Sri A. Munuswamy, Tirupathi V. DCIT, Central Circle, Tirupathi

CO 36/HYD/2011

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8522 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 16 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 06-05-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 20-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M H NAIK; M RAVINDRA SAI
• Assessee Lawyers: E PALGUNA KUMAR
• Keywords: Unexplained cash credit; Unexplained investment; Gift; Search and seizure; Salary income; Bad and doubtful debts
• Section: 153A; 234B; 68; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER S.NO. ITA NO. AY APPELLANT RESPONDENT 1. 485/H/11 2005 - 06 A. RAMESH, TIRUPATHI (PAN ADHPAO194) DY. COMMISSIONER OF INCOME-TAX, CC, TIRUPATHI 2. 486/H/11 2008 - 09 - DO - - DO - 3. 683/H/11 2002 - 03 A. MUNUSWAMY, TIRUPATHI. (PAN ADRPA5231H) - DO - 4. 610/H/11 2004 - 05 DY. COMMISSIONER OF INCOME-TAX, CC, TIRUPATHI A. MUNUSWAMY, TIRUPATHI. (PAN ADRPA5231H) 5. 611/H/11 2006 - 07 - DO - - DO - AND C.O. NO. AY CROSS OBJECTOR RESPONDENT 6. 36/H/11 (IN ITA NO. 610/H/11) 2004 - 05 A. MUNUSWAMY, TIRUPATHI. (PAN ADRPA5231H) DY. COMMISSIONER OF INCOME-TAX, CC, TIRUPATHI 7. 37/H/11 2006 - 07 - DO - - DO - ASSESSEE BY : SHRI E. PALGUNA KUMAR REVENUE BY : S/SHRI M.H. NAIK & M. RAVINDRA SAI DATE OF HEARING : 06/03/2013 DATE OF PRONOUNCEMENT : 0 6/05/2013 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THESE APPEALS FILED BY TWO DIFFERENT ASSESSEES AND THE REVENUE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF CIT(A). SINCE COMMON ISSUES ARE INVOLVED IN THESE APPEALS, THEY W ERE HEARD TOGETHER AND THEREFORE A COMMON ORDER IS PASSED FOR THE SAKE OF CONVENIENCE. ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 2 2. THE ASSESSEE SHRI MUNUSWAMY ALSO FILED C.OS. F OR THE ASSESSMENT YEARS 2004-05 AND 2006-07. ITA NO. 485/H/11 IN THE CASE OF A. RAMESH FOR AY 20 05-06 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED HIS RETURN OF INCOME FOR AY 2005-06 ON 24/08/2005 ADMIT TING TOTAL INCOME OF RS. 1,15,950/-. THE ASSESSEES SOURCE OF INCOME WERE RENTAL INCOME AND INCOME FROM CABLE OPERATIONS BUSI NESS. A SEARCH AND SEIZURE WAS CONDUCTED ON THE ASSESSEES FATHER ON 27/09/2007. CONSEQUENTLY NOTICE U/S 153C READ WITH SECTION 153A DTD. 28/10/2009 WAS ISSUED ON THE ASSESSEE REQ UIRING HIM TO FILE HIS RETURN OF INCOME FOR THE AY 2005-06 WIT HIN 30 DAYS OF RECEIPT OF INCOME. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE SECOND TIME FOR THE AY 2005-06 ADMITTING TOTAL INCO ME OF RS. 1,15,950/-. THE AO PASSED ASSESSMENT ORDER ON 31/12 /2009 BY MAKING THE FOLLOWING ADDITIONS AND COMPUTED THE TAX LIABILITY ACCORDINGLY: S.NO. NATURE OF ADDITION AMOUNT (RS.) 1 ADDITION OF EXPENSES FOR NON - SUBMISSION OF PROOF OF EXPENDITURES. 23,000 2 ADDITION OF CREDITORS FOR NON - SUBMISSION OF PROOF OF THEIR CREDITWORTHINESS 4,00,000 3 ADDITION MADE AS UNEXPLAINED CAPITAL 1,77,000 THE AO ARRIVED AT THE TAX LIABILITY OF RS. 3,02,29 0/- WHICH INCLUDED INTEREST U/S 234B OF RS. 1,09,730/-. AGGRI EVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CI T(A). 4. THE CIT(A) DELETED THE ADDITIONS OF RS. 23,000/- ON ACCOUNT OF EXPENSES AND RS. 4,00,000 ON ACCOUNT OF CREDITOR S MADE BY THE ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 3 AO AND SUSTAINED THE ADDITION OF RS. 1,77,000/- MAD E BY THE AO ON ACCOUNT OF UNEXPLAINED CAPITAL. 5. BEFORE US, THE ASSESSEE HAS RAISED 5 GROUNDS OF APPEAL, THE SUM AND SUBSTANCE OF WHICH IS PERTAINING TO THE ADD ITION OF RS. 1,77,000/-. 6. IT WAS OBSERVED BY THE AO THAT AS ON 31/03/2004, THE ASSESSEE HAD BALANCE OF RS. 86,463/- WHEREAS ON 01/ 04/2004 IT WAS SHOWN AS RS. 2,63,463/-. THEREFORE, THERE WAS A N INCREASE OF RS. 1,77,000/-. HENCE, THE AO HAD MADE THIS ADDITIO N SINCE THERE WAS NO VALID INFORMATION WITH REGARD TO THE INCREAS E IN BALANCE OF THE ASSESSEES CAPITAL ACCOUNT. 7. BEFORE THE CIT(A), THE AR OF THE ASSESSEE SUBMIT TED THAT THE AO HAD WRONGLY COME TO THE CONCLUSION THAT BALANCE WAS REDUCED WHEREAS THE CAPITAL ACCOUNT IS INCREASED. THE CIT(A ) OBSERVED THAT AR DID NOT GIVE SUFFICIENT REASON FOR INCREAS E IN THE CAPITAL ACCOUNT BALANCE OF THE ASSESSEE. HE, THEREFORE, HEL D THAT IN THE ABSENCE OF VALID REASONS FOR INCREASE IN THE CAPITA L ACCOUNT, THE INCREASE IN THE BALANCE IS TREATED AS UNEXPLAINED C REDIT AND THE SAID ADDITION MADE BY THE AO WAS CONFIRMED BY THE C IT(A). 8. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 9. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEES CAPITAL ACCOUNT WAS RS. 86,463/ - AS ON 31 ST MARCH, 2004. IT WAS INCREASED BY RS. 1,77,000/- TO BRING IT RS. 2,63,463/- AS ON 1 ST APRIL, 2004. THE LEARNED COUNSEL EXPLAINED THAT THE AMOUNT OF RS. 1,77,000/- REPRESENTED HOUSE AT P.K. LAYOUT, TIRUPATHI AND ALSO THE MOTOR CAR. THE COST OF HOUSE AT PK LAYOUT, TIRUPATHI WAS RS. 1,17,000/- AND THE SAME W AS WRITTEN ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 4 OFF IN THE BOOKS EARLIER, IN ORDER TO BRING IT BACK TO BALANCE SHEET, CAPITAL ACCOUNT WAS CREDITED. THE HOUSE WAS PURCHAS ED ON 9 TH OCTOBER, 1991. HE FURTHER SUBMITTED THAT SIMILARLY THE CAR WAS ALSO OMITTED IN THE BALANCE SHEET AND IN ORDER TO B RING THE CAR BACK TO BALANCE SHEET, CAPITAL ACCOUNT WAS CREDITED WITH THE AMOUNT OF RS. 60,000/-. 10. THE LEARNED COUNSEL SUBMITTED THAT BOTH THE ASS ETS BROUGHT INTO THE BALANCE SHEET BY CREDITING CAPITAL ACCOUNT DO NOT REPRESENT ANY INCOME. IT WAS POINTED OUT THAT THE A SSETS WERE PURCHASED MORE THAN SIX YEARS PRIOR TO THE ASSESSME NT YEAR AND THE LEARNED COUNSEL PLEADED THAT THE ADDITION OF RS . 1,77,000/- MADE BY TREATING THE DIFFERENCE IN CAPITAL ACCOUNT AS UNEXPLAINED CASH CREDIT MAY BE DELETED. 11. THE LEARNED DR, ON THE OTHER HAND, RELIED ON TH E ORDERS OF THE AUTHORITIES BELOW. 12. WE HAVE HEARD THE PARTIES AND PERUSED THE RECOR D AS WELL AS GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. W E FIND FROM THE STATEMENT OF AFFAIRS AS ON 31/03/2005 FILED BY THE ASSESSEE THAT A SUM OF RS. 1,17,000/- REPRESENTING HOUSE AT PK LAYOUT, TIRUPATHI, WHICH WAS BROUGHT ON 09/10/1991 AND THE CAR, WHICH WAS BOUGHT FOR AN AMOUNT OF RS. 80,000/-WERE BROUGH T INTO CAPITAL ACCOUNT AND THE CAPITAL ACCOUNT HAS BEEN IN CREASED BY THESE TWO ASSETS. EARLIER, THEY WERE WRITTEN OFF A ND TO BRING THEM BACK TO THE BALANCE SHEET CAPITAL ACCOUNT WAS CREDI TED AND BOTH THE ASSETS WERE DEBITED. HENCE, THIS INCREASE OF RS . 1,17,000/- CANNOT BE TREATED AS UNEXPLAINED CAPITAL IN THE HAN DS OF THE ASSESSEE. WE ALLOW THIS GROUND OF APPEAL OF THE ASS ESSEE. 13. IN THE RESULT, THE APPEAL BEING ITA NO. 485/H/1 1 IS ALLOWED. ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 5 ITA NO. 486/H/2011 FOR AY 2008-09 IN THE CASE OF A. RAMESH 14. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSE SSEE RECEIVED RS. 2.50 LAKHS FORM HIS MOTHER SMT. PARVATHAMMA AND FILED LETTER OF GIFT CONFIRMATION. THE AO HELD THAT THE CONFIRMA TION IS SILENT ABOUT THE SOURCE OF INCOME, CREDITWORTHINESS, ETC. HE TREATED THE GIFT AS UNEXPLAINED CREDIT IN THE CAPITAL ACCOUNT A ND ADDED THE SAME TO THE INCOME RETURNED. 15. ON APPEAL, BEFORE THE CIT(A) THE AR OF THE ASSE SSEE SUBMITTED THAT ALL THE DETAILS WERE FURNISHED DURIN G THE ASSESSMENT PROCEEDINGS AS WELL AS APPEAL PROCEEDING S. HE FURTHER SUBMITTED THAT THE CONFIRMATION LETTERS OF DONOR SM T. A. PARVATHAMALL FOR RS. 2,50,000/- UNDER PAN ABCPA5300 J ASSESSED WITH ACIT, CENTRAL CIRCLE TIRUPATHI WAS ALSO FURNIS HED BEFORE THE AO AND THE SAME WAS ACCEPTED BY THE AO. HE, THEREF ORE, ARGUED THAT THE AO HAD MADE AN ADDITION OF RS. 2,50,000/- WITHOUT APPRECIATING THE DETAILS SUBMITTED AND HENCE PLEADE D FOR DELETION OF THE SAME. 16. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT ASSESSEE HAD RECEIVED GIFT FROM HIS MOTHER, WHICH HAD BEEN CONFIRMED BY THE ASSESSEES MOTHER. HOWEVER, IT WAS OBSERVED BY THE AO THAT THE SOURCE OF THE DONOR WAS NOT EXPLAINED AND CREDITWORTHINESS OF THE DONOR IS SILENT, HENCE, HE HAD TREATED THE ALLEGED GIFT AS UNEXPLAIN ED CREDIT. HAVING CONSIDERED THE OBSERVATION OF THE AO AND THE EXPLANATION OF THE AR OF THE ASSESSEE, THE CIT(A) CONFIRMED THE ADDITION MADE BY THE AO. 17. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 6 18. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSE E SUBMITTED THAT THE CONFIRMATION LETTER FROM THE DONOR SMT. PA RVATHAMMA WAS SUBMITTED TO THE AO AT THE TIME OF ASSESSMENT A ND THE FACT THAT CONFIRMATION LETTER WAS PRODUCED WAS ALSO ACCE PTED BY THE AO HIMSELF IN HIS ASSESSMENT ORDER. THE LEARNED CO UNSEL INVITED OUR ATTENTION TO THE COPY OF THE BALANCE SHEET AND SUBMITTED THAT THE BALANCE SHEET IS SELF-EXPLANATORY FOR THE CREDI TWORTHINESS OF THE DONOR. HE POINTED OUT THAT THE SAID BALANCE SHE ET WAS ALSO FILED BEFORE THE AO AND THE CIT(A), HOWEVER, THE AO ERRED IN ADDING THE SAME TO THE INCOME OF THE ASSESSEE BY ST ATING THAT THE CREDITWORTHINESS OF THE DONOR IS NOT PROVED. THE LE ARNED COUNSEL RELIED UPON THE DECISION IN THE CASE OF P.K. SETHI VS. CIT, [2006] 286 ITR 318 WHEREIN IT WAS HELD THAT WHERE ALL THE CREDITORS ARE INCOME TAX ASSESSES BEFORE THE SAME ITO AND THE LAT TER HAVING ACCEPTED THE GENUINENESS OF LOAN TRANSACTIONS IN TH E CASE OF CREDITORS, THE CASH CREDITS COULD NOT BE TREATED AS NON-GENUINE IN THE HANDS OF THE ASSESSEE. THE LEARNED COUNSEL SUBM ITTED THAT SINCE THE ONUS OF PROVING CASH CREDIT ALWAYS LIES O N THE ASSESSEE, THE ASSESSEE HAD SUBMITTED ALL THE DETAILS AND SATI SFIED THE CONDITIONS MENTIONED U/S 68, WHICH ARE I) NAME AND IDENTITY OF THE CREDITOR, II) CAPACITY OF THE CREDITOR TO LEND MONEY AND III) GENUINENESS OF THE TRANSACTION AND, THEREFORE, PRAY ED FOR DELETION OF THE ADDITION MADE BY THE AO AND SUSTAINED BY THE CIT(A). 19. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 20. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE ARE OF THE VIEW THAT THE ASSESSEE HAS PROVED THE NAME A ND IDENTITY OF THE CREDITOR, CAPACITY OF THE CREDITOR TO LEND MONE Y AS CAN BE SEEN FROM THE BALANCE SHEET IN THE PAPER BOOK AND THE ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 7 GENUINENESS OF THE TRANSACTION. HAVING SATISFIED AL L THREE CRITERIA, WHICH HAVE BEEN LAID OUT IN THE DECISION OF THE JUR ISDICTIONAL HIGH COURT OF AP IN THE CASE OF CIT R.B. MITTAL, 246 ITR 283, WE ARE OF THE OPINION THAT THE ASSESSEE HAS DISCHARGED HIS ON US OF PROVING THE EXPLANATION FOR THE CASH CREDIT AND, HENCE, WE DELE TE THE ADDITION OF RS. 2,50,000/- MADE BY THE AO AND SUSTAINED BY THE CIT( A) U/S 68 OF THE ACT. 21. IN THE RESULT, APPEAL BEING ITA NO. 486/H/11 IS ALLOWED. ITA NO. 610/H/11 FOR AY 2004-05 IN THE CASE OF A. M UNUSWAMY APPEAL BY THE REVENUE. 22. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED HIS RETURN OF INCOME FOR THE AY 2004-05 ADMITTING TOTAL INCOME OF RS. 72,913/-. THE ASSESSEES SOURCE OF INCOME WERE PENS ION FROM ASRTC, RENTAL INCOME AND INTEREST INCOME FROM MONEY LENDING BUSINESS. A SEARCH AND SEIZURE OPERATION WAS CONDU CTED ON THE ASSESSEE ON 24/09/2007. CONSEQUENTLY NOTICE U/S 153 A DT. 09/07/2009 WAS ISSUED ON THE ASSESSEE REQUIRING HIM TO FILE HIS RETURN OF INCOME FOR THE AY 2004-05 WITHIN 14 DAYS OF NOTICE. THE ASSESSEE FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION IN RESPONSE TO THE NOTICE ADMITTING TOTAL INCOME OF RS.2,31,200/-. THE AO MADE THE FOLLOWING ADDITIONS TO THE RETURNED INCOME AND COMPUTED THE TAX LIABILITY ACCORDINGLY. S.NO. NATURE OF ADDITION AMOUNT (RS.) 1 ADDITION OF DEBTOR TREATING THE SAME AS UNACCOUNTED ADVANCE 1,55 ,000 2 ADDITION ON ACCOUNT OF UNEXPLAINED CASH UNDER SECTION 69A 15,73,333 THE AO IMPOSED A TAX LIABILITY OF RS. 10,46,077/- WHICH INCLUDED THE INTEREST U/S 234B AND 234C OF RS. 4,28 ,021/-. ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 8 23. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE CIT(A) AGITATING AGAINST THE ADDITION OF RS. 1, 55,000/- MADE AS UNEXPLAINED ADVANCE AND ANOTHER ADDITION OF RS. 15,73,333/- MADE U/S 69A OF THE IT ACT, 1961. 24. AS REGARDS THE ADDITION OF RS. 1,55,000/-, THE CIT(A) NOTED THAT DURING THE SEARCH OPERATION, PHOTOCOPY OF PROM ISSORY NOTE FOR RS. 30,000/- EXECUTED BY SRI VENATARAMANA AND S RI CHANDRASEKHAR VIDE ANNEXURE A/AMS/R/01 PAGE NO. 53 & 54 AND ANOTHER PROMISSORY NOTE EXECUTED BY SRI P. NAGAMMA VIDE ANNEXURE A/AMS/R/01, PAGE NO. 69 WERE FOUND. THE AO WAS OF THE VIEW THAT THE PROMISSORY NOTES BELONG TO THE AS SESSEE AND ASESSSEES ARGUMENTS THAT THEY BELONG TO HUF WERE R EJECTED STATING THAT THERE WAS NOT MUCH SCOPE FOR THE HUF T O LEND THE ABOVE SAID AMOUNTS. IT WAS THE SUBMISSION OF THE AR THAT THE AO WAS OF THE OPINION THAT THERE CANNOT BE HUF OF SRI A. MUNUSWAMY WITH FUNDS AVAILABLE AND HENCE THE AO HAD NOT ACCEP TED THE EXPLANATION GIVEN BY THE ASSESSEE THAT THE ABOVE LO ANS WERE GIVEN IN HUF CAPACITY. IT WAS ALSO EXPLAINED BY THE AR THAT THERE IS AN HUF BY NAME SRI A. MUNUSWAMY (HUF) WHICH HAS ALSO BEEN ASSESSED TO INCOME TAX WHEREIN THE SAID PROMISSORY NOTES LENDING HAS BEEN DISCLOSED. THEREFORE, THE ADDITION MADE BY THE AO WAS NOT JUSTIFIED. 25. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE, THE CIT(A) HELD THAT WHEN SRI A. MUNUSWAMY (HUF) HAS BE EN FILING THE RETURN OF INCOME WHEREIN THE ABOVE SAID LOANS H AVE BEEN DECLARED TO HAVE BEEN LENT TO THE ABOVE PARTIES AND HENCE THERE CANNOT BE ANY SCOPE FOR MAKING THE ADDITION IN ASSE SSEES HANDS. HE, THEREFORE, DELETED THE ADDITION OF RS. 1,55,000 /-. ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 9 26. AS REGARDS THE ADDITION OF RS. 15,73,333/-, THE AO HAD ADDED RS. 15,73,333/- AS THE INCOME OF THE ASSESSEE STATING THAT HE HAS RECEIVED INTEREST OF RS. 1,88,000/- DURING T HE YEAR WITH NO DEBTORS. 27. BEFORE THE CIT(A), THE AR OF THE ASSESSEE SUBMI TTED THAT THE ASSESSEE IS MAINTAINING CASH BASIS OF ACCOUNTING FO R HIS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES AND THE INCOME-TAX ITSELF PERMITS SUCH SYSTEM OF ACCOUNTING. HE FURTHE R SUBMITTED THAT UNDER THE CASH BASIS OF ACCOUNTING, THE INCOME IS ADMITTED ONLY UPON RECEIPT OF SUCH INCOME. IT WAS SUBMITTED THAT THE ASSESSEE HAS BEEN IN RECEIPT OF INCOME BY WAY OF SA LARY AND FROM A LONG TIME HE HAD SAVED CERTAIN AMOUNTS OF SALARY INCOME AND LENT IT RELATIVES AND FRIENDS FROM TIME TO TIME AND THE ENTIRE INTEREST IS NOT COLLECTED WHOLLY OR MONTHLY, IT IS COLLECTED AS AND WHEN PAID BY THE DEBTORS. HE SUBMITTED THAT DURING THE AY 2003- 04, THE ASSESSEE RECEIVED RS. 1,88,000/- FORM DEBTO RS AS INTEREST AND THE INTEREST PERTAINS TO VARIOUS PREVIOUS YEARS AND DOES NOT PERTAIN TO ONE FY. 28. THE CIT(A) OBSERVED THAT THE AO HAS MADE ONLY A HYPOTHETICAL EXERCISE AND ADDED IMAGINARY PRINCIPLE AMOUNT IN CASE OF THE ASSESSEE WITHOUT HAVING ASCERTAINED ANY FACTS WITH REGARD TO THE AMOUNT OF LOANS GIVEN BY THE ASSESSEE . THE CIT(A), THEREFORE, HELD THAT THE ADDITION MADE WITHOUT ASCE RTAINING BASIC FACTS OF LOANS STATED TO HAVE BEEN GIVEN BY THE ASS ESSEE IS TO BE DELETED. 29. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVEN UE IS IN APPEAL BEFORE AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE CIT(A) HAS ERRED ON FACT IN ALLOWING THE APP EAL OF THE ASSESSEE ON ACCOUNT OF ADDITIONS MADE TOWARDS ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 10 UNEXPLAINED ADVANCE OF RS. 1,55,000/- AND UNEXPLAIN ED CASH OF RS. 15,77,333/-. 2. THE CIT(A) HAS FAILED TO APPRECIATE THE FACT THA T THE ADDITION OF RS. 1,55,000/- WAS ON THE BASIS OF SEIZ ED DOCUMENT FOR WHICH THE SOURCE WAS NOT EXPLAINED. 30. WITH RESPECT TO FIRST GROUND OF APPEAL PERTAINI NG TO THE ADDITION OF RS. 1,55,000/-, THE LEARNED COUNSEL SUB MITTED THAT THE ASSESSEE IS ALSO ASSESSED TO INCOME-TAX UNDER THE H UF CAPACITY AND THE ASSESSEE HAS ADVANCED THE LOAN OF RS. 1,55, 000/- UNDER HIS HUF CAPACITY. THE LEARNED COUNSEL CONTENDED THA T THE SAID EXPLANATION WAS SUBMITTED BEFORE THE AO BUT THE AO DISBELIEVED THE EXPLANATION OF THE ASSESSEE AND ADDED THE SAID AMOUNT. 31. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD. THE CIT(A) OBSERVED THAT DURING THE SEARCH OPERATION, P HOTOCOPY OF PROMISSORY NOTE FOR RS. 30,000/- EXECUTED BY SRI VE NATARAMANA AND SRI CHANDRASEKHAR VIDE ANNEXURE A/AMS/R/01 PAGE NO. 53 & 54 AND ANOTHER PROMISSORY NOTE EXECUTED BY SRI P. N AGAMMA VIDE ANNEXURE A/AMS/R/01, PAGE NO. 69 WERE FOUND. ACCORD ING TO THE CIT(A) THE AO HAS NOT ACCEPTED THE EXPLANATION SUBM ITTED BY THE ASSESSEE THAT THE ABOVE LOAN WAS GIVEN IN HUF CAPAC ITY AND, THEREFORE, IT IS NOT TO BE ADDED IN THE HANDS OF TH E ASSESSEE. THE ASSESSEE HAD ALSO EXPLAINED THAT THERE IS AN HUF IN THE NAME OF A. MUNUSWAMY, WHICH HAS BEEN ASSESSED TO INCOME-TAX WHEREIN THE SAID PROMISSORY NOTES LENDING HAS BEEN DISCLOSE D AND, THEREFORE, THE ADDITION MADE BY THE AO WAS FOUND TO BE NOT ON VALID GROUND BY THE CIT(A) AND HE DELETED THE SAME. 32. WE ARE OF THE OPINION THAT THERE IS NO EVIDENC E FOUND BY THE AO TO STATE THAT THE ADVANCE GIVEN BY THE ASSES SEE IN HIS INDIVIDUAL CAPACITY AND NOT IN HUF CAPACITY. THE AO SHALL NOT INTERFERE WITH THE CHANGE OF INCOME WITHOUT SPECIFI C EVIDENCE IN ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 11 HIS POSSESSION. SHRI A. MUNUSWAMY, (HUF) HAS BEEN F ILING RETURN OF INCOME WHEREIN THE ABOVE SAID LOANS HAVE BEEN DE CLARED TO HAVE BEEN LENT TO ABOVE PARTIES. IN THESE CIRCUMSTA NCES, WE DEEM IT FIT AND PROPER TO RESTORE THE ISSUE TO THE FILE OF THE AO TO DECIDE AFRESH THE ISSUE . THE ASSESSEE IS DIRECTED TO PLACE THE NECESSARY EVIDENCE BEFORE THE AO TO ESTABLISH THAT THE ADVANCE OF LOAN HAS BEEN GIVEN IN HUF CAPACITY. THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 33. AS REGARDS THE ADDITION OF RS. 15,73,333/-, THE LEARNED COUNSEL POINTED OUT THAT THE AO HAS MADE THE ADDITI ON OF RS. 15,73,333/- ON MERE SURMISE THAT THE ASSESSEE WOULD HAVE INVESTED THE SAID AMOUNT FOR EARNING INTEREST OF RS . 1,88,000/- @ 12% PER ANNUM. THE LEARNED COUNSEL SUBMITTED THAT T HE ASSESSEE IS MAINTAINING CASH BASIS OF ACCOUNTING FOR HIS INC OME UNDER THE HEAD INCOME FROM OTHER SOURCES AND UNDER THE CASH BASIS OF ACCOUNTING, THE INCOME IS ADMITTED ONLY UPON RECEIP T OF SUCH INCOME. IT IS SUBMITTED THAT THE ASSESSEE HAS BEEN IN RECEIPT OF INCOME BY WAY OF SALARY FROM A LONG TIME AND HAD SA VED CERTAIN AMOUNTS OF SALARY AND LENT IT TO RELATIVES AND FRIE NDS FROM TIME TO TIME. FURTHER IT IS SUBMITTED THAT THE ENTIRE INTER EST IS NOT COLLECTED YEARLY OR MONTHLY AND COLLECTED AS AND WH EN PAID BY THE DEBTORS. DURING THE AY 2003-04, THE ASSESSEE RECEIV ED RS. 1,88,000/- FROM DEBTORS AS INTEREST AND THIS INTERE ST PERTAINS TO VARIOUS PREVIOUS YEARS AND DOES NOT PERTAIN TO ONE FINANCIAL YEAR. 34. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD. WE ARE OF THE OPINION THAT THE ASSESSEE HAS TO LIST OU T THE DEBTORS AND THE PRINCIPLE ABOUT DUE FROM EACH OF THE DEBTOR S. THE ASSESSEE ALSO SHALL GIVE THE BREAK-UP OF RS. 1.88 L AKHS AND SHOW THAT THE INTEREST PERTAINS NOT ONLY TO THIS AY UNDE R CONSIDERATION BUT ALSO TO VARIOUS PREVIOUS YEARS. IN THESE CIRCUM STANCES, WE ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 12 REMIT THE ISSUE TO THE FILE OF THE AO WHO SHALL VER IFY THE DETAILS AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW. ACCORD INGLY, THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSE S. 35. IN THE RESULT, APPEAL BEING ITA NO. 610/H/11 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 611/H/11 IN AY 2006-07 APPEAL BY THE REVE NUE 36. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED HIS RETURN OF INCOME FOR THE AY 2006-07 ADMITTING TOTAL INCOME OF RS. 97,989/-. THE ASSESSEES SOURCE OF INCOME WAS PENSI ON FROM ASRTC, RENTAL INCOME AND INTEREST INCOME FROM MONEY LENDING BUSINESS. A SEARCH AND SEIZURE OPERATION WAS CONDU CTED ON THE ASSESSEE ON 24/09/2007. CONSEQUENTLY NOTICE U/S 153 A DT. 09/07/2009 WAS ISSUED ON THE ASSESSEE REQUIRING HIM TO FILE HIS RETURN OF INCOME FOR THE AY 2004-05 WITHIN 14 DAYS OF NOTICE. THE ASSESSEE FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION IN RESPONSE TO THE NOTICE ADMITTING TOTAL INCOME OF RS.5,49,189/-. THE AO MADE THE FOLLOWING ADDITIONS TO THE RETURNED INCOME AND COMPUTED THE TAX LIABILITY ACCORDINGLY. S.NO. NATURE OF ADDITION AMOUNT (RS.) 1 ADDITION OF ADVANCE TREATING THE SAME AS UNRECORDED INVESTMENT 5,00,000 2 ADDITION OF DEBTOR TREATING THE SAME AS UNEXPLAINED ADVANCE. 3,50,000 3. ADDITION OF MUNICIPAL TAX FOR NOT PRODUCING ANY EVIDENCE WITH REFERENCE TO PAYMENT 5,842 4. ADDITION OF BAD DEBTS FOR NON - SUBMISSION OF PROOF OF EFFORTS MADE FOR RECOVERY OF THE SAME 5,00,000 THE AO IMPOSED A TAX LIABILITY OF RS. 7,33,220/- W HICH INCLUDED THE INTEREST U/S 234B AND 234C OF RS. 2,61 ,550/-. ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 13 37. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN A PPEAL BEFORE THE CIT(A). 38. AS REGARDS THE GROUND PERTAINING TO ADDITION OF RS. 5,00,000/- TOWARDS UNRECORDED INVESTMENT, THE AR OF THE ASSESSEE ARGUED THAT THE ASSESSEE HAD RECORDED THE ABOVE SAID INVESTMENT IN THE BALANCE SHEET AS ON 31/03/2006 AN D THE ADVANCE GIVEN TO SRI C. VENKATAPPA AS ON 30/09/2005 . HOWEVER, THE AO WITHOUT APPRECIATING THE FACT THAT THE ASSES SEE HAD ADMITTED THE SAID INVESTMENT WHICH IS VERY OBVIOUS FROM THE ASSETS SIDE OF THE BALANCE SHEET AS ON 31/03/2006, MADE THE ADDITION. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A) HELD THAT THE INVESTMENT MADE BY THE ASSESSE E IS REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE WHICH ONLY IND ICATES THAT THE INVESTMENT MADE IS OUT OF ASSESSEES FUNDS, THEREFO RE, HE DELETED THE ADDITION MADE BY THE AO. 39. AS REGARDS THE ADDITION OF RS. 3,50,000/- TOWAR DS BAD DEBTS, THE AR OF THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT THE ASSESSEE HAD GIVEN A LOAN TO SRI SIDDIQUE SAHEB AND THE SAID DEBTS WERE SHOWN IN THE BALANCE SHEET FOR A PERIOD ENDING 31.03.2002 TO 31.03.2005. HOWEVER, FOR THE AY UNDER CONSIDERATION, MR. SIDDIQUE SAHEB HAD FILED INSOLVE NCY PETITION AND AS A CONSEQUENCE THE ASSESSEE IS NOT ABLE TO R ECOVER THE SAID DEBTS AND HENCE THE ASSESSEE HAD TREATED THE S AID DEBT AS BAD DEBTS. HE, THEREFORE, CONTENDED THAT THE AO SHO ULD NOT HAVE TREATED THE SAME FOR DISALLOWANCE. 40. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE HAD TAKEN RECOVERY STEPS AND THE DEBTOR HAS FILED AN INSOLVENCY PETITION BEFORE THE COURT, HENCE, THE DEBTOR CANNOT MAKE PAYMENTS AND HONOR HIS DEBT , THEREFORE, ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 14 IT SHOULD BE TREATED AS BAD DEBTS. IN VIEW OF THE A BOVE FINDINGS, THE CIT(A) DELETED THE ADDITION ON THIS COUNT. 41. AS REGARDS THE ADDITION OF RS. 5,00,000/- TOWAR DS BAD DEBTS, THE AR OF THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT THE ASSESSEE HAD GIVEN THE LOAN OF RS. 5,00,000/- WHICH WAS NOT PAID BACK BY THE DEBTOR WHO HAD FILED AN INSOLVENCY PETI TION BEFORE THE COURT. THEREFORE, IT WAS SUBMITTED THAT THE AO SHOU LD NOT HAVE TREATED THE SAID BAD DEBTS FOR DISALLOWANCE IN VIEW OF THE FACT THAT THE ASSESSEE HAD INCURRED LOSS OF RS. 5,00,000 /- TOWARDS BAD DEBTS. AFTER CONSIDERING THE SUBMISSIONS OF THE AS SESSEE, THE CIT(A) DELETED THE ADDITION MADE BY THE AO. 42. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVEN UE IS IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUN DS OF APPEAL: 1. THE CIT(A) HAS ERRED ON FACT IN ALLOWING THE APP EAL OF THE ASSESSEE ON ACCOUNT OF ADDITIONS MADE TOWARDS UNEXPLAINED INVESTMENT OF RS. 5,00,000/-, UNEXPLAIN ED ADVANCE OF RS. 3,50,000/- AND DISALLOWANCE OF BAD D EBT OF RS. 5,00,000/-. 2. THE CIT(A) HAS FAILED TO APPRECIATE THE FACT THA T THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT AN D HE HAS ALSO NOT FILED ANY BALANCE SHEET ALONG WITH THE ORIGINAL RETURN OF INCOME BY DISCLOSING ALL THE INVESTMENTS. 3. THE CIT(A) OUGHT NOT TO HAVE CONSIDERED THE BALA NCE SHEET FILED IN RESPONSE TO THE NOTICE ISSUED U/S 15 3A AS IT WAS PREPARED BY ACCOMMODATING ALL UNEXPLAINED INVESTMENTS. 4. THE CIT(A) HAS ALSO FAILED TO APPRECIATE THE FAC T THAT THE ASSESSEE HAD DISCLOSED ONLY THE PENSION INCOME IN H IS ORIGINAL RETURN AND HENCE THE SO CALLED BAD DEBT SH ALL NOT BE ALLOWED. 43. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 15 44. WITH REGARD TO THE ADDITION OF RS. 5,00,000/- T OWARDS UNRECORDED INVESTMENT, THE CIT(A) DELETED THE ADDIT ION BY HOLDING THAT THE INVESTMENT HAS BEEN RECORDED IN TH E BALANCE SHEET AS ON 31/03/2006. WE FIND THAT THE INVESTMENT MADE BY THE ASSESSEE IS REFLECTED IN THE BALANCE SHEET OF THE A SSESSEE, WHICH SHOWS THAT INVESTMENT HAD BEEN MADE OUT OF THE ASSE SSEES FUNDS, THEREFORE, WE CONFIRM THE ORDER OF THE CIT(A ) IN DELETING THE ADDITION MADE BY THE AO. 45. WITH REGARD TO THE ADDITIONS OF RS. 3,50,000/- TOWARDS BAD DEBT S , DURING THE AY 2006-07, THE ASSESSEE HAD WRITTEN OFF THE SAME IN THE P&L A/C AND, HENCE, THE AMOUNT OF RS. 3 .5 LAKHS GIVEN TO SIDDIQUE SAHEB IS NOT APPEARING IN THE BAL ANCE SHEET OF THE ASSESSEE. DURING THE COURSE OF SEARCH OPERATION , A XEROX COPY OF THE INSOLVENCY PETITION OF SIDHIQUE SAHEB WAS SE IZED BY THE DEPARTMENT. WE FIND THAT THE ASSESSEE IS NOT ABLE T O RECOVER THE LOANS GIVEN TO BOTH THE PARTIES OF RS. 3.5 LAKHS AN D RS. 5.00 LAKHS AS DEBTORS HAVE FILED INSOLVENCY PETITION. WE ARE O F THE VIEW THAT SINCE THE ASSESSEE HAS FOLLOWED THE PROVISIONS OF S ECTION 36(1)(V) I.E. THE DEBT HAS BECOME BAD IN THE PREVIOUS YEAR H AS BEEN WRITTEN OFF IN THE BOOKS OF ACCOUNT. IN THIS CONNE CTION, WE REFER TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TRF LIMITED V. CIT, 323 ITR 397 (SC) WHEREIN THE HONBL E APEX COURT HELD AS UNDER: AFTER THE AMENDMENT OF SECTION 36(1)(VII) OF THE IN COME-TAX ACT, 1961, WITH EFFECT FROM APRIL 1, 1989, IN ORDER TO OBTAIN A DEDUCTION IN RELATION TO BAD DEBTS, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, HAS BECOME IRRECOVERABLE, IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSE E. THE SUPREME COURT ACCORDINGLY REMANDED THE MATTER T O THE AO TO EXAMINE, SOLELY TO THE EXTENT OF WRITE OFF, WHETHER THE DEBT OR PART THEREOF WAS WRITTEN OFF IN THE ACCOUNTS OF THE ASSESSEE. ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 16 46. THEREFORE, WE UPHOLD THE ORDER OF THE CIT(A) IN DELETING THE ADDITIONS OF RS. 3,50,000/- AND RS. 5,00,000/- MADE BY THE AO ON ACCOUNT OF BAD DEBTS. 47. IN THE RESULT, APPEAL OF THE REVENUE BEING ITA NO. 611/H/11 IS DISMISSED. ITA NO. 683/H/11 FOR AY 2002-03 BY THE ASSESSEE B EING A. MUNUSWAMY 48. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED HIS RETURN OF INCOME FOR THE AY 2002-03 ADMITTING TOTAL INCOME OF RS. 43,785/-. THE ASSESSEES SOURCE OF INCOME WERE PENS ION FROM ASRTC, RENTAL INCOME AND INTEREST INCOME FROM MONEY LENDING BUSINESS. A SEARCH AND SEIZURE OPERATION WAS CONDU CTED ON THE ASSESSEE ON 24/09/2007. CONSEQUENTLY NOTICE U/S 153 A DT. 09/07/2009 WAS ISSUED ON THE ASSESSEE REQUIRING HIM TO FILE HIS RETURN OF INCOME FOR THE AY 2004-05 WITHIN 14 DAYS OF NOTICE. THE ASSESSEE FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION IN RESPONSE TO THE NOTICE. THE AO MADE THE FOLLOWIN G ADDITIONS TO THE RETURNED INCOME AND COMPUTED THE TAX LIABILITY ACCORDINGLY. S.NO. NATURE OF ADDITION AMOUNT (RS.) 1 ADDITION OF A DEBTOR TREATING THE SAME AS UNEXPLAINED CASH. 1,00,000 2 ADDITION OF A CREDIT IN SBI BANK ACCOUNT TREATING THE SAME AS UNEXPLAINED CASH CREDIT. 29,000 3. RENTAL INCOME ADDED 58,800 4. ADVANCE ADDED AS UNRECORDED CASH RECEIPT 1,00,000 5. OPENING CAPITAL ACCOUNT BALANCE ADDED AS NO PROOF OF THE SAME HAS BEEN SUBMITTED. 3,13,434 6. RETIREMENT BENEFITS ADDED BACK AS INCOME 6,44,189. THE AO IMPOSED A TAX LIABILITY OF RS. 7,10,130/- W HICH INCLUDED THE INTEREST U/S 234B AND 234C OF RS. 3,42 ,142/-. ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 17 49. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN A PPEAL BEFORE THE CIT(A). 50. BEFORE THE CIT(A), THE AR OF THE ASSESSEE SUBMI TTED THAT THE ASSESSEE HAS BEEN WORKING FOR THE LAST 34 YEARS IN APSRTC, THEREFORE, HE HAD CERTAIN BALANCES OUT OF SAVINGS W HICH HAVE BEEN BROUGHT AS OPENING BALANCE EVEN THOUGH THE ASSESSEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT IN THIS REGARD. IT WA S THE CONTENTION OF THE AR THAT THE ABOVE AMOUNT IS ONLY OUT OF HIS SAVINGS FROM HIS SALARY INCOME AND, THEREFORE, THE ASSESSEE SHOULD HAVE BEEN GIVEN CREDIT FOR HIS PAST SAVINGS OUT OF HIS SALARY INCOME. 51. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HELD THAT SINCE THE ASSESSEE HAD BEEN WORKING FOR 3 4 YEARS, IT IS EXPECTED THAT THE ASSESSEE WOULD HAVE SOME SAVINGS AND, HENCE, HENCE THE CIT(A) WAS INCLINED TO ALLOW THE ASSESSEE SAVINGS OF RS. 2,00,000/- AND THE BALANCE RS. 1,13,434/- WAS C ONFIRMED. 52. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ACTION OF THE CIT(A) IN SUSTAINING THE ADDITION MAD E BY THE AO TO THE EXTENT OF RS. 1,13,434/-. 53. BEFORE US, THE LEARNED COUNSEL SUBMITTED THAT T HE ASSESSEE WORKED MORE THAN 34 YEARS IN APSRTC AND THEREFORE H E HAD CERTAIN BALANCES OUT OF HIS SAVINGS, WHICH HAVE BEE N BROUGHT AS OPENING BALANCES EVEN THOUGH THE ASSESSEE DID NOT M AINTAIN ANY BOOKS OF ACCOUNT IN THIS REGARD. IT WAS THE CONTENT ION OF THE LEARNED COUNSEL THAT THE ABOVE AMOUNT OF RS. 3,13,4 34/- IS ONLY OUT OF HIS SAVINGS FROM HIS SALARY INCOME AND THE C REDIT SHOULD BE GIVEN FOR THE PAST SAVINGS OUT OF SALARY INCOME. ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 18 54. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. BEFORE US, THE LEARNED COUNSEL POINTED OUT THAT THOUGH THE ASSETS WERE ACQUIRED PRIOR TO 2001, BALANCE SHEET HAS BEEN SHOW N ONLY POST- SEARCH. SINCE THE CIT(A) GAVE PARTIAL RELIEF ON THE GROUND THAT THE ASSESSEE WOULD HAVE SOME ACCUMULATED SAVINGS AND IT IS ONLY MATTER OF DISCRETION AND ESTIMATION WITH RESPECT TO THE SAVINGS OF THE ASSESSEE, WE REMIT THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE ISSUE AFTER VERIFICATION OF THE RECORD/DETAILS OF SAVINGS, WHICH WILL BE PUT FORTH BY THE ASSESSEE IN SUPPORT OF HIS CASE. THE ASSESSEE IS DIRECTED TO FILE THE DETAILS OF HIS PAST SAVINGS IN SUPPORT OF HIS CASE. THUS, T HIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 55. IN THE RESULT, THIS APPEAL OF THE ASSESSEE BEIN G ITA NO. 683/H/11 IS TREATED AS ALLOWED FOR STATISTICAL PURP OSES. C.O. NO. 36/H/11 IN ITA NO. 610/H/11 56. SINCE THE REVENUE APPEAL BEING ITA NO. 610/HYD/ 2011 HAS BEEN REMITTED TO THE FILE OF THE AO BY SETTING ASID E THE ORDER OF THE CIT(A), THE CO FILED BY THE ASSESSEE IN SUPPORT OF THE ORDER OF THE CIT(A), BECOMES INFRUCTUOUS AND THE SAME IS DIS MISSED AS INFRUCTUOUS. C.O. NO. 37/H/11 IN ITA NO. 611/HYD/11 57. THE CO FILED BY THE ASSESSEE IS IN SUPPORT OF T HE ORDER OF THE CIT(A), WHICH HAS BEEN UPHELD BY US IN REVENUES AP PEAL BEING ITA NO. 611/HYD/11 (SUPRA). THEREFORE, THE C.O. FIL ED BY THE ITA NO. 485,486,610, 611 & 683 AND C.O. 36 & 37/H/1 1 SHRI A. MUNUSWAMY & SHRI A. RAMESH 19 ASSESSEE BECOMES INFRUCTUOUS AND THE SAME IS DISMIS SED AS INFRUCTUOUS. 58. TO SUM UP, APPEALS BEING ITA NOS. 485 & 486/H/1 1 ARE ALLOWED, APPEALS BEING ITA NOS. 610 & 683/H/11 ARE ALLOWED FOR STATISTICAL PURPOSES, APPEAL BEING ITA NO. 611/H/11 IS DISMISSED AND CO NOS. 36 & 37/H/11 ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 06/05/2013. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGH AVAN) ACCOUNTANT MEMBER JUDICIAL MEMBE R HYDERABAD, DATED: 6 TH MAY, 2013. KV COPY TO:- 1) SRI A. MUNUSWAMY, D.NO. 13-6-600/10A, P.K. LAYO UT, TIRUPATHI. 2) SHRI A. RAMESH, D.NO. 13-6-600/35-E5, PK LAYO UT, TIRUPATHI 3) DCIT, CENTRAL CIRCLE, TIRUPATHI 4) CIT(A)-VII, HYDERABAD 5) CIT(CENTRAL), HYDERABAD 6) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., H YDERABAD.