M/s Wesley Constructions, Visakhapatnam V. The DCIT, Circle-5(1), Visakhapatnam, Visakhapatnam

ITA 80/VIZ/2012

• Counselvise Citation: 8025314 RSA 2012
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 22-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KOMALI KRISHNA
• Keywords: Opportunity of being heard; Corroborative evidences; Retraction
• Section: 133A

Judgement Text

ITA NOS.79&80/VIZAG/2012 WESLEY CONSTRUCTIONS, VSKP IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NOS.79&80/VIZAG/2012 ASSESSMENT YEARS : 2007-08 & 2008-09 RESPECTIVELY WESLEY CONSTRUCTIONS VISAKHAPATNAM VS. DCIT CIRCLE-5(1) VISAKHAPATNAM (APPELLANT) (RESPONDENT) PAN NO.AAAFW 6273B ASSESSEE BY: SHRI C. SUBRAHMANYAM, CA REVENUE BY: SMT. KOMALI KRISHNA, ADDL.CIT DATE OF HEARING : 03.03.2014 DATE OF PRONOUNCEMENT : 06.03.2014 ORDER PER SAKTIJIT DEY, JUDICIAL MEMBER:- THESE ARE TWO APPEALS BY THE ASSESSEE DIRECTED AGA INST THE ORDER OF THE CIT(A), VISAKHAPATNAM DATED 10.1.2012 FOR THE A SSESSMENT YEARS 2007- 08 & 2008-09. ISSUES BEING COMMON FOR THE SAKE OF CONVENIENCE, THE APPEALS ARE CLUBBED TOGETHER WE WILL FIRST TAKE UP ASSESSEES APPEAL IN ITA NO.79/VIZAG/2012. ITA NO.79/VIZAG/2012: 2. BRIEFLY THE FACTS ARE THE ASSESSEE A PARTNERSHIP FIRM IS ENGAGED IN THE BUSINESS OF CONSTRUCTION AND SALE OF FLATS. THE AS SESSEE ORIGINALLY FILED ITS RETURN OF INCOME ON 21.11.2007 DECLARING TOTAL INCO ME OF RS.4,80,720/-. A SURVEY U/S 133A OF THE INCOME-TAX ACT WAS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 21.2.2008. AS A CONSEQ UENCE OF SURVEY ASSESSEES CASE WAS SELECTED FOR SCRUTINY ASSESSMEN T. DURING THE SCRUTINY ASSESSMENT PROCEEDING, THE ASSESSING OFFICER NOTED THAT IN CASE OF SURVEY CERTAIN BOOKS OF ACCOUNTS ALONG WITH LOOSE SHEETS R ELATING TO SALES EFFECTED BY ITA NOS.79&80/VIZAG/2012 WESLEY CONSTRUCTIONS, VSKP 2 THE ASSESSEE WERE FOUND AND IMPOUNDED. THE ASSESSI NG OFFICER CALLED UPON THE ASSESSEE TO FURNISH THE YEARWISE RECEIPTS TOWAR DS SALE CONSIDERATION OF FLATS. ON VERIFICATION OF THE INFORMATION FURNISHE D BY THE ASSESSEE VIS--VIS THE RETURN OF INCOME THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS RECEIVED RS.1,08,99,525/- FOR THE YEAR UNDER CONSID ERATION AND SHOWN WORK IN PROGRESS OF RS.48 LAKHS. IN THE PROFIT & LOSS A CCOUNT, THE ASSESSEE ALSO SHOWN TOWARDS PURCHASE ACCOUNT AT RS.64,47,828/- AN D DIRECT EXPENSES AT RS.20,79,128/-. UNDER THESE INDIRECT EXPENSES OF R S.79,48,519/- THEREBY DISCLOSING THE NET PROFIT OF RS.4,32,630/-. THE AS SESSING OFFICER NOTED THAT VARIOUS PROVISIONAL ACCOUNTS FOUND AND IMPOUNDED DU RING THE SURVEY WHEN TALLIED WITH THE ACCOUNTS FURNISHED WITH THE RETURN OF INCOME REVEAL THAT THE OPENING WORK IN PROGRESS SHOWN BY THE ASSESSEE STAN DS AT RS.50,37,233/- IN BOTH THE ACCOUNTS. WHEREAS THE EXPENSES CLAIMED TO WARDS MATERIAL PURCHASES IS SHOWN AT RS.61,17,320/- IN THE PROVISI ONAL PROFIT & LOSS ACCOUNT AS AGAINST RS.64,47,828/- AS PER THE PROFIT & LOSS ACCOUNT FILED ALONG WITH THE RETURN OF INCOME. HE THEREFORE NOTED THAT THERE IS AN EXCESS MATERIAL PURCHASE OF RS.3,30,508/- WHICH WAS ADDED TO THE IN COME. SIMILARLY, EXPENSES UNDER THE HEAD DIRECT AND INDIRECT EXPENSE S WAS SHOWN AT RS.34,65,475/- IN THE PROVISIONAL ACCOUNT AS AGAINS T THE CLAIM OF RS.3827647/- IN THE FINAL ACCOUNTS FURNISHED ALONG WITH THE RETURN OF INCOME. THEREFORE, THE EXCESS CLAIM OF RS.3,62,172/- WAS AD DED TO THE INCOME OF THE ASSESSEE. WHILE EXAMINING THE PROVISIONAL BALANCE SHEET THE ASSESSING OFFICER NOTED THAT WHILE THE PROVISIONAL BALANCE SH EETS STANDS AT A TOTAL OF RS.83,088/- AS AGAINST THE TOTAL OF THE BALANCE SHE ET IN THE RETURN OF INCOME AT RS.1,06,67,334/-. IN BOTH THE ACCOUNTS THE BALA NCE OF SECURED LOANS OF SBI OD ACCOUNT STAND AT RS.10,52,290.61PS. WHICH GIV ES A CLEAR INDICATION OF THE FACT THAT PROVISIONAL ACCOUNTS HAVE BEEN DRAWN WELL AFTER THE END OF THE FINANCIAL YEAR AND THE SAME WAS GENUINE ACCOUNT. H E FURTHER NOTED THAT ASSESSEE HAS SHOWN CURRENT LIABILITIES AT RS.10,000 /- IN THE PROVISIONAL BALANCE SHEET AS ON 31.3.2007 WHEREAS UNDER THE SAM E HEAD HE HAS SHOWN RS.32,89,985/- AS PER THE BALANCE SHEET ENCLOSED TO THE RETURN OF INCOME. HE NOTED THAT BOTH THE BALANCE SHEETS HAVE BEEN PRE PARED AT 31.3.2007 BUT THE CURRENT LIABILITIES SHOWN IN THE BALANCE SHEET ENCLOSED TO THE RETURN OF ITA NOS.79&80/VIZAG/2012 WESLEY CONSTRUCTIONS, VSKP 3 INCOME IS EXTRAORDINARILY HIGH. HE THEREFORE INFER RED THAT THE ASSESSEE HAS WILLFULLY INFLATED THE FIGURE. HENCE, THE DIFFEREN CE OF RS.32,79,985/- WAS ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSING OFFICER NOTED THAT AFTER THE SURVEY, THE ASSESSEE HAS FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 SHOWING ADDITIONAL RECEIPT FROM SALE OF FLA T AT RS.1,81,48,717/- AS LUMPSUM. WHEREAS THE REGISTRATION OF VARIOUS FLATS HAVE BEEN COMPLETED SUBSTANTIALLY BY THE FINANCIAL YEAR 2007-08. THERE BY THE ASSESSEE HAS DELIBERATELY SHIFTED THE BURDEN OF TAXATION TO THE LATEST YEAR TO SAVE THE INTEREST AND TAX COMPONENT. THE ASSESSING OFFICER NOTED THAT THE IMPOUNDED MATERIAL CLEARLY MENTIONS THAT IN MOST OF THE CASES , THE RECEIPTS HAVE BEEN SUBSTANTIALLY RECEIVED BY THE FINANCIAL YEAR 2006-0 7 RELEVANT TO THE ASSESSMENT YEAR 2007-08. THEREFORE ASSESSEES CONT ENTION FOR ACCEPTING THE ADDITIONAL RECEIPT DURING ASSESSMENT YEAR 2008-09 W OULD BE ABSURD. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE RECEIPTS TO BE OFFERED IN EACH ASSESSMENT YEAR HAVE NOT BEEN DULY OFFERED BY THE A SSESSEE. IN THE ABSENCE OF ANY EXPENDITURE SUBSTANTIATION OR COMPLETION CER TIFICATE FROM THE ENGINEER, ARRIVING AT PERCENTAGE COMPLETION METHOD IS NOT POS SIBLE. HE THEREFORE OPINED THAT IN SUCH A CASE THE MOST LOGICAL METHOD OF ARRIVING AT PERCENTAGE COMPLETION METHOD SHALL BE ON THE BASIS OF THE REGI STRATION OF FLATS MADE DURING THE YEAR RELEVANT TO THE ASSESSMENT YEAR 200 7-08. THE VALUE OF FLATS REGISTERED DURING FINANCIAL YEAR 2006-07 AS FOUND I N THE IMPOUNDED ACCOUNT BOOK NO.10 COMES TO RS.1,56,43,452/- WHICH IS SUBST ANTIAL BY THE ADDITIONAL RECEIPTS SUFFERED BY THE ASSESSEE AS A LUMPSUM FOR THE ASSESSMENT YEAR 2008-09. THE ASSESSING OFFICER THEREFORE SPREADING OVER THE ADDITIONAL RECEIPTS TO THE RELEVANT ASSESSMENT YEAR NOTED THAT THE DIFFERENCE WHICH HAS TO BE OFFERED BY THE ASSESSEE COMES TO RS.47,43,927 /- FOR THE YEAR UNDER CONSIDERATION WHICH IS ACCORDINGLY ADDED TO THE INC OME OF THE ASSESSEE. THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER MAKIN G THE AFORESAID ADDITIONS. 3. BEING AGGRIEVED OF THE ADDITIONS MADE THE ASSESS EE PREFERRED AN APPEAL BEFORE THE CIT(A). ITA NOS.79&80/VIZAG/2012 WESLEY CONSTRUCTIONS, VSKP 4 4. THE CIT(A) PARTLY ACCEPTING THE CONTENTION OF TH E ASSESSEE WITH REGARD TO THE DIFFERENCE IN PROVISIONAL PROFIT AND LOSS AC COUNT AND FINAL PROFIT AND LOSS ACCOUNT SUBMITTED ALONG WITH THE RETURN RESTRICTED THE ADDITIONS TO RS.1,34,613/- INSTEAD OF SEPARATE ADDITIONS OF RS.3 ,35,008/- AND RS.3,62,172/-. SO FAR AS ADDITION ON ACCOUNT OF SU NDRY CREDITORS AMOUNTING TO RS.32,29,985/- IS CONCERNED, THE CIT(A) REDUCED THE ADDITION OF RS.19,24,901/- BY TAKING THE DIFFERENCE IN TOTAL FI GURE OF BALANCE SHEET AS PER IMPOUNDED DOCUMENT AND THE BALANCE SHEET FILED ALON G WITH THE RETURN. SO FAR AS THE ADDITION MADE ON ACCOUNT OF DIFFERENCE I N RECEIPTS OF SALES THE CIT(A) NOTED THAT AS PER THE RECONCILIATION STATEME NT FILED BY THE ASSESSEE, THE ASSESSEE HAS DECLARED MORE RECEIPTS ON ACCOUNT OF THESE FLATS THAN ADDED BY THE ASSESSING OFFICER. THE ASSESSEE HAS OFFERED THESE RECEIPTS IN TWO ASSESSMENT YEARS. THEREFORE, THE ASSESSING OFFICER IN EFFECT HAS ADDED THE SAME AMOUNT TWICE I.E. ONCE AT THE TIME OF REGISTRA TION AND SECOND TIME AT THE TIME OF COMPLETION. THE CIT THEREFORE NOTED TH AT THERE IS NO NEED FOR ADDITION OF RS.47,43,927/- WHICH IS ACCORDINGLY DEL ETED. 5. THE LD. A.R. CONFINING HIS ARGUMENT TO THE ADDIT ION SUSTAINED BY THE CIT(A) SUBMITTED BEFORE US THAT THE ASSESSEE BEFORE THE ASSESSING OFFICER AS WELL AS CIT(A) SUBMITTED THAT SO CALLED PROVISIONAL BALANCE SHEET AND P&L ACCOUNT IMPOUNDED AT THE TIME OF SURVEY ITSELF SHOW S THAT THEY ARE PROVISIONAL AND NOT FINAL. IT WAS SUBMITTED THAT TH E ASSESSING OFFICER HAS TAKEN ONLY THE CREDITORS AND COMPARED THE SAME WITH PROVISIONAL BALANCE SHEET FIGURE. WHEREAS THE CIT(A) WHILE CONFIRMING A PART OF THE ADDITION HAS ADOPTED A DIFFERENT METHOD FOR ARRIVING AT THE AMOU NT. IT WAS SUBMITTED THAT THE CIT(A) WAS NOT CORRECT IN COMING TO SUCH A CONC LUSION BECAUSE THE BALANCE SHEET FILED ALONG WITH THE RETURN OF INCOME IS AUTHENTIC AS THE FIGURES APPEARING UNDER EACH HEAD IS SUPPORTED WITH COGENT EVIDENCE. IN THIS CONTEXT, THE LD. A.R. REFERRING THE DETAILS OF ADVA NCE FOR FLATS AS REFLECTED IN THE FINAL BALANCE SHEET A COPY OF WHICH IS AT PAGE 25 OF THE PAPER BOOK SUBMITTED THAT AN AMOUNT OF RS.31,88,745/- WAS RECE IVED AS ADVANCE. FURTHER, SUBMITTING THE LEDGER ACCOUNT COPIES OF TH E INDIVIDUALS FROM WHOM THE ADVANCES WERE RECEIVED, THE LD. A.R. SUBMITTED THAT HAD THE AFORESAID ITA NOS.79&80/VIZAG/2012 WESLEY CONSTRUCTIONS, VSKP 5 FACTS BEEN TAKEN INTO CONSIDERATION THE ADDITION CO ULD NOT HAVE BEEN SUSTAINED. 6. THE LD. D.R. ON THE OTHER HAND SUBMITTED THAT TH E ASSESSEE HAS NOT PROPERLY EXPLAINED THE DIFFERENCE BETWEEN THE PROVI SIONAL BALANCE SHEET AND THE BALANCE SHEET FILED ALONG WITH THE RETURN HENCE THE ADDITIONS HAVE BEEN MADE. 7. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. IT IS THE CONTENTION OF THE LD. A.R. THAT THE PROVISIONAL BALANCE SHEET ACTUALL Y DO NOT REFLECT THE TRUE AFFAIRS OF THE ASSESSEE WHICH HAS BEEN REFLECTED IN THE FINAL BALANCE SHEET FILED ALONG WITH THE RETURN. IT WAS SUBMITTED THAT IF THE FINAL BALANCE SHEET IS CONSIDERED ALONG WITH THE BOOKS OF ACCOUNTS THERE C ANNOT BE ANY DIFFERENCE. AFTER CONSIDERING THE SUBMISSIONS OF THE PARTIES AN D THE NATURE OF ADDITION WE ARE OF THE VIEW THAT ASSESSEE DESERVES AN OPPORTUNI TY TO RECONCILE THE DIFFERENCE BY ADDUCING NECESSARY EVIDENCE, SINCE, A S IT APPEARS THE ENTIRE ADDITION HAS BEEN MADE ONLY ON THE BASIS OF THE DIF FERENCE IN THE PROVISIONAL BALANCE SHEET FOUND DURING SURVEY AND FINAL BALANCE SHEET SUBMITTED WITH THE RETURN OF INCOME. THEREFORE, WITHOUT GOING INTO TH E MERITS OF THE ADDITIONS, WE REMIT THE MATTER BACK TO THE FILE OF THE ASSESSI NG OFFICER WHO SHALL VERIFY ALL THE ASPECTS AND REDO THE ASSESSMENT IN ACCORDAN CE WITH LAW. THE ASSESSEE IS AT LIBERTY TO SUBMIT NECESSARY EVIDENCE TO SUBSTANTIATE ITS CLAIM. NEEDLESS TO MENTION THE ASSESSING OFFICER SHALL AFF ORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE M ATTER. ITA NO.80/VISAG/2012: 8. IN THE IMPUGNED ASSESSMENT YEAR THE ASSESSEE FILE D RETURN OF INCOME ON 20.4.2009 DECLARING TOTAL INCOME OF RS.15,62,300 /-. AS A CONSEQUENCE OF SURVEY CONDUCTED ON 21.2.2008 ASSESSEES CASE WAS S ELECTED FOR SCRUTINY. DURING THE SCRUTINY ASSESSMENT PROCEEDING, THE ASSE SSING OFFICER NOTED THAT AS PER THE IMPOUNDED MATERIAL CERTAIN PAYMENTS WERE SEEM TO HAVE BEEN MADE BY THE ASSESSEE TO HIS BROTHER. THEREFORE, A STATEMENT WAS RECORDED ITA NOS.79&80/VIZAG/2012 WESLEY CONSTRUCTIONS, VSKP 6 FROM THE ASSESSEE ON 2.12.2010. IN THE STATEMENT R ECORDED, THE ASSESSEE STATED THAT HE PURCHASED A LAND AT NALLIPUDI VILLAG E FOR A CONSIDERATION OF RS.14,70,000/- BUT AS PER THE IMPOUNDED MATERIAL, T HE SALE CONSIDERATION IS RS.54,45,700/-. THE ASSESSING OFFICER THEREFORE PR OPOSED TO ADD THE DIFFERENTIAL AMOUNT OF RS.39,75,700/-. THE ASSESSE E IN RESPONSE TO THE SHOW CAUSE NOTICE SUBMITTED THAT THE DIFFERENTIAL AMOUNT OF RS.39,75,700/- AS INDICATED IN THE IMPOUNDED MATERIAL DOES NOT PERTAI N TO M/S. WESLEY CONSTRUCTIONS AS THE SAME AMOUNT WAS RETURNED TO TH E FOLLOWING PERSONS. 1. VIJAYARAMA RAJU RS.26 LAKHS 2. ANNAVARAM RAJU RS.13,75,700/- 9. IT WAS FURTHER EXPLAINED THAT THE ASSESSEE ALONG WITH THESE TWO PERSONS INTENDED TO PURCHASE LAND NEARER TO THE SEZ FOR AN AMOUNT OF RS.54,45,700/-. WHEN THE PROPOSAL WAS WITHDRAWN BY THE MINISTRY THE ASSESSEE AND THE OTHER TWO PERSONS DECIDED NOT TO I NVEST IN THE SAID LAND AND TOOK BACK THE AMOUNT CONTRIBUTED BY EACH OF THEM. IT WAS FURTHER STATED BY THE ASSESSEE THAT HE HAD PURCHASED ONLY PART OF THE LAND FOR A CONSIDERATION RS.14,70,000/- TOWARDS HIS SHARE AND THE REMAINING AMOUNT OF RS.39,75,700/- WAS RETURNED TO THE OTHER TWO PERSON S AS THE DEAL DID NOT MATERIALIZE. IT WAS SUBMITTED BY THE ASSESSEE THAT THE SALE DOCUMENTS IMPOUNDED BY THE ASSESSEE WOULD NOT MAKE IT CLEAR A S IT CONTAINS BOTH THE RECEIPT AND PAYMENTS OF THE SAID AMOUNT. THE ASSES SING OFFICER HOWEVER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AS THE AS SESSEE COULD ONLY PRODUCE CONFIRMATORY LETTERS FROM THE SAID TWO PERSONS WITH OUT ANY SUPPORTING EVIDENCE LIKE BANK STATEMENTS ETC. HE THEREFORE AD DED THE AMOUNT OF RS.39,75,000/- TO THE INCOME OF THE ASSESSEE BY TRE ATING IT AS UNEXPLAINED INCOME OF THE ASSESSEE. THE ASSESSING OFFICER ALSO MADE AN ADDITION OF RS.2,88,623/- AS DIFFERENCE IN RECEIPTS. 10. BEING AGGRIEVED OF SUCH ADDITIONS THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A). THE CIT(A) HOWEVER SUSTAINED THE AD DITION. 11. THE LD. A.R. CONTENDED BEFORE US THAT DURING TH E COURSE OF SURVEY, A SLIP CONTAINING CERTAIN FIGURES BOTH RECEIPTS AND P AYMENTS DEPICTED THE ITA NOS.79&80/VIZAG/2012 WESLEY CONSTRUCTIONS, VSKP 7 AMOUNT OF RS.54,45,000/- WAS FOUND IT WAS SUBMITTED THAT WHEN STATEMENT WAS RECORDED FROM THE ASSESSEE ON THE DATE OF SURVE Y ASSESSEE EXPLAINED THAT A SUM OF RS.14 LAKHS WAS PAID TOWARDS PURCHASE OF SITE. ON THE BASIS OF THE ASSESSEES REPLY WHEN A QUESTION WAS POSED TO T HE ASSESSEE WITH REGARD TO THE BALANCE AMOUNT THE SAME WAS ACCEPTED AS INCO ME BY THE ASSESSEE. HOWEVER, IMMEDIATELY THEREAFTER ON 7.3.2008 WHEN A SECOND STATEMENT WAS RECORDED, THE ASSESSEE RETRACTED FROM THE ADMISSION AS ABOVE AND GAVE REASONS FOR RETRACTION AND EXPLAINED THE CONTENTS O F SLIP IN DETAIL. DURING THE ASSESSMENT PROCEEDING ASSESSEE EXPLAINED THAT THE A MOUNTS WRITTEN ON THE PIECE OF PAPER FOUND BELONGS TO 3 INDIVIDUALS INCLU DING THE ASSESSEE WITH AN INTENTION TO BUY LAND AT NAKKAPALLI. WHEN THE IDEA WAS SHELVED THE OTHER TWO INDIVIDUALS HAVE TAKEN BACK THEIR MONEY OF RS.20 LA KHS AND RS.14 LAKHS TO SUBSTANTIATE WHICH THE ASSESSEE HAD FILED THE CONFI RMATION LETTER. IT WAS SUBMITTED THAT THE ASSESSING OFFICER DID NOT EXAMIN E THE VERACITY OF THE ASSESSEES SUBMISSION WHEN THE STATEMENT WAS RECORD ED ON 7.3.2008. FURTHER, THE ASSESSING OFFICER AS WELL AS CIT(A) DI D NOT VERIFY THE SUPPORTING EVIDENCES GIVEN BY THE ASSESSEE WITH REGARD TO THE AMOUNTS CONTRIBUTED BY TWO INDIVIDUALS NAMELY ANNAVARAM RAJU AND K. V. RAJ U. IT WAS SUBMITTED THAT THE CIT(A) WHILE DISPOSING OF THE APPEAL WAS U NDER THE MISTAKEN NOTION THAT SRI I. SATYANARAYANA RAJU AND K.V. RAJU WHO HAV E THEMSELVES HAVE AGRICULTURAL LAND AT NALLIPUDI WHY WOULD BUY THE AG RICULTURAL LAND IN THE SAME VILLAGE. BUT THE FACT IS THE ASSESSEE AND THE OTHE R TWO INDIVIDUALS WERE INTENDING TO PURCHASE LAND AT NAKKAPALLI AND NOT AT NALLIPUDI. IT WAS SUBMITTED THAT THE OBSERVATION MADE BY THE CIT(A) T O THE FACT THAT NAMES OF BOTH RAJUS ARE APPEARING IN IMPOUNDED PAPER MOST PR OBABLY AS FACILITATORS OF TRANSACTIONS SHOWN THAT THE CIT(A) HAS NOT COME TO A CATEGORICAL FINDING ON THE ISSUE. IT WAS SUBMITTED THAT WHEN THE ASSESSEE EXPLAINED THE TRANSACTIONS WHICH WERE APPEARING IN THE SLIP WERE FUNDS BEING PULLED IN FOR PURCHASE OF LAND AND THE SAME WERE RETURNED. THE A SSESSING OFFICER HAS DISMISSED THE CONTENTIONS OF THE ASSESSEE BY A GENE RAL OBSERVATION THAT THE FIGURES NOTED IN THE SLIP DID NOT MATCH WITH THE SU BMISSION. IT WAS SUBMITTED THAT FROM THE CONFIRMATION LETTERS OF THE TWO PERSO NS SUBMITTED BY THE ASSESSEE ALONG WITH THE SUBMISSIONS MADE WOULD SHOW THAT THE ASSESSING ITA NOS.79&80/VIZAG/2012 WESLEY CONSTRUCTIONS, VSKP 8 OFFICER HAS FAILED TO EXAMINE THE EXPLANATIONS OF T HE ASSESSEE IN THE RIGHT PERSPECTIVE AND SOLELY RELIED ON THE FIRST STATEMEN T RECORDED FROM THE ASSESSEE WHERE CONFESSION WAS GIVEN WHILE COMPLETEL Y IGNORING THE SUBSEQUENT STATEMENT RECORDED AND EVIDENCES HAS MAD E THE ADDITION. HE THEREFORE SUBMITTED THAT THE MATTER CAN BE REMITTED TO THE AO FOR VERIFYING AFRESH. 12. THE LD. D.R. ON THE OTHER HAND SUBMITTED THAT T HE ASSESSEE HIMSELF IN THE STATEMENT RECORDED FROM HIM HAS ADMITTED THAT A MOUNT OF RS.5445000/- WAS PAID BY HIM AS PER THE LOOSE SLIP FOUND AT THE TIME OF SURVEY FROM HIM. HENCE WHEN THE ASSESSEE HAS FAILED TO EXPLAIN WITH RELIABLE EVIDENCE THAT HE HAS NOT PAID THE AMOUNT TOWARDS PURCHASE OF LAND TH E ADDITION IS JUSTIFIED. 13. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDER S OF THE REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. IT IS A FACT ON RECORD THAT THE LOOSE SLIP IMPOUNDED FROM THE ASSESSEE AT THE TIME OF SURVEY DID INDICATE PAYMENT OF RS.54,45,000/-. IT IS ALSO A FACT THAT T HE ASSESSEE IN THE STATEMENT RECORDED ON THE DATE OF SURVEY HAS ADMITT ED OF HAVING PAID THE AMOUNT OF RS.54,45,000/- TOWARDS PURCHASE OF THE LA ND. HOWEVER, IT IS ALSO A FACT THAT SUBSEQUENTLY THE ASSESSEE HAS RETRACTED H IS EARLIER STATEMENT AND HAS EXPLAINED THAT AN AMOUNT OF RS.26 LAKHS AND RS. 14 LAKHS WAS RETURNED TO THE OTHER TWO CO-PURCHASERS NAMELY I. SATYANARAYANA RAJU ALIAS ANNAVARAM RAJU AND SRI K.V. RAJU. THE ASSESSEE HAS ALSO FURN ISHED THE CONFIRMATION LETTERS FROM THOSE TWO PERSONS. IT IS THE CONTENTI ON OF THE ASSESSEE THAT THOUGH INITIALLY ASSESSEE ALONG WITH THE AFORESAID TWO PERSONS HAD INTENDED TO PURCHASE THE PROPERTY AT NAKKAPALLI BECAUSE THE GOVERNMENT HAS DECIDED TO HAVE A SEZ BUT SINCE THE GOVERNMENT SUBSEQUENTLY WENT BACK ON ITS PROPOSAL, THE ASSESSEE AND THE OTHER TWO PERSONS SH ELVED THE IDEA OF BUYING THE LAND. THEREFORE, THE AMOUNT OF RS.26 LAKHS AND RS.14 LAKHS CONTRIBUTED BY ABOVE TWO PERSONS WERE RETURNED BACK TO THEM. F URTHER, A REFERENCE TO THE IMPOUNDED MATERIAL A COPY OF WHICH IS AT PAGE 7 SHOWS BOTH RECEIPT AND EXPENDITURE. HENCE, IT IS NECESSARY TO EXAMINE NOT ONLY THE EXPENDITURE BUT ALSO THE RECEIPTS. THEREFORE, CONSIDERING THE TOTA LITY OF THE FACTS AND ITA NOS.79&80/VIZAG/2012 WESLEY CONSTRUCTIONS, VSKP 9 CIRCUMSTANCES OF THE CASE, WE ARE INCLINED TO REMIT THE MATTER BACK TO THE ASSESSING OFFICER WHO SHALL DECIDE THE ISSUE AFRESH AFTER VERIFYING THE NECESSARY DETAILS AND ASSESSEES EXPLANATION. THE ASSESSEE IS AT LIBERTY TO PRODUCE THE NECESSARY EVIDENCE AND FURTHER MATERIAL S FOR SUBSTANTIATING ITS CLAIM THAT HE HAS NOT ACTUALLY MADE PAYMENT OF THE DIFFERENTIAL AMOUNT OF RS. 39 LAKHS. NEEDLESS TO SAY THE ASSESSING OFFICER SHA LL AFFORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE M ATTER. 14. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 6 TH MAR14 SD/- SD/- (J. SUDHAKAR REDDY) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 6 TH MARCH, 2014 COPY TO 1 WESLEY CONSTRUCTIONS, FLAT NO.1, SWARNA RESIDENCY , VADLAPUDI, GAJUWAKA, VISAKHAPATNAM 2 DCIT CIRCLE-5(1), VISAKHAPATNAM 3 THE CIT, VISAKHAPATNAM 4 THE CIT(A), VISAKHAPATNAM. 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM