2022 (7) TMI 495

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....2021- 22 dated 25.08.2021 for the Assessment Year (A.Y.) 2016-17 and the cross objections are raised by the assessee in support of the order of the Ld.CIT(A). 2. The revenue has raised the following grounds of appeal : 1. On the facts and circumstances of case, the ld.CIT(A) erred in deleting the addition of Rs.4,85,85,795/- made by the AO towards unexplained investment u/s 69 of the IT Act by holding that the AO did not have any incriminating material when in fact the AO has made the addition with reference to the annexure - A/GS/BVRM/RES/PO/1 pages 125 to 140 dated 30.12.2017 of seized material and also the sale agreement dated 27.08.2015 which is also annexed as seized material. 2. The ld.CIT(A) erred in deleting the addition of Rs....

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.... (in short 'Act') was conducted in the case of Sri Gunuputi Lakshmayya & Others, in which a sale deed regarding purchase of Sai Kanchana Rice Mill was found and seized. Notices u/s 153C r.w.s. 153A and 143(2) and 142(1) were also issued and served on the assessee, in response to which the assessee filed return of income, admitting 'Nil' income. During the course of search, the department further found that the assessee firm has purchased M/s Sri Sai Kanchana Modern Rice Mill for a consideration of Rs.1,90,00,000/- in bank auction vide sale deed No.1972/2015 dated 15.09.2015. An agreement dated 27.08.2015 was found between Jaddu Bhaskara Rao (seller) and Kolli Venkata Surya Subbarayudu for a consideration of Rs.4,45,00,000/- towards sale of ....

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....nds of the assessee firm in purchase of rice mill for the A.Y.2016-17 towards on money paid beyond the consideration shown in the document u/s 69 of the Act. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) deleted the addition made by the AO observing that the sale deed was between the assessee firm and M/s Sri Sai Kanchana Modern Rice Mill for a sale consideration of Rs.1,90,00,000/-, whereas the sale agreement for Rs.4,45,00,000/- was between M/s Sri Sai Kanchana Modern Rice Mill and J.Bhaskara Rao. The Ld.CIT(A) held that the AO failed to prove that the assessee has paid an amount of Rs.6,75,85,795/- (Rs.4,45,00,000 + Rs.2,30,85,795) over and above the sale consideration and made....

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....bsence of the same, the nature and the source of the loan remains unexplained. Hence, treated the amount of Rs.61 lakhs as unexplained credits and brought to tax for the A.Y.2016-17 as per the provisions of sec.68 of the Act. 8. Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) deleted the addition made by the AO holding that the assessee submitted confirmation letters from the four creditors from whom it availed loan of Rs.61,00,000/- along with copy of their return of income for the A.Y.2016-17, ledger extracts and balance sheet in support of the claim of the assessee availed loan from the said persons and the transaction took place through banking channel. The Ld.CIT(A) held that the ....