The DCIT, Central Circle, Vijayawada v. Sri N V Sambasiva Rao, Yakalamuru, Krishna Distt.

ITA 95/VIZ/2010 | 2006-2007
Pronouncement Date: 29-03-2011 | Result: Dismissed

Appeal Details

RSA Number 9525314 RSA 2010
Assessee PAN AAQPN3114Q
Bench Visakhapatnam
Appeal Number ITA 95/VIZ/2010
Duration Of Justice 1 year(s) 1 month(s) 13 day(s)
Appellant The DCIT, Central Circle, Vijayawada
Respondent Sri N V Sambasiva Rao, Yakalamuru, Krishna Distt.
Appeal Type Income Tax Appeal
Pronouncement Date 29-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 29-03-2011
Date Of Final Hearing 17-03-2011
Next Hearing Date 17-03-2011
Assessment Year 2006-2007
Appeal Filed On 15-02-2010
Judgment Text
ITA NO.92&95/VIZAG/2010 N.V. SESHAGIRI RAO YAKAMUR U 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.92/VIZAG/2010 ASSESSMENT YEAR: 2006-07 DCIT CENTRAL CIRCLE VIJAYAWADA VS. N.V. SESHAGIRI RAO YAKAMURU (APPELLANT) (RESPONDENT) PAN NO: AAQPN 3114Q ITA NO.95/VIZAG/2010 ASSESSMENT YEAR: 2006-07 DCIT CENTRAL CIRCLE VIJAYAWADA VS. N.V. SAMBASIVA RAO YAKAMURU (APPELLANT) (RESPONDENT) PAN NO: AASPN 5995M APPELLANT BY: SHRI C. SUBRAHMANYAM CA RESPONDENT BY: SHRI TH.L. PETER CIT(DR) & SHRI D.S. SUNDER SINGH SR.DR ORDER PER BENCH: THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECTE D AGAINST THE ORDERS PASSED BY LEARNED CIT(A) VIJAYAWADA AND BOT H THE APPEALS RELATE TO THE ASSESSMENT YEAR 2006-07. SINCE THE ISSUE UR GED IN THESE TWO APPEALS IS IDENTICAL IN NATURE THEY WERE HEARD TOG ETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. THE ADDITION MADE BY THE ASSESSING OFFICER IN THE HANDS OF BOTH THE ASSESSEES TOWARDS THE DIFFERENCE VALUE OF EXCESS ST OCK HAVING BEEN DELETED BY LEARNED CIT(A) BY GIVING TELESCOPING BEN EFIT THE REVENUE IS IN APPEAL BEFORE US ASSAILING THE DECISION OF LEARNED CIT(A). ITA NO.92&95/VIZAG/2010 N.V. SESHAGIRI RAO YAKAMUR U PAGE 2 OF 4 3. THE FACTS RELATING TO THE ISSUE ARE SET OUT IN BRIEF. BOTH THE ASSESSEES ARE BROTHERS AND ARE DOING TIMBER BUSINESS IN THE S AME PREMISES. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT IN THE BUSINE SS PREMISES OF THE ASSESSEES ON 09-09-2005. DURING THE COURSE OF SEAR CH THE STOCK INVENTORY WAS TAKEN WHICH RESULTED IN AVAILABILITY OF EXCESS STOCK. THE ASSESSING OFFICER DETERMINED THE VALUE OF EXCESS STOCK AT RS. 1 57 76 336/-. IN THE ABSENCE OF STOCK REGISTER THE ASSESSING OFFICER AP PORTIONED THE VALUE OF EXCESS STOCK BETWEEN THE ASSESSEES IN THE RATIO OF 60:40. THOUGH THE ASSESSEES HAD ALSO OFFERED VALUE OF EXCESS STOCK IN THEIR RESPECTIVE RETURN OF INCOME HOWEVER THERE WAS A DIFFERENCE BETWEEN EXCESS STOCK VALUE DETERMINED BY THE ASSESSING OFFICER AND VALUE OFFER ED BY THE ASSESSEES. THE FOLLOWING TABLE HIGHLIGHTS THE SAID DIFFERENCE. NAME OF ASSESSEE AS PER A.O AS PER ASS ESSEE DIFFERENCE SHRI N.V.SESHAGIRI RAO 63 10 534 56 57 236 6 53 298 SHRI N.V.SAMBASIVA RAO 94 65 802 8 2 80 854 11 84 948 --------------- ---------------- ---- ----------- 1 57 76 336 1 39 38 090 18 38 24 6 ======== ======== ======= IN THE PRECEDING ASSESSMENT YEAR I.E. IN ASSESSMENT YEAR 2005-06 SHRI N.V.SESHAGIRI RAO HAD OFFERED ADDITIONAL INCOME OF RS.73.00 LAKHS CONSISTING OF RS.14 63 160/- TOWARDS CASH SHORTAGE AND RS.58 36 840/- TOWARDS OTHER INCOME. SIMILARLY SHRI N.V.SAMBASIVA RAO HAD OFFERED ADDITIONAL INCOME OF RS.31.50 LAKHS TOWARDS CASH SH ORTAGE IN THE ASSESSMENT YEAR 2005-06. HENCE BOTH THE PARTIES CO NTENDED BEFORE THE ASSESSING OFFICER THAT THE ADDITIONAL INCOME SO OFF ERED IN THE ASSESSMENT YEAR 2005-06 WOULD COVER THE DIFFERENCE COMPUTED BY THE ASSESSING OFFICER. HOWEVER THE SAID EXPLANATION WAS NOT CON VINCING TO THE ASSESSING OFFICER AND HENCE HE ADDED THE DIFFERENCE CITED ABO VE IN THE RESPECTIVE HANDS OF THE ASSESSEES. BOTH THE ASSESSEES CARRIED THE MATTER IN APPEAL BEFORE LEARNED CIT(A) WHO ALLOWED THE TELESCOPING BENEFIT AND ACCORDINGLY DELETED THE IMPUGNED ADDITIONS. NOW THE REVENUE I S CHALLENGING THE SAID DECISION OF LEARNED CIT(A). ITA NO.92&95/VIZAG/2010 N.V. SESHAGIRI RAO YAKAMUR U PAGE 3 OF 4 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND CARE FULLY PERUSED THE RECORD. WE NOTICE THAT THE LEARNED CIT(A) HAS ASKED BOTH TH E ASSESSEES TO DEMONSTRATE THE CASH POSITION FROM 1.4.2004 ONWARDS TO THE DATE OF SEARCH I.E. 9.9.2005 BY TAKING INTO ACCOUNT THE AD DITIONAL INCOME OFFERED TOWARDS CASH SHORTAGE. IN THE CASE OF SHRI N.V.SES HAGIRI RAO THE CASH BALANCE AS ON THE DATE OF SEARCH WAS ARRIVED AT RS. 11 26 506/-. BESIDES THE SAID ASSESSEE HAD ALSO OFFERED ADDITIONAL INCOM E OF RS.58 36 840/- AS INCOME FROM OTHER SOURCES. HOWEVER THE STOCK DIFF ERENCE ADDED IN HIS HAND WAS RS.6 53 298/-. SIMILARLY IN THE CASE OF S HRI N.V.SAMBASIVA RAO THE RECAST CASH BALANCE AS ON THE DATE OF SEARCH WA S ARRIVED AT RS.11 26 506/- WHERE AS THE STOCK DIFFERENCE ADDED IN HIS HAND WAS RS.11 84 948/-. IT MAY BE NOTED THAT BOTH THE ASSE SSEES ARE CARRYING ON BUSINESS IN THE SAME PREMISES AND THE STOCK DIFFERE NCE WAS ALLOCATED BETWEEN THEM ONLY ON ESTIMATED BASIS ON A CERTAIN R ATIO. HENCE IN VIEW OF THE ADDITIONAL INCOME OFFERED BY BOTH THE ASSESSEES THE LEARNED CIT(A) HELD THAT SUFFICIENT FUNDS WERE AVAILABLE WITH THE BOTH ASSESSEES TO COVER THE STOCK DIFFERENCE AND ACCORDINGLY DELETED THE IM PUGNED ADDITIONS. IN SUPPORT OF HIS PROPOSITION THE LEARNED CIT(A) RELI ED UPON THE FOLLOWING DECISIONS. (A) ANANTHARAM VEERASINGHAIAH AND CO. VS. CIT (123 ITR 457(S.C) (B) K.S.M.GURUSWAMY NADAR & SONS (149 IT R 127 (MAD) (C) CIT VS. VENKATESWARA TIMBER DEBPOT (222 ITR 7 68 (A.P) (D) RAMESHWAR LAL SONI VS. ACIT (91 ITD 301 (JODH )) (E) ARUN KALA VS. ACIT (98 TTJ 1046 (JAI)) 5. THUS WE NOTICE THAT THE LEARNED CIT(A) HAS C ATEGORICALLY HELD THAT THE UNACCOUNTED ADDITIONAL INCOME OFFERED IN EARLIER YE ARS WAS AVAILABLE WITH THE ASSESSEES AS A SOURCE FOR MAKING THE INVESTMENT IN THE UNACCOUNTED STOCK. THOUGH THE REVENUE OBJECTS TO THE DECISION OF LEARNED CIT(A) IT DID NOT CITE ANY CASE LAW CONTRARY TO THE DECISION ARRI VED AT BY LEARNED CIT(A). HENCE UNDER THE FACTS AND CIRCUMSTANCES OF THE CAS E WE FIND THE DECISION OF LEARNED CIT(A) TO BE A REASONABLE ONE. ACCORDIN GLY WE UPHOLD HIS ORDER ON THIS ISSUE IN THE CASE OF BOTH THE ASSESSEES. ITA NO.92&95/VIZAG/2010 N.V. SESHAGIRI RAO YAKAMUR U PAGE 4 OF 4 6. IN THE RESULT THE APPEALS OF THE REVENUE IN BOTH THE CASES ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 29 TH MARCH 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE:29-03-2011 COPY TO 1 DCIT CENTRAL CIRCLE VIJAYAWADA 2 SRI N.V. SESHAGIRI RAO PROP: VENKATA VAMSI KRISH NA TRADERS YAKLAMURU KRISHNA DIST. 3 SRI N.V. SAMBASIVA RAO PROP: SUDHIR TIMBER DEPOT YAKLAMURU KRISHNA DIST. 4 5. THE CIT VIJAYAWADA THE CIT(A) VIJAYAWADA 6 THE DR ITAT VISAKHAPATNAM. 7 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM