TaxTMI 
TaxTMI 
2025 (8) TMI 968
X X X X Extracts X X X X
X X X X Extracts X X X X
....AO is not only erroneous both on facts and in law but is without application of mind as none of the submissions that are made are considered and dealt with. 2. The learned CIT(A) failed to appreciate that there was nothing in the seized material of the AO has brought on record any evidence in the form of purchase deed or sale deed to demonstrate that the assessee is engaged in land purchase and sale to hold that the receipts recorded in the seized material A/SBS/BUS/14 relate to such income and has not conducted any enquiry whatsoever from the date of search to the date of competition of assessment in spite of there being references of mobile numbers in the seized material and thereby erred in confirming the addition of Rs. 3,44,22,300 without considering the submissions. 3. The learned CIT(A) further failed to appreciate that it is settled law that every receipt cannot be revenue receipt or that it is income and further erred in not considering the submissions about the discrepancy by the AO in considering the amount as against the claim of the assessee that the receipts are considered in the hands of the firm and amount is also not correctly arrived at. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....total income of Rs. 4,33,020/-. The assessment has been completed under section 143(3) r.w.s. 153A of the Income Tax Act, 1961 on 30.12.2010 and determined the total income of the assessee at Rs. 5,29,49,820/- by, inter alia, making additions towards unexplained cash credit of Rs. 1,30,14,500/-; undisclosed income from land transactions of Rs. 3,44,22,300/-; donation to CBIT from undisclosed income of Rs. 5 lakhs and undisclosed commission income of Rs. 45 lakhs. 3. The assessee carried the matter in appeal before the First Appellate Authority-CIT(A) and challenged various additions made by the Assessing Officer. The learned CIT(A)-7, Hyderabad, for the reasons stated in the other dated 24.09.2019 rejected the arguments of the assessee and sustained the addition made by the Assessing Officer towards unexplained cash credit, undisclosed income from land transaction, donation to CBIT out of undisclosed income and undisclosed commission income. 4. Aggrieved by the order of the learned CIT(A), the assessee is now, in appeal before the Tribunal. 5. The first issue that came-up for consideration from ground nos.2 to 5 of assessee's appeal is addition of Rs. 3,44,22,300/- towards....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lf, I did the development work of 10 acres of land, in lieu of which, Mithra Associates gave him 200 plots. The Assessing Officer has analysed the impounded book and observed that, the book contains the details of amount received from different persons, who approached the assessee for settlement of their disputes arising out of their land transactions. Further, the said book also contains payment of donations by different individuals to M/s. Vinoba Nagar Development Society and details of certain expenditure incurred by the assessee for different purposes. The Assessing Officer on the analysis of the said documents, came to the conclusion that, most of the funds are in relation for getting land by the said individuals from the Society or from Andhra Pradesh Bhoodan Yagna Board. The total receipts as per Lokpriya book comes to Rs. 11,85,19,331/-. It is also seen that, said register contains details of certain payments and the amounts has been worked out to Rs. 34,16,031/-. The Assessing Officer had also cross-examined Mr. N. Raghava Rao, one of the persons whose name appears in the said book and statement under section 131 of the Act was recorded. In response to specific questions, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tted by the assessee, it is noticed that, the Firm claims to have been formed on 25.03.2007, but, the return for the assessment year 2008-2009 was filed only on 12.11.2009 i.e., almost 15 months after the date of survey/search. Further, the Firm has obtained PAN vide their application dated 09.10.2009 i.e., after the date of search and survey. Though, the assessee claims that, return was filed in the status of "Firm" considering the contents of the impounded book, but the fact remains that, the receipt in the book starts from 11.01.2005 pertains to assessment year 2005-2006. Since the assessee has failed to offer proper explanation with regard to the contents of book found during the course of search, the Assessing Officer observed that, the amount recorded in the books pertains to receipts towards land transactions and the same has not been offered for taxation. The Assessing Officer had also took support from the provisions of Section-132(4A) of the Income Tax Act, 1961 and Section-114 of the Indian Evidence Act and observed that, once a document or books of account are found in the possession of the assessee in the course of search, it will be presumed that, such document belong....
X X X X Extracts X X X X
X X X X Extracts X X X X
....like page number and amount mentioned therein, under different heads has admitted the gross receipts and went on claiming some expenditure and finally shown that they have collected service charges /reimbursement for the services rendered by them. The background for such activities by the assessee was explained through an organization 'S.V.S. Workers Paradise', the assessee being proprietor of this organization. The assessee tried to camouflage his land settlement receipts, transacted with various persons as were done through this organization and to add colour to this act, he has given a copy of the 'Roll (to be read of role) of Organization". Without going into all the frivolous and unrelated roles this organization has donned for itself on a simple white paper, the 'conclusion' of this organization attracts attention, which reads as under : "In view of the above stated elaborate funds it is farmed beyond duly that I solemnly declared that the S.V.S. Workers Paradise had not collected unlawfully amounts from anybody. But we satisfactory provide service exteance to needy person who approached voluntarily with good faith finally conclusive that this org....
X X X X Extracts X X X X
X X X X Extracts X X X X
....05, 1.e., right from the Assessment Year 2005-06. However, no returns of income for the Assessment Years 2005-06 to 2007-08 are not filed. The reason for not filing the return of income for the earlier Assessment Years is obvious as the time for filing the return of income has lapsed by the time the assessee pretended to file the return as status of firm. 7. Even the returns filed for the Assessment Year 2008-09 and 2009-10 are belated and the assessee clearly mentions the number of seized material in the said returns. The reasons for filing such return shows the intention of the assessee to distract the attention from the main issues involved in the seized material. 8. The assessee instead of explaining the contents of the seized material found in his premises, throwing the onus on the Department to prove the seized book and the contents therein as belonging to him. As was said by the assessee himself in the above written submission dated 24.12.2010, the seized book was found in his premises containing the writings of his employees, who admitted that the transactions were noted as per the direction of their employer and the funds they dealt with belong to the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d as per the entries made in A/SVS/BUS/14, the receipts therein for different periods are as follows, after excluding the donations made by certain individuals in the name of Vinoba Nagar Development Society :- Financial Year Amount (Rs.) 2004-05 13,00,000 2005-06 31,26,000 2006-07 3,44,22,300 2007-08 2,69,73,000 1.4.08 to 21.8.08 1,16,44,500 Total 7,74,65,800 Accordingly, the total receipts in the impounded book for the period relevant for the Assessment Year are quantified at Rs. 3,44,22,300/- and the same are assessed as undisclosed income of the assessee from land transactions." 9. Aggrieved by the assessment order, the assessee preferred appeal before the learned CIT(A). Before the learned CIT(A), the assessee has filed detailed written submissions on the issue which has been reproduced at para 4.1 at page 10 to 14 of the CIT(A) order. The sum and substance of the arguments of the assessee before the learned CIT(A) are that, the Assessing Officer erred in making addition of Rs. 3,44,22,300/- towards undisclosed income from the land transactions on the basis of Lokpriya book found during the survey, even though, the entries ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ant that he received only commission income. When the assessing officer confronted the appellant about the business of land purchase and sale in the individual capacity, the appellant came out with the different plea stating that he earned only commission income and balance transactions belong to firm. The assessing officer has rejected the contention of the appellant that the transactions recorded in the impounded material belongs to firm for want of documentary evidence. During the course of the appellate proceedings also, the appellant did not bring out any material in support of the claim that the transaction recorded in the material belongs to firm and the same were reflected in the income tax return filed by the firm if any. The mere submissions made by the appellant during the course of the appellate proceedings is not acceptable evidence. The AR of the appellant did not rebut the findings of the assessing officer in the order of the assessment and remand report with any documentary evidence. I fully agree with view of the assessing officer in the remand report. The assessing officer correctly came to conclusion based on statement recorded u/s. 132(4) of the IT Act and other....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... other hand, supporting the order of the Assessing Officer and CIT(A) submitted that, Lokpriya book containing 381 pages found during the course of survey clearly shows unaccounted land transactions of the assessee. Sri B. Sriramulu employee of the assessee very categorically explained the entries contained in the notebook and stated that, certain people have come and paid money for the purpose of allotment of land at Andhra Pradesh Bhoodan Yagna Board or M/s. Vinoba Nagar Development Society. He further stated that, one Mr. Raghava Rao has paid an amount of Rs. 2,50,80,000/-. The Assessing Officer has cross-examined Mr. Raghava Rao and recorded his statement under section 131 of the Act, where he has confirmed amount paid to the assessee for land transactions. The Assessing Officer has analysed the transactions and came to the conclusion that, the assessee has received money from various people for land transactions, but, same has not been reported in the return of income for the relevant assessment years. Although, the assessee has come out with different versions at subsequent stages and introduced a Firm, but, the fact remains that, the Firm has taken PAN in the year 2009 after....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Counsel for the Assessee for the simple reason that, the assessee is making an oral argument without any documentary evidences to substantiate his claim with entries contained in the book pertains to Firm and M/s. Vinoba Nagar Development Society either by filing the financial statements of society or explaining the entries contained in the book with reference to the books of accounts of the Firm. Further, as narrated by the Assessing Officer, the so-called Firm was incorporated or formed on 25.03.2007 and the return of income for the assessment year 2008-2009 was filed only on 12.11.2009 i.e., almost 15 months after the date of survey/ search. Further, the Firm has obtained PAN vide their application dated 09.10.2009 i.e., before filing the return of income, whereas the transactions recorded in the Lokpriya book starts from 11.01.2005 i.e., right from assessment year 2005-2006. If at all the arguments of the assessee is correct that, the transactions pertains to Firm, the assessee should have filee the return of income of the Firm from assessment year 2005-2006 onwards. Therefore, in our considered view, the assessee could not explain the transactions with relevant evidences ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nts belongs to searched-person and the contents of such documents are true and further, the signature or every other part of such document is in the handwriting of any particular person. Therefore, in our considered view, the arguments of the Counsel for the Assessee in light of decision of Hon'ble High Court of Telangana and Andhra Pradesh in the case of Gajjam Chinna Yellappa (supra) and decision of Hon'ble Supreme Court in the case of CIT vs., S. Khader Khan Son (supra), is devoid of merit and cannot be accepted. 14. In this view of the matter and considering he facts of the case, we are the considered view that, the Assessing Officer has rightly made addition towards undisclosed income from land transactions on the basis of 'Lokpriya' book found and impounded during the course of survey. The learned CIT(A) after considering the relevant facts, has rightly sustained addition made by the Assessing Officer. Thus, we are inclined to uphold the order of the learned CIT(A) on this issue and reject the ground taken by the assessee. 15. The Next issue that came-up for consideration from ground nos.2 to 5 of assessee's appeal is addition of Rs. 1,30,94,500/- towards unexplained ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eir statements recorded during the course of search and survey admitted that, these credits pertains to the assessee for his land transactions. Although, the assessee claims to have accounted the said receipts in the hands of Partnership Firm, but, upon perusal of relevant details, it was noticed that, the Firm is claimed to have been formed on 25.03.2007, but, the return of income for the assessment year is 2008-2009 was filed only on 12.11.2009 i.e., almost 15 months after the date of survey/search. The Assessing Officer further noted that, the Firm had taken PAN vide their application dated 09.10.2009 i.e., before filing return of income. Therefore, observed that, if at all the bank account transactions pertains to Firm, then, the assessee could not explain as to why the said credits not rooted through the bank account of the Firm and also the return of income of the Firm has not been filed from the assessment year 2005- 2006. The Assessing Officer rejected the arguments of the assessee and also took support from the legal presumption contained under section 132(4A) of the Act and observed that, the assessee has failed to offer any explanation with regard to credits appearing in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....08 stated that credits in said bank accounts were his own money which was deposited in the names of employees. The total income admitted was Rs. 1.78 Crores. When the assessing officer confronted the appellant about the credits in the bank accounts, the appellant came out with the different plea stating that he earned only commission income and balance transactions belong to firm. The assessing officer has rejected the contention of the appellant that the transactions recorded in the impounded material belongs to firm for want of documentary evidence. During the course of the appellate proceedings also, the appellant did not bring out any material in support of the claim that the transaction recorded in the material belongs to firm and the same were reflected in the income tax return filed by the firm if any. The mere submissions made by the appellant during the course of the appellate proceedings is not acceptable evidence. The AR of the appellant did not rebut the findings of the assessing officer in the order of the assessment and remand report with any documentary evidence. I fully agree with view of the assessing officer in the remand report. The assessing officer correctly ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....individuals viz., Mr. V. Sreenu, Mr. S. Shyam Kumar, Mr. B. Sriramulu and Mr. K. Srinivas Reddy in three different banks i.e., in Corporation Bank, Andhra Bank and HDFC Bank at Hyderabad and the Assessing Officer has recorded their statements on oath on 22.08.2018. All the four persons in their statement recorded during the course of search admitted that, the bank accounts are opened and operated by Sri G. Rajender Reddy in their names and credits in the bank accounts pertains to amount received towards land transaction. The Assessing Officer has analysed the bank account maintained with Corporation Bank, Andhra Bank and HDFC Bank and observed that, the assessee has periodically deposited cash into bank accounts and there are certain withdrawals. On analysis of the withdrawals, it is seen that, all the withdrawals are made for the purpose of B.Ed college construction and M/s. Vinoba Nagar Development Society purpose [indicates M/s. Vinoba Nagar Development Society] etc. Further, during the course of assessment proceedings, the Assessing Officer has confronted the documents found during the course of search and statements of four individuals also and statement of the assessee under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....with a different argument at subsequent stages that, credits in bank account pertains to Partnership Firm, but, the Assessing Officer has negated the arguments of the assessee, in light of date of formation of Partnership Firm and subsequent application filed for obtaining PAN and date of filing the return of income for the assessment year and noted that, assessee has filed return of income for the Firm for the assessment year 2008-2009, after the date of search and it is only an afterthought. Therefore, from the findings recorded by the Assessing Officer in light of documents found during the course of search, it is very clear that, the credits in the bank accounts of the employees of the assessee are pertains to unaccounted transactions of the assessee for the relevant assessment year. 22. Having said so, let us come back whether credits in the bank accounts of the assessee are standalone transactions pertains to uncounted income of the assessee or it was out of unaccounted income from land transactions. Learned Counsel for the Assessee referring to relevant bank account statements and 'Lokpriya' book found during the course of survey argued that, there are periodic deposits a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es of the assessee, certain photocopies of donor cheques in favour of CBIT and letters addressed to CBIT, Gandipet, Hyderabad were found. The assessee was asked to explain the banker cheques and in response to question no.11, he stated that, he has paid an amount of Rs. 5,00,000/- as donation to CBIT for admission of his son Mr. Krishna Chandra for BE course. This amount of Rs. 5,00,000/- was paid by 10 individuals who are his friends and relatives. The assessee had also given details of persons who gave money. During the course of assessment proceedings, the Assessing Officer called-upon the assessee to explain the source for donation paid to CBIT. In response, the assessee submitted that, he has paid donation in financial year 2006-2007 and refunded the money to 10 persons during the financial year under consideration. The Assessing Officer after considering the relevant submissions of the assessee observed that, on-going through the photocopies of banker chequs for Rs. 50,000/- each in 10 numbers, totalling to Rs. 5,00,000/- it is noticed that, they are all issued by ICICI Bank, Dilsukhnagar Branch, Hyderabad. Further, only the letters accompanying them are signed by different i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee has paid Rs. 5,00,000/- donation to CBIT for getting admission to his son in BE course. Although, initially the assessee claims to have explained the source out of money received from 10 individuals and also furnished their names, but, could not substantiate his claim with relevant evidences. Even before us, the assessee could not furnish any details to substantiate his claim that, 10 people have paid Rs. 50,000/- each towards donation. Therefore, we cannot accept the argument of the assessee. Further, in so far as alternative argument of the assessee that, if at all, the addition is sustained towards donation paid to CBIT, then, benefit of telescoping should be allowed out of addition made towards undisclosed income from land transactions, in our considered view, the Assessing Officer has made addition towards undisclosed income from land transactions of Rs. 3,44,22,300/- which is available with the assessee to explain the source for donation of Rs. 5,00,000/- paid to CBIT. Further, the benefit of telescoping can be allowed, in case, any addition is made towards income and expenditure on the basis of seized material. Since, the addition towards donation is also from the very sa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the learned CIT(A), the assessee is now, in appeal before the Tribunal. 33. CA, P. Murali Mohan Rao, Learned Counsel for the Assessee referring to the return of income filed by the assessee for the assessment year 2007-2008 submitted that, the assessee has admitted gross receipt of Rs. 89,22,582/- which includes commission from real estate business. Further, the assessee has explained the relevant details to the Assessing Officer, but, the Assessing Officer without considering the relevant details, has simply made the addition. The learned CIT(A) without giving any reasons sustained the addition towards commission income from land transactions. Therefore, he submitted that, the addition made by the Assessing Officer and sustained by the learned CIT(A) should be deleted. 34. Sri Gurpreet Singh, learned Sr. AR for the Revenue, on the other hand supporting the order of the learned CIT(A) submitted that, the assessee has admitted receipt of Rs. 45 lakhs from one Sri Murali Goud for land settlement and the same is outside the books of accounts of the assessee. The argument of the Counsel for the Assessee that, this amount is included in the gross receipts offered for the year ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aken by the assessee. 36. In the result, appeal ITA.No.1848/Hyd./2019 of the assessee for the assessment year 2007-2008 is partly allowed. ITA.No.1846/Hyd./2019 - A.Y. 2005-2006 : 37. The assessee has raised the following grounds in the instant appeal : 1. "The order of the learned CIT(A) in confirming the order of the AO is not only erroneous both on facts and in law but is without application of mind as none of the submissions that are made are considered and dealt with. 2. The learned CIT(A) failed to appreciate that there was nothing in the seized material of the AO has brought on record any evidence in the form of purchase deed or sale deed to demonstrate that the assessee is engaged in land purchase and sale to hold that the receipts recorded in the seized material A/SBS/BUS/14 relate to such income and has not conducted any enquiry whatsoever from the date of search to the date of competition of assessment in spite of there being references of mobile numbers in the seized material and thereby erred in confirming the addition of Rs. 13,00,000, without considering the submissions. 3. The learned CIT(A) further failed to appreciate that it is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on made by the assessing officer towards undisclosed income from land transactions. 40. The next issue that came-up for consideration from ground nos.5 and 6 of assessee's appeal is addition towards unexplained investment in house property for Rs. 9,08,650/- 41. During the course of search proceeding, it is noticed that, Mr. Krishna Chandra, son of the assessee had made an investment for purchase of residential Flat-404, 5th Floor, Subhalaxmi Apartments, Green Hills Colony, Kothapet, Hyderabad in January 2005. The assessee was asked to clarify the source for such investment and in response, the assessee admitted that, investment was made by him and that, the total consideration including the registration fee and modification of Flat comes to Rs. 9.08 lakhs. The assessee further stated that, source for the above investment is paid out of the HUF funds of Rs. 2,15,000/- was paid by his mother Smt. Andalamma and balance of Rs. 93,650/- was made by his wife Smt. Vijaya Lakshmi. The Assessing Officer after considering the submissions of the assessee observed that, the claim of the assessee that, his mother handled the funds of HUF and the HUF has the sources of Rs. 6,00,000/- cann....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch, the assessee clearly stated that, he has made the investment in Flat in the name of his son and the source was, out of amount received from HUF, from his wife and mother. Therefore, the argument of the assessee that, there is no evidence with the Assessing Officer to come to the conclusion that, investment is made by the assessee is not based on any evidence is incorrect and cannot be accepted. Further, the assessee has clearly admitted having invested the money for purchase of Flat in the name of his son, but, could not explain the source with relevant evidences. Although, the assessee claims to have paid consideration for purchase of Flat out of amount received from HUF, but, going by the ITRs filed by the HUF for the relevant assessment years, we find that, HUF has reported very meagre income, which is not sufficient to explain investment made in purchase of house property. Further, the assessee also could not be able to justify the amount received from his wife and mother. In absence of any evidence, the arguments of the assessee that, source for purchase of property, is out of amount received from HUF, mother and wife cannot be accepted. The Assessing Officer after conside....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y undisclosed income. 5. The learned CIT(A) though states that the AO has discussed the reasons elaborately in the assessment order failed to deal with the submissions of the assessee both at the time of assessment and in appeal and erred in not discussing about it except reproducing them and not passing a reasoned order as to why such submissions are not tenable. (Tax effect-Rs.9,65,934) 6. For these and other grounds that may be urged, it is prayed that the Hon'ble Tribunal may be pleased to allow the appeal". 48. The only issue that came-up for consideration from ground nos.2 to 5 of assessee's appeal is addition towards undisclosed income from land transactions for Rs. 31,26,000/-. 49. We find that, an identical issue has been considered by us in assessee's own case for the assessment year 2007-2008 in ITA.No.1848/Hyd./2019. But for the figures and facts, the issues involved in this appeal are identical to the issue which we have considered for the assessment year 2007-2008. The reasons given by us in preceding paragraph nos.12 to 14 shall mutatis mutandis apply to this appeal ITA.No.1847/Hyd./2019 for the assessment year 2006-2007 as well. Therefore, for sim....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessee both at the time of assessment and in appeal and erred in not discussing about it except reproducing them and not passing a reasoned order as to why such submissions are not tenable. 6. The learned CIT(A) erred in confirming the addition of Rs. 42,41,280 as unexplained deposits into bank accounts of employees without appreciating the submission that all of such receipts relate to the entries in the seized book for survey and plotting work done by the firm and were drawn and spent for such work by them and are considered in the firm's returns that are filed. 7. The learned CIT(A) erred in confirming the addition of Rs. 50,00,000 as unexplained donation to Vinobha Development Society without appreciating that the such society is registered u/s. 12A of 1.T.Act and nothing is reflected in its books as donation by the assessee and further relying only on statement that the assessee donated Rs. 50 lakh though clarified that he helped the society getting donation of Rs. 50 lakh. This is enough example to demonstrate that there is lack of application of mind while confirming the orders of the AO. (Tax effect Rs. 1,11,90,212) For these and other grounds tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....actively engaged with M/s. Vinobha Nagar Development Society, dealing in real estates. Further, the contents in the impounded material A/SVS/BUS/14, shows donation payment to M/s Vinoba Development Society. Sri G. Rajender Reddy was asked about his contribution to the above society. In the statement under section 132(4) recorded on 22.08.2008, he stated that, he has made total contribution of Rs. 50 lakhs to M/s. Vinobha Nagar Development Society for the period from December 2005 to till the year 2008. He has neither given any further details on the expenditure, manner in which he has contributed the said amount of Rs. 50 lakhs to the Society. He has also not given any source from where he has drawn this amount and made the said contribution to the Society. During the course of assessment proceedings, the Assessing Officer called-upon the assessee to explain the source for donations paid to M/s. Vinobha Nagar Development Society. In response, the assessee submitted that, he is only an Office Bearer of the Society, and he was instrumental in Society get substantial amount of funds, but he has not made any donation to the Society. The Assessing Officer after considering the relevant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ubmitted that, the addition made by the Assessing Officer should be upheld. 61. We have heard both the parties, perused the material on record and gone through the orders of the authorities below. There is no dispute with regard to fact that, the addition made by the Assessing Officer towards donations from undisclosed income is neither based on any evidence collected during the course of search nor clear admission from the assessee, which is evident from the statement recorded during the course of search, where the assessee has given a vague reply and stated that, he has paid donation of Rs. 50 lakhs from December 2005 to 2008 i.e., up-to the date of search. Further, there is no clear particulars as to date, on which, such donation was paid by the assessee and further, whether said donation was paid in cheque or cash. In absence of any evidence, in our considered view, the addition made by the Assessing Officer only on the basis of statement of the assessee, cannot be sustained. This principle is supported by the decision of Hon'ble High Court of Telangana and Andhra Pradesh in the case of Gajjam Chinna Yella vs., ITO (supra), where, it has been clearly held that, "where assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s nothing in the seized material of the AO has brought on record any evidence in the form of purchase deed or sale deed to demonstrate that the assessee is engaged in land purchase and sale to hold that the receipts recorded in the seized material A/SBS/BUS/14 relate to such income and has not conducted any enquiry whatsoever from the date of search to the date of competition of assessment in spite of there being references of mobile numbers in the seized material and thereby erred in confirming the addition of Rs. 1,16,44,500 without considering the submissions. 3. The learned CIT(A) further failed to appreciate that it is settled law that every receipt cannot be revenue receipt or that it is income and further erred in not considering the submissions about the discrepancy by the AO in considering the amount as against the claim of the assessee that the receipts are considered in the hands of the firm and amount is also not correctly arrived at. 4. The learned CIT(A) further failed to appreciate the settled principle of law that not only there should be a source for income but also there should be evidence as to where the same is appearing as investment or otherw....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and erred in confirming the disallowance of Rs. 1,13,000. (Tax effect - Rs. 34,917) For these and other grounds that may be urged, it is prayed that the Hon'ble Tribunal may be pleased to allow the appeal." 69. Brief facts of the case are that, during the course of assessment proceedings, the Assessing Officer has disallowed capital expenditure of Rs. 84,695/- towards purchase of mobile phones, further, since TDS has not been made on certain payments, the AO disallowed a sum of Rs. 89,000/- and Rs. 1,13,680/- towards accounting charges and advertisement respectively, u/s 40(a)(ia) of the Income Tax Act, 1961 which have been debited in the P & L A/c and added to the total income of the assessee vide order dated 22.03.2013 u/sec.143(3) r.w.s.147 of the Income Tax Act, 1961. 70. On being aggrieved by the assessment order, the assessee preferred appeal before the learned CIT(A) and the learned CIT(A) after considering the relevant submissions of the assessee, partly allowed the appeal of the assessee by directing the Assessing Officer to allow depreciation at the rates allowable to a computer on mobile phone of Rs. 84,695/-. Further, the learned CIT(A) directed the A....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... making TDS and, therefore, when the assessee has furnished relevant ledger extract copies and proved that, all payments are below the threshold limit for application of sec.194C, then, the learned CIT(A) ought to have deleted the addition made by the Assessing Officer. We find that, assessee except making oral statement that, payment made to individual person does not exceed the specified limit by furnishing ledger account, but, could not file any evidence to justify his case that, amount debited under the Head "Advertisement Expenses" does not come under the provisions of sec.194C of the Income Tax Act, 1961. Therefore, we are of the considered view that, there is no error in the reasons given by the learned CIT(A) to sustain the addition made by the Assessing Officer towards advertisement charges. Thus, we are inclined to uphold the order of the learned CIT(A) and reject the ground taken by the assessee. 75. In the result, appeal ITA.No.1851/Hyd./2019 of the assessee for the assessment year 2007-2008 is dismissed. 76. To sum up, appeals ITA.Nos.1848 and 1849/ Hyd./2019 of the Assessee are partly allowed and ITA.Nos.1846, 1847, 1850 and 1851/Hyd./2019 of the Assessee are di....
X X X X Extracts X X X X
X X X X Extracts X X X X
....815 02 S. Shyam Kumar BIVPS6137G 2736 03015966 4182000003825 03 B. Sriramulu AKHPB0874C 2737 03015965 4182000003832 04 K. Srinivas Reddy APYPK7337K 2740 01010941 4182000003808 Q. 15 Please state about the details of the above persons and in what capacity you have maintained the above mentioned register. Ans. The name mentioned at Sl. No. 1 is of mine, Sl. No. 2 is an old employee of M/s. SVS Group and left the organization about two years Back and presently in Marriguda Village, Nalgonda Dist. The names mentioned at Sl. No. 3 & 4 i.e., Mr. B. Sriramulu and Mr.K. Srinivas Reddy, are my assistants and assisting me in survey of lands. Q. 16 As seen from the annexure A/SVS/Bus/01 dated 22.08.2008, in all the above bank accounts there were huge cash deposits and withdrawals and the purpose for which the withdrawals were made were also written. Please furnish the complete details of the transactions appearing in the register. Ans. I submit that all the above bank accounts are benami of Sri G. Rajender Reddy. The sources for the cash deposits appearing in the above four accounts are out of the funds given by Sri G. Rajender Reddy. Myself and the other three persons me....
X X X X Extracts X X X X
X X X X Extracts X X X X
....heques are made as desired by Sri G Rajender Reddy and I am not fully aware to whom the cheques were issued. Since I am working with Sri G Rajender Reddy, I am signing the cheques as per his directions. " (C) Statement of Sri B Sriramulu dtd.22.08.2008: " Q No.9. / am showing you annexure A/SVS/Bus/01 dated 22.08.2008 which is a register (nobel) found and impounded from the business premises of M/s. SVS Xerox, Dr. No. 11-13-1100, 15t Floor, Dwarakanagar, NH-9, Kothpet, Hyderabad. Please go through the same, confirm the handwriting and explain the contents of the register. Ans. I submit that I have gone through the annexure A/SVS/Bus/01 dated 22.08.2008. I confirm that the handwriting appearing in the register belongs to Mr.V.Srinivas Reddy who is working as a surveyor in MISSVS group. This register relates to the bank accounts maintained in rcio-6 the name of the persons: 10 Document 2 S. N. Name PAN No. Corp Bank Andhra Bank HDFC Bank 01 V. Sreenu AEKPV0454R 2735 03015960 4182000003815 02 S. Shyam Kumar BIVPS6137G 2736 03015966 4182000003825 03 B Sriramulu AKHPB0874C 2737 03015965 4182000003832 04 K. Srinivas Reddy APYPK7337K 2740 01010941 4182000003808 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stance of the assessee to suit his needs. He has opened all these three accounts with the said cash deposit. Like-wise, on 4-11-06, there is a cash deposit of another Rs.2 lakhs in all the three accounts and a cash deposit of Rs.4,50,000/- in the name of Sri K.Srinivasa Reddy while opening the said account. Further, on 7-11-06, there is an identical cash deposit of Rs.3 lakhs in all the four accounts and on 8-11-06, it is observed that there is a cheque issued in each account favouring "Sri Andal Educational and Cultural Society" in which the assessee, Sri G.Rajender Reddy is Chairman. This demonstrates very clearly that the money for the purpose of Sri Andal Educational and Cultural Society has been routed through the said four bank accounts which have been used as conduits to make anybody believe that the said transactions/donations are genuine as they have come through regular banking channel. On further examination of the said Register, it is noticed that on 03-11- 06, cheques have been issued from the accounts of Sri V.Sreenu, Sri B, Sriramulu and Sri K.Srinivasa Reddy for an identical amount of Rs.2,50,000/ -. On 4 1 07 there is a cash deposit of Rs.2 lakhs, Rs. 1 lakh and....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... same date, Document 3 i.e., in the account of Sri S Shyam Kumar a Self Cheque has been issued for an amount of Rs.3,50,000/- with particulars coluimn showing ' Construction B.Ed., College to Krishna Reddy ' .On 22-02-2007 there are withdrawals of Rs.4 lakhs in the account of Sri V Srrinivasa Reddy, Rs.6 lakhs in the account of Sri B Sriramulu and Rs.5 lakhs in the account of Sri S Shyam Kumar respectively with particulars column showing ' Kuntlur Land Registration '. On 02-03-2007 it is seen that in all the four accounts there is an identical cash deposit of Rs.2,50,000/ -. Similarly there is a withdrawal of Rs.2,50,000/- from all the four accounts by way of issue of Self Cheque with the particulars column showing ' Construction Purpose ' on 08-03-2007. On going through the Bank account extract of Andhra Bank, Kothape Branch, of the assessee Sri G Rajender Reddy i.e., C.A/01/00000404 it is noticed that on 31-01-2007 there is a cash deposit of Rs.5 lakhs in his individual account also, on which date there is an identical cash deposit of Rs.5 lakhs in the accounts of his above mentioned four employees. (iii) Bank accounts with HDFC Bank: Similarly the Register and bank ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Sri G Rajender Reddy. The assessee Sri G. Rajender Reddy, in his statement recorded on 22.08.2008 U/s. 132(4) stated that the credits in the iosaid Bank accounts were his own money which was deposited in the names of This employees and accepted the credits in the said accounts as his unaccounted income and further said he will pay taxes on the same. irete-6, But The relevant portion of the 132(4) statement of Sri G.Rajender Reddy, dated 22-08-2008 is reproduced hereunder: " Q.25. Please refer to Q.No. 12 of the statement and your reply to the same, wherein, you have stated that persons, viz., Sri V. Srinivas, Sri S.Shyam Kumar, Sri B.Sriramulu, Sri K.Srinivasa Reddy are your employees and have been drawing salaries of approx.Rs.3,000/- per month. Please go through the relevant page No.5 and 6 of the statement. We have further found that there are huge cash deposits in the bank a/cs of these persons in Corporation Bank, Andhra Bank and HDFC Bank. A list of these bank a/cs and the cash deposits in the same has been prepared and shown to you. We are also showing you the relevant bank statements. Please go through these bank statements carefully and offer your comments on the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... as real estate commission and also settlement of land disputes? Ans. Out of the amount of deposits on 03/11/2006 Rs.2.5 lakhs, on 04/11/2006 Rs.2 lakhs and on 07/ 11/2006 Rs.3 lakhs an amount Rs.5 lakhs received from Sri Raghava Rao R/o Vanasthalipuram, for the settlement of disputed land at Adipatla (V), Ibrahimpatnam (M), R.R. Dist. Q.11 I am showing you Nobel note book, which is impounded during the course of survey uls 133A from the business premises of M/s SVS Xerox, D. No. 11-13-1100, Dwarakanagar, Kothapet, Hyderabad annexed as A/SVS/BUS/01. At page No. 53, there appearing a cash deposit of Rs.5 lakhs on 31/01/2007 in Andhra Bank, A/c No. ABG/01/03015965. Please explain the sources for the said amount? Ans. The amount of Rs.5 lakhs received from Sri Raghava Rao R/o Vanasthalipuram, for the settlement of disputed land at Adipatla (V) Ibrahimpatnam (M), R.R. Dist. Q. 12 I am showing you Nobel note book, which is impounded during the course of survey u/s 133A from the business premises of M/s SVS Xerox, D. No. 11-13-1100, Dwarakanagar, Kothapet, Hyderabad annexed as A/SVS/BUS/01. At page No. 93, there appearing huge cash deposits of Rs.5 lakhs in HDFC Bank A/c No. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tutored by the assessee and their employer, Sri G Rajender Reddy. In view of the above discussions, it is very clear that whatever transactions done through the Bank accounts in these four accounts are done by the assessee Sri G Rajender Reddy himself to suit his needs by using the names and services of his four employees. Thus the amounts credited in the bank accounts of the four employees of the assessee, totaling to Rs. 1,73,35,780/- are to be assessed in the hands of the assessee only. The credits for the period 2006-07, relevant for the Assessment Year 2007-08 are Rs. 1,30,94,500/- 3.8 Assessment proceedings: During the course of present proceedings, the assessee was again given an opportunity of explaining his stand. The assessee submitted that the entire deposits appearing in the Annexure A/SVS/BUS/01 were considered in the returns of income filed by Gunna Rajender Reddy & others as firm in Range-9 for the Assessment Years 2008-09 and 2009-10. Again vide his written submissions dated 24.12.2010, the assessee substantiating his retraction from the statement given on 22.08.2008 admitting the credits appearing in the bank accounts as belonging to him, stated that what sor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....return for the Assessment Year 2008-09 was filed only on 12.11.2009, be., almost 15 months after the date of survey / search. 4) One more intriguing fact to show that the status of the firm is a clear after-thought of the assessee is that after forming the firm in the year 2007, the PAN for the said firm was obtained vide their application Central * Ass !. dated 09.10.2009, i.e., before filing the returns of income. It is not understood why the firm has taken such a long time to get its PAN, though it started its activities from 25.03.2007, going by the assessee's version. 5) The date of opening the bank accounts started on 03.11.2006 in the names of the employees and the credits were also made right from 03.11.2006. When the so-called firm came into existence from 25.03.2007, how the credits were made in the bank accounts is not explained by the assessee. 6) Though the assessee claims that a return was field return in the status of firm considering the contents of the seized book for the Assessment Year 2008-09, the credits during the period 03.11.2006 to 31.03.2007 relevant for the Assessment Year 2007-08 are not considered. The reason for not filing the return of ....