Narasimha Reddy Kotta , Secunderabad V. Income Tax Officer, Ward-8(2), Hyderabad

ITA 575/Hyd/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 1970 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB-A
• Assessment Year: 2007-2008
• Appeal Filed On: 21-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment
• Section: 133(6); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A’ Bench, Hyderabad Before Shri Rama Kanta Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member O R D E R Per Shri Laliet Kumar, J.M. This is the second round of litigation whereby the assessee has challenged the order passed by the Learned Commissioner of Income Tax (Appeals)-1, Hyderabad, dated 21.02.2019 for the AY 2007-08, on the following grounds (1) The order of the Ld Commissioner of Income Tax (Appeals)-1, Hyderabad ['CIT(A)'] in sustaining the addition of Rs. 421akhs is totally unsustainable both on facts and evidence on record. (2) The CIT (A) erred in confirming the addition of Rs. 42 lakhs while admitting the findings in the remand proceedings of the Assessing Officer in the first round of appeal and therefore, the addition of Rs. 42 lakhs must be deleted. - (3) The CIT (A) having found, as a matter of fact, that in the first round of appeal her predecessor CIT (A) had not given any reason for accepting the findings of the AO in the remand proceedings, and the Hon'ble Tribunal vide order dated 29.7.2016 arising out of ITA No. 384/H/16 'B' ITA No.575/Hyd/2019 Assessment Year: 2007-08 Narasimha Reddy Kotta Plot No.21 & 22 Flat No.302, 2 nd Floor Lahari Residency Shobana Colony West Maredpally Secunderabad-500 026 PAN : BXPPK4077C V s. ITO,Ward-8(2) Hyderabad (Appellant) (Respondent) Assessee by: Shri K.C.Devdas, CA Revenue by : Shri K.P.R.R.Murthy, Sr.AR Date of hearing: 28.06.2022 Date of pronouncement: 29.06.2022 2 ITA.No.575/Hyd/2019 Bench set-aside the appeal to the file of the CIT (A) to re-consider the same in accordance with law and adequate reasoning after taking into consideration the rejoinder of the appellant, erred in confirming the addition of Rs. 42 lakhs on the same ground as the predecessor. (4) The Ld CIT (A) not having disputed the identity of the lenders, genuineness of the transaction and creditworthiness of the persons who advanced the amounts to the appellant erred in confirming the addition of Rs, 42 lakhs. 2. The assessee has preferred an appeal before the Tribunal vide ITAT No.384/Hyd/2015, however the said appeal of the assessee was remanded by the Tribunal vide observation dated 29.07.2016 with the following directions “5. Having regard to the rival contentions and the material on record, we find that the assessee has explained the sources of Rs.14.00 lakhs as the sale proceeds he has received on sale of his land. Assessee has further submited the copies of the sale deed and also the bank statement to explain the source. However, neither the AO, nor the Cit (A) have commented on the acceptability or otherwise of the said source of income. Further as regards the creditworthiness of the creditors, we find that there are certain inconsistencies in their depositions before the AO in the remand proceedings, but the existence and the identity of the parties have clearly been established. Though the assessee has filed a rejoinder to the remand report, the CIT (A) has clearly not considered the same as there was no mention of the same in the order of the CIT (A). The CIT (A) has also not given any reason for accepting the findings of the AO in the remand proceedings. In view of the same, we deem it fit and proper to set aside the order of the CIT (A) and remand the same to the file of the CIT (A) for reconsideration in accordance with law after taking into consideration the rejoinder filed by the assessee. Needless to mention that the assessee shall be given a fair opportunity of hearing. The other two grounds with regard to the registration charges and the family expenditure shall be treated as properly explained in view of the bank a/c copy of the assessee and also the reply of Shri M.A. Mateen to the notice u/s 133(6) of the Act, in proof of the contention of the assessee that the sale proceeds of the land sold by the assessee was sufficient source for the said investment after verification of the same.” 3. Thereafter, in terms of remand order of the Tribunal , assessee appeared before ld.CIT(A) and filed various documents. The ld.CIT(A) vide impugned order had dismiss the appeal and confirmed the addition. The paragraph 10 of the ld.CIT(A) held as under:- 3 ITA.No.575/Hyd/2019 “ I have carefully considered the facts of the case, the assessment order, Remand report, submissions of appellant to the Remand Report and ITAT order. As per the Remand Report, even though the appellant submitted confirmation letters and sworn statement recorded by the AO, then also the Assessing Officer concluded these parties having no creditworthiness and genuineness and also concluded that the appellant received the advance money in cash neither the appellant carried out real estate business nor plot were sold nor repaid the amounts. Therefore, all the submissions furnished were not considered. Further, the appellant failed to furnish any confirmation letters or details in support of proof of creditworthiness of the two parties, i.e, Mr.K.Manik Reddy of Rs. 4 lakhs and Mr. Syed Yusuf of Rs.4 lakhs. Hence, all the submissions of appellant were not accepted and hence addition made by the Assessing Officer to the extent of Rs.42,00,000/- confirmed.” 4. Feeling aggrieved by the order, assessee is in appeal before us. At the outset, the ld. AR had submitted that the assessee had filed the additional documents before the Tribunal in support of the case of the assessee with part of the paper book No.3 wherein, the assessee had filled documents pertaining to Mr.K.Manik Reddy to prove creditworthiness etc 5. The ld. AR had drawn our attention to page 5 of the written submission, where the assessee has explained the status of each cash creditor in tabulation form which is to the following effect Name of the deponent Gist of statement Remark K Balwanth Reddy Rs.3,00,000 • Source of income from agriculture and salary of son. • Owns 7.25 acres of agricultural land and total yeild is Rs.12 lakhs during last 5 years • Net savings of Agri income is Rs. 50,000. To one lakhs for year for last 5 years. • No Bank account. • Admitted to have filed confirmation letter advancing RS.3,00,000 out of savings from agricultural income • Aware of real estate business of the assessee • Admitted to have seen the land taken for The derivations of AO as Jointed out in prepara (No.4) are incorrect as the witness has admitted to have advanced the amount, indicated the source and confirmed the same in the deposition. There is nothing in the statement that the Assessing officer in course of interrogation has been able to demolish the same except deriving some inference of his own. There is nothing in the report to prove that the creditworthiness is doubtful. Assessing officer stated that although he had given 4 ITA.No.575/Hyd/2019 development. • Not I T assessee confirmation letter for advance of RS.3,00,000, whereas in the sworn statement he has stated that he has given Rs4,00,000/-.This minor discrepancy has led the AO to belief that the transaction is not \ true. Having failed to counter the I evidence tendered / in examination, the Assessing Officer should not have disbelieved the statement of the deponent. G.Bhaktavatsalam Rs.3,50,000/- • Source of income from agriculture and floriculture • Owns 8.34 acres of agricultural land and total yeild is Rs.4 lakhs (net) per annum • Net savings of Agri income is Rs. 50,000 to one lakh for year for last 5 years. • Bank account maintained. • Admitted to have filed confirmation letter advancing Rs.3,00,000 out of savings from agricultural income • Aware of real estate business of the assessee • Admitted to have seen the land taken for development. • Not I T assessee The derivations of AO as pointed out in prepara (No.4) are incorrect as the witness has admitted to have advanced the amount, indicated the source and confirmed the same in the deposition. There is nothing in the statement that the Assessing officer in course of interrogation has been able to demolish the same except deriving some inference of his own. There is nothing in the report to prove that the creditworthiness IS doubtful. Assessing officer stated that the "deponent had given confirmation letter for RS.3,50,000,and in the sworn statement he has deposed that he paid Rs. 3,00,000/-. This statement of the AO ;s wrong. 0.11 of the statement states that I AO has shown confirmation I letter for Rs. 3,00,000. How AO could show confirmation letter of Rs. 3,00,000 which was not existing at all and again state in the remand report that the deponent has given confirmation letter for Rs. 3,50,000. This clearly manifests that AO has not paid proper 5 ITA.No.575/Hyd/2019 attention while examining the deponent. Having failed to counter the evidence tendered in examination, the Assessing officer should not have disbelieved the statement of the deponent K. Shankar Reddy Rs.4 lacs • Source of income is agriculture and dairy • Owns 15.14 acres of agricultural land • Agri income is Rs.1.5 lakhs for year for last 5 years. • Net savings is Rs.75,000/year • No bank account • Admitted to have filed confirmation letter advancing RS.4,00,000 • Admitted that the assessee had experience in real estate • Admitted to have seen the land taken for development • Not I T assessee The derivations of AO as pointed out in the prepara (No.4) are incorrect as the witness has admitted to have advanced the amount, indicated the source and confirmed the same in the deposition. There is nothing in the statement that the Assessing Officer in course of interrogation has been able to demolish the claim of various deponents except deriving some inference of his own. Therefore, truthfulness of the statements of witness cannot be assailed. K Manik Reddy Rs. 3lacs • Source of income is labour contract and agriculture • Owns 8 acres of agricultural land • Net savings of Agri income is Rs. 50,000 to Rs.1,50,000 for year for last 5 years. • Bank account maintained in one bank The derivations of AO as pointed out in prepara (No.4) are incorrect as the witness has admitted to have advanced the amount, indicated the source and confirmed the same in the deposition. The deponent is labour contractor and owns agricultural land, car et. There is nothing in the statement that the Assessing officer in course of interrogation has been 6 ITA.No.575/Hyd/2019 • Owns a car • Admitted to have filed confirmation letter advancing RS.3,00,000 • Admitted to have seen the land taken for development. • I T assessee able to demolish the same except deriving some inference of his own. There is nothing in the report to prove that the creditworthiness is doubtful. It has been mentioned that the deponent had advanced only Rs.3,00,000 but not Rs.4,00,000 as stated in the statement. Having failed to counter the evidence tendered in examination, the Assessing officer should not have disbelieved the statement of the deponent. Madan Mohan Reddy Rs.4 lacs • Source of income is agriculture floriculture, dairy and sheep breeding. • Owns 34 acres of agricultural land • Agri income is RS.1.5 lakhs for year for last 5 years. • Total income from agriculture is RS.5,00,000 and net saving per year RS.2,00,000 to RS.2,50,000 • Bank account maintained in one bank • Owns a car • Admitted to have filed confirmation letter advancing Rs.4,00,000 • Admitted to have seen the land taken for development. • Not I T assessee The derivations of AO as pointed out in prepara (No.4) are incorrect as the witness has admitted to have advanced the amount, indicated the source and confirmed the same in the deposition. The deponent is labour contractor and owns agricultural land, car et. There is nothing in the report to prove that the creditworthiness is doubtful. Having failed to counter the evidence tendered in examination, the Assessing Officer should not have disbelieved the statement of the deponent P.Dayananda Reddy Rs.4 lacs • Source of income is agriculture. The derivations of AO as pointed out in the prepara 7 ITA.No.575/Hyd/2019 • Owns 30 acres of agricultural land • Agri income (net) is Rs.zlakhs for year for last 5 years. • Net savings is RS.1,00,000/year • Bank account in one bank • Admitted to have filed confirmation letter advancing Rs.4,00,000 • Not I T assessee (No.4) are incorrect as the witness has admitted to have advanced the amount, indicated the source and confirmed the same in the deposition. There is nothing in the statement that the Assessing officer in course of interrogation has been able to demolish the same except deriving some inference of his own. Having failed to counter the evidence tendered in examination, the Assessing officer should not have disbelieved the statement of the deponent M.Madhav Reddy • Source of income is from Railway contract and agriculture Owns 10 acres of agricultural land. • Agri income is Rs.1 to .1.5 lakhs for year. • Net savings is RS.1,,25,000/year • Bank account • Admitted to have filed confirmation letter advancing Rs.4,00,000 • Admitted that the assessee had experience in real estate • Admitted to have seen the land taken for development. • I T assessee PANABOPM8153D • The most significant aspect of the sworn statement relates answer to Q.NO.6&7. The answer shows that the deponent possesses one car, a three The derivations of AO as! pointed out in the prepara (No.4) are incorrect as the witness has admitted to have advanced the amount, indicated the source and confirmed the same in the ! deposition. There is nothing in the statement that the Assessing officer through interrogation has been able to demolish the same except deriving some inference of his own. The most significant aspect of the statement relates to his creditworthiness as! pointed out in answer to Q.No.6 and 7. The extent of properties I acquired by him would show that he was a man of consideration means. As such a generalised I inference drawn by the I Assessing officer is farthest from . truth and contrary to facts t deposed. Having failed to counter the evidence tendered in examination, the Assessing Officer should not have disbelieved the statement 8 ITA.No.575/Hyd/2019 bed room flat 10 Acres of agri land shares in blue chip companies and bank account of the deponent. M.Sathi Reddy Rs.2.5 lacs • Source of income is agriculture and floriculture • Owns 4.12 acres of agricultural land • Net Agri income is Rs.1.80 lakhs for year for last 5 years. • Net savings is RS.1,00,000/year • One bank account • Admitted to have filed confirmation letter advancing RS.2,50,000 • Admitted to have seen the land taken for development • Not I T assessee The derivations of AO as pointed out in the prepara (No.4 ) are incorrect as the witness had admitted to have advanced the amount, indicated the Source and confirmed the same in the deposition. There is nothing in 1e statement that the Assessing Officer in course of interrogation has been able to demolish the same except deriving some inference of his own. Having failed to counter the evidence tendered in examination, the Assessing officer should not hive disbelieved the statement of the deponent K. Janardhan Reddy • Source of income from profession as an advocate and agriculture • Owns 21.37 acres of agricultural land • Net savings is Rs.1,00,000 to Rs.1,50,000/year • Bank account maintained • Admitted to have filed confirmation letter advancing RS.3,00,000 to the assessee. • Admitted that the assessee had experience in real estate. The derivations of AO as I pointed out in the prepara (No.4) I are incorrect as the Witness has admitted to have advanced the amount, indicated the Source and confirmed the same in the deposition. There is nothing in the statement that the Assessing officer through interrogation has been able to demolish the same except deriving some inference of his own. The most significant aspect of the statement relates to his creditworthiness as pointed out in answer to Q.No.6 and 7. The extent of properties acquired by him would show that he was a man of means. As 9 ITA.No.575/Hyd/2019 • Admitted to have seen the land taken for development • The most important point in the statement is the answer given to Q.N06 and 7. In the answer to these questions, the witness has stated that he owns two cars, a scooter, and four houses in addition to 31 acres of land. He has maintained 5 accounts in various banks • Income tax assessee having PAN AFWPK8436p such a generalised inference drawn by the Assessing officer is farthest from truth and contrary to facts deposed. Having failed to counter the evidence tendered in examination, the Assessing officer should not have disbelieved the statement of the deponent M.Yadava Reddy Source of income is agriculture and dairy • Owns 4.12 acres of agricultural I land • Agri income is Rs.75 thousand and dairy income Rs.75, 000 thousand for year for last 5 years. • Net savings is Rs.1,00,000/year • Bank account maintained • Admitted to have filed confirmation letter advancing Rs.2,00,000 • Admitted that the assessee had experience in real estate. • Admitted to have seen the land taken for development The derivations of AO as pointed out in the prepara(No.4) are incorrect as the witness has admitted to have advanced the . amount, indicated the source and confirmed the same in the deposition. There is nothing in the statement that the Assessing officer in course of interrogation has been able to demolish the claim of various deponents. except deriving some inference " of his own. Therefore, truthfulness of the statements of witness cannot be assailed. 6. The ld. AR for the assessee had submitted that the assessee has proved all the three ingredients of section.68 namely, identity (as the ld. AO has recorded the statement of all these persons during the assessment proceedings page No.19) onwards and 10 ITA.No.575/Hyd/2019 further the assessee had proved , the genuineness as these 10 persons had filled confirmation letters and creditworthiness ( as all these 10 persons were having land holding of sizeable sizes ). Thus assessee had discharged the onus , hence the order of ld.CIT(A) is required to be annulled and appeal of the assessee is to be allowed . The ld. AR, relied upon the decision of the Hon’ble Supreme Court in the case of CIT vs. Orissa Corporation (P) Ltd. 159 ITR 78, Anis Ahmad & sons vs CIT 297 ITR 441(SC), Tek Ram vs CIT 357 ITR 133(SC),, DCIT vs. Rohini Builders 256 ITR 360(Guj.HC), Addl.CIT vs. Bahri Brothers(P) Ltd. 154 ITR 244(Patna.HC), Khandelwal constructions vs. CIT 227 ITR 900 (Gauhati HC) and CIT vs. Text Hundred India(P) Ltd. (Del.HC) decisions in support of the case. 7. Further Ld.AR for the assessee had drawn our attention to the written submission filed by the assessee in support of the case on merit, it was submitted by the Ld.AR in the written submission that “2. Brief background leading to filing of appeal: Before offering the comments, we submit, in brief, the facts of the case leading to filing of appeal and CIT's direction to call for the remand report from the Assessing officer Assessee had entered into an agreement for purchase of land at Jalpalli Village, Saroornagar mandal, along with one Mr V T Vijaykumar and wished to jointly develop the same into housing plots. For this purpose, he paid RS.56,00,000 to land owners towards his share in the consideration and also paid the relevant share of stamp duty i.e. Rs.25,000. These amounts were met out of the funds from the following sources: (i) Rs.42,00,000 - Advance received from prospective buyers(12 parties) (ii)Rs.18,00,000 - Received back from Matheen of Akbarbag to whom the amount was advanced out of sale proceeds of agricultural lands by the appellant. 3. During the course of assessment the Assessing officer failed to give any opportunity to produce further r details to substantiate the claim of receiving advances which was utilized for purchase of land. While the assessee was in the process of collecting relevant details, the assessment was completed without affording sufficient time to prove the claim, No show cause notice was issued before addition. This resulted in making following additions. 11 ITA.No.575/Hyd/2019 (a)Unaccounted investment in land RS.56,00,000 (b) Unaccounted payment of stamp duty Rs. 25,000 (c) Family expenditure Rs, 1,75,000 3.1. Reasons for addition: The Assessing officer made the addition of advances of Rs,42,00,000 for the reason that advances were received in cash, that the venture did not take off, that advance amounts were not returned to various parties and that as on the date of receiving advances, the assessee did not hold any land but collected the advances. AO all along proceeded with wrong assumption that the amounts were received towards purchase of flat which is not correct since these advances were received from prospective buyer to buy developed house plots, With the above view the Assessing officer treated the advances of Rs.42,00,000 as unexplained investment without giving adequate opportunity to file details. As regards the balance sum of RS.14,00,000, the same was out of sale proceeds of agricultural land for Rs.18,75.000/- This amount was advanced to one Matheen. Appellant received back the entire amount and the same was used in purchase of land for development into plots. It was the allegation of the AO that the assessee failed to produce the sale deed to prove his contention. Therefore, he treated the amount as unexplained. Here also adequate opportunity was not given to produce the document. The Assessing officer made a further addition of Rs.25,000 towards stamp duty for purchase of land proposed to be developed for the reason that the assessee failed to produce any evidence when the assessee was not asked for furnishing the source. The Assessing officer made an addition of Rs.1,75,000 towards unexplained house hold expenditure without giving any valid reasons and without asking the assessee to furnish any explanation. 4. Remand report and appellant's response: In course of appeal, the appellant contested all the additions. The learned CIT(A) called for a remand report from the Assessing officer and directed the AO to examine the persons who had advanced amounts to the assessee for purchase of land as the same was not done at the time of assessment and sufficient opportunity was not afforded to the assessee. Accordingly, these persons were summoned and examined. After collecting evidence from them, the Assessing officer in the remand report, is of the opinion that the amount of Rs.42,00,000 need be added to the income of the assessee as he was not satisfied with the facts stated in the deposition, although all the deponents affirmed to have given advance. The argument of the Assessing officer as indicated in the remand report to reach such an inference against the appellant are indicated below: (a) The persons who have advanced amounts were not income tax assessees. (b) The plea of agriculture income, which constituted the source of advance, is not believable. AO was of the opinion that after meeting their domestic expenses, there could be no savings to advance amounts. 12 ITA.No.575/Hyd/2019 (c) AO was of the opinion that the assessee was not in the business of real estate being an agriculturist. (d) No agreement was entered into with the prospective buyers who have advanced the amounts. (e) Approval was not obtained from HUDA for the proposed activity in real estate (D All the witnesses were 'heavily tutored'. (g) Amounts advanced are outstanding. (h) Transactions were made in cash but not through bank (i) The persons advancing the money had not seen the plots. (j) Their house hold expenses were not known (k) The assessee failed to substantiate the capacity of the persons to make advances. (l) It was observed that it was not possible to accept that villagers kept cash with them although some of them had bank accounts. (m) In and around the date of proposed purchase of land in July 2006, the assessee did not possess land which was purchased in October 2006. (n) The assessee did not have experience in real estate activities. (o) No development was effected and development agreement was cancelled. (p) The assessing officer relied on the decision in the case of Durga Prasad More 82 ITR 540(8C) and 8mt 8umati Dayal v CIT 214 ITR 801 8C to advance the theory of human probability that the version of the assessee is not correct. “ 8. On the other hand, the ld. DR had submitted that despite sufficient opportunity granted to the assessee, the assessee was not able to prove the genuineness and creditworthiness of these persons. 9. We have heard the rival contentions and gone through the records. In the present case, the assessee has received a sum of Rs. 42 lacs from the following persons 1. K.Balwanth Reddy 2.g.Bhaktavatsalam 3.K.Shankar Reddy 4.K.Manik Reddy 5.Madan Mohan Reddy 6.P.Dayananda Reddy 7.M.Madhav Reddy 8.M.Sathi Reddy 9.K.Janardhan Reddy 10.M.Yadava Reddy 11.Mr.K.Manik Reddy 13 ITA.No.575/Hyd/2019 12.Mr. Syed Yusuf 10. However, Mr.K.Manik Reddy and Mr. Syed Yusuf could not appear before the AO or before the ld.CIT(A) in the remand proceedings. Now, it is also the case of the ld. AR in the written submissions that Mr. Mahipal Reddy has already submitted his confirmation letter before us. The said confirmation letter was filed by the ld.AR for the assessee along with the covering letter dated 10.02.2022. The content of the said letter are as under:- Dated:10/02/2022 To The Assistant Registrar Income Tax Appellate Tribunal,’A’ Bench Room No.502 & 503, V Floor, CGO Towers Kavadiguda, Secunderabad-500 080 Dear Sir, Sub: I. T.A. T Appeal- Narasimha Reddy Kotta - Assessment Year 2007 - 2008 -ITA No. 575/H/2019 - Filing of Confirmation letters - Reg:- *********** In connection with the above appeal of Narasimha Reddy Kotta which is posted on 17.02.2022. We are forwarding herewith the confirmation letter presently received from Mahipal Reddy, Shankar Reddy and Madan Mohan Reddy. These partake the character of additional evidence which may kindly be admitted as it explains the genuineness of the transaction with the aforesaid persons. Please acknowledgment the receipt. 11. In our considered opinion for the purpose of treating any document and any additional evidence, it is essential to fulfill the requirement of law as provided under Income Tax Rule . The income tax of Tribunal Rule 29 provides as under:- “The parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal, but if the Tribunal requires any document to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or ,if the income-tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by 14 ITA.No.575/Hyd/2019 them, the Tribunal, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced.” 12. From the perusal of the Rule 29 reproduced hereinabove, it is abundantly clear that the assessee is required to demonstrate that the evidence now sought to be produced was not produced as sufficient opportunity to the assessee to adduced the evidence either on the point specified by them or not specified by them were not provided. In the present case, the assessee was afforded sufficient opportunity in the first round before the AO and ld.CIT(A) in the first round. Thereafter the opportunity was provided before the Tribunal in the ITA No.384/Hyd/2015 . Thereafter before the ld.CIT(A) at the time of remand proceedings. Thus despite having opportunities at 4 forums earlier, the assessee has failed to produce any evidence. Now, the assessee sought to file these documents by way of additional evidences after passing of more than ten of years of the initial assessment year, which took place in the year 2013. In our view, the assessee has failed to demonstrate the reasonable cause for not providing the documents at the appropriate stage more particularly last ten years. In light of the above, we do not find any merit for admitting these and accordingly, the addition in respect of these two persons namely Mr. Mahipal Reddy and Syed Yusuf amounting to Rs.8 lacs ie. Rs. 4 lacs are confirmed. 12.1 With respect to the remaining ten persons, the ld. AR has drawn our attention to the statement recorded by the AO, the confirmation letter given by the said persons. 13. In fact, the assessee had filed confirmation letters before the Tribunal as well as before the lower authority . We are collating both the confirmation letters and the statement in the tabulation form which is as under:- 15 ITA.No.575/Hyd/2019 Name of the person Amount given to the assessee as per the recorded statement before AO Amount confirmed in the first confirmation letter Amount confirmed in the second confirmation letter. Contradiction Kotha Balwanth Reddy Rs.4 lacs 3 lacs 5 lacs Yes Bhaktavatsalam 3 lacs 3.5 lacs 3.5 lacs Yes K.Shankar Reddy 4 lacs 4 lacs No confirmation letter Yes Kotha Manik Reddy 4 lacs 4 lacs 5 lacs Yes A.Madanmohan Reddy 4 lacs 4 lacs No confirmation letter Yes P.Dayananda Reddy 4 lacs 4 lacs 5 lacs Yes Mothe Madhav Reddy 4 lacs 4 lacs 4 lacs No M.Sathi Reddy 2.5 lacs 2.5 lacs 2.5 lacs No K.Janardhan Reddy 3 lacs 3 lacs 3 lacs No M.Yadava Reddy 2 lacs 2lacs 2 lacs No 14. From the perusal of the above tabulation, it is clear that there is a variation in the statement given before the AO and the two sets of confirmation letters given by the agriculturist. Therefore, wherever there is a contradiction in the statement and the confirmation letter, the said amounts are required to be added to the income of the assessee. 15. The assessee has claimed before us that the entire payments have been returned back through account payee cheque/RTGS to the above said persons and our attention was drawn to paper book-II wherein the statement of the bank for the period 1.4.2019 to 1.03.2020 have been produced. However, the same in our opinion has got no relevance. We have perused the material and also the order passed by the ld.CIT(A). In fact the assessee has produced the 10 persons mentioned hereinabove and the statements of these 10 persons were also recorded whereby the 16 ITA.No.575/Hyd/2019 assessee has sought to prove the genuineness, identity and creditworthiness of these 10 persons. However, in our view since there is variance in the statement recorded by the Assessing Officer and the confirmation letters filed by the loan creditors, we are of the opinion that an addition for an amount of Rs. 30.5 lacs is required to be upheld. This amount includes the amount paid by the two persons namely Mr. Mahipal Reddy and Mr.Syed Yusuf who have failed to appear before the AO and amounting to Rs. 8 lacs. The balance addition of Rs.11.5 lacs is required to be deleted as there is no contradiction in the statement and confirmation of four persons namely Mr. Mothe Madhav Reddy, Mr. M.Sathi Reddy, Mr.K. Janardhan Reddy and M. Yadava Reddy, who appeared before the AO and confirmed to have given the loan. The assessee gets the relief of Rs.11.5 lacs. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the Open Court on 29 th June, 2022. Sd/- Sd/- (RAMA KANTA PANDA) ACCOUNTANT MEMBER (LALIET KUMAR) JUDICIAL MEMBER Hyderabad, dated 29 th June, 2022. Thirumalesh/sps Copy to: S.No Addresses 1 Narasimha Reddy Kota,Plot No.21 & 22 Flat No.302, 2 nd Floor,Lahari Residency Shobana Colony,West Maredpally Secunderabad-500 026 2 ITO,Ward-8(2),Hyderabad 3 CIT(A)-1/ Pr.CIT-5, Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order