Assessee's appeals partly allowed, cash deposits issue remitted for fresh consideration, other grounds dismissed.

The Tribunal partly allowed the assessee's appeals, remitting the issue of cash deposits back to the AO for fresh consideration, while dismissing other grounds. The order was pronounced on 26th October, 2018.

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Issues Involved:
1. Non-provision of seized material to the assessee.
2. Addition of cash deposits as undisclosed income.
3. Verification of records and assessment orders of Smt. U Rajya Lakshmi.
4. Assessment based on bank deposits instead of seized material.

Issue-wise Detailed Analysis:

1. Non-provision of seized material to the assessee:
The assessee contended that the assessment under section 144 was invalid as the seized material was not provided with sufficient time to analyze and file the return under section 153C. The Tribunal noted that the assessee did not cooperate with the department despite several notices and opportunities provided by the AO and CIT(A). The assessee failed to raise this issue before the CIT(A) and did not argue it during the appeal hearing. Consequently, the Tribunal found no merit in this ground and dismissed it for all assessment years (2008-09 to 2011-12).

2. Addition of cash deposits as undisclosed income:
The AO found substantial cash deposits in the assessee's bank accounts during the search and seizure operations. The assessee claimed these deposits belonged to his brother and Smt. U Rajya Lakshmi, but failed to provide any supporting evidence or confirmation letters. The AO treated the cash deposits as undisclosed income for the respective assessment years. The CIT(A) upheld the AO’s decision, stating the assessee was non-cooperative and did not provide credible evidence to support his claim. The Tribunal, however, acknowledged the frequent cash deposits and withdrawals and remitted the issue back to the AO to consider the peak deposits as income, allowing the assessee to submit necessary information.

3. Verification of records and assessment orders of Smt. U Rajya Lakshmi:
The assessee argued that the CIT(A) should have verified the records and assessment orders of Smt. U Rajya Lakshmi. However, this ground was withdrawn by the assessee during the appeal hearing. Consequently, the Tribunal dismissed this ground as withdrawn for all assessment years (2008-09 to 2011-12).

4. Assessment based on bank deposits instead of seized material:
The assessee contended that the assessment was made based on bank deposits without any seized material, making it unsustainable. The Tribunal noted that the AO issued the notice under section 153C based on incriminating material found during the search in the case of Shri D. Sampath, which included the assessee’s undisclosed bank accounts. Since the bank accounts were not declared by the assessee and constituted incriminating material, the Tribunal upheld the AO's action in initiating proceedings under section 153C and dismissed the assessee's appeals on this ground for all assessment years (2008-09 to 2011-12).

Conclusion:
The appeals of the assessee were partly allowed, with the Tribunal remitting the issue of cash deposits back to the AO for fresh consideration, while dismissing other grounds. The order was pronounced in the open court on 26th October, 2018.

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