Shri S. Narasaraju, Bangalore v. DCIT, Bangalore

ITA 150/BANG/2009 | 2004-2005
Pronouncement Date: 16-04-2010 | Result: Allowed

Appeal Details

RSA Number 15021114 RSA 2009
Assessee PAN INING1105P
Bench Bangalore
Appeal Number ITA 150/BANG/2009
Duration Of Justice 1 year(s) 1 month(s) 19 day(s)
Appellant Shri S. Narasaraju, Bangalore
Respondent DCIT, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 16-04-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 16-04-2010
Date Of Final Hearing 30-03-2010
Next Hearing Date 30-03-2010
Assessment Year 2004-2005
Appeal Filed On 26-02-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K. JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY ACCOUNTANT MEMBER ITA NO.150/BANG/2009 ASSESSMENT YEAR : 2004-05 SRI S. NARASARAJU # 40 I PHASE J.P. NAGAR BANGALORE. : APPELLANT VS. THE DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 1(3) BANGALORE. : RESPONDENT APPELLANT BY : SHRI S. VENKATESAN C.A. RESPONDENT BY : SHRI JASON P. BOAZ CIT-I(DR) O R D E R PER A. MOHAN ALANKAMONY ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. CIT (A) IN ITA NO: 636/DCIT C C 1(3)/BLR/CIT (A)-VI /06-07 DATED: 12.12.2008 FOR THE AY 2004-05. 2. THE ASSESSEE HAS RAISED SIX GROUNDS OF APPEAL O UT OF WHICH GROUND NOS: 1 AND 6 BEING GENERAL AND NO SPECIFIC I SSUES INVOLVED THEY DO NOT SURVIVE FOR ADJUDICATION. IN THE REMAINING GRO UNDS THE CRUXES OF THE ITA NO.150/BANG/09 PAGE 2 OF 12 ISSUES RAISED ARE THREE FOLDS WHICH ARE REFORMULATE D IN A CONCISE MANNER AS UNDER: (I) THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN COMPLET ING THE ASSESSMENT U/S 144 OF THE ACT WHICH WERE NOT IN CO NFORMITY WITH THE PROVISIONS OF SAID SECTION AND THUS BAD IN LA W AND DESERVES TO BE ANNULLED; (II) THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN ESTIMAT ING THE INCOME AT RS.2.5 CRORES WITHOUT ANY BASIS AND THUS THE EST IMATION OF INCOME REQUIRES TO BE VACATED; - WITHOUT PREJUDICE WHILE COMPLETING THE ASSESSMENT THE AUTHORITIES BELOW OUGHT TO HAVE TAKEN COGNIZANCE OF THE PAST ASSESSMENTS OF INCOME AS PER RECORDS FOR THE ESTIMA TION OF INCOME FOR THE YEAR UNDER DISPUTE; & (III) THE ASSESSEE DENIES HIMSELF LIABLE TO BE CHARGED TO INTEREST U/S 234B AND 234C OF THE ACT. 3. THE BACK-DROP OF THE ISSUES IN BRIEF IS THA T THE ASSESSEE AN INDIVIDUAL BEING CHAIRMAN OF CHAIN OF EDUCATIONAL INSTITUTIONS OF OXFORD EDUCATIONAL SOCIETY [OES] FURNISHED HIS RETURN OF INCOME FOR THE AY UNDER DISPUTE ADMITTING A TOTAL INCOME OF RS.80000/- WHI CH WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY A NOTICE U/S 143( 2) WAS ISSUED ON 19.12.05 FOR WHICH THE ASSESSEE SOUGHT AN ADJOURN MENT. ANOTHER NOTICE U/S 142(1) DT: 10.8.2006 WAS ISSUED REQUIRING THE A SSESSEE TO FURNISH CERTAIN DETAILS. 3.1. AS THERE WAS A STEADY SILENCE EXCEPT SEEKING ADJOURNMENTS OCCASIONALLY ON THE PART OF THE ASSESSEE TO THE NOT ICES U/S 142(1) DATED: 25.8.06 7.9.06 19.9.06 8.11.06 27.11.06 AND FIN ALLY ON 15.12.06 THE AO RESORTED TO CONCLUDE THE ASSESSMENT U/S 144 OF THE ACT ON THE BASIS OF RELEVANT MATERIALS AVAILABLE ON RECORD. ITA NO.150/BANG/09 PAGE 3 OF 12 4. THE ASSESSEE WAS RUNNING SCORES OF EDUCATIONA L INSTITUTIONS IN THE GUISE OF OXFORD EDUCATION SOCIETY. THE AO HAD ESTI MATED THE TAXABLE INCOME OF THE ASSESSEE AT RS.2.5 CRORES FOR THE FOL LOWING REASONS: (I) FROM THE CONSTITUTION OF THE EDUCATION INSTITUTION THE DAY-TO-DAY ADMINISTRATION AND MAIN CONTROL WAS IN THE HANDS OF THE CHAIRMAN THAT THE TOTAL RECEIPTS OF DIFFERENT EDUC ATION INSTITUTIONS [ COLLECTING CAPITATION FEE IN THE GUISE OF DONATIO N/CONTRIBUTION AMOUNTING TO RS.6.5 CRORES] EXCEEDED RS.26 CRORES; (II) DURING THE COURSE OF SURVEY U/S 133A OF THE ACT IN THE PREMISES OF CHILDREN EDUCATION SOCIETY [CES] IN AUGUST 2006 I T WAS NOTICED THAT THE SOCIETY WAS NOT MAINTAINING REGULAR BOOKS OF ACCOUNTS NO PROPER MAINTENANCE OF THE DETAILS OF FEES AND DO NATIONS COLLECTED FROM 1.4.06 TILL THE DATE OF SURVEY; - THE IMPOUNDED APPLICATION FORMS FOR ADMISSIONS TO V ARIOUS COURSES INDICATE THAT THE SOCIETY WAS COLLECTING DO NATIONS IN CASH WHICH WERE WRITTEN IN PENCIL ON THE APPLICATIO N FORMS. THESE DONATIONS RECEIVED IN CASH WERE NOT TAKEN INT O THEIR ACCOUNTS; FOR WHICH THE SOCIETY EXPLAINED THAT DUE TO SOFTWARE PROBLEMS THE DAY-TO-DAY ACCOUNTS FROM 1.4.06 WAS N OT MAINTAINED; - DURING THE SURVEY IT WAS NOTICED THAT THE CHAIRMA N HAD ENTERED INTO PURCHASE OF IMMOVABLE PROPERTIES WORTH RS.6 7 CRORES WHEREAS THE REGISTRATION OF THE PROPERTIES W ORTH WAS SHOWN AS RS.1.25 CRORES; - THIS CLEARLY EXHIBITS THAT THE CHAIRMAN WAS PERSONA LLY HANDLING HUGE LIQUID CASH WITHOUT PROPER ENTRIES IN THE SOCIETYS BOOKS OF ACCOUNT; (III) DURING THE COURSE OF ASSESSMENT FOR THE AY 04-05 IN THE CASE OF CES NOTICED THAT THE SOCIETY MADE ADDITIONS TO THE FIXED ASSETS TO THE OXFORD HOSTEL AT RS.8.29 CRORES; - IN THE ABSENCE OF SUPPORTING EVIDENCE RS.2.5 CRORE S WAS REDUCED FROM THE VALUE OF FIXED ASSETS IN THE HANDS OF SOCIETY; - THE CHAIRMAN WAS HANDLING THE CASH OF THE SOCIETY A ND INVESTMENT MADE ON FIXED ASSETS WAS NOT PROPERLY RE CORDED; THAT THE CHAIRMAN HAD APPROPRIATED THE FUNDS WHICH WAS SAID TO HAVE BEEN INVESTED IN FIXED ASSETS TO THE EXTENT OF RS.2.5 CRORES; ITA NO.150/BANG/09 PAGE 4 OF 12 (IV) THE ASSESSEE HAD ADMITTED INCOME FROM OTHER SOURCE. OF RS.80000/- UNDER THE CAPTION GIFTS PRESENTATIONS TO AVOID PROTRACTED LITIGATION; - THUS THE ASSESSEE WAS IN RECEIPT OF GIFTS PRESENT ATIONS WHILE DISCHARGING THE DUTIES AS CHAIRMAN OF CES; - TAKING INTO ACCOUNT THE MATERIALS AVAILABLE ON RECO RD AND IN THE ABSENCE OF ANY CLINCHING EVIDENCE TO THE CONTRA RY THE INCOME FROM OTHER SOURCE WAS ESTIMATED AT RS.2.5 C RORES; & (V) IN THE ABSENCE OF EVIDENCE AND DETAILS DRAWINGS WA S ESTIMATED AT RS.6 LAKHS/ANNUM AND ADDED AS UNEXPLAINED EXPENDITU RE TO THE TOTAL INCOME FOR THE AY UNDER DISPUTE. SINCE LUMP -SUM ADDITION OF RS.2.5 CRORES WAS MADE TO THE TOTAL INCOME NO S EPARATE ADDITION WAS MADE ON THIS COUNT. 5. ON APPEAL THE LD. CIT(A) AFTER GIVING DU E WEIGHT-AGE TO THE CONTENTIONS OF THE ASSESSEE AND ALSO WELL REASONING OF THE AO IN ARRIVING AT THE CONCLUSION THAT ONCE IT IS ESTABLISHED THAT THE APPELLANT WAS DEAL ING IN CASH OF M/S. CHILDREN EDUCATION SOCIETY (CES) THE EXPEN DITURE NOT PROVED OR SUPPORTED IN THE CASE OF CES WOULD NATURALLY HAVE T O BE TREATED AS EXPENDITURE OF THE APPELLANT WHICH IS NOT VERIFIABLE WHETHER IT IS SHOWN IN HIS ACCOUNT OR NOT INSOMUCH AS HE HAS NOT PRODUCED ANY ACCOUNT BOOKS AND THE ASSESSEES COUNTER ARGUMENT THAT THE ACCOUNT BOOKS WERE NOT PRODUCED BECAUSE AT THE TIME OF SURVEY/SEARCH A NEW ACCOUNTING PACKAGE WAS BEING INSTALLED AND THE COMPUTER SYSTEM FAILED TO ADOPT THE NEW ACCOUNTING PACKAGE RESULTING IN NON- PRODUCTION OF BOOKS HAD TAKEN A VIEW THAT 12. THIS PLEA IS NOT ACCEPTABLE BECAUSE AT NO ST AGE OF HEARING EITHER BEFORE THE AO OR CIT (A) ACCOUNT BOOKS WERE PRODUCED FOR VERIFICATION BY THE APPELLANT. FURTHER THE CES HA D ITSELF SHOWN INVESTMENT OF RS.8.29 CRORES FOR ADDITION OF FIXED ASSETS TO THE STRUCTURE OF OXFORD HOSTEL. IT SHOULD HAVE SUFFICI ENT MATERIALS TO JUSTIFY AND PROVE SUCH INVESTMENT. IT HAD NOT PROD UCED THE BILLS AND VOUCHERS. AO HAS NOT DISPUTED THE AMOUNT OF INVEST MENT SHOWN. HE HAS DOUBTED THE SOURCE OF SUCH INVESTMENT. HE HAS CONCLUDED THAT BESIDES CES THE ONLY SOURCE CAN BE THE APPELLANT. HE HAS ITA NO.150/BANG/09 PAGE 5 OF 12 THEREFORE RIGHTLY ESTIMATED SUCH INVESTMENT AT RS. 2.5 CRORES AND RIGHTLY DETECTED THE SOURCE TO BE THE APPELLANT. I FIND SUCH CONCLUSION NOT PERVERSE AS CLAIMED BY THE AUTHORIZE D REPRESENTATIVE. IT IS BASED ON THE DOCUMENTS IMPOUNDED DURING THE C OURSE OF SURVEY U/S 133A(1) OF I.T. ACT. BOTH THE COPIES OF SALE D EEDS (REGISTERED) AND DEED SHOWING HIGHER PRICE PAID FOR THE SAME LAN D WAS FOUND DURING THE COURSE OF SURVEY. THESE DOCUMENTS SHOWE D REAL PURCHASE VALUE OF IMMOVABLE PROPERTIES AT 7 CRORES WHILE THE REGISTERED PRICE AT RS.1.25 CRORES THUS GIVING AN I NKLING THAT THE UNACCOUNTED CASH OF CES RECEIVED IN THE SHAPE OF DONATIONS/CAPITATION FEES/MANAGEMENT QUOTA SEAT ALL OTMENT FEES WERE IN PERSONAL POSSESSION OF NARASARAJU AND WERE UTILIZED FOR SEVERAL PURPOSES AND ONE SUCH PURPOSE WAS INVESTMEN T IN FIXED ASSETS OF IN OXFORD HOSTEL. I FIND THE ADDITION JU STIFIED. 6. DISENCHANTED WITH THE FINDINGS OF THE LD. CIT (A) THE ASSESSEE HAS COME UP WITH THE PRESENT APPEAL. DURING THE COURSE OF HEARING THE LD. A.RS ARGUMENT WAS PRIMARILY CENTERED WHAT WAS PUT FORTH BEFORE THE FIRST APPELLATE AUTHORITY. IN FURTHERANCE THE LD. A R WAS VERY VEHEMENT IN HIS SUBMISSION THAT (I) THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN CONCLUD ING THE ASSESSMENT U/S 144 OF THE ACT; (II) WHILE CONCLUDING THE ASSESSMENT OF CHILDREN EDUCATI ON SOCIETY [CES] THE AO HAD REDUCED RS.2.5 CRORES FROM THE V ALUE OF THE ADDITION TO FIXED ASSETS OF OXFORD HOSTELS ON ACCOU NT OF FAILURE OF CES TO PRODUCE PURCHASE BILLS ETC. THIS SUM OF R S.2.5 CRORES WAS ESTIMATED TO BE THE INCOME OF THE ASSESSEE. 6.1. DURING THE COURSE OF HEARING THE LD. A R FURNISHED A PAPER BOOK CONTAINING 1 105 PAGES WHICH CONSISTS OF INT ER ALIA COPIES OF (I) WRITTEN SUBMISSION BEFORE THE CIT(A) (II) ASST. OR DER FOR THE AY 04-05 IN THE CASE OF CES; (III) ORDER OF ITAT IN THE CASE OF CES FOR AYS 03-04 TO 05-06 ETC. BESIDES COPIES OF ASST ORDER OF THE ASSESSEE FOR THE AY 05-06 CIT(A)S ORDER FOR THE AY 06-07 IN THE CASE OF THE ASSESSEE. ITA NO.150/BANG/09 PAGE 6 OF 12 6.2. ON THE OTHER HAND THE LD. D R HAD ADVOC ATED THAT THE AUTHORITIES BELOW HAVE ANALYZED THE ISSUE COMPREHEN SIVELY AND AFTER MUCH DELIBERATIONS HAVE COME TO THE CONCLUSION THAT THE EXPENSES INCURRED BY THE ASSESSEE COULD NOT BE VERIFIABLE IN THE ABSENCE OF ANY BOOKS OF ACCOUNT WHETHER IT WAS SHOWN IN HIS ACCOUNT OR NOT. AS THE ISSUE HAS BEEN DEALT WITH IN A JUDICIOUS MANNER THE IMPUGNED ORDE R OF THE LD.CIT(A) REQUIRES TO BE SUSTAINED. DURING THE COURSE OF HEA RING THE LD. D R HAD FURNISHED A PAPER BOOK CONTAINING 1 41 PAGES WHIC H CONSISTS OF AMONG OTHERS COPIES OF SWORN STATEMENTS OF (I) THE ASSE SSEE ON VARIOUS OCCASIONS; (II) SMT.VIDYA TEACHER OF OXFORD E.H.SC HOOL (III) ASSESSEES DAUGHTER AND OTHERS. 7. WE HAVE DULY CONSIDERED THE RIVAL SUBMISSIONS PERUSED THE RELEVANT RECORDS AND ALSO THE DOCUMENTARY EVIDENCES PRODUCED BY EITHER PARTY IN THE SHAPES OF PAPER BOOKS. 7.1. THE ASSESSEE HAS CHALLENGED THE VERY COMPLETI ON OF THE ASSESSMENT U/S 144 OF THE ACT ON THE GROUND THAT T HE AO HAD FAILED TO ISSUE A PROPOSITION NOTICE INDICATING THE LINES ON WHICH THE ASSESSMENT WOULD BE MADE IN THE EVENT OF THE FAILURE TO FURNIS H THE REQUIRED INFORMATION AS SOUGHT FOR. 7.2. AS PER THE FIRST PROVISO TO S.144(1) OF THE ACT THE ASSESSEE WAS ABSOLUTELY RIGHT IN HIS ENDEAVOUR THAT THE ASSESSEE HAS TO BE GIVEN BY THE AO BY SERVING A NOTICE CALLING UPON THE ASSESSE E TO SHOW CAUSE ON A DATE AND TIME TO BE SPECIFIED IN THE NOTICE WHY TH E ASSESSMENT SHOULD NOT ITA NO.150/BANG/09 PAGE 7 OF 12 BE COMPLETED TO THE BEST OF HIS JUDGMENT. HOWEVER THE ASSESSEE HAD CONVENIENTLY OVERLOOKED THE SECOND PROVISO TO S. 14 4(1) OF THE ACT WHICH SAYS THAT PROVIDED FURTHER THAT IT SHALL NOT BE NECESSARY TO GIVE SUCH OPPORTUNITY IN A CASE WHERE A NOTICE UNDER SUB-SECTION (1) OF SECTION 142 HAS BEEN ISSUED PRIOR TO THE MAKING OF AN ASSESSMENT UNDER THIS SECTION 7.3. IN THE CASE ON HAND THE AO HAD ISSUED NOTICE S U/S 142(1) OF THE ACT ON 10.8.06 25.8.06 7.9.06 19.9.06 8.11. 06 CALLING FOR VARIOUS DETAILS HOWEVER THE ASSESSEE HAD CONVENIENTLY EXC USED HIMSELF BY SEEKING TIME TO RESPOND TO SUCH NOTICES. HOWEVER THERE WAS NO COMPLIANCE TO THE NOTICES U/S 142(1) DT: 27.11.06 A ND 15.12.06. THUS THE ASSESSEE CANNOT TAKE SANCTUARY UNDER THE PRETEXT TH AT THE IMPUGNED ORDER OF THE AO WAS TO BE ANNULLED. THE AO IN OUR CONSI DERED VIEW WAS WITHIN HIS REALM TO PASS AN ORDER U/S 144 OF THE ACT. IT IS ORDERED ACCORDINGLY. 7.4. LET US NOW MOVE ON TO ANALYZE THE COVETED ISS UE RAISED AS UNDER. 7.4.1. THE PRIME BASIS ON WHICH THE AO RESORTED TO ARRIVE AT A CONCLUSION TO ESTIMATE THE ASSESSEES TAXABLE INCOM E AT RS.2.5 CRORES WAS THAT THERE WAS AN ACTION U/S 133A OF THE ACT IN TH E PREMISES OF CES WHEREIN (I) NO REGULAR BOOKS OF ACCOUNTS WERE MAINTAINED; (II) NO PROPER MAINTENANCE OF DETAILS OF FEES AND DONATI ON COLLECTED FOR THE PERIOD FROM 1.4.06 TILL THE DATE OF SURVEY; (III) THE IMPOUNDED APPLICATION FORMS FOR ADMISSION TO VA RIOUS COURSES REVEALED THAT CES WAS COLLECTING DONATIONS IN CASH AND THESE DONATIONS WERE NOT ACCOUNTED FOR; ITA NO.150/BANG/09 PAGE 8 OF 12 (IV) THE CHAIRMAN OF CES ( THE ASSESSEE ) HAD ENTERED IN TO PURCHASE OF IMMOVABLE PROPERTIES WORTH OF RS.6 7 CRORES WHERE AS THE FINAL REGISTRATION OF THE PROPERTY WAS SHOWN AT RS.1.25 C RORES - THUS THE CHAIRMAN WAS PERSONALLY HANDLING HUGE LIQ UID CASH WITHOUT PROPER ENTRIES IN THE BOOKS OF ACCOUNT; (V) FOR THE AY UNDER DISPUTE THE CES HAD MADE ADDITION S TO FIXED ASSETS TO THE OXFORD HOSTEL OF RS.8.29 CRORES; - IN THE ABSENCE OF ANY SUPPORTING EVIDENCE FOR ADDIT ION TO FIXED ASSETS; RS.2.5 CRORES WAS REDUCED BY THE AO FROM TH E VALUE OF FIXED ASSETS IN THE HANDS OF CES WHILE CONCLUDING I TS ASSESSMENT; - CONSIDERING THAT THE CHAIRMAN WAS HANDLING THE CASH BELONGED TO CES LEAD TO THE LOGICAL BELIEF THAT TH E CHAIRMAN HAD APPROPRIATED THE FUNDS OF RS.2.5 CRORES WHICH W ERE ALLEGED TO HAVE BEEN INVESTED IN THE FIXED ASSETS O F CES; & - THUS THE TOTAL TAXABLE INCOME OF THE ASSESSEE WAS ESTIMATED AT RS.2.5 CRORES. 7.4.2. THE LD. CIT (A) HAD IN HIS IMPUGNED ORDER WHICH IS UNDER DISPUTE OBSERVED THAT THE CES ITSELF SHOWN INVESTM ENT OF RS.8.29 CRORES FOR ADDITION OF FIXED ASSETS TO THE STRUCTURE OF OX FORD HOSTEL. IN THE ABSENCE OF ANY BILLS/VOUCHERS THE AO HAD DOUBTED T HE SOURCE OF SUCH INVESTMENT BUT NOT THE INVESTMENT SHOWN. THE IMP OUNDED COPIES OF REGISTERED SALE DEEDS SHOWED THE REAL PURCHASE VALU E OF IMMOVABLE PROPERTIES AT RS.7 CRORES WHILE THE REGISTERED PRIC E WAS AT RS.1.25 CRORES AND THUS HE JUSTIFIED THE AOS CONCLUSION THAT TH E UNACCOUNTED CASH OF CES PROCURED IN THE SHAPE OF DONATION/CAPITATION FE ES/MANAGEMENT SEAT ALLOTMENT FEE ETC. WERE IN THE PERSONAL POSSESSION OF THE ASSESSEE WHICH WERE UTILIZED FOR SEVERAL PURPOSES INCLUDING THAT O F THE INVESTMENT IN FIXED ASSETS OF OXFORD HOSTEL. THUS HE JUSTIFIED THE ST AND OF THE AO ON THIS SCORE. ITA NO.150/BANG/09 PAGE 9 OF 12 7.4.3. ON A GLIMPSE OF THE ASSESSMENT ORDER FOR TH E AY 2004-05 IN THE CASE OF CES WHICH WAS THE BASE FOR THE AO TO AR RIVE AT A CONCLUSION THAT THE ASSESSEE (AS CHAIRMAN OF CES) HAD APPROPRI ATED THE FUNDS WHICH WAS SAID TO HAVE BEEN INVESTED IN THE FIXED ASSETS OF CES TO THE EXTENT OF RS.2.5 CRORES [ SOURCE: PAGES 11 TO 63 OF PB AR ] . WHEN THE CES CHALLENGED THE ENTIRE ASSESSMENT ORDER PASSED U/S 144 OF THE A CT BEFORE THE LD. CIT(A) WHO FOLLOWING HIS EARLIER YEARS ORDER DISM ISSED THE ASSESSEES APPEAL. 7.4.4. THE LD. A R HAD ALSO FURNISHED THE FINDING OF THE HONBLE TRIBUNAL IN ITA NOS:329 TO 331 (BANG)/2008 DATED: 11.7.2008 IN THE CASE OF CES FOR THE AYS 2003-04 04-05 AND 05-06 CHALLE NGING THE ORDERS OF THE CIT(A)-VI BANGALORE DATED: 16.1.2008 [CESS AS SESSMENT ORDER WAS PASSED U/S 143(3) OF THE ACT DATED: 24.3.2006 SOU RCE: P 104 OF PB AR] . ON A PERUSAL OF THE TRIBUNALS ORDER REFERRED SUPRA WE FIND AS REMARKED BY THE LD. CIT(A) IN HIS IMPUGNED ORDER WHICH IS UN DER DISPUTE THE ISSUE DEALT THEREIN WAS REGARDING THE STATUS OF CES AND C ONSEQUENTIAL DERIVATION OF BENEFITS U/S 10(23C)(III AD) OF THE ACT WHICH HA S NO RELEVANCE TO THE ISSUE ON HAND. 7.4.5. REVERTING BACK TO THE MAIN ISSUE THE AO WHILE CONCLUDING THE ASSESSMENT FOR THE AY 2004-05 IN THE CASE OF CE S NOTICED THAT CES HAD MADE ADDITIONS TO THE FIXED ASSETS TO THE OXFOR D HOSTEL AMOUNTING TO RS.8.29 CRORES. AS CES HAD NOT PRODUCED ANY PURCHAS E BILLS DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND IN THE ABSENCE OF ANY SUPPORTING EVIDENCE FOR ADDITIONS TO FIXED ASSETS HE HAD REDU CED A SUM OF RS.2.5 ITA NO.150/BANG/09 PAGE 10 OF 12 CRORES FROM THE VALUE OF FIXED ASSETS IN THE CASE O F CES FOR THE PURPOSE OF ASSESSMENT. BASED ON THIS FINDING THAT SINCE THE A SSESSEE (CHAIRMAN OF CES) WAS HANDLING THE CASH BELONGING TO CES AND THE INVESTMENT MADE BY CES ON FIXED ASSETS WAS NOT PROPERLY RECORDED HE WAS OF THE OPINION THAT THE CHAIRMAN HAD APPROPRIATED THE FUNDS WHICH WAS SAID TO HAVE BEEN INVESTED IN THE FIXED ASSETS TO CES TO THE EXTENT O F RS.2.5 CRORES. HOWEVER ON PERUSAL OF THE RECORDS AVAILABLE THE A SSESSEE HAD NOT REBUTTED THE AOS FINDING ON THIS COUNT. EQUALLY THE AO HAD NOT BROUGHT ON RECORD ANY CLINCHING DOCUMENTARY EVIDENCE TO PRO VE THAT THE ASSESSEE (CHAIRMAN OF CES) HAD APPROPRIATED THE FUNDS WHICH WAS ALLEGED TO HAVE BEEN INVESTED IN THE FIXED ASSETS TO CES TO THE EXT ENT OF RS.2.5 CRORES. THE AOS ASSUMPTION SHOULD HAVE BACKED WITH DOCUMEN TARY EVIDENCE TO STAND THE TESTIMONY OF LAW WHICH IN OUR CONSIDERED VIEW IS CONSPICUOUSLY MISSING. PERHAPS THE LAPS ON THE AOS PART WOULD HA VE BEEN DUE TO THE NON COOPERATION BY THE ASSESSEE. EVEN BEFORE THE CI T(A) THE ASSESSEE HAD NOT PRODUCED ANY BOOKS OF ACCOUNTS (PARA 12 OF CIT(A)).THE ASSESSEE HAD CONDUCTED HIMSELF IN AN IRRESPONSIBLE WAY AND I N DEFIANCE TO LAW. IN VIEW OF THE ABOVE WE ARE OF THE UNANIMOUS VIEW THA T THE MATTER SHOULD BE REMITTED BACK ON THE FILE OF THE CIT(A) TO PASS APP ROPRIATE ORDER AFTER OBTAINING AND VERIFY ALL RELEVANT DOCUMENTS AND BOO KS OF ACCOUNTS WITH LIBERTY TO CALL FOR REMAND REPORT FROM AO IF REQUIR ED. IN THE MEANWHILE THE ASSESSEE THROUGH HIS AR IS ADVISED TO FURNISH ALL DETAILS SORT FOR BY THE REVENUE PROMPTLY TO COMPLETE THE PROCEEDINGS EXPEDI TIOUSLY. IT IS ORDERED ACCORDINGLY. ITA NO.150/BANG/09 PAGE 11 OF 12 7.4.6. IT IS ALSO SEEN THAT THE ASSESSEE HAD NOT S HOWN ANY DETAILS OF DRAWINGS. IN THE ABSENCE OF DETAILS THE AO HAD ES TIMATED THE DRAWINGS AT RS.50000/MONTH WHICH IN OUR CONSIDERED VIEW IS RE ASONABLE CONSIDERING THE ASSESSEES POSITION AS CHAIRMAN OF A NUMBER OF INSTITUTIONS AND HIS STANDING IN THE SOCIETY. HOWEVER WE REMIT THIS I SSUE ALSO BACK TO THE FILE OF CIT(APPEALS) IN ORDER TO PROVIDE THE ASSESSEE WI TH ONE MORE OPPORTUNITY IN THE INTEREST OF JUSTICE. WE ALSO MAKE IT CLEAR THAT THE CIT(APPEALS) IS AT LIBERTY TO CONFIRM THE ORDER OF AO IN CASE THE ASSE SSEE DOES NOT COOPERATE AND JUSTIFY HIS STAND BY PRODUCING SUFFICIENT EVIDE NCE. 8. WITH REGARD TO THE ASSESSEES OTHER GRIEVANCE T HAT THE AUTHORITIES BELOW OUGHT TO HAVE TAKEN COGNIZANCE OF THE PAST ASSESSMENTS OF INCOME AS PER RECORDS FOR THE ESTIMATION OF INCO ME FOR THE YEAR UNDER DISPUTE WE FIND THAT THE LD. CIT(A) HAS DEALT WITH THIS ISSUE IN DETAIL WHICH REQUIRES NO INTERFERENCE. WE AGREE WITH HIS VIEWS. 9. THE NEXT GROUND RAISED IS NOT MAINTAINABLE AS T HE CHARGING OF INTEREST U/S 234B AND 234C OF THE ACT ARE MANDATORY AND CONSEQUENTIAL IN NATURE. THUS THIS GROUND IS DISMISSED. 10. IN THE RESULT THE ASSESSEES APPEAL IS ALLOWE D FOR STATISTICAL PURPOSE. ITA NO.150/BANG/09 PAGE 12 OF 12 PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF APRIL 2010. SD/- SD/- (GEORGE GEORGE ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 16 TH APRIL 2010. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE.