Income Tax Officer, Ward-1, Karimnagar V. B. Nagabhushanam, Karimnagar

ITA 497/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66408 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 09-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained cash credit; Unexplained investment; Assessment record
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 413/HYD/2012 ASSESSMENT YEAR: 2005-06 B. NAGABHUSHANAM & OTHERS, ... APPELLANT KARIMNAGAR. (PAN AAABB0566A) VS. INCOME-TAX OFFICER , WARD-1, RESPONDENT KARIMNAGAR. ITA NO. 497/HYD/2012 ASSESSMENT YEAR: 2005-06 INCOME-TAX OFFICER , WARD-1, APPELLANT KARIMNAGAR. VS. B. NAGABHUSHANAM & OTHERS, ... RESPONDENT KARIMNAGAR. (PAN AAABB0566A) ASSESSEE BY : SHRI S. RAMA RAO REVENUE BY : SMT. AMISHA S. GUPT DATE OF HEARING : 17/10/2012 DATE OF PRONOUNCEMENT : 31/10/ 2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: BOTH THESE APPEALS FILED BY THE REVENUE AS WELL AS ASSESSEE ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF CIT(A )-III, HYDERABAD FOR THE ASSESSMENT YEAR 2005-06. 2 413 & 497/HYD/2012 B. NAGABHUSHANAM & OTHERS & B. NAGABHUSHANAM ITA NO. 413/HYD/2012 APPEAL BY THE ASSESSEE 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS AN ASSOCIATION OF PERSONS (AOP IN SHORT). AS NOTED BY THE ASSESSING OFFICER (AO IN SHORT), AS RETURN (AIR) DATA RECEIVE D BY HIM, THE ASSESSEE AOP, IN A BANK ACCOUNT, MAINTAINED IN THE JOINT NAMES OF SRI B NAGABHUSHANAM AND SRI M MALIA REDDY, IN UN ION BANK OF INDIA, HAS DEPOSITED AN AMOUNT OF RS.22,00,000/- DU RING THE FINANCIAL YEAR 2004-05. FROM SUCH INFORMATION RECEI VED BY HIM, THE AO NOTICED THAT THE ASSESSEE WAS HAVING TAXABLE INCOME FOR THE ASST.YEAR. 2005-06. HOWEVER, AS THE ASSESSEE HA $ NOT FILED RETURN OF INCOME FOR THE SAID ASSESSMENT YEAR AND I NCOME CHARGEABLE TO TAX IN THEIR HANDS FOR THE SAID ASSES SMENT YEAR HAS ESCAPED ASSESSMENT, THE AO HAS ISSUED A NOTICE U/S 148 OF THE ACT TO THE ASSESSEE FOR ASST.YEAR. 2005-06 ON 22.01 .2008. AS NOTED BY HIM, THE ASSESSEE AOP HAS FILED RETURN OF INCOME ON 28.12.2007 FOR THE ASST.YEAR. 2005-06, SHOWING INCO ME OF RS.15,699/-. THE CASE OF THE ASSESSEE WAS TAKEN UP FOR THE SCRUTINY ASSESSMENT. DURING THE ASSESSMENT PROCEEDI NGS, THE ASSESSEE, WHILE EXPLAINING ABOUT THE INTEREST INCOM E OF RS.15,699/- SHOWN IN THAT RETURN, HAS REFERRED TO T HE NOTE FURNISHED ALONG WITH THAT RETURN, WHERE IT IS STATE D REGARDING FORMATION OF AN AOP BY NAME 'M/S. B NAGABHUSHANAM & OTHERS', OBJECT OF THAT AOP, OPENING OF BANK ACCOUNT AT THE FIRST INSTANCE IN THE JOINT NAMES OF SRI B . NAGABHUSHANAM AND SRI MALIA REDDY WHICH WAS OPERATED UP TO 05.10.2004 AND LATER OPENI NG OF AN ACCOUNT IN THE INDIVIDUAL NAME OF SRI B NAGABHUSHAN AM, WHICH WAS OPERATED UPTO 31.03.2005. 3. DURING THE ASSESSMENT PROCEEDINGS, ON QUERY RAIS ED BY THE AO, FOR EXPLAINING THE SOURCES OF THE CASH DEPOSITS MADE IN THAT BANK ACCOUNT HELD WITH UNION BANK OF INDIA, THE ASS ESSEE HAS 3 413 & 497/HYD/2012 B. NAGABHUSHANAM & OTHERS & B. NAGABHUSHANAM SUBMITTED THAT THE SAME WERE MADE OUT OF THE AMOUNT S CONTRIBUTED BY THE MEMBERS OF THE AOP AS THEIR CAPI TAL. IT WAS STATED THAT THE AOP WAS FORMED BETWEEN SRI B NAGABH USHANAM AND 16 OTHER PERSONS. IN SUPPORT OF THE SAME, THE A SSESSEE HAS FURNISHED A COPY OF MEMORANDUM OF UNDERSTANDING DAT ED 01.04.2004. AS NOTED BY THE AO, THE ASSESSEE HAS SU BMITTED THAT ALL THE MEMBERS CONTRIBUTED AN AMOUNT OF RS.2,00,00 0/- EACH ON DIFFERENT DATES BETWEEN 10.07.2004 AND 30.08.2004 A ND HAVE WITHDRAWN THE SAME LATER ON 01.10.2004. IT WAS STAT ED, LATER, AGAIN SOME OF THE MEMBERS HAVE RE-INVESTED THE AMOU NTS WITHDRAWN BY THEM DURING THE PERIOD FROM 06.12.2004 TO 29.03.2005. IT WAS SUBMITTED THAT THE TOTAL INVESTM ENT MADE BY ALL THE MEMBERS DURING THE F.Y. 2004-05) WAS TO THE EXTENT OF RS.28,OO,000/-. IT WAS FURTHER SUBMITTED THAT THE J OINT BANK ACCOUNT MAINTAINED IN THE NAMES OF SRI B NAGABHUSHA NAM AND SRI MALIA REDDY WAS CLOSED ON 05.10.2004 AND LATER A FR ESH ACCOUNT WAS OPENED IN THE NAME OF SRI B NAGABHUSHANAM. IT W AS FURTHER STATED THAT THE BALANCE AMOUNT STANDING IN THAT JOI NT ACCOUNT WAS TRANSFERRED TO THAT INDIVIDUAL ACCOUNT. THE ASSESSE E HAS ALSO FURNISHED A COPY OF THAT BANK ACCOUNT BEARING NUMBE R 18540. 4. THE AMOUNT CLAIMED TO HAVE BEEN INVESTED BY EACH MEMBER, THE SOURCES FOR THE SAME IN CASE OF EACH MEMBER AS EXPLAINED BY THE ASSESSEE~ ARE REFERRED TO BY AO IN A TABULAR FO RM AT PAGE 3, 4 AND 5 OF THE ASSESSMENT ORDER. REFERRING TO SUCH SUBMISSION RELATING TO THE SOURCES OF SUCH INVESTMENT IN CASE OF EACH MEMBER, THE AO ALSO FURNISHED HIS REMARKS IN THE LA ST COLUMN OF THAT CHART, FURNISHED AT THOSE PAGES OF THE ASSESSM ENT ORDER. HE NOTED THAT, EXCEPT FIVE MEMBERS INCLUDING SRI B NAG ABHUSHANAM, ALL OTHER MEMBERS WERE HAVING INCOME FROM AGRICULTU RAL ACTIVITIES. THOSE MEMBERS, WHO STATED THAT THEIR SO URCE OF INCOME IS FROM AGRICULTURE, COULD NOT PRODUCE ANY SUPPORTI NG EVIDENCE FOR 4 413 & 497/HYD/2012 B. NAGABHUSHANAM & OTHERS & B. NAGABHUSHANAM THE SAME LIKE SALE RECEIPT ETC. EVEN THOUGH THE ASS ESSEE HAS FURNISHED COPIES OF PAHANI PATTADAR PASS BOOKS AND CERTIFICATES ISSUED BY MRO, IT CANNOT BE ACCEPTED THOSE PERSONS HAVE INVESTED SUCH AMOUNTS. HE FURTHER NOTED THAT THOSE PERSONS COULD NOT EXPLAIN THE SOURCE OF SUCH INVESTMENT SHOWN IN THEIR NAMES. WITH THESE DISCUSSIONS HE TREATED A SUM OF RS.25,00 0/- EACH, OUT OF THE AMOUNTS SHOWN IN THE NAMES OF ALL THE 17 PER SONS, AS UNEXPLAINED INVESTMENT MADE IN THE ASSESSEE AOP AND THUS, ADDED THE SAID AMOUNTS AGGREGATING TO RS. 4,25,OOO/ -, TREATING AS UNEXPLAINED CASH CREDITS UJS 68 OF THE ACT, TO T HE RETURNED INCOME OF THE ASSESSEE. IN SUPPORT OF SUCH ADDITION HE REFERRED TO THE DECISIONS IN THE CASE OF CIT VS. ANUPAM UDYOG 1 42 ITR 133 (PATNA) AND IN THE CASE OF CIT VS. SHIV SHAKTI TIMB ERS 229 ITR 505 (M.P). WITH THE ABOVE ADDITION, HE COMPLETED TH E ASSESSMENT ON A TOTAL INCOME OF RS.4,40,700/- VIDE THE SAID OR DER DATED 31.12.2008. 5. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE C ARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). 6. THERE WAS A DELAY OF 138 DAYS IN FILING OF THE APPEAL BEFORE THE CIT(A). THE ASSESSEE HAS FILED AN AFFIDAVIT AND A SEPARATE PETITION REQUESTING FOR CONDONATION OF THE DELAY IN FILING THE APPEAL. THE SUBMISSIONS MADE IN THE SAID AFFIDAVIT WERE REPRODUCED BY THE CIT(A) IN HIS ORDER AT PAGES 1 & 2. AFTER CONSIDERING SUCH SUBMISSIONS MADE IN THE SAID AFFID AVIT AND IN THE SAID PETITION FILED BY THE ASSESSEE AND HAVING REGA RD TO THE RATIO OF DECISION OF THE HON'BLE SUPREME COURT IN THE CAS E OF COLLECTOR, LAND ACQUISITION VS. T'1ST. KATIJI (1987) 167 ITR 4 71, THE DELAY IN FILING OF THE APPEAL WAS CONDONED BY THE CIT(A) AND THE SAME WAS ADMITTED FOR ADJUDICATION. 5 413 & 497/HYD/2012 B. NAGABHUSHANAM & OTHERS & B. NAGABHUSHANAM 7. IN GROUNDS OF APPEAL BEFORE THE CIT(A), THE ASSE SSEE HAS RAISED FOUR GROUNDS. GROUND NO.1 AND 4 ARE OF GENER AL NATURE. IN GROUND NO.2, THE ASSESSEE HAS OBJECTED TO THE SAID ADDITION OF RS. 4,25,OOO/- MADE IN THE ASSESSMENT. IN GROUND NO .3, IT HAS OBJECTED TO CHARGING OF INTEREST UJS 234A, 2348 AND 234C OF THE ACT IN THE ASSESSMENT. 8. DURING THE HEARING OF APPEAL, REFERRING TO THE WRITTEN SUBMISSION FILED ON 10.02.2010, IT WAS SUBMITTED TH AT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS PRODUCED A LL THE MEMBERS OF THE AOP BEFORE THE AO AND SUBMITTED THAT THE DEPOSITS MADE IN THE BANK ACCOUNT WERE MADE BY THOS E MEMBERS. IT WAS STATED THAT THE ASSESSEE HAS FILED A LETTER BEFORE THE AO EXPLAINING THE SOURCE OF SUCH DEPOSIT BY EACH MEMBE R. REFERRING TO SUCH SUBMISSION MADE BY THE ASSESSEE DURINQ ASSE SSMENT PROCEEDINGS, IT WAS STATED THAT THE AO WAS NOT JUST IFIED IN MAKING SUCH ADDITION OF RS. 4,25,000/- TOWARDS UNEXPLAINED INVESTMENT IN THE ASSESSMENT IN THIS CASE. FURTHER STATING THA T THE AO WAS NOT JUSTIFIED IN REJECTING SUCH CLAIM OF ASSESSEE, IT WAS REQUESTED THAT THE APPEAL MAY BE ALLOWED. 9. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) HELD AS UNDER: 5.1 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MA DE ON BEHALF OF THE ASSESSEE IN THAT WRITTEN SUBMISSION F ILED ON 10.02.2010. I HAVE PERUSED THE ASSESSMENT RECORD. A S REGARD SUCH ADDITION TOWARDS UNEXPLAINED INVESTMENT AT F:S.25,000J-, PERTAINING TO INVESTMENT SHOWN IN CAS E OF EACH MEMBER OF THE ASSESSEE AOP IS CONCERNED, THE AO HAS CLEARLY STATED THE REASONS FOR THE SAME IN THE LAST PARA AT PAGE 5 OF THE ASSESSEMENT ORDER. IN FACT, THE ASSES SEE HAS NOT BEEN ABLE TO CONTROVERT VARIOUS OBSERVATIONS MA DE AND THE FINDINGS GIVEN BY THE AO IN THAT PARA OF THE AS SESSMENT ORDER. HAVING REGARD TO HIS SUCH FINDINGS GIVEN IN THAT PARA OF THE ASSESSMENT ORDER, THE SAID TOTAL ADDITION OF RS. 6 413 & 497/HYD/2012 B. NAGABHUSHANAM & OTHERS & B. NAGABHUSHANAM 4,25,000/- TOWARDS UNEXPLAINED INVESTMENT MADE IN T HE HANDS OF THE ASSESSEE IN THIS CASE, IN MY VIEW, IS JUSTIFIED. FURTHER, THE ADDITION OF THE SAID AMOUNT MADE UJS.6 8 OF THE ACT IN THE ASSESSMENT ORDER IS JUSTIFIED. HENCE, TH E SAME IS UPHELD. ACCORDINGLY THE SAID GROUND OF APPEAL NO.2 IS REJECTED. 5.2 HOWEVER, AFTER CAREFULLY GOING THROUGH THE OBSE RVATIONS MADE BY THE AO AT PAGE 3 TO 5 OF THE ASSESSMENT ORD ER, IT WAS NOTICED HE HAS NOT ACCEPTED THE INVESTMENTS SHO WN IN THE NAMES OF 12 PERSONS AMOUNTING TO RS.30,35,000/- -. THE NAMES OF THOSE PERSONS ARE REFERRED TO AT SI.NO.2, 3,4, 5, 6,7, 8,9, 11, 14, 15 AND 17 OF THE SAID LIST GIVEN AT PAGE 3 TO 5 OF THE ASSESSMENT ORDER. SINCE THE AO HAS ADDE D ONLY AN AMOUNT OF PERTAINING TO EACH OF THOSE 12 MEMBERS , IN VIEW OF SUCH FINDINGS GIVEN BY HIM, THE BALANCE AMO UNT OR RS.27,35,OOOJ- PERTAINING TO INVESTMENTS SHOWN IN C ASE OF THOSE MEMBERS, ARE LIABLE FOR ADDITION UJS.68 TO TH E ALREADY ASSESSED INCOME IN THE CASE OF THE ASSESSEE FOR THI S ASSESSMENT YEAR. THEREFORE, VIDE A SHOW-CAUSE NOTIC E DATED 15.12.2011 ISSUED U/S 251(2) OF THE ACT, WHILE BRIN GING SUCH FACTS TO THE NOTICE OF THE ASSESSEE, IT WAS ASKED T O EXPLAIN AS TO WHY THE BALANCE AMOUNT OF RS.27,35,OOOJ- SHOU LD NOT BE ADDED TO THE ASSESSED INCOME IN THEIR CASE. THE ASSESSEE WAS ASKED TO FURNISH THEIR EXPLANATION TO THE SAID SHOW- CAUSE NOTICE ON 23.12.2001. THE SAID SHOW-CAUSE NOT ICE ISSUED TO THE ASSESSEE IS REPRODUCED AS UNDER. TO SRI B. NAGABHUSHANAM & OTHERS, C/O. S. RAMA RAO, ADVOCATE, FLAT NO. 209, PRIYANKA BLOCK' RBR TOWERS, MIYAPUR, HYDERABAD. SUB : APPEAL PROCEEDINGS IN THE CASE OF SRI B. NAGABHUSHANAM & OTHERS, MIYAPUR, HYDERABAD (ITA NO.D030/09-10) - ASST. YEAR 2005-06 PSHOW CAUSE NOTICE FOR ENHANCEMENT OF INCOME U/S.251(2) OF THE INCOME-TAX ACT, 1961 - REG. ***** 2. YOU HAVE FILED AN APPEAL AGAINST THE ASSESSMENT ORDER DT. 31.12.2008 PASSED FOR THE ASST. YEAR 2005 -06 BY THE ITO, WARD-1, KARIMNAGAR. 7 413 & 497/HYD/2012 B. NAGABHUSHANAM & OTHERS & B. NAGABHUSHANAM 3. IN THE ASSESSMENT ORDER PASSED BY THE AO, HE HAS MADE ADDITION OF RS.4,25,OOO/- U/S.68 OF THE ACT. T HE SAID ADDITION HAS BEEN MADE BY HIM AFTER TREATING INVESTMENT TO THE EXTENT OF RS. 25, 000/-, IN CASE OF EACH OF THE 17 MEMBERS, AS UNEXPLAINED INVESTMENT MADE IN THE AOP. 4. FROM THE ASSESSMENT ORDER, HOWEVER, IT IS SEEN T HAT, WHILE REFERRING TO THE DETAILS OF THE MEMBER-WISE INVESTMENT AND SOURCE FOR THE SAME, AT PAGE-3 TO 5 OF THE ASSESSMENT ORDER, UNDER REMARKS COLUMN, IN RESPECT OF 12 PERSONS, HE HAS NOTED THAT ON VERIFICATION, IT IS FOUND THAT THERE ARE NO PROPER SOURCES, EXCEPT AGRICULTURAL INCOME AND ALSO THERE ARE NO PROPER EVIDENCES WITH REGARD TO THE INVESTMENT I N THE AOP. FURTHER, IN THE FIRST PARA, AT PAGE-5, HE HAS MENTIONED, AS SEEN FROM THE ABOVE, EXCEPT FOUR AND LEAVING OUT SRI B. NAGABHUSHANAM, ALL THE OTHER MEMBERS ARE HAVING INCOME FROM AGRICULTURAL ACTIVIT IES AS THEIR SOURCES (IF INCOME. HE FURTHER NOTED, THE MEMBERS WHO HAVE STATED THAT THEIR SOURCE OF INCOME IS AGRICULTURE COULD NOT PRODUCE ANY EVIDENCE IN SUPPORT OF THEIR AGRICULTURAL INCOME LIKE SALE RECE IPTS ETC. HE FURTHER MENTIONED, AS EVIDENCED BY THE PAHA NI PATTEDAR PASS BOOKS AND CERTIFICATES ISSUED BY THE MRO, THOUGH THEY ARE DOING SOME AGRICULTURAL ACTIVITIES, IT CANNOT BE DEDUCED THAT THEY HAVE INV ESTED SUCH AMOUNTS. 3. HAVING REGARD TO THE ABOVE FINDINGS GIVEN BY THE AO IN THE ASSESSMENT ORDER, IT IS THUS SEEN THAT, HE H AS NOT ACCEPTED THE INVESTMENTS SHOWN IN THE NAMES OF THE FOLLOWING 12 PERSONS AMOUNTING TO RS.30,35,000/ -. SL. NO SL.NO. AS SHOWN IN THE ASST. ORDER NAME OF THE MEMBER & ADDRESS AMOUNT INVESTE D (RS.) 1 2 SRI. M. MALLAREDDY, R/O MYADAMPALLY, KARIMNAGAR. 200000 2 3 SRI M. SUDHAMAN REDDY, R/O BALWANTHAPUR, KARIMNAGAR 275000 3 4 SRI M. SADASIVA REDDY, R/O BALWANTHAPUR, KARIMNAGAR 200000 4 5 SRI J. DAMAODAR RAO, R/O KODIMIAL, KARIMNAGAR 200000 5 6 SRI J. RAJGOPAL RAO, R/O 200000 8 413 & 497/HYD/2012 B. NAGABHUSHANAM & OTHERS & B. NAGABHUSHANAM BOINPALLY, KARIMNAGAR 6 7 SRI J. SAMPATH RAO, R/O NARSINGAPUR, KARIMNAGAR 200000 7 8 SRI K. PARTHASARATHI RAO, R/O HYDERABAD 200000 8 9 SRI K. LAXMA REDDY, R/O GUMLAPUR, KARIMNAGAR. 400000 9 11 SRI K. VENKAT NAROTHAM REDDY, R/O CHOPPADANI, KARIMNAGAR DT. 400000 10 14 SRI K.V. SHANKAR RAO, R/O THUMMENALA, KARIMNAGAR DT. 200000 11 15 SRI ALETI PEDA BHUMANNA, R/O JOGANPALLY 360000 12 17 SRI A. RAM REDDY, R/O JOGANPALL, KARIMNAGAR 200000 5. IN FACT, AS PER SUCH FINDINGS GIVEN BY THE AD, H E . HAS NOT ACCEPTED THE INVESTMENTS SHOWN IN THE NAMES OF THE ABOVE PERSONS IN THE SAID AOP AND HENCE THE ENTIRE AMOUNT OF RS.30,35,0001- WAS TO BE ADDED BY HIM ULS.68 OF THE 1. T. ACT, IN THE ASSESSMENT ORDE R MADE BY HIM ON 31.12.2008. IN OTHER WORDS, TOTAL AMOUNT OF RS.30,35,OOO/-, PERTAINING TO, AMOUNTS SHOWN IN THE NAMES OF THOSE 12 PERSONS, OUGHT TO HA VE BEEN ADDED ULS.68 OF THE ACT, IN THE ASSESSMENT. HOWEVER, HE HAS ADDED ONLY A SUM OF RS.3,OO,OOO/-, I.E. AT RS.25,000/- PER MEMBER, IN RESPECT OF THOSE 12 MEMBERS ULS.68 OF THE ACT. THEREFORE, BALANCE AMOUN T OF RS.27,35,000/- HAS TO BE ADDED TO THE ALREADY ASSESSED INCOME IN YOUR CASE, WHICH WOULD RESULT IN ENHANCEMENT OF INCOME BY THAT AMOUNT. 6. IN VIEW OF THE ABOVE, PLEASE EXPLAIN AS TO WHY A N AMOUNT OF RS.27,35,000/-SHOULD NOT BE ADDED TO YOUR ASSESSED INCOME ULS.68 OF THE ACT. PLEASE FURNISH Y OUR EXPLANATION TO THIS SHOW CAUSE NOTICE, ISSUED U/S 251(2) OF THE ACT, ON 23/12/2011 AT 11.30 A.M. WHEN YOUR CASE IS POSTED FOR HEARING. THOUGH, THE SAID SHOW-CAUSE NOTICE WAS DULY SERVED ON 15.12.2011, NO REPLY WAS FURNISHED BY THE ASSESSEE ON 23.12.2011. EVEN NO REPLY HAS BEEN FURNISHED TILL D ATE. UNDER THESE CIRCUMSTANCES, IT SHOWS THAT THE ASSESS EE HAS NOTHING TO SAY ON THAT MATTER, WITH REFERENCE TO TH E SAID SHOW-CAUSE NOTICE ISSUED U/S 251(2) OF THE ACT, TO THEM. THEREFORE, AND FOR THE REASONS STATED IN THE SAID S HOW-CAUSE 9 413 & 497/HYD/2012 B. NAGABHUSHANAM & OTHERS & B. NAGABHUSHANAM NOTICE, FURTHER AMOUNT OF RS.27,35,000/- SHALL BE A DDED TO THE ALREADY ASSESSED INCOME OF THE ASSESSEE U/S 68 OF THE ACT, WHICH WOULD RESULT IN CONSEQUENTIAL ENHANCEMEN T TO THE ASSESSED INCOME. THE AO IS DIRECTED ACCORDINGLY. 6 IN GROUND NO.3, THE ASSESSEE HAS STATED THAT THE AO ERRED IN CHARGING INTEREST U/S 234A, AT RS.31,407/-, U/S 2348 AT RSA8,735/- AND U/S 234C AT RSA,104/-. 6.1 THOUGH, SUCH GROUND HAS BEEN RAISED, NO SUBMISS ION HAS BEEN MADE BY THE ASSESSEE WITH REFERENCE TO THE SAM E DURING HEARING OF APPEAL. FURTHER, CHARGING OF INTE REST UNDER THE AFOREMENTIONED SECTIONS, ARE MANDATORY AND THE SAME ARE NOT APPEALLABLE. THEREFORE, THE SAID GROUND IS REJECTED. HOWEVER, CHARGING OF SUCH INTEREST BEING CONSEQUENT IAL TO THE ASSESSED INCOME, THE AO HAS TO RE-COMPUTE THE S AME, IN VIEW OF SUCH ENHANCEMENT OF INCOME OF RS.27,35,000/ -, MADE IN THIS CASE. 7. IN THE RESULT, NOT ONLY THE APPEAL IS DISMISSED, BUT ALSO THE INCOME IS ENHANCED BY AN AMOUNT OF RS. 27,35,00 0/- . 10. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSES SEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF A PPEAL: 1. THE ORDER OF THE CIT(A) IS ERRONEOUS BOTH ON FAC TS AND IN LAW. 2. THE CIT(A) ERRED IN DECIDING THE APPEAL EX-PARTE WITHOUT PROVIDING PROPER OPPORTUNITY TO THE ASSESSEE HEREIN . 3. THE CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY THE AO OF RS. 4,25,000/- 4. THE CIT(A) ERRED IN ENHANCING THE INCOME BY RS. 27,35,000/- WITHOUT PROVIDING PROPER OPPORTUNITY TO THE ASSESSEE HEREIN. 5. THE CIT(A) EXTRACTED A LETTER SAID TO HAVE BEEN ADDRESSED TO THE ASSESSEE WHEREIN THE ADDRESS OF THE ASSESSEE IS WRONGLY TAKEN. 6. THE CIT(A) OUGHT TO HAVE PROVIDED PROPER OPPORTU NITY BEFORE ORDERING ENHANCEMENT OF THE INCOME BY AN AMO UNT OF RS. 27,35,000/-. 11. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDE RS OF THE AUTHORITIES BELOW. THE MAIN GRIEVANCE OF THE LEARNE D COUNSEL FOR THE ASSESSEE IN THE GROUNDS OF APPEAL IS THAT THE C IT(A) DECIDED 10 413 & 497/HYD/2012 B. NAGABHUSHANAM & OTHERS & B. NAGABHUSHANAM THE APPEAL EX-PARTE WITHOUT PROVIDING PROPER OPPORT UNITY TO THE ASSESSEE AND CONFIRMED THE ADDITION OF RS. 4,25,000 /- MADE BY THE AO AND ENHANCED THE INCOME BY RS. 27,35,000/-. AFTER CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTA NCES OF THE CASE, TO MEET THE ENDS OF JUSTICE, WE FIND IT FIT A ND PROPER TO REMIT THE MATTER TO THE FILE OF THE AO WITH A DIREC TION TO DECIDE THE ISSUES DE-NOVO IN ACCORDANCE WITH LAW AND AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE ORDER ACCORDINGLY. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ITA NO. 497/HYD/12 APPEAL BY THE REVENUE 13. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL: 1. THE CIT(A) ERRED IN FACTS & IN LAW IN DELETING T HE ADDITION OF RS. 24.68 LACS REPRESENTING UNEXPLAINED CASH DEPOSITS IN THE BANK ACCOUNT NO. 18540 IN THE NAME OF THE INDIVIDUAL. 2. THE CIT(A) HAS SERIOUSLY ERRED IN FACTS & IN LAW IN HOLDING THAT THE TWO CASH WITHDRAWALS AGGREGATING TO RS. 26 LACS ON 01/10/2004 I.E. IN THE JOINT ACCOUNT NO. 18316 WERE THE SOURCE FOR NUMEROUS CASH DEPOSITS MADE IN THE INDIV IDUAL ACCOUNT IN THE NAME OF THE ASSESSEE STARTING FROM T HE PERIOD FROM 18/11/2004, THEREBY IGNORING THE SUBSTANTIAL G AP OF MORE THAN ONE AND HALF MONTHS BETWEEN THE CASH WITH DRAWAL IN ONE ACCOUNT AND THE CASH DEPOSIT MADE IN THE OTH ER ACCOUNT AND FURTHER IGNORING THAT THERE WAS NO EVID ENCE NOR CORROBORATION FOR SUCH VERSION OF THE ASSESSEE REQU ESTING FOR TELESCOPING, THAT THE JOINT ACCOUNT HAD BEEN CLOSED ON 05/10/2004. 3. THE CIT(A) SERIOUSLY ERRED IN FACTS & IN LAW IN IGNORING THAT THE CASH WITHDRAWALS AGGREGATING TO RS. 26 LAC S MADE IN THE JOINT ACCOUNT IN THE NAME OF SRI B. NAGABUSH ANAM AND SRI M. MALLAREDDY I.E. ON 01/10/2004 WERE EVIDE NTLY 11 413 & 497/HYD/2012 B. NAGABHUSHANAM & OTHERS & B. NAGABHUSHANAM PURPORTED AS TRANSFER TO OD/DD AS CLEARLY EVIDENCED BY THE NARRATION IN THE RELEVANT BANK ACCOUNT EXTRACT VIDE ANNEX-2 WHEREIN THE RELEVANT NARRATIVE ENTRY READS TR TO O D/DD. 4. THE CIT(A) HAS SERIOUSLY ERRED IN FACTS & IN LAW IN IGNORING THAT WHEREAS THE CASH WITHDRAWALS OF RS. 2 6 LACS IN THE JOINT ACCOUNT WERE MADE IN TWO INSTALMENTS ON A SINGLE DAY I.E. 01/10/2004, THE CASH DEPOSITS IN THE INDIV IDUAL ACCOUNT STARTING FROM 18/11/2004 WERE AS MANY AS 15 IN NUMBER RUNNING UP TO THE DATE 29/03/2005. 5. THE CIT(A) HAS ERRED IN FACTS & IN LAW IN ALLOWI NG THE ASSESSEES VERSION OF TELESCOPING CASH WITHDRAWALS IN THE JOINT ACCOUNT INTO CASH DEPOSITS INTO THE INDIVIDUA L ACCOUNT FOR WHICH THERE WAS ABSOLUTELY NO EVIDENCE OF ANY K IND ON RECORD NOR SUBMITTED BY THE ASSESSEE AT ANY TIME. 14. SINCE THE MATTER IN THE CASE OF SRI B. NAGABHUS HANAM & OTHERS, AOP (SUPRA) WE HAVE REMITTED THE MATTER TO THE FILE OF THE AO TO DECIDE THE ISSUES DE-NOVO, IN THIS CASE A LSO, WE REMIT THE MATTER TO THE FILE OF THE AO TO DECIDE THE SAME WITH IDENTICAL DIRECTIONS. 15. IN THE RESULT, THIS APPEAL OF THE REVENUE IS TR EATED AS ALLOWED FOR STATISTICAL PURPOSES. 16. TO SUM UP, BOTH THE APPEALS OF THE ASSESSEE AS WELL AS REVENUE ARE TREATED AS ALLOWED FOR STATISTICAL PURP OSES. PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER, 2012. SD/- SD/- ( CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 31 ST OCTOBER, 2012. KV 12 413 & 497/HYD/2012 B. NAGABHUSHANAM & OTHERS & B. NAGABHUSHANAM COPY TO:- 1) ACIT, CIRCLE 10(1), ROOM NO. 515, AC GUARDS, IT` TOWERS, HYDERABAD. 2) SMT. SUNITHA DEVI GAGGAR, PLOT NO. 158, ROAD NO. 12 , PHASE-II, GUNROCK ENCLAVE, SECUNDERABAD. 3) THE CIT(A)-VI, HYDERABAD 4) THE CIT-V, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D.