Duddukunta Sreedhar Reddy, Hyderabad, Hyderabad V. DCIT, Central Circle-6, Hyderabad, Hyderabad

ITA 170/HYD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7015 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 31-07-2019
• Assessment Year: 2006-2007
• Appeal Filed On: 03-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: S RAMA RAO
• Keywords: Gift; Additional evidence; Fair market value
• Section: 143(3); 56(2); 153A; 68; 132

Judgement Text

ITA NOS 170 171 182 AND 183 DUDDUKUNTA SREEDHAR RED DY HYDERABAD. PAGE 1 OF 12 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NOS.170, 171, 182 & 183/HYD/2017 ASSESSMENT YEARS:2006-07, 2007-08, 2008-09 & 2009-1 0 SHRI DUDDUKUNTA SREEDHAR REDDY, HYDERABAD PAN: AHSPD0865H VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 6, HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI S. RAMA RAO REVENUE BY : SRI Y.V.S.T. SAI, CIT-DR DATE OF HEARING: 01/08/2019 DATE OF PRONOUNCEMENT: 29/10/2019 ORDER PER SMT. P. MADHAVI DEVI, J.M. THESE ARE ALL ASSESSEES APPEALS FOR THE A.YS 2006- 07, 2007-08, 2008-09 AND 2009-10 RESPECTIVELY, AGAINST THE COMMON AND CONSOLIDATED ORDER OF THE CIT (A)-11,HYDERABAD, DATED 09.09.2016. THE COMMON ISSUE IN ALL THESE APPEALS F OR THE A.Y 2006-07 TO 2009-10 IS AGAINST THE DISALLOWANCE OF I NTEREST REPRESENTING 1/3 RD INTEREST ON LOANS OBTAINED FROM INDIAN OVERSEAS BANK. A.Y 2006-07 2. BRIEF FACTS ON THIS ISSUE ARE THAT THERE WAS A S EARCH AND SEIZURE U/S 132 OF THE I.T. ACT ON 30.11.2011 A ND CONSEQUENTLY, THE ASSESSMENT U/S 143(3) R.W.S. 153A WAS ITA NOS 170 171 182 AND 183 DUDDUKUNTA SREEDHAR RED DY HYDERABAD. PAGE 2 OF 12 COMPLETED. DURING THE RELEVANT ASSESSMENT PROCEEDIN GS, THE AO OBSERVED THAT ON THE HEAD INCOME FROM HOUSE PROPER TY, THE ASSESSEE HAS CLAIMED INTEREST OF RS.1,50,000/-PAID ON HOUSING LOAN IN THE COMPUTATION STATEMENT, BUT HAS NOT PROD UCED THE BANK STATEMENT IN RESPECT OF LOAN AVAILED AND PAYME NT OF INTEREST. HE THEREFORE, DISALLOWED THE CLAIM OF INT EREST FOR ALL THE RELEVANT A.YS. ON APPEAL, THE CIT (A) CONSIDERED TH E ADDITIONAL EVIDENCE FILED BY THE ASSESSEE IN THE FORM OF COPIE S OF CERTIFICATES DATED 20.08.2007 BY INDIAN OVERSEAS BANK, R.P. ROAD , SECUNDERABAD FOR THE FINANCIAL YEARS 2005-06 AND 20 06-07, VIDE CERTIFICATE DATED 5.5.2008 FOR THE FINANCIAL YEAR 2 007-08, VIDE CERTIFICATE DATED 20.07.2009 FOR FINANCIAL YEAR 200 8-09, WHEREIN THE PAYMENT OF INTEREST ON HOUSING LOAN BY THE ASSE SSEE WAS CONFIRMED. A REMAND REPORT FROM THE AO WAS CALLED F OR WHO SUBMITTED THAT THE LOAN WAS AVAILED BY THREE PERSON S I.E THE ASSESSEE, HIS WIFE SMT.D.APARNA REDDY AND HIS BROTH ER SHRI D. SRINIVAS REDDY AND SINCE THE SHARE OF EACH PERSONS WAS EVIDENCED FROM THE CERTIFICATES, THE AO SUGGESTED T O DISALLOW EQUALLY FROM ON EACH OF THE ASSESSEES SHARES OF IN TEREST. IN REBUTTAL, THE ASSESSEE STATED THAT THE ENTIRE LOAN TAKEN FROM INDIAN OVERSEAS BANK WAS UTILIZED BY THE ASSESSEE F OR PURCHASE OF A HOUSE AND THEREFORE, INTEREST AMOUNT IS ALLOWABLE FROM THE INCOME OF THE ASSESSEE ONLY. THE CIT (A) HOWEVER, O BSERVED THAT THE LOAN WAS A HOUSING LOAN AVAILED BY THREE PERSON S. THEREFORE, HE DIRECTED THE AO TO ALLOW ONLY 1/3 RD OF THE INTEREST PAID AS BEING THE ASSESSEES SHARE OF INTEREST. THE LEARNED COUNS EL FOR THE ASSESSEE SUBMITTED THAT THOUGH THE LOAN WAS TAKEN B Y THREE PERSONS, THE ENTIRE LOAN WAS UTILIZED IN CONSTRUCTI ON OF THE HOUSE PROPERTY BY TWO PEOPLE ONLY, I.E.THE ASSESSEE AND H IS WIFE AT PLOT NO.301, GR ELITE, ROAD NO.14, BANJARA HILLS, HYDERA BAD, AND SINCE HE WAS OFFERING THE INCOME FROM HOUSE PROPERT Y IN HIS ITA NOS 170 171 182 AND 183 DUDDUKUNTA SREEDHAR RED DY HYDERABAD. PAGE 3 OF 12 HANDS, THE ENTIRE INTEREST AMOUNT WERE ALSO TO BE A LLOWED IN HIS HANDS. THESE FACTS NEED VERIFICATION BY THE AO I.E. WHETHER THAT THE ENTIRE RENTAL INCOME IS OFFERED IN THE HANDS OF THE ASSESSEE ALONE. ONLY IF THE ASSESSEE IS OFFERING THE ENTIRE INCOME IN HIS HANDS, THEN THE ENTIRE INTEREST PAID ON THE HOUSING LOAN SHALL BE ALLOWED IN THE HANDS OF THE ASSESSEE. THEREFORE, TH E ASSESSEES GROUND IN ALL THE AYS ON THIS ISSUE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 3. IN THE RESULT, ASSESSEES APPEAL FOR A.Y 2006-07 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. A.Y 2007-08 3. IN THE ASSESSEES APPEAL FOR THE A.Y 2007-08, TH E ASSESSEE HAS RAISED AN ADDITIONAL GROUND AGAINST TH E ADDITION OF RS.30.00 LAKHS MADE BY THE AO U/S 68 OF THE ACT AND ALSO ADDITION OF RS.45,20,000 MADE BY THE AO U/S 68 OF T HE ACT DISPUTING THE CREDIT ALLEGEDLY RECEIVED FROM HIS FA THER-IN-LAW SRI RAMA SUBBA REDDY INSPITE OF CONFIRMATION OF HIS MOT HER-IN-LAW (SINCE HIS FATHER-IN-LAW HAS PASSED AWAY) FILED BY THE ASSESSEE AND ALSO THAT THE AMOUNT PAID TO THE COMPANY AND TH ERE WAS NO CASH CREDIT IN THE A/C OF THE ASSESSEE. 4. BRIEF FACTS ON THIS ISSUE ARE THAT DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 153A OF TH E ACT, THE AO OBSERVED FROM THE FINANCIAL STATEMENT OF THE ASSESS EE THAT THE ASSESSEE HAS RECEIVED FRESH LOAN DURING THE YEAR AM OUNTING TO RS.84,95,000/-. THE ASSESSEE WAS THEREFORE, ASKED T O FURNISH THE DETAILS OF THE CREDITORS SUCH AS NAMES AND ADDRESSE S OF THE ITA NOS 170 171 182 AND 183 DUDDUKUNTA SREEDHAR RED DY HYDERABAD. PAGE 4 OF 12 PARTIES, THEIR PAN NOS. ETC. THE ASSESSEE COULD NOT FURNISH THE SAME AND THEREFORE, THE AO TREATED THE ENTIRE AMOUN T OF RS.84,95,000 AS UNEXPLAINED AND BROUGHT IT TO TAX. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) AND ALSO FILED CERTAIN ADDITIONAL EVIDENCE IN SUPPORT OF HIS CONTE NTION EXPLAINING THE UNSECURED LOANS. THE CIT (A) CALLED FOR A REMAN D REPORT FROM THE AO. IN THE REMAND REPORT DATED 28.12.2015, THE AO SUBMITTED THAT THE CONFIRMATION LETTER OF ONE SHRI G. SOMASEK HARA REDDY DID NOT CONTAIN COMPLETE ADDRESS, THE CONFIRMATION LETTER OF SMT. E. LAKSHMAMMA DID NOT CONTAIN PAN AND THE BANK STAT EMENT FURNISHED IS NOT CLEAR AND IN THE CASE OF SHRI MADH USUDAN REDDY, NO CONFIRMATION LETTER IS FILED. IN REPLY TO THE RE MAND REPORT, THE ASSESSEE SUBMITTED THAT WITH REGARD TO THE LOAN OF RS.9,75,000/- RECEIVED FROM SHRI SOMASEKHARA REDDY, HIS PAN WAS P ROVIDED AND THE AMOUNT WAS PAID THROUGH CHEQUE AND DIRECTLY CREDITED TO THE A/C IN THE BOOKS OF SAI SUDHIR INFRASTRUCTURE L TD (SSIL). IT WAS SUBMITTED THAT THE CHEQUE WAS RECEIVED BY SSIL AND NOT BY THE ASSESSEE. WITH REGARD TO THE AMOUNT OF RS.30.00 LAKHS ALLEGED TO HAVE BEEN RECEIVED FROM SRI RAMA SUBBA REDDY, WH ICH IS CONFIRMED BY HIS WIFE SMT. E. LAKSHMAMMA, SINCE HE HAS PASSED AWAY, THE ASSESSEE SUBMITTED THAT HER ADDRESS WAS C LEARLY MENTIONED IN THE LETTER OF CONFIRMATION AND THAT TH E AMOUNT WAS PAID THROUGH BANKING CHANNELS AND THE SAME WAS CRED ITED TO THE ASSESSEES A/C. THE CIT (A) HAS ACCEPTED THE ASSESS EES EXPLANATION WITH REGARD TO THE ADDITION OF RS.9,75, 000/- RECEIVED FROM SHRI SOMASEKHAR REDDY AND DELETED THE ADDITION . HOWEVER, WITH REGARD TO THE SUM OF RS.30,00,000/- RECEIVED F ROM SHRI RAMA SUBBA REDDY, THE CIT (A) HELD THAT THE CREDITO R IS 85 YEARS OLD AND THAT THE CONFIRMATION IS BY THE WIFE OF THE PERSON WHO HAS ALLEGEDLY ADVANCED FREE INTEREST LOAN TO THE ASSESS EE. HOLDING THAT THE ASSESSEE HAS NOT FILED EVIDENCE WITH REGARD TO THE ITA NOS 170 171 182 AND 183 DUDDUKUNTA SREEDHAR RED DY HYDERABAD. PAGE 5 OF 12 CREDITWORTHINESS OF THE HUSBAND OF SMT. E. LAKSHMAM MA, HE CONFIRMED THE ADDITION OF RS.30.00 LAKHS. WITH REGA RD TO THE ADDITION OF RS.45,20,000/- THE LOAN ALLEGEDLY RECEI VED FROM SHRI MADHUSUDAN REDDY, THE CIT (A) OBSERVED THAT THE CON FIRMATION LETTER FILED FROM SHRI MADHUSUDAN REDDY, CANNOT BE ACCEPTED. 5. THE LEARNED COUNSEL FOR THE ASSESSEE, WHILE REIT ERATING THE SUBMISSIONS MADE BEFORE THE AO, SUBMITTED THAT THE SUM OF RS.30.00 LAKHS WAS RECEIVED BY THE ASSESSEE FROM HI S FATHER-IN- LAW SHRI RAMA SUBBA REDDY FROM OUT OF HIS AGRICULTU RAL INCOME AND THAT THE SAME WAS RECEIVED THROUGH BANK AND THE LEGAL HEIRS CONFIRMED THE ADVANCE. THOUGH WE AGREE WITH THE REL ATIONSHIP OF THE ASSESSEE AND CREDITOR, WE FIND THAT UNLESS THE DETAILS OF THE BANK A/C ARE FURNISHED AND IT IS PROVEN THAT THE AM OUNTS HAVE BEEN RECEIVED THROUGH BANKING CHANNELS, THE IDENTIT Y AND CREDITWORTHINESS OF THE SAID PERSONS CANNOT BE ACCE PTED. THEREFORE, WE DIRECT THE AO TO VERIFY THE BANK A/C OF THE ASSESSEE AND TO VERIFY IF THE AMOUNT HAS BEEN RECEIVED THROU GH BANKING CHANNELS AND IF IT IS FOUND TO HAVE BEEN CREDITED T O HIS BANK A/C, THEN THIS ADDITION CANNOT BE SUSTAINED. AS REGARDS THE AMOUNT OF RS.45,20,000/- RECEIVED FROM SRI G.MADHUSUDAN REDDY , THE ASSESSEE SUBMITTED THAT HE HAS RECEIVED THE SUM THR OUGH CHEQUE NO.707006 ON 17.01.2007 AND IT WAS DEPOSITED IN THE BANK A/C WITH M/S. SAI SUDHEER CONSTRUCTIONS AND CREDITED TO THE CAPITAL A/C OF THE ASSESSEE. THIS FACT ALSO NEEDS VERIFICAT ION BY THE AO, HENCE WE DIRECT THE AO TO VERIFY THE SAME AND IF IT IS FOUND TO HAVE BEEN CREDITED TO THE ASSESSEES BANK A/C, THE DISAL LOWANCE CANNOT BE SUSTAINED. THEREFORE, ASSESSEES APPEAL FOR THE A.Y 2007-08 IS ALSO PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NOS 170 171 182 AND 183 DUDDUKUNTA SREEDHAR RED DY HYDERABAD. PAGE 6 OF 12 A.Y 2008-09 6. IN THE A.Y 2008-09, OTHER THAN DISALLOWANCE OF I NTEREST PAID ON LOAN OBTAINED FROM THE INDIAN OVERSEAS BANK , THE ASSESSEE HAS RAISED ANOTHER GROUND AGAINST THE ADDI TION OF RS.10.00 LAKHS MADE BY THE AO U/S 68 OF THE ACT. DU RING THE ASSESSMENT PROCEEDINGS, ASSESSEE COULD NOT ESTABLIS H THE UNSECURED LOAN TO THE EXTENT OF RS. 12,88,627/- AS HE DID NOT FURNISH ANY DETAILS SUCH AS NAME AND ADDRESSES OF T HE CREDITORS AND THEIR RESPECTIVE PAN NOS ETC. AGGRIEVED BY THE ADDITION MADE BY THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A), WHO GRANTED RELIEF IN RESPECT OF LOAN RECEIVED FROM ASSESSEES WIFE SMT. D. APARNA REDDY FOR AN AMOUNT OF RS.12,88,627/ -. HOWEVER, IN RESPECT OF RS.10.00 LAKHS ALLEGED TO HAVE BEEN R ECEIVED FROM OBULAPURAM MINING CO. (P) LTD, IT WAS CLAIMED TO HA VE BEEN PAID THROUGH BANKING CHANNELS AND THAT THE SAME WAS ACCO UNTED FOR IN THE BOOKS OF SAI SUDHIR INFRA CO. AND THE COMPAN Y IN TURN TO THE ASSESSEES A/C. THE ASSESSEE FILED ADDITIONAL E VIDENCE BEFORE THE CIT (A) AND THE CIT (A) HAD CALLED FOR A REMAND REPORT. ON RECEIPT OF THE REMAND REPORT, THE CIT (A) HELD THAT THE DETAILS OF THE TRANSACTION FOR THE ALLEGED PAYMENT OF RS.10.00 LAKHS ARE NOT FURNISHED AND THEREFORE, IT IS NOT POSSIBLE TO INFE R THAT THE TRANSACTION IS NOT A REVENUE ITEM. HE ACCORDINGLY C ONFIRMED THE ADDITION OF RS.10.00 LAKHS. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AMOUNT WAS PAID BY OBUL APURAM MINING CO.(P) LTD TO SAI SUDHIR INFRA CO. BY WAY OF CHEQUES AND THEREFORE, IT COULD BE ACCEPTED AS ADDITIONAL EVIDE NCE AND THE ADDITION SHOULD BE DELETED. WE FIND THAT THE ASSESS EE HAS NOT GIVEN THE DETAILS OF THE BANK A/C AND THE DATE ON W HICH M/S. SAI SUDHIR INFRA CO. HAS RECEIVED THE AMOUNT AND IN IN TURN, TRANSFERRED THE SAME TO THE ASSESSEES COMPANY. IF THE ASSESSEE IS ITA NOS 170 171 182 AND 183 DUDDUKUNTA SREEDHAR RED DY HYDERABAD. PAGE 7 OF 12 ABLE TO PRODUCE THE DETAILS, THEN THE ADDITION MAY BE DELETED. THE ISSUE IS THEREFORE, REMANDED TO THE FILE OF THE AO AFRESH TO ENABLE THE ASSESSEE TO PRODUCE THE RELEVANT DETAILS AND ON VERIFICATION OF THE SAME, IF THE AO FOUND THAT THE AMOUNT IS RECEIV ED FROM OBULAPURAM MINING CO. (P) LTD, INTO THE BOOKS OF SA I SUDHIR INFRA CO AND FROM SUCH A/C TO THE A/C OF THE ASSESSEE, TH EN NO ADDITION CAN BE MADE IN THE HANDS OF THE INDIVIDUAL. 7. IN THE RESULT, ASSESSEES APPEAL FOR THE A.Y 200 8-09 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. A.Y 2009-10 8. IN THE A.Y 2009-10, THERE IS ONLY ONE ISSUE AGAI NST THE DISALLOWANCE OF INTEREST ON LOAN OBTAINED FROM INDI AN OVERSEAS BANK. FOR THE DETAILED REASONS GIVEN IN THE A.Y 200 6-07, THIS APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR ST ATISTICAL PURPOSES. A.Y 2010-11 9. IN THIS APPEAL FOR THIS YEAR, GROUNDS 1 AND 6 AR E GENERAL IN NATURE AND HENCE NEED NO ADJUDICATION. 10. AS REGARDS GROUND NO.2, WE FIND THAT THE AO MAD E THE ADDITION OF RS.20,00,000/- OF THE FRESH LOANS RECEI VED BY THE ASSESSEE DURING THE RELEVANT FINANCIAL YEAR BECAUSE THE ASSESSEE HAD FURNISHED THE INFORMATION RELATING TO THESE LOA NS JUST BEFORE COMPLETING THE ASSESSMENT AND THE AO OBSERVED THAT THIS IS DONE TO AVOID FURTHER ENQUIRY INTO THE GENUINENESS OF TH E LOANS. BEFORE THE CIT (A), THE ASSESSEE SUBMITTED THAT IT IS A LO AN RECEIVED FROM ONE SHRI N. RAMASWAMY VIDE CHEQUE NO.8821296 DRAWN ON ITA NOS 170 171 182 AND 183 DUDDUKUNTA SREEDHAR RED DY HYDERABAD. PAGE 8 OF 12 CANARA BANK AND FURNISHED THE COPY OF THE BANK STAT EMENTS. THE CIT (A), HOWEVER, CONFIRMED THE ADDITION AS THE ASS ESSEE FAILED TO FURNISH THE CONFIRMATION LETTER OF SHRI N. RAMASWAM Y WHO WAS ALSO LIVING IN THE SAME LOCALITY AS THE ASSESSEE. 11. BEFORE US, THOUGH THE LEARNED COUNSEL FOR THE A SSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND THE LEARNED DR SUPPORTED THE ORDERS OF THE LOWER AU THORITIES, WE FIND THAT IT IS NOT DISPUTED THAT THE AMOUNT WAS RE CEIVED THROUGH BANKING CHANNELS, THUS IDENTITY OF THE REMITTER IS CONFIRMED. BUT, IT DOES NOT PROVE THE NATURE OF THE REMITTANCE, NOR DOES IT PROVE THE CREDITWORTHINESS OF THE CREDITOR. THE ASSESSEE HAS NOT FILED ANY EVIDENCE TO PROVE THESE TWO CONDITIONS EVEN BEF ORE US. THEREFORE, THE ADDITION OF RS.20,00,000/- IS CONFIR MED. 12. AS REGARDS GROUNDS 4 AND 5, BRIEF FACTS ARE THA T DURING THE FINANCIAL YEAR 2009-10, THE ASSESSEE RECEIVED G IFT OF SHARES OF 17,64,874 FULLY PAID UP EQUITY SHARES OF M/S. SSIL, WHOSE FAIR MARKET VALUE WAS ADOPTED @ RS.33.20 PS PER SHARE, W ITH AN AGGREGATE VALUE OF RS.5,85,93,815/- VIDE SEPARATE G IFT DEEDS EXECUTED ON 5.1.2010 IN FAVOUR OF THE ASSESSEE BY S RI E. YELLA REDDY AND SMT. EL SAILAJA REDDY ALSO GIFTED 7,10,27 1 SHARES WITH AN AGGREGATE VALUE OF RS.2,35,81,097/-. THUS THE TO TAL VALUE OF THE SHARES RECEIVED AS GIFT WAS RS.8,21,74,914/-. T HE DOCUMENTS TO THIS EFFECT WERE FOUND DURING THE COURSE OF SEAR CH AND THE ASSESSEE OFFERED TO ADMIT THE SAID SUM AS HIS UNDIS CLOSED INCOME IN HIS INDIVIDUAL HANDS, IN THE STATEMENT RECORDED DURING THE COURSE OF SEARCH. HOWEVER, THE ASSESSEE FAILED TO D ISCLOSE THE SAME IN HIS RETURN OF INCOME FILED IN RESPONSE TO T HE NOTICE U/S 153A OF THE ASSESSEE. THEREFORE, AO REQUIRED THE AS SESSEE TO ITA NOS 170 171 182 AND 183 DUDDUKUNTA SREEDHAR RED DY HYDERABAD. PAGE 9 OF 12 EXPLAIN AS TO WHY THE SAME SHOULD NOT BROUGHT TO TA X. AT THE FAG END OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE CLA IMED IT TO BE THE PROPERTY OF THE HUF OF HIS MATERNAL UNCLE AND T HEREFORE, IS A GIFT FROM A RELATIVE AND NOT TAXABLE. HOWEVER, THE AO DID NOT ACCEPT THIS CONTENTION OF THE ASSESSEE AND BROUGHT IT TO TAX U/S 56(2) OF THE I.T. ACT. AGGRIEVED, THE ASSESSEE FILE D AN APPEAL BEFORE THE CIT (A) WHO CONFIRMED THE ORDER OF THE AO AND T HE ASSESSEE IS IN SECOND APPEAL BEFORE US. 13. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE S TATED THAT AT THE TIME OF ACQUIRING THE SHARES WORTH RS.3,25,000 IN APRIL, 1999 HIS COUSIN SHRI E. YELLA REDDY AND HIS WIFE SMT. SA ILAJA REDDY HAD NO FUNDS TO ACQUIRE SUCH SHARES AND THAT THE FU NDS WERE PROVIDED BY THE HUF OF THE ASSESSEES MATERNAL UNCL E SRI VENUGOPAL REDDY, WHO IS THE FATHER OF SRI E. YELLA REDDY. HE SUBMITTED THAT THESE FUNDS WERE DERIVED FROM THE AG RICULTURAL OPERATIONS CARRIED OUT IN THE HUF PROPERTY AND HENC E THE FUNDS INVESTED WERE HUF FUNDS ONLY AND ON THE INSTRUCTION S OF SRI VENUGOPAL REDDY ONLY, THE SHARES WERE GIFTED TO THE ASSESSEE AND HENCE IT IS A GIFT FROM A RELATIVE AND NOT TAXABLE U/S 56(2) OF THE ACT. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED T HE ORDERS OF THE AUTHORITIES BELOW. 14. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE IS RELYING ONL Y ON THE AFFIDAVITS OF SRI VENUGOPALA REDDY, SRI ELLA REDDY AND SMT. SAILAJA REDDY IN SUPPORT OF THE ABOVE CONTENTIONS. IT IS SUBMITTED THAT THIS IS THE ONLY WAY POSSIBLE TO PROVE THAT TH E PROPERTY BELONGED TO THE HUF, SINCE THE TRANSACTION WAS OLD. BUT, WE ARE ITA NOS 170 171 182 AND 183 DUDDUKUNTA SREEDHAR RED DY HYDERABAD. PAGE 10 OF 12 UNABLE TO ACCEPT THE CONTENTIONS OF THE ASSESSEE. I F THE CONTENTIONS OF THE ASSESSEE WERE TRUE, THEN AS RIGH TLY POINTED OUT BY THE CIT (A), THE ASSESSEE COULD HAVE TAKEN THIS STAND BEFORE INVESTIGATION TEAM. IN FACT, HE OFFERED TO ADMIT IT AS HIS UNDISCLOSED INCOME. HE NEVER MENTIONED THAT THE SHA RES WERE HUF PROPERTY, BUT IT WAS STATED SO ONLY DURING THE ASSESSMENT PROCEEDINGS. THEREFORE, WE AGREE WITH THE FINDINGS OF THE CIT (A) THAT THE CONTENTIONS OF THE PERSONS WHO HAVE GIVEN AFFIDAVITS TO THE ABOVE EFFECT ARE NOT VERIFIABLE OR ACCEPTABLE. WE ALSO AGREE WITH HIS FINDINGS THAT UNLESS CONTRARY IS PROVED, T HE INVESTMENT BELONGED TO THE PERSON IN WHOSE NAME IT STANDS. THE REFORE, THE SHARES STANDING IN THE NAMES OF E. YELLA REDDY AND E. SAILAJA REDDY BELONG TO THEM ONLY AND THOUGH THEY ARE THE C OUSINS OF THE ASSESSEE, THEY DO NOT FALL WITHIN THE MEANING OF A RELATIVE U/S 56(2) OF THE I.T. ACT. THEREFORE, THE GROUNDS OF AP PEAL NOS. 4 AND 5 ARE DISMISSED. 15. AS REGARDS GROUND NO.7, THE ASSESSEE HAD SHOWN AGRICULTURAL INCOME OF RS.26,57,500/- AFTER DEDUCTI NG EXPENSES INCURRED ON AGRICULTURE OF RS.11,38,500/- BUT DID N OT FURNISH ANY EVIDENCE IN SUPPORT OF LAND HOLDING, THE EXPENDITUR E CLAIMED, NATURE OF CROPS CULTIVATED AND EVIDENCE IN SUPPORT OF SALE OF AGRICULTURAL PRODUCE ETC., THEREFORE, THE AO TREATE D THE ENTIRE RECEIPT OF AGRICULTURAL INCOME OF RS.37,96,000/- AS INCOME FROM OTHER SOURCES . IN THE APPEAL BEFORE THE CIT (A), THE ASSESSEE PRODUCED THE EVIDENCE THAT HE WAS IN POSSESSION OF TWO PARCELS OF LAND AGGREGATING TO 29.86 ACRES BUT DID NOT PRODUCE ANY EVIDENCE THAT HE HAS CARRIED OUT AGRICULTURAL OPERATIONS OR WITH REGARD TO THE EXPENDITURE CLAIMED BY THE ASSESSEE. THE CIT (A ) HAD IN FACT CALLED FOR A REMAND REPORT FROM THE AO WHEREIN THE AO REPORTED ITA NOS 170 171 182 AND 183 DUDDUKUNTA SREEDHAR RED DY HYDERABAD. PAGE 11 OF 12 THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CON STRUCTION ACTIVITY AND COULD NOT HAVE UNDERTAKEN AGRICULTURAL ACTIVITY ON SUCH SCALE AND THAT THERE IS NO RECORD OF ANY AGRIC ULTURAL ACTIVITY THAT IS MAINTAINED BY THE ASSESSEE. IT WAS ALSO SUB MITTED THAT THERE IS NO EVIDENCE OF MANGO GARDEN BEING THERE ON THE LAND. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAS BECOME THE OWNER OF THE PROPERTY ONLY AT THE BEGINNING OF THE FINANCIAL YEA R RELEVANT TO THE A.Y 2010-11 AND THE RECITALS IN THE SALE DEED SHOWS THAT THERE ARE TWO BOREWELLS AND ONE WELL ALONG WITH ELECTRICITY C ONNECTION AND WATER SHARE RIGHTS. SINCE THERE WAS NO MENTION OF M ANGO GARDEN IN THE SALE DEED AND OBSERVING THAT THE MANGO TREES TAKES LOT OF TIME TO GROW AND GIVE CROP, THE AGRICULTURAL INCOME WAS NOT ACCEPTED BY THE CIT (A). HE THEREFORE, CONFIRMED TH E ADDITION MADE BY THE AO AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. WHILE THE LEARNED COUNSEL FOR THE ASSESSEE REITERAT ED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW, THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 16. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE AO IN THE REMAND REPORT HAS CONFIRMED THAT THE ASSESSEE IS THE OWNER OF THE LAN D TO THE EXTENT OF NEARLY 30 ACRES. HOWEVER, THE POSSIBILITY OF THE ASSESSEE GETTING THE AGRICULTURAL INCOME IS DOUBTED BY THE CIT (A). WHEN THERE ARE TWO BORE WELLS AND ONE WELL ALONG WITH ELECTRICITY CONNECTION, WE DOUBT WHETHER ANY PERSON WOULD KEEP THE LAND IDLE. HOWEVER, WITHOUT ANY EVIDENCE AS TO RECORDS, THE NATURE OF T HE AGRICULTURAL CROPS GROWN AND THE EXPENDITURE CLAIMED BY THE ASSE SSEE, THE CLAIM OF THE ASSESSEE CANNOT BE ACCEPTED IN TOTO. T HEREFORE, THE AGRICULTURAL INCOME CAN ONLY BE ESTIMATED AT THIS S TAGE. WE THEREFORE, DEEM IT FIT AND PROPER TO REMAND THE ISS UE TO THE FILE OF ITA NOS 170 171 182 AND 183 DUDDUKUNTA SREEDHAR RED DY HYDERABAD. PAGE 12 OF 12 THE AO TO CONSIDER AND ESTIMATE THE AGRICULTURAL IN COME WHICH COULD BE DERIVED FROM THE LAND OF 30 ACRES OWNED BY THE ASSESSEE FOR BOTH THE A.YS 2010-11 AND 2011-12. WE FIND THAT THIS IS THE ONLY GROUND OF APPEAL IN THE CASE OF THE ASSESSEE F OR THE A.Y 2011-12. THUS, THE APPEALS OF THE ASSESSEE FOR THE A.YS 2010-11 AND 2011-12 ARE PARTLY ALLOWED. 17. IN THE RESULT, APPEALS OF THE ASSESSEE ARE PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH OCTOBER, 2019. SD/- SD/- (S. RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 29 TH OCTOBER, 2019. VINODAN/SPS COPY TO: 1 SHRI DUDDUKUNTA SREEDHAR REDDY, C/O SHRI S.RAMA R AO, ADVOCATE, FLAT NO.102, SHRIYA'S ELEGANCE, 3-6-643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 2 DY.CIT,CENTRAL CIRCLE 1(3) AAYAKAR BHAVAN, BASHEE RBAGH, HYDERABAD 3 CIT (A)-11, HYDERABAD 4 PR. CIT CENTRAL, HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER