Katta Srinivasa Rao, Rajahmundry V. The ITO, Rajahmundry

ITA 84/VIZ/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6655 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 23-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T SATYANANDAM
• Keywords: Unexplained investment; Business income; Additional evidence; Corroborative evidences

Judgement Text

ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . ' , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NO.84/VIZAG/2017 ( / ASSESSMENT YEAR: 2011-12) KATTA SRINIVASA RAO RAJAHMUNDRY ITO, WARD - 3, RAJAHMUNDRY [PAN NO. BQTPK5422J ] ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI C. SUBRAHMANYAM, AR / RESPONDENT BY : SHRI T. SATYANANDAM, DR / DATE OF HEARING : 20.09.2017 / DATE OF PRONOUNCEMENT : 27.09.2017 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), {CIT(A)}, RAJ AHMUNDRY DATED 1.12.2016 FOR THE ASSESSMENT YEAR 2011-12. 2. GROUND NO1.0 & 1.7 ARE GENERAL IN NATURE, WHICH DO NOT REQUIRE ANY SPECIFIC ADJUDICATION. ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 2 3. GROUND NO.1.6 IS RELATED TO FURNISHING ADDITIONA L EVIDENCE FILED UNDER RULE 46A OF THE INCOME TAX ACT, 1961 (HEREINA FTER CALLED AS 'THE ACT'). THE LD. A.R. DID NOT MAKE ANY ARGUMENT ON T HIS GROUND, THEREFORE, THIS GROUND IS DISMISSED. 4. GROUND NO.1.1 & 1.2 ARE RELATED TO THE ESTIMATIO N OF INCOME AT 10% OF THE PURCHASE PRICE AS AGAINST THE INCOME ADM ITTED BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS. THE ASSESSEE I S CARRYING ON BUSINESS OF INDIAN MADE FOREIGN LIQUOR (IMFL), HAD FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF 7,29,670/-. THE C ASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND THE A.O., DID NOT ACC EPT THE INCOME DECLARED BY THE ASSESSEE AND ESTIMATED THE PROFIT F ROM THE BUSINESS AT 20% OF THE STOCK PUT TO SALE AND ACCORDINGLY COMPUT ED THE BUSINESS INCOME FROM IMFL AT RS.34,64,874/-. ON APPEAL, THE CIT(A) HAS SCALED DOWN THE PERCENTAGE OF PROFIT FROM 20% TO 10% AND D IRECTED THE A.O. TO RE-COMPUTE THE INCOME AT 10% OF PURCHASE PRICE. 5. ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. AT THE TIME OF HEARING, THE LD. COUN SEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEA L IS SQUARELY COVERED IN THE CASE OF SRI VYSYARAJU SATYANARAYANA RAJU, SR IKAKULAM DIST. IN ITA NO.2/VIZAG/2016, WHICH IS REPRODUCED AS UNDER: ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 3 3. ON BEING AGGRIEVED, ASSESSEE CARRIED MATTER IN A PPEAL BEFORE THE TRIBUNAL. AT THE TIME OF HEARING, THE LD. COUNSEL 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 W HERE THE TRIBUNAL HAS SCALED DOWN THE ESTIMATION OF PROFIT FROM 10% TO 5% IN THE CASE OF TANGUDU JOGISETTY IN ITA NO.96/VIZAG/2016 BY ORDER DATED 2.6.2016. 4. ON THE OTHER HAND, THE LD. D.R. STRONGLY SUPPORT ED THE ORDER PASSED BY THE AUTHORITIES BELOW. 5. I HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERI ALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS ESTIMATION OF PROF IT IN RESPECT OF IMFL BUSINESS CARRIED BY THE ASSESSEE. IN THIS RESPECT, THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF TANGUDU JOGISETTY (SUPR A) HAS CONSIDERED THE PROFIT LEVEL IN THE LINE OF BUSINESS AND DECIDED TH AT 5% OF PURCHASE PRICE IS REASONABLE PROFIT MARGIN IN THE LINE OF IMFL BUSI NESS 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 PARTIES, PERUSED THE MATE RIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES 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 AND VOUCHERS IN SUPPORT OF PURCHASES AND SALES. TH E A.O. FURTHER OBSERVED THAT THE ASSESSEE HAS FAILED TO MAINTAIN S TOCK REGISTERS AND BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE ARE NO T SUSCEPTIBLE FOR VERIFICATION, THEREFORE REJECTED THE BOOKS OF ACCOU NTS AND ESTIMATED NET PROFIT OF 20% BY RELYING UPON THE DECISION OF HONB LE A.P. HIGH COURT. IT IS THE CONTENTION OF THE ASSESSEE THAT THE NET PROF IT ESTIMATED BY THE A.O. IS QUITE HIGH WHEN COMPARED TO THE NATURE OF B USINESS CARRIED ON BY THE ASSESSEE. IT 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 ASS ESSEE IS INTO THE BUSINESS OF TRADING IN ARRACK, WHEREAS IT IS IN THE BUSINESS OF DEALING IN IMFL. THE ASSESSEE FURTHER CONTENDED THAT IMFL TRA DE WAS CONTROLLED BY THE STATE GOVERNMENT THROUGH A.P. STATE BEVERAGE S CORPORATION LTD. AND THE PRICES OF THE PRODUCTS ARE FIXED BY THE STA TE GOVERNMENT. THE ASSESSEE BEING A LICENSE HOLDER 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 RELYING UPON THE DE CISION OF A.P. HIGH COURT 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 C OURT HAS CONSIDERED THE CASE OF AN ARRACK DEALER, WHEREAS, THE ASSESSEE IS INTO THE BUSINESS OF DEALING IN IMFL. THEREFORE, WE ARE OF THE VIEW T HAT 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 ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 4 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 C ASE AND FINDS THAT THE COORDINATE BENCH OF THIS TRIBUNAL, UNDER SIMILAR CI RCUMSTANCES HELD THAT ESTIMATION OF 5% NET PROFIT ON PURCHASES IS REASONA BLE. THE RELEVANT PORTION OF THE ORDER IS REPRODUCED HEREUNDER: 3. WE HAVE HEARD THE PARTIES, PERUSED THE ORDERS O F THE REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON R ECORD. IT IS THE CONTENTION OF THE LD. A.R. THAT THE ESTIMATION OF P ROFIT AT 16% IS HIGH AND EXCESSIVE CONSIDERING THE NORMAL RATE OF P ROFIT IN THIS LINE OF BUSINESS. WHEREAS, THE LD. D.R. SUPPORTED THE O RDER OF THE CIT(A). HAVING CONSIDERED THE SUBMISSIONS OF THE A SSESSEE, WE ARE OF THE VIEW THAT THE ISSUE IS NO MORE RES INTEG RA 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 A ND OTHERS DATED 18.05.2012 AS WELL AS A NUMBER OF OTHER CASES HAVE HELD THAT PROFIT IN CASE OF BUSINESS IN INDIAN MADE FOREI GN LIQUOR HAS TO BE ESTIMATED AT 5% OF THE PURCHASES MADE BY THE ASS ESSEE. THEREFORE, FOLLOWING THE DECISION OF THE ITAT HYDER ABAD BENCH, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AS SESSING OFFICER TO ESTIMATE THE PROFIT FROM THE WINE BUSINESS OF THE A SSESSEE BY APPLYING THE RATE OF 5% OF THE PURCHASES MADE NET O F ALL OTHER DEDUCTIONS. THE ASSESSING OFFICER SHOULD ALSO BEAR IN MIND THAT IN NO CASE THE INCOME DETERMINED SHOULD BE BELOW THE I NCOME RETURNED. 9. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THIS CASE AND ALSO RESPECTFULLY FOLLOWING THE RATIOS OF COORDINATE BEN CH, WE ARE OF THE VIEW THAT THE NET PROFIT ESTIMATED BY THE A.O. BY RELYIN G UPON THE DECISION OF HONBLE A.P. HIGH COURT (SUPRA), WHICH WAS RENDERED UNDER DIFFERENT FACTS IS QUITE HIGH. ON THE OTHER HAND, THE ASSESS EE RELIED UPON THE DECISION OF COORDINATE BENCH AND THE COORDINATE BEN CH UNDER SIMILAR CIRCUMSTANCES ESTIMATED THE NET PROFIT OF 5% ON TOT AL PURCHASES NET OF ALL DEDUCTIONS. NO CONTRARY DECISION IS 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 DEDUCTIO NS. ORDERED ACCORDINGLY. 6. IN VIEW OF THE ABOVE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL, WE DIRECT THE A.O. TO RE-COMPUTE THE INCO ME OF THE ASSESSEE ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 5 AT 5% OF PURCHASE PRICE. ACCORDINGLY, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED. 7. GROUND NOS.1.3 TO 1.5 ARE RELATED TO THE ADDITIO N WITH REGARD TO UNEXPLAINED INVESTMENT OF ` 2,82,767/- AND UNSECURED LOANS OF ` 18,25,000/-. DURING THE ASSESSMENT PROCEEDINGS, TH E A.O. FOUND THAT ASSESSEE HAS MADE INVESTMENT OF ` 2,82,767/- TO MEET THE INITIAL PAYMENT OF LICENSE FEE OF ` 28,92,767/-. THE ASSESSEE HAS BEEN REQUESTED TO EXPLAIN THE SOURCE OF THE INVESTMENT A ND THE ASSESSEE COULD NOT FURNISH ANY EVIDENCE TO EXPLAIN THE SOURC E OF INVESTMENT. THEREFORE, THE A.O. MADE THE ADDITION OF ` 2,82,767/- TO THE RETUNED INCOME. AGGRIEVED BY THE ORDER OF THE A.O., THE A SSESSEE WENT ON APPEAL BEFORE THE CIT(A). THE LD. CIT(A) CONFIRMED THE AD DITION MADE BY THE A.O. THE LD. CIT(A) OBSERVED THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME FOR THE FIRST TIME AND MADE THE PAYMENT OF L ICENSE FEE OF ` 28,92,767/- FOR WHICH THE CAPITAL INTRODUCTION WAS ` 19,60,000/- AND THE BALANCE AMOUNT OF ` 2,82,767/-FOR WHICH THE SOURCE REQUIRED TO BE EXPLAINED. THE A.O. MADE THE ADDITION OF ` 19,60,000/- AS UNEXPLAINED CAPITAL AND ` 2,82,767/- AS UNEXPLAINED INVESTMENT. BEFORE THE CIT(A) ALSO, THE ASSESSEE COULD NOT FURNISH ANY EVIDENCE W ITH REGARD TO SOURCE ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 6 OF THE INVESTMENT OF ` 2,82,767/-. THE SOLE ARGUMENT OF THE ASSESSEE WAS THAT ONCE THE INCOME IS ESTIMATED BY REJECTING THE BOOKS OF ACCOUNTS, NO SEPARATE ADDITION REQUIRED TO BE MADE. IN THIS CASE, THE ASSESSEE HAS MADE THE INVESTMENT IN THE BEGINNING OF THE YEAR AND IT HAS NO CONNECTION WITH THE BUSINESS CARRIED ON BY T HE ASSESSEE. THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TO SHOW THAT THE AMOUNT OF ` 2,82,767/- WAS GENERATED OUT OF THE BUSINESS. BEFO RE THE TRIBUNAL ALSO, THE ASSESSEE FAILED TO FURNISH ANY EVIDENCE. THERE FORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND TH E SAME IS UPHELD. THE ASSESSEES APPEAL ON THIS ISSUE IN THE GROUNDS OF A PPEAL IS DISMISSED. 8. THE NEXT ISSUE OF ADDITION IN GROUND NOS.1.3 TO 1.5 IS RELATED TO THE ADDITION CONFIRMED BY THE LD. CIT(A) TOWARDS UN SECURED LOANS. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OF FICER FOUND THAT THE ASSESSEE HAS MADE THE PAYMENT OF RS. 28,92,767/- AS LICENSE FEE. OUT OF WHICH THE UNSECURED LOANS CLAIMED TO BE RS.19,60 ,000/- AS THE SOURCE AND THE SAME WAS CREDITED TO THE CAPITAL ACC OUNT. THE ASSESSEE DID NOT FURNISH ANY EVIDENCE BEFORE THE AO FOR THE UNSECURED LOANS. HE DID NOT SUBMIT THE DETAILS, HENCE THE AO MADE THE A DDITION OF RS.19,60,000/- TO THE RETURNED INCOME. ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 7 AGGRIEVED BY THE ORDER OF THE A.O., THE A SSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND FILED ADDITIONAL EVIDENCE IN THE FORM OF AFFIDAVIT WITH REGARD TO UNSECURED LOANS. THE LD. CIT(A) CAL LED FOR THE REMAND REPORT FROM THE A.O. AND ENQUIRED INTO THE GENUINEN ESS AND CREDITWORTHINESS OF THE UNSECURED LOANS. THE A.O. SUBMITTED THE REMAND REPORT. THE LD. CIT(A) AFTER CONSIDERING TH E REMAND REPORT EXAMINED THE EACH CREDIT AND GIVEN A FINDING THAT T HE CREDIT TRANSACTIONS WERE NOT GENUINE EXCEPT IN THE CASE OF VELLIGOTLA R AMA SATYANARAYANA. THE ADDITION MADE IN THE REMAINING CREDITS WERE CON FIRMED BY THE LD. CIT(A) TOTALING TO ` 18,25,000/- AGAINST WHICH THE ASSESSEE IS IN APPEA L BEFORE THIS TRIBUNAL. 9. APPEARING FOR THE ASSESSEE, THE LD. A.R. ARGUED THAT THE LD. CIT(A) HAS NOT TAKEN NOTE OF THE ADDITIONAL EVIDENC E FILED U/S RULE 46A OF THE ACT AND THE REMAND REPORT OF THE A.O. FURTH ER, THE LD. A.R. ARGUED THAT ONCE THE INCOME IS ESTIMATED, NO SEPARA TE ADDITION TOWARDS UNEXPLAINED INVESTMENTS REQUIRED TO BE MADE. 10. PER CONTRA THE LD. D.R. ARGUED THAT THOUGH THE A.O. ACCEPTED CERTAIN CREDITS, BUT THE A.O. HAS NOT PROPERLY VERI FIED THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . THE LD. CIT(A) HAS EXAMINED EACH CREDIT IN DETAIL AND GIVEN FINDIN G THAT THE ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 8 TRANSACTIONS WERE NOT GENUINE. FURTHER, IT WAS ALS O FOUND THAT THE ADVANCES WERE GIVEN BY WAY OF DDS FROM THE ALLEGED CREDITORS, BUT THERE WAS NO EVIDENCE TO SHOW THAT THE CREDITORS HA VE TAKEN THE DDS. IT WAS ALSO OBSERVED BY THE LD. CIT(A) THAT THERE W AS NO EVIDENCE TO SHOW THAT THE DDS WERE TAKEN OUT OF WITHDRAWALS. T HEREFORE, THE LD. D.R. ARGUED THAT THE LD. CIT(A) HAS RIGHTLY CONFIRM ED THE ADDITIONS AND THERE IS NO INTERFERENCE IS CALLED FOR. 11. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. IN THIS CASE THE IMPUGNED CREDITS WERE ` 19,60,000/-, WHICH WAS INTRODUCED BY THE ASSESSEE IN THE BEGINNING OF THE YEAR AND HENCE IT CANNOT BE HELD THAT THE CREDITS WERE MADE OUT OF THE BUSINESS INCO ME. THE LD. A.R. ALSO ARGUED THAT THE SOURCES WERE FROM UNSECURED LO ANS, THEREFORE, THE ARGUMENT OF THE ASSESSEE IS APPARENTLY CONTRADICTOR Y WITH REGARD TO THE SOURCE OF EXPLANATION. DURING THE ASSESSMENT YEAR, THE ASSESSEE CLAIMS TO HAVE SOURCED THE UNSECURED LOANS FROM THE FOLLOW ING PERSONS: S.NO. NAME OF THE CREDITOR AMOUNT 1 GEDDADA KOTAYYA 1,35,000/- 2 JOGI PEDDIRAJU 1,35,000/- 3 KATTA UMA MAHESWARA RAO 1,35,000/- 4 KUDUPUDI JAGAPATHI RAO 1,35,000/- 5 LANKAPALLI SATYANARAYANA 1,35,000/- 6 MANYA SRINU 1,35,000/- 7 MYAM RAMBABU 1,35,000/- 8 MYNAM RATTAIH 1,35,000/- 9 PITANI NAGARAJU 1,35,000/- 10 PITANI SAIBABU 1,35,000/- ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 9 11 PULLURI PRASAD 1,35,000/- 12 VELIGATLA MANIKYALA RAO 1,35,000/- 13 VELIGATLA NARASIMHA SWAMY 1,35,000/- 14 VELIGOTLA RAMA SATYANARAYANA 1,35,000/- 15 MYNAM SRINU 45,000/- 16 P. KISHORE 15,000/- 17 R. PHANI SHANKAR 10,000/- 12. OUT OF THE ABOVE LOANS, THE LD. CIT(A) ALLOWED THE CREDIT IN RESPECT OF VELIGOTLA RAMA SATYANARAYANA AMOUNTING T O ` 1,35,000/- AND THE REMAINING AMOUNT OF ` 18,25,000/- WAS CONFIRMED BY THE LD. CIT(A). THEREFORE, THE ASSESSEE FILED THE APPEAL C HALLENGING THE ADDITION CONFIRMED BY THE LD. CIT(A). THE LD. CIT( A) IN HIS ORDER EXAMINED EACH CREDIT IN DETAIL AND GIVEN FINDING TH AT THE CREDITS ARE NOT GENUINE. FOR READY REFERENCE, WE EXTRACT RELEVANT PARAGRAPH OF THE LD. CIT(A) ORDER FROM PARA 7.1 TO 7.19, WHICH READS AS UNDER: 7.1 CREDIT IN THE NAME OF GEDDADA KOTAYVA: THE ASSESSE HAD FILED BEFORE THE AO CONFIRMATION LE TTER FROM ONE GEDDADA KONDAYYA, S/0. PULLAYYA ON 10.022014 CONFIRMING ADV ANCE OF RS.1,35,000/- TO THE ASSESSEE. SUBSEQUENTLY, AN AFF IDAVIT WAS FILED BEFORE THE 01(A) CONFIRMING THE SAID ADVANCE. IT IS NOTED THAT THE AFFIDAVIT WAS SIGNED BY ONE GEDDADA PEDA KONDAYYA, 5/0. PULLAYYA. IT IS FURTHER NOTED THAT THE SIGNATURE IN THE CONFIRMATION LETTER AND T HE SIGNATURE IN THE AFFIDAVIT THOUGH IN TELUGU ARE TOTALLY DIFFERENT RA ISING DOUBTS AS TO THE IDENTITY OF THE CREDITOR AND GENUINENESS OF THE TRA NSACTION. THE ASSESSEE ALSO FAILED TO PRODUCE THE ALLEGED CREDITOR BEFORE THE AO FOR EXAMINATION. FURTHER, THE ASSESSEE HAS NOT FURNISHE D ANY EVIDENCE REGARDING THE CREDITWORTHINESS OF THIS CREDITOR. AS PER THE HOUSEHOLD CARD, THE ANNUAL INCOME WAS RS.30,000/- INDICATING THAT THE ALLEGED CREDITOR LACK CAPACITY TO ADVANCE THE IMPUGNED AMOU NT. HENCE THE IMPUGNED ADDITION IN REGARD TO THIS CREDITOR IS UPH ELD. ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 10 7.2 CREDIT IN THE NAME OF JOGI PEDDIRAJU: THE ASSESSE HAD FILED BEFORE THE AO CONFIRMATION LE TTER FROM ONE J. PEDDIRAJU, S/O. SUBBARAO ON 27.02.2014 CONFIRMING A DVANCE OF RS.1,35,000/- TO THE ASSESSEE. SUBSEQUENTLY, DURING THE APPEAL HEARING AN AFFIDAVIT FROM ONE JOGI PEDDIRAJU WAS FILED CONF IRMING THE SAID ADVANCE. THE ASSESSEE FAILED TO PRODUCE THE CREDITO R FOR EXAMINATION. IT IS NOTED THAT THE SIGNATURE IN THE CONFIRMATION LET TER AND THE SIGNATURE IN THE AFFIDAVIT WERE TOTALLY DIFFERENT. THIS IS ALSO DIFFERENT FROM THE SIGNATURE APPENDED IN THE HOUSEHOLD CARD ENCLOSED W ITH THE AFFIDAVIT. THUS THE IDENTITY OF THIS ALLEGED CREDITOR WAS NOT PROVED. THE ANNUAL INCOME OF THE ALLEGED CREDITOR WAS RS.20,000/- PER ANNUM AS PER THE HOUSEHOLD CARD ENCLOSED, INDICATING THAT THE ALLEGE D CREDITOR LACKS CAPACITY TO ADVANCE THE IMPUGNED AMOUNT. IT IS ALSO NOTED THAT AN AFFIDAVIT WAS FILED FROM JOGI PEDDIRAJU IN THE CASE OF NELLI TRIMURTHULU, ANOTHER LIQUOR DEALER CONFIRMING ADVANCE OF RS.1.35 LAKH. IT IS IMPROBABLE THAT THIS PARTY WITHOUT ANY REGULAR SOUR CE OF INCOME COULD ADVANCE SUCH HUGE AMOUNTS, INDICATING THE HE WAS MERELY A NAME LENDER WITHOUT ANY SOURCE. IN THE CIRCUMSTANCES, IT IS HELD THAT THE ASSESSEE FAILED TO PROVE THE IDENTITY AND CREDITWOR THINESS OF THIS TRANSACTION. HENCE THE IMPUGNED ADDITION IN REGARD TO THIS CREDITOR IS CONFIRMED. 7.3 CREDIT IN THE NAME OF KATTA UMA MAHESWARARAO: THE ASSESSE HAD FILED BEFORE THE AO CONFIRMATION LE TTER FROM ONE KATTA UMA MAHESWARARAO, SB. DHARMARAJU ON 25.02.20 14 CONFIRMING ADVANCE OF RS.1,35,000/- TO THE ASSESSEE. THE SAID CONFIRMA TION LETTER WAS SIGNED IN ENGLISH. SUBSEQUENTLY, DURING THE APPEAL HEARING AN AFFIDAVIT FROM ONE KATTA UMA MAHESWARARAO WAS FILED CONFIRMIN G THE SAID ADVANCE. IT IS NOTED THAT THE CONFIRMATION LETTER W AS SIGNED IN ENGLISH WHEREAS THE AFFIDAVIT WAS SIGNED IN TELUGU. THE ASS ESSEE PRODUCED ONE KATTA UMA MAHESWARA RAO. D.NO.2-199, KADALI VILLAGE BEFORE THE AO FOR EXAMINATION ON 10.03.2016 AND WHO DEPOSED THAT HE WAS DOING CARPENTRY WORK AND THAT HIS ANNUAL INCOME WAS RS.13 ,000/PER MONTH FROM CARPENTRY AND THAT HIS ANNUAL INCOME FROM AGRI CULTURAL ACTIVITY WAS RS.50,000/- PER ANNUM, AND THAT OUT OF SUCH INCOME ADVANCE WAS MADE TO THE ASSESSEE. IT IS NOTED THAT THE SIGNATUR E IN THE AFFIDAVIT AND THE SIGNATURE IN THE SWORN DEPOSITION ARE DIFFERENT . FURTHER, IT IS ALSO SEEN THAT THE SIGNATURE IN THE HOUSEHOLD CARD IS DI FFERENT FROM THE SIGNATURE IN THE SWORN DEPOSITION AND AFFIDAVIT RAI SING DOUBT AS TO THE IDENTITY OF THE ALLEGED CREDITOR AND GENUINENESS OF THE TRANSACTION. AS PER THE HOUSEHOLD CARD, THE ANNUAL INCOME WAS STATE D TO BE ONLY RS.18,000/-. IN VIEW OF THESE DISCREPANCIES, THE ID ENTITY, GENUINENESS AND CREDITWORTHINESS OF THIS CREDIT TRANSACTION ARE IN DOUBT. HENCE THE IMPUGNED ADDITION IN REGARD TO THIS CREDIT IS CONFI RMED. ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 11 7.4 CREDIT IN THE NAME OF KUDUPUDI JAGAPATHI RAO: THE ASSESSE HAD FILED BEFORE THE AO CONFIRMATION LE TTER FROM ONE K. JAGAPATHIRAO, SB. NARAYANA SWAMY ON 01.03.2014 CONF IRMING ADVANCE OF RS.1,35,000/- TO THE ASSESSEE. THE SAID CONFIRMA TION LETTER WAS SIGNED IN ENGLISH. SUBSEQUENTLY, DURING THE APPEAL HEARING AN AFFIDAVIT FROM ONE KUDUPUDI JAGAPATHI RAO WAS FILED CONFIRMIN G THE SAID ADVANCE TO THE ASSESSEE. THE SAID AFFIDAVIT WAS SIGNED IN T ELUGU. THE DIFFERENCE IN THE SIGNATURE IN THE CONFIRMATION LETTER AND THE AFFIDAVIT CLEARLY SHOW THAT THE PERSONS WHO HAVE SIGNED THESE DOCUMENS ARE DIFFERENT RAISING DOUBTS AS TO THE GENUINENESS OF THE TRANSACTION AND IDENTITY OF THE CREDITOR. THE ASSESSEE PRODUCED ONE K. JAGAPATHI RA O BEFORE THE AO, WHO DEPOSED THAT HE WAS HAVING AGRICULTURAL LAND OF AN EXTENT OF 1.5 ACRES AND HAS TAKEN 6 ACRES ON LEASE AND THAT THE A GRICULTURAL INCOME PER YEAR WAS RS. 1 LAKH, AND THAT THE AMOUNT WAS GI VEN OUT OF SUCH INCOME. THE SIGNATURE IN THE AFFIDAVIT AND SWORN DE POSITION ARE ALSO DIFFERENT. THUS THE IDENTITY OF THE ALLEGED CREDITO R, THE GENUINENESS OF THIS TRANSACTION REMAIN DOUBTFUL. HENCE THE IMPUGNED IN REGARD TO THIS CREDIT IS UPHELD. 7.5 CREDIT IN THE NAME OF LANKAPALLI SATYANARAYANA: THE ASSESSE HAD FILED BEFORE THE AO CONFIRMATION LE TTER FROM ONE LANKAPALLI SATYANARAYANA, SB. NARAYANAMURTHY ON 09.02.2014 CONFIRMING ADVANCE OF RS.1,35,000/- TO THE ASSESSEE. THE SAID CONFIRMATION LETTER WAS SIGNED IN ENGLISH. SUBSEQUENTLY, DURING THE APP EAL HEARING AN AFFIDAVIT FROM ONE LANKAPALLI SATYANARAYANA WAS FIL ED CONFIRMING THE SAID ADVANCE. THE ASSESSEE PRODUCED ONE SATYANARAYANA BE FORE THE AO FOR EXAMINATION, WHO DEPOSED THAT HE WAS HAVING INCOME FROM REAL ESTATE COMMISSION OF RS.1,20,000/- TO RS.1,50,000/- EVERY YEAR AND THAT OUT OF SUCH INCOME, THE SAID ADVANCE WAS MADE. IT IS NOTED THAT THE SIGNATURE IN THE CONFIRMATION LETTER AND THE SIGNATURE IN THE AFFIDAVIT ARE TOTALLY DIFFERENT RAISING DOUBT AS TO THE GENUINENESS OF TH E TRANSACTION AND IDENTITY OF THE CREDITOR. AS PER THE HOUSEHOLD CERT IFICATE ENCLOSED, THE ANNUAL INCOME WAS ONLY RS.19,000/- AND THUS THE ALL EGED CREDITOR WOULD NOT HAVE SUFFICIENT CAPACITY TO MAKE THE IMPUGNED A DVANCE TO THE ASSESSEE. AS THE IDENTITY, GENUINENESS OF THE CRED IT TRANSACTION AND CREDITWORTHINESS OF THE ALLEGED CREDITOR IS IN DOUB T, THE IMPUGNED ADDITION IN REGARD TO THIS CREDIT IS CONFIRMED. 7.6 CREDIT IN THE NAME OF MANYA SRINU: THE ASSESSE HAD FILED BEFORE THE AO CONFIRMATION LE TTER FROM ONE MANYA SRINIVASARAO, 10. VENKATARATNAM ON 11.02.2014 CONFI RMING ADVANCE OF ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 12 RS.1,35,000/- TO THE ;SESSEE. SUBSEQUENTLY, DURING THE APPEAL HEARING THE ASSESSEE FILED AN AFFIDAVIT FROM E MAINAM SRINIVASA RAO, S/O. VENKATARATNAM CONFIRMING ADVANCE TO THE ASSESSEE OF 3.45,000/-. I T IS NOTED THAT THE SIGNATURE IN THE CONFIRMATION LETTER WAS IN ENGLISH WHEREAS THE SIGNATURE IN THE AFFIDAVIT WAS IN TELUGU INDICATING THAT THE PAR TIES WHO WE SIGNED THESE DOCUMENTS WERE DIFFERENT. THE ASSESSEE PRODUCED ONE MAINAM SRINIVASA RAO BEFORE THE AO FOR EXAMINATION. THE SWORN DEPOSITION WAS SIGNED IN TELUGU, BUT THE SIGNATURE WAS DIFFERENT FROM THE ONE IN AFF IDAVIT INDICATING THAT THE PERSON WHO SIGNED THE AFFIDAVIT DID NOT SIGN THE SW ORN DEPOSITION. THUS THE IDENTITY OF THIS ALLEGED CREDITOR AND GENUINENESS O F TRANSACTION IS IN DOUBT. IT IS ALSO NOTED THAT IN THE AFFIDAVIT, THE AMOUNT OF ADVANCE CONFIRMED WAS RS.45,000/-, AND IT WAS SAID TO BE GIVEN BY WAY OF DD NOS.785283 AND 784156, A COPY OF THE DD NO.784156 WAS ENCLOSED, WH ICH WAS FOUND TO BE FOR AN AMOUNT OF RS.45,000/-. THUS, THERE IS DISCRE PANCY AS TO THE AMOUNT SAID TO BE ADVANCED. ALL THESE CLEARLY INDICATE THA T THE CREDIT TRANSACTION WAS ONLY A MAKE BELIEVE ARRANGEMENT. IN THE CIRCUMSTAN CES, THE IMPUGNED ADDITION IN REGARD TO THIS CREDIT IS CONFIRMED. 7.7 CREDIT IN THE NAME OF MAINAM RAMBABU: THE ASSESSE HAD FILED BEFORE THE AO CONFIRMATION LE TTER FROM ONE MAINAM RAMBABU, S/O. SATYANARAYANA ON 09.02.2014 CONFIRMIN G ADVANCE OF RS.1,35,000/- TO THE ASSESSEE. THE ASSESSEE DID NOT FILE ANY AFFIDAVIT IN RESPECT OF THIS CREDITOR AND ALSO DID NOT PRODUCE T HIS CREDITOR FOR EXAMINATION. FURTHER, NO INFORMATION WAS FILED AS T O THE CREDITWORTHINESS OF THIS CREDITOR. THUS THE IDENTITY AND CREDITWORTH INESS OF THE CREDITOR WAS NOT PROVED. IT IS ALSO NOTED THAT CONFIRMATION LETTERS FROM MYNAM RAMBABU BEARING SAME ADDRESS AND IDENTITY WERE ALSO FILED IN THE CASE OF OTHER LIQUOR DEALERS BALUSU PRASAD AND NELLI TRI MURTHULU CONFIRMING ADVANCE OF RS.1.35 LAKH EACH. IT IS IMPROBABLE THAT A PERSON WITHOUT ANY REGULAR INCOME SOURCE COULD ADVANCE HUGE AMOUNTS AN D THAT TOO WITHOUT INTEREST. THESE CLEARLY SHOW THAT THIS PERSON ACTED AS A MERE NAME LENDER WITHOUT ANY INCOME SOURCE, AND ALSO RAISE SE RIOUS DOUBTS AS TO THE GENUINENESS OF THE TRANSACTION. HENCE THE IMPUG NED ADDITION IN REGARD TO THIS CREDIT IS CONFIRMED. 7.8 CREDIT IN THE NAME OF MAINAM RATTAIAH: THE ASSESSE HAD FILED BEFORE THE P0 CONFIRMATION LE TTER FROM ONE MAINAM RATTAAH, SB. 5UBBARAO ON 21.02.2014 CONFIRMING LOAN OF RS.1,35,000/- TO THE ASSESSEE. THE ASSESSEE DID NOT FILE ANY AFFIDAV IT FROM THIS CREDITOR NOR COULD PRODUCE THIS CREDITOR FOR EXAMINATION. FURTHE R, NO INFORMATION WAS FILED AS TO THE CREDITWORTHINESS OF THIS CREDITOR. THUS THE IDENTITY AND THE CREDITWORTHINESS OF THE CREDITOR ARE NOT PROVED. HE NCE THE IMPUGNED ADDITION IN RESPECT OF THIS CREDIT IS CONFIRMED. IT IS PERTINENT TO NOTE THAT ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 13 CONFIRMATION LETTER WAS FILED FROM M. RATTAIAH, BUT AFFIDAVIT WAS LTD FROM ONE MYNAM VENKATARATNAM TO PROVE THE ALLEGED CREDIT IN THE NAME OF M. RATTAIAH. IT IS ALSO NOTED THAT AFFIDAVITS FROM MYNA M VENKATARATNAM WERE FILED IN THE CASE OF OTHER LIQUOR DEALERS NAMELY BA LUSU PRASAD, NELLI TRIMURTHULU CONFIRMING ADVANCE OF RS.1.35 LAKH EACH TO THEM. IN ALL THESE CASES M. RATTAIAH WAS SHOWN AS CREDITOR IN THE BALA NCE SHEET. IT IS IMPROBABLE THAT A PERSON WITHOUT ANY REGULAR INCOME COULD ADVANCE SUCH HUGE AMOUNT CLEARLY INDICATING THAT HE ACTED MERELY AS NAME LENDER WITHOUT ANY INCOME SOURCE. THIS ALSO RAISES SERIOUS DOUBTS AS TO THE GENUINENESS OF THESE TRANSACTIONS. AS THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THIS CREDIT TRANSACTION WAS NOT PROVED, THE IMPUGNED ADDITION IN REGARD TO THIS CREDIT IS CONFIRMED. 7.9 CREDIT IN THE NAME OF PITANI NAGARAJU: THE ASSESSE HAD FILED BEFORE THE AU CONFIRMATION LE TTER FROM ONE PITHANI NAGARAJU, S/O. KOTAIAH ON 10.02.2014 CONFIRMING ADV ANCE OF RS.1,35,000F- TO THE ASSESSEE. SUBSEQUENTLY, DURING THE APPEAL HE ARING AN AFFIDAVIT WAS FILED FROM ONE PITHANI NAGARA]U CONFIRMING ADVANCE OF SAID AMOUNT TO THE ASSESSEE IT IS NOTED THAT THE SIGNATURE IN THE CONFI RMATION LETTER AND THE SIGNATURE IN THE AFFIDAVIT WERE TOTALLY DIFFERENT I NDICATING THAT THE PERSON WHO SIGNED THE CONFIRMATION LETTER AND THE PERSON W HO SIGNED THE AFFIDAVIT ARE DIFFERENT RAISING DOUBTS AS TO THE IDENTITY OF CREDITOR AND GENUINENESS OF TRANSACTION. THE ASSESSEE PRODUCED ONE PITHANI R AJU FOR EXAMINATION BEFORE THE AO, WHO HAD DEPOSED THAT HE WAS GETTING INCOME FOR RS.1.5 LAKH FROM AGRICULTURAL ACTIVITY IN ONE ACRE OF LAND OWNED BY HIM AND 2 ACRES OF LAND TAKEN ON LEASE, AND THAT THE IMPUGNED ADVANCE WAS MADE OUT OF SUCH INCOME. NO SUPPORTING DOCUMENT WAS FURN ISHED IN RESPECT OF AGRICULTURAL INCOME. EVEN OTHERWISE, IT IS IMPROBAB LE THAT THE ALLEGED CREDITOR COULD ADVANCE THE IMPUGNED AMOUNT OUT OF S UCH MEAGER INCOME; THUS THE CREDITWORTHINESS OF THIS CREDITOR IS ALSO IN DOUBT. IN THE CIRCUMSTANCES, IT IS HELD THAT THE ASSESSEE FAILED TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THIS TRANSACTIO N. HENCE THE IMPUGNED ADDITION IN REGARD TO THIS CREDITOR IS CONFIRMED. 7.10 CREDIT IN THE NAME OF PITANI SAIBABU: THE ASSESSEE HAD FILED BEFORE THE AD FROM ONE P. SA IBABU CONFIRMING ADVANCE OF RS.1,35,000/- TO THE ASSESSEE. THE ASSES SEE DID NOT FILE ANY AFFIDAVIT, NOR COULD PRODUCE THE CREDITOR FOR EXAMI NATION BEFORE THE AO. FURTHER, NO INFORMATION WAS FURNISHED AS TO THE INC OME CAPACITY OF THE CREDITOR TO ADVANCE IMPUGNED AMOUNT. THUS THE IDENT ITY OF THE CREDITOR AND THE CREDITWORTHINESS OF THE CREDITOR WAS NOT PR OVED. HENCE THE IMPUGNED ADDITION IN REGARD TO THIS CREDIT IS CONFI RMED. ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 14 7.11 CREDIT IN THE NAME OF PULLURI PRASAD: THE ASSESSE HAD FILED BEFORE THE AD CONFIRMATION LE TTER FROM ONE PULLURI PRASAD, S/O RATTAIAH ON 02.03.2014 CONF IRMING ADVANCE OF RS.1,35,000/- TO THE ASSESSEE. THE SAID CONFIRMATION LETTER WAS SIGNED IN ENGLISH. SUBSEQUE NTLY, DURING THE APPEAL HEARING AN AFFIDAVIT WAS FILED FROM ONE PALLURI PRASAD CONFIRMING THE ADVANCE OF SAID AMOUNT. THE S AID AFFIDAVIT WAS SIGNED IN TELUGU INDICATING THE PERSO N WHO SIGNED THE CONFIRMATION LETTER AND THE PERSON WHO SIGNED T HE AFFIDAVIT ARE DIFFERENT. THE ASSESSEE COULD NOT PRODUCE THIS CREDITOR BEFORE THE AO FOR EXAMINATION. THUS, THE IDENTITY O F THE ALLEGED CREDITOR AND THE GENUINENESS OF THE TRANSACTION IS IN DOUBT. NO SUPPORTING EVIDENCE WAS FILED AS TO THE CREDITWORTH INESS OF THE CREDITOR. IT IS ALSO NOTED THAT AFFIDAVITS OF THE A BOVE ALLEGED CREDITOR PULLURI PRASAD WERE FILED IN THE CASE OF O THER LIQUOR DEALERS NAMELY BALUSU PRASAD, NELLI TRIMURTHULU CON FIRMING ADVANCE OF RS.1.35 LAKH EACH TO THEM. IT IS IMPROBA BLE THAT A PERSON WITHOUT ANY REGULAR INCOME COULD MAKE SUCH H UGE ADVANCES. THESE CLEARLY SHOW THAT HE ACTED MERELY A S NAME LENDER WITHOUT ANY INCOME THIS ALSO RAISES SERIOUS DOUBTS AS TO THE GENUINENESS OF THESE TRANSACTIONS. C./T)1US THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THIS CREDIT TRA NSACTION WAS NOT N4ROVED. HENCE THE IMPUGNED ADDITION IN REGARD TO THIS CREDIT IS CONFIRMED. 7.12 CREDIT IN THE NAME OF VELIGATLA MANIKYALA RAO: THE ASSESSE HAD FILED BEFORE THE AO CONFIRMATION LE TTER FROM ONE VELIGATLA MANIKYALARAO, SB. KRISHNARAO ON 08.02.2014 CONFIRMING ADVANCE OF RS.1,35,000/- TO THE ASSESSEE. SUBSEQUEN TLY, DURING THE APPEAL HEARING AN AFFIDAVIT WAS FILED FROM ONE VELI GATLA MANIKYALA RAO CONFIRMING THE SAID ADVANCE TO THE ASSESSEE. IT IS NOTED THAT THE SIGNATURE IN THE CONFIRMATION LETTER AND THE SIGNAT URE IN THE AFFIDAVIT ARE TOTALLY DIFFERENT RAISING DOUBT AS TO THE GENUI NENESS OF THE TRANSACTION. THE ASSESSEE PRODUCED ONE V. MANIKYALA RAO FOR EXAMINATION BEFORE THE AD, WHO DEPOSED THAT HE HAS INCOME FROM AGRICULTURAL ACTIVITY, RENTAL INCOME FROM TRACTOR A ND ALSO COMMISSION INCOME, AND THAT HIS TOTAL INCOME WAS RS.2,05,000/- PER ANNUM AND THAT OUT OF SUCH INCOME THE IMPUGNED ADVANCE WAS SA ID TO BE GIVEN TO THE ASSESSEE. THE ASSESSEE ENCLOSED COPY OF HOUSEHO LD CARD IN SUPPORT OF IDENTITY OF THIS CREDITOR; THE PERUSAL O F THE SAME SHOW THAT ANNUAL INCOME WAS RS.14,000/- AS DAILY WAGE EARNER. THIS CLEARLY INDICATE THAT THIS ALLEGED CREDITOR LACK CREDITWORTHINESS TO ADVANCE THE IMPUGNED AMOUNT. IT IS ALSO NOTED THAT AFFIDAVIT OF THIS CRE DITOR WAS FILED IN THE CASE OF ANOTHER LIQUOR DEALER NELLI TRIMURTHULU CONFIRMI NG ADVANCE OF RS.1.35 ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 15 LAKH TO HIM. IT IS IMPROBABLE THAT A PERSON WITHOUT ANY REGULAR INCOME COULD MAKE SUCH HUGE ADVANCES. THIS CLEARLY INDICAT E THAT HE ACTED MERELY AS NAME LENDER WITHOUT ANY INCOME SOURCE. THIS ALSO RAISES SERIOUS DOUBTS AS TO THE GENUINENESS OF THESE TRANSACTIONS. IN VIEW OF THE ABOVE DISCREPANCIES, AND AS THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THIS CREDIT TRANSACTION WAS NOT PROVED, THE IMPUGNE D ADDITION IN REGARD TO THIS CREDIT IS CONFIRMED. 7.13 CREDIT IN THE NAME OF VEHGOT!A NARASIMHA SWAM Y: THE ASSESSE HAD FILED BEFORE THE AO CONFIRMATION LE TTER FROM ONE VELIGOTLA NARASIMHA SWAMY, S/O. SURANNA ON 17.02.2014 CONFIRM ING ADVANCE OF RS.1,35,000/- TO THE ASSESSEE. SUBSEQUENTLY, DURING THE APPEAL HEARING AN AFFIDAVIT WAS FILED FROM ONE VELIGATLA NARASIMHA SW AMY CONFIRMING ADVANCE TO THE ASSESSEE.. HOWEVER, IT IS NOTED THAT THE SIG NATURE IN THE CONFIRMATION LETTER AND THE SIGNATURE IN THE AFFIDAVIT THOUGH IN TELUGU WERE TOTALLY DIFFERENT RAISING DOUBT AS TO THE IDENTITY OF THIS CREDITOR AND GENUINENESS OF THE TRANSACTION. THE ASSESSEE HAS PRODUCED THIS CRE DITOR FOR VERIFICATION BEFORE THE AO, WHO HAD DEPOSED THAT HE WAS HAVING A GRICULTURAL INCOME TO THE TUNE OF R.1,50,000/-AND RENTAL INCOME TO THE TU NE OF RS.12,000/- PER MONTH. HE HAD POSED THAT HE OWNS 3 ACRES OF LAND AN D HAD TAKEN LEASE OF 2 ACRES OF LAND AND OUT OF WHICH EARNS AGRICULTURAL INCOME OF RS.1,50,000/- PER ANNUM. AS THE GENUINENESS OF THE TRANSACTION IS IN DOUBT, THE IMPUGNED ADDITION IN REGARD TO THIS CRED ITOR IS CONFIRMED. 7.14 CREDIT IN THE NAME OF VELIQOTLA RAMA SATYANARA VANA: THE ASSESSE HAD FILED BEFORE THE AO CONFIRMATION LE TTER FROM ONE VELIGOTLA RAMA SATYANARAYANA, SB. VENKATA NARASAYYA ON 06.02.2014 CONFIRMING ADVANCE OF RS.1,35,000/- TO THE ASSESSEE. SUBSEQUEN TLY, DURING THE APPEAL HEARING AN AFFIDAVIT WAS FILED FROM ONE VELI GOTLA RAMA SATYANARAYANA CONFIRMING ADVANCE TO THE ASSESSEE. T HE ASSESSEE HAS PRODUCED THIS CREDITOR FOR EXAMINATION BEFORE THE A O ON 10.03.2016, WHO HAD DEPOSED THAT HE IS A PARTNER IN MIS. GAYATHRI FINANCE AND SRI LAXMI GAYATHRI FIRM AND THAT HIS INCOME FROM THE FIRMS WA S AROUND RS.2 LAKH PER YEAR AND HE HAS AGRICULTURAL INCOME TO THE TUNE OF RA75,000/- PER YEAR. IT WAS ALSO STATED THAT HE IS ASSESSED TO TAX WITH ITO, WARD-2, AMALAPURAM AND IS REGULARLY FILING HIS RETURNS OF I NCOME. THE AO MAY VERIFY THE RETURN OF INCOME OF THE SAID PARTY FOR T HE SUBJECT YEAR, AND IF THE IMPUGNED TRANSACTION IS REFLECTED THEREIN, THE IMPUGNED ADDITION MAY BE DELETED. 7.15 CREDIT IN THE NAME OF MYNAM SRINU: THE ASSESSE HAD FILED BEFORE THE AO CONFIRMATION LE TTER FROM ONE MYNAM ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 16 SRINU, SB. RAJARAO ON 05.12.2013 CONFIRMING ADVANCE OF RS.1,35,000/- TO THE ASSESSEE, SUBSEQUENTLY, DURING THE APPEAL HEARI NG AN AFFIDAVIT FROM ONE MARYANN SRINIVAS, S/O. RAJA RAO CONFIRMING ADVA NCE OF RS.1,35,000/- TO THE ASSESSEE VIDE THREE ODS. THE SIGNATURE IN TH E CONFIRMATION LETTER AND THE SIGNATURE IN THE AFFIDAVIT WERE TOTALLY DIF FERENT RAISING DOUBTS AS TO THE GENUINENESS OF THE TRANSACTION. THE ASSESSEE PRODUCED THIS CREDITOR FOR EXAMINATION BEFORE THE AO, WHO DEPOSED THAT HE WAS ENGAGED IN AGRICULTURAL ACTIVITIES AND THAT HIS TOT AL INCOME WAS RS.1,50,000/- PER ANNUM AND THAT HE HAD ADVANCED AN AMOUNT OF RS.1,35,000/- OUT OF SUCH INCOME. IT IS NOTED AS PE R THE BALANCE SHEET, THE AMOUNT ADVANCED BY THIS CREDITOR WAS ONLY RS.45 ,000/-, WHICH CLEARLY INDICATES THAT THE ALLEGED CREDIT TRANSACTION IS ON LY A MAKE BELIEVE ARRANGEMENT. HENCE, THE IMPUGNED ADDITION IN REGARD TO THIS CREDIT IS CONFIRMED. 7.16 CREDIT IN THE NAME OF PULLAMSETTY KRISHNA KISH ORE: THE ASSESSE HAD FILED BEFORE THE AO CONFIRMATION LE TTER FROM ONE PULLAMSETTY KRISHNA KISHORE, S/O. VEERABHADRARAO ON 25.02.2014 CONFIRMING ADVANCE OF RS.15,000/- BY WAY OF CASH TO THE ASSESSEE. SUBSEQUENTLY, DURING THE APPEAL HEARING AN AFFIDAVI T WAS FILED FROM ONE PULLAMSETTY KRISHNA KISHORE CONFIRMING THE ADVANCE OF RS.15,000/- TO THE ASSESSEE BY WAY OF DD DRAWN IN FAVOUR OF THE DISTRI CT COLLECTOR, EAST GODAVARI DISTRICT. THE ASSESSEE COULD NOT PRODUCE T HIS CREDITOR FOR VERIFICATION BEFORE THE AO. IT IS NOTED THAT THE SIG NATURE IN THE AFFIDAVIT AND THE SIGNATURE IN THE CONFIRMATION LETTER THOUGH IN ENGLISH WERE TOTALLY DIFFERENT RAISING DOUBT AS TO THE IDENTITY OF THIS CREDITOR AND GENUINENESS OF THE TRANSACTION. BESIDES IT IS ALSO NOTED THAT A S PER THE CONFIRMATION LETTER THE LOAN AMOUNT WAS SAID TO BE GIVEN IN CASH AND WHEREAS IN THE AFFIDAVIT THE ALLEGED LOAN AMOUNT WAS SAID TO BE GI VEN BY WAY OF DD. IN VIEW OF THESE DISCREPANCIES, IT IS EVIDENT THAT THE IMPUGNED TRANSACTION IS NOT GENUINE. HENCE THE IMPUGNED ADDITION MADE BY TH E AO IN REGARD TO THIS CREDITS UPHELD. 7.17 CREDIT IN THE NAME OF RAPARTHI PHANI KISHORE: IT IS SEEN THAT ASSESSEE DID NOT FILE ANY CONFIRMATI ON LETTER BEFORE THE AO IN RESPECT OF THIS CREDITOR. AN AFFIDAVIT WAS FILED BEFORE THE CIT(A) FROM ONE RAPARTHI PHANI KISHORE CONFIRMING ADVANCE OF RS .10,000/- BY WAY OF DD ON 07.06.2010. THE ASSESSEE PRODUCED THIS CREDIT OR BEFORE THE AO, WHO DEPOSED THAT HE HAS INCOME OF RS.2.5 IAKH FROM C ONTRACT WORKS AND CONFIRMED ADVANCE OF RS10,000/- TO THE ASSESSEE OUT OF HIS INCOME. HE ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 17 ALSO DEPOSED THAT THE WAS ASSESSED TO TAX AND FILED A COPY OF RETURN OF INCOME FOR A.Y.2011-12. IT IS ALSO NOTED THAT AFFID AVIT FROM THIS CREDITOR WAS FILED IN THE CASE OF ANOTHER LIQUOR DEALER MEKA MURALI KRISHNA CONFIRMING ADVANCE OF RS.15,000/- TO HIM. THE AO M AY VERIFY WHETHER THE IMPUGNED TRANSACTION IS DECLARED IN THE RETURN O F INCOME OF THE SAID CREDITOR. IF THE SAME WAS NOT DECLARED, THE IMPUGNED ADDITION WOULD STAND CONFIRMED. 7.18 IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAD FILED AFFIDAVIT FROM ONE MYNAM VENKATARATNAM CONFIRMING ADVANCE OF RS. 1 ,35,000/- TO THE ASSESSEE BUT WHOSE NAME DOES NOT FIGURE IN THE LIST OF CREDITORS STATED IN THE BALANCE SHEET. THIS AFFIDAVIT PURPORTEDLY FILED TO PROVE CREDIT IN THE NAME OF M. RATTAIAH. IT IS FURTHER NOTED THAT AFFIDA VIT FROM MYNAM VENKATARATNAM WERE ALSO FILED IN THE CASE OF OTHER LIQUOR DEALERS NAMELY BALUGU PRASAD, NELLI TRIMURTHULU CONFIRMING ADVANCE OF RS.1.35 LAKH IN EACH CASE. IN ALL THESE CASES M. RATIAH WAS SHOWN AS CREDITOR IN THE BALANCE SHEET. IT IS IMPROBABLE THAT A PERSON WITHO UT ANY REGULAR INCOME COULD ADVANCE SUCH HUGE AMOUNT INDICATING THAT HE A CTED MERELY AS NAME LENDER. THIS ALSO GOES TO PROVE THAT THE GENUINENES S OF MOST OF THE ABOVE CREDIT TRANSACTIONS ARE DOUBTFUL. 7.19 IT IS ALSO PERTINENT TO NOTE THAT IT WAS CLAIME D THAT THESE CREDIT TRANSACTIONS WERE BY WAY OF DDS FROM THE ALLEGED CR EDITORS. HOWEVER, THERE IS NO EVIDENCE TO SHOW THAT THE ALLEGED CREDI TORS HAVE TAKEN THE DDS. IT IS FURTHER NOTED THAT THERE WAS NO EVIDENCE TO SHOW THAT THE DDS WERE TAKEN OUT OF CHEQUE WITHDRAWALS. THE SERIAL NU MBERS OF THE DDS AND THE MANNER IN WHICH THE CASH DDS WERE TAKEN TO PAY THE LICENCE FEE ALSO RAISES DOUBTS AS TO THE GENUINENESS OF THESE CREDIT TRANSACTIONS WHICH WOULD BE ADDITIONAL REASON TO CONFIRM THE ABOVE ADD ITIONS. 13. AS PER THE DETAILED DISCUSSION MADE BY THE LD. CIT(A), THE CREDITS ARE NOT GENUINE. ALL THE CREDITS WERE CLAIMED TO B E TRANSACTIONS BY WAY OF DDS FROM THE CREDITORS. HOWEVER, THE ASSESSEE H AS NOT PRODUCED ANY EVIDENCE TO SHOW THAT THE DDS WERE TAKEN BY THE RES PECTIVE CREDITORS AND THE LD. A.R. DID NOT BRING ANY EVIDENCE TO CONT ROVERT THE FINDING OF THE LD. CIT(A). THEREFORE, WE DO NOT FIND ANY INFI RMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS UPHELD. IN THE RESU LT, APPEAL OF THE ASSESSEE ON THIS GROUND IS DISMISSED. ITA NO.84/VIZAG/2017 KATTA SRINIVASA RAO, RAJAHMUNDRY 18 14. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 27 TH SEPT17. SD/- SD/- ( . ) ( . . ' ) (V. DURGA RAO) (D.S. SUNDER SINGH) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 27.09.2017 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT KATTA SRINIVASA RAO, D.NO.79-22- 8, VADREVU NAGAR, RAJAHMUNDRY. 2. / THE RESPONDENT THE ITO, WARD-3, RAJAHMUNDRY 3. + / THE CIT, RAJAHMUNDRY 4. + ( ) / THE CIT (A), RAJAHMUNDRY 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM