THE ACIT, CIRCLE - 1(1), Vijayawada V. Deepak Mittal, Vijayawada

ITA 425/VIZ/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1039 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 23-06-2014

Judgement Text

ITA NOS.393,394,425&426/VIZAG/2014 SRI DEEPAK MITTAL & SMT. URMILA MITTAL, VIJAYAWADA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NOS.393/VIZAG/2014 ( / ASSESSMENT YEAR:2009-10) SRI DEEPAK MITTAL VIJAYAWADA VS. ACIT, CIRCLE - 1(1), VIJAYAWADA [PAN: AIUPM1474E ] ( % / APPELLANT) ( &'% / RESPONDENT) ./I.T.A.NOS.394/VIZAG/2014 ( / ASSESSMENT YEAR:2009-10) SMT. URMILA MITTAL VIJAYAWADA VS. ACIT, CIRCLE - 1(1), VIJAYAWADA [PAN: ACTPM9807C ] ( % / APPELLANT) ( &'% / RESPONDENT) ./I.T.A.NOS.425/VIZAG/2014 ( / ASSESSMENT YEAR:2009-10) ACIT, CIRCLE - 1(1), VIJAYAWADA VS. SRI DEEPAK M ITTAL VIJAYAWADA ( % / APPELLANT) ( &'% / RESPONDENT) ITA NOS.393,394,425&426/VIZAG/2014 SRI DEEPAK MITTAL & SMT. URMILA MITTAL, VIJAYAWADA 2 ./I.T.A.NOS.426/VIZAG/2014 ( / ASSESSMENT YEAR:2009-10) ACIT, CIRCLE - 1(1), VIJAYAWADA VS. SMT. URMILA MITTAL VIJAYAWADA ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI A.S.R.S.S. SIVA PRASAD, AR / RESPONDENT BY : SHRI ARAVINDAKSHAN, DR / DATE OF HEARING : 23.06.2016 / DATE OF PRONOUNCEMENT : 15.07.2016 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THESE CROSS APPEALS FILED BY THE ASSESSEE, AS WELL AS REVENUE ARE DIRECTED AGAINST SEPARATE, BUT IDENTICAL ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS), VIJAYAWADA DATED 28-03-2014 FOR THE ASST. YEAR 2009-10. SINCE, THE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, THEY ARE HEARD TOGETHER AND DISPOSED OFF, BY THIS COMMON ORD ER FOR THE SAKE OF CONVENIENCE. 2. THE BRIEF FACTS OF THE CASE AS STATED IN ITA.NO. 393/VIZAG/2014 ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE B USINESS OF TRADING IN INDUSTRIAL SPARE PARTS, FILED HIS RETURN OF INCOME FOR THE A.Y. 2009-10 ON 30-09-2009 DECLARING TOTAL INCOME OF RS. 4,62,930/- . THE CASE HAS BEEN ITA NOS.393,394,425&426/VIZAG/2014 SRI DEEPAK MITTAL & SMT. URMILA MITTAL, VIJAYAWADA 3 SELECTED FOR SCRUTINY ASSESSMENT AND ACCORDINGLY, N OTICES U/S 143(2) AND 142(1) OF THE ACT, WERE ISSUED. IN RESPONSE TO NOTI CES, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME T O TIME AND FURNISHED DETAILS CALLED FOR. THE A.O. COMPLETED AS SESSMENT U/S 143(3) OF THE ACT AND DETERMINED TOTAL INCOME OF RS. 1,17, 07,175/- BY MAKING FOLLOWING ADDITIONS. (A)UNEXPLAINED DEDUCTION U/S 80GGC RS. 54,00,000/- . (B)UN EXPLAINED SUNDRY CREDITORS RS. 50,61,086/-. (C)UN EXPLAINED CASH DEPOSITS TO ICICI BANK RS. 7 ,83,162/-. 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). BEFORE, THE CIT(A), THE A SSESSEE HAS FILED ELABORATE WRITTEN SUBMISSION ALONG WITH NECESSARY E VIDENCES FOR DONATION PAID TO POLITICAL PARTY, CONFIRMATION FROM SUNDRY CREDITORS AND ALSO EXPLAINED THE UNEXPLAINED CASH DEPOSITS TO ICI CI BANK ACCOUNT. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE CIT (A), FORWARDED ADDITIONAL EVIDENCES FILED BY THE ASSESSEE TO THE A .O. FOR HIS COMMENTS. THE A.O. IN THE REMAND REPORT, WITHOUT COMMENTING O N THE EVIDENCES FILED BY THE ASSESSEE, STATED THAT ADDITIONAL EVIDE NCES FILED BY THE ASSESSEE MAY NOT BE ACCEPTED. THE CIT(A), AFTER CON SIDERING THE EVIDENCES FILED BY THE ASSESSEE AND ALSO TAKEN INTO ACCOUNT REMAND REPORT OF THE A.O. HELD THAT AS PER THE PROVISIONS OF SEC. 80GGC, ANY ITA NOS.393,394,425&426/VIZAG/2014 SRI DEEPAK MITTAL & SMT. URMILA MITTAL, VIJAYAWADA 4 DONATION PAID TO A POLITICAL PARTY WHICH IS RECOGNI ZED BY THE ELECTION COMMISSION OF INDIA IS ALLOWED AS DEDUCTION. THE AS SESSEE HAS PAID DONATION TO JOGO PARTY WHICH IS NOT RECOGNIZED BY T HE ELECTION COMMISSION OF INDIA. FURTHER, THE ASSESSEE HAS NOT PROVED DONATION WITH CONFIRMATION LETTER FROM THE POLITICAL PARTY. WITH THESE OBSERVATIONS CONFIRMED DISALLOWANCE OF DEDUCTION CLAIMED U/S 80G GC OF THE ACT. AS REGARDS THE ADDITION TOWARDS UNEXPLAINED SUNDRY CRE DITORS, THE CIT(A) DELETED THE ADDITION MADE BY THE A.O. BY HOLDING TH AT, THE ASSESSEE HAS FURNISHED CONFIRMATION LETTERS FROM THE PARTIES AND THE LETTERS ISSUED BY THE PARTIES CONFIRMED THAT ALL THE CREDITS ARE BROU GHT FORWARDED FROM LAST FINANCIAL YEAR, THEREFORE NO ADDITION CAN BE MADE F OR BROUGHT FORWARD CREDITS DURING THE CURRENT FINANCIAL YEAR. SIMILARL Y, THE CIT(A), DELETED THE ADDITION TOWARDS UNEXPLAINED CREDITS INTO ICICI BANK ACCOUNT, BY HOLDING THAT THE ASSESSEE HAS PROVED THAT HE HAD NO T MAINTAINED ANY BANK ACCOUNT WITH ICICI BANK. THE A.O. FAILED TO CO UNTER WITH EVIDENCE, THE CONTENTION OF THE ASSESSEE THAT HE DOES NOT HAV E ANY BANK ACCOUNT WITH ICICI BANK. AGGRIEVED BY THE CIT(A) ORDER, THE ASSESSEE AS WELL AS REVENUE ARE APPEAL BEFORE US. 4. THE FIRST ISSUE THAT CAME UP FOR OUR CONSIDERATI ON FROM THE ASSESSEE APPEAL IS DISALLOWANCE OF DEDUCTION TOWARD S DONATION PAID TO POLITICAL PARTY U/S 80GGC OF THE ACT. THE FACTS REL ATES TO ADDITION ARE ITA NOS.393,394,425&426/VIZAG/2014 SRI DEEPAK MITTAL & SMT. URMILA MITTAL, VIJAYAWADA 5 THAT THE ASSESSEE HAS PAID DONATION TO JOGO PARTY, A UNRECOGNIZED POLITICAL PARTY REGISTERED WITH ELECTION COMMISSION OF INDIA U/S 29A OF THE REPRESENTATION OF PEOPLE ACT, 1951 AND CLAIMED DEDUCTION U/S 80GGC OF THE ACT. DURING THE COURSE OF ASSESSMENT P ROCEEDINGS, THE A.O. CALLED UPON ASSESSEE TO FURNISH DETAILS OF DON ATION PAID ALONG WITH CONFIRMATION LETTERS. THE ASSESSEE FURNISHED PHOTO COPIES OF RECEIPTS GIVEN BY THE POLITICAL PARTY, HOWEVER FAILED TO FUR NISH CONFIRMATION LETTER, THEREFORE, THE A.O. DISALLOWED DONATION PAID TO JOG O PARTY AS UNEXPLAINED DEDUCTION. THE A.O. WAS OF THE OPINION THAT DONATION TO ANY POLITICAL PARTY WHICH IS RECOGNIZED BY THE ELECTION COMMISSION OF INDIA IS DEDUCTIBLE U/S 80GGC OF THE ACT. THE ASSESSEE HAS F AILED TO FURNISH REQUIRED DETAILS SO AS TO PROVE GENUINENESS OF DONA TION PAID TO JOGO PARTY ALONG WITH PARTICULARS OF RECOGNITION AND ALS O CONFIRMATION LETTER FROM THE PARTY, THEREFORE DISALLOWED THE CLAIM MADE BY THE ASSESSEE. 5. THE LD. A.R. FOR THE ASSESSEE SUBMITTED THAT THE CIT(A) FAILED TO APPRECIATE THE FACTS THAT JOGO PARTY IS UNRECOGNIZE D REGISTERED POLITICAL PARTY U/S 29A OF THE REPRESENTATION OF PEOPLE ACT, 1951. THE A.R. FURTHER SUBMITTED THAT AS PER SEC. 80GGC, ANY CONTR IBUTION GIVEN BY ANY PERSON TO POLITICAL PARTY, WHICH IS REGISTERED U/S 29A OF THE REPRESENTATION OF PEOPLE ACT, 1951, WHETHER OR NOT RECOGNIZED BY THE ELECTION COMMISSION OF INDIA, IS ALLOWED AS DEDUCTI ON. THE ASSESSEE HAS ITA NOS.393,394,425&426/VIZAG/2014 SRI DEEPAK MITTAL & SMT. URMILA MITTAL, VIJAYAWADA 6 PAID DONATION TO JOGO PARTY, WHICH IS REGISTERED U/ S 29A OF THE REPRESENTATION OF PEOPLE ACT, 1951. THE DONATION HA S BEEN PAID BY CHEQUE AND THE PROOF OF PAYMENT ALONG WITH RECEIPTS , CONFIRMATION LETTERS AND DETAILS OF REGISTRATION WITH ELECTION C OMMISSION OF INDIA IS FURNISHED TO THE CIT(A). THE ASSESSEE ALSO FURNISHE D REPORT FILED BY THE JOGO PARTY WITH ELECTION COMMISSION OF INDIA IN FOR M NO. 24A, WHICH CONTAINED THE PARTICULARS OF NAME AND ADDRESS OF DO NOR. THE A.R. FURTHER SUBMITTED THAT DONATION PAID BY THE ASSESSE E IS SATISFIED ALL THE TESTS LAID DOWN BY WAY OF SEC. 80GGC TO BE QUALIFIE D FOR DEDUCTION. THE CIT(A) WITHOUT APPRECIATING FACTS, SIMPLY DISBELIEV ED EVIDENCES FILED BY THE ASSESSEE AND CONFIRMED ADDITIONS MADE BY THE A. O. BY HOLDING THAT JOGO PARTY IS NOT RECOGNIZED BY ELECTION COMMISSION OF INDIA. BUT, THE FACTS REMAIN THAT TO BE QUALIFIED FOR DEDUCTION U/S 80GGC, REGISTRATION U/S 29A OF THE REPRESENTATION OF PEOPLE ACT, 1951 I S MUST, BUT NOT RECOGNITION BY ELECTION COMMISSION OF INDIA. THEREF ORE, ADDITION MADE BY THE A.O. SHOULD BE DELETED. THE LD. D.R., ON THE OTHER HAND, STRONGLY SUPPORTED CIT(A) ORDER. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MATERI ALS AVAILABLE ON RECORDS. THE A.O. DISALLOWED CLAIM OF DEDUCTION U/S 80GGC OF THE ACT, TOWARDS DONATION PAID TO JOGO PARTY. THE A.O. WAS OF THE OPINION THAT ANY DONATION PAID TO A POLITICAL PARTY, WHICH IS RECOGNIZED BY THE ITA NOS.393,394,425&426/VIZAG/2014 SRI DEEPAK MITTAL & SMT. URMILA MITTAL, VIJAYAWADA 7 ELECTION COMMISSION OF INDIA IS ALLOWED AS DEDUCTIO N U/S 80GGC OF THE ACT. THE A.O. FURTHER WAS OF THE OPINION THAT THE A SSESSEE HAS FAILED TO FURNISH CONFIRMATION LETTERS AND RECOGNITION DETAIL S OF POLITICAL PARTY. IT IS THE CONTENTION OF THE ASSESSEE THAT HE HAD PAID DON ATION TO JOGO PARTY, WHICH IS REGISTERED U/S 29A OF THE REPRESENTATION O F PEOPLE ACT, 1951. THE DONATION HAS BEEN PAID BY CHEQUE AND THE PROOF OF PAYMENT ALONG WITH RECEIPTS, CONFIRMATION LETTERS AND DETAILS OF REGISTRATION WITH ELECTION COMMISSION OF INDIA IS FURNISHED TO THE CI T(A). THE ASSESSEE ALSO FURNISHED REPORT FILED BY THE JOGO PARTY WITH ELECTION COMMISSION OF INDIA IN FORM NO. 24A, WHICH CONTAINED THE PARTI CULARS OF NAME AND ADDRESS OF DONOR. THEREFORE, THE LOWER AUTHORITIES WERE ERRED IN DISALLOWING DEDUCTION CLAIMED U/S 80GGC DESPITE FUR NISHED ALL THE REQUIRED DETAILS. 7. THE A.O. DISALLOWED DEDUCTION FOR THE REASON THA T DONATION TO JOGO PARTY IS NOT PROVED WITH NECESSARY EVIDENCES. THE A.O. FURTHER HELD THAT JOGO PARTY IS UNRECOGNIZED POLITICAL PART Y, THEREFORE, ANY DONATION TO A UNRECOGNIZED POLITICAL PARTY IS INELI GIBLE FOR DEDUCTION. IT IS THE CONTENTION OF THE ASSESSEE THAT, TO BE QUALIFIE D FOR DEDUCTION U/S 80GGC, REGISTRATION U/S 29A OF THE REPRESENTATION O F PEOPLE ACT, 1951 IS MUST, BUT NOT RECOGNITION BY ELECTION COMMISSION OF INDIA. WE FIND FORCE IN THE ARGUMENTS OF THE ASSESSEE FOR THE REASON THA T, ANY CONTRIBUTION ITA NOS.393,394,425&426/VIZAG/2014 SRI DEEPAK MITTAL & SMT. URMILA MITTAL, VIJAYAWADA 8 GIVEN BY ANY PERSON TO A POLITICAL PARTY REGISTERED U/S 29A OF THE REPRESENTATION OF PEOPLE ACT, 1951 WHETHER OR NOT R ECOGNIZED BY THE ELECTION COMMISSION OF INDIA IS DEDUCTIBLE U/S 80GG C OF THE ACT. THE ONLY REQUIREMENT IS THAT THE POLITICAL PARTY MUST B E REGISTERED U/S 29A OF THE REPRESENTATION OF PEOPLE ACT, 1951 AND THE PAYM ENT MUST BE MADE OTHER THAN BY CASH. 8. IN THE PRESENT CASE ON HAND, ON PERUSAL OF FACTS , WE FIND THAT THE ASSESSEE HAS PAID DONATION TO JOGO PARTY BY WAY OF CHEQUES. THE ASSESSEE HAS FURNISHED CHEQUE DETAILS FOR HAVING PA ID THE AMOUNT. THE ASSESSEE ALSO FURNISHED DETAILS OF POLITICAL PARTY ALONG WITH CONFIRMATION LETTER ISSUED BY THE JOGO PARTY. ON PERUSAL OF DETA ILS AVAILABLE IN THE PAPER BOOK, WE FIND THAT JOGO PARTY IS REGISTERED U /S 29A OF THE REPRESENTATION OF PEOPLE ACT, 1951 BY THE ELECTION COMMISSION OF INDIA. THE ASSESSEE HAS FURNISHED LETTER ISSUED BY THE ELE CTION COMMISSION OF INDIA, NOTIFICATION PUBLISHED IN THE GAZETTE OF IND IA AND FORM NO. 24A A RETURN OF CONTRIBUTIONS SUBMITTED TO ELECTION COMMI SSION OF INDIA IN TERMS OF SEC. 29C OF THE REPRESENTATION OF PEOPLE A CT, 1951. ALL THE DOCUMENTS INDICATE THAT JOGO PARTY IS UNRECOGNIZED REGISTERED POLITICAL PARTY U/S 29A OF THE REPRESENTATION OF PEOPLE ACT, 1951. THE CONTRIBUTION RETURN IN FORM NO. 24A FILED WITH ELEC TION COMMISSION OF INDIA, INDICATE THE NAME AND ADDRESS OF DONOR DETAI LS. THEREFORE, WE ARE ITA NOS.393,394,425&426/VIZAG/2014 SRI DEEPAK MITTAL & SMT. URMILA MITTAL, VIJAYAWADA 9 OF THE VIEW THAT THE A.O. WAS ERRED IN DISALLOWING DEDUCTION CLAIMED U/S 80GGC OF THE ACT. HENCE, WE SET ASIDE THE CIT(A) OR DER AND DIRECT THE A.O. TO DELETE THE ADDITION. 9. THE NEXT ISSUE EMANATES FROM REVENUE APPEAL IS D ELETION OF UNEXPLAINED CREDITORS. THE FACTS OF THE ISSUE ARE THAT DURING THE COURSE OF ASSESSMENT, THE A.O. CALLED UPON ASSESSEE TO FUR NISH CONFIRMATION LETTERS FROM SUNDRY CREDITORS. THE ASSESSEE FAILED TO FURNISH CONFIRMATION LETTERS FROM THE PARTIES, THEREFORE, THE A.O. TREAT ED SUNDRY CREDITORS AS UNEXPLAINED CREDITORS AND ADDED BACK TO THE INCOME OF THE ASSESSEE. THE A.O. WAS OF THE OPINION THAT THE ASSESSEE HAS F AILED TO DISCHARGE INITIAL BURDEN CAST UPON HIM BY FURNISHING, IDENTIT Y OF THE CREDITORS, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE PARTIES. IT IS THE CONTENTION OF THE ASSESSEE THAT ALL THE CREDITO RS ARE BROUGHT FORWARD FROM LAST FINANCIAL YEAR AND MANY ARE SQUARED UP FU LLY OR PARTLY DURING THE FINANCIAL YEAR. THE ASSESSEE FURTHER CONTENDED THAT HE HAD FILED CONFIRMATION LETTER ALONG WITH LEDGER EXTRACT OF CR EDITORS TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE P ARTIES. THEREFORE, THE A.O. WAS NOT CORRECT IN MAKING ADDITION TOWARDS TRA DE CREDITORS. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIALS AVAILABLE RECORD. THE A.O. MADE ADDITIONS TOWARDS S UNDRY CREDITORS FOR THE REASON THAT THE ASSESSEE HAS FAILED TO FURNISH CONFIRMATION LETTERS. ITA NOS.393,394,425&426/VIZAG/2014 SRI DEEPAK MITTAL & SMT. URMILA MITTAL, VIJAYAWADA 10 THE A.O. WAS OF THE OPINION THAT THE ASSESSEE FAILE D TO DISCHARGE INITIAL BURDEN CAST UPON HIM BY PROVING IDENTITY, GENUINENE SS AND CREDITWORTHINESS OF THE PARTIES. IT IS THE CONTENTI ON OF THE ASSESSEE THAT CREDITORS ARE BROUGHT FORWARD FROM LAST FINANCIAL Y EARS AND THE SAME ARE FULLY OR PARTLY SQUARED UP DURING THE FINANCIAL YEA R. THE ASSESSEE FURTHER CONTENDED THAT ALL THE CREDITORS ARE PAYABLE TOWARD S PURCHASE OF MATERIALS FROM THE PARTIES AND ALL THE ACCOUNTS ARE RUNNING CURRENT ACCOUNT WITH SUPPLIERS. THE ASSESSEE HAD FILED CONF IRMATION LETTER ALONG WITH LEDGER EXTRACT OF CREDITORS TO PROVE THE IDENT ITY, GENUINENESS AND CREDITWORTHINESS OF THE PARTIES. WE FIND FORCE IN TH E ARGUMENTS OF THE ASSESSEE. THE ASSESSEE HAS FILED PAPER BOOK. ON PER USAL OF PAPER BOOK FILED BY THE ASSESSEE, WE FIND THAT HE HAD FURNISHE D LEDGER EXTRACTS OF CREDITORS ALONG WITH CONFIRMATION LETTERS. ON FURTH ER VERIFICATION OF CONFIRMATION LETTERS AND LEDGER EXTRACTS, WE FIND T HAT ALL THE CREDITORS PERTAIN TO PURCHASE OF GOODS FROM PARTIES AND ARE B ROUGHT FORWARD FROM PREVIOUS YEAR AND SQUARED UP DURING THE CURRENT FIN ANCIAL YEAR. 11. SECTION 68 OF THE ACT PROVIDES FOR ADDITION, WH ERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAIN ED FOR THE PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATIONS ABOUT THE NATURE AND SOURCE THEREOF, OR EXPLANATIONS OFFERED BY THE ASSE SSEE IS NOT IN THE OPINION OF THE A.O. SATISFACTORY, THEN SUM SO CREDI TED MAY BE CHARGED TO ITA NOS.393,394,425&426/VIZAG/2014 SRI DEEPAK MITTAL & SMT. URMILA MITTAL, VIJAYAWADA 11 INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR. A PLAIN READING OF SECTION 68 OF THE ACT, MAKES IT CLEAR TH AT ANY SUM FOUND CREDITED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE I S NOT EXPLAINED TO THE SATISFACTION OF THE A.O., THEN SUM FOUND CREDITED S HALL BE TREATED AS INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. IN OT HER WORDS, ADDITION CAN BE MADE FOR FRESH CREDITS OF THE YEAR AND NO AD DITION CAN BE MADE FOR THE AMOUNTS BROUGHT FORWARDED FROM THE PREVIOUS YEAR. IN THE PRESENT CASE ON HAND, ON PERUSAL OF FACTS, WE FIND THAT ALL CREDITORS ARE BROUGHT FORWARD FROM LAST YEARS AND PAID DURING THE CURRENT FINANCIAL YEAR. THEREFORE, WE ARE OF THE VIEW THAT THE A.O. W AS ERRED IN TREATED SUNDRY CREDITORS BROUGHT FORWARD FROM LAST YEAR AS UNEXPLAINED CREDITORS. THE CIT(A) AFTER CONSIDERING DETAILS FIL ED BY THE ASSESSEE AND ALSO TAKEN IN TO ACCOUNT REMAND REPORT OF THE A.O. DELETED ADDITION MADE BY THE A.O. THE FACTS REMAIN SAME EVEN BEFORE US. THE REVENUE HAS FAILED TO PROVE THE FINDINGS OF FACT RECORDED B Y THE CIT(A) IS INCORRECT. THEREFORE, WE UPHELD THE CIT(A) ORDER AN D DELETE THE ADDITION MADE BY THE A.O. 12. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATI ON IS ADDITION TOWARDS UNEXPLAINED CASH CREDITS INTO ICICI BANK AC COUNT. THE A.O. MADE ADDITIONS TOWARDS CASH DEPOSITS TO ICICI BANK ACCOUNT U/S 69 OF THE ACT. THE A.O. MADE ADDITIONS FOR THE REASONS TH AT THE ASSESSEE HAS ITA NOS.393,394,425&426/VIZAG/2014 SRI DEEPAK MITTAL & SMT. URMILA MITTAL, VIJAYAWADA 12 FAILED TO EXPLAIN THE SOURCES FOR THE CREDITS IN TO ICICI BANK ACCOUNT. IT IS THE CONTENTION OF ASSESSEE THAT HE DOES NOT OPER ATE ANY BANK ACCOUNT WITH ICICI BANK ACCOUNT. THE ASSESSEE FURTHER CONTE NDED THAT HE HAD BANK ACCOUNT WITH AXIS BANK ACCOUNT WHICH WAS RECOR DED IN THE REGULAR BOOKS OF ACCOUNTS, THEREFORE, THE A.O. WAS NOT CORR ECT IN MAKING ADDITIONS. WE FIND FORCE IN THE ARGUMENTS OF THE AS SESSEE FOR THE REASON THAT THE ASSESSEE HAS NOT MAINTAINED ANY BANK ACCOU NT WITH ICICI BANK AND THIS FACT WAS NOT DISPUTED BY THE REVENUE. THE ASSESSEE, ON THE OTHER HAND FURNISHED COPY OF AXIS BANK ACCOUNT WHIC H WAS RECORDED IN THE REGULAR BOOKS OF ACCOUNTS. ON PERUSAL OF BANK S TATEMENT OF AXIS BANK, WE FIND THAT THERE ARE ONLY TWO CASH DEPOSITS OF RS. 1600 ON 8-7- 2008 AND RS. 8900/- ON 18-11-2008 FOR WHICH SOURCES HAS BEEN EXPLAINED. THEREFORE, WE ARE OF THE VIEW THAT THE A .O. HAS MADE ADDITIONS WITHOUT ANY BASE. THE CIT(A) AFTER CONSID ERING RELEVANT DETAILS FILED BY THE ASSESSEE AND ALSO TAKEN INTO ACCOUNT R EMAND REPORT OF A.O. DELETED ADDITIONS. THE FACTS REMAIN SAME EVEN BEFOR E US. THE REVENUE HAS FAILED TO COUNTER THE CONTENTION OF ASSESSEE TH AT HE DOES NOT OPERATE ANY BANK ACCOUNT WITH ICICI BANK. THEREFORE , WE UPHELD THE CIT(A) ORDER AND DELETE THE ADDITION MADE BY THE AS SESSING OFFICER. 13. THE NEXT ISSUE EMANATES FROM REVENUE APPEAL IS DISALLOWANCE OF EXPENDITURE. THE A.O. DISALLOWED EXPENDITURE DEBITE D TO PROFIT AND LOSS ITA NOS.393,394,425&426/VIZAG/2014 SRI DEEPAK MITTAL & SMT. URMILA MITTAL, VIJAYAWADA 13 ACCOUNT OF LABELLE SLIMMING AND BEAUTY CLINIC FOR T HE REASON THAT THE ASSESSEE HAS NOT EXPLAINED THE NATURE AND SOURCE OF INCOME EARNED FROM THE BUSINESS. THE A.O. FURTHER OBSERVED THAT T HE ASSESSEE HAS FAILED TO PROVE THE NATURE OF BUSINESS ACTIVITY. IT IS THE CONTENTION OF ASSESSEE THAT SHE IS THE PROPRIETOR OF LABELLE SLIM MING AND BEAUTY CLINIC AND HAD INCURRED EXPENDITURE BEING INTEREST ON LOAN AND DEPRECIATION ON ASSETS. THE ASSESSEE FURTHER CONTENDED THAT SHE HAD EARNED INDIRECT INCOME OF RS. 16,49,400/- FROM THE BUSINESS, THEREF ORE, THE A.O. WAS NOT CORRECT IN DISALLOWING EXPENDITURE INCURRED FOR THE PURPOSE OF BUSINESS. WE FIND FORCE IN THE ARGUMENTS OF THE ASSE SSEE FOR THE REASON THAT THE ASSESSEE IS THE PROPRIETOR OF M/S INDIA BA TTERY WORKS AND LABELLE SLIMMING AND BEAUTY CLINIC. WE FURTHER NOTIC ED THAT SHE HAD REPORTED GROSS SALES INCOME OF RS. 49,31,376/- FROM TRADING ACTIVITY AND INDIRECT INCOME OF RS. 16,49,400/- FROM THE BUSINES S OF INDIA BATTERY WORKS AND LABELLE SLIMMING AND BEAUTY CLINIC. THE AS SESSEE HAS PROVED THAT SHE HAD INCURRED EXPENDITURE BEING INTEREST ON LOAN AND DEPRECIATION ON MOTOR CAR USED FOR THE PURPOSE OF B USINESS. THEREFORE, WE ARE OF THE VIEW THAT THE A.O. WAS ERRED IN DISAL LOWING EXPENDITURE INCURRED FOR THE PURPOSE OF BUSINESS. THE CIT(A) RI GHTLY DELETED THE ADDITIONS. WE DO NOT SEE ANY ERROR OR INFIRMITY IN T HE ORDER OF CIT(A). ITA NOS.393,394,425&426/VIZAG/2014 SRI DEEPAK MITTAL & SMT. URMILA MITTAL, VIJAYAWADA 14 HENCE, WE INCLINED TO UPHELD CIT(A) ORDER AND DIREC T THE A.O. TO DELETE ADDITIONS TOWARDS EXPENDITURES. 14. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE ES IN APPEALS NO. 393/VIZAG/2014 AND 394/VIZAG/2014 ARE ALLOWED AND APPEALS FILED BY THE REVENUE IN APPEAL NOS. 425/VIZAG/2014 AND 426/V IZAG/2014 ARE DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 15 TH JUL16. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 15.07.2016 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SHRI DEEPAK MITTAL, 201, 2 ND BLOCK, D.V. COLONY, MINISTER ROAD, SECUNDERABAD-500 003. 2. / THE APPELLANT SMT. URMILA MITTAL, 201, 2 ND BLOCK, D.V. COLONY, MINISTER ROAD, SECUNDERABAD-500 003. 3. / THE RESPONDENT THE ACIT, CIRCLE-1(1), VIJAYAWA DA 4. + / THE CIT, VIJAYAWADA 5. + ( ) / THE CIT (A), VIJAYAWADA ITA NOS.393,394,425&426/VIZAG/2014 SRI DEEPAK MITTAL & SMT. URMILA MITTAL, VIJAYAWADA 15 6. # . , . , # / DR, ITAT, VISAKHAPATNAM 7 . / GUARD FILE / BY ORDER // TRUE COPY // 12 . (SR.PRIVATE SECRETARY) . , # / ITAT, VISAKHAPATNAM