K.V.Nagalakshmi, Hyderabad V. DCIT, Hyderabad

ITA 69/HYD/2005

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53852 (ITAT-HYDERABAD)
• Duration Of Justice: 6 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-07-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 01-02-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B V PRASAD REDDY
• Assessee Lawyers: S RAMA RAO
• Keywords: Income from undisclosed sources; Revised return
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, A.M. & SMT. ASHA VIJAYARAGHAVAN, J.M. ITA NO.69/HYD/2005 ASSESSMENT YEAR 2001-02 SMT. K.V. NAGALAKSHMI ONLINE MEDIA SOLUTIONS LTD., HYDERABAD. (PAN ACFPK 6644 R) VS THE DCIT, CIRCLE 2(3), HYDERABAD APPELLANT RESPONDENT APPELLANT BY : SHRI S. RAMA RAO RESPONDENT BY : SHRI B.V. PRASAD REDDY DATE OF HEARING : 31.10.2011 DATE OF PRONOUNCEMENT : 27.12.2011 ORDER PER ASHA VIJAYARAGHAVAN, JM: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER PASSED BY THE CIT(A) III, HYDERABAD DATED 23 RD NOV. 2004 AND IT PERTAINS TO THE ASSESSMENT YEAR 2001-02. 2. BRIEF FACTS OF THE CASE ARE THAT THE APPEALS IN THE CASE OF SHRI K. SRINIVASA RAO AND MRS. K.V. NAGA LAXMI , BOTH DIREC TORS OF M/S. ONLINE MEDIA SOLUTIONS LTD, HYDERABAD ARE IDENTICAL AND HE NCE ARE DISPOSED OFF TOGETHER. THE FACTS WHICH LEAD TO THE ASSESSMENT O RDERS AROSE OUT OF A SURVEY PROCEEDINGS UNDER SEC 133A HELD AT THE PREMI SES OF M/S ONLINE MEDIA SOLUTIONS LIMITED. THE ISSUE RELATES TO ASSES SMENT OF RS 60 LAKHS EARNED BY THESE APPELLANTS IN THE FORM OF CASH PREM IUM COLLECTED FROM CERTAIN INVESTORS OUTSIDE THE BOOKS OF ACCOUNTS. T HE AMOUNT OF RS. 60 LAKHS HAS BEEN ADDED EQUALLY AT RS. 30 LAKHS EACH IN EACH OF THE ASSESSEES ITA NO.69 OF 2005 SMT. KV NAGALAKSHMI, ONLINE MEDIA SOLUTIONS, LTD. HANDS. SINCE THIS ISSUE IS COMMON IN BOTH THE CASES , THEY ARE DISPOSED OFF TOGETHER. 3. SURVEY OPERATION U/S 133A WAS CARRIED OUT IN TH E PREMISES OF M/S ONLINE MEDIA SOLUTIONS LTD., HYDERABAD, ON 3.11.200 0. DURING THE COURSE OF SURVEY PROCEEDINGS, A SWORN STATEMENT WAS RECORD ED FROM SRI. K. SRINIVASA RAO, DIRECTOR OF THE APPELLANT COMPANY. I N THE SWORN STATEMENT, HE STATED THAT AN AMOUNT OF RS 1 CRORE WAS COLLECTE D AS PREMIUM THROUGH BROKERS, FROM DIFFERENT PLACES, FOR ALLOTMENT OF SH ARES OUT OF THE PROMOTERS QUOTA AND THE PREMIUM SO COLLECTED WAS SHARED EQUAL LY BY THE TWO MAIN DIRECTORS, I.E., SRI. K. SRINIVASA RAO AND SMT. K.V . NAGA LAXMI. IT WAS ALSO MENTIONED THAT OUT OF THE ABOVE AMOUNT RS 40 LAKHS WAS RECEIVED BEFORE 31.3.2000 AND RS 60 LAKHS AFTER 31.3.2000 AND THIS AMOUNT WAS UTILISED FOR INVESTMENT IN THE PROMOTERS QUOTA FOR THE LOCK IN SHARES WORTH RS 2.10 CRORES AND THAT THE SHARES THOUGH STANDING IN DIFFE RENT NAMES WERE ACTUALLY MET BY THE ABOVE TWO PROMOTERS. THESE FACTS WERE C ONFIRMED SEPARATELY BY MRS. K.V. NAGA LAXMI IN HER SWORN STATEMENT DATED 1 4.11.2000. THE RELEVANT EXTRACTS OF SWORN STATEMENT RECORDED FROM SRI. K. SRINIVASA RAO DATED 3.11.2003, DURING THE COURSE OF SURVEY U/S 13 3A, IS REPRODUCED AS UNDER: QUESTION NO. 2 PLEASE GIVE DETAILS OF THE DATE OF INCORPORATION OF THE COMPANY AND DETAILS OF OTHER DIRECTORS AND THEIR DU TIES IN THE COMPANY? ANSWER: THE COMPANY WAS INCORPORATED IN FEB199 9 UNDER THE NAME M/S OM WEB P. LTD LATER THE NAME OF THE COMP ANY IS CHANGED TO M/S ONLINE MEDIA SOLUTIONS P. LTD. AND CONVERT ED INTO PUBLIC LIMITED COMPANY IN AUGUST 1999. THE OTHER DIRECTOR S ARE SMT. K.V.N. LAXMI, MR. RAJU L.K., MR. M. SUSHMA KUMAR, MR. M.V. B. SUBBA RAO AND MR. K.B. REDDY. I AM LOOKING AFTER THE OVERALL AFFA IRS OF THE COMPANY. NO SPECIFIC ASSIGNMENTS ARE GIVEN TO THE DIRECTORS. ITA NO.69 OF 2005 SMT. KV NAGALAKSHMI, ONLINE MEDIA SOLUTIONS, LTD. QUESTION NO.3 WHAT IS THE AUTHORISED PAID UP SHA RES CAPITAL OF THE COMPANY WITH BIFURCATION OF SHARE CAPITAL ON A BROA D WAY WITH REGARD TO SHARE CAPITAL PATTERN? ANSWER: THE AUTHORIZED SHARE CAPITAL OF THE CO MPANY IS RS 12 CRORES AND PAID UP SHARE CAPITAL IS AROUND RS 10.5 CRORES. OUT OF THIS CAPITAL RS 2.7 CRORES WAS COLLECTED FROM PUBLIC ISSUE IN TH E MONTH OF JUNE 2000. REMAINING BALANCE RS 7.8 CRORES WAS COLLECTED FROM THE PROMOTERS FRIENDS AND RELATIVES. OUT OF THE PROMOTE RS QUOTA RS 50 LAKHS WAS INVESTED BY ME AND MY FAMILY MEMBERS AND ANOTHE R RS 20 LAKHS WAS BROUGHT BY SMT. K.V.N. LAXMI AND HER FAMILY. M R.PRAKASH CHAND SHRIMAL AND HIS FAMILY MEMBERS INVESTED AROUND RS. 90 LAKHS. REMAINING BALANCE WAS COLLECTED FROM DIFFERENT PERS ONS ALL OVER INDIA. THE TOTAL NUMBER OF SHAREHOLDERS ARE AROUND 1600, I N THE RS 7.8 CRORES. IN THE PUBLIC ISSUE RS 2.7 CRORES WAS COLLECTED IN THE MONTH OF JUNE 2000 FROM AROUND 9000 SHAREHOLDER. THE ISSUE WAS SU BSCRIBED FOR 2 TIMES AND SHARES WAS ALLOTTED AND DISPATCHED TO THE RESPECTIVE SHAREHOLDER BY THE REGISTRARS OF THE COMPANY M/S VE NTURE CAPITAL & INVESTMENTS LTD., QUESTION NO.5: WHO HAS COLLECTED THE PROMOTERS QUO TA SHARE CAPITAL FROM DIFFERENT PERSONS ALL OVER INDIA. HAVE YOU COL LECTED ANY PREMIUM ON FIRM ALLOTMENT OF THE SHARES GIVEN TO THE PROMOT ERS? ANSWER: THE TOTAL PAID UP SHARE CAPITAL AS ON DAT E IS RS 10.5 CRORES. OUT OF THAT RS 2.7 CRORES WAS COLLECTED FROM PUBLIC ISSUE IN THE MONTH OF JUNE 2000. INITIALLY RS 1.27 CRORES WAS COLLECTED F ROM FRIENDS AND RELATIVES WHICH LIST IS AVAILABLE IN THE PROSPECTUS FOR PUBLIC ISSUE IN PAGE NO.5 RS 2.1 CRORES WAS COLLECTED JUST BEFORE THE PUBLIC ISSUE AS LOCK IN SHARES. IN THE REMAINING BALANCE RS 70 LAK HS WAS COLLECTED FROM THE FAMILY MEMBERS OF THE DIRECTORS. I.E. RS. 50 LAKHS FROM MR.K. SRINIVAS RAO AND FAMILY AND RS 20 LAKHS FROM SMT.K. V.N. LAXMI AND HER FAMILY. BALANCE OF AMOUNT OF RS 3.73 CRORES WAS COLLECTED FROM ITA NO.69 OF 2005 SMT. KV NAGALAKSHMI, ONLINE MEDIA SOLUTIONS, LTD. DIFFERENT PERSONS WHO HAS ACTED AS COMMISSION AGENT S AT DIFFERENT PLACES ALL OVER INDIA. THEY HAVE COLLECTED CERTAIN AMOUNT AS PREMIUM OVER AND ABOVE THE FACE VALUE OF THE SHARRE AT RS 1 0 . HOWEVER, AFTER DEDUCTING THEIR COMMISSION, THEY HAVE PAID AN AMOUN T OF RS 1 CRORE AS NET TO THE PROMOTER DIRECTORS, WHICH WORKS OUT TO RS 2.5 TO RS. 2.7 PER SHARE. I DO NOT KNOW THE AMOUNT COLLECTED BY THOSE PEOPLE FROM THE ACTUAL SHAREHOLDERS. BUT THE NET AMOUNT RECEIVED FR OM THEM IS AROUND RS 1 CRORE AND IS WQUALLY SHARED BY THE TWO PROMOTE R DIRECTORS I.E. MYSELF AND SMT. K.V.N. LAXMI. QUESTION NO.6: WHAT DID YOU DO WITH THE AMOUNTS REC EIVED SUCH PREMIUM RECEIVED ON THE SHARES? ANSWER: WE HAVE RECEIVED AN AMOUNT OF RS 40 LAKHS BEFORE MARCH 2000 AND IS INVESTED IN THE NAMES OF MY FAMILY MEMB ERS AND RELATIVES AND FRIENDS, THIS AMOUNT IS SHARED BY US I.E. MY S ELF AND SMT. K.V.N. LAXMI. ANOTHER RS. 60 LAKHS WAS RECEIVED AFTER MAR CH 2000 AND KEPT IN THE LOCK IN PERIOD SHARE EQUALLY I.E.. RS 30 LAK HS EACH. THESE SHARES ARE STANDING IN DIFFERENT NAMES THOUGH THE AMOUNT I S MET OUT OF THE PREMIUM RECEIVED AND IS INVESTED BY US. THE LIST OF THE SHAREHOLDERS WILL BE SUBMITTED TO YOU. THE AMOUNT RECEIVED AS P REMIUM IS OFFERED TO TAX IN BOTH OF OUR HANDS OF RS. 20 LAKHS EACH FOR T HE YEAR ENDING MARCH 2000 AND RS 30 LAKHS EACH IN THE CURRENT YEAR. QUESTION NO.10: DO YOU WANT TO SAY ANYTHING? ANSWER: AS I HAVE STATED EARLIER, THE AMOUNT RECEI VED TOWARDS PREMIUM ON SHARES OF RS ONE CRORE WHICH IS INVESTED IN DIFFERENT NAMES IN OUR COMPANY SHARE WILL BE TAKEN IN OUR HANDS AS UNACCOUNTED INCOME RECEIVED. THE SAME WILL BE OFFERED FOR TAXAT ION IN THE RETURN OF INCOME FILED BY US FOR THE YEAR ENDING MARCH 2000 A ND CURRENT YEAR WITH THE PAYMENT OF TAXES. AS I HAVE VOLUNTARILY AD MITTED THE AMOUNTS AND OFFERING THE SAME FOR TAXATION, I REQUEST THE DEPARTMENT TO TAKE A LENIENT VIEW WITH REGARD TO PENALTY AND PROSECUTION . ITA NO.69 OF 2005 SMT. KV NAGALAKSHMI, ONLINE MEDIA SOLUTIONS, LTD. 4. THE RELEVANT EXTRACTS OF SWORN STATEMENT OF MRS . K.V. NAGALAKSHMI RECORDED ON 14.11.2000, DURING THE COURSE OF SURVEY , ARE EXTRACTED BELOW: QUESTION NO.6: DURING THE COURSE OF SURVEY PROCEED INGS IN YOUR COMPANY ON 3.11.2000, SRI.K. SRINIVASA RAO, MD OF Y OUR COMPANY HAS OFFERED RS ONE CRORE AS UNDISCLOSED INCOME TOWARDS THE PREMIUM COLLECTED ON SHARES AND ALSO STATED THAT THE SAME W ILL BE SHARED EQUALLY YOURSELF AND SRI. K. SRINIVASA RAO. PLEASE OFFER YOUR COMMENTS? ANSWER: YES, I OFFER 50% OF THE PREMIUM AMOUNT OF RS ONE CRORE I.E. RS 50 LAKHS TOWARDS MY SHARE WHICH IN TURN WAS INVESTE D IN SHARES ON DIFFERENT NAMES AND THE SAME WILL BE TRANSFERRED TO MY NAME IN DUE COURSE. OUT OF RS 50 LAKHS RS 20 LAKHS IS EARNED BE FORE 31.3.2000 AND REMAINING RS 30 LAKHS HAS BEEN EARNED AFTER 31.3.20 00. QUESTION NO.7: DO YOU WANT TO SAY ANYTHING ELSE? ANSWER: AS I HAVE ALREADY FILED MY IT RETURN FOR A Y 2000-01, HOWEVER I WILL FILE THE REVISED RETURN SHOWING THE PREMIUM INCOME OF RS 20 LAKHS ALSO. FOR THE REMAINING RS 30 LAKHS INCOME, I WILL PAY ADVANCE TAX. 5. IN ACCORDANCE WITH THE ABOVE FINDINGS, BOTH THE ASSESSEES HAD REVISED THEIR RETURNS OF INCOME FOR AY 2000-01 OFFERING THE SUM OF RS 20,00,000/- EACH FOR TAX AND PAID THE TAXES THEREON. 6. AFTER HAVING PAID TAXES FOR ASSESSMENT YEAR 20 00-01 THE APPELLANT SUDDENLY TURNED BACK ON THEIR COMMITMENT AND FILED RETURNS FOR AY 2001-02 WHEREIN THE DISCLOSED AMOUNT OF RS 30,00,000/- EACH WAS NOT DISCLOSED IN THE RETURN OF INCOME. THE ASSESSING OFFICER TOOK T HE CASE FOR SCRUTINY ASSESSMENT AND REQUIRED THE APPELLANT TO GIVE REASO NS AS TO WHY THE AMOUNT DISCLOSED DURING THE COURSE OF SURVEY PROCEEDINGS W AS NOT INCLUDED IN THE RETURNS OF INCOME. BOTH THESE APPELLANTS TOOK IDENT ICAL GROUNDS BEFORE THE ASSESSING OFFICER WHICH ARE INCLUDED IN IDENTICALLY WORDED LETTERS FILED BEFORE THE ASSESSING OFFICER. THE IMPORTANT WORDS OF THE A PPELLANTS ARE AS UNDER: ITA NO.69 OF 2005 SMT. KV NAGALAKSHMI, ONLINE MEDIA SOLUTIONS, LTD. THE ASSESSEE ON A CAREFUL CONSIDERATION OF THE AFF AIRS IS OF THE VIEW THAT THE STATEMENT RECORDED ON THE DATE OF AFTER TH E SURVEY WAS NOT CORRECTLY AND PROPERLY RECORDED. THE ASSESSEE ALSO IS NOT IN A POSITION TO PAY SUCH HUGE TAX, FOR SUCH INCOME WAS NOT EARNE D BY HIM. THE FOLLOWING FACTS COULD CLEARLY SHOW THAT NO SUCH INC OME WAS EARNED BY THE ASSESSEE. 7. THE ASSESSING OFFICER DID NOT ACCEPT THE ABOVE CLAIMS OF THE APPELLANT AND BROUGHT THE SUM OF RS 30,00,000/- TO TAX IN THE HANDS OF EACH OF THE APPELLANTS. 8. THE ASSESSEES PREFERRED APPEALS BEFORE THE CIT( A). DURING THE COURSE OF APPEAL HEARING, IT WAS ARGUED THAT DURING THE CO URSE OF SURVEY NO EVIDENCE RELATING TO UNACCOUNTED INCOME WAS UNEARTH ED AND THE DISCLOSURE WAS TAKEN BY FORCE AND DECEIT. ACCORDINGLY THERE IS NO REASON AS TO WHY HIS CLIENTS SHOULD BE SUBJECTED TO HEAVY TAXATION WHEN NO SUCH INCOME WAS EARNED BY THEM. IN SUPPORT, INSTRUCTION F. NO. 286 /2/2003-IT DATED 10.3.2003 WAS REFERRED TO, WHEREIN OFFICERS OF THE DEPARTMENT WERE DIRECTED NOT TO TAKE FORCED CONFESSIONS OF UNACCOUNTED INCOM E. THE ASSESSEE ALSO RELIED ON THE CASE OF CIT VS SATYANARAYANA AGARWAL 255 ITR 69, TO EMPHASIZE THAT A MERE STATEMENT OF DECLARATION OF I NCOME IN ABSENCE OF ANY CORROBORATIVE EVIDENCE IS NOT VALID UNDER THE LAW. IN THIS REGARD THE ASSESSING OFFICER HELD AS UNDER: 9. DURING THE COURSE OF SURVEY EVIDENCE WAS UNEART HED TO PROVE THAT THE APPELLANTS HAD EARNED INCOME IN THE FORM OF UNACCOU NTED PREMIUM. THIS FACT WAS DISCLOSED BY THE APPELLANT ONLY IN THEIR S TATEMENTS, WHICH HAVE ALREADY BEEN REFERRED IN THIS ORDER. IN THESE STAT EMENTS, APPELLANTS HAVE EXPLAINED THE ENTIRE NODES OPERANDI BY WHICH CASH P REMIUM WAS COLLECTED AND SHARED BY THESE TWO DIRECTORS OF THE APPELLANT COMPANY. THESE TWO DIRECTORS HAVE ALSO EXPLAINED AS TO HOW THIS CASH P REMIUM COLLECTED WAS INVESTED BY THEM IN THE NAMES OF THEIR IMMEDIATE RE LATIVES. IT IS THESE INVESTMENTS, WHICH REPRESENTED THE CASH PREMIUM COL LECTED. THE ASSESSING ITA NO.69 OF 2005 SMT. KV NAGALAKSHMI, ONLINE MEDIA SOLUTIONS, LTD. OFFICER HAS BROUGHT OUT THE DETAILS OF THESE INVEST MENTS IN PARA NO.5.3 OF BOTH THE ASSESSMENT ORDERS SEPARATELY. S.NO. NAME OF THE SHARE HOLDER N O. OF SHARES VALUE 01 K. SRINIVASA RAO 3,57,000 RS 35,70,000 02 K. VANISRI 1,20,000 RS.12,00 ,000 03 ARUNA RANI MARAM 3,000 RS. 30,000 TOTAL 4,80,000 RS. 48,00,0 00 10. THE ABOVE FACTUAL FINDINGS ARE GIVEN IN THE AS SESSMENT ORDERS AND THEY HAVE NOT BEEN CONTESTED BY THE APPELLANT AT AN Y STAGE. THEREFORE, THE FINDINGS OF THE FACT GIVEN BY THE ASSESSING OFFICER THAT EVIDENCE RELATING TO INVESTMENT OF CASH PREMIUM COLLECTED IN THE FORM OF SUBSCRIPTION OF SHARES IN THE NAME OF NEAR RELATIVES OF THESE TWO DIRECTOR S AS A FINDING OF FACT DURING THE COURSE OF SURVEY PROCEEDINGS. IN FACT, I T IS ONLY THIS INVESTMENT, WHICH WAS DISCLOSED BY THESE TWO APPELLANT DIRECTOR S IN THEIR STATEMENTS RECORDED IN THE SURVEY PROCEEDINGS. THEREFORE, IT I S FIRMLY ESTABLISHED THAT NOT ONLY EVIDENCE WAS UNEARTHED, THE SAME WAS ACCEP TED BY THE APPELLANT IN THE COURSE OF SURVEY PROCEEDINGS ONLY.THE ASSESSING OFFICER HAS ALSO HIGHLIGHTED THE FACT THAT THESE APPELLANTS HAD REVI SED THEIR RETURNS OF INCOME FOR A.Y. 2000-01 BY AN IDENTICAL SUM OF RS 2 0,00,000/- EACH AND TAXES WERE PAID. 11. ON THE ABOVE BASIS, THE ASSESSING OFFICER HAS ARGUED THAT THE APPELLANT HAD ALWAYS ACCEPTED THEIR DISCLOSURE OF U NACCOUNTED INCOME AS TRUE AND GENUINE AND HAD FOLLOWED IT UP BY FILING R ETURNS OF INCOME FOR AY 2000-01 ALONG WITH PAYMENT OF TAXES ALSO. THIS IS SECOND PROOF AND AN AMPLE PROOF OF THE FACT THAT THESE APPELLANTS HAD C OLLECTED PREMIUM IN CASH OUTSIDE THE BOOKS OF ACCOUNTS. ITA NO.69 OF 2005 SMT. KV NAGALAKSHMI, ONLINE MEDIA SOLUTIONS, LTD. 12. APART FROM THE ABOVE FACTUAL MATRIX, THE ASSES SING OFFICER ALSO RELIED UPON THE CASE OF DR. S.C. GUPTA VS CIT 248 ITR 782( ALL) WHEREIN IT WAS HELD AS FOLLOWS: ADMISSION BY THE ASSESSEE DURING SURVEY UNDER SEC 133A IS AN EXTREMELY IMPORTANCE PIECE OF EVIDENCE THOUGH IT IS NOT CONCLUSIVE. THEREFORE A STATEMENT MADE VOLUNTARILY BY THE ASSES SEE COULD FORM THE BASIS OF ASSESSMENT THE MERE FACT THAT THE ASSESSEE RETRACTED THE STATEMENT MADE AT THE TIME OF SURVEY COULD NOT MADE THE STATEMENT UNACCEPTABLE, THE BURDEN LIES ON THE ASSESSEE TO ES TABLISH THAT THE ADMISSION MADE IN THE STATEMENT AT THE TIME OF SURV EY WAS WRONG AND, IN FACT, THERE WAS NO ADDITIONAL INCOME. 13. THE CIT(A) DISMISSED THE ASSESSEES APPEAL OBS ERVING AS UNDER: THE DISCLOSURE, DURING THE COURSE OF SURVEY PROCEE DINGS, WAS NOT TAKEN OUT OF FORCE OR DECEIT AS IS CLAIMED BY THE APPELLA NTS. IN CASE, IT WAS TAKEN BY FORCE OR DECEIT, THERE WAS NO NECESSITY FO R THE APPELLANTS TO NOT ONLY REVISE THEIR EARLIER RETURNS OF INCOME BUT ALS O PAY THE TAXES ON THE REVISED INCOMES. ACCORDINGLY, THEIR RELIANCE ON TH E CBDTS DIRECTION NOT TAKING FORCED CONFESSIONS FROM THE APPELLANTS IS OF NO RELEVANCE BECAUSE IN THIS CASE, THERE WAS NO CONFESSION AND CERTAINLY NOT A CONFESSION TAKEN BY DECEIT. EVIDENCE REPRESENTING THE UNACCOUNTED INCOME IN THE FORM OF INVESTMENT IN THE NAME OF KITH AND KIN OF THE APPEL LANTS WAS UNEARTHED DURING THE COURSE OF SURVEY. THIS IS NOT CONTESTED BY THE APPELLANTS AT ANY STAGE OF THE APPEAL. THEREFORE, THE DISCLOSURE OF UNACCOUNTED INCOME DURING THE COURSE OF SURVEY IS SUPPORTED BY EVIDENCE. WHEN THESE ARE THE TRUE FACTS, APPELLANTS RELIANCE ON T HE CASE OF CIT VS SATYANARAYAN AGARWALLA (2002) 255 ITR 69 IS OF NO S UPPORT BECAUSE POSITIVE MATERIAL INCRIMINATING THE CLAIMS OF THE A PPELLANTS WAS UNEARTHED DURING THE COURSE OF SURVEY ONLY. THE ADMISSION OF UNACCOUNTED INCOME WAS MADE BY BOT H THE DIRECTORS ON TWO SEPARATE DATES VIZ 03.11.2000 AND 14.11.2000 WHICH FURTHER SHOW THAT THE DISCLOSURES WERE MADE BY THESE APPEL LANTS VOLUNTARILY AND ARE CERTAINLY NOT UNDER PRESSURE. ITA NO.69 OF 2005 SMT. KV NAGALAKSHMI, ONLINE MEDIA SOLUTIONS, LTD. THE VERY FACT THAT THEY HAVE VOLUNTARILY PAID TAXES ON THE AMOUNT OF DISCLOSURE FOR AY 2000-01 SHOWN THAT THEIR DISCLOSU RE FOR AY 2001-02 IS ALSO CORRECT BECAUSE THE TOTAL DISCLOSURE IN BOTH T HE A. YRS BY BOTH THE PERSONS AMOUNTS TO RS 1 CRORE AND THIS IS ALSO THE TOTAL VALUE OF THE INVESTMENTS FOUND IN THE NAME OF THEIR KITH AND KIN DURING THE COURSE OF SURVEY. THIS FACT IS NOT CONTESTED BY THE APPELLAN TS. CONSIDERING ALL THE ABOVE FACTS, THE APPEALS ARE DI SMISSED IN BOTH THE CASES. 14. AGGRIEVED THE ASSESSEE IS ON APPEAL. DURING TH E SURVEY CARRIED OUT IN THE PREMISES OF ONLINE MEDIA P LTD ON 13.11.2000, K .SRINIVA RAO, DIRECTOR OF THE ASSESSEE HAD IN HIS SWORN STATEMENT STATED T HAT THE AMOUNT OF RS.1 CRORE WAS COLLECTED AS PREMIUM OF BROKERAGE ON DIFF ERENT PLACES FOR ALLOTMENT OF SHARES OUT OF THE PROMOTERS QUOTA AND THE PREMIUM COLLECTED WAS SHARES EQUALLY BETWEEN TWO DIRECTOR OF K.SRINIV ASA RAO AND SMT K.V.NAGALAKSHMI. SMT K.V.NAGALAKSHMI IN THE SWORN S TATEMENT RECORDED 14.11.2000 AS ALSO ACCEPTED AND CONCEDED THAT SHE W AS OFFERING 50% OF THE PREMIUM OF RS. 1 CRORE. SHE HAS ALSO STATED THAT OU T OF THIS RS.50 LAKHS, RS.20 LAKHS WAS EARNED BEFORE 31.03.2000 AND REMAIN ING WAS EARNED AFTER 31.03.2000. BOTH OF THEM THEY ALSO FILED THE RETUR N OF INCOME FOR THE ASSESSMENT YEAR 2000-01, OFFERING A SUM OF RS.20 LA KHS. HOWEVER, FOR THE ASSESSMENT YEAR UNDER APPEAL VIZ., 2001-02, THEY HA S NOT OFFERED THE BALANCE AMOUNT OF RS.30LAKHS EACH AS ACCEPTED BY TH EM IN THEIR STATEMENTS. THE ASSESSING OFFICER AND THE CIT(A) HA S CONFIRMED THIS ADDITION THE ONLY CONTENTION OF THE ASSESSEE IS THAT MERE ST ATEMENT GIVEN IN THE COURSE OF SURVEY CANNOT BE TAKEN AS A SOLE EVIDENCE FOR THE PURPOSE OF MAKING ADDITION. THE ASSESSEES IN THEIR LETTER OF R EBUTTAL HAVE STATED THAT ON A CAREFUL CONSIDERATION OF THE AFFAIRS THEY ARE OF THE VIEW THAT THE STATEMENT RECORDED ON THE DATE OF AFTER THE SURVEY WAS NOT CO RRECTLY AND PROPERLY RECORDED. THE ASSESSEES HAVE ALSO REFERRED TO INSTR UCTION NOF. NO. 286/2/2003-IT DATED 10.3.2003 WHEREIN THE OFFICER O F THE DEPARTMENT WERE DIRECTED NOT TO TAKE FORCED CONFESSIONS OF UNACCOUN TED INCOME AND HAVE CONTENDED THAT SWORN STATEMENT GIVEN IN THE COURSE OF SURVEY IN THE ABSENCE ITA NO.69 OF 2005 SMT. KV NAGALAKSHMI, ONLINE MEDIA SOLUTIONS, LTD. OF ANY CORROBORATIVE EVIDENCE CANNOT BE TAKEN AS TH E SOLE BASIS OF DETERMINING THE UNDISCLOSED INCOME AND IS NOT VALID UNDER THE LAW. 15. THE ASSESSING OFFICER AND THE CIT(A) HAVE REFE RRED TO THE EXPLANATION BY THE TWO DIRECTOR AS TO HOW THIS CASH PREMIUM COL LECTED WAS INVESTED BY THEM IN THE NAMES OF THEIR IMMEDIATE RELATIVES. THE DETAILS OF SUCH INVESTMENTS, WERE ALSO BEEN GIVEN IN THE ASSESSMENT AS WELL AS CIT(A)S ORDER. 16. FROM THE SURROUNDING CIRCUMSTANCES AND THE FA CT THAT THE ASSESSEE HAS OFFERED PART OF THE INCOME FOR THE ASSESSMENT Y EAR 2000-01 WE ARE INCLINED TO AGREE TO THE CONCLUSION OF THE ASSESSIN G OFFICER AND THE CIT(A) THAT THE ASSESSEES HAVE IN FACT RECEIVED PREMIUM OF RS.1 CRORE COLLECTED IN THE COURSE OF ISSUE OF SHARE OF M/S. ONLINE MEDIA S OLUTIONS P LTD. BOTH THE DIRECTORS HAVE ACCEPTED THE RECEIPT AS ALSO CLARIFI ED THE YEARS IN WHICH THEY WERE RECEIVED. THEY HAVE ALSO SPELT OUT THE MANNER OF THE INVESTMENT OF THE AMOUNT THROUGH THEIR RELATIVES. BUT UNFORTUNATELY T HE ASSESSING OFFICER HAS NOT CARRIED OUT ANY FURTHER INVESTIGATION, NO DOUBT BECAUSE TWO DIRECTORS HAD CATEGORICALLY ACCEPTED THE RECEIPT OF THE MONEY AND HAD AGREED TO OFFER IT AS INCOME. THE ASSESSEE BY THIS RUSE OF ACCEPTI NG, IN THEIR SWORN STATEMENT, TO OFFER CERTAIN AMOUNT OF INCOME, HAS P RECLUDED THE INCOMETAX DEPARTMENT FROM CARRYING OUT INVESTIGATION THAT THE Y WOULD HAVE HAVE CARRIED IN THE NORMAL CIRCUMSTANCES. THEREAFTER THE ASSESSEE, AT THE TIME OF ASSESSMENT TAKE THE PLEA THAT ADDITION HAD BEEN MAD E ONLY ON THE BASIS OF SURVEY AND TRY TO WRIGGLE OUT OF THEIR OWN STATEMEN T. THIS KIND OF PRACISE SHOULD NOT BE ENCOURAGED. 17. HOWEVER, WE FIND THAT THE ADDITION HAS BEEN MA DE ONLY ON THE BASIS OF THE STATEMENT GIVEN BY THE TWO DIRECTOR VIZ., SHRI K.SRINIVASA RAO AND K.V. NAGA LAKSHMI AND THE CBDT HAVE CLARIFIED THAT ADDIT ION SHOULD NOT BE MADE PURELY ON THE BASIS OF STATEMENTS GIVEN IN THE COURSE OF SURVEY. IN THIS CASE, THE ASSESSEES HAVE OFFERED ONE PROTION O F THE AGREED AMOUNT FOR THE AY 2001-02 AND THE ASSESSEES HAVE ALSO POINTED OUT AS TO HOW THEY ITA NO.69 OF 2005 SMT. KV NAGALAKSHMI, ONLINE MEDIA SOLUTIONS, LTD. HAVE INVESTED THE UNDISCLOSED INCOME. IN VIEW OF TH E CLARIFICATIONS GIVEN BY THE CBDT, WE FEEL THAT THIS MATTER SHOULD BE REMITT ED BACK TO THE AO FOR INVESTIGATING THIS ISSUE FURTHER DECIDE THE ISSUE I N ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEES. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS T REATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT 27.12 .2011 SD/- SD/- (CHANDRA POOJARI) ( (ASHA VIJAYA RAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 27 TH DECEMBER, 2011 COPY FORWARDED TO: 1. SHRI V. SRIDHAR & CO., A/78, GEETA APARTMENTS, SANT OSH NAGAR COLONY, MEHDIPATNAM, HYDERABAD. 2. THE DCIT CIRCLE 2(3), HYDERABAD 3. THE CIT(A)- III, HYDERABAD 4. THE CIT, HYDERABAD 5. THE DR, ITAT, HYDERABAD NP/