ITO, WARD-1(1), GUNTUR vs. SRI SIVA NAGI REDDY VAZRALA,, GUNTUR

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, HON’BLE ACCOUNTANT MEMBER ITA No. 15/VIZ/2018 (Asst. Year : 2013-14) ITO, Ward-1(1), vs. Sri Siva Nagi Reddy Vazrala, Guntur. D.No. 3-92, Ankireddypalem, Guntur Rural, Guntur District PAN No. AMDPV 6655 M (Appellant) (Respondent)

C.O.No. 67/VIZ/2018 (Arising out of ITA No. 15/VIZ/2018) (Asst. Year : 2013-14) Sri Siva Nagi Reddy Vazrala, vs. ITO, Ward-1(1), D.No. 3-92, Ankireddypalem, Guntur. Guntur Rural, Guntur District. PAN No. AMDPV 6655 M (Appellant) (Respondent) Assessee by : Shri G.V.N. Hari – Advocate. Department By : Smt. Suman Malik – Sr.DR Date of hearing : 29/04/2019. Date of pronouncement : 03/05/2019. O R D E R PER V. DURGA RAO, JUDICIAL MEMBER

This appeal by the Revenue and the cross objection by the assessee are directed against the order of Commissioner of

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Income Tax (Appeals)-1, Guntur, dated 13/12/2017 for the Assessment Year 2013-14. 2. Facts of the case, in brief, are that the assessee is an individual dealing with cotton business, filed his return of income by declaring total income of Rs. 2,77,720/-. The return filed by the assessee was processed under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as 'Act'). Subsequently, case of the assessee was selected for scrutiny through CASS. The Assessing Officer has issued notices to the assessee as per law by calling details in respect of sundry creditors and also gift received. The assessee neither filed the details nor appeared before the Assessing Officer. Therefore, the Assessing Officer has completed the assessment under section 143(3) r.w.s. 144 of the Act on 27/03/2015 by adding sundry creditors of Rs. 2,05,93,358/- and also the addition on account of gifts of Rs. 12.00 lakhs. 3. On appeal before the ld. CIT(A), the assessee has raised a ground in respect of sundry creditors and submitted that the addition made by the Assessing Officer is not correct and filed relevant details. The ld. CIT(A) has called the remand report from the Assessing Officer by letter dated 30/12/2016 and accordingly the Assessing Officer has submitted the remand report which is as follows:-

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"After hearing the contentions of the assessee and going through the written submissions filed by the assessee, the following additions made in the assessment order is verified are as under: 1. Sundry Creditors: The then AO in the assessment order dated 27.03.2015 has mentioned that "confirmations and the facts of the credits are not furnished and hence added back to the income returned - R5.2,05,93,358/-." During the course of remand proceedings the AR of the assessee has produced the books of account, bills & vouchers and the same is verified in respect to the sundry creditors as per balance sheet. Evidence for bills for purchases and VAT returns are also verified and found purchases made from the creditors are genuine. Hence, the sundry creditors as appearing as per balance sheet are found to be genuine." In the light of the above, as the assessee produced evidences for sundry creditors before the AO in the remand proceedings wherein the AO also accepted the genuineness of these creditors, the addition made is hereby deleted.” 4. The ld. CIT(A) by considering the remand report submitted by the Assessing Officer wherein the Assessing Officer specifically accepted that the sundry creditors as appearing in the balance sheet are genuine. Accordingly, he deleted the addition. We find no reason to interfere with the order passed by the ld. CIT(A). Thus, this ground of appeal raised by the revenue is dismissed. 5. So far as addition in respect of gift received of Rs. 12.00 lakh also, the ld. CIT(A) called the remand report. The relevant portion of the remand report is reproduced as under:-

“1. Amount not credited to P&L Account: The then AO in the assessment order dated 2703.2015 has mentioned that "amount not credited to P&L account (the nature of the amount and reasons for having not credited in P&L account not furnished hence added back to the income returned - R5.12, 00, 000/-)."

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During the course of remand proceedings the AR of the assessee could not prove the genuineness by producing evidences that the amount received by the donor was gifted by his grandmother, which was accounted for in the books of account after a gap three years. And also the said amount received by the donor in partition as per partition deed was only Rs. 10,00,000/-. Therefore, it is submitted that in the light of the above circumstances the claim of gift Rs.12,00,000/- by the assessee claimed to have been received from Smt. V. Seeteravamma is not proved."

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of the donor i.e. the donor has received Rs. 10.00 lakhs on account of partition, this fact was not doubted by the Assessing Officer. Even before us, the ld. Departmental Representative has not brought any material on record to show that the donor is not having capacity to gift an amount of Rs. 10.00 lakhs. Under these facts and circumstances of the case, we find no reason to interfere with the order passed by the ld. CIT(A). Thus, this ground of appeal raised by the Revenue is dismissed. 7. Insofar as one of the grounds raised by the Revenue in respect of violation of Rule 46A. We find that there is no violation of Rule 46A in this case. Therefore, this ground of appeal raised by the Revenue is dismissed. 8. Cross Objection filed by the assessee is barred by limitation by 109 days. No application for condition of delay is filed and no court fee is filed. Therefore, this C.O. filed by the assessee is dismissed in limini. 9. In the result, appeal filed by the Revenue and the C.O. filed by the assessee are dismissed. Order Pronounced in open Court on this 03rd day of May, 2019. Sd/- sd/- (D.S. SUNDER SINGH) (V. DURGA RAO) Accountant Member Judicial Member Dated: 03rd May, 2019. vr/-

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Copy to: 1. The Assessee - Sri Siva Nagi Reddy Vazrala, D.No. 3- 92, Ankireddypalem, Guntur Rural, Guntur District. 2. The Revenue – ITO,Ward-1(1), Guntur. 3. The Pr.CIT, Guntur. 4. The CIT(A)-1, Guntur. 5. The D.R., Visakhapatnam. 6. Guard file. By order

(VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Visakhapatnam.