Itta/296/2003 Of M/S.k.anjit Rao And Others v. The Income Tax Officer

* THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM+ I.T.T.A.No.296 of 2003 %Date: 05.11.2014#M/s. K.Anjit Rao.…appellant.and$ ITO, Ward 3, Karimnagar.…Respondent.! Counsel for appellant: Sri A.V.Krishna Kaundinya^ Counsel for Respondent : Sri S.R.Ashok< GIST:> HEAD NOTE:? Cases referred THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM I.T.T.A.No.296 of 2003 JUDGMENT:(Per the Hon’ble Sri Justice L.Narasimha Reddy) The appellant is a partnership firm. During the assessmentyear 1989-90, it was undertaking the business in purchase and saleof arrack. In the return filed by it, it has shown income ofRs.6,41,380/-. The Assessing Officer issued a notice under Section143(2) of the Income Tax Act, 1961 (for short ‘the Act’), and aftertaking into account, the remarks offered by the appellant, he passedan order, dated 27.03.1992. The Assessing Officer made anaddition of Rs.2,48,250/- towards suppression of sales and a sum ofRs.2,36,556/- was disallowed as expenditure, on the ground thatthey are not supported by proper vouchers, and accordingly, theincome tax was levied. The appellant filed an appeal before the Commissioner ofIncome Tax (Appeals), aggrieved by the order of assessment. Theappeal was dismissed through order, dated 16.08.2002. Thereupon,the appellant filed I.T.A.No.935/Hyd/2002 before the HyderabadBench ‘B’ of the Income Tax Appellate Tribunal. The appeal wasdismissed on 13.03.2003. Hence, this further appeal under Section260A of the Act. Heard Sri A.V.Krishna Kaundinya, learned counsel for theappellant, and Sri S.R.Ashok, learned counsel for the respondent. The principal contention urged by the appellant is that, oncean Assessing Officer has disbelieved the books of account, he oughtnot to have dealt with the facts and figures mentioned therein, for thepurpose of disallowing certain claims. However, the facts borne outby record do not support this contention. Nowhere in theproceedings, the Assessing Officer stated that he did not believe thebooks of account. He took certain important facts, such as the quantity of the liquor, sale price, purchase price mentioned therein,into account. The fact that he increased the sale price and reducedthe purchase price by one rupee, each, does not amount to thedisbelief of the books of accounts. In case the appellant has anyproof to show that the sale price and purchase price, as mentioned inthe books of account was correct, he could have relied upon thesame, even before the appellate authority or the Tribunal. The disbelief of vouchers in relation to certain items ofexpenditure, does not lead to the conclusion that the AssessingOfficer has disbelieved the books of account altogether. Theacceptance of books of account by an Assessing Officer does notlead to a conclusion that all the entries made therein must be takenon their face value. In a given case, certain entries in the books ofaccount, may not be treated as correct, and it is always for theassessee to convince the concerned officials, as to the accuracy ofthe entries in the books of account. Once it emerges that the Assessing Officer did not disbelievethe books of account, the findings of fact recorded by him and upheldby the Commissioner of Appeals and the Tribunal, cannot constitutethe subject-matter of a further appeal under Section 260A of the Act. The appeal is accordingly dismissed. There shall be no orderas to costs. The miscellaneous petitions filed in this appeal shall alsostand disposed of. ____________________ _____________________ CHALLA KODANDA RAM, J. Date:05.11.2014L.R. copy to be marked.GJ