The ITO, Ward-2(1), Guntur V. Smt Narra Rajani, Edlapadu

ITA 281/VIZ/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0651 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-05-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 26-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G S S GOPINATH
• Keywords: Gift

Judgement Text

ITA NOS. 245 & 281/VIZAG/2009 NARA RAJANI, EDLAPADU PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.245/VIZ/2009 ASSESSMENT YEAR: 2005-06 NARRA RAJANI, VS. ITO WARD 2(1) EDLAPADU GUNTUR PAN NO.ADZPN 1348 Q) (APPELLANT) (RESPONDENT) ITA NO. 281/VIZAG/2009 ASSESSMENT YEAR: 2005-06 ITO WARD 2(1) VS. NARRA RAJANI GUNTUR EDLAPADU (APPELLANT) (PAN NO. ADZPN 1348 Q) ( RESPONDENT) APPELLANT BY : SHRI G.V.N. HARI, CA RESPONDENT BY : SHRI G.S.S. GOPINATH, DR ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER DATED 27-2-2009 PASSED BY LEARNED CIT (A) GUNTUR AND THEY RELATE TO THE ASSESSMENT YEAR 2005-06. 2. AGAINST THE ADDITION OF RS.14,68,796/- MADE BY T HE ASSESSING OFFICER, THE LEARNED CIT (A) HAS CONFIRMED THE ADDI TION TO THE EXTENT OF RS.9,04,682/- BY GIVING PARTIAL RELIEF TO THE EXTEN T OF RS.5,64,114/-. AGGRIEVED BY THE ORDER OF LEARNED CIT (A), BOTH THE PARTIES ARE IN APPEAL BEFORE US. ITA NOS. 245 & 281/VIZAG/2009 NARA RAJANI, EDLAPADU PAGE 2 OF 4 3. THE FACTS RELATING TO THE ISSUES ARE STATED IN B RIEF. THE ASSESSEE IS THE PROPRIETRIX OF M/S SRI SATYA SAI FLY ASH BRICK INDUSTRIES. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLE D FOR DETAILS OF SOURCES OF CAPITAL OF RS.12,15,125/- BROUGHT IN BY THE ASSE SSEE IN THE BUSINESS. THE ASSESSEE EXPLAINED THE SOURCES AS UNDER: 1. GIFT RECEIVED FROM FATHER AND BROTHERS - 2,00,00 0 AT THE TIME OF MARRIAGE IN 1982 2. INTEREST INCOME ON ROTATION OF ABOVE - 6,26,725 GIFTS 3. INCOME RECEIVED ON LEASE OF AGRIL.LAND - 1,18,7 00 4. GIFT FROM HUSBAND - 3,40,000 TOTAL = 12,85,425 ====== THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EX PLANATIONS FILED BY THE ASSESSEE IN THIS REGARD, AS THE AVAILABILITY OF ABO VE CASH WAS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. HENCE THE ASSESSING O FFICER ADDED THE ENTIRE CAPITAL AMOUNT OF RS.12,15,125/- TO THE TOTA L INCOME OF THE ASSESSEE. THE ASSESSING OFFICER ALSO ADDED 30% OF CLAIM OF EX PENDITURE MADE IN THE BUSINESS AMOUNTING TO RS.2,53,671/-, FOR THE REASON THAT THE ASSESSEE DID NOT PRODUCE BILLS AND VOUCHERS IN SUPPORT OF THEIR CLAIM. 4. IN THE APPEAL FILED BY THE ASSESSEE, THE LEARNED CIT (A) ACCEPTED THE RECEIPT OF GIFT AND INTEREST INCOME TO THE EXTENT O F RS.3,00,000/- AND LEASE INCOME FROM AGRICULTURAL LAND TO THE EXTENT OF RS.9 5,000/- IN RESPECT OF THE ADDITION PERTAINING TO THE CAPITAL AMOUNT BROUGHT I N BY THE ASSESSEE. THE LEARNED CIT (A) ALSO RESTRICTED THE DISALLOWANCE MA DE ON EXPENDITURE TO 10% OF THE EXPENDITURE CLAIMED BY THE ASSESSEE. 5. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE RECORD. THE FIRST ADDITION RELATES TO THE CAPITAL AMOUNT OF RS. 12.15 LAKHS ADDED BY THE ITA NOS. 245 & 281/VIZAG/2009 NARA RAJANI, EDLAPADU PAGE 3 OF 4 ASSESSING OFFICER. FROM THE FINANCIAL STATEMENTS FI LED BY THE ASSESSEE WE NOTICE THAT THE ASSESSEE HAD PURCHASED MACHINERIES TO THE TUNE OF RS.3,23,700/- IN THE IMMEDIATELY PRECEDING PREVIOUS YEAR. SINCE THE AMOUNT TO THE EXTENT OF FIXED ASSETS CITED ABOVE HAS BEEN INVESTED IN THE IMMEDIATELY PRECEDING YEAR, THE OPENING CAPITAL TO THAT EXTENT STANDS EXPLAINED. FURTHER THE ASSESSING OFFICER HAS ACCEPT ED THE EXISTENCE OF AGRICULTURAL LAND AND ALSO AVAILABILITY OF AGRICUL TURAL INCOME, THOUGH HE WAS NOT SATISFIED WITH THE QUANTUM OF THE AGRICULTURAL INCOME. THE TWO PROBABILITIES DISCUSSED ABOVE SUPPORTS THE AMOUNT O F RS.3,95,000/-, BEING THE RELIEF GIVEN BY THE LEARNED CIT (A) IN RESPECT OF SOURCES FOR THE CAPITAL. HENCE WE ARE OF THE VIEW THAT THE ESTIMATE MADE BY THE LEARNED CIT(A) IS REASONABLE. 6. SIMILARLY IN RESPECT OF ADHOC DISALLOWANCE O F EXPENDITURE, THE LEARNED CIT (A) HAS BROUGHT OUT THAT CONTRADICTION BETWEEN THE CLAIMS OF THE ASSESSING OFFICER AND THE ASSESSEE WITH REGARD TO T HE SUBMISSION OF BILLS AND VOUCHERS. THE ASSESSING OFFICER HAS STATED THA T THE ASSESSEE HAS NOT PRODUCED THE BILLS AND VOUCHERS. HOWEVER, THE ASSE SSEE, IN THE LETTER FILED BEFORE THE ASSESSING OFFICER, HAS STATED THAT THE B ILLS AND VOUCHERS WERE PRODUCED BEFORE HIM. BEFORE LEARNED CIT (A) THE AS SESSEE HAS SUBMITTED THAT THE EXPENDITURE IS SUPPORTED ONLY BY SELF MADE VOUCHERS. HENCE THE LEARNED CIT(A) CAME TO THE CONCLUSION THAT THE EXPE NDITURE CLAIMS ARE SUPPORTED BY SELF MADE VOUCHERS. ACCORDINGLY, THE LEARNED CIT (A) HAS RESTRICTED THE DISALLOWANCE TO 10% OF THE EXPENDITU RE. IN THE FACTS OF THE CASE, WE FIND THE SAID DISALLOWANCE ESTIMATED BY LE ARNED CIT(A) TO BE REASONABLE. 7. IN VIEW OF THE FOREGOING WE ARE OF THE VIEW THAT THE LEARNED CIT (A) HAS TAKEN A CONSCIOUS DECISION IN THE FACTS AND CIR CUMSTANCES OF THE CASE AND FURTHER THE RELIEF GIVEN BY THE LEARNED CIT (A) APPEARS TO BE ITA NOS. 245 & 281/VIZAG/2009 NARA RAJANI, EDLAPADU PAGE 4 OF 4 REASONABLE. IN THESE CIRCUMSTANCES WE DO NOT FIND IT NECESSARY TO INTERFERE WITH ORDER PASSED BY LEARNED CIT (A). 8. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS THAT OF THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 29.6.2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE: 29 TH JUNE, 2010 COPY TO 01 SMT. NARRA RAJANI, C/O. P. NAGESWARA RAO & CO., AUD ITORS, ANJUMAN BUILDINGS, LALAPET, GUNTUR 522 003 02 THE ITO WARD-2(1) GUNTUR 03 THE CIT (A)-GUNTUR 04 THE CIT-GUNTUR 05 THE DR, ITAT, VISAKHAPATNAM 06 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM