Majji Naga, Srikakulam V. The ITO, Srikakulam

ITA 494/VIZ/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5175 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 13-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C DAS
• Keywords: Business income; Additional evidence; Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 494 / VIZ /201 6 (ASST. YEAR : 20 11 - 12 ) MAJJI NAGA, S/O KRISHNA, MALLIKARJUNA COLONY , RAJAM, SRIKAKULAM. V S . IT O , WARD - 1, SRIKAKULAM . PAN NO. ALMPM 0337 M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SHRI K.C. DAS SR. DR DATE OF HEARING : 16 / 0 7 /201 8 . DATE OF PRONOUNCEMENT : 31 / 0 7 /201 8 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 2 , VISAKHAPATNAM , DATED 0 1 /0 9 /201 6 FOR ASSESSMENT YEAR 20 11 - 12 . 2. GROUND NOS. 1 , 2 , 6 & 7 ARE NOT PRESSED, THEREFORE, SAME ARE DISMISSED AS NOT PRESSED. 3 . GROUND NO.3 RELATES TO ESTIMATION OF PROFIT IN IMFL BUSINESS . 2 ITA NO. 494 /VIZ/2016 ( MAJJI NAGA ) 4 . FACTS ARE IN BRIEF THAT THE ASSESSEE IS AN INDIVIDUAL CARRYING ON BUSINESS OF PURCHASE AND SALE OF IMFL (INDIAN MADE FOREIGN LIQUOR) IN SRIKAK ULAM DISTRICT. THE ASSESSEE HAS FILED HIS RETURN OF INCOME BY DECLARING TOTAL INCOME OF RS. 2, 13 , 918 / - , WHICH WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT'). LATER ON, CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT BY ESTIMATING NET PROFIT AT 20% OF THE STOCK PUT TO SALE. 5 . ON APPEAL, THE LD. CIT(A) S CALED DOWN THE PERCENTAGE FROM 20% TO 10% AND DIRECTED THE A.O. TO RE - COMPUTE THE INCOME AT 10% OF PURCHASE PRICE. 6 . ON BEING AGGRIEVED, ASSESSEE CARRIED MATTER IN APPEAL BEFORE THE TRIBUNAL . AT THE TIME OF HEARING, THE L D. 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/201 6 BY ORDER DATED 2.6.2016. 7 . ON THE OTHER HAND, THE LD. D.R. STRONGLY SUPPORTED THE ORDERS PASSED BY THE AUTHORITIES BELOW. 3 ITA NO. 494 /VIZ/2016 ( MAJJI NAGA ) 8 . WE 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 THIS RESPECT, THE COORDINATE BENCH OF THE 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 A.O. TO RE - COMPUTE THE PROFIT OF THE ASSESSEE. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED AS UNDER: 8. WE HAVE HEARD BOTH THE P ARTIES, 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 A ND VOUCHERS IN SUPPORT OF PURCHASES AND SALES. THE A.O. FURTHER OBSERVED THAT THE ASSESSEE HAS FAILED TO MAINTAIN STOCK REGISTERS AND BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE ARE NOT SUSCEPTIBLE FOR VERIFICATION, THEREFORE REJECTED THE BOOKS OF ACCOUN TS AND ESTIMATED NET PROFIT OF 20% BY RELYING UPON THE DECISION OF HONBLE A.P. HIGH COURT. IT IS THE CONTENTION 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. I T 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 BUSI NESS OF DEALING IN IMFL. THE ASSESSEE FURTHER CONTENDED THAT IMFL TRADE WAS CONTROLLED BY THE STATE GOVERNMENT THROUGH A.P. STATE BEVERAGES CORPORATION LTD. AND THE PRICES OF THE PRODUCTS ARE FIXED BY THE STATE GOVERNMENT. THE ASSESSEE BEING A LICENSE H OLDER OF STATE GOVERNMENT CANNOT SELL THE PRODUCTS OVER AND ABOVE THE MRP FIXED BY THE STATE GOVERNMENT. WE FIND FORCE IN THE ARGUMENTS OF THE ASSESSEE FOR THE REASON THAT THE A.O. HAS ESTIMATED THE NET PROFIT BY 4 ITA NO. 494 /VIZ/2016 ( MAJJI NAGA ) RELYING UPON THE DECISION OF A.P. HIGH COU RT 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 TH E VIEW THAT THE A.O. WAS NOT JUSTIFIED IN RELYING UPON THE JUDGEMENT, WHICH WAS RENDERED UNDER DIFFERENT FACTS 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 TH AT 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 BENCH 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 THA T 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 OFFICE R TO ESTIMATE THE PROFIT FROM THE WINE BUSINESS OF THE ASSESSEE BY APPLYING THE RATE OF 5% OF THE PURCHASES 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 R ETURNED. 9. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THIS CASE AND ALSO RESPECTFULLY FOLLOWING THE RATIOS 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 REN DERED UNDER DIFFERENT FACTS IS QUITE HIGH. ON THE OTHER HAND, THE ASSESSEE RELIED UPON THE DECISION OF COORDINATE BENCH AND THE COORDINATE BENCH UNDER SIMILAR CIRCUMSTANCES ESTIMATED THE NET PROFIT OF 5% ON TOTAL PURCHASES NET OF ALL DEDUCTIONS. NO CONTR ARY DECISION IS 5 ITA NO. 494 /VIZ/2016 ( MAJJI NAGA ) 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 ESTIMATE THE NET PROFIT OF 5% ON TOTAL PURCHASES NET OF ALL DEDUCTIONS. ORDERED ACCORDIN GLY. 9 . RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL, WE DIRECT THE A.O. TO RE - COMPUTE THE INCOME OF THE ASSESSEE AT 5% OF PURCHASE PRICE. ACCORDINGLY, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED. 10 . GROUND NO.4 RELATES TO SUSTENANCE OF ADDITION IN RESPECT OF UNSECURED LOAN OF RS. 4,50,000/ - FROM SRI MAJJI GOVINDA RAO AND RS. 3,75,000/ - FROM SRI MEKA SRINIVAS . 11 . FACTS OF THE CASE RELATING TO GROUND NO.4 IN BRIEF ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER N OTED THAT ASSESSEE HAD SHOWN UNSECURED LOAN OF RS. 10,60,000/ - IN REGARD TO WHICH , THE ASSESSEE FAILED TO FURNISH ANY CONFIRMATION LETTER. IN THE ABSENCE OF ANY SUPPORTING EVIDENCE, THE ASSESSING OFFICER MADE THE IMPUGNED ADDITION OF RS. 10,60,000/ - . 12. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE FILED CONFIRMATION LETTER S FROM THE LOAN CREDITORS TO THE TUNE OF RS.10,60,000/ - . U NDER RULE 46A , THE LD. CIT(A) FORWARDED THE SAME TO THE ASSESSING OFFICER FOR HIS COMMENTS ON ADMISSIBILITY AND VERACITY OF THE CLAIM MADE THROUGH THE ADDITIONAL EVIDENCE 6 ITA NO. 494 /VIZ/2016 ( MAJJI NAGA ) AND AFTER RECEIV ING THE REMAND REPORT, THE LD. CIT(A) ADMITTED THE SAME AND CONSIDERED FOR ADJUDICATION. 13. INSOFAR AS CREDIT IN THE NAME OF MAJJI GOVINDA RAO OF RS.4,50,000/ - , THE ASSESSEE FILED A COPY OF CONFIRMATION LETTER DATED 15/02/2014 ALONG WITH COPY OF BANK STATEMENT OF THE SAID CREDITOR . AS PER THE CONFIRMATION LETTER, THE SAID CR EDITOR ADVANCED HAND LOAN OF RS. 4,50,000/ - TO THE ASSESSEE ON 07/06/2010 VIDE INDIAN BANK DD NO. 986188. THE VERIFICATION MADE BY THE ASSESSING OFFICER WITH INDIAN BANK REVEALED THAT THE DD NO. 986188 WAS ISSUED FOR RS. 10,000/ - AND THE SAID DD WAS PURCHASED BY ONE N. SRINIVASA CHOUDHARY , THE SAME WAS PUT TO THE ASSESSEE . AS T HE ASSESSEE COULD NOT CLARIFY THE DISCREPANCY , THE ASSESSING OFFICER DOUBTED THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. 14 . ON APPEAL B EFORE THE LD. CIT(A) , THE COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE TRANSACTION IS GENUINE. THE LD. CIT(A) AFTER CONSIDERING THE DETAILS AND ALSO EXPLANATION GIVEN BY THE ASSESSEE, OBSERVED THAT THE LOAN CREDITOR HAS MENTIONED THAT HE HAD A HAND LOAN OF RS. 4,50,000/ - ON 07/06/2010 VIDE DD NO. 986188, BUT AS PER THE VERIFICATION WITH INDIAN BANK, IT IS SEEN THAT DD NO. 986188 WAS PURCHASED BY ONE N. SRINIVASA CHOUDHARY FOR RS. 10,000/ - ON 02/06/2010 . THUS, THERE ARE 7 ITA NO. 494 /VIZ/2016 ( MAJJI NAGA ) DISCREPANCIES AS TO THE DATE, DD NUMBER AND PURCHASER OF THE DD. THE AR REFERRED TO C O PY OF BANK STATEMENT OF MAJJI GOVINDA RAO WHEREIN THERE WAS A DEBIT OF RS. 4,60,695/ - ON 02/06/2010; AND THE BREAK - UP OF THIS AMOUNT WAS RECORDED BENEATH AS PER WHICH THE EMD DD NO. 986185 WAS TAKEN FOR RS.4,50,000/ - ; NON REF UND DEPOSIT FOR RS. 10,000/ - AND DD COMMISSION FOR RS. 695/ - . WITH REFERENCE TO THESE NOTINGS IN THE BANK STATEMENT, THE AR CONTENDED TH A T DD FOR RS. 4,50,000/ - WAS TAKEN AND THAT THE TRANSACTION WAS GENUINE, BUT COULD NOT FILE ANY CONFIRMATION OR CLARIFIC ATION FROM THE ALLEGED CREDITOR AND THE DISCREPANCIES POINTED OUT BY THE ASSESSING OFFICER HAS NOT BEEN CLARIFIED. BESIDES, NO EVIDENCE WAS ADDUCED TO PROVE THE CREDITWORTHINESS OF THE SAID CREDITOR , A S THE SAID DEBIT WAS PROCEEDED BY CASH CREDIT OF RS. 4 .5 LAKHS. ACCORDINGLY, THE LD.CIT(A) HAS CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 1 5 . ON APPEAL BEFORE US, LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE TRANSACTION IS GENUINE AND THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER HAS TO B E DELETED . 16 . WE HAVE GONE TH R OUGH THE ASSESSMENT ORDER AND THE ORDER OF THE LD. CIT(A) AND FIND THAT THERE IS A DISCREPANCY IN THE DATE OF DEMAND DRAFT TAKEN AND THE AMOUNT AND THE PURCHASER OF THE DD. WHEN THIS WAS POINTED OUT BY THE LD. CIT(A), THE LD. COUNSEL FOR 8 ITA NO. 494 /VIZ/2016 ( MAJJI NAGA ) THE ASSESSEE SIMPLY SUBMITTED THAT THE TRANSACTION IS GENUINE, THEREFORE, THE ASSESSING OFFICER AS WELL AS LD. CIT(A) DOUBTED THE ENTIRE TRANSACTION. THE ASSESSEE FAILED TO CLARIFY THE DISCREPANCIES POINTED OUT BY THE ASSESSING OFFICER AND FAILED TO PRODUCE CREDITOR BEFORE HIM, EVEN FAILED TO PROVE THE CREDITW O RTHINESS. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE , WE ARE OF THE OPINION THAT THE O NUS CASTED UPON THE ASSESSEE HAS NOT BEEN DISCHARGED. THEREFORE, THE AUTHORITIES BELOW HAVE RIGHTLY MADE THE ADDITION . THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 1 7 . INSOFAR AS UNSECURED LOAN IN RESPECT OF M. SRINIVASA RAO OF RS. 3.75 LAKHS IS CONCERNED, THE ASSESSEE HAS NOT FILED ANY DETAILS B E F O R E T H E ASSESSING OFFICER , SOME DETAILS WERE FILED BEFORE THE LD. CIT(A). THE LD. CIT(A) FORWARDED THE S A ME TO THE ASSESSING OFFICER AND AFTER RECEIVING REMAND REPORT, HE HAS OBSERVED THAT THE ASSESSEE HAD FILED A COPY OF CONFIRMATION LETTER DATED 17/02/2014 FROM ONE MEKA SRINIVASA STATING THAT HAND LOAN OF RS. 8.75 LAKHS WAS GIVEN TO MAJJI NAGA VIDE DD NO. 986363, 986359, 986362 AND OUT OF WHICH RS. 5.00 LAKHS WAS REPAID ON 09/08/2010 AND THAT RS. 3.75 LAKHS WAS OUTSTANDING AND SUBMITTED THA T THE CREDITOR WAS ASSESSED TO TAX. CO P Y OF LEDGER EXTRACT WAS ALSO FILED . THE ASSESSING OFFICER ON VERIFICATION NOTED THAT THE CREDITORS NAME WAS MENTIONED AS M.SRINIVASA RAO IN THE BALANCE 9 ITA NO. 494 /VIZ/2016 ( MAJJI NAGA ) SHEET , BUT CONFIRMATION LETTER WAS FILED FROM MEKA SRINIVASA AND THIS AMBIGUITY COULD NOT BE CLARIFIED. THE ASSESSING OFFICER FURTHER NOTED TH A T THE SAID DDS WERE NOT CREDITED INTO THE ASSESSEES BANK ACCOUNT. HENCE, THE ASSESSING OFFICER DOUBTED THE GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION. 18. ON AP PEAL B EFORE THE LD. CIT(A) , THE ASSESSEE HAS SUBMITTED THAT M.SRINIVASA IS ALSO CALLED MEKA SRINIVAS AND THAT THERE IS NO AMBIGUITY. IT IS FURTHER SUBMITTED THAT DDS WERE DRAWN IN FAVOUR OF EXCISE AUTHORITY TOWARDS LICEN CE FEE, AND HENCE, IT MAY NOT BE RE F LECTED IN THE ASSESSEES BANK STATEMENT. THE LD. CIT(A) CONSIDERED THE SAME AND OBSERVED THAT AMBIGUITY AS TO IDENTIFY OF THE CREDITOR COULD NOT BE CLARIFIED WITH ANY SUPPORTIVE EVIDENCE. EVEN ASSUMING THAT THE CREDIT TRANSACTION WAS FROM MEKA SRINIVAS, THE PERUSAL OF THE LEDGER EXTRACT OF MEKA S R INIVAS FILED AS ADDITIONAL EVIDENCE INDICATE THAT AN AMOUNT OF RS. 11,05,000/ - WAS ADVANCED TO THE ACCOUNT OF THE ASSESSEE ON 03/06/2010 AND THERE WAS REPAYMENT OF RS. 7,30,000/ - ; AS AGAI NST THE AVERMENT IN THE CONFIRMATION LETTER THAT RS. 8,75,000/ - WAS ADVANCED OF WHICH RS. 5.00 LAKH WAS REPAID. NO EVIDENCE WAS ADDUCED TO CLARIFY THIS. ACCORDINGLY, THE LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER BY OBSERVING THAT THE ASSESSE E FAILED TO DISCHARGE HIS ONUS CASTED UPON HIM. 10 ITA NO. 494 /VIZ/2016 ( MAJJI NAGA ) 1 9 . ON APPEAL BEFORE US EXCEPT STATING WHAT WAS STATED BEFORE THE LD. CIT(A), NO MATERIAL WAS BROUGHT TO OUR NOTICE THAT THE TRANSACTION IS GENUINE. BY CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE , WE ARE OF THE OPINION THAT THE ASSESSEE FAILED TO DISCHARGE THE BURDEN CASTED UPON HIM TO PROVE THE GENUINENESS OF THE TRANSACTION AND ALSO CREDITWORTHINESS OF THE CREDITOR. THEREFORE, THE AUTHORITIES BELOW RIGHTLY CONSIDERED THE ISSUE AND ADDITION I S MADE. WE FIND NO INFIRMITY IN THE ORDER OF THE LD.CIT(A). THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 20 . SO FAR AS GROUND NO.5 IN RESPECT OF ADDITION OF RS. 3.00 LAKHS IS CONCERNED, IN THE ASSESSMENT ORDER, THE ASSESSING OFF ICER HA S NOTED THAT THERE WAS CASH CREDIT OF RS. 3 .00 LAKHS IN THE C A PIT A L ACCOUNT AND THE ASSESSEE OFFERED THE SAME FOR TAXATION. THE ASSESSEE HAS NOT EXPLAINED THE SOURCE BEFORE THE ASSESSING OFFICER. THEREFORE, ASSESSING OFFICER HAS MADE THE ADDITION. 2 1 . ON APPEAL BEFORE THE LD. CIT(A) , THE AR CONTENDED THAT AS THE ASSESSEE OFFERED THE AMOUNT FOR TAXATION, NO SEPARATE ADDITION COULD BE MADE. THE LD. CIT(A) AFTER CONSIDERING THE EXPLAN A TION OF THE ASSESSEE OBSERVED THAT THE IMPUG N ED AMOUNT REPRESENTED CREDIT IN THE CAPITAL ACCOUNT ; AND IN REGARD TO ITS SOURCE NO EXPLANATION WAS GIVEN AND THE ASSESSING OFFICER DID NOT INCLUDE 11 ITA NO. 494 /VIZ/2016 ( MAJJI NAGA ) THIS AMOUNT WHILE ESTIMATING THE BUSINESS INCOME. ACCORDINGLY , THE LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 2 2 . BEFORE US , LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE AMOUNT OF RS. 3.00 LAKHS INCLUDES PROFIT EARNED BY THE ASSESSEE, THEREFORE, NO SEPARATE ADDITION CAN BE MADE, IT AMOUNTS TO DOUBLE ADDITION. THE AR OF THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE THE ABO VE ARGUMENTS WITH ANY SUPPORTIVE EVIDENCE. T HAT APART, THE ASSESSING OFFICER HAS NOT CONSIDERED THIS AMOUNT WHILE ESTIMATING THE BUSINESS INCOME. THEREFORE, WE FIND THAT THE AUTHORITIES BELOW HAVE CORRECTLY MADE THE ADDITION. THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 2 3 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 3 1 S T DAY OF JULY , 201 8 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 3 1 S T JULY , 201 8 . VR/ - COPY TO: 1. THE ASSESSEE - MAJJI NAGA, S/O KRISHNA, MALLIKARJUNA COLONY, RAJAM, SRIKAKULAM. 2. THE REVENUE ITO, WARD - 1, SRIKAKULAM. 3. THE CIT - 2, VISAKHAPATNAM. 4. THE CIT(A) - 2, VISAKHAPATNAM. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER