Janardhan Reddy Kontham, Hyderabad V. Asst. Commissioner of Income Tax, Central Circle-2(3), Hyderabad

ITA 542/Hyd/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5686 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 12-11-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 22-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D SRINIVAS
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Business income; Search and seizure; Additional evidence; Cost of acquisition; Corroborative evidences
• Section: 153A; 132

Judgement Text

ITA NOS 541 TO 544 OF 2018 JANARDHAN REDDY KONTHAM HYDERABAD . PAGE 1 OF 11 IN THE I NCOME TAX APPELLATE TRIBUNAL H YDERABAD A B ENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO S 541 TO 544/HYD/2018 . (ASSESSMENT YEAR S : 2009 - 10, 2010 - 11, 2014 - 15 & 2015 - 16) SHR I JANARDHAN REDDY KONTHAM, HYDERABAD PAN:ADPPJ7935D` VS ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(3) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI K.A. SAI PRASAD FOR REVENUE : SHRI D. SRINIVAS, DR O R D E R PER S. RIFAUR RAHMAN, A .M. ALL THE ABOVE APPEALS ARE FILED BY THE ASSESSEE FOR THE A.Y S 2009 - 10,2010 - 11, 2014 - 15 & 2015 - 16 AGAINST THE ORDER OF THE CIT (A) - 12, HYDERABAD, DATED 22.01.2018 . ITA NO.541/HYD /2018 A. Y 2009 - 10 2. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE I.T. ACT, 1961 WAS CONDUCTED IN THE GROUP C ASES OF SRI SRI GRUHANIRMAN INDIA PVT LTD AND ITS GROUPS ON 24.12.20 14 WHEREIN WARRANT S OF AUTHORIZATION U/S 13 2(1) OF THE ACT DATED 23.12.2014 WAS EXECUTED IN THE NAME OF THE ASSESSEE . SUBSEQUENTLY, NOTICE U/S 153A OF THE ACT DATED 14.8.2015 W AS SERV ED ON THE ASSESSEE . IN RESPONSE TO THE NOTICE, DATE OF HEARING : 12.11 . 201 8 DATE OF PRONOUNCEMENT : 30 . 0 1 .201 9 ITA NOS 541 TO 544 OF 2018 JANARDHAN REDDY KONTHAM HYDERABAD . PAGE 2 OF 11 THE ASSESSEE FILED HIS RETURN OF INCOME ON 23.2.2016 DECLARING TOTA L INCOME OF RS.12,27,270/ - COMPRISING OF RS.8,38,605 UNDER THE HEAD BUSINESS INCOME , RS.4,78,6 17/ - UNDER THE HEAD CAPITAL GAINS AND RS.10,046/ - UNDER THE HEAD INCOME FROM O THER SOURCES . 3. DURING THE ASSESSMENT PROCEEDINGS , THE AO OBSERVED THAT THE A SS ESSEE HAS SOLD TWO PLOTS AT BADANGPET VILLAGE, SAROORNAGAR MANDAL, R.R. DISTRICT FOR A CONSIDERATION OF RS.9 ,50,000/ - . THE ASSESSEE AFTER CLAIM ING INDEXED COST OF ACQUISITION , DECLARED LONG TERM CAPITAL GAIN (LTCG) OF RS.4,78,617/ - . HE FURTHER OBSERVED T HA T THE ASSESSEE HAD PURC HASED LAND ADMEASURING 25,410 SQ. YARDS IN SURVEY NO.88 PART AT BADANGPET VILLAGE ON 27.08.2003 FOR A CONSIDERATION OF RS.6,56,500/ - . THE AO ALLOWED THE COST OF ACQUISITION AND RE FUSED TO ALLOW THE COST OF IMPROVEMENT CLAIMED BY TH E ASSESSEE SINCE THE ASSESSEE HAS NOT PROVIDED ANY EVIDENCE FOR COST OF IMPROVEMENT CLAIMED. ACCORDINGLY, THE AO MADE AN ADDITION OF RS.4,55,042/ - AS DIFFERENCE TOWARDS THE LTCG DECLARED BY THE ASSESSEE AND THE LTCG ARRIVED BY THE AO . 4. THE AO FURTHER N OT ICED THAT THE ASSESSEE HAS TAKEN A LOAN OF RS.15.00 LAKHS AND RS.44.00 LAKHS FROM SHRI KOMAIAH AND SRI RAMAN BHAI RESPECTIVELY @ 24% INTEREST PER ANNUM. WHEN THE ASSESSEE WAS ASKED TO EXPLAIN THE TRANSACTION, HE SUBMITTED THAT THE LOAN OF RS.59.00 LAKHS WA S PROVIDED BY HIS FATHER - IN - LAW SHRI SAMA NARASI MHA REDD Y WHO VOLUNTARILY ADMITTED THE SAME AS HIS UNDISCLOSED INCOME FOR THE A.Y 2014 - 15. ITA NOS 541 TO 544 OF 2018 JANARDHAN REDDY KONTHAM HYDERABAD . PAGE 3 OF 11 THE AO FURTHER OBSERVED THAT NO SUCH INCOME WAS ADMITTED BY SHRI SAMA NARASIMHA REDDY IN HI S RETURNS OF INCOME FILE D BY HIM ON 15.10.2015. THE ASSESSEE WAS ASKED TO PROVIDE THE DETAILS OF INTEREST RECEIVED ON THE ABOVE LOAN, YEAR - WISE AND ALSO TO SHOW CAUSE WHY THE AMOUNT OF RS.59 LAKHS SHOULD NOT BE BROUGHT TO TAX IN HIS HAND FOR THE YEA R UNDER CONSIDERATION. THE ASSE SS EE FAILED TO FURNISH ANY REPLY, HENCE THE AO BROUGHT THE ENTIRE AMOUNT OF RS.5 9.00 LAKHS TO THE TAX AS UNDISCLOSE D SOURCE OF INCOME BY THE ASSESSEE . 5. A G GRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A), WHO AFTER CONSIDERING THE STATEMENTS OF T HE ASSESSEE , DISMISSED THE GROUNDS RAISED BY THE ASSESSEE WITH REGARD TO LONG TERM CAPITAL GAINS. WITH RE G ARD TO THE ADDITION OF UNDISCLOSED SOURCE OF LOAN, THE LEARNED CIT (A) ALLOWED THE ADD ITION OF RS.15.00 LAKHS AFTER CONSIDERING THE REMAND REPORT OF T HE AO AND DISALLOWED THE ADDITION OF RS.44.00 LAKHS WHICH WAS GIVEN BY MR. KOMA R IAH. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED FIRST APPELLATE AUTHORITY IS NOT CORRECT EITHER IN LA W OR ON FACTS AND IN BOTH. 2. THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS .4 ,55,042 IGNORING THE CLAIM THAT THE APPELLATE HAD ADMITTED INCOME FROM LONG TERM GAINS AT RS .4 ,78,617 WHICH IS MORE THAN 50 PERCENT O F THE GROSS SALE PROCEEDS OF R S .9 ,50,000. 3. THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN NOT ACCEPTING THE CLAIMS THAT THE INCOME FROM SALE OF PLOTS SHOULD BE ASSESSED AS BUSINESS INCOME AND NOT AS CAPITAL GAINS ESPECIALLY WHEN THE ASSESSIN G OFFICER HIMSELF OBSERVED THAT T HE APPELLANT HAD PURCHASED THE LAND IN ACRES, SOLD THE SAME IN PLOTS AFTER CARRYING ON THE DEVELOPMENT WORK. ITA NOS 541 TO 544 OF 2018 JANARDHAN REDDY KONTHAM HYDERABAD . PAGE 4 OF 11 4. THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN R EJ ECTING THE ENTIRE CLAIM OF CO ST OF DEVELOPMENT. 5. THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.44,00,000 BEING THE LOAN TAKEN FROM SRI KOMARAIAH IGNORING THE CLAIMS THAT THE SAID LOANS ARE TAKEN IN THE EARLIE R YEARS. 6. THE LEARN ED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.44,OO,OOO IGNORING THE EVIDENCES FILED ESPECIALLY WHEN THE APPELLANT EVEN ON THE DATE OF SEARCH STATED THAT THE SAID LOAN WAS TAKEN IN THE FINANCIAL YEAR 20 05 - 06. 7. THE LEARN ED FIRST APPELLANT FAILED TO APPRECIATE THE FACT THAT THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED IN REFUSING TO MAKE FURTHER ENQUIRIES IN THE REMAND PROCEEDINGS AND DID NOT ALLOW ANY OPPORTUNITY OF HEARING IN THE REMAND PROCEEDIN GS . 8. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE ABOVE GROUNDS AT THE TIME OF HEARING OF THE APPEAL . 6. A SSESSEE HAS RAISED 8 GROUNDS OF APPEAL OUT OF WHICH GROUNDS 1 AND 8 ARE GENERAL IN NATURE AND GROUNDS 2 TO 4 RELATES TO LONG TE RM CAPITAL GA I NS AND GROUNDS 5 TO 7 RELATING TO ADDITION OF RS.44.00 LAKHS BEING LOAN TAKEN FROM SHRI KOMARAIAH. 7. CO NSIDER ED THE RIVAL SUBMISSIONS AND MATERIAL ON RECORDS . WITH REGARD TO GROUNDS 2 TO 4, WE OBSERVED THAT THE ASSESSEE HAS SOLD TWO PLOTS OF LAND ADMEASURING 500 SQ. YARDS FOR A SALE CONSIDERATION OF RS.9.50 LAKHS. THERE IS NO DISPUTE TH AT THE ASSESSEE HAS PU RCHASED THE LAND ADMEASURING 25,400 S Q . Y ARDS AT SURVEY NO.88 AT BADANGPET VILLAGE ON 22. 08.2003 FOR A CONSIDERATION OF RS.6,56,500 , WH IC H WAS SUBSEQUENTLY PLOTTED. THE AO HAS ACCEPTED THE COST OF ACQUISITION AND DID NOT ACCEPT THE COST OF IMPROVEMENT CLAIMED BY THE ASSESSEE C ONSIDERING THE ITA NOS 541 TO 544 OF 2018 JANARDHAN REDDY KONTHAM HYDERABAD . PAGE 5 OF 11 FACT THAT THE ASSESSEE HAS NOT SUBMITTED ANY EVIDENCE. IT IS A FACT THAT THE LANDS WERE SUBSEQ UENTLY PLOTTED AND MADE IT SALEABLE AS PLOTS, THE ASSESSEE MUST HAV E INCURRED CERTAIN AM OUNTS AS DEVELOPING THE LAND FOR PLOTTING. THOUGH THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE, STILL THERE IS A POSSIBILITY THAT THE ASSESSEE MUST HAVE INCURRED CERTAIN EX PENDI TURE FOR IMPROVING THE LAND BEFORE MAKING IT SALEABLE. THE ASSESSEE HAS CLAIMED RS.4,55,000/ - AS COST ON DEVELOPMENT. SINCE IT IS A SUBJECTIVE MATTER AND ALSO IT IS A FACT THAT THE ASSESSEE HAS INCUR RED CERTAIN EXPENDITURE FOR DEVELOPMENT, THE ASSESSE E MAY BE GIVEN SOME RELIEF CONSIDERI NG THE O VERALL SITUATION . I N OUR VIEW , 20% OF THE COST OF IMPROVEMENT MAY BE DISALLOWED AS NOT SUBSTANTIATED. THEREFORE, THE GROUNDS RAISED BY THE ASSESSEE IN THIS REGARD ARE PARTLY ALLOWED. 8. WITH REGARD TO GROUND NO. 3, TR EATING THE TRANSACTION AS BUSINESS INCOME. SINCE THE ASSESSEE HIMSELF HAS TREATED THIS TRANSACTION AS INVESTMENT ON LAND AND CALCULATED THE CAPITAL GAINS, WE CANNOT TREAT THIS AS ADVENTURE. ACCORDINGLY WE DISMISS THE GROUNDS RAISED BY THE ASSESSEE . 9. WIT H REGA R D TO GROUNDS 5 TO 7, WE OBSERVE THAT IN THE REMAND REPORT, THE AO HAS ACCEPTED THAT THE ASSESSEE HAS TAKEN LOAN AND NOT PROVIDED BY THE ASSESSEE TO MR. KOMARAIAH AND RAMAN BHAI. WITH REGARD TO RAMAN BHAI, THE AO HIMSELF HAS ACCEPTED THAT IT I S A LOA N RECEIVED AND EVIDENCE WERE AVAILABLE ON RECORD. WITH R EGARD TO SHRI KOMARAIAH, IT IS A FACT THAT THE LOANS WERE TAKEN BUT NOT PROVIDED. SINCE THE LOAN IS TAKEN FROM SRI ITA NOS 541 TO 544 OF 2018 JANARDHAN REDDY KONTHAM HYDERABAD . PAGE 6 OF 11 KOMARAIAH AND ALSO IN THE YEAR 2005. SINCE MR. KOMARAIAH HAS EXPIRED, HIS WIFE HAS GIVEN A CONFIRMATION LETTER, THE SAME WAS SUBMITTED BEFORE THE TAX AUTHORITIES AS ADDITIONAL EVIDENCE. THE LEARNED CIT (A) REFUSED TO ACCEPT THE CONFIRMATION LETTER FROM THE WIFE OF MR. K OMARA IAH, WE DO NOT SEE ANY REASON TO ACCEPT THIS ADDITIONAL EVIDENC E SI NCE THE PERSON WHO HAS GIVEN A LOAN HAS EXPIRED AND HIS LEGAL HEIR HAS CONFIRMED THAT SUCH DECEASED PERSON HAS GIVEN LOAN TO THE ASSESSEE . THE IDENTITY OF THE LOAN CREDITOR IS PROVED BEYOND DOUBT THAT THE ASSESSEE HAS RECEIV ED LOAN. THEREFORE, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 10. IN THE RESULT, APPEAL NO.541/HYD/2018 IS PARTLY ALLOWED. ITA NO.542/HYD/2018 A.Y 2010 - 11 11. A SSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED FIRST APPELLATE AUTHORITY IS NOT CORR ECT EIT HER IN LAW OR ON FACTS AND IN BOTH. 2. THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.20, 5 O,961 IGNORING THE CLAIM THAT THE APPELLATE HAD ADMITTED INCOME UNDER THE HEAD LONG TERM CAPITAL GAINS AT RS.9,63,8S 4 WHICH IS 46% OF THE GROSS SALE PROCEEDS OF RS.20,90,OOO. 3. THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN NOT ACCEPTING THE CLAIMS THAT THE INCOME FROM SALE OF PLOTS SHOULD BE ASSESSED AS BUSINESS INCOME AND NOT AS CAPITAL GAINS ESPECIALLY WHEN TH E ASSESSING OFFICER HIMSELF OBSERVED T HAT THE APPELLANT HAD PURCHASED THE LAND IN ACRES AND SOLD THE SAME IN PLOTS AFTER CARRYING ON THE DEVELOPMENT WORK. 4. THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE AS SESSING OFFICER IN REJECTING THE ENTIRE CLAI M OF COST OF DEVELOPMENT. ITA NOS 541 TO 544 OF 2018 JANARDHAN REDDY KONTHAM HYDERABAD . PAGE 7 OF 11 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE ABOVE GROUNDS AT THE TIME OF HEARING OF THE APPEAL. 12. FOR THE A .Y 2010 - 11, THE ASSESSEE DISPUT ING ONLY LONG TERM C APITAL GAINS WHICH IS SIMILAR TO THE FACTS IN THE A.Y 2009 - 10. SINCE THE FACTS ARE SAME AND SIMILAR CONCLUSIONS A RE DRAWN IN PARA - 7 ABOVE IS APPLICABLE . HENCE THE GROUNDS RAIS ED BY THE ASSESSEE ARE PARTLY ALLOWED. I TA NO.543/HYD/2018 A.Y 2014 - 15 13 . A S SESSEE H AS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED FIRST APPELLATE AUTHORITY IS NOT CORRECT EITHER IN LAW OR ON FACTS AND IN BOTH. 2. THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.13, 11,681 IGNORING THE CLAIM THAT THE APPELLATE HAD AD MITTED INCOME FROM LONG TERM CAPITAL GAINS AT RS.8,71 ,182 WHICH IS 66% OF THE GROSS SALE PRO CEEDS OF RS.13,27,500. 3. THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN NOT ACCEPTING THE CLAIMS THAT THE INCOME FROM SALE OF PLOTS SHOULD BE ASSESSED AS BUSINESS INCOME AND NOT AS CAPITAL GAINS ESPECIALLY WHEN THE ASSESSING OFFICER HIMSELF O BSERVED THAT THE APPELLANT HAD PURCHASED THE LAND IN ACRES, SOLD THE SAME IN PLOTS AFTER CARRYING ON THE DEVELOPMENT WORK. 4. THE LEARNED FIRST APPELLATE AUTHORIT Y IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN REJECTING THE ENTI RE CLAIM OF COST OF DEVELOPMENT. 5. THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.1 ,50,00,000 IGNORING THE CLAIM THAT THE ACTUAL PAYMENT MADE IS RS.27,OO,OOO ONLY. ITA NOS 541 TO 544 OF 2018 JANARDHAN REDDY KONTHAM HYDERABAD . PAGE 8 OF 11 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE ABOVE GROUNDS AT THE TIME OF HEARING OF THE APPEAL . 14. GROUND NOS. 2 TO 4 RAISED BY THE ASSESSEE ARE SIMILAR TO THE GROUNDS RAISED IN THE A.Y 20 09 - 10 AND THE CONCLUSIONS DRAWN IN PARA - 7 IS ALSO APPLICABLE TO THIS A.Y ALSO. ACCORDI NGLY, GROUNDS 2 TO 4 ARE PARTLY ALLOWED . 15. WITH REGARD TO GROUND NO.5, BRIEF FACTS OF T HE CASE ARE THAT DUR ING THE SEA RCH , SOME DOCUMENTS RELATING TO ASSESSEE , WHICH ARE IN PAGE N O.106 TO 113 OF THE ANNEXURE A/KJR/R ES/0 5 , IS THE COPY OF THE SALE DEED BEARING DOCUMENT NO.12678/2013 DATED 18.12.2013 ENTERED BETWEEN SMT. MEGHAVATI LAXMI BAI AND 5 OTHERS AND THE ASSESSEE FOR SALE OF AGRICULTURAL DRY LAND ADMEASURING 3 ACRES IN SU RVE Y NO.601 SITUATED AT DUNDIGAL (V) QUTUBU LLAPUR (M), RR DISTT FOR A CONSIDERATION OF RS.1,50,00,000 WHEREIN THE VENDORS HAVE ACKNOWLEDGED TO HAVE RECEIVED THE E NTIRE CONSIDERATION IN CASH FROM THE ASSESSEE . THE AO O BSERVED THAT THE ASSESS EE HAS STATED TH AT THE ABOVE LAND WAS PURCHASED FOR RS.75.0 0 LAKHS ONLY FOR WHICH THE ASSESSEE PAID RS.25.00 LAKHS THROUGH BANKING CHANNELS TO SHRI KARAN SINGH SON - IN - LAW OF S MT. LAKSH MI MEGHAVATH, ONE OF THE VENDORS. HOWEVER, HE NOTICED THAT THE SAL E DEED DOES NOT MENTIO N ANY CONSIDERATION TO BE PAID BY CHEQUE RA THER, IT STATES THAT THE ENTIRE CONSIDERATION IS PAID BY CASH. THE SALE DEED IS A REGISTERED DOCUMENT, THEREFORE, HAS EVIDENTIA RY VALUE . SINCE THE ASSESSEE HAS NOT FURNISHED ANY SATIS FACTORY EVIDENCE BEFORE THE AO , HE MADE ADDITION OF RS.1,50,00,000. AGGRI EVED, THE ASSESSEE PRE FER RED APPEAL BEFORE ITA NOS 541 TO 544 OF 2018 JANARDHAN REDDY KONTHAM HYDERABAD . PAGE 9 OF 11 THE CIT (A) WHO DISMISSED THE GROUNDS RAISED BY THE ASSESSEE IN THIS REGARD. 16. WE HAVE GONE THROUGH THE RIVAL CONTENTIONS AND RECORD AND WE FIND THAT THE ASSESSEE HAS ENTERED SALE AG REEMENT TO PURCHA SE AGRICULTURAL LAND AS PER THE DEED EXECUTED. THE SALE DEED CLEARLY DENOTES THAT ASSESSEE HAS PAID RS.1.50 CRORES. WE ARE NOT IN A POSIT ION TO ACCEPT THE CONTENTION OF THE ASSESSEE . HOWEVER, ASSESSEE BROUGHT TO OUR NOTICE T HAT THE PAYMENTS WERE MADE THROUGH BANK AS WELL AS CASH. AO MADE THE ADDITION BECAUSE THE PAYMENTS WERE MADE ONLY BY CASH. WE ARE REMITTING THIS ISSUE BACK TO TH E AO TO VERIFY THE CLAIM OF THE ASSESSEE SINCE ASSESSEE HAS FILED COPY OF BANK STATEMENT AS EVI DENCE, AND I F IT IS FOUND THAT CERTAIN PAYMENTS WERE MADE BY CHEQUE ALSO, THE AO SHOULD ALLOW TO THAT EXTENT. THE BALANCE PAYMENTS MADE IN CASH MAY BE DISALLOWED . THE GROUND RAISED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO544/HY D/2 018 A.Y 2015 - 1 6 17. BRIEF FACTS OF THE CASE ARE THAT DURING THE SEARCH OPERATION CONDUCTED IN THE RESIDENCE OF THE ASSESSEE , CASH AMOUNT OF RS.2,90,000 WAS FOUND, OUT OF WHICH A N AMOUNT OF RS.1,19,000 WAS SEIZED. SINCE THE ASSESSEE COULD NOT OFFER ANY EX PLANATION WITH REGARD TO ITS SOURCE WITH RELEVANT DOCUMENTARY EVIDENCE, THE AO MADE THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE . AGGRIEVED, ASSESSEE PREFERRED APPE AL BEFORE THE CIT (A) STATING THAT RS.1,90,000 BELONGS TO THE WIFE OF THE ASSESSEE AND THE BALANCE OF RS.1.00 LAKHS BELONG ED TO THE ASSESSEE AND FURTHER CONTESTED THAT THE APPELLANT HAD A RETURNED INCOME OF ITA NOS 541 TO 544 OF 2018 JANARDHAN REDDY KONTHAM HYDERABAD . PAGE 10 OF 11 RS.16,88,300 FOR THE YEAR UNDER CO NSIDERATION. THEREFORE, IT IS REASONABLE TO ACCEPT TO HAVE A CASH BALANCE OF RS.1.00 LAKHS. THE LEARN ED CIT (A) ACCEP TED THE STAND OF THE ASSESSEE PARTLY ALLOWED THE GROUND RAISED BY THE ASSESSEE AND SUSTAINED THE ADDITION OF RS.1,90,000. AGGR IEVED WITH THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE O RDER OF THE LEARNED F IRST APPELLATE AUTHORITY IS NOT CORRECT EITHER IN LAW OR ON FACTS AND IN BOTH. 2. THE FIRST APPE LLATE AUTHO RITY IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.1,90,000 BEING PART OF THE CASH FOUND ON THE DATE OF SEARCH IGNORING THE CLAIM THAT THE SAID AMOUNT BELONGIN G TO THE APPELLANT WIFE ASSESSED SEPARATELY AND HAVING SUFFICIENT SOURCES . 18. A FTER CONSIDERING THE RIVAL SUBMISSIONS, WE OBSERVED THAT THE ASSESSEE CONTESTS THAT THE CASH FOUND DURING THE SEARCH TO THE EXTENT OF RS.1 ,90,000 BELONGS TO THE WIFE OF THE A SSESSEE WHO HAS INDEPENDENT SOURCE OF INCOME SEPARATELY . BEFORE US, THE LEARNED DR SUBMITTED THAT THE CASH FOUND DURING THE SEARCH IS BELONGS TO THE ASSESSEE AS WELL AS HIS WIFE BOTH ARE HA VING INDEPENDENT SOURCE OF INCO ME AND FILED THE RETURNS OF INCOME O VER THE YEARS. HOWEVER, NO DOCUMENTARY EVIDENCE WAS SU BMITTED BEFORE US, SINCE WIFE OF THE ASSESSEE IS HAVING INDEPENDENT SOUR CE OF INCOME, WE ARE INCLINED TO REMIT THIS ISSUE BACK TO THE FILE OF THE AO TO VERIFY THE RET URNS OF INCOME FILED BY THE WIFE OF THE ASSESSEE AND IN CASE IT IS FOUND THAT THE WIFE OF THE ASSESSEE HAS CONSIDERABLE INCOME AND DECLARED ANY EVIDENCE TO POSSESS THE CASH TO THE EXTENT OF RS.1,90,000 IN THE RETURNS OF INCOME BY SUPPORTING EVIDENCE FILED ALONG WITH THE RETURNED INCOME, THE SAME MAY BE ALLOWED A FTER AFFORDING AN OPPORTUNITY TO THE ITA NOS 541 TO 544 OF 2018 JANARDHAN REDDY KONTHAM HYDERABAD . PAGE 11 OF 11 ASSESSEE . ACCORDINGLY, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 19. TO SUM UP, APPEALS FILED B Y THE ASSESSEE ARE ALLOWED FOR STA TISTICAL PURPO SES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY, 2019 . SD/ - SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER ( ( S.RIFAUR RAHMAN ) ACCO UNTANT MEMBER HYDERABAD, DATED 30 TH JANUARY , 201 9. VINODAN/SPS COPY TO: 1 SHRI JANARDHAN REDDY KONTHAM C /O CH. PARTHASARATHY & CO. 1 - 1 - 298/2/B /3, 1 ST FLOOR, S OWBHAGYA AVENUE, ST. NO.1, ASHOKNAGAR, HYDERABAD 500020 2 ASSTT. CIT, CENTRAL CIRCLE 2(3) 6 TH FLOOR, AAYAKAR BHAV AN , BASHEERBAGH, HYD ERABAD 500029 3 CIT (A) - 12 HYDERABAD 4 PR. CIT CENTRAL, HYDERABA D 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER