Bhumala Uma Rani, Vijayawada V. Deputy Commissioner of Income Tax, Central Circle, Vijayawada

CO 64/VIZ/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8364 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 7 month(s) 28 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 13-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K SONOWAL
• Keywords: Sale consideration of property below Jantri Value; Gift; Income from undisclosed sources; Search and seizure; Opportunity of cross examination; Cost of acquisition; Fair market value; Third party statement; Block assessment; Tax effect; Set aside
• Section: 50C; 54F; 153A; 132; 12

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T (SS)A .NO. 05 /VIZ/201 8 ( / A SSESSMENT YEAR : 2014 - 15 ) DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE VIJAYAWADA VS. SMT. BHUMALA UMA RANI PROPX : SRI SAI HARSHA AGENCIES , D.NO.74 - 1 - 22/1 , PATAMATA, MG ROAD , VIJAYAWADA, KRISHNA DISTRICT [PAN : AGQPB3936Q] ( / APPELLANT) ( / RESPONDENT) CO NO. 64 /VIZ/2018 (ARISING OUT OF I.T(SS) A. NO. 05 /VIZ/201 8 ) ( / ASSESSMENT YEAR:20 14 - 15 ) SMT. BHUMALA UMA RANI PROPX : SRI SAI HARSHA AGENCIES , D.NO.74 - 1 - 22/1 , PATAMATA, MG ROAD , VIJAYAWADA, KRISHNA DISTRICT [PAN : AGQPB3936Q] VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE VIJAYAWADA ( / APPELLANT) ( / RESPONDENT) ./ I .T (SS)A .NO. 06/VIZ/2018 & 07/VIZ/2018 ( / A SSESSMENT YEARS : 2010 - 11 & 2014 - 15) DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE VIJAYAWADA VS. SHRI BHUMALA VENKATA NARASIMHA REDDY D.NO.70 - 2 - 23/3, PLOT NO.20 SHIVASANKAR NAGAR, PATAMATA VIJAYAWADA [PAN :AJLPB6757H] ( / APPELLANT) ( / RESPONDENT) 2 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA CO NO. 65 /VIZ/2018 & 66 /VIZ/2018 (ARISING OUT OF I.T. (SS) A.NO S . 06 /VIZ/201 8 AND 07/VIZ/2018 ) ( / ASSESSMENT YEAR S : 2010 - 11 & 20 14 - 15 ) SHRI BHUMALA VENKATA NARASIMHA REDDY D.NO.7 - 2 - 23/3, PLOT NO.20 SHIVASANKAR NAGAR, PATAMATA VIJAYAWADA [PAN :AJLPB6757H] VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE VIJAYAWADA ( / APPELLANT) ( / RESPONDENT) /REVENUE BY : S HRI D.K.SONOWAL , DR / ASSESSEE BY : SHRI G.V.N.HARI, AR / DATE OF HEARING : 03 .0 4 .2019 / DATE OF PRONOUNCEMENT : 10 .04.2019 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THESE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] - 3, VISAKHAPATNAM VIDE I.T.A.NOS.286, 288 & 292/2016 - 17/CIT(A) - 3/VSP/2017 - 1 8 DATED 26.02.2018 AND CROSS OBJECTIONS ARE FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR (A.Y.) 2010 - 11 AND 2014 - 15. SINCE THE IS SUES INVOLVED IN THESE APPEALS ARE COMMON, THE APPEALS ARE CLUBBED, HEARD TOGETHER AND A COMMON ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AS UNDER. 3 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA I.T(SS)A.NO.05 & 0 7 /VIZ/2018 & C O NO. 64 & 6 6 /VIZ/2018,A.Y.2014 - 15 2. IN THESE APPEALS, FACTS ARE IDENTICAL IN BOTH THE APPEALS FOR THE A.Y. 2014 - 15. HENCE THE FACTS ARE EXTRACTED FROM THE APPEAL OF SMT. BHUMALA UMA RANI . THE ASSESSEE BHUMALA UMA RANI IS WIFE OF SHRI B.MALLIKARJUNA REDDY. SHRI BHUMALA VENKATA NARASIMHA REDDY AND SHRI BHUMALA MALLIKARJUNA REDDY ARE BROTHERS. SHRI BHUMALA MALLIKARJUNA REDDY AND SHRI BHUMALA VENKATA NARSIMHA REDDY WERE THE OWNERS OF LAND ADMEASURI NG AC.1.42 CENTS SITUATED AT NUNNA VILLAGE, VIJAYAWADA WHICH IS ADJOINING LAND OF SIDDARTHA ACADEMY OF GENERAL & TECHNICAL EDUCATION (IN SHORT SIDDARTHA ACADEMY). SHRI MALLIKARJUNA REDDY HAS GIFTED HIS SHARE OF 0.71 CENTS TO SMT. B.UMA RANI, HIS WIFE. 2.1. THE ASSESSEE IS AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF TRADING IN ELECTRICAL APPLIANCES AND THE PROPRIETRIX OF M/S SRI SAI HARSHA AGENCIES. FOR THE A.Y.2014 - 15 SHE DID NOT FILE THE RETURN OF INCOME. A SEARCH U/S 132 WAS CARRIED OUT IN THE CASE OF SIDDHARTHA ACADEMY ON 07.05.2014 AND DURING THE COURSE OF SEARCH, CERTAIN INCRIMINATING MATERIAL WAS FOUND IN THE FORM OF LOOSE SHEETS PERTAINING TO PURCHASE OF VACANT LAND OF AC.1.42 CENTS SITUATED AT NUNNA BY SIDDARTHA ACADEMY IN JANUARY 2014 FOR A C ONSIDERATION OF RS.7,49,05,500/ - INCLUDING THE STAMP DUTY AND REGISTRATION 4 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA CHARGES FROM THE ASSESSEE SMT.BHUMALA UMA RANI AND HER BROTHER - IN - LAW, SHRI BHUMALA VENKATA NARASIMHA REDDY @AC.0.71 CENTS EACH. THE SAID MATERIAL WAS SEIZED AS ANNEXURE - A/SAGTE/3( ANNEXURE - 10) OF PAGE NOS. 37 AND 38 WHEREIN THE ENTIRE SALE TRANSACTIONS WERE RECORDED. IN THE INCRIMINATING MATERIAL MARKED AS ANNEXURE - A/SAGTE/3, IN PAGE NO.42, NOTING WAS FOUND REGARDING THE SALE OF 0.71 ACRES OF LAND BY THE ASSESSEE FOR A CONSIDERATIO N OF RS.3,72,75,000/ - @ 5,25,75,000/ - PER ACRE AND OUT OF WHICH AN AMOUNT OF RS.24,85,000/ - WAS PAID TO THE ASSESSEE AND A SUM OF RS.6,17,500/ - EACH TO HER TWO DAUGHTERS NAMELY B.JANAKI REDDY AND B. BALA SARASWATHI BY WAY OF DDS A ND THE BALANCE AMOUNT WAS PAID IN CASH. SEARCH PROCEEDINGS WERE ALSO CONDUCTED COVERING THE ASSESSEE. AS PER THE MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE PREMISES OF SIDDHARTHA ACADEMY, THE AO HAD ISSUED NOTICE U/S 153C R.W.S. 153A ON 25.08.2015 CALLING FOR THE RETURN OF INCOME FOR THE A.Y. 2014 - 15. IN RESPONSE TO THE NOTICE U/S 153C, THE ASSESSEE FILED HER RETURN OF INCOME ON 21.03.2016 AND ADMITTED THE INCOME FROM BUSINESS OF RS.3,09,196/ - AND CAPITAL GAINS ON SALE OF LAND OF RS.24,85,000/. DU RING THE PROCEEDINGS, THE ASSESSEE HAD DENIED HAVING RECEIVED ANY PAYMENT OVER AND ABOVE THE SALE CONSIDERATION OF RS.24,85,000/ - AS PER THE REGISTERED DOCUMENT AND CLAIMED THE 5 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA DEDUCTION OF RS.24,80,000/ - U/S 54EC FOR PURCHASE OF RURAL ELECTRIFICATION BOND S(REC). THE AO CONFRONTED THE ASSESSEE WITH THE MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE PREMISES OF SIDDHARTHA ACADEMY FOR THE SALE CONSIDERATION OF RS.7,45,50,000/ - FOR ACRES 1.42 @ RS.5,25,00,000/ - PER ACRE AND AGGREGATE CASH PAYMENT OF RS.6,95,80,000/ - TO BOTH THE CO - OWNERS. THE LAND OWNERS I.E. THE ASSESSEE AND HER BROTHER - IN - LAW DENIED HAVING RECEIVED ANY PAYMENT IN CASH AND STATED THAT THEY HAVE RECEIVED ONLY A SUM OF RS.49,70,000/ - @RS.24,85,000/ - EACH AND DID NOT RECEIVE ANY CONSIDE RATION OVER AND ABOVE THE AMOUNT RECORDED IN THE REGISTERED DEEDS. THE AO NOT BEING CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, HAVING FOUND THE MATERIAL EVIDENCING THE PAYMENT OF RS.7,45,50,000/ - , ASSESSED THE ENTIRE SUM OF RS.7,45,50,000/ - IN THE HA NDS OF THE LAND OWNERS I.E. THE ASSESSEE AND HER BROTHER - IN - LAW. ACCORDINGLY, THE AO BROUGHT A SUM OF RS.3,72,75,000/ - , 50% OF THE SALE CONSIDERATION AS PER THE LOOSE SHEETS AS CAPITAL GAINS AND ALLOWED INDEXED COST OF ACQUISITION OF RS.1,87,800/ - AND EX EMPTION U/S 54EC OF RS.24,67,505/ - AND TAXED THE BALANCE AMOUNT OF RS.3,49,28,891/ - IN THE HANDS OF THE ASSESSEE. 2.2. SIMILARLY IN THE CASE OF SHRI B.V.NARASIMHA REDDY, THE AO ASSESSED 50% SHARE OF RS.7,49,05,500/ - FOR AN AMOUNT OF RS.3,72,75,000/ - IN HI S 6 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA HANDS AFTER ALLOWING DEDUCTION U/S 54F AND INDEXED COST OF ACQUISITION ASSESSED A SUM OF RS.3,49,90,588/ - TO TAX IN HIS HANDS. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) DELETED THE ADDITION MADE BY THE AO, OBSERVING THAT BOTH THE BUYER AND SELLER HAVE DENIED EXCHANGE OF CASH IN THE SALE TRANSACTION. SINCE THERE WAS NO OTHER EVIDENCE EXCEPT THE LOOSE SHEETS, THE LD . CIT(A) VIEWED THAT THERE IS NO CASE FOR MAKING THE ADDITION IN THE HANDS OF THE AS SESSEE. ACCORDINGLY, THE LD.CIT(A) FOLLOWED THE ORDER OF THIS TRIBUNAL ON SIMILAR FACTS IN THE CASE OF SRI VENKATARAMA SAI DEVELOPERS IN I.T.A. NO.453/VIZ/2012 DATED 06.11.2015 AND DELETED THE ADDITION MADE BY THE AO. 4. AGAINST THE ORDER OF THE LD.CIT (A), THE REVENUE HAS FILED APPEAL BEFORE THIS TRIBUNAL. DURING THE APPEAL HEARING, THE LD.DR SUBMITTED THAT A SEARCH U/S 132 WAS CONDUCTED IN THE CASE OF SIDDHARTHA ACADEMY AND DURING THE COURSE OF SEARCH, INCRIMINATING MATERIAL IN THE FORM OF LOOSE SHEET S WAS FOUND VIDE ANNEXURE - A/SAGTE/3(ANNEXURE - 10) OF PAGE NOS. 37 AND 38 AND THE SALE TRANSACTIONS WERE NOT ED @RS.5,25,00,000/ - PER ACRE AND THE TOTAL CONSIDERATION WAS ALSO WRITTEN ON LOOSE SHEET AT RS.7,49,05,500/ - INCLUDING REGISTRATION EXPENSES, VERY CL EARLY. IN PAGE 7 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA NO.38, DETAILS OF PAYMENTS WAS NOTED CLEARLY TO BOTH THE CO - OWNERS OF THE LAND I.E. SHRI NARASIMHA REDDY AND THE ASSESSEE AND THE PAYMENTS TO HER DAUGHTERS. IN PAGE NO.41, CASH BALANCE PAYABLE WAS ARRIVED AT. IN PAGE NO.42, THE DETAILS OF CASH PAYMENT MADE TO THE ASSESSEES AS WELL AS THE DAUGHTERS BY WAY OF DDS AND CHEQUES WERE ALSO NOTED . SIMILARLY, IN PAGE NO.43, PAYMENTS MADE TO SHRI B. NARASIMHA REDDY AND HIS DAUGHTERS BY CHEQUE AND CASH WAS ALSO RECORDED. SCRUTINY OF THE SEIZED MATER IAL VERY CLEARLY SHOWS THAT THE TOTAL CONSIDERATION PAID BY SIDDHARTHA ACADEMY TO THE ASSESSEE AND S HRI B.NARASIMHA REDDY WAS RS.7,45,50,000/ - @RS.5,25,00,000/ - PER ACRE . O UT OF WHICH THE PAYMENT BY CHEQUE WAS AT RS.49,70,000/ - AND THE BALANCE AMOUNT OF R S.6,95,80,000/ - WAS PAID IN CASH. IN VIEW OF THE COMPLETE DETAILS AVAILABLE, IT IS ESTABLISHED THAT THE ASSESSEES HAVE RECEIVED THE CASH PAYMENT OF RS.6,95,80,000/ - @ RS.3,47,90,000/ - EACH, BUT NOT OFFERED TO TAX. SINCE THE MATERIAL WAS FOUND DURING THE C OURSE OF SEARCH, THE SAME CANNOT BE BRUSHED ASIDE AND I T HAS EVIDENTIARY VALUE WHI CH NEEDS TO BE BELIEVED AS CORRECT. MERE DENIAL OF BOTH THE BUYER AND SELLER DOES NOT MAKE ANY DIFFERENCE . THEREFORE, ARGUED THAT THE AO HAS RIGHTLY MADE THE ADDITION AND THE LD.CIT(A) OUGHT TO HAVE CONFIRMED THE ADDITION, IN VIEW OF THE FACT THAT THE MATERIAL WAS FOUND 8 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA DURING THE COURSE OF SEARCH AND THE ONUS IS ON THE ASSESSEE TO PROVE THAT SHE HA S NOT REC EIVED THE CASH PAYMENT. THE DEPARTMENT HAS COMPLETELY PROVED THE BURDEN WITH CORROBORATED EVIDENCE, THEREFORE, ARGUED THAT THE ADDITION REQUIRED TO BE CONFIRMED. THEREFORE, REQUESTED TO SET ASIDE THE ORDER OF THE LD.CIT(A) AND TO CONFIRM THE ORDER OF THE AO. ON THE OTHER HAND, THE LD.AR SUPPORTED THE ORDERS OF THE LD.CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THE INSTANT CASE, A SEARCH U/S 132 WAS CONDUCTED IN THE PREMISES OF SIDDHARTHA ACADEMY. DURING THE COURSE OF SEARCH, LOOSE SHEETS WERE FOUND INDICATING PURCHASE OF LAND OF AC 1.42 CENTS ADJOINING SIDDHARTHA ACADEMY FROM SMT. B.UMA RANI AND SHRI B.V.NARASIMHA REDDY FOR A CONSIDERATION OF RS.7,49,05,500/ - @RS.5,25,00,000/ - PER ACRE. AS PER THE LOOSE SHEE TS FOUND DURING THE COURSE OF SEARCH, IT IS OBSERVED THAT THE BUYER HAS MADE THE PAYMENT OF RS.49,70,000/ - BY CHEQUE AND THE BALANCE AMOUNT BY CASH. THE LOOSE SHEETS WERE FOUND IN THE PREMISES OF SIDDHARTHA ACADEMY, THEREFORE THE PRESUMPTION U/S 292C IS A VAILABLE TO THE DEPARTMENT AGAINST SIDDHARTHA ACADEMY, WHERE THE MATERIAL WAS FOUND. IN THE INSTANT CASE THOUGH SEARCH OPERATIONS WERE CONDUCTED IN THE ASSESSEES PREMISES ALSO NO EVIDENCE WAS FOUND REGARDING THE CASH 9 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA PAYMENT TO THE ASSESSEE. HENCE THE EVI DENCE FOUND IN THE PREMISES OF SIDDHARTHA ACADEMY CANNOT BE IMPOSED ON ASSESSEE WITHOUT ANY CORROBORATIVE EVIDENCE. A STATEMENT WAS RECORDED FROM BOTH THE BUYERS AND THE SELLERS, BOTH OF THEM HAVE ACCEPTED THAT THE PAYMENT WAS ONLY RS.49,70,000/ - FOR PURC HASE OF 1.42 ACRES OF LAND FROM SMT.B.UMA RANI AND SHRI B.NARASIMHA REDDY. BOTH SIDDHARTHA ACADEMY AS WELL AS THE ASSESSEES HAVE DENIED THE PAYMENT OVER AND ABOVE THE AMOUNT RECORDED IN THE REGISTERED DOCUMENT WHICH WAS @RS.49,70,000/ - I.E. RS.24,85,000/ - TO SMT.B.UMA RANI AND RS.24,85,000/ - TO SHRI B.V.NARASIMHA REDDY, THE CO - OWNERS OF THE LAND. THE LD.CIT(A) DELETED THE ADDITION PLACING RELIANCE ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF SRI VENKATARAMA SAI DEVELOPERS IN I.T.A. NO.453/VIZ/2012 DAT ED 06.11.2015. FOR THE SAKE OF CLARITY AND CONVENIENCE WE EXTRACT RELEVANT PART OF THE ORDER OF THE LD.CIT(A) IN PARA NO.6.5 WHICH READS AS UNDER : 6.5. IN THE LIGHT OF THE AFORESAID SIMILARITY OF FACTS, I AM CONSTRAINED TO FOLLOW THE DECISION RENDERED BY THE JURISDICTIONAL TRIBUNAL ADHERING TO THE PRINCIPLE OF JUDICIAL DISCIPLINE. THE RELEVANT EXTRACTS OF THE DECISION RENDERED BY THE HONBLE ITAT IN THEIR ORDER DT.6.11.2014 ARE AS UNDER : 13. ADMITTEDLY, IN THE ASSESSEE CASE, THERE WAS NO SEARCH. THE SEIZED DOCUMENT FOUND DURING SEARCH AT THE PREMISES OF M/S. CLASSIQUE FARMS & ESTATES IS A LOOSE SHEET, WHEREIN CERTAIN FINANCIAL TRANSACTIONS WERE RECORDED IN THE NAME OF ONE OF THE PARTNER OF THE ASSESSEE FIRM. ADMITTEDLY, THE LOOSE SHEET FOUND AT THE VENDEE FIRM WAS WRITTEN BY ONE MR. RAMU, AN EMPLOYEE OF THE FIRM. BASED ON THE SAID DOCUMENT AND ALSO ADMISSION MADE BY THE 10 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA PARTNERS OF THE VENDEE FIRM, THE A.O. ACTED UPON AND CAME TO THE CONCLU SION THAT THE ON MONEY WAS PAID TO THE ASSESSEE FIRM TOWARDS SALE OF PROPERTY. AT THE TIME OF ASSESSMENT PROCEEDINGS, THE PARTNERS OF THE ASSESSEE FIRM CATEGORICALLY DENIED HAVING RECEIVED THE ON MONEY RIGHT FROM THE BEGINNING. THE ASSESSEE CONTENDED THAT THE SEIZED DOCUMENT FOUND IN THE PREMISES OF M/S. CLASSIQUE FARMS & ESTATES IS NEITHER IN THE HAND WRITING OF ANY OF THE PARTNERS OF THE FIRM NOR IS FOUND IN THE PREMISES OF THE ASSESSEE FIRM, AND THE SAME IS WRITTEN BY AN EMPLOYEE OF THE VE NDEE FIRM, THEREFORE CANNOT BE USED AS EVIDENCE AGAINST IT. BESIDES THE SEIZED LOOSE SHEET, NO OTHER DOCUMENT IS IN THE POSSESSION OF THE A.O. TO SHOW THAT THE ASSESSEE HAS RECEIVED ON MONEY FROM THE PURCHASER. THE A.O. HAS NOT MADE ANY ATTEMPT TO FIND OUT SOME RELIABLE AND COGENT MATERIAL EVIDENCE ON RECORD TO SUPPORT HIS FINDINGS OR TO CORROBORATE THE STATEMENTS OF THE VENDEE FIRM. THE ASSESSEE FIRM DENIED HAVING RECEIVED THE MONEY OVER AND ABOVE WHAT IS STATED IN THE SALE DEED. 14. THE A.R. OF THE ASSES SEE RIGHTLY POINTED OUT THAT THE SALE DEED REGISTERED IN THE OFFICE OF THE SUB - REGISTRAR CLEARLY SHOWS THAT THE CONSIDERATION OF RS.48 LAKHS WAS FIXED FOR THE PROPERTY AND WHICH WAS EXCHANGED THROUGH PROPER BANKING CHANNEL. IT WAS NOT A CASE OF REVENUE THA T THE VALUE SHOWN IN THE SALE DEED IS NOT THE REAL VALUE OF THE PROPERTY BECAUSE THE VALUE DECLARED IN THE SALE DEED IS THE MARKET VALUE OF THE PROPERTY FIXED BY THE STATE GOVERNMENT AUTHORITIES FOR DETERMINING THE STAMP DUTY PAYABLE TO THE GOVERNMENT FOR REGISTERING THE PROPERTIES AND ALSO WHICH WAS ACCEPTED BY THE REGISTERING AUTHORITY. FURTHER, THERE IS NO EVIDENCE TO SHOW THAT THERE IS UNDER VALUATION OF PROPERTY AND SECTION 50C OF THE ACT IS INVOKED WHILE COMPLETING THE ASSESSMENT. THE A.O. MERELY ACTE D UPON THE STATEMENT GIVEN BY THE THIRD PARTY, WHICH WAS TOTALLY DENIED BY THE PARTNERS OF THE ASSESSEE FIRM. IT WAS A SETTLED POSITION OF LAW THAT UNLESS THE STATEMENT IS TESTED UNDER THE CROSS EXAMINATION, THE SAME CANNOT BE CONSIDERED AS EVIDENCE AGAINS T THE ASSESSEE. THE A.O. USED THE ADMISSION OF PARTNERS OF VENDEE FIRM MADE IN THE STATEMENT U/S 132(4) OF THE ACT IN THEIR CASE, AGAINST THE ASSESSEE. BUT, THE A.O. 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, BECAUSE THE MAKER OF STATEMENT CAN BIND HIMSELF BUT HOW HE BINDS OTHERS FROM HIS STATEMENT WITHOUT THERE BEING ANY FURTHER EVIDENCE ON RECORD. 15. IN THE PRESENT CASE ON HAND, EXCEP T LOOSE SHEET FOUND IN THE PREMISES OF THIRD PARTY AND ADMISSION MADE BY THE THIRD PARTY IN 11 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA THEIR ASSESSMENT PROCEEDINGS, THERE IS NO OTHER EVIDENCE ON RECORD TO PROVE THAT ON MONEY IS PAID. THE ASSESSING OFFICER, WITHOUT BROUGHT ON RECORD ANY EVIDENCE TO PROVE THAT ON MONEY IS EXCHANGED BETWEEN THE PARTIES, MERELY HARPING UPON THE LOOSE SHEET AND THE THIRD PARTY ADMISSION, WHICH CANNOT BE CONSIDERED AS CONCLUSIVE EVIDENCE AGAINST THE ASSESSEE TO BRING THE ON MONEY TO TAX AS UNDISCLOSED INCOME. THE A.O. 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 TH E 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 VENDEE FIRM 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. 16. NOW COMING TO THE OBSERVATIONS OF THE CIT(A). THE CIT(A) WHILE CONFIRMING THE ASSESSMENT ORDER, OBSERVED THAT IT IS UNCOMMON THAT ON MONEY PAID/RECEIVED IN REAL ESTATE TRANSACTIONS. THE CIT(A) FURTHER OBSERVED THAT IT IS A WELL KNOWN FACT AND OPEN SECRET THAT THERE IS A LOT OF BLACK MONEY INVOLVED IN THE REAL ESTATE TRANSACTIONS AND PARTICULARLY CASH COMPONENT IS MORE IN THE LANDS SITUATED IN OUTSKIRTS OF THE BIG CITIES. WE DO NOT AGREE WITH THE FINDINGS OF THE CIT(A) FOR THE REASON THAT ASSESSMENTS CANNOT BE MADE OR TAXES CANNOT BE L EVIED ON THE BASIS OF THE THEORY OF PROBABILITY. TO TAX ANY PARTICULAR INCOME, THERE MUST BE SOME MATERIAL EVIDENCE TO SHOW THAT THE INCOME IS ACCRUED OR ARISES TO THE PARTICULAR ASSESS E E. UNLESS, THERE IS A PROOF, THE DEPARTMENT CANNOT COLLECT THE TAX ON THE ADMISSION OF THE TAX PAYER ALONE. THE CIT, AT ONE STAGE HELD THAT THERE IS NO NEED OF DIRECT OR PRIMARY EVIDENCE, EVEN IF THERE IS A CIRCUMSTANTIAL EVIDENCE, BASED ON CIRCUMSTANTIAL EVIDENCE, THE A.O. COME TO THE CONCLUSION AND DECIDE THE ISSUE ACCORDI NGLY. WE DO NOT AGREE WITH THE STAND TAKEN BY THE CIT(A), FOR THE SIMPLE REASON THAT TO TAX ANY PARTICULAR RECEIPT, PRIMARY EVIDENCE IS VERY MUCH NECESSARY AND UNLESS THERE IS A PRIMARY EVIDENCE, CIRCUMSTANTIAL EVIDENCE CANNOT BE CONSIDERED AS A CONCLUSIVE EVIDENCE AGAINST ANY PERSON TO TAX ANY PARTICULAR RECEIPT. CIRCUMSTANTIAL EVIDENCE PLAYS AN IMPORTANT ROLE IN INCOME TAX PROCEEDINGS, WHERE THE A.O. NEEDS TO ESTIMATE THE INCOME BASED ON SOME EVIDENCE AVAILABLE FOR PART OF THE YEAR, THEN REMAINING PERIOD ESTIMATION CAN BE MADE BASED ON EVIDENCE AVAILABLE. BUT, PAYMENT/RECEIPT OF ON MONEY IS PURELY A 12 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA FACTUAL ISSUE WHICH CANNOT BE DECIDED BASED ON CIRCUMSTANTIAL EVIDENCE. 17. NOW COMING TO THE CASE LAWS RELIED UPON BY THE ASSESSEE COUNSEL, THE ASSESSEE'S COU NSEL AT THE TIME OF HEARING RELIED UPON PLETHORA OF CASE LAWS IN SUPPORT OF HIS CONTENTIONS. 18. THE A.R. RELIED UPON ITAT HYDERABAD 'A' BENCH DECISION IN THE CASE OF SMT. K.V. LAKSHMI SAVITRI DEVI VS. ACIT (2012) 148 TTJ 517, WHEREIN THE TRIBUNAL UNDER SI MILAR CIRCUMSTANCES HELD AS UNDER: ADMITTEDLY THERE WAS NO SEARCH ACTION IN THE CASE OF THE ASSESSEE. IT IS A LOOSE SLIP CONTAINING CERTAIN ENTRIES RECORDING THE PAYMENT WHICH WAS FOUND AT THE PREMISES OF CRK. IT DOES NOT CONTAIN EITHER DATE OF PAYMENT OR NAME OF THE PERSON WHO HAS MADE THE PAYMENT. ACCORDING TO THE DEPARTMENT, CRK DENOTES C. RADHA KRISHNA KUMAR AND KRK DENOTES K. RAJANI KUMARI. HOWEVER, NO NAME OF THE ASSESSEE WAS FOUND IN THE LOUSE SHEET. THE P ROPERTY WAS PURCHASED FROM P W/ O CRK FO R A DISCLOSED CONSIDERATION OF R S. 65 LAKHS BY THE ASSESSEE. THE PROPERTY HAS BEEN REGISTERED AND THE SALE DEED WAS E XECUTED FOR A CONSIDERATION OF R S. 65 LAKHS ON 21 ST AUG., 2006 WHICH CONSIDERATION HAS BEEN ACCEPTED BY THE STATE REGISTRATION AUT HORITIES. FURTHER NOTHING WAS BROUGHT ON RECORD TO SHOW THAT THERE WAS ANY INVOKING OF S. 50C WHILE COMPLETING THE ASSESSMENT IN THE CASE OF THE SELLER. THERE IS NO EVIDENCE OTHER THAN THE SEIZED MATERIAL MARKED AS A /CRK / 104' WHERE RELEVANT ENTRIES ARE MA DE AT RS.1,65,00,000. THE SEIZED MATERIAL WAS NOT FOUND AT THE PREMISES O F THE ASSESSEE AND THERE IS NO CORROBORATIVE MATERIAL TO SUGGEST THAT THE ASSES SEE HAS ACTUALLY PAID RS. 1.65 C RORES TOWARDS PURCHASE CONSIDERATION OF THE PROPERTY. THE ASSESSEE AND H ER BROTHER CATEGORICALLY DENIED THE PAYMENT OF ANY MONEY OVER AND ABOVE RS. 65 LAKHS. THE AO PLACED HI S RELIANCE ON THE STATEMEN T OF S , WHO IS A THIRD PARTY. THE EVIDENCE BROUGHT ON RECORD BY THE DEPARTMENT IS NOT ENOUGH TO FASTEN ADDITIONAL TAX LIABILITY ON THE ASSESSEE. AS SEEN FROM THE ABOVE DOCUMENT THIS IS JUST A HANDWRITTEN LOOSE DOCUMENT AND THE HANDWRITING IS ALSO NOT OF THE ASSESSEE AND THE LOOSE DOCUMENT WAS FOUND AT THE PREMISES OF A THIRD PARTY. THE BURDEN IS ON THE DEPARTMENT TO PROVE CONCLUSIV ELY THAT THE LOOSE DOCUMENT BELONGS TO THE ASSESSEE. THERE IS NO PRESUMPTION IN LAW THAT THE ASSESSEE HAS ACTUALLY PAID R S. 165 LAKHS TOWARDS PURCHASE OF THE PROPERTY. THE UNDISCLOSED INCOME IN THIS CASE IS TO BE COMPUTED BY THE A 0 ON THE BASIS OF THE AVAILABLE MATERIAL ON RECORD. IT SHOULD NOT BE BASED ON CONJECTURES AND SURMISES. AS OF NOW THE MATERIAL CONSIDERED BY THE A0 FOR MAKING THE ADDITION OF R S. 1 CRORE IS SEIZED MATERIAL MARKED A S A/CR K / 1 04 AND THE STATEMENT OF S. THIS LOOSE SHEET FOUND AT THE PREMISES OF CRK IS NOT ENOUGH MATERIAL TO SUSTAIN THIS ADDITION. THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH AND THE STATEMENT 13 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA RECORDED IS SOME PIECE OF EVIDENCE TO MAKE THE ADDITION . THE A 0 HAS TO ESTABLISH THE L INK BETW EEN THE SEIZED MATERIAL AND OTHER BOOKS OF ACCOUNT TO THE ASSESSEE. THE SEIZED MATERIAL AND STATEMENT OF CRK CANNOT BE CONCLUSIVE EVIDENCE TO MAKE THIS ADDITION. THE ENTIRE CASE HEREIN IS DEPENDING UPON THE RULE OF EVIDENCE. THERE IS NO CONCLUSIVE PRESUMPT ION TO SAY THAT ACTUAL CONSIDERATION PASSED ON B ETWEEN THE PARTIES IS ACTUALLY R S. 165 LAKHS. THE ASSESSEE AS WELL AS HER BROTHER STATED IN THEIR RESPECTIVE STATEMENTS THAT THE CONSIDERATION PASSED BETWEEN THE PARTIES IS ONLY RS. 65 LAKHS. IN SPITE OF THIS THE AO PROCEEDED TO CONCLUDE THAT THE SEIZED MATERIAL IS CONCLUSIVELY REFLECTING THE PAYMENT OF CONSIDERATION AT RS. 165 LAKHS. THE DEPARTMENT HEREIN I S REQUIRED TO ESTABLISH THE NEXUS OF THE SEIZED MATERIAL TO THE ASSESSEE. AS STATED EARLIER THERE IS NO DATE AND NAME OF THE ASSESSEE. THE ALLEGATION OF THE DEPARTMENT IS THAT THE SEIZED MATERIAL DENOTES THE PAYMENT MADE BY THE ASSESSEE TO THE PURCHASER FOR PURCHASE OF THE PROPERTY. HOWEVER, NO SUCH NARRATION OR NAME OF THE ASSESSEE WAS FOUND IN THE SEIZED M ATERIAL. THE DEPARTMENT IS NOT ABLE TO UNEARTH ANY DOCUMENT OR MATERIAL OR ANY CORROBORATIVE MATERIAL TO SHOW THAT THE ASSESSEE HEREIN ACTUALLY PAID R S. 165 LAKHS FOR PURCHASE OF THE PROPERTY. THE DEPARTMENT HAS NOT BROUGHT ON RECORD THE DATE ON WHICH THE PAYMENT WAS M ADE AND THE SOURCE FROM WHICH IT IS PAID AND/OR ANY DETAILS OF BANK ACCOUNT FROM WHERE THE CASH WAS WITHDRAWN. WITHOUT ANY OF THESE DETAILS, THE DEPARTMENT HAS TAKEN A V IEW THAT THE ASSESSEE HAS PAID R S.165 LAKHS FOR PURCHASE OF THE PROPERTY. THE DEPARTMENT CANNOT DRAW INFERENCE ON THE BASIS OF SUSPICION, CONJECTURES AND SURMISES. SUSPICION, HOWEVER STRONG CANNOT TAKE PLACE OF MATERIAL IN SU PPORT OF THE FINDING FROM THE A 0. THE A0 SHOULD ACT IN A JUDICIAL MANNER, PROCEED WITH JUDICIAL SPIRIT AN D COME TO A JUDICIAL CONCLUSION. THE A0 IS REQUIRED TO ACT FAIRLY AS A REASONABLE PERSON AND NOT ARBITRARILY AND CAPRICIOUSLY. THE ASSESSMENT MADE SHOULD HAVE ENOUGH MATERIAL AND IT SHOULD STAND ON ITS OWN LEGS. THE BASIS FOR ADDITION CANNOT BE ONLY THE LO OSE SHEET OR A THIRD PARTY STATEMENT. IN THE ABSENCE OF CORROBORATIVE MATERIAL, AND/OR CIRCUMSTANTIAL EVIDENCE, THE ADDITION CANNOT BE SUSTAINED. THUS, NO ADDITION CAN BE MADE ON A DUMB DOCUMENT AND NOTING ON LOOSE SHEET. IT SHOULD BE SUPPORTED BY THE EVID ENCE ON RECORD AND THE EVIDENCE ON RECORD IS NOT SUFFICIENT TO SUPPORT THE REVENUE'S ACTION. IN A BLOCK ASSESSMENT UNDISCLOSED INCOME HAS TO BE DETER MINED ON THE BASIS OF THE MATERIAL AND EVIDENCE DETECTED IN THE COURSE OF THE SEARCH ACTION. THE CIRCUMSTAN CES SURROUNDING THE CASE ARE NOT STRONG ENOUGH TO JUSTIFY THE ADDITION MADE BY THE DEPARTMENT. THE BURDEN OF PROVING THE ACTUAL CONSIDERATION IN THE PURCHASE OF PROPERTY IS ON THE REVENUE. CONSIDERING THE ENTIRE FACTS OF THE CASE, THE REVENUE HAS FAILED TO DISCHARGE ITS DUTY, INSTEAD MADE UP A CASE ON SURMISES AND CONJECTURES WHICH CANNOT BE ALLOWED. UNDER THESE 14 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA CIRCUMSTANCES, THERE IS NO REASON TO CONFIRM THE ADDITION OF RS. 100 LAKHS TOWARDS ON - MONEY PAYMENT. ACCORDINGLY, THE ADDITION OF RS. 100 LAKHS IS DELETED. CIT VS. P. V. KALYANASUNDARAM (2006) 203 CTR (MAD) 449: (2006) 282 ITR 259 (MAD) RELIED ON' 19. THE HON'BLE A.P. HIGH COURT IN THE CASE OF SMT. K.V. LAKSHMI SAVITRI DEVI VS. ACIT IN ITTA 563 OF 2011, UPHELD THE ORDER OF THE ITAT HYDERABAD BENCH. THE HON'BLE HIGH COURT WHILE, DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE HELD AS UNDER: 'WE ARE OF THE VIEW THAT THE TRIBUNAL HAS RIGHTLY HELD THAT THE REGISTE RED DOCUMENT DT. 21.8.2006 UNDE R WHICH THE RESPONDENT PURCHASED THE ABOVE PROPERTY SHOWED THAT ONLY RS. 65.00 LAKHS WAS PAID TO THE VENDOR BY THE RESPONDENT; THAT THERE WAS NO EVIDENCE TO SHOW THAT THE RESPONDENT HAD PAID RS. 1.00 CRORE IN CASH ALSO TO THE VENDOR; THAT NO PR ESUMPTION OF SUCH PAYMENT OF R. .1.00 CRORE IN CASH CAN BE DRAWN ON THE BASIS OF AN ENTRY FOUND IN A DIARY/LOOSE SHEET IN THE PREMISES OF C. RADHA KRISHNA KUMAR WHICH IS NOT IN THE RESPONDENT'S HANDWRITING AND WHICH DID NOT CONTAIN THE NAME OF THE RESPONDENT OR ANY DATE OF PAYMENT OR THE NAME OF THE PERSON WHO MADE THE PAYMENT. IT RIGHTLY HELD THAT THE REVENUE FAILED TO ESTABLISH THE NEXUS OF THE SEIZED MATERIAL TO THE RESPONDENT AND HAD DRAWN INFERENCES BASED ON SUSPICION, CONJECTURES AND SURMISES WHICH CANNOT TAKE THE PLACE OF PROOF WE ALSO AGREE WITH THE TRIBUNAL THAT THE ASSESSING OFFICER DID NOT CONDUCT ANY INDEPENDENT ENQUIRY RELATING TO THE VALUE OF THE PROPERTY PURCHASED AND THE BURDEN OF PROVING THE ACTUAL CONSIDERATION IN THE PURCHASE OF THE PROPERTY IS ON THE REVENUE AND IT HAD FAILED TO DISCHARGE THE SAID BURD EN.' 20. THE A.R. FURTHER RELIED UPON THE ITAT AHMEDABAD 'C' BENCH DECISION IN THE CASE OF JAWAHARBHAI ATMARAM HATHIWALA VS. ITO REPORTED IN (2010) 128 TI] 36, WHEREIN UNDER SIMILAR SET OF FACTS, THE HON'BLE ITAT DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AS UNDER: 'THE ASSESSEE HAS CLAIMED TO HAVE MADE PAYMEN T OF RS. 1,01,687/ - ONLY UPTO 31 ST MARCH, 1999 AND HAS CONSISTENTLY TAKEN THE STAND THAT IT HAS NOT PAID BALANCE AMOUNT OF RS.3,81,414/ - AS STATED IN THE SEIZED DOCUMENT. NO EVIDENCE COULD BE BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT IN FACT THE ASSESSEE HAD PAID THE AMOUNT OF RS. 3,81,414/ - TO OD. NO DOCUMENT CONTAINING SIGNATURE OF THE ASSESSEE OR HANDWRITING OF THE ASSESSEE TO CORROBORATE THE ABOVE MAKING OF PAYMENT BY THE ASSESSEE WAS FOUND DUR ING THE COURSE OF THE SEARCH. EVEN AT TIME OF CROSS EXAMINATION BY THE ASSESSEE THE PARTNER OF OD COULD NOT PRODUCE ANY EVIDENCE THAT THE AMOUNT 15 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA WRITTEN IN THE SEIZED DOCUMENT WAS IN FACT RECEIVED FROM THE ASSESSEE. AS THE ASSESSEE HAS CATEGORICALLY DENIED TO HAVE MADE ANY PAYMENT IN EXCESS OF RS. 1,01,687/ - UPTO 31 ST MARCH, 1999 IN RESPECT OF PURCHASE OF FLAT THE SAID DENIAL CANNOT BE BRUSHED ASIDE WITHOUT BRINGING ANY POSITIVE MATERIAL ON RECORD. MERELY RECORDING MADE BY A THIRD PARTY OR STATEMENT OF A TH IRD PARTY CANNOT BE TREATED AS SO SACROSANCT SO AS TO READ AS A POSITIVE MATERIAL AGAINST THE ASSESSEE. IN VIEW OF THE ABOVE THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING ADDITION TO THE EXTENT OF RS.3,81,414/ - IN THE HANDS OF THE ASSESSEE. THEREFORE THE ADDI TION OF R S .3,81,414 / - IS DELETED. ASST. CIT VS. PRABHAT OIL MILLS (1995) 52 TTJ (AHD) 533 RELIED ON; K.P. VARGHESE VS. ITO (1981) 24 CTR (SC) 358: (1981) 131 ITR 597 (SC) APPLIED' 21. IN YET ANOTHER CASE, THE ITAT HYDERABAD 'B' BENCH IN THE CASE OF DCIT ( CENTRAL CIRCLE) - 6 VS. B. VIJAY KUMAR IN ITA NO.930 & 931 OF 2009 HELD THE ISSUE IN FAVOUR OF THE ASSESSEE AS UNDER: 11. WE HAVE HEARD RIVAL SUBMISSIONS, PERUSED THE MATERIAL SUBMITTED BEFORE US AND ALSO PERUSED THE ORDERS OF THE REVENUE AUTHORITIES. ON A READING OF THE ASSESSMENT ORDER, IT IS ABSOLUTELY CLEAR THAT THE ADDITION HAS BEEN MADE ENTIRELY ON THE BASIS OF THE PHOTOCOPY OF THE SALE AGREEMENT SEIZED FROM THE RESIDENCE OF THE ASSESSEE IN COURSE OF SEARCH AND SEIZURE OPERATION. UNDISPUTEDLY, THE SALE AGREEMENT IS ONLY PHOTOCOPY AND HAS NOT BEEN SIGNED BY THE ASSESSEE. THE ASSESSEE HAS ALSO RAISED SERIOUS ALLEGATION REGARDING THE SEIZURE OF THE IMPUGNED DOCUMENT AND FILED AFFIDAVIT BEFORE DDIT (INV.) ASSERTING THAT THE SAID DOCUMENT WAS PLANTED BY AN O FFICER OF THE DEPARTMENT ALSO NAMED BY THE ASSESSEE IN THE AFFIDAVIT. HOWEVER, SUCH ALLEGATION OF THE ASSESSEE HAS NOT AT ALL BEEN ENQUIRED INTO AND HAS BEEN MET WITH COMPLETE SILENCE BY THE DEPARTMENT. FROM THE MATERIALS ON RECORD, IT IS VERY CLEAR THAT T HE AO HAS FAILED TO LAY HIS HANDS ON ANY CREDIBLE EVIDENCE TO ESTABLISH THE FACT THAT THE ASSESSEE HAS PURCHASED THE PROPERTY FOR A CONSIDERATION OF RS.1,68,00,000/ - AS MENTIONED IN THE PHOTO COPY OF SALE AGREEMENT SEIZED IN COURSE OF SEARCH AND SEIZURE OP ERATION. THE ASSESSEE HAS PRODUCED BEFORE THE AO REGISTERED SALE DEEDS IN SUPPORT OF ITS CLAIM THAT THEY HAD PURCHASED THE PROPERTY FOR A CONSIDERATION OF RS. 23.50 LAKHS. WHEN THE AO ALLEGES THAT THE ASSESSEE HAS PAID MORE THAN WHAT HAS BEEN DECLARED IN T HE REGISTERED SALE DEED BECAUSE THE FAIR MARKET VALUE OF THE ASSET AS ON THE DATE OF TRANSACTION EXCEEDS FULL VALUE OF CONSIDERATION DECLARED BY THE ASSESSEE THEN IT IS FOR THE AO TO PROVE THAT THE VALUE DECLARED BY THE ASSESSEE IS UNDERSTATED. IN THE APPE AL BEFORE US, EXCEPTING THE PHOTO COPY OF 16 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA SALE AGREEMENT, THERE IS NO OTHER EVIDENCE ON RECORD FOUND AS A RESULT OF SEARCH OR BROUGHT ON RECORD ON THE BASIS OF ENQUIRY CONDUCTED BY THE AO WHICH COULD ESTABLISH THE FACT THAT THE ACTUAL CONSIDERATION PASSED BETWEEN THE PARTIES IS NOT AS MENTIONED IN THE REGISTERED SALE DEED BUT AS PER THE SALE AGREEMENT FOUND DURING SEARCH OPERATION. IT IS ALSO AN INTERESTING FACT TO NOTE THAT IN THE STATEMENT RECORDED FROM THE ASSESSEE U/S 132(4) THE REVENUE AUTHORITIES HAVE NOT PUT ANY QUESTION WITH REGARD TO THE SALE AGREEMENT SEIZED AT THE TIME OF SEARCH AND SEIZURE OPERATIONS. SMT. P. NALINI DEVI ALSO IN HER STATEMENT FURTHER CLEARLY STATED THAT THE PROPERTY WAS SOLD AT RS.23.50 LAKHS AND NOT AT THE RATE OF RS.1.68 CRORES . THE HON 'BLE SUPREME COURT IN THE CASE OF K.P. VERGHESE REPORTED IN 131 ITR 597 HAS HELD THAT ONUS IS ON THE DEPARTMENT TO PROVE THAT THE ASSESSEE HAS UNDERSTATED THE VALUE OF THE PROPERTY AND HAS PAID MORE THAN WHAT IS MENTIONED IN THE REGISTERED SALE D EED. THE HON'BLE SUPREME COURT IN THE CASE OF MOOSA S. MADHA AND AZAM S. MADHA VS. CI T ( 89 ITR 65) HAS HELD THAT PHOTO COPIES HAVE LITTLE EVIDENTIARY VALUE. THEREFORE, PHOTOCOPIES OF ANY DOCUMENT CANNOT BY ITSELF BE CONSIDERED AS EVIDENCE FOR PURPOSE OF MAKING ADDITION IN ASSESSMENT PROCEEDINGS. THE AO IS REQUIRED TO BRING FURTHER EVIDENCE ON RECORD TO SHOW THAT THE SALE AGREEMENT WAS ACTUALLY ACTED UPON BY THE PARTIES. THIS IS BECAUSE OF THE FACT WHEN THE AO IS GOING TO MAKE AN ADDITION, THERE SHOULD BE SUFFICIENT EVIDENCE BROUGHT ON RECORD TO SUPPORT SUCH ADDITION. NO ADDITION CAN BE MADE ON CONJECTURES AND SURMISES. AS SEEN FROM THE ASSESSMENT ORDER, THE AO HAS ADOPTED VALUE OF THE PROPERTY AT THE RS.7000/ - PER SQ. YARD ON THE DATE OF TRANSACTION. FOR A DOPTING SUCH A VALUATION, THE AO HAS NOT CONDUCTED ANY ENQUIRY OR BROUGHT ANY MATERIALS ON RECORD TO SHOW THAT THE VALUE OF THE PROPERTY ON THE DATE OF TRANSACTION WAS ACTUALLY PS. 7000 PER SQ. YARD. ON THE OTHER HAND, THE ASSESSEE HAS DEMONSTRATED WITH SU PPORTING EVIDENCE THAT THE VALUE OF THE LAND ON THE DATE OF TRANSACTION WAS THE RATE MENTIONED IN THE REGISTERED SALE DEED AND FOR WHICH THE PROPERTY WAS SOLD. THE ASSESSEE HAS ALSO PRODUCED SUFFICIENT EVIDENCE TO SHOW THAT THE RE WAS DISPUTE GOING ON REGA RDING THE LEGAL RIGHT OVER THE PROPERTY WHICH ALSO HAD AN EFFECT ON THE FAIR MARKET VALUE OF THE PROPERTY. IT IS ALSO PERTINENT TO MENTION HERE THAT THE ASSESSEE HAD FILED HIS RETURN F INCOME FOR THE ASSESSMENT YEARS UNDER DISPUTE MUCH PRIOR TO THE DATE OF SEARCH DECLARING THE PURCHASE OF LAND IN QUESTION AT THE CONSIDERATION MENTIONED IN THE REGISTERED SALE DEEDS, SO FAR AS THE AO'S OBSERVATIONS ON THE LOOSE SHEETS RECOVERED FROM THE RESIDENCE OF SMT. NAILNI DEVI ARE CONCERNED, THE CIT (A) AFTER DULY EXAMI NING THEM HAS GIVE N A 17 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA CONCLUSIVE FINDING THAT THE ASSESSEE'S NAME HAS NO WHERE BEEN MENTIONED IN THOSE DOCUMENTS NOR THE AMOUNT OF RS.109.48 LAKHS REPRESENTS THE EXPENDITURE INCURRED BY SMT NALINI DEVI. HOWEVER, THE AMOUNT WAS FOUND TO BE THE SUMMARY OF TH E BALANCE OF VARIOUS ACCOUNTS OPERATED BY THE FAMILY MEMBERS OF SMT. NALINI DEVI. WE FIND THAT THE CIT (A) IN HIS ELABORATE AND WELL REASONED ORDER HAS DEALT WITH ALL THESE ASPECTS AND CAME TO A FINDING ON FACT THAT THE AO HAS MADE THE ADDITION PURELY ON C ONJECTURES AND SURMISES AND NOT ON THE BASIS OF ANY MATERIAL OR EVIDENCE BROUGHT ON RECORD. ON EXAMINING THE FACTS AND MATERIALS BEFORE US, WE ARE OF THE VIEW THAT THE FINDING ARRIVED BY THE CIT (A) IS JUST AND PROPER AND IN ACCORDANCE WITH THE PRINCIPLES OF LAW LAID DOWN BY THE HON'BLE SUPREME COURT AND HON'BLE HIGH COURTS WHICH ARE CITED BEFORE HIM. WE THEREFORE FIND NO NECESSITY TO INTERFERE WITH THE FINDING OF THE CIT (A) ON THIS ISSUE. HENCE THE GROUNDS RAISED BY THE REVENUE FOR THE YEARS UNDER CONSIDE RATION ARE DISMISSED.' 22. THE HON'BLE A.P. HIGH COURT IN ITA NO.232 OF 2013 IN THE CASE OF CIT VS. SMT. R. NALINI DE VI HAS UPHELD THE ORDER OF THE IT AT HYDERABAD BENCH. THE HON'BLE HIGH COURT WHILE, CONSIDERING THE ISSUE HELD AS UNDER: 'WE HAVE HEARD THE LEARNED COUNSEL FOR THE APPELLANT AND GONE THROUGH THE IMPUGNED JUDGEMENT AND ORDER OF THE LEARNED TRIBUNAL. IT APPEARS , THE ASSESSING OFFICER HAD RELI ED ON A PHOTOCOPY OF AN UNSIGNED SALE AGREEMENT IN ORDER TO FIND THAT CONSIDERATION AMOUNT HAS BEEN PAID AT RS. 1,68,00,000/ - . THEREFORE, THIS AMOUNT WAS NOT DISCLOSED. THE LEARNED TRIBUNAL HAS CORRECTLY CONCLUDED THAT UNSIGNED PHOTOCOPY OF THE AGREEMENT FOR PURCHASE OF THE PROPERTY CANNOT BE A MATERIAL TO RELY ON, WHEN THE REGISTERED SALE DEED HAS BEEN PROD UCED AND THE SAME SHOWS THAT THE PROPERTY WAS PURCHASED AT A PRICE OF RS.23,50,000/ - . THIS REGISTERED SALE DEED WAS DISCLOSED AT THE TIME OF ORIGINAL ASSESSMENT. ACCORDING TO US, THE AGREEMENT OF SALE LOSES ITS FORCE, THE MOMENT REGISTERED SALE DEED IS EXE CUTED. IF THE PROPERTY HAS BEEN PURCHASED AT A HIGHER PRICE THAN THAT OF MENTIONED IN THE PURCHASE DEED, THEN THE ONUS IS ON THE ASSESSING OFFICER TO ESTABLISH THAT AS HAS BEEN RIGHTLY CONCLUDED BY THE TRIBUNAL ON THIS ISSUE. MOREOVER, PHOTOCOPY OF THE UNS IGNED AGREEMENT HAS GOT NO EVIDENTIARY VALUE. THE ASSESSING OFFICER HAS DONE A GUESS WORK WHILE COMING TO THE CONCLUSION THAT THE PRICE OF THE PROPERTY IS MORE THAN MENTIONED IN THE SALE DEED. THERE MUST BE SOME MATERIAL AND BASIS TO CONCLUDE THAT THE PURC HASE HAS BEEN MADE AT AN UNDER VALUATION.' 23 . THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. P.V. KALYANA SUNDARAM (2007) 294 ITR 49, UNDER THE SIMILAR CIRCUMSTANCES HELD IN FAVOUR OF THE ASSESSEE. THE HON'BLE SUPREME COURT, WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE HELD 18 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA AS UNDER: 'WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES AND HAVE GONE THROUGH TH E RECORD. IT IS TRUE THAT THE DIVISION BENCH OF THE HIGH COURT HAS BORROWED EXTENSIVELY FROM THE ORDERS OF THE TRIBUNAL AND THE COMMISSIONER AND PASSED THEM OFF AS IF THEY WERE THEMSELVES THE AUTHOR(S). WE FEEL THAT QUOTING FROM AN ORDER OF SOME AUTHORITY PARTICULARLY A SPECIALIZED ONE CANNOT PER SE BE FAULTED AS THIS PROCEDURE CAN OFTEN HELP IN MAKING FOR BREVITY AND PRECI S ION, BUT WE AGREE WITH MR. VAHANVATI TO THE EXTENT THAT ANY 'BORROWED WORDS' USED IN A JUDGEMENT MUST BE ACKNOWLEDGED AS SUCH IN ANY AP PROPRIATE MANNER AS A COURTESY TO THE TRUE AUTHOR(S). BE THAT AS IT MAY, WE ARE OF THE OPINION THAT THE THREE QUESTIONS REPRODUCED ABOVE CAN, IN NO WAY, BE CALLED SUBSTANTIAL QUESTIONS OF LAW. THE FACT AS TO THE ACTUAL SALE PRICE OF THE PROPERTY, THE IMPLI CATION OF THE CONTRADICTORY STATEMENTS MADE BY RAJARATHINAM OR WHETHER RELIANCE COULD BE PLACED ON THE LOOSE SHEETS RECOVERED IN THE COURSE OF THE RAID ARE ALL QUESTION OF FACT. WE THEREFORE FIND NO INFIRMITY IN THE ORDER OF THE HIGH COURT. ACCORDINGLY, WE DISMISS THE APPEAL.' 24. CONSIDERING THE TOTAL FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO APPLYING THE RATIOS OF THE JUDGEMENTS CITED ABOVE, WE ARE OF THE OPINION THAT THE A.O. IS NOT CORRECT IN COMING TO THE CONCLUSION THAT THE ON MONEY IS EXCHANGED B ETWEEN THE PARTIES BASED ON A LOOSE SHEET FOUND IN THE PREMISES OF A THIRD PERSON AND ALSO ADMISSION BY A THIRD PERSON. TO SUSTAIN THE ADDITION, THE A.O. SHOULD HAVE CONDUCTED AN INDEPENDENT ENQUIRY ABOUT THE VALUE OF THE PROPERTY AND ASCERTAIN WHETHER ANY UNDER VALUATION IS DONE, IF SO WHAT IS THE CORRECT VALUE OF THE PROPERTY. FURTHER, THE A.O. DID NOT BROUGHT ON RECORD ANY EVIDENCE TO SUPPORT HIS CONTENTION TO SAY THAT THERE IS ON MONEY EXCHANGED BETWEEN THE PARTIES. IN THE ABSENCE OF PROPER ENQUIRY AND SUFFICIENT EVIDENCES, WE FIND NO REASON TO CONFIRM THE ADDITION MADE BY THE A.O. THEREFORE, WE REVERSE THE CIT(A) ORDER AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION. 6.6. THE HONBLE ITAT CONSIDERED THE LEGAL POSITION IN GREAT DETAIL AND HAS DRAWN SUPPORT FROM THE DECISIONS RENDERED BY THE JURISDICTIONAL HIGH COURT. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE JURISDICTIONAL TRIBUNAL, I HOLD THAT THE ASSESSING OFFICER I S NOT JUSTIFIED IN MAKING ADDITION OF RS.3,47,90,000/ - WHILE COMPUTING THE LONG TERM CAPITAL GAINS. THE ASSESSING OFFICER IS DIRECTED TO DELETE THIS ADDITION AND COMPUTE THE LONG TERM CAPITAL GAINS BY ADOPTING CONSIDERATION OF RS.24,85,000/ - AS PER REGIST ERED SALE DEED. THESE TWO GROUNDS OF THE APPELLANT ARE ALLOWED. 19 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA THE LOOSE SHEET SEIZED FROM THE PREMISES OF SID D HARTHA ACA D EMY IS UNDATED AND WITHOUT THE SIGNATURES OF THE ASSESSEE. THE SALE DEED WAS REGISTERED FOR A SUM OF RS.2 4,85,000/ - BY THE ASSESS EE AND THE CO - OWNER INDEPENDENTL Y . NO OTHER EVIDENCE WAS FOUND TO ESTABLISH THAT THE CONSIDERATION WAS PASSED ON OVER AND ABOVE THE REGISTERED SALE CONSIDERATION. THE LD.CIT(A) CONSIDERED THE ISSUE IN DETAIL AND ALLOWED THE APPEAL OF THE ASSESSEE PLACING RELIANCE ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF SHRI VENKATARAMA SAI DEVELOPERS CITED SUPRA. SINCE THE MATERIAL WAS FOUND IN THE PREMISES OF SIDDHARTHA ACADEMY, PRESUMPTION IS AVAILABLE TO THE DEPARTMENT IN THE CASE OF SIDDHARTHA ACADEMY, BUT NOT IN THE CASE OF THE ASSESSEE. THE LD.AR RELIED ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF SMT. MAGANTI ANNAPURNA OF THIS TRIBUNAL IN ITA NOS.440 & 477/VIZ/2017 DATED 26.09.2018, WHEREIN, THE COORDINATE BENCH OF ITAT HELD THAT UNLESS THERE IS A SPECIFI C EVIDENCE WITH REGARD TO THE RECEIPT OF CASH OVER AND ABOVE THE REGISTERED SALE DEED, IT CANNOT BE PRESUMED THAT THE ASSESSEE HAS MADE THE UNACCOUNTED PAYMENTS TOWARDS THE PURCHASE OF LAND. SIMILARLY, THE LD.AR RELIED ON THE DECISION OF SHRI P.KOTESWARA RAO IN I.T.A NOS. 251 & 252/VIZ/2012. ON SIMILAR FACTS, ITAT HELD THAT IT IS NOT CORRECT IN COMING TO CONCLUSION THAT ON - MONEY WAS EXCHANGED BETWEEN THE 20 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA PARTIES ON THE BASIS OF MATERIAL FOUND IN THE PREMISES OF THIRD PARTY AND O N THE STATEMENT GIVEN BY THIRD PARTIES. IN THE INSTANT CASE, BOTH THE PARTIES, SEARCHED PARTY AS WELL AS THE ASSESSEE HAVE DENIED HAVING EXCHANGED THE ON MONEY FOR SALE OF LAND. EVEN AFTER THE ASS E SSEES CASE IS COVERED UNDER SEARCH OPERATIONS U/S 132 , THE DEPARTMENT DID NOT UNEARTH ANY EVIDENCE REGARDING EXCHANGE OF CASH IN SALE TRANSACTION. THEREFORE, SINCE THE FACTS ARE IDENTICAL AND DEPARTMENT COULD NOT PLACE ANY OTHER MATERIAL TO CONTROVERT THE FINDING GIVEN BY THE LD.CIT(A) AND NO OTHER DECISION OF AN Y HIGH COURT OR APEX COURT WAS BROUGHT ON RECORD CONTROVERT THE DECISIONS RELIED UP ON BY THE ASSESSEE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) AND THE SAME IS UPHELD. 6. THE ASSESSEES FILED CROSS OBJECTIONS IN SUPPORT OF THE ORDER OF THE LD.CIT(A). SINCE THE APPEALS OF THE REVENUE ARE DISMISSED, THE CROSS OBJECTIONS FILED BY THE ASSESSEE HAVE BECOME INFRUCTUOUS AND ACCORDINGLY DISMISSED. I.T.(SS)A.06/VIZ/2018 & CO N O.6 5 /VIZ/2018, A.Y.2010 - 11 7. WHEN TH IS APPEAL IS TAKEN UP FOR HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE TAX EFFECT INVOLVED IN TH IS APPEAL IS BELOW RS. 2 0 LAKHS. AS PER CIRCULAR NO.03/2018, DATED 11 . 07 . 2018 OF CBDT , THE 21 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA APPEAL IS NOT MAINTAINABLE IF THE TAX EFFECT IS LESS THAN RS. 20 LAKHS. IN THE INSTANT CASE TAX EFFECT IS LESS THAN RS.20 LAKHS AND THE DEPARTMENT DID NOT MAKE OUT CASE OF EXCEPTION AS PROVIDED IN THE CIRCULAR . IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE. HENCE, THE SAME IS DISMISSED. 8 . THE ASSESSEE FILED CROSS OBJECTIONS IN SUPPORT OF THE ORDER OF THE LD.CIT(A). SINCE THE APPEAL OF THE REVENUE IS DISMISSED, THE CROSS OBJECTIONS FILED BY THE ASSESSEE HAVE BECOME INFRUCTUOUS AND ACCORDINGLY DISMISSED. 9 . IN THE RESULT, APPEALS FILED BY THE REVENUE AS WELL AS THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH APRIL, 2019. S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 10 .04.2019 L.RAMA, SPS 22 I.T. ( SS ) A. NO .05 - 07/VIZ/2018 AND CO NO.64 - 66/VIZ/2018 SMT.BHUMALA UMA RANI & SRI BHUMALA VENKATA NARASIMHA REDDY, VIJAYAWADA / COPY OF THE ORDER FORWARDED TO: - 1. / THE ASSESSEE - (I) SMT. BHUMALA UMA RANI , PROPX : SRI SAI HARSHA AGENCIES , D.NO.74 - 1 - 22/1 , PATAMATA, MG ROAD , VIJAYAWADA, KRISHNA DISTRICT (II) SHRI BHUMALA VENKATA NARASIMHA REDDY, D.NO.70 - 2 - 23/3, PLOT NO.20, SHIVASANKAR NAGAR, PATAMATA, VIJAYAWADA 2. / THE REVENUE - THE DY. COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE , VIJAYAWADA 3. THE PR.COMMISSIONER OF INCOME - TAX (CENTRAL), VISAKHAPATNAM 4. THE COMMISSIONER OF INCOME - TAX (APPEALS) - 3 , VISAKHAPATNAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM