Dr P Karunakara Rao, Visakhapatnam V. ITO, Visakhapatnam

ITA 29/VIZ/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0126 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 15-01-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D S SUNDAR SINGH
• Keywords: Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM (SMC) BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.29/VIZAG/2009 ASSESSMENT YEAR : 2006-07 DR. P. KARUNAKARA RAO, VISAKHAPATNAM ITO, WARD 3(2), VISAKHAPATNAM (APPELLANT) VS. (RESPONDENT) PAN NO.ABZPP 4756A APPELLANT BY: NONE RESPONDENT BY: SHRI D.S. SUNDAR SINGH, DR ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF THE CIT(A) ON A SOLITARY GROUND THAT CIT(A) HAS ERRED I N CONFIRMING THE ESTIMATION OF RS.2,94,000/- MADE BY THE A.O. TO THE EXTENT OF NET INCOME @ 75% OF THE GROSS PROVISIONAL RECEIPT AS AGAINST THE SCRUTINY NORMS 20% OF THE GROSS RECEIPTS WITHOUT TAKING INTO CONSIDERATIO N THE CIRCUMSTANTIAL EVIDENCE. 2. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND DOCUMENTS PLACED ON RECOR D. 3. THE FACTS IN BRIEF WITH REGARD TO THE IMPUGNED I SSUE ARE THAT THE ASSESSEE IS AN ENGINEER WHO TOOK VOLUNTARY RETIREME NT FROM HINDUSTAN SHIPYARD LIMITED AND THEREAFTER STARTED WORKING AS AN ARBITRATOR FOR VARIOUS ORGANISATIONS. FOR THE IMPUGNED ASSESSMENT YEAR, T HE RETURN OF INCOME WAS FILED DISCLOSING THE TOTAL INCOME OF RS.1,83,292/- FROM ALL THE SOURCES. IN THE RETURN THE ASSESSEE DISCLOSED AN INCOME OF RS.71,55 2/- AS INCOME FROM PROFESSION AS AGAINST THE TOTAL PROFESSIONAL RECEIP T OF RS.3,92,000/-. THE DIFFERENTIAL AMOUNT WAS CLAIMED AS AN EXPENDITURE. THE ASSESSEE WAS ASKED TO FURNISH THE NECESSARY EVIDENCE IN SUPPORT OF THE SAID EXPENDITURE. BUT THE ASSESSEE COULD NOT PLACE ANY EVIDENCE IN THIS REGAR D AND THE A.O. REJECTED THE BOOK RESULTS AND ESTIMATED HIS PROFESSIONAL INC OME AT RS.2,94,000/- AFTER 2 ALLOWING THE EXPENDITURE AT 25% OF THE TOTAL RECEIP T. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WITH THE SUBMISSION THA T THE ASSESSEE IS A CONSULTING ARBITRATOR AND THE EXPENDITURE INCURRED ONLY FOR THE PURPOSE OF THE PROFESSION AS HE HAS NO OTHER ACTIVITY. ASSESSEE MAINTAINED ACCOUNTS IN DETAILED MANNER FOR EVERY TRAVEL HE UNDERTOOK AND E VERY EXPENDITURE HE INCURRED IN CONNECTION WITH HIS PROFESSION. HOWEVE R, THE SUPPORTING EVIDENCE WAS NOT KEPT BY HIM AS HE WAS UNDER THE BONAFIDE IM PRESSION THAT THEY MAY NOT BE REQUIRED FOR FURTHER VERIFICATION. THE CIT( A) RE-EXAMINED THE ISSUE BUT WAS NOT CONVINCED WITH THE EXPLANATIONS OF THE ASSE SSEES AND CONFIRMED THE ADDITIONS AFTER MAKING THE FOLLOWING OBSERVATIONS: I HAVE CAREFULLY EXAMINED THE FACTS OF THE CASE AN D THE SUBMISSIONS MADE ON BEHALF OF THE APPELLANT. AS AG AINST A PROFESSIONAL RECEIPT OF RS.3,92,000/-, THE APPELLAN T ADMITTED AN INCOME OF RS.71,552/- WHICH MEANS AN AMOUNT OF RS.2 ,20,448/- WAS CLAIMED AS AN EXPENDITURE. THERE IS NO DISPUTE ABOUT THE FACT THAT THE ONUS WAS ON THE APPELLANT TO PROVE THAT TH E EXPENDITURE INCURRED AND CLAIMED AS DEDUCTION WAS WHOLLY AND EX CLUSIVELY FOR THE PURPOSES OF PROFESSION BEING CARRIED ON BY HIM. HOWEVER, AS IS EVIDENT FROM THE ASSESSMENT ORDER, THE APPELLANT FA ILED TO DISCHARGE THE SAID ONUS. THE ASSESSING OFFICER GOT THE ENQUIRIES CONDUCTED THROUGH THE INSPECTOR AND THE APPELLANT A DMITTED THAT SUPPORTING BILLS/VOUCHERS IN SUPPORT OF THE EXPENDI TURES CLAIMED WERE NOT AVAILABLE WITH HIM. UNDER THESE CIRCUMSTA NCES, THE CLAIM OF EXPENDITURE WAS NOT VERIFIABLE. FURTHER IT IS N OTED THAT THE MAJOR EXPENDITURE CLAIMED BY THE APPELLANT PERTAIN TO TRA VELLING. IN THIS CONTEXT, THE APPELLANT ALSO FAILED TO FURNISH THE C OPIES OF THE ORDERS BY VIRTUE OF WHICH HE ACTED AS AN ARBITRATOR FOR DI FFERENT ORGANISATIONS. NORMALLY, ORGANISATIONS APPOINTING ARBITRATORS BEAR THE COST OF TRAVELLING OF SUCH ARBITRATORS. IN THE ABSENCE OF THE APPOINTMENT LETTER, THIS ASPECT ALSO COULD NOT BE E XAMINED. THE FACT THAT THE APPELLANT DID NOT MAINTAIN A SEPARATE OFFICE AND HIS RESIDENCE WAS ONLY USED FOR THE PURPOSES OF HIS OFF ICE, TOGETHER WITH THE FACT THAT HE DID NOT EMPLOY ANY OFFICE STA FF TO ASSIST HIM CLEARLY INDICATE THAT THE EXPENDITURES CLAIMED TO H AVE BEEN INCURRED BY THE APPELLANT WAS EXCESSIVE AS WELL AS UNVERIFIABLE. UNDER THESE CIRCUMSTANCES, THE ASSESSING OFFICER IS JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNTS AND ESTIMATING THE PROFESSIONAL INCOME. THE ESTIMATE OF THE ASSESSING OFFICER OF T HE PROFESSIONAL INCOME IS ALSO REASONABLE. HENCE, THERE IS NO CAUS E FOR INTERFERENCE IN THE ORDER PASSED BY THE ASSESSING O FFICER. 3 4. NOW THE ASSESSEE IS BEFORE ME AND REITERATED IT S CONTENTIONS. DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSE SSEE WAS ASKED TO FURNISH THE EVIDENCE OF THE EXPENDITURES CLAIMED TO HAVE BE EN INCURRED BY THE ASSESSEES FOR HIS PROFESSION. BUT THE ASSESSEE COU LD NOT PLACE ANY EVIDENCE EXCEPT THE ORAL SUBMISSIONS. I HOWEVER, EXAMINED T HE ORDER OF THE CIT(A) BUT FIND NO INFIRMITY THEREIN. ACCORDINGLY, I CONF IRM HIS ORDER. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON 14.08.2009 SD/- (SUNIL KUMAR YADAV) JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 14 TH AUGUST, 2009 COPY TO 1 DR. P. KARUNAKARA RAO, FLAT NO.301, D.NO.9-28-7/1 2, INDIRA RESIDENCY, BALAJINAGAR, VISAKHAPATNAM-530 003. 2 THE ITO, WARD-3(2), RANGE-3, VISAKHAPATNAM 3 THE CIT, VISAKHAPATNAM 4 THE CIT(A)-I, VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM