Dr. B.Bhaskar Rao, Hyderabad V. DCIT., Central Circle-6, Hyderabad

ITA 1731/HYD/2013

• Counselvise Citation: 173122514 RSA 2013
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 16-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Search and seizure; Deemed dividend; Notional interest
• Section: 153A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NOS. 1731, 1732, 1733 & 1734/HYD/2013 A.YRS. : 2007-08, 2008-09, 2009-10 & 2010-1 1 SRI B. BHASKAR RAO, HYDERABAD PAN ADAPB6170F DY. COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE 6, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI D.V. ANJANEYULU/ SMT. P. PRAVALLIKA REVENUE BY SHRI SOLGY JOSE T. KOTTARAM DATE OF HEARING 05-06-2014 DATE OF PRONOUNCEMENT 01-08-2014 O R D E R PER BENCH: THESE FOUR APPEALS, ALL BY THE ASSESSEE, ARE AGAINS T A COMMON ORDER OF CIT(A)-I, HYDERABAD, DATED 27/09/20 13 FOR ASSESSMENT YEARS 2007-08 TO 2010-11. SINCE FACTS AR E IDENTICAL AND ISSUES ARE COMMON, THESE APPEALS ARE CLUBBED T OGETHER AND DISPOSED OFF IN THIS CONSOLIDATED ORDER FOR THE SAK E OF CONVENIENCE. 2. THE FIRST ISSUE WHICH IS SPECIFIC TO ITA NO. 173 1/HYD/2013 FOR AY 2007-08 ALONE IS RELATING TO ADDITION OF RS. 1,8 0,56,000/- SUSTAINED BY THE CIT(A) AS UNACCOUNTED CASH RECEIPT S. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS AN INDIVI DUAL AND A DOCTOR BY PROFESSION. HE IS THE M.D. AND CEO OF M/S KRISHNA INSTITUTE OF MEDICAL SCIENCES LTD., HYDERABAD AND M .D. OF M/S 2 ITA NOS. 1731 TO 1734/H/13 SRI B. BHASKAR RAO BOLLINENI RAMANAIAH MEMORIAL HOSPITAL PVT. LTD. THE ASSESSEE, ORIGINALLY HAD FILED HIS RETURN OF INCOME ON 06/11/ 2007 DECLARING INCOME OF RS. 34,75,240/- BESIDES AGRICULTURAL INCO ME OF RS. 2,00,000/-. A SEARCH AND SEIZURE OPERATION WAS COND UCTED IN CASE OF THE ASSESSEE AND OTHER ASSESSEES IN THE GROUP ON 20/08/2009. SIMULTANEOUSLY, A SURVEY WAS CONDUCTED ON THE BUSIN ESS PREMISES OF M/S BOLLINENI RAMANAIAH MEMORIAL HOSPITALS PVT. LTD. (IN SHORT M/S BRM HOSPITALS PVT. LTD.)WHEREIN CERTAIN INCRI MINATING MATERIAL WAS FOUND. AS A CONSEQUENCE OF SEARCH OPER ATION, NOTICE U/S 153A WAS ISSUED TO THE ASSESSEE CALLING FOR RET URN OF INCOME. IN RESPONSE TO THE SAID NOTICE ASSESSEE FILED A RET URN OF INCOME DECLARING INCOME OF RS. 66,75,230/- BESIDES AGRICUL TURAL INCOME OF RS. 2,00,000/-. 4. DURING THE ASSESSMENT PROCEEDING ASSESSING OFFIC ER NOTICED THAT DURING THE SURVEY CONDUCTED IN THE BUSINESS PR EMISES OF M/S BRM HOSPITALS PVT. LTD. A LOOSE SHEET WAS FOUND SHO WING PAYMENT OF RS. 1,80,56,000/- TO THE ASSESSEE BY M/S BRM HOS PITALS PVT. LTD. AND REPAYMENT BY ASSESSEE TO THE TUNE OF RS. 7 LAKHS. HOWEVER, ON EXAMINING THE BOOKS OF ACCOUNT OF M/S B RM HOSPITALS PVT. LTD. NO ENTRY INDICATING SUCH PAYMENT WAS FOU ND. ASSESSING OFFICER, THEREFORE, CALLED UPON THE ASSESSEE TO EXP LAIN WHY THE AMOUNT NOTED IN THE SEIZED DOCUMENT SHOULD NOT BE T REATED AS HIS UNDISCLOSED INCOME FOR AY 2007-08. 5. IN REPLY TO THE SHOW CAUSE NOTICE, IT WAS STATED BY THE ASSESSEE THAT THE LOOSE SHEET SEIZED AT THE TIME OF SURVEY WAS PREPARED BY ONE OF THE JUNIOR TRAINEE ACCOUNTS STAF F FOR PRACTICE AND HAS NO BEARING EITHER ON THE BOOKS OF ACCOUNT OF TH E COMPANY NOR HIMSELF. IT WAS SUBMITTED BY THE ASSESSEE THAT CON SIDERING AVERAGE MONTHLY RECEIPTS OF THE COMPANY OF RS. 75,0 0,000/-, THE HOSPITAL CANNOT AFFORD TO PAY SUCH HUGE SUM AS MENT IONED IN THE 3 ITA NOS. 1731 TO 1734/H/13 SRI B. BHASKAR RAO LOOSE SHEET. ALTERNATIVELY, IT WAS SUBMITTED BY THE ASSESSEE THAT ASSESSEE AND OTHER FAMILY MEMBERS HAVE DECLARED ADD ITIONAL INCOME OF RS. 338.24 LAKHS WITH THE UNDERSTANDING T HAT ANY UNDISCLOSED INCOME FOUND AT THE TIME OF ASSESSMENT PROCEEDING WOULD BE ADJUSTED AGAINST THE ADDITIONAL INCOME OFF ERED. IT WAS, THEREFORE, PLEADED THAT IF AT ALL THE AMOUNT OF RS. 1,80,57,500/- IS TO BE CONSIDERED AT HIS HANDS THEN IT MAY BE ADJUST ED AGAINST THE ADDITIONAL INCOME OFFERED OF RS. 338.24 LAKHS. 6. THE ASSESSING OFFICER REJECTED AFORESAID SUBMISS ION OF THE ASSESSEE BY OBSERVING THAT NO STAFF WOULD DARE TO R ECORD SUCH TRANSACTIONS UNLESS THERE IS TRUTH IN THEM. THE ASS ESSING OFFICER ALSO NOTED THAT THE AMOUNT PAID BY THE COMPANY CAN ALSO BE CONSIDERED AS DEEMED DIVIDEND U/S 2(22)(E) OF THE A CT. ACCORDINGLY, ASSESSING OFFICER ADDED THE AMOUNT OF RS. 1,87,56,000/-. 7. THE ASSESSEE CHALLENGED THE ADDITION IN APPEAL B EFORE CIT(A). THE CIT(A) FINDING NO MERIT IN THE GROUNDS RAISED BY THE ASSESSEE SUSTAINED ADDITION OF RS. 1,80,56,000/- AF TER GIVING CREDIT TO REPAYMENT OF RS. 7 LAKHS BY ASSESSEE WITH THE FO LLOWING FINDING: 07.3.2 BEFORE GOING INTO THE MERITS OF THE CASE, I WOULD LIKE TO DRAW ATTENTION TO THE PROVISIONS OF THE I.T. ACT WHICH EMPOWER THE DEPARTMENT TO TAX THE INCOME OF ANY PERSON UNDE R THE ACT. (I) AS PER THE CHARGING SECTION-4, INCOME-TAX SHALL BE CHARGED FOR ANY ASST.YEAR AT ANY RATE OR RATES, INCOME TAX AT T HAT RATE OR THOSE RATES SHALL BE CHARGED FOR THAT YEAR IN ACCORDANCE WITH AN SUBJECT TO THE PROVISIONS OF THE I.T. ACT IN RESPECT OF THE TOTAL INCOME OF THE PREVIOUS YEAR OF EVERY PERSON. (II) A PERSON IS DEFINED IN SEC.2(31) WHICH IS AN I NCLUSIVE DEFINITION AND THE PERSON INCLUDES AN INDIVIDUAL, HUF, A COMPA NY, A FIRM, AN AOP/BOI, A LOCAL AUTHORITY, EVERY ARTIFICIAL JURIDI CAL PERSON.............. (III) SEC.2(7) DEFINES AN ASSESSEE WHICH MEANS A PE RSON BY 4 ITA NOS. 1731 TO 1734/H/13 SRI B. BHASKAR RAO WHOM ANY TAX OR ANY OTHER SUM OF MONEY IS PAYABLE U NDER THIS ACT AND INCLUDES EVERY PERSON IN RESPECT OF WHOM AN Y PROCEEDING UNDER THIS ACT HAS BEEN TAKEN FOR THE ASSESSMENT OF HIS INCOME...................... . (IV) SEC.:?(9) SAYS WHAT AN ASSESSMENT YEAR MEANS I.E., THE PERIOD OF 12 MONTHS COMMENCING ON THE FIRST DAY OF APRIL EVERY YEAR. (V) THE PROVISIONS OF SEC.153A ARE RE-PRODUCED FOR READY REFERENCE AS BELOW: 'NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 13 2 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISIT IONED UNDER SECTION 132A AFTER THE 31 ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL - (A)ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FUR NISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETU RN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRE SCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURN ISHED UNDER SECTION 139 ; (B) A SSESSEE OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PROCEEDING THE ASSESSMENT YEAR RE LEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE: PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESSEE OR REASSESS THE TOTAL IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN SUCH SIX ASSESSMENT YEARS. 07.4 FROM THE ABOVE PROVISIONS OF THE ACT, IT IS AP PARENT THAT THE INCOME OF EVERY INDIVIDUAL IN A PARTICULAR FINANCIA L YEAR HAS TO BE TAXED IN THE RELEVANT ASSESSMENT YEAR. IT IS ALSO A FACT THAT INCOME DECLARED BY EACH INDIVIDUAL HAS TO BE CONSIDERED IN HIS HANDS AND THERE IS NO SUCH THING AS GROUP ASSESSMENT. AS PER THE PROVISIONS OF SEC.153A, ASSESSMENT HAS TO BE MADE IN RESPECT OF EACH INDIVIDUAL, IN RESPECT OF EACH ASSESSMENT YEAR COM PRISED WITHIN THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH AND SEIZURE OPERATIONS WERE CONDUCTED. IN THE INSTANT CASE, THE DEPARTMENT 5 ITA NOS. 1731 TO 1734/H/13 SRI B. BHASKAR RAO HAS FOUND A DOCUMENT WHICH SHOWS T' IT AN AMOUNT OF RS.L!80,56,OOO/-(NET OF CREDITS OF RS.7 LAKHS) RECE IVED BY THE APPELLANT FROM M/S . BOLLINENI RAMANAIAH MEMORIAL HOSPITAL AND SINCE THE APPELLANT DID NOT DECLARE THE SOURCE OF T HE AMOUNT, THE ADDITION BY THE ASSESSING OFFICER IS JUSTIFIED. THE CONTENTION THAT THIS UNDISCLOSED INCOME DETECTED IN THE FY 2006-07 SHOULD BE ADJUSTED AGAINST THE DISCLOSURE MADE BY ANOTHER ASS ESSEE, SRI B. KRISHNAIAH IN THE FY 2008-09 TOWARDS ANY DISCREPANC IES FOUND DURING THE ASSESSMENT PROCEEDINGS IN THE GROUP CONC ERN IS INCORRECT AND AGAINST THE PROVISIONS OF THE STATUTE . ACCORDINGLY, THE ADDITION OF RS.L,80,56,000/- IS CONFIRMED. 8. THE LEARNED AR SUBMITTED BEFORE US THAT THE DOCU MENT ON THE BASIS OF WHICH ADDITION HAS BEEN MADE IS A LOOSE SH EET HAVING NO EVIDENTIARY VALUE. IT WAS SUBMITTED THAT, FROM THE VERY INITIAL STAGE ASSESSEE HAS CONSISTENTLY STATED THAT HE HAS NEVER RECEIVED THE AMOUNT SHOWN IN THE LOOSE SHEET. IT WAS SUBMITTED T HAT APART FROM THE LOOSE SHEET THE DEPARTMENT HAS NOT BROUGHT ANY OTHER CORROBORATIVE MATERIAL ON RECORD TO SHOW THAT AMOUN T MENTIONED IN THE LOOSE SHEET WAS ACTUALLY PAID TO THE ASSESSEE. LEARNED AR SUBMITTED THAT MUCH IMPORTANCE CANNOT BE ATTACHED T O THE LOOSE SHEET ALSO BECAUSE OF THE FACT, THOUGH THE DETAILS ARE FROM 06/04/2006 TO 26/10/2006 BUT THE INITIAL APPEARING IN THE LOOSE SHEET BEARS THE DATE 25/03/2006. ALTERNATIVELY, THE LEARNED AR SUBMITTED THAT IF THE AMOUNT IS TO BE TREATED AS IN COME OF THE ASSESSEE, IT NEEDS TO BE ADJUSTED AGAINST THE ADDIT IONAL INCOME DECLARED BY THE ASSESSEE AND OTHER FAMILY MEMBERS. IN SUPPORT OF HIS CONTENTIONS, LEARNED AR RELIED ON THE FOLLOWING DECISIONS: 1. JAGMOHAN SINGH ARORA VS. DCIT, 101 TTJ 682 (MUM .) 2. EAGLE SEEDS BIOTECH LTD. VS. ACIT, 100 ITD 301 3. S. KUPPUSWAMI MUDALIAR VS. CIT, 51 ITR 757 (MAD .) 4. CIT VS. GURUSWAMY NADAR, 149 ITR 127 5. GYAN KUMAR AGARWAL VS. ACIT, 146 TTJ 334 (HYD.) 9. THE LEARNED DR ON THE OTHER HAND JUSTIFYING THE ADDITION SUSTAINED BY THE CIT(A) SUBMITTED THAT THE IMPOUNDE D DOCUMENT 6 ITA NOS. 1731 TO 1734/H/13 SRI B. BHASKAR RAO CLEARLY INDICATE PAYMENT RECEIVED BY THE ASSESSEE F ROM THE COMPANY. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIAL ON RECORD AS WELL AS THE ORDER S OF THE REVENUE AUTHORITIES ON THE ISSUE. WE HAVE ALSO EXAM INED THE DECISIONS RELIED UPON BY THE LEARNED AR. UNDISPUTED LY, THE ENTIRE BASIS FOR ADDITION OF THE AMOUNT IN DISPUTE IS THE DOCUMENT IMPOUNDED DURING THE SURVEY OPERATION IN THE BUSINE SS PREMISES OF M/S BRM HOSPITALS PVT. LTD. A REFERENCE TO THE IMP OUNDED MATERIAL, A COPY OF WHICH IS AT PAGE 37 OF ASSESSEE S PAPER BOOK WILL SHOW THAT IT IS A LOOSE SHEET SHOWING PAYMENT OF AMOUNTS IN CASH STARTING FROM 06/04/2006 TO 26/10/2006 AND ALS O RECEIPT OF RS. 7 LAKHS FROM ASSESSEE. IT IS A PRINTED DOCUMENT BEA RING INITIAL OF SOME PERSON DATED 25/03/2006. THIS ITSELF CREATES A GENUINE DOUBT WITH REGARD TO THE AUTHENTICITY OF THE DOCUMENT. A DOCUMENT INITIALLED ON 25/03/2006 CERTAINLY CANNOT RECORD PA YMENTS MADE FROM 06/04/2006 TO 26/10/2006. THE DEPARTMENT HAS N OT BEEN ABLE TO CLARIFY THIS ASPECT. FURTHER, THE ASSESSING OFFI CER HAS MENTIONED IN THE ASSESSMENT ORDER THAT THESE PAYMENTS HAVE NO T BEEN REFLECTED IN THE BOOKS OF ACCOUNT OF THE COMPANY WH ICH OBVIOUSLY MEANS, ACCEPTING FOR THE TIME BEING THAT PAYMENTS W ERE MADE, THE PAYMENTS MADE BY THE COMPANY TO THE ASSESSEE WERE O UTSIDE THE BOOKS. THEREFORE, IT IS VERY MUCH ESSENTIAL TO KNOW HOW THESE PAYMENTS HAVE BEEN TREATED AT THE HANDS OF THE COMP ANY. NEITHER THE ASSESSMENT ORDER NOR ANY OTHER MATERIAL BROUGHT ON RECORD COULD EVEN REMOTELY ESTABLISH THAT PAYMENTS TO THE EXTENT INDICATED IN THE LOOSE SHEET WERE ACTUALLY MADE TO THE ASSESS EE. IT APPEARS FROM THE FACTS ON RECORD THAT NEITHER THE ASSESSING OFFICER NOR THE CIT(A) HAVE CONDUCTED ANY ENQUIRY TO ASCERTAIN THE REAL FACT. IN THESE CIRCUMSTANCES, SOLELY RELYING UPON THIS SINGL E PIECE OF PAPER ADDITION CANNOT BE MADE AT THE HANDS OF THE ASSESSE E CONSIDERING 7 ITA NOS. 1731 TO 1734/H/13 SRI B. BHASKAR RAO THE FACT THAT THERE IS SERIOUS DOUBT WITH REGARD TO AUTHENTICITY OF NOTINGS MADE THEREIN. AS IT APPEARS, THE ASSESSING OFFICER HAS MADE THE ADDITION MERELY ON PRESUMPTION WITHOUT MAK ING ANY ENQUIRY TO ESTABLISH THE FACT THAT PAYMENTS AS PER THE IMPOUNDED DOCUMENT WAS ACTUALLY RECEIVED BY ASSESSEE. IN THE AFORESAID CIRCUMSTANCES, WE ARE INCLINED TO SET ASIDE THE ORD ER OF THE CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF THE ASSESS ING OFFICER TO CONSIDER THE ISSUE AFRESH AFTER CONDUCTING NECESSAR Y ENQUIRY IN THE MATTER. WE MAKE IT CLEAR THAT UNLESS THERE ARE ENOU GH CORROBORATIVE EVIDENCE TO SHOW THAT PAYMENTS AS PER THE IMPOUNDED DOCUMENT WERE ACTUALLY RECEIVED BY ASSESS EE NO ADDITION CAN BE MADE. ACCORDINGLY, THESE GROUNDS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 11. THE ONLY OTHER ISSUE, WHICH IS COMMON IN ALL TH E APPEALS, IS IN RESPECT OF ADDITIONS MADE TOWARDS ACCRUED INTERE ST. 12. BRIEFLY THE FACTS ARE, DURING THE SEARCH OPERAT ION CERTAIN LOOSE SHEETS WERE FOUND AND SEIZED FROM THE RESIDEN CE OF ASSESSEE WHICH WERE MARKED AS ANNEXURE A/BBR/02. PA GE 37 OF THE SEIZED MATERIAL CONTAINED CERTAIN NOTINGS RELAT ING TO AMOUNTS ADVANCED TO DIFFERENT PERSONS. IN COURSE OF THE PRO CEEDING WHEN THE ASSESSEE WAS ASKED TO EXPLAIN, HE WAS UNABLE TO EXPLAIN AND OFFERED TO DECLARE THE AMOUNT OF RS. 32 LAKHS AS AD DITIONAL INCOME IN AY 2007-08. ACCORDINGLY, AMOUNT OF RS. 32 LAKHS WAS CONSIDERED AS ASSESSEES INCOME FOR AY 2007-08. HOW EVER, ON VERIFICATION OF THE REVERSE SIDE OF PAGE 37 (SEIZED MATERIAL) IT WAS NOTICED THAT THERE WAS CALCULATION OF INTEREST TILL 13/05/2009 AMOUNTING TO RS. 13.86 LAKHS ON THE ADVANCE OF RS. 21 LAKHS TO RAJI. IT FURTHER REVEALED THAT INTEREST WAS CALCULA TED AT 2% PER MONTH FOR 33 MONTHS FROM 09/2006 TO 05/2009. SINCE THE ASSESSEE HAD ACCEPTED THE ADVANCES GIVEN AS NOTED IN THE LOO SE SHEET AND 8 ITA NOS. 1731 TO 1734/H/13 SRI B. BHASKAR RAO OFFERED IT AS ADDITIONAL INCOME, THE ASSESSING OFFI CER OPINED THAT THE ASSESSEE HAS ALSO RECEIVED INTEREST AS PER THE NOTINGS IN THE SAME SEIZED MATERIAL AND ACCORDINGLY QUANTIFIED ACC RUED INTEREST FOR EACH OF THE ASSESSMENT YEARS UNDER DISPUTE. 13. BEING AGGRIEVED OF THE ADDITIONS MADE ASSESSEE PREFERRED APPEALS BEFORE THE CIT(A). THE CIT(A) SUSTAINED THE ADDITIONS MADE BY THE ASSESSING OFFICER HOLDING AS UNDER: 5.2 I HOVE GONE THROUGH THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE APPELLANT. IT MAY BE NOTED THAT ON ONE SIDE THE APPELLANT ADMITTED RS.32 LAKHS ON THE BASIS OF SEIZED MATERIAL AT PAGE NO.37 OF ANNEXURE-A/BBR/RES/02 AND OFFERED TO TAX THE AMOUNT APPEARING ON THE SAID PAPER AS UNEXPLAINED ADVANCE ON THE GROUND THAT THE ADVANCES WERE GIVEN TO VARIOUS PEOPLE DURING THE CO URSE OF BUSINESS, WHOSE NAMES AND ADDRESSES HE COULD NOT DISCLOSE, ON THE OTHER HAND, HE REJECTS THE NOTING ON THE REVERSE SIDE OF THE SAME PAGE I.E., PAGE NO.37 OF THE ANNEXURE A/BBR/RES/02 AND SAYS TH AT THE INTEREST HAS NOT ACCRUED TO HIM AND NOTIONAL INTEREST CANNOT BE CHARGED. THE NOTING ON PAGE-37 INDICATES LOAN OF RS.21 LAKHS TO RAJI AND ON THE REVERSE SIDE THE INTEREST CALCULATION TILL 13-5-200 9 AT RS.13.86 LAKHS. IT IS NOT EXPLAINED AS TO IF THE IMPUGNED SEIZED DOCUM ENT IS A WASTE PAPER AND HAS NO EVIDENTIARY VALUE AS HE CLAIMS, WH Y HE DISCLOSED THE AMOUNT OF RS.32 LAKHS APPEARING ON ONE SIDE OF THE PAPER. THE ASSESSING OFFICER VAS POINTED OUT THAT THE INTEREST WAS CALCULATED FROM THE DATE OF LOAN FROM SEPTEMBER, 2006 TO MAY, 2009 I.E., FOR 33 MONTHS AT 2% PER MONTH AND CONCLUDED THAT IT WORKS OUT TO RS.13.86 LAKHS. IT IS A WELL SETTLED PRINCIPLE OF LAW THAT T HE SEIZED MATERIAL HAS TO BE CONSIDERED IN TOTALITY AND AS SUCH BOTH RECEIPTS AND EXPENSES, AS APPEARING IN SUCH SEIZED MATERIAL HAVE TO BE CONSID ERED TO ARRIVE AT THE TRUE AND REAL PICTURE OF THE FACTS. YOU CANNOT OWN UP ONE SIDE OF THE SEIZED PAPER AND CANNOT DISOWN THE REVERSE SIDE OF IT BECAUSE IT SUITS YOU. THEREFORE, THE CONTENTION THAT INTEREST DID NOT ACCRUE TO HIM CANNOT BE ACCEPTED BY DISOWNING THE NOTINGS IN THE SEIZED MATERIAL. ACCORDINGLY, THE INTEREST CALCULATED AND ADDED BY T HE ASSESSING OFFICER OF RS.2,94,000/- (ASST. YEAR 2007-08); RS.5 ,04,000/-(ASST. YEAR 2008-09); RS.5 ,04,000/- -(ASST. YEAR 2009-10) AND RS.84,000J- (ASST.YEAR 2010-11) IS HEREBY CONFIRMED. 14. LEARNED AR SUBMITTED BEFORE US THAT THE ASSESSI NG OFFICER WAS NOT JUSTIFIED IN COMPUTING ACCRUED INTEREST BY SOLELY RELYING UPON THE SEIZED MATERIAL WITHOUT MAKING ANY INDEPEN DENT INQUIRY. IT 9 ITA NOS. 1731 TO 1734/H/13 SRI B. BHASKAR RAO WAS SUBMITTED, THERE IS NOTHING ON RECORD TO SHOW T HAT THERE WAS A CONTRACTUAL OBLIGATION TO PAY INTEREST OR ASSESSEE CAN CLAIM SUCH INTEREST. IT WAS SUBMITTED THAT IN ABSENCE OF ANY C ORROBORATIVE EVIDENCE TO SHOW THAT ASSESSEE HAS EARNED INTEREST, NO ADDITION CAN BE MADE BY SIMPLY RELYING UPON SOME NOTINGS MAD E IN A LOOSE SHEET WHICH IS NOT INITIALLED. IN SUPPORT OF SUCH C ONTENTION, LEARNED AR RELIED UPON THE FOLLOWING DECISIONS: 1. CIT VS. EXCEL INDUSTRIES LTD., 358 ITR 295 (SC) 2. CIT VS. SHRI GOVERDHAN LTD., 69 ITR 675 (SC) 3. CIT VS. NANDRAM HANATRAM, 103 ITR 433 4. KALUH DEVADATTAM VS. UOI, 49 ITR 165 (SC) 5. CIT VS. BIKANER TRADING CO. LTD., 78 ITR 12 (SC ) 15. LEARNED DR SUBMITTED THAT WHEN THE ASSESSEE IS ACCEPTING THE INVESTMENTS MENTIONED IN THE SEIZED MATERIAL TH ERE IS NO REASON WHY THE INTEREST COMPONENT MENTIONED IN THE SAME SEIZED MATERIAL SHOULD NOT BE HELD TO BE CORRECT. IT WAS T HEREFORE SUBMITTED, THE CIT(A) WAS JUSTIFIED IN SUSTAINING T HE ADDITIONS. 16. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WE LL AS OTHER MATERIALS ON RECORD. ON PERUSAL OF THE SEIZED MATER IAL, A COPY OF WHICH IS AT PAGE 79 OF ASSESSEES PAPER BOOK, SHOWS THAT IT CONTAINS NOTINGS OF CERTAIN AMOUNTS ON SPECIFIC DAT ES AGAINST THE NAME OF SOME PERSONS. ONE OF THE NOTING IS FOR AN A MOUNT OF RS. 21 LAKHS ON 11/08/2006 IN THE NAME OF RAJI. ON TH E REVERSE SIDE OF THE SAID SEIZED MATERIAL THERE IS CALCULATION OF INTEREST ON RS. 21 LAKH IN THE NAME OF RAJI AND INTEREST TILL 13/05/20 09 IS QUANTIFIED AT RS. 13.86 LAKHS. IT IS AN UNDISPUTED FACT THAT AMOU NTS MENTIONED IN THE SEIZED MATERIAL INCLUDING THE AMOUNT OF RS. 21 LAKHS IN THE NAME OF RAJI WAS ACCEPTED BY THE ASSESSEE AS HIS UNEXPLAINED ADVANCES AND OFFERED AS INCOME. HOWEVER, WHEN IT CO MES TO INTEREST ON ADVANCE OF RS. 21 LAKHS, THOUGH THE COM PUTATION OF 10 ITA NOS. 1731 TO 1734/H/13 SRI B. BHASKAR RAO INTEREST IS PART OF THE SAME SEIZED MATERIAL, ASSES SEE DISPUTES AND DENIES THE SAME AND CLAIMS THAT HE HAS NOT EARNED O R RECEIVED ANY INTEREST. THIS CLAIM OF THE ASSESSEE, IN OUR VIEW, IS NOT ACCEPTABLE. THE ASSESSEE CANNOT BLOW HOT AND COLD AT THE SAME T IME. WHEN THE ASSESSEE ACCEPTS A PART OF THE SEIZED MATERIAL BY O FFERING THE AMOUNTS MENTIONED THEREIN AS HIS UNEXPLAINED INCOME , HE CANNOT REJECT THE INTEREST ON ADVANCE FORMING PART OF THE SAME SEIZED MATERIAL. SO FAR AS THE DECISIONS CITED BY LEARNED AR, ON CAREFULLY EXAMINING THEM, WE ARE OF THE VIEW THAT RATIO LAID DOWN IN THESE DECISIONS WILL NOT APPLY TO THE FACTS OF THE PRESEN T CASE. AT THE COST OF REPETITION WE WOULD LIKE TO OBSERVE THAT WHEN TH E ASSESSEE ACCEPTS THE ADVANCES MENTIONED IN THE SEIZED MATERI AL AS HIS INCOME, THE INTEREST CALCULATED ON THE AMOUNT ADVAN CED AS NOTED IN THE VERY SAME SEIZED MATERIAL CERTAINLY HAVE TO BE CONSIDERED TO HAVE BEEN EARNED/RECEIVED BY THE ASSESSEE. ACCORDIN GLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). THE GROUND RAISED IS DISMISSED. 17. IN THE RESULT, ITA NO. 1731/HYD/13 IS PARTLY AL LOWED FOR STATISTICAL PURPOSES AND ITA NOS. 1732, 1733 & 1734 /HYD/13 ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 01/08/2014. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 1 ST AUGUST, 2014 KV 11 ITA NOS. 1731 TO 1734/H/13 SRI B. BHASKAR RAO COPY TO:- 1) SRI B. BHASKAR RAO, C/O M/S ANJANEYULU & CO., CAS., 30, BHAGYALAKSHMI NAGAR, GANDHI NAGAR, HYDERABAD 500 080 3) DCIT, CENTRAL CIRCLE 6, HYDERABAD. 4) CIT(A)-I, HYDERABAD. 5) THE CIT(CENTRAL), HYDERABAD 5)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD.