Sri Medarametla Sivanarayana, Ongole v. The ITO, Ward-2, Ongole

ITA 263/VIZ/2010 | 2005-2006
Pronouncement Date: 08-03-2011 | Result: Partly Allowed

Appeal Details

RSA Number 26325314 RSA 2010
Bench Visakhapatnam
Appeal Number ITA 263/VIZ/2010
Duration Of Justice 10 month(s) 12 day(s)
Appellant Sri Medarametla Sivanarayana, Ongole
Respondent The ITO, Ward-2, Ongole
Appeal Type Income Tax Appeal
Pronouncement Date 08-03-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 08-03-2011
Date Of Final Hearing 02-02-2011
Next Hearing Date 02-02-2011
Assessment Year 2005-2006
Appeal Filed On 26-04-2010
Judgment Text
ITA 263 OF 10 MS NARAYANA ONGOLE IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO. 263 /VIZAG/ 20 10 ASSESSMENT YEAR : 2005 - 06 MEDARAMETLA SIVANA RAYANA ONGOLE VS. ITO WARD - 2 ONGOLE (APPELLANT) (RESPONDENT) PAN NO.ABDPN 5507F APPELLANT BY: SHRI G.V.N. HARI CA RESPONDENT BY: SHRI D.S. SUNDER SINGH DR ORDER PER SHRI S.K. YADAV JUDICIAL MEMBER:- THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A). DURING THE COURSE OF PENDENCY OF THE APPEA L THE ASSESSEE HAS FILED THE REVISED GROUNDS OF APPEAL WHICH ARE TAKEN ON RE CORD. AS PER THE REVISED GROUNDS OF APPEAL THE ASSESSEE HAS ASSAILED THE OR DER OF THE CIT(A) MAINLY ON THREE GROUNDS. THE FIRST GROUND RELATE TO THE D ISALLOWANCE OF CERTAIN EXPENDITURE WHICH WAS RAISED ON THE BASIS OF SELF-M ADE VOUCHERS. THE FACTS BORNE OUT FROM THE RECORD IN THIS REGARD ARE THAT T HE ASSESSEE HAS CLAIMED EXPENDITURES UNDER DIFFERENT HEADS I.E. LORRY HIRES CARRIAGE OUTWARDS SALARIES WATER SUPPLY OPERATOR CHARGES FOR CUTTIN G MUTTA COOLIE MARKING FEES CARPENTER LOADING POLISH OIL REPAIRS SEGME NT WELDING CAR MAINTENANCE ETC. THESE EXPENDITURES WERE NOT SUPPO RTED BY THE PROPER BILLS AND VOUCHERS. THE ASSESSING OFFICER HAVING NOTED THAT THE CLAIMS OF EXPENDITURES WERE MADE ON THE BASIS OF SELF-MADE VO UCHERS HAS DISALLOWED THE 20% OF THE TOTAL EXPENDITURE. 2. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT( A) AND CIT(A) RE- EXAMINED THE ISSUE AND ACCORDINGLY REDUCED THE PERC ENTAGE OF DISALLOWANCE TO 5% OF EXPENDITURE INCURRED UNDER THE HEADS OF L ORRY HIRE CHARGES CARRIAGE OUTWARDS SALARIES WATER SUPPLY MARKING FEES POLISH OIL SEGMENT WELDING AND CAR MAINTENANCE & TRAVELLING. THE DISA LLOWANCE UNDER THE HEAD ITA 263 OF 10 MS NARAYANA ONGOLE ` 2 OPERATOR CHARGES FOR CUTTING MUTTA COOLIE AND CARP ENTER LOADING WAS RESTRICTED TO 10%OF THE TOTAL EXPENDITURE BY THE CI T(A). WITH REGARD TO THE EXPENDITURE CLAIMED UNDER THE HEAD REPAIRS BILLS W ERE PLACED BEFORE THE CIT(A) AND CIT(A) ACCEPTED THE CLAIM OF THE ASSESSE E AND DELETED THE ADDITIONS. 3. AGGRIEVED WITH THE ORDER OF THE CIT(A) ASSESSEE HAS PREFERRED AN APPEAL BEFORE US WITH THE SUBMISSION THAT ASSESSEE HAS MAINTAINED PROPER DETAILS OF THE EXPENDITURE THEREFORE THE DISALLOW ANCE MADE BY CIT(A) IS NOT CALLED FOR. DURING THE COURSE OF HEARING IT WAS C ONFRONTED TO THE ASSESSEE WHETHER HE HAS CLAIMED THE EXPENDITURE ON THE BASIS OF SELF-MADE VOUCHERS. THE ANSWER IS IN AFFIRMATIVE. THEREFORE WE ARE OF THE VIEW THAT SINCE THE ASSESSEE HAS CLAIMED THE EXPENDITURE ON SELF-MADE V OUCHERS SOME DISALLOWANCE IS TO BE CALLED FOR AND THE CIT(A) HAS MADE A REASONABLE DISALLOWANCE UNDER ALL HEADS AND WE FIND NO INFIRMI TY THEREIN. THEREFORE WE CONFIRM THE ORDER OF THE CIT(A). 4. NEXT GROUND RELATE TO THE UNEXPLAINED CASH CREDI TS FOR WHICH ADDITIONS WERE MADE U/S 68 OF THE ACT. THE FACTS IN THIS REG ARD ARE THAT THE ASSESSEE HAS INTRODUCED THE CASH CREDITS IN ITS BOOKS OF ACC OUNTS IN THE NAME OF THE FOLLOWING PERSONS: A. I. SATYAVARDHAN 6 50 000/- B. M. SURESH REDDY 1 50 000/- C. D. HARNADH BABU 1 50 000/- D. M. SUDHEERA 55 000/- E. M. SUDHAKAR RAO 78 630/- F. N. VENKAIAH 40 000/- G. N. SATYANARAYANA 30 000/- H. SMT. RANGAMMA 35 000/- 5. BEFORE THE ASSESSING OFFICER ASSESSEE COULD NOT PRODUCE THE CONFIRMATION LETTERS AND THE CREDITWORTHINESS OF TH E CREDITORS. THE A.O. ACCORDINGLY TREATED THIS CASH CREDIT AS UNEXPLAINED AND MADE THE ADDITION U/S 68 OF THE ACT. THE ASSESSEE PREFERRED AN APPEAL BE FORE THE CIT(A) BUT DID NOT FIND FAVOUR WITH HIM. NOW THE ASSESSEE IS BEFO RE US WITH THE SUBMISSIONS THAT BEFORE THE ASSESSING OFFICER ASSESSEE COULD N OT FILE THE CONFIRMATION LETTERS OF THE ABOVE SAID CREDITORS FOR WANT OF TIM E BUT IT WAS PLACED BEFORE ITA 263 OF 10 MS NARAYANA ONGOLE ` 3 THE CIT(A). BUT HE DID NOT EXAMINE THE SAME AND CO NFIRMED THE ORDER OF THE ASSESSING OFFICER. THOUGH THE ASSESSEE HAS EXPLAIN ED THE SOURCES OF THESE LOANS GIVEN TO THE ASSESSEE IN THE HANDS OF CREDITO RS BUT IT WAS NOT APPRECIATED BY THE LOWER AUTHORITIES. HE HAS INVIT ED OUR ATTENTION TO THE CONFIRMATION LETTERS AND BANK STATEMENTS IN RESPECT OF I. SATYAVARDHAN M. SURESH REDDY D. HARNADH BABU M. SUDHAKAR RAO. WI TH REGARD TO THE REMAINING CASH CREDITORS NO CONFIRMATION WAS RATHE R FILED BEFORE US. 6. WE HAVE CAREFULLY EXAMINED THE CONFIRMATION LETT ERS AND THE BANK STATEMENTS FILED BEFORE US IN RESPECT OF I. SATYAVA RDHAN M. SURESH REDDY D. HARNADH BABU M. SUDHAKAR RAO AND WE ARE OF THE VIE W THAT SINCE THE ASSESSEE HAS PLACED DOCUMENTARY EVIDENCE WITH REGAR D TO THE GENUINENESS OF THE CREDITS AND CREDITWORTHINESS OF THE CREDITORS IT SHOULD HAVE BEEN EXAMINED BEFORE DISALLOWING THE CLAIM OF THE ASSESS EES. SINCE IT HAS NOT BEEN EXAMINED BY THE LOWER AUTHORITIES WE SET ASID E THE ORDER OF THE CIT(A) IN THIS REGARD AND RESTORE THE MATTER TO THE FILE O F THE A.O. WITH DIRECTION TO RE-EXAMINE THE GENUINENESS OF THE LOAN IN THE LIGHT OF EVIDENCE FILED BY THE ASSESSEES AFTER AFFORDING AN OPPORTUNITY OF BEING H EARD TO HIM. SO FAR AS REMAINING CASH CREDITS INTRODUCED IN THE NAME OF M. SUDHEERA N. VENKAIAH N. SATYANARAYANA & SMT. RANGAMMA EVEN NO EVIDENCE IS PLACED BEFORE US TO PROVE THE GENUINENESS OF THE LOAN AND THE CREDIT WORTHINESS OF THE CREDITORS. SINCE NOTHING HAS BEEN PLACED EVEN AT T HE SECOND APPELLATE STAGE WE FIND NO INFIRMITY IN THE ORDER OF THE LOWER AUTH ORITIES WHO HAS MADE THE ADDITION OF THE SAME U/S 68 AS UNEXPLAINED CASH CRE DIT. 7. GROUND NO.3 RELATE TO AN ADDITION OF RS.78 933/- IN RESPECT OF LOAN FROM B. SUBBA RAO. IN THIS REGARD IT WAS CONTENDE D THAT A.O. HAS MADE THE ADDITION OF THIS AMOUNT WITHOUT DISCUSSING ANYTHING IN HIS ORDER. WHEN THE ASSESSEE PRESENTED THE CONFIRMATION IN THIS REGARD BEFORE THE CIT(A) HE HAS NOT ACCEPTED THE SAME. IN SUPPORT OF HIS CONTENTIO N HE HAS INVITED OUR ATTENTION TO THE CONFIRMATION APPEARING AT PG.NO.28 OF THE COMPILATION OF THE ASSESSEES ALONG WITH THE STATEMENT OF FUNDS. SINCE THE ASSESSING OFFICER HAS MADE THE ADDITION WITHOUT VERIFYING THE FACTS AND T HE ADDITIONS WERE CONFIRMED BY THE CIT(A) WE ARE OF THE VIEW THAT TH IS ISSUE ALSO REQUIRES A ITA 263 OF 10 MS NARAYANA ONGOLE ` 4 PROPER VERIFICATION BY THE ASSESSING OFFICER IN THE LIGHT OF THE CONFIRMATION FILED BEFORE US AT PG.NO.28 OF THE COMPILATION OF T HE ASSESSEE AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEES. AC CORDINGLY WE SET ASIDE THE ORDER OF THE CIT(A) IN THIS REGARD AND RESTORE THE MATTER TO THE FILE OF THE A.O. WITH A DIRECTION TO RE-ADJUDICATE THE ISSUE AF RESH IN TERMS INDICATED ABOVE. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 8.3.2011 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM DATED 8 TH MARCH 2011 COPY TO 1 G.V.N. HARI & CO. OFF ICE NO.6 2 ND FLOOR DABBIRU MANSIONS 30 - 14 - 11 DABAGARDENS OPP. RAO AUTOMOBILES NEAR SARASWATHI PARK VISAKHAPATNAM-530 020. 2 ITO WARD - 2 ONGOLE. 3 THE CI T GUNTUR 4 THE CIT (A) GUNTUR 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM