THE ITO, WARD - 2(4), Vijayawada V. Sri Muppalla Srinadha Rao, Vijayawada

ITA 288/VIZ/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0234 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-10-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 02-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M K SETHI
• Keywords: Corroborative evidences; Revised return
• Section: 143(3)

Judgement Text

ITA NO.288/VIZAG/2013 & CO 93/VIZAG/2013 MUPPALLA SRINADHA RAO, VIJAYAWADA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM . . . . , ,, , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER . .. ./ // / I.T.A.NO.288/VIZAG/2013 ( / ASSESSMENT YEAR : 2007(08) ITO WARD - 2(4) VIJAYAWADA VS. MUPPALLA SRINADHA RAO VIJAYAWADA [ PAN: AFRPM 7079R] (- - - - / APPELLANT) (./- ./- ./- ./- / RESPONDENT ) C.O. NO.93/VIZAG/2013 (ARISING OUT OF I.T.A.NO.288/VIZAG/2013) ( / ASSESSMENT YEAR : 2007-08 ) MUPPALLA SRINADHA RAO VIJAYAWADA VS. ITO WARD - 2(4) VIJAYAWADA [ PAN: AFRPM 7079R ] (- - - - / APPELLANT) (./- ./- ./- ./- / RESPONDENT ) - 0 / APPELLANT BY : SHRI G.V.N. HARI, AR ./- 0 / RESPONDENT BY : SHRI M.K. SETHI, DR 0 5 / DATE OF HEARING : 26.10.2015 0 5 / DATE OF PRONOUNCEMENT : 29.10.2015 ITA NO.288/VIZAG/2013 & CO 93/VIZAG/2013 MUPPALLA SRINADHA RAO, VIJAYAWADA 2 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL IS FILED BY THE REVENUE AND CROSS APPE AL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), VIJAYAWAD A DATED 6.2.2013 FOR THE ASSESSMENT YEAR 2007-08. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS AN INDIVIDU AL CARRYING ON HIS BUSINESS OF DISTRIBUTION OF FILMS IN THE NAME OF M/ S. BHARATI PICTURES AND EXHIBITION OF FILMS IN THE NAME OF M/S. BHARATI ENT ERPRISES AT VIJAYAWADA. 3. THE ASSESSEE FILED RETURN OF INCOME BY ADMITTING THE LOSS. THEREAFTER, THE SURVEY WAS CONDUCTED AND SUBSEQUENT TO SURVEY OPERATION, THE ASSESSEE FILED REVISED RETURN BY ADM ITTING LOSS OF RETURN OF RS.13,88,740/-. THE ASSESSING OFFICER, AFTER DUE P ROCESS, ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCOME-TAX ACT, 196 1 (HEREINAFTER CALLED AS ACT) AND ASSESSED THE INCOME AT RS.13,3 8,310/-. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE AO HAS OB SERVED THAT A DD OF RS.5 LAKHS WAS FOUND IN THE COURSE OF SURVEY IN RESPECT OF M/S. MEGA SUPER GOOD FILMS. THIS AMOUNT WAS NOT ACCOUNTED BY THE ASSESSEE. FURTHER, HE COULD NOT PRODUCE ANY EVIDENCE TO PROVE THAT JYOTI MAHAL THEATRE HAD ANY TRANSACTION WITH THE PRODUCER OF M/ S. MEGA SUPER GOOD ITA NO.288/VIZAG/2013 & CO 93/VIZAG/2013 MUPPALLA SRINADHA RAO, VIJAYAWADA 3 FILMS AND NO SUPPORTING EVIDENCE FROM M/S. MEGA SUP ER FILMS ALSO WAS FURNISHED. ACCORDINGLY ADDITION WAS MADE. 4. ON APPEAL, THE LD. CIT(A) BY CONSIDERING THE CON FIRMATION FILED BY THE ASSESSEE FROM JYOTI MAHAL, VIJAYAWADA DELETED T HE ADDITION MADE BY THE ASSESSING OFFICER I FIND THAT THE ASSESSEE HAS NOT PRODUCED A COPY OF CONFIRMATION FROM JYOTI MAHAL, VIJAYAWADA BEFORE THE A.O. THEREFORE, I FIND THAT THERE IS A VIOLATION OF RULE 46A AND I SET ASIDE THE ORDER PASSED BY THE CIT(A) AND REMIT THE MATTER BACK TO T HE FILE OF THE A.O. TO CONSIDER THE ISSUE AFRESH IN ACCORDANCE WITH LAW. ACCORDINGLY, THIS GROUND OF APPEAL RAISED BY THE REVENUE IS ALLOWED F OR STATISTICAL PURPOSES. 5. SO FAR AS ADDITION IN RESPECT OF RS.5,59,700/-, THE AO HAS OBSERVED THAT THE TOTAL VALUE OF DDS PERTAINING TO PAGE 31 D ATED 27.3.2007 IS RS.4,59,850/- AND DATED 24.3.2007 IS FOR RS.49,925/ -. THUS THE TOTAL DDS EVIDENCED FROM THAT PAGE AMOUNT TO RS.5,09,775/ -. AS PER PAGE 30, ONE MORE DD DATED 24.3.2007 WAS OBTAINED IN FAV OUR OF G.V.K. FILM CORPORATION. THE ASSESSEE EXPLAINED THIS AMOUNT OF RS.1,59,850/- WAS IN FAVOUR OF G.V.K. CORPORATION AND RS.3 LAKHS IN F AVOUR OF M/S. BHARATI ENTERPRISES. THESE PAYMENTS RELATING TO G.V.K. COR PORATION FOR RS.1,59,850/- ARE STATED TO BE NOT RELATED TO HIM A ND RELATED TO THIRD ITA NO.288/VIZAG/2013 & CO 93/VIZAG/2013 MUPPALLA SRINADHA RAO, VIJAYAWADA 4 PARTIES WHO LEFT THESE SLIPS IN THE ASSESSEES OFFI CE. THE BALANCE RS.3 LAKHS STATED TO BE RECEIVED BY THE ASSESSEE AS IF A CCOUNTED IN THE BOOKS OF ACCOUNTS. HOWEVER, THE ASSESSEE COULD NOT SHOW ANY EVIDENCE TO PROVE THAT THE ABOVE SUM OF RS.3 LAKHS WAS ACCOUNTE D FOR IN HIS BOOKS OF ACCOUNTS. FURTHER, IN WRITTEN STATEMENT FILED O N 30.12.2009 THE ASSESSEE ADMITTED RS.60,000/- AS OFFERED FOR ASSESS MENT WITH A VIEW TO AVOID LITIGATION. M/S. G.V.K. FILM CORPORATION IS THE PRODUCER OF MOVIE PANDEM KODI/POGARU SINCE PART OF THE PAYMENT WAS RE CEIVED BY ASSESSEE AS HIS SHARE FOR THE REASON DISCUSSED IN P ARAGRAPH 2 THE ENTIRE AMOUNT PAID TO THE ABOVE PRODUCER IS TO BE TREATED AS IN THE HANDS OF THE ASSESSEE ALONE. ACCORDINGLY, THE AMOUNT RECEIV ED RS.5,59,700/- IS TREATED AS AMOUNT RECEIVED BY ASSESSEE TOWARDS DIST RIBUTION OF MOVIES PRODUCED BY M/S. G.V.K. FILM CORPORATION. ON APPEA L, THE LD. CIT(A) DELETED THE ADDITION MADE BY THE AO BASED ON THE CO NFIRMATION LETTER FILED BY THE ASSESSEE FIRM G.V.K. FILM CORPORATION. NO SUCH CONFIRMATION WAS FILED BEFORE THE ASSESSING OFFICER BY THE ASSES SEE. I FIND THAT THERE IS A VIOLATION OF RULE 46A AND HENCE I SET ASIDE TH E ORDER PASSED BY THE CIT(A) AND REMIT THE MATTER BACK TO THE AO TO CONSI DER THE ISSUE AFRESH IN ACCORDANCE WITH LAW. THIS GROUND OF APPEAL RAIS ED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.288/VIZAG/2013 & CO 93/VIZAG/2013 MUPPALLA SRINADHA RAO, VIJAYAWADA 5 6. IN SO FAR AS ADDITION IN RESPECT OF RS.5,40,225/ - IS CONCERNED, THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE THE SOURCE FOR INCURRING EXPENDITURE TO THE TUNE OF RS.2,40,225/- AND ALSO TO THE TUNE O F RS.3 LAKHS. ON APPEAL THE LD. CIT(A) DELETED THE ADDITION MADE BY THE AO BY OBSERVING THAT THE ASSESSEE FILED THE ACCOUNT COPIES FROM THE IMPOUNDED BOOKS OF ACCOUNTS SHOWING THE EVIDENCE THAT THESE TRANSACTIO NS WERE ACCOUNTED FOR, IN THE BOOKS OF ACCOUNTS AND EXPLAINED. SINCE THE TRANSACTION OF PAYMENTS WERE EXPLAINED AND RECORDED IN THE BOOKS O F ACCOUNTS, AO IS DIRECTED TO DELETE THE SAME. 7. I FIND THAT THE ASSESSEE IS NOT ABLE TO EXPLAIN BEFORE THE AO AND ALSO NOT ABLE TO POINT OUT THAT THESE TRANSACTIONS ARE RECORDED. THOUGH THE CIT(A) CONSIDERED THE ACCOUNT COPIES FROM THE B OOKS, DELETED THE ADDITION, I FIND THAT THESE ACCOUNT COPIES NEED TO BE VERIFIED BY THE ASSESSING OFFICER FOR THE REASON THAT THE ASSESSING OFFICER GAVE A FINDING THAT THESE TRANSACTIONS ARE NOT RECORDED. HOWEVER, CIT(A) SAYS THAT THESE TRANSACTIONS ARE RECORDED. UNDER THESE CIRCU MSTANCES, I REMIT THIS ISSUE BACK TO THE AO TO EXAMINE AFRESH IN ACCORDANC E WITH LAW. THIS APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTI CAL PURPOSES. 8. SO FAR AS CROSS APPEAL FILED BY THE ASSESSEE TO SUPPORT THE CIT(A)S ORDER, I HAVE ALREADY CONSIDERED THE ORDER OF THE L D. CIT(A) AND IN VIEW OF OUR ORDER IN THE ORIGINAL APPEAL, NO SEPARATE OR DERS ARE REQUIRED ITA NO.288/VIZAG/2013 & CO 93/VIZAG/2013 MUPPALLA SRINADHA RAO, VIJAYAWADA 6 TO BE PASSED ON THE CROSS APPEAL FILED BY THE ASSES SEE. ACCORDINGLY, CROSS APPEAL FILED BY THE ASSESSEE IS DISMISSED. 9. IN THE RESULT, APPEAL FILED BY THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSES AND THE CROSS APPEAL FILED BY THE ASSESSEE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 29 TH OCT15. SD/- ( (( ( . .. . ) )) ) ( (( ( V. DURGA RAO ) )) ) / // / JUDICIAL MEMBER /VISAKHAPATNAM: 8 / DATED : 29.10.2015 VG/SPS 0 . 9 / COPY OF THE ORDER FORWARDED TO :( 1. - / THE APPELLANT THE ITO, WARD-2(4), VIJAYAWADA 2. ./- / THE RESPONDENT SHRI MUPPALLA SRINADHA RAO, PROP: BHARATI PICTURES & BHARATI ENTERPRISES, D.NO.26-3-163, UPSTAIRS, NRP R OAD, GANDHINAGAR, VIJAYAWADA 3. : () / THE CIT, VIJAYAWADA 4. : () / THE CIT(A), VIJAYAWADA 5. ., , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE / BY ORDER // TRUE COPY // @A ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM