Y.Subba Rao, Eluru V. ACIT, Circle-1, Eluru

ITA 27/VIZ/2018

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 0930 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 01-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Deemed to accrue or arise in india
• Section: 69

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. 27 / VIZ /201 8 (ASST. YEAR : 20 0 4 - 0 5 ) Y. SUBBA RAO, PROP. M/S. LAKSHMI HARDWARE, NEAR MUNICIPAL OFFICE, MAIN BAZAR, ELURU, W.G. DISTRICT. V S . A CIT, CIRCLE - 1, ELURU . PAN NO. AANPY 4801 E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SHRI GURUS W AMY SR. DR DATE OF HEARING : 11 / 0 9 /201 8 . DATE OF PRONOUNCEMENT : 05 / 1 0 /201 8 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) , TIRUPATI , DATED 2 8 / 12 /201 7 FOR THE ASSESSMENT YEAR 200 4 - 0 5 . 2. GROUND NOS. 1 & 4 ARE GENERAL IN NATURE, NO ADJUDICATION IS REQUIRED, THEREFORE SAME ARE DISMISSED. 3 . GROUND NO. 3 IS NOT PRESSED, THEREFORE SAME IS DISMISSED. 4 . GROUND NO. 2 RELATES TO ADDITION OF RS. 1,68,000/ - TOWARDS UNEXPLAINED INVESTMENT. 2 ITA NO. 27/VIZ/2018 ( Y. SUBBA RAO ) 5. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS INVESTED CAPITAL OF RS. 1,83,000/ - , THE DETAILS OF WHI CH ARE AS FOLLOWS : - DATE FIRM NAME AMOUNT. 09/08/2003 M/S. LAXMI HARDWARE, ELURU (PROPRIETOR CONCERN) RS. 15,000 19/08/2003 - DO - RS. 10,000 26/08/2003 - DO - RS. 19,000 16/09/2003 - DO - RS. 15,000 29/09/2003 - DO - RS. 19,000 16/10/2003 - DO - RS. 19,000 21/10/2003 - DO - RS. 15,000 19/11/2003 - DO - RS. 18,000 15/12/2003 - DO - RS. 15,000 13/01/2004 - DO - RS. 19,000 02/09/2003 M/S. LAXMI MIRROR INDUSTRIES (PARTNER) RS. 19,000 TOTAL RS. 1,83,000 THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF ABOVE INVESTMENT WITH SUPPORTIVE EVIDENCE . AS T HE ASSESSEE HAS NOT EXPLAINED ANYTHING BEFORE THE ASSESSING OFFICER , THE ENTIRE INVESTMENT OF RS. 1,83,000/ - IS TREATED AS DEEMED INCOME OF THE ASSESSEE UNDER SECTION 69 OF THE ACT. 6 . ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE HAS EXPLAINED THE SOUR CE FOR THE INVESTMENT OF RS. 15 , 0 00 / - . THEREFORE, LD.CIT(A) BY CONSIDERING THE SAME, DIRECTED THE ASSESSING OFFICER TO RESTRICT THE ADDITION T O RS. 1,68,000/ - . 3 ITA NO. 27/VIZ/2018 ( Y. SUBBA RAO ) 7 . ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 8 . LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSING OFFICER HAS WRONGLY MADE THE ADDITION UNDER SECTION 69 OF THE ACT. 9. LD. DEPARTMENTAL REPRESENTATIVE HAS STRONGLY SUPPORTED THE ORDERS PASSED BY THE AUTHORITIES BELOW. 10 . WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW. 11 . THE ASSESSEE HAS INVESTED AN AMOUNT OF RS. 1,83,000/ - . WHEN THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE FOR THE INVESTMENT, HE HAS NOT GIVEN ANY EXPLANATION. THEREFORE, THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION 69 OF THE ACT, THE ENTIRE AMOUNT IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE HAS EXPLAINED THE SOURCE FOR THE INVESTMENT OF RS.15,000/ - , THEREFORE, LD. CIT(A) BY CONSIDERING THE SAME, DIRECTED THE ASSESSING OFFICE R TO RESTRICT THE DISALLOWANCE OF RS.1,68,000/ - (RS. 1,83,000 RS. 15,000). EVEN BEFORE US, THE ASSESSEE IS NOT ABLE TO EXPLAIN THE SOURCE OF INVESTMENT, THEREFORE WE FIND THAT THE LD. CIT(A) CORRECTLY CONFIRMED THE ORDER OF THE 4 ITA NO. 27/VIZ/2018 ( Y. SUBBA RAO ) ASSESSING OFFICER. FOR T HE SAKE OF CONVENIENCE, THE OPERATIVE PART OF THE LD. CIT(A)S ORDER IS EXTRACTED AS UNDER: - 8.2 I HAVE CONSIDERED THE FINDINGS OF THE AO AND ALSO SUBMISSIONS MADE BY THE ASSESSEE CAREFULLY. THE AO SHOULD HAVE ACCEPTED THE CASH CONTRIBUTION RECEIVED FROM M/S.LAKSHMI MIRROR INDUSTRIES OF RS.15,000 / - REFLECTED IN THE CAPITAL ACCOUNT OF THE ASSESSEE, AS THE SAME IS REFLECTED IN THE ACCOUNTS. HOWEVER, IN RESPECT OF OTHER AMOUNTS, IN DIFFERENT NAMES, NO EVIDENCE WAS FURNISHED BEFORE THE AO. IN THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT HAS FURNISH ED THE CONFIRMATION LETTERS FROM VARIOUS PERSONS WITHOUT GIVING FULL ADDRESS OF THE PARTIES, ALL THE PARTIES WERE STATED TO BE FARMERS DOING AGRICULTURAL ACTIVITIES. HOWEVER, NO PROOF WAS SUBMITTED ABOUT THE AGRICULTURAL ACTIVITIES CARRIED OUT BY THEM, IF ANY. THE LETTERS OF CONFIRMATION SUBMITTED BY THE APPELLANT DO NOT MENTION ABOUT CHARGING OF INTEREST AND TENURE OF LOAN, IF ANY. NO PRUDENT PERSON WOULD EXTEND LOAN TO THE ASSESSEE FOR UNLIMITED PERIOD WITHOUT CHARGING ANY INTEREST. IT IS PERTINENT TO MEN TION HERE THAT THE APPELLANT HAD NOT MENTIONED THESE AMOUNTS AS LOANS OUTSTANDING IN THE BOOKS AS LOAN RECEIVED FROM VARIOUS PARTIES, AND REPAYABLE AFTER CERTAIN PERIOD. NO EVIDENCE WAS ALSO FURNISHED BY THE APPELLANT AS TO WHEN THESE AMOUNTS WERE REPAID B Y THE ASSESSEE. THEREFORE, THE ENTIRE CLAIM MADE BY THE ASSESSEE BEFORE THE UNDERSIGNED ABOUT THE BALANCE CAPITAL CONTRIBUTION RECORDED IN THE ACCOUNTS OF RS.1,68,000I - (183000 - 15000) IS FALSE. THEREFORE, THE AO IS DIRECTED TO RESTRICT THE ADDITION TO RS.1 ,68,000/ - . THIS GROUND OF APPEAL IS PARTLY ALLOWED. 12 . BY CONSIDERING THE ABOVE, W E FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A). THUS, THIS APPEAL FILED BY THE ASSESSEE IS DISMISSED. 13 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 0 5 T H DAY OF OCT . , 201 8 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 0 5 T H OCT . , 201 8 . 5 ITA NO. 27/VIZ/2018 ( Y. SUBBA RAO ) VR/ - COPY TO: 1. THE ASSESSEE Y. SUBBA RAO, PROP. M/S. LAKSHMI HARDWARE, NEAR MUNICIPAL OFFICE, MAIN BAZAR, ELURU, W.G. DISTRICT. 2. THE REVENUE ACIT, CIRCLE - 1, ELURU. 3. THE PR. CIT , RAJAHMUNDRY. 4. THE CIT(A) , TIRUPATI. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.