Appeal Details
Counselvise Citation
[2017] 126 COUNSELVISE.COM (IT) 6438 (ITAT-VISAKHAPATNAM)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 month(s) 27 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
20-12-2017
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Assessment Year
2011-2012
Appeal Filed On
23-06-2017
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 3 81 /VIZ/ 201 7 ( / ASSESSMENT YEAR: 20 1 1 - 1 2 ) CH.VEERA VENKATA SATYANARAYANA D.NO.7 - 145/5 MAIN ROAD TALLAPUDI WEST GODAVARI [PAN : AOJPC2622R ] VS. THE ITO WARD - 2 TANUKU ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI G.V.N.HARI , A R / RESPONDENT BY : S HRI M.N.MURTHY NAIK, DR / DATE OF HEARING : 23 . 1 1 .2017 / DATE OF PRONOUNCEMENT : 20 . 1 2 .2017 / O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER : 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [ APPEALS ] [CIT(A)] , RAJAHMUNDRY VIDE ITA 2 ITA NO .3 81 /VIZ/201 7 CH.VEERA VENKATA SATYANARAYA, TALLAPUDI NO.77/2014 - 15/CIT(A)/RJY/ITO,W - 2,TNK/2016 - 17 DATED 09 .0 6 .201 7 FOR THE ASSESSMENT YEAR 20 1 1 - 1 2 . 2. THE ASSESSEE FILED THE FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO THE FACTS AND ALSO THE LAW APPLICABLE TO THE FACTS OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN PARTLY SUSTAINING A SUM OF RS. 25,82,000/ - OUT OF ADDITION OF RS.34,82,000/ - MADE TOWARDS UNEXPLAINED UNSECURED LOANS. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN PARTLY SUSTAINING A SUM OF RS. 31,88,000/ - OUT OF TOTAL ADDITION OF RS.36,88,000/ - MADE TOWARDS UNEXPLAINED CAPITAL. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTI FIED IN SUSTAINING ADDITION OF RS.37,930/ - TOWARDS DISALLOWANCE @ 20% OF EXPENDITURE CLAIMED UNDER THE HEAD SALARIES AND MISC & SADAR. 5. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF APPEAL HEARING. 3. IN THIS CASE, THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,52,930/ - ON 29.02.2012. THE ASSESSME NT WAS COMPLETED U/S 143(3) IN THE MANNER LAID DOWN U/S 144 IT ACT ON TOTAL INCOME OF RS.73,60,860/ - . IN THE INSTANT CASE THE ASSESSEE DID NOT AP PEAR BEFORE THE ASSESSING OFFICER ( AO ) AND SUBMIT THE DETAILS, IN SPITE OF GIVING REPEATED OPPORTUNITIES, HENCE 3 ITA NO .3 81 /VIZ/201 7 CH.VEERA VENKATA SATYANARAYA, TALLAPUDI THE AO HELD THAT THE LIABILITIES APPEARING IN THE BALANCE SHEET RELATING TO THE CAPITAL AND UNSECURED LOANS WERE BOGUS AND ACCORDINGLY MADE THE FOLLOWING ADDITIONS. (I) D ISALLOWANCE OF EXPENDITURE RS.37,930/ - (II) CAPITAL INTRODUCED RS.36,88,000/ - (III) UNSECURED LOANS RS.34,82,000/ - 4. THE ASSESSEE FILED CONFIRMATIONS BEFORE THE CIT (A) EXPLAINING THE SOURCES FOR INTRODUCTION OF CAPITAL AS AGRICULTURAL INCOME - RS.10,00,000/ - , GIFT FROM FATHER - RS.10,00,000/ - AND RECEIPT FROM SRI K.V.V.SATYANARAYANA - RS.10,00,000/ - . W ITH REGARD TO THE UNSECURED LOANS, THE ASSESSEE FILED CONFIRMATIONS FROM THE FOLLOWING PERSONS : (I) CHERUKURI RAMA KRISHNA (II) CHERUKURI NAGESWARA RAO S/O PEDDA VEERANNA (III) CHERUKURI NAGESWARA RAO, S/O DHARMA RAO (IV) SURAPANENI SURYA RAO 4.1. THE CIT(A) ALLOWED RS.5,00,000/ - AS SAVINGS FOR CAPITAL CONTRIBUTION AND HELD THAT THERE WAS NO JUSTIFICATION FOR THE GIFT FROM FATHER AND RECEIPT 4 ITA NO .3 81 /VIZ/201 7 CH.VEERA VENKATA SATYANARAYA, TALLAPUDI FROM SRI K.V.V.SATYANARAYANA. ACCORDINGLY CONFIRMED THE ADDITION OF RS.31 ,88,000/ - TOWARDS CAPITAL CONTRIBUTION . IN RESPECT OF UNSECURED LOANS THE LD.CIT(A) DELETED THE ADDITION OF RS.14,00,000/ - AND CONFIRMED THE BALANCE AMOUNT. 5. AGGRIEVED BY THE OR DER OF THE LD. CIT(A), THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL. DURING THE APPEAL HEARING, LD.AR ARGUED THAT THE ASSESSEE IS NOT AWARE OF THE INCOME TAX PROCEEDINGS AND THE PREPARATION OF ACCOUNTS. THE JOB OF PREPARATI ON OF ACCOUNTS WAS GIVEN TO AN A CCOUNTANT WHO HAS MESSED UP THE ACCOUNTS. HE HAS FILED A PAPER BOOK AN D INVITED OUR ATTENTION TO THE T RADING ACCOUNT APPEARING IN PAGE NO.3 OF THE PAPER BOOK , W HEREIN, THE PURCHASES WERE SHOWN AT RS.55,62,159/ - AND THE SALES WERE SHOWN AT RS.36,58,180/ - AND THE CLOSING STOCK WAS REPORTED AT RS. 56,01,890/ - ,EVEN THOUGH THERE WAS NO OPENING STOCK. . AGAINST THE PURCHASES OF RS.55,62,159/ - AND THE SALES OF RS.36,58,180/ - , THE CLOSING STOCK WOULD HAVE BEEN APPROXIMATELY RS.20 TO RS. 25 LAKHS AS SUBMITTED BY THE LD.AR. BECAUSE OF THE SHEER INFLATION OF THE CLOSING STOCK IN BALANCE SHEET AND THE TRADING ACCOUNT , ABSURD TRADING RESULTS WERE SHOWN AND THE WRONG BALANCES IN CAPITAL ACCOUNT AND LIABILITIES WERE REPORTED WHICH NEEDS TO BE RECONCILED WITH THE BOOKS OF ACCOUNTS. THE LD.AR FURTHER SUBMITTED 5 ITA NO .3 81 /VIZ/201 7 CH.VEERA VENKATA SATYANARAYA, TALLAPUDI THAT THE ASSESSEE HAS MAINTAINED PROPER BOOKS OF ACCOUNTS AND IF THE OPPORTUNITY IS GIVEN , THE ASSESSEE WOULD PRODUCE THE BOOKS OF ACCOUNTS AND THE CREDITORS AND EST ABLISH THE CORRECTNESS OF TRUE AND CORRECT INCOME. SINCE THE ENTIRE BALANCE SHEET, PROFIT & LOSS ACCOUNT WAS WRONG WITH INCORRECT FIGURES, THE LD.AR REQUESTED TO REMIT THE MATTER BACK TO THE FILE OF THE AO FOR REDOING THE ASSESSMENT AFTER VERIFYING THE BO OKS OF ACCOUNTS AND ASSURED TO COOPERATE WITH THE AO. 6. ON THE OTHER HAND, LD.DR SUPPORTED THE ORDERS OF THE LD. CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. WE HAVE GONE THROUGH THE TRADING AND PROFIT AND LOSS ACCOUNT AND THE BALANCE SHEET FILED IN THE PAPER BOOK. WE OBSERVED THAT WHILE PREPARING THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT, THERE WAS INFLATION OF CLOSING STOCK WHICH WAS SHOWN MORE THA N THE PURCHASES IN SPITE OF NO OPENING STOCK. PRIMA FACIE , IT APPEARS TO BE BLUNDER COMMITTED BY THE ASSESSEE WHILE PREPARING THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT WHICH NEEDS TO BE VERIFIED WITH BOOKS OF ACCOUNTS. THE ASSESSEE FILED REVISED BALANCE SHEET AS PER WHICH THERE WAS NO CAPITAL AND THE CAPITA L WAS WORKED OUT TO BE NEGATIVE BALANCE. THE UNSECURED LOANS WERE 6 ITA NO .3 81 /VIZ/201 7 CH.VEERA VENKATA SATYANARAYA, TALLAPUDI RS . 25 ,00,000/ - WHICH WAS ONLY THE LIABILITY. ON COMPARATIVE READING OF THE BALANCE SHEET FILED BEFORE US AND FILED ALONG WITH THE RETURN OF INCOME, THERE APPEARS TO BE MISTAKES WHICH REQU IRED TO BE RECONCILED AND VERIFIED BY THE AO. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE ENTIRE ASSESSMENT NEEDS TO BE REMITTED BACK TO THE FILE OF THE AO FOR DENOVO CONSIDERATION. ACCORDINGLY THE ASSESSMENT IS REMITTED BACK TO THE FILE OF THE AO WITH A DIRECTION TO REDO THE ASSESSMENT DENOVO. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 2 0 TH DEC 20 17 . SD/ - SD/ - ( . ) . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 20 . 1 2 .2017 L. RAMA, SPS 7 ITA NO .3 81 /VIZ/201 7 CH.VEERA VENKATA SATYANARAYA, TALLAPUDI / COPY OF THE ORDER FORWARDED TO: - 1. / THE APPELLANT - CH.VEERA VENKATA SATYANARAYANA, D.NO.7 - 145/5 MAIN ROAD, TALLAPUDI, WEST GODAVARI 2 . / THE RESPONDENT THE ITO, WARD - 2, TANUKU 3 . THE PR.COMMISSIONER OF INCOME TAX, RAJAHMUNDRY 4. THE COMMISSIONER OF INCOME TAX (APPEALS), RAJAHMUNDRY (I/C) 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM
