K Krupakar Reddy , Hyderabad V. Income Tax Officer, Ward-13(2), Hyderabad

ITA 11/Hyd/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8256 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2021
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB-A
• Assessment Year: 2008-2009
• Appeal Filed On: 02-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KOMALI KRISHNA
• Keywords: Unexplained investment
• Section: 69; 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “A” : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER I.T.A. No.11/HYD/2018 Assessment Year: 2008-09 K.Krupakar Reddy, HYDERABAD [PAN: ADOPK9374Q] Vs Income Tax Officer, Ward-13(2), HYDERABAD (Appellant) (Respondent) For Assessee : Shri T.Chaitanya Kumar, AR For Revenue : Smt.Komali Krishna, DR Date of Hearing : 27-10-2021 Date of Pronouncement : 17-11-2021 O R D E R PER S.S.GODARA, J.M. : This assessee’s appeal for AY.2008-09 arises from the CIT(A)-4, Hyderabad’s order dated 14-11-2017 passed in case No.0017 / 16-17 / ITO, Wd.13(2) / CIT(A)-4 / Hyd / 17-18, involving proceedings u/s. 143(3) r.w.s.147 of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused. 2. We straightaway come to the assessee’s second substantive ground challenging correctness of both the lower authorities’ action making Section 69 un-explained investment addition of Rs.62.75 lakhs in his hands. The CIT(A)’s detailed discussion affirming the same reads as under: ITA No. 11/Hyd/2018 :- 2 -: “4. Ground nos. 4 to 7 are with regard to addition of Rs.61,25,000/- towards unexplained investment u/s 69 of the IT Act. 4.1 During the course of assessment proceedings, the Assessing Officer submitted that based on the specific information that Sri Bukka Kanakaiah of Siddipet was carrying cash of Rs.1,20,00,000/- to be delivered to Sri VV Rajam of Malakpet, Hyderabad to whom he intended to deliver the seized cash of Rs.1.20 crores for the purpose of purchase of land at Siddipet. Sri W Rajam was also searched u/s 132 of the Act on 06.06.2012. In the course of search, a sale deed dated 02.05.2007 was seized which was a sale transaction between Sri B. Pavan Kumar (Vendor) and Sri K Krupakar Reddy (appellant) and Sri R Muthyam Rao (Purchasers). Further, loose sheets were also seized in the residential premises of Sri VV Rajam, which narrates the consideration received on different dates amounting to Rs.2,77,50,000/- out of which the amount pertaining towards the above sale consideration is Rs.1,25,50,000/- from both the vendees Sri K. Krupakar Reddy and Sri R Muthyam Rao through mediators. The appellant's share was Rs.62,75,000/- i.e.50% of the total transaction. 4.2 From the statement of Sri W Rajam, that the appellant alongwith Sri R. Muthyam Rao had invested an amount of Rs.1,25,50,000/- for purchase of the property. The assessee's share was thereby Rs.62,75,000/- (Being 50%). The appellant admitted only Rs.1,50,000/- for purchase of the said property, thereby the difference of Rs.61,25,000/- (Rs.62,75,000 - 1,50,000) was treated as unexplained investment u/s 69 of the Act and added to the returned income. 4.3 During the course of appellate proceedings, the appellant submitted as under: "It is submitted that an amount of Rs.1,50,000/- plus registration charges as 50% of appellant’s share for purchase of property admeasuring 1 Acre of agricultural land situated at Survey No.47, Mangalpally village, Ibrahimpatnam Mandal, Ranga Reddy District. Subsequently, the Assessing Officer required the appellant to explain about the statement given by Mr. VV Rajam on the ground that an amount received by him was Rs.1,25,5,0,000/- per acre. In this regard, the appellant submitted before the Assessing Officer that the appellant has not paid any amount in excess of registration value i.e. Rs.3,00,000/- and the same was certified by the SRO, Ibrahimpatnam. It is further submitted that the Assessing Officer and VV Rajam has not brought any evidence for payment of said sale consideration of Rs.1,25,50,000/-. Sworn statement recorded and oath administered and the statement given by Sri Pavan Kumar on 06.01.2016. Further, the appellant was also allowed to cross ITA No. 11/Hyd/2018 :- 3 -: examine Sri B. Pavan Kumar and Sri VV Rajam and in view of the statements given by them, the cross examination statements of all the persons were recorded on 04.02.2016 by the Assessing Officer wherein Sri K Krupakar Reddy has stated that he has paid only Rs.1,50,000/- as his share by cash to Sri B. Pavan Kumar on 01.05.2007 towards the sale consideration and he is not aware of any other amounts made and he has not paid any amount to Sri VV Rajm other than the sale deed amount already received by the vendor from the purchasers, whereas Sri Pavan Kumar has stated that he is not received or taken any amount from Sri K Krupakar Reddy directly. In sale deed executed on 02.05.2007 that in pursuance of the said agreement and in consideration of the sum of Rs.3,00,000/- already received by the vendor from the purchasers, the said vendor was absolute owner of the said property prescribed in the schedule hereto and hereby transfer convey and assign free from encumbrances all the said property to hold the same to the said purchasers as absolute owners together with appurtenances belonging and all interests and claims whatsoever of the vendor in so far the said property is hereby conveyed. In the statement of Sri Pavan Kumar, it was stated that he has not received any excess amount from the appellant and the said excess amount was received by only mediators and the Assessing Officer has completed the assessment on assumptions and presumptions without verifying the facts of the case thoroughly. It was also mentioned in the agreement that the vendor has already delivered the vacant and peaceful possession of the said property being sold to the purchasers and the purchasers are in possession of the same. 4.4 I have carefully considered the assessment order, facts of the case and written submissions filed by the appellant. The appellant had not furnished any further submissions during the course appellate proceedings to counter the addition made by the Assessing Officer. Since the Assessing Officer has made cross examination also and the statements were recorded. Sri Pavan Kumar was stated that he had not received or taken any amount from Sri Krupakar Reddy (the appellant) directly but this amount of Rs.1,25,50,000/- was received by Sri VV Rajam who is father in law of him and the "Sale deed was executed on 02.05.2007". The Assessing Officer had clearly stated in detail in the assessment order, that the appellant along with Sri R. Muthyam Rao has invested an amount of Rs.1,25,50,000/- for purchase of the said property. Hence, I am in agreement with the Assessing Officer and I found that there is no further interfere in this case. Therefore, the addition made by the Assessing Officer is hereby confirmed. ITA No. 11/Hyd/2018 :- 4 -: 5. Ground no.8 is with regard initiating of interest u/s 234A & 234B of the Act. The same is not adjudicated since it is consequential in nature. 6. In the result, the appeal is dismissed”. 3. We find no reason to sustain the impugned addition. It is clear from a perusal of case file; and more particularly the assessment order dt.22-03-2016 herein that one Shri Bukka Kanakaiah was found to be carrying cash amount of Rs.1,20,00,000/- on 05-06-2012 during a search operation. The said person stated that this amount was to be delivered to one Shri V.V.Rajam. This third party was also subjected to search on 06-06-2012 which resulted in a sale document dt.02-05-2007 found during the course thereof. It was in the said sale deed that the assessee was a co-vendee and Shri B.Pavan Kumar had acted as the vendor. There is further no dispute that the said vendor was son-in-law of Shri V.V.Rajam. 4. The Revenue’s case in light of the foregoing factual position and on the basis of the sale deed and the other alleged loose sheets found during the course of search is that the learned lower authorities have already afforded ample opportunities to the assessee whilst making the impugned addition. Learned Departmental Representative fails to dispute that even if all the foregoing facts are treated as correct, the alleged money carrier nowhere named the assessee to have given him the cash amount so as to be delivered to the vendor’s father-in-law, Shri V.V.Rajam. Coupled with this, it is also a fact that the alleged loose sheets nowhere mentions the assessee’s name admitting ITA No. 11/Hyd/2018 :- 5 -: liability to pay the impugned alleged cash amount; as the case may be. We conclude in view of all these facts that the department could not have made the impugned Section 69 un- explained investment addition based on a third party statement, who is neither vendor nor the vendee but only related to the former. We accordingly find substance to sustain the same. It stands deleted. The assessee succeeds in his third to sixth substantive grounds to this effect. 5. Learned counsel is fair enough in not pressing for the assessee’s challenge to validity of Section 148/147 proceedings. 6. This assessee’s appeal is partly allowed in above terms. Order pronounced in the open court on 17 th November, 2021 Sd/- Sd/- ( A. MOHAN ALANKAMONY ) ( S.S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 17-11-2021 TNMM ITA No. 11/Hyd/2018 :- 6 -: Copy to : 1.K.Krupakar Reddy, C/o.Shri T.Chaitanya Kumar, Advocate, Flat No.102, Gouri Apartments, Urdu Lane, Himayatnagar, Hyderabad. 2.The Income Tax Officer, Ward-13(2)-Hyderabad. 3.CIT(Appeals)-4, Hyderabad. 4.Pr.CIT-4, Hyderabad. 5.D.R. ITAT, Hyderabad. 6.Guard File.