ACIT, Central Circle-2(4), Hyd, Hyderabad V. Gayatri Projects Ltd., Hyd, Hyderabad

ITA 943/Hyd/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7071 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 16-08-2021
• Assessment Year: 2010-2011
• Appeal Filed On: 22-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S PRAVEENA
• Assessee Lawyers: B SHANTI KUMAR ARS
• Keywords: Unexplained cash credit; Unexplained expenditure; Loose papers; Retrospective amendment; Retraction; TDS
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 1412/HYD/16 2008-09 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(4), HYDERABAD M/S.GAYATRI PROJECTS LIMITED, HYDERABAD [PAN: AAACG8040K] 1413/HYD/16 2009-10 943/HYD/16 2010-11 ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(4), HYDERABAD 944/HYD/16 2011-12 1500/HYD/16 2012-13 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(4), HYDERABAD 1501/HYD/16 2013-14 FOR REVENUE : SMT. S.PRAVEENA, DR FOR ASSESSEE : SHRI MOHAN KUMAR & SHRI B.SHANTI KUMAR, ARS DATE OF HEARING : 16-08-2021 DATE OF PRONOUNCEMENT : 24-08-2021 O R D E R PER S.S.GODARA, J.M. : THESE SIX REVENUES APPEALS FOR AYS.2008-09 TO 2013- 14; IN SERIATIM, ARISE AGAINST THE CIT(A)-12, HYDERABADS SEPARATE ORDERS DT.21-07-2016, 16-03-2016, 17-03-2016 & 21-07 -2016 PASSED IN CASE NOS.0039, 0038, 0278, 0267, 0037 & 0036/2015-16 & 2014-15, INVOLVING PROCEEDINGS U/S.1 43(3) OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]; RESPECTI VELY. HEARD BOTH THE PARTIES. CASE FILES PERUSED. ITA NOS. 1412, 1413, 943, 944, 1500 & 1501/HYD/2016 :- 2 -: 2. IT TRANSPIRES AT THE OUTSET THAT THE REVENUE HAS RAISED I TS IDENTICAL TWIN SUBSTANTIVE GROUNDS SEEKING TO CHALLENG E CORRECTNESS OF THE CIT(A)S ACTION INTER ALIA RESTRICTING DISALLOWANCE OF ASSESSEES CERTAIN IDENTICAL EXPENDI TURE CLAIM PERTAINING TO DUMMUGUDEM PROJECT TO THE TUNE OF RS.15.82 CRORES (IN LEAD CASE ITA NO.943/HYD/2016) TO THE EXTEN T OF 12.5% AND IN DELETING UN-EXPLAINED CREDITS ADDITION OF RS.20,50,99,560/- (INVOLVING VARYING SUM IN ALL THES E SIX ASSESSMENT YEARS); RESPECTIVELY. WE ADVERT TO ITS FORE GOING FORMER SUBSTANTIVE GRIEVANCE AND NOTICE THAT THE CIT(A) S DETAILED LOWER APPELLATE DISCUSSION DELETING THE IMPUG NED ADDITION UNDER CHALLENGE READS AS FOLLOWS: 8.0 ADDITION ON ACCOUNT OF EXPENDITURE INCURRED IN CASH, FOR PAYMENTS MADE ON DUMMUGUDEM PROJECT RS.15,82,00,0 00/-: 8.1 WHILE FINALIZING THE ASSESSMENT ORDER, THE AO H AD OBSERVED THAT THE APPELLANT HAD DRAWN AN AMOUNT OF RS.15.82 CR. F ROM VARIOUS BANK ACCOUNTS, DURING THE PERIOD 02-04-2009 TO 30-0 3-2010, IN THE DENOMINATIONS RANGING FROM 7 LAKHS TO 9 LAKHS ON EA CH OCCASION, WITH THE DESCRIPTION OF PURPOSE AS 'DUMMUGUDEM TAIL POND, PK-8 LABOUR ADVANCE'. AS PER THE AO, THESE AMOUNTS WERE NOT EXPLAINED DURING SURVEY PROCEEDINGS AND WERE NOT SUPPORTED BY BILLS/VOUCHERS AND NO TDS WAS MADE ON SUCH AMOUNTS. DURING THE ASS T. PROCEEDINGS, ONLY SELF-MADE VOUCHERS WERE SHOWN TO HAVE BEEN PRODUCED AND SOME OF THE AMOUNTS WERE ALSO USED FOR PAYMENT AS EXPENSES AGAINST PUBLIC POLICY SUCH AS PENALTY, GRA TUITOUS PAYMENTS ETC. FOR THE SAID REASONS THE AO DISALLOWED THE ENT IRE A MOUNTS OF RS. 15,83,00,000/-, TREATING IT AS UNEXPLAINED EXPENSES . 8.2 THE APPELLANT OBJECTED. FOR SUCH ADDITION AND I T HAS BEEN SUBMITTED THAT THE DISALLOWANCE OF RS.15.82 CR. ALS O FORMS PART OF TOTAL EXPENDITURE ON DUMUGUDEM PROJECT, WHICH HAS B EEN PUT AT RS.37.07 CR., AGAINST WHICH THE AO MADE SEPARATE DI SALLOWANCE OF RS.32.81 CR., WHICH ARE AGITATED SEPARATELY. ON THE ISSUE OF WITHDRAWAL OF RS.15.82 CR., AND TREATMENT OF THE EN TIRE AMOUNT AS UNEXPLAINED EXPENDITURE BY THE AO, THE SUBMISSIONS OF THE APPELLANT RUN AS UNDER: (I) THE AMOUNT OF RS.15.82 CR. CANNOT BE TREATED AS UNEXPLAINED EXPENSES, AS THE SOURCE FOR THE SAID AMOUNTS ARE EX PLAINABLE THROUGH ITA NOS. 1412, 1413, 943, 944, 1500 & 1501/HYD/2016 :- 3 -: BOOKS, WHICH IN TURN RECEIVED FROM GAYATRI RATNA JV , ROUTED THROUGH BANKING CHANNELS, (II) NO FINDING BY AO IN ASST. ORDER, TO SHOW THAT WORK RELATED TO THE ABOVE EXPENDITURE, WAS NOT EXECUTED AND ON CONTRARY , RA BILLS RELEASED BY EE, NSC DIVISION, MIRYALAGUDA, SHOW THE TOTAL VALUE THE WORK DONE AT RS.34.10 CR. (III) AO FAILED TO CONSIDER THE FACT THAT AN AMOUN T OF RS.10.09 CR. WERE PAID TO M/S.MOHAN PROJECTS CONTRACTORS PVT LTD (MPC PL), A SUB- CONTRACTOR AND THE SAME WERE ACCOUNTED IN THEIR BOO KS AND ASSESSED TO TAX. (IV) THE OBSERVATIONS OF THE AO AS REGARDS UNVERIFI ABLE NATURE OF VOUCHERS IN SWEEPING, WITH THE SPECIFIC REFERENCE M ADE TO ONLY FEW BILLS/VOUCHERS. (V) THE DISALLOWANCE OF EXPENSES OF RS.15.82 CR RES ULTS IN ABNORMAL PROFITS ON PROJECT WHICH IS NOT PRACTICAL OR FEASIB LE IN THE LINE OF BUSINESS. ACCORDINGLY, IT WAS CONTENDED BY THE ASSESSEE THAT WITH THE WORK DONE IS NOT DISPUTED, EXPENDITURE NOT DISPROVE D AND SOURCES FOR SAME EXPLAINED, THE DISALLOWANCE IS UNCALLED FOR. 8.3 PERUSED THE SUBMISSIONS OF THE APPELLANT AND TH E BRIEF OBSERVATIONS OF THE AO IN ASST. ORDER. AS COULD BE MADE OUT FROM THE FACTS OF THE CASE, THE APPELLANT SHOWN TO HAVE DRAW N REASONABLY HUGE AMOUNTS IN CASH, FROM VARIOUS BANK ACCOUNTS, W ITH THE INTENTION OF MEETING THE EXPENSES RELATED TO DUMMUGUDEM PROJE CT. SINCE THE AMOUNTS WERE DRAWN IN CASH AND THE EXPENSES NOT SUP PORTED BY REASONABLE DETAILS, THE AO WAS OF THE OPINION THAT THE CLAIM OF ENTIRE AMOUNT AS EXPENSES IS NOT ALLOWABLE. IN THIS REGARD IT MAY BE PERTINENT TO MENTION THAT AN AMOUNT OF RS.10.09 CRO RES WERE SHOWN TO BE GIVEN AS 'ADVANCE TO M/S.MOHAN PROJECTS CONST RUCTIONS PVT LTD (MPCPL) WHICH IS ONE OF THE SUB-CONTRACTORS, WHO AR E ASSESSED TO TAX AND WHAT HAS BEEN CLAIMED AS DIRECT EXPENSE IN HAND S OF THE ASSESSEE COMPANY IS ONLY RS.5.73 CR. IT WAS ALSO SU BMITTED THAT OUT OF RS.15.82 CR., ONLY AN AMOUNT OF RS.9.38 CR. WAS DIRECTLY MET THROUGH ASSESSEE AND RS.3.66 CR. WERE INCURRED THRO UGH M/S.MPCPL WHO SUBMITTED BILLS FOR SAID A UNT OF RS.L0.09 CR. GIVEN AS ADVANCE. FURTHER, WITH THE AMOUNTS OF RS.32.80 CR SHOWN AS T HE EXPENSES FOR DUMMUGUDEM PROJECT, BEEN DISALLOWED BY THE AO SEPAR ATELY, I AM OF THE CONSIDERED OPINION THAT THERE IS NO NEED TO TRE AT THE AMOUNTS OF RS.15.82 CR. AS INCOME SEPARATELY, ON THE GROUND OF DISALLOWANCE OF EXPENSES RELATED TO DUMMUGUDEM PROJECT. ACCORDINGLY , THE ADDITION OF RS.15.82 CR. HELD TO BE UNSUSTAINABLE AS SEPARAT E ADDITION, WITH THE SAID AMOUNTS MERGED WITH DISALLOWANCE OF RS.32. 82 CR., RELATED TO DUMMUGUDEM, WHICH HAS BEEN DISALLOWED ON SAME IS SUE. THUS, THIS GROUND TO THIS EXTENT IS TREATED AS PARTLY ALL OWED. ITA NOS. 1412, 1413, 943, 944, 1500 & 1501/HYD/2016 :- 4 -: 2.1. LEARNED CIT-DR VEHEMENTLY CONTENDED DURING THE CO URSE OF HEARING THAT THE CIT(A) HAS ERRED IN LAW AND ON FAC TS IN DELETING THE IMPUGNED CASH EXPENDITURE ADDITIONS. HER CASE IS THAT THE ASSESSEE HAD FAILED TO PROVE ITS CASH EXPENDITU RE REGARDING DUMMUGUDEM PROJECT DURING THE COURSE OF ASSESSMENT. SHE FAILS TO DISPUTE THAT THE ASSESSING OFF ICERS ASSESSMENT ORDER DT.31-03-2013 HAD ALREADY DISALLOWED THE ASSESSEES ENTIRE EXPENDITURE PERTAINING TO THE VERY PRO JECT TO THE TUNE OF RS.32,18,13,943/- AS BOGUS UNDER A SEPARA TE HEAD. THE CIT(A) THEREFORE HAS RIGHTLY HELD IT TO BE AN INSTANCE OF THE DOUBLE ADDITION APART FROM ALL OTHER FACTUAL AND LEGAL ASPECTS. WE THEREFORE FIND NO MERIT IN THE REVENUES INSTANT FORMER SUBSTANTIVE GRIEVANCE IN ALL THESE APPEALS IN VIEW OF THE FOREGOING CLINCHING REASON(S). THIS IDENTICAL FORMER SUBSTANTIVE GROUND IN THE INSTANT SIX APPEALS STAND DECLINED THEREFO RE. 3. NEXT COMES THE LATTER ISSUE OF UN-EXPLAINED CASH CRE DITS ADDITION OF RS.20,50,99,560/- IN LEAD AY.2010-11 IN ITA NO.943/HYD/2016. WE NOTICE WITH THE ABLE ASSISTANCE OF BOTH THE PARTIES THAT THE CIT(A)S FINDINGS UNDER CHALLENGE H AVE ELABORATELY TAKEN INTO CONSIDERATION THE ASSESSING OFFIC ERS REASONING AS WELL AS THE ASSESSEES SUBMISSIONS AS U NDER: 13.0 ADDITIONS BASED ON ENTRIES IN THE MATERIAL TRA CED AND IMPOUNDED DURING SURVEY PROCEEDINGS RS.20,50,99,5 60/-: 13.1 WHILE FINALIZING THE ASSESSMENT ORDER THE AO M ADE REFERENCE TO THE INFORMATION IN THE DOCUMENTS IMPOUNDED DURING T HE SURVEY PROCEEDINGS CONDUCTED IN THIS CASE ON 30-10-2012. A S PER THE AO, PAGE 5 AND 6 OF ANNEX.A/GPL/01 OF THE IMPOUNDED MAT ERIAL INDICATED THE DETAILS OF RECEIPTS AND PAYMENTS INDI CATED IN CRORES FOR THE PERIOD 10-09-2007 TO 10-08-2012 AND ON VERIFICA TION, THE TRANSACTIONS ARE NOT REFLECTED UNDER ANY HEAD OF AC COUNTS. VIDE THE SHOW CAUSE NOTICE DTD.05-02-2013, THE ASSESSEE WAS ASKED TO EXPLAIN THE RELEVANCE OF SAID INFORMATION, WHICH WE RE TREATED AS ITA NOS. 1412, 1413, 943, 944, 1500 & 1501/HYD/2016 :- 5 -: ROUGH PAPERS BY THE ASSESSEE AND WHY THE SAME CANNO T BE RELIED UPON. IN ABSENCE OF ANY REASONABLE EXPLANATION FROM THE ASSESSEE THE AO DEPENDED ON THE ANALYSIS OF THE ENTRIES IN I MPOUNDED MATERIAL AND ARRIVED AT CONCLUSIONS THAT THERE ARE VARIOUS ENTRIES WHICH WERE VERIFIABLE FROM ACCOUNTS. IN THE PROCESS , SOME OF THE DETAILS/AMOUNTS, AS REFLECTED UNDER THE HEAD 'OTHER RECEIPTS', WERE ANALYSED AND IN ABSENCE OF THE REASONABLE OR NO EXP LANATION FROM THE ASSESSEE, THE AO TREATED THE AMOUNTS AS UNEXPLAINED CREDITS. THE AMOUNTS TREATED AS UNEXPLAINED CREDITS, ON THESE LI NES ARE RS.0.75 CRORES, AS APPEARED AGAINST THE INDICATION/DESCRIPT ION OF 'SLP' AND RS.0.51 CRORES AGAINST THE CAPTION, 'SLP' MD SIR HO USE', FOR WHICH THE CONTENTION OF THE APPELLANT WAS THAT AO COULD NOT G IVE A CLEAR FINDING AS TO WHICH SITE PAYMENTS THE AMOUNTS OF RS.1.26 CR ORES RELATE TO, AS ALL SITE PAYMENTS HAVE BEEN PROPERLY ACCOUNTED. THE NEXT ITEM UNDER EXAMINATION WAS RS.9.51 CRORES, STANDING AGAINST NA ME OF GAYATRI TELESOFT AND THE ASSESSEE'S EXPLANATION WAS THAT DU RING 2007-08 AND 2008-09, .M/S.GPL ADVANCED CERTAIN AMOUNTS TO M /S.MOHAN PROJECTS LTD WHICH IN TURN GIVEN AMOUNT OF RS.10.58 CRORES TO GAYATRI STAR KHEM, HOWEVER THIS EXPLANATION WAS NOT ACCEPTA BLE TO THE AO. HENCE, AO TREATED THE AMOUNT AS UNEXPLAINED CREDIT. SIMILARLY, THERE ARE TWO OTHER ENTRIES FOR AMOUNTS OF RS.37.09 CRORE S AGAINST THE DESCRIPTION OF 'SLP' AND RS.15.09 CRORES, AGAINST ' OTHER SITE FUNDS UTILIZED BY GPL'. WHILE TREATING THESE AMOUNTS AS U NEXPLAINED INCOME OF THE ASSESSEE, THE AO WORKED OUT THE RATIO OF THE TOTAL AMOUNTS OF FUNDS MENTIONED IN IMPOUNDED DOCUMENT, WITH THAT OF THE TURNOVER FOR THE YEAR TO THE TURNOVERS FOR PERIOD OF 5 YEARS UNDER REFERENCE AND ARRIVED AT A FIGURE OF 18.42% AND APPLIED THE SAID FORMULA/RATIO A PART/PORTION OF THE AMOUNTS OF RS.37.09 CRORES UNDE R HEAD SLP AND RS.15.09 CRORES UNDER HEAD OTHER SITE FUNDS UTILIZE D BY GPL, TO ARRIVE AT THE DISALLOWANCES TO THE EXTENT OF RS.6.83 CRORE S AND RS.2.90 CRORES, RESPECTIVELY. THE TOTAL ADDITION MADE BASED ON IMPOUNDED DOCUMENTS, THUS TOTALLED TO RS.2050.99 LAKHS (126.0 0 + 951.00 + 683.00 + 290.99 LAKHS). 13.2 THE APPELLANT OBJECTED FOR SUCH DISALLOWANCES/ ADDITIONS AND IT HAS BEEN BROADLY SUBMITTED THAT THE AO ERRED IN TAK ING COGNIZANCE OF TWO UNSIGNED IMPOUNDED PAPERS WHICH HAVE NO EVIDENT IARY VALUE UNDER LAW. IT WAS ALSO CONTENDED AND EXPLAINED THAT THE LOOSE SHEETS WERE MERELY A DISCUSSION PAPER PREPARED FOR THE INF ORMATION OF THE MANAGEMENT AND IT WAS MERELY AN INFLOW AND OUTFLOW OF FUNDS FOR THE PERIODS MENTIONED THERE IN. IT WAS CONTENDED AN D SUBMITTED THAT THE FIGURES MENTIONED IN THESE PAPERS WERE NOT ACTU AL FIGURES BUT ROUGH FIGURES ROUNDED OFF AND WHEREVER CERTAIN FIGU RES LIKE INCREASE IN BANK LOANS ETC WERE AVAILABLE IT WAS TAKEN ON TH E BASIS OF INCREASE IN THEIR LIMITS AND THE HEADINGS WERE CONVENIENTLY GROUPED UNDER RECOGNIZABLE HEADS FOR EASY UNDERSTATING OF THE MAN AGEMENT. IT WAS CONTENDED BY THE ASSESSEE THAT THE AO DISREGARDED T HE EXPLANATION ITA NOS. 1412, 1413, 943, 944, 1500 & 1501/HYD/2016 :- 6 -: AND PROPOSED TO MAKE CERTAIN WHIMSICAL ADDITIONS WH ICH WERE ON BASIS OF PRESUMPTIONS, BUT NOT SUPPORTED BY ANY FAC TS OR FIGURES. 13.2.1 REGARDING THE EVIDENTIARY VALUE OF THE MATER IAL! INFORMATION/ DOCUMENTS FOUND DURING SURVEY/SEARCH PROCEEDINGS, I T HAS BEEN SUBMITTED BY THE ASSESSEE THAT SUCH DOCUMENTS HAVE TO BE INTERPRETED LITERALLY AND NOTHING CAN BE ADDED OR S UBTRACTED AND THE UNSIGNED PAPERS IN THIS CASE CANNOT BE DIRECTLY ATT RIBUTED TO ASSESSEE AND ADDITIONS CANNOT BE MADE BASED ON THEM. IT WAS ALSO CONTENDED AND ARGUED THAT THE LOOSE SLIPS FOUND DURING THE SU RVEY ARE ONLY CIRCUMSTANTIAL EVIDENCES AND THERE SHOULD BE COGENT MATERIAL TO SUBSTANTIATE SUCH LOOSE SLIPS, FOR MAKING ADDITIONS . IN THIS REGARD, THE AO RELIED ON THE DECISIONS OF ITAT, HYDERABAD, IN THE CASE OF ITO VS HARLLMARK CONSTRUCTIONS, ITA NO.694/HYD/2009, 13.2.2 IT WAS ALSO SUBMITTED AND CONTENDED THAT TAX HAS TO BE COLLECTED ON REAL BUT NOT ON HYPOTHETICAL INCOME AN D UNLESS THE ENTRIES IN SEIZED OR IMPOUNDED DOCUMENTS ARE INDEPE NDENTLY CORROBORATED WITH CONTEMPORANEOUS RECORD, NO ADVERS E VIEW CAN BE TAKEN BY THE ASSESSING AUTHORITIES. IT WAS ALSO CON TENDED THAT, AO HAS NOT BROUGHT ON RECORD ANY CORROBORATIVE MATERIA L OR EVIDENCE TO SHOW THAT INFERENCES DRAWN BY HIM ON BASIS OF ENTRI ES IN LOOSE SHEETS ARE CORRECT. IN THIS REGARD, THE ASSESSEE RELIED ON THE SEVERAL DECISIONS OF ITAT, HYDERABAD. THE APPELLANT ALSO CO NTENDED THAT AO MADE HUGE ADDITIONS ON THE BASIS OF ENTRIES IN TWO LOOSE SHEETS, WHICH ARE NOTHING BUT DUMB DOCUMENTS AND FAILED TO SUBSTANTIATE THE BASIS FOR ADDITION, AS THERE IS NO CORROBORATIVE EV IDENCE TO SUPPORT SUCH ADDITIONS AND AO HAVE NOTHING' TO DO EXCEPT TO MATCH WHATEVER DATA AVAILABLE. 13.3 AS REGARDS TO THE ADDITIONS MADE ON THE BASIS OF ENTRIES IN LOOSE SHEETS, AS 'UNEXPLAINED CREDITS', IT HAS BEEN SUBMI TTED THAT THERE IS NO PROVISION IN THE INCOME TAX ACT TO MAKE ADDITIONS U NDER THE HEAD 'UNEXPLAINED CREDIT' EXCEPT UNDER SEC.68 AND UNDER NO STRETCH OF IMAGINATION, THE LOOSE SHEETS FOUND AND IMPOUNDED I N THIS CASE, CAN BE CONSIDERED AS BOOKS OF ACCOUNT, AS SUCH THE PROV ISIONS OF SEC.68 ARE NOT APPLICABLE TO THE FACTS OF THE CASE. IT WAS ALSO CONTENDED THAT ENTRIES RELATING TO SUMS MUST BE CREDITED IN TO BOO KS MAINTAINED BY ASSESSEE ANC THE ENQUIRIES BY THE AO MUST LEAD TO T HE SOURCES FOR SUCH CREDITS, SO AS TO BE DECIDED AS UNEXPLAINED OR OTHERWISE AND TREAT IT AS INCOME FROM OTHER SOURCES AS PER THE PR OVISIONS OF SEC.68, IN CASE NO EXPLANATION IS FORTHCOMING FROM ASSESSEE S OR THE EXPLANATION OFFERED IS NOT ACCEPTABLE TO THE AO. IN CASE OF ASSESSEE UNDER REFERENCE, IT WAS CONTENDED THAT NEITHER CORR OBORATIVE EVIDENCE WAS BROUGHT ON RECORD NOR ANY ENQUIRIES WERE MADE B Y THE AO TO ASCERTAIN THE INCOMES THAT HAVE THE CONNOTATION OF UNEXPLAINED CREDITS AND IN FACT THE ASSESSEE HAS EXPLAINED THE CONTENTS OF LOOSE SHEETS, AS AD HOC CASH FLOW STATEMENT PREPARED FOR CERTAIN PERIOD, ITA NOS. 1412, 1413, 943, 944, 1500 & 1501/HYD/2016 :- 7 -: COMPRISING MORE THAN AN YEAR FOR THE GUIDANCE/BENEF IT OF THE MANAGEMENT. IT WAS ALSO CONTENDED THAT THE AP HAS C ONVENIENTLY IGNORED THE MAJOR CONTENTS OF THE LOOSE SHEETS AND DREW ADVERSE INFERENCE FROM FEW OF THE ENTRIES, FOR MAKING THE T OTAL ADDITIONS OF RS.20.51 CRORES, ON THIS COUNT. WHILE ELABORATING O N THE ADDITIONS ON EACH OF THE ITEM UNDER REFERENCE THE APPELLANT SUBM ITTED AS UNDER: 13.3.1 REGARDING THE ADDITION OF RS.1.26 CRORES, ON ACCOUNT OF ENTRIES IN LOOSE SHEETS, BEING TREATED AS UNEXPLAINED CREDI TS, BEING AGGREGATE OF TWO ENTRIES ON PAGE 6 OF LOOSE SHEETS, WITH THE AMOUNTS OF RS.0.75 CRORES AND RS.0.51 CRORES, WITH THE NARRATION OF 'S LP FUNDS', IT HAS BEEN SUBMITTED THAT IT WAS PART OF THE INVESTMENT S TATEMENT PREPARED FOR THE PERIOD 10-9-2007 TO 10-8-2012, RELATABLE TO THE COMPANY WITH PAGE 5 INDICATING OUTFLOW OF FUNDS AND PAGE 6 SHOWI NG THE RECEIPT OF FUNDS AND THE AO INTERPRETED THEM AS SITE PAYMENTS THAT ARE NOT ACCOUNTED WITHOUT POINTING TO WHICH SITE THEY BELON G TO, WITH ALL THE EXPENSES AT SITES ARE PROPERLY ACCOUNTED BY THE ASS ESSEE. 13.3.2 REGARDING THE AMOUNT OF RS.9.51 CRORES SHOWN AGAINST THE NAME OF M/S.GAYATRI TELESOFT, IT WAS SUBMITTED THAT THE LOOSE SHEETS FOUND ARE ROUGH ESTIMATES OF CASH FLOW STATEMENTS I N WHICH THE SAID AMOUNTS WERE REPRESENTING THE AMOUNT RECEIVED BACK BY THE COMPANY, THROUGH THE OTHER GROUP CONCERNS SUCH AS M /S.MOHAN PROJECTS CONTRACTOR PVT LTD, M/S.GAYATRI STAR KHEM, WHICH WERE LENT ORIGINALLY AND THE NAME OF M/S.GAYATRI TELE SOFT WA S WRONQLY TAKEN. WITH BOOKS ACCOUNTED, AMOUNTS ESTABLISHED TO BE BEL ONGING TO EARLIER PERIODS, THERE IS NO BASIS FOR THE ADDITIONS WITHOU T CONDUCTING FURTHER ENQUIRIES, AS PER THE APPELLANT. 13.3.3 AS REGARDS TO THE AMOUNT OF RS.37.09 CRORES WHICH WAS MARKED AS 'SLP' OUT OF WHICH AN AMOUNT OF RS.6.83 C RORES WAS TREATED AS UNEXPLAINED INCOME, BY THE AO ON PROPORT IONATE BASIS, IT HAS BEEN SUBMITTED BY THE ASSESSEE THAT THE AMOUNTS REPRESENT THE NET BALANCE AMOUNT OF EQUIPMENT LOANS OBTAINED FROM SREI FINANCE FOR A PROJECT SPECIFIC WORKS, DURING THE PERIOD OF 2010-11 AND 2011-12. IT WAS ALSO EXPLAINED THAT AN AMOUNT OF RS .5.78 CRORES REPRESENTING INTEREST BUT WAS WRITTEN AS 5.82 CRORE S IN LOOSE SHEET AND THE MATCHING VALUE OF ASSETS TREATED AS UNEXPLA INED, WERE NOT REFLECTED IN BOOKS, AS THE SAME ARE LEASED ASSETS A ND THE AO REJECTED THE SAID EXPLANATION OF THE ASSESSEE SUMMARILY AND APPLIED A FORMULA WHICH WAS NEITHER EXPLAINED NOR HAVE ANY BA SE AND TREATED 18.42% OF SUCH AMOUNTS (37.09 CRORES) AND ARRIVED A T FIGURE OF RS.6.83 CRORES AS UNEXPLAINED INCOME OF THE ASSESSE E FOR THE YEAR UNDER REFERENCE, NOTWITHSTANDING THE FACT THAT SUCH AMOUNTS NOT FALLING IN ONE YEAR. 13.3.4 REGARDING THE AMOUNTS OF RS.15.80 CRORES WHI CH WAS MENTIONED AS 'OTHER SITE FUNDS UTILIZED BY GPL' IT WAS EXPLAINED THAT THESE AMOUNTS WERE RECEIVED BY THE ASSESSEE COMPANY (GPL) FROM ITA NOS. 1412, 1413, 943, 944, 1500 & 1501/HYD/2016 :- 8 -: THEIR SITES DURING LAST 5 YEARS AND IT IS DIFFICULT TO IDENTIFY THE SAID TRANSACTIONS, AS THE TOTAL TRANSACTIONS RUNNING IN TO THOUSAND OF CRORES EVERY YEAR AND THIS EXPLANATION OF THE ASSES SEE WAS REJECTED AND ADDITION MADE ON PROPORTIONATE BASIS (18.42%) A ND TO ARRIVE AT THE FIGURE OF RS.2,90,99,560/-, AS UNEXPLAINED CRED IT/INCOME OF THE APPELLANT FOR THE YEAR UNDER REFERENCE, WHICH IS NO THING BUT BASED ON AN HYPOTHESIS BUT NOT ON FACTS. IN THIS REGARD, THE APPELLANT RELIED ON CERTAIN JUDICIAL DECISIONS. 13.4 THE APPELLANT ALSO CONTENDED AND SUBMITTED THA T AO ERRED IN MAKING ADDITIONS BASED ON FORMULA OF 18.42% WORKED OUT ON PROPORTIONATE TURNOVERS OF 5 YEARS, WITH THAT OF TU RNOVERS FOR THE YEAR, WHICH ARE IN TURN BASED ON MERE SURMISES AND CONJEC TURES WITHOUT INVOLVEMENT OF LAW OR ACCOUNTANCY. THE APPELLANT FU RTHER CONTENDED THAT THE AO FAILED TO CONSIDER THE PAST RECORD OF T HE ASSESSEE- COMPANY AND COMPARABLE COMPANIES IN SIMILAR BUSINES S BEFORE RESORTING TO HUGE ADDITIONS. IT WAS ALSO HIGHLIGHTE D AND SUBMITTED BY THE APPELLANT THAT AO FAILED TO EXPLAIN WHY ONLY 4 ITEMS WERE CHOSEN TO TAX, OUT OF MANY ITEMS OF EXPENSES AS REFLECTED IN THE LOOSE SHEETS OF THE IMPOUNDED MATERIAL AND THERE WAS NO APPLICAT ION OF MIND BY THE AO AS SUCH THE ADDITIONS MADE TO THE EXTENT OF RS.20.51 CRORES, BASED ON THE ENTRIES IN LOOSE SHEETS IMPOUNDED ARE PLEADED FOR DELETION. 13.5 PERUSED THE SUBMISSIONS OF THE APPELLANT AND T HE OBSERVATIONS OF THE AO IN ASSESSMENT ORDER 'AND THE INFORMATION BROUGHT ON RECORD. AS COULD BE MADE OUT FROM THE FACTS OF THE CASE, THERE WAS A SURVEY CONDUCTED IN THIS CASE ON 03-10-2012, DURING WHICH CERTAIN INFORMATION/DOCUMENTS IN THE FORM OF LOOSE SHEETS W ERE SHOWN TO HAVE FOUND AND IMPOUNDED AS ANNEXURE AI/GPL/01 AND PAGE NO.5 AND 6 WERE NOTEWORTHY AMONG THEM. THE AO HAD SELECT IVELY ANALYSED FEW ENTRIES OF THE LOOSE SHEETS AND ARRIVE D AT CERTAIN CONCLUSIONS TO TREAT SOME ENTRIES EITHER AS UNEXPLA INED CREDITS OR THE UNEXPLAINED INCOME. THE AMOUNTS AS REFLECTED AT PAG E 6 OF IMPOUNDED MATERIAL WERE BASICALLY INDICATING THE AM OUNTS AS 'INVESTMENT STATEMENT, UNDER THE NAME OF M/S.GAYAT RI PROJECTS LTD (IN SHORT GPL) FOR THE PERIOD 10-9-2007 TO 10-8-201 2, WHICH IS APPARENTLY FOR A PERIOD OF NOT LESS THAN 5 YEARS SP ANNING OVER 6 FINANCIAL YEARS FROM 2007-08 TO 2012-13. THE TOTAL FUNDS/AMOUNTS INVOLVED FOR THE SAID PERIOD WERE SHOWN AT RS.2051. 45 CRORES, INDICATED UNDER MAIN HEAD 'RECEIPTS' BUT DIVIDED UN DER VARIOUS SUBHEADS SUCH AS (I) WORKING CAPITAL LIMITS - RS.45 1.00 CRORES (II) TERM LOANS FROM BANKS - RS.425.00 CRORES (III) OTHE R LOAN FUNDS - RS.114.00 CRORES (IV) OTHER GROUP COMPANIES RS.443. 77 CRORES (V) FUNDS RECEIVED FROM SITES _ RS.508.35 CRORES AND (V I) OTHER RECEIPTS - RS.109.33 CRORES. WHILE IGNORING THE FUNDS SHOWN UN DER FIRST FIVE HEADS ( I TO V), THE AO HAD PICKED UP THE ONLY ENTR IES FALLING UNDER THE HEAD 'OTHER RECEIPTS', WHICH ARE ENUMERATED AS UNDE R: ITA NOS. 1412, 1413, 943, 944, 1500 & 1501/HYD/2016 :- 9 -: A) SLP - RS.37.09 B) TRUST FUNDS - RS.23.64 C) OTHER SITE FUNDS UTILIZED BY GPL - RS.15.80 D) PIONEER BUILDERS - RS.9.81 E) GAYATRI TELESOFT LTD - RS.9.51 F) ESSAR PROJECT - RS.6.00 G) SUD REDDY - RS.5.00 H) YLMC CLAIMS RELEASE - RS.1.15 I) SLP FUNDS - RS.0.75 J) SLP MD SIR HOUSE - RS.0.51 ------------------ RS.109.33 CRORES ------------------- 13.5.1 AS COULD BE SEEN FROM THE INFORMATION BROUGH T ON RECORD, THIS WAS NOT PUT TO THE ASSESSEE DURING THE SURVEY PROCE EDINGS AND AN EXPLANATION WAS SOUGHT FROM THE ASSESSEE ONLY DURIN G THE ASSESSMENT PROCEEDINGS, VIDE THE SHOW CAUSE NOTICE DTD.05-02-2013 AND THE ASSESSEE'S REPLY REGARDING THE SAME WAS THA T THE INFORMATION IN SHEETS WAS COMPLIED/PREPARED TO IMPR ESS THE MANAGEMENT WITH THE FIGURES FOR 5 YEARS SPANNING TH E PERIOD REFERRED IN DOCUMENTS, WITH ADJUSTMENTS MADE, TO LAST TWO DE CIMAL PLACES. HOWEVER, BASED ON THE NOMENCLATURE OF THE ENTRIES I N LOOSE SHEETS AND THE COMPANY'S NAME INDICATED THERE IN, AO WAS O F THE OPINION THAT SOME OF THE ENTRIES ARE VERIFIABLE FROM ACCOUN TS, AS SUCH THE EVIDENTIARY VALUES OF THE PAPERS/LOOSE SHEETS, CANN OT BE BRUSHED ASIDE AND EVEN IF THE AMOUNTS ARE APPROXIMATE, THE NATURE OF ENTRIES REQUIRED AN EXPLANATION FROM THE ASSESSEE AS SUCH T HE AO RESORTED TO HIS OWN ANALYSIS OF THE AMOUNTS AND TREATED THE AMO UNTS AS UNEXPLAINED CREDITS. FURTHER, THE AMOUNTS OF RS.9.5 1 CRORES STANDING AGAINST THE NAME OF M/S.GAYATRI TELE SOFT LTD WERE TREATED AS UNEXPLAINED CREDITS IN ABSENCE OF EXPLANATION ACCEP TABLE TO THE AO. FURTHER, THE AMOUNTS STANDING UNDER THE HEAD 'SLP', TO THE EXTENT OF RS.37.07 CRORES AND RS.15.80 CRORES UNDER THE HEAD 'OTHER SIDE FUNDS UTILISED BY GPL', WERE SUBJECTED TO DISALLOWA NCE, ON THE PROPORTIONATE BASIS OF TOTAL TURNOVER OF THE YEAR, TO THE TURNOVERS FOR THE PERIOD (5 YEARS) UNDER REFERENCE. THUS, THE ADD ITIONS UNDER THE TWO HEADS WERE TO THE EXTENT OF RS.6.83 CRORES (18. 42% OF RS.37.09 CRORES) AND RS.2.90 CRORES (18.12% OF RS.15.80 CROR ES). 13.6 THUS, AS COULD BE SEEN FROM THE RECORD, THE AS SESSING OFFICER HAD CHOSEN FEW FROM LOOSE SHEETS WITHOUT INDICATING THE BASIS FOR SUCH ISOLATION AND SELECTIVE PICKING. NO REASONS WE RE INDICATED AS REGARD TO THE PICKING AND ANALYSIS OF FEW ENTRIES A S AGAINST MANY ENTRIES EMBEDDED IN THE LOOSE SHEETS UNDER REFERENC E AND NO VALID REASONS WERE GIVEN FOR ARRIVING AT SUCH CONCLUSIONS . FURTHER, EVEN ITA NOS. 1412, 1413, 943, 944, 1500 & 1501/HYD/2016 :- 10 -: AMONG THE MINOR HEAD OF 'OTHER RECEPTS' (FEW 4) ENT RIES WERE ONLY SELECTED AS INDICATED ABOVE, WHILE IGNORING THE BAL ANCE (6) ENTRIES. THUS, 'THE BASIS ADOPTED BY THE AO IN ARRIVING AT G IVEN CONCLUSIONS FOR MAKING THE DISALLOWANCES APPEAR ARE NOT FULLY R ELIABLE SINCE NO UNIFORM APPROACH WAS SHOWN AS SUCH THE ADDITIONS AR E HELD TO BE NOT JUSTIFIED, ON FACTS. FURTHER, THE AMOUNTS AS ME NTIONED IN THE LOOSE SHEETS WERE NOT PERTAINING TO ONE YEAR, BUT RELATAB LE TO 5 TO 6 YEARS, AS INDICATED. THUS, BASED ON THE SAID FACTS, THE AD DITIONS MADE ON ACCOUNT OF UNEXPLAINED CREDITS TO THE EXTENT OF RS. 1.26 CRORES FOR THE YEAR, BASED ON THE ENTRIES RELATABLE TO MORE THAN A N YEAR, WITHOUT BIFURCATING THE FIGURES/AMOUNTS TO THE RESPECTIVE Y EARS, IS NOT JUSTIFIED AND HELD TO BE ARBITRARY. EVEN FOR THE AD DITIONS OF RS.6.88 CRORES AND RS.2.90 CRORES, OUT OF THE FUNDS REFERRE D AS SLP AND OTHER FUNDS UTILISED BY GPL, RESPECTIVELY, THE BASIS ADOP TED BY THE AO ON PROPORTIONATE BASIS, IS ONLY AN ASSUMPTION AND DOES NOT APPEAL TO A LOGIC OR REASON. THE FORMULA APPLIED BY THE AO, APP EARS BASED ON THEORIES, WITHOUT BEING SUPPORTED BY FACTS OR SOLID REASONS. SAME IS THE CASE WITH THE ADDITION OF RS.9.51 CRORES STANDI NG AGAINST THE NAME OF M/S.GAYATRI TELE SOFT LTD. 13.6.1 IN THIS CASE, IT IS NOT ONLY THE BASIS FOR S ELECTING THE FEW ENTRIES OF LOOSE SHEETS FOR MAKING THE ADDITION, BUT ALSO T HE VALIDITY OF INFORMATION THAT WAS FOUND DURING THE SURVEY PROCEE DINGS AND PUT TO USE AGAINST THE ASSESSEE, IN THE ASSESSMENTS, IS IN QUESTION. IT WAS SUBMITTED BY THE ASSESSEE AND APPEARS TO BE FACT TH AT SUCH IMPOUNDED MATERIAL WAS NEVER EXAMINED DURING THE SU RVEY PROCEEDINGS, TO ASCERTAIN IT'S RELEVANCE OF THE CON TENTS, TO THE COMPANY, VIS-A-VIS THE BOOKS OF ACCOUNT MAINTAINED FOR THE YEARS UNDER REFERENCE. FURTHER, THE DOCUMENTS UNDER REFER ENCE, RELIED UPON BY THE AO FAILED TO CONTROVERT THE SUBMISSIONS OF T HE ASSESSEE THAT THE STATEMENTS PREPARED WERE FALLING IN TO 5 YEARS FOR THE PERIOD FROM 10-092007 TO 10-08-2012 AND WAS PREPARED FOR SOME V AGUE PURPOSE OF IMPRESSING THE MANAGEMENT. NO FURTHER ENQUIRIES WERE MADE BY THE AO AS REGARD TO THE RELEVANCE OF ENTRIES IN THE BOOKS OF THE ASSESSEE FOR RELEVANT ASST.YEARS UNDER REFERENCE, E XCEPT TO SAY THAT SOME OF THE ENTRIES ARE VERIFIABLE WITH BOOKS. UNDE R THE CIRCUMSTANCES, THE BASIS ADOPTED BY THE AO WHICH IS A LOOSE SHEET, WITHOUT ANY FURTHER CORROBORATIVE INFORMATION OR EV IDENCE EITHER FOUND OR BROUGHT ON RECORD, MAY ONLY BE TREATED AS HYPOTH ETICAL AND NOT BASED ON SUBSTANTIVE EVIDENCE. THE DOCUMENTS WHICH ARE NOT SUPPORTED BY CORROBORATIVE OR RELATED INFORMATION O R EVIDENCE MAY ONLY BE TREATED AS A DUMB DOCUMENT AND THE CASE LAW S RELIED UPON BY THE ASSESSEE IN THIS REGARD, SUPPORT THEIR CAUSE . IN THIS REGARD, IT MAY BE RELEVANT TO REFER TO THE JUDICIAL DECISIONS, ON THE SIMILAR FACTS. IN CASE OF ITO VS HALLMARK CONSTRUCTIONS (IN ITA NO .694/HYD/2009) HON'BLE ITAT, HYDERABAD OBSERVED THAT LOOSE SLIPS F OUND DURING THE COURSE OF SURVEY ARE ONLY CIRCUMSTANTIAL EVIDENCE A ND THERE SHOULD ITA NOS. 1412, 1413, 943, 944, 1500 & 1501/HYD/2016 :- 11 -: BE COGENT MATERIAL TO SUBSTANTIATE THE LOOSE SLIPS AND IT IS VERY IMPORTANT TO HAVE DIRECT OR CONCLUSIVE EVIDENCE TO DETERMINE INCOME AND THE AO COULD MAKE ADDITIONS ON THE BASIS OF DIR ECT EVIDENCES ON HAND. IN THE CASE UNDER REFERENCE, THERE WAS NO SUC H DIRECT EVIDENCE OR INFORMATION THAT WAS HELPFUL TO THE AO FOR MAKIN G THE ADDITIONS FOR THE YEAR UNDER REFERENCE. FURTHER, THE INFORMATION UNDER REFERENCE WAS RELATABLE TO MORE THAN 5 YEARS AND NO BIFURCATI ON COULD BE MADE FOR EACH OF THE YEAR, TO VERIFY THE SAME WITH REFER ENCE TO THE BOOKS, TO DETERMINE WHETHER THE AMOUNTS REFLECTED THERE IN AR E TRULY RELATABLE TO THE ASSESSEE AND TO THE ASST. YEAR CONCERNED AND ALSO WHETHER ACCOUNTED IN BOOKS OR NOT. UNDER THE CIRCUMSTANCES, THE INFORMATION IN LOOSE SHEETS WERE HELD TO BE UNRELIABLE FOR MAKI NG THE ADDITIONS FOR THE YEAR, THAT TOO WITHOUT MAKING ANY FURTHER REFER ENCE TO THE BOOKS OF ACCOUNT. IN THIS CONTEXT, IT MAY NOT BE OUT OF C ONTEXT TO OBSERVE THAT TAX HAS TO BE COLLECTED ON REAL INCOME BUT NOT ON H YPOTHETICAL INCOME. IN THIS CASE, THE ENTRIES IN LOOSE SHEETS ARE NOT C ORROBORATED BY CONTEMPORANEOUS RECORD, AS SUCH NO ADVERSE VIEW CAN BE TAKEN BY THE AO. FURTHER, IT WAS NOT ESTABLISHED WHETHER THE LOOSE SHEETS REPRESENT BOOKS OF THE ASSESSEE, WITHOUT BRINING AN Y CORROBORATIVE EVIDENCE ON RECORD AND WITHOUT RELATING THE ENTRIES OF LOOSE SHEETS TO THE YEAR UNDER REFERENCE AS SUCH RESORTING TO ADDIT IONS AS PER PROVISIONAL OF SEC.68 ARE NOT JUSTIFIED. ON SIMILAR BASIS THE AMOUNTS UNDER VARIOUS HEADS COULD NOT BE ESTIMATED AND TREA TED AS UNEXPLAINED INCOMES. FURTHER, IN ABSENCE OF ANY IND EPENDENT EVIDENCE BROUGHT ON RECORD BY THE AO TO DEMOLISH TH E CONTENTIONS OF THE ASSESSEE, IT IS REASONABLE TO HOLD THAT THE ADD ITIONS MADE ON THE UNSUBSTANTIATED INFORMATION ARE NOT SUSTAINABLE AND DO NOT HAVE LEGS TO STAND. UNDER THE CIRCUMSTANCES AND BASED ON FACT S OF THE CASE, THE ADDITION OF RS.20.51 CRORES (RS.0.75+0.51+9.51+6.83 +2.90) BASED ON ENTRIES IN LOOSE SHEETS ARE ORDERED TO BE DELETED. THE GROUNDS RELATABLE TO THE SAID ADDITIONS, THUS, ARE TREATED AS ALLOWED. 3.1. LEARNED CIT-DRS VEHEMENT CONTENTION BEFORE US IS THAT THE ASSESSING OFFICER HAD RIGHTLY MADE THE IMPUGNED AD DITION ON ACCOUNT OF ASSESSEES FAILURE TO EXPLAIN IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE CORRESPONDING CREDITOR PARTIES WHICH COULD SUFFICIENTLY THROW LIGHT O N SOURCE OF THE SUM IN ISSUE. SHE FURTHER INVITED OUR ATTENTION TO THE ASSESSEES MANAGING DIRECTOR, SHRI T.V.SANDEEP REDDY SURVEY STATEMENT DT.03-10-2012 ADMITTING THE CORRESPONDING ENTRIE S IN THE IMPOUNDED DOCUMENT PG.5 AND 6 OF THE IMPOUNDED ITA NOS. 1412, 1413, 943, 944, 1500 & 1501/HYD/2016 :- 12 -: DOCUMENT AS REPRESENTING INVESTMENTS AND LOANS ON EST IMATE BASIS TO THIS EFFECT. 3.2. LEARNED AUTHORISED REPRESENTATIVES STRONGLY DEFE NDED THE CIT(A)S FOREGOING DETAILED FINDINGS INTER ALIA ON THE GROUND THAT THE FOREGOING IMPOUNDED DOCUMENT IS ONLY A LOOSE S HEET INVOLVING ROUGH NOTINGS AND DOCUMENTS AND THEREFORE, I T IS LIABLE TO BE TREATED AS A DUMB ONE ONLY. LEARNED COUN SEL FURTHER TOOK US TO THE IMPUGNED DOCUMENT THAT THE SAME WAS A MERE ESTIMATION AND THE ASSESSEES BOOKS HAD NOWHERE BEEN CREDITED QUA THE CORRESPONDING VARYING AMOUNTS IN ALL THESE ASSESSMENT YEARS. 3.3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVA L CONTENTIONS AND FIND FORCE IN THE REVENUES STAND. THIS ASSESSEE IS ADMITTEDLY A COMPANY ENGAGED IN CONSTRUCTI ON AND BUILDING OF INFRASTRUCTURE PROJECTS/FACILITIES. THE DE PARTMENT HAD CARRIED OUT THE SURVEY IN QUESTION DT.03-10-2012 A T ITS PREMISES. IT CAME ACROSS THE ALLEGED IMPOUNDED DOCUM ENT FORMING PART OF CASE RECORDS BEFORE US AS ANNEXURE-I (PAGES.158-159 IN THE PAPER BOOK. THIS CRUCIAL DOCUM ENT FOUND AT ASSESSEES PREMISES DURING SURVEY MAKES IT C LEAR THAT IT IS IN THE NATURE OF ASSESSEES INVESTMENT STATEME NT FROM 10-09-2007 TO 10-08-2012 WHEREIN IT HAD DULY RECORDED PAYMENT, FUND TRANSFERS, SITE PAYMENTS INVOL VING GROUP COMPANIES, OTHER PAYMENTS AND ADMINISTRATIVE EXPENSES ALONG WITH WORKING CAPITAL LIMITS, TERM LOANS FROM BANKS OTHER LOANS FUNDS, OTHER GROUP COMPANIES FUNDS RECEIVED FROM SITES AND OTHER RECEIPTS INDICATING VA RYING SUMS. ITA NOS. 1412, 1413, 943, 944, 1500 & 1501/HYD/2016 :- 13 -: COUPLED WITH THIS, THE ASSESSEES MANAGING DIRECTOR (SUPRA) ALSO GOT RECORDED HIS SURVEY STATEMENT (PG.2 IN ASSESSEES PAPER BOOK) AND EXPLAINED THE ENTRIES IN P G.6; AND MORE PARTICULARLY THOSE IN ISSUE AS OTHER RECEIPTS TH AT THE SAME REPRESENTS THE ESTIMATE FROM VARIOUS SOURCES. FU NDS RECEIVED FROM SITE, REPRESENT VARIOUS INFLOWS LIKE AD VANCE RA BILLS FROM VARIOUS SITES AND OTHER RECEIPTS CONSIST O F MISCELLANEOUS RECEIPTS, INVESTMENTS, LOANS ETC. WHICH ARE BEING REALISED. THERE IS NO DISPUTE THAT THE ASSESSEE HAD NEVER FILED EVEN A RETRACTION BEFORE THE DEPARTMENTAL AUTHORITI ES CONCERNED. AND THAT THIS INVESTMENT SHEET DULY MAKE IT CL EAR THE CORRESPONDING TIME SPAN HAS BEEN FROM 10-09-2007 TO 10- 08-2012 ONLY. THERE IS FURTHER NO ISSUE THAT THE ASSE SSEE HAD ALSO NOT EXPLAINED THE SAID ENTRIES IN ISSUE BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A). THE VERY FAC TUAL POSITION CONTINUES IN THE INSTANT SECOND APPELLATE PROCEEDINGS AS WELL. 3.4. FACED WITH THE FOREGOING FACTUAL POSITION, WE A RE OF THE OPINION THAT THE ASSESSEES IMPOUNDED DOCUMENT EXPLAINI NG ALL DETAILS WITH THE CORRESPONDING PARTIES DESERVES TO BE PRESUMED AS DISCLOSING THE CORRECT PARTICULARS DURING THE COURSE OF SURVEY AS PER SECTION 292(C) OF THE ACT, (M ORE PARTICULARLY IN VIEW OF THE AMENDMENT THEREIN VIDE FINA NCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 01-06-2002). COUPLED WITH THIS, WE POSED A SPECIFIC QUERY TO THE LEARNED COUNSEL AS TO WHETHER ALL THE REMAINING ENTRIES IN BOTH SIDES OF THE IMPOUNDED DOCUMENT ANNEXURE-I ARE CORREC T OR NOT? THE REPLY RECEIVED FROM THE ASSESSEES SIDE IS I N AFFIRMATIVE ONLY. ALL THIS LEADS US TO AN IRRESISTIBL E CONCLUSION THAT THE LEARNED ASSESSING OFFICER HAD RIGHTLY MADE THE ITA NOS. 1412, 1413, 943, 944, 1500 & 1501/HYD/2016 :- 14 -: IMPUGNED ADDITION IN ASSESSEES HANDS TAKING INTO CONSIDERATION THE TOTALITY OF ALL THE CORRESPONDING EN TRIES IN THE IMPOUNDED DOCUMENT RATHER THAN ADOPTING A PICK AND CHOO SE METHOD. 3.5. COMING TO THE LEARNED COUNSELS ARGUMENT THAT SUCH LOOSE SHEETS OR DUMB DOCUMENTS ARE OUGHT NOT BE ALLOWED TO FORM THE BASIS OF THE IMPUGNED ADDITION FAILS TO MAKE U S CONCUR WITH WE FIND THAT SUCH A QUESTION HAS INDEED ARO SE BEFORE HON'BLE APEX COURT IN CBI VS. V.C.SHUKLA 1998 (3) SEC 410 (SC), WHEREIN THEIR LORDSHIPS MADE IT CLEAR THAT THE ENTRIES IN LOOSE PAPERS/SHEETS ARE NEITHER RELEVANT NOR ADMIS SIBLE AND IT IS ONLY WHERE ENTRIES ARE IN THE BOOKS OF ACCOUNT REGULARLY KEPT; DEPENDING ON THE NATURE OF OCCUPATION, THAT THEY ARE ADMISSIBLE. HON'BLE APEX COURT FURTHER REITERATED SU CH ENTRIES ARE ONLY IN THE NATURE OF CORROBORATIVE EVIDENCE WHI CH FURTHER REQUIRE INDEPENDENT EVIDENCE TO TEST TRUSTWORTHINESS THERE OF. THERE CAN HARDLY BE ANY DISPUTE REGARDING THE FOREGOI NG SETTLED PROPOSITION. THE FACT, HOWEVER, REMAINS THAT THE DOCUMENT IMPOUNDED HEREIN IS DULY SUPPORTED BY ALL THE CORRECT ENTRIES AS PER ASSESSEES STAND ITSELF. WE ALS O WISH TO QUOTE SECTION 2(12A) OF THE ACT, DEFINING; BOOKS OR BO OKS OF ACCOUNT TO INCLUDE LEDGERS, DAY BOOKS, CASH BOOKS, ACCOUNT BOOKS AND OTHER BOOKS... WE WISH TO EMPHASIZE HE RE THAT THE IMPOUNDED DOCUMENT IS ASSESSEES INVESTMENT STATEMENT FROM 10-09-2007 TO 10-08-2012 WHEREIN IT S MANAGING DIRECTOR HAD DULY POINTED OUT THE SAME IN THE NATURE OF INVESTMENTS AND LOANS WHICH OUGHT TO BE TREATED AS UN-EXPLAINED U/S.68 OF THE ACT ONLY. ITA NOS. 1412, 1413, 943, 944, 1500 & 1501/HYD/2016 :- 15 -: THE ASSESSEES FURTHER ARGUMENT THAT THE IMPUGNED SUM IS MERELY AN ESTIMATE ALSO FAILS TO INSPIRE CONFIDENC E SINCE THERE IS NO MATERIAL BEFORE US WHICH COULD SUGGEST THE FACTUAL POSITION TO BE DIFFERENT THAN THAT FOUND DURING THE COURSE OF SURVEY. IT APPEARS THAT ASSESSEES FAILURE IN FILIN G ITS COGENT EXPLANATION ONLY LED THE ASSESSING OFFICER TO ADD THE IMPUGNED SUMS IN ALL THESE ASSESSMENT YEARS. WE THUS RESTORE THIS UN-EXPLAINED CASH CREDIT ADDITION OF RS.20,55,99,560/ - IN THESE FACTS AND CIRCUMSTANCES IN AY.2010-11. THE CIT(A )S FINDINGS UNDER CHALLENGE STAND REVERSED THEREFORE. TH E REVENUE SUCCEEDS IN ITS INSTANT IDENTICAL LATTER SUBSTAN TIVE GROUND IN ALL THESE APPEALS SINCE THERE IS NO DISTIN CTION OF FACTS OR LAW; AS THE CASE MAY BE. NO OTHER ARGUMENT OR GROUND HAS BEEN PRESSED BEFORE US. 4. THESE REVENUES APPEALS ARE PARTLY ALLOWED 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 24 TH AUGUST, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 24-08-2021 TNMM ITA NOS. 1412, 1413, 943, 944, 1500 & 1501/HYD/2016 :- 16 -: COPY TO : 1.THE DY.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -2(4), HYDERABAD. 2.THE ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRC LE-2(4), HYDERABAD. 3.M/S.GAYATRI PROJECTS LIMITED, 6-3-1090, B1, TSR T OWERS, RAJBHAVAN ROAD, SOMAJIGUDA, HYDERABAD. 4.CIT(APPEALS)-12, HYDERABAD. 5.PR.CIT(CENTRAL)-HYDERABAD. 6.D.R. ITAT, HYDERABAD. 7.GUARD FILE.