DCIT, Hyderabad V. Smt. R.Nalini Devi, Hyderabad

ITA 236/HYD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66250 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-08-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 16-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K GYANA PRAKASH
• Assessee Lawyers: M CHANDRAMOULESWARA RAO
• Keywords: Unexplained investment; Search and seizure; Loose papers; Document seized; Fair market value; Corroborative evidences
• Section: 142(1); 153A; 69; 132

Judgement Text

0IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NOS. 930 AND 931 OF 2009 ASSESSMENT YEARS : 2003-04 & 2004-05 DY. CIT, CENTRAL CIR-6, HYDERABAD. .... APPELLANT VS. SHRI B. VIJAYA KUMAR (INDL.), HYDERABAD. ... RESPONDENT PAN:AFCPB1023 P APPELLANT BY : SHRI K. GYANA PRAKASH RESPONDENT BY : SHRI M.CHANDRAMOULESWARA RAO ITA NOS. 235 & 236/HYD/10 ASSTT. YEARS: 2003-04 & 2004 -05 DY. CIT, CENTRAL CIR-6, HYDERABAD. .... APPELLANT -VS- SMT. NALINI DEVI, L/R SRI R. SUDARSHAN REDDY, HYDERABAD. PAN:AGKPR 2714 E .. ... RESPONDENT APPELLANT BY: SHRI K. GYNA PRAKASH RESPONDENT : SHRI MOHD. AFZAL DATE OF HEARING : 27-06-2012 DATE OF PRONOUNCEMENT : 18-09-2012 ORDER 2 ITA NOS. 930 AND 931 OF 2009 B. VIJAY KUMAR (INDL.) HYD.. PER SAKTIJIT DEY, J.M.: THESE FOUR APPEALS FILED BY THE REVENUE, 1ST SET OF TWO APPEALS IN THE CASE OF SRI B. VIJAY KUMAR (INDL ) AND OTHER SET OF TWO APPEALS IN THE CASE OF SMT. R. NAL INI DEVI, L/R SHRI R. SUDARSHAN REDDY ARE DIRECTED AGAINST TWO COMMON ORDERS OF CIT (A)-III, HYDERABAD DATED 3 -6- 2009 AND 11-12-2009 PERTAINING TO ASSESSMENT YEARS 2003- 04 AND 2004-05. SINCE COMMON ISSUES ARE INVOLVED I N ALL THESE APPEALS, THESE ARE CLUBBED TOGETHER AND DISPO SED OF BY THIS COMBINED ORDER FOR THE SAKE OF CONVENIENCE. FI RST LET US DEAL WITH ITA NOS. 930 AND 931 OF 2009. ITA NOS. 930 AND 931/HYD/2009 ( B. VIJAYKUMAR (IND L.) :- 2 . THE REVENUE HAS RAISED FOLLOWING COMMON EFFECTIVE GROUNDS WHICH ARE EXTRACTED HEREUNDER:- 1. THE CIT (A) ERRED IN HOLDING THAT PHOTO COPY OF THE SALE AGREEMENT FOUND IN THE COURSE OF SEARCH HAS NO EVIDENTIAL VALUE. 2. THE CIT (A) ERRED IN DIRECTING THE AO TO CONSIDE R THE COST OF PURCHASE OF THE PROPERTY AS PER SALE DEED AND IGNORE THE PURCHASE AGREEMENT FOUND DURING THE COURSE OF SEARCH. 3. THE CIT (A) FAILED TO APPRECIATE THE DIRECT EVIDENCE FOUND DURING THE COURSE OF SEARCH IN THE 3 ITA NOS. 930 AND 931 OF 2009 B. VIJAY KUMAR (INDL.) HYD.. VENDORS RESIDENCE IN THE SHAPE OF RECEIPT OF ADVANCES AS PER SALE AGREEMENTS AND INCURRING OF HUGE EXPENDITURE BY THE VENDOR IMMEDIATELY AFTER SALE AGREEMENT. 4. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL. 4. THE SUPREM E COURT DECISION RELIED BY THE CIT (A) IN THE CASE OF P.R. METRANI VS. CIT (287 ITR 209) IS NOT APPLICABLE TO THE FACTS OF THE CASE SINCE THERE IS A DIRECT AND CIRCUMSTANTIAL EVIDENCE IN THIS CASE TO SHOW THAT THE ASSESSEE PURCHASED THE PROPERTY FOR THE CONSIDERATION AS PER THE SALE AGREEMENT ENTERED WHICH IS FOUND DURING THE COURSE OF SEARCH IN THE RESIDENCE OF VENDOR. 5. ANY OTHER GROUND WILL BE URGED AT THE TIME OF APPEAL. 3. FOR THE SAKE OF BREVITY, WE DEAL WITH FACTS AS M ENTIONED FOR ASSESSMENT YEAR 2003-04. FACTS OF THE CASE ARE THE ASSESSEE AN INDIVIDUAL DERIVED INCOME FROM BUSINES S. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FIL ED HIS RETURN OF INCOME ON 30-9-2003 DECLARING A TOTAL IN COME OF RS.1,28,646/-. SUBSEQUENTLY, A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED IN THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 4-8-2005. IN COURSE OF SEARCH AND SEIZURE OPERATION, THE DEPARTMENT FOUND AND SEIZED A PHOTOSTAT COPY OF AGREEMENT OF SALE DATED 19-5- 2002. THE SAID AGREEMENT OF SALE WAS BETWEEN THE ASSESSEE IN ONE HAND AND ON THE OTHER HAND SMT. NALINI DEVI, HER TW O SONS DR. BASANT REDDY AND MR. R. PREM REDDY FOR PURCHASE OF LAND 4 ITA NOS. 930 AND 931 OF 2009 B. VIJAY KUMAR (INDL.) HYD.. ADMEASURING 2400 SQ. YARDS FOR A CONSIDERATION OF RS.1,68,00,000/- . AS PER THE PHOTOSTAT COPY OF TH E AGREEMENT A SUM OF RS.50 LAKHS WAS SUPPOSED TO BE P AID TO THE ASSESSEE TOWARDS ADVANCE TO THE VENDOR SMT. NA LINI DEVI & OTHERS. SIMULTANEOUSLY, SEARCH ACTION WAS A LSO UNDERTAKEN IN THE RESIDENTIAL PREMISES OF VENDOR SM T. NALINI DEVI AND SIMILAR PHOTOCOPY OF THE AGREEMENT WAS ALS O FOUND AND SEIZED FROM HER RESIDENCE ALONG WITH SOME OTHER LOOSE- SHEETS. THE AO INITIATED ASSESSMENT PROCEEDINGS U/ S 153A OF THE ACT BY ISSUING NOTICE U/S 142(1) AND 143(2). I N COURSE OF ASSESSMENT PROCEEDINGS, WHEN THE AO QUERIED ABOU T THE INVESTMENT MADE TOWARDS PURCHASE OF THE PROPERTY FR OM SMT. R. NALINI DEVI, THE ASSESSEE SUBMITTED COPIES OF FOUR REGISTERED SALE DEEDS TOWARDS PURCHASE OF THE SAID PROPERTY FOR AGGREGATE SALE CONSIDERATION OF RS.22,98,000/-. THE AO RELYING UPON THE PHOTO COPY OF THE SALE AGREEMENT S EIZED FROM THE RESIDENCE OF THE ASSESSEE AS WELL AS THE V ENDOR SMT. R. NALINI DEVI CAME TO A CONCLUSION THAT THE A SSESSEE HAD PURCHASED THE PROPERTY FOR A TOTAL CONSIDERATI ON OF RS.1,68,00,000/- AS MENTIONED IN THE SALE AGREEMENT PHOTOCOPY AND NOT AT RS.22,98,000/- AS MENTIONED IN THE REGISTERED SALE DEEDS. THE AO FURTHER RELYING UPON SOME MATERIALS SEIZED FROM THE RESIDENCE OF SMT. NALINI DEVI CONCLUDED THAT SMT. NALINI DEVI HAD INCURRED TOTAL EXPENDITURE OF RS.109.48 LAKHS WHICH COULD ONLY HAV E BEEN MADE FROM THE SALE CONSIDERATION OF RS.1,68,00,000/ - RECEIVED FROM THE ASSESSEE. ON THE AFORESAID INFERE NCE, THE AO TREATED THE DIFFERENTIAL AMOUNT OF RS.1,48,52,00 0/- AS UNEXPLAINED INVESTMENT IN PURCHASE OF THE LAND BY THE 5 ITA NOS. 930 AND 931 OF 2009 B. VIJAY KUMAR (INDL.) HYD.. ASSESSEE AND ADDED TO THE TOTAL INCOME U/S 69 OF TH E ACT. THE ASSESSEE BEING AGGRIEVED OF THE ASSESSMENT MADE , FILED AN APPEAL BEFORE CIT (A). 4. IN COURSE OF HEARING BEFORE THE FIRST APPELLATE AUTHORITY, IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT THE SEIZED SALE AGREEMENT ON THE BASIS OF WHICH THE ADDITION W AS MADE IS ONLY A PHOTO COPY AND ALSO NOT SIGNED BY THE ASS ESSEE. THE ORIGINAL OF THE SAID AGREEMENT WAS NEITHER FOUN D DURING SEARCH, FROM THE PREMISES OF THE ASSESSEE OR FROM THE VENDOR SMT. NALINI DEVI AND IT COULD BE FOUND DURIN G POST SEARCH INVESTIGATION. THE SALE AGREEMENT WAS ALSO NOT SIGNED BY THE ASSESSEE AND THEREFORE AN UNSIGNED DO CUMENT IS NOT ENFORCEABLE IN LAW. IT WAS FURTHER CONTEND ED THAT THE SALE AGREEMENT ALLEGEDLY FOUND DURING THE SEARCH OP ERATION MATERIALLY DIFFER FROM THE REGISTERED SALE AGREEMEN T IN TERMS OF THE OWNERSHIP OF THE LAND, EXTENT OF LAND AND SA LE CONSIDERATION. WHILE IN THE PHOTOCOPY OF THE SALE AGREEMENT, THERE ARE THREE OWNERS OF THE LAND, THE ACTUAL OWNE R WAS ONLY SMT. R. NALINI DEVI AS STATED IN THE REGISTERE D SALE DEED. SIMILARLY, WHILE IN THE SALE AGREEMENT THE AR EA OF PROPERTY WAS MENTIONED AS 2400 SQ. YARDS, THE ACTUA L AREA SOLD AS MENTIONED IN THE REGISTERED SALE DEED IS 24 50 SQ. YARDS. IT WAS CONTENDED BY THE ASSESSEE THAT THOUG H THE AUTHORISED OFFICERS WHILE RECORDING STATEMENT FROM THE ASSESSEE AT THE TIME OF SEARCH REGARDING IMMOVABLE PROPERTIES, NO QUESTION WAS EVER ASKED FROM THE ASS ESSEE IN RESPECT OF THE SAID SEIZED PHOTOSTAT COPY OF THE SA LE AGREEMENT. IT WAS CONTENDED THAT THE ASSESSEE EVEN THOUGH 6 ITA NOS. 930 AND 931 OF 2009 B. VIJAY KUMAR (INDL.) HYD.. DENIED OF HAVING ANY KNOWLEDGE OF ABOUT THE PHOTOCO PY OF HIS SALE AGREEMENT FOUND DURING THE SEARCH BUT THE SAME WAS NOT BROUGHT ON RECORD. THE ASSESSEE THEREFORE FILE D AN AFFIDAVIT ON 12-9-2005 BEFORE THE DDIT, INVESTIGATI ON, HYDERABAD ALLEGING THEREIN THAT THE PHOTOCOPY OF TH E SALE AGREEMENT WAS PLANTED IN THE RESIDENCE OF THE ASSES SEE BY A PARTICULAR OFFICER OF THE DEPARTMENT IN COURSE OF S EARCH AND SEIZURE OPERATION. 5. THE ASSESSEE ALSO SUBMITTED THAT THE VENDOR SM T. NALINI DEVI IN THE STATEMENT RECORDED FROM HER U/S 132(4) OF THE ACT HAD DENIED ABOUT THE CORRECTNESS OF THE SAL E AGREEMENT COPY FOUND AT THE TIME OF SEARCH AND CATE GORICALLY STATED THAT THE PROPERTY WAS SOLD FOR A CONSIDERATI ON OF RS.23.50 LAKHS AND AGAINST WHICH SHE RECEIVED AN A DVANCE OF RS.50,000/- ONLY. THE ASSESSEE FURTHER CONTENDE D THAT THE PAPER SLIPS CONTAINING SOME NOTINGS DURING THE SEARCH OF THE PREMISES OF SMT. R. NALINI DEVI AND WHICH WAS R ELIED UPON BY THE AO FOR MAKING THE ADDITION WAS NEVER SH OWN TO THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. IT WAS CONTENDED THAT THE SAID DOCUMENT SEIZED FROM RESIDE NCE OF SMT. R. NALINI DEVI DID NOT MENTION THE NAME OF THE ASSESSEE, THEREFORE THE ASSESSEE COULD NOT BE LINKE D WITH THOSE DOCUMENTS. 6. THE CIT (A) AFTER CONSIDERING THE CONTENTIONS R AISED BY THE ASSESSEE AND EXAMINING THE DOCUMENTS AVAILABLE ON RECORD, FOUND THAT THE ADDITION ON ACCOUNT OF UNEXP LAINED INVESTMENT WAS MADE BY THE AO SOLELY ON THE BASIS O F PHOTOCOPY OF SALE AGREEMENT DATED 19-5-2002 ALLEGED LY 7 ITA NOS. 930 AND 931 OF 2009 B. VIJAY KUMAR (INDL.) HYD.. SEIZED FROM THE RESIDENCE OF THE ASSESSEE AND SMT. R. NALINI DEVI. THE SAID PHOTOCOPY OF SALE AGREEMENT DID NOT BEAR THE SIGNATURE OF THE ASSESSEE. THE ASSESSEE AS WELL AS VENDOR SMT. R. NALINI DEVI HAD CATEGORICALLY DENIED THE CO RRECTNESS AND AUTHENTICITY OF THE SALE AGREEMENT. IT WAS ALS O FOUND BY THE CIT (A) THAT NO OTHER EVIDENCE OR MATERIAL WAS FOUND DURING THE SEARCH OR IN POST-SEARCH INVESTIGATION T O SUBSTANTIATE THE FACT THAT THE ASSESSEE HAD ACTUALL Y PAID SALE CONSIDERATION OF RS.1.68 CRORES AS MENTIONED IN THE SALE AGREEMENT OF PHOTOCOPY TO SMT. R. NALINI DEVI. THE CIT (A) ALSO TOOK INTO NOTE THE ALLEGATION MADE BY THE ASSE SSEE WITH REGARD TO PLANTING OF THE SALE AGREEMENT IN THE RES IDENCE OF THE ASSESSEE BY A PARTICULAR OFFICER OF THE DEPARTM ENT WHICH EVEN THOUGH HAS SPECIFICALLY BROUGHT TO THE NOTICE OF THE DDIT (INV.) AND THE AO, NO ENQUIRY WAS MADE BY THE M TO ASCERTAIN THE CORRECTNESS OF THE ALLEGATION MADE BY THE ASSESSEE. IT WAS ALSO FOUND BY THE CIT (A) THAT TH E ASSESSEE WAS NEVER EXAMINED ON OATH IN RESPECT OF THAT PARTI CULAR SALE AGREEMENT EITHER DURING THE SEARCH PROCEEDINGS OR I N COURSE OF ASSESSMENT PROCEEDINGS. THE CIT (A) ALSO TOOK NO TE OF THE FACT THAT NEITHER THE DDIT (INV.) OR THE AO MADE A NY ATTEMPT TO CONTROVERT THE AVERMENTS MADE IN THE AF FIDAVIT BY BRINGING MATERIAL AND EVIDENCE ON RECORD. 7. THE CIT (A) CAME TO A CONCLUSION THAT THE AO HA S FAILED TO BRING SUFFICIENT MATERIAL ON RECORD TO SATISFY H IMSELF THAT THE TRANSACTIONS RECORDED IN THE PHOTOCOPY OF THE S ALE AGREEMENT HAD BEEN ACTUALLY CARRIED OUT BETWEEN THE PARTIES OR NOT. WHEN THE ASSESSEE HAS PRODUCED COPIES OF TH E 8 ITA NOS. 930 AND 931 OF 2009 B. VIJAY KUMAR (INDL.) HYD.. REGISTERED SALE DEEDS INDICATING THE ACTUAL AMOUNT OF SALE CONSIDERATION PAID TOWARDS PURCHASE OF THE PROPERTY , THE AO SHOULD HAVE BROUGHT SUFFICIENT MATERIAL ON RECORD T O PROVE THAT THE ACTUAL CONSIDERATION PAID BY THE ASSESSEE IS NOT WHAT IS MENTIONED IN THE REGISTERED SALE DEED BUT T HE AMOUNT MENTIONED IN THE PHOTOCOPY OF THE SALE AGREEMENT FO UND AT THE TIME OF SEARCH. THE CIT (A) RELYING UPON THE JU DGMENT OF HONBLE SUPREME COURT IN THE CASE OF KP VERGHESE (1 31 ITR 597) HELD THAT THE AO IS DUTY BOUND TO PROVE THE PA YMENT OF ON MONEY. THE CIT (A) WHILE DEALING WITH THE PROVI SIONS CONTAINED U/S 132(4A) WHICH CREATES A PRESUMPTION I N RESPECT OF DOCUMENT FOUND IN THE COURSE OF SEARCH H ELD THAT THE SAID PRESUMPTION IS REBUTTABLE PRESUMPTION AND THE ASSESSEE HAS REBUTTED SUCH PRESUMPTION BY FILING AN AFFIDAVIT AND OTHER DOCUMENTS TO PROVE THAT THE PHOTOCOPY OF THE SALE AGREEMENT WAS NOT ACTED UPON EITHER BY THE ASSESSEE OR THE SELLER SMT. NALINI DEVI. THE CIT (A) TAKING NOTE O F THE CONTENTION OF THE ASSESSEE ALSO HELD THAT THE LOOSE PAPERS CONTAINING THE NOTINGS OF THE EXPENDITURE MADE BY THE FAMILY MEMBERS OF SMT. R. NALINI DEVI WHICH WAS SEI ZED FROM HER RESIDENCE AND WAS RELIED UPON BY THE AO WHILE MAKING THE ADDITION AT THE HANDS OF THE ASSESSEE WAS NEVER CONFRONTED TO THE ASSESSEE. THE CIT (A) FURTHER EX AMINING THE NOTING MADE IN THE LOOSE SHEETS SEIZED FROM TH E RESIDENCE OF SMT. R. NALINI DEVI FOUND THAT EXCEPT FOR AN ENTRY MADE ON 20-5-2002 FOR A CASH DEPOSIT OF S.1 L AKH ALL OTHER ENTRIES WERE MADE IN SEPT. 2002 AND CONTINUED TILL MAY, 2005. IT WAS ALSO NOTICED BY THE CIT (A) THAT ALL THE ENTIRETIES WERE NOT OF CASH EXPENDITURE. NOTINGS O N CERTAIN 9 ITA NOS. 930 AND 931 OF 2009 B. VIJAY KUMAR (INDL.) HYD.. PAGES WERE UNDATED AND THE SUMMARY OF THE SEIZED AN NEXURE IS NOT THE SUMMARY OF EXPENDITURE AMOUNTING TO RS.1 09.48 CRORES, BUT, IT IS SUMMARY OF BALANCE OF VARIOUS AC COUNTS OPERATED BY THE FAMILY MEMBERS OF SMT. R. NALINI DE VI. THE CIT (A) THEREFORE HELD THAT THE AO HAS LINKED THE A SSESSEE TO THE ENTRIES MADE IN THE SEIZED DOCUMENT SEIZED FROM THE HOUSE OF R. NALINI DEVI PURELY ON PRESUMPTIONS AND SURMISES WITHOUT HAVING ANY BASIS. THE CIT (A) RELYING UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. KULWANT RAI (291 ITR 36) AND CIT VS. VED PRAK ASH CHOUDHARY (305 ITR 245) HELD THAT NO ADDITION CAN B E MADE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF UNSIGN ED AGREEMENT FOUND AS A RESULT OF SEARCH. 8. THE CIT (A) RELYING UPON THE DECISION OF HONBL E DELHI HIGH COURT IN THE CASE OF CIT VS. D.K. GUPTA (308 I TR 230) HELD THAT IN ABSENCE OF CORROBORATIVE OR DIRECT EVI DENCE TO PRESUME THAT THE NOTINGS OR JOTTINGS HAD MATERIALIS ED INTO TRANSACTIONS GIVING RISE TO INCOME NOT DISCLOSED IN THE REGULAR BOOKS OF ACCOUNTS, NO ADDITION CAN BE MADE. THE CIT (A) TAKING NOTE OF THE FACT THAT THE TITLE OF THE LAND PURCHASED BY THE ASSESSEE WAS IN DISPUTE AND THE LAND WAS IN AD VERSE POSSESSION, THE CONSIDERATION PAID AS PER THE REGIS TERED SALE DEED COULD NOT BE DISBELIEVED AND DISCARDED IN THE ABSENCE OF ANY OTHER EVIDENCE BROUGHT ON RECORD TO PROVE TH E CONTRARY. THE CIT (A) ALSO FOUND THAT THE RATE ADO PTED BY THE AO OF RS.7000 PER SQ. YARD TO DETERMINE THE UNE XPLAINED INVESTMENT IS NOT ON THE BASIS OF ANY VALID EVIDENC E OR ENQUIRY CONDUCTED IN THIS REGARD. ON THE AFORESAID FINDING, 10 ITA NOS. 930 AND 931 OF 2009 B. VIJAY KUMAR (INDL.) HYD.. THE CIT (A) HELD THAT THE ADDITION MADE U/S 69 OF T HE ACT IS NOT SUSTAINABLE IN LAW. HE THEREFORE DIRECTED FOR DELETING THE SAME. 9. THE LEARNED DR JUSTIFYING THE ADDITION MADE BY THE AO SUBMITTED THAT THE PHOTOCOPY OF THE SALE AGREEMENT HAVING BEEN SEIZED FROM THE POSSESSION OF THE ASSESSEE, IT HAS TO BE PRESUMED THAT THE ASSESSEE IS A PARTY TO THE TRANSA CTION MENTIONED IN THE SALE AGREEMENT. THAT APART THE DOC UMENTS SEIZED FROM THE PREMISES OF SMT. R. NALINI DEVI AL SO ESTABLISHES A LINK THAT THE EXPENDITURE INCURRED BY SMT. NALINI DEVI WAS OUT OF THE CONSIDERATION PAID BY TH E ASSESSEE TOWARDS PURCHASE OF THE PROPERTY. 10. THE LEARNED AR FOR THE ASSESSEE SUBMITTED BEFOR E US THAT THE ASSESSMENT HAS BEEN MADE COMPLETELY ON PRESUMPTION AND SURMISES. IT WAS SUBMITTED BY THE L EARNED AR THAT THE PHOTOCOPY OF THE SALE AGREEMENT ON THE BASIS OF WHICH THE ADDITION WAS MADE BY THE AO DID NOT BEAR THE SIGNATURE OF THE ASSESSEE, THE ORIGINAL OF THE DOCU MENT WAS ALSO NEITHER FOUND DURING THE SEARCH OPERATION NOR DURING THE POST SEARCH INVESTIGATION. THAT APART THE ASSESSEE HAD SPECIFICALLY ALLEGED BY FILING AN AFFIDAVIT THAT PH OTOCOPY OF THE SALE AGREEMENT WAS PLANTED IN THE HOUSE OF THE ASSE SSEE IN COURSE OF SEARCH AND SEIZURE OPERATION. THESE FACTS WERE NEITHER ENQUIRED INTO NOR TAKEN NOTE OF EITHER BY T HE DDIT (INV.) OR THE AO. ON THE OTHER HAND, THE AO IGNOR ED THE 11 ITA NOS. 930 AND 931 OF 2009 B. VIJAY KUMAR (INDL.) HYD.. REGISTERED SALE DEEDS WHICH IS AN AUTHENTIC DOCUMEN T AND VALID PIECE OF EVIDENCE FOR ASCERTAINING THE CONSID ERATION PAID FOR PURCHASE OF THE LAND. THE LEARNED AR FURT HER CONTENDED THAT IN COURSE OF RECORDING OF STATEMENT U/S 132(4) OF THE ACT, THE ASSESSEE HAD CATEGORICALLY S TATED ABOUT THE IMMOVABLE PROPERTY STANDING IN HIS AND HI S FAMILY MEMBERS NAMES. THE ASSESSEE HAS ALSO MENTIONED AB OUT THE LAND PURCHASED FROM SMT. R. NALINI DEVI FOR CON SIDERATION OF RS.23.50 LAKHS. DURING RECORDING OF STATEMENTS, THE REVENUE AUTHORITIES NEVER ASKED THE ASSESSEE ABOUT THE PHOTOCOPY OF THE SALE AGREEMENT ALLEGEDLY SEIZED FR OM THE RESIDENCE OF THE ASSESSEE NOR PUT ANY QUESTION REGA RDING THE CONSIDERATION PAID AS MENTIONED IN THE SAID SALE AG REEMENT. EVEN IN THE STATEMENT RECORDED FROM SMT. NALINI DEV I, SHE HAS CATEGORICALLY STATED THAT SHE HAD RECEIVED RS.2 3.50 LAKHS ONLY AS SALE CONSIDERATION AS MENTIONED IN THE REGI STERED SALE DEED. THE VENDOR SMT. NALINI DEVI HAD ALSO CL AIMED SHE RECEIVED ADVANCE OF RS.50,000/- ONLY. SMT.R. NALINI DEVI FURTHER STATED THAT THE PROPERTY OF THE AGREEM ENT SEIZED AT THE TIME OF SEARCH WAS NEVER ACTED UPON BECAUSE OF THE LEGAL DISPUTE GOING ON CONCERNING THE TITLE OF THE PROPERTY. THE LEARNED AR SUBMITTED THAT THE AO HAVING FAILED TO ESTABLISH ANY NEXUS BETWEEN THE LOOSE PAPERS SEIZED FROM THE RESIDENCE OF SMT.NALINI DEVI WAS NOT JUSTIFIED IN MAKING THE ADDITION ON THE BASIS OF ENTRIES MADE IN THE SA ID PAPERS. THE LD. AR RELYING UPON A DECISION OF THE ITAT, JAB ALPUR BENCH IN THE CASE OF ACIT VS.SATYA PAL WASAN (295 I TR 352 (AT)(JAB) SUBMITTED THAT PRESUMPTION RAISED ON THE BASIS OF A DUMB DOCUMENT ARE UNSUSTAINABLE AND CANNOT GIVE R ISE TO 12 ITA NOS. 930 AND 931 OF 2009 B. VIJAY KUMAR (INDL.) HYD.. AN ADDITION. IN THIS REGARD, THE LEARNED AR ALSO R ELIED UPON TWO DECISION OF DELHI HIGH COURT IN THE CASE OF CIT VS.KULWANT RAI 281 ITR 36 AND CIT VS. D.K. GUPTA ( 308 ITR 230) AND A DECISION OF HONBLE SUPREME COURT IN THE CASE OF P.R. METRANI VS. CIT(287 ITR 209). THE LEARNED AR RELYING UPON THE AFORESAID DECISION SUBMITTED THAT THE AO H AVING FAILED TO BRING ANY MATERIAL OR EVIDENCE TO CORROBO RATE THE ALLEGATION REGARDING RECEIPT OF ON MONEY, THE PRESU MPTION ARRIVED AT ON THE BASIS OF THE PHOTOCOPY OF DOCUMEN T NOT SIGNED BY THE ASSESSEE CANNOT BE SUSTAINED. THE LE ARNED AR RELYING UPON A DECISION OF HONBLE SUPREME COURT IN THE CASE OF K.P. VERGHESE VS. ITO (131 ITR 597) SUBMITTED T HAT THE REVENUE IS DUTY BOUND TO PROVE THE PAYMENT OF ON MO NEY FOR MAKING ADDITION U/S 69 OF THE ACT. THE LD. AR FURT HER RELIED UPON A DECISION OF HONBLE SUPREME COURT IN THE CAS E OF REPORTED IN 89 ITR 65 TO SUBMIT THAT PHOTOCOPIES HA VE NO EVIDENTIARY VALUE. 11. WE HAVE HEARD RIVAL SUBMISSIONS, PERUSED THE MA TERIAL SUBMITTED BEFORE US AND ALSO PERUSED THE ORDERS OF THE REVENUE AUTHORITIES. ON A READING OF THE ASSESSMEN T ORDER, IT IS ABSOLUTELY CLEAR THAT THE ADDITION HAS BEEN M ADE ENTIRELY ON THE BASIS OF THE PHOTOCOPY OF THE SALE AGREEMENT SEIZED FROM THE RESIDENCE OF THE ASSESSEE IN COURSE OF SEA RCH AND SEIZURE OPERATION. UNDISPUTEDLY, THE SALE AGREEMENT IS ONLY PHOTOCOPY AND HAS NOT BEEN SIGNED BY THE ASSESSEE. THE ASSESSEE HAS ALSO RAISED SERIOUS ALLEGATION REGARDI NG THE SEIZURE OF THE IMPUGNED DOCUMENT AND FILED AFFIDAV IT BEFORE 13 ITA NOS. 930 AND 931 OF 2009 B. VIJAY KUMAR (INDL.) HYD.. DDIT (INV.) ASSERTING THAT THE SAID DOCUMENT WAS PL ANTED BY AN OFFICER OF THE DEPARTMENT ALSO NAMED BY THE ASSE SSEE IN THE AFFIDAVIT. HOWEVER, SUCH ALLEGATION OF THE ASS ESSEE HAS NOT AT ALL BEEN ENQUIRED INTO AND HAS BEEN MET WIT H COMPLETE SILENCE BY THE DEPARTMENT. FROM THE MATER IALS ON RECORD, IT IS VERY CLEAR THAT THE AO HAS FAILED TO LAY HIS HANDS ON ANY CREDIBLE EVIDENCE TO ESTABLISH THE FACT THAT THE ASSESSEE HAS PURCHASED THE PROPERTY FOR A CONSIDERA TION OF RS.1,68,00,000/- AS MENTIONED IN THE PHOTO COPY OF SALE AGREEMENT SEIZED IN COURSE OF SEARCH AND SEIZURE OP ERATION. THE ASSESSEE HAS PRODUCED BEFORE THE AO REGISTERED SALE DEEDS IN SUPPORT OF ITS CLAIM THAT THEY HAD PURCHA SED THE PROPERTY FOR A CONSIDERATION OF RS.23.50 LAKHS. WHE N THE AO ALLEGES THAT THE ASSESSEE HAS PAID MORE THAN WHAT H AS BEEN DECLARED IN THE REGISTERED SALE DEED BECAUSE THE FA IR MARKET VALUE OF THE ASSET AS ON THE DATE OF TRANSACTION EX CEEDS FULL VALUE OF CONSIDERATION DECLARED BY THE ASSESSEE THE N IT IS FOR THE AO TO PROVE THAT THE VALUE DECLARED BY THE ASSE SSEE IS UNDERSTATED. IN THE APPEAL BEFORE US, EXCEPTING TH E PHOTO COPY OF SALE AGREEMENT, THERE IS NO OTHER EVIDENCE ON RECORD FOUND AS A RESULT OF SEARCH OR BROUGHT ON RECORD ON THE BASIS OF ENQUIRY CONDUCTED BY THE AO WHICH COULD ESTABLIS H THE FACT THAT THE ACTUAL CONSIDERATION PASSED BETWEEN THE PARTIES IS NOT AS MENTIONED IN THE REGISTERED SALE DEED BUT AS PER THE SALE AGREEMENT FOUND DURING SEARCH OPERATION. IT I S ALSO AN INTERESTING FACT TO NOTE THAT IN THE STATEMENT RECO RDED FROM THE ASSESSEE U/S 132(4) THE REVENUE AUTHORITIES HAV E NOT PUT ANY QUESTION WITH REGARD TO THE SALE AGREEMENT SEIZ ED AT THE TIME OF SEARCH AND SEIZURE OPERATIONS. SMT. R. NALI NI DEVI 14 ITA NOS. 930 AND 931 OF 2009 B. VIJAY KUMAR (INDL.) HYD.. ALSO IN HER STATEMENT FURTHER CLEARLY STATED THAT THE PROPERTY WAS SOLD AT RS.23.50 LAKHS AND NOT AT THE RATE OF RS.1.68 CRORES. THE HONBLE SUPREME COURT IN THE C ASE OF K.P. VERGHESE REPORTED IN 131 ITR 597 HAS HELD THAT ONUS IS ON THE DEPARTMENT TO PROVE THAT THE ASSESSEE HAS UNDERSTATED THE VALUE OF THE PROPERTY AND HAS PAID MORE THAN WHAT IS MENTIONED IN THE REGISTERED SALE DEED. THE HONBLE SUPREME COURT IN THE CASE OF MOOSA S. MADH A AND AZAM S. MADHA VS. CIT ( 89 ITR 65) HAS HELD THAT PHOTOCOPIES HAVE LITTLE EVIDENTIARY VALUE. THEREFO RE, PHOTOCOPIES OF ANY DOCUMENT CANNOT BY ITSELF BE CON SIDERED AS EVIDENCE FOR PURPOSE OF MAKING ADDITION IN ASSES SMENT PROCEEDINGS. THE AO IS REQUIRED TO BRING FURTHER E VIDENCE ON RECORD TO SHOW THAT THE SALE AGREEMENT WAS ACTUALLY ACTED UPON BY THE PARTIES. THIS IS BECAUSE OF THE FACT WHEN THE AO IS GOING TO MAKE AN ADDITION, THERE SHOULD BE SU FFICIENT EVIDENCE BROUGHT ON RECORD TO SUPPORT SUCH ADDITION . NO ADDITION CAN BE MADE ON CONJECTURES AND SURMISES. AS SEEN FROM THE ASSESSMENT ORDER, THE AO HAS ADOPTED VALUE OF THE PROPERTY AT THE RS.7000/- PER SQ. YARD ON THE DATE OF TRANSACTION. FOR ADOPTING SUCH A VALUATION, THE AO HAS NOT CONDUCTED ANY ENQUIRY OR BROUGHT ANY MATERIALS ON R ECORD TO SHOW THAT THE VALUE OF THE PROPERTY ON THE DATE OF TRANSACTION WAS ACTUALLY RS.7000 PER SQ. YARD. ON THE OTHER HAND, THE ASSESSEE HAS DEMONSTRATED WITH SUPPORTING EVIDENCE THAT THE VALUE OF THE LAND ON THE DATE OF TRANSACTION WAS THE RATE MENTIONED IN THE REGISTERED SALE DEED AND FOR WHICH THE PROPERTY WAS SOLD. THE ASSESSEE HAS ALSO PRODUCED SUFFICIENT EVIDENCE TO SHOW THAT THERE WAS DISPUTE GOING ON 15 ITA NOS. 930 AND 931 OF 2009 B. VIJAY KUMAR (INDL.) HYD.. REGARDING THE LEGAL RIGHT OVER THE PROPERTY WHICH A LSO HAD AN EFFECT ON THE FAIR MARKET VALUE OF THE PROPERTY. IT IS ALSO PERTINENT TO MENTION HERE THAT THE ASSESSEE HAD FIL ED HIS RETURN F INCOME FOR THE ASSESSMENT YEARS UNDER DISP UTE MUCH PRIOR TO THE DATE OF SEARCH DECLARING THE PURCHASE OF LAND IN QUESTION AT THE CONSIDERATION MENTIONED IN THE REGI STERED SALE DEEDS. SO FAR AS THE AOS OBSERVATIONS ON THE LOOSE SHEETS RECOVERED FROM THE RESIDENCE OF SMT. NALINI DEVI ARE CONCERNED, THE CIT (A) AFTER DULY EXAMINING THEM HA S GIVEN A CONCLUSIVE FINDING THAT THE ASSESSEES NAME HAS N O WHERE BEEN MENTIONED IN THOSE DOCUMENTS NOR THE AMOUNT OF RS.109.48 LAKHS REPRESENTS THE EXPENDITURE INCURRED BY SMT NALINI DEVI. HOWEVER, THE AMOUNT WAS FOUND TO BE TH E SUMMARY OF THE BALANCE OF VARIOUS ACCOUNTS OPERATED BY THE FAMILY MEMBERS OF SMT. NALINI DEVI. WE FIND THAT TH E CIT (A) IN HIS ELABORATE AND WELL REASONED ORDER HAS DEALT WITH ALL THESE ASPECTS AND CAME TO A FINDING ON FACT THAT T HE AO HAS MADE THE ADDITION PURELY ON CONJECTURES AND SURMISE S AND NOT ON THE BASIS OF ANY MATERIAL OR EVIDENCE BROUGH T ON RECORD. ON EXAMINING THE FACTS AND MATERIALS BEFOR E US, WE ARE OF THE VIEW THAT THE FINDING ARRIVED BY THE CIT (A) IS JUST AND PROPER AND IN ACCORDANCE WITH THE PRINCIPLES OF LAW LAID DOWN BY THE HONBLE SUPREME COURT AND HONBLE HIGH COURTS WHICH ARE CITED BEFORE HIM. WE THEREFORE FIND NO N ECESSITY TO INTERFERE WITH THE FINDING OF THE CIT (A) ON THI S ISSUE. HENCE THE GROUNDS RAISED BY THE REVENUE FOR THE YEA RS UNDER CONSIDERATION ARE DISMISSED. 16 ITA NOS. 930 AND 931 OF 2009 B. VIJAY KUMAR (INDL.) HYD.. ITA NOS.235 AND 236/HYD/2010- SMT. R. NALINI DEVI . 12. SINCE FACTS AND THE CIRCUMSTANCES OF BOTH THE C ASES I.E, SRI B. VIJAY KUMAR (INDL.) AND SMT. NALINI DEVI AR E INTER WOVEN AND IDENTICAL, FOLLOWING THE ELABORATE REASON S GIVEN IN THIS ORDER IN THE CASE OF B. VIJAY KUMAR (INDL.) ( SUPRA), WE DISMISS THE GROUNDS RAISED BY THE REVENUE IN THE C ASE OF SMT. P. NALINI DEVI ALSO FOR THE YEARS UNDER CONSI DERATION. 13. IN THE RESULT, ALL THE APPEALS FILED BY THE REV ENUE STAND DISMISSED. ORDER PRONOUNCED IN THE COURT ON 18- 9-2012. SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 18 TH SEPTEMBER, 2012. COPY TO:- 1) DCIT, CC-6, 7 TH FLOOR AAYAKAR BHAVAN, HYDERABAD. 2) SH. B. VIJAY KUMAR (INDL.) LAXMI ARCADE, MARGAD ARSI COLONY, RK PURAM, HYDERABAD. 3. SMT. R. NALINI DEVI, L/R SRI R. SUDARSHAN REDDY, 3-6- 361/22, HIMAYATNAGAR, HYDERABAD. 4) CIT (A)-III, HYDERABAD. 5) THE CIT CONCERNED, HYDERABAD 6)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. JMR* 17 ITA NOS. 930 AND 931 OF 2009 B. VIJAY KUMAR (INDL.) HYD..