Sri G Kedar Srinivas, Kakinada v. The ACIT, Cir-I, Kakinada

ITA NO.184 OF 2009 GANGUMMALLA KEDAR SRINIVAS KAKINA DA 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 ITA NO. 184/VIZAG/2009 ASSESSMENT YEAR: 2003-04 GANGUMMALLA KEDAR SRINIVAS KAKINADA VS. ACIT CIRCLE-1 KAKINADA (APPELLANT) PAN NO:ACOPG 1945 J (RESPONDENT) APPELLANT BY: SHRI P. PRABHAKAR MURTHY ADVOCATE RESPONDENT BY: SHRI J. SIRI KUMAR DR ORDER PER SHRI B. R. BASKARAN ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29.01.2009 PASSED BY LEARNED CIT(A) RAJAHMUNDRY AN D IT RELATES TO THE ASSESSMENT YEAR 2003-04. 2. THOUGH THE ASSESSEE HAS RAISED AS MANY AS FIVE G ROUNDS THE LEARNED AUTHORISED REPRESENTATIVE RESTRICTED HIS AR GUMENT WITH REGARD TO THE ADDITION OF RS.1 61 189/- RELATING TO SUPPRESSI ON OF COMMISSION INCOME. ACCORDINGLY WE DISMISS THE OTHER GROUNDS RAISED BY THE ASSESSEE. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE IS A SHARE BROKER AND ALSO A TRADER OPERATING FROM KAKIN ADA. DURING THE YEAR UNDER CONSIDERATION HE WORKED FOR A CONCERN NAMED M/S LIMRA SECURITIES LTD. THE ASSESSEE FILED HIS RETURN OF INCOME FOR TH E YEAR UNDER CONSIDERATION ON 1.12.2003 ADMITTING A TOTAL INCOME OF RS.2 30 840/-. THE SAID RETURN WAS INITIALLY PROCESSED UNDER SECTION 1 43(1). SUBSEQUENTLY THE ITA NO.184 OF 2009 GANGUMMALLA KEDAR SRINIVAS KAKINA DA PAGE 2 OF 4 ASSESSING OFFICER REOPENED THE ASSESSMENT BY ISSUIN G NOTICE UNDER SECTION 148 AND THE SAME WAS SERVED UPON THE ASSESSEE ON 29 .11.2004. THE ASSESSING OFFICER HAD MADE A REFERENCE TO A CONCERN NAMED M/S ZEN SECURITIES LTD VIDE HIS LETTER DATED 5.11.2004. IN RESPONSE THERETO THE SAID M/S ZEN SECURITIES LTD REPLIED THAT THE GROSS BROKE RAGE EARNED FROM ITS KAKINADA BRANCH IS RS.14 09 718/- FOR THE FINANCIAL YEAR 2002-03 OUT OF WHICH A SUM OF RS.7 81 189/- WAS SAID TO BE PAID TO THE ASSESSEE HEREIN. IT MAY BE CLARIFIED HERE THAT THERE WAS BUSINESS CONNE CTION BETWEEN M/S LIMRA SECURITIES LTD AND M/S ZEN SECURITIES LTD. S UBSEQUENTLY THE BUSINESS BELONGING TO M/S LIMRA SECURITIES LTD WAS TAKEN OVE R BY M/S ZEN SECURITIES LTD. THE ASSESSING OFFICER VERIFIED THE RETURN OF INCOME FILED BY THE ASSESSEE AND NOTICED THAT HE HAD DISCLOSED A COMMIS SION INCOME OF RS.6 20 000/- ONLY AND ACCORDINGLY ADDED THE DIFFER ENCE OF RS.1 61 189/- (RS.7 81 189/- (-) RS.6 20 000/-) TO THE TOTAL INCO ME OF THE ASSESSEE. 4. ACCORDING TO THE LEARNED AUTHORISED REPRESENTATI VE THE ASSESSEE HAS WORKED WITH AND RECEIVED COMMISSION INCOME OF RS.6 20 000/- ONLY FROM M/S LIMRA SECURITIES LTD. FURTHER THE SAID COMPANY HAD ALSO DEDUCTED TDS OF RS.31 000/- FROM THE COMMISSION INCOME AND THE S AME WAS ALSO DULY DISCLOSED IN THE RETURN OF INCOME. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS THE ASSESSEE VIDE HIS LETTER DATED 30 .10.2005 HAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER THAT M/S ZEN SE CURITIES LTD HAS PAID COMMISSION TO LIMRA SECURITIES LTD AND ALSO REQUEST ED THE ASSESSING OFFICER TO CONFIRM THE SAID DETAILS FROM M/S LIMRA SECURITI ES LTD AND ALSO FROM M/S ZEN SECURITIES LTD. HOWEVER THE ASSESSING OFFICE R DID NOT CONSIDER THE SAID LETTER OF THE ASSESSEE. BEFORE THE LEARNED CIT (A) ADDITIONAL EVIDENCE BY WAY OF A CERTIFICATE DATED 07.11.2008 OBTAINED FROM M/S LIMRA SECURITIES LTD. WAS MOVED BUT THE LEARNED CIT (A) DECLINED T O ADMIT THE SAME. HOWEVER THE LEARNED CIT (A) WITHOUT ADMITTING THE SAID ADDITIONAL ITA NO.184 OF 2009 GANGUMMALLA KEDAR SRINIVAS KAKINA DA PAGE 3 OF 4 EVIDENCE HAD TAKEN COGNIZANCE OF SUBMISSIONS MADE IN THE SAID CERTIFICATE. IN THE SAID CERTIFICATE IT WAS INTER ALIA MENTIONE D THAT THE BUSINESS OF M/S LIMRA SECURITIES LTD. WAS TAKEN OVER BY M/S ZEN SEC URITIES LTD. HOWEVER THE LEARNED CIT(A) DID NOT TAKE COGNIZANCE OF THE F ACT THAT IN THE VERY SAME CERTIFICATE M/S LIMRA SECURITIES HAS CONFIRMED THAT THEY HAVE PAID A SUM OF RS.6 20 000/- ONLY AS COMMISSION TO THE ASSE SSEE. 5. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPR ESENTATIVE SUPPORTED THE ORDER OF THE LEARNED CIT (A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. WE NOTICE THAT THE ASSESSEE HAS FILED A LE TTER DATED 30.10.2005 BEFORE THE ASSESSING OFFICER WHEREIN THE DETAILS OF COMMISSION PAID BY M/S ZEN SECURITIES LTD TO M/S LIMRA SECURITIES WERE FUR NISHED. IN THE CERTIFICATE DATED 7.11.2008 GIVEN BY M/S LIMRA SECURITIES LTD WHICH WAS MOVED AS ADDITIONAL EVIDENCE BEFORE LEARNED CIT(A) THE SAID CONCERN HAS CERTIFIED THAT IT HAD PAID COMMISSION OF RS.6 20 000/- ONLY T O THE ASSESSEE. WE NOTICE THAT THE ASSESSING OFFICER DID NOT TAKE COGN IZANCE OF ASSESSEES LETTER DATED 30.10.2005 CITED ABOVE. THE LEARNED CIT (A) A LSO HAS DECLINED TO ADMIT THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSES SEE. WE ARE OF THE VIEW THAT IN ORDER TO RENDER JUSTICE IT IS IMPERA TIVE TO TAKE INTO CONSIDERATION ALL THE MATERIAL EVIDENCES THAT ARE PRODUCED BY THE ASSESSEE. IN OUR VIEW BOTH THE LETTER AND CERTIFICATE CITED A BOVE HAVE A BEARING ON THE ISSUE UNDER CONSIDERATION. HENCE WE ARE OF TH E VIEW THAT THE MATTER REQUIRES RE-EXAMINATION BY DULY CONSIDERING BOTH TH E MATERIALS CITED ABOVE. ACCORDINGLY WE SET ASIDE THE ORDER OF THE LEARNED C IT (A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFF ICER WITH A DIRECTION TO EXAMINE THE ISSUE AFRESH BY DULY CONSIDERING ALL TH E MATERIAL THAT MAY BE FURNISHED BY THE ASSESSEE INCLUDING BOTH THE MATERI ALS CITED ABOVE. ITA NO.184 OF 2009 GANGUMMALLA KEDAR SRINIVAS KAKINA DA PAGE 4 OF 4 NEEDLESS TO MENTION THE ASSESSEE SHOULD BE GIVEN NE CESSARY OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS TREA TED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 10 TH FEBRUARY 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE: 10-02-2011 COPY TO 1 SHRI GANGUMMALLA KEDAR SRINIVAS 11-2-16 SESHA SA I STREET RAMA RAO PETA KAKINADA 2 THE ASSTT. COMMISSIONER OF INCOME TAX CIRCLE-1 KA KINADA 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