M/s Yaganti Chandra Sekhara Rao, Hyderabad V. ITO,Ward 3(2), Hyderabad

ITA 1027/HYD/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6042 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 04-01-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 23-05-2014
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: V RAGHAVENDRA RAO
• Keywords: Business income; Peak credit; Additional evidence; Corroborative evidences; Revised return
• Section: 131; 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH ES B , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1 02 7 /H YD /201 4 ASSESSMENT YEAR: 20 0 9 - 1 0 YAGANTI CHANDRA SEKHARA RAO, HY DERABAD [P AN: AA YPY0890N ] VS INCOME TAX OFFICER , WARD - 3(2 ), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI V. RAGHAVENDRA RAO , AR FOR REVENUE : SHRI B. KURMI NAIDU , DR DATE OF HEARING : 04 - 0 1 - 201 6 DATE OF PRONOUNCEMENT : 29 - 0 2 - 201 6 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN ASSESSEES APPEAL AGAINST THE ORDER OF THE COM MISSIONER OF INCOME TAX ( APPEALS ) - I V , HYDERABAD , DATED 14 - 0 3 - 201 4 . 2. THE BRIEF FACTS OF THE CASE ARE THAT, ASSESSEE IS A D IRECTOR IN M/S. Y AGA NTI AGRO TECH PVT. LTD., (YAPL), A COMPANY DE AL ING IN SEEDS. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, ASSESSEE FILED H IS RETURN OF INCOME ON 2 2 - 0 9 - 20 09 DECLARING A TOTAL INCOME OF RS. 2, 14, 4 9 0/ - UNDER THE HEAD SALARIES . ASSESSING OFFICER (AO) NO TICED THAT ASSESSEE HAS DEPOSITED CHEQUES/CASH IN THE BANK ACCOUNTS AS UNDER: I.T.A. NO. 1027 / HYD / 201 4 YAGANTI CHANDRA SEKHARA RAO : - 2 - : AXIS BANK - 28,78,000/ - ICICI BANK - 24,01,350/ - STATE BANK OF INDIA - 64,27,450/ - --------------- - 1,17,06,800/ - ---------------- AO ASKED ASSESSEE TO EXPLAIN THE SOURCES OF DEPOSITS. ASSESSEE HAS NOT COMPLIED WITH VARIOUS NOTICES. THEREFORE, AO AFTER DISCUSSING VARIOUS CASE LAW, HAS BROUGHT THE ABOVE AMOUNT AS UNEXPLAINED U/S. 68 OF THE INCOME TAX ACT [ACT] IN THE EX - PARTE ORDER PASSED U/S. 144 OF THE ACT. 3. ON APPEAL BEFORE THE LD. CIT(A), ASSESSEE HAS RAISED MANY GROUNDS AND ADDITIONAL GROUNDS ON VARIOUS ISSUES. IN THE COURSE OF APPELLATE PROCEEDINGS, ASSESSEE FILED CERTAIN ADDITIONAL EVIDENCE AND SUBMITTED THAT HIS AR WAS PREOCCUPIED WITH HIS FATHERS B ROTHER WHO WAS ON HIS DEATH BED. THE ADDITIONAL EVIDENCE WAS FORWARDED TO THE AO FOR EXAMINATION AND REPORT. THE AO SUBMITTED HIS REPORT VIDE LETTER DT. 11 - 12 - 2013 WHICH WAS FORWARDED TO ASSESSEE FOR HIS COMMENTS. 4. BEFORE THE LD. CIT(A), ASSESSEE EXP LAINED THE SOURCES AS UNDER: RS. I. CASH SALES OF ASSESSEE 24,46,950 II. SALE RECEIPTS OF ASSESSEE THROUGH CHEQUES 2,85,000 III. SALE RECEIPTS OF ASSESSEE THROUGH TRANSFER OF FUNDS 6,20,000 IV. CASH COLLECTED FROM DEBTORS 38,50,950 V. ASSESSEES OWN CASH 3,500 VI. RECEIP T FROM COMPANY THROUGH CHEQUES/TRANSFER 37,75,400 VII. REMUNERATION 3,00,000 VIII. ZEN SECURITIES 4,45,000 IX. RECEIPT FROM BABY SHALINI THROUGH CHEQUE 30,000 TOTAL: 1,17,56,800 I.T.A. NO. 1027 / HYD / 201 4 YAGANTI CHANDRA SEKHARA RAO : - 3 - : THESE SUBMISSIONS WERE REMANDED TO AO TO ENQUIRE. AFTER THE REMAND REPORT AND SUBMISSIONS FROM THE ASSESSEE, LD. CIT(A) HAS GIVEN P ARTIAL RELIEF ACCEPTING ONLY THREE SOURCES OF CREDITS OF RS. 37,75,400/ - STATED TO HAVE BEEN RECEIVED FROM THE COMPANY AND REMUNERATION OF RS. 3,00,000/ - AND RECEIPTS FROM M/S. ZEN SECURITI ES AND OWN CASH (ITEMS V, VI, VII AND VIII ABOVE). BALANCE OF THE AMOUNTS WERE CONFIRMED FOR THE FOLLOWING REASONS: I. SALES TURNOVER OF OWN BUSINESS : ( ITEM S I, II & III) 6.3 THE AR HAD SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE DEPOSITS OF RS. 24 ,46,950, RS.2,85,000 AND RS.6,20,000 REPRESENTED THE SALES OF YAPL. HOWEVER, IN RESPONSE TO THE REMAND REPORT OF THE ASSESSING OFFICER, THE AR SUBMITTED BEFORE ME THAT THE SUMS OF RS. 24,46,950, RS.2,85,000 AND RS.6,20,000 REPRESENTED THE SALES OF THE APP ELLANT'S OWN BUSINESS AND RELIED IN THIS REGARD ON THE P&L A/C OF THE APPELLANT FILED AS ADDITIONAL EVIDENCE. 6.4 THERE IS A GROSS CONTRADICTION IN THE SUBMISSION MADE BEFORE THE ASSESSING OFFICER AND THAT MADE BEFORE ME. WHILE THE APPELLANT HAD CLAIMED BEFORE THE ASSESSING OFFICER THAT THE DEPOSITS REPRESENTED SALE RECEIPTS OF YAPL, THE APPELLANT HAS NOW CLAIMED THAT THESE DEPOSITS REPRESENTED HIS OWN SALE RECEIPTS. BE THAT AS IT MAY, THE MERITS OF THE APPELLANT'S CLAIM ARE EXAMINED BELOW. 6.5 THE ONLY SOURCE OF INCOME AS PER THE RETURN FILED BY THE APPELLANT ON 22.9.2009 WAS SALARY FROM YAPL. THERE WAS NO INCOME FROM BUSINESS AS PER THE RETURN. NEEDLESS TO ADD, THE P&L A / C, FILED AS ADDITIONAL EVIDENCE, HAD NOT BEEN FILED ALONG WITH THE RETURN. THIS P& L ALC SHOWS A TURNOVER OF RS.36,56,950 AND A NET PROFIT OF RS.5,54,666. THE APPELLANT HAS NOT EXPLAINED W HY THE INCOME FROM BUSINESS, WITH A SUBSTANTIAL TURNOVER OF RS.36.56 LAKHS, HAD NOT BEEN DISCLOSED IN THE RETURN OF INCOME. THE ONLY CONCLUSION THAT CA N BE DRAWN THEN IS THAT THE CLAIM OF THE APPELLANT HAV I NQ HIS OWN BUSINESS IS A POST - FACTO CREATION TO EXPLAIN AWAY THE DEPOSITS IN HIS BANK ACCOUNT. 6.6 THE AD DI T I ONA L EVIDENCE FILED IN SUPPORT OF THIS CLAIM IS REFUSED ADMISSION SINCE THE APPELLANT HAS FAILED TO ESTABLISH THEIR GENUINENESS AND HAS ALSO FAILED TO EXPLAIN WHY THEY HAD NOT BEEN BROUGHT ON RECORD EARLIER THROUGH HIS RETURN OF INCOME. 6.7 UNDER THE CIRCUMSTANCES, THE ASSESSMENT OF DEPOSITS OF RS. 24,46,950, RS. 2,85,000 AND RS. 6,20,000 AS U NEXPLAINED CREDITS U/S. 68 IS UPHELD. I.T.A. NO. 1027 / HYD / 201 4 YAGANTI CHANDRA SEKHARA RAO : - 4 - : II. CASH COLLECTED FROM DEBTORS OF COMPANY AND DEPOSITED IN HIS ACCOUNT : (ITEM IV) 7.1 THE APPELLANT HAD CLAIMED TO HAVE RECEIVED RS.38,50,950 AS CASH COLLECTION FROM DEBTORS OF YAPL. THE APPELLANT HAS NOT BEEN ABLE TO EXPLAIN WHY CASH PERTAINING TO YAPL WAS DEPOSITED INTO THE APPELLANT'S PERSONAL BANK ACCOUNT WHEN YAPL HAD ITS OWN BARK ACCOUNTS. IN PARTICULAR, BOTH YAPL AND THE APPELLANT HAD BANK ACCOUNTS IN S BI AND THERE WAS NO REASON FOR DEPOSIT OF YAPL'S FUNDS IN THE APPELLANT'S BANK ACCOUNT IN S BI. THERE IS NO LOGICAL REASON WHY THE PERSONAL BANK ACCOUNT DETAILS OF THE APPELLANT WAS PROVIDED TO THE DEBTORS FOR DEPOSITING THE CASH RELATED TO YAPL IT IS ALSO RELEVANT THAT OF THE TOTAL SALES OF RS.2,04,55,970 OF YAPL , SALES OF RS.1,24,40,756 HAD BEEN MADE TO APSSDC AND THAT THE ENTIRE SALE RECEIPTS FROM APSSDC WAS CREDITED DIRECTLY INTO THE BANK ACCOUNT OF YAPL AND IT WAS ONLY THE BALANCE SALES, CONSISTING OF SALES BELOW RS.20,000 EACH THAT WERE CLAIMED TO BE ROUTED T HROUGH THE BANK ACCOUNT OF THE APPELLANT. 7.2 OF THE TOTAL SUCH RECEIPTS OF RS. 38,50,950, THE AR HAD FAILED TO FURNISH THE ADDRESSES OF THE FOLLOWING FOUR DEBTORS: I. BALAJI TRADERS - RS. 3,25,000/ - II. JINDAL STEEL CO., - RS. 1,50,000/ - III. KPR AGRO AGENCIES - RS. 3,10,000/ - IV. MURALA SIDDU AGRO CENTRE - RS. 2,23,000/ - ------ --- ------------ TOTAL RS. RS. 10,08,000/ - --------------------- SINCE THE APPELLANT HAD FAILED TO FURNISH EVEN THE ADDRESSES OF THE ABOVE PARTIES, THE A SSESSING O FFICER REJECTED APPELL ANT S EXPLANATION TO THE EXTENT OF RS. 10,08,000. 7.3 THE AR SUBMITTED THAT IN DISBELIEVING THE TRANSACTION, THE ASSESSING OFFICER HAD ADOPTED A PEDANTIC APPROACH, THAT THE BOOKS OF YAPL WERE STATUTORILY AUDITED, THAT A NUMBER OF TRANSACTIONS HAD BEEN UNDERTAKEN WITH THESE PARTIES WHICH COULD NOT BE SIMPLY BRUSHED ASIDE MERELY BECAUSE THE ADDRESSES HAD NOT BEEN FURNISHED. 7.4 THE SALES MADE TO THESE PARTIES WERE THOSE OF YAPL AND NOT OF THE APPELLANT. THE ISSUE IN APPEAL IS NOT WHETHER YAPL HAD MADE T HE SALES TO THESE PARTIES. THE ISSUE IS WHETHER THE DEPOSITS IN THE APPELLANT'S BANK ACCOUNTS WERE MADE OUT OF THE SALE PRICE PAID BY THEM. IN THE ABSENCE OF THE ADDRESSES OF THESE PARTIES, THE ASSESSING OFFICER WAS NOT IN A POSITION TO MAKE ANY ENQUIRY IN THIS REGARD. FURTHER, THERE IS NO EVIDENCE THAT THE CASH CREDITED TO THE ACCOUNT OF THESE PARTIES IN THE I.T.A. NO. 1027 / HYD / 201 4 YAGANTI CHANDRA SEKHARA RAO : - 5 - : BOOKS OF YAPL HAD INDEED BEEN RECEIVED THROUGH THE APPELLANT SINCE THE APPELLANT DID NOT TRANSFER THE AMOUNTS IN QUESTION TO YAPL THROUGH A BANK TRANS FER. SINCE CASH DOES NOT CREATE AN AUTOMATIC TRAIL, THERE IS NO EVIDENCE TO SHOW THAT THE DEPOSITS IN THE APPELLANT'S BANK ACCOUNT WERE INDEED AGAINST THE SALE MADE BY YAPL. THE ADDITION OF RS. 10,08,000 IS, THEREFORE, UPHELD. 8 . 1 THE AO ALSO ISSUED SUMM ONS U/S. 131 TO THE FOLLOWING DEBTORS OF YAPL (INCLUDED IN THE SUM OF RS. 38,50,950): I. ANNALAKSHMI SEEDS, COIMBATORE - RS. 1,88,000 II. PRASHANTH BEEZ BANDAR, KATHIHAR, BIHAR - RS. 4,14,500 III. SOGALAND & SONS, DHARWAD, KARNATAKA - RS. 2,05,500 THERE WAS NO RE SPONSE FROM THE ABOVE SAID PARTIES AND THE ASSESSING OFFICER FOUND IT IRRATIONAL THAT THE DEBTORS LOCATED OUTSIDE THE STATE HAD SENT CASH ALL THE WAY TO HAVE IT DEPOSITED IN THE APPELLANT S BANK ACCOUNT IGNORING YAPL, THE COMPANY FROM WHICH THEY HAD MADE P URCHASES. 8.2 THE AR SUBMITTED THAT THE FAILURE OF THESE PARTIES TO RESPOND FOR VARIOUS REASONS, SAY, THEY HAD STOPPED THEIR BUSINESS OR WERE NOT INTERESTED IN RESPONDING SINCE THEY HAD NO FURTHER DEALINGS WITH THE APPELLANT AND THE APPELLANT COULD NOT BE PENALISED FOR THEIR FAILURE. 8.3 HAVING MADE A CLAIM THAT THE DEPOSITS WERE FROM THE PARTIES LISTED ABOVE, THE ONUS LAY ON THE APPELLANT TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTION. WHILE THE A PPELLANT HAS SUBMITTED AN EXPLANATION, NO EVIDENCE HAS BEEN FILED IN SUPPORT OF THIS CLAIM. WITHOUT ANY VERIFICATION FROM THESE THIRD PARTIES, I AGREE WITH THE ASSESSING OFFICER THAT IT IS IRRATIONAL THAT THESE OUTSTATION PARTIES CHOSE TO SEND CASH ALL THE WAY TO VARIOUS PLACES IN ANDHRA PRADESH AND THAT THEY CHOSE TO DO SO IN THE APPELLANT'S BANK ACCOUNT AND NOT IN THE BANK ACCOUNT OF YAPL FROM WHICH THE PURCHASES HAD ALLEGEDLY BEEN MADE. THE ADDITION OF RS. 8,08,000 IS, THEREFORE, UPHELD. 9.1 THE ASSES SING OFFICER ALSO MADE ENQUIRIES WITH REGARD TO THE LOCAL DEBTORS INCLUDED IN THE SUM OF RS.38,50,950. THE NOTICE ISSUED TO M / S. ANNAPURNA SEED FARM, SECUNDERABAD COULD NOT BE SERVED AS THE PARTY HAD VACATED THE PREMISES AND ITS PRESENT ADDRESS WAS NOT KNO WN. THE LEDGER ACCOUNT COPIES OF YAPL WAS .OBTAINED FROM K.V. CHANDRA & CO AND BHARATI AGRO BIO - TECHNOLOGY PVT. LTD WHICH SHOWED THAT ALL THE PURCHASE INVOICES WERE LESS THAN RS.20, 000 EACH AN D THE PAYMENT HAD BEEN SHOWN TO HAVE BEEN MADE TO YAPL IN CASH . SINCE NO NEXUS HAD BEEN ESTABLISHED BETWEEN THE PAYMENT MADE BY THESE PARTIES TO THE YAPL AND THE CASH DEPOSITS IN THE APPELLANT'S BANK ACCOUNT, THE I.T.A. NO. 1027 / HYD / 201 4 YAGANTI CHANDRA SEKHARA RAO : - 6 - : ASSESSING OFFICER REFUSED TO ACCEPT THE EXPLANATION FOR THE FOL LOW I N G DEPOSITS (INCLUDED IN THE SUM OF R S .38,50,950): I. ANNAPURNA SEED FARM, SECUNDERABAD - RS. 11,25,000 II. K.V. CHANDRA & CO., SECUNDERABAD - RS. 4,09,950 III. BHARATHI AGRO BIO - TECHNOLOGY PVT LTD., HYD - RS. 1,50,000 --------------------- RS. 16,84,950 --------------------- 9.2 THE AR HAS SUBMITTED THAT MERELY BECAUSE THE PURCHASES AND PAYMENTS WERE LESS THAN RS.20,000 EACH AND BECAUSE THE NAMES OF THE PERSON TO WHOM THE PAYMENT WAS MADE HAD NOT BEEN ENTERED IN THE BOOKS, THE TRANSACTIONS COULD NOT BE DISBELIEVED. THE AR SUBMITTED THAT THERE WERE NUMEROUS TRANSACTIONS WITH THESE PARTIES WHICH ESTABLISHED THE GENUINENESS OF THE TRANSACTION. 9.3 THE EVIDENCE FILED BY THE AR DOES ESTABLISH THAT YAPL HAD MADE SALES TO THESE PARTIES. THE EVIDENCE ALSO ESTABLISHES THAT YAPL HAD RECEIVED THE PAYMENT AGAINST THESE SALES IN CASH. HOWEVER, THE EVIDENCE DOES NOT ESTABLISH THAT THE PAYMENT HAD BEEN MADE BY T H ESE PARTIES TO THE APPELLANT AND THAT THE DEPOSITS IN THE APPELLANT'S BANK ACCOUNTS AND THE COLLECTIONS CREDITED TO THE BOOKS OF YAPL FROM TH ESE DEBTORS WAS ONE AND THE SAME. THE ADDITION OF RS.16,84,9 5 0 IS, THEREFORE, UPHELD. 10.0 THE APPELLANT HAD FAILED TO FURNISH THE NAMES AND ADDRESSES OF THE DEBTORS FOR A SUM OF RS.3,50,000. THE ASSESSING OFFICER THEREFORE SUBMITTED THAT THIS ADDITION B E UPHELD. I AGREE WITH THE ASSESSING OFFICER IN THIS REGARD. III. RECEIPT FROM BA BY SHALINI : 14.0 A SUM OF RS. 30,000 WAS STATED TO HAVE BEEN RECEIVED FROM BABY SHALINI. THE APPELLANT HAD FAILED TO FURNISH THE ADDRESS AND CONFIRMATION FROM BABY SHALINI A ND THEREFORE THE ASSESSING OFFICER SUBMITTED THAT THE ADDITION BE SUSTAINED. UNDER THE CIRCUMSTANCES, I FIND THAT THE APPELLANT HAS FAILED TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THIS CREDITOR AND THE GENUINENESS OF THE TRANSACTION AND THE ADDIT ION OF RS. 30,000 IS UPHELD. ASSESSEE IS AGGRIEVED ON THE ABOVE THREE ITEMS BEING CONFIRMED BY LD. CIT(A). I.T.A. NO. 1027 / HYD / 201 4 YAGANTI CHANDRA SEKHARA RAO : - 7 - : 5. ASSESSEE HAS RAISED VARIOUS GROUNDS IN THE APPEAL. IN ADDITION, HE ALSO RAISED ADDITIONAL GROUNDS AS UNDER: 1. LEARNED CIT(A) IS NOT JUSTIF IED IN OMITTING TO CONSIDER THE WITHDRAWALS SIDE OF THE BANK ACCOUNTS. 2. LEARNED CIT(A) IS NOT JUSTIFIED IN OMITTING TO CONSIDER THE CASH FLOW STATEMENT ACCORDING TO WHICH THE NET INCREASE IN CASH DEPOSITS IS ONLY RS. 6,01,540/ - . 3. ALTERNATIVELY TO THE ABOVE GROUND, LEARNED CIT(A) IS NOT JUSTIFIED IN OMITTING TO CONSIDER THE TOTAL NET INCREASE IN CASH AND CHEQUES TOGETHER WHICH IS ONLY RS. 9,55,144/ - . 4. LEARNED CIT(A), HAVING REJECTED THE EXPLANATION THAT DEPOSITS ARE SALE PROCEEDS OF SEEDS AND HAVING HELD THEM TO BE UNEXPLAINED DEPOSITS, OUGHT TO HAVE ACCEPTED THE CASH FLOW STATEMENT ACCORDING TO WHICH THE PEAK CREDIT IS RS. 7,05,140/ - ON 26.03.2009. 5. LEARNED CIT(A) IS NOT JUSTIFIED IS NOT CONSIDERING THE EXPENDITURE INCURRED ON PURCHASE OF SEEDS O F RS. 33,80,450/ - COMPRISING CHEQUE PAYMENTS OF RS. 24,31,450/ - & CASH PAYMENTS OF RS. 9,49,000/ - AGAINST DEPOSITS BEING RECEIPTS OF WAY OF CASH & CHEQUES/INTERNET TRANSFER. 6. HAVING HELD THE DEPOSITS OF RS. 71,82,900/ - TO BE ASSESSEES OWN, LEARNED CIT( A) OUGHT TO HAVE ALLOWED THE EXPENDITURE/WITHDRAWALS THERE AGAINST. 7. WHILE SUSTAINING ADDITION U/S. 68 OF RS. 71,82,900/ - LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THE AFFIDAVIT SWORN TO BY THE ASSESSEE IN PROOF OF HIS POOR FINANCIAL STATUS. 6. IN THE C OURSE OF PRESENT PROCEEDINGS, ASSESSEE FILED ADDITIONAL EVIDENCE WITH A PRAYER TO ADMIT THE SAME AS LD. CIT(A) HAS NOT CONSIDERED THE REVISED RETURN FILED AFTER TH E ASSESSMENT AND PAYMENT OF TAX AND AN AFFIDAVIT. 7. LD. COUNSEL REITERATED SUBMISSIONS MADE IN DETAILED GROUNDS AND ADDITIONAL GROUNDS AND SUBMITTED THAT ONLY PEAK CREDIT COULD HAVE BEEN ASSESSED. HE FILED DETAILED WRITTEN SUBMISSIONS. LD. DR HOWEVER, SHOWED THE CONTRADICTION IN ASSESSEES STAND AND SUBMITTED THAT ASSESSEE HAS NOT SUBSTANTIATE D THE TRANSACTIONS. I.T.A. NO. 1027 / HYD / 201 4 YAGANTI CHANDRA SEKHARA RAO : - 8 - : 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE DOCUMENTS PLACED ON RECORD. THAT FACT IS THAT ASSESSEE HAS NEITHER DISCLOSED HIS SO CALLED BUSINESS TRANSACTIONS IN THE RETURN FILED NOR EXPLAINED THE SOURCES OF VARIOUS CASH DEPOSITS DURI NG THE ASSESSMENT PROCEEDINGS. CONSEQUENTLY, ASSESSMENT WAS COMPLETED EX - PARTE WITH THE ADDITION OF ENTIRE CREDITS IN BANK A/CS. EVEN THOUGH MATTERS WERE REMANDED, THE SUBMISSIONS COULD NOT BE SUBSTANTIATED IN THE REMAND PROCEEDINGS. IT WAS THE SUBMISSION ON LEGAL GROUNDS THAT: A. THE AO EXCEED ED THE BRIEF OF CBDT IN COMPLETING THE SCRUTINY ; B. AO IGNORED THE DEB ITS IN BANK A/CS EVIDENCING PURCHASE OF SEEDS/PAYMENTS TO SEED COMPANIES; C. AO SHOULD HAVE CONSIDERED THE PEAK CREDIT AND ATLEAST D. LD. CIT(A) COULD HAVE CONSIDERED AFFIDAVIT, THE REVISED RETURN FILED AND PAYMENT OF TAX PAID. 8.1 . EVEN THOUGH, BOARD CIRCULAR NO. 225/26/2006 - ITA/II/PT DT. 08 - 09 - 2010 DIRECTS AOS TO LIMIT THE SCRUTINY TO THE EXTENT OF INFORMATION RECEIVED THROUGH AIR, IN TH IS CASE THE INFORMATION RECEIVED THROUGH AIR IS THE CASH DEPOSITS IN BANK ACCOUNTS. AO IS W ELL WITHIN HIS POWERS TO EXAMINE DEPOSITS IN BANK ACCOUNT IN ITS ENTIRETY AS THEY ARE INTER - RELATED . NO O THER ISSUE WAS TAKEN UP BY AO, SO THERE IS NO VIOLATION OF BOARD CIRCULAR AS CONTENDED. 8.2 . HOWEVER, THERE IS SOME MERIT IN ASSESSEES OTHER CONTENTIONS. AO HAS CONSIDERED ONLY THE CREDITS. IT WAS THE CONTENTION THAT THE DEBITS BY WAY OF CHEQUES AND CASH WERE NOT CONSIDERED. IT WAS ALSO CONTENTION THAT, EVEN I F BUSINESS TRANSACTIONS WERE IGNORED, THEN ONLY ACCRETION TO CASH (NE T OF WITHDRAWALS ) COULD HAVE BEEN BROUGHT TO TAX. EVEN PEAK CREDIT WAS ONLY RS. 7,05,140/ - WHICH SHOULD HAVE BEEN CONSIDERED. ASSESSEE OFFERED AN INCOME OF RS. 2,76,500/ - UNDE R THE BUSINESS H E AD AND PAID TAXES IN THE REVISED RETURN FILED AFTER THE ASSESSMENT. EVEN THOUGH, THE RETURN FILED AFTER ASSESSMENT COULD NOT BE ACCEPTED AS REVISED RETURN, THE FACT THAT ASSESSEE S ADMITTED INCOME COULD HAVE BEEN CONSIDERED I.T.A. NO. 1027 / HYD / 201 4 YAGANTI CHANDRA SEKHARA RAO : - 9 - : BY LD. CIT(A). ALL THESE CONTENTIONS INCLUDING ADDITIONAL EVIDENCE FILED WITH ADDITIONAL GROUNDS REQUIRE RE - CONSIDERATION BY AO. FOR THIS PURPOSE, WE SET ASIDE THE ORDER OF AO AND CIT(A) TO EXAMINE THE CONTENTIONS AFRES H. ASSESSEE SHOULD BE GIVEN DUE OPPORTUNITY TO S UPPORT THE CONTENTIONS. IT IS THE RESPONSIBILITY OF ASSESSEE TO FURNISH NECESSARY SUPPORTING EVIDENCE TO THE AO. AO IS FREE TO TAKE NECESSARY STEPS BASED ON LAW AND FACTS AND ALL ISSU ES ARE OPEN TO CONSIDER. WE MAKE IT CLEAR THAT ONLY THE SE AMOUNT S WHIC H ARE DISPUTED ARE TO BE EXAMINED AND THE RELIEF GRANTED BY LD. CIT(A) HAS BECOME FINAL , AS REVENUE IS NOT IN APPEAL. 8.3 . WITH THESE DIREC TIONS/OBSERVATIONS, THE GROUNDS AND ADDITIONAL GROUNDS ARE CONSIDERED PARTLY ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, APPEAL IS ALLOWED PARTLY FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH FEBRU ARY , 201 6 SD/ - SD/ - (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, D ATED 29 TH FEBRUARY, 2016 TNMM I.T.A. NO. 1027 / HYD / 201 4 YAGANTI CHANDRA SEKHARA RAO : - 10 - : COPY TO : 1. YAGANTI CHANDRA SEKHARA RAO , FLAT NO. 102, MEENAKSHI COURT S , MEDCHAL ROAD, JEEDIMETLA, HYDERABAD. 2 . INCOME TAX OFFICER , WARD - 3 ( 2 ), I.T. TOWERS, A.C. GUARDS , HYDERABAD . 3 . CIT (APPEALS) - I V , HYDERABAD. 4. CIT - I II , HYDERABAD. 5 . D.R. ITAT, HYDERABAD. 6 . GUARD FILE.