THE ITO, WARD - 2(3), Vijayawada V. Smt. Ede Vijaya lakshmi, Vijayawada

ITA 284/VIZ/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0164 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 02-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A NARAYANA RAO
• Keywords: Unexplained cash credit
• Section: 142(1); 133(6); 68

Judgement Text

ITA NO.284/VIZAG/2013 SMT. EDE VIJAYA LAKSHMI, 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.284/VIZAG/2013 ( / ASSESSMENT YEAR : 2009-10 ) ITO WARD - 2(3) VIJAYAWADA VS. SMT. EDE VIJAYA LAKSHMI VIJAYAWADA [ PAN : AAFPE2727D] ( & & & & / APPELLANT) ( '(& '(& '(& '(& / RESPONDENT ) C.O. 91/VIZAG/2013 (ARISING OUT OF I.T.A.NO.284/VIZAG/2013) ( / ASSESSMENT YEAR : 2009-10 ) SMT. EDE VIJAYA LAKSHMI VIJAYAWADA VS. ITO WARD - 2(3) VIJAYAWADA ( & & & & / APPELLANT) ( '(& '(& '(& '(& / RESPONDENT ) & ) / APPELLANT BY : SHRI A. NARAYANA RAO, DR '(& ) / RESPONDENT BY : SHRI G .V.N. HARI, AR ) - / DATE OF HEARING : 17.11.2015 ) - / DATE OF PRONOUNCEMENT : 11/12/2015 ITA NO.284/VIZAG/2013 SMT. EDE VIJAYA LAKSHMI, VIJAYAWADA 2 / O R D E R PER BENCH: THIS APPEAL FILED BY THE REVENUE AND CROSS OBJECTIO N FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT(A), VIJAYAWADA DATED 8.2.2013 FOR THE ASSESSMENT YEAR 2009-10. SINCE, TH E ISSUE INVOLVED IN THESE APPEALS IS COMMON, THEY ARE CLUBBED, HEARD TO GETHER AND DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAK E OF CONVENIENCE. 2. THE BRIEF FACTS OF THE CASE, IS THAT THE ASSESSE E IS AN INDIVIDUAL FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 29.7.2009, DECLARING A TOTAL INCOME OF RS.72,740/-. THE ASSESSEE IS DERIVING INCOME FROM RUNNING A SCHOOL AND ALSO INCO ME FROM HOUSE PROPERTY. THE RETURN WAS PROCESSED U/S 143(1) OF T HE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) ON 7.5.2010. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY NOTI CE U/S 143(2) & 142(1) OF THE ACT WERE ISSUED. IN RESPONSE TO NOTI CES, THE ASSESSEES AUTHORIZED REPRESENTATIVE, APPEARED AND FURNISHED B OOKS OF ACCOUNTS AND BILLS & VOUCHERS ALONG WITH OTHER DETAILS AS RE QUIRED BY THE ASSESSING OFFICER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. AFTER VERIFICATION OF BILL BOOKS IN RESPECT FE ES COLLECTIONS FROM SCHOOL, NOTICED THAT AN AMOUNT OF RS.18,96,170/- WA S NOT REFLECTED IN ITA NO.284/VIZAG/2013 SMT. EDE VIJAYA LAKSHMI, VIJAYAWADA 3 THE BOOKS OF ACCOUNTS MAINTAINED. DURING THE COURS E OF HEARING, THE ABOVE DISCREPANCY WAS BROUGHT TO THE NOTICE OF THE AUTHORIZED REPRESENTATIVE AND ASKED TO EXPLAIN AND RECONCILE T HE DIFFERENCE. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE SUBMITTED THAT SHE IS FOLLOWING THE CASH SYSTEM OF ACCOUNTING FOR RECOGNIZING THE I NCOME FROM FEES COLLECTIONS FROM THE SCHOOL. THEREFORE, ONLY FEES RECEIVED DURING THE FINANCIAL YEAR IS RECOGNIZED AS INCOME IN THE BOOKS OF ACCOUNTS. THE ASSESSEE FURTHER SUBMITTED THAT IT IS UNFAIR TO COM PUTE THE GROSS RECEIPTS FROM SCHOOL, ON THE BASIS OF TOTAL STRENGTH MULTIPL IED BY FEES STRUCTURE, AS IT IS NOT POSSIBLE TO COLLECT 100% FEES FROM THE STUDENTS. THE ASSESSEE FURTHER CONTENDED THAT OUT OF THE TOTAL FE ES COLLECTIONS OF THE CURRENT YEAR, SOME PORTION OF AMOUNT REPRESENTS FEE S FOR THE EARLIER YEARS AND THE OUTSTANDING FEES OF THE CURRENT YEAR HAS BEEN COLLECTED AND RECOGNIZED IN SUBSEQUENT YEARS AND FURNISHED RE LEVANT DETAILS. THEREFORE, CALCULATING THE FEES COLLECTIONS ON THE BASIS OF TOTAL STRENGTH MULTIPLIED BY FEES STRUCTURE CANNOT BE ADOPTED TO Q UANTIFY THE INCOME RECEIVABLE FOR THE YEAR. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, THE A.O. POINTED OUT THAT THE ASSESSEE IS MADE PROV ISION FOR AUDIT FEES PAYABLE, THEREFORE WAS OF THE OPINION THAT THE ASSE SSE IS FOLLOWING MIXED SYSTEM OF ACCOUNTING, WHEREIN SHE IS FOLLOWING CASH SYSTEM IN RESPECT OF INCOMES AND MERCANTILE SYSTEM OF ACCOUNTING FOR EXP ENDITURES. THE ITA NO.284/VIZAG/2013 SMT. EDE VIJAYA LAKSHMI, VIJAYAWADA 4 ASSESSEE CONTENDED THAT SHE IS FOLLOWING ONLY CASH SYSTEM OF ACCOUNTING FOR ALL INCOMES AND EXPENDITURE. THE PROVISION OF AUDIT FEES PAYABLE IS ONLY A MISTAKE IN PREPARATION OF FINANCIAL STATEMEN TS BY THE PROFESSIONAL WHO PREPARED THE ACCOUNTS. THEREFORE, THIS CANNOT BE THE BASIS FOR COMING TO THE CONCLUSION THAT THE ASSESSEE IS FOLLO WING MIXED SYSTEM OF ACCOUNTING. HOWEVER, THE A.O. DID NOT SATISFIED WI TH THE ASSESSEES EXPLANATIONS, HELD THAT THE ASSESSEE SHOULD FOLLOW MERCANTILE SYSTEM OF ACCOUNTING FOR INCOME AND EXPENDITURES, THEREFORE, FEES RECEIVABLE FROM THE STUDENTS SHOULD BE RECOGNIZED AS INCOME OF THE CURRENT YEAR BY FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING. THE REFORE, CALCULATED THE FEES RECEIVABLE FROM THE STUDENTS BY TAKING IN TO A CCOUNT TOTAL STRENGTH MULTIPLIED BY FEES STRUCTURE AND MADE ADDITIONS OF RS.18,96,170/- TO THE RETURNED INCOME. 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). BEFORE CIT(A), THE ASSES SEE SUBMITTED THAT THE A.O., MADE AN ARITHMETICAL CALCULATION OF GROSS RECEIPTS FROM SCHOOL FEES, BASED ON THE STRENGTH OF THE STUDENT MULTIPLI ED BY FEES STRUCTURE. THE GROSS RECEIPTS SO CALCULATED ARITHMETICALLY, WE RE DEEMED BY THE ASSESSING OFFICER AS GROSS RECEIPTS UNDER MERCANTIL E SYSTEM OF ACCOUNTING. THE A.O. MADE ADDITION TOWARDS DIFFERE NCE BETWEEN ITA NO.284/VIZAG/2013 SMT. EDE VIJAYA LAKSHMI, VIJAYAWADA 5 ARITHMETICALLY CALCULATED GROSS RECEIPTS AND ACTUAL RECEIPTS OF FEES ACCOUNTED BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS. THE ASSESSEE FURTHER SUBMITTED THAT THE A.O. DID NOT FIND ANY PO SITIVE MATERIAL THAT THE ASSESSEE HAS RECEIVED THIS AMOUNT OF FEES FROM THE STUDENTS OR HE DID NOT HAVE ANY PROOF, SAYING THAT THE SO CALLED F EES RECEIPTS IS ACCRUED TO THE ASSESSE, DURING THE YEAR UNDER CONSIDERATION . THE A.O. MADE ADDITION, SIMPLY ON SUSPICION AND SURMISES THAT THE APPELLANT OUGHT TO HAVE RECEIVED THE SAID AMOUNT BASED ON THE STRENGTH OF STUDENTS. THE CIT(A), AFTER CONSIDERING THE EXPLANATIONS FURNISHE D BY THE ASSESSE, HELD THAT THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOU NTING, CONSISTENTLY FROM PAST SEVERAL YEARS FOR ACCOUNTING THE FEES COL LECTION FROM SCHOOLS. THE A.O. IS NOT CORRECT IN ESTIMATING THE FEES BASE D ON THE TOTAL STRENGTH AND FEES STRUCTURE, THOUGH SHE IS FOLLOWING CASH SY STEM OF ACCOUNTING FROM PAST SEVERAL YEARS. THEREFORE, DELETED THE AD DITIONS MADE BY THE A.O. AGGRIEVED BY THE CIT(A) ORDER THE REVENUE IS IN APPEAL BEFORE US. 4. THE LD. D.R. SUBMITTED THAT THE CIT(A) WAS ERRED IN DELETING THE ADDITIONS MADE BY THE ASSESSING OFFICER, AS THE ASS ESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING WHICH IS EVIDENT FR OM THE FINANCIAL STATEMENTS FOR THE RELEVANT ASSESSMENT YEAR. THE D .R. FURTHER ARGUED THAT THE A.O. RIGHTLY OBSERVED THAT THE ASSESSEE HA S MADE FOR PROVISION ITA NO.284/VIZAG/2013 SMT. EDE VIJAYA LAKSHMI, VIJAYAWADA 6 FOR AUDIT FEES PAYABLE, THEREFORE, IT IS CERTAIN TH AT SHE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. THE D.R. FURTHER SUBMITTED THAT WHEN SHE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, T HE ASSESSEE NECESSARILY HAS TO ACCOUNT ALL THE INCOME ACCRUED D URING THE YEAR. THE ASSESSE HAD ACCOUNTED ALL EXPENDITURES ON ACCRUAL B ASIS, BUT FOLLOWED CASH SYSTEM FOR ACCOUNTING FEES RECEIVABLE FROM THE STUDENTS, WHICH IS CONTRARY TO THE ACCEPTED PRINCIPLES OF ACCOUNTING. THEREFORE, THE A.O. HAS RIGHTLY MADE THE ADDITION AND HIS ORDER SHOULD BE UPHELD. 5. ON THE OTHER HAND, THE A.R. OF THE ASSESSEE SUBM ITTED THAT THE CIT(A), RIGHTLY DELETED ADDITIONS, AS THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING CONSISTENTLY FROM EARLIER YEAR S. THE A.R. FURTHER SUBMITTED THAT THE ASSESSEE NEITHER RECEIVED THE SA ID AMOUNT FROM THE STUDENTS NOR IT IS ACCRUED DURING THE RELEVANT FINA NCIAL YEAR. THE A.R. FURTHER SUBMITTED THAT IN RESPECT OF FEES COLLECTIO NS FROM SCHOOL, ACCRUAL SYSTEM OF ACCOUNTING CANNOT BE FOLLOWED FOR THE REA SON THAT THERE IS NO GUARANTEE OF COLLECTING THE FEES FROM THE STUDENTS, AS SOMETIMES ASSESSEE MAY NOT BE ABLE TO COLLECT FULL FEES BECAU SE OF VARIOUS REASONS, THEREFORE, THE A.O. IS NOT RIGHT IN ESTIMATING THE FEES BASED ON NUMBER OF STUDENTS AND FEES STRUCTURE. THE ASSESSEE FURTH ER SUBMITTED THAT IT IS UNFAIR TO COMPUTE THE GROSS RECEIPTS FROM SCHOOL, O N THE BASIS OF TOTAL ITA NO.284/VIZAG/2013 SMT. EDE VIJAYA LAKSHMI, VIJAYAWADA 7 STRENGTH MULTIPLIED BY FEES STRUCTURE, AS IT IS NOT POSSIBLE TO COLLECT 100% FEES FROM THE STUDENTS. THEREFORE, REQUESTED TO UPHOLD THE CIT(A) ORDER. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MA TERIAL AVAILABLE ON RECORD. THE FACTUAL MATRIX OF THE CASE, IS THAT THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING IN RESPECT OF F EES COLLECTIONS FROM SCHOOL. THE A.O. OBSERVED THAT THE ASSESSEE IS FOL LOWING MIXED SYSTEM OF ACCOUNTING, WHEREIN SHE HAS FOLLOWED CASH SYSTEM IN RESPECT OF RECOGNIZING INCOME AND MERCANTILE SYSTEM OF ACCOUNT ING IN RESPECT OF BOOKING EXPENDITURE. TO COME TO THIS CONCLUSION, TH E A.O. DRAWN INFERENCE FROM THE FACT THAT THE ASSESSEE HAS MADE PROVISION FOR AUDIT FEES PAYABLE OF RS.5,000/- IN THE FINANCIAL YEAR UN DER CONSIDERATION. THE ASSESSEE CONTENTION IS THAT SHE IS FOLLOWING CA SH SYSTEM FROM PAST SEVERAL YEARS AND THE PROVISION OF AUDIT FEES IS ON LY A MISTAKE IN PREPARATION OF ACCOUNTS. THEREFORE, THIS CANNOT BE THE BASIS FOR ESTIMATING THE FEES FROM THE SCHOOL. WE FIND FORCE IN THE ARGUMENTS OF THE ASSESSE FOR THE REASON THAT THE A.O. DID NOT PO INTED OUT ANY DISCREPANCY IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. THE A.O. CALCULATED THE FEES RECEIVABLE FROM THE STUDEN TS, BASED ON THE TOTAL STRENGTH MULTIPLIED BY FEES STRUCTURE. IT IS A FAC T THAT FEES COLLECTIONS ITA NO.284/VIZAG/2013 SMT. EDE VIJAYA LAKSHMI, VIJAYAWADA 8 CANNOT BE COMPUTED BASED ON THE TOTAL STRENGTH MULT IPLIED BY THE FEES STRUCTURE, BECAUSE SOMETIMES IT IS NOT POSSIBLE TO COLLECT ALL THE FEES FROM ALL THE STUDENTS. WHAT IS TO BE SEEN IS WHETHE R THE COLLECTION HAS BEEN ACCOUNTED OR NOT. THE ASSESSEE CONTENDED THAT SHE HAD ACCOUNTED ALL THE FEES RECEIVED DURING THE YEAR. T HE REVENUE DID NOT CONTRAVENE THE ABOVE FACT, BY BRINGING ANY POSITIVE MATERIAL BEFORE US. THE ONLY CONTENTION RAISED BY THE D.R. IS THAT THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING IN RESPECT OF AUDIT FEES, THEREFORE, THE A.O. IS RIGHT IN ESTIMATING THE INCOME FROM SCHOOL BY APPLYING THE ESTIMATION OF FEES BASED ON TOTAL STRENGTH MULTIPLI ED BY THE FEES STRUCTURE. WE DO NOT AGREE WITH THE STAND TAKEN BY THE A.O., FOR THE REASON THAT THE ASSESSEE IS FOLLOWING CASH SYSTEM O F ACCOUNTING FROM PAST SEVERAL YEARS, WHICH WAS ACCEPTED BY THE DEPAR TMENT IN EARLIER ASSESSMENT YEARS. THEREFORE, ONCE, A PARTICULAR ME THOD OF ACCOUNTING IS ACCEPTED IN EARLIER YEARS, THEN, THE A.O. CANNOT DI STURB THE SAME IN THE YEAR UNDER CONSIDERATION, WHEN THERE IS NO CHANGE I N FACTS. 7. COMING TO THE OBSERVATION OF THE A.O., THAT THE ASSESSEE HAS MADE A PROVISION FOR AUDIT FEES PAYABLE IN THE FINA NCIAL STATEMENTS, THEREFORE SHE IS FOLLOWING MERCANTILE SYSTEM OF ACC OUNTING FOR EXPENDITURES. THE ASSESSEE CONTENDED THE PROVISION FOR AUDIT FEES ITA NO.284/VIZAG/2013 SMT. EDE VIJAYA LAKSHMI, VIJAYAWADA 9 PAYABLE IS ONLY A MISTAKE IN PRESENTATION OF FINANC IAL STATEMENTS, EXCEPT AUDIT FEES PAYABLE, NO OTHER EXPENDITURE IS ACCOUNT ED ON ACCRUAL BASIS. THEREFORE, BASED ON THE AUDIT FEES PAYABLE ONE CANN OT COME TO THE CONCLUSION THAT THE ASSESSEE IS FOLLOWING MERCANTIL E SYSTEM OF ACCOUNTING. WE FIND FORCE IN THE ARGUMENTS OF THE A SSESSE THAT EXCEPT AUDIT FEES PAYABLE, NO OTHER EXPENDITURE I.E. SALAR Y TO STAFF, ETC., IS ACCOUNTED ON ACCRUAL BASIS. THEREFORE, THE A.O. IS NOT CORRECT IN COMING TO THE CONCLUSION THAT THE ASSESSEE IS FOLLOWING ME RCANTILE SYSTEM OF ACCOUNTING. THEREFORE, IN OUR CONSIDERED OPINION, T HE ASSESSEE IS FOLLOWING THE CASH SYSTEM OF ACCOUNTING IN RESPECT OF INCOMES AND EXPENDITURES. THE A.O. IS NOT CORRECT IN ESTIMATING THE FEES BASED ON THE TOTAL STRENGTH MULTIPLIED BY THE FEES STRUCTURE BY HOLDING THAT THE ASSESSE OUGHT TO HAVE RECEIVED THE AMOUNT AND ACCOU NTED ON ACCRUAL BASIS. THE CIT(A), RIGHTLY DELETED THE ADDITIONS MA DE BY THE A.O. AFTER CONSIDERING THE EXPLANATIONS FURNISHED BY THE ASSES SEE. THEREFORE, WE INCLINED TO UPHELD THE ORDER OF THE CIT(A) AND DIRE CT THE A.O. TO DELETE THE ADDITIONS. 8. THE NEXT ISSUE CAME UP FOR OUR CONSIDERATION, IS WHETHER CIT(A) IS RIGHT IN DELETING THE ADDITIONS TOWARDS UNEXPLAINED CASH CREDITS BEING LOANS AND ADVANCES AND CREDIT IN CAPITAL ACCOUNT. THE A.R. SUBMITTED ITA NO.284/VIZAG/2013 SMT. EDE VIJAYA LAKSHMI, VIJAYAWADA 10 THAT THE ASSESSEE HAS FURNISHED DETAILS OF NAMES AN D ADDRESSES OF THE CREDITORS ALONG WITH CONFIRMATION LETTERS. THE A.O . MADE THE ADDITIONS SOLELY ON THE GROUND THAT TWO CREDITORS, OUT OF THE FOUR CREDITORS DID NOT APPEAR BEFORE HIM FOR THE SUMMONS ISSUED U/S 133(6) OF THE ACT, THEREFORE, HELD THAT THE CREDITORS ARE NOT GENUINE. ON APPEAL, THE CIT(A), DELETED THE ADDITIONS. 9. THE LD. D.R. SUBMITTED THAT THE CREDITORS FAILED TO APPEAR BEFORE THE A.O. IN RESPONSE TO SUMMONS ISSUED U/S 133(6) O F THE ACT, THEREFORE, THE ASSESSEE HAS FAILED TO PROVE THE INI TIAL BURDEN CAST UPON HER, BY PROVING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE CREDITORS. THEREFORE, THE A.O. HAS RIGHTLY MADE TH E ADDITIONS U/S 68 OF THE ACT. THE D.R. FURTHER SUBMITTED THAT IN RESPECT OF CREDITS IN CAPITAL ACCOUNT, THE ASSESSEE DID NOT EXPLAIN THE CREDITS B EFORE THE A.O., BUT THE CIT(A) DELETED THE ADDITIONS MERELY ON THE BASI S OF EXPLANATIONS FURNISHED BY THE ASSESSEE WITHOUT ANY MATERIAL EVID ENCES, THEREFORE, REQUESTED TO UPHOLD THE ASSESSMENT ORDER. ON THE OT HER HAND, THE LD. A.R. SUPPORTED THE ORDER OF CIT(A). 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIALS AVAILABLE ON RECORD. THE A.O. MADE THE ADDITIONS T OWARDS UNSECURED LOANS FROM TWO CREDITORS AMOUNTING RS.1,20,000/- AN D ALSO ADDITION OF ITA NO.284/VIZAG/2013 SMT. EDE VIJAYA LAKSHMI, VIJAYAWADA 11 RS.64,632/- TOWARDS CREDITS IN CAPITAL ACCOUNT. THE ASSESSEES CONTENTION IS THAT SHE HAS ACCEPTED LOAN FROM TWO P ERSONS AND FILED THE NAMES AND ADDRESSES OF THE CREDITORS ALONG WITH CON FIRMATION LETTERS BEFORE THE ASSESSING OFFICER. THE ASSESSEE FURTHER SUBMITTED THAT IN RESPECT OF CREDITS IN CAPITAL ACCOUNT, SHE IS HAVIN G RENTAL INCOME FROM PROPERTY, WHICH IS THE SOURCE FOR CREDITS IN THE CA PITAL ACCOUNT. WE HAVE EXAMINED THE SUBMISSIONS MADE BY THE ASSESSEE AND F IND THAT THE ASSESSEE HAS FURNISHED CONFIRMATION LETTERS OBTAINE D FROM THE CREDITORS BEFORE THE A.O. THE A.O. MADE THE ADDITION MERELY ON THE GROUND THAT TWO CREDITORS DID NOT APPEAR BEFORE HIM FOR THE SUM MONS ISSUED U/S 133(6) OF THE ACT. WE DO NOT AGREE WITH THE STAND T AKEN BY THE A.O., FOR THE REASON THAT ONCE THE ASSESSEE DISCHARGED HE R INITIAL BURDEN CAST UPON HER BY FILING CONFIRMATION LETTERS FROM THE PA RTIES, THE ONUS SHIFTS TO THE A.O. AND THE A.O. IS AT LIBERTY TO PROCEED I N ACCORDANCE WITH LAW. IN THIS CASE, THE A.O. ISSUED SUMMONS TO THE CREDIT ORS, BUT THE CREDITORS DID NOT APPEAR BEFORE THE A.O. THEREFORE, WHEN INI TIAL BURDEN IS DISCHARGED BY FILING THE CONFIRMATION LETTERS, THE A.O. CANNOT HOLD ASSESSE RESPONSIBLE FOR NON-APPEARANCE OF CREDITORS AND FOR THAT REASON THE CREDITORS CANNOT BE CONSIDERED AS BOGUS AND ALS O IT IS NOT A CONCLUSIVE PROOF FOR COMING TO THE CONCLUSION THAT THE ASSESSEE DID NOT DISCHARGE THE INITIAL BURDEN CAST UPON HER. IN OUR OPINION, THE ASSESSE ITA NO.284/VIZAG/2013 SMT. EDE VIJAYA LAKSHMI, VIJAYAWADA 12 HAS DISCHARGED THE BURDEN CAST UPON HER. ONCE, SHE DISCHARGED INITIAL BURDEN, ADDITION CANNOT BE MADE U/S 68. AS FAR AS THE CREDIT IN CAPITAL ACCOUNT IS CONCERNED, THE ASSESSEE CATEGORICALLY ST ATED THAT THE CREDIT IS MADE OUT OF THE RENTAL INCOME RECEIVED FROM THE PRO PERTIES. WE HAVE EXAMINED THE ASSESSMENT ORDERS AND FIND THAT THE A. O. HAS MADE ADDITIONS TOWARDS RENTAL INCOME DURING THE YEAR UND ER CONSIDERATION. THEREFORE, WE ARE OF THE OPINION THAT THE ADDITIONA L INCOME OFFERED UNDER THE HEAD INCOME FROM HOUSE PROPERTY SHOULD BE TELESCOPED AGAINST THE CREDITS APPEARED IN THE CAPITAL ACCOUNT , BUT THE A.O. FAILED TO TELESCOPE THE CREDITS AGAINST THE RENTAL INCOME. TH E ADDITIONAL INCOME OFFERED UNDER THE HEAD INCOME FROM OTHER SOURCES WO ULD TAKE CARE THE CREDITS IN CAPITAL ACCOUNT, THEREFORE, SEPARATE ADD ITION IS UNWARRANTED. THE CIT(A), RIGHTLY DELETED THE ADDITIONS TOWARDS U NSECURED LOANS AND CREDITS APPEARING IN THE CAPITAL ACCOUNT. WE DO NOT FIND ANY ERROR OR INFIRMITY IN THE CIT(A) ORDER. THEREFORE, WE INCLI NED TO UPHELD THE ORDER OF THE CIT(A) AND DELETE THE ADDITIONS MADE BY THE ASSESSING OFFICER. 11. THE CROSS OBJECTION FILED BY THE ASSESSEE IS ON LY SUPPORTING THE CIT(A) ORDER. THEREFORE, FOR THE REASON STATED IN THE PRECEDING PARAGRAPHS, WE DISMISS THE C.O. FILED BY THE ASSESS EE. ITA NO.284/VIZAG/2013 SMT. EDE VIJAYA LAKSHMI, VIJAYAWADA 13 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED AND C.O. FILED BY THE ASSESSEE IS ALSO DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11 TH DEC15. SD/- SD/- ( . ) ( . . . . ) ( (( ( V. DURGA RAO ) )) ) ( G. MANJUNATHA) / // / JUDICIAL MEMBER / // / ACCOUNTANT MEMBER /VISAKHAPATNAM: 3 / DATED : 11/12/2015 VG/SPS ) ' 4 / COPY OF THE ORDER FORWARDED TO :- 1. & / THE APPELLANT THE ITO WARD-2(3), VIJAYAWADA 2. '(& / THE RESPONDENT SMT. EDE VIJAYA LAKSHMI, 52-1-3/1, VETERINARY COLON Y, VIJAYAWADA. 3. 5 / THE CIT, VIJAYAWADA 4. 5 () / THE CIT (A), VIJAYAWADA 5. ' , , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE / BY ORDER // TRUE COPY // 9: ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM ITA NO.284/VIZAG/2013 SMT. EDE VIJAYA LAKSHMI, VIJAYAWADA 14 SL. NO. DESCRIPTION DATE INITIALS 1. DATE OF DICTATION BY THE AUTHOR SR.PS 2. DRAFT PLACED BEFORE THE DICTATING MEMBER SR.PS 3. DRAFT PLACED BEFORE THE SECOND MEMBER SR. PS 4. DRAFT APPROVED BY THE SECOND MEMBER SR. PS 5. DATE OF APPROVED ORDER COMES TO THE SR. PS SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER SR. PS 7. DATE OF FILE SENT TO THE BENCH CLERK SR. PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK HD. C LK 9. DATE OF DISPATCH OF ORDER SR. PS