AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 910
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....A search and seizure action u/s 132 of the I.T. Act was carried out on 25.11.2010 in the business premises of the assessee. In response to notice u/s 153A, the assessee filed return of income declaring total income of Rs.10,65,848/- which was the income originally returned in the return of income filed on 31.7.2009. 3. During the course of assessment proceedings, the Assessing Officer noted that the assessee has taken cash loan of Rs.19.00 lakhs from Shri M. Asif Basha and Rs.5.00 lakhs from Sri Srinivasulu Reddy. Vide question No.8 of the questionnaire dated 1.11.2012, the Assessing Officer asked the assessee to furnish the details of unsecured loans received during the year along with the evidence to prove the identity and creditworthiness of the creditor and genuineness of the transaction. The assessee produced confirmation letter from Shri M. Asif Basha. However, the assessee failed to furnish proof of creditworthiness of Mr.Asif Basha. So far as the loan of Rs.5.00 lakhs claimed to have been taken from Shri Srinivasulu Reddy, the assessee could not furnish any details. In absence of any evidence to his satisfaction, the Assessing Officer made addition of Rs.25.00 lakhs (i.e.,....
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.... the seller i.e., appellant? Further, the signature in the matching confirmation letter is also not with the Creditor's name. As creditworthiness and of genuineness the above two creditors in the form of I.T. Returns, PAN, were not produced even in remand report proceedings, the addition of Rs.24,00,000/- as unexplained cash credit is sustained and this ground is dismissed". 6. So far as the addition of Rs.5.00 lakhs is concerned, the learned CIT (A) sustained the addition by observing as under: "9.1 The AR in his reply to remand report has stated that the addition of Rs.5,00,000/-was put before him in assessment proceedings suddenly and hence was not part of questionnaire issued u/s 142(1) and is a guess work. The contention of the appellant is not acceptable because the assessee is in the knowledge that the addition of Rs.5,00,000/- was made on a/c of earning interest income which was received from Sabhashiva Rao. This receipt of interest income was not disclosed originally in the return filed for the A.Y 2008-09. The addition is made on the basis of entry in the diary and was also confronted in the statement. Hence, the argument of the appellant is not acceptable and the ....
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....not made in the return of income before the appellate authorities. He accordingly submitted that the additional grounds raised by the assessee should be admitted. 11. The learned DR, on the other hand, strongly opposed the admission of the additional grounds. 12. After hearing both the sides and considering that all material facts necessary for adjudication of the issue are already available on record, therefore, in view of the decision of the Hon'ble Supreme Court in the case of NTPC Ltd(supra), the additional grounds raised by the assessee is admitted for adjudication. 13. In ground of appeal No.1, the assessee has challenged the addition of Rs.24.00 lakhs (i.e., Rs.19 lakhs + Rs.5 lakhs) made by the Assessing Officer and confirmed by the learned CIT (A) as unexplained cash credit. 13.1 So far as addition of Rs.19.00 lakhs being cash loan from Shri M. Asif Basha is concerned, the learned Counsel for the assessee referring to the confirmation letter of Shri M. Asif Basha, copy of which is placed at page No.17 of the Paper Book submitted that she had confirmed to have given loan of Rs.19.00 lakhs on different dates and stated that the amount was given out of her business in....
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.... is the submission of the learned Counsel for the assessee that he has never admitted addition of Rs.19.00 lakhs being cash loan from Shri M. Asif Basha. It is also his submission that the assessee is in a position to produce Shri M. Asif Basha before the Assessing Officer to substantiate his creditworthiness and the genuineness of the transaction. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one opportunity to the assessee to produce the said person before him for his examination and file necessary evidences to substantiate his creditworthiness to advance such cash loan of Rs.19.00 lakhs. The Assessing Officer shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. 16. So far as Rs.5.00 lakhs received from Shri Srinivasulu Reddy is concerned, we find the assessee during the course of appeal proceedings has produced confirmation letter, bank statement and ledger a/c of the said transaction. We find the amount of Rs.5.00 lakhs obtained from Shri Srinivasulu Reddy is ....
