Annapurna Rice & Floor Mill, Narasannapet V. ITO, Narasaraopeta

ITA 72/VIZ/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50162 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-04-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 12-02-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R K SINGH
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 68

Judgement Text

ITA NOS.72 TO 75 OF 09 ANNAPURNA RICE & FLOUR MILLS, NARASARAOPET 1 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO. 72 /VIZAG/ 20 09 ASSESSMENT YEAR : 2005 - 06 ANNAPURNA RICE & FL OUR MILL NARASARAOPET VS. ITO WARD - 1 NARASARAOPET (APPELLANT) (RESPONDENT) PAN NO.AAIFA 0751E ITA NO.73/VIZAG/2009 ASSESSMENT YEAR : 2005 - 06 MARUTI RICE WORKING COMPANY NARASARAOPET VS. ITO WARD - 1 NARASARAOPET (APPELLANT) (RESPONDENT) PAN NO.A A KF M 4741L ITA NO.74/VIZAG/2009 ASSESSMENT YEAR : 2005 - 06 NAGESWARA RICE WORKING COMPANY NARASARAOPET VS. ITO WARD - 1 NARASARAOPET (APPELLANT) (RESPONDENT) PAN NO.AACFN 8118Q ITA NO.75/VIZAG/2009 ASSESSMENT YEAR : 2005 - 06 KANYAKA PARAMESWAR I RICE & DALL MILL NARASARAOPET VS. ITO WARD - 1 NARASARAOPET (APPELLANT) (RESPONDENT) PAN NO.AACFK 4822E APPELLANT BY: SHRI G.V.N. HARI, CA RESPONDENT BY: SHRI R.K. SINGH, DR ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- THESE APPEALS ARE PREFERRED BY THE DIFFERENT ASSE SSEES AGAINST THE RESPECTIVE ORDER OF THE CIT(A). SINCE COMMON ISSUE S ARE INVOLVED IN THESE APPEALS, THEY WERE HEARD TOGETHER AND ARE BEING DIS POSED OF THROUGH THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS.72 TO 75 OF 09 ANNAPURNA RICE & FLOUR MILLS, NARASARAOPET 2 2. WE HOWEVER, PREFER TO ADJUDICATE THESE APPEALS O NE AFTER THE OTHER. ITA NO.72 OF 2009: 3. IN THIS APPEAL, THE ORDER OF THE CIT(A) IS CHALL ENGED MAINLY ON 4 GROUNDS AND FIRST GROUND RELATE TO THE ADDITION OF RS.7,90,000/- MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT. OUR ATTENTION WAS INVITED TO THE ORDER OF THE ASSESSING OFFICER WITH THE SUBMISSION THAT DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, SOME CASH CREDITS WERE FOUN D IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND WHEN THE ASSESSEE WAS ASKED TO EXPLAIN THE GENUINENESS OF THESE CASH CREDITS, IT HAS FILED THE BUNCH OF LETTERS ON 7.12.2007 WHICH WERE NOT DULY EXAMINED BY THE A.O. AND HE HAS MADE THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT AFTER HAVING OBSERVED THAT AT THIS TIME BARRING STAGE IT IS NOT POSSIBLE TO VERIFY THE GENUINENESS OF ALL THESE CASH CREDITORS. 4. THE CIT(A) DID NOT VERIFY THE GENUINENESS OF THE CREDITORS EITHER BY HIMSELF OR THROUGH THE ASSESSING OFFICER BY CALLING A REMAND REPORT AND HE CONFIRMED THE ADDITIONS. THE LD. COUNSEL FOR THE A SSESSEE HAS SUBMITTED THAT SINCE THE CONFIRMATIONS FILED BY THE ASSESSEE WITH RESPECT TO THE GENUINENESS OF CASH CREDITS WERE NOT PROPERLY EXAMINED BY THE L OWER AUTHORITIES, THE MATTER MAY BE SENT BACK TO THE ASSESSING OFFICER FO R RE-ADJUDICATION OF THE ISSUE BY MAKING A NECESSARY VERIFICATION OF THE DOC UMENTS FILED BY THE ASSESSEES. 5. THE REVENUE DID NOT HAVE ANY OBJECTION TO THIS P ROPOSITION. 6. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM CARE FUL PERUSAL OF THE ORDER OF THE LOWER AUTHORITIES, WE FIND THAT IN RES PONSE TO QUERY RAISED BY THE A.O., ASSESSEE HAS FILED THE BUNCH OF LETTERS ON 7. 12.2007 AND THE ASSESSMENT WAS FRAMED ON 10.12.2007. IN THE ASSESS MENT ORDER THE A.O. HIMSELF HAS OBSERVED THAT AT THE TIME BARRING STAGE , IT IS NOT POSSIBLE TO VERIFY THE GENUINENESS OF ALL THESE CREDITORS. MEANING TH EREBY, THE EVIDENCE FILED BY THE ASSESSEE WITH REGARD TO THE GENUINENESS OF C ASH CREDITS WERE NOT DULY ITA NOS.72 TO 75 OF 09 ANNAPURNA RICE & FLOUR MILLS, NARASARAOPET 3 EXAMINED BY THE ASSESSING OFFICER. EVEN THE CIT(A) DID NOT TAKE ANY TROUBLE TO EXAMINE THE EVIDENCE EITHER BY HIMSELF OR THROUG H THE ASSESSING OFFICER IN REMAND PROCEEDINGS AND HE CONFIRMED THE ADDITIONS. WE THEREFORE OF THE VIEW THAT THE EVIDENCE FILED BY THE ASSESSEE WERE N OT PROPERLY EXAMINED BY THE LOWER AUTHORITIES AND THE ISSUE REQUIRES FRESH ADJUDICATION. WE ACCORDINGLY, SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE A.O. FOR RE-ADJUDICATION OF THE IMPUGNE D ISSUE IN THE LIGHT OF THE EVIDENCE FILED BY THE ASSESSEE. 7. NEXT GROUND RELATE TO AN ADDITION OF RS.4,60,000 /- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF OUTSTANDING CREDITS IN THE NAME OF THE FARMERS DURING THE PREVIOUS YEAR RELEVANT TO THE IMPUGNED A SSESSMENT YEAR. IN THIS REGARD, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMIT TED THAT THE ASSESSING OFFICER HAS CONDUCTED THE ENQUIRY THROUGH THE INSPE CTOR WITH REGARD TO THE CREDITS SHOWN IN THE BOOKS OF ACCOUNTS OF THE ASSES SEES AND THE FARMERS HAVE STATED THAT THEY HAVE SOLD THE PADDY THROUGH L OCAL BROKERS AND THEY HAVE RECEIVED THE ENTIRE PROCEEDS OF PADDY SALES IM MEDIATELY WITHIN 15 DAYS OF THE SALE OF PADDY. RELYING UPON THIS STATEMENT, THE ASSESSING OFFICER HAS TREATED THE CREDITS SHOWN IN THE NAME OF THE FARMER S IN THE BOOKS OF ACCOUNTS OF THE ASSESSEES AS UNEXPLAINED AND MADE T HE ADDITION OF THE SAME. 8. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT( A) BUT DID NOT FIND FAVOUR WITH HIM. 9. NOW THE ASSESSEE IS BEFORE US WITH THE SUBMISSIO N THAT WHATEVER ENQUIRY WAS CONDUCTED BY THE ASSESSING OFFICER EITH ER BY HIMSELF OR THROUGH INSPECTOR, IT WAS NEVER CONFRONTED TO THE ASSESSEES . EVEN THE ASSESSEE WAS NOT GIVEN SUFFICIENT TIME TO EXPLAIN THE AFORESAID CREDITS, THEREFORE, THIS MATTER MAY BE SENT BACK TO THE A.O. FOR RE-ADJUDICA TION OF THE ISSUE AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE. 10. THE LD. D.R. DID NOT RAISE ANY OBJECTION TO THI S PROPOSITION OF THE ASSESSEES. ITA NOS.72 TO 75 OF 09 ANNAPURNA RICE & FLOUR MILLS, NARASARAOPET 4 11. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A C AREFUL PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES, WE FIND THAT THE A SSESSING OFFICER HAS MADE AN ADDITION ON THE BASIS OF THE ENQUIRY CONDUCTED B Y THE INSPECTOR FROM THE FARMERS. THE STATEMENT RECORDED BY THE INSPECTOR A ND OTHER EVIDENCE COLLECTED BY HIM WERE NOT CONFRONTED TO THE ASSESSE E; THEREFORE, WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE, MATTER MA Y BE REMANDED BACK TO THE ASSESSING OFFICER FOR RE-ADJUDICATION OF THE IMPUGN ED ISSUE AFTER PROVIDING A COPY OF EVIDENCE COLLECTED BY THE INSPECTOR TO THE ASSESEES. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE M ATTER TO THE FILE OF THE A.O. WITH A DIRECTION TO RE-ADJUDICATE THE IMPUGNED ISSU E AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEES. 12. NEXT GROUND RELATE TO THE ADDITION OF RS.50,000 /- BEING DISALLOWANCE ON ACCOUNT OF COOLIE CHARGES MADE ON ESTIMATE BASIS . IN THIS REGARD, OUR ATTENTION WAS INVITED TO THE ORDER OF THE ASSESSING OFFICER WITH THE SUBMISSION THAT THE A.O. HAS MADE AN ADDITION ON ADHOC BASIS A FTER HAVING OBSERVED THAT THE EXPENSES BOOKED BY THE ASSESSEES ARE ON SELF-MA DE VOUCHERS. WE HAVE EXAMINED THE ORDERS OF LOWER AUTHORITIES AND WE FIN D THAT ASSESSEE HAS CLAIMED AN EXPENDITURE OF RS.2,54,636/- UNDER THE H EAD MUTHA COOLIES. ON VERIFICATION, IT WAS NOTICED BY THE A.O. THAT THESE EXPENSES WERE CLAIMED ON SELF-MADE VOUCHERS. SINCE THE EXPENSES WERE NOT OP EN FOR VERIFICATION, THE A.O. HAS MADE A DISALLOWANCE OF RS.50,000/-. NOW T HE ASSESSEE CONTENDS THAT DISALLOWANCE IS ON HIGHER SIDE. KEEPING IN VI EW THE TOTALITY OF THE FACTS, WE FIND THAT THE DISALLOWANCE IS ABOUT 20% OF THE T OTAL CLAIM OF THE ASSESSEES WHICH APPEARS US TO BE ON HIGHER SIDE. WE ACCORDIN GLY, RESTRICT THE SAME TO RS.40,000/-. 13. NEXT GROUND RELATE TO THE ADDITION OF RS.1,36,1 09/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF INTEREST PAYMENTS. I N THIS REGARD, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASS ESSEE HAS PAID THE INTEREST OF RS.1,36,109/- TO VARIOUS CREDITORS AND TDS WAS NOT DEDUCTED BECAUSE ALL THE CREDITORS HAVE FURNISHED THE FORM-1 5H. SINCE THE FORM-15H WAS NOT FILED BEFORE THE COMMISSIONER OF INCOME TAX , THE ASSESSING OFFICER HAS DISALLOWED THE ENTIRE PAYMENT OF INTEREST. THE LD. COUNSEL FOR THE ITA NOS.72 TO 75 OF 09 ANNAPURNA RICE & FLOUR MILLS, NARASARAOPET 5 ASSESSEE HAS SUBMITTED THAT IT WAS STATED BEFORE TH E ASSESSING OFFICER THAT IT HAS FILED THE 15H FORMS BEFORE THE CONCERNED AUTHOR ITIES BUT THEY COULD NOT TRACE OUT THE POSTAL CERTIFICATE. IN THE ABSENCE O F THIS EVIDENCE, THE ASSESSING OFFICER DISALLOWED THE ENTIRE PAYMENT OF INTEREST EVEN WITHOUT LOOKING TO THE FACT THAT ASSESSEE HAS FILED THE 15H FORMS OF ALL THE CREDITORS BEFORE THE A.O. 14. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) BUT DID NOT FIND FAVOUR WITH HIM. 15. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT ONCE FORM 15H WAS FURNISHED TO THE ASSESSEE, HE IS DEBARRED FROM DEDUCTING THE TDS ON PAYMENT OF INTEREST. THE ASSESSEE ACTED IN ACCORDA NCE WITH LAW, THEREFORE, THE ENTIRE PAYMENT CANNOT BE DISALLOWED ONLY FOR TH E SIMPLE REASON THAT THE 15H FORMS WERE NOT SUBMITTED TO THE CIT. FOR NON-S UBMISSION OF THE FORMS TO THE CIT CONSEQUENCES ARE DIFFERENT AND NOT A DIS ALLOWANCE OF ENTIRE PAYMENT. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO INVITED OUR ATTENTION TO THE CERTIFICATE OF POSTING FOUND LATER ON TO PROVE THAT THESE FORMS WERE SENT THROUGH POST TO CIT. SINCE THIS EVIDENCE WAS NOT A VAILABLE AT THE TIME OF ASSESSMENT PROCEEDINGS, THE MATTER MAY BE SENT BACK TO THE A.O. FOR VERIFICATION OF THE FACTS ABOUT THE SUBMISSION OF T HE FORMS TO THE CIT. 16. THE LD. D.R. ON THE OTHER HAND HAS PLACED A HEA VY RELIANCE UPON THE ORDER OF THE CIT(A). THE LD. D.R. HOWEVER AGREED T HAT THE MATTER MAY BE SENT BACK TO THE A.O. FOR VERIFICATION OF THE FACTS . 17. HAVING CAREFULLY GONE THROUGH THE RECORD IN TH E LIGHT OF RIVAL SUBMISSIONS, WE FIND THAT THE A.O. HAS MADE THE DIS ALLOWANCE OF THE ENTIRE PAYMENT OF INTEREST ON THE GROUND THAT FORM 15H OBT AINED FROM THE CREDITORS WERE NOT SUBMITTED TO THE CIT. NOW THE ASSESSEE HA S GOT THE EVIDENCE ABOUT THE POSTAGE OF THE 15H FORM TO THE CIT. THIS ISSUE REQUIRES A FRESH VERIFICATION BY THE A.O. MOREOVER, THE LEGAL ARGUM ENTS OF THE ASSESSEE THAT FOR NON-FURNISHING THE 15H FORM BEFORE THE CIT, CON SEQUENCES MAY BE DIFFERENT AND NOT A DISALLOWANCE OF THE ENTIRE PAYM ENT OF INTEREST ALSO ITA NOS.72 TO 75 OF 09 ANNAPURNA RICE & FLOUR MILLS, NARASARAOPET 6 REQUIRES A PROPER ADJUDICATION. WE THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE A. O. WITH A DIRECTION TO RE- ADJUDICATE THE ISSUE AFRESH IN THE LIGHT OF NEW EVI DENCE FILED BY THE ASSESSEE. ITA NO.73 OF 2009: 18. THROUGH THIS APPEAL, THE ORDER OF THE CIT(A) IS ASSAILED ON FOUR GROUNDS AND FIRST GROUND RELATE TO THE ADDITION OF RS.4,89,267/- OF THE UNEXPLAINED CREDITS. THE FACTS AND ARGUMENTS ARE S IMILAR AS SUBMITTED IN EARLIER APPEAL. THE PARTIES TO THE APPEALS HAVE AG REED THAT THIS MATTER MAY BE SENT BACK TO THE FILE OF THE A.O. FOR RE-ADJUDIC ATION OF THE ISSUE AFTER AFFORDING A PROPER OPPORTUNITY OF BEING HEARD FOLLO WING THE ORDER IN THE FOREGOING APPEAL. WE HOWEVER, CAREFULLY EXAMINED T HE ORDER OF LOWER AUTHORITIES ON THIS ISSUE AND WE FIND THAT THE FACT S OF THE CASE ARE SIMILAR TO THAT OF EARLIER APPEAL AND WE ACCORDINGLY FOLLOWING THE ORDER IN FOREGOING APPEAL, SET ASIDE THE ORDER OF CIT(A) AND RESTORE T HE MATTER TO THE FILE OF THE A.O. WITH A DIRECTION TO RE-ADJUDICATE THE ISSUE AF RESH AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEES. 19. NEXT GROUND RELATE TO THE ADDITION OF RS.1,60,0 00/- BY THE ASSESSING OFFICER ON ACCOUNT OF INTRODUCTION OF CAPITAL DURIN G THE PREVIOUS YEAR RELEVANT TO THE IMPUGNED ASSESSMENT YEAR. 20. IN THIS REGARD, THE A.O. HAS NOTICED DURING THE ASSESSMENT PROCEEDINGS THAT ASSESSEE HAS INTRODUCED THE FRESH CAPITAL IN T HE NAME OF ITS 3 PARTNERS OF RS.3,40,000/-. THE DETAILS OF FRESH CAPITAL INTROD UCED ARE AS UNDER: 21. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF DEPOSITS IN THE FIRM AND ASSESSEE HAS FURNISHED THE EXPLANATIONS WHICH W ERE DULY EXAMINED BY THE ASSESSING OFFICER. WHEREVER SOURCE OF DEPOSITS WERE EXPLAINED, IT WAS S.NO. NAME OF THE PARTNER AMOUNT IN RS. 1. SRI BADAM VENKATA SUBRAMANYAM 16,000 2. SRI BADAM NARAYANA MUR THY 2,00,000 3. SRI MADDALI GURUNADHAM 44,000 4. KAIVA SUJATHA 80,000 TOTAL 3,40,000 ITA NOS.72 TO 75 OF 09 ANNAPURNA RICE & FLOUR MILLS, NARASARAOPET 7 ACCEPTED BY THE A.O. BUT WHERE THE ASSESSEE HAS FAI LED TO EXPLAIN THE SOURCE, THE DEPOSITS WERE TREATED TO BE UNEXPLAINED INCOME OF THE FIRM AND TOTAL ADDITION OF RS.1,60,000/- WAS MADE IN THE HANDS OF THE FIRM. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) BUT DID NOT F IND FAVOUR WITH HIM. 22. NOW THE ASSESSEE IS BEFORE US WITH THE SUBMISSI ON THAT WHERE THE PART OF THE DEPOSITS OF THE PARTNERS IN THE FIRM WAS ACC EPTED TO BE GENUINE, THE REMAINING PART CANNOT BE CONSIDERED TO BE THE UNEXP LAINED INCOME OF THE PARTNERSHIP FIRM. AT THE MOST THE ADDITION CAN BE MADE IN THE HANDS OF THE INDIVIDUAL PARTNERS. HE HAS FURNISHED ALL THOSE EX PLANATIONS OF THE SOURCE OF DEPOSITS, WHICH WERE ALREADY FURNISHED BEFORE THE L OWER AUTHORITIES. 23. THE LD. D.R. ON THE OTHER HAND HAS SUBMITTED TH AT NOW IT IS A SETTLED POSITION OF LAW THAT IF THE PARTNERS HAVE FAILED TO EXPLAIN THE SOURCE OF DEPOSIT IN THEIR CAPITAL ACCOUNT, THE ADDITION CAN BE MADE IN THE HANDS OF THE PARTNERSHIP FIRM AS UNEXPLAINED INCOME U/S 68 OF TH E ACT. THE ASSESSING OFFICER HAS ACCEPTED THE PART OF DEPOSITS WHICH WAS DULY EXPLAINED BY THE ASSESSEES. WHEN THE ASSESSEE COULD NOT PLACE THE C ORRESPONDING EVIDENCE OF THE DEPOSITS, IT WAS TREATED TO BE UNEXPLAINED INCO ME OF THE PARTNERSHIP FIRM BY THE ASSESSING OFFICER. THEREFORE, THERE IS NO I LLEGALITY OR AMBIGUITY IN THE ORDER OF THE LOWER AUTHORITIES. 24. HAVING CAREFULLY EXAMINED THE ORDER OF THE LOWE R AUTHORITIES, WE FIND THAT PARTNERS OF THE FIRM HAVE INTRODUCED THE FRESH CAPITAL IN THE PARTNERSHIP FIRM. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS ASKED THE ASSESSEE TO FURNISH THE SOURCE OF DEPOSIT S. THE SOURCES EXPLAINED BY THE ASSESSEE WERE PROPERLY EXAMINED BY THE A.O. AND HE HAS ACCEPTED THE DEPOSITS WHICH WERE DULY EXPLAINED. WHERE THE ASSE SSEE FAILED TO EXPLAIN THE PROPER SOURCE OF DEPOSITS HE TREATED THAT AMOUNT TO BE UNEXPLAINED INCOME OF THE PARTNERSHIP FIRM. NOW IT IS A SETTLED POSIT ION OF LAW THAT WHEREVER THE PARTNERS OF THE FIRM FAILED TO EXPLAIN THE SOURCE O F CONTRIBUTION TO THE CAPITAL ACCOUNT, THE ADDITION CAN BE MADE IN THE HANDS OF T HE FIRM U/S 68 OF THE ACT. IN THE INSTANT CASE, THE PART OF DEPOSITS WERE DULY EXPLAINED AND IT WAS ACCEPTED BY THE A.O. THE ADDITIONS WERE MADE WITH REGARD TO ONLY THOSE ITA NOS.72 TO 75 OF 09 ANNAPURNA RICE & FLOUR MILLS, NARASARAOPET 8 DEPOSITS, WHICH WERE NOT DULY EXPLAINED BY THE PART NERS OF THE FIRM. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE LOWER AUTHORITIES. WE DO NOT FIND FORCE IN THE CONTENTION OF THE ASSESSEE TH AT ONCE THE PART OF THE DEPOSITS ARE ACCEPTED, THE BALANCE DEPOSIT CANNOT B E DISALLOWED. ACCORDINGLY, WE CONFIRM THE ORDER OF THE CIT(A) IN THIS REGARD. 25. NEXT GROUND RELATE TO THE ADDITION OF RS.60,000 /- BEING DISALLOWANCE ON ACCOUNT OF COOLIE CHARGES WHICH WAS MADE PURELY ON ESTIMATE BASIS. IN THIS REGARD, WE FIND THAT ASSESSEE HAS CLAIMED TOTA L COOLIE CHARGES AT RS.1,02,428/- OUT OF WHICH THE A.O. HAS MADE A DISA LLOWANCE OF RS.60,000/- ON THE GROUND THAT EXPENSES WERE CLAIMED ON THE BAS IS OF SELF-MADE VOUCHERS WHICH ARE NOT OPEN FOR VERIFICATION. IN T HIS YEAR, THE DISALLOWANCE MADE BY THE A.O. WAS MORE THAN 50% WHICH APPEARS US TO BE ON HIGHER SIDE. FOLLOWING THE OBSERVATION IN EARLIER ORDER, WE REST RICT THE DISALLOWANCE TO RS.20,000/- ONLY. 26. THE NEXT GROUND RELATE TO THE ADDITION OF RS.25 ,000/- MADE BY THE A.O. ON ACCOUNT OF SALE OF HUSK. IN THIS REGARD, W E FIND THAT ASSESSEE HAS SHOWN THE SALE OF HUSK AT RS.13,196/- WHICH WAS CON SIDERED TO BE AT LOWER SIDE BY THE A.O. ACCORDINGLY HE MADE THE ADDITION OF RS.25,000/- ON ESTIMATE BASIS. THIS ADDITION WAS MADE WITHOUT POI NTING OUT ANY DEFECT IN THE ACCOUNTS MAINTAINED BY THE ASSESSEE WITH RESPEC T TO THE SALE OF HUSK. THEREFORE, WE FIND NO MERIT IN THIS ADDITION. WE A CCORDINGLY DELETE THE SAME. ITA NO.74 OF 2009: 27. THROUGH THIS APPEAL THE ORDER OF THE CIT(A) IS CHALLENGED MAINLY ON FOUR GROUNDS AND FIRST GROUND RELATE TO THE ADDITIO N OF RS.1,56,271/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT. ON CAREFUL PER USAL, WE FIND THAT THE FACTS ARE SAME AS THAT OF THE EARLIER APPEALS. THE ISSUE WAS EXAMINED IN EARLIER APPEALS AND IT WAS RESTORED BACK TO THE ASSESSING O FFICER FOR RE-ADJUDICATION AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO TH E ASSESSEES. THEREFORE, FOLLOWING THE SAME WE SET ASIDE THE ORDER OF THE CI T(A) AND REMAND THE MATTER BACK TO THE ASSESSING OFFICER TO RE-ADJUDICA TE THE ISSUE AFRESH AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSE SSEES. ITA NOS.72 TO 75 OF 09 ANNAPURNA RICE & FLOUR MILLS, NARASARAOPET 9 28. NEXT GROUND RELATE TO THE ADDITION OF RS.15,000 /- MADE BY THE A.O. ON ACCOUNT OF SALE OF HUSK. THIS GROUND WAS ALSO ADJU DICATED IN FOREGOING APPEALS WHERE WE HAVE DELETED THE ADDITION AFTER HO LDING THAT THIS ADDITION WAS MADE WITHOUT POINTING OUT ANY DEFECT IN THE ACC OUNTS MAINTAINED BY THE ASSESSEE FOR SALE OF HUSK. 29. NEXT GROUND RELATE TO THE ADDITION OF RS.40,000 /- ON ACCOUNT OF COOLIE CHARGES ON THE GROUND THAT ASSESSEE HAS CLAIMED THE EXPENSES ON THE BASIS OF SELF-MADE VOUCHERS. IN THIS YEAR, TOTAL COOLIE CHARGES WERE CLAIMED AT RS.70,830/- OUT OF WHICH RS.40,000/- WAS DISALLOWED BY THE A.O. THIS GROUND WAS EXAMINED BY US IN THE FOREGOING APPEALS AND WE HOLD THAT THE DISALLOWANCE MADE BY THE A.O. ARE ON HIGHER SIDE. IN THOSE APPEALS, WE RESTRICTED THE DISALLOWANCE UPTO 15% ONLY. WE ACCOR DINGLY RESTRICT THE DISALLOWANCE IN THIS CASE ALSO UPTO RS.15,000/- ONL Y. 30. NEXT GROUND RELATE TO THE ADDITION OF RS.1,00,5 84/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF INTEREST PAYMENT. IN THIS REGARD, IT IS NOTICED THAT PAYMENT WAS DISALLOWED FOR THE REASONS THAT AS SESSEE HAS NOT SUBMITTED THE FORM H TO THE COMMISSIONER OF INCOME TAX. THE ISSUE WAS ALSO EXAMINED BY US IN THE FOREGOING APPEALS AND THE MAT TER WAS RESTORED BACK TO THE FILE OF THE A.O. FOR RE-ADJUDICATION AFTER MAKI NG A NECESSARY VERIFICATION ABOUT THE POSTAGE OF THE 15H FORMS TO THE COMMISSIO NER OF INCOME TAX. FOLLOWING THE SAME, WE SET ASIDE THE ORDER OF THE C IT(A) AND RESTORE THE MATTER TO THE FILE OF THE A.O. WITH A DIRECTION TO ADJUDICATE THE ISSUE AFRESH IN THE LIGHT OF EVIDENCE FURNISHED BY THE ASSESSEES. ITA NO.75 OF 2009: 31. IN THIS APPEAL, THE ORDER OF THE CIT(A) IS CHAL LENGED ON FOUR GROUNDS AND FIRST GROUND RELATE TO THE ADDITION OF RS.2,69, 303/- ON ACCOUNT OF UNEXPLAINED CREDITS. THE IDENTICAL GROUND WAS EXAM INED BY US IN THE FOREGOING APPEALS WHERE WE HAVE SET ASIDE THE ORDER OF THE CIT(A) AND REMANDED THE MATTER BACK TO THE A.O. WITH A DIRECTI ON TO RE-ADJUDICATE THE ISSUE AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. SINCE THE ITA NOS.72 TO 75 OF 09 ANNAPURNA RICE & FLOUR MILLS, NARASARAOPET 10 FACTS ARE SAME, WE SET ASIDE THE ORDER OF THE CIT(A ) AND RESTORE THE MATTER TO THE FILE OF THE A.O. FOR RE-ADJUDICATION OF THE ISSUE AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEES. 32. NEXT GROUND RELATE TO THE ADDITION OF RS.2,50,0 00/- MADE BY THE A.O. ON ACCOUNT OF INTRODUCTION OF CAPITAL DURING THE IM PUGNED ASSESSMENT YEAR. IN THIS REGARD, IT IS NOTICED THAT ASSESSEE HAS INT RODUCED THE CAPITAL OF RS.13,00,363/- IN THE NAME OF THE PARTNERS OF WHICH DETAILS ARE AS UNDER: 33. THE A.O. HAS ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF CONTRIBUTION OF THIS CAPITAL. THE ASSESSEE HAS FURNISHED THE EX PLANATIONS AND THE EVIDENCE WHICH WERE DULY EXAMINED BY THE ASSESSING OFFICER. WHEREVER SOURCE OF DEPOSIT WAS EXPLAINED IT WAS ACCEPTED BY THE A.O. A ND WHEREVER THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF CONTRIBUTION OF SHA RE CAPITAL, IT WAS ADDED BY THE A.O. U/S 68 IN THE HANDS OF THE PARTNERSHIP FIR M. THE IDENTICAL ISSUE WAS ALSO EXAMINED BY US IN THE FOREGOING APPEALS IN WHI CH WE HAVE TAKEN A VIEW THAT WHEREVER THE SOURCE OF DEPOSITS ARE NOT EXPLAI NED, THE ASSESSING OFFICER WAS RIGHT IN MAKING THE ADDITION OF THAT PART OF DE POSIT U/S 68 IN THE HANDS OF THE ASSESSEE FIRM. SINCE THE FACTS ARE ALMOST SIMI LAR EXCEPT THE QUANTUM, WE THEREFORE, FOLLOWING OUR EARLIER ORDER HOLD THAT TH E REVENUE HAS RIGHTLY MADE AN ADDITION OF THOSE PART OF DEPOSITS OF WHICH SOUR CE WAS NOT PROPERLY EXPLAINED BY THE ASSESSEE. ACCORDINGLY, WE FIND NO MERIT IN THIS GROUND. 34. NEXT GROUND RELATE TO THE ADDITION OF RS.1 LAKH ON ACCOUNT OF COOLIE CHARGES. IN THIS REGARD, WE FIND THAT ASSESSEE HAS CLAIMED THE COOLIE CHARGES AT RS.2,71,000/- OUT OF WHICH RS.1 LAKH WAS DISALLO WED ON THE GROUND THAT THE CLAIM WAS RAISED ON THE BASIS OF SELF-MADE VOUC HERS WHICH ARE NOT OPEN FOR VERIFICATION. IN THIS YEAR, THE DISALLOWANCE W AS MADE ABOUT 40% OF THE S.NO. NAME OF THE PARTNER AMOUNT IN RS. 1. T VENKATA SUBRAMA NYAM 9,00,000 2. A. VENKATA RAMAIAH 53,630 3. K. RAMESH 2,50,000 4. A. SRINIVASA RAO 1,00,000 TOTAL 13,03,630 ITA NOS.72 TO 75 OF 09 ANNAPURNA RICE & FLOUR MILLS, NARASARAOPET 11 TOTAL CLAIM WHICH ALSO APPEARS TO BE ON HIGHER SIDE . WE ACCORDINGLY RESTRICT THE SAME TO RS.65,000/- ONLY. 35. NEXT GROUND RELATE TO THE ADDITION OF RS.15,000 /- MADE BY THE A.O. ON ACCOUNT OF SALE OF HUSK. THIS GROUND WAS ADJUDICAT ED BY US IN FOREGOING APPEALS WHERE WE HAVE HELD THAT THIS ADDITION WAS M ADE ON ESTIMATE BASIS WITHOUT POINTING OUT ANY DEFECTS IN THE ACCOUNTS OF THE ASSESSEE WITH REGARD TO THE SALE OF HUSK AND WE DELETED THE ADDITIONS. SINCE THE FACTS ARE SAME, WE THEREFORE FOLLOWING THE ORDER IN FOREGOING APPEA LS DELETE THE ADDITIONS AFTER HOLDING THAT IT WAS MADE ON ADHOC BASIS. 36. IN THE RESULT, THE APPEALS OF THE ASSESSEES ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 27.4.2011 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 27 TH APRIL, 2011 COPY TO 1 SRI S. RAMA RAO, ADVOCATE, FLAT NO.103, H.NO.3 - 6 - 542/4, INDIRADEVI NILAYAM, ST.NO.7, HIMAYATNAGAR, HYDERABAD-500 029. 2 ITO WARD - 1, NARASARAOPET 3 THE CI T, GUNTUR 4 THE CIT (A) , GUNTUR 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM