Appeal Details
Counselvise Citation
[2018] 125 COUNSELVISE.COM (IT) 4266 (ITAT-VISAKHAPATNAM)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 6 month(s) 14 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
10-08-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Assessment Year
2011-2012
Appeal Filed On
27-01-2017
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 S . 3 1 & 33 /VIZ/ 201 7 ( / ASSESSMENT YEAR: 20 1 0 - 1 1 AND 2011 - 12 ) G.VENKATA KRISHNA PROP.GHANTASALA MANIKYALA RAO C ARDS 11 - 25 - 167 , MAIN ROAD, ONE TOWN VIJAYAWADA [PAN :ACPPG1246F] VS. INCOME TAX OFFICER WARD - 1 VIJAYAWADA ( / APPELLANT) ( / RESPONDENT) ./I .T.A.NO.32 /VIZ/2017 ( /ASSESSMENT YEAR:2010 - 11) G.VENKATA RAMAN PARTNER.SRI DHANALAKSHMI STATIONERY MART 11 - 54 - 225, JAI HIND MARKET MAIN ROAD , ONE TOWN, VIJAYAWADA [PAN :ACPPG1245G] INCOME TAX OFFICER WARD - 1(1) VIJAYAWADA ./I .T.A.NO S .34 & 35 /VIZ/2017 ( /ASSESSMENT YEAR:2010 - 11 AND 2011 - 12) M/S SRI VIJAYALAKSHMI STATIONERY & FANCY MART , D.NO.11 - 25 - 167 MAIN ROAD , VIJAYAWADA [PAN :AAIFS1693M] INCOME TAX OFFICER WARD - 1(1) VIJAYAWADA / ASSESSEE BY : SHRI C.SUBRAMANYAM, AR / REVENUE BY : SHRI DEBA KUMAR SONOWAL, DR / DATE OF HEARING : 25.07.2018 / DATE OF PRONOUNCEMENT : 10 .08.2018 2 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: DELAY : THERE WAS A DELAY OF 255 DAYS IN FILING THE APPEAL S . THE ASSESSEE S HAVE FILED THE AFFIDAVIT S AND REQUESTED FOR CONDONATION OF DELAY. DURING THE APPEAL HEARING, THE LD.AR EXPLAINED THE REASONS FOR THE DELAY IN FILING THE APPEAL. LD AR ARGUED THAT THE DELAY WAS CAUSED DUE TO INADVERTENT AND UNINTENDED MISTAKE OF THE TAX CONSULTANT AND THE ASSESSEE S ARE NOT AWARE OF THE LEGAL CONSEQUENCES . THE LD. AR FURTHER SUBMITTED THAT THE ASSESSEE IS HAVING MERIT IN THEIR CASE AND NON CONDONATION OF DELAY WOULD CAUSE INJUSTICE TO THE ASSESSEE. WE HAVE HEARD BOTH THE PARTIES AND PRI M A FACIE THERE APPEARS TO BE A CASE OF MERIT. THEREFORE, W E ARE OF THE CONSIDERED OPINION THAT MERELY BECAUSE OF TECHNICAL MISTAKE JUSTICE SHOULD NOT SUFFER , HENCE, IN THE INTER E ST OF JUS T ICE WE CONDONE THE DELAY OF 255 DAYS IN FILING THE APPEAL S AND ADMIT THE APPEAL S . 2. THESE APPEALS ARE FILED BY THE ASSESSEE S AGAINST THE ORDER OF THE PR.COMMISSIONER OF INCOME TAX (PR.CIT), VIJAYAWADA DATED 15.03.2016 AND 16.03.2016 FOR THE ASSESSMENT YEAR 2010 - 11 AND 2011 - 12. SINCE THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON, ALL THE APPEALS ARE CLUBBED, HEARD 3 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA TOGETHER AND DISPOSED OFF IN A COMMON ORDER FOR THE SAKE OF CONVENIENCE AS UNDER. ITA NO.31 & 33/VIZ/2017 3. THE ASSESSEE IS ENGAGED IN THE RETAIL WEDDING CARDS BUSINESS. FOR THE ASSESSMENT Y EAR 2010 - 11, THE ASSESSE E FILED RETURN OF INCOME ADMITTING TOTAL INCOME OF RS.3,50,950/ - ON 29.02.2011. A SURVEY U/S 133A WAS CONDUCTED IN THE GROUP CASES AND FOUND CERTAIN DISCREPANCIES DURING THE COURSE OF SURVEY. THEREFORE, THE ASSE SSEES CASE WAS REOPENED BY ISSUE OF NOTICE U/S 148 AND COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS ACT) . THE ASSESSMENT WAS COMPLETED BY AN ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 DATED 18 .03.2 0 14 , DETERMINING THE TOTAL INCOME AT RS.4,50,000/ - . THE ASSESSING OFFICER(AO) MADE THE ADDITION OF RS.1,00,000/ - IN THE ASSESSMENT, TOWARDS THE UNEXPLAINED SOURCE FOR CONSTRUCTION OF THE BUILDING. SUBSEQUENTLY, THE LD. PR.CIT, VIJAYAWADA HAS TAKEN UP THE CASE FOR REVISION AND FOUND THAT THE AO HAS NOT EXAMINED CERTAIN ISSUES PROPERLY AT THE TIME OF MAKING THE ASSESSMENT AS UNDER: (I) THE ASSESSEE HAS PURCHASED A HOUSE ON 15.12.2006 VIDE REGISTERED DOCUMENT NO.15297/2006 ADMEASURING 255 SQ.YARDS AT D.NO.11 - 54 - 1 1 & 12, GUDIVADAVARI STREET, VIJAYAWADA FOR A CONSIDERATION OF RS.45,50,000/ - INCLUDING STAMP DUTY AS AGAINST THE 4 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA SRO VALUE OF RS.59,60,000/ - AND THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME DULY REFLECTING THE ABOVE TRANSACTION. (II) THE ASSESSEE HAS OBTAI NED A LOAN FROM REPCO BANK, SESHADRI SASTRY STREET, GOVERNORPET, VIJAYAWADA AND THE ASSESSEE HAS REPAID THE ENTIRE LOAN ON 06.07.2009 AS PER BREAK UP AS UNDER : (III) THE LD.PR.CIT OBSERVED THAT THE PROPERTY PURCHASED ON 15.12.2006 AS AGAINST THE LOAN SANCTIONED ON 04.01.2007 WHICH WAS AFTER ACQUISITION OF THE PROPERTY AND THE PAYMENT WAS MADE BY WAY OF PAY ORDERS FROM TAMILNADU MERCANTILE BANK LTD. AND THIS ASPECT WAS NOT EXAMINED BY THE AO IN DETAIL WHILE FINALIZING THE ASSESSMENT. (IV) WITH REGARD TO THE SOURCE OF CONSTRUCTION OF THE BUILDING IN THE ABOVE SITE, THE ASSESSEE STATED TO HAVE OBTAINED THE LOAN OF RS.20,00,000/ - FROM TAMILNADU MERCANTILE BANK LT D., RS.7 LAKHS FROM THE SAME BANK TOWARDS BUSINESS LOAN AND RS.10 LAKHS AS ADVANCE FROM TENANTS. THE CONSTRUCTION OF THE NEW BUILDING WAS STARTED IN THE MONTH OF JANUARY, 2010. FROM THE ABOVE INFORMATION, THE LD.PR.CIT INFERRED THAT THE ASSESSEE HAS MADE UNEXPLAINED INVESTMENT IN PURCHASE OF THE PROPERTY FOR THE REASON THAT THE ASSESSEE HAS REPAID THE ENTIRE AMOUNT BORROWED FROM THE REPCO BANK WITHIN ONE YEAR. THE ASSESSE ES REPAYMENT CAPACITY IS COMMENSURATING WITH HIS ANNUAL INCOME. THEREFORE, THE LD.PR.CIT WAS OF THE VIEW THAT THE ASSESSEE HAS MADE UNEXPLAINED INVESTMENTS IN PURCHASE OF THE ABOVE PROPERTY. (V). DURING THE COURSE OF SURVEY, IT WAS OBSERVED BY THE AO THAT THE YEAR - WISE PROBABLE UNDISCLOSED IN COME OF THE ASSESSEE FOR THE FOLLOWING ASSESSMENT YEARS WOULD BE AS UNDER : FINANCIAL YEAR AMOUNT OF LOAN REPAID (IN RS.) 2007 - 08 4,71,586 2008 - 09 2,81,972 2009 - 10 20,79,822 5 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA ASST.YEAR THE P ROBABLE INCOME INCOME RETURNED 2007 - 08 1,06,79,115 NO ROI 2008 - 09 16,60,530 NO ROI 2009 - 10 31,41,045 1,59,880 2010 - 11 36,53,661 NO ROI T HE AO WHILE COMPLETING THE ASSESSMENT HAS NOT VERIFIED TH E ASPECT OF PROBABLE INCOME . (VI) DURING THE COURSE OF SURVEY, PRINTOUTS OF ACCOUNTS FOR THE CALENDAR YEARS 2008, 2009 AND 2010 WERE TAKEN FROM THE LAPTOP, IN WHICH ACCOUNTS RELATING TO M/S GHANTASALA MANIKYALA RAO CARDS WERE ALSO INCLUDED, BUT IN THE SURVEY FINAL REPORT DATED 29.11.2010, THERE WAS NO MENTION ABOUT THE ACCOUNTS OF THE ASSESSEE CONCERN FOR THE CALENDAR YEARS 2009 AND 2010 RELEVANT TO THE FINANCIAL YEAR 2009 - 10 WHICH IS RELEVANT TO THE ASSESSMENT YEAR 2010 - 11. THE AO HAS NEITHER RECONCILED THE ACCOUNTS MAINTAINED BY THE ASSESSEE FIRM IN THE LAPTOP NOR CONSIDERED FOR THE PURPOSE OF ASSESSMENT. 3.1 ACCORDINGLY T HE LD.PR.CIT ISSUED THE SHOW CAUSE NOTICE CALLING FOR EXPLANATION OF THE ASSESSEE AND THE ASSESSEE FILED HIS EXPLANATION STATING AS UNDER: AS PER SHOW CAUSE NOTICE PARA NO.3, I REQUEST YOUR KIND PERUSAL THAT THE ASSESSEE IS THE BUYER, NOT THE SELLER OF THE PROPERTY, PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT, 1961 IS NOT APPLICABLE AND FURTHER THE ASSESSEE FILED THE RETURN OF INCOME FOR THE ASST.YEAR 2007 - 08 ON 12.01.2009 AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS EXPLAINED ALL THE SOURCES FOR PURCHASE OF THE PROPERTY FOR RS.45,50,000/ - , THE PROPERTY PURCHASED ON 1 5 - 02 - 2006, RELEVA NT TO THE ASST. YEAR 2007 - 08 THE SCRUTINY ASSESSMENT WAS COMPLETED AFTER THOROUGH VERIFICATION AND THE ASSESSEE FILED THE RECEIPTS AND PAYMENTS A/C WITH SOURCES BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND FINALIZED THE ORDE R. 6 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA THERE IS NO UN - EXPLAINED INCOME INVESTED EITHER FOR PURCHASE OF PROPERTY OR FOR CONSTRUCTION OF PROPERTY, FOR WHICH, THE ASSESSEE HAS ALREADY FILED THE RECEIPTS AND PAYMENT A/C RELEVANT TO ALL THE ASSESSMENT YEARS DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HEREWITH ENCLOSING THE RECEIPTS AND PAYMENTS A/C FOR ALL THE YEARS. THE RECEIPTS AND PAYM ENTS WHICH WAS FILED BEFORE THE ASSESSING OFFICER INCLUDES ALL THE SOURCES FOR CONSTRUCTIONS, BY COVERING ALL THE BANK CREDITS INCLUDING R EPCO BANK, THE ASSESSEE EXPLAINED D U RING THE COURSE OF SCRUTINY PROCEEDINGS FOR THE RECEIPTS AND SOURCES, THE ASSESSING OFFICER ACCEPTED THE SAME. WITH REGARD TO REPAYMENT OF LOAN MENTIONED IN THE TABLE GIVEN IN PARA NO.3.1 OF THE SHOW CAUSE NOTICE GIVEN, THE ASSESSEE HAS ALREADY PROVED HIS PAYMENT CAPACITY OF EACH AND EVERY AMOUNT, DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF ASST. YEAR 2007 - 08, A . Y 2008 - 09 AND A Y 2009 - 10 AND ALSO PARA NO - 3 OF SECTION 143(3) ORDER PASSED BY THE ASSESSING OFFICER FOR THE A.Y . 2010 - 1 1 INCLUDES THE BANK ACCOUNTS WITH THE REPAYMENTS. AS STATED IN PA R A N0.3.2 O F THE SHOW CAT/SE NOTICE GIVEN, IT IS NOT CORRECT THAT THE ASSESSEE HAS PROBABLE UNDISCLOSED INCOME AND IT IS BASELESS, IT IS ONLY A HYPOTHECATED FIGURES, AS ALREADY EXPLAINED, THE LAPTOP BELONGS TO THE PART TIME ACCOUNTANT AND NOT THE ASSESSEE AND IN THE LAPTOP MANY ASSESSEE'S INFORMATION WILL BE AVAILABLE LAND FURTHER THE LAPTOP WAS NOT SEIZED BY THE DEPARTMENT. THE LD.PR.CIT CONSIDERED THE ABOVE EXPLANATION OF THE ASSESSEE BUT NOT CONVINCED WITH THE EXPLANATION AND HELD THAT THE ASSESSMENT ORDER FRAMED BY THE AO U/S 143(3) WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, ACCORDINGLY SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE 7 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA AO TO REDO THE ASSESSMENT AFRESH AFTER VERIFYING THE ABOVE ISSUES IN ACCORDANCE WITH LAW. 4. AGGRIEVED BY THE ORDER OF THE LD.PR.CIT, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. DURING THE APPEAL HEARING, THE LD.AR ARGUED , THAT A SURVEY U/S 133A WAS CONDUCTED IN THE BUSINESS PREMISE S OF THE A S SESSEE ON 21.10.2010 AND DURING THE COURSE OF SURVEY , THE AO FOUND SOME MATERIAL AND CONSEQUENTLY REOPENED THE ASSESSMENT U/S 147 TO EXAMINE THE EVIDENCES GATHERED DURING THE COURSE OF SURVEY. IN THE REASSESSMENT PROCEEDINGS, THE ASSESSEE FURNI SHED ALL THE DETAILS I.E. SOURCES FOR REPAYMENT OF BANK LOANS, PROOF FOR MUNICIPAL TAXES PAID, RECEIPTS AND PAYMENTS ACCOUNTS ETC. AND COMPLETED THE ASSESSMENT AFTER GOING THROUGH THE ENTIRE INFORMATION FURNISHED AT THE TIME OF ASSESSMENT . AS EVIDENCED FR OM PARA NO.4 OF THE ASSESSMENT ORDER, THE AO CALLED FOR THE SOURCES FOR CONSTRUCTION OF THE BUILDING AND AFTER DUE VERIFICATION OF THE DETAILS SUBMITTED, MADE THE ADDITION OF RS.1,00,000/ - . THE LD.AR FURTHER SUBMITTED THAT THE ASSESSEE IS NOT MAINTAINING T HE REGULAR BOOKS OF ACCOUNTS AND THE PART TIME ACCOUNTANT HAS MAINTAINED SOME DETAILS IN HIS LAPTOP ALONG WITH THE ACCOUNTS OF OTHER CUSTOMERS AND THE LAPTOP FOUND 8 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA DURING THE COURSE OF SURVEY WAS NOT BELONGING TO THE ASSESSEE AND BELONGED TO THE PART TIME ACCOUNTANT . THE SAID THE LAPTOP WAS NEITHER IMPOUNDED BY THE DEPARTMENT NOR RECORDED ANY STATEMENT FROM THE PART TIME ACCOUNTANT WHO WAS THE OWNER. THOUGH THE DEPARTMENT HAS EXTRACTED THE PRINTOUTS FROM THE LAPTOP, THE SAME WE RE NOT RELATED TO THE BU SINESS OF THE ASSESSEE . T HE ASSESSEE HAS DENIED THE CONTENTS OF THE PRINTOUTS TAKEN FROM THE LAPTOP. THE LD.AR FURTHER SUBMITTED THAT THE L APTOP OF THE ACCOUNTANT CONTAIN THE INFORMATION OF OTHER CLIENTS OF THE ACCOUNTANT ALSO. AS ALREADY STATED EARLIER, THE ASSESSEE IS NOT MAINTAINING THE BOOKS OF ACCOUNTS AND HAS OFFERED INCOME ON ESTIMATION BASIS AS PER SECTION 44AF OF THE ACT. THUS ARGUED THAT THE LD.PR.CIT DID NOT GIVE ANY FINDING HOW THE ASSESSMENT ORDER WA S ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, EXCEPT MAKING SOME PASSING REMARKS OF IMPROPER VERIFICATION WHICH WAS NOT TRUE, HENCE THE ORDER PASSED BY THE LD.PR.CIT REQUIRED TO BE QUASHED. 5 . THE LD.AR FURTHER SUBMITTED THAT THE LD.PR.CIT HAS ISSUED SH OW CAUSE NOTICE RAISING THE FOLLOWI NG ISSUES. (I) FIRSTLY, THE LD.PR. CIT HAS RAISED THE ISSUE WITH REGARD TO THE PURCHASE OF PROPERTY ADMEASURING 255 SQ.YARDS AT GUDIVADAVARI S TREET, 9 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA VIJAYAWADA FOR A CONSIDERATION OF RS.45,50,000/ - .THE SAID HOUSE WAS PURCHASED IN THE ASSESSMENT YEAR 2007 - 08 AND EXPLAINED THE SOURCES BEFORE THE AO, FOR THE ASSESSMENT YEAR 2007 - 08 AND THE ASSESSMENT WAS COMPLETED U/S 143(3), HENCE THERE IS NO RELEVANCE FOR TAKING UP THE CASE FOR REVISION U/S 263. (II) THE SECOND ISSUE FOR TAKING UP THE CASE FOR REVISION WA S THE REPAYMENT BANK LOAN AV A ILED FROM REPCO BANK. THE ASSESSEE HAS FURNISHED THE COMPLETE DETAILS BEFORE THE AO, WITH REGARD TO THE BANK LOAN, SOURCES FOR REPAYMENT OF BANK LOAN ETC. AND THE AO HAS VERIFIED THE ENTIRE INFORMATION FURNISHED BY THE ASSESSE E AT THE TIME OF REASSESSMENT PROCEEDINGS AND AFTER COMPLETE SATISFACTION REGARDING THE SOURCES FOR REPAYMENT, THE ASSESSMENT WAS COMPLETED . H ENCE, THERE IS NO ERROR IN THE ASSESSMENT ORDER FRAMED BY THE AO. THUS, THERE IS NO CASE FOR REVISION U/S 263. (III) THE 3 RD ISSUE RAISED BY THE LD.PR.CIT WAS WITH REGARD TO MISMATCH OF DATES FOR PAYMENT OF CONSIDERATION FOR PURCHASE OF HOUSE AT GUDIVADAVARI STREET, VIJAYAWADA WHICH WAS EXPLAINED TO THE AO IN THE ASSESSMENT PROCEEDINGS FOR THE A.Y.2007 - 08 AND FURNI SHED THE COMPLETE INFORMATION WITH REGARD TO DATES OF PAYMENT , SOURCES ETC. THE ISSUE IS NOT RELEVANT OR 10 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA RELATED TO THE IMPUGNED ASSESSMENT YEAR, THEREFORE, ARGUED THAT THERE IS NO CASE FOR REVISION U/S 263. (IV) THE 4 TH ISSUE WAS PROBABLE UNDISCLOSED INC OME FOR THE ASSESSMENT YEARS. THIS WAS NEITHER ADMITTED BY THE ASSESSEE NOR ANY EVIDENCE FOUND DURING THE COURSE OF SURVEY. THIS IS A PURE GUESS WORK OF THE LD.PR.CIT AND THE LD.PR.CIT CANNOT TAKE UP THE CASE FOR REVISION U/S 263 ON GUESS WORK. (V) THE LA ST ISSUE WAS THE PRINT OUTS TAKEN FROM THE LAPTOP. THE ASSESSEE HAS DENIED THAT THE PRINTOUTS BELONGED TO THE ASSESSEE AND STATED THAT THE ASSESSEE HAS NEVER MAINTAINED THE BOOKS OF ACCOUNTS AND ADMITTED THE INCOME ON ESTIMATION BASIS AS PER SECTION 44AF OF THE ACT. THE ASSESSEE ALSO STATED THAT THE ASSESSEES TURNOVER NEVER EXCEEDED THE LIMIT OF 44AF. THE EXTRACTS WERE TAKEN FROM THE LAPTOP BELONGING TO THE PART TIME ACCOUNTANT WHO HAS MAINTAINED THE BOOKS OF ACCOUNTS OF OTHER CUSTOMERS AND ARGUED THAT THE EXTRACTS TAKEN FROM THE LAPTOP DOES NOT BELONG TO THE ASSESSEE, HENCE NO EVIDENTIARY VALUE. THUS , THE LD.AR ARGUED THAT THE LD.PR.CIT HAS COMMITTED BLATANT ERROR IN REVISING THE ASSESSMENT ORDER AND REQUESTED TO QUASH THE ORDER PASSED U/S 263 AND RE STORE THE ORDER OF THE AO. 11 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA 6. ON THE OTHER HAND, THE LD.DR SUPPORTED THE ORDERS OF THE LD.PR.CIT AND ARGUED THAT THE ASSESSEE IS MAINTAINING THE ACCOUNTS IN THE LAPTOP WHICH IS EVIDENCED FROM THE STATEMENT RECORDED FROM THE ASSESSEE, THEREFORE, THE LD.PR. CIT HAS RIGHTLY TAKEN UP THE CASE FOR REVISION WHICH SHOULD BE UPHELD. THE LD.D R STRONGLY RELIED ON THE ORDER OF LD.PR.CIT. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PACED ON RECORD. IN THIS CASE, A SURVEY U/S 133A WAS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE AND CONSEQUENT TO THE SURVEY CONDUCTED, THE AO REOPENED THE ASSESSMENT BY ISSUE OF NOTICE U/S 148 AND COMPLETED THE ASSESSMENT U/S 143(3) ON TOTAL INCOME OF RS.4,50,000/ - . SUBSEQUENTLY, THE LD.PR.CIT HAS TAKEN UP THE CASE FOR REVISION U/S 263. THE LD.PR.CIT HAS RAISED THE ISSUE FIRSTLY, WITH REGARD TO THE PURCHASE OF HOUSE ON 15.12.2006 WITH DOOR NO.11 - 54 - 11&12 AT GUDIVADAVARI STREET, VIJAYAWADA ADMEASURING 255 SQ.YARDS FOR A CONSIDERATION OF RS.45,50,000/ - . THE ASSESSEE EXPLAINED THAT THE HOUSE WAS PURCHASED IN THE F.Y.2006 - 07 RELEVANT ASSESSMENT YEAR 2007 - 08 AND THE ASSESSMENT WAS COMPLETED U/S 143(3) AFTER VERIFYING THE SOURCES. THE ISSUE WITH REGARD TO THE PURCHASE OF HOUSE AT GUDIVADAVARI STREET, VIJAYAWADA WAS RELA TING TO THE ASSESSMENT 12 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA YEAR 2007 - 08, BUT NOT RELATED TO THE IMPUGNED ASSESSMENT YEAR 2010 - 11. HENCE, THE MATERIAL RELIED UPON BY THE LD.PR.CIT IS IRRELEVANT AND THERE IS NO CASE FOR TAKING UP THE CASE FOR REVISION U/S 263 ON THIS ISSUE. 7.1. THE SECOND ISS UE LEADING TO TAKING UP THE CASE FOR REVISION WAS THE MISMATCH OF DATES FOR PAYMENT OF CONSIDERATION IN RESPECT OF PURCHASE OF HOUSE PROPERTY IN GUDIVADAVARI STREET, VIJAYAWADA. ACCORDING TO THE LD.PR.CIT, THE REGISTRATION TOOK PLACE ON 15.12.2006 AND THE LOAN WAS GRANTED BY TAMILNADU MERCANTILE BANK ON 04.01.2007. THE PAYMENT WAS PRECEDED BY THE BANK LOAN, THEREFORE, THE LD.PR.CIT WAS OF THE VIEW THAT THE SOURCES FOR ACQUIRING THE HOUSE REMAINED UN EXPLAINED. THIS ISSUE ALSO RELA TED TO THE ASSESSMENT YEAR 2 007 - 08, BUT NOT RELATED TO THE ASSESSMENT YEAR UNDER CONSIDERATION. HENCE, THE LD.PR.CIT IS NOT PERMITTED TO INVOKE JURISDICTION U/S 263 FOR EXAMINATION OF THE ISSUES RELATING TO THE EARLIER ASSESSMENT YEAR S OF 2007 - 08 AND 2008 - 09 IN THE IMPUGNED ASSESSME NT YEAR OF 2010 - 11. 7.2. THE 3 RD ISSUE FOR TAKING UP THE CASE FOR REVISION U/S 263 WAS THE REPAYMENT OF REPCO BANK LOAN AND SOURCES FOR REPAYMENT. AS EVIDENCED FROM THE ASSESSMENT ORDER PARA NO.3, ASSESSEE FURNISHED THE COMPLETE DETAILS WITH REGARD TO THE BANK LOANS, DEPOSITS AND SOURCES BEFORE THE AO 13 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA WHICH WAS EXAMINED BY THE AO AND ACCEPTED THE SOURCES FOR REPAYMENT OF LOAN AS GENUINE AND NO ADDITION WAS MADE. THEREFORE, REEXAMINATION OF SAME ISSUES WHICH WAS CONSIDERED AT THE TIME OF ASSESSMENT WOULD AMOUNT TO DIFFERENCE OF OPINION AND DOES NOT MAKE THE ASSESSMENT ERRONEOUS. THEREFORE, THE ISSUE RAISED BY THE LD.PR.CIT WITH REGARD TO VERIFICATION OF THE SOURCES OF THE REPAYMENT OF BANK LOAN ALSO CANNOT B E A VALID REASON FOR INVOKING THE JURISDICTION U/S 263. HONBLE HIGH COURT OF KARNATAKA IN COMMIS SIONER OF INCOME - TAX, BANGALORE V S . KURLON LTD, [2014] 52 TAXMANN.COM 92 (KARNATAKA) HELD THAT WHERE ASSESSING AUTHORITY HAD ALREADY CONSIDERED ALL DETAILS MENTIONED IN COMPUTATION STATEMENT WHICH WAS TAKEN FROM BOOKS OF ACCOUNT MAINTAINED BY ASSESSEE, REVISION WAS NOT JUSTIFIED . SIMILAR VIEW HAS BEEN EXPRESSED BY THIS TRIBUNAL IN G.V.R ASSOCIATES VS ITO REPORTED IN (2017) 49 CCH 0223 VISAKAPATANAM. 7.3. THE 4 TH ISSUE RAISED BY THE LD.PR.CIT WAS THE PROBABLE UNDISCLOSED INCOME ESTIMATED BY THE LD.PR.CIT AT RS.36,53,661/ - FOR THE ASSESSMENT YEAR 2010 - 11. THOUGH THE ASSESSEE HAS FILED THE RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR, THE LD.PR.CIT HAS STATED IN HIS NOTICE, THAT NO RETURN OF INCOME WAS FILED BY THE ASSESSEE WHICH SHOWS THAT THE LD.PR.CIT HAS NOT COMPLETELY VERIFIED THE FACTS AND LANDED IN CONCLUSION IN HASTE. IN 14 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA THIS CASE, THE AS SESSEE HAS ALREADY FILED THE RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 29.02.2011 MUCH BEFORE THE ISSUE OF NOTICE U/S 263. THE AO COMPLETED THE ASSESSMENT AFTER VERIFYING THE TURNOVER IN VAT RETURNS AND BANK ACCOUNT DETAILS AND ACCEPTED TURNOVER AND THE ESTIMATION OF INCOME AS PER SECTION 44AF OF THE ACT. THE LD.PR.CIT HAS NOT GIVEN ANY BASIS FOR THE PROBABLE UNDISCLOSED INCOME. IT DOES NOT EMANATE FROM THE ASSESSMENT ORDER OR FROM THE MATERIAL FOUND DURING THE COURSE OF SURVEY. THE LD.PR.CIT/ THE L D DR COULD NOT ESTABLISH THE BASIS FOR THE PROBABLE INCOME OF THE ASSESSEE ESTIMATED BY THE LD.PR.CIT. THEREFORE, IT SHOWS THE GUESS WORK OF THE LD.PR.CIT, HENCE, THE SAME CANNOT BE A BASIS FOR REVISION U/S 263. THIS VIEW IS SUPPORTED BY THE DECISION OF HONBLE ITAT DELHI (SPECIAL BENC H) IN THE CASE OF BABU LAL GRAND SON FAMILY TRUST VS. ITO REPEATED IN 31 ITD 52 DELHI. 7.4. THE 5 TH ISSUE WAS THE PRINTOUTS TAKEN FROM THE LAP TOP DURING THE COURSE OF SURVEY. THE LD.PR.CIT OBSERVED THAT THE PRINTOUTS OF ACCOUNTS FOR THE CALENDAR YEARS 2008, 2009 AND 2010 WERE TAKEN FROM THE LAPTOP AND IT WAS OBSERVED FROM THE SAID EXTRACTS, THAT THE A CCOUNTS RELATING TO GHANTASALA MANIKYALA RAO CARDS PERTAINING TO THE ASSESSEE WERE ALSO INCLUDED. THE LD.PR.CIT FOUND THAT THE AO HAS NEITHER RECONCILED THE 15 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA ACCOUNTS NOR EXAMINED WITH REFERENCE TO THE BOOKS OF ACCOUNTS FOR THE PURPOSE OF ASSESSMENT WHILE COMPLETING THE ASSESSMENT. THE ASSESSEE DENIED OWNERSHIP OF THE EXTRACTS TAKEN FROM THE LAPTOP STATING THAT THE LAPTOP DOES NOT BELONG TO THEIR FIRM A T THE TIME OF SURVEY ITSELF . THE LAPTOP WAS NEITHER SEIZED, NO STATEMENT WAS RECORDED FROM THE PART TIME A CCOUNTANT. HAVING DENIED THE CONTENTS OF THE EXTRACTS OF THE LAPTOP BELONGING TO THE ASSESSEE, IT IS FOR THE REVENUE TO ESTABLISH THAT THE CONTENTS DO BELONG ED TO THE A S SESSEE. THE FACT THAT THE LAPTOP DOES NOT BELONG TO THE ASSESSEE WAS NOT DISPUTED BY T HE AO. THE CONTENTION OF THE ASSESSEE THAT THE PART TIME ACCOUNTANT MAINTAINED THE BOOKS OF ACCOUNTS OF MANY OTHER CUSTOMERS WAS ALSO NOT DISPUTED. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE STATED THAT THE ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOU NTS AND ADMITTED THE INCOME AS PER SECTION 44AF OF THE ACT. THE AO HAS NOT BROUGHT ON RECORD ANY MATERIAL TO ESTABLISH THAT THE TURNOVER RECORDED IN THE COMPUTER EXTRACT BELONGED TO THE ASSESSEE BY COMPARING THE CONTENTS OF THE PRINTOUTS OF THE ASSESSEE WITH THE ENTRIES IN THE BOOKS OF ACCOUNTS OR WITH THE INFORMATION FOUND DURING THE COURSE OF SURVEY. THE ENTIRE SURVEY MATERIAL WAS AVAILABLE WITH THE AO AT THE TIME OF ASSESSMENT AND THE CASE WAS REOPENED FOR VERIFICATION OF THE MATERIAL FOUND DURING THE COURSE OF 16 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA SURVEY, AND THE AO HAS COMPLETED THE ASSESSMENT AFTER EXAMINING THE ENTIRE DETAILS AVAILABLE WITH THE AO. SIMILAR ISSUE OF EXTRACT OF PRINT OUTS HAS COME UP BEFORE THE AO FOR THE A.Y. 2008 - 09 AND 2009 - 10 AND THE AO MADE THE ADDITION. ON APPEAL, THE LD.CIT(A) DELETED THE ADDITION AND GIVEN A FINDING THAT THE AO HAS NOT BROUGHT ON RECORD ANY COGENT MATERIAL TO STRENGTHEN THE DEPARTMENT VIEW TO HOLD THAT THE CONTENTS OF THE COMPUTER PRINTOUTS RELATED T O THE BUSINESS OF THE ASSESSES, VIDE LD.CIT(A), VIJAYAWADA ORDER NO. IN APPEAL NO. 428, 421/VJA/CIT(A)/2011 - 12 DATED 22.04.2013. IN THE SE FACTS AND CIRCUMSTANCES, SINCE THE DEPARTMENT HAS FAILED TO BRING ANY EVIDENCE TO HOLD THAT THE PRINTOUTS OF COMPUTER RELATED TO THE BUSINESS OF THE ASSESSEE, WE AR E UNABLE TO UPHOLD THE ORDER OF THE LD.PR.CIT ON THIS ISSUE. 8. THE LD.PR.CIT HAS MADE A PASSING REMARK THAT THE AO HAS NOT CONSIDERED THE ISSUES RAISED IN THE SHOW CAUSE NOTICE, BUT NO SPECIFIC FINDING WAS GIVEN BY THE LD.PR.CIT TO HOLD THAT THE ASSE SSMENT MADE U/S 143(3) RESULTED IN UNDER ASSESSMENT. THE PR.CIT DID NOT MAKE OUT CLEAR CASE HOW THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. AS OBS ERVED FROM THE ASSESSMENT ORDER AND THE MATERIALS PLACED BEFORE US THE AO HAS EXAMINED ALL THE ISSUES RELATED TO THE ASSESSMENT 17 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA YEAR WHICH WERE RAISED BY THE LD.PR.CIT IN THE SHOW CAUSE NOTICE EXCEPT THE PROBABLE UNDISCLOSED INCOME WHICH WA S NOT BASED ON ANY EVIDENCE OR ANY INFORMATION. SIMILARLY, THERE IS NO EVIDENCE TO ES TABLISH THAT THE PRINTOUTS OR EXTRACTS TAKEN FROM THE LAPTOP BELONGED TO THE ASSESSEE. THE AO HAS NOT RECORDED THE STATEMENT FROM THE PART TIME ACCOUNTANT OR THE OWNER OF THE LAPTOP AND THE SAID LAPTOP WAS ALSO NOT IMPOUNDED. HAVING IMPOUNDED THE MATERIA L, THE DEPARTMENT HAS NOT BROUGHT ON RECORD , TO ESTABLISH THAT THE AO HAS NOT EXAMINED THE INFORMATION EXTRACTED FROM THE LAPTOP. AS PER THE ORDER U/S 263 , THE LD.PR.CIT INVOKED THE JURISDICTION U/S 263 FOR NOT EXAMINING THE CERTAIN ISSUES PR OPERLY. NON EXAMINATION OF THE ISSUES PROPERLY WOULD LEAD TO INADEQUATE ENQUIRY BUT NOT LACK OF ENQUIRY. LACK OF INQUIRY IS A GOOD REASON FOR REVISION U/S 263, BUT NOT THE INADEQUATE INQUIRY. THIS VIEW IS SUPPORTED BY THE DECISION OF THIS TRIBUNAL IN VE GESINA KOMALA VS. ITO, PALAKOL IN (2016) 66 TAXMANN.COM 280. IN THE ABOVE FACTS AND CIRCUMSTANCES, WE HOLD THAT THE ORDER PASSED BY THE AO COULD NOT BE HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, ACCORDINGLY , WE SET ASIDE THE ORDER PA SSED U/S 263 AND RESTORE THE ASSESSMENT ORDER. THE APPEAL OF THE ASSESSEE IS ALLOWED. 