Sri Shaik Rafi, Vijayawada V. The ITO, Ward-1(1), Vijayawada

ITA 39/VIZ/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 2633 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-12-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 25-01-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T L PETER
• Keywords: Peak credit; Onus to prove
• Section: 68

Judgement Text

ITA NO.39 OF 2010 SHAIK RAFI VIJAYAWADA PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO. 39/VIZAG/2010 ASSESSMENT YEAR:2006-07 SHAIK RAFI, VIJAYAWADA VS. ITO WARD-1(1) VIJAYAWADA (APPELLANT) PAN NO: AGMPS 9233 D (RESPONDENT) APPELLANT BY: SHRI G.V.N. HARI, CA RESPONDENT BY: SHRI T.L. PETER, DR ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 12.11.2009 PASSED BY LEARNED CIT(A), VIJAYAWADA AND IT RELATES TO THE ASSESSMENT YEAR 2006-07. THE ASSESSEE IS ASSAILING THE DECISION OF THE LEARNED CIT (A) IN CONFIRMING THE ADDITION OF RS.20 ,96,729/- UNDER SECTION 68 OF THE ACT. 2. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATI ON DECLARING A TOTAL INCOME OF RS.98,476/-. HIS CASE WAS TAKEN UP FOR SC RUTINY AND THE ASSESSING OFFICER FOUND OUT THAT THE ASSESSEE WAS M AINTAINING A BANK ACCOUNT WITH THE HDFC BANK LTD BESIDES THE ACCOUNT MAINTAINED WITH THE ICICI BANK. THE ASSESSING OFFICER NOTICED THAT THE ASS ESSEE HAS CARRIED OUT HUGE TRANSACTIONS IN BOTH THE BANK ACCOUNTS. WHEN Q UESTIONED, THE ASSESSEE COULD NOT EXPLAIN THE TRANSACTIONS PROPERL Y AND HENCE THE ASSESSING OFFICER COMPLETED THE ASSESSMENT BY MAKIN G ADDITION TOWARDS THE DEPOSITS FOUND CREDITED IN THE TWO BANK ACCOUNT S. IN THE APPEAL ITA NO.39 OF 2010 SHAIK RAFI VIJAYAWADA PAGE 2 OF 3 PREFERRED BEFORE THE LEARNED CIT (A), THE ASSESSEE FILED CERTAIN DETAILS ON WHICH THE LEARNED CIT (A) CALLED FOR A REMAND REPOR T FROM THE ASSESSING OFFICER. DURING THE REMAND PROCEEDINGS IT WAS NOTIC ED THAT THE ASSESSEE HAD AVAILED CREDIT OF RS.39,45,973/- FROM A PERSON NAMED SHRI T. SRINIVASA RAO AND THE ASSESSEE COULD NOT SUBMIT THE CONFIRMAT ION LETTER FROM THE SAID CREDITOR. ACCORDINGLY THE ASSESSING OFFICER RECOMME NDED FOR ADDITION OF RS.39,45,973/- TO THE TOTAL INCOME OF THE ASSESSEE. HOWEVER BEFORE THE LEARNED CIT (A) THE ASSESSEE PLEADED THAT THE PEAK CREDIT AVAILED FROM SHRI T. SRINIVASA RAO WAS ONLY RS.20,96,729/-. THE ASSES SEE ALSO PLEADED FOR THE DELETION OF THE SAID ADDITION ON THE GROUND THAT TH E LOAN WAS BORROWED THROUGH CHEQUES. HOWEVER, THE LEARNED CIT (A) SUSTA INED THE ADDITION TO THE EXTENT OF PEAK CREDIT OF RS.20,96,729/-. AGGRIE VED BY THIS DECISION OF THE LEARNED CIT (A), THE ASSESSEE IS IN APPEAL BEFO RE US. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND ALSO PER USED THE RECORD. THE LEARNED AUTHORISED REPRESENTATIVE VEHEMENTLY RE ITERATED THE SUBMISSIONS MADE BEFORE THE FIRST APPELLATE AUTHORI TY. ON THE CONTRARY, THE LEARNED DEPARTMENTAL REPRESENTATIVE POINTED OUT THA T THE ADDITION HAS TO BE SUSTAINED AS THE ASSESSEE HAS FAILED TO DISCHARG E THE BURDEN OF PROOF PLACED UPON HIM UNDER SECTION 68 OF THE ACT. 4. WE NOTICE THAT THE ASSESSEE COULD NOT PRODUC E THE CONFIRMATION LETTER FROM THE SAID CREDITOR. IT IS NOW WELL ESTABLISHED PROPOSITION THAT THE ASSESSEE HAS TO DISCHARGE THE PRIMARY ONUS PLACED U PON HIM UNDER SECTION 68 OF THE ACT IN RESPECT OF THE CASH CREDITS I.E. T HE ASSESSEE HAS TO PROVE THE IDENTITY OF THE CREDITOR, CREDIT WORTHINESS OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTIONS. IF THE ASSESSEE FAI LS TO PROVE ANY ONE OF THE THREE MAIN INGREDIENTS STATED ABOVE, THE CASH C REDITS IS LIABLE TO BE ADDED AS THE INCOME OF THE ASSESSEE AS PER THE PROV ISIONS OF SECTION 68 OF THE ACT. IN THE INSTANT CASE, THOUGH THE ASSESSEE H AS OBTAINED THE IMPUGNED LOANS BY WAY OF BANK CHEQUES, YET THE ASSE SSEE HAS FAILED TO ITA NO.39 OF 2010 SHAIK RAFI VIJAYAWADA PAGE 3 OF 3 PROVE THE IDENTITY AND CREDITWORTHINESS OF THE CRED ITOR. SINCE THE ASSESSEE HAS FAILED TO DISCHARGE THE BURDEN OF PROOF PLACED UPON HIM, WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF THE LEARNED CIT (A ) IN SUSTAINING THE IMPUGNED ADDITION OF RS.20,96,729/- MADE UNDER SECT ION 68 OF THE ACT. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON 8 TH DECEMBER, 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE: 08-12-2010 COPY TO 1 SHRI SHAIK RAFI S/O SHAIK RASOOL, MANAGER, HOTEL MANORAMA, MG ROAD, VIJAYAWADA 2 THE ITO WARD-1(1) VIJAYAWADA 3 4. THE CIT VIJAYAWADA THE CIT(A), VIJAYAWADA 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM