V Koteswara Rao, Hyderabad V. DCIT, CC-4, Hyd., Hyderabad

ITA 1777/HYD/2013

• Counselvise Citation: 177722514 RSA 2013
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 14-07-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 23-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KIRAN KATTA
• Keywords: Business income; Search and seizure; Cost of acquisition; Deemed dividend
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA.NO.1777/HYD/2013 ASSESSMENT YEAR 2010-2011 MR. V. KOTESWARA RAO HYDERABAD 500 008. PAN ACPPV-6307-G VS. DCIT, CENTRAL CIRCLE-4 HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE MR. K.C. DEVDAS FOR REVENUE MR. KIRAN KATTA DATE OF HEARING 15.07.2014 DATE OF PRONOUNCEMENT 05.09.2014 ORDER PER SMT. ASHA VIJAYARAGHAVAN, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF THE LD. CIT(A)-I, HYDERABAD, DATED 22.10.2 013 FOR THE A.Y. 2010-2011. 2. THE ASSESSEE IS A MANAGING DIRECTOR OF M/S. VKR PROJECTS PVT. LTD. AND DERIVING INCOME BY WAY OF HOUSE PROPERTY, BUSINESS INCOME, CAPITAL GAINS AND INCOME FROM OTHER SOURCES INCLUDING DEEMED DIVIDEND OF RS.94,10,967/-. DURING THE COURSE OF SEARCH AND SEI ZURE IN THE CASE OF SRI M. JANARDHAN REDDY, A LOOSE SHEE T WAS FOUND WHICH NOTED THE RECEIPT OF AMOUNTS WHICH ALLEGEDLY FOR THE PROPERTY AMOUNTING TO RS.8 CRORES . SRI M. JANARDHAN REDDY WAS VENDOR AND THE ASSESSEE WAS 2 VENDEE OF A PROPERTY IN JUBILEE HILLS, HYDERABAD. I N THE SWORN STATEMENT, SRI M. JANARDHAN REDDY STATED THAT THE REGISTERED VALUE OF THE PROPERTY WAS RS.3.23 CRORES BUT HE RECEIVED ON MONEY AMOUNTING TO AROUND. RS.4.77 CROR ES FOR THE PROPERTY LOCATED IN JUBILEE HILLS AND ALSO STATED THAT THE SEIZED MONEY FROM HIS BANK LOCKER WAS PART OF RS. 4.77 CRORES ON MONEY RECEIVED. 2.1. IN VIEW OF THIS, A SURVEY U/S. 133A OF IT ACT WAS CONDUCTED AT THE RESIDENCE CUM BUSINESS PREMISE S OF M/S. VKR PROJECTS PVT. LTD. AND ITS MD SRI V. KOTESWA RA RAO, THE ASSESSEE, TO GATHER FURTHER EVIDENCE AND W AS ASKED TO FURNISH THE SOURCES OF CASH AMOUNTING TO AROUND RS.4.77 CRORES STATED TO HAVE BEEN PAID TO S RI JANARDHAN REDDY. THE ASSESSEE DENIED ANY SUCH PAYMENT TO SRI M. JANARDHAN REDDY. DURING INVESTIGA TION IT WAS NOTED THAT SRI JANARDHAN REDDY OPENED A LOCK ER IN STATE BANK OF INDIA, DWARAKANAGAR BRANCH AND ASSESS EE ALSO OPERATED HIS LOCKER AT THE SAME TIME ON 24.09. 09. THE PROPERTY WAS REGISTERED ON 05-10-09. ON THE RE ASON THAT WHEN SRI M. JANARDHAN REDDY ALREADY HAD TWO LOCKERS IN DIFFERENT BANKS, THERE WAS NO NECESSITY TO OPEN ONE MORE LOCKER IN THE SAME BRANCH IN WHICH THE ASSESSEE IS MAINTAINING A LOCKER, IT WAS ALLEGED TH AT ON MONEY PAID IN CASH WAS TRANSACTED ON THAT DAY. IT W AS GATHERED THAT THE ASSESSEE HIMSELF INTRODUCED SRI M . JANARDHAN REDDY TO THE BANK FOR OPENING A LOCKER ON 24.09.2009 AND OPINED THAT THE TRANSFER OF MONEY TO OK PLACE ON 24.09.2009. ASSESSEE DENIED THE SAME. ASSESSING OFFICER CROSS EXAMINED THE BRANCH MANAGER (SMT. J. AMRUTHA MADHURI) AND THE MANAGER STATED IN 3 HER STATEMENT THAT THEY DO NOT PERMIT TWO DIFFERENT PERSONS TO OPERATE THEIR RESPECTIVE LOCKERS AT THE SAME TIME BUT ON REQUEST, ANOTHER PERSON CAN ACCOMPANY W ITH THE LOCKER HOLDER. SINCE THE ASSESSEE HAS INTRODUCE D SRI M. JANARDHAN REDDY FOR OPENING THE LOCKER ACCOUNT, IT WAS OPINED THAT THE ASSESSEE MIGHT HAVE REQUESTED T HE BANK AUTHORITY TO ACCOMPANY WITH SRI M. JANARDHAN REDDY BECAUSE CUSTOMER'S REQUESTS ARE ALWAYS OBLIGE D BY THE BANKS. BASED ON THE ENTRIES IN THE LOOSE SHEET, COPIES OF BANK LOCKER REGISTER AND ON THE STATEMENT GIVEN BY SRI M. JANARDHAN REDDY, IT WAS HELD THAT ON-MONEY TO TH E EXTENT OF RS.4.77 CRORE WAS PAID BY ASSESSEE FOR PU RCHASE OF PROPERTY. IN VIEW OF THIS, AN AMOUNT OF RS.4,76,75,000/- WAS CONSIDERED AS UNDISCLOSED INVESTMENT U/S. 69B OF THE IT ACT. 3. BEFORE THE LD. CIT(A) IT WAS THE SUBMISSION THA T 1. THE LOOSE SHEET PROVIDED TO THE ASSESSEE BY TH E DEPARTMENT CONTAINED A LARGE NUMBER OF STRAY NOTINGS POSSIBLY IN THE HANDWRITING OF SRI M. JANARDHAN REDDY AND NOT OF THE ASSESSEE AND THE ASSESSING OFFICER DID NOT FIND ASSESSEE'S NAME AND DATE ANYWHERE IN THAT DOCUMENTS. EVEN IN SEARCH & SEIZURE / SURVEY OPERATION CONDUCTED BOTH IN SRI M. JANARDHAN REDDY AND ASSESSEE PREMISES NO EVIDENCE FOUND REGARDING PAYMENT OF CASH. 2. FROM SWORN STATEMENT OF SRI M. JANARDHAN REDDY RECORDED ON THE DATE OF SEARCH, IT APPEARS THAT SRI M. JANARDHAN REDDY HAS ENTERED INTO A LARGE NUMBER OF PURCHASE AND SALE TRANSACTIONS 4 RELATING TO DIFFERENT PROPERTIES. THEREFORE, IT CAN NOT BE SAID THAT THE ALLEGED ON MONEY ORIGINATED FROM THE ASSESSEE. 3. A DOCUMENT FOUND DURING THE COURSE OF A SEARCH MUST BE A SPEAKING ONE AND WITHOUT ANY SECOND INTERPRETATION, MUST REFLECT ALL THE DETAILS ABOUT THE TRANSACTION OF THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR. IN THE CASE OF THE ASSESSEE THE DOCUMENT WAS NOT A SPEAKING ONE AS THE NAME OF THE ASSESSEE OR ANY OTHER CORROBORATIVE EVIDENCE WAS FOUND. 4. IN THE ABSENCE OF DETAILS AND CORROBORATION, T HE DOCUMENT IS A DUMB DOCUMENT AND NO RELIANCE CAN BE PLACED ON THE SAME. ASSESSEE PLACED RELIANCE ON THE FOLLOWING CASE LAWS. 1. ASST. CIT VS. SATYAPAL WASSAN (2007) 295 I TR (AT) 352 (JABALPUR); 2. CIT VS. KHAZAN SINGH & BROTHERS 2007, 304 ITR 243 (P&H); 3. CIT VS. GIRISH CHAUDHARY (2007) 163 TAXMAN 608, DELHI; 4. BANSAL STRIPS (PVT.) LTD. VS. ACIT (2006), 99 IT D 177 DELHI; 5. MAULI KUMAR K. SHAH (2008) 307 ITR 137 (GUJ); ITO VS. HANUMAN PODDAR 98 TT) 705 ASR; 6. MM FINANCES PVT. LTD VS DCIT (107 TT) CHENNAI 200); CIT VS. SHIVAKANI CO. PVT. LTD. 159 ITR 71 SC; 7. K RISHNAN KAPOOR VS. ACIT ITAT 68 ITO 37 (CHD.) (TM); 5 5. SUSPICION CANNOT BE A BASIS OF ASSESSMENT. (I) DHIRAJPA L GIRDHARI LAL VS. CIT (1954) 26 IT R 726 ( SC ),' (II) DHEKES HWARI COTTON MILLS LTD. VS. CIT (1954) 26 ITR 775 (S C ); (III) LALCHAND BHAGAT AMBICA RAM VS. CIT (1959) 37 ITR 288 ( SC), (IV ) UMACHARAN SHAW & BROS VS. CIT (1959) 37 ITR 271 (SC). 4.1. LD. CIT(A) DID NOT AGREE WITH THE CONTENTIONS AND VIDE PARA-8, SHE CONFIRMED THE ADDITION MADE RELYIN G MORE ON THE STATEMENT OF MR. M. JANARDHAN REDDY AND ALSO ON THE REASON THAT A.O. DID NOT MAKE THE ADDITION ON HIS O WN BUT ON THE VENDORS OWN STATEMENT WHEN AN IMPOUNDED LOOSE SHEET FOUND AT HIS PREMISES SUPPORT PAYMENT. LD. CIT(A) A LSO CONFIRMED THAT THE LOOSE SHEET FOUND DURING THE COU RSE OF SEARCH WAS ABLE TO CORROBORATE THE UNDERLYING REAL TRANSACTION I.E., THE DEEMING PROVISIONS COME INTO OPERATION. S HE ALSO TOOK NOTE OF THE FACT THAT MR. M. JANARDHAN REDDY HAD GI VEN STATEMENTS CONTINUOUSLY ON 20.11.2009, 25.11.2009 A ND ALSO ON 25.02.2010 AND ADMITTED TO HAVE RECEIVED ON MONE Y. SINCE MR. JANARDHAN REDDY EXPIRED ON 21.02.2011, ASSESSEE COULD NOT BE GIVEN CROSS EXAMINATION AND THE TIME GAP BET WEEN THE REQUEST OF THE ASSESSEE AND ORIGINAL STATEMENTS GOE S AGAINST THE ASSESSEE. SHE ALSO RELIED ON THE DECISION OF TH E HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS. DCIT 214 ITR 80 ON TEST OF HUMAN PROBABILITY AND CIRCUMSTANTIAL EVIDENCE AND HONBLE PUJAB & HARYANA HIGH COURT DECISION IN THE CASE OF SOM NATH MAINI VS. CIT 306 ITR 414. LD. CIT(A) A LSO RELIED ON THE DECISION OF ITAT IN THE CASE OF HARSHAVIN CH ADDAH WHEREIN IT HAS BEEN HELD THAT BASED ON MATERIAL ON RECORD, PROBABLE HUMAN CONDUCT, SURROUNDING CIRCUMSTANCES A ND PROPOUNDNESS OF PROBABILITIES AND LEGAL POSITIONS, ADDITION CAN 6 BE MADE THOUGH DIRECT MATERIAL IS NOT AVAILABLE. AC CORDINGLY, SHE CONFIRMED THE ADDITION OF RS.4.77 CRORES MADE B Y THE A.O. UNDER SECTION 69B OF THE ACT. 5. LD. COUNSEL FILED WRITTEN SUBMISSIONS CONTENDIN G THAT THERE IS NO PRESUMPTION IN LAW OF PAYMENT OR R ECEIPT OF ON MONEY. IN THE CASE OF CIT V. SHIVAKANI CO. P. LTD., 159 ITR 71 SC, IT WAS HELD THAT UNLESS THERE IS EVIDENCE THAT MORE THAN WHAT WAS STATED, WAS RECEIVED, NO HIGHER PRICE CAN BE TAKEN TO BE THE BASIS FOR COMPUTATION OF CAPITAL GAINS AND T HE ONUS IS ON THE REVENUE - THE INFERENCE MIGHT BE DRAWN IN CE RTAIN CASES BUT TO COME TO A CONCLUSION THAT A PARTICULAR HIGHE R AMOUNT WAS IN FACT RECEIVED MUST BE BASED ON SUCH MATERIAL FROM WHICH SUCH AN IRREFUTABLE CONCLUSION FOLLOWS . IT WAS SUBMITTED THAT IN THE CASE OF THE ASSESSEE, THERE IS ABSOLUTE LY NO MATERIAL TO INFER PAYMENT OF ON MONEY. FURTHER IT WAS SUBMIT TED THAT IN THE CASE OF BALDEV KRISHNAN KAPOOR V. ACIT ITAT 68 ITD 37 (CHD) (TM), IT WAS HELD THAT OSTENSIBLE SALE CONSID ERATION DISCLOSED IN THE SALE DEED HAS TO BE ACCEPTED BECAU SE IT COULD NOT BE CONTRADICTED BY ADDUCING ANY COGENT EVIDENCE TO PROVE THAT THE ASSESSEE HAS RECEIVED ON MONEY. IT WAS EXP LAINED THAT IN THE CASE OF THE ASSESSEE, HE IS ALLEGED TO HAVE PAID ON MONEY AND THE ALLEGATION HAS NO BASIS WHATEVER AND THE AO HAS NO MATERIAL TO ASSAIL THE CONSIDERATION RECORDED IN TH E DOCUMENT. IT WAS SUBMITTED THAT IN BAI HIRA DEVI V. OFFICIAL ASSIGNEE OF BOMBAY AIR 1958 SC 448, THE SUPREME COURT OBSERVED THAT SECTION 91 OF THE EVIDENCE ACT IS BASED ON WHAT IS SOMETIMES DESCRIBED AS THE BEST EVIDENCE RULE . THE BEST EVIDENCE ABOUT CONTENTS OF DOCUMENT IS THE DOCUMENT ITSELF. IN THE CASE OF THE ASSESSEE, THE REGISTERED DOCUMENT CONSTITUTES THE B EST EVIDENCE ABOUT THE LAND TRANSACTION. AND, THERE IS NO EVIDENCE TO SUGGEST THE CONTRARY. 7 6. LD. COUNSEL ALSO REITERATED ARGUMENTS PUT-FORTH BEFORE THE A.O. AND LD. CIT(A). ON THE DIRECTION OF THE BE NCH, DATES OF PAYMENT BY ASSESSEE OF CONSIDERATION WERE STATED AS UNDER : DATES OF PAYMENT AMOUNT (RS.) MODES OF PAYMENT 09.09.2009 50,00,000 DEMAND DRAFT NO.596907 DRAWN ON STATE BANK OF INDIA. 09.09.2009 50,00,000 DEMAND DRAFT NO.12591 DRAWN ON CANARA BANK 17.09.2009 50,00,000 DEMAND DRAFT NO.034134 DRAWN ON UNION BANK OF INDIA. 18.09.2009 70,00,000 DEMAND DRAFT NO.034137 DRAWN ON CANARA BANK 05.10.2009 99,00,000 DEMAND DRAFT NO.125930 DRAWN ON CANARA BANK 03.10.2009 3,25,000 DEMAND DRAFT NO.885419 DRAWN ON CANARA BANK 05.10.2009 1,00,000 DEMAND DRAFT NO.885420 DRAWN ON CANARA BANK TOTAL 3,23,25,000 7. LD. D.R. SUPPORTED THE ORDER OF THE REVENUE AUTHORITIES AND BROUGHT TO OUR NOTICE QUERY NO.31 A ND THE ANSWER TO THE QUERY GIVEN BY SRI JANARDHAN REDDY WH ICH IS AS FOLLOWS: Q31. I AM SHOWING YOU PAGE NO. 42 TO 49 OF ANNEXUR E A/MJR/PO/02, SEIZED FROM YOUR RESIDENCE OF SEARCH. PLEASE EXPLAIN THE CONTENTS THEREIN. ANS. PAGE NO.42 TO 46: WHEN I WAS SERIOUSLY ILL AND FELT LONELINESS, I SCRIBBLED THIS WILL, ASSUMING THAT I WAS AT THE FAG END OF MY LIFE. I SCRIBBLED MY THOUGHTS AS TO WHAT I WOULD PASS ON TO MY FAMILY. SOME OF THE INVESTMENTS MADE ARE REFLECTED IN MY CASH FLOW STATEMENTS AND SOME WERE SCRIBBLED EXPECTING CERTAI N THINGS. THE AMOUNTS MENTIONED IN THE WILL ARE NOT ACTUAL BUT ARE MY ASSUMPTIONS, WHICH MAY OR MAY NOT CONVERT INTO REALITY. 8 PAGE NO.47 TO 49: THESE ARE MY SCRIBBLING WHICH I AM NOT ABLE TO RECOLLECT NOW. 7.1. THE DR RELYING ON THE ANSWER TO QUERY NO.31 SUBMITTED THAT THE WILL DATED 21.3.2009 (WHICH IS M ENTIONED BY JANARDHAN REDDY) WAS FOUND IN JANARDHAN REDDYS PREMISES IN WHICH HE HAD MENTIONED THAT JUBILEE HIL LS HOUSE WOULD FETCH RS.8.5 CRORES AND HENCE THE A.O. HAS RI GHTLY MADE THE ADDITION. THE DR ALSO POINTED OUT THAT ONLY AF TER DEMISE OF JANARDHAN REDDY, THE ASSESSEE HAD REQUESTED FOR CRO SS- EXAMINATION OF JANARDHAN REDDY. 8. WE HAVE HEARD THE PARTIES. AS CAN BE SEEN FROM THE ABOVE FACTS AS PLACED ON RECORD AND ARGUMENTS B EFORE US, THERE IS NO DISPUTE WITH REFERENCE TO THE FACT THAT MR. M. JANARDHAN REDDY WAS FOUND WITH UNACCOUNTED CASH IN THE COURSE OF SEARCH. IT WAS THE CONTENTION OF REVENUE THAT ASSESSEE PAID THE ON MONEY IN PURCHASE OF PROPERTY AND THAT THE SAME WAS PAID WHEN THE LOCKERS WERE OPERATED ON SAME DAY IE.24-09-09, BEFORE REGISTRATION. IN SUPPORT RE LIANCE WAS MADE ON THE NOTINGS IN THE LOOSE SHEET SEIZED AND S TATEMENT OF SRI JANARDHAN REDDY AND ALSO THE FACT THAT HE DISCL OSED THE SALE CONSIDERATION AT RS 8 CRORES IN THE COMPUTATIO N OF CAPITAL GAINS. ASSESSEE DENIED THE SAME. 8.1 FIRST LET US EXAMINE THE FACT OF CASH SEIZU RE. THE FACT THAT THE AMOUNT SEIZED ARE NOT ENTIRELY FROM T HE ONE BANK LOCKER HAS NOT BEEN NOTICED BY THE AUTHORITIES. AS PER QUESTION NO.6 AND 7 OF STATEMENT DATED 25.11.2009, A.O. HAS ASKED SRI JANARDHAN REDDY AS UNDER : Q.6. HAVE YOU PAID ANY CAPITAL GAINS TAX ON THE TOT AL CONSIDERATION RECEIVED. 9 ANS: I HAVE NOT PAID TAX TILL NOW, HOWEVER, I AM WILLING TO FILE MY RETURN AND PAY MY TAXES DUE AFTER CONSIDERING THE COST OF ACQUISITION, IMPROVEMENT AND INDEXATION . AS CAN BE SEEN FROM THE ABOVE STATEMENT ONLY AN AMOUNT OF RS.1,22,18,000 WAS FOUND IN THE LOCKER OF SBI, DWARAKAPURI BRANCH WHICH IS THE IMPUGNED BANK LOCKE R UNDER CONSIDERATION BY THE A.O. THIS SHOWS THAT THE ENTIRE AMOUNT OF RS.4.47 CRORES HAS NOT BEEN RECEIVED/AVAI LABLE WITH MR. JANARDHAN REDDY IN THAT LOCKER. THERE IS NO EVI DENCE OF RECEIPT OF SO MUCH CASH ON THE DAY LOCKER WAS OPERA TED AS ALLEGED. IT WAS FURTHER STATED BY SI JANARDHAN REDD Y THAT HE TRANSFERRED BALANCE FOUND CASH TO OTHER LOCKER. REG ARDING THE BALANCE CASH SUPPOSED TO HAVE RECEIVED NO EXPLANATI ON WAS FORTH COMING. 8.2 MOREOVER, LOOSE SHEET, WHICH WAS IMPOUNDED BY THE DEPARTMENT ON WHICH RELIANCE WAS PLACED,WAS AS UNDER : RECEIPTS EXPENDITURE 66.70 103 BLACK 50.00 25 ADVANCE 9.90 10 ----- 1.00 4 REG 3.25 ------- 142 50.00 25 ------ SON-IN-LAW 99.00 167 50.00 70.00 --------- 333.15 16.75(SIL) 349.90 -------- 416.60 TOTAL DUE 800 RECEIPT 416.60 CASH 10 -------- 383.40 118 LESS EXP. 167.00 100 216.40 218 THE EXACT COPY WAS ENCLOSED AS ANNEXURE 1 TO THIS O RDER. 8.2.1 AS CAN BE SEEN FROM THE ABOVE, THERE ARE PAY MENTS BY WAY OF DDS TO AN EXTENT OF 333.15( EXTREME LEFT ENTRIES). THESE NOTINGS INDICATE IN RS LAKHS, AS THE PAYMENTS MADE BY ASSESSEE BY WAY OF DDS TALLY WITH THE ENTRIES ON EX TREME LEFT. AMONG THE ENTRIES 16.75 WAS ALSO NOTED WITH SIL AS AN ABBREVIATION. THE TOTAL OF ABOVE WAS 349.90. ALONG WITH SOME RECEIPT OF 66.70, THE TOTAL RECEIPT WAS NOTED AT RS 416.60 (LAKHS). AGAINST RECEIPT OF 66.70 EXPENDITURE WAS SHOWN AT 167.00(LAKHS), OUT OF WHICH 103 WAS SHOWN AS BLACK IN THE DOCUMENT. THIS INDICATE THE PAYMENT BY SRI JANARDH AN REDDY IN BLACK BUT NOT RECEIPT IN BLACK. AN IMPORTANT ASP ECT WHICH REQUIRED TO BE NOTICED IS THAT THE PAYMENTS OF DD, PAID EVEN ON 05.10.2009 TO AN EXTENT OF MORE THAN RS. 1 CRORE WAS ALSO NOTED TO HAVE BEEN RECEIVED IN THE PAGE SEIZED FROM MR. JANARDHAN REDDY. IN THAT, IT WAS CLEARLY WRITTEN TH AT TOTAL DUE RS.800 RECEIPT 416.60 LESS EXPENSES 167 AND BALANCE 216.40. THIS INDICATES THAT THIS DOCUMENT COULD HAVE BEEN W RITTEN AFTER 05.10.2009 OR AFTER, AS PAYMENTS BY WAY OF DD S ON THAT DAY WERE NOTED. THERE IS NO DISPUTE WITH REFERENCE TO THE FACT THAT THE SAID PROPERTY WAS REGISTERED ON 05.10.2009 . THEREFORE THE DOCUMENT DOES NOT SUPPORT THE REVENUE CONTENTIO N THAT ON-MONEY WAS PASSED ON 24-09-09 THROUGH EXCHANGE I N LOCKERS OPERATED ON THAT DAY. SINCE THE DD RECEIVED ON 05.10.2009 WERE ALSO STATED AS RECEIVED IN THAT DOC UMENT (WHICH IS EXTRACTED ABOVE) AND RECEIPT OF ONLY 416 .90( INCLUDING 66.70) INDICATE THAT ON MONEY HAS NOT BE EN PASSED AS ON THAT DATE AS ALLEGED BY THE REVENUE. MORE OVE R THE 11 RECEIPT OF 66.90 WAS NOT AT ALL LINKED TO THE PROPE RTY IN QUESTION. THE PAYMENT OF RS 103 IN BLACK COULD HAVE BEEN FOR ANY OTHER TRANSACTION OF SRI JANARDHAN REDDY. HAD T HE MONEY BEEN RECEIVED PRIOR TO 05.10.2009, ON THE DAY OF E NTRIES IN THE SAID SEIZED DOCUMENT, THAT COULD HAVE BEEN MENTIONE D AS RECEIVED. IN VIEW OF THIS, THE DEPARTMENTS ALLEG ATION THAT BOTH THE LOCKERS ARE OPERATED ON THE SAME DAY BY THE TWO PERSONS IN DWARAKAPURI BRANCH AND CASH WAS TRANSFERRED FROM ON E LOCKER TO ANOTHER LOCKER COULD NOT BE BELIEVED AS THE IMPO UNDED DOCUMENT INDICATE OTHERWISE. THERE IS NO CO-RELATIO N BETWEEN THE PRESUMPTION DRAWN BY THE DEPARTMENT IN THE ORDE RS AND THE IMPOUNDED DOCUMENT. 8.3. MOREOVER, THE IMPOUNDED DOCUMENT DOES NOT INDICATE THAT THIS TRANSACTION PERTAIN TO ASSESSEE S PURCHASE. AS CAN BE SEEN FROM THE ABOVE, THERE ARE SOME RECEI PTS OF 66.70 WHICH IS NOT CO-RELATED TO ANY TRANSACTION. T HERE IS ALSO RECEIPT OF 333.15 WHICH IS EQUIVALENT VALUE OF ASSE SSEES TRANSACTIONS TO AN EXTENT OF 323.25. THE DIFFERENCE IS ALSO NOT RECONCILED. THERE IS ALSO NO EXAMINATION OF WHAT TH AT 16.75 PERTAINS TO WORDS SIL. IT MAY INDICATE SON-IN-LA W AS SHOWN IN THE EXPENDITURE COLUMN. THERE IS NO CO-RELATION WITH REFERENCE TO THE EXPENDITURE ALSO AND REVENUE DID N OT EXAMINE MR. JANARDHAN REDDY ON THE NATURE OF EXPENDITURE SH OWN AGAINST THE RECEIPTS OF 416.60. MAY BE AS SUBMITTED BY THE ASSESSEE COUNSEL, MR. JANARDHAN REDDY BEING IN REAL ESTATE BUSINESS, COULD HAVE CONSOLIDATED HIS TRANSACTIONS OF MORE THAN ONE SALE NOTED DOWN IN THAT SHEET. THEREFORE, ENTIRE TRANSACTION CANNOT BE ATTRIBUTED TO PURCHASE OF PRO PERTY BY ASSESSEE. SINCE THE BASIC PRESUMPTION IN REVENUE AR GUMENT THAT THE CASH HAS BEEN TRANSFERRED PRIOR TO REGISTR ATION, IN THE LOCKERS, IS NOT SUPPORTED BY THE ENTRIES IN THE SHE ET, IT CANNOT 12 BE STATED THAT ASSESSEE HAS PAID ENTIRE ON MONEY ON THAT DAY. MOREOVER, AS SEEN FROM THE IMPOUNDED DOCUMENT ITSEL F THERE IS ACKNOWLEDGE OF ASSESSEES DD RECEIPTS. WHETHER THE BALANCE AMOUNT OF 216.40 NOTED AS DUE WAS RECEIVED AFTER 05 .10.2009 OR NOT WAS NOT ASCERTAINABLE. AS SEEN FROM THE AMOU NT AVAILABLE IN THE LOCKER, THERE IS ONLY RS.1.22 CROR ES AVAILABLE IN THAT LOCKER. THERE IS NO EXPLANATION FROM MR. JANA RDHAN REDDY WHETHER THAT AMOUNT IS PART OF SO-CALLED ON M ONEY PAYMENT BY THE ASSESSEE OR PERTAINING TO ANY OTHER TRANSACTIONS AND WHERE WAS THE BALANCE OF MORE THAN 2.3CRORES, EVEN IF REVENUE CONTENTIONS ARE TO BE AC CEPTED. IN VIEW OF THIS, THERE IS MERIT IN THE CONTENTIONS OF THE ASSESSEE THAT THE STATEMENTS OF MR. JANARDHAN REDDY CANNOT B E RELIED UPON SO AS TO PASS ON THE LIABILITY TO THE ASSESSEE . 8.4 CONSIDERING THIS, WE CAN COME TO THE FOLLOWI NG CONCLUSIONS. IN THE PRESENT CASE, THE DOCUMENT IS N OT SPEAKING ONE AS THE NAME OF THE ASSESSEE DOES NOT APPEAR IN IT NOR ANY OTHER CORROBORATIVE EVIDENCE IS FOUND. FURTHER, THE LOOSE SHEET RELIED ON BY THE A.O. WAS NOT FOUND IN ASSESSEES P OSSESSION NOR WAS IT WRITTEN IN HIS HAND. IN THE ABSENCE OF D ETAILS AND CORROBORATIVE EVIDENCE, IT IS TO BE TERMED AS A DUM B DOCUMENT. DOCUMENT FOUND ON THIRD PARTYS PLACE CANNOT BE REL IED UPON TO FASTEN LIABILITY ON THE ASSESSEE. FOR THIS PROPO SITION, WE RELY ON THE FOLLOWING DECISIONS: (I) ACIT VS. SATYAPAL WASSAN (2007) 295 ITR (AT) 35 2 (JABALPUR); (II) CIT VS. KHAZAN SINGH & BROTHERS (2007) 304 ITR 243 (P & H); (III) CIT VS. GIRISH CHAUDHARY (2007) 163 TAXMAN 60 8 (DEL.); 13 (IV) BANSAL STRIPS (P.) LTD., VS. ACIT (2006) 99 IT D 177 (DEL.) (V) CIT VS. MAULI KUMAR K. SHAH (2008) 307 ITR 137 (GUJ.) (VI) ITO VS. HANUMAN PODDAR 98 TTJ 705 ASR; (VII) MM FINANCES P. LTD. VS. DCIT 107 TTJ CHENNAI 200. (VIII) CIT VS. SHIVAKANI CO. P. LTD. 159 ITR 71 (S C) (IX) BALDEV KRISHNAN KAPOOR VS. ACIT ITAT 68 ITD 37 (CHD.) (TM). 8.5 THE TRANSFER OF THE MONEY THROUGH LOCKER OF MR. V. KOTESWARA RAO TO THAT OF MR. M. JANARDHAN REDDY CAN NOT BE TAKEN AS CIRCUMSTANTIAL EVIDENCE FOR THE PAYMENT OF ON MONEY IN CASH SINCE THE BANK OFFICERS STATEMENT HAS NOT B EEN REBUTTED BY THE A.O. THE STATEMENT OF THE A.O. THAT MR. M. JANARDHAN REDDY HAD TWO LOCKERS IN DIFFERENT BANKS AND NECESSITY TO OPEN ONE MORE LOCKER IN THE SAME BRANC H IN WHICH MR. V. KOTESWARA RAO IS MAINTAINING A LOCKER GOES T O SHOW THAT MOTIVE OF THE ASSESSEE IS TO TRANSFER OF AMOUNTS TO THE LOCKER OF MR. M. JANARDHAN REDDY, IS MERELY A STATEMENT MADE ON PRESUMPTION AND SURMISES. THE FACT THAT THE DEPART MENT HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT TH E CASH DEPOSITED IN THE LOCKER ORIGINATED FROM THIS TRANSA CTION BY THE ASSESSEE WITH JANARDHAN REDDY COUPLED WITH THE FACT THAT THE BANK MANAGER STATEMENT HAD NOT BEEN REBUTTED BY THE A.O. SUGGESTS THAT THE STATEMENT OF MR. M. JANARDHAN RED DY THAT CASH ON 24.09.2009 HAD BEEN TRANSFERRED FROM LOCKER NO.7 BELONGING TO THE ASSESSEE TO LOCKER NO.6 OPERATED B Y MR. M. JANARDHAN REDDY, CANNOT BE TAKEN AS RELIABLE STATEM ENT, HAVING EVIDENTIARY VALUE. 14 8.6 THE DEPARTMENT CANNOT DRAW AN INFERENCE ON THE BASIS OF SUSPICION AND CONJECTURES AND SURMISES. RE LIANCE IS PLACED IN THE CASE OF M.M. FINANCIERS (P) LTD., VS. DCIT 107 TTJ 200 (CHENNAI), CIT VS. SIVAKASI CO. P. LTD., 15 9 ITR 71. THE HIGH COURT OF DELHI IN 28 TAXMAN.COM 269 IN THE CASE OF CIT VS JAIPAL AGARWAL WHERE FIGURES IN THE DOCUMENT DID NOT CORRELATE WITH ANY DATE OR DETAILS NOR WAS DOCUMENT SIGNED, HELD THAT THE DOCUMENT AS DUMB DOCUMENT AND ADDITIO N U/S.69B WAS NOT JUSTIFIED. IN THE PRESENT CASE, THE LOOSE SHEET FOUND AND ENTRIES DO NOT TALLY FULLY WITH THE PAYME NTS MADE AS APPEARING IN PAGE 17 OF THE PAPER BOOK. 8.7 ASSESSING OFFICERS OBSERVATION RELATING TO TH E MARKET VALUE OF LAND THAT IT DOES NOT REFLECT REASO NABLE MARKET VALUE OF THE PROPERTY AND THEREFORE, THERE IS UNDER STATEMENT OF CONSIDERATION IS INCORRECT INASMUCH AS THE SRO HAS ACCEPTED THE RATE OF THE PROPERTY FOR STAMP DUTY WHICH IS DE TERMINED TAKING INTO ACCOUNT THE MARKET VALUE. NO UNDER-VALU ATION OF RATE OF PROPERTY CAN BE DETERMINED BY THE A.O. AS T HE SAME WAS ACCEPTED BY THE SUB REGISTRAR OFFICE FOR THE PU RPOSE OF STAMP DUTY. IN BAI HIRA DEVI VS. OFFICIAL ASSIGNEE AIR 1958 SC 448, THE HONBLE SUPREME COURT OBSERVED THAT SECTIO N 91 OF THE EVIDENCE ACT IS BASED ON WHAT IS SOME TIMES DES CRIBED AS THE BEST EVIDENCE RULE . THE BEST EVIDENCE ABOUT CONTENTS OF DOCUMENT IS THE DOCUMENT ITSELF. IN THE CASE OF THE ASSESSEE, REGISTERED DOCUMENT CONSTITUTES THE BEST EVIDENCE A BOUT LAND TRANSACTION, IN THE ABSENCE OF ANY COGENT EVIDENCE. 8.8 STATEMENT RECORDED AT THE BACK OF THE ASS ESSEE CANNOT BE MADE USE OF WITHOUT GIVING AN OPPORTUNITY FOR CROSS- EXAMINATION. IN THE PRESENT CASE, MR. M. JANARDHAN REDDY WAS NOT SUBJECTED TO CROSS-EXAMINATION. RELIANCE IS PLACED ON 15 THE DECISION OF KISHINCHAND CHELLARAM VS. CIT 125 I TR 713 (SC) AND CIT VS. EASTERN COMMISSION ENTERPRISE 210 ITR 103 (KOL.). HENCE, IN THE ABSENCE OF CROSS-EXAMINATION, THE STATEMENT OF THE VENDOR (JANARDHAN REDDY) CANNOT BE MADE USE OF IN PREFERENCE OVER THE STATEMENT OF THE VEND EE (ASSESSEE) WHICH IS NOT DOCUMENTARY EVIDENCE. 8.9 PRESUMPTION UNDER SECTION 132(4) WOULD NOT BE APPLICABLE TO A THIRD PARTY FROM WHOSE POSSESSION S UCH PAPERS AND DOCUMENTS HAVE NOT BEEN SEIZED BY THE REVENUE. A PRESUMPTION CAN BE DRAWN ON THE BASIS OF THE POSSES SION OF THE DOCUMENT FOUND DURING THE COURSE OF SEARCH ONLY AGAINST A SEARCHED PERSON. RELIANCE IS PLACED ON THE DECISION OF SMC SHARE BROKERS VS. DCIT 109 TTJ 700 (DEL.). ALSO, TH ERE IS A STATUTORY PRESUMPTION UNDER SECTION 132(4A) THAT WH ERE IN THE COURSE OF SEARCH ANY MONEY ETC., IS FOUND IN POSSES SION AND CONTROL OF A PERSON SEARCHED, THE PRESUMPTION IS TH AT THE SAME BELONGS TO HIM. SINCE THE CASH WAS FOUND FROM THE POSSESSION OF MR. M. JANARDHAN REDDY, ON THE BASIS OF STATUTOR Y PRESUMPTION THE CASH BELONGS TO HIM. THE CO-ORDINAT E BENCH OF HYDERABAD IN CRESCENT BUILDERS ITA NO.494/HY/2010 HAD DELETED THE ADDITIONS W.R.T PAYM ENT OF ON-MONEY AND HAS ELABORATELY DISCUSSED AND HELD THA T THE DEPARTMENT HAS TO PROVE NEXUS OF RECEIPTS WITH COGE NT MATERIAL THAT ON-MONEY HAS BEEN PAID FOR MAKING THE ADDITION . 9. FOR THE ABOVE STATED REASONS, THE SUSTENANCE OF THE ADDITION OF RS.4.77 CRORES ON ACCOUNT OF ALLEGE D PAYMENT OF ON MONEY BY THE ASSESSEE IN RESPECT OF PROPERTY TRA NSACTION AT JUBILLEEHILLS, ON THE BASIS OF SWORN STATEMENT OF T HE VENDOR AND ALLEGED NOTINGS IS NOT JUSTIFIED AND THE ORDER OF THE LD. CIT(A) CONFIRMING THE ORDER OF THE A.O. WITH RESPEC T TO ADDITION 16 OF RS.4.47 CRORES IS NOT SUSTAINABLE. ASSESSEE GROU NDS ARE ALLOWED. 10. WITH RESPECT TO GROUND NO.8 REGARDING DISALLOWANCE OF EXPENSES OF RS.4,16,804/- MADE BY T HE REVENUE AUTHORITIES ON THE GROUND THAT SOME OF THE VOUCHERS ARE SELF-MADE AND SOME ARE WITHOUT PROPER NARRATION , WE ARE OF THE OPINION THAT CONSISTENTLY 10% TO 15% DISALLOWAN CE IS BEING MADE BY THE REVENUE AUTHORITIES FOR NON-PRODUCTION OF PROPER VOUCHERS AND THE A.O. HAS FOLLOWED THE SAME. WE DO NOT FIND ANY INFIRMITY IN THIS REGARD. THIS GROUND 8 OF THE ASSESSEE IS DISMISSED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.09.2014. SD/- SD/- (B.RAMAKOTAIAH) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 05 TH SEPTEMBER, 2014 VBP/- COPY TO 1. MR. V. KOTESWARA RAO, VILLA NO.41, WHISPER VALLE Y, NEAR RAIDURG, GOLCONDA POST, HYDERABAD 500 008. 2. DCIT, CENTRAL CIRCLE-4, HYDERABAD 3. CIT(A)-I, HYDERABAD 4. CIT, (CENTRAL), HYDERABAD 5. D.R. A BENCH, ITAT, HYDERABAD. 17 ANNEXURE