Kilari Styanarayana, Vizianagaram V. ITO, Vizianagaram

ITA 478/VIZ/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3945 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 31-08-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3); 143(1)

Judgement Text

ITA NO.478 /VIZAG/2017 K. SATYANARAYANA, VIZIANAGARAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . .. . . . . . ' , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NO.478/VIZAG/2017 ( / ASSESSMENT YEAR: 2011-12) K. SATYANARAYANA VIZIANAGARAM ITO, WARD - 2 VIZIANAGARAM ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI M.N. MURTHY NAIK, DR / DATE OF HEARING : 27.03.2018 / DATE OF PRONOUNCEMENT : 0 6.04.2018 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, VISAKHAPATN AM VIDE APPEAL NO.440/2014-15 DATED 16.6.2017 FOR THE ASSESSMENT YEAR 2011-12. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS AN INDIV IDUAL CARRYING ON BUSINESS IN PURCHASE AND SALE OF INDIAN MADE FOREIG N LIQUOR (IMFL) IN ITA NO.478 /VIZAG/2017 K. SATYANARAYANA, VIZIANAGARAM 2 VIZIANAGARAM DISTRICT. HE FILED RETURN OF INCOME B Y DECLARING TOTAL INCOME OF ` 4,47,820/-. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') AND THEREAFTER, AFTER FOLLOWING THE DUE PROCEDURE, ASSESSMENT IS COMPLETED U/S 143(3) OF THE ACT. IN THE ASSESSMENT ORDER, THE A.O. NOTED THAT THE ASSESSEE HAS MADE PAYMENTS TOWARDS I NITIAL LICENSE FEE, FIRST PURCHASE OF STOCK AND FDR TOWARDS BANK GUARAN TEE DURING THE MONTHS OF JUNE, 2010 AND JULY, 2010 AMOUNTING TO ` 15,78,729/-. THE CAPITAL CONTRIBUTION OF THE ASSESSEE AS SHOWN IN TH E BALANCE SHEET FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IS OF ` 17,15,000/-. THE ASSESSEE TRIED TO EXPLAIN THE SOURCE OF CAPITAL OF THE ASSESSEE FOR MAKING PAYMENT OF INITIAL LICENSE FEE, ETC. BEFORE COMMENCEMENT OF THE SALE OF NEW WINE SHOP THE THEN AVAILABLE FUNDS REPR ESENTING HIS CAPITAL AND QUASI CAPITAL FROM RELATIVES AND FRIENDS. BUT HE FAILED TO FURNISH ANY DOCUMENTARY EVIDENCE REGARDING THE THEN AVAILABLE F UNDS REPRESENTING THIS CAPITAL, QUASI CAPITAL FROM FRIENDS AND RELATI VES. ACCORDINGLY, THE CAPITAL CONTRIBUTION OF THE ASSESSEE TREATED AS OUT OF UNEXPLAINED SOURCES AND ADDED INCOME FROM OTHER SOURCES. ACCOR DINGLY, HE MADE AN ADDITION OF ` 17,15,000/- BROUGHT TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES. ON APPEAL, THE LD. CIT(A) DIR ECTED THE A.O. TO ITA NO.478 /VIZAG/2017 K. SATYANARAYANA, VIZIANAGARAM 3 VERIFY THE ITR OF THE ASSESSEE FOR THE YEAR 2009-10 , IF ANY CAPITAL IS AVAILABLE CREDIT MAY BE GIVEN TO THE ASSESSEE. 3. ON BEING AGGRIEVED, ASSESSEE CARRIED MATTER IN A PPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE STRONGL Y RELIED ON THE GROUNDS OF APPEAL. 4. ON THE OTHER HAND, THE LD. D.R. RELIED ON THE OR DERS OF THE A.O. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. IN THIS CASE, THE ASSESSEE HAS INTRODUCED A CAPITAL OF ` 17,15,000/-. WHEN THE A.O. HAS ASKED THE ASSESSEE, IT WAS SUBMITTED THAT THE CAPITAL INTRODUCED BY HIM IN THE IMFL BUSINESS IS HIS OWN C APITAL AND ALSO BORROWED FROM HIS RELATIVES AND FRIENDS. HOWEVER, NO DETAILS WERE FILED BEFORE THE A.O. THEREFORE, THE A.O. TREATED THE EN TIRE CAPITAL INTRODUCED BY HIM OF ` 17,15,000/- AS UNEXPLAINED SOURCE AND BROUGHT TO T AX UNDER THE HEAD INCOME FROM OTHER SOURCES. ON APPEAL BE FORE THE CIT(A), IT WAS SUBMITTED THAT THE ASSESSEE IS HAVING OWN CAPIT AL, THEREFORE, THE SAME MAY BE CONSIDERED AND TO THAT EXTENT SET OFF M AY BE GIVEN. THE LD. CIT(A) BY CONSIDERING EXPLANATION GIVEN BY THE ASSESSEE, HE DIRECTED THE A.O. AS UNDER: ITA NO.478 /VIZAG/2017 K. SATYANARAYANA, VIZIANAGARAM 4 AO IS DIRECTED TO VERIFY THE ITR OF THE ASSESSEE FO R AY 2009-10, WHETHER ANY BALANCE SHEET WAS ALSO FILED ALONG WITH THAT ITR AND IN THAT BALANCE SHEET IF THE CAPITAL ACCOUNT AS ON 30.3.200 9 REFLECTS ANY CAPITAL, THE SAME MAY BE GIVEN CREDIT. THIS DIRECTION IS GI VEN IN LINE WITH ASSESSEES SUBMISSIONS BEFORE AO (REFER PARA 2 OF P AGE 5 OF THE ASST. ORDER), AND ALSO GOING THE FACT THAT THE SAME AO HA S GIVEN CREDIT TO THE B/F CAPITAL IN OTHER IMFL CASES. 6. IN VIEW OF THE DIRECTION GIVEN BY THE CIT(A), WE FIND THAT THE LD. CIT(A)S DIRECTION IS AS REQUESTED BY THE LD. A.R. OF THE ASSESSEE AND THEREFORE, WE FIND NO FURTHER DIRECTION CAN BE GIVE N IN THIS CASE. ACCORDINGLY, THIS APPEAL FILED BY THE ASSESSEE IS D ISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 6 TH APR18. SD/- SD/- ( . .. . . . . . ' ) ( . ) (D.S. SUNDER SINGH) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER # /VISAKHAPATNAM: ' /DATED : 06.04.2018 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT KILLARI SATYANARAYANA, PROP. MAH ALAXMI WINES, MAIN ROAD, BIYYALAPETA, VIZIANAGARAM 2. / THE RESPONDENT THE ITO, WARD-2, LOWER TANKBUND ROAD, SIDDARTH NAGAR, BALAJI NAGAR, VIZIANAGARAM. 3. + / THE PRINCIPAL CIT-1, VISAKHAPATNAM ITA NO.478 /VIZAG/2017 K. SATYANARAYANA, VIZIANAGARAM 5 4. + ( ) / THE CIT (A)-1, VISAKHAPATNAM 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM