PER B. Ramakotaiah: This is an appeal by Assessee directed against the order of CIT(A)-VII Hyderabad, dated 18-11-2010 for the AY 2008-09 on the issue of addition of Rs.1,09,76,800/- made on the basis of statement of other parties and disallowance of interest claimed of Rs. 15,83,105/-.

2. Assessee has raised the following grounds of appeal:

1. The order of CIT(A) is erroneous in law and facts of the case.

2. The learned CIT(A) ought to have deleted the addition made of Rs. 1,09,76,800/- which was made merely based on statement of other parties without correlating the facts with substantive evidence. ITA No. 161/Hyd/2011 Narender Kumar Gupta

3. The learned CIT(A) erred in law by not considering the fact that in the total land of 2.10 acres appellant is co- owner of the along with other co-owners, where as entire addition was made in his assessment.

4. The learned CIT(A) erred in law by not considering the fact that the AO failed to obtain on record the corroborative evidence relating to receipt of cehque of Rs. 60 lakhs, which were referred in the AOs order while making the addition.

5. The learned CIT(A) erred in law by not considering the fact that the transaction done by other party with the appellant was only of ratification of title of land acquired 14 years ago and which was in his continuous possession. Hence making the addition basing on market value of land is totally erroneous in law.

6. The learned CIT(A) erred in law in not accepting the evidence of Joint Compromise memo filed before the Lok Adalat of Ranga Reddy Dsitrict, a Judicial Authority.

7. The learned CIT(A) erred in law & facts by disregarding the glaring inconsistencies of fats narrated in the Assessment order of the AO.

8. The learned CIT(A) erred in law & facts in not deleting the disallowance of Rs. 15,83,105/- towards interest payment inspite of giving clarification in written submission alongwith all the necessary evidence to show the nexus between borrowed funds & utilization of funds.

2.2. In the course of proceedings before us, Assessee filed the following additional grounds: 1. The assessment order passed by the ACIT, Central Circle 4, Hyderabad, is invalid and bad in law as it has been passed relying on the statements recorded from Mr. Suresh and Mr. P. Prabhakar Reddy, behind the back of the appellant.

2. Without prejudice to additional Ground No. 1, the assessment order passed by the ACIT, Central Circle 4, Hyderabad is invalid and bad in law as it has been passed without giving an opportunity to cross-examine Mr. Suresh and Mr. P. Prabhakar Reddy inspite of a specific requisition made by the appellant. ITA No. 161/Hyd/2011 Narender Kumar Gupta

3. After hearing both the parties, the additional grounds filed by Assessee have been admitted.

4. Assessee is a Director of VNJ Agro Foods (P) Ltd., deriving salary income, income from partnership firm, rental income, interest from advances etc. Assessee filed return of income declaring net taxable income of Rs. 3,97,670/-. The case of Assessee was selected for scrutiny, consequent to search operation conducted u/s 132 in the case of P. Prabhakar Reddy, Advocate on 21-12-2007 and based on the statement of Shri P. Prabhakar Reddy, it was considered by AO that assessee paid an amount of Rs. 1.20 crores for settlement of dispute between parties and as the amount of Rs. 10,23,200/- was paid by way of cheque, remaining amount of Rs. 1,09,76,800/- was treated as unaccounted payment. In addition to the above amount, Assessee claimed interest expenditure of Rs. 15,83,105/- out of interest earned on advances and the same was disallowed by the AO for the reason that Assessee has not established the nexus between interest paid and interest received.

5. It was the contention of Assessee that he is owning only 2519 Sq. Yards, out of total of 2.10 acres at Survey No. 387, Attapur Village, Rajendra Nagar Mandal, R.R. district purchased along with other co-owners on 5 th August, 1994 from heirs of Shri D. Sattaiah and the same was in his continuous possession. Assessee group concern M/s VNJ Agro Foods (P) Ltd., is running from this place for the last 15 years. In 2003, one Mr. M. Suresh (Associate of Shri P. Prabhakar Reddy) claimed that he is erstwhile owner of the land and when the dispute reached to Honble High Court, finally it was settled by way of compromise ITA No. 161/Hyd/2011 Narender Kumar Gupta wherein Assessee and his co-owners paid an aggregate sum of Rs. 10.23 lakhs to sri Satish and through a rectification deed he relinquished the rights. This compromise deed duly executed was filed before the Lok Adalat on 28-02-2007 wherein Mr. M. Suresh acknowledged that he has received Rs. 10.23 lakh only.

6. Search and seizure operation was conducted on Shri P. Prabhakar Reddy wherein cash of Rs. 54 lakhs was found at his residence. Shri P. Prabhakar Reddy seems to have stated that Assessee paid Rs. 60 lakhs towards rectification deed and further submitted that for another Rs. 60 lakhs cheques were given. The AO did not allow Assessee to cross-examine the said Shri P. Prabhakar Reddy as well as Mr. M. Suresh and made the addition. In Para 3, the AO mentioned that Mr. M. Suresh, is the owner of the land and also acknowledges that the land was sold long back to Sri Narender Kumar Gupta and his brothers. The AO also further reproduced the statements of Mr. M. Suresh and Shri P. Prabhakar Reddy in paras 5 & 6 of his order, which are as follows:

5. Assessee stated that the amount of Rs. 10 lakhs paid is by cheque can be acceptable, at the same time denying the payment of 60 lakhs in cash to the M. Suresh towards ratification deed can not acceptable. It can be concluded based on the below facts: i) Sri M. Suresh deposed in his statement that 60 Lakhs has been received in cash from Sr. Narender kumar gupta towards the land. In his reply for Question No. 15 of the statement recorded on 22-12- 2007, suresh stated that" I have sold the land to Sri Narender kumar guptha R/O H.No.72, Road No. 11, Banjara hills, hyd for sale consideration of Rs. 1.20 crores. I have received Rs. 60 lakhs in cash from Mr. Narender Guptha. The remaining amount was paid by guptha in ITA No. 161/Hyd/2011 Narender Kumar Gupta cheques. These cheques are post dated cheques". Similarly, In his reply for Question No. 18 of the statement Suresh stated that " I conform that the entire cash found at the residence of Sri Prabhakar reddy, it is only part payment received by me. I still have to receive Rs. 60 lakhs from Sri. Guptha on account of these sale transaction

. ii) Sri P.Prabhakar reddy clearly deposed in his statement that 60 Lakhs has been received in cash from Sr. Narender kumar gupta towards the land. In his reply for Question No. 4 of the statement recorded on 03-01-2008, P.Prabhakar Reddy stated that "negotiation were taken up with Mr. Narender kumar guptha and others who are in the possession of the land...in the result M. Suresh has to relinquish his ownership rights over the land in their favor for which they agreed to pay an amount of Rs.

1.20 Crores. iii) Further, In the letter received by this office on 21-12-09, Prabhakar reddy reiterated his version towards the amount of 1.20 lakhs that the ultimate deal was settled at Rs. 1.20 crores towars the same land in between M. suresh and Narender kumar guptha.

6. The above facts were confronted with the assessee. Assessee simply denied the facts. Assessee stated that he has paid only Rs.10,00,000/- towards the ratification deed and said that the matter was settled at Lok adalath by paying the 10 laks to suresh. Assessee version is not acceptable, since, the total transaction much more than 10,00,0001-, it can be concluded based on the facts. i) Real-estate values were very high at that period. Fair Market value of the land is at Rs. 75,00,000/- per Ac as per deeds made during that period and found in the search operation. ii) Land owner M. Suresh won the case on the land dispute. There is no other option to the assessee, except to compromise with the Suresh by paying the demanded amount by the suresh. And the negotiation was settled with an amount of Rs. 1.20 crores. iii) More over, Prabhakar Reddy & suresh mentioned that found amount of Rs. 54,00,000/- - belongs to Narender reddy. The settlement was done at Lok adalth is after the date search. It means that the matter settled before that date search. To give legal effect of the settlement, both the parties compromised before the Lok adalath. iv) The said land is part of the Ac. 4.33 guntas situated at survy no 387, attapur village. Other parties who were purchased other part of the same land from M.Suresh, land owner paid with higher rate which also were made at the same time. Sri T. Shankar sing paid Rs. 41,00,000/ - towards the 20 gunts; K. prabhakar reddy and penta reddy paid Rs. 34 lakhs for 28 guntas; Lotus Developers paid 50,00,000 - for the land 22 guntas; Ankit developer paid 5.5 lakhs towards 7 guntas and 25 lakhs towards 32 gunts. The above sale deeds were made on 20.12.2007 along with assessees the ratification deeds. v) Assessee has entered into ratification deeds for total land Ac.2. 04 guntas. As per market value the transaction would be 1,50,00,000/- as per the other above mentioned deeds the average consideration per Acer is 67.90 lakhs. ( total remaing land Ac.2.29 guntas and total consideration 155.5lakhs.) Based on the above discussion it can be concluded that assessee has made negotiations with the land owner for the land Ac 2.04 for the consideration of Rs.1 ,20,00,0001 - and paid the same and made ratification deeds. But assessee stated that he has paid only 10 lakhs. Assessee produced payment of cheques to the tune of rs. 10,23,2001-. Hence the reaming amount of the Rs. 1,09,76,8001 - is treated as unaccounted payment from the undisclosed income of the assessee, Hence added to the total income and it attract penalty U/s 271(1) (c) of the I.T. Act,1961.

7. Before the learned CIT(A), Assessee contended that there is no evidence of cheques supposed to have been issued nor there was any evidence that the money was paid by Shri Narender Kumar Gupta. It was further submitted that Shri M. Suresh has entered into sale agreements with various other ITA No. 161/Hyd/2011 Shri Narender Kumar Gupta people and the money could have been received from various sale deeds. It was contended that relying on the statements alone, which were not correct, AO could not have come to a conclusion to make addition unless Assessee was given cross- examination to contest allegations made. It was also further submitted that Assessee being owner of the land for so many years and having been using it for the business of Assessee as well, the issue was settled by way of compromise by paying the amounts through cheque and since all these facts were accepted before the authorities by Shri P. Prabhakar Reddy and Shri M. Suresh, there is no basis for making addition that too at a high pitched value without any basis.

7.2 After considering the submissions of Assessee, the CIT(A) allowed the ground by stating as under:

3.2 The submission made by the Authorized Representative has been considered. It may be seen that the appellant had bought the land near Attapur village some 14 years ago. Now, after lapse of 14 years, when the prices of the property have gone up, the alleged land owner of the property Mr. M. Suresh had tried to get some gains from the said sold property. Therefore, Mr. M. Suresh approached legal adviser and advocate Mr. P. Prabhakar Reddy and through him the appellant was forced to pay more towards the property purchased 14 years back. The appellant claims to have paid only Rs. 10,23,200/- but Mr. P. Prabhakar Reddy and Mr. M. Suresh have disclosed that the payments in cash was Rs. 60 lakhs and the balance in cheques said to have been paid by post dated cheques. It appears that both of them have very clearly made a statement that the appellant had paid in total Rs. 1.20 crore for purchase of Ac. 2.10 guntas of land at survey No. 387, Attapur village, Ranga Reddy Dt. It is further seen that when the search took place in the case of mr. P. Prabhakar Reddy, Advocate, the Department had noticed that there was a cash of Rs. 54 lakhs and it was claimed to have been belonging Mr. Narender Kumar Gupta. If the appellant had not paid Rs. 60 lakhs in cash as deposed by Mr. M. Suresh and Mr. P. Prabhakar Reddy, Advocate, then why Mr. M. ITA No. 161/Hyd/2011 Shri Narender Kumar Gupta Suresh have said that Rs. 60 lakhs was received from the appellant towards land. According to Mr. M. Suesh and Mr. P. Prabhakar Reddy, they had to get another Rs. 60 lakhs by cheques. Later, it is not known that whether the appellant paid the same either in cheque or in cash.

3.3 Further, it is the contention of the AR that the appellant had paid only Rsa. 10,23,200 for ratification at Lok Adalat and not the balance amounts as alleged.

3.4 It may be seen that the AO should have given an opportunity to the appellant to cross examine Mr. M. Suresh and Mr. Prabhakar Reddy, Advocate when they have deposed against the appellant. The AO cannot make any addition based on the statements given by the third party, without being cross examined by the appellant. Therefore, having examined the facts and circumstances of the case, the AO is directed to allow the appellant to cross examine Mr. M. Suresh and Mr. P. Prabhakar Reddy, Advocate with regard to the alleged payments of Rs. 1.20 crores and decide the case accordingly. Subject to above directions, this ground of appeal is allowed.

8. It was the contention of the learned counsel for Assessee that the order of CIT(A) is not correct as he has not deleted the addition but restored the issue to the AO subject to directions for cross-examination. It was his submission that there is no purpose when the issue was not set aside but restored to the AO with certain directions. Accordingly Assessee is contesting the addition, so made.

9. Coming to the cross-examination, Assessee not only relied on the grounds to submit that in spite of repeated requests during the assessment proceedings, Assessee was not given any opportunity to cross-examine the parties concerned and based on this contention, learned CIT(A) acknowledged and gave directions to provide the opportunity to cross-examine and this action of the CIT(A) cannot be supported as it is of no ITA No. 161/Hyd/2011 Shri Narender Kumar Gupta consequence. He relied on the decision of the coordinate bench of ITAT, Hyderabad in the case of B. Ramakrishnaiah Vs. ITO [2010] 39 SOT 379 to submit that requirement of natural justice depends on the circumstances of the case and the normal principle is that ordinary cross-examination has to be granted when asked for. If the department was to rely on any exceptions, the burden is on the department to establish that existence of any exceptions, that non-providing of cross-examination of witness clearly constitutes infraction of the right conferred on Assessee and that vitiated the order of the assessment made against Assessee.

10. On merits, the learned counsel submitted that Assessee has purchased only 2519 sq.yards and the AO observed that Assessee purchased 2.4 acres of land for a consideration of Rs.

1.20 crores, which is a factual error committed by the AO. It was further submitted that Shri M. Suresh is not the owner of the land as stated by the AO in para 3 of assessment order, which is also another factual error committed. It was submitted that Assessee purchased the land way back in 1994 and Shri M. Suresh and Shri P. Prabhakar Reddy tried to dispose of the land by making false allegations due to which, the proceedings have reached up to Honble High Court. The learned counsel also pointed out that observations of the AO that Assessees land case went against before the Joint Collector, RR Dt. is not correct and referred to the subsequent proceedings where the revenue authorities asked the parties to settle the matter as civil dispute. The learned counsel referred the facts before the Lok Adalat to submit that Assessee along with others paid only an amount of Rs. ITA No. 161/Hyd/2011 Shri Narender Kumar Gupta 10,23,200/- and has not purchased any land as alleged by the AO. With reference to availability of cash with Shri P. Prabhakar Reddy, it was submitted that money could be of other sale deeds executed by Shri M. Suresh and Shri P. Prabhakar Reddy being legal counsel and furnished copies of the deed documents in which both consideration of cash and cheques were received by Shri M. Suresh as under: Consideration page No.

1. Sale Deed (2650 Sq.Yards) or 22 guntas 50 lakhs 1 to 11 (cash)

2. Sale Deed (20 guntas) 41 lakhs 11 to 23 (Cash)

3. Agreement of sale cum GPA (gunta) 5.5 lakhs 24 to 32 (Cheque)

4. Agreement of sale cum GPA (32 guntas) 25 lakhs 33 to 41 (cheque) The learned counsel referred to various sale agreements entered into by Sri Suresh before search and recitals therein, to submit that this cash received could be of those sale transactions. It was further submitted that the statement of Shri P. Prabhakar Reddy and Shri M. Suresh cannot be relied upon as they have changed their stand before the revenue and further there is no evidence that Assessee was to pay so much amount as alleged by the Revenue.

11. The learned DR, in reply, submitted that CIT(A) has directed the AO to allow cross-examination, which was done and accordingly the additional ground raised by Assessee does not require any adjudication. With reference to additions so made, the learned DR supported the orders of the AO and CIT(A).

12. We have considered the issue, examined the facts and various documents placed in the form of three paper books. First ITA No. 161/Hyd/2011 Shri Narender Kumar Gupta of all, we are unable to justify the action of the AO in making addition on certain false statements and mis-consideration of facts. Mr. M. Suresh may have indirect right in the land being one of the legal heirs of the original owners but this property has already sold way back in 1994 to Assessee and his brothers and Assessees share is being 2519 sq.yards. Even if it were to be considered that Assessee purchased the land, the share of Assessee is only 2591 sq.yards and not the entire land of 2.04 acres as considered by the AO. Therefore, estimating the land value at Rs. 1.20 crores itself is not based on any evidence or facts. Secondly, the AO was in possession of various sale deeds entered by Shri M. Suresh before the date of search and as submitted by the learned counsel, about 121.5 lakhs was received out of which 91 lakhs was received in cash as per the documents. What happened to the said monies in the hands of Shri M. Suresh or in the hands of Shri P. Prabhakar Reddy, were never brought on record nor confronted to Assessee. The possibility of those monies being attributed to asseessee was not ruled out by any enquiry by AO or investigation unit.

13. Coming to the issue of alleged payment of Rs. 54 lakhs found during the course of search, the basis was only a statement from Shri P. Prabhakar Reddy without any corresponding evidence. As seen from the sequence of events and as per the recitals of rectification deed entered on 20 th December, 2007 (also before search) placed on record at page 10 of paper book. The following are the facts as stated therein: i) Assessee being party of second part had purchased the land to an extent of 2519 sq.yards in Survey No. 387 ITA No. 161/Hyd/2011 Shri Narender Kumar Gupta through a registered sale deed bearing No. 6975/94, dated 05-08-1994. ii) On the basis of ownership rights and title in possession of Assessee, he has applied for mutation as contemplated under R.O.R. Act, 1971 and MRO Rajendra Nagar Mandal conducted the proceedings for mutation effecting the changes in Record of Rights. iii) the subject property became non-agricultural as Assessee raised structures bearing premises No. 04-06- 1973/2 and assessed to property tax on the building and landed property was mutated in the municipal records establishing that Assessee is absolute owner of the property. iv) One Shri Srinivasa Rao, who is original Pattedar of 4.33 acres in Survey No. 387 of Attapur Village died and left behind his only legal heir Shanta Bai, who sold the said land to D. Sattaiah by unregistered sale deed on 16-12- 1979. v) Sri D. Sattaiah was in possession and enjoyment of the land and he also died and left behind his legal heirs D. Sri Hari, D. Nagendar, D. Prameela, D. Rameela and Smt. D. Manemma, who got the unregistered sale deed regularised through MRO vide proceeding No. ROR/3908/90, on 24-03- 1999 after due enquiry and notices to all concerned parties as per the record of the MRO. As per the enquiry/panchanama dt. 12-03-90, while passing regularization orders the deceased Shantha Bai was the owner and only legal heir of Srinivasa Rao. vi) Whereas Sri M. Suresh, person of first part had filed appeal in the year 2003 in case No. C/3836/2003 U/s. 5-B ITA No. 161/Hyd/2011 Shri Narender Kumar Gupta of ROR Act against the orders of the MRO in proceedings ROR/3908/90, Dt. 20-03-1999, the RDO on 05-07-2006 passed orders setting aside the MRO order. Assessee and other purchasers filed revision petition which was admitted and stay was granted on 18-08-2006 and that Assessee along with other purchasers and family members of the original legal heirs were contended before the revenue authorities and also before the Honble High Court and before the City Civil Court in various proceedings that the first person of the first part (i.e. M. Suresh) has no claim at all and all the scheduled property and then the compromise deed allows Assessee to have title over the property, which Assessee is still having in his possession.

14. As seen from the above rectification deed, it is an admitted fact that Assessee is owner of the land and rectification deed only allows him complete rights, as Shri M. Suresh questioned the ownership on the land. As seen from the proceedings before Lok Adalat also, there was compromise between Assessee, who paid an amount of Rs. 10,23,200/- through DDs dated 19-12- 2007 and other parties. Even though, the AO rejected the proceedings before the Lok Adalat on the reason that these have happened after the search, the fact that DDs were taken in the name of Sri M. Suresh dated 19-12-2007 and compromise was effected before the date of search cannot be rejected.

15. It is also seen that sale deeds entered by Shri M. Suresh as signing party before the search and those recitals also mention various proceedings and settlement therein. In view of ITA No. 161/Hyd/2011 Shri Narender Kumar Gupta this, there is no dispute with reference to Assessee having paid the amount of Rs. 10,23,200/-.

16. As stated earlier, what Assessee has to pay was only for getting the full rights over the property, which was already purchased earlier, is in his possession, and on which there were structures and Assessee was paying municipal taxes as well. In these circumstances, the approach of the AO as well as CIT(A) that Assessee purchased land through negotiations and paid market consideration of Rs. 1.20 crores is beyond comprehension.

17. Coupled with the fact that no cross-examination was allowed to Assessee to question S/Shri P.Prabhakar Reddy and M. Suresh and also keeping in mind that the said two persons sold the balance of land to various people and received consideration in cash, it cannot be stated that the amount of Rs. 54 lakhs found with Shri P. Prabhakar Reddy during the course of search was paid by Assessee alone. Moreover, the so-called post dated cheques said to have been received by parties were never brought on record during the search proceedings or subsequently. Therefore, Assessee could have paid subsequently the balance amount of Rs. 60 lakhs, as stated by Shri P. Prabhakar Reddy also is unbelievable/ unverifiable.

18. Considering the facts as stated above, we are of the opinion that Assessee paid only an amount of Rs. 10,23,200/- along with others in order to settle the proceedings and get a clear title of land of Rs. 2.04 acres, out of which Assessees share of property is 2519 sq.yards. Considering the proceedings ITA No. 161/Hyd/2011 Shri Narender Kumar Gupta before the Lok Adalat, which is also another judicial body, the statements recorded by the revenue authorities from Shri P. Prabhakar Reddy cannot be accepted as such averments are contrary to the averments made in affidavits filed before the Lok Adalat. For these reasons the veracity of statement can not be accepted as such. In the absence of any contrary evidence and considering that Assessee is already in possession of the land and as there is no need to pay any amount over and above what was paid for the compromise/rectification deed, the so-called addition made by the Revenue authorities cannot be sustained at all and, accordingly, the same is deleted.

19. As already stated earlier, the learned CIT(A) in fact allowed the ground without deleting the addition by directing the AO to allow cross-examination. We are not sure that purpose would be served by the said direction of the learned CIT(A) without giving specific directions for the AO to delete the addition. Considering the facts of the case, we allow Assessees contentions and delete the addition so made by the AO. Accordingly, the grounds raised on this issue are allowed.

20. The next issue for consideration as contested in Ground No. 8 is with reference to the disallowance of Rs. 15,83,105/- towards interest payment. As seen from the order, the AO without issuing any show cause letter, asked Assessees counsel on the last date for establishing nexus between interest claim and interest received. Before the learned CIT(A), it was submitted that the nexus between interest bearing borrowings and the income yielding assets can be verified from copies of bank statements submitted during the assessment proceedings ITA No. 161/Hyd/2011 Shri Narender Kumar Gupta and further offered to submit any other evidence as required by the AO. It was further contended that there was adequate time available to complete the assessment upto 31-12-2010, but, the AO without giving any opportunity completed assessment on 31- 12-2009. On appeal, the learned CIT(A) confirmed the action of the AO by holding that

during the appeal proceedings also, there was no sufficient clarification from the AR with regard to the interest expenses disallowed by the AO and it is not clear whether the borrowed funds are utilized for business purpose.

21. Before us, the learned counsel submitted that Assessee is in the business and has borrowed amounts and advanced to various firms and others and accordingly have been claiming interest by offering interest income. The learned counsel referred to statements placed before the AO at pages 30 & 31 of the paper book and detailed explanation given to submit that there is nexus between borrowed funds and advances and interest paid thereon and interest earned. It was submitted that in AY 2009-10 on the basis of same set of facts, the AO has accepted the claims in the order u/s 143(3) and there was no disallowance of this amount. The claim in that year was to the tune of Rs. 17,24,281/-. He, therefore, submitted that since the issue is similar in the year under consideration, the addition should be deleted.

22. The learned DR, however supported the orders of the AO.

23. We have considered the issue and examined the facts placed on record. There is no dispute with reference to the fact that the AO has not given sufficient time to Assessee to support the claim. All the details were placed before the AO, which were ITA No. 161/Hyd/2011 Shri Narender Kumar Gupta not examined by the AO. Before the CIT(A) assessee submitted that further evidence will be filed if required. These have not been considered. As seen from the order placed on record in subsequent year there is no dispute with reference to the payment of interest and claim against interest received. In these circumstances, we agree with Assessees contention that the amount should not have been disallowed. However, AO has not examined the statements filed by Assessee, may be, for want of time and may be he might have pre-determined to disallow the amount. Be that as it may, we are of the opinion that this aspect is to be examined by the AO and if he found there is nexus between payment of interest on borrowed funds and receipt of interest on advances, the AO is directed to allow the interest claim of Assessee. With these directions, the issue of claim of interest is restored to the file of the AO to do the needful. This ground is allowed for statistical purposes.

24. In the result, appeal of Assessee is allowed for statistical purposes. Pronounced in the open court on 29 th November, 2013. Sd/- Sd/- (ASHA VIJAYARAGHAVAN) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated: 29 th November, 2013. kv ITA No. 161/Hyd/2011 Shri Narender Kumar Gupta Copy to:-

1) Shri Narendra Kumar Gupta, C/o Sri Madhu Sudan Mantri, Madhu Mantri & Associates, 3-5-873, C-103, Matrushree Apartments, Hyderguda, Hyd. 500 029. 2)ACIT, CC - 4, Hyderabad.

3) CIT(A)-VII, Hyderabad.

4) CIT(Central), Hyderabad

5) The Departmental Representative, I.T.A.T., Hyderabad.