N/A V. N/A

ITTA/339/2011

AI Insights

The case involves an appeal by the assessee against the order of the Income Tax Appellate Tribunal, which had dismissed her appeal concerning the assessment year 2003-04. The assessee, engaged in the trade of bamboo and casurina ballies, received advances for casurina ballies, which she deposited in fixed deposits. However, the agreement was canceled due to the purchaser's dissatisfaction, and the advances were returned. The Income Tax Department treated the amounts in fixed deposits as unexplained income, leading to the assessee's appeal. The Tribunal and the High Court both found the transactions and agreements asserted by the assessee to be not genuine, primarily due to her failure to produce evidence or witnesses to substantiate her claims.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 796447 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 29-09-2011
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Respondent
• Court: HIGH COURT
• Assessee Lawyers: VASANTH KUMAR
• Keywords: Assessment year 2003-04; Fixed deposits; Income Tax; Unexplained income
• Section: 142(1); 69; 260-A

Judgement Text

"THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA I.T.T.A.No. 339 of 2011. ORDER: (Per Goda Raghuram, J) This appeal by the assessee under Section 260-A of the Income Tax Act, 1961 (for shrot ‘the Act’) arises out of an order of the Income Tax Appellate Tribunal (for shot ‘the Tribunal’) dt. 28.1.2011 in ITA.No. 956/Hyd/2010 dismissing the appeal against the order of the Commissioner of Income Tax (Appeals) dt. 21.5.2010, pertaining to the assessment year 2003-04. The assessee is in the trade of Bamboo and casurina ballies. During the relevant assessment year, she claims to have received advances for casurina ballies and deposited these amounts in fixed deposits. As the purchaser did not approve the quality of casurina ballies after field visit, the agreement between the parties was cancelled and the advances received by the assessee returned to the respective parties. On this basis, the assessee claims that the amounts received are advances in the course of trading activity and therefore the amounts cannot be treated as the income of the appellant. As no returns was filed by the for the assessment year 2003-04, notice under Section 142(1) of the Act was issued in November, 2004 calling for returns of income. There being no reply, another notice was issued on 27.5.2005 calling for the details regarding bank accounts held by the assessee appellant along with interest income, if any, derived and details of total income from all the sources earned during the previous year relevant to the assessment year in question. As there was no compliance from the appellant, information received from the CIB regarding the appellant’s deposits with banks was communicated by the Additional Commissioner of Income Tax, Range-5, Hyderabad stating that the assessee had invested Rs. 15,77,000/- on 3.4.2002 and Rs. 24,00,000/- on 21.5.2002 as fixed deposits with a nationalized bank during the relevant assessment year. The assessee filed her returns on 14.12.2005 declaring an income of Rs. 1,32,881/- including Rs. 1,27,949/- from the business and Rs. 4,932/- from other sources. Eventually, an assessment order was passed treating the amounts invested in fixed deposit as the income during the relevant assessment year (by addition under Section 69 of the Act). Aggrieved an unsuccessful appeal to the Commissioner of Appeals followed another to the ITAT. The Tribunal in concurring with the conclusions recorded by the assessing and the appellate authorities held that since the summons issued by assessing officer to the persons who are said to have advanced money were returned unserved; he made efforts to examine those persons through departmental officers and found no such persons were found and the assessee could not also produce them before the assessing officer, the agreement and the transactions asserted are not genuine and accordingly treated the amounts invested in the fixed deposit as unexplained income of the assessee during the relevant assessment year. Sri.Vasanth Kumar, the learned Counsel for the appellant would strenuously contend that the methodology adopted by the assessing officer to verify the genuineness of the transactions is not a fair process since it is not practicable for an assessee such as the appellant herein to assume that identity of the persons who advanced amounts to her in course of business would be verified to ascertain genuineness of such persons so as to establish the same in case of a scrutiny. It is however fairly conceded by the learned Counsel for the appellant that there is no precedential authority for the proposition propounded by him. In the facts and circumstances, this court discerns no substantial question of law arising for consideration, warranting interference under Section 260-A of the Income Tax Act, 1961. The appeal is without merits and is accordingly dismissed at the stage of admission. There shall be no order as to costs. ______________________ GODA RAGHURAM, J _______________________ B.N.RAO NALLA, J 29.09.2011. KRB. THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA I.T.T.A.No. 339 of 2011. ORDER: (Per Goda Raghuram, J) Dt. 29.09.2011. "