Pinninty Ramesh, Rajam V. The Income Tax Officer, Ward-3, Srikakulam

ITA 623/VIZ/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0854 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 08-11-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Keywords: Tax effect

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 I . T . A . NO. 623 /VIZ/2019 (ASST. YEAR : 20 1 3 - 1 4 ) PINNINTY RAMESH , PROP. RAMESH NAIDU JEWELLERS , NTR SHOPPING COMPLEX, MAIN ROAD, RAJA, SRIKAKULAM DISTRICT. VS. ITO, WARD - 3 , SRIKAKULAM . PAN NO. ALHPP 2864 K (APP ELLANT ) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI , ADVOCATE DEPARTMENT BY : SMT. SUMAN MALIK, SR. DR DATE OF HEARING : 11 / 0 3 /2020 . DATE OF PRONOUNCEMENT : 10 / 0 6 /20 20 . 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 , GUNTUR , DATED 1 8 / 1 0/201 9 FOR THE ASSESSMENT YEAR 20 1 3 - 1 4 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE ORDER OF THE LD. CIT(A) - 2, GUNTUR IS CONTRARY TO THE FACTS AND ALSO THE LAW APPLICABLE TO THE FACTS OF THE CASE . --- 2. THE LD. CIT(A) IS NOT JUSTIFIED IN SUSTAINING THE ADDITIONS OF RS. 1,65,600/ - AND RS. 52,750/ - MADE TOWARDS ALLEGED UNEXPLAINED PAYMENTS TO RS. 57,430/ - 2 ITA NO. 62 3 /VIZ/2019 ( PINNINTY RAMESH ) M/S. SRIRAM CITY UNION FINANCE LIMITED 3. THE LD. CIT(A) IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS. 1,566/ - MADE TOWARDS DIFFERENCE IN OUTSTANDING GOLD LO A N AMOUNT RS. 393/ - 4. THE LD. CIT(A) IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS. 18,44,500/ - MADE BY THE ASSESSING OFFICER TOWARDS ALLEGED UNEXPLAINED CASH DEPOSITS IN BANK ACCOUNT RS.4,63,891/ - 5 . ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF APPEAL HEARING. --- TOTAL TAX EFFECT RS. 5,21,714/ - 3 . GROUND NOS. 1 & 5 ARE GENERAL IN NATURE , NO ADJUDICATION IS REQUIRED, THEREFORE SAME ARE DISMISSED. GROUND NO.3 NOT PRESSED BEFORE LD. CIT(A) , THEREFORE IT CANNOT BE AGITATED BEFORE THE ITAT UNLESS ADDITIONAL GROUND IS RAISED, THEREFORE, SAME IS DISMISSED. GROUND NO.2 RELATES TO ADDI TION OF RS. 57,430/ - . 4 . FACTS OF THIS ISSUE IN BRIEF ARE THAT IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS NOTED THAT ASSESSEE HAS MADE PAYMENT S OF RS. 1,65,600/ - ON 30/06/2012 & RS.52,750/ - ON 25/09/20152 TO M/S. SRIRAM CITY UNION FINANCE LIMITED . THESE PAYMENTS ARE NOT REFLECTED IN CASH BOOKS OF THE ASSESSEE . THE ASSESSEE HAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THESE PAYMENTS ARE INITIALLY ARRANGED BY THE AGENT (MIDDLE MAN) WHO IS THE AGENT OF THE SAME COMPANY AND SUBSEQU E NTLY ON 03/01/2013 ASSESSEE HAS REPAID THE AMOUNT. THE ASSESSING OFFICER HAS DISBELIEVED THE EXPLANATION OF THE ASSESSEE ON THE GROUND THAT AN AGENT WHO WORKS FOR PETTY COMMISSION FINANCES CANNOT MAKE PAYMENT OF 3 ITA NO. 62 3 /VIZ/2019 ( PINNINTY RAMESH ) HUGE AMOUNT ON BEHALF OF THE ASSESSEE , ACCORDINGLY ADDITION W AS MADE. 5. ON APPEAL , LD. CIT(A) HAS OBSERVED THAT ASSESSEE HAS NOT FILED THE DETAILS OF THE AGENT (MIDDLE MAN) SUCH AS NAME , POSTAL ADDRE S S AND HIS IDENTIFICATION ETC. AND NO CONFIRMATION FROM THE AGENT IS PRODUCED , THEREFORE CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 6 . WE HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL AS LD.CIT(A)S ORDER AND FIND THAT ASSESSEE FAILED TO DISCHARGE THE BURDEN CASTED UPON HIM TO PRODUCE THE MATERIAL EVIDENCE SUCH AS NAME OF THE AGENT , WHO ARRANGED THE FINANCE, ADDRE S S AND CONFIRMATION LETTER, THEREFORE WE FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A). THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 7 . GROUND NO. 4 RELATES TO ADDITION OF RS. 18,44,500/ - . IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTED THAT ASSESSEE IS HAVING SAVINGS BANK ACCOUNT WITH CANARA BANK BEARING NO.3188101002311 . THERE WERE CASH DEPOSITS OF RS. 18,44,500/ - IN THIS ACCOUNT . THESE TRANSACTION S WERE NOT REFLECTED IN THE BOOKS OF ACCOUNT, THEREFORE ASSESSING OFFICER HAS ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF DEPOSITS . IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT HE HAS TAKEN A LOAN OF 4 ITA NO. 62 3 /VIZ/2019 ( PINNINTY RAMESH ) RS.2,99,000/ - EACH FROM SRI P.T. NAIDU, SRI P. RAMANNA, SRI T.RAMINAIDU, SRI T. SURADAMMA, SMT. V. LAKSHMI AND SRI V.VENKATA NAIDU . THE ASSESSEE ALSO FILED CONFIRMATION LETTERS FROM THESE PARTIES, HOWEVER, THE ASSESSING OFFICER NOT BELIEVED THE SAME AND ADDITION WAS MADE. 8 . ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE HAS SUBMIT TED THAT THE PARTIES FROM WHOM HE RECEIVED THE PAYMENT S HAVE OBTAINED LOAN FROM CANARA BANK, THE SAME IS GIVEN TO HIM AND ALL THE DETAILS WERE FILED . THE LD. CIT(A) AFTER CALLING THE REMAND REPORT HAS OBSERVED THAT ASSESSEE HAS EXPLAINED THAT CASH DEPOSITS WERE MADE OUT OF THE UNSECURED LOANS RECEIVED FROM SIX PERSONS . ALL THESE SIX PERSONS WERE SANCTIONED GOLD LOAN OF RS.3.00 LAKH EACH BY CANARA BANK ON 26/12/2012 AND THE SAME WAS WITHDRAWN ON THE SAME DATE. HAD THE ASSESSEES CLAIM IS CORRECT, ALL THE CREDITORS WOULD HAVE TRANSFERRED THE FUNDS TO THE ASSESSEE DIRECTLY FROM THE BANK . TH E RE IS NO NEED TO WITHDRAW THEM IN CASH AND LEND THE SAME TO THE ASSESSEE. THE ASSESSEE AND ALL THE CREDIT OR S HAVE BANK ACCOUNTS IN THE SAME BRANCH . FUNDS WOULD HAVE BEEN TRANSFERRED EASILY TO THE ASSESSEES ACCOUNT . IT WAS ALSO OBSERVED BY THE LD. CIT(A) THAT ASSESSEE HAS NOT PAID ANY INTEREST TO THESE CREDITORS , THEREFORE LD. CIT(A) WAS OF THE OPINION THAT A SSESSEE HAS TAKEN SHELTER OF GOLD LOAN 5 ITA NO. 62 3 /VIZ/2019 ( PINNINTY RAMESH ) SANCTIONED TO THESE SIX PERSONS TO EXPLAIN THE SOURCE OF DEPOSITS MADE IN HIS BANK ACCOUNT IS ONLY AFTERTHOUGH T AND CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 9 . WE HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL AS LD.CIT(A)S ORDER AND CONFIRMATION LETTERS GIVEN BY THE PARTIES. IT IS AN ADMITTED FACT THAT SIX CREDITORS NAMELY SRI P.T. NAIDU, SRI P.RAMANNA, SRI T. RAMINAIDU, SRI T. SURADAMMA, SMT. V. LAKSHMI AND SRI V. VENKATA NAIDU HAVE OBTAINED LOANS FROM CANARA BANK , ALL THE DETAILS ARE FILED BEFORE THE ASSESSING OFFICER AS WELL AS LD.CIT(A). FROM THE ABOVE, IDENTIFICATION OF THE PARTIES IS PROVED AND CAPACITY OF THE PARTIES IS ALSO PROVED . SO FAR AS GENUINENESS OF THE TRANSACTION DOUBTED BY THE LD. CIT(A) IS CONCERNED, T HE LD.CIT(A) HAS ACCEPTED THAT THESE PERSONS WERE SANCTIONED GOLD LOAN ON 26/12/2012 , HOWEVER, SHE EXPRESSED A DOUBT THAT WHEN THE ASSESSEE AS WELL AS LOAN CREDITORS HAVING ACCOUNTS IN THE SAME B RANCH WHY THESE PEOPLE WITHDREW THE AM OUNT AND GIVEN TO THE ASSESSEE. IN OUR OPINION, IT IS A FACT THAT THEY HAVE OBTAINED A LOAN AND GIVEN TO THE ASSESSEE , THE QUESTION WHY IT HAS NOT BEEN TRANSFE R RED FROM ACCOUNT TO ACCOUNT , IT IS BETWEEN THE PARTIES THAT HOW THE TRANSACTION HAS TO BE CARRIED OUT , THEREFORE GENUINENESS OF THE TRANSACTION CANNOT BE DOUBTED . ANOTHER DOUBT EXPRESSED BY THE LD. CIT(A) THAT ASSESSEE IS NOT PAYING INTEREST, IT IS AN 6 ITA NO. 62 3 /VIZ/2019 ( PINNINTY RAMESH ) UNDERSTANDING BETWEEN THE PARTIES WHEN ASSESSEE HAS TO PAY THE INTEREST, THEREFORE IN OUR OPINION THE ASSESSEE HAS DISCHARGED THE BURDEN CASTED UPON HIM TO PROVE THE TRANSACTION IS GENUINE TRANSACTION. THE ASSESSING OFFICER AS WELL AS LD. CIT(A) SIMPLY DOUBTED THE TRANSACTION AND ADDITION IS M ADE, IN OUR OPIN I ON, ADDITION CANNOT SURVIVE . THEREFORE, WE REVERSE THE ORDER PASSED BY THE LD. CIT(A) AND ADDITION IS DELETED. THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED . 10 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON TH IS 1 0 T H DAY OF JUNE , 2020 . S D / - S D / - (D.S. SUNDER SINGH) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 0 T H JUNE , 20 20 . VR/ - COPY TO: 1. THE ASSESSEE - PINNINTY RAMESH, PROP. RAMESH NAIDU JEWELLERS, NTR SHOPPING COMPLEX, MAIN ROAD, RAJA, SRIKAKULAM DISTRICT. 2. THE REVENUE ITO, WARD - 3, SRIKAKULAM. 3. THE PR. CIT - 2 , VISAKHAPATNAM. 4. THE CIT(A) - 2 , GUNTUR. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.