Smt T Parama Pavani, Hyderabad V. The ACIT, Circle-3, Vijayawada

ITA 397/VIZ/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 2813 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-09-2010
• Assessment Year: misc
• Appeal Filed On: 29-07-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUBRATA SARKAR
• Keywords: Block assessment

Judgement Text

ITA NO.397 OF 09 T. PARAMA PAVANI, HYDERABAD PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.397/VIZAG/2009 ASSESSMENT YEAR: B.P 1.4.1985 TO 12-9-1995 T. PARAMA PAVANI, HYDERABAD VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-3, VIJAYAWADA (APPELLANT) PAN NO:AFCPT 1596 D (RESPONDENT) APPELLANT BY: SHRI C. SUBRAHMANYAM, CA RESPONDENT BY: SHRI SUBRATA SARKAR, CIT(DR) ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 27-03-2002 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE- 2(1), VIJAYAWADA AND IT RELATES TO THE BLOCK PERIOD FROM 1.4.1985 TO 12-9-1995. 2. THERE IS A DELAY OF 2621 DAYS IN FILING THE PRES ENT APPEAL. IT WAS SUBMITTED THAT THE ORIGINAL ASSESSMENT IN THE HANDS OF THE ASSESSEE WAS COMPLETED U/S 158BC ON 27-9-1996. AGAINST THE SAID ASSESSMENT ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE THE ITAT, HYDERABA D BENCH AS PER THE PROVISIONS OF LAW THEN EXISTING. THE TRIBUNAL, VIDE ITS ORDER DATED 27-5-1999 SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING O FFICER AND CONSEQUENTLY THE ASSESSING OFFICER COMPLETED THE ASSESSMENT ON 2 7-3-2002. AGAINST THE SAID ASSESSMENT ORDER, THE ASSESSEE SHOULD HAVE FIL ED AN APPEAL DIRECTLY BEFORE THE ITAT. HOWEVER, THE ASSESSEE WRONGLY FIL ED THE APPEAL BEFORE THE CIT(A). WHEN THE SAID APPEAL WAS DISPOSED OF B Y THE LEARNED CIT(A), THE DEPARTMENT PREFERRED APPEAL BEFORE ITAT CHALLEN GING THE ORDER OF THE ITA NO.397 OF 09 T. PARAMA PAVANI, HYDERABAD PAGE 2 OF 5 LEARNED CIT(A). THE MISTAKE OF THE ASSESSEE WAS PO INTED OUT TO THE TRIBUNAL AND ACCORDINGLY THE TRIBUNAL, VIDE ITS ORD ER DATED 21-8-2008, SET ASIDE THE ORDER OF THE LEARNED CIT (A) SINCE THE FI RST APPELLATE AUTHORITY DID NOT HAVE POWER TO ADJUDICATE THE APPEAL FILED BY TH E ASSESSEE IN ACCORDANCE WITH THE PROVISIONS THEN EXISTING. REALIZING THE M ISTAKE, THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL AN D THE DELAY OF 2621 DAYS HAS OCCURRED FOR THE REASONS STATED ABOVE. TH E LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE DELAY IS IN TECHN ICAL IN NATURE AND ACCORDINGLY PLEADED THAT THE SAME MAY BE CONDONED. IT IS NOTICED THAT THE ASSESSEE HAS FILED THE APPEAL ON 29-7-2009 WHEREAS THE ORDER OF THE TRIBUNAL SETTING ASIDE THE ORDER OF THE CIT (A) WAS PASSED ON 21-8-2008. IN THIS CONNECTION THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE SHRI C. SUBRAHMANYAM, CHARTERED ACCOUNTANT HAS FILED AN AFF IDAVIT EXPLAINING THE DELAY SINCE AUGUST, 2008. IN THE AFFIDAVIT IT IS ST ATED THAT THE ORDER WAS RECEIVED BY THE AUTHORISED REPRESENTATIVE ON 1-9-20 08. HOWEVER, IT WAS NOTICED THAT THE ASSESSEE WAS NOT AVAILABLE AT THE ADDRESS GIVEN AT VIJAYAWADA. HENCE THE AUTHORISED REPRESENTATIVE COU LD NOT CONTACT THE ASSESSEE IMMEDIATELY ON RECEIPT OF THE ORDER OF THE TRIBUNAL. IN THE MEANWHILE THE ASSESSEE CONTACTED THE AUTHORISED REP RESENTATIVE IN JULY 2009 AND AT THAT TIME IT CAME TO BE KNOWN THAT THE ASSESSEE HAD SHIFTED HER RESIDENCE FROM VIJAYAWADA TO HYDERABAD. THEREAF TER THE LEARNED AUTHORISED REPRESENTATIVE APPRAISED THE MATTER TO T HE ASSESSEE AND ACCORDINGLY THE APPEAL PAPERS WERE PRESENTED TO THE TRIBUNAL ON 29-7- 2009. THUS THE LEARNED AUTHORISED REPRESENTATIVE P LEADED THAT THE DELAY IN FILING THE APPEAL WAS FOR GENUINE REASONS. WE H AVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO IN THIS REGARD, WH O SUBMITTED THAT THE REASONS STATED BY THE ASSESSEE ARE VERY VAGUE IN NA TURE. AS SUBMITTED BY THE LEARNED A.R, THE DELAY UP TO AUGUST, 2008 WAS T ECHNICAL IN NATURE AND THE REASONS FOR THE DELAY THEREAFTER HAVE BEEN EXPL AINED BY THE LEARNED. A.R. HAVING REGARD TO THE SUBMISSIONS MADE BY THE ASSESSEE, WE CONDONE THE DELAY AND ADMIT THE APPEAL. ITA NO.397 OF 09 T. PARAMA PAVANI, HYDERABAD PAGE 3 OF 5 3. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT HE IS NOT PRESSING GROUND NUMBER 1.0, 1.1 AND 1.2 AND HENCE T HEY WERE DISMISSED AS WITHDRAWN. GROUND NO.1.4 AND 1.5 ARE GENERAL IN NAT URE AND HENCE DO NOT REQUIRE ADJUDICATION. THUS, THE ONLY ISSUE URGED IN THE APPEAL IS WITH REGARD TO THE ADDITION OF RS.6,58,236/-. 4. THE FACTS RELATING TO THE SAID ISSUE ARE STATED IN BRIEF. THE ASSESSEE IS A SHARE BROKER CARRYING ON BUSINESS IN THE NAME OF PAVANI CONSULTANTS. DURING THE COURSE OF SEARCH CARRIED IN THE PREMISES OF A PERSON NAMED SHRI P. SRINIVAS, CERTAIN DOCUMENTS PERTAINING TO THE AS SESSEE WERE FOUND. ACCORDINGLY NOTICE WAS ISSUED U/S 158BD OF THE INCOM E TAX ACT AND THE BLOCK ASSESSMENT WAS COMPLETED ON 27-9-1996 DETERMI NING THE UNDISCLOSED INCOME AT RS.7,88,880/-, WHICH CONSISTED OF AN ADDI TION OF RS.6,58,236/- UNDER THE HEAD PROFIT SUPPRESSED-1993-94. THE ASS ESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND PLEADED THAT THE AMO UNT OF RS.6,58,236/- REPRESENTS LOAN BORROWED BY HER AND SHARES PURCHASE D ON BEHALF OF HER CLIENTS. THE ASSESSEE ALSO SUBMITTED CERTAIN NEW D OCUMENTS BEFORE THE TRIBUNAL. ACCORDINGLY, THE TRIBUNAL SET ASIDE THE MATTER RELATING TO THE ADDITION OF RS.6,58,236/-, VIDE ITS ORDER DATED 27- 05-1999, WITH THE FOLLOWING OBSERVATIONS: WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH TH E ORDER OF THE ASSESSING OFFICER. CONSIDERING THE FACTS ON RECORD, WE FIND CONSIDERABLE FORCE IN THE ORDER OF THE ASSESSI NG OFFICER THAT IF THE ASSESSEES CLAIM THAT SHE BORROWED MONE Y, IT WAS NOT DIFFICULT FOR THE ASSESSEE TO GIVE DETAILS AT L EAST FROM WHOM SHE HAD ACQUIRED THE LOAN. IF THE ASSESSEE PURC HASED THE SHARES ON BEHALF OF THE CLIENTS, IT WAS NOT DIF FICULT FOR HER TO GIVE THE DETAILS ON BEHALF OF WHOM THE PURCHASES WERE MADE, EVEN IF THE ASSESSEE FAILED TO MENTION THE RE CEIPT OF COMMISSION. IN THE ABSENCE OF ANY MATERIAL BROUGHT B EFORE US IN THE FORM OF EVIDENCE TO SHOW THAT THE ASSESSEE H AD IN FACT PURCHASED ANY THING ON BEHALF OF THEN CLIENTS AND A LSO CONSIDERING THE ASSESSEE COULD NOT GIVE AT THIS STA GE ANY EVIDENCE REGARDING OBTAINING LOAN, WE ARE NOT INCLI NED TO ACCEPT THE SAME. HOWEVER, SINCE THE ASSESSEE HAS PR ODUCED ITA NO.397 OF 09 T. PARAMA PAVANI, HYDERABAD PAGE 4 OF 5 THE LEDGER COPY FOR THE PERIOD FROM 01-04-1992 TO 3 1-3-1993 WHICH WAS NOT BEFORE THE ASSESSING OFFICER, WHICH W AS TAKEN FROM THE COMPUTER DISK OF SHRI P. SRINIVAS, WE REMA ND THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ISSUE IN ACCORDANCE WITH THE MERITS, GIVING THE ASS ESSEE AN OPPORTUNITY TO EXPLAIN THE SOURCE AND DETAILS, IF A NY. 5. CONSEQUENT TO THE ORDER OF THE TRIBUNAL, THE A.O . PROCEEDED TO COMPLETE THE ASSESSMENT. BEFORE THE ASSESSING OFFIC ER, THE ASSESSEE DID NOT FILE THE NAME AND ADDRESS OF LENDERS AND THE CL IENTS ON WHOSE BEHALF THE SHARES WERE CLAIMED TO HAVE BEEN PURCHASED. ACC ORDINGLY, THE ASSESSING OFFICER SUSTAINED THE ADDITION OF RS.6,58 ,236/- WITH THE FOLLOWING OBSERVATIONS: I HAVE THOROUGHLY VERIFIED THE COPIES OF LEDGER AC COUNTS FURNISHED BY THE ASSESSEE. THEY CONTAIN ONLY DATE A ND NATURE OF SHARE AND VALUE. EXCEPT THAT, THERE ARE NO OTHER DETAILS. FURTHER, ON THOROUGH EXAMINATION OF THE EXPLANATION FURNISHED BY THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE IT IS OBSERVED THAT THE ASSESSEE COULD NOT FURNISH THE INFORMATION WHICH IS REQUIRED TO CARRY OUT THE DIRECTIONS OF THE ITAT. T HE ASSESSEE IS ASSESSED TO TAX AND SHE IS WELL AWARE OF THE PRO VISIONS OF INCOME-TAX ACT I.E. MAINTENANCE OF BOOKS OF ACCOUNT SUCH AS DAY BOOK LEDGER WHICH ARE ESSENTIAL FOR A PRUDENT B USINESS MAN TO CARRY OUT THE DAY TO DAY TRANSACTIONS. HAD S HE PURCHASED THE SHARES OF THE VALUE OF RS.6,19,068/- AND LOANS OF RS.39,168/-, THE TRANSACTIONS SHOULD HAVE BEEN E NTERED IN THE DAY BOOK AND LEDGER WHICH IS A CONCRETE EVIDENC E TO SUBSTANTIATE THE CLAIM OF THE ASSESSEE THAT THE AMO UNTS SHOWN REPRESENT P FOR PURCHASES AND L FOR LOANS. INSPITE O F FURNISHING THE DAY BOOK AND LEDGER, THE ASSESSEES AUTHORISED REPRESENTATIVE SIMPLY STATED THAT FLOPPIES ARE MAIN TAINED AND AGREED THAT THERE WAS NO SEPARATE BOOKS OF ACCOUNT. IN THE ABSENCE OF SUCH BOOKS OF ACCOUNT AND PROPER EVIDENC E, THE ASSESSEES CLAIM THAT THE AMOUNT SHOWN OF RS.6,19,0 68/- AS PURCHASES AND RS.39,168/- AS LOANS CANNOT BE ACCEPT ED AD THESE AMOUNTS MAY BE TREATED AS PROFIT AS TREATED B Y THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT ORDER . 6. DURING THE COURSE OF HEARING BEFORE US, THE LEAR NED AUTHORISED REPRESENTATIVE INVITED OUR ATTENTION TO A CERTIFICA TE ISSUED BY VIJAYAWADA SHARE BROKER WELFARE ASSOCIATION AND COPIES OF CONT RACTS FOR SHARE ITA NO.397 OF 09 T. PARAMA PAVANI, HYDERABAD PAGE 5 OF 5 TRANSACTION AND SUBMITTED THAT THE ASSESSEE HAD CAR RIED OUT THE SHARE TRANSACTIONS ON BEHALF OF THE CLIENTS. HOWEVER, IT IS NOTICED THAT THE CONTRACTS FOR SHARE TRANSACTIONS DID NOT DEPICT THE NAME OF THE CLIENTS ON WHOSE BEHALF THEY WERE CARRIED OUT. SO IS THE CASE WITH THE CERTIFICATE ISSUED BY THE ASSOCIATION. THUS, THE ASSESSEE COUL D NOT FURNISH THE DETAILS OF NAMES AND ADDRESSES OF THE LENDERS AND CLIENTS A ND HENCE THE A.O HAS REJECTED THE CLAIM OF THE ASSESSEE AND SUSTAINED TH E ADDITION OF RS.6,58,236/-. IN THE ABSENCE OF ANY OTHER DETAILS, WE ARE ALSO UNABLE TO INTERFERE WITH THE ORDER PASSED BY THE A.O. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON 27 TH SEPTEMBER, 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE: 27-09-2010 COPY TO 1 SMT. T. PARAMA PAVANI, W/O T. RAVI KUMAR, DR. NO. 7-1-396, FLAT NO.303, SIDDARTHANAGAR, VYSALI APTS., SR NAGAR, HYD ERABAD 500038 2 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2 (1) VIJAYAWADA 3 THE CIT VIJAYAWADA 4 THE DR, ITAT, VISAKHAPATNAM. 5 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM