THAT THE IMPUGNED TWO CHEQUES FOR RS.9,95,000/- EACH RELATED TO K.JADDENNA OF AMADALAVALASA AND K.CHINNAYYA OF AMADALAVALASA. THE OMISSION TO FURNISH COMPLETE INFORMATION RELATING TO THE TRANSACTION, THE DISCREPANCY IN THE CLAIM MADE BY DILLESHWARA RAO THAT THE AMOUNT OF RS.30 LAKHS WAS PAID IN CASH AS AGAINST CREDITS OF CHEQUE IN CAPITAL ACCOUNT OF THE ASSESSEE, THE FAILURE OF THE ASSESSEE TO EXPLAIN THE SOURCE FOR THE CHEQUE DEPOSIT OF RS.19,95,000/- IN ITS SHALANTRI BRANCH ACCOUNT, THE MANNER IN WHICH THE TRANSACTIONS INVOLVING SUCH HUGE AMOUNT IS SAID TO BE MADE IN CASH. AND THE AMOUNTS RETURNED IN CASH WITHOUT ANY DOCUMENTATION PARTICULARLY WHEN PARTIES HAVE BANKING FACILITIES GO TO SHOW THAT THE PURPORTED TRANSACTION WAS ONLY AN AFTERTHOUGHT OR A MAKE BELIEVE ARRANGEMENT. IN VIEW OF THESE IT IS HELD THAT THE ASSESSEE FAILED TO PROVE THE NATURE AND SOURCE OF THE INVESTMENTS IN FDS AND THE AO IS JUSTIFIED IN MAKING THE ADDITION OF RS. 37 LAKHS IN THIS REGARD. 6 . IN RESPECT OF BALANCE AMOUNT OF RS. 7,83,113/-, LD. CIT(A) HASOBSERVEDAS UNDER:- 4.17 WITH REGARD TO THE BALANCE AMOUNT OF RS.7,83,113/- (RS.44,83,113/- - RS.37,00,000/-), IT IS SEEN THAT THE AD HAD ACCEPTED CREDIT FOR RS.5,09,000/SHOWN AS ADDITIONAL INCOME AND ADDED IN THE REVISED RETURN THE BALANCE AMOUNT OF RS.2,74,113/- AS NO EXPLANATION WAS GIVEN REGARDING THIS AMOUNT. IT IS TO BE NOTED THAT THE AO HAD MADE ADDITION PARTLY OF RS. 5,08,501/- TOWARDS ADDITIONAL INCOME OFFERED IN THE 2ND RETURN AND PARTLY OF RS.2,74,113/- TOWARDS UNEXPLAINED INVESTMENT. DURING THE APPEAL PROCEEDINGS ALSO THE ASSESSEE HAD NOT GIVEN ANY DETAILS RELATING TO THIS TRANSACTION. HENCE THE AO IS DIRECTED TO CONSIDER THE AMOUNT OF RS.7,83,113/- AS UNEXPLAINED INVESTMENT INSTEAD OF CONSIDERING PART AMOUNT TOWARDS ADDITIONAL INCOME OFFERED IN RETURN AND PART AMOUNT TOWARDS UNEXPLAINED INVESTMENT. THIS GROUND OF APPEAL IS ACCORDINGLY. 7 . BEFORE US, LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS FILED CONFIRMATION LETTERS AND, THEREFORE, IT IS NOT 9 ITANO.178/VIZ/2014 (K. ANANTHARAO) AN OBLIGATORY ON THE PART OF THE ASSESSEE TO PROVE THE CREDITWORTHINESS OF THE SAME AND ALSO SUBMITTED THAT ALL THE TRANSACTIONS ARE GENUINE TRANSACTIONS, THEREFORE, THE ASSESSEE HAS DISCHARGED BURDEN CASTED UPON HIM, BUT LD. CIT(A) IS NOT JUSTIFIED INCONFORMINGTHE ADDITIONSMADEBY THEASSESSING OFFICER. 8 . ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS SUBMITTED THAT THE ASSESSEE HAS ONLY FILED CONFIRMATION LETTERS AT THE APPELLATE STAGE AND THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS, AND SUBMITTED THAT THE ASSESSEE FAILED TO DISCHARGE ONUS UPON HIM. THEREFORE, LD. CIT(A) RIGHTLY CONFIRMED THE ADDITION UNDER SECTION 69 OFTHEACT. 9. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLEONRECORDANDORDERSOFTHEAUTHORITIESBELOW. 10 . THE CASE OF THE ASSESSEE IS THAT HE HAS RECEIVED RS. 7 LAKHS FROM SHRI P. SURYA PRAKASA RAO TOWARDS ADVANCE FOR SALE OF ASSESSEES PROPERTY, WHICH WAS UTILIZED FOR THE PURPOSE OF DEPOSIT IN THE ACCOUNT OF FIXED DEPOSIT. WHEN ASSESSING OFFICER ASKED SHRI P. SURYA PRAKASA RAO, HE SUBMITTED THAT HE WAS A RETIRED EMPLOYEE AND BORROWED MONEY FROM HIS FRIENDS AND PLEDGED HIS WIFES JEWELLERY AND ADVANCED TO THE ASSESSEE, BUT NOT ABLE TO 10 ITANO.178/VIZ/2014 (K. ANANTHARAO) EXPLAIN WHAT IS THE AMOUNT BORROWED AND WHAT IS GOLD PLEDGED, BY WHICH, HOW MUCH AMOUNT BORROWED, HAS NOT GIVEN ANY DETAILS BEFORE THE ASSESSING OFFICER AND EVEN BEFORE THE LD. CIT(A). EVEN BEFORE US, THE ASSESSEE FAILED TO EXPLAIN CREDITWORTHINESS OF SHRI P. SURYA PRAKASA RAO AND GENUINENESS OF THE TRANSACTION ALSO. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, SIMPLY FILING CONFIRMATIONS, IS NOT A SUFFICIENT TO DISCHARGE BURDEN CASTED UPON HIM TO EXPLAIN THE SOURCE IN THE FIXED DEPOSITS. THEREFORE, WE ARE OF THE OPINION THAT THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS IN RESPECT OF RS. 7 LAKHS RECEIVED FROM SHRI P. SURYA PRAKASA RAO AND THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY MADE AN ADDITIONANDTHESAMEIS CONFIRMED BY THE LD. CIT(A). 11. SO FAR AS AMOUNT RECEIVED FROM SHRI L. DILESHWARA RAO, IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT HE HAD GIVEN RS.30 LAKHS IN CASH TO THE ASSESSEE AS ADVANCE FOR PURCHASE OF CERTAIN PROPERTY OF AN EXTENT OF 0.30 CENTS BELONGING TO THE ASSESSEE. THE CASH WAS HANDED-OVER TO THE ASSESSEE IN THREE INSTALLMENTS I.E. RS. 10 LAKH EACH, BUT HAS NOT GIVEN THE DATES OF PAYMENTS. THE BANK STATEMENT OF HIM, DID NOT INDICATE THAT HE HAD SUFFICIENT SOURCE TO ADVANCE THE AMOUNT. IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT HIS WIFE HAS RECEIVED SHRIDHAN IN 1985 AND THE SAME WAS GIVEN TO THE ASSESSEE, FOR WHICH NO 11 ITANO.178/VIZ/2014 (K. ANANTHARAO) EVIDENCE WAS ADDUCED. IT IS ALSO SUBMITTED THAT SUBSEQUENTLY, THE TRANSACTION WAS CANCELLED FOR THE REASON THAT THE RATE WAS TOO HIGH AND HE GOT THE MONEY BACK, BUT NOT EXPLAINED THAT WHETHER HE RECEIVED AMOUNT IN CHEQUE OR IN CASH BEFORE THE ASSESSING OFFICER. THEREFORE, ASSESSING OFFICER HAS DISBELIEVED THE EXPLANATION GIVEN BY THE ASSESSEE. BY CONSIDERING THE DISCREPANCIES IN THE BANK DEPOSITS, IT WAS FOUND THAT THE ENTRIES IN THE CAPITAL ACCOUNT SHOW RECEIPT OF CASH OF RS.10,10,000/- AND CHEQUE TRANSFER OF RS.19,90,000/- WHICH WERE SAID TO REPRESENT THE AMOUNTS RECEIVED FROM SHRI DILLESWARA RAO. IT IS SEEN FROM THE ASSESSEE'S ACCOUNT WITH SHALANTRI BRANCH, THERE WERE CHEQUE DEPOSITS OF RS.9,95,000/- ON 18.03.2010 AND RS.9,95,000/- ON 18.03.2010, AGGREGATING TO RS.19,90,000/-. ON THE OTHER HAND, SHRI L. DILESHWARA RAO HAS EXPLAINED BEFORE THE ASSESSING OFFICER THAT HE HASGIVEN RS.30 LAKHSINTHREEINSTALLMENTSI.E.RS.10 LAKH EACH. WHEN ASSESSING OFFICER ASKED THE ASSESSEE IN RESPECT OF AMOUNT RECEIVED FROM SHRI L.DILESHWARA RAO AND ALSO BANK ENTRIES, THE ASSESSEE HAS FAILED TO EXPLAIN THE SAME BEFORE THE ASSESSING OFFICER, EVEN BEFORE THE LD.CIT(A) AND EVEN BEFORE US ALSO NO EXPLANATION IS GIVEN. UNDER THE ABOVE FACTS AND CIRCUMSTANCES OFTHE CASE, WE AREOF THE OPINIONTHAT THE ASSESSEE FAILED TO DISCHARGE THE BURDEN CASTED UPON HIM THAT HE HAS 12 ITANO.178/VIZ/2014 (K. ANANTHARAO) RECEIVED RS. 30 LAKHS FROM SHRI L.DILESHWARA RAO AND THEREFORE THE LD. CIT(A) RIGHTLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 12 IN RESPECT OF BALANCE AMOUNT OF RS. 7,83,113/-, WHICH HAS ALREADY BEEN CONSIDERED BY THE LD. CIT(A) IN HIS ORDER AT PARA 4.17 THAT AUTHORISED REPRESENTATIVE HAS NOT RAISED ANY ARGUMENT ON THIS ADDITION, AND NO EVIDENCE IS ALSO FILED BEFORE US. IN VIEW OF THE ABOVE, WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD.CIT(A). THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 13. INSOFAR AS SECOND GROUND OF APPEAL RAISED BY THE ASSESSEE IN RESPECT OF RS. 2,96,500/- IS CONCERNED, THE ASSESSING OFFICER HAS NOTED THAT THERE WAS A CREDIT OF RS. 2,96,500/- IN THE ASSESSEES BANK ACCOUNT WITH SHALANTRI BRANCH. WHEN ASSESSING OFFICER ASKED, THE ASSESSEE HAS STATED THAT THIS CREDIT REPRESENT ADVANCE RECEIVED FROM ONE P. APPA RAO FOR SALE OF RELLIVEEDHI SITE. THE ASSESSING OFFICER NOTED THAT THE AMOUNT WAS WITHDRAWN ON THE NEXT DAY BY WAY OF DD TO HYDERABAD. THE ASSESSING OFFICER HAD ASKED THE ASSESSEE TO EXPLAIN THE CREDIT WITH DOCUMENTARY EVIDENCE, BUT THE ASSESSEE FAILED TO FURNISH ANY DOCUMENTARY EVIDENCE. THEREFORE, ASSESSING OFFICER HAS MADE AN ADDITION OF RS.2,96,500/-UNDER SECTION68 OFTHEACT. 13 ITANO.178/VIZ/2014 (K. ANANTHARAO) 14 . BEFORE THE LD. CIT(A) IT WAS SUBMITTED THAT SHRI P. APPA RAO IS A MANSON AND HAD GIVEN AN AMOUNT OF RS. 2,96,500/- BY WAY OF ADVANCE FOR PURCHASE OF ACRE 2.5 CENTS OF LAND, AND THAT SHRI P.APPA RAO EXPRESSED HIS INABILITY TO MOBILIZE FURTHER FUNDS, THE TRANSACTION WAS CANCELLED AND THE AMOUNT WAS RETURNED ON 01/07/2009. BEFORE THE LD. CIT(A) EXCEPT STATING THAT ADVANCE RECEIVED IN RESPECT OF PURCHASE OF LAND FROM P. APPA RAO, WHO IS NOT ABLE TO MOBILIZE THE FUNDS, THE AMOUNT WAS RETURNED, NO EVIDENCE IS FILED. EVEN BEFORE US, THE ASSESSEE HAS NOT FILED ANY EVIDENCE. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSEE FAILED TO DISCHARGE THE BURDEN CASTED UPON HIM THAT HE HAS RECEIVED THE SAID AMOUNT AS ADVANCE AND THEREFORE, WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD.CIT(A) IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER. 15 . INTHERESULT,APPEAL FILEDBY THEASSESSEEISDISMISSED. ORDERPRONOUNCED INOPENCOURT ONTHIS17 TH DAY OFNOV.,2017. SD/- SD/- (D.S. SUNDER SINGH) (V. DURGA RAO) ACCOUNTANTMEMBER JUDICIAL MEMBER DATED : 17 TH NOVEMBER, 2017. VR/- 14 ITANO.178/VIZ/2014 (K. ANANTHARAO) COPY TO: 1. THE ASSESSEE K. ANANTHA RAO (HUF), D.NO. 16-1-154, OPP.INDUSTRIALESTATE,CHINTADA,AMADALAVALASA,SRIKAKULAM. 2. THE REVENUE ITO, WARD-1, SRIKAKULAM. 3. THE CIT-2, VISAKHAPATNAM. 4. THE CIT(A), VISAKHAPATNAM. 5. THE D.R., VISAKHAPATNAM. 6. GUARD FILE. BYORDER (VUKKEMRAMBABU) SR.PRIVATESECRETARY, ITAT,VISAKHAPATNAM.