Sri Nandigam Sudhakar,, Tanuku v. The ITO, Ward-1., Tanuku

ITA 147/VIZ/2008 | 2000-2001
Pronouncement Date: 21-01-2011 | Result: Dismissed

Appeal Details

RSA Number 14725314 RSA 2008
Bench Visakhapatnam
Appeal Number ITA 147/VIZ/2008
Duration Of Justice 2 year(s) 11 month(s) 1 day(s)
Appellant Sri Nandigam Sudhakar,, Tanuku
Respondent The ITO, Ward-1., Tanuku
Appeal Type Income Tax Appeal
Pronouncement Date 21-01-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 21-01-2011
Date Of Final Hearing 09-12-2010
Next Hearing Date 09-12-2010
Assessment Year 2000-2001
Appeal Filed On 19-02-2008
Judgment Text
ITA NOS 108 109 147 AND 148 OF 2008 NANDIGAM SUD HAKAR TANUKU PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NOS. 108 & 109/VIZAG/2008 ASSESSMENT YEARS: 2000-01 & 2001-02 ITO WARD-1 TANUKU VS. NANDIGRAM SUDHAKAR TANUKU (APPELLANT) (RESPONDENT) PAN NO:AAQPN 6976 J ITA NOS. 147& 148/VIZAG/2008 ASSESSMENT YEARS: 2000-01 & 2001-02 NANDIGRAM SUDHAKAR TANUKU VS. ITO WARD-1 TANUKU (APPELLANT) PAN NO:AAQPN 6976 J (RESPONDENT) APPELLANT BY: SHRI D.S.SUNDER SINGH SR DR RESPONDENT BY: SHRI G.V.N. HARI CA ORDER PER BENCH: THESE CROSS APPEALS ARE DIRECTED AGAINST THE COMMO N ORDER DATED 10.12.2007 PASSED BY LD CIT(A) RAJAHMUNDRY AND THE Y RELATE TO THE ASSESSMENT YEARS 2000-01 & 2001-02. SINCE THE ISSU ES URGED IN THESE APPEALS ARE INTER LINKED THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. THE ADDITION OF PEAK CREDIT AMOUNT OF TRANSA CTIONS MADE IN THE BANK ACCOUNT OF THE ASSESSEE HAVING BEEN PARTLY DELETED BOTH THE PARTIES ARE IN APPEAL BEFORE US. ITA NOS 108 109 147 AND 148 OF 2008 NANDIGAM SUD HAKAR TANUKU PAGE 2 OF 5 3. THE FACTS RELATING TO THE ISSUES ARE STATED IN BRIEF. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2004 -05 IT CAME TO THE NOTICE OF THE ASSESSING OFFICER THAT THE ASSESSEE I S HAVING A BANK ACCOUNT NUMBERED AS 6 WITH BANK OF INDIA TANUKU. IT WAS FURTHER NOTICED THAT THE ASSESSEE HAD CARRIED OUT MANY TRANSACTIONS OF D EPOSITS AND WITHDRAWALS DURING THE PERIODS RELEVANT FOR THE ASSESSMENT YEAR S 2000-01 AND 2001-02. ACCORDINGLY THE ASSESSING OFFICER REOPENED THE ASSE SSMENT OF BOTH THE YEARS BY ISSUING NOTICE UNDER SECTION 148 OF THE AC T. IN THE ASSESSMENT PROCEEDINGS THE ASSESSEE INITIALLY CLAIMED THAT TH E SAID BANK ACCOUNT BELONGS TO AN ASSOCIATION OF PERSONS CONSISTING OF HIMSELF IN HIS HUF STATUS AND ANOTHER PERSON NAMED SHRI KORATA SRINIVASA RAO. IT WAS STATED THAT THE ASSOCIATION OF PERSONS CAME TO EXISTENCE ON 18-2-1999 FOR CARRYING ON FINANCIAL BUSINESS. WHEN THE SAID KORATA SRINIVASA RAO WAS ENQUIRED HE DEPOSED THAT HE WITHDREW FROM THE BUSINESS WITHIN 1 5 DAYS. HOWEVER HE CONFIRMED THAT HE HAS ADVANCED A LOAN OF RS.10.00 L AKHS TO THE ASSESSEE AT THE INTEREST RATE OF 12%. HE EXPLAINED THE SOURCES FOR MAKING THE SAID ADVANCE TO BE THE SALE PROCEEDS OBTAINED ON SALE OF HIS AGRICULTURAL LANDS. HE ALSO STATED THAT HE WITHDREW A SUM OF RS.3.00 LA KHS FROM THE ASSESSEE IN THE FINANCIAL YEAR 2000-01. HENCE THE ASSESSING OFFICER DID NOT ACCEPT THE THEORY OF ASSOCIATION OF PERSONS AND HELD THAT THE IMPUGNED BANK ACCOUNT BELONGS TO THE ASSESSEE ONLY. ACCORDINGLY T HE ASSESSING OFFICER WORKED OUT THE PEAK CREDIT OF THE TRANSACTIONS AT R S.11 43 904/- AND ASSESSED THE SAME IN TWO ASSESSMENT YEARS I.E. RS.2 84 517/- IN THE ASSESSMENT YEAR 2000-01 AND RS.8 59 387/- IN THE AS SESSMENT YEAR 2001- 02. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFO RE THE LEARNED CIT (A) AND INTER ALIA PLEADED THAT THE ASSESSING OFFICER SHOULD HAVE GIVEN CREDIT FOR ACCUMULATED AGRICULTURAL INCOME EARNED BY HIM A ND ALSO TO THE LOAN OF RS.10.00 LAKHS TAKEN FROM SHRI KORATA SRINIVASA RAO . THE LEARNED CIT (A) ALLOWED A CREDIT OF RS.1.00 LAKH TOWARDS THE ACCUMU LATED AGRICULTURAL ITA NOS 108 109 147 AND 148 OF 2008 NANDIGAM SUD HAKAR TANUKU PAGE 3 OF 5 INCOME AGAINST THE ADDITION MADE IN THE ASSESSMENT YEAR 2000-01. IN RESPECT OF LOAN TAKEN FROM KORATA SRINIVASA RAO H E ALLOWED A CREDIT OF RS.7.00 LAKHS SINCE THE SAID PERSON HAD WITHDRAWN A SUM OF RS.3.00 LAKHS DURING THE FINANCIAL YEAR 2000-01. 4. AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) T HE ASSESSEE IS IN APPEAL BEFORE US SEEKING FURTHER RELIEF. THE REVENU E IS IN APPEAL BEFORE US ASSAILING THE DECISION OF THE LEARNED CIT (A) IN GR ANTING THE SAID RELIEF. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. WITH REGARD TO THE CLAIM OF ACCUMULATED AGR ICULTURAL INCOME MADE BY THE ASSESSEE THE LEARNED CIT (A) HAS NOTICED TH AT THE ASSESSEE WAS IN POSSESSION OF 14.16 ACRES OF AGRICULTURAL LAND. HEN CE BY CONSIDERING THE PROBABLE AGRICULTURAL INCOME AND EXPENDITURE THE L EARNED CIT (A) HAS ALLOWED A CREDIT OF RS.1.00 LAKH AGAINST THE PEAK C REDIT ADDED FOR THE ASSESSMENT YEAR 2000-01. THOUGH THE ASSESSEE SEEKS FURTHER RELIEF ON THIS ACCOUNT YET HE COULD NOT PLACE ANY MATERIAL BEFORE US IN ORDER TO COMPEL US TO INTERFERE WITH THE ESTIMATE MADE BY THE LEARN ED CIT(A). IN THE SIMILAR MANNER THOUGH THE REVENUE ASSAILS THE DECI SION OF THE LEARNED CIT (A) IN GRANTING CREDIT OF RS.1.00 LAKH NO MATERIAL WAS PLACED BY THEM TO CONTRADICT THE FINDINGS OF THE LEARNED CIT (A). CON SIDERING THE FACT OF AGRICULTURAL HOLDINGS AND EXPLANATIONS OF THE ASSES SEE WE ARE OF THE VIEW THAT THE LEARNED CIT (A)S DECISION TO ALLOW A CRED IT OF RS.1.00 LAKH APPEARS TO BE REASONABLE. ACCORDINGLY WE UPHOLD HIS ORDER ON THIS ISSUE. 6. WITH REGARD TO THE LOAN OF RS.10.00 LAKHS CLAIME D TO HAVE BEEN TAKEN FROM SRI KORATA SRINIVASA RAO THE LEARNED CIT(A) A LLOWED A CREDIT OF RS.7.00 LAKHS WITH THE FOLLOWING OBSERVATIONS: ITA NOS 108 109 147 AND 148 OF 2008 NANDIGAM SUD HAKAR TANUKU PAGE 4 OF 5 (III) THE ASSESSING OFFICER HAS NOT DISPUTED THE CLAIM OF THE APPELLANT THAT HE HAD TAKEN INTEREST BEARING LOAN O F RS.10 LAKHS FROM SHRI KORATA SRINIVASA RAO AFTER SEPTEMBER 199 9. SUCH FACT WAS DULY CONFIRMED BY SHRI KORATA SRINIVASA RA O IN HIS STATEMENT DATED 18-12-2006 TENDERED BEFORE THE ASSE SSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. HENCE I T IS ARBITRARY AND UNJUST ON THE PART OF THE ASSESSING O FFICER FOR NOT HAVING CONSIDERED AND EXAMINED ON MERIT SUCH CLAIM OF THE APPELLANT. IN HIS REPLY TO QUESTION NO.6 IN HIS STA TEMENT SHRI KORATA SRINIVASA RAO HAD STATED THAT HE HAD WITHDRA WN AN AMOUNT OF RS.3 LAKHS DURING THE FINANCIAL YEAR 2000 -01. IN VIEW OF SUCH ADMISSION IT IS SAFE TO ASSUME THAT A S ON 12-08- 2000 WHICH REFLECTS THE PEAK CREDIT OF RS.11 43 904 FOR THE ACCOUNTING YEAR ENDED 31-03-2001 RELEVANT TO THE AS SESSMENT YEAR 2001-02 THE FUNDS TO THE EXTENT OF ONLY RS.7 LAKHS LAY WITH THE APPELLANT. THEREFORE ONLY TO THE EXTENT O F RS.7 LAKHS AND NOT RS.10 LAKHS CREDIT NEEDS TO BE GIVEN TO TH E APPELLANT FOR EXPLAINING THE SOURCES OF TRANSACTIONS FOR THAT ACCOUNTING YEAR. HENCE A SUM OF RS.7 LAKHS NEEDS TO BE SET OF F AGAINST THE PEAK CREDIT OF RS.11 43 904. FURTHERMORE THE P EAK CREDIT ADDITION TO THE EXTENT OF RS.1 84 517 FOR THE ASSES SMENT YEAR 2000-01 IS ALSO REQUIRED TO BE SET OFF AGAINST THE FIGURE OF RS.11 43 904. THUS THE TOTAL CREDIT ALLOWABLE FOR SET OFF WORKS OUT TO RS.8 84 517. ACCORDINGLY THE NET PEAK CREDI T REPRESENTING UNEXPLAINED INVESTMENT FOR THE ACCOUNT ING YEAR ENDED 31-03-2001 RELEVANT TO THE ASSESSMENT YEAR 20 01-02 WORKS OUT TO RS.2 59 387 AND HENCE THE ADDITION T O ONLY THAT EXTENT IS HEREBY SUSTAINED. CONSEQUENTLY THE APPE LLANT GETS RELIEF TO THE EXTENT OF RS.1 00 000 AND RS.8 84 517 FOR THE ASSESSMENT YEARS 2000-01 AND 2001-02 RESPECTIVELY. 7. WITH REGARD TO THE LOAN CLAIMED TO HAVE BEEN TAKEN FROM SHRI KORATA SRINIVASA RAO WE NOTICE THAT THE ASSESSING OFFICER THOUGH MADE INQUIRIES WITH HIM DID NOT GIVE CREDIT FOR THE SAID LOAN. WE NOTICE THAT THE SAID CREDITOR HAS CONFIRMED THE LOAN AND HE HAS ALSO PRO DUCED EVIDENCES FOR AVAILABILITY OF FUNDS. IT WAS BROUGHT TO OUR NOTICE THAT THE AGRICULTURAL LANDS WERE SOLD BY HIM FOR RS.9 71 200/- AND AFTER ADJUST ING HIS OTHER LIABILITIES HE WAS IN POSSESSION OF RS.6 54 800/-. THUS THE SA ID CREDITOR HAS ALSO PROVED THE AVAILABILITY OF FUNDS TO THE TUNE OF RS. 6.50 LAKHS. THE LEARNED ITA NOS 108 109 147 AND 148 OF 2008 NANDIGAM SUD HAKAR TANUKU PAGE 5 OF 5 CIT(A) HAS GIVEN CREDIT OF ONLY RS.7.00 LAKHS AS AG AINST THE CLAIM OF RS.10.00 LAKHS. THUS IN OUR VIEW THE RECEIPT OF LOAN STANDS EXPLAINED TO THE EXTENT OF THE CREDIT GIVEN BY THE LEARNED CIT(A ). THOUGH THE ASSESSEE CLAIMS CREDIT FOR RS.10.00 LAKHS WE DO NOT FIND IT TO BE TENABLE IN VIEW OF THE REPAYMENT OF LOAN TO THE EXTENT RS.3.00 LAKHS. HENCE WE DO NOT FIND ANY REASON TO INTERFERE WITH THE DECISION OF LEARNE D CIT(A) ON THIS ISSUE ALSO. 8. IN THE RESULT THE APPEALS OF THE REVENUE AND THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 21ST JANUARY 201 1. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE:21-01-2011 COPY TO 1 THE ITO WARD-1 TANUKU 2 SHRI NANDIGRAM SUDHAKAR S/O SHRI RAMACHANDRA RAO DOOR NO.22-6-6 SAJJAPURAM TANUKU WEST GODAVARI DISTT. 3 4. THE CIT RAJAHMUNDRY THE CIT(A) RAJAHMUNDRY 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM