THE ITO, WARD - 1(2), Vijayawada V. Sri Aluri Harikishan Chowdary, Vijayawada

ITA 53/VIZ/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2048 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M N MURTHTY NAIKDR
• Assessee Lawyers: N O N E
• Keywords: Deemed to accrue or arise in india; Additional evidence
• Section: 144

Judgement Text

ITA NO.53/VIZAG/2013 A.HARIKISHAN CHOWDARY, VIJAYAWADA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.53/VIZAG/2013 ( / ASSESSMENT YEAR: 2009-10) ITO , WARD - 1(2) , VIJAYAWADA VS. A . HARIKISHAN CHOWDARY VIJAYAWADA [P AN: AGNPA7372A ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI M.N. MURTHTY NAIK,DR / RESPONDENT BY : N O N E / DATE OF HEARING : 27.01.2016 / DATE OF PRONOUNCEMENT : 1 9 .02.2016 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), VIJAYAWADA DATED 6.11.2012 AND IT PERTAINS TO THE ASSESSMENT YEAR 2009-10. ITA NO.53/VIZAG/2013 A.HARIKISHAN CHOWDARY, VIJAYAWADA 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL CARRYING ON BUSINESS AS TOUR OPERATOR IN THE NAME A ND STYLE OF M/S. CHOWDARY TOURS & TRAVELS. THE ASSESSEE HAS FILED H IS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 30.3.2010 DECLAR ING TOTAL INCOME OF ` 2,44,010/-. THE RETURN WAS PROCESSED U/S 143(1) O F THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') ON 9.8. 2010. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND ACCOR DINGLY, NOTICE U/S 143(2) OF THE ACT WAS ISSUED. AS STATED BY THE A.O . IN THE ASSESSMENT ORDER, THE A.O. HAS GIVEN SEVERAL OPPORTUNITIES OF HEARING TO THE ASSESSEE BY ISSUING NOTICES ON 19.8.2010, 29.9.2010 , 3.2.2011, 15.7.2011, 14.10.2011 & 2.12.2011, BUT THE ASSESSEE NEITHER APPEARED ON THE DATE FIXED FOR HEARING NOR FURNISHED ANY INF ORMATION CALLED FOR. SINCE, NO INFORMATION CAME FORWARD FROM THE ASSESSE E, THE A.O. PASSED BEST JUDGMENT ASSESSMENT ORDER U/S 144 OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT TH ERE IS CREDITS OF ` 1,03,10,358/- INTO SAVINGS BANK ACCOUNT MAINTAINED AT INDIAN BANK, SURYARAOPET BRANCH. IN VIEW OF ASSESSEES FAILURE TO EXPLAIN THE SOURCE OF CREDITS WITH ANY DOCUMENTARY EVIDENCES, THE TOTA L CREDIT OF ` 1,03,10,358/- IS CONSIDERED AS DEEMED INCOME OF THE ASSESSEE U/S 69A OF THE ACT. ITA NO.53/VIZAG/2013 A.HARIKISHAN CHOWDARY, VIJAYAWADA 3 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE HAS FILED WRITTEN SUBMISSION AND CONTENDED THAT THE A.O. WAS ERRED IN PASSING EX-PARTE ORDER WITHOUT GIVING REASONABLE OPPORTUNITY OF HEAR ING. THE ASSESSEE FURTHER SUBMITTED THAT HE HAS MAINTAINED BOOKS OF A CCOUNTS AND VOUCHERS TO SUBSTANTIATE THE NET PROFIT DECLARED FO R THE YEAR UNDER CONSIDERATION. HOWEVER, THE A.O. WITHOUT VERIFYING THE BOOKS OF ACCOUNTS MADE ADDITIONS TOWARDS TOTAL CREDITS INTO BANK ACCOUNT. THE CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS, FORWARDED THE EVIDENCES FILED BY THE ASSESSEE TO A.O. FOR HIS COM MENTS. IN RESPONSE, THE ASSESSING OFFICER VIDE HIS LETTER DATED 24.9.20 12 STATED THAT THE ASSESSEE DID NOT RESPONDED TO OPPORTUNITIES GIVEN F ROM TIME TO TIME AND HAS PROLONGED THE PROCEEDING TILL THE TIME BARRING DATE BY NON- COOPERATING WITH THE DEPARTMENT. THE A.O. FURTHER S TATED THAT THE ASSESSEE WAS NOT PREVENTED BY SUFFICIENT CAUSE FROM NOT PRODUCING ANY EVIDENCES IN SUPPORT OF HIS CLAIM. THE ADDITIONAL EVIDENCES PRODUCED BEFORE THE APPELLATE STAGE WAS ALREADY IN THE POSSE SSION OF THE ASSESSEE AT ASSESSMENT STAGE. BUT, ASSESSEE DID NOT CHOOSE TO PRODUCE THE SAME BEFORE THE A.O. THEREFORE, THE SAME CANNOT BE ADMIT TED IN APPEAL, UNLESS NON PRODUCTION OF THE EVIDENCES DURING THE C OURSE OF ASSESSMENT IS EXPLAINED. THE CIT(A), HOWEVER AFTER CONSIDERIN G THE EXPLANATIONS OF ITA NO.53/VIZAG/2013 A.HARIKISHAN CHOWDARY, VIJAYAWADA 4 THE ASSESSEE AND ALSO TAKEN INTO ACCOUNT THE OBSERV ATIONS OF A.O., HELD THAT THE ASSESSEE HAS EXPLAINED THE SOURCES FOR THE CREDITS INTO THE BANK ACCOUNT. THE CIT(A) FURTHER HELD THAT THE ASSESSEE HAS FILED A DETAILED CASH FLOW STATEMENT, WHEREIN HE HAS EXPLAINED THE S OURCES FOR THE CASH CREDITS INTO THE BANK ACCOUNT. IT WAS OBSERVED THA T OUT OF THE TOTAL CREDITS OF ` 1,03,10,358/-, ONLY FEW ARE CASH CREDITS AND REMAI NING CREDITS ARE EITHER BY WAY OF CHEQUE DEPOSITS OR BAN K TRANSFERS. THE CASH DEPOSIT INTO BANK ACCOUNT WAS SUPPORTED BY OPE NING CASH BALANCE AND THE BILLS RECEIVED FROM TIME TO TIME. HOWEVER, FOR ONE OCCASION ON 14.6.2008 AS AGAINST CASH BALANCE AVAILABLE OF ` 6,943/- THE ASSESSEE DEPOSITED AN AMOUNT OF ` 2,10,350/- RESULTING IN NEGATIVE CASH BALANCE OF ` 2,03,407/-. THUS, IF AT ALL ANY ADDITION IS WARRAN TED, IT MUST BE TO THE EXTENT OF ` 2,03,407/- ONLY. WITH THESE OBSERVATIONS, THE CIT( A) DIRECTED THE A.O. TO DELETE THE ADDITIONS MADE TOWA RDS CASH DEPOSITS OF ` 1,01,06,951/- AND CONFIRMED THE BALANCE AMOUNT OF ` 2,03,407/-. AGGRIEVED BY THE CIT(A) ORDER, THE REVENUE IS IN AP PEAL BEFORE US. 4. THE LD. D.R. SUBMITTED THAT THE CIT(A) WAS ERRED IN DELETING THE ADDITIONS MADE BY THE A.O. TOWARDS CASH CREDITS INT O BANK ACCOUNT. THE CIT(A) OUGHT NOT TO HAVE ADMITTED THE ADDITIONAL EV IDENCES, AS THE A.O. HAS VEHEMENTLY OBJECTED FOR ADMISSION OF ADDITIONAL EVIDENCES WITH ITA NO.53/VIZAG/2013 A.HARIKISHAN CHOWDARY, VIJAYAWADA 5 DETAILED REASONS WHY HE HAS NOT ACCEPTED EVIDENCES FILED AT THE TIME OF REMAND REPORT. THE LD. D.R. FURTHER SUBMITTED THAT THE CIT(A) HAS ACCEPTED THE ASSESSEES EXPLANATIONS WITH REGARD TO THE OPENING CASH BALANCE OF ` 13,44,974/- WITHOUT ANY EVIDENCES. THE ASSESSEE H AS DECLARED A MEAGER INCOME OF ` 1 TO 2 LAKHS IN THE EARLIER YEARS, THEREFORE, THERE IS NO REASON FOR ACCEPTING SUCH A HUGE OPENING CASH BALANCE OF ` 13,44,974/- TO EXPLAIN THE SOURCES FOR THE CASH CR EDITS INTO BANK ACCOUNT. THE D.R. FURTHER ARGUED THAT THE CIT (A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE ASSESSEE HAS NOT EXPL AINED THE CREDIT ON 9.6.2008 OF ` 5,69,430/- AND A FURTHER CREDIT OF ` 2,50,000/- ON 20.2.2009. THESE CREDITS WERE TOWARDS DD TAKEN FOR APBCL, BUT THE ASSESSEE DID NOT SHOWN ANY INCOME FROM THAT BUSINES S. THEREFORE, REQUESTED TO UPHOLD THE ASSESSMENT ORDER. ON THE OT HER HAND, NONE APPEARED FOR THE ASSESSEE. 5. WE HAVE HEARD THE LD. D.R., PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE A.O. MADE ADDITION OF ` 1,03,10,358/- U/S 69A OF THE ACT, TOWARDS CASH CREDITS INTO INDIAN BANK ACCOUNT, SURYARAOPETA BRAN CH. THE A.O. WAS OF THE OPINION THAT THE ASSESSEE HAS NOT EXPLAINED CRE DITS IN THE BANK ACCOUNT. THE A.O. FURTHER WAS OF THE OPINIONS THAT DESPITE REPEATED ITA NO.53/VIZAG/2013 A.HARIKISHAN CHOWDARY, VIJAYAWADA 6 OPPORTUNITIES, THE ASSESSEE DID NOT CHOOSE TO APPEA R AND FURNISH THE DETAILS. IT WAS THE CONTENTION OF THE ASSESSEE THAT HE WAS UNABLE TO APPEAR BEFORE THE A.O., BECAUSE HE WAS SUFFERING FR OM ILL HEALTH. THE ASSESSEE, HOWEVER CONTENDED THAT HE HAS MAINTAINED BOOKS OF ACCOUNTS AND OTHER RELEVANT VOUCHERS IN SUPPORT OF THE NET P ROFIT DECLARED FOR THE YEAR UNDER CONSIDERATION. THE A.O., WITHOUT REASONA BLE OPPORTUNITY OF HEARING COMPLETED THE ASSESSMENT U/S 144 OF THE ACT , WHICH IS NOT CORRECT. THE CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS FORWARDED THE DETAILS FURNISHED BY THE ASSESSEE TO THE ASSESSING OFFICER FOR HIS COMMENTS. THE A.O. IN HIS LETTER DATED 24.9 .2012 VEHEMENTLY OBJECTED THE ADDITIONAL EVIDENCES FILED BY THE ASSE SSEE FOR THE REASON THAT THE ASSESSEE HAS NOT FILED THE SAME BEFORE THE A.O., DESPITE REPEATED OPPORTUNITIES OF HEARING. 6. WE HAVE GONE THROUGH THE ASSESSMENT ORDER, SUBMIS SION OF ASSESSEE AND ORDER OF CIT(A). IT WAS THE CONTENTION OF THE ASSESSEE THAT HE HAS MAINTAINED THE BOOKS OF ACCOUNTS, HOWEVER CO ULD NOT PRODUCE BEFORE THE A.O. BECAUSE OF HIS ILL HEALTH. THE CIT (A) DELETED THE ADDITIONS, BY ADMITTING ADDITIONAL EVIDENCES FILED BY THE ASSESSEE, DESPITE VEHEMENTLY OPPOSED BY THE A.O. ON PERUSAL O F CIT(A) ORDER, WE FIND THAT THE CIT(A) HAS ACCEPTED OPENING CASH BALA NCE OF RS. ITA NO.53/VIZAG/2013 A.HARIKISHAN CHOWDARY, VIJAYAWADA 7 13,44,974/- AS THE SOURCE FOR CASH CREDITS INTO BAN K ACCOUNTS. ON FURTHER VERIFICATION OF RECORDS, WE NOTICED THAT TH E ASSESSEE HAS DECLARED A MEAGER INCOME OF RS. 1 TO 2 LACS IN THE PREVIOUS FINANCIAL YEARS. AS STATED BY THE CIT(A), THERE WAS A NEGATIVE CASH BA LANCE IN ONE OCCASION. THOUGH, CIT(A) SUSTAINED ADDITION TO THE EXTENT OF NEGATIVE CASH BALANCE, THE REASONS GIVEN FOR DELETING THE BA LANCE AMOUNT APPEARS TO BE BEAT AROUND THE BUSH. THE CIT(A) HAS FAILED TO GIVE ANY FINDINGS WITH REGARD TO TWO CASH DEPOSITS SPECIFICA LLY OBJECTED BY THE REVENUE. A PERSON DECLARING MEAGER INCOME OF RS. 1 TO 2 LACS PER ANNUM, CARRYING SUCH A HUGE OPENING CASH BALANCE AP PEARS TO BE OPPOSED TO HUMAN PROBABILITY. 7. IN THE PRESENT CASE ON HAND, DESPITE HAVING BEEN GIVEN NUMBER OF OPPORTUNITIES, THE ASSESSEE DID NOT APPEAR BEFORE T HE ASSESSING OFFICER. THE A.O. HAS BEEN PASSED EX-PARTE ORDER IN THE ABSE NCE OF ANY MATERIALS HAVING BEEN PLACED TO ESTABLISH THE SOURC E FOR CREDITS INTO BANK ACCOUNTS. IN APPEAL, AS STATED BY THE CIT(A), THE ASSESSEE HAS FURNISHED BOOKS OF ACCOUNTS AND VARIOUS MATERIALS T O EXPLAIN THE CREDITS INTO BANK ACCOUNT. THOUGH, REMAND REPORT WAS CALLED FOR, THE A.O. VEHEMENTLY OBJECTED THE ADMISSION OF ADDITIONAL EVI DENCES, AS SUFFICIENT CAUSE WAS NOT SHOWN FOR NOT PRODUCING SUCH MATERIAL S AT THE TIME OF ITA NO.53/VIZAG/2013 A.HARIKISHAN CHOWDARY, VIJAYAWADA 8 ASSESSMENT. HOWEVER, THE CIT(A), CONSIDERED SUCH MA TERIALS AND EVIDENCES WITHOUT FURTHER CONFRONTING THE SAME TO T HE ASSESSING OFFICER, WHICH IS VIOLATION OF RULE 46A OF INCOME TAX RULES 1962. MOREOVER, THE A.O. DID NOT HAVE AN OCCASION TO LOOK INTO THE BOOK S OF ACCOUNTS AND OTHER EVIDENCES FILED BY THE ASSESSEE. THEREFORE, C ONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINIO N THAT THE ISSUE NEEDS TO BE EXAMINED BY THE A.O. AFRESH IN THE LIGH T OF THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE. IN OUR VIEW IT WOU LD MEET THE ENDS OF JUSTICE, IF THE ORDER OF CIT(A) IS SET ASIDE AND MA TTER IS RESTORED TO THE FILE OF A.O.. WE, THEREFORE, REMIT THE ISSUE BACK TO THE FILE OF THE A.O. AND DIRECT THE A.O. TO PASS DENOVO ASSESSMENT, AFTE R AFFORDING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 19 TH FEB16. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 19.2.2016 VG/SPS ITA NO.53/VIZAG/2013 A.HARIKISHAN CHOWDARY, VIJAYAWADA 9 )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT ITO WARD-1(2), VIJAYAWADA 2. / THE RESPONDENT SRI ALURI HARIKISHAN CHOWDARY, PROP: CHOWDARY TOURS & TRAVELS, D.NO.1-1-7, 1 CENTRE, MAIN ROAD, GOLLAPU DI, VIJAYAWADA RURAL. 3. + / THE CIT, VIJAYAWADA 4. + ( ) / THE CIT (A), VIJAYAWADA 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // 12 . (SR.PRIVATE SECRETARY) . , # / ITAT, VISAKHAPATNAM