Sri K Balakrishna Rao., Vijayawada v. The Ad CIT, Range-1., Vijayawada

ITA 626/VIZ/2008 | 2005-2006
Pronouncement Date: 28-01-2010 | Result: Allowed

Appeal Details

RSA Number 62625314 RSA 2008
Assessee PAN ACWPK3509N
Bench Visakhapatnam
Appeal Number ITA 626/VIZ/2008
Duration Of Justice 1 year(s) 2 month(s) 9 day(s)
Appellant Sri K Balakrishna Rao., Vijayawada
Respondent The Ad CIT, Range-1., Vijayawada
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 28-01-2010
Assessment Year 2005-2006
Appeal Filed On 19-11-2008
Judgment Text
PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO. 625 /VIZAG/200 8 ASSESSMENT YEAR: 2005 - 06 K. CHANDRA SEKHAR PRASAD VIJAYAWADA VS. ACIT RANGE - 1 VIJAYAWADA (APPELLANT) (RESPONDENT) PAN NO: ACWPK 3509 N ITA NO. 626 /VI Z AG/200 8 ASSESSMENT YEAR: 2005 - 06 K. BALAKRISHNA RAO VIJAYAWADA VS. ACIT RANGEL - 1 VIJAYAWADA (APPELLANT) (RESPONDENT) PAN NO: ACRP K 6092 K APPELLANT BY: SHRI G.V.N. HARI CA RESPONDENT BY: SHRI G.S.S. GOPINATH DR ORDER PER SHRI B R BASKARAN ACCOUNTANT MEMBER: THESE APPEALS FILED AT THE INSTANCE OF THE ASSESSES ARE DIRECTED AGAINST THE ORDER PASSED BY THE LD CIT (A) VIJAYAWA DA IN THEIR RESPECTIVE HANDS AND THEY RELATE TO THE ASSESSMENT YEAR 2005-0 6. SINCE BOTH THE APPEALS WERE HEARD TOGETHER AND FURTHER THE ISSUES R AISED IN THESE TWO APPEALS ARE IDENTICAL IN NATURE WE FIND IT CONVENIE NT TO DISPOSE THEM OF BY THIS COMMON ORDER. 2. THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCO UNT OF CASH DEFICIT FOR MEETING THE EXPENSES HAVING BEEN CONFIRMED BY T HE LD CIT (A) THESE ASSESSEES ARE IN APPEAL BEFORE US. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. BOTH THE ASSESSEES ARE DIRECTORS OF A COMPANY NAMED M/S CHEMCEL BIOTEC H LTD. VIJAYAWADA. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS RELA TING TO THE ASSESSMENT YEAR 2005-06 BOTH THE ASSESSEES WERE ASKED TO FURNI SH INFORMATION ABOUT THE BANK ACCOUNT EXPENDITURE INCURRED THROUGH CRED IT CARDS AND HOUSEHOLD EXPENSES. BOTH THE ASSESSEES WERE ALSO REQUESTED TO FURNISH THE CASH FLOW STATEMENT FOR THE YEAR UNDER CONSIDERATION. THOUGH BOTH THE ASSESSEES PAGE 2 OF 3 FURNISHED THE INFORMATION ABOUT THEIR BANK ACCOUNT AN D CREDIT CARDS THEY DID NOT FILE CASH FLOW STATEMENT. HENCE THE AO PREPA RED A CASH FLOW STATEMENT ON THE BASIS OF TRANSACTIONS FOUND IN BANK ACCOUNTS AND CREDIT CARD STATEMENTS. ACCORDINGLY THE AO DETERMINED A CA SH DEFICIT OF RS.5 53 850/- IN THE HANDS OF K. CHANDRASEKHARA RAO AND RS.4 15 080/- IN THE HANDS OF SHRI K. BALAKRISHNA RAO. BEFORE THE ASSE SSING OFFICER BOTH THE ASSESSEES AGREED FOR ADDITION OF THE DEFICIT AMOUNT DETERMINED BY THE AO. HOWEVER THEY PREFERRED APPEALS BEFORE THE LD CIT (A ) CONTESTING THE SAID ADDITION. BEFORE THE FIRST APPELLATE AUTHORITY THES E ASSESSEES FILED CASH FLOW STATEMENT OF THE PREVIOUS FOUR YEARS AND SUBMITTED T HE RECEIPTS AND PAYMENTS ACCOUNT PREPARED BY THE AO DOES NOT REFLECT THE ACTUAL POSITION. HOWEVER SINCE THE ASSESSEES HAD AGREED FOR THE ADD ITION BEFORE THE AO THE LD CIT (A) DISMISSED THE APPEALS. AGGRIEVED BY THE ORDER OF THE LD CIT (A) BOTH THE ASSESSEES ARE ON APPEAL BEFORE US. 4. THE LD AR SUBMITTED THAT THE ASSESSMENT PROCEEDI NGS WERE CARRIED OUT AT THE FAG END OF THE LIMITATION PERIOD AND THE ASSESSES DID NOT HAVE ENOUGH TIME TO PREPARE THE CASH FLOW STATEMENT AS RE QUESTED BY THE AO. SINCE THE ASSESSEES WERE NOT CARRYING ANY BUSINESS THEY DEPENDED UPON A CLERK FOR PREPARING RECEIPTS AND PAYMENT ACCOUNTS A ND HENCE THEY COULD NOT FILE THE SAME BEFORE THE AO WITHIN THE SHORT TIME AL LOWED. DUE TO SHORTAGE OF TIME AND MENTAL TENSION THESE ASSESSEES INITIALL Y AGREED TO THE ADDITION THOUGH SUFFICIENT CASH BALANCE WERE AVAILABLE FOR EXPL AINING THE VARIOUS EXPENDITURES. BEFORE THE LD CIT (A) THESE ASSESSEES HAVE PREPARED CASH FLOW STATEMENT OF THE PREVIOUS FOUR YEARS AND REQUEST ED THE LD CIT (A) TO CONSIDER THE SAME. THE LD AR FURTHER SUBMITTED THAT THESE ASSESSES ARE HAVING DOCUMENTARY PROOF WITH REGARD TO ALL RECEIPTS AND ACCORDINGLY PRAYED THAT THE MATTER BE SET ASIDE TO THE FILE OF T HE ASSESSING OFFICER FOR CONSIDERATION OF THE ISSUE AFRESH. THE LD DR DID NO T OBJECT TO THE PRAYER MADE BY THE COUNSEL OF THE ASSESSEES. 5. WE NOTICE FROM THE ASSESSMENT ORDER THAT THE ASSE SSING OFFICER CONDUCTED THE HEARING ON 24.12.2007 AND 29.12.2007 AND COMPLETED THE ASSESSMENT ON 31.12.2007. HENCE AS SUBMITTED BY TH E LD AR THE ASSESSEES WERE NOT PROVIDED WITH SUFFICIENT TIME FOR FURNISHING THE CASH FLOW STATEMENT. THE ASSESSEE HAS SUFFICIENTLY EXPLAINED T HE REASONS FOR AGREEING TO THE ADDITION INITIALLY. THE ASSESSEE HAS PREPARE D THE CASH FLOW STATEMENT PAGE 3 OF 3 AND ACCORDING TO THE ASSESSEE ALL THE RECEIPTS SHOW N IN THAT STATEMENT ARE SUPPORTED BY THE DOCUMENTARY EVIDENCE. ACCORDING T O LD AR THE CASH FLOW STATEMENT PREPARED BY THE AO DOES NOT DEPICT TRUE P OSITION. HENCE HAVING REGARD TO THE SUBMISSIONS MADE BY THE LD AR AND AFTE R HEARING THE VIEW OF THE LD DR WE SET ASIDE THE MATTER TO THE FILES OF T HE AO WITH DIRECTION TO CONSIDER THE CASH FLOW STATEMENT FURNISHED BY THE ASS ESSEE BEFORE THE LD CIT (A) AND ADJUDICATE THE ISSUE AFRESH IN ACCORDAN CE WITH THE LAW AFTER GIVING SUFFICIENT OPPORTUNITY OF BEING HEARD. 6. IN THE RESULT THE APPEALS FILED BY BOTH THE ASSE SSEES ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 28-01-2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM 28 TH JANUARY 2010. COPY TO 1 SHRI K. CHANDRA SEKHARA PRASAD 10 1 SINDHURA APARTMENTS GAYATRINAGAR VIJAYAWADA 2 SHRI K. BALAKRISHNA RAO 101 SINDHURA APARTMENTS GAYATRINAGAR VIJAYAWADA 3 THE ACIT RANGE - 1 VIJAYAWADA 4 AGRICULTURAL MARKET COMMITTEE VISAKHAPATNAM 5 THE CIT (A) VIJAYAWADA 6 THE CIT VIJAYAWAD A 7 THE DR ITAT VISAKHAPATNAM 8 GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM