The ITO., Vijayawada V. Sri Mudda Anil Kumar, Vijayawada

ITA 42/VIZ/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7534 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 31-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: C KAMESWARA RAO
• Keywords: Business income; Peak credit; Additional evidence; Corroborative evidences; Reassessment proceedings
• Section: 143(3); 250; 68

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. 42 /VIZ/201 7 ( / ASSESSMENT YEAR: 20 1 1 - 1 2 ) INCOME TAX OFFICER WARD - 3(2) VIJAYAWADA VS. SRI MUDDA ANIL KUMAR, PROP : M/S NANDINI FOOD PRODUCTS D.NO.21 - 10/5 - 35B TEACHERS COLONY SRINAGAR COLONY VIJAYAWADA [PAN :ALSPM7148N] ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SMT. SUMAN MALIK, AR / RESPONDENT BY : SHRI C.KAMESWARA RAO, AR / DATE OF HEARING : 0 8 . 04. 201 9 / DATE OF PRONOUNCEMENT : 30 .04. 201 9 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)], VIJAYAWADA VIDE ITA NO.248/CIT(A)/VJA/2015 - 16 DATED 30.09.2016 FOR THE ASSESSMENT YEAR (A.Y.) 2011 - 12. 2 I.T.A. NO .42/VIZ/2017 SRI MUDDA ANIL KUMAR, VIJAYAWADA 2. GROUND NO.1 AND 6 ARE GENERAL IN NATURE WHICH DOES NOT REQUIRE SPECIFIC ADJUDICATION. 3. GROUND NO.2 IS RELATED TO THE ADDITION OF RS.16,98,150/ - PERTAINING TO CASH DEPOSITS IN AXIS BANK. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF FOOD PRODUCTS AND FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.5,20 , 420/ - AND THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED U/S 143(3) ON TOTAL INCOME OF RS.90,91,734/ - . DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THERE WERE TOTAL CREDITS OF RS.27,06,800/ - IN AXIS BANK A/C NO.069010100362054 AND THIS ACCOUNT WAS NOT DISCLOSED TO THE DEPARTMENT. THE ASSESSEE EXPLAINED THAT THE CREDITS IN THE BANK ACCOUNT REPRESENT THE TRADE TRANSACTIONS AND THE AMOUNTS WERE DEPOSITED BY CUSTOMERS FROM VARIOUS LOCATIONS OF THE STATE , HENCE REQUESTED NOT TO MAKE THE ADDITION . H OWEVER, THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE TO SUPPORT THE EXPLANATION OF THE ASSESSEE TO PROVE THE CREDITS IN THE BANK ACCOUNT WERE IN FACT RELATED TO BUSINESS TRANSACTIONS. THE BREAK - UP OF THE CREDITORS OF RS.27,06,800/ - IS AS FOLLOWS : 3 I.T.A. NO .42/VIZ/2017 SRI MUDDA ANIL KUMAR, VIJAYAWADA CASH D EPOSITS - 14,81,640/ - OTHER DEPOSITS - 2,17,160/ - ATM REVERSALS - 8,000/ - UNSECURED LOAN - 10,00,000/ - --------------- TOTAL - RS.27,06,800/ - UNSECURED LOAN OF RS.10,00,000/ - WAS CONSIDERED BY THE AO FOR SEPARATE ADDITION AND THE REMAINING CASH CREDIT OF RS.16,98,150/ - (14,81,640 + 2,17,160) WAS TREATED AS UNEXPLAINED AND ACCORDINGLY MADE THE ADDITION TO THE RETURNED INCOME. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) FOUND THAT THE SOURCE OF THE CASH DEPOSITS WAS NOT EXPLAINED BY THE ASSESSEE AND THE DEPOSITS STATED TO BE MADE BY VARIOUS CUSTOMERS FROM VARIOUS LOCATIONS WAS NOT SUPPORTED BY ANY EVIDENCE. THEREFORE, REJECTED THE ASSESSEES CONTENTION THAT THE DEPOSITS WERE BUSINESS TRANSACTIONS . HOWEVER, THE LD.CIT(A) DIRECTED THE AO TO MAKE THE ADDITION OF PEAK CREDIT OF RS.12,29,969/ - ( AFTER EXCLUDING THE SUM OF RS.1,16,150/ - TRANSFER RED BY CHEQUE ) INSTEAD OF RS.16,98,150/ - AND ALLOWED THE RELIEF OF RS.4,68,181/ - . ACCORDINGLY THE APPEAL OF THE ASSESSEE WAS PARTLY ALLOWED . 4 I.T.A. NO .42/VIZ/2017 SRI MUDDA ANIL KUMAR, VIJAYAWADA 5. AGAINST THE ORDER OF THE LD.CIT(A), THE REVENUE FILED APPEAL BEFORE THIS TRIBUNAL. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. AXIS BANK ACCOUNT OF THE ASSESS EE WAS UNDISCLOSED TO THE DEPARTMENT AND THE TOTAL DEPOSITS MADE IN THE BANK ACCOUNT WAS RS.27,06,800/ - . OUT OF THE SAID SUM OF RS.27,06,800/ - , AN AMOUNT OF RS.10 .00 LAKHS WAS RELATED TO THE UNSECURED LOAN RECEIVED FROM SMT. A. SHARADA WHICH WAS TAXED SEPARATELY BY THE AO. A SUM OF RS.2,16,510/ - WAS RECEIVED FROM SHRI K.SURESH KUMAR BY CHEQUE AND IT WAS NOT CASH DEPOSIT MADE IN THE BANK ACCOUNT . THEREFORE, THE NET DEPOSITS IN THE BANK ACCOUNT W ERE RS.14,81,640/ - . ALL THE DEPO SITS WERE MADE IN THE BANK ACCOUNT IN AMOUNTS LESS THAN RS.50,000/ - ON EACH OCCASION AND T HE DEBIT ENTRIES IN THE BANK ACCOUNT WAS FOUND TO BE MOSTLY BY ATM CASH WITHDRAWALS. THE ASSESSEE DID NOT FURNISH ANY EVIDENCE EITHER BEFORE THE AO OR BEFORE THE CIT (A) TO ESTABLISH THAT THE GENUINENESS AND THE SOURCE OF CREDITS MADE IN THE BANK ACCOUNTS . THEREFORE, THE LD.CIT(A) HAS HELD THAT THE CASH DEPOSITS MADE IN THE BANK ACCOUNT WERE NOT BUSINESS TRANSACTIONS AND THEY WE RE UNACCOUNTED DEPOSITS. SINCE, THERE W ERE WITHDRAWALS AS 5 I.T.A. NO .42/VIZ/2017 SRI MUDDA ANIL KUMAR, VIJAYAWADA WELL AS DEPOSITS IN THE BANK ACCOUNT IT IS REASONABLE TO HOLD THAT THE DEPOSITS WERE MADE OUT OF CASH WITHDRAWALS AND THE DEPOSITS AND WITHDRAWALS ARE CIRCULATION OF THE SAME MONEY. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT IN THE F ACTS AND CIRCUMSTANCES OF FREQUENT CASH DEPOSIT AND THE WITHDRAWAL, IT IS CORRECT TO MAKE THE ADDITION OF PEAK CREDIT BALANCE, BUT NOT THE ENTIRE DEPOSITS WHICH THE LD.CIT(A) HAS DIRECTED THE AO. HENCE , WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) AND THE SAME IS UPHELD. THE APPEAL OF THE REVENUE ON THIS GROUND IS DISMISSED. 7. GROUND NO.3 IS RELATED TO THE ADDITION OF RS.10,00,000/ - UNSECURED LOANS RECEIVED FROM THE CREDITOR, ALLURI SHARADA . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE AO FOUND THAT THE ASSESSEE HA S RECEIVED THE SUM OF RS.10 LAKHS FROM SMT.A.SHARADA BY CHEQUE NO.58534. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE FOR RS.10 LAKHS THE AND THE ASSESSEE EXPLAINED THAT HE H AD ALREADY SUBMITTED THE COMPLETE DETAILS BEFORE THE AO AT THE TIME OF ORIGINAL ASSESSMENT, THEREFORE REQUESTED TO ACCEPT THE TRANSACTION. SINCE THE ASSESSEE DID NOT EXPLAIN THE CREDITWORTHINESS AND IDENTITY OF THE CREDITOR IN THE RE ASSESSMENT PROCEEDINGS , THE AO ISSUED LETTER TO THE CREDITOR , SMT.A.SHARADA WHICH WAS RETURNED UNSERVED WITH A 6 I.T.A. NO .42/VIZ/2017 SRI MUDDA ANIL KUMAR, VIJAYAWADA REASON UNCLAIMED. THOUGH THIS FACT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE, THE ASSESSEE DID NOT FURNISH THE REQUIRED DETAILS BEFORE THE AO. THEREFORE, THE AO MAD E THE ADDITION OF RS.10 LAKHS U/S 68 OF THE ACT. 8. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND SUBMITTED THAT THE LOAN WAS ACCEPTED BY CHEQUE AND FURNISHED THE COMPLETE DETAILS BEFORE THE AO AT THE TIME OF ORIGINAL ASSESSMENT. THE ASSESSEE ALSO FURNISHED THE COPY OF AADHAR CARD TO PROVIDE THE IDENTITY OF THE CREDITOR WITH A PETITION FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A OF INCOME TAX RULES. THE LD.CIT(A) VERIFIED AVAILABLE INCOME TAX RECORDS , COPY OF THE CONFIRMATION LETTER AND AXIS BANK STATEMENT COPY FOR THE RELEVANT PERIOD AND OBSERVED THAT THERE WAS BALANCE OF RS.11,23,400/ - CREDIT AS ON 03.02.2011 AND OUT OF WHICH A SUM OF RS.10,00,000/ - WAS PAID BY CHEQUE DATED 03.02.2011 TO THE ASSESS EE. THUS, FOUND THAT THE ASSESSEE HAD ESTABLISHED THE IDENTITY, CREDIT WORTHINESS, GENUINENESS OF THE TRANSACTION, HENCE, DELETED THE ADDITION. 9. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE REVENUE HAS FILED APPEAL BEFORE THIS TRIBUNAL. 7 I.T.A. NO .42/VIZ/2017 SRI MUDDA ANIL KUMAR, VIJAYAWADA 10. WE HAVE HEA RD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. THE REVENUES CONTENTION IS THAT THE ASSESSEE HAS FURNISHED THE ADDITIONAL EVIDENCE AND THE LD.CIT(A) SHOULD NOT HAVE ACTED UPON THE ADDITIONAL EVIDENCE UNDER RULE 46A WITHOUT GIVING OPPORTUNI TY TO THE AO AS REQUIRED UNDER RULE 46A OF THE INCOME TAX RULES. THOUGH THE CONTENTION OF THE REVENUE APPEARS TO BE CORRECT , THE ONLY ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE BEFORE THE LD.CIT(A) IS AADHAR CARD NUMBER TO ESTABLISH THE IDENTITY OF THE PARTY. THIS IS SECOND ROUND OF ASSESSMENT OF THIS CASE AND IN THE FIRST ROUND, THE ASSESSMENT WAS COMPLETED U/S 143(3) BY SELECTING THE CASE FOR SCRUTINY VIDE ORDER DATED 08.02.2013. DURING THE COURSE OF ORIGINAL ASSESSMENT AS DISCUSSED IN THE ASSESSMENT ORDER, THE ASSESSEE HAD FURNISHED THE DETAILS OF CONFIRMATION WHICH WAS ACCEPTED BY THE AO AND THE SAME WAS NOT DISPUTED AT THE TIME OF ORIGINAL ASSESSMENT. NO LAPSE OR THE DEFECT WAS FOUND IN THE CONFIRMATION LETTER AT THE TIME OF REASSESSMENT PROCEEDINGS . THEREFORE, THE AO CANNOT AGITATE AGAINST THE PROOF OF IDENTITY FURNISHED BEFORE THE LD.CIT(A). EVEN OTHERWISE, THE LD.CIT(A) IS COMPETENT TO ENTERTAIN THE ADDITIONAL EVIDENCE ON HIS OWN AND CONDUCT ENQUIRIES AS PROVIDED U/S 250 (4) OF THE ACT. IN THE I NSTANT CASE, WHAT THE COMMISSIONER HAS EXAMINED IS THE INCOME TAX 8 I.T.A. NO .42/VIZ/2017 SRI MUDDA ANIL KUMAR, VIJAYAWADA RECORD WHICH I S ALREADY AVAILABLE WITH THE DEPARTMENT AND THE ACCOUNT COPY OF THE BANK ACCOUNT, WHICH WAS ALSO FURNISHED BY THE ASSESSEE AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS. FURN ISHING OF AADHAR CARD IS FORTIFYING THE IDENTITY ALREADY ACCEPTED IN ORIGINAL ASSESSMENT AND THE SAME CANNOT BE TREATED AS ADDITIONAL EVIDENCE. SINCE THE ASSESSEE HAS FURNISHED THE COPY OF THE BANK ACCOUNT TO ESTABLISH THE BALANCE AVAILABLE AND THERE WAS SUFFICIENT BALANCE IN THE ACCOUNT TO ADVANCE THE AMOUNT OF RS.10 LAKHS TO THE ASSESSEE, THE LD.CIT(A) HAS RIGHTLY OBSERVED THAT THE ASSESSEE HAS SATISFIED THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION AND ACCORDINGLY DELETED THE ADDIT ION. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) AND THE SAME IS UPHELD. THE APPEAL OF THE REVENUE ON THIS GROUND IS DISMISSED. 11. GROUND NO.4 IS RELATED TO THE ADDITION OF RS.42,24,817/ - . DURING THE ASSESSMENT PRO CEEDINGS, THE AO FOUND THAT THERE WERE CREDITS IN THE BANK ACCOUNT OF ING VYSYA BANK ACCOUNT NO.705010053543 TO THE TUNE OF RS.42,50,176/ - FOR WHICH THE ASSESSEE EXPLAINED THAT THE DEPOSITS WERE BUSINESS TRANSACTION AND THE CUSTOMERS FROM VARIOUS LOCATION S HAVE MADE THE DEPOSITS TOWARDS SALES . HOWEVER, THE ASSESSEE FAILED TO FURNISH THE EVIDENCE TO SUPPORT THE CREDITS OR THE SALES. THEREFORE, THE AO TREATED THE 9 I.T.A. NO .42/VIZ/2017 SRI MUDDA ANIL KUMAR, VIJAYAWADA DEPOSITS MADE IN THE BANK ACCOUNT TOTALING TO RS.42,24,817/ - AS INCOME OF THE ASS ESSEE. 12. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) OBSERVED THAT MOST OF THE CREDITS IN THE ACCOUNT REPRESENT THE ASSESSEES BUSINESS TRANSACTIONS ON THE BASIS OF ADDITIONAL EVIDENCE S PRODUCED BY TH E ASSESSEE , I.E. CONFIRMATION LETTERS FROM SOME OF THE PARTIES. THE LD.CIT(A) MADE VERIFICATION OF RANDOM CONFIRMATIONS PRODUCED BY THE ASSESSEE AND OBSERVED THAT THE CONTENTION OF THE ASSESSEE THAT THE TRANSACTIONS IN THE BANK ACCOUNT REPRESENT BUSINESS TRANSACTIONS WAS TRUE . FOR THIS PURPOSE, THE LD.CIT(A) RELIE D ON THE CONFIRMATION LETTERS PRODUCED BY THE ASSESSEE FROM M/S VAMSI FOOD PRODUCTS, SRI M.RAJESWARA RAO, SRI K.PRAVEEN BABU AND SRI BABU RAO. THE CREDITS IN THE BANK ACCOUNT RELATED TO DEPOSIT OF COLLECTIONS OF PUNGANUR / PALAMANER / SAROOR NAGAR / KAKINADA AND PONNUR BRANCHES. ACCORDINGLY, THE CIT(A) HELD THAT THE CLAIM OF THE ASSESSEE IS TRUE TO THE EXTENT OF TRANSACTIONS WERE RELATED TO THE BUSINESS TRANSACTIONS. THEREFORE THE LD.CI T(A) HELD THAT THE ESTIMATION OF INCOME @10% ON UNDISCLOSED TURNOVER OF RS.42,29,817/ - IS REASONABLE AND ACCORDINGLY CONFIRMED THE 10 I.T.A. NO .42/VIZ/2017 SRI MUDDA ANIL KUMAR, VIJAYAWADA ADDITION OF 10% BEING THE PROFIT ON TOTAL SALES OF RS.42,24,817/ - AND DELETED THE BALANCE ADDITION. 13. AGAINST THE ORDER OF THE LD.CIT(A), THE REVENUE FILED APPEAL BEFORE THIS TRIBUNAL. AT THE OUTSET, THE LD.DR DURING THE APPEAL HEARING ARGUED THAT THE LD.CIT(A) OUGHT NOT TO HAVE ENTERTAINED THE ADDITIONAL EVIDENCE WITHOUT REM ANDING THE SAME TO THE AO . THEREFORE, ARGUED THAT THE LD.CIT(A) ENTERTAINED THE ADDITIONAL EVIDENCE WITHOUT GIVING OPPORTUNITY TO THE AO, HENCE THE ORDER OF THE LD.CIT(A) IS UNACCEPTABLE AND ACCORDINGLY ARGUED THAT THE SAME SHOULD BE REMITTED BACK TO THE FILE OF THE AO. ON THE OTHER HAND THE LD.AR RELIED ON THE ORDERS OF THE LD.CIT(A) . 14. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THE INSTANT CASE, IN ING VYSYA BANK, THERE WERE CREDITS TO THE EXTENT OF RS.42,24,817. THOUGH THE ASSESSEE STATED THAT THE DEPOSITS IN THE BANK ACCOUNT REPRESENT ED THE SALES, NO EVIDENCE WAS PRODUCED BY THE ASSESSEE BEFORE THE AO TO SUPPORT THAT THE DEPOSITS IN THE BANK ACCOUNT ACTUALLY REPRESENT THE TRADE TRANSACTIONS. BEFORE THE LD.CIT(A), THE ASSESSEE FURNISHED THE CONFIRMATION LETTERS FR OM FOUR PARTIES, SRI M.RAJESWARA RAO, SRI K.PRA VEEN BABU, SRI BABU RAO AND A.SHA RADA 11 I.T.A. NO .42/VIZ/2017 SRI MUDDA ANIL KUMAR, VIJAYAWADA SUPPORTING THAT THE DEPOSITS IN THE BANK ACCOUNT ARE TRADE TRANSACTIONS. THIS ACCOUNT IS UNDISCLOSED ACCOUNT. NEITHER THE LD.CIT(A) NOR THE AO RECONCILED THE DEPOSITS MAD E IN THE BANK ACCOUNT WITH THE SALES DECLARED BY THE ASSESSEE IN THE P&L ACCOUNT AND VERIFIED WHETHER THE DEPOSITS IN THE ING VYSYA BANK AND OTHER BANK ACCOUNTS RELATE TO BUSINESS TRANSACTIONS OR NOT. THOUGH THE LD.CIT(A) ENTERTAINED THE ADDITIONAL EVIDEN CE, THE SAME WAS NOT REFERRED TO THE AO AS REQUIRED UNDER RULE 46A OF INCOME TAX RULES. THEREFORE, THE LD.CIT(A) HAS NOT GIVEN OPPORTUNITY TO THE AO TO VERIFY THE ADDITIONAL EVIDENCE AND TO SUBMIT THE COMMENTS ON THE ADDITIONAL GROUND. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE SHOULD BE REMITTED BACK TO THE FILE OF THE LD.CIT(A) TO CALL FOR THE REMAND REPORT FROM THE AO AND DECIDE THE ISSUE AFRESH ON MERITS OF THE CASE. ACCORDINGLY, WE REMIT THE ISSUE BACK TO THE FILE OF THE LD.CIT(A) W ITH DIRECTION TO DECIDE THE ISSUE AFRESH ON MERITS. THE LD.CIT(A) / AO SHOULD RECONCILE THE CREDITS IN THE BANK ACCOUNT AND THE TURNOVER DECLARED BY THE ASSESSEE BEFORE DECIDING THE ISSUE. T HE LD.CIT(A) ALSO TO BE GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESS EE BEFORE PASSING THE ORDERS. THE APPEAL OF THE REVENUE ON THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSE. 12 I.T.A. NO .42/VIZ/2017 SRI MUDDA ANIL KUMAR, VIJAYAWADA 15. GROUND NO.5 IS RELATED TO THE ADDITION OF RS.21,67,758/ - IN INDUSIND BANK. DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THERE WAS CASH DEPOSIT OF RS.23,89,857/ - IN THE INDUS IND BANK, VIJAYAWADA A/C NO.0057 - F81050 - 050 AS UNDER : CA SH DEPOSITS - RS.6,70,450/ - C HEQUE TRANSACTIONS - RS.9,86,011 C HEQUE RETURNS - RS.2,22,099 O THER DEPOSIT - RS.5,11,297 TOTAL - RS.23,71,857/ - TH E AO HAS ASKED THE ASSESSEE TO FURNISH THE COMPLETE DETAILS OF THESE CREDITS WITH EVIDENCES. HOWEVER, THE ASSESSEE COULD NOT SUBMIT ANY EVIDENCE TO EXPLAIN THE SOURCE OF THE CREDITS. THEREFORE, THE AO AFTER EXCLUDING THE CHEQUE RETURNS OF RS.2,22,099/ - B ROUGHT TO TAX THE REMAINING AMOUNT OF RS.21,67,758/ - . 16. AGAINST THE ORDER OF THELD.CIT(A), THE REVENUE HAS FILED APPEAL BEFORE THIS TRIBUNAL. 13 I.T.A. NO .42/VIZ/2017 SRI MUDDA ANIL KUMAR, VIJAYAWADA 17. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. THE LD.CIT(A) DELETED THE ADD ITION WITH THE FOLLOWING OBSERVATIONS : IN VIEW OF THE ABOVE, I AM OF THE VIEW THAT THERE IS NO UNEXPLAINED DEPOSIT IN INDUSI ND BANK A/C. ASSESSING OFFICER HAD NOT SPECIFICALLY IDENTIFIED ANY SUCH CASH DEPOSIT AS UNEXPLAINED. ASSESSING OFFICER ACKNOWLEDGED IN THE ASSESSMENT ORDER ABOUT AVAILABILITY OF CONFIRMATION LETTERS REGARDING SALES. ASSESSING OFFICER DID NOT CAUSE ANY ENQUIRY IN RESPECT OF SUCH CONFIRMATIONS THOUGH SOME OF THEM CONTAINED FULL ADDRESS, PAN ETC. FURTHER, TOTAL CASH CREDIT IN INDUSLND BANK DURING THE RELEVAN T ASSESSMENT YEAR WAS ONLY RS.67 0,450/ - , OTHERS ARE CHEQUE TRANSACTIONS (RS.9,86 , O11/ - ) RTGS/NEFT TRANSACTIONS (RS.5 , 11,297/ - ). AL L OF THEM TOTALLED TO RS.21 , 67 , 758/ - . DURING THE ASSESSMENT PROCEEDINGS, THE AO HAS CALLED FOR THE COMPLETE DETAILS SUCH AS NATURE OF DEPOSITS, SOURCES OF THE DEPOSIT ALONG WITH THE SUPPORTING EVIDENCE. THE ASSESSEE DID NOT FURNISH ANY SUPPORTING EVIDENCE AND THE ASSESSEE HAS FURNISHED SOME OF THE DETAILS REGARDING THE SALES. THE LD.CIT(A) OBS ERVED THAT ALL THE TRANSACTIONS WERE TRADE TRANSACTIONS AND THE CASH DEPOSIT WAS ONLY RS.6,70,450/ - AND THE REMAINING TRANSACTIONS WERE CHEQUE TRANSACTIONS RS.9,86,011/ - , RTGS/NEFT TRANSACTIONS RS.5,11,297/ - . THE ASSESSEE HAD ADMITTED SALES OF RS.30,08,49 2/ - AND THE AO DID NOT RECONCILE THE SALES ADMITTED BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS WITH THAT OF THE BANK ACCOUNTS TO ARRIVE AT THE UNACCOUNTED BANK DEPOSITS. THE ASSESSEE CONSISTENTLY CLAIMED THE 14 I.T.A. NO .42/VIZ/2017 SRI MUDDA ANIL KUMAR, VIJAYAWADA DEPOSITS IN THE BANK ACCOUNT REPRESENT THE TURNOV ER. HOWEVER, NEITHER THE AO NOR THE ASSESSEE HAVE RECONCILED THE TOTAL TURNOVER DECLARED IN THE TRADING ACCOUNT OR VAT WITH THE DEPOSITS MADE IN THE BANK ACCOUNT AND THE SALES ADMITTED BY THE ASSESSEE. IT IS A FACT THAT THE ASSESSEE IS ENGAGED IN THE BUSI NESS AND MADE SALES TO VARIOUS PARTS OF THE STATE. IT IS ALSO A FACT THAT THE SALES ARE DEPOSITED IN VARIOUS LOCATIONS. IN THE CIRCUMSTANCES MAKING ADDITION OF DEPOSIT IN THE BANK ACCOUNT WITHOUT VERIFICATION WOULD CAUSE INJUSTICE TO THE ASSESSEE. IN THI S CASE, IT IS TO BE SEEN WHETHER DEPOSITS RELATES TO SALES OR NOT. IF THE DEPOSITS ARE RELATED TO SALES, ONLY GROSS PROFIT REQUIRED TO BE BROUGHT TO TAX, BUT NOT THE ENTIRE DEPOSITS. IN CASE, THE DEPOSITS DO NOT REPRESENT SALES, THE ADDITION SHOULD BE RES TRICTED TO PEAK CREDITS IF THE SAME MONEY IS IN CIRCULATION. ALL THESE ASPECTS WERE NOT EXAMINED BY THE AO / CIT(A). HENCE, WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE REQUIRES DETAILED EXAMINATION. HENCE, WE REMIT THE M ATTER BACK TO THE FILE OF T HE LD.CIT(A) AND DIRECT THE LD.CIT(A) TO REEXAMINE THE ENTIRE ISSUE AFTER CALLING THE REMAND REPORT FROM THE AO AND DECIDE THE ISSUE AFRESH ON MERITS. ACCORDINGLY, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. 15 I.T.A. NO .42/VIZ/2017 SRI MUDDA ANIL KUMAR, VIJAYAWADA 18. IN THE RESULT, THE APPEA L OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL 2019. SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 30 .04.2019 L.RAMA, SPS 16 I.T.A. NO .42/VIZ/2017 SRI MUDDA ANIL KUMAR, VIJAYAWADA / COPY OF THE ORDER FORWARDED TO: - 1 . / THE REVENUE INCOME TAX OFFICER, WARD - 3(2), VIJAYAWADA 2 . / THE ASSESSEE - SRI MUDDA ANIL KUMAR, PROP : M/S NANDINI FOOD PRODUCTS, D.NO.21 - 10/5 - 35B, TEACHERS COLONY, SRINAGAR COLONY, VIJAYAWADA 3. / THE PR.COMMISSIONER OF INCOME TAX , VIJAYAWADA 4. ( ) / THE COMMISSIONER OF INCOME - TAX (APPEALS), VI JAYAWADA 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM