Medapati Bhasakar Rao, Tanuku V. THE ITO, Amalapuram

ITA 540/VIZ/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6382 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 17-10-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T SATYANANDAM
• Keywords: Unexplained investment; Business income; Depreciation
• Section: 44AD; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER ITA NO S . 537 TO 5 40 / VIZ /201 4 (ASST. YEAR S : 20 03 - 04 TO 2006 - 07 ) SRI MEDAPATI BHASKARA RAO, C/O I.S.B. SANKAR , AUDITOR, D.NO. 23 - 15 - 68/1, NEAR LIC OFFICE, SAJJAPURAM, BESIDES HARISCHANDRA TOWERS, TANUKU , W.G. DISTRICT. VS. ITO , WARD - 2, AMALAPURAM. PAN NO. AJTPM 2653 B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SHRI T. SATYANANDAM SR. DR DATE OF HEARING : 07 / 0 3 /201 7 . DATE OF PRONOUNCEMENT : 31 / 03 /201 7 . O R D E R TH ESE ARE THE APPEAL S FILED BY THE ASSESSEE AGAINST COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), VISAKHAPATNAM , DATED 28 /08/201 4 FOR THE ASSESSMENT YEAR S 2003 - 04 TO 2006 - 07 . ITA NO. 537/VIZ/2014 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE TRANSPORT AND SAND BUSINESS . A SURVEY WAS CONDUCTED IN THE ASSESSEES CASE ON 29/08/2007 AND THEREAFTER ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 OF THE ACT . AFTER DUE PROCESS, ASSESSMENT WAS COM P LETED UNDER SECTION 143(3)/147 OF THE ACT. THE ASSESSING OFFICER MADE TWO ADDITION S, ON E IS INCOME FROM SAND BUSINESS OF 30,000/ - 2 ITA NOS. 537 TO 5 40 /VIZ/2014 (MEDAPATI BHASKARA RAO) AND SECOND ONE IS UNEXPLAINED INVESTMENT IN TATA SAFARI CAR OF 3,36,000/ - . SO FAR AS ADDITION IN RESPECT OF SAND BUSINESS , IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS NOTED FROM THE IMPOUNDED MATERIAL TH A T THE ASSESSEE HAD CARRIED - OUT SAND BUSINESS IN THE REACH NO.18 . THE ASSESSEE HAD DEPOSED THAT THE INCOME EARNED WAS 30,000/ - . ACCORDINGLY , THE ASSESSING OFFICER MADE AN ADDITION OF 30,000/ - TO THE TOTAL INCOME. 3. BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AND IT WAS SUBMITTED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) THAT INVESTMENT MADE BY THE ASSESSEE WAS 30,000/ - , BUT THE ASSESSING OFFICER TOOK IT AS INCOME EARNED AND SUBMITTED THAT ADDITION MAY BE DELETED. HOWEVER, BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) HE HAS NOT SUBMITTED ANY DETAILS. KEEPING IN VIEW OF THE BUSINESS CARRIED - OUT BY THE ASSESSEE, THE COMMISSIONER OF INCOME TAX (APPEALS) WAS OF THE OPI NION THAT ESTIMATION OF INCOME OF 30,000/ - FROM THE SA ND BUSINESS IS REASONABLE. ACCORDINGLY, CONFIRMED THE ORDER OF THE ASSESSING OFFICER. EVEN B EFORE ME , ASSESSEE WAS NOT ABLE T O SU B STA N T I ATE ANY EVIDENCE THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS ON HIG H ER SIDE. IN VIEW OF THE ABOVE, I FIND NO REASON TO INTERFERE IN THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS). THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 3 ITA NOS. 537 TO 5 40 /VIZ/2014 (MEDAPATI BHASKARA RAO) 4 . THE SECOND GROUND OF APPEAL RELATES TO UNEXPLAINED INVESTMENT IN PURCHASE OF TATA SAFARI CAR. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTED FROM THE IMPOUNDED DOCUMENTS THAT THE ASSESSEE HAS PURCHASED A CAR FROM SRI TADI TADA RAO FOR A CONSIDERATION OF 6,48,000/ - . THE ASSESSEE IN HIS OWN STATEMENT DATED 21/09/2007 ADMITTED THAT HE PURCHASED A CAR FROM SRI TADI TADA RAO. WHEN QUESTION ED ABOUT THE DETAILS OF PAYMENTS, THE ASSESSEE DEPOSED THAT THE INSTALMENT PAYMENTS WERE ADJUSTED AGAINST THE FINANCIAL TRANSACTION WITH SRI TADI TADA RAO. THE ASSESSING OFFICER MADE ENQUIRIES WITH SRI TADI TADA RAO AND IT WAS NOTED TH A T SRI TADI TADA RAO HAS EXPIRED. HIS SON, SRI TADI NARASIMHA RAO HAS FILED A LETTER ON 24/12/2008 STATING THAT HIS FAT H ER HAS SOLD ONE TATA SAFARI CAR BEING NO. AP 04 - 5555 TO THE ASSESSEE AND THAT HIS FATHER HAD HANDED - OVER THE CAR WITH THE B L ANK TRANSFER F O RM AND THE ING VYSYA CAR LOAN ACCOUNT TO THE ASSESSEE. THE ASSESSING OFFICER HAS ALSO NOTED THAT THE ASSESSEE HA D MADE A TOTAL PAYMENT OF 3,36,000/ - DURING THE FINANCIAL YEAR 2002 - 03 AND 1,82,000/ - DURING THE FINANCIAL YEAR 2003 - 04 TOWARDS PURCHASE OF CAR. ACCORDINGL Y, THE ASSESSING OFFICER MADE ADDITION OF 3,36,000/ - FOR ASSESSMENT YEAR 2003 - 04 AND 1,82,000/ - FOR ASSESSMENT YEAR 2004 - 05 . 5 . ON APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) , IT WAS SUBMITTED BY THE ASSESSEE THAT HE PURCHASE D TATA SAFARI C A R AND MADE CERTAIN PAYMENTS AND THE SAME WAS REPAID BY SRI TADI TADA RAO 4 ITA NOS. 537 TO 5 40 /VIZ/2014 (MEDAPATI BHASKARA RAO) AND CAR WAS SOLD TO THIRD PARTY . THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GIVEN MANY OPPORTUNITIES TO FILE DETAILS ABOUT THE REPAYMENTS RECEIVED AND ALSO DETAILS IN RESPECT OF SALE OF CAR TO THE THIRD PARTY. THE ASSESSEE NEITHER APPEARED NOR FILED DETAILS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE , COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ORDER PASSED B Y THE ASSESSING OFFICER. EVEN BEFORE ME , THE ASSESSEE HAS NOT FILED ANY DETAILS IN RESPECT OF PAYMENTS RECEIVED FROM SRI TADI TADA RAO FROM WHOM ASSESSEE PURCHASED THE CAR NOR FILED ANY DETAILS OF THIRD PARTY TO WHOM CAR WAS SOLD . UNDER THESE FACTS AND C IRCUMSTANCES OF THE CASE , I FIND NO INFIRMITY IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. ITA NO. 538/VIZ/2014 6 . GROUNDS NO. 1 & 2 ARE GENERAL IN NATURE, HENCE, NO ADJUDICATION IS REQUIRED. GROUND NO.3 RELATING TO ADDITION IN RESPECT OF SAND BUSINESS TO THE TUNE OF 1,50,000/ - . IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER HAS NOTED T H A T THE ASSESSEE HAS INVESTED IN THE RAVULAPALEM SAND REACH TO THE EXTENT OF 25% SHARE HOLDING AND TOWARDS THE FIRST INSTALMENT , AN AMOUNT OF 3,87,500/ - WAS INVESTED DURING THE Y E AR. THE ASSESSING OFFICER ALSO ENQUIRED WITH SRI NALLAMILLI RAMACHANDRA REDDY , WHO CONFIRMED SUCH AN INVESTMENT. HE ALS O DEPOSED THAT ASSESS EE EARNED INCOME OF 2 LAKHS FROM SAND BUSINESS AS THE 5 ITA NOS. 537 TO 5 40 /VIZ/2014 (MEDAPATI BHASKARA RAO) ASSESSEE HAD THE ADVANTAGE OF OWN LORRIES . BASED ON THE DEPOSITION OF ASSESSEE AND ALSO SRI NALLAMILLI RAMACHANDRA REDDY, THE ASSESSING OFFICER ASSESSED AN AMOUNT OF 3,87,500/ - TOWARDS INVESTMENT I N SAND BUSINESS AND 2 LAKHS INCOME EARNED FROM THE SAND BUSINESS DURING THE YEAR . 7 . ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) RESTRICTED THE ADDITION TO 1,50,000/ - . BEFORE ME , THE ASSESSEE WAS NOT ABLE TO POINT OUT THAT THE ADDITION CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS ON HIGHER SIDE. LEARNED COUNSEL FOR THE ASSESSEE SIMPLE SUBMITTED TH A T NO BASIS FOR ADDITION. I FIND THAT THE ASSESSEE HAS INVESTED AN AMOUNT OF 3,87,500/ - AND HE HAS ALSO OWN LORRIES TO CARRY OUT THE BUSINESS, HENCE, IT IS REASO N A B LE TO ESTIMATE THE INCOME OF THE ASSESSEE FINALLY AT 1,50,000/ - IS FAIR AND JUST. THEREFORE, I FIND NO REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). THUS, THIS GROUND OF APPEAL FI LED BY THE ASSESSEE IS DISMISSED. 8 . GROUND NO.4 RELATING TO UNEXPLAINED INVESTMENT IN TATA SAFARI CAR TO THE TUNE OF 1,82,000/ - . THIS GROUND HAS ALREADY BEEN CONSIDERED AND ADJUDICATED IN ITA NO. 537/VIZ/2014, HENCE, NO SEPARATE ADJUDICATION IS REQUIRE D. THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 9 . GROUND NO.5 RELATING TO ADDITION IN RESPECT OF 3,87,500/ - TOWARDS INVESTMENT IN SAND REACH . IT WAS SUBMITTED BEFORE THE 6 ITA NOS. 537 TO 5 40 /VIZ/2014 (MEDAPATI BHASKARA RAO) ASSESSING OFFICER THAT THE ABOVE INVESTMENT IS MADE OUT OF INTERNAL CASH ACCRUALS OF THE ASSESSEE AND NO DETAILS WERE FILED BEFORE THE ASSESSING OFFICER. 10 . ON APPEAL , BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) IT WAS SUBMITTED THAT THE ASSESSING OFFICER MADE THE ADDITION WITHOUT CONSIDERING THE AVAILABLE SOURCE OF INCOME FROM TRANSPORT BUSINESS AND REQUESTED THAT TELESCOPING . COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE HELD THAT THE ASSESSING OFFICER HAD ALLOWED TELESCOPING IN THE ASSESSMENT YEAR 2005 - 06 IN REGARD TO INVESTMENTS MADE IN SAND BUSINESS DURING THAT YEAR TAKING INTO ACCOUNT THE INCOME OF PAST TWO YEARS. THUS, THERE IS EFFECTIVELY NO INCOME AVAILABLE FOR CONSIDERING THE PLEA OF TELESCOPING THIS YEAR. ACCORDINGLY, THIS PLEA WAS R EJECTED AND THE ADDITION WAS CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS). BEFORE ME , THE ASSESSEE WAS NOT ABLE TO POINT OUT ANY ERROR COMMITTED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AND ALSO NOT ABLE TO BRING ANY MATERIAL TO SHOW THAT THE ASSESSEE IS HAVING AN INCOME TO INVEST IN THE SAND BUSINESS IN THE YEAR UNDER CONSIDERATION. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT COMMISSIONER OF INCOME TAX (APPEALS) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OF FICER. THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 7 ITA NOS. 537 TO 5 40 /VIZ/2014 (MEDAPATI BHASKARA RAO) ITA NO. 539/VIZ/2014 1 1 . GROUND NO.3 RELATING TO ADDITION IN RESPECT OF INCOME FROM SAND BUSINESS TO THE TUNE OF 4,02,413/ - . DURING THE COURSE OF SURVEY AND AFTER ENQUIRIES, IT IS REVEALED THAT THE ASSESSEE HAD INVESTED TO THE EXTENT OF 17.5% SHARE AMOUNTING TO 4,37,500/ - TOWARDS FIRST INSTALMENT IN THE RAVULAPALEM SAND REACH BID BY KOPELLA MALLIKHARJUNA RAO SHOWS THAT HE WAS ONLY A NAME LENDER AND WORK ED AS A CLERK WITH THE ASSESSEE. HE ALSO DEPOS ED THAT THE ASSESSEES SHARE WAS TO THE TUNE OF 40% AND THE REMAINING SHARES HELD BY GOLUGURI MUNI REDDY AND OTHERS. THE ASSESSING OFFICER ALSO NOTED SUBSTANTIAL CREDITS IN THE ASSESSEES BANK ACCOUNT TO THE TUNE OF 50,30,160/ - AND THE SAME WAS CONSIDERED AS RECEIPTS FROM SAND BUSINESS AND WITH REFERENCE TO WHICH THE ASSESSING OFFICER ESTIMATED THE ASSESSEES INCOME AT 8% AMOUNTING TO 4,02,413/ - . WITH REGARD TO INVESTMENT OF 4,37,500/ - IN THE SAND BUSINESS, THE ASSESSING OFFICER DID NOT MAKE SEPARATE ADDITION AS HE HAS ALLOWED TELESCOPING WITH REFERENCE TO EARLIER YEAR INCOME. 1 2 . BEFORE COMMISSIONER OF INCOME TAX (APPEALS), IT WAS CONTENDED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN TAKING THE CREDITS IN THE BANK ACCOUNT AS REPRESENTING RECEIPTS FROM SAND BUSINESS . IT WAS ARGUED TH A T THE ASSESSEE HAS DEPOSED THAT HIS INCOME FROM SAND BUSINESS WAS 2 LAKHS AND WITHOUT CONSIDERING THE SAME, THE ASSESSING OFFICER HAD ESTIMATED THE INCOME AT 8% OF CREDITS IN BANK ACCOUNT. THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE 8 ITA NOS. 537 TO 5 40 /VIZ/2014 (MEDAPATI BHASKARA RAO) EXPLANAT ION OF THE ASSESSEE, OBS ERVED T H A T FROM PERUSAL OF THE ASSESSMENT ORDER , IT IS SEEN TH A T SEVERAL OPPORTUNITIES WERE GRANTED TO THE ASSESSEE TO REPRESENT HIS CASE . T HERE WAS TOTAL NON - COMPLIANCE TO THE VARIOUS NOTICES ISSUED . HE FURTHER OBSERVED THAT ASSESSING OFFICER IS JUSTIFIED IN DRAWING THE INFERENCES THAT BASED ON THE I NQUIRIES CONDUCTED , STATEMENT RECORDED FROM THE ASSESSEE AND MATERIALS IMPOUNDED. THE ASSESSEE HAS NOT FURNISHED ANY INFORMATION REGARDING BANK CREDITS. DURING THE COURSE OF APPELLATE PROCEEDINGS ALSO, NO INFORMATION WAS GIVEN WITH REGARD TO DEPOSITS IN THE BANK ACCOUNT , A CCORDINGLY, HE UPHELD THE ORDER PASSED BY THE ASSESSING OFFICER. BEFORE ME, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED TH A T THE ADDITION MADE BY THE ASSESSING OFFICER ON ESTIMATE BASIS IS WITHOUT ANY BASIS, HOWEVER, THE ASSESSEE HAS NOT FILED ANY MATERIAL TO EXPLAIN THE SOURCE OF CREDITS IN THE BANK ACCOUNT TO THE TUNE OF 50,30,160/ - . UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE , I FIND THAT ASSESSING OFFICER HAS JUSTIFIED I N ESTIMATING THE INCOME OF THE ASSESSEE AND THE SAME WAS CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS). I FIND NO REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE I S DISMISSED. 1 3 . G ROUND NO.4 OF THE APPEAL RELATING TO UNEXPLAINED INVESTMENT IN PURCHASE OF EX - 210 TO THE TUNE OF 4,55,000/ - . IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER HAS NOTED FROM THE IMPOUNDED DOCUMENTS 9 ITA NOS. 537 TO 5 40 /VIZ/2014 (MEDAPATI BHASKARA RAO) THAT , IT IS FOUND TH A T THE ASSESSEE HAD PURCHASED ONE EX - 210 BY OBTAINING A LOAN FROM TATA MOTORS FINANCE VIDE CONTRACT DATED 15/12/2014 . THE INITIAL HIRE AMOUNT PAID WAS 4,55,000/ - AND THE BALANCE AMOUNT OF 39 LAKHS WAS FINANCED BY TATA MOTORS LTD. SO FAR AS INITIAL PAYMENT MADE BY THE AS SESSEE TO THE TUNE OF 4,55,000/ - , T HE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS NOT GIVEN ANY EXPLANATION, HENCE, IT WAS BROUGHT TO TAX AS UNEXPLAINED INVESTMENT. 14. ON APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) NO EXPLANATION WAS GIVEN. EVEN BEFORE ME, THE ASSESSEE HAS NOT GIVEN ANY EXPLANATION IN RESPECT OF SOURCE OF INITIAL INVESTMENT. IN VIEW OF THE ABOVE, ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS) WAS JU STIFIED . I FIND NO REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 15. GROUND NO.5 RELATING TO ADDITION TOWARDS UNEXPLAINED INVESTMENT IN LAND TO THE TUNE OF 4,12,665/ - . IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE HAS PURCHASED 300.57 SQ.YDS . OF PLOT ON 20/12/2004 FOR A CONSIDERATION OF 3,70,000/ - IN THE NAME OF HIS SON SHRI MEDAPATI BALA BALAJI, WHO IS A STUDENT AGED ABOUT 19 YEARS WITHOUT ANY SOURCE OF INCOME. THE ASSESSEE IN HIS DEPOSITION DATED 23/12/2008 STATED TH A T THE INVESTMENT WAS MADE BY THE ASSESSEE OUT OF HI S BUSINESS INCOME . AS THE SOURCE FOR INVESTMENT WAS 10 ITA NOS. 537 TO 5 40 /VIZ/2014 (MEDAPATI BHASKARA RAO) NOT EXPLAINED, THE ASSESSING OFF ICER MADE AN ADDITION OF 4,12,655/ - WHICH INCLUDED EXPENSES TOWARDS STAMP DUTY AND REGISTRATION CHARGES. 16. O N APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), IT WAS SUBMITTED THAT ASSESSEES SON SHRI MEDAPATI BALA BALAJI IS ON THE ROLLS OF ITO, WARD - 2, AMALAPURAM , HOWEVER , NO EVIDENCE WAS FILED TO SUBSTANTIATE THE SOURCE OF INVESTMENT AND ALSO RETURN OF INCOME FILED BY HIS SON. IN THIS VIEW OF THE MATTER, COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. EVEN B EFORE ME, NO MATERIAL IS FILED TO SUBSTANTIATE THAT THE ASSESSEES SON IS HAVING SOURCE OF INCOME TO PURCHASE THE LAND. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE , I FIND NO INTERFERENCE IS REQUIRED IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. ITA NO. 540/VIZ/2014 17. GROUND NO S . 3 & 5 ARE RELATING TO ADDITION TOWARDS INCOME FROM SAND BUSINESS AND UNEXPLAINED INVESTMENT . DURING THE COURSE OF SURVEY , ENQUIRIES WERE CONDUCTED AND THE ASSESSEE REVEALED THAT SHRI MEDAPATI BHASKARA RAO WAS ENGAGED IN SAND BUSINESS FOR THE LAST SEVERAL YEARS. WHEN THE ASSESSEE WAS QUESTIONED ON TH IS , THE ASSESSEE DEPOSED WHILE REPLYING TO QUESTION NOS. 6 & 7 IN HIS SWORN STATEMENT DATED 21/09/2007 THAT IN ORDER TO GET REGULAR WORK FOR HIS LORRIES, YEAR AFTER YEAR HE IS TAKING SOME SHARE IN THE BUSINESS OF SUCCESSFUL BIDDER 11 ITA NOS. 537 TO 5 40 /VIZ/2014 (MEDAPATI BHASKARA RAO) OF SAND REACH AUCTIONS AND THAT HE INVESTED FOR 25% SHARE AMOUNTING TO 4,31,250/ - TOWARDS FIRST IN STALMENT IN THE ALAMURU/JONNADA SAND REACH BID BY SRI POTHULA BHASAKARA RAO DURING THE FINANCIAL YEAR 2005 - 06 RELEVANT TO THE ASSESSMENT YEAR 2006 - 07. HE ALSO DEPOSED THAT HE EARNED INCOME OF AROUND 1.5 LAKHS FROM SAND BUSINESS. THE ASSESSING OFFICER BY CONSIDERING THE SWORN STATEMENT MADE BY THE ASSESSEE ON 29/07/2007 , CONCLUDED THAT THE ASSESSEE HAS MADE INVESTMENT OF 4,31, 2 50/ - IN THE SAND BUSINESS AND EARNED THE INCOME OF 1.5 LAKH FOR THE ASSESSMENT YEAR 2006 - 07 , T HEREFORE , THE ASSESSING OFFICER , BROUGHT TO TAX THE INVESTMENT OF 4,31,250/ - AND 1.5 LAKH EARNED FROM BUSINESS AS INCOME . 18. ON APPEAL , THE ASSESSEE HAS SUBMITTED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) THAT THE ASSESSEE HAS DEPOSED BEFORE TH E ASSESSING OFFICER THAT INCOME FROM BUSINESS OF 1.5 LAKH WHICH WAS WRONGLY TAKEN AS INCOME FROM SAND BUSINESS. SO FAR AS , INVESTMENT IS CONCERNED, THE ASSESSEE HAS NOT SUBMITTED ANYTHING BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE , THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER . I N RESPECT OF 1.5 LAKHS TOWARDS BUSINESS INCOME FROM SAND AND ALSO INVESTMENT OF 4,31,250/ - CONFIRMED THE ORDER OF THE ASSESSING OFFICER. EVEN BEFORE ME, THE ASSESSEE HAS NOT ABLE TO POINT OUT ANY ERROR COMMIT T ED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AND NOT FILED ANY MATERIAL TO 12 ITA NOS. 537 TO 5 40 /VIZ/2014 (MEDAPATI BHASKARA RAO) SUBSTANTIATE THAT THE ADDITIONS MADE BY THE AUTHORITIES BEL OW ARE NOT CORRECT. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE , I AM OF THE VIEW THAT NO INTERFERE NCE IS REQUIRED IN THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS). THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 19 . GROUND NO.4 RELATING TO INCOME FROM OPERATION OF EX - 210 TO THE TUNE OF 6,69,314/ - . IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER HAS NOTED FROM THE IMPOUNDED MATERIAL AND DEPOSITION OF THE ASSESSEE THAT THE ASSESSEE HAD EARNED 15,03,600/ - FROM EX - 210 MACHINE DURING THE YEAR . AFTER CONSIDERING THE ASSESSEES CLAIM FOR DEPRECIATION AND INTEREST PAYMENT, THE ASSESSING OFFICER B R OUGHT TO TAX NET INCOME OF 7,69,314/ - AS AGAINST WHICH THE ASSESSEE HAD OFFERED INCOME OF 1LAKH AND THE DIFFERENCE OF 6,69,314/ - WAS SUBJECTED TO ASSESSMENT. 20 ON APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE HAS NOT POINTED OUT ANY MISTAKE AND NO MATERIAL IS FILED TO SUBSTANTIATE TH A T THE ADDITION MADE BY THE ASSESSING OFF ICER IS NOT CORRECT. THEREFORE, THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. EVEN BEFORE ME ALSO, NEITHER POINTED OUT ANY MISTAKE COMMITTED BY THE AUTHORITIES BELOW NOR FILED ANY MATERIAL TO SHOW THAT THE ADDITION MADE BY THE AUTHORITIES BELOW ARE NOT CORRECT. I N VIEW OF THE ABOVE, I FIND NO REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 13 ITA NOS. 537 TO 5 40 /VIZ/2014 (MEDAPATI BHASKARA RAO) 21 . GROUND NO.6 RELATING TO ADDITION TOWARDS CONTRACT BUSINESS TO THE TUNE OF 1 , 29 , 779/ - . IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER HAS NOTED THAT THE AMOUNT OF 16,22,230/ - WAS HELD BY THE ASSESSEE IN SB A/C. 30010047777 AND 330010047997 WITH ING VYSYA BANK . THE AMOUNTS WERE TRANSFERRED FROM ONE SRI DAT T ATREYA COMPANY OF KAKINADA . WITH REFERENCE TO THESE TRANSACTIONS, THE ASSESSEE STATED TH A T THE SAID AMOUNTS WERE DEPOSITED IN HIS ACCOUNT AGAINST THE SAND WORKS EXECUTED BY HIM FOR DATTATREYA COMPANY. ACCORDINGLY , THE ASSESSING OFFICER ESTIMATED THE INCOME FROM THIS CONTRACT WORKS @ 8% UNDER SECTION 44AD OF THE ACT W HICH AMOUNTS TO 1,29,778/ - . 22. ON APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) , IT WAS SUBMITTED THAT THE ASSESSEE SUPPLIED ONLY SAND TO DATTATREYA COMPANY AND MONEY COLLECTED TOWARDS SAND WERE PAID TO THE ORIGINAL OWNERS AND THE ASSESSEE EARNED ONLY PLYING CHARGES . HOWEVER, THE ASSESSEE H A S NOT FILED ANY EVIDENCE TO SHOWS TH A T THE AMOUNT RECEIVED FROM DATTATREYA COMPANY HAS BEEN PAID TO ORIGINAL OWNERS OF THE SAND. HE HAS ALSO NOT GIVEN THE DETAILS OF THE ORIGINAL OWNERS. BEFORE ME ALSO, THE ASSESSEE HAS NOT SUBMITTED ANY DETAI LS REGARDING ORIGINAL OWNERS AND ALSO NOT ABLE TO SUBSTANTIATE THAT THE AMOUNT CREDITED IN HIS BANK ACCOUNT HAS BEEN TRANSFERRED TO OWNERS OF THE SAND. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE , I FIND THAT NO ERROR IN THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS), HENCE, NO 14 ITA NOS. 537 TO 5 40 /VIZ/2014 (MEDAPATI BHASKARA RAO) INTERFERENCE IS REQUIRED . THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 23 . IN THE RESULT, ALL THE APPEAL S FILED BY THE ASSESSEE ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 3 1 S T DAY OF MARCH , 201 7 . S D / - ( V. DURGA RAO ) JUDICIAL MEMBER DATED : 3 1 S T MARCH , 201 7 . VR/ - COPY TO: 1 . THE ASSESSEE - SRI MEDAPATI BHASKARA RAO, C/O I.S.B. SANKAR, AUDITOR, D.NO. 23 - 15 - 68/1, NEAR LIC OFFICE, SAJJAPURAM, BESIDES HARISCHANDRA TOWERS, TANUKU, W.G. DISTRICT. 2 . THE REVENUE - ITO, WARD - 2, AMALAPURAM. 3 . THE CIT, RAJAHMUNDRY . 4 . THE CIT(A) , VISAKHAPATNAM. 5 . THE D.R . , VISAKHAPATNAM. 6 . GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY , I.T.A.T., VISAKHAPATNAM