M/s Raghavendra Finance,, Rajahmundry v. The ITO, Ward-1., Rajahmundry

ITA 392/VIZ/2007 | 2004-2005
Pronouncement Date: 20-07-2010 | Result: Dismissed

Appeal Details

RSA Number 39225314 RSA 2007
Assessee PAN AAGFS8424F
Bench Visakhapatnam
Appeal Number ITA 392/VIZ/2007
Duration Of Justice 2 year(s) 10 month(s) 9 day(s)
Appellant M/s Raghavendra Finance,, Rajahmundry
Respondent The ITO, Ward-1., Rajahmundry
Appeal Type Income Tax Appeal
Pronouncement Date 20-07-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 20-07-2010
Assessment Year 2004-2005
Appeal Filed On 10-09-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO.397/VIZAG/2007 ASSESSMENT YEAR : 2004-05 ITO WARD-1 RAJAHMUNDRY M/S. RAGHAVENDRA FINANCE RAJAHMUNDRY (APPELLANT) VS. (RESPONDENT) PAN NO.AAGFS 8424F ITA NO.392/VIZAG/2007 ASSESSMENT YEAR : 2004-05 M/S. RAGHAVENDRA FINANCE RAJAHMUNDRY ITO WARD-1 RAJAHMUNDRY (APPELLANT) VS. (RESPONDENT) APPELLANT BY: SHRI D. MANOJ KUMAR DR RESPONDENT BY: SHRI G.V.N. HARI CA ORDER PER SHRI S.K. YADAV JUDICIAL MEMBER:- THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AS WELL AS THE REVENUE AGAINST THE ORDER OF THE CIT(A) PERTAINING TO THE A SSESSMENT YEAR 2004-05. DURING THE COURSE OF HEARING OF THE APPEAL THE REVE NUE HAS REVISED ITS GROUNDS OF APPEAL AND FILED A REVISED GROUNDS WHICH ARE ADM ITTED AND TAKEN ON RECORD. AS PER THE REVISED GROUNDS THE REVENUE HAS RAISED T HREE ISSUES. ONE IS WITH REGARD TO THE DELETION OF ADDITION MADE U/S 68 OF T HE I.T. ACT. THE SECOND IS WITH REGARD TO THE DELETION OF THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF BAD DEBT CLAIMED BY THE ASSESSEE. THE THIRD IS WIT H REGARD TO THE REDUCTION OF ADDITION FROM RS.75000 TO RS.25000/- MADE ON ACCOUN T OF DEFECTIVENESS IN VOUCHERS OF VARIOUS EXPENDITURE I.E. COMMISSION INC ENTIVES PRINTING STATIONERY SALARIES AND TELEPHONE EXPENSES. 2. THE ASSESSEE IN HIS APPEAL HAS CHALLENGED THE OR DER OF THE CIT(A) ON A SOLITARY GROUND THAT CIT(A) SHOULD HAVE DELETED THE ENTIRE ADDITIONS MADE BY THE A.O. TO THE INCOME RETURN. 2 3. THE BRIEF FACTS BORNE OUT WITH REGARD TO THE CON TROVERSIES RAISED IN THIS APPEAL ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF MONEY LENDING AND FINANCE. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS IT WAS NOTICED THAT ASSESSEE HAS INTRODUCED THE DEPOSITS OF RS.37 26 30 8/- DURING THE IMPUGNED FINANCIAL YEAR AND DEBITED THE CORRESPONDING INTERE ST ON THE ABOVE CREDITS. ASSESSEE WAS ASKED THROUGH VARIOUS NOTICES TO FURNI SH THE NAMES AND ADDRESSES OF THE SUNDRY CREDITORS INTRODUCED DURING THE YEAR AND CONFIRMATION LETTERS FROM THE CREDITORS AS AN EVIDENCE FOR DEPOSITS MADE BY T HEM. VARIOUS LETTERS DATED 21.7.2005 1.9.2005 28.10.2005 3.1.2006 5.10.200 6 AND 17.11.2006 WERE ISSUED TO THE ASSESSEE FOR PRODUCING THE AFORESAID INFORMATION. THE ASSESSEE FURNISHED A REPLY ON 24.11.2006 IN RESPONSE TO LETT ER DATED 17.11.2006 FURNISHING THE NAMES AND ADDRESSES OF THE CREDITORS . ON EXAMINATION OF THIS LIST IT WAS FOUND THAT CLEAR ADDRESSES OF THE CREDITORS WERE NOT FURNISHED AND WITHOUT COMPLETE ADDRESSES VERIFICATION COULD NOT BE DONE. SINCE THE ASSESSEE HAS NOT PRODUCED COMPLETE DETAILS OF THE CREDITORS NOTICE U/S 142(1) AND 143(2) ALONG WITH THE QUESTIONNAIRE DATED 30.11.2006 WERE ISSUED TO THE ASSESSEE CALLING FOR THE DETAILS OF THE COMPLETE ADDRESSES OF THE CREDIT ORS AND THE CAPITAL ACCOUNTS OF THE PARTNERS IN THEIR INDIVIDUAL BOOKS IN SUPPORT O F CAPITAL INTRODUCTION SHOWN BY THE FIRM. THE ASSESSEE HAS FURNISHED THE CONFIRMAT ION LETTERS AND THE ADDRESSES OF THE SOME OF THE CREDITORS. THE A.O. ALSO ISSUED NOTICES U/S 133(6) TO THE CREDITORS AS PER THE ADDRESSES GIVEN BY THE ASSESSE ES BUT THEY WERE NOT RESPONDED. THE A.O. ACCORDINGLY PREPARED TWO LISTS ONE WITH REGARD TO THOSE CREDITORS WHOSE CONFIRMATION LETTERS AND THE ADDRES SES ARE NOT FURNISHED AND THE OTHER FOR THOSE CREDITORS WITH REGARD TO WHOM EITHE R THE CONFIRMATION LETTERS OR ADDRESSES WERE FURNISHED BEFORE THE A.O. SINCE THE ASSESSEE DID NOT FURNISH THE CONFIRMATION LETTERS AND THE ADDRESSES DESPITE VARI OUS OPPORTUNITIES THE ASSESSING OFFICER TREATED THE ENTIRE CREDITORS OF F IRST LIST AS UNEXPLAINED CASH CREDIT AND MADE AN ADDITION OF RS.13 68 675/- AND A LSO DISALLOWED THE CORRESPONDING INTEREST DEBITED TO THE P&L ACCOUNT. ACCORDINGLY TOTAL DISALLOWANCE INCLUDING INTEREST COMES TO RS.15 23 6 20/-. SO FAR AS THE SECOND LIST IS CONCERNED THE ASSESSING OFFICER HAS ALSO E XAMINED THE EVIDENCE FILED BY THE ASSESSEE BUT HE WAS NOT CONVINCED WITH IT AND H E TREATED THAT ENTIRE CREDIT AS UNEXPLAINED AND MADE THE ADDITION OF RS.15 25 00 0/- U/S 68 OF THE I.T. ACT. 3 THE CORRESPONDING INTEREST OF RS.81 078/- DEBITED T O THE P&L ACCOUNT WAS ALSO DISALLOWED BY THE A.O. THUS THE TOTAL ADDITION WAS MADE OF RS.16 06 078/-. IN ORDER TO UNDERSTAND THE NATURE OF EVIDENCE FILED BY THE ASSESSEE TO PROVE THE IDENTITY AND THE CREDITWORTHINESS OF THE CREDITORS AND ALSO GENUINENESS OF THE TRANSACTIONS WE FEEL IT PROPER TO EXTRACT BOTH THE LISTS AS UNDER: LIST OF DEPOSITS CLAIMED BY THE ASSESSEE FOR WHICH NO CONFIRMATION LETTERS ADDRESSES ARE FURNISHED BEFORE THIS OFFICE DU RING THE COURSE OF ASSESSMENT PROCEEDINGS AND DISBELIEVED SL.NO. NAME OF THE CREDITOR DATE OF DEPOSIT AMOUNT (RS.) 1. GANESETTY KRISHNA RAO 24.05.2003 18 000 2. GANESETTY ANASUYA 24.05.2003 18 000 3. BANDARU KRISHNA VENI 05.06.2003 10 000 4. BELUGUDI KANTHA RAO 24.05.2003 8 000 5. BANDI RANI RATNAPRABHA 09.04.2003 50 000 6. EATHAKOTA RAMU 09.04.2003 1 00 000 7. EETHAKOTA VEERRAJU 12.06.2003 50 000 8. GANISETTY RAMALINGAM 24.05.2003 14 000 9. GRANDHI MOUNIKA 02.04.2003 25 000 10. EETHAKOTA RAMU 12.06.2003 50 000 11. VUYYURI LOVAKUMARI 07.01.2004 12 000 12. M. RAMALINGESWARA RAO 16.02.2004 16 000 13. PARASA UDAYA BHASKAR KUMAR 30.04.2003 7 000 14. SEELAMANTULA NAGAMANI 26.05.2003 10 000 15. VUYYURI BALASUBRAHMANYAM 22.04.2003 15 000 16. VUYYURI SAVITRI 22.04.2003 15 000 17. YELUBOLU SUVARNA 11.02.2004 15 000 18. Y. GOVARDHANA VEERENDRA PRAKASH 11.02.2004 5 00 0 19. AARIGELLA SWARUPA RANI 27.12.2003 40 000 20. GADDE MALAKONDAYYA 07.05.2003 50 000 21. SEELAMANTULU KOTESWARA RAO 26.05.2003 15 000 22. TAIDCHARLA RUKMINI 07.01.2004 25 000 23. KHANDAVALLI SUBBALAKSHMI 05.08.2003 1 00 000 24. KHANDAVALLI NAGESWARA RAO 16.07.2003 99 800 25. KOKKIRALA SEETHAMAHALAKSHMI 04.12.2003 75 000 26. KOKKIRALA SRINIVAS 04.12.2003 70 000 27. YELUBOLU RATNAM 12.06.2003 16 000 28. PALLA SAROJINI 19.04.2003 26 000 14.05.2003 14 000 12.06.2003 15 000 17.09.2003 90 000 23.10.2003 15 000 29. P. AMMAJI 11.02.2004 1 00 000 30. PARAS PADMA RAJA RAO 09.10.2003 30 000 31. P.V. CHALAYAMMA 11.02.2004 1 00 000 TOTAL 13 68 675 4 LIST OF DEPOSITORS CLAIMED BY THE ASSESSEE FOR WHICH EITHER CONFIRMATION LETTERS OR ADDRESSES ARE FURNISHED BUT DIS BELIEVED AS THE CREDITORS HAVING NO MEANS OR SOURCE OF INCOME TO ADVANCE HUGE SUMS OF MONEY SL.NO. NAME OF THE CREDITOR DATE OF DEPOSIT AMOUNT REMARKS AKULA GANGADEVI 08.01.2004 12 000 1. PRINYANKA 21.01.2004 14 000 CONFIRMATION LETTER NOT PRODUCED 2. BATCHU LAKSHMIKANTAM 28.01.2004 1 00 000 AGRICULTURAL INCOME FROM 9 ACRES. NO VALID SOURCE OF INCOME AND EVIDENCE FOR THE INCOME OR VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 3. GUBBA V.V. NAGALAKSHMI 21.01.2004 50 000 CONFIRMATION LETTER NOT PRODUCED. NO REPLY TO THE NOTICE U/S 133(6) NOTICE SERVED. 4. CHITTALA DURGA 26.05.2003 15 000 CONFIRMATION LETTER NOT PRODUCED. 5. G. VIJAYAKUMARI 12.06.2003 60 000 OUT OF THE AGRICULTURAL INCOME FROM 0.63 ACRES AND GIFTS FROM MARRIAGE. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 6. GUBBA L.S. DEVI 22.01.2004 50 000 CONFIRMATION LETTER NOT PRODUCED. NO REPLY TO THE NOTICE U/S 133(6) NOTICE SERVED. 7. K. JAYARAJYALAKSHMI 16.02.2004 16 000 OUT OF MONEY RECEIVED AS SREEDHAN. NO EVIDENCE PRODUCED. FROM THE SAME FAMILY 2 MEMBERS CLAIMED TO HAVE DEPOSITED MONEY BUT NO FIXED SOURCE OF INCOME IS SHOWN. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 8. KODATI LAKSHMIKANTHAM 02.07.2003 01.10.2003 25 000 25 000 STATES THAT OUT OF THE RECEIPTS FROM HUSBAND AND RENTS. EVIDENCE NOT PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. NO REPLY TO THE NOTICE U/S 133(6) NOTICE SERVED. 9. KOLLI RATNAMANKYAM 06.02.2004 75 000 STATES THAT THE AMOUNT RECEIVED FROM SALE OF GOLD ORNAMENTS IS DEPOSITED IN THE FIRM. NO EVIDENCE IN 5 THE FORM OF BILL IS ENCLOSED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. NO REPLY TO THE NOTICE U/S 133(6) NOTICE SERVED. 10. VOGGU LEELAVATHI 27.08.2003 23 000 STATES THAT SHE HAS DEPOSITED THE MONEY OUT OF THE GIFTS RECEIVED DURING MARRIAGE. NO PROOF IS ENCLOSED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. NO REPLY TO THE NOTICE U/S 133(6) NOTICE SERVED. 11. K. PRIYANKA 16.02.2004 16 000 RECEIPTS FROM RELATIVES. NO PROOF FURNISHED. FROM THE SAME FAMILY 2 MEMBERS CLAIMED TO HAVE DEPOSITED MONEY BUT NO FIXED SOURCE OF INCOME IS SHOWN. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 12. K. SUBRAHMANYESWARA RAO 16.02.2004 16 000 RECEIPTS FROM PRIVATE JOB. NO EVIDENCE IN SUPPORT OF EMPLOYMENT PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 13. M. SUBBALAKSHMI 05.11.2003 15 000 AGRICULTURAL INCOME. NO PROOF FURNISHED. THE ASSESSEE STATES TO HAVE RECEIVED THE MONEY IN THE FORM OF CHEQUE. BUT CREDITOR DOES NOT HAVE ANY BANK ACCOUNT. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 14. PANDIRI HARIKRISHNA PRASAD 18.06.2003 70 000 OUT OF AGRICULTURAL INCOME FROM 1.43 ACRES. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 15. NAKKA SEETHA RAMAYYA 07.04.2003 18 000 STATES THAT HE IS A GOLDSMITH. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 16. NAKKA VENKATA RAM KUMAR 07.04.2003 18 000 OUT OF PRIVATE SALARY. NO EVIDENCE IN SUPPORT OF EMPLOYMENT/INCOME 6 PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 17. NEMANI CHANTI 12.09.2003 21.02.2004 50 000 25 000 GIFTS FROM MARRIAGE. NO PROOF OF JOB IN MARGADARSI CHIT FUND. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 18. PANDA BHAVANI 25.06.2003 40 000 OUT OF THE GIFTS RECEIVED FROM MARRIAGE. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 19. NAKKA LAKSHMI NARASIMHAM 07.04.2003 14 000 OUT OF RENTS MONEY FROM HUSBAND. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 20. NAKKA JAYA RAM 07.04.2003 18 000 OUT OF TUITIONS. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 21. PANDIRI LAKSHMINARAYANA 18.06.2003 80 000 OUT OF AGRICULTURAL INCOME FROM 1.96 ACRES. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 22. PANDIRI PARVATHI 18.06.2003 70 000 OUT OF AGRICULTURAL INCOME FROM 2.40 ACRES. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 23. PANDIRI SATYANARAYANA 18.06.2003 70 000 OUT OF AGRICULTURAL INCOME FROM 1.43 ACRES. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 24. PAPISETTY SURYAKANTHAM 30.08.2003 4 000 OUT OF RECEIPTS FROM THE SONS FAMILY. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 7 25. NAKKA VENKATA ANURADHA 07.04.2003 18 000 OUT OF MARRIAGE GIFTS. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 26. P. RAJYALAKSHMI 05.11.2003 16 000 CLAIMS AS WORKING AS TEACHER. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. THE CREDITOR CLAIMS TO HAVE MADE CHEQUE PAYMENT WITHOUT HAVING BANK ACCOUNT. 27. YELUBOLU LALITHA KUMARI 03.01.2004 30 000 PRODUCED. CLAIMS TO HAVE GIVEN CHEQUES WITHOUT HAVING BANK ACCOUNT. OUT OF THE RECEIPTS FROM HUSBAND. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. NO REPLY TO THE NOTICE U/S 133(6) NOTICE SERVED. 28. YELUBOLU SUBBALAKSHMI 03.01.2004 35 000 NO REPLY TO THE NOTICE U/S 133(6) NOTICE SERVED. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 29. YELUBOLU VEERABHADRA RAO 03.01.2004 35 000 NOT PRODUCED. OUT OF LAND SALE BUT NO PROOF ENCLOSED. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 30. DODDI PADMAVATHI 24.11.2003 18 000 EMBROIDERY. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 31. KAKI LAVANYA 24.11.2003 18 000 EMBROIDERY. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 32. CHENAMSETTY ANJANEYULU 07.01.2004 16.02.2004 35 000 10 000 AGRICULTURAL INCOME. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS 8 NOT PRODUCED. 33. VIRIGINENI NAGAMANI 28.01.2004 20 000 OUT OF THE GIFTS FROM MARRIAGE. NO PROOF ENCLOSED. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 34. VOGGU SUBBAYAMMA 31.12.2003 14 000 PRODUCED. NO CORRELATION WITH THE FACTS. OUT OF SREEDHAN & GIFTS. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. NO REPLY TO THE NOTICE U/S 133(6) NOTICE SERVED. 35. KOLLI JAYANAGALAKSHMI 29.07.2003 1 00 000 FROM THE AMOUNT RECEIVED FROM M/S. PADMA SAI FINANCE. NO PROOF ENCLOSED. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 36. KOKKIRALA GANDHI 04.12.2003 75 000 STATES THAT HE HAS INVESTED THE AMOUNT FROM EARNINGS OF TAILORING & RENT. NOT AN I.T. ASSESSEE. NO BANK ACCOUNT. NO EVIDENCE IN SUPPORT OF INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. NO REPLY TO THE NOTICE U/S 133(6) NOTICE SERVED. 37. TAILAM SARALA 25.06.2003 50 000 DOES NOT CONTAIN EVEN THE AMOUNT OF ADVANCE. THE AMOUNT OF ADVANCE IS LEFT BLANK AND SIGNED. NO EVIDENCE IN SUPPORT INCOME PRODUCED. VOUCHER IN SUPPORT OF THE DEPOSIT IS NOT PRODUCED. 38. INDANA SEETHAMAHALAKSHMI 02.01.2004 50 000 NO CONFIRMATION LETTER PRODUCED. NO REPLY TO THE NOTICE U/S 133(6) NOTICE SERVED. TOTAL 15 25 000 9 4. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT( A) WITH THE SUBMISSION THAT THE ASSESSING OFFICER HAS MADE THE ADDITIONS WITHOUT AFFORDING PROPER OPPORTUNITY BEING HEARD TO THE ASS ESSEE AS HE HAS COLLECTED THE EVIDENCE TO PROVE THE CREDITWORTHINESS OF THE C REDITORS BUT IT COULD NOT BE FILED BEFORE THE A.O. DUE TO THE PAUCITY OF TIME. THE CIT(A) RE-EXAMINED THE ISSUE AND HAS CONFIRMED THE ADDITIONS OF THOSE CRED ITORS WITH REGARD TO WHOM NO CONFIRMATION LETTERS OR THE ADDRESSES WERE FILED BY THE ASSESSEE. FROM THE LIST NO.1 HE HOWEVER EXAMINED THE CREDITS AT SL.NO .23&24 INTRODUCED IN THE NAME OF SMT. KHANDAVALLI SUBBA LAKSHMI AND SHRI KHA NDAVALLI NAGESWARA RAO AND NOTICED THAT WITH REGARD TO THESE CASH CRED ITS THE ASSESSEE HAS FILED THE CONFIRMATION LETTERS BUT THEY WERE INCLUDED IN THE FIRST LIST ERRONEOUSLY. THE CIT ACCORDINGLY REDUCED THIS CREDIT INTRODUCED BY THESE TWO CREDITORS I.E. OF RS.2 49 675/- AND CONFIRMED THE ADDITION OF THE BALANCE AMOUNT OF RS.11 19 000/- AND HE HAS ALSO DIRECTED THE A.O. TO RECALCULATE THE INTEREST @ 1.75% P.M. FROM THE DATE OF VARIOUS DEPOSITS. THIS ADDITION IS CHALLENGED BY THE ASSESSEE BEFORE THE TRIBUNAL THROUGH HIS APPEAL . WITH REGARD TO THE SECOND LIST OF THOSE CREDITORS WITH RESPECT TO WHOM THE CONFIRMATION LETTERS OR THE ADDRESSES WERE FILED BEFORE THE A.O. THE CIT(A ) HAS OBSERVED THAT SINCE THE ASSESSEE HAS FILED EITHER THE CONFIRMATION LETT ERS OR THE ADDRESSES HE HAS DISCHARGED THE PRIMARY ONUS WHICH LAY UPON IT AND I T IS FOR THE REVENUE TO BRING SOMETHING ON RECORD TO DISPUTE THE GENUINENES S OF THE CASH CREDITS. HE ACCORDINGLY DELETED THE ADDITION OF RS.15 25 000/- ALONG WITH CORRESPONDING INTEREST OF RS.81 078/-. AGAINST THIS DELETION RE VENUE IS ALSO IN APPEAL BEFORE THE TRIBUNAL. 5. DURING THE COURSE OF HEARING OF THE APPEAL THE LD. D.R. HAS INVITED OUR ATTENTION TO THE VARIOUS NOTICES ISSUED BY THE ASSESSING OFFICER STARTING FROM 21.7.2005 IN SUPPORT OF HIS CONTENTION THAT T HE ASSESSEE WAS REPEATEDLY ASKED TO FURNISH THE LIST OF CREDITORS W ITH NAME AND ADDRESSES BUT IT WAS NOT FURNISHED BY THE ASSESSEE. VIDE LETTER DATED 17.11.2006 ASSESSEE WAS FURTHER ASKED TO FURNISH THE DETAILS OF THE SUN DRY CREDITORS ALONG WITH THEIR TELEPHONE NUMBERS ON OR BEFORE 24.11.2006 AND NON-FURNISHING OF THE ABOVE INFORMATION WILL BE PRESUMED THAT SUNDRY CRED ITORS WERE BOGUS AND ASSESSMENT WOULD BE COMPLETED ACCORDINGLY. NOTICES U/S 142(1)/143(2) WERE 10 ALSO SERVED UPON THE ASSESSEE ASKING HIM TO FURNISH THE COMPLETE ADDRESSES OF THE CREDITORS. BUT ASSESSEE HAS NOT FURNISHED T HE SAME BEFORE THE A.O. ALL THESE NOTICES ARE AVAILABLE AT PG.NO.1 TO 9 OF THE COMPILATION OF THE REVENUE. THE FIRST TIME SOME INFORMATION WITH REGARD TO THE ADDRESSES OF THE CREDITORS WERE FILED BY THE ASSESSEE ON 19.12.2006. ON THE B ASIS OF THAT THE ASSESSING OFFICER HAS ISSUED A NOTICE U/S 133(6) TO VARIOUS C REDITORS ASKING THEM TO FURNISH THEIR IDENTITY PROVE SOURCE OF INCOME AND EVIDENCE I.E. BANK ACCOUNT DETAILS OF AMOUNT DEPOSITED AND COPY OF THE PATTADA R PASS BOOK IF ANY. BUT THIS INFORMATION WAS NOT FURNISHED BEFORE THE ASSES SING OFFICER AND HE WAS FORCED TO CONCLUDE THE ASSESSMENT ON THE BASIS OF T HE MATERIAL AVAILABLE ON RECORD. THE LD. D.R. FURTHER CONTENDED THAT WHATEV ER INFORMATIONS WAS FILED WITH REGARD TO THE CREDITORS SHOWN IN IIND LIST WER E ALSO NOT COMPLETE IN AS MUCH AS FROM THE EVIDENCE FILED BEFORE THE A.O THE CREDITWORTHINESS AND THE IDENTITY OF THE CREDITORS ARE NOT PROVED BESIDES GE NUINENESS OF TRANSACTIONS. SINCE IT WAS FILED DURING THE SECOND HALF OF THE DE CEMBER AND ASSESSING OFFICER WAS TO CONCLUDE THE ASSESSMENT BEFORE 31 ST DECEMBER 2006 THE A.O. COULD NOT HAVE SUFFICIENT TIME TO MAKE FURTHER VERI FICATION WITH REGARD TO THE EVIDENCE FILED BY THE ASSESSEES. THIS INCOMPLETE E VIDENCE WAS TAKEN INTO ACCOUNT BY THE CIT(A) WHILE DELETING THE ADDITIONS WITHOUT VERIFYING THE CORRECTNESS EITHER BY MAKING ANY INQUIRY BY HIMSELF OR BY CALLING A REMAND REPORT. SINCE THE INCOMPLETE EVIDENCE FURNISHED BY THE ASSESSEES AT THE END OF THE ASSESSMENT PROCEEDINGS IT SHOULD NOT HAVE B EEN ACCEPTED BY THE CIT(A) WITHOUT MAKING A PROPER VERIFICATION OF IT. THE LD. D.R. HAS ALSO POINTED OUT THAT THE VARIOUS CREDITS IN SECOND LIST WITH REGARD TO WHOM EVIDENCES WERE NOT FILED TO PROVE THE CREDITWORTHIN ESS OF THE CREDITORS WERE ACCEPTED BY THE CIT(A) BLINDLY. THE LD. D.R. THERE FORE CONTENDED THAT CIT(A)S ORDER DESERVES TO BE SET ASIDE. WITH REGA RD TO THE FIRST LIST THE LD. D.R. PLACED A RELIANCE UPON THE ORDER OF THE A.O. A ND THE CIT(A). 6. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HA ND HAS CONTENDED THAT HE HAS FILED ALL RELEVANT EVIDENCE WHICH IS AV AILABLE WITH HIM BEFORE THE ASSESSING OFFICER. IF THE ASSESSING OFFICER HAS ANY DOUBT HE SHOULD HAVE MADE A NECESSARY INVESTIGATION BEFORE TREATING THIS CREDIT AS UNEXPLAINED. BY FILING THE EVIDENCE IN RESPONSE TO THE NOTICES ISSU ED BY THE A.O. THE ASSESSEE 11 HAD DISCHARGED ITS PRIMARY ONUS TO PROVE THE GENUIN ENESS OF THE TRANSACTIONS AND THE CREDITWORTHINESS OF THE CREDITORS AND IT SH IFTS UPON THE REVENUE AND THE REVENUE IS REQUIRED TO DISPROVE THE CONTENTIONS OF THE ASSESSEES BEFORE TREATING THIS CREDIT AS UNEXPLAINED. 7. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CA REFUL PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES AND DOCUMENTS PLACE D ON RECORD WE FIND THAT THE ASSESSING OFFICER HAS STARTED THE ASSESSMENT PR OCEEDINGS AS EARLY AS 21.7.2005 ABOUT 1 YEARS BEFORE THE COMPLETION OF THE ASSESSMENT. IN THE FIRST NOTICE ISSUED UNDER SECTION 142(1) ON 21.7.20 05 THE A.O. HAS ASKED THE ASSESSEE TO FURNISH THE DETAILS OF UNSECURED LOANS WITH NAMES AND ADDRESSES INTRODUCED DURING THE YEAR IF ANY BESIDES THE CRE DITORS AND NAMES OF THE PERSONS TO WHOM THE PAYMENT IS MADE. THEREAFTER A NOTHER NOTICE WAS ISSUED ON 21.9.2006 ASKING THE ASSESSEE TO FURNISH THE NAMES AND ADDRESSES OF THE SUNDRY CREDITORS ALONG WITH THE IDENTITY PRO OF AND UNSECURED LOANS. A REMINDER WAS FURTHER ISSUED ON 17.10.2006. THEREAF TER ASSESSEE WAS ASKED REPEATEDLY BY THE A.O. THROUGH NOTICE U/S 142 AND T HE LETTERS DATED 17.11.2006 TO FURNISH THE LIST OF CREDITORS THE NA MES AND ADDRESSES WITHIN A WEEK. THROUGH THIS LETTER DATED 17.11.2006 THE AS SESSEE WAS WARNED THAT IF HE FAILED TO FURNISH THE TRACEABLE DETAILS OF THE S UNDRY CREDITORS WITH COMPLETE ADDRESSES IT WOULD BE PRESUMED THAT SUNDRY CREDITO RS ARE BOGUS AND ASSESSMENT WOULD BE COMPLETED ACCORDINGLY. THIS LE TTER IS FOLLOWED BY NOTICE U/S 142(1) AND 143(2). IN RESPONSE TO THIS NOTICE THE ASSESSEE HAS FURNISHED THE ADDRESSES OF THE CERTAIN CREDITORS WI TH REGARD TO WHICH DEFECTS WERE POINTED OUT BY THE A.O. ON 13.12.2006. FROM A CAREFUL PERUSAL OF THESE NOTICES AND THE CORRESPONDENCE EXCHANGE WE FIND TH AT ASSESSEE HAS BEEN ASKED REPEATEDLY BY THE ASSESSING OFFICER TO FURNIS H THE LIST OF CREDITORS AND THEIR DETAILS AND PROOF OF IDENTITY. INITIALLY IT IS AVOIDED BY THE ASSESSEE AND LATER-ON HE HAS FILED THE DETAILS BUT IT WAS NOT CO MPLETE. THE ASSESSING OFFICER HAS ALSO ISSUED THE NOTICES U/S 133(6) TO T HOSE CREDITORS WHOSE ADDRESSES WERE FURNISHED BUT THESE CREDITORS DID NO T COME FORWARD TO ACKNOWLEDGE THE CREDITS. SINCE THE ASSESSMENT IS G OING TO BE BARRED ON 31.12.2006 ASSESSING OFFICER HAS CONCLUDED THE ASS ESSMENT PROCEEDINGS AND HE HAS PREPARED THE TWO LISTS ONE IS WITH REGARD T O THOSE CREDITORS WITH 12 REGARD TO WHICH NO EVIDENCE WAS FILED IN THE SHAPE OF CONFIRMATION LETTER OR ADDRESSES AND THE SECOND IS WITH REGARD TO THOSE CR EDITORS WITH RESPECT TO WHOM EITHER CONFIRMATIONS OR ADDRESSES WERE FURNISH ED. WITH RESPECT TO THE FIRST LIST WITH REGARD TO WHICH NOTHING WAS FURNISH ED TO THE A.O. NOR BEFORE THE CIT(A) AND NOR BEFORE US THE CIT(A) HAS CONFIR MED THE ADDITION OF RS.11 99 000/- APPEARING IN THE FIRST LIST AS UNEXP LAINED CREDIT ON THE GROUND THAT ASSESSEE COULD NOT PROVE THE IDENTITY AND CRED ITWORTHINESS OF CREDITORS AND ALSO GENUINENESS OF TRANSACTIONS. SINCE NOTHIN G IS PLACED BEFORE US EXCEPT THE ORAL SUBMISSIONS WE FIND OURSELVES IN A GREEMENT WITH THE FINDING OF THE CIT(A) THAT THESE CREDITS ARE UNEXPLAINED AN D DESERVES TO BE CONFIRMED. WE ACCORDINGLY CONFIRM THIS ADDITION. 8. SO FAR AS THE CREDITS INTRODUCED IN THE NAME OF THE CREDITORS OF THE SECOND LIST AND THE TWO PERSONS SMT. KHANDAVALLI SU BBA LAKSHMI AND SHRI KHANDAVALLI NAGESWARA RAO WHOSE NAMES WERE WRONGLY INSERTED IN THE FIRST LIST AT SL.NO.23&24 WE ARE OF THE VIEW THAT WITH R ESPECT TO THESE CREDITORS ASSESSEE HAS FILED SOME EVIDENCE AT THE END OF THE ASSESSMENT PROCEEDINGS. THOUGH THE ASSESSING OFFICER HAS MADE ITS EFFORTS T O VERIFY THEIR GENUINENESS BY ISSUING A SUMMONS BUT IT WAS TOO LATE TO CONCLUD E THE ENQUIRY WITHIN THE LIMITED PERIOD AS THE ASSESSMENT IS GOING TO BE BAR RED ON 31 ST DECEMBER 2006. WE THEREFORE OF THE VIEW THAT EVIDENCE FILED BY THE ASSESSEE WAS NOT PROPERLY INQUIRED INTO BY THE A.O. THE CIT(A) HAS ACCEPTED THE EVIDENCE FILED BY THE ASSESSEES AND TREATED THE ENTIRE CASH CREDIT AS GENUINE WITHOUT MAKING ANY VERIFICATION. IT IS NOT OUT OF PLACE TO MENTION HERE THAT UNDER SECOND LIST THE CREDIT INTRODUCED IS BETWEEN RS.12 000/- TO RS.1 00 000/- AT DIFFERENT POINT OF TIME THAT TOO ALL IN CASH. ASSE SSING OFFICER HAS GIVEN REMARK IN THE LIST AND FROM PERUSAL OF THE REMARK IT APPEA RS TO US THAT STATEMENT FURNISHED BY THE CREDITORS WITH REGARD TO THE AVAIL ABILITY OF CASH REQUIRES A PROPER INVESTIGATION OR ENQUIRY. WE THEREFORE OF THE CONSIDERED OPINION THAT BEFORE ACCEPTING THE CLAIM THE CIT(A) OUGHT TO HAV E EXAMINED THE VERACITY OF THE STATEMENT OR THE EXPLANATIONS BY MAKING INDE PENDENT INQUIRY EITHER BY HIMSELF OR THROUGH THE ASSESSING OFFICER BEFORE DEL ETING THE ADDITIONS. THE CIT(A) WITHOUT MAKING ANY EFFORT TO INVESTIGATE IT HAS ACCEPTED THE EXPLANATION TO BE GENUINE AND DELETED THE ADDITIONS . WE DO NOT AGREE WITH 13 THE ACTION OF THE CIT(A) AND WE THEREFORE SET ASIDE HIS ORDER AND RESTORE THIS ISSUE OF ADDITION OF RS.15 25 000/- DESCRIBED IN SE COND LIST TO THE FILE OF THE A.O. FOR A PROPER EXAMINATION/ENQUIRY OF THE EXPLAN ATIONS FURNISHED BY THE ASSESSEES OR THE CASH CREDITORS. WITH REGARD TO TH E OTHER CREDITS I.E. SMT. KHANDAVALLI SUBBA LAKSHMI AND SHRI KHANDAVALLI NAGE SWARA RAO WE FIND THAT THE CREDIT INTRODUCED AT RS.1 00 000/- IN THE NAME OF SMT. K. KHANDAVALLI SUBBA LAKSHMI AND RS.99 800/- & RS.49 875/- IN THE NAME OF SHRI KHANDAVALLI NAGESWARA RAO WAS ALSO ACCEPTED BY THE CIT(A) WITHOUT VERIFYING THE EVIDENCE FILED BY THE ASSESSEE. WE T HEREFORE OF THE VIEW THAT THIS CREDIT ALSO REQUIRES A PROPER ADJUDICATION BY THE A.O. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) IN THIS REGARD AND RE STORE THE MATTER TO THE FILE OF THE A.O. WITH THE DIRECTION TO RE-ADJUDICATE IT AFRESH AFTER MAKING NECESSARY INVESTIGATIONS OR VERIFICATIONS. 9. NEXT GROUND RAISED IN THE REVENUES APPEAL IS WI TH REGARD TO THE DISALLOWANCE OF DEBT OF RS.1 15 610/-. IN THIS REG ARD WE FIND THAT THE ASSESSEE HAS CLAIMED THIS DEBT AS A BAD DEBT BY WRI TING IT OFF IN ITS BOOKS OF ACCOUNTS. ASSESSING OFFICER DISALLOWED THE SAME ON THE GROUND THAT ASSESSEE HAS NOT FILED ANY COMPLAINT AGAINST THE DEBTOR NOR DID HE PROVE THAT THIS DEBT HAS BECOME BAD. THIS ISSUE IS COVERED BY THE JUDGE MENT OF THE APEX COURT IN THE CASE OF TRF LTD. VS. CIT 323 ITR 397 IN WHICH I T HAS BEEN HELD THAT AFTER THE AMENDMENT WRITING OFF A DEBT AS A BAD DEBT IS SUFFICIENT AND THE ASSESSEE IS NOT REQUIRED TO PROVE THAT THE DEBT HAS BECOME BAD. WE THEREFORE OF THE VIEW THAT CIT(A) HAS RIGHTLY DELET ED THE ADDITIONS AND WE FIND NO INFIRMITY THEREIN. WE ACCORDINGLY CONFIRM THE ORDER OF THE CIT(A) IN THIS REGARD. 10. ONE MORE GROUND IS ALSO RAISED IN THE REVENUES APPEAL THAT CIT(A) HAS ERRED IN REDUCING THE DISALLOWANCE FROM RS.7500 0/- TO RS.50000/- MADE ON ACCOUNT OF DEFECTIVENESS OF VOUCHING VARIOUS ITE M OF EXPENDITURES. IN THIS REGARD WE HAVE NOTICED FROM THE ORDER OF LOWER AUT HORITIES THAT THIS DISALLOWANCE WAS ESTIMATED BY THE A.O. AND CIT(A). SINCE THE DISALLOWANCE WAS DONE ON ESTIMATION AND WE DO NOT FIND ANY INFIR MITY IN THE ORDER OF THE CIT(A) AND WE CONFIRM HIS ORDER. 14 11. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DIS MISSED AND THAT OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 20.7.2010 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM DATED 20 TH JULY 2010 COPY TO 1 ITO WARD-1 RAJAHMUNDRY 2 M/S. RAGHAVENDRA FINANCE D.NO.36-10-1 STADIUM R OAD RAJAHMUNDRY 3 THE CIT RAJAHMUNDRY 4 THE CIT(A) RAJAHMUNDRY 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM