Asst.CIT.,Circle-2(2), Hyderabad V. M/s Hyderasbad Media House Limited, Hyderabad

ITA 107/HYD/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6433 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 31-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ADAGIRI
• Assessee Lawyers: S RAMA RAO
• Keywords: Salary income; Additional evidence; Wrong claim
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 107/HYD/2013 ASSESSMENT YEAR: 2008-09 ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 2(2), HYDERABAD. VS. M/S HYDERABAD MEDIA HOUSE LTD., HYDERABAD. PAN AABCH 7588J APPELLANT RESPONDENT REVENUE BY: SRI B. YADAGIRI ASSESSEE BY: SRI S. RAMA RAO DATE OF HEARING: 26/02/2014 DATE OF PRONOUNCEMENT: 23/04/2014 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF CIT(A)-III, HYDERABAD, DATED 12 TH NOVEMBER, 2012 FOR THE ASSESSMENT YEAR 2008-09 WHEREIN THE REVENUE HAS RAI SED THE FOLLOWING SUBSTANTIAL GROUNDS: 2. CIT(A) ERRED ON FACTS AND IN LAW IN DELETING THE DISALLOWANCE OF SHARE CAPITAL OF RS. 3,16,69,201/- THOUGH THE SH AREHOLDERS DO NOT HAVE CREDITWORTHINESS 3. THE CIT(A) ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS. 2,14,78,000/- ON ACCOUNT OF UNEXPLAINED UNSE CURED LOANS FROM ABOUT 256 PERSONS WHO HAVE SUBSCRIBED TO FULLY CONVERTIBLE DEBENTURES OF THE COMPANY. FOR RANDOM V ERIFICATION OUT OF THE 25 PERSONS, ASSESSEE COULD PRODUCE 6 PER SONS AND WHOSE CREDITWORTHINESS WAS NOT ESTABLISHED. 4. THE CIT(A) ERRED ON FACTS AND IN LAW IN DELETING THE ASSESSEES WRONG CLAIM OF DEBENTURE HOLDER I.E., M/ S KAPIL HEALTH CLUB PVT. LTD. AMOUNTING TO RS. 51,91,000/-. THOUGH THE AMOUNTS WERE SHOW UNDER THE HEAD CURRENT LIABILITI ES IN THE BOOKS OF M/S KAPIL HEALTH CLUB PVT. LTD. 2 ITA NO. 107/H/2013 M/S HYDERABAD MEDIA HOUSE LTD. 2. AS REGARDS 2 ND GROUND OF APPEAL PERTAINING TO DISALLOWANCE OF SHARE CAPITAL OF RS. 3,16,69,201/-, THE ASSESSING O FFICER NOTED THAT THE ASSESSEE HAD INTRODUCED SHARE CAPITAL OF RS. 3, 16,69,201/- DURING THE YEAR UNDER CONSIDERATION. WHEN ASKED TO PRODUCE CONFIRMATION LETTERS ALONG WITH INCOME TAX ASSESSMENT PARTICULAR S/PAN ETC., OF THE INVESTORS, THE ASSESSEE VIDE LETTER DATED 26/11/201 0 ONLY FILED COPIES OF APPLICATION FOR ALLOTMENT OF SHARES IN RESPECT O F A FEW AMOUNTS AND THEREAFTER FILED CONFIRMATION FROM THE FOLLOWING 12 SHAREHOLDERS: S.NO. NAME OF THE INVESTOR AMOUNT IN RS. 1. DUGYALA RAVINDER RAO 15,00,000 2. HANMANDLA RAJI REDDY 15,00,000 3. HARITHA RAO 30,00,000 4. KOPPURAPU RAMA CHANDRA REDDY 15,00,000 5. KASUGANTI SUBHASHINI 30,00,000 6. KASUGANTI VAMANA RAO 38,23,627 7. KASUGANTI VAMANA RAO HUF 30,00,000 8. KASUGANTI VENKATA RAMANA RAO 30,00,000 9. PULLELA RAVI KUMAR 15,00,000 10. PINNINTI SRINIVASA RAO 15,00,000 11. MENNENI SINDHU 30,00,000 12. K. RAMACHANDRA MURTHY 3,93,594 TOTAL 2,67,17,221 2.1 NO CONFIRMATION LETTERS HAVE BEEN FILED IN RESP ECT OF THE FOLLOWING THREE PERSONS: S.NO. NAME OF THE ASSESSEE AMOUNT IN RS. AS PER COPY OF THE SHARE APPLICATION 1. PERALA SRINIVASA RAO 15,00,000 2. RAGIDI THIRUPATHAIAH 15,00,000 3. UDUTHULA KRISHNA MOHAN 15,00,000 TOTAL 45,00,000 2.2 THE ASSESSING OFFICER NOTED THAT IN RESPECT OF THE BALANCE AMOUNT OF RS. 4,51,980/- (RS. 3,16,69,201 2,67,17 ,221 45,00,000) THE ASSESSEE COMPANY DID NOT PRODUCE EVEN SHARE APP LICATION. SINCE NO REPLIED HAVE BEEN RECEIVED FROM THE ABOVE 15 INV ESTORS, THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAS NOT DI SCHARGED THE ONUS THAT LAY ON IT OF ESTABLISHING THE GENUINENESS, IDE NTITY AND CREDITWORTHINESS OF THE ABOVE MENTIONED PERSONS/TRA NSACTIONS AS REQUIRED UNDER LAW, BY NOT PROVIDING CORRECT PARTIC ULARS AND EVEN AFTER 3 ITA NO. 107/H/2013 M/S HYDERABAD MEDIA HOUSE LTD. THE INDEPENDENT ENQUIRIES CONDUCTED, DID NOT YIELD ANY RESULT SINCE THE LETTERS SENT HAVE BEEN RETURNED BACK. HENCE, T HE ENTIRE AMOUNT OF SHARE CAPITAL AMOUNTING TO RS. 3,16,69,201/- INT RODUCED BY THE ASSESSEE COMPANY IN THE NAMES OF 16 PERSONS IS HELD BY THE ASSESSING OFFICER AS NOT PROPERLY SUBSTANTIATED AS UNDER: 1. WHERE NO REPLIES ARE RECEIVED IN RESPONSE TO LETTER/SUMMON ISSUE 2,37,17,221 2. WHERE THE LETTER SENT HAVE BEEN RETURNED UNSERVED 45,00,000 3. IN RESPECT OF SRI P. RAVI KUMAR AS DISCUSSED 15, 00,000 4. IN RESPECT OF SRI J. RAJI REDDY AS DISCUSSED 15, 00,000 5. AMOUNT IN RESPECT OF WHICH NO DETAILS ARE FURNISHED 4,51,980 TOTAL 3,16,69,201 2.3 THE ASSESSING OFFICER, THEREFORE, TREATED THE S AID AMOUNT OF RS. 3,16,69,201/- AS UNEXPLAINED INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AND ACCORDINGLY BROUGHT THE SAM E TO TAX. 3. ON APPEAL, BEFORE THE CIT(A) THE ASSESSEE CONTEN DED THAT THE ENTIRE ASSESSMENT PROCEEDINGS WERE COMPLETED IN LES S THAN ONE MONTH. IT WAS STATED THAT THERE WERE A LARGE NUMBER OF INVESTORS AND NEW SHAREHOLDERS WHOSE CONFIRMATIONS WERE REQUIRED BY THE ASSESSING OFFICER AND, SPECIFICALLY, THERE WERE 256 DEBENTURE HOLDERS AND FIVE SHAREHOLDERS WHOSE CONFIRMATIONS WERE NEED ED. BEFORE THE CIT(A), THE ASSESSEE PRODUCED ALL THESE CONFIRMATIO NS AND OTHER RELEVANT DETAILS AS ADDITIONAL EVIDENCE UNDER RULE 46A. THE CIT(A) REMANDED THE WRITTEN SUBMISSIONS AND EVIDENCES FILE D BY THE ASSESSEE TO THE ASSESSING OFFICER. THE ASSESSING OF FICER FILED THE REMAND REPORT, WHICH WAS EXTRACTED BY THE CIT(A) AT PAGES 10 TO 15. 4. THE CIT(A) AFTER DISCUSSING AND EXAMINING THE IS SUE ELABORATELY WITH VARIOUS CASE LAWS AT PAGES 15 TO 2 7 OF HIS ORDER, HELD THAT THERE IS NO EVIDENCE TO ESTABLISH THE IN-GENUI NENESS OF THE AFOREMENTIONED TRANSACTIONS. HE FURTHER HELD THAT S INCE ALL THREE ELEMENTS OF SECTION 68 ARE NOT IN DOUBT, ADDITION C ANNOT BE MADE 4 ITA NO. 107/H/2013 M/S HYDERABAD MEDIA HOUSE LTD. UNDER THIS SECTION AND MOREOVER, THE ASSESSEE IS A RUNNING COMPANY AND THE DECISION OF THE HONBLE SUPREME COURT IN T HE CASE OF STELLAR INVESTMENTS LTD., 251 ITR 263(SC), ON WHICH RELIANC E PLACED BY THE ASSESSEE, IS FULLY APPLICABLE IN THIS CASE. ACCORDI NGLY, HE DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION MADE ON TH IS COUNT BY OBSERVING AS FOLLOWS: 7...................IT IS CLEAR THAT AS FAR AS THE IDENTITY OF THE SHAREHOLDERS IS CONCERNED, THE APPELLANT HAS PASSED THE TEST. REGARDING THE CREDITWORTHINESS, WITH RESPECT TO SRI K. RAMACHANDRA MURTHY AND PARTIALLY WITH RESPECT TO SR I K. VAMAN RAO, THE SOURCES HAVE BEEN VERIFIED BY THE ASSESSI NG OFFICER AND HAVE BEEN FOUND TO BE EXPLAINED. 7.1 REGARDING THE BALANCE SHARE CAPITAL INTRODUCED, THERE IS ONE COMMON MODUS I.E. ALL THE SHAREHOLDERS ARE SUBS CRIBERS TO CHIT FUNDS FROM M/S KAPIL CHIT FUNDS PVT. LTD. ALL OF THEM RECEIVED ADVANCES FROM THE CHIT FUND COMPANY, WHICH WERE USED TO SUBSCRIBE TO SHARES OF THE APPELLANT COMPAN Y. SINCE, NONE OF THESE PERSONS PAID THE INSTALMENTS OF CHITS , THE CHIT FUND COMPANY ARRIVED AT AN AGREEMENT WITH THESE PER SONS AND FORTIFIED THE SHARES IN QUESTION. 7.2 FROM THE FACTS, IT IS SEEN THAT AS FAR AS THE S OURCE OF THE FUNDS IS CONCERNED, THERE IS NO DOUBT ABOUT IT. ALL THE TRANSACTIONS HAVE BEEN ROUTED THROUGH THE BANKS AND IT IS CLEAR THAT THE AMOUNTS CAME FROM M/S KAPIL CHIT FUND PVT. LTD TO THE SHAREHOLDERS WHO SUBSCRIBED FOR THE SHARES IN QUEST ION. AS FAR AS THE LIMITED PURVIEW OF SECTION 68 IS CONCERNED, THE CREDITWORTHINESS OF THE SHAREHOLDERS IS NOT IN DOUB T. 7.3 REGARDING THE GENUINENESS OF THE TRANSACTIONS, DOUBTS HAVE BEEN EXPRESSED BY THE ASSESSING OFFICER THAT T HE CHIT FUND COMPANY IS ASSOCIATED WITH THE APPELLANT COMPANY AN D THEREFORE THE TRANSACTIONS ARE NOT GENUINE. I FIND THAT THIS REASON ALONE IS NOT SUFFICIENT TO ESTABLISH THAT TH E TRANSACTIONS ARE NOT GENUINE. FIRSTLY, THE ASSESSING OFFICER HAD AGREED IN HIS REPORT THAT THE SHAREHOLDERS WERE SUBSCRIBERS TO TH E CHIT FUND OF THE COMPANY IN QUESTION. SECONDLY, HE HAD EXAMINED THE BANK ACCOUNTS OF THE APPELLANT AS WELL AS OF THE CHIT FU ND COMPANY AND HAS NOT FOUND THAT THE FUNDS HAVE BEEN ROUTED F ROM THE APPELLANT COMPANY TO THE CHIT FUND COMPANY AND BACK TO THE APPELLANT. THIS CYCLE HAS NOT BEEN SEEN. THERE IS N O OTHER EVIDENCE TO INDICATE ANY FRAUD IN THE TRANSACTIONS. 5. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 5 ITA NO. 107/H/2013 M/S HYDERABAD MEDIA HOUSE LTD. 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES, PERUSED THE RECORD AND HAVE GONE THROUGH THE ORDERS OF THE REVE NUE AUTHORITIES. ON THIS ISSUE WITH REFERENCE TO RECEIPT OF SHARE CA PITAL MONEY FROM SHRI K. RAMACHANDRA MURTHY OF RS. 3,93,594/- AND FR OM K. VAMAN RAO OF RS. 42,75,607/-, THE CIT(A) GAVE A FINDING T HAT THE ASSESSING OFFICER HAS VERIFIED SOURCE OF THE INVESTMENT AND F OUND TO BE CORRECT AND DELETED THE ADDITION IN RESPECT OF THE SAID TWO PERSONS. IN THE CASE OF SHRI K. RAMACHANDRA MURTHY AN AMOUNT OF RS. 3,93,594/- IS OUT OF FROM HIS SALARY INCOME AND THE ASSESSEE FILE D A COPY OF HIS IT RETURN OF INCOME AS PROOF. THEREFORE, THE DELETION OF ADDITION IN RESPECT OF SHRI K. RAMACHANDRA MURTHY IS JUSTIFIED. 6.1 COMING TO SHRI K. VAMAN RAO, IT WAS STATED BEF ORE THE CIT(A) THAT AN AMOUNT OF RS. 30,00,000/- WAS RECEIVED FROM M/S KAPIL CHIT FUND PVT. LTD. BY SHRI K. VAMAN RAO AND BALANCE AMO UNT OF RS. 12,75,607/- FROM HIS PAST SAVINGS. WE ARE OF THE VI EW THAT THE AMOUNT OF RS. 30,00,000/- RECEIVED BY SHRI K. VAMAN RAO FR OM KAPIL CHIT FUND PVT. LTD. AS LOAN IS TO BE VERIFIED BY THE ASS ESSING OFFICER AND SIMILARLY THE ACCUMULATED SAVINGS OF RS. 12,75,607/ - IS ALSO REQUIRED TO BE VERIFIED WHETHER HE HAS SAVINGS IN HIS HAND T O MAKE INVESTMENT IN ASSESSEE COMPANY. THEREFORE, THIS ISSUE IS REMIT TED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION. 6.2 REGARDING OTHER SHAREHOLDERS, IT WAS STATED THA T THEY ARE SUBSCRIBING THE CHIT FROM M/S KAPIL CHIT FUND PVT. LTD. AND THEREAFTER THEY INVESTED THE FUND IN THE SHARES OF THE ASSESSE E COMPANY AND SINCE NONE OF THESE SHAREHOLDERS PAID INSTALMENT OF CHITS, THE CHIT FUND COMPANY ARRIVED AT AN AGREEMENT WITH THESE SHA REHOLDERS AND FORFEITED THE SHARES IN QUESTION. ACCORDING TO THE CIT(A), THESE TRANSACTIONS ARE GENUINE TRANSACTIONS AND SECTION 6 8 CANNOT BE APPLIED. IN OUR OPINION, THESE TRANSACTIONS ARE REQ UIRED TO BE ENQUIRED IN DETAIL SO AS TO REACH A CONCLUSION THAT THESE AR E NOT MAKE BELIEF 6 ITA NO. 107/H/2013 M/S HYDERABAD MEDIA HOUSE LTD. STORY AND THERE IS ACTUAL FLOWING OF FUNDS FROM M/S KAPIL CHIT FUND CO. PVT. LTD. TO SHAREHOLDERS AND THEREAFTER INVESTED I N THE SHARES OF THE ASSESSEE COMPANY. THE CIT(A) PLACED RELIANCE ON VAR IOUS CASE LAWS RATHER THAN PLACING RELIANCE ON THE FACTS OF THE CA SE OF THE ASSESSEE. ACCORDINGLY, THE FINDINGS OF THE CIT(A) ARE VACATED AND REMITTED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRES H CONSIDERATION AFTER EXAMINING ALL THE DETAILS WHILE ADJUDICATING THE IS SUE. 7. AS REGARDS GROUND NO. 3 AGAINST THE DELETION OF THE ADDITION OF RS. 2,14,78,000/- BY THE CIT(A), THE ASSESSING OFFI CER NOTED THAT THE ASSESSEE COMPANY DURING THE YEAR INTRODUCED UNSECUR ED LOANS WORTH RS. 2,67,16,000/-. WHEN ASKED TO FILE CONFIRMATION LETTERS FROM THE ALLEGED CREDITORS OF THE ASSESSEE COMPANY, THE ASSE SSEE FILED THE COPIES OF APPLICATIONS FOR FULLY CONVERTIBLE DEBENT URES WHICH ARE PURPORTEDLY SIGNED BY THE ALLEGED CREDITORS IN RESP ECT OF INVESTMENT OF RUPEES MORE THAN ONE LAKH FROM ABOUT 82 PERSONS ( O F THESE ABOUT 28 ARE FROM HYDERABAD AND THE BALANCE ARE FROM OUTSIDE HYDERABAD). MOST OF THE SAID APPLICATIONS CONTAIN THE ADDRESSES OF THE ALLEGED CREDITORS. SINCE THESE ARE NOT IN THE NATURE OF CON FIRMATION LETTERS ADDRESSED TO THE IT AUTHORITIES BUT MERE PHOTO COPI ES OF THE APPLICATIONS MADE TO THE COMPANY FOR ALLOTMENT OF D EBENTURES, THE ASSESSEE COMPANY WAS ONCE AGAIN ASKED TO FURNISH TH E LETTERS OF THE CONFIRMATION. THE ASSESSING OFFICER NOTED THAT THE AR OF THE ASSESSEE DURING THE COURSE OF HEARING STATED THAT I T IS NOT POSSIBLE TO FILE THE LETTERS OF CONFIRMATION IN RESPECT OF THE UNSECURED LOAN CREDITORS. THE ASSESSING OFFICER OBSERVED THAT IN RESPONSE TO THE SUMMONS/LETTERS ISSUED, CERTAIN REPLIES ARE RECEIVE D. SWORN STATEMENTS HAVE ALSO BEEN RECORDED FROM THE PERSONS WHO HAVE APPEARED PERSONALLY IN RESPONSE TO THE SUMMONS. AFT ER RECEIVING THE REPLIES/STATEMENTS, THE ASSESSING OFFICER ANALYSED THE ISSUE AND THE RESULT OF THE SAME AND INFERENCES THEREFROM DRAWN A S FOLLOWS: 7 ITA NO. 107/H/2013 M/S HYDERABAD MEDIA HOUSE LTD. 1. SWORN STATEMENTS FROM 13 PERSONS, THE TOTAL OF W HICH COMES TO RS. 24,89,000/-, HENCE, NO ADVERSE INFERENCE IS DRAWN IN RESPECT OF THESE CREDITS. 2. REPLIES RECEIVED BY POST FROM SEVEN CREDITORS, TOTALLING TO RS. 16,15,000/-, THEREFORE, NO ADVERSE INFERENCE IS DRAWN IN RESPECT OF THESE CREDITS. 3. AFTER ANALYSING IN RESPECT OF OTHER CASED, THE A SSESSING OFFICER OBSERVED THAT CONFIRMATION/APPLICATION FOR ALLOTMENT OF DEBENTURES FILED BY THE ASSESSEE COMPANY ARE ALSO S UFFERING FROM CERTAIN INFIRMITIES AND THEREFORE, IT IS DIFFI CULT TO ENTERTAIN THE SAME AS GENUINE. 7.1 IN VIEW OF THE ABOVE, OUT OF THE TOTAL UNSECUR ED LOANS OF RS. 2,67,16,000/- INTRODUCED BY THE ASSESSEE, THE ASSES SING OFFICER HELD THAT AN AMOUNT OF RS. 2,14,78,000 COULD NOT BE PROP ERLY SUBSTANTIATED BY THE ASSESSEE COMPANY AS UNDER: 1. IN RESPECT OF SMT. P. RAJANI, K. GAUTHAMI RAO AND M/S KAPIL HEALTH CLUB P LTD. 56,84,000 2. IN RESPECT OF THE AMOUNT WHERE NO CONFIRMATIONS ARE FILED/NO RESPONSE TO LETTERS/SUMMONS/RETURNED BY POSTAL AUTHORITIES (RS. 1,69,28,000- RS. 11,34,000 6,32,000) 1,51,62,000 3. IN RESPECT OF SRI J. RAJESHWARA RAO, SMT. B. RAJESHWARI, SRI H. RAJI REDDY, SMT. H. MANULA LATHA AND SMT. V. SRILATHA 6,32,000 TOTAL 2,14,78,000 7.2 THE ASSESSING OFFICER, THEREFORE, BROUGHT THE S AID AMOUNT OF RS. 2,14,78,000/- AS UNEXPLAINED INCOME OF THE ASSE SSEE AND BROUGHT THE SAME TO TAX. 8. ON APPEAL, BEFORE THE CIT(A), IT WAS CONTENDED T HAT ADEQUATE OPPORTUNITY HAD NOT BEEN PROVIDED TO THE ASSESSEE D URING THE ASSESSMENT PROCEEDINGS. THE CIT(A) AFTER CONSIDERIN G THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPORT O BTAINED FROM THE 8 ITA NO. 107/H/2013 M/S HYDERABAD MEDIA HOUSE LTD. ASSESSING OFFICER, DIRECTED THE ASSESSING OFFICER T O DELETE THE ADDITION MADE BY HOLDING AS UNDER: 11. I HAVE SEEN CAREFULLY THE FACTS AND EVIDENCE AN D I FIND THAT THE ONLY REASON WHY THE ASSESSING OFFICER IS A SKING FOR A PARTIAL ADD BACK OF THE DEBENTURE INVESTMENTS IS TH AT THE SIX PERSONS DID NOT APPEAR. REGARDING THE OTHER PERSONS IN HIS OWN SAMPLE THE ASSESSING OFFICER IS FULLY SATISFIED ABO UT THE TRANSACTIONS AND THOSE SOURCES THEREOF. THE ASSESSI NG OFFICER HAS NOT CONCLUDED THAT THE SIX PERSONS WHO DID NOT APPEAR EITHER DID NOT EXIST OR THE TRANSACTIONS PERTAINING TO THEM WERE INCORRECT. IN FACT, HE ACCEPTED THE TRANSACTION WIT H RESPECT TO THE DEAD PERSON EVEN THOUGH NO FURTHER DETAILS WERE PROVIDED BY THE FAMILY OF THAT PERSON. I FIND THAT A SIMPLE NON-APPEARANCE IS NOT A SUFFICIENT GROUND TO HOLD THAT SECTION 68 DOES NOT COME INTO PLAY. FROM THE FACTS AND EVIDENCE I FIND THAT ALL THE TREE ELEMENTS OF SECTION 68 HAVE BEEN EXPLAINED BY THE A PPELLANT. THEREFORE, WITH RESPECT TO THIS SECTION, NO ADDITIO N IS CALLED FOR. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 9. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 10. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES , PERUSED THE RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTH ORITIES BELOW. IN THIS CASE, THE CIT(A) ASKED FOR THE REMAND REPORT F ROM THE ASSESSING OFFICER. DURING THE REMAND PROCEEDINGS, THE ASSESSI NG OFFICER ASKED THE ASSESSEE TO PRODUCE 25 OF THE DEBENTURE HOLDERS AT RANDOM. OUT OF 25 PERSONS, 18 PERSONS APPEARED PERSONALLY AND W ITH REGARD TO ONE PERSON DEATH CERTIFICATE WAS FILED WHILE THE AS SESSEE WAS NOT ABLE TO PRODUCE OTHER 6 PERSONS. ACCORDING TO THE A SSESSEE THEY HAVE NOT RECEIVED SUMMONS OR THEY MIGHT HAVE LEFT THE ST ATION OR COULD NOT BE PRESENT ON HEALTH GROUNDS. HOWEVER, THE ASSESSEE HAS FILED CONFIRMATION LETTERS AND THEIR INCOME TAX DETAILS. THE ASSESSING OFFICER VERIFIED AND INVESTIGATED THE DETAILS AND F OUND THAT RIGORS OF SECTION 68 WAS SATISFIED BASED ON THE EVIDENCE ON R ECORD IN RESPECT OF 19 PERSONS. HOWEVER, HE SUBMITTED THAT SINCE 6 P ERSONS ARE NOT APPEARED, IT WAS SUGGESTED THAT 76% OF THE DEBENTUR ES SHOULD BE ACCEPTED AS GENUINE AND 24% TO BE ADDED BACK. WHERE AS THE CIT(A) WAS OF THE OPINION THAT THIS FORMULAE CANNOT BE WOR KED OUT ON THIS 9 ITA NO. 107/H/2013 M/S HYDERABAD MEDIA HOUSE LTD. SIMPLE BASIS. ACCORDING TO HIM, THERE IS NO FINDING GIVEN BY THE ASSESSING OFFICER FOR 6 PERSONS OUT OF 25 PERSONS T HAT THEY ARE NOT EXISTING ARE NOT PROPER AND BEING SO, IT IS TO BE P RESUMED THAT ALL ARE EXISTING DEBENTURE HOLDERS. IN OUR OPINION, THE MET HOD FOLLOWED BY THE CIT(A) TO DELETE THE ADDITION IS NOT PROPER AS THER E ARE 256 DEBENTURE HOLDERS AND IT IS APPROPRIATE TO EXAMINE ALL THE PE RSONS EXCLUDING THE PERSONS WHO APPEARED ON EARLIER OCCASION AND ONE PE RSON WHO WAS EXPIRED. ACCORDINGLY, THIS ISSUE RELATING TO DEBENT URE HOLDERS/ UNSECURED LOANS IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO MAKE NECESSARY ENQUIRIES AND DE CIDE THE ISSUE IN ACCORDANCE WITH LAW. THUS, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 11. GROUND NO. 3 READS AS FOLLOWS: THE CIT(A) ERRED ON FACTS AND IN LAW IN DELETING TH E ASSESSEES WRONG CLAIM OF DEBENTURE HOLDER I.E. M/S KAPIL HEAL TH CLUB PVT. LTD. AMOUNTING TO RS. 51,91,000/-. THOUGH THE AMOUN TS WERE SHOWN UNDER THE HEAD CURRENT LIABILITIES IN THE B OOKS OF M/S KAPIL HEALTH CLUB PVT. LTD. 12. THE ASSESSING OFFICER NOTED THAT THE SAID COMPA NY SIMPLY FILED TWO LINE CONFIRMATION QUOTING PAN. HOWEVER, NO STAT EMENT OF BANK ACCOUNT HAS BEEN FILED TO VERIFY THE GENUINENESS AN D CREDITWORTHINESS OF THE TRANSACTION. MOREOVER THE APPLICATIONS FOR D EBENTURES ARE LEFT BLANK WITHOUT MENTIONING ANY ADDRESS, TELEPHONE NO. AND OTHER PARTICULARS. FURTHER, THE SIGNATURE ON THE DEBENTUR E APPLICATIONS AND ON THE LETTER OF CONFIRMATION FILED ARE NOT TALLYIN G WITH EACH OTHER. 13. ON APPEAL, THE CIT(A) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 14. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS. 51,91,000/- FROM M/S KAPIL HEALTH CLUB PVT. LTD., BUT, THE SAID COMPANY SIMPLY FILED A TWO LINE CONFIRMATION LETTER QUOTING PAN. HOWEVER, NO STATEM ENT OF BANK 10 ITA NO. 107/H/2013 M/S HYDERABAD MEDIA HOUSE LTD. ACCOUNT HAS BEEN FILED TO VERIFY THE GENUINENESS AN D CREDITWORTHINESS OF THE TRANSACTION. MOREOVER, THE APPLICATIONS FOR DEBENTURES WERE LEFT BLANK WITH OUT MENTIONING ANY ADDRESS, TELEPHONE NO . AND OTHER PARTICULARS. FURTHER, THE SIGNATURE ON THE DEBENTUR E APPLICATIONS AND ON THE LETTER OF CONFIRMATION FILED ARE NOT TALLYIN G WITH EACH OTHER. IN OUR OPINION, NEITHER THE CIT(A) NOR THE ASSESSING O FFICER ADJUDICATED THE ISSUE PROPERLY. THEREFORE, WE REMIT THIS ISSUE IS ALSO TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE ISSUE BY PROPER ENQUIRIES AND DECIDE THE SAME IN ACCORDANCE WITH LA W. THUS, THIS ISSUE IS ALSO ALLOWED FOR STATISTICAL PURPOSES. 15. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 23.04.2014. SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 23/04/2014 KV COPY FORWARDED TO: 1. ACIT, CIRCLE 2(2), 8 TH FLOOR, B-BLOCK, ROOM NO. 826M IT TOWERS, AC GUARDS, HYDERABAD 500 004. 2. M/S HYDERABAD MEDIA HOUSE LTD., PLOT NO. 6, ANUPURAM COLONY, AS RAO NAGAR, ECIL, HYD.-62 3. CIT(A)-III, HYDERABAD 4. CIT-II, HYDERABAD. 5. THE DR, ITAT, HYDERABAD