Yenisetty Sai Prasad Rao, Edlapadu V. THE ITO, Vijayawada

ITA 217/VIZ/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2069 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 01-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D KOMALI KRISHNADR
• Assessee Lawyers: K NEERAJA
• Keywords: Salary income
• Section: 143(3); 148

Judgement Text

ITA NO.217/VIZAG/2015 SRI YENISETTY SAI PRASADA RAO, VIJAYAWADA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.217/VIZAG/2015 ( / ASSESSMENT YEAR: 2005-06) SRI YENISETTY SAI PRASADA RAO VIJAYAWADA VS. ITO WARD - 2(2) VIJAYAWADA [PAN: AAJPY 5007E ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SMT. K. NEERAJA, AR / RESPONDENT BY : SMT. D. KOMALI KRISHNA,DR / DATE OF HEARING : 07.01.2016 / DATE OF PRONOUNCEMENT : 02.03.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A), VIJAYAWADA DATED 31.3.2015 FOR THE ASSESSM ENT YEAR 2005-06. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS AN INDIV IDUAL DERIVED INCOME FROM SALARY AS LIC DEVELOPMENT OFFICER AND ALSO INC OME FROM HOUSE ITA NO.217/VIZAG/2015 SRI YENISETTY SAI PRASADA RAO, VIJAYAWADA 2 PROPERTY. FOR THE YEAR UNDER CONSIDERATION, THE AS SESSEE FILED RETURN OF INCOME BY DECLARING TOTAL INCOME OF ` 3,62,444/-. AFTER COMPLETION OF THE ORIGINAL ASSESSMENT, THE ASSESSING OFFICER RE-O PENED THE ASSESSMENT BY ISSUING A NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') ON THE GROUND THAT THE NEW CAS H CREDITS APPEARING IN THE BOOKS OF ACCOUNTS RELEVANT TO THE ASSESSMENT YE AR WERE NOT EXAMINED WITH REGARD TO THEIR GENUINENESS AND AFTER CALLING THE DETAILS, ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 147 OF T HE ACT. IN THE ASSESSMENT ORDER, THE A.O. HAS NOTED THAT THE ASSES SEE HAS BORROWED FUNDS FROM VARIOUS PERSONS, FINANCIAL INSTITUTIONS, ETC. FOR THE PURPOSE OF CONSTRUCTION OF HOUSE PROPERTY AT CHIRALA AND VIJAY AWADA. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED TH E DETAILS OF FRESH CASH DEPOSITS RAISED DURING THE RELEVANT PERIOD ALO NG WITH CONFIRMATION LETTERS AND BOOKS OF ACCOUNTS. THE TOTAL CASH CRED ITS NUMBERED TO 78 COVERING TOTAL BORROWALS OF ` 42,71,000/- AND INTEREST THEREON OF ` 10,45,510/-. THE ASSESSING OFFICER HAS NOTICED THA T THE CONFIRMATION LETTERS FILED BY THE ASSESSEE ARE NOT CONTAINING AN Y DETAILS SUCH AS ADDRESS OF THE CREDITORS, IDENTITY, CREDITWORTHINES S AND INCOME TAX PARTICULARS. AGAIN THE ASSESSING OFFICER HAS ISSUE D A SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY THE CASH CREDITS SHOULD N OT BE ADDED AS A NOT PROVED. IN RESPONSE, THE ASSESSEE SUBMITTED THAT H E IS IN THE PROCESS OF ITA NO.217/VIZAG/2015 SRI YENISETTY SAI PRASADA RAO, VIJAYAWADA 3 CONTACTING SUCH CREDITORS, THE LOANS WERE VERY OLD AND MOST OF THE CREDITORS WERE NOT IN CONTACT WITH HIM. HE FURTHER SUBMITTED THAT ALL THE ABOVE CASES OF CREDITORS AMOUNTS DUE WERE PAID WIT H AN INTEREST AND THERE WAS NO OUTSTANDING BALANCE IN THOSE ACCOUNTS AS ON THE DATE. AS THERE WAS NO CO-OPERATION FROM THE CREDITORS TO APP EAR BEFORE THE ASSESSING OFFICER TO FURNISH ANY FURTHER INFORMATIO N WITH REGARD TO THE CONFIRMATION OF THE CREDITORS, THE ASSESSEE FURNISH ED CONTINUATION ACCOUNT COPIES FOR 74 CREDITORS AMOUNTING TO ` 40,66,000/-. HOWEVER, THE A.O. HAS NOT ACCEPTED THE CONTENTION OF THE ASS ESSEE AND OBSERVED THAT THE ASSESSEE HAS FAILED TO DISCHARGE THE BURDE N CAST UPON HIM TO SUBSTANTIATE HIS CLAIM. ACCORDINGLY, THE CREDITORS FROM 78 LOAN CREDITORS AMOUNTING TO ` 42,71,000/- ARE DISALLOWED AND ADDED BACK TO THE T OTAL INCOME OF THE ASSESSEE. THE ASSESSING OFFICER ALSO DISALLOWED INTEREST PAYMENT TOTALING ` 20,50,931/- ON THE GROUND THAT SINCE THE CREDITS FROM 78 LOAN CREDITORS WAS DISALLOWED AND INTEREST WAS ALSO DISALLOWED. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE HAS F ILED THE DETAILS BEFORE THE LD. CIT(A). THE LD. CIT(A) AFTER VERIFY ING THE FACTS ON RECORD CALLED THE REMAND REPORT FROM THE ASSESSING OFFICER . THE ASSESSING OFFICER HAS INFORMED THE ASSESSEE THAT OUT OF 78 CR EDITORS ONLY 9 CREDITORS WERE PRODUCED, OUT OF 9 CREDITORS, CREDIT WORTHINESS OF 2 PERSONS WAS DOUBTFUL. SO FAR AS REMAINING 69 CREDI TORS ARE CONCERNED, ITA NO.217/VIZAG/2015 SRI YENISETTY SAI PRASADA RAO, VIJAYAWADA 4 THE ASSESSEE HAS EXPRESSED INABILITY TO PRODUCE THE M. THE INSPECTOR REPORTED THAT HE HAS GONE TO 4 CREDITORS OUT OF 2 A DDRESSES ARE NOT FOUND AND THE REMAINING 2 CASES, THE CREDITORS ARE NOT RESIDING IN THE GIVEN ADDRESS. THE LD. CIT(A) BY FOLLOWING THE REM AND REPORT OF THE ASSESSING OFFICER, HE GRANTED A RELIEF TO THE EXTEN T OF 7 CREDITORS AND FOR REMAINING ADDITIONS IN RESPECT OF OTHER CREDITORS, THE LD. CIT(A) HAS CONFIRMED THE SAME. SO FAR AS INTEREST PAYMENT IS CONCERNED IN RESPECT OF 7 CREDITORS, LD. CIT(A) GRANTED RELIEF. FOR THE REMAINING CREDITORS, HE CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 3. ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. AT THE TIME OF HEARING, THE LD. COUN SEL FOR THE ASSESSEE HAS SUBMITTED THAT ALL THE DETAILS ARE FILED BEFORE THE CIT(A) AND LD. CIT(A) CALLED THE REMAND REPORT IN THE COURSE OF RE MAND PROCEEDINGS. THE ASSESSING OFFICER HAS DEPUTED THE INSPECTOR TO MAKE AN ENQUIRY. THE INSPECTOR HAS NOT MADE PROPER ENQUIRY AND LD. C OUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT ALL THE DETAILS ARE AVA ILABLE WITH THE ASSESSEE AND ONE MORE OPPORTUNITY MAY BE GIVEN. 4. ON THE OTHER HAND, THE LD. DR ALSO AGREED FOR RE MITTING THE MATTER BACK TO THE ASSESSING OFFICER. IN VIEW OF THE ABOV E, WE FIND THAT IT IS A FIT CASE TO REMIT THE MATTER BACK TO THE ASSESSING OFFICER TO CONSIDER THE ITA NO.217/VIZAG/2015 SRI YENISETTY SAI PRASADA RAO, VIJAYAWADA 5 ISSUE AFRESH. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(A) AND REMIT THE MATTER BACK TO THE ASSESSING OFFICER TO P ASS AN ASSESSMENT ORDER DE-NOVO IN ACCORDANCE WITH LAW. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 2 ND MAR16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 02.03.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SRI YENISETTY SAI PRASADA RAO, L IC DEVELOPMENT OFFICER, D.NO.11-10-32, AMMISETTY VARI STREET, VIJA YAWADA 2. / THE RESPONDENT THE ITO WARD-2(2), VIJAYAWADA 3. ) / THE CIT, VIJAYAWADA 4. ) ( ) / THE CIT(A), VIJAYAWADA 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM