Sri Vallabhaneni Venkata Ramaiah (HUF), Vijayawada, Hyderabad v. The ACIT, Central Circle, Vijayawada

MA 52/VIZ/2009 | misc
Pronouncement Date: 22-07-2010 | Result: Partly Allowed

Appeal Details

RSA Number 5225324 RSA 2009
Assessee PAN AABHU0509A
Bench Visakhapatnam
Appeal Number MA 52/VIZ/2009
Duration Of Justice 9 month(s)
Appellant Sri Vallabhaneni Venkata Ramaiah (HUF), Vijayawada, Hyderabad
Respondent The ACIT, Central Circle, Vijayawada
Appeal Type Miscellaneous Application
Pronouncement Date 22-07-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 22-07-2010
Date Of Final Hearing 29-01-2010
Next Hearing Date 29-01-2010
Assessment Year misc
Appeal Filed On 22-10-2009
Judgment Text
MA NO.52 & 69/VIZ/2009 SRI VALLABHANENI VENKATA RAMAIAH VIJAYAWADA PAGE 1 OF 11 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER MA NO. 52/VIZAG/2009 (ARISING OUT OF IT(SS) A NO.11/VIZ/2008) BLOCK PERIOD 1-4-1996 TO 14-2-2003 SHRI. VALLABHANENI VENKAT RAMAIAH (HUF) VIJAYAWADA VS. ACIT CENTRAL CIRCLE VIJAYAWADA (APPELLANT) (PAN NO. AABHU 0509 A) (RESPONDENT) MA NO. 69/VIZAG/2009 (ARISING OUT OF IT(SS) A NO.11/VIZ/2008) BLOCK PERIOD 1-4-1996 TO 14-2-2003 DCIT CENTRAL CIRCLE VIJAYAWADA VS. SHRI. VALLABHANENI VENKAT RAMAIAH (HUF) VIJAYAWADA (APPELLANT) (PAN NO. AABHU 0509 A) APPELLANT BY: SHRI S. RAMA RAO ADVOCATE RESPONDENT BY: SHRI SUBRATA SARKAR CIT(DR) ORDER PER SHRI B. R. BASKARAN ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS PETITION WITH THE PRAYE R FOR APPROPRIATE RELIEF WITH THE SUBMISSION THAT CERTAIN MISTAKES AP PARENT FROM RECORD HAVE CREPT IN IN RESPECT OF THE FOLLOWING MATTERS IN T HE ORDER DATED 22-12-2008 PASSED IN IT(SS) NO.04/VIZAG/2008 AND IT(SS)A NO.09 /VIZAG/2008. A) ADDITION ON ACCOUNT OF CREDIT FOUND IN BANK A/C B) ADDITION ON ACCOUNT OF EXPENDITURE ON FISH CULTIVAT ION 2. THE REVENUE HAS ALSO FILED A PETITION BY STATING THAT A MISTAKE HAS OCCURRED WHILE ESTIMATING THE EXPENDITURE ON FISH C ULTIVATION BY NOT MA NO.52 & 69/VIZ/2009 SRI VALLABHANENI VENKATA RAMAIAH VIJAYAWADA PAGE 2 OF 11 CONSIDERING THE UNEXPLAINED EXPENDITURE TOWARDS LEA SE RENT AND OTHER MATERIALS. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY OBJECTED TO THE PETITION FILED BY THE ASSESSEE WITH THE CONTENTION THAT THE TRIBUNAL HAS NO POWER TO REVIEW OR RECALL ITS ORIGINAL ORDER AND RE HEAR THE SAME. THUS ACCORDING TO LEARNED DEPARTMENTAL REPRESENTATIVE T HE TRIBUNAL SHOULD NOT DISTURB THE QUANTUM ADDITIONS ALREADY CONFIRMED BY THE TRIBUNAL. IN THIS REGARD THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS PLACED RELIANCE ON THE FOLLOWING CASE LAW. WE HAVE EXTRACTED BELOW THE HE AD NOTES OF THE SAID CASE LAW FROM THE WRITTEN SUBMISSIONS FILED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE: 1) UPLAKSH METAL INDUSTRIES VS. CIT REPORTED IN ( 309) (ITR 61) (P&H) (2009): WHEREIN IT WAS HELD THAT RECTIFI CATION U/S 254 (2) REVIEW OR RECALL OF ORDER TRIBUNAL UPHE LD THE ADDITIONS TOWARDS UNPROVED TRADE CREDITS APPLICAT ION FOR RECTIFICATION U/S 254 (2) DISMISSED BY THE TRIBUNAL HOLDING THAT THE SAME WAS I THE NATURE OF REVIEW WHICH WAS N OT PERMISSIBLE JUSTIFIED SCOPE OF RECTIFICATION IS CONFINED TO CORRECTION OF MISTAKE APPARENT ON THE FACE OF RECOR D AND NOT A MISTAKE WITH REGARD TO DEBATABLE QUESTIONS WHERE A CONSCIOUS DECISION HAS BEEN TAKEN MOREOVER THE V IEW TAKEN BY THE TRIBUNAL ON MERITS HAS BEEN AFFIRMED I N FURTHER APPEAL NO SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATION 2) RAS BIHARI BANSAL VS. CIT REPORTED IN (293) ITR 365)(DEL)/2008: WHEREIN IT HAS HELD THAT RECTIFICA TION U/S 254(2) SCOPE OVERSIGHT OF A FACT CANNOT CONSTIT UTE AN APPARENT MISTAKE RECTIFIABLE U/S 254(2) ALSO ASS ESSEE CANNOT BE ALLOWED TO REOPEN AND REARGUE THE WHOLE M ATTER IN THE GARB OF RECTIFICATION ASSESSEE FILED AN AP PLICATION U/S 254(2) CONTENDING THAT HIS CROSS OBJECTIONS RELATIN G TO ADDITION OF ESTIMATED GROSS PROFIT HAVE BEEN DISPOS ED OFF BY THE TRIBUNAL WITHOUT GIVING ATTENTION TO THE EVIDEN CE ADDUCED BY HIM HE WAS I FACT SEEKING TO REOPEN AND RE- ARGUE THE WHOLE MATTER IN THE GARB OF APPLICATION F OR RECTIFICATION WHICH IS BEYOND THE SCOPE OF SEC.254( 2) THEREFORE TRIBUNAL WAS JUSTIFIED IN DISMISSING THE APPLICATION MA NO.52 & 69/VIZ/2009 SRI VALLABHANENI VENKATA RAMAIAH VIJAYAWADA PAGE 3 OF 11 3) ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD. R EPORTED IN 219 CTR 90 (SC): WHEREIN IT HAS HELD THAT RECTI FICATION U/S 254 (2) MISTAKE APPARENT AN ERROR APPARENT ON THE FACE OF THE RECORD MEANS AN ERROR WHICH STRIKES ON MERE LOOKING AND DOES NOT NEED LONG DRAWN OUT PROCESS OF REASONING ON POINTS WHERE THERE MAY CONCEIVABLY BE TWO OPINIONS IF THE VIEW ACCEPTED BY THE COURT IN THE ORIGINAL JUDGMENT IS ONE OF THE POSSIBLE VIEWS THE CASE CAN NOT BE SAID TO BE COVERED BY AN ERROR APPARENT ON THE FACE OF THE RECORD.. 4) BHARAT DRUG STORES VS. CIT & AMR REPORT IN (295 ITR 120) (GAU) (HC): WHEREIN IT HAS HELD THAT RECTIFIC ATION U/S 254(2) SCOPE U/S 254 (2) THE TRIBUNAL CANNOT R ECALL ITS ORIGINAL ORDER AND REHEAR THE SAME ON MERITS NO SUBSTANTIAL QUESTION OF LAW ARISES .. 5) BIMAL BHATT VS. ACIT REPORTED IN (18 SOT 315) I TAT MUMBAI D BENCH: WHEREIN IT HAS HELD THAT RECTIFI CATION U/S 254(2) SCOPE TRIBUNAL AFTER DELIBERATING IN DE TAIL AND EXAMINING ALL ASPECTS OF ISSUE COULD NOT RECALL ITS ORDER AS A WHOLE IN THE GARB OF RECTIFICATION U/S 254 (2) AS I T WOULD AMOUNT TO REVIEW RE-APPRECIATION OF THE EVIDENCE PLACED BEFORE THE TRIBUNAL DURING THE COURSE OF HEARING IS NOT PERMISSIBLE TO RE-ADJUDICATE THE ISSUE AFRESH UNDER THE GARB OF RECTIFICATION. 4. HOWEVER THE LEARNED AUTHORISED REPRESENTATIVE D EFENDED THE PETITION BY SUBMITTING THAT THE MISTAKES POINTED OU T IN THE PETITION ARE ONLY ERRORS WHICH ARE APPARENT FROM THE RECORD. WE MAY MENTION HERE THAT WE ARE NOT OBLIVIOUS OF THE LEGAL PROPOSITIONS LAID DO WN BY HIGHER COURTS WITH REGARD TO THE POWERS VESTED WITH THE TRIBUNAL U/S 2 54(2) OF THE ACT. HENCE WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE QUANTUM ADDITIONS CONFIRMED IN THE EARLIER ORDER OF THE TRIBUNAL SHOULD NOT BE DISTURBED. IT IS WELL SET TLED LEGAL PROPOSITION THAT THE ARITHMETICAL ERRORS AND THE FINDINGS RECORDED U NDER MISAPPREHENSION OR MISCONCEPTION OF LAW AND FACTS SQUARELY FALL UNDER THE CATEGORY OF ERRORS APPARENT FROM THE RECORD WHICH CAN BE RECTIFIED BY AN ORDER PASSED U/S 254(2) OF THE ACT. THUS BY KEEPING IN MIND THE PRO POSITION OF LAW DISCUSSED ABOVE WE NOW PROCEED TO DECIDE THE PETIT ION OF THE ASSESSEE ON MERITS. MA NO.52 & 69/VIZ/2009 SRI VALLABHANENI VENKATA RAMAIAH VIJAYAWADA PAGE 4 OF 11 5. THE FIRST ISSUE ON WHICH THE ASSESSEE POINTS OUT ERROR RELATES TO THE ADDITION OF RS.25 27 655/- PERTAINING TO THE AMOUNT RECEIVED BY WAY OF DEMAND DRAFTS AND FOUND DEPOSITED IN THE BANK ACCOU NT OF THE ASSESSEE. THE SAID ISSUE IS DISCUSSED AT PARA NO.11 OF THE OR DER OF THE ITAT. WE NOTICE THAT THE TRIBUNAL HAS CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER UNDER THE VIEW THAT THE AMOUNTS FOUND CREDI TED IN THE BANK ACCOUNT OF THE ASSESSEE ARE CASH CREDIT ENTRIES WHICH ARE L IABLE TO FALL WITHIN THE AMBIT OF THE PROVISIONS OF SECTION 68 OF THE ACT. THOUGH THE ASSESSEE CLAIMED THAT THE SAID RECEIPTS ARE PART OF SALE PRO CEEDS OF FISHES SOLD BY HIM THE ASSESSEE COULD PRODUCE ONLY PHOTOCOPY OF T HE CHEQUES AND DRAFTS BEFORE THE ASSESSING OFFICER. HENCE THE TRIBUNAL TO OK THE VIEW THAT THE ASSESSEE HAS FAILED TO DISCHARGE THE PRIMARY RESPON SIBILITY PLACED UPON HIM U/S 68 OF THE ACT AND ACCORDINGLY CONFIRMED THE ADD ITION MADE BY THE ASSESSING OFFICER. 5.1 THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT IT WAS NOT THE CASE OF THE ASSESSING OFFICER THAT THE PROVISIONS O F SEC.68 OF THE ACT ARE APPLICABLE ON THE FACTS OF THIS ISSUE. HE FURTHER S UBMITTED THAT NO ARGUMENT TOOK PLACE ON THE APPLICABILITY OF SEC.68 ALSO DURI NG THE COURSE OF HEARING. HOWEVER THE TRIBUNAL WHILE PASSING THE ORDER HAS H EAVILY PLACED RELIANCE ON THE PROVISIONS OF SEC.68 IN ORDER TO CONFIRM THE SAID ADDITION. LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE PROVIS IONS OF SEC.68 OF THE ACT ARE NOT APPLICABLE ON THIS ISSUE AS THE ASSESSE E DID NOT MAINTAIN ANY BOOKS OF ACCOUNT AND TO THAT EXTENT THE TRIBUNAL HA S COMMITTED AN ERROR IN APPLYING THE PROVISIONS OF SEC.68 TO THE FACTS OF T HE ISSUE. 5.2 THE LEARNED AUTHORISED REPRESENTATIVE BY ADVER TING OUT ATTENTION TO PAGES 7 AND 8 OF THE ASSESSMENT ORDER PASSED IN THE HANDS OF THE ASSESSEE SUBMITTED THAT THERE IS NO DISPUTE WITH REGARD TO THE NATURE OF THE DEPOSITS. THAT IS THE ASSESSING OFFICER HAS ALR EADY ACCEPTED THAT THE AMOUNTS SO DEPOSITED ARE PART OF SALE RECEIPTS ONLY . IN THIS REGARD THE LEARNED AUTHORISED REPRESENTATIVE INVITED OUR ATTEN TION TO QUESTION NO.32 MA NO.52 & 69/VIZ/2009 SRI VALLABHANENI VENKATA RAMAIAH VIJAYAWADA PAGE 5 OF 11 WHICH IS EXTRACTED AT PAGE NO.8 OF THE ASSESSMENT O RDER. WE ALSO EXTRACT BELOW THE SAID QUESTION AND THE ANSWER THERE TO.: Q.NO.32. IT IS SEEN THAT FISH SALES CREDIT IS FOUND IN THE STATE BANK OF INDIA PATAMATA BRANCH WHAT IS THE RELATION SHIP BETWEEN LOAN TAKEN FROM ANDHRA BANK AND FISH SALES CREDITS IN SBI PATAMATA BRANCH? ANS. IF WE DEPOSIT IN THE LOAN A/C OF ANDHRA BANK T HEY WILL ADJUST IT TOWARDS LOAN REPAYMENT SO WE HAVE DEPOSI TED IN THE SBI PATAMATA BRANCH. THUS ACCORDING TO LEARNED AUTHORISED REPRESENTATIVE THE TRIBUNAL HAS COMMITTED AN ERROR BY ASSUMING THAT THE ASSESSEE HA S NOT PLACED ANY MATERIAL TO PROVE THAT THE DEPOSITS MADE IN THE BAN K A/C REPRESENT SALE PROCEEDS OF THE FISHES AND THE SAID ASSUMPTION IS N OT BORNE OUT OF RECORDS. 5.3 ACCORDING TO THE LEARNED AUTHORISED REPRESENTAT IVE THE QUANTUM OF DEPOSIT MADE IN THE BANK ACCOUNT WAS ALSO CORROBORA TED AGAINST THE SALE PROCEEDS OF FISHES AND THE SAME HAS ESCAPED THE ATT ENTION OF THE TRIBUNAL. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THA T ALL THE FAMILY MEMBERS OF THE ASSESSEE ARE IN THE BUSINESS OF FISH CULTIVATION. DURING THE COURSE OF SEARCH CERTAIN DISPATCH SLIPS WERE SEIZED AND ON THAT BASIS THE INCOME FROM FISHING ACTIVITY OF ALL THE FAMILY MEMB ERS WERE ESTIMATED. AFTER GIVING DUE DEDUCTION FOR THE INCOME ALREADY D ISCLOSED BY ALL THE FAMILY MEMBERS THE REMAINING INCOME WAS SUBJECTED TO TAX IN THE HANDS OF THE ASSESSEE HEREIN. THE INCOME WAS ESTIMATED BY THE TRIBUNAL AT RS.17 39 010/- AND AFTER DEDUCTING A SUM OF RS.4 58 700/- THAT IS THE AMOUNT ALREADY DISCLOSED BY THE FAMILY MEMBERS THE NET UNDISCLOSED INCOME FROM FISH SALES WAS DETERMINED AT RS.12 80 0 00/-. THE LEARNED AUTHORISED REPRESENTATIVE POINTED OUT THAT THE NET INCOME OF RS.17 39 010/- HAS BEEN ARRIVED BY ESTIMATING THE G ROSS VALUE OF SALES AT RS.4 96 86 000/- AND FURTHER ESTIMATING THE NET PRO FIT AT 3.5%. THUS ACCORDING TO LEARNED AUTHORISED REPRESENTATIVE THE AMOUNT FOUND DEPOSITED IN THE BANK A/C OF THE ASSESSEE AND HIS F AMILY MEMBERS AGGREGATING TO RS.1 17 81 054/- IS VERY MUCH EXPLAI NED BY THE AMOUNT OF MA NO.52 & 69/VIZ/2009 SRI VALLABHANENI VENKATA RAMAIAH VIJAYAWADA PAGE 6 OF 11 SALE PROCEEDS OF RS.4.96 CRORES CITED ABOVE. THUS A CCORDING TO LEARNED AUTHORISED REPRESENTATIVE THE QUANTUM OF DEPOSITS M ADE TO THE BANK A/C OF THE ASSESSEE ALSO STANDS EXPLAINED. BY NOT CONSI DERING THE VITAL FACTS OF SALES REALIZATION VIS--VIS BANK DEPOSITS THE TRIBU NAL HAS COMMITTED AN ERROR APPARENT FROM THE RECORD BY CONFIRMING THE AD DITION OF BANK DEPOSITS U/S 68 OF THE ACT. 6. IT IS NOTICED FROM PARA NO.6.1 OF THE ORDER DATED 22-12-2008 PASSED BY THE TRIBUNAL THAT THE ASSESSEE DOES NOT MAINTAI N ANY BOOKS OF ACCOUNT FOR HIS TRANSACTIONS. HOWEVER THE TRIBUNAL WHILE R ENDERING THE DECISIONS ON THIS ISSUE HAS CONSIDERED THE PROVISIONS OF SEC.68 OF THE ACT WHICH IS NOT APPLICABLE TO THE FACTS OF THE CASE. THUS THE TRIBU NAL HAS COMMITTED AN ERROR ON APPLICATION OF SEC.68 OF THE ACT ON THIS I SSUE. SIMILARLY THE QUANTUM OF FISH SALES HAVE ALSO ESCAPED THE ATTENTI ON OF THE TRIBUNAL AS THE TRIBUNAL WAS UNDER THE ASSUMPTION THAT THERE WA S DISPUTE WITH REGARD TO THE CLAIM OF THE ASSESSEE THAT THE IMPUGNED DEPO SIT REPRESENT SALE PROCEEDS OF FISHES. IN VIEW OF THE ABOVE A MISTAKE APPARENT FROM THE RECORD HAS CREPT IN ON THIS ISSUE AND ACCORDINGLY W E SUBSTITUTE PARA NO.11 OF THE ORDER OF THE TRIBUNAL WITH THE FOLLOWING PAR A. 11. THE NEXT ISSUE IN THE DEPARTMENTS APPEAL IS WI TH REGARD TO THE DEPOSIT OF RS.25 27 655/- FOUND CREDI TED IN THE BANK ACCOUNT OF THE ASSESSEE. THE ASSESSING OFFICER NOTICED CERTAIN DEPOSITS AGGREGATING TO RS.25 27 655/- ON VARIOUS DATES FALLING IN TWO FINA NCIAL YEARS. THE ASSESSEE EXPLAINED THAT THEY REPRESENT S ALE PROCEEDS OF FISH AND THE SAME WHICH WAS NOT ACCEPTE D BY THE ASSESSING OFFICER FOR THE REASON THAT THE ASSESSEE COULD NOT VALIDATE THIS CLAIM WITH ANY BOO KS OF ACCOUNT. LEARNED CIT (A) DELETED THE SAID ADDITION WITH THE FOLLOWING OBSERVATIONS: I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND VARIOUS DETAILS. IN RESPECT OF F.Y 2002-03 IN THE BANK ACCOUNT THE DESCRIPTION MA NO.52 & 69/VIZ/2009 SRI VALLABHANENI VENKATA RAMAIAH VIJAYAWADA PAGE 7 OF 11 GIVEN IN RESPECT OF SUCH CREDITS ARE EITHER BY TRANSFER OF DD OR BY TRANSFER. AS FAR AS THE TH REE DEPOSITS IN F.Y. 1997-98 ARE CONCERNED THE ASSESSING OFFICER HIMSELF MENTIONS THE MODE OF PAYMENT AS BY CHEQUES. ACCORDINGLY THE DEPOSITS ARE NOT I CASH. THE APPELLANT HAS FILED COPIES OF THE DEMAND DRAFTS RELATING TO A.Y 2002-03. IN ANY CASE THE SOURCE OF DEPOSITS COULD ALWAYS BE ENQUIRED INTO SINCE THE TRANSACTIONS ARE BY DD/CHEQUES. ACCORDINGLY IT IS NOT CORRECT ON THE PART OF THE ASSESSING OFFICER TO HOLD THAT DEPOSITS ARE IN CASH AND FROM UNDISCLOSED SOURCES WHEREAS DEPOSITS ARE IN CHEQUES/DD AND THE SOURCES CAN ALWAYS BE FOUND OUT IF LITTLE ENQUIRIES WERE DONE. THE CLAIM OF THE ASSESSEE THAT THE AMOUNTS ARE OUT OF FISH SALES HAVE BEEN SUMMARILY REJECTED WITHOUT ENQUIRIES. SINCE THE ASSESSEE DOES NOT MAINTAIN BOOKS OF ACCOUNT THE SALE PROCEEDS COULD NOT HAVE BEEN VERIFIED FROM THE BOOKS OF ACCOUNT. ACCORDINGLY IT IS NOT CORRECT TO TAKE GROSS AMOUNT OF SALES REPRESENTED BY BANK DEPOSITS AS INCOME. THE ASSESSEE HAS BEEN ALREADY OFFERED INCOME FROM FISH BUSINESS IN THE RETURN FILED. ACCORDINGLY THE ADDITION OF RS.25 27 655/- IS DELETED. THERE IS NO DISPUTE WITH REGARD TO THE FACT TH AT ALL THE FAMILY MEMBERS OF THE ASSESSEE ARE ENGAGED IN THE BUSINESS OF FISH FARMING AND INCOME OFFERED BY THEM HAVE BEEN ACCEPTED IN EARLIER YEARS. DURING THE COURSE OF SEARCH PROCEEDINGS THE DISPATCH SLIPS WER E FOUND OUT WHICH REVEALED THAT THE DISPATCHES OF FISHES WERE MADE TO WEST BENGAL. THE DDS WHICH HAVE BEEN FOUND DEPOSITED IN THE BANK A/C OF THE ASSESSEE HAVE BEEN PURCHASED FROM THE STATE OF WEST BENGAL ONLY. BESIDES THIS THE GROSS SALE VALUE OF DISPATCHES MADE WERE DETERMINED AT RS.4 96 86 000/- AND THE NET PROFIT WAS DETERMINED AT RS.17 39 010/-. THE TOTAL AMOUNT OF INCOME FROM THIS SOURCE AS DISCLOSED BY THE FAMILY MEMBERS OF T HE ASSESSEE STOOD AT RS.4 58 700/- AND HENCE THE UNDISCLOSED INCOME FROM THIS SOURCE WAS DETERMINED MA NO.52 & 69/VIZ/2009 SRI VALLABHANENI VENKATA RAMAIAH VIJAYAWADA PAGE 8 OF 11 AT RS.12 80 310/-. SINCE THE PACKING SLIPS CONTAINE D NAMES OF DIFFERENT CONCERNS FOR THE SAKE OF CONVENIENCE THE SAID UNDISCLOSED INCOME WAS ASSESSED IN THE HANDS OF THE ASSESSEE HEREIN. THUS IT CAN BE SEEN THAT THERE IS A CORRELATION BETWEEN THE SALE OF FISH AND RECEIPT OF DDS. IN THESE CIRCUMSTANCES AS OBSERVED BY THE LEARNED CIT (A) UNLESS THERE IS ANY INFORMATION CONTRARY TO THE CLA IM OF THE ASSESSEE WE DO NOT FIND ANY REASON TO REJEC T THE CLAIM OF THE ASSESSEE THAT THE IMPUGNED DEPOSIT S REPRESENT SALES REALIZATION. FURTHER AS POINTED OUT BY LEARNED CIT (A) THAT THE SALE PROCEEDS COULD NOT HA VE BEEN VERIFIED FROM THE BOOKS OF ACCOUNT AS THE ASSESSEE DID NOT MAINTAIN ANY BOOKS. IN VIEW OF THE FOREGOING DISCUSSIONS WE ARE OF THE VIEW THAT THE IMPUGNED DEPOSITS MADE INTO THE BANK ARE RELATABLE TO THE SALES REALIZATION. SINCE THE INCOME FROM FIS H SALES HAVE ALREADY BEEN ASSESSED IN THE HANDS OF TH E ASSESSEE AND HIS FAMILY MEMBERS NO SEPARATE ADDITION IS WARRANTED IN RESPECT OF SALES REALIZATI ON. IN VIEW OF THE ABOVE WE DO NOT FIND ANY NECESSITY TO INTERFERE WITH THE DECISION OF LEARNED CIT (A) IN DELETING THE ADDITION ON THIS ISSUE. 7. THE NEXT ISSUE ON WHICH THE ASSESSEE POINTS OUT MISTAKE RELATES TO THE ADDITION OF RS.34 56 000/- WITH REGARD TO THE EXPEN DITURE ON FISH CULTIVATION. THE ASSESSEE CONTENDS THAT THERE IS A MISTAKE APPARENT FROM RECORD IN THE DECISION OF THE TRIBUNAL FOR THE FOLLOWING REASONS: A) THE TRIBUNAL HAS FAILED TO TAKE INTO ACCOUNT THE PR OPOSITION THAT WHEN THE INCOME IS ESTIMATED NO SEPARATE ADDITION IS RE QUIRED TO BE MADE TOWARDS EXPENDITURE. MA NO.52 & 69/VIZ/2009 SRI VALLABHANENI VENKATA RAMAIAH VIJAYAWADA PAGE 9 OF 11 B) THE TRIBUNAL HAS FAILED TO TAKE INTO ACCOUNT THE FA CT THAT THE SALES REALIZATION OF THE INITIAL YEAR WILL BE AVAILABLE W ITH THE ASSESSEE FOR MEETING THE EXPENDITURE IN THE SUCCEEDING YEAR. HEN CE THE ESTIMATION OF EXPENDITURE IN THE SUCCEEDING YEAR ON THE PRESUMPTI ON THAT THE ASSESSEE WOULD NOT BE HAVING SUFFICIENT FUND IS NOT CORRECT. C) THE ASSESSEE HAS OFFERED INCOME IN THE RETURN OF IN COME ON ESTIMATED BASIS AND THE SAME WAS ACCEPTED BY THE INCOME TAX AU THORITIES DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HENCE THE FAC T THAT FUNDS WERE AVAILABLE WITH THE ASSESSEE FOR MEETING THE EXPENDI TURE FOR CULTIVATION OF FISH WAS ACCEPTED BY THE TAX AUTHORITIES. HOWEVER THE TRIBUNAL HAS FAILED TO TAKE NOTE OF THIS FACT WHILE RENDERING IT S DECISION. 8. HAVING HEARD THE CONTENTIONS OF BOTH THE PARTIES WE ARE OF THE VIEW THAT THERE IS AN ERROR IN THE ORDER OF THE TRIBUNAL IN S O FAR AS IT RELATES TO THE ESTIMATION OF EXPENDITURE IN THE SUCCEEDING YEARS AS NOTED BY US IN PARA 12.3 OF THE ORDER DATED 22-12-2008. THE ASSESSING OFFICER HAS TREATED THE COST OF INITIAL DEVELOPMENT AND BREEDING EXPENSES AS UNEXPLAINED INVESTMENT IN THE HANDS OF THE ASSESSEE. WHEN THE BUSINESS IS CARRIED ON CONTINUOUSLY THE FU NDS GENERATED IN A YEAR IS NORMALLY AVAILABLE FOR MEETING THE EXPENDITURE IN T HE SUCCEEDING YEAR. IN VIEW OF THE ABOVE WE ARE OF THE VIEW THAT THE TRIBUNAL HAS COMMITTED AN ERROR IN NOT PROPERLY APPRECIATING THE FACTS OF THE ISSUE WHICH CALLS FOR RECTIFICATION. ACCORDINGLY WE SUBSTITUTE PARA NO.12.3 OF THE ORDER OF THE TRIB UNAL DATED 22-12-2008 BY FOLLOWING PARA. 12.3 DURING THE COURSE OF ARGUMENT IT WAS STATED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THERE ARE TWO SEASONS FOR FISH CATCH. THE ASSESSING OFFICER HAS T AKEN THE BOOK RESULTS OF THE GROUPS CONCERNED PERTAINING TO THE ASSESSMENT YEAR 2003-04 AND HAS APPLIED THE SAME FO R THE ASSESSMENT YEARS 1997-98 1998-99 AND 2001-2002. AS STATED EARLIER THE SALE PROCEEDS OF FIRST YEAR SHAL L BE AVAILABLE FOR MEETING THE EXPENDITURE IN THE SUCCEEDING YEAR. HOWEVER THE ASSESSING OFFICER HAS ESTIMATED THE COST OF INI TIAL MA NO.52 & 69/VIZ/2009 SRI VALLABHANENI VENKATA RAMAIAH VIJAYAWADA PAGE 10 OF 11 INVESTMENT ON DEVELOPMENT OF PONDS WITHOUT TAKING I NTO ACCOUNT THE ABOVE SAID FACTS. HENCE WE ARE OF THE V IEW THAT THE ADDITION IF ANY SHOULD BE RESTRICTED ONLY TO THE IN ITIAL YEAR OF FISH CULTIVATION. WE ARE ALSO OF THE VIEW THAT THE AMOUNT OF INITIAL INVESTMENT OF RS.47 500/- PER ACRE HAS BEEN TAKEN INTO BY THE ASSESSING OFFICER WITHOUT CONSIDERING THE PO SSIBILITY OF AVAILABILITY OF FUNDS WITH THE ASSESSEE. WE ARE OF THE VIEW THAT THE POSSIBILITY OF USING LOAN AMOUNTS AND ALSO AMOU NTS DRAWN FROM THE GROUP CONCERNS CANNOT BE DISCOUNTED WITH. CONSIDERING ALL THE ABOVE ASPECTS IN OUR OPINION THE ESTIMATION OF INITIATION CASH OUTFLOW TOWARDS EXPEN DITURE TOWARDS FISH CULTIVATION SHOULD BE ESTIMATED AT RS. 25 000/- PER ACRE FOR THE INITIAL YEAR OF FISH CULTIVATION ONLY. ACCORDINGLY THE ADDITION ON THIS ACCOUNT IS RESTRICTED TO RS.25 00 000/- CALCULATED AT THE RATE OF RS.25 000/- PER ACRE FOR 100 ACRES IN THE FINANCIAL YEAR 1996-97. ACCORDINGLY THE ORDER O F LEARNED CIT (A) ON THIS ISSUE STANDS MODIFIED. 9. IN THE MISCELLANEOUS PETITION FILED BY THE DEPART MENT IT HAS BEEN POINTED OUT THAT THE TRIBUNAL HAS NOT ADJUDICATED ON THE FO LLOWING TWO ISSUES: (A) UNEXPLAINED EXPENDITURE TOWARD LEASE RENT OF R S.10 80 000 AND (B) EXPENDITURE TOWARDS LIME COW DUNG LITTER ETC. AMOUNTING TO RS.27 35 650/- THE ADDITION MADE BY THE ASSESSING OFFICER PERTAINS TO THE COST OF INITIAL DEVELOPMENT AND BREEDING EXPENSES. THE ASSESSING OF FICER HAS TREATED THE SAME AS UNEXPLAINED INVESTMENT BY THE ASSESSEE. THUS TH E TRIBUNAL HAS ESTIMATED THE SAID UNEXPLAINED INVESTMENT AFTER CONSIDERING THE P OSSIBILITY OF AVAILABILITY OF FUNDS BY WAY OF LOANS AND BY WAY OF AMOUNT DRAWN FROM SIS TER CONCERNS. THUS IT COULD BE SEEN THAT THE ADDITION MADE BY THE ASSESSING OFF ICER AS WELL AS THE ADDITION SUSTAINED BY THE TRIBUNAL DO NOT RELATE TO THE EXPE NDITURE BUT RELATE TO UNEXPLAINED INVESTMENT. AS POINTED OUT BY LEARNED AUTHORISED RE PRESENTATIVE WHEN THE INCOME IS ESTIMATED NO SEPARATE ADDITION IS REQUIRED TO B E MADE TOWARDS EXPENDITURE MA NO.52 & 69/VIZ/2009 SRI VALLABHANENI VENKATA RAMAIAH VIJAYAWADA PAGE 11 OF 11 INCURRED IN EARNING THE SAID INCOME. IN VIEW OF THE ABOVE WE DO NOT FIND ANY MERIT IN THE PETITION FILED BY THE REVENUE. 10. ACCORDINGLY THE MISCELLANEOUS PETITION OF THE A SSESSEE AS WELL AS REVENUE IS DISPOSED OF. 9. IN THE RESULT THE MISCELLANEOUS APPLICATION OF T HE ASSESSEE IS PARTLY ALLOWED AND THE MISCELLANEOUS PETITION FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 22/07/2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE: 22 ND JULY 2010 COPY TO 1 SHRI VALLABHANENI VENKAT RAMAIAH D.NO.74-12-7 N EW RTC COLONY PATAMATA VIJAYAWADA 2 SRI S. RAMA RAO ADVOCATE FLAT NO.103 H.NO.3-6- 542/4 INDIRADEVI NILAYAM ST.NO.7 HIMAYATHNAGAR HYDERABAD 500029 3 4. THE ACIT CENTRAL CIRCLE VIJAYAWADA THE DCIT CENTRAL CIRCLE VIJAYAWADA 5 THE CIT (CENTRAL) HYDERABAD THE CIT(A) CENTRAL HYDERABAD 6 THE DR ITAT VISAKHAPATNAM. 7 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM