ACIT, Central Circle, Tirupathi V. Sri Y. Siddaiah Naidu, Tirupathi

ITA 1878/HYD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87296 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 04-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained cash credit; Unexplained investment; Search and seizure; Loose papers; Opportunity of being heard; Source of fund; Additional evidence; Question of law; Block assessment
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER S. NO. ITA NO. A.Y. APPELLANT RESPONDENT 1. 1907/H/11 2004-05 SRI Y. SIDDAIAH NAIDU, TIRUPATHI. PAN AAQPY4810J ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, TIRUPATHI 2. 1908/H/11 2006-07 -DO- -DO- 3. 1909/H/11 2007-08 -DO- -DO- 4. 1910/H/11 2008-09 -DO- -DO- 5. 1878/H/11 2006-07 ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, TIRUPATHI. SRI Y. SIDDAIAH NAIDU, TIRUPATHI. PAN AAQPY4810J 6. 1879/H/11 2007-08 -DO- -DO- 7. 1880/H/11 2008-09 -DO- -DO- ASSESSEE BY SHRI S. RAMA RAO REVENUE BY SHRI RAJAT MITRA DATE OF HEARING 29-01-2015 DATE OF PRONOUNCEMENT 06-02-2015 O R D E R PER BENCH: THESE ARE GROUP OF 7 APPEALS BOTH BY ASSESSEE AND THE DEPARTMENT AGAINST SEPARATE ORDERS OF LD. CIT(A)-VII, HYDERABA D. APPEAL FOR THE AY 2004-05 IS BY ASSESSEE ALONE WHEREAS THERE ARE CROS S APPEALS FOR AYS 2006-07, 2007-08 AND 2008-09. SINCE ASSESSEE IS SAM E AND ISSUES ARE MORE OR LESSCOMMON, ALL THESE APPEALS ARE CLUBBED A ND HEARD TOGETHER AND, THEREFORE, THE SAME ARE BEING DISPOSED OF BY T HIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU ITA NO. 1907/HYD/2011 FOR AY 2004-05 BY ASSESSEE 2. THE SOLITARY ISSUE IN THE AFORESAID APPEAL OF AS SESSEE IS WITH REGARD TO ADDITION OF AN AMOUNT OF RS. 1.00 LAKH AS UNEXPL AINED CREDIT. 3. BRIEFLY THE FACTS ARE, ASSESSEE AN INDIVIDUAL IS AN EX-SERVICE MAN DERIVING INCOME FROM PENSION. SUBSEQUENTLY, AS STAT ED BY ASSESSEE, HE JOINED AS A MANAGER IN A REAL ESTATE CONCERN AND RE CEIVING SALARY. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN CASE OF SRI VEMIREDDY PRABHAKAR REDDY ON 23/01/2008. AS A CONSEQUENCE OF SEARCH AND SEIZURE OPERATION, A NOTICE U/S 153A OF THE ACT WAS ISSUED TO ASSESSEE . IN RESPONSE TO THE SAID NOTICE, ASSESSEE FILED RETURN OF INCOME ON 29/ 08/2008 DECLARING TOTAL INCOME OF RS. 2,97,900. DURING THE ASSESSMENT PROCE EDING, AO NOTICED THAT ASSESSEE HAS SHOWN THE FOLLOWING LOANS: 1. SYNDICATE BANK MORTGAGE LOAN RS. 3,35,000 2. LOAN FROM GIRI, SINGAPORE (NRI) RS. 1,00,000 AS OBSERVED BY AO, SINCE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE TO SUBSTANTIATE SUCH LOAN, LOAN AMOUNT WAS TREATED AS UNEXPLAINED CREDIT AND ADDED TO INCOME OF ASSESSEE. BEING AGGRIEVED OF SUC H ADDITION, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A). 4. LD. CIT(A) ACCEPTED ASSESSEES EXPLANATION WITH REGARD TO MORTGAGE LOAN OF RS. 3,35,000 FROM SYNDICATE BANK. HOWEVER, IN SO FAR AS LOAN OF RS. 1.00 LAKH CLAIMED TO HAVE BEEN TAKEN FROM SHRI L. GIRI BABU, LD. CIT(A) CONFIRMED THE ADDITION BY OBSERVING THAT ASSESSEE H AS FAILED TO CORRELATE THE RECEIPT OF LOAN FROM SHRI L. GIRI BABU BY PRODU CING SPECIFIC DETAILS LIKE BANK STATEMENT, HENCE, HE HELD THAT AS GENUINENESS OF THE LOAN IS NOT PROVED, ADDITION TO THAT EXTENT NEEDS TO BE CONFIRM ED. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI ALS ON RECORD AS WELL AS THE ORDERS OF THE REVENUE AUTHORITIES. LD. AR SUBMITTED BEFORE US THAT CONFIRMATION GIVEN BY THE SAID CREDITOR BY WAY OF AN AFFIDAVIT CLEARLY ESTABLISHES THE FACT THAT LOAN IS GENUINE. HE FURTH ER SUBMITTED, THE FACT THAT THE SAID CREDITOR WAS WORKING ABROAD IS PROVED FROM COPY OF THE PASSPORT SUBMITTED BEFORE THE FIRST APPELLATE AUTHORITY. AS CAN BE SEEN, IN THE SWORN 3 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU AFFIDAVIT DT. 18/02/2011, THE CREDITOR SHRI L. GIRI BABU HAS STATED THAT THE AMOUNT OF RS. 1.00 LAKH WAS ADVANCED TO ASSESSEE TH ROUGH CHEQUE NO. 603464 DATED 11/03/04 DRAWN ON ICICI BANK, TIRUPATH I. IT HAS FURTHER BEEN STATED IN THE SAID AFFIDAVIT THE SAID AMOUNT WAS OU T OF HIS EARNING WHILE HE WAS WORKING IN DEUTSCHE BANK, SINGAPORE. HOWEVER, O N A PERUSAL OF THE PASSPORT, IT IS VERY MUCH EVIDENT THAT THE SAME WAS ISSUED ON 16/12/09. THEREFORE, IT IS NOT UNDERSTOOD HOW IT PROVES THE F ACT THAT THE SAID CREDITOR WAS WORKING IN SINGAPORE IN 2004 AND FROM THE INCOM E EARNED THEREIN, THE SAID CREDITOR ADVANCED THE AMOUNT OF RS. 1 LAKH. MO REOVER, IT IS A FACT ON RECORD THAT ASSESSEE HAS NOT PRODUCED RELEVANT BANK STATEMENT TO CORRELATE THE RECEIPT OF LOAN FROM THE SAID CREDITO R. IN THESE CIRCUMSTANCES, WE CANNOT RECORD A CONCLUSIVE FINDING HOLDING THE L OAN TRANSACTION TO BE GENUINE. IN THE AFORESAID VIEW OF THE MATTER, WE AR E INCLINED TO REMIT THE ISSUE BACK TO THE FILE OF AO TO EXAMINE IT AFRESH A ND IF ASSESSEE IS ABLE TO ESTABLISH THE FACT THAT THE AMOUNT WAS RECEIVED THR OUGH BANKING CHANNEL FROM THE CREDITOR BY PRODUCING ADEQUATE EVIDENCE, A O MAY CONSIDER ACCEPTING THE SAME. 6. IN THE RESULT, ASSESSEES APPEAL IN ITA NO. 1907 /H/11 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1908/HYD/2011 FOR AY 2006-07 BY ASSESSEE 7. THE ONLY ISSUE IN DISPUTE IN THE AFORESAID APPEA L IS IN RELATION TO ADDITION OF AN AMOUNT OF RS. 29,70,000. 8. BRIEFLY THE FACTS RELATING TO THE ISSUE IN DISPU TE ARE, DURING THE ASSESSMENT PROCEEDING, AO NOTICED THAT ASSESSEE HAS SHOWN A LOAN OF RS. 29.70 LAKHS FROM SHRI A. SUBRAMANYAM. AS NOTED BY A O, SINCE ASSESSEE FAILED TO PRODUCE EVIDENCES LIKE ADDRESS, SOURCE OF INCOME OF THE CREDITOR, MODE OF PAYMENT, INCOME-TAX PARTICULARS ETC., HE TR EATED THE LOAN AS UNEXPLAINED CREDIT AND ADDED IT TO THE INCOME OF TH E YEAR. ASSESSEE CHALLENGED THE ADDITION IN APPEAL PREFERRED BEFORE LD. CIT(A). 9. BEFORE THE FIRST APPELLATE AUTHORITY, IT WAS SUB MITTED BY ASSESSEE THAT THE LOAN CREDITOR IS HAVING 10 ACRES OF AGRICU LTURAL LAND, OUT OF WHICH, 4 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU SIX ACRES ARE HAVING MANGO GARDEN AND IN OTHER FOUR ACRES SUGAR CANE AND TOMATO CULTIVATION IS GOING ON. IT WAS SUBMITTED TH AT LOAN CREDITOR DERIVES ANNUAL AGRICULTURAL INCOME OF RS. 6,50,000. ASSESSE E ALSO FURNISHED AN AFFIDAVIT OF THE LOAN CREDITOR STATING THE AFORESAI D FACTS. LD. CIT(A), HOWEVER, REJECTED ASSESSEES EXPLANATION AND HELD T HAT LOAN GIVEN CANNOT BE ACCEPTED AS GENUINE AS THE LOAN AMOUNT WAS THREE TO FOUR TIMES MORE THAN THE CREDITORS ANNUAL INCOME. ACCORDINGLY, HE CONFIRMED THE ADDITION. 10. THE LD. AR REFERRING TO THE AFFIDAVIT OF THE LO AN CREDITOR SHRI A. SUBRAMANYAM AND INCOME CERTIFICATE ISSUED BY VRO SU BMITTED THAT ASSESSEE WAS HAVING AGRICULTURAL INCOME AS WELL AS PAST SAVINGS TO ADVANCE LOAN. FURTHER, IT WAS SUBMITTED BY ASSESSEE THAT LOAN WAS RECEIVED THROUGH BANKING CHANNEL AS CREDITOR HAS IS SUED 3 CHEQUES, ALL DATED 29/07/2007 OF RS. 9,90,000 EACH. THUS, IT WAS SUBMITTED, AS THE CREDITOR HAS CONFIRMED THE LOAN AND THE GENUINENESS OF THE TRANSACTION CANNOT BE DOUBTED AS IT IS THROUGH BANKING CHANNEL, ADDITION MADE IS NOT JUSTIFIED. 11. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED TH AT BEFORE AO, ASSESSEE DID NOT SUBMIT ANY EVIDENCE TO PROVE THE L OAN TRANSACTION. IT WAS SUBMITTED THAT EVEN BEFORE LD. CIT(A) ALSO, ASSESSE E DID NOT BRING ON RECORD THE FACT THAT LOAN AMOUNT WAS RECEIVED THROU GH CHEQUES. THEREFORE, IN ABSENCE OF EVIDENCE AND FACT THAT CREDITWORTHINE SS OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTION WAS NOT PROVED, ADDITION MADE WAS JUSTIFIED. 12. HAVING CONSIDERED THE SUBMISSIONS AND PERUSED T HE MATERIALS ON RECORD, WE ARE OF THE VIEW THAT THE MATTER REQUIRES RE-EXAMINATION BY AO. THOUGH IT IS A FACT THAT THE LOAN CREDITOR HAS CONF IRMED OF ADVANCING THE LOAN AND TO SOME EXTENT IT IS ALSO PROVED THAT THE LOAN CREDITOR WAS HAVING INCOME FROM AGRICULTURAL ACTIVITIES, BUT, IT REQUIR ES TO BE EXAMINED WHETHER THE CREDITOR WAS HAVING CREDITWORTHINESS TO ADVANCE LOAN OF RS. 29.70 LAKHS. FURTHER, GENUINENESS OF THE TRANSACTION ALSO REQUIRES TO BE PROVED. IN THIS CONTEXT, LD. AR SUBMITTED BEFORE US THAT LO AN TRANSACTION WAS THROUGH BANKING CHANNEL, BUT, IT APPEARS FROM THE O RDERS OF THE DEPARTMENTAL AUTHORITIES, ASSESSEE NEVER BROUGHT SU CH FACT TO THEIR NOTICE. 5 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU IN THESE CIRCUMSTANCES, WE ARE INCLINED TO REMIT TH E MATTER BACK TO THE FILE OF THE AO TO EXAMINE THE ISSUE AFRESH AFTER GIVING DUE OPPORTUNITY OF HEARING TO ASSESSEE. 13. IN THE RESULT, THIS APPEAL OF ASSESSEE IN ITA N O. 1908/HYD/2011 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1878/HYD/2011 BY REVENUE FOR AY 2006-07 14. THE FIRST EFFECTIVE GROUND OF THE DEPARTMENT IS WITH REGARD TO THE DECISION OF THE LD. CIT(A) IN DELETING ADDITION OF RS. 4,30,22,313. 15. BRIEFLY THE FACTS RELATING TO THE AFORESAID ISS UE ARE, DURING THE ASSESSMENT PROCEEDING, IT WAS NOTICED BY AO THAT IN COURSE OF SEARCH AND SEIZURE OPERATION, A DOCUMENT WAS FOUND MARKED AS A/YSN/RES/4 CONTAINING PAGE NOS. 22 TO 29 WHEREIN MONIES ADVANC ED ALONG WITH INTEREST ACCRUED THEREIN HAVE BEEN NOTED. HE, FURTHER, OBSER VED THAT THE SEIZED MATERIAL CONTAINED FINANCIAL TRANSACTIONS SHOWING THE ACCOUNT OF SHRI K.C. REDDAPPA NAIDU AS ON 30/04/2007, 31/05/2007, 31/07/ 2007 AND 31/08/2007. AO NOTED, WHEN THE SAME WAS COMPARED W ITH THE SEIZED MATERIAL MARKED AS A/KCR/58 CONTAINING PAGES 45 T O 47 SEIZED FROM THE BUSINESS PREMISES OF SHRI K.C. REDDAPPA NAIDU, IT W AS FOUND THAT NOT ONLY THE NAME OF ASSESSEE AND HIS WIFE WERE MENTIONED IN THE SEIZED MATERIAL BUT THEY CONTAIN DETAILS OF MONIES LENT TO K.C. RED DAPPA NAIDU BY ASSESSEE AND THE SAME HAS BEEN DULY SIGNED BY ASSES SEE. AO NOTED THAT HAND-WRITING AND STATIONARY USED IN BOTH THE SEIZED MATERIALS WERE FOUND TO BE THE SAME. THOUGH, ASSESSEE DISOWNED THE SEIZED M ATERIALS BUT AO WAS NOT CONVINCED WITH THE SAME. ACCORDINGLY, HE CALCUL ATED THE PEAK AMOUNT OF THE CASH FLOW IN THE SEIZED MATERIAL AT RS. 4,30 ,22,313 AND TREATED IT AS UNDISCLOSED INCOME OF ASSESSEE. BEING AGGRIEVED OF SUCH ADDITION MADE BY AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A). 16. BEFORE LD. CIT(A), ASSESSEE SUBMITTED THAT FIRS TLY THE FIGURE OF RS. 4,30,22,313 IS DUE TO ADDITION MISTAKE OF THE AO OF THE FIGURES IN THE SEIZED MATERIAL WHICH ACTUALLY SHOULD BE RS. 4,22,30,313. IT WAS FURTHER ARGUED THAT THE SEIZED MATERIAL RELIED UPON BY AO IS A DUM B DOCUMENT AS IT DOES 6 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU NOT HAVE ANY NARRATION ABOUT THE TRANSACTION. IT WA S ALSO ARGUED THAT NEITHER THE SEARCH PARTY NOR THE AO HAD SOUGHT ANY EXPLANATION FROM ASSESSEE WITH REGARD TO SEIZED MATERIAL. THEREFORE, WHEN NO ENQUIRY WAS CONDUCTED WITH REGARD TO THE NATURE OF THE NOTINGS MADE IN THE SEIZED MATERIAL, AO SHOULD NOT HAVE PRESUMED THE FIGURES M ENTIONED THEREIN AS UNDISCLOSED INCOME OF ASSESSEE. IT WAS SUBMITTED TH AT ASSESSEE IS WORKING WITH SHRI K.C. REDDAPPA NAIDU AS AN EMPLOYEE AND HA S GOT A VERY LIMITED ROLE IN THE BUSINESS TRANSACTIONS, THEREFORE, AO SH OULD NOT HAVE PRESUMED THAT ASSESSEE WOULD HAVE HAD SO MUCH OF EARNING FR OM REAL ESTATE BUSINESS SO AS TO ADVANCE LOAN. 17. LD. CIT(A) AFTER EXAMINING IN DETAIL THE SEIZED MATERIALS CONCLUDED THAT FROM THE CONTENTS OF THE SEIZED MATERIAL, IT I S VERY DIFFICULT TO DETERMINE THE NATURE OF TRANSACTION. HE FURTHER TOOK NOTE OF THE FACT THAT NEITHER AO NOR THE SEARCH PARTY HAVE EXAMINED ASSESSEE WITH RE GARD TO THE NATURE OF THE TRANSACTIONS AS PURPORTED TO HAVE BEEN MENTIONE D IN THE SEIZED MATERIAL. HE NOTED THAT AO MERELY ADDING UP THE FIG URES HAD MADE ADDITION OF RS. 4,30,22,313 WITHOUT BRINGING ON RECORD ANY M ATERIAL TO ESTABLISH THAT ASSESSEE HAD DEALING OR PROPOSED DEALING IN REAL ES TATE AND WHETHER SUCH DEAL WAS CRYSTALLIZED AND WHO ARE THE PURCHASING PA RTY. THUS, IT WAS CONCLUDED BY LD. CIT(A) THAT ON THE BASIS OF SUCH D UMB DOCUMENT, NO ADDITION CAN BE MADE. ACCORDINGLY, HE DELETED THE A DDITION. 18. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IALS ON RECORD. THE LD. DR CONTENDED BEFORE US THAT AS SEIZED MATERIAL WAS RECOVERED FROM THE PREMISES OF ASSESSEE, PRESUMPTION WOULD BE THAT THE CONTENTS OF THE SEIZED MATERIAL REPRESENT THE INCOME OF ASSESSEE. H OWEVER, LD. DR ACCEPTED THAT THE CORRECT FIGURE AS PER THE SEIZED MATERIAL IS RS. 4,22,30,313 AND NOT AS MENTIONED BY AO. THE LD. AR ON THE OTHER HAND STRONGLY SUPPORTING THE CONCLUSION OF LD. CIT(A) SU BMITTED THAT AT THE TIME OF SEARCH NEITHER THE SEARCH PARTY HAS ASKED ANY QU ESTION WITH REGARD TO SEIZED MATERIAL FROM ASSESSEE NOR AT THE TIME OF AS SESSMENT PROCEEDING ALSO, AO HAS EXAMINED ASSESSEE TO VERIFY THE TRUE N ATURE OF NOTINGS MADE IN THE SEIZED MATERIAL. THUS, IT WAS SUBMITTED, WIT HOUT MAKING ANY ENQUIRY AO MERELY ON PRESUMPTIONS AND SURMISES CANNOT TREAT THE AMOUNTS MENTIONED IN THE SEIZED MATERIAL AS UNDISCLOSED INC OME OF ASSESSEE. LD. 7 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU AR SUBMITTED THAT WHILE CONSIDERING IDENTICAL ISSUE ARISING OUT OF SIMILAR ADDITION MADE IN CASE OF SHRI K.C. REDDAPPA NAIDU O N THE BASIS OF THE SAME SEIZED MATERIAL, ITAT UPHELD THE LD. CIT(A)S ORDER IN DELETING SUCH ADDITION BY TREATING THE SEIZED MATERIAL AS DUMB DO CUMENTS. 19. HAVING HEARD THE PARTIES AND PERUSED THE MATERI ALS ON RECORD, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A) W HILE DELETING THE ADDITION. ON A PERUSAL OF SEIZED MATERIAL WHICH ALSO FORM PAR T OF THE LD. CIT(A)S ORDER, IT IS VERY MUCH CLEAR THAT FROM SUCH NOTINGS , IT CANNOT BE DEDUCED WHETHER THEY ARE RECEIPT OR PAYMENTS NOR IT CAN BE CONCLUDED WHETHER THEY ARE IN RELATION TO ANY PARTICULAR TRANSACTION AS NO NAMES HAVE BEEN MENTIONED. IN THESE CIRCUMSTANCES, NO ADDITION CAN BE MADE ON THE BASIS OF SUCH A DUMB DOCUMENT. IT IS WORTH MENTIONING THA T WHILE CONSIDERING SIMILAR NATURE OF ADDITION MADE IN CASE OF SHRI K.C . REDDAPPA NAIDU ON THE BASIS OF SAME SEIZED MATERIAL, THE COORDINATE BENCH OF TRIBUNAL IN ITA NO. 1450/HYD/2012 AND OTHERS DATED 16/05/2014, HELD AS UNDER: 107. WE HAVE HEARD THE PARTIES, PERUSED THE RELEVA NT MATERIALS ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE REVENUE AUTHORI TIES. IT IS APPARENT FORM THE ASSESSMENT ORDER THAT ADDITION OF RS. 4,82,30,313/- WAS MADE SOLELY ON THE BASIS OF PAGE NO. 45 OF SEIZED MATERIAL MARKED AS A NNEXURE A/KCR/58 FOUND AND SEIZED IN COURSE OF SEARCH AND SEIZURE OPERATIO N IN CASE OF KCR HOMES AND DEVELOPERS. A PERUSAL OF THE SEIZED MATERIAL, A COPY OF WHICH IS AT PAGE 262 OF THE ASSESSEES PAPER BOOK, SHOWS CERTAIN AMO UNTS ALONG WITH DATES HAVING BEEN NOTED THERE IN TOTALLING TO RS. 4,22,30 ,313/- INCLUDING INTEREST OF RS. 15,30,313/-. NOTHING HAS BEEN INDICATED WHETHER THE FIGURES MENTIONED DENOTE RECEIPTS OR PAYMENTS. THE DOCUMENT ALSO DOES NOT BEAR SIGNATURE OF EITHER THE ASSESSEE OR ANYONE ELSE. IT IS ALSO A FA CT THAT THIS PAPER WAS SEIZED FROM KCR HOMES AND DEVELOPERS AND NOT THE ASSESSEE. THERE IS ALSO NO ALLEGATION THAT THE ENTRIES IN THE LOOSE PAPER WAS MADE BY THE ASSESSEE. IN THESE CIRCUMSTANCES IT IS NOT AT ALL POSSIBLE TO TR EAT THE FIGURES MENTIONED IN THE SEIZED DOCUMENT AS TRANSACTIONS OF THE ASSESSEE IN ABSENCE OF ANY OTHER CORROBORATIVE EVIDENCE BROUGHT ON RECORD TO CORELAT E THE ENTRIES MADE IN THE SEIZED MATERIAL TO THE ASSESSEE. IN THESE CIRCUMSTA NCES EXPLANATION OF THE ASSESSEE WITH REGARD TO THE SEIZED DOCUMENT CANNOT BE REJECTED ON MERE PRESUMPTIONS AND SURMISES. ON GOING THROUGH THE ORD ER OF THE CIT(A) IT BECOMES CRYSTAL CLEAR THAT CIT(A) AFTER CONSIDERING ALL ASPECTS OF THE MATTER HAS ARRIVED AT A FINDING OF FACT THAT THE ENTRIES M ADE IN THE LOOSE PAPER CANNOT BE TREATED TO BE TRANSACTIONS OF THE ASSESSEE. THE DEPARTMENT HAS FAILED TO CONTROVERT SUCH FINDING OF FACT BY BRINGING ANY OTH ER CREDIBLE EVIDENCE ON RECORD. HIGH COURTS AS WELL AS DIFFERENT BENCHES OF THE TRIBUNAL IN A NUMBER OF DECISIONS HAVE HELD THAT ADDITIONS CANNOT BE MADE S OLELY ON THE BASIS OF LOOSE PAPERS FOUND IN SEARCH AS THEY ARE NOTHING BUT DUMB DOCUMENTS UNLESS THERE ARE OTHER EVIDENCES TO ESTABLISH THE ENTRIES MADE I N SUCH LOOSE PAPERS ARE AUTHENTIC. SOME OF THE DECISIONS ARE REFERRED TO HE REUNDER: 1. CIT VS. DINESH JAIN, HUF [2012] 211 TAXMAN 23 (D ELHI) 2. ACIT VS. J.P MORGAN INDIA (P) LTD., 46 SOT 250 8 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU 3. CIT VS. JAIPAL AGGARWAL [2013] 212 TAXMAN 1 (DEL HI) 4. CIT VS. ANIL BHALLA, 322 ITR 191 (DEL.) THEREFORE, CONSIDERING THE FACTS AND MATERIALS ON R ECORD IN THE LIGHT OF THE RATIO LAID DOWN IN THE AFORESAID DECISIONS, WE DO NOT SEE ANY REASON TO UNSETTLE THE FINDING OF THE CIT(A). THE GROUND IS DISMISSED. IN VIEW OF THE AFORESAID FINDING OF THE COORDINATE BENCH, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). A CCORDINGLY, ORDER OF LD. CIT(A) ON THIS ISSUE IS UPHELD AND THIS GROUND OF R EVENUE IS DISMISSED. 20. THE NEXT ISSUE IS WITH REGARD TO DELETION OF AN AMOUNT OF RS. 4,38,000 BY LD. CIT(A). 21. BRIEFLY THE FACTS ARE, DURING THE ASSESSMENT PR OCEEDING, AO ON THE BASIS OF SEIZED MATERIAL MARKED AS ANNEXURE NO. A/S SVG/2 CAME TO A CONCLUSION THAT ASSESSEE HAS PURCHASED A LAND IN HI S WIFES NAME FOR A CONSIDERATION OF RS. 4,38,000. SINCE, ACCORDING TO AO, THE CONSIDERATION PAID WAS NOT ACCOUNTED FOR, THE SAME WAS TREATED AS UNDISCLOSED INVESTMENT AND ADDED TO THE INCOME OF ASSESSEE. ASS ESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(A). 22. BEFORE THE FIRST APPELLATE AUTHORITY, IT WAS SU BMITTED BY ASSESSEE THAT HE AND HIS WIFE HAD JOINTLY PURCHASED A LAND F OR A CONSIDERATION OF RS. 4,38,000 AND BOTH OF THEM HAVE DISCLOSED THIS FACT IN THE RETURN FILED BY THEM PRIOR TO THE SEARCH AS WELL AS IN PURSUANCE TO NOTICE ISSUED U/.S 153A. LD. CIT(A) AFTER VERIFYING THE FACTS AND MATERIALS ON RECORD, FOUND THE AFORESAID STATEMENT OF ASSESSEE TO BE CORRECT. HE O BSERVED THAT IN THE BALANCE SHEET ASSESSEE HAD DISCLOSED RS. 2,44,238 A S HIS SHARE IN PURCHASE OF SITE. HE ALSO NOTED THAT ASSESSEES WIF E SMT. Y. PRANAYATI HAD FURNISHED SIMILAR INFORMATION IN THE RETURN FILED B Y HER. THEREFORE, CONSIDERING THE FACT THAT INVESTMENT WAS DISCLOSED TO THE DEPARTMENT, LD. CIT(A) DELETED THE ADDITION. 23. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IALS ON RECORD. ON A PERUSAL OF RETURN OF INCOME FILED BY ASSESSEE ORI GINALLY AS WELL AS IN PURSUANCE TO NOTICE U/S 153A OF THE ACT, COPIES OF WHICH HAVE BEEN PLACED IN ASSESSEES PAPER BOOK, IT IS VERY MUCH CLEAR THA T ASSESSEE HAS DISCLOSED THE INVESTMENT MADE IN PURCHASE OF LAND. SIMILARLY, HIS WIFE HAS 9 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU ALSO DISCLOSED THE INVESTMENT MADE BY HER IN THE RE TURN FILED. THEREFORE, WHEN THE INVESTMENT MADE BY ASSESSEE AND HIS WIFE H AVE BEEN DISCLOSED TO THE DEPARTMENT PRIOR TO THE SEARCH AND IS FROM E XPLAINABLE SOURCES, THERE IS NO REASON TO TREAT IT AS UNDISCLOSED INVESTMENT. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A) IN DE LETING THE SAME. IN THE RESULT, APPEAL OF REVENUE IN ITA NO. 1878/HY D/2011 IS DISMISSED. ITA NO. 1909/HYD/2011 FOR AY 2007-08 BY ASSESSEE 24. THE FIRST ISSUE IN ASSESSEES APPEAL IS IN RESP ECT OF ADDITION OF RS. 4,24,000. 25. BRIEFLY THE FACTS ARE, DURING THE ASSESSMENT PR OCEEDING, AO FOUND THAT ASSESSEE DURING THE YEAR HAS TAKEN TOTAL LOAN OF RS. 22,24,000. BY OBSERVING THAT ASSESSEE COULD NOT PRODUCE EVIDENCES LIKE ADDRESS, SOURCE OF INCOME, MODE OF PAYMENT, INCOME-TAX PARTICULARS, ETC. AO TREATED THE ENTIRE LOAN AMOUNT OF RS. 22,24,000 AS UNEXPLAINED CREDIT AND ADDED IT TO INCOME OF ASSESSEE. ASSESSEE CHALLENGED THE SAME BE FORE LD. CIT(A). 26. AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE A S WELL AS EVIDENCES BROUGHT ON RECORD, LD. CIT(A) ACCEPTED THE LOAN OF AN AMOUNT OF RS. 5 LAKHS TAKEN FROM P. SUSEELA AND ANOTHER AMOUNT OF RS. 4 L AKHS FROM SHRI RAJENDRA NAIDU. SO FAR AS LOAN OF RS. 4,24,000 FROM P. DAYALAM IS CONCERNED, IT WAS SUBMITTED BY ASSESSEE BEFORE LD. CIT(A) THAT THE SAID CREDITOR IS AN AGRICULTURIST HAVING AGRICULTURAL LA ND AND THE LOAN WAS ADVANCED OUT OF THE SAVINGS FROM AGRICULTURAL INCOM E EARNED BY THE SAID CREDITOR. LD. CIT(A), HOWEVER, WAS NOT CONVINCED WI TH THE EXPLANATION OF ASSESSEE AND CONFIRMED THE ADDITION MADE BY AO. 27. THE LEARNED AR REFERRING TO THE AFFIDAVIT OF TH E LOAN CREDITOR AS WELL AS THE DETAILS OF HIS LAND HOLDINGS, SUBMITTED THAT AS THE SAID LOAN CREDITOR WAS HAVING SUFFICIENT AGRICULTURAL INCOME TO ADVANC E THE LOAN, THE ADDITION MADE SHOULD BE DELETED. HE FURTHER SUBMITTED THAT L OAN WAS RECEIVED THROUGH BANKING CHANNEL, HENCE, THE GENUINENESS OF THE TRANSACTION SHOULD 10 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU NOT BE DOUBTED. LD. AR SUBMITTED, WITHOUT EXAMINING THE CREDITOR, AO COULD NOT HAVE TREATED THE LOAN AS UNEXPLAINED CREDIT. 28. THE LD. DR, ON THE OTHER HAND, JUSTIFIED THE AD DITION MADE IN ABSENCE OF EVIDENCES. 29. HAVING CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS OTHER MATE RIALS ON RECORD, WE ARE OF THE VIEW THAT THE MATTER REQUIRES RE-EXAMINATION BY AO. THOUGH, IT IS A FACT THAT THE LOAN CREDITOR HAS CONFIRMED OF HAVING ADVANCED THE LOAN AND HE MAY BE HAVING LAND HOLDING, BUT, WHETHER HE HAS THE CAPACITY TO ADVANCE LOAN OF RS. 4,24,000 REQUIRES TO BE VERIFIE D BY EXAMINING THE CREDITOR, WHICH HAS NOT BEEN DONE. FURTHER, ASSESSE ES CLAIM THAT THE LOAN WAS RECEIVED THROUGH REGULAR BANKING CHANNEL ALSO N EEDS EXAMINATION. IF ASSESSEE CAN ESTABLISH THE CREDITWORTHINESS OF THE CREDITOR, THEN, THE LOAN CANNOT BE TREATED AS UNEXPLAINED CREDIT. WITH THE A FORESAID OBSERVATIONS, WE REMIT THE ISSUE BACK TO THE FILE OF AO. 30. THE NEXT ISSUE IS WITH REGARD TO THE LOAN AMOUN T OF RS. 9 LAKHS TREATED AS UNEXPLAINED CASH CREDIT BY AO AND CONFIR MED BY LD. CIT(A). 31. AS CAN BE SEEN, ASSESSEE HAS NOT BEEN ABLE TO P ROVE THE AFORESAID LOAN AMOUNT BY BRINGING ANY EVIDENCE ON RECORD. EVE N A CONFIRMATION LETTER HAS NOT BEE OBTAINED FROM THE CREDITOR. AS ASSESSEE HAS FAILED TO ESTABLISH THE THREE INGREDIENTS I.E., IDENTITY OF THE CREDITO R, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION BY FURNISHING ANY EV IDENCE, THE ADDITION MADE IS CONFIRMED. 32. IN THE RESULT, APPEAL IN ITA NO. 1909/HYD/2011 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1879/HYD/2011 BY REVENUE FOR AY 2007-08 33. THE FIRST ISSUE IS IN RELATION TO THE DECISION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS. 9 LAKHS MADE TOWARDS U NEXPLAINED CASH CREDIT. 11 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU 34. BRIEFLY THE FACTS ARE, DURING THE ASSESSMENT PR OCEEDING, AO TREATED THE LOAN RECEIVED BY ASSESSEE DURING THE YEAR FOR T OTAL AMOUNT OF RS. 22,24,000 AS UNEXPLAINED CREDIT AND ADDED IT TO THE INCOME OF ASSESSEE. 35. DURING THE PROCEEDING BEFORE LD. CIT(A), OUT OF THE TOTAL CREDITS, LD. CIT(A) ACCEPTED THE LOAN OF RS. 5.OO LAKH IN THE NA ME OF P. SUSHEELA AND RS. 4 LAKHS IN CASE OF RAJENDRA NAIDU ON THE BASIS THAT BOTH OF THEM ARE WIFE AND HUSBAND AND THEIR SON IS WORKING AS SOFTWA RE ENGINEER IN USA. FURTHER, ON VERIFICATION OF THE BANK ACCOUNT IN IC ICI BANK, HE FOUND THAT THE TRANSACTION IS REFLECTED IN THE BANK ACCOUNT. A CCORDINGLY, THE ADDITION MADE BY AO TO THE EXTENT OF RS. 9 LAKHS WAS DELETED . 36. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIALS ON RECORD. THE GRIEVANCE OF THE DEPARTMEN T IS THAT LD. CIT(A) ON CONSIDERING ADDITIONAL EVIDENCES IN VIOLATION OF RU LE 46A HAS DELETED THE ADDITION. ON PERUSAL OF THE ORDERS OF THE DEPARTMEN TAL AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD, IT APPEARS ASSESSEE DID NOT PRODUCE ANY EVIDENCE BEFORE AO IN SUPPORT OF THE LOAN TRANSACTI ON. HOWEVER, BEFORE THE LD. CIT(A), ASSESSEE HAS PRODUCED THE BANK STATEMEN T TO PROVE THE TRANSACTION. THIS FACT HAS ALSO NOT BEEN DENIED BY LD. AR. IN OUR VIEW, BEFORE ACCEPTING THE EVIDENCES SUBMITTED FOR THE FI RST TIME, LD. CIT(A) SHOULD HAVE GIVE AN OPPORTUNITY TO AO TO VERIFY THE SAME. THAT BEING THE CASE, THERE IS VIOLATION OF PROVISION CONTAINED UND ER RULE 46A. THEREFORE, WE CONSIDER IT APPROPRIATE TO REMIT THIS ISSUE TO T HE FILE OF THE AO FOR EXAMINING THE EVIDENCE AFRESH AND TAKING A DECISION IN THE MATTER. HOWEVER, WE MAKE IT CLEAR IF ON EXAMINATION OF THE BANK ACCOUNT, IT IS FOUND THAT THE LOAN TRANSACTION WAS THROUGH CHEQUE AND HAS BEEN REFLECTED IN THE RESPECTIVE BANK ACCOUNTS, THE SAME HAS TO BE ACCEPTED. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 37. THE NEXT ISSUE IN THE DEPARTMENTS APPEAL IS WI TH REGARD TO ADDITION OF RS. 1,52,72,000 AS UNEXPLAINED INVESTMENT IN PUR CHASE OF PLOTS. 38. BRIEFLY, THE FACTS ARE, DURING THE ASSESSMENT P ROCEEDING, AO NOTICED THAT AS PER THE SEIZED MATERIAL MARKED AS ANNEXURE A/YSN/RES/1 AND A/SSVG/2, ASSESSEE HAS ADVANCED MONEY TOWARDS PURC HASE OF PLOTS AT 12 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU RS. 1,52,72,000 AND RS. 4,38,000 WHILE THE FIRST SE IZED MATERIAL RELATE TO INVESTMENT MADE BY ASSESSEE, THE SECOND ONE CONTAIN S LAND PURCHASED IN THE NAME OF HIS WIFE. WHEN ASSESSEE WAS CONFRONTED WITH THE SEIZED MATERIALS, HE TOTALLY DISOWNED THEM AND SUBMITTED T HEY ARE ROUGH SHEETS AND DO NOT PERTAIN TO HIM. AO, HOWEVER, REJECTING T HE CLAIM OF ASSESSEE, TREATED THE AMOUNT OF RS. 1,52,72,000 AND RS. 4,38, 000 AS UNDISCLOSED INVESTMENT OF ASSESSEE AND ADDED IT TO THE INCOME O F THE YEAR. 39. AS FAR AS RS. 4,38,000 IS CONCERNED LD. CIT(A) AFTER VERIFYING THE DETAILS FOUND THAT SAME ADDITION MADE IN THE PRECED ING AY WAS REPEATED AGAIN. SINCE THE AMOUNT WAS DELETED IN AY 2006-07 A ND THE PRESENT ADDITION BEING A REPETITION OF THE ADDITION MADE EA RLIER, LD. CIT(A) DELETED IT. AS FAR AS THE AMOUNT OF RS. 1,52,72,000 IS CONC ERNED, LD. CIT(A) AFTER VERIFYING THE SEIZED MATERIAL DELETED THE ADDITION BY OBSERVING AS UNDER: 4.2 AS IT COULD BE SEEN FROM ABOVE WRITINGS, THE A MOUNT OF RS. 1,52,72,000 IS ARRIVED BY MULTIPLYING 664 WITH 2300 0. THESE WRITINGS ALSO ARE NOT VERY CLEAR ABOUT THE INTENTION AND THE NATURE OF THE TRANSACTION. IT COULD BE POSSIBLE THAT THE 664 ARE GUNTAS AND EACH GUNTA VALUE IS RS.23000 BUT THE FACT IS THAT THIS A PPEARS ONLY A PROPOSAL AND NOT CRYSTALLIZED TRANSACTION. THE PART IES NAMES ARE ALSO MISSING. THEREFORE, IT CANNOT BE SAID THAT THI S DEAL IS THROUGH AND APPELLANT HAD BOUGHT THE SAID LAND FOR RS.1,52, 72,000. IT IS ALSO SEEN THAT NEITHER THE SEARCH PARTY NOR THE ASSESSIN G OFFICER HAD QUESTIONED THE APPELLANT WITH REGARD TO THE NATURE OF THE TRANSACTION AND WHETHER THE APPELLANT HAD BOUGHT THE SAID LAND FOR THE ABOVE SAID AMOUNT. IN THIS CONTEXT, IT IS RELEVANT TO REF ER THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS GIRI SH CHAUDHARY 296 ITR 619 (2008) AND THE GIST OF THE SAME IS REPR ODUCED AS UNDER: 'INCOME OR PROPERTY WHICH HAS BEEN DISCLOSED OR WOU LD HAVE BEEN DISCLOSED FOR THE PURPOSE OF THE INCOME TAX AC T, 1961, DOES NOT FORM PART OF THE UNDISCLOSED INCOME FOR PU RPOSE OF BLOCK ASSESSMENT. ONLY SUCH OF THE CATEGORIES OF IN COME MENTIONED, WHICH HAVE BEEN FOUND AS A RESULT OF SEA RCH CAN BE THE SUBJECT MATTER OF AN ASSESSMENT UNDER CHAPTE R XIV-B. THE DEFINITION OF 'UNDISCLOSED INCOME' SPECIFIES TH AT ONLY WHERE AN ASSESSEE HAS CLAIMED ANY EXPENSES OR ADDIT ION WHICH IS FOUND TO BE FALSE, CAN IT BE REGARDED AS U NDISCLOSED INCOME FOR THE PURPOSE OF THIS CHAPTER. UNDER CHAPT ER XIV-B OF THE ACT, BEFORE AN ADDITION OF AN 'UNDISCLOSED I NCOME' CAN BE MADE, THE ASSESSING OFFICER HAS TO BRING ON RECO RD MATERIAL TO SHOW THAT ON EVIDENCE FOUND AS A RESULT OF SEARCH THERE IS UNDISCLOSED INCOME REPRESENTED BY THE CRED ITS 13 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU APPEARING IN THE BOOKS OF ACCOUNT. THE PREMISES OF A COMPANY IN WHICH THE ASSESSEE WAS A DIRECTOR AND THOSE OF THE ASSESSEE WERE THE SUBJECT OF SEARCH OPERATIONS ON JANUARY 18, 2000 AND A DOCUMENT WAS SEIZED AND MARKED. ON THE BASIS OF THIS DOCUMENT THE ASSES SING OFFICER TOOK RS.48 LAKHS AS THE ASSESSEE'S INCOME F ROM UNDISCLOSED SOURCES. THE ASSESSEE FILED AN APPEAL B EFORE THE COMMISSIONER (APPEALS) WHO DELETED THIS ADDITION. T HE DEPARTMENT APPEALED TO THE TRIBUNAL WHICH DISMISSED THE APPEAL HOLDING THAT NO ATTEMPT WHATSOEVER HAD BEEN MADE TO LINK ANY OF THE ENTRIES IN THE SEIZED BOOK WITH ANY TRANSACTION CARRIED OUT BY 'THE ASSESSEE IN HIS C A PACITY AS DIRECTOR OR BY HIS WIFE OR BY THE COMPANY TO SHOW THE AMOUNT IN FI GURE AS ASSESSABLE UNDISCLOSED INCOME AND THAT NO PROPER US E OF SEIZED MATERIAL HAD I BEEN MADE TO ESTABLISH THAT THE ENTRIES IN THE SEIZED DOCUMENT RELATED TO UNDISCLOSED INCOME O F RS.48 LAKHS. ON FURTHER APPEAL: HELD, ACCORDINGLY, DISMISSING THE APPEAL, THAT THER E WAS NO MATERIAL ON RECORD TO SHOW ON WHAT BASIS THE ASSESS ING OFFICER HAD REACHED THE CONCLUSION THAT THE FIGURE '48/1 WAS TO BE READ AS RS.48 LAKHS. THE DOCUMENT RECOVERED DURI NG THE COURSE OF SEARCH WAS A DUMB DOCUMENT AND LED NOWHER E. THE TRIBUNAL HAD RIGHTLY DELETED THE ADDITION OF RS.48 LAKHS MADE BY THE ASSESSING OFFICER AND THE ORDER OF THE TRIBU NAL DID NOT GIVE RISE TO A QUESTION OF LAW, MUCH LESS A SUBSTAN TIAL QUESTION OF LAW.' 4.3 THEREFORE, HAVING PERUSED THE FACTS OF THE CASE AND ALSO FOLLOWING THE DECISION OF HON'BLE DELHI HIGH COURT CITED AS ABOVE, I AM OF THE VIEW THAT THE SEIZED MATERIAL IS NOT SELF EXPLANATORY AND ALSO NO QUESTIONS HAVE BEEN ASKED ABOUT THESE INFOR MATIONS EITHER BY THE ASSESSING OFFICER OR SEARCH PARTY. THEREFORE , THIS IS A DUMB DOCUMENT OR UTMOST IT IS A PROPOSAL AND NOT A CRYST ALLIZED DEAL. THE DEPARTMENT HAS NOT FOUND ANY EVIDENCE WITH REGARD T O ANY INVESTMENT MADE BY THE APPELLANT. HENCE, I AM INCLI NED TO DELETE THIS ADDITION MADE BY THE ASSESSING OFFICER. THEREF ORE, THIS GROUND OF APPEAL IS ALLOWED. 40. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS OTHER MATE RIALS ON RECORD. THIS ISSUE IS SIMILAR TO THE ISSUE RAISED BY THE DEPARTM ENT IN ITA NO. 1878/HYD/11. AS CAN BE SEEN, IN THE PRESENT CASE AL SO, SEIZED MATERIAL EXCEPT MENTIONING CERTAIN FIGURES DOES NOT REVEAL W HETHER THEY ARE RECEIPTS NOR PAYMENTS NOR ANY NAME IS MENTIONED. IT IS ALSO NEITHER IN THE NAME OF ASSESSEE NOR BEARS HIS SIGNATURE. THE AO HAS NOT BR OUGHT ON RECORD ANY 14 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU OTHER CORROBORATIVE EVIDENCE TO SUBSTANTIATE THE AL LEGATION THAT NOTINGS IN SEIZED MATERIAL REPRESENT UNDISCLOSED INVESTMENT OF ASSESSEE. IN THESE CIRCUMSTANCES, CONCLUSION OF LD. CIT(A) THAT IT IS MERELY A DUMB DOCUMENT AND NO ADDITION CAN BE MADE ON THE BASIS OF SUCH DU MB DOCUMENT, IN OUR VIEW, IS TOTALLY JUSTIFIED AND CANNOT BE INTERFERED WITH. ACCORDINGLY, WE UPHOLD THE ORDER OF LD. CIT(A) ON THIS ISSUE AND DI SMISS THE GROUND RAISED BY REVENUE. 41. THE NEXT ISSUE IS WITH REGARD TO THE ADDITION O F RS. 4,38,000 MADE BY AO AND DELETED BY LD. CIT(A). 42. AFTER PERUSING THE FACTS AND MATERIALS, WE DO N OT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). AS CAN BE S EEN FROM THE FACTS ON RECORD, AO HAS MADE SAME ADDITION WHICH WAS EARLIER MADE IN AY 2006-07. LD. DR HAS ALSO FAIRLY ACCEPTED THIS FACT. IN THE A FORESAID VIEW OF THE MATTER, WE UPHOLD THE ORDER OF LD. CIT(A) ON THIS B Y DISMISSING THE GROUND RAISED BY REVENUE. 43. IN THE RESULT, APPEAL IN ITA NO. 1879/HYD/2011 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1910/HYD/2011 FOR AY 2008-09 BY ASSESSEE 44. THE FIRST ISSUE RAISED BY ASSESSEE IS IN RELATI ON TO ADDITION OF RS. 5 LAKHS AS UNEXPLAINED CREDIT. 45. BRIEFLY THE FACTS ARE, DURING THE ASSESSMENT PR OCEEDING, AO NOTICED THAT DURING THE RELEVANT PREVIOUS YEAR, ASSESSEE HA S OBTAINED THE FOLLOWING LOANS: I) SRI SRIRAMULU RS. 5,00,000 II) SRI M.V. RAMANA RS.10,00,000 III) SRI NAGESWARA RAO, NRI RS. 3,00,000 IV) SMT. RADHIKA RS. 5,00,000 V) RENTAL ADVANCE FROM TENANTS RS. 5,00,000 TOTAL RS.28,00,000 ========== 15 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU BY OBSERVING THAT ASSESSEE COULD NOT PRODUCE ADDRES S, SOURCES OF INCOME, MODE OF PAYMENT, INCOME-TAX PARTICULARS ETC. OF THE LOAN CREDITORS, AO TREATED THE ENTIRE AMOUNT OF RS. 28 LAKHS AS UNEXPL AINED CREDIT AND ADDED IT TO THE INCOME OF ASSESSEE. BEING AGGRIEVED OF SU CH ADDITION, ASSESSEE CHALLENGED THE SAME BEFORE LD. CIT(A). LD. CIT(A), THOUGH, ACCEPTED LOANS STANDING IN THE NAME OF SRI M.V. RAMANA, SMT. RADHI KA AND RENTAL ADVANCE FROM TENANTS, BUT, HE CONFIRMED ADDITIONS OF RS. 5 LAKHS BEING LOAN IN THE NAME OF SRI SRIRAMULU AND RS. 3 LAKHS IN THE NAME O F SRI NAGESWARA RAO. 46. AS FAR AS LOAN OF RS. 5,00,000 FROM SRIRAMULU I S CONCERNED, IT WAS SUBMITTED BEFORE LD. CIT(A) THAT THE SAID CREDITOR WAS HAVING AGRICULTURAL LAND AND IS ENGAGED IN AGRICULTURAL ACTIVITIES. IT WAS SUBMITTED THAT THE CREDITOR WAS HAVING SUBSTANTIAL INCOME FROM AGRICUL TURAL OPERATIONS AND IN SUPPORT OF SUCH CLAIM, ASSESSEE NOT ONLY FURNISHED AN AFFIDAVIT OF THE CREDITOR CONFIRMING THE LOAN BUT ALSO A CERTIFICATE FROM MRO CERTIFYING THE ANNUAL AGRICULTURAL INCOME OF THE CREDITOR AT RS. 5 LAKHS. LD. CIT(A), HOWEVER, DID NOT ACCEPT THE EXPLANATION OF ASSESSEE BY OBSERVING THAT ASSESSEE HAS NOT PRODUCED RELEVANT DETAILS ABOUT TH E SAVINGS OF THE CREDITOR. ACCORDINGLY, HE CONFIRMED THE ADDITION OF LOAN AMOUNT OF RS. 5 LAKHS. 47. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IALS ON RECORD. LD. AR SUBMITTED BEFORE US THAT APART FROM THE FACT THA T THE CREDITOR HAS SOURCE OF INCOME TO ADVANCE THE LOAN AND HE HAS ALSO CONFI RMED THE CREDIT BUT THE LOAN TRANSACTION WAS THROUGH REGULAR BANKING CHANNE L AS LOAN WAS RECEIVED THROUGH CHEQUE ISSUED BY CREDITOR ON 04/07/07. LD. AR SUBMITTED THAT WITHOUT EXAMINING THE FACT THAT THE LOAN WAS RECEIV ED THROUGH CHEQUE AND ALSO WITHOUT EXAMINING THE CREDITOR, THE AUTHORITIE S WERE NOT JUSTIFIED IN MAKING ADDITION. THE LD. DR ON THE OTHER HAND RELI ED UPON THE ORDER OF LD. CIT(A). 48. HAVING CONSIDERED THE SUBMISSIONS OF THE PARTI ES, WE ARE OF THE VIEW THAT THE MATTER REQUIRES FRESH EXAMINATION BY AO KE EPING IN VIEW THE CLAIM OF ASSESSEE THAT THE LOAN AMOUNT WAS RECEIVED THROU GH PROPER BANKING CHANNEL. MOREOVER, WHEN THE CREDITOR HAS CONFIRMED THE LOAN ADVANCED AND HAS ALSO EXPLAINED THE SOURCE FOR ADVANCING SUCH LO AN, IT IS INCUMBENT 16 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU UPON AO TO EXAMINE THE CREDITOR TO FIND HIS CREDITW ORTHINESS BEFORE DOUBTING HIS CAPACITY TO ADVANCE THE LOAN. ACCORDIN GLY THE ISSUE IS REMITTED TO THE FILE OF AO, WHO SHALL DECIDE THE SAME AFTER DUE OPPORTUNITY OF BEING HEARD TO ASSESSEE. 49. THE NEXT ISSUE IS WITH REGARD TO ADDITION OF AN AMOUNT OF RS. 91,618 ON ACCOUNT OF UNDISCLOSED INVESTMENT IN GOLD ORNAME NTS. 50. ON THE BASIS OF SEIZED MATERIAL, AO OBSERVED TH AT ASSESSEE HAS PURCHASED JEWELLERY WORTH RS. 91,618. WHEN THIS ASP ECT WAS CONFRONTED TO ASSESSEE, HE DISOWNED THE SEIZED MATERIAL. HOWEVER, AO NOTED THAT THE NAME OF ASSESSEE WAS FOUND ON THE BILL. ACCORDINGLY , BY OBSERVING THAT ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF INVEST MENT IN JEWELLERY, AO TREATED THE AMOUNT OF RS. 91,618 AS UNACCOUNTED INV ESTMENT AND ADDED IT TO THE INCOME. ADDITION MADE BY AO WAS CHALLENGED B EFORE LD. CIT(A). LD. CIT(A) AFTER VERIFYING THE SEIZED MATERIAL CONFIRME D THE ADDITION BY HOLDING THAT ASSESSEE HAD PURCHASED SOME JEWELLERY, THE SOU RCE OF INVESTMENT OF WHICH WAS NOT PROPERLY EXPLAINED. 51. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL ON RECORD. IT IS THE CONTENTION OF LD. AR THAT THE SEIZED MATERIAL I S ONLY AN ESTIMATE AND DOES NOT ACTUALLY REPRESENT JEWELLERY PURCHASED BY ASSESSEE. THE LD. DR ON THE OTHER HAND JUSTIFIED THE ADDITION. 52. HAVING CONSIDERED THE SUBMISSIONS OF THE PARTIE S IN THE CONTEXT OF MATERIALS ON RECORD, WE ARE OF THE VIEW THAT ASSESS EE HAS NOT PROPERLY EXPLAINED THE CONTENTS OF THE SEIZED MATERIAL. AS C AN BE SEEN, WHILE BEFORE THE AO, HE HAS COMPLETELY DISOWNED THE SEIZED MATER IAL, BEFORE THE FIRST APPELLATE AUTHORITY, HE HAS STATED THAT THE SEIZED MATERIAL IS ONLY AN ESTIMATE. IN THESE CIRCUMSTANCES, WE DO NOT FIND AN Y INFIRMITY IN THE ORDER OF LD. CIT(A) IN CONFIRMING THE ADDITION. ACCORDING LY, THIS GROUND IS DISMISSED. 53. IN THE RESULT, APPEAL IN ITA NO. 1910/HYD/11 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 17 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU ITA NO. 1880/HYD/2011 FOR AY 2008-09 BY REVENUE 54. AS STATED EARLIER, DURING THE ASSESSMENT PROCEE DING, AO HAS MADE ADDITION OF RS. 28 LAKH REPRESENTING THE LOAN TAKEN FROM DIFFERENT PERSONS. LD. CIT(A), HOWEVER, WHILE CONFIRMING THE ADDITION REPRESENTING RS. 5 LAKH FROM SRIRAMULU AND RS. 3 LAKHS FROM SRI NAGESWARA R AO ACCEPTED THE OTHER LOAN AMOUNTS ON VERIFYING THE EVIDENCES PRODUCED BE FORE HIM. AS CAN BE SEEN FROM THE ORDER OF LD. CIT(A), HE ACCEPTED LOA N OF RS. 10,00,000 FROM SRI M.V. RAMANA AND RS. 5,00,000 FROM SMT. RADHIKA AND RS. 5,00,000 FROM TENANTS BY VERIFYING THE BANK STATEMENTS, INCO ME-TAX RETURNS, BALANCE SHEET, P&L ACCOUNT AS WELL AS LEASE AGREEMENT. THE SPECIFIC GRIEVANCE OF THE DEPARTMENT IS, THESE EVIDENCES WERE PRODUCED FO R THE FIRST TIME BEFORE LD. CIT(A) AND WITHOUT GIVING AN OPPORTUNITY TO AO TO VERIFY THE SAME, LD. CIT(A) HAS DELETED THE ADDITION ON THE BASIS OF THO SE EVIDENCES. 55. AFTER CONSIDERING THE SUBMISSIONS OF THE PARTIE S, WE FIND THE CONTENTION OF LD. DR TO BE CORRECT. AS CAN BE SEEN, ASSESSEE HAS NOT PRODUCED ANY EVIDENCE BEFORE AO TO PROVE THE CREDIT S. WHEREAS BEFORE LD. CIT(A) ASSESSEE HAS PRODUCED RETURNS OF INCOME, BAN K STATEMENT, P&L ACCOUNT, BALANCE SHEET, ETC. OF SRI M.V. RAMANA AND SMT. RADHIKA TO PROVE GENUINENESS OF THE LOAN. SIMILARLY IN CASE OF RENTAL ADVANCE RECEIVED FROM THE TENANTS, ASSESSEE HAS SUBMITTED THE LEASE AGREEMENT. LD. CIT(A) WITHOUT CALLING FOR A REMAND REPORT FROM AO, ON THE EVIDENCES SUBMITTED BY ASSESSEE HAS ACCEPTED ASSESSEES CLAIM AND DELETED THE ADDITION. THEREFORE, TO THAT EXTENT THERE IS VIOLATION OF RUL E 46A. IN THE AFORESAID VIEW OF THE MATTER, WE ARE INCLINED TO REMIT THE ISSUE T O THE FILE OF AO TO VERIFY EVIDENCES PRODUCED BY ASSESSEE AND TAKE A DECISION IN THE MATTER. HOWEVER, WE MAKE IT CLEAR THAT IF EVIDENCES PRODUCE D BY ASSESSEE PROVE THE CREDITS, NO ADDITION CAN BE MADE BY AO. 56. IN THE RESULT, APPEAL IN ITA NO. 1880/HYD/2011 IS ALLOWED FOR STATISTICAL PURPOSES. 57. TO SUM UP, ASSESSEE APPEALS IN ITA NO. 1907 & 1 908/HYD/2011 ARE ALLOWED FOR STATISTICAL PURPOSES AND APPEALS IN ITA NOS. 1909 & 1910/HYD/2011 ARE PARTLY ALLOWED FOR STATISTICAL PU RPOSES. REVENUE APPEALS 18 ITA NOS. 1907 TO 1910/H11 & 1878 & 1880/H/11 SRI Y. SIDDAIAH NAIDU IN ITA NO. 1878/HYD/11 IS DISMISSED, APPEAL IN ITA NO. 1879/HYD/11 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND APPEAL IN ITA NO. 1880/HYD/2011 IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 06/02/2015. SD/- SD/- (B. RAMAKOTAIAH) (SAKTI JIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 6 TH FEBRUARY, 2015 KV COPY TO:- 1) SRI Y. SIDDAIAH NAIDU, PLOT NO. 266, 3 RD MAIN ROAD, SRINIVASAPURAM,TIRUPATHI. 2) ACIT, CENTRAL CIRCLE, 3 RD FLOOR, AAYAKAR BHAVAN, K.T. ROAD, TIRUPATHI. 3) CIT(A)-VII, HYDERABAD 4) CIT(CENTRAL), HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S. 2. DRAFT PLACED BEFORE AUTHOR SR.P.S 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER VP 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S. 6. KEPT FOR PRONOUNCEMENT ON SR.P S. 7. FILE SENT TO THE BENCH CLERK SR.P.S. 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER