TMI Blog2014 (7) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... e books of accounts – Decided against Revenue. - ITA. No. 510/Hyd/2006, 511/Hyd/2006, 512/Hyd/2006 - - - Dated:- 16-7-2014 - Shri B. Ramakotaiah And Shri Saktijit Dey,JJ. For the Petitioner : Mr. Solgy Jose T. Kottaram For the Respondent : Mr. S. Rama Rao ORDER Per Bench. These three appeals are by the Revenue against the separate orders of the CIT(A)-IV, Hyderabad dated 23.01.2006 for assessment years 2002-2003, 2003-2004 and 2004-2005. 2. Assessing Officer levied penalty under section 271D in all the years on the reason that assessee has received cash deposits of more than ₹ 10,000/- whereas, Ld. CIT deleted the same. 3. Briefly stated, assessee is a partnership firm carrying on business of obtain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9SS. b. The agents collected such deposits of ₹ 10,000/- or less and paid to the account of the firm. c. The deposit register is maintained which was found during the course of survey by the A.O. and the same was impounded and even according to the deposits register, the amount collected is either ₹ 10,000/- or less. d. The concern OSFC is not a separate entity and all the transactions concerning OSFC are included as the transactions of the appellant while filing the revised Secunderabad. return of income and this proposition is accepted by the A.O. at the time of completing the assessment proceedings. 4.1. The Ld. CIT(A) remanded the matter to the A.O. and after receiving the report in which A.O. did not controve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome dated 20-08-2005 for the Assessment Years 2002-2003 Kind reference in invited to the notice u/s 142(1) dated 6-8-2004 requiring us to file the return of income for the assessment year under consideration and produce information as contained in the Annexure to the notice u/s 142(1) of the I.T. Act. The assessee submits that the Assessing officer conducted survey u/s 133A of the I.T. Act on 5-12-2003 and later examined the partners on oath. The Assessing Officer vide order u/s 133A(3)(i) dated 5-12-2003 impounded the books of account as per the list annexed to the said order. Later by issuing summons the Assessing Officer impounded books of account produced vide order u/s 131(1) dated 30-1- 2004 by the Income Tax Officer Ward-11( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the debt is good or bad and whether the amount is recoverable or not ignoring the instructions of the RBI. The difference between the interest received at 4% and recorded at 2.5% is introduced in the books of account again - (i) by way of cash deposits.(ii) by way of interest received from the debtors which became bad and (iii) cash received towards the principal amount from the debtors which have become bad. The cash deposits introduced with the amount of difference between 4% and 2.5% were also paid interest and such interest payment was also brought back in the same manner into the books of account. b) The assessee submits that the books were written by an unqualified Accountant and even the tax advisor who dealt with the final accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ands that the restrictions of the RBI on the deposits are with reference to the number of partners of ' each firm. As the Assessing Officer is aware, the number of partners in a finance concern cannot be more than 10. To cover the number of depositors, the assessee proposed to transfer some of the books of the assessee firm to an account known as OSFC. While transferring the assessee (a) transferred the deposits received (b) transferred the housing loans given. The amounts collected by OSFC and payments made by them were separately recorded. However, at certain points of time, the amounts of OSFC were taken by the firm into its books of account. There is no additional investment with OSFC by the partners. The OSFC carried out the financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dified. The assessee firm is coming forward with the correct account and the real income derived by it and filing the return of income voluntarily in response to notice u/s 148. The assessee submits that all the above omissions or mistakes are committed inadvertently which were found by the assessee itself. The assessee is prepared to submit the details in respect of tile revised return of income now filed and it requests the Assessing Officer to kindly complete the assessment based on revised return of income . 12. From the above it is clear that OSFC is not different from the appellant firm and the Assessing Officer assessed the income/loss and considered the transactions of OSFC in the assessment of the appellant firm. In the circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X
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