THE ASSISTANT COMMISSIONER OF INCOME TAX(INTERNATIONAL TAXATION),, VISAKHAPATNAM vs. VITTALAM NATARAJ PRASAD, TIRUPATI

PER S. BALAKRISHNAN, Accountant Member :

The captioned appeals are filed by the Revenue and the Cross Objections are filed by the two assessees (Sri Vittalam Nataraj Prasad and Smt. Nallamilli Sri Devi). Since some of the issues raised by the Revenue in their appeals are identical as well as the cross objections raised by the assessee are interconnected with the appeals of the Revenue, all these appeals are clubbed, heard together and disposed off in this consolidated order. Appeal wise adjudication is given in following paragraphs of this order.

ITA No. 247/Viz/2020 (AY: 2014-15) (By Revenue)

Commissioner of Income Tax (Appeals)-10, Hyderabad [CIT(A)] in DIN &

Order No. ITBA/APL/S/250/2020-21/1028055116(1), dated

24/09/2020 arising out of the order passed U/s. 143(3) of the Income

Tax Act, 1961 [the Act] for the AY 2014-15.

resident filed his return of income electronically on 16/11/2014 for the

AY 2014-15 admitting the total income of Rs. 52,81,470/-. Subsequently

a revised return of income was filed on 24/1/2016 declaring a total

income of Rs. 64,69,210/-. Subsequently, the case was selected for

scrutiny and a notice U/s. 143(2) was issued to the assessee on

26/7/2016 by ACIT, Circle-2(1), Tirupati. Subsequently the case was

transferred from ACIT, Circle-2(1), Tirupati to DCIT, International

Taxation, Visakhapatnam. A notice U/s. 142(1) was issued on 8/9/2016

posting the case on 15/9/2016. The assessee’s Authorized

Representative Sri C.P. Rambabu, Income Tax Practitioner appeared on

15/9/2016 and furnished the information as required by the Ld. AO.

Subsequently, the assessee along with the Authorized Representative

appeared and furnished the information called for by the Ld. AO from

time to time. On verification of the return of income and the information

furnished by the assessee, the Ld. AO noticed that the assessee is

working as an Assistant Professor, International Society Medical

Education Pvt Ltd., Nepal. The Ld. AO required the assessee to furnish

proof in support of interest on housing loan, interest on Secured

Overdraft (SOD) and confirmation letter from Smt. Nallamilli Sri Devi

towards loan given by the assessee. Further, the Ld. AO also requested

the assessee to furnish the sources for increase in capital, properties

purchased, investments, loans and advances during the FY 2013-14 and

also asked to furnish the sources towards cash deposits in bank

accounts. In response the Assessee’s Representative furnished the

copies of the housing loan maintained at Andhra Bank, Tirupati. The Ld.

AR submitted that the loans were claimed as expenditure as the loan is

utilized for personal purposes. On verification of the bank accounts

submitted by the assessee, the Ld. AO noticed that there is a huge

amount of cash deposits in bank accounts and on request the assessee

furnished the sources for all cash deposits made in the bank account.

Further, the Ld. AO also requested the assessee to submit the proof of

salary receipt from Nepal for Rs. 2.16 Crs. The Ld. AO also requested the

assessee to submit type of currency paid during the FY 2013-14 for

transfer of such amount from Nepal to India. In response, the Ld. AR

submitted that the assessee was drawing the salary of Rs. 2.16 Crs from

ISME Medical College, Nepal. The Ld. AR further submitted that the

salary has been drawn at Nepal in cash in Indian Currency and

deposited in India. The Ld. AO by invoking the provisions of Foreign

Exchange Management (Export and Import of Currency) Regulations,

2000 issued by the Reserve Bank of India vide Notification No. FEMA

6/RB-2000, dated 3rd May, 2000 found that the Indian Currency cannot

be brought from Nepal in Denominations of above Rs. 100/-. In view of

the restrictions of by the Exchange Management (Export and Import of

Currency) Regulations, 2000, a show cause notice dated 15/12/2016

was issued calling for explanation from the assessee. In response the Ld.

AR of the assessee submitted that out of the consolidated salary received

by the assessee in Nepal which is already taxed in Nepal has been

brought into India and deposited in various bank accounts in India in

assessee’s account. The Ld. AO considered the explanation of the

assessee is not in accordance with the Exchange Management (Export

and Import of Currency) Regulations, 2000 and treated the cash deposits

made by the assessee in India as income from other sources. Further,

the Ld. AO also added an amount of Rs. 33,60,000/- by way of cheque

into the assessee’s bank account and since no explanation was offered by

the assessee, Ld. AO added the same to the assessee’s total income.

Further, the Ld. AO on verification of the Balance Sheet furnished by the

assessee treated the amount of Rs. 40,568/-, the difference between the

actual amount received from the students and the amount disclosed in

the balance sheet, as income of the assessee which was not disputed by

the assessee. Further, the Ld. AO also made addition of Rs.

1,49,68,154/- since the assessee failed to explain the sources for the

excess amount of unexplained deposits in the bank account of the

assessee. aggrieved by the above additions, the assessee filed an appeal

before the Ld. CIT(A)-10, Hyderabad.

for the issue of notice U/s. 143(2) of the Act which was dismissed by the

Ld. CIT(A). On merits, the Ld. CIT(A) partly allowed the appeal by

confirming the additions made by the Ld. AO for Rs. 40,568/- and by

deleting the additions of Rs. 2.16 Crs; Rs. 33,60,000/- and Rs.

1,49,68,154/-. Aggrieved by the order of the Ld. CIT(A), the Revenue is in

appeal before the Tribunal.

No. 2, 3, 4 & 5 relate to deletion of addition of Rs. 2,16,00,000/-.

Grounds No.6, 7 & 8 relate to deletion of addition of Rs. 33,60,000/-.

Grounds No. 9 & 10 relate to deletion of addition of Rs. 1,49,68,154/-.

Grounds No. 1 and 11 are general grounds.

deletion of addition by the Ld. CIT(A) for Rs. 2.16 Crs.

salary income of Rs. 2.16 Crs from Nepal and has made cash deposits in

Andhra Bank, Tirupati for Rs. 2.16 Crs. The Ld. DR further submitted

that the Ld. AO has rightly invoked the provisions of Foreign Exchange

Management (Export and Import of Currency) Regulations, 2000 and has

treated the amount of Rs. 2.16 Crs as income of the assessee. He

therefore pleaded that the order of the Ld. AO be upheld.

Per contra, the Ld. AR submitted that the assessee was drawing

consolidated salary of Rs. 2.16 Crs in Nepal and has deposited the same

into the Andhra Bank, Tirupati. The Ld. AR further submitted that the

Ld. AO has not accepted the contention of the assessee that the same

income cannot be taxed once again in India in the hands of the assessee

it has already been taxed in Nepal. The Ld. AR therefore pleaded that the

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

on record and the orders of the Ld. Revenue Authorities. It is the case of

the Ld. AO that the assessee has deposited huge amount of Rs. 2.16 Crs

by way of cash into the assessee’s bank account in Andhra Bank,

Tirupati. The Ld. AO considering the provisions of Foreign Exchange

Management (Export and Import of Currency) Regulations, 2000 issued

by the Reserve Bank of India vide Notification No. FEMA 6/RB-2000,

dated 3rd May, 2000 concluded that the Indian Currency cannot be

brought from Nepal in denominations of above Rs. 100/-. For the sake

of convenience, the above regulation is reproduced below:

“In exercise of the powers conferred by clause (g) of sub-section(3) of Section 6, sub-section (2) of section 47 of the foreign Exchange Management Act 1999 (42 of 1999), the Reserve Bank makes the following regulations for export from and import into India of currency or currency notes, namely: 8. Export and import of currency to or from Nepal and Bhutan: Notwithstanding anything contained in these regulations, a persona may: i) Take or send out of India to Nepal or Bhutan, currency notes of Government of India and Reserve Bank of India notes (other than notes of denominations of above Rs. 100 in either case); ii) Bring into India from Nepal or Bhutan, Currency notes of Government of India and Reserve Bank of India notes other than notes of denominations of above Rs. 100 in either case: iii) Take out of India to Nepal or Bhutan, or bring into India from Nepal to Bhutan, currency notes being the currency of Nepal or Bhutan.” 9. The Ld. AO also in his order called for the copies of the bank

vouchers of cash deposited by the assessee and found that the cash been

deposited in high denominations of Rs. 500 and Rs. 1000. Considering

the restrictions in bringing high denomination currency from Nepal has

rightly concluded that these cash deposits are unexplained and has

rightly added to the income of the assessee. The argument of the Ld. AR

was that it was converted into low denomination currency at the

boarders of India and Nepal could not be accepted in the absence of any

valid evidence substantiating such conversion. But the Ld. CIT (A)

deleted the addition stating that the assessee has already paid taxes in

Nepal. The Ld. CIT(A) has failed to consider that Rs. 500/- and Rs.

1000/- (higher denomination notes) should not be brought from Nepal

which is a violation under FEMA regulations. Hence, the Ld. CIT(A) has

erred in deleting the additions made by the Ld. AO. We are therefore of

the considered view that the Ld. AO has rightly considered Rs. 2.16 Crs

as income of the assessee under “income from other sources” and we

therefore uphold the order of the Ld. AO on this Ground and set-aside

the order passed by the Ld. CIT(A) on this issue.

33,60,000/- by the Ld. CIT (A) for the cheque deposits made in the bank

account of the assessee. The Ld. DR submitted that these cheque

deposits were not explained before the Ld. AO and hence the Ld. AO has

rightly treated the same as unexplained income of the assessee. He

therefore pleaded that the order of the Ld. AO be upheld. Per contra, the

Ld. AR submitted that these cheque deposits are from joint account of

the assessee as per the bank statement submitted before us in the paper

book. He therefore pleaded that the order of the Ld. CIT(A) be upheld.

on record and the orders of the Ld. Revenue Authorities. The Ld. AR has

demonstrated before us regarding the cheque deposits made into the

assessee’s accounts from the joint account of the assessee along with his

wife Smt. N. Sridevi. We find from the submissions made by the Ld. AR

that these are cheque transfers either from the assessee’s own account

or from the joint account of the assessee along with his wife and we

considered the sources being properly explained by the Ld. AR.

Therefore, we find no infirmity in the order of the Ld. CIT(A) on this issue

as the Ld. CIT(A) has rightly allowed the same and therefore we do not

wish to interfere with the order of the Ld. CIT(A) on this ground. Thus,

this ground raised by the Revenue is dismissed.

1,49,68,154/- by the Ld. CIT(A) being the difference amount received

from the students on behalf of the Medical College in Nepal and the

amount transferred to the Medical College in Nepal. The Ld. DR

submitted that the assessee has made cash deposits and cheque

deposits including RTGS, NEFT transfers and has received a sum of Rs.

15,34,83,979/- in the bank account on behalf of the Medical College in

Nepal. However, the assessee has transferred only Rs. 13,85,15,825/- to

the Medical College in Nepal. Therefore, the Ld. DR submitted that the

assessee has rightly treated the difference of Rs. 1,49,68,154/- as

unexplained cash deposits and added the same to the total income of the

assessee. Therefore, the Ld. DR pleaded that the order of the Ld. AO be

upheld. Per contra, the Ld. AR submitted that this account is like a

running account and the balance amount payable to the Medical College

in Nepal has been paid in the subsequent Asst. Year. The Ld. AR further

pleaded that the above amount included cash deposits of Rs.

15,34,83,979/- which includes the salary income earned by the assessee

and deposited it to the Indian account by the assessee and hence the

telescoping benefit shall be granted to the assessee. The Ld. AR further

submitted that the benefit of telescoping for Rs. 2.16 Crs should have

been granted to the assessee as the assessee has transferred an excess

amount of Rs. 66,30,846/- to the Medical College, Nepal. He therefore

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

on record and the orders of the Ld. Revenue Authorities. Admittedly the

assessee has collected an amount of Rs.15,34,83,979/- by way of cheque

and cash deposits including bank transfers during the impugned

assessment year and has paid only Rs. 13,85,15,825/- to the Medical

College, Nepal. The Ld. AR also failed to submit the bank account of the

assessee where the cash deposits at Rs. 2.16 Crs was made by the

assessee and linking the same with the account maintained for the

purpose of collection from students for transferring it into Medical

College, Nepal. In the absence of any valid substantiating evidence, the

claim of the assessee, we are of the considered view that the Ld. AO has

rightly treated the difference amount of Rs. 1,49,68,154/- as the income

of the assessee and the benefit of telescoping shall not be granted to the

assessee. Therefore we are not inclined to uphold the order of the Ld.

CIT(A) on this issue and allow the ground raised by the Revenue.

not be adjudicated.

C.O. No.14/Viz/2021 (AY: 2014-15) (By Assessee - Sri Vittalam Nataraj Prasad)

Objection:

“1. The order of the Ld. CIT(A)-10, Hyderabad insofar as it is against the respondent / cross objector is opposed to law, facts, equity and weight of evidence and circumstances of the case.

The main issue raised by the assessee in its cross objection is with 17.

respect to validity of issuance of notice U/s. 143(2) of the Act for the

purpose of making assessment U/s. 143(3). The other grounds raised by

the assessee are in supportive nature of the decision of the Ld. CIT (A).

the facts are that the assessee filed its return of income on 16/11/2014

belatedly where the due date of filing of the return of income for the AY

2014-15 is 31/08/2014. Subsequently, the assessee revised the return

of income on 24/1/2016. The notice U/s. 143(2) was issued on

26/7/2016.

16/11/2014 was filed belatedly it is prohibited to file the revised return

U/s. 139(5) of the Act for belated return. The Ld. AR therefore submitted

that belated return is non-est in the eyes of law and assessment cannot

be made based on the revised return filed on 24/1/2016. The Ld. AR

further argued that notice U/s. 143(2) should have been issued on or

before 30/09/2015 and hence the notice issued U/s. 143(2) on

26/7/2016 is not valid in law. Further, the Ld. AR also submitted that

initially as per the notice issued u/s. 143(2) the case was selected for

limited scrutiny for examining of interest expenses and unsecured loans.

The Ld. AR further submitted that the Ld. Assessing Officer has travelled

beyond the limited scrutiny and hence the assessment order was passed

U/s. 143(3) of the Act is not valid in law. Further, the Ld. AR also

submitted that notice U/s. 143(2) was issued by ITO, Circle-2(1), Tirupati

where the assessment was completed by the DCIT (International

Taxation), Visakhapatnam. The Ld. AR further submitted that no fresh

notice U/s. 143(2) was issued by the Ld. DCIT (international taxation),

Visakhapatnam. The Ld. AR further submitted that this issue was raised

before the Ld. CIT(A) but not before the Ld. AO. The Ld. AR accepted

that the assessee participated in the assessment proceedings. The Ld.

AR therefore pleaded that the scrutiny assessment order passed U/s.

143(3) of the Act is invalid in law and shall be quashed. The Ld. AR relied

on the decision of the Hon’ble ITAT, Visakhapatnam Bench in ITA No.

602/Viz/2019 in the case of D. Ushareddy vs. ITO.

Per contra, the Ld. DR submitted that the assessee’s return of

income can be treated as modified return and not as a revised return.

Further, the Ld. DR submitted that the assessee’s case was selected for

complete scrutiny and not for limited scrutiny as per the screen shot

submitted before the Bench. The Ld. DR further submitted that as per

section 143(2) of the act, any return furnished U/s. 139 or in response to

a notice U/s. 142(1) can be taken up for scrutiny. The Ld. DR further

submitted that the assessee has not raised any objection before the

Ld.AO and has participated in the assessment proceedings.

on record and the orders of the Ld. Revenue Authorities. We find from

the screen sheet submitted by the Ld. DR that it is a complete scrutiny

and not a limited scrutiny. Merely, by mentioning a heading “limited

scrutiny” in the issuance of notice U/s. 143(2) of the Act does not convert

the proceedings into a limited scrutiny assessment. Further, we find

that the assessee has voluntarily filed revised return on 24/1/2016

revising the original return filed belatedlyon 16/11/2014. In this

connection, the provisions of section 143(2) of the Act are relevant to

extract here which reads as under:

“Sec, 143(2): Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under- paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein,…………”

filed u/s. 139 or in response to a notice U/s. 142(1) of the Act can be

selected for a scrutiny within six months from the end of the assessment

year in which the return was filed by the assessee. Therefore, the

issuance of notice U/s. 143(2) dated 24/1/2016 by the Ld. AO is well

within the limits prescribed and hence the valid notice. It was also

admitted by the Ld. AR that the assessee has participated in the

assessment proceedings who has challenged only before the Ld. CIT(A).

The Ld.CIT(A) has rightly dismissed the legal ground raised by the

assessee. Reliance placed by the Ld. AR in the case of D. Ushareddy is

distinguishable on the fact that in that case the file was transferred from

a non-jurisdictional Assessing Officer, who has issued notice U/s. 143(2),

to a jurisdictional Assessing Officer. Further, the jurisdictional Assessing

Officer has not issued a fresh notice U/s. 143(2) of the Act. The assessee

has also participated in the proceedings before the jurisdictional

Assessing Officer without objecting to the non-issuance of notice U/s.

143(2) of the Act as prescribed U/s. 124(3A) of the Act. In the instant

case, since the assessee is a non-resident Indian, the case was

transferred to the DCIT (International Taxation), Visakhapatnam and

therefore the case relied upon by the Ld. AR is of no help to the assessee.

In the light of the above facts, we are of the considered view that this

legal ground raised by the assessee in his cross objection is dismissed.

and therefore they need not be adjudicated.

ITA No. 01/Viz/2021 (AY: 2015-16) (By Revenue)

10, Hyderabad in DIN & Order No. ITBA/APL/S/250/2020-

21/102815937, dated 07/10/2020 arising out of the order passed U/s.

143(3) of the Act dated 31/3/2017 for the AY 2015-16.

Grounds No.2, 3, 4, 5 are with respect to deletion of addition towards

cash deposits in bank accounts of Rs. 2,16,00,000/-. Grounds No. 6, 7 &

8 with respect to deletion of addition towards interest expenditure of Rs.

27,23,730/-. Grounds No.9, 10 & 11 relate to deletion of addition

towards interest income from savings bank accounts of Rs. 11,65,279/-.

Ground No.12 is a general ground.

raised by the Revenue in its appeal ITA No. 247/Viz/2020 for the AY

2014-15. While adjudicating the Revenue’s appeal ITA No.247/Viz/2020

in the above paragraphs of this order, we have discussed the issue at

length and held that since the Ld. AO has rightly considered Rs. 2.16

Crs as income of the assessee and we therefore uphold the order of the

Ld. AO on this Ground and quash the order of the Ld. CIT(A) on this

issue. Since the facts and circumstances of the issue are identical, our

decision given on these grounds (2,3,4 & 5) of the Revenue’s Appeal in

ITA No. 247/Viz/2020 mutatis mutandis applies to the instant grounds

also. Accordingly, these grounds raised by the Revenue are allowed.

interest payment of Rs. 27,23,730/- the Ld. AR submitted that the

assessee has taken a secured over draft (SOD) from Andhra Bank,

Tirupati and has paid interest on the same for the overdraft availed

during the impugned assessment year. The Ld. AR further submitted

that it is like a running current account and the credits in the SOD

account will automatically take care of the interest payments. He

therefore pleaded that the order of the Ld. CIT (A) be upheld. Per contra,

the Ld. DR submitted that the assessee has not paid the interest to the

bank and hence the Ld. AO has rightly disallowed the same. He pleaded

that the order of the Ld. AO be upheld.

on record and the orders of the Ld. Revenue Authorities. From the

submissions of the Ld. AR we find that the assessee has taken a SOD

facility from Andhra Bank, Tirupati for the purpose of construction of a

house. The SOD account is like a running current account of the

assessee where the amounts credited into the SOD is adjusted against

the interest in the overdraft account. We also find merit in the argument

of the Ld. AR that whenever the amount exceeds the credit balance

available in the account, it becomes an overdraft account for a short

period until credits into the accounts are made by the assessee to

regularize the overdraft facility. The Ld. CIT (A) in para 13.2 has rightly

considered the same and held as follows:

“13.2. I have considered the submission made by the appellant and I am of the opinion that the amount of interest, which was charged by the Andhra Bank, Tirupati Branch, on the short term overdraft (SoD) Account No. 003330100005862, is a running account of the appellant, the amount which are credited is adjusted against the interest in the overdraft accounts or from the undisclosed sources, the amount which is out of the books of accounts or from the undisclosed sources, the amount which is debited to the account is accounted in the bank statement, the addition made by the AO only on the basis that the amount is not reflected in the books of accounts. As rightly pleaded by the appellant, the AO has not brought on record any evidence that the amount is paid out of undisclosed income. The recording of these transactions in the books of accounts is more a matter of form, rather than substance. The addition does not stand on merits and hence the Ground of appeal raised by the appellant is allowed.”

payment and we do not find any infirmity in the order of the Ld. CIT(A)

on this ground and hence the grounds raised by the Revenue on this

issue are dismissed.

the Ld. AO for Rs. 11,65,279/-, the Ld. AR submitted that the assessee

has suo motto accepted the addition of interest received by the assessee

from SB Account which was not considered while filing the return of

income. Per contra, the Ld. DR relied on the order of the Ld. AO.

on record and the orders of the Ld. Revenue Authorities on this issue.

Admittedly Rs. 11,65,279/- was the interest earned by the assessee from

the SB Account maintained by the assessee. This interest income was

not disclosed while filing the return of income by the assessee for the

impugned assessment year. We find that the Ld. CIT(A) has erred in

considering the interest income as set off against the interest expenditure

thereby giving benefit of double deduction to the assessee. We are

therefore of the considered view that the Ld. AO has rightly considered

the interest income as income from other sources and therefore we are

inclined to uphold the order of the Ld. AO on this issue and set-aside the

decision of the Ld. CIT(A). Thus, the Grounds No. 9, 10 & 11 raised by

the Revenue are allowed.

adjudicated.

C.O. No.15/Viz/2021 (AY: 2015-16) (By Assessee- Sri Vittalam Nataraj Prasad)

has raised six main grounds (Ground no.4 has sub-grounds). A perusal

of the Grounds raised by the assessee in the instant Cross Objection, we

find that the Grounds are identical to that of the grounds raised by the

assessee in his Cross Objection No.14/Viz/2021 for the AY 2014-15

which is adjudicated in the above paragraphs of this order. Considering

the similarity of the issues involved in both the Cross Objections, our

decision given in CO No. 14/Viz/2021 (supra) mutatis mutandis applies

to the instant Cross Objection No. 15/Viz/2021 also. Accordingly, the

Cross Objection raised by the assessee is dismissed.

ITA No. 02/Viz/2021 (AY: 2014-15) (By Revenue)

CIT(A)-10, Hyderabad in DIN & Order No. ITBA/APL/S/250/2020-

21/102816126, dated 7/10/2020 arising out of the order passed U/s.

143(3) of the Act, dated 30/12/2016 for the AY 2014-15.

Sridevi, is a non-resident filed here original return of income

electronically for the AY 2014-15 on 16/11/2014 declaring total income

of Rs. 28,77,080/-. Subsequently, the assessee filed a revised return on

24/1/2016 declaring a total income of Rs. 29,02,330/-. The assessee’s

case was selected for scrutiny under CASS with a direction to the

Assessing Officer to examine certain issues viz., (i) Interest expenses; (ii)

purchase of property reported in Form 26QB; (iii) substantial increase in

capita in a year and (iv) sale consideration of the property reported in ITR

is less than the sale consideration of property reported in AIR and to

verify the cash deposits. Accordingly, a notice U/s. 143(2) was issued to

the assessee on 25/7/2016 by the ITO (IT), Nellore and later the case

was transferred to Asst. CIT (IT), Visakhapatnam. A notice U/s. 142(1)

calling for information was issued to the assessee on 12/8/2016 and the

in response the assessee along with her representative appeared from

time to time and furnished the information called for. The assessee has

also been asked to furnish the proof in support of interest on housing

loan, interest on SOD, interest on LIC loan and also confirmation letter

from Sri V. Nataraj Prasad towards loan taken by the assessee, sources

for cash deposits, sources for capital increase and sources for properties

purchased during the FY 2013-14. In response the assessee submitted

that an amount of Rs. 46,89,488/- relates to interest on housing loan

with Andhra Bank, Tirupati and Rs. 11,56,812/- relates to interest on

SOD availed from Andhra Banak, Tirupati. Regarding purchase of

property the assessee submitted that the assessee has taken housing

loan of Rs.7,07,29,984/- for property at Mumbai and Rs. 1,87,24,200/-

for property at Tirupati. The assessee also submitted confirmation letter

for Rs.2,89,09,000/- towards loan taken from her husband Sri V.

Nataraj. With respect to capital introduction the assessee submitted that

it is nothing but the salary of Rs. 1,80,00,000/-- received from ISME

Medical College, Nepal as the assessee is working as an Asst. Professor

and interest on FDRs of Rs. 27,09,550/- and the balance relates to other

income. On verification of the assessee’s bank accounts, the Ld. AO

asked the assessee to furnish the sources for huge deposits made in

banks as well as the proof in support of the salary income received from

Nepal. The assessee submitted that the salary has been drawn at Nepal

in cash in Indian Currency and deposited in India. The Ld. AO by

invoking the provisions of Foreign Exchange Management (Export and

Import of Currency) Regulations, 2000 issued by the Reserve Bank of

India vide Notification No. FEMA 6/RB-2000, dated 3rd May, 2000 found

that the Indian Currency cannot be brought from Nepal in

Denominations of above Rs. 100/-. In view of the restrictions of by the

Exchange Management (Export and Import of Currency) Regulations,

2000, a show cause notice dated 15/12/2016 was issued calling for

explanation from the assessee. In response the Ld. AR of the assessee

submitted that out of the consolidated salary received by the assessee in

Nepal which is already taxed in Nepal has been brought into India and

deposited in various bank accounts in India in assessee’s account. The

Ld. AO considered the explanation of the assessee is not in accordance

with the Exchange Management (Export and Import of Currency)

Regulations, 2000 and treated the cash deposits made by the assessee in

India as income from other sources. Further, with respect to cash

deposits in various bank to the tune of Rs. 1,00,90,882/- the assessee

submitted before the Ld. AO that the same is nothing but her salary

drawn from Nepal and on being asked to submit the reconciliation

statement the assessee admitted that there is a deficit cash of Rs.

17,60,024/- and agreed to voluntarily offer the same as additional

income for the FY 2013-14. Considering the assessee’s explanation, the

Ld.AO added the amount of Rs. 17,60,024/- as unexplained cash

deposits. Further, the Ld. AO in the absence of any cogent evidence for

the cash deposits in various banks, treated the amount of Rs.

55,00,000/- as unexplained cash deposits and added the same to the

total income of the assessee. Thus, the Ld.AO computed the assessee’s

income and determined the assessed income at Rs. 2,81,62,354/-

against the returned income of Rs. 29,02,330/-. Aggrieved by the order

of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A).

for the issue of notice U/s. 143(2) of the Act which was dismissed by the

Ld. CIT(A). On merits, the Ld. CIT(A) partly allowed the appeal by

confirming the additions made by the Ld. AO. Aggrieved by the order of

the Ld. CIT(A), the Revenue is in appeal before the Tribunal.

Grounds No.1, 2, 3 & 4 relate to the deletion of addition towards cash

deposits in bank accounts of Rs. 1,80,00,000/-; Ground No. 5 pertains

to deletion of addition towards unaccounted cheque deposits of Rs.

55,00,000/-; Ground No.6 pertains to the Ld. CIT(A)’s action in admitting

the additional evidence without providing reasonable opportunity to the

Ld. AO to examine and rebut the same as envisaged under sub-rule(3) of

Rule 46A of the Income Tax Tules, 1961 and Ground No. 7 raised by the

Revenue is a general ground.

(i) Unexplained cash deposits of Rs. 1,80,00,000/- in the

bank account maintained by the assessee and

(ii) Addition of cheque deposits of Rs. 55,00,000/- in the

assessee’s bank account.

1,80,00,000/- in the bank account maintained by the assessee, on

identical issue in the case of Sri Vittalam Nataraj Prasad while

adjudicating the Revenue’s appeal in ITA No. 247/Viz/2020, AY 2014-15

in the above paragraphs of this order, this Bench of the Tribunal has

taken a view, after considering the facts and circumstances of the case

as well as on careful perusal of the material available before the

Tribunal, that the Ld. AO has rightly considered Rs. 1.80 Crs as income

of the assessee and accordingly uphold the order of the Ld. AO on this

issue and quashed the order of the Ld. CIT(A) on this issue. Since, the

facts and circumstances of the instant case are identical to that of the

case decided by this Bench (supra), our decision given therein applies

mutatis mutandis to the issue raised by the Revenue in the instant

appeal also. Accordingly, we uphold the order of the Ld. AO and quash

the order of the Ld. CIT(A) on this issue and allowed the relevant grounds

raised by the Revenue.

55,00,000/- in the assessee’s bank account, the Ld. AR submitted that

the sources for cheque deposits from assessee’s joint bank account

maintained with her husband. He therefore pleaded that it cannot be

treated as unexplained / unaccounted cheque deposits as each amount

is deposited by way of cheque transfers either from assessee’s own

account or from the joint account. He therefore pleaded that the order of

the Ld. CIT(A) be upheld. Per contra, the Ld. DR submitted that no bank

statement was provided before the Ld. AO and the assessee has

furnished only before the Ld. CIT(A). The Ld. DR further submitted that

such additional evidence should have been remanded back to the Ld. AO

for his remand report after examining the same. The Ld. DR relied on

the order of the Ld. AO.

on record and the orders of the Ld. Revenue Authorities. Admittedly it is

noticed that the assessee has made cheque deposit in the bank accounts

the details are as under:

Sl Deposited in Account No. Cheque Date Amount no No. (Rs.) 1. Andhra Bank SOD A/c. 464052 29/1/2014 9,00,000 003331100000742 2. Andhra Bank SOD A/c. 464055 3/2/2014 9,00,000 003331100000742 3. Andhra Bank SOD A/c. 464057 4/2/2014 9,00,000 003331100000742 4. HDFC A/c. 5200000036461 452904 7/6/2013 25,00,000 5. HDFC A/c. 5200000036461 958245 5/7/2013 3,00,000 Total amount 55,00,000

with respect to the bank accounts maintained by the assessee, fund

transfer by way of cheque has been made either from the joint account or

from the assessee’s own account as follows:

Sl Deposited in Cheque Date Amount no Account No. No. (Rs.) 1. Andhra Bank SOD 464052 29/1/2014 9,00,000 Transferred from A/c. Joint A/c 003331100000742 No.32599745670 2. Andhra Bank SOD 464055 3/2/2014 9,00,000 Transferred from A/c. Joint A/c 003331100000742 No.32599745670 3. Andhra Bank SOD 464057 4/2/2014 9,00,000 Transferred from A/c. Joint A/c 003331100000742 No.32599745670 4. HDFC A/c. 452904 7/6/2013 25,00,000 The receipt of loan 5200000036461 repayment from Sri P. Surendrababu to whom hand loan was given on 28/5/2013 5. HDFC A/c. 958245 5/7/2013 3,00,000 From Husband’s 5200000036461 account in SBI, Tirupati Total amount 55,00,000

her own account or from the joint account held with her husband or

from her husband’s account which has been fully explained by the Ld.

AR. Therefore, we are of the considered view that the Ld. CIT(A) has

rightly allowed the grounds raised by the assessee on this issue and

hence we do not find any infirmity in the order of the Ld. CIT(A) on this

issue. Accordingly, the respective grounds raised by the Revenue are

dismissed.

providing an opportunity to the Ld. AO as per Rule 46A of the IT Rules,

1962 for the additional evidence submitted before him, we are of the view

that the Ld. CIT(A) has powers U/s. 250(4) of the Act “in case if any

further enquiry is required which the Ld. CIT(A) may thought fit, he may

direct the Assessing Officer to make further enquiry and request for a

remand report”. In the instant case, these bank transfers are either from

the assessee’s own account or from the joint account with her husband

or from the assessee’s husband’s account. Therefore, it does not require

any further enquiry by the Ld. AO and the Ld. CIT(A) has exercised his

powers u/s. 250(4) of the Act and has rightly disposed off the additional

evidence submitted before him. We therefore do not find any infirmity in

the order of the Ld. CIT(A) on this issue also. Accordingly, the relevant

ground raised by the Revenue on this issue is dismissed.

C.O. No.16/Viz/2021 (AY: 2014-15) (By Assessee: Nallamilli Sridevi)

has raised six main grounds (Ground no.4 has sub-grounds). A perusal

of the Grounds raised by the assessee in the instant Cross Objection, we

find that the Grounds are identical to that of the grounds raised by the

assessee in the case of Sri Vittalam Nataraj Prasad (assessee’s husband)

vs. ACIT (IT), Visakhapatnam in his Cross Objection No.14/Viz/2021 for

the AY 2014-15 which is adjudicated in the above paragraphs of this

order. Considering the similarity of the issues involved in both the Cross

Objections, our decision given in CO No. 14/Viz/2021 (supra) mutatis

mutandis applies to the instant Cross Objection No. 16/Viz/2021 also.

Accordingly, the Cross Objection raised by the assessee is dismissed.

ITA No.03/Viz/2021 (AY: 2015-16) (By Revenue)

10, Hyderabad in DIN & Order No. ITBA/APL/S/250/2020-

21/102816246, dated 7/10/2020 arising out of the order passed U/s.

143(3) of the Act, dated 31/3/2017 for the AY 2015-16.

Grounds No.1, 2, 3 & 4 are with respect to deletion of addition towards

cash deposits in bank accounts of Rs. 1,80,00,000/-. Grounds No. 5, 6 &

7 are with respect to deletion of addition towards interest expenditure of

Rs. 48,17,402/-. Grounds No.8, 9 & 10 relate to deletion of addition

towards unaccounted closing bank balance of Rs. 3,67,544/-.

raised by the Revenue in its appeal ITA No. 247/Viz/2020 for the AY

2014-15 in the case of Sri Vittalam Nataraj Prasad. While adjudicating

the Revenue’s appeal ITA No.247/Viz/2020 in the above paragraphs of

this order, we have discussed the issue at length and held that since the

Ld. AO has rightly considered the disputed amount (in the present case

disputed amount is Rs. 1.80 Crs) as income of the assessee and we

therefore uphold the order of the Ld. AO on this Ground and quashed the

order of the Ld. CIT(A) on this issue. Since the facts and circumstances

of the issue are identical, our decision given on these grounds (2,3,4 & 5)

of the Revenue’s Appeal in ITA No. 247/Viz/2020 mutatis mutandis

applies to the instant grounds 1, 2, 3 & 4 also. Accordingly, these

grounds raised by the Revenue are allowed.

towards interest expenditure of Rs. 48,17,402/-. This issue is identical to

that of the issue raised by the Revenue in its appeal No.01/Viz/2021,

AY: 2015-16 (Grounds No. 6, 7 & 8) in the case of Sri Vittalam Nataraj

Prasad (husband of the present assessee). Since the facts and

circumstances of the present case and the issue on hand are identical to

that of the issue decided by this Bench in ITA No. 01/Viz/2021, AY:

2015-16 in the case of Sri Vittalam Nataraj Prasad (supra), our decision

given therein mutatis mutandis applies to the instant issue also.

Accordingly, we find that the Ld. CIT(A) has rightly considered the

interest payment and adjudicated the issue on hand and granted relief

to the assessee after discussing the issues at length vide paragraphs 13

to 13.4 of his order. Thus, we do not find any infirmity in the order of the

Ld. CIT(A) on this ground and hence the grounds raised by the Revenue

on this issue are dismissed.

closing bank balance of Rs. 3,67,544/- (Grounds No.8, 9 & 10), we find

from Form 35 filed by the assessee before the Ld. CIT(A) that this ground

was never raised before him and hence not adjudicated by the Ld. CIT(A).

Furthermore, we find more assessment order the assessee has accepted

to admit this amount of Rs. 3,67,544/- as unexplained income. We

therefore considered these grounds raised by the Revenue as infructuous

and needs no further adjudication.

C.O. No. 17/Viz/2021 (AY: 2015-16) (By Assessee – Smt. Nallamilli Sridevi)

the AY 2014-15 which is adjudicated in the above paragraphs of this order. Considering the similarity of the issues involved in both the Cross Objections, our decision given in CO No. 14/Viz/2021 (supra) mutatis mutandis applies to the instant Cross Objection No. 17/Viz/2021 also. Accordingly, the Cross Objection raised by the assessee is dismissed. 58. In the result, Cross Objection raised by the assessee is dismissed.

Pronounced in the open Court on the 16th March, 2023.

Sd/- Sd/- (दु�वू� आर.एल रे�डी) (एस बालाकृ�णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) �या�यकसद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER

Dated : 16.03.2023

OKK - SPS

आदेश क� ��त�ल�प अ�े�षत/Copy of the order forwarded to:- �नधा�रती/ The Assessee – Sri Vittalam Nataraj Prasad, 556, Balaji 1. Colony, Tirupati – 517501, Andhra Pradesh. (ii) Smt. Nallamilli Sridevi, 558, Balaji Colony, Tirupati – 517501, Andhra Prasad. राज�व/The Revenue – Asst. Commissioner of Income Tax, D.No. 50- 2. 92-34/1, Ground Floor, Infinity Tower, Shantipuram, Shankarapuram Road, Visakhapatnam-530016, Andhra Pradesh. 3. The Principal Commissioner of Income Tax, (ii) The Chief Commissioner of Income Tax ( IT & TP), Hyderabad. (iii) The Chief Commissioner of Income Tax (IT) (SZ), Bengaluru. आयकर आयु�त (अपील)/ The Commissioner of Income Tax-10, 4. Hyderabad. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, �वशाखापटणम/ DR, ITAT, 5. Visakhapatnam गाड� फ़ाईल / Guard file 6. आदेशानुसार / BY ORDER

Sr. Private Secretary ITAT, Visakhapatnam