Dy. CIT, Central Circle-5, Hyderabad V. Sri K. Sudhir, Hyderabad

ITA 962/HYD/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6377 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 12-05-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 20-06-2012
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Unexplained cash credit; Unexplained investment; Income from undisclosed sources; Document seized; Source of fund; Additional evidence; Documents seized
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 957/HYD/12 2001 - 02 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-5, HYDERABAD SRI K. SUDHIR, HYDERABAD [PAN: AHYPK8480Q] 960/HYD/12 2002 - 03 961/HYD/12 2003 - 04 962/HYD/12 2005 - 06 875/HYD/12 2001 - 02 SRI K. SUDHIR, HYDERABAD [PAN: AHYPK8480Q] ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-5, HYDERABAD 8 76/HYD/12 2002 - 03 FOR REVENUE : SHRI K.J. RAO, DR FOR ASSESSEE : SHRI P. MURALI MOHAN RAO, AR DATE OF HEARING : 24-06-2016 DATE OF PRONOUNCEMENT : 19-08-2016 O R D E R PER B. RAMAKOTAIAH, A.M. : THESE ARE APPEALS BY REVENUE FOR AYS. 2001-02 TO 200 3-04 & 2005-06 WHERE AS ASSESSEE HAS PREFERRED THE CROSS AP PEALS IN AYS. 2001-02 AND 2002-03 AGAINST THE ORDERS OF THE COMMISS IONER OF INCOME TAX (APPEALS)-VII, HYDERABAD, DATED 30-03-20 12. SINCE COMMON ISSUES ARE INVOLVED IN THESE APPEALS AND ORD ERS OF CIT(A) IS MORE OR LESS COMMON IN ALL THE IMPUGNED ASSESSMEN T YEARS, THESE APPEALS ARE HEARD TOGETHER AND DECIDED BY THIS CO MMON ORDER. SRI K. SUDHIR :- 2 -: 2. WE HAVE HEARD THE LD. COUNSEL AND LD. DR, PERUSE D THE PAPER BOOKS AND ALSO OBTAINED WRITTEN SUBMISSIONS F ROM BOTH THE PARTIES. IT MUST BE NOTED THAT IN THE COURSE OF HEA RING, THE BENCH HAS RECORDED ITS UNHAPPINESS THE WAY REVENUE N EITHER PRODUCED THE RECORDS NOR FURNISHED PROPER INFORMATION . IT IS ALSO PLACED ON RECORD THAT DRS (NOT THE PRESENT DR BUT OF THO SE WHO REPRESENTED EARLIER) PREPARATION WAS NOT TO THE SATISFA CTION OF THE BENCH. REVENUE EXPRESSED ITS INABILITY TO LOCATE THE R ECORDS DUE TO CHANGE OF JURISDICTION AND EVEN THOUGH ONE AO WAS PR ESENT IN THE COURT ROOM AS PER THE DIRECTION GIVEN ON RECORD, THE OF FICER WAS NEITHER HAVING JURISDICTION NOR THE RECORDS. SUFFICIE NT TIME WAS GIVEN TO THE PARTIES AND WRITTEN SUBMISSIONS HAVE BEEN TAKEN ON RECORD. THE APPEALS ARE DECIDED ON THE BASIS OF THE WRITTEN SUBMISSIONS BY BOTH PARTIES AND DOCUMENTS PLACED ON RE CORD BY ASSESSEE. 3. ASSESSEE IS AN INDIVIDUAL AND DIRECTOR IN M/S. K MS POWER LIMITED AND M/S. METKOKE INDUSTRIES LIMITED. SEA RCH AND SEIZURE OPERATIONS WERE CONDUCTED DURING THE FY. 2004 -05 IN THE GROUP CASES OF SUJANA AND ASSESSEE IS ALSO COVERE D. PROCEEDINGS WERE INITIATED U/S. 153A OF THE ACT. ASSESSEE HAD FILE D HIS REGULAR RETURNS OF INCOME EARLIER AND REPEATED THE SAME IN RE SPONSE TO NOTICES U/S. 153A. THERE WERE CERTAIN INCRIMINATING MATERIAL IN THE FORM OF INVESTMENTS LISTED AGAINST ASSESSEE AND ASSE SSMENTS FROM AYS. 2001-02, 2002-03, 2003-04 & 2005-06 WERE COMPLETED ON THE BASIS OF CERTAIN SEARCH DOCUMENTS, MAINLY ON TH E INVESTMENTS MADE IN THE TWO COMPANIES IN WHICH ASSESSE E IS DIRECTOR. AO HAS CONSIDERED THE INVESTMENTS AND ASKED FOR SOURCES OF THE AMOUNTS. ON THE BASIS OF THE REPLIES FURNISHED BY SRI K. SUDHIR :- 3 -: ASSESSEE, AO WAS OF THE OPINION THAT THE SOURCE OF THE F UNDS AS EXPLAINED BY ASSESSEE ARE NOT GENUINE AND HAS TREATE D ALL THE INVESTMENTS AS ARISING OUT OF UNACCOUNTED INCOMES. MAINLY THE ADDITIONS ARE BASED ON THE INVESTMENTS IN THE SHARE CAP ITAL OF THE TWO COMPANIES TO AN EXTENT OF RS. 6.20 CRORES AND INV ESTMENT IN LAND AND OTHER ITEMS IN AY. 2003-04 TO AN EXTENT OF RS. 73,61,000/-. 4. LD. CIT(A) CONSIDERED ALL ASPECTS OF THE SUBMIS SIONS OF ASSESSEE AND ORDERS OF THE AO AND HAS GIVEN COMPLETE RELIEF IN AYS. 2003-04 & 2005-06, WHEREAS HE WAS GIVEN PARTIAL RELI EF IN AYS. 2001-02 & 2002-03. REVENUE IS AGGRIEVED IN ALL THE YEARS ON THE RELIEF GRANTED BY THE LD. CIT(A). ASSESSEE IS AGGR IEVED ONLY IN TWO ASSESSMENT YEARS ON THE CONFIRMATION OF CERTAIN AMOUNTS BY THE LD. CIT(A). WE DEAL WITH THE APPEALS ASSESSMENT YEAR WISE. AY. 2001-02: 5. ASSESSEE HAS PREFERRED THE APPEAL IN ITA NO. 875/HYD/2012 AND REVENUE HAS PREFERRED THE APPEAL IN ITA NO. 957/HYD/2012 IN THIS ASSESSMENT YEAR. AO IN THE ORDE R DT. 20- 12-2006, BROUGHT AN AMOUNT OF RS. 61,30,686/- AS UNE XPLAINED INVESTMENTS BASED ON THE LOOSE SHEETS FOUND AS PG. NO S. 44 AND 114 OF A/KMSP/1 IMPOUNDED FROM THE PREMISES OF M/S. KMS POWER LIMITED. ASSESSEE EXPLAINED THE SOURCES, SOME FROM INDIVIDUALS AND SOME FROM THE COMPANIES. AO IN HIS ORDER DISBELIEVED THE ASSESSEES SUBMISSIONS AND ADDED THE AMOUNT OF RS. 61,30,686/-. SRI K. SUDHIR :- 4 -: 5.1. WHILE CONTESTING THAT THE SEIZED DOCUMENTS ARE DUM B DOCUMENTS, ASSESSEE EXPLAINED THAT ENTIRE AMOUNT RECEIVE D AS SHARE APPLICATION MONEY WAS RECEIVED FROM VARIOUS SOURCES BY WAY OF CHEQUES AND EXPLAINED THE LD. CIT(A) THAT ALL TH ESE ARE GENUINE CREDITS WHICH SHOULD BE ACCEPTED. EVEN THOUGH , ASSESSEE CONTENDED THAT THE DOCUMENT CANNOT BE ACCEPTED AS GENUINE , LD. CIT(A) GAVE A FINDING THAT THE AMOUNTS REFLECTED IN THE SEIZED MATERIAL ARE SUPPORTED BY THE ENTRIES IN THE BOOKS OF ACCOUNTS AND THE CONTENTS OF THE SEIZED MATERIAL CANNOT BE BRUSHED A SIDE. LD. CIT(A) NOTICED THAT AO HAS NOT BASED THE ADDITION ON THE BASIS OF THE FACTS AND HAS ANALYSED THE INVESTMENT MADE IN THIS YE AR ON THE BASIS OF OTHER SEIZED DOCUMENTS TO BE RS. 76,75,000/- AND NOT RS. 61,30,686/- WHICH AMOUNT, IN FACT, PERTAIN TO NEXT ASS ESSMENT YEAR. HIS FINDING IN PARA 5.4 ON THIS ISSUE IS AS U NDER: 5.4. .AS COULD BE SEEN FROM THE BALANCE SHEE T OF THE, APPELLANT AS ON 31.03.2001 AND 31.03.2002, THE INVESTMENTS OF THE APPELLANT IN SHARE CAPITAL' IN M/S KMS POWER LT D STOOD AT RS.76,75,000 AND RS.1,65,95,200 RESPECTIVELY, WHICH MEANS AN AMOUNT OF RS.76,75,000 WAS INVESTED DURING THE FY 2 000-01 AND RS.89,20,200 INVESTED DURING THE FY 2001-02. AS AGA INST THIS, THE FIGURES SHOWN BY THE APPELLANT VIDE SUBMISSIONS DT. 7.5.2007, STOOD AT RS.59,95,000 AND RS.1,06,00,100, RESPECTIVELY. I MPORTANTLY, THE PAGE NO.44 OF ANNEXURE A/KMSP/1, WHICH WAS RELIED U PON BY THE ASSESSING OFFICER, FOR MAKING THE ADDITIONS RELATED TO THE AY 2001- 02 AND AY 2002-03 ON ACCOUNT OF TREATING THE INVEST MENTS IN SHARE CAPITAL AS UNACCOUNTED, ALSO INDICATE THE FIGURES O F SUCH INVESTMENTS AT RS.76,75,000 AS ON 31.03.2001 AND RS .1,38,05,686 AS ON 31.01.2002, WITH A FURTHER AMOUNT OF RS.61,30 ,686 MADE DURING THE PERIOD OF 01.04.2001 I. TO 31.01.2002. H OWEVER, THE ASSESSING OFFICER HAS MADE THE ADDITION OF RS.61,30 ,686 FOR AY 2001-02 AND RS.76,75,000 FOR THE AY 2002-03, WHICH IS AGAINST THE FACTS, WHICH ALSO MEANS THE ADDITIONS WERE MADE WIT HOUT MAKING ANY REFERENCE TO THE STATEMENTS OF THE AFFAIRS OR B OOKS OF THE APPELLANT. THE APPELLANT ALSO CONTRIBUTED TO THE CO NFUSIONS BY NOT RAISING THE ISSUE IN GROUNDS OF THE APPEAL OR BY NO T DISCUSSING IN THE SUBMISSIONS MADE. THIS APPEARS TO HAVE RESULTED IN THE REPEATED SRI K. SUDHIR :- 5 -: ADDITION OF THE SAME AMOUNTS AND ASSESSMENT OF AMOU NTS AS INCOME IN THE WRONG ASSESSMENT YEARS. 5.2. LD.CIT(A) HAS FURTHER ANALYSED THE SOURCE OF INVESTMENTS OF AMOUNT OF RS. 76,75,000/- WHICH ARE LIS TED IN PARA 5.7 OF THE ORDER AND NOTICED THAT AN AMOUNT OF RS. 6,4 9,000/- PERTAINS TO OPENING BALANCE AND BALANCE AMOUNT WAS R ECEIVED DURING THE YEAR. AFTER EXAMINING THE SUBMISSIONS OF ASSESSEE, LD. CIT(A) CONFIRMED THE AMOUNTS OF RS. 28,65,000/- RECE IVED IN THE NAMES OF INDIVIDUALS AS NOT EXPLAINED AND AMOUNTS RECEIVED FROM VARIOUS COMPANIES AS EXPLAINED. ACCORDINGLY, HE UPHELD THE ADDITION TO AN EXTENT OF RS. 28,65,000/- AND DELETED TH E BALANCE AMOUNT. 6. REVENUE IS AGGRIEVED ON THE DELETION OF THE AMOUN TS WHICH ARE AS UNDER: S.NO. NAME DATE CHEQUE NO. AMOUNT (RS) 1. ANION TECHNOLOGIES 09 - 10 - 2000 191206 25,00,000 2. KAKATIYA CONSTRUCTIONS 02 - 09 - 2000 263045 1,00,000 3. LUMBINI ELECTRICALS 04 - 09 - 2000 13863 12,00,000 4. SVEC CONSTRUCTIONS 22 - 09 - 2000 402201 3,50,000 5. EXPLAIR INDUSTRIES 14 - 10 - 2000 325461 6,60,000 7. AFTER CONSIDERING THE RIVAL CONTENTIONS AND PERUSI NG THE DETAILS AND WRITTEN SUBMISSIONS, WE ARE OF THE OPINION THAT THERE IS NO MERIT IN REVENUES CONTENTIONS. FIRST OF ALL, THE AD DITION MADE BY THE AO ITSELF IS, AS POINTED OUT BY THE CIT(A), IS NOT BASED ON CORRECT APPRECIATION OF FACTS. IN THE COURSE OF APPELL ATE PROCEEDINGS, LD. CIT(A) HAS SENT THE INFORMATION FURNI SHED ON REMAND AS PER RULE 46A AND IN THE INTERIM REPORT, AO SOUGHT TIME SRI K. SUDHIR :- 6 -: FOR MAKING ENQUIRES AS RECORDED IN PARA 5.9 OF THE L D. CIT(A)S ORDER. HOWEVER, IN THE FINAL REPORT, THE AO REPEATE D VERBATIM CONTENTS OF THE ASSESSMENT ORDER AND AS NOTED BY THE LD . CIT(A), THE ISSUES DISCUSSED IN THE INTERIM REPORT WERE ALSO G IVEN A GO-BYE. THIS FACT WAS RECORDED BY THE LD. CIT(A) IN PARA 5.10 . WE ARE NOT SURE ON WHAT BASIS THE REVENUE IS NOW CONTENDING THAT C IT(A) HAS ERRED IN DELETING THE AMOUNTS WHEN THE OPPORTUNITY TO EXAMINE THE FACTS WERE GIVEN TO THE AO WHICH WAS NOT AVAILED. 7.1. BE THAT AS IT MAY, AS SEEN FROM THE FACTS PLACED O N RECORD, THERE IS NO DISPUTE THAT THE AMOUNTS ARE RECEIVED FROM THE RESPECTIVE PARTIES BY WAY OF CHEQUES THROUGH BANKING C HANNELS, THEY HAVE FURNISHED THE CONFIRMATIONS AND THE AMOUNTS AR E REFLECTED IN THE BOOKS OF ACCOUNTS AND MOST OF THE COMP ANIES ARE MORE OR LESS, GROUP COMPANIES. IN VIEW OF THE FACTS AS STATED BY CIT(A) IN THE ORDER IN PARA 5.11, WE ARE OF THE OPIN ION THAT REVENUE HAS NOT MADE OUT ANY CASE TO REVERSE THE FINDINGS OF THE LD. CIT(A). IN FACT, NO EVIDENCE WAS BROUGHT ON RECORD TO COUNTER THE FINDINGS OF LD. CIT(A). AS ALREADY POINTED OUT, AO WHEN GIVE N AN OPPORTUNITY DURING REMAND PROCEEDINGS, FAILED TO EXAM INE AND SIMPLY REPEATED THE ASSESSMENT ORDER EVENTHOUGH THE IN FORMATION WAS FURNISHED BY ASSESSEE. IN VIEW OF THIS, WE DO N OT FIND ANY MERIT IN THE REVENUES CONTENTIONS. ACCORDINGLY, THE AP PEAL RAISED BY REVENUE IN ITA NO. 957/HYD/2012 IS DISMISSED. ASSESSEES APPEAL IN ITA NO. 875/HYD/2012: 8. AO AS ALREADY STATED ABOVE, MADE AN ADDITION OF RS. 61,30,686/- WHICH WAS TAKEN AT RS. 76,75,000/- BY THE LD. CIT(A). SRI K. SUDHIR :- 7 -: AN AMOUNT OF RS. 28,65,000/- WAS CONFIRMED BY THE LD. CIT(A) ON THE REASON THAT THEY ARE NOT FULLY SATISFYING THE CONDI TIONS LAID DOWN FOR ACCEPTING THE CASH CREDITS. 9. THE AMOUNTS CONFIRMED BY THE LD. CIT(A) ARE AS UN DER: STATEMENT SHOWING AMOUNTS DISALLOWED BY CIT(A) A.Y. 2001-02 PARTICULARS DATE CHEQUE NO. AMOUNT (RS) OPENING BALANCE 6,49,000 A RAMA RAO 26 - 09 - 2000 184275 2,00,000 A RAMA RAO 10 - 02 - 2001 218001 2,00,000 BHASKER RAJU 06 - 04 - 2000 667957 3,00,000 HEMALATHA 06 - 04 - 2000 660582 3,46,000 KLN RAJU 22 - 09 - 2000 545454 5,00,000 LEELABAI 16 - 09 - 2000 384325 2,00,000 VAMSI KRISHNA 16 - 10 - 2000 167796 3,00,000 VAMSI KRISHNA 10 - 03 - 2001 100249 1,70,000 TOTAL 28,65,000 9.1. IT WAS SUBMITTED THAT THE LD. CIT(A) CONFIRMED THE OPENING BALANCE OF RS. 6,49,000/- ALSO AND FURTHER THE AMOUNTS WHICH ARE RECEIVED BY CHEQUES ALSO WERE CONFIRMED W ITHOUT ANY REASONING. IT WAS THE CONTENTION THAT CIT(A) ERRED IN B RUSHING ASIDE THE EXPLANATION IN RESPECT OF MONEY RECEIVED FRO M INDIVIDUALS WITHOUT GIVING ANY CONTRARY FINDINGS AGAINST ASSESSEE S SUBMISSIONS. IT WAS ALSO SUBMITTED THAT MAJORITY OF THE TRANSACTIONS ARE THROUGH BANK AND CIT(A) ACCEPTED THE RECEIPT OF AMOUNTS FROM COMPANIES WHICH ARE THROUGH BANK. IT IS ALSO SUBMITTED THAT MOST OF THE PERSONS ARE ASSESSEES ON RECOR D AND THEY HAVE CONFIRMED THE AMOUNTS BEING RECEIVED BY ASSE SSEE. IN VIEW OF THAT, IT WAS CONTENDED THAT THE AMOUNTS SHOULD BE ACCEPTED. IT WAS ALSO SUBMITTED THAT THESE CONFIRMATION L ETTERS WERE SENT TO THE AO FOR REMAND REPORT WHICH AO IN THE PR ELIMINARY SRI K. SUDHIR :- 8 -: REPORT WANTED TWO MONTHS TIME FOR MAKING NECESSARY EN QUIRIES BUT IN THE FINAL REPORT, DID NOT VERIFY ANYTHING AND REPE ATED THE FINDINGS IN ASSESSMENT ORDER. FAILURE OF THE AO TO CO NDUCT ANY ENQUIRY IN RESPECT OF CREDITORS SHOULD BE CONSIDERED IN FAVOUR OF ASSESSEE AND ASSESSEES CONFIRMATIONS SHOULD BE ACCE PTED AS NO CONTRA FINDINGS WERE GIVEN BY THE AO. 10. LD. DR, HOWEVER, SUBMITTED THAT CIT(A) HAS RIGHTLY CONFIRMED THE AMOUNTS. 11. WE HAVE CONSIDERED THE ISSUE AND EXAMINED THE DE TAILS. AS FAR AS THE CONFIRMATIONS ARE CONCERNED, THEY ARE PL ACED ON RECORD AND THESE WERE SENT TO AO FOR VERIFICATION BY L D. CIT(A). AS SEEN FROM THE ORDER OF THE CIT(A) PARTICULARLY PARA 5. 7, THE LD. CIT(A) HIMSELF ACCEPTS THAT THERE IS OPENING BALANCE OF CAPITAL AT RS. 6,49,000/-. THIS AMOUNT CANNOT BE CONFIRMED IN THIS YEAR AS IT PERTAIN TO EARLIER YEARS. TO THAT EXTENT THERE IS NO JUSTI FICATION TO BRING THAT AMOUNT TO TAX IN THIS ASSESSMENT YEAR. FURT HER, AS PER THE TABLE EXTRACTED ABOVE, ALL THE AMOUNTS WERE RECEIVE D BY ASSESSEE BY WAY OF CHEQUES. SURPRISINGLY, LD. CIT( A) ACCEPTED THE CREDITS RECEIVED THROUGH CHEQUES IN THE HANDS OF THE C OMPANIES WHERE AS THE SAME WAS NOT ACCEPTED IN THE HANDS OF THE INDIVIDUALS. WHEN THE MATTER WAS SENT TO AO ON REMAND, FOR THE REASONS BEST KNOWN TO THE AO, DID NOT MAKE ANY ENQUIRY. IN THE ABSENCE OF ANY RECORD BEING PRODUCED BEFORE US IN S PITE OF REPEATED DIRECTIONS, WE ARE UNABLE TO EXAMINE THE CONTENTIONS. A SSESSEES HAVING EXPLAINED THE SOURCE OF INCOME AND ARE REGULA RLY FILING RETURNS OF INCOME, FOLLOWING THE DECISION OF THE CO-O RDINATE BENCH IN THE CASE OF KLR INDUSTRIES LTD., IN ITA NO. 1480/HY D/2014, WE SRI K. SUDHIR :- 9 -: HAVE TO HOLD THAT THESE ARE GENUINE. BUT AT THE SAME TIM E WE ARE ALSO AWARE THAT AO HAS NOT ENQUIRED THESE CREDITS. CONS EQUENTLY, WE ARE OF THE OPINION THAT THESE CAN BE EXAMINED BY AO AND IF ASSESSES HAVE ACCEPTED IN THEIR RETURNS OR CONFIRMED ON ENQUIRY THE SAME CAN BE ACCEPTED AS GENUINE. IN ORDER TO MAKE NECESSARY ENQUIRY, THE ORDERS OF AO AND CIT(A) ON THIS ARE SET ASIDE AND THIS ISSUE IS RESTORED TO THE AO FOR DOING THE NEEDFUL. TH E GROUNDS RAISED BY ASSESSEE ARE CONSIDERED ALLOWED FOR STATISTI CAL PURPOSES. 12. ASSESSEE HAS RAISED AN ADDITIONAL GROUND IN THE COURSE OF APPEAL THAT PROCEEDINGS U/S. 153A ARE NOT CORRECTLY INITIATED WHEN THE SEARCH OPERATIONS WERE NOT INITIATED AGAINST ASS ESSEE. HOWEVER, HIS GROUND WAS WITHDRAWN ON PRODUCTION OF T HE RECORD TO THE EXTENT THAT ASSESSEE WAS ALSO SEARCHED IN THE SEARCH CONDUCTED ON SUJANA GROUP. AS THE GROUND IS NOT PRESSED, IT IS TR EATED AS WITHDRAWN AND DISMISSED. 13. IN THE RESULT, APPEAL OF ASSESSEE IN ITA NO. 875/HYD/2012 IS ALLOWED FOR STATISTICAL PURPOSES. AY. 2002-03: 14. IN THIS ASSESSMENT YEAR, THE AO IN HIS ORDER HAS MADE THE FOLLOWING ADDITIONS: (RS) 1. UNEXPLAINED INVESTMENTS AS DISCUSSED IN PARA B 76,75,000 2. UNEXPLAINED INVESTMENTS AS DISCUSSED IN PARA C 51,45,000 3. UNEXPLAINED INVESTMENTS AS DISCUSSED IN PARA D 1,00,07,928 4. UNEXPLAINED INVESTMENTS AS DISCUSSED IN PARA E & F 23,55,000 5. UNEXPLAINED INVESTMENTS AS DISCUSSED IN PARA I 58,33,623 SRI K. SUDHIR :- 10 -: 14.1. AS BRIEFLY STATED IN EARLIER APPEAL, THE AMOUNT CONSIDERED BY THE AO AT RS. 76,75,000/- IS NOT CORRECT AND CIT(A) AFTER ANALYZING IT, HAS SUBSTITUTED THE AMOUNT TO RS. 61 ,30,686/-. EVEN THOUGH, ASSESSEE CONTENDED THAT THE DOCUMENT CANNO T BE ACCEPTED AS GENUINE, LD. CIT(A) GAVE A FINDING THAT T HE AMOUNTS REFLECTED IN THE SEIZED MATERIAL ARE SUPPORTED BY THE ENTRIES IN THE BOOKS OF ACCOUNTS AND THE CONTENTS OF THE SEIZED MATERIA L CANNOT BE BRUSHED ASIDE. IT WAS THE CONTENTION OF ASSESSEE THA T MOST OF THE AMOUNTS HAVE BEEN RECEIVED BY WAY OF CHEQUES FROM VARIOUS FAMILY MEMBERS AND GROUP CONCERNS AND FURTHER, THERE WERE REPETITION OF THE AMOUNTS ADDED BY THE AO. LD. CIT(A) ANALYSED THE TRANSACTIONS, GAVE AN OPPORTUNITY TO THE AO ON REMA ND AND AFTER OBTAINING THE REPORTS, DELETED THE AMOUNTS. REVE NUE IS AGGRIEVED ON THE AMOUNTS DELETED. 15. REVENUE HAS RAISED AS MANY AS SEVEN GROUNDS. OUT OF WHICH, GROUND NOS. 1 & 7 ARE GENERAL IN NATURE. TH E BALANCE OF THE GROUNDS PERTAIN TO THE AMOUNTS DELETED BY THE CIT(A). 16. GROUND NO. 2: THIS GROUND PERTAINS TO DELETION OF ADDITION MADE OUT OF THE INVESTMENT IN THE GROUP CONCER NS. AO MADE AN ADDITION OF RS. 76,75,000/- WHICH WAS CORREC TED BY THE LD.CIT(A) TO RS. 61,30,686/-. OUT OF THIS AMOUNT, ASSE SSEE HAS EXPLAINED THAT ALL THE AMOUNTS HAVE BEEN RECEIVED FROM EITHER GROUP CONCERNS OR FROM KNOWN FAMILY PERSONS AND FIL ED CONFIRMATIONS. THE DETAILS ARE AS UNDER: SRI K. SUDHIR :- 11 -: S.NO. N AME DATE CHEQUE NO. AMOUNT (RS) 1. K VASANTHA LAXMI 06.04.2001 622472 2,00,000 2. N S PRAKASH RAO 10.04.2001 758110 50,000 3. N S PRAKASH RAO 1 1 .04.2001 75810 9 50,000 4. N S PRAKASH RAO 17.04.2001 75811 6 50,000 5. N S PRAKASH RAO 17.04.2001 758117 50, 000 6. VAMSI KRISHNA 17.06.2001 224462 50,000 7. A RAMA RAO 08.06.2001 616103 49,000 8. VASANTHA LAXMI 15.06.2001 328963 1,00,000 9. CHELLA TIRUPATAMMA 16.06.2001 A/C NO. 5,00,000 10. A PULLAIAH 28.06.2001 616102 49,000 11. K BAPAIAH 28.06.2001 61610 1 49,000 12. K SAMBAIAH 28.06.2001 616106 49,000 13. K GOPAL RAO 28.06.2001 616104 49,000 14. K SRINIVASA RAO 28.06.2001 616105 49,000 15. ARUNA PLASTICS PVT LTD 12.04.2001 159584 4 0 ,000 16. P V SATYA PRASAD 28.11.2001 456922 3,00,000 17. P V SATYA P RASAD 2 3 . 0 1.200 2 5 05 6 01 1,51,686 18. A RAMA RAO 23.01.2002 A/C NO.. 1,00,000 19. P RATNASREE 05.01.2002 CASH 1,00,000 20. SANDHYA 01.01.2002 666977 4,50,000 21. T MURALI KRISHNA 23.11.2001 143291 4,00,000 22. P UMA DEVI 23.11.2001 225356 1,00,000 23. K ARUNA -- CASH 10,000 24. SRUGEN ENTERPRISES PVT LTD., 17.02.2001 TO 10.11.2001 BY CHEQUES 30,35,000 25. SUNDARAM HOME FINANCE LTD., 24.09.2001 872341 1,00,000 TOTAL: 61,30,686 16.1. LD.CIT(A) DELETED THE AMOUNT OF RS. 31,75,000/ - AND CONFIRMED RS. 29,55,686/-. ASSESSEE IS AGGRIEVED O N THE CONFIRMATION OF THE AMOUNT REPRESENTING LOANS FROM INDI VIDUALS WHICH WAS DEALT WITH SEPERATELY. REVENUE IS AGGRIE VED ON THE DELETION OF THE FOLLOWING AMOUNTS: SRI K. SUDHIR :- 12 -: I. ARUNA PLASTICS PVT. LTD., - RS. 40,000/- II. SRUGEN ENTERPRISE PVT. LTD., - RS. 30,35,000/- III. SUNDARAM HOME FINANCE LTD., - RS. 1,00,000/- 17. AS CAN BE SEEN FROM THE ORDER OF CIT(A), WHICH IS VERY ELABORATE, HE ACCEPTED THE CREDITS WHICH ARE RECEIVED THROUGH THE BANK AND MAINLY FROM COMPANIES OF THE GROUP. NOTHIN G WAS BROUGHT ON RECORD TO DIFFER FROM THE FINDINGS OF THE C IT(A). IN FACT, AS SEEN FROM THE ASSESSMENT ORDER, AO DID NOT EVEN BOT HER TO VERIFY WHAT ARE THE ACTUAL RECEIPTS AND WHAT ARE THE AMOU NTS TO BE CONSIDERED AS UNEXPLAINED CREDITS. AMOUNT RECEIVE D FROM M/S SUNDARAM FINANCE LTD., SUPPORTED BY THE BANK STATEMENTS WAS ALSO DISBELIEVED. THE CIT(A) AFTER EXAMINATION HAS C ORRECTLY DELETED THE AMOUNTS WHICH HAVE BEEN CONSIDERED AS GENUINE CR EDITS. IN VIEW OF THIS, WE SEE NO MERIT IN THE GROUND RAISED BY THE REVENUE. ACCORDINGLY, GROUND NO.2 IS DISMISSED. 18. COMING TO THE GROUND NO. 3, LD.CIT(A) DELETED TH E AMOUNT OF RS. 51,45,000/- BROUGHT TO TAX AS UNEXPLAINE D CREDITS IN ASSESSEES HANDS. EVEN THOUGH THIS ADDITION IS BAS ED ON PAGE NO. 43 OF A/KMSP/1, THE LD.CIT(A) FOUND OUT THAT THE AD DITIONS MADE ON THE BASIS OF THIS PAPER ARE NOTHING BUT THE AMOU NTS ALREADY REFLECTED IN OTHER DOCUMENTS, BEING THE SAME. HE HAS RECONCILED THE AMOUNTS. VIDE PARA 6.2 OF THE ORDER O N THE BASIS OF ASSESSEES EXPLANATION, HIS FINDINGS ON THE ISSUE ARE AS UNDER: 6.2.4. THE OBSERVATIONS OF THE ASSESSING OFFICER AND THE SUBMISSIONS OF THE APPELLANT PERUSED. AS COULD BE SEEN, THE ACTUAL INVESTMENT ARE WORKED OUT TO RS. 31,45,000 AND THE ENTIRE AMOUNTS ARE SHOWN TO HAVE SOURCED FROM M/S. SRUGEN ENTERPRI SES PVT LTD., THROUGH CHEQUES AND THE SAME IS SUPPORTED BY CONFIR MATIONS IN THIS SRI K. SUDHIR :- 13 -: REGARD. SINCE THE IDENTITY, CREDITWORTHINESS OF TH E CREDITOR IS ESTABLISHED ALONG WITH GENUINENESS OF THE TRANSACTI ON, THERE IS NO GROUND FOR TREATING THE AMOUNT AS UNEXPLAINED CREDI T OR INVESTMENTS IN THE HANDS OF THE APPELLANT. SINCE ALL SUCH INFO RMATION HAS BEEN BROUGHT ON THE RECORD, IT WAS FOR THE ASSESSING OFF ICER TO GO AFTER THE CREDITOR AS PER THE RATIOS OF JUDICIAL DECISIONS IN THE CASE OF (I) CIT VS. GUJARAT HEAVY ELECTRICALS 256 ITR 795 (SC) (II ) CIT VS. ORISSA CORPORATION PVT LTD., 159 ITR 78 (SC). FURTHER, IT IS NOT FOR THE ASSESSING OFFICER TO COM PLAIN AND CONTEND THAT THE CREDITOR BEING THE GROUP CONCERN O F THE APPELLANT WAS NOT COOPERATING WITH THE ASSESSING OFFICER IN C ONDUCTING THE ENQUIRIES/INVESTIGATIONS TO VERIFY ITS CREDITWORTHI NESS, BEING ITS ASSESSING OFFICER AND THEREBY COMING TO THE CONCLUS ION THAT THE SOURCES OF THE APPELLANT ARE NOT PROVED TO TREAT TH E SAME AS UNEXPLAINED CREDITS/INVESTMENTS. IT IS ALSO A FACT THAT, THE AMOUNT OF RS. 51,45,000 AS QUANTIFIED BY THE ASSESSING OFF ICER AS UNACCOUNTED INVESTMENT INCLUDE THE AMOUNTS OF RS. 4 ,95,000 STANDING IN THE NAME OF MRS. K. ARUNA, AS EVIDENT F ROM THE SEIZED MATERIAL ITSELF. SINCE SMT K. ARUNA IS A SEPARATE ENTITY AND ASSESSED TO TAX IN HER OWN RIGHT, CLUBBING AND ASSE SSING SUCH AMOUNTS IN THE HANDS OF THE APPELLANT, WITHOUT CORR OBORATIVE EVIDENCE IS NOT JUSTIFIED. UNDER THE CIRCUMSTANCES , THE ADDITION OF RS. 51,45,000 IS NOT SUSTAINABLE AND THE APPELLANT GETS RELIEF TO THAT EXTENT. HENCE, THIS GROUND OF APPEAL IS TREATED AS ALLOWED. 19. CONSIDERING THE FACTUAL FINDINGS OF LD.CIT(A), THERE IS NO MERIT IN THE REVENUES GROUND. SINCE THE AMOUNTS ADDED ON DUPLICATION OF THE AMOUNTS ALREADY CONSIDERED IN EARL IER GROUND, WE HAVE NO HESITATION IN REJECTING THIS GROUND. 20. GROUND NO. 4 PERTAINS TO DELETION OF THE SHARE CAP ITAL MADE AT RS. 1,00,07,928/-, OUT OF WHICH, LD.CIT(A) UP HELD ONLY AN AMOUNT OF RS. 8,27,242/-, WHILE DELETING THE BALANCE A MOUNT. LD.CIT(A) EXTRACTED ASSESSEES RECONCILIATION OF THE AMOUNTS IN ASSESSMENT ORDER IN PG. 15-19 OF THE ORDER AND EXCLUD ED ALL THE AMOUNTS WHICH WERE CONSIDERED IN THE INVESTMENTS MADE D URING THE YEAR. THE SOURCES BEING THE SAME, WE ARE OF THE OP INION THAT SRI K. SUDHIR :- 14 -: AO TREATED THE SAME AMOUNTS AGAIN ON THE BASIS OF DIFF ERENT PAPERS SEIZED I.E., PG. 40 OF A/KMSP/1 UNDER THE TITLE INTEREST ACCOUNT . 21. AFTER RECONCILING ALL THE AMOUNTS, LD.CIT(A) NOTE D THAT NET INVESTMENT IN THIS PAPER IS ONLY RS. 14 LAKHS (AFTER EXCLUDING THE AMOUNTS ALREADY CONSIDERED EARLIER) OUT OF WHICH, RS. 10 LAKHS WAS SOURCED FROM M/S. SRUGEN ENTERPRISES PVT. LTD., AND RS. 4 LAKHS FROM MR. D. BHASKAR. WHILE CONFIRMING THE AMOUNT OF SHRI D. BHASKAR, CIT(A) GAVE RELIEF OF THE AMOUNT REC EIVED FROM M/S. SRUGEN ENTERPRISES PVT. LTD. FURTHER, AN AMOUNT O F RS. 4,27,242/- WAS ACCOUNTED FOR AS INTEREST AMOUNT ON THE AMOUNT INVESTED/BORROWED TO AN EXTENT OF RS. 95,80,686/-. TH IS AMOUNT WAS CONFIRMED ON THE REASON THAT ASSESSEE HAS UNACCOUN TED EXPENDITURE AND IN THE ABSENCE OF EXPLANATION, THE SA ME WAS CONFIRMED. THUS, LD.CIT(A) AFTER RECONCILIATION OF TH E AMOUNTS ALREADY CONSIDERED IN THE FIRST GROUND AND SOURCES THE REON, HAS CONFIRMED TWO AMOUNTS PERTAINING TO MR. D. BHASKAR AN D INTEREST COMPONENT. SINCE MOST OF THE ADDITIONS ARE MADE ON THE BASIS OF THE ENTRIES FOUND IN ONE SINGLE SHEET, IT ALSO GOT REFL ECTED IN OTHER SHEETS. LD.CIT(A) TOOK THE EXERCISE OF RECONCILING T HE AMOUNTS AND CONFIRMED TO AN EXTENT OF WHICH HE WAS NOT SATISFIED. 22. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE S AID FINDINGS OF LD.CIT(A) AS AO HAS NOT EXAMINED THE DOCU MENTS EITHER AT THE TIME OF ASSESSMENT OR AT THE TIME OF REMAND REPORT. BEFORE US ALSO, NOTHING WAS BROUGHT ON RECORD TO DISPUTE THAT A MOUNTS ARE DIFFERENT. IN FACT, AS SEEN FROM THE DETAILED STATE MENTS EXTRACTED BY THE CIT IN THE ORDER ITSELF, MOST OF THE AM OUNTS ARE SRI K. SUDHIR :- 15 -: SAME WHICH WERE ALREADY CONSIDERED WHILE EXAMINING THE INVESTMENTS MADE. THEREFORE, WE UPHOLD THE ORDER OF THE CIT(A) AND REJECT THIS GROUND. 23. GROUND NO. 5 PERTAINS TO THE PARTIAL DELETION OF AN AMOUNT OF RS. 21,80,300/- ADDED TOWARDS UNEXPLAINED CREDITS. THIS ADDITION IS BASED ON PAGE 51 OF THE ANNEXURE WHI CH AGAIN CONTAINS THE DETAILS OF CREDITS RECEIVED BY ASSESSEE FR OM THE SAME PERSONS PARTLY. THIS SHEET CONTAINS ONLY RECEIPTS TO T HE EXTENT OF RS. 21,80,300/- AND AO TREATED THEM AS UNEXPLAINED. 24. BEFORE THE LD.CIT(A), ASSESSEE RECONCILED THAT AM OUNTS OF RS. 13,44,000/- WERE RECEIVED FROM FEW INDIVIDUA LS BEING PART OF THE AMOUNT OF RS. 61,38,686/- CONSIDERED IN GROUND NO . 1 AND BALANCE OF RS. 8,36,000/- WAS RECEIVED FROM FIVE IN DIVIDUALS. LD.CIT(A) DELETED THE AMOUNT ALREADY CONSIDERED IN RS . 61,30,686/- AND CONFIRMED THE AMOUNT OF RS. 8,36,000/ -. 25. ON THIS ALSO, WE DO NOT FIND ANY REASON TO INTERF ERE WITH THE ORDER OF THE CIT(A) IN DELETING THE AMOUNTS OF RS. 13,44,000/- AS THEY ARE THE SAME AMOUNTS WHICH ARE ALREADY CONSIDE RED IN THE ADDITION MADE AT RS. 61,30,686/-. LD.CIT(A) CONFIRME D THE CREDITS IN THE HANDS OF INDIVIDUALS WHICH ASSESSEE IS CONTESTI NG IN HIS APPEAL BUT TO THE EXTENT OF DELETION MADE BY CIT(A), SINC E THESE ARE DUPLICATE ENTRIES/DOUBLE ENTRIES IN DIFFERENT SHEETS AND HAVING BEEN RECONCILED, WE DO NOT FIND ANY REASON TO INTERFE RE. REVENUES GROUND IS ACCORDINGLY DISMISSED. SRI K. SUDHIR :- 16 -: 26. LAST AND SIXTH GROUND FOR CONSIDERATION IS AN AMO UNT OF RS. 58,33,623/- ADDED BY THE AO BUT FULLY DELETED BY THE CIT(A). THIS ADDITION BY THE AO IS BASED ON PG. 4 OF THE ANN EXURE AND ASSESSEE EXPLAINED TO THE CIT(A) THAT ALL THE ENTRIES IN THIS SHEET ARE PART OF THE ENTIRE AMOUNT RECEIVED BY ASSESSEE WHIC H WERE CONSIDERED IN OTHER ADDITIONS AS WELL. LD.CIT(A) REC ONCILED THE AMOUNT AND NOTED THAT AN AMOUNT OF RS. 40,30,000/- WAS R ECEIVED FROM M/S. SRUGEN ENTERPRISES PVT. LTD., ON VARIOUS DATE S BY CHEQUES AND AMOUNT OF RS. 11,45,000/- WAS CONSIDERED AS RECEIVED FROM VARIOUS INDIVIDUALS AND BALANCE AMOUN T (SOME RECONCILIATION IS REQUIRED ON THIS AMOUNT) WAS FROM MRS. K. ARUNA, WHO IS SEPARATELY ASSESSED. NOTHING WAS BROUGHT ON R ECORD BY THE REVENUE TO DIFFER FROM THE FINDINGS OF THE CIT(A). 26.1. WE ALSO DO NOT FIND ANY REASON TO INTERFERE E VEN THOUGH THERE SEEMS TO BE SOME MISTAKE IN THE NUMBERS MENTIONED BY THE CIT(A). THE BALANCE AMOUNT CIT(A) ARRIVED AT WAS RS. 6,53,623/-, WHEREAS CIT(A) CONSIDERED AN AMOUNT OF RS. 2,58,000/ -AS INVESTMENT BY MRS. K. ARUNA THROUGH FIVE CHEQUES TO THE TUNE OF RS. 4,75,000/-, WHICH WAS EXPLAINED AS PART OF RS. 5 1,45,000/- CONSIDERED AGAINST GROUND NO. 3. BUT AS VERIFIED FRO M THE DOCUMENTS, THE ENTRIES IN THE SHEET ARE NOTHING BUT REPETITI ON OF THE OTHER DOCUMENTS AND NOT FRESH CREDITS. IN VIEW OF THIS, WE HAVE NO HESITATION IN CONFIRMING THE ORDER OF THE CIT(A) AND REJECTING REVENUES GROUND. 27. IN THE RESULT, REVENUES APPEAL IN ITA NO. 960/HYD/2012 IS DISMISSED. SRI K. SUDHIR :- 17 -: ASSESSEES APPEAL IN ITA NO. 876/HYD/2012: 28. IN THIS APPEAL, ASSESSEE IS CONTESTING ALL THE AMO UNTS WHICH ARE CONFIRMED BY THE CIT(A). GROUND NOS. 1 TO 5 PERTAIN TO THE CONFIRMATION OF RS. 29,55,686/- BEING THE AMOUNTS RECEIVED FROM INDIVIDUALS CONFIRMED AS UNEXPLAINED CREDITS. GROUND NO. 6 & 7 PERTAIN TO CONFIRMATION OF HAND LOAN AT RS. 1,75,00 0/-. GROUND NO. 8 PERTAINS TO CONFIRMATION OF RS. 8,27,242/- AND GROUND NO. 9 PERTAINS TO CONFIRMATION OF AMOUNT OF RS. 8,36,000/- TOW ARDS UNEXPLAINED CREDITS. 29. LD. COUNSEL REFERRING TO THE ABOVE AMOUNTS IN THE ORDER OF THE CIT(A) SUBMITTED THAT LD. CIT(A) HAS ACCEPTED THE CREDITS IN THE COMPANIES WHEREAS HE HAS NOT ACCEPTED THE CREDITS F ROM INDIVIDUALS WHICH ARE ALSO RECEIVED BY WAY OF CHEQU ES. THE SAME CONTENTIONS RAISED IN EARLIER YEAR WITH REFERENCE TO CR EDITS FROM INDIVIDUALS WERE ALSO RAISED IN THIS YEAR. 30. FOR THE REASONS STATED ABOVE IN ASSESSEES APPEAL DISCUSSED ABOVE, WITH REFERENCE TO CONFIRMATION OF CR EDITS OF INDIVIDUALS IN THAT YEAR, FACTS BEING SAME, WE HAVE NO OPTION THAN TO DIRECT THE AO TO VERIFY AND ACCEPT THE CREDITS FOR WHI CH CONFIRMATIONS WERE ALREADY FILED AND THESE ASSESSEES BEING INCOME TAX ASSESSEES. AS DIRECTED IN EARLIER YEAR ON SIMIL AR ISSUE IN ASSESSEE APPEAL, WE SET ASIDE THE ORDERS OF AO AND CI T(A) ON THIS ISSUE AND RESTORE THE SAME TO AO FOR PROPER EXAMINATION . THE GROUND RAISED BY ASSESSEE IS CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. SRI K. SUDHIR :- 18 -: 31. GROUND NOS. 6 & 7 PERTAINS TO CONFIRMATION OF AMO UNT OF RS. 1,75,000/- BASED ON THE ADDITION MADE BY THE A O AS REFLECTED AT PAGE 93 OF A/KMSP/1 (QUERY NO. E OF THE ASSESSMENT ORDER). IT WAS SUBMITTED THAT THE SEIZED MATERIAL ITSELF INDICATED THAT AMOUNT WAS RECEIVED FROM SMT. SANDHYA AND FILED CONFIRMATION LETTER. LD CIT(A) HAS NOT ADJUDICATED THI S EVENTHOUGH HE DID MENTION IN GROUNDS AND IN CONTENTIONS BY ASSESS EE. EXCEPT STATING THAT CONFIRMATION LETTERS FILED IN PG. 126 OF THE PAPER BOOK, NO FURTHER DETAILS ARE AVAILABLE. THEREFORE, WE ARE OF THE OPINION THAT THIS CAN ALSO BE EXAMINED BY AO AFRESH. ASSESSEE S GROUND ON THIS ISSUE IS ALLOWED FOR STATISTICAL PURPOSES. 32. GROUND NO. 8 PERTAINS TO CONFIRMATION OF AMOUNT OF RS. 8,27,242/-. AS ALREADY STATED ABOVE IN REVENUES APP EAL, AN AMOUNT OF RS. 4 LAKHS RECEIVED FROM SHRI D. BHASKAR WAS NOT ACCEPTED BY THE CIT(A) AND FURTHER AN AMOUNT OF RS. 4, 27,242/- BEING INTEREST PAID WAS ALSO NOT ACCEPTED. IT WAS SUBMI TTED THAT ASSESSEE HAS RECEIVED RS. 4 LAKHS FROM SHRI D. BHAS KAR BY WAY OF CHEQUE AND CONFIRMATION WAS FILED. WITH REFERENCE TO THE AMOUNT OF RS. 4,27,242/-, THE AMOUNT REPRESENTS PAST INCOME OF ASSESSEE AND IS ALREADY BEEN TAXED IN THE PREVIOUS YEAR. 33. AS SEEN FROM THE CONFIRMATIONS AND EXPLANATIONS F ILED BY ASSESSEE, WE NOTICE THAT AMOUNT OF RS. 4 LAKHS RECE IVED FROM SHRI D. BHASKAR WAS CONFIRMED FOR THE SAME REASONS A S WAS DONE BY THE LD. CIT(A) WHILE DISBELIEVING THE CREDITS FROM THE INDIVIDUALS. FOR THE REASONS STATED WITH REFERENCE TO THE CREDITS OF INDIVIDUALS WHO ARE TAX PAYERS AND ALSO ON THE REASON THAT SHRI D. BHASKAR HAS FILED CONFIRMATIONS IN THIS REGARD, WE SE T ASIDE THIS SRI K. SUDHIR :- 19 -: ALSO TO THE FILE OF AO FOR NECESSARY EXAMINATION. GROU ND IS ALLOWED FOR STATISTICAL PURPOSES. 34. WITH REFERENCE TO THE INTEREST PAID, EXCEPT STATING TH AT THIS WAS BROUGHT OUT OF THE PAST INCOME, NO CORRELATIO N WAS FURNISHED, WHEN IT WAS PAID, HOW IT IS PAID. SINCE TH E AMOUNT OF INTEREST PAID WAS ACCEPTED, THE SOURCE OF THE SAME HAS TO BE TREATED AS UNEXPLAINED. IN THE ABSENCE OF ANY EXPL ANATION FROM ASSESSEE ABOUT SOURCE OF FUNDS, EXCEPT THE REASON OF P AST SAVINGS, WE UPHOLD THE ORDER OF THE CIT(A) IN SUSTAINING THE AD DITION. THE GROUND TO THAT EXTENT IS REJECTED. 35. GROUND NOS. 9 TO 12 PERTAIN TO CONFIRMATION OF THE AMOUNTS OF RS. 8,36,000/-. THESE ARE SAID TO HAVE BE EN RECEIVED FROM FIVE INDIVIDUALS AND IN CASH. SINCE MANY OF TH E PERSONS HAVE ADVANCED FUNDS IN THE FORM OF CHEQUES, THE REASONS FO R TAKING AMOUNTS IN CASH ARE NOT FORTHCOMING. SINCE THE AMOUNTS ARE RECEIVED IN CASH, THE EXPLANATION OF ASSESSEE FOR THE SOURCE REQUIRES EXAMINATION. CONSEQUENTLY THIS ISSUE IS ALSO RESTORED TO AO FOR EXAMINATION AND DOING THE NEEDFUL. GROUNDS AR E CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. 36. IN THE RESULT, THIS APPEAL OF ASSESSEE IN ITA NO. 876/HYD/2012 IS PARTY ALLOWED FOR STATISTICAL PURPOSE S. AY. 2003-04 : REVENUES APPEAL IN ITA NO. 961/HYD/2012 : 37. IN THIS APPEAL, AO BASED ON THE SEIZED PAPERS, M ADE AN ADDITION OF RS. 21,92,000/- AS INVESTMENT VIDE DISCU SSED IN SRI K. SUDHIR :- 20 -: PARA G OF THE ORDER AND AGAIN SAME AMOUNT AS INVESTM ENT AS DISCUSSED IN PARA H OF THE ORDER AND FURTHER AN AMO UNT OF RS. 29,77,000/- AS INVESTMENT AS DISCUSSED IN PARA J OF THE ORDER. LD.CIT(A) EXAMINED THE ISSUES AND REMANDED THE MATTER TO THE AO AND THEN CONSIDERED THE EXPLANATION OF ASSESSEE AND D ELETED THE AMOUNTS. WITH REFERENCE TO THE ADDITION OF RS. 21,92,00 0/- MADE TWICE, LD.CIT(A) RECONCILED THE AMOUNT IN PAGE 4 TO 6 OF THE ORDER AND ISSUE WAS SENT TO AO FOR EXAMINATION. HIS FINDIN GS ON THIS ISSUE ARE IN PARA 5.4 & 5.5. THEY ARE AS UNDER: 5.4. IT IS A FACT THAT THERE ARE SOME INDICATIONS IN THE SEIZED MATERIAL INDICATING CERTAIN PAYMENTS BY MR. K. SUDH IR BUT THE SAID INFORMATION/TRANSACTION IS NOT COMPLETE IN ABSENCE OF THE END-USE OF SUCH PAYMENTS WHICH ARE NOT SUPPORTED BY ANY CLEAR EVIDENCE RELATED TO SUCH TRANSACTION. AS PER THE INFORMATIO N AVAILABLE ON RECORD, IT IS NOT KNOWN WHETHER THIS INFORMATION WA S PUT TO THE APPELLANT AND HIS EXPLANATION WAS EXTRACTED ON THE ISSUE. FURTHER, AS CONTENDED BY THE APPELLANT, THE SEIZED DOCUMENT IN THE FORM OF LOOSE SHEET WAS NEITHER SIGNED NOR IN THE HAND WRIT ING OF ANY ONE TO PIN POINT THAT THIS INFORMATION WAS RELATED TO EITH ER MR.K.5UDHIR OR M/S KMS POWER LTD. IN ABSENCE OF THE CORROBORATIVE EVIDENCE, THE NOTINGS ON THE SEIZED MATERIAL WILL BECOME LITTLE U NRELIABLE TO ARRIVE AT A SPECIFIC CONCLUSION. IN A CASE/SITUATION LIKE THIS, THE RIGHT ALTERNATIVE FOR THE ASSESSING OFFICER WAS TO CARRY OUT THE FURTHER INVESTIGATIONS AND ARRIVE AT THE LOGICAL CONCLUSION S. HOWEVER, IN THIS CASE, NO SUCH ATTEMPT OR EFFORT APPEARS TO HAVE TAK EN PLACE TO GIVE A CONCLUSIVE FINDING ON THE INFORMATION AS AVAILABLE ON THE SEIZED MATERIAL. THE JUDICIAL RULINGS ALL ALONG HELD THE V IEW THAT THE ADDITION COULD NOT BE MADE ON THE BASIS OF A SEIZED MATERIAL PRESUMED TO BE CODED FIGURES OR THE ACTUAL FIGURES, WITHOUT BRINGING ANY CORROBORATIVE MATERIAL EVIDENCE, IN SUPPORT THE REOF. IT WAS ALSO HELD BY VARIOUS JUDICIAL RULINGS THAT ADDITION BASE D ON LOOSE SHEETS AND PRESUMPTIONS OF THE ASSESSING OFFICER BASED THE REON COULD NOT BE SUSTAINED IN ABSENCE OF ANY CORROBORATIVE MATERI AL OR EVIDENCE BROUGHT ON RECORD. IN THIS CASE, IN ABSENCE OF THE CORROBORATIVE EVIDENCE, THE CONCLUSIONS DRAWN BY THE ASSESSING OF FICER AMOUNTED TO PRESUMPTIONS WITH FULL FACTS NOT ASCERTAINED. 5.5 AS COULD BE SEEN, THE INFORMATION IN DISPUTE IS AS ON 28.02.2003, AS PER THE SEIZED MATERIAL, AND VERIFIC ATION OF THE BOOKS OF APPELLANT AS WELL AS THE BOOKS OF M/S KMS POWER LTD, AS ON THE SRI K. SUDHIR :- 21 -: DATE MAY GIVE CORRECT PICTURE AS TO THE NATURE AND RELEVANCE IN THE HANDS OF EITHER OF THEM. TO ASCERTAIN THE CORROBORA TIVE FACTS AS TO THE SAID INFORMATION AS ENSHRINED IN THE SEIZED MAT ERIAL AND TO GIVE A FINDING TO THE ASSESSING OFFICER IS DIRECTED TO E XAMINE THE BOOKS OF APPELLANT AND M/S KMS POWER LTD, AS ON 28.2.2003. A CCORDINGLY, ON THIS ISSUE, THE APPEAL IS TREATED AS ALLOWED, SUBJE CT TO THE ABOVE VERIFICATION. 38. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE DO NO T SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) EX CEPT TO STATE THE LD.CIT(A) MAY NOT HAVE ANY SET ASIDE POWERS. THER EFORE, IN THE INTEREST OF JUSTICE, WE REITERATE THE SAME DIRECTION AND DIRECT THE AO TO EXAMINE THE ISSUE AFRESH ON THE BASIS OF EVIDENC E PLACED ON RECORD. GROUND IS PARTLY ALLOWED FOR STATISTICAL PURP OSES. 39. COMING TO THE ADDITION OF OTHER AMOUNT OF RS. 21,92,000/-, LD.CIT(A) GAVE A FINDING THAT IS NOTHING BUT DUPLICATION OF THE SAME AMOUNT. HIS FINDINGS IN PAR A 6.3 ARE AS UNDER: 6.3. THE OBSERVATIONS OF THE ASSESSING OFFICER AND THE WRITTEN SUBMISSIONS OF THE APPELLANT ARE PERUSED. A S COULD BE SEEN FROM THE COPY OF THE SEIZED MATERIAL (PAGE NO.12 & 13) OF A/KMSP/1, THERE IS NO MATERIAL CHANGE IN THE INFORM ATION WHICH WAS SUBJECT MATTER OF DISCUSSION IN THE EARLIER PAR AGRAPH EXCEPT DIFFERENCE IN THE EXTENT OF THE AREA OF THE LAND AN D COST OF THE LAND MENTIONED' IN THE SEIZED MATERIAL. IN EARLIER PARAG RAPH, THE PAYMENTS WERE TAKEN PLACE BETWEEN 15.5.2002 AND 28. 2.2003 FOR THE LAND OF 9.36 ACRES WITH A COST OF RS.20,60,000 INDICATED AS AGAINST 11.36 ACRES FOR RS.25,00,000, APART FROM TH E INTEREST WHICH IS RS.6,00,000 FOR THE SUBJECT MATTER OF REFERENCE, AS AGAINST RS. 4,94,400 AS REFERRED IN EARLIER PARAGRAPH. THUS, IT CLEARLY INDICATES THAT THE TRANSACTIONS AS REFLECTED IN PAGE NO.13 IS REPLICA OF TRANSACTIONS INDICATED ON PAGE NO.12 OF THE SAID AN NEXURE OF THE SEIZED MATERIAL EXCEPT SMALL CHANGE IN AREA OF THE LAND AND COST OF THE LAND. THE DATES OF PAYMENTS IN BOTH THE PAGES O F SEIZED MATERIAL REMAIN THE SAME. UNDER THE CIRCUMSTANCES, IT CAN BE SAFELY CONCLUDED THAT IT IS THE SAME TRANSACTION FOR AN IN CREASED AREA OF LAND WITH AN ADDITIONAL COST FOR INCREASED AREA WIT H THE AMOUNTS OF SRI K. SUDHIR :- 22 -: PAYMENTS REMAIN THE SAME I.E. RS.21,92,000. UNDER T HESE CIRCUMSTANCES, THE ADDITION OF RS.21,92,000 WHICH I S DUPLICATION OF THE EARLIER TRANSACTIONS UNDER REFERENCE BY ALL THE MEANS AND EVIDENCE. ON THE LINES OF THE DISCUSSION IN EARLIER PARAGRAPH, IT IS A DIFFICULT SITUATION TO UPHOLD THE ADDITIONS, MERELY ON THE BASIS OF SEIZED MATERIAL INFORMATION, WITHOUT ANY CORROBORAT IVE EVIDENCE. FURTHER, IN THIS CASE, THE ADDITION IS CONSIDERED T O BE A DUPLICATION OF THE TRANSACTION ALREADY DISCUSSED AND AS SUCH IS NOT A SUSTAINABLE ADDITION. SINCE THE AMOUNTS REMAIN THE SAME, THE ADDITION CANNOT BE MADE TWICE. ACCORDINGLY, THE ADD ITION OF RS.21,92,000 IS DIRECTED TO BE DELETED AND THIS GRO UND OF APPEAL IS TREATED AS ALLOWED. 39.1. SINCE THE AMOUNT IS DUPLICATION OF THE EARLIER ENTRIES WHICH IS ALREADY CONSIDERED IN THE EARLIER GROUND AN D CONSIDERING THE FACT THAT AO HAS NOT EXAMINED THE ISSUES CORRECTLY, W E DO NOT INTERFERE WITH THE ORDER OF THE CIT(A) IN DELETING THE A MOUNT. SAME AMOUNT WAS ALREADY RESTORED TO THE FILE OF THE AO IN EAR LIER GROUND, MAKING A SEPARATE ADDITION OF THIS AMOUNT DOES NOT AR ISE, HENCE CORRECTLY DELETED. REVENUES GROUND ON THIS IS ACCO RDINGLY DISMISSED. 40. THE THIRD ISSUE WHICH HAS CONTESTED BY THE REVEN UE IS ON DELETION OF AN AMOUNT OF RS. 29,77,000/- TOWARDS UNEXPLAINED INVESTMENTS. THE ISSUE IS CONSIDERED BY THE LD.CIT(A ) AS UNDER WHICH IS SELF-SPEAKING. 7.3. THE OBSERVATIONS OF THE ASSESSING OFFICER AND THE WRITTEN SUBMISSIONS OF THE APPELLANT ARE PERUSED. A S COULD BE SEEN FROM THE COPY OF THE SEIZED MATERIAL (PAGE NO.2) OF A/KMSP/1, THE STATEMENT OF THE AFFAIRS INDICATED THEREIN ARE THE RECEIPTS AND PAYMENTS OF M/S KMS POWER LIMITED AS ON 30.11.2002, WHEREIN RECEIPTS WERE SHOWN AGAINST VARIOUS NAMES SUCH AS I REDA INTEREST ON FDR, WHILE INDICATING THE OTHER AMOUNTS AGAINST NAMES SUCH AS MR.PRASAD, MR.K.SUDHIR, M/S NUZUVEEDU SEEDS ETC. WH ICH IS TOTALLED UP AT RS.2466.63 APPARENTLY TO BE IN LAKHS AND AGAINST SUCH AMOUNTS THE PROJECT COST WAS SHOWN AT RS.2081. 59 AND THE OPERATING EXPENSES QUANTIFIED AT RS.312.29 TOTALLIN G RS.244.4 SRI K. SUDHIR :- 23 -: APPARENTLY IN LAKHS, LEAVING A SURPLUS OF RS.62.23 LAKHS AGAINST WHICH FURTHER AMOUNT WERE SHOWN AS OTHER ADVANCES ( 58.98), LEAVING A NET SURPLUS OF RS.3.25 APPEARED TO BE IN LAKHS. THE IMPORTANT THING TO BE NOTED HERE IS THAT NO SIGNATU RE WAS APPENDED AND THE AMOUNTS SHOWN AGAINST THE NAMES OF MR.K.SUD HIR ARE SHOWN AT TWO PLACES I.E. RS.4.02 LAKHS AND RS.25.75 LAKHS AND ARE NOT INDICATED WITH ANY SPECIFIC NOTING AS REGARDS T O THE NATURE OF THE AMOUNTS. 7.4 AS PER THE INFORMATION AVAILABLE ON RECORD, IT IS NOT KNOWN WHETHER THIS INFORMATION WAS PUT TO THE APPEL LANT AND HIS EXPLANATION WAS EXTRACTED ON THE ISSUE. FURTHER, AS CONTENDED BY THE APPELLANT, THE SEIZED DOCUMENT IN THE FORM OF L OOSE SHEET WAS NEITHER SIGNED NOR IN THE HAND WRITING OF ANYONE TO PIN POINT SAME AS THE SPECIFIC INFORMATION AS REGARDS TO THE NATUR E OF TRANSACTION OF THE APPELLANT VIS-A-VIS M/S KMS POWER LTD. IN ABSEN CE OF THE CORROBORATIVE EVIDENCE, THE NOTINGS ON THE SEIZED M ATERIAL MAY BECOME IRRELEVANT AND UNRELIABLE TO ARRIVE AT A SPE CIFIC CONCLUSION. IN A CASE/SITUATION LIKE THIS, THE CORRECT ALTERNATIVE FOR THE ASSESSING OFFICER WAS TO CARRY OUT THE FURTHER INVESTIGATIONS AND ARRIVE AT THE LOGICAL CONCLUSIONS. HOWEVER, IN THIS CASE, NO SUCH ATTEMPT OR EFFORT APPEARS TO HAVE TAKEN PLACE TO GIVE A CONCLUSIVE FI NDING ON THE INFORMATION AS AVAILABLE ON THE SEIZED MATERIAL. TH E JUDICIAL RULINGS ALL ALONG HELD THE VIEW THAT THE ADDITION COULD NOT BE MADE ON THE BASIS OF A SEIZED MATERIAL PRESUMED TO BE CODED FIG URES OR THE ACTUAL FIGURES, WITHOUT BRINGING ANY CORROBORATIVE MATERIAL EVIDENCE, IN SUPPORT THEREOF, AND NO ADDITION CAN BE MADE, IF PRIMARY BURDEN IS DISCHARGED BY THE APPELLANT. IT WAS ALSO HELD BY VARIOUS JUDICIAL RULINGS THAT ADDITION BASED ON LOOSE SHEETS AND PRE SUMPTIONS OF THE ASSESSING OFFICER BASED THEREON COULD NOT BE SUSTAI NED IN ABSENCE OF ANY CORROBORATIVE MATERIAL OR EVIDENCE BROUGHT O N RECORD. IN THIS CASE, IN ABSENCE OF THE CORROBORATIVE EVIDENCE, THE CONCLUSIONS DRAWN BY THE ASSESSING OFFICER AMOUNTED TO PRESUMPT IONS AND ADDITIONS MADE ON THE BASIS OF THE PRESUMPTIONS ARE NOT SUSTAINABLE. IN THIS CASE, THE APPELLANT HAS CONTEN DED THAT THE ENTRIES IN THE SEIZED MATERIAL ARE NOT SIGNED BY AN YONE AND AS SUCH IT IS NOT CORRECT TO SAY THAT THE TRANSACTION IS RE LATED TO THE APPELLANT. IN ABSENCE OF ANY CORROBORATIVE EVIDENCE /INFORMATION, THE APPELLANT'S CONTENTION IS THAT ADDITIONS CANNOT BE MADE BY THE ASSESSING OFFICER. IN THIS CONTEXT, IT HAS BEEN PRE SUMED THAT THE APPELLANT HAS DISCHARGED THE OBLIGATION OF EXPLAINI NG THE ENTRIES AS POINTED OUT BY THE ASSESSING OFFICER IN THE SEIZED MATERIAL, THEREBY CASTING THE ADDITIONAL RESPONSIBILITY ON THE ASSESS ING OFFICER TO PROVE THAT THE FIGURES AS JOTTED DOWN IN THE SEIZED MATERIAL REPRESENT THE INVESTMENTS/INCOME OF THE APPELLANT, FOR WHICH THE ASSESSING OFFICER HAS NOT BROUGHT IN ANY ADDITIONAL EVIDENCE OR INFORMATION ON THE RECORD !O DISPROVE THE CONTENTIO N OF THE APPELLANT. SRI K. SUDHIR :- 24 -: IT IS ALSO RELEVANT TO MENTION THAT THE ASSESSING O FFICER HAS BROUGHT THE SAID AMOUNT FOR TAXATION, CLAIMING IT TO BE THE UNEXPLAINED PAYMENTS WITHOUT INDICATING ANY DETAILS AS REGARDS TO THE PURPOSE, THE PERSONS OR THE OCCASION FOR WHICH THE SAID AMOU NTS HAVE BEEN PAID WITH A FURTHER REFERENCE TO THE BOOKS OF THE A PPELLANT OR THE OTHER CONCERNS OF THE GROUP. BASED ON THE FACTS AND IN VIEW OF THE EXPLANATION OFFERED BY THE APPELLANT, THERE IS NO R EASONABLE GROUND FOR THE ASSESSING OFFICER TO COME TO THE CONCLUSION THAT SUCH AMOUNTS REPRESENT THE INCOME OF THE APPELLANT. ACCO RDINGLY, THE ADDITION OF RS.29,77,000 STANDS DELETED AND THIS GR OUND OF APPEAL IS TREATED AS ALLOWED. 41. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE DO NO T SEE ANY REASON TO INTERFERE WITH THE WELL REASONED ORDER OF THE LD.CIT(A) AS NOTHING WAS BROUGHT ON RECORD TO LINK TH E TRANSACTIONS IN THE DOCUMENT TO EITHER ASSESSEE OR TO THE COMPANY. IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE FROM THE REVENUE, ADDITION CANNOT BE SUSTAINED IN THE HANDS OF ASSESSEE, UNLESS IT IS RELATED TO THE TRANSACTIONS OF ASSESSEE. IN VIEW OF THI S, THE GROUND IS DISMISSED. 42. IN THE RESULT, REVENUES APPEAL IN ITA NO. 961/HYD/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE S. AY. 2005-06 : REVENUES APPEAL IN ITA NO. 962/HYD/2012 43. IN THIS ASSESSMENT YEAR, AO MADE AN ADDITION OF RS. 2,49,00,000/- TOWARDS UNEXPLAINED INVESTMENTS BASED ON THE ENTRIES ACCEPTED TO PAGE 114 OF ANNEXURE A/KMSP/1 OF THE SEIZED MATERIAL. THE SAID DOCUMENT INDICATES THE DETAILS AS U NDER: SRI K. SUDHIR :- 25 -: NAME AMOUNT (RS. IN LAKHS) K SUDHEER 160 V MANORAMA 5 VAMSHI KRISHNA 5 D RAJENDRA PRASAD 10 K ANIL KUMAR 10 P M MADAN MOHAN 15 P GAYATHRI LATHA 10 V SASHI KUMAR 10 N PRAKASH RAO 5 DURGA PRASAD 5 RAM SAI REDDY 5 J A MOHAN RAO 5 K ANAND 4 TOTAL 249 44. BEFORE LD. CIT(A), ASSESSEE EXPLAINED THAT MOST OF THE INVESTMENTS ARE MADE BY GROUP COMPANIES AND HAS FURNI SHED RELEVANT INFORMATION AND CLARIFICATIONS AND CONTENDED T HAT AO HAS NEITHER EXAMINED NOR ACCEPTED. ON THE BASIS OF THE W RITTEN SUBMISSIONS AND RECONCILIATION FURNISHED BY ASSESSE E, LD.CIT(A) DELETED THE AMOUNT BY STATING AS UNDER: 5.3 THE OBSERVATIONS OF THE ASSESSING OFFICER AND THE WRITTEN SUBMISSIONS OF THE APPELLANT ARE PERUSED. AS INDICA TED EARLIER, THE APPELLANT MADE CERTAIN INVESTMENTS IN THE SHARE CAP ITAL OF M/S KMS POWER LIMITED AND M/S METKOKE INDUSTRIES LIMITED AN D SUCH INVESTMENTS AS ON THE DAY OF SEARCH WERE INDICATED AT RS.1,74,8 0,200 AND RS.2,41,50,000 RESPECTIVELY. AS PER THE INFORMATION FURNISHED, THE TOTAL INVESTMENTS OF RS.2,41,50,000 WAS INVESTED IN M/S M ETKOKE INDUSTRIES LIMITED DURING THE YEAR UNDER REFERENCE AND THE SOU RCES FOR SUCH INVESTMENTS WERE SHOWN TO BE FROM THE FOLLOWING COM PANIES; S.NO. NAME DATE CHEQUE NO. AMOUNT (RS) 1. GB TRADING & INVESTMENT LTD 31.08.2004 920336 20,00,000 2. BHAGYAMNAGAR INVESTMENT & TRADING PVT LTD., 16.02.2005 133377 42,00,000 3. INFOTECH INFIN. & TRADING PVT LTD., 18.01.2005 341157 42,00 ,000 4. GB TRADING & INVESTMENT LTD., 11.02.2005 947653 1,24,00,000 5. INFOTECH INFIN. & TRADING PVT LTD., 14.03.2005 341167 13,50,000 TOTAL 2,41,50,000 SRI K. SUDHIR :- 26 -: 5.4 AS COULD BE SEEN FROM THE ABOVE TABLE, THE TOTA L INVESTMENTS AND THE SOURCES FOR THE SAME ARE STANDING AT RS.2,41,50 ,000 WHICH MEANS THE INVESTMENTS ARE EXPLAINED WITH THE IDENTIFIABLE SOU RCES. THE APPELLANT HAS FURNISHED THE CONFIRMATIONS/ACCOUNT EXTRACTS BY THE ABOVE MENTIONED ENTITIES/COMPANIES CONFIRMING THE AMOUNTS LENT BY T HEM TO THE APPELLANT MR.K.SUDHIR. AS IT HAS BEEN OBSERVED, THE ASSESSING OFFICER HAS RESORTED TO THE ADDITION BASED ON THE CONCLUSION THAT THE AB OVE MENTIONED COMPANIES BEING THE CREDITORS WERE NOT COOPERATING IN THE ENQUIRIES, THOUGH THEY ARE RELATED TO THE SAME GROUP I..E SUJA NA GROUP OF COMPANIES. THIS CANNOT BE A BASIS OR GROUND FOR MAK ING THE ADDITION WHER. THE CREDITORS HAVE GIVEN THE CONFIRMATIONS IN DICATING THE AMOUNTS THAT HAVE BEEN GIVEN TO THE APPELLANT AS LOANS. THE JUDICIAL RULINGS ALL ALONG HELD THE VIEW THAT THE ADDITION COULD NOT BE MADE ON THE BASIS OF A SEIZED MATERIAL WITHOUT BRINGING ANY CORROBORATIVE MATERIAL EVIDENCE, IN SUPPORT THEREOF, AND NO ADDITION CAN BE MADE, IF PR IMARY BURDEN IS DISCHARGED BY THE APPELLANT. FURTHER, AS COULD BE S EEN FROM THE SEIZED MATERIAL, THE ENTIRE AMOUNT OF RS.249 LAKHS, WAS NO T SHOWN TO HAVE BEEN INVESTED BY THE APPELLANT AND THE AMOUNT INDICATED AT SUCH PAGE OF THE SEIZED MATERIAL, AGAINST THE NAME OF THE APPELLANT STOOD ONLY AT RS.160.00 LAKHS. THIS AMPLY PROVES THAT WHAT HAS BEEN NOTICED FROM THE SEIZED MATERIAL IS NOT THE FULL AND CORRECT INFORMATION AN D AS SUCH IT IS NOT FULLY RELIABLE. THE INVESTMENTS CONFIRMED BY THE APPELLAN T IS MORE THAN WHAT HAS BEEN INDICATED IN THE SEIZED MATERIAL. FURTHER, THE AMOUNTS SHOWN AS AGAINST THE OTHER NAMES, INDICATED AS ASSOCIATES OF MR.K.SUDHIR, THE APPELLANT, CANNOT BE ASSESSED IN THE HANDS OF THE A PPELLANT. WHAT IS NOT RELATABLE TO THE APPELLANT/ASSESSEE CANNOT BE TREAT ED AS THE INCOME OF THE APPELLANT, UNLESS IT IS PROVED OTHERWISE. NO SUCH I NFORMATION IS AVAILABLE TO THE ASSESSING OFFICER ON THIS ISSUE. 5.5 IN THIS CASE, THE ENTIRE SOURCES OF THE INVESTM ENTS TO THE EXTENT OF RS.2,41,50,000 ARE EXPLAINED BY THE APPELLANT TH ROUGH THE CONFIRMATION LETTERS FURNISHED BY THE CREDITORS WHEREIN THE BASI C PARAMETERS OF GENUINE CREDITS SUCH AS THE IDENTITY OF THE CREDITORS, GENU INENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE CREDITORS ARE CLEARLY I NDICATED. THE SAID CREDITORS WERE ASSESSED TO TAX IN THEIR OWN RIGHT A ND THE RIGHT THING FOR THE ASSESSING OFFICER WOULD HAVE BEEN TO VERIFY THE CRE DITWORTHINESS OF SUCH CREDITORS EITHER BY EXAMINING HIMSELF OR BY WRITING TO THE ASSESSING OFFICERS OF THE SAID CREDITORS. THIS VIEW WAS CLEAR LY EXPRESSED BY THE HON'BLE SUPREME COURT IN THE CASES OF (I) CIT VS GU JARAT HEAVY ELECTRICALS 256 ITR 795 (SC) (II) CIT VS ORISSA CORPORATION PVT LTD 159 ITR 78 (SC). IN THIS CASE, THE APPELLANT HAS DISCHARGED HIS RESPONS IBILITY BY FURNISHING THE RELEVANT INFORMATION RELATED TO THE CREDITORS THERE BY SHIFTING THE BURDEN TO THE ASSESSING OFFICER. BASED ON THE FACTS OF THE CA SE AS WELL AS THE RATIOS OF THE DECISIONS OF THE HON'BLE SUPREME COURT IN TH E ABOVE REFERRED CASE LAWS, I AM OF THE OPINION THAT THERE IS NO BASIS FO R THE ASSESSING OFFICER TO ASSESS SUCH CREDITS IN THE HANDS OF THE APPELLANT E ITHER IN THE FORM OF UNEXPLAINED INVESTMENTS OR IN THE FORM OF UNEXPLAIN ED CREDITS. SRI K. SUDHIR :- 27 -: ACCORDINGLY, THE ADDITION OF RS. 2,49,00,000 STANDS DELETED AND THIS GROUND OF APPEAL IS TREATED AS ALLOWED. 45. AFTER CONSIDERING THE RIVAL CONTENTIONS AND PERUSI NG THE SUBMISSIONS ON THE ISSUE, WE DO NOT SEE ANY REASON TO INTERFERE AS THERE ARE SOURCE OF FUNDS FROM VARIOUS COMPANIES AND THEY HAVE FILED CONFIRMATIONS. AS RIGHTLY POINTED OUT BY THE LD. CIT(A), THE ENTIRE AMOUNT ALSO WAS NOT INVESTED IN THE NAME OF ASSE SSEE. NOTHING WAS BROUGHT ON RECORD TO COUNTER THE FINDINGS O F THE LD.CIT(A). IN VIEW OF THIS, THE ORDER OF THE CIT(A) IS UPHELD AND REVENUES CONTENTIONS ARE DISMISSED. 46. IN THE RESULT, REVENUES APPEAL IN ITA NO. 962/HYD/2012 IS DISMISSED. 47. TO SUM-UP, REVENUE APPEALS IN ITA NOS. 957, 96 0 & 962/HYD/2012 ARE DISMISSED AND ITA NO. 961/HYD/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ASSESSEES APPEALS I N ITA NO. 875/HYD/2012 AND ITA NO. 876/HYD/2012 ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 19 TH AUGUST, 2016 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 19 TH AUGUST, 2016 TNMM SRI K. SUDHIR :- 28 -: COPY TO : 1. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCL E-5, HYDERABAD. 2. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-5, HYDERABAD. 3. SRI K. SUDHIR, JUBILEE HILLS, HYDERABAD. C/O. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 4. COMMISSIONER OF INCOME TAX (APPEALS)-VII, HYDERA BAD. 5. COMMISSIONER OF INCOME TAX (CENTRAL), HYDERABAD. 6. D.R. ITAT, HYDERABAD. 7. GUARD FILE.