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TMI Blog2019 (9) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... as bought by registered sale deed, whether the assessee had source of income for the purpose of purchase of property is an issue which requires thorough examination in the respective assessments of the assessee. The assessment order is silent as to contents of the seized materials. Therefore it cannot be said that material seized suggest any unaccounted investments in the said land. However during the course of present assessment proceedings, the assessee had offered an explanation in support of the source of investments made in purchase of property. The seized material does not contain anything to show that the explanation offered by the assessee cannot be believed or false. In the circumstances, the impugned additions cannot be sustained in the eyes of law as the addition was not made based on the incriminating material found as a result of searched material. Accordingly, the assessment order of the lower authorities are set aside and appeal of the assessee is allowed. - I.T.A. Nos. 2679, 2982 & 2983/CHNY/2017 - - - Dated:- 21-8-2019 - SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER Appellant by : Shri. B. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucted in the case of one Shri. D. Ramagopal on 27.11.2013. During the search proceedings, certain incriminating materials belonging to the appellant were stated to be found. Subsequently, notice u/s.148 of the Income Tax Act, 1961 (in short the Act ) was issued to the appellant on 28.03.2016. In response to which, assessee submitted letter dated 22.04.2016 stating that the original return of income filed on 20.08.2010 for the assessment year 2009-10 be treated as return in response to notice issued u/s.148 of the Act. Subsequently, the assessee was intimated by the Assessing Officer that original return of income was treated as invalid and therefore called upon the assessee to file fresh return of income and accordingly the assessee had filed return of income in response to notice u/s.148 of the Act on 09.05.2016 declaring total income of ₹ 2,78,582/-. During the course of re-assessment proceedings, the Assessing Officer found that assessee had repaid a sum of ₹ 3,05,000/-, out of ₹ 16,00,000/- loan availed from UCO Bank, Karur prior to 31.03.2008 and source for the repayment of loan was explained by way of agricultural income of ₹ 1,75,000/-, rental inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following grounds of appeal: 1) The Commissioner (Appeals) order is against law and facts of the case. 2) The CIT (A) ought to not to have rejected the opening the balance of ₹ 9,90,000 as advance received from the parties without considering the previous year assessment order (AY: 20 10-11). 3) The CIT (Appeals) ought not to have confirmed the advances to the tune of ₹ 24,75,000 received and confirmed by the partners as unexplained income of the appellant without apprising the correct fact. 4) The Commissioner (Appeals) failed to appreciate the correct fact and merely added to ₹ 19,70,000 as investment u/s. 69 of the Income tax Act 1961. 5) The CIT (Appeals) failed to allow the LIC claim to the tune of ₹ 1,40,000. 6) The CIT (Appeals) failed to allow the agricultural income as claimed by the appellant to an extent of ₹ 5,27,500. 7) The Commissioner (Appeals) ought to have considered the addition made u/s. 69 by accepting the appellant s claim of source for carrying out repairs to an extent of ₹ 4,50,000 by way of cheque to Mr. Sakthive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Land at Ponnayyarajapuram 12,50,000 3 Agricultural land at Karumbapalayam 15,88,355 4 Land and building at Narasimmanayakanpalayam 10,90,000 5 Land at Palani 5,00,000 When the appellant was called upon to explain the source for the investments in the above properties, it was mentioned that investments were made out of opening cash balance of ₹ 49,50,550/-, agricultural and business income of ₹ 15,67,840/-, advance received from the parties against sale of property in Ponnayarajapuram land of ₹ 24,75,000/- and advance received from sale of house property situated at Vayyapuri Nagar, Karur from one Shri. S.Kannan ₹ 30,00,000/- vide agreement dated 25.02.2010, loan from LIC of ₹ 1,40,000/- and loan from Alagappa Chettiar ₹ 20,00,000/-, LIC policy surrendered and matured amount ₹ 4,68,514/- and loan received from UCO Bank and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under - 2,00,000/- 6 Palanisamy - 1,25,000/- 7 N. Ramaswamy - 1,25,000/- 8 Saktivel - 7,35,000/- 9 Sellathal - 1,00,000/- 10 Subramanian C - 1,80,000/- Total 24,75,000/- For the reason that none of the parties had verifiable sources of income and the transaction had taken place in cash. The Assessing Officer considering the fact that agreement for acquisition of land at Poonayarajapuram was entered on 24.09.2010 and the advance was stated to have received much earlier and no such claim was made during the search proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btors. Further, it is submitted that the ld. CIT(A) ought not have confirmed the addition on account of loan availed from LIC of ₹ 1,40,000/-. Similarly it is contended that lower authorities ought not have restricted the agricultural income to ₹ 4,72,500/- in the light of the fact that agricultural income of ₹ 12,56,050/- was accepted by the Assessing Officer in the assessment year 2010-11. Therefore agricultural income of ₹ 10,00,000/- claimed by the assessee is not very high. As regards to the addition of ₹ 4,50,000/- on account of renovation in respect of property situated at NSR Road, it is submitted that payments were made by way of cheque in F.Y. 2012-13 relevant to assessment year 2013-14 and no addition should be made in the current year. 16. On the other hand, the ld. Sr. Departmental Representative placed reliance on the orders of lower authorities. 17. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to addition on account of unexplained investments made in purchase of land at NSR Road. It is matter of record that assessment is completed pursuant to notice i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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