Bodiga Ramdas Goud, Hyderabad V. Dy. CIT, Central Circle-7, Hyderabad

ITA 1195/HYD/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5969 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 17-10-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 18-06-2014
• Court: TRIBUNAL
• Department Lawyers: A SITARAMA RAO
• Keywords: Unexplained investment; Unexplained expenditure; Search and seizure; Document seized
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. ASST. YEAR APPELLANT RESPONDENT 1195/HYD/14 2003-04 BODIGA RAMDAS GOUD, PARVATHAPUR, UPPAL, R.R.DISTRICT [PAN: AROPB8568K] DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-7, HYDERABAD 1196/HYD/14 2007-08 1197/HYD/14 2008-09 FOR ASSESSEE : SHRI K.C. DEVDAS, A R FOR REVENUE : SHRI A. SITARAMA RAO, DR DATE OF HEARIN G : 17 - 1 0 - 201 6 DATE OF PRONOUNCEMENT : 09 - 1 2 - 201 6 O R D E R PER B. RAMAKOTAIAH, A.M. : THESE THREE APPEALS ARE BY ASSESSEE AGAINST THE COMM ON ORDER OF THE COMMISSIONER OF INCOME TAX-(APPEALS), G UNTUR, DATED 26-02-2014 ARISING OUT OF THE ASSESSMENT ORDERS OF DCI T, CENTRAL CIRCLE-7, HYDERABAD. 2. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS AN INDIVI DUAL AND IS SARPANCH OF THE VILLAGE. APART FROM EXTENDING PUBLIC SERVICES, HE ALSO USED TO SETTLE LOCAL DISPUTES AND ALS O ARRANGE SOME LAND DEALS IN AND AROUND THE VILLAGE. HE GOT C OMMISSION INCOME BUT WAS NOT ASSESSED TO TAX EARLIER. SEARCH AND SEIZURE OPERATIONS WERE CONDUCTED ON 15-09-2008 IN THE PREMIS ES OF ASSESSEE AND IN RESPONSE TO NOTICES U/S. 153A OF THE INCOME TAX ITA NOS. 1195, 1196 & 1197/HYD/14 BODIGA RAMDAS GOUD :- 2 -: ACT [ACT] ASSESSEE FILED RETURNS OF INCOME. A SEIZE D DIARY WHEREIN VARIOUS NOTINGS WERE MADE IS THE BASIS FOR ASSESSMEN T AND ASSESSEE ALSO PREPARED A CASH FLOW STATEMENT INCORPORA TING THE ENTRIES IN THE DIARY IN THE COURSE OF ASSESSMENT. AO HAS MADE VARIOUS ADDITIONS IN AYS. 2003-04 TO 2009-10. LD.C IT(A) CONSIDERED ALL THE APPEALS BY THE COMMON ORDER AND H AS DISPOSED- OFF GIVING PARTIAL RELIEF. THERE IS NO APPEAL BY RE VENUE IN AY. 2004- 05 AND 2006-07 WHEREIN COMPLETE RELIEF WAS GIVEN TO THE ASSESSEE, WHEREAS ASSESSEE IS AGGRIEVED IN AYS. 2003-04, 2007 -08 & 2008- 09. SINCE COMMON ISSUES ARE INVOLVED, THESE THREE AP PEALS ARE TAKEN UP TOGETHER. ITA NO. 1195/HYD/2014 (AY. 2003-04): 3. THE ONLY ISSUE AGITATED BY ASSESSEE IN THIS APPEA L IS WITH REFERENCE TO ADDITION OF COMMISSION OF RS. 5 LAK HS RECEIVED AS AN ADVANCE IN AY. 2003-04 BUT OFFERED TO TAX IN AY. 2 008-09. THE GROUNDS ARE ACCORDINGLY RAISED ON THAT ISSUE. IN THIS ASSESSMENT YEAR, BASED ON THE ENTRIES IN THE DIARY, AO NOTED THAT AS SESSEE HAS RECEIVED AN AMOUNT OF RS. 5 LAKHS TOWARDS COMMISSION OF A TRANSACTION UNDERTAKEN BY ASSESSEE AND BROUGHT THE SAME TO TAX IN THIS YEAR, DESPITE ASSESSEES CONTENTION THAT THE TRANS ACTION WAS FINALISED VIDE DOCUMENT NO. 1163/07 DT. 14-12-2007 AN D THE COMMISSION WAS OFFERED IN THE FY. 2007-08 RELEVANT TO AY. 2008- 09. 4. LD.CIT(A) AFTER CONSIDERING THE SUBMISSIONS HOWEV ER, HAS TAKEN A PECULIAR STAND THAT THERE IS NO CORRELATION B ETWEEN THE AGREEMENT OF RS. 5 LAKHS RECEIVED DURING THE YEAR AN D SUBSEQUENTLY ADMITTED AMOUNT BUT HOWEVER, DIRECTED THE AO TO ITA NOS. 1195, 1196 & 1197/HYD/14 BODIGA RAMDAS GOUD :- 3 -: GIVE RELIEF IN AY. 2008-09 AFTER VERIFICATION. THE OR DER OF THE LD.CIT(A) IS AS UNDER: 4.5 I HAVE PERUSED THE SUBMISSIONS MADE. IT IS SEE N THAT IN THE ASST. YEAR 2003-04/ A TRANSACTION WAS ENTERED I NTO BETWEEN SRI PHOOLCHAND SINGH & OTHERS AND SRI T.5UKENDER REDDY & OTHERS REGARDING 20 ACRES OF LAND IN SURVEY NOS.1, 3, 4, 5 / 6, 7, 12 & 13 OF SALARJUNG PEDDA KANCHA, PARVATHAPUR VILLAGE. THE EN TIRE PARCEL OF LAND WAS TRANSFERRED THROUGH SIX SALE DEEDS DULY RE GISTERED VIDE DOC.NOS.364/03 TO 369/03. THE DOCUMENT SEIZED AS AN NEXURE A/BRG/10 FROM THE PREMISES OF THE APPELLANT SHOWS P AYMENT OF RS.28 LAKHS TO SRI RANA PRATAP SINGH ON 08.05.2002 BY SUKENDER REDDY THROUGH THE APPELLANT TOWARDS PURCHASE OF THI S LAND AND FURTHER AMOUNTS SUBSEQUENTLY, WHICH INDICATE THAT R S.40 LAKHS CASH WAS PAID. THUS, 20 ACRES OF LAND WAS TRANSFERRED BE TWEEN THE VENDORS, SRI RANA PRATAP SINGH/ SRI PHOOLCHAND SING H AND OTHERS ON THE ONE HAND AND THE BUYERS SRI T.SUKENDER REDDY & OTHERS ON THE OTHER. COMMISSION ON LAND DEALS ARE PAID WHEN T RANSACTIONS ARE CONCLUDED AND RARELY SO/ AS AN ADVANCE, ESPECIA LLY WHEN THE PAYMENT IS IN CASH AND IS UNRECORDED. HENCE, THE PR ESUMPTION IS THAT THIS COMMISSION RECEIVED IN THE F.Y. 2002-03 P ERTAINS TO THE TRANSACTION BETWEEN SUKENDER REDDY AND PHOOLCHAND S INGH & OTHERS FOR 20 ACRES OF LAND, WHICH TOOK PLACE IN TH E F.Y.2002-03 AND WAS REGISTERED IN JANUARY, 2003. THE CONTENTION OF THE APPELLANT THAT IT PERTAINS TO A SUBSEQUENT LAND TRA NSACTION IN THE YEAR 2007 DOES NOT APPEAR CORRECT AS PER THE DOCUME NTS ON RECORD AND HENCE THE ADDITION MADE IS BEING CONFIRMED. THE APPEAL FILED BY THE APPELLANT IS DISMISSED. HOWEVER, THE APPELLA NT HAS MADE AN ALTERNATE CLAIM THAT, IF THE COMMISSION IS TO BE TA XED IN THE ASST. YEAR 2003-04, RELIEF TO THAT EXTENT MAY BE ALLOWED IN ASST. YEAR 2008-09, WHERE THE APPELLANT HAS OFFERED THIS AMOUN T OF RS.5 LAKHS TO TAX. THE ASSESSING OFFICER IS DIRECTED TO VERIFY WHETHER THE APPELLANT HAS 1 INDEED OFFERED THIS COMMISSION OF R S.5 LAKHS TO TAX IN THE ASST. YEAR 2008-09, AND IF THE APPELLANT'S C ONTENTION IS FOUND CORRECT, RELIEF TO THAT EXTENT MAY BE GIVEN. 5. LD. COUNSEL FOR ASSESSEE SUBMITTED THAT ASSESSEE HA S INDEED RECEIVED ADVANCE AND HAS NOTED DOWN IN THE DIA RY BUT ULTIMATELY COMMISSION WAS EARNED AFTER CONCLUSION OF THE TRANSACTION AND ACCOUNTED FOR IN AY. 2008-09 AND THERE FORE, THERE IS NO NEED TO TAX THE AMOUNT IN AY. 2003-04. HE RELIED ON THE PRINCIPLES LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. EXCEL INDUSTRIES LTD., [358 ITR 295]. ITA NOS. 1195, 1196 & 1197/HYD/14 BODIGA RAMDAS GOUD :- 4 -: 6. LD. DR HOWEVER, SUPPORTED THE ORDERS OF THE AO AND CIT(A). 7. AFTER CONSIDERING THE RIVAL CONTENTIONS AND PERUSIN G THE DOCUMENTS PLACED ON RECORD, WE ARE OF THE OPINION THAT ASSESSEE HAS CORRECTLY DECLARED THE COMMISSION IN AY. 2008-09. ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT AND HAS NOTED DOWN IN THE DIARY ON THE BASIS OF THE RECEIPTS AND PAYMENTS. ADMI TTEDLY, THE TRANSACTION BETWEEN SHRI PHOOLCHAND SINGH AND OTHERS A ND SHRI SUKENDER REDDY AND OTHERS REGARDING 20 ACRES IN PAR VATHAPUR VILLAGE WAS BEING NEGOTIATED AND ULTIMATELY FINALISED IN 2007 ONLY BY WAY OF FINAL REGISTRATION. ACCORDINGLY, THE COMMI SSION IS ACCOUNTED FOR BY ASSESSEE IN AY. 2008-09. THE HON'B LE SUPREME COURT IN THE ABOVE CASE OF CIT VS. EXCEL INDUSTRIES LTD ., [358 ITR 295] (SUPRA), HAS HELD THAT IT IS WELL SETTLED THAT INCOME TAX CANNOT BE LEVIED ON HYPOTHETICAL INCOME. INCOME ACCRUES W HEN IT BECOMES DUE BUT IT MUST ALSO BE ACCOMPANIED BY A CORRESPOND ING LIABILITY OF THE OTHER PARTY TO PAY THE AMOUNT ONLY, THEN CAN IT BE SAID THAT FOR THE PURPOSE OF TAXABILITY THAT THE INCOME IS NOT HY POTHETICAL AND IT HAS REALLY ACCRUED TO THE ASSESSEE . KEEPING THE PRINCIPLES IN MIND, WE ARE OF THE OPINION THAT THE ADVANCE RECEIPT OF COMM ISSION CANNOT BE BROUGHT TO TAX IN AY. 2003-04 AND ASSESSEE H AS CORRECTLY ACCOUNTED FOR THE SAME IN AY. 2008-09. IN V IEW OF THAT, AO IS DIRECTED TO DELETE THE SAID ADDITION MADE IN THIS ASSESSMENT YEAR. THE GROUNDS RAISED BY ASSESSEE ON THIS ISSUE ARE ACCORDINGLY ALLOWED. IN CASE, AO GAVE RELIEF IN AY 2008-09 CONS EQUENT TO LD.CIT(A) ORDER THE SAME CAN BE MODIFIED. 8. IN THE RESULT, THIS APPEAL IS ALLOWED. ITA NOS. 1195, 1196 & 1197/HYD/14 BODIGA RAMDAS GOUD :- 5 -: ITA NO. 1196/HYD/2014 (AY. 2007-08): 9. THE ONLY ISSUE IN THIS ASSESSMENT YEAR IS WITH RE FERENCE TO PARTIAL CONFIRMATION OF ELECTION EXPENDITURE STATED TO HAVE BEEN INCURRED BY ASSESSEE FOR THE SARPANCH ELECTION DURING THE YEAR. ASSESSEE HAS RAISED FOUR GROUNDS ON CONFIRMATION OF EXPENDITURE TO AN EXTENT OF RS. 19 LAKHS TREATED AS INCOME FROM UND ISCLOSED SOURCES BY THE AO. THE FACTS LEADING TO THIS ADDITION ARE THAT THE DIARY SEIZED FROM ASSESSEES PREMISES AS ANNEXURE A /BRG/10 INDICATED CERTAIN AMOUNTS EXPENDED BY ASSESSEE IN CASH FOR SARPANCH ELECTION OF PARVATHAPUR VILLAGE IN FY. 2006- 07. AO NOTED THAT IN THE LAST PAGES OF THE DIARY, THE SOURCES FOR THE ENTIRE ELECTION EXPENDITURE HAS BEEN RECORDED AS RECEIPTS FRO M VARIOUS PERSONS. DURING THE ASSESSMENT PROCEEDINGS, IN THE STA TEMENT RECORDED ON 12-12-2008, ASSESSEE ADMITTED THAT THESE ENTR IES WERE WRITTEN BY HIM AND RECEIPTS AND EXPENSES WERE RECORDED ARE IN CONNECTION WITH HIS ELECTION AS SARPANCH OF PARVATHAPUR GRAM PANCHAYAT. THERE WAS A NOTING THAT ASSESSEE HAS SPENT RS. 23 LAKHS FOR THE OPPOSITION PARTY AND RS. 17 LAKHS FOR HIS OWN ELECTION, AS RECORDED ON 29-07-2016. HE HOWEVER, SU BMITTED THAT HE HAS SPENT ONLY RS. 9 LAKHS FROM HIS OWN POCKET WHI CH WAS ALSO ACCOUNTED FOR IN THE CASH FLOW STATEMENT. AFTER TAKING SUBMISSIONS FROM ASSESSEE, AO WAS OF THE OPINION THA T ENTIRE RS. 40 LAKHS SPENT BY ASSESSEE ON THE SAID ELECTION IS FRO M UNEXPLAINED SOURCES AND ACCORDINGLY BROUGHT THE AMOU NT TO TAX IN THE YEAR. 10. LD.CIT(A) AFTER CONSIDERING ASSESSEES SUBMISSI ONS HOWEVER, HAS DELETED AN AMOUNT OF RS. 21 LAKHS STATED TO HAVE BEEN RECEIVED FROM SHRI PHOOLCHAND SINGH, SHRI RANA PRATAP SINGH ITA NOS. 1195, 1196 & 1197/HYD/14 BODIGA RAMDAS GOUD :- 6 -: AND SHRI SUKENDER REDDY (6+10+5 LAKHS) WHICH WERE A DDED IN THEIR HANDS AS UNEXPLAINED EXPENDITURE TOWARDS ELEC TION OF ASSESSEE. AS THOSE AMOUNTS WERE CONFIRMED AND AS TH E ENTRY ALSO INDICATES THAT THE MONEYS WERE RECEIVED FROM THEM, LD.CI T(A) GAVE RELIEF TO THE EXTENT OF RS. 21 LAKHS AND SUSTAINED THE BALANCE RS. 19 LAKHS. ASSESSEE IS AGGRIEVED ON THIS AMOUNT. 11. LD. COUNSEL REFERRING TO THE ENTRIES IN THE DIAR Y PLACED IN PAPER BOOK, SUBMITTED THAT MOST OF THE AMOUNTS WERE REC EIVED FROM VARIOUS PEOPLE AND REFERRED TO THE ENTRY DT. 26-07 -2006, WHEREIN THERE ARE RECEIPTS FROM SEVEN PEOPLE TOTALING TO RS. 45 LAKHS. THE RECEIPTS FROM SHRI MURALIDHAR REDDY, SHRI JAIPAL REDDY AND SHRI YADI REDDY ETC., WERE NOT TAKEN INTO A CCOUNT EITHER BY THE LD.CIT(A) OR BY THE AO. IT WAS THE CONTENTION THA T THE ENTRIES DO INDICATE THAT THE AMOUNTS WERE RECEIVED FROM VARIOUS PEOPLE AND ASSESSEE ADMITTED THAT HE HAS SPENT ONLY RS. 9 LAKHS WHICH WAS REFLECTED IN HIS STATEMENT OF ACCOUNTS. IT WA S SUBMITTED THAT WHEN THE EXPENDITURE WAS ACCEPTED WITH THE ENTRIES I N THE DIARIES, THE RECEIPTS WERE ALSO TO BE ACCEPTED AS REC EIVED FROM THIRD PARTIES AS NOTED. IN VIEW OF THIS, IT IS SUBMITTED THAT NO AMOUNT CAN BE ADDED IN ASSESSEES HANDS. 11.1. LD. DR HOWEVER, SUBMITTED THAT THE EXPENDITURE OF RS. 40 LAKHS WAS UNDISPUTED AND THE SOURCES WERE NOT PROPE RLY EXPLAINED, THEREFORE, THE AMOUNTS WERE ADDED BY THE A O. IT WAS FURTHER SUBMITTED THAT LD.CIT(A) BASED ON THE RECEIPTS A ND CONFIRMATION IN OTHERS HANDS HAS GIVEN RELIEF TO AN E XTENT OF RS. 21 LAKHS AND THE BALANCE WAS CONFIRMED CORRECTLY. SINCE ASSESSEE HAS NOT EXPLAINED THE SOURCES, THE SAME DESERVED TO BE ADDED IN ASSESSEES HANDS. ITA NOS. 1195, 1196 & 1197/HYD/14 BODIGA RAMDAS GOUD :- 7 -: 12. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERU SED THE DOCUMENTS PLACED ON RECORD. THE ENTRIES ARE IN HA ND WRITING OF ASSESSEE IN TELUGU LANGUAGE. THERE ARE VARIOUS ENTR IES MADE. IT HAS NO CORRELATION TO EACH OTHER. IN SOME PLACES, THE EXPENDITURE WAS RECORDED TO THE TUNE OF RS. 74 LAKHS, IN SOME PLAC ES IT WAS TAKEN TO THE TUNE OF RS. 37 LAKHS AND IN THE FINAL ENTRY , IT WAS SHOWN AT RS. 40 LAKHS. AO HAS TAKEN THE ENTRY OF RS. 40 LAKHS AS UNEXPLAINED EXPENDITURE. HOWEVER, THERE ARE OTHER NOTINGS ALSO WHICH INDICATE THAT VARIOUS PEOPLE HAVE HELPED ASSESSE E. THE CLAIMS ARE AS UNDER: 1. SRI TEJU MAARAJU; 2. SRI RANA PRATAPU MAARAJU; 3. SRI MURALIDHAR REDDY; 4. SRI JAIPAL REDDY; 5. SRI SUKHENDER REDDY; 6. SRI YADI REDDY; 7. SRI RAGHUVEER SINGH; 12.1. OUT OF THESE, LD.CIT(A) HAS ACCEPTED ONLY THE A MOUNTS PERTAINING TO SRI TEJU MAARAJU, SRI RANA PRATAPU MAARA JU AND SRI SUKHENDER REDDY, WHEREAS SRI MURALIDHAR REDDY, SHRI YADI REDDY AND RAGHUVEER SINGH ALSO HAVE CONTRIBUTED TO AN EXTENT OF RS. 24 LAKHS. ACCORDINGLY, NO AMOUNT COULD BE BROUGHT TO TAX IN THE HANDS OF ASSESSEE. MOREOVER, ASSESSEE HAS ADMITTED A N AMOUNT OF RS. 9 LAKHS IN HIS CASH FLOW STATEMENTS WHICH THE AO H AS NOT GIVEN CREDIT. EVEN IF THE AMOUNT OF RS. 19 LAKHS IS TO BE CONSIDERED AS EXPENDITURE SPENT BY ASSESSEE TOWARDS E LECTION, THE AMOUNT OF RS. 9 LAKHS WHICH HE HIMSELF HAS ADMITTED SH OULD HAVE BEEN GIVEN CREDIT. THAT LEAVES US WITH A BALANCE OF RS. 10 LAKHS ITA NOS. 1195, 1196 & 1197/HYD/14 BODIGA RAMDAS GOUD :- 8 -: FOR WHICH THE ENTRIES IN THE DIARY ITSELF SHOWN THAT HE HAS RECEIVED MORE THAN RS. 24 LAKHS FROM OTHERS. IN VIEW OF THIS, WE ARE OF THE OPINION THAT NO AMOUNT CAN BE BROUGHT TO TAX IN THE HANDS OF ASSESSEE. IN VIEW OF THAT, GROUNDS RAISED BY ASSESSE E ARE ALLOWED. AO IS DIRECTED TO DELETE THE AMOUNT OF RS. 19 LAKHS A S THE SAME WAS RECEIVED FROM OTHERS AS NOTED IN THE DIARY. 13. IN THE RESULT, THIS APPEAL IS ALLOWED. ITA NO. 1197/HYD/2014 (AY. 2008-09): 14. THE ISSUE IN THIS ASSESSMENT YEAR WAS WITH REFER ENCE TO UNEXPLAINED INVESTMENT IN THE HOUSE CONSTRUCTED BY ASSE SSEE. AO HAS NOTED THAT ASSESSEE HAS CONSTRUCTED A HOUSE AND HAS SHOWN AN INVESTMENT OF RS. 15,92,300/-. HE ASKED ASSESSEE V ARIOUS DETAILS. SINCE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT, HE COULD NOT FURNISH THE NECESSARY VOUCHERS. THE B UILDING WAS REFERRED TO VALUATION CELL WHO VALUED THE SAME AT RS. 25,27,165/-. AO HAS BROUGHT THE DIFFERENCE OF AMOUNT OF RS. 9,34,8 65/- AS UNEXPLAINED INVESTMENT OF THE YEAR. 15. BEFORE THE LD.CIT(A), ASSESSEE CONTENDED THAT THER E EXISTED AN OLD HOUSE ON WHICH ONLY FIRST FLOOR WAS C ONSTRUCTED AND THAT TOO IN THE VILLAGE AND SO THE VALUATION BY THE VAL UATION OFFICER ADOPTING CPWD RATES IS NOT CORRECT. ASSESSEE ASKED F OR RELIEF FROM THE VALUATION RELYING ON THE DECISION OF THE ITAT IN TH E CASE OF SALMA A MEHDI , WHEREIN A DEDUCTION OF 15% SHOULD BE ALLOWED ON COST OF CONSTRUCTION ARRIVED AT, IN VIEW OF THE HIGHER RATES ADOPTED BY THE CPWD AND A FURTHER 10% SHOULD BE ALLOWED TOWARD S PERSONAL SUPERVISION. LD.CIT(A) HOWEVER, HAS ONLY ALLOWED 10% ITA NOS. 1195, 1196 & 1197/HYD/14 BODIGA RAMDAS GOUD :- 9 -: REBATE TOWARDS PERSONAL SUPERVISION AND 5% TOWARDS C PWD RATES AS THE CONSTRUCTION ACTIVITY HAPPENED IN THE VILLAGE. THUS, AN AMOUNT OF RS. 3,79,075/- WAS GIVEN RELIEF AND AN AMO UNT OF RS. 5,55,790/- WAS SUSTAINED. ASSESSEE IS AGGRIEVED. 16. LD. COUNSEL REFERRING TO THE DETAILED SUBMISSION S MADE BEFORE THE AO AND CIT(A) SUBMITTED THAT THE HOUSE WAS NOT CONSTRUCTED IN THE YEAR UNDER CONSIDERATION. IT WAS SUB MITTED THAT THE HOUSE WAS CONSTRUCTED OVER A PERIOD AND YEAR-WISE BREAK-UP OF THE INVESTMENT IS AS UNDER: ASST. YEAR AMOUNT IN RS. 2003-04 90,000 2004-05 5,30,000 2005-06 5,84,900 2006-07 2,72,500 2007-08 98,800 2008-09 16,100 TOTAL: 15,92,300 16.1. IT WAS SUBMITTED THAT ONLY FIRST FLOOR WAS MADE OV ER A PERIOD OF SIX YEARS AS AND WHEN ASSESSEE HAS SOME A MOUNT AND THE ENTIRE INVESTMENT WAS RECORDED IN THE STATEMENTS PREPA RED. IT WAS SUBMITTED THAT THE MAJOR INVESTMENT WAS MADE IN AYS. 2 004- 05, 2005-06 AND DURING THE YEAR UNDER CONSIDERATION ONLY RS. 98,800/- WAS SPENT OUT OF THE TOTAL OF RS. 15,92,300/-. IF AT ALL ANY AMOUNT TO BE CONSIDERED AS UNEXPLAINED, ONLY PROPORTI ONATE AMOUNT CAN BE BROUGHT TO TAX, HOWEVER, IT WAS THE CONTEN TION THAT REFERRING TO VALUATION CELL IS NOT APPROPRIATE AS THE HO USE WAS CONSTRUCTED IN A VILLAGE AND BEING SARPANCH, THERE IS NOT MUCH EXPENDITURE ON LABOUR AND MATERIAL. HE ALSO SUBMITTED THAT PLANS WERE APPROVED AND THEY WERE PLACED BEFORE THE AUTHORI TIES. ITA NOS. 1195, 1196 & 1197/HYD/14 BODIGA RAMDAS GOUD :- 10 -: 17. LD. DR HOWEVER, SUBMITTED THAT CIT(A) WAS QUITE LI BERAL IN GRANTING 15% REBATE. 18. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERU SED THE DOCUMENTS PLACED ON RECORD. AS FAR AS THE INVESTME NT IN THE HOUSE IS CONCERNED, THE ADDITION MADE BY THE AO PER SE IS NOT CORRECT IN THE SENSE THAT HOUSE WAS NOT CONSTRUCTED IN ONE ASSESSMENT YEAR BUT OVER A PERIOD OF SEVEN YEARS. AS SESSEE HAS SHOWN CERTAIN INVESTMENTS AND IF ANY ADDITION IS TO B E MADE FOR ANY UNEXPLAINED INVESTMENT, THAT HAS TO BE IN THE SAME PR OPORTION AS WAS SHOWN IN THE YEAR-WISE INVESTMENT. THEREFORE, BRINGING THE ENTIRE AMOUNT TO TAX IN THIS ASSESSMENT YEAR PER SE IS NOT CORRECT. MOREOVER, THE BUILDING WAS CONSTRUCTED IN THE VILLAGE AND ASSESSEE BEING SARPANCH OF THE VILLAGE COULD HAVE INVESTED LE SS, SO HIS CLAIM FOR REBATE NOT ONLY ON THE RATES FOR VALUATION ADOPTED BY THE CPWD BUT ALSO ON THE PERSONAL SUPERVISION ARE APPROPRIATE. WE ARE UNABLE TO UNDERSTAND, WHY LD.CIT(A) RESTRICTED THE REBA TE FOR THE RATES ADOPTED BY THE CPWD TO 5% WHEN ITAT IN VARIOUS C ASES WAS ALLOWING 15% REBATE. FOLLOWING THE CO-ORDINATE BENC H DECISION, WE DIRECT THE AO TO REDUCE THE VALUATION BY 15% FROM THE CPWD RATES AND BY 10% FOR THE PERSONAL SUPERVISION ALREAD Y GRANTED BY THE CIT(A). THEREAFTER, ONLY PROPORTIONATE INVESTMENT PERTAINS TO THIS YEAR SHOULD BE CONSIDERED AS UNEXPLAINED. TO THAT EXTENT, THE ADDITION IS SUSTAINED. ASSESSEE GETS RELIEF PARTIAL LY ON THE GROUNDS. AO IS DIRECTED TO RE-WORK OUT THE UNEXPLAINE D INVESTMENT ACCORDINGLY. WITH THESE DIRECTIONS, THE GROUNDS IN TH IS APPEAL ARE PARTLY ALLOWED. 19. IN THE RESULT, THIS APPEAL IS PARTLY ALLOWED. ITA NOS. 1195, 1196 & 1197/HYD/14 BODIGA RAMDAS GOUD :- 11 -: 20. TO SUM-UP, APPEALS IN ITA NOS. 1195 & 1196/HYD/ 2014 ARE ALLOWED AND APPEAL IN ITA NO. 1197/HYD/2014 IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH DECEMBER, 2016 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 9 TH DECEMBER, 2016 TNMM COPY TO : 1. BODIGA RAMDAS GOUD, PARVATHAPUR, UPPAL, R.R. DIS T., C/O. B. NARSING RAO & CO., CHARTERED ACCOUNTANTS, PLOT N O. 554, ROAD NO. 92, JUBILEE HILLS, HYDERABAD. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL C IRCLE-7, HYDERABAD. 3. THE COMMISSIONER OF INCOME TAX (APPEALS), GUNTUR . 4. THE COMMISSIONER OF INCOME TAX (CENTRAL), HYDERA BAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.