आयकर अपीलीय अधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM श्री दुव्वूरु आर एल रेड्डी, उपाध्यक्ष, एिं श्री एस बालाकृ ष्णन, लेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE VICE PRESIDENT &

SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER . . / ITA No. 349/VIZ/2025 (A.Y. 2021-22)

आईटीए नं

DCIT – Central Circle – 1 v. Venkanna Chowdary Yarlagadda

5^th Floor, Direct Taxes Building 1-1-2, C/o Anuradha Auto Service Centre MVP Colony, Visakhapatnam – 530017 NH-5 Road, Sheela Nagar Andhra Pradesh Visakhapatnam – 530012 Andhra Pradesh [PAN:AANPY3003G]

(अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

. . / ITA No. 364/VIZ/2025 (A.Y. 2021-22)

आईटीए नं

YarlagaddaVenkanna Chowdary v. ACIT – Central Circle – 1

1-1-2, C/o Anuradha Auto Service Centre Income Tax office NH-5 Road, Sheela Nagar Pratyakshakar Bhavan Visakhapatnam – 530012 MVP Colony, Visakhapatnam – 530017 Andhra Pradesh Andhra Pradesh [PAN:AANPY3003G]

(अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

करदाता का प्रतततितित्व/ Assessee Represented by : Shri GVN Hari, Advocate राजस्व का प्रतततितित्व/ Department Represented by : Shri Badicala Yadagiri, CIT(DR)

सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 12.08.2025

घोषणा की तारीख/Date of Pronouncement : 04.09.2025

आदेश /O R D E R PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER:

1. These cross appeals are filed by the revenue and assessee against order of Learned Commissioner of Income Tax (Appeals), Visakhapatnam-3, [hereinafter in short “Ld.CIT(A)”] vide DIN & Order No. ITBA/APL/S/250/2024-25/1075146623(1) dated 27.03.2025 for the A.Y.2021-22 arising out of the order passed under section 143(3) of Income Tax Act, 1961 (in short ‘Act’) dated 28.12.2022. First, we take up the appeal of the assessee in ITA No. 364/VIZ/2025 (A.Y. 2021-22).

ITA No. 364/VIZ/2025 (A.Y. 2021-22)

2. Brief facts of the case are that, assessee is an individual filed its return of income for the A.Y. 2021-22 on 31.03.2022 admitting a total income of Rs.89,98,918/- and agricultural income of Rs.1,23,250/-. Subsequently, a search and seizure operation under section 132 of the Act conducted in the Sardar Group of cases on 10.11.2021. During the course of search proceedings, a warrant of authorization under section 132 of the Act was executed in the case of the assessee and his residential premises in Seethammadhara, Visakhapatnam. As part of the search and seizure operations, a survey operation under section 133 of the Act was conducted simultaneously in the business premises of M/s. Anuradha Auto Service Centre (AASC), Visakhapatnam. M/s. AASC is a partnership firm where Shri GSS Shivaji and Smt G. Vijaya Lakshmi are the partners. However, the daily activities of M/s.AASC looked after by the assessee. During the survey operations certain material documents were impounded and marked as annexure AASC/OFF/1 to 17. Based on the impounded material, it was noticed that from the printouts taken from the mobile of Shri Ungati Srinivasa Rao, Cashier working with M/s.AASC in which daily cash sheets are available and asked for explanation. He confirmed that these entries are created by him from time to time and all the daily sales at petrol bunk and unaccounted cash received from third parties. He also further confirmed that only cash sales and cash deposits in the bank account are routed through regular books of accounts and all other cash transactions both inflow and out flow are not recorded in the books of accounts. During the survey proceedings, summary of daily cash receipts and payments was got prepared from Shri U. Srinivasa Rao wherein he has arrived at unaccounted cash receipts of Rs.7,24,06,000/- and unaccounted cash expenditure of Rs.10,42,44,400/- for the period 06.07.2020 to 07.11.2021. The computation of the unaccounted receipts and expenditure was made on the basis of “loose sheets”. It was noted that all the entries in the loose sheets are nothing but the amounts drawn by Shri GSS Sivaji