Sri Nadella Venkata Nageswara Rao, Vijayawada V. The DCIT, Vijayawada

ITA 333/VIZ/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6436 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 01-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: R PRASAD
• Keywords: Business income; Revision of order; Depreciation; Opportunity of being heard; Corroborative evidences
• Section: 143(3); 263; 63

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 333 / VIZ / 201 7 ( / ASSESSMENT YEAR: 20 10 - 11 ) SRI NADELLA VENKATA NAGESWARA RAO D.NO.59 - 10 - 5A, GAYATHRI NAGAR VIJAYAWADA [ PAN : AARPN3710B ] VS. DY.COMMISSIONER OF INCOME TAX, CIRCLE - 2(1) VIJAYAWADA ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI M.S.R.PRASAD , A R / RESPONDENT BY : S HRI M.N.MURTHY NAIK, DR / DATE OF HEARING : 21 . 11 .2017 / DATE OF PRONOUNCEMENT : 20 . 1 2 .2017 20 / O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER : 1 . THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS), VI JAYAWADA VIDE ITA NO. 2 15 / CIT(A) / V JA /201 5 - 1 6 DATED 3 1 . 0 1 .201 7 FOR THE ASSESSMENT YEAR 20 10 - 11 . 2 ITA NO. 333/V IZ /2017 SR I NADELLA VENKATA NAGESWARA RAO, VIJAYAWADA 2 . THE ASSESSEE FILED TOTAL TEN GROUNDS OF APPEAL ALONG WITH THE A PPEAL M EMO IN FORM NO.36. SINCE THE GROUNDS OF APPEAL ARE ARGUMENTATIVE AND LACKING CLARITY , THE ASSESSEE FILED REVISED GROUNDS OF APPEAL DURING THE APPEAL HEARING ON 21.11.2017 AND RAISED NINE GROUNDS IN TOTAL . ON THE REQUEST OF THE ASSESSE E THE UNDER MENTIONED REVISED GROUNDS OF APPEAL ARE TAKEN UP FOR ADJ UDICATION 1. THE ORDER OF THE LD. CIT (A) IS CONTRARY TO LAW, WEIGHT OF EVIDENCE AND PROBABILITIES OF THE CASE. 2. SINCE THE ORDER OF THE PRINCIPLE CIT UNDER SECTION 263 IN SO FAR AS DEPREDATION DISALLOWANCE IS CONCERN IS AGAINST BINDING PRECEDENTS OF THE JURISDICTIONAL HONORABLE HIGH COURT, THE SAME IS NOT BEING 'IN ACCORDANCE WITH LAW', NOTHING PREVENTED BOTH THE LOW ER AUTHORITIES TO ACT 'IN ACCORDANCE WI TH LAW' ALLOWING DEPRECIATION. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, SINCE THE ISSUES IN ASSESSMENT ARE ALSO TO BE DECIDED 'IN ACCORDANCE WITH LAW' AS PER DIRECTIONS OF THE LD. PR. CIT, GIVEN U/S 263 OF THE IT ACT, 1961, AND SINCE THE ID. A.O'S CONSEQUENTIAL ASSESSMENT DID NOT SO DECIDE SUCH ISSUES IN ACCORDANCE WITH LAW' AS MANDATED IN THE REMAND ORDER DATED 27 - 03 - 2015 OF THE LD. PR. CIT, THE LD. CIT(A) OUGHT TO HAVE DECIDED THE ISSUES IN APPEAL BEFORE HIM SO AS TO BE 'IN ACCORDANCE WITH LAW'. 4. U NDER THE FACTS AND CIRCUMSTANCES OF THE CASE, SINCE THE DECISION OF PRINCIPLE CIT - UNDER - SECTION 263, DIRECTING DISALLOWANCE OF DEPRECIATION AGAINST ESTIMATED INCOME, IS AGAINST BINDING PRECEDENTS OF THE JURISDICTIONAL HONORABLE HIGH COURT THE SAME IS NEITHER BINDING ON THE AO NOR ON THE CIT(A) AND THE CIT(A) OUGHT TO HAVE FOLLOWED THE SAID BINDING PRECEDENTS. 5. U NDER THE FACTS AND CIRCUMSTANCE OF THE CASE, SINCE NO EVIDENCE IS LED BY THE PRINCIPLE CIT REGARDING FILING OF THE SUP AGAINST THE BINDING PRECEDENT OF THE JURISDICTIONAL HIGH COURT NO CREDENCE COULD HAVE BEEN GIVEN TO SUCH A STATEMENT OR EVEN OTHERWISE. 6. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE DIRECTION OF THE LD. PR. COMMISSIONER, TO DISALLOW DEPRECIAT ION OF RS. 35,65,818/ - IS AGAINST BINDING CIRCULAR NO. 29 - D (XIX - 14) [F. NO. 45/239/65 - /TI] DATED 31 - 8 - 1965 OF CBDT AND ALSO AGAINST THE BINDING DECISIONS OF THE HONOURABLE SUPREME COURT AND THEREFORE 3 ITA NO. 333/V IZ /2017 SR I NADELLA VENKATA NAGESWARA RAO, VIJAYAWADA NOT BEING 'IN ACCORDANCE WITH LA W ' OUGHT NOT HAVE BEEN FOLLOWED BY BOTH THE LOWER AUTHORITIES. 7. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN SUSTAINING THE ADDITION OF RS 6,49,851/ - REPRESENTING INTEREST RECEIVED WHICH IS CONNECTED WITH CONTRACT WORKS UNDER TAKEN BY THE ASSESSEE ON WHI CH INCOME IS ESTIMATED. 3. G ROUND NO.1 AND 9 OF THE REVISED GROUNDS OF APPEAL ARE GENERAL IN NATURE WHICH DOES NOT REQUIRE SPECIFIC ADJUDICATION. 4 . GROUND NO. 2 TO 6 ARE RELATED TO THE DIRECTION OF THE COMMISSIONER OF INCOME TAX(CIT) IN ORDER U/S 263 RELATING TO THE ADDITION OF RS.35,65,818/ - RE PRESENT ING T HE DEPRECIATION. IN THIS CASE, ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) ON TOTAL INCOME OF RS.64,11,951/ - AND S UBSEQUENTLY, THE CIT HAS TAKEN UP THE CASE FOR REVISION U/S 263 AND OBSERVED THAT THE ASSESSING OFFICER(AO) HAS ALLOWED THE DEPRECIATION FROM THE ESTIMATED INCOME . THE LD. CIT WAS OF THE VIEW THAT FROM THE ESTIMATED INCOME THERE IS NO SCOPE FOR ALLOWING THE DEPRECIATION AS PER SECTION 30 TO 38 OF I.T.ACT. THEREFORE, THE LD. CIT HAS DIRECTED THE AO TO ADD THE DEPRECIATION AND RE - DETERMINE THE INCOME. PURSUANT TO THE ORDERS OF THE LD. CIT, THE AO HAS PASSED THE CONSEQUENTIAL ORDER U/S 143 (3) R.W.S.263 MAKING THE ADDITION OF RS.35,65,818/ - . THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) A ND THE LD.CIT(A) DECLINED TO INTERFERE WITH THE ORDER OF THE LD. CIT AS THE 4 ITA NO. 333/V IZ /2017 SR I NADELLA VENKATA NAGESWARA RAO, VIJAYAWADA LD.CIT (A) HAS NO JURISDICTION TO ADJUDICATE THE ORDER PASSED U/S 263 OF THE A CT. 5. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US . DURING THE APPEAL HEARING, THE LD.AR ARGUED THAT THE DEPRECIATION IS A STATUTORY ALLOWANCE AS HELD BY JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. Y.RAMACHANDRA REDDY [50 TAXMANN.COM 129] . THE HONBLE HIGH COURT HELD THAT IF THE ASSESSEE IS ENTITLED FOR DEDUCTION OF INTEREST AND THE DEPRECIATION IN THE ORDINARY COURSE OF ASSESSMENT, THE SAME CANNOT BE DENIED MERELY BECAUSE OF PROFIT IS DETERMINED ON THE BASIS OF ESTIMATION. THE LD. AR ARGUED THAT SINCE THE DECISION OF HONBL E HIGH COURT IS BINDING ON THE LD. CIT, THE ORDER OF T HE LD. CIT PASSED U/S 263 IS NOT IN ACCORDANCE WITH THE LAW LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT AND WHILE GIVING EFFECT TO THE REVISION ORDER THE AO OUGHT TO HAVE ALLOWED THE DEPRECIATION FOLLOWING THE BINDING DECISION O F HON B LE JURISDICTIONAL HIGH COURT . THE LD.AR ARGUED THAT THE LD.CIT (A) WHILE DECIDING THE APPEAL OUGHT TO HAVE FOLLOWED THE BINDING DECISION OF THE JURISDICTIONAL HIGH COURT AND DIRECTED THE AO TO ALLOW THE DEPRECIAITON FROM THE ESTIMATED INCOME. THE AR WAS OF THE VIEW THAT THOUGH THE 5 ITA NO. 333/V IZ /2017 SR I NADELLA VENKATA NAGESWARA RAO, VIJAYAWADA ASSESSEE DID NOT PREFER APPEAL AGAINST THE ORDER U/S 263 THE AO/CIT(A) SHOULD GIVE RELIEF TO THE EXTENT OF DEPRECIATION. 6. ON THE OTHER HAND, LD.DR ARGUED THAT THE LD. CIT IN THE ORDER U/S 263 DIRECTED THE AO TO MAKE THE ADDITION OF RS.35,65,818/ - REPRESENTING THE DEPRECIATION . WHILE HOLDING SO, THE CIT HAS CONSIDERED THE DECISIONS RELIED UPON BY THE ASSESSEE AND ALSO OTHER DECISIONS OF HIGH COURTS AND THE TRIBUNALS AND TAKEN A CONSCIOUS DECISION AND GIVEN A SPECIFIC DIRE CTION. THE ASSESSEE HAS NOT GONE ON APPEAL AGAINST THE ORDER U/S 263, HENCE, THE ORDER PASSED U/S 263 BY THE LD. CIT HAS BECOME FINAL. THE AO FOLLOWED THE DIRECTION OF THE CIT AND GIVEN EFFECT CORRECTLY. THE CIT(A) AND THE CIT, VIJAYAWADA ARE PARALLEL AUT HORITIES AND THERE IS NO PROVISION IN THE INCOME TAX ACT TO ADJUDICATE THE ORDERS OF THE CIT BY THE CIT(A). HENCE, THE CIT(A) HAS RIGHTLY DECLINED TO INTER FERE WITH THE ORDER OF THE LD. CIT AND SUBMITTED THAT T HE ARGUMENTS OF THE LD.AR WITH REGARD TO SECT ION. 263 ARE INFRUCTUOUS AND REQUESTED TO DISMISS THE APPEAL OF THE ASSESSEE. ACCORDING TO THE ARGUMENT OF THE LD.DR THE AO HAS NO OPITON EXCEPT TO FOLLOW THE ORDER OF THE CIT PASSED U/S 263. 6 ITA NO. 333/V IZ /2017 SR I NADELLA VENKATA NAGESWARA RAO, VIJAYAWADA 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THIS CASE, THE CIT HAS TAKEN UP THE CASE FOR REVISION U/S 263 AND GIVEN A SPECIFIC DIRECTION TO THE AO TO MAKE ADDITION OF DEPRECIATION AMOUNTING TO RS.35,65,818/ - . FOR READY REFERENCE, WE REPRODUCE PARA NO.6.2 OF THE ORDER PASSED BY C IT U/S 263. 6.2. THE ASSESSEE'S SUBMISSIONS ARE CONSIDERED BUSINESS INCOME, PER SE, IS THE TAXABLE INCOME, WHICH APPARENTLY IS NET OF ALL RELATED EXPENSES AND OTHER ELIGIBLE DEDUCTIONS HENCE, ONCE BUSINESS INCOME IS ESTIMATED, THERE IS NO SCOPE FOR DEDUCT IONS FROM SEC 30 TO 38 OF THE ACT BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE P.O HAS ESTIMATED THE INCOME AT A SPECIFIED PERCENTAGE WHICH ,.WAS NOT AGITATED BY THE ASSESSEE AT ANY STAGE DURING THE ASSESSMENT OR LATER PROCEEDINGS HENCE, KEEPING I N VIEW THE INTENT OF THE JUDICIAL PRONOUNCEMENTS MADE IN THE CASES OF M/S. INDWELL CONSTRUCTIONS PVT. LTD., MIS. KNR CONSTRUCTIONS LTD AND THE IA ER8ECRSTONS OF THE MANTLE ITAT, HYDERABAD IN SRI P V SITARAMASWAMY VS. ADDL. CIT, RANGE - B, HYDERABAD IN ITA NO 264/HYD/2012 - AY 2008 - 09, DT. 09/01/2013, THE AC SHOULD NOT HAVE ALLOWED DEPRECIATION FROM THE INCOME SO ESTIMATED. IN THIS CASE, THE AO HAS NOT FOLLOWED THE JUDICIAL DISCIPLINE I.E. THE LAW LAID DOWN BY THE HON'BLE ITAT. THE RATIO RELIED ON BY THE ASSES SEE WAS NOT BEFORE THE AO AND THE ASSESSEE HAS NOT BROUGHT ON RECORD THAT THE A.0 HAS TAKEN A CONSCIOUS DECISION RELYING ON SUCH RATIO FURTHER; ON THIS ISSUE OF ALLOWANCE OF DEPRECIATION AFTER ESTIMATION OF INCOME, THE REVENUE HAS FILED S LP BEFORE THE HON 'BLE SUPREME COURT IN THE CASE OF Y RA MA CHANDRA RED D Y. IN VIEW OF THE ABOVE FACTS & CIRCUMSTANCES, THE ORDER PASSED BY THE AO U/S143(3) ON 2642 - 2012 FOR THE A.Y 2010 - LI IS CONSIDERED AS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE W ITHIN THE SCOPE OF SECTION 263 OF THE ACT ON THIS COUNT AND HENCE SET ASIDE THE AO IS DIRECTED TO ADD THE DEPRECIATION AT RS 35,65,818/ - , WHICH WAS WRONGLY ALLOWED, TO THE TOTAL INCOME AND RE - DETERMINE THE TOTAL INCOME IN ACCORDANCE WITH LAW & ESTABLISHED PROCEDURE AND AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . 7.1. THE ASSESSEE HAS NOT PREFERRED THE APPEAL AGAINST THE ORDER U/S 263 AND THE ORDER PASSED BY THE CIT U/S 263 HAS NOW BECO ME FINAL. WHILE GIVING SPECIFIC DIRECTIO N, THE CIT CONSIDERED THE DECISION OF HONBLE AP HIGH 7 ITA NO. 333/V IZ /2017 SR I NADELLA VENKATA NAGESWARA RAO, VIJAYAWADA COURT IN THE CASE OF CIT VS. Y.RAMACHANDRA REDDY AND ALSO OTHER RELEVANT DECISION S OF AP HIGH COURT AND THE TRIBUNA L S . IF THE ASSESSEE IS AGGRIEVED BY THE O RDER OF THE CIT, THE ASSESSEE SHO ULD HAVE PREFERRED APPEAL BEFORE THE TRIBUNAL. BUT THE ASSESSEE HAS NOT FILE D ANY APPEAL, THUS THE ORDER U/S 263 HAS BEC O ME FINAL AND B INDING ON THE AO . THE ONLY ISSUE INVOLVED FOR ADJUDICATION IS WHETHER THE AO HAS CORRECTLY GIVEN EFFECT TO THE CITS ORDER U/S 2 63 OR NOT? THEREFORE, THE GROUND S RAISED BY THE ASSESSEE WITH REGARD TO THE MERITS OF THE ORDER OF THE CIT RELATING TO THE ALLOWABILITY OF DEPRECIATION ARE NOT RELEVANT TO THE PRESENT APPEAL OF THE ASSESSE E . THE JURISDICTION OF THE LD.CIT(A) ON ORDER PASS ED U/S 143(3) R.W.S. 263 IS CONFINED TO SEE WHETEHR THE AO HA S GIVEN EFFECT TO THE ORDER CORRECTLY OR NOT. IN THE INSTANT CASE, AO HAS NOT COMMITTED ANY MISTAKE WHILE GIVING EFFECT TO THE ORDER OF THE LD.CIT U/S 263. THE LD.AR DID NOT BRING ANY MISTAKE IN THE CONSEQUENTIAL ORDER PASSED BY THE AO WHILE GIVING EFFECT TO THE LD.CITS ORDER. H ENCE, THE GROUND NOS. 2 TO 6 OF ASSESSEES APPEAL WHICH ARE RELATED TO THE MERITS OF THE REVISION ORDER U/S 263 ARE NOT RELEVANT TO THE PRESENT APPEAL AND ACCORDINGLY DISMISSED. 8. THE CIT U/S 263 HAS GIVEN A SPECIFIC DIRECTION TO MAKE THE ADDITION OF RS.35,65,818/ - REPRESENTING THE DEPRECIATION. WHILE PASSING THE 8 ITA NO. 333/V IZ /2017 SR I NADELLA VENKATA NAGESWARA RAO, VIJAYAWADA CONSEQUENTIAL ORDER, THE AO HAS MADE THE ADDITION OF RS.35,65,818/ - REPRESENTING THE DEPRECIATION AND CO RRECTLY FOLLOWED THE DIRECTION OF CIT. THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE STATING THAT IT IS A SP ECIFIC REMAND . FOR READY REFERENCE, WE REPRODUCE PARA 5.1.2. OF CIT(A). 5.1.2. AS THE DIRECTION OF CIT U/S 263 OF THE ACT IS A SPECIFIC DIR ECTION. I DO NOT FIND ANY REASON TO INTERFERE WITH ADDITION MADE BY A.O. (IN DUE COMPLIANCE WITH THAT SPECIFIC DIRECTION). APPELLANT SHOULD HAVE SOUGHT NECESSARY REMEDY FROM THE APPROPRIATE AUTHORITY VIZ ITAT. AS CIT &CIT(A) ARE PARALLEL AND EQUAL AUTHOR ITIES, APPEAL AGAINST THE ASSESSMENT COMPLETED AS PER THE SPECIFIC DIRECTIONS OF CIT U/S 263 OF THE ACT COULD NOT BE DECIDED BY THE CIT(A). IF IT IS AN OPEN REMAND, IN MY VIEW, FIRST APPELLATE AUTHORITY CAN DECIDE THE ISSUE ON MERITS. BUT IN APPELLANTS C ASE, IT IS A SPECIFIC REMAND. THIS GROUND OF APPEAL IS DISMISSED. 8.1. AS PER THE PROVISIONS OF IT ACT, THE CIT(A) IS NOT VESTED WITH THE POWERS TO ADJUDICATE THE ORDERS OF THE C IT. SINCE IT IS SPECIFIC REMAND TO THE AO, THE AO IS BOUND TO FOLLOW THE DIRECTION AND THE LD. CIT (A) CANNOT ADJUDICATE THE MERITS OF THE DIRECTION S OF THE CIT. SINCE THE AO HAS GIVEN EFFECT TO THE ORDER OF THE LD.CIT U/S 263 CORRECTLY BY MAKING ADDITION OF RS.35,65,818/ - WHICH WAS CONFIRMED BY THE LD.CIT(A), WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A), HENCE, WE UPHOLD THE ORDER OF THE LD.CIT(A) AND DISMISS THE APPEAL OF THE ASSESSEE ON THIS ISSUE. 9. GROUND NOS. 7 AND 8 ARE RELATED TO THE ADDITION OF RS. 6,49,851/ - REPRESENTING INTEREST RECEIVED ON WHICH THE INCOME IS ESTIMATED. IN THE 9 ITA NO. 333/V IZ /2017 SR I NADELLA VENKATA NAGESWARA RAO, VIJAYAWADA ORDER PASSED U/S 263, THE LD. CIT HAS DIRECTED TH E AO TO AFFORD REASONABLE OPPORTUNITY AND OBTAIN THE RELEVANT PARTICULARS AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW. T HE AO HAS ESTIMATED THE INCOME AND ALSO MADE THE ADDITION OF RS.6,49,851/ - SEPARATELY REPRESENTING THE INTEREST . THE AO DID NOT DISCUSS IN THE ASSESSMENT ORDER WHY A SEPARATE ADDITION OF INTEREST REQUIRED TO BE MADE ONCE THE INCOME IS ESTIMATED. THE LD.CIT (A) DISMISSED THE APPEAL OF THE ASSESSE E STATING THAT NO SUPPORTING EVIDENCE WAS PRODUCED EITHER BEFORE THE AO OR THE CIT(A) . T HE LD.CIT(A) FURTHER OBSERVED THAT THE ASSESSE E HAD SHOWN THE INTEREST SEPARATELY BUT NOT INCLUDED IN THE GROSS RECEIPTS. HENCE THE CIT(A) VIEWED THAT THE ASSESS E E IS NOT CORRECT IN CLAIMING THE INTEREST IN ESTIMATION OF INCOME. 10. WE HEARD BOTH T HE PARTIES AND PERUSED THE MATERIAL ON RECORD. ONCE THE INCOME IS ESTIMATED, THERE IS NO REASON TO MAKE A SEPARATE ADDITION ON ACCOUNT OF INTEREST , UNLESS THE AO MAKES OUT A SPECIFIC CASE FOR ASSESSMENT OF INTEREST AS INCOME FROM OTHER SOURCES. IN THIS CA SE, THE AO HAS NOT MADE OUT A CASE FOR MAKING THE ADDITION OF INTEREST AS INCOME FROM OTHER SOURCES SEPARABLY. A S PER THE JUDICIAL PRECEDENTS, ONCE THE INCOME IS ESTIMATED NO INCOME REQUIRED TO BE BROUGHT TO TAX SEPARATELY. DURING THE APPEAL HEARING, TH E LD.AR DID NOT MAKE OUT CASE THAT THE IMPUGNED INTEREST IS 10 ITA NO. 333/V IZ /2017 SR I NADELLA VENKATA NAGESWARA RAO, VIJAYAWADA BUSINESS RECEIPT AND THE LD.DR ALSO FAILED TO PRODUCE ANY OTHER EVIDENCE TO ESTABLISH THAT THERE IS A CASE FOR MAKING THE ADDITION OF INTEREST INCOME SEPARATELY. THEREFORE, WE ARE OF THE CONSID ERED OPINION THE ISSUE NEEDS FURTHER VERIFICATION TO HOLD WHETHER THE INTEREST I S A SEPARATE SOURCE OF RECEIPT OTHER THAN FROM THE SOURCE OF BUSINESS OR NOT. THEREFORE WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF THE AO TO EXAMINE THE CORRECTNESS OF ASSESSEES CLAIM THAT THE INTEREST FORMS PART OF BUSINESS INCOME OR NOT AND DECIDE THE ISSUE AFRESH ON MERITS. ASSESSEES APPEAL ON THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 1 1 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 20 TH D EC 2017 . SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 20 . 1 2 .2017 L. RAMA, SPS 11 ITA NO. 333/V IZ /2017 SR I NADELLA VENKATA NAGESWARA RAO, VIJAYAWADA / COPY OF THE ORDER FORWARDED TO: - 1. / THE APPELLANT - SRI NADELLA VENKATA NAGESWARA RAO, D.NO.59 - 10 - 5A, GAYATHRI NAGAR, VIJAYAWADA 2 . / THE RESPONDENT DY.COMMISSIONER OF INCOME TAX, CIRCLE - 2(1), VIJAYAWADA 3. THE PR. COMMISSIONER OF INCOME TAX , VIJAYAWADA 4 . THE COMMISSIONER OF INCOME TAX (APPEALS) , VIJAYAWADA 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM