Sri Vallabhaneni Sangeetha, Vijayawada, Hyderabad V. The ACIT, Central Circle, Vijayawada

MA 53/VIZ/2009

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4741 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 9 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-07-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-01-2010
• Assessment Year: misc
• Appeal Filed On: 22-10-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUBRATA SARKAR
• Assessee Lawyers: S RAMA RAO
• Section: 2

Judgement Text

MA NO.53/VIZ/2009 SMT. VALLABHANENI SANGEETA, VIJAYAWADA PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER MA NO. 53/VIZAG/2009 (ARISING OUT OF IT(SS) A NO.12/VIZ/2008) BLOCK PERIOD 1-4-1996 TO 14-2-2003 SMT. VALLABHANENI SANGEETHA, VIJAYAWADA VS. ACIT, CENTRAL CIRCLE, VIJAYAWADA (APPELLANT) (PAN NO. AARPV 7512 M ) (RESPONDENT) APPELLANT BY: SHRI S. RAMA RAO, ADVOCATE RESPONDENT BY: SHRI SUBRATA SARKAR, CIT(DR) ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS PETITION WITH THE PRAYE R FOR APPROPRIATE RELIEF WITH THE SUBMISSION THAT CERTAIN MISTAKES AP PARENT FROM RECORD HAVE CREPT IN, IN RESPECT OF THE FOLLOWING MATTERS, IN T HE ORDER DATED 22-12-2008 PASSED IN IT(SS)A NO.12/VIZAG/2008. A) ADDITION ON ACCOUNT OF CREDIT FOUND IN BANK A/C B) ADDITION ON ACCOUNT OF EXPENDITURE ON FISH CULTIVAT ION 2. THE SUBMISSIONS OF THE ASSESSEE, ARGUMENTS OF TH E LEARNED DEPARTMENTAL REPRESENTATIVE AND THE NATURE OF MISTA KE THAT HAVE CREPT IN, HAVE BEEN DISCUSSED IN DETAIL IN MA NO.50/VIZAG/200 9 (ARISING OUT OF IT(SS)A NO.9/VIZAG/2008) IN THE CASE OF SMT. VALLAB HANENI VENKATSUBBAMMA, WHEREIN IDENTICAL ISSUES WERE CONSI DERED. WITH REGARD TO THE FIRST ISSUE THE TRIBUNAL HAD PASSED ITS ORIGINA L ORDER BY PLACING RELIANCE ON THE PROVISIONS OF SEC.68 OF THE ACT IN ORDER TO CONFIRM THE ADDITION. SINCE THE ASSESSEE DOES NOT MAINTAIN ANY BOOKS OF ACCOUNT , THE LEARNED AUTHORISED REPRESENTATIVE, INTER ALIA CONTENDED THA T THE PROVISIONS OF MA NO.53/VIZ/2009 SMT. VALLABHANENI SANGEETA, VIJAYAWADA PAGE 2 OF 4 SEC.68 DOES NOT APPLY TO THE FACTS OF THE ISSUE. IT WAS ALSO BROUGHT TO THE NOTICE OF THE BENCH THAT THE IMPUGNED DEPOSITS ARE RELATABLE TO THE SALE PROCEEDS OF FISHES AND THE SAME HAD ESCAPED THE ATT ENTION OF THE TRIBUNAL. ACCORDINGLY, IN THE ABOVE CITED CASE, IT WAS NOTIC ED THAT A MISTAKE APPARENT FROM THE RECORD HAS CREPT IN AND SUITABLE MODIFICAT ION OF THE RELEVANT PARAGRAPH OF THE ORDER WAS MADE. THE OPERATIVE PORT ION OF THE MODIFIED ORDER IS EXTRACTED BELOW: THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT A LL THE FAMILY MEMBERS OF THE ASSESSEE ARE ENGAGED IN THE BUSINESS OF FISH FARMING AND INCOME OFFERED BY THEM HAVE BEEN ACCEPT ED IN EARLIER YEARS. DURING THE COURSE OF SEARCH PROCEEDI NGS THE DISPATCH SLIPS WERE FOUND OUT, WHICH REVEALED THAT THE DISPATCHES OF FISHES WERE MADE TO WEST BENGAL. THE DDS WHICH HAVE BEEN FOUND DEPOSITED IN THE BANK A/C OF THE AS SESSEE HAVE BEEN PURCHASED FROM THE STATE OF WEST BENGAL O NLY. BESIDES THIS THE GROSS SALE VALUE OF DISPATCHES MAD E WERE DETERMINED AT RS.4,96,86,000/- AND THE NET PROFIT W AS DETERMINED AT RS.17,39,010/-. THE TOTAL AMOUNT OF I NCOME FROM THIS SOURCE AS DISCLOSED BY THE FAMILY MEMBERS OF T HE ASSESSEE STOOD AT RS.4,58,700/- AND HENCE THE UNDISCLOSED IN COME FROM THIS SOURCE WAS DETERMINED AT RS.12,80,310/-. SINCE THE PACKING SLIPS CONTAINED NAMES OF DIFFERENT CONCERNS , FOR THE SAKE OF CONVENIENCE, THE SAID UNDISCLOSED INCOME WA S ASSESSED IN THE HANDS OF SHRI VALLABHANENI VENKATARAMAIAH. T HUS IT CAN BE SEEN THAT HERE IS A CORRELATION BETWEEN THE SALE OF FISH AND RECEIPT OF DDS. IN THESE CIRCUMSTANCES AS OBSERVED B Y THE LEARNED CIT (A), UNLESS THERE IS ANY INFORMATION CO NTRARY TO THE CLAIM OF THE ASSESSEE, WE DO NOT FIND ANY REASON TO REJECT THE CLAIM OF THE ASSESSEE THAT THE IMPUGNED DEPOSITS RE PRESENT SALES REALIZATION. IN THE INSTANT CASE, OUT OF THE TOTAL AMOUNT OF RS. 27,86,679/- ADDED BY THE ASSESSING OFFICER, A S UM OF RS.27,68,554/- HAVE BEEN DEPOSITED DURING THE PERIO D FROM SEPTEMBER, 2002 TO JANUARY, 2003. BESIDES, THE SALE S AND THE CORRESPONDING INCOME RELATING TO UNDISCLOSED ITEMS HAVE BEEN ASSESSED IN THE HANDS OF SHRI VALLABHANENI VENKATAR AMAIAH BY THE ASSESSING OFFICER ONLY FOR THE SAKE OF CONVENIE NCE. HENCE, WE ARE OF THE VIEW THAT THE LEARNED CIT (A) IS NOT CORRECT TO PLACE RELIANCE ON THE CASH FLOW STATEMENT TO RESTRI CT THE RELIEF TO RS.24,50,000/-. IN VIEW OF THE FOREGOING DISCUSSIONS , WE ARE OF THE VIEW THAT THE IMPUGNED DEPOSITS MADE INTO THE B ANK ARE RELATABLE TO THE SALES REALIZATION. SINCE THE INCOM E FROM FISH SALES HAVE ALREADY BEEN ASSESSED IN THE HANDS OF TH E ASSESSEE AND HIS FAMILY MEMBERS, NO SEPARATE ADDITION IS WAR RANTED IN RESPECT OF SALES REALIZATION. IN VIEW OF THE ABOVE, WE DIRECT THE ASSESSING OFFICER TO DELETE THE ENTIRE ADDITION OF RS.27,86,679/- . MA NO.53/VIZ/2009 SMT. VALLABHANENI SANGEETA, VIJAYAWADA PAGE 3 OF 4 3. IN VIEW OF THE DISCUSSION MADE IN THEN PRECEDING PARAGRAPH, WE ARE OF THE VIEW THAT A MISTAKE APPARENT FROM THE RECORD HAS CREPT IN, IN THE INSTANT CASE ALSO. ACCORDINGLY WE SUBSTITUTE PARA N O.6.1 OF THE ORDER DATED 22-12-2008 WITH THE FOLLOWING PARAGRAPH: PARA 6.1. THERE IS NO DISPUTE WITH REGARD TO THE FA CT THAT ALL THE FAMILY MEMBERS OF THE ASSESSEE ARE ENGAGED IN T HE BUSINESS OF FISH FARMING AND THE INCOME OFFERED BY THEM WERE ACCEPTED IN EARLIER YEARS. IN ONE OF THE GROU P CASES NAMED VALLABHANENI VENKATARAMAIAH THE CORRELATION BETWEEN THE SALE OF FISH AND THE RECEIPT OF DDS WAS ACCEPTED AS THERE WAS NO INFORMATION CONTRARY TO THE CLAIM OF THE ASSESSEE IN THAT REGARD. IN THE INSTANT CASE ALSO T HE ASSESSING OFFICER REJECTED SIMILAR CLAIM OF THE ASSES SEE ONLY FOR THE REASON THAT THE ASSESSEE COULD NOT PROVE THE SAID CLAIM WITH BOOKS OF ACCOUNT. SINCE A VIEW HAS ALREA DY BEEN TAKEN THAT THE DDS RECEIVED ARE RELATABLE TO THE SA LES, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE HOLD THA T THE IMPUGNED AMOUNT OF RS.2.00 LAKHS IS RELATABLE TO THE SALES REALIZATION AND HENCE NO SEPARATE ADDITION IS WARRA NTED. ACCORDINGLY WE UPHOLD THE ORDER OF THE LEARNED CIT ( A) ON THIS ISSUE. 4. THE NEXT ISSUE ON WHICH THE ASSESSEE POINTS OUT MISTAKE RELATES TO THE ADDITION OF RS.12,50,000/-WITH REGARD TO THE EX PENDITURE ON FISH CULTIVATION. AN IDENTICAL ISSUE WAS CONSIDERED BY U S IN MA NO.50/VIZAG/2009 (ARISING OUT OF IT(SS) NO.9/VIZAZG/2008) IN THE CAS E OF SMT. VALLABHANENI VENKATSUBBAMMA AND IN THAT CASE THE ORDER WAS MODI FIED BY RESTRICTING THE ADDITION ONLY IN RESPECT OF FIRST YEAR IN WHICH FISH PONDS WERE DEVELOPED. IN THE INSTANT CASE THE IMPUGNED ADDITIO N PERTAINS TO DEVELOPMENT OF 50 ACRES OF FISH POND DURING THE FIN ANCIAL YEAR 1997-98 ONLY, I.E. THE FIRST YEAR OF OPERATION. THE ASSESSE E DID NOT DEVELOP FRESH PONDS IN THE SUCCEEDING YEARS AND HENCE NO ADDITION WAS CONFIRMED IN RESPECT OF OTHER YEARS. SINCE THE ADDITION CONFIRME D IN THE INSTANT CASE MA NO.53/VIZ/2009 SMT. VALLABHANENI SANGEETA, VIJAYAWADA PAGE 4 OF 4 RELATES TO THE FIRST YEAR OF OPERATION ONLY, THE SA ME IS IN ACCORDANCE WITH THE VIEW TAKEN IN THE GROUP CASES. HENCE THIS ISSU E DOES NOT REQUIRE ANY INTERFERENCE. 5. ACCORDINGLY THE MISCELLANEOUS PETITION OF THE AS SESSEE IS DISPOSED OFF. 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF T HE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 22/07/2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE:22 ND JULY,2010 COPY TO 1 SMT., VALLABHANENI SANGEETA, D.NO.74-12-7, NEW RT C COLONY, PATAMATA, VIJAYAWADA 2 SRI S. RAMA RAO, ADVOCATE, FLAT NO.103, H.NO.3-6- 542/4, INDIRADEVI NILAYAM, ST.NO.7, HIMAYATHNAGAR, HYDERABAD 500029 3 4. THE ACIT, CENTRAL CIRCLE, VIJAYAWADA 5 THE CIT (CENTRAL), HYDERABAD THE CIT(A), CENTRAL, HYDERABAD 6 THE DR, ITAT, VISAKHAPATNAM. 7 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM