Sri Arle Rambabu, Visakhapatnam V. The ITO, Ward-2(3)., Visakhapatnam

ITA 479/VIZ/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0111 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2002-2003
• Appeal Filed On: 16-09-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B JAYA KUMAR
• Section: 69; 148; 2

Judgement Text

PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.479/VIZAG/2008 ASSESSMENT YEAR: 2002-03 ARLE RAMBABU, VISAKHAPATNAM VS. ITO, WARD-2(3) VISAKHAPATNAM (APPELLANT) (RESPONDENT) PAN NO. AIPPA 7885 E APPELLANT BY: SHRI GVN HARI, CA RESPONDENT BY: SHRI B. JAYA KUMAR, DR ORDER PER SHRI B R BASKARAN, ACCOUNTANT MEMBER : THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 31.7.2008 PASSED BY THE LD CIT(A)-I, VISAKHAPATNAM AND IT RELATES TO THE ASSESSMENT YEAR 2002-03. 2. THE ADDITION OF RS.5,70,000/- MADE BY THE ASSESS ING OFFICER U/S 69 OF THE ACT, HAVING BEEN CONFIRMED BY THE LD CIT (A), T HE ASSESSEE IS IN APPEAL BEFORE US. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE WAS WORKING AS AN EMPLOYEE WITH M/S VISAKHAPATNAM STEEL PLANT. THOUGH HIS INCOME FROM S ALARY EXCEEDED MAXIMUM NON-TAXABLE LIMIT, HE DID NOT FILE RETURN O F INCOME. LATER, UPON RECEIVING THE INFORMATION THAT THE ASSESSEE HAD GIV EN A LOAN OF RS.10,00,000/- TO A CONCERN NAMED M/S SREENIJA CONS TRUCTIONS DURING DECEMBER, 2001 THROUGH CHEQUES, THE ASSESSING OFFIC ER ISSUED NOTICE U/S 148 PAGE 2 OF 4 OF THE ACT ON 18.8.2006. THOUGH THE LOANS WERE GIV EN IN THE NAME OF ASSESSSEES WIFE AND SON, THE ASSESSEE ACCEPTED THA T THE MONEY BELONG TO HIM. FROM THE EXPLANATIONS FURNISHED WITH REGARD TO THE SOURCES FOR MAKING THE DEPOSIT OF RS.10,00,000/-, THE AO ACCEPTED SOUR CES TO THE EXTENT OF RS.4,30,000/- AND ADDED THE BALANCE OF RS.5,70,000/ -. THE ASSESSEE HAD EXPLAINED THE SOURCES FOR RS.5,70,000/- AS UNDER: A) ACCUMULATION OF MATURITY PROCEEDS OF CGGF SCHEME - RS.1.00 LAKH SINCE 1996 (RS.50,000/- DEVELOPED INTO RS.1.00 LAKH S) B) DEPOSIT UNDER MCC FINANCE RS.1.00 LAKHS ON 31.10 .97 FOR 3 YEARS MATURITY AMOUNT - RS.1.50 LAKH C) LIC MATURITY AMOUNT OF RS.54,212/- RECEIVED - RS. 0.50 LAKH IN APRIL,2000 D) OTHER TWO LIC POLICIES MATURITY PROCEEDS - RS. 0.50 LAKH E) P.F. WITHDRAWAL MADE IN OCTOBER, 1997 RS.1. 00 LAKHS DEVELOPED INTO RS. 1.50 LAKHS - RS. 1.50 LAKHS F) SALARY AND INTEREST SAVINGS - RS. 0.70 LAKH -------------------- TOTAL = RS.5.70 LAKHS ------------------- 4. THE LD CIT (A) ALSO CONFIRMED THE ORDER OF THE A SSESSING OFFICER. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE PARTIES AND ALSO PERUSED THE R ECORD. THE PECULIAR FEATURES OF THIS CASE ARE THAT THE ASSESSEE WAS A S ALARIED EMPLOYEE DURING THE YEAR UNDER CONSIDERATION. HE DID NOT MAINTAIN B OOKS OF ACCOUNTS. THE ASSESSMENT RELATING TO THE ASSESSMENT YEAR 2002-03 HAS BEEN REOPENED U/S 148 IN THE YEAR 2006. THE EXPLANATION OF THE ASSESS EE IS THAT HE HAD RETIRED FROM THE SERVICES BY THAT TIME AND ALSO CLOSED HIS EARLIER BANK ACCOUNTS. KEEPING IN MIND THE DIFFICULTIES PUT FORTH BY THE A SSESSEE, WE HAVE CONSIDERED PAGE 3 OF 4 THE DOCUMENTS AND THE SOURCES EXPLAINED BY THE ASSE SSEE. WE NOTICE THAT THERE IS A TIME GAP OF MORE THAN 3 YEARS IN RESPECT OF ITEMS (A) AND (E) CITED ABOVE. IN VIEW OF THE LONG TIME GAP, IT IS DIFFICU LT TO ACCEPT THE EXPLANATIONS OF THE ASSESSEE THAT HE HAD UTILISED THE MATURITY P ROCEEDS OF CGGF UNITS AND PF WITHDRAWALS AMOUNT FOR BETTERMENT AND THUS EARNE D A SUM OF RS.2.50 LAKHS. SIMILARLY WITH RESPECT TO THE CLAIM OF MATUR ITY AMOUNT PERTAINING TO TWO LIC POLICIES AMOUNTING TO RS.0.50 LAKH, THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE. HENCE WE CONFIRM THE ORDER OF LD CIT(A) WITH REGARD TO THESE THREE ITEMS. 5.1. HOWEVER, WITH REGARD TO THE DEPOSIT MADE WITH MCC FINANCE ON 31.10.1997, THE ASSESSEE COULD PRODUCE ACKNOWLEDGEM ENTS FROM THE SAID COMPANY. HOWEVER, THE ASSESSING OFFICER REJECTED TH E SAME FOR THE REASON THAT THE ASSESSEE DID NOT EXPLAIN THE SOURCES FOR M AKING THE IMPUGNED DEPOSIT IN OCTOBER, 1997 FOR A PERIOD OF 3.5 YEARS AND ALSO FOR WANT OF DOCUMENTARY EVIDENCE TO SUBSTANTIATE ITS MATURITY V ALUE. FOR SIMILAR REASONS THE ASSESSING OFFICER ALSO DID NOT ACCEPT THE LIC MA TURITY AMOUNT OF RS.54,212/- RECEIVED IN APRIL, 2000, THOUGH THE ASS ESSEE PRODUCED EVIDENCE IN THAT REGARD. THE ASSESSING OFFICER ALSO REJECTED THE CLAIM OF THE ASSESSEE WITH REGARD TO THE SALARY AND INTEREST SAVINGS OF R S.70,000/-. 5.2. AS STATED EARLIER, THE ASSESSEE HAS EXPLAINED HIS DIFFICULTY IN PRODUCING THE REQUIRED INFORMATION TO THE ASSESSING OFFICER. IN OUR OPINION THE GENUINENESS OF THE SOURCES SHOULD BE JUDGED TAKING INTO THE ACCOUNT SURROUNDING CIRCUMSTANCES AND AVAILABLE EVIDENCES. ACCORDING TO THE ASSESSEE, THE DEPOSIT MADE WITH THE MCC FINANCE HAD THE MATURITY DATE IN MARCH, 2000 AND LIC PROCEEDS WAS RECEIVED IN APRIL 2 000. THOUGH THE ASSESSEE COULD NOT PRODUCE THE RELEVANT BANK ACCOUN T TO SUPPORT HIS CLAIM THAT HE HAS UTILIZED THAT AMOUNT FOR GIVING THE IMP UGNED LOAN, YET THE SURROUNDING CIRCUMSTANCES AND AVAILABLE EVIDENCES S UPPORT HIS CLAIM. SINCE PAGE 4 OF 4 THE ASSESSEE WAS EMPLOYED IN VISAKHAPATNAM STEEL PL ANT AS GENERAL MANAGER AND WAS DRAWING RS.30,000/- P.M., THE POSSIBILITY O F SALARY SAVING TO THE EXTENT OF RS.70,000/- CANNOT ALSO BE DISCOUNTED WIT H. HENCE ON A CONSPECTUS OF THE MATTER, WE ARE OF THE OPINION THAT THE ASSES SEE HAS EXPLAINED THE SOURCES TO THE EXTENT OF RS.2.70 LAKHS. IN VIEW OF T HE ABOVE WE CONFIRM THE ADDITION TO THE EXTENT OF RS.3.00 LAKHS AND GRANT R ELIEF OF THE BALANCE AMOUNT OF RS.2.70 LAKHS. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. PRONOUNCED IN THE OPEN COURT ON 17.09.2009 SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, 17 TH SEPTEMBER, 2009. COPY TO 1 SHRI ARLE RAMBABU, FLAT NO.3, 2 ND FLOOR, GEETA MANSIONS, RAJENDRANAGAR, VISAKHAPATNAM 2 THE ITO WARD-2 (3) VISAKHAPATNAM 3 THE CIT, VISAKHAPATNAM 4 THE CIT(A)-I, VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM