ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-2(4), HYDERABAD V. VASUDEVA REALTORS PRIVATE LIMITED, HYDERABAD

ITA 729/HYD/2020

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The case involves an appeal by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)-12, Hyderabad, which had reduced the addition made by the Ld. AO to the assessee's income. The addition was initially made following a search and seizure operation under section 132 of the Income Tax Act, 1961, which revealed unaccounted money receipts amounting to Rs.3,72,39,130 from the sale of villas. The assessee contested the addition, claiming the receipts were for extra/alteration work and not undisclosed income. The Tribunal examined the facts, including the retraction of the Managing Director's initial admission of the receipts as undisclosed income, and found the assessee's arguments unconvincing, leading to the dismissal of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 28633 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHANGING HER VERSION
• Assessee Lawyers: RAVI BHARADAWAJ
• Keywords: Set aside; Reasonable cause; Corroborative evidences; Onus to prove; Retraction; Search and seizure
• Section: 132; 153A

Judgement Text

" आआआआ आआआआआआ आआआआआआ, आआआआआआआआ आआआ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA No.729/Hyd/2020 (निर्धारण वर्ा/Assessment Year:2014-15) Asst. Commissioner of Income Tax, Central Circle-2(4), Hyderabad. Vs. M/s. Vasudeva Realtors Pvt. Ltd., Hyderabad. PAN:AABCV9331K (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri Ravi Bharadawaj, C.A. रधजस् व द्वधरध/Revenue by:: Shri P.V. Pradeep Kumar, CIT-DR सुिवधई की तधरीख/Date of hearing: 13/11/2024 घोर्णध की तधरीख/Pronouncement: 07/01/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M.: This appeal is filed by Revenue, feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals)-12, Hyderabad (“Ld. CIT(A)”), dated 24.09.2020 for the A.Y. 2014-15. 2. The brief facts related to this appeal are that the search and seizure operation u/s.132 of the Income Tax Act,1961(“ the Act”) was carried out on M/s. Vasudeva Realtors Private Limited, Hyderabad (“the assessee”), on 14.07.2016. During the search operation, some documents relating to receipts of unaccounted ITA No.729/Hyd/2020 2 money of Rs.3,72,39,130/- on account of sale of villas in Bloom Field Elation, Phase II were seized from the office premises of the assessee. Therefore, the Learned Assessing Officer (“Ld. AO”) vide order u/s.143(3) r.w.s. 153A of the Act dated 31.12.2018 added Rs.3,72,39,130/- to the total income of the assessee. 3. Aggrieved with the order of the Ld. AO, the assessee filed appeal before the Ld. CIT(A). It was noticed by the Ld. CIT(A) that under identical facts in assessee’s own case for A.Y. 2011-12, the Ld. AO completed the assessment u/s.143(3) of the Act by making addition of 10% of the unaccounted receipt found during the survey operation. Therefore, contending that the Ld. AO cannot review his own assessment on the same set of facts, the Ld. CIT(A) directed the Ld. AO to adopt 10% of unaccounted cash of Rs.3,72,39,130/- as income and accordingly confirmed the disallowance of Rs.37,23,913/- and deleted the balance addition of Rs.3,35,15,217/-. 4. Aggrieved with the order of Ld. CIT(A), the revenue is in appeal before us. The Ld. DR submitted that the solitary issue in their appeal is related to the addition of Rs.3,72,39,130/- made by Ld. AO vide order u/s.143(3) r.w.s. 153A of the Act dated 31.12.2018. He further submitted that during the search ITA No.729/Hyd/2020 3 operation u/s 132 of the Act, some documents relating to receipts of unaccounted money of Rs.3,72,39,130/- on account of sale of villas in Bloom Field Elation, Phase II were seized from the office premises of the assessee. Smt. D. Sunitha, Managing Director (“MD”) of the assessee, in her statements recorded on 08.09.2016 i.e. nearly after a gap of two months from the date of search, admitted such receipts of unaccounted money of Rs.3,72,39,130/- as undisclosed income of the assessee for A.Y. 2014-15. Later on after a gap of two years on 9.10.2018, she retracted from her previous statements and claimed that, the said receipt was received from the customers to undertake extra/alteration work for their respective units on a cost to cost basis and the assessee acted as mediator / facilitator in executing these works. Therefore, the receipts of unaccounted money of Rs.3,72,39,130/- were only the reimbursement received from customer on account of the extra/alteration work get done on their behalf. Ld. DR further submitted that during the gap of two years, Smt. D. Sunitha never made any complaint of any stress or duress while giving statement. Ld. DR submitted that the retraction of statement by the MD of assessee after a long period of two years is not valid. He further submitted that even ITA No.729/Hyd/2020 4 the assessee was asked to provide the details of persons to whom these payments were made and the basis of such payments. However no such information was provided by the assessee. Therefore, he submitted that the claim of the assessee that these receipts were received from the customers who have requested the assessee company to undertake extra/alteration works for their respective units on a cost to cost basis without any corroborative evidences is not to be accepted. Therefore, he submitted that it was very much clear that the MD of the assessee tried to mislead the revenue by changing her version from one to another. In Revenue’s alternate submission, the Ld. DR submitted that, the Ld. CIT(A) had relied on the assessment order of Ld. AO for A.Y. 2011-12, however, the facts under both the cases are not similar. He submitted that, in A.Y. 2011-12, the assessee had accepted the income of 10% of unaccounted receipt during the survey itself and no fresh evidence / documents were found during the course of search. However, in the year under consideration, the assessee never accepted any percentage of income on unaccounted receipt, rather assessee had accepted the whole amount as income, the assessee changed her statement from time to time. Therefore, the facts of the case ITA No.729/Hyd/2020 5 in A.Y. 2011-12 is not similar to the year under consideration. Therefore, the decision taken by the Ld. AO in A.Y. 2011-12 cannot be applied to A.Y. 2012-13. Hence, he prayed before the bench to upheld the addition made by the Ld. AO. 6. Per contra, the Ld. AR relying on the order of Ld. CIT(A) submitted that under identical facts in assessee’s own case for A.Y. 2011-12, the Ld. AO completed the assessment u/s.143(3) of the Act by making addition of 10% of the unaccounted receipt found during the survey operation. The Ld. AR further submitted that the Ld. AO cannot review his own assessment on the same set of facts . Therefore, the Ld. AR prayed before the bench to uphold the order of the Ld. CIT(A) and dismiss the appeal of the Revenue. 7. We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. As far as the contention of the assessee is concerned that under identical facts in assessee’s own case for A.Y. 2011-12, the Ld. AO completed the assessment u/s.143(3) of the Act by making addition of 10% of unaccounted receipts found during the survey operation. This contention of the assessee is not acceptable in the year under consideration, as the asssessee during the period ITA No.729/Hyd/2020 6 of survey itself in A.Y. 2011-12, admitted the income of 10% of unaccounted receipts. However in the year under consideration, the MD of the assessee after considering the documents found during the search and seizure operation conducted u/s 132 of the Act, in her statement admitted the unaccounted receipts of Rs.3,72,39,130/- as undisclosed income of the assessee for A.Y. 2014-15 and without any evidence to the contrary, retracted from her earlier statement after a gap of 2 years by an Affidavit and claimed that, the said amount was received from the customers to undertake extra / alteration work for their respective units at a cost to cost basis and the assessee acted as mediator / facilitator in executing these works. Hence, the receipt of unaccounted money of Rs.3,72,39,130/- were only the reimbursement of expenditures from customers on account of extra / alteration work done on their behalf. The retraction affidavit filed by the assessee after a gap of 2 years is not acceptable, as, there was no reason or reasonable cause which prevented the assessee to make the retraction at the earliest opportunity. Further, we found that the details regarding the persons from whom the unaccounted amount were received and on what basis, were also called from the assessee, however, the assessee failed to provide ITA No.729/Hyd/2020 7 any such details before the Ld. AO. It is the duty of the assessee to provide the details from whom he has received money and further, it is also required to be disclosed as to whom the said money was paid for doing the extra work. In the absence of these details and supporting affidavit, the Ld. AO was right in making the addition in the hands of the assessee. 8. We also found that, the Ld.CIT(A) overlooked the glaring evidence and the documents available on record and further did not consider about the failure on the part of the assessee to discharge his primary onus to prove that money was received by the assessee form its customers for doing the additional work. The Ld.CIT(A) was having co-terminus power and should have exercised his jurisdiction and power as available under the Act. The Ld.CIT(A) without applying his mind has merely followed the earlier assessment order despite the fact that the same was not applicable to the present case for the reasons mentioned hereinabove. On the basis of aforesaid findings, we are of the considered opinion that there is no infirmity in the addition of Rs.3,72,39,130/- made by the Ld. AO. Therefore, we set aside the order of Ld. CIT(A) and uphold the decision of Ld. AO on this issue. Accordingly, we allow the appeal of the Revenue. ITA No.729/Hyd/2020 8 9. In the result, the appeal of Revenue is allowed. Order pronounced in the open Court on 7th Jan., 2025. Sd/- Sd/- (LALIET KUMAR) (MADHUSUDAN SAWDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad. Dated: 07.01.2025. * Reddy gp Copy of the Order forwarded to : 1. M/s. Vasudeva Realtors Pvt. Ltd., 1-61/BV/10/1, Survey No.4, Khajaguda, Nanakram Guda Road,Serilingampally, Hyderabad-500008 2. ACIT, Central Circle 2(4), Hyderabad. 3. Pr.CIT (Central), Hyderabad. 4. DR, ITAT, Hyderabad. 5. Guard file. BY ORDER, "