Sri P. Karvannan, Sivakasi V. DCIT, Madurai

ITA 2010/CHNY/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5397 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 30-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 18-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Income from undisclosed sources

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , ! '# $ , % & BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ ITA NOS. / ASSESSMENT YEAR /APPELLANT /RESPONDENT 2010/MDS/2013 2009-10 MR. P. KARVANNAN 74A, VELAYUTHAM ROAD, SIVAKASI. PAN:ABDPK0797N DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-III, MADURAI 2012/MDS/2013 2009-10 MR. P.GANESAN, 74, VELAYUTHAM ROAD, SIVAKASI-626 123. PAN:ABYPG3315R DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-III, MADURAI / APPELLANT BY : MR. V.RAJASEKARAN, CA /RESPONDENT BY : MR. K.NAGESWARA RAO, CIT& MR. GURU BHASHYAM, JCIT / DATE OF HEARING : 30 TH JANUARY, 2014 ! /DATE OF PRONOUNCEMENT : 27 TH FEBRUARY, 2014 ' / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THESE TWO APPEALS ARE FILED BY THE ASSESSEES SHRI P.GANESAN & SHRI P.KARVANNAN BROTHERS AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)- MADURAI D ATED 07.08.2013 FOR THE ASSESSMENT YEAR 2009-10. AS THER E ARE ITA NOS.2010 & 2012/MDS/2013 2 COMMON ISSUES IN BOTH THE APPEALS, THEY ARE DISPOSE D OFF TOGETHER BY COMMON ORDER FOR THE SAKE OF CONVENIENC E. 2. THE FIRST COMMON ISSUE IN BOTH THESE APPEALS IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTA INING ADDITION IN RESPECT OF UNEXPLAINED COST OF CONSTRU CTION OF HOUSE. THE ASSESSING OFFICER WHILE COMPLETING ASSES SMENTS MADE ADDITION OF ` 60,53,402/- AND ` 54,81,552/- TOWARDS UNEXPLAINED COST OF CONSTRUCTION OF HOUSE IN THE HA NDS OF MR. P.GANESAN AND MR. P.KARVANNAN RESPECTIVELY. THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER IN PRINCIPLE . HOWEVER, COMMISSIONER OF INCOME TAX (APPEALS) DIRECTED TO CO NSIDER REDUCTION IN SELF-SUPERVISION AT 10% INSTEAD OF 7.5 % ALLOWED BY THE ASSESSING OFFICER. THE ASSESSEES ARE IN APP EAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN SUSTAINING UNEXPLAINED COST OF CONSTRU CTION OF HOUSE. 3. COUNSEL FOR THE ASSESSEE SUBMITS THAT MR. P.GANE SAN HAS CONSTRUCTED A HOUSE AT 74C, VELAYUDHAM ROAD, SI VAKASI ITA NOS.2010 & 2012/MDS/2013 3 JOINTLY WITH HIS WIFE SMT. G. SASIMALA DURING THE F INANCIAL YEAR 2005-06 TO 2010-11 UPTO JULY, 2010 AND THE COST OF CONSTRUCTION RECORDED IN THE BOOKS OF ACCOUNT WAS ` 2,51,50,187/-. SIMILARLY, MR. P.KARVANNAN HAS CONST RUCTED A HOUSE AT 74B, VELAYUDHAM ROAD, SIVAKASI JOINTLY WI TH HIS WIFE MRS. K. GRAHALAXMI DURING THE FINANCIAL YEAR 2005-06 TO 2010-11 UPTO JULY, 2010 AND THE COST OF CONSTRUCTIO N WAS ` 2,67,19,119/-. THE COST OF CONSTRUCTION OF ABOVE HO USES WAS REFERRED TO DVO, INCOME-TAX DEPARTMENT AND THE VALU ATION REPORT DATED 30.07.2010 WAS OBTAINED AS PER WHICH T HE VALUATION WAS ARRIVED AT ` 2,53,73,000/- AND ` 2,68,24,000/- IN THE CASE OF MR. P.GANESAN & MR. P.KARVANNAN RESP ECTIVELY. THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS ADM ITTED COST OF CONSTRUCTION TILL THE ASSESSMENT YEAR UNDER CONSIDERATION AT ` 2,34,50,187/- AND ` 2,31,19,119/- RESPECTIVELY. HE ALSO NOTICED THAT ASSESSEE HAS INC URRED COST OF CONSTRUCTION OF ` 17,00,000/- AND ` 36,00,000/- RESPECTIVELY BY THE ASSESSEE FOR THE FINANCIAL YEARS 2009-10 TO 2010-11. THEREFORE, HE REDUCED THE COST OF CONSTRUCTION OF ` 17,00,000/- AND ` 36,00,000/- FROM THE VALUE OF DVO AND ITA NOS.2010 & 2012/MDS/2013 4 ARRIVED AT DIFFERENCE OF ` 2,22,813/- AND ` 1,04,881/- RESPECTIVELY IN BOTH THESE ASSESSEES CASES AND THIS WAS ADDED AS DIFFERENCE BETWEEN THE VALUE AS PER BOOKS AND VALUE AS PER DVOS REPORT. THE ASSESSING OFFICER F URTHER CONSIDERED ` 45,73,970/- IN BOTH THE ASSESSEES CASES AS UNEXPLAINED COST OF CONSTRUCTION ON THE GROUND THAT ASSESSEE HAS ACCOUNTED FOR THE ASSESSMENT YEAR 2009-10 AT ` 1,05,32,368/- IN THE CASE OF BOTH THE ASSESSEE MR. P.GANESAN AND HIS WIFE AND OUT OF WHICH ONLY ` 58,30,589/- WAS WITHDRAWN FROM M/S. SONY FIREWORKS PVT.LTD. HE NOTICED THAT ASSESSEE HAD WITHDRAWN ` 21,01,079/- FROM M/S. VINAYAGA FIREWORKS AND HIS WIFE HAD WITHDRAWN ` 26,00,000/- TOWARDS HOUSE CONSTRUCTION. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE IS MAINTAINING DIRECTORS BUILDING ACCOUNT IN M/S. SONY FIREWORKS PVT.LTD. WHICH IS A JOINT ACCOU NT OF MR. P.GANESAN AND HIS BROTHER P.KARVANNAN. THE TOTAL WITHDRAWAL FROM THE ABOVE COMPANY IS ` 91,47,940/- AND 50% COMES TO ` 45,73,970/-. THE ASSESSING OFFICER WAS THEREFORE OF THE OPINION THAT SINCE THE ASSESSEE MR. P.GANESA N HAS STATED THAT HE HAS WITHDRAWN ` 58,30,589/- FROM M/S. SONY ITA NOS.2010 & 2012/MDS/2013 5 FIREWORKS PVT.LTD. AND AS PER ACCOUNT COPY FURNISHE D M/S. SONY FIREWORKS LTD. TOTAL WITHDRAWAL 50% OF HIS S HARE COMES TO ` 45,73,970/-, THE ASSESSEE COULD NOT EXPLAIN THE SO URCE FOR CONSTRUCTION OF HOUSE AT ` 12,56,619/- (58,30,589 45,73,970) AND THIS AMOUNT WAS ADDED AS UNEXPLAINED COST OF CONSTRUCTION. FURTHER THE ASSESSING OFFICER TREA TED ` 45,73,970/- ALSO AS UNEXPLAINED COST OF CONSTRUCTIO N IN BOTH THE ASSESSEES FOR THE REASON THAT ASSESSEES HAVE NO T PRODUCED PROPER VOUCHERS FOR THE SAID CONSTRUCTION AND SOME OF THE VOUCHERS RELATE TO YEAR 2006-07 AND DEBITED IN THE YEAR 2009. IN THE CASE OF THE ASSESSEE MR. P.KARVANNAN ` 8,02,701/- (53,76,671 45,73,970) WAS ADDED AS UNEXPLAINED COST OF CONSTRUCTION STATING THAT THE A SSESSEE COULD NOT EXPLAIN THE SOURCE TO THAT EXTENT AS TH E ASSESSEE STATED THAT HE HAS WITHDRAWN ` 53,76,671/- (FROM SONY FIREWORKS (P) LTD. BUT ACCOUNT COPY SHOWS ONLY ` 45,73,970/- 50% OF ASSESSEES SHARE IN DIRECTORS JOINT ACCOUNT. THEREFORE, THE ASSESSING OFFICER TREATED A SUM OF ` 60,53,402/- AND ` 54,81,552/- AS UNEXPLAINED COST OF CONSTRUCTION IN THE CASE OF MR. P.GANESAN AND MR. P.KARVANNAN RESPECTIVELY. T HE ITA NOS.2010 & 2012/MDS/2013 6 COUNSEL FOR THE ASSESSEE SUBMITS THAT ASSESSING OF FICER IS NOT JUSTIFIED IN TREATING THE UNEXPLAINED COST OF C ONSTRUCTION IN SPITE OF COST OF CONSTRUCTION WAS PROPERLY EXPLAINE D BY THE ASSESSEE WITH REFERENCE TO THE ACCOUNTS MAINTAINED BY THE ASSESSEE. 4. THE DEPARTMENTAL REPRESENTATIVE SUPPORTED THE O RDERS OF LOWER AUTHORITIES IN SUSTAINING THE ADDITION MAD E BY THE ASSESSING OFFICER TOWARDS UNEXPLAINED COST OF CONST RUCTION IN BOTH THE ASSESSEES CASES. 5. HEARD BOTH SIDES. ON A PERUSAL OF THE ORDERS OF LOWER AUTHORITIES, WE FIND THAT ASSESSING OFFICER TREATED ` 2,22,813/- AND ` 1,04,881/- TOWARDS DIFFERENCE IN COST OF CONSTRUCTI ON REPORTED AS PER BOOKS AND AS PER DVO VALUATION REPO RT AND ` 45,73,970/- IN BOTH THE CASES FOR WANT OF PROPER VO UCHERS AND ` 12,56,619/- AND ` 8,02,701/- AS THE ASSESSEE COULD NOT PROPERLY EXPLAIN THE SOURCES FOR CONSTRUCTION IN TH ESE TWO ASSESSEES NAMELY SHRI P.GANESAN & SHRI P.KARVANNAN RESPECTIVELY. ON A READING OF THE ASSESSMENT ORDER AND THE ITA NOS.2010 & 2012/MDS/2013 7 ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), WE FIND THAT THIS ISSUE HAS NOT BEEN EXAMINED IN DETAIL BY THE LOWER AUTHORITIES. THE ASSESSING OFFICER SIMPLY TREATED THE COST OF CONSTRUCTION AS UNEXPLAINED COST OF CONSTRUCTION ON THE GROUND THAT THERE IS DIFFERENCE IN THE VALUATION BE TWEEN THEIR BOOKS AND THE DVOS REPORT AND VOUCHERS WERE NOT A VAILABLE AND FOR WANT OF PROPER EXPLANATION WITH REGARD TO SOURCE. IN OUR VIEW, ASSESSING OFFICER SHOULD HAVE MADE FURTHE R MORE ENQUIRIES IN THIS REGARD WHICH HAS NOT BEEN DONE. W E ALSO FIND FROM ASSESSMENT ORDER THAT ASSESSMENT WAS TAK EN UP AT THE FAG END OF THE YEAR AND IT APPEARS THAT PROPER OPPORTUNITY WAS NOT GIVEN TO THE ASSESSEE FOR EXPLAINING THE CO ST OF CONSTRUCTION, AS WE COULD SEE FROM THE ASSESSMENT O RDER THAT QUESTIONNAIRE WAS ISSUED ON 9.9.2010 POSTING THE CA SE FOR HEARING ON 26.10.2010, 02.12.2010, 10.12.2010 AND F INALLY ASSESSMENT WAS COMPLETED ON 27.12.2010. THE COMMISSIONER OF INCOME TAX (APPEALS) SIMPLY CONFIRM ED THE ORDER OF ASSESSMENT WITHOUT GOING INTO MUCH DETAILS ACCEPTING THE VERSION OF THE ASSESSING OFFICER AND DIRECTING HIM TO GIVE 10% TOWARDS SELF-SUPERVISION INSTEAD OF 7.5%. IN ITA NOS.2010 & 2012/MDS/2013 8 OUR CONSIDERED VIEW, THIS ISSUE HAS TO BE EXAMINED AFRESH DE NOVO BY THE ASSESSING OFFICER AFTER GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEES. THEREFORE, IN THE IN TEREST OF JUSTICE, WE RESTORE THIS ISSUE TO THE FILE OF THE A SSESSING OFFICER FOR DE NOVO CONSIDERATION. 6. THE NEXT COMMON ISSUE IN BOTH THE APPEALS OF THE ASSESSEES IS THAT COMMISSIONER OF INCOME TAX (APPEA LS) ERRED IN SUSTAINING THE ADDITION MADE TOWARDS UNACC OUNTED INVESTMENT IN PLOT IN CHENNAI. AT THE TIME OF HEARI NG, COUNSEL FOR THE ASSESSEE SUBMITS THAT HE IS NOT PRESSING TH IS GROUND/ ISSUE. THEREFORE, THIS GROUND OF APPEAL IS DISMISSE D AS NOT PRESSED IN BOTH THE APPEALS OF THE ASSESSEES. 7. THE NEXT ISSUE IN THE CASE OF MR. P.GANE SAN IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTA INING THE ADDITION TOWARDS UNDISCLOSED ADVANCE PAID FOR F LAT AT RS.5,00,000/-. THE ASSESSING OFFICER NOTICED THAT AT THE TIME OF SEARCH ON 23.10.2008 ON VERIFICATION OF THE BANK STATEMENTS OF ASSESSEE GROUP WITH SBI, SIVAKASI, IT WAS FOUND ITA NOS.2010 & 2012/MDS/2013 9 THAT THE ASSESSEE HAS ISSUED THREE CHEQUES FOR ` 5 LAKHS EACH IN THE NAMES OF M/S. VINAYAGA FIREWORKS, M/S. SONY FIREWORKS AND M/S. MICKY PAPER CAPS WORKS FOR TAKI NG THREE DEMAND DRAFTS. ON VERIFICATION OF BOOKS OF ACCOUNTS OF THE THREE CONCERNS, THREE CHEQUES WERE FOUND TO HAVE B EEN GIVEN TO DIFFERENT PARTIES I.E. FROM VINAYAGA FIRE WORKS, M/S. SONY FIREWORKS AND MICKY PAPER CAPS WORKS TO M/S. SRINAR COMMUNICATIONS PVT.LTD., MOHAMMED BHAI, KOTTAKUPPAM AND VISRANTHI SABARI, CHENNAI RESPECTIVELY. THE AS SESSING OFFICER WHILE COMPLETING THE ASSESSMENT MADE ADDITI ON OF ` 5 LAKHS TOWARDS UNDISCLOSED INCOME STATING THAT SRINA R COMMUNICATIONS IS THE LAND PROMOTERS AND M/S. VISRA NTHI SABARI IS THE BUILDER OF AN APARTMENT NAMED AARA NYA IN WHICH THE ASSESSEE IS PURCHASING A FLAT. OUT OF ` 15,00,000/- PAID FOR THE FLAT ONLY ` 10,00,000/- IS RELATED TO THE FLAT PROMOTER AND THE ASSESSEE HAD CONCEALED THE INVESTM ENT OF ` 5,00,000/- BY ACCOUNTING IT AS EXPENDITURE IN THE NAME OF MR.MOHAMED BHAI. ASSESSING OFFICER FURTHER OBSERVED THAT ASSESSEE HAD MADE ENTRIES IN DIFFERENT NAMES IN IT S ACCOUNTS OF THE GROUP CONCERNS AND IT HAS DEVISED TO SHOW LESSER ITA NOS.2010 & 2012/MDS/2013 10 VALUE AS ADVANCE FOR FLAT AND INCREASED EXPENDITURE TO THE TUNE OF ` 5,00,000/-. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINED THE ADDITION. 8. THE COUNSEL FOR THE ASSESSEE SUBMITS TH AT ASSESSEE MR. P.GANESAN PAID ` 5,00,000/- TO SRINAR COMMUNICATIONS (P) LTD. THROUGH SONY FIREWORKS (P) LTD. A GROUP CONCERN ON 9.8.2008. COUNSEL SUBMITS THAT ` 5,00,000/- PAID TO THE BUILDER WAS WRONGLY DEBITED TO MR.MOHAMMED BHAI, KOTTAKUPPAM ACCOUNT IN THE BOOKS OF M/S SONY FIREWO RKS INSTEAD OF M/S.SRINAR COMMUNICATIONS P. LTD. ACCOUN T DUE TO THE REASON THAT THE ACCOUNTANT WAS NOT AWARE OF THE REASON FOR PAYMENT. HE SUBMITS THAT THIS ENTRY HAS BEEN R ECTIFIED ON 1 ST APRIL, 2009 BUT TRANSFERRED TO ARANYA PROJECTS ACC OUNT. HE SUBMITS THAT THIS ACTION OF THE ASSESSEE REVEALS TH AT THERE IS NO CONCEALMENT OF INVESTMENT IN ARANYA PROJECT. TH E COUNSEL SUBMITS THAT IN FACT STATEMENT OF ARANYA PROJECT BU ILDERS CONFIRMING THE AMOUNT RECEIVED FROM THE ASSESSEE WA S ALSO SUBMITTED. THEREFORE, HE PRAYS THAT ADDITION MAY BE DELETED. ITA NOS.2010 & 2012/MDS/2013 11 9. THE DEPARTMENTAL REPRESENTATIVE SUPPORTED T HE ADDITION MADE BY THE ASSESSING OFFICER. 10. HEARD BOTH SIDES. PERUSED THE ORDERS OF LOWER AUTHORITIES. THE SUBMISSION OF THE ASSESSEE WAS TH AT THE ASSESSEE HAS WRONGLY DEBITED ` 5 LAKHS OF MR. MOHAMED BHAI, KOTTAKUPPAM ACCOUNT IN THE BOOKS OF M/S. SON Y FIREWORKS INSTEAD OF M/S. SRINAR COMMUNICATIONS ACC OUNT AND THIS ENTRY HAS BEEN RECTIFIED ON 1.4.2009 BY TRANSF ERRING TO ARANYA PROJECTS ACCOUNT. THE ASSESSEE SUBMITS THAT IT IS A USUAL PRACTICE THAT WHENEVER CERTAIN PAYMENT WAS MA DE, ACCOUNTANT USED TO DEBIT MOHAMED BHAI, KOTTAKUPPAM ACCOUNT AND LATER ON AFTER ASCERTAINING THE FACT AS TO FOR WHICH PURPOSE PAYMENT WAS MADE, REVERSAL ENTRIES WERE PAS SED. SIMILARLY ASSESSEE SUBMITS THAT IN THIS CASE ASSESS EE HAS INITIALLY DEBITED THIS AMOUNT OF ` 5 LAKHS TO MOHAMMED BHAI ACCOUNT AND LATER ON 1 ST APRIL, 2009 ENTRY WAS REVERSED BY CREDITING THE SAID ACCOUNT. THE TRANSACTION WAS IN FACT CARRIED OUT THROUGH BANK AND REFLECTED IN BALANCE SHEET AND THEREFORE, IT CANNOT BE TREATED AS UNDISCLOSED ADVA NCE. IN ITA NOS.2010 & 2012/MDS/2013 12 SUCH CIRCUMSTANCES, IT CANNOT BE HELD THAT THERE IS UNDISCLOSED ADVANCE BY THE ASSESSEE FOR PURCHASE OF FLAT. IN ANY EVENT, WE DIRECT THE ASSESSING OFFICER TO VERIF Y THE ENTRIES MADE BY THE ASSESSEE AND IF THE ASSESSEE REVERSES S UCH ENTRIES AS HE SUBMITS, THE ADDITION BE DELETED. FOR THIS LIMITED PURPOSE, WE RESTORE THIS ISSUE TO THE FILE OF THE A SSESSING OFFICER. 11. THE NEXT ISSUE IN THE APPEAL OF MR. P.GANESAN I S THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTAINING THE ADDITION MADE TOWARDS UNACCOUNTED BU SINESS INCOME USED FOR ON-MONEY PAYMENT FOR LAND PURCHASED . THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT M ADE ADDITION OF ` 62,50,000/- TOWARDS UNACCOUNTED INCOME OF THE ASSESSEE BASED ON THE STATEMENT OF THE ASSESSEE THA T HE HAD PURCHASED 125 ACRES OF VACANT LAND BY MAKING ON -MONEY PAYMENT OF ` 50,000/- PER ACRE APART FROM REGISTERED VALUE. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) SUS TAINED THE ADDITION MADE BY THE ASSESSING OFFICER. ITA NOS.2010 & 2012/MDS/2013 13 12. THE COUNSEL FOR THE ASSESSEE SUBMITS THAT IN TH E COURSE OF SEARCH ASSESSEE HAS GIVEN STATEMENT THAT HE HAS PURCHASED 125 ACRES OF VACANT LAND BY MAKING ` 50,000/- PER ACRE AS ON-MONEY PAYMENT. HOWEVER THIS STATEMENT W AS RETRACTED IN THE COURSE OF ASSESSMENT BY LETTER DAT ED 26.10.2010 STATING THAT THE SWORN STATEMENT WAS GIV EN UNDER PRESSURE AND NO ON-MONEY WAS PAID BY HIM. THE COUNS EL SUBMITS THAT ASSESSEE NEVER PURCHASED 125 ACRES OF LAND AND THE ADDITION WAS MADE ONLY BASED ON THE STATEME NT WITHOUT THERE BEING ANY MATERIALS FOUND IN THE COUR SE OF SEARCH SUGGESTING THAT ASSESSEE HAD IN FACT PAID ON -MONEY. THE COUNSEL SUBMITS THAT WITHOUT ANY MATERIAL SEIZE D IN THE COURSE OF SEARCH ADDITION CANNOT BE MADE MERELY BAS ED ON THE STATEMENTS OF THE ASSESSEE. 13. THE DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ADDITION MADE BY THE ASSESSING OFFICER. 14. HEARD BOTH SIDES. PERUSED THE ORDERS OF LOWER AUTHORITIES. THE ASSESSING OFFICER MADE ADDITION B ASED ON ASSESSEES STATEMENT THAT HE HAS PAID ON-MONEY FOR ITA NOS.2010 & 2012/MDS/2013 14 PURCHASE OF THE LAND. THE ASSESSING OFFICER MADE TH IS ADDITION ONLY ON THE BASIS OF THE STATEMENT OF THE ASSESSEE AND NO OTHER MATERIAL WAS FOUND IN THE COURSE OF SE ARCH SUGGESTING ANY ON-MONEY PAYMENT MADE BY THE ASSESSE E. NO INCRIMINATING MATERIAL WAS FOUND DURING THE COUR SE OF SEARCH TO SAY THAT ASSESSEE HAS PURCHASED 125 ACRE S OF LAND AND MADE PAYMENT OF ON-MONEY. IN SUCH CIRCUMSTANCES , WE ARE OF THE VIEW THAT ADDITION CANNOT BE SUSTAINED O NLY BASED ON THE STATEMENTS OF THE ASSESSEE OBTAINED DURING T HE COURSE OF SEARCH WITHOUT THERE BEING ANY INCRIMINATING MA TERIAL FOUND SUGGESTING THE PAYMENT OF ON-MONEY BY THE AS SESSEE. THE ADDITION IS THEREFORE DELETED. 15. THE ONLY ISSUE LEFT FOR ADJUDICATION IN THE AP PEAL OF THE ASSESSEE MR. P.KARVANNAN IS THAT COMMISSIONER O F INCOME TAX (APPEALS) ERRED IN SUSTAINING THE ADDITI ON MADE TOWARDS UNACCOUNTED INVESTMENT IN JAVANI KUPPE LAND . THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT M ADE ADDITION OF ` 9,58,000/- AS UNACCOUNTED INCOME OF THE ASSESSEE STATING THAT ASSESSEE PAID ON-MONEY FOR PU RCHASE ITA NOS.2010 & 2012/MDS/2013 15 OF LAND AT JAVANI KUPPE VILLAGE, KARNATAKA OBSERVIN G AS UNDER:- 5.3 THE SALE CONSIDERATION AS PER THE SALE DEED DATED 26.4.2008 WAS ` 2,32,000/- FOR 6.04 ACRES OF DRY LAND AT JAVANI KUPPE VILLAGE, KARNATAKA. THE VALUE OF 6.04 ACRES OF LAND AT THE RATE OF ACTUAL PRICE OF ` 1.60 LAKHS PER ACRE AS MENTIONED IN THE ABOVE SEIZED MATERIAL COMES TO ` 9.90 LAKHS. ASSESSEE IN HIS REPLY HAD STATED THAT HE HAD DEBITED ` 9.70 LAKHS IN HIS PERSONAL ACCOUNT AND ` 2.32 LAKHS HAS BEEN DEBITED IN THE ACCOUNTS OF M/S.SQNY GRANITES. THIS MEANS THAT ` 1.60 LAKHS PER ACRE HAD BEEN PAID ACTUALLY AS SALES CONSIDERATION THEREBY PROVING THE JOTTINGS IN THE SEIZED MATERIAL. HOWEVER, ASSESSEES CLAIM THAT ` 9.50 LAKHS HAS BEEN DEBITED IN HIS PERSONAL ACCOUNTS AND HENCE INVESTMENT SHOULD BE TREATED AS PROPERLY ACCOUNTED IS NOT ACCEPTED. NO EVIDENCE HAD BEEN ADDUCED IN SUPPORT OF THIS STATEMENT. BUT THE VALUE OF THE ABOVE LAND AS ADMITTED AND ACCOUNTED IN THE BOOKS OF ACCOUNT OF M/S.SQNY GRANITES IS ONLY ` 232000/-. ` 200000/- HAS BEEN PAID EXTRA AS PER THE SEIZED MATERIAL WHICH MEANS THAT IN TOTAL ` 11.90 LAKHS HAD BEEN SPENT ON THIS INVESTMENT. THEREFORE, IT IS CLEARLY ESTABLISHED THAT THE ABOVE INVESTMENT IS SHORT ACCOUNTED FOR ` 232000/- INSTEAD OF ACTUAL VALUE OF ` 11.90 LAKHS. THE EXCESS AMOUNT COMES TO ` 9.58 LAKHS. HENCE, THE SUM OF ` 958000/- REPRESENTS ONMONEY PAID AND THEREFORE IT IS ASSESSED AS THE UNACCOUNTED INCOME OF THE ASSESSEE. ITA NOS.2010 & 2012/MDS/2013 16 16. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINED THE ADDITION AGREEING WITH THE VIEW OF THE ASSESSING OFFICER. THE ASSESSEE REITERATED THE SUB MISSIONS MADE BEFORE THE LOWER AUTHORITIES AND SUBMITS THAT ` 9.50 LAKHS HAS BEEN DEBITED IN HIS PERSONAL ACCOUNTS OF THE ASSESSEE AND HENCE INVESTMENT SHOULD BE TREATED AS PROPERLY ACCOUNTED AND THERE IS NO NEED FOR ANY ADD ITION. 17. THE DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 18. HEARD BOTH SIDES. PERUSED THE ORDERS OF LOWER AUTHORITIES AND WE FIND THAT THIS MATTER HAS TO BE REEXAMINED AFRESH BY THE ASSESSING OFFICER AS IT WAS NOT PROP ERLY EXAMINED IN DETAIL WITH REGARD TO PAYMENT AND SUBMI SSIONS MADE BY THE ASSESSEE. THEREFORE, IN THE INTEREST OF JUSTICE, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFF ICER FOR DE NOVO CONSIDERATION. ITA NOS.2010 & 2012/MDS/2013 17 19. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSE ES ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY, TH E 27 TH DAY OF FEBRUARY, 2014 AT CHENNAI. SD/- SD/- (A.MOHAN ALANKAMONY) (CHALLA NAGEN DRA PRASAD) ACCOUNTANT MEMBER JUDI CIAL MEMBER CHENNAI, DATED THE 27 TH FEBRUARY, 2014. SOMU COPY TO: (1) APPELLANT (4) CIT (A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.