DCIT, Hyderabad v. Sri C.Krishna Yadav, Hyderabad

ITA 954/HYD/2007 | 2002-2003
Pronouncement Date: 31-03-2011 | Result: Dismissed

Appeal Details

RSA Number 95422514 RSA 2007
Assessee PAN APRIL2001T
Bench Hyderabad
Appeal Number ITA 954/HYD/2007
Duration Of Justice 3 year(s) 6 month(s) 27 day(s)
Appellant DCIT, Hyderabad
Respondent Sri C.Krishna Yadav, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 31-03-2011
Date Of Final Hearing 30-03-2011
Next Hearing Date 30-03-2011
Assessment Year 2002-2003
Appeal Filed On 03-09-2007
Judgment Text
ITA NOS.954 & 955/1026/H/2007 SHRI C. KRISHNA YADAV HYDERABAD 1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO.954/H/2007 ASSESSMENT YEAR 2002-03 ITA NO.955/H/2007 ASSESSMENT YEAR 2002-03 THE DCIT CENTRAL CIRCLE 1 VS. HYDERABAD SHRI C. KRISHNA YADAV HYDERABAD (PAN K-701) APPELLANT RESPONDENT ITA NO.1026/H/2007 ASSESSMENT YEAR 2002-03 SHRI C. KRISHNA YADAV VS. HYDERABAD (PAN K-701) THE ACIT CENTRAL CIRCLE 1 HYDERABAD APPELLANT RESPONDENT APPELLANT BY : SHRI K.J. RAO RESPONDENT BY : SHRI SAI PRASAD ORDER PER CHANDRA POOJARI ACCOUNTANT MEMBER: THESE ARE CROSS APPEALS PREFERRED BY THE REVENUE AS WELL AS BY THE ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS PASSED BY THE CIT(A) I AND PERTAINS TO THE ASSESSMENT YEAR 2002-03. 2. THE REVENUE IS IN APPEAL BEFORE US IN ITA NO.9 55/H/2007 WITH REGARD TO DELETION OF ADDITION MADE BY THE ASSESSIN G OFFICER IN RESPECT OF HIMAYAT NAGAR PROPERTY AND ERRA MANZIL PROPERTY TH OUGH HE HAS CONFIRMED THE ADDITIONS IN RESPECT OF SHIVAM LAND AND BHARKAT PURA LAND EVEN THESE ADDITIONS ARE ON THE SAME FOOTING. FURTHER THE RE VENUE IS APPEAL BEFORE US IN ITA NO.954/H/2007 WITH REGARD TO DELETION OF PEN ALTY BY THE CIT(A) MADE U/S 271 (1) (C ) OF THE IT ACT WITHOUT ANY VALID RE ASONS. ITA NOS.954 & 955/1026/H/2007 SHRI C. KRISHNA YADAV HYDERABAD 2 3. THE ASSESSEE IS IN APPEAL BEFORE US IN ITA NO. 1026/H/2007 WITH REGARD TO SUSTAINING ADDITIONS IN RESPECT OF S HIVAM LAND AND BHARKATPURA LAND. 4. BRIEF FACTS OF THE ISSUE AS STATED BY THE ASSE SSEE ARE THAT THE ASSESSEE WAS AN MLA OF ANDHRA PRADESH DURING THE AS SESSMENT YEAR UNDER CONSIDERATION. HE WAS RECEIVING SALARY OF RS .2 500/- P.M. AND OTHER ALLOWANCES LIKE CONSTITUENCY ALLOWANCE CONVEYANCE ALLOWANCE TELEPHONE ALLOWANCE ETC. IT WAS THE UNDERSTANDING OF THE ASS ESSEE IS THAT THESE ALLOWANCES WERE NOT TAXABLE. THE UNDERSTANDING WAS ALSO SUPPORTED BY THE FACT THAT NO INCOME TAX WAS DEDUCTED AT SOURCE BY T HE RELEVANT AUTHORITY. ACCORDING TO THE ASSESSEE ALL THESE ALLOWANCES WERE SPENT BY THE ASSESSEE FOR THE PURPOSE FOR WHICH THEY WERE GRANTED AND THE ASSESSEE DID NOT GET ANY MONETARY BENEFIT FROM OUT OF ANY OF THESE ALLOW ANCES. 5. THE ASSESSEES RESIDENTIAL PREMISES WERE SEARC H BY THE SPECIAL INVESTIGATION TEAM WHICH WAS ENQUIRING INTO THE DU PLICATE STAMP PAPER SCAM. THE ASSESSEE WAS ALSO ARRESTED ON 18.3.2003 AND WAS PUT IN IMPRISONMENT AT THE CENTRAL JAIL YERAWADA. NOBODY INCLUDING HIS OWN KITH AND KIN WAS ALLOWED TO CONTACT HIM EITHER PER SONALLY OR OTHERWISE. HE WAS ALSO NOT ALLOWED TO COMMUNICATE ANYTHING TO ANY BODY FOR A PERIOD OF MORE THAN 2 YEARS. 6. ACCORDING TO THE ASSESSING OFFICER AS MENTION ED IN THE ASSESSMENT ORDER THE INCOME TAX OFFICER RECEIVED COPIES OF THE SEIZED MATERIAL FROM THOSE AUTHORITIES DESCRIBED BY THE AS SESSING OFFICER AS SOME SCRIBBLING SLIPS AND THE ASSESSING OFFICERS ON AN ALYSING THE SEIZED MATERIAL REVEALED THAT THE ASSESSEE MADE INVESTMENTS IN VARI OUS IMMOVABLE PROPERTIES THE TOTAL INVESTMENT BEING RS.69 27 500 /-. ITA NOS.954 & 955/1026/H/2007 SHRI C. KRISHNA YADAV HYDERABAD 3 7. ACCORDING TO THE ASSESSING OFFICER AS STATED IN THE ASSESSMENT ORDER A NOTICE U/S 148 OF THE IT ACT DATED 26.3.20 04 WAS SERVED ON 28.3.2004 AND AS THERE WAS NO COMPLIANCE FOR THIS N OTICE A NOTICE U/S 142(1) DT 28.12.2004 WAS ISSUED REQUIRING THE ASSES SEE TO FILE THE RETURN OF INCOME FOR THE ASSESSMENT UNDER CONSIDERATION ON OR BEFORE 17.1.2005. SINCE THERE WAS NO COMPLIANCE INSPECTOR OF IT ATTA CHED TO HIS OFFICE WAS DEPUTED FOR SERVICE OF THE NOTICE U/S 142(1) DT 8.2 .2005 AND THE INSPECTOR IN HIS REPORT MENTIONED THAT: THE ASSESSEE IS IN ERAWADA CENTRAL JAIL PUNA MAH ARASHTRA STATE SINCE 1 YEARS NOBODY IS READY TO TAKE THE NOTICE OR L ETTER AND REFUSED TO TAKE THE SAME ACKNOWLEDGE THE SAME. IT IS ALSO ASC ERTAINED THAT THE ASSESSEE HAS NOT AUTHORISED ANY ONE TO TAKE THE NOT ICES OR LETTERS IN HIS ABSENCE. THE NOTICES WERE RETURN BY THE INSPECT OR. THE ASSESSING OFFICER SENT A LETTER DATED 28.2.2005 TO THE SUPERI NTENDENT CENTRAL JAIL YERAWADA REQUESTING HIM TO GET THE ENCLOSED N OTICE U/S 142(1) AND ANOTHER LETTER DATED 28.2.2005 ADDRESSED TO THE ASS ESSEE SERVED ON THE ASSESSEE . 8. THE LETTER ADDRESSED TO THE ASSESSEE WHICH REQ UIRED THE APPEARANCE OF THE ASSESSEE ALONG WITH THE SPECIFIE D PARTICULARS IN THE OFFICE OF THE ASSESSING OFFICER AT HYDERABAD ON 23.3.2005 WAS STATED TO HAVE BEEN SERVED ON HIM ON 21.3.2005 IN THE YERAWADA JAIL. LATER THE ASSESSMENT WAS COMPLETED U/S 144 OF THE IT ACT WHEREIN THE ASS ESSING OFFICER COMPLETED THE ASSESSMENT AS FOLLOWS: 1. INCOME FROM SALARY AND OTHER ALLOWANCES ESTIMATED AT RS.40 000/- P.M. RS.5 00 000 2. INCOME FROM UNEXPLAINED SOURCE OF INCOME MADE IN INVESTMENT : A) SHIVAM LAND RS.15 27 500 B) HIMAYAT NAGAR LAND RS.30 00 000 C) BARKATPURA LAND RS.10 00 000 D) ERRAMANZIL LAND RS.14 00 000 ------------------ ITA NOS.954 & 955/1026/H/2007 SHRI C. KRISHNA YADAV HYDERABAD 4 RS.69 27 500 ------------------ TOTAL RS.74 27 500 ============ 9. FURTHER THE PENALTY PROCEEDINGS U/S 271(1) (C ) OF THE IT ACT WAS INITIATED BY THE ASSESSING OFFICER AND PENALTY WAS LEVIED VIDE ORDER DATED 27.9.2005 AT RS.22 46 295/- . THE ASSESSEE CARRIED THE APPEALS ON BOTH QUANTUM ISSUE AND PENALTY SEPARATELY TO THE CIT(A). THE CIT(A) DIRECTED THE ASSESSING OFFICER TO RE-COMPUTE THE INCOME FROM SAL ARY AT RS.25 000/- P.M. FROM APRIL 2001 TO DECEMBER 2001 AND RS.40 000/- P .M. FROM JANUARY 2002 TO MARCH 2002 TOTALLING OF RS.3 45 000/- FOR THE FY 2001-02. FURTHER THE ADDITION REGARDING SHIVAM LAND AT RS.1 5 27 500 WAS REDUCED TO RS.7 63 750/- HIMAYAT NAGAR LAND AT RS.30 LAKH S WAS DELETED BHARKATPURA LAND AT RS.10 LAKHS CONFIRMED AND ERRAM ANZIL LAND AT RS.14 LAKHS DELETED BY THE CIT(A). REGARDING PENALTY TH E CIT(A) DELETED THE SAME. AGAINST THE DELETION OF ADDITION IN RESPECT OF HIM AYATNAGAR AND ERRAMANZIL PROPERTIES AND PENALTY THE REVENUE IS IN APPEAL BE FORE US. THE ASSESSEE IS IN APPEAL BEFORE US IS REGARDING SUSTAINING OF ADDI TION IN RESPECT OF SHIVAM LAND AND BHARKATPURA LAND. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E MATERIALS ON RECORD. IN THIS CASE THE ADDITION IS MADE ON T HE BASIS OF SCRIBBLING ON LOOSE PAPERS. OTHER THAN LOOSE PAPERS THERE AR E NO CORROBORATIVE MATERIALS. WE HAVE ALSO CAREFULLY GONE THROUGH THE SE DOCUMENTS. THESE MATERIALS WERE FOUND AT THE ASSESSEES HOUSE BY THE SPECIAL INVESTIGATION TEAM WHICH WAS ENQUIRING INTO THE DUP LICATE STAMP PAPER SCAM. THE ASSESSEE SUBMITTED BEFORE THE LOWE R AUTHORITIES THAT IT DOES NOT BELONG TO HIM. HE ALSO STATED THAT T HE MATERIAL WAS NOT RECOVERED IN HIS PRESENCE OR HIS FAMILY MEMBERS. H E CATEGORICALLY STATED THAT HE DOES NOT KNOW THE CONTENT OF THE BOO K. HOWEVER THE ITA NOS.954 & 955/1026/H/2007 SHRI C. KRISHNA YADAV HYDERABAD 5 LOWER AUTHORITIES DREW INFERENCE FROM THESE DOCUMEN TS THAT THE ASSESSEE HAS MADE INVESTMENTS AT RS.69 27 500/- AS STATED ABOVE. 11. HOWEVER ACCORDING TO THE ASSESSING OFFICER THE LOOSE PAPER REFLECTS UNACCOUNTED INVESTMENTS OF THE ASSESSEE. IT IS ALSO FACT THAT ON THE BASIS OF INFORMATION GATHERED FROM THESE SEIZED MATERIALS THE ASSESSMENT WAS FRAMED. FROM THE ACT AND CONDUCT OF THE ASSESSEE THE REVENUE AUTHORITY DREW CONCLUSION THAT HE INTEND TO CONCEAL CONCEALED THE INCOME. THE ONLY CONTENTION OF THE ASSESSEE IS THA T THE LOOSE DOCUMENTS ARE NOTHING BUT DUMB DOCUMENTS CANNOT BE USED FOR THE P URPOSE OF ASSESSMENT WITHOUT ANY CORROBORATIVE EVIDENCE. 12. BUT THE ISSUE BEFORE US NOW REMAINS IS THAT WHETHER THE LOOSE DOCUMENTS CAN BE THE BASIS FOR IMPUGNED ADDIT ION. AS SEEN FROM THE LOOSE DOCUMENTS AS SCANNED BY THE CIT(A) IN HIS ORD ER THESE ARE JUST HAND WRITTEN LOOSE DOCUMENTS. THERE IS NO PRESUMPTION I N LAW THAT THE ASSESSING OFFICER IS SUPPOSED TO DISCHARGE TAX LIABILITY BY D IRECT EVIDENCE ONLY AND THEREUPON DETERMINED THE INCOME BEYOND DOUBT. THE INCOME OF THE ASSESSEE IS TO BE COMPUTED BY THE ASSESSING OFFICER ON THE BASIS OF AVAILABLE RECORD. IN MANY A TIME IT IS VERY IMPORTANT TO HA VE DIRECT EVIDENCE OR CONCLUSIVE EVIDENCE TO PROVE TO DETERMINE THE INCOM E. WHEN THE ASSESSEE GIVES AN EVASIVE REPLY TO THE ASSESSING OFFICER HE HAS NO CHOICE BUT TO TAKE ESTIMATION OF THE INCOME. THE ONLY THING IS IT SHO ULD BE REASONABLE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. IT SHOULD N OT BE BASED ON CONJUNCTURES AND SURMISES. AS OF NOW MATERIAL CONS IDERED BY THE ASSESSING OFFICER FOR MAKING THE ADDITION IS ONLY THE LOOSE D OCUMENTS WITHOUT ANY SIGNATURE OF THE PARTIES CONCERNED. IN VIEW OF THI S WE HAVE TO CONSIDER THE DOCUMENTS TO SEE WHETHER IT IS ENOUGH TO MAKE ADDIT ION. IN OUR OPINION THIS DOCUMENT IS ONLY NOTE BOOK/LOOSE SLIPS. IT IS SOME PIECE OF EVIDENCE TO COME TO CONCLUSION THAT THERE IS SOME INCOME TO THE ASSESSEE BUT IT IS NOT CONCLUSIVE. THE ASSESSING OFFICER HAS TO ESTABLIS H THE LINK BETWEEN THESE ITA NOS.954 & 955/1026/H/2007 SHRI C. KRISHNA YADAV HYDERABAD 6 LOOSE DOCUMENTS AND WITH OTHER BOOKS OF ACCOUNTS OF THE ASSESSEE. IT CANNOT BE CONSIDERED ALONE AS CONCLUSIVE EVIDENCE. THE ENTIRE CASE DEPENDS ON THE RULE OF EVIDENCE. THE ASSESSEE HAS EVERY RI GHT TO SHIFT THE BURDEN OF PROOF. THERE IS NO CONCLUSIVE PRESUMPTION. IN THE PRESENT CASE THE ASSESSEE WAS NOT CONFRONTED WITH THESE DOCUMENTS AS THE ASSE SSEE WAS IN IMPRISONMENT. IN SPITE OF THIS THE ASSESSING OFF ICER PROCEEDED TO CONCLUDE THAT THESE MATERIALS ARE CONCLUSIVELY BELONGED TO T HE ASSESSEE. THE ASSESSING OFFICER SHALL BE SPECIFIC ABOUT THE NATUR E OF NEXUS OF THE MATERIAL TO THE BUSINESS OF THE ASSESSEE. THE ALLEGATION OF THE DEPARTMENT IS THE MATERIAL THAT REFLECTED UNEXPLAINED INVESTMENT OF T HE ASSESSEE IN LAND. BUT THEY ARE NOT ABLE TO UNEARTH ANY BACKGROUND WITH RE GARD TO THESE LOOSE DOCUMENTS. WITHOUT ANY OF THIS THE DEPARTMENT HA S TAKEN A VIEW THAT THE ASSESSEE IS CARRYING ON UNEXPLAINED INVESTMENT IN L AND. THE DEPARTMENT NOT TRACED AND EXAMINED ANY OF THE PARTIES. THE DE PARTMENT CANNOT DRAW INFERENCE ON THE BASIS OF SUSPICION CONJUNCTURE AN D SURMISE. SUSPICION HOWEVER STRONG CANNOT TAKE PLACE OF MATERIAL IN SUP PORT OF THE FINDINGS OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHOUL D ACT IN A JUDICIOUS MANNER PROCEED WITH JUDICIAL SPIRIT AND SHOULD COM E TO A JUDICIAL CONCLUSION. THE ASSESSING OFFICER IS REQUIRED TO A CT FAIRLY AS A REASONABLE PERSON AND NOT ARBITRARILY AND CAPRICIOUSLY. ASSES SMENT MADE SHOULD HAVE ADEQUATE MATERIAL AND IT SHOULD STAND ON ITS OWN LE GS. THE ASSESSING OFFICER WITHOUT EXAMINING ANY PARTY CANNOT COME TO THE CONC LUSION THAT THE ASSESSEE MADE INVESTMENT IN LAND. THE BASIS FOR AD DITION IS ONLY NOTE BOOK/LOOSE SLIPS. THESE NOTE BOOK/LOOSE SLIPS ARE UNSIGNED DOCUMENTS. THE ASSESSING OFFICER HAS NOT ESTABLISHED NEXUS BET WEEN THE NOTE BOOK/LOOSE SLIPS AND BUSINESS OF THE ASSESSEE. THERE IS NO NA RRATION REGARDING THE ADDRESS OF THE PARTIES. THERE IS NO VALID SEIZED MATERIAL TO COME TO THE CONCLUSION THAT THE ASSESSEE HAS ACTUALLY MADE AN I NVESTMENT AT RS.69 27 500/-. THE NOTE BOOK/LOOSE SLIPS RECEIVED FROM SPECIAL INVESTIGATION TEAM IS A DUMB DOCUMENT HAVING NO EVI DENTIARY VALUE NO ADDITION CAN BE MADE IN THE ABSENCE OF CORROBORATIV E MATERIAL. IF THERE IS ITA NOS.954 & 955/1026/H/2007 SHRI C. KRISHNA YADAV HYDERABAD 7 CIRCUMSTANTIAL EVIDENCE IN ANY FORM THE ADDITION IS TO BE MADE ON THAT BASIS TO THE EXTENT OF MATERIAL AVAILABLE. THE ASSESSEE IS NOT EXPECTED TO EXPLAIN THE LOOSE PAPERS FOUND AS THERE IS NO EVIDENCE OTHE R THAN NOTE BOOK/LOOSE SLIPS FOR MAKING INVESTMENT IN LAND. THE ASSESSING OFFICER HAS FAILED TO PROVE THE INVESTMENT IN LAND. IN OUR OPINION NO A DDITION CAN BE MADE ON THE BASIS OF DUMB DOCUMENTS/NOTE BOOK/LOOSE SLIPS I N THE ABSENCE OF ANY OTHER MATERIAL TO SHOW THAT THE ASSESSEE HAS MADE I NVESTMENTS IN LAND. NOTING ON THE NOTE BOOK/DIARY/LOOSE SHEETS ARE REQU IRED 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 STATEMENT U NDOUBTEDLY SHOULD BE CONFRONTED TO THE ASSESSEE AND HE HAS TO BE ALLOWED TO CROSS EXAMINE THE PARTIES. IN THE PRESENT CASE UNDOUBTEDLY NO STATE MENT FROM PARTIES WERE RECORDED. ENTIRE ADDITION IN THE HANDS OF THE ASS ESSEE ON THE BASIS OF UNCORROBORATED WRITINGS IN THE LOOSE PAPERS FOUND B Y THE SPECIAL INVESTIGATION TEAM. THE EVIDENCE ON RECORD IS NO T SUFFICIENT TO SUPPORT THE REVENUES CASE THAT ASSESSEE MADE INVESTMENT IN LAN D. THE CIRCUMSTANCES SURROUNDING THE CASE ARE NOT STRONG ENOUGH TO JUSTI FY THE ADDITIONS. IN VIEW OF THIS WE ARE OF THE OPINION THAT NO ADDITION CAN BE MADE ON ACCOUNT OF INVESTMENT IN PROPERTIES AT RS.69 27 500/-. SINCE WE HAVE HELD THAT NO ADDITION IS POSSIBLE ON ACCOUNT OF LOOSE DOCUMENTS WITH REGARD TO INVESTMENT IN LAND THE DELETION OF ADDITION BY THE CIT(A) IS JUSTIFIED AND ACCORDINGLY NO PENALTY U/S 271(1) (C ) ALSO CANNO T BE LEVIED AND THE PENALTY ORDER ALSO CANNOT BE SURVIVED. ITA NOS.954 & 955/1026/H/2007 SHRI C. KRISHNA YADAV HYDERABAD 8 13. IN THE RESULT REVENUE APPEALS ARE DISMISSED AND THE ASSESSEE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT O N:31.3. 2011 SD/- SD/- G.C. GUPTA CHANDRA POOJA RI VICE PRESIDENT ACCOUNTANT MEMBE R DATED THE 31 ST MARCH 2011. COPY FORWARDED TO: 1. THE DCIT CENTRAL CIRCLE I HYDERABAD 2. SHRI C. KRISHNA YADAV 18-5-757 OLD LALDARWAJ A MEKALABANDA HYDERABAD 3. THE CIT(A)-I HYDERABAD 4. THE CIT HYDERABAD 5. THE DR ITAT HYDERABAD NP