Pokuari Koteswara Rao, Vijayawada V. ITO, Ward - 1(1), Vijayawada

CO 21/VIZ/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8448 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 17-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 18-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Keywords: Unexplained expenditure; Peak credit; Additional evidence; TDS; Set aside
• Section: 40(a)(ia); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 498 / VIZ /201 7 (ASST. YEAR: 20 12 - 13 ) ITO, WARD - 1(1), VIJAYAWADA. V S . POKURI KOTESWARA RAO, 2 ND FLOOR , C.R. BUILDINGS, NEAR ROYT BAZAR , BANDAR ROAD ,VIJAYAWADA. PAN NO. AENPP 0062 J (APPELLANT) (RESPONDENT) C.O.NO. 21/VIZ/2018 (ARISING OUT OF ITA NO. 498 / VIZ /201 7) (ASST. YEAR : 20 12 - 13 ) POKURI KOTESWARA RAO, 2 ND FLOOR, C.R. BUILDINGS, NEAR ROYT BAZAR, BANDAR ROAD, VIJAYAWADA. VS. ITO, WARD - 1(1), VIJAYAWADA. PAN NO. AENPP 0062 J (APPL ICANT ) (RESPONDENT) ASSESSEE BY : NONE . DEPARTMENT BY : SMT. SUMAN MALIK SR. DR DATE OF HEARING : 04 / 0 7 /201 9 . DATE OF PRONOUNCEMENT : 17 / 0 7 /201 9 . O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER TH IS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF 2 ITA NO. 498/VIZ/2017 C.O.NO.21/VIZ/2018 ( POKURI KOTESWARA RAO ) INCOME TAX (APPEALS) , VIJAYAWADA , DATED 24 /0 3 /201 7 FOR THE ASSESSMENT YEAR 20 12 - 13 . THE REVENUE FILED REVISED GROUNDS OF APPEAL DURING PENDENCY OF APPEAL WHICH READS AS UNDER: 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1) THE ORDER OF THE CIT(A) IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2) THE ORDER OF THE CIT(A) IS ERRONEOUS BOTH IN LAW AND ALSO ON FACTS AND CIRCUMSTANCES OF THE CASE. 3) THE LD. CIT(A) WHILE GIVING RELIEF OF RS. 28,85,394/ - ERRED IN INCLUDING THE LOAN CREDITORS G. JAYALAKSHMI (RS.4,50,000/ - ), P.L.V. LALITHAKUMARI (RS. 34,000/ - ) AND P. SRINIVASA RAO (RS. 3,000/ - ) WITHOUT THE CONFIRMATION LETTERS FOR THE AMOUNTS BORROWED BY THE ASSESSEE DURING THE FINANCIAL YEAR. 4) THE CIT(A) OUGHT TO HAVE APPRECIATED THAT, EVEN DURING THE COURSE OF REMAND REPORT THE DETAILS OF FREIGHT EXPENDITURE WITH REFERENCE TO TDS MADE HAVE NOT BEEN FURNISHED EVEN BEFORE THE AO. HENCE, THE CIT(A) OUGHT TO HAVE UPHELD THE ADDITION EVEN GOING BY GENUINENESS OR BY APPLYING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 5) THE CIT(A) ERRED IN CONSIDERING THAT, THE TOTAL OF THE FREIGHT PAYMENTS, EACH EXCEEDING THE THRESHOLD LIMIT OF RS.30,000/ - FOR THE PURPOSE OF TDS, AT R S. 3,26,740/ - AS AGAINST RS. 9,32,165/ - , THEREBY GIVING EXCESS RELIEF OF RS.6,05,425/ - 6) THE CIT(A) OUGHT TO HAVE CONSIDERED THAT, WITH REFERENCE TO THE ADDITION OF RS. 129.25 LAKHS, ONCE THE CIT(A) HAS GIVEN A FIND THAT, THE SOURCES FOR THE SAME I.E., CASH SALES AMOUNTING TO RS. 187.3 LAKHS IS NOT SUPPORTED BY ANY EVIDENCE , THE CIT(A) SHOULD HAVE ENHANCED THE ADDITION FROM RS. 129.25 LAKHS TO RS. 187.3 LAKHS. 7) ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 3 . GROUND NOS. 1, 2 & 7 ARE GENERAL IN NATURE, WHICH DO NOT REQUIRE ANY SPECIFIC ADJUDICATION. 3 ITA NO. 498/VIZ/2017 C.O.NO.21/VIZ/2018 ( POKURI KOTESWARA RAO ) 4 . GROUND NO.3 IS RELATED TO THE ADDITION OF UNSECURED LOANS RECEIVED FROM G.JAYALAKSHMI RS. 4.50 LAKHS, P.L.V. LALITHAKUMARI RS. 34,000/ - AND P. SRINIVASA RAO RS. 3,000/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER FOUND TH A T THE ASSESSEE HAD RECEIVED THE AGGREGATE UNSECURED LOANS OF RS. 28,85,294/ - FROM 13 PERSONS AND THE SAME WAS ADDED BACK TO THE INCOME AS UNEXPLAINED LOANS , S INCE , THE ASSESSEE DID NOT FURNISH THE REQUIRED INFORMATION IN SPITE OF GIVING OPPORTUNITIES. 5 . AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE WENT ON APPEAL BEFORE THE LD. CIT(A) . THE LD. CIT(A) EXAMINED THE CASE AND THE SUBMISSION S MADE DURING THE APPELLATE PROCEEDINGS AND FOUND THAT OUT OF TOTAL 13 CREDITORS, SERIAL NOS. 2 TO 11 & 13 WERE BROUGHT FORWARD CREDITORS AND RECEIVED T H E L O A N S IN EARLIER YEARS, HENCE, THE LD. CIT(A) HELD THAT THE ASSESSING OFFICER IS NOT PERMITTED TO MAKE THE ADDITION IN THE IMPUGNED ASSESSMENT YEAR. ACCORDINGLY, DELETED THE ADDITION RELATING TO THE CREDITOR S IN SERIAL NOS . 2 TO 11 & 13 . THE LOANS RECEIVED FROM FROM G.JAYALAKSHMI RS. 4.50 LAKHS, P.L.V. LALITHAKUMARI RS.34,000/ - AND P. SRINIVASA RAO RS. 3,000/ - WERE ALS O FOUND TO BE IN THE LIST OF BROUGHT FORWARD LOANS IN SERIAL NUMBER 2, 5 AND 8 RESPECTIVELY. 4 ITA NO. 498/VIZ/2017 C.O.NO.21/VIZ/2018 ( POKURI KOTESWARA RAO ) 6 . AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL CHALLENGING THE DELETION OF ADDITION IN RESPECT OF LOANS RECEIVED FROM G.JAYALAKSHMI RS. 4.50 LAKHS, P.L.V. LALITHAKUMARI RS. 34,000/ - AND P. SRINIVASA RAO RS. 3,000/ - STATING THAT SAID LOANS WERE STATED TO BE ACCEPTED DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. 7 . LD. DEPARTMENTAL REPRESENTATIVE ARGUED T HA T THE SAID UNSECURED LOANS WERE ACCEPTED DURING THE IMPUGNED ASSESSMENT YEAR AND THE ASSESSEE FAILED TO FURNISH THE CONFIRMATIONS FROM THE LOAN CREDITORS HENCE THE DELETION OF ADDITION IS INCORRECT . 8 . DURING THE APPEAL HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE. A S PER THE INFORMATION AVAILABLE ON RECORD, THE ASSESSEE IS IN JA I L AND THE SUBMISSIONS AND THE CROSS OBJECTION S W ERE ATTESTED BY THE JAILER, DISTRICT J AIL , VIJAYAWADA. 9 . WE HAVE GONE THROUGH THE SUBMISSIONS MADE BY THE L D.DR AND OBSERVE THAT THE LD. CIT(A) HAS GIVEN CATEGORICAL FI N DING THAT THE LOAN CREDITORS AT SERIAL NO. 2 TO 11 & 13 WERE THE OLD CREDITORS AND BROUGHT FORWARD FROM THE EARLIER YEARS . IN THE STATEMENT OF FACTS FILED BEFORE THE LD. CIT(A) ALSO, THE ASSESSEE SUBMITTED THAT THE LOAN CREDITORS AT SERIAL NOS. 2 TO 11 & 13 WERE BROUGHT FORWARD FR O M THE EARLIER YEARS . TH E ASSESSING OFFICER HAS SUBMITTED THE 5 ITA NO. 498/VIZ/2017 C.O.NO.21/VIZ/2018 ( POKURI KOTESWARA RAO ) REMAND REPORT AND DID NOT DISPUTE THE FACT THAT THE CREDITORS WERE BROUGHT FORWARD FROM EARLIER YEARS . DURING THE APPEAL HEARING ALSO THE DEPARTMENT DID NOT PLACE ANY EVIDENCE TO ESTABLISH THAT THE ASSESSEE HAS ACCEPTED THE LOAN IN THE IMPUGNED ASSESSMENT YEAR . THEREFORE , WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) AND THE SAME IS UPHELD AND THE REVENUES APPEAL ON THIS GROUND IS DISMISSED. 10 . GROUND NOS. 4 & 5 ARE RELATED TO THE ADDITION MADE U/SEC. 40(A)(IA) OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER FOUND TH A T THE ASSESSEE HAD INCURRED THE EXPENDITURE OF RS. 11,14,872/ - TOWARDS FREIGHT CHARGES (GUNNIES RS. 4,63,287/ - AND LORRY FREIGHT RS.6,51,585/ - ) . THE ASSESSEE DID NOT PRODUCE THE RELEVANT VOUCHERS AND THE DETAILS OF TDS MADE ON FREIGHT PAYMENTS. HENCE, THE ASSESSING OFFICER DISALLOWED THE ENTIRE EXPENDITURE OF RS. 11,14,872/ - AS UNEXPLAINED EXPENDITURE AND THE SAME WAS ADDED TO THE INCOME RETURNED. 1 1 . AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, ASSESSEE WENT ON APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) CALLED FOR THE REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSESSING OFFICER REITERATED THE CONTENTIONS AND OBSERVATIONS MADE IN THE ASSESSMENT ORDER AND SUBMITTED THE REMAND REPORT STATING THAT 6 ITA NO. 498/VIZ/2017 C.O.NO.21/VIZ/2018 ( POKURI KOTESWARA RAO ) THE ASSESSEE DID NOT PRODUCE ANY DETAILS WITH REGARD TO DEDUCTION OF TDS ON THE FREIGHT CHARGES , HENCE, REQUESTED T O SUST AIN THE ADDITION . THE LD. CIT(A) VERIFIED THE DETAILS FILED BY THE ASSESSEE AND THE REMAND REPORT OF THE ASSESSING OFFICER AND FOUND TH A T OUT OF THE TOTAL AMOUNT OF RS. 11,14,872/ - , A SUM OF RS.3,26,740/ - WAS PAID IN EXCESS OF RS. 30,000/ - WHERE THE ASSESSEE REQUIRED TO DEDUCT TAX AT SOURCE AND THE PROVISIONS OF TDS APPLIES . THE LD.CIT(A) REJECTED THE ASSESSING OFFICERS REQUEST NOT TO ENTERTAIN THE ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES, 1962 IN VIEW OF THE PECULIAR SITUATION FACED B Y THE ASSESSEE THAT HE WAS UNDER REMAN D DUE TO INITIATION OF PROCEEDINGS BY ASSISTANT SUPPLY OFFICER , CIRCLE VIJAYAWADA. THE LD.CIT(A) CONFIRMED THE ADDITION OF RS.3,26,740/ - AND DELETED THE BALANCE AMOUNT OF ADDITION. 1 2 . AGAINST THE ORDER OF THE LD. CIT(A), THE RE VENUE IS IN APPEAL BEFORE THIS TRIBUNAL . 1 3. DURING THE APPEAL HEARING, LD. DEPARTMENTAL REPRESENTATIVE ARGUED THAT THE ORDER OF THE LD. CIT(A) IS NOT ACCEPTABLE ON THE GROUND THAT THE PAYMENTS TO THE TUNE OF RS. 9,32,165/ - ATTRACTS THE TDS , AND FOR BALANCE AMOUNT THE ASSESSEE DID NOT PRODUCE 7 ITA NO. 498/VIZ/2017 C.O.NO.21/VIZ/2018 ( POKURI KOTESWARA RAO ) ANY EVIDENCE, HENCE , REQUESTED TO SET ASIDE THE ORDER OF THE LD.CIT(A) AND CONFIRM THE ADDITION MADE BY THE ASSESSING OFFICER . 1 4. WE HAVE HEARD LD.DR AND FIND FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER DID NOT GIVE ANY SUCH FINDING WITH REGARD TO QUANTUM OF EXPENDITURE ON WHICH THE TDS REQUIRED TO BE DEDUCTED U/SEC. 194C OF THE ACT . E VEN IN THE REMAND REPORT, THE ASSESSING OFFICER DID NOT GIVE ANY BREAKUP OF THE EXPENDITURE WHICH IS PAID OVER AND ABOVE THE THRESHOLD LIMIT FOR DEDUCTION OF TAX AT SOURCE . DURING THE APPEAL HEARING ALSO THE DEPARTMENT DID NOT PLACE ANY EVIDENCE TO CONTROVERT THE FINDING OF THE LD.CIT(A). THEREFORE, WE ARE UNA BLE TO ACCEPT THE CONTENTION OF THE LD.DR THAT THE ASSESSEE MADE PAYMENTS TO THE TUNE OF RS. 9,32,165/ - OVER AND ABOVE THE THRESHOLD LIMIT OF TDS. I N VIEW OF THE PECULIAR SITUATION OF THE ASSESSEE, WE ARE ALSO NOT INCLINED TO REMIT THE MATTER BACK TO THE AS SESSING OFFICER SINCE NO FRUITFUL PURPOSE WOULD BE SERVED AS THE ASSESSEE IS IN JAIL AND NOT IN A POSITION TO SUB M IT THE REQUIRED DETAILS. AS VERIFIED FROM THE SUBMISSIONS OF THE ASSESSEE BEFORE THE LD. CIT(A) WE OBSERVE THAT THE TURNOVER OF THE ASSESSEE FOR THE IMMEDIATELY PRECEDING YEAR WAS RS. 6.52 CRORES FOR WHICH EXPENDITURE DEBITED AND ALLOWED BY THE ASSESSING OFFICER WAS RS. 6.25 LAK HS AND THE TURNOVER F OR YEAR UNDER 8 ITA NO. 498/VIZ/2017 C.O.NO.21/VIZ/2018 ( POKURI KOTESWARA RAO ) CONSIDERATION IS RS. 10.08 CRORE S AND THE EXPENDITURE CLAIMED I S RS. 11.15 LAK HS . TAKING INTO CONSIDERATION OF THE TURNOVER ADMITTED BY THE ASSESSEE AND ON COMPAR ISON WITH THE EARLIER YEARS EXPENDITURE , THE EXPENDITURE INCURRED APPEARS TO BE REASONABLE . H OWEVER, SINCE THE LD. CIT(A) HAS GIVEN A FINDING THAT THE ASSESSEE HAS MADE THE PAYMENTS IN EXCESS OF RS. 30,000/ - TO THE EXTENT OF RS. 3,26,740/ - AND THE ASSESSEE FAILED TO DEDUCT THE TAX AT SOURCE , W E UPHOLD THE ORDER OF THE LD. CIT(A) AND CONFIRM THE ADDITION OF RS. 3,26,740/ - . ACCORDINGLY, THE REVENUES APPEAL ON THIS GROUND IS DISMISSED. 1 5. GROUND NO.6 IS RELATED TO THE ADDITION OF RS. 129.25 LAKHS ADVANCE GIVEN BY THE ASSESSEE FROM UNEXPLAINED SOURCES . THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS GIVEN ADVANCE OF RS. 1,29,25,000/ - TO M/S. SRI LAK S HMI VENKATESWARA ENTERPRISES , VIJAYAWADA AND THE ENTIRE PAYMENT WAS MADE THROUGH R T GS/ CHEQUES . THE ASSESSING OFFICER FOUND THAT AS AND WHEN THE ASSESSEE HA S GIVEN THE ADVANCE TO THE BORROWER HE MADE THE CASH DEPOSIT IN THE BANK ACCOUNT AND ISSUED THE CHEQUES . SINCE THE CASH WAS DEP OSITED IMMEDIATELY BEFORE THE ISSUE/ ENCASHMENT OF CHEQUES THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE S OURCE S . THE ASSESSEE EXPLAINED THE SOURCE AS SALES OF GRAM 9 ITA NO. 498/VIZ/2017 C.O.NO.21/VIZ/2018 ( POKURI KOTESWARA RAO ) DALL , BUT COULD NOT FURNISH ANY EVIDENCE WITH THE PURCHASE BILLS/SALE BILLS . T HE ASSESSEE HA D DEPOSITED THE SUM OF RS. 70.00 LAKHS ON 05/03/2012 AND NO EVIDENCE WAS FURNISHED TO SHOW HE MADE PURCHASES TO MEET THE SALE S OF RS. 70.00 LAKHS ON 05/03/2012 . SIMILAR DEPOSITS W ERE MADE BEFORE ISSUE OF CHEQUES , BUT NO DETAILS OF SALES AND PURCHASES WERE FURNISHED B E F O R E T H E ASSESSING OFFICER . THE DEPOSITS MADE IN THE BANK ACCOUNT AND THE AMOUNTS ADVANCE D TO M/S. SRI LAKSHMI VENKATESWARA ENTERPRISES DID NOT MATCH WITH THE MATCHING SOURCE, THEREFORE THE ASSESSING OFFICER HELD THAT THE AMOUNT OF ADVANCE GIVEN TO THE BORROWER WAS FROM UNACCOUNTED SOURCE AND A CCORDINGLY, TREATED THE SAME AS UNEXPLAINED INCOME AND ADDED TO THE RETURNED INCOME. 1 6. AGAINST THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE WENT ON APPEAL BEFORE THE LD. CIT(A) . THE LD. CIT(A) EXAMINED THE EXPLANATION OF THE ASSESSEE WITH THE RELEVANT VOUCHERS , GST, CST RETURNS AND CASH BOOK AND FOUND THAT THE ASSESSEE HAS SHOWN HUGE SALES ON 02/08/2011, 03/09/2011 & 05/03/2011 AS UNDER: - VOUCHERS NO. DATE AMOUNT (CASH SALES IN RS.) CS1 02/08/2011 58,65,000 CS2 03/09/2011 58,65,000 CS3 05/03/2012 70,00,00 TOTAL 1,87,30,000 10 ITA NO. 498/VIZ/2017 C.O.NO.21/VIZ/2018 ( POKURI KOTESWARA RAO ) THE VOUCHERS WERE NOT IN REGULAR SERIAL NUMBE R AS IN THE CASE OF REGULAR SALES AND TH E SAME WERE NUMBERED AS CS1, CS2 & CS3 . THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE BEFORE THE LD. CIT(A) WITH REGARD TO THE DETAILS OF SALES SUCH AS QUANTUM OF SALES , PARTIES TO WHOM SOLD, NUMBER OF SALES EFFECTED ETC. . THE SALE BILLS WERE ALSO NUMBERED DIFFERENTLY AS DISCUSSED HEREINABOVE . THE PATTERN OF SALES AND THE PATTERN OF CASH DEPOSITS SHOW THE SUSPICIOUS NATURE OF THE TRANSACTIONS WITH REGARD TO THE SALES OF RS.187.30 CORES AS DISCUSSED ABOVE . THEREFORE, LD. CIT(A) DID NOT BELIEVE THE GENUINENESS OF SALES, HOWEVER , HE OBSERVED THAT THE ASSESSING OFFICER CANNOT MAKE ADDITION OF RS. 129.25 LACS SINCE THE AMOUNT ADVANCE D WAS IN INTERVALS ON DIFFERENT DATES AND THE ASSESSEE ALSO RECEIVED THE AMOUNTS BACK LATER . SINCE THE ASSESSEE IS HAVING OPENING CASH BALANCE AND THE CASH WAS CIRCULATED , THE LD. CIT(A) HELD THAT THE ADDITION OF PEAK CREDIT MINUS OPENING CASH BALANCE IS REASONABLE AND JU S TIFIED AND ACCORDINGLY WORKED OUT THE PEAK LOAN OF RS. 42,43,178/ - AND REDUCED THE OPENING BALANCE OF LOAN OF RS. 1,91,918/ - AND OPENING CASH BALANCE OF RS. 17,60,820/ - AND WORKED OUT THE ADDITION OF RS. 22,82,440/ - AS UNDER: - 11 ITA NO. 498/VIZ/2017 C.O.NO.21/VIZ/2018 ( POKURI KOTESWARA RAO ) TOTAL PEAK LOAN 42,43,178 - 00 LESS: OPENING BALANCE OF LOAN 1,91,918 00 OPENING CASH BALANCE 17,60,820 - 00 19 , 52 , 738 - 00 BALANCE 22,82,440 - 00 ACCORDINGLY , LD. CIT(A) CONFIRMED THE ADDITION OF RS.22,82,440/ - 1 7. AGAINST THE ORDER OF THE LD. CIT(A) , THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. 1 8. DURING APPEAL HEARING, THE LD. DEPARTMENTAL REPRESENTATIVE ARGUED THAT THE BENEFIT OF PEAK LOAN CANNOT BE GIVEN TO THE ASSESSEE IN THE ABSENCE OF ANY MATERIAL EVIDENCE FOR SOURCE OF SUCH HUGE CASH DEPOSITS . THE LD.DR ARGUED THAT EVEN BEFORE THE LD.CIT(A) THE ASSESSEE DID NOT FURNISH THE DETAILS OF SALES AND THE SOURCES HENCE REQUESTED TO CONFIRM THE ADDITION. 1 9. WE HAVE HEARD THE LD.DR AND GONE THROUGH THE ORDER OF THE LD.CIT(A) AND THE ASSESSMENT ORDER. I N THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS GIVEN SUFFICIENT OPPORTUN IT IES AND MADE THE ADDITION OF ENTIRE LOAN GIVEN TO M/S. SRI LAKSHMI VENKATESWARA ENTERPRISES WITHOUT GOING INTO THE DETAILS OF THE CIRCULATION OF CASH. IT IS UNDISPUTED FACT TH AT THE ASSESSEE HAS ACCOUNTED THE SALE OF RS. 10.08 CRORES WHICH WAS RECORDED IN THE CASH BOOK FOR CASH FLOW. THE ASSESSEE IS CAPABLE OF GENERATING CERTAIN AMOUNT 12 ITA NO. 498/VIZ/2017 C.O.NO.21/VIZ/2018 ( POKURI KOTESWARA RAO ) OF CASH FOR MAKING DEPOSITS IN THE BANK ACCOUNT . SIMILARLY, THE AMOUNT OF LOAN WAS GIVEN PERIODICALLY AND NOT AT ONE GO. IT IS OBSERVED BY THE LD. CIT(A) THAT THE AMOUNTS WERE ADVANCED TO THE DEB TORS AND THE REPAYMENTS WERE ALSO RECEIVED BY THE ASSESSEE. THEREFORE, FROM THE ORDER OF THE LD. CIT(A), WE FIND THAT THE CASH WAS IN CIRCULATION, HENCE, IT IS REASONABLE AND JUSTIFIABLE TO ADOPT THE PEAK BALANCE OF LOAN INSTEAD OF MAKING THE ENTIRE AMOUNT OF LOAN AS ADDITION. IN THE INSTANT CASE THE FACT OF AVAILABILITY OPENING BALANCE OF LOAN AND THE OPENING CASH BALANCE WAS NOT DISPUTED. THEREF ORE, WE HOLD THAT THE LD.CIT(A) HAS RIGHTLY WORKED OUT THE ADDITION AND WE DO NOT SEE ANY ERROR COMMITTED BY THE LD. CIT(A) IN ARRIVING AT THE ADDITION OF RS. 22,82,440/ - . T HE ORDER OF THE ORDER OF THE LD. CIT(A) IS UPHELD AND THE APPEA L OF THE REVENUE ON THIS GROUND IS DISMISSED. 20. THE ASSESSEE FILED CROSS OBJECTION IN CO NO.21/ VIZ /18: G ROUND NOS. 1 TO 3 ARE REL A TED TO THE ADDITION ON ACCOUNT OF UNSECURED LOANS. SINCE THE R E V E NUES APPEAL IS DISMISSED , THE CROSS OBJECTION FILED ON THESE GROUNDS HAVE BECOME INFRU C TUOUS AND THE SAME ARE DISMISSED ACCORDINGLY. 20 .1 GROUND NO.4 IS RELATED TO THE FREIGHT CHARGES AND SUPPORTING THE ORDER OF THE LD. CIT(A) . S INCE THE REVENUES 13 ITA NO. 498/VIZ/2017 C.O.NO.21/VIZ/2018 ( POKURI KOTESWARA RAO ) APPEAL IS DISMISSED , THE ASSESSEES CROSS OBJECTION ON THIS GROUND HAS BECOME INFRUCTUOUS AND IS DISMISSED . GROUND NOS. 5 & 6 ARE REL A TED TO THE ADDITION CONFIRMED BY THE LD. CIT(A) FOR NON - DEDUCTION OF TAX AT SOURCE RELATING TO FREIGHT CHARGES . A S PER THE REASONS DISCUSSED IN THE REVENUES APPEAL, WE UPH O LD THE ORDER OF THE LD.CIT(A) AND FOR THE SAME REASONS THE CROSS OBJECTION OF THE ASSESSEE ON THIS GROUND IS DISMISSED. 20 .2 GROUND NO.7 AND 8 ARE REL A TED TO THE CONFIRMATION OF ADDITION OF RS. 22, 82,440/ - BY THE LD. CIT(A) IN RESPECT OF LOAN GIVEN TO M/S. SRI LAKSHMI VENKATESWARA ENTERPRISES . AS PER THE REASONS DISCUSSED IN REVENUES APPEAL, WE HAVE HELD THAT THE ORDER OF THE LD. CIT(A) IS CORRECT AND THE ASSESSEE FAILED TO EXPLAIN THE SOURCE T O THE EXTENT OF RS. 22,82,440/ - , THEREFORE, THE AS SESSEES CROSS OBJECTIONS ON THESE ISSUES ARE DISMISSED. 2 1 IN THE RESULT, APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 1 7 T H DAY OF JU LY , 201 9 . S D / - S D / - (V. DURGA RAO) ( D.S. SUNDER SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 7 T H JU LY , 201 9 . VR/ - 14 ITA NO. 498/VIZ/2017 C.O.NO.21/VIZ/2018 ( POKURI KOTESWARA RAO ) COPY TO: 1. THE ASSESSEE - POKURIKOTESWARA RAO, 2 ND FLOOR, C.R. BUILDINGS, NEAR ROYT BAZAR, BANDAR ROAD, VIJAYAWADA. 2. THE REV ENUE ITO, WARD - 1(1), VIJAYAWADA. 3. THE PR. CIT , VIJAYAWADA. 4. THE CIT(A) , VIJAYAWADA. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.