R.Govind, Visakhapatnam V. THE DCIT, CENTRAL CIRCLE-1, Visakhapatnam

ITA 28/VIZ/2014

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4182 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 27-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CH SANJEEV
• Keywords: Unexplained investment; Income from undisclosed sources; Additional evidence
• Section: 142(1); 153A; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 2 8 / VIZ /201 4 (ASST. YEAR : 20 0 7 - 0 8 ) RAPETI GOVIND, FLAT NO. 301, AARAM A P TS . , CHINA WALTAIR, VISAKHAPATNAM. V S . D CIT, CENTRAL CIRCLE - 1 , VISAKHAPATNAM. PAN NO. AECPR 0626 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C. SUBRAHMANYAM FC A. DEPARTMENT BY : SHRI CH. SANJEEV SR. DR DATE OF HEARING : 05 / 0 9 /201 8 . DATE OF PRONOUNCEMENT : 12 / 1 0 /201 8 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) , VISAKHAPATNAM , DATED 26 / 11 /201 3 FOR THE ASSESSMENT YEAR 200 7 - 0 8 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF INTERIOR DECORATION THROUGH HIS PROPRIETARY CONCERN ETCETRA INTERIORS AND IS ALSO A PARTNER IN M/S.CLASSIQUE FARMS & ESTATES ALONG WITH ONE SRI M.V.V. SATYANARAYANA. A SEARCH OPERATION WAS CONDUCTED UNDER SECTION 2 ITA NO. 28/VIZ/2014 ( R. GOVIND ) 132 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT') IN THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 12/09/2007 A ND ALSO IN THE MVV GROUP. CONSEQUENT THERETO, NOTICES UNDER SECTION 153A WERE ISSUED FOR ASSESSMENT YEARS 2002 - 03 TO 2007 - 08 . IN RESPONSE TO THE NOTICE, THE ASSESSEE HAD FILED RETURN OF INCOME ADMITTING TOTAL INCOME OF RS. 1,50,91,490/ - ON 21/08/2009 . DURING THE COURSE OF SEARCH, SOME INCRIMINATING MATERIALS WERE FOUND REGARDING INVESTMENT MADE BY THE FIR M M/S. CLASSIQUE FARM & ESTATES FOR ACQUISITION OF LAND TO TH A T EXTENT OF 84.29 ACRES IN MADDI. THE DOCUMENTED CONSIDERATION FOR SUCH ACQUISITION W AS RS. 1,33,23,000/ - , A ND THE SEIZED MATERI A LS INDICATED EXTRA AMOUNT OF RS. 4,43,00,000/ - WAS PA I D IN CASH FOR SUCH ACQUISITION. WITH REGARD TO THE SOURCE FOR THE UNEXPLAINED INVESTMENT OF RS.4,43,00,000/ - , THE INDIVIDUAL PARTNERS ADMITTED UNEXPLAINED INVESTMENT OF RS.2,21,50,000/ - AS THEIR UNACCOUNTED INCOME EACH FOR THE FINANCIAL YEAR 2006 - 07. THE UNACCOUNTED INVESTMENT WAS QUANTIFIED AT RS. 2,32,61,450/ - , IN RESPECT OF WHICH , THE ASSESSEE HAD ADMITTED RS. 2,21,50,000/ - AS HIS UNACCOUNTED INCOME. BUT OUT OF THAT AMOUNT, THE ASSESSEE HAD RETRACTED TO THE TUNE OF RS.1,45,00,000/ - . D URING THE COURSE OF ASSESSMENT PROCEEDINGS , STATING THAT HE HAD RECEIVED AD VANCE OF RS. 1,45,00,000/ - FROM SMT. K. BHANUMATHI AND MR. N. RAVI KUMAR. THE ASSESSING 3 ITA NO. 28/VIZ/2014 ( R. GOVIND ) OFFICER HAD GIVEN VARIOUS OPPORTUNITIES TO PROVE SUCH CLAIM , BUT ASSESSEE FAILED TO PROVIDE ANY EVIDENCE. HENCE, THE ASSESSING OFFICER HAD MADE ADDITION OF RS. 1,45,00,000/ - WHICH IS INCLUDED IN THE ADDITION MADE TOWARDS UNEXPLAINED INVESTMENT OF RS. 1,50,21, 500 / - . BESIDES , THE ASSESSING OFFICER HAD ALSO MADE AN ADDITION OF RS. 5,21,500/ - TOWARDS INCOME FROM LONG TERM CAPITAL GAIN AND THEREBY DETERMINED TOTAL INCOME AT RS.3,01,12,990/ - . 3 . ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE HAS FILED AN ADDITIONAL EVIDENCE UNDER RULE 46A OF THE I.T. RULES, 1962 VIDE P ETITION DATED 27/03/2012 TO ADMIT COPY OF UNREGISTERED AGREEMENT OF SALE DATED 23/09/2006 , COPY OF PASSPORT OF SMT. K.BHANUMATHI, CONFIRMATION LETTERS FROM SMT. K. BHANUMATHI AND SRI M. VISWA MOHAN , DATED 27/01/2010 . THE LD. CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCE AND ALSO CALLED THE REMAND REPORT FROM THE ASSESSING OFFICER. BY CONSIDERING ALL THE DETAILS, THE LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. THE RELEVANT PORTION OF THE LD. CIT(A)S ORDER IS EXTRACTED AS UN DER: - 7.6 I HAVE CONSIDERED THE SUBMISSIONS MADE, THE ADDITIONAL EVIDENCE FILED, THE REPORT OF THE AO ON THE ADDITIONAL EVIDENCE AND OTHER MATERIALS AVAILABLE ON RECORD FOR ADJUDICATING THE ISSUES RAISED IN THE APPEAL. 7.7. FROM THE DETAILS ON RECORD, IT IS SEEN THAT ON ACCOUNT OF THE SEARCH IN THE PURCHASE OF IMMOVABLE PROPERTY AT MADDI BY M/S.CLASSIQUE FARMS & ESTATES WHICH CAME INTO EXISTENCE DURING THE PREVIOUS YEAR RELEVANT TO THE 4 ITA NO. 28/VIZ/2014 ( R. GOVIND ) ASSESSMENT YEAR UNDER CONSIDERATION. BOTH THE PARTNERS TO THE FIRM HAV E ADMITTED DURING THE COURSE OF SEARCH THAT THE LAND OF AN EXTENT OF NEARLY 86.5 ACRES WAS PURCHASED AT A PRICE OF RS.7.10 PER ACRE, AND THAT THE AMOUNT RECORDED IN THE BOOKS WERE THE DOCUMENTED CONSIDERATION OF RS.1,25,00,000/ AND THAT THE BALANCE CONSIDE RATION OF RS.4,43,00,000/ - WAS PAID IN CASH. IN THIS REGARD, EACH OF THE PARTNER HAVE ADMITTED RS.2,21,50,000/ - TO BE THEIR UNACCOUNTED INVESTMENT IN MADDI LAND, WHICH WAS BY WAY OF THEIR CAPITAL CONTRIBUTION TO THE FIRM. THE RELEVANT STATEMENT RECORDED ON 12.09.2007 HAS BEEN EXTRACTED BY THE AO AT PARA 5 IN THE IMPUGNED ASSESSMENT ORDER. THE EXTRACT OF THE STATEMENT RECORDED FROM THE ASSESSEE ON 12.09.2007, RELEVANT FOR OUR DISCUSSION IS AS UNDER: Q.NO.25. AS PER YOUR ABOVE STATEMENT AFTER 'CONSIDERING YOUR SHARE, I.E 50%, YOUR INVESTMENT IN ABOVE LAND IN CASH COMES TO RS.2,21,50,000/ - . PLEASE EXPLAIN THE SOURCES FOR THE SAME. ANS: WE ARE NOT IN A POSITION TO EXPLAIN MY SOURCES. I REQUEST YOU TO GIVE ME TIME TO EXPLAIN THE SOURCES. HOWEVER, RIGHT NOW, AS NO BOOKS OF ACCOUNT ARE AVAILABLE WITH ME TO EXPLAIN THE SOURCES FOR RS.2,21,50,000/ - . I AM AGREEING THAT THIS RS.2,21,50,000/ - IS MY UNACCOUNTED INCOME. HOWEVER, I REQUEST YOU TO GIVE ME SOME TIME TO EXP LAIN THE SOURCES. Q.NO.28. I AM SHOWING YOU YOUR 'LEDGER ACCOUNT' IN CLASSIQUE FARMS AND ESTATES WHEREIN CASH PAID FOR LAND AT MADDI IS SHOWN AT RS.1,41,21,215/ - AND CASH PAID FOR 'LAND DEVELOPMENT CHARGES' IS SHOWN AT RS.57,50,000/ - WHICH TOTALLY ADDS UPT O RS.1,98,71,215/ - ONLY WHEREAS THE AMOUNT EXPENDED BY YOU IS PAID TO BE RS.5,68,00,000/ - ONLY. NOWHERE DOES THE BOOKS SHOW THE EXTRA AMOUNT OF RS.4,43,00,000/ - AND AS PER THE BOOKS ALSO THERE IS NO SUCH CASH BALANCE? WHAT IS YOUR EXPLANATION FOR THIS? AN S. THE EXTRA AMOUNT OF RS.4,43,00,000/ - WAS PAID OUT OF OUR INDIVIDUAL SOURCES. AS PARTNER, I HAVE INVESTED THIS EXTRA RS.2,21,50,000/ - FROM MY INDIVIDUAL SOURCES. Q.NO.31 WE HAVE SEARCHED YOUR HOUSE. WE HAVE SEARCHED YOUR OLD OFFICE PREMISES (FOUND VACAN T WITHOUT ANY FILES) AND ALSO YOUR NEW OFFICE PREMISES. WE ALSO CHECKED UP WITH YOUR AUDITOR REGARDING AVAILABILITY OF BOOKS OF ACCOUNT. BUT, NOWHERE NO BOOKS OF ACCOUNT RELATING TO YOUR INDIVIDUAL ACCOUNT OR YOUR SOLE PROPRIETARY CONCERN ARE 5 ITA NO. 28/VIZ/2014 ( R. GOVIND ) FOUND AND BY NO CHANCE/OR BY ANY OTHER ORAL OR DOCUMENTARY EVIDENCE YOU ARE ABLE TO SHOW YOUR SOURCES FOR THIS RS.2,21,50,000/ - . HENCE I ADMIT THAT THIS RS.2,21,50,000/ - IS MY UNACCOUNTED INVESTMENT IN MADDI LAND WHICH IS BOUGHT BY THE FIRM M/S.CLASSIQUE FARMS AND ESTA TES. Q.NO.32 DO YOU HAVE ANYTHING ELSE TO SAY? ANS: NO. NOTHING. I ADMIT THAT RS.2,21,50,000/ - IS MY UNACCOUNTED INVESTMENT FOR F.Y.2006 - 07 AND I AGREE TO PAY TAXES ON THE SAME. OTHER THAN THIS I DO NOT HAVE ANYTHING TO SAY. 7.8 AFTER GOING THROUGH THE SEARCH MATERIAL THE UNACCOUNTED INVESTMENT TOWARDS PURCHASE OF MADDI LAND WAS ARRIVED AT RS.2,32,61,450/ - IN THE HANDS OF EACH PARTNER. HOWEVER, THE ASSESSEE HAS ADMITTED ONLY RS.2,21,50,000/ - IN HIS STATEMENT RECORDED ON 12.09.2007 . FURTHER THE ASSESSSEE HAS FILED AN AFFIDAVIT DTD.24.11.2007 CONFIRMING THAT HI - , 'CD INCOME FOR THE F.Y.2006 - 07 WAS RS.2,33,50,000/ - AND WOULD PAY TAXES ON THE SAME WHILE FILING THE RETURN OF INCOME. 7.9 HOWEVER, THE ASSESS E E HAS NOT FILED RETURN OF INC OME AS PER DECLARATION. THE AO CALLED UPON THE ASSESSEE WHY THE UNACCOUNTED INVESTMENT OF RS.2,32,61,450/ - SHOULD NOT BE ASSESSED TO TAX BY LETTER DTD.25.08.2009. IN RESPONSE, THE AR FILED LETTER DTD.07.09.2009 STATING: 'THE ASSESSEE HAS INVESTED AN AMOUNT OF RS.2,81,00,000/ - IN THE ABOVE SAID FIRM AS ON 31.03.2007. IT IS ALSO OBSERVED FROM YOUR REMARKS THAT THE ASSESSEE HAS INVESTED AN UNACCOUNTED AMOUNT OF RS.2,32,61,450/ - IN THE ABOVE FIRM AND THE ASSESSEE HAS AGREED FOR RS.2,25,00,000/ - AS UNACCOUNTED I NCOME FOR THE A.Y.2007 - 08. HOWEVER, THIS FACT IS NOT TRUE SINCE DURING THE COURSE OF RECORDING THE STATEMENT U/S.132(4), THE ASSESSEE HAS CLEARLY MENTIONED THAT HE HAS ALSO RECEIVED ADVANCES FROM PARTIES AGAINST PROPERTIES HELD BY HIM AND HAS INVESTED THE SAME IN THE ABOVE FIRM. BUT THIS FACT WAS NOT MENTIONED ANYWHERE IN YOUR REMARKS. THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.1,45,00,000/ - FROM TWO PARTIES NAMELY MR.N.RAVI KUMAR AND MRS.K.BHANUMATHI, BOTH ADDRESSES ARE N.RAVI KUMAR, 501, SANKALP HEIGHTS AP ARTMENTS, D.NO.49 - 54 - 4, BALAYYA ASASTRY LAYOUT, SEETHAMMADHARA, VISAKHAPATNAM, DURING THE F.Y.2006 - 07 WHICH WAS UTIL IZED BY HIM FOR INVESTMENT IN THE ABOVE FI RM. THE PARTIES ARE WILLING TO DISP OSE BEFORE YOU ALONG WITH THEIR INCOME SOURCES. FROM THE BOOKS O F ACCOUNT MAINTAINED BY THE ASSESSEE AN 6 ITA NO. 28/VIZ/2014 ( R. GOVIND ) AMOUNT OF RS.1,15,00,000/ - HAS BEEN OFFERED AS UNDISCLOSED INCOME IN RESPECT OF INVESTMENT IN THE ABOVE FIRM.' 7.10 THUS, IN EFFECT THE ASSESSEE HAD MADE A CLAIM THAT HE HAD SOURCES TO EXPLAIN AN AMOUNT OF RS.1,45,0 0,000/ - IN REGARD TO THE INVESTMENTS MADE. THE CLAIM MADE WAS THAT HE HAD RECEIVED AN ADVANCE OF RS.1,40,00,000/ - FROM SMT.K.BHANUMATHI AND RS.5,00,000/ - FROM N.RAVI KUMAR. FROM THE PERUSAL OF THE ASSESSMENT ORDER, IT IS SEEN THAT THE AO HAD GIVEN VARIOUS OPPORTUNITIES TO THE ASSESSEE TO PROVE THE SAID CLAIM BY PRODUCING THE ABOVE SAID TWO PERSONS. BUT THE ASSESSEE FAILED TO PRODUCE THE SAID TWO PERSONS. THEY WERE NOT AVAILABLE AT THE ADDRESSES GIVEN BY THE ASSESSEE AND THE SUMMONS ISSUED BY THE DEPARTMENT RETUNED UNSERVED. IN THIS REGARD THE AO EXAMINED THE ASSESSEE ON 24.11.2009. THE ASSESSEE STATED IN THE DEPOSITION THAT HE HAD RECEIVED ADVANCE IN CASH FRO M RAVI KUMAR AND K.BHANUMATHI TO THE TUNE OF RS.1.45 CRORES, AND THAT THE ADVANCE WAS TAKEN AGAINST T HE SALE OF HIS SITE AT MANGAMARIPETA, VISAKHAPATNA M. BUT HE COULD NOT PRODUCE ANY IOTA OF EVIDENCE TI LL THE COMPLETION OF ASSESSMENT 7.11 AS ALREADY DISCUSSED, THE ASSESSEE HAD FILED THE CERTAIN ADDITIONAL EVIDENCE IN SUPPORT OF HIS CLAIM DURING THE APPELLATE PROCEEDINGS. THE AO WAS ASKED TO VERIFY THE CLAIM AND REPORT. THE AO IN HIS REPORT DTD.11.03.2013 HAS SUBMITTED THE MAIN ADDITION MADE DURING THE COURSE OF ASSESSMENT IS UNEXPLAINED INVESTMENT OF RS.1.45 CRORES. THE ABOVE ADDITION WAS MADE SINCE, THE ASSESSEE HAS NEITHER PRODUCED SMT. K.BHANUMATI, FROM WHOM THE ASSESSEE HAS STATED THAT HE HAS RECEIVED RS.1.45 CRORES NOR FURNISHED ANY MATERIAL EVIDENCE TO PROVE THAT HE HAS RECEIVED ADVANCE TO THE TUNE OF RS.1.45 CRORES. DURING THE COURSE OF A PPEAL PROCEEDINGS WITH THE C1T(A), VISAKHAPATNAM THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE VIZ COPY OF THE CONFIRMATION LETTER FOR LAND ADVANCE OF RS.1.40 CORES GIVEN BY SMT.K.BHANUMATHI TO R.GOVIND. TO VERIFY THE VERACITY OF THE ASSESSEE'S CLAIM THAT ADV ANCE WAS TAKEN FROM SMT.K.BHANUMATHI, A LETTER WAS ADDRESSED TO HER TO SUBMIT THE DETAILS OF THE ABOVE SAID INVESTMENT, SOURCES FOR THE SAME AND INCOME TAX RETURNS BY 17.12.2012. BUT THE LETTER WAS RETURNED UNSERVED. SRI R.GOVIND WAS ALSO INFORMED REPEATED LY ABOUT THE SAME AND ASKED TO PRODUCE THE NECESSARY INFORMATION BUT IN VAIN. 7 ITA NO. 28/VIZ/2014 ( R. GOVIND ) HENCE, DUE TO NON AVAILABILITY OF THE REQUIRED INFORMATION IT IS NOT POSSIBLE TO VERIFY THE ADMISSIBILITY AND MERITS OF THE ADDITIONAL EVIDENCE FILED BY SRI R.GOVIND'. 7.12 THUS IT COULD BE SEEN THAT EVEN DURING THE REMAND PROCEEDINGS THE APPELLANT COULD NOT PRODUCE THE SAID PARTIES FOR EXAMINATION BEFORE THE AO. THE LETTER ADDRESSED TO K.BHANUMATHI HAD BEEN RETURNED UNSERVED. I DO NOT FIND ANY MERIT IN THE PLEAS RAISED BY THE AP PELLANT THAT SUFFICIENT OPPORTUNITY WAS NOT GRANTED TO PROVE HIS CLAIM. I FIND THAT ENOUGH OPPORTUNITIES WERE GRANTED TO DISCHARGE THE SAME. THE AO IS JUSTIFIED IN DRAWING AN ADVERSE VIEW AS TO THE CLAIM OF ADVANCE FROM K.BNANUMATHI . 7.13 THE AR FILED PAP ER - BOOK AND WRITTEN SUBMISSIONS DURING THE HEARING ON 03.10.2013. IT WAS CONTENDED THAT THE AO DID NOT EVEN CONSIDER THE CONFIRMATION LETTER DTD.04.04.2013 AND THE RETURN OF INCOME FILED BY M.VISWA MOHAN BEFORE THE AUTHORITIES AS AN AFTERTHOUGHT. IN THIS R EGARD THE FOLLOWING CONTENTIONS WERE RAISED. A) IT IS QUITE CLEAR FROM THE STATEMENT RECORDED ON THE DAY OF THE SEARCH THAT THE ASSESSEE HAS NOT GIVEN ANY CATEGORICAL CONFESSION AS SUCH. WHAT ALL HE STATED WAS THAT HE WOULD VERIFY THE RECORDS AND EXPLAIN THE POSITION. TO THIS HE RESPONDED IN THE RETURN OF INCOME FILED WHEREIN HE OFFERED UNACCOUNTED INCOME OF RS.1.15 CR. THIS ASPECT HAS NOT BEEN APPRECIATED AND CONSIDERED BY THE LEARNED AO. B) IT IS VERY PERTAINING TO NOTE, AS CAN BE SEEN FROM THE REMAND REPORT THAT THE ASSESSING OFFICER HAS NOT NEGATED THE EVIDENCES FILED WITH REGARDS TO THE ADVANCE RECEIVED. THIS GOES TO PROVE THE CREDENTIALS OF THE ASSESSEE IN SO FAR AS THE EVIDENCES FURNISHED. C) THE ONLY REASON CITED BY THE AO, WHI'E NEGATING THE CLAIM IS THAT THE LETTER POSTED TO SMT.K.BHANUMATHI HAS BEEN RETURNED AS UNSERVED. THE SUBMISSION OF THE ASSESSEE IS THAT THIS BY ITSELF CANNOT BE SOLE REASON FOR MAKING SUCH HUGE ADDITION OF AS MUCH AS RS.1.40 CR. ESPECIALLY WHEN THE ASSESSEE HAS FURNISHED ALL THE EVID ENCES IN THIS REGARD WHICH ARE NOT DISPUTED NOR ADVERSELY COMMENTED BY THE AO . D) ONE MORE REASON CITED BY A O IS THAT, AS CAN BE SEEN FROM PARA - 4, IS THAT THE ASSESSEE DID NOT PRODUCE THE NECESSARY INFORMATION. WHEREAS, THE LEARNED ASSESSING OFFICER OUGHT T O HAVE KNOWN THAT THE EVIDENCES BASING ON WHICH THE PETITION UNDER RULE - 46A IS A VAI L ABLE WITH HIM WHICH ASPECT HAS BROUGHT INTO HIS NOTICE . T HIS MATTER HAS NOT BEEN EXAMINED BY A O INSTEAD MADE SWEEPING OBSERVATIONS WHILE REJECTING THE CLAIM. 8 ITA NO. 28/VIZ/2014 ( R. GOVIND ) 1.17. IN AS MUCH AS THE ADVANCE RECEIVED BY THE ASSESSEE IS PROVED BEYOND DOUBT AND IS SUPPORTED BY CONFIRMATION LETTER GIVEN BY K.BHANUMATHI COUPLED WITH AGREEMENT TO SELL, THEREFORE IT IS SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER IS UNWAR RANTED. 1.18. THE ASSESSEE WOULD LIKE TO BRING INTO THE NOTICE OF THE RESPECTED COMMISSIONER OF INCOME TAX (A) THAT THE ASSESSING OFFICER HAS MAINLY RELIED ON STATEMENT RECORDED DURING THE COURSE OF SEARCH ON THE ALLEGED ADMISSION. IN THIS REGARD THE ASSE SSEE SUBMITS THAT CBDT HAS ISSUED A CIRCULAR IN FILE NO.286/2/2003 DT.11 TH MARCH , 20 03. WHEREIN THE BOARD HAS INSTRUCTED THE OFFICERS OF THE DEPARTMENT, WHILE MAKING ADDITIONS NOT TO RELAY ON THE CONFESSION UNLESS THE SAME IS SUBSTANTIATED WITH INCRIMINATING MATERIAL. WHEREAS, IN SEVERAL CASES THE JUDICIARY HAS HELD THAT ADDITIONS CANNOT BE SUSTAINED MERELY ON THE BASIS OF CONFESSIONAL STATEMENT ALONE.' 7.14 AT THE OUTSET, THE PLEA RAISED THAT THE CONFIRMATION LETTER OF VISWA MOHAN DTD.04.04.201 3 & RETURN OF INCOME FILED BY HIM WAS NOT CONSIDERED BY THE A O IS UNTENABLE, AS THE CONFIRMATION LETTER DTD.04.04.2013 AND SUCH COPY OF RETURN OF INCOME WAS NOT FILED AS ADDITIONAL EVIDENCE IN THE PETITION DTD.27.03.2012 FILED UNDER RULE 46A. THESE PAPERS WERE FILED AS PART OF WRITTEN SUBMISSIONS IN THE PAPER - BOOK FLIED ON 03.10.2013. AS SUCH THESE TWO DOCUMENTS DESERVE TO BE REJECTED IN LIMINE. HOWEVER, THE VERACITY OF THESE DOCUMENTS ARE ALSO DISCUSSED IN THE SUCCEEDING PARAS. 7.15 THE ASSESSEE'S PRIMARY CONTENTION IS THAT HE HAD RECEIVED RS.1.40 CRORES AS ADVANCE FROM K.BHANUMATHI AGAINST SALE OF HIS IMMOVABLE PROPERTY AT MANGAMARIPETA VILLAGE. THE AR POINTED OUT THAT IN THE SWORN STATEMENT THE ASSESSEE HAD NOT GIVEN A CATEGORICAL CONFESSION AS HE HAD RE QUESTED TIME TO EXP L AIN THE SOURCES, AND THEREFORE THE ADDITION MADE MERELY ON THE CONFESSIONAL STATEMENT IS NOT JUSTIFIED. I HAVE CONSIDERED THE VARIOUS PLEAS RAISED. 7.16 AT THE OUTSET, THE SEARCH OPERATION TOOK PLACE ON 12.09.2007. IN THE SWORN STATEMENT RECORDED ON 12.09.2007, THE ASSESSEE HAS NOT STATED ANYTHING ABOUT THE ADVANCE RECEIVED FROM K.BHANUMATHI. IT IS SEEN FROM THE STATEMENT THAT HE HAD REQUESTED TIME TO EXPLAIN THE SOURCES BUT NO EXPLANATION WAS GIVEN WITHIN REASONABLE TIME. FURTHE R, I DO NOT FIND ANY REASONABLE JUSTIFICATION FOR NOT DISCLOSING THE AVAILING OF ADVANCE FROM K.BHANUMATHI DURING THE SEARCH PROCEEDINGS OR IMMEDIATELY THEREAFTER. THE AMOUNT IS NOT TOO SMALL TO BE FORGOTTEN OR IGNORED. 7.17 IT IS SEEN THAT SUBSEQUENTLY O N 24.11.2007 I.E AFTER NEARLY TWO MONTHS FROM THE DATE OF SEARCH THE ASSESSEE HAD FILED AN AFFIDAVIT 9 ITA NO. 28/VIZ/2014 ( R. GOVIND ) CONFIRMING THAT HIS UNACCOUNTED INCOME WAS RS.2,33,50,000/ - AND WOULD PAY TAXES ON THE SAME. EVEN AT THAT JUNCTURE, THE ASSESSEE HAS NOT REVEALED ANY INFOR MATION OR WHISPERED ABOUT THE ADVANCE SAID TO BE RECEIVED FROM K.BHANUMATHI. ON THE OTHER HAND, HE HAD SWORN AND CONFIRMED THAT HIS UNEXPLAINED INCOME WAS RS.2,33,50,000/ - AND HE WOULD PAY TAXES ON THEM. IT IS ONLY ON 07.09.2009, NEARLY TWO YEARS FROM THE DATE OF SEARCH THE ASSESSEE CHOSE TO MAKE A CLAIM THAT HE HAD RECEIVED ADVANCE FROM K.BHANUMATHI AGAINST SALE OF HIS SITE. EVEN AT THAT JUNCTURE, THE ASSESSEE HAD NOT FILED ANY DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CLAIM. THE CLAIM WAS ALSO NOT PROVED BY PRODUCING THE PARTY. IT IS PERTINENT TO NOTE, THAT EVEN AFTER TWO YEARS FROM THE DATE OF SEARCH THE ASSESSEE COULD NOT PRODUCE BEFORE THE ASSESSING AUTHORITY THE SALE AGREEMENT PURPORTEDLY SAID TO BE ENTERED ON 23RDSEPTEMBER, 2006 WITH K.BHANUMATHI AND ON THE BASIS OF WHICH THE CLAIM WAS MADE. NO EXPLANATION WAS GIVEN AS TO WHY THE SAID SALE AGREEMENT COULD NOT BE PRODUCED DURING THE SEARCH PROCEEDINGS OR ASSESSMENT PROCEEDINGS. THUS THE VERACITY OF SUCH A TRANSACTION IS VERY MUCH SHROUDED IN DOUBT. 7.18 T HE AR ARGUED THAT ON EARLIER OCCASION, THE ASSESSEE HAD BORROWED MONEY FROM THE SAID K.BHANUMATHI AND SUCH TRANSACTION IS RECORDED IN THE ASSESSEE'S BOOKS. IT WAS CONTENDED THAT IT IS NOT THAT ASSESSEE HAD MADE A MAKE - BELIEVE ARRAN G EMENT I HAVE CLAIMED THI S PLEA . IT IS SEEN THAT ON EARLIER OCCASION THE ASSESSEE HAD RECEIVED CERTAIN SUM FROM K.BHANUMATHI AND IT IS SEEN THAT AMOUNTS WERE ADVANCED ONLY BY WAY OF CHEQUE. BEING SO, IT IS NOT UNDERSTANDABLE, WHY THE SO CALLED ADVANCE FOR PURCHASE OF PROPERTY SHOU LD BE TOTALLY A CASH TRANSACTION WHEN SUCH A HUGE AMOUNT IS INVOLVED. AND AGAIN WHY THE SAID BHANUMATHI SHOULD NOT COME FORWARD TO EXPLAIN THE TRANSACTION TO DEPARTMENT IF IT WERE GENUINE. THUS THE GENUINENESS OF THE TRANSACTION REMAINS IN DOUBT. 7.19 I H AVE GONE THROUGH THE COPY OF CONFIRMATION LETTER DTD.27.01.2010 SAID O BE SIGNED BY K.BHANUMATHI. IN THIS LETTER IT IS STATED THAT SHE HAS GIVEN AN ADVANCE OF RS.1,40,00,000/ - TO THE ASSESSEE FOR HIS B EACH SITE SALE, AND THE AMOUNT W AS GIVEN ON BEHALF OF H ER SON - IN - LAW VISWA MOHAN, AND WAS GIVEN OUT OF NRI FUNDS RELATED TO HER SON - IN - LAW AND FOR THE PURPOSE COPY OF ICICI BANK STATEMENT WAS ENCLOSED. HOWEVER THE BANK STATEMENT WAS NOT ENCLOSED IN THE PETITION FOR ADDITIONAL EVIDENCE BUT WAS FILED ALONG WITH PAPER - BOOK ON 03.10.2008. SIMILAR CONFIRMATION LETTER DTD.27 TH JANUARY, 2010 WAS FILED FROM HER SON - IN - LAW VISHWA MOHAN. AT THE OUTSET IT IS TO BE NOTED THAT THE CONFIRMATION LETTERS ARE DTD.27.01.2010, WHICH IS AFTER THE COMPLETION O F THE ASSESSMENT. THIS LETTER IS PURPORTEDLY ADDRESSED TO THE D CIT , CENTRAL CIRCLE - 1, VISAKHAPATNAM, BUT IT IS NOT CLARIFIED WHY THIS LETTER WAS NOT POSTED TO HIM DIRECTLY. THERE IS NO MENTION IN THIS LETTER AS TO THE DATES ON WHICH THE ADVANCES WERE MADE, AND ON WHICH DATES TH E AMOUNTS WERE WITHDRAWN FROM THE BANK ACCOUNT TO MAKE THE IMPUGNED 10 ITA NO. 28/VIZ/2014 ( R. GOVIND ) ADVANCES. IT IS PERTINENT TO NOTE THAT EVEN THE ASSESSEE DID NOT FURNISH INFORMATION AS TO THE DATES ON WHICH THE AMOUNT WAS RECEIVED BY HIM FROM THE SAID K.BHANUMATHI. IT IS RELEVANT TO N OTE THAT IN HIS STATEMENT RECORDED ON 24.11.2009 BY THE AO, HE HAS DEPOSED THAT THE AMOUNTS WERE RECEIVED FROM APRIL 2006 TO MAY 2007. A PERUSAL OF BANK STATEMENT HELD IN THE NAME OF VISHWA MOHAN WITH ICICI BANK LTD HYDERABAD, THERE WERE CASH WITHDRAWALS I N SEPTEMBER, 2005, FOR WHICH BCCT WAS DEDUCTED. THERE WAS NO WITHDRAWAL DURING THE WHOLE OF THE YEAR 2006. COPY OF THE STATEMENT WAS NOT SUBMITTED FOR THE PE RIOD 2007. PRIMA - FACIE THERE IS NO WITHDRAWAL DURING 2006 - 07 TO SUPPORT THE CLAIM OF THE ASSESSEE. EVEN OTHERWISE, NEITHER VISHWA MOHAN NOR THE SAID BHANUMATHI HAVE SPECIFIED THE WITHDRAWALS FROM WHICH THE MONEY WAS SAID TO BE ADVANCED TO THE ASSESSEE. THE RETURN OF INCOME FILED BY VISWA MOHAN, SON - IN - LAW OF K.BHANUMATHI DOES NOT SEEK TO EXPLAIN ANYTHIN G THOUGH RELIED ON BY THE ASSESSEE. THE SAID VISHWA MOHAN HAS SHOWN INCOME FROM HOUSE PROPERTY AND CAPITAL GAINS. HE HAS NOT DECLARED ANY INFORMATION ABOUT THE SO - CALLED ADVANCE MADE TO THE ASSESSEE AND THEREFORE SUCH RETURN DOES NOT IN ANY WAY SUPPORT THE ASSESSEE'S CASE. THEREFORE THE CONFIRMATION LETTER OF K.BHANUMATHI, VISWA MOHAN & THE COPY OF THE RETURN FILED BY VISWA MOHAN DO NOT IN ANY WAY PROVE THE ASSESSEE'S CONTENTION. 7.20 THE AR ALSO REFERRED TO COPY OF THE MAIL COVER FILED IN THE PAPER - BOOK T O SHOW THAT THE MAIL WAS RECEIVED FROM THE US. A PERUSAL OF WHICH SHOWS IT WAS STAMPED IN APRIL, 2010. THE CONFIRMATION LETTERS ARE DATED 27 TH JAN., 2010. FURTHER THE MAIL HAS BEEN SENT TO SOME ADDRESS IN HYDERABAD, THE COMPLETE INFORMATION OF ADDRESSEE IS NOT VISIBLE. ALL THESE DISCREPANCIES DO NOT LEND ANY CREDENCE TO THE ASSESSEE'S CASE. 7.21. IF A NON - RESIDENT WANTS TO MAKE AN INVESTMENT IN INDIA IN IMMOVABLE, IT IS CLEAR WHY SUCH AMOUNTS SHOULD BE ADVANCED IN CASH THROUGH AN UNREGISTERED DOCUMENT IF THE TRANSACTION IS GENUINE. 7.22 THE AR HAD ALSO CONTENDED THAT THE ADDITION SHOULD NOT BE MADE ON MERE ADMISSION AND RELIED ON CBDT CIRCULAR NO. 286/2003. I DO NOT FIND ANY MERIT IN THE CONTENTION. IT IS ON THE BASIS OF INCRIM IN ATING MATERIALS FOUND DURING THE SEARCH AS TO UNEXPLAINED INVESTMENTS THAT THE ASSESSEE HAD ADMITTED ABOUT HIS UNEXPLAINED INVESTMENT. THE OTHER PARTNERS HAVE ALSO ADMITTED TO THE UNEXPLAINED INVESTMENT IN THE LIGHT OF INCRIMINATING MATERIAL SEIZED. HENCE, THERE IS NO MERIT IN THE ARGUMENT THAT IMPUGNED ADDITION WAS MADE MERELY ON THE BASIS OF ADMISSION AND WAS NOT VALID IN LAW. 7.23 THE NON - MENTION OF THE TRANSACTION WITH K.BHANUMATHI DURING THE SEARCH PROCEEDINGS OR IMMEDIATELY THEREAFTER, THE FAILURE OF THE ASSESSEE TO PRODUCE THE SAID BHANUMATHI, THE FAILURE OF SAID BHANUMATHI TO APPEAR TO THE SUMMON ISSUED, THE ABSENCE OF DETAILS AS TO THE DATES ON 11 ITA NO. 28/VIZ/2014 ( R. GOVIND ) WHICH ADVANCES MADE WITH REFERENCE TO DATE OF WITHDRAWAL, THE ABSENCE OF ANY WITHDRAWAL IN THE SAID BANK S TATEMENT THROUGHOUT THE YEAR 2006, THE ABSENCE OF ANY INFORMATION IN THE RETURN FILED BY VISWA MOHAN AS TO THE ALLEGED ADVANCE, ALL GO TO SHOW THAT THE PURPORTED ADVANCE FROM K.BHANUMATHI IS ONLY AN AFTERTHOUGHT SEEKING TO EXPLAIN THE AVAILABILITY OF SOURC E FOR THE INVESTMENT MADE. THE SO - CALLED TRANSACTION OF ADVANCE OF MONEY AGAINST SALE OF PROPERTY DO NOT APPEAR TO BE GENUINE FROM THE DETAILS FILED. HENCE I AM OF THE VIEW THAT THE AO IS JUSTIFIED IN REJECTING THE ASSESSEE'S CLAIM AND MAKING THE IMPUGNED ADDITION OF RS.1,40,00,000/ - TOWARDS UNEXPLAINED INVESTMENT. THE IMPUGNED ADDITION MADE IS CONFIRMED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR A.Y 2007 - 08 IS DISMISSED. 4 . ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 5. LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSING OFFICER AS WELL AS LD. CIT(A) WITHOUT CONSIDERING THE CONFIRMATION LETTERS OF MRS. K.BHANUMATHI AND SRI M. VISWA MOHAN AND ALSO COPY OF UNREGISTERED SALE AGREEMENT DATED 23/09/2006 , A DDITION WAS MADE ONLY ON THE BASIS OF THE STATEMENT RECORDED DURING THE COURSE OF SEARCH UNDER SECTION 132 (4) . HE FURTHER SUBMITTED THAT ADDITION CANNOT BE MADE ONLY ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SEARCH UNDER SECTION 132(4) , U NLESS THERE IS A SUBSTANTIAL EVIDENCE TO SHOW THAT THERE IS AN UNACCOUNTED MONEY IN THE HANDS OF THE ASSESSEE AND SUBMITTED THAT ADDITION MA DE B Y THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) MAY BE DELETED. IN SUPPORT OF HIS 12 ITA NO. 28/VIZ/2014 ( R. GOVIND ) PLEA, HE RELIED ON THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. CHEMICAL BIOTECH LTD. IN ITA NO. 99 & 100/VIZ/2012, DATED 12/01/2017 . 6 . ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS SUBMITTED THAT ASSESSEE DURING T HE COURSE OF SEARCH, A SWORN STATEMENT WAS RECORDED ON 12/09/2007, WHEREIN HE ADMITTED HIS SHARE OF UNEXPLAINED INVESTMENT OF RS. 2,21,50,000/ - FOR THE F INANCIAL Y EAR 2006 - 07. THE ASSESSEE HAS NOT MENTIONED ANYTHING ABOUT THE ADVANCE RECEIVED FROM MRS. K.BHANUMATHI IN RESPECT OF SALE OF PROPERTY. SUBSEQUENTLY, ON 24/11/2007 I.E. AFTER TWO MONTHS FROM THE DATE OF SEARCH, THE ASSESSEE FILED AN AFFIDAVIT CONFIRMING THAT HIS UNACCOUNTED INCOME WAS RS. 2,33,50,000/ - AND HE WOULD PAY TAXES ON THE SAME . NO RE FERENCE IS MADE TO THE AMOUNTS RECEIVED FROM MRS. K.BHANUMATHI, IT IS ONLY ON 07/09/2009, NEARLY TWO YEARS FROM THE DATE OF SEARCH , THE ASSESSEE CHOSE TO MAKE A CLAIM THAT HE HAD RECEIVED ADVANCE FROM MRS. K.BHANUMATHI. IT IS ONLY AN AFTERTHOUGHT AND THE SAME CANNOT BE CONSIDERED AS EVIDENCE TO DELETE THE ADDITION MADE BY THE ASSESSING OFFICER. HE FURTHER SUBMITTED THAT ASSESSEE HAS ALSO NOT ABLE TO SUBSTANTIATE THAT HE HAS REC E IVED AMOUNT FROM MRS.K.BHANUMATHI AND ALSO NOT FILED ANY EVIDENCE BEFORE THE 13 ITA NO. 28/VIZ/2014 ( R. GOVIND ) A SSESSING OFFICER . THEREFORE, THE ORDER PASSED BY THE LD. CIT(A) MAY BE UPHELD. 7 . WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW. 8 . A SEARCH OPERATION WAS CONDUCTED UNDER SECTION 132 OF THE ACT IN THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 12/09/2007 AND ALSO IN THE MVV GROUP. DURING THE COURSE OF SEARCH, A SWORN STATEMENT OF THE ASSESSEE WAS RECORDED , WHEREIN HE ADMITTED THAT HIS UN E XPL A INED INVESTMENT IS OF RS. 2,21,50,000/ - AND HE FILED RETURN OF INCOME BY ADMITTING TOTAL INCOME OF RS. 1,50,91,490/ - ON 21/08/2009 . SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED NOTICE S UNDER SECTION 143(2) & 142(1) TO THE ASSESSEE ON 25/08/2009 FOR CALL ING EXPLANATION AS TO WHY THE QUANTIFIED UNACCOUNTED INVESTMENT OF RS. 2,32, 61,450/ - SHOULD NOT BE ASSESSED AS INCOME FOR ASSESSMENT YEAR 2007 - 08 , ON THE BASIS OF THE STATEMENT GIVEN ON 12/09/2007 AND ALSO THE AFFIDAVIT FILED DATED 24/11/2007. IN RESPONSE TO THE ABOVE, THE ASSESSEE BY FILING A LETTER DATED 07/09/2009 STAT ED THAT HE HAS RECEIVED AN AMOUNT OF RS. 1,45,00,000/ - FROM TWO PARTIES NAMELY; MRS.K.BHANUMATHI & SRI N. RAVI KUMAR AND THE ADDRESSES OF THE PARTIES ARE ALSO GIVEN . THE ASSESSING OFFICER BY CONSIDERING THE 14 ITA NO. 28/VIZ/2014 ( R. GOVIND ) EXPLANATION GIVEN BY THE ASSESSEE, ISSUED SUMMONS TO BOTH THE PARTIES, WHICH WERE RETURNED UN - SERVED WITH AN ENDORSEMENT THAT THE ADDRESSES GIVEN , ARE NEWLY CONSTRUCTED APARTMENTS AND NO SUCH PERSONS ARE RESIDI NG IN SUCH PLOT S . AGAIN A LETTER ADDRESSED TO THE ASSESSEE DATED 01/10/2009 ASKING HIM TO PRODUCE THE TWO PERSONS BEFORE THE UNDERSIGNED ON 12/10/2009 , WHICH WAS FOLLOWED BY ANOTHER LETTER DATED 30/10/20 09 , BUT NO RESPONSE FROM T HE ASSESSEE . ON 11/11/20 09, THE ASSESSEE FILED A LETTER , WHEREIN HE FURNISHED NEW ADDRESSES OF THE ABOVE TWO PARTIES. THE ASSESSING OFFICER AGAIN ISSUED SUMMONS UNDER SECTION 131, DATED 12/11/2009 TO ABOVE TWO PARTIES , WHICH WERE RETURNED UN - SERVED . SUBSEQUENTLY, THE ASSESSIN G OFFICER HAS ISSUED SUMMONS TO THE ASSESSEE UNDER SECTION 131 ON 14/11/2009 TO APPEA R BEFORE HIM ON 24/11/2009, IN RESPONSE TO WHICH, THE ASSESSEE HAD APPEARED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN HIS UNACCOUN TED INVESTMENT IN M/S. CLASSIQUE FARMS & ESTATES AS QUANTIFIED AT RS. 2,32,61,450/ - , OUT OF WHICH , HE ADMITTED AN AMOUNT OF RS. 2,21,50,000/ - AS UNACCOUNTED INVESTMENT . THE ASSESSEE H A S SUBMITTED BEFORE THE ASSESSING OFFICER ABOUT THE SOURCE OF INVESTMENT IN RESPECT OF RS. 1.45 CRORES THAT HE RECEIVED ADVANCE COLLECTIVELY FROM MR. N. RAVI KUMAR & MRS.K.BHANUMATHI. 15 ITA NO. 28/VIZ/2014 ( R. GOVIND ) THE ASSESSING OFFICER ASKED THE ASSESSEE ABOUT THE DATE OF RECEIPT, MODE OF RECEIPT , REASONS FOR THE ADVANCE TAKEN AND WHER E MONEY WAS RECEIVED AND ANY PROOF THERE OF. IT IS SUBMITTED THAT THE AMOUNT WAS NOT RECEIVED IN ONE TIME, WHICH WAS STARTED FROM APRIL, 2006 TILL MAY, 2007 AND MONEY WAS RECEIVED BY WAY OF CASH. THIS ADVANCE WAS TAKEN AGAINST THE SALE OF SITE AT MANGAMAR IPETA, VISAKHAPATNAM . IT IS FURTHER SUBMITTED THAT UNREGISTERED AGREEMENT OF SALE IS AVAILABLE WITH MRS.K.BHANUMATHI , NOW SHE IS NOT AVAILABLE. IT IS FURTHER SUBMITTED THAT THE SAME MAY BE PRODUCED AFTER SOME DAYS. THE ASSESSING OFFICER ASKED THE ASSESS EE TO PRODUCE BOTH THE PARTIES, WHO ARE ADVANCED MONEY TO THE ASSESSEE. THE ASSESSING OFFICER HAS GIVEN VARIOUS OPPORTUNITIES TO THE ASSESSEE , BUT OF NO AVAIL . EVEN, ASSESSEE COULD NOT FURNISH ANY EVIDENCE WITH REGARD TO THE ADVANCE OF RS.1,45,00,000/ - RECEIVED FROM BOTH THE PARTIES. BEFORE THE ASSESSING OFFICER, THE ASSESSEE BY FIL ING A LETTER ON 24/11/2007 ASKED SOME MORE OPPORTUNI TI ES TO SUBSTANTIATE HIS CASE AND ALSO PROMISED TO PRODUCE BOTH THE PARTIES BEFORE HIM . THE ASSESSING OFFICER HAS GIVEN O PPORTUNITY TO THE ASSESSEE TO PRODUCE THE PARTIES , HOWEVER, THE ASSESSEE COULD NOT PRODUCE THEM. HE ONLY FILED A LETTER ON 10/12/2009 AND SUBMITTED THAT RS.1.4 0 CRORES WAS RECEIVED FROM MRS.K.BHANUMATHI, WHO RESIDES 16 ITA NO. 28/VIZ/2014 ( R. GOVIND ) AT GUNTUR AND FREQUENTLY VISITS HER DAU GHTER AND SON - IN - LAW, WHO ARE RESIDING IN US, BUT NOT FILED ANY EVIDENCE IN THIS REGARD . IN EARLIER STATEMENTS, IT IS SUBMITTED BEFORE THE ASSESSING OFFICER THAT HE RECEIVED FUNDS FROM MRS.K.BHANUMATHI & MR. N. RAVI KUMAR. NOW ASSESSEE SAYS THAT HE HAS RE CEIVED RS. 1.4 0 CRORES ONLY FROM MRS.K.BHANUMATHI. THEREFORE, THE ASSESSING OFFICER BY CONSIDERING THE FACTS AND ALSO THE STATEMENT GIVEN BY THE ASSESSEE UNDER SECTION 132(4) DATED 12/09/2007, HE ADDED THE UNEXPLAINED INVESTMENT OF RS. 1.45 CRORES IN THE H ANDS OF THE ASSESSEE. 9. ON APPEAL BEFOR E THE LD. CIT(A), THE ASSESSEE HAS FILED A PETITION DATED 27/03/2012 FOR ADMISSION OF ADDITIONAL EVIDENCE, COPY OF WHICH IS PLACED AT PAGE NOS. 21 TO 48 IN PAPER BOOK. THE LD. CIT(A) HAS ADMITTED THE SAME UNDER RULE 46A AND FORWARDED TO THE ASSESSING OFFICER FOR HIS REMAND REPORT . THE ASSESSING OFFICER HAS FILED A REMAND REPORT BEFORE THE LD. CIT(A) ON 11/03/2013. DURING THE COURSE OF REMAND PROCEEDINGS BEFORE THE AS SESSING OFFICER, THE ASSESSEE IS NOT ABLE TO PRODUCE MRS.K.BHANUMATHI . WE FIND THAT DURING THE COURSE OF REMAND PROCEEDINGS, THE ASSESSING OFFICER HAS ADDRESSED A LETTER TO MRS.K.BHANUMATHI TO APPEAR BEFORE HIM, HOWEVER, LETTER WAS RETURNED UN - SERVED AND THE SAME WAS INFORMED TO THE ASSESSEE 17 ITA NO. 28/VIZ/2014 ( R. GOVIND ) TO PRODUCE MRS.K.BHANUMATHI. HOWEVER, THE ASSESSEE HAS NOT PRODUCED MRS.K.BHANUMATHI BEFORE THE ASSESSING OFFICER. THEREFORE, THE ASSESSING OFFICER HAS SUBMITTED REMAND REPORT TO THE LD. CIT(A) THAT DUE TO NON - A VAILABILITY OF REQUIRED INFORMATION, IT IS NO POSSIBLE TO VERIFY THE ADMISSIBILITY OF THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. THE LD. CIT(A) HAS CONSIDERED THE SAME AND OBSERVED THAT THE SWORN STATEMENT RECORDED ON 12/09/2007, THE ASSESSEE HAS NOT STATED ANYTHING ABOUT THE ADVANCE RECEIVED FROM MRS.K.BHANUMATHI. I N THE AFFIDAVIT DATED 24/11/2007 ALSO , HE ONLY CONFIRM ED THAT HIS UNACCOUNTED INCOME OF RS. RS. 2,33,50,000/ - AND SUBMITTED THAT HE WOULD PAY THE TAXES THEREON. EVEN AT THIS JUNCTURE, HE HAS NOT REVEALED ABOUT THE AMOU N T REC E IVED FROM MRS.K.BHANUMATHI. IT IS ONLY ON 07/09/2009 , NEAR ABOUT TWO YEARS FROM THE DATE OF SEARCH, THE ASSESSEE HAS CHOSEN TO MAKE CLAIM THAT HE HAS RECEIVED THE ADVANCE FROM MRS.K.BHANUMATHI AGAINST THE SALE OF HIS SITE. EVEN ASSESSEE HAS NOT FILED ANY DOCUMENTARY EVIDENCE TO SUPPORT HIS CLAIM. EVEN BEFO RE THE LD. CIT(A), THE ASSESSEE HAS NOT EXPLAINED WHY THE UNREGISTERED AGREEMENT COPY DATED 23/09/2006 NOT FILED BEFORE THE ASSESSING OFFICER. FURTHER, THE LD. CIT(A) HAS GIVEN A FINDING THAT THE ASSESSEES STATEMENT IS RECORDED ON 24/11/2007 BY THE ASSESS ING OFFICER, WHEREIN HE DEPOSED THAT THE AMOUNTS 18 ITA NO. 28/VIZ/2014 ( R. GOVIND ) RECEIVED FROM APRIL, 2006 TILL MAY, 2007. A PERUSAL OF THE BANK STATEMENT HELD IN THE NAME OF MR. VISHWA MOHAM WITH ICICI BANK LTD., HYDERABAD, THERE WERE NO CASH WITHDRAW A LS IN SEPTEMBER, 2005, FOR WHICH B CCT WAS DEDUCTED. THERE W ERE NO WITHDRAWALS DURING THE WHOLE OF THE YEAR 2006. AS PER THE BANK STATEMENT , THERE W ERE NO WITHDRAWAL S DURING 2006 - 07 TO SUPPORT THE CLAIM OF THE ASSESSEE. HE ALSO POINTED OUT THAT EVEN IN THE BANK STATEMENTS MR. M. VISWA MOHAN & MRS.K.BHANUMATHI THERE WERE NO WITHDRAWALS TO GIVE ADVANCE TO THE ASSESSEE. HE FURTHER POINTED OUT THAT EVEN FROM THE RETURN FILED BY MR. M. VISWA MOHAN, HE HAS NOT DECLARED ANY INFORMATION ABOUT THE MONEY ADVANCED TO THE ASSESSEE. THEREFOR E, THE LD. CIT(A) CAME TO A CONCLUSION THAT THE CONFIRMATION LETTERS GIVEN BY MRS.K.BHANUMATHI AND M. VISWA MOHAN ARE NO WAY TO PROVE THE CONTENTION OF THE ASSESSEE. ACCORDINGLY, HE CONFIRMED THE ADDITION OF RS. 1.40 CRORES AS UNEXPLAINED INVESTMENT IN TH E HANDS OF THE ASSESSEE. WE FIND FROM THE ASSESSEE S STATEMENT RECORDED ON 12/09/2007 THAT HE ADMITTED HIS UNACCOUNTED SHARE OF INVESTMENT IN THE PROPERTY IS OF RS. 2,21,50,000/ - . THERE IS NO REFERENCE OF ADVANCE RECEIVED FROM MRS. K.BHANUMATHI. SUBSEQUENTLY, ON 24/11/2007 NEARLY TWO MONTH S FROM THE DATE OF SEARCH, HE FILED AN AFFIDAVIT STATING THAT HIS UNACCOUNTED INCOME 19 ITA NO. 28/VIZ/2014 ( R. GOVIND ) WAS RS. RS. 2,33,50,000/ - AND HE WOULD PAY TAXES THEREON . THE ASSESSEE ON 07/09/2009 NEARLY TWO YEARS FROM THE SEARCH, HE CLAIMED THAT HE HAD RECEIVED ADVANCE FROM MRS.K.BHANUMATHI AND MR. N. RAVI KUMAR COLLECTIVELY OF RS.1.45 CRORES IN RESPECT OF SALE OF PROPERTY. IT IS NOT CLEAR FROM HIS STATEMENT THAT WHAT IS THE AMOUNT RECEIVED FROM MRS.K.BHANUMATHI AND MR. N. RAVI KUMAR. IT IS ONLY SUBMITTED THAT HE HAS RECEIVED ADVANCES COLLECTIVELY FROM BOTH THE PARTIES. SUBSEQUENTLY, HE ONLY CONFINED TO MRS. K.BHANUMATHI THAT HE RECEIVED RS. 1.4 0 CRORES FROM HER , BUT NOT SUBMITTED ANYTHING WITH REFERENCE TO MR. N. RAVI KU MAR. BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT AN AMOUNT RS. 1.4 0 CRORES WAS RECEIVED ONLY FROM MRS. K.BHANUMATHI , BUT HE FILED CONFIRMATION LETTERS FROM MRS. K.BHANUMATHI AND SRI M. VISWA MOHAN (PAPER BOOK AT PAGE NOS. 26 & 27) BOTH DATED 27/01/2007 . EVEN BEFORE THE ASSESSING OFFICER, HE HAS NOT MADE A MENTION THAT HE RECEIVED ADVANCE FROM MRS.K.BHANUMATHI AND MR. N. RAVI KUMAR IN RESPECT OF SALE OF IMMOVABLE PROPERTY . HE HAS ALSO NOT SPECIFIED THE DETAILS OF THE SCHEDULED PROPERTY, DATE OF UNREGISTERED SALE AGREEMENT AND TOTAL CONSIDERATION. FROM THE PERUSAL OF THE UNREGISTERED SALE AGREEMENT , (PAPER BOOK AT PAGE NOS. 21) IT APPEARS THAT ONE SRI KUNA ANNAJI RAO, GPA HOLDER OF THE ASSESSEE ENTERED INTO UNREGISTERED AGREEMENT WITH 20 ITA NO. 28/VIZ/2014 ( R. GOVIND ) MRS.K.BHANU MATHI. THESE FACTS WERE NOT STATED BEFORE THE ASSESSING OFFICER. THE ASSESSEE FOR THE FIRST TIME, HE TOOK PLEA BY RETRACTING HIS STATEMENT RECORDED ON 07/09/2009 SUBMITTED THAT HE HAS RECEIVED ADVANCE FROM MRS.K.BHANUMATHI AND MR. N. RAVI KUMAR OF RS. 1. 45 CRORES . WHEN THE ASSESSING OFFICER ASKED THE ASSESSEE WHY YOU HA VE NOT SUBMITTED IN THE SWORN STATEMENT RECOREDED ON 12/09/2007, HE HAS NO EXPLANATION. EVEN ASSESSEE HAS NOT FILED THE SALE UNREGISTERED AGREEMENT PURPORTED TO BE ENTERED BY THE ASSESSEE DATED 23/09/2006 BEFORE THE ASSESSING OFFICER. THE ASSESSEE HAS FILED THE SALE UNREGISTERED AGREEMENT BEFORE THE LD. CIT(A) ON 03/10/2013 AS AN ADDITIONAL EVIDENCE AND REQUESTED FOR ADMISSION OF THE SAME. THE ASSESSEE HAS FILED COPY OF UNREGISTERED AGREEMENT OF SALE PURPORTED TO HAVE BEEN ENTERED BY THE ASSESSEE BEFORE THE LD.CIT(A) NEAR ABOUT TWO YEARS AND THREE MONTHS. WHEN WE SPECIFICALLY ASKED THE ASSESSEE, IF YOU HAVE ENTERED INTO UNREGISTERED AGREEMENT WITH MRS.K.BHANUMATHI ON 23/09/2006, WHY THIS HAS NOT BEEN FIL ED BEFORE THE ASSESSING OFFICER AND WHY AFTER SUCH A HUG E DELAY IT WAS SUBMITTED BEFORE THE LD. CIT(A). THE ASSESSEE IS NOT ABLE TO EXPLAIN THE SAME EXCEPT STATING THAT BUYER FREQUENTLY VISITS TO USA TO MEET HER DAUGHTER AND SON - IN - LA W. DURING THE COURSE OF HEARING , WE SPECIFICALLY ASKED THE ASSESSEE WHAT WAS HAPPENED SUBSEQUENTLY 21 ITA NO. 28/VIZ/2014 ( R. GOVIND ) TO THE SALE UNREGISTERED AGREEMENT IN RESPECT OF SCHEDULED PROPERTY, THE ASSESSEES COUNSEL HAS SUBMITTED THAT NOTHING IS HAPPENED. IT SHOWS THAT THE ASSES SEE NEITHER RETURNED THE AMOUNT NOR EXECUTED THE SALE DEED. IF SALE UNREGISTERED AGREEMENT IS A GENUINE ONE, THE ASSESSEE HAS TO EXECUTE THE SALE DEED AS PER THE UNREGISTERED AGREEMENT DATED 23/09/2006 . NOW WE ARE IN 2018 . FROM THE DATE OF UNREGISTERED AGREEMENT , NOW THE TIME HAS PASSED NEAR ABOUT 12 YEARS , IF THE TRANSACTION IS A GENUINE TRANSACTION, THE ASSESSEE EITHER REPAY THE SAME OR EXECUTE THE SALE DEED. THE ASSESSEE NEITHER ESTABLISH ED TH E REPA Y MENT NOR EXECUTED THE SALE DEED. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT THE ENTIRE TRANSACTION IS NOT A GENUINE TRANSACTION AND IT IS ONLY AN AFTERTHOUGHT . THEREFORE, T H E UNREGISTERED SALE AGREEMENT DATED 23/09/2006 CANNOT BE BELIEVED AND THAT THE ASSESSEE HAS RECEIVED ADVANCE FROM MRS.K.BHANUMATHI. 10 . SO FAR AS CONFIRMATION LETTER ISSUED BY MRS.K.BHANUMATHI, DATED 27/01/2010 (PAPER BOOK AT PAGE NO. 26) SHE STATED THAT SHE HAS ADVANCED AN AMOUNT OF RS. 1.45 CRORES TO THE ASSESSEE ON BEHALF OF MR. M. VISWA MOHAN, WHO IS NON - RESIDENT AND THE AMOUNT DRAWN FROM NRI FUNDS RELATING TO HER SON - IN - LAW. TO THIS EFFECT, THE LD. CIT(A) ALREADY GAVE A CATEGORICAL FI N DING THAT FROM 22 ITA NO. 28/VIZ/2014 ( R. GOVIND ) THE ACCOUNT OF MR. M. VISWA MOHAN, NO WITHDRAWALS FROM THE PERIOD MENTIONED BY THE ASSESSEE I.E. APRIL, 2006 TILL MAY, 2007. TH E RE WERE NOT WITHDRAWALS FROM THE WHOLE P E RIOD OF 2006 AND HE ALSO GAVE A FINDING THAT IN THE RETURN OF INCOME, NO REFERENCE IS MADE IN RESPECT OF LOAN ADVANCED TO THE ASSESSEE. THEREFORE, CONFIRMATION LETTERS CANNOT BE BELIEVED. INSOFAR AS, CONFIRMATION LETTER ISSUED BY M/S. M. VISWA MOHAN DATED 27/01/2010 (PAPER BOOK AT PAGE NO. 27) WHEREIN HE STA TED THAT HIS MOTHER - IN - LAW MRS.K.BHANUMATHI HAS ADVANCED AN AMOUNT OF RS. 1.4 0 CRORES IN RESPECT OF ACQUIR ING THE SCHEDULED PROPERTY AND UNREGISTERED AGREEMENT WAS SIGNED BY HIS MOTHER - IN - LAW ON BEHALF HIM. WE FIND THAT IN THE UNREGISTERED AGREEMENT DATED 23/09/2006, THERE IS NO REFERE N CE TO MR.M.VISWA MOHAN. IT IS ONLY ENTERED BY MRS.K.BHANUMATHI. THAT APART, LD.CIT(A) GAVE A CATEGORICAL FINDING THAT THERE WERE NO WITHDRAWALS FROM HIS BANK ACCOUNT; THAT APART NEITHER MRS.K.BHANUMATHI NOR MR. M. VISWA MOHAN HAS MADE A MENTION ABOUT THE DETAILS OF THE PAYMENT I.E. W HEN MONEY HAS WITHDRAWN, HOW MUCH MONEY WAS WITHDRAWN, HOW MUCH WAS PAID ETC. THEREFORE, WHEN HUGE MONEY IS ADVANCED TO THE ASSESSEE ON THE GUISE OF UNREGISTERED SALE AGREEMENT IN 2006 IN SO FAR , THE ASSESSEE EITHER EXECUTED THE SALE DEED OR REPAID THE AMOUNT. THERE IS NO CORRESPONDENCE AVAILABLE ON RECORD TO SHOW 23 ITA NO. 28/VIZ/2014 ( R. GOVIND ) THAT SUBSEQUENT TO THE PAYMENT OF THE ADVANCE , NEITHER BY MRS.K.BHANUMATHI N OR BY M.VISWA MOHAN MADE ANY EFFORT S TO RECEIVE THE AMOUNT OR TO REGISTER THE SALE DEED IN THEIR FAVOUR . UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE , TH E S E CONFIRMATION LETTERS ISSUED BY BOTH THE PARTIES MRS.K.BHANUMATHI AND MR. M. VISWA MOHAN CANNOT BE CONSIDERED AS EVIDENCE THAT THE ASSESSEE HAS RE CE I V ED AMOUNT FROM THE ABOVE PARTIES. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT THE ASSESSING OFFICER HAS RIGHTLY MADE THE ADDITION OF RS. 1.45 CRORES AS UNACCOUNTED INCOME OF THE ASSESSEE AND THE SAME IS CONFIRMED BY THE LD.CIT(A). WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD.C IT(A) . SO FAR AS CASE - LAW RELIED ON BY THE ASSESSEE IN THE CASE OF CHEMICAL BIOTECH LTD., (SUPRA) IS NO RELEVANCY TO THE FACTS OF THE PRESENT CASE. THUS, THIS APPEAL FILED BY THE ASSESSEE IS DISMISSED. 11 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN OPEN COURT ON TH IS 1 2 T H DAY OF OCT . , 201 8 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 2 T H OCT . , 201 8 . VR/ - 24 ITA NO. 28/VIZ/2014 ( R. GOVIND ) COPY TO: 1. THE ASSESSEE RAPETI GOVIND, FLAT NO. 301, AARAM APTS., CHINA WALTAIR, VISAKHAPATNAM. 2. THE REVENUE - DCIT, CENTRAL CIRCLE - 1, VISAKHAPATNAM. 3. THE CIT (CENTRAL), HYDERABAD. 4. THE CIT(A) , VISAKHAPATNAM. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.