Dy.CIT, Central Circle-7,, Hyderabad v. M Aja Babu, Hyderabad

ITA 1756/HYD/2012 | 2006-2007
Pronouncement Date: 23-04-2014 | Result: Dismissed

Appeal Details

RSA Number 175622514 RSA 2012
Assessee PAN ADKPM7361F
Bench Hyderabad
Appeal Number ITA 1756/HYD/2012
Duration Of Justice 1 year(s) 4 month(s) 17 day(s)
Appellant Dy.CIT, Central Circle-7,, Hyderabad
Respondent M Aja Babu, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 23-04-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 23-04-2014
Assessment Year 2006-2007
Appeal Filed On 06-12-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY JUDICIAL MEMBER ITA NOS. 1755 1756 & 1757/HYD/2012 A.YRS.: 2003-04 2006-07 & 2007-08 DY. COMMISSIONER OF INCOME-TAX APP ELLANT CENTRAL CIRCLE 7 HYDERABAD. VS. M. AJA BABU HYDERABAD. RESPONDENT PAN ADKPM 7361 F REVENUE BY : SHRI SOLGY JOSE T KOTTARAM RESPONDENT BY : SHRI K.C. DEVDAS DATE OF HEARING : 10/04/2014 DATE OF PRONOUNCEMENT : 23/04/2014 ORDER PER CHANDRA POOJARI A.M.: ALL THESE PERTAINING TO ONE ASSESSEE PREFERRED BY T HE REVENUE ARE DIRECTED AGAINST DIFFERENT ORDERS OF CIT(A)-VII HYDERABAD FOR THE ASSESSMENT YEARS 2003-04 2006-07 & 2007-08 . SINCE COMMON ISSUE ARE INVOLVED IN THESE APPEALS THEY WERE CLUBBED AN D HEARD TOGETHER THEREFORE A COMMON ORDER IS PASSED FOR THE SAKE OF CONVENIENCE. ITA NO. 1755/HYD/2012 FOR AY 2003-04 2. GROUND NO. 1 IS AS FOLLOWS: THE LEARNED CIT(A) ERRED IN GIVING RELIEF OF RS. 5 05 000/- OUT OF THE TOTAL ADDITION OF RS. 6 50 000/- BEING THE O PENING BALANCE AS ON 01/04/2002 BASING ON THE WITHDRAWALS MADE AFT ER 01/04/2002 AND PETTY WITHDRAWALS BEFORE 01/04/2002. : ITA NOS. 1755 TO 1757/HYD/12 M. AJA BABU 2 3. THERE WAS A SEARCH AND SEIZURE OPERATION U/S 132 OF THE IT ACT ON THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 24/0 7/2008. CONSEQUENT TO NOTICE U/S 153A OF THE ACT THE ASSES SEE FILED RETURN OF INCOME ON 13/10/2009 DISCLOSING THE DETAILS OF INCO ME WHICH WERE ALREADY DISCLOSED IN THE RETURN FILED ORIGINALLY ON 29/09/2003 WHEREIN THE INCOME WAS DECLARED AT RS. 6 27 500/-. CONSEQU ENT TO THIS ASSESSMENT WAS FRAMED AND THE AO MADE THE FOLLOWING ADDITIONS: 1. TOWARDS OPENING CASH BALANCE OF RS. 6 50 000/- 2. TOWARDS CASH RECEIVED FROM SHRI M. KOTI REDDY(H UF) RS. 200000 3. TOWARDS CASH RECEIVED FROM DAUGHTER - RS.10000 0 4. TOWARDS CASH RECEIVED FROM WIFE - RS. 800000 4. WHEN THE ASSESSEE CARRIED THE MATTER IN APPEAL B EFORE THE CIT(A) CHALLENGING THE AFORESAID ADDITIONS THE CIT (A) DELETED THE SAME. 5. AGGRIEVED BY THE ORDER OF THE CIT(A) THE REVENU E IS IN APPEAL BEFORE US AGAINST THE ACTION OF THE CIT(A) IN DELET ING THE ADDITION ON ACCOUNT OF OPENING CASH BALANCE OF RS. 5 05 000/- A ND RS. 8 00 000/- FROM THE WIFE OF THE ASSESSEE. 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES PERUSED THE RECORD AND HAVE GONE THROUGH THE ORDERS OF THE REVE NUE AUTHORITIES. REGARDING THE FIRST ISSUE OF RS. 5 05 000/- ON ACCO UNT OF OPENING BALANCE WE FIND THAT ENTRY RELATING TO THIS OPENIN G BALANCE WAS NOT APPEARING IN THE BOOKS OF ACCOUNT IN THE ASSESSMENT YEAR UNDER CONSIDERATION AS THIS IS EARLIER YEARS CARRY FORWA RD BALANCE. AS HELD BY THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. PARAMESHWAR BHORA 301 ITR 404 (RAJ.) AMOUNT WHICH WAS CREDITED IN BOOKS OF ACCOUNT OF THE ASSESSEE IN THE PRECEDIN G YEAR CANNOT BE TREATED AS UNEXPLAINED CASH CREDIT OR UNEXPLAINED I NVESTMENT UNDER S. 68/69 IN THE RELEVANT ASSESSMENT YEAR. IN THE PR ESENT CASE SINCE THE OPENING BALANCE OF CASH IS ONLY CARRIED FORWARD ENTRY AND IT IS NOT ITA NOS. 1755 TO 1757/HYD/12 M. AJA BABU 3 APPEARING IN THE FINANCIAL YEAR UNDER CONSIDERATION FOLLOWING THE RATIO LAID DOWN BY THE HONBLE RAJASTHAN HIGH COURT IN TH E SAID CASE WE UPHOLD THE ORDER OF THE CIT(A) IN DELETING THE ADDI TION OF RS. 5 05 000/- MADE BY THE AO ON ACCOUNT OF OPENING CAS H BALANCE. THUS GROUND NO. 2 RAISED BY THE REVENUE IS DISMISS ED. 7. WITH REGARD TO THE DELETION OF RS. 8.00 LAKHS I T WAS THE SUBMISSION OF THE ASSESSEE BEFORE THE DDIT AND THE AO THAT THE AMOUNT OF RS. 8 00 000/- INTRODUCED IN THE CASH FLO W STATEMENT WAS RECEIVED OUT OF THE WITHDRAWAL OF HIS WIFE SMT. PAD MAVATHI FROM HER BUSINESS. IT WAS CLAIMED THAT THE SAME REPRESENTED THE WITHDRAWAL BY ASSESSEES WIFE FROM STONEWARE ENTERPRISES A PROPRI ETARY CONCERN OF SMT. PADMAVATHI WHICH WAS IN THE BUSINESS OF CUTTIN G AND DRESSING OF GRANITE BLOCKS. THE CONCERN WAS ASSESSED TO TAX SH OWING INCOME AS UNDER: AY BUSINESS INCOME AGRICULTURAL INCOME 2006-07 2 83 365 20 000 2005-06 3 39 553 20 000 2004-05 3 49 034 20 000 2003-04 3 35 462 20 000 2002-03 2 54 777 20 000 2001-02 2 43 273 NIL 2000-01 3 11 218 NIL 1999-00 1 98 216 NIL 1998-99 1 18 050 NIL 1997-98 2 99 903 NIL 7.1 THE AR SUBMITTED THAT THE SAID DETAILS WERE FI LED BEFORE THE AO. THE BUSINESS RECEIPTS WERE RECEIVED BY THE PRINCIPA L SUPPLIERS FROM TIME TO TIME BY CHEQUES AND THE SAME WERE DEPOSITED IN THE BANK ACCOUNT. COPY OF THE BANK ACCOUNT WAS FILED BEFORE THE AO SHOWING WITHDRAWAL OF RS. 18 50 000/- FROM THE ACCOUNT OF B ANK OF INDIA AMEERPET BRANCH HYDERABAD VIDE CD ACCOUNT NO. 1000 61 DURING FY 2002-03. THE SAME WAS ALSO PRODUCED BEFORE THE INVE STIGATING OFFICER. THE DETAILS OF WITHDRAWAL AS UNDER: ITA NOS. 1755 TO 1757/HYD/12 M. AJA BABU 4 DATE AMOUNT 18/12/2002 2 50 000 27/12/2002 1 50 000 17/01/2003 4 50 000 05/03/2003 5 00 000 26/03/2003 5 00 000 7.2 THE AO DISBELIEVED THE CLAIM OF THE ASSESSEE AN D OBSERVED THAT ALTHOUGH THE AMOUNTS WERE WITHDRAWN NO EVIDENC E WAS PRODUCED TO SHOW THAT THE SAME WAS OUT OF STONEWARE ENTERPRI SES AND NO BALANCE SHEET WAS FILED ALONG WITH THE RETURN. HE THEREFORE MADE THE ADDITION. 8. ON APPEAL THE CIT(A) DIRECTED THE AO TO DELETE THE ENTIRE ADDITION OF RS. 8 00 000/- BY OBSERVING AS UNDER: 9.2 I HAVE GONE THROUGH THE SUBMISSION OF THE APPEL LANT AND THE OBSERVATION OF THE AO. IT APPEARS THAT THE AO H AS DISBELIEVED THE WITHDRAWALS FROM STONEWARE ENTERPRI SES DESPITE THE FACT THAT THE CONCERN EXISTED AND WAS ASSESSED TO TAX FOR A LONG TIME. THE DETAILS OF RETURNED INCOME WERE FILE D IN COURSE OF ASSESSMENT PROCEEDINGS. IN COURSE OF SEARCH NO EVID ENCE WAS FILED TO SHOW THAT THE WITHDRAWALS WERE APPLIED FOR ANY OTHER PURPOSE. IT WAS FURTHER NOTICED THAT DURING PREVIOU S YEAR 2002- 03 THE APPELLANT INVESTED IN PURCHASE OF LAND AND T HIS NECESSITATED WITHDRAWAL OF CASH FROM THE BANK ACCOU NT. IT MAY ALSO BE OBSERVED THAT IF AO HAD ANY DOUBT ABOUT THE SOURCE OF THE DEPOSITS WHICH WAS UNDISPUTED FACT HE SHOULD HAVE TAKEN APPROPRIATE ACTION AS PER LAW AGAINST SMT. PADMAVAT HI INSTEAD OF DISBELIEVING THE WITHDRAWALS PARTICULARLY WHEN T HE EXISTENCE OF THE CONCERN WHICH WAS ASSESSED TO TAX WAS NOT DI SBELIEVED. IT MAY BE FURTHER STATED THAT AS A PRINCIPLE THE DE PARTMENT HAS ACCEPTED THE INVESTMENT AND AVAILABILITY OF FUND BE LONGING TO APPELLANTS WIFE IN APPELLANTS HAND TO TAX THE DEF ICIT. THEREFORE THE AO SHOULD HAVE ACCEPTED THE CLAIM OF THE APPELL ANT BASING ON DOCUMENTARY EVIDENCE. IT IS ALSO FOUND THAT THE AO HAD NOT CAUSED ANY ENQUIRY TO ASCERTAIN THE EXISTENCE OF TH E CONCERN OWNED BY APPELLANTS WIFE. IN VIEW OF THE ABOVE AN D I FOUND THAT THE AO HAD NOT CAUSED ANY ENQUIRY TO ASCERTAIN THE EXISTENCE OF THE CONCERN OWNED BY APPELLANTS WIFE. IN VIEW OF THE ABOVE AND IN THE ABSENCE OF ANY EVIDENCE THAT THE AMOUNTS WERE UTILIZED FOR ANY OTHER PURPOSE THE CLAIM OF T HE APPELLANT CANNOT BE DISBELIEVED. I THEREFORE DIRECT THE AO T O DELETE THE ENTIRE ADDITION OF RS. 8 00 000/-. 9. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. ITA NOS. 1755 TO 1757/HYD/12 M. AJA BABU 5 10. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES PERUSED THE RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTH ORITIES BELOW. THE CIT(A) OBSERVED THAT AS A PRINCIPLE THE DEPARTMENT HAS ACCEPTED THE INVESTMENT AND AVAILABILITY OF FUND BELONGING TO AP PELLANTS WIFE AND THEREFORE THE AO SHOULD HAVE ACCEPTED THE CLAIM OF THE ASSESSEE BASING ON DOCUMENTARY EVIDENCE. IT IS ALSO FOUND TH AT THE AO HAD NOT CAUSED ANY ENQUIRY TO ASCERTAIN THE EXISTENCE OF TH E CONCERN OWNED BY APPELLANTS WIFE. IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) I N DIRECTING THE AO TO DELETE THE ADDITION OF RS. 8 00 000/- RECEIVED BY T HE ASSESSEE FROM HIS WIFE. THUS THIS GROUND IS DISMISSED. 11. IN THE RESULT APPEAL OF THE REVENUE IN ITA NO. 1755/HYD/2012 IS DISMISSED. ITA NO. 1756/HYD/2012 FOR AY 2006-07 12. GROUND NO. 1 & 4 ARE GENERAL IN NATURE. GROUND NOS. 2 & 3 ARE DIRECTED AGAINST THE ACTION OF THE CIT(A) IN DIRECT ING THE AO TO DELETE THE ADDITION OF RS. 26 33 165/- MADE BASED ON THE S CRIBBLING FOUND IN THE SEIZED MATERIAL EVIDENCING THE UNACCOUNTED PAYM ENTS MADE BY THE ASSESSEE FOR INVESTMENT IN LANDS. 13. THE ASSESSEE MADE THE INVESTMENT OF RS. 26 33 1 65/- IN PLOTS IN GREEN HOME FARM BY WAY OF ACCOUNT PAYEE CHEQUES AND THE DETAILS OF WHICH ARE AS FOLLOWS: CENTRAL BANK OF INDIA KALYAN NAGAR RS.6 00 000 BANK OF INDIA AMEERPET RS.4 00 000 PAID BY CASH RS.1 20 000 RS.11 20 000 LESS: REFUNDED BY THE COMPANY RS. 2 35 000 RS.8 85 000 ========== THE ABOVE AMOUNT COMPRISED OF PAYMENT AS PER DOCUME NT RS. 5 85 000/- AND THE BALANCE AMOUNT OF RS. 3 00 000/- WAS PAID TOWARDS DEVELOPMENT. ITA NOS. 1755 TO 1757/HYD/12 M. AJA BABU 6 13.1 THE AO HAS NOT ACCEPTED ON NOTICING SOME DAILY NOTINGS AT PAGE 1 OF A/MAB/PO/1 AS UNDER FOR FOLLOWING REASON S: REG. FEE TOTAL VALUE OFFICIAL AMT. ACTUAL VALUE 26 790 18 69 540 10 67 000 34 67 7 50 50 415 35 18 167 5 67 000 18 42 750 --------- ------------ ------------ --------- ----- 77 205 53 87 705 16 34 000 53 10 500 16 34 000 DD 77 205 ------------ ------------- 37 53 705 CASH 53 87 705 10 00 000 PAID ------------- 27 53 705 CASH THE ASSESSING OFFICER HAS ADOPTED THAT THE ABOVE NO TINGS PERTAIN TO BOTH SMT PADMAVATHI AND HER SISTER SMT RAMA. OUT OF THE ABOVE THE ASSESSING OFFICER HAS WORKED OUT RS.35 18 165 AS RELATING TO SMT PADMAVATI. OUT OF THIS THE ASSESSIN G OFFICER HAS REDUCED RS.8 85 000/- WHICH COMPRISED OF THE COST O F THE PLOT AND REGISTRATION CHARGES AT RS.5 85 000 AND COST OF IMP ROVEMENT RS.3 00 000/- WHICH ACCORDING TO ASSESSING OFFICER HAVE BEEN ACCOUNTED FOR IN THE BOOKS. THIS HAS LED TO AN ADDI TION OF RS.26 33 165/-. 14. ON APPEAL BEFORE THE CIT(A) THE APPELLANT DENIED TO HAVE PAID THE ABOVE AMOUNTS. IT WAS STATED THAT THESE AR E SCRIBBLING CANNOT BE CO-RELATED WITH ACCURACY. THE APPELLANT P OINTED OUT THE FOLLOWING DISCREPANCIES IN THE NOTINGS. I) THE OFFICIAL AMOUNT MENTIONED IN THE ABOVE NOTIN G DOES NOT TALLY SINCE THE SAME IS ONLY RS.5 33 500 AS PER DOCUMENT AS AGAINST RS.10 67 000/- AS NOTED. II)THE REGISTRATION CHARGES ARE ONLY RS.50 560 AS A GAINST ITA NOS. 1755 TO 1757/HYD/12 M. AJA BABU 7 RS.50 415 NOTED IN THE LOOSE SLIPS. III)NO AMOUNT WAS PAID BY DEMAND DRAFT AS NOTED IN THE NOTINGS. THE AMOUNTS WERE PAID BY CHEQUES AMOUNTING TO RS.10 00 000/- AS NOTED ABOVE. IV) IT WAS POINTED OUT THAT THE NOTINGS CANNOT BE C ONSIDERED AS ACCURATE REFLECTING THE TRUE STATE OF AFFAIRS AS THERE ARE MANY LOOSE ENDS IN THE NOTINGS. V) THERE IS NO DATE AGAINST THE AMOUNTS NOTED IN THE D AIRY. THEREFORE THE PREVIOUS YEAR CANNOT BE ASCERTAIN TO FASTEN A LIABILITY. VI) IT WAS SUBMITTED THAT IN THE FITNESS OF THINGS THE ASSESSING OFFICER SHOULD HAVE SUMMONED THE VENDOR A ND ALLOWED THE APPELLANT TO CROSS EXAMINE HIM TO ELICI T THE TRUTH. THIS HAS NOT BEEN DONE. VII) THE ENTIRE ADDITION IS BASED ON SUSPICION AND SURMISES. 14.1 IT WAS FURTHER STATED AS UNDER: 1. NO ENQUIRY WAS MADE WITH THE SELLERS TO ASCERTAI N THE CORRECT AMOUNT PAID BY THE APPELLANT. 2. THERE IS NOTHING IN THE ORDER TO INDICATE THAT T HE SELLER HAS REFLECTED THE AMOUNT AS NOTED IN THE LOOSE SLIP S. 3.THE ASSESSING OFFICER HAS NOT COLLECTED THE SRO V ALUE TO AT LEAST MAKE A COMPARISON WITH THE DIARY NOTINGS. 4. IT WAS SUBMITTED THAT THE DOCUMENT NOT BEING A S PEAKING ONE LACKS IN ITS CREDIBILITY TO BE UTILIZED AGAINS T THE APPELLANT TO FRAME THE ASSESSMENT. 5. DURING THE COURSE OF SEARCH NO SALE AGREEMENT OR MONEY RECEIPT WAS FOUND TO CORROBORATE THE ABOVE TRANSACTIONS AS NOTED IN THE IN THE DAIRY. 6. IT WAS SUBMITTED THAT THE EVIDENTIARY VALUE OF A REGISTERED DOCUMENT CANNOT BE ASSAILED ON SUSPICION . 7. FROM THE BEGINNING THE APPELLANT AND HIS WIFE HA VE DENIED THE TRANSACTION. DESPITE THIS FACT NO ENQUI RY WAS CAUSED BY THE ADI INVESTIGATION OR BY THE ASSESSING OFFICER TO CORROBORATE THE NOTINGS. 8. ALTHOUGH THERE IS A MENTION THAT SMT RAMA ANOTH ER ITA NOS. 1755 TO 1757/HYD/12 M. AJA BABU 8 PURCHASER WHOSE NAME IS INCLUDED IN THE ABOVE NOTIN G IN THE SEIZED PAPER HAS PAID RS.12 75 750 THE SAME DO ES NOT TALLY IN THE CONSOLIDATED NOTINGS AS INDICATED ABOV E. 14.2 FINALLY IT WAS SUBMITTED THE DOCUMENT IS NOT A SPEAKING ONE AND THEREFORE THE SAME SHOULD NOT BE RELIED UPON TO DRAW ADVERSE CONCLUSION AGAINST THE APPELLANT. 15. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF NOTINGS IN THE DIARY AND OBSERVATIONS OF THE ASSESSING OFFICER THE CIT(A) D EALT THE ISSUE ELABORATELY AS UNDER: 15.1 IT IS A RULE OF EVIDENCE THAT THE BEST EVIDENCE ABO UT THE CONTENTS OF A DOCUMENT IS THE DOCUMENTARY ITSELF. T HIS PRINCIPLE IS EMBODIED IN SECTION 91 OF THE INDIAN EVIDENCE AC T WHICH IS FOLLOWED BY THE COURTS IN THE INCOME TAX PROCEEDING . AS PER THE PROVISIONS OF SECTION 91 WHEN THE TERMS OF A CONTRA CT GRANT OR OTHER DISPOSITIONS OF PROPERTY HAVE BEEN REDUCED IN THE FORM OF A DOCUMENT NO OTHER EVIDENCE IS PERMISSIBLE TO BE GI VEN IN PROOF OF SUCH TERMS. IN THE CASE OF THE APPELLANT IN THE ABSENCE OF CORROBORATIVE EVIDENCE TO SUPPORT THE NOTINGS IN TH E DAIRY THE REGISTERED DOCUMENT IS THE BEST EVIDENCE TO ASCERTA IN THE PRICE AND RECITAL IN THE SAME SHOULD BE ACCEPTED 15.2 IT IS WELL SETTLED LAW IN VARIOUS DECISIONS THAT UN LESS THE PAYMENT OF ON MONEY IS TO BE ASCERTAINED WITH CERTA INTY. IN THIS REGARD RELIANCE IS PLACED ON THE FOLLOWING DECISION S : A) IN THE CASE OF CIT VS SHIVAKANI CO P LTD 159 IT R 71 SC IT WAS HELD THAT UNLESS THERE IS EVIDENCE THAT MORE THAN WHAT WAS STATED IN THE DOCUMENT IS PAID NO HIGHER P RICE CAN BE TAKEN FOR THE BASIS OF COMPUTATION OF A CAPI TAL GAIN. THE ONUS IS ON THE REVENUE TO PROVE THE FACTUM OF P AYMENT OF ON-MONEY. IN THE CASE OF THE APPELLANT NO ATTEM PT HAS BEEN MADE TO CORROBORATE THE NOTINGS IN THE LOOSE S HEETS. THEREFORE THE PRIMARY ONUS WHICH ON THE REVENUE TH AT THERE HAS BEEN UNDERSTATEMENT OF CONSIDERATION HAS NOT BEEN DISCHARGED. ITA NOS. 1755 TO 1757/HYD/12 M. AJA BABU 9 B) IN THE CASE OF BALDEV KISHAN KAPOOR VS ACIT 68 ITD 37 (CHD) (TM) IT WAS HELD THAT OSTENSIBLE SALE CON SIDERATION DISCLOSED IN THE SALE DEED HAS TO BE ACCEPTED BECAU SE IT COULD NOT BE CONTRADICTED BY ADDUCING ANY EVIDENCE ORALLY OR DOCUMENTARY. IN THE CASE OF THE APPELLANT EXCEPT NO TINGS IN THE LOOSE SHEETS THERE IS NO CORROBORATIVE EVIDENCE . C) IN THE CASE OF K.P.VARGHESE VS ITO 1981 131 ITR 597 (SC) IT WAS DECIDED THAT THE BURDEN OF PROVING ACT UAL CONSIDERATION MORE THAN THE DOCUMENT VALUE IS ON TH E ASSESSEE. D) IN THE CASE OF JCIT VS GRAMOPHONE CO OF INDIA L TD 2003 87 ITD 88 IT WAS HELD THAT THE BURDEN IS ON T HE REVENUE TO SHOW THAT THERE IS UNDERSTATEMENT OF CONSIDERATI ON. THIS BURDEN CANNOT BE SHIFTED TO THE ASSESSEE THAT NO AD DITIONAL CONSIDERATION HAS BEEN PAID. IT IS AN IMPOSSIBLE BU RDEN WHICH CANNOT BE DISCHARGED. IN THE CASE OF THE APPELLANT EXCEPT BASING ON THE UNCORROBORATIVE EVID ENCE IN NOTINGS HAS COMPLETELY IGNORED THE DOCUMENT VALUE AND HAS ADOPTED THE CONSIDERATION 15.3 IN THIS REGARD THE OBSERVATIONS OF JURISDICTIONAL I TAT IN THE CASE OF DCIT CENTRAL VS SRI KRISHNA YADAV 2011 12 TAXMANN.COM 4 HYD IS WORTH MENTIONING. THE PRINCIPLES ENUNCIATED BY T HE HON'BLE ITAT CAN BE SUMMARIZED AS UNDER: 'THE ASSESSING OFFICER HAS TO ESTABLISH THE LINK BE TWEEN THESE LOOSE DOCUMENTS AND WITH OTHER BOOKS OF ACCOU NT OF THE ASSESSEE. IT CANNOT BE CONSIDERED ALONE AS CONC LUSIVE EVIDENCE. THE ENTIRE CASE DEPENDS ON THE RULE OF EV IDENCE. THE ASSESSEE HAS EVERY RIGHT TO SHIFT THE BURDEN OF PROOF. THERE IS NO CONCLUSIVE PRESUMPTION. THE ASSESSING O FFICER SHALL BE SPECIFIC ABOUT THE NATURE OF NEXUS OF THE MATERIAL TO THE BUSINESS OF THE ASSESSEE. THE ALLEGATION OF THE DEPARTMENT IS THE MATERIAL THAT REFLECTED UNEXPLAIN ED INVESTMENT OF THE ASSESSEE IN LAND. BUT THEY ARE NO T ABLE TO UNEARTH ANY BACKGROUND WITH REGARD TO THESE LOOSE DOCUMENTS. WITHOUT ANY OF THIS THE DEPARTMENT HAS TAKEN A VIEW THAT THE ASSESSEE IS CARRYING ON UNEXPLAINED INVESTMENT IN LAND. THE DEPARTMENT NOT TRACED AND EXAMINED ANY OF THE PARTIES. THE DEPARTMENT CANNOT DRAW INFERENCE ON THE BASIS OF SUSPICION CONJUNCTURE AN D SURMISE. SUSPICION HOWEVER STRONG CANNOT TAKE PLAC E OF MATERIAL IN SUPPORT OF THE FINDINGS OF THE ASSESSIN G OFFICER. THE ASSESSING OFFICER SHOULD ACT IN A JUDICIOUS MAN NER PROCEED WITH JUDICIAL SPIRIT AND SHOULD COME TO A JUDICIAL CONCLUSION. THE ASSESSING OFFICER IS REQUIRED TO AC T FAIRLY ITA NOS. 1755 TO 1757/HYD/12 M. AJA BABU 10 AS A REASONABLE PERSON AND NOT ARBITRARILY AND CAPR ICIOUSLY. ASSESSMENT MADE SHOULD HAVE ADEQUATE MATERIAL AND I T SHOULD STAND ON ITS OWN LEGS. THE ASSESSING OFFICER WITHOUT EXAMINING ANY PARTY CANNOT COME TO THE CONC LUSION THAT THE ASSESSEE MADE INVESTMENT IN LAND. THE BAS IS FOR ADDITION IS ONLY NOTE BOOK/LOOSE SLIPS. THESE NOTE BOOK/LOOSE SLIPS ARE UNSIGNED DOCUMENTS. THE ASSESS ING OFFICER HAS NOT ESTABLISHED NEXUS BETWEEN THE NOTE BOOK/LOOSE SLIPS AND BUSINESS OF THE ASSESSEE. THER E IS NO NARRATION REGARDING THE ADDRESS OF THE PARTIES. THE RE IS NO VALID SEIZED MATERIAL TO COME TO THE CONCLUSION THA T THE ASSESSEE HAS ACTUALLY MADE AN INVESTMENT AT RS. 69 27 500. THE NOTE BOOK/LOOSE SLIPS RECEIVED FROM SPECIAL INVESTIGATION TEAM IS A DUMB DOCUMENT HAVING NO EVIDENTIARY VALUE NO ADDITION CAN BE MADE IN THE A BSENCE OF CORROBORATIVE MATERIAL. IF THERE IS CIRCUMSTANTI AL EVIDENCE IN ANY FORM THE ADDITION IS TO BE MADE ON THAT BASI S TO THE EXTENT OF MATERIAL AVAILABLE. THE ASSESSEE IS NOT E XPECTED TO EXPLAIN THE LOOSE PAPERS FOUND AS THERE IS NO EVIDENCE OTHER THAN NOTE BOOK/LOOSE SLIPS FOR MAKING INVESTM ENT IN LAND. THE ASSESSING OFFICER HAS FAILED TO PROVE THE INVESTMENT IN LAND. IN OUR OPINION NO ADDITION CAN BE MADE ON THE BASIS OF DUMB DOCUMENTS/NOTE BOOK/LOOSE SLIP S IN THE ABSENCE OF ANY OTHER MATERIAL TO SHOW THAT THE ASSESSEE HAS MADE INVESTMENTS IN LAND. NOTING ON TH E NOTE BOOK/DIARY/LOOSE SHEETS ARE REQUIRED TO BE SUPPORTED/CORROBORATED BY OTHER EVIDENCE AND ARE AL SO INCLUDE THE STATEMENT OF A PERSON WHO ADMITTEDLY IS A PARTY TO THE NOTING AND STATEMENT FROM ALL THE PERSONS WH OSE NAMES THERE ON THE NOTE BOOK/LOOSE SLIPS AND THEIR STATEMENTS TO BE RECORDED AND THEN SUCH STATEMENT UNDOUBTEDLY SHOULD BE CONFRONTED TO THE ASSESSEE AN D HE HAS TO BE ALLOWED TO CROSS EXAMINE THE PARTIES. IN THE PRESENT CASE UNDOUBTEDLY NO STATEMENT FROM PARTIES WERE RECORDED. ENTIRE ADDITION IN THE HANDS OF THE ASSES SEE ON THE BASIS OF UNCORROBORATED WRITINGS IN THE LOOSE P APERS FOUND BY THE SPECIAL INVESTIGATION TEAM. THE EVIDEN CE ON RECORD IS NOT SUFFICIENT TO SUPPORT THE REVENUE'S C ASE THAT ASSESSEE MADE INVESTMENT IN LAND. THE CIRCUMSTANCES SURROUNDING THE CASE ARE NOT STRONG ENOUGH TO JUSTI FY THE ADDITIONS'. IN THE CASE OF THE APPELLANT EXCEPT RELYING ON NOT INGS IN THE LOOSE SLIPS NO ATTEMPT HAS BEEN MADE TO CORROBORAT E THE NOTINGS WITH INDEPENDENT EVIDENCE. THE PARTIES TO T HE TRANSACTIONS PARTICULARLY THE VENDOR HAS NOT EXAMIN ED. IN EVERY TRANSACTION THERE IS A CIRCLE CONCERNING TWO PARTIES. IT IS NOT KNOWN WHETHER THE VENDOR HAS DISCLOSED THE ITA NOS. 1755 TO 1757/HYD/12 M. AJA BABU 11 CONSIDERATION AS NOTED IN THE DAIRY. THEREFORE MER ELY ON THE BASIS OF PRESUMPTION AND SOME UNCORROBORATED NO TINGS ADDITIONS CANNOT BE SUSTAINED. 15.4 IN THE CASE OF ACIT VS SATYAPAL WASSAN 2007 295 ITR 80 (352) JABALPUR CERTAIN GUIDING PRINCIPLES HAVE BEE N EVOLVED IN THE MATTER OF EVALUATION OF THE CONTENTS OF A LOOSE SHEETS. THESE ARE: A) A DOCUMENT FOUND DURING THE COURSE OF A SEARCH MUS T BE A SPEAKING ONE AND WITHOUT ANY SECOND INTERPRETATION MUST REFLECT ALL THE DETAILS ABOUT THE TRANSACTION OF TH E ASSESSEE. ANY GAP IN VARIOUS COMPONENTS FOR THE CHARGE MUST B E FILLED UP BY THE ASSESSING OFFICER THROUGH INVESTIGATION AND CORRELATION WITH OTHER MATERIALS FOUND IN COURSE OF SEARCH OR O N INVESTIGATION. IT IS THE DUTY OF THE ASSESSING OFFI CER TO CARRY OUT NECESSARY INVESTIGATION BY CORRELATING THE NOTINGS WITH OTHER DOCUMENTS REGULAR BOOKS OF ACCOUNTS AND RECORDS KEP T BY THE ASSESSEE. B) AS A QUASI JUDICIAL AUTHORITY THE ASSESSING OFFICE R HAS TO SATISFY HIMSELF ON THE BASIS OF COGENT MATERIAL EITHER FOUN D IN COURSE OF SEARCH OR ON POST SEARCH ENQUIRIES THAT THE TRAN SACTION RECORDED IN A DOCUMENT IS A REAL BUT NOT AN IMAGINA RY ONE AND THE SAME HAS ACTUALLY TAKEN PLACE. A) THE DOCUMENT SHOULD SPEAK EITHER OUT OF ITSELF O R IN THE COMPANY OF OTHER MATERIAL FOUND OF INVESTIGATION. B) THE SPEAKING FROM THE DOCUMENT SHOULD BE LOUD C LEAR AND UNAMBIGUOUS AND IF IT IS NOT IT IS ONLY A DUMP DOCUMENT AND NO CHARGE CAN BE LEVIED ON THE BASIS OF THE SAM E. C) THE ABOVE PRINCIPLES WERE FOLLOWED IN THE CASE O F ACIT ITA NOS. 1755 TO 1757/HYD/12 M. AJA BABU 12 VS DR.KAMAL PRASAD SINGH 3 ITR (TRIB) 533 PATNA. IF THE ABOVE PRINCIPLES ARE CONSIDERED IN THE CONTE XT OF THE CASE IN HAND IT WOULD BE FOUND THAT THE BASIS OF ASSESSMEN T IS SOLELY BASED ON SOME UNCORROBORATED AND INCOHERENT NOTINGS . THE INCONSISTENCIES IN THE NOTINGS HAVE BEEN BROUGHT OU T BY THE APPELLANT AS MENTIONED IN THE PREVIOUS PARAS. THERE FORE IT IS DIFFICULT TO LEVY TAX ON THE SAID AMOUNT ON THE BAS IS OF THESE NOTINGS. 15.5 WHEN ADDITIONS ARE MADE ON THE BASIS OF NOTINGS IN THE DOCUMENT WHICH HAVE NO DATE SUCH ADDITIONS ARE NOT SUSTAINABLE. THIS WAS DECIDED IN THE CASE OF DEVILAL GHERILAL SHAH VS DCIT 1995 127 CTR (AHM) 135. IT CANNOT BE DENIED THAT T HE FIRST PRINCIPLE TO LEVY TAX IS THE PREVIOUS YEAR IS THE FIRST AND FOREMOST REQUIREMENT. IN THE ABSENCE OF PREVIOUS YEAR THE A MOUNTS NOTED IN THE LOOSE SLIPS CANNOT BE A BASIS OF ASSESSMENT. THEREFORE THE PROVISIONS OF SECTION 4 OF THE ACT CANNOT BE COMPLI ED WITH. IN THIS CASE IN THE ABSENCE OF DATES OR THE PREVIOUS YEAR IN WHICH THE TRANSACTION COULD HAVE TAKEN PLACE THERE COULD BE NO ASSESSMENT. 15.6 IN THE CASE OF CIT VS KHAZAN SINGH & BROTHERS 2007 304 ITR 243 (P&H) THE HON'BLE COURT SUSTAINED THE DECIS ION OF ITAT WHEREIN IT WAS HELD THAT IF ENTRIES MADE IN A DAIRY ARE IMAGINARY NO RELIANCE COULD BE PLACED ON SUCH ENTRIES FOR MAK ING ADDITION WITHOUT CORROBORATING THE TRANSACTION NOTED IN THE DAIRIES. 15.7 IN THE CASE HARISH DAULATRAM IMANI VS DCIT (INV) MU MBAI 2008 24 SOT 541 IT WAS HELD THAT UNCORROBORATED NOT INGS IN THE LOOSE PAPER CANNOT BE THE BASIS OF ANY ADDITION. IN THE CASE OF THE APPELLANT NO ATTEMPT HAS BEEN MADE BY MAKING EN QUIRY WITH THE VENDOR AND UNILATERALLY FIXING THE LIABILITY ON THE APPELLANT. 15.8 IN THE CASE OF CIT VS MOULALI KUMAR SHAH 2008 307 I TR 137 ITA NOS. 1755 TO 1757/HYD/12 M. AJA BABU 13 (GUJ) IT WAS HELD THAT IN THE ABSENCE OF CORROBORAT IVE MATERIAL AND EXAMINATION OF PARTIES AND ADDITION IS NOT POSSIBLE . IN SUCH CASES ONUS HEAVILY LIES IN THE REVENUE TO PROVE WITH CORR OBORATIVE EVIDENCE THAT ENTRIES IN THE SEIZED DAIRIES ACTUALL Y REPRESENTED THE UNDISCLOSED INCOME OF THE ASSESSEE. 15.9 THE CIT(A) HELD THAT IN THE LIGHT OF THE ABOVE JUDICIAL PRECEDENTS IN THE ABSENCE OF ANY ENQUIRY BY THE AS SESSING OFFICER AND THE INCONSISTENCIES FOUND IN THE NOTING S THE ADDITION CANNOT BE SUSTAINED. HE THEREFORE DIRECTED THE ASS ESSING OFFICER TO DELETE THE ADDITION OF RS.26 33 185/-. 16. AGGRIEVED BY THE ORDER OF THE CIT(A) THE REVEN UE IS IN APPEAL BEFORE US. 17. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES PERUSED THE RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTH ORITIES BELOW. IN THIS CASE THE ADDITION WAS MADE BY THE AO BASED ON THE LOOSE PAPER AND THE SAME IN OUR VIEW CANNOT BE CONSIDERED AS CONCLUSIVE EVIDENCE. AS HELD BY THE CIT(A) IN THE IMPUGNED ORD ER EXCEPT RELYING ON THE NOTINGS IN THE LOOSE SLIPS NO ATTEMPT HAS B EEN MADE TO CORROBORATE THE NOTINGS WITH INDEPENDENT EVIDENCE. THE PARTIES TO THE TRANSACTION PARTICULARLY THE VENDOR HAS NOT EXAMINE D. IN EVERY TRANSACTION THERE IS A CIRCLE CONCERNING TWO PARTIE S. IT IS NOT KNOWN WHETHER THE VENDOR HAS DISCLOSED THE CONSIDERATION AS NOTED IN THE DIARY. THEREFORE MERELY ON THE BASIS OF PRESUMPTIO N AND SOME UNCORROBORATED NOTINGS ADDITIONS CANNOT BE MADE. IN OUR OPINION THE DELETION OF ADDITION BY THE CIT(A) IS JUSTIFIED AND NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT(A). THE FOLLO WING CASES SUPPORT THE ACTION OF THE CIT(A): 1. CIT VS. ANIL BHALLA [20100 322 ITR 191 (DEL.) - WHEREIN HELD THAT THE NOTINGS RECORDED ON THE LOOSE SHEET O F PAPER DO NOT REPRESENT ANY EXPENDITURE INCURRED BY THE ASSES SEE DIRECTOR AND THAT THE ENTRIES RELATED TO THE COMPANY IN AS M UCH AS THE ITA NOS. 1755 TO 1757/HYD/12 M. AJA BABU 14 ASSESSEE COULD EXPLAIN FROM THE BOOKS OF THE COMPAN Y THAT THESE PROJECTS WERE UNDERTAKEN BY IT AND UPHELD TH E DELETION OF THE IMPUGNED ADDITION UNDER S. 69C FINDINGS ARRIVE D AT BY THE TRIBUNAL ARE PURE FINDINGS OF FACTS AND THE SAME DO NOT WARRANT ANY INTERFERENCE. 2. ACIT VS. J.P. MORGAN INDIA (P) LTD. [2011] 46 SO T 250 (MUM.) 3. CIT VS. DINESH JAIN HUF [2012] 211 TAXMAN 23 (DE LHI) 4. CIT VS. JAIPAL AGGARWAL [2013] 212 TAXMAN 1 (DE LHI) WHEREIN IT WAS HELD THAT DUMB DOCUMENTS SEIZED IE FROM WHICH NOTHING COULD BE CLEARLY UNDERSTOOD CANNOT FORM A JUSTIFIED BASE FOR MAKING ADDITIONS TO INCOME OF THE ASSESSEE . 17.1 IN VIEW OF THE ABOVE DISCUSSION WE ARE OF THE VIEW THAT THE ADDITION MADE BY THE ASSESSING OFFICER BASED ON THE LOOSE PAPER WHICH IS NOT A CONCLUSIVE EVIDENCE AND THEREFORE THE SAME IS NOT SUFFICIENT TO MAKE THE ADDITION. IN OUR OPINION NO ADDITION CAN BE MADE ON THE BASIS OF DUMB DOCUMENTS/NOTE BOOK/LOOSE SLIPS IN THE ABSENCE OF ANY OTHER MATERIAL TO SHOW THAT THE ASSESSEE HAS MADE INVESTMENTS IN LAND. NOTING ON THE NOTE BOOK/D IARY/LOOSE SHEETS ARE REQUIRED TO BE SUPPORTED/CORROBORATED BY OTHER EVIDENCE AND ARE ALSO INCLUDE THE STATEMENT OF A PERSON WHO ADMITTEDLY IS A PARTY TO THE NOTING AND STATEMENT FROM ALL THE PERSONS WHOSE NAMES THERE ON THE NOTE BOOK/LOOSE SL IPS AND THEIR STATEMENTS TO BE RECORDED AND THEN SUCH STATE MENT UNDOUBTEDLY SHOULD BE CONFRONTED TO THE ASSESSEE AN D HE HAS TO BE ALLOWED TO CROSS EXAMINE THE PARTIES. THE VENDOR HAS NOT EXAMINED IN THIS CASE. THEREFORE WE DO NOT FIND AN Y INFIRMITY IN THE ORDER OF THE CIT(A) IN DIRECTING THE ASSESSING OFFICER TO DELETE THE ADDITION MADE ON THE BASIS OF LOOSE PAPE R AND THE ORDER OF THE CIT(A) IS HEREBY UPHELD DISMISSING THE GROUNDS RAISED BY THE REVENUE ON THIS ISSUE. 18. IN THE RESULT APPEAL IN ITA NO. 1756/HYD/2012 I S DISMISSED. ITA NOS. 1755 TO 1757/HYD/12 M. AJA BABU 15 ITA NO. 1757/HYD/2012 FOR AY 2007-08 19. GROUND NO. 1 & 4 ARE GENERAL IN NATURE. GROUND NOS. 2 & 3 ARE DIRECTED AGAINST THE ACTION OF THE CIT(A) IN DIRECT ING THE AO TO DELETE THE ADDITION OF RS. 31 04 000/- MADE BASED ON THE S CRIBBLING FOUND IN THE SEIZED MATERIAL EVIDENCING THE UNACCOUNTED PAYM ENTS MADE BY THE ASSESSEE FOR INVESTMENT IN LANDS. 20. THE ASSESSEE MADE THE INVESTMENT OF RS. 31 04 000/- IN PLOTS IN INFO CITY MALAPUR FROM ONE SRI B. CHENCHALL REDD Y. IN THIS TRANSACTION THE ASSESSEE HAD ACTUALLY PAID RS. 3 6 8 000/- TO THE VENDOR. OUT OF THIS RS. 2 36 000 WAS PAID BY DD AND RS. 1 32 000/- WAS PAID BY CASH WHICH INCLUDES REGISTRATION CHARGE S. 20.1 THE AO HAS ADOPTED THE CONSIDERATION AT RS. 34 30 000/- ON THE BASIS OF THE FOLLOWING NOTINGS FOUND IN COURSE OF S EARCH. THIS IS EXTRACTED IN PAGE 4 OF THE AO AS UNDER: 440 X 400 17 60 000 24 5 90 000 400 X 4175 16 70 000 3 36 000 2 00 000 ------------ -------------- 34 30 000 34 30 000 30 26 000 ADVANCE 2 00 000 42 000 4 45 000 ------------ ------------- 32 30 000 34 72 000 34 71 000 DD PART 3 36 000 -------------- 28 94 000 KPR 4 40 000 50 000 24 49 000 4 40 000 42 000 5 500 ------------- -------------- 24 91 000 4 45 000 ITA NOS. 1755 TO 1757/HYD/12 M. AJA BABU 16 ADOPTING THE SALE PRICE AT RS. 34 72 000/- INCLUSIV E OF REGISTRATION CHARGES SUPPOSED TO HAVE BEEN PAID TO THE VENDOR T HE AO HAS ONLY GIVEN CREDIT TO RS. 3 68 000/- AS PER THE DOCUMENT. THE BALANCE AMOUNT OF RS. 31 04 000/- WAS ADDED TO THE TOTAL IN COME OF THE ASSESSEE. 21. BEFORE THE CIT(A) THE ASSESSEE MADE THE SUBMIS SIONS AS MADE IN AY 2007-08. THE CIT(A) AFTER CONSIDERING TH E SUBMISSIONS OF THE ASSESSEE IN THE SIMILAR MANNER AS DECIDED IN AY 2006-07 DIRECTED TO DELETE THE ADDITION OF RS. 30 04 000/- . 22. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 23. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES PERUSED THE RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTH ORITIES REVENUE AUTHORITIES. THE ISSUE IN DISPUTE IS MATERIALLY IDE NTICAL TO THAT OF THE ISSUE DECIDED IN AY 2006-07 VIDE PARAS 13 TO 17.1. THEREFORE FOLLOWING THE CONCLUSIONS DRAWN THEREIN WE UPHOLD T HE ORDER OF THE CIT(A) AND DISMISS THE GROUNDS RAISED BY THE REVENU E ON THIS ISSUE. 24. IN THE RESULT APPEAL IN ITA NO. 1757/HYD/2012 IS DISMISSED. 25. TO SUM UP ALL THE APPEALS OF THE REVENUE UNDER CONSIDERATION ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 23.04.2014 SD/- SD/- (SAKTIJIT DEY) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT M EMBER HYDERABAD DATED:23/04/2014 KV ITA NOS. 1755 TO 1757/HYD/12 M. AJA BABU 17 COPY TO:- 1) DCIT CENTRAL CIRCLE 7 8 TH FLOOR AAYAKAR BHAVAN LB STAIDUM ROAD BASHEERBAGH HYDERABAD 500 004. 2) SRI M. AJA BABU FLAT NO. 304 SAI SURABHI AWAS APARTMENTS B-9 MADHURA NAGAR HYDERABAD . 3) THE CIT(A)-VII HYDERABAD 4) THE CIT(CENTRAL) HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE I.T.A. T. HYDERABAD.