The ITO, Ward-1(2)., Visakhapatnam v. Sri S Rama Krishna Reddy,, Visakhapatnam

ITA 386/VIZ/2007 | 2004-2005
Pronouncement Date: 22-01-2010 | Result: Partly Allowed

Appeal Details

RSA Number 38625314 RSA 2007
Assessee PAN ACJPR0631D
Bench Visakhapatnam
Appeal Number ITA 386/VIZ/2007
Duration Of Justice 2 year(s) 4 month(s) 22 day(s)
Appellant The ITO, Ward-1(2)., Visakhapatnam
Respondent Sri S Rama Krishna Reddy,, Visakhapatnam
Appeal Type Income Tax Appeal
Pronouncement Date 22-01-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 22-01-2010
Assessment Year 2004-2005
Appeal Filed On 31-08-2007
Judgment Text
PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO. 386/VIZAG/2007 ASSESSMENT YEAR: 2004-05 ITO WARD-1(2) VISAKHAPATNAM VS. SRI S. RAMA KRISHNA REDDY VISAKHAPATNAM (APPELLANT) (RESPONDENT) PAN NO. ACJPR 0631 D APPELLANT BY: SHRI SUBRATA SARKAR DR RESPONDENT BY: SHRI G.V.N. HARI CA ORDER PER SHRI B R BASKARAN ACCOUNTANT MEMBER : THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 22-06- 2007 PASSED BY THE LD CIT (A)-I VISAKHAPATNAM AND IT RELATES TO THE ASSESSMENT YEAR 2004-05. 2. THE GROUNDS RAISED BY THE REVENUE GIVES RISE TO A SINGLE ISSUE VIZ. WHETHER THE LD CIT (A) IS JUSTIFIED IN DELETING THE FOLLOWING ADDITIONS MADE U/S 68 OF THE INCOME-TAX ACT: S.NO NAME OF THE CREDITOR AMOUNT OF LOAN AMOUNT OF INTEREST PAID 1 Y. RAMADEVI RS.2 45 000/- RS. 27 000/- 2 SRI G. GOLLA REDDY RS.1 50 000/- RS. 7 500/- 3 M.N. VARAHALA REDDY RS.1 00 000/- RS. 5 000/- 4 Y. SUNITHA RS.2 55 000/- RS. 27 000/- 3. THE FACTS RELATING TO THE CASE ARE STATED IN BRI EF. THE ASSESSEE AN INDIVIDUAL DERIVES INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES. DURING THE COURSE OF SCRUTINY PROCEEDING THE ASSESSING OFFICER PAGE 2 OF 3 NOTICED THAT THE ASSESSEE HAS TAKEN UNSECURED LOANS AGGREGATING TO RS.9 30 000/- FROM 15 PERSONS. NOT SATISFIED WITH T HE EXPLANATION FURNISHED BY THE ASSESSEE THE AO ADDED THE ENTIRE AMOUNT OF RS. 9 30 000/- U/S 68 OF THE ACT AND ALSO DISALLOWED THE INTEREST PAID ON SUCH L OANS. IN THE APPEAL PREFERRED BY THE ASSESSEE THE LD CIT (A) GRANTED R ELIEF IN RESPECT OF 4 LOANS CITED ABOVE AGGREGATING TO RS.7 50 000/- AND CONFIR MED THE REMAINING ADDITIONS AMOUNTING TO RS.1 80 000/-. AGGRIEVED BY THE ORDER OF THE LD CIT (A) THE REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE RECORD. IN CASE OF LOAN OF RS.2 45 000/- RECEIVED FROM Y. RAMADEVI AND RS.2 55 000/- RECEIVED FROM Y.SUNITA IT IS NOTICED THAT BOTH THE CREDITOR S HAVE EXPLAINED THEIR SOURCES AS PAST SAVINGS AND AGRICULTURAL INCOME. IT IS PERT INENT TO NOTE THAT BOTH THE CREDITORS ARE NOT ASSESSED TO INCOME TAX. THOUGH THE CREDITOR NAMED Y. RAMADEVI FILED COPIES OF PATTADAR PASS BOOK EVIDENC ING THE HOLDING OF AGRICULTURAL LANDS YET SHE DID NOT FILE ANY DOCUME NT EVIDENCING THE EARNING OF AGRICULTURAL INCOME AND THE ACCUMULATION THEREOF. I N THE CASE OF THE CREDITOR NAMED Y. SUNITHA THE ASSESSEE HAS FILED ONLY A CON FIRMATION LETTER OBTAINED FROM HER. THE ASSESSEE DID NOT PRODUCE BOTH THE CRE DITORS BEFORE THE AO THOUGH HE WAS SPECIFICALLY ASKED TO PRODUCE THEM. IT IS WELL SETTLED THAT IN RESPECT OF CASH CREDITS THE ASSESSEE HAS TO PROVE THE THREE MAIN INGREDIENTS VIZ. THE IDENTIFY OF THE CREDITOR GENUINENESS OF THE TRANSACTION AND THE CREDIT WORTHINESS OF THE CREDITOR. IN THESE TWO CASES TH E ASSESSEE HAS PROVED THE IDENTITY OF THE CREDITORS. SINCE THE LOANS WERE OB TAINED BY WAY OF DEMAND DRAFTS THE GENUINENESS OF THE LOANS MAY ALSO BE TR EATED AS PROVED. HOWEVER IN OUR OPINION THE ASSESSEE HAS FAILED TO PROVE TH E CREDITWORTHINESS OF BOTH THE CREDITORS FOR THE REASONS STATED ABOVE. IN VIEW OF THE ABOVE WE REVERSE THE ORDER OF THE LD CIT (A) IN RESPECT OF THESE TWO CREDITORS AND CONFIRM THE ADDITIONS MADE BY THE ASSESSING OFFICER. 5. WITH RESPECT TO THE AMOUNT OF RS.1 50 000/- RECE IVED FROM SHRI G.GOLLA REDDY WE NOTICE THAT THE SAID CREDITOR WAS WORKING WITH THE ANDHRA UNIVERSITY COLLEGE OF SCIENCE AND HE HAS CONFIRMED THAT HE HAS ADVANCED THE PAGE 3 OF 3 LOAN TO THE ASSESSEE FROM OUT OF HIS PENSION BENEFI TS. IN SUPPORT OF SAID CONTENTIONS THE CREDITOR HAS FILED COPY OF BANK AC COUNT MAINTAINED WITH THE STATE BANK OF INDIA AND ALSO THE RECORDS RELATING TO HIS SERVICE WITH ANDHRA UNIVERSITY COLLEGE. SIMILARLY WITH REGARD TO RS.1. 00 LAKH RECEIVED FROM SHRI VARAHALA REDDY WE NOTICE THAT THE SAID CREDITOR WA S WORKING AS DY. COMMISSIONER OF LABOUR WITH THE LABOUR DEPARTMENT O F THE GOVT. OF ANDHRA PRADESH. HE HAS FILED COPIES OF SALARY CERTIFICATE AS WELL AS BANK ACCOUNT. IN VIEW OF THE ABOVE WE ARE OF THE OPINION THAT THE A SSESSEE HAS DISCHARGED THE PRIMARY ONUS PLACED UPON HIM IN RESPECT OF THESE TW O CREDITORS. ACCORDINGLY WE UPHOLD THE ORDER OF THE LD CIT (A) IN DELETING T HE ADDITION MADE IN RESPECT OF THESE TWO CREDITORS. 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 22-01-2010 SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM 22 ND JANUARY 2010. COPY TO 1 THE ITO WARD-1(2) VISAKHAPATNAM 2 SHRI S. RAMA KRISHNA REDDY D.NO.47-9-3 DWARAKANA GAR VISAKHAPATNAM 3 THE CIT VISAKHAPATNAM 4 THE CIT(A)-I VIJAYAWADA 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM