M Raja Sekhar Reddy, Secunderabad V. Dy.CIT, Central Circle-2, Hyderabad

ITA 444/HYD/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2889 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 02-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Business income; Search and seizure; Document seized; Additional evidence; Corroborative evidences; Documents seized
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO. A.Y. APPELLANT RESPONDENT 443/HYD/2013 2003-04 MR. M. RAJASEKHAR REDDY, PLOT NO.6, TRIMURTHY COLONY, MAHINDRA HILLS, SECUNDERABAD. DCIT, C.C. 2, HYDERABAD 444/HYD/2013 2004-05 445/HYD/2013 2006-07 446/HYD/2013 2008-09 447/HYD/2013 2009-10 573/HYD/2013 2007-08 FOR ASSESSEE : MR. S. RAMA RAO FOR REVENUE : MR. SOLGY JOSE T. KOTTARAM DATE OF HEARING : 20.03.2014 DATE OF PRONOUNCEMENT : 09.04.2014 ORDER PER BENCH THESE APPEALS ARE BY ASSESSEE CONSEQUENT TO THE COMMON ORDER PASSED BY THE CIT(A)-I, HYDERABAD DATE D 26.12.2012 AGAINST THE ASSESSMENT ORDERS PASSED UND ER SECTION 143(3) READ WITH SECTION 153C OF THE I.T. A CT. THE ASSESSEE HAS RAISED VARIOUS GROUNDS IN THESE APPEAL S, MAINLY ON SUSTAINING VARIOUS ADDITIONS MADE BY THE A.O. SU CH AS TREATING THE AGRICULTURAL INCOMES AS INCOME FROM OT HER SOURCES, DISALLOWING CHIT LOSS CLAIMED AND THE ADDI TIONS MADE AS UNDISCLOSED BUSINESS INCOME. 2. BRIEFLY STATED, SEARCH AND SEIZURE OPERATION HA VE BEEN CARRIED OUT IN THE CASE OF M/S. SAINATH ESTATE S ON 17.03.2009. DURING THE COURSE OF SEARCH, CERTAIN DO CUMENTARY EVIDENCES PERTAINING TO THE ASSESSEE WERE FOUND AND SEIZED. ACCORDINGLY, A NOTICES U/S. 153C WERE ISSUED CALLIN G FOR 2 ITA.NOS.443 TO 447 &573/HYD/2013 MR. M. RAJASEKHAR REDDY, SECUNDERABAD. RETURNS FOR THE ASSESSMENT YEARS 2004-05 TO 2008-09 . THE ASSESSEE FILED THE RETURNS OF INCOME FOR THE YEARS UNDER APPEAL ON 19.11.2010 AS UNDER : A.Y. INCOME RETURNED (RS.) AGRI. INCOME (RS.) 2003-04 2,060/- 43,800/- 2004-05 60,400/- ---- 2006-07 1,80,310/- 4,25,000/- 2007-08 4,15,120/- 4,72,646/- 2008-09 4,76,580/- ------ 2009-10 2,76,130/- ------- 2.1. THE ASSESSEE HAS DECLARED AGRICULTURAL INCOME IN ASSESSMENT YEARS 2003-04, 2006-07 AND 2007-08 WHICH WAS TREATED BY THE A.O. AS INCOME FROM OTHER SOURCES ON THE REASON THAT ASSESSEE DO NOT OWN ANY AGRICULTURAL LA ND, AS SEEN FROM THE STATEMENTS OF INCOME. LD. CIT(A) REFUSED T O ADMIT THE ADDITIONAL EVIDENCE FURNISHED BEFORE HIM IN THE FOR M OF LAND HOLDINGS BY HIM AND OTHER FAMILY MEMBERS, CONFIRMIN G THE AGRICULTURAL INCOME AS SUCH. 2.2. LD. COUNSEL, SUBMITTED THAT ASSESSEE HAS FILE D ORIGINAL RETURN OF INCOME IN WHICH THESE AGRICULTUR AL INCOMES WERE DECLARED AND FURTHER THERE WAS NO INCRIMINATIN G MATERIAL IN THE SEARCH AND SEIZURE PROCEEDINGS. THEREFORE, A CTION OF THE A.O. IS NOT WARRANTED. 2.3. LD. D.R. HOWEVER, SUPPORTED THE ORDERS OF THE A.O. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE OPINION THAT A.O. HAS NOT EXAMINED THE ISSUE PR OPERLY. IT WAS THE SUBMISSION OF THE ASSESSEE THAT HE HAS AC.2 .02 GUNTAS OF LAND WHILE HIS WIFE HAS AC.21.19 GUNTAS AND HIS OTHER FAMILY MEMBERS OWN AGRICULTURAL LANDS TO AN EXTENT OF AC.4 3.00 AND 3 ITA.NOS.443 TO 447 &573/HYD/2013 MR. M. RAJASEKHAR REDDY, SECUNDERABAD. FILED SUPPORTING EVIDENCE OF MRO CERTIFICATES. IN O UR OPINION, THIS MATERIAL CANNOT BE REJECTED WITHOUT BEING EXAM INED. IN VIEW OF THIS, WE ARE OF THE OPINION THAT A.O. SHOUL D ENQUIRE ABOUT THESE LAND HOLDINGS AND INCOME DECLARED. MORE OVER, THE A.O. WAS NOT AWARE THAT THE ASSESSEE HAS FILED RETU RNS ORIGINALLY IN THE IMPUGNED ASSESSMENT YEARS. THESE EVIDENCES ARE FILED BEFORE US AND THEREFORE, A.O. SHOULD ENQU IRE WHETHER ANY PROCEEDINGS HAVE BEEN INITIATED ON THE RETURNS ORIGINALLY FILED IN TIME IN THE RESPECTIVE ASSESSMENT YEARS. I N CASE ASSESSEE HAS FILED RETURNS, THE PROCEEDINGS MIGHT H AVE BECOME FINAL, IF NO APPEALS ARE PENDING. IN THAT CASE, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL, A.O. CANNOT ENQUIRE ABO UT THE INCOMES ORIGINALLY DECLARED AND CONCLUDED. THEREFOR E, THESE ASPECTS REQUIRE FRESH EXAMINATION BY THE A.O. IN TH E INTEREST OF JUSTICE, WE RESTORE THE ISSUE TO THE FILE OF THE A. O. TO EXAMINE THE ISSUE OF AGRICULTURAL INCOME RAISED IN THE GROU NDS IN RESPECTIVE ASSESSMENT YEARS. GROUNDS ARE ACCORDINGL Y ALLOWED FOR STATISTICAL PURPOSES. 4. THE OTHER ISSUE FOR CONSIDERATION IS THE DISALLOWANCE OF CHIT LOSS OF RS.1,02,338/- IN A.Y. 2004-05. HERE ALSO, THE A.O. DISALLOWED THE CHIT LOSS CLAIME D ON THE REASON THAT ASSESSEE HAS NOT FURNISHED ANY EVIDENCE . ASSESSEE FURNISHED A CERTIFICATE FROM M/S. SRIRAM CHITS DATE D 31.11.2009 TO THE EFFECT THAT ASSESSEE HAD CHIT LOS SES OF RS.1,29,500/- IN THE AUCTION DATED 23.06.2002. LD. CIT(A), DID NOT AGREE ON THE REASON THAT CLAIM WAS MADE IN SUBS EQUENT ASSESSMENT YEARS. IT WAS THE SUBMISSION THAT ASSESS EE HAS CLAIMED THE LOSS ON CONCLUSION OF THE CHIT PERIOD, EVEN THOUGH THE CHIT WAS AUCTIONED ON 23.06.2002 AND LOSS WAS C ERTIFIED BY M/S. SREERAM CHITS. 4 ITA.NOS.443 TO 447 &573/HYD/2013 MR. M. RAJASEKHAR REDDY, SECUNDERABAD. 4.1. WE NOTICED THAT ASSESSEE CLAIMED CHIT LOSS IN THE ORIGINAL RETURN FILED. IT WAS ALSO SUBMISSION THAT LOSS WAS CLAIMED ON CONCLUSION OF CHIT. THESE ASPECTS ARE N OT EXAMINED BY THE A.O. NOR HE HAD THE BENEFIT OF CERTIFICATE F ROM M/S. SREERAM CHITS. WE ARE OF THE OPINION THAT THIS ISS UE HAS TO BE RESTORED TO THE FILE OF THE A.O. FOR RE-EXAMINATION IN THE LIGHT OF EVIDENCE FURNISHED. AS ALREADY STATED, IN CASE PROC EEDINGS FOR A.Y. 2004-05 WERE ALREADY CONCLUDED ON ORIGINAL RET URN, A.O. CANNOT MAKE THE DISALLOWANCE IN THE PROCEEDINGS UND ER SECTION 153C IN THE ABSENCE OF ANY INCRIMINATING MA TERIAL. THEREFORE, TO EXAMINE THESE ASPECTS, THE ISSUE IS R ESTORED TO THE FILE OF A.O. THIS GROUND IS ACCORDINGLY CONSIDE RED AS ALLOWED FOR STATISTICAL PURPOSES. 5. THE THIRD ISSUE IN THIS APPEAL IS WITH REFERENC E TO ADDITION OF AMOUNTS STATED TO HAVE BEEN RECEIVED FR OM M/S. SAINATH ESTATES PVT. LTD. CONSEQUENT TO SEARCH AND SEIZURE PROCEEDINGS IN THE CASE OF M/S. SAINATH ESTATES PVT . LTD. AND ON THE STATEMENT OF MANAGING DIRECTOR OF THE SAID C OMPANY MR. K. PREMSAGAR RAO, A.O. BROUGHT THE AMOUNTS OF R S.66 LAKHS, RS. 22 LAKHS AND RS.13 LAKHS RESPECTIVELY IN A.YS. 2007-08, 2008-09 AND 2009-10 AS UNDISCLOSED BUSINES S INCOME. IT WAS THE SUBMISSION OF THE ASSESSEE THAT EVEN THOUGH CHEQUES TO THE TUNE OF RS.1.01 CRORES WERE I SSUED BY MANAGING DIRECTOR OF M/S. SAINATH ESTATES PVT. LTD . ONLY AN AMOUNT OF RS. 7 LAKHS WAS CLEARED ON 16.03.2008 WHE REAS, ASSESSEE RECEIVED ONLY AMOUNT OF RS. 95 LAKHS ( MOS TLY IN CASH) AND NOT ENTIRE RS.1.01 CRORES. INSPITE OF RECORDING THE FACTS BOTH BY INVESTIGATION WING AND BY THE A.O. THAT ONL Y AMOUNT OF RS. 7 LAKHS WAS RECEIVED BY CHEQUE AND REMAINING AMOUNT WAS RECEIVED BY WAY OF CASH, THE A.O. BROUGHT TO TA X AN AMOUNT OF RS. 1.01 CRORES. ASSESSEES CONTENTION BE FORE THE 5 ITA.NOS.443 TO 447 &573/HYD/2013 MR. M. RAJASEKHAR REDDY, SECUNDERABAD. A.O. WAS THAT THE AMOUNT WAS RECEIVED FROM MR. PREM SAGAR RAO FOR SETTLEMENT OF BOUNDARY DISPUTE BETWEEN HIM AND M/S PRAGATOOLS EMPLOYEES COOPERATIVE HOUSING SOCIETY LT D. AND AS AN AGENT OF THE SAID HOUSING SOCIETY, ASSESSEE RECE IVED MONEY AS HE WAS AUTHORIZED BY WAY OF DEVELOPMENT AGREEMEN T TO CONSTRUCT 234 FLATS ON TURN KEY BASIS AND ALSO TO P ROTECT THE SAID LAND. SINCE THE MONEY WAS RECEIVED ON BEHALF O F M/S PRAGATOOLS EMPLOYEES COOPERATIVE HOUSING SOCIETY LT D. IT IS NOT THE INCOME OF THE ASSESSEE. HOWEVER, A.O. REJEC TED THE CONTENTION AND RELYING ON THE USAGE OF RS. 1 LAKH O UT OF RS. 7 LAKH CREDITED IN THE BANK ACCOUNT, HE WAS OF THE OP INION THAT ASSESSEE WAS USING THE FUNDS PERSONALLY. NOT ONLY T HAT A.O. DID NOT AGREE WITH THE EVIDENCE FURNISHED LIKE PHOT OGRAPHS AND OTHER THINGS THAT HE HAS SPENT AN AMOUNT FOR DEVELO PMENT AS WELL AS FOR PROTECTION OF THE LAND ON BEHALF OF SOC IETY. THE A.O. DID NOT AGREE AND BROUGHT THE ENTIRE AMOUNT TO TAX IN THE RESPECTIVE ASSESSMENT YEARS. 6. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE, HOWEVER, DID NOT AGREE WITH THE SAME AND AFFIRMED ORDER OF AO BY STATING AS UNDER : 12.0 I HAVE GONE THROUGH THE FACTS OF THE CASE AND THE SUBMISSIONS O F THE APPELLANT. FROM THE DISCUSSIONS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, I T IS CLEAR THAT SEIZED DOCUMENTS CLEARLY SHOWED PAYMENTS MADE TO SHRI M.RAJA SEKHAR REDDY, THE APPELLANT IN THE FINA NCIAL YEARS 2006-07 AND 2007-08. ON BEING CONFRONTED WITH THE SAME, SHRI PREM SAGAR RAO CLEARLY STATED THAT RS.66,00,000/- , RS.22,00,000/- AND RS.13,00,000/- WERE PAID TO SHRI M. RAJA SEKHAR REDDY IN THE FINANCIAL YEARS 2006-07, 2007-08 AND 2008-09 RESPECTIVELY. EVEN THE PURPOSE OF THE SAID PAYMENTS WAS TO BE TO SETTLE TH E DISPUTES, AS PER THE COMPROMISE AGREEMENT WITH THE ORIGINAL OWNERS OF THE LAND. SUBSEQUENTLY, THE APPE LLANT ALSO, IN HIS DEPOSITION DATED 28-5-2009, ADMITTED H AVING RECEIVED PAYMENT TO THE EXTENT OF RS.95 LAKHS IN TH E 6 ITA.NOS.443 TO 447 &573/HYD/2013 MR. M. RAJASEKHAR REDDY, SECUNDERABAD. FINANCIAL YEARS 2006-07 AND 2007-08 FOR THIS PURPOS E. THEREFORE, THE FACTS EMERGING FROM THE SEIZED MATER IAL AND THE STATEMENTS CLEARLY ESTABLISH THAT THE APPELLANT HAD RECEIVED AT LEAST RS.95 LAKHS PERSONALLY FROM SHRI PREM SAGAR RAO IN THOSE YEARS TOWARDS SETTLEMENT OF DISP UTES. THIS FACT HAS NOT BEEN DENIED EVEN BY THE APPELLANT HOWEVER, AS PER THE SEIZED MATERIAL, THE ACTUAL AMO UNT IS RS.1,01,00,000/-. 12.1 AS REGARDS THE CLAIM THAT THE FUNDS WERE RECE IVED BY THE APPELLANT ON BEHALF OF THE SOCIETY, IT IS CL EAR THAT EVEN IF HE WAS AUTHORIZED BY THE PRAGA TOOLS HOUSING SOC IETY TO RECEIVE THE SAID MONEY ON ITS BEHALF, THERE WAS NO MANDATE IN THE SAID AGREEMENT CUM MEMORANDUM OF UNDERSTANDI NG THAT AFTER RECEIVING SUCH MONEY, THE SAME COULD HAV E BEEN DIRECTLY DEPOSITED IN THE APPELLANT'S ALE. ON THE O THER HAND, IT IS SEEN THAT THE ASSESSING OFFICER HAS VERY CLEA RLY DEMONSTRATED HOW THE AMOUNT OF RS.7 LAKHS RECEIVED BY CHEQUE FROM SHRI PREMSAGAR RAO, WAS DEPOSITED IN TH E PERSONAL BANK A/C OF THE APPELLANT AND APPROPRIATED FOR PERSONAL PURPOSES. SUCH UTILIZATION OF THE AMOUNT R ECEIVED TOWARDS SETTLEMENT OF DISPUTE FOR PERSONAL PURPOSES CLEARLY ESTABLISHES THAT THE AMOUNTS WERE RECEIVED IN HIS P ERSONAL CAPACITY ONLY. IT HAS ALSO BEEN BROUGHT OUT BY THE ASSESSING OFFICER AS TO HOW SOME MORE CHEQUES WERE PRESENTED BY THE APPELLANT FOR REALIZATION IN HIS PERSONAL A/C, THOU GH THOSE WERE DISHONOURED AND THE AMOUNTS WERE FINALLY SETTLED IN CASH BY M/S. SAINATH ESTATES PVT LTD. 12.2 AT THE SAME TIME, IT IS ALSO SEEN THAT THOUGH THE APPELLANT HAS CLAIMED THAT THE AMOUNTS WERE SPENT B Y HIM FOR SURVEY, EXCAVATIONS, LITIGATION, SITE DEVEL OPMENT ETC ON BEHALF OF THE PRAGA TOOLS HOUSING SOCIETY, N O EVIDENCE IN THIS REGARD COULD BE FURNISHED BY THE APPELLANT AT ANY STAGE, NOR THE SAID SOCIETY HAS CL AIMED HAVING ACCOUNTED FOR SUCH EXPENDITURE IN ITS BOOKS OF ACCOUNT. IT IS AN ESTABLISHED PRINCIPLE OF LAW THAT THE ONUS IS UPON THE PERSON WHO MAKES A CLAIM. IN THE INSTANT CASE, THE APPELLANT HAS AT EVERY STAGE EVEN FAILED TO FURNISH THE ADDRESS OF THE OFFICE BEARERS OF THE HOUSING SOCIETY, SO AS TO ENABLE THE ASSESSING OFFI CER TO VERIFY THE CLAIM SO MADE AT HIS END ALSO. IT IS ALS O CLEAR- THAT, MERE PHOTOGRAPHS CANNOT BE CONSIDERED AS SUFFICIENT EVIDENCE OF INCURRENCE OF DEVELOPMENT EXPENDITURE BY THE APPELLANT, EVEN ON BEHALF OF THE SOCIETY. 7 ITA.NOS.443 TO 447 &573/HYD/2013 MR. M. RAJASEKHAR REDDY, SECUNDERABAD. 12.3 AS REGARDS THE CONTENTION THAT THE APPELLANT HAD ONLY ACTED FOR THE SOCIETY IN THE CAPACITY OF DEVEL OPER- REPRESENTATIVE OF M/S. BHAGYASRI BUILDERS AND NOT I N HIS INDIVIDUAL CAPACITY, AND THEREFORE, PROCEEDINGS U/S .153C COULD NOT HAVE BEEN INITIATED IN HIS INDIVIDUAL CAS E, IT IS SEEN THAT THE ASSESSING OFFICER HAS CLEARLY BROUGHT OUT THAT EVEN THE SAID FIRM WAS A PROPRIETARY CONCERN O F THE APPELLANT'S WIFE ONLY AND THE APPELLANT WAS THE MANAGING PARTNER THEREOF. BESIDES, IT HAS ALSO BEEN BROUGHT ON RECORD THAT THE LAND IN QUESTION WAS NOT REGISTERED IN THE NAME OF THE HOUSING SOCIETY BUT O NLY MUTATED TO IT, WHICH GOES TO PROVE THAT THE HOUSING SOCIETY WAS ONLY A FACADE FOR RECEIVING THE SUM OF RS.1,01,00,000/- BY THE APPELLANT HIMSELF, WHICH WA S ULTIMATELY USED BY HIM FOR HIS OWN PURPOSES ONLY. THEREFORE, NO INFIRMITY CAN BE SAID TO EXIT IN THE INITIATION OF PROCEEDINGS U/S.153C OF THE ACT AGAINST THE APPE LLANT. 12.4 IN VIEW OF THE ABOVE DISCUSSION, FINDING NO INFIRMITY IN THE ACTION OF THE ASSESSING OFFICER, T HE ADDITIONS OF RS.66 LAKHS, RS.22 LAKHS AND RS.13 LAK HS IN THE ASSESSMENT YEARS 2007-08, 2008-09 AND 2009-10 RESPECTIVELY, ARE UPHELD AND THE GROUNDS RAISED IN THIS REGARD ARE DECIDED AGAINST THE APPELLANT. 7. CONTENDING THE ABOVE FINDINGS OF THE LD. CIT(A) , LD. COUNSEL REFERRED TO THE PAPER BOOK PLACED ON RE CORD CONTAINING PAGES 1 TO 185 TO SUBMIT THAT ASSESSEE H AS ENTERED INTO DEVELOPMENT AGREEMENT WITH M/S. PRAGATOOLS EMP LOYEES COOPERATIVE HOUSING SOCIETY LTD. KAVADIGUDA AND BY VIRTUE OF THE SAID AGREEMENT, HE HAS NOT ONLY TO CONSTRUCT 23 4 APARTMENTS BUT ALSO TO DEVELOP AND PROTECT THE LAND . HE REFERRED TO THE TERMS OF THE AGREEMENT THAT AT THE TIME OF AGREEMENT ITSELF SOME PART OF THE LAND WAS UNAUTHOR IZEDLY OCCUPIED BY SOME OUTSIDERS DUE TO ENCROACHMENTS AND AMOUNTS RECEIVED WARE PART OF ACTIVITY OF PROTECTIN G THE AREA AND SETTLEMENT OF DISPUTES. ACCORDINGLY, IT WAS SUB MISSION THAT ASSESSEE HAS RECEIVED THE AMOUNTS ON BEHALF OF THE COOPERATIVE SOCIETY. FURTHER, IT WAS CONTENDED THAT THERE WERE 8 ITA.NOS.443 TO 447 &573/HYD/2013 MR. M. RAJASEKHAR REDDY, SECUNDERABAD. PROCEEDINGS OF THE MRO REGARDING IMPLEMENTATION OF THE ORDERS OF THE HIGH COURT FOR MUTATION OF LAND IN FA VOUR OF COOPERATIVE SOCIETY AND ALSO ENQUIRY REPORT BY THE SUB- DIVISIONAL COOPERATIVE OFFICER, SECUNDERABAD AGAINS T THE AFFAIRS OF PRAGATOOLS EMPLOYEES COOPERATIVE HOUSING SOCIETY LTD., KAVADIGUDA TO JUSTIFY THAT ASSESSEE HAS SPENT SOME AMOUNT FOR CONSTRUCTION OF BUILDING AS WELL AS LEVE LING THE LAND. IT WAS FURTHER SUBMITTED THAT ASSESSEE HAS TA KEN STEPS AND ALSO RECEIVED COMPLAINTS AGAINST AND ALSO HAD L OT OF COURT CASES CONTESTED WITH REFERENCE TO THE SAID COOPERAT IVE SOCIETY LAND AND THEREFORE, THE RECEIPTS FROM MR. PREMSAGAR RAO RECEIVED IN SETTLEMENT OF LAND, IS NOT HIS INCOME. AT BEST, THE AMOUNT CAN BE ADJUSTED TOWARDS THE FUTURE LIABILITY LIKE CONSTRUCTION OF FLATS AND ALSO FOR THE EXPENDITURE INCURRED. THEREFORE, ACTION OF THE A.O. IN BRINGING TO TAX EN TIRE AMOUNT IS NOT CORRECT. 8. LD. D.R. HOWEVER, DID NOT AGREE WITH THE CONTENTION OF THE LD. A.R. HE WAS OF THE OPINION TH AT ENQUIRY REPORT MENTIONED THAT ASSESSEE WAS A LAND GRABBER A ND IN COALITION WITH THE THEN PRESIDENT, THEY HAVE SETTLE D THE MATTERS AND RECEIVED CONSIDERATION AND SINCE THE AMOUNTS WE RE UTILIZED FOR PERSONAL USE AS NOTED BY THE A.O. IN T HE ORDER IMPUGNED AMOUNTS ARE TO BE TREATED AS INCOME OF TH E ASSESSEE. 9. IN REPLY, LD. A.R. SUBMITTED THAT ASSESSEE IS N OT A LAND GRABBER AND IN FACT, THE AGREEMENT FOR DEVELOP MENT WAS ENTERED BY THE ASSISTANT REGISTRAR OF COOPERATIVE S OCIETY ON BEHALF OF PRAGATOOLS EMPLOYEES COOPERATIVE HOUSING SOCIETY LTD. KAVADIGUDA ON 18 TH DAY OF NOVEMBER, 2005 AND THEREFORE, THE FINDINGS OF THE LD. CIT(A) THAT HOUSING SOCIETY IS A FACADE 9 ITA.NOS.443 TO 447 &573/HYD/2013 MR. M. RAJASEKHAR REDDY, SECUNDERABAD. IS NOT CORRECT. FURTHER HE REFERRED TO THE TERMS AN D CONDITIONS TO SUBMIT THAT EVEN ON THE DAY OF AGREEMENT, THE SO CIETY WAS HAVING POSSESSION OF ONLY AC.22.00 OF LAND AND THER E WERE ENCROACHMENTS AND AS PER THE REPORT OF THE ENQUIRY OFFICER SUBSEQUENTLY, IT HAS FURTHER REDUCED. THEREFORE, IT WAS SUBMITTED THAT ASSESSEE WAS ACTING WITH DUE AUTHORI TY ON BEHALF OF THE SOCIETY. THEREFORE, AMOUNTS RECEIVED CANNOT BE BROUGHT TO TAX IN ASSESSEES HANDS. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE DOCUMENTS PLACED ON RECORD. AS SEEN FRO M THE DOCUMENTS PLACED ON RECORD, THERE IS NO DISPUTE WIT H REFERENCE TO THE EXISTENCE OF PRAGATOOLS EMPLOYEES COOPERATIV E HOUSING SOCIETY LTD., KAVADIGUDA AND SO CIT(A) FINDINGS/OBS ERVATION THAT SOCIETY IS A FACADE CANNOT BE ACCEPTED. NOT ON LY THAT AT THE RELEVANT POINT OF TIME, THE ASSISTANT REGISTRAR OF COOPERATIVE SOCIETIES ACTING AS CHAIRMAN OF THE SOC IETY ENTERED INTO DEVELOPMENT AGREEMENT, THEREFORE, THE DEVELOPMENT AGREEMENT CANNOT BE BRUSHED ASIDE. NOT ONLY THAT THE ENQUIRY REPORT, SUBSEQUENTLY ON THE ACTIVITIES OF THE SOCIETY, ALSO INDICATE THAT ASSESSEE HAS ONLY ACTED TO PROTECT THE SOCIETY LAND. MAY BE IN THE PROCESS, HE MAY HAV E RECEIVED SOME FUNDS BUT THE OWNERSHIP OF THE FUNDS ARE YET T O BE DECIDED BY TAKING NECESSARY ACTION BY THE COOPERATI VE SOCIETY. SINCE THE MATTERS ARE ALSO SUBJECT MATTER OF LITIGA TION AND ENQUIRY, WE ARE OF THE OPINION THAT ADDITIONS MADE BY THE A.O. CANNOT BE CONFIRMED AS SUCH. THEREFORE, IN THE INTE REST OF JUSTICE, WE ARE OF THE OPINION THAT THIS ISSUE ALSO REQUIRE RE- EXAMINATION. THE A.O. SHOULD FIRST ASCERTAIN HOW MU CH AMOUNT WAS PAID BY MR. PREMSAGAR RAO FROM THE BOOKS OF M/S. SAINATH ESTATES PVT. LTD. AS THE AMOUNT STATED TO BE RECEIVED BY THE ASSESSEE ITSELF IS IN DISPUTE TO TH E EXTENT OF RS. 10 ITA.NOS.443 TO 447 &573/HYD/2013 MR. M. RAJASEKHAR REDDY, SECUNDERABAD. 6 LAKHS. THEREAFTER, THE A.O. SHOULD EXAMINE WHETHE R THE AMOUNT WAS MIS-APPROPRIATED BY THE ASSESSEE OR HAS BEEN SPENT FOR LITIGATION, DEVELOPMENT/ PROTECTION OF TH E LAND, THE A.O. SHOULD ALSO TAKE INTO CONSIDERATION THE ENQUIR Y REPORT OF THE ASSISTANT REGISTRAR OF THE COOPERATIVE SOCIETY AND ALSO SUBSEQUENT DEVELOPMENTS IF ANY, TO ASCERTAIN WHETHE R THESE FUNDS ARE APPROPRIATED BY THE ASSESSEE OR HELD BY T HE ASSESSEE FOR AND ON BEHALF OF THE SOCIETY. ONLY WHEN THE FUN DS ARE UTILIZED BY THE ASSESSEE FOR HIS PERSONAL BENEFIT, THIS CAN BE CONSIDERED AS INCOME OF THE ASSESSEE AS PER THE PRO VISIONS OF THE ACT. WITH THESE DIRECTIONS, THE ISSUE REGARDING ADDITION ON ACCOUNT OF THE ABOVE AMOUNTS IS ALSO RESTORED TO TH E FILE OF A.O. FOR NECESSARY EXAMINATION AND DECISION AFTER DUE EN QUIRY. NEEDLESS TO SAY THAT ASSESSEE SHOULD BE GIVEN DUE O PPORTUNITY TO SUBMIT HIS CONTENTIONS/ASSERTIONS AND EVIDENCE F ILED SHOULD BE CONSIDERED PROPERLY. THE GROUNDS ON THIS ISSUE I N RESPECTIVE ASSESSMENT YEARS ARE ALLOWED FOR STATISTICAL PURPOS ES. 11. IN THE RESULT, ALL APPEALS OF THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09.04.2014. SD/- SD/- (SAKTIJIT DEY) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 09 TH APRIL, 2014 VBP/- COPY TO : 1. MR. M. RAJASEKHAR REDDY, PLOT NO.6, ROAD NO.6, TRIMURTHY COLONY, MAHENDRA HILLS, SECUNDERABAD 2. DCIT, CENTRAL CIRCLE-2, HYDERABAD 3. CIT(A)-I, HYDERABAD 4. CIT (CENTRAL), HYDERABAD 5. D.R. ITAT, A BENCH, HYDERABAD.