Shri Nagendra Shetty, Hassan v. ITO, Hassan

ITA 1128/BANG/2008 | 2003-2004
Pronouncement Date: 30-04-2010 | Result: Partly Allowed

Appeal Details

RSA Number 112821114 RSA 2008
Assessee PAN RULES1963I
Bench Bangalore
Appeal Number ITA 1128/BANG/2008
Duration Of Justice 1 year(s) 8 month(s) 16 day(s)
Appellant Shri Nagendra Shetty, Hassan
Respondent ITO, Hassan
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 30-04-2010
Date Of Final Hearing 08-03-2010
Next Hearing Date 08-03-2010
Assessment Year 2003-2004
Appeal Filed On 13-08-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K. JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY ACCOUNTANT MEMBER ITA NOS. 1127 TO 1129/BANG/2008 ASSESSMENT YEARS : 2002-03 TO 2004-05 SRI A.N. NAGENDRA SETTY PROP. M/S. R.N. TRADERS MAIN ROAD ARKALGUD HASSAN DISTRICT KARNATAKA. : APPELLANT VS. THE INCOME TAX OFFICER WARD-2 HASSAN. : RESPONDENT APPELLANT BY : SHRI MANOJ D. PUKALE ADVOCATE RESPONDENT BY : SMT. V.S. SREELEKHA ADDL. CIT(DR) O R D E R PER A. MOHAN ALANKAMONY ACCOUNTANT MEMBER THESE THREE APPEALS OF THE ASSESSEE ARE DIRECTED A GAINST THE COMMON ORDER OF THE LD. CIT (A) MYSORE IN ITA NOS: 85 TO 87/MYS/CIT (A)/06-07 DATED: 26.5.2008 FOR THE ASSESSMENT YEARS 2002-03 2003-04 AND 2004-05 . ITA NO: 1127 AY 2002-03 : 2. THE ASSESSEE HAS RAISED TEN GROUNDS OF APPEAL O UT OF WHICH GROUND NOS: 8 AND 10 BEING GENERAL IN NATURE AND NO SPECIFIC ISSUES ITA NO.1127 TO 1129/B/08 PAGE 2 OF 29 RAISED THEY HAVE BECOME NON-CONSEQUENTIAL AND THE GROUND NO.9 IS NOT MAINTAINABLE AS CHARGING OF INTEREST U/S 234A 234B AND 234C OF THE ACT ARE MANDATORY AND CONSEQUENTIAL IN NATURE. IN THE REMAINING GROUNDS THE ISSUES RAISED ARE REFORMULATED AS UNDER: THE LD. CIT (A) HAD ERRED IN SUSTAINING THE ADDITIO NS OF : (I) THE CONDITION PRECEDENT FOR REOPENING BEING ABSENT THE IMPUGNED ORDER OF THE AO WAS BAD IN LAW; (II) FIXED DEPOSIT OF RS.50000/- WITH SRI KANNIKA PARAME SHWARI BANK; (III) LOAN AMOUNT OF RS.200804/- DEPOSITED IN S.B. ACCOUN T AND WAS NOT INCOME OF THE ASSESSEE; (IV) GIFT OF RS.1 LAKH FROM ASSESSEES FATHER-IN-LAW; (V) BORROWAL OF RS.1.5 LAKH FROM WIFE OF THE ASSESSEE (VI) ADDITION OF RS.50000/- AS UNEXPLAINED LIABILITY IN RESPECT OF A R NAGENDRA; (VII) TRADE CREDITS OF RS.85115/-. ITA NO: 1128 AY 2003-04 : 3. FOR THIS A.Y THE ASSESSEE HAS RAISED ELEVEN G ROUNDS OF APPEAL OUT OF WHICH GROUND NOS: 9 AND 11 BEING GENERAL IN NATURE AND NO SPECIFIC ISSUES RAISED THEY HAVE BECOME NON-CONSEQ UENTIAL AND THE GROUND NO.10 IS NOT MAINTAINABLE AS CHARGING OF INT EREST U/S 234A 234B AND 234C OF THE ACT ARE MANDATORY AND CONSEQUENTIAL IN NATURE. IN THE REMAINING GROUNDS THE ISSUES RAISED ARE REFORMULAT ED AS UNDER: THE LD. CIT (A) HAD ERRED IN SUSTAINING THE ADDITIO NS OF : (I) THE CONDITION PRECEDENT FOR REOPENING BEING ABSENT THE IMPUGNED ORDER OF THE AO WAS BAD IN LAW; (II) BORROWAL OF RS.1 LAKH FROM WIFE OF THE ASSESSEE (III) GIFT OF RS.1.5 LAKH FROM ASSESSEES FATHER-IN-LAW; (IV) BORROWAL OF RS.1 LAKH FROM SMT.SAVITHA; ITA NO.1127 TO 1129/B/08 PAGE 3 OF 29 (V) RS.2.5 LAKHS AND RS.1 LAKH FROM MADANLAL AND SANT HOSH BABU BEING RENT ADVANCE FOR SHOPS (VI) TRADE CREDITS; (VII) ADDITION OF RS.600/- BEING THE DIFFERENCE IN LOAN A CCOUNT. ITA NO: 1129 AY 2004-05 : 4. FOR THIS ASSESSMENT YEAR THE ASSESSEE HAS RAISE D SIX GROUNDS IN WHICH GROUND NOS: 1 4 AND 6 WERE GENERAL AND THUS THEY DO NOT SURVIVE FOR ADJUDICATION . GROUND NO.2 WITH REGARD TO THE ADDITION OF BANK BALANCE OF RS.4316/- WAS NOT PRESSED DURING THE COU RSE OF HEARING AND THUS THIS GROUND IS DISMISSED AS NOT PRESSED AND THE GROUND NO.5 IS NOT MAINTAINABLE AS THE CHARGING OF INTEREST U/S 23 4A 234B AND 234C OF THE ACT ARE MANDATORY AND CONSEQUENTIAL IN NATURE . IN A NUT-SHELL THE LONE GROUND SURVIVED FOR ADJUDICATION IS THAT THE CIT (A) OUGHT TO HAVE DELETED THE RENT ADVANCE OF RS.3.10 LAKHS WHICH WERE RECEIVED ON THREE DIFFERENT DATES THROUGH CHEQUES. 5. DURING THE COURSE OF HEARING THE LD. A.R CAME U P WITH TWO APPLICATIONS UNDER RULE 29 OF APPELLATE RULES 1963 IN FURNISHING OF ADDITIONAL EVIDENCE IN THE SHAPE OF EXTRACT OF BANK FD S.B. ACCOUNT LOAN ACCOUNT ETC FOR THE AYS UNDER DISPUTE TO RELY AND T O STRENGTHEN HIS CLIENTS ASSERTION. AFTER DUE CONSIDERATION OF THE RIVAL S UBMISSIONS ON THE ISSUE THE LD. A R WAS PERMITTED TO ADDUCE ADDITIONAL EVID ENCE AND THE REGISTRY WAS DIRECTED TO TAKE SUCH EVIDENCES FURNISHED BY TH E LD. A R ON RECORD. 6. AS THE ISSUES RAISED IN THESE APPEALS ARE SIMILA R AND INTER-LINKED FOR THE SAKE OF CONVENIENCE THEY ARE HEARD CONSIDERED TOGETHER AND DISPOSED OFF IN THIS COMMON ORDER. ITA NO.1127 TO 1129/B/08 PAGE 4 OF 29 AY 2002-03 : 7. BRIEFLY STATED THE ASSESSEE AN INDIVIDUAL ENG AGED IN THE BUSINESS OF TRADING IN RAGI MAIZE BESIDES OWNING A COMMERC IAL COMPLEX AT ARKALGUD. THE ASSESSEE HAD FURNISHED A RETURN OF INCOME FOR THE AY 02- 03 ADMITTING AN INCOME OF RS.96 630/- WHICH WAS P ROCESSED U/S 143(1) OF THE ACT. ON 30.3.2004 THERE WAS AN ACTION U/S 13 3A OF THE ACT IN THE BUSINESS PREMISES OF THE ASSESSEE. DURING THE COURS E OF SURVEY PROCEEDINGS THE ASSESSEE HAD ALLEGED TO HAVE AGREE D TO DECLARE AN ADDITIONAL INCOME OF RS.9.3 LAKHS ON ACCOUNT OF UNA CCOUNTED INVESTMENT IN THE COMMERCIAL COMPLEX WHICH WAS BEING CONSTRUCTED. 