THE ITO, WARD - 2(2), Vijayawada V. M/s Sri Sai Krishna Promoters, Vijayawada

ITA 219/VIZ/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6618 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 03-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T SATYANANDAM
• Assessee Lawyers: R PRASAD
• Keywords: Unexplained investment; Document seized; Additional evidence; Cost of acquisition; Documents seized
• Section: 133A; 147; 131; 69; 148

Judgement Text

ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . ' , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NO.219/VIZAG/2013 ( / ASSESSMENT YEAR: 2007-08) ITO, WARD - 2(2), VIJAYAWADA SRI SAI KRISHNA PROMOTERS VIJAYAWADA [PA N NO. ABIFS3629L ] ( ' / APPELLANT) ( ()' / RESPONDENT) C.O. NO.82/VIZAG/2013 (ARISING OUT OF I.T.A.NO.219/VIZAG/2013) ( / ASSESSMENT YEAR: 2007-08) SRI SAI KRISHNA PROMOTERS VIJAYAWADA ITO , WARD - 2(2), VIJAYAWADA ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI T. SATYANANDAM, DR / RESPONDENT BY : SHRI M.S.R. PRASAD, AR / DATE OF HEARING : 19.09.2017 / DATE OF PRONOUNCEMENT : 06.10.2017 ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 2 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) {CIT(A)}, VIJAYAWADA VIDE NO.429/CIT(A)/VJA/11-12 DATED 22.1.2013 AND THE CRO SS APPEAL FILED BY THE ASSESSEE IS IN SUPPORT OF ORDER OF THE CIT(A), VIJAYAWADA FOR THE ASSESSMENT YEAR 2007-08. 2. ALL THE GROUNDS OF APPEAL ARE RELATED TO THE DEL ETION OF ADDITION TOWARDS UNEXPLAINED INVESTMENT AMOUNTING TO ` 1,13,94,200/-. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF REAL ESTATE I.E. CONSTRUCTION AND SALE OF RESIDENTIAL PLOTS OF ITS OWN AND ON DEVELOP MENT BASIS. THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INC OME OF ` NIL. A SURVEY U/S 133A OF THE INCOME TAX ACT, 1961 (HEREINAFTER C ALLED AS 'THE ACT') WAS CONDUCTED IN THE ASSESSEES CASE ON 9.2.2011 AN D DURING THE COURSE OF SURVEY, THE ASSESSING OFFICER FOUND CERTAIN INCR IMINATING MATERIAL. CONSEQUENT TO THE SURVEY U/S 133A OF THE ACT, THE A SSESSMENT WAS RE- OPENED U/S 147 OF THE ACT BY ISSUE OF NOTICE U/S 14 8 OF THE ACT AND COMPLETED THE ASSESSMENT ON TOTAL INCOME OF ` 1,13,94,200/-. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ( A.O.) MADE THE ADDITION OF ` 1,13,94,200/-, WHICH IS THE IMPUGNED ADDITION CHAL LENGED ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 3 BY THE ASSESSEE. AS STATED ABOVE A SURVEY U/S 133A OF THE ACT WAS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 09.02.2011. DURING THE COURSE OF SURVEY, THE A.O. IMPOUNDED THE BOOKS OF ACCOUNTS & LOOSE SHEETS. FROM THE BOOKS OF ACCOUNTS IMPOUND ED BY THE A.O. MARKED AS ANNEXURE SSKP/29 PAGE 58, IT WAS REVEALED THAT THE ASSESSEE HAD PURCHASED FOUR ADJACENT SITES ADMEASURING 288 S Q.YDS. EACH RELATING TO SRI YALAVARTHI PRABHAKAR, 319 SQ.YARDS , SRI KANAKAMEDALA RAJASEKHAR, 288 SQ.YDS., SMT. SAKAMURI BABY SAROJIN I GPA ANNE SWARAJYA LAKSHMI, 272 SQ.YDS. AND SMT. PONNAM RAMA SITA LOCATED AT PATAMATALALANKA OF VIJAYAWADA OF RE SURVEY NO.71/1 FOR TOTAL CONSIDERATION OF ` 2,22,10,000/- AND GOT IT REGISTERED DURING THE FINANCIAL YEAR 2006-07. THE ASSESSEE FIRM HAS ADOP TED THE VALUE TOWARDS PURCHASE OF THE SAID SITE AT ` 99,33,000/- ONLY. DURING THE COURSE OF SURVEY, A STATEMENT WAS RECORDED FROM MR. KUNDARAVALLI VENKATA NARASAIAH, MANAGING PARTNER OF THE FIRM, WH O HAS CONFIRMED THAT THE FIRM HAS PURCHASED THE SITE FOR A TOTAL CO NSIDERATION OF ` 2,22,10,000/- AS PER THE DETAILS CONTAINED IN THE B OOK FOUND AND IMPOUNDED AT THE TIME OF SURVEY MARKED AS ANNEXURE NO.SSKP/29 PAGE 58. HOWEVER, SUBSEQUENTLY DURING THE STATEMENT RECO RDED U/S 131 OF THE ACT ON 25.3.2011, THE ASSESSEE HAD RETRACTED TH E STATEMENT AND DENIED HAVING MADE THE CASH PAYMENT TO THE VENDOR O F THE SITE. ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 4 HOWEVER, THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE TO DISPROVE THE PAYMENT OF ` 2,22,10,100/- AND THE CONTENTS MENTIONED IN THE PA GE NOS.58 OF THE SPIRAL NOTE BOOK OF SSKP/29 IS NOT TR UE. THEREFORE, PLACING RELIANCE ON THE PRESUMPTION U/S 292C OF THE ACT, THE A.O. TREATED PAYMENT OF ` 2,22,10,000/- AS TRUE FOR PURCHASE OF THE SITE AND ACCORDINGLY, MADE THE ADDITION OF ` 1,13,94,200/- (I.E. FROM THE TOTAL PURCHASE CONSIDERATION THE A.O. ALLOWED THE SALE DE ED VALUE AND OTHER EXPENSES). 3. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD. CIT(A) DELETED THE AD DITION MADE BY THE A.O. BEFORE THE LD. CIT(A), THE ASSESSEE FILED AN A FFIDAVIT FROM B. BABUJEE WHO WAS AN EX-EMPLOYEE OF SRI SAI KRISHNA P ROMOTERS STATING THAT THE NOTINGS IN THE IMPOUNDED SHEET WAS IN HAND WRITING OF B. SRINIVAS WHO LEFT THE ORGANIZATION. FOR CLARITY AN D CONVENIENCE, WE EXTRACT THE RELEVANT PART OF THE AFFIDAVIT AS UNDER : 5. SUBSEQUENTLY I AM DOING SOME PART TIME JOBS AS ACCO UNTANT AND RECENTLY MET SRI K.V. NARSAIAH, MANAGING PARTNE R OF SSKP AND SSKC IN JUNE, 2012 REQUESTING HIM TO ENTRUST ME ANY PART TIME ACCOUNTS JOB OF HIS CONCERNS OR ANY KNOWN CONCERNS TO HIM. THEN, SRI K. V. NARSAIAH HAS SHOWN ME XEROX COPY OF PAGE NUMBERED 58 OF A SPIRAL NOTE BOOK AND ASKED ME WHETHER THE SAME WAS WRITTEN BY ME. I RECOGNISED TH E WRITING IN WHICH THE FOLLOWING FIGURES WERE MENTION ED AGAINST THE FOLLOWING NAMES: 6. I CONFIRMED THE SAID WRITINGS TO BE THAT OF MR. B. SRINIVAS WHO LEFT THE ORGANIZATION AND EXPLAINED THE SAME TO HIM AND ALSO SHOWN HIM SOME OF THE NOTINGS IN MY HANDWRITING IN THE SAME XEROX COPY OF THE SPIRAL NOTEBOOK FOR EXAMPLE AT PA GES 43, 44 ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 5 ETC. 7. HE AGAIN HAS SHOWN ME A XEROX OF PAGE NO. 59 OF ANO THER SPIRAL NOTEBOOK, WHICH CONTAINED THE FOLLOWING NOTINGS: 8. I AGAIN CONFIRMED THE NOTINGS THEREIN TO BE IN THE WRITING OF SRI B. SRINIVAS AND AGAIN SHOWN HIM SOME OF THE WRI TINGS IN MY OWN HANDWRITING IN THE SAID XEROX COPY OF THE SP IRAL NOTEBOOK FOR EXAMPLE AT PAGES 3, 4 & ETC. I ALSO EX PLAINED HIM THAT THE FIGURE OF RS. 2,36,30,135/- WAS SIMPLY COPIED BY ME FROM PAGE NUMBER 59 ABOVE INTO SOME OTHER LOOSE SHEETS WHILE CALCULATING PROJECT COST. I SIMPLY COPIED THE SAID FIGURE AS IT IS NOTED IN THE SAID PAGE NUMBER 59 AS WRITTE N BY SRI B. SRINIVAS. I DID NOT KNOW THE ACTUAL SITE COST OF EI THER PATAMATA LANKA SITE OR TADIGADAPA SITE. I SIMPLY CO PIED THE SAID FIGURES BECAUSE THEY WERE WRITTEN BY SRI B. SR INIVAS PUTTING THE HEADING 'SITE COST'. THE MANAGEMENT NEV ER REQUIRED PERSONS LIKE MYSELF WHO ARE IN THE CLERICA L CADRE TO NOTE DOWN ANYWHERE ANY SITE COST IN ANY OF THE BOOK S OR PAPERS AS OUR JOB IS CONCERNED WITH GATHERING OF IN FORMATION REGARDING PAYMENTS MADE AT SITE TOWARDS CONSTRUCTIO N COST FOR CONTROL PURPOSE AND ALSO AS, THE MANAGEMENT MIG HT HAVE FELT THE INFORMATION REGARDING SITE PURCHASE COST T O BE SENSITIVE TO BE KNOWN TO A PERSON OF CLERICAL CADRE LIKE ME. I ALSO DO NOT KNOW HOW SRI B. SRINIVAS CAME TO NOTE S UCH THINGS OR ON WHAT BASIS HE HAS ARRIVED AT SUCH FIGU RES. THE SPIRAL NOTE BOOKS ARE PRIMARILY AND SOLELY MAINTAIN ED BY SRI B. SRINIVAS AND SUBSEQUENTLY MYSELF TO NOTE DOWN PA YMENTS IN FLOW AND OUT FLOW REGARDING APARTMENTS BOOKING A ND CONSTRUCTION EXPENSES, BOTH THAT TOOK PLACE AT SITE . 4. THE LD. CIT(A) FORWARDED THE AFFIDAVIT TO THE A. O. AND THE A.O. SUBMITTED THE REMAND REPORT REITERATING THE FINDING S IN THE ASSESSMENT ORDER. THE LD. CIT(A) IN THE ORDER HELD THAT HAVIN G RETRACTED FROM THE STATEMENT, THE A.O. SHOULD HAVE RECORDED THE STATEM ENT FROM THE VENDOR AND IF IN CASE OF DISCREPANCY, THE ASSESSEE SHOULD HAVE ALLOWED TO CROSS EXAMINE THE VENDOR. FURTHER, THE A.O. SHO ULD HAVE GATHERED THE INFORMATION AS TO WHAT ARE THE PRICES OF THE SI MILAR PROPERTIES THAT HAVE FETCHED IN AND AROUND THE PLACES, WHERE THE IM PUGNED PROPERTY WAS SITUATED AND IN CASE OF DISCREPANCY, THE A.O. S HOULD HAVE CALLED FOR ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 6 THE EXPLANATION FROM THE ASSESSEE. THE LD. CIT(A) OBSERVED THAT THE A.O. SHOULD HAVE REFERRED THE PROPERTY TO VALUATION AND DIGGED THE SOURCES OF FUNDS FOR MAKING THE INVESTMENT. HAVING NOT TAKEN THE ACTIONS MENTIONED ABOVE, THE A.O. HAS NOT COLLECTED THE MATERIAL EVIDENCES AND THE BURDEN OF THE A.O. HAS NOT BEEN D ISCHARGED. THE LD. CIT(A) WAS OF THE OPINION THAT THE ONUS LIES ON THE REVENUE TO SUBSTANTIATE THE POINT AT ISSUE THAT THE ASSESSEE H AS PAID THE ON MONEY. THE LD. CIT(A) WAS OF THE VIEW THAT THE IMPOUNDED D OCUMENT IS THE FIRST STEP TO PROBE THE IMPUGNED INVESTMENTS AND THE DOCU MENT FOUND WOULD NOT ITSELF IS CONCLUSIVE AND IT GIVES CLUE ONLY. T HE A.O. MADE THE ADDITION ON THE GUESS WORK, IMAGINATION, ETC. AND A CCORDINGLY THE LD. CIT(A) DELETED THE ADDITION MADE BY THE A.O. FOR T HE SAKE OF CONVENIENCE, WE EXTRACT THE RELEVANT PARAGRAPH OF T HE LD. CIT(A) IN PARA NO.7, WHICH READS AS UNDER: IT TRANSPIRES FROM RECORDS THAT AS PER THE IMPOUND ED DOCUMENT BEING AT PAGE NO. 58 OF ANNEXURE SSKP/29 ON WHICH D ETAILS OF TOTAL EXPENSES INCURRED FOR PURCHASE OF THE IMPUGNED PLOT S AT PATAMATA LANKA BELONGING TO FOUR VENDORS NAMELY SRI Y. PRABH AKAR, SMT A. SWARAJYA LAXMI, SRI A. RAJASEKHAR AND SMT P. RAMA S ITA AMOUNTING IN TOTAL TO RS. 2,22,10,000/- WAS MENTIONED. THE IT EM WISE DETAILS OF THIS AMOUNT WERE MENTIONED AT PAGE NO 2 & 3 OF T HE ASSESSMENT ORDER. AS SPELT OUT ALREADY, DURING THE COURSE OF S URVEY PROCEEDINGS, THE MANAGING PARTNER HAS ACCEPTED THAT ON MONEY WAS PAID, BUT HOWEVER, WHEN HE WAS SUMMONED TO THE INCOME TAX OFFICE ON 25.03.2011 IN COURSE OF THE POST SURVEY I NVESTIGATIONS AND RECORDED A STATEMENT, THEN HE HAS RETRACTED FRO M THE EARLIER STATEMENT AND STRUCK TO HIS GUNS THAT THE TOTAL AMO UNT PAID TO THE FOUR VENDORS WAS RS. 99,33,000/- ONLY WHICH WAS PAI D THROUGH BANKING CHANNELS. (T THI1 STAGE, THE PROPER COURSE OF ACTION ON THE PART OF THE AO COULD BE TO (I) VERIFY THE ACTUAL AM OUNT RECEIVED BY ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 7 THE VENDORS AND IN CASE OF DISCREPANCY IN LIGHT OF THE FINDINGS OF THE SURVEY, ALLOWING THE APPELLANT TO CROSS EXAMINE THE VENDORS, WHICH HAS NOT BEEN MADE IN THE CASE ON HAND; (II) T O GATHER INFORMATION AS TO WHAT ARE THE PRICES THAT SIMILAR PROPERTIES HAVE FETCHED IN AND AROUND THE PLACES, WHERE THE IMPUGNE D PROPERTY WAS SITUATED AND INCASE OF DISCREPANCY, CALLING FOR EXPLANATION FROM THE APPELLANT, WHICH HAS NOT BEEN DONE; (III) AT LEAST REFERRING THE MATTER TO THE DVO FOR HIS-OPINION, WHICH HAS AL SO NOT BEEN DONE; (IV) DIGGING OUT FOR THE SOURCES OF SUCH FUND S FOR THE APPELLANT TO INVEST AND AT THE SAME TIME ALSO FINDI NG OUT THE DESTINATION OF THE IMPUGNED ON MONEY IN THE HANDS O F THE FOUR RECIPIENTS, SO THAT WITH SUCH MATERIAL AND EVIDENCE S, THE APPELLANT COULD HAVE BEEN CONFRONTED. THIS IS SO, BECAUSE WHE N THE AO HAS MADE ADDITION UNDER SECTION 69, THE ONUS LIES ON TH E REVENUE TO SUBSTANTIATE THE POINT AT ISSUE, I.E., THE APPELLAN T HAS PAID THE IMPUGNED AMOUNTS. IN FACT, THE IMPOUNDED DOCUMENT I S THE FIRST STEP TO PROBE THE IMPUGNED INVESTMENTS. THE DOCUMEN T FOUND WOULD NOT IN ITSELF BE CONCLUSIVE. IT GIVES A CLUE ONLY. FROM THIS CLUE, THE AO HAS TO DEVELOP THE CASE AND BRING COGE NT MATERIAL ON RECORD SO AS TO MAKE A SUSTAINABLE ADDITION. WHEN THE APPELLANT HAS RETRACTED, THEN IT IS FOR THE AO TO REBUT IT BY BRINGING MATERIAL ON RECORD, MORE SO WHEN THE MATERIAL ON RECORD POIN TS TO THE CORRECTNESS OF THE CLAIM MADE BY THE APPELLANT. IN THE ABSENCE OF SUCH A POSTURE TAKEN BY THE AO, THE ADDITION MADE B Y THE REVENUE TANTAMOUNT TO AN ADDITION BASED ON GUESSWORK, IMAGI NATION ETC., WHICH CANNOT BE SUSTAINED. THUS, THE ADDITION MADE BY THE AO AT ` 1,13,94,200 STANDS DELETED. 5. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE RE VENUE IS IN APPEAL BEFORE THIS TRIBUNAL. 6. APPEARING FOR THE REVENUE, THE LD. DEPARTMENTAL REPRESENTATIVE (D.R.) ARGUED THAT A SURVEY U/S 133A OF THE ACT WAS CONDUCTED IN THE CASE OF THE ASSESSEE AND DURING THE COURSE OF SURVE Y, EVIDENCES WERE FOUND IN THE FORM OF SPIRAL NOTE BOOK CONTAINING TH E DETAILS OF THE EXPENDITURE INCURRED FOR THE PURCHASE OF SITE AT TA DIGADAPA. AS PER PAGE NO.58, THE COST OF PURCHASE OF TOTAL SITE WAS ` 2,22,10,000/- OUT OF ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 8 WHICH A SUM OF ` 99,33,000/- WAS ACCOUNTED AND THE REMAINING AMOUNT OF ` 1,22,77,000/- WAS PAID OUTSIDE THE BOOKS OF ACCOUN TS. THE NOTING GIVES CLEAR PICTURE OF COMPLETE DETAILS OF PARTYWIS E PAYMENTS MADE FOR PURCHASE OF THE SITE. THIS WAS FOUND IN THE BUSINE SS PREMISES OF THE ASSESSEE. FURTHER, IN PAGE NO.129 OF SSKP33, WHICH WAS ENCLOSED AS PAGE NO.2 OF THE PAPER BOOK OF THE ASSESSEE, ITEMWI SE DETAILS OF VARIOUS EXPENSES WAS RECORDED WHICH INCLUDES TILES, CEMENT, STEEL, PLUMBING KITCHEN, CERAMIC AND ELECTRICAL ITEMS, SANITARY, PA INTS, ETC. PARTYWISE AND THE TOTAL EXPENDITURE OF ` 4,47,35,910/- WAS ARRIVED AT WHICH INCLUDES THE SITE PAYMENT OF ` 2,22,10,000/- FOR THE LAND UNDER THE HEAD SITE PURCHASE. THE BREAKUP OF EXPENDITURE IS REPRODUCED AS UNDER: EXPENDITURE DETAILS: MATERIALS PURCHASE PAYMENTS ` 1,41,75,986 LABOUR PAYMENTS ` 83,79,925 TOTAL ` 2,25,55,910 SITE PURCHASE ` 2,22,10,000 TOTAL EXPENDITURE ` 4,47,65,910 THE ITEM-WISE DETAIL OF EXPENSES WAS RECORDED IN TH E LOOSE SHEET FOUND AT THE TIME OF SURVEY AS ABOVE. THEREFORE, THERE IS NO REASON TO DISBELIEVE THE EXPENDITURE INCURRED FOR PURCHASE OF SITE. THE ASSESSEE HAS NOT DISPUTED OTHER PAYMENTS RECORDED IN PAGE NO .129 OF SSKP/33. ONCE SOME OF THE ITEMS ARE TRUE, THERE IS NO REASON TO DISPUTE THE OTHER ITEMS. THE LD. D.R. FURTHER ARGUED THAT AS PER SEC TION 292C OF THE ACT, ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 9 BURDEN IS ON THE ASSESSEE TO DISPROVE THE CONTENTS OF THE SEIZED MATERIAL BUT NOT ON THE REVENUE. THE LD. CIT(A) ER RONEOUSLY HELD THAT THE ONUS IS ON THE REVENUE TO PROVE THE PAYMENT OF ` 2,22,10,000/- AND THIS IS NOT THE CORRECT LEGAL POSITION. THE LEGAL POSITION IS THE BURDEN IS ON THE ASSESSEE TO DISPROVE THE CONTENTS OF THE LOO SE SHEET. IN THE ASSESSEES CASE, THE ASSESSEE HAS INITIALLY ACCEPTE D THE PAYMENT OF ` 2,22,10,000/- AND SUBSEQUENTLY RETRACTED FROM THE S TATEMENT. THOUGH ASSESSEE HAS FURNISHED AN AFFIDAVIT, THE AFFIDAVIT ITSELF IS NOT CONCLUSIVE EVIDENCE. THE ASSESSEE HAS NOT PRODUCED MR. B. BAB UJEE AND PROVED THAT THE LOOSE SHEET WAS IN FACT WRITTEN BY MR. B. SRINIVAS. SIMILARLY, THE ASSESSEE ALSO DID NOT PRODUCE MR. B. SRINIVAS BEFOR E THE A.O. THE ASSESSEE ALSO DID NOT FURNISH ANY EVIDENCE IN THE F ORM OF APPOINTMENT LETTER AND CONTRIBUTION MADE TO PF, ESI AND THE ATT ENDANCE REGISTER, ETC. TO PROVE BOTH MR. BABUJEE AND MR. B. SRINIVAS IN FA CT HAVE WORKED IN THE ASSESSEES FIRM. THEREFORE, THE AFFIDAVITS FILED B Y THE ASSESSEE CANNOT BE TREATED AS VALID PIECE OF EVIDENCE. THE LD. D.R . ARGUED THAT THE ASSESSEE HAS NOT DISCHARGED THE BURDEN CAST ON HIM AS PER SECTION 292C OF THE ACT. AS PER THE PROVISIONS OF SECTION 292C OF THE ACT, UNLESS OTHERWISE PROVED BY THE ASSESSEE, WHETHER ANY BOOKS OF ACCOUNTS, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUA BLE ARTICLE OR THING ARE FOUND IN THE POSSESSION OR CONTROL OF ANY OTHER PERSON IN THE COURSE ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 10 OF SEARCH OR SURVEY U/S 133A OF THE ACT PRESUMED TH AT SUCH BOOKS OF ACCOUNTS, DOCUMENTS, MONEY BULLION, JEWELLERY OR OT HER VALUABLE ARTICLE OR THING BELONGS TO SUCH PERSON AND CONTENTS OF SUC H BOOKS OF ACCOUNTS AND OTHER DOCUMENTS ARE TRUE. THEREFORE, FOLLOWING THE PRESUMPTION U/S 292C OF THE ACT, THE A.O. HAS RIGHTLY MADE THE ADDITION, WHICH REQUIRES TO BE UPHELD. 7. ON THE OTHER HAND, THE LD. AUTHORISED REPRESENTA TIVE (A.R.) ARGUED THAT THE A.O. SIMPLY RELIED ON THE DUMB DOCU MENTS, WHICH WERE FOUND AND SEIZED AT THE TIME OF SURVEY. REGARDING PAGE NO.1 OF THE PAPER BOOK (SEIZED DOCUMENT NO.SSKP/29/58), THE LD. A.R. ARGUED THAT IT IS A DUMB DOCUMENT WITHOUT DATE, DETAILS OF LAND PURCHASED AND EXTENT OF LAND ETC. AND IT DOES NOT GIVE ANY CLUE F OR CASH PAYMENT. THOUGH THE ASSESSEE HAD ACCEPTED THE PAYMENT SUBSEQ UENTLY, THE ASSESSEE HAS RETRACTED FROM THE STATEMENT GIVEN AT THE TIME OF SURVEY. THE A.O. SHOULD HAVE VERIFIED THE ACTUAL AMOUNT REC EIVED BY THE VENDOR AND MADE NECESSARY ENQUIRIES BEFORE LANDING IN CONC LUSION FOR UNACCOUNTED PAYMENT FOR PURCHASE OF SITE. FURTHER, THE LD. A.R. ARGUED THAT THE A.O. SHOULD HAVE GATHERED MARKET INFORMATI ON OF SIMILAR PROPERTIES IN AND AROUND THE IMPUGNED PROPERTY AND REFERRED THE PROPERTY TO THE DEPARTMENTAL VALUATION. THE LD. A. R. ARGUED THAT ONUS LIES ON THE REVENUE TO SUBSTANTIATE THAT THE ASSESS EE HAD INVESTED THE ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 11 IMPUGNED AMOUNT OF ` 1,13,94,200/- IN LANDED PROPERTY U/S 69 OF THE ACT. THE LD. A.R. ARGUED THAT THE DOCUMENT FOUND A T THE TIME OF SURVEY CANNOT BE TAKEN AS CONCLUSIVE EVIDENCE WITHOUT BRIN GING COGENT MATERIAL ON RECORD FOR SUBSTANTIATING THE ADDITION. THE SUR VEY WAS CONDUCTED ON 09.02.2011, MUCH LATER TO THE DATE OF PURCHASE AND NO DATE WAS MENTIONED AGAINST THE PARTY WISE PAYMENTS MADE TO T HE PARTIES. IT WAS NOT EVEN STATED IN THE IMPOUNDED DOCUMENT THAT THE CASH WAS PAID TO THE VENDOR. THE SAID IMPOUNDED DOCUMENTS WERE NOT IN THE HAND WRITING OF THE ASSESSEE OR THE PARTNERS. DUE TO TH ESE DISCREPANCIES, THE SAME CANNOT BE CONSIDERED AS INCRIMINATING EVIDENCE AND DECIDE AGAINST THE ASSESSEE. ACCORDINGLY THE LD. A.R. ARGUED THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT(A). 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. A SURVEY U/S 133A OF THE ACT WAS CONDUCTED IN THIS CA SE BY THE A.O. ON 09.02.2011 AND DURING THE COURSE OF SURVEY, BOOKS O F ACCOUNTS, NOTE BOOKS, SCRIBBLING PADS, OTHER MISCELLANEOUS BOOKS, SALE AND PURCHASE DOCUMENTS, ETC WERE FOUND AND IMPOUNDED U/S 133A(3) CLAUSE (IIA) OF THE ACT. DURING THE COURSE OF SURVEY, THE A.O. FOU ND THAT THE ASSESSEE HAD PURCHASED FOUR PIECES OF ADJOINING SITES ADMEAS URING 288 SQ.YDS. FROM SRI YALAVARTHI PRABHAKAR, 319 SQ.YDS. FROM KAN AKAMEDALA ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 12 RAJASEKHAR, 288 SQ.YDS. FROM SMT. SAKAMURI BABY SAR OJINI AND 272 SQ.YDS. FROM PONNAM RAMA SITA, LOCATED AT PATAMATAL ANKA OF VIJAYAWADA OF RE SURVEY NO.71/1 FOR A CONSIDERATION OF ` 2,22,10,000/- AND GOT IT REGISTERED FOR A SUM OF ` 99,33,000/-. THE DETAILS OF PAYMENT OF ` 2,22,10,000/- WAS AVAILABLE IN THE IMPOUNDED DOCUM ENT. THE A.O. RECORDED THE STATEMENT FROM THE MANAGING PARTNER OF THE FIRM MR. K. VENKATA NARASAIAH WHO WAS PRESENT AT THE TIME OF SU RVEY. THE A.O. BROUGHT THE CONTENTS OF THE PAGE NO.58 OF ANNEXURE SSKC/29 AND CONFRONTED WITH HIM. IN THE STATEMENT RECORDED U/S 133A OF THE ACT, THE MANAGING PARTNER AGREED THAT THE SITE WAS PURCH ASED FOR A TOTAL CONSIDERATION OF ` 2,22,10,000/-. THE MANAGING PARTNER OF THE FIRM S RI KUDARAVALLI VENKATA NARASAIAH WAS PRESENT AT THE TI ME OF SURVEY OPERATION AND A SWORN STATEMENT HAS BEEN RECORDED F ROM HIM. THE RELEVANT EXTRACT OF THE STATEMENT GIVEN BY THE MANAGING PARTNER OF THE FIRM IS REPRODUCED HERE UNDER: 5 PLEASE GIVE THE DETAILS OF VENTURES AT PATAMATA LANKA. ANS. THE VENTURE AT PATAMATALANKA HAS COME UP ON A SITE WHICH WAS PURCHASED FROM 4 DIFFERENT PARTIES ON 12.1.2007 AND 31.1.2007 FOR A TOTAL CONSIDERATION OF ` 2,22,10,000/- VIZ., (I) Y. PRABHAKAR ` 45,75,000 (II) ANNE SWARAJYA LAKSHMI ` 49,15,000 (III) K. RAJASEKHAR ` 73,70,000 (IV) P. RAMASITA ` 53,50,000 ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 13 6. IT IS NOTICED THAT THE VALUE OF THE ABOVE SITE AT PATAMATA LANKA IS SHOWN AT ` 99,33,000/- VIZ., Y. PRABHAKAR RAO ` 18,75,000 K. RAJASEKHAR ` 32,14,000 P. RAMASITA ` 27,44,000 A. SWARAJYA LAXMI ` 21,00,000 IN YOUR BOOKS OF ACCOUNT FOR THE ASST. YEAR 2007-08. PLEASE EXPLAIN THE DISCREPANCY? ANS. DISCREPANCIES NOTICED WERE NOT COGNIZANT TO ME SO FAR AS CONCERNED EVERY THING IS RECORDED IN THE BOOKS. 7. DO YOU HAVE THE BOOKS WITH YOU RIGHT NOW? ANS. YES. THE PRESENT PREMISES CONTAINS ALL THE RE LEVANT BOOKS. 8. WITH RESPECT TO THE FLAT PURCHASED AT PATAMATA L ANKA IT IS NOTICED FROM THE SPIRAL BOUNDED BOOKS OF KACHCHA BOOK, AVAI LABLE IN YOUR OFFICE PREMISES SHOWS THAT THE SITE WAS PURCHASED FOR ` 2,22,10,000/- AS DEPOSED BY YOU TO AN ANSWER IN RESPONSE TO QN.NO.5 ABOVE. DO YOU CONFIRM THE SAME? ANS. SIR, AS PER THE RECORDED EVIDENCES THEY WERE T RUE BUT I CANNOT EXPLAIN ALL THE DETAILS DUE TO LACK OF KNOWLEDGE IN ACCOUNTS. THE PAYMENTS Y. PRABHAKAR RAO ` 45,75,000 A. SWARAJYALAXMI ` 49,15,000 A. RAJASEKHAR ` 73,70,000 P. RAMASITA ` 53,50,000 ARE EVIDENT WITHIN THE BOOKS THAT HAVE BEEN NOTICED IN THE SURVEY PREMISES I.E. MY PRESENT OFFICE ADDRESS. 9. FURTHER, VALUE FOR PURCHASE OF PATAMATA LANKA SI TE AT RS. 2,22,10,000/- IS ALSO EVIDENT FROM PAGE 129 OF ANNE XURE SSKP-33 IMPOUNDED DURING THE COURSE OF SURVEY WHICH WAS A S YSTEM GENERATED ONE MENTIONING UNDER THE CAPTION/ 'EXPEND ITURE DETAILS' WITH THE FOLLOWING DETAILS: ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 14 EXPENDITURE DETAILS: MATERIALS PURCHASE PAYMENTS ` 1,41,75,986 LABOUR PAYMENTS ` 83,79,925 TOTAL ` 2,25,55,910 SITE PURCHASE ` 2,22,10,000 TOTAL EXPENDITURE ` 4,47,65,910 THE SAID DOCUMENT WAS ACKNOWLEDGED BY THE MANAGING PARTNER OF THE FIRM. HENCE, ACCORDING TO THE LD. D.R., THE EXC ESS AMOUNT PAID TOWARDS PURCHASE OF THE SAID SITE, SHOULD BE TREATE D AS UNEXPLAINED INVESTMENT MADE BY THE FIRM AND IT SHOULD BE BROUGH T TO TAX. 10. SUBSEQUENTLY, SUMMONS U/S 131 OF THE ACT WAS IS SUED TO THE ASSESSEE AND THE STATEMENT WAS RECORDED ON 25.3.201 1. DURING THE COURSE OF THE STATEMENT RECORDED ON 25.3.2011, THE ASSESSEE RETRACTED FROM THE STATEMENT AND STATED THAT THE ASSESSEE HAS NOT PAID THE CASH OF ` 1,22,77,100/- TO THE VENDORS OF THE SITE AND THE A CTUAL PAYMENT WAS ONLY ` 99,33,000/- AND NO EXTRA AMOUNT WAS PAID. NO OTHE R EVIDENCE WAS FURNISHED BY THE ASSESSEE TO SUPPORT H IS STATEMENT. THEREFORE, THE A.O. PLACED RELIANCE ON SECTION 292C OF THE ACT, WHICH PLACES PRESUMPTION AND HELD THAT THE ASSESSEE HAS N OT DISCHARGED THE PRESUMPTION LAID IN THE SECTION 292C OF THE ACT AND ACCORDINGLY MADE THE ADDITION OF ` 1,13,94,200/- AFTER ALLOWING THE CREDIT FOR SALE D EED VALUE AND THE REGISTRATION EXPENSES FROM THE TOTAL AMOUNT OF ` ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 15 2,22,10,000/-. THUS, THE AMOUNT OF ` 1,13,94,200/- WAS BROUGHT TO TAX U/S 69 OF THE ACT. 11. DURING THE APPEAL PROCEEDINGS BEFORE THE CIT(A ), THE ASSESSEE FURNISHED AN AFFIDAVIT FROM B. BABUJEE, STATED TO B E AN EX-EMPLOYEE OF THE ASSESSEE FIRM DURING THE PERIOD FROM JUNE, 2008 TO MARCH, 2011. SURPRISINGLY IDENTICAL AFFIDAVIT WAS ALSO FILED FRO M THE SAME PERSON MR. BABUJEE IN THE CASE OF SRI SAI KRISHNA PROMOTERS AL SO. THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE TO ESTABLISH THAT MR. B. BABUJEE WAS THE EX- EMPLOYEE OF THE ASSESSEE COMPANY WITH THE APPOINTME NT LETTER AND RELIEVING LETTER, IDENTITY CARD, PF, ESIC PAID FOR HIM, ETC. MR. B. BABUJEE WAS NOT PRODUCED DURING THE ASSESSMENT PROCEEDINGS. THIS AFFIDAVIT WAS FILED BEFORE THE CIT(A) AND THE LD. CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCE WITHOUT RECORDING THE REASONS A ND VERIFYING THE CREDENTIALS OF MR. BABUJEE AND MR. SRINIVAS. MR. B . BABUJEE HAS STATED IN THE AFFIDAVIT THAT THE NOTING WAS IN THE HAND WR ITING OF MR. B. SRINIVAS WHO ALSO HAD LEFT THE ORGANIZATION. THERE WAS NO E VIDENCE FILED ALONG WITH THE AFFIDAVIT WITH REGARD TO THE PERIOD OF EMP LOYMENT OF B. SRINIVAS, THE EMPLOYMENT LETTER, RELIEVING LETTER OF B. SRINI VAS WAS ALSO NOT PRODUCED BEFORE THE A.O OR BEFORE THE CIT(A). FURTH ER, MR. B. BABUJEE AND MR. B. SRINIVAS WERE NEITHER EXAMINED BY THE A. O. NOR BY LD. CIT(A). THE ASSESSEE ALSO HAS NOT PLACED ANY EVIDE NCE TO PROVE THAT ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 16 MR. B. SRINIVAS AND B. BABUJEE WERE IN FACT THE EX- EMPLOYEES OF THE ASSESSEE FIRM BEFORE US. THE LD. A.R. HEAVILY PLAC ED RELIANCE ON THE AFFIDAVIT FILED BY THE EX-EMPLOYEE MR. B. BABUJEE D ID NOT EXPLAIN HOW MR. BABUJEE CAN CONFIRM THE HAND WRITING OF MR. B. SRINIVAS. THIS ISSUE NEEDS FURTHER INVESTIGATION TO FIND OUT THE FACTS. 12. IN THIS CASE SURVEY U/S 133A WAS CONDUCTED AND THE INCRIMINATING MATERIAL WAS FOUND EVIDENCING THE UNACCOUNTED PAYME NTS. THE LD.CIT(A) HAS COMPLETELY SHIFTED THE BURDEN ON THE REVENUE IGNORING THE PROVISIONS OF SECTION 292C OF THE ACT. AS PER SECT ION 292C OF THE ACT, MATERIAL FOUND DURING THE COURSE OF SURVEY OR SEARC H, WHICH IS IN THE POSSESSION OF THE PERSONS SEARCHED BE PRESUMED THAT THE CONTENTS ARE TRUE AND BOOKS OF ACCOUNTS, DOCUMENTS, MONEY, BULLI ON, JEWELLERY, BELONGING TO SUCH PERSON. IN THE ASSESSEES CASE, DURING THE COURSE OF SURVEY, A SPIRAL NOTE BOOK WAS FOUND WHICH GAVE ITE M WISE DETAILS PAYMENTS FOR SITE PURCHASE AS UNDER: Y. PRABHAKAR RAO ` 45,75,000 A. SWARAJYALAXMI ` 49,15,000 A. RAJASEKHAR ` 73,70,000 P. RAMASITA ` 53,50,000 TOTAL ` 2,22,10,000 13. IT IS THE ASSESSEE WHO HAS TO PROVE THE CONTE NTS OF THE SEIZED DOCUMENTS ARE FALSE OR INCORRECT. IN THIS CASE THE ASSESSEE HAS NOT DISCHARGED ITS BURDEN. THE LD. A.R FURTHER ARGUED THAT THE AO HAS NOT ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 17 GIVEN THE SURVEY STATEMENT WHICH WAS SOUGHT BY THEM ON 14/02/2011 AND 21/02/2011 I.E. IMMEDIATELY AFTER THE SURVEY. IT IS SETTLED ISSUE THAT DURING THE PENDENCY INVESTIGATION THE STATEMENTS WO ULD NOT BE SUPPLIED TO THE ASSESSEE AND THE COPIES WILL BE MADE AVAILAB LE AS AND WHEN THE SAME ARE USED AGAINST THE ASSESSEE. THIS VIEW IS SU PPORTED BY THE HONBLE MADRAS HIGH COURT JUDGEMENT IN THE CASE OF ADVANTAGE STRATEGIC CONSULTING (P.) LTD [2017] 82 TAXMANN.COM 97 (MADRA S). IN THIS CASE NEITHER THE ASSESSEE NOR THE DR COULD INFORM US WHEN THE CO PIES OF STATEMENTS WERE SUPPLIED TO THE ASSESSEE. IT APPEARS FROM THE PAPER BOOK THAT THE ASSESSEE DID NOT MAKE ANY REQUEST FOR SUPPLY OF SEI ZED DOCUMENT AND THE STATEMENT DURING THE ASSESSMENT PROCEEDING. TH EREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE CASE SHOULD BE REMI TTED BACK TO THE FILE OF THE A.O. TO GIVE SUFFICIENT OPPORTUNITY TO THE A SSESSEE TO PROVE HIS CASE OF EXCESS PAYMENT AND THE CONTENTS RECORDED IN THE SEIZED MATERIAL WAS INCORRECT. THE ASSESSEE SHOULD PRODUCE MR. B. BABUJEE AND B. SRINIVAS WITH RELEVANT EVIDENCES TO PROVE THE HAND WRITING AND EXPLAIN THE CONTENTS OF NOTING IN FULL. THE A.O. IS DIRECTE D TO SUPPLY THE COPIES OF STATEMENTS RECORDED AND THE IMPOUNDED MATERIAL AND ALLOW THE ASSESSEE EXPLAIN THE CASE, AND ALSO EXAMINE BOTH MR . B. BABUJEE AND B. SRINIVAS IN DETAIL AND DECIDE THE ISSUE AFRESH ON M ERITS. ACCORDINGLY THE ASSESSMENT IS SET ASIDE WITH DIRECTION TO RE DO THE SAME DE NOVO. ITA NO.219/VIZAG/2013 SRI SAI KRISHNA PROMOTERS , VIJAYAWADA 18 14. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 15. IN VIEW OF THE PRECEDING PARAGRAPHS, THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALSO ALLOWED FOR STATISTICAL PURPOS ES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 6 TH OCT17. SD/- SD/- ( . ) ( . . ' ) (V. DURGA RAO) (D.S. SUNDER SINGH) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 06.10.2017 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ITO, WARD-2(2), VIJAYAWADA 2. / THE RESPONDENT M/S. SRI SAI KRISHNA PROMOTERS, D.NO.40-25-17/11, FF- 3C, MARUTHI TOWERS, TIKKLE ROAD, VIJAYAWADA 3. + / THE CIT, VIJAYAWADA 4. + ( ) / THE CIT (A), VIJAYAWADA 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM