ITO, Ward-2,, Nizamabad v. M/s S Vinay Kumar Reddy & Others, Nizamabad

ITA 521/HYD/2013 | 2005-2006
Pronouncement Date: 30-04-2015 | Result: Allowed

Appeal Details

RSA Number 52122514 RSA 2013
Assessee PAN APRIL2015V
Bench Hyderabad
Appeal Number ITA 521/HYD/2013
Duration Of Justice 2 year(s) 15 day(s)
Appellant ITO, Ward-2,, Nizamabad
Respondent M/s S Vinay Kumar Reddy & Others, Nizamabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2015
Appeal Filed By Department
Order Result Allowed
Bench Allotted B
Tribunal Order Date 30-04-2015
Date Of Final Hearing 28-04-2015
Next Hearing Date 28-04-2015
Assessment Year 2005-2006
Appeal Filed On 15-04-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI P.M. JAGTAP ACCOUNTANT MEMBER ITA.NO.521/HYD/2013 ASSESSMENT YEAR 2005-2006 THE INCOME TAX OFFICER WARD-2 NIZAMABAD. VS. M/S. S. VINAY KUMAR REDDY AND OTHERS NIZAMABAD. PAN/GIR S-3128 (APPELLANT) (RESPONDENT) FOR REVENUE : MR. RAJAT MITRA FOR ASSESSEE : MR. S. RAMA RAO DATE OF HEARING : 28.04.2015 DATE OF PRONOUNCEMENT : 30.04.2015 ORDER PER P.M. JAGTAP A.M. THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-18 MUMBAI CAMP AT HYD ERABAD DATED 11.02.2013 ON THE FOLLOWING GROUNDS : 1. THE ORDER OF THE CIT(A) IS ERRONEOUS BOTH IN FACTS AND LAW. 2. THE ORDER OF THE CIT(A) IS ERRONEOUS IN LAW AND FAC TS AS THE ENTIRE ADDITION MADE IN RESPECT OF INVESTMENT M ADE BY 34 PERSONS WAS DELETED BASED ON THE REMAND REPORT SUBMITTED IN RESPECT OF 13 PERSONS WITHOUT DISCUSSION ABOUT THE REMAINING 21 PERSONS. 3. THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE A.O. DID NOT GIVE ANY CATEGORICAL FINDING ON ADDITI ONAL EVIDENCE REGARDING SOURCES FOR INVESTMENTS MADE BY INDIVIDUALS AS THE A.O. ONLY HAS SUBMITTED THE REPO RT TO DECIDE THE MATTER AS DEEMED FIT BY THE CIT(A). 2 ITA.NO.521/HYD/2013 M/S. S. VINAY KUMAR REDDY & OTHERS HYDERABAD. 4. ANY OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 2. THE ASSESSEE IN THE PRESENT CASE IS AN ASSOCIAT ION OF PERSONS WHO PARTICIPATED IN THE LIQUOR LICENSE T ENDERS ISSUED BY THE STATE EXCISE DEPARTMENT. ON THE BASIS OF INF ORMATION RECEIVED BY HIM THAT DEMAND DRAFTS FOR AN AMOUNT OF RS. 40 LAKHS HAVE BEEN TAKEN FROM BANK IN THE NAME OF THE ASSESSEE TO PARTICIPATE IN LIQUOR LICENSE PROCESS A SURVEY UNDER SECTION 133A WAS CARRIED OUT BY THE A.O. IN THE CASE OF THE ASSESSEE ON 12.04.2005 TO VERIFY THE SOURCE OF THE SAID AMOUNT. THEREAFTER A NOTICE UNDER SECTION 142(1) WAS ISSUED BY THE A.O . ON 13.08.2005 CALLING FOR THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION I.E. A.Y. 2005-2006 AS NO SUCH RETU RN WAS FILED BY THE ASSESSEE. IN RESPONSE TO THE SAID NOTICE TH E RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 26.09.2005 DECL ARING NIL INCOME. IN THE SWORN STATEMENT RECORDED ON 04.05.20 05 BY THE A.O. THE AMOUNT OF RS.43 LAKHS DEPOSITED IN THE BA NK ACCOUNT TO OBTAIN THE DEMAND DRAFTS WAS STATED TO BE RECEIV ED BY THE ASSESSEE FROM THE FOLLOWING 38 PERSONS. S.NO. NAME AMOUNT 1. UDAY BHANU REDDY E 200000 2. MOHAN REDDY N 100000 3. VASANTH REDDY B 200000 4. SANTOSH KUMAR S 150000 5. RAJENDER REDDY B 200000 6. NARENDER REDDY B 150000 7. KRISHNA REDDY K 100000 8. VINAY KUMAR REDDY S 175000 9. RANVEER REDDY S 175000 10. ANIL KUMAR B 50000 11. ASHOK J 50000 12. BALARAJ G 50000 13. BHOJANNA T 50000 14. GANGADHAR B 50000 15. GANGADHAR M 50000 3 ITA.NO.521/HYD/2013 M/S. S. VINAY KUMAR REDDY & OTHERS HYDERABAD. 16. KAMALAKAR RAO V 200000 17. KARUNAKAR REDDY B 125000 18. KRISHNA REDDY B 200000 19. LIMBADRI G 50000 20. MADHUKAR RAO V 200000 21. NARSAIAH K 50000 22. NARSING RAO K 50000 23. NAVEEN REDDY K 150000 24. PRAMOD REDDY A 100000 25. RAGHUPATHI REDDY L 150000 26. RAJENDER RAO B 50000 27. RAJU K 50000 28. RAMESH A 50000 29. RAVINDER H 40000 30. RAVLNDER RAO K 100000 31. SANJEEV REDDY K 125000 32. SATYAPAL REDDY N 125000 33. SUDHAKAR RAO V 200000 34. SUDHEER REDDY P 75000 35. SUJITH REDDY P 75000 36. THIRUMAL REDDY G 100000 37. UDAY KUMAR REDDY K 50000 38. VINOD REDDY G 235000 2.1. IN ORDER TO VERIFY THE EXPLANATION OF THE ASS ESSEE SUMMONS WERE ISSUED BY THE A.O. TO ALL THE ABOVE 38 PERSONS. IN RESPONSE TO THE SAID SUMMONS 30 OF THE TOTAL 38 PERSONS APPEARED BEFORE THE A.O. OUT OF WHICH STATEMENTS OF 24 PERSONS WERE RECORDED BY THE A.O. AND THE REMAINING CREDITORS FILED THEIR CONFIRMATION LETTERS. AFTER CONSIDERING THE STATEMENTS/CONFIRMATIONS OF THE CONCERNED PERSONS A S WELL AS THE OTHER MATERIAL AVAILABLE ON RECORD THE A.O. HE LD THAT THE AMOUNT CLAIMED TO BE RECEIVED BY THE ASSESSEE FROM 34 PERSONS WAS NOT SATISFACTORILY EXPLAINED BY THE ASS ESSEE. THE REASONS GIVEN BY THE A.O. TO COME TO THIS CONCLUSIO N IN RESPECT OF 34 PERSONS WERE AS UNDER : 4 ITA.NO.521/HYD/2013 M/S. S. VINAY KUMAR REDDY & OTHERS HYDERABAD. S.NO NAME AMOUNT REASONS FOR NON- ACCEPTANCE. 1. MOHAN REDDY N 100000 ASSISTANT IN WINE SHOP. SAVINGS OF EARLIER YEARS AND LANDS SOLD. NO EVIDENCE FILED. 2. SANTOSH KUMAR S 150000 LOAN FROM FATHER. NO IDEA HOW ARRANGED WHETHER WITHDRAWAL FROM BANK OR OUT OF AGRICULTURAL PROCEEDS. NO EVIDENCE FILED 3. RAJENDER REDDY 25000 RS.25 000/- LOAN FROM MOTHER. NO SUPPORTING EVIDENCE FILED 4. KRISHNA REDDY K 100000 LOAN FROM FATHER OUT OF SALE OF AGRICULTURAL LANDS. NO EVIDENCE FILED. 5. RANVEER REDDY S 175000 AROUND RS.60 000/- TO RS.75 000/- BORROWED FROM PAREN1S AND BALANCE OUT OF BUSINESS DRAWINGS. NO EVIDENCE FILED AND INVESTMENT NO REFLECTED IN THE RETURN OF INCOME FILED. 6. ANIL KUMAR B 50000 RS.20 000/- SAVINGS AND RS.30 000/- LOAN FROM OTHERS. NO EVIDENCE FILED 7. ASHOK J 50000 NO RESPONSE TO THE SUMMONS 8. BALARAJ G 50000 OFFICE ASSISTANT. INVESTMENT OUT OF STHRIDHAN. BEYOND MEANS AND NO SUPPORTING EVIDENCE FILED. 9. BHOJANNA T 50000 TECHNICIAN IN A CABLE OFFICE. LOAN FROM BROTHER-IN-LAW. NO EVIDENCE FILED. 10. GANGADHAR B 50000 NO RESPONSE TO THE SUMMONS. 11. GANGADHAR M 50000 SHOP ASSISTANT. LOAN FROM FATHER. BEYOND MEANS AND NO SUPPORTING EVIDENCE FILED. 12. KAMALAKAR RAO V 200000 RETIREMENT SAVINGS AND OTHER SAVINGS. RETIRED LONG BACK IN 2000. NO EVIDENCE FILED 13. KARUNAKAR REDDY B 125000 LOAN FROM FATHER WHO WORKED AS A VAO AND RETIRED IN 1995. NO EVIDENCE FILED. 14. KRISHNA REDDY B 200000 RS.1 50 000/- SAVINGS OF SELF AND MOTHER OUT OF AGRICULTURAL INCOME AND BALANCE BORROWED FROM TWO PERSONS. NO EVIDENCE AND FORM OF SAVINGS FILED. 15. LIMBADRI G 50000 LABOURER. SAVINGS. INVESTMENT BEYOND MEANS. 16. MADHUKAR RAO V 200000 AGRICULTURIST. NO EVIDENCE FILED. 17. NARSAIAH K 50000 NO RESPONSE TO THE SUMMONS. 18. NARSING RAO K 50000 SAUDI SAVINGS AND AGRICULTURAL INCOME. NO EVIDENCE FILED. 19. NAVEEN REDDY K 150000 LOAN FROM PARENTS OUT OF AGRICULTURAL INCOME. NO EVIDENCE FILED. 5 ITA.NO.521/HYD/2013 M/S. S. VINAY KUMAR REDDY & OTHERS HYDERABAD. 20. PRAMOD REDDY A 100000 LOAN FROM PARENTS OUT OF AGRICULTURAL INCOME. NO EVIDENCE FILED. 21. RAGHUPATHI REDDY L 150000 LOAN FROM FATHER OUT OF AGRICULTURAL INCOME. NO IDEA OF ARRANGEMENT OF MONEY BY FATHER. NO EVIDENCE FILED 22. RAJENDER RAO B 50000 RS.40 000/- SAVINGS AND RS.10 000/- LOAN FROM FATHER. NO EVIDENCE OF LOAN OR FORM OF SAVINGS FILED. 23. RAJU K 50000 DRIVER. LOAN FROM PARENTS. BEYOND MEANS AND NO EVIDENCE FILED. 24. RAMESH A 50000 NO RESPONSE TO THE SUMMONS 25. RAVINDER H 40000 AGRICULTURIST. OWN SAVINGS. NO EVIDENCE OF AGRICULTURAL INCOME AND FORM OF SAVINGS FILED. 26. RAVINDER RAO K 100000 RS.50 OOO SAVINGS AND BALANCE BORROWED FROM 3 PERSONS. NO SUPPORTING EVIDENCE FILED. 27. SANJEEV REDDY K 125000 RS.70 000 BORROWED FROM PARENTS AND BALANCE LOAN FROM 3 PERSONS BEYOND MEANS AND NO SUPPORTING EVIDENCE FILED. AMOUNT NOT RECEIVED BACK FROM THE AOP BY THE MEMBER 28. SATYAPAL REDDY N 125000 NO RESPONSE TO THE SUMMONS. 29. SUDHAKAR RAO V 200000 SAVINGS OUT OF AGRICULTURAL INCOME. NO EVIDENCE FILED AND INVESTMENT NOT REFLECTED IN THE RETURN OF INCOME FILED. 30. SUDHEER REDDY P 75000 SUPERVISOR AT CONSTRUCTION SITE. RS.25 000/- SAVINGS AND RS.50 000/- LOAN FROM FATHER. BEYOND MEANS AND NO SUPPORTING EVIDENCE FILED 31. SUJITH REDDY P 75000 STATED TO HAVE INVESTED RS.1 25 000/-. LOAN FROM FATHER. INVESTED ALONG WITH BROTHER P SUDHEER REDDY WHOSE SOURCE IS ALSO LOAN FROM FATHER. BEYOND MEANS AND NO SUPPORTING EVIDENCE FILED. 32. THIRUMAL REDDY G 100000 NO RESPONSE TO THE SUMMONS 33. UDAY KUMAR REDDY K 50000 LOAN FROM FATHER OUT OF SALES OF AGRICULTURAL LANDS. NO EVIDENCE FILED. 34. VINOD REDDY G 235000 LOAN FROM FATHER OUT OF AGRICULTURAL INCOME. NO EVIDENCE FILED. TOTAL RS.36 00 000 6 ITA.NO.521/HYD/2013 M/S. S. VINAY KUMAR REDDY & OTHERS HYDERABAD. 2.2. FOR THE REASONS GIVEN ABOVE THE A.O. TREATED THE CREDITS APPEARING IN THE NAME OF 34 CREDITORS AGGRE GATING TO RS.36 LAKHS AS UNEXPLAINED AND THE ADDITION WAS MAD E BY HIM TO THAT EXTENT TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE ORDE R DATED 31.12.2007. 3. AGAINST THE ORDER OF THE A.O. UNDER SECTION 143 (3) AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(A) DISPUTING THE ADDITION OF RS. 36 LAKHS MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED CASH CREDITS UNDER SECTION 6 8 OF THE ACT. AFTER TAKING INTO CONSIDERATION THE SUBMISSION S MADE BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEED INGS AS WELL AS THE MATERIAL AVAILABLE ON RECORD THE LD. CIT(A) CALL FOR THE REMAND REPORT FROM THE A.O. ACCORDINGLY A REMAND R EPORT DATED 08.02.2011 WAS SUBMITTED BY THE A.O. TO THE L D. CIT(A) THE GIST OF WHICH AS GIVEN BY THE LD. CIT(A) IN HI S ORDER IS EXTRACTED BELOW : 5.1 SRI. B. RAJENDER REDDY : THE INDIVIDUAL IN HIS DEPOSITION UNDER OATH ON 22.12.10 HAS CONFIRMED THAT HE HAS INVESTED RS.2 00 000/- AS PART OF MOU WITH SR. VINAY KUMAR REDDY AND OTHERS DURING 2004-05 FOR THE PURPOSE OF MAKING APPLICATION FOR OBTAINING LIQUOR SHOP LICENSE. HE HAS ALSO CONFIRMED THAT THE AMOUNT RS. 2 00 000/- INCLUDES RS.25 000/- OBTAINED FROM HIS MOTHER BUT AS THE BILL FOR SALE OF JEWELLERY BY HIS MOTHER WAS NOT PRODUCED RS.25 000/- WAS ADDED TO THE INCOME. THE RELEVANT BILLS DT. 02.05.2005 AND 03.05.2005 TOWARDS THE SALE OF JEWELLERY IN NANDED HAVE BEEN PRODUCED AND VERIFIED. THE ASSESSEE ADMITTED THAT THE SOURCE FOR INVESTMENT OF RS. 7 ITA.NO.521/HYD/2013 M/S. S. VINAY KUMAR REDDY & OTHERS HYDERABAD. 2 00 000/- WAS OUT OF PAST SAVINGS FROM HIS AGRICULTURAL INCOME. 5.2. SRI J. ASHOK : THE INDIVIDUAL IN HIS DEPOSITION UNDER OATH ON 05.1.2011 HAS CONFIRMED THAT HE HAS INVESTED RS.50 000/- AS PART OF MOU WITH SRI. VINAY KUMAR REDDY AND OTHERS DURING 2004-05 FOR THE PURPOSE OF MAKING APPLICATION FOR OBTAINING LIQUOR SHOP LICENSE. HE HAS ALSO CONFIRMED THAT HE HAS OBTAINED A SALARY CERTIFICATE FROM THE FIRM. THE INSPECTOR OF IT HAS ALSO VERIFIED THE ISSUE OF SALARY CERTIFICATE BY THE FIRM. THE ASSESSEE ADMITTED THAT THE SOURCE FOR INVESTMENT OF RS.50 000/- WAS OUT OF PAST SAVINGS FROM HIS SALARY. 5.3. SRI B. GANGADHAR : THE INDIVIDUAL IN HIS DEPOSITION UNDER OATH ON 22.12.2010 HAS CONFIRMED THAT HE HAS INVESTED RS.50 000/- AS PART OF MOU WITH SRI. VINAY KUMAR REDDY AND OTHERS DURING 2004-05 FOR THE PURPOSE OF MAKING APPLICATION FOR OBTAINING LIQUOR SHOP LICENSE. HE HAS ALSO CONFIRMED THAT HE HAS OBTAINED A INCOME CERTIFICATE FROM THE TAHSILDAR MAKLOOR. THE ASSESSEE ADMITTED THAT THE SOURCE FOR INVESTMENT OF RS.50 000/- WAS OUT OF PAST SAVINGS FROM HIS AGRICULTURAL INCOME AND PRIVATE SERVICE. 5.4. SRI B. KARUNAKAR REDDY: THE INDIVIDUAL IN HIS DEPOSITION UNDER OATH ON 06.01.2011 HAS CONFIRMED THAT HE HAS INVESTED RS.1 25 000/- AS PART OF MOU WITH SRI. VINAY KUMAR REDDY AND OTHERS DURING 2004-05 FOR THE PURPOSE OF MAKING APPLICATION FOR OBTAINING LIQUOR SHOP LICENSE. HE HAS ALSO CONFIRMED THAT HE HAS OBTAINED A NCOME CERTIFICATE FROM THE TAHSILDAR NIZAMBAD. THE ASSESSEE ADMITTED THAT THE SOURCE FOR INVESTMENT OF 8 ITA.NO.521/HYD/2013 M/S. S. VINAY KUMAR REDDY & OTHERS HYDERABAD. RS.1 25 000/- WAS OUT OF PAST SAVINGS FROM HIS AGRICULTURAL INCOME. 5.5. SRI G. LIMBADRI : THE INDIVIDUAL IN HIS DEPOSITION UNDER OATH ON 05.01.2011 HAS CONFIRMED THAT HE HAS INVESTED RS. 50 000/- AS PART OF MOU WITH SR. VINAY KUMAR REDDY AND OTHERS DURING 2004-05 FOR THE PURPOSE OF MAKING APPLICATION FOR OBTAINING LIQUOR SHOP LICENSE. HE HAS ALSO CONFIRMED THAT HE HAS OBTAINED A INCOME CERTIFICATE FROM THE TAHSILDAR NIZAMBAD. THE ASSESSEE ADMITTED THAT THE SOURCE FOR INVESTMENT OF RS. 50 000/- WAS OUT OF PAST SAVINGS FROM HIS AGRICULTURAL INCOME. 5.6. SRI K. NARSAIAH : THE INDIVIDUAL IN HIS DEPOSITION UNDER OATH ON 22.12.2010 HAS CONFIRMED THAT HE HAS INVESTED RS. 50 000/- AS PART OF MOU WITH SRI. VINAY KUMAR REDDY AND OTHERS DURING 2004-05 FOR THE PURPOSE OF MAKING APPLICATION FOR OBTAINING LIQUOR SHOP LICENSE. HE HAS ALSO CONFIRMED THAT HE HAS OBTAINED A INCOME CERTIFICATE FROM THE TAHSILDAR MAKLOOR. THE ASSESSEE ADMITTED THAT THE SOURCE FOR INVESTMENT OF RS. 50 000/- WAS OUT OF PAST SAVINGS FROM REARING OF SHEEP. 5.7. SRI K. NAVEEN REDDY : THE INDIVIDUAL IN HIS DEPOSITION UNDER OATH ON 06.01.2011 HAS CONFIRMED THAT HE HAS INVESTED RS.1 50 000/- AS PART OF MOU WITH SRI. VINAY KUMAR REDDY AND OTHERS DURING 2004-05 FOR THE PURPOSE OF MAKING APPLICATION FOR OBTAINING LIQUOR SHOP LICENSE. HE HAS ALSO CONFIRMED THAT HE HAS OBTAINED A INCOME CERTIFICATE FROM THE TAHSILDAR SIRIKONDA IN THE NAME OF HIS FATHER. THE ASSESSEE ADMITTED THAT THE SOURCE FOR INVESTMENT OF RS.1 50 000/- WAS OUT OF PAST SAVINGS FROM THE AGRICULTURAL INCOME AND PRIVATE 9 ITA.NO.521/HYD/2013 M/S. S. VINAY KUMAR REDDY & OTHERS HYDERABAD. SERVICE. 5.8. SRI A. PRAMOD REDDY : THE INDIVIDUAL IN HIS DEPOSITION UNDER OATH ON 05.01.11 HAS CONFIRMED THAT HE HAS INVESTED RS.1 00 000/- AS PART OF MOU WITH SRI. VINAY KUMAR REDDY AND OTHERS DURING 2004-05 FOR THE PURPOSE OF MAKING APPLICATION FOR OBTAINING LIQUOR SHOP LICENSE. HE HAS ALSO CONFIRMED THAT HE HAS OBTAINED A INCOME CERTIFICATE FROM THE TAHSILDAR NIZAMABAD. THE ASSESSEE ADMITTED THAT THE SOURCE FOR INVESTMENT OF RS. 1 00 000/- WAS OUT OF PAST SAVINGS FROM HIS AGRICULTURAL INCOME. 5.9. SRI K. RAJU : THE INDIVIDUAL IN HIS DEPOSITION UNDER OATH ON 22.012.2010 HAS CONFIRMED THAT HE HAS INVESTED RS. 50 000/- AS PART OF MOU WITH SRI. VINAY KUMAR REDDY AND OTHERS DURING 2004-05 FOR THE PURPOSE OF MAKING APPLICATION FOR OBTAINING LIQUOR SHOP LICENSE. HE HAS ALSO CONFIRMED THAT HE HAS OBTAINED A INCOME CERTIFICATE FROM THE TAHSILDAR MAKLOOR. THE ASSESSEE ADMITTED THAT THE SOURCE FOR INVESTMENT OF RS. 50 000/- WAS OUT OF PAST SAVINGS FROM WAGES RECEIVED. 5.10. SRI A. RAMESH : THE INDIVIDUAL IN HIS DEPOSITION UNDER OATH ON 05.01.2011 HAS CONFIRMED THAT HE HAS INVESTED RS.50 000/- AS PART OF MOU WITH SRI. VINAY KUMAR REDDY AND OTHERS DURING 2004-05 FOR THE PURPOSE OF MAKING APPLICATION FOR OBTAINING LIQUOR SHOP LICENSE. HE HAS ALSO CONFIRMED THAT HE HAS OBTAINED A INCOME CERTIFICATE FROM THE TAHSILDAR NIZAMABAD. THE ASSESSEE ADMITTED THAT THE SOURCE FOR INVESTMENT OF RS.50 000/- WAS OUT OF PAST SAVINGS FROM AGRICULTURAL INCOME AND WAGES RECEIVED. 10 ITA.NO.521/HYD/2013 M/S. S. VINAY KUMAR REDDY & OTHERS HYDERABAD. 5.11. SRI H. RAVINDER : THE INDIVIDUAL IN HIS DEPOSITION UNDER OATH ON 22.12.2010 HAS CONFIRMED THAT HE HAS INVESTED RS.40 000/- AS PART OF MOU WITH SRI. VINAY KUMAR REDDY AND OTHERS DURING 2004-05 FOR THE PURPOSE OF MAKING APPLICATION FOR OBTAINING LIQUOR SHOP LICENSE. HE HAS ALSO CONFIRMED THAT HE HAS OBTAINED AN INCOME CERTIFICATE FROM THE TAHSILDAR MAKLOOR. THE ASSESSEE ADMITTED THAT THE SOURCE FOR INVESTMENT OF RS.40 000/- WAS OUT OF PAST SAVINGS FROM AGRICULTURAL INCOME AND OTHER SOURCES. 5.12.SRI N. SATYAPAL REDDY : THE INDIVIDUAL IN HIS DEPOSITION UNDER OATH ON 05.01.2011 HAS CONFIRMED THAT HE HAS INVESTED RS.1 25 000/- AS PART OF MOU WITH SRI VINAY KUMAR REDDY AND OTHERS DURING 2004-05 FOR THE PURPOSE OF MAKING APPLICATION FOR OBTAINING LIQUOR SHOP LICENSE. HE HAS ALSO CONFIRMED THAT HE HAS OBTAINED A SALARY CERTIFICATE FROM THE FIRM. THE INSPECTOR OF IT HAS ALSO VERIFIED THE ISSUE OF SALARY CERTIFICATE BY THE FIRM. THE ASSESSEE ADMITTED THAT THE SOURCE FOR INVESTMENT OF RS.1 25 000/- WAS OUT OF PAST SAVINGS FROM HIS AGRICULTURAL INCOME AND SALARY FROM THE FIRM. 5.13. SMT. G. ANASUYA W/O. THIRUMAL REDDY : THE INDIVIDUAL IN HER DEPOSITION UNDER OATH ON 22-12-2010 HAS CONFIRMED THAT HER HUSBAND LATE SRI. THIRUMAL REDDY HAS INVESTED RS. 1 00 000/- AS PART OF MOU WITH SRI. VINAY KUMAR REDDY AND OTHERS DURING 2004-05 FOR THE PURPOSE OF MAKING APPLICATION FOR OBTAINING LIQUOR SHOP LICENSE. SHE HAS ADMITTED THAT THE SOURCE FOR INVESTMENT OF RS. 1 00 000/- 11 ITA.NO.521/HYD/2013 M/S. S. VINAY KUMAR REDDY & OTHERS HYDERABAD. WAS OUT OF PAST SAVINGS FROM THE AGRICULTURAL INCOME. 3.1. ON THE BASIS OF THE ABOVE REMAND REPORT SUBMITTED BY THE A.O. THE LD. CIT(A) HELD THAT ALL THE RELEVANT ENTRIES HAVING BEEN VERIFIED BY THE A.O. AND NO DIS CREPANCY HAVING BEEN POINTED OUT BY HIM IN THE REMAND REPORT THE ADDITION MADE TO THE TOTAL INCOME OF THE ASSESSEE U NDER SECTION 68 IS NOT SUSTAINABLE. ACCORDINGLY HE DELE TED THE ENTIRE ADDITION OF RS. 36 LAKHS MADE BY THE A.O. TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED CA SH CREDIT UNDER SECTION 68 OF THE ACT. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE REVENUE HAS PREFERRED THIS APPEAL BEFOR E THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LIMITED GRIEVANCE OF THE REVENUE AS PROJECTED IN TH E GROUNDS RAISED IN THE PRESENT APPEAL IS THAT THE REMAND REP ORT WAS SUBMITTED BY THE A.O. IN RESPECT OF ONLY 13 CREDITO RS AND THE LD. CIT(A) WAS NOT JUSTIFIED TO DELETE THE ENTIRE A DDITION MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED CASH CREDITS APPEARING IN THE NAME OF TOTAL 34 CREDITORS RELYING ON THE SA ID REMAND REPORT. IN THIS REGARD THE LD. D.R. HAS TAKEN US T HROUGH THE RELEVANT PORTION OF THE IMPUGNED ORDER OF THE LD. C IT(A) TO SHOW THAT THE REMAND REPORT SUBMITTED BY THE A.O. W AS ONLY IN RESPECT OF 13 CREDITORS WHEREAS THE LD. CIT(A) D ELETED THE ENTIRE ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS APPEARING IN THE NAME OF 34 CREDITORS ON THE BASIS OF THE SAID REMAND REPORT WITHOUT GIVING ANY FINDING WHATSOEVER IN RESPECT OF REMAINING 21 CREDITORS AND THIS POSITION CLEARLY EVIDENT FROM THE IMPUGNED ORDER OF THE LD. CIT(A) H AS NOT BEEN DISPUTED EVEN BY THE LD. COUNSEL FOR THE ASSESSEE. WE 12 ITA.NO.521/HYD/2013 M/S. S. VINAY KUMAR REDDY & OTHERS HYDERABAD. THEREFORE CONSIDER IT FAIR AND PROPER AND IN THE I NTEREST OF JUSTICE TO REMIT THE MATTER BACK TO THE LD. CIT(A) FOR THE LIMITED PURPOSE OF DECIDING THE ISSUE RELATING TO U NEXPLAINED CASH CREDITS APPEARING IN THE NAME OF REMAINING 21 CREDITORS WHICH ARE NOT COVERED BY THE REMAND REPORT SUBMITTE D BY THE A.O. THE LD. CIT(A) IS DIRECTED TO EXAMINE THE ISSU E RELATING TO UNEXPLAINED CASH CREDITS APPEARING IN THE NAME OF T HESE 21 CREDITORS ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD AND MAY ALSO SEEK REMAND REPORT FROM THE A.O. IN RESPEC T OF THESE CREDITORS AS HE MAY THINK FIT AND PROPER IN THE FAC TS AND CIRCUMSTANCES OF THE CASE. NEEDLESS TO OBSERVE THAT HE SHALL AFFORD A PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30.04.2 015. SD/- SD/- (G.C. GUPTA) (P.M. JAGTAP) VICE PRESIDENT ACCOUNTANT MEMBER HYDERABAD DATED 30 TH APRIL 2015 VBP/- COPY TO 1. THE INCOME TAX OFFICER WARD-2 NIZAMABAD. 2. M/S. S. VINAY KUMAR REDDY & OTHERS 6-2-25 SUBH ASH NAGAR NIZAMABAD. 3. CIT(A)-18 MUMBAI (HAVING JURISDICTION OVER CIT( A)-VI HYDERABAD.). 4. CIT(A)-VI HYDERABAD 5. CIT-V HYDERABAD 6. D.R. ITAT B BENCH HYDERABAD. 7. GUARD FILE