K V RAMARAO,UNDI vs. THE ACIT, CENTERAL CIRCLE-2, RAJAHMUNDRY

Brief facts of the case are that the assessee is an individual, engaged in the business of aqua culture and money lending. The assessee filed his return of income for the A.Y.2012-13 on 07.12.2013 admitting total income of Rs.4,46,220/-. The return was processed u/s 143(1) of the Income Tax Act, 1961 (in short ‘Act’). A search and seizure operation u/s 132 of the Act was conducted in the residence of the assessee on 02.11.2017. A survey operation u/s 133A was conducted at the business premises of M/s Sri Venkata Rama Finance, a partnership firm in which the assessee is the Managing Partner. Notice u/s 153A of the Act was issued to the assessee on 28.08.2018 for the A.Y.2012-13 to 2017-18 and duly served on the assessee. In response to the notice u/s 153A, the assessee filed returns of income and assessment u/s 143(3) r.w.s. 153A of the Act was completed and income assessed as under : Returned Income Assessed Income A.Y. (Rs.) (Rs.) 2012-13 4,46,220 1,36,61,260 2013-14 6,87,280 3,02,83,080 2014-15 7,68,090 1,52,19,090 2015-16 8,41,630 7,84,16,456 2016-17 8,47,190 5,97,71,748 2017-18 2,99,370 1,45,12,470 Assessment for the A.Y.2012-13 was made u/s 143(3) r.w.s. 153A of the Act on 30.12.2019, wherein addition of Rs.72,15,000/- pertaining to cash deposits made into the bank account which remained unexplained was added to the income returned. The assessee has made investments in purchase of immovable properties which was treated as unexplained and hence Rs.60,00,000/- was added u/s 69 of the Act. As against the returned income of Rs.4,46,260/-, the assessment was completed at Rs.1,36,61,260/-

Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) considered and perused the order of the AO, material available on record and observed that incriminating material was found and seized during the search and seizure operation conducted u/s 132 of the Act at the residential premises of the assessee. The Ld.CIT(A) viewed that undisclosed investments in property, unexplained cash deposits in bank accounts, unexplained payment of donation / fees for education came to light from the material seized was not disclosed in the return of income or recorded in the books of account. The AO has disclosed and discussed the incriminating material in the assessment on whose basis the additions have been made by him. The Ld.CIT(A) observed that the contentions of the assessee that he had sold fish and the proceeds thereof were deposited in the bank accounts have not been substantiated. There is no material adduced by the assessee either during the assessment proceedings or in appeal proceedings regarding the quantity of fish sold, rates at which sold, the details of buyers, profit margin and expenses incurred. Similarly with respect to the investments in purchase of immovable properties there is no credible material on record for the sources. The repayment of loan in cash and investment in purchase of land remained undisclosed and unexplained. It is also observed that the deposits in the bank account and investments in immovable property are much more than the income returned by the assessee. The Ld.CIT(A) further observed that there is no co-relation between the investments made and income declared in the returns. The income disclosed in the returns of income filed does not explain in any manner the sources for the investments made for purchase of immovable property. There is no evidence on record of fish farming / Pisci Culture which have been stated by the assessee as sources for various investments. It was observed by the Ld.CIT(A) that in the assessee’s own case, the brother-in-law of the assessee Shri M.Suri Babu has categorically stated in his statement recorded on oath that in reality no fish farming took place. Payment made in respect of fees of the assessee’s daughter is not substantiated by any credible source. The Ld.CIT(A) further observed that the assessee failed to produce any relevant data / evidences in support of the contentions made by him even on the issue of unexplained investment in construction of house property. Even during the appeal proceedings no submissions were made. The Ld.CIT(A) relied on various judicial pronouncements and held that the assessee had substantial undisclosed income as evident from the facts brought on record by the AO and hence confirmed the additions made by the AO u/s 143(3) r.w.s. 153A under different heads. 4. On being aggrieved, the assessee preferred an appeal before the Tribunal and raised the following grounds :

On the other hand, the Ld.DR has not raised any objection.

We have heard both the parties and perused the material placed on record. Considering the facts and circumstances of the case, it is an admitted fact that the assessee had filed written submissions, paper book and additional evidence. But the Ld.CIT(A) has not considered the same and passed the order by over sight. Therefore, considering the facts and circumstances of the case, we are of the view that it is a fit case to remit the matter back to the file of the Ld.CIT(A) with a direction to consider the written submissions, paper book as well as the additional evidences filed before him by the assessee after giving an opportunity of being heard to the assessee. The assessee is also directed to cooperate with the department. Therefore, the grounds raised