Asst. Commissioner of Income Tax, Circle -1, Kurnool V. Legend Developers & Constructions, Kurnool

ITA 743/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2467 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-B
• Assessment Year: 2013-2014
• Appeal Filed On: 24-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Rejection of books of accounts; Search and seizure; Set aside
• Section: 201; 73; 13; 131; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 743/HYD/18 & 752/HYD/18 2013-14 & 2014-15 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, KURNOOL M/S.LEGEND DEVELOPERS & CONSTRUCTIONS, KURNOOL [PAN: AADFL3895M] 747/HYD/18 2014-15 SRI AGNUR JANAKIRAM, KURNOOL [PAN: AJFPA0218G] 748/HYD/18 2014-15 SMT.AGNUR NIRMALA, KURNOOL [PAN: AHQPA1941D] 749/HYD/18 2014-15 SRI AGNUR JAYARAMUDU (INDIVIDUAL), KURNOOL [PAN: ADHPA2282N] 750/HYD/18 2014-15 SRI AGNUR JAYARAMUDU (HUF), KURNOOL [PAN: AAJHA8820M] FOR REVENUE : SHRI NARAYANA MURTHY NAIK SHRI ROHIT MUJUMDAR, DRS FOR ASSESSEE : SHRI S.RAMA RAO, AR DATE OF HEARING : 13-05-2021 DATE OF PRONOUNCEMENT : 25-06-2021 O R D E R PER S.S.GODARA, J.M. : THESE SIX REVENUES APPEALS FOR AYS. 2013-14 AND 20 14- 15; ASSESSEE/SERIATIM-WISE ARISE AGAINST THE CIT(A)-KU RNOOLS SEPARATE ORDERS DATED 15-02-2018 (FIRST ASSESSEE) AND 21-02- ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 2 -: 2018 IN SECOND TO FIFTH TAXPAYERS, PASSED IN FILE NOS .017, 10410, 10409 10411, 10412 & 10413/CIT(A)/KNL/2016-1 7; APPEAL-WISE, INVOLVING PROCEEDINGS U/S143(3) OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT] ; RESPECTIVELY. HEARD DEPARTMENT AS WELL AS THE ASSESSEES THROUGH THEIR LEARNED REPRESENTATIVES. CASE FILES PERUSED. 2. WE NOTICE AT THE OUTSET THAT ALL THESE REVENUES SIX APPEALS SEEKS TO REVIVE ASSESSING OFFICERS ACTION INTER ALIA ADDING ADDITIONAL INCOME AMOUNT(S) OF RS.2 CRORES I N ITA NO.743/HYD/2018 ON SUBSTANTIVE BASIS IN ITA NO.743/HYD/2018, RS.1.5 CRORES EACH ON PROTECTIVE BAS IS IN ITA NOS.747 TO 750/HYD/2018 AND RS.7 CRORES IN ITA NO.752/HYD/2018 ON SUBSTANTIVE BASIS; RESPECTIVELY MADE IN THE CORRESPONDING ASSESSMENT ORDERS AND DELETED IN THE CIT(A)S DETAILED DISCUSSION IN LEAD CASE ITA NO.743/HYD/2018, READING AS UNDER: 2. THE APPELLANT HAS FILED THE RETURN OF INCOME ON 16.03.2015 BY DISCLOSING AN INCOME OF RS. NIL FOR THE ASST. YEAR 2013-14. THE ASSESSMENT WAS COMPLETED BY DETERMINING THE TOTAL I NCOME OF RS.2,00,00,000/- UNDER THE FOLLOWING HEADS OF INCOM E: I) INCOME RETURNED NIL II) ADD: INCOME ADMITTED 2,00,00,000 TOTAL: 2,00,00,000 3. AGAINST THE ABOVE ORDER THE APPELLANT HAS FILED AN APPEAL BY RAISING THE FOLLOWING GROUNDS: GROUNDS OF APPEAL 1.THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFI CER IS AGAINST THE FACTS OF THE CASE. 2.THE ASSESSING OFFICER ERRED IN MAKING AN ADDITION OF RS.2,00,00,000/- MERELY ON THE BASIS OF THE STATEME NT GIVEN BY THE ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 3 -: MANAGING PARTNER OF THE FIRM DURING SURVEY PROCEEDI NGS WITHOUT ANY EVIDENCES. 3.THE APPELLANT SUBMITS THAT, THE FIRM HAS SOLD ONL Y 1 HOUSE PLOT FOR RS.1,96,000/- IN THE F.Y. 2012-2013 RELEVANT TO THE ASSESSMENT YEAR 2013-2014. HENCE, THERE WAS NO ANY BASIS FOR ADDITI ON OF RS.2,00, 00,000/- TO THE RETURN OF THE INCOME OF TH E FIRM FOR THE ASST. YEAR 2013-2014, HENCE IS TO BE SET ASIDE. 4.THE ASSESSING OFFICER ERRED IN NOT FOLLOWING THE INSTRUCTIONS OF THE CBDT CIRCULARS NO.5 F.NO. 286/98/2013-IT [LNV-II] D T. 18.12.2014 AND F.NO.286/2/2003 IT [INV]. THE CBDT CIRCULARS AR E VERY CLEAR IN THE CASES RELATING TO DISCLOSURE OF UNDISCLOSED INC OME BY THE ASSESSES IN REFERENCE TO SURVEY PROCEEDINGS AND REC ORDING OF STATEMENTS. HENCE, THE ADDITION MADE IS NOT LEGALLY CORRECT. 5.THE APPELLANT IS SUBMITTING THE CBDT CIRCULARS IN TOTO RELATING TO THE RELEVANT SUBJECT, WHICH CLEARLY STATES THAT ADM ISSION OF UNDISCLOSED INCOME UNDER COERCION / UNDUE INFLUENCE IS NOT BINDING ON THE ASSESSEE WITHOUT PROPER EVIDENCES / MATERIAL GATHERED DURING SURVEY PROCEEDINGS. C.B.D.T CIRCULARS ADMISSIONS OF UNDISCLOSED INCOME UNDER COERCION/PRE SSURE DURING SEARCH/SURVEY F.NO. 286/98/2013-IT (INV.LI) GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES DATED- 18TH DECEMBER, 2014 TO 1. ALL PRINCIPAL CHIEF COMMISSIONERS OF INCOME TAX 2. ALL CHIEF COMMISSIONERS OF INCOME TAX 3. ALL DIRECTORS GENERAL OF INCOME TAX (INV.) 4. DIRECTOR GENERAL OF INCOME TAX (I & CI), NEW DEL HI SUBJECT: ADMISSIONS OF UNDISCLOSED INCOME UNDER COE RCION/PRESSURE DURING SEARCH/SURVEY - REG. REF: 1) CBDT LETTER F.NO. 286/57/2002-IT(LNV.LI) DT . 03-07-2002 2) CBDT LETTER F.NO. 286/2/2003-IT(LNV.11) D T. 10-03-2003 3) CBDT LETTER F.NO. 286/98/2013-IT(LNV.11) D T. 09-01-2014 SIR/MADAM, INSTANCES/COMPLAINTS OF UNDUE INFLUENCE/COERCION HA VE COME TO NOTICE OF THE CBDT THAT SOME ASSESSEES WERE COERCED TO ADMIT ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 4 -: UNDISCLOSED INCOME DURING SEARCHES/SURVEYS CONDUCTE D BY THE DEPARTMENT. IT IS ALSO SEEN THAT MANY SUCH ADMISSIO NS ARE RETRACTED IN THE SUBSEQUENT PROCEEDINGS SINCE THE SAME ARE NO T BACKED BY CREDIBLE EVIDENCE. SUCH ACTIONS DEFEAT THE VERY PUR POSE OF SEARCH/SURVEY OPERATIONS AS THEY FAIL TO BRING THE UNDISCLOSED INCOME TO TAX IN A SUSTAINABLE MANNER LEAVE ALONE L EVY OF PENALTY OR LAUNCHING OF PROSECUTION. FURTHER, SUCH ACTIONS SHO W THE DEPARTMENT AS A WHOLE AND OFFICERS CONCERNED IN POOR LIGHT. 2. I AM FURTHER DIRECTED TO INVITE YOUR ATTENTION T O THE INSTRUCTIONS / GUIDELINES ISSUED BY CBDT FROM TIME TO TIME, AS REF ERRED ABOVE, THROUGH WHICH THE BOARD HAS EMPHASIZED UPON THE NEE D TO FOCUS ON GATHERING EVIDENCES DURING SEARCH/SURVEY AND TO STR ICTLY AVOID OBTAINING ADMISSION OF UNDISCLOSED INCOME UNDER COE RCION/UNDUE INFLUENCE. 3. IN VIEW OF THE ABOVE, WHILE REITERATING THE AFOR ESAID GUIDELINES OF THE BOARD, I AM DIRECTED TO CONVEY THAT ANY INSTANC E OF UNDUE INFLUENCE/COERCION IN THE RECORDING OF THE STATEMEN T DURING SEARCH/SURVEY/OTHER PROCEEDING UNDER THE I.T.ACT,19 61 AND/OR RECORDING A DISCLOSURE OF UNDISCLOSED INCOME UNDER UNDUE PRESSURE/ COERCION SHALL BE VIEWED BY THE BOARD ADVERSELY. 4. THESE GUIDELINES MAY BE BROUGHT TO THE NOTICE OF ALL CONCERNED IN YOUR REGION FOR STRICT COMPLIANCE. 5. I HAVE BEEN FURTHER DIRECTED TO REQUEST YOU TO C LOSELY OBSERVE/OVERSEE THE ACTIONS OF THE OFFICERS FUNCTIO NING UNDER YOU IN THIS REGARD. 6. THIS ISSUES WITH APPROVAL OF THE CHAIRPERSON, CB DT (K. RAVI RAMCHANDRAN) DIRECTOR (INV.)-II, CBDT CONFESSION OF ADDITIONAL INCOME DURING THE COURSE O F SEARCH & SEIZURE AND SURVEY OPERATION. F.NO.286/2/2003-IT(INV) GOVERNMENT OF INDIA MINISTRY OF FINANCE & COMPANY AFFAIRS DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES ROOM NO. 254/NORTH BLOCK, NEW DELHI, THE 10TH MARCH 2003. TO ALL CHIEF COMMISSIONERS OF INCOME TAX, (CADRE CONTR A) & ALL DIRECTIONS GENERAL OF INCOME TAX INV. ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 5 -: SIR, SUB: CONFESSION OF ADDITIONAL INCOME DURING THE COU RSE OF SEARCH AND SEIZURE AND SURVEY OPERATION - REG. INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHER E ASSESSEES HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE U NDISCLOSED INCOME DURING THE COURSE OF THE SEARCH & SEIZURE AND SURVE Y OPERATIONS. SUCH CONFESSIONS, IF NOT BASED UPON CREDIBLE EVIDEN CE, ARE LATER RETRACTED BY THE CONCERNED ASSESSEES WHILE FILING R ETURNS OF INCOME. IN THESE CIRCUMSTANCES, ON CONFESSIONS DURING THE C OURSE OF SEARCH & SEIZURE AND SURVEY OPERATIONS DO NOT SERVE ANY USEF UL PURPOSE. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND C ONCENTRATION ON COLLECTION OF EVIDENCE OF INCOME WHICH LEADS TO INF ORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCL OSED BEFORE THE INCOME TAX DEPARTMENTS. SIMILARLY, WHILE RECORDING STATEMENT DURING THE COURSE OF SEARCH IT SEIZURES AND SURVEY OPERATI ONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSION AS TO THE UNDIS CLOSED INCOME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSEL Y. FURTHER, IN RESPECT OF PENDING ASSESSMENT PROCEEDIN GS ALSO, ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCE'S I MATERIALS GATHERED DURING THE COURSE OF SEARCH I SURVEY OPERA TIONS OR THEREAFTER WHILE FRAMING THE RELEVANT ASSESSMENT ORDERS. YOURS FAITHFULLY, SD/- [S.R. MAHAPATRA] UNDER SECRETARY (INV.LI) 10. THE APPELLANT IS FURNISHING VARIOUS CASE LAWS I N SUPPORT OF THE SUBMISSION THAT THE ADDITION OF INCOME MADE MERELY ON THE BASIS OF STATEMENT RECORDED IN THE COURSE OF SURVEY WOULD NO T AUTOMATICALLY BIND ON THE ASSESSEE. EVEN THE LETTER GIVEN FOR ADM ISSION OF INCOME CANNOT BE TREATED AS A STATEMENT RECORDED ON OATH D URING SURVEY PROCEEDINGS. HENCE, THE ADDITION MADE ON THE BASIS OF THE STATEMENT RECORDED DURING SURVEY PROCEEDINGS CANNOT BE TAKEN AS A BASIS FOR MAKING ADDITION OF INCOME WITHOUT ANY CORROBORATIVE EVIDENCE FOUND IN SURVEY PROCEEDINGS. 4. FURTHER, THE APPELLANT HAS 'FILED WRITTEN SUBMIS SIONS IN PAPER BOOK AND MENTIONED THE FOLLOWING ISSUES RAISED BY THE AS SESSING OFFICER IN THE ASSESSMENT ORDER AND FILING THE REPLIES TO THE ISSUES RAISED BY THE ASSESSING OFFICER. BRIEF NOTE ON FACTS OF THE CASE THE APPELLANT FIRM M/S.LEGEND DEVELOPERS & CONSTRUC TIONS, KURNOOL IS A PARTNERSHIP FIRM FORMED ON 09.04.2008 TO DO BU SINESS IN REAL ESTATE. ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 6 -: THE APPELLANT IS CONSTITUTED WITH THE FOLLOWING PAR TNERS NAMELY 1] SRI. A.JAYARAMUDU 2] SMT. B. MANGALA 3] SRI. K.E. JAYACH ANDRUDU 4] SRI. K.S. NARAYANA GUPTA AND 6] SRI. R. ARAVIND KUMAR JA IN. THE PARTNERS HAVE EXECUTED A PARTNERSHIP DEED ON 09.04. 2008. THE PARTNERSHIP FIRM HAS PURCHASED 12.24 ACRES OF A RICULTURE LAND AT TADIPATRI, ANANTAPUR DIST. WITH AN INTENTIO N TO DEVELOP THE SAID LAND AND DIVIDED INTO RESIDENTIAL HOUSE PLOTS AND SALE OF THE SAME. THE APPELLANT HAS GOT APPROVAL OF 144 RESIDEN TIAL HOUSE PLOTS FROM THE MUNICIPALITY OF TADIPATRI. THE APPELLANT FIRM HAS SOLD APPROVED HOUSE PLOTS SI NCE FROM THE YEAR 2008-2009 AND HAS FILED INCOME TAX RETURNS REGULARLY BY DISCLOSING THE INCOME FROM THE PARTNERSHIP BUSINESS FOR THE ASST. YEAR 2009-2010, 2010-2011, 2012-2013 AND 2013-2014. THE APPELLANT FIRM HAS SOLD THE HOUSE PLOTS AND RECEIVED SALE CON SIDERATION AS MENTIONED BELOW. SL. NO. F.Y. ASSTT. YEAR NUMBER OF PLOTS SOLD AREA OF PLOTS SOLD SALE AMOUNT REMARKS 1. 2008 - 2009 2009 - 2010 6 69.550 28,51,390.00 - 2. 2009 - 2010 2010 - 2011 30 197.404 23,18,610.00 - 3. 2010 - 2011 2011 - 2012 34 216.45 70,02,125.00 - 4. 2011 - 2012 2012 - 2013 - - - 5. 2012 - 2013 2013 - 2014 1 5.37 1,96,000,00 -- TOTAL: 71 THE APPELLANT FIRM HAS DISCLOSED THE SALES AS PER T HE SALE DEEDS EXECUTED TO THE BUYERS IN THE RELEVANT FINANC IAL YEARS. THE INCOME TAX DEPARTMENT HAS CONDUCTED SURVEY OPER ATIONS ON 02.12.2013 AT THE REGISTERED OFFICE OF THE FIRM AT KURNOOL AND ALSO AT FIRMS OFFICE, TADIPATRI. THE INCOME TAX OFFICER HAS RECORDED PRELIMINARY STA TEMENT ON 02.12.2013 FROM THE MANAGING PARTNER OF THE FIRM SR I. A. JAYARAMUDU. THE INCOME TAX OFFICER HAS ISSUED SUMMONS TO THE MA NAGING PARTNER OF THE FIRM SRI. A. JAYARAMUDU U/S. 131 OF THE IT A CT REQUIRING HIM TO ATTEND THE INCOME TAX OFFICE ON 03.12.2013 IMMEDIAT ELY FOLLOWING THE DAY OF SURVEY OPERATIONS. THE INCOME TAX OFFICER HAS RECORDED SWORN STATEMENT ON 03.12.2013 AND THE RECORDING OF SWORN STATEMENT WENT UP TO LAT E NIGHT AND STATEMENT WAS TAKEN IN VERY ODD HOURS. THE MANAGING PARTNER SRI. A. JAYARAMUDU HAS STATED THAT THE PARTNERSHIP FIRM M/S. LEGEND DEVELOPERS AND CONSTRU CTIONS WAS COMMENCED WITH EFFECT FROM 09.04.2008. THE PARTNERS OF THE FIRM HAVE EXECUTED A PARTNERSHIP DEED ON 09.04.2008. [CO PY OF THE ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 7 -: PARTNERSHIP DEED IS FILED] AND THE NATURE OF THE BU SINESS OF THE FIRM IS TO DEAL IN REAL ESTATE BUSINESS. THE APPELLANT FIRM HAS PURCHASED 12.24 ACRES OF LAN D IN THE YEAR 2007-2008 AT TADIPATRI, ANANTAPUR DIST. AND DEVELOP ED THE LAND AND GOT APPROVAL 144 OF RESIDENTIAL PLOTS FROM THE MUNI CIPALITY OF TADIPATRI. THE APPELLANT FIRM HAS SOLD 71 PLOTS DUR ING THE FINANCIAL YEARS FROM 2008-2009 TO 2012-2013 AND THE UNSOLD PL OTS AS ON 31.03.2013 WAS 73 ONLY. THUS THE APPELLANT FIRM HAS SOLD ONLY 50% OF THE PLOTS TILL 31.03.2013. THE APPELLANT FIRM 'HAS SOLD, ONLY 1 PLOT FOR RS. 1 ,96,000/-' IN THE FINANCIAL YEAR 2012-2013 AND EARNED INCOME OF RS. 9 ,307/- ONLY IN THE RELEVANT ASSESSMENT YEAR 2013-2014. THE APPELLA NT HAS ALSO RECEIVED DEVELOPMENT CHARGES OF RS. 1,07,400/- FROM THE PARTY. THE APPELLANT FIRM HAS STILL CLOSING STOCK OF 73 PLOTS [50% OF THE PLOTS APPROVED AS UNSOLD AS ON 31.03.2013]. THE APPELLANT S PARTNER WAS IN CONFUSING STATE OF MIND AND UNDER STRESS AND THE STATEMENT WAS GIVEN UNDER PRESSURE AND IN ODD HOURS. THE APPELLANT FIRM SUBMITS THAT THERE WAS NO ANY EV IDENCE OR INCRIMINATING MATERIAL FOUND IN SURVEY OPERATIONS A T THE FIRMS OFFICE PREMISES. EVEN THE ASSESSING OFFICER HAS NOT MENTIO NED CONCEALMENT OF INCOME OR SUPPRESSION OF RECEIPTS (OR) INFLATION OF EXPENDITURE (OR) UNDISCLOSED INVESTMENTS ETC BY THE FIRM DURING THE FINANCIAL YEAR 2012-2013 RELEVANT TO THE ASSESSMENT YEAR 2013-2014 . IT IS A FACT THAT THE APPELLANT FIRM HAS MADE SALE OF ONLY ONE PLOT AND RECEIVED SALE VALUE OF RS.1,96,000/- IN TH E FINANCIAL YEAR 2012-2013 AND NO OTHER INCOME EARNED IN THE SAID AS SESSMENT YEAR 2013-2014. HENCE THE ADDITION OF RS.2,00,00,000/- I N THE HANDS OF THE APPELLANT IS NOT JUSTIFIED AND NOT VALID IN LAW . THE APPELLANT FIRM IS REFERRING LATEST CBOT CIRCULA RS NO. F.NO. 286/98/2013-IT(INV./I) DT. 18.12.2014 PARTICULARLY CLARIFYING 'ON THE ADMISSION OF UNDISCLOSED INCOME UNDER COERC ION / PRESSURE DURING SEARCH / SURVEY. THE PARA NO.3 OF THE CIRCUL AR CLEARLY STATED THAT 'IN VIEW OF THE ABOVE, WHILE REITERATING THE AFORESAID GUIDELINES OF THE BOARD, I AM DIRECTED TO CONVEY THAT ANY INST ANCE OF UNDUE INFLUENCE / COERCION IN THE RECORDING OF THE STATEM ENT DURING SEARCH / SURVEY / OTHER PROCEEDING UNDER THE IT ACT, 1961 AN D / OR RECORDING A DISCLOSURE OF UNDISCLOSED INCOME UNDER UNDUE PRESSU RE / COERCION SHALL BE VIEWED BY THE BOARD ADVERSELY'. THE APPELLANT FIRM IS ALSO REFERRING ANOTHER CBDT C IRCULAR NO. F.NO. 286/2/2003-IT(INV) THAT, DATED 10.03.2003. 'SIMILARLY, WHILE RECORDING STATEMENT DURING THE CO URSE OF SEARCH IT SEIZURES AND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 8 -: TO OBTAIN CONFESSION AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSELY. FURTHER, IN RESPECT OF PENDING ASSESSMENT PROCEEDIN GS ALSO ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCES / MATERIALS GATHERED DURING THE COURSE OF SEARCH / SURVEY OPERA TIONS OR THERE AFTER WHILE FRAMING THE RELEVANT ASSESSMENT ORDERS' . THE APPELLANT SUBMITS THAT, IT HAS FILED THE COPIES OF THE ABOVE CBDT CIRCULARS DURING THE SCRUTINY ASSESSMENT PROCE EDINGS. BUT THE ASSESSING OFFICER HAS IGNORED THE CBDT CIRCULARS AN D NOT FOLLOWED THE INSTRUCTIONS OF THE CBDT FOR ASSESSMENT OF SURV EY CASES WHILE PASSING THE ASSESSMENT ORDER FOR THE ASST.YEAR 2013 -2014. THE APPELLANT FIRM HAS ALSO REFERRED VARIOUS CASE L AWS IN SUPPORT OF ITS SUBMISSION THAT THE CONFESSION STATE MENT RECORDED IN THE COURSE OF SURVEY WHICH WAS SUBSEQUENTLY RETRACT ED ADDITION CANNOT BE MADE ONLY ON THE BASIS OF THE STATEMENT. THE APPELLANT REFERRED ANOTHER CASE LAW IN SUPPORT OF ITS SUBMISSION THAT THE LETTER GIVEN FOR OFFERING OF ADDITIONAL INCOME CANNOT BE TREATED AS A STATEMENT RECORDED ON OATH BY THE AUTH ORIZED OFFICER DURING THE COURSE OF SURVEY OPERATIONS. HENCE THE ADDITION MADE OF RS. 2,00,00,000/- IN THE HANDS OF THE APPELLANT FIRM IS NOT JUSTIFIED AND AGAINST THE CBDT CIRCULARS AND VARIOUS CASE LAWS REFERRED. HENCE ADDITION MADE OF RS. 2,00,00,000/- IS TO BE SET ASIDE. BEING AGGRIEVED WITH HEAVY ADDITION OF RS. 2,00,00, 000/- TO THE RETURN OF INCOME AND RAISED HIGH DEMAND TAX OF RS. 95,17,200/- IN THE ASST.YEAR 2013-2014, THE APPELLANT FIRM PREF ERRED AN APPEAL AGAINST THE ASSESSMENT ORDER AND PRAYS FOR JUSTICE. 5. THE APPELLANT HAS FILED THE ISSUES RAISED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND HIS REPLIES TO THE ISSUES RAISED IN WRITTEN SUBMISSIONS AND PAPER BOOK. THE FOLLOWING ISSUES ARE RAISED BY THE ASSESSING OF FICER IN THE ASSESSMENT ORDER AND SUBMISSION OF THE APPELLANT TO THE ISSUES. ISSUES RAISED BY THE ASSESSING OFFICER AND SUBMISSI ON OF THE APPELLANT ISSUE NO.1 OFFERING OF ADDITIONAL INCOME AT THE TIME OF SURVEY OPERATIONS: ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 9 -: THE ASSESSING OFFICER HAS MENTIONED AT PAGE NO.4, P ARA NO.2.1 OF THE ASSESSMENT ORDER THAT, SRI, A. JAYARAMUDU CAME UP WITH A DECISION AND FIL ED A LETTER WITH A PLAN TO SPLIT UP THE ADDITIONAL INCOME OF RS.10,00, 00,000/- WHICH HE DECLARED IN HIS STATEMENT RECORDED UNDER SECTION 13 1 OF THE IT ACT ON 03.12.2013'. HE HAS AGREED TO OFFER THE INCOME OF T WO CRORES IN THE HANDS OF THE APPELLANT FIRM FOR THE ASST.YEAR 2013- 2014. SUBMISSION OF THE APPELLANT THE APPELLANT FIRM SUBMIT THAT, THE PARTNER SRI. A. JAYARAMUDU HAS AGREED TO DISCLOSE RS. 2,00,00,000/- INCOME FOR THE ASST. YEAR 2013-2014 IN THE HANDS OF THE APPELLANT FIRM UNDER CONFUSING STATE OF MIND. IN FACT, THE APPELLANT FIRM HAS SOLD 1 PLOT ONLY FO R RS. 1,96,000/- IN THE F. Y. 2012-2013. THE APPELLANT FI RM HAS EARNED A NET PROFIT OF RS. 9,307/- FOR THE FINANCIAL YEAR 20 12-2013 RELEVANT TO THE ASST. YEAR 2013-2014. THE ASSESSING OFFICER 'HAS NOT FOUND ANY EVIDENCE A ND INCRIMINATING MATERIAL AND UNDISCLOSED INCOME AND S UPPRESSION OF SALES AND INFLATION OF EXPENDITURE TO THE EXTENT OF RS. 2,00,00,000/- IN THE F. Y. 2012-2013 RELEVANT TO THE ASST. YEAR 2 013-2014 AND HENCE THERE WAS NO ANY BASIS FOR MAKING HIGH VALUE OF RS. 2,00,00,000/- TO THE RETURN OF INCOME ONLY ON THE B ASIS OF THE STATEMENT GIVEN BY THE PARTNER OF APPELLANT FIRM WI THOUT SUPPORTING OR SUBSTANTIATING ANY MATERIAL OR EVIDENCE FOR MAKING SUCBA HEAVY ADDITION OF RS. 2,00,00,000/-. HENCE THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAK ING AN ADDITION OF RS. 2,00,00,000/- MERELY ON THE BASIS O F THE ADMISSION OF THE INCOME BY THE APPELLANTS PARTNER WITHOUT REFERR ING ANY MATERIAL GATHERED IN THE SURVEY OPERATIONS FOR MAKING SUCH A HEAVY ADDITION. ISSUE NO.2 ADMISSION OF ADDITIONAL INCOME BY THE ASSESSEE IN SURVEY OPERATIONS IS VALID FOR MAKING ADDITION THE ASSESSING OFFICER HAS REFERRED AT PAGE NO.5, PA RA NO. 2.2. THAT, 'AN ADMISSION OF ADDITIONAL INCOME MADE BY THE ASSE SSEE DURING THE COURSE OF SURVEY PROCEEDINGS IS VALID. THE RELIANCE IS BASED ON THE FOLLOWING JUDICIAL DECISIONS'. SUBMISSION OF THE APPELLANT THE APPEAL/ANT FIRM SUBMITS THAT IT HAS FILED THE R ETURN OF INCOME AS PER THE RECORDS OF THE FIRM RELATED TO TH E F.Y.2012-2013 ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 10 -: RELEVANT TO THE ASST. YEAR 2013-2014. THE APPELLANT FIRM HAS EARNED NET PROFIT OF RS.9,307/- IN THE FINANCIAL YEAR 2012 -2013 FOR SALE OF 1 HOUSE PLOT ONLY OF RS.1,96,000/-. THE CASES REFERRED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER ARE DIFFERENT WITH THE FACTS OF THE APPELLANT . THE ASSESSING OFFICER HAS SIMPLY MADE AN ADDITION O F RS. 2,00,00,000/- ONLY ON THE BASIS OF THE ADMISSION OF INCOME DURING SURVEY PROCEEDINGS. HENCE, THE ADDITION OF INCOME OF RS. 2,00,00,000/- NOT JUSTIFIED AND AGAINST THE CBDT CIRCULAR NO. F.NO. 286/2/2003- IT(INV) THAT, DATED 10.03.2003 AND CBOT CIRCULARS NO. F.NO.286/98 /2013- IT(INV.II) DT. 18.12.2014 VARIOUS CASE LAWS FILED, HENCE THE ADDITION OF INCOME OF RS. 2,00,00,000/- IS TO BE SET ASIDE. ISSUE NO.3 DISCLOSURE OF ADDITIONAL INCOME IS NOT VOLUNTARY THE ASSESSING OFFICER HAS REFERRED AT PAGE NO.6, PA RA NO. 1. OF THE ASSESSMENT ORDER THAT, 'THE ASSESSEE HAS NOT PROVED ANY THREAT OR COERCION BY THE OFFICER BEFORE WHOM THE DECLARATION WAS GIVEN. IN V IEW OF THE ABOVE JUDICIAL DECISIONS, THE ADDITION AGREED BY THE ASSE SSEE IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE'. SUBMISSION OF THE APPELLANT THE APPELLANT SUBMITS THAT AS PER BOOKS OF ACCOUNTS OF THE FIRM FOR THE F.Y.2012-2013 RELEVANT TO THE ASST. YEAR 20 13-2014, THE FIRM HAS EARNED NET PROFIT OF RS. 9,307/- ONLY. THE APPE LLANT FIRM HAS SOLD ONLY ONE PLOT FOR RS. 1,96,000/- DURING THE F. Y. 2 012-2013 RELEVANT TO THE ASST. YEAR 2013-2014. THE APPELLANT FIRM PARTNER SRI. A.JAYARAMUDU HAS OF FERED INCOME OF RS.2,00,00,000/- IN THE HANDS OF THE APPE LLANT FOR THE ASST. YEAR 2013-2014. THE APPELLANT FIRM, AS PER THE BOOK S OF ACCOUNTS EARNED NET PROFIT OF RS. 9307/- FOR THE F.Y. 2012-2 013 RELEVANT TO THE ASST. YEAR 2013-2014. THESE WAS NO ANY REASON FOR O FFERING THE INCOME OF RS. 2,00,00,000/- IN THE HANDS OF THE APP ELLANT IN THE ABSENCE OF ANY MATERIAL OR INCRIMINATING MATERIALS / RECORDS FOUND IN THE SURVEY OPERATIONS. THE OFFERING OF INCOME OF RS . 2,00,00,000/- IS NOT SUPPORTED WITH ANY EVIDENCES. HENCE THE OFFERIN G OF INCOME RS. 2,00,00,000/- BY THE APPELLANT FIRMS PARTNER WAS UN DER PRESSURE AND UNDER CONFUSING STATE OF MIND DURING THE COURSE OF RECORDING OF SWORN STATEMENT. HENCE THE ADDITION OF RS.2,00,00,0 00/- IS NOT JUSTIFIED AND IS AGAINST CBDT CIRCULARS ISSUED BY T HE DEPARTMENT IN REFERENCE TO CONFESSIONAL STATEMENT GIVEN BY THE AS SESSEE AT THE TIME ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 11 -: OF SURVEY OPERATIONS. HENCE THE ADDITION OF INCOME OF RS. 2,00,00,000/- IS TO BE SET ASIDE. THE APPELLANT HAS FURTHER FILED THE FOLLOWING REPLI ES TO THE QUERIES RAISED BY THE ASSESSING OFFICER IN THE ASSESSMENT O RDER. CONTENTION / ISSUES RAISED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER QUERY NO.1- PARA 2 SL.NO DATE OF PURCHASE OF PLOTS DOC.NO. NUMBER OF PLOTS PURCHASE CONSIDERATION STAMP DUTY OTHER EXPENSES 1. 28.06.2008 4148/2008 121 10200000.00 1325760.00 16500.00 2. 28.06.2008 4149/2008 23 4800000.00 456430.00 8250.00 TOTAL: 144 15000000.00 1782190.00 24750.00 THE APPELLANT HAS STATED THE VALUE OF-121 PLOTS RS. 1,02,00,000.00 AT THE TIME OF RECORDING SWORN STATEMENT. BY INADVERTE NCE HE HAS MISSED TO INFORM THE VALUE OF PURCHASE OF PLOTS 23 OF RS. 48,00,000/-. THE TOTAL VALUE OF THE PLOTS OF 144 WAS RS. 1,68,06 ,940/-. HE HAS ANSWERED TO THE QUERY BY STATING THAT ALL THE PARTN ERS OF THE FIRM HAVE INVESTED RS. 2.05 CRORES IN THE F.Y. 2008-2009 . ALL THE PARTNERS OF THE FIRM ARE INCOME TAX ASSESSEE'S AND SHOWN THE IR INVESTMENTS IN THE FIRM IN THEIR PERSONAL INCOME TAX RETURNS. THES E TRANSACTIONS ARE RELATED TO F.Y. 2008-2009 RELEVANT TO THE A.Y.2009- 2010 AND NOT RELATED IN THE F.Y. 2012-2013 RELEVANT TO THE CURRE NT A.Y. 2013-2014. THE APPELLANT IS ENCLOSING COPY OF LEDGER EXTRACT O F PURCHASE OF PLOTS ALE FROM THE BOOKS OF THE FIRM RELATING TO THE F.Y. 2012-2013. QUERY NO.2 AJ 23 [NOT NUMBERED IN THE ASSESSMENT ORDER] THE TRANSACTIONS ARE RELATED TO M/S.PAVAN DEVELOPER S AND CONSTRUCTIONS, KURNOOL REGARDING THE PURCHASE OF AG RICULTURAL LAND AT YEMMIGANUR IN THE F.Y. 2010-2011. THESE PAPERS ARE RELATED TO M/S. PAVAN DEVELOPERS AND CONSTRUCTIONS, KURNOOL AND NOT TO THE APPELLANT FIRM. THE TRANSACTIONS IN THE PAPER NO. A J 23 ARE NOT RELATED TO THE APPELLANT FIRM AND NOT TOOK PLACE IN THE F.Y. 2012-2013 RELEVANT TO THE A.Y. 2013-2014. QUERY NO.3 IN FACT THE ASSESSING OFFICER HAS NOT RAISED I SOUG HT ANY EXPLANATION ON THE MATERIAL IMPOUNDED AT THE TIME OF SURVEY OPE RATIONS FROM 'AJ 01 TO AJ 60' EITHER AT THE TIME OF RECORDING OF THE SWORN STATEMENT [SWORN STATEMENT TAKEN IMMEDIATELY ON THE FOLLOWING DAY OF THE SURVEY OPERATIONS I.E., 03.12.20131 OR AT THE TIME OF SCRUTINY PROCEEDINGS IN THE A.Y. 2013-2014. THE APPELLANT FI RM DID NOT GET ANY OPPORTUNITY TO EXPLAIN THE NOTING IN THE SAID IMPOU NDED MATERIAL DURING THE ASSESSMENT PROCEEDINGS IN THE A.Y. 2013- 2014. ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 12 -: SUBSEQUENTLY, THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1, KURNOOL HAS ISSUED SUMMONS AND ASKED FOR EXPLANATIO NS AND CLARIFICATIONS ON EACH FILE / PAPER / MATERIAL / DO CUMENTS ETC IMPOUNDED AT THE TIME OF SURVEY OPERATIONS ON 20.12 .2016 DURING THE SCRUTINY ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2014- 2015. THE APPELLANT'S FIRM MANAGING PARTNER SRI. A. JAYAR AMUDU HAS CLEARLY EXPLAINED OF EACH PAPER / FILE / MATERIAL / DOCUMENTS ETC BY ITEM WISE AND FILED A DETAILED EXPLANATION ANNEXURE ON THE IMPOUNDED MATERIAL. THE ASST. COMMISSIONER OF INCOME TAX HAS RECORDED A SWORN STATEMENT FROM THE MANAGING PARTNER SRI. A. JAYARAM UDU AND ASKED IN Q.10 BY SHOWING SUM IMPOUNDED MATERIAL AND ASKED FOR THE CLARIFICATION. THE MANAGING PARTNER OF THE FIRM HAS EXPLAINED IN DETAIL ON THE IMPOUNDED MATERIAL SHOWN FROM NO. AJ 6 AJ 17 , AJ 29, AJ 39 AND AJ 16 AND THE ASST. COMMISSIONER OF INCOME TAX HAS SATISFIED WITH THE EXPLANATION GIVEN BY THE APPELLANT. HENCE, THE APPELLANT SUBMITS THAT THE NOTING MADE I N PAPER NO. AJ 23 [CLASSMATE NOTE BOOK - BLUE PLANET] NOT RELAT ED TO THE APPELLANT FIRM AND ALSO NOT RELATED IN F.Y. 2012-2013 RELEVAN T TO THE A.Y. 2013- 2014. QUERY NO.4 OFFERING OF AN ADDITIONAL INCOME OF RS. 10 CRORES I N THE HANDS OF THE FIRM TOWARDS SUPPRESSION OF RECEIPTS, DEFICI ENCY IN THE INVESTMENTS MADE BY THE FAMILY MEMBERS AND DEFICIEN CY IN EXPLANATION OF NOTING MADE IN THE IMPOUNDED MATERIA L. THE APPELLANT SUBMITS THAT, 1] THERE WAS NO ANY SUPPRESSION OF RECEIPTS / SALE CONSIDERATION OF PLOTS IN THE F.Y.2012-2013 RELEVANT TO THE A.Y. 201 3-2014. 2] THERE WAS NO ANY DEFICIENCY IN THE INVESTMENTS M ADE EITHER BY THE FIRM PARTNERS / OR MY FAMILY MEMBERS IN THE F.Y. 20 12-2013 RELEVANT TO THE A.Y. 2013-2014. 3] THERE WAS NO ANY DEFICIENCY OR DOUBT OR QUERY RA ISED ON THE NOTING / RECORDS / FILES IN THE IMPOUNDED MATERIAL IN THE F.Y. 2012-2013 RELEVANT TO THE A.Y. 2013-2014. 4] THE ASSESSING OFFICER DID NOT POINT OUT ANY CONC EALMENT OF INCOME; EXCESS OF EXPENDITURE CLAIMED NOT SUPPORTED WITH PA YMENT VOUCHERS NOT FOUND AN SUPPRESSION OF SALES I RECEIPTS EITHER IN THE BOOKS OF ACCOUNTS OF THE FIRM OR IN THE MATERIAL IMPOUNDED A T THE TIME OF SURVEY; NOT SPECIFIC INSTANCE TRANSACTION IDENTIFIE D AND MENTIONED IN THE ASSESSMENT ORDER FOR MAKING HEAVY ADDITION OF 2 CRORES AND THE ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 13 -: ADDITION OF 2 CRORES NOT SUPPORTED WITH ANY EVIDENC E / DOCUMENT PROOF FOR CONCEALMENT. QUERY NO.5 THE ASSESSING OFFICER HAS MENTIONED AT PAGE NO.4; P ARA NO. 2.1, THAT, A. JAYARAMUDU HAS A FILED A LETTER DT. 03.01.2014 WITH A PLAN TO SPLIT OF THE ADDITIONAL INCOME OF 10 CRORES. THE APPELLANT SUBMITS THAT, THE INCOME TAX OFFICER HAS BROUGHT PRESSURE TO FILE A LETTER ABOUT THE DISCLOSURE OF 1 0 CRORES. IN FACT, THE APPELLANT FIRM HAS NOT BEEN GIVEN PROPER TIME TO DI SCUSS THE SURVEY OPERATIONS WITH THEIR PARTNERS TO TAKE A DECISION. THE APPELLANT HAS FILED RETURN OF INCOME ON THE BASIS OF THE BOOKS OF ACCOUNTS 1 RECORDS OF THE FIRM RELATED TO THE F.Y. 2013-2014. IN FACT, THE FIRM SOLD ONLY ONE PLOT FOR A SALE CONSIDERATION OF RS. 1,96,000/- AND DISCLOSED TOTAL INCOME OF RS. 9,3071- FOR THE ASST. YEAR 2013-2014. THERE WAS NO ANY BASIS 1 EVIDENCE FOR DISCLOSURE OF HEAVY ADDITI ONAL INCOME OF RS. 2 CRORES IN THE ASST. YEAR 2013-2014. QUERY NO.6 THE ASSESSING OFFICER HAS MENTIONED AT PAGE NO.5, P ARA NO. 2.2 THAT AS SEEN FROM THE STATEMENT GIVEN BY THE A. JAYARAMU DU, MANAGING PARTNER OF THE FIRM U/S 131 OF IT ACT, HE HAS DECLA RED TO PAY THE TAXES AN ADDITIONAL INCOME OFFERED. BUT HE HAS REVISED FI RMS INCOME. THIS CLEARLY SHOWS THAT HE HAS RETRACTED TO HIS DECLARAT ION GIVEN U/S 131 OF THE IT ACT FOR ADDITIONAL INCOME HE HAS ADMITTED . HENCE THE INCOME OF RS. 2 CRORES AS ADMITTED BY THE A. JAYARAMUDU HI S ADDED BACK IN THE HANDS OF THE ASSESSEE FIRM. THE APPELLANT IS REFERRING THE CBDT CIRCULARS ISSUE D BY THE CBDT ON THE SUBJECT OF SURVEY PROCEEDINGS AND ADMIS SION OF INCOME DURING SURVEY PROCEEDINGS. THE APPELLANT IS REFERRING SEVERAL CASE LAWS IN SUP PORT OF ITS SUBMISSION THAT, THE OFFERING OF INCOME AT THE TIME OF SURVEY OPERATIONS HAS NO EVIDENTIARY VALUE AND THE ADDITIO N SHOULD BE SUPPORTED WITH SUFFICIENT EVIDENCES FOUND IN IMPOUN DED MATERIAL. THE APPELLANT SUBMITS THAT, IT HAS FILED THE RETURN OF INCOME ON THE BASIS OF THE BOOKS OF ACCOUNTS 1 RECORDS OF THE FIRM. THE APPELLANT FIRM HAS SOLD ONLY ONE PLOT FOR RS. 1,96,000/- AND EARNED NET PROFIT OF RS. 9,3071- ONLY IN THE F.Y. 20122013 RELEVANT TO T HE ASST. YEAR 2013-2014. THERE WAS NO ANY EVIDENCE 1 NO BASIS / N O INCRIMINATING MATERIAL FOUND / NO DEFICIENCIES IN THE BOOKS OF AC COUNTS / RECORDS OF THE FIRM FOUND, NO DEFICIENCY FOUND ON THE NOTING 1 MATERIAL/RECORDS IMPOUNDED AT THE TIME OF SURVEY; NO SUPPRESSION OF SALE RECEIPTS / OTHER RECEIPTS IDENTIFIED OR FOUND IN THE BOOKS OF THE ACCOUNTS OF THE FIRM IN THE F.Y. 2012-2013 [2013-2014] FOR MAKING A N ADDITION OF RS. ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 14 -: 2 CRORES FOR THE A.Y. 2013-2014. HENCE, THE ADDITIO N OF 2 CRORES IS TO BE DELETED. HENCE, THE ADDITION OF RS. 2 CRORES IS TO BE SET AS IDE. THE ASSESSING OFFICER HAS NOT DOUBTED THE GENUINENE SS OF THE PARTNERSHIP BUSINESS AND NOT REJECTED THE BOOKS OF ACCOUNTS REGULARLY MAINTAINED BY THE FIRM FOR THE F.Y. 2012-2013. NO SUPPRESSION OF SALES / RECEIPTS FOUND IN THE MAT ERIAL IMPOUNDED RELATED TO THE F.Y. 2012-2013; NO NEW LOA NS / CREDITS FOUND IN THE F.Y. 2012-2013; NO UNDISCLOSED / CONCE ALMENT OF INCOME FOUND IN THE IMPOUNDED MATERIAL RELATED TO T HE F.Y. 2012- 2013; NO EXCESS EXPENDITURE DEBITED IN PROFIT AND L OSS ACCOUNT WAS FOUND. HENCE, THE MANAGEMENT OF THE FIRM HAS FILED THE INCOME ON THE BASIS OF THE BOOKS OF ACCOUNTS AND RECORDS MAINTAIN ED IN THE F.Y. 2012-2013 RELEVANT TO THE ASST. YEAR 2013-2014. THE ASSESSING OFFICER HAS NOT FOUND ANY INCRIMINATI NG MATERIAL NOR FOUND ANY SUPPRESSION OF RECEIPTS IN THE IMPOUN DED MATERIAL RELATED TO THE F.Y. 2012-2013 RELEVANT TO THE ASST. YEAR 2013-2014. THE ASSESSING OFFICER HAS NOT IDENTIFIED AND NOT ME NTIONED ANY SPECIFIC DOCUMENT / RECORD / NOTING ETC FOR MAKING ADDITION INCOME OF RS. 2 CRORES TO THE RETURN OF INCOME. MARITS OF THE APPELLANTS CASE THE APPELLANT FIRM HAS FILED THE RETURN OF INCOME O N THE BASIS OF THE REGULAR BOOKS OF ACCOUNTS MAINTAINED DURING THE F.Y. 2012-2013 RELEVANT TO THE ASST.YEAR 2013-2014. IT IS A FACT THAT THE APPELLANT FIRM HAS SOLD 1 PLO T ONLY FOR RS.1,96,000/- DURING THE F.Y. 2012-2013 AND EARNED NET PROFIT OF RS. 9 307/- ONLY. THIS FACT IS SUPPORTED AND EVIDENCED BY THE STAMPS AND REVENUE DEPARTMENT GOVERNMENT OF ANDHRA PRADESH AT S. NO. 1/33 STATEMENT NO. 13550934 DATED 19.08.2015. THE ASSESSING OFFICER HAS NOT FOUND THE FOLLOWING D URING THE F.Y. 2012-2013 RELEVANT TO THE ASST. YEAR 2013-2014 IN THE IMPOUNDED MATERIAL - A. ANY CONCEALMENT OF INCOME; B. ANY SUPPRESSION OF SALE / RECEIPTS; C. ANY UNDISCLOSED INCOME; D. ANY NEW CREDITS / LOANS FOUND; E. NO INCRIMINATING MATERIAL FOUND; F. NO UN EXPLAINED EXPENDITURE FOUND; G. NO NEW INVESTMENTS MADE / FOUND; H. NOT SPECIFIED / IDENTIFIED ANY REASON FOR DETERM INATION OF INCOME OF RS. 2 CRORES; ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 15 -: I. THE ASSESSMENT ORDER WAS PASSED AGAINST THE CBDT CIRCULAR; J. THE ASSESSMENT ORDER PASSED AGAINST THE SUPREME COURT JUDGMENT AND OTHER HIGH COURTS 5. THE APPELLANT HAS FILED VARIOUS CASE LAWS IN SUP PORT OF ITS SUBMISSIONS. [THE CASE LAWS ARE FILED IN PAPER BOOK AND PLACED ON RECORD]. I. CIT V. S. KHADAR KHAN SON (2013) 352 ITR 480 / [ 2012] 210 TAXMAN 248/ 79 DTR 184/254 CTR 228 (SC) BY ASMEET SHAH ON 19.01.2015 II. MADRAS HIGH COURT THE COMMISSIONER OF INCOME TAX VS M/S.S.KHADER KHAN SON ON 4 JULY, 2007 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 4.7.2007 THE HON'BLE MR.JUSTICE P.O.OINAKARAN AND THE HON'BL E MR.JUSTICE P.P.S.JANARTHANA RAJA T.C.(A).NO.867 OF 2007 THE COMMISSIONER OF INCOME TAX SALEM 1. .. APPELLAN T VS. M/S.S.KHADER KHAN SON, 90 SYED MADAR STREET SHEVAPE T SALEM ... RESPONDENT III. HIGH COURT OF GUJARAT KAILASHBEN MANHARLAL CHOKSHI VS. COMMISSIONER OF INCOME TAX IV. IN THE HIGH COURT OF KARNATAKA CHIEF COMMISSIONER OF INCOME-TAX, HUBLI. VS. PAMPAP ATHI. V. IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH 'A', PUNE JYOTICHAND BHAICHAND SARAF & SONS PVT. LTD. VS . DCIT ITA NO. 08/PN/2011 (BLOCK PERIOD: 1996-97 TO 2002-2 003) VI. ANDHRA HIGH COURT - COMMISSIONER OF INCOME TAX, VS SRI NARESH KUMAR AGARWAL, PROP. 9 SEPTEMBER, 2014 I.T.T.A NO.1 12 OF 2003 VII. HIGH COURT OF MADRAS COMMISSIONER OF INCOME TAX VS. SIVABALA DEVI TAX CASE (APPEAL) NO. 316 OF 2004 24TH JUNE, 2010 (2011) 237 CTR (MAD) 337 : (2011) 330 ITR 510 : (20 11) 49 DTR 272 VIII. DELHI HIGH COURT COMMISSIONER OF INCOME TAX VS M/S. DHINGRA METAL WO RKS ON 4 OCTOBER, 2010; ITA 1111/2010 ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 16 -: IX. ASST. CIT VS. KRISHNA DEVELOPERS 2017 TAX PUB 1 247 [AHD-TRIB] X. GAJJAM CHINNA YELLAPPA VS. ITO, HIGH COURT OF TE LANGANA AND ANDHRA PRADESH [2015] 59 TAXMANN.COM 69 XI. CIT VS. MP. SCRAP TRADERS 372 ITR 507 XII. ACIT VS. RAVI AGRICULTURAL INDUSTRIES [ITAT] A GRA ITA NO. 145/AGR2006 XIII. ASST. CIT VS. LAYER EXPORTS PVT. LTD. 2017 155 TR [A] XIV. DCIT VS. VIJAYA MEHTA & VICE-VERSA 2017 156 IT R TR (A) XVII. CHIEF COMMISSIONER OF INCOME TAX, HUBLI VS. P AMPATHI [2009] 310 ITR 64; KARNATAKA; DATED 31.01.2008; 6. THE APPELLANT HAS ALSO REFERRED SUPREME COURT CA SE LAWS ON LEVY OF TAX ON REAL INCOME ONLY AND NOT ON HYPOTHETICAL INCOME. CASE LAWS ON LEVY OF TAX ON REAL INCOME ONLY AND NO T ON HYPOTHETICAL INCOME 1. SUPREME COURT OF INDIA COMMISSIONER OF INCOME-TAX, VS SHOORJI VALLABHDAS A ND CO. ON 27 MARCH, 1962 EQUIVALENT CITATIONS: 1962 46 ITR 144 S C 2. SUPREME COURT OF INDIA COMMISSIONER OF INCOME-TAX ... VS BOKARO STEEL LIMI TED, BOKARO ON 18 DECEMBER, 1998 3. SUPREME COURT OF INDIA THE GODHRA ELECTRICITY CO. LTD . VS THE COMMISSI ONER OF INCOME TAX, ON 3 APRIL, 1997 7. THE ONLY GROUND OF APPEAL ARISES ON ACCOUNT OF A DDITION OF INCOME OF RS.2,00,00,000/- ON THE BASIS OF STATEMENT GIVEN BY A. JAYARAMUDU. CONSIDERING THE FACTS, ISSUES, CIRCUMSTANCES OF THE INSTANT CASE AND KEEPING IN VIEW OF THE EVIDENCES SUBMITTED BY T HE APPELLANT AND CBDT CIRCULARS AND JUDICIAL PRONOUNCEMENT BY THE HO N'BLE HIGH COURT OF TELANGANA AND ANDHRA PRADESH IN THE CASE O F GAJJAM CHINNA YELLAPPA VS. INCOME TAX OFFICER, IITA NO. 26 8, 273 & 308 OF 2003 AND 287, 291 & 294 OF 2006 DT. 06 NOVEMBER 201 4, THE ADDITION OF RS.2,00,00,000/- IS DELETED ON THE FOLL OWING GROUND. (I) THE ASSESSING OFFICER DID NOT FIND ANY CORROBOR ATIVE EVIDENCE OR INCRIMINATING MATERIAL IN THE SURVEY OPERATIONS / M ATERIAL IMPOUNDED ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 17 -: FOR MAKING ADDITION OF INCOME OF RS. 2,00,00,000/-. THE MERE FACT THAT SOMEBODY MADE A STATEMENT, BY ITSELF CANNOT BE TREATED AS HAVING RESULTED IN AN IRREBUTTABLE PRESUMPTION AGAI NST THE ASSESSEE. THE BURDEN OF SHOWING THAT THE ASSESSEE HAD DISCLOS ED INCOME IS ON THE REVENUE AND THAT BURDEN CANNOT BE SAID HAVE BEE N DISCHARGED BY MERELY REFERRING TO THE STATEMENT. THEREFORE, SUCH STATEMENT CANNOT BE MADE THE SOLE FOUNDATION FOR MAKING THE ADDITION OF INCOME. WE FIND SUPPORT FROM THE CBDT CIRCULAR DT. 10.03.2003 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, WHICH TOOK EXCEPTION TO THE INITIATION OF THE PROCEEDINGS ON THE BASIS OF THE RETRACTED STATE MENTS. (II) THERE IS NO ANY EVIDENCE OR MATERIAL FOUND IN THE IMPOUNDED RECORDS TO SUPPORT THE ADDITION OF INCOME OF RS. 2, 00,00,000/-. HENCE, THE ADDITION OF INCOME OF RS. 2,00,00,000/- IS DELE TED. 8. IN THE RESULT, THE APPEAL IS ALLOWED. 3. LEARNED CIT-DRS SOLE ARGUMENT AS PER REVENUES PLEADING IS THAT THE CIT(A) HAS ERRED IN LAW AND ON F ACTS IN DELETING THE IMPUGNED SUBSTANTIVE AS WELL AS THE PROTE CTIVE ADDITIONS ON CONJUNCTURES AND SURMISES DESPITE THE FA CT THAT THE ASSESSEES HAD DULY ADMITTED THE FOREGOING INCOME(S) DURING THE COURSE OF SURVEY DT.02-12-2013 BASED ON THE DOCUMENTARY EVIDENCE. AND THAT ALTHOUGH THESE ASSESSEE S HAD RETRACTED FROM THE STATEMENT(S) AFTER A LONG GAP OF THREE Y EARS, THE IMPUGNED ADDITIONAL HAD BEEN RIGHTLY MADE IN THE ASSESSING OFFICERS ASSESSMENT ORDERS. 4. THE ASSESSEE HAS PLACED STRONG RELIANCE ON THE CIT (A)S FOREGOING DETAILED DISCUSSION DELETING THE SUBSTANTIVE PROTECTIVE ADDITIONS, AS THE CASE MAY BE. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE FOREGOING RIVAL CONTENTIONS. WE FIND NO MERIT IN THE REVENUES INSTANT ARGUMENTS SINCE THERE IS NO EVEN AN IOTA OF EVIDENCE; EXCEPT THE ASSESSEES SURVEY STATEMENT FORMING BASIS O F THE ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 18 -: IMPUGNED ADDITIONS. MR.NAIK VEHEMENTLY REITERATED REVE NUES STAND ONCE AGAIN THAT THE SAME ARE VERY MUCH BASED ON TH E DOCUMENTARY EVIDENCE FOUND DURING THE COURSE OF THE SU RVEY. WE, HOWEVER, NOTICE FROM A PERUSAL OF THE SURVEY STATE MENT(S) DULY EXTRACTED IN THE CORRESPONDING ASSESSMENT ORDER(S ) THAT THE ASSESSEE(S) HAD MADE IT CLEAR THAT THEIR ADMISSION WAS ONLY BASED ON ROUGH ESTIMATION IN ORDER TO AVOID LITIGATION AND TO PURCHASE PEACE THAN IN VIEW OF ANY MATERIAL FOUND/SEI ZED BY THE DEPARTMENTAL AUTHORITIES. THE CIT(A) HAS ALREADY PL ACED RELIANCE ON THE CBDT CIRCULARS (SUPRA) THAT SUCH ADMIS SIONS OR CONFESSIONS; AS THE CASE MAY BE, MADE DURING THE C OURSE OF A SEARCH OR SURVEY DOES NOT CARRY ANY EVIDENTIARY VA LUE SINCE IT HAS TO BE ONLY TO THE EVIDENCE COLLECTED ONLY. WE THU S FIND NO REASON TO INTERFERE WITH THE LEARNED CIT(A)S IMPUGNE D CONCLUSION DELETING SUBSTANTIVE AND PROTECTIVE ADDI TIONS IN ISSUE AFTER APPRECIATION ALL THE FACTS CONSIDERED IN L AW OF THE CBDT CIRCULAR(S) AS WELL AS VARIOUS JUDICIAL PRECED ENTS QUOTED AT THE ASSESSEES BEHEST. ITS IDENTICAL SOLE SUBSTANTIVE GROUND IN ALL THESE SIX CASES FAIL THEREFORE. 6. THESE REVENUES SIX APPEALS ARE DISMISSED IN ABO VE TERMS. A COPY OF THIS COMMON ORDER BE PLACED IN THE R ESPECTIVE CASE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JUNE, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 25-06-2021 TNMM ITA NOS. 743, 752, 747, 748, 749 & 750/HYD/2018 :- 19 -: COPY TO : 1.ASST.COMMISSIONER OF INCOME TAX, CIRCLE-1, KURNOO L. 2.M/S.LEGEND DEVELOPERS & CONSTRUCTIONS, 42-115/C- 14, N R PETA, KURNOOL. 3.SRI AGNUR JANAKIRAM, H.NO.40/806G, SRINIVASA NAGA R, KURNOOL. 4.SMT.AGNUR NIRMALA, H.NO.26/114, CHITTARI STREET, KURNOOL. 5.SRI AGNUR JAYARAMUDU (INDIVIDUAL), H.NO.40/806G, SRINIVASA NAGAR, KURNOOL. 6.SRI AGNUR JAYARAMUDU (HUF), H.NO.40/806G, SRINIVA SA NAGAR, KURNOOL. 7.CIT(APPEALS)-KURNOOL. 8.PR.CIT-KURNOOL. 9.D.R. ITAT, HYDERABAD. 10.GUARD FILE.