Mr. Blanarasimha Reddy, Hyderabad V. ITO, Ward-11(4), Hyderabad

ITA 554/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59203 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 05-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B V PRASAD REDDY
• Keywords: Unexplained investment; Source of fund
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A. NO. 509/HYD/2011 A.Y. 2007-08 INCOME TAX OFFICER WARD-11(4), HYDERABAD VS. SHRI Y. SANJEEVA REDDY , HYDERABAD PAN: AAKPY3536F APPELLANT RESPONDENT I.T.A. NO. 510/HYD/2011 A.Y. 2007-08 INCOME TAX OFFICER WARD-11(4), HYDERABAD VS. SHRI G. SANJEEVA REDDY , HYDERABAD PAN: ACWPG5190R APPELLANT RESPONDENT I.T.A. NO. 511/HYD/2011 A.Y. 2007-08 INCOME TAX OFFICER WARD-11(4), HYDERABAD VS. SHRI M. BALANARSIMHA REDDY, HYDERABAD PAN: ADWPM7881L APPELLANT RESPONDENT I.T.A. NO. 554/HYD/2011 A.Y. 2007-08 SHRI M. BALANARSIMHA REDDY, HYDERABAD PAN: ADWPM7881L VS. INCOME TAX OFFICER WARD-11(4), HYDERABAD APPELLANT RESPONDENT REVENUE BY: SHRI B.V. PRASAD REDDY ASSESSEE BY: SHRI A. SRINIVAS DATE OF HEARING: 09.12.2011 DATE OF PRONOUNCEMENT: 25.01.2012 O R D E R PER BENCH: THE APPEALS BY THE DEPARTMENT AND ONE ASSESSEE ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF THE CIT (A )-VI, HYDERABAD WHEREIN CERTAIN ISSUES IN THESE APPEALS ARE COMMON IN NATURE I.T.A. NO. 509/HYD/2011 & ORS. SHRI Y. SANJEEVA REDDY & ORS. ========================= 2 THEY ARE CLUBBED TOGETHER, HEARD TOGETHER AND DISPO SED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE COMMON GROUNDS IN REVENUE APPEALS ARE AS FOLLOW S: 1. THE ORDER OF THE LD. CIT(A) IS ERRONEOUS BOTH ON LAW AND FACTS. 2. THE LD. CIT(A) HAS ERRED IN ALLOWING THE RELIEF INSTEAD OF APPRECIATING THE ADDITION MADE ON THE BA SIS OF FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO ON THE GROUND THAT THE PAYMENT MADE VIDE UNDATED RECEIPT F OR RS. 1.00 CRORE (PAGE NO. 45) IS PART OF 1 ST INSTALMENT PAYMENT, HENCE THE AGREEMENT DATE IS MENTIONED OTHERWISE HOW THE ASSESSEE CAN REFER THE LATER DATE I.E., AGREEMENT DATE. 3. THE LD. CIT(A) HAS ERRED IN ALLOWING THE RELIEF WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO THE TOTAL CONSIDERATION AMOUNT WHICH IS AROUND RS. 18.00 CRORES. 4. THE LD. CIT(A) HAS ERRED IN ALLOWING RELIEF WITHOUT ANY BASIS ON THE GROUND THAT THE PAYMENT OF RS. 1.00 CRORES VIDE UNDATED RECEIPT (PAGE 45) IS P RE- PAYMENT AND PART OF THE PAYMENT OF RS. 3.90 CRORES MADE AS ON AGREEMENT DATE. 5. THE LD. CIT(A) HAS ERRED IN ALLOWING THE RELIEF WITHOUT GOING INTO THE FACTS OF THE CASE, THAT THE PAYMENT MADE VIDE UNDATED RECEIPT FOR RS. 1.00 CROR E IS AFTER THE AGREEMENT DATE, HENCE ON THIS RECEIPT, THE AGREEMENT DATE IS REFERRED/MENTIONED, AND ALSO AGAI N ON 21.12.2006 THE ASSESSEE PAID ANOTHER RS. 1.00 CRORE AND THE PAYMENT OF RS. 2.00 CRORES WERE PART OF 1 ST INSTALMENT, WHICH IS CLEARLY EVIDENT FROM THE AGREEMENT OF SALE, AND THE AMOUNT IS ADDITIONAL PAYMENT APART FROM THE PAYMENT OF RS. 3.90 CRORE MADE ON AGREEMENT DATE AND ACCORDINGLY THE TOTAL AMOUNT PAID IS RS. 5.90 CRORES AS ADVANCE. 3. FOR BREVITY, WE WILL CONSIDER THE FACTS OF THE CASE IN I.T.A. NO. 509/HYD/2011. THE ASSESSEE SHRI Y. SANJEEVA RE DDY IS A PARTNER IN SHRI VISHNUPRIYA FINANCE. A SURVEY U/S. 133A OF THE INCOME-TAX ACT, 1961 WAS CONDUCTED IN THE CASE OF S HRI G. SANJEEVA REDDY PARTNER OF M/S. S.V. CONSTRUCTIONS O N 31.1.2008. I.T.A. NO. 509/HYD/2011 & ORS. SHRI Y. SANJEEVA REDDY & ORS. ========================= 3 DURING THE COURSE OF SURVEY A COPY OF AGREEMENT OF SALE DEED INDICATING THAT THE ASSESSEE SHRI BALANARSIMHA REDD Y ALONG WITH THREE OTHERS ENTERED INTO AN AGREEMENT FOR PURCHASE OF 56 ACRES 24/12 GUNTAS OF LAND AT BOGARAM VILLAGE, KEESARA MA NDAL FROM ONE SRI RAMA SUNDER REDDY. COPIES OF PAYMENTS RECE IPTS, DOCUMENTS NUMBERED AS PAGE NOS. 44, 45 AND 46 ENCLO SED TO THE AGREEMENT OF SALE DATED 18.11.2006 INDICATING PAYME NT OF RS. 5.90 CRORES WERE ALSO FOUND. AS PER THE SWORN STAT EMENT RECORDED FROM THE ASSESSEE IN RESPONSE TO SUMMONS ISSUED U/S . 131, THE ASSESSEE ADMITTED SUCH TRANSACTION AND STATED THAT THE TOTAL INVESTMENT IN THE LAND WAS ONLY RS. 4.9 CRORES AND ALSO STATED THAT HIS SHARE OF INVESTMENT IN THE LAND IS RS. 1,22,50, 000 BEING 25% SHARE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF INVESTMENT BY THE CREDITORS WHO WERE STATED TO HAVE RENDERED SUCH INVESTMENT TO THE ASSESSEE. ACCORDINGLY, THE ASSESSING OFFICER ISSUE D SUMMONS TO THE CREDITORS. ACCORDING TO THE ASSESSING OFFICER BASED UPON THE RECEIPT NOS. 44, 45 AND 46, FOUND DURING THE COURSE OF SURVEY, THE SALE CONSIDERATION WAS RS. 5.90 CRORES AS AGAINST R S. 4.90 CRORES ADMITTED BY THE ASSESSEE. IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT AN AGREEMENT OF SALE WAS PREPARED WITH 14 VENDORS AND AS ALL THE VENDORS WERE NOT AVAILABL E THEY HAVE PAID A TOKEN AMOUNT OF RS. 1 CRORE THE RECEIPT OF W HICH WAS ACKNOWLEDGED BY ONLY TWO VENDORS VIZ., P. RAM SUNDE R REDDY AND SMT. P. KARUNA. IT WAS STATED THAT, SUBSEQUENTLY, THEY PAID AN AMOUNT OF RS. 2.90 CRORES AFTER THE AGREEMENT OF SA LE WAS SIGNED BY ALL THE VENDORS MAKING THE TOTAL PAYMENT OF RS. 3.90 CRORES WHICH WAS DULY ACKNOWLEDGED IN THE AGREEMENT OF SAL E. THE ORIGINAL RECEIPT ISSUED BY THE ABOVE TWO VENDORS FO R RS. 1 CRORE WAS RETURNED TO THEM AS THEY HAD ACKNOWLEDGED THE R ECEIPT OF RS. 3.9 CRORES INCLUDING THE INITIAL AMOUNT OF RS. 1 CR ORE. IT WAS AVERRED BY THE ASSESSEE THAT THEY HAD PAID FURTHER AMOUNT OF RS. 1 I.T.A. NO. 509/HYD/2011 & ORS. SHRI Y. SANJEEVA REDDY & ORS. ========================= 4 CRORE ON 21.12.2006 THUS MAKING THE TOTAL PAYMENT O F RS. 4.90 CRORES OUT OF WHICH THE ASSESSEE'S SHARE WAS INDICA TED AT RS. 1,22,50,000 BEING 25%. 4. THE ASSESSING OFFICER OBSERVED THAT AS PER PAGE NO. 6 OF AGREEMENT DATED 18.11.2006 IT WAS CLEARLY MENTIONED THAT THE ASSESSEE PAID AN AMOUNT OF RS. 3.90 CRORES AND THAT SUBSEQUENTLY AS PART OF FIRST INSTALMENT OF RS. 2 CRORES, THEY H AVE PAID RS. 1 CRORE BY REFERRING THE AGREEMENT OF SALE DATED 18.1 1.2006 AND ALSO ON 21.12.2006 THEY PAID REMAINING INSTALMENT OF RS. 1 CRORE. ACCORDINGLY, THE ASSESSING OFFICER CONCLUDED THAT T HE SALE CONSIDERATION MADE TO THE LANDLORD WAS RS. 5.90 CRO RES AND NOT RS. 4.90 CRORES AS SUBMITTED BY THE ASSESSEE. ACCO RDINGLY THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE S HARE OF THIS ASSESSEE IS AT RS. 1,47,50,000 INSTEAD OF RS. 1,22, 50,000 AND BROUGHT THE DIFFERENCE OF RS. 25 LAKHS IN THE CASE OF G. SANJEEVA REDDY (ITA NO. 510/HYD/2011) AND RS. 25 LAKHS IN TH E CASE OF M. BALANARSIMHA REDDY (ITA NO. 511/HYD/2011). AGAINST THIS THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). 5. THE CIT (A) OBSERVED THAT THE TOTAL SALE CONSIDERAT ION IS RS. 4.9 CRORES AND NOT RS. 5.9 CRORES AND THE COPY OF P AYMENT RECEIPTS SIGNED BY SHRI P. RAM SUNDER REDDY AND MS. P. KARUN A FOR RS. 1 CRORE CANNOT BE RELIED UPON AND THE RECEIPT DATED 1 8.11.2006 OF RS. 3.9 CRORES INCLUDES RS. 1 CRORE AND ON THIS DAT E THE PARTIES RECEIVED ONLY RS. 2.9 CRORES. HOWEVER, THEY HAD SI GNED FOR RS. 3.9 CRORES. ACCORDINGLY, HE DELETED THE ADDITION ON TH IS ACCOUNT. AGAINST THIS, THE DEPARTMENT IS IN APPEAL BEFORE US . 6. WE HAVE HEARD BOTH THE PARTIES AND CONSIDERED THE M ATERIAL AVAILABLE ON RECORD. IN THIS CASE THERE IS A VALID RECEIPT ISSUED BY SHRI P RAM SUNDER REDDY AND MS. P. KARUNA FOR RS. 1 CRORE. THIS AMOUNT HAS BEEN RECEIVED FROM THE PURCHASER VIZ., S HRI Y. I.T.A. NO. 509/HYD/2011 & ORS. SHRI Y. SANJEEVA REDDY & ORS. ========================= 5 SANJEEVA REDDY, S/O. SHRI SATHI REDDY, M. BALANARSI MHA REDDY, S/O. LATE ADIVI REDDY, SHRI G. SANJEEVA REDDY, S/O. LATE G. MALLA REDDY, K. JAGANMOHAN REDDY, S/O. LATE ANJI REDDY. THIS RECEIPT BEARS NO DATE, HOWEVER, WAS WITNESSED BY TWO PERSON S AND SIGNED BY 2 VENDORS OF 14 VENDORS VIZ., 1. P. RAMA SUNDER REDDY AND 2. SMT. P. KARUNA. THE CONTENTION OF THE ASSESSEES' C OUNSEL IS THAT THIS RECEIPT OF RS. 1 CRORE HAS BEEN INCLUDED IN TH E SUBSEQUENT RECEIPT WHICH IS SIGNED BY 14 PARTIES ON 18 TH NOVEMBER, 2006 FOR RS. 3,90,00,000/-. AS SUCH THE TOTAL PAYMENT MADE B Y THE ASSESSEE TOWARDS PURCHASE OF 56 ACRES AND 24 GUNTAS OF LAND AT BOGARAM VILLAGE, KEESARA MANDAL IS AS FOLLOWS. 18-11-2006 RS. 3.90 CRO RES 21-12-2006 RS. 1.00 CRO RES ---- ---------------- TOTAL RS. 4.9 0 CRORES ----- ---------------- 7. ACCORDING TO THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE, THE RECEIPTS FOUND DURING THE COURSE OF S URVEY AS DOCUMENT AT PAGE-44 (UNDATED RECEIPT) AT RS. 1 CROR E IS ONLY SIGNED BY TWO PARTIES VIZ., SHRI P RAM SUNDER REDDY AND MS. P. KARUNA AND THIS IS NOT A VALID RECEIPT AND THIS PAY MENT OF RS. 1 CRORE HAS BEEN INCLUDED IN THE RECEIPT DATED 18-11- 2006 AT RS. 3.90 CRORES AND THE TOTAL CONSIDERATION IS TO BE CO NSIDERED AT RS. 4.90 CRORES. THIS CONTENTION OF THE ASSESSEES COUN SEL HOLDS NO MERIT. THE SALE AGREEMENT COPY DATED 18-11-2006 WHE RE IT IS MENTIONED THAT THE ASSESSEE HAS MADE AN AMOUNT OF R S. 3.90 CRORES AND THIS IS EVIDENCE BY AN INDEPENDENT RECEI PT DATED 18-11- 2006 MARKED AS DOCUMENT MARKED ON PAGE NO. 46 FOUND DURING THE COURSE OF SURVEY. FURTHER, RS. 1 CRORE HAS BEEN PAID WHICH IS EVIDENCED BY AN INDEPENDENT RECEIPT FOUND DURING TH E COURSE OF SURVEY MARKED AS PAGE NO. 45 WHEREIN THERE WAS NO M ENTION OF DATE OF PAYMENT BUT WITH REFERENCE TO THE ORIGINAL SALE DEED DATED 18-11-2006 AND FINALLY ANOTHER AMOUNT OF RS. 1 CROR E HAS BEEN PAID ON 21-12-2006 ADVANCED BY SEPARATE RECEIPT FOU ND DURING I.T.A. NO. 509/HYD/2011 & ORS. SHRI Y. SANJEEVA REDDY & ORS. ========================= 6 THE COURSE OF SURVEY WHICH WAS MARKED AS PAGE NO. 4 4. AS SEEN FROM THE RECEIPT DATED 18-11-2006 FOR RS. 3.90 CROR ES, THIS IS AN INDEPENDENT PAYMENT AND WHY THE ASSESSEE HAS TAKEN TWO PARTIES SIGNATURES ON SECOND RECEIPT OF RS. 1 CRORE NAMELY SHRI P RAM SUNDER REDDY AND MS. P. KARUNA WHEN ALL THE 14 PERS ONS TO THE AGREEMENT ARE AVAILABLE ON THE SAME DAY FOR THE REC EIPT OF MONEY PAID VIDE RECEIPT FOUND DURING THE COURSE OF SURVEY MARKED AS PAGE-46. BEING SO, THE CONTENTION OF THE ASSESSEE S COUNSEL THAT WHEN AGREEMENT WAS DRAFTED, ALL THE VENDORS ARE NOT AVAILABLE TO EXECUTE THE RECEIPT, THEREFORE, AN AMOUNT OF RS. 1 CRORE FORMING PART OF THE ABOVE SAID ADVANCE OF RS. 3.90 CRORES W AS PAID AND TEMPORARY RECEIPT WAS OBTAINED FROM THE VENDOR PRES ENTED AT THAT TIME AND THE BALANCE OF RS. 2.90 CRORES ONLY PAID, IS INCORRECT AND CANOT BE RELIED. HENCE, IN OUR OPINION, WE ARE NOT INCLINED TO HOLD THAT THE RECEIPT DATED 18-11-2006 FOR RS. 3.90 CROR ES IS INCLUSIVE OF RS. 1 CRORE AND THESE TWO RECEIPTS NAMELY, PAGE NO. 46 DATED 18-11-2006 FOR RS. 3.90 CRORES AND RECEIPT UNDATED PAGE NO. 45 FOR RS. 1 CRORE TO BE CONSIDERED AS INDEPENDENT AND SEPARATE RECEIPTS AND THUS TOTAL CONSIDERATION TO BE CONSIDE RED AS RS. 5.90 CRORES, CONSIDERING PAGE NOS. 46, 45 AND 44 AND NOT RS. 4.90 CRORES. ACCORDINGLY, THIS AMOUNT IS TO BE ASSESSED IN COLLECTIVELY ALL THE ASSESSEES CASES ACCORDING TO THEIR SHARE AN D THEREFORE THE DELETION OF ADDITION MADE BY THE CIT (A) IN ALL THE SE CASES IS NOT JUSTIFIED AND WE UPHOLD THE ORDER OF THE ASSESSING OFFICER AND REVERSE THE ORDERS OF THE CIT (A) FOR THE ASSESSMEN T YEAR UNDER CONSIDERATION. THEREFORE, THIS COMMON GROUND OF THE REVENUE IS ALLOWED. 8. IN THE RESULT, ALL THE APPEALS FILED BY THE REVENUE STAND ALLOWED. 9. NOW, LET US DEAL WITH ITA NO.554/HYD/2011 FILED BY THE ASSESSEE. THE GROUNDS RAISED BY THE ASSESSEE READ AS FOLLOWS. I.T.A. NO. 509/HYD/2011 & ORS. SHRI Y. SANJEEVA REDDY & ORS. ========================= 7 1. THE AO OUGHT NOT TO HAVE ADDED AND AMOUNT OF RS . 1,17,50,000/- AS UNEXPLAINED INVESTMENTS IN PURCHASE OF LANDS. 2. THE ASSESSING OFFICER OUGHT TO HAVE MENTIONED TH E SECTION UNDER WHICH THE ABOVE SAID ADDITION WAS MADE. 3. THE CIT (A) OUGHT NOT TO CONFIRMED THE ADDITION OF RS. 1,17,50,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENTS IN PURCHASE OF LANDS. 10. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE ENTER ED INTO AN AGREEMENT VIDE SALE AGREEMENT DATED 18-11-2006 ALON G WITH OTHERS VIZ., Y. SANJEEV REDDY, K. JAGANMOHAN REDDY AND G.SANJEEVA REDDY AND OTHER 14 PERSONS FOR PURCHASE OF 56 ACRES AND 24 GUNTAS AS NARRATED IN THE EARLIER PARAS IN W HICH THE ASSESSEES SHARE INVESTMENT IS RS. 1,22,50,000/- BE ING 25% OF THE TOTAL INVESTMENT AND THE SAME WAS EXPLAINED AS UND ER:- RS. OWN FUNDS 5,00,000 CONTRIBUTION FROM SHRI S. RAM REDDY (FATHER-IN-LAW) SURPANCH, GHATKESAR, R.R. DISTRICT 22,50,000 CONTRIBUTION FROM SRI K. RAGHUNATH REDDY, S/O S. RA M REDDY, R/O KUKATPALLY, HYD. 10,00,000 CONTRIBUTION FROM SRI D. SATYANARAYANA RAO, R/O SRIRAM NAGAR COLONY, OUTSIDE GOWLIPURA, HYDERABAD. 15,00,000 CONTRIBUTION FROM SRI A. NARASIMHA REDDY, R/O ANKSHAPUR VILLAGE, GHATKESAR MANDAL, RR DISTRICT. 25,00,000 CONTRIBUTION FROM SRI A. BUTCHI REDDY R/O ANKSHAPUR VILLAGE, GHATKESAR MANDAL, R.R. DISTRICT. 10,00,000 CONTRIBUTION FROM SRI P. BUCHI REDDY R/O MAKTHA ANANTHARAM VILLAGE, BIBINAGAR MANDAL, NALGONDA DISTRICT. 15,00,000 CONTRIBUTION FROM SRI P. PANDU S/O LATE NARASIMHA, ENKIRYAL VILLAGE, BIBINAGAR MANDAL, NALGONDA DISTRI CT. 20,00,000 --------------- TOTAL 1,22,50,000 =========== I.T.A. NO. 509/HYD/2011 & ORS. SHRI Y. SANJEEVA REDDY & ORS. ========================= 8 11. ON THE BASIS OF ABOVE STATEMENT, SUMMONS WERE ISSUE D TO ALL THE ABOVE PERSONS. IN RESPONSE TO THE SUMMONS, SRI RAM REDDY ATTENDED AND RECORDED A STATEMENT. DURING THE STATEMENT, SRI RAM REDDY STATED THAT HE HAS GIVEN AMOUNT OF RS .22,50,000/- TO SRI BALANARASIMHA REDDY AND ALSO FOR WHICH THE S OURCES SRI RAM REDDY HAS STATED THAT HE HAS SOLD LANDS IN HIS NAME AND ALSO IN HIS DAUGHTERS NAME AND THE AMOUNT RECEIVED ON THIS LANDS WERE GIVEN TO SRI BALANARASIMHA REDDY. HOWEVER, SRI RAM REDDY IS HAVING A BANK ACCOUNT, BUT HE IS STATING THAT HE HAS GIVEN AMOUNTS IN CASH TO SRI BALANARASIMHA REDDY. IN RES PONSE TO THE SUMMONS, SRI BUCHI REDDY ATTENDED AND RECORDED A ST ATEMENT AND DURING THE STATEMENT, SRI BUCHI REDDY STATED TH AT HE HAS GIVEN AMOUNT OF RS. 10,000/- TO M/S NARASIMHA REDDY AND ALSO FOR WHICH THE SOURCES SRI BUCHI REDDY HAS STATED T HAT HE HAS SOLD AGRICULTURAL LAND FOR RS. 12,07,500/- OUT OF WHICH HE HAS GIVEN RS. 10,00,000/- TO SRI BALANARASIMHA REDDY BYWAY OF CAS H. IN RESPONSE TO THE SUMMONS, SRI NARSIMHA REDDY ATTENDE D AND RECORDED A STATEMENT AND IT WAS STATED THAT HE HAS INVESTED AN AMOUNT OF RS. 25,00,000/- THROUGH SRI BALANARASIMHA REDDY AND ALSO FOR WHICH THE SOURCES SRI A. NARSIMHA REDDY IN FORMED THAT HE HAS SOLD LANDS FOR RS. 26,25,000/- OUT OF WHICH HE HAS GIVEN AN AMOUNT OF RS. 25,00,000 BY WAY OF CASH TO SRI BAL N ARSIMHA REDDY TO INVEST IN LAND AND IN RESPONSE TO THE SUMM ONS SRI PANDU ATTENDED AND RECORDED A STATEMENT WHEREIN IT WAS STATED THAT HE HAS ADVANCED AN AMOUNT OF RS. 20,00,000/- T O SRI BALANARASIMHA REDDY AND ALSO FOR WHICH THE SOURCES, SRI PANDU STATED THAT HIS FATHER SOLD LAND ABOUT 4 YEARS BAC K FOR A CONSIDERATION OF RS. 12 LAKHS AND OUT OF THIS AMOUN T, RS. 10 LAKHS WAS ADVANCED BY HIM TO SOME PEOPLE OF HIS VILLAGE A ND THE BALANCE OF RS. 2 LAKHS WAS KEPT BY HIM AT HOME. AFTER THE DEATH OF HIS FATHER, HE COLLECTED BACK THE AMOUNT OF RS. 10 LAKH S FROM THE DEBTORS. FURTHER, HE SOLD LAND OF 2 ACRES 23 GUNTA S IN DECEMBER, I.T.A. NO. 509/HYD/2011 & ORS. SHRI Y. SANJEEVA REDDY & ORS. ========================= 9 2006 FOR A CONSIDERATION OF ABOUT RS. 8 LAKHS. THU S, HE WAS HAVING 20 LAKHS WITH HIM AND HE ADVANCED THE SAME T O SRI BALANARASIMHA REDDY. IN RESPONSE TO THE SUMMONS, S RI D. SATYANARAYANA RAO ATTENDED AND RECORDED A STATEMENT WHEREIN IT WAS STATED THAT HE HAS GIVEN AN AMOUNT OF RS. 25 LA KHS TO SRI BALANARASIMHA REDDY AND ALSO FOR WHICH HE SOURCES I T WAS STATED THAT HE WORKED FOR HMT AND TOOK VOLUNTARY RETIREMEN T FROM THE COMPANY IN THE YEAR 1997 AND HE RECEIVED AN AMOUNT OF RS. 3 LAKHS AS VRS AMOUNT. HE HAS TAKEN AN AMOUNT OF RS. 3 LAKHS AS HAND LOAN FROM HIS FATHER AND RS. 10 LAKHS FROM HIS WIFE AND RS. 2 LAKHS FROM HIS PAST SAVINGS AND FROM AGRICULTURAL I NCOME. THE TOTAL AMOUNT OF RS. 15 LAKHS WAS GIVEN TO SRI BALAN ARASIMHA REDDY. THE ABOVE PERSONS IN THEIR STATEMENTS STAT ED THAT THEY HAVE GIVEN THE AMOUNTS IN CASH. EXCEPT THIS THEY H AVE NOT PRODUCED ANY DOCUMENTARY EVIDENCE IN SUPPORT OF THE IR CLAIM I.E., FOR TRANSFER OF MONEY THROUGH CHEQUE OR ANY PROMISS ORY NOTE FOR RECEIPT OF THE AMOUNTS. IT WAS STATED BY THE ABOV E PERSONS THAT THEY HAVE ADVANCED AMOUNTS TO SRI BALA NARASIMHA RE DDY FOR INVESTING THE AMOUNTS IN THE LAND, THERE SHOULD BE SOME WRITTEN AGREEMENT BETWEEN THEM MENTIONING ABOUT THEIR INVES TMENT DETAILS AND SHARE/PERCENTAGE OF INVESTMENT AND ALSO PROFIT RATIO OF EACH PERSON IN THESE INVESTMENTS. BUT, NONE OF THE ABOVE PERSONS HAVE STATED AT THE TIME OF RECORDING THE STATEMENT ABOUT THEIR AMOUNTS OF INVESTMENT OR PROFIT SHARE IN THE INVEST MENT. FROM THE ABOVE, IT CAN BE OBSERVED THAT THE AMOUNTS ADVA NCES GIVEN WERE NOT SHOWING ANY CLARITY ABOUT THE INVESTMENT A ND ALSO THEY FAILED TO PRODUCE ANY AGREEMENT COPY OR OTHER EVIDE NCES IN SUPPORT OF THEIR CLAIM ETC. THEREFORE, THE ASSESS ING OFFICER WAS OF THE OPINION THAT DEPENDING UPON THE AVAILABILITY OF FUNDS, THE ASSESSEE SEEMS TO HAVE CREATED PERSONS AFTER SURVEY . ACCORDINGLY, THE ASSESSING OFFICER DID NOT AGREE WITH THE ABOVE STATEMENTS OF THE PARTIES. HE MADE AN ADDITION OF RS. 1,17,50,000/- BEING I.T.A. NO. 509/HYD/2011 & ORS. SHRI Y. SANJEEVA REDDY & ORS. ========================= 10 UNEXPLAINED INVESTMENT. ON APPEAL, THE CIT (A) CON FIRMED THE ACTION OF THE ASSESSING OFFICER. 12. AGGRIEVED AGAINST THE ORDER OF THE CIT (A), THE ASS ESSEE HAS FILED SECOND APPEAL BEFORE THE TRIBUNAL. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LEAR NED AUTHORISED REPRESENTATIVE OF THE ASSESSEE RELIED ON THE THIRD MEMBER DECISION IN THE CASE OF AVNISH KUMAR SINGH V. ITO [124 TTJ 7 50 (TM) (AGRA)]. ON THE OTHER HAND, THE LEARNED DR RELIED O N THE FOLLOWING DECISIONS IN SUPPORT OF HIS CONTENTIONS:- I) SUMATI DAYAL VS. CIT (214 ITR 801) (SC) II) R.B. MITTAL VS. CIT (246 ITR 283) (AP) 14. IN THIS CASE, THE ASSESSEE WAS REQUIRED TO EXPLAIN THE IDENTITY OF THE PARTIES, GENUINENESS OF THE TRANSAC TION AND THE CAPACITY OF THE CREDITORS. WE HAVE GONE THROUGH THE PARTY-WISE DETAILS AND FOUND THAT THE GENUINENESS OF THE TRANS ACTION AND CAPACITY OF THE PARTIES ARE NOT SUBSTANTIATED WHICH CAN BE SEEN FROM INDIVIDUAL EXAMINATION OF EACH PARTY. I. SHRI S. RAM REDDY (FATHER-IN-LAW OF THE ASSES SEE) - THIS PERSON SAID TO HAVE GIVEN AN AMOUNT OF RS. 22.50 LA KHS TO THE ASSESSEE. IT WAS SUBMITTED THAT THE SOURCES OF SUCH INVESTMENT WERE OUT OF SALE PROCEEDS OF LANDS IN HI S NAME AND ALSO IN HIS DAUGHTERS NAME AND THAT THE AMOUNT RECEIVED ON SALE OF SUCH LANDS HAD BEEN GIVEN TO TH E ASSESSEE. THIS WAS A CASH TRANSACTION. NO EVIDENC E RELATING TO SALE OF LAND WAS PRODUCED BEFORE THE LOWER AUTHO RITIES. WITHOUT SUBSTANTIATING SOURCE OF FUNDS, THE ASSESSE E HAS BEEN CLAIMING THE TRANSACTION AS GENUINE. IN OUR O PINION, THE ASSESSEE HAS NOT MADE OUT THE CASE TO HOLD THAT THE I.T.A. NO. 509/HYD/2011 & ORS. SHRI Y. SANJEEVA REDDY & ORS. ========================= 11 TRANSACTION WAS GENUINE AND THE LENDER IS HAVING SO URCES TO ADVANCE THE SAME TO THE ASSESSEE. II. SHRI BUCHI REDDY- THIS CREDITOR SAID TO HAV E GIVEN RS. 10 LAKHS TO THE ASSESSEE. IN THIS CASE ALSO, IT WAS S UBMITTED THAT HE HAD SOLD A LAND FOR RS. 12,07,500/-,OUT OF WHICH SRI BUCHI REDDY HAS GIVEN AN AMOUNT OF RS. 10 LAKHS TO THE ASSESSEE. AS IN EARLIER CASE, NO DOCUMENTS RELATING TO SALE OF PROPERTY HAS BEEN FURNISHED TO PROVE THE ASSESSEES CASE. BEING SO, WE ARE INCLINED TO CONFIRM THE ORDER OF T HE LOWER AUTHORITIES ON THIS ISSUE THAT THE CREDIT-WORTHINES S OF THE PARTIES IS NOT SUBSTANTIATED. III. SHRI A. NARASIMHA REDDY- THIS PERSON SAID TO H AVE GIVEN AN AMOUNT OF RS. 25 LAKHS TO THE ASSESSEE BY SALE OF L AND. THIS TRANSACTION IS ALSO A CASH TRANSACTION. NO DETAILS WERE FURNISHED REGARDING SALE OF PROPERTIES. BEING SO, AS IN EARLIER CASE, WE DECLINE TO ENTERTAIN THE CLAIM OF THE ASSESSEE AS THE SOURCES ARE NOT EXPLAINED. IV. SHRI PANDU - THIS PERSON HAD GIVEN AN AMOUNT OF RS. 20 LAKHS TO THE ASSESSEE. THE ASSESSEE MADE A STORY T HAT FATHER OF SRI PANDU SOLD LANDS ABOUT 4 YEARS BACK F OR A CONSIDERATION OF RS. 12 LAKHS AND HIS FATHER GAVE L OANS TO SOME VILLAGERS AND KEPT RS. 2 LAKHS WITH HIM. ON TH E DEATH OF FATHER, SRI PANDU COLLECTED THE AMOUNTS FROM THE VILLAGERS TO WHOM HIS FATHER HAD GIVEN LOANS AND ALSO THE BAL ANCE THAT WAS KEPT BY HIS FATHER. IN ADDITION TO THIS, IT WAS EXPLAINED THAT THIS CREDITOR HAD SOLD LAND OF 2 ACR ES AND 23 GUNTAS IN DECEMBER, 2006 FOR CONSIDERATION OF RS. 8 LAKHS AND GAVE THE ABOVE AMOUNT OF RS. 20 LAKHS TO THE AS SESSEE. HOWEVER, THE ASSESSEE HAS NOT FURNISHED ANY DOCUMEN TARY EVIDENCE REGARDING THE SALE PROCEEDS OF FATHER OF S RI PANDU AND COLLECTION OF THE AMOUNTS FROM THE VILLAGERS AS MENTIONED ABOVE. SIMILARLY, THERE WAS NO PROOF WI TH REGARD I.T.A. NO. 509/HYD/2011 & ORS. SHRI Y. SANJEEVA REDDY & ORS. ========================= 12 TO SALE OF THE PROPERTY BY SHRI PANDU. IN THE ABSE NCE OF ANY DOCUMENTARY EVIDENCE/PROOF, WE ARE NOT INCLINED TO ENTERTAIN THE CLAIM OF THE ASSESSEE IN THIS REGARD. V. SRI D. SATYANARAYANA RAO - THIS PERSON SAID TO H AVE GIVEN AN AMOUNT OF RS. 15 LAKHS TO THE ASSESSEE. IT WAS E XPLAINED THAT SRI SATYANARAYANA RAO WAS AN EMPLOYEE OF HMT A ND TOOK VOLUNTARY RETIREMENT UNDER VRS DURING 1997 AND HE HAD RECEIVED AN AMOUNT OF RS. 3 LAKHS FROM HMT. FU RTHER, IT WAS EXPLAINED THAT THIS CREDITOR RECEIVED AN AMO UNT OF RS.3 LAKHS FROM HIS FATHER, RS. 10 LAKHS FROM HIS W IFE AND THE BALANCE OF RS. 12 LAKHS WAS STATED TO BE HIS PA ST SAVINGS AND AGRICULTURAL INCOME AND ACCORDINGLY HE PAID THE ABOVE MENTIONED AMOUNT OF RS. 15 LAKHS TO THE ASSESSEE. THIS CREDITOR RETIRED FROM HIS SERVICE IN THE YEAR 1997 AND AFTER LAPSE OF 9 YEARS, THIS CREDITOR EXPLAINED THE SOURC E THAT IS OUT OF HIS RETIREMENT BENEFIT WITHOUT ANY DOCUMENTA RY EVIDENCE. HENCE, THE EXPLANATION OFFERED BY THE AS SESSEE IS DEVOID OF ANY MERIT AND WE CANNOT UPHOLD THE SAME. IN VIEW OF THE ABOVE, THERE IS NO MERIT IN THE CONTENTION O F THE ASSESSEE. HENCE, WE REJECT THE GROUNDS RAISED BY TH E ASSESSEE. 15. IN THE RESULT, ALL THE APPEALS FILED BY THE REVENUE ARE ALLOWED AND THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 554/HYD/2011 IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 25-01-2012. SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER SD/- (H.S. SIDHU) JUDICIAL MEMBER HYDERABAD, DATED THE 25 TH JANUARY, 2012 I.T.A. NO. 509/HYD/2011 & ORS. SHRI Y. SANJEEVA REDDY & ORS. ========================= 13 COPY FORWARDED TO: 1. THE INCOME TAX OFFICER, WARD - 11(4), ROOM NO. 547, 'D' BLOCK, 5 TH FLOOR, I.T. TOWERS, A.C. GUARDS, HYDERABAD. 2. SHRI Y. SANJEEVA REDDY, F. NO. 102, NAGARJUNA NAGAR COLONY, TARNAKA, HYDERABAD. 3. SHRI G. SANJEEVA REDDY, H. NO. 1 - 7 - 197/1, KAMALANAGAR COLONY, ECIL POST, HYDERABAD. 4. SHRI M. BALANARSIMHA REDDY, H. NO. 2 - 12 - 484/9/A, NAGARJUNA NAGAR COLONY, TARNAKA, HYDERABAD. 5 . THE CIT(A) - VI, HYDERABAD. 6 . THE CIT - V, HYDERABAD. 7 . THE DR B BE NCH, ITAT, HYDERABAD JMR*/TPRAO