THE ACIT, Circle-1, KAKINADA., Kakinada V. Sri Kanikella Rajkumar, Kakinada

ITSSA 4/VIZ/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9220 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 02-05-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-04-2013
• Assessment Year: misc
• Appeal Filed On: 21-09-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: TH L PETER
• Keywords: Gift; Search and seizure; Block assessment
• Section: 132

Judgement Text

IT(SS)A NO.04/V/2012 K. RAJKUMAR, KAKINADA PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI D MANMOHAN, VICE PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER IT(SS)A NO.04/VIZAG/2012 ASSESSMENT YEARS: 1989-90 TO 1999 ACIT CIRCLE-1 KAKINADA K. RAJKUMAR KAKINADA (APPELLANT) VS. (RESPONDENT) PAN NO: AGTPK 2592E APPELLANT BY: SHRI TH.L. PETER, CIT(DR) RESPONDENT BY: SHRI G.V.N. HARI, ADVOCATE DATE OF HEARING: 29.04.2013 DATE OF PRONOUNCEMENT: 02.05.2013 ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 29-06- 2012 PASSED BY LEARNED CIT(A), VISAKHAPTANAM AND IT RELATES TO THE BLOCK PERIOD ENDING ON 29-01-1999. 2. THE REVENUE IS ASSAILING THE DECISION OF LEARNED CIT(A) IN DELETING THE FOLLOWING AMOUNTS ASSESSED BY THE ASSESSING OFF ICER:- (A) BANK DEPOSITS CLAIMED TO HAVE BEEN MADE OUT O F A SOCIETYS FUNDS. (B) BANK DEPOSIT MADE ON 15.12.1995 RS.45,000/ -. (C) GIFT RECEIPTS RS.1,40,000/-. (D) INVESTMENTS FOUND IN THE NAME OF SRI KARUNAN IDHI. (E) CASH SEIZED BY THE DEPARTMENT RS.3,51,050/ -. 3. THE FACTS RELATING TO THE CASE ARE STATED IN BRIEF. THE ASSESSEE HEREIN IS ONE OF THE COMMITTEE MEMBERS OF A SOCIETY NAMED M/S ST. MARYS COLLEGE OF EDUCATION LOCATED AT KAKINADA (HEREINAFTER SOCI ETY). A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT IN THE HANDS IT(SS)A NO.04/V/2012 K. RAJKUMAR, KAKINADA PAGE 2 OF 9 OF THE ASSESSEE ON 29-01-1999 AND CONSEQUENT THERET O THE BLOCK ASSESSMENT WAS COMPLETED IN HIS HANDS. WHEN THE MA TTER REACHED THE STAGE OF THE ITAT, THE TRIBUNAL SET ASIDE THE BLOCK ASSESSMENT ORDER FOR TECHNICAL REASONS AND DIRECTED THE ASSESSING OFFICE R TO REFRAME THE ASSESSMENT DE NOVO. ACCORDINGLY, THE ASSESSING OFF ICER COMPLETED THE ASSESSMENT BY DETERMINING THE UNDISCLOSED INCOME AT RS.14,25,947/-. THE ASSESSEE CHALLENGED THE BLOCK ASSESSMENT ORDER BEFO RE LEARNED CIT(A) AND GOT PARTIAL RELIEF. AGGRIEVED BY THE ORDER OF LEAR NED CIT(A), THE REVENUE HAS FILED APPEAL BEFORE US ON THE ISSUES DISCUSSED IN THE PRECEDING PARAGRAPH. 4. THE FIRST ISSUE RELATES TO THE ASSESSMENT O F FOLLOWING FIXED DEPOSITS FOUND IN THE NAME OF THE ASSESSEE. BEFORE THE ASSESSING OFFICER, THE ASSESSEE CLAIMED THAT THESE DEPOSITS BELONG TO SOCIETY, THOUGH THE DEPOSITS STAND IN HIS NAME. IT WAS FURTHER SUBMITTED THAT THESE DEPOSITS HAVE ALSO BEEN DULY R EFLECTED IN THE ACCOUNTS OF THE SOCIETY. HOWEVER, THE ASSESSING OFFICER DID NOT AGREE WITH THE SAID EXPLANATIONS, AS HE TOOK THE VIEW THAT THERE WAS NO NEED FOR THE SOCIETY TO KEEP ITS FUNDS IN THE NAME OF THE ASSESSEE AND ACCO RDINGLY ASSESSED THEM IN THE HANDS OF THE ASSESSEE. THE LEARNED CIT(A), ON VERIFICATION OF THE FINANCIAL STATEMENTS OF THE SOCIETY, FOUND THAT THE SOCIETY HAS ACCOUNTED FOR THESE DEPOSITS IN ITS ACCOUNTS AND FURTHER IT WAS S PECIFICALLY RECORDED IN THE ACCOUNTS THAT THESE DEPOSITS STAND IN THE NAME OF T HE ASSESSEE. THE LEARNED CIT(A) FELT THAT THE SAID ACTION OF THE SOC IETY MAY NOT BE PROPER, SL. NO. NAME OF THE BANK DATE OF DEPOSIT AMOUNT DEPOSITED 1. FDR IN SBI, KAKINADA 17.03.98 36,294/- 2. FDR IN SBI, KAKINADA 17.03.98 11,500/- 3. FDR IN ANDHRA BANK, KAKINADA 03.03.98 55,000/- 4. TDR IN CORPORATION BANK, TIMMAPURAM 27.09.97 56,579/- 5. TDR IN CORPORATION BANK, TIMMAPURAM 23.09.97 50,000/- IT(SS)A NO.04/V/2012 K. RAJKUMAR, KAKINADA PAGE 3 OF 9 BUT IT IS NOT UNCOMMON FOR THE SOCIETIES TO KEEP TH E DEPOSITS IN THE NAME OF THE MANAGING COMMITTEE MEMBERS. ACCORDINGLY, THE L EARNED CIT(A) DELETED THE ADDITION RELATING TO THE ABOVE SAID DEP OSITS. 5. THE LEARNED D.R SUBMITTED THAT THERE IS NO N EED FOR THE SOCIETY TO KEEP ITS FUNDS IN THE NAME OF THE ASSESSEE AND HENC E THE LEARNED CIT(A) WAS NOT JUSTIFIED IN ACCEPTING THE EXPLANATIONS OF THE ASSESSEE. ON THE CONTRARY, THE LEARNED A.R SUBMITTED THAT THE SOCIET Y HAS ACCOUNTED FOR THESE DEPOSITS IN ITS BOOKS OF ACCOUNT AND THE LEAR NED CIT(A) HAS DELETED THE ADDITION AFTER CARRYING OUT DUE VERIFICATION OF THE FINANCIAL STATEMENTS OF THE SOCIETY. HE FURTHER SUBMITTED THAT ASSESSING OF FICER HAS PASSED THE ASSESSMENT ORDER IN THE HANDS OF THE SOCIETY ON 20. 11.2012 AND HE HAS ASSESSED THESE DEPOSITS IN THE HANDS OF THE SOCIETY ALSO BY ACCEPTING THE CLAIM OF THE ASSESSEE. ACCORDINGLY HE SUBMITTED TH AT THE FACT THAT THESE DEPOSITS DO NOT BELONG TO THE ASSESSEE HAS SINCE BE EN ESTABLISHED STRONGLY AND ACCORDINGLY CONTENDED THAT THE LEARNED CIT(A) W AS JUSTIFIED IN DELETING THE ADDITION RELATING TO THE DEPOSITS LISTED ABOVE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISSUE. THE UNDISPUTED FACT REMAINS THAT THESE DEPOSITS STAND IN THE NAME OF THE ASSESSEE. IT IS ALSO NOT DENIED THAT THE SOCIETY HAS ACCOUNTED FOR THESE DEPOSITS IN ITS BOOKS OF ACCOUNTS, MEANING THEREBY, THE SOURCES FOR MAKING THESE DEPOSITS HAVE COME FROM THE BOOKS OF THE SOCIETY. THUS, THE SOURCES FOR MAKING THESE DEPOSITS STAND ESTABLISHED IN THE HANDS OF TH E ASSESSEE, EVEN IF FOR A MOMENT, IT IS HELD THAT THESE DEPOSITS BELONG TO TH E ASSESSEE. HOWEVER, THE LEARNED CIT(A) HAS GIVEN A CLEAR FINDING THAT T HE SOCIETY HAS ACCOUNTED FOR THESE DEPOSITS IN ITS BOOKS OF ACCOUNT. FURTHE R, IT WAS ALSO SHOWN TO US THAT THESE DEPOSITS HAVE ALSO BEEN ASSESSED IN THE HANDS OF THE SOCIETY. WE NOTICE THAT THE EXPLANATION OF THE ASSESSEE, FRO M THE VERY BEGINNING, WAS THAT THESE DEPOSITS BELONG TO THE SOCIETY AND T HE SAID EXPLANATION STANDS VINDICATED BY THE ASSESSING OFFICER BY ASSES SING THESE DEPOSITS IN THE HANDS OF THE SOCIETY. UNDER THESE SET OF FACTS, IN OUR VIEW, THE LEARNED IT(SS)A NO.04/V/2012 K. RAJKUMAR, KAKINADA PAGE 4 OF 9 CIT(A) WAS JUSTIFIED IN DELETING THE ASSESSMENT OF THESE DEPOSITS IN THE HANDS OF THE ASSESSEE. 7. THE NEXT ISSUE RELATES TO THE ASSESSMENT OF BANK DEPOSIT OF RS.45,000/-. DURING THE COURSE OF SEARCH PROCEEDIN GS, THE REVENUE UNEARTHED A COPY OF BANK CREDIT ADVICE RELATING TO A DEPOSIT OF RS.45,000/-. THE DATE OF DEPOSIT OF THE SAME WAS TAKEN AS 15.12. 1995. THE ASSESSEE EXPLAINED THAT THE ABOVE SAID DEPOSIT WAS MADE OUT OF THE FUNDS BELONGING TO THE SOCIETY. IT WAS FURTHER STATED THAT, UPON I TS MATURITY AFTER 3 YEARS, THE PROCEEDS WERE REINVESTED IN ANOTHER DEPOSIT OF RS.55,000/- MADE ON 3.3.98 (ITEM NO.3 IN THE TABLE EXTRACTED ABOVE). T HE ASSESSING OFFICER NOTICED THAT THE TIME GAP BETWEEN 15.12.1995 AND 3. 3.1998 WERE LESS THAN 3 YEARS. HE FURTHER OPINED THAT THERE IS NO NEED F OR THE SOCIETY TO MAKE THE DEPOSITS IN THE NAME OF ASSESSEE. ACCORDINGLY, HE ASSESSED THE DEPOSIT OF RS.45,000/- IN THE HANDS OF THE ASSESSEE. THE LEAR NED CIT(A) NOTICED THAT THE DEPARTMENT DID NOT FOUND ANY DEPOSIT CORRESPOND ING TO THE CREDIT ADVICE AND ACCORDINGLY ACCEPTED THE EXPLANATION OF THE ASSESSEE THAT THE SAID DEPOSIT OF RS.45,000/- WAS ENCASHED AND RE-DEP OSITED AS ANOTHER DEPOSIT. ACCORDINGLY, HE DIRECTED THE A.O. TO DELET E THE ADDITION OF RS.45,000/-. 8. THE LD. D.R. SUBMITTED THAT THE ASSESSEE HAS GIV EN ORAL EXPLANATIONS WITH REGARD TO THE DEPOSIT OF RS.45,000/- AND HE CO ULD NOT FURNISH ANY MATERIAL TO SUBSTANTIATE THE AVAILABILITY OF ANY SO URCE FOR MAKING THE ABOVE SAID DEPOSIT. FURTHER, THE CLAIM OF THE ASSESSEE T HAT THE MATURITY PROCEEDS OF THE IMPUGNED DEPOSIT WAS UTILIZED FOR MAKING ANO THER DEPOSIT OF RS.55,000/- IS ALSO NOT CORRECT AS THE PERIOD OF 3 YEARS DID NOT EXPIRE ON THE DATE OF MAKING OF THE DEPOSIT OF RS.55,000/-. 