LAXMAN S. RAPOLU,DOMBIVALI vs. ITO 15(2)(1), MUMBAI

The only issue in appeal relates to the disallowance of the assessee-appellants’ claim for franchise fees, claimed to be paid in the sum of Rs.5,92,500/-, in the computation of his business income. The brief facts of the case are that the assessee, an individual, engaged in the business of data entry, claimed to have paid the impugned sum to one, Mr. Ravi Kumar, for getting business. It was explained by him in the assessment proceedings (vide letter dated 26.12.2011), that though he initially

(A.Y. 2009-10) Laxman S. Rapolu vs. ITO got some business through the said person, thereafter Ravi Kumar disappeared and was not traceable. Notice u/s. 133(6) (dated 26.9.2011) sent to the said party earlier had came back un-served, with the postal remark ‘Unknown’. The assessee had failed to produce the said party. Under the circumstances, in view of the Assessing Officer (A.O.), neither the genuineness of the said party nor of the assessee’s claim was proved. He, accordingly, disallowed the same. No improvement in his case being made in the first appellate proceedings, the same stood confirmed in appeal, so that the assessee, aggrieved, is in second appeal.

During hearing, as in the past, the assessee’s brother, Sh. Ramulu Rapolu, attended. The assessee, he would submit, has not been able to engage any counsel, even as he had approached as many as four CAs. This is as on an earlier occasion adjournment had been sought on that ground. The hearing may, therefore, be proceeded with; his brother, who had authorized him (letter on record), continuing to be not well. In canvassing the case, the facts with which he was well conversant, the assessee’s case, he clarified, continued to be the same as before the Revenue authorities. That is, that the assessee had been duped. The ld. Departmental Representative (DR), on the other hand, pleaded that the assessee’s case continued to be wholly unsubstantiated; rather, only a make-believe.

The parties have been heard, and the material on record perused. The only evidence adduced by the assessee, as gathered from the reading of the assessment and the impugned order; the assessee having not adduced any materials before the Tribunal, is toward the impugned payment being made by a bank draft. Even though stated to be to the said Ravi Kumar, even this cannot be said to be proved. Even so, who is this person, and what are his antecedents? How was he in a position to get the business to the assessee, as where the assessee participated in a tendering process, in which the said person had or could played a part? Was there any past association with him? What is the basis of the amount worked out, which is paid not in a round sum, and admittedly without any agreement or contract? What business