DCIT, Anantapur V. Sri Mallikarjuna, Anantapur

ITSSA 15/HYD/2010

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7658 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-06-2011
• Assessment Year: misc
• Appeal Filed On: 25-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V SRINIVAS
• Assessee Lawyers: S RAMA RAO
• Keywords: Search and seizure; Validity of assessment; Block assessment
• Section: 143(3); 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER I.T(SS).A. NO. 15/HYD/2010 (BLOCK PERIOD: A.YS. 1996-97 TO 2001-02 AND BROKEN PERIOD FROM 14.2002 TO 21.2.2003) DY. COMMISSIONER OF INCOME-TAX, CIRCLE-1, ANANTAPUR VS. SHRI A. MALLIKARJUNA ANANTAPUR PAN: AATPY2328Q APPELLANT RESPONDENT APPELLANT BY: SHRI V. SRINIVAS RESPONDENT BY: SHRI S. RAMA RAO DATE OF HEARING: 01.02.2012 DATE OF PRONOUNCEMENT: 30.03.2012 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A), TIRUPATI DATED 23.2.2010 FOR THE B LOCK PERIOD 1996-97 TO 2001-02 AND 1.4.2002 TO 21.2.2003. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) IS NOT CORRECT IN QUASHING THE PROCEEDINGS INITIATED U/S. 158BD STATING THAT THEY ARE BAD IN LAW INSTEAD OF APPRECIATING THE PROCEEDINGS IN THE LIGHT OF THE PROVISIONS OF SECTION 292BB. 2. THE LD. CIT(A) IS NOT CORRECT IN DIRECTING TO DELETE THE ADDITION OF RS. 1,53,60,000 MADE TOWARDS ADVANCES MADE TO M/S. SRS & SSGP. I.T.(SS)A. NO. 15/HYD/2010 SHRI A. MALLIKARJUNA ===================== 2 3. THE LD. CIT(A) IS NOT CORRECT IN DIRECTING TO DELETE THE ADDITION OF RS. 68,50,000 MADE TOWARDS UNEXPLAINED ADVANCE TO SRI E. BADRINATH & OTHERS. 4. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL GROUNDS AT THE TIME OF HEARING. 3. BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM BUSINESS, HOUSE PRO PERTY AND OTHER SOURCES. SUBSEQUENT TO THE SEARCH AND SEIZU RE ACTION U/S. 132 OF THE ACT IN THE PREMISES OF SRI SINGANAMALA RAMESH BABU, MADHURA NAGAR, HYDERABAD ON 21.2.2003 A NOTICE U/S. 158BD WAS ISSUED TO THE ASSESSEE ON 25.7.2007 CALLING FOR THE RETURN OF INCOM E. THE ASSESSING OFFICER HAS ACTED UPON THE SATISFACTORY N OTE RECEIVED FROM ACIT, CENTRAL CIRCLE, TIRUPATI WHERE T HE SEARCHED PERSON HAS BEEN ASSESSED. BASED UPON THE SEIZED MATERIAL AND ALSO THE SWORN DEPOSITIONS RECOR DED FROM THE ASSESSEE THE ASSESSMENT HAS BEEN COMPLETED MAKING THE FOLLOWING DISALLOWANCES: (A) UNEXPLAINED ADVANCES IN THE NAME OF A. MALLIKARJUNA & GROUP (TO M/S. SRS & SRI SAI GANESH PRODUCTIONS) RS. 1,51,60,000 (B) UNEXPLAINED ADVANCE IN THE NAME OF AM & GROUP (TO SRI SAI MOVIES) RS. 67,50,000 (C) UNEXPLAINED ADVANCES AS PER SEIZED AGREEMENT WITH SRI E. BADRINATH & OTHERS. RS. 68,50,000 TOTAL RS. 2,87,60,000 I.T.(SS)A. NO. 15/HYD/2010 SHRI A. MALLIKARJUNA ===================== 3 4. ON APPEAL THE CIT(A) HELD THAT THE INITIATION OF PROCEEDINGS U/S. 158BD OF THE INCOME-TAX ACT, 1961 IS BAD IN LAW. HE ALSO DELETED THE ADDITION RELATING TO THE ADVANCE OF RS. 1,51,60,000 TOWARDS UNEXPLAINED ADVANCES TO M/ S. SRS & SRI SAI GANESH PRODUCTIONS (SSGP). FURTHER HE DELETED THE ADDITION OF RS. 68.50 LAKHS MADE TOWARDS UNEXPLAINED ADVANCE TO SHRI E. BADRINATH AND OTHERS. FURTHER THE CIT(A) ALSO DELETED THE ADDITION MADE TOWARD S ADVANCE TO M/S. SRI SAI MOVIES AT RS. 67.50 LAKHS. AG AINST QUASHING OF ASSESSMENT ORDER BY THE CIT(A) BY HOLDING THAT INITIATION OF PROCEEDINGS U/S. 158BD IS BAD IN LAW, THE REVENUE IS IN APPEAL BEFORE US AND ALSO CHALLENGED THE DELETION OF THESE TWO ADDITIONS. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THIS CASE A SEARCH AND SEIZURE ACTION HAD TAKEN PLACE IN THE CASE OF SHRI S. RAMESH BABU. THEREAFTER THERE WAS ASSESSMENT U/S. 158BD OF THE ACT IN THE CASE OF M/S. SRS AND M/S. SRSP . THE SEARCH IN THE CASE OF SHRI S. RAMESH BABU HAD TAK EN PLACE ON 21.2.2003. THE PROBABLE DATE FOR COMPLETION OF ASSESSMENT WAS 28.2.2005 WHEREAS NOTICE U/S. 158BD W AS ISSUED TO ASSESSEE ON 25.7.2007. THERE WAS A DELAY OF TWO I.T.(SS)A. NO. 15/HYD/2010 SHRI A. MALLIKARJUNA ===================== 4 YEARS AND FIVE MONTHS FROM THE DATE OF COMPLETION OF ASSESSMENT IN THE CASE OF SHRI S. RAMESH BABU WHO WAS SEARCHED. THE LEARNED COUNSEL FOR THE ASSESSEE CONTE NDED THAT THE ISSUE OF NOTICE U/S. 158BD ITSELF IS BAD IN LAW . AS SUCH THERE IS NO QUESTION OF CONSIDERING THE SERVICE OF NOTICE U/S. 158BD OF THE ACT. IN THESE CIRCUMSTANCES , THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PROVISIONS OF SECTION 292BB HAVE NO APPLICATION. 6. WE HAVE GONE THROUGH THE FACTS OF THE CASE. IN THIS CASE THE ACIT CIRCLE-1, ANANTAPUR HAS RECEIVED A LETT ER DATED 20.12.2006 FROM ACIT, CENTRAL CIRCLE, TIRUPATI INFORMING THAT PHOTOCOPIES OF THE MATERIAL RELATING TO S HRI A. MALLIKARJUNA OF THE SEIZED MATERIAL WERE FORWARDE D BY HIS PREDECESSOR ALONG WITH THE SATISFACTORY NOTE SUGGESTI NG TO INITIATE ACTION U/S. 158BD OF THE ACT IN THE CASE OF THE ASSESSEE. LATER VIDE LETTER DATED 17.1.2007 THE ACIT , CIRCLE-1, ANANTAPUR REQUESTED THE ACIT, CENTRAL CIRCLE , TIRUPATI TO FURNISH SIGNED COPY OF SATISFACTION NOTE A ND NECESSARY MATERIAL SO THAT HE CAN TAKE NECESSARY AC TION U/S. 158BD OF THE ACT IN THIS CASE. IN REPLY TO THIS LETTER, THE ACIT, CENTRAL CIRCLE, TIRUPATI VIDE HIS LETTER DATE D 11.7.2007 SUBMITTED AS FOLLOWS: I.T.(SS)A. NO. 15/HYD/2010 SHRI A. MALLIKARJUNA ===================== 5 'BY RPAD OFFICE OF THE ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE, TIRUPATI FILE NO. S-320/CC/TPT DT. 11.07.2007 TO THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-1, ANANTAPUR SIR, SUB: ISSUE OF NOTICE UNDER SECTION 158BD IN THE CASE OF SRI A. MALLIKARJUNA, ANANTAPUR REG. REF: (1) THIS OFFICE LETTER IN GIR NO. S-737 DATED 20.12.2006 (2) YOUR LETTER DATED 16.03.2007 ---- IN THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS UNDER SECTION 158BC IN THE CASE OF SRI SINGANAMALA RAMESH BABU, CHENNAI, CERTAIN MATERIAL/INFORMATION RELATING TO SRI A. MALLIKARJUNA, ANANTAPUR WERE NOTICED IN THE SEIZED BOOKS OF M/S. SRS & SRI SAI GANESH PRODUCTIONS, HYDERABAD. THE XEROX COPIES OF SUCH MATERIAL WAS ALREADY FORWARDED TO YOUR OFFICE. DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS UNDER SECTION 158BD R.W.S. 158BC IN THE CASE OF M/S. SRS & SRI SAI GANESH PRODUCTIONS, HYDERABAD, AFTER EXAMINING SRI A. MALLIKARJUNA, DEDUCTION TO THE EXTENT OF RS. 7,00,000 WAS GIVEN AS BORROWED FUNDS BY THE FIRM M/S. SRS & SRI SAI GANESH PRODUCTIONS, HYDERABAD. THE SWORN STATEMENT RECORDED FROM SRI A. MALLIKARJUNA IS ALSO FORWARDED TO YOUR OFFICE FOR TAKING NECESSARY ACTION. I.T.(SS)A. NO. 15/HYD/2010 SHRI A. MALLIKARJUNA ===================== 6 CONSIDERING THE SEIZED MATERIAL, COPIES OF WHICH ARE FORWARDED TO YOUR OFFICE, NOTICE UNDER SECTION 158BD MAY BE ISSUED. HOWEVER, AS DESIRED BY YOU, A SATISFACTION NOTES IS SIGNED AND FORWARDED HEREWITH. YOUR FAITHFULLY, SD/- (M. DASTAGIRAIAH) ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE, TIRUPATI ENCL.: SATISFACTION NOTES' SRI A. MALLIKARJUNA AM GROUP, 15D, ROAD NO. 16, FILM NAGAR, JUBILEE HILLS, HYDERABAD THOUGH THE ABOVE IS THE ADDRESS AS PER SEIZED MATERIAL, THE ASSESSEE WAS ASSESSED TO TAX IN WARD-1, ANANTAPUR WITH ADDRESS AS 10-27, OPP: OLD BUS STAND, DHARMAVARAM. HE NOW FILED RETURN OF INCOME FOR A.Y. 2004-05 IN WARD-2, ANANTAPUR WITH HIS ADDRESS AS 13-2-693, RAMACHANDRA NAGAR, ANANTAPUR (PAN: ACZPA2283Q). ARI A. MALLIKARJUNA IS A FILM FINANCIER. HE SEEMS TO HEAD A GROUP OF PEOPLE IN FINANCING CINE FILED FOR PRODUCTION OF FILMS. IN THE SEIZED MATERIAL (FROM THE PREMISES C/69, MADHURA NAGAR, HYDERABAD SEARCHED ON 21.2.2003 IN THE CASE OF SRI SINGANAMALA RAMESH BABU) MARKED AS A/SRB/31 & A/SRB 44, AM &GROUP FINANCED RS. 1,53,60,000 TO A FIRM BY NAME SRS & SRI SAI GANESH PRODUCTIONS WHICH FIRM PRODUCED THE MOVIE 'MAA ANNAYYA' & 'RAA'. OUT OF RS. 1,53,60,000/-, RS. 67,92,000 WAS THROUGH CHEQUE AND THE BALANCE OF RS. 85,68,000/- WAS IN CASH, THE TOTAL ADVANCE BEING RS. 1,53,60,000/- FROM A. MALLIKARJUNA & GROUP. PAGE NO. 136. SIMILARLY, THE AM GROUP ADVANCED/FINANCED RS. 67,50,000 TO ANOTHER I.T.(SS)A. NO. 15/HYD/2010 SHRI A. MALLIKARJUNA ===================== 7 FIRM BY NAME M/S. SRI SAI MOVIES AS PER THE SEIZED MATERIAL MARKED AA/SRB/1 (PAGE 148). AS PER THE SEIZED MATERIAL A/SRB/45 P. NO. ITO 4, IS A COPY OF AGREEMENT BETWEEN E. BADRINATH; Y.V. CHOWDARY, HYDERABAD AND SRI A. MALLIKARJUNA, SUNKU RAMESH BABU, CHENNAI FOR DISTRIBUTION RIGHTS OF THE FILM 'NAA HRUDAYAMLO NIDURINCHE CHELI' FOR ANDHRA, CEDED & NIZAM CIRCUIT FOR A CONSOLIDATED CONSIDERATION OF RS. 68,50,000/-. IN VIEW OF THE SEIZED MATERIAL IN THE OTHER CASES OF (1) SRS & SRI SAI GANESH PRODUCTIONS AND (2) SRI SAI MOVIES DISCLOSING THE TRANSACTIONS OF THE ABOVE PERSON (AND HIS GROUP), I AM SATISFIED THAT THIS IS A FIT CASE FOR ISSUE OF NOTICE U/S. 158BD T O BRING TO TAX THE UNDISCLOSED INCOME FROM THE TRANSACTIONS OF THE ASSESSEE RELATING TO THIS FILM FINANCING. SD/- (M. DASTAGIRAIAH) ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE, TIRUPATI' 7. AS SEEN FROM THE ABOVE, SATISFACTION WAS RECORDED U/S. 158BD BY ACIT, CENTRAL CIRCLE, TIRUPATI. AS PER PROVISIONS OF SECTION 158BD OF THE ACT, WHERE ASSESSIN G OFFICER IS SATISFIED THAT ANY UNDISCLOSED INCOME BELON GS TO ANY PERSONS, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS WERE REQUISITIONED UNDER SECTION 132A, THEN, THE BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITI ONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING I.T.(SS)A. NO. 15/HYD/2010 SHRI A. MALLIKARJUNA ===================== 8 JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST SUCH OTHER PERSON AND T HE PROVISIONS OF THIS CHAPTER SHALL APPLY ACCORDINGLY. 8. THE CONDITION PRECEDENT FOR INVOKING A BLOCK ASSESSMENT IS THAT A SEARCH HAS BEEN CONDUCTED UNDER SECTION 132, OR DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED U/S. 132A. THE SAID PROVISIONS SHOULD APPLY TO THE CASE OF ANY PERSON IN RESPECT OF WHOM SEARCH HAS BEEN CARRIED OUT UNDER SECTION 132A OR DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED U/S. 132A. SECTION 15 8BD, HOWEVER, PROVIDES FOR TAKING RECOURSE TO A BLOCK ASSESSMENT IN TERMS OF SECTION 158BC IN RESPECT OF ANY OTHER PERSON, THE CONDITIONS PRECEDENT WHEREFORE ARE: I. SATISFACTION MUST BE RECORDED BY THE ASSESSING OFFICER THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132A OF THE ACT, II. THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAD BEEN HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON, AND (III) THE ASSESSING OFFICER HAS PROCEEDED UNDER SECTION 158BC AGAINST SUCH OTHER PERSON. 9. THE CONDITIONS PRECEDENT FOR INVOKING THE PROVISIONS OF SECTION 158BD THUS, ARE REQUIRED TO BE SATISFIED BE FORE I.T.(SS)A. NO. 15/HYD/2010 SHRI A. MALLIKARJUNA ===================== 9 THE PROVISIONS OF THE SAID CHAPTER ARE APPLIED IN REL ATION TO ANY PERSON OTHER THAN THE PERSON WHOSE PREMISES HAD BEEN SEARCHED OR WHOSE DOCUMENTS AND OTHER ASSETS HAD BEEN REQUISITIONED UNDER SECTION 132A OF THE ACT. 10. NOW THE ONLY QUESTION THAT ARISES FOR CONSIDERATION IS AS TO WHETHER NOTICE DATED 25.7.2007 SATISFY THE REQUIREMENT OF SECTION 158BD OF THE ACT. IT IS AN ADMI TTED FACT THAT IN THIS CASE NOTICE HAS BEEN ISSUED TO THE ASSE SSEE BY THE ACIT, CIRCLE-1, ANANTAPUR U/S. 158BD OF THE AC T ON 25.7.2007 REQUIRING THE ASSESSEE TO FILE THE RETURN OF INCOME FOR A.YS. 1997-98 TO 2002-03 AND FOR THE BROK EN PERIOD 1.4.2002 TO 21.2.2003. 11. AS EVIDENCED FROM THE RECORD, THE SATISFACTION IN THIS CASE WAS RECORDED BY ACIT, CENTRAL CIRCLE, TIRUPATI A ND THE SAME WAS FORWARDED TO THE ACIT, CIRCLE-1, ANANTAPUR VI DE HIS LETTER DATED 11.7.2007. AS PER THE PROVISIONS OF SECTION 158BD OF THE ACT ANY DOCUMENTS AND OTHER ASSETS REQUISITIONED DURING THE SEARCH ACTION HAVE TO BE HANDE D OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE ASSESSEE AND THERE SHOULD BE RECORDING OF SATISFACTION BEFORE ISSUING THE NOTICE AND THEREAFTER ASSESSMENT I S TO BE I.T.(SS)A. NO. 15/HYD/2010 SHRI A. MALLIKARJUNA ===================== 10 COMPLETED. IN THE PRESENT CASE THERE IS NO EVIDENCE REGARDING RECORDING OF SATISFACTION BY THE ASSESSING OFFICER CONCERNED BEFORE ISSUING THE NOTICE U/S. 158BD OF THE ACT. BEING SO, WE CANNOT HOLD THAT ASSESSMENT OF BLOCK PERIO D IS VALID. THIS VIEW OF OURS IS FORTIFIED BY THE JUD GEMENT OF SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS. AC IT (289 ITR 341) WHEREIN IT WAS HELD THAT BEFORE THE PROVISIONS OF SECTION 158BD OF THE INCOME-TAX ACT, 196 1, ARE INVOKED AGAINST A PERSON OTHER THAN THE PERSON WHO SE PREMISES HAVE BEEN SEARCHED UNDER SECTION 132 OR DOCUMENTS AND OTHER ASSETS HAVE BEEN REQUISITIONED UN DER SECTION 132A, THE CONDITIONS PRECEDENT HAVE TO BE SATISF IED. ACCORDINGLY, WHERE THE PREMISES OF A DIRECTOR OF A CO MPANY AND HIS WIFE WERE SEARCHED UNDER SECTION 132 OF THE INCOME-TAX ACT, 1961, AND A BLOCK ASSESSMENT HAD TO BE DONE IN RELATION TO THE COMPANY, THE ASSESSING OFFICER HAD TO (I) RECORD HIS SATISFACTION THAT ANY UNDISCLOSED INCO ME BELONGED TO THE COMPANY, AND (II) HAND OVER THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS AND ASSETS SEIZED TO THE ASSESSING OFFICER HAVING JURISDICTION AGAINST THE COMP ANY. AS THE ASSESSING OFFICER HAS NOT RECORDED HIS SATISFAC TION, WHICH IS MANDATORY; NOR HAS HE TRANSFERRED THE CASE TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE MATTER , THE I.T.(SS)A. NO. 15/HYD/2010 SHRI A. MALLIKARJUNA ===================== 11 ORDER OF THE ASSESSING OFFICER CANNOT BE SUSTAINED. IN VIEW OF THE ABOVE DISCUSSION, THE FRAMING OF ASSESSME NT U/S. 158BD R.W.S. 143(3) IN THE PRESENT CASE IS BAD IN LAW. 12. FURTHER EVEN OTHERWISE, THERE WAS INORDINATE DELAY IN ISSUING NOTICE U/S. 158BD BY THE ASSESSING OFFICER. BEING SO, AS HELD BY THE SPECIAL BENCH IN THE CASE OF MANOJ AGARWAL VS. DCIT, 113 ITD 377 (SB) THERE WAS INORDIN ATE DELAY IN ISSUING OF NOTICE U/S. 158BD, THE ASSESSMENT IS BAD IN LAW. IN THIS CASE THE BLOCK ASSESSMENT OUGHT TO HAVE BEEN COMPLETED BEFORE 28.2.2005 AS THE VALID S EARCH IN THE CASE OF SRI RAMESH BABU HAS TAKEN PLACE ON 21.02.2003 AND THE NOTICE U/S. 158BD WAS ISSUED ON 25.2.2007 AFTER A DELAY OF 2 YEARS AND 5 MONTHS AND TH E ISSUE OF NOTICE IS BEYOND TIME LIMIT PRESCRIBED TO COMP LETE THE BLOCK ASSESSMENT MAKES THE ASSESSMENT INVALID BEIN G IT IS NOT CURABLE. 13. BEFORE US THE LEARNED DR HAS RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S. NAVAYUGA SPATIAL TECHNOLOGIES PVT. LTD. VS. DCIT IN I.T.A. NO. 1557/HYD/2010 DATED 26.12.2011 WHEREIN THE TRIBUNAL HELD THAT AFTER INSERTION OF SECTION 292BB W.E.F. 1 ST APRIL, 2008, WHEN THE ASSESSEE PARTICIPATED IN THE PROCEEDINGS , I.T.(SS)A. NO. 15/HYD/2010 SHRI A. MALLIKARJUNA ===================== 12 CANNOT SUSTAIN THE VALIDITY OF THE ASSESSMENT. WE HAVE GONE THROUGH THIS CASE LAW. NOW THE QUESTION BEFORE US IS NOT THE QUESTION OF VALIDITY OF ASSESSMENT OR SERVICE OF NOTICE. THE QUESTION BEFORE US IS ISSUE OF NOTICE U/ S. 158BD WHEREIN WE HAVE FOLLOWED THE JUDGEMENT OF SUPREME COURT IN THE CASE OF MANISH MAHESHWARI (SUPRA ). IN VIEW OF THIS FACT, WE DECLINE TO ENTERTAIN THE VARIO US JUDGEMENTS RELIED ON BY THE DR IN SUPPORT OF VALIDITY OF ASSESSMENT. 14. COMING TO THE ADDITION TOWARDS ADVANCES GIVEN TO SRS & SRSP AT RS. 1,51,60,000 AND ADDITION TOWARDS ADVANCE TO SHRI BADRINATH OF RS. 68.50 LAKHS, AFTER CONSIDERING MATERIAL PLACED ON RECORD FROM BOTH THE S IDES AND ALSO THE ORDERS OF THE CIT(A)-1, HYDERABAD IN THE CASE OF M/S. SRS AND SSGP, IT IS NOTICED THAT THE SAID AMOUNT OF RS. 1,51,60,000 HAS BEEN ADDED IN THE HANDS OF THE LATTER FIRM AND THE SAME HAS BEEN CONFIRMED BY THE CIT (A). IT IS ALSO NOTEWORTHY TO MENTION THAT AS PER THE SEIZED DOCUMENT NO. A/SRB/36 & 44, THE AOS IN BOTH THE CASES HAVE FAILED TO ASCERTAIN WHAT IS THE CONSTITUTION OF 'AM & GROUP' NOR TRACED THE PEOPLE WHOSE NAMES WERE REFLECTED ON THE SAID SEIZED DOCUMENT. HENCE, IT WOULD BE UNFA IR TO I.T.(SS)A. NO. 15/HYD/2010 SHRI A. MALLIKARJUNA ===================== 13 TAX THE ENTIRE AMOUNT IN THE HANDS OF SRI A. MALLIKARJUN A ESPECIALLY SINCE THE SAME HAS BEEN ADDED AND CONFIRM ED IN THE HANDS OF M/S. SRS & SSGP. THE ADDITION IS BASED ON UNSIGNED DOCUMENT WHICH IS A LOSE PAPER AND THAT ITSEL F CANNOT BE CONSIDERED AS A VALID DOCUMENT TO SUSTAIN SUC H AN ADDITION AND AN UNSUBSTANTIATED LOOSE PAPER CANNOT BE A BASIS FOR ADDITION. IN OUR OPINION, THE DELETION O F ADDITION IS BY THE CIT(A) IS JUSTIFIED. FURTHER, REGA RDING THE DELETION OF ADDITION OF RS. 68.50 LAKHS, THE ADDITION I S BASED ON UNSIGNED SEIZED DOCUMENT WHEREIN SHRI E. BADRINATH S/O. SHRI E.V. RAO AND SHRI Y.V.J. CHOWDHA RY S/O. SHRI RAM MURTHY BOTH RESIDENTS OF HYDERABAD CONSTITUTED PARTIES OF THE FIRST PART AND SHRI A. MALLIKARJUNA S/O. SHRI T. PRABHAKARA RAO, SHRI S. R AMESH BABU AND SHRI SATYA RAMA MURTHY CONSTITUTED PARTIES OF SECOND PART. THE ASSESSING OFFICER FOUND THAT AS PE R CLAUSE 3(A) OF THIS AGREEMENT, SHRI A. MALLIKARJUNA A ND THREE OTHERS CONSTITUTING THE SECOND PARTY HAS FINANCED RS. 68.50 LAKHS TO SHRI VENKATARAMANA CREATIONS WHICH IS TO BE ADJUSTED BY TRANSFERRING THE RIGHTS OVER THEIR FILM NAA HRUDAYAMLO NIDURINCHE CHELI. THERE WAS NO SUPPO RTING DOCUMENT SUPPORTING THE ADDITION. THE ADDITION IS BAS ED ONLY AN UNSIGNED DOCUMENT WHICH IS A DUMB DOCUMENT I.T.(SS)A. NO. 15/HYD/2010 SHRI A. MALLIKARJUNA ===================== 14 AND IT CANNOT BE SUSTAINED. ACCORDINGLY, DELETION OF ADDITION BY THE CIT(A) IS JUSTIFIED. THE ORDER OF THE CIT(A) IS CONFIRMED ON THIS ISSUE. 15. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MARCH, 2012. SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 30 TH MARCH, 2012 COPY FORWARDED TO: 1. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, AAYAKAR BHAVAN, ANANTAPUR. 2. SHRI A. SRINIVASULU, D. NO. 13-2-693, R.C. NAGAR , ANANTAPUR. 3. THE CIT(A), TIRUPATI. 4. THE CIT, TIRUPATI CHARGE, TIRUPATI. 5. THE DR A BENCH, ITAT, HYDERABAD TPRAO