Sri B. Rajeswar Rao, Hyd, Hyderabad V. ACIT, Central Circle-1, Hyderabad

ITA 1141/HYD/2011

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1872 (ITAT-HYDERABAD)
• Duration Of Justice: 8 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-B
• Next Hearing Date: 28-11-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 14-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Gift; Search and seizure; Document seized; Corroborative evidences; Valuation report; Assessment record; Documents seized
• Section: 143(3); 153A; 201; 13; 68; 6; 132; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE S HRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI V. DURGA RAO , JUDICIAL MEMBER ITA NO S . 1 141, 1142 AND 1143 /HYD/201 1 ASSESSMENT YEAR S : 200 7 - 08, 2008 - 09 AND 2009 - 10 SHRI B. RAJESWAR RAO, HYDERABAD . PAN A EUPB6934J VS. ASST. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 1 , HYDERABAD. ( APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI S. RAMA RAO REVENUE BY : S HRI Y.V.S.T. SAI DATE OF HEARING : 28 / 11 /201 9 DATE OF PRONOUNCEMENT : 04 / 12 / 201 9 O R D E R PER V. DURGA RAO, J .M . : TH ESE THREE AP PEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER S OF CIT(A) I , HYDERABAD , ALL ARE DATED, 27/04/2011 FOR THE AY S 2007 - 08 TO 2009 - 10. ITA NO. 1141/HYD/2011 2. BRIEF FACTS OF THE CAS E ARE THAT THERE WAS A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 07/08/2008. SUBSEQUENT TO THE SEARCH, A NOTICE U/S 153A OF THE ACT WAS ISSUED ON 09/09/2009 FOR THE AY 2008 - 09 AND THE SAME WAS SERVED ON THE ASSESSEE ON 15/09/2009. IN RESPONSE TO THE NOTICE, ASSESSEE FILED A RETURN OF INCOME ON 31/03/2010, ADMITTING INCOME OF RS. 3,89,545/ - . THE AO AFTER FOLLOWING THE DUE PROCEDURE AND AFTER SERVING THE NOTICES AS REQUIRED UNDER THE ACT, COMP LETED THE ASSESSMENT U/S 153A READ WITH SECTION 2 ITA NO S . 1141, 1142 & 1143 HYD/1 1 SRI B. RAJESWARA RAO, HYD. 143(3) OF THE ACT BY MAKING AN ADDITION OF RS. 45,00,000/ - IN RESPECT OF THE LOAN ADVANCED TO SMT. NARAGONI RADHA. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, THE AO OBSERVED THAT PRONOTES AND CASH RECE IPTS WERE FOUND IN THE POSSESSION OF THE ASSESSEE AND IT WAS ALSO VERY MUCH EVIDENT THAT BASED ON THE ABOVE DOCUMENTS, THE ASSESSEE HAD ADVANCED LOAN TO SMT. NARAGONI RADHA. ACCORDINGLY, THE AO MADE THE ADDITION U/S 68 OF THE ACT TREATING THE AMOUNT OF RS. 45,00,000/ - AS UNEXPLAINED INVESTMENT. 3. WHEN THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), THE CIT(A) CONFIRMED THE ORDER OF AO. 4. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS,45, 00,000/ - ON THE GROUND THAT THERE IS MATERIAL TO SUGGEST THAT THE ASSESSEE HAS ADVANCED LOANS WITHOUT APPRECIATING THE FACT THE INVESTIGATION WING DURING POST SEARCH ENQUIRES HAS ENQUIRED AND FOUND THAT THERE WAS NO SUCH ADVANCES AND THAT WHAT IS FOUND DURING THE SEARCH IS ONLY COPIES AND NOT ORIGINALS AND THAT SUCH AMOUNTS WERE ADVANCED SINCE THE OTHER PARTY FAILED TO FULFIL THE MORTGAGE CONDITIONS. 3. THE LEARNED CIT(A) IN NOT APPRECIATING THE PLEA OF THE ASSESSEE TO DIRECT THE AO TO CONDUCT ENQUIRIES TO FIND OUT WHETHER AMOUNTS ARE ADVANCED OR NOT AND THEREBY ERRED IN CONFIRMING THE ADDITION MADE BY AO WITHOUT MAKING ANY ENQUIRIES MERELY ON THE BASIS OF MATERIAL WHICH ARE ONLY COPIES WITHOU T ANY SUPPORTING EVIDENCE. 4. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 5. BEFORE U S, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT PRO - NOTES ARE XEROX COPIES AND THEREFORE, ADDITION CANNOT BE MADE ON THE BASIS OF XEROX COPIES. 3 ITA NO S . 1141, 1142 & 1143 HYD/1 1 SRI B. RAJESWARA RAO, HYD. 6. ON THE OTHER HAND, LD. DR HAS SUBMITTED THAT PRO - NOTES AS WELL AS RECEIPTS IN RESPECT OF THE AMOUNT ADVA NCED BY THE ASSESSEE TO SMT. NARAGONI RADHA FOUND IN THE POSSESSION OF THE ASSESSEE. HE, THEREFORE, SUBMITTED THAT THE AO HAS RIGHTLY MADE THE ADDITION IN THE HANDS OF THE ASSESSEE AS UNDISCLOSED INVESTMENT. 7. WE HAVE HEARD BOTH THE SIDES AND PERUSED TH E MATERIAL ON RECORD AS WELL AS GONE THROUGH THE ORDERS OF REVENUE AUTHORITIES. IN THIS CASE, THERE IS A SEARCH AND SEIZURE OPERATION CARRIED OUT BY THE DEPARTMENT, IN WHICH, THE SEARCH TEAM HAS FOUND PRO - NOTES TO THE EXTENT OF RS. 45,00,000/ - AND ALSO REC EIPTS IN RESPECT OF THIS AMOUNT RECEIVED BY SMT. NARAGONI RADHA. THE AO HAS MADE THE ADDITION ON THE GROUND THAT PRO - NOTES AS WELL AS RECEIPTS OF THE AMOUNT FOUND IN THE PREMISES OF THE ASSESSEE BY REJECTING THE SUBMISSION OF THE ASSESSEE THAT HE HAS NOT A DVANCED ANY AMOUNT TO SMT. NARAGONI RADHA. AS PER SECTION 292C OF THE IT ACT, ANY DOCUMENT IS FOUND IN THE POSSESSION OF THE ASSESSEE, HE HAS TO EXPLAIN THAT IT IS NOT BELONGING TO HIM. IN THIS CASE, THE ASSESSEE DENIED THAT HE HAS NOT ADVANCED THE AMOUNT, BUT THE DOCUMENTARY EVIDENCE BY WAY OF PROMISSORY NOTES AND RECEIPTS FROM THE BORROWER SHOWS THAT THE ASSESSEE HAS ADVANCED THE AMOUNT. THAT PART, NOBODY SIGNS A PROMISSORY NOTE WITHOUT RECEIVING THE MONEY. IN VIEW OF THESE OBSERVATIONS, WE ARE OF THE OPI NION THAT ASSESSEE HAS FAILED TO DISCHARGE BURDEN CAST UPON HIM TO ESTABLISH THAT HE HAS NOT ADVANCED AMOUNT TO SMT. NARAGONI RADHA . 7.1 THE CIT(A) HAS CONSIDERED ALL THE FACTS AND CONFIRMED THE ORDER OF THE AO BY OBSERVING AS UNDER: 3.4 I HAVE GONE TH ROUGH THE FACT OF THE CASE AND THE SUBMISSION OF THE APPELLANT. IT IS NOT DISPUTED THAT THE ADDITION HAS BEEN MADE BY THE AO BASED ON THE DOCUMENT SEIZED DURING THE COURSE OF SEARCH WHICH WAS IN POSSESSION OF THE APPELLANT. IT IS THE CONTENTION OF THE APPE LLANT HAT SINCE THE CONDITIONS OF THE MOU WERE NOT SATISFIED, THE ALLEGED AMOUNT OF RS.45 LAKHS WAS NOT ADVANCED BY THE APPELLANT. I HAVE GONE THROUGH THE 4 ITA NO S . 1141, 1142 & 1143 HYD/1 1 SRI B. RAJESWARA RAO, HYD. SAID MOU FILED BY THE APPELLANT. AT PAGE 3 OF THE SAID MOU IT IS CLEARLY MENTIONED THAT THE PARTY OF THE SECOND PART I . E . NARAGONI RADHA HAVE RECEIVED A SUM OF RS.45 LAKHS FROM THE PARTIES OF THE FIRST PART I . E . THE APPELLANT ON 23 - 1 - 2007. IT IS ALSO DECLARED AND AFFIRMED THAT THE PARTIES OF THE SE C OND PART HA D RECEIVED THE SAID AMOUNT ON 23 - 1 - 2007 AND ON THE SAID DATE, THEY HAVE EXECUTED A PROMISSORY NOTE AND RECEIVED THE SAID AMOUNT IN FAVOUR OF THE FIRST PARTY AS COLLATERAL SECURITY. THEY HAVE ALSO AFFIRMED THAT THE SECOND PARTY BEING THE LAWFUL OWNERS OF THE SCHEDULED PROPERTIES, HAVE DEPOSITED THE ORI GINAL TITLE DEEDS RELATING TO THE PROPERTIES WITH THE FIRST PARTY ON 23 - 1 - 2007 WITH AN INTENTION TO CREATE EQUITABLE MORTGAGE THEREOF AND FOR SECURING THE SAID ADVANCE AMOUNT OF RS.45 LAKHS. THUS IT IS PROVED BEYOND DOUBT THAT THE APPELLANT HAD PAID RS.45 LAKHS TO NARAGONI RADHA ON RECEIPT OF THE ORIGINAL TITLE DEEDS. IT IS THEREFORE CLEARLY ESTABLISHED THAT THE CONTENTION RAISED BY THE APPELLANT CANNOT BE SAID TO BE TRUE. SINCE THE APPELLANT HAD FAILED TO DISCLOSE THE AMOUNT OF RS.45 LAKHS IN THE RETURN OF INCOME, THE AO WAS JUSTIFIED IN MAKING THE ADDITION OF THE SAME WHILE ASSESSING THE INCOME OF THE APPELLANT. THUS, THE ADDITION MADE BY THE AO IS CONFIRMED. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITION MADE BY THE AO AND ACCORDINGLY, UPHOLDING THE ORDER OF CIT(A), WE DISMISS THE GROUND RAISED BY THE ASSESSEE ON THIS ISSUE . ITA NO. 1142/HYD/2011 8. THE ONLY ADDITION MADE BY THE AO IN THIS APPEAL IS IN RESPECT OF UNEXPLAINED INVESTMENT OF RS. 5 LAKHS. 9. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTED THAT AS PER THE ASSESSMENT RECORDS, THE ASSESSEE HAS FILED AN AFFIDAVIT WHEREIN HE HAS STATED THAT HE HAS ADVANCED RS. 5 LAKHS TO SHRI K. NAGANTHAM DURING THE YEAR UNDER CONSIDERATION AND HE HAS NOT EXPLAINED THE SOU RCE FOR THE SAME. ACCORDINGLY, BASED ON THE SEIZED MATERIAL AND ALSO THE AFFIDAVIT FILED BY THE ASSESSEE, THE AO MADE THE ADDITION TO THE EXTENT OF RS. 5 LAKHS. 5 ITA NO S . 1141, 1142 & 1143 HYD/1 1 SRI B. RAJESWARA RAO, HYD. 10. WHEN THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), THE CIT(A) CONFIRMED THE ORDER OF AO, AGAINST WHICH, THE ASSESSEE IS IN APPEAL BEFORE US. 11. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS NO BASIS FOR THE ADDITION AND THE SAME HAS TO BE DELETED. 12. THE LD. DR, ON THE OTHER HAND, SUBMITTED THAT THE ASSESSEE H AS ADVANCED RS. 5 LAKHS TO SHRI. K. NAGAN ATHAM, BUT, FAILED TO EXPLAIN THE SOURCE, HENCE, THE AO HAS RIGHTLY MADE THE ADDITION. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AS WELL AS GONE THROUGH THE ORDERS OF REVENUE AUTHORITIES. WE FIND THAT THE ASSESSEE HIMSELF HAS ADMITTED BY FILING AN AFFIDAVIT THAT HE HAS ADVANCED AN AMOUNT OF RS. 5 LAKHS TO SHRI K. NAGANATHAM , BUT, WE DO NOT KNOW WHAT IS THE REASON FOR DENIAL OF THE SAME. BEFORE THE AO, CIT(A) AND EVEN BEFORE US, THE ASSESSEE FAILED TO EXPLAIN THE SOURCE FOR ADVANCING THE AMOUNT OF RS. 5 LAKHS, HENCE, THE ASSESSEE FAILED TO DISCHARGE THE BURDEN CAST UPON HIM TO PROVE THAT HE HAS NOT ADVANCED THE AMOUNT. THE CIT(A) CONFIRMED THE ORDER OF AO BY OBSERVING AS UNDER: 3 I HAVE GONE THROUGH THE FACT OF THE CASE AND THE SUBMISSION OF THE APPELLANT. I HAVE ALSO GONE THROUGH THE ASSESSMENT RECORD. IT IS NOT DISPUTED THAT THE ADDITION HAS BEEN MADE BY THE AO BASED ON THE DOCUMENT SEIZED DURING THE COURSE OF SEARCH WHICH WAS IN POSSESSION OF THE APPELLANT. IT IS THE CONTENTION OF THE APPELLANT THAT THE ADDITION MADE BY THE AO IS NO JUSTIFIED SINCE NO SUCH LOAN WAS ADVANCED. I DO NOT AGREE WITH THE CONTENTION OF THE APPELLANT. IN FACT, DURING THE COURSE OF SEARCH, AS STATED EA RLIER, A STATEMENT WAS RECORDED FROM THE APPELLANT U/S.132( 4) WHEREIN THE APPELLANT HAD SUBMITTED THAT HE HAD ADVANCED AN AMOUNT OF RS.5 LAKHS TO SRI K.NAGANATHAM BUT THE SOURCES ARE NOT EXPLAINABLE. APPARENTLY, HE HAD ADMITTED THIS SUM AS HIS UNDISCLOSED INVESTMENT. ASSESSMENT RECORDS ALSO INDICATE THAT THE APPELLANT HAD FILED AN AFFIDAVIT BEFORE THE AO WHEREIN HE HAD AFFIRMED ON OATH AS UNDER. 6 ITA NO S . 1141, 1142 & 1143 HYD/1 1 SRI B. RAJESWARA RAO, HYD. I DO HEREBY DECLARE THAT I ADMITTED INCOME IN THE ASSESSMENT YEAR 2008 - 09 IS RS.15 LAKHS AND ASSESSMENT YEAR 2 009 - 10 AS NIL INSTEAD OF AY 2008 - 09 IS RS.5 LAKHS AND AY 2009 - 10 IS RS.10 LAKHS. I FURTHER STATE THAT I HAVE GIVEN RS.5 LAKHS TO K.NAGANATHAM IN THE FY 2007 - 08 I.E. AY 2008 - 09 AND RS.10 LAKHS TO B.FV1ANOHAR FOR THE FY 2008 - 09 I.E. AY 2009 - 10. KINDLY CONS IDER THE SAME. 03.4 THUS FROM THE AFFIDAVIT FILED BY THE APPELLANT BEFORE THE AO IT IS CRYSTAL CLEAR THAT THE APP EL LANT HAD GIVEN RS.5 LAKHS TO K. NAGANATHAM WHICH WAS ADMITTED BY HIM AS INCOME. CONSIDERING THE SAME, I DO NOT FIND ANY INFIRMITY IN THE OR DER OF THE AO MAKING ADDITION OF THE SAME IN THE ASSESSMENT ORDER. IN OTHER WORDS THE ADDITION MADE BY THE AO IS CONFIRMED. 13. WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITION MADE BY THE AO, THEREFORE, UPHOLDING THE ORDER OF CIT(A) WE DISMISS THE GROUND RAISED BY THE ASSESSEE ON THIS ISSUE. ITA NO. 1143/HYD/2011 14. THE ASSESSEE HAS RAISED THE FOLLOWI NG GROUNDS IN THIS APPEAL: 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.78,00,000 ON THE GROUND THAT THERE IS MATERIAL TO SUGGEST THAT THE ASSESSEE HAS ADVANCED LO ANS WITHOUT APPRECIATING THE FACT THE INVESTIGATION WING DURING POST SEARCH ENQU I RIES HAS ENQUIRED AND FOUND THAT THERE WAS NO SUCH ADVANCES AND THAT WHAT IS FOUND DURING THE SEARCH IS ONLY COPIES AND NOT ORIGINALS AND THAT SUCH AMOUNTS WERE ADVANCED SINCE THE OTHER PARTY FAILED TO FULFIL THE MORTGAGE CONDITIONS. 3. THE LEARNED CIT(A) IN NOT APPRECIATING THE PLEA OF THE ASSESSEE TO DIRECT THE AD TO CONDUCT ENQUIRIES TO FIND OUT WHETHER AMOUNTS ARE ADVANCED OR NOT AND THEREBY ERRED IN CONFIRMING THE ADDITI ON MADE BY AD WITHOUT MAKING ANY ENQUIRIES MERELY ON THE BASIS OF MATERI AL WHICH ARE O NLY COPIES WITHOUT ANY SUPPORTING EVIDENCE. 4 . THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF MADE BY A O AS UNEXPLAINED INVESTMENT IN JE W ELLERY WITHO UT APPRECIATING THE FACT THAT THE A O HAS MADE THE ADDITIO N WITHOUT 7 ITA NO S . 1141, 1142 & 1143 HYD/1 1 SRI B. RAJESWARA RAO, HYD. ANY ENQUIRY AND WITHOUT APPRECIATING THE EVIDENCES THAT ARE FILED BEFORE HIM. 5. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.21, 65,282 MADE BY AD AS UNEXPLAINED INVESTMENT IN JEWELLERY INSTEAD OF APPRECIATING THE AFFIDAVITS OF PERSONS WHO CLAIMED THE JEWELLERY TO BE BELONGING TO THEM ON THE GROUND THAT THE ASSESSEE AT THE TIME OF SEARCH HAS NOT STATED THAT THE JEWELLERY BELONGED TO OTHERS WITHOUT APPRECIATING THE FACT THAT IT MIGHT NOT HAVE BEEN KNOWN TO THE ASSESSEE SINCE THE FACTS ARE KNOWN ONLY TO FAMILY MEMBERS. 6. THE LEARNED CIT(A) ERRED IN OBSERVING THAT AMPLE OPPORTUNITY IS GIVEN TO )HE ASSESSEE FOR EXPLAINING THE JEWELLER Y WHEN THE POSTING OF THE ~SE FOR HEARING ITSELF WAS ONLY ON FEW DATES AND NOT MANY AND POSTING WAS THERE EVEN ON 31 - 12 - 2010 THE LAST DATE OF TIME BARRING. 7. TH E LEARNED CIT(A) ERRED IN NOT DIRECTING TO DELETE THE ADDITION ON ACCOUNT OF DIFFERENCE IN VA LUATION IF THE DIFFERENCE IS LESS THAN 10 % AFTER REWORKING THE VALUE AND FURTHER ERRED IN NOT DIRECTING TO ENQUIRE ABOUT THE VALUE OF UNFINISHED WORKS . 8. THE LEARNED CIT(A) ERRED IN NOT GIVING DIRECTIONS TO DELETE THE INTEREST U/S.234 B WHICH IS NOT LE VIABLE IF THE DEPARTMENT FAIL TO ADJUST THE SEIZED CASH TOWARDS ADVANCE TAX IN SPITE OF REQUEST TO DO SO. 9. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING 15. GROUND NOS. 1 & 9 ARE GENERAL IN NATURE, HENCE, NEED NO ADJUDICATION. 16. AS REGARDS GROUND NOS. 2 & 3 RELATING TO THE ADDITION OF RS. 78,00,000/ - , I N THE ASSESSMENT ORDER, THE AO OBSERVED THAT DURING THE COURSE OF SEARCH PROCEEDING, CERTAIN DOCUMENTS WE RE FOUND AND SEIZED FROM THE RESIDENTIAL PREMISES OF THE APPELLANT AND PLACED AT PAGE NO.1, 2, 4 , 8, 20, 25, 26 AND 29 OF ANNEXURE A/BRR/RES/3. THESE PAGES CONTAINED SEVERAL PRO - NOTES AND CASH RECEIPTS AMOUNTING TO RS.155 LAKHS. THE SAME ARE LISTED BELOW. S.NO. DATE NAME OF THE BORROWER PAGE NO. OF ANNEXA/BRR/RES/3 AMOUNT (RS.) 1 05/07/08 K. ANJANEYULU 1 15,00,000 8 ITA NO S . 1141, 1142 & 1143 HYD/1 1 SRI B. RAJESWARA RAO, HYD. 2 02/07/08 K. ANJANEYULU 2 50,00,000 3 30/06/08 CH. RAMACHANDRA RAO 4 15,00,000 4 30/06/08 B. MADHAVI 8 15,00,000 5 18/06/07 K. NAGANATHAM 20 5,00,000 6 30/06/08 B. MANOHAR 25 5,00,000 7 30/06/08 B. MANOHAR 26 5,00,000 8 23/01/07 NARAGONI RADHA 29 45,00,000 16 .1 THE AO OBSERVED THAT D URING THE COURSE OF SEARCH PROCEEDING STATEMENT U/S.132(4) WAS RECORDED FROM THE A SSESSEE IN RESPECT OF THE ABOVE LOAN TRANSACTIONS. AP PARENTLY, THE A SSESSEE HAD DENIED TO HAVE ADVANCED ANY AMOUNT AS APPEARING IN PAGE NO.1, PAGE NO.2, PAGE NO.29. AS REGARDS PAGE NO.4, IT WAS STATED THAT THE LOAN WAS ADVANCED FROM OUT OF THE DRAWINGS OF HIS PROPRIETARY CONCERN AND FROM WIFE'S BANK ACCOUNTS. AS REGARDS THE AMOUN T SHOWN IN PAGE NO.8, IT WAS STATED THAT THOUGH THE PRO NOTE WAS FOR RS.15 LAKHS, BUT ACTUALLY A SUM OF RS.2 L AKH WAS GIVEN AS LOAN BY WAY OF CHEQUE. AS REGARDS THE AMOUNT APPEARING IN PA GE E NO.20, 25 AND 26, IT WAS STATED THAT HE HAD ADVANCED AN AMOUNT OF RS.5 L AKHS TO SRI K.NAGANATHAM AND B MANOHAR BUT THE SOURCE IS NOT EXPLAINABLE. THE AO OBSERVED THAT THE APPELLANT HAD ADVANCED AN AMOUNT OF R S .15 LAKHS TO B. MANOHAR AND SRI NAGANATHAN AND ADMITTED THE SAME. FURTHER, R S .15 LAKHS ADVANCED TO RAMACHANDRA R AO WAS STATED TO HAVE BEEN MADE FROM OUT OF AVAILABLE FUND AND WIFES BANK ACCOUNT. BUT HE DENIED TO HAVE EXTENDED RS. 15 LAKHS TO MADHAVI BUT IT WAS ONLY RS.2 LAKH. HE HAS ALSO DENIED TO HAVE EXTENDED ANY LOAN TO K.ANJANEYULU AND NARAGONI RADHA AMOUNTING TO RS. 1,10,00,000/ - THOUGH THE SEIZED PRO - NOTES ALONG WITH CASH RECEIPTS WERE IN HIS POSSESSION. IT CLEARLY SHOWS THAT HE HAD IN FACT ADVANCED THE AMOUNT AS MENTIONED IN THE SEIZED PAPERS. AFTER CONSIDERING THE EXPLANATION THE A O HELD THAT RS.78 LAKHS PAID TO K. ANJANEYULU AND B. MADHAVI IN THE FY 2008 - 09 NEEDS TO BE TREATED AS UNDISCLOSED INVESTMENTS OF THE ASSESSEE. ACCORDINGLY, HE ADDED THE AMOUNT TO THE TOTAL INCOME. 9 ITA NO S . 1141, 1142 & 1143 HYD/1 1 SRI B. RAJESWARA RAO, HYD. 17. WHEN THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), THE CIT(A) CONFIRMED THE ADDITION MADE BY THE AO. 18. BEFORE US, THE CASE OF THE ASSESSEE IS THAT THE ADDITION CANNOT BE MADE BASED ON THE XEROX COPIES OF THE PRONOTES AND, THEREFORE, SUBMITTED THAT THE ADDITION MAY BE DELETED. 19. ON THE OTHER HAND, LD. DR SUBMITTED THAT THE ADDITION IS NOT BASED ON THE PRONOTES ALONE, BUT, THE RECEIPTS SHOW THAT THE ASSESSEE HAS PAID THE AMOUNT TO THE THIRD PARTIES AND SIGNATURE OF THE THIRD PARTIES WERE FOUND IN THE RECEIPTS FOUND IN THE POSSESSION OF THE ASSESSEE, THEREFORE, THE ADDITION H AS TO BE CONFIRMED. 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AS WELL AS GONE THROUGH THE ORDERS OF REVENUE AUTHORITIES. IN THIS CASE, THE AO MADE THE ADDITION IN RELATION TO THE LOAN ADVANCED TO SRI K. ANJANEYULU AS PER PAGE 1 AND PAGE 2 OF THE SEIZED DOCUMENT AND TO SMT. B. MADHAVI AS PER PAGE NO. 8 OF THE SEIZED DOCUMENT NO. A/BRR/RES/3. THE CASE OF THE ASSESSEE BEFORE THE AO WAS THAT THE SAID LOANS WERE NOT ADVANCED SINCE CERTAIN CONDITIONS WERE NOT FULFILLED BY T HE PERSONS TO WHOM THE LOAN AMOUNT WAS TO BE ADVANCED. HOWEVER, IT WAS FOUND IN THE POSSESSION OF THE ASSESSEE THAT PRO - NOTES AS WELL AS RECEIPTS IN RESPECT OF THE LOANS ADVANCED BY THE ASSESSEE DULY SIGNED BY THE THIRD PARTIES. IN THE PRO - NOTE, IT IS VERY CLEAR THAT SHRI K. ANJANEYULU HAS RECEIVED AN AMOUNT OF RS. 15 LAKHS AND ON THE PRO - NOTE IT IS CLEARLY MENTIONED THAT REPAYMENT WILL BE MADE ALONG WITH INTEREST @ 24%. FURTHER, ONE MR. K. GOWTHAM STOOD PERSONAL GUARANTEE FOR THE PRO - NOTE AND PAGE 3 OF THE SEIZED DOCUMENT IS A COPY OF UNDATED SIGNED BY SRI K. ANJANEYULU FOR RS. 15 LAKHS. THE SAID CHEQUE DRAWN IN BANK OF INDIA VIDE ACCOUNT NO. 86433011000005, IN FAVOUR OF B. RAJESWARA RAO, THE ASSESSEE. SIMILARLY, IN PAGE NO. 2 OF THE SEIZED DOCUMENT, AN IDE NTICAL PRO NOTE AND MONEY RECEIPT FOR RS. 50 LAKHS RECEIVED BY K. 10 ITA NO S . 1141, 1142 & 1143 HYD/1 1 SRI B. RAJESWARA RAO, HYD. ANJANEYULU IS AVAILABLE. IN THIS PRO NOTE ALSO, SRI K. GOWTHAM, RESIDING AT 266A, ROAD NO. 10, JUBILEE HILLS IN THE PERSONAL GUARANTOR. ONCE THESE ALL THE DOCUMENTS I.E. PRO NOTES AND RECEIP TS OF THE IMPUGNED CHEQUES WERE FOUND IN THE POSSESSION OF THE ASSESSEE, THE ASSESSEE HAS TO EXPLAIN THAT AS TO WHY THESE DOCUMENTS ARE IN HIS POSSESSION WITHOUT MAKING ANY PAYMENT. WE ARE, THEREFORE, OF THE VIEW THAT THE ASSESSEE HAS FAILED TO DISCHARGE T HE BURDEN CAST UPON HIM TO PROVE THAT HE HAS NOT ADVANCED ANY AMOUNT TO SHRI K. ANJANEYULU. THE FACTS OTHERWISE PROVE THAT HE HAS ADVANCED AN AMOUNT OF RS. 15 + 50 LAKHS, TOTALLING TO RS. 65 LAKHS TO SHRI K. ANJANEYULU. THEREFORE, THE ADDITION TO THE EXTE NT OF RS. 65 LAKHS, IN OUR OPINION, THE REVENUE AUTHORITIES HAVE RIGHTLY MADE AND THE DECISION DOES NOT CALL FOR ANY INTERFERENCE. 20.1 IN SO FAR AS RS.15 LAKHS L OAN EXTENDED TO SMT. B. MADHAVI, THE ASSESSEE HAS CONTENDED THAT HE HAD GIVEN ONLY RS. 2 LAKHS AND NOT RS. 15 LAKHS. AS PER THE SEIZED DOCUMENT, IT WAS AN UNDERSTANDING BETWEEN THE ASSESSEE AND SMT. B. MADHAVI THAT THE ASSESSEE HAS ADVANCED RS. 15 LAKHS AN D SMT. MADHAVI HAS TO REPLAY ALONG WITH INTEREST @ 30% PER ANNUM. EVEN COLLATERAL SECURITY HAD OFFERED FOR THE SAID LOAN. THEREFORE, THE ASSESSEE HAS FAILED TO PROVE THAT HE HAS ONLY ADVANCED RS. 2 LAKHS AND NOT RS. 15 LAKHS. WE FIND THAT THE ASSESSEE HAS RIGHTLY MADE THE ADDITION AND THE CIT(A) CONFIRMED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER: 03.4 I HAVE GONE THROUGH THE ISSUE AND THE SUBMISSION OF THE APPE LLANT. I HAVE ALSO GONE THROUGH THE SEIZED MATERIAL. IT IS NOT DISPUTED THAT THE ADDITI ON OF RS.78 LAKHS HAS BEEN MADE BY THE A O BASED ON THE SEIZED DOCUMENTS WHICH WERE IN POSSESSION OF THE APPELLANT. THE AO HAD MADE THE ADDITION IN RELATION TO THE LOAN ADVANCED TO SRI K. ANJANEYULU AS PER PAGE 1 AND PAGE 2 OF THE SEIZED DOCUMENT AND TO SMT . B. MADHAVI AS PER PAGE NO.8 OF THE SEIZED DOCUMENT AJBRRJRESJ3. IT IS THE CONTENTION OF THE APPELLANT THAT THE SAID LOANS WERE NOT ADVANCED SINCE CERTAIN CONDITIONS WERE NOT FULFILLED BY THE PERSONS TO WHOM THE LOAN AMOUNT WAS TO BE ADVANCED. I DO NOT AG REE WITH THE CONTENTION RAISED BY THE APPELLANT. I FIND THAT AS PER PAGE N O .1 OF THE SEIZED BOOKS REFERRED TO ABOVE, SHRI K.ANJANEYULU HAD ISSUED A 11 ITA NO S . 1141, 1142 & 1143 HYD/1 1 SRI B. RAJESWARA RAO, HYD. PRO NOTE FOR RS.15 LAKHS. THE MONEY RECEIPT .DATED 5 - 7 - 2008 FORMING PART OF THE PRO NOTE CLEARLY INDICATES THAT SRI ANJANEYULU HAD RECEIVED A SUM OF RS.15 LAKHS. ON THE PRO NOTE, IT IS REAFFIRMED BY SRI ANJANEYULU WHO HAD PROMISED TO PAY THE SAID AMO U NT WITH INTEREST @ 24%. IN FACT, ONE SRI K.GOWTHAM STOOD SECURITY/PERSONAL GUARANTEE FOR THE SAID PRO NOTE. PAGE NO.3 OF THE SEIZED DOCUMENT IS A COPY OF AN UNDATED SIGNED CHEQUE BY SRI K.ANJANEYULU OF RS.15 LAKHS. THE SAID CHEQUE IS DRAWN ON BANK OF INDIA A/C NO.86433011000005. THE CHEQUE IS IN FAVOUR OF B.RAJESWARA RAO WHICH FURTHER SUBSTANTIATES THE FACT OF PAYME NT OF RS.15 LAKHS BY THE APPELLANT. SIMILARLY, IN PAGE NO.2 OF THE SEIZED DOCUMENT, AN IDENTICAL PRO NOTE AND MONEY RECEIPT FOR RS.50 LAKHS RECEIVED BY K.ANJANEYULU IS AVAILABLE. IN THIS PRO NOTE ALSO, SRI K.GOWTHAM, S / O K.R.RAO RESIDING AT 266A, ROAD NO.L 0, JUBILEE HILLS IS THE PERSONAL GUARANTOR. CONSIDERING THE SEIZED DOCUMENTS I AM OF THE VIEW THAT THE CONTENTION RAISED BY THE APPELLANT IS NOT SUSTAINABLE. NO PERSON WOULD ISSUE AN UNDATED CHEQUE UNLESS THE EQUIVALENT AMOUNT IS RECEIVED BY HIM. ACCORDING LY, I FIND NO INFIRMITY IN THE ORDER OF THE A O IN MAKING ADDITION O F LOAN OF RS.65 LAKHS ADVANCED BY THE APPELLANT. AS REGARDS THE LOAN OF RS.15 LAKHS EXTENDED TO B. MADHAVI, THE APPELLANT CONTENDS THAT HE HAD GIVEN ONLY RS.2 LAKHS AND NOT RS.15 LAKHS. I F IND FROM THE SEIZED PAPER THAT THE MEMORANDUM OF UNDERSTANDING WAS FOR RS.15 LAKHS WHICH SMT. MADHAVI WAS TO REPAY ALONG WITH INTEREST @ 30% PER ANNUM. EVEN COLLATERAL SECURITIES HAD BEEN OFFERED FOR THE SAID LOAN. ACCORDINGLY, THERE IS NO BASIS OF THE CLA IM OF THE APPELLANT THAT HE HAD GIVEN ONLY RS.2 LAKHS. I THEREFORE HOLD THAT THE AO WAS JUSTIFIED IN ADDING THE BALANCE AMOUNT OF RS. 13 LAKHS WHILE ASSESSING THE INCOME OF THE APPELLANT. IN OTHER WORDS, THE ADDITION OF RS. 78 LAKHS MADE BY THE AO IS SUSTA INED. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A) AND, THEREFORE, SAME IS UPHELD AND THE GROUNDS RAISED BY THE ASSESSEE ON THIS ISSUE ARE DISMISSED. 21. AS REGARD GROUND NOS. 4, 5 & 6 RELATING TO THE ADDITION OF RS. 21,65,282/ - BEING THE UNEXPLAINED INVESTMENT IN JEWELLERY, THE AO OBSERVED IN THE ASSESSMENT ORDER THAT DURING THE COURSE OF SEARCH GOLD JEWELLERY WEIGHING 1,482 GRAMS AND SILVER ARTICLES OF 14.88 KGS VALUED AT RS. 18,08,162/ - AND RS. 3,57, 120/ - RESPECTIVELY WERE FOUND. THE ASSESSEE EXPLAINED THE ABOVE JEWELLERY TO BE BELONGING TO HIMSELF, HIS MOTHER, HIS WIFE AND HIS DAUGHTER. IT WAS ALSO STATED THAT 12 ITA NO S . 1141, 1142 & 1143 HYD/1 1 SRI B. RAJESWARA RAO, HYD. HIS WIFE HAD RECEIVED MOST OF THE JEWELLERY AS GIFT FROM HIS PARENTS AT THE TIME OF MARRIAG E. HE FURTHER EXPLAINED THAT OUT OF THE ABOVE GOLD JEWELLERY, JEWELLERY WORTH RS. 5,43,022/ - BELONGS TO HIS FOUR BROTHERS WHO ARE RESIDING AT KARIMNAGAR AND WARANGAL. ACCORDING TO AO, NO EVIDENCE RELATING TO THE SAME WAS PRODUCED AND EVEN THE ASSESSEE FAIL ED TO SUBSTANTIATE THE CLAIM THOUGH THE OPPORTUNITY WAS GIVEN TO HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 22. WHEN THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), THE CIT(A) HELD THAT POSSESSION OF 500 GRAMS OF GOLD BY THE WIFE OF ASSESSEE IS REASONABLE AND DIRECTED THE AO TO DELETE THE PROPORTIONATE VALUE OF GOLD OF 500 GRAMS. 23. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD AS WELL AS GOING THROUGH THE ORDERS OF REVENUE AUTHORITIES, WE ARE OF THE VIEW THAT CIT(A) HAS REASONABLY HELD THAT 500 GRAMS OF GOLD BY THE WIFE OF THE ASSESSEE IS REASONABLE AND HENCE, WE CONFIRM THE DECISION OF THE CIT(A) AND DISMISS THE GROUNDS RAISED BY THE ASSESSEE ON THIS ISSUE. 24. AS REGARDS GROUND NO. 7 RELATING TO THE ADDITION OF RS. 75 ,73,000/ - AS UNEXPLAINED INVESTMENT IN CONSTRUCTION OF HOUSE BASED ON THE VALUATION REPORT OF THE DVO, THE AO TO ASCERTAIN THE INVESTMENT IN THE HOUSE PROPERTY, REFERRED THE CASE TO THE VALUATION CELL AND THE VALUATION CELL HAD ESTIMATED THE COST OF CONSTR UCTION AT RS. 75.53 LAKHS WHICH WAS CONTESTED BY THE ASSESSEE WHO WORKED OUT THE ESTIMATED CONSTRUCTION AT RS. 66.10 LAKHS. THE AO DECLINED TO INTERFERE WITH THE FINDING OF THE VALUATION OFFICER AND ADOPTED THE COST OF CONSTRUCTION AS ARRIVED AT BY THE D VO AND TREATED RS. 73.53 LAKHS AS UNDISCLOSED INVESTMENT IN THE HOUSE PROPERTY. 25. ON APPEAL, THE CIT(A) DIRECTED THE AO TO VERIFY THE RATE ADOPTED BY THE VALUATION CELL WHETHER THE SAME IS BASED ON CPWS 13 ITA NO S . 1141, 1142 & 1143 HYD/1 1 SRI B. RAJESWARA RAO, HYD. RATE AND IF SO, THE AO SHOULD GIVE A DEDUCTION OF 15% THEREON TO BRING AT PAR ON THE STATE PWD RATE. FURTHER, HE DIRECTED THAT IN TERMS OF THE JUDICIAL PRONOUNCEMENTS AS ABOVE INCLUDING THAT OF THE JURISDICTION TRIBUNAL, A 10% SHOULD BE AL LOWED FOR SELF SUPERVISION CHARGES TO ARRIVE AT THE COST OF CONSTRUCTION INSTEAD OF 7.5% ALLOWED BY THE VALUATION CELL. IN OTHER WORDS, THE AO SHOULD WORK OUT THE COST OF CONSTRUCTION AFRESH KEEPING IN VIEW THE DIRECTION AS ABOVE. 26. AFTER HEARING BOTH T HE PARTIES, WE ARE OF THE VIEW THAT THE DIRECTIONS GIVEN BY THE CIT(A) TO AO ARE PROPER AND NO INTERFERENCE IS CALLED FOR IN THE DIRECTIONS OF THE CIT(A) AND ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. 27. GROUND NO. 8 IS REGARDING OF IN TEREST U/S 234B. CHARGING OF INTEREST UNDER THIS SECTION IS CONSEQUENTIAL IN NATURE, THEREFORE, THE AO IS DIRECTED ACCORDINGLY. 28. IN THE RESULT, ALL THE APPEALS UNDER CONSIDERATION ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 4 TH DECEMBER , 201 9 . SD/ - SD/ - ( D. KARUNAKARA RAO ) ( V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 4 T H DECEMBER , 201 9 K V 14 ITA NO S . 1141, 1142 & 1143 HYD/1 1 SRI B. RAJESWARA RAO, HYD. C OPY TO: - 1. SRI B. RAJESWARA RAO, 10 - 29, 10 - 37, VINAYAK NAGAR, BALANAGAR, HYDERABAD. 2. AC IT, CENTRAL CIRCLE 1 , HYDERABAD. 3. CIT(A) I , HYDERABAD 4. CIT (CENTRAL) , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE