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TMI Blog2017 (10) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... nd B. Srinivas with relevant evidences to prove the hand writing and explain the contents of noting in full. The A.O. is directed to supply the copies of statements recorded and the impounded material and allow the assessee to explain the case, and also examine both Mr. B. Babujee and B. Srinivas in detail and decide the issue afresh on merits. Accordingly the assessment is set aside with direction to re do the same de novo. - I.T.A. No. 220/Vizag/2013, C.O. No. 83/Vizag/2013 - - - Dated:- 6-10-2017 - Shri V. Durga Rao, Judicial Member And Shri D. S. Sunder Singh, Accountant Member For the Appellant : Shri T. Satyanandam, DR For the Respondent : Shri M.S.R. Prasad, AR ORDER Per D. S. Sunder Singh, Accountant Member This appeal filed by the revenue is directed against order of the Commissioner of Income Tax (Appeals) {CIT(A)}, Vijayawada vide order No.430/CIT(A)/VJA/11-12 dated 22.1.2013 and the cross objection filed by the assessee is in support of order of the CIT(A), Vijayawada for the assessment year 2008-09. 2. All the grounds of appeal are related to the deletion of addition towards unexplained investment amounting to ₹ 2,05,59,255/-. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly, made the addition of ₹ 2,05,59,255/- i.e. ₹ 2,36,30,135/- (-) ₹ 30,70,880/- {i.eRs. 27,86,900/- (+) registration expenses ₹ 2,83,960/-)} including the cash payment of ₹ 1,95,00,000/- was brought to tax. 3. Aggrieved by the order of the A.O., the assessee went on appeal before the CIT(A) and the Ld. CIT(A) deleted the addition made by the A.O. Before the Ld. CIT(A), the assessee filed an affidavit from B. Babujee who stated to be an ex-employee of Sri Sai Krishna Constructions stating that the noting in the loose sheet was in the hand writing of B. Srinivas who has left the organization. For clarity and convenience, we extract the relevant part of the affidavit as under: 5. Subsequently I am doing some part time jobs as accountant and recently met Sri K.V. Narsaiah, managing partner of SSKP and SSKC in June, 2012 requesting him to entrust me any part time accounts job of his concerns or any known concerns to him. Then, Sri K. V. Narsaiah has shown me Xerox copy of page numbered 58 of a spiral note book and asked me whether the same was written by me. I recognised the writing in which the following figures were mentioned against the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Tadigadapa, where the impugned property was situated and in case of discrepancy, the A.O. should have called for the explanation from the assessee. The Ld.CIT(A) further observed that the A.O. should have referred the property to Departmental valuation and digged the sources of funds for making the investment. Having not taken the actions mentioned above, the A.O. has not collected the required evidences and the burden of the A.O. has not been discharged. The Ld. CIT(A) was of the opinion that the onus lies on the revenue to substantiate the point at issue that the assessee has paid the on money. The Ld. CIT(A) was of the view that the impounded document is the first step to probe the impugned investments and the document found would not itself is conclusive and it gives clue only. The CIT(A) held that A.O. made the addition on the guess work, imagination, etc. and accordingly deleted the addition made by the A.O. For the sake of clarity and convenience we extract the relevant paragraph of the Ld.CIT(A) s order which reads as under: 7. It transpires from records that as per the impounded document being at Page No. 59 of Annexure SSKC/23 on which details of total expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue tantamount to an addition based on guesswork, imagination etc, which cannot be sustained. Thus, the addition made by the AO at ₹ 2,05,59,255 stands deleted. The other 3 additions made by the AO, which were also contested, are adjudicated as under 5. Aggrieved by the order of the Ld. CIT(A), the revenue is in appeal before this Tribunal. 6. Appearing for the revenue, the Ld. D.R. argued that a survey u/s 133A of the Act was conducted in the case of the assessee and during the course of survey, evidences found in the form of spiral note book containing the details of the expenditure incurred for purchase of site at Tadigadapa at page No.59 and the cost of purchase of the site was ₹ 2,36,30,135/- inclusive of other expenditure incurred therein and out of which a sum of ₹ 1,95,00,000/- was paid by the assessee in cash. The noting gives clear picture and the complete details of item wise payments of expenditure incurred. This evidence was found in the business premises of the assessee. Further, in page No.60, which was enclosed as page No.2 of the paper book of the assessee, item wise details of various expenses were recorded which includes sand, steel, pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d B. Srinivas in fact have worked in the assessee s firm, therefore, the affidavits filed by the assessee cannot be held as valid piece of evidence. The ld. DR argued that in case the affidavit has to be considered as a valid evidence in the absence of any enquiry conducted by the Ld.CIT(A) and the Assessing Officer, the issue should be remitted back to the file of the AO to conduct the detailed enquiries with regard to the contents of the impounded document as well as the affidavit. The legal position is, the burden is cast on the assessee to disprove the contents of the material found during the course of the survey as untrue. In the assessee s case, the assessee has initially accepted the payment of ₹ 2,36,30,135/- and subsequently retracted from the statement. Therefore, the Ld. D.R. argued that the assessee has not discharged the burden cast on him as per section 292C of the Act. Therefore, as per the provisions of section 292C of the Act, unless otherwise proved by the assessee, whether any books of accounts, other documents, money, bullion, jewellery or other valuable article or thing found in the possession or in the control of any other person in the course of search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te books, scribbling pads, other miscellaneous books, sale and purchase documents, etc were found and impounded u/s 133A(3) clause (ia) of the Act. During the course of survey, the A.O. found that the assessee had purchased a site admeasuring 1393.44 Sq.yds. located at Tadigadapa village in re-survey No.11/8 from Sri Ponnam Venkateswara Rao for a consideration of ₹ 2,36,30,135/- inclusive of registration expenses, commission, UDA plans, UDA license and bank charges and got it registered on 14.12.2007. Out of the total expenses a sum of ₹ 1,95,00,000/- was paid in cash. The details of the purchase cost of the said site is evident from page No.59 of Annexure SSKC/23 found and impounded during the course of survey. The site was registered at ₹ 27,86,900/-.The A.O. recorded the statement from the Managing Partner of the firm Mr. K. Venkata Narasaiah who was present at the time of survey. The A.O. brought the contents of the Page No.59 of annexure SSKC/23 and confronted with him. In the statement recorded u/s 133A of the Act, the Managing partner agreed that the site was purchased for a total consideration of ₹ 2,36,30,135/-. The relevant part of the extract of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cash component of ₹ 1,95,00,000/-, commission of ₹ 1,11,520/- and other expenses, which were not accounted in the books of accounts. Thus, the amount of ₹ 2,05,59,255/- was made the addition u/s 69 of the Act. 10. During the appeal proceedings before the CIT(A), the assessee furnished an affidavit from B. Babujee stated to be the ex-employee of the assessee firm during the period from June, 2008 to March, 2011. Surprisingly identical affidavit was filed from Mr. Babujee in the case of Sai Krishna Promoters also. The assessee has not furnished any evidence to prove that Mr. B. Babujee was the ex-employee of the assessee company with the appointment letter and relieving letter issued to him, Identity card, PF, ESIC paid for him, etc. Mr. B. Babujee was not produced during the assessment proceedings. This affidavit was filed before the CIT(A) and the Ld.CIT(A) has admitted the additional evidence without recording the reasons and verifying the credentials of Babujee and Mr.Srinivas. Mr. B. Babujee has stated in the affidavit that the noting was said to be in the hand writing of Mr. B. Srinivas who also left the organization. There was no evidence filed along wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplied to the assesse and the copies will be given when the evidences are used against the assesse. This view is supported by the Hon ble Madras High court judgement in the case of Advantage Strategic Consulting (P.) Ltd [2017] 82 taxmann.com 97 (Madras). In this case neither the assesse nor the DR could inform us when the copies of statements were supplied to the assesse. Therefore, we are of the considered opinion that the case should be remitted back to the file of the A.O. to give sufficient opportunity to the assessee to prove his case of excess payment and the contents recorded in the seized material was incorrect. The assessee should produce Mr. B. Babujee and B. Srinivas with relevant evidences to prove the hand writing and explain the contents of noting in full. The A.O. is directed to supply the copies of statements recorded and the impounded material and allow the assessee to explain the case, and also examine both Mr. B. Babujee and B. Srinivas in detail and decide the issue afresh on merits. Accordingly the assessment is set aside with direction to re do the same de novo. 13. In the result, the appeal filed by the revenue is allowed for statistical purposes. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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