M/s Bhavani Jewellers, Hyderabad V. ITO, Ward 8(2), Hyderabad

ITA 1003/HYD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91773 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 07-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 20-06-2013
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Unexplained cash credit
• Section: 133A; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER I.T.A. NO. 1136/HYD/2012 ASSESSMENT YEAR: 2008-09 INCOME TAX OFFICER , WARD-8(2), HYDERABAD VS M/S. BHAVANI JEWELLERS, HYDERABAD [PAN: AADFB7724K] (APPELLANT) (RESPONDENT) I.T.A. NO. 1003/HYD/2013 ASSESSMENT YEAR: 2008-09 M/S. BHAVANI JEWELLERS, HYDERABAD [PAN: AADFB7724K] VS INCOME TAX OFFICER , WARD-8(2), HYDERABAD (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI RAJAT MITRA, DR FOR ASSESSEE : S HRI P. MURALI MOHAN RAO , AR DATE OF HEARING : 07 - 0 7 - 201 5 DATE OF PRONOUNCEMENT : 15 - 0 7 - 2015 O R D E R PER B. RAMAKOTAIAH, A.M. : THESE ARE CROSS APPEALS BY ASSESSEE AND REVENUE AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I II, HYDERABAD DATED 29-05-2012. ASSESSEE IS AGGRIEVED ON PART-CONFIRMA TION OF THE ADDITION MADE BY THE ASSESSING OFFICER (AO), WHEREAS REVENUE IS AGGRIEVED ON DELETION OF VARIOUS ADDITIONS. I.T.A. NOS. 1136/HYD/12 & 1003/HYD/13 M/S. BHAVANI JEWELLERS :- 2 -: 2. BRIEFLY STATED, ASSESSEE IS IN THE BUSINESS OF JEWELLERY AND FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME O F RS. 49,98,490/-. THERE WAS A SURVEY OF OPERATION U/S. 133A OF THE IN COME TAX ACT [ACT] CONDUCTED ON 06-02-2008, DURING WHICH THE AO FOUND SOME EXCESS STOCK AND TOOK DECLARATION FROM THE PARTNER. ASSES SEE-PARTNER ADMITTED EXCESS STOCK OF RS. 25,44,565/- IN CHARMINAR BRANCH AND RS. 26,59,316/- AGAINST PANJAGUTTA BRANCH. HOWEVER, AT THE TIME OF FILING OF RETURNS, ASSESSEE ADMITTED THE AMOUNT OF RS. 44,90, 295/- AS ADDITIONAL INCOME AND FILED A RETURN ACCORDINGLY. IN THE COUR SE OF ASSESSMENT, AO AFTER GIVING SHOW CAUSE NOTICE TO ASSESSEE MADE VAR IOUS ADDITIONS AS UNDER: I. EXCESS STOCK DETERMINED RS. 26,43,435/-; II. INCOME ON CHITS RS. 1 LAKH; III. INCOME ON GOLD SCHEME RS. 1,44,000/-; IV. INCOME ON ANOTHER GOLD SCHEME RS. 1,44,000/- V. OUTSTANDING SUNDRY CREDITORS AS UNEXPLAINED RS. 87,06, 851/-. 3. ASSESSEE CONTESTED BEFORE THE LD.CIT(A), WHO CO NFIRMED PART OF EXCESS STOCK AT RS. 7,13,580/- AS AGAINST RS. 26 ,43,435/- AND DELETED OTHER ADDITIONS. ASSESSEE IS AGGRIEVED ON THE PART -CONFIRMATION OF THE EXCESS STOCK. REVENUE IS AGGRIEVED ON THE DELETED A MOUNTS. ASSESSEE'S APPEAL IN ITA NO. 1003/HYD/2013 : 4. THE ONLY ISSUE CONTESTED BY ASSESSEE IS WITH RE FERENCE TO CONFIRMATION OF AMOUNT OF RS. 7,13,580/- OUT OF THE ADDITION MADE BY THE AO. AO HAS ISSUED SHOW CAUSE NOTICE QUANTIFYIN G THE EXCESS STOCK IN SURVEY AT RS. 62,13,730/-, WHEREAS ASSESSEE DECL ARED RS. 44,90,295/. I.T.A. NOS. 1136/HYD/12 & 1003/HYD/13 M/S. BHAVANI JEWELLERS :- 3 -: THE DIFFERENCE OF RS. 17,23,435/- WAS ADDED AS EXCE SS STOCK. IN ADDITION, THERE WAS GOLD VALUED AT RS. 9,20,000/- W HICH ASSESSEE IN THE COURSE OF SURVEY ITSELF ADMITTED THAT IT BELONGS TO THIRD PARTIES AND WOULD FURNISH THE NECESSARY DETAILS. SINCE, AO IS NOT SA TISFIED WITH THE EXPLANATION GIVEN BY ASSESSEE, HE ADDED THE ABOVE A MOUNT OF RS. 9,20,000/- ALSO, THUS, MAKING ADDITION OF RS. 26,43 ,435/-. 4.1 BEFORE THE LD.CIT(A), ASSESSEE CONTESTED THAT AO ARRIVED AT THE EXCESS STOCK TAKING THE VALUE OF GOLD AT RS. 1, 150 PER GRAM, WHEREAS ASSESSEE'S PRICE OF GOLD AS PER COST OR MARKET PRIC E WAS ONLY RS. 870/- PER GRAM, THEREBY THE DIFFERENCE AROSE. ASSESSEE F ILED NECESSARY RECONCILIATIONS BEFORE THE LD.CIT(A) WHICH ARE EXTR ACTED IN PARA 5.2 AND 5.3 OF IMPUGNED ORDER. HOWEVER, LD.CIT(A) DID NOT AGREE WITH ASSESSEE'S CONTENTIONS AND AFTER EXTRACTING THE STATEMENTS OF PARTNER, CONFIRMED PARTLY AS UNDER: '5.9 FROM THE ABOVE, THE PARTNER HAS STATED THAT AT PANJAGUTTA BRANCH CLOSING STOCK ARRIVED AT RS. 17 ,90,959/-. AS PER THE APPROVED VALUER REPOT, THE VALUE OF THE CLOSIN G STOCK WAS ARRIVED AT RS. 52,95,275/-. THEREFORE, THERE IS EXCESS OF RS. 35,79,315/- WHICH INCLUDES CUSTOMERS STOCK OF RS. 9,20,000/-. FURTHER, ON THE BALANCE OF RS. 26,59,315/-, THE PARTNER ACCEPTED T O PAY THE TAX. THEREFORE, THE TOTAL STOCK DIFFERENCE AS PER THE S TATEMENT OF THE PARTNER IS RS. 25,44,565/- CHARMINAR BRANCH AND PA NJAGUTTA BRANCH EXCLUSIVELY RS. 26,59,315/- INCLUDING RS. 9 ,20,000/- OF CUSTOMERS STOCK. THEREFORE, THE APPELLANT HAS TO DISCLOSE STOCK OF RS. 25,44,560/- + RS. 26,59,315 = RS. 52,03,875/-. BUT AS PER THE COMPUTATION STATEMENT, THE APPELLANT DISCLOSED RS. 44,90,295/-, STILL THERE IS A DIFFERENCE OF RS. 7,13,580/-. TH EREFORE, THE AO ADDED RS. 26,43,435/- WHICH IS NOT CORRECT. WITH REGARD TO CUSTOMER STOCK OF RS. 9,20,000/- THE APPELLANT ITSELF STATED IN T HE STATEMENT ABOVE IT BELONGS TO CUSTOMER STOCK AND AS PER THE DETAIL S FURNISHED THAT THE VOUCHERS AND BILLS WERE BEFORE SURVEY DATE ALS O. THEREFORE, THIS AMOUNT IS TO BE TREATED AS CUSTOMERS STOCK. THUS, FINALLY, THERE IS A DIFFERENCE OF RS. 7,13,580/- SHOULD BE ADDED IN PL ACE OF RS. 26,43,435/-'. I.T.A. NOS. 1136/HYD/12 & 1003/HYD/13 M/S. BHAVANI JEWELLERS :- 4 -: ASSESSEE IS AGGRIEVED ON THE ABOVE CONFIRMED AMOUNT . 5. LD. COUNSEL REFERRING TO VARIOUS RECONCILIATION S FILED, SUBMITTED THAT THE SURVEY PARTY QUANTIFIED THE EXCE SS GOLD AT RS. 19,03,250/-, WHEREAS ASSESSEE VALUED THE SAME QUANT ITY AT RS. 14,39,850/-, THEREBY GIVING DIFFERENCE TO RS. 4,63, 400/- AT CHARMINAR BRANCH. AT PANJAGUTTA BRANCH, THE SURVEY PARTY ARR IVED AT EXCESS VALUE OF RS. 26,59,316/-, WHEREAS THE SAME WAS VALUED AT RS. 14,09,130/- BASED ON THE VALUATION AS ON 31-03-2008. THIS GIVE RAISE TO A DIFFERENCE OF RS. 12,50,186/-. THE TOTAL DIFFERENCE THUS ARRI VED AT WAS RS. 17,13,586/- WHICH WAS THE AMOUNT AO CONSIDERED FOR ADDITION ON THE BASIS OF THE DISCLOSURE. IT WAS SUBMITTED THAT LD. CIT(A) WRONGLY CONSIDERED THE AMOUNTS AND WHEN ASSESSEE OFFERED TH E AMOUNT OF RS. 10 LAKHS FOR VARIOUS OMISSIONS AND COMMISSIONS, CREDIT TO THAT EXTENT WAS GIVEN AND AMOUNT OF RS. 7,13,580/- WAS CONFIRMED. IT WAS SUBMITTED THAT THERE IS NO QUANTITATIVE DIFFERENCE BUT ONLY V ALUATION DIFFERENCE AND AS PER THE VALUE ON 31-03-08, THE CLOSING STOCK WAS VALUED INCLUDING THE EXCESS STOCK FOUND. IT WAS FURTHER SUBMITTED THAT STATUTE, DURING THE 133A DOES NOT EMPOWER ANY OFFICER TO EXAMINE ANY PE RSON ON OATH AND SO STATEMENT RECORDED U/S. 133A HAS NO EVIDENTIARY VALUE AND ANY ADMISSION MADE DURING SUCH STATEMENT CANNOT BE MADE AS THE BASIS OF ADDITION. HE REFERRED TO THE JUDGMENTS OF THE HON' BLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. S. KHADER KHAN AND SON S 254 CTR 228(SC) FOR THE ABOVE PROPOSITION. LD. AR ALSO RELIED ON V ARIOUS CO-ORDINATE BENCH DECISIONS AND PARTICULARLY IN THE CASE OF M/S . PANNA LAL ROSHAN LAL JEWELLERS P. LTD., VS. DCIT IN ITA NO. 1262/DEL /2011 DT. 17-06-2011 FOR THE PROPOSITION THAT EXCESS STOCK CANNOT BE ARR IVED AT IN A MIDDLE OF THE YEAR WHEN BOOKS OF ACCOUNTS WERE CLOSED AT THE END OF THE YEAR. I.T.A. NOS. 1136/HYD/12 & 1003/HYD/13 M/S. BHAVANI JEWELLERS :- 5 -: 6. LD. DR HOWEVER, SUBMITTED THAT AO MADE THE ADDI TION ON EXAMINATION OF FACTS FOUND DURING THE SURVEY AND CI T(A) WAS WRONG IN DELETING THE AMOUNTS ON WHICH REVENUE IS ALSO IN AP PEAL. HE SUPPORTED THE ORDER OF AO. 7. WE HAVE CONSIDERED THE ISSUE AND EXAMINED THE R ECORD. WE ARE OF THE OPINION THAT BOTH AO AND CIT(A) WERE NOT CORRECT IN AS MAKING THE ADDITION OR DELETING ONLY PARTLY. FIRST OF ALL , AS SEEN FROM THE STATEMENTS ON RECORD, THE EXCESS STOCK WAS ARRIVED AT ON THE DAY OF SURVEY BASED ON GP CALCULATIONS. BE THAT AS IT MAY , THE QUANTITY OF THE GOLD HAS TALLIED BUT THE DIFFERENCE AROSE ONLY IN T HE CONTEXT OF RATE ADOPTED FOR VALUING THE EXCESS STOCK. IT WAS THE S UBMISSION THAT GOLD WAS VALUED AT RS. 1,150 PER GRAM DURING SURVEY, WHE RE AS THE BOOK VALUE/ MARKET VALUE WAS AT RS. 870 PER GRAM WHICH W AS ADOPTED BY ASSESSEE AT THE END OF THE YEAR. ACCORDINGLY, INST EAD OF RS. 52,03,881/- STOCK EXCESS INCLUDING SILVER ORNAMENTS, DIAMONDS A ND PEARLS, ASSESSEE OFFERED RS. 34,90,295/- WHICH GAVE RISE TO THE DIFF ERENCE OF RS. 17,13,586/-. THIS CONTENTION OF ASSESSEE HAS TO BE ACCEPTED AS AO ACCEPTED THE CLOSING STOCK VALUATION AS SHOWN IN BO OKS. FURTHER AS SEEN FROM THE ORDER OF ASSESSMENT PASSED BY THE AO, HE D ETERMINES THE CONCEALED AMOUNT AT RS. 62,13,730/-. THERE IS NO JU STIFICATION HOW THIS FIGURE WAS ARRIVED AT AND IN THE SHOW CAUSE NOTICE ISSUED ONLY THIS AMOUNT WAS SHOWN AS VALUE OF EXCESS STOCK. THE STO CK AS PER THE STATEMENTS WAS ONLY RS. 52,03,881/-. THUS, THERE I S DIFFERENCE OF AMOUNT, MAY BE THE VOLUNTARY DISCLOSED AMOUNT OF RS . 10 LAKHS WAS ALSO INCLUDED AS EXCESS STOCK. THIS INDICATES THAT AO WITHOUT ANY APPLICATION OF MIND HAS SIMPLY TAKEN THE AMOUNTS. DIFFERENCE OF THE AMOUNT WAS AS A RESULT OF VALUATION OF CLOSING STOC K, INCLUDING EXCESS STOCK FOUND ON THE DATE OF SURVEY. ON THE BASIS OF PRINCIPLES OF VALUATION OF CLOSING STOCK I.E., COST OR MARKET PRI CE WHICHEVER IS LESS, WE I.T.A. NOS. 1136/HYD/12 & 1003/HYD/13 M/S. BHAVANI JEWELLERS :- 6 -: DO NOT SEE ANY REASON TO UPHOLD THE ADDITION CONFIR MED BY THE CIT(A) AT RS. 7,13,580/-. SINCE, ASSESSEE'S EXPLANATION IS V ALID EXPLANATION AND FURTHER THE ENTIRE EXCESS QUANTITY AS ARRIVED ON TH E DATE OF SURVEY WAS TAKEN TO THE BOOKS OF ACCOUNTS AND VALUED, WE DO NO T SEE ANY REASON TO MAKE ANY FURTHER ADDITION TO THE AMOUNTS ON PRESUMP TIONS. WE ALSO NOTICE THAT THE VALUE OF SILVER ORNAMENTS AND DIAMO NDS AND PEARLS ACCEPTED IN THE COURSE OF SURVEY ITSELF WAS OFFERED WITHOUT ANY VARIATION. AS THERE IS JUSTIFICATION IN REDUCING THE VALUATION , WE DO NOT SEE ANY REASON TO UPHOLD THE ORDER OF CIT(A). NOT ONLY THA T, STATEMENT RECORDED DURING THE SURVEY ITSELF CANNOT BE A BASIS FOR MAKI NG THE ADDITION, UNLESS SUPPORTED BY EVIDENCE. ASSESSEE JUSTIFIED TH E VALUATION OF AMOUNTS AND AS BOOKS OF ACCOUNTS WERE NOT REJECTED AND BOOK RESULTS WERE ACCEPTED, WE AGREE WITH ASSESSEE'S CONTENTIONS AND DELETE THE ADDITION CONFIRMED BY THE CIT(A) AT RS. 7,13,580/-. ASSESSEE'S GROUNDS ON THIS ARE ACCORDINGLY ALLOWED. 8. IN THE RESULT, ASSESSEE'S APPEAL IS ALLOWED. REVENUE'S APPEAL IN ITA NO. 1136/HYD/2012: 9. AS BRIEFLY STATED, REVENUE IS AGGRIEVED ON THE DELETION OF AMOUNTS ADDED BY THE AO. LD.CIT(A) DELETED THE AMOU NT TO AN EXTENT OF RS. 19,29,855/- OUT OF EXCESS STOCK ARRIVED AT BY A O. REVENUE HAS RAISED TWO GROUNDS ON THE ABOVE AMOUNT WHICH INCLUD ED THE EXCESS STOCK DISCUSSED ABOVE IN ASSESSEE'S APPEAL AND FURT HER AN AMOUNT OF RS. 9,20,000/- STATED TO BE BELONGING TO CUSTOMERS. WE HAVE ADJUDICATED THE EXCESS STOCK ISSUE IN ASSESSEE'S APPEAL. FOR TH E REASONS STATED THEREIN, THE CIT(A) DELETION OF THE AMOUNT PARTLY I S TO BE JUSTIFIED. EVEN THE AMOUNT CONFIRMED BY THE CIT(A) WAS ALSO DELETED IN ASSESSEE'S I.T.A. NOS. 1136/HYD/12 & 1003/HYD/13 M/S. BHAVANI JEWELLERS :- 7 -: APPEAL. THERE IS NO MERIT IN REVENUE'S CONTENTIONS ON THE ABOVE AMOUNT DELETED BY THE CIT(A). 10. COMING TO THE ISSUE OF ADDITION OF RS. 9,20,00 0/-, ASSESSEE'S IN THE STATEMENT ITSELF ADMITTED THAT THE STOCK PER TAINS TO THIRD PARTIES TO AN EXTENT OF 807.07 GRAMS. ASSESSEE FURNISHED NECE SSARY DETAILS RECONCILING WITH THE AVAILABLE RECORD. ON THE REAS ON THAT ASSESSEE DID NOT FURNISH THE IDENTITIES OF THE PERSONS, AO DID N OT ACCEPT. LD.CIT(A) ACCEPTING THE STATEMENT AND ALSO NOTICING THAT ASSE SSEE FURNISHED NECESSARY DETAILS, VOUCHERS AND BILLS WHICH WERE BE FORE THE SURVEY DATE ALSO, THE AMOUNT WAS DELETED. 11. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE DO NOT SEE ANY MERIT IN REVENUE'S CONTENTIONS. FIRST OF ALL, IT W AS ADMITTED THAT STOCK VALUED AT RS. 9,20,000/- BELONGS TO THIRD PARTY CUS TOMERS IN THE SURVEY ITSELF. IN FACT IN QUESTION NO.13 EXTRACTED BY THE LD.CIT(A), IN PARA 5.8 OF THE ORDER, ASSESSEE ADMITTED NET OF THE AMOUNT AT R S. 26,59,315/- FROM PUNJAGUTTA BRANCH AFTER EXCLUDING THE AMOUNT OF RS. 9,20,000/-. THIS ITSELF INDICATE THAT THE SURVEY PARTY WAS SATISFIED ABOUT THE CONTENTION THAT STOCK TO THAT EXTENT DOES NOT BELONG TO ASSESS EE AND BELONG TO THIRD PARTIES. ON WHAT BASIS THE PRESENT AO BROUGHT IT T O TAX AS ASSESSEE'S STOCK COULD NOT BE UNDERSTOOD. THE LD.CIT(A) HAS R IGHTLY CONSIDERED THE ISSUE AND IN OUR OPINION, DELETED THE SAME BASED ON FACTS. ACCORDINGLY, THE ORDER OF CIT(A) IS UPHELD AND REVENUE'S CONTENT IONS ON THIS ARE REJECTED. GROUND NOS. 2, 3 AND 4 ARE ACCORDINGLY D ISMISSED. 12. GROUND NO.5 PERTAINS TO ADDITION MADE BY AO TO WARDS UNACCOUNTED DIVIDEND OF RS. 1 LAKH. IN ORDER TO UN DERSTAND THIS ISSUE, IT IS BETTER TO EXTRACT THE AO'S SHOW CAUSE NOTICE WHICH SPEAKS FOR ITSELF. I.T.A. NOS. 1136/HYD/12 & 1003/HYD/13 M/S. BHAVANI JEWELLERS :- 8 -: '2. AS PER THE ANNEXURE-A/24 YOU HAVE CHIT WITH M/S . RUSHI CHIT FUNDS AND THE SAME WAS ENDED WITH 30.09.2007 AS IT WAS STARTED ON 28.08.2005 FOR THE PERIOD OF 25 MONTHS FOR TOTAL SUM OF RS. 5,00,000/- AS PER THE BOOK IT IS FOUND THAT FO R EACH MONTH YOU GOT DIVIDEND OF RS. 5,000/- ON AS AVERAGE AND AFTE R REDUCING FIRST MONTH AND FINAL MONTH AND THE A.O. IS TAKING FOR 2 0 MONTHS AFTER CONSIDERING ALL COMMISSION AND OMISSIONS THE ESTIM ATED AMOUNT IS RS. 1,00,000/- PLEASE EXPLAIN WHY IT SHOULD NOT BE TREATED AS UNACCOUNTED DIVIDEND AMOUNT AND ADDED TO YOUR INCO ME ADDITION OF RS. 1,00,000/-'. 12.1 AGAINST THE ABOVE SHOW CAUSE NOTICE GIVEN BY THE AO, ASSESSEE SUBMITTED AS UNDER: '2. WE SUBMIT THAT, THE DIVIDEND OF RS. 5,000/- EST IMATED FOR 20 MONTHS WAS INCORRECT, THE DIVIDEND WILL NOT BE THE SAME FOR ALL THE MONTHS, MOREOVER WE HAD LIFTED THE CHIT AMOUNT IN THE PREVIOUS YEAR ON 20.02.2007 FOR RS. 4,75,000/- FOR THE DAY TO DAY BUSINESS PURPOSE. HENCE, WE REQUEST THAT THE ESTIMATION OF RS. 1,00 ,000/- SHOULD NOT BE TREATED AS UNACCOUNTED DIVIDEND INCO ME FOR THE ASSESSMENT YEAR 2008-09 SINCE, THE DIVIDEND WILL N OT BE THE SAME FOR ALL THE MONTHS AND THE DIVIDEND WILL DECREASE MONTH AT THE END OF THE CHIT PERIOD AND ALSO THE FIRM HAS LIFTED TH E CHIT AND HAS LOSS ON CHIT VALUE'. 12.2 AO MADE THE ADDITION STATING AS UNDER: '2. IN RESPECT OF ADDITION OF RS. 1,00,000 PROPOSED TOWARDS CHIT DIVIDEND. THE ASSESSEE HAS REQUESTED TO DROP THE ADDITION STATING THAT THE CHIT WAS LIFTED ON 20.02.2007 WIT HOUT FURNISHING THE DOCUMENTARY EVIDENCE SUCH AS BANK ACCOUNT THROUGH ACCOUNT THE AMOUNT WAS RECEIVED AND HOW MUCH RECEIVED. UNDER THESE CIRCUMSTANCES THE ASSESSEE'S EXPLANATION CANNOT BE ACCEPTED. HENCE THE AMOUNT OF RS. 1,00,000 IS ADDED TO THE I NCOME OF THE ASSESSEE'. 12.3 LD.CIT(A) DELETED THE ADDITION STATING AS UND ER: I.T.A. NOS. 1136/HYD/12 & 1003/HYD/13 M/S. BHAVANI JEWELLERS :- 9 -: '6.3 I HAVE CAREFULLY GONE THROUGH THE FACTS OF THIS ISSUE. THE APPELLANT FIRM HAD CHIT WITH M/S. RUSHI CHIT F UNDS STARTED ON 28.08.2005 AND ENDED WITH 30.09.2007 FOR THE PERIOD OF 25 MONTHS FOR TOTAL SUM OF RS. 5,00,000/- WITH A DIVIDEND OF RS. 5,000/- ON AVERAGE. THE ASSESSING OFFICER ESTIMATED THE DIVID END FOR 20 MONTHS @ RS. 5,000/- AND ADDED RS. 1,00,000/- AS IN COME. AS PER THE APPELLANT SUBMISSIONS THIS ESTIMATION OF RS. 5, 000/- PER MEMBER FOR 25 MONTHS IS NOT CORRECT AND THE FIRM HA D LIFTED THE CHIT AMOUNT IN THE PREVIOUS YEAR ON 20.02.2007 FOR RS. 4 ,75,000/- FOR THE DAY TO DAY BUSINESS PURPOSE (WHICH MAY PLEASE B E SEEN FROM THE PAGE NO. 42 OF THE PAPER BOOK SUBMITTED ON 19.0 3.2012). THE APPELLANT FURTHER SUBMITS THAT BOTH CHIT DIVIDEND A ND CHIT LOSS IN THE P&L A/C, OR THE AMOUNT INVESTED AND AMOUNT AVAILED IN CHIT AUCTION AS LOAN WITHOUT TAKING INTO THE PROFIT AND LOSS ACC OUNT. THE APPELLANT MAINTAINED THE CHIT FUND ACCOUNT AS PER T HE BOOKS OF ACCOUNTS. THEREFORE, ESTIMATION OF THE DIVIDEND BY THE ASSESSING OFFICER IS NOT JUSTIFIED. AFTER CONSIDERING THE AP PELLANT'S SUBMISSIONS, THE ESTIMATION OF THE ADDITION MADE BY THE AO IS DELETED. HENCE, GROUNDS OF APPEAL ON THIS ISSUE IS ALLOWED'. 12.4 ON PERUSING THE ABOVE, WE DO NOT SEE ANY VALI D REASON IN THE REVENUE'S CONTENTIONS. FIRST OF ALL, THERE IS NO B ASIS FOR BRINGING THE AMOUNT TO TAX ON ASSUMPTIONS AND PRESUMPTIONS AS WA S DONE BY THE AO. WE ARE UNABLE TO UNDERSTAND THE REVENUE'S GROU NDS ALSO. THE REVENUE'S GROUND SAYS ' THE CIT(A) SHOULD NOT HAVE ACCEPTED THE ARGUMENT OF THE ASSESSEE, THE CHIT DIVIDEND HAS BEE N OFFERED AND CHIT LOSS HAS BEEN CLAIMED IN THE P&L A/C. THE CIT(A) SHOULD HAVE VERIFIED THE P&L A/C WHEREIN, NO CHIT DIVIDEND HAS BEEN OFFERED NEIT HER THE LOSS HAS BEEN DEBITED'. THIS GROUND IS NOT BASED ON THE CIT(A)'S ORDER. EV EN THOUGH CIT(A) DID MENTION THAT ASSESSEE SUBMITTED THAT BOT H CHIT DIVIDEND AND CHIT LOSS IN THE P&L A/C, FURTHER STATEMENT SHOWS THAT THEY ARE NOT TAKEN IN TO P&L A/C. AS FACTS INDICATE, THE CHIT H AS STARTED AS EARLY AS 28-08-2005 AND ENDED IN 30-09-2007. ASSESSEE DID M AINTAIN THE CHIT ACCOUNT IN THE BOOKS OF ACCOUNTS BUT NEITHER THE LO SS NOR DIVIDEND WAS BEEN TAKEN TO P&L A/C, THE FACT OF WHICH WAS ADMITT ED BY THE REVENUE AS WELL. IN THESE CIRCUMSTANCES, AO HAS TO EXAMINE WHETHER AT THE END OF THE CHIT, ASSESSEE EARNED ANY SURPLUS OR LOSS. NOTHING WAS DONE I.T.A. NOS. 1136/HYD/12 & 1003/HYD/13 M/S. BHAVANI JEWELLERS :- 10 -: EXCEPT PRESUMING AN AMOUNT OF RS. 1 LAKH ADDITION W ITHOUT ANY BASIS. ASSESSEE HAS SUBMITTED RELEVANT DETAILS BEFORE CIT( A) WHO AFTER EXAMINATION, DELETED THE AMOUNT. SINCE FACTUAL VER IFICATION WAS DONE BY THE CIT(A), WE UPHOLD THE SAME AND DISMISS THE GROU ND RAISED BY THE REVENUE. 13. GROUND NO.6 PERTAINS TO ADDITION ON ACCOUNT OF MEMBERS GOLD SCHEME AT RS. 1,44,000/- EACH, ON TWO GOLD SCH EMES. THIS IS AN INTERESTING ADDITION MADE BY THE AO FOR WHICH ONE H AS TO EXTRACT THE SHOW CAUSE NOTICE ISSUED BY THE AO TO ASSESSEE: '3. AND AS PER THE ANNEXURE-13/A YOU HAVE INTRODUCE D ONE GOLD SCHEME AND FROM 167 MEMBERS YOU ARE COLLECTIN G RS. 1,000/- FROM EACH. THAT MEANS RS. 1,67,000/- PER MONTH BU T YOU HAVE NOT ADMITTED ANY INCOME ON THAT AND FOR ONE YEAR 12 X RS. 1,67,000 = RS. 20,04,000/- AND AS PER THE LOCAL ENQUIRY YOU M IGHT YOU HAVE PAID CERTAIN AMOUNT AND IT MAY BE RS. 16,000/- PER CANDIDATE WHO IS A SUCCESSOR OF BIGHTING. HENCE AFTER TAKING AL L COMMISSION AND OMISSIONS YOU MIGHT YOU HAVE DEPOSITED RS. 1,00,00 0/- MINIMUM EITHER IN BANK OR IN BUSINESS. SO I AM ADOPTING A T THE RATE OF 12% ON RS. 12,00,000/- AND ARRIVED AN AMOUNT OF RS. 1, 44,000/- INTERESTED AND ADDED UNDER THE HEAD OF INCOME FROM OTHER SOURCES. YOU ARE ALSO REQUESTED TO EXPLAIN THE SCHEME AND N ATURE OF BUSINESS ADDITION OF RS. 1,44,000/-. 4. AND AS PER THE ANNEXURE 14/A YOU HAVE INTROD UCED ONE GOLD SCHEME AND FROM 104 MEMBERS YOU ARE COLLECTIN G RS. 1,000/- FROM EACH. THAT MEANS RS. 1,04,000/- PER MONTH BU T YOU HAVE NOT ADMITTED ANY INCOME ON THAT AND FOR ONE YEAR 12 X RS. 1,04,000 = RS. 12,48,000/- AND AS PER THE LOCAL ENQUIRY YOU M IGHT YOU HAVE PAID CERTAIN AMOUNT AND IT MAY BE RS. 16,000/- PER CANDIDATE WHO IS A SUCCESSOR OF BIGHTING. HENCE AFTER TAKING AL L COMMISSION AND OMISSIONS YOU MIGHT YOU HAVE DEPOSITED RS. 1,00,00 0/- MINIMUM EITHER IN BANK OR IN BUSINESS. SO I AM ADOPTING A T THE RATE OF 12% ON RS. 12,00,000/- AND ARRIVED AN AMOUNT OF RS. 1, 44,000/- INTEREST AND ADDED UNDER THE HEAD OF INCOME FROM O THER SOURCES. YOU ARE ALSO REQUESTED TO EXPLAIN THE SCHEME AND N ATURE OF BUSINESS. ADDITION OF RS. 1,44,000/-'. I.T.A. NOS. 1136/HYD/12 & 1003/HYD/13 M/S. BHAVANI JEWELLERS :- 11 -: 13.1 ASSESSEE EXPLAINED THAT IT HAS INTRODUCED GOL D SCHEMES TO THE MEMBERS BY COLLECTING RS. 1,000/- PER MONTH FRO M EACH MEMBER FOR 16 MONTHS. IF THE MEMBERS PAY 16 MONTHS REGULARLY, MEMBER WOULD BE ENTITLED FOR GOLD ORNAMENTS WORTH RS. 17,000/- AS P ER PREVAILING RATES AT THE END OF THE SCHEME. MANY MEMBERS MAY NOT CONTIN UE AND IF THEY DROP OUT, THE GOLD WAS SETTLED TO THE EXTENT OF AMO UNT DEPOSITED BY THEM IN THE SCHEME. IT WAS FURTHER SUBMITTED THAT ALL T HE SALES ACCOUNTED UNDER THE SCHEME ARE ACCOUNTED FOR AND FURNISHED TH E DETAILS TO THE AO. IT WAS STATED THAT AN AMOUNT OF RS. 1.64 CRORES DUR ING THE YEAR INCLUDES THE SALES ON GOLD SCHEME. THEREFORE A SEPARATE ADD ITION WAS NOT REQUIRED. 13.2. AO HOWEVER, DID NOT AGREE AND PROPOSED TO AD D RS. 1,44,000/- TO EACH SCHEME, THUS MAKING RS. 2,88 ,000/- ADDITION. LD.CIT(A) AFTER CONSIDERING THE SUBMISSION OF ASSES SEE ACCEPTED THE SAME AND DELETED THE ADDITION MADE BY THE AO. HENC E, REVENUE IS IN APPEAL. 13.3 AFTER CONSIDERING THE CONTENTIONS OF THE DR A ND EXPLANATION OF THE AR, WE DO NOT SEE ANY REASON TO INTERFERE WI TH THE ORDER OF THE CIT(A). FIRST OF ALL WE ARE UNABLE TO UNDERSTAND H OW THE AO CAN MAKE THE ADDITION AND ARRIVE AT A PROFIT OF RS. 1 LAKH M INIMUM IN THE YEAR PER MONTH, WHEN ASSESSEE SUBMITS THAT ONLY AT THE END O F THE SCHEME, HE WILL PAY RS. 1,000/- TO THEM IN ADDITION TO AMOUNT DEPOSITED. AS AND WHEN AMOUNT WAS WITHDRAWN OR TAKEN BY THE PARTY, GO LD WAS GIVEN TO THE PARTY / MEMBER AND THE SAME WAS SHOWN IN THE GO LD SALES ACCOUNT. SINCE IT IS A BUSINESS PROPOSITION AND ALL THE TRAN SACTIONS HAVING BEEN ACCOUNTED IN THE BOOKS OF ACCOUNT, FURTHER ADDITION ON ASSUMPTIONS AND PRESUMPTIONS DOES NOT ARISE. IF AO WAS OF THE OPIN ION THAT ASSESSEE IS DEPOSITING RS. 1 LAKH PER MONTH IN THE BANK EITHER RS. 1 LAKH SHOULD I.T.A. NOS. 1136/HYD/12 & 1003/HYD/13 M/S. BHAVANI JEWELLERS :- 12 -: BE INCOME BUT THE SAME WAS TAKEN FOR ESTIMATION OF 12% ON RS. 12 LAKHS AT RS. 1,44,000/-. THERE IS NO RHYME OR REASO N FOR AOS ADDITION. IT DOES NOT HAVE ANY JUSTIFICATION. FIRST OF ALL, THE CALCULATION ITSELF IS WRONG. EVEN IF ONE WERE TO PRESUME A RATE OF 12% OF INTEREST ON THE ABOVE AMOUNT, AO HIMSELF ACCEPTS THAT THERE WILL BE DEPOSIT OF RS. 1 LAKH PER MONTH. HOW 12% INTEREST CAN BE WORKED OUT ON RS. 1 LAKH DEPOSITED IN THE LAST MONTH CAN ONLY BE EXPLAINED B Y THE AO. THE CALCULATION ITSELF IS WRONG AND THE BASIS FOR SUCH CALCULATION IS DEVOID OF ANY MERIT. LD.CIT(A) HAS DONE THE CORRECT THING IN DELETING THE ADDITION. WE ARE UNABLE TO UNDERSTAND HOW AO CAN COME IN APPE AL ON THIS ISSUE WHEN THERE IS NO BASIS FOR MAKING THE ADDITION ITSE LF. THERE IS NO APPLICATION OF MIND BY THE AO AT THE TIME OF MAKING ADDITION AND ALSO AT THE TIME OF MAKING SECOND APPEAL. WE LEVY COST ON AO WHICH WOULD BE DEALT WITH AT THE END OF THE ORDER. GROUNDS ARE AC CORDINGLY DISMISSED. 14. GROUND NO. 7 RAISED BY REVENUE IS ON THE DELET ION OF THE OUTSTANDING CREDITORS ADDITION MADE BY THE AO AT R S. 87,06,851/-. THE SHOW CAUSE ISSUED TO ASSESSEE BY THE AO IS AS UNDER : '5. AS PER THE BALANCE SHEET SUNDRY CREDITORS AND O THERS FOR AN AMOUNT OF RS. 87,06,851/- WHEN QUESTIONED THE S AME TO EXPLAIN THE AR HAS FURNISHED DETAILS OF PERSONS AND IN SOM E OF THE CASES ADDRESSES. TO ALL THE ADDRESSES THE ASSESSING OFF ICER HAS ISSUED NOTICES TO REPLY SOME OF THEM HAVE SENT LETTERS ST ATING THAT THEY HAVE GIVEN BUT ON VERIFICATION IT IS FOUND ALL THE LETTERS ARE PREPARED BY THE ASSESSEE AND SENT THROUGH SAME COLOR COVER. HENCE PLEASE EXPLAIN WHY THE ABOVE AMOUNT SHOULD BE TREATED AS FICTITIOUS CREDITS U/S. 68 AND ADDED TO YOUR INCOME. ADDITION OF RS. 87,06,851/-. 6. IF YOU HAVE ANY OBJECTION AND IF YOU ARE NOT S ATISFIED WITH THE ABOVE PROPOSAL PLEASE FURNISH THE DETAILS OF B ANK ACCOUNTS STANDING IN THE NAME OF YOU AND STATEMENTS OF BANK ACCOUNTS FOR THE PERIOD FROM 01.04.2007 31.03.2008 WITHOUT FA IL'. I.T.A. NOS. 1136/HYD/12 & 1003/HYD/13 M/S. BHAVANI JEWELLERS :- 13 -: 14.1 ASSESSEE EXPLAINED THE SAME AS UNDER: '4. WE HAD SUBMITTED AND DETAILS OF SUNDRY CREDITOR S AND OTHERS ALONG WITH ADDRESSES FOR RS. 87,06,851/-. THE SUNDRY CREDITORS AND OTHER CONSISTING OF THE SCHEME CREDITORS, CREDITORS FOR SUPPLIERS, LOAN CREDITORS , CHIT RENTS AND SALES ADVANCES. AS PER YOUR LETTER WE CAME TO KNOW THAT, SOME OF THE CREDITORS HAVE REPLIED TO THE LETTER RECEIVED FROM THE DEPAR TMENTS. IT IS IN CORRECT TO MENTION THAT WE HAVE PREPARED THE LETTER AND SEND THROUGH THE SAME OVER. AS PER THE DETAILS SUBMITTED IT CAN BE VERIFIABLE THAT THERE ARE DIFFERENT CREDITORS, AND ALSO WE HAD DEDUCTED THE TDS ON LOAN CREDITORS FOR THE YEAR 2007-08. HENCE, THE SAME CANNOT BE TREATED AS FICTITIOUS C REDITS FOR THE FIRM'. 14.2 AO WITHOUT ACCEPTING ASSESSEE'S CONTENTIONS M ADE THE ADDITION BY STATING AS UNDER: '5. IN RESPECT OF LOAN CREDITORS FOR AN AMOUNT OF R S. 87,06,851/- AS THE ASSESSEE HAS NOT PRODUCED THEM AND NO FULL ADDRESSES PROVIDED TO THE ASSESSING OFFICER AND IN SOME OF THE CASE IN WHICH ADDRESSES GIVEN BY THE ASSESSEE FIRM THE ASSESSING OFFICER HAS SENT LETTERS REQUESTING THEM TO FURNISH THE IN FORMATION. IN REPLY THEY HAVE SENT SOME CONFIRMATIONS BUT VERIFICATION OF THE SAME REVEALED THAT ALL THE LETTERS ARE PREPARED AND PRI NTED BY ONE PERSON AND AT ONE PLACE AND IN SAME COLOUR OF COVERS AND ADDRESSES FLAGS ARE ALSO SAME. UNDER THESE CIRCUMSTANCES THE AMOU NT OF LOAN CREDITORS ARE NOTHING BUT THE MONEY OF THE ASSESSE E FIRM AND THE ASSESSEE HAS NOT DISCHARGED THE RESPONSIBILITY OF THE PROVING THE ONUS LIES ON THE ASSESSEE AND NO FULL PARTICULARS WERE FURNISHED AND WHATEVER PARTICULARS FURNISHED THE SAME ARE PL ACED ON RECORD. HENCE THE ENTIRE AMOUNT IS TREATED AS UNEXPLAINED CREDITS U/S. 68 AND ADDED TO THE INCOME OF THE ASSESSEE'. I.T.A. NOS. 1136/HYD/12 & 1003/HYD/13 M/S. BHAVANI JEWELLERS :- 14 -: 14.3 LD.CIT(A) AFTER CONSIDERING ASSESSEE'S SUBMIS SIONS DELETED THE SAME STATING AS UNDER: '8.4 I HAVE CAREFULLY GONE THROUGH THIS ISSUE. FRO M THE ABOVE, RS. 87,06,851/- INCLUDES SUNDRY CREDITORS FOR SCHE ME MEMBERS, LOANS, SUPPLIERS, CHITS, RENTS AND SALES ADVANCES. THE DETAILS FURNISHED FOR OTHER THAN SUNDRY CREDITORS WERE VER IFIED AND FOUND GENUINE. WITH REGARD TO SUNDRY CREDITORS RS. 69,2 6,541/-, THE APPELLANT SUBMITTED THAT THEIR FULL ADDRESS AND LE DGER COPIES, LIST OF THE PARTIES ALONG WITH FULL ADDRESS OF ACCOUNT COP IES WHICH WERE ALSO FILED BEFORE THE AO. FROM THIS LEDGER A/C, I T WAS FOUND THAT THESE WERE THE OPENING BALANCE AND INTEREST WERE D EBITED AND TDS ALSO DEDUCTED AND SHOWN IN THE REGULAR ACCOUNTS. THEREFORE, THEY ARE RUNNING ACCOUNT OF THE DAY TO DAY BUSINESS OF THE APPELLANT AND THE AO HAS SIMPLY MADE ADDITION U/S. 68 OF THE ACT BY STATING THAT EVEN THOUGH CONFIRMATION LETTERS RECEIVED BUT ON V ERIFICATION THE LETTERS WERE PREPARED AND PRINTED BY ONE PERSON AT ONE PLACE IS NOT JUSTIFIED. THE AO SHOULD HAVE VERIFIED THE JOURNA L ENTRIES OF LEDGER ACCOUNT GIVEN BY THE PARTIES AND EVIDENCE TO BE GA THERED TO PROVE THESE CREDITORS WERE BOGUS. THEREFORE, THERE IS N O STRENGTH TO MAKE THESE CREDITS AS ADDITION BY THE AO. THEREFORE, A FTER CONSIDERING THE APPELLANT SUBMISSIONS, I AM OF THE VIEW THAT THESE ARE SUNDRY CREDITORS AND RUNNING ACCOUNT OF THE DAY TO DAY BU SINESS PURPOSE OF THE APPELLANT. HENCE, ADDITION MADE ON THIS ACCOU NT IS DELETED'. 14.4 AFTER CONSIDERING THE RIVAL CONTENTIONS AND P ERUSING THE PAPER BOOK AND ALSO THE BALANCE SHEETS OF EARLIER Y EAR FILED AT OUR INSTANCE BY LD. COUNSEL, WE DO NOT SEE ANY REASON T O CONSIDER THE REVENUE'S CONTENTIONS. FIRST OF ALL, AO HAS VERIFI ED THE CREDITORS AND GOT THE CONFIRMATION LETTERS ON HIS ENQUIRY. THE SAME CANNOT BE REJECTED SIMPLY ON THE REASON THAT THOSE PARTIES HAVE REPLIE D ON THE SAME COLOUR OF COVERS AND ADDRESS FLAGS. THIS CANNOT BE A REAS ON FOR REJECTING THE REPLIES RECEIVED FROM THE PARTIES. MOREOVER, THESE ARE ALL OUTSTANDING BALANCES AND WITHOUT REJECTING THE PURCHASES OR EXP ENDITURE, THE OUTSTANDING BALANCES CANNOT BECOME UNACCOUNTED, JUS T BECAUSE, AO DID NOT ACCEPT THE CONFIRMATIONS RECEIVED. IT WAS ALSO EXPLAINED THAT THESE WERE AMOUNTS CARRIED OUT FROM EARLIER YEAR AND THAT THE INTEREST I.T.A. NOS. 1136/HYD/12 & 1003/HYD/13 M/S. BHAVANI JEWELLERS :- 15 -: PAYMENTS AND TDS ON THAT WAS ALSO MADE. THESE CONT ENTIONS WERE NEVER CONSIDERED/REJECTED BY THE AO. WE ARE OF THE OPINION THAT LD.CIT(A) HAS RIGHTLY DELETED THE SAME, AS THE VERY BASIS OF THE ADDITION IS NOT JUSTIFIABLE. ACCORDINGLY, ORDER OF CIT(A) I S UPHELD. GROUND IS REJECTED. 15. BEFORE PARTING WITH THE APPEALS, WE OBSERVE TH AT AO UNNECESSARILY MADE VARIOUS ADDITIONS AND RAISED DEM ANDS. INSTEAD OF SUMMARIZING THE ACTION OF AO, WE HAVE EXTRACTED THE SHOW CAUSE ISSUED AND REPLIES RECEIVED ABOVE ONLY TO HIGH LIGHT THE W AY AO PASSED ORDER. AS CAN BE SEEN FROM THE SHOW CAUSE NOTICE ISSUED AND A LSO THE FINAL ORDER OF THE AO, ONE CAN EASILY COME TO THE CONCLUSION TH AT AO IS NEITHER COMPREHENDING THE ISSUES NOR MAKING ANY JUSTIFICATI ON FOR THE ADDITIONS MADE. THESE ARE NOT ONLY ARBITRARY, BUT ALSO MINDL ESS. WHEN LD.CIT(A) DELETED THE ADDITIONS, REVENUE SHOULD HAVE ACCEPTED THESE BUT THESE WERE CONTESTED WITHOUT ANY BASIS. THERE IS NO APPL ICATION OF MIND EITHER BY THE AO OR BY THE LD.CIT WHO APPROVES THE SECOND APPEAL. THIS FORUM TIME AND AGAIN IS ADVISING THE REVENUE NOT TO BURDE N WITH UNNECESSARY APPEALS, MOSTLY ON FACTS. DESPITE THAT, WE COME AC ROSS THIS SORT OF MIND LESS ADDITIONS AND MINDLESS APPEALS. WE NEED NOT R EITERATE THE IMPORTANCE OF PREFERRING ONLY THE DESERVING APPEALS . THE CBDT VIDE LETTER DT. 3 RD JULY 2015, NOTED THAT DESPITE SEVERAL INSTRUCTIONS ON THE SUBJECT, NECESSARY DUE DILIGENCE AND CAUTION IS NOT BEING EXERCISED WHILE GRANTING AUTHORIZATION FOR FILING OF APPEALS. THE MEMBER, CBDT FURTHER NOTES THAT BESIDES FINANCIAL COSTS, LITIGATION ALSO ENTAILS TARNISHING THE IMAGE OF THE DEPARTMENT AND STRAINING ITS RESOURCES . ON THE FACTS OF THIS CASE, WE ARE CONSTRAINED TO LEVY A TOKEN COST OF RS . 1,000/- ON THE AO WHO PASSED THE ASSESSMENT ORDER AND FURTHER COST OF RS. 500/- ON THE AO WHO PREFERRED SECOND APPEAL. THESE SHOULD BE COL LECTED FROM THEIR SALARY AND DEPOSITED IN TO TREASURY AS PER THE RULE S. AN ENTRY IN THEIR I.T.A. NOS. 1136/HYD/12 & 1003/HYD/13 M/S. BHAVANI JEWELLERS :- 16 -: PERSONAL RECORD SHOULD ALSO BE MADE BY THE SUPERIOR AUTHORITY SO THAT AO WOULD NOT REPEAT THE SAME IN FUTURE. WE ARE NOT LEVYING ANY COST ON THE CIT, EVEN THOUGH, THERE IS NO APPLICATION OF M IND AT HIS LEVEL WHILE APPROVING THE SECOND APPEAL. WE MAKE IT CLEAR THAT WE WILL NOT HESITATE TO LEVY COST ON THE CIT (ADMIN) WHO APPROVES THIS S ORT OF SECOND APPEAL WITHOUT APPLYING THEIR MIND. 16. IN THE RESULT, ASSESSEE'S APPEAL IS ALLOWED AN D REVENUE'S APPEAL IS DISMISSED WITH COST ON AO. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JULY, 2015. SD/- SD/- (SAKTIJIT DEY) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUN TANT MEMBER HYDERABAD, DATED 15 TH JULY, 2015 TNMM COPY TO : 1. INCOME TAX OFFICER, WARD-8(2), 8 TH FLOOR, D-BLOCK, I.T. TOWERS, HYDERABAD. 2. M/S. BHAVANI JEWELLERS, 21-2- 149, CHARKAMAN, HYDERABAD. C/O. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-65 5/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 3. CIT(APPEALS)-III, HYDERABAD. 4. CIT-II, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.