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....eedings. 19.1 Ld.counsel for the assessee submitted that since these details were filed before the ld.CIT(A), therefore, these are not additional evidences. 20. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the Assessing Officer in the instant case made an addition of Rs.5.00 lakhs being interest received by the assessee from Shri Sambasiva Rao. However, a perusal of the seized document shows that the cash is received for interest purpose. Thus, it is clearly discernible from the seized document that it is not interest income but an amount of Rs.5.00 lakhs received from Shri Sambasiva Rao as loan. Since the Assessing Officer while making the addition has failed to understand the notings in the seized document, the extracts of which have already been reproduced earlier and since the assessee has filed certain documents before the learned CIT (A) as certified in the Paper Book but the same was not properly appreciated by ld.CIT(A), therefore, considering the totality of the facts of ....
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....n Limited vs. CIT [1998| 229 ITR 383 (SC). 5. The Ld. CIT(A) failed to adjudicate the ground no 4 taken before him i.e addition of Rs 11,00,000 made by the assessing officer as unexplained investment in purchase of property at Dadegallu Village. 6. The Ld. CIT(A) failed to appreciate the fact that addition of Rs.11,00,000 made by the assessing officer is without proper justification and hence it is to be deleted. 7. The Appellant may add or alter or amend or modify or substitute or GE delete and/or rescind all or any of the grounds of appeal at before or at any time the time of appeal". 25.2 ITA No.543/Hyd/2020 (A.Y 2009-10) ( grounds of appeal by the Revenue ): "1 The ld.CIT(A) erred both in law and on facts of the case in allowing relief to the assessee. 2. The ld. CIT(A) erred in deleting the addition of Rs.2,50,00,000/- made without 2 towards unexplained investment in purchase of property at Bellary without appreciating the facts had brought on record by the Assessing Officer that the assessee failed to explain the sources for the same. 3. The ld.CIT(A) failed to 132(4) of appreciate the fact that in the statement recorded u/s. the Act, the assessee had admitted th....
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....e identity and creditworthiness of the loan creditors and genuineness of the transaction. However, in absence of any details furnished by the assessee, the Assessing Officer made addition of the same to the total income of the assessee as unexplained cash credit. 29. Before the learned CIT (A), the assessee submitted that an amount of Rs.18.00 lakhs represented sale proceeds of land from Smt. G.L. Aruna represented by her agent Shri Rami Reddy and Shri Uma Maheshwar Rao and this amount was shown in the computation of capital gain filed for the A.Y 2010-11. It was accordingly requested that the addition made by the Assessing Officer is not correct. 29.1 However, the learned CIT (A) was not satisfied with the arguments advanced by the assessee and sustained the addition by observing as under: "8.2) The claim of the appellant is verified with reference to remand report. It is noticed that the appellant has shown Sri Ram Reddy (Rs.16,00,000/-) and Sri Uma Maheswar Rao (Rs.2,00,000/-) as current liabilities not as advance for sale of property as claimed. During the assessment proceedings and the appellate proceedings, the appellant has made conflicting claims. Even during the remand....
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.... where the assessee has produced documents to establish the genuineness of the parties such as PAN No.of all creditors along with confirmation, their bank statements showing payment of share application money, etc., merely because those persons had not appeared before the Assessing Officer would not negate the case of assessee so as to invoke section 68 of the I. T. Act. He accordingly submitted that the order passed by the learned CIT (A) being not in conformity with the facts of the case should be set aside and the ground raised by the assessee be allowed. 34. The ld DR, on the other hand, heavily relied on the order of the learned CIT (A). He submitted that the assessee is making conflicting claims and has not come out with the truth, therefore, the order of the learned CIT (A) being in consonance with law should be upheld. 35. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the Assessing Officer in the instant case made an addition of Rs.18.00 lakhs being the amount of loan of Rs....
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....ounds are concerned, the grievance of the assessee is that the learned CIT (A) failed to adjudicate the ground taken before him challenging the addition of Rs.11.00 lakhs made by the Assessing Officer. 39. After hearing both the sides, we find during the search & seizure operation at the business premises of Sri Krishna Constructions, a copy of the agreement entered into by the assessee along with Shri Syed Yunus and Shri Balaji for the purchase of landed property of 8 acres belonging to Shri E.Eshappa and two others, located at Dagegallu Village, Koppal District at the rate of Rs.13.00 lakhs per acre was found and impounded vide page No.85 to 88 of the Annexure A/TBC/03. Vide Qu.No.3 of the questionnaire dated 1.11.2012, the assessee was asked to furnish the details of the transaction and the sources thereof along with the documentary proof in support of his claim. In his reply the assessee stated that his share of investment in the said transaction was Rs.11.00 lakhs and the source for the above investment was out of the advance of Rs.27.00 lakhs received from Shri Veerabhadra Reddy. The Assessing Officer noted that although the assessee in his initial reply stated that the adva....
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....2009 received l crore 30 lakhs and confirmed by R.Chandrahas by putting his signature. Likewise on back side of page no. 77 it is noted as 1 acre- amount 2.75 lakhs dated10/11/2008' and different notings are made as below: Rs 50 lakhs on 13/4/09 Rs 65 akhs on 13/5/09 10 lakhs on 13/8/09 Rs 2 lakhs on 1/9/09 Rs 5 lakhs on 25/9/09 RS 10 lakhs on 15/10/09 Rs 40 lakhs on 22/3/10 Rs. 13 lakhs on 15/4/10 Rs.40 lakhs on 26/04/10 Rs. 30 lakhs on 16/7/10 Rs. 20 lakhs on 9/8/10 Rs 20 lakhs on 27/10/10 RS. 1.5 lakhs on 25/9/10 46. Similar notings were found on back side of Page No.79 acknowledged by R. Chandrahas for having received Rs 12 lakhs on 10/02/09, Rs 7 Lakhs on 30/06/09 and Rs 16 lakhs on 7/12/09 When the assessee was confronted with this material during the course of statement recorded u/s 132(4) on 25.11 2010 he replied that he had entered into an oral agreement with Sri R. Chandrahas to purchase three acres of property located at Ram Nagar, Bellary for a total consideration of Rs.2 6 crore and out of which an amount RS. 2.5 crore paid in cash and balance amount of Rs.10 lakh was not yet paid. Hence, the property was not registered. When the assessee....
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....explanation. A. On the day of the search, I was under severe mental pressure. I faced a situation which I had never faced before. This is all I can say about the statement gave which is not correct. Q 28. The above statement dt.25. 11.2010 was recorded on oath, but still, you are saying that you have given incorrect statement after taking oath. Please offer our explanation A. I submit that l am a god fearing man I am a layman and I have explained to already you that I was under great mental pressure that made me make the statement in question. Q.29. Vide final show cause notice dt.22.2.2013, you are requested to produce Sri Chandrahas for examination on or before 28.2.2013 before me. But till date you have not produce Sri Chandrahas for examination. Please offer your explanation. A. I have already explained to you that during the same time you issued the show cause notice I was laid up in the hospital and was discharged only day before yesterday. I therefore, could not produce Mr.Chandrahas for examination as directed by you. I will make my best efforts to meet him and request him to present himself before you and clarify the entire issue. 49. The AO noted that the asses....
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.... by the Considering all appellant. After the above, my observations are as under: 7.4.1) Firstly, in course of search on 25.11.2010, four undated cheques of Rs.25 lakhs aggregating to Rs.1 Cr drawn on Andhra Bank, Infantry Road, Branch, Bellary signed by Sri R.Chandrahas was found and seized from the residential premises of the appellant Sri C.Vamsi Krishna. On the back side of the cheques which are numbered as 76 to 79 of annexure A/CVK/1, financial transactions indicating receipt of Rs.2.50 crores by Sri Chandrahas, along with his signature was also noticed. When this was put forth before the appellant on the date of search, he has stated in his statement recorded u/s 132(4) that he entered into an oral agreement with Sri Chandrahas to purchase three acres of property located at Ram Nagar, Bellary for a consideration of Rs.2.6 crores. Out of this Rs.2.6 crores, he had made payment of Rs.2.5 crores in cash to Sri R.Chandrahas and since balance amount of Rs.10 lakhs was not paid, the registration could not be completed as on the date of search. 7.4.2) Thereafter in the statement recorded again u/s 132(4) on 15.02.2011, the appellant submitted that in fact his father, Sri C.Saty....
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....on. A: I submit that I am a god fearing man, I am a layman and I have already explained to you that I was under pressure that made me great mental make the statement in question. Q.29 requested to produce Sri Chandrahas for examination on or before 28.2.2013 before me. But till date you have not produced Sri Vide final show cause notice dt. 22.2.2013, you are Chandrahas for examination. Please offer your explanation. A: I have already explained to you that during the same time you issue the show cause notice I was laid up in the hospital and was discharged only day before yesterday. I therefore, could not produce Mr.Chandrahas for examination as directed by you. I will make my best efforts to meet him and request him to present himself before you and clarify the entire issue. Thus, in the said statement the assessee once again changed his version stating that the said cheques were left by Mr.Chandrahas and he did not know why the cheques were left at his residence." 7.4.3) The statement of Sri Chandrahas recorded during the remand proceedings on 26.09.2019 with reference to seized material (Page no.76) which is extracted and reproduced, as under: "Q.4) I am showing you ....
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....period which is still under my possession. Q.8)...... Q.9)....... Q.10)..... Q.11) I am showing you the statement given by Sri C.Vamsi Krishna recorded during the course of search and seizure operation in his case, wherein, he has stated that he paid an amount of Rs.2.60 crores to you for purchase of land. Please offer your remarks. Ans: Sir, I am now 60 years old and at this point of time I am unable to recall exactly who had given the money. However, I can say that Sri C.Vamsi Krishna had not given me amounting any money to Rs.2.60 crore at any point of time. 7.4.4) AS could be seen Sri.Chandrahas from answer to Q.No.6, stated that he did receive Rs.2.60 crores for 2 acres of land, whereas the property in question was 3.00 acres. But vide Q.no.11 above, Sri Chandrahas has stated that he received Rs.2.60 crores on behalf of somebody else and not from Sri Vamsi Krishna. This shows that Sri Chandrahas was acting as a middlemen to other persons also and was accepting monies as advance in land/plot dealings, which is evidenced by his own handwritten notings mentioned on the back side of the cheques. 7.4.5) As seen from the records, Ram Nagar property was purchased by app....
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....ut bringing any further evidence on record. The statement of Chandrahas is not limiting the transaction to the appellant. Sri Chandrahas has in fact categorically denied having received amount from the appellant. 7.4.9) In view of the factual position, the addition of Rs.2.50 crores made in the hands of the appellant is not warranted since the property is purchased by appellant's father Sri C.Satyanarayana. In view of the above, the addition of Rs.2.50 crores made in the hands of the appellant is ordered to be deleted. This ground is allowed". 51. Aggrieved with such order of the learned CIT (A), the Revenue is in appeal before the Tribunal. 51A. We have considered the rival arguments made by both the sides, perused the orders of the AO and the ld.CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the AO in the instant case made addition of Rs.2,50,00,000/- in the hands of the assessee on the ground that assessee has purchased a property from Mr. R.Chandrahas for which certain documents were seized vide Annexure A/CVK/01. According to the AO page No. 76 to 79 of the seized material contain some u....
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....sence of any evidence to prove that the said amount was received from the HUF. He accordingly treated the amount of Rs.3,75,000/- as unexplained income in the hands of the assessee. 54. Before the learned CIT (A), the assessee filed details of the cash flow statement, balance sheet, ledger account and extent of land holding etc., in support of the agricultural land which were forwarded by him to the Assessing Officer seeking a remand report. On the basis of the remand report of the Assessing Officer and submission of the assessee to such remand report, the learned CIT (A) deleted the addition by observing as under: "6.1) I have gone through the facts on the record and the remand report and counter comments offered by the appellant. The assessee filed return of income originally on 31.07.2009 and time limit to issue notice u/s 143(2) has lapsed before the date of search. The return to was processed u/s 143(1)(a). The assessment is deemed to be completed. As could be seen from the assessment order, the AO made the addition of Rs.3,75,000/- on the basis of capital account furnished by the appellant in course of assessment proceedings and not on the basis any incriminating material ....
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....l No.8, the Revenue has challenged the order of the CIT (A) in deleting the addition of Rs.4,07,057/-. 57. Facts of the case, in brief, are that the Assessing Officer noted that in the original return of income filed on 31-07- 2009 for the assessment year under Consideration the assessee has admitted an amount of Rs.12,45,850/- as his total income. However. in the return of income filed in response notice u/s.153A, the assessee has admitted an amount of Rs.8,38,343/- only. When the assessee was asked to explain the above difference of Rs.4,07,507/- between the income originally returned and income returned in response notice u/s.153A, the assessee could not give any explanation. Hence, the said amount of Rs.4,07,507/- was treated by the AO as undisclosed income and added to the income returned by the assessee. 58. Before the learned CIT (A), the assessee filed the following submissions: During the year, the assessee earned the following income: As per original return As per revised return Exempted income being share of profit from SKC 1,61,939 1,61,939 Interest from SKC 10,30,904 10,30,904 Less: Exempted income 1,61,939 1,61,939 Taxable Income 10,30,904 10,....