TaxTMI 
TaxTMI 
2023 (2) TMI 1453
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....e : Shri Rajendra Kumar, CIT(DR) ORDER PER BENCH: The captioned appeals filed by the respective assessee are directed against the separate orders dated 30/11/2022 of the learned CIT (A)-12, Hyderabad relating to respective assessment years. Since identical grounds have been raised by the respective assessee in all these appeals, therefore, all these appeals were heard together and are being disposed of by this common order for the sake of convenience. 2. First, we take up ITA No. 20/Hyd/2022 for the A.Ys 2016-17 relating to assessee namely, Kanipakam Hariprasad Reddy as the lead case. The grounds raised by the assessee in this appeal read as under : "1. The learned CIT (Appeals) has erred in facts and law while passing the order. 2. On the facts and Circumstance of the case, notice issued u/s 153C is not valid and consequent Assessment is bad in law. 3. On the facts and circumstance of the case, the Learned CIT(A) is not justified in confirming the addition made of Rs. 42,38,128/- under Section 69 of the I.T. Act. 4. On the facts and circumstances of the case, the Learned CIT(A) would have appreciated that the satisfaction recorded by....
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....d the information furnished, the AO has stated that the assessee during the assessment year 2017-18 paid "on money" amount in cash of Rs. 42,38,128/- towards consideration over and above the amount mentioned in the sale document which was duly recorded in the books of the developer company i.e., M/s. KMR Estates and Builders Private Limited. The Assessing Officer in Para 4.2 to 4.7 of his order had given the details of money paid by the assessee by cheque as well as by cash on the basis of the seized documents. Further, the Assessing Officer had made pro-rata addition for A.Ys 2016-17 to 2019-20. The relevant paragraphs of the assessment order, are reproduced hereinbelow for the sake of completeness : "4.2. Further, during the course of search proceedings, Sri Kolla Madhava Reddy, MD submitted details of the villa buyers and respective payments received through bank and by way of cash. With respect to the Villa No. 29 purchased by the assessee from M/s. KMR Estates and Builders Private Limited, he submitted that the assessee has paid Rs. 3,49,73,003/- to the developer Rs. 1,93,73,003/- through bank and Rs. 1,56,00,000/- in cash. 4.3. The company M/s. KMR Estates a....
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.... is corroborated by the statement of Sri Kolla Madhava Abhilash, who stated that the printout has a list of 25 villas on whose sale KMREBPPL has received consideration in cash along with cheque payments from the villa buyers. Further, certificate u/s 65B of Indian Evidence Act issued by Digital Forensic Examiner during the search proceedings gives the aforesaid document evidentiary value even though it is secondary evidence. Therefore, the satisfaction present proceedings initiated u/s 153C are completely valid and legal. 4.7. Further, the assessee denied making any cash payments over and above the payments made through banking channel for purchase of villa. However, from the incriminating material seized vide page no. 1 of annexure A/KMR/RES/01, it is evident that the assessee has paid Rs.1,56,00,000/- in cash for purchase of villa. Accordingly, the cash payment of Rs.77,278/- (in proportion to payments made through bank) made during the year under consideration is treated as unaccounted income representing unexplained investment u/s. 69 of the Act and taxed according to the provisions of section 115BBE of the Act. Penalty proceedings u/s. 271AAC of the Act are initiated ....
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....to 48) issue of notice U/s 153C was held as illegal. The Court observed that the satisfaction should be assessment year specific and incriminating evidence specific. It was held that the satisfaction should indicate the Assessment year and the incriminating evidence relatable to that assessment year. A general satisfaction, which is vague, will not meet the requirement of law to initiate the proceedings U/s 153C. This case emphasizes the need for closer scrutiny of seized papers and establishing a co-relation. This Judgment has since been affirmed by the Supreme court in CIT Vs Sinhgad Technical Education Society [2017] 84 taxmann.com 290 (Paper Book page. No. 49 to 57). Ground No.3: Where seized documents were not in name of assessee no action could have been undertaken in case of Assessee under Section 153C and further entire decision being based on huge amounts revealed from seized documents not being supported by actual cash passing hands, additions under Section 69C were not sustainable. [2017] 83 Taxmann.com 161 CIT, Central -III, Mumbai Vs Lavanya Land (P)Ltd (Paper Book page. No. 58 to 70) Ground No.5: The A.O. used the admission of the d....
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....114 (Hyderabad - Trib.) ● Gayatri Enterprise Vs Income-tax ficer, Ward 1(2)4 - [2020] 116 taxmann.com 359 (Gujarat) ● Income-tax Officer Vs Bharat A. Mehta - [2015] 60 taxmann.com 31 (Gujarat) ● Commissioner Income-tax, (C) - III Vs Vineeta Gupta - [2014] 46 taxmann.com 439 (Delhi) Ground No.7: a) Block Assessment on basis of imaginations and surmises not founded on established facts is not sustainable. [2015] 59 Taxmann.com 375 High court of Andhra Pradesh and Telangana in the case of CIT Vs Balaji Steel Profiles. (Paper Book page. No. 116 to 119) b) In the case of K.V. Laxini Savitri Devi Vs. ACIT 6o DTR 148 (Paper Book page. No. 120 to 126) it was held by the ITAT Hyderabad Bench that "No addition can be made on the basis of a loose paper which does not contain the name and the date of payment. The department is precluded in drawing inferences on the basis of suspicion, conjecture and surmises and no addition can be made on the basis of such dump document or loose sheets. On further appeal before the Hon'ble AP High Court, the court vide its order in ITTA No.563 of 2011 (Paper Book page....
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....pugned order of Tribunal deleting addition was to be confirmed. Where Assessing Officer in course of block assessment proceedings made addition in respect of unexplained investment relating to purchase of property, in absence of any incriminating evidence with respect to payment over and above reported amount, addition so made deserved to be deleted. [2015] 56 taxmann.com 7 (Delhi) HIGH COURT OF DELHI Commissioner of Income-tax-XIV v. Vivek Aggarwal. (Paper Book page. No. 177 to 183) Ground No.9: The Assessing Officer has resorted to make the addition on mere loose paper without corroborative evidence. The document which does not describe and express any meaning cannot be relied upon by the Assessing Officer. It was held by Hon'ble Delhi High court in the case of CIT Vs Sant Lal vide [2020] 118 Taxmann.com 432 that "13. In view of the aforesaid facts and the concurrent findings given by the CIT (A) and ITAT, it is evident that the Revenue has not been able to produce any cogent material which could fasten the liability on the respondent. The CIT(A) has also examined the assessment record and has observed that the AO did not ....
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....o.01 and A/KMR/OFF/7 Pg No.07. The following are the justifications why the said seized annexures cannot be relied upon and which are not at all relevant for invoking the provisions of Section 153C. a) In the case of 2 assessee where the cheque payments were made in different assessment years the addition for alleged cash payment was made in one assessment year (Page No.11). Whereas in some cases it was in proportion to the cheque payments. b) The alleged documents seized by the department itself shows that an amount of 450.46 was pending on the date of search from different villa owners. Presuming that this alleged document is true, the AO has made addition of the total amount as if it is fully paid in the hands of the respective appellants. (Page No.12) c) In respect of Villa No 63 (ITA No. 4/Hyd/2023) the amount was mentioned as Zero in all the columns as per the seized document No Pg No.01 of A/KMR/RES/01 (Page No.13). However, in the document numbered as Pg No.07 of A/KMR/OFF/07 (Page No.14) it was mentioned under Agree value column 420 and under other columns Zero. However, the assessing officer made an addition of Rs. 2,50,25,000 in the ha....
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....ction note recorded by the AO alone. It is not permissible to virtually expand the scope of the contents of the satisfaction note to include the issues that have a bearing on the determination of total income but which do not find a place in the satisfaction note. The satisfaction note recorded by the AO to enable him to assume jurisdiction u/s 153C should reflect the satisfaction of the AO regarding the fulfillment of the conditions laid down in section 153C for assumption of such jurisdiction based on the issues identified by him in the satisfaction note, the evidences contained in the seized material referred by him in the satisfaction note with regard to such issues and the discussion regarding the reasons for arriving at the satisfaction in respect of the identified issues based on such seized material. Whenever the legal sustainability of the satisfaction note is subjected to challenge by the assessee, the same is required to be evaluated with reference to the reasons recorded in the satisfaction note for arriving at the satisfaction with regard to the conditions prescribed in section 153C for assumption of jurisdiction and it is not permissible to travel beyond what has been....
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....the event of challenge to the reasons, must be able to justify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing affidavit or making oral submission, otherwise, the reasons which were lacking in the material particulars would get supplemented, by the time the matter reaches to the Court, on the strength of affidavit or oral submissions advanced." (Emphasis supplied) 2. In the case of Aroni Commercials Ltd Vs DCIT [2014] 362 ITR 403 (Bombay), the Hon'ble High court held as under: "12. Therefore the power to reassess cannot be exercised on the basis of mere change of opinion i.e. if all facts are available on record and a particular opinion is formed, then merely because there is change of opinion on the part of the Assessing Officer notice under Section 147/148 of the Act i....
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....derlines section 147 is the formation of the belief by the Assessing Officer that any income chargeable to tax has escaped assessment for any assessment year. The Assessing Officer must have reason to believe that such is the case before he proceeds to issue a notice under section 147. The reasons which are recorded by the Assessing Officer for reopening an assessment are the only reasons which can be considered when the formation of the belief is impugned. The recording of reasons distinguishes an objective from a subjective exercise of power. The requirement of recording reasons is a check against arbitrary exercise of power. For it is on the basis of the reasons recorded and on those reasons alone that the validity of the order reopening the assessment is to be decided. The reasons recorded while reopening the assessment cannot be allowed to grow with age and ingenuity, by devising new grounds in replies and affidavits not envisaged when the reasons for reopening an assessment were recorded. The principle of law, therefore, is well- settled that the question as to whether there was reason to believe, within the meaning of section 147 that income has escaped assessment, must be d....
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.... permissible. No addition can be made to those reasons. No inference can be allowed to be drawn on the basis of reasons not recorded by him. He has to speak through the reasons." Their Lordships added that " the reason recorded should be self explanatory and should not keep the assessee guessing for reasons. Reasons provided the link between the conclusion and the evidence ..... ". Therefore, reasons are to be examined only on the basis of reasons as recorded by the AO. This analogy/ratio decidendi of the Hon'ble High court is applicable to the 'Satisfaction-Note' prepared by the AO when he recorded his satisfaction note in respect of a third person (assessee in this case) against whom he/AO proposed to invoke the special provision and issue notice under section 153C of the Act." 6. In view of the judicial precedents discussed in the preceding paragraphs, it is required to be considered that the satisfaction note recorded by the AO in the case of the appellants for AYs mentioned in the satisfaction note has to be tested/evaluated only on the basis of the reasons recorded in the satisfaction note at the time of issuing the notice under Section 153C of the Act. T....
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..... is required to bring further evidence on record to show that actual on money is exchanged between the parties, but literally failed to do so. The A.O. did not conduct any independent enquiry relating to the value of the property instead, merely relied upon the statement given by the purchasers of the property, which is not correct. Further, there is no proof of origin and destination of on money. The A.O. failed to prove the source of the purchasers as to how the money was arranged and also failed to prove the deployment of unaccounted money by the seller by any form of evidence. Under these circumstances, based on paper jottings as conclusive evidence on money cannot be brought to tax as income from undisclosed sources. The importance of having corroborative evidence on record to independently validate the entries of payments noted in the seized material found in the premises of a third party assumes much more significance where the alleged recipient of the said payments is an important constitutional functionary as that of the appellant, who was a Minister in the Government of Tamil Nadu during the relevant period. The Hon'ble Supreme Court observed in the case of ....
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....o the income tax proceedings also. Hence in the instant case, there is no other evidence found and also brought by the Assessing Officer to corroborate that the appellant has paid the cash over and above the document Value. In the absence of the same, the Assessment made by the Assessing Officer is invalid. 9. On the other hand, the ld. DR had drawn our attention to the order of ld. CIT(A) wherein he had dealt with various contentions of the Villas' owners. We are reproducing below some of the relevant portions referred by ld. DR for the purpose of understanding the case of the Revenue. 10. The ld. DR referred to Pages 45 and 46 of the order of ld. CIT(A) to the following effect : "The project name was" Luxuries" and was located at survey no. 78 to 93,Kondapur, Hyderabad. The project was started in the F.Y. 2014-15 and was spread out in Ac.12-26.6 guntas. Out of the said land, the company owned Ac.10- 01 guntas. The total project consisted of 69 villas ranging from 350 sq. yards to 595 sq. Yards in area. As on the date of the search, it was noted that the agreements were entered into for approximately 25 villas and the sale deeds were registered for 13 v....
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....n unaccounted cash. The documents pertaining to villa no. 32 assume importance and they were submitted by that appellant itself. There are three documents which have been duly signed by the owner of villa no. 32 Smt. P. Anusha along with the vendor no. 1 being the developer company. It is important to note that the developer company has already admitted the said position and only in the present adjudication the villa owners including the appellant are agitating the matter. It is seen that the agreement of sale was entered on 05.08.2016 and the first 3 pages of the said agreement indicating the name of the owner P. Anusha are brought out as under: ...................." 10.2 Thereafter, the ld. CIT(A) had reproduced the Agreement of Sale in the case of Ms. P. Anusha, W/o. Shri P. Govinda Reddy. He also referred to Schedules B and C of the Agreement of sale and he concluded as under : The schedule B mentions the residential house/villa no. 32 and not as a semi furnished villa but a proper residential house which is on a plot of land of 500 sq. yards with a construction area of 5629 sq. ft. The payment is mentioned in schedule C and is a ....
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....d from time to time by the developer from the villa owner. Thus, as the mode of the payment of this sum is unaccounted funds and has not been recorded in the books of accounts of the developer or the owner. The sources of these funds remain unaccounted. The page no. 6 of the agreement further mentions specifications which are part of the original agreement dated 05.08.2016 and which have not been mentioned in the registered sale deed dated 24.05.2018. This agreement also shows that the money has been received and there is no outstanding on the part of the buyer, thus the unaccounted cash was used for this purpose and the schedule of property in page no.5 mentions that the property is semi furnished, which implies that the modus operandi is to have agreements in case the work is not complete and later on take the cash or accommodate the cash and keep these transactions and agreement off the record. Thus, to sum up, the modus operandi was that initially the whole work was agreed upon between the parties and the consideration was needed to be paid as and when the final work was done. The consideration in cash for specific work was received by the developer in unaccou....
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....tion receivable through banking channel Column no. 4 - Part of sale consideration in cash, Column no. 5- Amount of cash received, out of the sale consideration in cash as mentioned in column no. 4 Column no. 6- The balance cash to be received, out of cash component mentioned in col. No. 4 (all the amounts are mentioned in lakhs} The tabular form of the above document is brought out as under: 2 350 825 25 0 25 3 550 400 150 60 90 4 350 275 75 75 -0 5 290 240 50 50 0 6 397 197 200 200 0 7 383.5 300 83.5 75 8.5 24 450 350 100 77.5 22.5 25 600 450 150 50 100 28 400 300 100 100 0 29 379 223 156 156 0 30 475 235 240 240 0 31 475 235 240 220 20 32 375 225 150 150 0 - 33 442 270 172 135 37 34 494 344 150 150 0 . 36 600 400 200 200 50 289.5 207 82.5 82.5 0 54 410 310 100 100 0 56 330 211.54 118.46 100 18.46 ....
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.... 150 61 510 456 250 54 0 63 0 0 420 0 0 64 1440.5 940 420 500.5 49.5 65 T 675 325 325 350 350 66 600 435 165 100 67 0 825 The explanation by Sri Kolla Madhava Abhilash, Director of the Developer company on the date of the search i.e. 04.02.2019 for page 1 of the seized material A/KMR/RES/01 was as under: "Q.11 I am now showing youqz print out of a picture extracted from your phone (Apple X) bearing the number (9553066666) which is seized vide page No. . 1 of Annexure A/ KMR/ RES/ 01. Please explain the contents of the note. A: I confirm that it is a printout from my phone which contains 6 'columns. These details pertain to the project "Luxuria". This is a list of 25 villas already sold out wherein registration have been completed in respect of some villas. The total receipts on account of sale of these villas is Rs. 117.91 crores. However, it includes both cheque payments as well as some cash component is also there which is received to meet cost of some extra works as per the choice of the buyer. The cas....
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.... appellant and the other buyers with regard to their bank statements and none of them including the appellant have raised any such dispute in the regard of the above factual conclusion." 11. It was pointed out by the ld.AR that at this juncture, the additions were not made by the Assessing Officer based on Annexure A/KMR/OFF/07. He had also submitted that the seized material Annexure A/KMR/RES/1 is a dumb document. It was submitted that the ld. CIT(A), wrongly took the help of Annexure A/KMR/OFF/07 to explain the dumb document. He had also drawn our attention to the satisfaction recorded by the Assessing Officer, u/s 153C of the Act which was reproduced by ld. CIT(A) at page 112 of his order, wherein the Assessing Officer had only relied upon seized material Annexure A/KMR/RES/01 to the following effect : "SATISFACTION NOTE U/S 153C OF THE INCOME TAX ACT Sri. Hari Prasad Reddy Kanipakam - PAN: AKEPK2041D - During the course of search, material was seized vide Annexure A/ KMR/ RES/ 01 & A/Kit/IR/OFF/ 07. As per the statement of Sri Kolla Madhava Abhilash, Director of KMR Estates & Builders Put. Ltd., recorded on 05.02.2019, the printout of a picture extracted from ....
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....n is made and for the relevant assessment year or years referred to in sub-section (1) of section 153A: As per the above provisions of section 153C, being the jurisdictional officer of Sri. Hari Prasad Reddy Kanipakam, I am satisfied that the document seized pertains to Sri. Hari Prasad Reddy Kanipakam and it has a bearing on the determination of the total income of Sri. Hari Prasad Reddy Kanipakam for six assessment years immediately preceding the assessment year relevant to the previous year in which search was conducted and accordingly, notice is being issued u/ s 153C for the assessment year ..... " 12. The ld. CIT(A) at pages 76 and 77 had referred to page 2 of Annexure A/KMR/RES/01 and on the basis of the above, the ld. CIT(A) had concluded as under : "The quantum of the unaccounted cash received by the company in certain cases has also been utilized for the additional works done as reflected in the seized document. The core document mentions the amount of cash paid by the appellant including the villa owner. One of the document pertaining to villa no.63 which was seized in page no. 2 of Annexure A/KMR/RES/01 is reproduced as under: Image left in....
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....sheet recorded at a certain -stage and at the final stage the sum of Rs. 2,50,25,000/- was settled. It is also important to note that the same working is done for villa no 63 and 64 for which the registered sale deeds were made on 03.06.2019 at identical amount of cheques and unaccounted cash. The address of the villa buyers no. 63 and 64 are the same that is R/O A 205, Jayakheti Orange County, Nanakrainguda, Hyderabad- 500032. The owner of villa no. 63 and villa no. 64 are related parties and belong to the same family. The above finding on seized document related to villa no.63 is also confirmed by Mr. K. Madhava Abhilash, Director of M/s .KMR Estates & Builders Pvt. Ltd., in his sworn statement recorded during the course of Search Proceedings on 04.02.2019. The final cash amount recorded for villa no. 63 and 64 is Rs.2,50,25,000/- each in the seized document table cumulatively recorded as Rs. 5,00,50,000/- in the page no. 1 of Annexure A/KMR/RES/01. Further on verification of bank account statements and books of account in Tally package, it was noticed that an amount of Rs. 4,00,00,000/- was received through banking Channel till that date. The registration was done subse....
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....bove in Annexure A/KMR/RES/01 in page no. 1, Annexure A/KMR/OFF/07 in page no. 7 and Annexure A/KMIRIRES/01 in page no. 2. These papers are corroborative and the paper no. 2 pertaining to villa no. 63 gives the breakup of the gash to be received after giving .due deduction of the supplies provided by the buyer. Further during the PO operations there was again a verification carried out with the appellant's books, bank statement along with the sale deeds, sale agreements and the incriminating material above which included the villa of the appellant and the following summary was brought out as under: Xxxxxxxxxxxxxx" 13. The ld.DR also relied on pages 105 to 115 of the order of ld. CIT(A) to the following effect : "It is seen that after the date of search, the registration value has increased gradually from 27.01.2020 (Villa No.60) to 05.02.2020(villa No. 25) to 24.03.2021 (Villa No.3). The plot no.3 bought at a later date being of the smallest size in area and plot was registered at a much higher value being at a later date and in a different year and the villa no.60 being of the largest size registered at a much lesser value. It is seen tha....
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....s very clearly established that the documents referred to the true state of affairs, identifies the villa owners and the appellant and that all of them were acting in concert to evade taxes with the developer company. The quantum of cash has been admitted by the developer company, further there is enough corroborative evidence brought on record to establish the concealing of information in the registered sale deed in respect of all the villas regarding the works done. The provisions u/s. 292C are very clear in this regard along with the admission of the recipient as already discussed above further enforces the factum of correctness of the addition made by the Assessing Officer. Therefore, the primary premises of the case laws have been rebutted in the above analysis and therefore the contention of the appellant on the legal basis is rejected. The appellant might like to take a plea that these documents are not signed. It is important to note that the Income Tax Department conducts search operation and these documents includes the one which were found and extracted from the mobile phones and seized accordingly. It is important to note that the agreements are at time signed ....
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....t has to be believed, it implies that the seller was only receiving cheque and was doing a charitable activity by doing the construction and interiors Out of its own pocket of its unaccounted income towards the interiors without charging to the villa owner including the appellant. The appellant to an extent has the audacity to believe that the adjudicating authority in the undersigned is too naïve to understand and appreciate the circumstances and the document. As a judicial authority, the undersigned is expected to appreciate the documents in toto and the harping of the same by the appellant that it did not pay the unaccounted cash arid it is not even aware of any such thing or cross examination has not taken place is merely trying to find reasons to pretend innocence. It is important to note that the appellant including the villa owners are a party in manipulating the documents by registering semi furnished villas with the SRO and the agreement of sale is for fully furnished villa as per desired specifications. Therefore, the appellant including the villa owners and the developer company are people acting in concert and the agreement of sale and the registered docum....
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....t are not explicitly mentioned. The work of interiors is a continuous process and there is a time lag between agreement of sale and registration and the Assessing Officer has been more than fair and just to the tax evader in fallowing the methodology. In the present case, the appellant has paid cheque amounts of Rs.95,969/- in AY 2016-17 Rs.52,63,158/- in AY 2017-18 Rs.1,19,13,876/-in AY 2018-19, and Rs.21,00,000/- in AY 2019-20 towards purchase of the villa. Accordingly, the AO has calculated the total unaccounted cash of Rs.1,56,00,000/- on pro rata basis in the above AY. 2016-17 amounting to Rs.77,278/-, AY. 2017-18 amounting to Rs.42,38,128/-, AY. 2018-19 amounting to Rs.95,93,581/- and AY 2019-20 amounting to Rs. 16,91,013/-. In view of the comprehensive discussion made above, the addition of unexplained investment u/s. 69 of Rs.77,278/- for the AY 2016-17 Rs.42,38,128/- for the AY 2017-18 Rs.95,93,581/- for the AY 2018-19, and Rs.16,91,013/- for the AY 2019- 20 made by the Assessing Officer, on account of unaccounted cash invested by the appellant towards purchase of villa, is held correct and accordingly grounds no.1 & 4 in all the four appeals are dismisse....
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....gs, therefore this ground is routine and without substantiation. The issue regarding cross-examination has already been elaborately discussed in the preceding paragraphs of the decision and therefore stands rejected. Further, the appellant has not disputed regarding the seized material relied upon by the Assessing Officer which is relevant in its case and the AO is not required to provide the application made by the developer company before Settlement Commission to the appellant. Hence, this ground no.2 of all four appeals does not hold ground and dismissed accordingly. It has been established in view of detailed and elaborate discussion made in the above paragraphs that the evidence seized during the Search and relied upon by the Assessing Officer are not dumb documents or just a piece of paper but a true statement of affairs with regard to the receipts for each villa of the Project in cheque and cash, thus, very much linked to the appellant. Also the documents seized are corroborated by the director of the developer company in its sworn statements and the director has never retracted from its statements as claimed by the appellant. Even the developer company has admitted....
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....ived in cheques and cash from Villa buyers of the villa project "Luxuria" The same is corroborated by the statement of Sri Kolla madhava Abhilash who stated that the printout has a list of 25 villas on whose sale KMREBPL has received consideration in cash along with cheque payments from the villa buyers. iv) Third party statement is not binding on the appellant for fastening the liability. Certificate u/s.65B of Indian Evidence Act issued by Digital Forensic Examiner during the search proceedings gives the evidentiary value eventhough it is secondary evidence. The Hon'ble Supreme Court vide its order dated May 04, 2022 in Ravinder Singh @ Kaku Vs State of Punjab has observed that a certificate under Section 65B(4) of the Indian Evidence Act, 1872 is mandatory to produce electronic evidence. v) The document relied on by the CIT(A) is a dumb document without valid evidence. The CIT(A) held at page 112 of his order that the seized document relied upon by the AO in assessing the income of the appellant, is a proper record an depicts the true and correct state of affairs of the consideration received in cheque and unaccounted cash for the sale of ....
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....383.5 300 300 83.5 75 8.5 24 450 350 400 100 77.5 22.5 25 600 450 150 50 100 28 400 300 300 100 100 O 29 379 223 222 156 156 O 30 475 235 392 240 240 O 31 475 235 235 240 220 20 32 375 225 225 150 150 0 33 442 270 285 172 135 37 34 494 344 307 150 150 0 36 600 400 312 200 200 0 50 289.5 207 207 82.5 82.5 0 54 410 310 276 100 100 0 56 330 211.54 230 118.46 100 18.46 60 525 375 375 150 150 0 61 510 456 250 54 0 54 63 0 0 420 0 0 0 64 1440.5 940 420 500.5 49.5 10 65 675 325 325 350 350 0 66 600 435 165 100 65 67 0 825 iv) Refer to para 6 page No. 49 & 50 of CIT(A) order where the CIT(A) referred to various construction details. The bench wants to know as to how the CIT(A) acquired such facts / details, wa....
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....guntas. The total project consisted of 69 villas ranging from 350 sq yards to 595 sq. Yards in area. As on the date of the search, it was noted that the agreements were entered into for approximately 25 villas and the sale deeds were registered for 13 villas out of these 25 villas. During the course of the search, with regard to these 25 villas, a document summarizing the actual unaccounted consideration received including unaccounted cash was found, which gave the actual description of the state of affairs villa wise regarding the accounted sale consideration and the unaccounted cash, being on-money, received with respect to these villas. During the course of the search, these facts were corroborated through the various documents and the messages retrieved from the mobile phones of Mr. Kolla Madhava Abhilash, Director of the developer company M/s. KMR Estates & Builders Pvt. Ltd. The documents so seized and which are brought out in subsequent paragraphs lead to a conclusion that the unaccounted cash received namely on two counts, first being the unaccounted cash with regard to the purchase of the villa pocketed as unaccounted profit by the company and second for getting t....
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....tions and agreements have been modified by selectively deleting the scope of work and specification to transact in unaccounted cash The documents pertaining to villa no. 32 assume importance and they were submitted by that appellant itself. There are three documents which have been duly signed by the owner of villa no. 32 Smt. P. Anusha along with the vendor no. 1 being the developer company. It is important to note that the developer company has already admitted the said position and only in the present adjudication the villa owners including the appellant are agitating the matter. It is seen that the agreement of sale was entered on 05.08.2016 and the first 3 pages of the said agreement indicating the name of the owner P. Anusha are brought out as under : (Ref. to Agreement of Sale at page No.55 of 121 of CIT(A) order). The schedule B mentions the residential house/villa no. 32 and not as a semi furnished villa but a proper residential house which is on a plot of land of 500 sq yards with a construction area of 5629 sq ft. The payment is mentioned in schedule C and a sum of Rs. 2,25,00,000/- to be paid in various instalments. The cheque of Rs. 25,00,000....
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.... the cash has been received from time to time by the developer from the villa owner. DISCREPANCIES FOUND: Thus, as the mode of the payment of this sum is unaccounted funds and has not been recorded in the books of accounts of the developer or the owner. The sources of these funds remain unaccounted. The page no. 6 of the agreement further mentions specifications which are part of the original agreement dated 05.08.2016 and which have not been mentioned in the registered sale deed dated 24.05.2018. This agreement also shows that the money has been received and there is no outstanding or the part of the buyer, thus the unaccounted cash was used for this purpose and the schedule of property in page no.5 mentions that the property is semi furnished, which implies that the modus operandi is to have agreements in case the work is not complete and later on take the cash or accommodate the cash and keep these transactions and agreement off the record Thus to sum up, the modus operandi was that initially the whole work was agreed upon between the parties and the consideration was needed to be paid as and when the final work was done. The consideration in cash for specific ....
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....dispute which can arise regarding this conclusion from the document seized as the explanation by the Director was duly corroborated with the bank statements of the appellant and the company, rather not only the appellant but all the villa owners. An almost identical paper was also seized from the premises of/M/s KMR Estates and Builders Private Limited vide page no 7 of Annexure A/KMR/OFF/07 which also corroborates the same (Ref to Page 74 of 121 of CIT(A) order) STATEMENT OF SRI KOLLA MADHAVA ABHILASH, DIRECTOR The explanation by Sri Kolla Madhava Abhilash, Director of the Developer company on the date of the search i.e. 04.02.2019 for page 1 of the seized material A/KMR/RES/01 was as under: (Ref to Page 75 of 121 of CIT(A) order) Thus, the seized document relied upon by the Assessing Officer very clearly indicates the amount of cheque and unaccounted cash received from the buyers including the appellant. The document very clearly brings out as to against each villa, how much cash was received and how much cheque was received by the company from the appellant and other villa buyers. Thus, the appellant and other buyers have paid the amo....
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....dger brought out above. Therefore the issuance of the cheque that is the accounted portion and the mention of the villa number very clearly identifies the appellant and thus consequently also maps and identifies the quantum of the unaccounted cash recorded in the sheet with the payment made by the appellant for the purchase of the villa. This is the only conclusion which is possible and there is no other view which can be taken at all from the seized document. The quantum of the unaccounted cash received by the company in certain cases has also been utilized for the additional works done as reflected in the seized document. The core document mentions the amount of cash paid by the appellant including the villa owner. One of the document pertaining to villa no 63 which was seized in page no 2 of Annexure A/KMR/RES/01 is reproduced as under : (Ref to Page 82 of 121 of CIT(A) order) This detailed working for villa number 63 was found in the mobile phone of Mr. K. Madhava Abhilash, where the consideration is of Rs 7,85,00,000/-, out of which Rs.4,70,40,000/- was to be received through the banking channel. Further, the unaccounted profit margin of the developer and the....
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....l was recorded in the books of account of the company Whereas the balance amount received in cash was not recorded in the books of account. However, it is stated that the excess amount received in cash is towards not only the unaccounted profit of the company but also towards the unaccounted receipt towards the agreed works and customized works mentioned in the sale agreement the villas. The relevant extract of the sworn statement of Mr. K. Madhava Abhilash is reproduced hereunder for ready reference. (Ref to Page 85 of 121 of CIT(A) order) "Q13. I am now showing you a print out of picture extracted from your phone (Apple X) bearing the number (9553066666) which is seized and annexed the page No.2 of Annexure-A/KMR/RES/01. Please explain the contents of the note. A. I confirm that it is a printout taken from my phone. It is rough working pertaining to the villa No. 63 & 64 and it shows the total value of the both villas The total value of the villa No. 63 & 64 is Rs 7,85,00,000/- as per agreement of sale However, the total value and amounts received for additional works are mentioned in page No. 1 against these villa Nos are final and the amount ....
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....l. As per the said reconciliation statement we have received an amount of Rs.78.26 cr through Banking channel. The total sale consideration actually received by the company is Rs.115.87 cr only which includes amount received through bank of Rs.78.26 cr and amount received by way of cash Rs.37.61 er. Whereas it was mentioned as Rs.117.91 cr. In the loose sheet seized during the search proceedings Vide Page No. 1 of annexure.A/KMR/RES/01 which includes amounts through bank Rs.80.29 cr and through cash of Rs. 37.61 er The difference in the gross receipt of Rs. 2.04 cr was arrived due to bank reconciliation. Accordingly, the additional profit estimated on total receipts including bank and cash is now Rs 29.04 er Hence, I hereby confirming that the additional income admitted of Rs 29.04 30% on total receipt of Rs 115.87 Cr. Thus, the receipt of cash has been admitted and offered as income by the recipient company. The company has filed the Assessment Yearwise chart, gross receipts of the company towards sale of Luxuria Villas and additional income admitted after considering 30% profit of Rs.29,03,21,366/ by including the receipts through cash as per the seized paper of....
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....yments made to meet the expenditure in cash to meet these extra works in Luxuria project till that date. Sri Kolla Madhava Abhilash has stated in his statement dated 05.02.2019 that no proper records were being by the company, and he was unable to produce the same. These receipts were mostly for the additional works and were used for these works which was evidenced by the material found at the site office. In fact, the supporting documents i.e bills/vouchers for additional expenses incurred, were not maintained properly. Therefore in order to cover up the insufficient documentation, for the extra works and deficiencies, the company has come forward to estimate the profit from the project at 30% on the total receipts, even though in the returns M/s KMR Estates and Builders Pvt Ltd was offering profit at 22% on its receipts as per the books of account. It was also submitted that the total receipts of Rs 117.91 crores also 117.91 includes Rs.37.61 crores received in cash towards additional works required to be done by the company which were adjusted proportionately in respective assessment years while estimating the profit. Relevant portion of the statement ....
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....would be preposterous, though the Department does land up with such documents from time to time with its expertise and intelligence. The expertise and the intelligence with which the incriminating papers are seized should not be watered down by arguing that the certain fringe details were not found in the favour of a tax evader especially when the evidence along with commonsense very clearly indicates tax evasion and transactions in unaccounted cash. The circumstances and evidence very clearly indicates that the appellant has paid unaccounted cash for the acquisition of villa and has to be taxed accordingly. What needs to be appreciated is that if the document describes the state of affairs and as the same has been established in the above paragraphs that the documentation is random but brings out the anomalies of the fact which was presented in the books and the true affairs as in reality represented and documented in the seized document relied by the Assessing Officer. The seized documents do not reflect the transactions of one person but of many villa owners including the appellant and establishes the modus operandi of payments in cheque compounded with unaccou....
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.... the said sum as unaccounted and also offered the same to tax and this is not a case of fiction but a documented fact. The papers seized very clearly establish the unaccounted payments made by villa owners including the appellant and the same have been rightly taxed by the Assessing Officer. Another ground raised by the appellant is that there is no record of as to which year the unaccounted cash has been paid, the Assessing Officer has found a bonafide method calculate the said amount by factoring the time of cheque payments with the proportionate unaccounted cash paid and as per the declaration filed by the developer company. It is a real audacity on the part of a tax evader, when caught having been paid unaccounted cash to challenge the year of such payment of unaccounted cash taxed in that year by the Assessing Officer by following the same method for all the villa owners including the appellant. The recipient has offered the same for taxation as per its method of accounting. The appellant has also paid unaccounted cash and in the absence of explicit evidence the most sensible way is to arrive at a figure of unaccounted cash which is commensurate to the quantum of cheq....
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....s.250.25 lakhs. From the above, it is evident that Smt. Aparna Kalyani Gavireddygari has paid Rs 250.25 lakhs in cash as part of total sale consideration for villa no. 64 to KMR Estates & Builders Pvt. Ltd. Therefore, I am satisfied that the information contained in the documents seized in the case of KMR Estates & Builders Pvt. Ltd., & Group pertains to Smt. Aparna Kalyani Gavireddygari and the information contained therein has a bearing on the determination of total income of Smt. Aparna Kalyani Gavireddygari. Therefore, I am satisfied that the case of Smt. Aparna Kalyani Gavireddygan is covered under section 153C. In view of the above, the provisions of section 153C(1) are to be invoked for AY 2013 14 to 2018-19 and u/s 143(3) for AY 2019-20. As per the provisions of section 153C Where the Assessing Officer is satisfied that (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned belongs to, or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to a person other than the person referred to in section 153A, then, the....
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.... discussed in the preceding paragraphs of the decision and therefore this ground no 4 of the appeal stands rejected. The appellant has further contended that the Assessing Officer is not correct in relying on secondary evidence which is admittedly a printout taken from an electronic device contrary to the provisions of section 65B of Indian Evidence Act. It is seen that the Director of developer company has given statement regarding the contents of the evidence found from electronic device during the search proceedings and has admitted that the document is his record. The person with whom such document has been found has not challenged the factum, therefore the appellant challenging the same is completely preposterous and thus stands rejected. Further, the similar and corroborative document containing identical contents was found and seized at the office premises of the developer company. Therefore, there cannot be any such ground which can be remotely entertained. Accordingly, ground no 8 of the appeal is dismissed In ground no 5, the appellant has also contended that the Assessing Officer has not followed the principles of natural justice. It is seen from the As....
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....f Agreement of Sale of Villa Nos. 31 to 33. 8) Schedule D of Agreement of Sale of Villa Nos. 63, 64 and 66. 9) Schedule D of Agreement of Sale of Villa Nos. 3, 25 and 60. 18. It was submitted by the ld.AR that the additions u/s 153C can only be made in the hands of the assessee on the basis of the seized documents if they belong to the same assessment year and assessee. It was submitted that all the nine documents mentioned hereinabove were not seized documents as only one document was referred as a seized document by the Assessing Officer. No inference can be drawn on the basis of these documents that "on money" was paid by the assessee. The issue before us is whether the assessee had paid 'on money' either at the time of registration or subsequent for getting the interior work done. 19. The ld.AR had further submitted that details like name of the assessee, the Villa number, the mode of payment, the details of the person who made the payments are not available. It was submitted that it is the case of the Revenue that the cash was paid for providing specified facilities in the Villas as per the specification referred in "Agreement for completion of ....
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....39;further grace period of 1 month (hereinafter referred to as the 'COMPLETION DATE)." 20. It was submitted by the ld.AR that though the Agreement of Sale, Sale Deed and Agreement for completion of Villa cannot be relied upon by the Revenue, however, the conjoint reading of all the said three documents of P. Anusha in respect of Villa No.32 clearly mentioned that the total sale consideration of the Villa No.32, as per the specification, would be Rs.2.25 crores (Page 54 of the order of ld. CIT(A).) Ms. P. Anusha had paid a sum of Rs. 1.15 crores at the time of registration of sale deed (Page 59 of the order of ld. CIT(A)) and had also mentioned that a sum of Rs.1.10 crore was paid to M/s. KMR Estates and Builders Pvt. Ltd at the time of entering into Agreement for completion of Villa. There is no incoherency in the conduct of Ms. P. Anusha. Hence, a conclusion drawn on the basis of dumb document that the total sale consideration paid was Rs.3.75 crore which includes cash of Rs.1.50 crore was unsustainable and against the facts. 21. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the case laws filed on behal....
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....facts, now we have to examine whether the addition can be sustained on the basis of the documents which were relied upon by the Revenue Authority or not ? 25. The Assessing Officer in Para 1 of his order, referred to the incriminating evidence with regard to the receipt of money from buyers for Villas. He referred to this document as Annexure A/KMR/RES/01 in Para 4.1 of his order and thereafter, relied upon the statement of Shri Kolla Madhava Reddy recorded on 25.03.2019. The typed copy of Annexure A/KMR/RES/01 was reproduced by the ld. CIT(A) in his order, which we have also reproduced elsewhere in this order. 26. From the facts of the present case, it is clear that Annexure A/KMR/RES/01 was retrieved from the mobile of Kolla Madhav Abhilash, Director, however, Assessing Officer had not referred to the statement of Kolla Madhav Abhilash, Director in his order nor had provided the copy thereof to the assessee. Further, certificates under section 65B of the Evidence Act was neither mentioned in the order nor provided to the assessee nor it was referred to in the impugned order. Even otherwise, Annexure A/KMR/RES/01, it cannot be said to be a receipt of money from buyers of Vil....
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....document recovered from a third party would be binding and admissible against the assessee before us. The ld. CIT(A) had rejected above said contention of the assessee at page 113 of the order and held that the admission of the recipient (third party) would be enforceable against the other party in section 153C of the Act. 27.3 In our view, section 292C can only be invoked against such person in whose premises/possession, the said the incriminating document was found during the course of search u/s 132 of the Act. The word "such person" as used in section 292C is only referrable to the person in whose premises, the things were found in possession or control at the time of the search. Admittedly, the assessee before us was not the person from whose possession, the mobile was found, which allegedly contains the document and therefore, the invocation of section 292C by the ld. CIT(A) was without any basis and is contrary to law. Admittedly, if any, document is found in the premises / possession / control of such person, which belongs to the other person then the said document can be used for making the addition, however, it is necessary to prove that the said document is incriminat....
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....old out wherein registration have been completed in respect of some villas. The total receipts on account of the sale of these villas is Rs. 117.91 crores. However, it includes both cheque payments as well as some cash component is also there which is received to meet the cost of some extra work as per the choice of the buyer. The cash received is used for additional work and the payments are made in cash only. However, we have not maintained the proper record for the cash receipts and expenditures in the books of accounts of the company. 27.6 The reading of the ld. CIT(A), more particularly, Paragraph 65, pages 62 to 72, making it abundantly clear that he had made the addition on the basis of conjectures and surmises and presumptions that the money was paid by the assessee to the developer and both were in tandem to conceal the expenditure incurred for interior work. The above said understanding of ld. CIT(A) is contrary to the elementary understanding of the contract between the parties. As per the agreement of sale and contract for completion of work, it is for the developer to execute the specific work mentioned in the sale agreement and it is for the developer M/s. KMR Esta....
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....#39; by two clauses i.e. a and b, where clause b is in the alternative and provides that 'such books of account or documents, seized or requisitioned' could 'pertain' to or contain information that 'relates to' a person other than a person referred to in Section 153A of the Act. 16. The trigger for the above change was a series of decisions under Section 153C, as it stood prior to the amendment, which categorically held that unless the documents or material seized 'belonged' to the Assessee, the assumption of jurisdiction under Section 153C of the Act qua such Assessee would be impermissible. The legal position in this regard was explained in Pepsi Foods (P.) Ltd. v. Asstt. CIT [2014] 367 ITR 112 (Del)where in para 6 it was held as under: '6. On a plain reading of Section 153C, it is evident that the Assessing Officer of the searched person must be "satisfied" that inter alia any document seized or requisitioned "belongs to" a person other than the searched person. It is only then that the Assessing Officer of the searched person can handover such document to the Assessing Officer having jurisdiction over such other person (othe....
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....evenue to show that the documents either 'pertain' to the Assessee or contains information that 'relates to' the Assessee. 18. In the present case, the Revenue is seeking to rely on three documents to justify the assumption of jurisdiction under Section 153 C of the Act against the Assessee. Two of them, viz., the licence issued to the Assessee by the DTCP and the letter issued by the DTCP permitting it to transfer such licence, have no relevance for the purposes of determining escapement of income of the Assessee for the AYs in question. Consequently, even if those two documents can be said to 'belong' to the Assessee they are not documents on the basis of which jurisdiction can be assumed by the AO under Section 153C of the Act. 19. As far as the third document, being Annexure A to the statement of Mr. D. N. Taneja, is concerned that was not a document that 'belonged' to the Assessee. Admittedly, this was a statement made by Mr. Taneja during the course of the search and survey proceedings. While it contained information that 'related' to the Assessee, by no stretch of imagination could it be said to a document that 'b....
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....low this ground to be raised, when the assessee had not objected to the jurisdiction under Section 153C of the Act before the AO. Therefore, in the first instance, it needs to be determined as to whether ITAT was right in permitting the assessee to raise this ground for the first time before it, as an additional ground. 18. The ITAT permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document- wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned through the Satisfaction Note and ....
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....may be prescribed, and containing a full and true disclosure of his income which has not been disclosed before the 96[Assessing] Officer, the manner in which such income has been derived, the additional amount of income-tax payable on such income and such other particulars as may be prescribed, to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner hereinafter provided : 97[Provided that no such application shall be made unless,- (i) in a case where proceedings for assessment or reassessment for any of the assessment years referred to in clause (b) of sub-section (1) of section 153A or clause (b) of sub-section (1) of section 153B in case of a person referred to in section 153A or section 153C have been initiated, the additional amount of income-tax payable on the income disclosed in the application exceeds fifty lakh rupees, 98[(ia) in a case where- (A) the applicant is related to the person referred to in clause (i) who has filed an application (hereafter in this sub-section referred to as "specified person"); and (B) the proceedings for assessment or re-assessment for any of the assess....
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.... person; or (B) where the specified person being a company, firm, association of persons or Hindu undivided family, or any director of such company, partner of such firm or member of the association or family, or any relative of such director, partner or member, has a substantial interest in the business or profession of that person; (b) a person shall be deemed to have a substantial interest in a business or profession, if- (A) in a case where the business or profession is carried on by a company, such person is, 99[on the date of search], the beneficial owner of shares (not being shares entitled to a fixed rate of dividend, whether with or without a right to participate in profits) carrying not less than twenty per cent of the voting power; and (B) in any other case, such person is, 99[on the date of search], beneficially entitled to not less than twenty per cent of the profits of such business or profession.] (1A) For the purposes of sub-section (1) of this section 1[ *** ], the additional amount of income-tax payable in respect of the income disclosed in an application made under sub-section (1) of this section shall be the amount ca....
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....disclosure of his income which has not been disclosed before the 96[Assessing] Officer, the manner in which such income has been derived, the additional amount of income-tax payable on such income and such other particulars as may be prescribed, to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner hereinafter provided : 97[Provided that no such application shall be made unless,- (i) in a case where proceedings for assessment or reassessment for any of the assessment years referred to in clause (b) of sub-section (1) of section 153A or clause (b) of sub-section (1) of section 153B in case of a person referred to in section 153A or section 153C have been initiated, the additional amount of income-tax payable on the income disclosed in the application exceeds fifty lakh rupees, 98[(ia) in a case where- 245D. 12[(1) On receipt of an application under section 245C, the Settlement Commission shall, within seven days from the date of receipt of the application, issue a notice to the applicant requiring him to explain as to why the application made by him be allowed to be proceeded with, and on....
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....s invalid, and shall send the copy of such order to the applicant and the 14[Principal Commissioner or] Commissioner: Provided that an application shall not be declared invalid unless an opportunity has been given to the applicant of being heard: Provided further that where the 14[Principal Commissioner or] Commissioner has not furnished the report within the aforesaid period, the Settlement Commission shall proceed further in the matter without the report of the 14[Principal Commissioner or] Commissioner. (2D) Where an application was made under sub-section (1) of section 245C before the 1st day of June, 2007 and an order under the provisions of sub-section (1) of this section, as they stood immediately before their amendment by the Finance Act, 2007, allowing the application to have been proceeded with, has been passed before the 1st day of June, 2007, but an order under the provisions of sub-section (4), as they stood immediately before their amendment by the Finance Act, 2007, was not passed before the 1st day of June, 2007, such application shall not be allowed to be further proceeded with unless the additional tax on the income disclosed in such app....
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....(2D), on or before the 31st day of March, 2008; (ii) in respect of an application made on or after the 1st day of June, 2007 19[but before the 1st day of June, 2010], within twelve months from the end of the month in which the application was made;] 20[(iii) in respect of an application made on or after the 1st day of June, 2010, within eighteen months from the end of the month in which the application was made.] 21[(5) Subject to the provisions of section 245BA, the materials brought on record before the Settlement Commission shall be considered22 by the Members of the concerned Bench before passing any order under sub-section (4) and, in relation to the passing of such order, the provisions of section 245BD shall apply.] (6) Every order passed under sub-section (4) shall provide for the terms of settlement23 including any demand23 by way of 24[tax, penalty or interest23], the manner in which any sum due under the settlement shall be paid and all other matters to make the settlement effective and shall also provide that the settlement shall be void if it is subsequently found by the Settlement Commission that it has been obtained by fraud or mis....
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....t Order / admission made by M/s. KMR Estates and Builders Pvt. Ltd to fasten the liability on the assessee. The law is fairly settled with respect to the basis on which the addition can be made under section 153C of the Act as neither the statement of Shri Kolla Madhava Reddy and Kolla Madhav Abhilash, Director nor the Settlement Order of the Settlement Commission could be said to be the incriminating documents / evidence for the purpose of making the addition in the hands of the assessee, as these documents would not constitute incriminating documents and do not belong to the assessee or having any bearing on the determination of the total income of the assessee. Reference of P Anusha for making the addition by the ld. CIT(A) 33. In this regard, the ld. CIT(A) had referred to 3 documents namely, the agreement of sale, sale deed and agreement for completion of the Villa entered between Smt. P. Anusha and the M/s. KMR Estates and Builders Pvt. Ltd. On closure scrutiny of all these three documents referred to by the ld. CIT(A), firstly, it is amply clear that these three documents did not fall in the category of incriminating documents. Secondly, there is no inconsistency or in....
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....s the above, there cannot be any assumption of payment of cash by the assessee, namely Shri Hariprasad Reddy Kanipakam for completing the remaining work after getting the registered sale deed in his favour. The completion of the Villa should happen after the registration of the property. As clear from the agreement of sale, sale deed and completion/ construction agreement that all the payments were made by the assessee through the account payee cheque after deduction of TDS. Hence, no inference can be made in the present case for 'on money' payment. Reference of Villa Nos.63 and 64 : 35. The ld.CIT(A), at pages 77 to 83 of his order had extensively referred to the cash paid by the villa owner of villa No.63. The ld. CIT(A) had assumed that the villa owner of 63 and 64 had paid the cumulative cash of Rs.5,00,50,000/- by recording as under : "The final cash amount recorded for villa no. 63 and 64 is Rs.2,50,25,000/- each in the seized document table cumulatively recorded as Rs. 5,00,50,000/- in the page no. 1 of Annexure A/KMR/RES/01. Further on verification of bank account statements and books of account in Tally package, it was noticed that an amount of Rs.4,....
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.... case of villa owners 63 & 64, the registration took place on 3.6.2019. In both the cases, the registration of the property took place after the search. In our view, no addition can be made in the hands of any assessee based on Annexure A/KMR/RES/01 and Annexure A/KMR/RES/02, as both the documents are required to be corroborated with the independent evidences. Even the statements of assessees were not recorded by the Assessing Officer. Further, the Assessing Officer had neither provided a copy of the statement of Kolla Madhav Abhilash, Director and Shri Kolla Madhava Reddy and had even not offered the opportunity for their cross-examination. 36.1 We are disturbed with the injudicious finding given by the ld. CIT(A), whereby he had termed the concept of cross-examination of a maker of the statement as a silly argument. In our view, the right to a fair hearing as provided by the Constitution of India and by the Statute are non-negotiable right and cannot be rejected merely by following flimsy reasons. The reasons were given by the ld. CIT(A) while rejecting the submissions of the assessee, are devoid of sound legal reasoning and are required to be rejected. We reject the same. The....
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....re P1, P2 and P7. Those 3 documents are dumb documents and it is not possible to correlate any of the assessee with that of making a cash payment to M/s. KMR Estates and Builders Pvt. Ltd. In Annexure P1, the relevant entry pertaining to Villa Nos.63 and 64 are as under : 63 0 0 0 0 0 64 1440.5 940 500.5 490.5 10 Similarly, the relevant entry in Annexure A/ KMR /OFF/ 07 pertaining to Villa Nos.63 and 64 is as under : Villa No Total Value Agreement Value Cash Receipt Receipt Pending 63 0 0 420 0 0 0 64 1440.5 940 420 500.5 49.5 10 37. From the comparison of the two documents, it is abundantly clear that no cash receipts were made or mentioned either in Annexure P1 or Annexure 7 reproduced hereinabove pertaining to Villa No.63. Further, the total amounts mentioned against the agreement value of Villa Nos.63 and 64 was Rs.420/- each i.e. Rs.840/-. When this amount of Rs.840/- is added to Rs.500.5 it will be equal to Rs. 1340.5. Whereas, in the first column, the total consideration mentioned is ....
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....the assessee, is unsubstantiated and is contrary to Annexures P1 and 7. In Annexure P1, no cash payment was made by the owner of the villa no 63 and the document, on the face of it, does not refer to any payment of cash. Therefore, the addition cannot be sustained in the hands of the assessee. If we look into the assessment order passed in ITA No.4/Hyd/2023, it is clear that the Assessing Officer referred to in para 4.4, that the assessee had paid Rs. 6,50,25,000/- to the developer (Rs.4,00,00,000/- through bank and Rs.2,50,25,000/- in cash.) The above statement of fact is contrary to Annexure P1 and P7 (seized / incriminating document and document relied upon by the ld.CIT(A)). In Annexure P7, this agreement value had been mentioned as 420/- and the cash has been mentioned as "0", therefore, the whole basis of addition made by the Assessing Officer in the case of ITA No. 4/Hyd/2023 was unsubstantiated. Reliance of the statement of the Shri Kolla Madhava Reddy 40. In this regard, the Assessing Officer had referred to the statement recorded by the Revenue during the course of search on 25.3.2019 wherein the said Director of the company had admitted to having received the cash ....
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.... A/ KMR/ RES/ 01. Please explain the contents of the note. A: I confirm that it is a printout from my phone which contains 6 'columns. These details pertain to the project "Luxuria". This is a list of 25 villas already sold out wherein registration have been completed in respect of some villas. The total receipts on account of sale of these villas is Rs. 117.91 crores. However, it includes both cheque payments as well as some cash component is also there which is received to meet cost of some extra works as per the choice of the buyer. The cash received is used for additional works and the payments are made in cash only. However, we have not maintained proper record for the cash receipts and expenditure in the books of accounts of the company." Thus, the seized document relied upon by the Assessing Officer very clearly indicates the amount of cheque and unaccounted cash received from the buyers including the appellant. The document very clearly brings out as to against each villa, how much cash was received and how much cheque was received by the company from the appellant and other villa buyers. 43. At page 74 of the order, the ld. CIT(A) reproduced the An....
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....te of Registration Asst. year 2 350 325 325 25 0 25 28 400 300 300 100 100 0 28.06.2017 2018-19 33 442 270 285 172 135 37 28.06.2017 2018-19 61 510 456 250 54 0 54 30.06.2017 2018-19 24 450 350 400 100 77.5 22.5 10.07.2017 2018-19 Total 2152 1701 1560 451 312.5 138.5 32 375 225 225 150 150 0 24.05.2018 2019-20 4 350 275 250 75 75 0 10.10.2018 2019-20 56 330 211.54 230 118.46 100 18.46 05.11.2018 2019-20 36 600 400 312 200 200 0 29.01.2019 2019-20 Total 1655 1111.54 1017 543.46 525 18.46 63 0 0 420 0 0 0 03.06.2019 2020-21 64 14405 940 420 500.5 49.5 10 03.06.2019 2020-21 5 290 ....
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....rom the buyer. Thus recording the sale value of villa at a lesser price than actually received. The company was registering the villas at the cheque amount almost equivalent to SRO value and the balance which was taken in unaccounted cash was kept outside the books of accounts." At page 3 of the Written Submissions, it was mentioned as under : The documents so seized and which are brought out in subsequent paragraphs lead to a conclusion that the unaccounted cash received namely on two counts, first being the unaccounted cash with regard to the purchase of the villa pocketed as unaccounted profit by the company and second for getting the specific works done as per the regular and customized specifications. The above factum of specifications is a phenomena which is relevant to all the villas in the seized sheet, wherein there was a component of transaction of unaccounted cash. At page 8 of the Written Submissions, it was mentioned as under : The quantum of the unaccounted cash received by the company in certain cases has also been utilized for the additional works done as reflected in the seized document. The core document mentions the amount of c....
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....ere is no co-relation between the figures mentioned in Annexure A/KMR/RES/01 and Annexure A/KMR/OFF/07, the discrepancy in the said two documents have been mentioned hereinabove. Further, the Assessing Officer had relied upon the admission of the Managing Director made u/s 132(4) of the Act in their case against the assessee, but failed to note that admission of other parties cannot be considered as conclusive evidence against the assessee, unless there is a corroborative evidence on record. The statement of maker will only bind the maker of that statement, but it cannot bind the others. Similarly, the admission of tax liability by the recipient would not amount to the admission of liability by the payer. The admission of one would not constitute the admission of the other person. For the above said proposition, ld.AR relied upon the decision of Hon'ble ITAT, Visakhapatnam bench in the case of P. Koteswara Rao, Visakhapatnam Vs. DCIT, Central Circle, Visakhapatnam vide ITA No.251 & 252/, Vizag/2012 (Paper Book page. No. 71 to 88) and also the decision of Hon'ble ITAT, Delhi in the case of Vijayashree Food Products Private Limited Vs ACIT vide ITA NO.587/DEL/2019 (Paper Book....
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....olla Madhava Reddy had made the admission of their liabilities. For the above said purposes, it is essential to read the statement as a whole. We are reproducing hereinbelow the statement, question nos.3 and 4 and their answers given by Shri Kolla Madhava Reddy which are to the following effect : "Q3. I am showing you the statement recorded from you on 05.02.2019 during the course of Search & Seizure operation u/s 132 of I.T. Act at your residence D.No.512/L, Road No.31, Jubilee Hills, Hyderabad wherein in you have given statement to the Questions bearing Nos.52 and 69, The same were reproduced as under. Please go through the same and re-affirm. Q52. It is seen from the current status of the project that it is humanly impossible to complete remaining construction within the stipulated date i.e April 2029. The refundable deposit is in the nature of adjustable towards owners share of revenue and not refundable to the developer in the current circumstances. Please state why the refundable deposit should not be treated as your income. Ans. The project was started in the year 2011. We have harked over possession of the land and original documents and approval ....
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.... the additional income offered for the AY 2019-20. Hence 29.64-6.16 would be 23.48) on account of sale proceeds including cash receipts from Luxuria project villas in various assessment years as mentioned in answer to Q12 of my elder son Sri Kolla Madhava Abhilash statement recorded on 05.02.2019. With regard to the income offered on account of development agreement, we shall enter into a suitable MOU/ agreement with M/s. Janapriya Township Pvt Ltd. The same shall be submitted within 15 days. We shall also submit relevant affidavits admitting the income as stated above. We shall file returns of income offering income as stated above and pay taxes accordingly. Therefore, we request you not to initiate penalty and prosecution proceedings. Ans: I have gone through the sworn statement given by me on 05.02.2019 during the course of Search & Seizure action conducted u/s 132 at my office M/s M/s. KMR Estates and Builders Pvt. Ltd Estates and Builders Pvt. Ltd., Plot No. 1175, Road No.56, Jubilee Hills, Hyderabad and I hereby re-affirm that I have admitted an additional income of Rs.29.64 cr on account of additionpi cash receipts received (For AY 2019-20, we have already ....
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.... the material found at the site office. In fact, the additional expenses incurred have not been maintained properly. M/s KMR Estates and Builders Put Ltd. has been offering profit at 22% on its receipts as per the books of account. Keeping in view the lapses in maintenance of bills/ vouchers and other deficiencies, the company has come forward to estimate the profit at 30% on the total receipts as per the details given below: Assessment. Year Total Receipts Total profit @ 30% Profit already declared in the ROIS Addl. Income to be offered 2016-17 3.01 0.903 0 0.903 2017-18 28.08 8.42 0 8.42 2018-19 50.02 15.01 5.73 9.28 2019-20 36.80 11.04 - 11.04 total 117.91 35.37 5.73 29.64 Out of the additional income admitted for AY 2019-20, we have already made a provision for the profit to the extent of Rs. 6.16 Crores for the purpose of advance tax. The balance amount of Rs. 4.88 Crore is the additional income offered for the AY 2019-20. We have accepted the above, keeping in view lapses on behalf of the company in maintaining bills/ vouchers. The company undertakes to take to pay the taxes acc....
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....account of income received against the development agreement entered with M/s. Janapriya Township Pvt. Ltd in the hands of M/s. KMR Estates & Developers Pvt. Ltd for the A.Y.2019-20. Further, I have also admitted an additional income of Rs. 27,65,98,808/- on account of income received from the development agreement entered with M/s. Janapriya Township Pvt Ltd in the hands of M/s. Wincon Housing Pvt .Ltd for the A.Y.2019-20." 49. From the reading of the statement reproduced hereinabove, it is abundantly clear that M/s. KMR Estates and Builders Pvt. Ltd had admitted the additional income on account of "Keeping in view the lapses in the maintenance of bills/ vouchers and other deficiencies, the company has come forward to estimate the profit at 30% on the total receipts as per the details given below : Assessment. Year Total Receipts Total profit @ 30% Profit already declared in the ROIs Addl. Income to be offered 2016-17 3.01 0.903 0 0.903 2017-18 28.08 8.42 0 8.42 2018-19 50.02 15.01 5.73 9.28 2019-20 36.80 11.04 - 11.04 total 117.91 35.37 5.73 29.64 50. In the statement Shri Kolla Madhav....
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.... 25,42,373 1,74,57,627 12 29 20 to 23/Hyd/2023 77278 4238128 9593581 1691013 13 32 24 to 26/Hyd/2023 P. Anusha 50,00,000 66,66,667 33,33,333 14 5 37 and 38/Hyd/2023 Rama Subba Reddy 42,10,526 7,89,474 15 28 44 to 46/Hyd/2023 Vamsi Krishna Reddy Goteke 24,29,589 45,93,553 29,76,858 16 56 75 to 77/Hyd/2023 Saritha Agarwal, Hyderabad 24,14,842 53,58,613 40,72,545 17 65 78/Hyd/2022 Rajesh Kumar Surana 3,50,00,000 18 61 79 and 80/Hyd/2022 Sainath Reddy Pady, Hyderabad 18,58,270 8,41,731 19 61 81 & 82/Hyd/2023 Kaushik Reddy Padi, Hyderabad 18,58,270 8,41,731 20 60 83/Hyd/2023 Karthik Raghupati Reddy 1,50,00,000 Total: 1,16,27,362 4,05,32,124 9....
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....he income admitted by M/s. KMR Estates and Builders Pvt. Ltd in the statement given at the time of search with respect to various assessment years and the addition made in the hands of twenty assessee before us for the various years is as under : A.Y. Admission as per M/s. KMR Estates and Builders Pvt. Ltd in their statement dt.04.02.2019 Addition as per Assessing Officer in the hands of assessee before us 2016-17 0.903 1,16,27,362 2017-18 8.42 4,05,32,124 2018-19 9.28 9,86,69,288 2019-20 11.04 11,94,06,709 54. From the reading of the comparative statement, it is abundantly clear that the Assessing Officer had made the addition in the hands of each assessee without considering whether any 'on money' was paid by them or not or in which year the said money was paid. It is mandatory for the Assessing Officer to point out in the satisfaction recorded u/s 153C of the Act whether any 'on money' was received in the said assessment year or not. Revenue had nor brought out any evidence suggesting any incriminating material for that assessment year co- relating with payment of 'on....
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....ar under consideration. In the present case, neither there is any incriminating material nor there is any year specific incriminating material on the basis of which the addition can be made. The addition of tax liability on the assessee cannot be made on deeming or presumption basis rather the addition can only be made on the basis of incriminating evidence relevant to assessment year showing evasion of taxes under section 153C of the Act. 56. We have the occasion to examine the satisfaction note reproduced by the ld. CIT(A) in his order. In some of the cases, against one villa number, the additions were made in the hands of two individuals. In respect of Villa No.61, the additions were made in the hands of Sainath Reddy in ITA No.79 and 80/Hyd/2023 for a sum of Rs.18,58,270 for A.Y. 2017-18 and Rs.8,41,731/- for A.Y. 2018-19. Similar additions were made in the hands of Kaushi Reddy Padi in ITA No.81 and 82/Hy/2023 for A.Y.s 2017-8 and A.Y. 2018-19. In the same way, in respect of Villa No.24, the additions were made in the hands of Smt. Garudapalli Sruthi Gupta in ITA Nos.10 & 11/Hyd/2023 for A.Y.s 2017- 18 for Rs.6,83,527 and for A.Y. 2018-19 for Rs.43,16,473/-. Similar additio....
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....d before us and whether the said Certificate u/s 65B had been provided to the assessee for cross-examination and reply / response. On our pointed query, the ld.DR had sought the reply from the Assessing Officer / ld.CIT(A). 60. On the other hand, the ld.AR had submitted that no Certificate u/s 65B was provided to the assessee during the assessment proceedings or in the appellate proceedings. Even otherwise it was submitted that the excel sheet retrieved from a third party could not bind the assessee who is unrelated to the Kolla Madhav Abhilash, Director. The assessee had also relied upon the decision in the case of Mr. A. Johnkumar Vs. DCIT in ITA No.3028/Cheny/2019 dated 13.05.2022 wherein at para 9.4 it was held as under : "9.4 We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The sole basis for the AO to make addition u/s.69C of the Act, was election held for Nellithope Constituency of Pondicherry Union Territory. The search was conducted on 17.11.2016. the AO had linked photo identity cards issued by M/s.Johnkumar Trust, to general public of Nellithope Constituency, which was found in the pre....
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....rred a sum of Rs. 17 Crs. for distribution of cash to voters and which is nothing but unexplained expenditure taxable u/s.69C of the Act. 9.5 We have given out thoughtful consideration to the reasons given by the AO and we ourselves do not subscribe to the reasons given by the AO for the simple reason that first of all, the assessee was not contested for election held at Nellithope Constituency. Therefore, the question of assessee spending such huge money to distribute to voters does not arise. Secondly, the AO has solely relied upon the photo identity cards issued by M/s. Johnkumar Trust and inferred that each photo identity cards, the assessee has paid a sum of Rs. 4,000/-. We find that neither the AO has found any physical cash distribution to voters nor examined any of the photo identity card holding to ascertain the fact that cash was distributed to them. Further, the AO had relied upon the WhatsApp messages sent from assessee's mobile phone to Mr. Somu and had given his own meaning to those messages. In the process, the AO neither tested the admissibility of WhatsApp messages as evidence u/s.69B of Evidence Act, nor examined Mr. Somu the recipient of messages sen....
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....certain sums were found in whatsapp messages in digits. When asked to explain, Shri Anil Kumar stated that the amounts were written in thousands represent lakhs and the total sum of Rs. 1,05,00,000/-was taken as loan from the assessee in cash for his business purposes. When confronted with the assessee, he explained that the amounts mentioned in thousands are correct and the total amount would be in the range of Rs. 5,000/- and Rs.10,000/- given to Shri Anil Kumar to meet the petty cash or miscellaneous expenses from M/s Navaratna Estates during registration of properties. A search u/s 132 was conducted in the case of Shri Lanka Anil Kumar as well as the assessee and the survey u/s 133A was conducted in the case of M/s Navaratna Estates. No evidence was found by the department either in the premises of the assessee or in the premises of M/s Navaratna Estates, having given loan to Sri Anil Kumar to the extent of Rs. 1,05,00,000/-. In the search proceedings in the residence of Shri Anil Kumar also, no evidence with regard to unaccounted investment or expenditure representing the loan supposed to be taken from the assessee was found. Merely on the basis of the statement given by Shri ....
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....er duress. The AO has not brought on record any evidences as to utility of such amount nor any other corroborative evidence to support the findings. Such evidences(Messages) without any supporting/corroborative along with admission of third person cannot be, basis for AO to come to conclusion and make addition in the assessment order. The low or the issue is laid down by the jurisdictional High Court, and followed by ITAT consistently in the following cases. i) K. V. Lakshmi Savitri Devi Vs ACT 148 ITJ 517 (Hyd). ii) K. V. Lakshmi Savjtri Devi Vs ACIT ITTA 563 of 2017 (AP)(HC) iii) Jawahar Bhai Atmaram Hathiwala Vs ITO 128 ITJ 36 (Ahd) iv) DCIT Vs B. Vijaya Kumar ITA No.930 & 931 of 2009 (Hyd). v) CIT Vs R. Nalini Devi ITTA 232 of 2013 (A. P) vi) CIT Vs P. V Kalyana Sundaran (2007) 294 ITR 49 vii) Venkata Rama Sai Developers Vs DCIT ITA 453/Vizag/2012. vii) P. Venkateshwar Rao Vs DCIT ITA 25/825/Vizag/2012. The ratio laid down is that solely on the basis evidences such as notings in loose sheets found with third parties and the statement of third parties, additions cannot be made without corroborative ....
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...., (2020) 7 SCC 1 : (2020) 4 SCC (Civ) 1 : (2020) 3 SCC (Cri) 1 : (2020) 2 SCC (L&S) 587] wherein the Court has held that : (Arjun Panditrao Khotkar [Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal, (2020) 7 SCC 1 : (2020) 4 SCC (Civ) 1 : (2020) 3 SCC (Cri) 1 : (2020) 2 SCC (L&S) 587], SCC pp. 56 & 62, paras 61 & 73). "61. We may reiterate, therefore, that the certificate required under Section 65- B(4) is a condition precedent to the admissibility of evidence by way of electronic record, as correctly held in Anvar P.V. [Anvar P.V. v. P.K. Basheer, (2014) 10 SCC 473 : (2015) 1 SCC (Civ) 27 : (2015) 1 SCC (Cri) 24 : (2015) 1 SCC (L&S) 108], and incorrectly "clarified" in Shafhi Mohammad [Shafhi Mohammad v. State of H.P., (2018) 2 SCC 801 : (2018) 2 SCC 807 : (2018) 2 SCC (Civ) 346 : (2018) 2 SCC (Civ) 351 : (2018) 1 SCC (Cri) 860 : (2018) 1 SCC (Cri) 865] . Oral evidence in the place of such certificate cannot possibly suffice as Section 65-B(4) is a mandatory requirement of the law. Indeed, the hallowed principle in Taylor v. Taylor [Taylor v. Taylor, (1875) LR 1 Ch D 426], which has been followed in a number of the judgments of this Court, can also be applied. Secti....
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.... that the law laid down by the Hon'ble Supreme Court in the case of P.K. Basheer occupies the field in the area of law (65A and 65B). In the case of Arjun Panditrao Khotkar, the Hon'ble Supreme Court had reiterated that the Certificate u/s 65B(4) is a condition precedent to the admissibility of evidence by way of an electronic record. Further, in Para 22, the Hon'ble Supreme Court mentioned that the electronic evidence produced before the High Court should have been in accordance with the statute and should have complied with the certification requirement for its admissibility. 64. In the case in hand, before us, the electronic evidence is "the data stored in the mobile phone of Kolla Madhav Abhilash, Director of the company". For the admissibility of the data stored in the mobile phone as evidence, not only the electronic evidence i.e., mobile phone (apple X) and the data both are required to be produced, but along with that the certificate as contemplated u/s 65B(4) is also required to be produced for its admissibility. In the present case, neither the mobile phone nor the evidence in the form of data stored therein was confronted to the assessee nor any certificat....
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....ic record or the accuracy of its contents; and (d) the information contained in the electronic record reproduces or is derived from such information fed into the computer in the ordinary course of the said activities. (3) Where over any period, the function of storing or processing information for the purposes of any activities regularly carried on over that period as mentioned in clause (a) of sub-section (2) was regularly performed by computers, whether- (a) by a combination of computers operating over that period; or (b) by different computers operating in succession over that period; or (c) by different combinations of computers operating in succession over that period; or (d) in any other manner involving the successive operation over that period, in whatever order, of one or more computers and one or more combinations of computers, all the computers used for that purpose during that period shall be treated for the purposes of this section as constituting a single computer; and references in this section to a computer shall be construed accordingly. (4) In any proceedings where it is desired to give a stat....
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.... business." In fact, there is a revolution in the way the evidence is produced before the court. Properly guided, it makes the systems function faster and more effective. The guidance relevant to the issue before us is reflected in the statutory provisions extracted above. 14. Any documentary evidence by way of an electronic record under the Evidence Act, in view of Sections 59 and 65-A, can be proved only in accordance with the procedure prescribed under Section 65-B. Section 65-B deals with the admissibility of the electronic record. The purpose of these provisions is to sanctify secondary evidence in electronic form, generated by a computer. It may be noted that the section starts with a non obstante clause. Thus, notwithstanding anything contained in the Evidence Act, any information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media produced by a computer shall be deemed to be a document only if the conditions mentioned under sub-section (2) are satisfied, without further proof or production of the original. The very admissibility of such a document i.e. electronic record which is called as c....
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....o ensure the source and authenticity, which are the two hallmarks pertaining to electronic record sought to be used as evidence. Electronic records being more susceptible to tampering, alteration, transposition, excision, etc. without such safeguards, the whole trial based on proof of electronic records can lead to travesty of justice." 66. In the absence of the primary evidence namely, the electronic evidence and the Certificates issued under section 65B (secondary evidence) by the Digital Forensic Examiner, it is difficult to accept the stand of the Revenue. The Revenue had filed the two certificates under section 65B of the Act from the iPhone 5 registered in the name of Mr. Aravind Reddy and Samsung Galaxy G8 in the name of Srinivas K. Both these certificates are reproduced hereinbelow for ready reference : -- Left intentionally- 67. From the perusal of the certificates, it is clear that these two certificates produced by the Revenue do not belong to Sri Kolla Madhav Abhilash, Director, of the developer company, as his phone was an iphone 10 bearing no.9553066666, which is not appearing in any of these certificates. Further, the Revenue had filed a digital evidence col....
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....ission of the assessee before us. Moreover, in the absence of the certificate issued u/s 65B of the Evidence Act, the evidence collected by the Revenue cannot be relied on to fasten the liability on the assessee. Hence, we disapprove and set aside the reasoning given by the lower authorities. In the light of the above, the addition cannot be sustained in the hands of the assessee. 69. The summary of the reasons for deleting the additions are as under : a. That the satisfaction note does not mention the year in which the alleged 'on money' was paid by the assessee. b. The Annexure P1/KMR/RES/01 is a dumb document as it does not give the name, the year and particulars of the assessee. c. As per Annexure/KMR/OFF/07 the amount of Rs.4.56 crore was yet to be received. d. No addition can be made on the basis of the statement of a third party u/s 153C of the Act. e. In more than 10 cases, the registration of the villas have taken place after the search in the case of M/s. KMR Estates and Builders Pvt. Ltd. f. It is a case of the Revenue that in most of the cases, 'on money' was paid at the time of registration of the....
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....to 2019-20. No separate satisfaction note for each year was prepared by the Assessing Officer, giving the details of cash allegedly paid by the assessee to M/s. KMR Estates and Builders Pvt. Ltd. 72. The assessee have challenged the additions made for A.Ys. 2017-18, 2018-19 and 2019-20 by filing separate appeals bearing Nos.21 to 23/Hyd/2023. In view of the submission of both the parties that the issues raised in A.Y. 2016-17 are identical to the other assessment years, we, for the reasons stated hereinabove while deciding the appeal in ITA 20/Hyd/2023 and for similar reasons, delete the additions of Rs. 42,38,128/- Rs. 95,93,581/-, and Rs. 16,91,013/- respectively, for A.Ys. 2017-18 to 2019-20. Thus, the appeals in ITA Nos. 21 to 23/Hyd/2023 are also allowed. 73. Since identical issues are raised in the remaining captioned appeals, therefore, our finding in ITA No. 20/Hyd/2023 would apply mutatis and mutandis to all the remaining capitoned appeals as well. Hence, we delete the additions made in the hands of the assessee, respectively, and allow all the remaining captioned appeals. 74. To sum up, all the appeals of assessee are allowed. Order pronounced in the Open Cour....