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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI V. DURGA RAO, HON’BLE & SHRI D.S. SUNDER SINGH, HON’BLEShri G.V.N. Hari – Advocate. Shri Guruswamy – Sr.DR
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. 27/VIZ/2018 (Asst. Year : 2004-05) Y. Subba Rao, vs. ACIT, Circle-1, Prop. M/s. Lakshmi Hardware, Eluru. Near Municipal Office, Main Bazar, Eluru, W.G. District. PAN No. AANPY 4801 E (Appellant) (Respondent) Assessee by : Shri G.V.N. Hari – Advocate. Department By : Shri Guruswamy – Sr.DR
Date of hearing : 11/09/2018. Date of pronouncement : 05/10/2018.
O R D E R PER V. DURGA RAO, JUDICIAL MEMBER
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), Tirupati, dated 28/12/2017 for the Assessment Year 2004-05. 2. Ground Nos. 1 & 4 are general in nature, no adjudication is required, therefore same are dismissed. 3. Ground No. 3 is not pressed, therefore same is dismissed. 4. Ground No. 2 relates to addition of Rs. 1,68,000/- towards unexplained investment.
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In the assessment order, the Assessing Officer has noted that during the year under consideration, the assessee has invested capital of Rs. 1,83,000/-, the details of which are as follows:- Date Firm Name Amount. 09/08/2003 M/s. Laxmi Hardware, Eluru Rs. 15,000 (Proprietor concern) 19/08/2003 - do - Rs. 10,000 26/08/2003 - do - Rs. 19,000 16/09/2003 - do - Rs. 15,000 29/09/2003 - do - Rs. 19,000 16/10/2003 - do - Rs. 19,000 21/10/2003 - do - Rs. 15,000 19/11/2003 - do - Rs. 18,000 15/12/2003 - do - Rs. 15,000 13/01/2004 - do - Rs. 19,000 02/09/2003 M/s. Laxmi Mirror Industries Rs. 19,000 (Partner) Total Rs. 1,83,000
The assessee was asked to explain the source of above investment with supportive evidence. As the assessee has not explained anything before the Assessing Officer, the entire investment of Rs. 1,83,000/- is treated as deemed income of the assessee under section 69 of the Act. 6. On appeal before the ld. CIT(A), the assessee has explained the source for the investment of Rs. 15,000/-. Therefore, ld.CIT(A) by considering the same, directed the Assessing Officer to restrict the addition to Rs. 1,68,000/-.
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On being aggrieved, assessee carried the matter in appeal before the Tribunal. 8. Ld. counsel for the assessee has submitted that the Assessing Officer has wrongly made the addition under section 69 of the Act. 9. Ld. Departmental Representative has strongly supported the orders passed by the authorities below. 10. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. 11. The assessee has invested an amount of Rs. 1,83,000/-. When the Assessing Officer asked the assessee to explain the source for the investment, he has not given any explanation. Therefore, the Assessing Officer by invoking the provisions of section 69 of the Act, the entire amount is added to the total income of the assessee. On appeal before the ld. CIT(A), the assessee has explained the source for the investment of Rs.15,000/-, therefore, ld. CIT(A) by considering the same, directed the Assessing Officer to restrict the disallowance of Rs.1,68,000/- (Rs. 1,83,000 – Rs. 15,000). Even before us, the assessee is not able to explain the source of investment, therefore we find that the ld. CIT(A) correctly confirmed the order of the
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Assessing Officer. For the sake of convenience, the operative part of the ld. CIT(A)’s order is extracted as under:-
“8.2 I have considered the findings of the AO and also submissions made by the assessee carefully. The AO should have accepted the cash contribution received from M/s.Lakshmi Mirror Industries of Rs.15,000/- reflected in the capital account of the assessee, as the same is reflected in the accounts. However, in respect of other amounts, in different names, no evidence was furnished before the AO. In the course of appellate proceedings, the appellant has furnished the confirmation letters from various persons without giving full address of the parties, all the parties were stated to be farmers doing agricultural activities. However, no proof was submitted about the agricultural activities carried out by them, if any. The letters of confirmation submitted by the appellant do not mention about charging of interest and tenure of loan, if any. No prudent person would extend loan to the assessee for unlimited period without charging any interest. It is pertinent to mention here that the appellant had not mentioned these amounts as loans outstanding in the books as loan received from various parties, and repayable after certain period. No evidence was also furnished by the appellant as to when these amounts were repaid by the assessee. Therefore, the entire claim made by the assessee before the undersigned about the balance capital contribution recorded in the accounts of Rs.1,68,000I- (183000-15000) is false. Therefore, the AO is directed to restrict the addition to Rs.1 ,68,000/-. This ground of appeal is partly allowed.” 12. By considering the above, we find no infirmity in the order passed by the ld. CIT(A). Thus, this appeal filed by the assessee is dismissed. 13. In the result, appeal filed by the assessee is dismissed. Order Pronounced in open Court on this 05th day of Oct., 2018. Sd/- sd/- (D.S. SUNDER SINGH) (V. DURGA RAO) Accountant Member Judicial Member Dated : 05th Oct., 2018.
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vr/- Copy to: 1. The Assessee–Y. Subba Rao, Prop. M/s. Lakshmi Hardware, Near Municipal Office, Main Bazar, Eluru, W.G. District. 2. The Revenue – ACIT, Circle-1, Eluru. 3. The Pr.CIT, Rajahmundry. 4. The CIT(A), Tirupati. 5. The D.R., Visakhapatnam. 6. Guard file. By order
(VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Visakhapatnam.