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TMI Blog2019 (8) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... money, therefore he came to a conclusion that assessee also paid on money. The above observation given by the ld. CIT(A) is without any basis and cannot be accepted. From the observations of the ld. CIT(A), it is very clear that the seller of the property-Sri Ganta Punna Rao is accepting on money from other persons, therefore, the deposits made in his bank account, cannot be concluded that the amount paid by the assessee. It can be also said that the amount deposited in the bank account is anybody s amount because no details are available with regard to what is the amount received and what is the amount deposit. In view of the decision of the Hon'ble Supreme Court in the case of M/s. Andaman Timber Industries [ 2015 (10) TMI 442 - SUPREME COURT] and also the decision of the coordinate bench of the tribunal in the case of Sri Venkata Rama Sai Developers [ 2015 (11) TMI 1608 - ITAT VISAKHAPATNAM] and also by considering the facts and circumstances of the case, we find that the orders passed by the AO and ld.CIT(A) cannot survive. - appeal filed by the assessee is allowed - ITA No. 264/VIZ/2019 - - - Dated:- 14-8-2019 - Shri V. Durga Rao, Hon ble Judicial Member A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence for making payment to Sri G. Punna Rao towards purchase of the said site over and above the consideration mentioned in the deed. In this regard, I have perused the appeal folder of Sri G. Punna Rao for the asst. year under consideration which is pending for disposal. Sri G. Punna Rao admitted in sworn statement stated that he has received consideration as per agreements entered and registration was done at lower price. It was also admitted by him that on money received by virtue of agreements were offered to tax. In that case, certain copies of agreements evidencing on money payment received by Sri G. Punna Rao were also placed on record. Though it is a fact that no agreement copy was available regarding the present appellant, availability of copies of agreements in support of claim made by Sri G. Punna Rao for accepting on money payment from other persons give credence to the statement given by the said Sri G. Punna Rao. The sworn statement given is backed by the agreement copies partly. The commitment of Sri G. Punna Rao resulted in filing return and offering capital gains to tax. This is the corroborative evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have heard both the sides, perused the material available on record and orders of the authorities below. 9. The case of the assessee is that she purchased a vacant site admeasuring 384 sq.yds. situated at Pedapalakaluru village, Guntur District from Sri Ganta Punna Rao for a consideration of ₹ 4,80,000/- vide sale deed No. 5751/2010, dated 02/08/2010. The case of the Assessing Officer is that he received information from DDCIT (Invt.), Guntur that Sri Ganta Punna Rao in his savings bank account with Andhra Bank, Guntur there are certain cash deposits. When he was asked, it was submitted that he sold the property to the extent of 384 sq.yds. for a consideration of ₹ 32,91,750/- to the assessee and offered the same for capital gains and accordingly assessment in his case is completed. Therefore, the Assessing Officer is of the opinion that the assessee purchased the property for ₹ 32,91,750/- and shown the purchase price in the document as ₹ 4,80,000/- therefore, the remaining balance amount of ₹ 28,60,240/- treated as unexplained investment of the assessee and added the same to the total income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. Andaman Timber Industries Vs. CCE in Civil Appeal No. 4228/2006, by order dated 02/09/2015 has observed that not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition made by the Assessing Officer and confirmed by the ld. CIT(A) cannot survive. Under similar circumstances, the coordinate bench of the tribunal in the case of Sri Venkata Rama Sai Developers (supra) has considered the various judicial precedents and has held that in the absence of property enquiry and sufficient evidence, addition cannot be made based on the admission by the third party. For the sake of convenience, the relevant portion of the order is extracted as under:- 15. In the present case on hand, except loose sheet found in the premises of third party and admission made by the third party in their assessment proceedings, there is no other evidence on record to prove that on money is paid. The assessing officer, without brought on record any evidence to prove that on money is exchanged between the parties, merely harping upon the loose sheet and the third party admission, which cannot be considered as conclusive evidence against the assessee to bring the on money to tax as undisclosed income. The A.O. is required to bring further evidence on record to show that actual on money is exchanged between the parties, but literally failed to do so. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. Now coming to the case laws relied upon by the assessee counsel, the assessee s counsel at the time of hearing relied upon plethora of case laws in support of his contentions. 18. The A.R. relied upon ITAT Hyderabad `A Bench decision in the case of Smt. K.V. Lakshmi Savitri Devi Vs. ACIT (2012) 148 TTJ 517, wherein the Tribunal under similar circumstances held as under:- Admittedly there was no search action in the case of the assessee. It is a loose slip containing certain entries recording the payment which was found at the premises of CRK. It does not contain either date of payment or name of the person who has made the payment. According to the Department, CRK denotes C. Radha Krishna Kumar and KRK denotes K. Rajani Kumari. However, no name of the assessee was found in the louse sheet. The property was purchased from P w/c CRK for a disclosed consideration of Ps. 65 lakhs by the assessee. The property has been registered and the sale deed was executed for a consideration of Ps. 65 lakhs on 21st Aug., 2006 which consideration has been accepted by the State registration authorities. Further nothing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on at ₹ 165 lakhs. The Department herein i required to establish the nexus of the seized material to the assessee. As stated earlier there is no date and name of the assessee. The allegation of the Department is that the seized material denotes the payment made by the assessee to the purchaser for purchase of the property. However, no such narration or name of the assessee was found in the seized material. The Department is not able to unearth any document or material or any corroborative material to show that the assessee herein actually paid Ps. 165 lakhs for purchase of the property. The Department has not brought on record the date on which the payment was made and the source from which ii is paid and/or any details of bank account from where the cash was withdrawn. Without any of these details, the Department has taken a view that the assessee has paid Ps. 165 lakhs for purchase of the property. The Department cannot draw inference on the basis of suspicion, conjectures and surmises. Suspicion, however strong cannot take place of material in support of the finding from the AO. The AO should act in a judicial manner, proceed with judicial spirit and come to a judicial con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o establish the nexus of the seized material to the respondent and had drawn inferences based on suspicion, conjectures and surmises which cannot take the place of proof. We also agree with the Tribunal that the assessing officer did not conduct any independent enquiry relating to the value of the property purchased and the burden of proving the actual consideration in the purchase of the property is on the Revenue and it had failed to discharge the said burden. 20. The A.R. further relied upon the ITAT Ahmedabad `C' Bench decision in the case of Jawaharbhai Atmaram Hathiwala Vs. ITO reported in (2010) 128 TTJ 36, wherein under similar set of facts, the Hon ble ITAT decided the issue in favour of the assessee as under: The assessee has claimed to have made payment of ₹ 1,01,687/- only upto 31st March, 1999 and has consistently taken the stand that it has not paid balance amount of ₹ 3,81,414/- as stated in the seized document. No evidence could be brought on record by the Revenue to show that in fact the assessee had paid the amount of ₹ 3,81,414/- to OD. No document containing signature of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned in the photo copy of sale agreement seized in course of search and seizure operation. The assessee has produced before the AO registered sale deeds in support of its claim that they had purchased the property for a consideration of ₹ 23.50 lakhs. When the AO alleges that the assessee has paid more than what has been declared in the registered sale deed because the fair market value of the asset as on the date of transaction exceeds full value of consideration declared by the assessee then it is for the AO to prove that the value declared by the assessee is understated. In the appeal before us, excepting the photo copy of sale agreement, there is no other evidence on record found as a result of search or brought on record on the basis of enquiry conducted by the AO which could establish the fact that the actual consideration passed between the parties is not as mentioned in the registered sale deed but as per the sale agreement found during search operation. It is also an interesting fact to note that in the statement recorded from the assessee u/s 132(4) the revenue authorities have not put any question with regard to the sale agreement seized at the time of search and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs represents the expenditure incurred by Smt Nalini Devi. However, the amount was found to be the summary of the balance of various accounts operated by the family members of Smt. Nalini Devi. We find that the CIT (A) in his elaborate and well reasoned order has dealt with all these aspects and came to a finding on fact that the AO has made the addition purely on conjectures and surmises and not on the basis of any material or evidence brought on record. On examining the facts and materials before us, we are of the view that the finding arrived by the CIT (A) is just and proper and in accordance with the principles of law laid down by the Hon'ble Supreme Court and Hon'ble High Courts which are cited before him. We therefore find no necessity to interfere with the finding of the CIT (A) on this issue. Hence the grounds raised by the revenue for the years under consideration are dismissed. 22. The Hon ble A.P. High Court in ITA No.232 of 2013 in the case of CIT Vs. Smt. R. Nalini Devi has upheld the order of the ITAT Hyderabad Bench. The Hon ble High Court while, considering the issue held as under: We have heard the learned counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestions of law. The fact as to the actual sale price of the property, the implication of the contradictory statements made by Rajarathinam or whether reliance could be placed on the loose sheets recovered in the course of the raid are all question of fact. We therefore find no infirmity in the order of the High Court. Accordingly, we dismiss the appeal. 24. Considering the total facts and circumstances of the case and also applying the ratios of the judgements cited above, we are of the opinion that the A.O. is not correct in coming to the conclusion that the on money is exchanged between the parties based on a loose sheet found in the premises of a third person and also admission by a third person. To sustain the addition, the A.O. should have conducted an independent enquiry about the value of the property and ascertain whether any under valuation is done, if so what is the correct value of the property. Further, the A.O. did not brought on record any evidence to support his contention to say that there is on money exchanged between the parties. In the absence of proper enquiry and sufficient evidences, we find no reason to confirm the addition made by the A. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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