Bellana Jagannadham, Vizianagaram V. THE ITO, Vizianagaram

ITA 3/VIZ/2016

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9963 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 04-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S RAVI SHANKAR NARAYANA
• Assessee Lawyers: N V RAMANA MURTHY
• Keywords: Unexplained investment
• Section: 143(3); 142(1)

Judgement Text

ITA NO.3/VIZAG/2016 SRI BELLANA JAGANNADHAM, GARIKIVALASA, VZM DIST. 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER ./I.T.A.NO.3/VIZAG/2016 ( / ASSESSMENT YEAR: 2011-12) SRI BELLANA JAGANNADHAM, GARIKIVALASA, VIZIANAGARAM DIST. VS. ITO, WARD - 2, VIZIANAGARAM [PAN: AYKPB8385M ] ( / APPELLANT) ( ! / RESPONDENT) / APPELLANT BY : SHRI N.V. RAMANA MURTHY, AR / RESPONDENT BY : SHRI S. RAVI SHANKAR NARAYANA, DR / DATE OF HEARING : 02.08.2016 / DATE OF PRONOUNCEMENT : 12.08.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-1, VISAKHAPATNAM DATED 27.11.2015 FOR THE AS SESSMENT YEAR 2011-12. ITA NO.3/VIZAG/2016 SRI BELLANA JAGANNADHAM, GARIKIVALASA, VZM DIST. 2 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS AN INDIV IDUAL CARRYING ON BUSINESS IN PURCHASE AND SALE OF IMFL (INDIAN MADE FOREIGN LIQUOR) IN VIZIANAGARAM DISTRICT. THE ASSESSEE HAD FILED A RE TURN OF INCOME BY DECLARING TOTAL INCOME OF ` .2,80,160/-. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED U/S 142(1) OF THE INCOME TAX ACT, 196 1 (HEREINAFTER CALLED AS 'THE ACT') AND THEREAFTER, AFTER FOLLOWIN G THE DUE PROCEDURE, ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT. TH E ONLY ISSUE FOR CONSIDERATION BEFORE US IS THAT THE INITIAL INVESTM ENT MADE BY THE ASSESSEE IN RESPECT OF LICENSE FEE AND PURCHASE OF STOCK FROM A.P. BEVERAGES CORPORATION LTD. BEFORE THE A.O., ASSESS EE HAS EXPLAINED THAT HE IS DOING THE COMMISSION BUSINESS OF AGRICUL TURAL PRODUCTS AND OUT OF THE ABOVE SOURCE OF INCOME, HE HAS MADE AN I NITIAL INVESTMENT IN RESPECT OF LICENSE FEE AS WELL AS PURCHASE OF STOCK . HOWEVER, THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE HIS CASE BEFOR E THE A.O. AND ACCORDINGLY THE A.O. HAS ALSO NOT BELIEVED THE EXPL ANATION OF THE ASSESSEE AND THE INVESTMENT MADE BY THE ASSESSEE WA S CONSIDERED AS AN INCOME FROM UNEXPLAINED INVESTMENT. ACCORDINGLY , ADDITION WAS MADE. ON APPEAL BEFORE THE CIT(A), THE ASSESSEE HA S RAISED FOLLOWING GROUNDS: ITA NO.3/VIZAG/2016 SRI BELLANA JAGANNADHAM, GARIKIVALASA, VZM DIST. 3 1) THE IMPUGNED APPELLATE ORDER DATED 27-11-2015 PA SSED BY THE LEARNED CIT (APPEAL)-1, VISAKHAPATNAM IS UNJUST AND UNCALLED FOR. 2) THE LEARNED CIT (APPEALS) OUGHT TO HAVE AFFORDED ONE MORE OPPORTUNITY TO THE APPELLANT, IN THE INTEREST OF JU STICE. 3) THE LEARNED CIT (APPEALS) OUGHT TO HAVE APPRECIA TED TO FACT THAT IN THE PRAYER OF THE APPEAL GROUNDS THE APPELLANT REQU ESTED FOR RAISING OTHER REASONS AT THE TIME OF HEARING. BUT SUCH OPPORTUNIT Y WAS NOT AFFORDED TO THE APPELLANT BY THE LEARNED CIT (APPEALS) AS HE DI SPOSED OFF THE IMPUGNED APPEAL ON EXPARTE BASIS. SO THE OBSERVATIO N OF THE LEARNED CIT (APPEARS) IN THIS REGARD THAT NO GROUND WAS RAISED BY THE APPELLANT AGAINST THE ADDITIONS OF RS. 31,13,396/- TOWARDS AL LEGED UNEXPLAINED INVESTMENT WAS NOT CORRECT AND IF PROPER OPPORTUNIT Y HAD BEEN AFFORDED TO THE APPELLANT HE WOULD HAVE RAISED GROUNDS AND O BJECTIONS AGAINST THESE ADDITION. MOREOVER THE LEARNED CIT (APPEALS) OUGHT TO APPRECIATED THE FACT THAT THE APPELLANT REQUESTED IN THE PRAYER OF FIRST APPEAL ITSELF FOR DELETION OF ADDITION RS. 31,13,396/- FROM THE IMPUG NED ASSESSMENT AND THE SAID AMOUNT REPRESENTED THE AGGREGATE SUM OF TH E ABOVE DISPUTED ADDITION. 4) THE LEARNED CIT (APPEALS) OUGHT TO HAVE APPRECIA TED THE FACT THAT THE APPELLANT HAS GOT ABUNDANT AND SUFFICIENT SOURC ES TO MEET THE UNEXPLAINED INVESTMENT OF RS.31,13,396/ -, IN THE I NTEREST OF JUSTICE. 5) THE LEARNED CIT (APPEALS) OUGHT TO HAVE APPRECIA TED THE FACT THAT ONCE THE LEARNED ASSESSING OFFICER RESORTED TO ESTI MATION OF INCOME FROM BUSINESS IN IMFL AND BEER OF THE APPELLANT THAN BY A DDING CAPITAL TOWARDS ALLEGED UNEXPLAINED INVESTMENT DOES NOT ARI SE. PRAYER FOR THESE AND OTHER REASONS TO BE URGED AT THE TIME OF HEARING THE APPELLANT PRAYS YOUR HONOUR TO KINDLY DELETE THE AD DITIONS AGGREGATING TO RS. 31,13,396/- BY QUASHING THE APPELLATE ORDER DAT ED 27-11-2015 PASSED BY THE LEARNED CIT (APPEALS)-1, VISAKHAPATNAM FOR T HE ASST. YEAR 2011- 12, IN THE INTEREST OF JUSTICE. 3. THE LD. CIT(A) AFTER CONSIDERING THE ABOVE GROUN DS, HE HAS ONLY ADJUDICATED PROFIT ON SALE OF LIQUOR BUT HE HAS NOT ADJUDICATED THE GROUND IN RESPECT OF INITIAL INVESTMENT. BEFORE ME , THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE COULD NOT APPEAR BEFORE THE LD. CIT(A) DUE TO ILL HEALTH AND FURTHER SUBMIT TED THAT ONE MORE ITA NO.3/VIZAG/2016 SRI BELLANA JAGANNADHAM, GARIKIVALASA, VZM DIST. 4 OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE TO SUBSTAN TIATE HIS CASE BEFORE THE LD. CIT(A). 4. ON THE OTHER HAND, THE LD. D.R. STRONGLY OBJECTE D THE PRAYER MADE BY THE ASSESSEE. 5. I HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE ISSUE INVOLVED IN THIS APPEAL IS IN RESPECT OF INITIAL IN VESTMENT MADE BY THE ASSESSEE. WHEN THE A.O. HAS ASKED THE ASSESSEE, HE HAS SUBMITTED THAT HE IS INTO COMMISSION BUSINESS RELATING TO AGR ICULTURAL PRODUCTS OUT OF WHICH THE INVESTMENT IS MADE. HOWEVER, THE A.O. HAS NOT BELIEVED THE EXPLANATION GIVEN BY THE ASSESSEE AND THE INITI AL INVESTMENT MADE BY THE ASSESSEE WAS TREATED AS UNEXPLAINED INVESTME NT, ACCORDINGLY, ADDITION IS MADE. BEFORE CIT(A), THE ASSESSEE HAS NOT RAISED SPECIFIC GROUND IN RESPECT OF INITIAL INVESTMENT. HOWEVER, AFTER GROUNDS OF APPEAL, HE MADE A SPECIFIC PRAYER TO THE LD. CIT(A) TO DELETE THE ADDITION OF ` 31,13,396/-, WHICH REPRESENTS INITIAL INVESTMENT M ADE BY THE ASSESSEE. UNDER THE ABOVE FACTS AND CIRCUMST ANCES OF THE CASE, I AM OF THE VIEW THAT THE LD. CIT(A) OUGHT TO HAVE CO NSIDERED THE PLEA RAISED BY THE ASSESSEE AND SHOULD HAVE DECIDED THE ISSUE IN ACCORDANCE WITH LAW. HOWEVER, THE LD. CIT(A) FAILED TO ADJUDI CATE THE ISSUE OF INITIAL ITA NO.3/VIZAG/2016 SRI BELLANA JAGANNADHAM, GARIKIVALASA, VZM DIST. 5 INVESTMENT MADE BY THE ASSESSEE. IN VIEW OF THE AB OVE, I SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND DIRECTED TO DECI DE THE ISSUE OF INITIAL INVESTMENT, DE-NOVO AFTER GIVING REASONABLE OPPORTU NITY TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 12 TH AUG16. SD/- ( . ) (V. DURGA RAO) /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 12.08.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SRI BELLANA JAGANNADHAM, PROP: M /S. SRI SRIRAM WINES, D.NO.3-25, GARIKIVALASA, VIZIANAGARAM DIST. 2. / THE RESPONDENT THE ITO, WARD-2, VIZIANAGARAM 3. ) / THE CIT-1, VISAKHAPATNAM 4. ) ( ) / THE CIT(A)-1, VISAKHAPATNAM 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM