Varanasi Ramakrishna, Bobbili V. THE ITO, Vizianagaram

ITA 385/VIZ/2015

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9789 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 09-11-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M K SETHI
• Keywords: Gift

Judgement Text

ITA NO.385/VIZAG/2015 VARANASI RAMAKRISHNA, BOBBILI. ` 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER ./I.T.A.NO.385/VIZAG/2015 ( / ASSESSMENT YEAR: 2011-12) VARANASI RAMAKRISHNA BOBBILI VS. ITO, WARD - 1, VIZIANAGARAM [PAN: AKSPV3444M ] ( / APPELLANT) ( ! / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI , AR / RESPONDENT BY : SHRI M.K. SETHI , DR / DATE OF HEARING : 20 .09.2016 / DATE OF PRONOUNCEMENT : 26.10.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL IS FILED BY ASSESSEE AGAINST THE ORDER OF THE CIT(A)-1, VISAKHAPATNAM DATED 28.09.2015 FOR THE ASSESSMENT Y EAR 2011-12. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS CARRYING THE BUSINESS OF IMFL AND FILED ITS RETURN OF INCOME BY DECLARING TO TAL INCOME OF ITA NO.385/VIZAG/2015 VARANASI RAMAKRISHNA, BOBBILI. ` 2 ` 5,84,840/-. THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED BY THE A.O. U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') BY DETE RMINING TOTAL INCOME OF THE ASSESSEE AT ` 30,67,270/-. IN THE ASSESSMENT ORDER, THE A.O. HA S NOTED THAT THE ASSESSEE HAS MADE A TOTAL INVESTMENT TO THE TUNE OF ` 20,83,000/- TOWARDS LICENSE FEE, FIXED DEPOSIT AND FIRST PURCHASE OF LIQUOR STOCK. THE ASSESSEE HAS EXPLAINED THAT THE SOURCE OF THE ABOVE INVESTMENT WAS OUT OF THE CAPITAL BALANCE AVAILABLE AT ` 9,85,000/- AS PER THE RETURNS OF INCOME FILED FOR THE ASSESSMENT YEARS 2009-10 & 2010-11 AND THAT THE BALANCE WAS MADE FROM THE TERM LOAN OF ` 80,000/- AND OTHER AMOUNTS RECEIVED AS GIFTS FROM R ELATIVES AND FRIENDS. THE A.O. AFTER CONSIDERING THE EXPLANATION OF THE A SSESSEE NOTED THAT THE CREDIT FOR BROUGHT FORWARD CAPITAL CANNOT BE AL LOWED AS THE ASSESSEE FILED A RETURN OF INCOME FOR THE ASSESSMENT YEAR 20 09-10 AND 2010-11 (ON 12.12.11 AND 21.6.12 RESPECTIVELY) BELATEDLY AN D THAT NO CREDENCE CAN BE GIVEN TO SUCH RETURNS AS THOSE WERE FILED AS AN AFTERTHOUGHT TO CREATE SOURCES. THE A.O. THUS CONCLUDED THAT IMPUG NED INVESTMENT OF ` 20,83,000/- AS UNEXPLAINED AND THE SAME IS ADDED TO THE INCOME OF THE ASSESSEE UNDER THE HAD INCOME FROM OTHER SOURCES. ITA NO.385/VIZAG/2015 VARANASI RAMAKRISHNA, BOBBILI. ` 3 3. ASSESSEE CARRIED MATTER IN APPEAL BEFORE THE CIT (A). IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT THE ASSESSEE F ILED A RETURN OF INCOME FOR A.Y. 2010-11 ON 21.6.12, WHEREIN HE HAS SHOWN THE CAPITAL BALANCE OF ` 9,85,000/- IN THE BALANCE SHEET AS ON 31.3.2010 AN D SUBMITTED THAT THE SAME MAY BE CONSIDERED. IT IS A LSO SUBMITTED THAT ASSESSEE CARRIED REAL ESTATE BUSINESS AND SOLD THE FLATS TO VARIOUS PEOPLE FOR A CONSIDERATION OF ` 12,91,250/- AND SUBMITTED THAT SAME MAY BE CONSIDERED. THE LD. CIT(A) AFTER CONSIDERING THE E XPLANATION OF THE ASSESSEE, HE HAS OBSERVED THAT THE ASSESSEE HAD RAI SED A PLEA DURING THE APPELLATE PROCEEDINGS THAT THE ASSESSEE HAD REC EIVED A SUM OF ` 12,91,250/- TOWARDS SALE OF FLATS, SUCH A PLEA IS N OT RAISED BEFORE THE A.O. EVEN ON MERITS, THE CIT(A) GAVE A FINDING THA T THE ASSESSEE HAS RECEIVED IN THE YEAR 2007 AND NO EVIDENCE IS PRODUC ED THAT THE SAME IS CARRIED TO THE ASSESSMENT YEAR 2010-11 AND USED FOR THE PURPOSE OF INVESTMENT. IN SO FAR AS CAPITAL BALANCE OF ` 9,85,000/- IS CONCERNED, THE LD. CIT(A) HAS OBSERVED THAT THE ASSESSEE FILED RETURN OF INCOME FOR THE A.Y. 2010-11 ONLY ON 21.6.2012, THEREFORE, IT I S AN AFTERTHOUGHT AND NO CREDENCE CAN BE GIVEN, ACCORDINGLY HE HAS CONFIR MED THE ORDER PASSED BY THE A.O. 4. ON BEING AGGRIEVED ASSESSEE CARRIED MATTER IN AP PEAL BEFORE THE TRIBUNAL. ITA NO.385/VIZAG/2015 VARANASI RAMAKRISHNA, BOBBILI. ` 4 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 THE UNEXPL AINED INVESTMENT. IN THE ASSESSMENT ORDER, THE ASSESSEE HAS POINTED OUT THAT THE ASSESSEE HAS NOT GIVEN PROPER EXPLANATION IN RESPECT OF INVE STMENT MADE IN THE IMFL BUSINESS TO THE TUNE OF ` 20,83,000/-. THE ASSESSEE HAS SUBMITTED BEFORE THE A.O. THAT OUT OF ` 20,83,000/-, AN AMOUNT OF ` 9,85,000/- OUT OF CAPITAL BALANCE AVAILABLE WITH HI M AND TO THAT EFFECT HE HAS SUBMITTED THAT RETURNS WERE FILED FOR THE ASSES SMENT YEAR 2009-10 AND 2010-11 ON 12.12.2011 AND 21.6.2012 RESPECTIVEL Y. IN THE ASSESSMENT ORDER, THE A.O. HAS OBSERVED THAT THE RE TURNS WERE FILED BELATEDLY ONLY TO COVER UP THE CASE OF THE ASSESSEE AND DISBELIEVED THE EXPLANATION GIVEN BY THE ASSESSEE. THE SAME WAS CO NFIRMED BY THE CIT(A). BEFORE ME, IT IS SUBMITTED THAT EVEN THOUG H RETURNS ARE FILED BELATEDLY, THE FACT REMAINS IS THAT THE CAPITAL IS AVAILABLE WITH THE ASSESSEE. I FIND THAT WHEN THE A.O. HAS QUESTIONED THE ASSESSEE, THE SOURCE OF THE INVESTMENT HE FILED THE RETURNS FOR 2 009-10 & 2010-11 BELATEDLY I.E. 21.12.2011 AND 21.6.2012 AND EXPLAIN ED THE SOURCE. THE ASSESSEE HAS NOT GIVEN ANY EXPLANATION WHY RETURNS ARE FILED BELATEDLY. THEREFORE, THE SOURCE EXPLAINED BY THE ASSESSEE CAN NOT BE BELIEVED. SO FAR AS THE AMOUNT RECEIVED BY THE ASSESSEE OF ` 12,91,250/- TOWARDS THE ITA NO.385/VIZAG/2015 VARANASI RAMAKRISHNA, BOBBILI. ` 5 SALE OF FLATS, THE ASSESSEE HAS NOT TAKEN THIS PLEA BEFORE THE A.O. THIS PLEA HAS TAKEN FIRST TIME BEFORE THE LD. CIT(A). WH Y THIS PLEA WAS NOT RAISED BEFORE THE A.O. WAS NEITHER EXPLAINED BEFORE THE CIT(A) NOR BEFORE ME. THEREFORE, THE CIT(A) OF THE OPINION TH AT THE PLEA RAISED BEFORE HIM FIRST TIME CANNOT BE ACCEPTED AND THEREF ORE REJECTED. EVEN ON MERITS ALSO, THE CIT(A) HAS OBSERVED THAT THE AS SESSEE HAS RECEIVED SALE PROCEEDS IN THE YEAR 2007 AND THEREFORE HOW TH AT AMOUNT IS RECEIVED IN 2007 AS THE SAME AMOUNT INVESTED IN THE IMFL BUSINESS FOR ASSESSMENT YEAR 2010-11 AND NO EXPLANATION IS GIVEN . THEREFORE, THE CIT(A) WAS OF THE OPINION THAT THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE THE SOURCE OF THE INVESTMENT AND THEREFORE, CONFIRM ED THE SAME. EVEN BEFORE ME, NO EXPLANATION WAS GIVEN AND NO MATERIAL WAS FILED TO SUBSTANTIATE THAT THE SOURCE OF INCOME WHICH IS INV ESTED IN THE IMFL BUSINESS IS THE SALE OF FLATS. IN VIEW OF THE ABOV E, I FIND THAT THE ASSESSEE HAS FAILED TO DISCHARGE THE BURDEN CAST UP ON HIM TO PROVE THAT THE INVESTMENT MADE BY THE ASSESSEE IS FROM HIS OWN FUNDS AND THEREFORE, THE AUTHORITIES BELOW CORRECTLY HELD THA T THE INVESTMENT MADE BY THE ASSESSEE IS INCOME FROM OTHER SOURCES. I FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A). THIS GROUND OF APP EAL RAISED BY THE ASSESSEE IS DISMISSED. ITA NO.385/VIZAG/2015 VARANASI RAMAKRISHNA, BOBBILI. ` 6 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH OCT16. SD/- ( . ) (V. DURGA RAO) /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 26.10.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SHRI VARANASI RAMAKRISHNA, PROP: SATYA WINES, 33-30, MAIN ROAD, BOBBILI. 2. / THE RESPONDENT THE ITO, WARD-1, 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