M/s. Laxmi Narayan Agarwal, Hyderabad V. The ACIT, Circle - 6(1), Hyderabad

ITA 1390/HYD/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91747 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 28-05-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 04-11-2010
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Unexplained expenditure; Business income; Search and seizure; Loose papers; Document seized; Documents seized
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER I.T.A. NO. 1390/HYD/2010 ASSESSMENT YEAR: 2005-06 SRI LAXMI NARAYAN AGARWAL, HYDERABAD PAN: ACDPA7791B VS ASST. COMMISSIONER OF INCOME TAX, CIRCLE-6(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P. MURALI MOHAN RA O , AR FOR REVENUE : SHRI D. SUDHAKAR RAO, CIT - DR DATE OF HEARING : 2 8 - 0 5 - 201 5 DATE OF PRONOUNCEMENT : 17 - 0 6 - 2015 O R D E R PER INTURI RAMA RAO, A.M. : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE CIT(APPEALS)-IV, HYDERABAD, DATED 30-09-2010 FOR TH E AY 2005-06. RAISING THE FOLLOWING GROUNDS OF APPEAL: 1) 'THE HONOURABLE CIT APPEALS - IV, HYDERABAD ERRED W HILE CONFIRMING THE ORDER PASSED BY ASSESSING OFFICER BY ESTIMATING THE INCOME OF THE ASSESSEE AT 6% OF THE GROSS RECEIPTS WITHOUT REJECTING BOOKS OF ACCOUNTS. WE WOULD LIKE TO SUBMIT THAT THE ASSESSING OFFICER HAS NOT REJECTED THE BOOKS OF THE ASSESSEE AND UNLESS THE BOOKS ARE REJECTED THE ADDITIONS ON THE BASIS OF ESTIMATION CANNOT BE MADE. 2) THE ASSESSEE MADE THE SALES DURING PREVIOUS YEAR AM OUNTING TO RS 2,43,30,245/- ON WHICH HE EARNED AN AMOUNT OF 7,44, 908/- TOWARDS NET PROFIT WHICH EQUALS TO 3.0% OF NET SALES. THE CIT A PPEALS - IV, HYDERABAD ERRED WHILE CONFIRMING THE ORDER PASSED BY ASSESSIN G OFFICER BY ESTIMATING ITA NO. 1390/HYD/2010 SRI LAXMI NARAYAN AGARWAL :- 2 -: THE INCOME OF THE ASSESSEE AT 6% OF GROSS RECEIPTS WITHOUT TAKING BOOKS OF ACCOUNTS INTO CONSIDERATION WHICH IS NOT CORRECT, N OT JUSTIFIED AND BAD IN LAW. 3) THE CIT APPEALS - IV, ERRED BY ESTIMATING THE TOTAL INCOME OF THE ASSESSEE AT 6% SINCE THE MARGINS IN SCRAP BUSINESS IS 2% TO 3% ONLY. THE SAID BUSINESS IS IN UNORGANISED SECTOR WITH LOW MARGINS AND LOT OF C OMPETITION FROM OTHER DEALERS. HENCE NP RATIO WILL BE ONLY BETWEEN 2% TO 3%. WE HEREBY REQUEST YOUR GOOD SELF TO ACCEPT THE SAID NP RATIO AS THEY ARE REASONABLE IN THIS LINE OF ACTIVITY. 4) THE CIT(A)-IV HAS ERRED WHILE CONFIRMING THE ORDER OF THE ASSESSING OFFICER WHEREIN THE A.O. HAS FAILED TO APPRECIATE THAT THE AMOUNT RECEIVED AS COMMISSION ON SALE TRANSACTION BUT CONSIDERED THE S AME AS SALE TRANSACTION OF ASSESSEE WHICH IS NOT CORRECT AND NOT JUSTIFIED. WE, HEREBY, SUBMIT YOU TO KINDLY CONSIDER THE COMMISSION INCOME ONLY AND CALC ULATE TAX ON SUCH INCOME. 5) A SUM OF RS 7,14,906/- HAS BEEN ADDED TOWARDS DIFFE RENCE BETWEEN PROFIT ARRIVED ON ESTIMATION BASIS AND THE AMOUNT OF NET P ROFIT AS PER THE RETURN OF INCOME WHICH IS NOT CORRECT, NOT JUSTIFIED AND BAD IN LAW. 6) THE ASSESSEE MAINTAINS ALL THE BOOKS OF ACCOUNTS W HICH ENABLE THE ASSESSING OFFICER TO COMPUTE THE TAXABLE INCOME SUCH AS CA SH BOOK, JOURNAL, LEDGER, RECEIPTS IN RESPECT OF THE EXPENDITURE INCURRED BY ASSESSEE AND THE SAME MAY TAKEN INTO CONSIDERATION TO DECIDE THE MATTER IN FA VOUR OF THE ASSESSEE. 7) THE CIT APPEALS - IV, HYDERABAD ERRED BY MAKING THE ADDITION OF RS. 5,15,000 TO THE RETURNED INCOME RELATING TO THE ADV ANCES RECEIVED BY THE ASSESSEE TOWARDS SALE OF SCRAP WITHOUT CONSIDERING THE EXPLANATION OFFERED BY THE ASSESSEE WHICH IS NOT CORRECT, NOT JUSTIFIED AND BAD IN LAW. 8) THE ASSESSEE HAS RECEIVED THE ABOVE AMOUNT FROM PER SONS ENGAGED IN THE SAME LINE OF BUSINESS. AND IT IS A COMMON PRACTICE IN BUSINESS TO GIVE ADVANCES FOR PURCHASE AND SALE OF SCRAP. IN THE SAM E MANNER ASSESSEE ALSO RECEIVED ADVANCES FROM SAID PERSONS IN THE FORM OF CHEQUES AS A PART OF PRUDENT BUSINESS PRACTICE. AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS MR. ASLAM HUSSAIN AND MR. MOHD. SHAMEEM ALSO ADMITTED THAT HE DID NOT REC EIVED ANY AMOUNT TOWARDS THE LOAN. HENCE THE ASSESSEE IS PRAYING TO CONSIDER THAT THE CHEQUES WERE RECEIVED AS ADVANCE FOR SCRAP AND TO DELETE TH E ADDITION MADE TO ASSESSED INCOME. 9) THE ASSESSEE HAS CLAIMED THE DEDUCTION UNDER SECTIO N 80U OF RS 50,000/- FOR ITA NO. 1390/HYD/2010 SRI LAXMI NARAYAN AGARWAL :- 3 -: PHYSICAL DISABILITY AND SUBMITTED A CERTIFICATE ISS UED BY THE CIVIL SURGEON, GANDHI HOSPITAL IN SUPPORT OF THE CLAIM. THE CIT(A) ERRED BY MAKING THE DISALLOWANCE OF SAID AMOUNT WITHOUT CONSIDERING THE EXPLANATION OFFERED BY THE ASSESSEE WHICH IS NOT CORRECT, NOT JUSTIFIED AN D BAD IN LAW. 10) THE ASSESSEE IS PRAYING TO GIVE A FRESH OPPORTUNITY TO PRODUCE THE CERTIFICATE REGARDING THE DISABILITY AND TO TAKE THE SAME IN TO ACCOUNT WHILE ASSESSING THE TOTAL INCOME OF THE ASSESSEE AND TO DECIDE THE MATTER IN FAVOUR OF THE ASSESSEE. 11) THE ORDER OF THE CIT APPEALS MAY BE SET ASIDE AND S ENT BACK TO ASSESSING OFFICER FOR REDOING THE SAME. 12) THE CIT APPEALS - IV, HYDERABAD ERRED WHILE CONFIRM ING THE ORDER PASSED BY ASSESSING OFFICER WHILE NOT CONSIDERING THE EXPLANA TION GIVEN BY THE ASSESSEE COMPANY AND INITIATED PENALTY PROCEEDINGS UNDER SEC TION 271 (1)( C) WHICH IS NOT CORRECT, NOT JUSTIFIED AND BAD IN LAW. 13) WE WOULD LIKE TO SUBMIT THAT THE ASSESSEE HAS NOT C ONCEALED ANY INCOME OR NOT FURNISHED INACCURATE PARTICULARS TO THE A.O. HE NCE, THE PENALTY PROCEEDINGS U/S 271(1)(C) MAY NOT BE INITIATED. 14) THE ASSESSEE MAY ADD, ALTER OR SUBSTITUTE ANY OTHE R POINTS TO THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE CASE I APPEAL'. PRECISE AND ADDITIONAL GROUNDS OF APPEAL: '1. THE LEARNED CIT (A) ERRED IN SUSTAINING THE ADD ITIONS MADE BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR UNDER CO NSIDERATION. 2. THE LEARNED CIT (A) ERRED IN UPHOLDING THE AD DITIONS MADE TO THE INCOME OF THE ASSESSEE BASED ON THE LOOSE SHEETS A ND DUMB MATERIALS WHICH HAS NO EVIDENTIAL VALUE. 3. THE LEARNED CIT (A) OUGHT TO HAVE APPLIED THE P RINCIPLE OF TELESCOPING OF THE INCOME DETERMINED IN THE EARLIER YEARS AGAINST THE EXPENDITURE OF SUBSEQUENT YEARS. 4. THE LEARNED CIT (A) OUGHT TO HAVE APPLIED THE P RINCIPLE OF TELESCOPING OF UNEXPLAINED EXPENDITURE AGAINST THE INCOME OF THE APPELLANT. ITA NO. 1390/HYD/2010 SRI LAXMI NARAYAN AGARWAL :- 4 -: 5. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ORD ER PASSED BY THE ASSESSING OFFICER BY ESTIMATING THE INCOME OF THE ASSESSEE AT 6%. 6. THE LEARNED CIT (A) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO ACCEPT THE BOOKS OF ACCOUNT OF THE ASSESSEE. 7. THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED T HE FACT THAT ONCE THE BUSINESS INCOME HAS BEEN ESTIMATED, NO FURTHER ADD ITIONS CAN BE MADE TO THE INCOME OF THE ASSESSEE. 8. THE LEARNED CIT (A) ERRED IN SUSTAINING THE ADD ITION OF RS. 3,00,000/- MADE TOWARDS UNACCOUNTED LOAN. 9. THE LEARNED CIT (A) ERRED IN SUSTAINING THE ADD ITION RS. 2,15,000/- MADE TOWARDS UNACCOUNTED LOAN. 10. THE CIT (A) ERRED CONFIRMING THE DISALLOWANCE OF CLAIM OF DEDUCTION U/S. 80U OF THE ACT OF RS. 40,000/-. 11. THE CIT (A) OUGHT TO HAVE APPRECIATED THE FACT THAT NO ADDITIONS CAN BE MADE TO THE INCOME OF THE ASSESSEE WITHOUT THERE B EING ANY INCRIMINATING MATERIAL IN SEARCH ASSESSMENT. 12. THE ASSESSEE MAY ADD, ALTER OR MODIFY ANY OF T HE POINTS TO THE GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIM E OF HEARING OF THE APPEAL'. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT, THE ASS ESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING IN SCRAP. SEARC H AND SEIZURE OPERATIONS U/S. 132 OF THE ACT WERE CONDUCTED ON 07 -11-2007. SUBSEQUENTLY, NOTICE U/S. 153A WAS ISSUED CALLING U PON THE APPELLANT TO FILE THE RETURN OF INCOME. IN RESPONSE TO WHICH, T HE APPELLANT FILED RETURN OF INCOME ON 27-08-2009 DISCLOSING INCOME OF RS. 9, 06,320/-. AGAINST THE SAID RETURN OF INCOME, ASSESSMENT CAME TO BE CO MPLETED U/S. 143(3) R.W.S 153A OF THE ACT VIDE ORDER DT. 30-11-2009 AT A TOTAL INCOME OF RS. 21,86,226/-. WHILE DOING SO, THE AO MADE AN ADDITI ON OF RS. 3 LAKHS BY HOLDING THAT THE APPELLANT HAD ADVANCED A SUM OF RS . 3 LAKHS AS A LOAN TO ONE MR. I. HUSSAIN. THIS IS BASED ON THE XEROX COPIES OF THE CHEQUES AND PROMISSORY NOTICES OBTAINED FROM THE SAID HUSSA IN, SEIZED VIDE PAGE NO. 29 TO 35 OF ANNEXURE A/LNA/RES/01. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS SUBMITTED BY THE APP ELLANT THAT THE SAID ITA NO. 1390/HYD/2010 SRI LAXMI NARAYAN AGARWAL :- 5 -: HUSSAIN WAS EXPIRED ON 02-08-2008 AND ALSO IN SUPPO RT OF WHICH HE FURNISHED THE COPY OF DEATH CERTIFICATE. HOWEVER, THE AO HAD CONCLUDED THAT THE APPELLANT IS ENGAGED IN MONEY LENDING BUSI NESS AND ADVANCED A SUM OF RS. 3 LAKHS AND MADE ADDITION OF AMOUNT AS U NEXPLAINED INVESTMENT. 3. ON APPEAL BEFORE THE CIT(A), IT WAS SUBMITTED BE FORE THE CIT(A) THAT THOSE BLANK CHEQUES WERE OBTAINED FROM THE PER SONS, WHO INTENDED TO BORROW FROM HIM. HOWEVER, THE APPELLANT STATED THAT HE NEVER ADVANCED ANY MONEY TO THE SAID PERSON THEREFORE, NO ADDITION WAS CALLED FOR. THE LD.CIT(A) AFTER EXAMINING THE EXPLANATION HAD DISBELIEVED THE EXPLANATION OFFERED BY THE APPELLANT AND FINALLY HE LD THAT THE APPELLANT WAS USING HIS OWN UNACCOUNTED MONEY IN PROVIDING UN ACCOUNTED LOANS AGAINST SECURITY OF PROMISSORY NOTICE AND CHEQUES A ND THEREFORE, UPHELD THE ADDITION. 4. IT WAS CONTENDED BEFORE US THAT THE DOCUMENTS SE IZED ARE ONLY DUMB DOCUMENTS AND THEREFORE, NO ADDITION CAN BE MA DE. ON THE OTHER HAND, LD.CIT(A) HAD PLACED RELIANCE ON THE LOWER AU THORITIES AND SUBMITTED THAT THE SEIZED DOCUMENTS CANNOT BE CALLE D DUMB DOCUMENTS SINCE THE DOCUMENTS ARE DULY SIGNED AND FILLED UP. SINCE THE ASSESSEE HAD FAILED TO EXPLAIN SATISFACTORILY UNDER WHAT CIR CUMSTANCES, THE BLANK CHEQUES CAME INTO HIS POSSESSION OF THE APPELLANT, THE ADDITION SHOULD BE UPHELD. 5. WE HEARD THE RIVAL PARTIES AND PERUSED THE MATER IAL ON RECORD. IT IS CLEAR FROM THE MATERIAL ON RECORD THAT WHAT IS S EIZED IS ONLY PHOTO COPIES OF BLANK CHEQUES AND PROMISSORY NOTES EXECUT ED BY ONE MR. I. HUSSAIN. OBVIOUSLY, THE ORIGINAL DOCUMENTS WERE NO T BROUGHT ON RECORD NOR TRACED AND SINCE THE PERSON WHO IS SUPPOSED TO HAVE EXECUTED ITA NO. 1390/HYD/2010 SRI LAXMI NARAYAN AGARWAL :- 6 -: DOCUMENT HAS DIED, NO CORROBORATIVE EVIDENCE COULD BE BROUGHT BY THE REVENUE. HENCE, NO ADDITION CAN BE MADE WITHOUT CO RROBORATIVE EVIDENCE. HENCE, WE DELETE THE ADDITION. THIS GRO UND OF APPEAL ACCORDINGLY IS ALLOWED. 6. THE NEXT GROUND RELATES TO THE ADDITION OF RS. 2 ,15,000/- BASED ON THE BLANK SINGED ORIGINAL CHEQUES BELONGING TO THE FOLLOWING PERSONS: S.NO. DATE OF CHEQUE CHEQUE NO. NAME OF PERSON ISSUED THE CHEQUE AMOUNT MENTIONED ON CHEQUE 1. 12.04.2004 499869 M/S. DIAMOND STEEL CORPORATION 1,15,000 2. 23.07.2004 300051 MD. SHAMEEM 1,00,000 TOTAL: 2,15,000 MARKED AS ANNEXURE A/LNA/RES/01. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE EXPLANATION OF THE APPELLANT WAS T HAT HE NEVER ADVANCED ANY LOANS TO THE ABOVE PERSONS AND CHEQUES WERE OBTAINED SINCE THEY INTEND TO BORROW MONEY FROM THE APPELLAN T. HOWEVER, ACTUAL ADVANCING OF MONEY HAD NEVER TAKEN PLACE. HOWEVER, ON EXAMINING THE PROPRIETOR OF DIAMOND STEEL CORPORATION, ASLAM HUSS AIN, HE STATED THAT HE BORROWED MONEY OF RS. 1,15,000/- AND THE CHEQUES WERE GIVEN AS A SECURITY FOR THE SAID AMOUNT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO ALSO EXAMINED MR. MD. SHAMIM, WHERE IN HE STATED THAT THE CHEQUE WAS ISSUED BY HIM TO THE APPELLANT FOR P URCHASE OF SCRAP. HOWEVER, THE TRANSACTION OF PURCHASE OF SCRAP NEVER TOOK PLACE. HOWEVER, CHEQUE WAS LYING WITH THE APPELLANT AND TH E AO OBSERVED THAT IN THE BALANCE SHEET OF THE APPELLANT FOR THE YEAR ENDING 31-03-2005 MR. SHAMIM IS REFLECTED HIS DEBTOR FOR RS. 1 LAKH. THU S, HE CONCLUDED THAT IN VIEW OF THE CONTRADICTORY STATEMENTS MADE BY BOT H THE PARTIES, MADE ADDITION OF RS. 2,15,000/-. ITA NO. 1390/HYD/2010 SRI LAXMI NARAYAN AGARWAL :- 7 -: 7. ON APPEAL BEFORE THE CIT(A), IT WAS SUBMITTED BE FORE THE CIT(A) THAT THOSE BLANK CHEQUES WERE OBTAINED FROM THE PER SONS, WHO INTENDED TO BORROW FROM HIM. HOWEVER, THE APPELLANT STATED THAT HE NEVER ADVANCED ANY MONEY TO THE SAID PERSON THEREFORE, NO ADDITION WAS CALLED FOR. THE LD.CIT(A) AFTER EXAMINING THE EXPLANATION HAD DISBELIEVED THE EXPLANATION OFFERED BY THE APPELLANT AND FINALLY HE LD THAT THE APPELLANT WAS USING HIS OWN UNACCOUNTED MONEY IN PROVIDING UN ACCOUNTED LOANS AGAINST SECURITY OF PROMISSORY NOTICE AND CHEQUES A ND THEREFORE, UPHELD THE ADDITION. 8. IT WAS CONTENDED BEFORE US THAT THE DOCUMENTS SE IZED ARE ONLY DUMB DOCUMENTS AND THEREFORE, NO ADDITION CAN BE MA DE. ON THE OTHER HAND, LD.CIT(A) HAD PLACED RELIANCE ON THE LOWER AU THORITIES AND SUBMITTED THAT THE SEIZED DOCUMENTS CANNOT BE CALLE D DUMB DOCUMENTS SINCE THE DOCUMENTS ARE DULY SIGNED AND FILLED UP. SINCE THE ASSESSEE HAD FAILED TO EXPLAIN SATISFACTORILY UNDER WHAT CIR CUMSTANCES, THE BLANK CHEQUES CAME INTO HIS POSSESSION OF THE APPELLANT, THE ADDITION SHOULD BE UPHELD. 9. WE HEARD THE RIVAL PARTIES. WE NOTICED THAT THE ADDITION WAS MADE BY THE AO BASED ON THE XEROX COPIES OF BLANK SIGNED CHEQUES AND PROMISSORY NOTES ISSUED BY THE FOLLOWING: S.NO. DATE OF CHEQUE CHEQUE NO. NAME OF PERSON ISSUED THE CHEQUE AMOUNT MENTIONED ON CHEQUE 1. 12.04.2004 499869 M/S. DIAMOND STEEL CORPORATION 1,15,000 2. 23.07.2004 300051 MD. SHAMEEM 1,00,000 TOTAL: 2,15,000 THE STATEMENT GIVEN BY THE PROPRIETOR OF M/S. DIAMO ND STEEL CORPORATION WAS NOT CONFRONTED WITH THE APPELLANT A ND WHEREAS THE ITA NO. 1390/HYD/2010 SRI LAXMI NARAYAN AGARWAL :- 8 -: STATEMENT GIVEN BY MR. MD. SHAMIM THAT NO LOAN WAS OBTAINED BY HIM REMAINS UN-CONTROVERTED. THUS, THERE IS NO CONCLUS IVE EVIDENCE ON RECORD IN SUPPORT OF THE ALLEGATION THAT THE APPELL ANT HAD ADVANCED THE MONEY TO THESE TWO PARTIES AND THE ORIGINAL SEIZED PHOTO COPIES AND MATERIAL ARE NOT BROUGHT ON RECORD NOR TRACED. IN THESE CIRCUMSTANCES, WE ARE NOT IN A POSITION TO UPHOLD THE ADDITION. H ENCE, THIS GROUND OF APPEAL IS DELETED. 10. THE NEXT GROUND OF APPEAL RELATES TO THE ESTIMA TION OF PROFITS ON THE SALES REPORTED AT 6%. THE AO OBSERVED THAT THE RE ARE NO BILLS IN SUPPORT OF THE PURCHASES MADE OR SALES MADE. ACCOR DINGLY, REJECTED THE BOOK RESULTS AND ESTIMATED THE PROFIT AT 6% ON THE TURNOVER. THEREFORE, DIFFERENCE OF RS. 7,14,906/- WAS ADDED TO THE RETUR NED INCOME. AGGRIEVED BY THIS ADDITION, ON APPEAL BEFORE THE CI T(A), THE GROUND OF APPEAL WAS DISMISSED ON THE GROUND THAT THE APPELLA NT HAD NOT BROUGHT ANY MATERIAL ON RECORD TO SAY THAT ESTIMATION OF PR OFIT AT 6% IS ON HIGHER SIDE. AGGRIEVED, THE PRESENT GROUND OF APPEAL WAS FILED BEFORE US. 11. IT WAS ARGUED BY THE LD. AR THAT THE AO TRAVELL ED BEYOND THE SCOPE OF SECTION 153A BY MAKING THE IMPUGNED ADDITI ON AND THERE WAS NO INCRIMINATING MATERIAL FOUND AS A RESULT OF SEAR CH AND SEIZURE OPERATIONS INDICATING THAT THE BOOKS OF ACCOUNTS AR E DEFECTIVE OR UN- RELIABLE. THEREFORE, NO ADDITION SHOULD BE MADE. ON THE OTHER HAND LD. DR PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITI ES. 12. WE HEARD THE RIVAL PARTIES. ADMITTEDLY, THERE IS NO INCRIMINATING MATERIAL SEIZED AS A RESULT OF SEARCH AND SEIZURE O PERATION INDICATING THAT THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESS EE ARE EITHER DEFECTIVE OR APPELLANT HAD INFLATED THE EXPENDITURE OR SUPPRESSED THE SALES RESULTING IN LOWER RETURNED INCOME. IT IS TR ITE LAW THAT IN THE ITA NO. 1390/HYD/2010 SRI LAXMI NARAYAN AGARWAL :- 9 -: ABSENCE OF ANY INCRIMINATING MATERIAL SUGGESTING TH AT BOOK RESULTS SHOULD BE REJECTED THE ADDITION CANNOT BE MADE ON E STIMATE BASIS IN THE ASSESSMENT MADE U/S. 153A. ACCORDINGLY, THE ADDITI ON IS DELETED. HENCE, THIS GROUND OF APPEAL FILED BY THE ASSESSEE IS ALLOWED. 13. ON THE ISSUE OF CLAIM OF DEDUCTION U/S. 80U OF THE ACT, WE FIND THAT THE CLAIM WAS WITHDRAWN BEFORE THE AO AND THER EFORE, THE CIT(A) IS PERFECTLY JUSTIFIED IN REJECTING THE CLAIM OF THE A PPELLANT. HENCE, THIS GROUND OF APPEAL IS DISMISSED. 14. IN THE RESULT, THIS APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JUNE, 2015 SD/- SD/- (ASHA VIJAYARAGHAVAN) (INTURI RAMA RAO) JUDICIAL MEMBER ACC OUNTANT MEMBER HYDERABAD, DATED 17 TH JUNE, 2015 TNMM ITA NO. 1390/HYD/2010 SRI LAXMI NARAYAN AGARWAL :- 10 -: COPY TO : 1. SRI LAXMI NARAYAN AGARWAL, C/O. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 2. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-6(1 ), HYDERABAD. 3. CIT(APPEALS)-IV, HYDERABAD. 4. CIT-III, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.