RAM MOHAN RAO DARUMAGARI ,SECUNDERABAD V. INCOME TAX OFFICER, WARD-15(1), HYDERABAD

ITA 467/HYD/2019

AI Insights

The case involves appeals by Shri Ram Mohan Rao Darumagari and Late Smt. Vanaja Darumagari against the orders of the CIT (A) regarding the assessment year 2008-09. The primary issue was the validity of the reopening of the assessment and the additions made under section 69 of the I.T. Act, 1961, concerning unexplained investments in land and capital contributions to a partnership firm. The Tribunal examined whether the Assessing Officer was justified in reopening the assessment based on information received from a search and seizure operation related to the MB Patil Group and M/s. Raja Rani Developers. The Tribunal concluded that the reopening was valid and upheld the addition of Rs.4,76,50,000 as unexplained investment in land while rejecting the additional Rs.10,00,000 enhancement for capital introduced in the partnership firm.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473140 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Assessment Year: 2008-2009
• Other Referred Cases: G. Koteswara Rao vs. DCIT Central Circle, Green Valley Tower (P) Ltd vs. ACIT, Peninsula Land Ltd vs. ACIT Central Circle 1(3), Pr.CIT (Central) vs. Ganesh Plantation Ltd, Samanthapudi Lavanya vs. ACIT Central Circle, Income Tax Officer vs. Vikram Sujitkumar Bhatia, Pr. CIT vs. Abhisar Buildwell (P) Ltd
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ARUN LAL
• Keywords: Unexplained investment; Document seized; Search and seizure; Block assessment; Reason to believe; Tangible material
• Section: 147; 148; 132; 153A; 22; 69; 13; 139; 153C; 20

Judgement Text

" ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 1 of 24 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ B ‘ Bench, Hyderabad Before Shri Vijay Pal Rao, Vice-President A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA No.467/Hyd/2019 (िनधाŊरण वषŊ/Assessment Year: 2008-09) Shri Ram Mohan Rao Darumagari, Secunderabad PAN:AGAPD7084P Vs. Income Tax Officer Ward-15(1) Hyderabad (Appellant) (Respondent) आ.अपी.सं /ITA No.466/Hyd/2019 (िनधाŊरण वषŊ/Assessment Year: 2008-09) Late Vanaja Darumagari L/R Shri Ram Mohan Rao Darumagari, Secunderabad PAN:AKQPD6499Q Vs. Income Tax Officer Ward-15(1) Hyderabad (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: Shri Arun Lal, CA राज̾ व Ȫारा/Revenue by:: Shri Kumar Pranav, CIT(DR) सुनवाई की तारीख/Date of hearing: 21/11/2024 घोषणा की तारीख/Pronouncement: 22/01/2025 आदेश/ORDER Per Vijay Pal Rao, Vice President These two appeals by the husband and wife are directed against two separate orders dated 10/01/2019 of the learned CIT (A)-7, Hyderabad for the A.Y.2008-09. The issues ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 2 of 24 involved in both the appeals are identical and common arising from the common facts and circumstances, therefore, for the purpose of recording the facts, the appeal in case of the husband Shri Ram Mohan Rao Darumagari in ITA No.467/Hyd/2019 is taken as a lead case. 2. The assessee and his wife have not filed any return of income u/s 139 of the I.T. Act, 1961 for the year under consideration. There was a search & seizure action u/s 132 of the Act in case of MB Patil Group and M/s. Raja Rani Developers on 24/11/2011. During the said search and seizure action, it was interalia revealed that the assessee Shri Bhim Rao Patil and Shri Vinod Kumar purchased a land measuring 3 acres and 9 guntas situated in Survey No.148, Kompally Village, Qutaballapur Mandal, R.R. District vide sale deed dated 10/10/2007 for a consideration of Rs.3.35 crores in the name of M/s. Raja Rani Developers, a partnership firm formed, vide partnership deed dated 26/10/2007. Thus, the land was purchased by these persons stated to be partners of the partnership firm in the name of the said partnership firm prior to the said firm came into existence. Subsequently, the said partnership was dissolved and the land was transferred in favour of the partners. This information relating to the assessee was received by the Assessing Officer from Dy. CIT, Central Circle-1, Aurangabad vide letter 16/2/2015 that, the assessee and the other persons have purchased the land and then the same was transferred in favour of the partners including the assessees as part of the dissolution ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 3 of 24 of the partnership firm. The Assessing Officer accordingly reopened the assessment by issuing notice u/s 148 on 5/3/2015 which stated to be duly served on the assessee on 7/3/2015. However, there was no response on behalf of the assessee to the notices issued u/s 148. After several opportunities and show- cause notices issued by the Assessing Officer for framing the assessment on best judgment basis, the assessee filed a reply dated 4/6/2015 requested for time up to 15/06/2015. Finally, the assessee filed his return of income on 5/10/2015 in response to notice u/s 148 of the I.T. Act, 1961. The Assessing Officer framed the assessment by making addition u/s 69 of the I.T. Act, 1961 of Rs.9,53,00,000/- as unexplained investment in purchase of land. Since the wife of the assessee was not a party to the sale deed dated 10/10/2007 whereby the land was purchased in the name of the partnership firm, the Assessing Officer has restricted the addition in the hand of the wife of Rs.10.00 lakhs on account of investment made in the partnership firm. 3. On appeal, the learned CIT (A) has restricted the addition on account of unexplained investment in purchase of land to Rs.4,76,50,000/- by enhanced the assessment by a sum of Rs.10.00 Lakhs on account of investment made by the assessee towards the capital in the partnership firm apart from the addition sustained on account of unexplained investment in purchase of land. ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 4 of 24 4. Aggrieved by the impugned order of the learned CIT (A), the assessee filed the present appeal and raised the following grounds: “1.The order of the Learned Commissioner of Income Tax (Appeals) is against law, weight of evidence and probabilities of the case. 2. The learned Commissioner of Income Tax (Appeals) erred in upholding the validity of the assessment for Asst.Year 2008-09 even though copy of the actual reasons recorded were not for reopening the assessment furnished by the Assessing Officer in spite of request made by the assessee. 3. The learned Commissioner of Income Tax (Appeals) erred in upholding the reopening of the assessment for Asst.Year 2008-09 rejecting the contention of the of the assessee that the Assessing Officer had not applied his mind on the issue of escapement of income and merely acted upon untested information for reopening assessment for the A.Y 2008-09. 4. The learned Commissioner of Income Tax (Appeals) erred in upholding the validity of the assessment even though documentary evidence stated to be available with the A.0 was not furnished to the assessee thus, denying opportunity of rebuttal. 5. The learned Commissioner of Income Tax (Appeals) erred in rejecting the appellant's contention that assessment should have been made u/s. 153C r.w.s 153A holding that the appellant's name does not figure in the document seized from the premises of BB Patil. 6. The learned Commissioner of Income Tax (Appeals) ought to have accepted explanation offered by the assessee that he made investment of Rs.20,00,000 in the firm of M/s. Raja Rani Developers towards his share and the share of his wife Smt.D.Vanaja and ought to have directed deletion of the addition of Rs.9,53,00,000 made by the Assessing Officer u/s.69 of the Act. 7. The learned Commissioner of Income Tax (Appeals) having held that each one of the partners have contributed towards purchase of the property, erred in ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 5 of 24 upholding addition in the hands of the assessee to the extent of Rs.4,76,50,000 constituting 1/3rd share of investment though the assessee held only 10% share as against 90% share held by other partners. 8. The learned Commissioner of Income Tax (Appeals) erred in upholding addition to the extent of Rs.4,76,50,000 holding that the appellant is one of the partners of the firm having 1/3rd share in the property whereas the appellant has only 10% share as against other partners holding 30%, 20% and 15% share in the firm of M/s.Raja Rani Developers. 9. The learned Commissioner of Income Tax (Appeals) erred in directing enhancement of the assessment by Rs. 10,00,000 ignoring the submissions of the appellant that the addition made by the Assessing Officer took in its fold any and all allegedly unexplained investment made by the appellant and that separate addition of Rs.10,00,000 was called for. 10. The learned Commissioner of Income Tax (Appeals) ought to have appreciated and accepted the explanation officered by the assessee regarding the sources for investment to the extent of Rs.20,00,000 which was stated to have been corroborated by K.Ravi Kumar and consequently, learned Commissioner of Income Tax (Appeals) ought to have directed deletion of the addition made by the Assessing Officer to that extent. 11. For the above grounds and such other grounds that may be urged at the time of that the hearing, the appellant prays Craves appeal be allowed. The appellant leave to add to, amend or grounds of appeal either time of hearing of the considered necessary.” 5. Ground No.1 is general in nature and does not require any specific adjudication. 6. Ground Nos. 2 to 8 are regarding the validity of the reopening of the assessment. The learned AR of the assessee has submitted that the assessment has been reopened by the ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 6 of 24 Assessing Officer on the basis of the search & seizure operation in case of MP Patil Group and M/s. Raja Rani Developers, Aurangabad on 24/11/2011 which is not valid because a specific provision has been made in the I.T. Act, 1961 for initiating proceedings u/s 153C of the Act. Thus, the learned AR has submitted that resorting to the provisions of section 147 & 148 by the Assessing Officer instead of initiating proceedings u/s 153C is invalid as beyond the jurisdiction of the Assessing Officer. In support of his contention, he has relied upon the following judgment: i) G. Koteswara Rao vs. DCIT Central Circle, ITAT Vizag ii) Green Valley Tower (P) Ltd vs. ACIT, ITAT Delhi iii) Peninsula Land Ltd vs. ACIT Central Circle 1(3) Hon'ble Bombay High Court. iv) Pr.CIT (Central) vs. Ganesh Plantation Ltd, Hon'ble Gujarat High Court. v) Samanthapudi Lavanya vs. ACIT Central Circle, ITAT Visakhapatnam. 7. The learned AR has also referred to the judgment of the Hon'ble Supreme Court in the case of Income Tax Officer vs. Vikram Sujitkumar Bhatia reported in (2022) 453 ITR 417, dated 6/4/2023 and submitted that, the Hon'ble Supreme Court has held that, the amendment in the provisions of section 153C vide Finance Act, 20215 would be applicable to the searches conducted before 1/6/2015 i.e. the date of amendment. Therefore, once the seized material pertains to or any information ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 7 of 24 contained therein relates to a person other than the searched person, the Assessing Officer shall proceed against such other person as per the provisions of section 153C of the I.T. Act, 1961. The learned AR has thus, contended that, the reopening of the assessment on the basis of seized material and information received by the Assessing Officer is invalid and consequently, the re-assessment order is liable to be quashed. He has further contended that, the assessee was also not supplied the reasons recorded by the Assessing Officer and therefore, the re- assessment order passed by the Assessing Officer without inviting objections of the assessee against the reopening of the assessment is also invalid and also liable to be quashed. 8. On the other hand, the learned DR has submitted that the assessee has not filed his return of income for the A.Y under consideration, therefore, the information received by the Assessing Officer assessee from the Dy. CIT, Central Circle-1, Aurangabad is a tangible material to form the belief that the income assessable to tax on account of unexplained investment in the name of partnership firm M/s. Raja Rani Developers has escaped the assessment. He has further submitted that the initiation of proceedings u/s 153C are not mandatory as it depends on the satisfaction of the Assessing Officer on examination of the seized material pertains to the assessee or the information pertaining to the assessee in respect of undisclosed income of the assessee. Since it is not a case of remittance of the seized material by the Assessing Officer of searched persons to the ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 8 of 24 Assessing Officer of the assessee and further there is no satisfaction recorded either by the Assessing Officer of the searched person or by the Assessing Officer of the assessee that it is a fit case for initiation of proceedings u/s 153C of the Act, therefore, the initiation of proceedings u/s 147 and 148 of the I.T. Act, 1961 is well within the jurisdiction of the Assessing Officer and are valid. He has further submitted that once of the Partners Shri BB Patil has admitted before the Settlement Commission that the total cost of land measuring 3 acres 9 guntas + 538 sq. yard was Rs.15.45 crores and he invested an amount of Rs.5.92 crores for purchase of the said land. This figure is also matching with the seized document giving the details of cost of purchase and share of Shri BB Patil. Further, in the assessement proceedings u/s 153C of the Act in case of Shri Vinod Sriramwar, it has been held that, out of the total cost of 15.45 crores, Shri B.B Patil invested Rs.5.92 crores through his front man Shri S. Vinod Sriramwar and the balance amount was invested by the assessee Shri D. Ram Mohan Rao. Thus, he has submitted that in the sale deed dated 10/10/2007 the assessee along with 2 other persons have stated these facts about the partnership firm and therefore, the investment was made by these 3 persons out of which 1/3rd was made by Shri BB Patil and remaining was made by the assessee. Even if 1/3rd share of the assessee is taken into account, then the learned CIT (A) has rightly confirmed the addition to the extent of Rs.4,76,50,000/- as unexplained investment in the land. He has relied upon the impugned order of the learned CIT (A). ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 9 of 24 9. We have considered the rival submissions as well as relevant material available on record. The assessee has not filed any return of income for the year under consideration and the Assessing Officer has received information from the Dy. CIT, Central Circle-1, Aurangabad revealing the fact that the assessee along with 2 other persons namely Shri S. Vinod Kumar representing Shri BB Patil and Shri Bhimrao Patil, purchased the land, in question, vide sale deed dated 10/10/2007 for a consideration of Rs.3,35,00,000/- as stated in the sale deed. However, during the search & seizure operation in the case of MB Patil Group and M/s. Raja Rani Developers the partnership firm, it was found that the total consideration for the land, in question, was Rs.15,45,00,000/-. Based on the said information, the Assessing Officer reopened the assessment by issuing a notice u/s 148 of the Act on 05/03/2017 after recording the reasons. The said reasons recorded by the Assessing Officer for reopening of the assessment were supplied to the assessee vide letter dated 8/2/2016 and the same are reproduced by the learned CIT (A) in Para 4.2.of his order as under: “Information was received from DCIT, Central Circle-l, Aurangabad vide letter dated 16.2. 15 regarding search and seizure operations Conducted in MB Patil group of Aurangabad/Pune. During the search operations, certain documents relating to M/s. Raja Rani Developers, Hyderabad were found and seized in which you were one of the partners of the partnership firm. The DCIT, Central Circle- I, Aurangabad informed that during the course of search and subsequent asst, proceedings in the case of Raja Rani developers, it was noticed that substantial amounts were .received by you and your wife, Smt. D. Vanaja, as well as Sri K. Ravi Kumar from the above partnership firm. ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 10 of 24 As per the information received, M/s. Raja Rani Developers had purchased a land worth of Rs.3.35 crores vide deed dated 10.10.2007 against the actual on-money transaction worth Rs. 15.45 crores. Later, a land worth of Rs. 1.39 Crores was transferred to the above 3 partners on 24.9.2009 as part of dissolution of partnership firm. However, on verification from the records available, it is noticed that you had not filed your return of income for the A.Y.2008-09. Hence, the sources for investment made by you for purchase of property in the name of Partnership Firm M/s. Raja Rani Developers, remained unexplained. Since there is a reason to believe that income chargeable to tax has escaped assessment for AY 2008-09, by reason of failure on your part to file your return of income for the relevant asst. year, within the meaning of the provisions of Sec. 147 of the I.T. Act, 1961, a notice u/s. 148 was issued.\" 10. Thus, it is a matter of record that the reasons were supplied to the assessee. Further, as it is manifest from the reasons recorded by the Assessing Officer that only an information was received from the Dy. CIT Central Circle-1, Aurangabad and not any remittance of seized material with the satisfaction recorded by the Assessing Officer of the searched person. The said information reveals the fact about the purchase of the land by the assessee along with other persons in the name of M/s. Raja Rani Developers, vide sale deed dated 10/10/2007, prior to the alleged partnership firm came into existence vide partnership deed dated 26/10/2007. Thus, the said transaction of purchase of land was entered into between the seller and the individual buyers and at the most, an Association of the Persons comprising 3 persons which was subsequently converted into the partnership firm. At the time of formation of the partnership firm, several other partners were also admitted and the total number of partners goes to 8. Therefore, at the time of purchase of the land, ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 11 of 24 the investment was made only by the persons who were parties to the transactions and cannot be considered as investment either by the partnership firm or by the partners who were inducted at the time of formation of the partnership firm at a later point of time. This fact was revealed from the information received by the Assessing Officer from the Dy.CIT, Central Circle-1, Aurangabad and constitute a tangible material to form the belief that the income assessable to tax on account of unexplained investment in the purchase of the land by the assessee has escaped assessment. Since it is a case of non-filing of return on the part of the assessee, therefore, there is no question of any other objections against the reopening of the assessment except whether the reasons recorded by the Assessing Officer are sufficient to form the opinion that the income assessable to tax has escaped assessment or not. The assessee has not disputed the transaction of purchase of land which is also a matter of record as the said transaction was carried out vide registered sale deed dated 10/10/2007 and therefore, the Assessing Officer was having a sufficient reason to believe that income on account of unexplained investment in purchase of land has escaped assessment. 11. The assessee has raised an objection that the proceedings initiated u/s 148 is invalid when specific provisions u/s 153C is provided in case of reopening of the assessment pursuant to the search and seizure action and material found during the search and seizure pertains to the assessee. We do not agree with this contention of the assessee because the provisions ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 12 of 24 of section 153C can be invoked only when the conditions as prescribed therein are satisfied. It is not mandatory for the Assessing Officer to initiate the proceedings u/s 153C even if the Assessing Officer has received the material found and seized in case of search conducted on a 3rd person, if the Assessing Officer is not satisfied on analyzing of the said material that any undisclosed income in the hands of the assessee is found. Since in the case in hand, there was no satisfaction recorded by the Assessing Officer of the searched person and further, the seized material pertaining to the assessee was also not remitted by the Assessing Officer of the searched person to the Assessing Officer of the assessee therefore, the question of recording satisfaction on the part of the Assessing Officer to initiate proceedings u/s 153C does not arise. In these facts and circumstances, the Assessing Officer was having the remedy only u/s 147 & 148 of the I.T. Act, 1961 to assess the income escaped assessment on account of unexplained investment made by the assessee in purchase of the land as an undisputed transaction. It appears that the sale deed was executed in the name of a non-existing partnership firm to create a smoke screen and hide the transaction in the hands of the purchaser including the assessee. The sale deed is a misleading document executed by the assessee and other persons in the name of non-existing partnership firm and therefore, the said information received by the Assessing Officer from the Dy.CIT, Central Circle-1, Aurangabad leads to the conclusion that the intention of the parties right from the beginning was to conceal the transaction and avoid the tax. Once the satisfaction ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 13 of 24 as required for initiation of proceedings u/s 153C of the I.T. Act, 1961 are not satisfied in the case of the assessee, then the initiation of proceedings u/s 147 and 148 of the I.T. Act, 1961 is the only remedy left with the Assessing Officer. Even otherwise, there is no legal impediment for initiation of proceedings u/s 147 & 148 based on the information received by the Assessing Officer in pursuant to a search & seizure action on a 3rd person. The Hon'ble Supreme Court in the case of Pr. CIT vs. Abhisar Buildwell (P) Ltd reported in (2023) 454 ITR 212 has held in Para 14 as under: “14. In view of the above and for the reasons stated above, it is concluded as under: i) that in case of search under Section 132 or requisition under Section 132A, the AO assumes the jurisdiction for block assessment under section 153A; ii) all pending assessments/reassessments shall stand abated; iii) in case any incriminating material is found/unearthed even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the ‘total income’ taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 14 of 24 saved. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs” 12. Thus, even in case of no incriminating material is unearthed, the Assessing Officer can reopen the assessment in exercise of powers u/s 147 & 148 of the I.T. Act, 1961 subject to fulfilment of the condition as envisaged u/s 147 & 148 of the Act and those powers have been saved. The said judgment of the Hon'ble Supreme Court was passed in case of searched persons and therefore, there is no embargo to the powers of the Assessing Officer for initiating proceedings u/s 147 & 148 based on the information received in pursuant to the search & seizure of a 3rd person subject to the satisfaction of the condition as provided u/s 147 & 148 of the I.T. Act, 1961. Accordingly, we do not find any errors or illegality in the impugned order of the learned CIT (A) qua this issue. 13. On merits, the learned CIT (A) restricted the addition after considering the remand report in Para 5.3 of the impugned order as under: ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 15 of 24 ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 16 of 24 ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 17 of 24 ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 18 of 24 ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 19 of 24 14. The assessee is one of the 3 persons who were party to the sale deed for purchase of the land, in question, and accordingly, the learned CIT (A) restricted the addition in the hand of the assessee to 1/3rd of the total purchase consideration as found during the course of search and seizure action. 15. We have heard the learned AR and the learned DR and carefully perused the relevant records. It is a case of an addition made by the Assessing Officer based on undisclosed investment of purchase of land. However, the seized material revealing the ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 20 of 24 purchase consideration of the land, in question, at Rs.15.45 crores as against the recorded consideration in the sale deed at Rs.3.35 crores + registration charges of Rs.31,82,600/-. One of the partners Shri BB Patil has approached the settlement commission and declared the income on account of unexplained investment in land in question. The order of the Settlement Commission on this issue is placed at page No 1 to 8 of the paper book and the relevant findings of the Settlement Commission in para 26 of the order reads as under: ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 21 of 24 16. Thus, the Settlement Commission has also accepted the share of investment of Shri BB Patil as revealed by the seized document and therefore, if the same logic is applied in the case of the assessee, then 1/3rd share in the said investment is contributed by the assessee. Accordingly, we do not find any error or illegality in the impugned order of the learned CIT (A) qua this issue. 17. Ground Nos. 9 and 10 are regarding the enhancement of assessment by a sum of Rs.10.00 lakhs as capital contribution to the partnership firm. 18. We have heard the learned AR and the learned DR and considered the relevant material available on record. The learned CIT (A) has made the enhancement of assessment in Para 6.1 of the impugned order as under: ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 22 of 24 19. Thus, the enhancement is made by the learned CIT (A) only on the basis of the contention of the assessee in denying any investment made for purchase of land except Rs.20.00 lakhs as an introduction of capital in the partnership firm on behalf of the assessee and his wife of Rs.10.00 lakhs each. Once the 1/3rd investment on the purchase of land and that too as per the seized document and not as per the purchase consideration recorded in sale deed is added to the income of the assessee on account of unexplained investment, then the said amount of Rs.20.00 lakhs cannot be separately considered as capital introduced by the ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 23 of 24 assessee in the partnership firm along with the share of his wife. The investment made in purchase of land which was subsequently transferred to the partnership firm itself is contribution on behalf of the partners who were party to the transaction of purchase of land. Therefore, in the absence of any fact or any material to show that apart from investment in land, the assessee has further contributed any amount towards the introduction of capital in the partnership firm, the addition/enhancement made by the learned CIT (A) is not justified, hence the same is deleted. 20. In the result, appeal filed by the assessee is partly allowed. ITA No.466/Hyd/2019 21. In the appeal filed by the assessee represented by her husband as a legal heir, the issue of validity of reopening of the assessment is identical as in the case of Shri Ram Mohan Rao Darumagari. In view of our findings on this issue in Para 10 to 12 of this order the Ground Nos. 1 to 4 stands dismissed. 22. As regards Ground No.5 regarding the addition of Rs.10 lakhs on account of capital introduced in the partnership firm, the Assessing Officer has made this addition on the basis of the contention of the husband of the assessee that only a sum of Rs.20.00 lakhs was invested by him on behalf of himself and his wife. Therefore, it is only on the basis of the said contention of the ITA Nos 466 and 467 of 2019 Ram Mohan Rao Darumagari Secunderabad Page 24 of 24 husband of the assessee, the addition was made by the Assessing Officer without having any material or facts brought on record to show that the assessee has actually made any investment on herself in respect of the contribution or introduction of capital in the partnership firm. Thus, in view of our findings on this issue in case of Shri Ram Monah Rao Darumagari, the husband of the assessee in para 18 & 19 of this order, the addition made by the Assessing Officer and sustained by the learned CIT (A) is deleted. 23. In the result, appeal filed by the assessee is partly allowed. 24. To sum up, both the appeals of the assessee are partly allowed. Order pronounced in the Open Court on 22nd January, 2025. Sd/- Sd/- (MADHUSUDAN SAWDIA) ACCOUNTANT MEMBER (VIJAY PAL RAO) VICE-PRESIDENT Hyderabad, dated 22nd January, 2025 Vinodan/sps Copy to: S.No Addresses 1 Shri Ram Mohan Rao Darumagari & Late Smt. Vanaja Darumagari, No.9 S.N. Reddy Enclave, Alwal, Secunderabad 500026, Telangana 2 Income Tax Officer Ward 15(1) IT Towers, AC Guards, Hyderabad-04 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order "