Appeal Details
Counselvise Citation
[2013] 120 COUNSELVISE.COM (IT) 2769 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
10 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
10-05-2013
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Assessment Year
2009-2010
Appeal Filed On
22-06-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER SL. NO. ITA NO. & A.Y. APPELLANT RESPONDENT 1. ITA NO. 987/HYD/2012 A.Y. 2009-10 ASST. CIT CENTRAL CIRCLE-3 HYDERABAD SRI A. AUDINARAYANA REDDY, HYDERABAD PAN: ADAPA6161B 2. C.O. NO. 118/HYD/2012 IN ITA NO. 987/HYD/ 2012; A.Y. 2009-10 SRI A. AUDINARAYANA REDDY, HYDERABAD PAN: ADAPA6161B THE ASST. CIT CENTRAL CIRCLE-3 HYDERABAD 3. ITA NO. 1110/HYD/2012 A.Y. 2005-06 4. ITA NO. 1111/HYD/2012 A.Y. 2006-07 5. ITA NO. 1112/HYD/2012 A.Y. 2007-08 6. ITA NO. 1105/HYD/2012 A.Y. 2003-04 SMT. A. RADHIKA REDDY HYDERABAD PAN: ADAPA6159M THE ASST. CIT CENTRAL CIRCLE-3 HYDERABAD 7. ITA NO. 1106/HYD/2012 A.Y. 2007-08 8. ITA NO. 1107/HYD/2012 A.Y. 2009-10 9. ITA NO. 1097/HYD/2012 A.Y. 2008-09 THE DEPUTY CIT CENTRAL CIRCLE-3 HYDERABAD SMT. A. RADHIKA REDDY HYDERABAD PAN: ADAPA6159M 10. ITA NO. 1098/HYD/2012 A.Y. 2009-10 11. ITA NO. 1108/HYD/2012 A.Y. 2005-06 SMT. A. LATHA REDDY HYDERABAD PAN: ADAPA6160A THE ASST. CIT CENTRAL CIRCLE-3 HYDERABAD 12. ITA NO. 1109/HYD/2012 A.Y. 2006-07 13. ITA NO. 988/HYD/2012 A.Y. 2008-09 THE ASST. CIT CENTRAL CIRCLE-3 HYDERABAD SMT. A. LATHA REDDY HYDERABAD PAN: ADAPA6160A 14. ITA NO. 989/HYD/2012 A.Y. 2009-10 15. ITA NO. 1100/HYD/2012 A.Y. 2004-05 SRI A. GIRISH REDDY, HYDERABAD PAN: AAKPA8613P THE ASST. CIT CENTRAL CIRCLE-3 HYDERABAD 16. ITA NO. 1101/HYD/2012 A.Y. 2005-06 17. ITA NO. 1102/HYD/2012 A.Y. 2006-07 18. ITA NO. 1103/HYD/2012 A.Y. 2007-08 19. ITA NO. 1104/HYD/2012 A.Y. 2008-09 I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 2 20. ITA NO. 1095/HYD/2012 A.Y. 2008-09 THE DEPUTY CIT CENTRAL CIRCLE-3 HYDERABAD SRI A. GIRISH REDDY, HYDERABAD PAN: AAKPA8613P 21. ITA NO. 1096/HYD/2012 A.Y. 2009-10 REVENUE BY: SRI M. RAVINDRA SAI ASSESSEE BY: SRI A.V. RAGHURAM DATE OF HEARING: 1 2.0 3 .2013 DATE OF PRONOUNCEMENT: 10.05.2013 O R D E R PER CHANDRA POOJARI, AM: THESE APPEALS BY DIFFERENT ASSESSEES AS WELL AS BY THE DEPARTMENT ARE DIRECTED AGAINST DIFFERENT ORDERS OF THE CIT(A)- VII, HYDERABAD FOR THE ABOVE ASSESSMENT YEARS. SINC E ALL THE ASSESSEES BELONG TO SAME GROUP AND CERTAIN ISSUES I NVOLVED ARE COMMON IN NATURE, ALL THESE APPEALS ARE CLUBBED TOG ETHER, HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO MMON ORDER, FOR THE SAKE OF CONVENIENCE. SRI A. AUDINARAYANA REDDY ITA NO. 1110/HYD/2012 A.Y. 2005-06 BY ASSESSEE: 2. THERE WAS A DELAY OF 35 DAYS IN FILING THIS APPEAL BY THE ASSESSEE. THE ASSESSEE FILED A PETITION FOR CONDON ING THE DELAY OF 35 DAYS ACCOMPANIED BY AN AFFIDAVIT STATING AS F OLLOWS: 'AFFIDAVIT I, A. AUDINARAYANA REDDY, S/O. A. VENKATA RAMI REDDY, AGED ABOUT 68 YEARS, RESIDENT OF PLOT NO. 530, ROAD NO. 26, JUBILEE HILLS, HYDERABAD, DO SOLEMNLY AFFIRM AND STATE AS UNDER: I AM CONVERSANT WITH THE FACTS OF THE CASE AND COMPETENT TO DEPOSE TO THE CONTENTS OF THIS AFFIDAV IT. I FILED AN APPEAL ON 16.07.2012 AGAINST THE ORDER DATED 21.3.2012, PASSED BY THE LEARNED CIT(A)-VII, HYDERABAD U/S. 250 OF THE INCOME-TAX ACT. THE APPEAL WAS REQUIRED TO BE FILED BY 11.06.2012, AS I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 3 THE SAID ORDER WAS RECEIVED ON 13.04.2012. HOWEVER, THE SAME WAS FILED ON 16.07.2012, WITH A DELAY OF 35 DAYS. I AFFIRM AND STATE THAT THE REAS ONS STATED IN THE ACCOMPANYING PETITION, PRAYING FOR CONDONATION OF DELAY, ARE TRUE AND CORRECT TO THE B EST OF MY KNOWLEDGE AND BELIEF. FOR THE REASONS SUBMITTED THEREIN THE HONBLE ITAT IS PRAYED TO CONDONE THE DELAY OF 35 DAYS IN FILING TH E APPEAL AND ENTERTAIN THE APPEAL AND PASS SUCH OTHER ORDER(S) AS THE HONBLE TRIBUNAL DEEMS FIT AND PROP ER IN THE INTEREST OF JUSTICE. SOLEMNLY AFFIRMED AND SIGNED BY ME ON THIS THE 16 TH DAY OF JULY, 2012. SIGNED DEPONENT' 2.1 WE ARE SATISFIED WITH THE REASONS ADVANCED BY THE ASSESSEE FOR CONDONING THE DELAY OF 35 DAYS IN FILI NG THIS APPEAL. ACCORDINGLY, THE DELAY OF 35 DAYS IN FILING THE APP EAL IS CONDONED AND THE APPEAL IS ADMITTED FOR ADJUDICATIO N. 3. THE FIRST GROUND IN THIS APPEAL IS WITH REGARD TO U PHOLDING ADDITION OF RS. 13.55 LAKHS BY THE CIT(A) U/S. 68 O F INCOME-TAX ACT, 1961 RECEIVED BY SRI P. MUDDU KRISHNA REDDY. 3.1 FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OB SERVED THAT THIS AMOUNT HAS BEEN RECEIVED BY THE ASSESSEE IN CASH FROM SRI P. MUDDU KRISHNA REDDY, BROTHER-IN-LAW OF THE ASSESSEE, FOR THE PURPOSE OF PURCHASE OF LAND. SIN CE THE DEAL WAS NOT MATERIALISED, THE SAID AMOUNT WAS RETURNED BACK IN THE FINANCIAL YEAR 2005-06 RELEVANT ASSESSMENT YEAR 200 6-07. THOUGH IT WAS STATED BY THE ASSESSEE THAT THE AMOUN T WAS RETURNED, THE ASSESSEE HAS NOT PRODUCED ANY DOCUMEN TARY EVIDENCE IN SUPPORT OF HIS CLAIM BEFORE THE ASSESSI NG OFFICER. THE ASSESSING OFFICER HAS EXAMINED SRI P. MUDDU KRI SHNA REDDY U/S. 131 OF THE ACT AND HIS STATEMENT WAS REC ORDED ON I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 4 25.11.2010 TO VERIFY THE GENUINENESS OF THE TRANSAC TION. ACCORDING TO THE ASSESSING OFFICER SRI P. MUDDU KRI SHNA REDDY HAD FAILED TO ESTABLISH THE GENUINENESS AND SOURCE OF RS. 13.55 LAKHS ADVANCED TO THE ASSESSEE THOUGH HE HAS STATED THAT HE HAS EXECUTED THE SUBCONTRACT FOR M/S. AMRCL AND ALS O HAVING AGRICULTURAL INCOME. THUS, BOTH THE ASSESSING OFFI CER AS WELL AS THE CIT(A) DOUBTED GENUINENESS OF THE TRANSACTION A ND THE ADDITION WAS SUSTAINED IN THE HANDS OF THE ASSESSEE . AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 3.2 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. ADMITTEDLY SIMILAR ISSUE CAME FOR CONSI DERATION IN ITA NO. 275/HYD/2012 IN THE CASE OF AMR HOSPITALITY SERVICES PVT. LTD. THE TRIBUNAL VIDE ORDER DATED 22.2.2013 HELD AS FOLLOWS: '33. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THE PRESENT CASE, THE ASSESSEE FURNISHED SATISFACTORY EXPLANATION THAT MONEY HAS BEEN CONTRIBUTED BY VARIOUS PERSONS VIZ., SRI P. MUDDUKRISHNA REDDY, SRI C. HANUMANTHA REDDY, ETC., AND FILED RESPECTIVE CONFIRMATION LETTERS IN THE CASE OF M/S. AMR HOSPITALITY SERVICES LTD. THE ASSESSING OFFICER ALSO RECORDED STATEMENT FROM SRI MUDDUKRISHNA REDDY AND SRI C. HANUMANTHA REDDY. THE SAME HAS BEEN ROUTED THROUGH BANKING CHANNELS. SIMILARLY IN THE CASE OF SANGAM SUGAR VENTURES LTD., SMT. B. SUGUNAMMA, SRI C. HANUMANTHA REDDY AND SRI DAMODAR REDDY HAVE FILED THEIR CONFIRMATION LETTERS. SWORN STATEMENT WAS ALSO RECORDED FROM SRI C. HANUMANTHA REDDY. THEY ARE INCOME-TAX ASSESSEES. IN SPITE OF THIS, THE ASSESSING OFFICER DOUBTED GENUINENESS OF THE TRANSACTIONS. THE CONTENTION OF THE ASSESSING OFFICER IS THAT THESE PERSONS ARE NAME LENDERS AND WERE USED AS A PLOY BY THE DIRECTOR OF THE ASSESSEE COMPANY TO ROUT THE UNACCOUNTED MONEY OF THE FLAGSHIP COMPANY TO THE DIRECTOR BY BRINGING THE MONEY IN THEIR NAMES. IT IS ALSO RECORDED BY THE ASSESSING OFFICER THAT THESE I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 5 NAME LENDERS HAVING FILED THEIR RETURNS OF INCOME ONLY TO EXPLAIN THE INVESTMENT SO AS TO FACILITATE THE CONVERSION OF UNACCOUNTED MONEY INTO THE ASSESSEES COMPANY. IT WAS ALSO ALLEGED THAT THE MONEY WAS ROUTED LIKE THIS AS A DEVICE TO EXPLAIN THE INVESTMENTS. HOWEVER, THE FACT IS THAT THESE PERSONS WHO HAVE MADE INVESTMENTS IN THE ASSESSEE COMPANY ARE INCOME-TAX ASSESSEES AND THE HAVE GIVEN THE CONFIRMATION LETTERS. HAD THE ASSESSING OFFICER HAS ANY DOUBT, IT SHOULD BE QUESTIONED IN THE HANDS OF INVESTORS. 34. SIMILAR ISSUE WAS CONSIDERED BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. LANCO INDUSTRIES LTD. (242 ITR 357) (AP). WHILE REJECTING THE REVENUE APPEAL, THE HIGH COURT OBSERVED THAT MERELY BY REASON OF UNSATISFACTORY EXPLANATION RELATING TO THE SOURCE OF INVESTMENT BY THE SHAREHOLDERS, THE MONEY INVESTED IN SHARES CANNOT BE TREATED AS INCOME OF THE ASSESSEE. IF THE OSTENSIBLE SHAREHOLDERS FAILED TO EXPLAIN THE MEANS OF INVESTMENT, THAT SHOULD HAVE BEEN TREATED AS UNEXPLAINED INCOME IN THEIR HANDS. IN ORDER TO ADD IT TO THE INCOME OF THE ASSESSEE THERE MUST BE A FURTHER FINDING THAT IN FACT THE SHAREHOLDERS WERE NAME LENDERS AND THE MONEY ALLEGEDLY INVESTED BY THE REALLY BELONGS TO THE DIRECTORS OF THE ASSESSEE COMPANY. IN THE PRESENT CASE, THE DEPARTMENT HAVING ACCEPTED THE RETURNS OF INCOME FILED BY THE OSTENSIBLE SHAREHOLDERS, IT CANNOT GO BACK WHILE MAKING THE ASSESSMENT OF THE ASSESSEE TO HOLD THAT THOSE SHAREHOLDERS ARE MONEY LENDERS AND INVESTMENTS WERE UNEXPLAINED. HAD THE DEPARTMENT DISREGARDED THE RETURNS FILED BY THE ALLEGED SHAREHOLDERS AS THE MONEY MOVED OUT OF THE ASSESSEES HANDS TO THE HANDS OF THE ALLEGED SHAREHOLDERS AND THEN ONLY IT CAN BE TREATED AS THE MONEY BELONGS TO THE ASSESSEE ONLY. WITHOUT BRINGING ON RECORD A FINDING TO SHOW THAT THE MONEY HAS MOVED FROM THE ASSESSEES HANDS TO THE ALLEGED SHAREHOLDERS HANDS AND HAVING ACCEPTED THE ALLEGED SHAREHOLDERS, IT IS NOT POSSIBLE TO US TO SUSTAIN THE ADDITION IN THE HANDS OF THE ASSESSEE. FURTHER, ON THE BASIS OF EVIDENCE AVAILABLE ON RECORD, IT IS NOT POSSIBLE TO HOLD I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 6 THAT THE TRANSACTIONS ARE STAGE MANAGED AND THE SHARE APPLICATION MONEY WAS RECEIVED FROM BOGUS SHAREHOLDERS WITHOUT BRINGING ON RECORD THE MONEY HAS MOVED FROM THE ASSESSEES HANDS TO THE SHAREHOLDERS. 35. AS HELD BY THE SUPREME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS PVT. LTD. (216 CTR 195) THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM THE ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW, BUT IT CANNOT BE REGARDED AS UNEXPLAINED INCOME OF THE ASSESSEE COMPANY. IN THE PRESENT CASE CONSIDERING THE FACTS OF THE CASE, AS THE DEPARTMENT FAILED TO SHOW THAT THE SHARE APPLICATION MONEY ACTUALLY EMANATED FROM THE COPPERS OF THE ASSESSEE COMPANY, ADDITION WAS RIGHTLY DELETED BY THE CIT(A) AND THE ACTION OF THE CIT(A) IS CONFIRMED.' 3.3 THE FACTS IN THE PRESENT CASE ARE SIMILAR TO THAT O NE CONSIDERED BY THE TRIBUNAL IN THE CASE CITED SUPRA. BEING SO, IN OUR OPINION, THE TRANSACTION BETWEEN THE ASSESSEE A ND SRI P. MUDDUKRISHNA REDDY IS BUSINESS TRANSACTION AND IT W AS DISCLOSED IN THEIR BOOKS OF ACCOUNT. THE BURDEN CA ST UPON THE ASSESSEE TO PROVE IDENTITY OF PARTIES, GENUINENESS OF TRANSACTIONS AND CAPACITY OF CREDITORS HAS BEEN DIS CHARGED. BEING SO, CONSIDERING THE JUDGEMENT OF THE JURISDIC TIONAL HIGH COURT IN THE CASE OF R.B. MITTAL (246 ITR 283) (AP) , WE ARE INCLINED TO DELETE THIS ADDITION. THIS APPEAL OF TH E ASSESSEE IN ITA NO. 1110/ HYD/2012 IS ALLOWED. ITA NO. 1111/HYD/2012 A.Y. 2006-07 - BY ASSESSEE : 4. THERE WAS A DELAY OF 35 DAYS IN FILING THIS APPEAL BY THE ASSESSEE. THE ASSESSEE FILED A PETITION FOR CONDON ING THE DELAY OF 35 DAYS ACCOMPANIED BY AN AFFIDAVIT AS MENTIONED IN PARA 2 OF THIS ORDER. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 7 4.1 WE ARE SATISFIED WITH THE REASONS ADVANCED BY THE ASSESSEE FOR CONDONING THE DELAY OF 35 DAYS IN FILI NG THIS APPEAL. ACCORDINGLY, THE DELAY OF 35 DAYS IN FILING THE APP EAL IS CONDONED AND THE APPEAL IS ADMITTED AND TAKEN UP FO R ADJUDICATION. 5. THE GROUND BY THE ASSESSEE IN THIS APPEAL IS WITH R EGARD TO SUSTAINING OF ADDITION OF RS. 4,83,000 RECEIVED FROM SRI D. SUBBA REDDY AND RS. 4,17,000 FROM SRI C. DASARATHAR AMA REDDY U/S. 68 OF THE ACT. 5.1 BRIEF FACTS OF THE ISSUE ARE THAT WHILE COMPUTING T HE TAXABLE INCOME OF THE ASSESSEE, THE ASSESSING OFFIC ER HAS TREATED THE AMOUNTS OF LOANS/ADVANCES SHOWN TO HAVE BEEN OBTAINED BY THE ASSESSEE FROM THE FOLLOWING PARTIES , AS UNEXPLAINED CREDITS U/S. 68 OF THE IT ACT, 1961: I. MR. D. SUBBA REDDY - RS. 4,83,000 II. MR. C. DASARATHARAMA REDDY - RS. 4,17,000 ------------------ TOTAL RS. 9,00,000 ========== 5.2 WHILE TREATING THE SAID AMOUNTS AS UNEXPLAINED IN T HE HANDS OF THE ASSESSEE, THE ASSESSING OFFICER HAS MA DE CERTAIN REMARKS AS REGARDS TO THE GENUINENESS OF THE TRANSA CTIONS AND THE CREDITWORTHINESS OF THE CREDITORS FOR ADVANCES/ LOANS. THE ADDITIONS WERE MADE BY THE ASSESSING OFFICER, IN AB SENCE OF ANY CONFIRMATIONS FURNISHED. IT WAS ONLY STATED THAT AS SESSEE HAS RECEIVED AN AMOUNT OF RS. 4,83,000 FROM MR. D. SUBB A REDDY AND RS. 4,17,000 FROM MR. C. DASARATHARAMA REDDY. IN ABSENCE OF THE PRELIMINARY INFORMATION AS REGARD TO THE CREDITS SUCH AS THE IDENTITY OF THE CREDITORS INCLUDING THE PAN, ASSESSMENT PARTICULARS, BANK ACCOUNTS, ETC. ALONG W ITH THE CREDITWORTHINESS OF THE CREDITORS, THE ASSESSING OF FICER HAS COME I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 8 TO THE CONCLUSION THAT ASSESSEE FAILED TO SUBSTANTI ATE THE SOURCES FOR THE CREDIT APPEARING UNDER THE GUISE OF ADVANCES AND AS SUCH APPLIED THE PROVISIONS OF SEC. 68 OF TH E IT ACT, 1961 AND TREATED THE ADVANCES AS THE UNEXPLAINED CREDITS . 5.3 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. AS HELD BY THE JURISDICTIONAL HIGH COUR T IN THE CASE OF R.B. MITTAL (246 ITR 283) THE ASSESSEE IS REQUIR ED TO PROVE IDENTITY OF THE PARTY, CAPACITY OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION. IN THIS CASE THE EXPLANATION GIVE N BY THE ASSESSEE DOES NOT PROVE THE CAPACITY OF THE LENDER AND GENUINENESS OF THE TRANSACTION. THE CREDITORS ARE SAID TO BE AGRICULTURISTS. HOWEVER, THE LAND HOLDING DETAILS WERE NOT FURNISHED. THE CAPACITY OF THE CREDITORS IS DOUBTE D. BEING SO, IN OUR OPINION,, THE CIT(A) IS JUSTIFIED IN SUSTAIN ING THE ADDITION. ITA NO. 1111/HYD/2012 IS DISMISSED. ITA NO. 1112/HYD/2012 A.Y. 2007-08 BY ASSESSEE : 6. THERE WAS A DELAY OF 35 DAYS IN FILING THIS APPEAL BY THE ASSESSEE. THE ASSESSEE FILED A PETITION FOR CONDON ING THE DELAY OF 35 DAYS ACCOMPANIED BY AN AFFIDAVIT STATING AS I N PARA 2 OF THIS ORDER. 6.1 THE REASONS ADVANCED BY THE ASSESSEE FOR DELAY IN F ILING THE APPEAL IN THIS CASE IS THAT THE CIT(A) ORDER WA S RECEIVED BY THE AR WHO FAILED TO HAND OVER THE SAME TO THE ASSE SSEE IN TIME. AS SUCH THERE WAS DELAY OF 35 DAYS IN FILING THIS A PPEAL. WE HAVE HEARD THE ASSESSEE REGARDING CONDONATION OF DE LAY. WE FIND THAT THERE IS REASONABLE CAUSE IN FILING THE A PPEAL BELATEDLY BY 35 DAYS. ACCORDINGLY, WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR ADJUDICATION. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 9 7. THE FIRST GROUND IN THIS APPEAL IS WITH REGARD TO SUSTAINING OF ADDITION U/S. 68 OF THE ACT WITH REGA RD TO AMOUNT RECEIVED FROM THE FOLLOWING PARTIES: (1) MRS. A. RADHA REDDY - RS. 6,00,000 (2) SRI SRINIVASULU - RS. 12,25,000 (3) SRI S. MADHUSUDAN REDDY - RS. 9,75,000 -------------------- TOTAL RS. 28,00,000 =========== 7.1 BRIEF FACTS OF THE ISSUE ARE THAT WHILE COMPUTING T HE TAXABLE INCOME OF THE ASSESSEE, THE ASSESSING OFFIC ER HAS TREATED THE AMOUNTS OF LOANS/ADVANCES SHOWN TO HAVE BEEN OBTAINED BY THE ASSESSEE FROM THE FOLLOWING PARTIES , AS UNEXPLAINED CREDITS U/S. 68 OF THE IT ACT, 1961: I) MRS. A. RADHA REDDY - RS. 6,00,000 II) SRI SRINIVASULU - RS. 12,25,000 III) SRI S. MADHUSUDAN REDDY - RS. 9,75,000 ------------------- - TOTAL RS. 28,00,000 =========== 7.2 WHILE TREATING THE SAID AMOUNTS AS UNEXPLAINED IN T HE HANDS OF THE ASSESSEE, THE ASSESSING OFFICER HAS MA DE CERTAIN REMARKS AS REGARDS TO THE GENUINENESS OF THE TRANSA CTIONS AND THE CREDITWORTHINESS OF THE CREDITORS FOR ADVANCES/ LOANS. THE ADDITIONS WERE MADE BY THE ASSESSING OFFICER, IN AB SENCE OF ANY CONFIRMATIONS FURNISHED. IT WAS ONLY STATED THAT A SSESSEE HAS RECEIVED AN AMOUNT OF RS. 6,00,000 FROM MRS. RADHA REDDY THROUGH BANK ACCOUNT AND AN AMOUNT OF RS. 12,25,000 RECEIVED FROM SRI SRINIVASULU OF THIRUMALAREDDY PALEM VILLAG E AND RS. 9,75,000 FROM S. MADHUSUDHAN REDDY OF VENKATAREDDYP ALEM VILLAGE, RESPECTIVELY. IN ABSENCE OF THE PRELIMINA RY INFORMATION AS REGARD TO THE CREDITS SUCH AS THE IDENTITY OF TH E CREDITORS INCLUDING THE PAN, ASSESSMENT PARTICULARS, BANK ACC OUNTS, ETC. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 10 ALONG WITH THE CREDITWORTHINESS OF THE CREDITORS, T HE ASSESSING OFFICER HAS COME TO THE CONCLUSION THAT ASSESSEE FA ILED TO SUBSTANTIATE THE SOURCES FOR THE CREDIT APPEARING U NDER THE GUISE OF ADVANCES AND AS SUCH ATTRACTED THE PROVISI ONS OF SEC. 68 OF THE IT ACT, 1961. 7.3 THE LEARNED AR SUBMITTED THAT OUT OF THE ABOVE, RS. 6,00,000 WAS RECEIVED FROM SMT. RADHA REDDY BY CHEQ UE. THE BALANCE AMOUNT WAS RECEIVED FROM SRI SRINIVASULU AN D SRI MADHUSUDAN REDDY BY CASH. HE SUBMITTED THAT THE AS SESSEE HAS FILED CONFIRMATION LETTERS FROM THESE PARTIES B EFORE THE CIT(A) AND THE SAME WERE VERIFIED BY THE ASSESSING OFFICER DURING THE COURSE OF REMAND PROCEEDINGS. IN SPITE OF THIS, THIS WAS NOT ACCEPTED BY THE DEPARTMENT HOLDING THAT THE SE ARE SELF- SERVING DOCUMENTS. HE SUBMITTED THAT THE TRANSACTI ON ARE GENUINE AND THE ADDITION HAS TO BE DELETED. 7.4 THE LEARNED DR RELIED ON THE ORDER OF THE CIT(A) AN D ALSO ON THE JUDGEMENT OF JURISDICTIONAL HIGH COURT IN TH E CASE OF R.B. MITTAL (CITED SUPRA). 7.5 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. IN THIS CASE THE ASSESSEE HAS FILED C ONFIRMATION LETTERS. AFTER FILING CONFIRMATION LETTERS, IF THE ASSESSING OFFICER HAS ANY DOUBT REGARDING GENUINENESS OF THE TRANSACT ION, HE SHOULD HAVE MADE FURTHER ENQUIRY. WITHOUT MAKING F URTHER ENQUIRY, THE ADDITION WAS MADE. IN OUR OPINION,, I T IS APPROPRIATE TO REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR FURTHER VERIFICATION. IN THE RESULT, A SSESSEE'S APPEAL IN ITA NO. 1112/HYD/2012 IS PARTLY ALLOWED FOR STAT ISTICAL PURPOSES. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 11 ITA NO. 987/HYD/2012 A.Y. 2009-10 - BY REVENUE : CO NO. 118/HYD/2012 A.Y. 2009-10 BY ASSESSEE : 8. THE DEPARTMENT RAISED THE GROUND THAT THE CIT(A) HA D ERRED IN DELETING THE ADDITION MADE U/S. 68 OF THE ACT RECEIVED FROM SRI P. MUDDU KRISHNA REDDY AT RS. 70 LAKHS. T HE ASSESSEE ALSO FILED A CROSS OBJECTION IN CO NO. 118 /HYD/2012 WITH REGARD TO SUSTAINING ADDITION OF RS. 10.75 LAK HS RECEIVED FROM SRI C. JAYARAMI REDDY AND RS. 9.2 LAKHS RECEIV ED FROM SRI P. DAMODAR REDDY. 8.1 BRIEF FACTS OF THE ISSUE ARE THAT THE OBSERVATIONS OF THE ASSESSING OFFICER AS REGARDS TO THE LOANS/ ADVANCES OBTAINED FROM THE ABOVE PARTIES/CREDITORS, WITH REFERENCE TO THE GENUINENESS OF THE TRANSACTIONS AND CREDIT-WORTHINE SS OF THE CREDITORS, RUN AS UNDER; (I) MR. P. MUDDU KRISHNA REDDY WAS SUMMONED AND A STATEMENT WAS RECORDED ON 25.11.2010 WHEREIN IT WAS REVEALED THAT HE HAS MAINTAINED THE BOOKS OF ACCOUN TS FOR THE PROPRIETARY CONCERN VIZ. M/S PMK CONSTRUCTIONS WHICH CARRIED OUT SUB-CONTRACT WORKS FOR M/S. AMRCL, BUT BOOKS OF ACCOUNTS WERE STATED T O BE NOT PRODUCED BEFORE THE ASSESSING OFFICER. BASED ON THE FINDINGS AS WELL AS THE CONTENTS OF THE SWORN STATEMENT, THE ASSESSING OFFICER HAS DRAWN CERTAIN CONCLUSIONS AS REGARDS TO THE TRANSACTIONS OF MR. A . AUDINARAYANA REDDY AND OTHER FAMILY MEMBERS WITH MR. PMK REDDV, FROM THE POINT OF VIEW OF GENUINENES S OF THE TRANSACTION AND CREDITWORTHINESS OF THE CREDITORS. (A) THERE IS NO WRITTEN AGREEMENT FOR THE SUB-CONTRACT WORK BETWEEN M/S. AMRCL AND M/S PMK CONSTRUCTIONS. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 12 (B) M/S PMK CONSTRUCTIONS HAS NOT DEDUCTED ANY AMOUNT ON ACCOUNT OF PROVIDENT FUND, ESI & SERVICE TAX AND OTHER RELATED STATUTORY DUES WHILE MAKING THE PAYMENTS. (C) MR.PMK REDDY FILED HIS RETURN OF INCOME FOR THE FIRST TIME FOR ASSESSMENT YEAR 2007-08 WITH PAN ACQUIRED AS RECENTLY AS ON 15.2.2007 WHICH INDICATES THAT RETURN OF INCOME WAS FILED TO IMPRES S UPON THE INCOME TAX DEPARTMENT. (D) ALL THE CREDITS INTO THE BANK ACCOUNTS OF M/S PMK CONSTRUCTIONS WERE ONLY FROM M/S AMRCL AND IMMEDIATELY ON DEPOSIT OF THE MONIES RECEIVED, THE SAME WERE WITHDRAWN. (E) MR.PMK REDDY IS ONLY A NAME LENDER TO THE FAMILY MEMBERS OF MR.A.AUDINARAYANA REDDY OR MR.A.MAHESH REDDY AND THEIR FAMILY MEMBERS AND THE UNACCOUNTED INCOME EARNED BY THEM WERE ROUTED BACK TO THEM THROUGH MR.PMK REDDY. (F) THE PROJECTION OF MR.PMK REDDY AS SUB-CONTRACTOR OF M/S AMRCL IS ONLY A PLOY ADOPTED TO GIVE A COLOUR OF GENUINENESS TO THE TRANSACTIONS. (G) MR.PM K REDDY HAS NO CREDITWORTHINESS AS HE IS ONLY A CONDUIT FOR MR. A. MAHESH REDDY AND HIS FAMILY MEMBERS. (II) REGARDING THE ADDITION OF RS. 9,20,000 BEING THE SUNDRY CREDITOR ON THE LIABILITIES SIDE OF THE BALA NCE SHEET IN THE NAME OF MR. P. DAMODAR REDDY, PROP. OF I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 13 M/S SAIBABA CONSTRUCTIONS, THE OBSERVATIONS OF THE ASSESSING OFFICER WAS THAT OUT OF RS. 65,00,000 STA TED TO HAVE BEEN RECEIVED AS ADVANCE FROM M/S SAIBABA CONSTRUCTIONS, THE ASSESSEE/ASSESSEE HAD ADMITTED A N AMOUNT OF RS. 55,80,000 FOR THE FINANCIAL YEAR 2007 -08 RELEVANT TO THE AY 2008-09 AS UNDISCLOSED INCOME U/ S 132(4) SINCE THE ASSESSEE COULD NOT SUBSTANTIATE TH E TRANSACTION PROPERLY WITH CORROBORATIVE EVIDENCE, LEAVING A FURTHER BALANCE OF RS. 9,20,000 TO BE EXPLAINED WITH EVIDENCE. (III) REGARDING THE ADDITION OF RS. 10,75,000 BEING THE SUNDRY CREDITOR ON THE LIABILITIES SIDE OF THE BALA NCE SHEET IN THE NAME OF MR. C. JAYARAMI REDDY, THE OBSERVATIONS OF THE ASSESSING OFFICER WAS THAT OUT OF THE TOTAL ADVANCES OF RS. 20,75,000 RECEIVED BY THE ASSESSEE FROM THE CREDITOR, THE ASSESSEE HAD ADMITT ED AN AMOUNT OF RS. 10,00,000 AS UNDISCLOSED INCOME U/S 132(4) OF THE IT ACT, 1961 SINCE THE ASSESSEE C OULD NOT SUBSTANTIATE THE TRANSACTION PROPERLY WITH EVIDENCE, LEAVING A BALANCE OF RS. 10,75,000 TO BE EXPLAINED WITH THE NEEDED EVIDENCE. 8.2 IN TREATING THE SAID AMOUNTS AS UNEXPLAINED CREDITS , THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT EVEN IF SUCH PAYMENTS ARE MADE THROUGH BANK AND BY WAY OF CHEQUE S, STILL THEN IN VIEW OF SETTLED PROPOSITION OF LAW, THE ASS ESSING OFFICER CAN ENQUIRE INTO THE SAME AND IT IS THE ASSESSEE WH O HAS TO SATISFY THE ASSESSING OFFICER ABOUT THE GENUINENESS OF THE SAME AND ON FAILURE TO DO SO, THE PROVISIONS OF SEC. 68 ARE APPLICABLE TO THE ASSESSEE WITH ALL ITS CONSEQUENCES. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 14 8.3 THE ASSESSEE OBJECTED TO THE ABOVE ADDITION ON ACCO UNT OF TREATING THE ADVANCES/CREDITS FROM MR.PMK REDDY, MR . P. DAMODAR REDDY, MR. C. JAYARAMI REDDY AND ALSO M/S A SHIANA MERCANTILE PVT. LTD, AS UNEXPLAINED CREDITS BEFORE THE CIT(A). IT WAS CONFIRMED BY THE ASSESSEE THAT ALL THE AMOUNTS OBTAINED/RECEIVED FROM THE CREDITORS, WERE BY CHEQU ES AND THROUGH PROPER BANKING CHANNELS AND ARE WELL SUPPOR TED BY THE CONFIRMATION LETTERS FURNISHED BY THE CREDITORS. IT IS ALSO SUBMITTED THAT MR.PMK REDDY AND MR. C. JAYARAMI RED DY WERE SUMMONED AND STATEMENTS WERE RECORDED FROM THEM DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, WHERE THE SAID CR EDITORS HAVE CONFIRMED THE TRANSACTIONS. 8.4 REGARDING MR. PMK REDDY, IT HAS BEEN EXPLAINED BY T HE ASSESSEE THAT THE SOURCES FOR THE ADVANCES OF RS. 7 0,00,000 GIVEN TO THE ASSESSEE, ARE OUT OF THE PROFITS OF SU B- CONTRACT WORKS CARRIED OUT BY MR.PMK REDDY IN THE NAME AND S TYLE OF M/S PMK CONSTRUCTIONS, FOR M/S AMRCL APART FROM THE AGRICULTURAL INCOME AND THE SAME ARE SHOWN TO BE RE FLECTED IN THE INCOME TAX RETURNS FILED FOR THE ASSESSMENT YEA R 2008-09 ONWARDS. THE ASSESSEE HAS MADE A DETAILED SUBMISSI ON REPLYING TO THE QUERIES AS RAISED BY THE ASSESSING OFFICER REGARDING THE CREDITWORTHINESS OF MR.PMK REDDY. IT WAS FURTHER CONTENDED BY THE ASSESSEE THAT WHILE COMING TO A CO NCLUSION THAT SUB-CONTRACT CARRIED BY MR.PMK REDDY WAS NOT G ENUINE, THE ASSESSING OFFICER DID NOT EVEN VERIFY THE WORKS GIVEN ON CONTRACT BY M/S AMRCL AND NO ENQUIRIES WERE CARRIED WHETHER THE RECEIPT ON ACCOUNT ON SUCH CONTRACT WORK WAS AC COUNTED FOR OR WHETHER ANY EXPENDITURE OF SAME NATURE IN RESPEC T OF THE SAME WORK WAS SEPARATELY CLAIMED BY THE COMPANY ETC . AND AS SUCH THIS OBSERVATION WAS SOLELY BASED ON SUSPICION , DISBELIEVE AND PRESUMPTIONS. THE ASSESSEE ALSO CONTENDED THAT MR.PMK REDDY WAS ASSESSED TO TAX IN HIS OWN RIGHT AND THE AMOUNTS I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 15 ADVANCED BY HIM CANNOT BE TREATED AS UNEXPLAINED CR EDIT IN THE CASE OF THE ASSESSEE AND THE TAXABILITY IF ANY, HAS TO BE EXAMINED IN THE HANDS OF SUCH OTHER PERSON WHO ADVA NCED MONEY, BY HIS ASSESSING OFFICER. 8.5 AS REGARDS TO THE APPLICATION OF SEC. 68 IN TREATIN G THE SAID ADVANCES AS UNEXPLAINED CREDIT, IT WAS SUBMITT ED BY THE ASSESSEE THAT THE IMPUGNED AMOUNTS WERE RECEIVED BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUES FROM THE PERSONS WHO ARE ASSESSED TO INCOME TAX FILING THEIR RETURNS, SHOWIN G INCOME FROM VARIOUS SOURCES, IS A PRIMA FACIE EVIDENCE ABOUT TH EIR CREDITWORTHINESS AND THE ASSESSEE IS NOT EXPECTED T O MAKE ANY FURTHER ENQUIRIES INTO THE EXACT SOURCE OF THEIR IN COME OR THE AMOUNT ADVANCED. IT WAS FURTHER CONTENDED THAT THOU GH AS PER SEC. 68, THE PRIMARY ONUS TO OFFER AN EXPLANATION A S TO THE NATURE AND SOURCE OF THE CREDIT IS ON THE ASSESSEE, WHAT WOULD BE THE DEGREE OF ONUS AND WHAT SHOULD BE EXTENT OF AN EXPLANATION IN SUCH CIRCUMSTANCES, HAS BEEN LAID DO WN IN VARIOUS JUDICIAL PRONOUNCEMENTS AND IT IS A SETTLED PRINCIPLE OF LAW THAT THE STRICT RULES OF EVIDENCE DO NOT APPLY TO THE INCOME TAX PROCEEDINGS AND THE ADMISSIBILITY OF AN EXPLANA TION HAS TO BE DETERMINED CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND HUMAN PROBABILITY. IT WAS ALSO ARGUED BY THE ASSESSEE THAT THE ASSESSEES HAVE BEEN HELD TO HAVE DISCHARGED THEIR PRIMARY ONUS WHERE THE AMOUNT REPRESENTING THE CREDIT IN QUESTION WAS RECEIVED BY ACCOUNT PAYEE CHEQUES WITH THE DETAILS OF CREDITORS, THEIR INCOME TAX PARTICULARS AND WRITTEN CONFIRMATIONS FROM SUCH PER SONS WERE FILED, AS PER THE RULINGS BY VARIOUS COURTS. IN THI S REGARD, THE ASSESSEE RELIED ON THE DECISIONS OF HON'BLE SUPREME COURT IN THE CASE CIT VS ORISSA CORPORATIONS PVT. LTD., 159 ITR 78 AND THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE C ASE OF CIT VS GUJARAT HEAVY CHEMICALS LTD 256 ITR 795. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 16 8.6 REGARDING THE AMOUNTS OUTSTANDING FOR RS. 9,20,000 OUT OF THE ADVANCES RECEIVED FROM MR. P. DAMODAR REDDY, PROP. OF M/S SAIBABA CONSTRUCTIONS, THE ASSESSEE SUBMITTED T HAT THE SAME WERE RECEIVED THROUGH BANKING CHANNELS BUT THE ASSESSEE COULD NOT FURNISH THE CONFIRMATION LETTERS FROM MR. P. DAMODAR REDDY DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 8.7 REGARDING THE OUTSTANDING AMOUNTS OF RS. 10,75,000 OUT OF THE ADVANCES RECEIVED FROM MR. C. JAYARAMI REDDY , THE ASSESSEE SUBMITTED THAT THE SAME WERE RECEIVED THRO UGH BANKING CHANNELS AND THE CONFIRMATIONS COULD NOT BE FURNISHED BEFORE THE ASSESSING OFFICER FOR WANT OF TIME. 8.8 SINCE THE INFORMATION/CONFIRMATION LETTERS REGARDIN G THE GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION RELATED TO THE CREDITORS VIZ. MR.PMK REDDY, MR. C. JAYARAMI RE DDY AND MR. P. DAMODAR REDDY, WERE RECEIVED FOR THE FIRST T IME BEFORE THE CIT(A), THE SAME WERE REFERRED TO THE ASSESSING OFFICER FOR VERIFICATION AND NECESSARY REPORT, AS PER RULE 46A. IN RESPONSE TO THE SAME, THE ASSESSING OFFICER HAS SUBMITTED A REPORT DT. 5.3.2012 WHICH IS RECEIVED BY THE CIT(A) ON 14.03.2 012 ALONG WITH THE REPORT OF THE ADDL.CIT CENTRAL RANGE-2, HY DERABAD DT. 13.3.2012. 8.9 AS COULD BE SEEN FROM THE INFORMATION BROUGHT ON TH E RECORD BY THE ASSESSING OFFICER AND THE SUBMISSIONS MADE BY THE ASSESSEE, IT IS A FACT THAT THE ASSESSEE SHOWN TO HAVE OBTAINED CERTAIN ADVANCES FROM MR.PMK REDDY, MR. P. DAMODAR REDDY, AND MR. C. JAYARAMI REDDY WHO HAPPENED TO BE THE RELATIVES OF THE ASSESSEE FAMILY. CERTAIN CONTRACT WORKS WERE SHOWN TO HAVE BEEN CARRIED OUT BY MR.PMK REDDY FOR M/S AMRCL, THE FLAGSHIP COMPANY OF THE GROUP. AS PER TH E OBSERVATIONS OF THE ASSESSING OFFICER, THE AMOUNTS RECEIVED BY I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 17 THE CREDITOR IN THE FORM OF CONTRACT RECEIPTS THAT WERE FLOWN BACK TO THE FAMILY MEMBERS OF AMR GROUP AND THESE ADVANC ES WERE SOME OF THEM. AS PER THE ASSESSING OFFICER, THE CRE DITWORTHINESS OF THE CREDITOR IS NOT CONCLUSIVELY PROVED FOR THE FACT THAT HE IS THE NAME LENDER AND CONDUIT TO THE FAMILY MEMBERS O F AMR GROUP THROUGH WHOM THE UNACCOUNTED MONIES OF AMR GR OUP COMPANIES WERE ROUTED BACK TO THE INDIVIDUAL MEMBER S OF THE FAMILY. TO PROVE THAT THE TRANSACTIONS RELATED TO A DVANCE OBTAINED BY THE ASSESSEE FROM MR.PMK REDDY ARE NOT GENUINE, THE ASSESSING OFFICER HAS MADE SOME SPECIFIC OBSERV ATIONS AS REGARDS TO THE NATURE OF THE ACTIVITIES AND SOURCES OF INCOME FOR THE CREDITOR. HOWEVER, IT IS A FACT THAT NO EFFORTS WERE MADE BY THE ASSESSING OFFICER TO EXAMINE THE GENUINENESS OF THE CONTRACT WORKS CARRIED OUT BY MR.PMK REDDY TO ARRIVE AT THE CORRECTNESS OF THE INCOMES EARNED BY SUCH PERSONS, SO AS TO ASS ESS HIS CAPACITY OR CREDITWORTHINESS TO LEND THE MONIES TO THE ASSESSEE AND HIS FAMILY MEMBERS. REGARDING THE GENUINENESS O F THE TRANSACTION, THE CIT(A) OBSERVED THAT IT CANNOT BE A QUESTIONABLE TRANSACTION PRIMA FACIE, SINCE THE AMOUNTS WERE OBT AINED THROUGH CHEQUES AND HAVING CONFIRMED BY THE CREDITO R FOR LENDING THAT AMOUNTS, ALONG WITH THEIR INCOME TAX P ARTICULARS. THE BEST RECOURSE FOR THE ASSESSING OFFICER WAS TO EXAMINE THE REAL INCOME AVAILABLE FOR THE CREDITOR SO AS TO ARR IVE AT HIS CREDITWORTHINESS AND IN A SEARCH RELATED CASE LIKE THIS, THERE WAS NO BAR ON THE ASSESSING OFFICER TO LOOK INTO TH ESE ASPECTS. 8.10 UNDER THE CIRCUMSTANCES, THE CIT(A) DELETED THE ADD ITION EXCEPT IN RESPECT OF THE AMOUNT RECEIVED FROM SRI J AYARAMI REDDY AT RS. 10.75 LAKHS AND SRI P. DAMODAR REDDY A T RS. 9.2 LAKHS. REGARDING THE DELETION OF RS. 70 LAKHS RECE IVED FROM SRI P. MUDDU KRISHNA REDDY, THE REVENUE IS IN APPEAL BE FORE US. FOR SUSTAINING THE ADDITION THE ASSESSEE IS IN APPE AL BEFORE US. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 18 8.11 REGARDING THE ISSUE IN REVENUE APPEAL IN RESPECT OF SRI P. MUDDU KRISHNA REDDY AT RS. 70 LAKHS, IN OUR OPINION , THE CREDIT IN THE NAME OF SRI P. MUDDU KRISHNA REDDY WA S CONSIDERED BY THIS TRIBUNAL IN THE CASE OF SRI A. M AHESH REDDY IN ITA NO. 1240/HYD/2012 VIDE ORDER DATED 19.4.2013 AND HELD IN FAVOUR OF THE ASSESSEE IN PARA NOS. 27 AND 28 OF THAT ORDER BY FOLLOWING EARLIER ORDER OF THIS TRIBUNAL IN ITA NO. 275/HYD/2012 IN THE CASE OF M/S. AMR HOSPITALITY SERVICES PVT. L TD., VIDE ORDER DATED 22.2.2013 WHEREIN SIMILAR ISSUE WAS DEC IDED IN FAVOUR OF THE ASSESSEE WHICH IS REPRODUCED WHILE DE CIDING SIMILAR ISSUE IN PARA 3.2 OF THIS ORDER. ACCORDING LY, THIS GROUND IS DECIDED IN FAVOUR OF THE ASSESSEE. REVENUE APPEA L IN ITA NO. 987/HYD/2012 IS DISMISSED. 8.12 COMING TO THE CROSS OBJECTION IN C.O. NO. 118/HYD/2 012 WITH REGARD TO THE RECEIPT OF RS. 9.2 LAKHS FROM SR I P. DAMODAR REDDY, PROPRIETOR OF M/S. SAIBABA CONSTRUCTIONS, TH E ASSESSEE RECEIVED RS. 65.5 LAKHS FROM CREDITORS AS ADVANCE. OUT OF THIS, RS. 50.8 LAKHS WAS ADMITTED BY THE ASSESSEE AS UNDI SCLOSED INCOME U/S. 132(4) OF THE ACT AND BALANCE AMOUNT OF RS. 9.2 LAKHS WAS ADDED BY THE ASSESSING OFFICER. THE ASSE SSEE SUBMITTED BEFORE US THAT THE AMOUNT OF RS. 9.2 LAKH S IS GENUINE CREDIT RECEIVED FROM SRI P. DAMODAR REDDY AND THE A DDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE THE CIT(A) WA S NOT PROPERLY EXAMINED AND THE ASSESSEE PLACED EVIDENCE IN THE FO RM OF BANK ACCOUNT BEFORE THE CIT(A), PLACED AT PAGE NOS. 32 TO 33 IN THE PAPER BOOK AND SUBMITTED THAT IT COULD BE VERIFIED FROM THE END OF THE ASSESSING OFFICER. SAME ARGUMENT WAS PUT IN RESPECT OF THE CREDIT RECEIVED FROM SRI JAYARAMI REDDY AT RS. 10,75,000 AND PRAYED THAT IT MAY BE VERIFIED. 8.13 THE DR RELIED ON THE ORDER OF THE CIT(A). 8.14 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. IN THIS CASE, THE ASSESSEE HAS FILED CO NFIRMATION I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 19 LETTERS IN THE FORM OF ADDITIONAL EVIDENCE WHICH WA S NOT PROPERLY EXAMINED BY THE CIT(A). IN OUR OPINION, IN THE INTE REST OF JUSTICE IT IS APPROPRIATE TO REMIT THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION. CO NO. 118/HYD/ 2 012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. SMT. A. RADHIKA REDDY: ITA NO. 1105/HYD/2012 A.Y. 2003-04 BY ASSESSEE: 9. IN THIS APPEAL THE ASSESSEE RAISED THE GROUND THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 4,30 ,000 MADE U/S. 68 OF THE ACT. 9.1 BRIEF FACTS OF THE ISSUE ARE THAT THERE WAS A CREDI T OF RS. 4,30,000 SAID TO HAVE BEEN RECEIVED FROM SOME CREDI TORS FOR WHICH THE ASSESSEE HAS NOT FILED NECESSARY DETAILS EXPLAINING THE NATURE OF THE TRANSACTIONS. THE SAID AMOUNT WA S RECEIVED BY THE ASSESSEE BY CASH AND REPAID THE SAME IN SUBS EQUENT YEARS. THE ASSESSEE EXPLAINED THAT IT WAS RECEIVED FROM SRI SAI MOHAN REDDY WHO IS HAVING ENOUGH AGRICULTURAL INCOM E TO EXPLAIN THE SOURCE. HOWEVER, EVIDENCE BROUGHT ON R ECORD DOES NOT SHOW THE CAPACITY OF THE LENDER TO ADVANCE THE MONEY. BEING SO, THE ADDITION WAS MADE. BEFORE US THE ASS ESSEE NOT PLACED ANY EVIDENCE IN SUPPORT OF THE CLAIM OF THE ASSESSEE TO PROVE THE IDENTITY OF THE PARTY, CAPACITY OF THE CR EDITOR AND GENUINENESS OF THE TRANSACTION. ACCORDINGLY, BY PL ACING RELIANCE ON THE JUDGEMENT OF JURISDICTIONAL HIGH COURT IN TH E CASE OF R.B. MITTAL (CITED SUPRA), THIS ADDITION IS SUSTAINED. ITA NO. 1105/HYD/2012 IS DISMISSED. ITA NO. 1106/HYD/2012 A.Y. 2007-08 BY ASSESSEE: 10. THE MAIN GROUND IN THIS APPEAL IS WITH REGARD TO SUSTAINING ADDITION OF RS. 22.85 LAKHS. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 20 10.1 BRIEF FACTS OF THE ISSUE ARE THAT WHILE COMPUTING T HE TAXABLE INCOME OF THE ASSESSEE, THE ASSESSING OFFIC ER HAS TREATED THE AMOUNTS OF ADVANCES SHOWN TO HAVE BEEN RECEIVED BY THE ASSESSEE FROM THE FOLLOWING PARTIES, AS UNEX PLAINED CREDITS U/S 68 OF THE IT ACT, 1961: I) SREENIVAS REDDY - RS. 4,85,000 II) P. SREENIVASULU - RS. 18,00,000 ----------------- TOTAL RS. 22,85,000 =========== 10.2 WHILE TREATING THE SAID AMOUNTS AS UNEXPLAINED CRED ITS IN THE HANDS OF THE ASSESSEE, THE ASSESSING OFFICER HA S MADE CERTAIN SPECIFIC REMARKS ON EACH OF THE ADVANCE OBT AINED BY THE ASSESSEE DURING THE YEAR UNDER REFERENCE. THE ASSES SING OFFICER HAS ALSO OBSERVED THAT THE ASSESSEE FAILED TO FURNI SH THE BASIC INFORMATION SUCH AS CONFIRMATION LETTERS, DETAILS O F PAN, ASSESSMENT PARTICULARS ETC. IN CASE OF THE AMOUNTS FROM SRI SREENIVAS REDDY TO THE TUNE OF RS, 4,85,000/- THE S AID AMOUNT WAS SHOWN AS THE ADVANCE RECEIVED DURING THE YEAR 2 007-08 TOWARDS PURCHASE OF OPEN PLOT AND WAS RETURNED IN T HE YEAR 2008-09 BUT WITHOUT FURNISHING ANY DETAILS SUCH AS THE DETAILS OF LAND AND SOURCES FOR THE SAID ADVANCE ETC. AS RE GARD TO THE AMOUNT OF RS. 18,00,000/- FROM SRI P. SREENIVASULU REDDY IT WAS SHOWN TO HAVE REFLECTED IN THE RECEIPTS AND PAY MENTS ACCOUNT AND WAS SHOWN TO HAVE BEEN RECEIVED IN CASH . HOWEVER, NO DETAILS WERE SHOWN TO HAVE BEEN FURNISHED AT THE TIME OF ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER DISBE LIEVED THE CREDITWORTHINESS OF THE CREDITORS IN THE ABSENCE OF BASIC INFORMATION AND TREATED THE SAME AS UNEXPLAINED CRE DIT AND AS AN UNACCOUNTED INCOME OF THE ASSESSEE. 10.3 IN TREATING THE SAID AMOUNTS AS UNEXPLAINED CREDITS , THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT EVEN IF SUCH PAYMENTS ARE MADE THROUGH BANK AND BY WAY OF CHEQUE S, IN I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 21 VIEW OF SETTLED PROPOSITION OF LAW, THE ASSESSING O FFICER CAN ENQUIRE INTO THE SAME AND IT IS THE ASSESSEE WHO HA S TO SATISFY THE ASSESSING OFFICER ABOUT THE GENUINENESS OF THE SAME AND ON FAILURE TO DO SO, THE PROVISIONS OF SEC. 68 ARE APP LICABLE TO THE ASSESSEE WITH ALL ITS CONSEQUENCES. 10.4 THE ASSESSEE OBJECTED TO THE ABOVE ADDITION AND ARG UED THAT IN RESPONSE TO THE QUERIES RAISED BY THE ASSES SING OFFICER, THE INFORMATION REGARDING THE ADVANCE OF RS. 4,85,0 00/- RECEIVED FROM SREENIVAS REDDY, WAS FURNISHED AS PER WHICH THE AMOUNT WAS RECEIVED AS ADVANCE FOR PURCHASE OF OPEN PLOT AT KANUKUNTA VILLAGE AND THE SAME WAS RETURNED BACK DU RING THE FINANCIAL YEAR 2007-08. IT WAS FURTHER ELABORATED T HAT THE AMOUNT WAS RETURNED SINCE THE TRANSACTION DID NOT MATERIALIZE AND BOTH PAYMENTS AND RECEIPTS WERE TRA NSACTED THROUGH ACCOUNT PAYEE CHEQUES. HOWEVER, IT WAS SUBM ITTED BY THE ASSESSEE THAT CONFIRMATION LETTERS COULD NOT BE GATHERED AND PRODUCED IN THIS CASE IN VIEW OF LOSS OF ALMOST FIV E YEARS. 10.5 IN THE CASE OF ADVANCE OF RS. 18,00,000/- FROM SRI P. SREENIVASULU REDDY, IT WAS SUBMITTED THAT THE FULL INFORMATION COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER, DUE TO THE AVAILABILITY OF SHORT TIME AND AS SUCH THE INFORMAT ION IN THE FORM OF CONFIRMATION FROM SHRI P. SREENIVASULU REDD Y WAS FURNISHED BEFORE THE CIT(A). THE CIT(A) CONFIRMED THE ADDITION IN RESPECT OF RS. 4,85,000 AND DELETED RS. 18,00,00 0. AGAINST SUSTAINING RS. 4,85,000, THE ASSESSEE IS IN APPEAL BEFORE US. 10.6 THE LEARNED AR SUBMITTED THAT THE ASSESSEE HAS FILE D CONFIRMATION LETTERS FROM THE PARTIES WHICH ARE NOT PROPERLY EXAMINED. AS THESE ARE GENUINE CREDITS, THE AR SUB MITTED THAT THE ISSUE MAY BE REMITTED BACK TO THE ASSESSING OFF ICER FOR FRESH CONSIDERATION. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 22 10.7 THE LEARNED DR RELIED ON THE ORDER OF THE CIT(A) AN D ALSO ON THE JUDGEMENT OF JURISDICTIONAL HIGH COURT IN TH E CASE OF B.R. MITTAL (SUPRA). 10.8 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. IN THIS CASE THERE WAS ADDITIONAL EVIDE NCE FILED BEFORE THE CIT(A) IN THE FORM OF CONFIRMATION LETTE RS FROM THE PARTY WHICH WERE NOT PROPERLY VERIFIED BY THE LOWER AUTHORITIES. BEING SO, IN OUR OPINION, IT IS APPROPRIATE TO REMI T THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION IN ACCORDANCE WITH LAW. ITA NO. 1106/HYD/2012 IS PART LY ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1097/HYD/2012 A.Y. 2008-09 BY REVENUE: 11. THE DEPARTMENT RAISED THE GROUND THAT THE CIT(A) ER RED IN DELETING THE ADDITION OF RS. 50 LAKHS IN THE NAME O F MRS. VIJAYALAKSHMI NUKALA. 11.1 BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSING OFF ICER MADE AN ADDITION OF RS. 1,05,60,000 WHILE COMPLETING THE ASSESSMENT AS FOLLOWS: A) VIJAYALAKSHMI NUKALA - RS. 50,00,000 B) K. SUBBA LAKSHMI - RS. 20,00,000 C) ADVANCE FOR SALE OF LAND - RS. 35,60,000 -------------------- TOTAL RS. 1,05,60,000 ============= 11.2 ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION IN RES PECT OF ADVANCE FOR SALE OF LAND AND DELETED THE ADDITION I N RESPECT OF MRS. VIJAYALAKSHMI NUKALA AT RS. 50 LAKHS AND RS. 2 0 LAKHS IN RESPECT OF SMT. K. SUBBA LAKSHMI. AGAINST THE DEL ETION, THE REVENUE IS IN APPEAL BEFORE US. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 23 11.3 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. IN THE PRESENT CASE OF THE CREDITOR, MR S. VIJAYALAKSHMI NUKALA, AN AMOUNT OF RS. 50,00,000 GI VEN AS ADVANCE TO SMT. RADHIKA REDDY. THERE IS NO DISPUTE ON THE ISSUE OF GENUINENESS OF THE TRANSACTION SINCE THE A MOUNTS WERE ROUTED THROUGH BANK ACCOUNT AND IDENTITY OF THE CRE DITOR IS ESTABLISHED AS THE CREDITOR WAS SUMMONED AND EXAMIN ED BY THE ASSESSING OFFICER. THE OTHER BASIC AND RELIABLE INF ORMATION REQUIRED IN THE CASES OF CASH CREDITS I.E. THE ASSE SSMENT PARTICULARS OF THE CREDITOR ARE ALSO AVAILABLE SINC E SHE WAS STATED TO BE AN INCOME TAX ASSESSEE. THE MAIN AND R ELEVANT ISSUE, HENCE, IS THE CREDITWORTHINESS OF THE CREDIT OR, WHICH HAS ARISEN ON ACCOUNT OF FEW OBSERVATIONS RELATABLE TO THE CREDITOR: (A) CASH WAS DEPOSITED IN THE BANK ACCOUNT OF MRS. VIJAYALAKSHMI NUKALA, THE CREDITOR, BEFORE ISSUING THE CHEQUES TO MRS. RADHIKA REDDY AND OTHER FAMILY MEMBERS WHICH WAS STATED TO BE OUT OF THE CASH WITHDRAWALS MADE EARLIER, BUT WITH A GAP OF MORE THAN SIX MONTHS BETWEEN THE DATE OF WITHDRAWAL AND DATE OF DEPOSIT. (B) CAPACITY OF THE CREDITOR, TO ADVANCE THE AMOUNTS AS REFLECTED IN BANK ACCOUNT, THAT TOO WITHOUT CHARGIN G ANY INTEREST AND WITHOUT FURTHER PROOF OF RELATING SUCH ADVANCES TO ANY OTHER PURPORTED TRANSACTION SUCH AS PURCHASE OF LAND ETC. 11.4 THE BASIC DOUBTS AS REGARD TO THE REAL SOURCES FOR THE CREDITS IN THE HANDS OF THE CREDITOR, WHICH WAS CLA RIFIED TO BE OUT OF THE CASH WITHDRAWALS AND THE ONUS IN SUCH A CASE WAS ON THE ASSESSING OFFICER TO PROVE THAT CASH WITHDRAWAL S WERE PUT TO USE FOR SOME OTHER PURPOSE, THAN BRINGING BACK TO T HE BANK ACCOUNT AS CASH DEPOSITS. IN ABSENCE OF THE SPECIFI C FINDINGS, THE TRANSACTIONS ROUTED THROUGH THE BANKING CHANNEL S MAY NEED TO BE LOOKED WITH SUSPICION, BUT CANNOT BE DIS BELIEVED, WITHOUT FINDING THE FACT. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 24 11.5 AS FAR AS THE CREDITS IN THE NAME OF MRS. K. SUBBA LAKSHMI IS CONCERNED, THE FACTS OF THE CASE PROVE T HAT THE AMOUNTS WERE OBTAINED THROUGH CHEQUES AND MRS. K. S UBBA LAKSHMI AND HER SON ARE ASSESSED TO TAX IN THEIR OW N CAPACITY, REGULARLY AT BANGALORE, WHOSE PARTICULARS ARE FURNISHED. AS COULD BE SEEN FROM THE INFORMATION FU RNISHED, THE CREDITOR APPEARS TO HAVE ENOUGH SOURCES TO LEND THE AMOUNT AND THE AMOUNTS OF CREDIT WERE SUPPORTED BY WELL ES TABLISHED SOURCES FOR THE ADVANCES RECEIVED BY THE ASSESSEE, FROM THE CREDITOR. HOWEVER, THE SAID CREDITOR SHOWN TO HAVE GIVEN MORE LOANS AND ADVANCES TO THE FAMILY MEMBERS OF THE AMR GROUP, WHICH IS TOTALLING MORE THAN A CRORE RUPEES FOR THE YEAR UNDER REFERENCE, WHICH WERE SHOWN TO BE ORIGINATED FROM T HE BANK ACCOUNTS OF MRS. K. SUBBA LAKSHMI AND HER SON, FOR WHOM SHE IS A AUTHORIZED SIGNATORY. AS FAR AS SOURCES OF THE CREDIT IS CONCERNED, IT CAN BE HELD TO BE PROVED AND AS SUCH, THERE IS NO GROUND FOR THE ASSESSING OFFICER TO DISBELIEVE THE TRANSACTION AND CREDITWORTHINESS OF MRS. K. SUBBA LAKSHMI. ACCO RDINGLY, THESE ADDITIONS ARE RIGHTLY DELETED BY THE CIT(A). WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) AND THE SA ME IS CONFIRMED. ITA NO. 1097/HYD/2012 IS DISMISSED. ITA NO. 1107/HYD/2012 A.Y. 2009-10 BY ASSESSEE: ITA NO. 1098/HYD/2012 A.Y. 2009-10 BY REVENUE: 12. THE GROUND IN ASSESSEES APPEAL IS WITH REGARD TO SUSTAINING ADDITION OF RS. 3,40,000 RECEIVED FROM S RI JAYARAMI REDDY. THE REVENUE IS IN APPEAL BEFORE US WITH REG ARD TO DELETION OF ADDITION OF RS. 50 LAKHS FROM SRI P. MU DDU KRISHNA REDDY. AFTER HEARING BOTH THE PARTIES, WE ARE OF T HE OPINION THAT SIMILAR CREDIT IN THE NAME OF SRI JAYARAMI REDDY CA ME BEFORE THIS TRIBUNAL IN THE CASE OF A. MAHESH REDDY IN ITA NO. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 25 1241/HYD/2011 WHEREIN IN PARA 41 THE TRIBUNAL HELD AS FOLLOWS: '41. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE THE AMOUNT WAS ADVANCED BY SRI JAYARAMI REDDY THROUGH CHEQUE TO THE ASSESSEE. THE ASSESSEE RECEIVED RS. 5.25 CRORE S FROM SRI JAYARAMI REDDY AS ADVANCE AGAINST THE PROPOSED SALE OF SHARES AND IMMOVABLE PROPERTY. SINCE THE TRANSACTION NOT MATERIALISED, A SUM OF RS . 3,80,19,000 WAS REPAID TO HIM AND BALANCE WAS OUTSTANDING. THIS FACT WAS CONFIRMED BY SRI JAYARAMI REDDY AND SRI JAYARAMI REDDY RECEIVED THIS AMOUNT FRM HIS SON SRI HANUMANTHA REDDY WHO IS PROPRIETOR OF M/S. HR CONSTRUCTIONS. SRI JAYARA MI REDDY ALSO CONFIRMED THIS FACT IN THE STATEMENT RECORDED U/S. 131 OF THE ACT. THE ASSESSEE ALSO BROUGHT ON RECORD PROFIT AND LOSS A/C. AND BALANCE SHEET OF M/S. HR CONSTRUCTIONS PLACED AT PAGE NOS. 222 TO 239 OF THE PAPER BOOK. IN SCHEDULE-D CURRENT ASSETS, LOANS AND ADVANCES AS ON 31 ST MARCH, 2008 - WHICH SHOWS DEBIT IN THE ACCOUNT OF SRI JAYARAMI REDDY AN AMOUNT OF RS. 1,39,81,000. THIS BEING THE CASE, THE ASSESSEE PROVED THE SOURCE OF CREDIT AS RECEIVED FROM SRI M. JAYARAMI REDDY. HOWEVER, THE LOWER AUTHORITIES NOT SATISFIED WITH THIS. ACCORDING TO THE DEPARTMENT, SRI JAYARAMI REDDY IS AN AGRICULTURIST AND NOT AN ASSESSEE OF INCOME-TAX. HIS CREDITWORTHINESS IS NOT PROVED. I N OUR OPINION, THE ASSESSEE HAS PROVED THE SOURCES AS RECEIVED FROM SRI M. JAYARAMI REDDY AND THE FACT OF ADVANCING MONEY TO SRI JAYARAMI REDDY BY HIS SON SRI HANUMANTHA REDDY REFLECTED IN THE BOOKS OF ACCOUNT OF M/S. HR CONSTRUCTIONS. THE DEPARTMENT IS DOUBTING THE CREDITWORTHINESS OF SRI JAYARAMI REDDY. IN OUR OPINION, THERE IS NO NECESSITY TO DO UBT THE CREDITWORTHINESS OF SRI JAYARAMI REDDY AS HE HAS RECEIVED THE MONEY FROM SRI HANUMANTHA REDDY WHICH IS DULY REFLECTED IN THE BOOKS OF ACCOUNT. I N THESE CIRCUMSTANCES, IF THE DEPARTMENT IS HAVING AN Y DOUBT IT SHOULD BE QUESTIONED IN THE HANDS OF SRI HANUMANTHA REDDY ONLY. BEING SO, WE ARE INCLINED TO DELETE THE ADDITION. 12.1 RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE TRIBU NAL, WE ARE INCLINED TO DECIDE THE ISSUE IN FAVOUR OF THE A SSESSEE. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 26 12.2 FURTHER REGARDING CREDIT IN THE NAME OF SRI P. MUDD U KRISHNA REDDY IN REVENUE APPEAL, WE ARE OF THE OPIN ION THAT THE CREDIT IN THE NAME OF SRI P. MUDDU KRISHNA REDDY WA S CONSIDERED BY THIS TRIBUNAL IN THE CASE OF SRI A. M AHESH REDDY IN ITA NO. 1240/HYD/2012 VIDE ORDER DATED 19.4.2013 AND HELD IN FAVOUR OF THE ASSESSEE IN PARA NOS. 27 AND 28 OF THAT ORDER BY FOLLOWING EARLIER ORDER OF THIS TRIBUNAL IN ITA NO. 275/HYD/2012 IN THE CASE OF M/S. AMR HOSPITALITY SERVICES PVT. L TD., VIDE ORDER DATED 22.2.2013 WHEREIN SIMILAR ISSUE WAS DEC IDED IN FAVOUR OF THE ASSESSEE WHICH IS REPRODUCED WHILE DE CIDING SIMILAR ISSUE IN PARA 3.2 OF THIS ORDER. RESPECTF ULLY FOLLOWING THE ABOVE ORDER, DELETION OF ADDITION MADE BY THE C IT(A) IS JUSTIFIED. ITA NO. 1107/HYD/2012 (ASSESSEE APPEAL) IS ALLOWED AND ITA NO. 1098/HYD/2012 (REVENUE APPEAL) IS DISMI SSED. SMT. A. LATHA REDDY ITA NO. 1108/HYD/2012 A.Y. 2005-06 BY ASSESSEE 13. THERE WAS A DELAY OF 35 DAYS IN FILING THIS APPEAL BY THE ASSESSEE. THE ASSESSEE FILED A PETITION FOR CONDON ING THE DELAY OF 35 DAYS ACCOMPANIED BY AN AFFIDAVIT STATING AS I N PARA 2 OF THIS ORDER. 13.1 WE ARE SATISFIED WITH THE REASONS ADVANCED BY THE ASSESSEE FOR CONDONING THE DELAY OF 35 DAYS IN FILI NG THIS APPEAL. ACCORDINGLY, THE DELAY OF 35 DAYS IN FILING THE APP EAL IS CONDONED AND THE APPEAL IS ADMITTED FOR ADJUDICATIO N. 14. THE FIRST GROUND IN THIS APPEAL IS WITH REGARD TO SUSTAINING ADDITION OF RS. 12 LAKHS U/S. 68 OF THE ACT SAID TO HAVE BEEN RECEIVED FROM SRI SAI MOHAN REDDY. 14.1 BRIEF FACTS RELATING TO THE ADDITION ARE THAT WHILE COMPUTING THE TAXABLE INCOME OF THE ASSESSEE, THE A SSESSING I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 27 OFFICER HAS TREATED THE AMOUNT OF RS. 12,00,000 AS UNEXPLAINED CREDIT, BEING THE AMOUNTS SHOWN TO HAVE BEEN RECEIV ED BY THE ASSESSEE, WHICH WAS SHOWN TO HAVE BEEN THE ADVANCE RECEIVED BACK AS THE DEAL WAS NOT THROUGH. THIS INFORMATION WAS OBTAINED FROM THE RECEIPTS & PAYMENTS ACCOUNTS ENCL OSED TO THE RETURN OF INCOME AND THE ASSESSING OFFICER HAS MADE THE ABOVE ADDITION OBSERVING THAT THE ASSESSEE HAS NOT FURNIS HED THE BREAK-UP AND DETAILS OF THE SAID ADVANCES WHICH WER E ENQUIRED THROUGH THE QUESTIONNAIRE DATED 15.11.2010. AS PER THE ASSESSING OFFICER, THE ASSESSEE FAILED TO FURNISH T HE DETAILS SUCH AS THE PROPERTIES PURPORTED TO BE PURCHASED AND PER SONS TO WHOM THE ADVANCES WERE GIVEN, LOCATION OF THE PROPE RTIES, NATURE OF ADVANCES, ETC. ACCORDINGLY, THE ASSESSIN G OFFICER INVOKED THE PROVISIONS OF SECTION 68 OF THE ACT, WH EREIN THE GENUINENESS OF THE TRANSACTION, INVOLVING THE CREDI T OF THE AMOUNTS IN THE BOOKS OF THE ASSESSEE WERE NOT FURNI SHED OR PROVED WITH NECESSARY EVIDENCE. 14.2 BEFORE THE CIT(A), THE ASSESSEE FILED CONFIRMATION LETTER AS ADDITIONAL EVIDENCE. AFTER ADMITTING THE ADDITIONA L EVIDENCE, THE CIT(A) CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSESSING OFFICER REPORTED THAT THOUGH THE ASSESSEE TAKEN A PLEA THAT THIS AMOUNT OF RS. 12 LAKHS WAS ADVANCED IN TH E EARLIER YEAR AND THE SAME WAS RECEIVED IN IN THE ASSESSMENT YEAR UNDER CONSIDERATION FROM SRI P. SAI MOHAN REDDY, TO SUPPO RT THIS CLAIM, THE ASSESSEE ONLY FILED CONFIRMATION LETTER ALONG WITH DRIVING LICENCE WHICH ARE SELF-SERVING DOCUMENT. AS SUCH THEY CANNOT BE RELIED UPON. ACCORDINGLY, BASED ON THE R EMAND REPORT THE CIT(A) WAS OF THE OPINION THAT THE CREDI T ARE NOT GENUINE AND SUSTAINED THE ADDITION. AGAINST THIS T HE ASSESSEE IS IN APPEAL BEFORE US. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 28 14.3 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. IN THE PRESENT CASE THE ASSESSEE FILED CONFIRMATION LETTER STATING THAT EARLIER ADVANCE WAS GIVEN FOR P URCHASE OF LAND WAS RECEIVED BACK FROM SRI P. SAI MOHAN REDDY AND I N SUPPORT OF THAT THE ASSESSEE FILED CONFIRMATION LETTER ALON G WITH DRIVING LICENCE TO PROVE THE TRANSACTION. THE DEPARTMENT W ITHOUT VERIFYING THESE DOCUMENTS WITH SRI SAI MOHAN REDDY CONFIRMED THE ADDITION WHICH IS NOT PROPER. IF THE DEPARTING IS HAVING ANY DOUBT REGARDING GENUINENESS OF THE TRANSACTION, IT COULD HAVE VERY WELL EXAMINED SRI SAI MOHAN REDDY FOR CLEARING THE DOUBT. IN VIEW OF THIS, IN THE INTEREST OF JUSTICE, WE REM IT THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDE RATION. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 15. THE NEXT GROUND IN ITA NO. 1108/HYD/2012 IS WITH REGARD TO SUSTAINING ADDITION OF RS. 4.5 LAKHS RECE IVED FROM THE FOLLOWING PERSONS: A) SRI A. GIRISH REDDY - RS. 1,00,000 B) SRI D. GOPAL REDDY - RS. 2,00,000 C) SMT. A. SULOCHANAMMA - RS. 50,000 D) SMT. A. RADHIKA REDDY - RS. 75,000 E) OTHER GIFTS FROM FRIENDS - RS. 25,000 AND RELATIVES ------------------ TOTAL RS. 4,50,000 ========== 15.1 BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAS NOT FURNISHED NECESSARY DETAILS. HOWEVER, BEFORE THE C IT(A) THE ASSESSEE FURNISHED CONFIRMATION LETTERS FROM 4 OF T HE ABOVE PARTIES ALONG WITH RECEIPTS AND PAYMENT ACCOUNT IN THE CASE OF SRI A. GIRISH REDDY, SMT. SULOCHANAMMA AND SMT. RAD HIKA REDDY FOR THE RELEVANT YEARS. THE ASSESSEE ALSO TA KEN A PLEA THAT THERE WAS SUFFICIENT DRAWINGS IN THE DONORS AC COUNT TO DONATE THIS AMOUNT TO THE ASSESSEE. THE CIT(A) AFT ER ADMITTING THE ABOVE ADDITIONAL EVIDENCES CALLED FOR REMAND RE PORT FROM I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 29 THE ASSESSING OFFICER. THE ASSESSING OFFICER REPOR TED IN HIS REMAND REPORT AS FOLLOWS: (I) IN CASE OF SRI A. GIRISH REDDY, THE TOTAL WITHDRAWA LS ARE RS. 2,00,000 AND CONSIDERING THE STANDARD OF LI VING OF THE DONOR, THE WITHDRAWALS ARE MODERATE AND AS SUCH GIFT OF RS. 1,00,000 OUT OF THE SAID AMOUNT IS UNREASONABLE. (II) IN CASE OF GIFT FROM MR. GOPAL REDDY, IT WAS A ROUT INE CONFIRMATION LETTER NOT SUPPORTED BY ANY OTHER EVIDENCE AS REGARDS TO THE FINANCIAL CAPACITY OF TH E DONOR AND NO INCOME TAX PARTICULARS ARE FURNISHED. HENCE, THE GENUINENESS OF THE GIFT IS NOT PROVED. (III) REGARDING THE GIFT FROM SMT A. SULOCHANAMMA, IT WAS INDICATED THAT TOTAL WITHDRAWALS ARE RS. 1,20,000 A ND CONSIDERING THE STANDARD OF LIVING OF THE DONOR, WITHDRAWALS ARE CONSIDERED MODERATE AND AS SUCH GIF T OF RS. 50,000 IS UNREASONABLE. (IV) REGARDING THE GIFT OF RS. 75,000 FROM SMT A. RADHIK A REDDY, SIMILAR VIEW WAS EXPRESSED BY THE ASSESSING OFFICER, AS IN THE CASE OF MR. GIRISH REDDY AND SMT . A SULOCHANAMMA. 15.2 THE CIT(A) AFTER GOING THROUGH THE REMAND REPORT OBSERVED THAT THE ASSESSEE FAILED TO ESTABLISH THE OCCASION ON WHICH THESE GIFTS ARE MADE AND ALSO THE DRAWINGS MA DE BY THESE DONORS ARE NOT ENOUGH TO MEET THE GIFT MADE BY THEM . ACCORDINGLY, RELYING ON THE JUDGEMENT OF SUPREME CO URT IN THE CASE OF CIT VS. P. MOHAN KALA (291 ITR 278) AND IN THE CASE OF SUMATI DAYAL VS. CIT (214 ITR 301) CONFIRMED THE AD DITION. AGAINST THIS THE ASSESSEE IS IN APPEAL BEFORE US. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 30 15.3 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. WE ARE OF THE OPINION THAT SIMILAR ISSU E CAME FOR OUR CONSIDERATION IN RESPECT OF SAME DONORS IN THE CASE OF SRI A. MAHESH REDDY IN ITA NO. 1236/HYD/2012 AND OTHERS. THE TRIBUNAL VIDE ORDER DATED 19.4.2013 HELD AS FOLLOWS : '10. FURTHER REGARDING THE GIFTS RECEIVED IN A.Y. 2 004-05, THE ASSESSEE PLEADED BEFORE US THAT THESE GIFTS OF RS. 6 LAKHS RECEIVED BY THE ASSESSEE FROM HIS FAMILY MEMB ERS AND THEY ARE INCOME-TAX ASSESSEES AND IT IS DULY RE FLECTED IN THEIR FINANCIAL STATEMENT OF THE RESPECTIVE DONO RS. HEREIN ALSO THE ASSESSEE PLEADED BEFORE THE ASSESSI NG OFFICER THAT THE GIFT WAS RECEIVED FROM ASSESSEE'S PARENTS. HOWEVER, THIS CONTENTION WAS CHANGED BEFORE THE CIT (A) THAT IT WAS RECEIVED FROM SRI A. GIRISH REDDY (BROT HER) RS. 25,000, SMT. SULOCHANA (MOTHER) RS. 5,00,000, SRI A . AUDINARAYANA REDDY (FATHER) RS 30,000 AND OTHER RELATIVES RS. 45,000. THOUGH IT WAS PLEADED THAT T HERE WERE ENOUGH DRAWINGS FROM THESE PARTIES TO MAKE THE GIFT TO THE ASSESSEE, HOWEVER, THE ASSESSEE FAILED TO ES TABLISH SPECIFIC WITHDRAWAL WHICH INDICATES GIFT TO THE ASS ESSEE. FURTHER, CONSIDERING THE STATUS OF THOSE DONORS, DR AWINGS MADE BY THEM IS NOT ENOUGH TO MAKE GIFT TO THE PRES ENT ASSESSEE. IN THE CASE OF OTHER GIFTS, THE ASSESSEE HAS NOT PROVIDED THE BASIC DETAILS LIKE NAMES, IDENTITY AND ADDRESSES OF THE PARTIES. IN SUCH CIRCUMSTANCES, W E HAVE NO HESITATION IN CONFIRMING THE ADDITION MADE U/S. 68 IN RESPECT OF THESE GIFS. ACCORDINGLY, THE ADDITIONS SUSTAINED BY THE CIT(A) FOR A.YS. 2003-04 AND 2004-05 ARE CONFIRMED. IN THE RESULT ASSESSEE'S APPEALS IN ITA NOS. 1236 AND 1237/HYD/2012 ARE DISMISSED.' 15.4 ACCORDINGLY, PLACING RELIANCE ON THE ABOVE ORDER OF THE TRIBUNAL, THIS GROUND IS DISMISSED. THE ASSESSEE' S APPEAL IN ITA NO. 1108/ HYD/2012 IS PARTLY ALLOWED FOR STATIS TICAL PURPOSES. ITA NO. 1109/HYD/2012 A.Y. 2006-07 BY ASSESSEE 16. THERE WAS A DELAY OF 35 DAYS IN FILING THIS APPEAL BY THE ASSESSEE. THE ASSESSEE FILED A PETITION FOR CONDON ING THE DELAY OF 35 DAYS ACCOMPANIED BY AN AFFIDAVIT STATING AS I N PARA 2 OF THIS ORDER. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 31 16.1 WE ARE SATISFIED WITH THE REASONS ADVANCED BY THE ASSESSEE FOR CONDONING THE DELAY OF 35 DAYS IN FILI NG THIS APPEAL. ACCORDINGLY, THE DELAY OF 35 DAYS IN FILING THE APP EAL IS CONDONED AND THE APPEAL IS ADMITTED AND TAKEN UP FO R ADJUDICATION. 17. THE FIRST GROUND IN THIS APPEAL IS WITH REGARD TO A DDITION OF RS. 9.40 LAKHS RECEIVED FROM THE FOLLOWING PARTI ES: A) SMT. SUDHA REDDY - RS. 5,34,200 B) SWAGRUHA ESTATES - RS. 4,05,800 ---------------- TOTAL RS. 9,40,000 =========== 17.1 BRIEF FACTS OF THE ISSUE ARE THAT WHILE COMPUTING T HE TAXABLE INCOME OF THE ASSESSEE, THE ASSESSING OFFIC ER HAS TREATED THE AMOUNT OF RS. 5,34,200 AND RS. 4,05,800 AS UNEXPLAINED BEING THE ADVANCES FOR PURCHASE OF LAND S, SHOWN TO HAVE BEEN GIVEN BY ASSESSEE DURING THE EARLIER YEAR S BUT RECEIVED BACK DURING THE YEAR UNDER REFERENCE, AS P ER THE RECEIPTS & PAYMENTS ACCOUNT, SUBMITTED BY THE ASSES SEE. THE ASSESSING OFFICER HAS MADE THE ABOVE ADDITION OBSER VING THAT THE ASSESSEE HAS NOT FURNISHED THE BREAK-UP AND DET AILS OF THE SAID ADVANCES WHICH WERE ENQUIRED THROUGH THE QUEST IONNAIRE DT. 15.11.2010. AS PER THE ASSESSING OFFICER, THE ASSESSEE FAILED TO FURNISH THE RELATED DETAILS SUCH AS THE PURPORTE D PURCHASES OF LAND/PROPERTY, PERSONS TO WHOM THE ADVANCES WERE GIVEN, NATURE OF ADVANCES ETC. HOWEVER, IN ONE CASE, THE ASSESSEE HAS SHOWN TO HAVE RECEIVED BACK THE AMOUNT OF RS. 4,05, 800 IN CASH DURING THE YEAR UNDER REFERENCE VIZ., M/S. SWAGRUHA ESTATES, TO WHOM THE ADVANCES STATED TO HAVE BEEN MADE BY THE A SSESSEE DURING THE EARLIER YEARS, THROUGH CHEQUE. ACCORDING LY, THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SEC. 68 OF THE IT ACT, 1961, TREATING THE RECEIPT OF SUCH AMOUNT AS UNEXPL AINED CREDIT I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 32 WHEREIN THE GENUINENESS OF THE TRANSACTION, DETAILS OF THE CREDITORS AND THE CREDITWORTHINESS OF THE PARTIES W ERE NOT PROVED. 17.2 THE ASSESSEE OBJECTED TO THE ABOVE ADDITION AND IT WAS SUBMITTED THAT AN ADVANCE OF RS. 5,34,200 WAS MADE FOR PURCHASE OF PROPERTY IN THE PAST WHICH WAS RECEIVED BACK, SINCE THE TRANSACTION DID NOT MATERIALIZE. SIMILARLY, THE ADVANCE OF RS. 4,08,500 GIVEN EARLIER TO M/S. SWAGRUHA ESTATE FOR PURCHASE OF PLOT WAS SHOWN TO HAVE BEEN RECEIVED BACK DUE TO CA NCELLATION OF THE TRANSACTION. IN THIS REGARD, THE RELEVANT SU BMISSION OF THE ASSESSEE BEFORE THE CIT(A) IS REPRODUCED HEREUNDER; 'IN THIS REGARD, THE APPELLANT HUMBLY SUBMITS THAT THE DETAILS OF THE PERSONS, FROM WHOM EARLIER ADVANCES AMOUNTING TO RS. 5,34,200/ WERE RECEIVED, COULD NOT BE FURNISHED IMMEDIATELY AS THE SAID TRANSACTIONS WERE VERY OLD AND THE DETAILS WERE NOT READILY AVAILABLE. SINCE THE SAID DETAILS WERE REQUIRED TO BE FILED FOR THE FIRST TIME, VIDE LETTE R DT. 15.11.2010, AND THE TIME AVAILABLE WAS VERY SHORT, THE ASSESSEE COULD NOT GATHER/RECOLLECT ALL THE DET AILS WITHIN SUCH SHORT TIME AND AS SUCH HE DID NOT HAVE SUFFICIENT OPPORTUNITY TO FILE THE REQUIRED EVIDENC ES. THE COMPLETE DETAILS ARE NOW GATHERED /RECOLLECTED, AS PER WHICH THE IMPUGNED AMOUNT WAS INITIALLY GIVEN TO MR. P. SRIDHAR REDDY, KOMARIKA (VILLAGE), INDUKURPET (MANDAL), NELLORE (DT) AS ADVANCE FOR PURCHASE OF A PROPERTY. HOWEVER, AS THE SAID DEAL COULD NOT MATERIALIZE, SAME WAS RECEIVED BACK FROM HIM DURING THE RELEVANT YEAR. CONFIRMATION LETTER T O THAT EFFECT ALONG WITH IDENTITY PROOF IS SUBMITTED FOR THE KIND CONSIDERATION OF THE CIT(A). AS THE ASSESS EE WAS PREVENTED FROM FILING THE RELEVANT DETAILS AND EVIDENCES BEFORE THE ASSESSING OFFICER FOR GENUINE REASONS WHICH WERE NEITHER DELIBERATE NOR INTENTIONAL, :THE HONBLE CIT(A) IS PRAYED TO ADMIT THE ABOVE DETAILS AND CONFIRMATION LETTER AS EVIDENCE I N TERMS OF RULE 46A. AS IS EVIDENT FROM THE ASSESSMEN T RECORDS, THE ASSESSEE HAD SUBSTANTIAL INCOME, INCLUDING AGRICULTURAL INCOME, AND AS SUCH HE HAD SUFFICIENT SOURCES FOR THE AMOUNTS ADVANCED IN EARLIER YEARS. FURTHER, THE ASSESSEE FILED RECEIPTS & PAYMENTS ACCOUNTS AND BALANCE SHEETS FOR THE I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 33 PRECEDING YEARS BEFORE THE ASSESSING OFFICER, DURIN G THE ASSESSMENT PROCEEDINGS FOR SUCH ASSESSMENT YEARS. THE STATEMENTS SO FILED WERE TAKEN ON RECORD AND THE SAME WERE NOT DISPUTED BY THE ASSESSING OFFICER. ON THE CONTRARY, THE SAID STATEMENTS WERE RELIED UPON BY THE OFFICER TO MAKE CERTAIN ADDITION S. AS SEEN FROM THE BALANCE SHEET AS AT THE END OF THE PRECEDING YEAR I.E., 31.03.2005, THE LOANS AND ADVANCES, AS REFLECTED ON THE ASSET SIDE, WERE TO T HE TUNE OF RS. 5,79,917 AND AFTER RECEIPT OF THE IMPUGNED AMOUNT OF RS. 5,34,200 AND ANOTHER RECEIPT OF RS. 45,717, THE BALANCE AS ON 31.03.2006 STOOD REDUCED TO NIL. IN VIEW OF THE ABOVE FACTS, T HE ADDITION OF RS. 5,34,200, REPRESENTING AMOUNTS RECOVERED OUT OF EARLIER ADVANCES, IS NOT SUSTAINAB LE BOTH ON FACTS AND IN LAW. COPIES OF THE BALANCE SHEETS AS ON 31.03.2005 AND 31.03.2006 ARE SUBMITTED. WITH REGARD TO RS. 4,05,800 RECEIVED BACK FROM M/S. SWAGRUHA ESTATES, THIS IS TO SUBMIT THAT, AS IS EVIDENT FROM THE VERY RECEIPTS ~ PAYMENTS ACCOUNT, FILED DURING 'THE ASSESSMENT PROCEEDINGS, THE AMOUN T IN QUESTION WAS GIVEN TO THE SAID CONCERN DURING TH E ASSESSMENT YEAR UNDER APPEAL ITSELF AND AS THE TRANSACTION DID NOT MATERIALIZE, IT WAS RECEIVED BA CK FROM THE SAID CONCERN DURING THE SAME YEAR. HOWEVER, THE ASSESSING OFFICER FAILED TO APPRECIATE THE EARLIER PAYMENT OF SIMILAR AMOUNT WHICH WAS REFLECTED IN THE VERY SAME STATEMENT OF ACCOUNT REL IED UPON BY HIM FOR MAKING THE IMPUGNED ADDITION, WHICH IS NOT SUSTAINABLE. COPY OF THE RELEVANT RECEIPTS & PAYMENTS ACCOUNTS IS SUBMITTED FOR THE KIND CONSIDERATION OF THE CIT(A).' 17.3 AS COULD BE SEEN FROM THE ABOVE, THE ASSESSEE HAS FURNISHED THE INFORMATION ON THE TRANSACTION OF RS. 5,34,200, FOR THE FIRST TIME BEFORE THE CIT(A). AS PER THE I NFORMATION FURNISHED BY THE ASSESSEE, THE AMOUNT WAS SHOWN TO HAVE BEEN RECEIVED FROM ONE MR. P. SRIDHAR REDDY OF KOMARIKA VILLAGE, INDUKURPET MANDAL, NELLORE DISTRICT, ANDHRA PRADESH , WHICH WAS GIVEN AS ADVANCE BY THE ASSESSEE AS AN ADVANCE FOR PURCHASE OF PROPERTY AND A CONFIRMATION LETTER AS S HOWN TO HAVE BEEN SIGNED BY MR. SRIDHAR REDDY, WAS FURNISHED BEF ORE THE I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 34 CIT(A). IN CASE OF THE ADVANCE FROM M/S SWAGRUHA E STATE, IT WAS SUBMITTED THAT THE' AMOUNT WAS PAID IN THE FY 2 005-06 AND WAS RECEIVED IN THE SAME FINANCIAL YEAR I.E. F. Y. RELEVANT FOR THE ASSESSMENT YEAR UNDER REFERENCE. THE ACCOUNT EX TRACT OF THE SWAGRUHA ESTATE IN THE BOOKS OF THE ASSESSEE WAS FU RNISHED ALONG WITH THE BANK ACCOUNT OF THE ASSESSEE. SINCE THIS INFORMATION WAS FURNISHED BEFORE THE CIT(A) FOR THE FIRST TIME, THE MATTER WAS REFERRED TO THE ASSESSING OFFICER FO R VERIFICATION AND NECESSARY REPORT UNDER RULE 46A. IN RESPONSE TO THE SAME, THE ASSESSING OFFICER SUBMITTED HIS REPORT VIDE LET TER DT. 6.3.2012 THROUGH THE ADDL.CIT CENTRAL RANGE-2, HYDE RABAD, WHEREIN THE ASSESSING OFFICER HAS SUBMITTED AS UNDE R; 'ADVANCE RETURNED FORM SHRI P. SRIDHAR REDDY OF RS. 5,34,200: IT IS SUBMITTED THAT, AN ADVANCE OF RS. 5,34,200 IS ODD, SINCE ADVANCES ARE GENERALLY GIVEN IN ROUND FIGURES. THE ONLY EVIDENCE FILED IS SELF SERVING DECLARATION AND ID PROOF WITHOUT ANY PARTICULARS AND SUPPORTING EVIDENCE. HENCE NEED NOT BE CONSIDERED. ADVANCE RETURNED FROM M/S SWAGRUHA ESTATES OF RS. 4,05,800 : IN THIS REGARD, THE ADVANCE OF RS. 4,05,800 IS VERY ODD FIGURE, ADVANCES GENERALLY ROUND FIGURES. NO CONFIRMATION IS FILED FROM M/S SWAGRUHA ESTATES. ASSESSEE FILED ONLY LEDGER ACCOUNT COPY AND BANK STATEMENT. NO DETAILS OF WHEN AND HOW THE AMOUNT IS RECEIVED. NO EXPLANATION FOR RECEIVING BACK ADVANCE IN CASH WHIC H WAS GIVEN BY CHEQUE WITH IN JUST A MONTH. HENCE, THE ASSESSEE'S SUBMISSIONS ARE NOT SUSTAINABLE.' 17.4 AS COULD BE SEEN FROM THE INFORMATION BROUGHT ON TH E RECORD BEFORE THE CIT(A), THE CIT(A) OBSERVED THAT THE CONFIRMATION FURNISHED BY SRI P. SRIDHAR REDDY REGA RDING THE RETURN OF THE ADVANCE, IS NOT REALLY RELIABLE FOR T HE REASON THAT NO OTHER INFORMATION REGARDING THE DETAILS OF THE L AND, AGREEMENTS FOR THE SAME, DATE OF PAYMENTS ON EARLIE R OCCASIONS ETC. WERE FURNISHED BY THE PARTY INVOLVED WITH SUCH TRANSACTION AND IT APPEARS THERE IS NO EVIDENCE TO PROVE THE GE NUINENESS OF I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 35 THE TRANSACTION. THE SAID PARTY ALSO NOT HAVING ANY AVENUES EXCEPT THE AGRICULTURAL INCOME, ABOUT WHICH THE CON FIRMATION LETTER TALKS ALL ABOUT. IN A SITUATION WHERE CASH T RANSACTIONS ARE INVOLVED, IT CERTAINLY REQUIRE A CORROBORATIVE EVID ENCE TO PROVE THE GENUINENESS OF THE TRANSACTION. IN THIS CASE, T HERE IS NO EVIDENCE TO INDICATE THAT THE AMOUNTS HAVE REACHED THE PARTY IN EARLIER YEARS TO RECEIVE BACK AND AS SUCH, THE AMOU NTS RECEIVED BY THE ASSESSEE, BECOMES AN UNEXPLAINED CREDIT. THE ASSESSEE FAILED TO FURNISH THE RELIABLE INFORMATION, EVEN AT THE STAGE OF APPEAL PROCEEDINGS. IT IS A WELL SETTLED PROPOSITIO N THAT AS PER THE PROVISIONS OF SEC. 68, THE ASSESSEE IS UNDER OB LIGATION TO PROVE THE THREE CONDITIONS VIZ. (I) THE IDENTITY OF THE CREDITOR, (II) THE CAPACITY OF SUCH CREDITOR TO ADVANCE THE AMOUNT AND (III) THE GENUINENESS OF THE TRANSACTION. THE SECOND CONDITIO N REFERRED TO THE CAPACITY OF THE CREDITOR AND THE THIRD CONDITIO N, REFERRED TO THE GENUINENESS OF THE TRANSACTION CANNOT SAID TO H AVE BEEN ESTABLISHED IN THE CASE OF THE CREDIT STANDING IN T HE NAME OF MR. P. SRIDHAR REDDY, THE CREDITOR FOR RS. 5,34,200, ON THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. UNDER THE CIRCUM STANCES, THE CIT(A) CONFIRMED THE ADDITION. 17.5 REGARDING THE AMOUNT OF RS. 4,05,000 SHOWN TO HAVE ADVANCED TO M/S SWAGRUHA ESTATES, THE RELEVANT DETA ILS COULD NOT BE FURNISHED BY THE ASSESSEE AT THE TIME OF ASS ESSMENT PROCEEDINGS, AS REGARDS TO THE PURCHASE OF LAND/PLO T, EXCEPT FURNISHING THE BANK ACCOUNT OF THE ASSESSEE AND THE ACCOUNT EXTRACT OF THE PARTY IN THE BOOKS OF THE ASSESSEE. THE CIT(A) OBSERVED THAT THE ACCOUNT EXTRACT OF THE ASSESSEE I N THE BOOKS OF THE OTHER PARTY OF THE TRANSACTION VIZ. M/S SWAGRUH A ESTATES OR A CONFIRMATION IN THIS REGARD, WOULD HAVE BEEN MORE RELEVANT. IT IS ALSO NOT CLEAR AS TO WHY THE CREDITOR HAS CHOSEN TO RETURN THE MONEY IN CASH WHEN THE SAME AMOUNTS WERE ACCEPTED B Y WAY OF CHEQUE. FURTHER, THE CREDITOR FAILED TO FURNISH THE CONFIRMATION I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 36 OF THE TRANSACTION IN THIS REGARD THEREBY LEADING T O THE PRESUMPTION THAT THE CASH RECEIVED BACK IS NOT REAL LY RELATED TO THE AMOUNT PAID IN CHEQUE AS ADVANCE. UNDER THE CIRCUMSTANCES, IT WAS HELD BY THE CIT(A) THAT THE C REDITS APPEARING FOR THE YEAR UNDER REFERENCE IN THE FORM OF CASH IS NOT A PROVED TRANSACTION AND AS SUCH THE PROVISIONS OF SEC. 68 ARE ATTRACTED FOR THE CREDIT OF RS. 4,05,800. ACCORDI NGLY, THE ADDITION OF RS. 4,05,800 MADE BY THE ASSESSING OFFI CER IS CONFIRMED BY THE CIT(A). AGAINST THIS THE ASSESSEE IS IN APPEAL BEFORE US. 17.6 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. IN THE PRESENT CASE THE ASSESSEE FILED DETAILS OF ADVANCES LETTER STATING THAT EARLIER ADVANCE GIVEN FOR PURCHASE OF LAND WAS RECEIVED BACK FROM THE PARTY AND IN SUP PORT OF THAT THE ASSESSEE FILED CONFIRMATION LETTER ALONG WITH A DDRESS PROOF TO PROVE THE TRANSACTION. THE DEPARTMENT WITHOUT VERI FYING THESE DOCUMENTS WITH THE PARTIES CONFIRMED THE ADDITION W HICH IS NOT PROPER. IF THE DEPARTMENT IS HAVING ANY DOUBT REGA RDING GENUINENESS OF THE TRANSACTION, IT COULD HAVE VERY WELL EXAMINED THE PARTIES FOR CLEARING THE DOUBT. IN VIEW OF THI S, IN THE INTEREST OF JUSTICE, WE REMIT THE ISSUE TO THE FILE OF THE A SSESSING OFFICER FOR FRESH CONSIDERATION. THIS GROUND IS PARTLY ALL OWED FOR STATISTICAL PURPOSES. ITA NO. 1109/HYD/2012 IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 988/HYD/2012 A.Y. 2008-09 BY REVENUE: 18. THE DEPARTMENT RAISED THE GROUND THAT THE CIT(A) IS ERRED IN DELETING THE ADDITION OF RS. 62 LAKHS MADE U/S. 68 OF THE ACT IN RESPECT OF SRI SRINIVASA RAO NUKALA. AFTER HEAR ING BOTH THE PARTIES, WE ARE OF THE OPINION THAT SIMILAR ISSUE C AME FOR CONSIDERATION IN THE CASE OF SRI A. MAHESH REDDY IN ITA NO. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 37 1437/HYD/2012 FOR A.Y. 2008-09. THE TRIBUNAL VIDE O RDER DATED 19.4.2013 HELD IN PARAS 81 AND 82 AS FOLLOWS: '81. THE LEARNED AR SUBMITTED THAT SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE IN THE CASE O F A. AUDINARAYANA REDDY IN ITA N. 1147/HYD/2012 DATED 22.2.2013 WHEREIN THE TRIBUNAL HELD AS FOLLOWS: '42. THE CIT(A) DELETED THIS ADDITION BY OBSERVING THAT THE ASSESSING OFFICER COULD NOT FORM AN OPINION AS REGARDS TO THE CREDITWORTHINESS OF THE CREDITOR BASED ON THE FACTS THAT HAVE EMERGE D AND EXPLAINED TO HIM AND DRAWN HIS OWN CONCLUSIONS TREATING THE SAID CREDITS AS THE UNEXPLAINED CREDITS FOR WANT OF MORE INFORMATION/EVIDENCE ON THE ISSUE OF CREDITWORTHINESS. THIS CONCLUSION DO NOT CONSTITUTE THE CORRECT DECISION BASED ON THE RATIO THAT HAVE EMANATED FROM THE DECISIONS OF SUPREME COURT IN THE CASE OF CIT VS GUJARAT HEAVY CHEMICALS PVT. LTD REPORTED IN 256 ITR 795, WHEREIN THE HON'BLE SUPREME COURT EXPRESSED ITS OPINION THAT IN CASE WHERE THE SHARE APPLICANTS WERE TO BE CONSIDERED GENUINE, THE RIGHT COURSE FOR THE ASSESSING OFFICER IS TO IDENTIFY THE REAL PERSON TO WHOM THE MONEY BELONG AND ASSESS HIM TO TAX INSTEAD OF ASSESSING THE COMPANY AND AS SUCH THERE WAS NO JUSTIFICATION FOR ASSESSING THE COMPANY. FURTHER, THE RATIO OF TH E DECISION OF BOMBAY HIGH COURT IN THE CASE OF CIT VS TANIA INVESTMENTS (P) LTD. (322 ITR 394) IS SQUAREL Y APPLICABLE IN THIS CASE, WHEREIN THE CREDITORS WERE EXAMINED BY THE ASSESSING OFFICER, DURING THE ASSESSMENT PROCEEDINGS, WHO MAINTAINED THE BOOKS OF ACCOUNTS, WHICH COULD NOT HAVE BEEN BRUSHED ASIDE. 43. FURTHER, IT MAY BE RELEVANT TO NOTE THAT THE CONTRACT WORKS AWARDED BY M/S AMRCL WAS DISBELIEVED AND THE ADDITIONS WERE MADE IN THE HANDS OF M/S AMRCL ON THE SAID ACCOUNT. FURTHER, THE AMOUNT OF CONTRACT RECEIPTS APPEARS TO HAVE ALREADY SUFFERED TAX IN THE HANDS OF THE COMPANY, AS SUCH THERE IS NO BASIS FOR MAKING THE ADDITION ORIGINATING FROM THE SAME AMOUNTS IN THE HANDS OF THE ASSESSEE, BEING THE LOANEE. ON THIS COUNT, THE ADDITION OF RS. 18,00,000 MADE ON ACCOUNT OF AMOUNT STANDING IN THE NAME OF MR. SRINIVASA RAO I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 38 NUKALA, AS UNEXPLAINED CREDIT IS NOT SUSTAINABLE. ACCORDINGLY, DELETION BY CIT(A) IS CONFIRMED. THIS GROUND IS DISMISSED.' 82. FURTHER, SRI N. SRINIVASA RAO WAS THE DIRECTOR IN TWO COMPANIES VIZ., RELIANT METROPOLITAN DEVELOPERS PVT. LTD. (RMDPL) AND M/S. LIVE-IN SHELTERS PVT. LT D. (LSPL) AND THE AMOUNT ADVANCED TO THE ASSESSEE WAS WITHDRAWN BY SRI N. SRINIVASA RAO FROM THESE TWO COMPANIES. THE AMOUNT ADVANCED TO THE ASSESSEE CAME FROM BANK ACCOUNT. THIS FACT WAS NOT DISPUTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER DOUBTED THE TRANSACTION ON THE REASON THAT THE AMOUNT WAS MOVED FROM AMRCL AS A SUBCONTRACT RECEIPT TO THESE TWO COMPANIES WHERE MR. SRINIVASA RAO WAS THE DIRECTOR AND THEN THE AMOUNT WAS WITHDRAWN BY MR SRINIVASA RAO FROM HIS COMPANY AND GIVEN ADVANCE TO THE ASSESSEE. BUT THE FACT OF CARRYING OUT THE CONTRACT WORK AND DISCLOSURE OF CONTRACT RECEIPTS IN THE HANDS OF M/S . LSPL OR IN THE HANDS OF M/S. RMDPL IS NOT DOUBTED. THEY WERE ASSESSED TO TAX BY OFFERING THE CONTRACT RECEIPTS RECEIVED FROM M/S. AMRCL. ONCE THE SAID CONTRACT RECEIPT WAS SUBJECTED TO TAX IN THE HANDS OF LSPL/RMDPL THE DEPARTMENT IS PRECLUDED FROM REJECTING FLOW OF FUNDS OR WITHDRAWAL OF FUNDS FROM THESE COMPANIES BY THE DIRECTOR AND IT IS TO BE CONSIDERED AS THE AMOUNT RECEIVED BY THESE TWO COMPANIES, IS AVAILABLE AS SOURCES FOR THAT COMPANY . THE UTILISATION OF FUNDS IS LEFT TO THE RESPECTIVE ASSESSEES. THE DIRECTORS MAY USE IT FOR ANY PURPOS E AS THEY LIKE. THE DEPARTMENT CANNOT SAY TO UTILISE THE SAME IN A PARTICULAR MANNER. BEING SO, CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE INCLINED TO CONFIRM THE ORDER OF T HE CIT(A) ON THIS ISSUE. THIS GROUND OF THE REVENUE I S REJECTED. FURTHER THE GROUND RELATING TO S. 2(22) (E) IS REJECTED ON THE SAME LINES AS IN ITA NO. 1240/HYD/2012 AS IN PARA 29.' 18.1 RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE TRIBU NAL, WE ARE INCLINED TO CONFIRM THE DELETION OF ADDITION MA DE BY THE CIT(A). ITA NO. 988/HYD/2012 IS DISMISSED. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 39 ITA NO. 989/HYD/2012 A.Y. 2009-10 BY REVENUE: 19. THE FIRST GROUND IN THIS APPEAL IS WITH REGARD TO DELETION OF ADDITION OF RS. 2,77,000 RECEIVED FROM C. HANUMA NTHA REDDY. THE AMOUNT RECEIVED FROM SRI C. HANUMANTHA REDDY, PROPRIETOR OF HR CONSTRUCTIONS IS BY CHEQUE AND THE ASSESSEE FURNISHED CONFIRMATION LETTER FROM HIS AND HE WAS A SSESSED TO TAX AND THERE IS NO NECESSITY TO DOUBT THE CREDITWO RTHINESS OF SRI C. HANUMANTHA REDDY FOR SUCH A SMALL AMOUNT. B EING SO, IN OUR OPINION, THIS CREDIT IS TO BE TREATED AS GEN UINE. ACCORDINGLY, WE CONFIRM THE DELETION OF ADDITION. THIS GROUND IS DISMISSED. 20. THE NEXT GROUND IS WITH REGARD TO DELETION OF ADDIT ION OF RS. 50 LAKHS IN THE NAME OF SRI P. MUDDU KRISHNA RE DDY. AFTER HEARING BOTH THE PARTIES, WE FIND THAT SIMILAR ISSU E CAME FOR CONSIDERATION OF THIS TRIBUNAL IN THE CASE OF SRI A . MAHESH REDDY IN ITA NO. 1240/HYD/2012. ADMITTEDLY, SIMILA R ISSUE CAME FOR CONSIDERATION IN ITA NO. 275/HYD/2012 IN T HE CASE OF M/S. AMR HOSPITALITY SERVICES PVT. LTD. THE TRIBUNA L VIDE ORDER DATED 22.2.2013 DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE WHICH IS REPRODUCED WHILE DECIDING SIMILAR ISSUE IN PARA 3.2 OF THIS ORDER. ACCORDINGLY, WE CONFIRM THE DELETION O F ADDITION. THIS GROUND IS DISMISSED. ITA NO. 989/HYD/2012 IS DISMISSED. SRI A. GIRISH REDDY: ITA NO. 1100/HYD/2012 A.Y. 2004-05 BY ASSESSEE: 21. IN THIS APPEAL THE ASSESSEE RAISED THE GROUND THAT THE CIT(A) IS ERRED IN SUSTAINING ADDITION OF RS. 11,70 ,000 MADE U/S. 68 OF THE ACT WITHOUT GIVING OPPORTUNITY OF HE ARING TO THE ASSESSEE. 21.1 BRIEF FACTS OF THE ISSUE ARE THAT WHILE COMPUTING T HE TAXABLE INCOME OF THE ASSESSEE, THE ASSESSING OFFIC ER HAS I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 40 TREATED THE AMOUNT OF RS. 9,90,000/- SHOWN TO HAVE BEEN RECEIVED FROM SHRI A. VAMSHI KRISHNA REDDY AND RS. 1,80,000/- FROM M/S K.S.M. VENTURES, WHICH WERE STATED TO HAVE BEEN ADVANCED BY THE ASSESSEE AS ADVANCE FOR PURCHASE OF LAND IN EARLIER YEARS, AS UNEXPLAINED CREDITS. THE ASSESSIN G OFFICER HAS MADE THE ABOVE ADDITION OBSERVING THAT THE ASSESSEE HAS NOT FURNISHED THE DETAILS OF THE SAID ADVANCES WHICH WE RE ENQUIRED THROUGH THE QUESTIONNAIRE DATED 15.11.2010. AS PER THE ASSESSING OFFICER, THE ASSESSEE FAILED TO FURNISH T HE RELATED DETAILS SUCH AS NAME AND ADDRESS OF THE PERSONS TO WHOM THE ADVANCES WERE GIVEN, NATURE OF ADVANCES, MODE OF PA YMENT ETC. ACCORDINGLY, THE ASSESSING OFFICER INVOKED THE PROV ISIONS OF SEC. 68 OF THE IT ACT, 1961, TREATING THE RECEIPT OF SUC H AMOUNT AS UNEXPLAINED CREDIT, WHEREIN THE GENUINENESS OF THE TRANSACTION, DETAILS OF THE CREDITORS AND THE CREDITWORTHINESS O F THE PARTY WAS NOT PROVED. 21.2 THE ASSESSEE OBJECTED TO THE ABOVE ADDITION OF RS. 11,70,000/- AND WHILE FURNISHING THE WRITTEN SUBMIS SION, IT WAS SUBMITTED THAT THE AMOUNTS OF RS. 9,90,000/- AND RS . 1,80,000/- WERE THE AMOUNTS RECEIVED FROM SHRI A.VA MSHI KRISHNA REDDY AND M/S. K.S.M. VENTURES RESPECTIVELY , WHICH WERE ADVANCED BY THE ASSESSEE IN THE EARLIER YEAR F OR PURCHASE OF LAND AND SINCE THE TRANSACTION WAS NOT MATERIALI ZED, THE SAME AMOUNTS WERE RECEIVED BACK BY THE ASSESSEE DUR ING THE YEAR UNDER CONSIDERATION. IT WAS FURTHER ELABORATED THAT THE AMOUNTS WERE RECEIVED FROM THE PERSONS WHOSE IDENTI TIES ARE AVAILABLE AND THE AMOUNTS WERE RECEIVED BACK SINCE THE DEAL 'WAS NOT MATERIALIZED AND THE CONFIRMATION LETTER R EGARDING THE TRANSACTION WITH SHRI A. VAMSHI KRISHNA REDDY WAS F URNISHED DURING THE COURSE OF THE FIRST APPELLATE PROCEEDING S. IN THE CASE OF M/S. K.S.M. VENTURES, THE LEDGER EXTRACTS OF THE CONCERN ALONG WITH THE RECEIPT AND PAYMENT ACCOUNT FOR THE YEAR 2002- I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 41 03 AND 03-04 WAS SUBMITTED. WHILE FURNISHING THE CO NFIRMATION LETTER, THE ASSESSEE ALSO SUBMITTED THAT THERE WERE ENOUGH SOURCES TO THE ASSESSEE FOR ADVANCING THE AMOUNTS I N THE EARLIER YEARS WHICH WERE ALSO REFLECTED IN THE RECEIPTS AND PAYMENT ACCOUNT AND BALANCE SHEET IN THE PRECEDING YEARS, W HICH WERE FURNISHED BEFORE THE ASSESSING OFFICER. IT WAS ARGU ED BY THE ASSESSEE BEFORE THE CIT(A) THAT THE ASSESSING OFFIC ER FAILED TO APPRECIATE THE PAYMENT OF SIMILAR AMOUNT BY THE ASS ESSEE TO M/S. K.S.M. VENTURES, WHICH WAS REFLECTED IN THE VE RY SAME STATEMENT OF ACCOUNT RELIED UPON BY HIM FOR MAKING THE IMPUGNED ADDITION. 21.3 SINCE, THE SAID INFORMATION WAS FURNISHED FOR THE F IRST TIME BEFORE THE APPELLATE AUTHORITY, THE SAME WAS R EFERRED TO THE ASSESSING OFFICER FOR HIS COMMENTS. THE ASSESSING O FFICER HAS FURNISHED HIS REPORT VIDE LETTER DATED 07.03.2012, WHICH HAS BEEN FORWARDED BY THE ADDI.CIT, CR-2 VIDE HIS LETTE R DATED 30- 03-2012. AS COULD BE SEEN FROM THE FACTS OF THE CAS E AS WELL AS THE REMARKS OF THE ASSESSING OFFICER, THE CONFIRMAT ION FROM SRI A. VAMSHI KRISHNA REDDY WAS ON PLAIN PAPER BY ENCLO SING THE COPY OF .THE DRIVING LICENCE FOR THE PURPOSE OF IDE NTITY, WITHOUT ANY FURTHER DETAILS TO INDICATE THE GENUINENESS OF THE TRANSACTION AND THE CREDITWORTHINESS OF THE CREDITO R. 21.4 AS COULD BE SEEN FROM THE INFORMATION BROUGHT ON T HE RECORD, THE ASSESSEE COULD NOT FURNISH THE BASIC IN FORMATION EXCEPT THE IDENTITY OF THE CREDITOR IN THE FORM OF CONFIRMATION ON PLAIN PAPER. ACCORDING TO THE CIT(A), THE BASIC INF ORMATION REQUIRED FOR THE PURPOSE OF EXPLAINING THE CREDITS SUCH AS BANK ACCOUNT STATEMENTS, INCOME TAX ASSESSMENT PARTICULA RS, WERE FOUND MISSING IN THE EXPLANATION OFFERED BY THE ASS ESSEE. THE ASSESSEE ALSO FAILED TO EXPLAIN THE PURPOSE 'FOR WH ICH SUCH AMOUNTS WERE GIVEN AS ADVANCES DURING THE EARLIER Y EARS WITH I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 42 THE HELP OF THE REQUIRED DOCUMENTARY EVIDENCE. FURT HER, THE ENTRIES IN THE RECEIPTS AND PAYMENTS ACCOUNT MAY NO T BE A FOOLPROOF EVIDENCE SINCE SUCH STATEMENTS WERE DRAWN BY THE ASSESSEE SUBSEQUENT TO THE DATE OF SEARCH PROCEEDIN GS. 21.5 THE CIT(A) OBSERVED THAT THE ASSESSEE FAILED TO FUR NISH THE RELIABLE INFORMATION, EVEN AT THE STAGE OF APPE AL PROCEEDINGS. IT IS A WELL SETTLED PROPOSITION THAT AS PER THE PR OVISIONS OF SEC. 68, THE ASSESSEE IS UNDER OBLIGATION TO PROVE THE T HREE CONDITIONS VIZ. (I) THE IDENTITY OF THE CREDITOR, ( II) THE CAPACITY OF SUCH CREDITOR TO ADVANCE THE AMOUNT AND (III) THE G ENUINENESS OF THE TRANSACTION. THE MAIN CONDITION SUCH AS THE CAP ACITY OF THE CREDITORS AS REGARDS THE GENUINENESS OF THE TRANSAC TIONS WERE NOT DISCHARGED BY THE ASSESSEE, EXCEPT FURNISHING T HE CONFIRMATION ON A PLAIN PAPER BY ENCLOSING THE COPY OF THE DRIVING LICENCE AND THE ACCOUNT EXTRACT. IN THE CAS E OF THE AMOUNTS OF RS. 1,80,000 SHOWN TO HAVE BEEN RECEIVED FROM M/S. K.S.M. VENTURES, NO CONFIRMATION WAS FURNISHED AND ONLY AN ACCOUNT EXTRACT COULD BE PRODUCED. UNDER THE ABOVE CIRCUMSTANCES, THE CIT(A) ACCEPTED THE OBSERVATIONS OF THE ASSESSING OFFICER IN TREATING THE SAID AMOUNT OF RS. 11,70,00 , BEING THE CREDITS IN THE NAMES OF SHRI A. VAMSHI KR ISHNA REDDY AND M/S. K.S.M. VENTURES, AS UNEXPLAINED CREDITS, I N ABSENCE OF ANY CREDIBLE INFORMATION TO PROVE THE TRANSACTIONS AS GENUINE. THE RATIOS OF THE JUDICIAL DECISIONS RELIED UPON BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDERS ARE APPLICABLE TO THE FACTS OF THE CASE FOR THE YEAR UNDER REFERENCE. THEREFORE, THE ADDITIONS ARE CONFIRMED BY THE CIT(A). AGAINST THIS THE ASSES SEE IS IN APPEAL BEFORE US. 21.6 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. THE ASSESSEE HAS FAILED TO DISCHARGE TH E BURDEN CAST UPON HIM AS THE IDENTITY OF THE CREDITOR IS ONLY PR OVED AND OTHER I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 43 INGREDIENTS OF SECTION 68 OF THE ACT AS HELD BY JUR ISDICTIONAL HIGH COURT IN THE CASE OF R.B. MITTAL (SUPRA) ARE N OT DISCHARGED. ACCORDINGLY, WE HAVE NO HESITATION IN CONFIRMING TH E ORDER OF THE CIT(A). THIS GROUND IS DISMISSED. ITA NO. 110 0/HYD/2012 IS DISMISSED. ITA NO. 1101/HYD/2012 A.Y. 2005-06 BY ASSESSEE: 22. IN THIS APPEAL THE ASSESSEE RAISED THE GROUND WITH REGARD TO SUSTAINING ADDITION OF RS. 8 LAKHS IN THE NAME O F SRI P. JANARDHAN REDDY AND RS. 5,20,000 FROM MS. SUSHMITA AND ALSO GIFT OF RS. 6 LAKHS RECEIVED FROM CLOSE RELATIVES. 22.1 BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSING OFF ICER TREATED RS. 8 LAKHS RECEIVED FROM SRI P. JANARDHAN REDDY AND RS. 5,20,000 RECEIVED FROM SMT. SUSHMITA AS UNEXPLA INED CREDITS U/S. 68 OF THE ACT. FURTHER, THERE WAS AN AMOUNT OF RS. 6 LAKHS SAID TO HAVE BEEN RECEIVED FROM FOLLOW ING PARTIES, SRI A. MAHESH REDDY (RS. 3.5 LAKHS), SRI A. AUDINAR AYANA REDDY (RS. 1.5 LAKHS) AND FROM OTHERS (RS. 1 LAKHS) TOTA LLING TO RS. 6,00,000. THE ASSESSEE HAS NOT FURNISHED NECESSARY DETAILS AS REQUIRED U/S. 68 OF THE ACT AND THE SAME WAS TREATE D AS UNEXPLAINED CREDIT U/S. 68 OF THE ACT. EVEN BEFORE THE CIT(A) THE POSITIONS CONTINUED AS IN EARLIER YEARS. THE C IT(A) CONFIRMED THE ADDITION. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 22.2 AS OBSERVED IN EARLIER PARA IN ITA NO. 1100/HYD/201 2, PLACING RELIANCE ON THE JUDGEMENT IN THE CASE OF R. B. MITTAL (CITED SUPRA), THIS GROUND, WITH REGARD TO UNEXPLAI NED CREDIT IN THE NAME OF SRI JANARDHAN REDDDY AND SMT. SUSHMITA, IS DISMISSED. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 44 22.3 FURTHER REGARDING GIFT, THE ASSESSEE IS SAID TO HAV E RECEIVED THESE GIFTS FROM CLOSE RELATIVES AND THE G IFTS WERE REFLECTED IN THE RESPECTIVE ACCOUNTS WHO ARE ASSESS ED TO TAX. HOWEVER, AS HELD ELSEWHERE IN THIS ORDER, THE DRAWI NGS SHOWN BY THE DONORS ARE NOT ENOUGH TO MATCH THE GIFT MADE BY THEM. ACCORDINGLY, PLACING RELIANCE IN THE JUDGEMENT OF S UPREME COURT IN THE CASE OF P. MOHAN KALA (CITED SUPRA), T HIS GROUND IS ALSO DISMISSED. 22.4 ALL OTHER GROUNDS IN THIS APPEAL ARE DISMISSED. IT A NO. 1101/HYD/2012 IS DISMISSED. ITA NO. 1102/HYD/2012 A.Y. 2006-07 BY ASSESSEE: 23. THE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS WITH REGARD TO SUSTAINING ADDITION U/S. 68 OF THE AMOUNT S RECEIVED FROM M/S. SWAGRUHA ESTATES RS. 6 LAKHS, MS. APARN A RS. 6,02,169 AND GIFTS OF RS. 4,50,000 FROM FAMILY MEMB ERS AND RELATIVES. 23.1 BRIEF FACTS OF THE ISSUE ARE THAT WHILE COMPUTING T HE TAXABLE INCOME OF THE ASSESSEE, THE ASSESSING OFFIC ER HAS TREATED THE AMOUNT OF RS. 6,02,169 RECEIVED FROM MS . APARNA AS ADVANCE FOR SALE OF LAND AND RS. 6,00,000 FROM M/S. SWAGRUHA ESTATES BEING THE AMOUNT RECEIVED BACK FOR THE AMOU NTS ADVANCED IN THE SAME YEAR, AS PER THE RECEIPTS & PA YMENTS ACCOUNT, SUBMITTED BY THE ASSESSEE, AS UNEXPLAINED CREDITS. THE ASSESSING OFFICER HAS MADE THE ABOVE ADDITION OBSER VING THAT THE ASSESSEE HAS NOT FURNISHED THE DETAILS OF THE S AID ADVANCES WHICH WERE ENQUIRED THROUGH THE QUESTIONNAIRE DATED 15.11.2010. AS PER THE ASSESSING OFFICER, THE ASSES SEE FAILED TO FURNISH THE RELATED DETAILS SUCH AS NAME AND ADDRES S OF THE PERSONS TO WHOM THE ADVANCES WERE GIVEN, NATURE OF ADVANCES, MODE OF PAYMENT ETC. HOWEVER, IN ONE CASE, THE ASSE SSEE SHOWN I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 45 TO HAVE RECEIVED BACK THE AMOUNT OF RS. 6,00,000 IN CASH DURING THE YEAR UNDER REFERENCE VIZ. M/S. SWAGRUHA ESTATES, TO WHOM THE ADVANCES STATED TO HAVE BEEN MADE BY THE A SSESSEE- DURING THE SAME YEAR, THROUGH CHEQUE. ACCORDINGLY, THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SEC. 68 OF THE IT ACT, 1961, TREATING THE RECEIPT OF SUCH AMOUNT AS UNEXPL AINED CREDIT WHEREIN THE GENUINENESS OF THE TRANSACTION, DETAILS OF THE CREDITORS AND THE CREDITWORTHINESS OF THE PARTY WAS NOT PROVED. 23.2 THE ASSESSEE OBJECTED TO THE ABOVE ADDITION OF RS. 12,02,169 BEFORE THE CIT(A). IT WAS SUBMITTED THAT AN ADVANCE OF RS. 6,02,169 WAS RECEIVED FROM MS. APARNA AS ADV ANCE FOR PURCHASE OF LAND BY WAY OF AN ACCOUNT PAYEE CHEQUE AND AS THE DEAL DID NOT GO THROUGH, THE AMOUNT WAS RETAINED. I T WAS ALSO SUBMITTED THAT SINCE THE SAID PERSON IS NOT BEING I N TOUCH WITH THE ASSESSEE IN VIEW OF THE LAPSE OF ALMOST SIX YEA RS, SHE COULD NOT BE CONTACTED AND ACCORDINGLY THE CONFIRMATION L ETTER AND OTHER NECESSARY EVIDENCES COULD NOT BE GATHERED AND PRODUCED. SIMILARLY, REGARDING THE AMOUNT OF RS. 6,00,000 REC EIVED FROM M/S. SWAGRUHA ESTATE, IT WAS SUBMITTED THAT THE IMP UGNED AMOUNT WAS GIVEN AS ADVANCE DURING THE YEAR AND AS THE TRANSACTION DID NOT MATERIALIZE, THE AMOUNT WAS REC EIVED BACK FROM THE SAID CONCERN DURING THE SAME YEAR. IT WAS FURTHER CONTENDED BY THE ASSESSEE THAT THE ASSESSING OFFICE R FAILED TO APPRECIATE THAT PAYMENTS MADE IN THE SAME YEAR EARL IER WHICH IS REFLECTED IN THE VERY STATEMENT OF ACCOUNT AS RE LIED UPON BY THE ASSESSING OFFICER, FOR MAKING THE ADDITION AND AS SUCH THE SAME NOT SUSTAINABLE. THE ASSESSEE HAS ALSO FURNISH ED THE ACCOUNT EXTRACT OF M/S. SWAGRUHA ESTATES INDICATING THE TRANSACTION. SINCE, THE SAID INFORMATION WAS FURNIS HED FOR THE FIRM TIME BEFORE THE APPELLATE AUTHORITY, THE SAME WAS REFERRED TO THE ASSESSING OFFICER FOR HIS COMMENTS. THE ASSE SSING OFFICER HAS FURNISHED HIS REPORT VIDE LETTER DATED 07-03-20 12, WHICH I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 46 HAS BEEN FORWARDED BY THE ADDI.CIT, CR-2 VIDE HIS L ETTER DATED 30-03-2012. 23.3 THE CIT(A) OBSERVED THAT THE ASSESSEE HAD FAILED TO FURNISH THE BASIC INFORMATION SUCH AS THE IDENTITY OF THE CREDITOR IN THE FORM OF CONFIRMATION ETC., AS REGARD TO THE ADVANCE OF RS. 6,02,169 SHOWN TO HAVE RECEIVED FROM SMT. APARNA. T HE INFORMATION AS REGARD TO THE LAND WHICH WAS PURPORT ED TO BE PURCHASED BY THE CREDITOR FROM THE ASSESSEE WAS ALS O NOT FURNISHED BY THE ASSESSEE. AS PER THE ADMITTANCE OF THE ASSESSEE HIMSELF, THE CONFIRMATION COULD NOT BE FUR NISHED FROM THE SAID PARTY ON THE GROUND THAT IN VIEW OF LAPSE OF SIX YEARS, THE CREDITOR COULD NOT BE CONTACTED. AS REGARDS THE AMOUNT OF RS. 6,00,000 RECEIVED FROM M/S SWAGRUHA ESTATE, IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE CIT(A) THAT TH E AMOUNT WAS PAID IN THE SAME YEAR ON EARLIER OCCASION FOR C ERTAIN TRANSACTION AND SINCE THE TRANSACTION DID NOT MATER IALIZE, THE AMOUNT WAS RECEIVED BACK BY THE ASSESSEE IN THE SAM E YEAR. IT WAS FURTHER INDICATED B Y THE ASSESSEE AS PER THE ACCOUNT EXTRACTS OF M/S SWAGRUHA ESTATES IN THE BOOKS OF TH E ASSESSEE, THAT WHILE THE ADVANCES WERE PAID IN CHEQUES, IT WA S RECEIVED BACK IN CASH. THE CIT(A) OBSERVED THAT THE ASSESSE E HAS FAILED TO FURNISH THE CONFIRMATION LETTER IN SUPPORT OF TH E CLAIM OF GENUINENESS OF THE CREDIT IN THE BOOKS OF THE ASSES SEE. 23.4 ACCORDING TO THE CIT(A), THE ASSESSEE FAILED TO FUR NISH THE RELIABLE INFORMATION, EVEN AT THE STAGE OF APPEAL P ROCEEDINGS. IT IS A WELL SETTLED PROPOSITION THAT AS PER THE PROVI SIONS OF SEC. 68, THE ASSESSEE IS UNDER OBLIGATION TO PROVE THE THREE CONDITIONS VIZ. (I) THE IDENTITY OF THE CREDITOR, (II) THE CAP ACITY OF SUCH CREDITOR TO ADVANCE THE AMOUNT AND (III) THE GENUIN ENESS OF THE TRANSACTION. ALL THE CONDITIONS AS REFERRED ABOVE A RE NOT DISCHARGED BY THE ASSESSEE, IN THE CASE OF THE CRED IT STANDING IN I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 47 THE NAME OF SMT. APARNA, THE CREDITOR FOR RS. 6,02, 169, AS PER THE FACTS OF THE CASE. UNDER THE CIRCUMSTANCES, THE CIT(A) CONFIRMED THE FINDINGS OF THE ASSESSING OFFICER IN TREATING THE SAID AMOUNT OF RS. 6,02,169 AS UNEXPLAINED CREDIT, IN ABSENCE OF ANY CREDIBLE INFORMATION TO PROVE THE TRANSACTIO N AS GENUINE. 23.5 REGARDING THE AMOUNT OF RS. 6,00,000/- SHOWN TO HAV E BEEN RECEIVED FROM M/S SWAGRUHA ESTATES, THE CIT(A) OBSERVED THAT THE RELEVANT DETAILS COULD NOT BE FURNISHED BY THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS, AS REGARDS T O THE RELATED TRANSACTION EXCEPT FURNISHING THE RECEIPTS AND PAYM ENT ACCOUNT IN THE BOOKS OF THE ASSESSEE. IT IS ALSO NOT CLEAR AS TO WHY THE CREDITOR HAS CHOSEN TO RETURN THE MONEY IN CASH WHE N THE SAME AMOUNTS WERE ACCEPTED BY WAY OF CHEQUE. FURTHER, TH E CREDITOR FAILED TO FURNISH THE CONFIRMATION OF THE TRANSACTI ON IN THIS REGARD THEREBY LEADING TO THE PRESUMPTION THAT THE CASH RECEIVED BACK IS NOT REALLY RELATED TO THE AMOUNT P AID IN CHEQUE AS ADVANCE. UNDER THE CIRCUMSTANCES, IT WAS HELD BY THE CIT(A) THAT THE CREDITS APPEARING FOR THE YEAR UNDER REFER ENCE IN THE FORM OF CASH IS NOT A PROVED TRANSACTION AND AS SUC H THE PROVISIONS OF SEC. 68 ARE ATTRACTED FOR THE CREDIT OF RS. 6,00,000/-. THE GENUINENESS OF THE TRANSACTION IS NOT STATED TO BE ESTABLISHED IN ABSENCE OF THE CONFIRMATION FOR T HE CREDIT OF RS. 6,00,000/- FROM M/S SWAGRUHA ESTATES. ACCORDIN GLY, THE ADDITION OF RS. 6,00,000 MADE BY THE ASSESSING OFFI CER IS CONFIRMED BY THE CIT(A). AGAINST THIS THE ASSESSEE IN APPEAL BEFORE US. 23.6 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. AS HELD IN ITA NO. 1109/HYD/2012 IN THE CASE OF SMT. LATHA REDDY, THE ISSUE RELATING TO THESE TWO A DDITIONS IN RESPECT OF M/S. SWAGRUHA ESTATES RS. 6 LAKHS AND MS. APARNA RS. 6,02,129 ARE REMITTED BACK TO THE FILE OF TH E ASSESSING I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 48 OFFICER FOR FRESH CONSIDERATION. REGARDING THE GIFT , AS HELD IN ITA NO. 1101/HYD/2012 IN ASSESSEES OWN CASE, THE ASSES SEE IS SAID TO HAVE RECEIVED THESE GIFTS FROM CLOSE RELATIVES A ND THE GIFTS WERE REFLECTED IN THE RESPECTIVE ACCOUNTS WHO ARE A SSESSED TO TAX. HOWEVER, AS HELD ELSEWHERE IN THIS ORDER, THE DRAWINGS SHOWN BY THE DONORS ARE NOT ENOUGH TO MATCH THE GIF T MADE BY THEM. ACCORDINGLY, PLACING RELIANCE IN THE JUDGEME NT OF SUPREME COURT IN THE CASE OF P. MOHAN KALA (CITED S UPRA), THIS ADDITION TOWARDS GIFT IS CONFIRMED. ITA NO. 1102/H YD/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1103/HYD/2012 A.Y. 2007-08 BY ASSESSEE: 24. THE ASSESSEE RAISED THE GROUND THAT THE CIT(A) HAS ERRED IN SUSTAINING THE ADDITION MADE U/S. 68 OF THE ACT IN THE NAMES OF FOLLOWING PERSONS: 1. SRI SREEDHAR REDDY - RS. 25,000 2. M/S. SR CONSTRUCTIONS - RS. 14,03,000 24.1 WHILE COMPUTING THE TAXABLE INCOME OF THE ASSESSEE, THE ASSESSING OFFICER HAS TREATED THE AMOUNT OF RS. 14, 03,000 AND RS. 25,000 BEING THE AMOUNTS RECEIVED FROM M/S. SR CONSTRUCTIONS AND MR. B. SREEDHAR REDDY, RESPECTIVE LY, DURING THE YEAR UNDER REFERENCE, AS PER THE RECEIPTS & PAY MENTS ACCOUNT, SUBMITTED BY THE ASSESSEE, AS UNEXPLAINED CREDITS. THE ASSESSING OFFICER HAS MADE THE ABOVE ADDITION O BSERVING THAT THE ASSESSEE HAS NOT FURNISHED THE BREAK-UP AN D DETAILS OF THE SAID ADVANCES WHICH WERE ENQUIRED THROUGH THE QUESTIONNAIRE DATED 15.11.2010. AS PER THE ASSESSI NG OFFICER, THE ASSESSEE FAILED TO FURNISH THE RELATED DETAILS SUCH AS NAME AND ADDRESS OF THE PERSONS, NATURE OF ADVANCES AND SOURCES OF THE ADVANCES GIVEN EARLIER. ACCORDINGLY, THE ASSES SING OFFICER INVOKED THE PROVISIONS OF SEC. 68 OF THE ACT, TREAT ING THE RECEIPTS OF SUCH AMOUNT AS UNEXPLAINED CREDITS WHEREIN THE G ENUINENESS I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 49 OF THE TRANSACTION, DETAILS OF THE CREDITORS AND TH E CREDITWORTHINESS OF THE PARTIES WERE NOT PROVED. 24.2 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. AS OBSERVED BY THE CIT(A), THE ASSESSEE FAILED TO ESTABLISH THE GENUINENESS OF THE CREDITS. BEING SO , PLACING RELIANCE ON THE JUDGEMENT IN THE CASE OF R.B. MITTA L (SUPRA), THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. ITA NO . 1103/HYD/ 2012 IS DISMISSED. ITA NO. 1104/HYD/2012 A.Y. 2008-09 BY ASSESSEE : ITA NO. 1095/HYD/2012 A.Y. 2008-09 BY REVENUE : 25. IN THIS APPEAL, THE ASSESSEE RAISED THE GROUND THAT THE CIT(A) IS ERRED IN SUSTAINING THE ADDITION MADE U/S . 68 OF THE ACT IN RESPECT OF THE FOLLOWING PERSONS: A) SRI CHAITANYA KUMAR - RS. 7,00,000 B) M/S. LORDVEN - RS. 4,00,000 25.1 FOR THE SAME ASSESSMENT YEAR, THE REVENUE IS ALSO I N APPEAL FOR DELETING THE ADDITION U/S. 68 OF THE ACT IN RESPECT OF THE FOLLOWING PARTIES: A) N. SRINIVASA RAO - RS. 85,00,000 B) SMT. SUGUNAMMA - RS. 1,00,00,000 25.2 BRIEF FACTS OF THE ISSUE ARE THAT WHILE COMPUTING T HE TAXABLE INCOME OF THE ASSESSEE, THE ASSESSING OFFIC ER HAS TREATED THE FOLLOWING AMOUNTS OF LOANS/ADVANCES AS SHOWN BY THE ASSESSEE ON THE LIABILITIES SIDE OF THE BALANCE SHEET, AS UNEXPLAINED CREDITS U/S 68 OF THE IT ACT, 1961: A) LORD VEN ENTERPRISES - RS. 4,00,000 B) SHRI SRINIVASA RAO NUKALA - RS. 85,00,000 C) SUGUNAMMA - RS. 1,00,00,000 D) K. SUBBA LAKSHMI - RS. 20,00,000 E) CHAITANYA KUMAR RS. - RS. 7,00,000 --------------------- TOTAL RS. 2,16,00,000 ============= I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 50 25.3 WHILE TREATING THE SAID AMOUNTS AS UNEXPLAINED CRED ITS IN THE HANDS OF THE ASSESSEE, THE ASSESSING OFFICER HA S MADE CERTAIN SPECIFIC REMARKS ON EACH OF THE ADVANCES/LO ANS OBTAINED BY THE ASSESSEE DURING THE YEAR UNDER REFERENCE WIT H SPECIAL REFERENCE TO THE AMOUNTS OBTAINED FROM SHRI SRINIVA SA RAO NUKALA, K. SUBBA LAKSHMI AND SMT. SUGUNAMMA. FURTHE R, AS PER THE INFORMATION BROUGHT ON THE RECORD, THE ASSE SSING OFFICER SUMMONED SHRI SRINIVASA RAO NUKALA, DURING THE COUR SE OF ASSESSMENT PROCEEDINGS AND THE CONCLUSIONS DRAWN RE GARDING THE TRANSACTIONS WITH THE SAID PARTY, WERE BASED ON SUCH STATEMENT. 25.4 THE OBSERVATIONS/FINDINGS OF THE ASSESSING OFFICER AS REGARDS TO THE LOANS/ADVANCES OBTAINED FROM THE ABO VE PARTIES/ CREDITORS, WITH REFERENCE TO THE GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE CREDITORS, AS UNDER: (I) IN RESPECT OF ADVANCE RECEIVED FROM M/S. LORDVEN ENTERPRISES TO THE TUNE OF RS. 4,00,000/-, IT WAS O BSERVED BY THE ASSESSING OFFICER THAT THE SAID AMOUNTS WERE SH OWN TO HAVE RECEIVED FROM THE PARTY TOWARDS ADVANCES AGAIN ST THE PURCHASE OF AGRICULTURAL PRODUCTS FROM THE ASSESSEE , WHICH WAS ADJUSTED AGAINST THE AGRICULTURAL INCOME OF THE ASSESSEE IN THE SUBSEQUENT YEARS, BUT WITHOUT FURNISHING ANY DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE RECEIPT OF THE AMOUNT FROM THE ABOVE PARTY. IT WAS ALSO OBSERVED T HAT THE PRIMARY DETAILS LIKE PAN, ASSESSMENT PARTICULARS, M ODE OF PAYMENT OF CHEQUE/DD WERE NOT FURNISHED. (II) IN CASE OF SRI SRINIVASA RAO NUKALA, A SWORN STATEM ENT WAS RECORDED ON 01.10.2010 WHEREIN DETAILS REGARDING TH E SOURCES OF INVESTMENTS AND THE ACTIVITIES OF SRI SR INIVASA RAO NUKALA WERE ENQUIRED AND AS PER THE SAME, IT RE VEALED I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 51 THAT SRI SRINIVASA RAO NUKALA CARRIED ON SUB-CONTRA CT WORKS FOR M/S. AMR CONSTRUCTIONS LIMITED (AMRCL), THE FLA GSHIP COMPANY OF THE GROUP, IN THE NAME OF M/S LIVE-IN SH ELTERS PVT. LTD, (LSPL), AND M/S RELIANT METROPOLITAN DEVE LOPERS PVT. LTD (RMDPL), WHEREIN SRI SRINIVASA RAO NUKALA IS A DIRECTOR. BASED ON THE FINDINGS AND THE CONTENTS OF THE SWORN STATEMENT RECORDED FROM SRI SRINIVASA RAO NUK ALA, THE ASSESSING OFFICER HAS ARRIVED AT THE CONCLUSION THAT MR. A. MAHESH REDDY, THE MANAGING DIRECTOR OF M/S. AMRC L AND HIS FAMILY MEMBERS HAVE USED SRI SRINIVASA RAO NUKALA ALONG WITH OTHERS TO CHANNELIZE THE UNACCOUNTED MON EY EARNED BY THE ASSESSEE AND HIS FAMILY MEMBERS AND A S SUCH THE CREDITWORTHINESS OF SRI SRINLVASA RAO NUKALA IS NOT PROVED. FURTHER, THE OTHER OBSERVATIONS ARE SUMMARI ZED AS UNDER: ' (A) THERE IS NO WRITTEN AGREEMENT FOR THE SUB-CONTRACT WORK BETWEEN M/S. AMRCL AND M/S. LSPL AND RMDPL. (B) MR. SRINIVASA RAO NUKALA FILED HIS RETURN OF INCOME FOR THE FIRST TIME FOR ASSESSMENT YEAR 2008-09 WHICH INDICATES THAT RETURN OF INCOME WAS FILED TO IMPRES S UPON THE INCOME TAX DEPARTMENT. (C) ALL THE CREDITS INTO THE BANK ACCOUNTS OF M/S LSPL AND RMDPL WERE ONLY FROM M/S AMRCL AND IMMEDIATELY ON DEPOSIT OF THE MONIES RECEIVED, THE SAME WERE WITHD RAWN. (D) MR. SRINIVASA RAO NUKALA IS ONLY A NAME LENDER TO S HRI MAHESH REDDY AND SRI A. GIRISH REDDY AND THEIR FAMI LY MEMBERS AND THE UNACCOUNTED INCOME EARNED BY THEM WERE ROUTED BACK TO THEM THROUGH MR. SRINIVASA RAO NUKALA. (E) MR. SRINIVASA RAO NUKALA HAS NO CREDITWORTHINESS AS HE I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 52 IS ONLY A CONDUIT FOR MR. A. MAHESH REDDY AND HIS F AMILY EMBERS. (III) REGARDING THE AMOUNT OF RS. 1,00,00,000/- RECEIVED FROM SUGUNAMMA, THOUGH IT WAS STATED BY THE ASSESSEE THA T IT WAS ADVANCE RECEIVED FOR PURCHASE OF PROPERTY BUT A S THE TRANSACTION COULD NOT MATERIALIZE, THE SAME WAS RET URNED BACK DURING THE YEAR. EXCEPT STATING THAT, THE ASSE SSEE HAS NOT FURNISHED ANY CONFIRMATION LETTERS IN RESPECT O F THE ABOVE CREDIT OR ANY OTHER DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE ADVANCE. (IV) REGARDING THE AMOUNT OF RS. 20,00,000/- OBTAINED FR OM SMT. K. SUBBA LAKSHMI, THE ASSESSING OFFICER WAS OF THE OPINION THAT THE PRIMARY DETAILS LIKE IDENTITY OF T HE CREDITORS, SOURCES FOR ADVANCING THE DEPOSIT/LOAN, PAN AND ASSESSMENT PARTICULARS ETC. WERE NOT FURNISHED. IT WAS ALSO OBSERVED BY THE ASSESSING OFFICER THAT THOUGH THE CONFIRMATION LETTER WAS SHOWN TO HAVE BEEN SUBMITTE D BY K. SUBBA LAKSHMI, BUT NOT AVAILABLE ON ASSESSMENT RECO RDS AND SMT K. SUBBA LAKSHRNL HAS FAILED TO ATTEND THE OFFICE IN RESPONSE TO THE NOTICE U/S 131 DT. 25.11.2010. ACCO RDINGLY, THE ASSESSING OFFICER HAS TREATED THE LOAN FROM SMT K. SUBBA LAKSHMI, AS UNEXPLAINED' CREDIT. (V) REGARDING THE AMOUNT OF RS. 7 ,00,000/- RECEIVED FR OM SHRI CHAITANYA KUMAR, THE ASSESSEE STATED THAT HE HAD GI VEN ADVANCE EARLIER TOWARDS PURCHASE OF PROPERTY BUT AS THE TRANSACTION WAS NOT GIVEN EFFECT TO, PART PAYMENT O F RS. 7,00,000/- WAS RECEIVED BACK DURING THE YEAR AND ST ATED THAT DETAILED CONFIRMATION LETTER FROM HIM WOULD BE FILED LATER. I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 53 25.5 IN TREATING THE SAID AMOUNTS AS UNEXPLAINED CREDITS , THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT EVEN IF SUCH PAYMENTS ARE MADE THROUGH BANK AND BY WAY OF CHEQUE S, IN VIEW OF SETTLED PROPOSITION OF LAW, THE ASSESSING O FFICER CAN ENQUIRE INTO THE SAME AND IT IS THE ASSESSEE WHO HA S TO SATISFY THE ASSESSING OFFICER ABOUT THE GENUINENESS OF THE SAME AND ON FAILURE TO DO SO, THE PROVISIONS OF SEC. 68 ARE APP LICABLE TO THE ASSESSEE WITH ALL ITS CONSEQUENCES. 25.6 ALTERNATIVELY, THE ASSESSING OFFICER PROPOSED TO TR EAT THE AMOUNT OF RS. 85,00,000/- AS RECEIVED FROM SRI SRIN IVASA RAO NUKALA AS DEEMED DIVIDEND APPLYING THE PROVISIONS O F SECTION 2(22)(E) OF THE LT ACT, 1961, STATING THAT THE MONI ES HAVE BEEN TRANSFERRED FROM M/S AMR CONSTRUCTIONS LTD TO THE F AMILY MEMBERS OF SRI A MAHESH REDDY, SHRI .A.GIRISH REDDY AND OTHERS THROUGH SRI SRINIVASA RAO NUKALA, IN THE GUI SE OF ADVANCES FOR THE CONTRACT AMOUNTS. 25.7 THE ASSESSEE OBJECTED TO THE ABOVE ADDITION ON ACCO UNT OF TREATING THE LOANS/ADVANCES/CREDITS FROM SRI SRINIV ASA RAO NUKALA, SMT K. SUBBA LAKSHMI, SHRI CHAITANYA KUMAR, SMT. SUGUNARNRNA AND M/S. LORD YEN ENTERPRISES AS UNEXPL AINED CREDITS. THE ASSESSEE FURNISHED THE DETAILED SUBMIS SIONS BEFORE THE CIT(A) INDICATING THE FACTS AS WELL AS THE LAW RELATED TO THE ISSUE OF TREATING THE ADVANCES AS UNEXPLAINED CREDI TS U/S 68 OF THE IT ACT, 1961. WHILE FURNISHING THE SUBMISSIONS BEFORE THE CIT(A), IT WAS CONFIRMED BY THE ASSESSEE THAT ALL T HE AMOUNTS OBTAINED/RECEIVED FROM SHRI SRINIVASA RAO NUKALA, A ND SMT K. SUBBA LAKSHMI, WERE BY CHEQUES AND THROUGH PROPER B ANKING CHANNELS AND ARE WELL SUPPORTED BY THE CONFIRMATION LETTERS FURNISHED BY THE SAID CREDITORS. IT IS ALSO SUBMITT ED THAT MR.SRINIVASA RAO NUKALA WAS SUMMONED AND STATEMENT WAS RECORDED FROM HIM DURING THE COURSE OF ASSESSMENT I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 54 PROCEEDINGS, WHERE THE SAID CREDITOR WAS STATED TO HAVE CONFIRMED THE TRANSACTIONS. 25.8 ON APPEAL, THE CIT(A) DELETED THE ADDITIONS IN RESP ECT OF N. SRINIVASA RAO, SMT. SUGUNAMMA AND SMT. K. SUBBA LAKSHMI. HOWEVER, HE CONFIRMED THE ADDITION IN THE CASE OF SRI CHAITANYA KUMAR AND M/S. LORDVEN ENTERPRISES. AGAI NST THIS DELETION OF ADDITIONS N. SRINIVASA RAO, SMT. SUGUNA MMA AND SMT. K. SUBBA LAKSHMI, THE REVENUE IS IN APPEAL BEF ORE US. AGAINST SUSTAINING OF ADDITIONS IN THE CASE OF SRI CHAITANYA KUMAR AND M/S. LORDVEN ENTERPRISES, THE ASSESSEE IS IN APPEAL BEFORE US. 25.9 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. IN OUR OPINION, IN THE CASE OF SRI CHA ITANYA KUMAR AND LORDVEN, THE ASSESSEE FAILED TO ESTABLISH GENUI NENESS OF THE TRANSACTIONS. AS HELD IN THE EARLIER CASE, WE ARE INCLINED TO CONFIRM ORDER OF THE CIT(A) ON THIS ISSUE PLACING R ELIANCE ON THE JUDGEMENT IN THE CASE OF R.B. MITTAL (SUPRA). THIS GROUND IS DISMISSED. 25.10 THE DEPARTMENT IS IN APPEAL IN ITA NO. 1095/HYD/201 2 WITH REGARD TO DELETION OF CREDIT FROM SRI N. SRINI VASA RAO AT RS. 85 LAKHS. AS OBSERVED IN ITA NO. 988/HYD/2012 IN THE CASE OF SMT. LATHA REDDY, WE ARE INCLINED TO CONFIRM THE DE LETION OF ADDITION BY THE CIT(A). 25.11 REGARDING ADVANCE OF RS. 1,00,00,000/- FROM SMT. SUGUNAMMA WHICH WAS TREATED AS UNEXPLAINED CREDIT I N THE HANDS OF THE ASSESSEE, IT HAS BEEN NOTICED THAT THE ASSESSING OFFICER HAS NOT DISCUSSED THE ISSUE IN DETAIL TO BR ING THE FACTS ON RECORD. IN FACT, THE FACTS THAT HAVE BEEN BROUGHT ON RECORD GOT MIXED UP WITH THE AFFAIRS OF SHRI JAYARAMI REDDY, W HICH IS NOT RELEVANT FOR THE YEAR UNDER REFERENCE. IT IS PERTI NENT TO I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 55 REPRODUCE THE OBSERVATIONS OF THE ASSESSING OFFICER IN THIS CONTEXT, WHICH READS AS UNDER: '** IT IS TO STATE THAT IN THE CASE OF THE CREDITOR SMT. SUGUNAMMA, OUT OF RS. 1,50,00,000 SHOWN AS AMOUNT RECEIVED, DURING THE COURSE OF POST SEARCH PROCEEDINGS, IT IS OBSERVED THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCES FOR THE ADVANCES ALLEGED TO HAVE RECEIVED FROM SRI. JAYARAMI REDDY TO THE TUNE OF RS. 50,00,000 AND THE SAME WAS ADMITTED AS UNDISCLOSED INCOME U/S 132(4) OF THE IT ACT. THEREFORE, IT IS APPARENTLY CLEAR THAT THE ABOVE MENTIONED CREDITOR DO NOT HAVE CREDITWORTHINESS TO ADVANCE SUCH HUGE AMOUNTS TO THE ASSESSEE. THEREFORE, AN AMOUNT OF RS. 1,00,00,000 IS ONLY CONSIDERED FOR ADDITION AS UNEXPLAINED CREDIT AS TH E ASSESSEE HAS ALREADY ADMITTED AN AMOUNT OF RS. 50,00,000 AS UNDISCLOSED INCOME. ' 25.12 COMING TO THE FACTS OF THE CASE, SMT. SUGUNAMMA IS PROPRIETRIX OF M/S SUGUNA BUILDERS WHICH WAS SHOWN TO HAVE EXECUTED CERTAIN SUB-CONTRACT WORKS TO M/S AMRCL, T HE FLAGSHIP COMPANY OF THE GROUP. DURING THE YEAR UNDE R REFERENCE, THE CREDITOR SMT. SUGUNAMMA, SHOWN TO HA VE ADVANCED AN AMOUNT OF RS. 1,50,00,000 TO THE ASSESS EE SHRI A. GIRISH REDDY WHICH WAS SHOWN TO HAVE REPAID/ADJUST ED DURING THE SAME YEAR AND AS SUCH NOT APPEARING AS CREDITOR AS ON 31- 03-2008. HOWEVER, THE PURPOSE OF SUCH ADVANCES WAS NOT CLEARLY STATED, EXCEPT INDICATING THAT THE SAME WAS TOWARDS PURCHASE OF LAND, AND NO DETAILS OF SUCH LAND ARE I NDICATED. THE ASSESSEE'S CONTENTION IS THAT THE AMOUNTS ARE ROUTE D/ TRANSFERRED THROUGH BANK ACCOUNTS AND CREDITOR IS A SSESSED TO TAX IN HER OWN RIGHT. THE ACCOUNT EXTRACT OF M/S. SUGUNA BUILDERS FOR THE A.YS. 2007-08, 2008-09 AND 2009-10 INDICATE THAT THE CREDITOR IS FILING RETURNS OF INCOME AND A SSESSED TO TAX IN HER OWN RIGHT. FURTHER, THE PAYMENTS BY M/S AMR CL, IN THE FORM OF SUB-CONTRACTS TO ALL SUCH CONCERNS WERE DIS BELIEVED BY THE ASSESSING OFFICER AND APPEAR TO HAVE BEEN TREAT ED AS INCOME OF THE COMPANY M/S AMRCL. AS OBSERVED IN RESPECT O F CREDIT I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 56 FROM SHRI SRINIVAS NUKALA, THE TREATMENT OF ADVANCE S TO THE TUNE OF RS. 1,00,00,000/- FROM SMT. SUGUNAMMA, AS UNEXPLAINED CREDIT IN THE HANDS OF THE ASSESSEE IS NOT SUSTAINABLE. ACCORDINGLY, DELETION OF ADDITION IS CONFIRMED. 25.13 THUS, ITA NO. 1104/HYD/2012 (ASSESSEE APPEAL) AND ITA NO. 1095/HYD/ 2012 (REVENUE APPEAL) ARE DISMISSED. ITA NO. 1096/HYD/2012 A.Y. 2009-10 BY REVENUE: 26. THE GRIEVANCE OF THE DEPARTMENT IS WITH REGARD TO D ELETION OF ADDITION OF RS. 80 LAKHS MADE U/S. 68 OF THE ACT IN RESPECT OF SRI P. MUDDU KRISHNA REDDY. 26.1 BRIEF FACTS OF THE ISSUE ARE THAT WHILE COMPUTING T HE TAXABLE INCOME OF THE ASSESSEE, THE ASSESSING OFFIC ER HAS TREATED THE AMOUNTS OF LOANS/ADVANCES SHOWN TO HAVE BEEN OBTAINED BY THE ASSESSEE FROM THE FOLLOWING PARTIES , AS UNEXPLAINED CREDITS U/S. 68 OF THE IT ACT, 1961: 1) M/S. LORDVEN ENTERPRISES RS. 90,000 2) SHRI P. MUDDU KRISHNA REDDY RS. 80,00,000 3) M/S. ASHIANA MERCANTILE P. LTD. RS. 21,00,000 ---------------------- TOTAL RS. 1,01,90,000 ============== 26.2 WHILE TREATING THE SAID AMOUNTS AS UNEXPLAINED CRED ITS IN THE HANDS OF THE ASSESSEE, THE ASSESSING OFFICER HA S MADE CERTAIN SPECIFIC REMARKS ON EACH OF THE CREDITOR FO R THE ADVANCE/ LOAN OBTAINED BY THE ASSESSEE DURING THE YEAR UNDER REFERENCE. AS PER THE INFORMATION BROUGHT ON RECORD, THE ASSES SING OFFICER SUMMONED SHRI P. MUDDU KRISHNA REDDY DURING THE COU RSE OF ASSESSMENT PROCEEDINGS AND THE CONCLUSIONS DRAWN RE GARDING THE TRANSACTION WITH THE SAID PARTY WAS BASED ON SU CH STATEMENTS. THE CIT(A) DELETED THE ADDITION OF RS . 80,00,000 IN I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 57 RESPECT OF SRI P. MUDDU KRISHNA REDDY. AGAINST THI S, REVENUE IS IN APPEAL BEFORE US. 26.3 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE OPINION THAT SIMILAR ISSUE CAME FOR CONSIDERATION IN THE CA SE OF SRI A. MAHESH REDDY IN ITA NO. 1110/HYD/2012 WHEREIN WE HA VE FOLLOWED THE EARLIER ORDER OF THE TRIBUNAL IN THE C ASE OF M/S. AMR HOSPITALITY SERVICES PVT. LTD., IN ITA NO. 275/ HYD/2012 DATED 22.2.2013 WHEREIN THE TRIBUNAL DISCUSSED THIS ISSUE IN PARAS 33 AND 34 REPRODUCED ELSEWHERE IN THIS ORDER. RESPECTFULLY FOLLOWING THE ABOVE FINDINGS, WE ARE I NCLINED TO CONFIRM THE DELETION OF ADDITION OF RS. 80 LAKHS. ITA NO. 1096/HYD/2012 IS DISMISSED. 27. IN THE RESULT, SL. NO. ITA NO. & A.Y. BY ASSESSEE / REVENUE RESULT 1. ITA NO. 987/HYD/2012 REVENUE DISMISSED 2. C.O. NO. 118/HYD/2012 BY ASSESSEE PARTLY ALLOWED FOR STATISTICAL PURPOSES 3. ITA NO. 1110/HYD/2012 BY ASSESSEE ALLOWED 4. ITA NO. 1111/HYD/2012 BY ASSESSEE DISMISSED 5. ITA NO. 1112/HYD/2012 BY ASSESSEE PARTLY ALLOWED FOR STATISTICAL PURPOSES 6. ITA NO. 1105/HYD/2012 ASSESSEE DISMISSED 7. ITA NO. 1106/HYD/2012 ASSESSEE PARTLY ALLOWED FOR STATISTICAL PURPOSES 8. ITA NO. 1107/HYD/2012 ASSESSEE ALLOWED 9. ITA NO. 1097/HYD/2012 REVENUE DISMISSED 10. ITA NO. 1098/HYD/2012 REVENUE DISMISSED 11. ITA NO. 1108/HYD/2012 ASSESSEE PARTLY ALLOWED FOR STATISTICAL PURPOSES 12. ITA NO. 1109/HYD/2012 ASSESSEE PARTLY ALLOWED FOR STATISTICAL PURPOSES 13. ITA NO. 988/HYD/2012 REVENUE DISMISSED 14. ITA NO. 989/HYD/2012 REVENUE DISMISSED 15. ITA NO. 1100/HYD/2012 ASSESSEE DISMISSED 16. ITA NO. 1101/HYD/2012 ASSESSEE DISMISSED 17. ITA NO. 1102/HYD/2012 ASSESSEE PARTLY ALLOWED FOR STATISTICAL PURPOSES 18. ITA NO. 1103/HYD/2012 ASSESSEE DISMISSED I.T.A. NO. 987/HYD/2012 & ORS. SRI A. AUDINARAYANA REDDY & ORS. ========================== 58 19. ITA NO. 1104/HYD/201 ASSESSEE DISMISSED 20. ITA NO. 1095/HYD/2012 REVENUE DISMISSED 21. ITA NO. 1096/HYD/2012 REVENUE DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH MAY, 2013. SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 10 TH MAY, 2013 TPRAO COPY FORWARDED TO: 1. THE ASST. CIT, CENTRAL CIRCLE-3, 8 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD-500 004. 2. THE DEPUTY CIT, CENTRAL CIRCLE-3, 8 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD-500 004. 3. MR. A. AUDINARAYANA REDDY, PLOT NO. 530, ROAD NO . 26, JUBILEE HILLS, HYDERABAD. 4. SMT. A. RADHIKA REDDY, G-6/106, 1 ST FL., HANGING GARDENS, 8-2-602/C, ROAD NO. 10, BANJARA HILLS, HYDERABAD 5. SMT. A. LATHA REDDY, PLOT NO. 530, ROAD NO. 26, JUBILEE HILLS, HYDERABAD-34 6. SRI A. GIRISH REDDY, PLOT NO. 530, ROAD NO. 26, JUB ILEE HILLS, HYDERABAD-34. 7. THE CIT(A)-VII, HYDERABAD. 8. THE CIT (CENTRAL), HYDERABAD. 9. THE DR 'B' BENCH, ITAT, HYDERABAD
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