K. Gopi, Hyderabad V. DCIT. Circle -11(1), Hyderabad

ITSSA 29/HYD/2011

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 8651 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-01-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 19-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: S RAMA RAO
• Keywords: Source of fund; Additional evidence; Block assessment
• Section: 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER IT(SS)A NO. 29/HYD/2011 BLOCK PERIOD: 1991-92 TO 2000-01 & 01.04.2000 TO 04 .08.2000 K. GOPI, APPELLANT HYDERABAD (PAN/GIR NO. G-707/CC-4) VS. DY. COMMISSIONER OF INCOME-TAX, RESPONDENT CIRCLE 11(1), HYDERABAD APPELLANT BY : SHRI S. RAMA RAO RESPONDENT BY : SMT. AMISHA S. GUPT DATE OF HEARING : 11/12/2012 DATE OF PRONOUNCEMENT : 24/01/ 2013 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER O F BLOCK ASSESSMENT MADE UNDER SECTION 158BD READ WITH SECTI ON 158BC(C) R.W.S 254 OF THE I.T ACT. 2. THE ASSESSEE IS AN INDIVIDUAL. HE WAS NOT HAVIN G ANY BUSINESS ACTIVITY AND THEREFORE HE HAD NOT FILED AN Y RETURN OF INCOME. THE INCOME-TAX AUTHORITIES CONDUCTED SEARC H AND SEIZURE OPERATIONS UNDER SECTION 132 AT THE PREMISE S OF M/S.SEESHMAHAL ENTERPRISES PVT LTD AND M/S. URVASI BUILDERS ON 04.08.2000. ACCORDING TO THE AUTHORITIES, A COPY OF THE 2 IT(SS)A NO. 29/HYD/2011 K. GOPI AGREEMENT ENTERED INTO BY THE ASSESSEE ALONGWITH SH RI K.HARSHAVARDHAN REDDY WITH SMT SHANTA BAIL FOR PURC HASE OF 4 ACRES AND 8 GUNTAS OF LAND WAS FOUND. THE AGREEMEN T ALSO MENTIONS ABOUT PAYMENT OF RS.74 LAKHS OUT OF WHICH SHRI K.HARSHAVARDHAN REDDY ACCEPTED HAVING PAID RS.10 LA KHS. THEREFORE, THE DEPARTMENT WAS OF THE VIEW THAT THE BALANCE AMOUNT OF RS.64 LAKHS HAS BEEN PAID BY THE ASSESSEE IN ACCORDANCE WITH THE AGREEMENT TO SMT SHANTA BAI AND REQUIRED THE ASSESSEE TO EXPLAIN THE SOURCE FOR THE SAME. 3. THE ASSESSEE SUBMITTED A LIST OF PEOPLE WHO ARE BASICALLY AGRICULTURALISTS, WHO GAVE THE AMOUNT AS ADVANCE TO THE ASSESSEE TO ACQUIRE SOME PROPERTY ON THEIR. AS THES E FARMERS ARE ILLITERATES AND ARE NOT AWARE OF THE BANKING PR OCEDURES. ETC THEY DEPENDED ON THE ASSESSEE FOR SAFE CUSTODY OF T HE AMOUNT AND FOR PROCUREMENT OF THE PROPERTIES AND THEY KEPT THE INCOME DERIVED BY THEM FROM THE AGRICULTURE WITH TH E ASSESSEE. OUT OF THIS AMOUNT THE ASSESSEE HAS PAID SMT SHANTA BAI AND TWO OTHERS AS CONSIDERATION FOR ACQU ISITION OF THE PROPERTY. 4. THE ASSESSEE FILED AFFIDAVITS FROM THE FOUR CRED ITORS AFFIRMING THAT THE LANDS WERE PURCHASED OUT OF THEI R AGRICULTURAL INCOME WITH THE SUPPORTING CERTIFICATE . THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO BRING TH E SAID PERSONS BEFORE HIM. BUT THE ASSESSEE COULD NOT. THE AO REJECTED THE CLAIM OF THE ASSESSEE AND ADDED RS.64 LAKHS AS UNDISCLOSED INCOME ON ACCOUNT OF ADVANCE GIVEN FOR PURCHASE OF THE PROPERTY. 3 IT(SS)A NO. 29/HYD/2011 K. GOPI 5. AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE TH E CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE OBS ERVING AS UNDER:- 5.5. THE FACTS IN THE ASSESSEES CASE ARE NOT DIFFERENT. A CLAIM HAS BEEN MADE THAT THE CREDITORS WERE IN RECEIPT OF AGRICULTURAL INCOME WHICH WAS ALLEGED LY THE SOURCE OF FUNDS ADVANCED TO THE ASSESSEE. THE ONLY EVIDENCE IN SUPPORT OF THE CLAIM OF AGRICULTURAL IN COME IS THE MROS CERTIFICATE. THE CERTIFICATE DOES NOT EST ABLISH THE ACREAGE OF LAND ON WHICH THE VARIOUS CROPS WERE GROWN, THE EXPENSES INCURRED FOR EARNING THE INCOME , THE NATURE OF THOSE EXPENSES, THE NAME AND ADDRESS OF T HE PARTIES TO WHOM THE PROCEEDS WERE SOLD ETC., IN THE ABSENCE OF ANY SPECIFIC INFORMATION, LEAVE ALONE AN Y EVIDENCE, THE ASSESSEES CLAIM CANNOT BE ACCEPTED. 6. ACCORDINGLY THE CIT(A) CONFIRMED THE ADDITION OF RS.64 LAKHS IN THE ASSESSMENT OF THE ASSESSEE. 7. AGGRIEVED THE ASSESSEE HAS FILED AN APPEAL BEFOR E THE TRIBUNAL AND THE ASSESSEE REITERATED THE SAME ARGUM ENTS ADVANCED BY HIM BEFORE THE LOWER AUTHORITIES. THE A SSESSEE HAS ALSO FILED COPIES OF DECREE IN THE ORIGINAL SUI T PASSED BY THE SECOND ADDITIONAL SENIOR CIVIL JUDGE, RR DISTRI CT DATED 21.03.2005 FILED BY SMT SHANTA BAI AD OTHERS AGAINS T THE ASSESSEE AND SHRI K.HARSHAVARDHAN REDDY IN RESPECT OF CANCELLATION OF THE AGREEMENT OF SALE OF THE IMPUGN ED PROPERTY ENTERED INTO ON 30.11.1994. 8. THIS APPEAL IS THE SECOND ROUND. EARLIER APPEAL IN IT(SS) A NO 164/H/03, THE TRIBUNAL SET ASIDE THE ASSESSMEN T TO THE FILE OF THE AO FOR CONSIDERING THE ISSUE AFRESH AND DIRECTING THE 4 IT(SS)A NO. 29/HYD/2011 K. GOPI AO TO CONSIDER THE AFFIDAVIT OF THE LOAN CREDITORS. EVEN IN THE SECOND ROUND OF APPEAL, THE AO HAS STATED THAT THE ASSESSEE DID NOT BRING ANY CREDITORS FOR BEING EXAMINED BY T HE AO. FURTHER, THE AO DISBELIEVED THAT THESE CREDITORS WO ULD HAVE SUFFICIENT SOURCE TO GIVE SUCH HUGE LOANS AND THAT TOO FROM 19990 TO 1995 TO ENABLE THE ASSESSEE TO PURCHASE TH E LAND. 9. THE AO HAS ALSO SUBMITTED THAT EVEN THOUGH THE A FFIDAVITS WERE PREPARED IN 1995 THE SAME WAS NOT FILED IN THE REGULAR RETURN OF INCOME. ALL THE LOANS WERE STATED TO BE OBTAINED WITHOUT INTEREST, CONSIDERING ALL THE EVIDENCE, THE AO ADDED THE ADVANCE GIVE OF RS.64 LAKHS FOR PURCHASE OF THE PROPERTY. 10. ON APPEAL, THE CIT(A) FOUND THAT THE IN THE AFF IDAVIT BY THE FOUR CREDITORS SMT A.SUSHEELA, SHRI A.JANGAIAH, SHRI DULANDLYA, AND SMT. PETAMMA AND SRI KUNWAR SINGH, T HE TRANSACTION WAS TREATED AS LOAN AND THERE IS NO MEN TION THAT IT WAS FOR PURCHASE OF PROPERTY. HENCE THE AFFIDAVITS OF THE CREDITORS ARE IN VARIANCE WITH THE CLAIM OF THE ASS ESSEE. THE ASSESSEE COULD NOT PRODUCE PARTIES FOR EXAMINATION BEFORE THE AO NOR NO ADDITIONAL EVIDENCE WERE PRODUCED TO SUPP ORT THE CREDIT DURING THE ASSESSMENT PROCEEDINGS, OR IN THE COURSE OF APPELLATE PROCEEDINGS OR BEFORE THE ASSESSING OFFIC ER DURING THE REMAND PROCEEDINGS. 11. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT PRODUCED ANY OTHER MATERIAL IN SUPPORT OF HIS CLAIM THAT THE LOANS WERE GIVEN FOR THE PURPOSE OF PROPERTY AND A LSO THE CREDITORS HAVE NOT BEEN PRODUCED BEFORE THE LOWER A UTHORITIES. 5 IT(SS)A NO. 29/HYD/2011 K. GOPI WE FIND THAT THE SELLER HAS FILED THE CASE AGAINST THE ASSESSEE AND IT HAS NOT BEEN PROVED BY THE ASSESSEE THAT HE HAS OBTAINED OWNERSHIP OF THE PROPERTY AND NO DETAILS / PROOF ABOUT THE TRANSFER OF PROPERTY TO THE FOUR CREDITORS, WHI CH ONLY STRENGTHENS THE AOS STAND THAT THE AMOUNT OF RS. 6 4 LAKHS SHOULD BE ADDED AS UNDISCLOSED INCOME OF THE ASSESS EE. 12. FURTHER, IT IS TO BE NOTED THAT IN AN EARLIER O CCASION, THE TRIBUNAL HAD REMITTED THE ISSUE BACK TO THE FILE OF THE AO TO EXAMINE THE DEPONENT IN THE AFFIDAVIT. EVEN IN THE SECOND ROUND OF LITIGATION, THE ASSESSEE IS NOT ABLE TO PR ODUCE THE CREDITORS AND THE ASSESSEE HAS TAKEN ONE OR THE OTH ER PLEA TO AVOID THE PRODUCTION OF CREDITORS. IN THIS CONNECTI ON, IT IS TO BE NOTED THAT THE AFFIDAVIT NEED NOT BE ALWAYS ACCEPTE D AS CORRECT, AS IT IS NEITHER A RULE OF PRUDENCE NOR A RULE OF LAW THAT THE STATEMENTS MADE IN AN AFFIDAVIT WHICH REMA INS UNCONTROVERTED, MUST INVARIABLY BE ACCEPTED AS TRUE AND RELIABLE. ORDINARILY, IN THE ABSENCE OF DENIAL, THE STATEMENTS MAY BE ACCEPTED AS TRUE BUT IF THERE ARE CIRCUMSTAN CES WHICH SUGGEST THAT THE STATEMENTS ON AFFIDAVIT SHOULD NOT BE ACCEPTED AS TRUE, THE ABSENCE OF DENIAL BY THE OTHE R SIDE, WOULD NOT BY ITSELF BE SUFFICIENT TO CLOTHE THE STA TEMENTS ON AFFIDAVIT WITH TRUTHFULNESS AND RELIABILITY. 13. FURTHER, IT IS INCUMBENT UPON THE ASSESSEE TO P ROVE THE IDENTITY OF THE CREDITORS, CAPACITY TO ADVANCE MONE Y AND GENUINENESS OF THE TRANSACTION. UNLESS, THE ASSESS EE DISCHARGES THE BURDEN CAST UPON HIM, IT WILL BE TRE ATED AS 6 IT(SS)A NO. 29/HYD/2011 K. GOPI UNEXPLAINED INCOME OF THE ASSESSEE. IT WAS HELD IN THE CASE OF DHANALAKSHMI STEEL REROLLING MILLS VS. CIT, 228 ITR 780 (AP) THE ASSESSEE HAS TO DISCHARGE THE ABOVE INGREDIENTS . 14. IN THE PRESENT CASE, THE ASSESSEE FAILED TO GIV E EXPLANATION ABOUT THE NATURE AND SOURCE OF THE CRED IT APPEARED IN THE BOOKS OF ACCOUNT AND NO EVIDENCE ON RECORD T O SHOW THAT THE CREDITORS ARE GENUINE. MERE FURNISHING OF AFFIDAVIT AND CONFIRMATION LETTERS FROM THE PARTIES CANNOT ITSEL F PROVE THE GENUINENESS OF THE TRANSACTION AS REQUIRED U/S 68 O F THE IT ACT. BEING SO, SINCE THE ASSESSEE FAILED TO PRODUC E THE CREDITORS BEFORE THE AO, THE ADDITION MADE BY THE A O AND CONFIRMED BY THE CIT(A) IS JUSTIFIED. ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE ASSESSEES APPEAL. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. PRONOUNCED IN THE OPEN COURT ON 24 TH JANUARY, 2013. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAV AN) ACCOUNTANT MEMBER JUDICIAL MEMBE R HYDERABAD, DATED: 24 TH JANUARY, 2013 KV 7 IT(SS)A NO. 29/HYD/2011 K. GOPI COPY TO:- 1) K. GOPI, C/O S. RAMA RAO, ADVOCATE, 3-6-643, SHRIYAS ELEGANCE, FLAT NO. 102, ST. NO. 9, HIMAYATNAGAR, HYDERABAD 500 029. 2) DCIT, CIRCLE 11(1), HYDERABAD. 3) THE CIT-VI, HYDERABAD 4) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. S.NO DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER