9911796707
TMI Blog2022 (10) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... mpletion of assessment proceedings, the assessee could not offer any satisfactory explanation and the assessee during the course of search had himself declared additional income of Rs.15.00 crores. As the submission of the learned Counsel for the assessee that it is not an un-accounted receipt but the same is on account of sale of land and the assessee has claimed such receipt as exempt income. Further, in absence of maintenance of any books of account by the assessee no addition u/s 68 can be made. It is also his submission that although admission is an important piece of evidence but the same is not conclusive. Hon ble Supreme Court in the case of Pullangode Rubber Produce Co. vs State Of Kerala And Anr. [ 1971 (9) TMI 64 - SUPREME COURT ] has held that an admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It has been held that it is open to the person who made the admission to show that it is incorrect. We find the assessee in the instant case in the return of income filed by him, has claimed an amount as exempt on account of sale of agricultural land. Therefore, we find some force in the argument of the learned Counsel for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplain the source of such investment. Further, as mentioned earlier, this land was purchased during the year itself and the onus was on the assessee to explain the source of such investment. Merely stating that the assessee has sufficient funds will not absolve the assessee from his responsibilities especially when no cash flow statement was filed to explain the availability of funds and the assessee is also not maintaining any books of account. In this view of the matter and in view of the detailed reason given by the CIT (A) while sustaining the addition made by the Assessing Officer, we do not find any infirmity in the order of the learned CIT (A) on this issue. Accordingly, ground of appeal No.6 is dismissed. Addition u/s 68 - undisclosed income in absence of satisfactory explanation - HELD THAT:- As entire amount cannot be added to the total income of the assessee. Since the assessee is involved in the real estate business and the entries in the books of account do not indicate whether it is in the nature of money received for purchase of land or loan etc., and the assessee has not declared any income from business, therefore, considering the totality of the facts of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antiate with evidence to the satisfaction of the revenue authorities and to our satisfaction that the income so derived is on account of the agricultural land which was used for agricultural activity, therefore, the order of the learned CIT (A) in our opinion is fully justified. Accordingly, ground raised by the assessee is dismissed. Recomputation of capital gain - HELD THAT:- We do not find any infirmity in the order of the CIT (A) in directing the Assessing Officer to recompute the capital gain after reducing the cost of acquisition from the sale proceeds - DR could not point out any error in the order of the learned CIT (A) on this issue. We, therefore, uphold the order of the learned CIT (A) and direct the Assessing Officer to recompute the capital gain after reducing the cost of acquisition from the sale proceeds after due verification. Needless to say, the Assessing Officer shall give due opportunity of being heard to the assessee while deciding the issue. We hold and direct accordingly. Ground of appeal No.9 by the assessee and ground of appeal by the Revenue are accordingly allowed for statistical purposes. Addition u/s 68 - HELD THAT:- We find the AO in the instant case m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly upheld. For second addition submission of assessee that it represents only the working and no information is available that the assessee has received the amount of Rs.25.00 lakhs from Sri Sudhakar or from anyone. However, we do not find any merit in the above argument of the learned Counsel for the assessee in absence of any satisfactory explanation. Therefore, the order of the CIT (A) sustaining the addition made by him so is upheld. Undisclosed receipts - HELD THAT:- A perusal of the copy of the return of income filed by the assessee shows that the assessee has declared sale considerationbeing 1/5th in the sale of land at Marepally, Ghatkesar Mandal, Hyderabad. After deducting the purchase cost of Rs.75.00 lakhs, the assessee has declared profit of Rs.21,30,654/- which is not disputed by the Assessing Officer in the assessment order. Since the Assessing Officer himself has accepted capital gain therefore, again making the addition for the same seized document, in our opinion, is not justified. Therefore, we set aside the order of the learned CIT (A) and direct the Assessing Officer to delete the addition. Accordingly, this ground raised by the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... initiating the proceedings u/s 153A of the I.T. Act inspite of the fact that search was not contemplated in the case of the appellant. 3. The learned Commissioner of Income-Tax (Appeals) ought to have accepted the explanations furnished in respect of each receipt and expenditure without relying on the statement recorded at the time of search. 4. The learned Commissioner of Income-Tax (Appeals) erred in confirming the addition of Rs.1,07,35,000/-holding that the cash receipt to the said extent was not properly explained. 5. The learned Commissioner of Income-Tax (Appeals) erred in confirming the action of the Assessing officer in considering the receipt of Rs.51,80,000/- as unexplained receipt. 6. The learned Commissioner of Income-Tax (Appeals) erred in confirming the addition of Rs.25,87,000 made by the Assessing officer and in holding that the said amount represents unexplained investment in acquisition of the land. 7. The learned Commissioner of Income-Tax (Appeals) erred in Confirming levy of interest u/s 234A(3) and 234B(3) of the I.T. Act. Any other ground that may be urged at the time of hearing. 8. Any other ground that may be urged at the time of hearing". 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared Rs 15 crores as additional income for different A.Ys vide his statement recorded u/s 132(4) on 20.11.2014 and resumed on 21.11.2014. The above additional income of Rs.1,07,35,000/- was once again admitted by the assessee vide his explanation submitted to the DDIT (Inv.) Unit.II(1) Hyderabad which is specifically mentioned at para 11.5 of the said explanation. Since the assessee failed to offer any convincing reply during the assessment proceedings, the Assessing Officer treated the cash receipts of Rs.1,07,35,000/- as his undisclosed income and brought the same to tax. 8. Before the learned CIT (A), the assessee submitted that he along with another co-owner Shri K.Narasimhulu executed the sale deed on 8.12.2011 in favour of Turbovent Industries Private Limited. It was submitted that the entire land is agricultural land situated beyond 8 kms from Hyderabad Municipal Corporation limits. The lands were not converted into non-agriculture. Revenue records also show that the lands are agriculture in nature. The assessee and the co-owner have carried on agricultural operations on the said land and therefore, the asset sold is not a capital asset within the meaning of section 2(14) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reated as the income of the assessee except when such receipt is falling under any particular head of income as provided under the I. T. Act. The Assessing Officer did not consider the nature of the receipt and the head of income under which the amount is assessable. Therefore, the said amount cannot be brought to tax. He submitted that before the Assessing Officer as well as the learned CIT (A), the assessee has stated that he sold the land along with one Shri K. Narsimhulu to Turbovent Industries Ltd vide sale deed dated 8.12.2011 and his part of sale consideration was already admitted as capital gain which was claimed as exempt. He accordingly submitted that the addition made by the Assessing Officer and sustained by the learned CIT (A) is not called for. Referring to various decisions he submitted that an admission is an extremely important piece of evidence but it cannot be said that it is conclusive. In his alternate contention, he submitted that due indexation benefit be given for computing the capital gain. 12. The learned DR, on the other hand, heavily relied on the order of the learned CIT (A). He submitted that even after a period of 2 years from the date of search, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is open to the person who made the admission to show that it is incorrect. We find the assessee in the instant case in the return of income filed by him, has claimed an amount of Rs.1,07,35,000/- as exempt on account of sale of agricultural land. Therefore, we find some force in the argument of the learned Counsel for the assessee that the same cannot be treated as unexplained cash receipts, However, the alternate contention of the learned Counsel for the assessee that the same can be treated as capital gain and due indexation benefit be allowed is acceptable. We, therefore, deem it proper to restore the issue to the file of the Assessing Officer with a direction to consider the amount of receipt at Rs.1,07,35,000/- by the assessee as sale proceeds of a capital asset and allow consequential indexation benefit of the cost of the asset and determine the long-term capital gain after verifying the details. Needless to say, that the Assessing Officer while deciding the issue shall give due opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. The ground raised by the assessee is allowed for statistical purposes. 15. Gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry explanation and the assessee during the course of search had himself declared additional income of Rs.15.00 crores. 16.2 It is the submission of the learned Counsel for the assessee that it is not an un-accounted receipts but the same is on account of sale of land and the assessee has claimed such receipt as exempt income. Further, in absence of maintenance of any books of account by the assessee no addition u/s 68 can be made. 17. The learned Counsel for the assessee drew the attention of the Bench to Page No.2 of the Paper Book where a copy of the seized paper is placed. He submitted that a perusal of the same would show that this is the a/c of the assessee Shri Puajala Mahesh Babu as on 31.5.2011 with Shri T. Jangaiah. He submitted that the totaling of the first 3 entries comes to Rs.51,80,000/- out of which Rs.15,90,000 represents cheque receipts. The fourth entry is return of cheque against payment of cash. The balance amount of Rs.36,80,000/- after deducting the amount of Rs.15.00 lakhs received in cheque from the total of Rs.51,80,000/- was repaid on 28.06.2011 and 13.6.2011. He submitted that the assessee does not maintain any books of account and therefore, the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. As mentioned earlier in the preceding paragraphs, an admission is an importance piece of evidence but it cannot be said that it is conclusive. It is open to the person who made the admission to show that it is incorrect. A perusal of the seized document placed at page 2 of the Paper Book clearly shows that this is the a/c of Shri Pujala Mahesh Babu as on 31.5.2011 with Shri T. Jangaiah. The total of the first three entries i.e., Rs.15,90,000/-, Rs.30,00,000 and Rs.5,00,000/-comes to Rs.51,86,000). The first amount is again received by cheque, whereas the subsequent entries are received in cash. Further, the fourth entry shows that an amount of Rs.15,00,000 was returned by cheque and other amounts were returned by cash. Thus, the account is squared up during the year itself. Further, the assessee does not maintain any books of account. Therefore, the addition of the same u/s 68 in our opinion, is not called for. However, when the assessee is undertaking certain transactions with one Shri T. Jangaiah and he was engaged in the business of real estate therefore, he must have earned some income. Since the total amount of receipts including the cheque receipt is amounting to Rs.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and his AR did not avail of the same, for reasons best known to them. Now, during the course of appellate proceedings, the assessee's AR has tried to explain the investment of Rs.5,32,000/- in land by stating that the said investment was made in the preceding year. However, as pointed out by the Assessing Officer, the consideration paid for the said lands was in cash and no dates are mentioned in the relevant sale deeds regarding the payment of consideration in cash. The assessee s AR has been unable to correlate the payments made with his claim that the said payments nave been reflected in the preceding year When confronted with this fact, the AR has changed his stand, and is now claiming that the consideration was paid out or the amount available with the assessee out of sale of property situated at Indrakaran Village. This change of stance repeatedly is itself sufficient to show that all these explanations being advanced by the appellant's AR are afterthoughts, which have not been substantiated by furnishing any documentary evidences. The explanations advanced are therefore found to be unacceptable, and the addition made by the Assessing Officer is confirmed. As regards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taining the addition made by the Assessing Officer, we do not find any infirmity in the order of the learned CIT (A) on this issue. Accordingly, ground of appeal No.6 is dismissed. 28. Ground of appeal No.7 relates to levy of interest under section 234A(3) and 234B(3) of the I.T. Act which are mandatory and consequential in nature. Accordingly, this ground is dismissed. 29. In the result, appeal in ITA No.132/Hyd/2018 for the A.Y 2012-13 is partly allowed. ITA No.133/Hyd/2019 - A.Y 2013-14 (Assessee). 30. The grounds raised by the assessee for A.Y 2013-14 are as under: "1. The order of the learned Commissioner of Income-Tax (Appeals) is erroneous to the extent it is prejudicial to the appellant. 2. The learned Commissioner of Income-Tax (Appeals) erred in confirming the action of the Assessing officer in initiating the proceedings u/s 153A of the I.T. Act inspite of the fact that search was not contemplated in the case of the appellant. 3. The learned Commissioner of Income-Tax (Appeals) erred in not accepting the submissions made on the mere ground that there was a retraction after a long period. Instead, the learned Commissioner of Income-Tax (Appeals) ought to have con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed material. 4. The appellant craves leave to amend or alter any ground(s) or add a new ground which may be necessary". 32. Ground of appeal No.1, 3 & 11 by the assessee being general in nature are dismissed. 33. In Ground of appeal No.2, the assessee has challenged the validity of 153A proceedings. 33.1 After hearing both the sides, we find the above ground is identical to the ground of appeal No.2 in ITA No.132/Hyd/2018 for the A.Y 2012-13. We have already decided the issue raised by the assessee and the ground raised by the assessee has been dismissed. Following similar reasonings, this ground raised by the assessee is dismissed. 34. Ground of Appeal No.4 relates to the order of the learned CIT (A) in confirming the addition of Rs.26.00 lakhs made by the Assessing Officer. 34.1 Facts of the case in brief are that the Assessing Officer during the course of assessment proceedings noted that Annexure A/PMB/06 is a Black Diary of SBI General Insurance containing written pages numbered from 01 to 51 which was impounded from the PMB premises of the assessee. As per Page No 49 of the above impounded Annexure, the assessee has received Rs.33,50,000- from Sri.M.Ranga Reddy on dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the appellant as well as the observations of the AO in the impugned order. The case records and the seized material have also been perused. It is seen that during the search and seizure proceedings, the assessee had admitted Rs.15 crores as additional income in the statement recorded u/s.132(4). He had filed an Affidavit to this effect before the Investigation wing, and he had even submitted as to how he had arrived at additional income with reference to the seized material. The Return of Income in response to notice u/s.153(A) was filed on 21.11.2016, whereas the search was conducted on 20.11.2014. No proper submissions were made before the Assessing Officer, who, based on seized material, made the additions. It is, therefore, seen that the assessee has taken two years to file the return, and even thereafter, did not furnish any explanation before the Assessing Officer during the course of assessment proceedings. Moreover, the amount in question was worked out by the assessee himself as his Undisclosed Income in the written submissions filed by him before DDIT(Inv). The conclusion therefore cannot be escaped that the explanation now being given is merely an afterthought, which, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49 of the impugned Annexure shows that the assessee has received an amount of Rs.33,50,000/- from Shri Ranga Reddy on different dates out of which an amount of Rs.28,50,000/- was received in cash and Rs.5.00 lakhs by cheque. Since the amount of Rs.21.00 lakhs relates to the financial year 2012-13, the Assessing Officer made addition of the same to the total income of the assessee in absence of satisfactory explanation by the assessee. We find the learned CIT (A) sustained the addition made by the Assessing Officer, the reasons of which have already been reproduced in the preceding paragraph. It is the submission of the learned Counsel for the assessee that out of the above amount of Rs.21.00 lakhs an amount of Rs.15.00 lakhs was received through cheques and an amount of Rs.1 lakhs was received from Shri Ranjit. It is his submission that the amount was received from Mr. M. Ranga Reddy for purchase of a suitable plot which could not materialize and he was subsequently given back the money. Since the assessee does not maintain any books of account and these are not recorded in any books of account, therefore, no addition can be made. 41.1 We find some force in the above argument of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the assessee. While doing so he noted that the assessee, during the course of search action had declared Rs 15 crores as additional income for different assessment years vide his statement recorded u/s 132(4) on 20-11-2014& resumed on 21-11-2014 The above income was once again admitted by the assessee vide his explanation submitted to the DDIT(Inv) Unit lI(1), Hyderabad which is specifically mentioned at para 13.13 of the said explanation. 44. So far as the addition of Rs.81,25,000/- is concerned, it was submitted before the CIT (A) that the Assessing Officer referred to the Annexure A/PMB/6 which contains that the assessee has spent an amount of Rs.81,25,000/- for which the details are not available. It was submitted that the headnote to the details indicates that the amount was paid towards Tulsi Bhavani Nagar, i.e., Chengicherla venture which are one and the same. Therefore, the expenditure mentioned at page No.46 is part of the Page No.51 of the Paper Book. It was submitted that At page No.46, A/PMB/06 the payment to Sri Sham Singh was noted on 27.05.2012 at Rs.25,00,000/-. Sri Sham Singh is the husband of one of the agreement holders Smt.K.Indira Bai. Sri Sham Sing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to such report, he sustained the addition. While doing so, he noted that the amounts in question have been disclosed by the assessee himself in his written submission made before the DDIT (Inv.) and the assessee himself has worked out the undisclosed income. The assessee had offered the additional income of Rs.15.00 lakhs in his statement recorded u/s 132(4) of the Act and had also filed an affidavit to this effect. Therefore, retracting after a long period of time from the offer made earlier in the 13(2)4 statement followed by an affidavit is not a valid retraction. Further, the assessee despite being given sufficient opportunity during the course of search proceeding as well as the assessment proceedings, could not explain such unaccounted receipts which the assessee is now filing during the appeal proceedings. He accordingly sustained the addition made by the Assessing Officer of the two amounts. 46.1 Aggrieved with such order of the learned CIT (A), the assessee is in appeal before the Tribunal. 47. The learned Counsel for the assessee submitted that the seized document, copy of which is placed at Page No.3 of the paper book, shows that the amount of Rs.81,25,000/- consists ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of Rs.81,25,000/- and Rs.56 lakhs respectively on account of undisclosed receipts under the head "Tulsi Bhavani Nagar". We find the learned CIT (A) upheld the above two additions made by the Assessing Officer on the ground that the assessee had made declaration before the Investigation Wing in the statement recorded u/s 132(4) amounting to Rs.15.00 crores and filed affidavit to this effect before the Inv.Wing and therefore, he cannot retract it after a period of 2 years which cannot be considered as a valid retraction within reasonable time. Further the assessee neither during the course of search nor during the course of assessment proceedings could explain the nature of those entries in the seized papers. It is the submission of the learned Counsel for the assessee that he has already offered the income from land at Chengicherla to tax. Further, the seized documents contain both the receipts and payments and the Assessing Officer cannot make addition of both receipts and expenditure. 50 We find some force in the above arguments of the learned Counsel for the assessee. A perusal of the seized document relating to the amount of Rs.81,25,000/- which is placed at Page 3 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing evidence, the assessee failed to furnish any explanation. Hence the amount of Rs 12,00,000/- and Rs.10,00,000/- were brought to tax in the hands of the assessee as his unaccounted expenditure. The Assessing Officer further noted that as per Page No 48 of the impounded Annexure, the assessee has incurred an expenditure of Rs 49 90,000/- under the head Sai Krishna Enclave, Marpelly. Gatkeswar during the Financial Year 2012-13. When the assessee was asked to substantiate the sources of the said expenditure with supporting evidence the assessee failed to furnish any evidence. Hence, the amount of Rs 49,90,000/- was also brought to tax in the hands of the assessee as his unaccounted expenditure. 52. Before the learned CIT (A), the assessee filed elaborate submission. So far as the addition of Rs.12.00 lakhs is concerned it was submitted that the amounts were paid towards Balapur property admeasuring 5 acres 15 guntas. This amount was originally received from Sri Gopal Goud who is one of the partners in the venture at Balapur. The Balapur venture could not be proceeded with due to various reasons and the amount was returned. The said amount was repaid to Sri Gopal Goud. The informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and had also filed an Affidavit to this effect before Investigation wing, which he retracted after a period of two years, which cannot be considered as retraction within 'reasonable time'. In view of the discussion above, and considering the fact that sufficient opportunity has been given to the assessee/appellant during the course of search proceedings as well as during the course of assessment proceedings, and the assessee has chosen not to avail of the same, the explanations regarding the unaccounted expenditure which the assessee has tried to file during appellate proceedings, which are found to be unsubstantiated by any documentary evidence, are found to be unacceptable. The additions made by the Assessing Officer are therefore confirmed, and all the grounds related to this issue are DISMISSED". 56. Aggrieved with such order of the learned CIT (A), the assessee is in appeal before the Tribunal. 57. The learned Counsel for the assessee strongly challenged the order of the learned CIT (A) and filed the following written submission: "Ground Nos.6 are with regard to additions of Rs.12 lakhs, Rs.10 lakhs and Rs.49.90 lakhs. There is a mistake in typing the amount of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d CIT (A). 59. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the AO in the instant case made addition of Rs.12.00 lakhs, 10.00 lakhs and Rs.49.90 lakhs on the basis of the seized documents page Nos 19,50 and 48 of the Paper Book marked as Annexure A-PMB/06 respectively on the ground that as per the seized document, the assessee has incurred certain expenditure for which the assessee could not explain the source properly. We find the learned CIT (A) sustained the addition made by the Assessing Officer the reasons of which have already been reproduced in the preceding paragraph. It is the submission of the learned Counsel for the assessee that he had sufficient source for making the expenditure of Rs.49.90 lakhs which is out of sale consideration of Rs.1,74,33,695/- from the two sale deeds for which the assessee had already offered to tax the capital gain for Rs.22,07,990/-. So far as Rs.12.00 lakhs is concerned, it is his submission that the seized document copy of which is placed at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned can be added which comes to Rs.12,84,000/-. So far as the addition of Rs.10,00,000/- is concerned, the learned Counsel for the assessee could not give any satisfactory explanation for which the same has to be sustained. We, therefore, set aside the order of the learned CIT (A) and direct the Assessing Officer to restrict the addition to Rs.22,84,000/- (i.e. Rs.12,84,000 + Rs.10,00,000) as against Rs.12,10,000, Rs.10,00,000/- and Rs.49,90,000/- respectively. The ground raised by the assessee is accordingly partly allowed. 63. Ground of appeal No.8 relates to the order of the learned CIT (A) in sustaining the addition of Rs.41,84,550/-. 63.1 Facts of the case, in brief, are that during the assessment proceedings the Assessing Officer noted that the assessee has claimed an amount of Rs 41,84,550/- as exempt agricultural income during the year. However, the assessee failed to substantiate his claim and no evidences were furnished in the form of purchase & sale deeds or other evidences even after giving numerous opportunities to the assessee. Hence the amount of Rs 41,84,550/- was held as income from undisclosed sources and added to the total income of the assessee. 64. Bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer should have held that the agricultural land is not an asset within the meaning of section 2(14) of the I.T. Act. Even the learned CIT (A) dismissed the ground raised by the assessee holding that there was no evidence of agricultural activities being carried out and therefore, he is not justified in sustaining the addition. 67. The learned DR, on the other hand, heavily relied on the order of the Assessing Officer and the CIT (A). He submitted that the assessee could not substantiate that he is carrying out any agricultural activities in the said land. Since the assessee purchased and sold the land in less than 13 months and there was no evidence of agricultural activities, therefore, the learned CIT(A) was fully justified in sustaining the addition. 68. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the AO in the instant case made addition of Rs.41,84,550/- on the ground that the assessee has claimed the same as exempt agricultural income during the year and the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total income of the assessee. 70. Before the learned CIT (A) it was submitted that the assessee derived sale consideration of Rs.1,74,33,695/- which is not disputed by the appellant. Further, the Assessing Officer did not consider the cost of acquisition of the property which amounted to Rs.1,52,25,705-. It was argued that the Assessing Officer also made an addition of Rs.1,48,50,000/- representing the expenditure on the Chengicherla venture. In the circumstances, Assessing Officer is not justified in mentioning that that the details of expenditure were not available with him. It was further submitted that the cost is already noted in the return of income filed. Page No.51 of the seized document clearly indicates that the appellant incurred an expenditure of Rs.1,48,50,000/- and, therefore the Assessing Officer is not justified in not allowing any expenditure in this regard. 71. The learned CIT (A) called for a remand report from the Assessing Officer based on the arguments advanced by the assessee and thereafter gave part relief to the assessee by observing as under: "13.4 I have carefully considered the submissions made by the appellant as well 13. as the observations of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lates to relates to levy of interest under section 234A(3) and 234B(3) of the I.T. Act which are mandatory and consequential in nature. Accordingly, this ground is dismissed. ITA No.126/Hyd/2019 - A.Y 2013-14 (Revenue) 75. Ground of appeal 1 & 2 raised by the revenue relates to the order of the learned CIT (A) in deleting the addition made by the Assessing Officer u/s 68 of the I.T. Act. 75.1 Facts of the case, in brief, are that the Assessing Officer during the course of assessment proceedings noticed from the Bank A/c filed by the assessee that the assessee has made cash deposit of Rs.17,77,000/- in the Bank A/c maintained with Kotak Mahindra Bank. On being confronted by the Assessing Officer to explain the source for these cash deposits, the assessee stated that these were business receipts. However, the Assessing Officer rejected the claim of the assessee on the ground that the assessee is neither able to substantiate his claim nor produce any evidence to indicate that these are business receipts. He accordingly made addition of Rs.17,77,000/- to the total income of the assessee. 76. Before the learned CIT (A), it was argued that additions u/s 68 and 69 of the I.T.Act can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which he failed to include in the u/s.153A. The appellant has not raised any ground against the said addition. Since all the receipts and the business income is already taxed, no separate addition is warranted for deposits made in bank accounts. The addition made is therefore ordered to be deleted. The ground related to this issue is ALLOWED". 78 Aggrieved with order of the learned CIT (A), the Revenue is in appeal before the Tribunal. 79. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the AO in the instant case made addition of Rs.17,77,000/- being the cash deposit in the Bank A/c maintained with Kotak Mahindra Bank on the ground that the assessee could not substantiate with evidence to his satisfaction that these cash deposits were business receipts. We find the learned CIT (A) deleted the addition the reasons of which have already been reproduced in the preceding paragraph. We do not find any infirmity in the order of the learned CIT (A) on this issue. Since the assessee in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ource for each expenditure incurred and the learned Commissioner of Income-Tax (Appeals) ought to have held that the Assessing Officer is not justified in making such additions. (Appeals) erred in 7. The learned Commissioner of Income-Tax confirming the addition of Rs.21 lakhs on the ground that the said amount represents undisclosed receipt. 8. The learned Commissioner of Income-Tax (Appeals) erred in confirming the determination of the capital gain at Rs.78,11,904/- the detailed explanation submitted by the without considering appellant". 83. Ground of appeal No.1, 3 and 10 being general in nature are dismissed. 84. Ground of appeal No.2 is identical to ground of appeal No.2 in ITA No.132/Hyd/2018. We have already decided the issue and the ground raised by the assessee has been dismissed. Therefore, following similar reasoning, the ground raised by the assessee challenging the validity of initiation of proceedings u/s 153A is dismissed. 85. In ground of appeal No.4, the assessee has challenged the order of the learned CIT (A) in sustaining the additions of Rs.2,89,38,000/-, Rs.12,50,000/-' Rs.94,50,000/- and Rs.1,55,00,000/- respectively on the ground that they represent u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement recorded u/s 132(4) on 20-11-2014 & resumed on 21-11-2014. The above income was once again admitted by the assessee vide his explanation submitted to the DDIT(Inv) Unit II (1), Hyderabad which is specifically mentioned at para 13.8 of the said explanation. As the assessee failed to offer any convincing reply at the assessment proceedings, these amounts were brought to tax in the hands of the assessee. 89. Before the learned CIT (A), the assessee made elaborate arguments. So far as the addition of Rs.2,89,38,000/- is concerned, it was submitted that the total does not work out to Rs.2,89,38,000/-. The amounts appearing in the seized paper carries the progressive total showing the receipts at different points of time. Such final progressive total of the said receipts is Rs.1,82,94,000/-i.e., Rs.1,58,44,000 and 24,50,000. It was submitted that as per the said seized paper (Page No.10 of the Paper book) the first total of Rs.59,54,000/- represents receipts up to 11.5.2013; then, the second total of Rs.85,44,000/- includes Rs.59,54,000/; then the third such total of Rs.1,06,44,000/- includes Rs.85,44,000/; and then the total of Rs.1,58,44,000/- includes Rs.1,04,44,000/- and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.21 which relates to the account of Sri R.Brahmanna. He is having 20% share in Boduppal property. He paid an amount of Rs.2,25,00,000/- in the said venture. Out of the said amount, Rs.94 lakhs was received in cash from Sri R.Brahmanna. It clearly indicates that the amounts were paid by Sri Brahmanna which is also clear from the seized material that it relates to his share of 20% in Boduppal venture. All these facts clearly indicate that the amounts were neither received by the appellant nor paid by the appellant. They were paid by Sri R.Brahmanna for the venture towards his share. Therefore, the Assessing Officer is not justified in making any addition on this count. It can also be seen that the payments are made by Sri Brahmanna. 94. Based on the arguments advanced by the assessee, the learned CIT (A) called for a remand report from the Assessing Officer. After considering the remand report of the Assessing Officer and the rejoinder of the assessee to such remand report, the learned CIT (A) upheld the addition made by the Assessing Officer on the ground that despite ample opportunities given by the Assessing Officer during the course of post search proceeding, the assessee could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,94,000/- only. 10. Secondly, the said receipts of Rs.1,82,94,000/- represents the sale consideration received on sale of plots Rs.91,47,000/-. The in Sai Krishna Enclave wherein the assessee's share is 50% only 1.e. appellant, in his return of income for the impugned A.Y.2014-15, adopted sale consideration at Rs.99,42,558/- being 50% share in the project and after claiming the purchase cost of Rs.78,11,904/-, admitted capital gain of consideration admitted in the Rs.21,30,654/- return of income is more than the share of the appellant in the receipts appearing in the seized paper and therefore, no addition is warranted on this account. 11.In view of the above factual position, the amount of Rs.2,89,38,000/- cannot be Firstly, added. there is an error in the working in arriving at the receipt of Rs.2,89,38,000/-. Secondly, the said amount represents the consideration received on sale of plots and the appellant had 50% Share which was already admitted in the return of income filed for the asse IT year (A 2014-15. Therefore, the Assessing Officer is not justified in making the addition and ne is not justified in confirming the addition. 12. Cash receipt of Rs.12,50,000/: Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant. The amounts were not received by the appellant. They were not recorded in the books of the appellant. They were not utilized by the appellant. In the circumstances, it cannot be said that the said amount represents the income of the appellant. In such circumstances, it is not correct for the Assessing Officer to make addition of Rs.1,55,00,000/-. 15. It is further submitted that the seized material shows the total payments by Sri R Brahmanna - Rs.2,25,00,000 in respect of Boduppal venture and Rs.20,00,000 in respect of Chengicherla Venture. Further, the payments of Rs.2,25,000/- includes Rs.90,00,000/- paid by Sri Brhammana by cheques and the balance of Rs.1,35,00,000/- by cash. Therefore, the Assessing Officer is not correct to ignore the payments made by Sri Brahmanna by cheques and to consider the cash payments made by him as if they belonged to the assessee. Therefore, the Assessing Officer has wrongly made the addition of Rs. 1,55,00,000 (Rs.1,35,00,000 of Boduppal venture and Rs.20,00,000 of Chengicherla venture) and the learned CIT (A) has wrongly confirmed the said addition without properly appreciating the entries appearing in the seized material. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a suitable property. Since the same was not located, the amount was returned. We find identical issue had also come up in the immediately preceding A.Y and we have already decided the issue by estimating the profit on such receipt @ 10%. We, therefore, direct the Assessing Officer to restrict the addition to Rs.1,25,000/- as against Rs.12,50,000/-. 101. So far as the cash receipt of Rs.94,50,000/- is concerned, we find the amount relates to Ghatkeshwar venture and as per the seized document, copy of which is placed at Page 5 of the Paper Book, the share of the assessee is 40%. Therefore, without going into the argument of provisions of section 68 & 69 of the Act have no application in absence of maintenance of books of account, we accept the alternate contention of the assessee that only 40% of the amount should be added. We direct the Assessing Officer to restrict the addition to 40% of Rs.94,50,000/- as against the whole amount made by the Assessing Officer and sustained by the learned CIT (A). 102. So far as the cash receipt of Rs.1,55,00,000 is concerned, we find from the copy of the seized document placed at page 6 of the Paper Book according to which the amount relates t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hands of the assessee as his unaccounted expenditure. 105. So far as the second Rs.25.00 lakhs is concerned, we find the Assessing Officer noted that Annexure A/PMB/06 is a Green Signet Long Register Deluxe containing written pages numbered from 01 to 21 which was impounded from the business premises of the assessee. As per Page No.7 of the above impounded Annexure, the assessee has paid an amount of Rs.25,00,000/- to Sri Sudhakar. When the assessee was asked to furnish the sources of the said expenditure with supporting evidence, the assessee failed to furnish any. Hence, the amount of Rs 25,00,000/- was brought to tax in the hands of the assessee as his unaccounted expenditure. 106. So far as the first Rs.12.50 lakhs is concerned, we find the Assessing Officer made the addition on the basis of Page No.16 of the seized annexure A/PMB/06 which is a Black Diary of SBI General Insurance containing written pages 1 to 51. The assessee has made cash payment of Rs.10,00,000/- to Sri.C.Narasimha and Rs.2,50,000/- towards Development Cost. When the assessee was asked to furnish the sources of the said expenditure with supporting evidence, the assessee failed to furnish any. Hence, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee while making his arguments drew the attention of the Bench to the following written submissions: "8. Ground Nos.4 & 5: This is with regard to additions made of Rs.2,89,38,000, RS.12.50,000/; Rs. 94,50,000/ and Rs.1,55,00,000- on the ground that they represent unexplained cash receipts. The Assessing Officer made addition of Rs.2,89,38,000/- on the ground that page 10 of Annexure A/PMB/01 shows receipts of Rs.2,89,38,000/-. 9. Firstly, the appellant submits that the total does not work out to Rs.2,89,38,000/-. The amounts appearing in the seized paper carries the progressive total showing the receipts at different points of time. Such final progressive total of the said receipts is Rs.1,82,94,000/- 1.e., Rs.1,58,44,000 24,50,000. It can be seen from the said seized paper (Page No.10 of the Paper book) that the first total of Rs.59,54,000/- represent receipts up to 11.5.2013; then, the second total of Rs.85,44,000/- includes Rs.59,54,000/; then the third such total of Rs.1,06,44,000/- includes Rs.85,44,000/; and then the total of Rs.1,58,44,000/- includes Rs.1,04,44,000/- and the final total of Rs.1,82,94,000/- includes Rs,1,58,44,000/. Therefore, in total, the seized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial d0es not provi0 any such information. Therefore, it cannot be added. The same may please be deleted. 13 Cash receipt of Rs.94.50.000: The relevant Seized material is at page No.5 of the paper book. The heading in the seized document shows as Ghatkesar Venture and share shows as 40%. The total area is mentioned at 7 acres 20 guntas. The appellant submitted that the said venture was proposed to be entered into with one Sri K.Gopal Goud who paid the amount of Rs.94,50,000/-. In fact, the appellant did not maintain any books of account and, therefore, the provisions of Sec.68 have no application. The amount was not invested anywhere and, therefore, the provisions of Sec.69 have no application. Further, the seized material shows about Ghatkesar venture. The venture of 7 acres 20 guntas at Ghatkesar did not take place and the amounts were returned to Sri K.Gopal Goud. Further, the seized material itself is the proof that the amount was received from Sri K.Gopal Goud. Further, the seized material itself is the proof that the amount was received from Sri K.Gopal Goud. The said evidence is a reliable evidence in view of Sec.132(4A) of the Act. Therefore, the Assessing Officer is not j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. So far as the first addition of Rs.25.00 lakhs is concerned, we find the same is based on the seized document, copy of which is placed at Page 11 of the Paper Book, which is a cash receipt dated 20.01.2014 and it is received from one Mr. Sudhakar S/o Late Shri N. Venkatesh. The receipt is also towards sale of agricultural land situated at Bodupal in Ghatkeswar Mandal in Ranga Reddy District. It is the submission of the learned Counsel for the assessee that the said amount is received by one Mr. N. Sudhakar from one Mr. R. Brahmanna Goud for purchase of agricultural land and therefore, this cannot be added to the total income of the assessee. However, the assessee has not explained who is Mr. N. Sudhakar and as to whether he is an employee or agent. It is also not known as to why this receipt was found from the premises of the assessee. Therefore, the submission of the learned Counsel for the assessee that since it was issued by Mr. N.Sudhakar, the addition cannot be made in the hands of the assessee cannot be accepted. The order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Assessing Officer is directed to delete the addition. 118. So far as the 3rd addition of Rs.12,50,000 is concerned, we find the addition is made on the ground that the cash of Rs.10.00 and Rs.2.5 lakhs were paid for the Bhodupal venture. However, a perusal of the seized document placed at Page No.19 of the Paper Book shows that it relates to one Shri K. Gopal Goud having 10% share in the Bhodupal venture. We, therefore, find merit in the argument advanced by the learned Counsel for the assessee that it is not a payment made by the assessee but payment made by Shri K. Gopal Goud for his 10% share in the Bhodupal venture. Therefore, the order of the learned CIT (A) is set aside and the Assessing Officer is directed to delete the addition. 119. So far as the 4th addition of Rs.12.50 lakhs is concerned, we find the Assessing Officer made the addition on the ground that an amount of Rs.12.00 lakhs was paid for the Balapur venture on 20.7.2013 and such expenditure was not explained by the assessee. Although the seized paper according to the Assessing Officer is Rs.12.00 Lakhs, however, he made addition of Rs.12.50 lakhs. It is the submission of the learned Counsel for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee to such remand report, the learned CIT (A) sustained the addition. While doing so, he observed that during the course of search and seizure proceedings, the assessee himself had admitted Rs.15.00 crore as additional income and therefore, after a period of two years, the assessee cannot retract from the declaration made earlier. 123. The learned Counsel for the assessee submitted that the amounts were received towards Tulsi Bhavani Nagar venture which is clear from the seized document. Referring to the copy of the seized document, copy of which is placed at Page 4 of the Paper Book, he submitted that the amounts were received towards Tulsi Bhavani Nagar project. Further, the assessee had admitted 1/5th of the sale consideration of land at Tulsi Bhavani Nagar amounting to Rs.99,42,558/- and admitted the net capital gain of Rs.21,30,654/-. Since the entire sale consideration received as reduced by the cost was offered for the assessment , therefore, again making the addition on the ground that the assessee has received Rs.21.00 lakhs against Tulsi Bhavani Nagar Project is not justified. 124. The learned DR, on the other hand, strongly supported the order of the learned CIT (A). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned CIT (A) in confirming the determination of capital gain of Rs.78,11,904. 126.1 Fact of the case, in brief, are that the Assessing Officer during the course of assessment proceedings noted that the assessee has declared short term capital gain of Rs.21,30,654/- from the sale of land at Marpallyguda. However, despite number of opportunities granted, the assessee did not file any evidence. The Assessing Officer therefore, made addition of Rs.78,11,904/- as income from undisclosed sources after reducing the gain offered by the assessee from the sale consideration of Rs.99,42,558/-. 127. In appeal, the learned CIT (A) upheld the action of the Assessing Officer by observing as under: "11.4 I have carefully considered the submission made by the appellant as well as the observations of the Assessing Officer in the impugned order. The sale consideration of the property is Rs.99,42,558/-, which is not disputed by the Assessing Officer or by the appellant. The Assessing Officer has, however, chosen to tax the entire amount as the assessee's income, whereas the contention of the appellant is that the cost of acquisition of Rs.1,48,00,000/- is added in A.Y 2013-14. Notwithstandin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The ground raised by the assessee is allowed for statistical purposes. 131. Ground of appeal No.9 relates to levy of interest under section 234A(3) and 234B(3) of the I.T. Act which are mandatory and consequential in nature. Accordingly, this ground is dismissed. ITA No.135/Hyd/2019 - A.Y. 2015-16 132. The grounds raised by the assessee for A.Y 2015-16 read as under: "1. The order of the learned Commissioner of Income-Tax (Appeals) is erroneous to the extent it is prejudicial to the appellant. 2. The learned Commissioner of Income-Tax (Appeals) erred in Confirming the action of the Assessing officer in initiating the proceedings u/s 153A of the I.T. Act inspite of the fact that search was not contemplated in the case of the appellant. 3. The learned Commissioner of Income-Tax (Appeals) erred in Confirming the addition made by the Assessing officer of Rs.25 lakhs on the ground that it represents unaccounted receipt. 4. The learned Commissioner of Income-Tax (Appeals) erred in confirming the action of the Assessing officer in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the amount was received as advance against the sale of plot in survey numbers 351 & 354. Therefore, the addition made by the Assessing Officer is not in accordance with law since it is only an advance and the plot was not sold. 138. However, the learned CIT (A) did not accept the contention of the assessee and sustained the addition made by the Assessing Officer. While ding so he noted that the amount in question has been disclosed by the assessee himself in his written submission made before the DDIT (Inv.) and the assessee himself has worked out the undisclosed income and offered the same for taxation. Despite ample opportunity given by the Investigation Wing as well as by the Assessing Officer during the assessment proceedings, the assessee failed to offer any satisfactory explanation. Further, the assessee had also disclosed the additional income of Rs.15.00 crores during the course of search in his statement recorded u/s 132(4) of the Act and retraction of the same after a period of more than 2 years is not a valid retraction. 139. Aggrieved with order of the learned CIT (A), the assessee is in appeal before the Tribunal. 140. The learned Counsel for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of additional income of Rs.15.00 crores after a period of 2 years therefore, it is not a valid retraction. It is the submission of he learned Counsel for the assessee that the amount of Rs.25.00 lakhs, in question, is an advance for sale of plots and not an actual sale and therefore, it cannot be brought to tax. We find some force in the above argument of the learned Counsel for the assessee. A perusal of the seized document copy of which is placed at page 6 of the paper book clearly shows that the amount of Rs.25.00 lakhs received from Smt. Nagini Pramada for sale of open plot in Survey No.351 & 354 having 1625 sq.yards is an advance amount. Since the amount in question is an advance and no sale has taken place, therefore, we find force in the argument of the learned Counsel for the assessee that the same cannot be treated as income. Nothing has been brought on record by the Revenue that the said plot, in question, has in fact been sold during the year. Even otherwise also, without deducting the cost of the plot, the entire addition could not have been added to the total income of the assessee as unexplained cash receipt. However, since the seized document clearly shows that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, brought to tax an amount of Rs.43,32,000/- to the total income of the assessee. 146. Before the learned CIT (A), the assessee made elaborate submissions, based on which the learned CIT (A) called for a remand report from the Assessing Officer. After considering the remand report from the Assessing Officer and the rejoinder of the assessee to such remand report, the learned CIT (A) upheld the various additions made by the Assessing Officer. While doing so, he held that the amounts, in question, have been disclosed by the assessee himself in his written submission made before the DDIT (Inv.) and the assessee himself has worked out the undisclosed income and offered the same for taxation. Further, the assessee was given ample opportunity during the course of search and post search enquiries and even by the Assessing Officer during the course of assessment proceedings. However, the assessee was unable to explain. Further, the assessee himself has declared additional income of Rs.15.00 crores and retraction of the same after a period of more than two years cannot be considered as a retraction within the reasonable time. He accordingly sustained the addition made by the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Goud and others who in turn entrusted the venture to Mansani Constructions and Sri Kishore was the person Incharge of the concern. It can be seen from page 24 up to an amount of Rs.56,30,000/- was incurred during the earlier year. The amount incurred by the developer during relevant financial year was Rs.1,50,000/-. The said expenditure was incurred by the developers consisting of Sri K Gopal Goud and 7 others and Mansani Constructions in the name of Sri Kishore. A Copy of agreement is submitted. The said expenditure was not incurred by the appellant during the year. 11. It is further submitted that the seized documents show the expenditure against each o LE venture undertaken. The details of the expenditure incurred and the persons who incurred the expenditure was all mentioned in the document itself. There is no mention in the seized material that the appellant incurred such an expenditure at any point of time. Therefore, the Assessing Officer is not justified in holding that there was any such expenditure incurred by the appellant but not recorded in the books of account. It is also submitted that the appellant has not maintained any books of account. He offered the capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urce of such expenditure. Therefore, retraction after a period of two years cannot be considered as a valid retraction. He accordingly submitted that the ground raised by the assessee on this issue should be dismissed. 149. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the Assessing Officer in the instant case made addition of Rs. Rs.55.60 lakhs, Rs.197.90 lakhs, Rs.1.0 lakh and Rs.43.32 lakhs respectively on account of undisclosed expenditure on the basis of seized document found during the course of search and the assessee was unable to explain the source of the same. Similarly, addition of Rs.43.32 lakhs was made by the Assessing Officer on the ground that while offering additional income of Rs.15.00 crores, the assessee computed undisclosed income for all the years at Rs.14,56,68,000/- and the balance amount of Rs.43.32 lakhs being the difference between the additional income declared at Rs.15.00 crores and the additional income computed for all the years at Rs.14,56,68,000/- wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Goud and 7 others and entrusted the development work to Mansani Construction in the name of Shri Kishore. According to the learned Counsel for the assessee there is no mention in the seized material that the assessee has incurred any expenditure at any point of time. Therefore, according to him, no addition can be made. 152. We do not find any force in the above argument of the learned Counsel for the assessee. The seized documents were admittedly found from the premises of the assessee where the details of expenditure are mentioned. The assessee was unable to explain the source of such expenditure. Therefore we uphold the order of the learned CIT (A) on this issue by sustaining the addition made by the Assessing Officer. However, the alternate contention of the learned Counsel for the assessee that set off may be given out of the addition if any finally sustained finds merit. We therefore, direct the Assessing Officer to compute the final addition on account of unexplained receipt and give set off of the above addition, if any, surplus is available. Needless to say that the Assessing Officer shall give due opportunity of being heard to the assessee while computing the final ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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