IN INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. No. 722/HYD/2014 Assessment Year: 2009-10 Sri Patancharu Durgadass, Income Tax Officer, HYDERABAD Vs Ward-8(3), [PAN: AJTPP6353K] HYDERABAD (Appellant) (Respondent) For Assessee : Shri A. V. Ragh Ram, AR For Revenue : Shri K.J. Rao, DR Date of Hearing : 21-09-2016 Date of Pronouncement : 30-09-2016 ORDER PER B. RAMAKOTAIAH, A.M. : This is appeal by assessee against order of Ld. Commissioner of Income Tax (Appeals)-III, Hyderabad dated 21-02-2014. Assessee has raised following grounds: 1. On facts and in circumstances of case order of Commissioner of Income Tax (Appeals)-III, Hyderabad, allowing appeal only in part is erroneous and unsustainable. CIT(A) ought to have allowed appeal in entirety. 2. Commissioner of Income Tax (Appeals) erred in sustaining addition of Rs. 27,65,383/- out of total addition of Rs. 59,86,800/- made by Assessing Officer. Commissioner (Appeals) failed to appreciate that apart from amount given by relative, appellant had source of investment from agriculture activity and therefore ought to have given due credit for said source of income. I.T.A. No. 722/Hyd/2014 :- 2 -: Sri Patancharu Durgadass 3. On facts and in circumstances of case, Commissioner (Appeals) ought not to have rejected submission of appellant that huge cash withdrawals from bank account were redeposited into bank account, and accordingly ought to have granted relief in respect of such re-deposits. Commissioner (Appeals) failed to appreciate that such huge withdrawals unless proved to be invested otherwise, were always deemed to be available for being re-deposited. 4. Commissioner (Appeals) erred in directing Assessing Officer to bring amount of Rs. 2 lakhs as unaccounted investment in business . 2. Briefly stated facts are that assessee is individual and derives income from house property. He has filed his return of income for AY. 2009-10 on 31-03-2009 declaring total income of Rs. 3,09,730/- from house property. Assessing Officer (AO) completed assessment on 20-12-2011 u/s. 143(3) of Income Tax Act [Act] determined total income at Rs. 62,96,530/-. only issue in appeal relates to addition of Rs. 59,86,800/- on account of deposits in bank accounts of assessee. AO noticed that in ICICI Bank account of assessee cash deposits amounting to Rs. 59,86,800/- were made during year. Since assessee did not provide proper explanation regarding source of aforementioned deposits, AO added all deposits as unexplained . 3. During appeal before CIT(A), assessee submitted that he had been running shop and had also been running business of supply of building materials. Due to oversight, he had not disclosed income from these businesses. In addition, he also owns agricultural land and had not disclosed income from that. In this regard, he presented some additional evidence and requested I.T.A. No. 722/Hyd/2014 :- 3 -: Sri Patancharu Durgadass that he may be allowed to place that evidence on record and that evidence to be considered under rule 46A. 3.1. entire evidence filed as well as petition of assessee was sent to AO for his comments and remand report. Ld. CIT(A) noted that : 4.3 From evidence presented by appellant and report of assessing officer, it is found that appellant had been running fair price shop. Although, no books of account or details of sale have been presented regarding that shop, however, assessing officer has reported that appellant had turnover of Rs. 10,72,449/- from fair price shop and further turnover of Rs. 21,48,968/- from supply of building materials. It is also stated that appellant produced title deeds with respect to agricultural lands of 36.19 acres. appellant stated that he had income of Rs. 2.5 lakh from agriculture. Further, appellant has shown cash withdrawals from ATM of Rs. 12,55,000/- and stated that this cash withdrawal from ATM was deposited back into bank account. It was further stated that some amounts were received from his sister as loan . 4.4. appellant in his counter submissions reiterated that he had indeed deposited amounts back in bank after withdrawing them through ATMs . 4. Ld. CIT(A) after considering remand report and submissions of assessee has accepted turnover of fair price shop and material supply and to that extent gave credit. However, loan from sister and contention that agricultural income and rents were available with assessee was not accepted. He also directed to estimate income from two businesses at Rs. 2 Lakhs and directed AO to modify order accordingly. Aggrieved, assessee is in appeal. 5. During course of present proceedings, DR was asked to examine contention whether assessee had filed I.T.A. No. 722/Hyd/2014 :- 4 -: Sri Patancharu Durgadass returns of income in earlier years declaring incomes, more so agricultural income stated to have been earned. Assessee s Counsel has also agreed to furnish details and subsequently filed certain details. 6. After considering rival contentions and perusing Paper Book and other documents placed, we are of opinion that orders of authorities are to be set aside and matter is to be restored to AO for re-examination of contentions. There seems to be agricultural income and rental incomes in both HUF and individual status. cash book placed in Paper Book seems to have been furnished before AO in remand proceedings but was not examined at all. loan from sister and transactions of cash and cheque require to be examined in detail along with past record of returns filed and incomes declared. In view of these, we hereby set aside orders of AO and CIT(A) and restore examination of assessees business transactions and credits and debits in bank account, including cash withdrawn and deposits, to file of AO. Assessee should be given due opportunity in proceedings to make submissions. AO is free to examine issues and complete assessment based on facts and as per provisions of law. 7. In result, appeal of assessee is allowed for statistical purposes. Order pronounced in open Court on 30th September, 2016 Sd/- Sd/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated 30th September, 2016 TNMM I.T.A. No. 722/Hyd/2014 :- 5 -: Sri Patancharu Durgadass Copy to : 1. Sri Patancharu Durgadass, Hyderabad. C/o. K.Vasantkumar, A.V. Raghu Ram, Advocates, 610, Babukhan Estate, Basheerbagh, Hyderabad. 2. Income Tax Officer, Ward-8(3), Hyderabad. 3. CIT (Appeals)-III, Hyderabad. 4. CIT-II, Hyderabad. 5. D.R. ITAT, Hyderabad. 6. Guard File. Patancharu Durgadass v. Income-tax Officer, Ward-8(3), Hyderabad