TaxTMI 
TaxTMI 
2016 (8) TMI 1137
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....430 sq.yds. on 27.5.2006 for a consideration of Rs. 1,99,35,000/- from Sri Peela Apparao and Others. It was further observed that property was sold by Sri Peela Apparao and others including the assessee Sri P. Koteswara Rao as one of the coowners. During the course of search operation, the department found certain incriminating materials which shows that M/s. M.V.V. Builders has paid on money of Rs. 75 lakhs in cash to Shri P. Koteswara Rao towards purchase of Venkojipalem site. When seized documents were confronted to the Managing Partner of M/s. M.V.V. Builders, Shri M.V.V. Satyanarayana had admitted that he had paid a sum of Rs. 50 lakhs and Rs. 25 lakhs during the financial year relevant to assessment year 2007- 08 & 2008-09 respectively, towards settlement of land dispute in respect of Venkojipalem site. 3. The A.O. observed that the assessee has not disclosed said amount, in the income tax returns filed for the respective assessment years, therefore, having reasons to believe that income chargeable to tax has escaped assessment, issued notice u/s 148 of the Act for both assessment years. In response to notices, the assessee has filed revised returns u/s 148 of the Act, discl....
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....own to him as to why Sri M.V.V. Satyanarayana has admitted that he had paid on money towards purchase of Venkojipalem site. The assessee further submitted that he has not received any money over and above what was stated in the sale deed from M/s. M.V.V. Builders. To this effect, furnished a copy of letter issued by M/s. M.V.V. Builders, wherein they have stated that no on money is paid towards purchase of Venkojipalem site. 5. The CIT(A) after considering the explanation furnished by the assessee, held that the A.O. has rightly reopened the assessment u/s 147 of the Act, as it is clear from the records that there is no action pending on the return filed by the assessee. As regards additions made by the A.O. towards on money, the CIT(A) held that seized documents clearly exhibits that M/s. M.V.V. Builders has paid on money to the assessee towards purchase of Venkojipalem site. The CIT(A) further held that the Managing Partner of M/s. M.V.V. Builders, Sri M.V.V. Satyanarayana, while deposing before investigating officer has stated that he had paid a sum of Rs. 75 lakhs to Sri P. Koteswara Rao towards Venkojipalem site. Therefore, the contention of the assessee that he had not recei....
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....loose slips found in the premises of M/s. M.V.V. Builders without any corroborative evidence to show that on money has been paid to the assessee towards purchase of site. The A.R. further submitted that the assessee has categorically disowned receipt of on money from M/s. M.V.V. Builders. It is further argued that on perusal of the statement given by Sri M.V.V. Satyanarayana during the course of search, it was noticed that Sri M.V.V. Satyanarayana has stated that he had paid a sum of Rs. 75 lakhs towards settlement of land dispute in respect of Venkojipalem site, but nowhere, stated that he had paid on money to the assessee towards purchase of site. Therefore, the A.O. was not correct in coming to the conclusion that the assessee has received on money towards sale of Venkojipalem site. The A.R. further submitted that there is some entries recorded in the seized materials in the name of assessee. The Managing partner of the firm categorically stated that the said amount has been paid towards settlement of land disputes to various persons. To this effect, they have addressed a letter to the assessee wherein it was clearly stated that no on money paid to assessee towards purchase of s....
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....ue arised in the financial year relevant to the assessment year 2007-08 & 2008-09. Therefore, it is highly uncommon to make payment of on money after completion of sale transaction. The assessee further claimed that Sri M.V.V. Satyanarayana has addressed a letter, wherein he has categorically stated that no on money is paid towards purchase of Venkojipalem site. Under these circumstances, the A.O. was not correct in coming to the conclusion that there is a on money receipt towards sale of site. 11. The only issue that came up for our consideration is whether on facts and circumstances of the case, the seized documents indicate exchange of on money between the parties. Admittedly, in the assessee's case there was no search. The seized document found during the course of search in the premises of M/s. M.V.V. Builders, is a loose sheet wherein certain financial transactions were recorded in the name of the assessee. Though, Sri M.V.V. Satyanarayana stated that he had paid a sum of Rs. 50 lakhs and Rs. 25 lakhs in the financial year relevant to assessment year 2007-08 & 2008-09, to Sri P. Koteswara Rao towards land dispute settlement, nowhere it is stated that he had paid on money to ....
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.... hand, except loose sheet found in the premises of M/s. M.V.V. Builders and admission made by the third party in their assessment proceedings, there is no other evidence on record to prove that on money is paid to the assessee towards purchase of site. We further noticed that Sri M.V.V. Satyanarayana, while deposing before the investigating officer has stated that he has paid money to Sri P. Koteswara Rao towards settlement of land disputes, but nowhere, stated that he had paid on money to the assessee towards purchase of Venkojipalem site. The assessing officer without bringing on record any evidence to prove that on money is exchanged between the parties, merely harping upon loose sheet and third party statement, which cannot be considered as conclusive evidence against the assessee to bring on money to tax as undisclosed income. The A.O. is required to bring further evidence on record to show that actual money is exchanged between the parties, but literally failed to do so. The A.O. did not conduct any independent enquiry relating to value of the property, instead merely relied upon statement given by the purchase of the property which is not correct. Further, there is no eviden....
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....akhs on 21st Aug., 2006 which consideration has been accepted by the State registration authorities. Further nothing was brought on record to show that there was any invoking of s. 50C while completing the assessment in the case of the seller. There is no evidence other than the seized material marked as 'A/CRK104' where relevant entries are made at Rs. 1,65,00,000. The seized material was not found at the premises o the assessee and there is no corroborative material to suggest that the assessee has actually paid Rs. 1.65 çrores towards purchase consideration of the property. The assessee and her brother categorically denied the payment of any money over and above Rs. 65 lakhs. The AO placed hi reliance on the statement of 5, who is a third party. The evidence brought on record by the Department is not enough to fasten additional tax liability on the assessee. As seen from the above document this is just a handwritten loose document and the handwriting is also not of the assessee and the loose document was found at the premises of a third party. The burden is on the Department to prove conclusively that the loose document belongs to the assessee. There is no presump....
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....The AO should act in a judicial manner, proceed with judicial spirit and come to a judicial conclusion. The AO is required to act fairly as a reasonable person and not arbitrarily and capriciously. The assessment made should have enough material and it should stand on its own legs. The basis for addition cannot be only the loose sheet or a third party statement. In the absence of corroborative material, and/or circumstantial evidence, the addition cannot be sustained. Thus, no addition can be made on a dumb document and noting on loose sheet. It should be supported by the evidence on record and the evidence on record is not sufficient to support the Revenue's action. In a block assessment undisclosed income has to be determined or the .basis of the material and evidence detected in the course of the search action. The circumstances surrounding the case are not strong enough to justify the addition made by the Department. The burden of proving the actual consideration in the purchase of property is on the Revenue. Considering the entire facts of the case, the Revenue has failed to discharge its duty, instead made up a case on surmises and conjectures which cannot be allowed. Und....