Mamillapalli Jayaprakash, Eluru V. Principal Commissioner of Income Tax, , Rajahmundry

ITA 208/VIZ/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4958 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 21-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Section: 143(3); 6; 263

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. 208 / VIZ /201 8 (ASST. YEAR: 20 13 - 14 ) MAMILLAPALLI JAYA PRAKASH, D.NO. 22C - 13 - 6, DR. RANGARAO STREET, NEAR VINAYAKA TEMPLE, POWERPET, ELURU . V S . ITO , WARD - 2, ELURU . PAN NO. AGSPM 4275 D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SMT. SUMAN MALIK SR. DR DATE OF HEARING : 06 / 0 2 /201 9 . DATE OF PRONOUNCEMENT : 13 / 0 2 /201 9 . O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF PR. COMMISSIONER OF INCOME TAX , RAJAHMUNDRY , DATED 2 8 /0 3 /201 8 FOR THE ASSESSMENT YEAR 20 13 - 14 . 2. IN THIS CASE , THE ASSESSEE HAS FILED RETURN OF INCOME ADMITTING TOTAL INCOME OF RS. 9,33,680/ - ON 29/09/2013 . T H E CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) BY ORDER DATED 28/03/2016 BY ASSESS ING THE TOTAL INCOME AT RS. 13,72,231/ - . SUBSEQUENTLY , 2 ITA NO. 208/VIZ/2018 ( MAMILLAPALLIJAYAPRAKASH ) LD.PR.CIT , RAJAHMUNDRY CALLED FOR RECORDS AND EXAMINE D THE SAME AND FOUND CERTAIN ERRORS WHICH ARE PREJUDICIAL TO THE INTEREST S OF THE REVENUE AS UNDER: - I ) THE ASSESSEE WAS CONTRIBUTING TO CHITS AND HAS SHOWN THE AMOUNTS OF RS. 3.26 LAKHS, RS. 22.34 LAKHS & RS.1.12 LAKHS AS CURRENT ASSETS IN THE BALANCE SHEET, BUT NOT DECLARED CHIT DIVIDEND INCOME IN THE RETURN FILED FOR THE IMPUGNED ASSESSMENT YEAR. II ) THE ASSESSEE OWNS 14 ACRES OF FISH TANKS FROM WHICH THE ASSESSING OFFICER ESTIMATED THE INCOME AT RS. 15,000/ - PER ACRE, AND ACCORDING TO THE LD.PR.CIT, NORMAL ESTIMATION APPROVED BY THE APPELLATE AUTHORITIES TO RS. 2 0,000/ - PER ACRE. III ) THE ASSESSEE HAS SHOWN CREDIT OF RS. 77.98 LAKHS IN THE CASE OF M/S. SREE RAMANJANEYA RYTU SANKSHEMA SANGHAM. THE GENUINENESS OF THE OUTSTANDING OF THE CREDIT HAS NOT BEEN EXA MINED BY THE ASSESSING OFFICER. 2.1 . ACC ORDINGLY, L D.PR.CIT HAS ISSUED THE NOTICE UNDER SECTION 263 CALLING FOR THE OBJECTIONS OF THE ASSESSEE AS TO WHY THE ASSESSMENT FRAMED UNDER SECTION 143(3), DATED 28/03/2016 SHOULD NOT BE REVISED. IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 263, THE ASSESSEE FILE D EXPLANAT ION STATING THAT THE CHIT PAYMENTS ARE BEING ACCOUNTED NET OF CHIT DIVIDEND INCOME (I.E ACTUAL PAYMENT) AND THE LOSS OR PROFIT ON THE CHIT CONTRIBUTION IS 3 ITA NO. 208/VIZ/2018 ( MAMILLAPALLIJAYAPRAKASH ) TAKEN TO THE PROFIT AND LOSS ACCOUNT ON COMPLETION OF THE CHIT PERIOD. THIS PRACTICE IS REG ULARLY FOLLOWED BY THE ASSESS E E AS PER THE SYSTEM OF ACCOUNTING . T HE LD.AR FURTHER STATED THAT T HE CHIT AMOUNTS WERE USED FOR THE PURPOSE OF BUSINESS AND T HE ASSESSING OFFICER HAD EXAMINED TH E ISSUE AND ACCEPTED THE SAME AT THE TIME OF ASSESSMENT. SECONDLY, WITH REGARD TO THE ESTIMATION OF INCOME ON FISH TANK S , THE ASSESSEE SUBMITTED THAT REASONABLE INCOME ESTIMATED FROM THE FISH TANK I S RS. 15,000/ - PER ACRE AND THE SAME IS ACCEPTED IN THE ASSESSEES OWN CASE FOR THE EARLIER YEARS. WITH REGARD TO OUTSTANDING BALANCE OF RS. 77.98 LAKHS, THE ASSESSEE SUBMITTED THAT C ONFIRMATION LETTER FROM M/S. SREE RAMANJANEYA RYTU SANKSHEMA SANGHAM HAS FILED AT THE TIME OF ASSESSMENT , THUS THE ASSESSING OFFICER HAS ACCEPTED THE GENUINENESS OF TRANS ACTION , HENCE, THERE IS NO CASE FOR REVISION. 2.2 THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT AFTER HAVING VERIF ED THE COMPLETE DETAILS FILED BY THE ASSESSEE, HENCE, THERE IS NO CASE FOR TAKING UP FOR REVISION UNDER SECTION 263 AND THEREFORE, REQUESTED TO DROP THE REVISION PROCEEDINGS. NOT BEING CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, LD.PR.CIT SET ASIDE THE ORDER PASSED 4 ITA NO. 208/VIZ/2018 ( MAMILLAPALLIJAYAPRAKASH ) UNDER SECTION 143(3) AND DIRECTED THE ASSESSING OFFICER TO EXAMINE THE I SSUE OF CHIT DIVIDEND INCOME AND INCOME FROM FISH TANKS AND ALSO DIRECTED THE ASSESSING OFFICER TO VERIFY THE GENUINENESS OF THE OUTSTANDING CREDIT IN THE NAME OF M/S. SREE RAMANJANEYA RYTU SANKSHEMA SANGHAM AND REDO THE ASSESSMENT AFTER GIVING OPPORTUNITY TO THE ASSESSEE. 3 . AGGRIEVED BY THE ORDER OF THE LD.PR.CIT, ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. 5. WITH RESPECT TO THE CHIT DIVIDEND INCOME, THE ASSESSEE HAS NOT PRODU CED ANY EVIDENCE TO SUBSTANTIATE THE PRACTICE OF ACCOUNTING CHIT DIVIDEND AFTER NETTING OUT THE EXPENDITURE AS AT THE END OF THE COMPLETION OF CHIT THE PERIOD . T HOUGH THE ASSESSEE STATED THAT HE HAS ADMITTED THE CHIT DIVIDEND INCOME NET OF THE EXPENDITURE TO THE PROFIT & LOSS ACCOUNT AFTER THE COMPLETION OF THE CHIT PERIOD, NO EVIDENCE WAS PLACED BEFORE THE LD.PR.CIT. THE ASSESSEE DID NOT FURNISH ANY MATERIAL BEFORE US TO SUBSTANTIATE THAT THE ASSESSING OFFICER HAS CALLED FOR THE DETAILS AND EXAMINED THE ISSUE. THEREFORE, WE UP HOLD THE ORDER OF THE LD.PR . CIT AND DO 5 ITA NO. 208/VIZ/2018 ( MAMILLAPALLIJAYAPRAKASH ) NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.PR.CIT AND THE SAME IS UPHELD. 6 . SECOND ISSUE IS WITH REGARD OUTSTANDING CREDIT IN THE NAME OF M/S. SREE RAMANJANEYA RYTU SANKSHEMA SANGHAM FOR AN AMOUNT OF RS. 77. 98 LAKHS. DURING THE REVISION PROCEEDINGS UNDER SECTION 263, THE LD.PR.CIT FOUND SOME DEFECTS AND DISCREPANCIES IN THE CONFIRMATION LETTER FURNISHED BY THE ASSESSEE. THERE WAS NO EVIDENCE TO ESTABLISH THAT THE ASSESSING OFFI CER HAD EXAMINED THE ISSUE AT THE TIME OF ASSESSMENT PROCEEDINGS. THEREFORE, WE HOLD THAT THE LD.PR.CIT HAS RIGHTLY TAKEN THE CASE FOR REVISION AND DIRECTED THE ASSESSING OFFICER TO RE - EXAMINE THE ISSUE. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFER E WITH THE ORDER OF THE LD.PR.CIT AND THE SAME IS UPHELD. 7 . THE THIRD ISSUE IS WITH REGARD TO ESTIMATION OF INCOME ON FISH TANKS AT THE RATE OF RS. 15,000/ - PER ACRE. DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE ASSESSING OFFICER HAS PROPOSED TO ESTI MATE THE INCOME AT TH E RATE OF RS. 15,000/ - PER ACRE, FOR WHICH IT APPEARS THAT THERE IS NO EXPLANATION FROM THE ASSESSEE, THE REFORE, THE ASSESSING OFFICER HAS ESTIMATED THE INCOME @ RS. 15,000/ - PER ACRE AFTER VERIFICATION OF THE DETAILS FURNISHED BY THE A SSESSEE. THE ESTIMATION DEPENDS ON VARIOUS FACTORS SUCH AS THE 6 ITA NO. 208/VIZ/2018 ( MAMILLAPALLIJAYAPRAKASH ) AREA OF CULTIVATION, AVAILABILITY OF WATER AND OTHER INFRASTRUCTURE FACILITIES. C ONSIDERING THE FACTS OF THE CASE, THE ASSESSING OFFICER HAS ESTIMATED THE INCOME AT RS.15,000/ - PER ACRE. THIS TRIBUNAL HAS ALSO CONSIDERED THE SIMILAR ISSUE IN THE CASE OF DCIT VS. M/S. KRISHNA FISHERIES IN ITA NOS. 325 TO 330/VIZ/2015, DATED 26/07/2017 AND HELD THAT ESTIMATION OF INCOME AT RS. 15,000/ - IS REASONABLE. THEREFORE, WE DO NOT FIND ANY ERROR IN THE ASSESSMENT ORDER MADE BY THE ASSESSING OFFICER ON THE ISSUE OF ESTIMATION OF INCOME IN RESPECT OF FISH TANKS. ACCORDINGLY, WE UPHELD THE ORDER OF THE LD.PR.CIT UNDER SECTION 263 IN RESPECT OF CHIT DIVIDEND INCOME AND IN RESPECT OF M/S. SREE RAMANJANEYA RYT U SANKSHEMA SANGHAM AND HOLD THAT THERE IS NO ERROR IN RESPECT OF ESTIMATION OF INCOME ON FISH TANKS. ACCORDINGLY, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 8 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN OPEN COURT ON TH IS 1 3 T H DAY OF FEB . , 201 9 . S D / - S D / - (V. DURGA RAO) ( D.S. SUNDER SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 3 T H FEB . , 201 9 . VR/ - 7 ITA NO. 208/VIZ/2018 ( MAMILLAPALLIJAYAPRAKASH ) COPY TO: 1. THE ASSESSEE - MAMILLAPALLI JAYA PRAKASH, D.NO. 22C - 13 - 6, DR. RANGARAO STREET, NEAR VINAYAKA TEMPLE, POWERPET, ELURU. 2. THE REVENUE PR.CIT, RAJAHMUNDRY. 3. THE D.R . , VISAKHAPATNAM. 4. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.