Appeal Details
Counselvise Citation
[2022] 103 COUNSELVISE.COM (IT) 9798 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
5 year(s) 2 month(s) 14 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
24-10-2022
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB-B
Next Hearing Date
16-08-2022
Assessment Year
2008-2009
Appeal Filed On
10-08-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad Before Shri Rama Kanta Panda, Accountant Member AND Shri K.Narasimha Chary, Judicial Member & O R D E R Per Shri Rama Kanta Panda, A.M. ITA No.1256/Hyd/2017 filed by the assessee and ITA No. 1430/Hyd/2017 filed by the Revenue are cross appeals and are ITA No.1256/Hyd/2017 Assessment Year: 2008-09 K.Nagi Reddy, K.Ravinder Reddy & Others L/R of Late K.Muthyam Reddy R/o H.No.4-79, Narsingi Village Gandipet Mandal Ranga Reddy District Telangana-500 089 PAN : AMFPR5915G Vs. DCIT,CC-6 Hyderabad (Appellant) (Respondent) ITA Nos.1430 & 1899/Hyd/2017 Assessment Year: 2008-09 ACIT,Circle-8(1) Room No.605, 6 th Floor Signature Towers Kondapur Hyderabad Vs. K.Nagi Reddy, K.Ravinder Reddy & Others L/R of Late K.Muthyam Reddy R/o H.No.4-79, Narsingi Village Gandipet Mandal Ranga Reddy District Telangana-500 089 PAN : AMFPR5915G (Appellant) (Respondent) Assessee by: Shri K.C.Devdas,CA Revenue by : Shri Y.V.S.T.Sai,CIT-DR Date of hearing: 17.08.2022 Date of pronouncement: 25.10.2022 2 K.Muthyam Reddy directed against the order dated 24.05.2017 of Learned Commissioner of Income tax (Appeals)-2, Hyderabad relating to AY 2008-09. ITA No.1899/Hyd/2017 filed by the Revenue is directed against the order dated 29.09.2017 for AY 2008-09, which is the order giving effect to CIT(A)’s order. For the sake of convenience, all these appeals were heard together and are being disposed-of by this common order. 2. This is the second round of litigation before the Tribunal. Facts of the case, in brief, are that the assessee is an individual and does not have a regular source of income except for income from agriculture. A search and seizure action u/s. 132 of the I.T.Act, 1961 was conducted at the residential premises of the assessee on 17.10.2007. The assessee filed his return of income on 21.10.2009 declaring total income of Rs.6,00,33,915/- which consists of long term capital gain of Rs.5,96,50,115/- and bank interest of Rs.3,83,800/- 3. During the course of assessment proceedings, the AO noted that one Late Mohd. Aleemuddin was the original owner and pattedar of agricultural land to an extent of acres 51-00 of land in Sy.no.262 to 274 of Pappalaguda Village, Rajender Nagar Mandal, Ranga Reddy District. After his demise his legal heirs (1) Mohd. Jamaluddin, (2) Mohd Khairuddin, (3) Mohd. Azeemuddin and (4) Mohd. Kareemuddin succeeded to the said property. Sri K. Muthyam Reddy claimed ownership under an alleged agreement dated 6-7-1974 which is an unregistered document and filed a suit in O.S.No.259 of 1994 on the file of Additional Subordinate Judge, Ranga Reddy District against the above parties. Sri Muthyam Reddy claimed an extent of Acre 25-00 which is a part of the subject property by virtue of the said agreement dated 6-7- 1974 and further claimed rights in respect of the land to an extent of acre 6-10 guntas stated to be purchased in the year 1975 on the basis of a deed of confirmation dated 24-4-1985. He also claimed to an extent of Acre 19-00 having been mortgaged in his 3 K.Muthyam Reddy favour. In all, Sri Muthyam Reddy claimed total extent of Acres 50-00 and on the basis of the above referred documents, he filed a suit for declaration and title and perpetual injunction in O.S.No.259 of 1994 on the file of Additional Subordinate judge, Ranga Reddy District and the said suit was dismissed and the appeal preferred by him against the dismissal of the suit is pending before the Hon'ble High Court being A.S.No.2323 of 2004. The said Mr. K. Muthyam Reddy, also relying on a document stated that he has entered into a compromise with the legal representatives of Aleemuddin wherein an extent of Acres 31-00 of land was agreed to be allotted to Sri K. Muthyam Reddy. It was submitted that the documents seized from the residence of the assessee indicate that the assessee gave hand loans to the owners from 1974 to 1986 on various dates vide page 201 of annexure A/KMR/01 amounting to Rs.1,20,825/- @ 36% per annum. The interest worked out by the assessee is Rs. 9,84,096/-. The loans are given by the assessee after taking the land as security. As the land owners have not repaid the loan he has occupied the land and filed a suit for ownership. It was stated that the above lands were never registered in the name of the assessee till the date of sale to the group company of DLF. Accordingly, it was submitted that the assessee is having certain disputed rights over the above lands. The assessee relinquished all his rights in the above lands in favour of M/s. Demi Realtors, a partnership firm as per the Lok Adalat, Hyderabad order O.S.481 of 2007 and agreed to withdraw the case filed in the Hon'ble High Court of A.P. For relinquishing his rights he entered a MOU with DLF Commercial Developers and Demi Realtors dated 30-06- 2007 as per seized material page 193 to 204 of annexure AAI DSR/01. As per this MOU assessee is to be paid Rs.22,52,50,000/- and land of acres 10-20 guntas from the above lands for relinquishing his rights in the above lands. In this context, it was stated that first assessee will relinquish all the rights in the above lands as per Lok Adalat order in favour of Demi Realtors. As per the above MOU acre 10-20 guntas will be reconveyed to the 4 K.Muthyam Reddy assessee by M/s. Demi Realtors after resolving all the disputes in the above lands. Therefore, in all, the assessee received Rs.22, 52, 50,000/ - and consideration in kind of acres 10-20 guntas for surrendering all his rights in the above land. 4. The AO noted that the assessee in his individual capacity, is having certain rights over the above lands which are his self acquired and therefore, for relinquishment of these rights (though disputed) in the above lands, the entire consideration received of Rs.22,52,50,000/- is taxable in his hands. However, the assessee offered capital gain income in his individual hands and in the names of his wife, daughters and sons to the extent of Rs.21,50,00,000/-. The balance amount of Rs.1,02,50,000/- is not shown in the returns of income filed by the assessee group. He, therefore asked the assessee to explain as to why the entire amount of Rs.22,52,50,000/- should not be taxed in his individual hands instead of partly taxing in his hands and partly in the hands of his family members as the rights over the properties are self acquired one. 5. The assessee submitted that he and his family members have received only Rs.21 crores as against the Rs.22,52,50,000/- mentioned in the MOU. Therefore, only the amount of Rs.21 crores is to be taxed. It was submitted that the family members have received the consideration as parties to the document executed on transfer of the property to DLF. Hence, the amount received from DLF is to be taxed in the hands of the respective recipient hands and not totally in his hands. 6. However, the AO rejected the explanation of the assessee and made addition of Rs.14,52,50,000/- to the total income of the assessee by observing as under:- 5 K.Muthyam Reddy (i)As per the above MOU the assessee is to receive Rs.22,52,50,000/- which is duly signed by the assessee, Demi Realtors and DLF group company. The assessee has not produced any evidence to prove that the balance amount of Rs.1,52,50,000/- is not received by him. The said MOU is not terminated and the registration was done based on this MOU. The consideration is therefore payable either to the assessee or to the nominees of the assessee, as specified by him. (ii) The assessee has not filed any confirmation from the DLF group company that the assessee has not received the full consideration mentioned in the MOU and has received only Rs.21.50 crores. (iii) Even if the full amount of Rs.22,52,50,000/- stated as per the MOU is not received, the balance amount is taxable on due basis, as sale deed is already registered and the sale stands completed in this case. (iv) In view of the provisions of section 132(4A) the documents seized during the course of search are presumed to be true and correct. Reference may be made to the decision of Hon'ble Kerala High Court in the case of Kerala Liquor Corporation Vs. CIT [ 222 ITR 333, 343J. Similar ratio was laid down in the context of block assessment proceedings by the Hon'ble ITAT, Madras in the case of T.S. Kumarasamy Vs. ACIT [ 65 ITO 188]. It is also held by the Hon'ble ITAT, Hyderabad in a Third Member decision in the case of Smt. Kesari Bai Vs. ITO [ 32 ITO 1] (HYD)(TM). This ratio was reconfirmed by the Hon'ble ITAT, Mumbai in the case of P.R. Patel Vs. DCIT (78 ITD 51). (v) Regarding taxability of the entire amount in the hands of the assessee there is no merit in the assessee's reply as the consideration is to be taxed only in the hands of the persons who have rights over the lands. The assessee has not filed any document to prove that his family members have any rights in the lands sold to the DLF group company. Mere mention of the family members names in the transfer document does not entitle them for any rights in the property. Further, if the assessee alone who had spent amount (claimed by him as cost of acquisition) for earning these rights. 6.1 Considering the above reasons the AO taxed the entire amount of Rs.22,52,50,000/- received from the DLF Company in the hands of the assessee on Substantive basis. After excluding the amount of Rs.8,00,00,000/- which the assessee has already offered in his return of income, the AO added the balance amount of Rs.14,52,50,000/- to the total income of the assessee. 7. The AO further noted that the assessee claimed in his return of income cost of acquisition with indexation benefit of Rs.3,49,885/-. However, since the entire amount of capital gain is taxed in the hands of the assessee, he held that the full cost of acquisition of these lands 6 K.Muthyam Reddy has to be allowed in the hands of the assessee. The assessee in his submissions claimed that the total cost paid by him for acquisition of the above lands is Rs.31,40,825/-. He claimed that along with indexation the cost of acquisition is to be allowed in his hands at Rs.35,70,194/-. According to the AO, the assessee is not the absolute owner of the lands, he only has some rights though disputed over the subject lands which were relinquished by him in favour of DLF. Therefore, the indexation benefit is not available to the assessee. Further, the acquisition cost claimed by the assessee was verified by him with reference to the seized material as per page 201 of the annexure A/KMR/01 which was found to be correct. Hence, he rejected the claim of the assessee for indexation benefit and taxed the sale consideration of the entire lands in the hands of the assessee. However, he allowed the entire cost paid by the assessee for the above lands amounting' to Rs.31,40,825/- in computing the capital gains income. As the assessee has already claimed an amount of Rs.3,49,885/- in the return of Income, the balance amount of Rs.27,90,940/- was allowed additionally to the assessee in computing the capital gains. Thus the AO effectively made addition of Rs.14,24,59,060 ( i.e. Rs.14,52,50,000-Rs.27,90,940) 8. The AO further noted that as per the seized documents from page no.19 to 38 of annexure A/DSKR/SR/03, the assessee and his family members received cash of Rs.16.03 crores from Demi Realtors in connection with sale of the above lands. As per the seized material, the details of the cash received by the assessee and his family are as under: Sr.No. Name of the parties Cash payment (Rs.) Reference to seized material A/DSKR/SR/03 1 Y.Jayamma(landlord) 50,00,000 Page No.37,38 2 K.Anjamma(landlord) 1,25,00,000 Page No.35,36 3 K.Mutyam 6,00,00,000 Page 7 K.Muthyam Reddy Reddy(landlord) No.32,33,34 4 K.Kavita(landlord) 50,00,000 Page No.30,31 5 P.Aruna(landlord) 50,00,000 Page No.28,29 6 A.shobha(landlord) 50,00,000 Page No.26,27 7 A.Rani(landlord) 50,00,000 Page No.24,25 8 K.chandana(landlord) 2,31,00,000 Page No.22,23 9 K.Nagi Reddy(landlord) 1,16,00,000 Page No.21 10 K.Ranga Reddy(landlord) 1,15,50,000 Page No.20 11 K.Ravinder Reddy(landlord) 1,15,50,000 Page No.19 12 K.Rathangapani Reddy 50,00,00,000 Page No.67 Total 16,03,00,000 8.1 He, therefore, asked the assessee to explain as to why the above cash receipts should not be added to the total income of the assessee. The assessee submitted that he has not received any cash amount from M/s Demi Realtors and DDs of Rs.8 crores alone are received. He further stated that page nos.19 to 38 of the annexure A/DSKR/SR/03, wherein the vouchers were found and seized in the course of search in the case of Demi Realtors, are the same part receipts that were given by him, on receipt of Rs.21 crores DDs and they are not additional receipts. He further stated that during the course of search, department has not found any material to support the payment of cash to him. 8.2 However, the AO rejected the explanation of the assessee and made addition of Rs.16,03,00,000/- on substantive basis in the hands of the assessee by recording the following reasons: (i) In the submissions made by Demi Realtors on 5-11-2007, it was claimed that it has paid certain consideration in cash and through cheques /DD/ as well to certain persons over and above the consideration recorded in the sale deed for the transaction under consideration. The receipts were obtained after such payments to them. M/s. Demi Realtors also submitted list of such persons who have been paid in cash and through cheque/DD. As per the 8 K.Muthyam Reddy submission M/s. Demi Realtors has paid Rs.16.03 crores to Mr. Mutyam Reddy and his relatives. (ii) The receipts seized in original from the premises of M/s. Demi Realtors clearly indicate that they were issued on receipt of part consideration in cash, by the taxpayer. (iii) The receipts pertains to not only Mr. Muthyam Reddy and his family members but also to others like, Mr. Thakur Jagat Singh, Mr. Mirza Iqbal Ahmed and others, Mr. V. Ramachander Rao, Mr. Shafiuddin, Mr. Moinuddin, etc. All of them other than Mr. Muthyam Reddy and family have admitted the receipt of cash as indicated in the seized receipts. Thus, it is clear that M/s.Demi Realtors has paid part of the consideration, that is not recorded in the sale deed, in cash to certain people in connection with the transaction. Since the signing on the receipt is accepted by Mr. Muthyam Reddy and his family members and also all other persons accepted the cash receipt signed by them, the evidentiary value of the cash receipts cannot be ignored. Therefore, it is to be concluded that the consideration recorded in the sale deed alone is not the full and actual consideration. (iv) Assuming but not conceding that the receipts were signed by Mr. Muthyam Reddy and others for receipt of demand drafts mentioned in the sale deed but not cash as mentioned in the receipts, the total amount should add up to Rs.21.5 crores, which is the consideration admitted by the group as recorded in the sale deed paid through separate D. Ds. However, the total amount mentioned in the cash receipts seized is only Rs. 16.03 crores but not Rs.21. 5 crores. Therefore, these receipts are to be treated to have been issued for having received the cash as mentioned in these receipts from Demi Realtors. (v) If it were to be assumed that the receipts are relating to the payments through demand drafts mentioned in the registered sale deed, all other groups of owners/claimants should have also issued such receipts for the payments made to them as per the sale deed. However, as discovered in the search, only those who have received payments other than those mentioned in the sale deed alone have issued receipts which were found and seized in the search. In this context, it needs to be noted that the registered sale deed, containing the signatures of all the persons concerned, clearly states that all the payments mentioned in it have been paid. Therefore, there is no necessity for issuing separate receipts for the payments recorded in the sale deed. It is submitted that those who have received only DDs have not issued any separate cash receipt to the Demi Realtors. (vi) The mere fact thot. the search did not unearthing any cash in the premises pertaining to the group cannot be a reason for denying receipt of cash which is otherwise vouched by receipts issued by 9 K.Muthyam Reddy them. In this context, it is pertinent to take cognizance of the absence of Mr. Muthyam Reddy and all persons during the course of the search on 17-10-2007. They were all stated to have left home for unknown destinations before the search party reached the premises and did not return till the search was concluded for the day. Also, the geography of the location of the house of Mr. Muthyam Reddy and his relatives indicates that they Can keep cash in any nearby house belonging to them and could have taken the cash and stashed away on the date of the search itself. Further, there is a possibility that they could have Invested elsewhere all this cash prior to the search operation. Thus, the contention of the assessee does not merit any consideration. (vii) The firm Demi Realtors accounted these cash payments in its books of account and claimed it as expenditure. (viii) In view of the provisions of section 132(4A) the documents seized during the course of search are presumed to be true and correct. Reference may be made to the decision of Hon'ble Kerala High Court in the case of Kerala ,Liquor Corporation Vs. CIT ( 222 ITR 333, 343J. Similar ratio was laid down in the context of block assessment proceedings by the Hon'ble IT AT, Madras in the case of T.S. Kumarasamy Vs. ACIT f 65 ITO 188J. It is also held by the Hon’ble ITAT, Hyderabad in a Third Member decision in the case of Smt. ' Kesari Bai Vs. ITO [ 32 ITO 1] (HYO)(TM). This ratio was reconfirmed by the Hon'ble ITAT, Mumbai in the case of P.R. Patel Vs. DCIT (78 ITO 51). 8.3 While making the above addition, the AO further noted that the assessee and his family members have received cash as indicated in the material seized in the search, apart from the payments received through demand drafts on account of this transaction. The entire amount is to be taxed in the hands of the assessee only as his family members have no rights in the lands. Accordingly, he taxed the amount of Rs.16,03,00,000/- received by the assessee and his family members as per the cash receipts found in the hands of the assessee on 'Substantive Basis'. 9. The AO observed that during the course of the search proceedings, an agreement of sale executed by the assessee and his sons in favour of M/s. Sri Durga Estates was found and seized from the residence of 10 K.Muthyam Reddy the assessee and placed at page no.208 to 213 of the annexure A/KMR/l. As per the agreement M/s. Sri Durga Estates paid Rs.15 lakhs in cash and Rs,10 lakhs through cheques to the assessee on 8- 5-2006 towards advance for purchasing the above lands. The assessee also received post dated cheques of Rs.25 lacs which are payable before May, 2006. However, Mr. B.C Janardhan Reddy,Managing Partner of M/s. Sri Durga Estates stated that his firm has paid Rs.50 lakhs in total. Since this amount was forfeited by the assessee, the AO was of the opinion that this should be added to the total sale consideration received or alternatively to be reduced from the cost of acquisition. As these lands are finally sold to the DLF group company during the period relevant to the Asst. Year 2008-09, these amounts are liable to be taxed in the Asst. Year 2008-09. He, therefore, confronted the same to the assessee. The assessee submitted that the above advances are repaid back to them. However, in absence of production of any evidence to substantiate his explanation and in absence of any confirmations, the AO made addition of the amount of Rs.50,00,000/- received from Sri Durga Estates in the hands of the assessee and added to the total Income of the assessee. 10. The AO further noted that as per seized material page 193 to 204 of annexure. AA/DSR/01, the assessee has entered a MOU with DLF company and Demi Realtors dated 30-06-2007, according to which the assessee is to receive Rs.22,52,50,000/- and land of 10 acres and 20 guntas in Sy. No.263 to 270 situated at Puppalaguda Village, Rajender Nagar MandaI, R. R. District for relinquishing his rights in the lands. He noted that for relinquishing his rights in the lands/properties, the assessee has received the consideration partly in cash, partly in DDs and partly in kind. The consideration received in kind of acres 10-20 guntas from Demi Realtors was registered in the name of the Sri Ratangapani Reddy, son-in-law of the assessee as per the request of the assessee. The assessee has not shown the 11 K.Muthyam Reddy value of the consideration received in kind in his return of income. He noted that the value paid by Demi Realtors for acquiring the lands which are transferred to the assessee is Rs. 4.20 crores per acre. However, the market value of these lands is Rs.12.50 crores per acre. These lands are purchased by the DLF group company @ Rs.12.50 crores per acres from Demi Realtors on 22-08-2007. On the same date these lands are transferred in the name of Sri Ratangapani Reddy as per the request of the assessee. Accordingly, the total market value of these lands comes to Rs.131,25,00,000/- as on the date of sale. The AO therefore was of the opinion that the consideration received in kind of Rs.131,25,00,000/- is to be taxed in the hands of the assessee on 'Substantive 'basis'. He, therefore, asked the assessee to explain as to why the above consideration received in kind should not be added to the total income of the assessee. 10.1 The assessee submitted that he is the owner of lands of 51.29 acres in Sy.Nos.262 to 274, Puppalaguda Village, Rajender Nagar Mandai, R.R. District. After the sale of lands to the DLF group companies and Sri S. Narayana Reddy and others he is the owner for the balance lands. To avoid disputes from the various claimants, the land was transferred in the name of Demi Realtors which was re- conveyed in the name of Sri Ratangapani Reddy, son-in-law of, the assessee as per the request of the assessee. Therefore, the addition is not warranted for the reason that the registering of Acre 10-20 guntas in favour of his son in law does not result in any additional consideration to him as he is the owner of this land from the beginning. 10.2 However, the AO was not satisfied with the arguments advanced by the assessee. He noted that the assessee is having only certain disputed rights in the above lands and he never became the owner of the lands and these lands are never registered in his name. Therefore, for surrendering of his disputed rights over the above lands, the 12 K.Muthyam Reddy amounts received by the assessee in cash, cheque or in kind has to be treated as total consideration for the transaction. He, therefore added Rs. 131,25,00,000/- in the hands of the assessee on 'Substantive Basis'. 11. The AO noted that the assessee claimed 54B exemption for purchase of agricultural lands of Rs.. 7,83,565/ - which are registered and similarly 54B exemption claimed on advance paid towards agricultural lands of Rs.75,00,000/- from the capital gains income. However, the ld.Counsel for the assessee did not press the grounds challenging the denial of 54B exemption. Therefore, we are not concerned with the same. 12. The AO similarly observed that the assessee claimed 54F exemption of Rs.1,17, 16,435/-. From the details furnished, he noted that the assessee has purchased a house for Rs.32,30,350/- which includes registration charges. The assessee has claimed additional construction expenditure of Rs.84,86,085/- on this house. The assessee submitted that he has not maintained any evidence or bills for the construction expenditure and requested to take the cash withdrawal as evidence. In absence of any evidence regarding construction expenditure, the AO disallowed the claim of the assessee of Rs.84,86,085/- and added the AO added the same to the total income of the assessee. 13. The AO accordingly determined the total income of the assessee at Rs.169,70,62,625/-, out of which, an amount of Rs. 3,83,800/- was “income from other sources” and the balance amount was “income from long term capital gains”. 14. Before the ld.CIT(A), the assessee apart from challenging the various additions on merit raised certain additional grounds along 13 K.Muthyam Reddy with application under Rule 46A in support of the additional grounds by raising the following issues. 1. That the land is not a capital asset exigible to tax being agricultural land; 2. Without prejudice to other grounds that the consideration received from Demi Realtors are mere capital receipts not exigible to tax. 3. That the Ld.AO erred in taxing the sum of Rs.131.25 Crores as consideration in Kind since no income could be said to accrue or arise when the Assessees always claimed the right in the land. 15. The assessee also filed a petition dated 03.10.2010 requesting the ld.CIT(A) to afford necessary opportunity to cross examine M/s. Demi Realtors who claimed to have paid Rs.16,03,00,000/- in cash over and above the amount mentioned in the Lok Adalat order and also made a request to make available the documents relied by the AO in respect of the addition for the purpose of cross examination. 16. Based on the arguments advanced by the assessee, the ld.CIT(A) disposed of the appeal on 4.01.2011 without adjudicating the additional grounds and admission of the additional evidences filed by the assessee, wherein he confirmed the following additions * Out of the first addition of Rs.14,24,59,060/-deleted the addition of Rs.13,00,00,000/- as he had confirmed the addition of the said amount substantively in the hands of the family members and sustained the addition of Rs. 1,52,50,000/- in the hands of the assessee. The amount of Rs.1,52,50,000/-represents amount not received by the assessee but mentioned in the MOU entered with Demi Realtors. * Out of the addition of Rs.16,03,00,000/- Confirmed the addition of Rs.6,00,00,000/- in the hands of the assessee and the balance amount of Rs.10,03,00,000/- was confirmed substantively in the hands of the family members whose names appeared in the receipts. * Confirmed the addition of Rs.131.25 Crores being land of Acres 10.20 Guntas registered in the name of K.Ratnagapani and added in the hands of assessee on substantive basis. * Set aside the addition of Rs.50,00,000/- being advance from M/s.Durga Estates to the AO for verification of the receipt filed by the assessee having returned the advance. 14 K.Muthyam Reddy *Confirmed the disallowance of exemption claimed under section 54B of the Income Tax Act 1961 ('the Act')for purchase of agricultural lands - Rs.82,83,565/-. * Confirmed the disallowance of exemption claimed under section 54F of the Act-Rs.84,86,085/-. 17. Aggrieved by the order of the ld.CIT(A), the assessee as well as revenue filed appeal before the Tribunal and the Tribunal vide order dated 25.05.2014 set aside the issue to the file of the ld.CIT(A) for de novo hearing after recording the following findings for the additional grounds of the appeal raised before it and also the additional evidences relied in support of the contentions raised by observing as under:- 8.The facts of the case are that there was search and seizure operations in the group and consequently proceedings under section 153A were initiated. Assessee contended that what they have sold is agricultural land and they have agricultural incomes. However, A.O. neither accepted the agricultural income nor gave credit to the source shown for various deposits in the bank accounts and as seen from the orders quoted above, the issue in other group has been restored to CIT(A) as a whole for deciding the appeals denovo. Moreover, the finding on the land subsequently sold in A.Y. 2003-04/2008-09 has a bearing on the claim of agricultural income in earlier years and also source of income which was brought to tax as unexplained cash credits. It was admitted that the additional grounds raised are not adjudicated by the Ld. CIT(A). In view of this, we are of the opinion that all these appeals are to be set aside to the file of the Ld. CIT(A) and Ld. CIT(A) shall pass denovo appellate orders on all the issues before him, after recording his findings on the additional grounds of appeal raised before him and also any additional evidence that may be placed in support of the contentions. Therefore, the orders of the CIT(A) are set aside and all these appeals are restored to his file. The relevant grounds are considered allowed for statistical purposes. 17.1 The ld.CIT(A) in the set aside proceedings after hearing the assessee and on the basis of submissions made before him held as under:- a) That the consideration received from DLF of Rs.8,00,00,000/- and Rs.1,52,50,000/- are in the nature of Capital Receipt not exigible to capital gains b) Deleted the addition of Rs.131.25 Crores being land of Acres 10.20 Guntas registered in the name of K.Ratnagapani and added in the hands of assessee on substantive basis holding the same as capital receipt. 15 K.Muthyam Reddy c) Confirmed the addition of Rs.16.03 Crores in the hands of the assessee d) No discussion about the amount of Rs.13 crores received by the family members which is part of the amount of Rs.22.50 crores. e) With respect to disallowance of exemption of Rs.82,83,565/- under section 54B of the Act and Rs.84,86,085/- claimed under section 54F of the Act, the CIT(A) held the same would be academic since the consideration received from Demi Realtors/DLF was held to be capital receipts not taxable under the Act- f) Did not adjudicate on the addition of Rs.50,00,000/- being advance from M/s, Durga Estates which was set aside by the earlier CIT(A) to the AO for verification of the receipt filed by the assessee confirming the return of advance. g) Dismissed the additional ground raised by the assessee that the subject land as agricultural land 18. Aggrieved by the order of the ld.CIT(A), dated 24.05.2017, the assessee as well as the revenue are in appeal before the Tribunal by raising the following grounds. ITA No.1430/Hyd2017 for AY 2008-09 (by Revenue) 19. The grounds of appeal raised by revenue are as under:- 1) The CIT(A) erred both on facts of the case and in law 2) The CIT(A) ought to have sustained the income of the amount of Rs. 8 Crore which the assessee himself has admitted as the consideration from sale of lands and from such income declared an amount of Rs. 5,95,50,115/- as taxable capital gains in the return of income filed by him. 3) The CIT(A) erred in treating the amount of Rs. 8 Crore as not taxable terming the same as capital receipt and concurring with the assessee's submissions that there was no transfer of capital asset. However as per the return of income the assessee himself admitted Rs 5,95,50,195/- as capital gains after claiming exemption U/s 548 and 54F from Rs 8 crores. 4) The CIT(A) ought to have appreciated the facts of the case and the issue of assessee's connection to the land and the suit filed by the assessee for ownership of the land. Further, the CIT(A) ought to have sustained the addition based on the fact that the assessee had entered into the MOU with Mis. Demi Realtors for relinquishing his rights on the land. 16 K.Muthyam Reddy 5) The CIT(A) failed to appreciate that contract for sale of land is capable of specific performance and is also assignable and hence it is a property and capital asset. 6) The CIT(A) erred on facts in directing to delete the amount of Rs. 1,52,50,000/- which the assessee received/receivable as per the MOU entered by the assessee with Mis Demi realtors and Mis DLF Commercial Developers. 7) The CIT(A) ought to have concluded the discussion and sustained the addition of Rs 13,00,00,000/- which is part of Rs 22,52,50,000/- received by the assessee as per MOU entered by the assessee with Mis Demi realtors and Mis DLF Commercial Developers. 8) The CIT(A) ought to have concluded the discussion and sustained the addition of Rs 50,00,000/- which has been received from Mis Durga estates. 9) The CIT(A) erred in deleting the addition of Rs 131,25,00,000/-. The CIT(A) ought to have appreciated the fact that the assessee has received the monitory consideration and also Ac 10-20 guntas as per the MOU entered by the assessee with Mis DLF company and Mis Demi realtors for relinquishing his disputed rights over the property and it was a part of the whole transaction. 10) The CIT(A) erred in facts of the case by allowing and not discussing the exemptions claimed U/s 54B and 54F of Rs 82,83,565/- and Rs 84,86,085/respectively concluding that it was academic, as it was held that the amount received by the assessee on account of relinquishing the disputed rights on the lands cannot be taxed under capital gains. The CIT(A) ought to have treated the amount of Rs 8 crores as the consideration received on transfer of capital asset and the same as subject to capital gains. ITA No.1899/Hyd/2017 for AY 2008-09( by Revenue) 20. The grounds of appeal raised by revenue are as under:- 1) The CIT(A) erred both on facts of the case and in law 2) The CIT(A) ought to have appreciated the facts of the case and the issue of assessee's connection to the land and the suit filed by the assessee for ownership of the land. Further, the CIT(A) ought to have sustained the addition based on the fact that the assessee had entered into the MOU with Mis. Demi Realtors for relinquishing his rights on the land. 3) The CIT(A) failed to appreciate that contract for sale of land is capable of specific performance and is also assignable and hence it is a property and capital asset. 4) The CIT(A) ought to have concluded the discussion and sustained the addition of Rs 13,00,00,000/- which is part of Rs 22,52,50,000/received by the assessee as per MOU entered by the assessee with Mis Demi realtors and Mis DLF Commercial Developers. 17 K.Muthyam Reddy 5) The CIT(A) failed to appreciate the fact that the CIT(A) in the earlier order dated 24-05-2017 has not given any relief regarding addition of Rs 13,00,00,000/-. 6) Any other ground that may be urged at the time of hearing. ITA No.1256/Hyd/2017 for AY 2008-09 (by Assessee) 21. The grounds of appeal raised by the assessee are as under:- 1. On the facts and in the circumstances of the case and position of law, Learned CIT (A)-2 erred in confirming the addition of Rs.16.03 Crores made by the assessing officer on account of alleged receipt of cash from Demi Realtors. 2. Learned CIT (A)-2 failed to appreciate that non affording of opportunity to cross examine DEMI Realtors who alleged to have paid cash, despite repeated requests by the appellant before the AO as also before CIT(A)'s, makes the order void following judicial precedents of the Apex Court and various High Courts which were pointed out in the submission. 3. Learned CIT (A)-2 ought to have appreciated that the alleged receipts were forged and fabricated and were not recovered from the premises of the appellant in Course of search to apply any presumption under section 132( 4A)/292C as done by AO. 4. Learned CIT (A)-2 having held that the receipt of amount from DLF through Demi Realtors is neither assessable under the head capital gain as per the Provisions of the Act and being in the nature of a capital receipt not assessable, ought not have confirmed the addition. This is against the Provisions of law and evidences available in the case. 5. Without prejudice to the above grounds the Learned CIT(A)-2 should not have confirmed the alleged entire cash receipts of Rs.16.03 Crores, when Rs.l0.03 Crores was held to be assessed in the hands of family members substantively by Learned CIT(A)-l, Hyderabad vide order dated 4th JanuarY,2011. In effect the Present Order of Learned CIT(A)-2 dated 24th May,2017 should have been limited to confirmation of addition of Rs.6.00 Crores only. 6. When Rs.13.00 Crores was held to be assessed in the hands of family members substantively by Learned CIT(A)-l, Hyderabad vide order dated 4th January,2011, In Present Appeal Order dated 24" May,2017 the Learned CIT(A)-2 should have also made a specific direction to delete Rs.13.00 Crores along with Rs.8,00,00,000/- and Rs.1,52,50,000/-, being the present Appeal Order is denova Appellate Order. 7. When Rs.50 Lakhs Repaid to Sri Durga Estates was earlier ordered by Learned CIT(A)-l, Hyderabad vide order dated 4" January ,2011 by giving direction to the Assessing officer to verify and delete, in Present Appeal Order dated 24" May,2017 the Learned CIT(A)-2 should have also made a specific 18 K.Muthyam Reddy direction to the Assessing officer to verify and delete Rs.50 Lakhs, being the present Appeal Order is denova Appellate Order. 8. The appellant craves to add/alter/merely any of the grounds as may be necessary for adjudication of the case. 22. The assessee also raised following additional grounds:- 1. The Learned the Commissioner of Income tax Appeals -2, Hyderabad ['Ld.CIT (A) erred in holding that the capital asset in question is not agricultural lands within the meaning of section 2( 14) of the Income Tax Act 1961 ('the Act'). 2. Without prejudice to ground no 7 raised in the original grounds of appeal, the Ld.CIT (A) ought to have directed that the advance of Rs.50,00,000/- received from Durga Estates to be assessed proportionately in the hands of the co-owners. 3. The Ld.CIT (A) having held the receipt to be a capital receipt not exigible to income tax failed to note that even otherwise the consideration is not taxable as the machinery provisions for computation of capital gains fail as there is no cost of acquisition for giving up the legal rights in continuing to pursue the court cases / suits in the courts of law. 22.1. So far as the additional ground of appeal No.1 is concerned, the ld. counsel for the assessee did not press the ground for which the ld. DR has no objection. So far as the additional grounds No.2 is concerned, the ld. Counsel for the assessee submitted that this is an advanced version of the ground No.7 raised by the assessee in the grounds of appeal. So far as additional ground of appeal No.3 is concerned, he submitted that since all the material facts necessary for adjudication of the additional grounds are already on record, therefore, in view of the decision of Hon’ble Supreme Court in the case of NTPC Ltd. reported in 229 ITR 383 and Jute Corporate of India Ltd. reported in 187 ITR 688, the additional grounds raised by the assessee should be admitted for adjudication. 23. The ld. DR on the other hand strongly opposed the admission of the additional grounds. 19 K.Muthyam Reddy 24. After hearing both the sides and considering the fact that all material facts necessary for adjudication of the additional grounds are already available on record, therefore, the additional grounds raised by the assessee are admitted for adjudication. 25. Grounds of appeal No.1 and 6 by the revenue and grounds of appeal No.8 by the assessee being general in nature are dismissed. 25.1 Ground No. 2 to 5 filed by the revenue in ITA No.1430/Hyd/2017 and grounds of appeal No. 3 to 5 in ITA No.1899/Hyd/2017 and additional ground No.3 by assessee relate to the taxability of the gain arising out of the transfer of the land. 25.2. The learned DR submitted that in ITA No. 1430/H/17 filed by the Department the ground nos. 2 to 7 are on this issue and in the appeal of the assessee in ITA 1256/H17, the issue figures in ground nos. 2 to 7 on this issue. He submitted that perusal of the grounds filed by the Department and the assessee clearly indicates that the order of the CIT(A) is amenable to different interpretations. 26. The learned DR strongly challenged the order of the learned CIT(A) in granting relief to the assessee. He submitted that CIT(A) while considering the issue in the set aside proceedings, simply reproduced the submissions of the assessee but did not record a finding on the admissibility of the additional grounds, especially ground no. 3. The U turn taken by the assessee in the form of additional ground with limited scope was not entertainable but the learned CIT(A) failed to record any finding on the issue despite clear directions of the ITAT in the set aside order nor did he call for the response of the AO on the additional grounds. The CIT(A) simply accepted the arguments of the assessee and held that the receipts were not taxable after recording a convoluted finding that the rights of the assessee are uncrystallized, not definite, the sale consideration 20 K.Muthyam Reddy was not ascertainable and the cost of acquisition cannot be determined. He submitted that the order of the CIT(A) is perverse to the extent that even while granting the relief, the CIT(A) granted relief of 8 Crore and 1,52,50,000/- though the addition in assessment order was of 14,24,59,060/-. He submitted that the CIT(A) also did not record any finding on the issue of income returned by the assessee. 27. The ld. DR referring to paragraph 5.12 of CBDT circular No. 549 dated 31.10.1989 submitted that under the new scheme of assessment introduced from 01/04/1989 through Direct Tax Laws (Amendment Act), 1987- I1, it is not possible to assess the income below the returned income or the loss below the returned loss. He submitted that even when an assessment is set aside or nullified, the returned income cannot be reduced. For the above proposition, he relied on the decision of the Hon'ble Supreme Court in the case of Shelly Products (129 Taxman 271). He accordingly submitted that it was not proper on the part of the CIT(A) to hold that the receipts which are part of the returned income are also not taxable. 28. So far as the decision of the CIT(A) that the rights of the assessee are uncrystallized and not capable of ascertainment is concerned, he submitted that property is the term of widest import and it is not necessary that a transfer u/s 2(47) is confined only to absolute rights of ownership. He submitted that any right including the disputed right or relinquishment of a right in a property would be taxable u/s 45 of the IT Act. For the above proposition, he relied on the decision of Hon'ble Supreme court in the case of Ahmed G.H. Ariff (76 ITR 471). 29. Referring to the decision of Hon’ble Mandhya Pradesh High Court in the case of Smt. LaxmiDevi Ratani reported in 147 taxman 642, he submitted that the Hon'ble High Court in the above decision has held 21 K.Muthyam Reddy that giving up of right to claim specific performance by assessee to get conveyance of immovable property in lieu of receipt resulted in extinguishment of right in property. He submitted that situation of the assessee is identical to the case of Smt. Laxmi Devi Ratani and the assessee here also relinquished his right in property in lieu of consideration. 30. Referring to the decision of the Coordinate Bench of the Tribunal in the case of M/s. Andhra Networks Ltd (57 taxmann.com 115), he submitted that the Tribunal in the said decision has held that any transaction which has the effect of transferring or enabling any enjoyment of any immovable property is covered by the definition of transfer. He accordingly submitted that in view of the above decisions, relinquishment of right or claim in a property constitutes transfer of capital asset under the Income Tax Act. Referring to Clause 14 of the compromise agreement, available at page 280 of the paper book filed by the assessee, he submitted that the compromise petition before the Lok Adalat which is sanctioned by the Lok Adalat in the form of award clearly indicates that the assessee agreed to withdraw AS No. 2323/2004 filed by him before the Hon'ble High Court of Andhra Pradesh as part of the compromise agreement relinquishing his right over the property. The argument that there is no transfer or relinquishment of right in land is also contrary to the MOU between the assessee and M/s Demi Realtors/M/s DLF Commercial Pvt Ltd. He submitted that at clauses C to F of the MOU, it is stated that the assessee acquired rights and interest over total extent of 51 acre of the land. As per Article 2 of the MOU also the ownership of the assessee is confirmed. As per the MOU only the assessee received the sale consideration which is disclosed in different hands in returns of income. He submitted that even as per the copies of Adangal/Pahanis filed by the assessee, it is shown that the assessee is in enjoyment of part of the lands. Therefore, the argument made by the assessee that he does not own any right in the 22 K.Muthyam Reddy land and that the compromise before Lok Adalat and the consideration received as per MOU are mere capital receipts not assessable to tax is self-contradictory. 31. The ld. DR submitted that it is also incorrect on the part of the CIT(A) to state that the right of the assessee in the property was uncrystallized and incapable of valuation and also the cost of acquisition is indeterminate. He submitted that such finding runs contrary to the facts on record evident from the return filed by the assessee. In the computation of income filed along with the return, the assessee quantified the cost of acquisition as well as claimed indexation. The sale consideration was also quantified. In such a case, the CIT(A) should not have accepted the argument that the computation provisions fail and therefore charging provision also fails. 32. He submitted that the CIT(A) was incorrect in stating that the contract for sale of land is incapable of specific performance. It is also incorrect on the part of the CIT(A) to hold that the award of Lok Adalat does not specify the reasons for making different payments to various claimants. He submitted that a compromise was agreed upon by all the claimants over the land so that the land can be transferred in favor of M/s Demi Realtors and DLF. It was a decision of all the claimants arrived through consensus to receive different amounts in different sales depending on the intensity of the claims. In any compromise, the amount would be determined by consensus through negotiation amongst the claimants. This was a voluntary act on part of all claimants. The Lok Adalat passed the award in tune with the compromise petition. The CIT(A) misconceived the whole issue and stated that as if an award was thrust upon the claimants without any basis. Therefore, the findings of the CIT(A) on this point are incorrect. He accordingly submitted that the order of Ld.CIT(A) be set aside on this issue and grounds filed by the Revenue should be allowed and 23 K.Muthyam Reddy the grounds filed by the assessee on this issue be dismissed. He also relied on various other decisions. 33. So far the grounds of appeal No. 2 to 5 raised by the revenue are concerned, the ld. Counsel for the assessee strongly supported the order of the ld.CIT(A) in deleting the addition made by the AO treating the entire receipt as capital in nature not exigible to tax. He submitted that the assessee is not the owner of the land as per the decision of the Lokadalat and therefore the assessee has no right in the property. It has only received the compensation. Referring to the provision to section 2(14) of the I.T.Act he submitted that such disputed right over the property is not property as per the definition. 34. Without prejudice to the above, the ld. Counsel for the assessee submitted that if at all the assessee had some rights then the cost of such acquisition has to be ascertained. Since there is no cost, there is no capital gain as the assessee is not the owner of the property. For the above proposition, he relied on decision of the Hon’ble Supreme court in the case of B.C Srinivasa Setty reported in 128 ITR 294. 35. He submitted that the mere fact that assessee had shown income from capital gain in the return under incorrect legal advise shall not be treated as concession to tax the income on the basis of such legally unteanable premises. Such an action cannot be treated as binding on the assessee on the basis of judicial precedents. For the above proposition, he relied on the decision of Hon’ble Supreme Court in the case of CIT vs. VMRP Firm reported in 56 ITR 67. He reiterated that the assessee cannot be tied down to a wrong concession made in the return. Referring to the decision of Hon’ble Supreme court in the case of A.Venkata Ramanaiah reported in 57 ITR 185, he submitted that the Hon’ble Supreme Court in the said decision has affirmed the principle that merely because the assessee himself has written the sum of Rs.79,494 under the head capital gain 24 K.Muthyam Reddy leads us to nowhere. "He might have done it under the advice of some 'income-tax expert'. It was held that the assessee cannot be tied down to an inadvisably made wrong statement. Accordingly, the addition was deleted. He submitted that in the instant case, the capital gain was declared in the return under incorrect advice of the tax expert. Therefore, this cannot be taken as a concession to the revenue to tax the same as the amount is not taxable under law. Referring to various other decisions, he submitted that despite the mistake committed by the assessee in showing the income from capital gain, the AO should have appreciated the fact in the correct legal perspective and made assessment as per law. 36. So far as the decision of Hon’ble Supreme court in the case of CIT vs Shelly Products reported in 129 Taxmann 271 (SC) relied on by the ld.CIT-DR is concerned, he submitted that the decision in that case refers to claim of refund in a case where tax has been paid as per provision of law. However in the instant case, the facts are different and the assessee is not at all liable to tax on the compensation received. Therefore, the decision is not applicable to the facts of the present case. 37. The ld. Counsel for the assessee submitted that for the purpose of attracting the charging section under capital gain, there must be a transfer of an asset or right in the asset by any of the modes prescribed u/s. 2(47) I.T.Act. In the case of the assessee, there was no ownership of asset at any time or no legal right accrued to the assessee on the strength of the compromise decree to deem the transaction as a transfer. For the above proposition, he referred to the following reasons in his written synopsis, which can be summarised as under:- a) Capital asset means property of any kind held by an assessee, whether or not connected with his business. 25 K.Muthyam Reddy b) It is an admitted fact that the Assessee had always only a disputed right over the impugned asset and there were other seventy claimants. c) In the light of multiple pending litigations among various claimants, what right the assessee could possess is only a right to sue as other party to the dispute possess. Moreover the Competent Court having dismissed the claim with categorical findings, what remains with the assessee is a further right to sue. The point for consideration whether such a right could be transferred, Section 6(e) of the Transfer of Property Act stipulates that a right to sue cannot be transferred . d) The Assessee had no undisputed ownership right over the land at any point of time because of the persisting disputes among a large number of persons who all staked claim over the land. It was therefore, not possible to assign any definite right, title and interest over the disputed land to any of the contesting parties which alone could attract tax liability. Hence the question of any relinquishment of a right which was never vest on the assessee does not arise. e) What was settled by the Lok Adalat was to put an end to the dispute among various parties by way of awarding monetary benefit in lump sum without any reference to any right out of the sum received from an Interested party who was willing to purchase a portion of the land so as to avoid any future dispute and this was accepted by the contesting parties f) The order of the Lok Adalat did not result in conferring any clear right, title over the disputed land on anyone except arriving at a compromise that none of the contesting parties would prefer any further claim and or raise any dispute in future after receipt of consideration from DLF who as an interested party was to purchase a part of the land. The order of the Lok Adalat is not a document declaring and/ or conferring any right on the claimants. It was a dispute resolution mechanism. g) The scope of the powers of the Lok Adalat and the compromise decree which has become the sole basis of fastening the liability on the Assessee has not been read in the correct legal perspective. This is not like an adjudicated decree of a civil Court which alone could confer a right/title on the contesting party. The issues are never adjudicated on merit vis a vis a claim. The compromise is arrived at by the parties to the dispute and presented before the Lok Adalat. It is for a settlement. h) It may be seen that there was unequal payment to various parties without indicating the extent of their respective rights, title or interest over the land and payments made to them. This is a very significant aspect in as much as in such a situation when extent of land for which compensation was paid is not ascertainable, the computation fails under section 48. Therefore the charge fails. i) The order per se cannot be equated as conferring a legal right over the disputed land on anyone and therefore the same does not go beyond settlement of dispute. The rights of various parties were unclear both before and after the settlement of disputes by the Lok Adalat. 26 K.Muthyam Reddy j) Even now, after compromise through the Lok Adalat, fresh disputes are pending over the said land before Civil Court and the Assessee along with all other parties who were part of the comprise before the Lok Adalat have been impleaded as a party to the dispute. Under such circumstances, rights are not ascertainable. Thus no gain has accrued as held in the case of Hindustan Land Development Trust Ltd 161 ITR 524SC. Evidence regarding the pendency of the dispute is enclosed.(Syed Shah Sadiq Mohiuddin and two others V Mohammad Gyassudin and 79 others LGC 7 of 2009 in the Special Court under AP land grabbing Prohibition Act and V Rabindranath and others v 8urugpaiHSivaramakrishna and others OS No.928-931 of 2007 filed in the Court of Ist Additional Dist Judge R R Dist) [Pages 70 to 125 of the paper book-l filed by the assessee]. k) Such an unclear and uncrystallized right cannot be equated with a legal right in any sense so as to attract tax liability under any provisions of law. There is no finality about ownership of the land or rights arising there from on the basis of Lok Adalat's order. l) At best, the amount received on compromise can be treated as a capital receipt in the hands of various parties to the dispute and not liable to tax. m) The cost of acquisition of the land cannot be ascertained with reasonable certainty and the same was not deliberated and adjudicated by the Lok Adalat which is the primary document utilized by the Assessing Officer to fix liability. In fact, the Assessing Officer himself denied indexation in some connected cases of Assessee's family members on the ground that they do not have any right over the land. n) Further, it is submitted that when cost of acquisition is not known, no computation is possible. Law is well settled that the charging section 45 and computation section 48 are an integrated whole. If one section fails, the other fails and no computation of capital gain is possible as held in the case of CIT vs B.C Srinivasa Setty [128 ITR 294 (SC)]. In view of the above, the amount received can at best be treated as a capital receipt not exigible to tax as under such an arrangement, there could be no right subjected to transfer attracting levy 'of capital gain tax. o) So far as the submissions made by the Ld.CIT (DR) that the assessee had relinquished his rights in property in lieu of consideration. This argument is mis conceived. A right refers to capacity of asserting a legally recognized claim. In the given factual backdrop, there could be no relinquishment of such right which is recognized by law which could be transferred. The assessee had only disputed a right which is in the form of right to file suits based on certain loan documents and un registered agreement of sale Thus, the amount is received as full and final settlement for relinquishing his right to file suits before the Courts and not for consideration for transfer of capital asset. 38. So far as the submission of the ld.CIT-DR that the assessee had relinquished his right in the property in lieu of consideration is concerned, he submitted that this argument is mis conceived. He 27 K.Muthyam Reddy submitted that a right refers to capacity of ascertaining a legally recognized claim. In the instant case, there could be no relinquishment of such right which is recognized by law which could be transferred. Referring to the following decisions, he submitted that compensation received for relinquishment of rights to file suits is a capital receipt not exigible to tax. * CIT vs. Abbasbhoy A. Dehgamwalla [195 ITR 28, Bombay High Court] * Dhruv N. Shah vs. Dy.C.I.T [ITA No. 2099/MUM/2000, Mumbai Tribunal] * C.I.T vs. Ashoka Marketing [164 ITR 664, Calcutta High Court] * C.IT vs. J. Dalmia [149 ITR 215, Delhi High Court] * C.I.T vs. Hiralal Manilal Mody [131 ITR 421, Gujarat High Court] * Baroda Cement & Chemicals Ltd vs. C.I.T [158 ITR 636, Gujarat High Court] * Popular Estate Manag.ement Ltd vs. I.T.O [ITA No: 0212/Ahd/2014, Ahmedabad Tribunal] * D.C.I.T vs. Shri Shekhar G. Patel [ITA No.1197/ Ahd/2010, Ahmedabad Tribunal] * ITO VS Ganeshsagar Infrastructue (p) Ltd [ 135 Taxmann.com 313, Ahmendabad Tribunal] * Authority for Advance Ruling (Income Tax), New Delhi / Lead Counsel of Qualified Settlement Fund (QSF), In re [381 ITR 001, AAR-New Delhi] * Authority for Advance Ruling (Income Tax), New Delhi / Lead Counsel of Qualified Settlement Fund (QSF), In re [381 ITR 55, AAR-New Delhi] [Please see paper book VII filed by the assessee for the precedents 38.1 He accordingly submitted that ld.CIT(A) is fully justified in holding that the compensation received by the assessee is capital in nature. 39. We have heard the rival argument made by both the sides, perused the orders of the AO and ld.CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the assessee in the instant case received consideration of 22,52,50,000/- for 28 K.Muthyam Reddy relinquishment of certain disputed rights in the lands out of which assessee declared an amount of Rs. 8 crores in his individual hands and Rs.13.0 crores in the hands of different family members who received such compensation. The balance amount of Rs. 1,52,50,000/- was not offered as being not received. Since the assessee had declared only a part of such consideration at Rs. 8 crores, the AO brought to tax the balance amount of Rs. 14,52,50,000/-. After allowing the indexation benefit the AO made addition of Rs. 14,24,59,060/-. We find the ld.CIT(A) held such receipt as capital receipt and deleted the addition on the ground that the rights of the assessee are un crystalized and not capable of ascertainment. Further, he held that the contract for sale of land is in capable of specific performance. 40. It is the submission of ld.CIT-DR that property is a term of the widest import and it is not necessary that a transfer of 2(47) is confined only to absolute rights of ownership. It is his submission that any right including the disputed right or relinquishment of a right in a property would be taxable u/s. 45 of the I.T.Act 1961. It is also his submission that the assessee in his computation of income has quantified the cost of acquisition as well as claimed indexation and therefore, it is incorrect to hold that computation provisions fail. Further, it is also his argument that after the order of ld.CIT(A) the assessed income is below the returned income which is contrary to law. 41. We find some force in the above arguments of ld. DR. It is in an admitted fact that the assessee received the consideration in shape of compensation for relinquishment of his right in the land, though disputed. Such right accrued to the assessee on account of certain money given as loan in the past for which the property was mortgaged under some agreement. The assessee in the computation of income 29 K.Muthyam Reddy has also claimed indexed cost of acquisition while computing capital gain. 42. We find the Hon’ble Supreme Court in the case of Ahmed G.H.Ariff (supra) has observed as under:- "Now "property" is a term of the widest import and, subject to any limitation which the context may require, it signifies every possible interest which a person can clearly hold or enjoy. The meaning of the word "property" has come up for examination before this court in a number of cases. Reference may be made to one of them in which the question arose whether mahantship or shebaitship which combines elements of office and property would fall within the abmit of the word "property" as used in article 19(1)(f) of the Constitution. It was observed in Commissioner, Hindu Religious Endowments v. Shri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt [1954] SCR 1005, 1019 that there was no reason why that word should not be given a liberal and wide connotation and should not be extended to those well-recognised types of interests which had the insignia or characteristic of proprietary right. Although mahantship was not heritable like the ordinary property, it was still held that the mahant was entitled to claim protection of article 19(1){f) of the Constitution. It is stated in Halsbury's Laws of England, volume 32, third edition, page 534, that an annuity (which is a certain sum of money payable yearly either as a personal obligation of the grantor or out of property not consisting exclusively of land) can be an item of property separate and distinct from the beneficial interests therein and from the funds and other property producing it . it is property capable of passing on a death and can be separately valued for the purpose of estate duty.” 43. We find the Hon’ble Madhya Pradesh High court in the case of Smt. Laxmi Devi Ratani(supra) has observed as under:- "The expression 'property of any kind' used in section 2(14) is of wide import. Wehen we read this expression along with expression defined in section 2(47)(ii) i.e., extinguishment of any rights therein, we have no hesitation in holding that giving up of right to claim specific performance by an assessee to get conveyance of immovable property in lieu of receiving consideration resulted in extinguishment of right in property thereby attracting the rigour of section 2(14) read with section 2(47) ibid. In other words, the action on the part of an assessee in giving up her right to claim the property and instead accepting the money compensation was a clear case of relinquishment of a right in the property resulting in transfer as defined in section 2(47) ibid. When the Legislature in its wisdom defines a particular type of transaction to be in the nature of transfer for taxing purpose, then the effect has to be given to such transaction to be in the nature of transfer as defined. The reading of definition of transfer under section 2(47) ibid, clearly indicate that the intention of Legislature is to include several kinds of transaction to be falling in the category of transfer for the purpose of bringing them in income-tax net under the Income-tax Act. Indeed, while interpreting the word transfer as 30 K.Muthyam Reddy defined in section 2(47). Their Lordships of Supreme Court in the case of Ahamad G.H. Ariff v. CWT [1970] 76 ITR 471 has held: a term of the widest import and signifying every possible interest which a person can clearly hold or enjoy". 44. We find the co-ordinate Bench of the Tribunal in the case of M/s Andhra Networks Ltd.(supra) has observed as under:- "After considering the issue, we are of the opinion that the orders of Ld. ClT(A) on the issue of taxing capital gains are to be upheld. As rightly pointed out by the Ld. ClT(A), the property under consideration need not be immovable property. Assessee is having certain rights and the bundle of rights are transferred. Even though assessee relied on provisions of section 2(47)(vi) of the I. T. Act, the provision is very clear that any transaction which has the effect of transferring or enabling the enjoyment of any immovable property is covered by the definition of 'transfer' even though assessee has argued that there is no immovable property, what the provision entitles is that of a transaction which has the effect of transferring or enabling the enjoyment of any immovable property. Therefore, the contention that assessee has not transferred immovable property does not hold good, as assessee has entered into consortium agreement which is the effect of transferring the rights in an immovable property. The argument that assessee has no transferable right and the agreement with KIADB does not give rise to any transferable rights is not correct in the sense that assessee is enjoying the property by virtue of allotment letter granted by the Industrial Area Development Board on 10.01.2001 and assessee by way of consortium agreement passed on the bundle of rights to the consortium." 45. In view of the above decisions, we are of the considered opinion that relinquishment of right in the property/ land held by the assessee as per Lok Adalat order constitutes transfer of capital asset under the Income tax Act and therefore, the assessee is liable to capital gain. Further, the assessee himself has claimed indexation benefit and therefore, it cannot be said that the cost of acquisition cannot be ascertained and the computation machinery fails. The various decisions relied on by ld. counsel for the assessee are distinguishable and not applicable to the facts of the present case. We, therefore, allow grounds raised by the Revenue on this issue and the grounds raised by the assessee on this issue are dismissed. 46. Ground No. 6 of the revenue relates to the order of the ld.CIT(A) in deleting the addition of Rs.1,52,50,000/- 31 K.Muthyam Reddy 47. The ld.DR submitted that when the sale consideration is quantified in the MOU and the assessee was unable to furnish any evidence of non receipt of the amount as maintained in the MOU, therefore, the amount of Rs.1,52,50,000/- being the difference between the amount as per the MOU and the amount received by the assessee and family members should be brought to tax. 48. The ld. counsel for the assessee on the other hand submitted that the assessee has not received the amount of Rs.1,52,50,000/-. It is also his submission that the assessee cannot prove the negotiate. The department has powers to verify from the party who according to them has paid the amount. 48.1 We have considered the rival arguments made by both the sides, perused the orders of he AO and ld.CIT(A) and the paper book filed on behalf of the assessee. We find the AO made the addition of Rs.1,52,50,000/- on the ground that the assessee has received Rs. 22,52,50,000/- as per the MOU whereas the assessee and his family members have shown only Rs. 21 crores and therefore, the difference amount is liable to tax in the hands of the assessee. It is the submission of the ld. Counsel for the assessee that he has not received the alleged amount of Rs.1,52,00,000/- and therefore not liable to tax. It is also his submission that he cannot prove the negative. We find the AO during the course of assessment proceedings has not obtained any information or evidence from Demi Realtors/DLF to find out as to whether they have paid the entire amount as per the MOU or not. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the jurisdictional AO with a direction to adjudicate the issue by obtaining information from Demi Realtors/DLF who according to the Revenue has paid the alleged amount of Rs. 1,52,50,000/- to the assessee as per the MOU. If it is confirmed by 32 K.Muthyam Reddy the payer with evidence that they have paid the amount of Rs. 1,52,50,000/- to the assessee as per the MOU, then the same shall be taxed in the hands of the assessee. Otherwise, no addition can be made in the hands of the assessee, if the same has not been received by the assessee. We hold and direct accordingly. The ground appeal No. 6 by the revenue is accordingly allowed for statistical purposes. 49. Ground appeal No.7 by the revenue and ground of appeal No.6 by the assessee relate to the order of the ld.CIT(A) in deleting the addition of Rs.13 crores made by the AO. 50. After hearing both the sides, we find the assessee along with his family members received an amount of Rs.19 crores from DLF by way of demand drafts, the details which are as under:- Name of the recipient Amount received Reference-Table in Para 7 of the Lok Adalat Order K.Muthayam Reddy (Assessee) Rs.6,00,00,000/- Sl. No.21,102,103 K.Anjamma(Wife) Rs.1,25,00,000/- Sl. No.18,99 K.Nagi Reddy(Son) Rs.2,32,00,000/- Sl. No.22,104 K.Ranga Reddy(son) Rs.2,31,00,000/- Sl. No.23,105 K.Chandana(Daugher in law) Rs.2,31,00,000/- Sl. No.19,100 K.Ravinder Reddy(Son) Rs.2,31,00,000/- Sl. No.24,106 YH.Jayamma(Daughter) Rs.50,00,000/- Sl. No.70,191 P.Aruna(Daughter) Rs.50,00,000/- Sl. No.52,160 A.Lalitharani(Daughter) Rs.50,00,000/- Sl. No.1,72 A.shobha(Daughter) Rs.50,00,000/- Sl. No.2,73 K.Kavitha(Daughter) Rs.50,00,000/- Sl. No.20,101 TOTAL Rs.19,00,00,000/- 51. We find the assessee received total of Rs.8 crores in his name i.e 6 crores received as per the Lok Adalat order and Rs. 2 crores as per the MOU and offered the same to tax as capital gain. The balance consideration of Rs. 13 crores was offered to tax by the respective family members in their respective tax returns. 33 K.Muthyam Reddy 52. We find AO made the addition in the hands of the assessee on protective basis and substantive addition of the same amount was made in the hands of the family members. In the first round of appeal, the ld.CIT(A) vide order dated 04.01.2011 held the amounts received by the family members from DLF to be reduced from the assessment of the assessee as the ld.CIT(A) vide his order dated 31.08.2010 passed in the case of family members held it to be taxed substantively in their hands. Although the revenue filed appeal against the order of the ld.CIT(A) challenging the various other deletions, however, the revenue did not challenge the order of the ld.CIT(A) in sustaining the substantive addition in the hands of the family members. Therefore, we find merit in the argument of the ld.Counsel for the assessee that once the revenue has accepted the substantive addition in the hands of the family members, it has attained finality and there should not be any revisit of the same since the amount received by the various family members as per the order of the Lok Adalat for relinquishing their disputed rights over the land and offered to tax has attained finality. Further, in any event since the tax rate is same and all the family members and the assessee have paid the taxes in their respective hands, there is no loss to the Revenue. Therefore, we do not find any infirmity in the order of the ld.CIT(A) in deleting the addition of Rs.13 crores made by the AO, which is part of the amount of Rs.22,52,50,000/- received by the assessee as per the MOU entered by the assessee with M/s. Demi Realtors and M/s. DLF Commercial Developers. 53. Ground appeal No. 8 by the Revenue, ground of appeal No.7 by the assessee and the additional ground of appeal No.3 by the assessee relate to the addition of Rs.50 lakhs received from Durga Estates. 34 K.Muthyam Reddy 54. After hearing both the sides we find the AO made addition of Rs.50 lakhs being amount received by the assessee from Durga Estates towards advance for purchasing the lands. The amount was received in different instalments i.e Rs. 15 lakhs in cash Rs. 10 lakhs through cheques and balance Rs. 25 lakhs through post dated cheques. Since the amount was forfeited by the assessee, the AO made addition of the same to the total income of the assessee in absence of any evidence to support the contention of the assessee that he has repaid/ returned the same to M/s. Durga Estates. In the first round of litigation, the matter was set aside to the file of the AO for verification of the evidences filed by the assessee confirming the return/repayment of advance to M/s. Durga Estates. However, in the second round of litigation before the ld.CIT(A), when the matter was set aside by the Tribunal to his file, there is no discussion on this issue. Considering the totality of the facts of the case and considering the fact that in the earlier round, the issue was restored to the file of the AO with a direction to verify the evidence confirming the return/repayment of advances to M/s. Durga Estates, we deem it proper to restore the issue to the file of the jurisdictional AO with a direction to give one opportunity to the assessee to substantiate his case by submitting cogent evidence to his satisfaction regarding the repayment/refund of such advance to M/s. Durga Estates. The AO shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The ground of appeal No. 8 by Revenue and additional ground No. 3 by assessee are accordingly allowed for statistical purposes. 55. Ground No.9 by the Revenue relates to order of ld.CIT(A) deleting the addition of Rs.131,25,00,000/-. 56. We have heard the rival arguments made by both the sides, perused the orders of the AO and ld.CIT(A) and the paper book filed 35 K.Muthyam Reddy on behalf of the assessee. We find as per seized material page NO. 193 to 204 of Annexure AA/DSR/01, the assessee has entered into a MOU with DLF company and M/s. Demi Realtors dated 30.06.2007 according to which the assessee is to receive Rs.22,52,50,000/- and land of 10 acres and 20 guntas in Sy. No. 263 to 270 situated at Puppalaguda Village, Rajendranagar Mandal, Ranga Reddy District for relinquishing his rights in the lands. We find the consideration received in kind of 10 acres and 20 guntas from M/s. Demi Realtors was registered in the name of Shri Ratnagapani Reddy, son-in-law of the assessee as per report of the assessee. The AO made addition of the Fair Market Value of the above land of 10 acres and 20 guntas in the hands of the assessee valuing the same at Rs.12.50 crores per acre and accordingly made addition of Rs.1,31,25,00,000/- to the total income of the assessee. While doing so the AO noted that the value paid by Demi Realtors for acquiring the lands, which are transferred to the assessee, is Rs.4.20 cores per acre, these lands are purchased by the DLF group company @ 12.50 crores per acre from Demi Realtors on 22.08.2007 and on the same date these lands are transferred in the name of Ratangapani Reddy as per the request of the assessee. 57. We find the ld. CIT(A) deleted the addition on the ground that Mr. Ratangapani Reddy is the beneficiary and real owner of the land and therefore the question of assessing the FMV of the said land in the hands of the assessee does not arise especially when the property was transferred by a duly executed document indicating consideration and the FMV cannot be adopted by applying the provisions of section 50C. Further the provisions of section 56(vii) has also no application since the said section covers transactions after 01.10.2009. He accordingly deleted the addition. 58. It is the submission of the ld. DR that the market value of the property as per sale deed filed by the assessee is Rs.175,62,50,000/- 36 K.Muthyam Reddy through the sale agreement cum irrevocable GPA dated 22.08.2007, vendors in 4 parts transferred all the rights in irrevocable manner to Mr. K. Ratangapani Reddy to sell the developed property. The value adopted by the AO is equal to the sale value of adjacent land sold to DLF commercial(P) Ltd. Therefore, the AO is right in making the addition. It is also his argument that merely because stamp duty paid is very less is not material to the market value which is clearly mentioned in the deed. 59. It is the submission of the ld. AR that there is no relinquishment of land by Demi Realtors in favour of the assessee or his son- in-law Mr. Ratangapani Reddy. The land was transferred by a registered sale deed dated 22.08.2007 by the parties to the compromise deed and a sum of Rs.1,00,000/- was paid by Ratangapani Reddy towards compensation. It is also his submission that when the DVO valued the adjacent land in the case of Mr. D.S.Karunakar Reddy and S.Narayana Reddy, partners of Demi Realtor, who also received 10 acres and 13 guntas of contiguous land in the same location @1,10,00,000/- per acre and despite the AO having such information he suppressed the same. It is also his submission that the value of Rs.175,62,50,000/- is wrongly mentioned by the SRO in the AGPA dated 22.08.2007. The SRO wrongly considered the consideration paid by DLF in respect of 14 acres and 2 guntas of land which also got registered on the same day. It is his submission that since all the sale deeds were presented together for registration, the property value was wrongly mentioned at Rs.175,62,50,000/- as against the prevailing rate of Rs.90,00,000/- per acre. 60. In the light of the above arguments and facts on record and submissions earlier, we are of the considered opinion that the ld. CIT(A) was wrong in deleting the entire addition of Rs.131,25,00,000/-. In the instant case, the assessee has received the consideration of Rs.22.50 crores and also 10 acres and 20 guntas 37 K.Muthyam Reddy of land as per the MOU entered into by the assessee with M/s. DLF and M/s. Demi Realtors for relinquishing his disputed rights over the property and it was part of the whole transaction. Therefore, the value of 10 acres and 20 guntas has to be brought to tax in the hands of the assessee. However, the value adopted by the AO at 131,25,00,000/- appears to be faulty in view of the documents produced by the ld. counsel for the assessee. 61. A perusal of the valuation report issued by the District Valuation Officer, valuation sale, Income tax Department, Hyderabad, in respect of property at survey No.262- 274 transferred to Shri D.Karunakar Reddy and Shri Narayana Reddy shows that the DVO had valued the sale instances, of nearby property @ Rs.1,10,00,000/- per acre which are free hold lands. Based on the sale instances a notional value of Rs.1,06,42,500/- has been determined as reasonable value for area of 6 acres and 18 guntas. It is pertinent to mention here that Shri D.S.Karunakar Reddy and Shri S.Narayana Reddy, both partners in Demi Realtors have received 10 acres and 13 guntas of contiguous land in the same locality on the basis of Lok Adalat order on compromise, which was referred to the DVO by the same AO to determine the fair market value. The valuation report is dated 05.12.2009 whereas the assessment order in the instant case was passed on 31.12.2009. We find even though this valuation report was available with the AO, however, he never applied the same rate to the land transferred to Mr. Ratangpani Reddy, son-in-law of the assessee, when the said lands are situated in survey No. 263 to 270. Further, the submission of the ld. Counsel for the assessee that the market value of the property as per the sale deed at Rs.175,62,50,000/- mentioned by the SRO in the AGPA dated 22.08.2007 is wrong since the SRO has wrongly considered the consideration paid by DLF in respect of 14.02 acres land that was got registered on the same day. It is his submission that since all the sale deeds were presented together for registration, the property value 38 K.Muthyam Reddy was wrongly mentioned at Rs.175,62,50,000/- as against the prevailing market rate as on that date which is Rs.90 lakhs per acre. 62. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue of valuation of 10 acres and 22 guntas to the file of the jurisdictional AO with a direction to apply the rate as per the report of the DVO in case of Shri D.S.Karunakar Reddy and Shri Narayana Reddy, whose land also falls in the same survey No. i.e 263-270 situated at Puppalguda village Ragendra Nagar Mandal, Ranga Reddy district. He shall also verify the submission of the ld. Counsel for the assessee that the amount of Rs.175,62,50,000/- was wrongly mentioned by the SRO, since all the sale deeds according to the ld. counsel for the assessee were presented together for registration for which the mistake occurred. After verifying the amount of Rs.175,62,50,000/- from the office of the SRO, which according to the ld. counsel for the assessee is wrong and incorrect, the AO shall adopt the value determined by the DVO in the case of D.S.Karunakar Reddy and Shri Naryana Reddy whose land falls in the same survey No. ie. 263- 270 situated at Puppalguda village, Rajendra Nagar Mandal, Ranga Reddy district. Needless to say the AO shall recompute the valuation strictly as per the binding report of the DVO. We hold and direct accordingly. The above ground of appeal NO.9 raised by the revenue is accordingly allowed for statistical purposes. 63. Ground appeal NO.10 by the revenue and additional ground of appeal No.1 by the assessee relates to the deduction claimed u/s. 54B and 54F of the I.T.Act. 64. As mentioned earlier, the ld. counsel for the assessee did not press for the claim of exemption u/s. 54B of the I.T.Act and therefore, the order of the AO denying the benefit of exemption u/s. 54B is upheld. So far as the deduction claimed u/s. 54F at 39 K.Muthyam Reddy Rs.84,86,085/- is concerned, we find the AO disallowed the same on the ground that assessee has purchased house for Rs. 32,30,350/- which includes registration charges and thereafter assessee claimed additional construction expenditure of Rs.84,86,085/-, however the assessee could not produce any evidence or vouchers /bills for the construction expenditure. The assessee requested the AO to take the cash withdrawals from the bank as evidence for such construction. However, the AO was not satisfied with the arguments advanced by the assessee. We find appeal, the ld.CIT(A) did not adjudicate the same on the ground that it is academic in nature, since the amount received by the assessee on account of relinquishing the disputed rights on the lands cannot be taxed under the head capital gains. It is the submission of the ld. Counsel for the assessee that given an opportunity the assessee is in a position to substantiate his case before the AO by providing necessary evidences to his satisfaction. Considering the totality of the facts of the case and in the interest of the justice, we deem it proper to restore the issue to the file of the jurisdictional AO with a direction to grant one opportunity to the assessee to substantiate his case and decide the issue as per fact and law. We hold and direct accordingly. Ground appeal NO.10 by the revenue is accordingly allowed for statistical purposes and additional ground No.1 by the assessee is dismissed. 65. Grounds of appeal No.1 to 5 by the assessee relate to the order of the ld.CIT(A) in confirming the addition of Rs.16.03 crores on account of alleged receipt of cash from Demi Realtors. 66. After hearing both the sides, we find the AO in the instant case made addition of Rs.16.03 crores on the ground that during the course of search at the premises of M/s.Demi Realtors cash receipts were found evidencing cash payments to the assessee over and above the amount paid through demand draft and the partners of Demi Realtors in their statement have also given a statement to that effect. 40 K.Muthyam Reddy We find the ld.CIT(A) upheld the action of the AO by observing as under:- 8.2 I have gone through the facts of the case, the AO’s observations and Ars’ contentions. The said receipt was vehemently denied by the assessee. It was submitted that the same were manipulated ones. It was submitted that alleged receipts were not seized from his residence but from the office of Demi. Hence the question of application of provisions of section 132(4A) do not apply. It was further submitted that no opportunity was given to the assessee to cross examine Demi despite requests. On the basis of various case laws it was submitted that the assessment order to the extent of this addition is void. 8.3 The submissions of the assessee have been considered. The AO has added the amount on the basis of documentary evidence, which was seized from the office of Demi. Therefore no useful purpose would have been served by affording the assessee an opportunity for cross examination. Therefore, the submissions of assessee do not merit consideration. Hence, the addition of Rs.16.03 cores made by AO, is confirmed. As a result, the grounds raised in this regard are dismissed. 67. It is the submission of the ld. Counsel for the assessee that the allegation of the revenue that the assessee has received in cash the amount of Rs.16.03 crores in addition to the amount received in cheque as per the order of the Lok Adalat is not correct. It is his submission that the addition cannot be sustained since the revenue neither produced the so called statement nor the alleged money receipts to the assessee either during the course of assessment proceedings or during the appeal proceedings. They have also not filed the evidences before the Tribunal in their paper book. Further, the request of the assessee to cross examine the partner of Demi Realtors who had made adverse statement against the assessee was also never allowed to the assessee. 68. We find sufficient force in the above argument of the ld. Counsel for the assessee. The so called statement of the partner of M/s. Demi Realtors making statement that they have given cash to the assessee was never given to the assessee nor finds a place in the paper book furnished by the revenue before the Tribunal even in the second round of litigation. We find although the assessee has repeatedly 41 K.Muthyam Reddy requested for opportunity to cross examine the partners of Demi Realtors, however, the same was never given to the assessee. We further find from the statement of receipt of cheques/DDs produced by the assessee giving details of payments received through banking channels that has been offered to tax that it exactly tallies with the so called receipts issued for cash payments made to the assessee by M/s. Demi Realtors, evidences of which have been found during the course of search. As mentioned earlier, when the amount received by the assessee through banking channel exactly tallies with the so called cash receipts alleged to be seized by the revenue from the premises of M/s. Demi Realtors, the onus is on the revenue to prove that assessee has received exact amount in cash over and above what has been paid though demand draft/banking channel. Therefore, we find merit in the contention of the ld. Counsel for the assessee that the alleged receipts that were found from the premises of M/s Demi Realtors are the same receipts which were issued by the assessee on account of receipt of money through banking channel. We further find merit in the argument of the ld. counsel for the assessee that the alleged receipts were forged and fabricated and were not recovered from the premises of the assessee in course of search so as to apply the presumption u/s. 132(4A)/292C. In this view of the matter and in absence of any material produced before us either by producing the alleged money receipts to establish that assessee has received money over and above what has been declared by him and not producing the copy of the alleged statement recorded from the partner of Demi Realtors and by not giving opportunity to cross examine the partners of M/s. Demi Realtors who have made such adverse statements, the addition in our opinion cannot be sustained. Accordingly, the ground raised by the assessee on this issue is allowed. 69. In the result, the appeal filed by the assessee and the two appeals filed by the Revenue are partly allowed for statistical purposes. 42 K.Muthyam Reddy Order pronounced in the Open Court on 25 th October, 2022. Sd/- Sd/- (K.NARASIMHA CHARY) JUDICIAL MEMBER (RAMA KANTA PANDA) ACCOUNTANT MEMBER Hyderabad, dated 25 th October, 2022. Thirumalesh/sps Copy to: S.No Addresses 1 K.Nagi Reddy, K.Ravinder Reddy & Others L/R of Late K.Muthyam Reddy R/o H.No.4-79, Narsingi Village Gandipet Mandal Ranga Reddy District Telangana-500 089 2 DCIT,CC-6 Hyderabad 3 ACIT,Circle-8(1) Room No.605, 6 th Floor Signature Towers Kondapur Hyderabad 4 CIT(A)-2, Hyderabad 5 Pr.CIT-2, Hyderabad, Kurnool 6 DR, ITAT Hyderabad Benches 7 Guard File By Order
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