18 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA ITA 33/VIZ/2017, A.Y.2011 - 12 8. FOR THE ASSESSMENT YEAR 2011 - 12, THE ASSESSEE FILED RETURN OF INCOME ON 29.02.2011 ADMITTING TOTAL INCOME OF RS.1,41,580/ - . THE ASSESSMENT WAS COMPLETED TOTAL I NCOME OF RS.2,58,280/ - BY ORDER U/S 143(3) R.W.S 147 BY AN ORDER DATED 18.03.2014. 9. THE LD.PR.CIT HAS TAKEN UP THE CASE FOR REVISION OBSERVING THAT DURING THE COURSE OF SURVEY, INVENTORY OF PHYSICAL STOCK WAS TAKEN PERTAI NING TO THE ASSESSEES PROPRIETARY CONCERN, M/S GHANTASALA MANIKYALA RAO CARDS AND I N THE PRELIMINARY REPORT DATED 22.10. 2010, IT WAS REPORTED BY THE AO THAT THE INVENTORY OF STOCK WAS UNDER RECONCILIATION. BUT IN THE FINAL REPORT DATED 29.11.2010, THERE WAS NO MENTION ABOUT THE RECONCILIATION OF THE STOCK FOUND. WHILE COMPLETING THE ASSESSMENT THE VALUE OF THE PHYSICAL STOCK FOUND ON THE DATE OF SURVEY WAS NEITHER QUANTIFIED NOR RECONCILED WITH REFERENCE TO THE BOOKS OF ACCOUNT S AND CONSIDERED FOR THE PURPOSE OF ASSESSMENT. 9.1. THE SECOND ISSUE IN THE NOTICE U/S 263 RELATES COST OF CONSTRUCTION OF THE HOUSE AT VIJAYAWADA. THE ASSESSEE CONSTRUCTED A TWO STORIED BUILDING (G+2) AT D.NO.11 - 52 - 12, GUDIVADAVARI STREET, 19 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA VIJ AYAWADA ON A SI TE ADMEASURING 25 5 SQ YARDS AFTER DEMOLISHING THE OLD HOUSE. IT WAS ALSO NOTICED THAT THE CONSTRUCTION WAS UNDERTAKEN DURING THE FINANCIAL YEARS 2009 - 10 AND 2010 - 11. IN THE SURVEY FINAL REPORT IT WAS MENTIONED THAT THE PROPERTY WAS REFERRED TO THE VALUATIO N CELL FOR ASCERTAINING THE CORRECT VALUE OF CONSTRUCTION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE ADMITTED THE COST OF CONSTRUCTION AT RS.37,94,000/ - AND EXPLAINED THE SOURCES THEREOF. DETAILS OF PLINTH AREA, BASIS FOR ARRIVING THE COST OF CONSTRUC TION AT RS.37,94,000/ - ETC. WAS NEITHER ASCERTAINED NOR VERIFIED. 9.2. THE THIRD ISSUE FOR INVOKING THE JURISDICTION U/S 2 63 WAS THE DISALLOWANCE OF AN AMOUNT OF RS.1,11,096/ - BEING INTEREST ON TERM LOAN ACCOUNT (A/C NO.097700509004310 HELD WITH TMB LTD) FOR NOT UTILIZING THE LOAN FOR THE PURPOSE OF CONSTRUCTION. THE LD.PR.CIT OBSERVED FROM THE DETAILS OF CONSTRUCTION ACCOUNT FURNISHED BY THE ASSESSEE TH AT A SUM OF RS.5,00,000/ - WAS WITHDRAWN FROM THE AFORESAID BANK ACCOUNT ON 05 - 04 - 2010 FOR THE PURPOSE OF CONSTRUCTION. WHEN THE AO DISALLOWED THE INTEREST ON LOAN ON THE REASON OF NON - UTILIZATION OF FUNDS FOR CONSTRUCTION PURPOSE, THE AO 20 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA SHOULD HAVE M ADE THE ADDITION TOWARDS UNEXPLAINED INVESTMENT IN CONSTRUCTION. 9.3. THE 4 TH ISSUE WAS THE PRINTOUTS OF ACCOUNTS FOR THE CALENDAR YEARS 2008, 2009 AND 2010 WERE TAKEN FROM THE LAPTOP. AS SEEN FROM THE SAID EXTRACTS, ACCOUNT RELATING TO M/S. GHANTSALA MANIKYALA RAO CARDS ARE ALSO INCLUDED. WHILE COMPLETING THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION, THE ACCOUNTS OF THE FIRM MAINTAINED IN THE LAPTOP RELATING TO THE PERIOD FOR FIN ANCIAL YEAR 2010 - 11 WERE NEITHER RECONCILED WITH REFERENCE TO THE BOOKS OF ACCOUNT NOR CONSIDERED FOR THE PURPOSE OF ASSESSMENT. 9.4 . THE LD.PR.CIT HAS ISSUED SHOW CAUSE NOTICE WITH THE ABOVE DISCREPANCIES AND THE ASSESSEE FILED REPLY AS UNDER : AS PER SHOW CAUSE NOTICE PARS NO3, THE ASSESSEE ADMITTED THE TURNOVER AND FILED THE RETURN OF INCOME U/S.44AF AFTER DULY RECONCILING THE PHYSICAL STOCK WITH VAT RETURNS. AS PER SHOW CAUSE NOTICE PARA NO.3.1, THE COST OF CONSTRUCTION ADMITTED BY THE ASSESSEE WAS ACTUAL AND REASONABLE COMPARED TO PREVAILING MARKET RATES OF THE CONSTRUC TION AND THE CONSTRUCTION MADE FOR SHOP PURPOSE. AN AMOUNT OF RS.1,11,096/ - WAS CLAIMED TOWARDS INTEREST ON BUILDING LOAN U/S 24(1) WAS DISALLOWED BY THE ASSESSING OFFICER DUE TO NON - PRODUCTION OF EVIDENCE, MERE DISALLOWANCE OF INTEREST 21 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA DOES NOT LEADS TO NON - INVESTMENT IN CONSTRUCTION AND HENCE THERE IS NO EX - EXPLAINED INVESTMENTS BY THE ASSESSEE, THE TERM LOAN WAS UTILIZED FOR REPAYMENT OF EARLIER LOANS TAKEN FOR CONSTRUCTION. THE LAPTOP BELONGS TO THE PART TIME ACCOUNTANT AND NOT THE ASSESSEE AND IN THE LAPTOP MANY ASSESSEE'S INFORMATION WILL BE AVAILABLE AND THE LAPTOP WAS NOT SEIZED BY THE DEPARTMENT AND FURTHER THE ASSESSEE FILED THE INCOME TAX RETURN CONSIDERING THE VAT RETURN. NOT BEING CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, THE LD.PR.CIT HELD THAT THE ASSESSMENT MADE U/S 143(3) WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDINGLY SET ASIDE THE ORDER WITH A DIRECTION TO REDO THE ASSESSMENT. 10. AGGRIEVED BY THE ORDER OF THE LD.PR.CIT, THE ASSESSEE IS IN APPEAL BEF ORE US. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. THE REVISION WAS TAKEN FOR THE PURPOSE OF VERIFICATION OF BOOKS OF ACCOUNTS MAINTAINED IN LAPTOP AND SUSPICION OF THE LD. PR.CIT WITH REGARD TO VERIFICATION OF RECEIPTS AND PAYM ENTS OF ACCOUNTS FOR CONSTRUCTION AND THE UTILISATION OF THE LOAN TAKEN FROM TAMILNADU MERCANTILE BANK LTD. 10.1. WITH REGARD TO THE EXTRACTS OF THE LAP TOPS IN THE ASSESSEES CASE FOR THE ASSESSMENT YEAR 2010 - 11, WE HAVE ALREADY HELD THAT HAVING DENIED TH E OWNERSHIP OF THE LAPTOP AND THE DENIAL OF THE CONTENTS OF THE PRINTOUT 22 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA EXTRACTS OF THE LAPTOP, THE ONUS IS ON THE REVENUE TO ESTABLISH THAT THE CONTENTS BELONGED TO THE ASSESSEE. AS DISCUSSED EARLIER, THE LD.CIT(A) ALSO FOR THE ASSESSMENT YEAR 2008 - 09 A ND 2009 - 10 IN APPEAL ORDER NO. 31/VIZ/2017 HA D ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THE CONTENTS OF THE LAPTOP DOES NOT BELONG TO THE ASSESSEE. THE ASSESSEE STATED THAT THE HE HAS NOT MAINTAINED THE BOOKS OF ACCOUNTS AND FILED THE RETURN OF INCOME ON ESTIMATION BASIS U/S 44AF. THE AO HAS ACCEP TED THE RETURN OF INCOME AFTER VERIFYING THE INFORMATION GATHERED DURING THE SURVEY. THEREFORE, ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE IN OUR ORDER FOR THE A.Y. 2010 - 11, HENCE FOLLOWING THE RULE OF CONSISTENCY, WE HOLD THAT THERE IS NO REASON FOR TAKI NG UP THE CASE FOR REVISION U/S 263 ON THIS ISSUE. 