THE ITO, WARD - 2(2), Vijayawada V. Smt. Kosanam Pushpavathi, Vijayawada

ITA 22/VIZ/2013

• Counselvise Citation: 2225314 RSA 2013
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 01-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V N CHARYA
• Assessee Lawyers: A C GANGAIAH
• Keywords: Reopening of assessment; Unexplained investment; Gift; Tangible material; Tax effect
• Section: 147; 148

Judgement Text

ITA NOS.8 & 20 TO 25/VIZAG/2013 AND COS 38 TO 43/VIZAG/2013 SMT. K. PUSHPAVATHI, VJA 6 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 8 /VIZAG/ 20 13 ASSESSMENT YEAR : 2004 - 05 KOSANAM PUSHPAVATHI VIJAYAWADA VS. CIT VIJAYAWADA (APPELLANT) (RESPONDENT) PAN NO.AKGPK 3375G ITA NOS.20 TO 25/VIZAG/2013 ASSESSMENT YEARS : 2004 - 05 TO 2009 - 10 RESPECTIVELY ITO WARD - 2(2) VIJAYAWADA VS. KOSANAM PUSHPAVATHI VIJAYAWADA (APPELLANT) (RESPONDENT) CO N OS.38 TO 43/VIZAG/2013 (ARISING OUT OF ITA NOS.20 TO 25/VIZAG/2013 RESPECT IVELY) ASSESSMENT YEARS : 2004 - 05 TO 2009 - 10 RESPECTIVELY ITO WARD - 2(2) VIJAYAWADA VS. KOSANAM PUSHPAVATHI VIJAYAWADA (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI A.C. GANGAIAH REVENUE BY: SHRI K.V.N. CHARYA, ADDL. CIT DATE OF HEARING : 06.12.2013 DATE OF PRONOUNCEMENT : 11.12.2013 ORDER PER BENCH:- THESE ARE APPEALS BY ASSESSEE FOR ASSESSMENT YEAR 2004-05 AND CROSS APPEAL BY REVENUE FOR ASSESSMENT YEAR 2004-05 AND REVENUE APPEALS FOR ASSESSMENT YEARS 2005-06 TO 2009-10. THE COS A RE BY THE ASSESSEE FOR ALL THE IMPUGNED ASSESSMENT YEARS JUSTIFYING THE OR DERS OF THE CIT(A). 2. WHEN THE APPEALS ARE TAKEN UP FOR HEARING, IT WA S INFORMED THAT ASSESSEES CROSS OBJECTIONS WERE ALSO FILED ON 29.0 5.2013. WITH THE CONSENT OF BOTH THE PARTIES, SINCE THE COS INVOLVED THE SAM E ISSUE, THESE ARE ALSO TAKEN UP FOR HEARING AND DISPOSED OFF ACCORDINGLY. ITA NOS.8 & 20 TO 25/VIZAG/2013 AND COS 38 TO 43/VIZAG/2013 SMT. K. PUSHPAVATHI, VJA 2 3. WE HAVE HEARD THE LD. COUNSEL AND LD. D.R. A.Y. 2004-05 4. IN THIS ASSESSMENT YEAR, THE ASSESSEE IN HER APPEAL RAISED THE FOLLOWING THREE GROUNDS: 1) ISSUE OF RE-OPENING 2) TREATING THE AGRICULTURAL INCOME OF RS.20,000/- AS INCOME FROM OTHER SOURCES WITHOUT GIVING ANY OPPORTUNITY. 3) CONFIRMING THE AMOUNT OF ` .75,000/- AS INCOME OUT OF THE INVESTMENT OF ` .9,75,000/-. 5. THE LD. COUNSEL FOR THE ASSESSEE PLACED ON RECOR D VARIOUS AFFIDAVITS SPECIFYING THAT ASSESSING OFFICER HAS NOT GIVEN REA SONS FOR RE-ASSESSMENT IN THE COURSE OF ASSESSMENT PROCEEDINGS IN ALL THE ASS ESSMENT YEARS. FURTHER, IT WAS ALSO AFFIRMED THAT ASSESSING OFFICER RELIED ON THE ADMISSIONS MADE BY THE ASSESSEE BEFORE A CIVIL COURT WHICH WAS THE BASIS F OR RE-OPENING THE ASSESSMENTS AND DETERMINING THE INCOMES INCLUDING T HE AGRICULTURAL INCOME AND RENTAL INCOME AS PER THE STATEMENTS RECORDED IN A CIVIL CASE. THEREFORE, THERE IS NO VALID REASON FOR RE-OPENING THE ASSESSM ENTS. 5.2 WE HAVE CONSIDERED RIVAL SUBMISSIONS. WITH R EFERENCE TO THE ISSUE OF RE-OPENING OF ASSESSMENT, SIMILAR ISSUE WAS CONSIDE RED IN THE HANDS OF SRI K.V. KRISHNA RAO, GROUP CASE, WHEREIN VIDE THE ORDE RS DATED 6.12.2013, THE ISSUE ON SIMILAR FACTS WAS DECIDED AS UNDER: WE HAVE CONSIDERED SUBMISSIONS OF LD REPRESENTATI VES OF PARTIES AND ORDERS OF AUTHORITIES BELOW. ON PERUSAL OF ASSESSMENT ORDER, IT IS APPARENT THAT AO ON THE BASIS OF INFOR MATION AVAILABLE WITH HIM INDICATING ESCAPEMENT OF INCOME HAD EXERCI SED HIS POWERS UNDER SECTION 147 OF THE ACT FOR REOPENING T HE ASSESSMENT. IT IS FURTHER EVIDENT FROM THE ASSESSMENT ORDER IN SO FAR AS NON- DISCLOSURE OF LONG TERM CAPITAL GAIN IS CONCERNED, THE ESCAPEMENT OF INCOME IS PROVED ON RECORD AS ASSESSEE HIMSELF D URING THE ASSESSMENT PROCEEDINGS HAS ADMITTED NON-DISCLOSURE OF SUCH INCOME AND WORKED OUT THE TAXABLE CAPITAL GAIN AT R S.45,288/-. THEREFORE, REOPENING OF ASSESSMENT ON ACCOUNT OF ES CAPEMENT OF INCOME IS PROVED BEYOND DOUBT AND THERE IS NO GROUN D ON THE PART OF THE ASSESSEE TO CHALLENGE THE SAME BY CONTENDING THAT THERE IS NO TANGIBLE MATERIAL BEFORE THE AO. IN SO FAR AS A SSESSEES CONTENTION WITH REGARD TO NON-COMMUNICATION OF REAS ONS IS CONCERNED, IT IS NOT CLEAR FROM THE FACTS ON RECORD AS TO WHETHER ASSESSEE AFTER COMPLYING TO THE NOTICE UNDER SECTIO N 148 OF THE ITA NOS.8 & 20 TO 25/VIZAG/2013 AND COS 38 TO 43/VIZAG/2013 SMT. K. PUSHPAVATHI, VJA 3 ACT, HAD ASKED FOR COMMUNICATION OF REASONS. TO A SPECIFIC QUERY MADE BY THE BENCH, LD AR ALSO COULD NOT SUBSTANTIAT E HIS CLAIM BY PRODUCING ANY MATERIAL EVIDENCE TO SHOW THAT ASSESS EE BEFORE COMPLETION OF ASSESSMENT HAD ASKED FOR COMMUNICATIO N OF REASONS. IN THIS FACTUAL POSITION, RELIANCE PLACED BY LD A.R . IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD (SUPRA) WILL NOT BE OF ANY SUPPORT TO THE ASSESSEE SINCE ASSESSEE HAD NEVER ASKED FOR COM MUNICATION OF REASONS BEFORE COMPLETION OF ASSESSMENT PROCEEDINGS . IT IS ALSO A FACT THAT ASSESSEE NOT ONLY HAS PARTICIPATED IN THE ASSESSMENT PROCEEDINGS BUT HAS ALSO ADMITTED CAPITAL GAIN. TH EREFORE, IT HAS TO BE PRESUMED THAT ASSESSEE WAS AWARE OF THE REASONS ON WHICH ASSESSMENT WAS REOPENED. FURTHER MORE, AS CAN BE S EEN FROM RECORD, ASSESSEE HAS NOT RAISED ANY ISSUE WITH REGA RD TO MERITS OF THE ADDITION. IN FACT, LD A.R. IN THE COURSE OF HE ARING, FAIRLY CONCEDED THAT ASSESSEE HAS NO CASE IN SO FAR AS THE MERITS OF THE ADDITION IS CONCERNED. IN THE AFORESAID CIRCUMSTAN CES, WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE LD A.R. REGA RDING VALIDITY OF THE PROCEEDINGS INITIATED UNDER SECTION 147 OF THE ACT. WE, THEREFORE, UPHOLD THE ORDER OF LD CIT(A) BY DISMISS ING THE GROUND RAISED BY THE ASSESSEE. 10. IN THE RESULT, APPEAL FILED BY ASSESSEE IS DISM ISSED. 5.3. SINCE THE FACTS INVOLVED ARE SIMILAR, THE ASSE SSEES GROUND NO.1 IS ACCORDINGLY DISMISSED. 6. WITH REFERENCE TO THE TREATMENT OF AGRICULTUR AL INCOME AS INCOME FROM OTHER SOURCES, AS SEEN FROM THE ORDER THERE IS NO D ISCUSSION WHETHER ASSESSEE WAS GIVEN AN OPPORTUNITY OR NOT. IT IS A FACT THAT ASSESSEE ADMITTED AN AMOUNT OF ` .20,000/- TO BE INCOME FROM OTHER SOURCES OUT OF ` .1,80,000/- SHOWN AS AGRICULTURAL INCOME IN A.Y. 2005-06. ON T HAT BASIS, THE A.O. DISALLOWED IN A.Y. 2004-05 ALSO AND IN OTHER ASSES SMENT YEARS AS WELL. ASSESSEE IS CONTESTING THE ISSUE IN THIS YEAR ONLY AND SUBMITTED THAT IT IS NOT COST EFFECTIVE TO CONTEST IN OTHER YEARS. IT WAS T HE CONTENTION OF THE LD. COUNSEL THAT THERE IS NO BASIS FOR TREATING THE AMO UNT AS INCOME FROM OTHER SOURCES AND ASSESSEE DID HAVE AGRICULTURAL LANDS AN D HAS NOT EARNED INCOME. ACCORDINGLY, WITHOUT GIVING ANY OPPORTUNITY THE A.O . CANNOT TREAT THE AGRICULTURAL INCOME DECLARED AS INCOME FROM OTHER S OURCES. 7. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE CONTENTIONS OF THE REVENUE, WE ARE OF THE OPINION THAT THERE IS NO NEED TO TREAT THE AMOUNT OF ` .20,000/- AS INCOME FROM OTHER SOURCES. ASSESSEE HA S CONSISTENTLY ITA NOS.8 & 20 TO 25/VIZAG/2013 AND COS 38 TO 43/VIZAG/2013 SMT. K. PUSHPAVATHI, VJA 4 DECLARED AN AMOUNT OF ` .1,80,000/- AS AGRICULTURAL INCOME IN ALL YEARS. E VEN THOUGH ASSESSEE HAS NOT CONTESTED IN LATER YEARS, A S THERE ARE NO OTHER ISSUES TO BE CONTESTED, IT DOES NOT MEAN THAT THE CONSENSU S GIVEN IN A.Y. 2005-06 CAN BE EXTENDED TO OTHER YEARS. THE ASSESSING OFFI CER ALSO IN THE ORDER CLEARLY MENTIONED THAT IN THE SCRUTINY ASSESSMENT FOR A.Y. 2005-06, ASSESSEE HAS ADMITTED THIS. THERE IS NOTHING ON RECORD TO S TATE THAT PART OF AGRICULTURAL INCOME WAS NOT EARNED FROM THAT SOURCE. UNLESS ASSE SSEE ADMITS OR THERE IS BASIS FOR TREATING AS SUCH, ASSESSING OFFICER CANN OT TREAT PART OF THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES, W ITHOUT GIVING ANY OPPORTUNITY. SINCE SO MUCH OF INCOME WAS STATED TO BE PART OF STATEMENT BEFORE A COURT OF LAW, WE ARE OF THE OPINION THAT T HE INCOME OFFERED AS AGRICULTURAL INCOME SHOULD BE ACCEPTED AS SUCH AT `. 1,80,000/-. THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 8. WITH REFERENCE TO THE THIRD GROUND, THE ISSUE IS WITH REFERENCE TO THE CONFIRMATION OF ` .75,000/- OUT OF ` .9,75,000/- INVESTED BY THE ASSESSEE THAT WAS TREATED AS UNEXPLAINED INVESTMENT BY AO. THE L D. CIT(A) TREATED AN AMOUNT OF RS.9 LAKHS AS EXPLAINED WHILE CONFIRMING THE AMOUNT OF RS.75,000/-. 9. THE REVENUE IS AGGRIEVED ON THE AMOUNT OF RS.9 L AKHS RELIEF GIVEN BY THE CIT(A) WHEREAS, THE ASSESSEE IS AGGRIEVED ON TH E AMOUNT OF ` .75,000/- CONFIRMED BY THE CIT(A). 10. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAS INVESTED AN AMOUNT OF ` .9,75,000/- BY WAY OF CASH OF ` .5,15,000/- AND ` .4,60,000/- BY WAY OF CHEQUES AS AN ADVANCE FOR PURCHASE OF CINEMA THEATR E. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCES FOR THE ABOVE AMOUNT. IT WAS EXPLAINED THAT AN AMOUNT OF ` .9 LAKHS WAS PAID OUT OF THEIR OWN FUNDS, OUT OF WH ICH WERE PART OF IT WAS BY GIFT FROM HER FATHER. THE A.O. RECOR DS THAT THE GIFT OF ` .9 LAKHS WAS FROM THE FATHER IN THE ASSESSMENT YEAR, WHEREAS THE ASSESSEE IN THE AFFIDAVIT FILED SUBMITS THAT IN THE CITY CIVIL COUR T, IT HAS BEEN STATED THAT AMOUNT OF ` .6 LAKHS HAS BEEN GIVEN IN 2001 BY HER FATHER. BE THAT AS IT MAY, THE CASH FLOW STATEMENT AS SHOWN BY THE ASSESSEE IN DICATES THAT ASSESSEE ITA NOS.8 & 20 TO 25/VIZAG/2013 AND COS 38 TO 43/VIZAG/2013 SMT. K. PUSHPAVATHI, VJA 5 HAS AN OPENING CASH BALANCE OF ` .12,50,000/-, OUT OF WHICH AN AMOUNT OF ` .9 LAKHS WAS SHOWN AS ADVANCE FOR THEATRE. THE ISSUE IS WHETHER THE OPENING BALANCE CAN BE GIVEN CREDIT? THE LD. CIT(A) ACCEPT ED THE OPENING CASH BALANCE AND AS THE ASSESSEE HAS SHOWN ` .9 LAKHS AS AMOUNT GIVEN AS ADVANCE FOR THEATRE, CONFIRMED THE BALANCE AMOUNT O F ` .75,000/- AS THE SAME WAS NOT SHOWN IN THE CASH FLOW STATEMENT. 11. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE DO NOT SEE ANY MERIT IN THE REVENUE APPEAL AS WELL AS IN THE ASSESSEES APPEAL ON THIS ISSUE. THE ASSESSEE HAS SHOWN AN OPENING BALANCE OF CASH OF ` .12,50,000/-. IT WAS SUBMITTED THAT, ON THE BASIS OF AVERMENTS MADE IN T HE CITY CIVIL COURT, AN AMOUNT OF ` .6 LAKHS WAS GIVEN BY ASSESSEES FATHER IN THE YEAR 2001. FURTHER, ASSESSEE ALSO HAS INCOME BY WAY OF AGRICUL TURAL INCOME IN EARLIER YEARS AND ASSESSING OFFICER HIMSELF HAS ACCEPTED TH E SOURCE OF ABOUT RS.1,60,000/- IN THE YEAR UNDER CONSIDERATION. THE REFORE, AVAILABILITY OF SO MUCH CASH CANNOT BE RULED OUT. THEREFORE, WE DO NO T SEE ANY REASON IN DIFFERING FROM THE FINDING OF THE CIT(A) FOR GIVING CREDIT OF ` .9 LAKHS INVESTMENT WHICH WAS ACCOUNTED FOR IN THE CASH FLOW STATEMENT. AT THE SAME TIME, AS SEEN FROM THE CASH FLOW STATEMENT, THE ASS ESSEE HAS ACCOUNTED FOR ONLY ` .9 LAKHS, WHEREAS THERE IS NO DISPUTE THAT THE AMOU NT ADVANCED AS RECORDED IN A.OS ORDER AT PAGE 2 PARA-3 WAS TO THE EXTENT OF ` .9,75,000/-. THIS FACT WAS NOT CONTESTED. THEREFORE, SINCE AN A MOUNT OF ` .75,000/- WAS NOT SHOWN IN THE CASH FLOW STATEMENT, THE CIT(A) WA S CORRECT IN GIVING CREDIT FOR ONLY AN AMOUNT OF RS.9 LAKHS AND CONFIRMING THE AMOUNT OF ` .75,000/- AS UNEXPLAINED INVESTMENT, THE SOURCE OF WHICH WAS NOT EXPLAINED. IT WAS THE CONTENTION THAT THE AMOUNT OF AGRICULTURAL INCOME W AS AVAILABLE AND THE INCOME SHOWN IN THE YEAR SHOULD BE GIVEN CREDIT. T HIS CONTENTION OF THE ASSESSEE CANNOT BE ACCEPTED IN VIEW OF THE CASH FLO W STATEMENT AS FILED BEFORE US, WHICH IS AS UNDER: PARTICULARS AMOUNT ( ` .) SOURCES: OP. BAL OF CASH 1250000 RENT AMOUNT RECD. 74400 INTEREST INCOME RECD. 37000 AGRICULTURAL INCOME RECD. 180000 TOTAL SOURCES OF FUNDS 1541400 ITA NOS.8 & 20 TO 25/VIZAG/2013 AND COS 38 TO 43/VIZAG/2013 SMT. K. PUSHPAVATHI, VJA 6 APPLICATION AMOUNT TAKEN OUT FOR FINANCE BUSINESS 300000 L.I.P. PAID 29320 AMOUNT GIVEN AS ADVANCE FOR THEATRE 900000 DOMESTIC EXPENSES 9000 0 TOTAL APPLICATION OF FUNDS 1319320 CLOSING BALANCE OF FUNDS 222080 12. AS CAN BE SEEN FROM THE ABOVE STATEMENT, THE AS SESSEE HAS TAKEN CREDIT FOR THE AMOUNT OF RENT RECEIVED, INTEREST IN COME RECEIVED AND ALSO AGRICULTURAL INCOME RECEIVED. THE ASSESSEE HAS ALS O SHOWN THE INVESTMENT IN BUSINESS, LIC PAID, ADVANCE TO THEATRE AND ALSO DOM ESTIC EXPENSES AND CARRIED OVER A CLOSING BALANCE OF ` .2,22,080/-. SINCE THE AMOUNT WHICH ASSESSEE NOW WANTS CREDIT HAVE ALREADY BEEN TAKEN C ARE IN THE CASH FLOW STATEMENT, THE AMOUNT OF ` .75,000/- STATED TO HAVE BEEN INVESTED AS ADVANCE FOR PURCHASE OF THEATRE IS CERTAINLY AN UNE XPLAINED INVESTMENT. ACCORDINGLY, WE CONFIRM THE ORDER OF THE LD. CIT(A) AS IT IS BASED ON CORRECT APPRECIATION OF FACTS. IN THE RESULT GROUND NO.1 I N REVENUES APPEAL AND GROUND NO.3 IN ASSESSEES APPEAL ARE ACCORDINGLY DI SMISSED. 13. IN THE REVENUES APPEAL, THE OTHER ISSUE RAISED IN GROUND NO.2 IS WITH REFERENCE TO THE CREDIT OF LEASE RENT GIVEN BY THE LD. CIT(A). THE ISSUE AROSE AS UNDER. 14. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE IS RECEIVING RENT FROM THE BPCL ON A VACANT LAND SITUATED AT TENALI BYPASS ROAD, LEASED TO BPCL FOR RUNNING A JUBILEE RETAIL OUTLET. THE ASSESSEE HAS SHOWN GROSS RENTS OF ` .74,400/- IN THE RETURN OF INCOME. IT WAS THE CONT ENTION OF THE ASSESSEE THAT THE RENT OF ` .16,600/- WAS RECEIVED FROM BPCL AND ` .57,800/- WAS RECEIVED FROM KRISHNALANKA PROPERTY. THE ASSESSING OFFICER DID NOT ACCEPT THE ABOVE CONTENTION ON THE REASON THAT THE LEASE RENTS RECEIVABLE FROM BPCL WAS ONLY ` .14,637/- AND NOT ` .16,600/-. ACCORDINGLY, THE CREDIT WAS NOT GIVEN AND THE AMOUNT OF ` .14,637/- WAS BROUGHT TO TAX AS INCOME FROM OTHER SOURCES. THE LD. CIT(A) ON APPRECIATION OF F ACTS CONCURRED WITH THE ITA NOS.8 & 20 TO 25/VIZAG/2013 AND COS 38 TO 43/VIZAG/2013 SMT. K. PUSHPAVATHI, VJA 7 CONTENTION OF THE ASSESSEE AND DIRECTED THE A.O. TO DELETE THE AMOUNT. THE REVENUE IS AGGRIEVED ON THIS ISSUE. 15. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE DO NOT SEE ANY REASON TO DIFFER FROM THE ORDER OF THE CIT(A), EVEN THOUGH TH E ASSESSEES RENT ADMITTED DOES NOT TALLY EXACTLY WITH THE AOS WORKING. THER E IS NO DENIAL OF THE FACT THAT THE ENTIRE RENT RECEIPT RECEIVED FROM TWO SOUR CES WAS SHOWN BY THE ASSESSEE IN THE RETURN AND ALSO IN THE CASH FLOW ST ATEMENT, THEREFORE, WE ARE OF THE OPINION THAT CIT(A)S ORDER IS CORRECT ON FA CTS AND ACCORDINGLY THE SAME DESERVED TO BE UPHELD. IN THE RESULT, THE GROUND N O.2 RAISED BY THE REVENUE IN THIS APPEAL IS DISMISSED. 16. IN THE RESULT, ASSESSEES APPEAL IN ITA NO.8 IS PARTLY ALLOWED AND REVENUES APPEAL IN ITA NO.20 IS DISMISSED. THE CR OSS OBJECTION FOR THE SAME ASSESSMENT YEAR IN CO 38 IS REPEAT OF THE SAME CONT ENTIONS RAISED IN THE MAIN APPEAL. IN VIEW OF THIS, THE CO IS TREATED AS ACADEMIC IN NATURE AND DISMISSED AS INFRUCTUOUS. A.YS. 2005-06, 2006-07, 2008-09 AND 2009-10 17. THE REVENUE HAS RAISED ISSUE ONLY ON THE REN T BEING GIVEN CREDIT. REVENUE IN GROUND NO.3 IN ALL THE YEARS HAVE CONTES TED THE ISSUE STATING THAT THOUGH THE TAX EFFECT INVOLVED WAS BELOW THE MANDAT ORY LIMITS SPECIFIED AS PER INSTRUCTION NO.3/2011, IN VIEW OF PARA-5 OF THE INSTRUCTION AS THIS IS COMPOSITE ORDER, APPEAL IS SUGGESTED. 18. WE HAVE PERUSED THE INSTRUCTION NO.3 OF 2011 OF THE CBDT. EVEN THOUGH THE SAID PARA 5 ALLOWS PREFERRING APPEAL IN CASE OF A COMPOSITE ORDER IN ALL THE YEARSS, THE RENTAL AMOUNT INVOLVED IS ON LY ` .16,600/- PER YEAR AND THE TAX EFFECT THEREON IS VERY MEAGER AND EVEN IF A COMPOSITE ORDER FOR ALL THE YEARS ON THIS ISSUE IS CONSIDERED, THE TAX EFFECT I S BELOW THE MANDATORY LIMITS PRESCRIBED. THEREFORE THE APPEALS ARE NOT MAINTAINA BLE. NOT ONLY THIS, THERE IS NO MERIT IN REVENUES APPEAL ON FACTS ALSO. WE HAV E ALREADY DISCUSSED THIS ISSUE IN A.Y. 2004-05, IE. GIVING CREDIT OF RENT RE CEIVED FROM BPCL OUT OF THE RENTS ALREADY ADMITTED BY THE ASSESSEE AND CONFIRME D LD.CIT(A) ORDER. THUS ITA NOS.8 & 20 TO 25/VIZAG/2013 AND COS 38 TO 43/VIZAG/2013 SMT. K. PUSHPAVATHI, VJA 8 EVEN ON FACTS, THE REVENUES GROUNDS HAVE NO MERIT. ACCORDINGLY, ITA NOS.21,22,24 & 25 ARE DISMISSED. THE CORRESPONDING COS IN CO NOS.39, 40,42 & 43 ARE ALSO DISMISSED AS THE ISSUE RAISED I N THE COS ARE ACADEMIC IN NATURE AND MORE OR LESS SUPPORTING THE ORDERS OF CI T(A). THEREFORE, THE COS ARE TREATED AS INFRUCTUOUS. A.Y. 2007-08: 19. IN ITA NO.23/V/2013, THE REVENUE HAS RAIS ED, IN ADDITION TO THE RENT ISSUE WHICH WAS DISCUSSED EARLIER, ISSUE OF INVESTM ENT IN HOUSE OF ` .3,06,000/- OUT OF TOTAL INVESTMENT OF ` .8,96,000/- TREATED AS UNEXPLAINED. 20. THE ISSUE AROSE AS UNDER. DURING THE YEAR UNDER CONSIDERATION, ASSESSEE CONSTRUCTED SECOND FLOOR ON THE BUILDING SITUATED A T DR.NO.41-23-2, GANGANAMMA TEMPLE STREET, KRISHNALANKA, VIJAYAWADA. IN THE CASH FLOW STATEMENT, ASSESSEE ADMITTED AN INVESTMENT OF ` .8,96,000/-. IT WAS EXPLAINED THAT THE ASSESSEE HAS OBTAINED HOUSING LO AN OF ` .6,72,000/- FROM SBI AND BALANCE AMOUNT OF ` .2,24,000/- WAS INVESTED OUT OF THE PERSONAL SAVINGS. ON EXAMINATION OF THE BANK ACCOUNT, THE A O FOUND OUT THAT THE ASSESSEE HAS WITHDRAWN THE LOAN AMOUNT TO THE EXTEN T OF ` .5,90,000/- ONLY. DISBELIEVING OWN SOURCES AND NOTICING THE SHORT UT ILIZATION OF LOAN OBTAINED FROM BANK, ASSESSING OFFICER TREATED AN AMOUNT OF ` .3,60,000/- AS UNEXPLAINED. BEFORE THE CIT(A), IT WAS CONTENDED T HAT THE ASSESSEE HAS MORE THAN ` .8 LAKHS OF INCOME IN EARLIER YEARS BY WAY OF INCOM E RETURNED AND ALSO AGRICULTURAL INCOME AND ASSESSEE ALSO RECEIVED THE ADVANCE GIVEN IN EARLIER YEAR FOR THE THEATRE, WHICH WAS RETURNED BA CK AND ACCORDINGLY, THE RECEIPTS AND PAYMENTS HAVE BEEN SHOWN IN THE CASH F LOW STATEMENT. THE LD. CIT(A) ON APPRECIATION OF THE FACTS, GAVE A FINDIN G AS UNDER: IT IS FURTHER SEEN THAT THIS INVESTMENT (ADVANCE G IVEN TO THE THEATRE) WAS NOT TRANSFERRED AND THE SAME WAS RETUR NED BACK TO THE APPELLANT IN THE SUBSEQUENT ASSESSMENT YEAR OF 2007-08. IN THE SAME YEAR, THE APPELLANT HAS MADE USE OF ` .3,06,000/- FOR CONSTRUCTING SECOND FLOOR OF THE RESIDENTIAL HOUSE WHICH WAS EXPLAINED TO THE A.O. BUT AS PER THE A.R., THE A.O. HAS NOT ACCEPTED SUCH EXPLANATION AND SUBJECTED THE SAME FO R ADDITION WHICH IS CHALLENGED BEFORE THE UNDERSIGNED. SINCE THE FACTS ARE CLEAR AND NO OTHER MATERIAL WAS BROUGHT ON RECORD T O REFUTE THE APPELLANT, THE A.O. IS DIRECTED TO DELETE THE SAME. ITA NOS.8 & 20 TO 25/VIZAG/2013 AND COS 38 TO 43/VIZAG/2013 SMT. K. PUSHPAVATHI, VJA 9 21. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). IT IS A FA CT THAT THE ASSESSEE HAS SHOWN THE INVESTMENT IN THE CASH FLOW STATEMENT AND THE AMOUNT OF INVESTMENT HAS NOT BEEN DOUBTED. IT IS ALSO A FACT THAT ASSESSEE HAS RECEIVED THE ADVANCES GIVEN IN EARLIER YEARS, APART FROM THE INCOMES FROM AGRICULTURE AS WELL AS TAXABLE INCOMES SHOWN IN THE CASH FLOW S TATEMENT. SINCE THE CASH FLOW STATEMENT IS THE BASIS FOR MAKING THE ASSESSME NT, CONSIDERING THE ENTIRE INVESTMENT SHOWN IN THAT STATEMENT, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). ACCORDINGLY, THE ISSUE RAISED BY THE REVENUE IN A.Y. 2007-08 IS DISMISSED. AS CONSIDERE D EARLIER, THE ISSUE ON RENT RECEIVED BEING GIVEN CREDIT BY LD.CIT(A) DESERVES T O BE DISMISSED FOR THE SAME REASON DISCUSSED EARLIER. 22. IN THE RESULT, ITA NO.23 IS DISMISSED. THE C.O. NO.41 PERTAINING TO THIS ASSESSMENT YEAR IS IN SUPPORT OF THE CIT(A)S ORDER . EVEN THOUGH VARIOUS LEGAL ISSUES ARE RAISED, THEY ARE SIMILAR TO OBJECT IONS RAISED IN ASSESSEE APPEAL FOR AY 2005-06 AND ARE REPETITIVE. THEREFORE THEY ARE TREATED AS ACADEMIC IN NATURE AND ACCORDINGLY, THE CO IS CONSI DERED AS INFRUCTUOUS. 23. IN THE RESULT, THE ASSESSEES APPEAL IN AY 2004 -05 IN ITA NO.8 IS PARTLY ALLOWED AND REST OF THE APPEALS BY REVENUE AND COS BY AS SESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 11 TH DEC13 SD/ - SD/ - ( SAKTIJIT DEY ) ( B. RAMAKOTAIAH ) JUDICIAL MEMBER ACCOUNTANT MEMBER VG/SPS VISAKHAPATNAM, DATED 11 TH DECEMBER, 2013 ITA NOS.8 & 20 TO 25/VIZAG/2013 AND COS 38 TO 43/VIZAG/2013 SMT. K. PUSHPAVATHI, VJA 10 COPY TO 1 KOSANAM PUSHPAVATHI, 41 - 24 - 02, GANGANAMMA TEMPLE STREET, KRISHNALANKA, VIJAYAWADA-520 013. 2 ITO WARD - 2(2), VIJAYAWADA 3 THE CI T, VIJAYAWADA 4 THE C IT (A) , VIJAYAWADA 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM