ACIT, Tirupathi v. R.Loganatham Naidu, Tirupathi

ITSSA 49/HYD/2005 | misc
Pronouncement Date: 29-10-2010 | Result: Partly Allowed

Appeal Details

RSA Number 4922516 RSA 2005
Assessee PAN ABOPN2031K
Bench Hyderabad
Appeal Number ITSSA 49/HYD/2005
Duration Of Justice 5 year(s) 8 month(s) 12 day(s)
Appellant ACIT, Tirupathi
Respondent R.Loganatham Naidu, Tirupathi
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 29-10-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 29-10-2010
Assessment Year misc
Appeal Filed On 16-02-2005
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI N.R.S.GANESAN AND SHRI CHANDRA POO JARI IT(SS)A NO. BLOCK PERIOD APPELLANT RESPONDENT 47/HYD/2005 BLOCK PERIOD FROM 1.4.1995 TO 9.8.201 SHRI R.LOKANADHA NAIDU TIRUPATI PAN ABOPN 2031 K ASSTT. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE TIRUPATI 49/HYD/2005 BLOCK PERIOD FROM 1.4.1995 TO 9.8.201 ASSTT. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE TIRUPATI SHRI R.LOKANADHA NAIDU TIRUPATI PAN ABOPN 2031 K 27/HYD/2006 BLOCK PERIOD FROM 1.4.1995 TO 9.8.201 SHRI R.LOKANADHA NAIDU TIRUPATI PAN ABOPN 2031 K ASSTT. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE TIRUPATI 64/HYD/2006 BLOCK PERIOD FROM 1.4.1995 TO 9.8.201 ASSTT. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE TIRUPATI M/S. TIRUMALA GRANITES CHITTOOR. PAN AACFT 7115 P 65/HYD/2006 BLOCK PERIOD FROM 1.4.1995 TO 9.8.201 ASSTT. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE TIRUPATI M/S. BINDU GRANITES CHITTOOR. PAN AAEFB 7000 K ASSESSEES BY : SHRI SAI PRASAD REVENUE BY : SMT. VASUNDHARA SINHA AND SHRI AMLAN TRIPATHI O R D E R PER N.R.S.GANESAN JUDICIAL MEMBER THERE ARE FIVE APPEALS CONCERNING THREE ASSESSEES IN THIS BUNCH AND THE RELEVANT BLOCK PERIOD IN ALL THESE MATT ERS IS FROM 1.4.1995 TO 9.8.201. IN THE CASES OF SHRI LOKANADHAM NAIDU BESIDES IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 2 THE CROSS-APPEALS WHICH ARE DIRECTED AGAINST THE ORDER OF THE CIT(A) TIRUPATI DATED 16.12.2004 THERE IS ONE MORE APPEAL BY THE ASSESSEE VIZ. IT(SS)A NO.27/HYD/2006 WHICH IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX TIRUPATI DATED 20TH FEB RUARY 2006 PASSED UNDER S.263 OF THE INCOME-TAX ACT. THE OTHER TW O APPEALS ARE FILED BY THE DEPARTMENT IN THE CASES OF THE FIRMS QUEST IONING THE RELIEFS GRANTED BY THE CIT(A). SINCE COMMON ISSUES ARE INVOLVED THESE APPEALS ARE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. WE MAY TAKE UP FOR CONSIDERATION THESE APPEALS AT SERIATIM. ASSESSEE'S APPEAL: IT(SS)A NO.47/HYD/2005 3. THE ONLY ISSUE ARISING FOR CONSIDERATION IN THIS APPE AL IS WITH REGARD TO THE ADDITION OF RS.15 LAKHS TOWARDS UN EXPLAINED INVESTMENT RELATING TO PURCHASE FO PROPERTY AT GUDIYAT TAM. 4. SHRI SAI PRASAD THE LEARNED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THERE WAS A SEARCH IN THE PREMISES OF THE ASSESSEE ON 9.8.12001. ACCORDING TO THE LEARNED REPRESENT ATIVE THOUGH THE AGREEMENT WAS ENTERED INTO FOR A SALE CON SIDERATION OF RS.21 LAKHS THE PROPERTY WAS SOLD ONLY FOR A SUM OF RS.4 50 000. ACCORDING TO THE LEARNED REPRESENTATIVE THE VENDOR WA S ALSO EXAMINED BY THE ASSESSING OFFICER. HE CONFIRMED THE SALE CONSIDERATIO N TO BE ONLY RS.4 50 000. THE LOWER AUTHORITIES WITHOUT CONSIDE RING THE STATEMENT RECORDED FROM THE VENDOR MADE THE ADDITION OF RS.15 LAKHS. REFERRING TO THE CASH FLOW STATEMENT FOR THE YE AR ENDING IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 3 31.3.1997 THE LEARNED REPRESENTATIVE SUBMITTED THA T THE AMOUNT SAID TO BE ADVANCED WAS NOT REFLECTED IN THE CASH FLOW STATEMENT. ACCORDING TO THE LEARNED REPRESENTATIVE CASH FLOW STATE MENT REFLECTED ALL THE PAYMENTS THAT HAVE BEEN MADE BY THE ASSESSEE FO R THE PURCHASE OF THE PROPERTY. IN FACT THE SALE CONSIDERATIO N FOR THE PURCHASE OF THE GUDIYATTAM PROPERTY IS ONLY RS.4 50 000 AND NOT RS.21 LAKHS AND THEREFORE THE ADDITION MADE BY THE L OWER AUTHORITIES IS NOT CALLED FOR. 5. ON THE CONTRARY SMT.VASUNDHARA SINHA THE LEARNE D REPRESENTATIVE FOR THE REVENUE SUBMITTED THAT THE NO RMAL PRACTICE IS TO SELL THE PROPERTY EXACTLY AT THE PRICE WHICH WAS MEN TIONED IN THE AGREEMENT. IN THIS CASE ACCORDING TO THE LEARNED REPRESE NTATIVE EVEN THOUGH THE AGREEMENT WAS ENTERED INTO BETWEEN THE A SSESSEE AND THE VENDOR FOR THE SALE OF PROPERTY AT RS.21 LAKHS AND THE ASSESSEE WAS SAID TO HAVE PAID A SUM OF RS.20 LAKHS AS ADVANCE HOWEVE R THE SALE DEED WAS REGISTERED ONLY FOR A SUM OF RS.4 50 000. THER EFORE THE ASSESSING OFFICER HAS TAKEN THE SALE CONSIDERATION AT RS.20 LAKHS AND AFTER REDUCING THE AMOUNT OF RS.5 LAKHS REFLECTED IN TH E CASH FLOW STATEMENT ADDED THE REMAINING AMOUNT FOR RS.15 LAKHS AS UNEXPLAINED INVESTMENT OF THE ASSESSEE. THE LEARNED REP RESENTATIVE PLACED RELIANCE ON THE DECISION OF THE PUNJAB AND HARYAN A HIGH COURT IN THE CASE OF PARAMJIT SINGH V/S. ITO (2010)(323 ITR 588) AND SUBMITTED THAT WHEN THE SALE CONSIDERATION WAS MENTIONE D IN THE SALE DEED THE ORAL EVIDENCE NEED NOT BE TAKEN INTO CONSIDE RATION TO DETERMINE THE ACTUAL CONSIDERATION. LEARNED REPRESENT ATIVE ALSO PLACED HER RELIANCE ON THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF P.R.PATEL V/S. DCIT(2001) 78 I TD 51 AND SUBMITTED THAT IN THE ABSENCE OF ANY SPECIFIC REASON THE CONTENTION OF IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 4 THE ASSESSEE THAT THE SALE CONSIDERATION WAS ONLY RS.4 50 00 0 CANNOT BE ACCEPTED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SI DE AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ADMITTE DLY THERE WAS A SEARCH OPERATION. DURING THE COURSE OF SEARCH OPERATIONS IT APPEARS THE REVENUE AUTHORITIES FOUND A PRO-NOTE DATED 3.7.1 997 EXECUTED BY ONE SHRI KUBENDRAN OF GUDIYATTAM FOR RS.10 LAKHS IN FAVOUR OF THE ASSESSEE. THE SAID PRO-NOTE WAS SEIZED FROM THE RESIDENCE OF THE ASSESSEE SHRI R.LOKANADHA NAIDU AT TIRUPATI. WHEN EXAM INED THE ASSESSEE ADMITTED THAT HE ADVANCED A SUM OF RS.5 LAKHS AND OBTAINED PRONOTE FROM KUBENDRAN RESIDENT OF GUDIYATTAM FOR R S.10 LAKHS TAKING INTO CONSIDERATION THE INTEREST AND OTHER FACTS. ANOTHER PRONOTE DATED 17.3.1997 WAS ALSO SAID TO BE EXECUTED BY SHRI K.KUBENDRAN IN FAVOUR OF THE ASSESSEE. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESSEE AS TO WHY THE AFORESAID SUM OF RS.20 LAKHS (TWO PRONOTES OF RS.10 LAKHS EACH DATED 3.7.1997 AND 17.3.1997) SHOULD NOT BE TREA TED AS UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE. FROM THE ORDERS OF THE LOWER AUTHORITIES IT IS OBVIOUS THAT THE ASSESSEE EXP LAINED THAT THE ASSESSEE ADVANCED A SUM OF RS.5 LAKHS AND IN ORDER TO SAFEG UARD THE INTEREST AND REPAYMENT OF THE AMOUNT PRONOTE WAS EXE CUTED FOR RS.10 LAKHS. SINCE SHRI KUBENDRAN WAS LIKELY TO FILE AN INSOL VENCY PETITION BEFORE THE COMPETENT COURT TO DECLARE HIM AS INSOLVENT ASSESSEE GOT AN AGREEMENT FOR SALE OF THE PROPERTY IN ORDER TO SECURE THE ADVANCE AMOUNT OF RS.5 LAKHS. IN THE AGREEMENT IT IS STATED THAT THE SALE CONSIDERATION WAS RS.21 LAKHS AND THE ASSESSEE HAD ADVANCED A SUM OF RS.20 LAKHS. THE VENDOR WAS ALSO EXAMINED BY THE REV ENUE AUTHORITY. THE VENDOR CATEGORICALLY EXPLAINED TO THE REVENUE AUTHORITY IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 5 THAT WHAT WAS RECEIVED BY HIM WAS ONLY A SUM OF RS. 5 LA KHS EVEN THOUGH HE EXECUTED TWO PRO-NOTES FOR RS.10 LAKHS EACH AN D AGREEMENT FOR SALE OF PROPERTY AT RS.21 LAKHS. SUBSEQ UENTLY THE SAID SHRI KUBENDRAN COULD NOT REPAY THE SAID SUM OF RS. 5 LAKHS AND ACCORDINGLY A SALE DEED WAS EXECUTED TRANSFERRING THE PR OPERTY IN QUESTION IN FAVOUR OF THE ASSESSEE FOR A SUM OF RS.4 95 0 00. THE LOWER AUTHORITIES HAVE TAKEN THE AGREEMENT FOR SALE ALONE INTO CONSIDERATION AND CAME TO THE CONCLUSION THAT THE ASSESSEE H AS ADVANCED A SUM OF RS.20 LAKHS. THE LOWER AUTHORITIES IG NORED THE TWO PRONOTES WHICH WERE SAID TO BE SEIZED DURING THE COURSE O F SEARCH OPERATIONS WHICH DISCLOSED THE PAYMENT OF RS.10 LAKHS EACH AND THE CIRCUMSTANCES UNDER WHICH THE PRONTOES AND THE AGREEMENT FOR SALE WERE EXECUTED. THE CASE OF THE ASSESSEE IS THAT A SUM OF RS.5 LAKHS WAS ADVANCED AND PRONOTE WAS OBTAINED FOR RS.10 LAKHS I N ORDER TO SECURE THE REPAYMENT OF PRINCIPAL AND INTEREST. WHEN T HE LOWER AUTHORITIES ACCEPTED THE CASE OF THE ASSESSEE THAT THE AGRE EMENT FOR SALE WAS ENTERED INTO IN ORDER TO SECURE THE LOAN ADVA NCED BY THE ASSESSEE THEY HAVE NO REASON FOR REJECTING THE SALE CONSI DERATION MENTIONED IN THE SALE DEED. WHEN THE REGISTERED SALE DEED DISCLOSES PAYMENT OF RS.4 95 000 THE REVENUE AUTHORITIES HAVE TO TAKE THE APPARENT SALE CONSIDERATION AS SUCH IN THE ABSENCE OF AN Y OTHER MATERIAL TO SUGGEST THAT THE ASSESSEE HAD PAID OVER AND A BOVE THE SALE CONSIDERATION MENTIONED IN THE SALE DEED. THE CASE O F THE ASSESSEE WAS THAT AN AMOUNT OF RS. 5 LAKHS WAS ADVANCED AN D TWO PRO-NOTES WERE OBTAINED FOR SECURING THE AMOUNT. THE ASSESSEE HAS NOT TAKEN ANY STEPS TO ENFORCE THE PAYMENT IN PURSUAN CE OF THE PRONOTE. THEREFORE IT IS OBVIOUS THAT NO SALE CONSIDERA TION WAS PASSED ON FOR EXECUTING THE AGREEMENT FOR SALE. IN OUR OPIN ION THE EXPLANATION OF THE ASSESSEE APPEARS TO BE VERY REASONABLE AND THE IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 6 PRO-NOTE WAS OBTAINED ONLY FOR THE PURPOSE OF SECURING THE REPAYMENT OF PRINCIPAL AMOUNT AS WELL AS INTEREST. WHEN THE VEN DOR WAS ABOUT TO FILE AN INSOLVENCY PETITION THE ASSESSEE IN ORDER TO SECU RE THIS AMOUNT OBTAINED THE AGREEMENT FOR SALE. SUBSEQUENTLY A SALE DEED WAS OBTAINED FOR THE TRANSFER OF THE LAND. IN THIS F ACTUAL SITUATION IN OUR OPINION WHAT WAS ADVANCED BY THE ASSESSEE IS ONLY RS.5 LAKHS AND NOT RS.20 LAKHS. THE PAYMENT OF RS. 5 LAKHS IS ADMITTEDL Y REFLECTED BY THE CASH FLOW STATEMENT OF THE ASSESSEE AND THEREFORE N O ADDITION IS CALLED FOR. 7. WE HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF T HE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF PARAMJIT S INGH (SUPRA). THE PUNJAB AND HARYANA HIGH COURT FOUND THAT OSTENSIBLE SALE CONSIDERATION DISCLOSED IN THE SALE DEED HAS TO BE ACCEPTE D AND IT CANNOT BE CONTRADICTED BY CHOOSING ANY ORAL EVIDENCE. IN THIS CASE ALSO THE OSTENSIBLE SALE CONSIDERATION DISCLOSED IN THE SA LE DEED IS ONLY RS.4 95 000 AND IN THE CASH FLOW STATEMENT THE ASSE SSEE HAS DISCLOSED ONLY RS.5 LAKHS AS ADVANCE. MOREOVER THE VENDOR HAS EXPLAINED THAT WHAT WAS RECEIVED WAS ONLY A SUM OF RS. 5 LAKHS AND THEREFORE THE OSTENSIBLE SALE CONSIDERATION DISCLOSED IN THE REGISTERED SALE DEED HAS TO BE ACCEPTED. IN THE ABSENCE OF ANY MATE RIALS TO SUGGEST THAT THE ASSESSEE HAS PAID ANY AMOUNT OVER AND ABO VE RS.5 00 000 IN OUR OPINION THIS JUDGMENT OF THE PUN JAB AND HARYANA HIGH COURT REFERRED TO BY THE REVENUE CANNOT BE OF A NY ASSISTANCE TO ITS CASE. 8. WE HAVE ALSO CAREFULLY GONE THROUGH THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN P.R. PATEL (SUPRA). IN THIS CASE BEFORE THE MUMBAI BENCH OF THE TRIBUNAL THE AGREEME NT WAS EXECUTED IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 7 EARLIER AND THE SALE DEED WAS EXECUTED FOR A LESSER AMOU NT WITHOUT ANY APPARENT REASON. THEREFORE THE MUMBAI BENCH OF T HE TRIBUNAL FOUND THAT DURING SEARCH OPERATION CERTAIN SIGNED RECE IPTS WERE ALSO FOUND FOR RECEIPT OF MONEY. IN THOSE CIRCUMSTANCES THE MUMBAI BENCH OF THE TRIBUNAL HELD THAT WHEN DOCUMENTARY EVID ENCE WAS FOUND AND SEIZED FROM THE PREMISES OF THE ASSESSEE INCLUDING SI GNED RECEIPTS THE SALE CONSIDERATION SHALL BE TAKEN AS DISCLO SED IN THE AGREEMENT IN THE ABSENCE OF ANY SATISFACTORY EXPLANATIO N FROM THE ASSESSEE. IN THE CASE BEFORE US NO MATERIAL IS FOUND TO SH OW THAT ANY PAYMENT WAS MADE OVER AND ABOVE THE SALE CONSIDERATION DISCLOSED IN THE SALE DEED. IN RESPECT OF THE PROMOTES AND AGREEM ENT FOR SALE THE ASSESSEE EXPLAINED THAT AN AMOUNT OF RS. 5 LAKHS WAS ADVANCED AND WHEN THE VENDOR WAS ABOUT TO FILE INSOLVENCY PETIT ION AN AGREEMENT FOR SALE WAS OBTAINED IN ORDER TO SECURE THE PAYMENT OF RS.5 LAKHS. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAYS PAID FOR PROMOTES AND AGREEMENT. SINCE THE REVENUE A UTHORITIES FOUND THE PROMOTES FOR RS. 10 LAKHS EACH AND AGREEMENT FOR SALE THERE MAY BE A TRUTH IN THE EXPLANATION OF THE ASSESSEE . IN THESE FACTS AND CIRCUMSTANCES IN OUR OPINION THE ASSESSEE HAS EXPLAINE D THE PAYMENT OF RS. 5 LAKHS SATISFACTORILY AND THEREFORE WE FIND NO REASON TO MAKE THE ADDITION OF RS. 15 LAKHS. IN VIEW OF TH E ABOVE WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND DELETE T HE ADDITION OF RS. 15 LAKHS. 9. IN THE RESULT THIS APPEAL OF THE ASSESSEE IS ALLOWED . IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 8 REVENUE'S APPEAL: IT(SS)A NO.49/HYD/2005 10. FIRST GROUND OF APPEAL RELATES TO DISALLOWANCE OF RS.16 62 049 AND RS.2 06 400. ACCORDING TO THE LEARNED DEPARTMENTAL REPRESENTATIVE THE DEPRECIATION COULD NOT HAVE BEEN AVAILABLE IN THE HANDS OF THE ASSESSEE AS LIQUID CASH. THE LEARNED DEPART MENTAL REPRESENTATIVE SUBMITTED THAT DEPRECIATION IS ONLY A N OTIONAL EXPENDITURE AND THEREFORE IT CANNOT BE CONSIDERED AS CASH AVAILABLE IN THE HANDS OF THE ASSESSEE. ON THE CONTRARY THE LEAR NED COUNSEL FOR THE ASSESSEE SUBMITTED THAT DEPRECIATION HAS TO BE ALLOWED ON THE NET INCOME BEFORE TAX. TAXABLE INCOME HAS TO BE COMPUTED ONLY AFTER ALLOWING DEPRECIATION ON THE NET INCOME. THEREFORE D EPRECIATION HAS TO BE CONSIDERED AS AVAILABLE IN THE HANDS OF THE ASSESSEE FOR THE PURPOSE OF INVESTMENT. REFERRING TO THE ORDER OF THE CIT(A) MORE PARTICULARLY AT PAGE 18 THE LEARNED REPRESENTATIVE SUBMITTED THA T THE CIT(A) EXAMINED A HYPOTHETICAL SITUATION AND FOUND THAT DEPR ECIATION ALLOWED AT THE RATE OF 20% TO THE EXTENT OF RS.1 LAKH WAS AV AILABLE IN THE HANDS OF THE ASSESSEE FOR UTILIZATION. THEREFORE EVEN T HOUGH THE DEPRECIATION IS ONLY A NOTIONAL EXPENDITURE AND IT W AS NOT ACTUALLY INCURRED IT HAS TO BE REDUCED IN THE COMPUTATION FROM THE NET INCOME COMPUTED AFTER ALLOWING ALL EXPENSES. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE. WE HAVE ALSO GONE THROUGH THE ORDERS OF THE LOWER AUT HORITIES. THE CIT(A) HAS EXAMINED A HYPOTHETICAL SITUATION AND FOUN D THAT WHEN NET PROFIT WAS RS.30 000 AND DEPRECIATION WAS RS.1 LAKH TH E CASH AVAILABLE IN THE HANDS OF THE ASSESSEE IS RS.1 30 000 WHI CH INCLUDES THE DEPRECIATION OF RS.1 LAKH. IN OUR OPINION AS RI GHTLY SUBMITTED BY IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 9 THE LEARNED REPRESENTATIVE FOR THE ASSESSEE DEPRECIATIO N HAS TO BE ALLOWED ONLY ON THE NET INCOME COMPUTED AFTER ALLOWIN G ALL THE EXPENSES. DEPRECIATION IS ONLY A DEEMED EXPENDITURE A ND IT IS NOT AN ACTUAL EXPENDITURE AND THEREFORE DEPRECIATION WHICH WAS ALLOWED WHILE COMPUTING TAXABLE INCOME HAS TO BE NECESSARILY AVA ILABLE FOR THE ASSESSEE. THE CIT(A) HAS NARRATED THE SITUATION PRACTICA LLY TO POINT OUT HOW A SUM OF RS. 1 LAKH WHICH WAS ALLOWED AS DEPRECI ATION IS AVAILABLE FOR THE ASSESSEE IN THE FORM OF CASH. IN THIS SI TUATION WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). ACCORDINGLY THE SAME IS CONFIRMED. 12. THE NEXT GROUND OF APPEAL OF THE REVENUE RELAT ES TO DISALLOWANCE OF RS.6 LAKHS SAID TO BE ADVANCED BY THE ASSES SEE'S WIFE. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CAREFULLY G ONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES. THE ASSESSING OFFICER A DDED A SUM OF RS.53 22 722 AS UNDISCLOSED INCOME ON THE BASIS OF THE CASH FLOW STATEMENT FILED BY THE ASSESSEE. THE ASSESSEE HAS SHOWN A SUM O F RS.6 LAKHS AS ADVANCED BY HIS WIFE. THE CIT(A) FOUND THA T THE ASSESSEE'S WIFE SMT.R.MURALI AND DAUGHTER SMT.R.NAGAMA NI ARE INDEPENDENT ASSESSEES. MAJOR PART OF THE INVESTMENTS WER E MADE IN THE PARTNERSHIP FIRM. THEREFORE THE CIT(A) FOUND TH AT THE ADDITION HAS TO BE CONSIDERED IN THE HANDS OF THE PARTNERSHIP FIRM A ND NOT IN THE HANDS OF THE ASSESSEE. THE ADDITION MADE WITH REGARD TO INVESTMENT MADE IN THE HANDS OF THE PARTNERSHIP FIRM WAS DELETE D BY THE CIT(A) WHICH WAS NOT CHALLENGED BY THE REVENUE. AS FAR AS THE ADVANCES SAID TO BE MADE BY THE FAMILY MEMBERS ARE CONCERNED THE CI T(A) FOUND THAT THE FAMILY MEMBERS ARE INDEPENDENT ASSESSEES. THEREF ORE EVEN IF IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 10 IT IS UNEXPLAINED THE SAME HAS TO BE CONSIDERED FOR ADD ITION IN THE HANDS OF THE FAMILY MEMBERS. WHEN THE CIT(A) DELETED THE ADDITION IN RELATION TO THE INVESTMENTS MADE IN PARTNERSHIP FIRM B Y VARIOUS FAMILY MEMBERS ON THE GROUND THAT IT HAS TO BE CONSIDERED ONLY IN THE HANDS OF THE FAMILY MEMBERS AND THE PARTNERSHIP FIRM IN OU R OPINION THE CIT(A) RIGHTLY DELETED THE ADDITION IN RESPECT OF THE ADVANCE MADE BY THE ASSESSEE'S WIFE TO THE EXTENT OF RS. 6 LAKHS. WHEN TH E REVENUE ACCEPTED THE ORDER OF THE CIT(A) IN RESPECT OF INVESTME NT MADE IN THE PARTNERSHIP FIRM WE DO NOT FIND ANY REASON TO TAKE A DIFFERENT VIEW IN RESPECT OF ADVANCE MADE BY THE ASSESSEE'S WIFE TO THE EXTE NT OF RS.6 LAKHS. THEREFORE WE DO NOT FIND ANY REASON TO INTER FERE WITH THE ORDER OF THE CIT(A). ACCORDINGLY THE SAME IS CONFIRMED. 14. NEXT GROUND OF REVENUE IN THIS APPEAL RELATES T O THE ADDITION OF RS.6 65 700 TOWARDS UNDISCLOSED EXPENDITURE BY WAY OF INTEREST TO CREDITORS. 15. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. THE LEARNED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS SHOWN NET INCOME IN THE CASH FLOW STATEMENT AFTER DEDUCTING THE INTEREST ON BORROWED FUN DS AND THEREFORE THE CIT(A) HAS RIGHTLY DELETED THE ADDITI ON MADE BY THE ASSESSING OFFICER. THE CIT(A) FOUND THAT WHEN THE INCOM E OF THE ASSESSEE WAS ESTIMATED THERE IS NO NEED FOR ANY SEPARATE ADDITION IN RESPECT OF THE PAYMENT OF INTEREST. THE CIT(A) HAS ALS O TAKEN INTO CONSIDERATION THE CASH FLOW STATEMENT FILED BY THE ASSESSE E AND FOUND THAT THE NET INCOME WAS REFLECTED IN THE CASH FLOW STATE MENT. WHEN THE INCOME OF THE ASSESSEE WAS ESTIMATED IN OUR CONSIDERED OPINION ALL THE EXPENDITURE INCLUDING INTEREST PAYMENTS ARE DE EMED TO HAVE IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 11 BEEN ALLOWED AND THEREFORE THERE IS NO NEED FOR MAK ING ANY SEPARATE ADDITION IN RELATION TO INTEREST PAYMENTS. IN OUR OP INION THE CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER IN THIS BEHALF. 16. THE NEXT GROUND OF THE REVENUE IN THIS APPEAL RELATES TO LEVY OF SURCHARGE. 17. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE DECISION OF THE APEX COURT IN THE CASE OF SURESH N.GUPTA (297 ITR 322) WHICH SQUAR ELY COVERS THE ISSUE IN FAVOUR OF THE REVENUE THE ASSESSING OFFICER IN OUR OPINION WAS RIGHT IN LEVYING SURCHARGE. ACCORDINGLY THE IMPUGNED ORDER OF THE CIT(A) IS SET ASIDE AND THE ORDER OF THE ASSESSING OFFICER IS RESTORED IN RESPECT OF LEVY OF SURCHARGE. 18. IN THE RESULT THIS APPEAL OF THE REVENUE IS PAR TLY ALLOWED. ASSESSEE'S APPEAL: IT(SS)A NO.27/HYD/2006 19. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX PASSED UNDER S.263 OF T HE INCOME- TAX ACT. ACCORDING TO THE LEARNED REPRESENTATIVE FOR T HE ASSESSEE THE COMMISSIONER OF INCOME-TAX HAS REVISED THE ORDER OF THE ASSESSING OFFICER ON TWO GROUNDS. ACCORDING TO THE LEARNED REPRESE NTATIVE THE COMMISSIONER OF INCOME-TAX FOUND THAT THE ASSESSING OFFICE R HAS NOT TAKEN INTO CONSIDERATION THE INTEREST INCOME OF RS. 2 04 900 AND UNDISCLOSED INCOME OF RS.9 50 000 DISCLOSED IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 1998-99 WHILE COMPUTING THE UND ISCLOSED IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 12 INCOME AND THEREFORE THE COMMISSIONER OF INCOME-TAX FOUND THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTE RESTS OF THE REVENUE. ACCORDING TO THE LEARNED REPRESENTATIVE WHIL E PASSING THE CONSEQUENTIAL ORDER THE ASSESSING OFFICER HIMSELF FOUND TH AT THE INTEREST INCOME OF RS.2 04 900 WAS ALSO INCLUDED IN THE INCOME COMPUTED BY THE ASSESSING OFFICER. ACCORDINGLY HE FOUND THAT THERE IS NO NEED FOR ANY SEPARATE ADDITION. AS FAR AS RS.9 50 00 0 IS CONCERNED ACCORDING TO THE LEARNED REPRESENTATIVE WHEN THE IN COME OF THE ASSESSEE WAS ESTIMATED BY THE ASSESSING OFFICER THERE IS NO N EED FOR MAKING ANY ADDITION OF THE INCOME ALREADY DISCLOSED BY THE ASSESSEE. ACCORDING TO THE LEARNED REPRESENTATIVE WHEN THE INCOM E WAS ESTIMATED THE INCOME ALREADY DISCLOSED BY THE ASSESSEE W OULD ALSO FORM PART OF THE INCOME ESTIMATED BY THE ASSESSING OFFICER . MOREOVER WHEN THE ASSESSING OFFICER COMPUTED THE UNDISCLOSED INCOME F OLLOWING A METHOD WHICH IS ALSO PERMISSIBLE IN LAW THE COMMISSIO NER OF INCOME-TAX CANNOT REVISE THE ORDER OF THE ASSESSING OFFICE R ON THE GROUND THAT THE INCOME HAS TO BE COMPUTED FOLLOWING A NOTHER METHOD. ACCORDING TO THE LEARNED REPRESENTATIVE THE ORDER OF THE ASSESSING OFFICER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INT ERESTS OF REVENUE. HE FURTHER SUBMITTED THAT THE CIT(A) HAS ALSO PASSED AN ORDER ON THE VERY SAME ISSUE AND THEREFORE ON THAT GROUND ALSO THE COMMISSIONER OF INCOME-TAX HAS NO JURISDICTION TO PASS ORDER UNDER S.2 63 OF THE ACT. REFERRING TO PAGE 22 OF THE ORDER OF THE CIT(A) TH E LEARNED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSIN G OFFICER HAS TAKEN INTO CONSIDERATION ALL THE FACTUAL CIRCUMSTANCE S WHICH WERE ALSO APPRECIATED BY THE CIT(A) IN THE FIRST APPELLATE PROCEEDINGS AND THEREFORE THE COMMISSIONER OF INCOME-TAX IS NOT JUSTIF IED IN INVOKING HIS JURISDICTION UNDER S.263 OF THE ACT. HE ALSO RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF SHYAM AGARWAL V/S. CIT (35 SOT 356). IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 13 20. ON THE CONTRARY THE LEARNED REPRESENTATIVE FOR THE REVENUE SUBMITTED THAT THE ASSESSEE FILED THE RETURN FO R THE BLOCK PERIOD DISCLOSING AN INCOME OF RS.11 54 900 FOR THE ASSESSM ENT YEAR 1998-99 COMPRISING OF TWO ITEMS NAMELY INTEREST INCOME OF RS.2 04 000 AND UNDISCLOSED INCOME OF RS.9 50 000. HOW EVER THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT OMITTED T O INCLUDE THE INCOME DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCO ME. WHILE PASSING THE CONSEQUENTIAL ORDER THE ASSESSING OFFICER HIMSE LF FOUND THAT THE INTEREST INCOME OF RS 2 04 000 WAS ALSO INCLUDED IN THE TOTAL INCOME AND THEREFORE THERE IS NO NEED FOR MAKING ANY FURTHER ADDITION. IN RESPECT OF RS.9 50 000 HE SUBMITTED THAT THE SAME WAS NOT INCLUDED IN THE ASSESSMENT MADE BY THE ASSESSING OFFICER AND THEREFORE THE ORDER OF THE ASSESSING OFFICER WAS ERRONEO US AND PREJUDICIAL TO THE INTERESTS OF REVENUE. 21. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. A DMITTEDLY THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNT. THEREFOR E THE ASSESSEE FILED THE RETURN OF INCOME ON THE BASIS OF CASH FLO W STATEMENT AND ESTIMATION. THE ASSESSING OFFICER HAS NOT ACCEPTED THE CA SH FLOW STATEMENT PREPARED BY THE ASSESSEE AND COMPUTED THE INCOM E ON THE BASIS OF THE SEIZED MATERIAL. THE QUESTION ARISING FOR CONSIDERATION IS WHEN THE INCOME OF THE ASSESSEE WAS ESTIMATED ON THE BASIS OF SEIZED MATERIAL CAN WE SAY THAT A SUM OF RS.9 50 000 DISCLOSED I N THE ORIGINAL RETURN WAS NOT INCLUDED IN THE BLOCK ASSESSMENT MADE BY THE ASSESSING OFFICER? IN OUR OPINION WHEN THE INCOME WAS E STIMATED BY THE ASSESSING OFFICER ON THE BASIS OF THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIONS THE INCOME WHICH WAS DISCLO SED BY THE ASSESSEE WOULD ALSO FORM PART OF THE INCOME SO ESTIMATE D BY THE IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 14 ASSESSING OFFICER. THEREFORE THERE IS NO NEED FOR MAKING ANY SEPARATE ADDITION. MOREOVER AS RIGHTLY SUBMITTED BY THE LEARN ED COUNSEL FOR THE ASSESSEE WHEN THE ASSESSING OFFICER HAS COMPUTED THE INCO ME AS PER ONE OF THE PERMISSIBLE METHODS THE COMMISSIONER OF INCOME-TAX CANNOT SAY THAT THE OTHER METHOD WHICH IS ALSO A PERMISSIB LE ONE HAS TO BE PREFERRED. THERE MAY BE ONE MORE METHOD FOR CO MPUTATION OF UNDISCLOSED INCOME UNDER WHICH THE INCOME DISCLOSED BY T HE ASSESSEE IN THE REGULAR RETURN HAS TO BE ADDED SEPARATELY . THAT DOES NOT RENDER THE ORDER OF THE ASSESSING OFFICER TO BE ERRO NEOUS. IN THE CASE BEFORE US ADMITTEDLY THE INCOME WAS ESTIMATED ON T HE BASIS OF SEIZED MATERIAL. THEREFORE INCOME ADMITTED IN THE RE TURN WOULD FORM PART OF THE ESTIMATED INCOME AND THEREFORE THERE IS N O NEED FOR SEPARATE ADDITION IN RESPECT OF RETURNED INCOME. WE HAV E ALSO GONE THROUGH THE DECISION OF THE AGRA BENCH OF THE TRIBUNA L IN SHYAM AGARWAL V/S. CIT (SUPRA) WHEREIN THE AGRA BENCH OF THIS TRIBUNAL FOUND THAT WHEN THE ASSESSING OFFICER EXAMINED THE DETAI LS AND AFTER VERIFYING THE MATERIAL AVAILABLE ON RECORD HAS TAKEN A PLAUSIBLE VIEW HIS ORDER CANNOT BE TREATED AS ERRONEOUS SIMPLY BECAUSE I T WAS NOT ACCEPTABLE TO THE COMMISSIONER OF INCOME-TAX. IN VIEW O F THIS DECISION OF THE AGRA BENCH OF THE TRIBUNAL IN OUR OP INION THE ORDER OF THE ASSESSING OFFICER IS NETHER ERRONEOUS NOR PREJUDICIAL T O THE INTERESTS OF THE REVENUE. IN THIS VIEW OF THE MATTER WE SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME-TAX PASSED UNDER S.2 63 OF THE ACT AND ALLOW THIS APPEAL OF THE ASSESSEE. 23. IN THE RESULT APPEAL OF THE ASSESSEE STANDS ALLOWED . IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 15 REVENUE'S APPEAL: IT(SS)A NO.64/HYD/2006 24. FIRST GROUND OF REVENUE IN THIS APPEAL IS WITH RE GARD TO AVAILABILITY OF CASH IN RELATION TO DEEMED DEPRECIATIO N. 25. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE LOWER AUTHORITIES. WE HAVE DEALT WITH AN IDENTICAL ISSUE WHILE DEALING WITH THE REVENUE'S APPEAL IT(SS) A NO. 49/HYD/2005 HEREINABOVE. FOR THE DETAILED REASONS DISCUSSED IN THAT BEHALF IN PARAS 10 AND 11 HEREINABOVE WHILE DECIDING THAT APPEAL W E UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE AND REJECT THIS GROUN D OF THE REVENUE 24. THE NEXT ISSUE ARISING FOR CONSIDERATION IN THIS AP PEAL OF THE REVENUE IS IN RELATION TO AN ADDITION OF RS.1 75 000 MADE BY THE ASSESSING OFFICER ON THE GROUND OF INCORRECT CLAIM OF THE A SSESSEE HAVING REALISED SO MUCH OF CASH WITH REFERENCE TO THE O PENING STOCK. 26. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTE D THAT HE IS PLACING RELIANCE ON THE GROUND OF APPEAL AND T HE OBSERVATIONS OF THE ASSESSING OFFICER. ON THE CONTRARY THE LEARNED COU NSEL FOR THE ASSESSEE SUBMITTED THAT HE IS PLACING RELIANCE ON THE OBSEV ATIONS OF THE CIT(A). 27. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDIN G THE ORDERS OF THE LOWER AUTHORITIES THE ASSESSING OFFICER MADE THE AD DITION OF RS.1 75 250 REJECTING THE ASSESSEE'S CLAIM TOWARDS REALISATIO N OF OPENING STOCK. THE CIT(A) FOUND THAT AS PER ACCOUNTING STANDARD IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 16 ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA INDIRECT METHOD IS TO BE FOLLOWED IN PREPARING THE CASH FLOW SYSTEM. IN THE ABSENCE OF ANY DETAILS OF PURCHASES AND SALES ADJUSTMENT BY WAY OF INCREASE AND DECREASE IN STOCK IS TO BE MADE TO THE NET PROFIT ESTIMATED. IN THIS CASE ADMITTEDLY THE ASSESSEE HAS NOT M AINTAINED ANY BOOKS OF ACCOUNT AND THE INCOME WAS ESTIMATED ON THE BASIS OF SEIZED MATERIAL AND THEREFORE AS FOUND BY THE CIT(A ) NECESSARY ADJUSTMENT HAS TO BE MADE TOWARDS THE STOCK. THEREFORE THE CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE ASSESSING O FFICER. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE. IT IS ACCORDINGLY CONFIRMED. 28. THE NEXT GROUND OF THE REVENUE IS WITH REGARD TO ESTIMATION OF PROFIT. 29. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESE NTATIVE AND THE C0UNSEL FOR THE ASSESSEE. THE ASSESSING OFFICER ESTIMAT ED THE PROFIT AT 20% . ON APPEAL THE CIT(A) RESTRICTED THE SAME TO 5%. THE CIT(A) AFTER CONSIDERING THE PROFIT OF THE ASSESSEE FOR EARLIER YEARS AND OTHER COMPARABLE CASES FOUND THAT ESTIMATION OF NET PROFIT AT 5% IS VERY REASONABLE AND IT IS COMPARABLE WITH THE RATE P REVAILING IN THE MARKET IN THE LINE OF ASSESSEE'S BUSINESS. SINCE THE CIT(A ) HAS ESTIMATED THE PROFIT AFTER TAKING INTO CONSIDERATION T HE ASSESSEE'S PROFIT IN THE EARLIER YEARS AND ALSO THE CASES OF OTHER SIMILARLY PLACED TRADERS IN THE ASSESSEE'S LINE OF BUSINESS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). ACCORDINGLY THE SAME IS CONF IRMED. 30. DEPARTMENT HAS RAISED AN ADDITIONAL GROUND IN T HIS APPEAL WHICH RELATES TO THE LEVY OF SURCHARGE. SINCE THE LEV Y OF SURCHARGE IS IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 17 A LEGAL ISSUE WE ADMIT THE ADDITIONAL GROUND RAISED BY THE DEPARTMENT. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMI SSIONS WE FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE REVENUE BY T HE DECISION OF THE APEX COURT IN THE CASE OF SURESH N.GUPTA (SUPRA). WE ACCORDINGLY HOLD THAT THE ASSESSING OFFICER IS JUSTIFIED IN LEVYING THE SURCHARGE. WE ACCORDINGLY SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) ON THIS ISSUE AND RESTORE THE ORDER OF THE ASSESSING OFFICER ON THIS ISSU E. 31. IN THE RESULT THIS APPEAL OF THE REVENUE IS PAR TLY ALLOWED. REVENUE'S APPEAL: IT(SS)A NO.65/HYD/2006 32. FIRST GROUND OF REVENUE IN THIS APPEAL IS WITH RE GARD TO AVAILABILITY OF CASH IN RELATION TO DEEMED DEPRECIATIO N. 33. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE LOWER AUTHORITIES. WE HAVE DEALT WITH AN IDENTICAL ISSUE WHILE DEALING WITH THE REVENUE'S APPEAL IT(SS) A NO. 49/HYD/2005 HEREINABOVE. FOR THE DETAILED REASONS DISCUSSED IN THAT BEHALF IN PARAS 10 AND 11 HEREINABOVE WHILE DECIDING THAT APPEAL W E UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE AND REJECT THIS GROUN D OF THE REVENUE 34. THE NEXT GROUND OF THE REVENUE IN THIS APPEAL RELATES TO LEVY OF SURCHARGE. 35. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF TH E APEX COURT IN THE CASE OF SURESH N.GUPTA (SUPRA). WE ACCORDINGLY HOL D THAT THE IT(SS)A NO.47/HYD/06 AND FOUR OTHERS SHRI R.LOKANADHA NAIDU TIRUPATI & 2 ORS 18 ASSESSING OFFICER IS JUSTIFIED IN LEVYING THE SURCHARGE. WE ACCORDINGLY SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) ON THIS ISSU E AND RESTORE THE ORDER OF THE ASSESSING OFFICER ON THIS ISSUE. 36. IN THE RESULT THIS APPEAL OF THE REVENUE IS P ARTLY ALLOWED. 37. TO SUM UP APPEALS OF THE ASSESSEE BEING IT(SS)A NO.47/HYD/2005 AND IT(SS) A NO.27/HYD/2006 ARE ALLOWE D; AND THE REVENUE'S APPEALS BEING NO.49/HYD/2005; 64/HYD/2006 AN D 65/HYD/2006 ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 29 OCTOBER 2010 SD/- SD/- (CHANDRA POOJARI) (N.R.S.GANESAN) ACCOUNTANT MEMBER. JUDICIAL MEMBER. DT/- 29TH OCTOBER 2010 COPY FORWARDED TO: 1. SHRI R.LOKANADHA NAIDU 19-5-5D KAKATIYA NAGAR TIRUPATI 517 501 2. ASSTT COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE TIRU PATI. 3. CIT(A) TIRUPATI 4. COMMISSIONER OF INCOME-TAX CENTRAL HYDERABAD 5. THE D.R. ITAT HYDERABAD. B.V.S.