Sri Metty Satya Prasad, Hyderabad v. The ACIT, Central Circle, Rajahmundry, Rajahmundry

ITA 112/VIZ/2012 | 2007-2008
Pronouncement Date: 28-04-2014 | Result: Partly Allowed

Appeal Details

RSA Number 11225314 RSA 2012
Assessee PAN ADOPM5849G
Bench Visakhapatnam
Appeal Number ITA 112/VIZ/2012
Duration Of Justice 2 year(s) 19 day(s)
Appellant Sri Metty Satya Prasad, Hyderabad
Respondent The ACIT, Central Circle, Rajahmundry, Rajahmundry
Appeal Type Income Tax Appeal
Pronouncement Date 28-04-2014
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 28-04-2014
Date Of Final Hearing 04-03-2014
Next Hearing Date 04-03-2014
Assessment Year 2007-2008
Appeal Filed On 09-04-2012
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI J. SUDHAKAR REDDY ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY JUDICIAL MEMBER ITA NOS.84 TO 88/VIZAG/2012 ASSESSMENT YEARS : 2005-06 TO 2009-10 RESPECTIVELY ACIT CENTRAL CIRCLE RAJAHMUNDRY VS. MATTEY SATYA PRASAD PEDDAPURAM (APPELLANT) (RESPONDENT) PAN NO.ADOPM 5849G ITA NOS.89 TO 93/VIZAG/2012 ASSESSMENT YEARS : 2005-06 TO 2009-10 RESPECTIVELY ACIT CENTRAL CIRCLE RAJAHMUNDRY VS. MATTEY SRINIVAS PEDDAPURAM (APPELLANT) (RESPONDENT) PAN NO.ADOPM 5848H ITA NOS.110 TO 113/VIZAG/2012 ASSESSMENT YEARS : 2005 - 06 TO 2008 - 09 RESPECTIVELY MATTEY SATYA PRASAD PEDDAPURAM VS. ACIT CENTRAL CIRCLE RAJAHMUNDRY (APPELLANT) (RESPONDENT) ITA NOS.114 TO 117/VIZAG/2012 ASSESSMENT YEARS : 2005-06 TO 2008-09 RESPECTIVELY MATTEY SRINIVAS PEDDAPURAM VS. ACIT CENTRAL CIRCLE RAJAHMUNDRY (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI G.V.N. HARI ADVOCATE REVENUE BY: SHRI K.V.N. CHARYA CIT(DR) DATE OF HEARING : 07.03.2014 DATE OF PRONOUNCEMENT : 28.04.2014 ORDER PER J. SUDHAKAR REDDY ACCOUNTANT MEMBER:- THESE ARE CROSS APPEALS FILED BY DIFFERENT ASSESSEE S WHO ARE BROTHERS. ITA NOS.110 TO 113 ARE THE APPEALS OF THE ASSESSEE SHRI MATTEY SATYA PRASAD FOR 2 THE ASSESSMENT YEARS 2005-06 TO 2008-09 AND ITA NOS .84 TO 88 ARE THE REVENUE APPEALS AGAINST COMMON ORDERS OF THE CIT(A) . SIMILARLY ITA NOS.114 TO 117/V/2012 ARE APPEALS OF THE ASSESSEE M ATTEY SRINIVAS AND ITA NOS.89 TO 93/V/2012 ARE APPEALS OF THE REVENUE AGAI NST COMMON ORDERS OF CIT(A). THE CROSS APPEALS IN THE CASE OF SHRI M. S ATYA PRASAD ARE DIRECTED AGAINST THE COMMON ORDER OF THE CIT(A)-I HYDERABAD D ATED 31.01.2012 AND WHEREAS THE CROSS APPEALS IN THE CASE OF M. SRINIVA S ARE AGAINST A COMMON ORDER PASSED BY THE CIT(A)-I HYDERABAD AGAIN DATED 31.01.2012 FOR THE ASSESSMENT YEAR 2005-06 TO 2009-10. AS THE ISSUES ARISING IN ALL THESE APPEALS ARE COMMON FOR THE SAKE OF CONVENIENCE TH EY ARE HEARD TOGETHER AND DISPOSED OF BY WAY OF THIS COMMON ORDER. 2. FACTS IN BRIEF. BOTH THE ASSESSEES ARE DERIVING INCOME FROM REMUNERATION INTEREST COMMISSION ON HOUSE PROPERT Y. BOTH THE BROTHERS ARE PARTNERS IN THE FIRM M/S. LALITHA ENTERPRISES ALONG WITH OTHER FAMILY MEMBERS. THEY HAVE ALSO INCORPORATED A COMPANY IN THE NAME O F M/S. SRI LALITHA ENTERPRISES INDUSTRIES PVT. LTD. 3. THERE WAS A SEARCH AND SEIZURE OPERATION CONDUCT ED IN THE CASE OF BOTH THE ASSESSEES ON 3.2.2009. NOTICE U/S 153A OF THE INCOME-TAX ACT 1961 DATED 26.08.2009 WAS ISSUED AND SERVED ON THEM . THE ASSESSEES FILED THEIR RETURN OF INCOME ON 11.3.2010 ADMITTING ADDIT IONAL INCOME DECLARED CONSEQUENT TO THE SEARCH OPERATION U/S 132 OF THE A CT. THE ASSESSMENTS WERE COMPLETED IN BOTH THESE CASES BY MAKING ADDITI ONS ON ACCOUNT OF (A) UNEXPLAINED CREDIT IN THE FORM OF UNSECURED LOANS ( B) UNEXPLAINED CREDITS IN THE FORM OF GIFTS. THE BASIS OF ADDITION IS GIVEN AT PARA-3 OF THE ASSESSMENT 3 ORDER AS REGARDS UNSECURED LOANS. THE ASSESSEE MR. M. SATYA PRASAD INTRODUCED UNSECURED LOANS TO THE TUNE OF RS.1 13 3 2 199/- AND HIS BROTHER ASSESSEE SRI M. SRINIVAS INTRODUCED UNSECURED LOANS OF RS.1 13 71 337/-. THE ASSESSING OFFICER AT PARA-3.4 GAVE HIS CONCLUSIONS ON THE ISSUE OF UNSECURED LOANS AS FOLLOWS: IT IS NOTICED FROM THE BOOKS OF ACCOUNT THAT EVERY YEAR THE ASSESSEE IS CALCULATING INTEREST ON THE AMOUNTS STATED TO BE BORROWED AS UNSECURED LOANS AND CREDITING THE SAME IN THE RESPE CTIVE ACCOUNTS. HOWEVER TILL DATE NO SUCH INTEREST HAS BEEN PAID TO THESE CREDITORS. 4. AS THE ASSESSEES HAD ADMITTED A CERTAIN AMOUNTS AS UNEXPLAINED INVESTMENT IN THE FORM OF UNSECURED LOANS THE AMOU NTS BEING OF RS.11 94 773/- IN THE CASE OF M. SATYA PRASAD AND A MOUNT OF RS.2 08 133/- IN THE CASE OF M. SRINIVAS THE ASSESSING OFFICER ADD ED THE BALANCE AMOUNTS ALSO ON THE GROUND THAT UNDER THE FACTS AND CIRCU MSTANCES OF THE CASE IT IS ABUNDANTLY CLEAR THAT THE CREDITORS ARE SMALL TIME FARMERS WHOSE CREDITWORTHINESS HAS FAILED THE TEST OF REASONABLEN ESS. THE PRINCIPAL AS WELL AS INTEREST HAS BEEN ADDED. 5. THE SECOND ADDITION WAS ON ACCOUNT OF UNEXPLAINE D CREDITS IN THE FORM OF GIFTS. DURING THE ASSESSMENT YEAR 2005-06 GIFT S WERE RECEIVED FROM VARIOUS NRIS. FOR ASSESSMENT YEARS 2005-06 2006-07 2007-08 AND 2008- 09 GIFTS WERE RECEIVED BY BOTH THE BROTHERS FROM THEIR SISTER SMT. V. ANJANI DEVI. FOR THE ASSESSMENT YEAR 2005-06 BOTH THE BR OTHERS HAVE RECEIVED GIFTS FROM SMT. K.B.P. SUNDARI ANOTHER SISTER OF TH E ASSESSEE. THE CASE OF THE ASSESSEE IS THAT SMT. V. ANJANI DEVI IS HAVING TWO SONS WHO ARE WORKING AS SOFTWARE ENGINEERS IN USA AND THAT THEY HAVE BEEN S ENDING MONEY TO THEIR MOTHER SMT. ANJANI DEVI AND THE MOTHER IN TURN HAS GIFTED THE AMOUNTS TO 4 HER BROTHERS MR. M.SATYA PRASAD AND M. SRINIVAS. T HE AO NOTICED THAT AS ON THE DATE OF SEARCH I.E. 3.2.2009 SMT. ANJANI DEVI GIFTED AN AMOUNT OF RS.1 76 71 500/- TO BOTH HER BROTHERS. DURING THE COURSE OF SEARCH SMT. V. ANJANI DEVI WAS SUMMONED BY THE INVESTIGATION WING. IN HER STATEMENT RECORDED IN TELUGU SMT. ANJANI DEVI CONFIRMED THE FACT OF HAVING GIVEN GIFTS TO HER BROTHERS. ON FURTHER QUESTIONING SHE SUBMI TTED THAT SHE IS A HOUSE WIFE AND HER HUSBAND WAS RETIRED OFFICER IN A.P. TR ANSCO AND IS NOW WORKING AS AN ELECTRICAL ENGINEER IN THE VISAKHAPATNAM AIRP ORT AND THAT THEY ARE STAYING IN A RENTED HOUSE IN VISAKHAPATNAM. REGARD ING THIS UNEXPLAINED CASH DEPOSITS THE ASSESSEE ADMITTED AN AMOUNT OF R S.40 98 488/- AS UNEXPLAINED INVESTMENTS ON THE GROUND THAT THEY ARE UNABLE TO SUBSTANTIATE THEIR CLAIM. THE ASSESSING OFFICER AT PARA-4.8 REC ORDED AS FOLLOWS AND MADE THE ADDITION: 4.8 THE ABOVE EXPLANATION/SUBMISSIONS OF THE ASSESS EE HAVE BEEN CAREFULLY PERUSED. IT IS OPINED THAT THE SAME DO N OT SATISFACTORILY PROVE THE GENUINENESS OF THE GIFTS INTRODUCED BECAUSE OF THE FOLLOWING REASONS: (I) AS STATED EARLIER MERE ROUTING OF THE GIFT T RANSACTION THROUGH BANKING CHANNELS IS NOT ENOUGH. (II) ON THE COUNT OF HUMAN CONDUCT AND PROBABILITY THE FREQUENCY AND THE REGULARITY OF THE GIFTS FROM THE DONORS DEFEATS THE VERY CHARACTER OF A 'GIFT' WHICH IS Z$ OTHERWISE NATURAL AND NORMAL TRA NSACTION EMANATING OUT OF TRUE LOVE AND AFFECTION. (III) GIFT CAN NEVER BEAR THE STAMP OF A REGULAR TR ANSACTION LIKE A TRADING TRANSACTION. IT IS NOT PERIODIC OR REGULAR BUT IT IS GENERALLY IN A LUMP SUM AND THAT TOO IT COMES IN TO PICTURE ONLY ON THE EVE OF ANY OCCASION. (IV) THE FACT THAT BOTH THE ASSESSEE AND HIS BROTH ER RECEIVED GIFTS FROM THE SAME / SIMILAR SOURCE BEARING SAME / SIMILAR AM OUNTS IN A PARTICULAR YEAR INDICATES THAT THERE IS TOO MUCH OF A COINCIDE NCE WHICH IS SUFFICIENT ENOUGH TO INFER THAT THEIR GIFT TRANSACTIONS ARE A RESULT OF AN ORGANIZED AND ORCHESTRATED 'SCHEME' PARTICULARLY WHEN THE GI FTS ARE PURELY OUT OF NEED OF THE RECIPIENTS AND ARE RECEIVED YEAR AFTER YEAR AS A REGULAR AFFAIR. (V) NEITHER DURING THE SEARCH AND SEIZURE OPERATION NOR AT THE TIME OF ASSESSMENT PROCEEDINGS THE ASSESSEE COULD DISCHARG E THE ONUS OF PROVING ALL THE THREE INGREDIENTS OF SUCH TRANSACTI ONS NAMELY (A) 5 CREDITWORTHINESS OF THE DONOR AND (B) IDENTIFICATIO N OF THE DONOR AND (C) GENUINENESS OF THE TRANSACTION. (VI) IN THE CASE OF SMT. ANJANA DEVI IT APPEARS QU ITE ILLOGICAL AND ALSO DEFEATS COMMON SENSE THAT FOR A GIFT TO FRUCTIFY AN INTERMEDIARY LIKE ANJANA DEVI SHOULD ENTER THE FRAY. UNDER NORMAL CIR CUMSTANCES IF THE GIFT WAS GENUINE IT WOULD HAVE COME TO THE ASSESSEE DIR ECTLY. (VII) NO CREDIBLE OR VERIFIABLE EVIDENCE WITH REFER ENCE TO THE GIFT AS CALLED FOR IN THE SHOW CAUSE DATED 29-12-2010 HAVE BEEN FI LED AS ON 30-12-2010 (VIII) TAKING THE CASE OF SMT. ANJANA DEVI AS AN EX AMPLE THERE IS A PIQUANT SITUATION WHEREIN BOTH THE DONOR AND THE DO NEE ARE ADMITTING THE UNEXPLAINABLE NATURE-OF THE GIFT TRANSACTION WHICH BY ITSELF CLEARLY INDICATES THAT THE ENTIRE GIFT TRANSACTION IS ONLY A SHAM EVENT ORCHESTRATED BY THE ASSESSEE TO GIVE THE COLOUR OF A GENUINE GIF T BY ROUTING THE SAME THROUGH BANKING CHANNELS. (IX) THE CLOSE PROXIMITY BETWEEN THE DATES OF DEPOS ITS IN THE BANK ACCOUNT OF ANJANA DEVI AND THEREAFTER THE SAME GETTING SUBS EQUENTLY TRANSFERRED IN TO THE ACCOUNT OF THE ASSESSEE THROWS CONSIDERAB LE DOUBT ON THE VERACITY OF THE ASSESSEE'S CLAIM REGARDING THE CRED ITWORTHINESS OF THE DONOR. (X) AS SEEN IN THE CASE OF SMT. ANJANA DEVI THE DO NOR IS A HOUSE-WIFE - SPOUSE OF A RETIRED GOVERNMENT EMPLOYEE AND HAVING NO INDEPENDENT MEANS WHO HAS CLAIMED TO HAVE DONATED GIFTS FROM OU T OF REMITTANCES RECEIVED BY HER FROM ABROAD. SUCH CONDUCT OF THE DO NOR DOES NOT JUSTIFY HUMAN PROBABILITIES PARTICULARLY WHEN THERE SHOULD HAVE BEEN DIRECT REMITTANCES. SUCH DESIGN OF LAYERING THE TRANSACTIO N THROUGH A CHAIN I.E. FROM THE CHILDREN IN USA TO THEIR MOTHER AND THEREA FTER TO THE BROTHER RUNS CONTRARY TO NORMAL HUMAN CONDUCT AND PROBABILI TIES. (XI) THE ENTIRE GIFT TRANSACTION RUNS COUNTER TO HU MAN PROBABILITIES AND NORMAL COURSE OF HUMAN CONDUCT. RELIANCE IN THIS RE GARD IS PLACED ON THE DECISION OF THE HON'BLE ITAT DELHI `F BENCH IN TH E CASE OF DCIT VS. PHULWATI DEVI (122 TTJ 502) CIT VS DURGA PRASAD MO RE (82 ITR 540(SC)) AND SUMATI DAYAL VS. CIT (214 ITR801(SC)). (XII) IN THIS VIEW OF THE MATTER THE ENTIRE AMOUNT OF GIFT OF RS.31 84 165/- AS PERTAINING TO ASSESSMENT YEAR 2005-2006 IS ADDED TO THE INCOME RETURNED AS UNEXPLAINED CREDIT IN THE BOOKS. 6. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN AP PEAL. THE FIRST APPELLATE AUTHORITY ON THE ISSUE OF LOANS GRANTED RELIEF WHEREVER THE ASSESSEE HAS CLAIMED THAT HE HAS REPAID THE LOAN AL ONG WITH INTEREST BY WAY OF CROSS CHEQUES. THE BALANCE ADDITION WAS CONFIRM ED. 6 7. ON THE ISSUE OF UNEXPLAINED CREDITS IN THE FORM OF GIFTS THE LD. CIT DELETED THE ADDITION AS FAR AS GIFTS RECEIVED FROM THE ASSESSEES SISTER SMT. K.B.P. SUNDARI ON THE GROUND THAT THE SOURCES WERE EXPLAINED. AS REGARDS THE GIFTS RECEIVED FROM THE ASSESSEES SISTER SMT. ANJANI DEVI HE CONFIRMED THE ADDITION BY HOLDING AS FOLLOWS: THE CONTENTION OF THE ASSESSEE REGARDING SOURCE OF FUNDS OF SMT. ANJANA DEVI AS RECEIVED FROM HER TWO SONS WORKING A BROAD DOES NOT CUT MUCH ICE DUE TO THE FACT THAT THE TWO SONS SENT THE MONEY TO THEIR PARENTS FOR THEIR WELFARE AND SECURITY BUT NOT FOR TRANSFERRING THE ENTIRE AMOUNT TO THEIR UNCLE TO FURTHER THEIR BUSINESS INTERESTS. IT IS TOTALLY BEYOND ANY ONE'S COMPREHENSION TO GIFT AWAY SUCH LA RGE SUMS TO THE BROTHERS WITHOUT ENSURING THEIR OWN WELL BEING IN V IEW OF THE FACT OF VERY LIMITED SOURCES OF INCOME SHE IS ENJOYING. ANOTHER IMPORTANT FEATURE AS POINTED OUT BY THE AO IS SMT. ANJANA DEVI IS RESIDI NG IN .A RENTED HOUSE. WHEN HER TWO SONS SENT LAKHS OF RUPEES OUT OF THEIR SAVINGS THE FIRST THING AS PARENTS TO DO IS TO ACQUIRE A HOUSE TO LIV E IN NOT ONLY FOR THEMSELVES BUT ALSO FOR THE FUTURE OF THE SONS WHO HAVE TRANSMITTED SUCH SUMS TO THE PARENTS. IT IS AGAINST NORMAL HUMAN CONDUCT ON THE PART OF SMT. ANJANA DEVI TO GIVE AWAY SUCH HUGE SUM S REPEATEDLY TO HER BROTHERS WHICH IS UNBELIEVABLE. THEREFORE THE CLAI M OF THE ASSESSEE IN RESPECT OF GIFTS RECEIVED FROM SMT. ANJANA DEVI IS NOT ACCEPTABLE IN VIEW OF SMT. ANJANA DEVI'S MEAGER FINANCIAL STANDING A ND THE FACT OF GENUINENESS OF GIFTS COULD NOT BE ESTABLISHED BEYON D REASONABLE DOUBT. ACCORDINGLY ACTION OF AO IS CONFIRMED IN RESPECT O F ALL GIFTS EXCEPT A SUM OF RS.2 16 0007 - RECEIVED ON 17-3-2005 (GIVEN BY S MT. ANJANA DEV) AND RS.2 80 000/- RECEIVED ON 25-8-2005 (GIVEN BY SMT. KBT SUNDARI). 8. REGARDING THE BALANCE NRI GIFTS RECEIVED BY BOTH THE BROTHERS FOR THE ASSESSMENT YEAR 2005-06 HE CONFIRMED THE ADDITION ON THE GROUND THAT THE ASSESSEE COULD NOT SUBSTANTIATE THE GENUINENESS OF THE SO CALLED NRI GIFTS BY FILING CREDIBLE EVIDENCES IN SUPPORT OF THE GIFTS. HE GRANTED PART RELIEF. 9. AGGRIEVED BOTH THE ASSESSEES AS WELL AS THE REV ENUE ARE IN APPEAL BEFORE US. 9.1. THE REVENUE HAS FILED THE FOLLOWING GROUNDS. 7 A) THE LD.CIT(A) ERRED IN ACCEPTING THE ASSESSEE S PLEA THAT THE REPAYMENT OF LOAN ALONG WITH THE INTEREST AT THE ST AGE OF APPEAL PROCEEDINGS BEFORE HIM AND DECIDING THAT THE QUESTI ON OF SUSPECTING THE LOANS AS BOGUS DO NOT ARISE THEREBY. B) THE LD.CIT(A) DID NOT CONSIDER THE CRUCIAL FACTS AND CIRCUMSTANCES FOUND BY THE DEPARTMENT AND DECIDED THAT THE ASSESS EE HAD DISCHARGED HIS BURDEN BY MERELY SUBMITTING THE CONFIRMATION LETTER S. C) THE LD.CIT(A) ERRED IN ACCEPTING THE FIRST OCCAS ION OF GIFTS AS GENUINE. 9.2. THE ASSESSEE HAS FILED THE FOLLOWING GROUNDS F OR A.Y.2005-06 AND THE GROUNDS OF APPEAL ARE IDENTICAL FOR ALL THE OTHER Y EARS: 1. THE IMPUGNED ORDER OF ASSESSING OFFICER IN SO FA R AS IT IS PREJUDICIAL TO THE INTEREST OF THE APPELLANT IS AGAINST LAW W EIGHT OF EVIDENCE AND PROBABILITIES OF THE CASE. 2. (A) THE LEARNED ASSESSING OFFICER ERRED IN MAKIN G AN ADDITION U/S 68 TOWARDS UNSECURED LOANS AND INTEREST THEREON FOR AN ADDITIONAL SUM OF RS.20 22 573. 2. (B) THE LEARNED ASSESSING OFFICER FAILED TO APPR ECIATE THAT THE APPELLANT ALREADY SURRENDERED AN AGGREGATE SUM OF R S.20 34 414 INCLUDING INTEREST OUT OF THE UNSECURED LOANS WHICH COULD NOT BE SATISFACTORILY EXPLAINED. 2.(C) THE LEARNED ASSESSING OFFICER FAILED TO APPRE CIATE THT THE UNSECURED CREDITORS ALWAYS HAVE BEEN SUPPLYING PADD Y TO APPELLANT WORTH OF RS.26 99 290/- AND CONSEQUENTLY ALL THE 3 CRITERIA RELATING TO CREDITS HAVE BEEN SUBSTANTIATED. CONSEQUENTLY THE ASSESSING OFFICER OUGHT TO HAVE ACCEPTED THE CREDITS SURRENDERED AND OUGHT NOT TO HAVE MADE FURTHER ADDITION. 3.(A). THE LEARNED ASSESSING OFFICER ERRED IN MAKIN G AN ADDITION OF RS.31 84 615/- AS UNEXPLAINED GIFTS IN SPITE OF THE FACT THAT ALL THE GIFTS WERE RECEIVED FROM BLOOD RELATIVES AS EXPECTED IN T ERMS OF S.56(2)(VI) OF THE ACT AND AL THE GIFTS WERE RECEIVED THROUGH B ANKING CHANNELS FROM THE KITH AND KIN AS DEFINED IN EXPLANATION TO S.56( 2)(V). 3.(B). THE LEARNED ASSESSING OFFICER FAILED TO APPR ECIATE THAT THE GIFTS RECEIVED FROM THE SISTERS OF THE APPELLANT CANNOT B E CHARGED TO TAX U/S 68 BECAUSE THEY ARE EXEMPTED U/S 56(2)(V). 8 3.(C).THE LEARNED ASSESSING OFFICER FAILED TO APPRE CIATE THAT THE DONORS OF THE GIFTS FULLY EXPLAINED THE SOURCES OF THEIR G IFTS MADE AND CONSEQUENTLY THE ASSESSING OFFICER SHOULD HAVE ACCE PTED THE GIFTS AS DECLARED. THE ASSESSEE HAS ALSO FILED THE FOLLOWING APPLICATI ON FOR ADMISSION OF ADDITIONAL GROUND. 1. THE APPELLANT FILED HIS RETURN OF INCOME FOR TH E AY 2005-06 ON 27 TH MARCH 2006. LATER THE APPELLANT WAS SUBJECTED TO SEARCH PROCEEDINGS U/S 132 OF THE ACT ON 23 RD JUNE 2009 AND IN RESPONSE TO NOTICE ISSUED U/S 153A OF THE ACT THE APPELLANT FILED ANOTHER RE TURN. IN THE ASSESSMENT COMPLETED U/S 153A OF THE ACT VIDE ORDER DT. 30 TH DECEMBER 2010 THE AO BROUGHT TO TAX GIFTS RECEIVED BY THE APPELLANT WHICH INCLUDED AN AMOUNT OF RS.25 56 165 FROM DIFFE RENT PERSONS. THESE GIFTS WERE DULY RECORDED IN THE BOOKS OF ACCO UNT AND NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH IN RESPECT OF THESE GIFTS. SINCE THE TIME AVAILABLE FOR COMP LETION OF THE ASSESSMENT IN RESPECT OF AY 2005-06 EXPIRED ON 31 ST MARCH 2008 THIS WOULD BE A CONCLUDED ASSESSMENT. AND THERE A NUMB ER OF DECISIONS WHEREIN IT IS HELD THAT IN THE ASSESSMENT COMPLETED U/S 153A OF THE ACT NO ADDITION CAN BE MADE IN RESPECT OF CONCLUDED ASS ESSMENTS UNLESS THERE IS ANY INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH. HOWEVER THE APPELLANT OMITTED INADVERTENTLY TO RAI SE THIS GROUND AT THE TIME OF FILING THE APPEAL. THEREFORE IT IS PRAYED THAT THE FOLLOWING ADDITIONAL GROUND MAY KINDLY BE ADMITTED AND APPROP RIATE ORDERS MAY KINDLY BE PASSED: THE ADDITIONAL GROUND READS AS FOLLOWS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE WHETHER THE AO IS JUSTIFIED IN MAKING ADDITION TOWARDS GIFTS AMOUNTIN G TO RS.25 56 165/- IN THE ABSENCE OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH U/S 132 OF THE ACT? 9 10. THE LD. COUNSEL FOR THE ASSESSEE MR. G.V.N. HAR I SUBMITTED THAT THE LD.CIT(A) ON THE ISSUE OF LOANS HAS NOT CONSIDERED THE CONFIRMATION LETTERS FILED BY THE LOAN CREDITORS AND WITHOUT EXAMINING THE SAME HAS COME TO A CONCLUSION THAT THE CREDITORS ARE MERE NAME LENDERS WHO DO NOT HAVE FINANCIAL SOUNDNESS TO LEND MONEY TO THE ASSESSEE. HE SUBMITTED THAT THESE ARE AGRICULTURAL FARMERS WHO ARE REGULARLY SUPPLYIN G PADDY TO THE COMPANY AND HENCE THERE CANNOT BE ANY DOUBT WHATSOEVER ON T HE FINANCIAL CREDIT WORTHINESS AND THEIR CAPACITY TO LEND MONEY TO THE ASSESSEE. HE POINTED OUT THAT THE CONFIRMATION LETTERS FILED BY THESE CREDIT ORS HAVE NOT BEEN REBUTTED BY THE AO WITH MATERIAL EVIDENCE. HE SUBMITTED THA T BEING AGRICULTURAL FARMERS FROM VILLAGES THEY WERE NOT WELL VERSED WIT H THE BANKING OPERATIONS AND NON-OPERATION OF BANK ACCOUNTS CANNOT BE VIEWED AS AN ADVERSE INFERENCE TO HOLD AGAINST THE ASSESSEE. ON OPENING OF BANK ACCOUNTS AND INTRODUCTION GIVEN BY THE ASSESSEE HE SUBMITTED TH AT NO ADVERSE INFERENCE CAN BE DRAWN BY SUCH INTRODUCTION FOR THE REASON TH AT THE ASSESSEE IS A DIRECTOR OF M/S. SRI LALITHA ENTERPRISES INDUSTRIES PVT. LTD. TO WHICH ALL THESE FARMERS REGULARLY SUPPLY PADDY AND HENCE IT IS BUT NORMAL FOR SUCH INTRODUCTIONS. THUS HE SUBMITS THAT THE ASSESSEE H AS ESTABLISHED THE IDENTITY GENUINENESS AND CREDIT WORTHINESS OF THE LOAN CREDITORS AND THE LD.CIT(A) WAS WRONG IN PARTLY DISALLOWING THE SAME. 11. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT ON THE ISSUE OF GIFTS FROM NRIS WHICH ARISE ONLY FOR THE ASSESSMENT YEAR 2005-06 IN ITA NOS.110 AND ITA NO. 114 HIS CONTENTIONS ARE THAT TH E ASSESSEE HAS RECEIVED CERTAIN GIFTS FROM VARIOUS PERSONS WHO ARE RELATED TO THE ASSESSEE AND WERE CHILDREN OF EITHER SISTER OF THE ASSESSEES OR BROTH ER OF THE ASSESSEES. HE 10 CONTENDED THAT THESE GIFTS STOOD RECORDED IN THE BO OKS OF ACCOUNTS REGULARLY MAINTAINED BY THE ASSESSEE AND SUBMITTED THAT NO INCRIMINATING MATERIAL WHATSOEVER WAS FOUND AT THE TIME OF SEARCH OPERATIO NS U/S 132 OF THE ACT. HE SUBMITTED THAT DURING THE COURSE OF SEARCH AND P OST SEARCH INVESTIGATION NO EVIDENCE OR INCRIMINATING MATERIAL WAS FOUND BY THE REVENUE TO DISPROVE THE CLAIM OF THE ASSESSEE AND THAT THE ASSESSEE HAD NOT MADE ANY ADMISSION REGARDING THESE GIFTS AND IT WAS ONLY WITH REGARD T O THE GIFTS RECEIVED FROM ONE OF HIS SISTERS SMT. V. ANJANI DEVI THAT DISCLOS URE WAS MADE. THE LD. COUNSEL SUBMITS THAT RETURNS OF INCOME WERE FILED F OR THESE YEARS BY THE ASSESSEE AND THE TIME FOR ISSUE OF NOTICE U/S 143(2 ) OF THE ACT HAD EXPIRED AND HENCE THERE IS NO QUESTION OF ABATEMENT OF THE ASSESSMENT AND UNDER THOSE CIRCUMSTANCES NO ADDITION CAN BE MADE WHEN N O INCRIMINATING MATERIAL IS FOUND DURING THE COURSE OF SEARCH. HE RAISED TH IS LEGAL ISSUE BY WAY OF ADDITIONAL GROUND AND PLACED RELIANCE ON THE ORDER OF THE ITAT HYDERABAD DATED 23.10.2013 IN THE CASE OF AMR INDIA LIMITED 1 828 TO 1831/HYD/2012. HE FURTHER SUBMITTED THAT ALL EVIDENCES PERTAINING TO THESE GIFTS INCLUDING CONFIRMATIONS WERE SUBMITTED TO THE REVENUE AUTHORI TIES AND NO ADVERSE OR INCRIMINATING MATERIAL WAS DISCOVERED BY THE AO AND THAT ALL THE REMITTANCES WERE FROM ABROAD AND FROM RELATIVES THROUGH BANKIN G CHANNELS AND IN VIEW OF THE CONFIRMATION LETTERS GIVEN BY THOSE PARTIES WHO HAD GIVEN THE GIFTS NO DISALLOWANCE CAN BE MADE UNLESS THERE IS SOME CONT RA EVIDENCE FOUND BY THE REVENUE. HE VEHEMENTLY CONTENDED THAT NEITHER THE INVESTIGATION WING NOR THE ASSESSING OFFICER ENQUIRED INTO IN ALL THESE GI FTS NOR FOUND ANY CONTRARY EVIDENCE AND MERELY ON THE BASIS OF SURMISES AND CO NJECTURES ADDED THE ENTIRE AMOUNT BY APPLYING THE THEORY OF PREPONDERAN CE OF PROBABILITY. THIS HE SUBMITTED IS NOT PERMISSIBLE IN LAW. 11 12. ON THE ISSUE OF GIFTS RECEIVED FROM SMT.V. ANJA NI DEVI HE SUBMITTED AS FOLLOWS: A) ALL THE GIFTS ARE DULY RECORDED IN THE BOOKS O F ACCOUNT OF THE APPELLANTS PRIOR TO THE DATE OF SEARCH ITSELF. B) ALL THE GIFTS ARE RECEIVED THROUGH BANKING CHAN NEL AND THERE ARE NO CASH GIFTS. C) ALL THE GIFTS RECEIVED AFTER THE INSERTION OF S.56(2)(V) ARE ONLY FROM SISTER OF THE APPELLANTS. D) NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH TO SUGGEST THAT THE ABOVE GIFTS WERE NOT GENUINE. E) NO NEXUS ESTABLISHED BETWEEN THE FUNDS BELONGI NG TO THE APPELLANTS AND THE GIFTS RECEIVED FROM THE RELATIVES EVEN AFTER CONDUCTING SEARCH OPERATIONS U/S 132 OF THE ACT. F) CONFIRMATION LETTERS WERE FILED FROM ALL THE D ONORS AND WITH REGARD TO GIFTS FROM OTHERS FOR THE A.Y.2005-06 EVEN THE DDIT (INV) DID NOT FIND ANYTHING AS UNEXPLAINED. G) EVEN WITH REGARD TO GIFTS FROM V. ANJANI DEVI THE DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION) EXAMINED HER ON OATH AND VERIFIED T HE SOURCES AND HE WAS NOT SATISFIED ABOUT GIFTS AMOUNTING TO RS.40 90 488 ONLY AND THE APPELLANTS VOLUNTARILY CAME FORWARD AND ADMITTE D THIS AMOUNT AS THEIR UNDISCLOSED INCOME. THOUGH THE APPELLANTS WE RE IN A POSITION TO EXPLAIN THE SOURCE EVEN FOR THIS AMOUNT THEY THOUGH T IT FIT TO OFFER THIS AS THEIR INCOME TO BUY PEACE WITH THE DEPARTMENT AND A LSO TO PROTECT THE INTEREST OF THEIR SISTER WHO WITH ALL THE LOVE AND AFFECTION CAME FORWARD TO DONATE SOME AMOUNT WHEN THE APPELLANTS W ERE BADLY IN NEED OF FUNDS ON ACCOUNT OF ONGOING EXPANSION INVOL VING INVESTMENT OF RS.76 CRORES AT THE RELEVANT POINT OF TIME. H) DURING THE COURSE OF ASSESSMENT PROCEEDINGS TH E ASSESSING OFFICER DID NOT CONDUCT ANY FURTHER INVESTIGATION. HE DID NOT EVEN CALL FOR ANY FURTHER INFORMATION. ALL OF A SUDDEN VIDE HIS NOTICE DT.29 TH DECEMBER 2010 (CASE FIXED FOR HEARING ON 30 TH DECEMBER 2010) THE ASSESSING OFFICER PROPOSED TO MAKE THE ADDITION WIT H REFERENCE TO THE ABOVE GIFTS. I) THE LEARNED CIT{A) ALSO DID NOT CONSIDER IT RELE VANT TO MAKE ANY FURTHER INVESTIGATION DURING THE APPELLATE PROCEEDINGS. J) BOTH THE LOWER AUTHORITIES PROCEEDED ON THE PRIN CIPLES OF HUMAN PROBABILITY WHILE TREATING THE GIFTS AS UNEXPLAINED INCOME OF THE APPELLANTS. 12 13. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD TAKE N UP A HUGE/LARGE PROJECT HAVING A HUGE INVESTMENT OF RS.76 CRORES A ND ALL THE NEAR AND DEAR SUPPORTED BOTH MORALLY AND FINANCIALLY. HE POINTED OUT THAT THE TOTAL GIFTS RECEIVED BY BOTH THE ASSESSEES AS COMPARED TO THE HUGE INVESTMENT THAT THEY HAVE MADE DEMONSTRATES THAT IT IS A SMALL POR TION AND IT IS NOT A CASE OF CAPITAL BUILD UP AS ALLEGED BY THE REVENUE. HE SUB MITTED THAT THESE FINDINGS OF THE ASSESSING OFFICER ARE FACTUALLY INCORRECT AN D THE TOTAL AMOUNT OF GIFTS RECEIVED IS NOMINAL WHEN COMPARED TO THE INVESTMENT UNDERTAKEN BY THE ASSESSEE AND HENCE THE ALLEGATION THAT THE ASSESSEE HAS RESORTED TO DUBIOUS MEANS IS BAD. HE SUBMITTED AS FOLLOWS: A) ALL GIFTS RECEIVED AFTER INSERTION OF S.56(2)(V ) WERE THROUGH SISTER OF THE APPELLANT WHO FALLS WITHIN THE EXEMPTED CATEGORY AS PER THE PROVISIONS OF S.56(2)(V). B) CIRCULAR NO.5 OF 2005 DT.15 TH JULY 2005 ISSUED BY THE DEPARTMENT CLEARLY EXPLAINS THAT THE PROVISIONS OF S.56(2)(V) ARE INTRODUCED TO CURB BOGUS CAPITAL BUILDING AND MONEY LAUNDERING. AT THE SAME TIME EXEMPTION IS GIVEN TO CERTAIN CLOSE RELATIVES SPECIFIED IN THE SECTION AND THE AMOUNTS RECEIVED BY THE APPELLANTS FALLS WITHIN THE SCOPE OF THOSE SPEC IFIED RELATIVES. C) NATURAL LOVE AND AFFECTION IS THE MAIN CONSIDER ATION FOR A GIFT AND BETWEEN BROTHER AND SISTER IT IS BUT NATURAL THAT S UCH AN ELEMENT IS PRESENT IN ABUNDANCE. D) MERELY BECAUSE THE SOURCE OF AMOUNTS GIFTED BY THE SISTER OF APPELLANTS BELONG TO HER SON NO ADVERSE CONCLUSION CAN BE DRAW N AND THE TRANSACTION CANNOT BE TERMED AS A COLORABLE DEVICE OR 'GRAND DESIGN' IN THE WORDS OF THE LEARNED CIT(A). THE APPELLANT PLACES RELIANCE IN THIS REGARD IN THE CASE OF CIT VS. SPECIAL PRINTS LIMITED (2013) 356 ITR 404 (GUJ). E) THE INITIAL BURDEN STOOD DISCHARGED BY THE APPE LLANTS AND THE ASSESSING OFFICER WITHOUT MAKING ANY ENQUIRIES AND SIMPLY EXT RACTING THE PROCEEDINGS AT THE TIME OF SEARCH IN THE ASSESSMENT ORDER PROCE EDED TO MAKE THE ADDITION ON PREPONDERANCE OF PROBABILITIES. THE APP ELLANT SUBMITS THAT THE ABOVE ACTION OF THE ASSESSING OFFICER IS CONTRARY T O THE LAW AS LAID OUT IN THE FOLLOWING DECISIONS: A) CIT VS. GANGESHWARI METAL (P) LIMITED (2014) 3 61 ITR 10 (DEL) B) CIT VS. KULWANT INDUSTRIES (2009) 311 ITR 377 ( AP) 13 C) RECENT DECISION OF HON'BLE AP HIGH COURT IN THE CASE OF CIT-II VS. RUSMI DISTILLERIES PRIVATE LIMITED DT.25-06-2013 IN ITA NO.79 OF 2013. D) DECISION OF HON'BLE ITAT IN THE CASE OF DR. K. SIVA PRASADA RAO IN ITA NOS.673 TO 677/V/2008. 14. THE LD. DR ON THE OTHER HAND CONTENDED THAT TH E ORDER OF THE ASSESSING OFFICER HAS TO BE UPHELD. ON THE ISSUE O F INVESTMENT IN THE FORM OF UNSECURED LOANS HE SUBMITTED THAT THE ASSESSING OF FICER FOUND THAT THERE WAS FUNDAMENTAL INCREASE IN THE CAPITAL OF THE ASSESSEE S FIRM. HE FILED A PAPER BOOK RUNNING INTO 49 PAGES GIVING DETAILS OF THE CR EDITORS COPIES OF THE STATEMENT RECORDED FROM THE CREDITORS IN TELUGU AND ALONG WITH ENGLISH VERSIONS STATEMENT OF SHRI V.S. MURTHY AND STATEM ENT OF SMT.V. ANJANI DEVI. HE TOOK THIS BENCH TO ANNEXURE 3 WHICH IS A CHART P REPARED ON THE VARIOUS CREDITORS AND POINTED OUT THAT THE INTRODUCER IS TH E SAME PERSON AND THAT ACCOUNTS WERE OPENED ON 13.8.2004 AND 3.9.2004 IN C ASE OF KARUR VYSYA BANK AND ON 7.9.2004 IN THE CASE OF ACCOUNTS WITH S TATE BANK OF INDIA PEDDAPURAM AND 31.8.2004 AND 3.9.2004 IN THE CASE O F ACCOUNTS WITH ANDHRA BANK PEDDAPURAM. HE ALSO REFERRED TO THE SIMILARI TY OF THE AMOUNTS DEPOSITED. HE FURTHER SUBMITTED THAT EXCEPT THESE TRANSACTIONS THERE WERE NO OTHER TRANSACTIONS MADE BY THE ACCOUNT HOLDERS A ND ACCOUNTS ARE DORMANT. HE FURTHER SUBMITTED THAT THE ASSESSEE WA S CALCULATING INTEREST ON AMOUNTS AND TILL DATE NO SUCH INTEREST HAS BEEN PAI D TO THESE CREDITORS. HE RELIED ON THE FINDINGS OF THE ASSESSING OFFICER FRO M PARA 3.1 TO 3.5 AND SUBMITTED THAT THE ADDITIONS IN QUESTION WAS MADE C ORRECTLY BY THE ASSESSING OFFICER. ON THE ISSUE OF GIFTS THE LD. CIT (DR) M AINLY RELIED ON PREPONDERANCE OF PROBABILITIES AND SUBMITTED THAT T HE SISTER OF THE ASSESSEE V. ANJANI DEVI AND HER HUSBAND ARE NOT PEOPLE OF ME ANS. HE SUPPORTED THE 14 ORDER OF THE ASSESSING OFFICER AS WELL AS THE CIT(A ) AND POINTED OUT THAT THE ASSESSEE HAVE COME FORWARD WITH DECLARATIONS OF ONL Y PART OF THE GIFTS AND THAT THIS DECLARATION PROVES THAT WHAT IS STATED IS PRIMA FACIE NOT BELIEVABLE. ON THE CONTENTION OF THE ASSESSEE THAT CONFIRMATION LETTERS HAVE BEEN FILED AND THAT THEY HAVE DISCHARGED THE INITIAL BURDEN OF PROOF AND THE REVENUE AUTHORITIES HAVE DONE NOTHING EXCEPTING REJECTING T HE CONTENTION OF THE ASSESSEE THE LD. D.R. SUBMITTED THAT THE THEORY OF PREPONDERANCE OF PROBABILITIES IS VERY MUCH ATTRACTED IN THIS CASE. HE RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF DURGA PRAS AD MORE 82 ITR 540 (SC) AND SUMATI DAYAL 214 ITR 801. 15. ON THE REVENUE APPEALS THE LD. D.R. SUBMITTED AS FOLLOWS: REASONS GIVEN BY CIT(A) FOR GIVING RELIEF ARE AS FO LLOWS: 1) PRIMARILY THE AO PROCEEDED ON THE BASIS OF SOME EV IDENCES OF OPENING OF THE BANK ACCOUNT INOPERATIVE NATURE OF SUCH ACCOUNT RA THER THAN GOING INTO THE SUBSTANCE OF THE ISSUE BEFORE DECIDING WHETHER THE LOAN IS GENUINE OR NOT. REMARKS: AO EXAMINED THE NATURE OF LOANS AND DREW H IS CONCLUSION ON COGENT REASON GIVEN IN PAGE 7 POINTS (I) TO (V). 2) THE CONFIRMATION FILED BY THE LOAN CREDITORS HAVE N OT BEEN EXAMINED TO ESTABLISH THAT THESE CREDITORS ARE MERE NAME-LENDER S NOT HAVING FINANCIAL SOUNDNESS TO LEND THE MONEY TO THE ASSESSEE. REMARKS: STATEMENTS OF CREDITORS ARE ALREADY RECORD ED BY DDU(INV.). NO NEED TO AGAIN RECORD STATEMENTS. AO HAS ANALYZED THOSE S TATEMENTS AND CONCLUDED THAT THERE IS NO FINANCIAL SOUNDNESS. CIT(A) FAILED TO APPRECIATE THIS FACT. 3) ON THE OTHER HAND IT IS THE CONTENTION OF THE ASSE SSEE THAT THESE ARE AGRICULTURAL FARMERS WHO ARE REGULARLY SUPPLYING PA DDY TO COMPANY EVEN TILL DATE AND THERE CANNOT BE ANY DOUBT ABOUT THEIR FINANCIAL CREDITWORTHINESS TO LEND AMOUNTS TO THE ASSESSEE. REMARKS: FROM THE STATEMENTS OF CREDITORS IT IS AMP LY CLEAR THAT THEY ARE SMALL FARMERS OF LOW / NO MEANS AND THEY COULD NOT HAVE A DVANCED THE LOANS. SOME OF THE CREDITORS HAVE BANK LOANS OUTSTANDING. [EG. PAG E 35 OF PAPER BOOK Q.NO.9 PAGE 27 OF PAPER BOOK Q.NO.9.] BASED ON THESE FACTS AO RIGHT BY CONCLUDED THAT THE CREDITORS DON'T HAVE J CREDITWORTHINESS. 15 4) THEY HAD DULY CONFIRMED ABOUT LENDING THE MONEY TO THE ASSESSEE WHICH HAS NOT BEEN REBUTTED BY THE ASSESSING O FFICER WITH ANY EVIDENCES OR MATERIAL. REMARKS: MERE FILING OF CONFIRMATION IS NOT ENOUGH. AO REBUTTED THE CREDITORS' CLAIM CLEARLY REGARDING CREDITWORTHINESS A ND GENUINENESS OF TRANSACTION. 5) THEY ARE BEING AGRICULTURAL FARMERS FROM VILLAGES THEY ARE NOT WELL VERSED WITH THE BANKING OPERATIONS AND NON-OPERATION OF BA NK ACCOUNT CANNOT BE VIEWED AS AN ADVERSE INFERENCE TO HOLD AGAINST THE ASSESSEE THAT THE LOAN IS A BOGUS ONE. REMARKS: THOUGH NON-OPERATION OF ACCOUNT IN ITSELF DOES NOT PROVE ANYTHING THE PATTERN OF OPENING ACCOUNTS ONLY FOR THIS LOAN TRANSACTION AND OTHER FACTORS GO ON TO SHOW SCHEME OF ASSESSEE IN I NTRODUCING CASH THROUGH THESE CREDITORS 6) BEING REGULAR PADDY SUPPLIERS TO M/S LALITHA ENTER PRISES INDUSTRIES PVT LTD. IN WHICH THE ASSESSEE IS A DIRECTOR THERE IS NOTHING WRONG ON THE PART OF THE ASSESSEE TO INTRODUCE THESE FARMERS TO OPEN THE BANK ACCOUNT S. REMARKS: TRUE THAT THERE IS NO PROBLEM IN INTRODUCI NG THE PADDY FARMERS BANK. BUT SOME OF THE CREDITORS ALREADY HAVE SEPARATE BAN K ACCOUNTS EVEN THEN NEW ACCOUNTS WERE GOT OPENED FOR THESE LOANS. [EG. PAGE 34 OF I PAPER BOOK Q.NO.7] SOME OF THE CREDITORS HAVE COOPERATIVE BANK LOANS ALSO. 7) WHAT IS REQUIRED TO DISPROVE ANY LOAN AS NOT GENUIN E IS TO EXAMINE THE LOAN CREDITOR AND PROVE HIS INCAPACITY TO LEND THOSE MONIES TO THE ASSESSEE. REMARKS: IT IS UNDISPUTED THAT LOAN CREDITORS ARE A LREADY EXAMINED BY INVESTIGATION WING AND THOSE STATEMENTS ARE NOT REB UTTED BY ASSESSEE AND BASED ON THOSE STATEMENTS ONLY SOME CREDITS ARE ADMITTED AS INCOME. LOAN CREDITORS INCAPACITY IS AMPLY PROVED FROM (THE STATEMENTS OF CREDITORS. 8) IN ORDER TO ESTABLISH A PARTICULAR LOAN WHETHER IT IS GENUINE OR NOT IT IS NECESSARY TO ESTABLISH THE IDENTITY OF THE PERIOD CONFIRMATION FROM SUCH PERSON AND CREDITWORTHINESS OF SUCH LENDER TO GIVE MONIES TO THE ASSESSEE. AS FAR AS TH E ASSESSEE IS CONCERNED HE HAS DISCHARGED HIS ONUS BY FILING NECESSARY CONFIRMATION LETTERS FROM THE LOAN CREDITORS. REMARKS: IDENTITY OF CREDITORS IS NEVER IN DISPUTE BUT GENUINENESS OF TRANSACTION AND CREDITWORTHINESS ARE HELD TO BE AGAINST THE ASS ESSEE AND HENCE AO ADDED THE CREDITS. 9) IT IS FOR THE AO TO REBUT SUCH EVIDENCES FILED BY T HE ASSESSEE WITH ANY COGENT EVIDENCES TO COME TO SUCH CONCLUSION THAT THE LOANS ARE NOT GENUINE. REMARKS: AO REBUTTED THE EVIDENCES (CONFIRMATIONS) FILED AND ESTABLISHED A (PATTERN IN ARRANGING THESE LOANS AND HENCE ALL THE SE SHOULD BE TAKEN AS ADVERSE 16 FINDINGS BY AO. CIT(A) INSTEAD OF APPRECIATING THES E [UNDISPUTED FACTS WERE DIRECTED BY AO. AO TREAT THE LOANS REPAID AS (GENUI NE. THOUGH THESE SO CALLED REPAYMENTS WERE MADE AFTER SEARCH / POST SEARCH PRO CEEDINGS. THE REFUNDS OF THESE BOGUS LOANS DOES NOT P ROVE THAT THE LOANS ARE GENUINE. IF THE CIT(A) FELT THAT SUFFICIENT ENQUIRIES WERE NOT CONDUCTED BY AO. HE SHOULD HAVE GOT REMAND REPORT OR REMANDED THE MATTER TO AO FOR FURTHER EXAMINATIO N INSTEAD OF DELETING THE ADDITION. 16. HE PRAYED THAT THE ORDER OF THE LD. CIT(A) TO T HE EXTENT IT IS AGAINST THE REVENUE SHOULD BE REVERSED. THE LD. COUNSEL F OR THE ASSESSEE ON THE REVENUE APPEALS SUBMITTED THAT TO THE EXTENT THE AS SESSEE COULD NOT EXPLAIN THE SOURCES OF FUNDS FOR THE AMOUNTS BORROWED THE ASSESSEE HAD MADE DECLARATION BEFORE THE INVESTIGATION WING AND THE S AME HAS BEEN ACCEPTED. AS FAR AS THE OTHER LOANS ARE CONCERNED THE ASSESS EE FURNISHED EVIDENCE AS TO THE PAYMENT OF INTEREST AS WELL AS TO THE PAYMEN T OF PRINCIPAL AND ON THESE FACTS THE CIT(A) GAVE A DIRECTION TO THE ASSESSING OFFICER TO VERIFY AND PASS AN APPROPRIATE ORDER. HE SUBMITTED THAT THE ASSESS ING OFFICER HAS VERIFIED THE DETAILS OF PAYMENT OF INTEREST AND REPAYMENT OF LOA N AND HAS GRANTED RELIEF. THUS HE SUBMITS THAT THE ORDER OF THE CIT(A) ON TH IS ASPECT SHOULD NOT BE DISTURBED. 17. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDER ATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PERUSAL OF THE PA PERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW WE HOLD AS FOLLOWS . 18. WE FIRST TAKE UP THE ISSUE OF ADDITION U/S 68 B EING LOANS RECEIVED BY THE ASSESSEES FROM VARIOUS FARMERS. ON A PERUSAL O F THE ORDER OF CIT(A) WE FIND THAT THE FINDINGS OF THE LD.CIT(A) ARE GIVEN IN PARA 6 ARE CORRECT. AT PARA 6 TO 6.2 THE LD.CIT(A) HELD AS FOLLOWS. 17 6.0. THE FIRST COMMON EFFECTIVE GROUND OF APPEAL F OR ALL THE YEARS UNDER APPEAL IS RELATING TO ADDITION ON ACCOUNT OF UNSECURED LOANS. THE AO HELD A VIEW THAT THE LOAN CREDITORS ARE BOGUS T HEY DO NOT HAVE FINANCIAL CREDIT WORTHINESS AND THEY ARE NOT THE OW NERS OF THE BANK ACCOUNT WHICH WAS OPENED FOR THE PURPOSE. HE HAS B ASED HIS FINDINGS ON THE FIELD ENQUIRIES SAID TO BE CARRIED OUT BY THE I NVESTIGATION WING IN THE POST SEARCH PERIOD TO ASCERTAIN THE GENUINENESS AND CREDIT WORTHINESS OF THE LENDERS. THE AO IS OF THE VIEW THAT ALL THE BA NK ACCOUNTS ARE OPENED WITH THE INTRODUCTION OF THE ASSESSEE AND THE SAID BANK ACCOUNTS ARE NOT OPERATED AFTER THE INITIAL ENTRY OF DEPOSIT AND WIT HDRAWAL. THE AO ALSO OPINED THAT INTEREST IS BEING CREDITED YEAR AFTER Y EAR WITHOUT BEING PAID PHYSICALLY TO THE SO CALLED CREDITORS. ACCORDINGLY THE AO SUSPECTED THE LOANS OBTAINED BY THE ASSESSEE FROM THESE LENDERS A ND REJECTED THE CLAIM OF THE ASSESSEE AND SOUGHT TO BE ASSESSED AS UNACCO UNTED INCOME FOR THE YEARS UNDER APPEAL. ACCORDINGLY THE AO QUANTIFIED A SUM OF RS.65 37 487/- AS UNACCOUNTED INCOME WHICH INCLUDES BOTH PRINCIPAL AND INTEREST UP TO THE AY 2009-10 AND ISSUED A SHOW CAU SE NOTICE TO THE APPELLANT IN THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER THE ASSESSEE ADMITTED AN AMOUNT OF RS.20 LAKHS FOR ALL THE YEARS AS UNEXPLAINED CREDITS AND IN RESPECT OF BALANCE AMOUNT ASSESSEE SUBMITTE D CONFIRMATION LETTERS FROM THE LOAN CREDITORS BEFORE THE AO. HOWEVER BY REJECTING THE SUBMISSION OF THE ASSESSEE THE AO PROCEEDED TO ASS ESS A SUM OF RS.20 22 573/- (AY 2005-06) RS.4 99 026/- (AY 2006 -07) RS.4 48 154/- (AY 2007-08) RS.5 37 015/- (AY 2008-09) RS.9 96 2 81/- (AY 2009-10) AFTER ALLOWING THE ADMISSION MADE BY THE ASSESSEE. 06.01. PRIMARILY THE AO PROCEEDED ON THE BASIS OF SOME EVIDENCES OF OPENING OF THE BANK ACCOUNT INOPERATIVE NATURE OF SUCH ACCOUNT RATHER THAN GOING INTO THE SUBSTANCE OF THE ISSUE BEFORE D ECIDING WHETHER THE LOAN IS GENUINE OR NOT. THE CONFIRMATIONS FILED BY THE LOAN CREDITORS HAVE NOT BEEN EXAMINED TO ESTABLISH THAT THESE CREDITORS ARE MERE NAME LENDERS NOT HAVING FINANCIAL SOUNDNESS TO LEND THE MONEY TO THE ASSESSEE. ON THE OTHER HAND IT IS THE CONTENTION OF THE ASSESSEE TH AT THESE ARE AGRICULTURAL FARMERS WHO ARE REGULARLY SUPPLYING PADDY TO THE CO MPANY EVEN TILL DATE AND THERE CANNOT BE ANY DOUBT ABOUT THEIR FINANCIAL CREDIT WORTHINESS TO LEND AMOUNTS TO THE ASSESSEE. THEY HAD DULY CONFIR MED ABOUT LENDING THE MONEY TO THE ASSESSEE WHICH HAS NOT BEEN REBUTTED B Y THE AO WITH ANY EVIDENCE OR MATERIAL. THEY ARE BEING AGRICULTURAL FARMERS FROM VILLAGES THEY ARE NOT WELL VERSED WITH THE BANKING OPERATION S AND ON OPERATIONS OF BANK ACCOUNT CANNOT BE VIEWED AS AN ADVERSE INFEREN CE TO HOLD AGAINST THE ASSESSEE THAT THE LOAN IS A BOGUS ONE. BEING REGULAR PADDY SUPPLIERS TO M/S LALITHA ENTERPRISES INDUSTRIES PVT.LTD. IN WHICH THE ASSESSEE IS A DIRECTOR THERE IS NOTHING WRONG ON THE PART OF THE ASSESSEE TO INTRODUCE THESE FARMERS TO OPEN THE BANK ACCOUNTS. WHAT IS R EQUIRED TO DISPROVE ANY LOAN AS NOT GENUINE IS TO EXAMINE THE LOAN CRED ITOR AND PROVE HIS 18 INCAPACITY TO LEND THOSE MONIES TO THE ASSESSEE. I N ORDER TO ESTABLISH A PARTICULAR LOAN WHETHER IT IS GENUINE OR NOT IT IS NECESSARY TO ESTABLISH THE IDENTITY OF THE PERSON CONFIRMATION FROM SUCH PERS ON AND CREDIT WORTHINESS OF SUCH LENDER TO GIVE MONIES TO THE ASS ESSEE. AS FAR AS THE ASSESSEE IS CONCERNED HE HAS DISCHARGED HIS ONUS B Y FILING NECESSARY CONFIRMATION LETTERS FROM THE LOAN CREDITORS. IT I S FOR THE AO TO REBUT SUCH EVIDENCES FILED BY THE ASSESSEE WITH ANY COGENT EVI DENCES TO COME TO SUCH CONCLUSION THAT THE LOANS ARE NOT GENUINE. IN THE ABSENCE OF ANY ADVERSE FINDINGS ON THESE FACTORS IT IS VERY DIFFICULT TO HOLD THAT ALL THE LOANS RECEIVED FROM CREDITORS ARE BOGUS AND UNACCOUNTED I NCOME OF THE ASSESSEE. 06.2. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE A R WAS ASKED ABOUT THE REPAYMENT OF THESE LOANS AND INTEREST THE REON. THE AR HAS FILED DETAILS OF REPAYMENT BY CHEQUES TO LOAN CREDITORS W HICH INCLUDE BOTH PRINCIPAL AND INTEREST. IF THE ASSESSEE REPAID THES E AMOUNTS TO THE LOAN CREDITORS BY CHEQUES THE QUESTION OF SUSPECTING TH E LOANS AS BOGUS DOES NOT ARISE. IF UNSECURED LOANS REMAIN WITH THE ASSES SEE FOR YEARS WITHOUT ANY REPAYMENT BEING MADE TO THE CREDITORS THERE IS A CASE FOR SUSPECTING SUCH TYPE OF UNSECURED LOANS AS BOGUS. HOWEVER IN THE INSTANT CASE IT IS SUBMITTED THAT THESE LOANS HAVE BEEN REPAID BY THE CHEQUE ALONG WITH INTEREST TO ALL THE LOAN CREDITORS. HENCE I AM OF THE VIEW THAT AO IS NOT CORRECT IN SUBJECTING THESE LOANS AS UNACCOUNTED IN COME OF THE ASSESSEE. HOWEVER THE AO IS DIRECTED TO VERIFY THE REPAYMENT OF THESE LOANS BY THE ASSESSEE AND ALLOW THOSE AMOUNTS WHICH WERE REPAID AS GENUINE AND BALANCE UNPAID IF ANY TO BE ASSESSED AS UNACCOUNTE D INCOME OF THE ASSESSEE IN THE RELEVANT ASSESSMENT YEARS. 18.1. FROM THE ABOVE IT IS SEEN THAT INTEREST HAS BEEN CREDITED ON THESE LOANS YEAR AFTER YEAR AND NO REPAYMENT HAS BEEN MAD E EITHER OF THE INTEREST OR OF THE PRINCIPAL. IT IS ONLY IN THE CASE OF CER TAIN LOAN CREDITORS THAT AMOUNTS HAVE BEEN RETURNED ALONG WITH INTEREST. DU RING THE COURSE OF SEARCH PROCEEDINGS BOTH THE BROTHERS ADMITTED PRINCIPAL INTEREST AMOUNT TO THE TUNE OF RS.40 24 526/- AS THEY ARE UNACCOUNTED INCO ME IN THE RESPECTIVE YEARS. 18.2. WE ALSO FIND THAT THE ASSESSEE HAS FILED CON FIRMATION LETTERS FROM LOAN CREDITORS AND HE HAS ALSO CLAIMED THAT CE RTAIN CREDITORS WERE REPAID THE INTEREST. UNDER THE CIRCUMSTANCES WE ARE OF TH E CONSIDERED VIEW THAT THE 19 LD.CIT(A) WAS CORRECT IN HOLDING THAT THE ADDITION U/S 68 ON ACCOUNT OF LOAN CREDITORS IS TO BE RESTRICTED TO THE EXTENT WHERE THE ASSESSEE HAS NOT REPAID EITHER PRINCIPAL OR INTEREST. 18.3. WE FIND NO INFIRMITY IN THIS ORDER AND THE G ROUNDS OF BOTH THE ASSESSEE AND REVENUE ON THIS ISSUE ARE DISMISSED. 19. THE NEXT ISSUE IS ADDITION MADE ON ACCOUNT OF GIFTS RECEIVED. FOR THE AY 2005-06 THE ASSESSEE HAS RECEIVED CERTA IN GIFTS FROM NRIS WHO ARE MOSTLY THEIR NEAR RELATIVES. ON THIS ISSUE THE ASSESSEE HAS RAISED AN ADDITIONAL GROUND OF APPEAL WHICH IS A LEGAL GROUND AND SINCE ALL FACTS ARE ALREADY ON RECORD THE SAME IS ADMITTED AND DECIDED AS UNDER. 20. THE UNDISPUTED FACT IS THAT NO INCRIMINATING M ATERIAL WHATSOEVER WAS FOUND BY THE REVENUE FOR THE AY 2005-06. THE R ETURNS WERE FILED AND THE TIME FOR ISSUE OF NOTICE U/S 143(2) HAS EXPIRED . THUS THERE IS NO ABATEMENT OF ASSESSMENTS. CONSISTENT WITH THE VIEW TAKEN BY THE ITAT HYDERABAD BENCH IN THE CASE OF AMR INDIA LIMITED W E HOLD THAT UNDER THESE CIRCUMSTANCES NO ADDITION CAN BE MADE FOR A.Y.2005- 06 FOR GIFTS RECEIVED. 21. EVEN OTHERWISE THESE GIFTS WERE RECEIVED FROM FAMILY MEMBERS WHO ARE NRIS FROM ABROAD. THIS FACT IS NOT IN DISPUTE. HE HAS SUBMITTED LETTERS OF CONFIRMATION THAT WERE FILED BY THESE NRIS. THE MONEY WAS REMITTED THROUGH BANKING CHANNELS. THE CONFIRMATION LETTERS IN QUESTION ARE FROM PAGES 4 TO 12 OF THE PAPER BOOK. THE A.O. HAS NO M ATERIAL TO CONTROVERT OR DISPUTE THE CLAIM OF THE ASSESSEE. 21.1. APPLYING THE ABOVE CASE LAWS TO THE FACTS OF THE CASE WE DELETE THE SAID ADDITION. THEREFORE GROUNDS RAISED BY RE VENUE IN THIS REGARD ARE DISMISSED AND THE GROUNDS RAISED BY THE ASSESSEES A RE ALLOWED. 20 22. THE SECOND SET OF CREDITS WHICH ARE CONFIRMED I S GIFTS RECEIVED FROM SMT. V. ANJANI DEVI. THE UNDISPUTED FACTS ARE THAT SMT. V. ANJANI DEVI IS THE SISTER OF THESE ASSESSEES. SHE HAS CONFIRMED THAT GIFTS HAVE BEEN MADE BY HER TO BOTH HER BROTHERS WHO ARE RESIDENTS OF PEDDA PURAM OUT OF LOVE AND AFFECTION. THIS STATEMENT HAS BEEN GIVEN BY HER ON OATH EVEN DURING THE COURSE OF EXAMINATION IN POST SEARCH PROCEEDINGS. THE SOURCES OF FUNDS ARE EXPLAINED AS THOSE RECEIVED BY HER FROM HER SON SHR I V.RAMASHANKAR WHO IS RESIDENT OF USA. ON THIS FACTUAL MATRIX IN THE AB SENCE OF ANY CONTRADICTORY EVIDENCE WE ARE OF THE CONSIDERED VIEW THAT THE LE GAL POSITION IN THE CASE OF (A) SURESH KAKAR REPORTED IN 324 ITR 231 (DEL); (B) GAUHATI ITAT THIRD MEMBER BENCH IN THE CASE OF AMITA DEVI REPORTED IN 137 TTJ 521/53 DTR 214 (TRIB.); (C ) AGRA BENCH OF ITAT IN THE CASE OF AVNISH KUMAR REPORTED IN 124 TTJ 750; (D) LUCKNOW BENCH OF ITAT IN THE CASE OF SONU AGARWAL REPORTED IN 29 SOT 478 IS APPLICABLE TO THE ASSESSE ES AS WELL. APPLYING THE PROPOSITIONS LAID DOWN IN THESE CASES TO THE FACTS OF THE CASE ON HAND WE HAVE TO DELETE THE ADDITION FOR THE REASON THAT THE DONOR IS THE SISTER OF THE ASSESSES THE GIFTS WERE RECEIVED THR OUGH BANKING CHANNELS THERE WERE NO CASH GIFTS ALL THE GIFTS WERE DULY R ECORDED IN THE BOOKS OF THE ASSESSEES PRIOR TO THE DATE OF SEARCH NO INCRIMINA TING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. THIS IS A CASE WHERE NO FINDING IS GIVEN THAT THE FUNDS BELONGING TO THE ASSESSEE HAVE BEEN FUELLED B ACK TO THE ASSESSEE BY WAY OF GIFTS FROM SISTER. IN FACT NO SUCH MATERIAL WAS DISCOVERED DURING THE COURSE OF SEARCH. THE DONOR FILED CONFIRMATION LET TERS TO THE DDI (INVESTIGATION) AND THE DDI (INV.) EXAMINED HER ON OA TH. IT WAS ONLY WITH REGARD TO SOURCES OF GIFTS TO THE TUNE OF RS.40 90 488/- THAT THE ASSESSEE 21 HAD VOLUNTARILY COME FORWARD AND ADMITTED INCOME. TO ADD THE WHOLE AMOUNT IN OUR CONSIDERED VIEW IS NOT CORRECT. TH E AO HAS NOT CONDUCTED ANY INVESTIGATION OR ENQUIRY AND HAS MADE THE ADDIT ION ONLY ON THE BASIS OF INFERENCES ON THE PREPONDERANCE OF PROBABILITIES. COMING TO THE ALLEGATIONS THAT THE ASSESSEE WAS BUILDING UP CAPITAL WE FIND THAT ON FACTS THAT THE ASSESSEE HAS MADE HUGE INVESTMENT OF RS.76 CRORES A ND THE AMOUNT OF GIFT IS MUCH LESSER. 22.1. THE GIFT IN QUESTION BEING RECEIVED FROM THE SISTER FALLS WITHIN THE EXEMPT CATEGORY AS PER PROVISIONS OF S.56(2)(V) AND HENCE CANNOT BE TAXED. IN CASE THE REVENUE IS OF THE OPINION THAT THE DONO R SMT.ANJANI DEVI COULD NOT PROVE HER SOURCES THEN ADDITION SHOULD HAVE BE EN CONSIDERED IN HER CASE AND NOT IN THE CASE OF THE ASSESSEES. 22.2. ONCE THE ASSESSEES HAVE DISCHARGED THE BURDEN THAT LAY ON THEM THE ONUS SHIFTS TO THE REVENUE. THIS IS A CASE WHERE T HE AO HAS NOT CONDUCTED ANY ENQUIRIES AND HAS SIMPLY EXTRACTED THE PROCEEDI NGS OF SEARCH AND MADE ADDITIONS. UNDER THE CIRCUMSTANCES NO ADDITION CAN BE MADE. FOR THIS PROPOSITION WE DRAW STRENGTH FROM THE FOLLOWING CAS E LAWS. I. CIT VS. GANGESHWARI METAL P.LTD. (2014) 361 ITR 10 (DEL): HELD DISMISSING THE APPEAL THAT THERE WAS A CLEAR LACK OF INQUIRY ON THE PART OF THE AO ONCE THE ASSESSEE HAD FURNISHED ALL THE MATERIAL. IN SUCH AN EVENTUALITY NO ADDITION COULD BE MADE U/S 6 8 OF THE ACT. II. CIT VS. KULWANT INDUSTRIES (2009) 311 ITR 377 (D EL): HELD THE DONOR IN THE PRESENT CASE IS REAL MATERNAL UNCLE OF THE DONEE I.E. BROTHER OF HIS MOTHER AND THE GIFT HAS BEEN MADE FR OM THE NRE ACCOUNT MAINTAINED BY THE DONOR AND REMITTANCE IN S UCH AN 22 ACCOUNT COULD ONLY BE MADE FROM FOREIGN EXCHANGE. THE ACCOUNT HAS BEEN FOUND TO BE GENUINE AS PER THE FINDINGS RE CORDED BY THE AO AND DULY ACCEPTED BY THE TRIBUNAL. THE IDENTITY OF THE DONOR STANDS ESTABLISHED AND THE GIFT HAS BEEN MADE THROU GH CHEQUE BY BANKING CHANNEL. THEREFORE ALL THE NECESSARY INGR EDIENTS OF GIFT STAND SATISFIED AND IT IS NOT OPEN TO ANY CHALLENGE . MOREOVER THE REVENUE HAS SOUGHT TO RAISE ALL QUESTIONS OF FACTS AS AGAINST THE REQUIREMENT OF THE LAW TO RAISE ONLY A QUESTION OF LAW. FURTHER ONCE BROAD FEATURES AND BASIC INGREDIENTS CONSTITUT ING GIFT ARE SATISFIED THEN IT CANNOT BE REPLACED BY CIRCUMSTANT IAL EVIDENCE. THEREFORE THE QUESTION OF LAW RAISED IS LIABLE TO BE ANSWERED AGAINST THE REVENUE. III. CIT-II VS. M/S RUSMI DISTILLERIES PVT.LTD. IN ITA 7 9/2013 (AP) WHEREIN IT IS HELD AS FOLLOWS: AFTER HEARING THE LD .COUNSEL FOR THE APPELLANT AND AFTER GOING THROUGH THE IMPUGNED ORDE R OF THE LD.TRIBUNAL IT APPEARS TO US THAT NO QUESTION OF LA W IS INVOLVED IN THE MATTER AS THE LD.TRIBUNAL HAS DECIDED THE MATT ER ON APPRECIATION OF FACT. HOW THE APPRECIATION OF FACT WAS RECORDED BY THE LEARNED TRIBUNAL IS SET OUT HEREUNDER: . THE ABOVE FACT FINDING OF THE LEARNED TRIBUNAL IS S O COMPACT THAT THIS COURT IN ANY CIRCUMSTANCES CANNOT TOUCH THE SAME. ONCE THE IDENTITY IS ESTABLISHED IT IS HEAVY BURDEN ON THE PART OF THE REVENUE ASKING THE ADJUDICATING AUTHORITY CONCERNED TO DISB ELIEVE IT. THE CIT(A) AS WELL AS THE LD.TRIBUNAL HAVE CORRECTLY AC CEPTED THE 23 FACTUAL POSITION AND GRANTED RELIEF. THEREFORE WE DO NOT FIND ANY ERROR IN THE ORDER IMPUGNED TO INTERFERE WITH THE S AME. THE APPEAL IS ACCORDINGLY DISMISSED. 22.3. IN VIEW OF THE ABOVE DISCUSSION WE DELETE THE ADDITION MADE IN RESPECT OF GIFTS GIVEN BY THE SISTER V.ANJANA DEVI TO THE A SSESSEES TO THE EXTENT CONFIRMED BY THE LD.CIT(A). 23. IN THE RESULT THE APPEALS OF THE ASSESSEES ARE ALLOWED IN PART . PRONOUNCED IN THE OPEN COURT ON 28 TH APRIL 2014. SD/- SD/- (SAKTIJIT DEY) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER VG/SPS MANGA/SPS VISAKHAPATNAM DATED 28 TH APRIL 2014 COPY TO 1 SRI MATTEY SATYA PRASAD 4-1-57 SRI LALITHA ENTE RPRISES INDUSTRIES PVT. LTD. VALUTHIMMAPURAM PEDDAPURAM 2 SRI MATTEY SRINIVAS 4-1-57 SRI LALITHA ENTERPRI SES INDUSTRIES PVT. LTD. VALUTHIMMAPURAM PEDDAPURAM 3 ACIT CENTRAL CIRCLE RAJAHMUNDRY 4 THE CIT HYDERABAD 5 THE CIT(A)-I VISAKHAPATNAM 6 THE DR ITAT VISAKHAPATNAM. 7 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM