Manjula Narsa, Hyderabad V. Dy.CIT, Central Circle-2, Hyderabad

ITA 332/HYD/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69735 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 18-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B V PRASAD REDDY
• Assessee Lawyers: S RAMA RAO
• Keywords: Gift; Search and seizure; Document seized; Opportunity of being heard; Documents seized
• Section: 132; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NOS. 332, 333, 334 & 335/HYD/2013 ASSESSMENT YEARS : 2006-07, 2008-09, 2009-10 & 2010 -11 MANJULA NARSA, APPELLANT HYDERABAD. (PAN ABWPM4588K) VS. DY. COMMISSIONER OF INCOME-TAX, RESPONDENT CENTRAL CIRCLE 2, HYDERABAD. APPELLANT BY : SHRI S. RAMA RAO RESPONDENT BY : SHRI B.V. PRASAD REDDY DATE OF HEARING : 25/07/2013 DATE OF PRONOUNCEMENT : 14/08/2013 ORDER PER SAKTIJIT DEY, J.M.: THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED A GAINST A COMMON ORDER OF CIT(A)-I, HYDERABAD FOR THE ASSESSM ENT YEARS, 2006-07 AND 2008-09 TO 2010-11. AS THEY RELATE TO T HE SAME ASSESSEE AND ISSUES ARE IDENTICAL, THEY WERE CLUBBE D AND HEARD TOGETHER AND THEREFORE WE FIND IT CONVENIENT TO DIS POSE OF THESE APPEALS BY WAY OF THIS CONSOLIDATED ORDER. ITA NO. 332/HYD/2013 FOR AY 2006-07 2. THE ONLY ISSUE IN THIS APPEAL RELATES TO DISALLO WANCE OF CLAIM OF DEVELOPMENT EXPENDITURE OF AN AMOUNT OF RS. 9,93 ,711/-. 2 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA 3. BRIEFLY THE FACTS RELATING TO THE ISSUE IN DISPU TE ARE THE ASSESSEE IS AN INDIVIDUAL. A SEARCH AND SEIZURE OPE RATION U/S 132 OF THE ACTWAS CARRIED OUT IN THE RESIDENTIAL PREMIS ES OF THE ASSESSEE AND HER HUSBAND SHRI M. NARASAIAH ON 25/03 /2010. CONSEQUENT UPON THE SEARCH AND SEIZURE OPERATION, A NOTICE U/S 153C WAS ISSUED TO THE ASSESSEE ON 08/11/2010. IN R ESPONSE TO THE NOTICE ISSUED U/S 153C, THE ASSESSEE FILED A RE TURN OF INCOME ON 15/02/2011 DECLARING TOTAL INCOME AT RS. 1,97,70 0/-. IN COURSE OF POST SEARCH PROCEEDING, IT WAS NOTICED BY THE DEPARTMENT THAT THE ASSESSEE HAD SOLD CERTAIN PROPE RTIES BUT THE CAPITAL GAIN ARISING FROM SALE OF THOSE PROPERTIES WERE NOT DISCLOSED BY HER IN THE RETURN. IN THE COMPUTATION OF CAPITAL GAIN SUBMITTED ALONG WITH RETURN FILED IN RESPONSE TO NO TICE U/S 153C OF THE ACT, THE ASSESSEE HAD DISCLOSED SALE CONSIDE RATION RECEIVED FROM ONE PROPERTY AT RS. 10,99,980/- AND ANOTHER PR OPERTY AT RS. 34,68,010/- AND AFTER CLAIMING COST OF IMPROVEMENT OF RS. 7,96,238/- AND RS. 2,37,426/- RESPECTIVELY HAD DISC LOSED LONG TERM CAPITAL LOSS OF RS. 12,80,017 AND SHORT TERM C APITAL GAIN OF RS. 18,999/-. THE AO HOWEVER DID NOT ACCEPT THE ASS ESSEES CLAIM OF EXPENDITURE TOWARDS IMPROVEMENT ON PLOT AS THE A SSESSEE COULD NOT SUBMIT THE DETAILS OF THE EXPENDITURE AND ACCORDINGLY DISALLOWED THE CLAIM OF THE EXPENDITURE OF RS. 9,93 ,711/- AND ADDED IT TO THE INCOME OF THE ASSESSEE. 4. BEING AGGRIEVED OF SUCH ADDITION, THE ASSESSEE P REFERRED AN APPEAL BEFORE THE CIT(A). 5. BEFORE THE CIT(A), IT WAS CONTENDED BY THE ASSES SEE THAT THE EXPENDITURE WAS GENUINELY INCURRED IN THE FY 19 99-00 TOWARDS IMPROVEMENT OF THE ASSET. IT WAS SUBMITTED THAT HOUSE BEARING NO. 1-98/7/67, PLOT NO. 20, SURVEY NO. 3,4, 5 & 10, 3 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA MADHAPUR, HYDERABAD WAS ACQUIRED BY THE ASSESSEE BY WAY OF A GIFT DEED FROM MR. M. LINGAIAH IN THE YEAR 1999-200 0, WHICH COMPRISED OF TWO ADJACENT PLOTS, PARTIALLY COVERED WITH ROCK. THE ASSESSEE HAD INCURRED TOTAL EXPENDITURE OF RS. 7,96 ,238/- FOR REMOVING THE ROCK, CONSTRUCTION OF COMPOUND WALL AN D A ROOM, WHICH WAS MET BY THE ASSESSEE OUT OF WITHDRAWALS FR OM HER BANK ACCOUNTS DURING THE YEAR 1999-2000. IT WAS FURTHER CONTENDED THAT PART OF THE AMOUNT OF RS. 4,51,000/- WAS PAID ON 27/04/2000 FOR ROCK CUTTING CONTRACTOR AGAINST THE WORKS COMPLETED IN THE YEAR 1999-2000. THE ASSESSEE IN SU PPORT OF HIS CONTENTION, SUBMITTED AN EXTRACT SHOWING WITHDRAWAL S FROM THE BANK ACCOUNT TOTALING TO RS. 7,81,000/, WHICH WAS C LAIMED TO HAVE BEEN SPENT TOWARDS THE EXPENDITURE INCURRED FO R DEVELOPMENT. IT WAS FURTHER CONTENDED THAT SINCE TH E ASSESSEE DID NOT HAVE ANY INCOME FROM BUSINESS NO BOOKS OF A CCOUNT WERE MAINTAINED BY HER. HENCE, NO OTHER SUPPORTING EVIDE NCE LIKE BILLS AND VOUCHERS COULD BE PRODUCED. 6. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE WAS OF THE VIEW THAT IN THE FIRST PLACE INSPITE OF SELLING THE PROPERTIES, THE ASSESSEE HAD NOT DISCLOSED ANY CAPI TAL GAINS/LOSS IN RESPECT OF SUCH SALE ON HER OWN. ONLY AFTER THE SALE OF THE PROPERTIES WERE NOTICED BY THE DEPARTMENT AS A CONS EQUENCE OF SEARCH AND SEIZURE OPERATION AND SINCE THE DEPARTME NT SOUGHT TO BRING THE GAIN ARISING OUT OF SALE OF THE PROPERTIE S TO TAX, THE ASSESSEE CAME FORWARD WITH A CLAIM THAT SHE HAD INC URRED CERTAIN COST OF IMPROVEMENT OF THE SAID PROPERTIES AND CLAI MED DEDUCTION FROM THE SAME IN WORKING OUT THE CAPITAL GAIN. HOWE VER, INSPITE OF SUFFICIENT OPPORTUNITY BEING AFFORDED BY THE AO TO HER, NO EVIDENCE IN RESPECT OF INCURRING OF EXPENDITURE TOW ARDS IMPROVEMENT OF THE PROPERTY COULD BE FURNISHED BY T HE ASSESSEE. 4 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA THE CIT(A) FURTHER HELD THAT THE WITHDRAWALS FROM T HE BANK ACCOUNTS COULD NOT BE LINKED BY THE ASSESSEE, WITH SPECIFIC EXPENDITURE INCURRED FOR THE IMPROVEMENT OF THE PRO PERTIES. ON THE AFORESAID BASIS, THE CIT(A) REJECTED THE CLAIM OF THE ASSESSEE AND SUSTAINED THE ADDITION. 7. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US. 8. THE LEARNED AR SUBMITTED BEFORE US THAT THE EXPE NDITURE INCURRED WAS WAY BACK IN THE YEAR 1999-2000 AND THE ASSESSMENT PROCEEDINGS WERE TAKEN UP BY THE AO IN THE YEAR 201 0-11, THEREFORE, IT CANNOT BE EXPECTED OF THE ASSESSEE TO PRODUCE THE EVIDENCE LIKE BILLS AND VOUCHERS AFTER A GAP OF 1 0 TO 11 YEARS. THE LEARNED AR FURTHER CONTENDED THAT THE REVENUE A UTHORITIES HAVE NOT DISPUTED THE NATURE OF EXPENDITURE CLAIMED AND ONLY BECAUSE THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENT ARY EVIDENCE THE EXPENDITURE HAS BEEN DISALLOWED. IT WA S FURTHER SUBMITTED THAT EVEN IN ABSENCE OF DOCUMENTARY EVIDE NCE THE FACT COULD HAVE BEEN ASCERTAINED BY THE DEPARTMENT BY CO NDUCTING A PHYSICAL VERIFICATION. 9. THE LEARNED DR, ON THE OTHER HAND, HAS FILED WRI TTEN SUBMISSION CONTENDING THEREIN THAT IN SPITE OF AVAI LING ADEQUATE OPPORTUNITY THE ASSESSEE COULD NOT SUBMIT ANY EVIDE NCE TOWARDS THE EXPENDITURE INCURRED ON IMPROVEMENT. IT IS FURT HER CONTENDED THAT THE ASSESSEE EVEN COULD NOT ESTABLISH LINKAGE BETWEEN THE BANK WITHDRAWALS AND EXPENDITURE INCURRED. IN THE A FORESAID CIRCUMSTANCES, THE CLAIM OF THE ASSESSEE THEREFORE HAS BEEN RIGHTLY REJECTED. 5 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA 10. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIALS ON RECORD. IT IS THE CLAIM OF THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDING AS WELL AS BEFORE THE CIT(A) THAT THE EXPENDITURE INCURRED WAS ON ACCOUNT OF PAY MENT MADE TO CONTRACTORS FOR REMOVING THE ROCKS. ON A PERUSAL OF THE ORDERS PASSED BY THE REVENUE AUTHORITIES, IT IS TO BE SEEN THAT THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY DOCUMENTA RY EVIDENCE WITH REGARD TO THE EXPENDITURE CLAIMED TO HAVE BEEN INCURRED TOWARDS IMPROVEMENT OF THE PROPERTY. IT IS FURTHER TO BE SEEN FROM THE FACTS ON RECORD THAT NOT A SINGLE DOCUMENT ARY EVIDENCE HAS BEEN PRODUCED BY THE ASSESSEE TO PROVE THE FACT THAT THE EXPENDITURE WAS ACTUALLY INCURRED TOWARDS THE STATE D PURPOSE OF THE IMPROVEMENT OF THE PROPERTY. IT IS ALSO A FACT THAT THOUGH THE ASSESSEE HAD SUBMITTED CERTAIN STATEMENTS SHOWING W ITHDRAWALS FROM THE BANK ACCOUNTS DURING THE PERIOD FROM THE Y EAR 1999- 2000 BUT NOTHING HAS BEEN BROUGHT ON RECORD TO PROV E THE FACT THAT THE WITHDRAWALS WERE TOWARDS EXPENDITURE INCUR RED FOR THE IMPROVEMENT OF THE PROPERTY. WHEN THE ASSESSEE HAS SPENT A SUBSTANTIAL AMOUNT OF RS. 9,93,711/- TOWARDS IMPROV EMENT OF THE PROPERTY, IT IS EXPECTED THAT THE ASSESSEE MUST HAV E RETAINED IF NOT ALL BUT AT LEAST A FEW DOCUMENTS TO SHOW THAT T HE EXPENDITURE WAS ACTUALLY INCURRED TOWARDS IMPROVEMENT OF THE PR OPERTY. MORE SO, WHEN IT IS CLAIMED THAT THE IMPROVEMENT WAS DO NE THROUGH A CONTRACTOR. IN THE AFORESAID VIEW OF THE MATER, THE ASSESSEE HAVING FAILED TO ESTABLISH THE INCURRING OF EXPENDI TURE, IN OUR VIEW, THE DISALLOWANCE MADE BY THE AO AND SUSTAINED BY THE CIT(A) WAS JUSTIFIED AND ACCORDINGLY UPHELD. 11. IN THE RESULT, APPEAL BEING ITA NO. 332/HYD/201 3 IS DISMISSED. 6 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA ITA NO. 333/HYD/2013 FOR AY 2008-09 12. THE ONLY ISSUE IN THIS APPEAL IS WITH REGARD TO AN ADDITION OF RS. 68,61,000/- AS UNDISCLOSED INCOME OF THE ASSESS EE FOR THE IMPUGNED ASSESSMENT YEAR. 13. BRIEFLY THE FACTS ARE, IN COURSE OF SEARCH AND SEIZURE OPERATION CONDUCTED IN THE RESIDENTIAL PREMISES OF THE ASSESSEE AND HER HUSBAND SHRI M. NARASAIAH ON 25/03/2010 CER TAIN INCRIMINATING MATERIAL WAS FOUND AND SEIZED. ONE OF THEM BEING A LOOSE SHEET CONTAINING CERTAIN NARRATION WHEREIN IT IS MENTIONED THAT AN AMOUNT OF RS. 55 LAKHS BEING THE COST OF S HARES INVESTED IN MAMTA DEVI SITE WITH M/S SHANTHA SHRIRAM CONSTRU CTIONS PVT. LTD. AND ALSO THE PAYMENT OF RS. 13.61 LAKHS, IN LI EU OF WHICH THE ASSESSEE HAD RECEIVED ENTIRE RIGHTS OVER THE LAND. IN COURSE OF POST SEARCH PROCEEDING WHEN THIS DOCUMENT WAS CONFR ONTED TO THE ASSESSEE AND AN EXPLANATION WAS SOUGHT ON THE SAME, THE ASSESSEE COULD NOT EXPLAIN THE SAME APART FROM STAT ING THAT THE DEAL COULD NOT BE MATERIALIZED. IN COURSE OF ASSESS MENT PROCEEDINGS, CONSEQUENT UPON SEARCH AND SEIZURE OPE RATION, THE ASSESSEE WAS AGAIN ASKED TO EXPLAIN THE SOURCE OF I NVESTMENT FOR THE AMOUNT OF RS. 68.61 LAKHS STATED TO HAVE BEEN I NVESTED IN GARAPATY MAMTHA DEVI SITE. THE ASSESSEE AGAIN SUBMI TTED THAT THE DEAL REGARDING THE SAID LAND COULD NOT BE MATER IALIZED. THE AO HOWEVER DID NOT ACCEPT THE CONTENTION OF THE ASS ESSEE AND TREATED THE AMOUNT OF RS. 68.61 LAKHS AS HER UNDISC LOSED INCOME BY OBSERVING THAT THE LOOSE SHEET CLEARLY SHOWS THA T SHE HAD INVESTED THE AMOUNT OF RS. 68.61 LAKHS IN THE GARAP ATY MAMTHA DEVI SITE AND ACCORDINGLY COMPLETED THE ASSESSMENT BY ADDING IT TO THE INCOME OF THE ASSESSEE. 7 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA 14. THE ASSESSEE BEING AGGRIEVED OF THE ASSESSMENT ORDER SO PASSED, PREFERRED AN APPEAL BEFORE THE CIT(A). 15. BEFORE THE CIT(A) IN COURSE OF HEARING, THE ASS ESSEE CONTENDED THAT THE ADDITION WAS MADE MERELY ON THE BASIS OF SEIZED MATERIAL WHICH IS NOTHING BUT A MERE SCRIBBL ING ON A PIECE OF PAPER, WHICH DOES NOT CONVEY A TITLE TO ANY PROP ERTY. IT WAS SUBMITTED THAT IN COURSE OF SEARCH NO OTHER DOCUMEN TARY EVIDENCE IN THE FORM OF REGISTERED/UNREGISTERED DOCUMENT CON VEYING THE RIGHTS AND TITLE ON LAND OF GARAPATHY MAMTHA DEVI IN FAVOUR OF THE ASSESSEE WAS FOUND. IT WAS SUBMITTED THAT THE H USBAND OF THE ASSESSEE SHRI NARASAIAH IN THE YEAR 2005 HAS PROPOS ED A FAMILY SETTLEMENT WHEREIN HE PROMISED TO PAY AN AMOUNT OF RS. 55 LAKHS TO THE ASSESSEE. SINCE HE COULD NOT FURNISH THE SAI D CASH DUE TO LIQUIDITY PROBLEMS, HE PROPOSED TO GIVE A PORTION O F THE LAND, PROPOSED TO BE PURCHASED BY M/S SHANTHA SHRIRAM CON STRUCTIONS PVT. LTD. FROM GARAPATHY MAMTHADEVI IN FY 2007-08 T O KEEP UP HIS PROMISE. SHRI NARASAIAH ALSO PROPOSED TO PAY IN TEREST FOR THE DELAY. IT WAS CONTENDED THAT IN ORDER TO GIVE EFFEC T TO SUCH INITIAL OFFER OF PAYING THE ASSESSEE RS. 55 LAKHS IN CASH, MR. NARASAIAH HAD DRAFTED THE PROPOSAL ON A PAPER, TO GAIN CONFID ENCE OF THE ASSESSEE AND ALSO TO SECURITIZE HIS OWN INTEREST TH AT HE HAD NOT DEFAULTED IN THE PAYMENT AS PROMISED DURING THE FAM ILY SETTLEMENT. ACCORDINGLY, A PROPOSAL WAS MADE BY HI M TO THE ASSESSEE WITH THE SAID DRAFT PROPOSAL. HOWEVER, TH E ASSESSEE DID NOT EVINCE ANY INTEREST IN THE SAID PROPOSAL AS THE FAMILY PARTITION HAD ALREADY TAKEN PLACE AND ALSO DUE TO THE REASON THAT SHE WAS NOT INTERESTED IN HAVING ANY LINKS WITH M/S SHANTHA SHRIRAM CONSTRUCTIONS PVT. LTD. IT WAS FURTHER CONTENDED T HAT THE PROPOSED DRAFT WAS LEFT WITH THE ASSESSEE BY MR. NA RASAIAH WITH AN INTENTION TO ALLOW HER TO TAKE A DECISION THEREO N AT A LATER 8 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA DATE. SUBSEQUENTLY, IN AY 2010, MR. NARASAIAH MADE PAYMENT OF RS. 72.40 LAKHS TO THE ASSESSEES FATHER TO KEEP UP HIS PROMISE AS PER THE FAMILY SETTLEMENT, WHICH WAS DULY DEPOSITED IN THE UNION BANK OF INDIA. IT WAS CONTENDED THAT THIS AMOUNT OF RS. 72.40 LAKHS DEPOSITED IN TO THE BANK ACCOUNT OF THE ASSES SEES FATHER WAS OWNED UP BY MR. NARASAIAH AS HIS UNDISCLOSED I NCOME. IT WAS FURTHER CONTENDED THAT THE LOOSE PAPER FOUND DU RING THE COURSE OF SEARCH AND WRITTEN BY MR. NARASAIAH WAS O NLY A DRAFT OF THE PROPOSED ARRANGEMENT AND SINCE THE SAME WAS REJ ECTED, MR. NARASAIAH PAID RS. 72.40 LAKHS TO THE ASSESSEES F ATHER TO KEEP UP HIS PROMISE. 16. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE WAS HOWEVER NOT CONVINCED WITH THE SAME. HE OBSERVE D THAT THE ASSESSEE COULD NOT EXPLAIN ANYTHING WITH REGARD TO THE DOCUMENTS SEIZED EITHER DURING THE POST SEARCH PROCEEDING OR IN COURSE OF THE ASSESSMENT PROCEEDINGS APART FROM STATING THAT THE DEAL DID NOT MATERIALIZE WHERE AS THE LOOSE SHEET CLEARLY SH OWED THE INVESTMENT OF RS. 68.61 LAKHS FOR GETTING RIGHTS ON LAND AT GARAPATHY MAMATHA DEVI SITE. THE CIT(A) WAS OF THE VIEW THAT THE SUBSEQUENT EXPLANATION FURNISHED BY THE ASSESSE E IN COURSE OF PROCEEDING BEFORE HIM TO THE EFFECT THAT SCRIBBL ING IN LOOSE SHEET REPRESENTS A DRAFT PROPOSAL MADE BY MR. NARAS AIAH FOR MEETING HIS PROMISE TO PAY A SUM OF RS. 55 LAKHS TO THE ASSESSEE UNDER FAMILY SETTLEMENT IN THE YEAR 2005 CANNOT BE ACCEPTED AND IS MERELY AN AFTERTHOUGHT AS SEQUENCE OF EVENTS WOU LD CLEARLY REVEAL SO. THE CIT(A) FURTHER OBSERVED THAT HAD THI S SCRIBBLING ON THE LOOSE SHEET BEEN A DRAFT PROPOSAL ONLY, AS CLAI MED BY THE ASSESSEE, NOTHING COULD HAVE PREVENTED THE ASSESSEE OR SHRI M. NARASAIAH TO STATE THIS FACT IN THE COURSE OF SEARC H OR POST-SEARCH ENQUIRIES OR EVEN IN THE COURSE OF ASSESSMENT PROCE EDINGS. THE 9 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA CIT(A) WAS OF THE VIEW THAT THE FACT THAT THE SAID DOCUMENTS WAS WELL PRESERVED BY SHRI M. NARASAIAH WOULD PROVE THE FACT THAT IT WAS ACTUALLY REPRESENTING TRANSFER OF RIGHT. HE FUR THER OBSERVED THAT SINCE THE TRANSFER OF SUCH RIGHTS WAS ON THE B ASIS OF MUTUAL UNDERSTANDING AND WAS PART OF THE UNACCOUNTED DEALI NGS OF BOTH SRI NARASAIAH AND THE ASSESSEE, THERE WAS NO QUESTI ON OF CONVEYING ANY LEGAL TITLE DESPITE THE FACT THAT THE INTEREST AND RIGHTS WERE SO TRANSFERRED. THE CIT(A) FURTHER NEGA TED THE CONTENTION OF THE ASSESSEE TO THE EFFECT THAT THE A MOUNT OF RS. 72.40 LAKHS PAID IN THE FY 2009-10 WAS IN KEEPING U P OF THE PROMISE MADE BY SHRI NARASAIAH FOR GIVING EFFECT TO THE FAMILY SETTLEMENT BY OBSERVING THAT THE ASSESSEE HAD NOT E STABLISHED AS TO HOW THE AMOUNT PAID WAS WORKED OUT AT RS. 72.40 LAKHS AND AS TO WHY THE SAME WAS PAID TO THE ASSESSEES FATHER. WITH THE AFORESAID OBSERVATION, THE CIT(A) CONFIRMED THE ADD ITION OF RS. 68.61 LAKHS. 17. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 18. THE LEARNED AR SUBMITTED BEFORE US THAT SEIZED DOCUMENT ON THE BASIS OF WHICH THE ENTIRE ADDITION HAS BEEN MAD E IS ONLY A LOOSE PAPER FOUND DURING THE SEARCH WHICH NEITHER B EARS ANY SIGNATURE NOR ANY DATE. HENCE, IT HAS NO EVIDENTIAR Y VALUE AND AT BEST CAN BE TERMED AS A DUMB DOCUMENT. IT WAS SUBM ITTED THAT THE DOCUMENT FOUND WAS NOT CORROBORATED BY ANY OTHE R EVIDENCE TO PROVE THE FACT THAT THE ASSESSEE HAD ACTUALLY PA ID THE AMOUNT OF RS. 68.61 LAKHS TO SHRI NARASAIAH. THE LEARNED A R SUBMITTED THAT THE DOCUMENT SEIZED WAS ADMITTEDLY NOT IN THE HAND WRITING OF THE ASSESSEE BUT WAS IN THE HAND WRITING OF SHRI NARASAIAH. THE LEARNED AR SUBMITTED THAT THE FACT THAT THE PRO PERTY BELONGED TO THE COMPANY M/S SHANTHA SHRIRAM CONSTRUCTIONS PV T. LTD. HAS 10 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA NOT BEEN DISPUTED BY THE DEPARTMENT AND THE SALE OF THE PROPERTY BY THE SAID COMPANY TO DIFFERENT PERSONS UNDER DIFF ERENT REGISTERED SALE DEED IS ALSO NOT DISPUTED. HENCE, I T CANNOT BE SAID THAT THE ASSESSEE ACQUIRED RIGHT OVER THE SAID PROP ERTY BY PAYING THE AMOUNT OF RS. 68.61 LAKHS TO SHRI NARASAIAH. IN THIS CONTEXT, THE LEARNED AR REFERRED TO THE REGISTERED SALE DEED S SUBMITTED IN THE PAPER BOOK AT PAGES 32 TO 196 AS WELL AS OTHER REGISTERED DOCUMENTS WITH REGARD TO THE CONCERNED PROPERTY EXE CUTED BETWEEN M/S SHANTHA SHRIRAM CONSTRUCTIONS PVT. LTD. WITH THIRD PARTIES. IT WAS CONTENDED BY THE LEARNED AR THAT H AD THE ASSESSEE ACQUIRED THE RIGHT OVER THE SAID PROPERTY AT GARAPATHY MAMATHA DEVI SITE, M/S SHANTHA SHRIRAM CONSTRUCTION S PVT. LTD. COULD NOT HAVE BEEN ABLE TO SELL THESE PROPERTIES T O THIRD PARTIES. 19. THE LEARNED DR, ON THE OTHER HAND, HAS SUBMITTE D IN THE WRITTEN SUBMISSION THAT NEITHER DURING SEARCH PROCE EDING NOR IN COURSE OF ASSESSMENT PROCEEDING THE ASSESSEE HAS EX PLAINED ANYTHING WITH REGARD TO THE AMOUNT OF RS. 68.61 LAK HS. IT WAS SUBMITTED THAT THE FIGURE OF RS. 72.40 LAKHS WAS AL SO ARRIVED AT HAS ALSO NOT BEEN EXPLAINED. IT WAS FURTHER CONTEND ED THAT THE RATIONALE BEHIND THE ACTION OF SHRI NARASAIAH IN HA NDING OVER THE MONEY TO HIS FATHER ALSO HAS NOT BEEN EXPLAINED. IN THESE CIRCUMSTANCES, IT CANNOT BE SAID THAT THE PAYMENT O F RS. 72.40 LAKHS BY SHRI NARASAIAH TO ASSESSSEES FATHER IS ON ACCOUNT OF PROMISE MADE BY HIM UNDER THE FAMILY SETTLEMENT. 20. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES AN D PERUSED THE MATERIALS ON RECORD. ON PERUSAL OF THE ORDER PA SSED BY THE REVENUE AUTHORITIES, IT IS VERY MUCH CLEAR THAT THE ADDITION OF RS. 68.61 LAKHS WAS MADE ONLY ON THE BASIS OF A LOOSE S HEET FOUND BY THE DEPARTMENT DURING THE COURSE OF SEARCH AND SEIZ URE OPERATION 11 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA CONDUCTED IN THE PREMISES OF SHRI M. NARASAIAH, HUS BAND OF THE ASSESSEE. AT THIS STAGE, IT WOULD BE WORTHWHILE TO TAKE A LOOK AT THE CONTENTS OF THE LOOSE SHEET, WHICH IS REPRODUCE D HEREUNDER: 21. FROM THE PERUSAL OF THE LOOSE SHEET IT IS ABSOL UTELY CLEAR THAT NEITHER IT IS SIGNED BY ANY ONE NOR IT BEARS A NY DATE. THOUGH THE SCRIBBLING MADE IN THE LOOSE SHEET SPEAKS OF PA YMENT OF RS. 55 LAKHS TOWARDS COST OF THE SHARES INVESTED IN MAM ATHA DEVI SITE WITH M/S SHANTHA SHRIRAM CONSTRUCTIONS PVT. LT D. ALONG WITH 12 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA INTEREST OF RS. 13.61 LAKHS IN LIEU OF ASSIGNMENT O F THE RIGHTS OVER THE SAID PROPERTY TO MRS. MANJULA, THE PRESENT ASSE SSEE BUT THERE IS NO MENTION EITHER OF THE DATE OF PAYMENT OR MODE OF PAYMENT. IT IS ALSO A FACT ON RECORD THAT THE SCRIBBLING ARE IN THE HANDWRITING OF SHRI M. NARASAIAH AND NOT IN THE HAN D WRITING OF THE ASSESSEE. IT IS ALSO AN ADMITTED FACT THAT APAR T FROM THIS LOOSE SHEET THERE IS NO OTHER DOCUMENT OR SUPPORTING EVID ENCE BROUGHT ON RECORD BY THE DEPARTMENT TO ESTABLISH THE FACT T HAT THE AMOUNT OF RS. 68.61 LAKHS WAS ACTUALLY PAID BY THE ASSESSE E TO SHRI M. NARASAIAH OR REGARDING ACTUAL TRANSFER OF RIGHT, TI TLE AND INTEREST OVER THE SAID PROPERTY IN FAVOUR OF THE ASSESSEE. I N THE AFORESAID CIRCUMSTANCES, IT IS NEITHER PROPER NOR ADVISABLE T O INFER TRANSFER OF RIGHT OVER THE PROPERTY IN FAVOUR OF SMT. MANJUL A BY SHRI NARASAIAH OR CONSEQUENT PAYMENT OF RS. 68.61 LAKHS WHEN THERE IS NO OTHER CORROBORATIVE EVIDENCE TO ESTABLISH SUC H FACT. 22. IT IS A FURTHER FACT ON RECORD THAT THE PROPERT Y IN QUESTION VIZ. GARAPATHY MAMATHA DEVI SITE WERE SUBSEQUENTLY SOLD/TRANSFERRED BY M/S SHANTHA SHRIRAM CONSTRUCTIO NS PVT. LTD. IN FAVOUR OF VARIOUS PARTIES UNDER REGISTERED SALE DEED AND REGISTERED DEVELOPMENT AGREEMENT/GPA, WHICH ARE PLA CED AT PAGES 32 TO 254 OF THE PAPER BOOK SUBMITTED BY THE ASSESSEE. THESE DOCUMENTS HAVE BEEN TOTALLY IGNORED BY THE CI T(A) WHILE SUSTAINING THE ADDITION. THESE DOCUMENTS CLEARLY PR OVE THE FACT THAT M/S SHANTHA SHRIRAM CONSTRUCTIONS PVT. LTD. WA S NOT ONLY LEGAL OWNER OF THE PROPERTY BUT WAS ENJOYING POSSES SION OVER THE PROPERTY, WHICH WAS SUBSEQUENTLY SOLD/TRANSFERRED U NDER VARIOUS REGISTERED DOCUMENTS TO DIFFERENT PARTIES. THUS, WH EN THE LOOSE DOCUMENT NEITHER BEARS SIGNATURE OF ANY PERSON NOR BEARS ANY DATE AND EVEN WHEN THERE IS NO MENTION ABOUT THE DA TE OF PAYMENT OF THE AMOUNT MENTIONED THEREIN AND MODE OF PAYMENT, 13 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA IN SUCH CIRCUMSTANCES, EXPLANATION OF THE ASSESSEE THAT THE DEAL DID NOT MATERIALIZE CANNOT BE REJECTED WITHOUT BRIN GING SUFFICIENT MATERIAL ON RECORD TO PROVE THE CONTRARY. IT IS ALS O A FACT THAT THE PAYMENT OF RS. 72.40 LAKHS BY THE ASSESSEES HUSBAN D SHRI NARASAIAH, ASSESSEES FATHER HAS NOT BEEN DISPUTED BY THE DEPARTMENT. THEREFORE, THE CONTENTION OF THE ASSESS EE AND SHRI M. NARASAIAH THAT THE PAYMENT OF THE AFORESAID AMOU NT WAS TOWARDS KEEPING UP WITH THE PROMISE MADE BY SHRI NA RASAIAH AS PER THE FAMILY SETTLEMENT APPEARS TO BE REASONABLE. SO FAR AS THE DOUBT ENTERTAINED BY CIT(A) ABOUT WORKING OUT OF TH E AMOUNT OF RS. 72.40 LAKHS IS CONCERNED, IT COULD WELL BE EXPL AINED BY THE FACT THAT THE FAMILY SETTLEMENT ENTERED IN THE YEAR 2005 SINCE COULD NOT BE GIVEN EFFECT TO DUE TO LIQUIDITY PROBL EM OF SHRI M. NARASAIAH THE AMOUNT OF RS. 72.40 LAKHS MAY ALSO BE INCLUDING SOME INTEREST COMPONENT TOWARDS DELAY IN PAYMENT. THUS, CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTA NCES, IT WOULD BE FAIR AND REASONABLE TO COME TO A CONCLUSION THAT THERE BEING NO CORROBORATIVE EVIDENCE TO PROVE THE FACT THAT TH E ASSESSEE HAS ACTUALLY PAID THE AMOUNT OF RS. 68.61 LAKHS TO SHRI NARASAIAH, NO ADDITION CAN BE MADE ONLY ON THE BASIS OF A LOOSE S HEET SEIZED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION. MUCH IMPORTANCE CANNOT BE ATTACHED TO THE SEIZED DOCUMEN T IN ABSENCE OF ANY OTHER CORROBORATIVE EVIDENCE TO ESTABLISH TH E FACT THAT THE SCRIBBLING MADE THEREIN ARE CORRECT. IN THE AFORESA ID VIEW OF THE MATTER WE ARE OF THE VIEW THAT THE ADDITION OF RS. 68.61 LAKHS CANNOT BE SUSTAINED AND ACCORDINGLY WE DIRECT THE A O TO DELETE THE SAME. 23. IN THE RESULT, APPEAL BEING ITA NO. 333/HYD/201 3 IS ALLOWED. 14 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA ITA NO. 334/HYD/2013 FOR AY 2009-10 24. THE ASSESSEE HAS RAISED THE FOLLOWING TWO EFFEC TIVE GROUNDS: 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDIT ION OF RS. 6,30,000/- MADE BY THE AO WITHOUT CONSIDERING T HE FACT THAT THE FDRS DO NOT REPRESENT THE UNDISCLOSED INCO ME OF THE APPELLANT HEREIN. BOTH THE AO AND THE LEARNED C IT(A) OUGHT TO HAVE HELD THAT THE FDRS AGGREGATING TO RS. 6,30,000/- WERE PROPERLY EXPLAINED. 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDIT ION OF RS. 9,11,314/- MADE BY THE AO DISBELIEVING THE CLAIM TO WARDS DEVELOPMENT EXPENDITURE INCURRED. THE LEARNED CIT(A ) OUGHT TO HAVE CONSIDERED THE EVIDENCES PRODUCED BEFORE HI M AND DIRECTED ALLOWANCE OF THE COST OF DEVELOPMENT AS CL AIMED. 25. GROUND NO. 2 RELATES TO ADDITION OF AN AMOUNT O F RS. 6,30,000/- U/S 69 OF THE ACT, BEING THE INVESTMENT MADE IN FDRS. BRIEFLY THE FACTS ARE, IN COURSE OF SEARCH AND SEIZ URE OPERATION CONDUCTED IN THE PREMISES OF THE ASSESSEE AND HER H USBAND ON 25/03/2010, CERTAIN FIXED DEPOSIT RECEIPTS AMOUNTIN G TO RS. 37,86,125/- WERE FOUND IN THE NAME OF THE ASSESSEE. OUT OF THE AFORESAID, FIXED DEPOSITS AMOUNTING TO RS. 31,05,00 0/- WERE FOUND TO BE DEPOSITED IN THE FY 2008-09 AND 2009-10 AND THE BALANCE FDRS WERE OUT OF THE INTEREST ACCUMULATED O N THE EARLIER FDRS. AFTER CONSIDERING THE EXPLANATION OF THE ASS ESSEE, THE ASSESSING OFFICER WAS SATISFIED WITH SOURCE OF INVE STMENT IN FDR AMOUNTING TO RS. 10,75,000/-. HOWEVER, SO FAR AS T HE BALANCE AMOUNT OF RS. 20,30,000/- IS CONCERNED, THOUGH THE ASSESSEE EXPLAINED THAT THE DEPOSITS IN THE FDRS WERE MADE O UT OF HER UNDISCLOSED RENTAL RECEIPTS, WHICH ACCORDING TO THE ASSESSEE, ARE BEING DISCLOSED IN VARIOUS ASSESSMENT YEARS. HOWEVE R, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLAN ATION OF THE ASSESSEE AND TREATED THE INVESTMENT MADE IN FDRS AM OUNTING TO RS. 6,30,000/- FOR THE AY 2009-10 AND RS. 14,00,000 /- FOR AY 15 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA 2010-11 AS UNDISCLOSED INVESTMENT OF THE ASSESSEE U /S 69 OF THE IT ACT AND ADDED AN AMOUNT OF RS. 6,30,000/- FOR TH E IMPUGNED ASSESSMENT YEAR. 26. THE ASSESSEE BEING AGGRIEVED OF SUCH ADDITION P REFERRED AN APPEAL BEFORE THE CIT(A). 27. IN COURSE OF HEARING OF APPEAL BEFORE THE CIT(A ), THE ASSESSEE SUBMITTED A STATEMENT SHOWING THE SOURCES OF DEPOSIT IN THE FDRS AND SUBMITTED THAT THE DEPOSITS WERE MADE BY TRANSFER OF FUNDS FROM SAVINGS ACCOUNT HELD IN DIFFERENT BAN KS AND SOURCE OF DEPOSITS IN THOSE SAVINGS ACCOUNT WAS CASH BALAN CE AVAILABLE WITH THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT TH E ASSESSEE HAS BEEN DERIVING SUBSTANTIAL RENTAL INCOME WHICH WAS D EPOSITED IN HER SAVINGS BANK ACCOUNT. IT WAS SUBMITTED THAT IN AN EARLIER OCCASION THE ASSESSEE HAD DRAWN SOME AMOUNTS FROM T HOSE SAVINGS ACCOUNTS FOR HER PERSONAL EXPENSES AND THE CASH HAS BEEN DEPOSITED OUT OF SUCH ACCUMULATED WITHDRAWALS MADE OVER A PERIOD OF TIME WHICH WAS LATER USED FOR MAKING THE FDRS. THE CIT(A) DID NOT ACCEPT THE CONTENTIONS RAISED BY THE ASSESSEE AND HELD THAT THE WITHDRAWALS FROM BANK ACCOUNTS WERE M ADE FOR MEETING PERSONAL EXPENSES AND THERE IS NO EVIDENCE TO PROVE THAT THE AMOUNT WITHDRAWN FROM THE SAVINGS BANK ACCOUNT WERE AGAIN DEPOSITED IN THE BANK AND CONVERTED INTO FDRS. HE F URTHER OBSERVED THAT THE ASSESSEE HAD ALSO NOT DISCLOSED T HE FDRS EARLIER. WITH THE AFORESAID OBSERVATION, THE CIT(A) SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. 28. THE LEARNED AR REITERATING THE STAND TAKEN BEFO RE THE CIT(A) CONTENDED THAT THE ASSESSEE HAD BEEN EARNING SUBSTA NTIAL AMOUNT OF RENTAL INCOME WHICH WERE DEPOSITED INTO THE SAVI NG BANK 16 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA ACCOUNT HELD IN DIFFERENT BANKS BY THE ASSESSEE AND THE FDRS WERE OUT OF WITHDRAWALS MADE FROM THE SAVING BANK A CCOUNT. THE LEARNED AR REFERRING TO THE COMPUTATION OF INCOME F OR AY 2009- 10, WHICH IS AT PAGE 275 OF THE PAPER BOOK, SUBMIT TED THAT DURING THE YEAR THE ASSESSEE HAD RECEIVED RENTAL IN COME OF RS. 10,38,997/-. THE LEARNED AR FURTHER REFERRED TO THE STATEMENT OF BANK ACCOUNT AT PAGE 281 OF THE PAPER BOOK AND SUBM ITTED THAT THE FDRS WERE OUT OF DISCLOSED INCOME OF THE ASSESS EE, HENCE, CANNOT BE TREATED AS UNDISCLOSED INCOME. HE FURTHER SUBMITTED THAT THE DEPARTMENT HAVING NOT RAISED ANY DOUBT WIT H REGARD TO SOURCE OF DEPOSITS MADE IN THE SAVINGS BANK ACCOUNT , THE FDRS MADE OUT OF SUCH DEPOSITS IN THE SAVINGS BANK ACCO UNT CANNOT BE DOUBTED. TO SUBSTANTIATE HIS CONTENTION THAT THE AS SESSEE WAS HAVING SUFFICIENT SOURCE TO INVEST IN THE FDRS THE LEARNED AR ALSO SUBMITTED THE BALANCE SHEET, INCOME AND EXPENDITURE ACCOUNT OF THE ASSESSEE FOR THE YEAR ENDING 31/03/2006 TO 31/0 3/2010. 29. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND SUPPORTING THE ORDER OF THE CIT(A) SUBMITTED THAT T HE ASSESSEE HAVING NOT FURNISHED ANY EVIDENCE TO SHOW THAT THE WITHDRAWALS MADE WAS NOT UTILIZED FOR PERSONAL EXPENSES BUT WER E DEPOSITED BACK FOR MAKING FDRS, THE ADDITION IS JUSTIFIED. 30. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIALS ON RECORD. IT IS THE CONTENTI ON OF THE ASSESSEE BEFORE THE CIT(A) AS WELL AS BEFORE US THA T THE FDRS WERE MADE BY MAKING WITHDRAWALS FROM THE SAVINGS BA NK OF ACCOUNT. IN THIS CONTEXT, THE LEARNED AR REFERRED T O THE STATEMENT BANK ACCOUNT AT PAGE 281 OF THE PAPER BOOK, A PERUS AL OF WHICH, TO SOME EXTENT INDICATES INVESTMENT IN FDR BY WITHD RAWING FROM THE SAVINGS BANK ACCOUNT. THE ASSESSEE HAS ALSO SUB MITTED HIS 17 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA INCOME AND EXPENDITURE ACCOUNT AND BALANCE SHEET FO R THE YEAR ENDING 31/03/2006 TO 31/03/2010 TO DEMONSTRATE THAT SHE HAD SUFFICIENT SOURCE TO INVEST IN THE FDRS. IN OUR VI EW, THE CONTENTION RAISED BY THE ASSESSEE REQUIRES FRESH CO NSIDERATION AS WE FIND THAT NEITHER THE ASSESSING OFFICER NOR THE CIT(A) HAS PROPERLY APPRECIATED THE EXPLANATION OF THE ASSESSE E. IN THESE CIRCUMSTANCES, IN OUR VIEW, IT WOULD BE JUST AND PR OPER TO REMIT THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICE R WHO SHALL CONSIDER THE ISSUE AFRESH AFTER TAKING INTO ACCOUNT THE STATEMENT OF AFFAIRS OF THE ASSESSEE SUBMITTED BEFORE US IN C OURSE OF HEARING AND ALSO MAKING THOROUGH SCRUTINY OF THE BANK ACCOU NTS OF THE ASSESSEE TO FIND OUT THE VERACITY OF THE CLAIM MADE BY THE ASSESSEE AS TO WHETHER ACTUALLY THE FDRS WERE MADE OUT OF DEPOSITS IN THE SAVINGS BANK ACCOUNT. IN CASE THE ASSESSEE IS ABLE TO ESTABLISH THE FACT THAT THE FDRS IN FACT WE RE MADE OUT OF THE WITHDRAWALS FROM THE SAVINGS BANK ACCOUNT THEN NO ADDITION POSSIBLY CAN BE MADE U/S 69 OF THE ACT. THE ASSESSI NG OFFICER SHALL AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE MATTER. 31. THE NEXT ISSUE AS RAISED IN GROUND NO. 3 RELATE S TO THE ADDITION OF RS. 9,11,314/- BEING THE CLAIM MADE BY THE ASSESSEE TOWARDS DEVELOPMENT EXPENDITURE INCURRED BY HER. 32. WE HAVE ALREADY DECIDED IDENTICAL ISSUE IN ASSE SSEES APPEAL IN ITA NO. 332/HYD/13 FOR AY 2006-07 VIDE PARA 10 O F THIS ORDER. FOLLOWING OUR FINDING THEREIN, WE SUSTAIN THE ADDIT ION AND UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE, AS IN OUR VI EW THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE TO SUBSTANTIATE THE CLAIM OF EXPENDITURE. 18 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA 33. IN THE RESULT, APPEAL BEING ITA NO. 334/HYD/201 3 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 335/H/2013 FOR AY 2010-11 34. GROUND 2 IS AS FOLLOWS: THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 14,00,000/- MADE BY THE AO WITHOUT CONSIDERING THE FACT THAT THE FDRS DO NOT REPRESENT THE UNDISCLOSED INCO ME OF THE ASSESSEE HEREIN. BOTH THE AO AND THE CIT(A) OUG HT TO HAVE HELD THAT THE FDRS AGGREGATING TO RS. 14,00,00 0/- WERE PROPERLY EXPLAINED. 35. SIMILAR GROUND HAS BEEN DECIDED BY US IN ITA NO . 334/HYD/13 VIDE PARA 30 (SUPRA). FOLLOWING THE CONC LUSIONS DRAWN THEREIN, WE REMIT THE ISSUE TO THE FILE OF TH E AO WITH IDENTICAL DIRECTIONS. 36. IN GROUND NO. 3, THE ASSESSEE HAS ASSAILED THE ACTION OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS. 60 LAKHS A S UNDISCLOSED INCOME OF THE IMPUGNED ASSESSMENT YEAR. 37. BRIEFLY THE FACTS RELATING TO THE ISSUE IN DISP UTE ARE, DURING THE SEARCH AND SEIZURE OPERATION CONDUCTED IN THE R ESIDENTIAL PREMISES OF SHRI M. NARASAIAH AND THE ASSESSEE, A R ECEIPT PURPORTEDLY GIVEN BY SHRI N. SOMA (AS MENTIONED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER) ACKNOWLE DGING RECEIPT OF RS. 60 LAKHS ON 05/01/2010 WAS FOUND AND SEIZED. IN COURSE OF THE ASSESSMENT PROCEEDING, WHEN THE ASSESSEE WAS AS KED TO EXPLAIN THE NATURE OF TRANSACTION AND THE DETAILS R EGARDING THE RECEIPT OF RS. 60 LAKHS, IT WAS EXPLAINED BY THE AS SESSEE THAT THE RECEIPT DOES NOT BELONG TO HER AND SHE IS NOT AWARE OF THE RECEIPT. THE ASSESSING OFFICER DISBELIEVING THE EXP LANATION OF THE 19 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA ASSESSEE TREATED THE AMOUNT OF RS. 60 LAKHS AS UNDI SCLOSED INCOME OF THE ASSESSEE AND ADDED THE SAME TO HER RE TURNED INCOME. 38. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE CIT(A). 39. IN THE COURSE OF HEARING BEFORE THE CIT(A), IT WAS CONTENDED BY THE ASSESSEE THAT THE RECEIPT HAD ACTUALLY BEEN ACKNOWLEDGED BY ONE SHRI N. SHARMA, WHO WAS THE CASHIER OF M/S S HANTA SHRIRAM CONSTRUCTIONS PVT. LTD. IT WAS FURTHER CONT ENDED BY THE ASSESSEE THAT SINCE THE OFFICE PREMISES OF M/S SHAN TA SHRIRAM CONSTRUCTIONS PVT. LTD.IS LOCATED BESIDE THE ASSESS EES RESIDENCE, THE CASHIER USUALLY KEEPS THE CASH FOR SAFE CUSTODY AT THE ASSESSEES PREMISES AFTER CLOSING OF THE OFFICE AND THE AFORESAID AMOUNT OF RS. 60 LAKHS WAS RECEIVED BY THE ASSESSEE FROM THE CASHIER SHRI N. SHARMA FOR SAFE CUSTODY. IT WAS SUB MITTED THAT THE SAID AMOUNT OF RS. 60 LAKHS WAS AGAIN TAKEN BAC K BY THE CASHIER ON THE SUBSEQUENT DAY AND AS A TOKEN OF ACK NOWLEDGMENT SHRI N. SHARMA GAVE AN ACKNOWLEDGMENT IN THE FORM O F A RECEIPT DULY SPECIFYING THE DENOMINATION. IT WAS FURTHER SU BMITTED THAT THE ASSESSEE IS NOT ENGAGED IN ANY BUSINESS AND THE REFORE ATTRIBUTING THE AMOUNT OF RS. 60 LAKHS AS HER UNDIS CLOSED INCOME IS INCORRECT AS IT IS BASED MERELY ON AN ACKNOWLEDG MENT OF RECEIPT WHICH DOES NOT CONTAIN THE NAME OF THE ASSESSEE. T HE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT THE SEIZED DOCUMENT IS CLEARLY A RECEIPT DULY DATED AND SIGNED BY THE RECIPIENT AND IT ALSO MENTIONS THE DENOMINATION S OF THE NOTES TOTALING TO RS. 60 LAKHS. THE CIT(A) FURTHER OBSERV ED THAT WHILE THE ASSESSEE IN COURSE OF SEARCH AS WELL AS DURING THE ASSESSMENT PROCEEDING HAS COMPLETELY DISOWNED THE RECEIPT BY S TATING THAT THE RECEIPT DOES NOT BELONG TO HER NOR SHE WAS AWAR E OF THE 20 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA RECEIPT ITSELF. HOWEVER, IN THE COURSE OF PROCEEDIN G BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE HAD CHANGED HER STAND AND EXPLAINED THAT THE CASHIER OF M/S SHANTA SHRIRAM C ONSTRUCTIONS PVT. LTD. SHRI N. SHARMA HAD KEPT THE AMOUNT OF RS. 60 LAKHS WITH THE ASSESSEE WHICH HE TOOK BACK ON THE SUBSEQU ENT DATE BY GIVING A RECEIPT IN ACKNOWLEDGMENT OF RECEIVING THE AMOUNT OF RS. 60 LAKHS. THE CIT(A) FURTHER WAS OF THE VIEW THAT I F IT WAS A REGULAR PRACTICE BY THE CASHIER OF M/S SHANTA SHRIR AM CONSTRUCTIONS PVT. LTD. OF KEEPING CASH FOR SAFE CU STODY AT THE ASSESSEES PREMISES AT THE CLOSING OF THE OFFICE, A S CLAIMED BY THE ASSESSEE, THEN THE ASSESSEE SHOULD HAVE GIVEN AN EX PLANATION TO THAT EFFECT IMMEDIATELY IN THE COURSE OF SEARCH AND EVEN AT THE TIME OF ASSESSMENT PROCEEDING. HE FURTHER OBSERVED THAT THE ASSESSEE ALSO FAILED TO PRODUCE ANY CONTEMPORANEOUS RECORD TO SUBSTANTIATE THE MOVEMENT OF CASH NOR THE ASSESSEE WAS ABLE TO PRODUCE ANY OTHER EVIDENCE IN RESPECT OF DAILY REMO VAL OF CASH FROM OFFICE TO RESIDENCE AND RESIDENCE TO OFFICE. O N THE BASIS OF THE AFORESAID FACTS AND ON RELYING UPON A DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF CIT V/S. ANIL KUMAR BH ATIA [1626 AND OTHERS OF 2010, DATED 07/08/2012], THE CIT(A) HELD THAT THE PRIMARY DUTY WAS ON THE ASSESSEE TO EXPLAIN THE DOC UMENTS FOUND IN THE COURSE OF SEARCH AND MERE UNSUBSTANTIATED EX PLANATION CANNOT ABSOLVE THE ASSESSEE FROM THE DUTY OF SATISF ACTORILY EXPLAINING THE POSSESSION OF THE DOCUMENT, WHICH CL EARLY STATED ABOUT THE ADVANCEMENT OF CASH OF RS. 60 LAKHS. ACCO RDINGLY, THE CIT(A) UPHELD THE ADDITION OF RS. 60 LAKHS. 40. THE LEARNED AR REITERATING THE CONTENTIONS RAIS ED AT THE TIME OF FIRST APPELLATE PROCEEDINGS SUBMITTED THAT THE O FFICE PREMISES OF M/S SHANTA SHRIRAM CONSTRUCTIONS PVT. LTD. AND T HE RESIDENTIAL 21 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA PREMISES OF THE ASSESSEE ARE LOCATED SIDE BY SIDE A ND IT IS ALSO A FACT THAT THE ASSESSEES HUSBAND SHRI M. NARASAIAH IS THE MANAGING DIRECT OF M/S SHANTA SHRIRAM CONSTRUCTIONS PVT. LTD. THEREFORE AS PER USUAL PRACTICE THE CASHIER OF M/S SHANTA SHRIRAM CONSTRUCTIONS PVT. LTD. AFTER CLOSURE OF OFFICE USE D TO KEEP THE CASH IN THE SAFE CUSTODY OF THE ASSESSEE WHICH IS R ETURNED BACK TO HIM ON THE SUBSEQUENT DATE. IT WAS FURTHER CONTENDE D THAT WHEN A RECEIPT IS GIVEN THEN THE PURPOSE FOR WHICH THE M ONEY IS GIVEN ALSO MENTIONED IN THE RECEIPT WHEREAS IN THE SEIZED RECEIPT NOTHING IS MENTIONED ABOUT THE PURPOSE FOR WHICH TH E MONEY IS GIVEN. IT WAS FURTHER CONTENDED THAT THE RECEIPT AL SO DOES NOT MENTION THE NAME OF THE ASSESSEE. THEREFORE, ONLY BECAUSE THE RECEIPT WAS SEIZED IT CANNOT BE SAID THAT THE AMOUN T OF RS. 60 LAKHS MENTIONED THEREIN WAS GIVEN BY THE ASSESSEE A ND IT WAS THE UNDISCLOSED INCOME OF THE ASSESSEE. THE LEARNED AR FURTHER CONTENDED THAT WHEN AN EXPLANATION IS FURNISHED IT HAS TO BE EXAMINED IN THE PROPER PERSPECTIVE. 41. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUBMITTED THAT THE ASSESSEE GAVE CONTRADICTOR Y STATEMENTS AT DIFFERENT STAGES. WHILE DURING THE COURSE OF SEA RCH AND SEIZURE OPERATION AND AS WELL AS DURING THE ASSESSMENT PROC EEDING, THE ASSESSEE HAS CONTENDED THAT SHE WAS NOT AWARE OF TH E RECEIPT. HOWEVER, LATER IN THE PROCEEDING BEFORE THE CIT(A) SHE TOOK A COMPLETELY DIFFERENT STAND BY STATING THAT THE CASH IER OF THE COMPANY M/S SHANTA SHRIRAM CONSTRUCTIONS PVT. LTD. USED TO KEEP THE CASH WITH HER WHEN THE OFFICE WAS CLOSED. THE LEARNED DEPARTMENTAL REPRESENTATIVE FURTHER CONTENDED THAT AS OBSERVED BY THE CIT(A) NO CONTEMPORANEOUS RECORD NOR ANY EVI DENCE COULD BE PRODUCED BY THE ASSESSEE TO SUBSTANTIATE THE MOV EMENT OF CASH FROM OFFICE TO RESIDENCE AND RESIDENCE TO OFFI CE. HE FURTHER 22 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA CONTENDED THAT DURING THE COURSE OF APPEAL PROCEEDI NG FOR THE AY 2008-09 THE ASSESSEE HAD STATED THAT SHE WAS NOT IN TERESTED IN HAVING ANY LINKS WITH THE COMPANY M/S SHANTA SHRIRA M CONSTRUCTIONS PVT. LTD. UNDER SUCH CIRCUMSTANCES TH EREFORE IT IS NOT POSSIBLE TO BELIEVE THAT THE ASSESSEE RECEIVES CASH PERTAINING TO THE BUSINESS OF M/S SHANTA SHRIRAM CONSTRUCTIONS PVT. LTD. FROM THE CASHIER ON REGULAR BASIS AND RETURNS THE S AME. 42. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIALS ON RECORD. WE HAVE ALSO PERUS ED THE ORDERS OF THE LOWER AUTHORITIES. UNDISPUTEDLY, THE SEIZED DOCUMENT IS A RECEIPT GIVEN BY ONE MR. N. SOMA AS RECORDED BY THE ASSESSING OFFICER BUT CLAIMED BY THE ASSESSEE TO BE MR. SHARM A, THE CASHIER OF M/S SHANTA SHRIRAM CONSTRUCTIONS PVT. LTD. ACKNO WLEDGING RECEIPT OF CASH OF RS. 60 LAKHS ON 05/01/2010 IN DI FFERENT DENOMINATIONS. IT IS ALSO NOT DISPUTED THAT THE AFO RESAID RECEIPT WAS FOUND FROM THE PREMISES OF THE ASSESSEE AND HER HUSBAND SHRI M. NARASAIAH DURING THE SEARCH AND SEIZURE OPE RATION CONDUCTED THEREIN. IT IS ALSO A FACT ON RECORD THAT IN COURSE OF SEARCH & SEIZURE OPERATION AS WELL AS DURING THE AS SESSMENT PROCEEDING THE ASSESSEE HAS COMPLETELY DISOWNED THE RECEIPT BY STATING THAT IT NEITHER BELONGS TO HER NOR SHE IS A WARE OF ANY SUCH RECEIPT. HOWEVER, DURING THE PROCEEDING BEFORE THE CIT(A) THE ASSESSEE HAD CHANGED HER STAND BY CONTENDING THAT C ASH BELONGING TO M/S SHANTA SHRIRAM CONSTRUCTIONS PVT. LTD. WAS USUALLY KEPT BY THE CASHIER SHRI N. SHARMA WITH THE ASSESSEE AFTER CLOSURE OF THE OFFICE AND ON THE SUBSEQUENT D AY WHILE TAKING BACK THE CASH HE HAS GIVEN THE RECEIPT. IF AT ALL I T WAS A FACT THEN THE ASSESSEE VERY WELL COULD HAVE STATED SUCH AT TH E TIME OF SEARCH AND SEIZURE OPERATION AS WELL AS AT THE TIME OF ASSESSMENT PROCEEDING. HOWEVER, THE ASSESSEE EXPRESSED COMPLE TE 23 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA IGNORANCE ABOUT SUCH RECEIPT. ONLY AT THE FIRST APP ELLATE STAGE THE ASSESSEE CAME UP WITH AN EXPLANATION TO EXPLAIN EXI STENCE OF SUCH RECEIPT FOUND DURING SEARCH. SECTION 132(4A) O F THE ACT MANDATES THAT ANY DOCUMENT/BOOKS OF ACCOUNT FOUND D URING SEARCH FROM THE POSSESSION OR CONTROL OF A PARTICUL AR ASSESSEE WOULD BE DEEMED TO BE BELONGING TO HIM. HOWEVER, SU CH PRESUMPTION IS A REBUTTABLE ONE. THE ASSESSEE CAN R EBUT SUCH PRESUMPTION BY FURNISHING SATISFACTORY EXPLANATION. WHEN A PARTICULAR DOCUMENT SEIZED FROM THE ASSESSEE DISCLO SES TRANSFER OF CASH, DUTY IS CAST UPON THE ASSESSEE TO SATISFAC TORILY EXPLAIN IT. ANY EXPLANATION SUBMITTED BY THE ASSESSEE IS NOT AC CEPTABLE AND CANNOT BE CONSIDERED TO BE A GOOD EXPLANATION. THE EXPLANATION FURNISHED MUST BE TRUSTWORTHY AND BACKED BY SUPPORT ING EVIDENCE. IN THE PRESENT CASE, THOUGH, IT IS THE CL AIM OF THE ASSESSEE THAT THE CASHIER OF M/S SHANTA SHRIRAM CON STRUCTIONS PVT. LTD. SHRI N. SHARMA USED TO KEEP THE CASH WIT H THE ASSESSEE FOR SAFE CUSTODY BUT NO CORROBORATIVE EVIDENCE HAS BEEN SUBMITTED TO SUBSTANTIATE SUCH FACT BY EITHER PRODU CING SHRI N. SHARMA FOR EXAMINATION OR SUBMITTING AN AFFIDAVIT F ROM HIM. THE DEPARTMENT HAS ALSO NOT MADE ANY ATTEMPT TO ASCERTA IN THE VERACITY OF EXPLANATION FURNISHED BY THE ASSESSEE B Y GETTING CROSS VERIFIED FROM SHRI N. SHARMA (N. SOMA). SINCE THE ADDITION OF RS. 60 LAKHS HAS BEEN MADE SOLELY ON THE BASIS OF T HE SEIZED RECEIPT OF SHRI N. SHARMA (N. SOMA) EXAMINATION OF SHRI N. SHARMA (N.SOMA) IS OF UTMOST IMPORTANCE TO FIND OUT AUTHENTICITY OF ASSESSEES EXPLANATION. IN THE AFORESAID VIEW OF THE MATTER, WE REMIT THIS ISSUE BACK TO THE FILE OF THE AO AND DIR ECTING HIM TO DECIDE IT AFRESH AFTER EXAMINING SHRI N. SHARMA (N. SOMA) BY ISSUING SUMMONS TO HIM. WE ALSO DIRECT THE ASSESSEE TO COOPERATE IN THE MATTER BY ENSUING APPEARANCE OF SHRI N. SHAR MA (N. SOMA) BEFORE THE AO IN THE PROCEEDING. IN CASE SHRI N.SHA RMA(N. SOMA) 24 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA DOES NOT APPEAR IN RESPONSE TO THE SUMMONS OR THERE IS NON- COOPERATION ON THE PART OF THE ASSESSEE, THE AO MAY DECIDE THE ISSUE ON THE BASIS OF MATERIALS ON RECORD AND IN A CCORDANCE WITH LAW. THE AO SHALL AFFORD A REASONABLE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. THIS GROUND IS ALLOWED FOR STATIST ICAL PURPOSES. 43. IN THE RESULT, APPEAL BEING ITA NO. 335/HYD/201 3 IS ALLOWED FOR STATISTICAL PURPOSES. 44. TO SUM UP, ITA NO. 332/HYD/13 FOR AY 2006-07 IS DISMISSED, ITA NO. 333/HYD/13 FOR AY 2008-09 IS ALL OWED, ITA NOS. 334/HYD/13 IS PARTLY ALLOWED FOR STATISTICAL P URPOSES AND ITA NO. 335/HYD/13 IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 14/08/2013. SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMB ER HYDERABAD, DATED: 14 TH AUGUST, 2013. KV COPY TO:- 1) MANJULA NARSA C/O S. RAMA RAO, ADVOCATE, 3-6-643 , SHRIYAS ELEGANCE, FLAT NO. 102, ST. NO. 9, HIMAYAT NAGAR, HYDERABAD 29. 2) DCIT, CENTRAL CIRCLE - 2, HYDERABAD 3) CIT(A)-I, HYDERABAD. 4) CIT(CENTRAL), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T ., HYDERABAD. 25 ITA NOS. 332, 333, 334 & 335/HYD/2013 MANJULA NARSA S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER