THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, , VISAKHAPATNAM vs. ANUMOLU TIRUPATI RAYUDU(HUF),, VISAKHAPATNAM

PER BENCH:

All the three captioned appeals are filed by the Revenue against the orders of the Learned Commissioner of Income Tax (Appeals)-3, Visakhapatnam [Ld. CIT(A)] in appeal Nos.196/2017- 18/CIT(A)-3/VSP/2019-20 (ITA No.100/Viz/2020); 209/2017- 18/CIT(A)-3/VSP/2019-20 (ITA No. 102/Viz/2020) and 210/2017-18/CIT(A)-3/VSP/2019-20 (ITA No. 103/Viz/2020), dated 31/10/2019 arising out of the orders passed U/s. 143(3)

r.w.s 153A of the Income Tax Act, 1961 [the Act] for the AYs

2014-15, 2011-12 and 2012-13 respectively. Cross Objections

are filed by the assessees in connection with the appeals filed by

the Revenue. Since issues raised in these appeals are inter-

connected, for the sake of convenience, these appeals are

clubbed, heard together and disposed off in this consolidated

order. Appeal wise adjudication is given in the following

paragraphs of this order. आयकरअपीलसं./ I.T.A. No.102 & 103/Viz/2020 (�नधा�रणवष�/ Assessment Year :2011-12 & 2012-13)

orders of the Ld. CIT(A)-3, Visakhapatnam. In both the appeals,

the Revenue has raised the identical grounds and therefore for

the sake of reference, the grounds of appeal raised by the

Revenue for the AY 2011-12 are extracted herein below:

“1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in holding that no addition can be made without incriminating material U/s. 153A and thereby deleting all the addition made without going into merits of the additions. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) is failed to appreciate that assessments U/s. 153A can be concluded by making addition even without any incriminating material. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that case falls outside the purview of section 153A without taking note of the

4 decisions in the case of E.N. Gopakumar vs. CIT 390 ITR 131 (Kerala HC) and GMR energy Ltd (Karnataka HC) (ITA No. 358 of 2018). 4. Any other ground of appeal that may be raised at the time of hearing.”

Warehousing Pvt Ltd., Visakhapatnam – engaged in the business

of warehousing filed its return of income for the AY 2011-12 on

28/09/2011 declaring a total income of Rs. 21,29,680/-. The

Directors of the assessee company are Sri A. T. Rayudu and Sri

A. Avnash who hold each 45% of share holding in the company.

The case was selected for scrutiny and the assessment was

completed U/s. 143(3) on 28/02/2014 and the income was

determined at Rs. 40,12,785/- and a tax demand of Rs.

2,00,310/- was raised. Thereafter, a search and seizure

operations U/s. 132 of the Act were conducted on 14/10/2015 in

the case of the assessee and also in the case of Sri A.T. Rayudu,

Smt. Ammaji, Sri A. Avnash and Smt. A. Harshitha

simultaneously. During the search proceedings certain

documents and loose sheets were found and seized and tagged as

Annexure No. A/ATR/PO/Res/1 etc. Accordingly, notice U/s.

153A was issued to the assessee on 18/07/2016 which was

served on 20/07/2016 and called for filing of the e-return of

5 income for the AY 2011-12. In response, the assessee vide its

letter dated 26/07/2016 stated that the income filed U/s. 139 on

28/09/2011 may be treated as return filed in response to the

notice U/s. 153A of the Act. Again the assessee was asked to file

its return of income U/s. 153A electronically and submit a copy

accordingly the assessee filed its return of income U/s. 153A

electronically without any changes prior to and after the search

operations. Thereafter, notice U/s. 143(2) was issued and served

on the assessee on 26/6/2017 in response to which the

assessee’s representative furnished details of computation of

income. Subsequently notice U/s. 142(1) issued on 21/7/2017

called for copies of financial statements, books of account, bank

account statements, Wealth Tax return, details of TDS etc., and

the assessee furnished the required details.

that during the year the assessee company availed a loan of Rs.

60 lakhs from M/s. Fulfil Vinmay Pvt Ltd, Kolkata and the

assessee was asked to furnish the details of loan creditors and

the confirmation letter in support the loan taken by the assessee.

In this regard after considering the submissions of the assessee

and explanation given thereto, the Ld. AO came to a conclusion

6 that the enquiries conducted by the Department during the post

search and seizure proceedings, M/s. Fulfil Vinmay Pvt Ltd is

involved in providing accommodation entries in the guise of

unsecured loans etc., and therefore held that the transaction of

the assessee company with M/s. Fulfil Vinmay Pvt Ltd is not a

genuine transaction and consequently, the sum of Rs. 60 lakhs

appearing in the books of account of the assessee under the head

unsecured loan, was treated by the Ld. AO as unexplained cash

credit U/s. 68 of the Act and added the same to the total income

of the assessee.

assessee claimed Rs. 56,34,856/- as finance charges payable to

M/s. Shriram Transport Finance Co., Ltd and no tax U/s. 194A

was deducted thereon. Since the assessee could not furnish the

hire purchase agreement copy to the Ld. AO, the Ld. AO came to

the conclusion that the finance charges are not allowable U/s.

40(a)(ia) of the Act since no tax was deducted U/s. 194A of the

Act and accordingly, the Ld. AO disallowed the expenditure

claimed at Rs. 56,34,856/- and added back to the total income of

the assessee.

7 6. The Ld. AO also made disallowance U/s. 14A of the Act to

the extent of Rs.19,27,456/- having not satisfied with the

assessee’s explanation that though the assessee made

investments in certain companies which was made in the earlier

years and no dividend was received during the year and no

expenditure was incurred either.

from other sources. In this regard the Ld. AO noted that M/s.

Usha Tubes & Pies Ltd (herein after referred as “UTPL”) made

certain payments to the assessee company though the said

company but did not declare any dividend during the year. It is

the view of the Ld. AO that since M/s. UTPL is not engaged in the

business of money lending, wherein the assessee company is

holding 90% of the shares of M/s. UTPL, any sums advanced /

lent to its shareholders either directly or indirectly, it would

attract the provisions of section 2(22)(e) and such sums in the

hands of the shareholder shall be treated as deemed dividend.

disallowing the interest paid to bank by holding that the

advances taken by the assessee are not related to the business

activity carried out by the assessee and therefore interest paid to

8 bank relatable to such interest free advances is not allowable

U/s. 36(1)(iii) of the Act.

143(3) r.w.s 153A of the Act and computed the tax payable under

the normal provisions at Rs. 60,00,711/- and Rs. 64,36,887/-

under the MAT provisions vide his order dated 29/12/2017.

appeal before the Ld. CIT(A)-3, Visakhapatnam by agitating that

since the notice issued by the Ld. AO u/s. 153A is perverse in

law as no incriminating material was found during the course of

search and therefore the assessment made pursuant to section

153A is not justified. Before the Ld. CIT(A), the assessee also

raised grounds against the additions made by the Ld. AO.

and consequent to assessment proceedings, called for the remand

report from the Ld. AO. On perusal of the Remand Report as well

as the Rejoinder of the assessee, the search conducted by the Ld.

Revenue Authorities is held to be valid and following assessment

proceedings were also held valid by the Ld. CIT(A). Accordingly,

9 the Ld. CIT(A) rejected the assessee’s grounds of appeal on these

issues.

basis of the seized material, in the absence of any incriminating

material found during the search and seizure action 132 of Act,

the Ld. CIT(A) held that since the Ld. AO made additions on the

basis of the details sought / filed by the assessee during the

course of assessment proceedings and the examination of the

accounts of the assessee. The Ld. CIT (A) held that the additions

are not based on seized material which is not denied by the Ld.

AO in his remand report. Accordingly, the Ld. CIT(A) held that

the additions made by the Ld. AO are not warranted and granted

relief to the assessee in respect of the grounds raised by the

assessee on this issue.

appeal before the Tribunal by raising the above mentioned

grounds of appeal.

argued that the Ld. CIT(A) is not justified in holding that no

additions can be made without incriminating material U/s. 153A

10 ignoring the fact that the assessments U/s. 153A can be

concluded by making additions even without any incriminating

material. Ld. DR further submitted that during the search

proceedings certain documents and loose sheets were found and

seized and hence no incriminating material found in the case of

the assessee is contrary to the facts on record and not acceptable

in law. The Ld. DR strongly relied on the judgment of the Hon’ble

Kerala High Court in the case of E.N. Gopakumar vs. CIT

(Central) reported in [2016] 75 taxmann.com 215 wherein it was

held that the assessment proceedings generated by issuance of

notice under section 153A(1)(a) can be concluded against interest

of assessee including making additions even without any

incriminating material being available against assessee in search

under section 132 on basis of which notice was issued under

section 153A(1)(a)- Held (yes).” The Ld. DR also relied on certain

other decisions viz., (i) CIT vs. ST. Francis Clay Décor Tiles

reported in [2016] 70 taxmann.com 234 (Kerala); (ii) Judgment of

the Hon’ble Andhra Pradesh High Court in the case of Gopal Lal

Bhadruka vs. DCIT reported in [2012] 27 taxmann.com 167

(Andhra Pradesh); (iii) Judgment of the Hon’ble Supreme Court in

the case of Pr. CIT vs. NRA Iron & Steel (P.) Ltd reported in

[2019] 103 taxmann.com 48 (SC) in support of his argument. Ld.

11 DR further submitted that the Hon’ble Supreme Court in the case

of Pr. CIT vs. Devangi Alias Rupa [2017] 397 ITR (Stat) 36B

granted leave to the department to appeal against the judgment

of the Hon’ble Gujarat High Court in T.A. No. 54 of 2017 reported

in 394 ITR 183. The Ld. DR also submitted that the Hon’ble

Supreme Court in the case of CIT vs. Kabul Chawla [2016] 380

ITR 573 (Delhi) has granted leave to the Department to appeal

against the judgment reported in 397 ITR (St.) 9-Ed. Therefore

the Ld. DR pleaded the order of the Ld. CIT(A) in deleting the

additions made by the Ld. AO may be set-aside and prayed for

restoring the order of the Ld. AO.

AR] argued that the reopening of assessment for the AY 2011-12

u/s. 153A is unwarranted as there is no incriminating material

found against the assessee at the time of search pertaining to the

relevant assessment year. The Ld. AR further submitted that it is

a settled law in the absence of any incriminating material found

during the search and seizure action u/s. 132 of the Act where

the assessment are completed additions cannot be made. He

further submitted that the alleged incriminating material found

by the AO was already on record at the time of scrutiny

12 assessment under section 143 of the Act and the Ld.AO passed

order U/s. 143(3) after elaborating of such material. The Ld. AR

further submitted that the assessment in the case of the assessee

having attained finality should not have abated and thus the

assessment made by the Ld. AO u/s. 153A is not valid in law.

The Ld. AR further submitted that after considering these facts

and circumstances and on perusal of the submissions of the

assessee as well as the remand report from the Ld. AO, the Ld.

CIT (A) held that the additions made by the Ld. AO are not

warranted and accordingly granted relief to the assessee. The Ld.

AR therefore pleaded that the decision taken by the Ld. CIT (A) is

in accordance with law and need not be disturbed.

the additions made in the assessment U/s. 143(3) r.w.s 153A in

the absence of any incriminating material found during the

search and seizure operations. It is an undisputed fact that in

the case of the assessee the assessment was completed U/s.

143(3) of the Act on 28/02/2014 and the income was determined

at Rs. 40,12,785/- and raised a demand of Rs. 2,00,310/-.

Thereafter, consequent to the search and seizure operations u/s.

132 of the Act the Ld. AO issued notices U/s. 153A of the Act and

13 passed assessment order U/s. 143(3) r.w.s 153A of the Act on

29/12/2017 wherein the Ld. AO made certain additions. On

appeal, the Ld. CIT(A) deleted the additions by holding that since

the additions made by the Ld. AO in the order passed U/s. 143(3)

r.w.s 153A are not based on the incriminating material found

during the search, the additions are not warranted. It is a settled

law in the absence of any incriminating material found during the

search and seizure action u/s. 132 of the Act where the

assessment are completed additions cannot be made. In the

present case the assessment is non-abated as the assessment by

Ld AO was completed U/s. 143(3) on 28/02/2014, much before

the date of search operations, by raising a demand. Further, if at

all any additions to be made after search and seizure operation in

the assessment U/s. 153A, there should be incriminating

material detected during search that supports the addition(s). In

the instant case the alleged incriminating material found by the

Ld. AO during the search was already on record at the time of

scrutiny assessment under section 143 of the Act and the Ld. AO

passed order U/s. 143(3) after elaborating of such material.

Therefore, since the assessment in the case of the assessee

having attained finality should not have abated and thus the

assessment cannot be made by the Ld. AO u/s. 153A. It is

pertinent to mention here on a similar issue the Hon’ble Delhi High

Court in the case of CIT Vs Kabul Chawla reported at (2016) 380 ITR 573

held as under:

''The legal position that emerges on a perusal o f section 153A and section 132 of the Income-tax Act, 1961, is as under :

(i) Once a search takes place under section 132 o f the Act, notice under section 153A(1) will have to be mandatorily issued to the person in respect of whom search was conducted requiring him to file returns for six assessment years immediately preceding the previous year relevant to the assessment year in which the search takes place.

(ii) Assessments and reassessments pending on the date of the search shall abate . The total income for such assessment years will have to be computed by the Assessing Officers as 41 afresh exercise.

(iii) The Assessing Officer will exercise normal assessment powers in respect of the six years previous to the relevant assessment year in which the search takes place. The Assessing Officer has the power to assess and reassess the "total income" of the six years in separate assessment orders for each of the six years. In other words, there will be only one assessment order in respect of each of the six assessment years in which both the disclosed and the undisclosed income would be brought to tax.

(iv) Although section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Assessing Officer which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. Obviously, an assessment has to be made under this section only on the basis of the seized material.

(v) In the absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word "assess" in section 153A is relatable to abated proceedings (i.e ., those pending on the date of search) and the word "reassess " to completed assessment proceedings.

(vi) Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under section 153A merges into one. Only one assessment shall be made separately for each assessment year on the basis of the findings of the search and any other material existing or brought on the record of the Assessing Officer.

(vii) Completed assessments can be interfered with by the Assessing Officer while making the assessment under section 153A only on the basis

15 of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.” 17. It has further been held that: “On the date of the search the

assessments already stood completed. Since no incriminating material

was unearthed during the search, no additions could have been made to

the income already assessed."

Ltd the Hon’ble Delhi High Court has observed that though some of the

judgments of this court have been challenged and are pending

adjudication before the Supreme Court, yet there is no stay of the said

judgments till date. This means to say that till date the ratio laid down

and the view taken by the Hon’ble Delhi High Court in the case of CIT vs.

Kabul Chawla (supra) holds good.

Bench of the Tribunal in the case of M/s. Arihant Universal Realty Pvt.

Ltd.,vs. DCIT reported in [2022] 141 taxmann.com 249 (Mumbai – Trib),

dated 5/4/2022 held that “……the assessment framed U/s. 143(1) of the

Act for the AY 2009-10, which was unabated/concluded assessment, on

the date of search, deserves to be undisturbed in the absence of any

incriminating material found in the course of search and accordingly, the

16 disallowances/additions made thereon are hereby directed to be

deleted...”

Gopakumar vs. CIT (Central) (supra) relied on by the Ld. DR is

distinguishable on facts as the issue involved in the case is with regard

to (i) issuance of notice u/s. 153A(1)(a); and (ii) whether additions can be

made without any incriminating material being available against the

assessee in search u/s. 132 on the basis of which the notice was issued

U/s. 153A(1)(a). In the instant case, the incriminating material found

by the AO was already on record at the time of scrutiny

assessment and passed order U/s. 143(3). Therefore, the Ld.

DR’s argument cannot be accepted.

facts and circumstances of the case and the judicial precedents on the

issue, we are of the considered view that the additions made by the Ld.

AO in the order passed U/s. 143(3) r.w.s 153A of the Act in the absence

of any incriminating material while framing the assessment u/s 153A of

the Act was not valid since the assessment made by the Ld. AO u/s.

143(3) was unabated/concluded assessment. Considering the same, the

Ld. CIT(A) has rightly deleted the additions made by the Ld.AO.

17 Therefore we do not find any infirmity in the order of the Ld. CIT(A) while deleting the additions made by the Ld. AO and no interference is required on this issue.

2011-12 (ITA No. 102/Viz/2020) mutatis mutandis applies to the Revenue’s appeal for the AY 2012-13 also. It is ordered accordingly.

C.O. No. 28 & 29/Viz/2021 (In आयकरअपीलसं./ I.T.A. No.102& 103/Viz/2020) (�नधा�रणवष�/ Assessment Year :2011-12 & 2012-13)

adjudication of the cross objections raised by the assessee

becomes infructuous. It is ordered accordingly.

dismissed as infructuous.

आयकरअपीलसं./ I.T.A. No.100/Viz/2020 (�नधा�रणवष�/ Assessment Year :2014-15)

CIT(A)-3, Visakhapatnam.

of appeal:

“1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition U/s. 68 of the Act without appreciating the fact that the basic tenets for satisfying genuineness of the cash credits, being identify, creditworthiness of the lenders and genuineness of the transaction are cumulative and not isolated ie all three need to be satisfied. 2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was justified in deleting the disallowance of agricultural income added as income from other sources, even though the assessee failed to produce any evidence regarding agricultural activity. 3. Any other ground of appeal that may raise at the time of hearing.” Brief facts of the case are that the assessee is deriving 28.

income from business, house property, other sources and

19 agricultural income. The assessee has filed its return of income

for the AY 2014-15 on 19/06/2015 declaring a total income of

Rs. 8,96,720/- and an agricultural income of Rs. 5,14,000/-. A

search and seizure operation U/s. 132 of the Act was conducted

on 14/10/2015 in the case of the assessee, Sri A.T. Rayudu,

Smt. Ammaji, Sri Avnash, Smt. A Harshita and M/s. ATR Ware

Housing Pvt Ltd, Visakhapatnam simultaneously. During the

course of search and seizure proceedings, certain documents and

loose sheets were found and seized. A notice U/s. 153A of the

Act dated 18/7/2016 was served on the assessee. In response to

the said notice, the assessee vide its letter dated 26/07/2016

stated that the return of income filed u/s. 139 on 19/6/2015 be

treated as the return filed in response to the notice U/s. 153A.

Further, notice U/s. 143(2) and 142(1) of the Act were issued and

served on the assessee called for certain information and to

furnish books of accounts, details of agricultural income, details

of shares held by the appellant in listed and unlisted companies

along with companies of D-mat account, confirmation letters in

respect of unsecured loans taken from the persons as per the

pages 139 and 141 of the seized material marked as

Annexure/A/ATR/PO/Res/1 etc. During the assessment

proceedings, the Ld. AO enquired as to why the sum Rs. 2 Crs

20 appearing as “sundry creditors” should not be regarded as non-

genuine transaction and thus, be treated as unexplained cash

credit under section 68 of the Act. In response the assessee, in

addition to detailed submissions has also submitted the

confirmation letters from the respective creditors. Not satisfied /

convinced with the submissions of the assessee, the Ld. AO made

addition of Rs. 2 Crs treated the same as unexplained cash credit

u/s. 68 of the Act and also disallowed a sum of Rs. 1,28,500/-

being 25% of the agricultural income claimed at Rs. 5,14,000/-.

Thus, the Ld. AO determined the total income at Rs.

2,10,25,220/- by making addition aggregating to

Rs.2,01,28,500/-. Aggrieved by the order of the Ld. AO, assessee

went on appeal before the Ld. CIT(A).

of the assessee and discussing the issues at length, granted

partial relief to the assessee. Aggrieved by the order of the Ld.

CIT(A), the Revenue is in appeal before the Tribunal by raising

the above mentioned grounds of appeal.

argued that the Assessing Officer has requested for a detailed

reply from the assessee regarding the genuineness and

21 creditworthiness of the lenders as detailed in page 23 of the

order. However, the Ld. DR contended that the assessee

furnished only part information. The Ld. DR also further

submitted that interest rate charged by the lenders ie., 3% per

annum and not acceptable and comparatively low when compared

to the prevailing market rates. The Ld. DR relied on the

judgment of the Hon’ble Supreme Court in the case of PCIT v. NRA

Iron & Steel Pvt. Ltd reported in (2019) 412 ITR 161 /103 taxmann.com

48 (SC). The Ld. DR pleaded that the order of the Ld. AO be

upheld.

argued that the interest is not 3% per annum as submitted by

the Ld. DR but that 3% of interest is paid out of the books of

account whereas the interest of 9% which was subject to

deduction of TDS and accounted in the books of accounts. Thus,

the assessee paid total interest @ 12% per annum [9% + 3% ].

The Ld. AR further submitted that the Ld. AO on ad-hoc basis

disallowed a sum of Rs. 1,28,500/- from the agricultural income

claimed by the assessee amounting to Rs. 5,14,000/-. The Ld.

AR pleaded that without any basis the Ld. AO has disallowed the

22 sum and hence shall be allowed. The Ld. AR therefore pleaded

the order of the Ld. CIT(A) be upheld.

available on record and also the orders of the Ld. Revenue

Authorities. In the present case, facts remain that the assessee

has taken an unsecured loan for Rs. 2 Crs but has paid interest

@ 9% through books of accounts and subjected it to Tax

Deduction at Source but however, paid an additional interest @

3% per annum outside the books of accounts by way of cash.

The Ld. AO has not disputed the payment of interest of 9% made

to the same lenders which is accounted in the books of accounts.

We therefore find that the loan taken by the assessee cannot be

considered as non-genuine as a part of the interest payments are

routed through books of accounts. It is also observed from the

loose sheets seized during the survey an additional amount of 3%

of interest per annum was paid to the lenders. The Ld. CIT(A) in

his order has observed as detailed below:

“6.2.5. The discussions above bring out the following conclusions:

A) After this detailed examination of the entries in the loose sheets at the time of search, it is concluded that the same is an account of the interest receivable on monies lent to the assessee group / individuals. The mentioning of the correct names of the lenders and the

23 amounts lent and the date of lending, all go to show that the transactions with the lenders are that of the loan that is taken and interest paid / computed annually. The assessee group has effected Tax Deducted at source on the interest wherever statutorily required and the same is mentioned in the tabulations at the summary. This also fortifies the claim of the assessee that the transactions are genuine and no a sham.

B) It is the case of the Assessing Officer that the Assessee Group have routed their own cash through various companies and has brough in the same through fictitious lenders. A careful and detailed analysis of the seized materials has not shown that the assessee group has paid cash to the extent of the loans received. In fact the seized materials themselves demonstrate and record that the assessee group has been paying interest both through normal banking channels, some by deducting Tax at source and also by cash.

This fact stand to prove the case of the assessee group and fortifies their claim of the genuineness of the borrowings.

C) More importantly, the search has brought out the true nature of the transactions. Cash and every document in the possession of the assessee has been examined at the time of search and during the assessment proceedings. There is no evidence that there was cash payment of the principal amounts borrowed. The seized materials at pages 139 to 141 of Annexure/A/ATR/PO/Res/1 and pages 135, 136, 137 to 141 of A/ATR/PO Res 5, that have been analysed herein above, in minute detail, have shows that the assessee group has made payment of interest and principal and has not received back the cash as sough to be made out by the Assessing Officer. This is a question of fact that stands in favour of the assessee group. If it were to be the monies of the assessee that was routed back to them through the lenders, than the payment of interest for one’s own monies would not arise.

24 There being no cash trail found leading back to the assessee group and instead there being seized material to show that interest has been apid and demanded by the lenders, calculated on a day to day accuracy, the same vindicates the stance of the assessee that these are genuine business loans.

D) In view of the above, the addition made is not warranted and the same is deleted. The ground is allowed.”

paying interest through normal banking channels after deducting

tax at source and also by way of cash. At the cost of repetition,

we once again find that the claim of the assessee regarding

genuineness of the borrowings has a true nature of the

transactions, since part of the interest is paid through banking

channels and was also subjected to deduction of tax at source.

We are of the considered view that no interference is therefore

required in the order of the Ld. CIT(A) with regard to addition

U/s. 68, raised in Ground No.1, and therefore we are inclined to

dismiss this ground raised by the Revenue.

No.2) as unexplained, the assessee has produced the land

records with the survey numbers and the details of crops and the

total yielding. It was further submitted that in the assessee’s

25 own case for the earlier years the ITAT, Visakhapatnam in their

order in ITA No. 325 to 331/Viz/2014, dated 10/07/2014 has

directed the Ld. AO to disallow 25% of the agricultural income

offered in the returns of income for the said assessment years.

The Ld. AO has followed the same for the impugned assessment

year without assigning any reasons and without considering the

facts and circumstances for the impugned assessment year. The

Ld. CIT(A) has therefore rightly concluded that the addition made

by the Ld. AO is without any basis and without bringing the facts

and circumstances on record. Therefore, we are of the considered

view that the Ld. CIT(A) has rightly deleted the addition and

therefore no interference is required in the order of the Ld.

CIT(A). Accordingly, Ground no.2 raised by the Revenue is

dismissed.

adjudication.

26 C.O. No. 26/Viz/2021 (In आयकरअपीलसं./ I.T.A. No.100/Viz/2020) (�नधा�रणवष�/ Assessment Year :2014-15)

Pronounced in the open Court on the 21st December, 2022.

Sd/- Sd/- (दु�वू�आर.एलरे�डी) (एसबालाकृ�णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) �या�यकसद�य/JUDICIAL MEMBER लेखासद�य/ACCOUNTANT MEMBER Dated : 21.12.2022 OKK - SPS

27 आदेशक���त�ल�पअ�े�षत/Copy of the order forwarded to:- �नधा�रती/ The Assessee–Shri Anumolu Tirupati Rayudu (HUF), 1. D.No. 11-8-34, Daspalla Hills, Visakhapatnam, Andhra Pradesh- 530002. (ii) M/s. ATR Warehousing (P) Limited, D.No. 11-8-34, Daspalla Hills, Visakhapatnam, Andhra Pradesh-530002. राज�व/The Revenue –The Deputy Commissioner of Income Tax, 2. Central Circle-2, D.No. 11-8-34, Daspalla Hills, Visakhapatnam, Andhra Pradesh – 530002. 3. The Principal Commissioner of Income Tax (Central), Visakhapatnam. आयकरआयु�त (अपील)/ The Commissioner of Income Tax (Appeals)-3, 4. Visakhapatnam. �वभागीय��त�न�ध, आयकरअपील�यअ�धकरण, �वशाखापटणम/ DR,ITAT, 5. Visakhapatnam गाड�फ़ाईल / Guard file 6. आदेशानुसार / BY ORDER

Sr. Private Secretary ITAT, Visakhapatnam