Dy.CIT, Central Circle-2, Hyderabad V. M/s Hyderabad Township Private Limited, Hyderabad

ITA 509/HYD/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69925 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 10-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBASHREE ANANTHA KRISHNA
• Keywords: Unexplained investment; Search and seizure; Loose papers; Opportunity of cross examination; Source of fund; Third party statement
• Section: 131; 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.509/HYD/2013 ASSESSMENT YEAR 2008-09. DY. CIT, CENTRAL CIR-2, -V- M/S. HY DERABAD TOWNSHIP PVT. HYDERABAD. L TD., HYDERABAD. PAN:AABLH7953H (APPELLANT) (RESPONDENT) APPELLANT BY SMT. SUBASHREE ANANTHA KRISHNA RESPONDENT BY MOHD. AFZAL DATE OF HEARING 30 - 10 - 2013 DATE OF PRONOUNCEMENT 13 - 1 1 - 2013 ORDER PER SAKTIJIT DEY, J.M: THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST T HE ORDER DATED 21-1-2013 OF CIT (A)-I, HYDERABAD PASSE D IN ITA NOS. 0321/CC-2,HYD/CIT (A)I, HYD/11-12 PERTAINING TO THE ASSESSMENT YEAR 2008-09. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE DEPARTME NT READS AS UNDER:- 2 ITA NO.509 OF 2013 HYDERABAD TOWNSHIP PRIVATE LTD., HYD. THE CIT (A) IS NOT JUSTIFIED IN DELETING THE ADDIT ION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLA INED INVESTMENT ON THE PART OF THE ASSESSEE-COMPANY WITH OUT ANY WELL-GROUNDED REASON FOR SUCH DELETION. MOREOV ER, THE ONUS IS ON THE ASSESSEE TO PROVE THAT THE PAYME NT HAD NOT BEEN MADE, AND THE ASSESSEE HAD FAILED TO FURNISH ANY EVIDENCE. 3. BRIEFLY THE FACTS ARE THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF REAL ESTATE. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN CASE OF ANOTHER COMPANY M/S. HYDERABAD HOUSE PVT. LTD., AND CONSEQUENTIAL SEARCH WAS ALSO MADE I N THE RESIDENCE OF ONE SRI MOHD. HIDAYATULLAH OWAIS. DUR ING THE COURSE OF SEARCH IN THE RESIDENTIAL PREMISES OF MOH D. H. OWAIS, CERTAIN LOOSE PAPERS WERE FOUND AND SEIZED WHEREIN NOTING RELATING TO PAYMENT OF CERTAIN AMOUNTS WERE MENTION ED. WHEN THE SEIZED MATERIAL WAS CONFRONTED TO SRI M.H. OWAI S, HE STATED THAT THE NOTING PERTAINED TO M/S HYDERABAD HOUSE PV T. LIMITED RELATING TO TRANSACTION OF PURCHASE OF LAND AND PAY MENTS MADE. SRI M.H. OWAIS FURTHER STATED THAT AS PER THE LOOSE SHEET A SUM OF RS.1 CRORE WAS HAVE BEEN PAID AS ADVANCE FO R A REAL ESTATE DEAL AND A FURTHER AMOUNT OF RS.3 CRORES WAS TO BE PAID BY M/S HYDERBAAD HOUSE PVT. LIMITED. HOWEVER, IN A SUBSEQUENT STATEMENT IT WAS STATED THAT M/S HYDERAB AD TOWNSHIP PVT. LIMITED I.E., THE ASSESSEE COMPANY HA D PAID THE SAID AMOUNT OF RS.1 CRORE TO THE LAND OWNER AND RS .3 CRORES WAS YET TO BE PAID. THOUGH SRI MIR MAZHARUDDIN, TH E MANAGING 3 ITA NO.509 OF 2013 HYDERABAD TOWNSHIP PRIVATE LTD., HYD. DIRECTOR OF BOTH M/S HYDERABAD HOUSE PVT. LIMITED A ND THE ASSESSEE COMPANY DENIED THE FACT THAT ANY OF THE CO MPANY HAS MADE THE PAYMENT OF RS.1 CRORE BUT ON THE BASIS OF THE STATEMENT RECORDED FROM SRI M.H. OWAIS, THE DDIT QU ANTIFIED THE AMOUNT OF RS.1 CRORE AS THE INCOME OF THE ASSES SEE COMPANY FOR THE FINANCIAL YEAR 2007-08. ON THE AFO RESAID BASIS, NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE CO MPANY ON 11-8-2010 CALLING UPON THE ASSESSEE TO SUBMIT ITS R ETURN. IN RESPONSE TO THE NOTICE ISSUED U/S 148, THE ASSESSEE FILED A RETURN OF INCOME ON 17-10-2011 DECLARING LOSS OF RS .3500/-. 4. DURING THE ASSESSMENT PROCEEDINGS, THOUGH SRI M IR MAZHARUDDIN THE M.D OF BOTH THE COMPANIES I.E. M/S HYDERABAD HOUSE PVT. LIMITED AND THE ASSESSEE COMPANY CATEGOR ICALLY STATED THAT NO PAYMENT OF RS.1 CRORE WAS MADE BY TH E AFORESAID TWO COMPANIES BUT THE ASSESSING OFFICER R ELYING UPON THE STATEMENT OF SRI M.H. OWAIS TREATED THE AMOUN T OF RS. 1 CRORE AS MENTIONED TO HAVE BEEN PAID IN THE LOOSE SHEET AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT AT THE HAN DS OF THE ASSESSEE AND ADDED TO THE TOTAL INCOME OF THE IMPUG NED ASSESSMENT YEAR. WHILE DOING SO, THE ASSESSING OFF ICER FURTHER NOTED THAT THOUGH SUMMONS WAS ISSUED TO SRI M.H. OW AIS IN ORDER TO FURTHER EXAMINE HIM BUT IT RETURNED UNSERV ED. THE ASSESSING OFFICER OBSERVED THAT SINCE THE ASSESSEE HAS NOT DISCHARGED THE ONUS BY ESTABLISHING THAT THE PAYMEN T HAS NOT BEEN MADE AS RECORDED IN LOOSE SHEET I.E. ANNEXURE MHO/HH/PL/2, ASSESSEES CONTENTION CANNOT BE ACCEPT ED. 4 ITA NO.509 OF 2013 HYDERABAD TOWNSHIP PRIVATE LTD., HYD. BEING AGGRIEVED OF THE ADDITION MADE, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A). 5. DURING THE HEARING OF APPEAL BEFORE THE CIT (A), IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT THE APPEL LANT IS A PRIVATE LIMITED COMPANY INCORPORATED WITH A CAPITAL OF RS. 1 LAKH AND HAS NOT DONE ANY BUSINESS DURING THE RELE VANT PERIOD. IT WAS SUBMITTED THAT THE DIARY SEIZED FROM THE RES IDENCE OF SRI M.H OWAIS, EX-DIRECTOR OF THE ASSESSEE COMPANY, CON TAINED CERTAIN ROUGH SCRIBBLING WITHOUT MENTIONING ANY NA ME. IT WAS FURTHER SUBMITTED THAT SRI M.H OWAIS IN HIS STATEME NT DATED 18-12-2007 HAD ALSO STATED THAT NO ACTIVITY WAS DON E BY THE ASSESSEE-COMPANY THOUGH THEY WERE PLANNING A VENTUR E CALLED DACHA ABOUT 70KM FROM HYDERABAD. IT WAS FURTHER SUBMITTED THAT THE LAND BELONG TO SRI WASIF, HUSBAND OF THE S ISTER OF THE WIFE OF SRI MIR ANWARUDDIN. IT WAS STATED THAT THE LAND WAS NOT PURCHASED BUT TAKEN FOR DEVELOPMENT @ RS.5 LAKHS PE R ACRE AND SOME PAYMENT OF RS.25 TO 30 LAKHS WAS MADE TO S RI WASIF AS ADVANCE, ROUGHLY 3 TO 4 MONTHS BACK, IN AUGUST O R SEPTEMBER, 2007. SRI OWAIS ALSO STATED THAT HE HA D HEARD ABOUT TWO OTHER VENTURES CALLED NEST AND DREAMZ , THOUGH HE DID NOT KNOW ANYTHING ABOUT THOSE. 6. IT WAS SUBMITTED BY THE ASSESSEE THAT SRI OWAIS ALSO STATED THAT ALL THREE VENTURES WERE PERSONALLY HAND LED BY SRI MIR MAZHARUDDIN AND SRI MOHD. GHOUSE. THE ASSESSEE SUBMITTED THAT IN A SUBSEQUENT STATEMENT DATED 31-1 2-2007 WHEN SRI OWAIS WAS CONFRONTED WITH THE SAME SEIZ ED 5 ITA NO.509 OF 2013 HYDERABAD TOWNSHIP PRIVATE LTD., HYD. DOCUMENT AND ASKED TO COMMENT ON THE SAME, THEN SR I OWAIS STATED THAT THE SAID LOOSE SHEET CONTAINED THE DET AILS OF PAYMENT IN RESPECT OF DACHA PROJECT OF THE ASSESS EE I.E., M/S HYDERABAD TOWNSHIP PVT. LIMITED. , AND THAT HE WAS TOLD BY THE OTHER TWO DIRECTORS OF THE COMPANY THAT IT HAD MADE A PAYMENT OF RS. 1 CRORE TO THE LAND OWNERS AND THE B ALANCE PAYMENT OF RS.3 CRORES WAS TO BE MADE SUBSEQUENTLY. THE ASSESSEE CONTENDED THAT THOUGH THE M.D OF THE ASSE SSEE- COMPANY SRI MAZHARUDDIN IN THE STATEMENT RECORDED BY HIM DENIED OF HAVING BEEN MADE ANY PAYMENT TO LAND OWN ERS AND ALSO DENIED OF ENTERING INTO ANY AGREEMENT FOR PURC HASE OF THE PROPERTY IN THE NAME OF THE COMPANY BUT THE ASSESSI NG OFFICER SIMPLY RELYING UPON THE STATEMENT OF SRI OWAIS HA S MADE THE ADDITION. IT WAS FURTHER SUBMITTED THAT THE STATEM ENT RECORDED FROM SRI OWAIS HAS NO EVIDENTIARY VALUE AS IT WAS N OT ACTUALLY RECORDED IN THE COURSE OF SEARCH AND SEIZURE OPERAT ION BUT SUBSEQUENT THERETO. IT WAS FURTHER CONTENDED THAT WHEN THE STATEMENT WAS RECORDED, SRI OWAIS WAS NOT A DIRECTO R OR PERSON-IN-CHARGE OF THE ASSESSEE COMPANY, THEREFORE THE ASSESSEE CANNOT BE HELD RESPONSIBLE FOR THE RECORD ING MADE BY A THIRD PARTY IN THE LOOSE SHEET. HE FURTHER SUBMIT TED THAT THERE IS CONTRADICTION IN THE STATEMENTS OF SRI OWAIS FO R WHICH MUCH CREDENCE CANNOT BE GIVEN TO SUCH STATEMENT. THE CI T (A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE MATERIALS ON RECORD DELETED THE ADDITION HOLDING AS UNDER:- 6 ITA NO.509 OF 2013 HYDERABAD TOWNSHIP PRIVATE LTD., HYD. 07.0 I HAVE GONE THROUGH THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE APPELLANT. IT IS SEEN THAT IN TH E INSTANT CASE, THE AMOUNT OF RS..L CRORE HAS BEEN CONSIDERED BY THE ASSESSING OFFICER AS UNEXPLAINED INVESTMENT OF THE APPELLANT COMPANY MERELY ON THE GROUND THAT SRI M.H.OWAIS IN HIS STATEMENT HAD STATED THAT PAGE NO. S8 OF ANNEXURE MHO/HHPL/2 'CONTAINS DETAILS OF PAYMENTS ETC. PAID IN RESPECT OF 'DACHA' PROJECT OF M/S.HYDERABAD TOWNSHIP PVT.LTD. DURING THE DISCUSSIONS WITH THE O THER DIRECTORS, SRI MIR MAZHARUDDIN AND SRIMOHD.GHOUSE, I WAS TOLD THAT THE COMPANY, M/S.HYDERABAD TOWNSHIP PVT.L TD. HAS MADE A PAYMENT OF RS.L CRORE TO THE LAND OWNERS AND THE BALANCE PAYMENT OF RS.3 CRORES IS TO BE MADE SUBSEQUENTLY.' HOWEVER, THE FIRST THING TO BE NOTED IS THAT THE SEIZED DIARY CONTAINING THE ABOVE PAGE WAS NOT FOUND FROM THE POSSESSION OF THE APPELLANT COMPANY OR ITS MANAGING DIRECTOR RATHER IT WAS FOUND FROM THE RESI DENCE OF SRI M.H.OWAIS, WHO ON THE DATE OF STATEMENT HAD ALREADY PUT IN HIS PAPERS, BOTH FROM M/S. HYDERABAD HOUSE PVT. LTD. AND M/S. HYDERABAD TOWNSHIP PVT. LTD. IT CAN B E SEEN FROM HIS STATEMENTS THAT EVEN IN THE COURSE OF HIS ASSOCIATION WITH THE APPELLANT COMPANY, HE WAS HAVI NG LIMITED INVOLVEMENT ONLY AND DID NOT HAVE ANY FINAN CIAL STAKE THEREIN. AS STATED BY HIM IN HIS ANSWER HE WA S ONLY 'TOLD' IN THE COURSE OF DISCUSSION WITH OTHER DIREC TORS THAT M/S. HYDERABAD TOWNSHIP PVT. LTD. HAD MADE A PAYMEN T OF RS.L CRORE TO THE LAND OWNERS. THEREFORE, THE ENTIRE EDI FICE OF THE ADDITION OF RS.1 CRORE IS THE STATEMENT OF SRI IV1.H.OWAIS THAT HE WAS TOLD ABOUT SUCH INVESTMENT. IT CANNOT BE DENIED THAT EXCEPT FOR STATING THIS, SRI OWAIS COULD NOT GIVE DETAILS OF THE DATE AND MODE OF PAYM ENT, LAND OWNERS, SOURCE OF FUNDS ETC. BESIDES, IT IS AL SO CLEAR THAT IN THE TWO STATEMENTS, SRI M.H.OWAIS DID STATE DIFFERENT FACTS IN RESPECT OF THE SAME ISSUE, SHOWI NG THAT HE WAS NOT IN COMPLETE AND CORRECT KNOWLEDGE OF FAC TS. ACCORDINGLY, I FIND MERIT IN THE CONTENTION OF THE LEARNED REPRESENTATIVE OF THE APPELLANT THAT THE ADDITION I S BASED MERELY ON HEARSAY. 07.1 AS REGARDS THE EVIDENTIARY VALUE OF THE STATEM ENTS OF 7 ITA NO.509 OF 2013 HYDERABAD TOWNSHIP PRIVATE LTD., HYD. SRI M. H. OWAIS, FROM THE COPIES OF STATEMENTS IT I S SEEN THAT THOSE WERE RECORDED MERELY 'IN CONNECTION TO T HE SEARCH U/S.132 OF THE ACT' AND NOT 'DURING THE COUR SE OF SEARCH OR SEIZURE' WHICH CAN BE SAID TO HAVE EVIDEN TIARY VALUE IN TERMS OF SECTION 132(4) OF THE INCOME TAX ACT, 1961. ACCORDINGLY, EVEN IF THE SAID STATEMENTS WERE TO BE USED AS EVIDENCE, THOSE WERE REQUIRED TO BE CORROBO RATED BY OTHER CONCRETE EVIDENCE. 07.2 AS REGARDS THE OBSERVATION OF THE ASSESSING OF FICER THAT THE APPELLANT COULD NOT PROVE THAT THE PAYMENT AS STATED BY MR. OWAIS WAS ACTUALLY NOT MADE, IT IS CL EAR THAT SINCE THE DOCUMENTS WERE NOT FOUND FROM THE POSSESS ION OF THE APPELLANT OR ITS MANAGING DIRECTOR, NOR THE NOTINGS THEREIN WERE MADE BY THEM, IN THE LIGHT OF THE DECI SIONS CITED BY THE LEARNED REPRESENTATIVE OF THE APPELLAN T, NO PRESUMPTION COULD BE DRAWN IN RESPECT OF THE APPELL ANT, WHICH WAS REQUIRED TO BE REBUTTED AS PROVIDED U/S.132(4A) OF THE ACT. EVEN THOUGH IN THE LIGHT OF THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CA SE OF DEVSHAYEE NADER, IT IS NOT IMPERATIVE IN THE INCOME -TAX PROCEEDINGS TO PROVIDE CROSS EXAMINATION FOR UTILIZ ING ANY EVIDENCE AGAINST THE ASSESSEE, IT IS A FACT THAT AF TER MAKING SUCH ALLEGATIONS, SRI M. H. OWAIS COULD NOT BE LOCATED IN THE COURSE OF ASSESSMENT PROCEEDINGS. 07.3 IN VIEW OF THE ABOVE DISCUSSION, IT IS ABUNDAN TLY CLEAR THAT THE ADDITION IN THE PRESENT CASE HAS BEE N MADE MERELY ON THE BASIS OF A DOCUMENT FOUND FROM THE POSSESSION OF A THIRD PARTY AND THE STATEMENT MADE BY SUCH THIRD PARTY. HOWEVER, IN THE DECISIONS SUCH AS ASHWINI KUMAR VS. ITO (39 ITD 183)(DEL) IT IS CLEAR THAT NO PRESUMPTION U/S.132( 4A) COULD HAVE BEEN RAISED IN RESPECT OF THE SAID DOCUMENT AGAINST THE APPELLANT COMPANY. BESIDES, IN THE LIGHT OF THE DECISION OF T HE HON'BLE JURISDICTIONAL INCOME-TAX APPELLATE TRIBUNA L IN THE CASE OF K.V.LAKSHMI SAVITRI DEVI ALSO IT IS CLEAR T HAT IN THE ABSENCE OF CORROBORATLVE EVIDENCE, A THIRD PARTY STATEMENT COULD NOT HAVE BEEN RELIED UPON AND THE MERE PAGE O F THE SEIZED DIARY SEIZED FROM SUCH THIRD PARTY COULD NOT HAVE BEEN A BAS S FOR ADDITION IN THE HANDS OF THE APPEL LANT. ACCORDINGLY, SINCE THE NOTINGS IN THE SEIZED DIARY HAVE NOT BEEN SUPPORTED BY ANY CORROBORATIVE EVIDENCE OR EVEN 8 ITA NO.509 OF 2013 HYDERABAD TOWNSHIP PRIVATE LTD., HYD. CIRCUMSTANTIAL EVIDENCE, FINDING NO BASIS TO SUSTAI N THE ADDITION MADE BY THE ASSESSING OFFICER, THE ADDITIO N OF RS.L,OO,OO,OOO /- AS UNEXPLAINED INVESTMENTS IN THE HANDS OF THE APPELLANT IS DELETED. 7. WE HAVE CONSIDERED THE SUBMISSION OF THE PARTIE S AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WE LL AS OTHER MATERIALS ON RECORD. AS CAN BE SEEN FROM THE NARRAT ION OF FACTS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORD ER, THE LOOSE SHEETS CONTAINING SCRIBBLING OF CERTAIN PAYME NTS OF RS. 1 CRORE WAS FOUND DURING SEARCH ACTION IN THE RESIDEN TIAL PREMISES OF MOHD. M.H. OWAIS. IT IS FURTHER EVIDEN T FROM THE FACTS RECORDED BY THE ASSESSING OFFICER THAT A STAT EMENT WAS RECORDED ON 18-2-2007 FROM SRI M.H. OWAIS BY THE D DIT (INV.) DURING THE ENQUIRY WHEREIN IT WAS STATED THAT THE P AYMENT OF RS.1 CRORE AS NOTED IN THE LOOSE SHEET PERTAINED TO HYDERABAD HOUSE PRIVATE LIMITED TOWARDS PURCHASE OF LAND. SU BSEQUENTLY, ON 31-12-2007 A FURTHER STATEMENT WAS RECORDED FROM SRI M.H. OWAIS BY THE DDIT (INVESTIGATION) WHEREIN SRI M.H. OWAIS MADE A DIFFERENT STATEMENT BY STATING THAT THE PAYM ENTS PERTAINED TO M/S HYDERABAD TOWNSHIP PRIVATE LIMITED I.E., THE PRESENT ASSESSEE IN RESPECT OF DACHA PROJECT. IT WOULD BE FURTHER EVIDENT FROM THE FACTS RECORDED BY THE ASSE SSING OFFICER THAT IN THE SAID STATEMENT SRI M.H. OWAIS ALSO ADMI TTED THAT DURING THE DISCUSSIONS WITH OTHER DIRECTORS, HE WAS TOLD THAT THE ASSESSEE HAS MADE A PAYMENT OF RS.1 CRORE TO TH E LAND OWNER AND THE BALANCE OF RS.3 CRORES WAS TO BE MADE SUBSEQUENTLY. THUS, IT IS VERY MUCH CLEAR APART FR OM TWO 9 ITA NO.509 OF 2013 HYDERABAD TOWNSHIP PRIVATE LTD., HYD. STATEMENTS RECORDED BY SRI M.H. OWAIS AND THE LOOSE SHEET SEIZED FROM HIS POSSESSION CONTAINING CERTAIN NOTIN G, THERE ARE NO OTHER DOCUMENTS AVAILABLE BEFORE THE ASSESSING O FFICER TO ESTABLISH THE FACT THAT THE AMOUNT OF RS.1 CRORE WA S ACTUALLY PAID BY THE ASSESSEE TO THE LAND OWNERS. IT IS ALS O A FACT THAT SRI M.H. OWAIS STATED IN THE STATEMENT RECORDED THA T HE WAS TOLD BY OTHER DIRECTORS THAT THE AMOUNT OF RS.1 C RORE WAS PAID TO THE LAND OWNERS. 8. A PERUSAL OF THE SEIZED DOCUMENT I.E. ANNEXURE MHO/HH/PL/2 A COPY OF WHICH WAS PLACED BEFORE US WO ULD REVEAL THAT APART FROM THE FACT THAT CERTAIN AMOUNT S HAVE BEEN MENTIONED, THE BLUE SHEET NEITHER CONTAINS ANY NAME OF THE PAYER NOR THE PAYEE. IT IS ALSO AN UNDISPUTED FACT THAT THE SAID LOOSE SHEET WAS RECOVERED FROM THE PASSION OF SRI M .H. OWAIS. THEREFORE, WHEN THE LOOSE SHEET DOES NOT CONTAIN AN Y NAME WITH REGARD TO PAYER OR PAYEE WHEN IT WAS SEIZED FR OM A THIRD PARTY, NO ADDITION CAN BE MADE ON THE BASIS OF THA T LOOSE SHEET OR THE STATEMENT RECORDED FROM THE THIRD PAR TY FROM WHOSE POSSESSION THE LOOSE SHEETS WERE RECOVERED UN LESS THERE IS ANY OTHER CORROBORATIVE EVIDENCE TO PROVE THE FA CT THAT THE NOTING MADE IN THE LOOSE SHEET OR THE STATEMENT MAD E BY MR. M.H. OWAIS IS CORRECT. IT IS A FACT ON RECORD THAT THE M.D OF THE ASSESSEE COMPANY SRI SRI MIR MAZHARUDDIN HAD CATEGORICALLY DENIED OF HAVING MADE ANY PAYMENT OF RS.1 CRORE TOW ARDS PURCHASE OF THE LAND IN THE COURSE OF STATEMENT RE CORDED FROM HIM U/S 131 OF THE ACT. HENCE, THE VERSION OF THE M.D SRI MIR 10 ITA NO.509 OF 2013 HYDERABAD TOWNSHIP PRIVATE LTD., HYD. MAZHARUDDIN CANNOT BE DISBELIEVED AND THAT OF SRI M.H. OWAIS BE ACCEPTED WHEN THERE IS INCONSISTENCY IN THE STAT EMENTS RECORDED FROM SRI M.H. OWAIS TO THE EFFECT THAT ON THE FIRST OCCASION HE STATED THAT THE PAYMENT OF RS.1 CRORE P ERTAINED TO HYDERABAD HOUSE PVT. LTD BUT ON THE SUBSEQUENT OCCA SION HE CHANGED HIS VERSION BY STATING THAT THE PAYMENT WAS MADE BY THE PRESENT ASSESSEE. IT IS ALSO A FACT ON RECORD THAT THE ASSESSEE WAS NEVER GIVEN AN OPPORTUNITY TO CROSS EX AMINE THE SRI M.H. OWAIS. 9. IN THE AFORESAID CIRCUMSTANCES, THE STATEMENT R ECORDED FROM SRI M.H. OWAIS HAS NO EVIDENTIARY VALUE. IT I S FURTHER PERTINENT TO NOTE THAT IN THE STATEMENT RECORDED ON 31-12- 2007, SRI M.H. OWAIS STATED THAT HE WAS TOLD BY THE OTHER TWO DIRECTORS ABOUT THE PAYMENT OF RS.1 CRORE BEING MAD E BY THE ASSESSEE TO THE LAND OWNER. THIS PROVES THAT SRI M. H. OWAIS HAD NO DIRECT KNOWLEDGE ABOUT THE PAYMENT BEING MAD E. HENCE, IN THE CIRCUMSTANCES, THE NOTING MADE IN THE LOOSE SHEET COULD NOT BE SAID TO BE PERTAINING TO THE ASS ESSEE COMPANY. IN AFORESAID VIEW OF THE MATTER, THERE BE ING NO DIRECT OR INDIRECT EVIDENCE TO ESTABLISH THE FACT T HAT THE ASSESSEE IN FACT HAS MADE A PAYMENT OF RS.1 CRORE TOWARDS PURCHASE OF LAND OUTSIDE THE BOOKS OF ACCOUNTS, THE ADDITION MADE OF THE AMOUNT OF RS.1 CRORE CANNOT BE SUSTAINE D. IN THIS VIEW OF THE MATTER, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT (A) IN DELETING THE SAME. 11 ITA NO.509 OF 2013 HYDERABAD TOWNSHIP PRIVATE LTD., HYD. 10. IN THE RESULT, THE APPEAL BY THE DEPARTMENT STA NDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 13-11-2013. SD/- ( CHANDRA POOJARI) ACCOUNTANT MEMBER SD/- (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 13 TH NOVEMBER, 2013 COPY TO:- 1) DCIT, CENTRAL CIR-2, 7 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 2) M/S HYDERABAD TOWNSHIP PVT. LTD., 6-1-628, KHAIRATABAD, HYDERABAD. 3) CIT (A)-I, HYDERABAD. 4) CIT (CENTRAL), HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. JMR* 12 ITA NO.509 OF 2013 HYDERABAD TOWNSHIP PRIVATE LTD., HYD.