Kotari Srinivasa Rao, , Undrajavaram Mandalam V. The Principal Commissioner of Income Tax, , Rajahmundry

ITA 335/VIZ/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 2254 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 26-05-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Revision of order; Search and seizure; Assessment record
• Section: 68; 263; 143(3); 142(1); 143(2)

Judgement Text

आयकरअपीलीयअधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य एिं श्री एस बालाकृ ष्णन, लेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./I.T.A.No.335/Viz/2019 (ननधधारण वर्ा / Assessment Year : 2014-15) Kotari Srinivasa Rao D.No.1-91, Canal Road Velivennu Undrajavaram Mandal West Godavari Dist. [PAN : APJPK9870N] Vs. Principal Commissioner of Income Tax Rajahmundry (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : None प्रत्यधथी की ओर से / Respondent by : Shri MN Murthy Naik, CIT(DR) सुनवधई की तधरीख / Date of Hearing : 02.06.2022 घोर्णध की तधरीख/Date of Pronouncement : 28.06.2022 O R D E R PER S. BALAKRISHNAN, Accountant Member : This appeal is filed by the assessee against the order of the Principal Commissioner of Income Tax (Pr.CIT), Rajahmundry in F.No.15/263/P.CIT/RJY/2018-19 dated 31.03.2019 for the Assessment Year (A.Y.) 2014-15. 2. Brief facts of the case are that the assessee is an individual, engaged in trading of chemical products with the name and style of M/s Seven Hills 2 ITA No.335/Viz/2019, A.Y.2014-15 Kotari Srinivasa Rao, Velivennu Chem.Products. The assessee filed his return of income for the A.Y.2014-15, declaring total income of Rs.6,39,630/-. Subsequently, the case was selected for scrutiny under CASS and notices u/s 143(2) and 142(1) were issued. During the course of assessment proceedings, the Assessing Officer (AO) noticed that the assessee had credited huge amounts of Rs.93,00,000/- against Balaji Associates (AOP) and Rs.3,00,000/- against Sunkara Sita Rambabu, totalling to Rs.96,00,000/-. When the assessee was asked to furnish the confirmations, the AR of the assessee produced copy of the return of income filed by the AOP as a documentary evidence for the A.Y.2014-15, along with copy of balance sheet / ledger extract of the AOP, in which the investment of the assessee, Sri K.Srinivasa Rao of Rs.93,00,000/- was shown as negative. Secondly, the assessee has taken an amount of Rs.3,00,000/- from Sri Sunkara Sita Rambabu for the purpose of investment in the business as a partner. The assessee retained the amount with him as the partnership business proposal has not come into existence. The assessee stated that Sri Sunkara Sita Rambabu has not given confirmation letter as he is afraid of income tax proceedings. Not being satisfied with the explanation offered by the assessee, the AO treated the same as unexplained investment u/s 68 of the Act and made an addition of 3 ITA No.335/Viz/2019, A.Y.2014-15 Kotari Srinivasa Rao, Velivennu Rs.3,00,000/- as the assessee failed to prove the genuineness of the investment to the tune of Rs.3,00,000/-. The AO further observed that the assessee has shown huge expenditures under various heads such as freight, oil & petrol, salaries and wages etc in the profit & loss account, but could not produce proper bills / vouchers in support of the expenditure claimed except self made vouchers and some are not verifiable. Thus disallowed a sum of Rs.5,00,000/- towards disallowance of expenditure, assessed the total income of Rs.14,39,630/- and arrived at the net demand payable of Rs.2,78,030/-. 3. Subsequently, the Ld.Pr.CIT has taken up the case for revision u/s 263 and after careful examination of the assessment records, the Ld.Pr.CIT set aside the assessment to the file of the AO with a direction to redo the assessment after making thorough enquiries and obtaining relevant information to ascertain the genuineness and existence of AOP, purpose of creation of AOP, identity of members of AOP, their creditworthiness to make contribution to AOP after giving reasonable opportunity of being heard to the assessee. 4. Aggrieved by the order of the Ld.Pr.CIT, the assessee preferred an appeal before the Tribunal and raised the following grounds : 4 ITA No.335/Viz/2019, A.Y.2014-15 Kotari Srinivasa Rao, Velivennu 1. The order passed u/s 263 is barred by limitation. 2. The Pr.CIT has passed the order u/s 263 though the AO has passed the order u/s 143(3) properly which is not prejudicial or erroneous to the interests of the department and hence unjustified. 3. The Pr.CIT has passed the order u/s 263 on surmises and gestures and without any basis and hence unjustified. 4. The Pr.CIT, Rajahmundry ought to have considered the explanation submitted by the assessee. 5. The learned Pr.CIT, Rajahmundry is not justified in denying the transaction between the AOP and the assessee. 6. The learned Pr.CIT, Rajahmundry is not justified in initiating the proceedings u/s 263 without considering the facts and circumstances of the case. 7. For the above and other grounds that may be urged at the time of hearing the present appeal is preferred. None appeared on behalf of the assessee, inspite of many opportunities being given to the assessee. 5. We have heard the Ld.DR and perused the material available on record. It is apparent from the records, that the assessee is given many opportunities for pursuing his case, but the assessee failed to comply with the notices given and appear before the Tribunal. Hence, we are of the view that the assessee is not willing to pursue his case and accordingly dismiss the appeal filed by the assessee. 5 ITA No.335/Viz/2019, A.Y.2014-15 Kotari Srinivasa Rao, Velivennu 6. In the result, appeal of the assessee is dismissed. Order Pronounced in open Court on 28 th June, 2022. Sd/- Sd/- (द ु व्वूरु आर.एल रेड्डी) (एस बालाकृ ष्णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) न्याधयक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER Dated : 28.06.2022 L.Rama, SPS आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– Kotari Srinivasa Rao, D.No.1-91, Canal Road Velivennu, Undrajavaram Mandal, West Godavari Dist. 2. रधजस्व/The Revenue – Principal Commissioner of Income Tax, Rajahmundry 3. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम/ DR,ITAT, Visakhapatnam 4.गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam