M.Y. Maharshi V. The Asst. Commissioner of Income Tax Circle 16(2) Aayakar Bhavan Hyderabad

ITTA/282/2013

AI Insights

The case involves an appeal by M.Y. Maharshi against the order of the Income Tax Appellate Tribunal, which had confirmed the addition of Rs. 74,00,000 to his income for the assessment year 2007-08. The appellant contended that the amount was an advance received from P. Madhusudan Reddy, which should not be taxed as income. However, the Tribunal found no credible evidence to support this claim, noting the absence of any substantial proof of the creditworthiness of P. Madhusudan Reddy and discrepancies in the financial records. The High Court, upon reviewing the matter, agreed with the Tribunal's findings and dismissed the appeal, stating that the evidence presented was insufficient to establish the claim.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 691589 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 16-07-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: K KUMAR
• Keywords: Advance Received; Assessment Year 2007-08; Cash transaction; Creditworthiness; Income Tax
• Section: 260A

Judgement Text

"IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE Ms. JUSTICE G. ROHINI INCOME TAX APPELLATE TRIBUNAL APPEAL NO.282 OF 2013 DATED:16.7.2013 Between: M.Y. Maharshi … Appellant And The Asst. Commissioner of Income Tax Circle 16(2) Aayakar Bhavan Hyderabad … Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE Ms. JUSTICE G. ROHINI I.T.T.A. NO.282 OF 2013 JUDGMENT: (per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is preferred against the judgment and order of the learned Tribunal, dt.17.10.2012, in relation to assessment year 2007- 08. We have heard Sri K. Vasanth Kumar, learned counsel for the appellant, and gone through the impugned judgment and order of the learned Tribunal. It appears from the impugned judgment and order, all the authorities below have not accepted the sum of Rs.74,00,000/- as advance received by the appellant – assessee, from one P. Madhusudan Reddy. The aforesaid amount has been added to the income. It was the case of the assessee that the aforesaid amount was borrowed from said Madhusudan Reddy. On that, the learned Tribunal recorded that no acceptable proof has been produced to establish the fact of receipt of the aforesaid advance from Madhusudan Reddy. We quote the relevant findings of the learned Tribunal, which read as under: “In support of such claim, the assessee had submitted an affidavit of Sri P. Madhusudan Reddy, wherein Sri P. Madhusudan Reddy has admitted of having advanced an amount of Rs.74 lakhs to the assessee. However, apart from the affidavit, there is no other evidence on record either by the assessee or by Sri P. Madhusudan Reddy to establish the fact that an amount of Rs.74 lakhs as in fact has been advanced by Sri P. Madhusudan Reddy to the assessee. It is a fact on record that in course of remand proceedings before the AO as well as during the course of hearing before the CIT(A), no credible evidence has been submitted to prove the creditworthiness of Sri P. Madhusudan Reddy. In spite of specific query made by the AO as well as CIT(A) the breakup of advances were not furnished which could have thrown some light as to whether the advances mentioned in the receipts and payments account also included in the advances of Rs.74 lakhs paid to the assessee, when admittedly, the assessee’s name does not find place in the receipts and payments account of Sri P. Madhusudan Reddy. That apart, the AO after verification of the bank accounts of Sri P. Madhusudan Reddy has found deficit in the cash balance on the date Sri Madhusudan Reddy stated to have advanced the money to the assessee. These facts certainly raise a presumption against the creditworthiness of Sri P. Madhusudan Reddy in advancing the money of Rs.74 lakhs. The assessee has not rebutted the presumption by brining sufficient evidence to substantiate the creditworthiness of Sri P. Madhusudan Reddy. Undisputedly, the entire amount of Rs.74 lakhs has been claimed to have been paid in cash. Therefore, in absence of substantial evidence the affidavit of Sri P. Madhusudan Reddy becomes only self-serving document. The facts that Sri P. Madhusudan Reddy has shown an advance of Rs.14 crores in the receipts and payments account and has disclosed an income of 2.18 crores in his block return cannot by itself lead to an inference that Mr. P. Madhusudan Reddy has advanced the amount of Rs.74 lakhs to the assessee or with regard to his creditworthiness.” It is for the Tribunal, the Commissioner of Income Tax (Appeals) and the assessing authority to believe and disbelieve any quality of evidence. The evidence adduced by the assessee before the authorities below was not believed at all. This Court cannot substitute its own belief in place and instead of the disbelief and belief of the three authorities below. In exercise of jurisdiction under Section 260A of the Income Tax Act, the aforesaid fact finding cannot be interfere with by this Court. Similarly, a further addition of Rs.34 lakhs, withdrawn by the assessee from his bank account, in the Months of January and February, 2007, could not be substantiated by evidence. In view of the aforesaid facts and circumstances of the case, we are of the view that no substantial question of law is involved in this matter, far less substantial question of law. Hence, this appeal is dismissed. No order as to costs. ________________________ K.J. SENGUPTA, CJ ______________________ G. ROHINI, J 16.7.2013 bnr "