Itta/530/2010 Of Smt. Narra Rajani v. Income Tax Officer

THE HON’BLE SRI JUSTICE V.V.S.RAOANDTHE HON’BLE SRI JUSTICE RAMESH RANGANATHAN INCOME TAX TRIBUNAL APPEAL No.530 of 2010 July 28, 2011 Between: Smt.Narra Rajani, Venkayalapadu, Edlapadu, Guntur District … Appellant And Income Tax Officer, Ward 2(1), Guntur ... Respondent THE HON'BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHANINCOME TAX TRIBUNAL APPEAL No.530 of 2010 JUDGMENT:(Per Hon’ble Sri Justice V.V.S. Rao) The appeal under Section 260A of the Income Tax Act, 1961 isby the unsuccessful assessee who lost her case before the assessingofficer as well as the Commissioner of Income-tax (Appeals). The appellant is the proprietrix of M/s.Sri Satya Sai Fly Ash BrickIndustries. She filed her return, for the assessment year 2005-06,declaring her income as Rs.1,04,950/-. The case was taken up forscrutiny, and a notice was issued to her with regard to an amount ofRs.12,15,125/- shown as fresh/opening capital. She was asked toproduce the details. Her authorized representative appeared, andplaced justification for the unexplained opening capital. Records werenot produced. A notice dated 17.12.2007 was issued calling upon theappellant to show cause as to why the assessment should not becompleted by making additions to the return of income in so far ascapital is concerned. In response, the appellant’s authorizedrepresentative filed explanation. Not being satisfied with the same, theassessing officer made addition towards unexplained income ofRs.12,15,125/-, disallowed the claim to the extent of Rs.2,53,671/- and,accordingly, computed the tax. The Appellate Commissioner, however,agreed with the assessee in so far as Rs.3,95,000/- is concerned,(which was accepted as the opening capital from explained sources),restricted disallowance of the business income and, accordingly, partlyallowed the appeal. Not satisfied with the same, the appellant went inappeal before the Income Tax Appellate Tribunal, VisakhapatnamBench. The same having been dismissed by the impugned order, theappellant is before this Court. Placing reliance on CIT, Ernakulam v P.K.Noorjahan[[1]]theCounsel for the appellant vehemently contends that she had properlyexplained the sources of the opening capital; and the assessing officeras well as Appellate Commissioner failed to consider the explanation ofthe appellant properly. There is no dispute that the appellant has shown Rs.12,15,125/-as the opening capital in the return filed showing her income frombusiness. In such an event, the entire burden is on her to explain thesources of the amount invested as opening capital. Though theappellant claimed that she had received Rs.2,00,000/- at the time of hermarriage from her parents, and that she owns agricultural land fromwhich she used to earn Rs.10,000/- to Rs.14,000/- per annum since 1994-95, no evidence whatsoever was placed before the assessingofficer. Therefore the assessing officer, as well as the AppellateCommissioner, drew appropriate inference which cannot be treated asperverse. In the absence of any proof in support of her claim, that shehad received gifts, and interest by rotation of the gift amount, it wasproper for the assessing officer to treat the investment made towardsopening capital as an unexplained source of income. The issueinvolved is one of fact, and no question of law is involved in this case. The Income Tax Tribunal Appeal is, therefore, dismissed. Thereshall be no order as to costs. _______________ (V.V.S.RAO, J) July 28, 2011YS ______________________________ (RAMESH RANGANATHAN, J) [1](1997) 11 SCC 198