10.2 . THE SECOND ISSUE RAISED BY THE LD.PR.CIT WAS VERIFICATION OF RECEIPTS AND PAYMENT ACCOUNTS AS PER PARA NO.5 OF THE ORDER . THIS ISSUE HAS BEEN DISCUSSED BY THE AO IN PARA NO.3 OF THE ASSESSMENT ORDE R AND STATED THAT THE ASSESSEE HAS FURNISHED ALL BANK ACCOUNTS, SOURCES FOR REPAYMENT OF BANK LO AN COPIES OF BANK ACCOUNT ETC. A ND AFTER VERIFICATION OF THE SAME, THE ASSESSMENT WAS COMPLETED. THEREFORE, THE CONTENTION OF THE LD.PR.CIT WITH REGARD TO THE NON - VERIFICATION OF THE RECEIPTS AND PAYMENTS ACCOUNT IS 23 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA BASELESS ANDWOULD AMOUNT TO DIFFERENCE OF OPINION WHICH CANNOT MAKE THE ASSESSMENT AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 11. THE 1 ST ISSUE FOR REVISION U/S 263 , AS PER THE NOTICE U/S 263 IS WITH REGARD TO NON - RECONCILIATION OF SALES AND THE PHYSICAL STOCK FOUND DURING THE COURSE OF SURVEY IN THE PROPRIETARY CONCERN OF M/S GHANTASALA MANIKYALA RAO CARDS. ACCORDING TO THE LD.PR.CIT IN THE PRELIMI NARY REPORT SUBMI TTED BY THE AO SHOWS THE DISCREPANCY OF THE STOCK WHICH WAS UNDER RECONCILIATION , BUT THERE WAS NO MENTION IN THE FINAL REPORT WITH REGARD TO THE RECONCILIATION OF PHYSICAL INVENTORY FOUND AND THE AO DID NOT MAKE ANY ADDITION ON ACCOUNT OF DIFFERENCE OF STOCKS. DURING THE APPEAL HEARING, FOR A QUERY FROM THE BENCH, THE LD.AR SUBMITTED THAT NO SUCH COPIES OF SURVEY REPORTS WERE PROVIDED TO THE ASSESSEE. THE SURVEY REPORT IS AN INTERNAL REP ORT SUBMITTED BY THE AO IMMEDIATELY AFTER COMPLETION OF THE SURVEY TO HIS HIGHER AUTHORITIES. THE COPIES OF SURVEY REPORTS ARE NOT PROVIDED TO THE ASSESSEES. THAT WAS INTERNAL CORRESPONDENCE OF THE DEPARTMENT BUT NOT A DOCUMENT USED IN THE ASSESSMENT PROC EEDINGS. THEREFORE, THE CONTENTS OF THE SURVEY REPORT ARE IRRELEVANT FOR TAKING UP THE CASE FOR REVISION U/S 263. IN THIS CASE, THE ASSESSEE SUBMITTED BEFORE THE AO THAT THE ASSESSEE IS 24 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA NOT MAINTAINING THE BOOKS OF ACCOUNTS AND OFFERED THE INCOME U/S 44 AF OF THE ACT WHICH THE AO HAD ACCEPTED AND COMPLETED THE ASSESSMENT. THE AO HAS NOT GIVEN ANY FINDING WITH REGARD TO EXCESS STOCK OR SHORTAGE OF STOCK DURING THE SURVEY PROCEEDINGS. O NCE THE ASSESSMENT IS COMPLETED ACCEPTING THE CONTENTION OF THE ASSESSE E U/S 44AF OF THE ACT, NON - RECONCILIATION OF THE STOCK TAKEN DURING THE COURSE OF SURVEY IS IRRELEVANT , AND CANNOT BE REASON FOR TAKING UP THE CASE FOR REVISION U/S 263. 11. 1 . THE 2 ND ISSUE FOR TAKING UP THE CASE FOR REVISION WAS THE COST OF CONSTRUCTI ON IN RESPECT OF THE TWO STORIED BUILDING AT DOOR NO.11 - 52 - 12, GUDIVADAVARI STREET, VIJAYAWADA. THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS SUBMITTED THE DETAILS OF COST OF CONSTRUCTION AND EXPENDITURE, AND THE SOURCES THERE OF. HOWEVER, THE LD.PR.CIT WAS OF THE VIEW THAT THE AO HAS NOT EXAMINED THE PLINTH AREA AND THE BASIS OF ARRIVING AT THE COST OF CONSTRUCTION AT 37.94 LAKHS. SUCH DETAILED EXAMINATION OF THE COST OF CONSTRUCTION CAN AT BEST BE SAID TO BE INADEQUATE INQUIRY BUT NOT LACK OF INQUIRY. ON THIS ISSUE ALSO, THE LD.PR.CIT HEAVILY PLACED RELIANCE ON THE SURVEY REPORT OF THE AO. AT THE COST OF REPETITION , WE ARE OF THE VIEW THAT THE SURVEY REPORT OF THE AO HAS NO RELEVANCE AND CANNOT BE TAKEN AS A 25 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA BASIS FOR TAKING THE ORDER AS ERRO NEOUS. FROM THE SHOW CAUSE NOTICE OF THE LD.PR.CIT AS WELL AS FROM THE DETAILS SUBMITTED BY THE ASSESSEE IN THE PAPER BOOK, IT IS ESTABLISHED THAT THE AO CALLED FOR THE DETAILS AND EXAMINED THE COST OF CONSTRUCTION AND THE SOURCES OF CONSTRUCTION. THEREFO RE, THERE IS NO CASE FOR REVISION U/S 263 ON THE ISSUE OF COST OF CONSTRUCTION OF THE BUILDING LOCATED AT GUDIVADAVARI STREET, VIJAYAWADA. 11. 3 . THE 3 RD ISSUE FOR TAKING UP THE CASE FOR REVISION U/S 263 WAS NON UTILISATION OF THE LOAN TAKEN FROM TAMILNADU MERCANTILE BANK LTD. THE AO HAD DISALLOWED THE INTEREST ON BANK LOAN, THEREFORE, THE PR.CIT VIEWED THAT THE AMOUNT OF RS.5,00,000/ - TAKEN AS LOAN ALSO SHOULD HAVE BEEN DISALLOWED AS UNEXPLAINED INVESTMENT. FROM PLAIN READING OF THE ASSESSMENT ORDER AND TH E DETAILS FURNISHED BY THE ASSESSEE, IT IS EVIDENCED THAT THE ASSESSEE HAS FURNISHED THE DETAILS WITH REGARD TO THE SOURCES OF CONSTRUCTION OF THE BUILDING WHICH WAS ACCEPTED BY THE AO. THERE IS NO FINDING GIVEN BY THE AO OR DISPUTED THE SOURCES FOR THE C ONSTRUCTION OF THE BUILDING. MERELY BECAUSE THE ASSESSEE HAS ACCEPTED THE ADDITION IT CANNOT BE INFERRED AGAINST THE ASSESSEE. THE ASSESSEE ALSO EXPLAINED THAT DUE TO EXIGENCIES , USAGE OF FUNDS WERE INTER CHANGED BETWEEN THE BUSINESS AND 26 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA CONSTRUCTION. BU SINESS FUNDS WERE USED FOR CONSTRUCTION AND VICE VERSA THE LOAN S. THEREFORE, ONCE THE ISSUE WAS CONSIDERED BY THE AO , THE PR.CIT CANNOT REVISIT THE SAME ISSUE AND TAKE A DIFFERENT OPINION UNLESS A SPECIFIC EVIDENCE WAS BROUGHT ON RECORD. REVISITING THE SAME ISSUE WHICH WAS EXAMINED BY THE AO WOULD AMOUNT TO DIFFERENCE OF OPINION, BUT DOES NOT GIVE SCOPE TO HOLD THE ASSESSMENT AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THEREFORE, THE THIRD ISSUE TAKEN UP BY THE PR.CIT ALSO CANNOT SURVIV E FOR REVISION U/S 263. 11.4 IN THIS CASE, THE ASSESSMENT WAS REOPENED UP FOR THE PURPOSE OF EXAMINING THE VARIOUS ISSUES FOUND DURING THE COURSE OF SURVEY. THE MATERIAL WAS IN THE POSSESSION OF THE AO . THOUGH THE AO DID NOT MAKE THE NOTING IN WRITING , MERELY BECAUSE NO NOTING WAS MADE IT CANNOT BE PRESUMED THAT THE AO FAILED TO EXAMINE THE ISSUES IN THE MATERIAL. THE LD.PR.CIT IN PARA NO.2 OF THE ORDER STATED THAT DUE TO CERTAIN ISSUES WERE NOT PROPERLY EXAMINED BY THE AO , THE CASE WAS TAKEN UP FOR RE VISION. I MPROPER VERIFICATION OF THE ISSUES WILL LEAD TO INADEQUATE ENQUIRY BUT NOT LACK OF ENQUIRY. THOUGH THE LACK OF ENQUIRY IS A CASE FOR REVISION, INADEQUATE ENQUIRY IS NOT A CASE FOR REVISION U/S 263. ITAT, VISAKHAPATNAM 27 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA IN THE CASE OF VEGESINA KOM ALA VS. ITO, WARD - 1, PALAKOL (SUPRA) HAS TAKEN THE SIMILAR VIEW FOLLOWING THE DECISION OF HONBLE HIGH COURT OF DELHI IN CIT VS. SUNBEAM AUTO LTD. (2010) 189 TAXMANN 436 (DELHI). THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE REVENUE DID NOT MAKE OUT A CASE FOR REVISION AND THERE WAS NO ERROR IN THE ORDER PASSED BY THE AO. HENCE, THE ORDER PASSED U/S 143(3) R.W.S. 147 IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD.PR.CIT AND ALLOW T HE APPEAL OF THE ASSESSEE. ITA NO.32/VIZ/2017, A.Y.2010 - 11 12. IN THIS CASE, T HE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.3,15,840/ - ON 29.02.2012. THE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 147 BY ORDER DATED 26.12.2013 ON TOTAL INCOME OF RS.3,80,500/ - . A SURVEY WAS CONDUCTED U/S 133A ON 21.10.2010 IN THE BU SINESS PREMISES OF THE ASSESSEE. DURING THE COURSE OF SURVEY, THE AO FOUND CERTAIN CASH DEPOSITS IN TAMILNADU MERCANTILE BANK AND SOME OTHER ISSUES. CONSEQUENT TO THE SURVEY CONDUCTED U/S 133A, THE AO ISSUED NOTICE U/S 148 AND COMPLETED THE REASSESSMENT. S UBSEQUENTLY, THE LD.PR.CIT FOUND THAT THE AO HAS NOT EXAMINED CERTAIN ISSUES PROPERLY, HENCE THE ASSESSMENT PASSED BY THE AO WAS CONSIDERED TO BE ERRONEOUS AND 28 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA PREJUDICIAL TO THE INTEREST OF THE REVENUE WITHIN THE SCOPE OF 263 OF THE ACT, HENCE, SHOW CAUSE NOTICE WAS ISSUED U/S 263 CALLING FOR THE OBJECTIONS OF THE ASSESSEE. THE LD.PR.CIT ISSUED NOTICE U/S 263 ON THE FOLLOWING ISSUES. 'DURING THE COURSE OF SURVEY OPERATIONS, COPIES OF CERTAIN LOOSE PAPERS WERE OBTAINED. AS PER PAGE NO32&33 OF SURVEY FOLDE R (LOOSE SHEET NOS, 14&15 AS MENTIONED IN THE STATEMENT), CERTAIN AMOUNTS WERE PAID TO DIFFERENT PERSONS TOTALING TO RS.9,43,500 (RS.262000+RS262500+RS.195000+RS.224000). WHEN ASKED FOR THE DETAILS OF THESE PAYMENTS, SRI G.V.RAMAN, VIDE HIS STATEMENT RECOR DED U/S.133A STATED THAT HE CANNOT SAY ANYTHING ABOUT IT. BUT, WHILE COMPLETING THE ASSESSMENT, THE SOURCE AND THE NATURE OF THE AFORESAID PAYMENTS WERE NEITHER ASCERTAINED FROM THE ASSESSEE NOR CONSIDERED FOR THE PURPOSE OF ASSESSMENT. 4. AS PER PAGE NO. 29 OF THE SURVEY FOLDER, DETAILS OF CERTAIN PROPERTIES WERE MENTIONED AS NOTED BELOW: 1. APARTMENT 2 BED ROOM COST RS.16,00,000 2. MONTHLY RENT RS.5,200 3. ADV A N CE RS.50,000 4. EVERY 3 YEARS, 15% ENHANCEMENT OF RENT (AGREEMENT FOR 10 YEARS) AT GOLLAPUDI RS.780 1. LANCO SIDE AREA 90 CENTS 2. 1 SQ. YARD 8000 3. TOTAL 4500 SQ.YARDS 1. GUNTUPALLI SITE AC.1.80 CENTS 2. ONE ACRE RS.1 CRORE 1. RTC LAYOUT AC.1.98 CENTS 2. EACH ACRE RS.75,00,000 29 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA IN THIS REGARD, SRI G.V.RAMAN, VIDE HIS STATEMENT RECORDED U/S. 133A ON 21 - 10 - 2010, HAS STATED THAT IT IS ESTIMATION O F FLAT RECEIVED FROM LOTUS AND WITH REGARD TO THE OTHER PROPERTIES, THERE WAS NO EXPLANATION FROM HIM. WHILE COMPLETING THE ASSESSMENT, THE SOURCES NATURE AND DETAILS OF THE PROP ERTIES WERE NEITHER ASCERTAINED NOR CONSIDERED FOR THE PURPOSE OF ASSESSMENT. 5. AT PAGE NO.20 OF THE SURVEY FOLDER, THERE WAS CONSTRUCTION ACCOUNT TOTALING TO RS.32,72,961 (AUGUST, 2009 AND SEPTEMBER, 2009, IT WAS STATED BY SRI G. V. RAMAN, IN HIS STATEMENT RECORDED U/S 133A IN RESPONSE TO QUESTION NO.7 THAT IT RELATES TO CONSTRUCTION. BUT HE DID NOT FURNISH THE DETAILS OF THE PROPERTY TO WHICH IT RELATES. WHILE COMPLETING THE ASSESSMENT, THE SOURCES AND DETAILS OF THE PROPERTY FOR WHICH CONSTRUCTIO N WAS UNDERTAKEN, WERE NEITHER ASCERTAINED NOR CONSIDERED FOR THE PURPOSE OF ASSESSMENT' 13. THE ASSESSEE FILED REPLY TO SHOW CAUSE NOTICE ISSUED BY THE LD.PR.CIT WHICH READS AS UNDER : DURING THE COURSE OR ASSESSMENT PROCEEDINGS THE ASSESSEE FILED THE RE CEIPTS AND PAYMENTS A/C AND EVERY INFORMATION/PAPERS ASKED BY THE AO AND AFTER THOROUGH EXAMINATION, THE ASSESSMENT WAS COMPLETED BY THE AO . DURING THE COURSE OF SURVEY OPERATIONS, THE ASSESSEE WAS QUESTIONED ABOUT CERTAIN AMOUNTS PAID TO DIFFERENT PERSONS, RESULTING A TOTAL AMOUNT OF RS. 9,43,500/ - WHICH IS AS PER LOSE SHEETS NO. 14&15, THESE AMOUNTS A RE ROUGH FIGURES/ESTIMATES ONLY AND NOT BELONGS TO THE ASSESSEE AND THE SAME WAS INFORMED TO THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PRO CEEDINGS AND SATISFIED BY THE ASSESSING OFFICER. AS PER SHOW CAUSE NOTICE AND AS PER PAGE NO.29 OF THE SURVEY FOLDER, THE ASSESSEE WAS QUESTIONED ABOUT CERTAIN PROPERTIES, THE MENTIONED PROPERTIES IN THE SHOW CAUSE NOTICE NOT BELONGS TO THE ASSESSEE AND A LL ARE R OUGH ESTIMATED PAPERS ONLY, SO MANY BROKERS/MARKETING PEOPLE ARE COMING AND 30 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA EXPLAINING ABOUT THE LAYOUT AND FURTHER THE ABOVE ASSETS ARE NO WAY CONCERNED TO THE ASSESSEE, DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASKED HE ASSESSING OFFICER AND EX PLAINED THE SANE. ACTUALLY THE ASSESSEE IS HAVING ONLY TWO PROPERTIES SITUATED AT D. NO. 11 - 1 - 25, B.R.P. ROAD, VIJAYAWADA AND D.NO.11 - 25 - 250, MAIN ROAD, VIJAYAWADA AND OFFERED RENTAL INCOME BY THE ASSESSEE ON THE ABOVE TWO PROPERTIES IN THE RETURN OF INCOM E. DURING THE ASSESSMENT PROCEEDINGS, THE DIFFERENCE IN RETURNED INCOME AND ACTUAL RENTAL INCOME ALSO TAKEN INTO CONSIDERATION BY THE AD ON THE ABOVE TWO PROPERTIES. APART FROM THE ABOVE, THE ASSESSEE HAS NO OTHER PROPERTIES. THE ESTIMATION OF FLAT AT LOT US IS ONLY BROUCHER NOT THE DOCUMENT AND NEVER PAID ANY AMOUNT. AS PER CONSTRUCTION ACCOUNTING TOTALING TO RS.32,72,961, IT DOES NOT BELONG TO THE ASSESSEE AND IT IS RELATED TO HIS BROTHER SRI GHANTASALA VENKATA KRISHNA SITUATED AT D.NO.11 - 52 - 12, GUDIVADAVARI STREET, VJAYAWADA 14. NOT BEING CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, THE LD.PR.CIT HELD THAT THE ASSESSMENT MADE U/S 143(3) R.W.S. 147 WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ACCORDINGLY SET ASIDE THE ASSES SMENT ORDER AND DIRECTED THE AO TO REDO THE ASSESSMENT AFTER AFFORDING REASONABLE OPPORTUNITY TO THE ASSESSEE. 15. AGGRIEVED BY THE ORDER OF THE LD.PR.CIT, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. DURING THE APPEAL HEARING, TH E LD.AR ARGUED THAT T HE ISSUE RAISED IN THE SHOW CAUSE NOTICE IS RELATED TO THE NOTING MADE IN THE 31 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA LOOSE SHEETS BEARING PAGE NO.14 & 15. THE PROPERTIES MENTIONED IN PAGE NO.29, HELD BY THE ASSESSEE AND THE SITES NOTED IN THE LANCO SIDE AREA , RTC LAY OUT, GUNTU PALLI SITE WAS WERE ROUGH ESTIMATIONS GIVEN THE MARKETING PEOPLE OF THE DEVELOPERS BUT THEY ARE NOT THE ASSETS BELONGING TO THE ASSESSEE . THE CONSTRUCTION ACCOUNT NOTED IN THE PAGE NO.20 DOES NOT BELONG TO THE ASSESSE E BUT BELONGED TO HIS BROTHER. AFTER EXAMINING ALL THE ISSUES, THE AO COMPLETED THE ASSESSMENT, THEREFORE, THERE IS NO CASE FOR REVISION U/S 263. THE LD.PR.CIT DID NOT GIVE ANY FINDING AND NOT MADE OUT A CASE AS TO HOW THE ASSESSMENT ORDER PASSED U/S 143( 3) R.W.S. 147 WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. FURTHER, THE LD.PR.CIT IN THE PREAMBLE OF THE ORDER STATED THAT THE AO HAS NOT EXAMINED CERTAIN ISSUES PROPERLY. FROM THE READING OF THE REVISION ORDER U/S 263 PASSED BY THE LD.PR .CIT SHOWS THAT THE LD.PR.CIT HAS TAKEN UP THE CASE FOR REVISION U/S 263 BECAUSE OF DIFFERENCE OF OPINION AND ALSO BECAUSE OF INADEQUATE ENQUIRY. THE LD.AR ARGUED INADEQUATE ENQUIRY CANNOT BE A BASIS FOR REVISION U/S 263, A CCORDINGLY REQUESTED TO QUASH THE ORDER PASSED BY THE LD.PR.CIT. 16. ON THE OTHER HAND, THE LD.DR SUPPORTED THE ORDERS OF THE LD.PR.CIT. 32 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA 17. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THIS CASE, THE LD.PR.CIT HAS TAKEN UP THE CASE FOR REVISION U/S 26 3 FOR NON - EXAMINATION OF THE ISSUES WITH REGARD TO THE RENTS RECEIVED BY THE ASSESSEE AS PER PAGE NO.29 OF THE SURVEY FOLDER. SIMILARLY NOTINGS MADE IN RESPECT OF THE PROPERTIES OF L ANCO SIDE AREA 90 CENTS, RTC LAY OUT 1.98 CENTS, GUNTUPALLI SITE 1.80 CENTS AND CONSTRUCTION ACCOUNT IN PAGE. NO.20. 17 ( 1 ) . WITH REGARD TO THE NOTING IN RESPECT OF LANCO SID E AREA, RTC LAY OUT, GU NTUPALLI SITE WAS STATED TO BE PROJECTIONS AND ESTIMATIONS. THE ASSESSEE HAS NEVER ACQUIRED THE SAID PROPERTIES AND THE AO ALSO DURING T HE SURVEY PROCEEDINGS DID NOT BRING ANY EVIDENCE ON RECORD TO ESTABLISH THAT THE ASSESSEE HAS ACQUIRED THE PROPERTIES IN THE YEAR UN DER CONSIDERATION. SINCE THE SURVEY WAS CONDUCTED IN THIS CASE, AND NO OTHER EVIDENCE WAS FOUND WITH REGARD TO ACQUIRING THE PROPERTIES, EXCEPT THE NOTING OF L ANCO SI D E, RTC LAYOUT, GU NTUPALLI SITE . DURING THE APPEAL HEARING, T HE ASSESSEE FURNISHED THE CO PY OF THE CONSEQUENTIAL ORDER GIVING EFFECT TO THE PR.CITS ORDER U/S 263, AND IT IS OBSERVED THAT THE AO ALSO DID NOT MAKE ANY ADDITION ON ACCOUNT OF ABOVE NOTINGS . MERELY WITH SOME NOTING IT CANNOT BE PRESUMED THAT THE ASSESSEE HAD ACQUIRED THE PROPERT IES WITHOUT SUPPORT ING EVIDENCE. IN THIS CASE, THERE IS NO MATERIAL TO SHOW THAT THE 33 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA ASSESSEE HAS ACQUIRED THE ABOVE PROPERTIES. THEREFORE, THERE IS NO CASE FOR TAKING UP THE CASE FOR REVISION ON PRESUMPTION. 17 ( 2 ) . WITH REGARD TO NOTING IN PAGE NO.20, IT WAS EXPLAINED THAT THE SAID CONSTRUCTION ACCOUNT WAS BELONGED TO THE BROTHER OF THE ASSESSEE MR. GHANTASALA VENKATA KRISHNA , IN D.NO.11 - 52 - 12, G UDIVARIVARI STREET, VIJAYAWAD A A ND THE SAME WAS CONSIDER ED IN HIS INDIVIDU AL ASSESSMENT AND DISCUSSED IN DETAIL IN THIS ORDER. THEREFORE, THERE IS NO CASE FOR TAKING ANY ADVERSE VIEW IN RESPECT OF THE ASSESSEE. 17( 3 ) . THE ONLY ISSUE LEFT OUT WAS NOTINGS ON LOOSE SHEETS AT PAGE NO.32 AND33 OF SURVEY FOLDER PAID TO DIFF ERENT PER SONS TOTALING TO RS.9,4 3,500/ - . IN THIS CASE, SURVEY WAS CONDUCTED U/S 133A ON 21.10.2010. FINANCIAL YEAR INVOLVED IS 2010 - 11 , THE ASSESSMENT YEAR INVOLVED IS 2011 - 12 AND THE IMPUGNED ASSESSMENT YEAR IS 2010 - 11 . SURVEY WAS CONDUCTED SUBSEQUENT TO THE COMPLETION OF THE FINANCIAL YEAR UNDER CONSIDERATION. THE LD.PR.CIT IN THE LOOSE SHEETS DID NOT FURNISH THE DETAILS OF DATES OF PAYMENTS . I N THE ABSENCE OF DETAILS OF DATES OF PAYMENTS , PAGE NO.32 AND 33 ARE DUMB D OCUMENTS WHICH CANNOT BE INFERRED AGAINST THE ASSESSEE. THE LD.PR .CIT SHOULD MAKE OUT A CASE TO ESTABLISH THAT THE PAYMENTS WERE MADE IN THE YEAR UNDER CONSIDERATION TO CONSIDER THE INCOME IN THE IMPUGNED 34 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA ASSESSMENT YEAR NEITHER THE LD.PR.CIT NOR THE AO M ADE OUT A CASE THAT NOTINGS MENTIONED IN THE LOOSE SHEETS WERE RELATED TO THE PAYMENTS MADE DURING THE PREVIOUS YEAR RELATED TO THE ASSESSMENT YEAR UNDER CONSIDERATION. IN THE ABSENCE OF THE COMPLETE DETAILS, SUCH AS, THE DATE OF PAYMENT, NAME OF THE BENE FICIARY AND TH E NAME OF THE PAYER, IT CANNOT BE INFERRED THAT THE PAYMENTS WERE RELATED TO UNDISCLOSED INCOME OF THE YEAR UNDER CONSIDERATION. THEREFORE, WE ARE UNABLE TO HOLD THAT THE ASSESSMENT MADE IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. 17 (4) . PLAIN READING OF THE REVISION ORDER OF THE LD.PR.CIT SHOWS THAT THE LD.PR.CIT HAS TAKEN UP THE C A SE FOR REVISION U/S263 FOR NOT PROPERLY EXAMINING THE ISSUES WHICH CAN BE HELD TO BE INADEQUATE ENQUIRY, BUT NOT LACK OF ENQUIRY. IN THIS CASE, SURVEY WAS CONDUCTED IN THE ASSESSEES PREMISES AND THE ASSESSMENT IS REOPENED U/S 147 R.W.S. 143(3) TO EXAMINE THE ISSUES FOUND DURING THE COURSE OF SURVEY. THEREFORE, THE RESPONSIBILITY CAST UPON THE LD.PR.CIT TO ESTABLISH THAT THE ISSUES WERE NOT EXAMINED BY THE AO. MERE NON MENTIONING OR NOT RECORDING THE FINDINGS IN THE ASSESSMENT ORDER, DOES NOT ESTABLISH THA T THE AO HAS NOT EXAMINED THE ISSUE S ESPECIALLY WHEN THE MATERIAL IS AVAILABLE TO THE AO AT THE TIME OF ASSESSMENT. THEREFORE, WE HOLD THAT ASSESSMENT ORDER PASSED BY AO IS 35 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. HENCE, WE SET AS IDE THE ORDER OF THE LD.PR.CIT AND ALLOW THE APPEAL OF THE ASSESSEE. ITA NO.34/VIZ/2017, A.Y.2010 - 11 18. IN THIS CASE, SURVEY U/S 133A WAS CONDUCTED ON 21.10.2010. DURING THE COURSE OF SURVEY, THE AO FOUND THAT THE ASSESSEE FIRM HAD AVAILED OVER DRAFT FA CILITY FOR THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2010 - 11 TO THE TUNE OF RS.27,35,918/ - WITH ACCOUNT NO.0977000050900266 FROM TAMILNADU MERCANTILE BANK, VIJAYAWADA AND REPAID THE SAME DURING THE ASSESSMENT YEAR. THEREFORE, THE AO HAS ISSUED NOT ICE U/S 148 AND REOPENED THE ASSESSMENT AND COMPLETED THE ASSESSMENT U/S 143(3) ON TOTAL INCOME OF RS.26,706/ - . SUBSEQUENTLY, THE LD.PR.CIT HELD THAT THE AO HAS NOT PROPERLY EXAMINED CERTAIN ISSUES, HENCE CONSIDERED THE ORDER PASSED BY THE AO U/S 143(3) WA S ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE ON THE FOLLOWING ISSUES. 19. THE LD.PR.CIT HAS ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AND THE ASSESSEE FILED REPLY TO THE SHOW CAUSE NOTICE WHICH IS EXTRACTED AS UNDER : 'DURING THE COURSE OF SURVEY PROCEEDINGS SHRI GHAN TASALA MANIKYALARAO, PARTNER OF THE ASSESSEE FIRM HAS STATED IN HIS STATEMENT THAT AVERAGE TURNOVER IN M /S.V IJ AYALAKSH M I STATIONERY 36 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA MART WILL BE AROUND RS.25 LAKHS ARID FU RTHER STATED THAT ACCOUNTS RELATING TO THE FIRM WERE INCL UDED IN THE ACCOUNTS MAINTAINED IN LAPTOP. SRI M ANIKYALA RAO AND S M T. SATYAVATH I (MOTHER OF MANIKYALA RAO) WERE THE PARTNERS WITH EQUAL SHARES. THE AVERAGE TURNOVER OF THE ASSESSEE - FIRM WILL BE AROUND RS . 25 L AKHS. THE BOOKS OF ACCOUNT ARE MAINTAINED IN COM PUTER. ON VERIFICATION OF THE BANK ACCOUNT STATEMENTS, IT IS NOTICED THAT FOR THE FINANCIAL YEAR 2009 - 10 I. E., RELEVANT FOR THE ASST.YEAR 2010 - 11, SRI G.MANIKYALA RAO HAS AVAILED OVERDRAFT FACILITY IN TAMILNADU MERCANTILE BANK, VINNAKOTAVA RI STREET, VI JAYAWADA - 1 WITH A/C NO.097700050900266 AVAILED AN OD AMOUNT OF RS.27,35,918/ - AND REPAID THE SAID OD U P TO RS.27,35,764/ - . IT IS NOTICED THAT WHILE COMPLETING THE ASSESSMENT, THE ACCOUNTS O F THE FIRM MAINTAINED IN THE LAPTOP RELATING TO THE PERIOD OF F.Y. 20 09 - I0 WERE NEITHER RECONCILED WITH REFERENCE TO THE BOOKS OF ACCOUNT NOR CONSIDERED FOR THE PURPOSE OF ASSESSMENT. IT CL EARLY SHOWS THAT THE ASSESSEE HAS CONCEALED THE TRUE PARTICULARS OF INCOME BY NO T PROPERLY ACCOUNTING F OR ITS DAY TO DAY BUSINESS TRANSA CTIONS. THE ASSESSEE HAS NEITHER SUBSTANTIATED HIS TURNOVER REPORTED IN THE RETURN OF INCOME NO R TO OFFERED PAYMENT OF TAXES ON THE ABOVE DISCREPANCIES. 3 . 1 . DURING THE COURSE OF SURVEY OPERATIONS CONDUCTED, IT WAS CONCLUDED THAT THE YEAR - WISE PROBABLE UND ISCLOSED INCOMES OF THE ASSESSEE FOR THE FOLLOWING ASST. YEARS WAS ARRIVED AT AS UNDER; ASST. YEAR THE PROBABLE INCOME INCOME RETURNED 2008 - 09 11,72,994 NO ROI 2009 - 10 31,18,982 NIL 2010 - 11 8,59,004 NO ROI 37 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA HOWEVER, IT IS OBSERVED THAT WHILE C OMPLETING THE ASSESSMENT, THE AO HAS NOT VERIFIED THIS ASPECT. 20. THE ASSESSEE FILED REPLY TO SHOW CAUSE NOTICE ISSUED BY THE LD.PR.CIT WHICH READS AS UNDER : THE YEAR WISE PROBABLE UNDISCLOSED INCOME AS CONSIDERED IN PARA NO.3.1 IS NOT CORRECT, AND IT IS BASELESS, IT IS ONLY A HYPOTHICATED FIGURE FOR ASCERTAINING SUCH AMOUNTS, DURING THE COURSE OF ASSESSMENT ' PROCEEDINGS THE ASSESSING OFFICER THOROUGHLY VERIFIE D THE ASPECT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE THE ASSESSEE FILED THE SOURCES ELABORATELY FOR DEPOSITS MADE IN , THE BANK. THE ASSESSEE HAS GIVEN EVERY INFORMATION/SOURCES FOR DEPOSITS IN THE BANK STATEMENT THEASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNTS AND OFFERED INCOME U/S 44AF ON THE SALES AS PER VAT RETURNS. THE ASSESSING OFFICER EXAMINED ALL THE ASPECTS AND FINALIZED THE ASSESSMENT AND IT IS NOT CORRECT TO SAY THAT THE ASSESSING OFFICER NOT EXAMINED THE ISSUES. HEREWITH ENCLOSING THE STATEMENT FILED BEFORE THE ASSESSING OFFICER FOR THE DEPOSITS MADE IN THE BANK. IT IS STATED IN PARA 3 OF THE SHOW CAUSE NOTICE THAT THE ASSESSEE HAS AVAILED OVERDRAFT FACILITY IN TAMILNADU MERCANTILE BANK FOR RS.27,35,918 IS NOT CORRECT, THE ASSESSEE HAS TAKEN A LOAN OF RS.7,00,000/ - AS OD IN TM8 A/C 097700050900266 AND NOT RS.27,35,918/ - . THE FIGURE RS. 27,35,918/ - ' IS N OT JUST BANK LOAN BUT IT IS THE TOTAL OF CREDITS IN THE BANK. FOR THAT THE ASSESSEE HAS EXPLAINED BEFORE THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS.' 38 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA 21. NOT BEING CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, THE LD.PR.CIT SET ASID E THE ORDER OF THE AO PASSED U/S 143(3) R.W.S. 147 AND DIRECTED THE AO TO REDO THE ASSESSMENT AFRESH AS PER LAW. 22. AGGRIEVED BY THE ORDER OF T HE LD.PR.CIT, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 23. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD . WITH REGARD TO THE OD LOAN FROM TAMILNADU MERCANTILE BANK LTD., THE AO HAS ISSUED NOTICE U/S 142 AND CALLED FOR THE DETAILS AND THE ASSESSEE SUBMITTED REPLY STATING THAT THE DEPOSITS MADE IN T H E BANK ACCOUNT WERE OUT OF SALE PROCEEDS OF THE CURRENT YEAR SALES. HENCE, THE LD.PR.CIT CANNOT REVISIT THE SAME ISSUE WHICH WAS EXAMINED BY THE AO AND TAKE UP THE CASE FOR REVISION U/S 263 WHICH AMOUNTS TO DIFFERENCE OF OPINION. 23.1. IN RESPECT OF PRINTOUTS EXTRACTED FROM THE LAPTO P , FROM TH E BEGINNING, THE ASSESSEE SUBMITTED THAT THE LAPTOP WAS NEITHER BELONG ING TO THE ASSESSE E NOR THE PRINTOUTS ARE RELATED TO THE ASSESSEE. THE LAPTOP WAS BELONGING TO THE PART TIME ACCOUNTANT. LD.PR.CIT DID NOT MAD E OUT THE CASE 39 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA THAT THE PRINTOUT EXTRACTS TAKEN FROM THE LAPTOP DOES BELONG TO THE ASSESSEE AND THE ASSESSEE HAD SUPPRESSED THE TURNOVER. THE ASSESSEE STATED THAT THE ASSESSEE IS NOT MAIN TAINING THE BOOKS OF ACCOUNTS AND FILING THE RETURN OF INCOME U/S 44AF OF THE ACT. THOUGH THE AO FOU ND THAT THERE WAS SUPPRESSION OF SALES TO THE EXTENT OF R S.3,70,297/ - , THE AO CONSIDERED THE SAME AND HELD THAT IT IS REASONABLE TO ESTIMATE THE NET PROFIT OF EXCESS RECEIPTS AND ACCORDINGLY COMPLETED THE ASSESSMENT. THE ASSESSEE ADMITTED THE SALES AS PE R THE VAT RETURNS AND THE BANK ACCOUNT WHICH THE AO HAS EXAMINED THE SAME AT THE TIME OF ASSESSMENT . THEREFORE, THE ASSESSMENT ORDER CANNOT BE HELD TO BE PREJUDICIAL AND ERRONEOUS TO THE INTEREST OF THE REVENUE ON THIS ISSUE. 23.2. THE 3 RD ISSUE IS THE LD.PR.CITS OPINION WITH REGARD TO THE PROBABLE INCOME. IT IS NOT KNOWN HOW THE PR.CIT HAS ESTIMATED THE PROBABLE INCOME. THEREFORE WITHOUT SUPPORTING DOCUMENTS, THE SAME CANNOT BE HELD TO BE THE INCOME OF THE ASSESSEE. FROM THE ORDER OF THE LD.PR.CIT AND PLAIN READING OF THE ORDER PASSED U/S 263, THE LD.PR.CIT HAS TAKEN UP THE CASE FOR REVISION FOR NOT PROPERLY EXAMINING CERTAIN ISSUES .. IN THIS CASE, TH E ASSESSEE HAS FILED RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 40 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA 29.02.2011 . THE LD.PR.CIT HAS NOT GIVEN ANY BASIS FOR THE PROBABLE UNDISCLOSED INCOME. IT DOES NOT EMANATE FROM THE ASSESSMENT ORDER OR FROM THE MATERIAL FOUND DURING THE COURSE OF SURVEY. THEREFORE, IT SHOWS THE GUESS WORK OF THE LD.PR.CIT AND THE REVISION U/S 263 IS NOT PERMITTED ON GUESS WORK. ITA NO.35/VIZ/2017, A.Y.2011 - 12 24 . IN THIS CASE, SURVEY U/S 133A WAS CONDUCTED ON 21.10.2010. DURING THE COURSE OF SURVEY, THE AO FOUND THAT THE ASSESSEE FIRM HAD AVAILED OD FACILITY FOR THE PREVIOUS YEAR RELEVANT TO THE ASS ESSMENT YEAR 2011 - 12 TO THE TUNE OF RS.8,57,254/ - WITH ACCOUNT NO.0977000050900266 FROM TAMILNADU MERCANTILE BANK, VIJAYAWADA AND REPAID THE SAME DURING THE ASSESSMENT YEAR. THEREFORE, THE AO HAS ISSUED NOTICE U/S 148 AND REOPENED THE ASSESSMENT. SUBSEQU ENTLY COMPLETED THE ASSESSMENT U/S 143(3) ON TOTAL INCOME OF RS.5,150/ - . SUBSEQUENTLY, THE LD.PR.CIT HELD THAT THE AO HAS NOT PROPERLY EXAMINED CERTAIN ISSUES, HENCE CONSIDERED THE ORDER PASSED BY THE AO U/S 143(3) WAS ERRONEOUS AND PREJUDICIAL TO THE INTE REST OF THE REVENUE ON THE FOLLOWING ISSUES. 41 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA 25 . THE LD.PR.CIT HAS ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AND THE ASSESSEE FILED REPLY TO THE SHOW CAUSE NOTICE WHICH IS EXTRACTED AS UNDER : 'DURING THE COURSE OF SURVEY, PRINTOUTS OF ACCOUNTS FOR THE CALENDAR YEARS 2008, 2009 AND 2010 WERE TAKEN FROM THE LAPTOP. AS SEEN FROM THE SAID EXTRACTS, AC COUNTS RELATING. TO N/S. SRI VIJ AYA LAKSHMI STATIONERY AND FANCY MART ARE ALSO INCLUDED. BUT IN THE SURVEY FINAL REP O RT DATED 29 .11. 2010, THERE WAS NO MENTION ABOUT THE ACCOUNTS OF THE ASSESSEE FIRM FOR THE CALENDAR YEARS 2009 AND 2010 RELEVANT TO THE FINANCIAL YEAR 2009 - 10 IN TURN RELEVANT TO THE ASST. YEAR 2010 - 11. WHILE COMPLETING THE ASSESSMENT, THE ACCOUNTS OF THE FIRM MAINTAINED IN THE LAPTOP RELATING TO T HE PERIOD FOR THE FINANCIAL YEAR 2009 - 10 FORMING PART OF THE CALENDAR YEARS 2009 AND 2010 WERE NEITHER RECONCILED WITH REFERENCE TO THE BOOKS OF ACCOUNT NOR CONSIDERED FOR THE PURPOSE OF ASSESSMENT. 2 6 . THE ASSESSEE FILED REPLY TO SHOW CAUSE NOTICE ISSUED BY THE LD.PR.CIT WHICH READS AS UNDER : DURING THE COURSE OF SURVEY, PRINTOUTS OF ACCOUNTS FOR THE CALENDAR YEARS 2008,2009 AND 2010 WERE TAKEN THE LAPTOP. BUT THE FACT IS THAT, THE LAPTOP NOT BELONGS TO THE ASSESSEE AND IT BELONGS TO THE PART TIME ACCOUNTANT AND NOT THE ASSESSEE AND IN THE LAPTOP MANY ASSESSEE'S INFORMATION WILL BE AVAILABLE AND FURTHER THE LAPTOP WAS NOT SEIZED BY THE DEPARTMENT . IT IS STATED IN THE SHOW CAUSE NOTICE THAT WHILE COMPLETING THE ASSESSMENT ACCOUNTS OF THE FIRM MAINT AINED IN THE LAPTOP NOT CONSIDERED FOR THE PURPOSE OF ASSESSMENT. THE STATEMENT IS NOT CORRECT SINCE THE LAPTOP IS NOT BELONGS TO THE ASSESSEE AND MOREOVER WHILE FINALIZING THE ASSESSMENT, THE ASSESSING OFFICER RECONCILED WITH THE VAT RETURNS, PURCHASE BIL LS AND 42 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA PHYSICAL STOCK. SO, THE ASSESSING OFFICER CONSIDERED EACH AND EVERY ASPECT AND COMPLETED THE ASSESSMENT. 27. NOT BEING CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, THE LD.PR.CIT SET ASIDE THE ORDER OF THE AO PASSED U/S 143(3) R.W.S. 147 AND DIRECTED THE AO TO REDO THE ASSESSMENT AFRESH AS PER LAW. 28. AGGRIEVED BY THE ORDER OF THE LD.PR.CIT, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 29. THE LD.PR.CIT OBSERVED THAT THE PRINTOUTS OF ACCOUNTS FOR THE CALENDAR YEARS 2008, 2009 AND 2010 WERE TAKEN FROM THE LAPTOP AND IT WAS OBSERVED FROM THE SAID EXTRACTS, THAT THE ACCOUNTS RELATING TO M/S SRI VIJAYA LAKSH MI STATIONERY AND FANCY MART PERTAINING TO THE ASSESSEE WERE ALSO INCLUDED. THE LD.PR.CIT FOUND THAT THE AO HAS NEITHER RECONCILED THE ACCOUNTS NOR EXAMINED SAME WITH REFERENCE TO THE BOOKS OF ACCOUNTS FOR THE PURPOSE OF ASSESSMENT WHILE COMPLETING THE AS SESSMENT. THE ASSESSEE DENIED OWNERSHIP OF THE EXTRACTS TAKEN FROM THE LAPTOP STATING THAT THE LAPTOP DOES NOT BELONG TO THEIR FIRM. AT THE TIME OF SURVEY ITSELF, THE ASSESSEE HAS DENIED THE CONTENTS OF THE EXTRACTS. THE LAPTOP WAS NEITHER SEIZED, NO ST ATEMENT WAS RECORDED FROM THE PART TIME ACCOUNTANT. HAVING 43 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA DENIED THE CONTENTS OF THE EXTRACTS OF THE LAPTOP BELONGING TO THE ASSESSEE, IT IS FOR THE REVENUE TO ESTABLISH THAT THE CONTENTS DO BELONGED TO THE ASSESSEE. THE FACT THAT THE LAPTOP DOES NOT BEL ONG TO THE ASSESSEE WAS NOT DISPUTED BY THE AO. THE CONTENTION OF THE ASSESSEE THAT THE PART TIME ACCOUNTANT MAINTAINED THE BOOKS OF ACCOUNTS OF MANY OTHER CUSTOMERS WAS ALSO NOT DISPUTED. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE STATED THAT THE A SSESSEE HAS NOT MAINTAINED BOOKS OF ACCOUNTS AND ADMITTED THE INCOME AS PER SECTION 44AF OF THE ACT. THE AO HAS NOT BROUGHT ON RECORD ANY MATERIAL TO ESTABLISH THAT THE TURNOVER RECORDED IN THE COMPUTER EXTRACT BELONGED TO THE ASSESSEE BY COMPARING THE C ONTENTS OF THE PRINTOUTS OF THE ASSESSEE WITH THE ENTRIES IN THE BOOKS OF ACCOUNTS OR WITH THE INFORMATION FOUND DURING THE COURSE OF SURVEY. THE ENTIRE SURVEY MATERIAL WAS AVAILABLE WITH THE AO AT THE TIME OF ASSESSMENT AND THE CASE WAS REOPENED FOR VERIF ICATION OF THE MATERIAL FOUND DURING THE COURSE OF SURVEY, AND THE AO HAS COMPLETED THE ASSESSMENT AFTER EXAMINING THE ENTIRE DETAILS AVAILABLE WITH THE AO. WHILE FINALIZING T HE ASSESSMENT, THE AO RECONCILED WITH THE VAT RETURNS, PURCHASE BILLS AND PHYSIC AL STOCK, CONSIDERING EACH AND EVERY ASPECT AND COMPLETED THE ASSESSMENT. ON IDENTICAL FACTS IN THE GROUP CASES IN RESPECT OF PRINT OUTS EXTRACTED FROM THE LAP TOP AND THE STOCK 44 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA FOUND DURING THE SURVEY, WE HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND SET ASIDE THE ORDER OF THE LD.PR.CIT AND ALLOWED THE APPEAL OF THE ASSESSEE. FOLLOWING THE RULE OF CONSISTENCY , WE HOLD T HAT THE ORDER PASSED BY THE AO IS NEITHER ERRONEOUS AND NOR PREJUDICIAL TO THE INTEREST OF REVENUE AND ACCORDINGLY WE SET ASIDE THE ORDER PASSED U/S 263 AND RESTORE THE ASSESSMENT ORDER. THE APPEAL OF THE ASSESSEE ON THIS GROUND IS ALLOWED. IN THE RESULT, APPEALS OF THE ASSESSEES FOR THE ASSESSMENT YEARS 2010 - 11 AND 2011 - 12 ARE ALLOWED. THE ABOVE ORDER WAS PRONOUNCED I N THE OPEN COURT ON 10 TH AUG, 201 8 . SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 10 . 0 8 .2018 L.RAMA, SPS 45 I TA NO S.31 - 35 / V IZ/201 7 SRI G VENKATA KRISHNA, SRI G.VENKATA RAMAN AND SRI VIJAYALAKSHMI STATIONERY & FANCY MART LTD., VIJAYAWADA / COPY OF THE ORDER FORWARDED TO: - 1 . / THE ASSESSEE (I) G.VENKATA KRISHNA , PROP.GHANTASALA MANIKYALA RAO CARDS , 11 - 25 - 167 , MAIN ROAD, ONE TOWN , VIJAYAWADA (II) G.VENKATA RAMAN , PARTNER.SRI DHANALAKSHMI STATIONERY MART 11 - 54 - 225, JAI HIND MARKET , MAIN ROAD , ONE TOWN, VIJAYAWADA (III) M/S SRI VIJAYALAKSHMI STATIONERY & FANCY MART , D.NO.11 - 25 - 167 , MAIN ROAD, VIJAYAWADA 2 . / THE REVENUE INCOME TAX OFFICER , WARD - 1 , VIJAYAWADA / INCOME TAX OFFICER , WARD - 1 (1), VIJAYAWADA 3 . THE PR. COMMISSIONER OF INCOME TAX , VI JAYAWADA 4 . , , / DR, ITAT, VISAKHAPATNAM 5 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM
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