9. THE LEARNED. A.R., HOWEVER, SUBMITTED THAT THE I MPUGNED DEPOSIT OF RS.45,000/- WAS MADE IN THE NAME OF THE ASSESSEE B Y THE SOCIETY AND THIS FACT WAS MENTIONED BY THE ASSESSEE BEFORE THE ASSES SING OFFICER. THE IT(SS)A NO.04/V/2012 K. RAJKUMAR, KAKINADA PAGE 5 OF 9 LEARNED A.R. FURTHER SUBMITTED THAT THE ASSESSING O FFICER HAS ASSESSED THE VERY SAME AMOUNT OF RS.45,000/- IN THE HANDS OF THE SOCIETY ALSO. ACCORDINGLY, HE SUBMITTED THAT THE ASSESSING OFFICE R WAS NOT CORRECT IN MAKING THE ADDITION OF RS.45,000/- IN THE HANDS OF THE ASSESSEE. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFUL LY PERUSED THE RECORD. APPARENTLY THERE IS CONTRADICTION IN THE E XPLANATIONS GIVEN BY THE ASSESSEE WITH REGARD TO THE ABOVE SAID AMOUNT OF RS .45,000/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS RELATING TO THE AS SESSEE HEREIN, IT WAS CLAIMED THAT THE DEPOSIT OF RS.45,000/- WAS MADE ON 15.12.1995 AND THE MATURITY PROCEEDS THEREOF WAS UTILIZED TO MAKE ANOT HER DEPOSIT OF RS.55,000/- ON 3.3.1998. HOWEVER, DURING THE COURS E OF ASSESSMENT PROCEEDINGS RELATING TO THE SOCIETY, IT WAS STATED THAT A DEPOSIT WAS MADE ON 15.12.1995 AND MATURITY PROCEEDS THEREOF WAS UTI LIZED FOR MAKING DEPOSIT OF RS.45,000/- ON 15.12.1998. THUS, IT IS NOT CLEAR AS TO WHETHER THE DEPOSIT OF RS.45,000/- WAS MADE ON 15.12.1995 O R 15.12.1998. WE HAVE ALREADY NOTICED THAT THE LEARNED. CIT(A) HAS G IVEN A FINDING THAT THERE WAS NO FIXED DEPOSIT CORRESPONDING TO THE CREDIT AD VICE FOUND DURING THE COURSE OF SEARCH. HOWEVER, THE SAID FINDING IS IN CONTRADICTION WITH THE EXPLANATION GIVEN BY THE ASSESSEE, I.E., THE ASSESS EE HAS OFFERED CONTRADICTORY EXPLANATIONS ABOUT THE DEPOSIT OF RS. 45,000/-, WHICH MEANS THAT THE ASSESSEE IS ACCEPTING THE AVAILABILITY OF A DEPOSIT OF RS.45,000/-. UNDER THIS SITUATION, THE QUESTION THAT ARISES IS W HETHER THE DEPOSIT OF RS.45,000/- BELONGS TO THE ASSESSEE OR TO THE SOCIE TY. UNLIKE OTHER DEPOSITS LISTED OUT IN THE TABLE EXTRACTED (SUPRA), IT IS NO T CLEAR AS TO WHETHER THE ABOVE SAID DEPOSIT OF RS.45,000/- WAS ACCOUNTED FOR IN THE BOOKS OF THE SOCIETY OR NOT. WE HAVE ALREADY NOTICED THAT THE A SSESSING OFFICER HAS ASSESSED THE VERY SAME AMOUNT IN THE HANDS OF THE S OCIETY ALSO. THERE CANNOT BE ANY DISPUTE THAT THE VERY SAME AMOUNT CAN NOT BE ASSESSED IN THE HANDS OF TWO PERSONS. THE ASSESSMENT THEREOF H AS TO BE MADE IN THE HANDS OF RIGHT PERSON ONLY. UNDER THESE CIRCUMSTAN CES, IN OUR VIEW, THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER, AS THE IT(SS)A NO.04/V/2012 K. RAJKUMAR, KAKINADA PAGE 6 OF 9 FACTS RELATING TO THE OWNERSHIP OF THE DEPOSIT HAVE NOT BEEN PROPERLY BROUGHT OUT. ACCORDINGLY, WE SET ASIDE THE ORDER O F LEARNED. CIT(A) ON THIS ISSUE AND RESTORE THIS MATTER TO THE FILE OF THE AS SESSING OFFICER WITH A DIRECTION TO EXAMINE IT AFRESH AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. 