7.1. CONSEQUENT ON SURVEY A NOTICE U/S 148 OF THE ACT WAS SERVED ON THE ASSESSEE CALLING UPON HIM TO FURNISH A RETURN O F INCOME FOR THE AY 2002-03. THE ASSESSEE HAD IN TURN REQUESTED TO TREAT THE RETURN ORIGINALLY FILED WAS IN COMPLIANCE TO THE SAID NOTI CE. 7.2. AFTER DUE CONSIDERATION OF THE RELEVANT PARTI CULARS EVIDENCES PRODUCED ASSESSEES SUBMISSIONS ETC. THE AO HAD MADE ADDITIONS ON DIFFERENT HEADS AND ALSO THE TREATMENT OF THE LD. C IT(A) ON SUCH ADDITIONS ARE ILLUSTRATED AS UNDER: (I) FD OF RS.50 000/- : THE ASSESSEE HAD RAISED A LOAN OF RS.10 LAKHS FROM SRI KANNIKA PARAMESHWARI BANK [SKPB] FOR THE CONSTRUCTION OF THE COMMERCIAL COMPLEX WHICH WAS DU LY ACCOUNTED FOR. WHILE RAISING SUCH LOAN AS A COLLAT ERAL SECURITY THE ASSESSEE MADE FDS OF RS.50 000/- WHICH WERE NO T ACCOUNTED FOR. IN THE ABSENCE OF ANY SATISFACTORY EXPLANATIO N AND ON THE ITA NO.1127 TO 1129/B/08 PAGE 5 OF 29 STRENGTH OF THE BANK STATEMENT THIS AMOUNT WAS TRE ATED AS UNDISCLOSED INCOME U/S 69 OF THE ACT. AFTER CONSIDERATION OF THE ASSESSEES CONTENTIONS THE LD. CIT (A) OBSERVED THAT THE ASSESSEE DID NOT MAINTAIN SEPARAT E BALANCE SHEETS FOR HIS PERSONAL AND BUSINESS ASSETS AND TH US HIS OBJECTION WAS SPECULATIVE WITHOUT BACKING OF ANY EV IDENCE WITH REGARD TO THE SOURCE OF INCOME OR ASSETS AND LIABIL ITIES OTHER THAN WHAT WAS REFLECTED IN THE BALANCE SHEET. HENCE AD DITION WAS CONFIRMED. (II) S.B.ACCOUNT BANK BALANCE OF RS.2 00 804/- : O N VERIFICATION OF S.B.A/C WITH SKPB THE ASSESSEE HAD ENCASHED THE ENTIRE LOAN AMOUNT AND ALSO RENTAL ADVANCE OF RS.3 10 000/- FRO M BHAWAR SINGH. AS THE ENTIRE TRANSACTION OF THE S.B.ACCOUN T WAS NOT FINDING A PLACE EITHER IN THE CASH BOOK OR IN THE B ALANCE SHEET OF THE ASSESSEE RS.2 00 804/- WAS ADDED AS UNDISCLOSE D INCOME U/S 69 OF THE ACT. THE LD. CIT (A) WAS NOT RATHER IMPRESSED UPON BY TH E EXPLANATION OF THE ASSESSEE AND THUS CONFIRMED TH E ADDITION ON THE GROUND THAT THE ADDITION WAS NOT IN RESPECT OF ANY LOAN AMOUNT BUT OF AN ASSET WHICH WAS NOT RECORDED IN THE BALANCE SHEET; (III) GIFT FROM P.N.NAGARAJA SETTY OF MYSORE RS.1 LAKH : THE CLAIM OF THE ASSESSEE THAT HE HAD RECEIVED A GIFT O F RS.1 LAKH FROM HIS FATHER-IN-LAW WHO IS NO MORE NOW. HOWEVER THE AO WAS OF THE VIEW THAT THE SAID PERSON COULD NOT HAVE GIFTED THE ALLEGED ITA NO.1127 TO 1129/B/08 PAGE 6 OF 29 AMOUNT AS HE WAS IN RECEIPT OF PENSION OF RS.5000/ MONTH AND A PERUSAL OF BANK STATEMENT PRODUCED THE AVERAGE BA LANCE OF HIS BANK ACCOUNT FOR THE PERIOD FROM 1.4.01 TO 31.3.200 2 WAS MERELY LESS THAN RS.6000/-. NAGARAJ SETTYS SON ON OATH SWEARED THAT NEITHER HIS FATHER NOR HE GAVE ANY GIFT TO THE ASSE SSEE. ON A PERUSAL OF THE BANK STATEMENT OF DEPARTED PERSON R S.1 00 200/- WAS DEPOSITED IN CASH IN HIS S.B. ACCOUNT NO.424 S BM MYSORE BRANCH ON 7.2.02 AND ON THE SAME DAY OBTAINED A DD FOR RS.1 LAKH IN FAVOUR OF THE ASSESSEE. THUS BRUSHING ASI DE THE ASSESSEES THEORY THE AO ADDED THIS AMOUNT U/S 68 OF THE ACT. ON HIS PART THE LD. CIT (A) REJECTED THE ASSESSEE S CLAIM THAT HIS FATHER-IN-LAW WAS EARNING RENTAL INCOME FROM TWO PR OPERTIES AND THAT HIS SONS SWORN STATEMENT WAS INCONCLUSIVE ETC . AND CONFIRMED THE ADDITION ON THE GROUND THAT NO DETAIL S OF RENTAL INCOME OR ANY OTHER INCOME OF THE DONOR WAS FORTH-C OMING. NO EXPLANATION FOR THE SOURCE FOR DEPOSITING THE CASH IN THE BANK ACCOUNT WAS ALSO GIVEN. IT WAS NOT THE CASE AS IF THE GIFT WAS GIVEN OUT OF ACCUMULATION OF PENSION FUNDS. (IV) LOAN FROM SMT.LAXMI BABU W/O THE ASSESSEE RS.1.5 LAKHS : THE ASSESSEE DISCLOSED CREDIT BALANCE OF RS.1.5 LAK HS FOR THE AY 02-03 WHEREAS THE CREDITOR HAD ACCOUNTED FOR ONLY R S.50 000/-. SMT.LAXMI BABU AN INCOME-TAX ASSESSEE HAD NOT MAI NTAINED ANY BOOKS OF ACCOUNT FOR HER CLAIM OF EARNINGS FROM TAI LORING COACHING CLASSES FOR TAILORING PAINTING AND RANGOL I BUT PRODUCED A DIARY ACCORDING TO WHICH SHE HAD CONDU CTED COACHING CLASSES BETWEEN 28.5.00 TO 15.3.03 AND PUR PORTED TO HAVE EARNED INCOME OF RS.1 49 220/- OUT OF WHICH SHE HAD LENT ITA NO.1127 TO 1129/B/08 PAGE 7 OF 29 RS.50 000/- DURING THE F.Y. 01-02 (ON THREE OCCASIO NS) AND FROM 10.6.02 TO 15.3.03 (ON VARIOUS OCCASIONS) AMOUNTING TO RS.1 LAKH. BRUSHING ASIDE THE CONTENTION OF THE ASSESSEE AND A LSO THE AFFIRMATION OF THE SAID CREDITOR FOR THE DETAILED REASONS SET-OUT IN THE ASSESSMENT ORDER THE AO HAD ADDED RS.1 50 000/ - IN THE HANDS OF THE ASSESSEE U/S 68 OF THE ACT. AFTER DUE CONSIDERATION OF THE ASSESSEES FORCEFUL CONTENTIONS AND ALSO THE REASONING OF THE AO IN REJECTING THE A SSESSEES CLAIM THE LD. CIT (A) WAS OF VIEW THAT 5.THE RETURN OF INCOME FILED WAS NEVER SUBJECTED TO SCRUTINY IN THE CASE OF SMT LAXMI BABU. FILING OF RETURN ALONE CAN NOT BE EVID ENCE FOR INCOME EARNED UNLESS IT STANDS THE TEST OF SCRUTINY . FURTHER AS MENTIONED EARLIER A LOAN OF ONLY RS.50000/- WAS ST ATED TO BE GIVEN BY SMT. LAXMI BABU ON DIFFERENT DATES DURING THE PREVIOUS YEAR AND NOT RS.1 50 000/- AS CLAIMED BY THE APPELL ANT. FURTHER NO EVIDENCE AT ALL HAS BEEN LED IN RESPECT OF BUSIN ESS ACTIVITIES AND THE INCOME EARNED BY SMT LAXMI BABU EXCEPT A DI ARY WHICH HAS SOME RECEIPTS NOTED BUT WHICH IS ENTIRELY UNCOR ROBORATED. IN VIEW OF THE FOREGOING THE ADDITION MADE BY THE AO IS CONFIRMED. (V) CREDITOR - A. R.NAGENDRA RS.50 000 : THERE WAS A CREDIT BALANCE OF RS.50000/- OUTSTANDIN G IN THE ABOVE NAMED PERSON. NEITHER WAS THERE ANY CONFIRMATION LE TTER NOR WAS THE ALLEGED CREDITOR PRODUCED FOR EXAMINATION. WHE N QUERIED THE ASSESSEE CAME UP WITH A THEORY THAT HE GOT A LOAN O F RS.50 000/- BY WAY OF A DD FROM NAGENDRA WHICH WAS DEPOSITED IN THE ITA NO.1127 TO 1129/B/08 PAGE 8 OF 29 ASSESSEES OD ACCOUNT. ON VERIFICATION THE AO FOU ND THAT THERE WAS NO DOCUMENTARY EVIDENCE TO SUGGEST THAT THE ASS ESSEE PROCURED A LOAN FROM THE SAID PERSON. IN THE MEAN WHILE THE ASSESSEE CAME UP WITH A LETTER DT: 23.8.06 IN WHICH HE VOLUNTEERED TO OFFER RS.4 LAKHS AS ADDITIONAL INCOM E FOR THE AY 2004-05 SETTING ASIDE THE CLAIM OF ALLEGED LOANS [ FROM A.R. NAGENDRA RS.50000/- PN.NAGARAJA SETTY RS.1.5 LAKHS SMT.SAVITHA RS.1 LAKH AND FOR COMPLEX CONSTRUCTION RS.1 LAKH]. HOWEVER THE AO ADDED THIS AMOUNT OF RS.50 000/- U/ S 68 OF THE ACT FOR THE AY 2002-03 ITSELF SINCE THE CREDITOR LI ABILITY PERTAINS TO THE SAID AY. FOR THIS ADDITION THE LD. CIT (A) HAD REASONED THU S 6. THIS LOAN IS OFFERED AS INCOME IN AY 04-05. HOWEVER TH E LOAN IS REFLECTED IN THE BALANCE SHEET OF THIS YEAR. AO HA S NOTED THAT THERE IS NOTHING TO SHOW THAT THE SUM OF RS.50 000/ - RECEIVED BY DD WAS RECEIVED FROM NAGENDRA. THE APPELLANT HAS N OT PROVED THE CASH CREDIT BEFORE THE AO. THE AR HAS TAKEN TH E PLEA THAT THE CONFIRMATION LETTER WAS FILED A FACT DISPUTED BY T HE AO. IT IS ALSO ARGUED THAT THE LOAN IS BY WAY OF DEMAND DRAFT AND IS THEREFORE GENUINE. HOWEVER THIS BY ITSELF PROVES NOTHING. I HAVE CONSIDERED THE APPEAL. THIS CASH CREDIT HAS NOT BEEN PROVED B EFORE THE AO. THE ADDITION MADE IS THEREFORE CONFIRMED. (VI) TRADE CREDITS RS.85 115/ -: WHEN THE ASSESSEE WAS CONFRONTED BY THE AO TO PRODU CE THE LIST OF SUNDRY TRADE CREDITORS AND THEIR CONFIRMATION LETTE RS THE ASSESSEE CAME UP WITH A REPLY THAT THEY WERE SMALL AGRICULTU RISTS FROM NEARBY VILLAGES WHO SELL THEIR PRODUCES WHOEVER OFF ER HIGHER RATE AND THUS HE COULD NEITHER BE IN A POSITION TO F URNISH THEIR NAMES AND ADDRESSES NOR PRODUCE ANY CONFIRMATION LETTERS. IN THE ITA NO.1127 TO 1129/B/08 PAGE 9 OF 29 ABSENCE OF ANY PROOF TO SUGGEST THE GENUINENESS OF THE CLAIM THE ENTIRE TRADE CREDITS OF RS.85115/- WAS ADDED AS TH E INCOME OF THE ASSESSEE U/S 68 OF THE ACT. THE ADDITION MADE BY THE AO WAS CONFIRMED BY THE LD . CIT (A) ON THE GROUND THAT THE CREDITORS WERE NOT IDENTIFIE D AND THEIR ADDRESSES WERE NOT FORTH-COMING. THE AR HAD CONCED ED BEFORE HIM HIS INABILITY IN PRODUCING THE CREDITORS WHO WE RE FARMERS AND HOWEVER HE WAS UNABLE TO EXPLAIN AS TO WHY EVEN TH E NAMES AND ADDRESSES OF THE CREDITORS WERE NOT FURNISHED. 7.3 AGGRIEVED THE ASSESSEE HAS COME UP WITH THE PR ESENT APPEAL. THE LD. AR HAD REITERATED MORE OR LESS WHAT HAS BEEN CO NTENDED BEFORE THE AUTHORITIES BELOW. IN FURTHERANCE HE HAD COME UP WITH A PAPER BOOK CONTAINING 1 27 PAGES WHICH CONSISTS AMONG OTHERS COPIES OF (I) STATEMENT SHOWING THE ANALYSIS ON TRADE CREDITORS (II) RENTAL AGREEMENT (III) CONFIRMATION LETTERS WITH REGARD TO RENT ADVANCES E TC 7.4 ON HER PART THE LD. D R WAS VERY SPECIFIC I N HER URGE THAT THE AUTHORITIES BELOW HAVE ANALYZED THE ISSUES IN DEPTH DELIBERATED UPON THE SEQUENCES ELABORATELY AND CAME TO THE CONCLUSIONS I N A JUDICIOUS MANNER WHICH REQUIRE NO INTERFERENCE AT THIS STAGE. THE L D. D R ALSO FURNISHED A BRIEF AND COMMENTS ON THE GROUNDS RAISED BY THE ASS ESSEE IN SUPPORT OF THE REVENUES STAND. ITA NO.1127 TO 1129/B/08 PAGE 10 OF 29 7.5 WE HAVE DULY CONSIDERED THE RIVAL SUBMISSIONS PERUSED THE RELEVANT RECORDS EVIDENCES PRODUCED BY THE EITHER PARTY IN SUPPORT OF THEIR RESPECTIVE STAND. I. A.Y 2002-03 : 8. CONDITION PRECEDENT FOR REOPENING OF THE ASSESSMENT BEING ABSENT : 8.1 THE CONTENTION OF THE LD. AR WAS THAT THE RECO RDED REASON WAS WITHOUT APPLICATION OF MIND AND CONTRARY TO THE FAC TS OF THE CASE. THE FACT THAT THE LOAN AMOUNTS WERE DULY REFLECTED IN THE AS SESSEES BALANCE SHEET AND THEREFORE THE ASSUMPTION BASED ON NON-EXISTIN G MATERIAL TO DRAW INFERENCE REFLECT A DOUBT OR SUSPICION OF THE AO AN D CANNOT FORM BELIEF THAT THE INCOME ESCAPED ASSESSMENT TO ASSUME JURISDICTIO N U/S 147 OF THE ACT. 8.2 WE HAVE DULY CONSIDERED THE SUBMISSION OF THE L D. A R AND ALSO PERUSED THE RELEVANT RECORDS. IT IS EVIDENT FROM T HE REASONING OF THE AO THAT NO CONFIRMATION FROM THE WIFE OF THE ASSESSEE WAS FILED THAT SMT. LAXMI BABU HAD NOT FILED THE BALANCE SHEET ALONG WI TH HER RETURN OF INCOME FURNISHED FOR THE AY 2002-03 AND THAT THE ALLEGED L OAN ADVANCED TO THE ASSESSEE WAS NOT FINDING A PLACE ANYWHERE IN HER RE TURN OF INCOME. 8.3 IN OUR CONSIDERED VIEW THIS REASONING CONSTITU TES THAT THE AO HAD REASON TO BELIEVE THAT THE INCOME HAD ESCAPED ASSES SMENT. THUS THE AO WAS WITHIN HIS REALM TO ASSUME JURISDICTION U/S 147 OF THE ACT. WHILE ARRIVING AT THIS FINDING WE HAVE DULY TAKEN COGNIZ ANCE OF THE CASE LAWS ON WHICH THE ASSESSEE PLACED RELIANCE. ITA NO.1127 TO 1129/B/08 PAGE 11 OF 29 9. FD OF RS.50 000/- 9.1 WE HAVE DULY PERUSED THE COPIES OF F.D. LEDGER S OF SKPB AND ALSO THE BANK STATEMENT OF THE ASSESSEE FOR THE RELEVANT PERIOD (P 1 2 AND 3 OF ADDITIONAL EVIDENCE U/S 29(4) OF I.T.RULES). A SUM OF RS.25500 WAS DEBITED FROM THE SB A/C NO.4291 DATED 27.12.01 VI DE CHEQUE NO.38773 AND TRANSFERRED TO F.D. LEDGER. LIKEWISE ON 26.3. 02 RS.25500/- WAS DEBITED FROM S.B.A/C AND TRANSFERRED THE SAME TO F. D. LEDGER. AS COULD BE SEEN FROM THE BANK STATEMENT THESE AMOUNTS HAVE BE EN TRANSFERRED OUT OF THE LOAN OBTAINED BY THE ASSESSEE FROM THE SAME BAN K (BL 404/3 & 405/3) THE F.DS WERE MADE OUT OF THE BANK LOANS OBTAINED B Y THE ASSESSEE WHICH HAVE BEEN DULY ACCOUNTED FOR IN THE RETURN OF INCOM E AS ADMITTED BY THE AO AND THUS THE ADDITION OF RS.50000/- MADE U/S 69 OF THE ACT STANDS DELETED. 10. S.B.ACCOUNT BANK BALANCE OF RS.2 00 804/- : 10.1 ON A CAREFUL PERUSAL OF THE BANK STATEMENT W E FIND THAT OUT OF THE BANK LOANS OBTAINED THE ASSESSEE WITHDREW THE LOAN AMOUNTS FOR THE CONSTRUCTION OF THE COMMERCIAL COMPLEX. HOWEVER T HE BANK BALANCE AS ON 31.3.2003 SHOULD HAVE BEEN REFLECTED IN THE BALA NCE SHEET OF THE ASSESSEE. LD. CIT(A) ALSO MADE A FINDING THAT THE A DDITION WAS NOT IN RESPECT OF GENUINENESS OF ANY LOAN BUT IN RESPECT OF AN ASSET NOT RECORDED IN THE BALANCE SHEET OF THE ASSESSEE. THIS VERY FA CT HAS NOT BEEN DISPUTED BY THE ASSESSEE. THE ADDITION TO THE TUNE OF RS.2 0 0 804/- CANNOT BE SUSTAINED MERELY BECAUSE IT IS NOT DISCLOSED IN THE BALANCE SHEET. THE SOURCE OF THE BALANCE AMOUNT IN THE BANK ACCOUNT IS FROM THE LOAN ITA NO.1127 TO 1129/B/08 PAGE 12 OF 29 OBTAINED. THE OMISSION ON THE PART OF THE ASSESSEE TO INCORPORATE THE BANK ACCOUNT IN THE ACCOUNTS OF THE ASSESSEE WILL NOT AM OUNT TO UNDISCLOSED INVESTMENT UNLESS AND UNTIL THERE EXIST AN UNDISCLO SED INVESTMENT SOURCE OF WHICH IS NOT EXPLAINABLE. IN THIS CASE THERE IS AN UNDISCLOSED LOAN LINKED TO AN UNDISCLOSED INVESTMENT. THEREFORE THE SOURCE OF INVESTMENT CAN BE DERIVED AS NOT RESULTING FROM ANY UNDISCLOSED INCOM E. IN SUCH CASE THE ADDITION OF RS. 2 00 804/- NEEDS TO BE DELETED. SINCE WE ARE NOT IN A POSITION TO EXAMINE THE FINANCIAL STATEMENTS BOOKS AND OTHER RELEVANT RECORDS WE FIND IT PROPER TO REMIT THIS IS SUE BACK TO THE FILES OF LD. A.O WITH DIRECTIONS TO PASS APPROPRIATE ORDE R ON MERITS AFTER EXAMINING ALL THE FACTS AND KEEPING IN VIEW OF OUR ABOVE SAID OBSERVATIONS. 11. GIFT FROM P.N.NAGARAJA SETTY OF MYSORE R S.1 LAKH : 11.1 IN RESPECT OF THE GIFT ALLEGED TO HAVE BEEN RE CEIVED FROM THE ASSESSEES FATHER-IN-LAW OF RS.1 LAKH ON 7.2.2002 T HROUGH A D.D. WE HAVE CAREFULLY CONSIDERED THE STATEMENT GIVEN BY P.N. RA JARAM GUPTA THE SON OF P.N. NAGARAJA SETTY. HE HAD AFFIRMED IN A CATEG ORICAL TERM THAT HIS FATHER WAS A PENSIONER AND IN RECEIPT OF RS.5000/MO NTH ONLY AS PENSION AND THAT NEITHER HE NOR HIS FATHER HAD GIVEN ANY GI FT TO THE ASSESSEE. THE ASSESSEE HAD STATED THAT HIS FATHER-IN-LAW OWNED TH REE RESIDENTIAL PROPERTIES AT MYSORE OUT OF WHICH HE WAS GETTING RENTS FROM TWO OF THE PROPERTIES. HOWEVER NO DOCUMENTARY EVIDENCE IS FO RTH-COMING TO SUGGEST THAT THE SAID NAGARAJA SETTY OWNED RESIDENTIAL PROP ERTIES OUT OF THE RENTS RECEIVED; HE HAD GIFTED RS.1 LAKH TO THE ASSESSEE. ON THE CONTRARY ACCORDING TO THE AO THE BANK STATEMENT FOR THE PER IOD FROM 1.4.2001 TO ITA NO.1127 TO 1129/B/08 PAGE 13 OF 29 31.3.2002 THE AVERAGE BANK BALANCE OF NAGARAJA SET TY WAS LESS THAN PALTRY RS.6000/-. SIGNIFICANTLY CASH OF RS.1 00 2 00/- WAS DEPOSITED IN THE S.B. ACCOUNT OF NAGARAJA SETTY AT S.B.M. SIDDARTHA NAGAR BRANCH MYSORE ON 7.2.2002 AND ON THE SAME DAY DD FOR RS.1 LAKH W AS PURCHASED IN THE NAME OF THE ASSESSEE. RAJARAM GUPTA SON OF NAGARA JA SETTY WHO HAD PURCHASED THE DD FOR THE SAID AMOUNT DENIED IN HIS STATEMENT ON OATH FOR MAKING ANY GIFT TO THE ASSESSEE EITHER BY HIMSELF O R BY HIS DECEASED FATHER. 11.2 CONSIDERING THE SEQUENCE OF EVENTS WHICH WER E NARRATED ABOVE THERE IS HARDLY ANY CREDENCE TO THE ASSERTION OF TH E ASSESSEE. SINCE THE TRANSACTION RELATES TO THE AY UNDER DISPUTE THE AD DITION MADE ON THIS COUNT IS ACCORDINGLY CONFIRMED. 12. LOAN FROM SMT.LAXMI BABU W/O THE ASSESSEE RS.1.5 LAKHS : 12.1 DURING THE YEAR UNDER DISPUTE THERE WAS A CR EDIT BALANCE OF RS.1.5 LAKH IN THE NAME OF THE ASSESSEES WIFE. THOUGH S MT. LAXMI BABU AN INCOME-TAX ASSESSEE WHO HAS BEEN SHOWING INCOME UN DER THE HEAD TAILORING ON ESTIMATED BASIS FROM THE AY 99-00 N O REGULAR BOOKS OF ACCOUNT WERE MAINTAINED. SHE HAD PERHAPS JOTTED DOWN THE RECEIPT OF INCOME EARNED FROM TAILORING CONDUCTING CLASSES ON TAILORING AND RANGOLI IN A DIARY. SHE PURPORTED TO HAVE EARNED FROM THESE ACTIVITIES RS.1 49 220/- FROM 28.5.00 TO 15.3.03. SHE HAD ADMITTED ON OATH THAT SHE HAD LENT ONLY RS.50000/- DURING THE AY UNDER DISPUTE WHEREAS THE ASSESSEE HAD ACCOUNTED FOR RS.1.5 LAKH. THIS MATERIAL DIFFERENC E HAS NEITHER BEEN RECONCILED NOR PROVED WITH ANY DOCUMENTARY EVIDENCE TO THE CONTRARY. ITA NO.1127 TO 1129/B/08 PAGE 14 OF 29 12.2 OF COURSE ARKALGUD A RURAL TOWN IN HASSAN DISTRICT WHERE SHE HAD PURPORTED TO HAVE CONDUCTED COACHING CLASSES FOR TA ILORING RANGOLI ETC. FOR WHICH SHE EARNED SO MUCH OF MONEY IS PUT IT GENTL Y A TALL CLAIM. 12.3 WE HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE LD. A R. IT HAS NOT BEEN PROPERLY EXPLAINED WITH DOCUMENTARY EVIDEN CE THAT WHERE DID SHE KEEP THE ACCUMULATED MONEY EARNED FROM THE SO CALLE D TAILORING BUSINESS AS SHE HAD NO BANK ACCOUNT. THERE WERE ALSO CONTRA DICTIONS IN THE ASSERTION OF THE ASSESSEE AND THE LENDER WITH REGAR D TO THE QUANTUM OF AMOUNTS PURPORTED TO HAVE BEEN ADVANCED AND RECEIVE D BY THE ASSESSEE WHICH LED TO A CONCLUSION THAT THE ENTIRE ARRANGEME NT WAS NOT BACKED WITH ANY CONCLUSIVE PROOF. NO CIRCUMSTANTIAL EVIDENCE W AS ADDUCED TO THE BUSINESS ACTIVITIES OF SMT.LAXMI BABU EXCEPT A FEW JOTTINGS IN A DIARY WHICH CANNOT BE A STRONG EVIDENCE TO CLINCH THE ISSUE IN FAVOUR OF THE ASSESSEE IN ANY WAY. 12.4 IN AN OVERALL CONSIDERATION OF THE ISSUE AS D ISCUSSED SUPRA WE ARE INCLINED TO AGREE WITH THE FINDING OF THE LD. CIT ( A). IT IS ORDERED ACCORDINGLY. 13. CREDITOR - A. R.NAGENDRA RS.50 000 : 13.1 THE ASSESSEE HIMSELF OFFERED THE SAID AMOUN T FOR TAXATION FOR THE AY 2004-05 GOES TO PROVE THE FUTILE EXERCISE OF THE ASSESSEE TO CLAIM THAT HE HAD RECEIVED RS.50 000/- FROM THE SAID PERSON. THE LD. A RS CONTENTION THAT THE AMOUNT IN QUESTION WAS RECEIVED BY WAY OF DD AND CREDITED TO THE O.D.ACCOUNT OF THE ASSESSEE MAINTAI NED IN SBM ALONE WILL NOT SUFFICE THE GENUINENESS OF SUCH CREDIT. NO DOU BT THE AMOUNT IN ITA NO.1127 TO 1129/B/08 PAGE 15 OF 29 QUESTION WAS RECEIVED BY MEANS OF A DD. HOWEVER T HE ASSESSEE DID NOT COME UP WITH A CLINCHING EVIDENCE TO PROVE THAT THE AMOUNT WAS IN FACT ORIGINATED FROM NAGENDRA. THE ASSESSEES ARGUMENT THAT SINCE THE LOAN WAS BY MEANS OF A DD AND THEREFORE THE GENUINENES S OF SUCH LOAN IS ABOVE THE BOARD TO VIEW IT MILDLY DOESNT CARRY ANY CONVICTION. IN VIEW OF THE ABOVE WE ARE IN TOTAL AGREEMENT WIT H THE CIT (A)S FINDING. 14. TRADE CREDITS RS.85 115/ -: 14.1 WITH REGARD TO THE ADDITION OF RS.85 115/- TH E LD. A.RS CRYPTIC SUBMISSION WAS THAT THE IMPUGNED CREDITS WERE NOT C ASH CREDITS WHEREAS THEY WERE AGRICULTURAL CREDITS AND THE ASSESSEE HAS BEEN CONSISTENTLY FOLLOWING THE PRACTICE OF RECORDING THE CREDIT SUPP LY WHICH WAS OUTSTANDING ONLY AT THE RATE OF 7% OF TOTAL CREDIT PURCHASE AND THUS IT WAS PLEADED THE GENUINENESS OF TRADE CREDITS CANNOT BE PUT UNDER S CANNER. 14.2 NO DOUBT THE ASSESSEE MUST HAVE PROCURED THE PRODUCES FROM THE NEARBY VILLAGES. HAD THERE BEEN PURCHASE OF A NEGL IGIBLE QUANTITY FROM THE SO CALLED VILLAGERS ONCE IN A WHILE WE COULD HAVE ACCEPTED THE THEORY OF THE ASSESSEE WITHOUT INKLING? HOWEVER THE ASSESS EE - BEING A WHOLE- SALE DEALER IN RAGI MAIZE ETC. AS ADMITTED BY HIM HAS BEEN REGULARLY TRADING WITH THOSE FARMERS FOR BULK PURCHASES. WHA T HAS BEEN COMING IN THE WAY IN NOT PROVIDING/DISCLOSING THE NAMES AND A DDRESSES OF SUCH CREDITORS TO ASCERTAIN THE AUTHENTICITY OF THE ASSE SSEES CLAIM IS RATHER INTRIGUING? 14.3 ADMITTEDLY THE LD. A R PLEADED HIS INABIL ITY BEFORE THE LD. CIT (A) IN PRODUCING THE CREDITORS FOR VERIFICATION. EVEN THE NAMES AND ADDRESSES ITA NO.1127 TO 1129/B/08 PAGE 16 OF 29 OF THE SO CALLED CREDITORS HAVE NOT BEEN DISCLOSED EVEN AT THIS STAGE. THUS ONE COULD SAFELY ASSUME THAT THE ASSESSEE HAD NOT D ISCHARGED THE ONUS CAST UPON HIM BY NOT DISCLOSING THE NAMES AND ADDRE SSES OF THE ALLEGED TRADE CREDITORS. 14.4 IN SUCH A SITUATION WE HAVE BEEN LEFT WITH NO ALTERNATIVE EXCEPT TO UPHOLD THE STAND OF THE LD. CIT (A). II. A.Y 2003-04 : 15. CONDITION PRECEDENT FOR REOPENING OF THE ASSE SSMENT BEING ABSENT : 15.1 THE CONTENTION OF THE LD. AR WAS THAT THE REC ORDED REASON WAS WITHOUT APPLICATION OF MIND AND CONTRARY TO THE FAC TS OF THE CASE AND THUS THE ORDER OF THE AO WAS BAD IN LAW. 15.2 THE REASONING OF THE AO IN REOPENING THE ASSE SSMENT WAS THAT WHILE COMPLETING THE ASSESSMENT FOR THE AY 2004-05 IT HAD COME TO HIS KNOWLEDGE THAT THE ASSESSEE RECEIVED CERTAIN AMOUNT AS RENT ADVANCE BY WAY OF CHEQUES DURING THE AY UNDER DISPUTE WHICH HA VE NOT BEEN REFLECTED IN HIS BALANCE SHEET ACCOMPANIED THE RETURN OF INCO ME. TO VERIFY THE ISSUE IN DETAIL AS TO WHETHER SUCH INCOME WAS ESCAPED ASS ESSMENT HE RESORTED TO REOPEN THE ASSESSMENT BY ISSUANCE OF NOTICE U/S 148 OF THE ACT. 15.3 THOUGH THE ASSESSEE WAS IN RECEIPT OF SHOP RE NT ADVANCES BY WAY OF CHEQUES THE SAME WERE NOT REFLECTED IN HIS BALA NCE SHEET FOR THE SAME FY. THUS THE AO HAD REASONED THAT THE INCOME HAD ESCAPED ASSESSMENT ITA NO.1127 TO 1129/B/08 PAGE 17 OF 29 WHICH WAS THE GROUND ON WHICH HE PROPOSED TO REOPEN THE ASSESSMENT BY ISSUANCE OF NOTICE U/S 148 OF THE ACT. THUS IN OUR UNANIMOUS VIEW THE AO WAS FULLY JUSTI FIED IN HIS STAND WHICH REQUIRES TO BE UPHELD. IT IS ORDERED ACCORDINGLY. 16. LOAN FROM SMT.LAXMI BABU W/O THE ASSESSEE RS.1 L AKH : 16.1 AN IDENTICAL ISSUE HAS BEEN DELIBERATED UPON IN DETAIL FOR THE AY 2002-03 SUPRA. FOR THE REASONS SET-OUT THEREIN WE UPHOLD THE ACTION OF THE AUTHORITIES BELOW ON THIS COUNT. IN A NUT-SHEL L THE ADDITION OF RS.1 LAKH IS UPHELD. 17 GIFT FROM P.N.NAGARAJA SETTY OF MYSORE RS.1.5 LAK HS : 17.1 A SIMILAR ISSUE HAD CROPPED UP FOR ADJUDICATI ON IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR. AS THE ISSUE WAS IDENTI CAL EXCEPT THE GIFT AMOUNT THE REASONS SET-OUT FOR THE AY 2002-03 HOLD S GOOD FOR THIS AY TOO. IT IS ORDERED ACCORDINGLY. 18. LOAN FROM SMT. SAVITHA RS.1 LAKH : 18.1 SHE HAD ADMITTED BEFORE THE AO THAT SHE HAD ADVANCED RS.1 LAKH TO THE ASSESSEE. ON BEING QUERIED AS TO THE SOURCE F OR LENDING LOAN SHE HAD FURNISHED A RETURN OF INCOME FOR THE AY 03-04 ADMI TTING RECEIPT OF RS.75 000/- FROM TAILORING BUT NEITHER FURNISHED ANY DETAILS OF BUSINESS OR STATEMENT OF AFFAIRS CAPITAL ACCOUNT BALANCE SHEE T - TO NAME A FEW. IN THE MEANWHILE THE ASSESSEE CAME UP WITH A LETTER D T. 23.8.2006 ADMITTING THAT THE MONEY SHOWN IN THE NAME OF SMT. SAVITHA WA S THAT OF HIS OWN MONEY AND OFFERED THE SAME FOR TAXATION FOR THE AY 2004-05. ITA NO.1127 TO 1129/B/08 PAGE 18 OF 29 18.2 BEFORE US THE LD. A R IN HIS WRITTEN SUBMI SSION DT: 3.2.2010 (PAGES 7 8 OF PB) PLEADED THAT IF THE ADDITION WERE TO BE SUSTAINED FOR THE AY UNDER CHALLENGE AN EQUAL AMOUNT OFFERED AS INCOME OF THE ASSESSEE FOR THE AY 2004-05 REQUIRES TO BE ORDERED TO BE DELETED . 18.3 TURNING TO THE ISSUE ON HAND AS RIGHTLY PO INTED OUT BY THE LD. CIT (A) THOUGH THE SAID LOAN HAS BEEN OFFERED FOR TAXA TION BY THE ASSESSEE FOR THE AY 04-05 THE LIABILITY WAS FOR THE AY UNDER DI SPUTE THE ADDITION MADE FOR THE AY 03-04 AS THE LOAN WAS NON-GENUINE THE A DDITION IS ACCORDINGLY CONFIRMED. 19. ADDITION OF RS.2.5 LAKHS MADANLAL TENANT: 19.1 THE ASSESSEE WAS IN RECEIPT OF RS.2.5 LAKHS B EING SHOP RENT ADVANCE FROM MADANLAL WHICH WAS NOT ADMITTED BY THE ASSESSEE DURING THE COURSE OF HIS STATEMENT RECORDED ON OATH. OUT OF R S.2.5 LAKHS THE ASSESSEE HAD ENCASHED TWO CHEQUES OF RS.50 000/EACH TENDERED BY MADANLAL WHICH WERE ALSO NOT ACCOUNTED FOR BY THE A SSESSEE IN HIS BOOKS OF ACCOUNT. THUS THE AO HAD ADDED THE ENTIRE SUM OF RS.2.5 LAKHS AS UNPROVED CREDIT. 19.2 ON ANALYZING THE ISSUE IT EMERGES THAT THE TENANT HAD ISSUED TWO CHEQUES OF RS.50 000/EACH WHICH WERE DULY ENCASHED BY THE ASSESSEE BUT NOT FINDING A PLACE EITHER IN HIS BOOKS OF ACC OUNT/BALANCE SHEET OF THE ASSESSEE OR THE TENANT AS WELL. BUT IT WAS A FACT THAT THE CHEQUES IN QUESTION WERE ISSUED BY THE TENANT MADANLAL AND GOT ENCASHED BY THE ASSESSEE WHICH HAS NOT BEEN DISPUTED BY THE AO EITH ER. AS RIGHTLY ITA NO.1127 TO 1129/B/08 PAGE 19 OF 29 HIGHLIGHTED BY THE LD. CIT (A) THE ORIGIN OF THE F LOW OF SAID AMOUNTS HAVE SINCE BEEN EXPLAINED AND ESTABLISHED ADDITION U/S 69 OF THE ACT CANNOT BE RESORTED TO. 19.3 TURNING TO THE SUM OF RS.1.5 LAKHS THE ASS ESSEE HAD IN HIS LETTER DATED: 17.8.2006 ADMITTED BEFORE THE AO THAT RS.1 5 0 000/- IN CASH BEING ADVANCE RENT RECEIVED FROM MADANLAL WHICH WAS CONFI RMED BY THE TENANT. THE MOOT QUESTION BEFORE US IS THAT THE SAID AMOUNT WAS NOT RECORDED IN THE CASH BOOK HOWEVER FINDING A PLACE IN HIS BALA NCE SHEET. THE AOS ASSERTION THAT CONSEQUENT ON THE SURVEY THE RETURN OF INCOME WAS FURNISHED ON 31.3.04 WHEREIN THE BALANCE SHEET CONT AINING A CASH DEPOSIT OF RS.1.5 LAKHS IN THE NAME MADANLAL [STRANGELY THE VERY FACT WAS NOT REVEALED DURING THE SURVEY PROCEEDINGS] CANNOT BE B RUSHED ASIDE. 19.4 IN AN OVERALL CONSIDERATION OF THE CONTENTION OF THE LD. A R PERUSAL OF THE RELEVANT RECORDS AND ALSO THE FINDIN G OF THE LD. CIT (A) WE ARE OF THE FIRM VIEW THAT THE ASSETS WERE UNDOUBTED LY UNDERSTATED TO THE TUNE OF RS.1.5 LAKHS IN THE BALANCE SHEET OF THE AS SESSEE. IT MAY NOT BE OUT OF PLACE TO REPRODUCE THE OBSERVATIONS OF THE L D. CIT (A) THAT IN OTHER WORDS SINCE THE SUM OF RS.1 50 000/- IS RECEIVED BY THE APPELLANT BUT NOT RECORDED IN THE CASH BOOK IF T HE ACCOUNTS ARE CORRECTED IT WILL LEAD TO A BALANCE SHEET DIFFEREN CE OF RS.1 50 000/- REPRESENTED BY CASH OF RS.1 50 000/ NOT TAKEN AS AS SET IN THE BALANCE SHEET (THE CORRESPONDING LIABILITY OF RS.1 50 000/- IS ALREADY TAKEN). IN VIEW OF THE ABOVE FINDING WE ARE INCLINED TO AG REE WITH THE STAND OF THE LD. CIT (A) AND THUS NO INTERFERENCE IS CALLED F OR. ITA NO.1127 TO 1129/B/08 PAGE 20 OF 29 20. RS.1 00 000/- RECEIVED FROM SANTHOSH BABU: 20.1 THE ISSUE IN BRIEF WAS THAT THE ASSESSEE RE CEIVED RENT RECEIPT OF RS.1 LAKH FROM SANTHOSH BABU THROUGH CHEQUE DATED: 25.12.02 WHICH WAS ENCASHED ON 27.12.2002. THIS WAS CONFIRMED BY THE TENANT BY PRODUCING XEROX COPIES OF BANK ACCOUNT LEDGER EXTRACT ETC. HOWEVER THE ASSESSEE HAD ACCOUNTED FOR THE SAID AMOUNT IN HIS BOOKS OF A CCOUNT ON 1.8.2002 BEING DRAWN AND SPENT FOR CONSTRUCTION OF COMMERCIA L COMPLEX ON THE SAME DAY. HOWEVER WITH REGARD TO THE ENCASHMENT O F CHEQUE ON 27.12.02 NO ENTRY WAS MADE IN THE CASH BOOK OF THE ASSESSEE. THE CONCLUSION OF THE AO WAS THAT THE DEPOSIT OF RS.1 L AKH IN THE NAME OF SANTHOSH BABU ON 1.8.02 WAS THE OWN MONEY OF THE AS SESSEE AND THUS ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE AFTER DUE CONSIDERATION OF THE ASSESSEES EXPLANATION THAT HE HAD RECEIVED AN OPEN CHEQUE FROM SANTHOSH BABU AND GOT ENCASHED DIRECTLY FROM THE CH EQUE ISSUING BANK ON 28.12.02 [ ACTUALLY IT WAS ENCASHED ON 27.12.02 ] BUT OVERSIGHT MY ACCOUNTANT HAS TAKEN INTO ACCOUNT ON RENT AGREEMENT COMMENCEMENT DATE 1/8/02. EVEN THOUGH THE AMOUNT TAKEN INTO ACCOUNT ON DIFFERENT DATES BOTH DATES ARE COME UNDER SAME F.Y. 20.2 BEFORE US IT WAS SUBMITTED THAT IN FACT TH E ASSESSEE ENCASHED THE BEARER CHEQUE OF SANTHOSH BABU ON 1.8.02 AND CAUSED JOURNAL ENTRY IN HIS BOOKS. ON A LATER DATE THE TENANT HAD NOT ACCOUNT ED FOR THE SAME ON 1.8.02 HE SOUGHT FOR ENDORSEMENT OF ANOTHER BEARER CHEQUE FOR WHICH THE ITA NO.1127 TO 1129/B/08 PAGE 21 OF 29 ASSESSEE OBLIGED THE TENANT AND THE SAME WAS ENCASH ED BY THE TENANT UNDER THE ASSESSEES SIGNATURE. 20.3 WE HAVE DULY CONSIDERED THE SUBMISSION AND PE RUSED THE RELEVANT RECORDS. THE ASSESSEES THEORY THAT THE TENANT HAD NOT ACCOUNTED FOR THE CHEQUE PURPORTED TO HAVE BEEN ISSUED ON 1.8.02 AND TO ACCOMMODATE THE TENANT THE ASSESSEE HAD OBLIGED THE TENANT TO ENCA SH THE CHEQUE DATED: 25.12.02 UNDER HIS SIGNATURE (ENDORSEMENT) WAS NOTH ING BUT MAKE BELIEF STORY. HAD THERE BEEN SUCH A SITUATION THE TENANT COULD HAVE ADMITTED THE SAME BEFORE THE AO WHEN HE HAD PRODUCED THE XEROX C OPIES OF HIS BANK ACCOUNT AND LEDGER EXTRACT WHEREBY HE COULD HAVE S AVED THE ASSESSEE FROM THIS SORDID AFFAIR? THIS BEING SO WE ARE INC LINED TO AGREE WITH THE OBSERVATIONS OF THE LD. CIT (A) THAT 6THE MONEY WAS ACTUALLY RECEIVED ON 27.12.2 007 (SIC) 27.12.2002 FROM SANTHOSH BABU. WHAT IS MATERIAL IN THE PRESENT CASE IS WHETHER THE APPELLANT HAD ANY SOURCE OF INCOME O THER THAN THE EXPLANATION GIVEN REGARDING RECEIPT OF MONEY ON 1.8 .02 FROM SANTHOSH BABU (AN EXPLANATION WHICH IS ADMITTED BY THE APPEL LANT TO BE INCORRECT AS THE MONEY WAS RECEIVED SUBSEQUENTLY). SINCE NO OTHER SOURCE OF THE SUM OF RS.1 LAKH SPENT ON 1.8.02 IS E XPLAINED THERE IS AN APPARENT CASH SHORT FALL OF RS.1 LAKH ON 1.8.02 AND THEREFORE ADDITION MADE BY THE AO IS CONFIRMED. CONSIDERING THE TOTALITY OF THE FACTS OF THE ISSUE THE AO WAS JUSTIFIED IN ADDING RS.1 LAKH TO THE TOTAL INCOME OF THE ASSESSE E. 21. TRADE CREDITORS RS.65 420/-: 21.1 A SIMILAR ISSUE WAS CONSIDERED FOR THE AY 200 2-03 WHEREIN WE HAVE SUSTAINED THE ADDITION FOR THE REASONS RECORDE D THEREIN. WE ARE THEREFORE OF THE VIEW THAT THE FINDING FOR THE AY 2002-03 REFERRED SUPRA ITA NO.1127 TO 1129/B/08 PAGE 22 OF 29 HOLDS GOOD FOR THIS AY TOO AS THE ISSUE IS IDENTICA L TO THAT OF THE IMMEDIATELY PRECEDING AY. IT IS ORDERED ACCORDINGL Y. 22. ADDITION OF RS.600/-: 22.1 THIS GROUND IS NOT ONLY MAINTAINABLE BUT RA THER OBSOLETE SINCE THE LD. CIT (A) HIMSELF HAD DELETED THE ADDITION. III. A.Y 2004-05 : 23. THE ONLY GROUND SURVIVED FOR ADJUDICATION IS T HAT THE CIT (A) OUGHT TO HAVE DELETED THE RENT ADVANCE OF RS.3.10 LAKHS WHIC H WERE RECEIVED ON THREE DIFFERENT DATES THROUGH CHEQUES. 23.1 BRIEFLY STATED THE ASSESSEE HAD SAID TO HAV E RECEIVED RS.3.10 LAKHS FROM BHAWAR SINGH AS RENT ADVANCE ON 19.9.02 20.9. 02 AND AGAIN ON 3.2.03 OF RS.1 LAKH RS.1 LAKH AND RS.1.10 LAKH RES PECTIVELY THROUGH CHEQUES WHICH WERE DEPOSITED IN HIS S.B. ACCOUNT MA INTAINED WITH SKPB. THESE AMOUNTS HAVE NOT BEEN ACCOUNTED FOR IN HIS BO OKS OF ACCOUNT FOR THE YEAR-ENDED 31.3.03 BUT WERE ACCOUNTED FOR IN HIS CASH BOOK ON 15.4.2003. ENTRIES IN THE PASS BOOK OF THE ASSESSEE WERE NOT F INDING A PLACE EITHER IN THE CASH BOOK OR IN THE BALANCE SHE ET FOR THE YEAR-ENDED 31.3.03. ON BEING QUERIED THE ASSESSEES REPLY WA S THAT THE ACCOUNT PAYEE CHEQUES WERE GOT ENCASHED THROUGH SKPB AND UT ILIZED FOR BUILDING LOAN BUT OVERSIGHT NOT ACCOUNTED FOR THE AY 03-04 . ON VERIFICATION THE AO FOUND THAT THE ENTIRE CASH WAS ACCOUNTED FOR ON 15.4.03 AND WITHDREW ON THE SAME DAY FOR THE CONSTRUCTION OF THE BUILDIN G AND NOT ON THE DATE OF AGREEMENT I.E. 15.7.03 AS ALLEGED BY THE ASSESSEE. ON EXAMINATION OF THE RENTAL AGREEMENT DATED: 15.7.03 THE AO FOUND THAT THERE WAS NO ITA NO.1127 TO 1129/B/08 PAGE 23 OF 29 MENTIONING OF THE CHEQUE AMOUNTS BUT THE ASSESSEE SAYS HE WAS IN RECEIPT OF ADDITIONAL AMOUNT OF RS.3.10 LAKHS ON 15 .4.03 BY CASH AND ACCOUNTED FOR BY THE ASSESSEE AS PER RENTAL AGREEME NT AND UTILIZED FOR CONSTRUCTION ON THE SAME DAY AS PER HIS BOOKS OF AC COUNT. BHAWAR SINGH THE TENANT HAD CATEGORICALLY AFFIRMED THAT HE HAD NOT PAID ANY AMOUNT AS PER RENTAL AGREEMENT. DUE CONSIDERATION OF THE ASS ESSEES EXPLANATIONS ON TWO COUNTS AND ALSO THE TENANTS VERSION THE CO NCLUSION OF THE AO WAS THAT (I) THE ASSESSEE HAD INTRODUCED HIS OWN MONEY ON 15.4.2 003 IN THE NAME OF THE TENANT AND WITHDREW THE SAME ON THE SAME DAY AND SHOWN AS EXPENDITURE FOR CONSTRUCTION OF THE CO MMERCIAL COMPLEX; (II) THE TENANT IN HIS BOOKS OF ACCOUNT HAD ACCOUNTED FO R THE SAID AMOUNTS FOR THE YEAR-ENDED 31.3.2003; - COPIES OF ASSESSEES LEDGER ACCOUNT IN THE BOOKS OF THE TENANT AND RELEVANT BANK ACCOUNT REVEAL THAT THE ASSESSEE RECEIVED THE CHEQUES AMOUNTING TO RS.3.1 LAKHS DEPOSITED AND WITHDREW THE AMOUNTS DURING TH E RELEVANT AY I.E YEAR-ENDED 31.3.2003; - THE TENANT IN HIS RETURN OF INCOME FOR THE AY 2003- 04 HAD ACCOUNTED FOR ONLY RS.3.1 LAKHS FOR THE RELEVAN T AY; (III) THE BOOKS OF ACCOUNT AND BANK ACCOUNT OF THE ASSESS EE THERE WERE NO DRAWINGS FROM THE BANK FOR INVESTMENT ON 15 .4.2003; (IV) THE ASSESSEES EXPLANATION DATED 23.8.06 AND 17.10 .2006 WITH REGARD TO RECEIPT OF RS.3.1 LAKHS FROM BHAWAR SINGH WERE CONTRADICTORY TO EACH OTHER; (V) THE TENANT HAD CATEGORICALLY DENIED FOR HAVING MADE ANY CASH PAYMENT ON 15.4.03 NO RELIANCE WORTH THE NAME CAN BE PLACED ON THE RENTAL AGREEMENT. 23.2 ON HIS PART THE LD. CIT (A) AFTER ANALYZI NG THE ISSUE IN DEPTH HAS OBSERVED THUS ITA NO.1127 TO 1129/B/08 PAGE 24 OF 29 7..IN THE WRITTEN SUBMISSIONS THE APPELLANT IS RELYING ON THE LEASE AGREEMENT. THERE IS ACTUALLY NO DISPUTE REGARDING FACTS. THE APPELLANT AGREES THAT A SUM OF RS.3 10 000/- WAS RE CEIVED FROM SRI BHAWAR SINGH NOT IN CASH BUT BY CHEQUE AND ALSO THA T IT WAS RECEIVED IN THE FY 2002-03 AND NOT ON 15.4.2003. THE QUESTI ON IS WHETHER HIS EXPLANATION THAT THE CASH INTRODUCED ON 15.4.2003 I N HIS BOOKS WAS THE CASH ARISING OUT OF ENCASHED CHEQUES IS SATISFACTOR Y OR NOT. ON ANY REASONABLE VIEW OF THE MATTER IT CAN NOT BE ACCEPT ED THAT THE APPELLANT WAS KEEPING THE ENCASHED AMOUNT WITH HIM AND SUDDEN LY INTRODUCED IT ON 15.4.2003. THE CASH INTRODUCED ON 15.4.2003 HAS NOT BEEN RELATED TO THE CHEQUES RECEIVED FROM SRI BHAWAR SINGH EXCEP T FOR THE FIRST THAT THE AMOUNT INVOLVED IS THE SAME. FURTHER AN IMPOR TANT POINT WHICH NEEDS TO BE NOTED IS THAT THE BANK ACCOUNT IN WHICH THE CHEQUES RECEIVED FROM SRI BHAWAR SING WERE DEPOSITED WAS NO T DISCLOSED IN THE BALANCE SHEET AND RETURN OF INCOME. THE APPELLANT HAS NO OTHER EXPLANATION OF THE INTRODUCED CASH OF RS.3 10 000/- . UNDER THE CIRCUMSTANCES THE ADDITION MADE BY THE AO IS CONFI RMED. 23.3 BEFORE US THE SUBMISSION MADE ON BEHALF OF THE ASSESSEE IS SUMMARIZED AS UNDER: (I) WHEN THE IMPUGNED AMOUNTS WERE RECEIVED BY CHEQUE F ROM AN IDENTIFIED PERSON WITH A SOURCE IN A PARTICULAR YEA R THEN THE SAID AMOUNT/S STAND EXPLAINED; (II) RELIES ON THE FINDING OF THE DELHI TRIBUNAL IN ITO V. RAKESH SINGH REPORTED IN (1998) 60 TTJ 674; (III) AS PER S.44AA THE ASSESSEE SHALL MAINTAIN BOOKS OF ACCOUNT IN RESPECT OF HIS AFFAIRS OF HIS BUSINESS AND NOT NECE SSARILY IN RESPECT OF HIS AFFAIRS OTHERWISE VIZ. INVESTMENT IN CONST RUCTION OF COMPLEX WHICH IS NOT HIS BUSINESS. HOWEVER THE AS SESSEE RECORDED THE SAID AMOUNT RELATING TO THE INVESTMENT IN CONSTRUCTION IN HIS BOOKS BY WAY OF JOURNAL ENTRY I N THE CURRENT YEAR. - THE TENANTS ACCOUNT WAS CREDITED WITH THE INVESTME NT IN CONSTRUCTION NAMELY BUILDING ACCOUNT OWING TO WHI CH THERE WAS NO CASH BEING INTRODUCED; - RELIES ON THE CASE LAW IN VIRENDRA KUMAR AGARWAL V. ITO (2004) 3 SOT 843 (JAB) ITA NO.1127 TO 1129/B/08 PAGE 25 OF 29 23.4 ON THE OTHER HAND THE LD. D R SUBMITTED TH AT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE CAME UP WITH A RENT AGREEMENT WITH BHAWAR SINGH AS PER WHICH THE ASSESSEE WAS S UPPOSED TO HAVE RECEIVED CASH OF RS.3.10 LAKHS ON 15.4.03 AS ADVANC E. HOWEVER THE TENANT HAD VEHEMENTLY DENIED FOR HAVING MADE ANY PA YMENT EITHER IN CASH OR BY CHEQUE TO THE ASSESSEE ON 15.4.03. THE PAYMEN T WAS IN FACT MADE THROUGH CHEQUES WHICH HAVE BEEN DULY ENCASHED AS A DMITTED BY THE ASSESSEE DURING THE FY 02-03 BUT STRANGELY THESE AMOUNTS WERE NOT ACCOUNTED FOR IN THE ASSESSEES BOOKS OF ACCOUNT. THE ASSESSEES THEORY THAT HE HAD ENCASHED THE CHEQUES IN THE PREVIOUS YE AR AND HAD KEPT THE CASH WITH HIM AND SUBSEQUENTLY INTRODUCED IN THE BO OKS ON 15.4.03 WAS LACKING CONVICTION AND THEREFORE PLEADED THAT THE STAND OF THE AUTHORITIES BELOW REQUIRES TO BE SUSTAINED. 23.5 WE HAVE DULY CONSIDERED THE RIVAL SUBMISSI ONS CAREFULLY PERUSED THE RELEVANT RECORDS AND ALSO THE DOCUMENTARY EVIDE NCES PRODUCED BY EITHER PARTY TO DRIVE HOME THEIR RESPECTIVE STAND. 23.6 THE ASSESSEE HIMSELF ADMITTED THAT HE HAD IN FACT RECEIVED THREE CHEQUES ON DIFFERENT DATES AMOUNTING TO RS.3.1 LAK HS FROM BHAWAR SINGH TENANT AS RENT ADVANCE AND GOT ENCASHED DURING THE FY 2002-03 HOWEVER NOT ACCOUNTED FOR THE SAME FOR THE YEAR-ENDED 31.3. 2003 AND THE ENTIRE CASH HAS BEEN ACCOUNTED FOR ON 15.4.2003 WHICH WAS SUBSEQUENTLY WITHDRAWN FOR MEETING THE CONSTRUCTION OF THE COMPL EX. RELYING ON THE RENTAL AGREEMENT DATED 15.7.2003 THE ASSESSEES SU BMISSION WAS THAT HE HAD RECEIVED AN ADDITIONAL AMOUNT OF RS.3.10 LAKHS ON 15.4.03 BY CASH ITA NO.1127 TO 1129/B/08 PAGE 26 OF 29 FROM THE TENANT WHICH HAS BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS ETC. HOWEVER THE TENANT HAD VOUCHED THAT HE HA D NOT PAID ANY AMOUNT AS PER RENTAL AGREEMENT EXCEPT THREE ACCOUNT PAYEE CHEQUES WHICH WERE PAID DURING THE FY 2002-03. THE VERY FACT HAS BEEN REFLECTED IN THE ASSESSEES LEDGER ACCOUNT IN THE BOOKS OF THE TENAN T FOR THE YEAR-ENDED 31.3.2003 AND ALSO THE RELEVANT BANK ACCOUNT. ON T HE ONE HAND THE ASSESSEE IN HIS REPLY [TO THE AOS QUERY] DT: 23.8. 06 ADMITTED FOR HAVING RECEIVED RS.3.1 LAKHS FROM THE TENANT ON DIFFERENT DATES OF 19.9.02 20.9.02 AND AGAIN ON 3.2.03 THROUGH ACCOUNT PAYEE CHEQUES A ND GOT ENCASHED BUT OVERSIGHT THE SAME WAS NOT ACCOUNTED FOR IN TH E CONCERNED YEAR AND THE SAID ADVANCE WAS ACCOUNTED ON AGREEMENT DATED: 25.7.03. ON THE SAME BREATH IN HIS REPLY DATED: 17.10.2006 [SOURCE : ON PAGE 7 OF THE ASST. ORDER] HE HAD ACKNOWLEDGED THAT I HAVE RECEIVED RS.3.10 LAKHS FROM SRI BHAWAR SINGH ONE OF MY TENANT(S) ON THREE DIFFERENT DATES THROUGH CHEQUES AND I HAVE ACCOUNTED THE SAME AS CASH ON 15/4/2003 . 23.7 THE ASSESSEE HIMSELF HAD CONTRADICTED HIS OWN VERSION. ON THE ONE HAND HE SAYS THAT HE HAD RECEIVED THE RENT-ADV ANCE IN CHEQUES GOT ENCASHED BUT BY OVERSIGHT NOT ACCOUNTED FOR IN TH E FY 2002-03 ITSELF AND ACCOUNTED FOR THE SAME AS CASH ON 15.4.2003 AND ON THE OTHER HAND HE ASSERTED THAT HE HAD RECEIVED AN ADDITIONAL AMOUNT OF RS.3.10 LAKHS ON 15.4.2003 AS PER THE RENTAL AGREEMENT DT.15.7.2003 WHICH HAS BEEN STOUTLY DENIED BY THE TENANT HIMSELF. TO CLEAR THE AIR OF SUSPICION THE TENANT HAD PRODUCED DOCUMENTARY EVIDENCE BEFORE THE AO IN THE FORM OF ASSESSEES LEDGER ACCOUNT IN HIS BOOKS FOR THE YEAR-ENDED 31.3 .2003 AND ALSO THE ITA NO.1127 TO 1129/B/08 PAGE 27 OF 29 RELEVANT BANK ACCOUNT. THE ASSESSEE HAD ADMITTED BEFORE THE LD. CIT(A) THAT A SUM OF RS.3 10 000/- WAS RECEIVED FROM SRI BHAWA R SINGH NOT IN CASH BUT BY CHEQUE AND ALSO THAT IT WAS RECEIVED IN THE FY 2002-03 AND NOT ON 15.4.2003. THE LD. CIT(A) HIMSELF POSED A QUESTION WHETHER HIS EXPLANATION THAT THE CASH INTRODUCED ON 15.4.2003 I N HIS BOOKS WAS THE CASH ARISING OUT OF ENCASHED CHEQUES IS SATISFACTORY OR NOT? AND FOUND OUT THE ANSWER HIMSELF THAT ON ANY REASONABLE VIEW OF THE MATTER IT CANNOT BE ACCEPTED THAT THE APPELLANT WAS KEEPING THE ENCASHE D AMOUNT WITH HIM AND SUDDENLY INTRODUCED IT ON 15.4.2003. 23.8 THE MOOT QUESTION LINGERING IN OUR MIND TOO IS WHETHER ANY PRUDENT BUSINESSMAN LIKE THE PRESENT ASSESSEE S HALL KEEP THE WHOPPING CASH OF RS.3.10 LAKHS BY ENCASHING THE CHEQUES DAT ED 19.9.02 20.9.02 AND 3.2.03 WITH HIM FOR SO LONG AND SUDDENLY WOKE UP F ROM THE SLUMBER TO INTRODUCE THE SAME ON 15.4.2003? IN OUR CONSIDERED VIEW THE ASSESSEES ASSERTION DOESNT CARRY EITHER ANY CONVICTION OR ME RIT. 23.9 WE HAVE CAREFULLY CONSIDERED THE LD.A RS S UBMISSION MADE DURING THE COURSE OF HEARING AND ALSO WITH RESPECTS DULY PERUSED THE CASE LAWS ON WHICH THE ASSESSEE HAS PLACED STRONG RELIAN CE. ON A CAREFUL PERUSAL WE FIND THAT THEY ARE DISTINGUISHABLE AND NOT DIRECTLY APPLICABLE TO THE ISSUE ON HAND. IT MAY NOT BE INAPPROPRIATE TO MENTION HERE AS RIGHTLY HIGHLIGHTED BY THE LD. CIT (A) THAT THE BANK ACCO UNT IN WHICH THE CHEQUES RECEIVED FROM THE TENANT DEPOSITED WAS NOT DISCLOS ED IN THE BALANCE SHEET AND THE RETURN OF INCOME OF THE ASSESSEE AS WELL. ITA NO.1127 TO 1129/B/08 PAGE 28 OF 29 23.10 IN A NUT-SHELL THE ASSESSEE HAS NOT COME UP WITH A CLINCHING DOCUMENTARY EVIDENCE OR EXPLANATION FOR HAVING INTR ODUCED THE CASH OF RS.3 10 000/- ON 15.4.2003. 23.11 IN AN OVERALL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE ISSUE AS DELIBERATED UPON IN THE FORE-GOING PARAGRA PHS WE ARE OF THE UNANIMOUS VIEW THAT THE STAND OF THE LD. CIT(A) IS FULLY JUSTIFIED WHICH REQUIRES NO INTERFERENCE AT THIS STAGE. IT IS ORDE RED ACCORDINGLY. 24. BEFORE PARTING WITH WE WOULD LIKE TO PO INT OUT THAT DURING THE COURSE OF HEARING THE LD. A R SUBMITTED THAT FOR T HE AYS 2002-03 AND 2003-04 THE AO HAD MADE ADDITIONS IN THE CASES OF - (I) A.R.NAGENDRA RS 50 000 (II) GIFT FROM P.N.NAGARAJA SETTY RS.1 50 000 (III) LOAN FROM SMT. SAVITHA RS.1 00 000 WHICH HAVE BEEN CONFIRMED BY THE LD.CIT (A). HOWEV ER THE ASSESSEE HAD OFFERED THESE AMOUNTS AS HIS INCOME FOR THE AY 2004 -05 AND THEREFORE PLEADED THAT IF THESE ADDITIONS WERE TO BE CONFIRME D BY THE BENCH THE AO BE DIRECTED TO DELETE THESE AMOUNTS OFFERED AS INCO ME OF THE ASSESSEE FOR THE AY 2004-05 OTHERWISE HIS APPREHENSION WAS THA T IT WOULD AMOUNT TO DOUBLE TAXATION. 24.1 WE ARE INCLINED TO AGREE WITH THE LD. A.R ON T HIS COUNT. WE HAVE SINCE CONFIRMED THE ABOVE ADDITIONS FOR THE REASONS SET-OUT THEREIN; THE AO IS DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE THA T WHETHER THESE AMOUNTS HAVE BEEN OFFERED FOR TAXATION FOR THE AY 2004-05 A S ASSESSEES INCOME AND IF SO THE SAME REQUIRE TO BE DELETED OTHERWISE IT WOULD ITA NO.1127 TO 1129/B/08 PAGE 29 OF 29 AMOUNT TO TAXING OF THE SAID AMOUNTS TWICE. THE AO SHALL THEREFORE VERIFY THE CONTENTION OF THE ASSESSEE AND ALSO THE MATERIAL FACTS AVAILABLE ON RECORD FOR THE AY 2004-05 AND TO TAKE APPROPRIAT E ACTION AS IT WARRANTS. IN THE MEANWHILE THE ASSESSEE IS ADVISED TO APPRO ACH THE AO WITH RELEVANT FACTS WHICH WOULD FACILITATE HIM TO CARRY OUT THE DIRECTIONS OF THIS BENCH CITED SUPRA. IT IS ORDERED ACCORDINGLY. 25. IN THE RESULT THE APPEALS FOR THE ASSESSMENT YEARS 2002-03 2003-04 AND 2004-05 ARE PARTLY ALLOWED FOR STATISTI CAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF APRIL 2010. SD/- SD/- (GEORGE GEORGE K. ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 30 TH APRIL 2010. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. C IT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE.