Ajay Kumar Kedia, Hyderabad V. ACIT, Central Circle-4, Hyderabad

ITA 275/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59362 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 21-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V SRINIVAS
• Assessee Lawyers: K C DEVADAS
• Keywords: Unexplained investment; Search and seizure
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT. ASHA VIJAYARAGHAVAN, JDUICIAL MEMBER AND SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.275/HYD/2011 : ASSESSMENT YEAR 2007-08 SHRI AJAY KUMAR KEDIA, HYDERABAD (PAN - ADOPK 7066 P ) V/S ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 4, HYDERABAD (APP EL LANT) (RESPONDENT) APP E L L ANT BY : SHRI K.C.DEVADAS RESPONDENT BY : SHRI V.SRINIVAS DATE OF HEARING 12.3.2012 DATE OF PRONOUNCEMENT 14.3.2012 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE CIT(A) VII, HYDERABAD DATED 6.12.2010 FOR THE A SSESSMENT YEAR 2007-08. 2. EFFECTIVE GRIEVANCE OF THE ASSESSEE IN THIS APP EAL RELATES TO AN ADDITION OF RS.40,00,000 MADE BY THE ASSESSING OFFI CER, WHICH HAS BEEN CONFIRMED BY THE CIT(A). 3. FACTS OF THE CASE IN BRIEF ARE THAT SEARCH AND SEIZURE OPERATIONS WERE CONDUCTED UNDER S.132 OF THE ACT ON THE KEDIA GROUP OF CASES ALONGWITH THE ASSESSEES CASE ON 1.2.2008. N OTICE UNDER S.1533A WAS ISSUED FOR THE ASSESSMENT YEAR 2007-08 ON 26.6. 2008. ASSESSEE FILED RETURN OF INCOME ON 5.11.2009 IN RESPONSE TO THE NO TICE UNDER S.153A, BY DECLARING TOTAL INCOME OF RS.13,90,860. NOTICE U NDER S.143(2) AND 142(1) ALONGWITH QUESTIONNAIRE WERE ISSUED TO THE A SSESSEE, AND THE ASSESSMENT WAS ULTIMATELY COMPLETED UNDER S.143(3) OF THE ACT, ON A ITA NO.275/HYD/11 SHRI AJAY KUMAR KEDIA, HYDERABAD 2 TOTAL INCOME OF RS.53,90,860. DURING THE COURSE OF SEARCH, AT THE RESIDENCE OF THE SHRI MAHESH KUMAR KEDIA, IT WAS FO UND THAT DURING THE FINANCIAL YEAR 2006-07, SHRI AJAY KUAMR KEDIA PURCH ASED AGRICULTURAL LAND AT MANIKONDA VILLAGE, R.R. DISTRICT TO THE EXT ENT OF 7 ACRES AND 19 GUNTAS FROM ONE SMT. A.LAXMAMMA AND A.ANASUYA FOR C ONSIDERATION OF RS.50,00,000 AND THE SAID DOCUMENT WAS SEIZED DURIN G THE COURSE OF SEARCH. AS PER THE DOCUMENT, MODE OF PAYMENT MADE BY CASH WAS RS.40 LAKHS AND BY CHEQUE WAS RS.10 LAKHS AGAINST SALE CO NSIDERATION. SOURCE OF INCOME FOR THE ABOVE PAYMENT OF RS.50,00,000 HAS BEEN CALLED FOR. ASSESSEE STATED THAT HE HAS INTERESTED IN THE SALE TRANSACTION, BUT HAD PAID ONLY RS. 10 LAKHS THROUGH CHEQUE, BUT HAD NOT PAID THE FULL PAYMENT BECAUSE OF THE SAME LAND BEING UNDER DISPUTE. 4. THE ASSESSING OFFICER HOWEVER OBSERVED THAT TH E DOCUMENT CLEARLY SHOWS THAT THE ASSESSEE MADE PAYMENT OF RS. 50 LAKHS, AS MAY BE SEEN FROM PAGE NO.4 OF THE DOCUMENT NO.13354/2006 D ATED 23TH JUNE, 2006, WHEREIN IT WAS CLEARLY SHOWN THAT THE ASSESS EE PAID RS.50 LAKHS OUT OF WHICH RS.40 LAKHS WAS PAID BY CASH AND THE R EMAINING RS.10 LAKHS WAS PAID BY CHEQUE AND RECEIPT FOR THE SAME HAS BEE N ACKNOWLEDGED BY THE VENDOR. MOREOVER, THE ASSESSING OFFICER OBSERVE D THAT THE MARKET VALUE OF THE LAND IS MUCH HIGHER, I.E. RS.1,12,12,5 00 AND THE ASSESSEE PAID REGISTRATION CHARGES ACCORDINGLY. HENCE, HE T REATED THE AMOUNT FOR RS.40 LAKHS AS UNEXPLAINED INVESTMENT IN THE LAND, DUE TO NON-PRODUCTION OF SOURCE FOR THE SAME AND ADDED THE SAME TO THE I NCOME OF THE ASSESSEE, WHILE COMPLETING THE ASSESSMENT ON A TOT AL INCOME OF RS.53,90,860, VIDE ORDER OF ASSESSMENT DATED 21.12. 2009 PASSED UNDER S.143(32) READ WITH S.153A OF THE ACT. 5. ON APPEAL BEFORE THE CIT(A), THE LEARNED AUTHOR ISED REPRESENTATIVE REITERATED THE SUBMISSION MADE BEFOR E THE ASSESSING OFFICER. THE CIT(A) CONFIRMED THE ORDER OF THE ASS ESSING OFFICER, BASED ON ITA NO.275/HYD/11 SHRI AJAY KUMAR KEDIA, HYDERABAD 3 THE OBSERVATION MADE BY HIM WITH RESPECT TO THE DOC UMENT, WHEREIN IT SHOWED THAT THE ASSESSEE HAD ALREADY MADE PAYMENTS OF RS.50 LAKHS, VIDE DOCUMENT NO.13354 AND SUSTAINED THE ADDITION M ADE BY THE ASSESSING OFFICER. 6. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. 7. THE LEARNED COUNSEL ARGUED THAT THE CONSIDERAT ION TO BE PAID WAS STATED TO BE RS.50 LAKHS IN THE DOCUMENT FOR TH E PURCHASE OF LAND, BUT THE SAME HAD NOT BEEN PAID AND ONLY RS.10 LAKHS WAS PAID BY WAY OF CHEQUE, AS IT WAS FOUND THAT THE AGRICULTURAL LAND TO BE PURCHASED WAS UNDER DISPUTE. THE LEARNED COUNSEL SHRI K.C.DEVADA S, TOOK US THROUGH THE AFFIDAVIT OF THE ASSESSEE FILED BEFORE THE ASSE SSING OFFICER, WHICH APPEARS AT PAGE 5 OF THE PAPER-BOOK, WHEREIN IT HAS BEEN STATED AS FOLLOWS- AS DOCUMENT NO.13354/2006 DATED 23 RD JUNE, 2006, REGISTERED AT THE DISTRICT REGISTRAR, RANGA REDDY D ISTRICT EXPRESSING AS ABSOLUTE OWNERS AND PEACEFUL POSSESSO RS OF THE AGRICULTURAL LAND ADMEASURING AC.7-10 GUNTAS, S ITUATED AT MANIKONDA JAGIR VILLAGE, RAJENDER NAGAR MANDAL, RANGA REDDY DISTRICT, VIDE THE PROCEEDINGS NO.B/4414/1997 DATED 1 ST DECEMBER, 1997 (ANNEXURE-I) ISSUED BY THE MANDAL REVENUE OFFICER, RAJENDER NAGAR MANDAL, RANGAREDDY DISTRICT. WHEREAS, THE VENDORS MADE THE UNDERSIGNED TO BELIEVE THAT THEY ARE THE ABSOLUTE OWNERS OF THE AF ORESAID PIECES OF LAND AS PER THE PROCEEDINGS CITED IN THE PARA (SUPRA) AND EXECUTED THE AGREEMENT OF SALE CUM GENE RAL POWER OF ATTORNEY DATED 23 RD JUN, 2006. HOWEVER, THE LAND WAS OCCUPIED BY SOME ILLEGAL PERSONS. WHEREAS, IN CONSIDERATION OF THE SALEE THE UNDERSIGNED MADE A PAYMENT OF RS.10.00 LCS ONLY, BY MEANS OF CHEQUES BEARING NOS.7872822 AND NO.772823 DATED 23RD JUNE, ,2006 (RS.5.00- LACS EACH) DRAWN ON STATE BANK OF HYDERABAD, MAHBOOB GUNJ BRANCH, HYDERABAD-1 2, WITH A UNDERSTANDING TO AFFECT THE PAYM ENT OF THE BALANCE AMOUNT OF RS.40.00- LACS ON ARRANGING TO PROVIDE P EACEFUL AND UNDETERRED POSSESSION OF THE AFORESAID PIECES OF LAND, BY VACATING THE OCCUPANCY BY UNAUTHORIZED PERSONS. ITA NO.275/HYD/11 SHRI AJAY KUMAR KEDIA, HYDERABAD 4 WHEREAS, ON REACHING THE SITE, AFTER THE REGISTERED GPA IT WAS FOUND THAT THE LAND WAS OCCUPIED BY PERS ONS, WHO ARE SET TO HAVE PURCHASED THE SAME FROM SRI A.NARASIMHA REDDY S/O. LATE A.SHANKER REDDY & SMT. ACHAMMAGARI LAXMAMMA(VENDOR I). WHEREAS, THE OCCUPANTS ARE IN POSSESSION OF EH SALE DEEDS EXECUTED IN THEIR FAVOUR, BY SRI A.NARASIMHA REDDY AS DETAILED HEREUNDER: SY. NO. SALE DEED NO. DATED VENDOR NAME ANNE- XURE 256/2 SALE DEED NO.1139/78 27.06.1978 A.NARSIMHAR REDDY III 180 SALE DEED NO.1140/78 27.06.1978 A.NARSIMHAR RED DY IV 226/2 SALE DEED NO.1142/78 27.06.1978 A.NARSIMHAR REDDY V 160 GPA NO.119/81 17.11.1981 A.NARSIMHAR REDDY VI 152 GPA NO.10/85 24.01.1985 A.NARSIMHAR REDDY VII 162 GPA NO.117/92 16.01.1992 A.LAXMAMMA VIII WHEREAS THE OCCUPANTS OF THE LAND ARE ALSO IN POSSESSION OF THE PROCEEDINGS NO.B/4900/2002 DATED 13.09.2011 (ANNEXURE II) ISSUED BY THE COURT OF TH E COLLECTOR AND MANDAL REVENUE OFFICER, RAJENDER NAGA R, RANGA REDDY DISTRICT CANCELING THE PROCEEDINGS NO.B/4414/1997 DATED 1 ST DECEMBER, 1997, BASED ON WHICH THE SALE CUM GPA WAS EXECUTED. WHEREAS, THE VENDORS HAVE CHEATED THE UNDERSIGNED BY SUPPRESSING THE SUBSEQUENT PROCEEDINGS WHICH HAV E CANCELLED THEIR OWNERSHIP OF THE LAND UNDER REFEREN CE, AND AS WELL THE SALE OF PIECE OF LAND UNDER SURVEY NO. 162 VIDE GPA NO.117/92 DATED 16 TH JANUARY, 1992, BY SMT. A.LAXMAMMA ALSO EVIDENCES THE FRAUDULENT DEAL ENTER ED BY THE VENDORS WITH THE UNDERSIGNED. WHEREAS, THE UNDERSIGNED SOLEMNLY AFFIRM THAT THE BALANCE AMOUNT OF RS.40.00 LACS PURPORTED TO HAVE B EEN PAID IN CASH TO THE VENDORS AS PER THE AGREEMENT OF SALE HAS NOT BEEN FACTUALLY MADE, AS IT WAS AGREED TO PA Y ONLY AFTER POSSESSION WAS GIVEN. WHEREAS, THE UNDERSIGNED HAS ALSO PRODUCED SMT. A.ANASUYA, WIFE OF SRI A.RAJ REDDY (VENDOR2) BEFORE YOUR GOODSELVES, THE FACT OF NON-RECEIPT OF THE BALANCE AMOUNT OF RS.40.00 LACS. WAS CONFIRMED BY HER. 8. THE LEARNED COUNSEL POINTED OUT THAT THE CIT(A ) HAD NOT APPRECIATED THAT NON-PAYMENT OF RS.40 LAKHS IN CASH FOR THE PURCHASE OF AGRICULTURAL LAND WAS CORROBORATED IN PERSON BEFOR E THE ASSESSING OFFICER, BY SMT. A.ANASUYA, WHO IS ONE OF THE VENDORS. ITA NO.275/HYD/11 SHRI AJAY KUMAR KEDIA, HYDERABAD 5 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND, RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 10. WE HEARD BOTH THE PARTIES. WE FIND THAT OPPOR TUNITY WAS NOT GIVEN TO THE ASSESSEE TO CROSS-EXAMINE SMT.ANASUYA, AS PER THE PROVISIONS OF S.153A. FURTHER, THE DEPARTMENT HAS NOT REBUTTED THE CONTENTS OF THE AFFIDAVIT FILED BY THE ASSESSEE, SH RI AJAY KUMAR KEDIA, WHEREIN HE HAD CONFIRMED THAT ONLY RS. 10 LAKHS BY CHEQUE HAD BEEN PAID. THE ONUS WHICH HITHERTO LIED ON THE ASSESSEE TO SUBSTANTIATE THE CLAIM MADE BY HIM, SHIFTED TO THE DEPARTMENT ON ACC OUNT OF THE AFFIDAVIT FILED BY THE ASSESSEE, AND THE SAME HAS NOT BEEN PR OPERLY DISCHARGED BY THE DEPARTMENT, BY BRINGING ON RECORD NECESSARY MAT ERIAL TO REBUT THE SAME. 11. ON A SPECIFIC QUERY BY THE BENCH, WHETHER TH E DOCUMENT NO.13354/2006 DATED 23.6.2007 COULD BE PRODUCED FOR BEING PERUSED BY THE BENCH, THE LEARNED COUNSEL SUBMITTED THAT THE S AME WAS IMPOUNDED BY THE DEPARTMENT AND HENCE IS NOT AVAILABLE WITH H IM. IN THESE CIRCUMSTANCES, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFF ICER, WITH A DIRECTION TO RE- EXAMINE THE SAME, AFTER GIVING THE ASSESSEE, AN OPP ORTUNITY TO CROSS- EXAMINE ONE OF THE VENDORS, SMT.ANASUYA, WHOSE STAT EMENT HAS BEEN RECORDED BY THE ASSESSING OFFICER. THE ASSESSING O FFICER SHALL RECONSIDER THE WHOLE ISSUE IN ACCORDANCE WITH LAW, AFTER GIVIN G REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE TO ESTABLISH THAT ONLY A SUM OF RS.10 LAKHS HAS BEEN PAID BY CHEQUE, AND NOT THE TO TAL AMOUNT OF RS.50 LAKHS AS PER THE AGREEMENT OF SALE. ITA NO.275/HYD/11 SHRI AJAY KUMAR KEDIA, HYDERABAD 6 12. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 14 TH MARCH, 2012 SD/- SD/- (D.KARUNAKARA R AO ) ( ASHA VIJAYARAGHAVAN ) ACCOUNTANT MEMBER. JUDICIAL MEMBER. DT/- 14 TH MARCH, 2012 COPY FORWARDED TO: 1. SHRI AJAY KUMAR KEDIA, C/O. M/S. V.S.RAO & CO., CHARTERED ACCOUNTANTS, 6-30-609/136, ANANDNAGAR, , HYDERABAD-500 004. 2. ASST COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 4, HYDERABAD 3. 4. COMMISSIONER OF INCOME - TAX(APPEALS) VII, HYDERABAD THE DEPARTMENTAL REPRESENTATIVE, ITAT HYDERABAD B.V.S.