11. THE NEXT ISSUE RELATES TO THE GIFT RECEIPT OF R S.1,40,000/-. ON VERIFICATION OF MATERIAL FOUND DURING THE SEARCH OP ERATION, SEVERAL INVESTMENTS MADE IN THE NAME OF THE ASSESSEE AND AL SO SOME OTHER PERSONS TO THE TUNE OF RS.4,47,852/- WERE FOUND. W HILE EXPLAINING THE SOURCES THEREOF, THE ASSESSEE CLAIMED THAT HE HAS R ECEIVED A GIFT OF RS.1,40,000/- FROM HIS FATHER-IN-LAW DURING THE FIN ANCIAL YEAR 1998-99. SINCE THE FATHER-IN-LAW OF THE ASSESSEE HAD EXPIRED BY THE TIME ASSESSMENTS WERE TAKEN UP, THE ASSESSEE FILED A CON FIRMATION LETTER OBTAINED FROM HIS BROTHER-IN-LAW. IT WAS SUBMITTED THAT THE FATHER-IN-LAW OF THE ASSESSEE HAD SOLD A TERRACED BUILDING ON 26.9.1 997 FOR A CONSIDERATION OF RS.2,08,000/- AND UTILIZED THE PROCEEDS THEREOF FOR GIVING GIFT TO THE ASSESSEE. SINCE THE ASSESSEE DID NOT FURNISH ANY C ONFIRMATION LETTER DURING THE FIRST ROUND OF PROCEEDINGS, THE ASSESSING OFFIC ER DID NOT ACCEPT THE CLAIM OF RECEIPT OF GIFT. THE LEARNED. CIT(A), HOWEVER, ACCEPTED THE CLAIM OF THE ASSESSEE. 12. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISS UE. THE CLAIM OF THE ASSESSEE IS THAT HE HAS RECEIVED THE GIFT AMOUNT OF RS.1,40,000/- FROM HIS FATHER IN LAW, AND THE SAID FACT HAS ALSO BEEN CONF IRMED BY HIS BROTHER IN LAW. THE SOURCE FOR GIVING THE SAID GIFT WAS EXPLA INED TO BE THE SALE PROCEEDS OF A PROPERTY. THE LEARNED A.R. DURING TH E COURSE OF HEARING SUBMITTED THAT THE ASSESSEE HAD ALREADY SUBMITTED A COPY OF CONVEYANCE DEED TO THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. SINCE THE FATHER-IN-LAW OF THE ASSESSEE HAD EXPIRED IN 2001, THE ASSESSEE HAS OBTAINED THE CONFIRMATION LETTER FROM HIS BROTH ER-IN-LAW, WHO HAS ALSO CONFIRMED THE TRANSACTION OF GIFT. UNDER THESE SET OF FACTS, IN OUR VIEW, THE IT(SS)A NO.04/V/2012 K. RAJKUMAR, KAKINADA PAGE 7 OF 9 LEARNED CIT(A) WAS JUSTIFIED IN ACCEPTING THE CLAIM OF RECEIPT OF GIFT AND ACCORDINGLY WE CONFIRM HIS ORDER ON THIS ISSUE. 13. THE NEXT ISSUE RELATES TO THE ASSESSMENT OF INV ESTMENTS FOUND IN THE NAME OF SRI KARUNANIDHI. THE DISCUSSIONS MADE BY T HE LD. CIT(A) ON THIS ISSUE AND DECISION TAKEN BY HIM ARE EXTRACTED BELOW FOR THE SAKE OF CONVENIENCE. COMING TO THE INVESTMENTS IN THE NAME OF SRI KARUNA NIDHI, IT IS EXPLAINED THAT SRI KARUNANIDHI IS A MUSICIAN WHO HA S BEEN WORKING FOR ATLEAST LAST 10 YEARS IN VARIOUS ORCHESTRAS. I T IS FURTHER EXPLAINED THAT AS HE IS UNMARRIED WHATEVER SAVINGS HE MADE OU T OF HIS EARNINGS ARE KEPT WITH HIS BROTHER IN THE FORM OF F IXED DEPOSITS. IT IS FURTHER EXPLAINED THAT AFTER SEARCH SRI KARUNANIDHI FILED HIS RETURNS OF INCOME IN WHICH THESE DEPOSITS ARE REFLECTED AS HIS DEPOSITS. I HAVE CONSIDERED THE EXPLANATION OF THE ASSESSEE. IT HAS BEEN THE CONSISTENT STAND OF THE ASSESSEE SINCE THE DATE OF ASSESSMENT THAT THESE DEPOSITS ARE BELONG TO SRI KARUNANIDHI. ON P ERUSAL OF THE INVESTMENT STANDING IN THE NAME OF SRI KARUNANIDHI IT IS SEEN THAT ALL THE INVESTMENTS ARE MADE FROM 1995 ONWARDS. THE PA YMENTS MADE TO CHIT FUND AND JANACHAITANYA HOUSING (P) LTD. ARE IN THE NATURE OF MONTHLY INSTALMENTS MADE AND SUCH PAYMENTS DID NOT EXCEED RS.50,000/- IN ANY GIVEN YEAR WHICH ARE BELOW TAXAB LE LIMIT PRESCRIBED IN THOSE YEARS. NATURAL COROLLARY OF TH IS IS THAT SRI KARUNANIDHI WOULD HAVE HAD INCOME WHICH IS BELOW TA XABLE LIMIT AND HENCE DID NOT FILE RETURNS OF INCOME. EVEN OTHERWI SE THE PROPER COURSE OF ACTION FOR THE AO WOULD HAVE BEEN TO ISSU E NOTICE UNDER SECTION 158BD TO SRI KARUNANIDHI AND EXAMINED THE A SSESSABILITY OF THE SAID INVESTMENT IN HIS HANDS. INSTEAD AO RESOR TED TO ADDING THE INVESTMENT STANDING IN THE NAME OF SRI KARUNANIDHI IN THE HANDS OF THE ASSESSEE. THIS IS NOT SUSTAINABLE AS SRI KARUN ANIDHI IS AN INDEPENDENCE ASSESSABLE ENTITY. IN VIEW OF THE ABO VE I DIRECT THE AO TO DELETE THE ADDITION MADE WITH REGARD TO THE INVE STMENT MADE IN CASE OF SRI KARUNANIDHI. 14. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISS UE. WE NOTICE THAT THE LEARNED CIT(A) HAS GIVEN A FINDING THAT THE INVESTM ENTS IN THE NAME OF SRI KARUNANIDHI HAVE BEEN MADE FROM 1995 ONWARDS AND FU RTHER SRI KARUNANIDHI WOULD HAVE HAD INCOME TO MAKE THESE INV ESTMENTS. SINCE THE PRESENT ASSESSMENT IS A BLOCK ASSESSMENT AND FURTHE R SINCE NO OTHER MATERIAL WAS BROUGHT ON RECORD TO SHOW THAT THE ASS ESSEE HEREIN HAS ACTUALLY PROVIDED MONEY TO MAKE INVESTMENTS IN THE NAME OF SHRI IT(SS)A NO.04/V/2012 K. RAJKUMAR, KAKINADA PAGE 8 OF 9 KARUNANIDHI, WE DO NOT FIND ANY INFIRMITY IN THE DE CISION TAKEN BY LEARNED CIT(A) ON THIS ISSUE. 15. THE NEXT ISSUE RELATES TO THE ASSESSMENT OF CAS H SEIZED DURING THE COURSE OF SEARCH. IN THE STATEMENT TAKEN FROM THE ASSESSEE ON THE DATE OF SEARCH, THE ASSESSEE STATED THAT HE CANNOT EXPLAIN ABOUT THE CASH OF RS.3,51,050/- FOUND IN HIS RESIDENCE. SUBSEQUENTLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE CLAIMED THAT C ASH OF RS.3,51,050/- BELONGS TO THE SOCIETY. THE ASSESSING OFFICER NOTI CED THAT THE ASSESSEE HAD EARLIER REQUESTED THE DEPARTMENT TO ADJUST THE CASH SEIZED FROM HIM AGAINST THE TAX DUE FROM HIM. ACCORDING TO THE ASSESSING O FFICER, THE ASSESSEE COULD NOT HAVE MADE SUCH A PLEA, IF THE CASH ACTUAL LY BELONGS TO THE SOCIETY. SINCE THE ASSESSMENT OF SOCIETY WAS PENDING DISPOSA L, THE ASSESSING OFFICER ASSESSED THE SEIZED CASH OF RS.3,51,050/- IN THE HA NDS OF THE ASSESSEE ON PROTECTIVE BASIS. IN THE FIRST ROUND OF PROCEEDING S, THE THEN LEARNED CIT(A) HAD TAKEN THE VIEW THAT THE SEIZED CASH OF RS.3,51, 050/- BELONG TO THE SOCIETY. HENCE, THE PRESENT LEARNED. CIT(A), BY FO LLOWING THE DECISION OF HIS PREDECESSOR, HELD THAT THE CASH SEIZED FROM THE ASSESSEE BELONGS TO THE SOCIETY AND ACCORDINGLY DELETED THE ADDITION MADE I N THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS. 16. THE LEARNED D.R. SUBMITTED THAT THE LEARNED. CI T(A) HAS GIVEN A FINDING THAT THE SEIZED CASH OF RS.3,51,050/- BELON G TO THE SOCIETY WITHOUT CAUSING ANY VERIFICATION. ACCORDINGLY, HE SUBMITTE D THAT THIS ISSUE MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR CARRYING OUT NECESSARY VERIFICATION. HOWEVER, THE LEARNED A.R. SUBMITTED THAT THE ASSESSING OFFICER HAS ADDED A SUM OF RS.5,76,050/- AS UNEXPLAINED CAS H FOUND DURING THE COURSE OF SEARCH IN THE HANDS OF THE SOCIETY. ACCO RDING TO THE LEARNED A.R. THE ABOVE SAID SUM OF RS.5,76,050/- ALSO INCLUDES T HE AMOUNT OF RS.3,51,050/- ASSESSED IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS. IT(SS)A NO.04/V/2012 K. RAJKUMAR, KAKINADA PAGE 9 OF 9 17. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISSUE. AS SUBMITTED BY LEARNED. D.R., THE LEARNED CIT (A) HAS RENDERED HIS DECISION BY FOLLOWING THE DECISION OF HIS PREDECESSOR. IT IS NOT SHOWN T O US THAT THE PREDECESSOR CIT(A) DID CARRY OUT ANY VERIFICATION ON THIS ISSUE . THE SUBMISSIONS PUT FORTH BY BOTH THE COUNSEL WOULD SHOW THAT THE CLAIM OF THE ASSESSEE REQUIRES VERIFICATION AT THE END OF THE ASSESSING O FFICER. ACCORDINGLY, WE SET ASIDE THE ORDER OF LEARNED. CIT(A) ON THIS ISSUE AN D RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTIO N TO EXAMINE THE ISSUE AFRESH AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. 18. IN THE RESULT, THE APPEAL FILED BY THE REVE NUE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 02.05.2013. SD/- SD/- (D MANMOHAN) (B R BASKARAN) VICE PRESIDENT ACCOUNTANT MEMBER VISAKHAPATNAM, DATE: 2 ND MAY, 2013 VG/SPS COPY TO 1 ACIT, CIRCLE-1, KAKINADA 2 SHRI KANIKELLA RAJ KUMAR, D.NO.3-28, 2 ND LANE, BANK COLONY, SARPAVARAM, KAKINADA 3 4. THE CIT, VISAKHAPATNAM THE CIT(A), VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM