Sri Tuppala Sateesh kumar, Vizianagaram V. THE ITO, Vizianagaram

ITA 416/VIZ/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6572 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 31-12-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NARAYANA ROA
• Assessee Lawyers: N V RAMANA MURTHY
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER ITA NO. 416 / VIZ /201 5 (ASST. YEAR : 20 11 - 1 2 ) SRI TU PPALA SATEESH KUMAR, PROP : M/S. PYDITHALLI WINES, KOTHAGAVARA VEEDHI, VIZIANAGARAM. V . ITO, WARD - 2, VIZIANAGARAM. PAN NO. AHNPT 2206 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI N.V. RAMANA MURTHY C A. DEPARTMENT BY : SHRI NARAYANA ROA - DR DATE OF HEARING : 05 / 1 2 /201 6 . DATE OF PRONOUNCEMENT : 12 / 01 /201 7 . O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 1 , VISAKHAPATNAM , DATED 30/10/2015 FOR THE ASSESSMENT YEAR 2011 - 12 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL CARRYING ON BUSINESS OF PURCHASE AND SALE OF IMFL (INDIAN MADE FOREIGN LIQUOR). IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS INITIALLY MADE PAYMENTS TO THE TUNE OF 32,26,325/ - TOWARDS INSTALMENT OF LICENCE FEE, PURCHASE OF STOCK FROM APBCL. THE ASSESSING OFFICER CALLED THE ASSESSEE TO EXPLAIN THE SOURCE OF ABOVE INVESTMENT . IN RESPONSE , HE SUBMITTED BEFORE THE ASSESSING OFFICER 2 ITA NO. 416 / VIZ /201 5 THAT HE IS DOING THE COMMISSION BUSINESS OF AGRICULTUR AL PRODUCE LIKE PADDY, PULSES, GROUNDNUT, JUTE ETC. DEPENDING UPON AVAILABILITY OF THE CROP. OUT OF THE ABOVE BUSINESS, NO TAXABLE INCOME IS AVAILABLE AND SUBM ITTED TH A T HE HAD NOT FILED ANY RETURN OF INCOME . HOWEVER, HE FURTHER SUBMITTED THAT OPENING CAPITAL IS OUT OF THE ABOVE SOURCE OF THE BUSINESS OF THE ASSESSEE. THE ASSESSING OFFICER , AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, OBSERVED TH A T THE ASSESSEE NOT PRODUCE D ANY DOCUMENTARY EVIDENCE FOR SOURCE OF MAKING PAYMENT OF INITIAL FEE AND PURCHASE OF STOCK FROM APBCL. THE ASSESSEE HAS ALSO NOT FILED ANY RETURN OF INCOME AND NO BANK ACCOUNTS WERE FILED TO PROVE HIS SAVINGS. WITH T HE ABOVE OBSERVA TIONS , THE ASSESSING OFFICER TREATED THE AMOUNT OF 32,26,325/ - AS INCOME FROM OTHER SOURCE OF THE ASSESSEE AND TAXED IN THE HANDS OF THE ASSESSEE. 3. ON APPEAL, BEFORE THE LD. CIT(A) HE EXPLAINED THAT HE HAD ENTERED INTO A MEMORANDUM OF UNDERSTANDING (MOU) ALONG WITH 07 OTHERS FOR RAISING INITIAL FUNDS. HE ALSO FILED COPY OF MOU DATED 28/06/2010 AND SUBMITTED THAT INITIAL EXPENDITURE INCURRED BY THE ASSESSEE IS NOT ONLY FROM HIS SOURCE AND ALSO THE CONTRIBUTION OF 07 OTHERS. THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, OBSERVED THAT THE EXPLANATION GIVEN BY THE ASSESSEE BEFORE HIM IS QUITE CONTRARY TO THE EXPLANATIO N GIVEN BEFORE THE ASSESSING OFFICER. THEREFORE, ADDITIONAL GROUND/ADDITIONAL EVIDENCE RAISED BY THE ASSESSEE IN THE FORM OF MOU WAS NOT ADMITTED AND CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 3 ITA NO. 416 / VIZ /201 5 4 . ON BEING AGGRIEVED, ASSESSEE CARRIED MATTER IN APPEAL BEFORE THE TRIBUNAL. 5 . AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS IN THE BUSINESS OF BUYING AND SELLING OF AGRICULTURAL PRODUCTS FROM PAST 5 TO 6 YEARS. AFTER EXPENDIT URE , SOME SAVINGS ARE WITH HIM, WHICH WERE INVESTED IN IMFL BUSINESS ALONG WITH 07 OTHERS AND SUBMITTED THAT THE ADDITIONAL EVIDENCE FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) MAY BE CONSIDERED AND SENT IT BACK TO THE FILE OF THE ASSESSING OFFIC ER. 6. ON THE OTHER HAND, DEPARTMENTAL REPRESENTATIVE STRONGLY OBJECTED THAT THE ADDITIONAL EVIDENCE SOUGHT TO BE FILE D BY THE ASSESSEE IS AN AFTERTHOUGH T AND IT CANNOT BE CONSIDERED. 6 . I HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 7 . THE ASSESSEE WAS IN THE BUSINESS OF PURCHASE AND SALE OF IMFL LIQUOR . HE INVESTED AN AMOUNT OF 32,26,325/ - INITIAL LY , FOR LICENCE FEE AND PURCHASE OF INITIAL STOCK. WHEN THE ASSESSING OFFICER CALLED THE ASSESSEE TO EXPLAIN THE REASONS, HE SUBMITTED THAT HE WAS IN THE BUSINESS OF BUYING AND SELLING OF AGRICULTURAL PRODUCTS FROM PAST 5 TO 6 YEARS . OUT OF SAVINGS, HE MADE INITIAL INVESTMENT , BUT HAD N OT FILED ANY BANK ACCOUNT OR RETURN OF INCOME OR ANY OTHER EVIDENCE TO SHOW THAT THE INVESTMENT MADE BY HIM IS OUT OF HIS SAVINGS . THEREFORE, THE ASSESSING OFFICER HAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE 4 ITA NO. 416 / VIZ /201 5 ASSESSEE AND TREATED THE INITIAL INVESTMENT MADE BY HIM AS INCOME FROM OTHER SOURCE. ACCORDINGLY , THE ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) , THE ASSESSEE TRIED TO EXPLAIN THAT THE INITIAL INVESTMENT MADE BY HIM NOT ONLY HIS SAV INGS BUT ALSO THE CONTRIBUTION OF 07 OTHERS. THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE WAS NOT ADMITTED BY THE COMMISSIONER OF INCOME TAX (APPEALS) FOR THE REASON TH A T THE EXPLANATION , WHICH SOUGHT BEFORE HIM BY FILING AN ADDITIONAL EVIDENCE IS CONTRARY TO THE EXPLANATION GIVEN BEFORE THE ASSESSING OFFICER , HENCE HE CONFIRMED THE ORDER OF THE ASSESSING OFFICER. WE FIND TH A T WHEN THE ASSESSING OFFICER HAS A S KED THE ASSESSEE ABOUT THE SOURCE OF IN I TIAL INVESTMENT, HE SUBMITTED THAT HE WAS IN THE B USINESS O F PURCHASE AND SELLING OF AGRICULTURAL PRODUCTS , OUT OF WHICH , HE MADE INVEST MENT FOR LICENCE FEE AS WELL AS PURCHASE OF LIQUOR. WHEN THE ASSESSING OFFICER A S KED THE ASSESSEE TO FILE THE SOURCE OF INVESTMENT, HE FAILED TO FILE ANY DOCUMENTARY EVIDENCE , SUCH AS , BAN K ACCOUNT OR RETURN OF INCOME OR ANY OTHER EVIDENCE TO SHOW THAT THE INVESTMENT MADE BY THE ASSESSEE WAS HIS OUT OF SAVINGS . UNDER TH ESE FACTS AND CIRCUMSTANCES OF THE CASE , ASSESSING OFFICER HAS TREATED THE SAME AS HIS INCOME FROM OTHER SOURCES, WHICH WAS CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS). SO FAR AS MOU WITH SEVEN OTHERS IS CONCERNED, THE ASSESSEE HAS NOT GIVEN ANY EXPLANATION WHY THIS PLEA WAS NOT RAISED BEFORE THE ASSESSING OFFICER. WE FIND THAT THE ABOVE EXP LANATION GIVEN BY THE ASSESSEE IS ONLY AN AFTERTHOUGHT AND THE SAME CANNOT BE CONSIDERED AT 5 ITA NO. 416 / VIZ /201 5 THIS STAGE. THUS, W E FIND NO REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). THUS, WE CONFIRM THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 8 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 1 2 T H DAY OF JANUARY , 201 7 . S D / - ( V. DURGA RAO ) JUDICIAL MEMBER DATED : 1 2 T H JANUARY , 201 7 . VR/ - COPY TO: 1 . THE ASSESSEE SRI TUPPALA SATEESH KUMAR, PROP : M/S. PYDITHALLI WINES, KOTHAGAVARA VEEDHI, VIZIANAGARAM. . 2 . THE REVENUE ITO, WARD - 2, VIZIANAGARAM. 3 . THE CIT - 1, VISAKHAPATNAM. 4 . THE CIT(A) - 2, VISAKHAPATNAM. 5 . THE D.R. 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR , I.T.A.T., VISAKHAPATNAM .