Sri Adapa Sai Ram, Rajam V. THE ITO, Srikakulam

ITA 414/VIZ/2015

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9666 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 28-12-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R V ARAVINDHAKSHAM
• Assessee Lawyers: K V R K SHARMA
• Keywords: Rejection of books of accounts; Unexplained investment; Source of fund; Onus to prove
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER ITA NO. 414 / VIZ /201 5 (ASST. YEAR : 20 11 - 1 2 ) SRI ADAPA SAI RAM, D.NO. 5 - 15, MANDI STREET, RAJAM, SRIKAKULAM DISTRICT. VS. ITO, WARD - 1, SRIKAKULAM. PAN NO. AMSPA 1188 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.V.R.K. SHARMA ADV. DEPARTMENT BY : SHRI R.V. ARAVINDHAKSHAM - DR DATE OF HEARING : 17 / 1 0 /201 6 . DATE OF PRONOUNCEMENT : 21 / 12 /201 6 . O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 2 , VISAKHAPATNAM , DATED 27/11 /201 5 FOR THE ASSESSMENT YEAR 2011 - 12 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE HAS CARRIED ON IMFL BUSINESS , FILED HIS RETURN OF INCOME BY DECLARING TOTAL INCOME OF RS. 2,49,950/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE C OULD NOT PRODUCE THE STOCK REGISTER AND OTHER BOOKS OF ACCOUNT , T HEREFORE, HE REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE PROFIT AT 20% ON STOCK PUT TO SALE. ON APPEAL, THE LD. CIT(A ) HAS SCAL ED DOWN THE ESTIMATION FROM 20% TO 10% AND DIRECTE D THE ASSESSING OFFICER TO RE - COMPUTE THE PROFIT AT 10% OF PURCHASE PRICE . 2 ITA NO. 414 / VIZ /201 5 3. ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. AT THE TIME OF HEARING, THE LEARNED C OUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL WHERE THE TRIBUNAL HAS SCALED DOWN THE ESTIMATION OF PROFIT FROM 10% TO 5% IN THE CASE OF TANGUDU JOGISETTY IN ITA NO.96/VIZAG/2016 BY ORDER DATED 2.6.2016. 4. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDER S PASSED BY THE AUTHORITIES BEL OW. 5. I HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS ESTIMATION OF PROFIT IN RESPECT OF IMFL BUSINESS CARRIED BY THE ASSESSEE. IN T HIS RESPECT, THE COORDINATE BENCH OF TH IS TRIBUNAL IN THE CASE OF TANGUDU JOGISETTY (SUPRA) HAS CONSIDERED THE PROFIT LEVEL IN THE LINE OF BUSINESS AND DECIDED THAT 5% OF PURCHASE PRICE IS REASONABLE PROFIT MARGIN IN THE LINE OF IMFL BUSINESS AND DIRECTED THE ASSESSING OFFICER TO RE - COMPUTE THE PROFIT OF THE ASSESSEE. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED AS UNDER: 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE A.O. ESTIMATED NET PROFIT OF 20% ON STOCK PUT FOR SALE. THE A.O. WAS OF THE OPINION THAT THE ASSESSEE HAS NOT MAINTAINED PROPER BOOKS OF ACCOUNTS AND VOUCHERS IN SUPPORT OF PURCHASES AND SALES. THE A.O. FURTHER OBSERVED THAT THE ASSESSEE HAS FAILED TO M AINTAIN STOCK REGISTERS AND BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE ARE NOT SUSCEPTIBLE FOR VERIFICATION, THEREFORE REJECTED THE BOOKS OF ACCOUNTS AND ESTIMATED NET PROFIT OF 20% BY RELYING UPON THE DECISION OF HONBLE A.P. HIGH COURT. IT IS THE CONT ENTION OF THE ASSESSEE THAT THE NET PROFIT ESTIMATED BY THE A.O. IS QUITE HIGH WHEN COMPARED TO THE NATURE OF BUSINESS CARRIED ON BY THE ASSESSEE. IT IS FURTHER SUBMITTED THAT THE CASE LAW RELIED UPON BY THE ASSESSEE IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THE CASE BEFORE THE HONBLE A.P. HIGH COURT WAS THAT THE ASSESSEE IS INTO THE BUSINESS OF TRADING IN ARRACK, WHEREAS IT IS IN THE BUSINESS OF DEALING IN IMFL. THE ASSESSEE FURTHER CONTENDED THAT IMFL TRADE WAS CONTROLLED BY THE STATE GOVER NMENT 3 ITA NO. 414 / VIZ /201 5 THROUGH A.P. STATE BEVERAGES CORPORATION LTD. AND THE PRICES OF THE PRODUCTS ARE FIXED BY THE STATE GOVERNMENT. THE ASSESSEE BEING A LICENSE HOLDER OF STATE GOVERNMENT CANNOT SELL THE PRODUCTS OVER AND ABOVE THE MRP FIXED BY THE STATE GOVERNMENT. W E FIND FORCE IN THE ARGUMENTS OF THE ASSESSEE FOR THE REASON THAT THE A.O. HAS ESTIMATED THE NET PROFIT BY RELYING UPON THE DECISION OF A.P. HIGH COURT IN THE CASE OF CIT VS. R. NARAYANA RAO IN ITA NO.3 OF 2003 WHICH IS RENDERED UNDER DIFFERENT FACTS. THE A.P. HIGH COURT HAS CONSIDERED THE CASE OF AN ARRACK DEALER, WHEREAS, THE ASSESSEE IS INTO THE BUSINESS OF DEALING IN IMFL. THEREFORE, WE ARE OF THE VIEW THAT THE A.O. WAS NOT JUSTIFIED IN RELYING UPON THE JUDGEMENT, WHICH WAS RENDERED UNDER DIFFERENT FA CTS TO ESTIMATE THE NET PROFIT. ON THE OTHER HAND, THE LD. A.R. FOR THE ASSESSEE, RELIED UPON THE DECISION OF ITAT, VISAKHAPATNAM BENCH IN THE CASE OF T. APPALASWAMY VS. ACIT IN ITA NO.65 & 66/VIZAG/2012. WE HAVE GONE THROUGH THE CASE LAWS RELIED UPON BY THE ASSESSEE IN THE LIGHT OF THE FACTS OF THE PRESENT CASE AND FINDS THAT THE COORDINATE BENCH OF THIS TRIBUNAL, UNDER SIMILAR CIRCUMSTANCES HELD THAT ESTIMATION OF 5% NET PROFIT ON PURCHASES IS REASONABLE. THE RELEVANT PORTION OF THE ORDER IS REPRODUCED HEREUNDER: 3. WE HAVE HEARD THE PARTIES, PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. IT IS THE CONTENTION OF THE LD. A.R. THAT THE ESTIMATION OF PROFIT AT 16% IS HIGH AND EXCESSIVE CONSIDERING THE NORMAL RATE OF PROFIT IN THIS LINE OF BUSINESS. WHEREAS, THE LD. D.R. SUPPORTED THE ORDER OF THE CIT(A). HAVING CONSIDERED THE SUBMISSIONS OF THE ASSESSEE, WE ARE OF THE VIEW THAT THE ISSUE IS NO MORE RES INTEGRA IN VIEW OF A SERIES OF DECISIONS OF THE ITAT HYDERABAD B ENCH IN SIMILAR CASES. THE COORDINATE BENCH IN CASE OF ITA NO.127/HYD/12 AND OTHERS DATED 18.05.2012 AS WELL AS A NUMBER OF OTHER CASES HAVE HELD THAT PROFIT IN CASE OF BUSINESS IN INDIAN MADE FOREIGN LIQUOR HAS TO BE ESTIMATED AT 5% OF THE PURCHASES MADE BY THE ASSESSEE. THEREFORE, FOLLOWING THE DECISION OF THE ITAT HYDERABAD BENCH, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO ESTIMATE THE PROFIT FROM THE WINE BUSINESS OF THE ASSESSEE BY APPLYING THE RATE OF 5% OF THE PURCHASE S MADE NET OF ALL OTHER DEDUCTIONS. THE ASSESSING OFFICER SHOULD ALSO BEAR IN MIND THAT IN NO CASE THE INCOME DETERMINED SHOULD BE BELOW THE INCOME RETURNED. 9. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THIS CASE AND ALSO RESPECTFULLY FOLLOWING THE RATI OS OF COORDINATE BENCH, WE ARE OF THE VIEW THAT THE NET PROFIT ESTIMATED BY THE A.O. BY RELYING UPON THE DECISION OF HONBLE A.P. HIGH COURT (SUPRA), WHICH WAS RENDERED UNDER DIFFERENT FACTS IS QUITE HIGH. ON THE OTHER HAND, THE ASSESSEE RELIED UPON THE D ECISION OF COORDINATE BENCH AND THE COORDINATE BENCH UNDER SIMILAR CIRCUMSTANCES ESTIMATED THE NET PROFIT OF 5% ON TOTAL PURCHASES NET OF ALL DEDUCTIONS. NO CONTRARY DECISION IS PLACED ON RECORD BY THE REVENUE TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE COORDINATE BENCH. THEREFORE, WE DIRECT THE A.O. TO 4 ITA NO. 414 / VIZ /201 5 ESTIMATE THE NET PROFIT OF 5% ON TOTAL PURCHASES NET OF ALL DEDUCTIONS. ORDERED ACCORDINGLY. 6. IN VIEW OF THE ABOVE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL, I DIRECT TH E ASSESSING OFFICER TO RE - COMPUTE THE PROFIT OF THE ASSESSEE AT 5% OF PURCHASE PRICE. ACCORDINGLY, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED. 7 . THE NEXT GROUND OF APPEAL RELAT ES TO UNEXPLAINED INVESTMENT OF RS. 1 0 , 92 , 172 / - . IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER HAS NOTED TH A T THE ASSESSEE HAS MADE AN INVESTMENT TO THE TUNE OF RS.20,03,957/ - TOWARDS FIRST INSTALMENT OF LICENSE FEE OF RS.13,03,333/ - FDR OF RS. 4,10,060/ - , BG COMMISSION OF RS. 1,40,564/ - AND PURCHASE OF STOCK OF RS. 1,50,000/ - BEFORE THE COMMENCEMENT OF LIQUOR BUSINESS . THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN THE SOURCE OF THE ABOVE IN VE STMENT. SINCE , THE ASSESSEE HAS NOT EXPLAINED , THE ASSESSING OFFICER CAME TO THE CO NCLUSION THAT THE ASSESSEE HAS NO EXPLAN A TION FOR THE SOURCE OF THE INVESTMENT, HOWEVER, HE HAD CONSIDERED AUDIT REPORT FILED ALONG WITH THE RETURN. ACCORDING TO THE AUDIT REPORT, THE ASSESSEE IS HAVING CLOSING CAPITAL OF RS. 8,93,405 / - AS ON 31/03/2010. THE ASSESSING OFFICER HAS NOTED THAT SINCE IT IS PROVED BEYOND DOUBT, THE ASSESSEE HAS GOT CAPITAL OF RS. 8,93,405/ - , THE SAME IS GIVEN A CREDIT A ND THE REMAINING BALANCE OF RS. 11,10,552/ - IS CONSIDERED AS UNEXPLAINED INVEST ME NT AND THE SAME IS ADDED IN THE HANDS OF THE ASSESSEE. 8 . BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) , THE ASSESSEE HAS FILED THE CONFIRMATION LETTERS FROM SIX PERSONS AND SUBMITTED THAT THE SAME MAY BE CONSIDERED AND THE ADDITION MAY BE DELETED. THE COMMISSIONER OF INCOME TAX (APPEALS) BY CONSIDERING THE CONFIRMATIONS FILED BY THE ASSESSEE IN RESPECT OF SIX LOAN CREDITORS, CALLED REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSESSING OFFICER 5 ITA NO. 414 / VIZ /201 5 AS PER THE DIRECTIONS OF THE COMMISSIONER OF INCOME TAX (APPEALS), HE CONDUCTED A DETAILED ENQUIRY AND SUBMITT ED THE REMAND REPORT WHICH IS REPRODUCED HEREUNDER: - SHRI PALAVALASA SURAPU NAIDU: AS DEPOSED, THIS PERSON IS AN AGRICULTURIST, HAVING SOURCES OF INCOME FROM CULTIVATION AND DAILY LABOUR OF RS.300/ - PER DAY, IN NON SEASON AND NON CROP DAYS. HIS ANNUAL INC OME IS RS.1,50,000/ - . HE IS NOT HAVING ANY BANK ACCOUNT. IDENTITY OF THE CREDITOR WAS PROVED BY PRODUCING THE AADHAR CARD AND HIS AGRICULTURAL LAND HOLDINGS ARE ALSO PRODUCED IN ORDER TO PROVE HIS CREDITWORTHINESS. BUT, FROM THE STATEMENT RECORDED, IT HAS BEEN UNDERSTOOD THAT THIS PERSON IS NOT HAVING CREDITWORTHINESS TO ADVANCE ANY AMOUNTS, BECAUSE OF ILLS MEAGER EARNING. HE HAS REPLIED THAT HE CANNOT PRODUCE ANY DOCUMENTARY EVIDENCE IN ORDER TO PROVE THAT HE HAD THE ACCUMULATED AMOUNT OF RS.1,80,360/ - ON THE DAY OF ADVANCE. IMPORTANTLY, IT IS TO BE NOTICED THAT HE HAS DEPOSED THAT ON REQUEST OF THE ASSESSEE, HE HAS ADVANCED RS.1,80,360/ - , BY PURCHASING DEMAND DRAFT / BANKER CHEQUES ON 1.6.2010, IN FAVOUR OF DISTRICT COLLECTOR, SRIKAKULAM, FROM STATE BANK OF INDIA, RAJAM, IN CASH. THIS CREDITOR IS RESIDING IN A VILLAGE NEAR REGIDI AMALAVALASA, IF AT ALL ANY LOAN WAS GIVEN, THAT MIGHT HAVE ADVANCED IN HIS VILLAGE OR HE MIGHT HAVE PURC ASED DEMAND DRAFT / BANKER CHEQUES AT NEAREST BANK TO HIS VILLAGE, IN FAVO UR OF SRI ADAPA SAIRAM, BUT IN THIS CASE, TYPICALLY, HE HAS PURCHASED DEMAND DRAFTS / BANKER CHEQUES FROM SBI, RAJAM, THAT TOO IN FAVOUR OF THE DISTRICT COLLECTOR, SRIKAKULAM. SHRI TANKALA ATCHI NAIDU: AS DEPOSED, THIS PERSON IS AN AGRICULTURIST, HAVING SOURCES OF INCOME FROM CULTIVATION AND DAILY LABOUR OF RS.200/ - PER DAY, IN NON SEASON AND NON CROP DAYS. HIS ANNUAL INCOME IS RS.1,40,000/ - . HE IS NOT HAVING ANY BANK ACCOUNT. IDENTITY OF THE CREDITOR WAS PROVED BY PRODUCING THE AADHAR CARD AND HIS AGRICU LTURAL LAND HOLDINGS ARE ALSO PRODUCED IN ORDER TO PROVE HIS CREDITWORTHINESS. BUT, FROM THE STATEMENT RECORDED, IT HAS BEEN UNDERSTOOD THAT THIS PERSON IS NOT HAVING CREDITWORTHINESS TO ADVANCE ANY AMOUNTS, BECAUSE OF HIS MEAGER EARNING. HE HAS REPLIED TH AT HE CANNOT PRODUCE ANY DOCUMENTARY EVIDENCE IN ORDER TO PROVE THAT HE HAD THE ACCUMULATED AMOUNT OF RS.1,37,270/ - ON THE DAY OF ADVANCE. IMPORTANTLY, IT IS TO BE NOTICED THAT HE HAS DEPOSED THAT ON REQUEST OF THE ASSESSEE, HE HAS ADVANCED RS.1,37,270/ - BY PURCHASING DEMAND DRAFT / BANKER CHEQUES ON 1.6.2010, IN FAVOUR OF DISTRICT COLLECTOR, SRIKAKULAM, FROM STATE BANK OF INDIA, RAJAM, IN CASH. THIS CREDITOR IS RESIDING IN A VILLAGE NEAR REGIDI AMALAVALASA, IF AT ALL ANY LOAN WAS GIVEN, THAT MIGHT HAVE AD VANCED IN HIS VILLAGE OR HE MIGHT HAVE PURCHASED DEMAND DRAFT / BANKER CHEQUES AT NEAREST BANK TO HIS VILLAGE, IN FAVOUR OF SRI ADAPA SAIRAM, BUT IN THIS CASE, TYPICALLY, HE HAS PURCHASED D EMAND DRAFTS / BANKER CHEQUES FROM SBI, RAJAM, THAT TOO IN FAVOUR O F THE DISTRICT COLLECTOR, SRIKAKULAM. SHRI KOTLA LAKSHMU NAIDU : AS DEPOSED, THIS PERSON IS AN AGRICULTURIST, HAVING SOURCES OF INCOME FROM CULTIVATION AND DAILY LABOUR OF RS.200/ - PER DAY, IN NON SEASON AND NON CROP 6 ITA NO. 414 / VIZ /201 5 DAYS. HIS ANNUAL INCOME IS RS.50,000/ - AND HE IS HAVING DEPENDENT THREE FAMILY MEMBERS INCLUDING TWO SCHOOL GOING CHILDREN. HE IS NOT HAVING ANY BANK ACCOUNT. IDENTITY OF THE CREDITOR WAS PROVED BY PRODUCING THE AADHAR CARD AND HIS AGRICULTURAL LAND HOLDINGS ARE ALSO PRODUCED IN ORDER TO PROVE HIS CREDITWORTHINESS. BUT, FROM THE STATEMENT RECORDED, IT HAS BEEN UNDERSTOOD THAT THIS PERSON IS NOT HAVING CREDITWORTHINESS TO ADVANCE ANY AMOUNTS, BECAUSE OF HIS MEAGER EARNING. HE HAS REPLIED THAT HE CANNOT PRODUCE ANY DOCUMENTARY EVIDENCE IN ORDER TO PROVE THAT HAD THE ACCUMULATED AMOUNT OF RS. 18,380/ - ON THE DAY OF ADVANCE. IN VIEW OF THE FOREGOING FINDING, I REQUEST THE LEARNED CIT(A) TO CONFIRM THE STAND TAKEN BY MY PREDECESSOR ASSESSING OFFICER IN RESPECT OF ADDITION OF RS. 11,10,552/ - , AS ASSESSEE COULD NOT PROVE THE GENUINENESS AND CREDITWORTHINESS OF ANY OF LOAN CREDITORS. 9 . THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE REMAND REPORT, HE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER IN RESPECT OF ONE OF THE LOAN CREDITORS K. LAKSHMU NAIDU ON THE GROUND TH A T THE ASSESSEE PROVED THE LO A N AMOUNT OF RS. 18,380/ - AND T HEREFORE, DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION . INSOFAR AS OTHER LOAN CREDITORS ARE CONCERNED, THE ASSESSEE ONLY PRODUCED BEFORE THE ASSESSING OFFICER TWO LOAN CREDITORS T. ATCHI NAIDU AND T.SURAPU NAIDU . THE COMMISSIONER OF INCOME TAX (APPEALS) IN HIS ORDER HAS OBSERVED TH A T THE LO A N CREDITOR T. ATCHI NAIDU HA D PURCHASED A DD BY PAY ING A CASH FOR RS. 1,35,275/ - BUT HE FAILED TO EXPLAIN THE SOURCE OF CASH PAYMENT MADE TO THE BANK . N OT ONLY THAT BUT ALSO THE LOAN CREDITOR T. ATCHI NAIDU HAS NO BANK ACCOUNT AND HE WENT TO A BANK , WHICH IS FAR AWAY FROM HIS VILLAGE FOR PURCHASING A DD AND THE SAME WAS GIVEN TO THE ASSESSEE. THE ASSESSING OFFICER DURING THE COURSE OF REMAND PROCEEDINGS ASKED THE CREDITOR WHY HE WENT TO THE BANK F OR PURCHASING THE DD, NO EXPLANATION WAS GIVEN. SO, UNDER THESE FACTS AND CIRCUMSTA N CES OF THE CASE, THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME TAX (APPEALS) CAME TO THE CONCLUSION TH A T THE ASSESSEE WAS NOT ABLE TO PROVE THE CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS. THEREFORE, THE COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. EVEN BEFORE US, NO EXPLANATION IS GIVEN IN RESP ECT OF 7 ITA NO. 414 / VIZ /201 5 CREDITWORTHINESS AS WELL AS PURCHASE OF DD BY ASSESSEE HIMSELF BY PAY ING CASH. BY CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE ASSESSEE HAS FAILED TO DISCHARGE ONUS TO PROVE CREDITWORTHINESS OF THE LOAN CR EDITORS. THEREFORE, I FIND NO REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) . INSOFAR AS , T. SURAPU NAIDU IS CONCERNED , THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS OF THE LOAN CREDITORS . W HEN SPECIFICALLY ASKED WHY HE PURCHASED DD AT RAJAM BRANCH WHICH IS FAR AWAY FROM HIS VILLAGE AND THAT TOO AGE OF 72 YEARS, WAS NOT GIVE N ANY EXPLANATION. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE , I AM OF THE OPINION THAT THE ASSESSEE NOT ONLY FA I L ED TO PROVE THE CREDITWORTHINESS BUT ALSO FAILED TO PROVE THE GENUINENESS OF THE TRANSACTIONS. IN VIEW OF THE ABOVE, THE COMMISSIONER OF INCOME TAX (APPEALS) RIGHTLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. INSOFAR AS OTHER CREDITORS ARE CONCERNED, THE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE BEFORE THE ASSESSING OFFICER , T HEREFORE, THE COMMISSIONER OF INCOME TAX (APPEALS) WAS OF THE OPINION THAT THE ADDITION IN RESPECT OF A. VARALAKSHMI, B. JAGANNATHA NAIDU, T. TAVITI N AIDU IS ON RIGHT FOOTING AND CONFIRMED THE SAME . I FIND NO REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , WHICH IS CONFIRMED AND THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 10 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON THE 21 ST DAY OF DECEMBER , 201 6 . SD/ - ( V. DURGA RAO ) JUDICIAL MEMBER DATED : 21 ST DECEMBER , 201 6 . VR/ - 8 ITA NO. 414 / VIZ /201 5 COPY TO: 1 . THE ASSESSEE. SRI ADAPA SAI RAM, D.NO. 5 - 15, MANDI STREET, RAJAM, SRIKAKULAM DISTRICT. 2 . THE REVENUE. ITO, WARD - 1, SRIKAKULAM. 3 . THE CIT - 2, VISAKHAPATNAM. 4 . THE CIT(A) - 2, VISAKHAPATNAM. 5 . THE D.R . 6 . GUARD FILE. BY ORDER SR. PRIVATE SECRETARY I.T.A.T., VISAKHAPATNAM