THE ITO, WARD - 2(4), Vijayawada V. Pasupuleti Nacharaiah, Vijayawada

ITA 221/VIZ/2014

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9962 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 09-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Non compliance; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 133(6); 69A; 44AB

Judgement Text

ITA NO.221/VIZAG/2014 PASUPULETI NANCHARAIAH, 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.221/VIZAG/2014 ( / ASSESSMENT YEAR: 2006-07) ITO, WARD - 2(4), VIJAYAWADA VS. PASUPULETI NANCHARAIAH, VIJAYAWADA [PAN: A NEPP5080A ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI M.N. MURTHY NAIK,DR / RESPONDENT BY : SHRI C. SUBRAHMANYAM,AR / DATE OF HEARING : 11.07.2016 / DATE OF PRONOUNCEMENT : 12.08.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), VIJAYAWADA DATED 25.2.2014 FOR THE ASSESSME NT YEAR 2006-07. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS AN INDIV IDUAL ENGAGED IN THE TRANSPORT BUSINESS. THE ASSESSEE HAD FILED A RETUR N OF INCOME BY ITA NO.221/VIZAG/2014 PASUPULETI NANCHARAIAH, VIJAYAWADA 2 DECLARING TOTAL INCOME OF ` 2,38,000/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. HAS ISSUED NOTICE TO THE ASSE SSEE TO APPEAR ON DIFFERENT DATES. THE A.O. ASKED THE ASSESSEE TO AP PEAR ON 21.1.2008 BUT NONE APPEARED, AGAIN NOTICE WAS ISSUED ON 3.10. 2008 TO APPEAR ON 14.10.2008 BUT NONE APPEARED, AGAIN NOTICE WAS ISSU ED ON 27.10.2008 TO APPEAR ON 4.11.2008 BUT NONE APPEARED, AGAIN NOT ICE WAS ISSUED ON 11.12.2008 TO APPEAR ON 19.12.2008 BUT NONE APPEARE D, AGAIN NOTICE WAS ISSUED ON 19.12.2008 TO APPEAR ON 26.12.2008 BU T NONE APPEARED. IN VIEW OF THE NON-COOPERATION OF THE ASSESSEE TO A PPEAR BEFORE THE A.O., THE A.O. HAS COMPLETED THE ASSESSMENT U/S 144 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') AS UNDE R: 2.1 THE ASSESSEE IN THE RETURN OF INCOME HAS DISCL OSED OWNERSHIP OF FOUR VEHICLES FOR 12 MONTHS AS IN THE EARLIER YEAR AND INCOME FROM FIVE VEHICLES FOR FOUR MONTHS, APPEAR TO BE NEWLY ACQUIR ED. HE HAS DECLARED HIS INCOME UNDER THE PROVISIONS OF SEC. 44AE OF THE ACT AT THE RATE OF RS.3,500/ PER VEHICLE PER MONTH. EXCEPT THIS, HE HAS NOT FILE D ANY BALANCE SHEET, STATEMENT OF AFFAIRS, RECEIPTS AND PAYMENTS ACCOUNT OR EVEN ASSETS AND LIABILITIES STATEMENT. BANK ACCOUNT PARTICULARS ALS O WERE NOT FURNISHED, EVEN THOUGH HE HAS CLAIMED REFUND. 2.2 AS PER THE ANNUAL INFORMATION RETURN FURNISHED BY ANDHRA BANK, AUTO NAGAR BRANCH, VIJAYAWADA, THE ASSESSEE HAS MAD E CASH DEPOSITS TO THE TUNE OF RS35,03,600/- IN HIS ACCOUNT NO. ABJ 40197. AS SUCH, LEDGER EXTRACT OF THE SAID ACCOUNT WAS OBTAINED FRO M THE BANK U/S 133(6) OF THE ACT. A PERUSAL OF THE ACCOUNT REVEALED THAT TH E TOTAL CREDITS MADE INTO THIS ACCOUNT WERE STOOD AT S.89,57,651-57. ON THE O THER HAND, THE ASSESSEE HAS A GROSS RECEIPT AT RS. 36,50,266/- AS PER THE T DS CERTIFICATES ENCLOSED. EVEN THE AMOUNTS CREDITED INTO THIS ACCOUNT THROUGH TRANSFER WERE STOOD AT RS. 52,65,846/- AS SUCH, ASSESSEE IS OUGHT TO GET H IS ACCOUNTS AUDITED U/S 44AB OF THE ACT AND TO FURNISH THE AUDIT REPORT IN FORM NOS. 3GB & 3CD. INSTEAD, HE RESORTED TO DISCLOSE HIS INCOME U/S 44A E OF THE ACT. EVEN FOR THE SHOW CAUSE NOTICE, THE ASSESSEE HAS NOT RESPONDED A ND NOT FURNISHED ANY ITA NO.221/VIZAG/2014 PASUPULETI NANCHARAIAH, VIJAYAWADA 3 EXPLANATIONS/ OBJECTIONS FOR THE PROPOSED ADDITIONS . 2.3 AS SUCH, IT IS PRESUMED THAT THE ASSESSEE HAS N O VALID EXPLANATION FOR THE TRANSACTIONS TAKEN PLACE IN HIS BANK ACCOUN T AND NO VALID OBJECTIONS FOR THE PROPOSAL TO INVOKE PROVISIONS OF SEC. 144 O F THE ACT. HENCE, ASSESSMENT IS COMPLETED BY TAKING THE CASH AMOUNTS INTRODUCED IN THE BANK ACCOUNT AS UNDISCLOSED CASH INVESTMENT IN THE BANK ACCOUNT BY THE ASSESSEE AND ADDED TO THE INCOME RETURNED. DUE CARE HAS BEE N TAKEN TO GIVE CREDIT FOR ATTRIBUTABLE WITHDRAWALS MADE WHICH WORKED OUT AT RS.3,85,000/- AND ALLOWED. AFTER GIVING CREDIT TO THE ATTRIBUTABLE W ITHDRAWALS, THE NET CASH INTRODUCTION BY THE ASSESSEE IS WORKED OUT AS UNDER : CASH DEPOSITED IN THE BANK ACCOUNT RS.35,03,600/- LESS: ATTRIBUTABLE CASH WITHDRAWALS AS DISCUSSED ABOVE RS. 3,85,000/- NET CASH DEPOSITS RS.31,18,600/- IN THE ABSENCE OF ANY BOOKS OF ACCOUNT, BILLS, VOUC HERS, RECEIPTS OR EVEN ANY EXPLANATIONS FOR THE QUERIES RAISED, AND IN VIEW OF NON COMPLIANCE TO ANY OF THE NOTICES INCLUDING A SHOW CAUSE NOTICE FOR NOT T O INVOKE PROVISIONS OF SECTION 144 OF THE ACT, THE ASSESSMENT IS COMPLETED BY ADDING THE ABOVE SUM AS UNDISCLOSED CASH INTRODUCED IN THE BANK ACCO UNT U/S 69A OF THE ACT. 3. ASSESSEE CARRIED MATTER IN APPEAL BEFORE THE CIT (A) AND SUBMITTED THAT THE ADDITION MADE BY THE A.O. IS NOT CORRECT. THE LD. CIT(A) DELETED THE ADDITION MADE BY THE A.O. BY OBSERVING AS UNDER: 6.1 ON A PERUSAL OF THE FACTS OF THE CASE, THE AP PELLANT HAS DECLARED INCOME UNDER THE PROVISIONS OF SECTION 44AE OF THE ACT. THE ASSESSING OFFICER OBSERVED FROM THE BANK ACCOUNT OF THE APPEL LANT WITH ANDHRA BANK, THE TOTAL CREDITS AMOUNT TO RS.89,57,651/- AN D ACCORDINGLY HELD THAT THE APPELLANT OUGHT TO HAVE GOT HIS ACCOUNTS AUDITE D U/S.44AB OF THE ACT AND THEREBY REJECTED THE INCOME OFFERED BY THE APPE LLANT UNDER THE PROVISIONS OF SECTION 44AE OF THE ACT. WHILE DOING SO THE ASSESSING OFFICER HAS TAKEN THE CASH DEPOSITS IN THE SAID ACCOUNT AMO UNTING TO RS.32,56,600/- AS UNEXPLAINED RECEIPTS AND ADDED TO THE INCOME OF THE APPELLANT. 6.2. AFTER GOING THROUGH THE SUBMISSIONS OF THE AP PELLANT AND TRANSACTIONS IN THE BANK ACCOUNT, I AM OF THE OPINIO N THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN ADDING THE CASH DEPOSIT S OF RS.32,56,600/- AS INCOME OF THE APPELLANT. IT IS FACT THAT THERE ARE CREDITS IN THE BANK ACCOUNT AT RS.89,57,651/-. OUT OF THIS, AN AMOUNT O F RS.48,18,780/- WAS ATTRIBUTABLE TO THE FINANCE TAKEN BY THE APPELLANT FROM VARIOUS FINANCE COMPANIES IN PURCHASE OF LORRIES, AS IS EVIDENCED F ROM THE ACCOUNT COPIES ITA NO.221/VIZAG/2014 PASUPULETI NANCHARAIAH, VIJAYAWADA 4 PRODUCED BY THE APPELLANT. AS FAR AS THE CASH DEPOS ITS ARE CONCERNED, THE SAME REPRESENTS THE RECEIPTS DERIVED BY THE APPELLA NT FROM THE BUSINESS OF TRANSPORT. THE APPELLANT HAS ALREADY OFFERED THE INCOME ON THE SAID RECEIPTS BY APPLYING THE PROVISIONS OF SECTION 44AE OF THE ACT. HENCE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE AD DITION OF CASH DEPOSITS IN THE BANK ACCOUNT AS UNEXPLAINED RECEIPTS. ACCORDING LY, HE IS DIRECTED TO DELETE THE ADDITION MADE IN THIS REGARD. 4. ON BEING AGGRIEVED REVENUE IS IN APPEAL BEFORE U S. THE LD. D.R. HAS SUBMITTED THAT THE A.O. HAS GIVEN AS MANY AS SI X OPPORTUNITIES TO THE ASSESSEE TO SUBMIT THE DETAILS AND ALSO CALLED FOR EXPLANATION. HOWEVER, THE ASSESSEE HAS CHOSEN NOT APPEAR BEFORE THE A.O. AND NO EXPLANATION WAS FILED. THE LD. CIT(A) WITHOUT CALL ING THE REMAND REPORT SIMPLY DELETED THE ADDITION MADE BY THE A.O. AND SU BMITTED THAT THE ORDER PASSED BY THE CIT(A) IS NOT CORRECT. ALTERNA TIVELY, HE HAS SUBMITTED THAT ISSUE MAY BE REMITTED BACK TO THE A. O. FOR EXAMINATION AFRESH. 5. ON THE OTHER HAND, THE LD. A.R. HAS SUPPORTED TH E ORDER PASSED BY THE CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. FROM THE ASSESSMENT ORDER, IT IS VERY CLEAR THAT THE A.O . HAS GIVEN AS MANY AS SIX OPPORTUNITIES TO THE ASSESSEE TO SUBSTANTIATE H IS CASE BEFORE HIM. HOWEVER, THE ASSESSEE HAS CHOSEN NOT TO APPEAR AND NOT TO FILE THE DETAILED EXPLANATION. UNDER THOSE CIRCUMSTANCES, T HE A.O. WAS ITA NO.221/VIZAG/2014 PASUPULETI NANCHARAIAH, VIJAYAWADA 5 COMPELLED TO PASS AN ORDER U/S 144 OF THE ACT. BEF ORE CIT(A), THE ASSESSEE HAS FILED SOME DETAILS AND SUBMITTED THAT ADDITION MADE BY THE A.O. IS NOT CORRECT. THE LD. CIT(A) WITHOUT CALLIN G THE REMAND REPORT SIMPLY DELETED THE ADDITION MADE BY THE A.O. WE FIN D THAT IN THIS CASE WHEN A.O. HAS GIVEN AS MANY AS OPPORTUNITIES, THE A SSESSEE HAS CHOSEN NOT TO APPEAR BEFORE THE A.O. AND ONLY APPEARED BEF ORE CIT(A). THEREFORE, THE CIT(A) OUGHT TO HAVE CALLED THE REMA ND REPORT FROM THE A.O. AND THEREAFTER HE SHOULD HAVE DECIDED THE ISSU E. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT (A) AND REMIT THE MATTER BACK TO THE A.O. TO DECIDE THE ISSUE DE-NOVO AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. THIS GROUN D OF APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 12 TH AUG16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 12.08.2016 VG/SPS ITA NO.221/VIZAG/2014 PASUPULETI NANCHARAIAH, VIJAYAWADA 6 '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ITO, WARD-2(4), VIJAYAWADA 2. / THE RESPONDENT SHRI PASUPULETI NANCHARAIAH, RE PRESENTED BY LEGAL HEIR SMT. P. LAKSHMI SAROJINI, D.NO.30-20/3-21, LAL BAHADUR ST., SEETHARAMPURAM, VIJAYAWADA 3. ) / THE CIT, VIJAYWADA 4. ) ( ) / THE CIT(A), VIJAYAWADA 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM