The DCIT, Circle-5(1), Visakhapatnam V. Sri S Venkata Appa Rao, Visakhapatnam

ITA 412/VIZ/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7173 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-01-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 23-07-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D S SUNDER SINGH
• Assessee Lawyers: N O N E
• Keywords: Additional evidence; Agreed addition
• Section: 68

Judgement Text

ITA 412/V/10 S. V.A. RAO, VSKP IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO. 412 /VIZAG/ 20 10 ASSESSMENT YEAR : 2006 - 07 DCIT CIRCLE - 5(1) VISAKHAPATNAM VS. S. VENKATA APPA RAO VISAKHAPATNAM (APPELLANT) (RESPONDENT) PAN NO.AMNPS 2674K ITA NO.434/VIZAG/2010 ASSESSMENT YEAR : 2006 - 07 SURISETTY VENKATA APPA RAO VISAKHAPATNAM VS. DCIT CIRCLE - 5(1) VISAKHAPATNAM (APPELLANT) (RESPONDENT ) APPELLANT BY: SHRI D.S. SUNDER SINGH, SR.DR RESPONDENT BY: N O N E ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- THESE CROSS APPEALS ARE PREFERRED BY THE ASSESSEE AS WELL AS THE REVENUE AGAINST THE ORDER OF THE CIT(A) PERTAINING TO THE ASSESSMENT YEAR 2006-07. THESE APPEALS WERE TAKEN UP FOR CONSIDERA TION ON 2.3.2011 BUT NONE APPEARED ON BEHALF OF THE ASSESSEES. AN APPLI CATION FOR ADJOURNMENT WAS HOWEVER FILED UNDER THE SIGNATURE OF MR. B.V. R AO, PARTNER OF M/S. B.V. RAO & CO., CHARTERED ACCOUNTANTS, THE COUNSEL OF TH E ASSESSEES. FROM PERUSAL OF RECORD, WE FIND THAT THIS APPEAL WAS FIR ST FIXED FOR HEARING ON 5.10.2010 BUT NONE APPEARED ON BEHALF OF THE ASSESS EES. AN APPLICATION FOR ADJOURNMENT WAS FILED. ACCEDING THE REQUEST OF THE ASSESSEE, THE HEARING WAS ADJOURNED TO 25.11.2010. AGAIN ON 25.11.2010, NONE APPEARED ON BEHALF OF THE ASSESSEE AND A REQUEST FOR ADJOURNMEN T WAS FILED WHICH WAS ALSO ACCEDED TO AND THE HEARING WAS ADJOURNED TO 2. 12.2010. AGAIN ON 2.12.2010, NONE APPEARED ON BEHALF OF THE ASSESSEE AND AN APPLICATION FOR ITA 412/V/10 S. V.A. RAO, VSKP 2 ADJOURNMENT WAS FILED AND THE HEARING WAS ACCORDING LY ADJOURNED TO 20.1.2011. SIMILAR WAS THE POSITION ON 20.1.2011 A S NONE APPEARED ON BEHALF OF THE ASSESSEES AND AN APPLICATION FOR ADJO URNMENT WAS FILED. AGAIN THE HEARING WAS ADJOURNED TO 2.3.2011. WE HAVE CAR EFULLY PERUSED THE ADJOURNMENT APPLICATIONS FILED BY THE ASSESSEES AND THE FACTS THAT THOUGH ASSESSEE AS WELL AS HIS COUNSELS ARE LOCAL AND STAT IONED IN VISAKHAPATNAM, YET THEY DID NOT TAKE ANY TROUBLE TO APPEAR BEFORE THE TRIBUNAL ON ANY DATE OF HEARING AND NOTICED THAT ONLY THE APPLICATIONS F OR ADJOURNMENT WERE RECEIVED IN THE OFFICE. THE ATTITUDE OF THE ASSESS EE AND HIS COUNSEL ADOPTED IN PROSECUTING THE PRESENT APPEALS CANNOT BE APPREC IATED. IT AMOUNTS TO A DISRESPECT TO THE INSTITUTION. WE THEREFORE, CANNO T ALLOW THE ASSESSEE TO CARRY AN IMPRESSION THAT WHENEVER THE MATTER IS LIS TED FOR HEARING BEFORE THE TRIBUNAL, NO NEED TO MAKE AN APPEARANCE IN PERSON O R THROUGH COUNSEL BEFORE THE TRIBUNAL AND ADJOURNMENT CAN BE OBTAINED SIMPLY BY SENDING A LETTER FOR ADJOURNMENT. WE THEREFORE REJECTED THE REQUEST FOR ADJOURNMENT OF THE ASSESSEE AND HEARD THE REVENUE AFTER PROCEEDING EX-PARTE AGAINST THE ASSESSEE. 2. SINCE BOTH THESE APPEALS WERE HEARD TOGETHER, WE PREFER TO ADJUDICATE THEM ONE AFTER THE OTHER. ITA NO.412 OF 2010: 3. THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAIN ST THE ORDER OF THE CIT(A) ON A SOLITARY GROUND THAT CIT(A) HAS ERRED I N ALLOWING RELIEF TO THE ASSESSEE BY DELETING THE ADDITIONS MADE ON ACCOUNT OF UNSECURED LOAN OF RS.12,50,000/- HOLDING THAT THE CREDITWORTHINESS OF LOAN CREDITORS WERE ESTABLISHED. 4. FROM A CAREFUL PERUSAL OF THE ORDER OF THE AUTHO RITIES BELOW IN THE LIGHT OF REVENUES CONTENTION, WE FIND THE ADDITION OF RS .12,50,000/- WAS MADE BY THE A.O. U/S 68 OF THE I.T. ACT ON THE GROUND THAT THE ASSESSEE COULD NOT ITA 412/V/10 S. V.A. RAO, VSKP 3 SUBMIT CONFIRMATION LETTER FROM THE LOAN CREDITOR O F SHRI BULUSU BALASUBRAMANYAM. BEFORE THE CIT(A), IT WAS CONTEND ED THAT THE LOAN WAS GIVEN OUT OF THE PROCEEDS OF HIS INVESTMENT IN USA TO THE TUNE OF RS.10,93,531/- WHICH WAS TRANSFERRED TO HIS HDFC AC COUNT ON 2.9.2005. THE BALANCE AMOUNT OF RS.2 LAKHS WAS STATED TO BE PAID OUT OF HIS INDIAN INCOME. THIS ADDITIONAL EVIDENCE WAS SENT TO THE ASSESSING OFFICER FOR VERIFICATION BY THE CIT(A) AND THE A.O. VIDE LETTER DATED 17.2.2010 HAS SUBMITTED THAT THE CONFIRMATION FURNISHED BY THE ASSESSEE WAS PHOTOCOP IES WHICH DOES NOT PROVE THE GENUINENESS OF THE CLAIM. THE CIT(A) REL YING UPON THIS ADDITIONAL EVIDENCE ALLOWED THE RELIEF TO THE ASSESSEES AND DE LETED THE ADDITIONS. 5. NOW THE LD. D.R. HAS CONTENDED THAT THE A.O. COU LD NOT MAKE THE PROPER VERIFICATION OF THE ADDITIONAL EVIDENCE AS I T WAS NOT SUBMITTED IN ORIGINAL. THE PHOTOCOPIES ARE SECONDARY EVIDENCE W HICH CANNOT BE ADMITTED AS EVIDENCE UNLESS AND UNTIL IT IS PROVED THAT THE PRIMARY EVIDENCE IS NOT AVAILABLE. 6. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM CARE FUL PERUSAL OF THE RECORD, WE FIND THAT THE ORIGINAL DOCUMENTS WERE NO T SUBMITTED TO THE ASSESSING OFFICER FOR VERIFICATION. WE ALSO FIND F ORCE IN THE CONTENTION OF THE REVENUE THAT THE SECONDARY EVIDENCE CAN ONLY BE ADM ISSIBLE IF IT IS PROVED THAT THE PRIMARY EVIDENCE CANNOT BE PRODUCED. NOTH ING HAS BEEN BROUGHT ON RECORD BY THE CIT(A) AS TO HOW HE HAS ACCEPTED PHOT OCOPIES OF THE CONFIRMATION LETTERS ETC. THEREFORE, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES A FRESH ADJUDICATION BY THE A.O. WE ACCOR DINGLY SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE A.O. TO RE-EXAMINE THE ISSUE AFTER MAKING A PROPER VERIFICATION. THE ASSESSEE IS ALSO DIRECTED TO PRODUCE THE ORIGINAL DOCUMENTS FOR THE VERIFICATION BEFORE THE A.O. OR T O BRING SOME EVIDENCE ON RECORD THAT ORIGINAL EVIDENCE/PRIMARY EVIDENCE COUL D NOT BE PRODUCED. ITA 412/V/10 S. V.A. RAO, VSKP 4 ITA NO.434 OF 2010: 7. THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) MAINLY ON TWO GROUNDS. FIRST GROUND RELATE TO THE DISALLOWANCE OF TRANSPORT CHARGES PAID AT RS.9,61,478/-. THE FACTS BORNE OUT IN THIS REGARD FROM THE RECORD ARE THAT THE ASSESSEE HAS CLAIMED T HE FREIGHT CHARGES ON DIFFERENT TRUCKS TO THE TUNE OF RS.1,60,24,633/-. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE BILLS AND VOUCHERS IN R ESPECT OF THESE FREIGHT CHARGES BUT HE COULD NOT PRODUCE THE SAME. THE ASS ESSING OFFICER ACCORDINGLY DISALLOWED THE 6% OF TOTAL EXPENDITURE AT RS.9,61,478/-. THIS DISALLOWANCE WAS CONFIRMED BY THE CIT(A). NOW THE APPEAL HAS BEEN PREFERRED BY THE ASSESSEE BEFORE US. DURING THE CO URSE OF HEARING, THE LD. D.R. HAS INVITED OUR ATTENTION TO THE ORDER OF THE ASSESSING OFFICER WITH THE SUBMISSION THAT THESE ARE THE AGREED ADDITIONS AS T HE ASSESSEE HAS AGREED BEFORE THE ASSESSING OFFICER FOR THE SAID DISALLOWA NCE. THEREFORE, NO APPEAL CAN BE ENTERTAINED AGAINST THE AGREED ADDITIONS. 8. WE HAVE CAREFULLY EXAMINED THE ORDER OF THE LOWE R AUTHORITIES ON THIS ISSUE AND WE FIND THAT THE ASSESSEE COULD NOT PLACE THE RELEVANT BILLS AND VOUCHERS OF THE SAID EXPENDITURES AND THE ASSESSING OFFICER HAS MADE THE DISALLOWANCE OF 6% ON TOTAL EXPENDITURES TO WHICH T HE ASSESSEE HAS AGREED BEFORE THE A.O. THEREFORE, IT IS AN AGREED ADDITIO N BUT IN ANY CASE, THE ASSESSEE HAS NOT PLACED ANY EVIDENCE BEFORE US TO E XPLAIN THE FREIGHT CHARGES. THEREFORE, WE FIND NO INFIRMITY IN THE AD DITIONS CONFIRMED BY THE CIT(A). 9. NEXT GROUND RELATE TO THE DISALLOWANCE OF SALARI ES OF RS.50,000/-. IN THIS REGARD, THE FACTS BORNE OUT FROM THE RECORD AR E THAT THE ASSESSEE HAS ADOPTED THE SUM OF RS.6,24,000/- TOWARDS SALARIES. HOWEVER, HE WAS NOT ABLE TO PRODUCE THE ACQUAINTANCE REGISTER OR VOUCHE RS FOR THIS EXPENDITURE. THE A.O. ACCORDINGLY DISALLOWED A LUMPSUM AMOUNT OF RS.50,000/- IN THIS REGARD TO WHICH ASSESSEE HAS AGREED BEFORE THE A.O. THOUGH THE APPEAL WAS FILED BEFORE THE CIT(A) BUT HE DID NOT FIND FAVOUR WITH HIM. NOW THE ITA 412/V/10 S. V.A. RAO, VSKP 5 ASSESSEE IS BEFORE US BUT NOTHING IS PLACED ON RECO RD TO PROVE THE AFORESAID EXPENDITURE. MOREOVER, THIS IS AN AGREED ADDITION. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) AND WE CONFIRM THE SAME ON THIS ISSUE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED AND THAT OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 4.3.2011 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 4 TH MARCH, 2011 COPY TO 1 THE DCIT, CIRCLE - 5(1), VISAKHAPATNAM 2 SRI S. VENKATA APPA RAO,C/O B.V. RAO & CO., CHARTER ED ACCOUNTANTS, FF - 1, 49-28-12, SATYA LAKSHMI VINAYAKATOWERS, MADHURANAGA R, VISAKHAPATNAM- 16. 3 THE CI T, VISAKHAPATNAM 4 THE CIT (A) , VISAKHAPTNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM