Smt Kshatri Jayanthi, Eluru V. The ITO, Ward-2, Eluru

ITA 523/VIZ/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50199 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-04-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 06-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SASMAL
• Section: 131; 148

Judgement Text

ITA NO 523 OF 2010 KSHATRI JAYANTHI, ELURU 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. 523/VIZAG/2010 ASSESSMENT YEAR:2003-04 SMT. KSHATRI JAYANTHI, ELURU VS. ITO WARD-2, ELURU (APPELLANT) PAN NO: AJDPK 5244 Q (RESPONDENT) APPELLANT BY: SHRI G.V.N. HARI, CA RESPONDENT BY: SHRI B. SASMAL, DR ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 9.9.2010 PASSED BY LEARNED CIT(A), RAJAHMUNDRY AND IT RELATES TO THE ASSESSMENT YEAR 203-04. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE RELATED TO THE FOLLOWING TWO ISSUES: A) DISALLOWANCE OF COMMISSION PAID TO SUB AGENTS R S.1,95,000/- B) DISALLOWANCE OF ADDITIONAL EXPENDITURE RS.2,06, 605/- 3. THE FACTS RELATING TO THE ISSUES ARE STATED IN B RIEF. THE ASSESSEE IS ONE OF THE AGENTS OF A CHIT COMPANY NAMED M/S SRIRA M CHITS PVT. LTD. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE ORIGINAL LY FILED HER RETURN OF INCOME ON 23.12.2003 ADMITTING AN INCOME OF RS.70,1 70/-. SUBSEQUENTLY, IT CAME TO THE KNOWLEDGE OF THE DEPARTMENT THAT THE ASSESSEE WAS AWARDED A TOYOTA QUAILS CAR BY SRIRAM CHITS LIMITED AS INCENTIVE FOR ACHIEVING THE DEPOSIT TARGETS. IT WAS NOTICED THAT THE ASSESSEE DID NOT OFFER THE VALUE OF TOYOTA QUAILS CAR AS INCOME IN HER ORI GINAL RETURN OF INCOME. ITA NO 523 OF 2010 KSHATRI JAYANTHI, ELURU PAGE 2 OF 4 ACCORDINGLY A NOTICE UNDER SECTION 148 WAS ISSUED T O THE ASSESSEE. IN RESPONSE THERETO THE ASSESSEE FILED A RETURN OF INC OME ADMITTING A TOTAL INCOME OF RS.93,560/-. THE ASSESSEE TOOK THE VALUE OF TOYOTA QUAILS CAR AT RS.4,25,000/- AND DECLARED THE SAME AS HER INCOME I N THE RETURN OF INCOME. HOWEVER, THE ASSESSEE ALSO CLAIMED FOLLOWING EXPENS ES AGAINST THE ABOVE SAID INCOME. A) COMMISSION PAID TO SUB AGENTS - RS.1,95,000 B) ADDITIONAL EXPENDITURE UNDER VARIOUS HEADS- RS.2 ,06,605/- IN SUPPORT OF EXPENDITURE ON COMMISSION PAYMENT, THE ASSESSEE FURNISHED THE NAME AND ADDRESSES OF 13 PERSONS TO WHOM COMMIS SION WAS SAID TO HAVE BEEN PAID AT RS.15,000/- EACH. IN ORDER TO VER IFY THE GENUINENESS OF THE COMMISSION PAYMENT, THE ASSESSING OFFICER ISSUE D SUMMONS UNDER SECTION 131 OF THE ACT TO ALL THE 13 PERSONS. HOWEV ER, THE SUMMONS ISSUED TO 7 PERSONS WAS RETURNED BACK UN-SERVED. ONE PERSO N NAMED SHRI M. NARASIMHA RAO DID NOT COMPLY WITH THE SUMMONS. ANOT HER PERSON NAMED SMT. T. JANAKI BALA APPEARED BEFORE THE ASSESSING O FFICER, BUT DENIED RECEIPT OF ANY COMMISSION FROM THE ASSESSEE. THE FO LLOWING 4 PERSONS APPEARED BEFORE THE ASSESSING OFFICER AND IN THE ST ATEMENT TAKEN FROM THEM, THEY ADMITTED THE RECEIPT OF COMMISSION FROM THE ASSESSEE: (A) SRI R. SRINIVAS (B) SRI K. RAMESH (C) SMT. E. PARVATHI (D) SRI K. MARUTHI RAO HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WI TH THE GENUINENESS OF THE COMMISSION PAYMENTS AND ACCORDINGLY DISALLOWED THE SAME. THE ASSESSEE ALSO COULD NOT SUPPORT THE CLAIM OF ADDITI ONAL EXPENDITURE OF RS.2,06,605/- WITH PROPER VOUCHERS AND HENCE THE SA ID CLAIM WAS ALSO DISALLOWED. THE APPEAL FILED BY THE ASSESSEE BEFOR E THE LEARNED CIT (A) WAS ALSO DISMISSED. HENCE THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. WITH REGARD TO THE CLAIM OF COMMISSION PAYM ENTS, WE NOTICE THAT ITA NO 523 OF 2010 KSHATRI JAYANTHI, ELURU PAGE 3 OF 4 OUT OF 13 PERSONS, ONLY 4 PERSONS HAVE APPEARED BEF ORE THE ASSESSING OFFICER. THOUGH THE SAID FOUR PERSONS HAVE CONFIR MED THE RECEIPT OF COMMISSION FROM THE ASSESSEE, YET THE ASSESSING OFF ICER DID NOT ACCEPT THE SAID CLAIM FOR THE FOLLOWING REASONS: (I) IDENTICAL AMOUNTS WERE PAID IN CASH TO ALL OF THEM. (II) THEY WERE NOT ASSESSED TO INCOME TAX AND NO RETURN W AS FILED. (III) THOUGH THE DEPOSITS WERE CLAIMED TO HAVE BEEN MOBIL IZED DURING SEPTEMBER 2002, NOVEMBER 2002, THE COMMISSIO N WAS SHOWN TO HAVE BEEN PAID ONLY IN MAY 2003 I.E. 7 MONTHS AFTER THE MOBILIZATION OF DEPOSITS. (IV) THEY COULD NOT EXPLAIN THE NATURE OF SERVICES RENDE RED TO THE APPELLANT AND COULD NOT TELL THE NAMES AND ADDR ESSES OF THE DEPOSITORS CONTACTED, AMOUNT DEPOSITED ETC. (V) THEY NEVER UNDERTOOK SIMILAR WORK FOR ANY OTHER PER SON AND TO THE APPELLANT IN ANY OTHER YEAR. THE LEARNED CIT (A) HAS ALSO OBSERVED THAT THE ASSE SSEE HAS, FOR THE FIRST TIME, CLAIMED PAYMENT OF COMMISSION IN THE RETURN O F INCOME FILED IN RESPONSE TO THE NOTICE UNDER SECTION 148. THERE CA NNOT BE ANY DOUBT THAT IT IS THE RESPONSIBILITY OF THE ASSESSEE TO PROVE T HE EXPENDITURE CLAIMED BY HIM. IT IS A FACT THAT THERE WAS NO MENTION OF ANY COMMISSION PAYMENT IN THE ORIGINAL RETURN OF INCOME. HENCE, ON A CONSIDE RATION OF REASONING GIVEN BY THE ASSESSING OFFICER AS WELL AS THE CIT (A), WE ARE OF THE VIEW THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE IMPUGNED COMMISSION PAYMENTS. ACCORDINGLY WE CONFIRM THE ORDER OF THE L EARNED CIT (A) ON THIS ISSUE. 5. THE NEXT ISSUE RELATES TO THE DISALLOWANCE OF EX PENDITURE CLAIM OF RS.2,06,605/-. THE ASSESSEE CLAIMED ADDITIONAL EXPE NDITURE OF RS.2,06,605/- UNDER VARIOUS HEADS IN THE RETURN OF INCOME FILED IN RESPONSE TO THE NOTICE UNDER SECTION 148. HOWEVER, DURING T HE COURSE OF ASSESSMENT ITA NO 523 OF 2010 KSHATRI JAYANTHI, ELURU PAGE 4 OF 4 PROCEEDING, THE ASSESSEE COULD NOT PRODUCE ANY BILL OR VOUCHER IN SUPPORT OF THE SAID CLAIM. THE ASSESSING OFFICER HAS ALSO N OTICED THAT THE ASSESSEE HAS INCURRED THE ENTIRE ADDITIONAL EXPENDITURE IN C ASH AND FOR THAT PURPOSE, SHE HAS INTRODUCED CASH CREDITS TO THE TUNE OF RS.2 ,30,000/- IN THE NAME OF VARIOUS FAMILY MEMBERS. HENCE THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE SAID CLAIM AND ACCORDINGLY DISALLOWED THE SAME. THE LEARNED CIT (A) ALSO CONFIRMED THE SAID DISALLOWANCE. BEFORE U S ALSO THE ASSESSEE COULD NOT PRODUCE ANY MATERIAL IN SUPPORT OF THE SAID CLA IM. HENCE WE DO NOT FIND ANY REASON TO INTERFERE IN THE DECISION OF THE LEAR NED CIT (A) ON THIS ISSUE ALSO. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 9 TH MAY, 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE: 09-05-2011 COPY TO 1 SMT. KSHATRI JAYANTHI, 25-4-3 K.S.R. STREET, N.R. PET, ELURU 534006 2 THE ITO WARD-2 ELURU 3 4. THE CIT RAJAHMUNDRY THE CIT(A), RAJAHMUNDRY 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM