Sri Venkata Rama Sai Developers, Visakhapatnam V. THE DCIT, CENTRAL CIRCLE - 1, Visakhapatnam

ITA 453/VIZ/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0215 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-10-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 12-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D KOMALI KRISHNA
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Income from undisclosed sources; Search and seizure; Document seized; Opportunity of cross examination; Tangible material; Fair market value; Corroborative evidences; Third party statement; Assessment record; Block assessment; Reason to believe; Documents seized; Reassessment proceedings
• Section: 143(3); 50C; 234B; 148; 132

Judgement Text

ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , ,, , . . . . , , , , % % % % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER . .. ./ // / I.T.A.NO.453/VIZAG/2012 ( / ASSESSMENT YEAR : 2007-08 ) SRI VENKATA RAMA SAI DEVELOPERS VISAKHAPATNAM VS. DCIT CENTRAL CIRCLE - 1 VISAKHAPATNAM [ PAN: AAVFS 1831Q ] (, , , , / APPELLANT) (-., -., -., -., / RESPONDENT ) , / / APPELLANT BY : SHRI G.V.N. HARI, AR -., / / RESPONDENT BY : SMT. D. KOMALI KRISHNA, DR / 3 / DATE OF HEARING : 20.10.2015 / 3 / DATE OF PRONOUNCEMENT : 0 6.11.2015 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), VISAKHAPATNAM DATED 28.9.2012 FOR THE ASSES SMENT YEAR 2007-08. ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 2 2. THE BRIEF FACTS OF THE CASE, ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM, WHICH IS ENGAGED IN THE BUSINESS OF REAL ESTA TE DEVELOPER FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 ON 28.10.2007 DECLARING TOTAL INCOME OF RS.3,03,209/-. DURING TH E COURSE OF SEARCH PROCEEDINGS CONDUCTED U/S 132 OF THE INCOME-TAX ACT , 1961 (HEREINAFTER CALLED ACT) IN THE CASE OF M/S. CLASSIQUE FARMS & ESTATES, VISAKHAPATNAM ON 12.9.2007, IT WAS NOTICED THAT THE ASSESSEE HAS SOLD LAND ADMEASURING 40 ACRES SITUATED AT MADDI VILLAGE , VISAKHAPATNAM DISTRICT TO M/S. CLASSIQUE FARMS & ESTATES, VISAKHA PATNAM FOR A CONSIDERATION OF RS.48 LAKHS. DURING THE COURSE OF SEARCH OPERATION, CERTAIN INCRIMINATING DOCUMENTS WERE FOUND AND SEIZ ED, WHEREIN CERTAIN FINANCIAL TRANSACTIONS WERE RECORDED. FROM THESE S EIZED MATERIALS, THE A.O. FOUND THAT M/S. CLASSIQUE FARMS & ESTATES HAS PAID AMOUNT OVER AND ABOVE THE SALE CONSIDERATION SHOWN IN THE SALE DEED FOR THE PURCHASE OF THE PROPERTY FROM THE ASSESSEE FIRM. B ASED ON THESE FINDINGS, THE ASSESSING OFFICER HAS REASONS TO BELI EVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND HENCE, ISSUED NOTICE U/S 148 OF THE ACT ON 8.8.2008. IN RESPONSE TO NOTICE, THE ASSESSEE FILED A LETTER AND REQUESTED TO TREAT THE RETURN FILED ON 2 8.10.2007 MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE U/S 1 48 OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. NOTI CED THAT THE ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 3 ASSESSEE FIRM HAS SOLD 40 ACRES OF LAND SITUATED AT MADDI VILLAGE TO M/S. CLASSIQUE FARMS & ESTATES ON 31.12.2006 FOR A VALUA BLE CONSIDERATION OF RS.48 LAKHS. FURTHER, THE SEIZED DOCUMENTS FROM TH E OFFICE OF M/S. CLASSIQUE FARMS & ESTATES REVEALS THAT THE ACTUAL C ONSIDERATION PAID FOR PURCHASE OF THE SAID LAND WAS AT RS.2,84,00,000/- @ RS.7,10,000/- PER ACRE AS AGAINST THE DECLARED SALE CONSIDERATION OF RS.48 LAKHS IN THE SALE DEED. CONSEQUENT TO SEARCH PROCEEDINGS, STATEMENT U/S 132(4) OF THE ACT WAS RECORDED FROM SRI M.V.V. SATYANARAYANA AND SHRI RAPETI GOVIND, PARTNERS OF M/S. CLASSIQUE FARMS & ESTATES. IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT, THE PARTNERS OF THE SAID FIR M ADMITTED THAT THE SEIZED MATERIALS SHOWN AT PAGE NOS.41,42,83 & 84 OF ANNEXURE A/C,F&D SEIZED FROM THE BUSINESS PREMISES OF M/S. CLASSIQUE FARMS & ESTATES INDICATES THE FINANCIAL TRANSACTION ENTERED INTO BE TWEEN BY OUR FIRM WITH M/S. SRI VENKATARAMA SAI DEVELOPERS AND THE AMOUNT WRITTEN THEREIN IS THE CASH PAYMENTS MADE BY US OVER AND ABOVE THE AMO UNTS SHOWN IN THE SALE DEED FOR PURCHASE OF THE SAID PROPERTY. P AGE NO.84 OF SEIZED MATERIALS SHOWS THAT RS.62 LAKHS WAS PAID BY CHEQUE S DRAWN ON BANK OF BARODA AND RS.1,38,00,000/- WAS PAID IN CASH ON VAR IOUS DATES BEGINNING FROM 2.1.2007 TO 10.2.2007. SIMILAR MATE RIALS WERE ALSO SEIZED FROM THE BUSINESS PREMISES OF M/S. M.V.V. BU ILDERS, A GROUP CONCERN OF M/S. CLASSIQUE FARMS & ESTATES. AS PER THE SEIZED PAPERS ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 4 PAGE NOS.40,50,51,53 & 55 OF ANNEXURE/MVVB/6 SHOWS THAT TOTAL PAYMENT OF RS.1,01,10,000/-WAS SHOWN ON VARIOUS DAT ES IN THE NAME OF SHRI PATTABHIRAM, MANAGING PARTNER OF THE ASSESSEE FIRM. WHEN THESE SEIZED MATERIALS WERE CONFRONTED TO THE PARTNERS OF FIRM I.E. SHRI M.V.V. SATYANARAYANA AND SHRI RAPETI GOVIND, THEY HAVE CON FIRMED THAT THE SAID PAYMENTS ARE MADE IN CASH TO SHRI V. PATTABHIR AM, MANAGING PARTNER OF THE ASSESSEE FIRM FOR PURCHASE OF LAND. THE RELEVANT PORTION OF THE STATEMENT AS CULLED OUT FROM THE ASSESSMENT ORDER IS REPRODUCED HEREUNDER: Q . 4. AFTER GOING THROUGH ANNEX/N W516, IT IS OBSERVE D THAT RS. 1,01,10,000/- IS PAID TO SRI PATTABI GARU FROM 02-01-2007 TO APRIL, 2007. PLEASE IDENTIFY THIS PERSON. FURTHER, THE NAME OF MR.PATTABHI DID NOT APPEAR IN THE REGISTERED DOCUMENT OF N/S CLASSIQUE FARMS & ESTATES ( WHERE MACID! SITE I S LOCATED. PLEASED GIVE DETAILS? THE PAYMENTS MADE TO MR. PATTABBI ON DIFFE RENT DATES ALONG WITH THE AMOUNTS ARE LISTED BELOW. DATE AMOUNT (RS.) 02-01-2007 10,00,000 02-01-2007 25,00,000 08-01-2007 25,00,000 08-01-2007 11,00,000 11-01-2007 10,00,000 12-01-2007 13,00,000 10-02-2007 2,00,000 10-02-2007 5,00,000 ANS. MR. PATTABHI IS ONE OF THE PARTNERS IN N/S VEN KATARAMA SAL DEVELOPERS. N/S VENKATARAMA SAL DEVELOPERS HAS OBTAINED GPA FRO M THE LAND OWNERS OF A MADDI SITE TO THE EXTENT OF 40 ACRES. THE ABOVE AMOUNTS S HOWN IN THE ANNEXURE ARE PAID IN CASH AND THESE PAYMENTS ARE OUT OF THE BOOKS OF ACC OUNT. I HAVE ALREADY DISCLOSED MY PORTION OF UNACCOUNTED INVESTMENT IN THIS CLASSI QUE FARMS & ESTATES ON THE DATE OF SEARCH OPERATIONS I.E. 12-09-07. STATEMENT OF MR.RAPETI GOVIND RECORDED ON 09-10-07 Q . 10. PLEASE GO THROUGH SHEET NO 42 AND GIVE DETAILS AND ALSO MENTION THE PERSON WHO HAS WRITTEN IT? ANS. I HAVE WRITTEN THIS SUP. THE NAMES & ADDRESSES ARE RELATED TO MADDI SITE. ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 5 I.E. PALM MEADOWS. Q.11. PLEASE GO THROUGH BACK SIDE OF SHEET NO 42 AN D ALSO SHEET NO 83 & 84 AND EXPLAIN THE CONTENTS THEREIN. ANS THESE SHEETS ARE WRITTEN BY ME. THE AMOUNTS WRI TTEN ON SHEET NO 84 ARE CASH PAYMENTS AND CHEQUE PAYMENTS MADE TO M/S VENKA TARAMA SAL DEVELOPERS BY US I.E. M/S CLASSIQUE FARMS & ESTATES. HOWEVER, 1 HAVE ALREADY ADMITTED AN UNACCOUNTED INCOME OF RS.2.21 CRORES AS MY PORTION OF INVESTMEN T FOR THE ASST. YEAR 2007-08 ON THE DAY OF SEARCH I.E. 12.9.07. THE NOTING IN S HEET NO.84 SHOWS THAT 40 ACRES @ 1.90 LACS PER ACRE WHICH COMES TO SUM OF RS.76 LA KS IS THE REGISTERED VALUE. HOWEVER, THIS PORTION OF LAND WAS REGISTERED AT RS. 48 LAKS. FURTHER, RS.178 LAKS WAS PAID IN CASH OUT OF WHICH RS.40 LAKS WAS DEDUCT ED. WHICH IS WRITTEN RS.138 LAKS AS SEEN IN SHEET NO.84. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. ISSUED SUMMONS TO SHRI V. PATTABHIRAM AND QUESTIONED ABOUT THE SAID TRANSACTION. HOWEVER, SHRI. V. PATTABHIRAM THE PAR TNER OF THE ASSESSEE FIRM HAS DENIED HAVING RECEIVED ANY MONEY IN CASH I N EXCESS OF WHAT IS RECORDED IN THE SALE DEED. THE RELEVANT PORTION OF HIS STATEMENT IS REPRODUCED AS UNDER: STATEMENT OF MR. CH. VENKATA PATTABHI RAM RECORDED ON 16.10.07: Q.6 PLEASE GO THROUGH SHEET NOS 55,53,51,50, AND 40 OF ANNEX MVB/6 SEIZED IN THE BUSINESS PREMISES OF M/S MVV BUILDERS , VISAKHAPATNAM. (PARTNER OF M/S. CLASSIQUE FARMS & ESTATES) WHEREIN CERTAIN AMOUNTS WERE WRITTEN AS PAID TO PATTABHI GARU PLEASE CONFIRM W HETHER THE NAME WRITTEN AS PATTABHI GARU IS YOUR NAME OR NOT. CONFIRM WHETHER THE NAME WRITTEN AS PATTABHI GARU IS YOUR NAME OR NOT. ANS. YES THE NAME WRITTEN PATTABHI GARU IS MY NAM E ONLY. I HAVE RECEIVED AN AMOUNT OF RS.48 LAKS ONLY FROM THE SALE S OF LANDS AT MADDI VILLAGE FROM M/S. CLASSIQUE FARMS & ESTATES. Q.7 PLEASE GO THROUGH SHEET NOS.84,83 AND 42 OF ANN EX. A/CFE/2 SEIZED IN THE BUSINESS PREMISES OF M/S. CLASSIQUE F ARMS & ESTATES AND IDENTITY WHETHER THE NOTHINGS BELONG TO YOUR OR NOT ? ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 6 ANS. AS APPEARING FROM THIS SHEET, IT IS WRITTEN TH AT RS.138 LAKHS IS PAID AS PER SHEET NO.84. WE HAVE RECEIVED AN AMOUNT OF RS. 62 LAKS BY WAY OF CHEQUES AS IN SHEET NO.83, OUT OF WHICH, WE HAVE RE PAID RS.15 LAKHS TO M/S. CLASSIQUE FARMS & ESTATES ON 28.3.07 THROUGH U NION BANK OF INDIA, MVP COLONY, VISAKHAPATNAM. AS PER SHEET NO.42 AGAI N IT IS WRITTEN THAT RS.62 LAKHS IS PAID TO M/S. VENKATARAMA SAI DEVELOP ERS, WHEREAS I HAVE NOT RECEIVED THE CASH OF RS.178 LAKHS AS REFLECTED IN SHEET NO.83 OF THE ANNEXURE. Q.8 IT IS VERY CLEAR FROM SHEET NOS.83 & 84 AND ALSO SHEET NO.42 THAT THE NOTING ARE RELATED TO YOUR FIRM M/S. VENKATARAM A SAI DEVELOPERS. WHEN YOU ARE ABLE TO IDENTIFY THE PORTION OF AMOUNT GIVEN TO THE FIRM IN CHEQUE, WHY CANNOT THE AMOUNT GIVEN IS CASH BE TREA TED AS AMOUNT RECEIVED BY YOU? ANS. WE HAVE RECEIVED THE AMOUNTS IN CHEQUES ONLY. 4. SUBSEQUENTLY, BASED ON THE STATEMENTS RECORDED F ROM THE PARTNERS OF BOTH THE FIRMS, THE A.O. ISSUED SHOW CA USE NOTICE TO ASSESSEE FIRM ASKING IT TO EXPLAIN AS TO WHY THE CO NSIDERATION RECEIVED IN CASH COULD NOT BE ASSESSED AS UNDISCLOSED INCOME FO R THE ASSESSMENT YEAR IN QUESTION. IN RESPONSE TO SAID NOTICE, THE ASSESSEE FIRM REITERATED THAT NOTHING IN EXCESS OF REGISTERED SAL E CONSIDERATION WAS RECEIVED BY IT. DURING THE COURSE OF ASSESSMENT PR OCEEDINGS, THE ASSESSEE FIRM REQUESTED FOR CROSS EXAMINATION OF SH RI M.V.V. SATYANARAYANA AND AS PER THE ASSESSEES REQUEST, TH E A.O. ALLOWED TO CROSS EXAMINE SHRI M.V.V. SATYANARAYANA ON 24.12.20 09. RELEVANT PORTION OF THE CROSS EXAMINATION IS REPRODUCED AS U NDER: Q.1 HOW MANY ACRES OF LAND HAS BEEN PURCHASED FROM US AND HOW MUCH HAVE YOU PAID PER ACRE. ANS. (SHRI M.V.V. SATYANARAYANA) WE HAVE PURCHASED 40 ACRES FROM YOU RS.7.10 LAKHS PER ACRE. ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 7 Q.2 HOW YOU HAVE PAID THE CONSIDERATION? ANS. RS.48 LAKHS IS PAID THROUGH CHEQUE, THE REST I S PAID BY CASH. RS.1.01 CRORES IS PAID BY ME TO YOU AND THE REST IS GIVEN TO YOU BY MY PARTNER. Q.3 HAVE YOU TAKEN RECEIPTS FOR THE CONSIDERATION P AID TO US BY CHEQUES. ANS. YES. THERE IS 48 LAKHS RECEIPT PROOF. BUT T HERE IS NO RECEIPT FOR THE BALANCE AMOUNT. Q.4. WHETHER YOU HAVE TAKEN RECEIPT FOR CHEQUE PAYM ENT. WHY HAVE YOU NOT TAKEN RECEIPT FOR CASH PAYMENT? ANS. WE HAVE NOT TAKEN RECEIPT FOR CASH PAYMENT MAD E. Q.5 WHEN WAS THE CASH GIVEN BEFORE OR AFTER REGISTR ATION? ANS. CASH WAS GIVEN TO YOU BEFORE REGISTRATION. Q.6 WITHOUT REGISTRATION OR DOCUMENT PROOF HOW DID YOU GIVE US THAT MUCH CASH? ANS. I DO NOT KNOW BUT WE HAVE PAID. 5. THE ASSESSING OFFICER AFTER CONSIDERING THE EVID ENCES AVAILABLE IN THE SEIZED MATERIAL AND ALSO STATEMENTS GIVEN BY TH E PARTNERS OF M/S. CLASSIQUE FARMS & ESTATES, HELD THAT THE ASSESSEES CONTENTION THAT THERE IS NO ON MONEY RECEIVED BY IT FROM THE SALE O F THE SAID LAND IS NOT ACCEPTABLE. THEREFORE, THE A.O. MADE AN ADDITION O F RS.2,79,10,000/- TOWARDS ALLEGED ON MONEY RECEIVED BY THE FIRM FROM M/S. CLASSIQUE FARMS & ESTATES AS INCOME FROM OTHER SOURCES AND CO MPLETED THE ASSESSMENT. 6. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). BEFORE CIT(A), THE ASSESS EE HAS RAISED THREE GROUNDS. FROM GROUND NO.2 IT AGITATED THE VALIDITY OF REASSESSMENT ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 8 PROCEEDINGS AND FROM GROUND NO.3 CHALLENGED THE ISS UE ON MERITS. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE MADE ELABORATE WRITTEN SUBMISSIONS. AS FAR AS THE VALIDITY OF REOPENING I S CONCERNED, THE ASSESSEE CONTENDED THAT THE ASSESSING OFFICER ISSUE D NOTICE ONLY ON THE BASIS OF THE INFORMATION RECEIVED FROM INVESTIGATIO N WING, EXCEPT INFORMATION FROM THE INVESTIGATION WING, THERE IS N O TANGIBLE MATERIAL OR PRIMA FACIE CASE BEFORE ASSESSING OFFICER TO COME T O THE CONCLUSION THAT THERE IS AN ESCAPEMENT OF INCOME. THE ASSESSEE FUR THER CONTENDED THAT IT HAS PURCHASED THE SAID PROPERTY IN THE YEAR 2005 AND WITHIN A SPAN OF SHORT PERIOD OF 2 YEARS, THERE IS NO POSSIBILITY OF GETTING SUCH A HUGE PRICE FOR THE SAME PROPERTY. IT HAS FURTHER CONTEN DED THAT SIMPLY ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WI NG, A.O. CANNOT REOPEN THE ASSESSMENT U/S 148 OF THE ACT WITHOUT IN DEPENDENTLY EXAMINING THE ISSUE. 7. ON MERITS, THE ASSESSEE ARGUED THAT IT HAS RECEI VED SALE CONSIDERATION OF RS. 48 LACS ONLY MENTIONED IN THE REGISTERED SALE DEED AND THE SAME WAS ADMITTED IT IN THE RETURN OF INCOM E FILED BY IT FOR THE RELEVANT ASSESSMENT YEAR. OVER AND ABOVE, NO CASH PAYMENT WAS RECEIVED BY IT FOR SALE OF THE SAID PROPERTY. IT I S FURTHER ARGUED THAT DURING THE COURSE OF CROSS EXAMINATION OF THE PARTN ER OF VENDEE FIRM, ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 9 THE FIRM COULD NOT PRODUCE ANY INDEPENDENT EVIDENCE FOR HAVING PAID CASH, EXCEPT THERE ARE LOOSE SHEETS FOUND IN THE PR EMISES OF THE VENDEE FIRM WHEREIN SOME FINANCIAL TRANSACTIONS ARE RECORD ED IN THE NAME OF THE ONE OF THE PARTNER OF THE ASSESSEE FIRM. THE ASSES SEE FURTHER CONTENDED THAT EVEN ACCORDING TO THE STATEMENTS OF THE PARTNERS OF THE VENDEE FIRM, THE CONSIDERATION IS RS.7,10,000/- PER ACRE AND FOR 40 ACRES AND THE TOTAL CONSIDERATION WORKS OUT TO RS.2,84,00 ,000/-. TAKING INTO ACCOUNT THE DECLARED CONSIDERATION OF RS.48 LAKHS I N THE SALE DEED, THE DIFFERENCE WOULD BE RS.2,36,00,000/- ONLY BUT, THE ASSESSING OFFICER DID NOT EVEN BOTHER TO ENQUIRE WHAT IS THE NATURE OF TH E ENTRIES FOUND IN THE SEIZED MATERIALS, BECAUSE IN ANY CASE THE ON MONEY COULD NOT HAVE EXCEEDED RS.2,36,00,000/-. THE ASSESSEE FURTHER SU BMITTED THAT THE ASSESSING OFFICER HAS TAKEN INTO ACCOUNT RS.38 LAKH S PAID TO ONE SMT. P. RADHIKA INTO THE FIRMS HANDS AS AMOUNT RECEIVED BY THE FIRM WITHOUT MENTIONING ANY REASONS AS TO HOW THIS AMOUNT ALLEGE D TO HAVE BEEN PAID TO SMT. P. RADHIKA COULD BE CONSIDERED AS ON M ONEY IN THE HANDS OF THE ASSESSEE FIRM. TO SUPPORT HIS CONTENTIONS, THE ASSESSEE PLACED ITS RELIANCE IN THE CASE OF JAWAHARBHAI ATMARAM HATHIWA LA VS. ITO (2010) 128 TTJ 36 (UO). ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 10 8. HOWEVER, THE CIT(A) DID NOT CONVINCED WITH THE E XPLANATIONS OFFERED BY THE ASSESSEE, HELD DISMISSING THE ASSESS EES APPEAL I.E. BOTH ON VALIDITY OF THE REOPENING OF THE ASSESSMENT AS W ELL AS ON MERITS OF THE ISSUE. WHILE CONFIRMING THE ASSESSMENT ORDER, THE CIT(A) HELD THAT IT IS NOT UNCOMMON THAT ON MONEY IS PAID AND RECEIV ED IN REAL ESTATE TRANSACTIONS AND THE SAME WOULD BE ONLY WITHIN THE KNOWLEDGE OF THE BUYER AND THE SELLER. UNDER THESE CIRCUMSTANCES, I T MAY NOT BE EXPECTED THAT INCOME TAX OFFICER IS TO BRING OUT EX ACT NATURE OF THE TRANSACTIONS IN THE NATURE OF SIGNED CASH RECEIPTS, ETC. THE CIT FURTHER HELD THAT IT IS A WELL KNOWN FACT AND AN OPEN SECRE T THAT THERE IS A LOT OF BLACK MONEY INVOLVED IN REAL ESTATE TRANSACTION AND THE CASH COMPONENT IS MORE IN CASE OF THE LANDS SITUATED IN OUTSKIRTS OF BIG CITIES AND TOWNS. THE CIT(A) FURTHER HELD THAT THE ENTRIES IN THE SEI ZED MATERIALS WHEN TAKEN INTO THE TOTALITY OF THE CIRCUMSTANCES, CLEAR LY POINTS OUT THAT THE UNACCOUNTED CASH WAS PAID IN THE SAID TRANSACTIONS EXCEPT PRIMARY EVIDENCE OF PAYMENT OF CASH, ALL OTHER DETAILS LIKE DATE OF CHEQUES, THE PARTIES INVOLVED IN THE TRANSACTIONS AND THE AREA O F THE LAND ARE EXACTLY MATCHED WITH THE TRANSACTION WITH THAT OF SEIZED PA PERS FOUND IN THE PREMISES OF THE PURCHASER FIRM. WHILE DOING SO, TH E CIT(A) DRAWN INFERENCE FROM SECTION 114 OF THE INDIAN EVIDENCE A CT AND HELD THAT CIRCUMSTANTIAL EVIDENCE IS MORE IMPORTANT THAN DIRE CT EVIDENCE IN ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 11 DECIDING THE TAX MATTERS. FOR THE REASON STATED IN HIS ORDER, THE CIT(A) CONFIRMED THE ASSESSMENT ORDER AND DISMISSED THE AS SESSEES APPEAL. AGGRIEVED BY THE CIT(A)S ORDER, THE ASSESSEE IS IN APPEAL BEFORE US AND RAISED THE FOLLOWING GROUNDS:- GROUND NO.1: THE , ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), VISAKHAPATNAM IS CONTRARY TO THE FACTS A ND LAW APPLICABLE TO THE CASE OF THE APPELLANT- FIRM. GROUND NO.2: THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), VISAKHAPATNAM OUGHT TO HAVE HELD THAT THE NOTICE IS SUED UNDER THE PROVISIONS OF SECTION 148 OF THE INCOME TAX ACT, 19 61 IS INVALID AND CONSEQUENTLY THE ENTIRE REASSESSMENT PROCEEDINGS AR E VOID-AB-INITIO. GROUND NO.3: THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), VISAKHAPATNAM IS NOT JUSTIFIED IN CONFIRMING THE AD DITION OF RS.2,79,10,000 MADE BY THE ASSESSING OFFICER, ON AC COUNT OF ALLEGED ON- MONEY BEING RECEIVED BY THE APPELLANT-FIRM TOWARDS SALE OF 40 ACRES OF LAND SITUATED AT MADDI VILLAGE. GROUND NO.4: WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), VISAKHAPATNAM IS NOT JUSTIFIED IN NOT APPRECIATING THE ASSERTIONS OF THE PARTNERS OF THE VENDEE FIRM, IN WHICH IT WAS STATED THAT THE SALE CONSIDERATION HAS BEEN SETTLED AT! 7,10,000/- PER ACRE TOTAL OF WHICH WORKS OUT TO RS. 2,84,00,000/- OUT OF WHICH ! 48,00,000/- IS PAID THROUGH CHEQUE. THUS BE YOND ANY IMAGINATION THE ALLEGED CASH PORTION WOULD NOT HAVE EXCEEDED! 2,36,00,000/-. GROUND NO.5: WITHOUT PREJUDICE TO THE ABOVE, THE LE ARNED COMMISSIONER OF INCOME TAX (APPEALS), VISAKHAPATNAM IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN C ONSIDERING AN ALLEGED AMOUNT OF RS.38,00,000/- PAID BY THE VENDEE FIRM TO SMT.P.RADHIKA AS ON MONEY IN THE HANDS OF THE APPELLANT-FIRM. GROUND NO.6: THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), VISAKHAPATNAM IS NOT JUSTIFIED IN CONFIRMING THE AC TION OF THE ASSESSING OFFICER IN LEVYING INTEREST UNDER THE PROVISIONS OF SECTION 234B OF THE INCOME TAX ACT, 1961. ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 12 9. FROM THESE GROUNDS OF APPEAL, THE ASSESSEE HAS R AISED TWO ISSUES I.E. VALIDITY OF REOPENING OF THE ASSESSMENT AND AD DITION ON MERITS. NOW LET US FIRST TAKE UP THE ISSUE OF VALIDITY OF REOPE NING OF THE ASSESSMENT. 10. DURING THE COURSE OF HEARING, THE LD. A.R. SUBM ITTED THAT THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 147 OF TH E ACT IS BAD IN LAW. THE ASSESSING OFFICER ISSUED NOTICE ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING. THE ASSESSING OFFICER DID NOT CONDUCT ANY INDEPENDENT ENQUIRY OR HIS OPINION IS NOT BASED ON ANY TANGIBLE MATERIAL SO AS TO FORM A BELIEF OF ESCAPEMENT OF INCOME. TH E A.R. FURTHER SUBMITTED THAT THE ASSESSING OFFICER IGNORED THE FA CT THAT THE APPELLANT HAS PURCHASED A PROPERTY IN 2005 AND WITHIN SUCH A SHORT PERIOD, THE APPELLANT COULD NOT HAVE MADE SO MUCH PROFIT. THER EFORE, THE A.O. DID NOT MAKE ANY ATTEMPT TO FIND OUT HOW MUCH WAS THE C ONSIDERATION PAID BY THE ASSESSEE WHEN THE PROPERTY WAS PURCHASED AND WHAT WAS THE CONSIDERATION RECEIVED AT THE TIME OF SALE. SIMPLY ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING IS SUED NOTICE U/S 148 OF THE ACT TO REOPEN THE ASSESSMENT, THEREFORE, THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S 147 OF THE ACT SHOULD BE QU ASHED. ON THE OTHER HAND, THE LD. D.R. STRONGLY SUPPORTED THE ORDER OF THE CIT(A). ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 13 11. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND ALSO CONSIDERED THE ORDERS OF THE AUTHOR ITIES BELOW. IN THIS CASE, THE ASSESSING OFFICER HAS REOPENED THE ASSESS MENT BASED ON THE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT CONSEQUENT TO THE SEARCH CONDUCTED IN THE CASE OF M /S CLASSIC FARMS & ESTATES. THE ASSESSEES CONTENTION IS THAT THE A.O . REASON TO BELIEVE IS NOT BASED ON ANY MATERIAL EVIDENCE AVAILABLE WITH H IM BECAUSE, HE HAS PURELY RELIED UPON THE REPORT SENT BY THE INVESTIGA TION OFFICER, THEREFORE, HIS ORDER IS NOT VALID IN LAW. WE HAVE CONSIDERED T HE ARGUMENTS OF THE ASSESSEE AND ALSO GONE THROUGH THE ASSESSMENT ORDER . WE FIND THAT SECTION 147 OF THE ACT AUTHORISES THE ASSESSING OFF ICER TO ASSESS OR RE- ASSESS INCOME CHARGEABLE TO TAX, IF HE HAS REASON T O BELIEVE THAT THE INCOME FOR ANY ASSESSMENT YEAR HAS ESCAPED ASSESSME NT. THE PRIMARY REQUIREMENT OF SECTION 147 OF THE ACT IS THAT THERE SHOULD BE FORMATION OF BELIEF BY THE ASSESSING OFFICER COUPLED WITH MAT ERIAL EVIDENCE. IF THE A.O. HAS CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT INCOME HAD ESCAPED ASSESSMENT, IT CAN BE SAID TO HAVE REASON T O BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT. THE A.O. AT THE TIM E OF ISSUING NOTICE U/S 148 OF THE ACT IS NOT NECESSARILY TO ESTABLISH THE FACT THAT THERE IS AN ESCAPEMENT OF INCOME. BUT WHAT IS NECESSARY IS THA T THERE MUST BE SOME RELEVANT MATERIAL ON WHICH THE FORMATION OF OP INION IS ARRIVED AT ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 14 BY THE ASSESSING OFFICER. IN THE INSTANT CASE, THE A.O. FORMED HIS OPINION BASED ON THE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT AND WHICH IS THE VALID BASIS FOR ISS UING NOTICE U/S 148 OF THE ACT. IT IS NOT NECESSARY FOR THE A.O. TO CONDU CT INDEPENDENT ENQUIRY AND GATHER MATERIAL TO FORM HIS OPINION. MATERIAL MAY COME FROM WITHIN THE ASSESSMENT RECORDS OR FROM OUTSIDE THE ASSESSME NT RECORD. BUT WHAT IS IMPORTANT IS THAT THERE SHOULD BE SOME COGE NT MATERIAL, WHICH SUGGESTS THAT THERE IS AN ESCAPEMENT OF INCOME CHAR GEABLE TO TAX. THEREFORE, THE A.O. HAS RIGHTLY FORMED HIS OPINION BASED ON THE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT. THE CIT(A) HAS ELABORATELY DISCUSSED ON THE ISSUE AND R EJECTED THE ASSESSE ARGUMENTS. THEREFORE, WE UPHELD THE REOPENING OF T HE ASSESSMENT AND REJECT THE GROUND RAISED BY THE ASSESSEE. 12. THE NEXT ISSUE ARISES FOR OUR CONSIDERATION, IS WHETHER THE CIT(A) IS RIGHT IN CONFIRMING THE ADDITIONS MADE BY THE AS SESSING OFFICER TOWARDS ALLEGED ON MONEY RECEIVED BY THE ASSESSEE B ASED ON THIRD PARTY STATEMENT RELIED UPON BY THE ASSESSING OFFICER. TH E FACTUAL MATRIX OF THE ISSUE IS THAT THERE WAS A SEARCH IN THE CASE OF M/S . CLASSIQUE FARMS & ESTATES. DURING THE COURSE OF SEARCH PROCEEDINGS, CERTAIN INCRIMINATING DOCUMENTS WERE FOUND. THE SEIZED DOCUMENTS REVEALS THAT THE ASSESSEE ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 15 HAS SOLD LANDS FOR A CONSIDERATION OF RS.48 LAKHS A ND ALSO RECEIVED ON MONEY OF RS.2,79,10,000/-. DURING THE COURSE OF AS SESSMENT PROCEEDINGS, THE A.O. RECORDED STATEMENTS FROM THE PARTNERS OF THE VENDEE FIRM U/S 132(4) OF THE ACT. DURING THE COURS E OF INVESTIGATION, THE PARTNERS OF THE VENDEE FIRM HAVE ADMITTED THAT THEY HAVE PAID ON MONEY TO THE ASSESSEE FIRM FOR PURCHASE OF PROPERTY . ON CROSS EXAMINATION, THE PARTNERS OF THE ASSESSEE FIRM DENI ED FOR HAVING RECEIVED THE ON MONEY AND STATED THAT THEY DID NOT RECEIVE OTHER THAN WHAT IS STATED IN THE SALE DEED. 13. ADMITTEDLY, IN THE ASSESSEE CASE, THERE WAS NO SEARCH. THE SEIZED DOCUMENT FOUND DURING SEARCH AT THE PREMISES OF M/S . CLASSIQUE FARMS & ESTATES IS A LOOSE SHEET, WHEREIN CERTAIN FINANCI AL TRANSACTIONS WERE RECORDED IN THE NAME OF ONE OF THE PARTNER OF THE A SSESSEE FIRM. ADMITTEDLY, THE LOOSE SHEET FOUND AT THE VENDEE FIR M WAS WRITTEN BY ONE MR. RAMU, AN EMPLOYEE OF THE FIRM. BASED ON THE SA ID DOCUMENT AND ALSO ADMISSION MADE BY THE PARTNERS OF THE VENDEE F IRM, THE A.O. ACTED UPON AND CAME TO THE CONCLUSION THAT THE ON MONEY W AS PAID TO THE ASSESSEE FIRM TOWARDS SALE OF PROPERTY. AT THE TIM E OF ASSESSMENT PROCEEDINGS, THE PARTNERS OF THE ASSESSEE FIRM CATE GORICALLY DENIED HAVING RECEIVED THE ON MONEY RIGHT FROM THE BEGINNI NG. THE ASSESSEE ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 16 CONTENDED THAT THE SEIZED DOCUMENT FOUND IN THE PRE MISES OF M/S. CLASSIQUE FARMS & ESTATES IS NEITHER IN THE HAND WR ITING OF ANY OF THE PARTNERS OF THE FIRM NOR IS FOUND IN THE PREMISES O F THE ASSESSEE FIRM, AND THE SAME IS WRITTEN BY AN EMPLOYEE OF THE VENDE E FIRM, THEREFORE CANNOT BE USED AS EVIDENCE AGAINST IT. BESIDES THE SEIZED LOOSE SHEET, NO OTHER DOCUMENT IS IN THE POSSESSION OF THE A.O. TO SHOW THAT THE ASSESSEE HAS RECEIVED ON MONEY FROM THE PURCHASER. THE A.O. HAS NOT MADE ANY ATTEMPT TO FIND OUT SOME RELIABLE AND COGE NT MATERIAL EVIDENCE ON RECORD TO SUPPORT HIS FINDINGS OR TO CO RROBORATE THE STATEMENTS OF THE VENDEE FIRM. THE ASSESSEE FIRM D ENIED HAVING RECEIVED THE MONEY OVER AND ABOVE WHAT IS STATED IN THE SALE DEED. 14. THE A.R. OF THE ASSESSEE RIGHTLY POINTED OUT TH AT THE SALE DEED REGISTERED IN THE OFFICE OF THE SUB-REGISTRAR CLEAR LY SHOWS THAT THE CONSIDERATION OF RS.48 LAKHS WAS FIXED FOR THE PROP ERTY AND WHICH WAS EXCHANGED THROUGH PROPER BANKING CHANNEL. IT WAS N OT A CASE OF REVENUE THAT THE VALUE SHOWN IN THE SALE DEED IS NO T THE REAL VALUE OF THE PROPERTY BECAUSE THE VALUE DECLARED IN THE SALE DEED IS THE MARKET VALUE OF THE PROPERTY FIXED BY THE STATE GOVERNMENT AUTHORITIES FOR DETERMINING THE STAMP DUTY PAYABLE TO THE GOVERNMEN T FOR REGISTERING THE PROPERTIES AND ALSO WHICH WAS ACCEPTED BY THE R EGISTERING AUTHORITY. FURTHER, THERE IS NO EVIDENCE TO SHOW THAT THERE IS UNDER VALUATION OF ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 17 PROPERTY AND SECTION 50C OF THE ACT IS INVOKED WHIL E COMPLETING THE ASSESSMENT. THE A.O. MERELY ACTED UPON THE STATEME NT GIVEN BY THE THIRD PARTY, WHICH WAS TOTALLY DENIED BY THE PARTNE RS OF THE ASSESSEE FIRM. IT WAS A SETTLED POSITION OF LAW THAT UNLESS THE STATEMENT IS TESTED UNDER THE CROSS EXAMINATION, THE SAME CANNOT BE CON SIDERED AS EVIDENCE AGAINST THE ASSESSEE. THE A.O. USED THE AD MISSION OF PARTNERS OF VENDEE FIRM MADE IN THE STATEMENT U/S 132(4) OF THE ACT IN THEIR CASE, AGAINST THE ASSESSEE. BUT, THE A.O. FAILED T O NOTE THAT ADMISSION OF OTHER PARTIES CANNOT BE CONSIDERED AS CONCLUSIVE EVIDENCE AGAINST THE ASSESSEE, UNLESS THERE IS A CORROBORATIVE EVIDENCE ON RECORD, BECAUSE THE MAKER OF STATEMENT CAN BIND HIMSELF BUT HOW HE BINDS OTHERS FROM HIS STATEMENT WITHOUT THERE BEING ANY FURTHER EVIDE NCE ON RECORD. 15. IN THE PRESENT CASE ON HAND, EXCEPT LOOSE SHEET FOUND IN THE PREMISES OF THIRD PARTY AND ADMISSION MADE BY THE T HIRD PARTY IN THEIR ASSESSMENT PROCEEDINGS, THERE IS NO OTHER EVIDENCE ON RECORD TO PROVE THAT ON MONEY IS PAID. THE ASSESSING OFFICER, WITH OUT BROUGHT ON RECORD ANY EVIDENCE TO PROVE THAT ON MONEY IS EXCHANGED BE TWEEN THE PARTIES, MERELY HARPING UPON THE LOOSE SHEET AND THE THIRD P ARTY ADMISSION, WHICH CANNOT BE CONSIDERED AS CONCLUSIVE EVIDENCE A GAINST THE ASSESSEE TO BRING THE ON MONEY TO TAX AS UNDISCLOSED INCOME. THE A.O. IS ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 18 REQUIRED TO BRING FURTHER EVIDENCE ON RECORD TO SHO W THAT ACTUAL ON MONEY IS EXCHANGED BETWEEN THE PARTIES, BUT LITERAL LY FAILED TO DO SO. THE A.O. DID NOT CONDUCT ANY INDEPENDENT ENQUIRY RE LATING TO THE VALUE OF THE PROPERTY INSTEAD, MERELY RELIED UPON THE STA TEMENT GIVEN BY THE PURCHASERS OF THE PROPERTY, WHICH IS NOT CORRECT. F URTHER, THERE IS NO PROOF OF ORIGIN AND DESTINATION OF ON MONEY. THE A. O. FAILED TO PROVE THE SOURCE OF THE PURCHASERS AS TO HOW THE MONEY WAS AR RANGED AND ALSO FAILED TO PROVE THE DEPLOYMENT OF UNACCOUNTED MONEY BY THE VENDEE FIRM BY ANY FORM OF EVIDENCE. UNDER THESE CIRCUMSTA NCES, BASED ON PAPER JOTTINGS AS CONCLUSIVE EVIDENCE ON MONEY CANN OT BE BROUGHT TO TAX AS INCOME FROM UNDISCLOSED SOURCES. 16. NOW COMING TO THE OBSERVATIONS OF THE CIT(A). T HE CIT(A) WHILE CONFIRMING THE ASSESSMENT ORDER, OBSERVED THAT IT I S UNCOMMON THAT ON MONEY PAID/RECEIVED IN REAL ESTATE TRANSACTIONS. T HE CIT(A) FURTHER OBSERVED THAT IT IS A WELL KNOWN FACT AND OPEN SECR ET THAT THERE IS A LOT OF BLACK MONEY INVOLVED IN THE REAL ESTATE TRANSACT IONS AND PARTICULARLY CASH COMPONENT IS MORE IN THE LANDS SITUATED IN OUT SKIRTS OF THE BIG CITIES. WE DO NOT AGREE WITH THE FINDINGS OF THE C IT(A) FOR THE REASON THAT ASSESSMENTS CANNOT BE MADE OR TAXES CANNOT BE LEVIED ON THE BASIS OF THE THEORY OF PROBABILITY. TO TAX ANY PARTICULA R INCOME, THERE MUST BE ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 19 SOME MATERIAL EVIDENCE TO SHOW THAT THE INCOME IS A CCRUED OR ARISES TO THE PARTICULAR ASSESSE. UNLESS, THERE IS A PROOF, T HE DEPARTMENT CANNOT COLLECT THE TAX ON THE ADMISSION OF THE TAX PAYER A LONE. THE CIT, AT ONE STAGE HELD THAT THERE IS NO NEED OF DIRECT OR PRIMA RY EVIDENCE, EVEN IF THERE IS A CIRCUMSTANTIAL EVIDENCE, BASED ON CIRCUM STANTIAL EVIDENCE, THE A.O. COME TO THE CONCLUSION AND DECIDE THE ISSUE AC CORDINGLY. WE DO NOT AGREE WITH THE STAND TAKEN BY THE CIT(A), FOR T HE SIMPLE REASON THAT TO TAX ANY PARTICULAR RECEIPT, PRIMARY EVIDENCE IS VERY MUCH NECESSARY AND UNLESS THERE IS A PRIMARY EVIDENCE, CIRCUMSTANT IAL EVIDENCE CANNOT BE CONSIDERED AS A CONCLUSIVE EVIDENCE AGAINST ANY PERSON TO TAX ANY PARTICULAR RECEIPT. CIRCUMSTANTIAL EVIDENCE PLAYS A N IMPORTANT ROLE IN INCOME TAX PROCEEDINGS, WHERE THE A.O. NEEDS TO EST IMATE THE INCOME BASED ON SOME EVIDENCE AVAILABLE FOR PART OF THE YE AR, THEN REMAINING PERIOD ESTIMATION CAN BE MADE BASED ON EVIDENCE AVA ILABLE. BUT, PAYMENT/RECEIPT OF ON MONEY IS PURELY A FACTUAL ISS UE WHICH CANNOT BE DECIDED BASED ON CIRCUMSTANTIAL EVIDENCE. 17. NOW COMING TO THE CASE LAWS RELIED UPON BY THE ASSESSEE COUNSEL, THE ASSESSEES COUNSEL AT THE TIME OF HEARING RELIE D UPON PLETHORA OF CASE LAWS IN SUPPORT OF HIS CONTENTIONS. ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 20 18. THE A.R. RELIED UPON ITAT HYDERABAD `A BENCH D ECISION IN THE CASE OF SMT. K.V. LAKSHMI SAVITRI DEVI VS. ACIT (20 12) 148 TTJ 517, WHEREIN THE TRIBUNAL UNDER SIMILAR CIRCUMSTANCES HE LD AS UNDER: ADMITTEDLY THERE WAS NO SEARCH ACTION IN THE CASE O F THE ASSESSEE. IT IS A LOOSE SLIP CONTAINING CERTAIN ENT RIES RECORDING THE PAYMENT WHICH WAS FOUND AT THE PREMISES OF CRK. IT DOES NOT CONTAIN EITHER DATE OF PAYMENT OR NAME OF THE PERSON WHO HA S MADE THE PAYMENT. ACCORDING TO THE DEPARTMENT, CRK DENOTES C . RADHA KRISHNA KUMAR AND KRK DENOTES K. RAJANI KUMARI. HOW EVER, NO NAME OF THE ASSESSEE WAS FOUND IN THE LOUSE SHEET. THE P ROPERTY WAS PURCHASED FROM P W/C CRK FOR A DISCLOSED CONSIDERAT ION OF PS. 65 LAKHS BY THE ASSESSEE. THE PROPERTY HAS BEEN REGISTERED A ND THE SALE DEED WAS EXECUTED FOR A CONSIDERATION OF PS. 65 LAKHS ON 21ST AUG., 2006 WHICH CONSIDERATION HAS BEEN ACCEPTED BY THE STATE REGISTRATION AUTHORITIES. FURTHER NOTHING WAS BROUGHT ON RECORD TO SHOW THAT THERE WAS ANY INVOKING OF S. 50C WHILE COMPLETING THE ASS ESSMENT IN THE CASE OF THE SELLER. THERE IS NO EVIDENCE OTHER THAN THE SEIZED MATERIAL MARKED AS 'A/CRK104' WHERE RELEVANT ENTRIES ARE MAD E AT RS. 1,65,00,000. THE SEIZED MATERIAL WAS NOT FOUND AT T HE PREMISES O THE ASSESSEE AND THERE IS NO CORROBORATIVE MATERIAL TO SUGGEST THAT THE ASSESSEE HAS ACTUALLY PAID RS. 1.65 RORES TOWARDS PURCHASE CONSIDERATION OF THE PROPERTY. THE ASSESSEE AND HER BROTHER CATEGORICALLY DENIED THE PAYMENT OF ANY MONEY OVER AND ABOVE RS. 65 LAKHS. THE AO PLACED HI RELIANCE ON THE STATEMENT O F 5, WHO IS A THIRD PARTY. THE EVIDENCE BROUGHT ON RECORD BY THE DEPARTMENT IS NOT ENOUGH TO FASTEN ADDITIONAL TAX LIABILITY ON TH E ASSESSEE. AS SEEN FROM THE ABOVE DOCUMENT THIS IS JUST A HANDWRITTEN LOOSE DOCUMENT AND THE HANDWRITING IS ALSO NOT OF THE ASSESSEE AND THE LOOSE DOCUMENT WAS FOUND AT THE PREMISES OF A THIRD PARTY. THE BUR DEN IS ON THE DEPARTMENT TO PROVE CONCLUSIVELY THAT THE LOOSE DOC UMENT BELONGS TO THE ASSESSEE. THERE IS NO PRESUMPTION IN LAW THAT T HE ASSESSEE HAS ACTUALLY PAID RS. 165 LAKHS TOWARDS PURCHASE OF THE PROPERTY. THE UNDISCLOSED INCOME IN THIS CASE IS TO BE COMPUTED B Y THE AO ON THE BASIS OF THE AVAILABLE MATERIAL ON RECORD. IT SHOULD NOT BE BASED ON CONJECTURES AND SURMISES. AS OF NOW, THE MATERIAL C ONSIDERED BY THE AO FOR MAKING THE ADDITION OF PS. 1 CRORE IS SEIZED MA TERIAL MARKED A 'A/CRK104' AND THE STATEMENT OF S. THIS LOOSE SHEET FOUND AT THE PREMISES OF CRK IS NOT ENOUGH MATERIAL TO SUSTAIN T HIS ADDITION. THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH A ND THE STATEMENT RECORDED ARE SOME PIECE OF EVIDENCE TO MAKE THE ADD ITION. THE AO HAS TO ESTABLISH THE LINK BETWEEN THE SEIZED MATERIAL A ND OTHER BOOKS OF ACCOUNT TO THE ASSESSEE. THE SEIZED MATERIAL AND ST ATEMENT OF CRK CANNOT BE CONCLUSIVE EVIDENCE TO MAKE THIS ADDITION . THE ENTIRE CASE ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 21 HEREIN IS DEPENDING UPON THE RULE OF EVIDENCE. THER E IS NO CONCLUSIVE PRESUMPTION TO SAY THAT ACTUAL CONSIDERATION PASSED ON BETWEEN THE PARTIES IS ACTUALLY RS. 165 LAKHS. THE ASSESSEE AS WELL AS HER BROTHER STATED IN THEIR RESPECTIVE STATEMENTS THAT THE CONS IDERATION PASSED BETWEEN THE PARTIES IS ONLY RS. 65 LAKHS. IN SPITE OF THIS THE AO PROCEEDED TO CONCLUDE THAT THE SEIZED MATERIAL IS C ONCLUSIVELY REFLECTING THE PAYMENT OF CONSIDERATION AT RS. 165 LAKHS. THE DEPARTMENT HEREIN I REQUIRED TO ESTABLISH THE NEXUS OF THE SEIZED MATERIAL TO THE ASSESSEE. AS STATED EARLIER THERE I S NO DATE AND NAME OF THE ASSESSEE. THE ALLEGATION OF THE DEPARTMENT IS T HAT THE SEIZED MATERIAL DENOTES THE PAYMENT MADE BY THE ASSESSEE T O THE PURCHASER FOR PURCHASE OF THE PROPERTY. HOWEVER, NO SUCH NARRATION OR NAME OF THE ASSESSEE WAS FOUND IN THE SEIZED MATERIAL. THE DEPARTMENT IS NOT ABLE TO UNEARTH ANY DOCUMENT OR MATERIAL OR ANY CORROBORATIVE MATERIAL TO SHOW THAT THE ASSESSEE HEREIN ACTUALLY PAID PS. 165 LAKHS FOR PURCHASE OF THE PRO PERTY. THE DEPARTMENT HAS NOT BROUGHT ON RECORD THE DATE ON WH ICH THE PAYMENT WAS MADE AND THE SOURCE FROM WHICH II IS PAID AND/O R ANY DETAILS OF BANK ACCOUNT FROM WHERE THE CASH WAS WITHDRAWN. WIT HOUT ANY OF THESE DETAILS, THE DEPARTMENT HAS TAKEN A VIEW THAT THE ASSESSEE HAS PAID PS. 165 LAKHS FOR PURCHASE OF THE PROPERTY . THE DEPARTMENT CANNOT DRAW INFERENCE ON THE BASIS OF SU SPICION, CONJECTURES AND SURMISES. SUSPICION, HOWEVER STRONG CANNOT TAKE PLACE OF MATERIAL IN SUPPORT OF THE FINDING FROM THE AO. THE AO SHOULD ACT IN A JUDICIAL MANNER, PROCEED WITH JUDICIAL SPIRIT AND COME TO A JUDICIAL CONCLUSION. THE AO IS REQUIRED TO ACT FAIRLY AS A R EASONABLE PERSON AND NOT ARBITRARILY AND CAPRICIOUSLY. THE ASSESSMENT MA DE SHOULD HAVE ENOUGH MATERIAL AND IT SHOULD STAND ON ITS OWN LEGS . THE BASIS FOR ADDITION CANNOT BE ONLY THE LOOSE SHEET OR A THIRD PARTY STATEMENT. IN THE ABSENCE OF CORROBORATIVE MATERIAL, AND/OR CI RCUMSTANTIAL EVIDENCE, THE ADDITION CANNOT BE SUSTAINED. THUS, N O ADDITION CAN BE MADE ON A DUMB DOCUMENT AND NOTING ON LOOSE SHEET. IT SHOULD BE SUPPORTED BY THE EVIDENCE ON RECORD AND THE EVIDENC E ON RECORD IS NOT SUFFICIENT TO SUPPORT THE REVENUE'S ACTION. IN A BLOCK ASSESSMENT UNDISCLOSED INCOME HAS TO BE DETERMINED OR THE . BASIS OF THE MATERIAL AND EVIDENCE DETECTED IN THE COURSE OF THE SEARCH ACTION. THE CIRCUMSTANCES SURROUNDING THE CA SE ARE NOT STRONG ENOUGH TO JUSTIFY THE ADDITION MADE BY THE D EPARTMENT. THE BURDEN OF PROVING THE ACTUAL CONSIDERATION IN T HE PURCHASE OF PROPERTY IS ON THE REVENUE. CONSIDERING THE ENTIRE FACTS OF THE CASE, THE REVENUE HAS FAILED TO DISCHARGE ITS DUTY, INSTEAD MADE UP A CASE ON SURMISES AND CONJECTURES WHICH CANNOT BE ALLOWED. UNDER THESE CIRCUMSTANCES, THERE IS NO REASON TO CO NFIRM THE ADDITION OF RS. 100 LAKHS TOWARDS ON-MONEY PAYMENT. ACCORDINGLY, THE ADDITION OF RS. 100 LAKHS IS DELET ED.CIT VS. P.V. KALYANASUNDARAM (2006) 203 CTR (MAD) 449: (2006) 28 2 ITR 259 (MAD) RELIED ON ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 22 19. THE HONBLE A.P. HIGH COURT IN THE CASE OF SMT. K.V. LAKSHMI SAVITRI DEVI VS. ACIT IN ITTA 563 OF 2011, UPHELD T HE ORDER OF THE ITAT HYDERABAD BENCH. THE HONBLE HIGH COURT WHILE, DEC IDING THE ISSUE IN FAVOUR OF THE ASSESSEE HELD AS UNDER: WE ARE OF THE VIEW THAT THE TRIBUNAL HAS RIGHTLY HE LD THAT THE REGISTERED DOCUMENT DT. 21.8.2006 UNDE4R WHICH THE RESPONDENT PURCHASED THE ABOVE PROPERTY SHOWED THAT ONLY RS.65 .00 LAKHS WAS PAID TO THE VENDOR BY THE RESPONDENT; THAT THERE WAS NO EVIDENCE TO SHOW THAT THE RESPONDENT HAD PAID RS.1.00 CRORE IN CASH ALSO TO THE VENDOR; THAT NO PRESUMPTION OF SUCH PAYMENT OF RS.1.00 CROR E IN CASH CAN BE DRAWN ON THE BASIS OF AN ENTRY FOUND IN A DIARY/LOO SE SHEET IN THE PREMISES OF C. RADHA KRISHNA KUMAR WHICH IS NOT IN THE RESPONDENTS HANDWRITING AND WHICH DID NOT CONTAIN THE NAME OF T HE RESPONDENT OR ANY DATE OF PAYMENT OR THE NAME OF THE PERSON WHO M ADE THE PAYMENT. IT RIGHTLY HELD THAT THE REVENUE FAILED TO ESTABLISH THE NEXUS OF THE SEIZED MATERIAL TO THE RESPONDENT AND HAD DRAWN INF ERENCES BASED ON SUSPICION, CONJECTURES AND SURMISES WHICH CANNOT TA KE THE PLACE OF PROOF. WE ALSO AGREE WITH THE TRIBUNAL THAT THE AS SESSING OFFICER DID NOT CONDUCT ANY INDEPENDENT ENQUIRY RELATING TO THE VAL UE OF THE PROPERTY PURCHASED AND THE BURDEN OF PROVING THE ACTUAL CONS IDERATION IN THE PURCHASE OF THE PROPERTY IS ON THE REVENUE AND IT H AD FAILED TO DISCHARGE THE SAID BURDEN. 20. THE A.R. FURTHER RELIED UPON THE ITAT AHMEDABAD `C' BENCH DECISION IN THE CASE OF JAWAHARBHAI ATMARAM HATHIWA LA VS. ITO REPORTED IN (2010) 128 TTJ 36, WHEREIN UNDER SIMILA R SET OF FACTS, THE HONBLE ITAT DECIDED THE ISSUE IN FAVOUR OF THE ASS ESSEE AS UNDER: THE ASSESSEE HAS CLAIMED TO HAVE MADE PAYMENT OF RS.1,01,687/- ONLY UPTO 31 ST MARCH, 1999 AND HAS CONSISTENTLY TAKEN THE STAND THAT IT HAS NOT PAID BALANCE AMOUNT OF RS.3,8 1,414/- AS STATED IN THE SEIZED DOCUMENT. NO EVIDENCE COULD BE BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT IN FACT THE ASSESSEE HAD PAID THE AMOUNT OF RS.3,81,414/- TO OD. NO DOCUMENT CONTAINING SIGNAT URE OF THE ASSESSEE ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 23 OR HANDWRITING OF THE ASSESSEE TO CORROBORATE THE A BOVE MAKING OF PAYMENT BY THE ASSESSEE WAS FOUND DURING THE COURSE OF THE SEARCH. EVEN AT TIME OF CROSS EXAMINATION BY THE ASSESSEE T HE PARTNER OF OD COULD NOT PRODUCE ANY EVIDENCE THAT THE AMOUNT WRIT TEN IN THE SEIZED DOCUMENT WAS IN FACT RECEIVED FROM THE ASSESSEE. A S THE ASSESSEE HAS CATEGORICALLY DENIED TO HAVE MADE ANY PAYMENT IN EX CESS OF RS.1,01,687/- UPTO 31 ST MARCH, 1999 IN RESPECT OF PURCHASE OF FLAT THE SAID DENIAL CANNOT BE BRUSHED ASIDE WITHOUT BRINGIN G ANY POSITIVE MATERIAL ON RECORD. MERELY RECORDING MADE BY A THI RD PARTY OR STATEMENT OF A THIRD PARTY CANNOT BE TREATED AS SO SACROSANCT SO AS TO READ AS A POSITIVE MATERIAL AGAINST THE ASSESSEE. IN VIEW OF THE ABOVE THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING ADDITION TO THE EXT ENT OF RS.3,81,414/- IN THE HANDS OF THE ASSESSEE. THEREFORE THE ADDITION OF RS.3,81,414/- IS DELETED. ASST. CIT VS. PRABHAT OIL MILLS (1995) 52 TTJ (AHD) 533 RELIED ON; K.P. VARGHESE VS. ITO (1981) 24 CTR (SC) 358: (19 81) 131 ITR 597 (SC) APPLIED. 21. IN YET ANOTHER CASE, THE ITAT HYDERABAD `B BEN CH IN THE CASE OF DCIT (CENTRAL CIRCLE)-6 VS. B. VIJAY KUMAR IN ITA N O.930 & 931 OF 2009 HELD THE ISSUE IN FAVOUR OF THE ASSESSEE AS UNDER: 11. WE HAVE HEARD RIVAL SUBMISSIONS, PERUSED THE MA TERIAL SUBMITTED BEFORE US AND ALSO PERUSED THE ORDERS OF THE REVENUE AUTHORITIES. ON A READING OF THE ASSESSMENT ORDER, IT IS ABSOLUTELY CLEAR THAT THE ADDITION HAS BEEN MADE ENTIRELY ON THE BASIS OF THE PHOTOCOPY OF THE SALE AGREEMENT SE IZED FROM THE RESIDENCE OF THE ASSESSEE IN COURSE OF SEARCH A ND SEIZURE OPERATION. UNDISPUTEDLY, THE SALE AGREEMENT IS ONLY PHOTOCOPY AND HAS NOT BEEN SIGNED BY THE ASSESSEE. THE ASSESSEE HAS ALSO RAISED SERIOUS ALLEGATION REGARDI NG THE SEIZURE OF THE IMPUGNED DOCUMENT AND FILED AFFIDAVI T BEFORE DDIT (INV.) ASSERTING THAT THE SAID DOCUMENT WAS PLANTED BY AN OFFICER OF THE DEPARTMENT ALSO NAMED BY THE ASSESSEE IN THE AFFIDAVIT. HOWEVER, SUCH ALLEGATION OF THE ASSESSEE HAS NOT AT ALL BEEN ENQUIRED INTO AND HAS BEEN MET WITH COMPLETE SILENCE BY THE DEPARTMENT. F ROM THE MATERIALS ON RECORD, IT IS VERY CLEAR THAT THE AO HAS FAILED TO LAY HIS HANDS ON ANY CREDIBLE EVIDENCE TO ESTABL ISH THE FACT THAT THE ASSESSEE HAS PURCHASED THE PROPERTY F OR A CONSIDERATION OF RS.1,68,00,000/- AS MENTIONED IN T HE PHOTO COPY OF SALE AGREEMENT SEIZED IN COURSE OF SEARCH A ND SEIZURE OPERATION. THE ASSESSEE HAS PRODUCED BEFORE THE AO REGISTERED SALE DEEDS IN SUPPORT OF ITS CLAIM THAT THEY HAD PURCHASED THE PROPERTY FOR A CONSIDERATION OF RS.23 .50 LAKHS. ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 24 WHEN THE AO ALLEGES THAT THE ASSESSEE HAS PAID MORE THAN WHAT HAS BEEN DECLARED IN THE REGISTERED SALE DEED BECAU SE THE FAIR MARKET VALUE OF THE ASSET AS ON THE DATE OF TRANSAC TION EXCEEDS FULL VALUE OF CONSIDERATION DECLARED BY THE ASSESSEE THEN IT IS FOR THE AO TO PROVE THAT THE VALUE DECLA RED BY THE ASSESSEE IS UNDERSTATED. IN THE APPEAL BEFORE US, EXCEPTING THE PHOTO COPY OF SALE AGREEMENT, THERE IS NO OTHER EVIDENCE ON RECORD FOUND AS A RESULT OF SEARCH OR BROUGHT ON RECORD ON THE BASIS OF ENQUIRY CONDUCTED BY THE AO WHICH COULD ESTABLISH T HE FACT THAT THE ACTUAL CONSIDERATION PASSED BETWEEN THE PARTIES IS NOT AS MENTIONED IN THE REGISTERED SALE DEED BUT AS PER TH E SALE AGREEMENT FOUND DURING SEARCH OPERATION. IT IS ALS O AN INTERESTING FACT TO NOTE THAT IN THE STATEMENT RECORDED FROM THE ASS ESSEE U/S 132(4) THE REVENUE AUTHORITIES HAVE NOT PUT ANY QUESTION W ITH REGARD TO THE SALE AGREEMENT SEIZED AT THE TIME OF SEARCH AND SEIZURE OPERATIONS. SMT. R. NALINI DEVI ALSO IN HER STATEME NT FURTHER CLEARLY STATED THAT THE PROPERTY WAS SOLD A T RS.23.50 LAKHS AND NOT AT THE RATE OF RS.1.68 CRORE S. THE HON'BLE SUPREME COURT IN THE CASE OF K.P. VERGHESE REPORTED IN 131 ITR 597 HAS HELD THAT ONUS IS ON THE DEPARTM ENT TO PROVE THAT THE ASSESSEE HAS UNDERSTATED THE VALUE O F THE PROPERTY AND HAS PAID MORE THAN WHAT IS MENTION ED IN THE REGISTERED SALE DEED. THE HON'BLE SUPREME COURT IN THE CASE OF MOOSA S. MADHA AND AZAM S. MADHA VS. CIT ( 89 ITR 65) HAS HELD THAT PHOTOCOPIES HAVE LITTLE EVIDENTIARY VALUE. THEREFORE, PHOTOCOPIES OF ANY DO CUMENT CANNOT BY ITSELF BE CONSIDERED AS EVIDENCE FOR PURP OSE OF MAKING ADDITION IN ASSESSMENT PROCEEDINGS. THE AO I S REQUIRED TO BRING FURTHER EVIDENCE ON RECORD TO SHO W THAT THE SALE AGREEMENT WAS ACTUALLY ACTED UPON BY THE PARTI ES. THIS IS BECAUSE OF THE FACT . WHEN THE AO IS GOING TO MAKE AN ADDITION, THERE SHOULD BE SUFFICIENT EVIDENCE BROUG HT ON RECORD TO SUPPORT SUCH ADDITION. NO ADDITION CAN BE MADE ON CONJECTURES AND SURMISES. AS SEEN FROM THE ASSESSME NT ORDER, THE AO HAS ADOPTED VALUE OF THE PROPERTY AT THE RS. 7000/- PER SQ. YARD ON THE DATE OF TRANSACTION. FOR ADOPTI NG SUCH A VALUATION, THE AO HAS NOT CONDUCTED ANY ENQUIRY O R BROUGHT ANY MATERIALS ON RECORD TO SHOW THAT THE VALUE OF T HE PROPERTY ON THE DATE OF TRANSACTION WAS ACTUALLY RS .7000 PER SQ. YARD. ON THE OTHER HAND, THE ASSESSEE HAS DEMONSTRATED WITH SUPPORTING EVIDENCE THAT THE VALU E OF THE LAND ON THE DATE OF TRANSACTION WAS THE RATE ME NTIONED IN THE REGISTERED SALE DEED AND FOR WHICH THE PROPERTY WAS SOLD. THE ASSESSEE HAS ALSO PRODUCED SUFFICIENT EVIDENCE TO SHOW THAT THE - RE WAS DISPUTE GOING ON REGARDING THE LEGAL RIGHT O VER THE PROPERTY WHICH ALSO HAD AN EFFECT ON THE FAIR MARKET VALUE O F THE PROPERTY. IT IS ALSO PERTINENT TO MENTION HERE THAT THE ASSESSEE HAD FILED HIS RETURN F INCOME FOR THE ASSE SSMENT YEARS ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 25 UNDER DISPUTE MUCH PRIOR TO THE DATE OF SEARCH DECL ARING THE PURCHASE OF LAND IN QUESTION AT THE CONSIDERATION M ENTIONED IN THE REGISTERED SALE DEEDS. 155) FAR AS THE AO'S OBS ERVATIONS ON THE LOOSE SHEETS RECOVERED FROM THE RESIDENCE OF SM T. NALINI DEVI ARE CONCERNED, THE CIT (A) AFTER DULY EXAMINING THEM HA S GIVEN A CONCLUSIVE FINDING THAT THE ASSESSEE'S NAME HAS NO WHERE BEEN MENTIONED IN THOSE DOCUMENTS NOR THE AMOUNT OF RS.1 09.48 LAKHS REPRESENTS THE EXPENDITURE INCURRED BY SMT NA LINI DEVI. HOWEVER, THE AMOUNT WAS FOUND TO BE THE SUMMARY OF THE BALANCE OF VARIOUS ACCOUNTS OPERATED BY THE FAMILY MEMBERS OF SMT. NALINI DEVI. WE FIND THAT THE CIT (A) IN HIS E LABORATE AND WELL REASONED ORDER HAS DEALT WITH ALL THESE ASPECTS AND CAME TO A FINDING ON FACT THAT THE AO HAS MADE THE ADDITION P URELY ON CONJECTURES AND SURMISES AND NOT ON THE BASIS OF AN Y MATERIAL OR EVIDENCE BROUGHT ON RECORD. ON EXAMINING THE FAC TS AND MATERIALS BEFORE US, WE ARE OF THE VIEW THAT THE FI NDING ARRIVED BY THE CIT (A) IS JUST AND PROPER AND IN ACCORDANCE WI TH THE PRINCIPLES OF LAW LAID DOWN BY THE HON'BLE SUPREME COURT AND HON' BLE HIGH COURTS WHICH ARE CITED BEFORE HIM. WE THEREFORE FIND NO NE CESSITY TO INTERFERE WITH THE FINDING OF THE CIT (A) ON THIS I SSUE. HENCE THE GROUNDS RAISED BY THE REVENUE FOR THE YEARS UND ER CONSIDERATION ARE DISMISSED. 22. THE HONBLE A.P. HIGH COURT IN ITA NO.232 OF 20 13 IN THE CASE OF CIT VS. SMT. R. NALINI DEVI HAS UPHELD THE ORDER OF THE ITAT HYDERABAD BENCH. THE HONBLE HIGH COURT WHILE, CONSIDERING T HE ISSUE HELD AS UNDER: WE HAVE HEARD THE LEARNED COUNSEL FOR THE APPELLANT AND GONE THROUGH THE IMPUGNED JUDGEMENT AND ORDER OF THE LEA RNED TRIBUNAL. IT APPEARS, THE ASSESSING OFFICER HAD RELIED ON A P HOTOCOPY OF AN UNSIGNED SALE AGREEMENT IN ORDER TO FIND THAT CONSI DERATION AMOUNT HAS BEEN PAID AT RS.1,68,00,000/-. THEREFORE, THIS AMO UNT WAS NOT DISCLOSED. THE LEARNED TRIBUNAL HAS CORRECTLY CONC LUDED THAT UNSIGNED PHOTOCOPY OF THE AGREEMENT FOR PURCHASE OF THE PROP ERTY CANNOT BE A MATERIAL TO RELY ON, WHEN THE REGISTERED SALE DEED HAS BEEN PRODUCED AND THE SAME SHOWS THAT THE PROPERTY WAS PURCHASED AT A PRICE OF RS.23,50,000/-. THIS REGISTERED SALE DEED WAS DISC LOSED AT THE TIME OF ORIGINAL ASSESSMENT. ACCORDING TO US, THE AGREEMEN T OF SALE LOSES ITS FORCE, THE MOMENT REGISTERED SALE DEED IS EXECUTED. IF THE PROPERTY HAS BEEN PURCHASED AT A HIGHER PRICE THAN THAT OF MENTI ONED IN THE PURCHASE DEED, THEN THE ONUS IS ON THE ASSESSING OFFICER TO ESTABLISH THAT, AS HAS ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 26 BEEN RIGHTLY CONCLUDED BY THE TRIBUNAL ON THIS ISSU E. MOREOVER, PHOTOCOPY OF THE UNSIGNED AGREEMENT HAS GOT NO EVID ENTIARY VALUE. THE ASSESSING OFFICER HAS DONE A GUESS WORK WHILE COMIN G TO THE CONCLUSION THAT THE PRICE OF THE PROPERTY IS MORE THAN MENTION ED IN THE SALE DEED. THERE MUST BE SOME MATERIAL AND BASIS TO CONCLUDE T HAT THE PURCHASE HAS BEEN MADE AT AN UNDER VALUATION. 23. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS . P.V. KALYANA SUNDARAM (2007) 294 ITR 49, UNDER THE SIMILAR CIRCU MSTANCES HELD IN FAVOUR OF THE ASSESSEE. THE HONBLE SUPREME COURT, WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE HELD AS UNDER: WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES AND H AVE GONE THROUGH THE RECORD. IT IS TRUE THAT THE DIVISION B ENCH OF THE HIGH COURT HAS BORROWED EXTENSIVELY FROM THE ORDERS OF THE TRI BUNAL AND THE COMMISSIONER AND PASSED THEM OFF AS IF THEY WERE TH EMSELVES THE AUTHOR(S). WE FEEL THAT QUOTING FROM AN ORDER OF S OME AUTHORITY PARTICULARLY A SPECIALIZED ONE CANNOT PER SE BE FAU LTED AS THIS PROCEDURE CAN OFTEN HELP IN MAKING FOR BREVITY AND PRECISION, BUT WE AGREE WITH MR. VAHANVATI TO THE EXTENT THAT ANY BORROWED WORD S USED IN A JUDGEMENT MUST BE ACKNOWLEDGED AS SUCH IN ANY APPRO PRIATE MANNER AS A COURTESY TO THE TRUE AUTHOR(S). BE THAT AS IT MA Y, WE ARE OF THE OPINION THAT THE THREE QUESTIONS REPRODUCED ABOVE C AN, IN NO WAY, BE CALLED SUBSTANTIAL QUESTIONS OF LAW. THE FACT AS T O THE ACTUAL SALE PRICE OF THE PROPERTY, THE IMPLICATION OF THE CONTRADICTO RY STATEMENTS MADE BY RAJARATHINAM OR WHETHER RELIANCE COULD BE PLACED ON THE LOOSE SHEETS RECOVERED IN THE COURSE OF THE RAID ARE ALL QUESTIO N OF FACT. WE THEREFORE FIND NO INFIRMITY IN THE ORDER OF THE HIGH COURT. ACCORDINGLY, WE DISMISS THE APPEAL. 24. CONSIDERING THE TOTAL FACTS AND CIRCUMSTANCES O F THE CASE AND ALSO APPLYING THE RATIOS OF THE JUDGEMENTS CITED ABOVE, WE ARE OF THE OPINION THAT THE A.O. IS NOT CORRECT IN COMING TO THE CONCL USION THAT THE ON MONEY IS EXCHANGED BETWEEN THE PARTIES BASED ON A L OOSE SHEET FOUND IN THE PREMISES OF A THIRD PERSON AND ALSO ADMISSIO N BY A THIRD PERSON. TO SUSTAIN THE ADDITION, THE A.O. SHOULD HAVE CONDU CTED AN INDEPENDENT ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 27 ENQUIRY ABOUT THE VALUE OF THE PROPERTY AND ASCERTA IN WHETHER ANY UNDER VALUATION IS DONE, IF SO WHAT IS THE CORRECT VALUE OF THE PROPERTY. FURTHER, THE A.O. DID NOT BROUGHT ON RECORD ANY EVI DENCE TO SUPPORT HIS CONTENTION TO SAY THAT THERE IS ON MONEY EXCHANGED BETWEEN THE PARTIES. IN THE ABSENCE OF PROPER ENQUIRY AND SUFF ICIENT EVIDENCES, WE FIND NO REASON TO CONFIRM THE ADDITION MADE BY THE A.O. THEREFORE, WE REVERSE THE CIT(A) ORDER AND DIRECT THE ASSESSING O FFICER TO DELETE THE ADDITION. 25. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED . THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 6 TH NOV15. SD/- SD/- ( (( ( . .. . ) ) ) ) ( (( ( . . . . ) ) ) ) ( (( ( V. DURGA RAO ) )) ) ( (( ( G. MANJUNATHA) / // / JUDICIAL MEMBER / // / ACCOUNTANT MEMBER /VISAKHAPATNAM: 6 / DATED : 6.11.2015 VG/SPS / - 7 / COPY OF THE ORDER FORWARDED TO :8 1. , / THE APPELLANT SRI VENKATARAMA SAI DEVELOPERS, FLAT NO.T-3, 3 RD FLOOR, REDNAM REGENCY, DWARAKANAGAR, VISAKHAPATNAM. 2. -., / THE RESPONDENT THE DCIT, CENTRAL CIRCLE-1, VISAKHAPATNAM 3. ; / THE CIT(CENTRAL), HYDERABAD 4. THE CCIT, VISAKHAPATNAM 5. ; () / THE CIT(A), VISAKHAPATNAM ITA NO.453/VIZAG/2012 VENKATA RAMA SAI DEVELOPERS, VSKP 28 6. -, , / // / DR, ITAT, VISAKHAPATNAM 7 . . . . / GUARD FILE / BY ORDER // TRUE COPY // AB ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM