THE DCIT, Circle-2(1), Guntur, Guntur V. M/s Bommidala Realty Limited, Guntur

ITA 241/VIZ/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6537 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 04-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Search and seizure; Document seized; Principle of natural justice; Opportunity of cross examination; Third party statement; Block assessment; Documents seized
• Section: 143(3); 50C; 133A; 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI G. MANJUNATHA, HONBLE ACCOUNTANT MEMBER ITA NO. 241 / VIZ /201 2 (ASST. YEAR : 20 07 - 08 ) DCIT , CIRCLE - 2(1), GUNTUR. V . M/S. BOMMIDALA REALTY LTD., 4 - 20 - 24, RING ROAD, GUNTUR . PAN NO. AABCB 9703 F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI I. KAMASASTRY FCA . DEPARTMENT BY : SHRI M.N. MURTHY NAIK - DR DATE OF HEARING : 04 / 0 1 /201 7 . DATE OF PRONOUNCEMENT : 07 / 03 /201 7 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , GUNTUR , DATED 15 /0 6 /201 1 FOR THE ASSESSMENT YEAR 2007 - 08 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT A SURVEY OPERATION UNDER SECTION 133A WAS CONDUCTED IN THE ASSESSEES BUSINESS PREMISES ON 21/08/2009 , C ONSEQUENT TO THE INFORMATION PASSED ON BY THE DCIT, CENTRAL CIRCLE, CHENNAI STATING THAT THE ASSESSEE SOLD AN UN - FINISHED BUILDING ALONG WITH A SITE OF 5734 SQ.FT. AT D.NO. 56 & 56A, TIRUMALA PILL A I ROAD, T. NAGAR, CHENNAI FOR A TOTAL CONSIDERATION OF 5.60 CRORES , WHEREAS SALE WAS REGISTERED FOR 2.75 CRORES . DURING THE COURSE OF SURVEY PROCEEDINGS, A SWORN STATEMENT WAS RECORDED FR OM THE DIRECTOR OF THE ASSESSEE - COMPANY SRI K. RAMESH BABU BY THE ASSESSING OFFICER WHEREIN HE STATED THAT THE SALE CONSIDERATION RECEIVED ONLY 2 ITA NO. 241 / VIZ /201 2 ( M/S. BOMMIDALA REALTY LTD., GUNTUR) OF 2.75 CRORES . WHEN THE ASSESSING OFFICER CONFRONTED WITH THE NOTINGS OF SRI V.SAMPATH , WHO PURCHASED THE PROPERTY C - 2.85 AND D - 2.75 , H E RE P LIED THAT HE WAS NOT AWARE OF THE CONTENTS AND FI G URES MENTIONED IN THE DIARY OF SRI V. SAMPATH, BUT ACTUAL SALE CONSIDERATION RECEIVED BY M/S. BOMMIDALA REALTY LTD. WAS ONLY 2.75 CRORES. A COPY OF ASSESSMENT ORDER DATED 22/12/2009 PASSED UNDER SECTION 153A R.W.S. 143(3) OF THE I.T. ACT IN THE CASE OF PURCHASER OF THE PROPERTY SRI V.SAMPATH, VELLORE WAS OBTAINED AND PLACED ON RECORD. ON PERUSAL OF THE ASSESSMENT ORDER DATED 22/12/2009 , IT IS NOTICED THAT SRI V.SAMPATH FILED A RETURN OF INCOME FOR THE ASSESSMENT YEAR 20 0 7 - 08 ADMITTING THAT THE TOTAL INCOME OF 3,90 , 83,900/ - WHICH INCLUD E S INCOME UNDER THE HEAD OTHER SOURCES OF 2.85 CRORES . IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS EXTRACTED THE DIARY NOTINGS OF SRI V. SAMPATH , WHO OFFERED AS INCOME UNDER SECTION 132(4) , AS UNDER: - AT THE TIME OF SEARCH UNDER SECTION 132 ON 06/06/2007 , A DIARY IN WHICH DATES AND AMOUNTS UNDER THE HEADING T.N. WAS SHOWN TO ME , SOME OF WHICH WERE PERCEIVED BY THE AUTHORIZED OFFICER AS BEING PAYM E NTS MADE FOR PURCHASE OF PROPERTY AT TIRUMALA PILLI ROAD, CHENNAI , WHICH WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS. ALTHOUGH, I HAD DENIED ANY SUCH PAYMENTS , I WAS ADVISED AND PERSUADED TO OFFER SOME OF THE AMOUNTS IN THE NOTINGS, .... .... .... .... .... .... .... .... .... ... . .... .... .... .... .... .... .... .... ALTHOUGH NO EXTRA MONEY WAS PAID OVER AND ABOVE THE REGISTERED PRICE AND ALTHOUGH THERE WAS NO OMISSION OF INCOME WHATSOEVER, AND HAVE OFFERED THE AMOUNTS INDICATED BY THE AUTHORIZED OFFICER AS INCOME FROM OTHER SOURCES .... .... .... .... .... .... I HAD ALSO PAID AN AMOUNT OF 96,90,000/ - AS INCOME TAX FOR ASSESSMENT YEAR 2007 - 08 ON 31/07/2007, ALTHOUGH THE BASIS OF THE COMPUTATION OF THE ALLEGED UNDISC LOSED INCOME AND THE YEAR TO WHICH IT PERTAINED WAS .... .... DURING THE COURSE OF ASSESSMENT PROCEEDINGS , ASSESSING OFFICER HAS TAKEN THE NOTINGS IN THE DIAR Y OF SRI V. SAMPATH, WHO PURCHASED THE PROPERTY C - 2.85 AND D - 2.75 . ACCORDING TO THE ASSESSING OFFICER, C - 2.85 MEANS CASH PAID, D - 2.75 MEANS DEMAND DRAFT TAKEN . THE STATEMENT OF SRI V.SAMPATH 3 ITA NO. 241 / VIZ /201 2 ( M/S. BOMMIDALA REALTY LTD., GUNTUR) WAS RECORDED D URING THE COURSE OF SEARCH PROCEEDINGS , WHEREIN HE ANSWERED TO QUESTION NO.8 IN RESPECT OF DIARY NOTINGS THAT I ACCEPT WHATEVER IS WRITTEN IN THE NOTHING AS THE TRUE AND FACTUAL EXPENSES AND OFFER THE SAME TO IT AS UNACCOUNTABLE EXPENSES MADE DURING THE RELEVANT FINANCIAL YEAR AND ALSO ANSWERED TO QUESTION NO. 9 THAT EARLIER DUE TO TENSION AND CONFUSION I HAD STATED THAT THESE NOTINGS ARE WRONGLY NOTED . HOWEVER, NOW THAT I HAVE COME OUT OF THE TENSION, I WILLINGLY ACCEPT AND RECONFIRM THE SAME . THE ASSESSING OFFICER BASED ON THE NOTI N GS BY SRI V. SAMPATH, WHO PURCHASED THE PROPERTY AND ALSO THE STATEMENTS RECORDED DURING THE COURSE OF SEARCH, HE CAME TO A CONCLUSION THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF 2.85 CRORES AS ON MONEY OVER AND ABOVE THE REGISTERED CONSIDERATION OF 2.75 CRORES, WHICH HAS TO BE TREATED AS UNDISCLOSED LONG TERM CAPITAL GAIN IN THE HANDS OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2007 - 08 . 3 . ON BEING AGGRIEVED , ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AND SUBMITTED THAT THE ASSESSING OFFICER BASED ON THE NOTINGS OF THE THIRD PARTY, DECIDED THAT THE ASSESSEE HAS RECEIVED ON MONEY WITHOUT THERE BEING ANY EVIDENCE. THE ASSESSING OFFICER BY MISCONSTRUING THE STATEMENT OF SRI V.SAMPATH, WHO PURCHASE D THE PROPERTY , NEVER ADMITTED DURING THE COURSE OF SEARCH THAT HE HAD PAID ON M O NEY TO THE ASSESSEE. HE ONLY OFFERED WHATEVER AMOUNT IS NOTED IN T HE DIARY A S AN ADDITIONAL EXPENDITURE, THEREFORE, THE AMOUNT WHICH IS OFFERED AN ADDITIONAL EXPENDITURE CANNOT BE CONSIDERED A N UNEXPLAINED INCOME IN THE HANDS OF THE ASSESSEE. THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, DELETED THE ADDITION BY OBSERVING THAT THE ADDITION CANNOT BE MADE ON THE BASIS OF THIRD P ARTY STATEMENT WITHOUT ANY CORROBORATIVE EVIDENCE. HE ALSO FURTHER OBSERVED TH A T NO EVIDENCE WAS 4 ITA NO. 241 / VIZ /201 2 ( M/S. BOMMIDALA REALTY LTD., GUNTUR) FOUND IN THE PREMISES OF THE ASSESSEE THAT THE ASSESSEE HAS RECEIVED EXCESS AMOUNT I.E. OVER AND ABOVE THE SALE PRICE MENTIONED IN THE SALE DEED. THE RELEVANT PORTION OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IS EXTRACTED AS UNDER: - 4.3. BASED ON THE ABOVE, IT CAN BE SEEN THAT NO EVIDENCE IS AVAILABLE IN THE PREMISES OF THE APPELLANT OTHER THAN THE SEIZED MATERIAL AT THE PREMISES OF THIRD PARTY AND THERE IS NO CORROBORATIVE EVIDENCE TO SUGGEST THAT THE A PPELLANT HAS ACTUALLY RECEIVED RS. 5.60 CORES AS SALE CONSIDERATION OF THE PROPERTY. AS SEEN FROM THE DIARY THAT THIS IS A HAND WRITTEN DOCUMENT AND THE HAND WRITING IS AL SO NOT OF THE ASSESSEE AND THE SAME WAS FOUND AT THE PREMISES OF THIRD PARTY. THERE IS NO PRESUMPTION IN LAW AND AN ASSESSMENT SHOULD NOT BE MADE BASED ON SUSPICION, SURMISES AND CONJECTURES . THERE IS NO CONCLUSIVE PRESUMPTION TO SAY THAT THE ACTUAL CONSIDERATION I S ONLY RS. 5.60 CRORES AND AD DITION CANNOT BE MADE BASED ON THIRD PARTY STATEMENT . IN CASE THE APPELLANT WAS IN RECEIPT OF THE ALLEGED ON MONEY EITHER IT COULD BE DEPOSITED IN THE BANK ACCOUNT OR UTILIZED IN ACQUISITION OF ASSETS , WHICH IS NOT THE CASE HER E. EXCEPT REL YING ON NOTING IN DAIRY OF A THIRD PARTY, NO COGENT MATERIAL WAS BROUGHT ON RECORD BY THE AO TO PIN THE APPELLANT IN THIS REGARD. THIS APART, THERE IS MERIT IN THE ARGUMENT OF THE APPELLANT THAT THE APPELLANT WAS NOT PROVIDED CROSS EXAMINATION OF THE THIRD PARTY, BASED ON THE NOTING MADE BY THAT THIRD PARTY IN HIS DIARY, THE IMPUGNED ADDITION IN THE HANDS OF THE APPELLANT WAS MADE, THUS, I AM INCLINED TO AGREE WITH THE ARGUMENTS OF THE AR THAT PRINCIPLES OF NATURAL JUSTICE WERE VIOLATED HERE AN D SUCH AN ADDITIONS IS NOT LEGALLY CORRECT. 4.4. THUS, CONSIDERING THE WHOLE GAMUT OF THE ISSUE FROM THE FACTS OF THE CASE AS WELL FROM THE LEGAL FRAME WORK ALSO, THERE IS NO IOTA OF MERIT IN THE ACTION OF THE AO IN MAKING THIS ADDITION AND ACCORDINGLY HE IS DIRECTED TO DELETE THE SAME. 4 . ON BEING AGGRIEVED, THE REVENUE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 5. THE DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDER PASSED BY THE ASSESSING OFFICER AND SUBMITTED THAT THE TRANSACTION WITH REGARD TO PURCHASE OF THE PROPERTY H AS BEEN NOTED IN THE DIARY AS C - 2.85 AND D - 2.75 , T HEREFORE, IT IS CLEAR CUT EVIDENT THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF 2.85 CRORES IN CASH OVER AND ABOVE THE SALE PRICE AND T HEREFORE, THE SAME HAS TO BE CONSIDERED UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE. 6 . ON THE OTHER HAND, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE NOTINGS MADE BY THE PURCHASER IN A PAPER IS NOT A BASIS TO 5 ITA NO. 241 / VIZ /201 2 ( M/S. BOMMIDALA REALTY LTD., GUNTUR) MAKE AN ADDITION IN THE H ANDS OF THE ASSESSEE , UNLESS THERE IS A CORROBORATIVE EVIDEN C E TO SHOW THAT THE ASSESSEE IS ACTUALLY RECEIVED THE AMOUNT. IT IS ALSO SUBMITTED THAT THE PURCHASER SRI V. SAMPATH HAS NOWHERE STATED THAT HE MADE EXTRA PAYMENT OVER AND ABOVE THE SALE PRICE TO THE ASSESSEE, IN FACT, AS PER THE NOTINGS IN HIS DIARY , HE OFFERED ADDITIONAL AMOUNT AS AN EXPENDITURE AND FILED A RETURN OF INCOME DISCLOSED IT AS AN INCOME FROM OTHER SOU R CES. IT WAS FURTHER SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER IN THE HANDS OF THE ASSESSEE , WITHOUT THERE BEING ANY BASIS AND WITHOUT MAKING ANY INDEPENDENT ENQUIRY , MAY BE DELETED . HE RELIED ON THE ORDER OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF P. KOTESWARA RAO V. DCIT IN ITA NOS. 251 & 252/VIZ/2012 ORDER DATED 12/08/2016 . 7 . WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW . THE ASSESSEE - M/S. BOMMIDALA REALTY LTD. HA D SOLD THE PROPERTY TO SRI V.SAMPATH THROUGH A REGISTERED SALE DEED ON 19/02/2007 FOR A SALE CONSIDERATION OF 2.75 CRORES . SUBSEQUENTLY, A SURVEY WAS CONDUCTED IN THE BUSINESS PREMISES OF SRI V. SAMPATH UNDER SECTION 132 ON 06/06/2007 , WHERE A DIARY OF S RI V. SAMPATH WAS FOUND, WHEREIN IT HAS BEEN NOTED AS UNDER: - C - 2.85 D - 2.75 DATED 15/12/ - RS. 1 (C)(ADV.) 20/12 - RS. 10 LAKHS (D) AND 20/12 - RS.2,84,00,000 (C) 16/2 - RS. 2,65,00,000(DD) RS. 5,60,00,000 16/2 - SUB - REGISTRAR RS. 2 LAKHS (DD NO.461966 ) (CASH RS. 2 LAKHS FOR STAMP DUTY AND REGISTRATION) REGISTRAR RS. 3 LAKHS SOMU - RS. 5,50,000 TOTAL RS. 3,36,70,000 6 ITA NO. 241 / VIZ /201 2 ( M/S. BOMMIDALA REALTY LTD., GUNTUR) FROM THE ABOVE NOTINGS , THE ASSESSING OFFICER CAME TO A CONCLUSION THAT C - 2.85 AND D - 2.75 REFERS TO THE PAYMENTS MADE TO THE ASSESSEE - M/S.BOMMIDALA REALTY LTD. IN CASH AND DEMAND DRAFT RESPECTIVELY . THUS, OPINED THAT THE ACTUAL CONSIDERATION RECEIVED BY THE ASSESSEE WAS 5.60 CRORES . DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER BY CONSIDERING THE EXPLANATION GIVEN BY SRI V. SAMPATH , PARTICULARLY TO QUESTION NO.8 WHEREIN SRI V. SAMPATH HAS OFFERED AN ADDITIONAL AMOUNT AS PER THE NOTINGS IN THE DIARY AS UNACCOUNTABLE EXPENSES , CAME TO A CONCLU S ION THAT AN ADDITIONAL INCOME OF 2.85 CRORES HAS RECEIVED BY THE ASSESSEE M/S. BOMMIDALA REALTY LTD. IN THIS CONTEXT . THERE IS NOTHING ON RECORD THAT SRI V. SAMPATH HAS G IVEN A STATEMENT DURING THE COURSE OF SEARCH THAT HE PAID 2.85 CRORES OVER AND ABOVE THE SALE PRICE TO THE ASSESSEE. THERE IS ALSO NO EVIDEN CE THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF 2.85 CRORES FROM SRI V.SAMPATH. DURING THE COURSE OF SURVEY, NO MATERIAL WAS FOUND TO SHOW THAT THE ASSESSEE HAS RECEIVED 2.85 CRORES FROM SRI V. SAMPATH. THE ASSESSING OFFICER HAS ALSO NOT MADE ANY INDEPENDENT ENQUIRY IN RESPECT OF ON MONEY PAYMENT. SIMPLY BASED ON THE NOTINGS OF THE DIARY AND THE STATEMENTS RECORDED DURING THE COURSE OF SEARCH IN THE CASE OF SRI V. SAMPATH, THOUGH HE REF ERRED NOTHING RELA TING TO THE ASSESSEE, CAME TO A CONCLUSION THAT THE ASSESSEE HAS RECEIVED 2.85 CRO R ES ON MONEY OVER AND ABOVE THE REGISTERED CONSIDERATION OF 2.75 CRORES. WE FIND THAT THE ASSESSING OFFICER HAD NOT BROUGHT ANY CORROBORATIVE EVIDENCE AND ALSO NOT MA DE ANY INDEPENDENT ENQUIRY AND ONLY BASED ON LOOSE SHEET NOTINGS, HE CAME TO A CONCLUSION THAT ASSESSEE HAS RECEIVED ON MONEY. IN OUR OPINION, THE CONCLUSION REACHED BY THE ASSESSING OFFICER WAS NOT SUPPORTED BY ANY EVIDEN CE AND BA S IS AND NO CIRCUMSTANTIAL EVIDEN CE , BUT IT IS ONLY A MERE SURMISES. THEREFORE, WE ARE OF 7 ITA NO. 241 / VIZ /201 2 ( M/S. BOMMIDALA REALTY LTD., GUNTUR) THE VIEW THAT THE ADDITION MADE IN THE HANDS OF THE ASSESSEE CANNOT BE SUSTAINED AND DESERVES TO BE DELETED . THE COORDINATE BENCH OF THIS TRIBUNAL HAS ALSO CONSIDERED THE EVIDENTIARY VALUE OF THE LOOSE SHEET FOUND IN THE COURSE OF SEARCH IN THE CASE P.KOTESWARA RAO (SUPRA) AND HELD THAT ADDITION CA N NOT BE MADE BASED ON THE LOOSE SHEETS FOUND IN THE PREMISES OF THE THIRD PARTY , UNLESS THERE IS A SUPPORTIVE EVIDENCE TO SHOW THAT ON MONEY IS MADE. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED HEREUNDER: - 11. THE ONLY ISSUE THAT CAME UP FOR OUR CONSIDERATION IS WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, THE SEIZED DOCUMENTS INDICATE EXCHANGE OF ON MONEY BETWEEN THE PARTIES. ADMITTEDLY, IN THE ASSESSEES CASE THERE WAS NO SEARCH. THE SEIZED DOCUMENT FOUND DURING THE COURSE OF SEARCH IN THE PREMISES OF M/S. M.V.V. BUILDERS, IS A LOOSE SHEET WHEREIN CERTAIN FINANCIAL TRANSACTIO NS WERE RECORDED IN THE NAME OF THE ASSESSEE. THOUGH, SRI M.V.V. SATYANARAYANA STATED THAT HE HAD PAID A SUM OF RS.50 LAKHS AND RS.25 LAKHS IN THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 2007 - 08 & 2008 - 09, TO SRI P. KOTESWARA RAO TOWARDS LAND DISPUTE S ETTLEMENT, NOWHERE IT IS STATED THAT HE HAD PAID ON MONEY TO THE ASSESSEE TOWARDS PURCHASE OF SITE. THE ASSESSEE RIGHT FROM THE BEGINNING STATED THAT HE HAD NOT RECEIVED ANY ON MONEY FROM M/S. M.V.V. BUILDERS TOWARDS SALE OF SITE. BESIDES, LOOSE SHEETS F OUND IN THE PREMISES OF M/S. M.V.V. BUILDERS, THE A.O. DOES NOT HAVE ANY OTHER DOCUMENT TO SHOW THAT THE ASSESSEE HAS RECEIVED ON MONEY FROM THE PURCHASER. THE A.O. HAS NOT MADE OUT ANY ATTEMPT TO FIND OUT SOME RELIABLE AND COGENT MATERIAL EVIDENCE ON RECO RD TO SUPPORT HIS FINDINGS OR TO CORROBORATE THE STATEMENT OF THE PURCHASER. THE ASSESSEE DENIED HAVING RECEIVED ANY ON MONEY OVER AND ABOVE WHAT WAS STATED IN THE SALE DEED. THE ASSESSEE RIGHTLY CLAIMED THAT THE SALE TRANSACTION HAS BEEN COMPLETED ON 7. 6.2006. THE SALE TRANSACTION HAS BEEN COMPLETED BY WAY OF REGISTERED SALE AGREEMENT - CUM - GPA. THE ASSESSEE HAS RECEIVED FULL CONSIDERATION AS ON THE DATE OF REGISTRATION OF DOCUMENT AND HANDED OVER THE POSSESSION OF THE PROPERTY TO THE BUYERS. THE ALLEGAT ION OF THE A.O. IS THAT THE PURCHASER HAS PAID ON MONEY TO THE ASSESSEE IN THE FINANCIAL YEARS RELEVANT TO ASSESSMENT YEAR 2007 - 08 AND 2008 - 09 WHICH IS ALMOST ONE YEAR AFTER SALE IS COMPLETED. WE FURTHER NOTICED THAT TOTAL CONSIDERATION HAS BEEN PAID THRO UGH PROPER BANKING CHANNEL. IT WAS NOT A CASE OF A.O. THAT THE VALUE SHOWN IN THE SALE DEED IS NOT REAL VALUE OF THE PROPERTY, BECAUSE THE VALUE DECLARED IN THE SALE DEED IS THE MARKET VALUE OF THE PROPERTY, FIXED BY THE STATE GOVERNMENT AUTHORITIES FOR DE TERMINING STAMP DUTY PURPOSE. FURTHER, THERE IS NO EVIDENCE WITH THE A.O. TO SHOW THAT THERE IS A UNDER VALUATION OF PROPERTY AND PROVISIONS OF SECTION 50C OF THE ACT IS INVOKED WHILE COMPLETING THE ASSESSMENT. THE A.O. MERELY ACTED UPON THE STATEMENT GIV EN BY THE THIRD PARTY WHICH WAS TOTALLY DENIED BY THE ASSESSEE. IT IS A SETTLED POSITION OF LAW THAT UNLESS STATEMENT IS TESTED 8 ITA NO. 241 / VIZ /201 2 ( M/S. BOMMIDALA REALTY LTD., GUNTUR) UNDER CROSS EXAMINATION, THE SAME CANNOT BE CONSIDERED AS EVIDENCE AGAINST THE ASSESSEE. THE A.O. USED THE ADMISSION OF PARTNER S OF PURCHASER FIRM MADE U/S 132(4) OF THE ACT IN THEIR CASE AGAINST THE ASSESSEE, BUT FAILED TO NOTE THAT ADMISSION OF OTHER PARTIES CANNOT BE CONSIDERED AS CONCLUSIVE EVIDENCE AGAINST THE ASSESSEE, UNLESS THERE IS A CORROBORATIVE EVIDENCE ON RECORD, BECA USE THE MAKER OF STATEMENT CAN BIND HIMSELF, BUT HOW HE BIND OTHERS FROM HIS STATEMENT WITHOUT THERE BEING ANY FURTHER EVIDENCE ON RECORD. 12. IN THE PRESENT CASE ON HAND, EXCEPT LOOSE SHEET FOUND IN THE PREMISES OF M/S. M.V.V. BUILDERS AND ADMISSION MAD E BY THE THIRD PARTY IN THEIR ASSESSMENT PROCEEDINGS, THERE IS NO OTHER EVIDENCE ON RECORD TO PROVE THAT ON MONEY IS PAID TO THE ASSESSEE TOWARDS PURCHASE OF SITE. WE FURTHER NOTICED THAT SRI M.V.V. SATYANARAYANA, WHILE DEPOSING BEFORE THE INVESTIGATING O FFICER HAS STATED THAT HE HAS PAID MONEY TO SRI P. KOTESWARA RAO TOWARDS SETTLEMENT OF LAND DISPUTES, BUT NOWHERE, STATED THAT HE HAD PAID ON MONEY TO THE ASSESSEE TOWARDS PURCHASE OF VENKOJIPALEM SITE. THE ASSESSING OFFICER WITHOUT BRINGING ON RECORD ANY EVIDENCE TO PROVE THAT ON MONEY IS EXCHANGED BETWEEN THE PARTIES, MERELY HARPING UPON LOOSE SHEET AND THIRD PARTY STATEMENT, WHICH CANNOT BE CONSIDERED AS CONCLUSIVE EVIDENCE AGAINST THE ASSESSEE TO BRING ON MONEY TO TAX AS UNDISCLOSED INCOME. THE A.O. I S REQUIRED TO BRING FURTHER EVIDENCE ON RECORD TO SHOW THAT ACTUAL MONEY IS EXCHANGED BETWEEN THE PARTIES, BUT LITERALLY FAILED TO DO SO. THE A.O. DID NOT CONDUCT ANY INDEPENDENT ENQUIRY RELATING TO VALUE OF THE PROPERTY, INSTEAD MERELY RELIED UPON STATEM ENT GIVEN BY THE PURCHASE OF THE PROPERTY WHICH IS NOT CORRECT. FURTHER, THERE IS NO EVIDENCE WITH THE A.O. THAT MONEY HAS BEEN EXCHANGED BETWEEN PURCHASER AND SELLER. THEREFORE, WE ARE OF THE VIEW THAT THE A.O. IS NOT CORRECT IN MAKING ADDITIONS TOWARDS ON MONEY WITHOUT THERE BEING ANY EVIDENCE TO SHOW THAT THE ASSESSEE HAS RECEIVED ANY MONEY OVER AND ABOVE WHAT WAS STATED IN THE SALE DEED. 13. COMING TO THE CASE LAWS RELIED UPON BY THE ASSESSEE. THE ASSESSEE RELIED UPON THE DECISION OF COORDINATE BENCH O F VISAKHAPATNAM ITAT IN THE CASE OF SRI VENKATA RAMA SAI DEVELOPERS VS. DCIT IN ITA NO.453/VIZAG/2012 DATED 6.11.2015. THE COORDINATE BENCH OF THIS TRIBUNAL, UNDER SIMILAR CIRCUMSTANCES HELD AS UNDER: 24. CONSIDERING THE TOTAL FACTS AND CIRCUMSTANCES OF T HE CASE AND ALSO APPLYING THE RATIOS OF THE JUDGEMENTS CITED ABOVE, WE ARE OF THE OPINION THAT THE A.O. IS NOT CORRECT IN COMING TO THE CONCLUSION THAT THE ON MONEY IS EXCHANGED BETWEEN THE PARTIES BASED ON A LOOSE SHEET FOUND IN THE PREMISES OF A THIRD PE RSON AND ALSO ADMISSION BY A THIRD PERSON. TO SUSTAIN THE ADDITION, THE A.O. SHOULD HAVE CONDUCTED AN INDEPENDENT ENQUIRY ABOUT THE VALUE OF THE PROPERTY AND ASCERTAIN WHETHER ANY UNDER VALUATION IS DONE, IF SO WHAT IS THE CORRECT VALUE OF THE PROPERTY. F URTHER, THE A.O. DID NOT BROUGHT ON RECORD ANY EVIDENCE TO SUPPORT HIS CONTENTION TO SAY THAT THERE IS ON MONEY EXCHANGED BETWEEN THE PARTIES. IN THE ABSENCE OF PROPER ENQUIRY AND 9 ITA NO. 241 / VIZ /201 2 ( M/S. BOMMIDALA REALTY LTD., GUNTUR) SUFFICIENT EVIDENCES, WE FIND NO REASON TO CONFIRM THE ADDITION MADE BY THE A.O. THEREFORE, WE REVERSE THE CIT(A) ORDER AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION. 14. THE ASSESSEE RELIED UPON THE DECISION OF ITAT HYDERABAD A BENCH, IN THE CASE OF K.V. LAKSHMI SAVITRI DEVI VS. ACIT (2012) 148 TTJ 157. THE COORDIN ATE BENCH OF THIS TRIBUNAL, UNDER SIMILAR CIRCUMSTANCES HELD AS UNDER: ADMITTEDLY THERE WAS NO SEARCH ACTION IN THE CASE OF THE ASSESSEE. IT IS A LOOSE SLIP CONTAININ G CERTAIN ENTRIES RECORDING THE PAYMENT WHICH WAS FOUND AT THE PREMISES OF CRK. IT DOES NOT CON TAIN EITHER DATE OF PAYMENT OR NAME OF THE PERSON WHO HAS MADE THE PAYMENT. ACCORDING TO THE DEPARTMENT, CRK DENOTES C. RADHA KRISHNA KUMAR AND KRK DENOTES K. RAJANI KU M ARI. HOWEVER, NO NAME OF THE ASSESSEE WAS FOUND IN THE LOUSE SHEET. THE PROPERTY WAS PURCHASED FROM P W/C CRK FOR A DISCLOSED CONSIDERATION OF PS. 65 LAKHS BY THE ASSESSEE. THE PROPERTY HAS BEEN REGISTERE D AND THE SALE DEED WAS EXECUTED FOR A CONSIDERATION OF PS. 6 5 LAKHS ON 21ST AUG., 2006 WHICH CONSIDERATI O N HAS BEEN ACCEPTED BY THE STATE REGISTRATION AUTHORITIES. FURTHER NOTHING WAS BROUGH T ON RECORD TO SHOW THAT THERE WAS ANY INVOKING OF S. 50C WHILE COMPLETING THE ASSESSMENT IN THE CASE OF THE SELLER. THERE IS NO EVIDENCE OTHER THAN THE SEIZED MATERIAL MARKED AS 'A/CRK104' WHERE R ELEVANT ENTRIES ARE MADE AT RS. 1,65,00,000. THE SEIZED MATERIAL WAS NOT FOUND AT THE PREMISES O THE ASSESSEE AND THERE IS NO CORROBORATIVE MATERIAL TO SUGGEST THAT THE ASSESSEE HAS ACTUALLY PAI D R S. 1.65 RORES TOWARDS PURCHASE CONSIDERATION OF THE PROPERTY. THE ASSESSEE AND HER BROTHE R CATEGORICALLY DENIED THE PAYMENT OF ANY MONEY OVER AND ABOVE RS. 65 LAKHS. THE AO PLACED HI RELIANCE ON THE STATEMENT OF 5, WHO IS A THIRD PARTY. THE EVIDENCE BROUGHT ON RECORD BY THE DEPARTMENT IS NOT ENOUGH TO FASTE N ADDITIONAL TAX LIABILITY ON THE ASSESSEE. AS SEEN FROM THE ABOVE DOCUMENT THIS IS JUST A HANDWRITTEN LOOSE DOCUMENT AND THE HANDWRITING IS ALSO NOT OF THE ASSESSEE AND THE LOOSE DOCUMENT WAS FOUND AT THE PREMISES OF A THIRD PARTY. THE BURDEN IS ON THE DE PARTMENT TO PROVE CONCLUSIVELY THAT THE LOOSE DOCUMENT BELONGS TO THE ASSESSEE. THERE IS N O PRESUMPTION IN LAW THAT THE ASSESSEE HAS ACTUALLY PAID RS. 165 LAKHS TOWARDS PURCHASE OF THE PROPERTY. THE UNDISCLOSED INCOME IN THIS CASE IS TO BE COMPUTED BY THE AO ON THE BASIS OF THE AVAILABLE MATERIAL ON RECORD. IT SHOULD NOT BE BASED ON CONJECTURES AND SURMISES. AS OF NOW, THE MATERIAL CONSIDERED BY THE AO FOR MAKING THE ADDITION OF PS. 1 CRORE IS SEIZED 10 ITA NO. 241 / VIZ /201 2 ( M/S. BOMMIDALA REALTY LTD., GUNTUR) MATERIAL MARKED A 'A/CRK104' AND THE STATEMENT OF S. THIS LOOSE SHEET FOUND AT THE PREMISES OF CRK IS NOT ENOUG H MATERIAL TO SUSTAIN THIS ADDITION. THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH AND THE STATEMENT RECORDED ARE SOME PIECE OF EVIDENCE TO MAKE THE ADDITION. THE AO HAS TO ESTABLISH THE LINK BE TWEEN THE SEIZED MATERIAL AND OTHER BOOKS OF ACCOUNT TO THE ASSESSEE. THE SEIZED MATER I A L AND STATEMENT OF CRK CANNOT BE CONCLUSIVE EVIDENCE TO MAKE THIS ADDITION. THE ENTIRE CASE HEREI N IS DEPENDING UPON THE RULE OF EVIDENCE. THERE IS NO CONCLUSIVE PRESUM PTION TO SAY THAT ACTUA L CONSIDERATION PASSED ON BETWEEN THE PARTIES IS ACTUALLY RS. 165 LAKHS. THE ASSESSEE AS WELL AS HE R BROTHER STATED IN THEIR RESPECTIVE STATEMENTS THAT THE CONSIDERATION PASSED BETWEEN THE PARTIES I S ONLY RS. 65 LAKHS. IN SPITE OF TH IS THE AO PROCEEDED TO CONCLUDE THAT THE SEIZED MATERIAL I S CON CLUSIVELY REFLECTING THE PAYMENT OF CONSIDERATION AT R S. 165 LAKHS. THE DEPARTMENT HEREIN I REQUIRED TO ESTABLISH THE NEXUS OF THE SEIZED MATERIAL TO THE ASSESSEE. AS STATED EARLIER THERE IS N O DATE AND NAME OF THE ASSESSEE. THE ALLEGATION OF THE DEPARTMENT IS THAT THE SEIZED MATER IAL DENOTES THE PAYMENT MADE BY THE ASSESSEE TO THE PURCHASER FOR PURCHASE OF THE PROPERTY. HOWEVER, NO SUCH NARRATION OR NAME OF THE ASSESSEE WAS FOUND IN THE SEIZED MATERIAL. THE DEPARTMENT IS NOT ABLE TO UNEARTH ANY DOCUMENT OR MATERIAL OR ANY CORROBORATIVE MATERIAL TO SHO W THAT THE ASSESSEE HEREIN ACTUALLY PAID PS. 165 LAKHS FOR PURCHASE OF THE PROPERTY. THE DEPARTME NT HAS NOT BROUGHT ON RECORD THE DATE ON WHICH THE PAYMENT WAS MADE AND THE SOURCE FROM WHICH II IS PAID AND/OR ANY DETAILS OF BANK ACCOUNT FROM WHERE THE CASH WAS WITHDRAWN. WITHOUT ANY OF THESE DETAILS, THE DEPARTMENT HAS TAKEN A VIEW THAT THE ASSESSEE HAS PAID PS. 165 LAKHS FO R PURCHASE O F THE PROPERTY. THE DEPARTMENT CANNOT DRAW INFERENCE ON THE BASIS OF SUSPICION, CONJECTURES AND SURMISES. SUSPICION, HOWEVER STRONG CANNOT TAKE PLACE OF MATERIAL IN SUPPORT OF THE FINDING FROM THE AO. THE AO SHOULD ACT IN A JUDICIAL MANNER, PROCEED WITH JUD ICIAL SPIRIT AND COME TO A JUDICIAL CONCLUSION. THE AO IS REQUIRED TO ACT FAIRLY AS A REASONABLE PERSON AND NOT ARBITRARI LY AND CAPRICIOUSLY. THE ASSESSMENT MADE SHOULD HAVE ENOUGH MATERIAL AND IT SHOULD STAND ON ITS OW N LEGS. THE BASIS FOR ADDITION CANNOT BE ONLY THE LOOSE SHEET OR A THIRD PARTY STATEMENT. IN THE ABSENCE OF CORROBORATIVE MATERIAL, AND/OR CIRCU MSTANTIAL EVIDENCE, THE ADDITION CANNOT BE SUSTAINED. THUS, NO ADDITION CAN BE MADE ON A DUMB DOCUME NT AND NOTING ON LOOSE SHEET. IT SHOULD BE SUPPORTED BY THE EVIDENCE ON RECORD AND THE EVIDENCE ON RECORD IS 11 ITA NO. 241 / VIZ /201 2 ( M/S. BOMMIDALA REALTY LTD., GUNTUR) NOT SUFFICIENT T O SUPPORT THE REVENUE'S ACTION. IN A BLOCK ASSESSMENT UNDISCLOSED INCOME HAS TO BE DETERMINED OR THE . BASIS OF THE MATERIAL AND EVIDENCE DETECTED IN THE COURSE OF THE SEARCH ACTION. THE CIRCUMSTANCES SURROUNDING THE CASE ARE NOT STRONG ENOUGH TO JUSTIFY THE ADDITION MADE BY THE DEPARTMENT. THE BURDEN OF PROVING THE ACTUAL CONSIDERATION IN THE PURCHASE OF PROPERTY IS ON THE REVENUE. CONSIDERING THE ENTIRE FACTS OF THE CASE, THE REVENUE HAS FAILED TO DISCHARGE ITS DUTY, INSTEAD MADE UP A CASE ON SURMISES AND CONJECTURES WHICH CANNOT BE ALLOWED. UNDER THESE CIRCUMSTANCES, THERE IS NO REASON TO CONFIRM THE ADDITION OF RS. 100 LA KHS TOWARDS ON - MONEY PAYMENT. ACCORDINGLY, THE ADDITION OF RS. 100 LAKHS IS DELET ED. CIT VS. P.V. KALYANASUNDARAM (2006) 203 CTR (MAD) 449: (2006) 282 ITR 259 (MAD) RELIED ON 15. THE ASSESSEE RELIED UPON THE DECISION OF HONBLE A.P. HIGH COURT, IN THE CAS E OF K. LAKSHMI SAVITRI DEVI IN ITA NO.563 OF 2011. THE HONBLE A.P. HIGH COURT, WHILE UPHELD THE ORDER OF ITAT A BENCH, IN THE CASE OF K. LAKSHMI SAVITRI DEVI, OBSERVED AS UNDER : - WE ARE OF THE VIEW THAT THE TRIBUNAL HAS RIGHTLY HELD THAT THE REGISTERED DOCUMENT DT. 21.8.2006 UNDE4R WHICH THE RESPONDENT PURCHASED THE ABOVE PROPERTY SHOWED THAT ONLY RS.65.00 LAKHS WAS PAID TO THE VENDOR BY THE RESPONDENT; THAT THERE WAS NO EVIDENCE TO SHOW THAT THE RESPONDENT HAD PAID RS.1.00 CRORE IN CASH ALSO TO THE VENDOR; THAT NO PRESUMPTION OF SUCH PAYMENT OF RS.1.00 CRORE IN CASH CAN BE DRAWN ON THE BASIS OF AN ENTRY FOUND IN A DIARY/LOOSE SHEET IN THE PREMISES OF C. RADHA KRISHNA KUMAR WHICH I S NOT IN THE RESPONDENTS HANDWRITING AND WHICH DID NOT CONTAIN THE NAME OF THE RESPONDENT OR ANY DATE OF PAYMENT OR THE NAME OF THE PERSON WHO MADE THE PAYMENT. IT RIGHTLY HELD THAT THE REVENUE FAILED TO ESTABLISH THE NEXUS OF THE SEIZED MATERIAL TO THE RESPONDENT AND HAD DRAWN INFERENCES BASED ON SUSPICION, CONJECTURES AND SURMISES WHICH CANNOT TAKE THE PLACE OF PROOF. WE ALSO AGREE WITH THE TRIBUNAL THAT THE ASSESSING OFFICER DID NOT CONDUCT ANY INDEPENDENT ENQUIRY RELATING TO THE VALUE OF THE PROPERTY PURCHASED AND THE BURDEN OF PROVING THE ACTUAL CONSIDERATION IN THE PURCHASE OF THE PROPERTY IS 12 ITA NO. 241 / VIZ /201 2 ( M/S. BOMMIDALA REALTY LTD., GUNTUR) ON THE REVENUE AND IT HAD FAILED TO DISCHARGE THE SAID BURDEN. 16. THE HONBLE SUPREME COURT, IN THE CASE OF CIT VS. P.V. KALYANA SUNDARAM (2007) 294 ITR 49, UNDER SIMILAR CIRCUMSTANCES HELD IN FAVOUR OF THE ASSESSEE. THE HONBLE SUPREME COURT, WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE HELD AS UNDER: - WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES AND HAVE GONE THROUGH THE RECORD. IT IS TRUE THAT TH E DIVISION BENCH OF THE HIGH COURT HAS BORROWED EXTENSIVELY FROM THE ORDERS OF THE TRIBUNAL AND THE COMMISSIONER AND PASSED THEM OFF AS IF THEY WERE THEMSELVES THE AUTHOR(S). WE FEEL THAT QUOTING FROM AN ORDER OF SOME AUTHORITY PARTICULARLY A SPECIALIZED ONE CANNOT PER SE BE FAULTED AS THIS PROCEDURE CAN OFTEN HELP IN MAKING FOR BREVITY AND PRECISION, BUT WE AGREE WITH MR. VAHANVATI TO THE EXTENT THAT ANY BORROWED WORDS USED IN A JUDGEMENT MUST BE ACKNOWLEDGED AS SUCH IN ANY APPROPRIATE MANNER AS A COURT ESY TO THE TRUE AUTHOR(S). BE THAT AS IT MAY, WE ARE OF THE OPINION THAT THE THREE QUESTIONS REPRODUCED ABOVE CAN, IN NO WAY, BE CALLED SUBSTANTIAL QUESTIONS OF LAW. THE FACT AS TO THE ACTUAL SALE PRICE OF THE PROPERTY, THE IMPLICATION OF THE CONTRADICTO RY STATEMENTS MADE BY RAJARATHINAM OR WHETHER RELIANCE COULD BE PLACED ON THE LOOSE SHEETS RECOVERED IN THE COURSE OF THE RAID ARE ALL QUESTION OF FACT. WE THEREFORE FIND NO INFIRMITY IN THE ORDER OF THE HIGH COURT. ACCORDINGLY, WE DISMISS THE APPEAL. 1 7. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THIS CASE AND ALSO APPLYING THE RATIOS OF THE JUDG MENTS CITED ABOVE, WE ARE OF THE VIEW THAT THE A.O. IS NOT CORRECT IN COMING TO THE CONCLUSION THAT ON MONEY EXCHANGED BETWEEN THE PARTIES, BASED ON A LOOSE SHE ET FOUND IN THE PREMISES OF A THIRD PARTY AND ALSO STATEMENT GIVEN BY A THIRD PERSON. TO SUSTAIN THE ADDITION, THE A.O. SHOULD HAVE TAKEN AN INDEPENDENT ENQUIRY ABOUT THE VALUE OF THE PROPERTY AND ASCERTAIN WHETHER ANY UNDER VALUATION IS DONE, IF SO WHAT IS THE CORRECT VALUE OF THE PROPERTY. FURTHER, THE A.O. FAILED TO BRING ANY EVIDENCE TO SUPPORT HIS FINDINGS THAT THERE IS ON - MONEY PAYMENT OVER AND ABOVE WHAT IS STATED IN THE SALE DEED. IN THE ABSENCE OF PROPER ENQUIRY AND SUFFICIENT EVIDENCES, WE FIND NO REASONS TO CONFIRM THE ADDITIONS MADE BY THE A.O. THE CIT(A) WITHOUT APPRECIATING FACTS, SIMPLY UPHELD ADDITIONS MADE BY THE A.O. HENCE, WE SET ASIDE THE ORDER PASSED BY THE CIT(A) AND DIRECT THE A.O. TO DELETE THE ADDITIONS MADE TOWARDS ALLEGED ON MO NEY FOR THE ASSESSMENT YEARS 2007 - 08 & 2008 - 09. 13 ITA NO. 241 / VIZ /201 2 ( M/S. BOMMIDALA REALTY LTD., GUNTUR) 8 . IN VIEW OF THE ABOVE , WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) . THUS, THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED. 9. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON TH IS 07 TH DAY OF MARCH , 201 7 . SD/ - SD/ - (G. MANJUNATHA) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 07 TH MARCH , 201 7 . VR/ - COPY TO: 1 . THE ASSESSEE - M/S. BOMMIDALA REALTY LTD., 4 - 20 - 24, RING ROAD, GUNTUR. 2 . THE REVENUE DCIT, CIRCLE - 2(1), GUNTUR. 3 . THE CIT, GUNTUR . 4 . THE CIT(A) , GUNTUR . 5 . THE D.R . 6 . GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY I.T.A.T., VISAKHAPATNAM