ASSISTANT COMMISSIONER OF INCOME TAX, RAJAMAHENDRAVARAM vs. SEETHA VENKATA LAKSHMI RAVIPATI, RAJAHMUNDRY
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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
Per contra, The Learned Authorized Representative [“Ld. AR”] argued that the assessee is in the business of finance and has taken refinancing from Shri Ram City Union Finance. It was further submitted by the Ld. AR that the amount from Shri Ram City Union Finance is a liability of the assessee which was also disclosed in the balance sheet. Further, the Ld. AR also submitted that this liability was added back to the capital account of the assessee to project a better capital infusement by
5 the proprietor. It was further argued that being a proprietary concern, the assessee provisionally liable for any liability and hence grouping of liability to Shri Ram City Union Finance for Rs. 5,89,79,965/- cannot be considered as unexplained and taxed by invoking the provisions of section 68 r.w.s 115BBE of the Act. The Ld. AR further pleaded that the Ld. Revenue Authorities have not disputed the loan amount availed by the assessee and a mere grouping of the loan with the capital account does not mean that the loan remains unexplained. He therefore pleaded that the order of the Ld. CIT(A)-NFAC be upheld.
We have heard both the sides and perused material available on record as well as the orders of the Ld. Revenue Authorities. It is an undisputed fact that the assessee has taken a loan from Shri Ram City Union Finance which is evidenced from page 109 of the paper book submitted by the assessee. It is also undisputed that this loan amount was added to the capital account of the assessee in order to present better statement of account of the assessee. The Revenue has not disputed the loan amount taken by the assessee from Shri Ram City Union Finance but has only contested the clubbing of the loan account with the capital account and thereby treating it as unexplained income in
6 the hands of the assessee. There is no merit in the argument of the Ld. DR that since there is a waiver of the loan account, it shall be taxed U/s. 68 r.w.s 115BBE of the Act. In the instant case since the outstanding amount to Shri Ram City Union Finance was not disputed by the Revenue, it cannot not be considered as a ground for considering the clubbing of the outstanding amount with the capital account as unexplained and subject it to tax U/s. 68 r.w.s 115BBE of the Act. We therefore are inclined to dismiss the ground raised by the Revenue as there is no merit in treating the amount of Rs. 5,89,79,965/- as unexplained U/s. 68 r.w.s 115BBE of the Act.
In the result, appeal of the Revenue is dismissed.
Pronounced in the open Court on 13th June, 2024.
Sd/- Sd/- (दुव्िूरु आर. एल रेड्डी) (एस बालाकृष्णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) न्याययकसदस्य/JUDICIAL MEMBER लेखासदस्य/ACCOUNTANT MEMBER Dated :13.06.2024 OKK - SPS
7 आदेशकीप्रतिलिपिअग्रेपिि/Copy of the order forwarded to:- निर्धाररती/ The Assessee–Seetha Venkata Lakshmi Ravipati, D.No. 7- 1. 30-40 & 41, Main Road Opp. Manikanta Book Stall, Rajahmundry – 533101, Andhra Pradesh, India. रधजस्व/The Revenue –Asst. Commissioner of Income Tax, Circle-1, 2. Rajamahendravaram Range, Rajamahendravaram, Andhra Pradesh – 533105. 3. The Principal Commissioner of Income Tax, आयकरआयुक्त (अपील)/ The Commissioner of Income Tax 4. ववभधगीयप्रनतनिधर्, आयकरअपीलीयअधर्करण, ववशधखधपटणम/ DR,ITAT, 5. Visakhapatnam गधर्ाफ़धईल / Guard file 6. आदेशधिुसधर / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam
