Sri K Krishna Reddy, Guntur, Visakhapatnam V. The ACIT Circle- 1(1), Guntur

ITA 294/VIZ/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50146 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-02-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 18-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J SIRI KUMAR
• Keywords: Onus to prove
• Section: 68

Judgement Text

ITA NOS 292 TO 294 OF 2010 KYPU NAGAMANI AND OTHERS GUNTUR PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.292/VIZAG/2010 ASSESSMENT YEAR:2004-05 KYPU NAGAMANI, L/R OF K. SRINIVASA REDDY, GUNTUR VS. ACITCIRCLE-1(1) GUNTUR (APPELLANT) PAN NO: ALWPK 7072 R (RESPONDENT) ITA NO.293/VIZAG/2010 ASSESSMENT YEAR:2004-05 K. SITA RAMI REDDY, GUNTUR VS. ACITCIRCLE-1(1) GUNTUR (APPELLANT) PAN NO: ALWPK 7117 R (RESPONDENT) ITA NO.294/VIZAG/2010 ASSESSMENT YEAR:2004-05 K. KRISHNA REDDY, GUNTUR VS. ACITCIRCLE-1(1) GUNTUR (APPELLANT) PAN NO: ALWPK 7074 K (RESPONDENT) APPELLANT BY: SHRI G.V.N. HARI, CA RESPONDENT BY: SHRI J. SIRI KUMAR, DR ORDER PER BENCH: ALL THESE THREE APPEALS FILED BY THE RESPECTIVE ASS ESSEES ARE DIRECTED AGAINST THE ORDERS PASSED BY LEARNED CIT(A), GUNTUR IN THEIR HANDS AND ALL THE APPEALS RELATE TO THE ASSESSMENT YEAR 2004-05. THESE ASSESSEES ARE RELATED TO EACH OTHER AND FURTHER CERTAIN ISSUES AR E IDENTICAL IN NATURE. HENCE THESE APPEALS WERE HEARD TOGETHER AND ARE BEI NG DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. ITA NOS 292 TO 294 OF 2010 KYPU NAGAMANI AND OTHERS GUNTUR PAGE 2 OF 10 2. WE FIRST TAKE UP THE APPEAL FILED BY SMT. KYPU N AGAMANI, LEGAL REPRESENTATIVE OF SHRI K. SRINIVASA REDDY. THE ASSE SSEE IS CONTESTING FOLLOWING TWO ISSUES: A) ADDITION OF AMOUNT RECEIVED FROM COTTON CORPORAT ION OF INDIA RS.2,02,382/- B) ADDITION OF CASH CREDITS RS.42,710/- 2.1 THE FACTS RELATING TO THE ISSUES ARE STATED IN BRIEF. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATI ON ADMITTING A TOTAL INCOME OF RS.2,13,110/-. THE ASSESSING OFFICER NOTI CED THAT A SUM OF RS.2,02,382/- WAS FOUND DEPOSITED IN THE BANK ON 22 .12.2003. THE ASSESSEE EXPLAINED THAT THE SAID AMOUNT HAS BEEN RE CEIVED BY HIM ON BEHALF OF SHRI P. NARAYANA REDDY FROM M/S COTTON CO RPORATION OF INDIA. IT WAS SUBMITTED THAT THE SAID SHRI P.NARAYANA REDDY H AD SOLD COTTONS TO M/S COTTON CORPORATION OF INDIA. HOWEVER, THE ASSESSEE A GREED TO OFFER 5% THEREOF AS HIS INCOME. THE ASSESSING OFFICER REJECT ED THE SAID EXPLANATIONS AND ADDED THE ENTIRE AMOUNT OF RS.2,02,382/- IN THE HANDS OF THE ASSESSEE. THE LEARNED CIT(A) ALSO CONFIRMED THE SAID ADDITION . 2.2 DURING THE YEAR UNDER CONSIDERATION, THE AS SESSEE RECEIVED LOANS IN THE RANGE OF RS.15,000/- TO RS.18,000/- FROM 7 PERS ONS AGGREGATING TO RS.1,26,710/- AND THEY HAVE ALSO BEEN SQUARED UP DU RING THE YEAR ITSELF. BEFORE THE ASSESSING OFFICER, THE ASSESSEE DID NOT FURNISH ANY PROOF TO PROVE THE GENUINENESS OF THE ABOVE SAID LOANS. HEN CE THE ASSESSING OFFICER ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. BEFORE THE LEARNED CIT (A), THE ASSESSEE FILED CONFIRMATION LETTERS FR OM 5 CREDITORS FROM WHOM HE HAD RECEIVED LOANS AGGREGATING TO RS.84,000/-. T HE LEARNED CIT (A) CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER BUT THE ASSESSING OFFICER FAILED TO SUBMIT THE SAME. HENCE THE LEARN ED CIT (A), AFTER CONSIDERING THE CONFIRMATION LETTERS, GRANTED RELIE F TO THE EXTENT OF RS.84,000/- FROM OUT OF THE TOTAL ADDITION OF RS.1, 26,710/-. ITA NOS 292 TO 294 OF 2010 KYPU NAGAMANI AND OTHERS GUNTUR PAGE 3 OF 10 3. WE HAVE HEARD THE RIVAL CONTENTIONS ON THESE TWO ISSUES AND CAREFULLY PERUSED THE RECORD. WE NOTICE THAT THE AS SESSEE THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE IN SUPPORT OF HIS CL AIM THAT THE AMOUNT RECEIVED FROM COTTON CORPORATION OF INDIA ACTUALLY B ELONGS TO ANOTHER PERSON NAMED SHRI P. NARAYANA REDDY. HOWEVER, THE LEARNED A.R SUBMITTED BEFORE US THAT IT IS PROPER ONLY TO ASSES S THE INCOME PORTION OUT OF THE SALE CONSIDERATION OF RS.2,02,382/-. THERE I S NO DISPUTE WITH REGARD TO THE FACT THAT THE ABOVE SAID AMOUNT HAS BEEN REC EIVED FROM COTTON CORPORATION OF INDIA TOWARDS SUPPLY OF COTTON. THE ASSESSEE COULD NOT HAVE SOLD THE COTTON WITH OUT PURCHASING THE SAME FROM T HE MARKET. HENCE, AS CLAIMED BY LEARNED A.R, IT WOULD BE PROPER TO ASSES SEE ONLY THE PROFIT PORTION FROM OUT OF THE SALE PROCEEDS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD AGREED FOR ESTIMATING THE PROFIT AT 5% OF THE SALE CONSIDERATION. HOWEVER, WE NOTICE THAT THE AS SESSEE COULD NOT PRODUCE ANY EVIDENCE IN SUPPORT OF THE SAID CLAIM. HENCE, IN ORDER TO MEET THE ENDS OF JUSTICE, WE ESTIMATE PROFIT FROM THE SA LE OF COTTON AT 8% OF THE SALE AMOUNT OF RS.2,02,382/- AND ACCORDINGLY DIRECT THE ASSESSING OFFICER TO ASSESS THE SAME IN THE PLACE OF RS.2,02,382/-. THE ORDER OF LEARNED CIT(A) IS MODIFIED ACCORDINGLY. 3.1 THE NEXT ISSUE PERTAINS TO THE ADDITION OF CASH CREDIT CONFIRMED BY LEARNED CIT(A). AS PER SEC. 68 OF THE ACT, THE INI TIAL BURDEN OF PROOF IN RESPECT OF CASH CREDIT IS PLACED UPON THE ASSESSEE. WITH REGARD TO THE AMOUNT OF RS.42,710/-, WHICH HAS BEEN SUSTAINED BY THE LEARNED CIT (A), THE ASSESSEE HAS FAILED TO DISCHARGE THE BURDEN OF PROOF PLACED UPON HIM BY PROVING THE SAID LOANS IN A PROPER MANNER. HENCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT (A) IN CO NFIRMING THE ADDITION TO THE EXTENT OF RS.42,710/-. ITA NOS 292 TO 294 OF 2010 KYPU NAGAMANI AND OTHERS GUNTUR PAGE 4 OF 10 4. NEXT, WE TAKE UP THE APPEAL OF SHRI K. SITA RAMI REDDY. THE ASSESSEE IS ASSAILING THE DECISION OF THE LEARNED C IT (A) IN CONFIRMING THE FOLLOWING ADDITIONS: A) CASH CREDITS RS.18,000/- B) AMOUNT RECEIVED FROM COTTON CORPORATION OF INDIA RS.2,23,301/- C) ADVANCE RECEIVED FOR SALE OF LAND RS.4.00 LAKH S D) AMOUNT RECEIVED ON SALE OF JOINT RESIDENTIAL PRO PERTY RS.90,000/- 5. THE FACTS RELATING TO THE ISSUES ARE STATED IN B RIEF. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATI ON ADMITTING A TOTAL INCOME OF RS.1,90,380/-. THE ASSESSING OFFICER ADDE D THE AMOUNTS CITED IN THE PRECEDING PARAGRAPHS TO THE TOTAL INCOME OF THE ASSESSEE AND THE SAID ADDITIONS WERE ALSO CONFIRMED BY LEARNED CIT(A). 5.1 THE FIRST ADDITION PERTAINS TO CASH CREDITS . DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD RECEIVED LOANS FROM 10 PERSONS IN THE RANGE OF RS.15,000/- TO RS.18,000/- ALL AGGREGATIN G TO RS. 1,78,000/- AND THEY HAVE ALSO BEEN SQUARED UP DURING THE YEAR ITSE LF. SINCE THE ASSESSEE COULD NOT FILE ANY CONFIRMATION LETTER TO SUPPORT T HE GENUINENESS OF THE LOANS, THE ASSESSING OFFICER ADDED THE SAME IN THE HANDS OF THE ASSESSEE. HOWEVER BEFORE THE LEARNED CIT (A), THE ASSESSEE FI LED CONFIRMATION LETTERS OBTAINED FROM 9 CREDITORS. THOUGH THE LEARNED CIT ( A) CALLED FOR A REMAND REPORT, THE ASSESSING OFFICER FAILED TO SUBMIT THE SAME IN SPITE OF REMINDERS SENT BY THE LEARNED CIT(A). ACCORDINGLY THE FIRST A PPELLATE AUTHORITY, ON CONSIDERATION OF THE CONFIRMATION LETTERS FILED BEF ORE HIM, GRANTED RELIEF TO THE EXTENT OF RS.1,60,000/-. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US SEEKING FURTHER RELIEF OF RS.18,000/-. A S STATED EARLIER, IT IS THE RESPONSIBILITY OF THE ASSESSEE TO PROVE THE CASH CR EDITS AND IN THE INSTANT CASE, THE ASSESSEE HAS FAILED TO FURNISH ANY EVIDEN CE IN SUPPORT OF THE LOAN ITA NOS 292 TO 294 OF 2010 KYPU NAGAMANI AND OTHERS GUNTUR PAGE 5 OF 10 OF RS.18,000/- SUSTAINED BY THE LEARNED CIT(A). HE NCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT (A) ON TH IS ISSUE. 5.2 THE NEXT ISSUE RELATES TO THE ADDITION OF RS.2, 23,301/- PERTAINING TO THE AMOUNT RECEIVED FROM COTTON CORPORATION OF INDIA . WE HAVE ALREADY HELD IN THE CASE OF SMT. KYPU NAGAMANI THAT IT IS P ROPER TO ASSESS ONLY THE PROFIT PORTION FROM OUT OF SALE AMOUNT AND ACCORDIN GLY ESTIMATED THE INCOME AT 8% OF THE SALE AMOUNT. THE FACTS WITH RE GARD TO THIS ISSUE IS IDENTICAL AND HENCE, CONSISTENT WITH THE VIEW TAKEN IN THE HANDS OF SMT. KYPU NAGAMANI,(SUPRA), WE DIRECT THE ASSESSING OFFI CER TO ESTIMATE INCOME FROM SALE OF COTTON TO COTTON CORPORATION OF INDIA A T 8% OF RS.2,23,301/- AND ASSESS THE SAME IN THE PLACE OF RS.2,23,301/-. THE ORDER OF THE LEARNED CIT (A) IS MODIFIED ACCORDINGLY. 5.3. THE NEXT TWO ADDITIONS PERTAIN TO THE AMOUNTS INTRODUCED BY THE ASSESSEE IN HIS CAPITAL ACCOUNT. THE ASSESSING OFFI CER NOTICED THAT THE ASSESSEE HAS CREDITED A SUM OF RS.4,90,000/- IN HIS CAPITAL ACCOUNT ON DIFFERENT DATES AS DETAILED BELOW: DATE PARTICULARS AMOUNT 23.04.03 ADVANCE AGAINST SALE OF AGRICULTURAL LANDS RS. 2,00,000/- 12.5.03 SALE OF HOUSE RS. 90,000/- 15.4.03 ADVANCE AGAINST SALE OF AGRICULTURAL LANDS RS. 2,00,000/- THE ASSESSEE CLAIMED THAT HE IS THE OWNER OF 3.70 A CRES OF LAND LOCATED IN THE VILLAGE VELLANTI, NELLORE AND THE SAME WAS PROP OSED TO BE SOLD TO TWO PERSONS NAMED SHRI KYPU RAMANA REDDY AND SMT. BEJJA M CHINNA VENKAMMA. IN PURSUANCE OF SAID PROPOSED SALE, IT WA S CLAIMED THAT A SUM OF RS.2.00 LAKHS EACH WAS RECEIVED FROM THE TWO PRO POSED BUYERS CITED ABOVE. HOWEVER, THE ASSESSEE COULD NOT PRODUCE EVI DENCE SUPPORTING PROPOSED SALE IN THE FORM OF SALE AGREEMENT AND ALS O ANY RECEIPT IN SUPPORT OF MONEY TRANSACTION. THE ASSESSING OFFICER EXAMIN ED THESE TWO PERSONS. THOUGH THE SAID TWO PERSONS CONFIRMED THE VERSION O F THE ASSESSEE WITH ITA NOS 292 TO 294 OF 2010 KYPU NAGAMANI AND OTHERS GUNTUR PAGE 6 OF 10 REGARD TO THE PROPOSED SALE OF AGRICULTURAL LAND, Y ET THE ASSESSING OFFICER WAS NOT SATISFIED WITH THEIR CREDIT WORTHINESS. AC CORDINGLY THE ASSESSING OFFICER ADDED THE AMOUNT OF RS.4.00 LAKHS AS THE IN COME OF THE ASSESSEE. THE LEARNED CIT (A) ALSO CONFIRMED THE SAID ADDITIO N WITH THE FOLLOWING OBSERVATIONS: BEFORE ME, NO FURTHER DETAILS WERE PRODUCED TO REB UT THE FINDINGS OF THE ASSESSING OFFICER. MERELY THE FACT THAT THE PERSONS WERE PRODUCED AND HAD CONFIRMED THAT THEY H AD MADE THE ADVANCES IS NOT ENOUGH TO HOLD THAT THE AD VANCES ARE GENUINE. NO EVIDENCE HAS BEEN FILED TO SHOW THA T THE TRANSACTION FOR WHICH THE ADVANCES WERE SUPPOSEDLY RECEIVED HAD ACTUALLY TAKEN PLACE. BEFORE ME, THE A.R WAS AS KED TO FILE PROOF, IF ANY, TO SHOW THAT THE BALANCE AMOUNTS TOW ARDS THE PURCHASE OF LAND HAD BEEN PAID BY THE PURCHASERS AN D THAT THE SALE HAD ACTUALLY TAKEN PLACE. HOWEVER, NO SUCH EVIDENCE COULD BE FILED. I, THEREFORE, AGREE WITH THE ASSESS ING OFFICER THAT THE APPELLANT HAS BEEN UNABLE TO ESTABLISH THE GENUINENESS OF THE TRANSACTIONS AND THE CAPACITY OF THE PERSONS MAKING THE ADVANCES. THE ADDITION OF RS.4,0 0,000/- IS UPHELD. WE NOTICE THAT THE ASSESSEE HAD RECEIVED THE IMPUGN ED ADVANCES IN APRIL, 2003. HOWEVER, IT WAS SUBMITTED THAT THE ACTUAL SAL E OF LAND HAS NOT TAKEN PLACE TILL DATE. THIS VERY FACT ACTUALLY GOES AGAIN ST THE CLAIM OF RECEIPT OF SALE ADVANCE BY THE ASSESSEE. FURTHER, WE NOTICE TH AT THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE TO SUBSTANTIATE THE SAID C LAIM. THE ASSESSING OFFICER HAS EXAMINED BOTH THE PROPOSED BUYERS AND H AS POINTED OUT THAT THEY DO NOT HAVE REQUIRED CREDITWORTHINESS. BEFORE THE LEARNED CIT(A) OR BEFORE US, THE ASSESSEE COULD NOT FURNISH ANY MATER IAL TO CONTRADICT THE FINDINGS OF THE ASSESSING OFFICER. IN THESE CIRCUM STANCES, WE FIND NO REASON TO INTERFERE WITH THE DECISION OF THE LEARNE D CIT (A) IN CONFIRMING THE ADDITION OF RS.4.00 LAKHS. 5.4 IN RESPECT OF RS.90,000/- CREDITED TO THE CAPITA L ACCOUNT ON 12.5.2003, THE ASSESSEE CLAIMED THAT THE SAME REPR ESENTS HIS SHARE OF SALE CONSIDERATION RECEIVED ON SALE OF A HOUSE JOINTLY O WNED BY THE ASSESSEE AND ITA NOS 292 TO 294 OF 2010 KYPU NAGAMANI AND OTHERS GUNTUR PAGE 7 OF 10 HIS BROTHER KYPU KRISHNA REDDY. IT WAS CLAIMED THAT THE SAID HOUSE WAS SOLD TO A PERSON NAMED SHRI BIJJAM DASARATHA REDDY. HOWEVER, THE ASSESSEE COULD NOT PRODUCE COPIES OF SALE DOCUMENT IN SUPPORT OF THE SAID CLAIM. THE ASSESSING OFFICER EXAMINED THE ALLEGED B UYER SHRI BIJJAM DASARADA REDDY AND HE WAS NOT SATISFIED WITH THE CR EDITWORTHINESS OF THE ALLEGED BUYER. ACCORDINGLY THE ASSESSING OFFICER AD DED THE ABOVE SAID SUM OF RS.90,000/- ALSO IN THE HANDS OF THE ASSESSEE. T HE LEARNED CIT (A) ALSO CONFIRMED THE SAID ADDITION. WE NOTICE THAT THE AS SESSEE DID NOT PRODUCE ANY EVIDENCE TO SUPPORT HIS CONTENTIONS THAT THE IM PUGNED AMOUNT OF RS.90,000/- REPRESENTS SALE CONSIDERATION RECEIVED ON SALE OF A JOINTLY HELD HOUSE. IT IS WELL SETTLED PROPOSITION THAT THE AS SESSEE HAS TO PROVE THE AMOUNTS FOUND CREDITED IN HIS BOOKS OF ACCOUNT. SI NCE THE ASSESSEE HAS FAILED TO PROVE THE CLAIM OF SALE TRANSACTION, THE ASSESSING OFFICER HAS ADDED THE IMPUGNED AMOUNT OF RS.90,000/- AND THE SA ME WAS ALSO CONFIRMED BY LEARNED CIT(A). IN THESE CIRCUMSTANCE S, WE FIND NO REASON TO INTERFERE WITH THE DECISION OF LEARNED CIT(A) ON TH IS ISSUE. 6. NOW WE TAKE UP THE CASE OF SHRI K. KRISHNA REDDY . THE ASSESSEE IS CONTESTING FOLLOWING ADDITIONS CONFIRMED BY LEARNED CIT(A). A) CASH CREDIT CONFIRMED BY THE LEARNED CIT (A) RS .35,000/- B) ADVANCE RECEIVED ON SALE OF AGRICULTURAL LAND R S.4.00 LAKHS C) AMOUNT RECEIVED ON SALE OF JOINT RESIDENTIAL HO USE RS.90,000/- D) ADDITION OF RS.2,49,000/- RELATING TO PURCHASE O F SITE IN THE EARLIER YEAR. 6.1 THE FACTS RELATING TO THE SAID ISSUES ARE STATE D IN BRIEF. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE YEAR UNDER CONSI DERATION ADMITTING A TOTAL INCOME OF RS.2,12,490/-. THE ASSESSING OFFICER MAD E THE ADDITIONS CITED IN THE PRECEDING PARAGRAPH AND THE SAID ADDITIONS WERE ALSO CONFIRMED BY LEARNED CIT(A). ITA NOS 292 TO 294 OF 2010 KYPU NAGAMANI AND OTHERS GUNTUR PAGE 8 OF 10 6.2 THE FIRST ADDITION PERTAINS TO THE CASH CRE DIT. THE ASSESSEE, DURING THE YEAR UNDER CONSIDERATION, HAD RECEIVED LOANS IN THE RANGE OF RS.15,000/- TO RS.18,000/- FROM 10 PERSONS, ALL AGG REGATING TO RS. 1,75,000/- AND THEY HAVE ALSO BEEN SQUARED UP DURIN G THE YEAR ITSELF. SINCE THE ASSESSEE COULD NOT FILE ANY CONFIRMATION LETTER IN SUPPORT THE SAID LOANS, THE ASSESSING OFFICER ADDED THE ABOVE SAID AMOUNT O F RS.1,75,000/- IN THE HANDS OF THE ASSESSEE. BEFORE LEARNED CIT(A), THE ASSESSEE FILED CONFIRMATION LETTERS OBTAINED FROM 8 CREDITORS. TH OUGH THE LEARNED CIT (A) CALLED FOR A REMAND REPORT, THE ASSESSING OFFICER F AILED TO SUBMIT THE SAME IN SPITE OF REMINDERS SENT BY THE LEARNED CIT(A). A CCORDINGLY THE FIRST APPELLATE AUTHORITY, ON CONSIDERATION OF THE CONFIR MATION LETTERS FILED BEFORE HIM, GRANTED RELIEF TO THE EXTENT OF RS.1,40,000/-. THE ASSESSEE IS IN APPEAL BEFORE US SEEKING FURTHER RELIEF OF RS.35,000/-. A S STATED EARLIER, IT IS THE RESPONSIBILITY OF THE ASSESSEE TO PROVE THE CASH CR EDITS AND IN THE INSTANT CASE, THE ASSESSEE HAS FAILED TO FURNISH ANY EVIDEN CE IN SUPPORT OF THE LOAN OF RS.35,000/- SUSTAINED BY THE LEARNED CIT(A). HE NCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT (A) ON TH IS ISSUE. 6.3 THE NEXT TWO ADDITIONS PERTAIN TO THE AMOUNTS I NTRODUCED BY THE ASSESSEE IN HIS CAPITAL ACCOUNT. THE ASSESSING OFFI CER NOTICED THAT THE ASSESSEE HAS CREDITED A SUM OF RS.4,90,000/- IN HIS CAPITAL ACCOUNT ON DIFFERENT DATES AS DETAILED BELOW: DATE PARTICULARS AMOUNT 23.04.03 ADVANCE AGAINST SALE OF AGRICULTURAL LANDS RS. 2,00,000/ - 12.5.03 SALE OF HOUSE RS. 90,000/- 15.4.03 ADVANCE AGAINST SALE OF AGRICULTURAL LANDS RS. 2,00,000/- AS IN THE CASE OF SHRI K. SITA RAMI REDDY DISCUSSED (SUPRA), THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE IN SUPPORT OF THE CL AIM OF RECEIPT OF ABOVE AMOUNTS. HENCE, CONSISTENT WITH THE VIEW TAKEN IN T HE CASE OF SHRI K. SITA RAMI REDDY (SUPRA), WE CONFIRM ADDITION OF RS.4,90, 000/- IN THE HANDS OF THIS ASSESSEE ALSO. ITA NOS 292 TO 294 OF 2010 KYPU NAGAMANI AND OTHERS GUNTUR PAGE 9 OF 10 6.4 THE NEXT ISSUE PERTAINS TO ADDITION OF RS.2,49, 000/-. THE ASSESSEE PURCHASED A VACANT SITE ON 29.6.2002, I.E. DURING T HE YEAR RELEVANT TO THE ASSESSMENT YEAR 2003-04 FOR A CONSIDERATION OF RS.2 ,20,000/-. THE AGGREGATE AMOUNT INCLUDING THE EXPENSES APPEAR TO B E TO THE TUNE OF RS.2,49,000/-. HOWEVER THE ASSESSEE DID NOT DISCLO SE THE SAID PURCHASE IN THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2003-04. THE ASSESSEE ACCOUNTED THE ABOVE CITED INVESTMENT IN HIS BOOKS O N 1.4.2003 BY PASSING A JOURNAL ENTRY, I.E. BY CREDITING THE CAPITAL ACCO UNT WITH RS.2,49,800/- AND BY MAKING CORRESPONDING DEBIT TO VACANT SITE ACCOUN T. THE ASSESSING OFFICER TREATED THE AMOUNT SO CREDITED IN THE CAPIT AL ACCOUNT AS INFLATION OF CAPITAL AND ADDED THE SAME IN THE HANDS OF THE ASSE SSEE. THE LEARNED CIT (A) ALSO CONFIRMED THE SAID ADDITION. 6.4.1 AT THE TIME OF HEARING THE LEARNED AUTHORISED REPRESENTATIVE POINTED OUT THAT THE INVESTMENT IN THE IMPUGNED VACANT SITE WAS MADE IN THE IMMEDIATELY PRECEDING YEAR AND THE ASSESSEE HAS SIM PLY ACCOUNTED FOR SAID PURCHASE AS ON THE 1 ST DAY OF THE YEAR UNDER CONSIDERATION BY PASSING A JOURNAL ENTRY. ACCORDINGLY IT WAS CONTENDED THAT N O ADDITION IS CALLED FOR IN THIS YEAR, AS THE ASSESSEE HAS NOT BROUGHT IN ANY F RESH FUNDS ON ACCOUNTED OF PASSING OF THE JOURNAL ENTRY CITED ABOVE. WE FIN D FORCE IN THE SAID ARGUMENT OF THE LEARNED AUTHORISED REPRESENTATIVE. IF THE ASSESSEE HAD NOT DISCLOSED THE SAID INVESTMENT IN THE IMMEDIATELY PR ECEDING YEAR, THE ADDITION IF ANY, IS CALLED FOR IN THAT YEAR ONLY. I N THE INSTANT YEAR, THE ASSESSEE HAS ONLY BROUGHT THE IMPUGNED INVESTMENT I N HIS BOOKS OF ACCOUNT BY PASSING A JOURNAL ENTRY. AS POINTED OUT BY THE L EARNED AUTHORISED REPRESENTATIVE, NO FRESH FUND WAS BROUGHT INTO THE BOOKS ON ACCOUNT ON ACCOUNT OF THE JOURNAL ENTRY CITED ABOVE AND HENCE NO ADDITION IS CALLED FOR ON THAT COUNT. ACCORDINGLY WE REVERSE THE ORDER OF THE LEARNED CIT (A) ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO DELE TE THE IMPUGNED ADDITION OF RS.2,49,000/-. ITA NOS 292 TO 294 OF 2010 KYPU NAGAMANI AND OTHERS GUNTUR PAGE 10 OF 10 7. IN THE RESULT, THE APPEALS OF THE ASSESSEES IN I TA NOS. 292 & 293/VIZAG/2010 AND ITA NO.294/VIZAG/2010 ARE PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 7 TH APRIL, 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE:07-04-2011 COPY TO 1 SMT. KYPU NAGAMANI, L/R OF K. SRINIVASA REDDY, C/ O M/S G.V.N. HARI & CO. CHARTERED ACCOUNTANTS, D.NO.30-14-11, 2 ND FLOOR, DABBERU MANSIONS, DABA GARDENS, VISAKHAPATNAM 530 020 2 SMT. K. SITA RAMI REDDY, C/O M/S G.V.N. HARI & CO . CHARTERED ACCOUNTANTS, D.NO.30-14-11, 2 ND FLOOR, DABBERU MANSIONS, DABA GARDENS, VISAKHAPATNAM 530 020 3 SHRI K. KRISHNA REDDY, C/O M/S G.V.N. HARI & CO. CHARTERED ACCOUNTANTS, D.NO.30-14-11, 2 ND FLOOR, DABBERU MANSIONS, DABA GARDENS, VISAKHAPATNAM 530 020 4 5 THE CIT GUNTUR THE CIT(A), GUNTUR 6 THE DR, ITAT, VISAKHAPATNAM. 7 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM