Sri P Surya Bhagawan., Visakhapatnam v. The ITO, Ward-1(1)., Visakhapatnam

ITA 518/VIZ/2008 | 2005-2006
Pronouncement Date: 22-07-2010 | Result: Allowed

Appeal Details

RSA Number 51825314 RSA 2008
Assessee PAN AJAPP8948D
Bench Visakhapatnam
Appeal Number ITA 518/VIZ/2008
Duration Of Justice 1 year(s) 9 month(s) 9 day(s)
Appellant Sri P Surya Bhagawan., Visakhapatnam
Respondent The ITO, Ward-1(1)., Visakhapatnam
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted Not Allotted
Tribunal Order Date 22-07-2010
Assessment Year 2005-2006
Appeal Filed On 13-10-2008
Judgment Text
ITA NO. 371 & 518/VIZAG/2008 P. SURYA BHAGWAN VISAKHAPATNAM 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.371/VIZAG/2008 ASSESSMENT YEAR: 2005-06 ITO WARD 1(1) VISAKHAPATNAM VS. P. SURYA BHAGWAN VISAKHAPATNAM (APPELLANT) (RESPONDENT) PAN NO:AJAPP 8948 D ITA NO.518/VIZAG/2008 ASSESSMENT YEAR: 2005-06 P. SURYA BHAGWAN VISAKHAPATNAM VS. ITO WARD 1(1) VISAKHAPATNAM (APPELLANT) PAN NO:AJAPP 8948 D (RESPONDENT) APPELLANT BY: SHRI SUBRATA SARKAR DR RESPONDENT BY: SHRI C.V.S. MURTHY CA ORDER PER SHRI B. R. BASKARAN ACCOUNTANT MEMBER: THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER DATED 10-06-2008 PASSED BY LEARNED CIT(A)-I VISAKHAPATNAM AND THEY R ELATE TO THE ASSESSMENT YEAR 2005-06. 2. THE ADDITION OF RS.15 35 000/- MADE BY THE ASSES SING OFFICER U/S 68 OF THE ACT HAVING BEEN PARTIALLY DELETED BY LEARNE D CIT (A) BOTH THE PARTIES ARE IN APPEAL BEFORE US. ITA NO. 371 & 518/VIZAG/2008 P. SURYA BHAGWAN VISAKHAPATNAM PAGE 2 OF 4 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE IS A RETAIL TRADER IN LIQUOR. DURING THE COURSE OF ASSES SMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD INT RODUCED A SUM OF RS.15 35 000/- UNDER THE HEAD LOANS & ADVANCES. T HE NAMES OF THE PARTIES FROM WHOM THE AMOUNTS WERE RECEIVED AND REP AID BACK WERE NOT AVAILABLE IN THE BOOKS OF ACCOUNT. WHEN QUESTIONED THE ASSESSEE SUBMITTED THAT HE HAD TAKEN TEMPORARY ADVANCES FROM HIS RELAT IVES AND FRIENDS AND THEY WERE REPAID BACK WITHOUT ANY INTEREST WHEN THE FUNDS POSITION WAS COMFORTABLE. HE FURTHER CLAIMED THAT SINCE NO AMOUN T IS OUTSTANDING AS AT THE YEAR END THE ASSESSING OFFICER SHOULD NOT MAKE ANY ADDITION. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE IS UNAB LE TO FURNISH THE NAMES AND ADDRESSES OF THE PERSONS FROM WHOM THE SAID AMO UNTS WERE RECEIVED. HENCE THE ASSESSING OFFICER ADDED THE SAID AMOUNT O F RS.15 35 000/- TO THE TOTAL INCOME OF THE ASSESSEE. BEFORE LEARNED CIT (A ) THE ASSESSEE FURNISHED THE LIST OF PERSONS NUMBERING 12 FROM WHOM THE IMP UGNED TEMPORARY ADVANCES WERE CLAIMED TO HAVE BEEN RECEIVED AND REP AID BACK. THE LEARNED CIT (A) CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER. IN THE REMAND PROCEEDINGS 7 OUT OF 12 PERSONS APPEARED BEFORE TH E ASSESSING OFFICER AND UPON EXAMINING THEM THE ASSESSING OFFICER CONCLUDED THAT NONE OF THEM ARE HAVING CREDIT WORTHINESS. FINALLY THE LEARNED C IT (A) CONCLUDED THAT THE IMPUGNED CREDITS ARE SUSCEPTIBLE FOR ADDITION U/S 6 8 OF THE ACT. SINCE THERE WAS CONTINUOUS RECEIPTS AND REPAYMENT OF CASH THE LEARNED CIT (A) TOOK THE VIEW THAT PEAK CREDIT SHOULD ONLY BE ADDED AND ACCORDINGLY WORKED OUT THE PEAK CREDIT AT RS.9 15 000/-. ACCORDINGLY THE LEARNED CIT (A) RESTRICTED THE ADDITION TO RS.9 15 000/-. AGGRIEVED BOTH THE PARTIES ARE IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. THE UNDISPUTED FACT IS THAT THE ASSESSEE HA S RECEIVED AND ALSO ITA NO. 371 & 518/VIZAG/2008 P. SURYA BHAGWAN VISAKHAPATNAM PAGE 3 OF 4 REPAID THE IMPUGNED AMOUNT BY WAY OF CASH. THOUGH T HE LEARNED AUTHORISED REPRESENTATIVE CLAIMED THAT THE PERSONS FROM WHOM THE AMOUNTS WERE RECEIVED ARE ASSESSED TO INCOME TAX AN D FURTHER THEY HAVE CONFIRMED THE TRANSACTIONS YET IN THE ABSENCE OF T HEIR NAME BEING RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE THE STATEM ENT AND CONFIRMATION LETTERS CANNOT BE RELIED UPON FULLY. IN THE ALTERN ATIVE THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THERE WAS THE OPENING DEBIT BALANCE OF RS.5 20 000/- IN THE ACCOUNTS OF LOANS & ADVANCES AND HENCE THE RECEIPTS TO THE EXTENT OF OPENING BALANCE SHOUL D BE EXCLUDED WHILE WORKING OUT PEAK CREDIT. HOWEVER THE LEARNED DEPAR TMENTAL REPRESENTATIVE SUBMITTED THAT THE PRESENT ALTERNATIVE CLAIM OF LEA RNED AUTHORISED REPRESENTATIVE THAT THERE WAS A OPENING BALANCE OF RS.5 20 000/- HAS NOT BEEN VERIFIED BY THE TAX AUTHORITIES AND ACCORDINGL Y SUBMITTED THAT THE ALTERNATIVE CLAIM OF THE ASSESSEE SHOULD BE ACCEPTE D ONLY AFTER DUE VERIFICATION. IN THE PAPER BOOK FILED BY THE ASSESS EE THE DETAILS OF INCOME TAX RETURNS RELATING TO THE YEAR IMMEDIATELY PRECED ING THE YEAR UNDER CONSIDERATION ARE NOT AVAILABLE AND HENCE IT COULD NOT BE VERIFIED WHETHER THE OPENING BALANCE OF RS.5 20 000/- WAS DISCLOSED TO THE TAX AUTHORITIES IN THE EARLIER YEARS OR NOT. IN PRINCIPLE WE AGREE WIT H THE LEARNED CIT (A) THAT THE PEAK CREDITS SHOULD BE ADDED WHEN THERE IS CONT INUOUS INFLOW AND OUTFLOW OF FUNDS. IN THE PRESENT CASE THE ASSESSEE CLAIMS THAT THERE WAS AN OPENING BALANCE OF RS.5 20 000/-. IF THE SAID CL AIM IS TRUE THEN THE INITIAL CREDITS TO THE EXTEND OF THE ABOVE SAID AMO UNT SHOULD BE TREATED AS REALIZATION OF THE OPENING BALANCE. IN THAT CASE TH E PEAK CREDIT WORKINGS HAVE TO BE DONE ONLY FROM CREDITS APPEARING AFTER A BOVE SAID AMOUNT OF RS.5 20 000/-. SINCE THE MATTER REQUIRES VERIFICATI ON WE DEEM IT PROPER TO SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OF FICER WITH A DIRECTION TO VERIFY THE CLAIM OF OPENING BALANCE OF RS.5 20 000/ -. IF THE SAID CLAIM IS FOUND TO BE TRUE THE ASSESSING OFFICER IS DIRECTED TO RE-COMPUTE PEAK CREDIT ITA NO. 371 & 518/VIZAG/2008 P. SURYA BHAGWAN VISAKHAPATNAM PAGE 4 OF 4 WORKINGS AFTER ADJUSTING THE INITIAL CREDITS TOWARD S THE OPENING BALANCE. WE ORDER ACCORDINGLY. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE AND APP EAL OF THE REVENUE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 22 ND JULY 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE: 22-07- 2010 COPY TO 1 THE ITO WARD-1(1) VISAKHAPATNAM 2 SRI P. SURYA BHAGWAN 26-14A-13 NEAR POORNA MARKE T VELAMPETA VISAKHAPATNAM 3 4. THE CIT 1 VISAKHAPATNAM THE CIT(A)-I VISAKHAPATNAM 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM