DCIT, Central Circle-3(1), Hyderabad, Hyderabad v. A Ashoksimha Reddy, Hyderabad, Hyderabad

ITA 998/HYD/2015 | 2008-2009
Pronouncement Date: 30-11-2017 | Result: Allowed

Appeal Details

RSA Number 99822514 RSA 2015
Assessee PAN ADHPA3602Q
Bench Hyderabad
Appeal Number ITA 998/HYD/2015
Duration Of Justice 2 year(s) 3 month(s) 30 day(s)
Appellant DCIT, Central Circle-3(1), Hyderabad, Hyderabad
Respondent A Ashoksimha Reddy, Hyderabad, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Department
Tags No record found
Order Result Allowed
Bench Allotted B
Tribunal Order Date 30-11-2017
Last Hearing Date 15-11-2017
First Hearing Date 22-11-2017
Assessment Year 2008-2009
Appeal Filed On 31-07-2015
Judgment Text
ITA NOS 962 966 TO 968 AND 998 OF 2015. PAGE 1 OF 15 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH HYDERABAD BEFORE SMT. P. MADHAVI DEVI JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN ACCOUNTANT MEMBER ITA NOS.962 TO 968/HYD/2015 (ASSESSMENT YEARS: 2005-06 TO 2011-12) SHRI A. ASHOK SIMHA RE DDY HYDERABAD PAN; ADHPA 3602 Q VS DCIT CENTRAL CIRCLE 8 HYDERABAD (APPELLANT) (RESPONDENT) ITA NOS.998/HYD/2015 (ASSESSMENT YEAR: 2008-09) DCIT CENTRAL CIRCLE 3(1) HYDERABAD VS SHRI A. ASHOK SIMHA REDDY HYDERABAD PAN; ADHPA 3602 Q (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V. RAGHURAM FOR REVENUE : SHRI J. SIRI KUMAR DR O R D E R PER SMT. P. MADHAVI DEVI J.M. ITA NOS. 962 AND 966 TO 968/HYD/2015 ARE ASSESSEES APPEALS FOR THE A.YS 2005-06 TO 2011-12 AGAINST THE ORDER OF THE CIT (A) FOR THE RESPECTIVE A.YS WHILE ITA NO.998/HY D/2015 IS REVENUES APPEAL AGAINST THE ORDER OF THE CIT (A) F OR THE A.Y 2008- 09. DATE OF HEARING: 22.11 . 2017 DATE OF PRONOUNCEMENT: 30 . 1 1 .2017 ITA NOS 962 966 TO 968 AND 998 OF 2015. PAGE 2 OF 15 2. THE LEARNED COUNSEL FOR THE ASSESSEE HAS FILED A CHART DEPICTING VARIOUS ISSUES ARISING IN ALL OF THESE AP PEALS AND IT IS SEEN THAT MOST OF THE ISSUES ARE REPETITIVE IN ALL THE YEARS. THEREFORE WE ARE DISPOSING OF THE APPEALS ON THE B ASIS OF THE ISSUES ARISING THEREFROM. 3. THE FIRST ISSUE IN THE APPEALS FOR A.YS 2005-06 TO 2008-09 IS THE ADDITION OF THE AMOUNT MENTIONED IN THE PROMISSORY NOTES FOUND IN THE COURSE OF SEARCH AS U NEXPLAINED CASH CREDITS. BRIEF FACTS RELATING TO THIS ISSUE AR E THAT DURING THE COURSE OF SEARCH U/S 132 OF THE ACT IN THE CASE OF THE ASSESSEE AND OTHERS ON 2.9.2010 CERTAIN PROMISSORY NOTES FO R THE AMOUNT LENT BY HIM WERE FOUND. THE ASSESSEES CONTENTION T HAT THESE PROMISSORY NOTES WERE OBTAINED AS SECURITY FROM THE CHIT MEMBERS WAS NOT ACCEPTED BY THE AO AND ACCORDINGLY HE MADE THE ADDITION. THE CIT (A) ON THE OTHER HAND HELD THAT THEY ARE NOT CASH CREDITS BUT REPRESENT UNEXPLAINED INVESTM ENT AND IS TO BE BROUGHT TO TAX U/S 69. AGGRIEVED THE ASSESSEE I S IN APPEAL BEFORE US FOR THE RELEVANT A.YS. THE LEARNED COUNSE L FOR THE ASSESSEE SUBMITTED THAT SIMILAR ISSUE HAD ARISEN IN ASSESSEES BROTHERS CASE AND ITAT HAS REMANDED THE ISSUE TO T HE AO WITH SOME DIRECTIONS AND RECONSIDERATION OF THE ISSUE ON MERITS. THE LEARNED DR HOWEVER RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD WE FIND THAT IN THE CASE OF A. PANDU RAN GA REDDY THE TRIBUNAL AT PARA 13 TO 15 HAS HELD AS UNDER: ITA NOS 962 966 TO 968 AND 998 OF 2015. PAGE 3 OF 15 ADDITION BASED ON PROMISSORY NOTES: 13. AO MADE ADDITION OF RS. 6 LAKHS IN AY. 2009-10 AND 1 50 000/- IN AY. 2010-11 ON TWO PROMISSORY NOTES F OUND IN THE COURSE OF SEARCH PROCEEDINGS. AO WAS OF THE OPI NION THAT AN AMOUNT OF RS. 6 LAKHS WAS LENT ON 03-07-2008 AGA INST CASH RECEIPT TO SHRI A. RAJAVARDHAN REDDY WHICH WA S BROUGHT TO TAX IN AY. 2009-10 AND AN AMOUNT OF RS. 1 50 000/- LENT ON 31-12-2009 AGAINST PROMISSORY NOTE TO SHRI V. RAVI KUMAR WAS BROUGHT TO TAX IN AY. 2010-11. SIMILAR TO THE 'AGREEMENTS OF SALE' SEIZED BY THE DEPARTMENT ASSE SSEE CONTENDED THAT PROMISSORY NOTES WERE ALSO OBTAINED FOR SECURING THE CHIT BUSINESS. ON THE REASON THAT ASSE SSEE HAS NOT SUBSTANTIATED WITH ANY DOCUMENTARY EVIDENCE LD. CI T(A) CONFIRMED ABOVE AMOUNTS. 14. BEFORE US LD. COUNSEL SUBMITTED THAT IN THE UN -ORGANISED CHIT BUSINESS CONDUCTED BY THE ASSESSEE AND HIS FAM ILY MEMBERS SOMETIMES SECURITY WAS TAKEN IN THE FORM O F AGREEMENT OF SALE IF THE BIDDERS ARE HAVING PROPERT IES AND SOME TIMES BY WAY OF PROMISSORY NOTES FOR A HIGHER AMOUNT THAN WHAT WAS LENT. IT WAS SUBMITTED THAT THESE TWO TRANSACTIONS ALSO PERTAIN TO CHIT BUSINESS. IT WAS FURTHER SUBMITTED THAT THE RELEVANT PRO-NOTES WERE SEIZED B Y THE DEPARTMENT AND ARE AVAILABLE WITH THEM. LD. DR SUPP ORTED THE ORDERS OF THE LD. CIT(A). 15. ON THIS ISSUE ALSO WE ARE OF THE OPINION THAT AO HAS NOT MADE OUT ANY ENQUIRIES. IT IS ACCEPTED THAT ASSESSE E IS CONDUCTING UN-ORGANISED CHIT BUSINESS AND AS DISCUS SED EARLIER FOR THE 'AGREEMENTS OF SALE' FOUND DURING THE COURS E OF SEARCH THE MODUS OPARANDI HAS BEEN ACCEPTED. IN VIEW OF TH AT ASSESSEE'S CONTENTIONS CANNOT BE BRUSHED ASIDE WITH OUT PROPER ENQUIRY. SINCE THE PROMISSORY NOTES ARE AVAILABLE W ITH THE DEPARTMENT (BY THIS TIME THEY WOULD HAVE BEEN TIME BARRED) IT IS NECESSARY THAT AO MAKES NECESSARY ENQUIRIES W ITH THE PERSONS WHO EXECUTED THE PROMISSORY NOTES TO ASCERT AIN WHETHER ASSESSEE HAS ADVANCED CASH OR OBTAINED THEM TOWARDS SECURITY FOR THE CHIT AVAILED BY THEM. UNLESS PROPE R ENQUIRY IS MADE IT WOULD NOT BE PROPER TO REFUSE ASSESSEE'S C ONTENTIONS WHEN PART OF THE CONTENTIONS WITH REFERENCE TO 'AGR EEMENTS OF SALE' WERE ACCEPTED. IN VIEW OF THIS WE ARE OF THE OPINION THAT NECESSARY ENQUIRIES WITH THE PERSONS WHO EXECUTED P ROMISSORY NOTES IS REQUIRED TO BE CONDUCTED BY THE AO TO KNOW THE EXACT NATURE OF A TRANSACTION AND THEN TAKE A DECISION WH ETHER THE AMOUNT CAN BE BROUGHT TO TAX AS UNEXPLAINED INVESTM ENT/ ITA NOS 962 966 TO 968 AND 998 OF 2015. PAGE 4 OF 15 UNEXPLAINED ASSET OR NOT. FOR THIS PURPOSE WE SET ASIDE THE ORDERS OF THE AO AND CIT(A) ON THIS ISSUE AND RESTO RE THE MATTER TO THE FILE OF AO FOR FRESH ENQUIRY. ASSESSE E SHOULD BE GIVEN DUE OPPORTUNITY AND ASSESSEE IS FREE TO FURNI SH THE NECESSARY EVIDENCES IN SUPPORT OF HIS CLAIM. WITH T HESE DIRECTIONS/OBSERVATIONS THE GROUNDS IN THESE TWO Y EARS ARE CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. FOR THE REASONS GIVEN IN ITAT ORDER IN THE CASE OF SHRI A. PANDU RANGA REDDY IN ITA NOS.797/HYD/2015 TO 803/HYD/2015 FOR THE A.YS 2005-06 TO 2011-12 VIDE ORDER DATED 21.9.2016 AS ABOVE THIS ISSUE IN THE ASSESSEES APPEALS FOR 2005-06 T O 2008-09 IS REMITTED TO THE FILE OF THE AO WITH SIMILAR DIRECTI ON. 5. THE SECOND ISSUE IN ALL THE A.YS IS THE TREATMEN T OF AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. WE FIND THAT THIS ISSUE ALSO HAS ARISEN IN THE CASE OF A. PANDUR ANGA REDDY AND ITAT IN PARA 6 OF ITS ORDER HAS HELD AS UNDER: 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. THERE IS NO DISPUTE WITH REFERENCE TO THE FACT THAT ASSESSEE OW NS AGRICULTURAL LAND AND ALSO PURCHASED 4.71 GUNTAS OF LAND IN SEPTEMBER 2004. CONSIDERING THE VALUE OF THE LA ND PURCHASED AND THE EXTENT OF AGRICULTURAL INCOME OFF ERED THE AO'S CONTENTIONS SEEMS TO BE PARTIALLY CORRECT. SINCE ASSESSEE IS NOT IN A POSITION TO FURNISH ANY EVIDEN CE TO SUBSTANTIATE THE INCOMES EARNED AND RETURNED WE HA VE NO OPTION THAN TO ESTIMATE THE AGRICULTURAL INCOME AT A REASONABLE BASIS. ASSESSEE'S SUBMISSION THAT IT HAS GROWN PADDY GRAPES AND VEGETABLES ON A PIECE OF LA ND OF 1.27 ACRES CANNOT BE ACCEPTED AS IT IS NOT POSSI BLE TO CULTIVATE ALL THE THREE IN SMALL PIECE OF LAND. HOW EVER SINCE ASSESSEE OWNS SOME AGRICULTURAL LAND IN THE IMPUGNED YEARS WE ARE OF THE OPINION THAT INCOME A T RS. 10 000/- PER ACRE CAN BE JUSTIFIED AS A REASONA BLE INCOME EARNED ON THE SAID LANDS. ACCORDINGLY AO IS DIRECTED TO ACCEPT INCOME AT RS. 10 000/- PER ACRE FOR AY. 2005-06 2006-07 2007-08. THE BALANCE OF THE INCOME IN EACH YEAR IS CONFIRMED AS 'INCOME FROM OT HER SOURCES' AS WAS DONE BY THE AO. ASSESSEE'S GROUNDS ARE PARTLY ALLOWED . ITA NOS 962 966 TO 968 AND 998 OF 2015. PAGE 5 OF 15 FOR THE ABOVE REASONS AND ALSO IN VIEW OF THE FACT THAT THE ASSESSEE IS THE OWNER OF AGRICULTURAL LAND AND HAS CLAIMED TO HAVE GROWN SIMILAR CROPS WE ARE INCLINED TO DIRECT THE AO TO ACCEPT RS.10 000 PER ACRE AS AGRICULTURAL INCOME. THIS ISS UE IS ALSO TREATED AS PARTLY ALLOWED. 6. THE THIRD ISSUE IN THE APPEALS FOR THE A.YS 2006 -07 TO 2011-12 IS THE DISALLOWANCE OF THE ASSESSEES CLAIM OF DEDUCTION U/S 80C OF THE ACT. THE ASSESSEE HAS CLAIMED THE MA XIMUM SUM OF RS.1.00 LAKHS ALLOWABLE AS A DEDUCTION U/S 80C O F THE ACT FOR ALL THE A.YS. THE ASSESSEE CLAIMED LIC PAYMENT AND ALSO THE PAYMENT OF HOUSING LOAN AS A DEDUCTION U/S 80C OF T HE ACT. THE AO OBSERVED THAT THE ASSESSEE DID NOT SUBMIT PROOF OF PAYMENT OF LIC PREMIUM. FURTHER REGARDING THE REPAYMENT OF HO USING LOAN PRINCIPAL HE OBSERVED THAT THE LOAN WAS SAID TO HA VE BEEN TAKEN FOR COMMERCIAL BUILDING AND SINCE THE DEDUCTION IS AVAILABLE ONLY FOR A RESIDENTIAL HOUSE HE HELD THAT ASSESSEES CL AIM IS NOT ALLOWABLE. THUS HE BROUGHT THE ENTIRE AMOUNT OF RS .1.00 LAKH TO TAX BY DISALLOWING THE CLAIM OF DEDUCTION U/S 80C O F THE ACT. AGGRIEVED THE ASSESSEE FILED APPEALS BEFORE THE CI T (A) ALONG WITH PROOF OF LIC PREMIUM AND INTEREST CERTIFICATE OF BA NK OF INDIA NARRATING THE PURPOSE OF THE LOAN AS FOR THE PURCHASE/RECONSTRUCTION OF HOUSE/FLATS. ON APPEAL CIT (A) ACCEPTED THE PAYMENT OF LIC PREMIUM BUT AS REGARDS THE REPAYMENT OF HOUSING LOAN SHE HELD THAT THE ASSESS EE HAS NOT FURNISHED ANY RENTAL AGREEMENT TO SUBSTANTIATE HIS CLAIM THAT IT IS A RESIDENTIAL PROPERTY. IN VIEW OF THE SAME THE CI T(A) RESTRICTED THE CLAIM OF DEDUCTION U/S 80C OF THE ACT TO LIC PR EMIUM ONLY ITA NOS 962 966 TO 968 AND 998 OF 2015. PAGE 6 OF 15 AND THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE RELIEF DENIED BY THE CIT (A). 7. THE LEARNED COUNSEL FOR THE ASSESSEE HAS DRAWN O UR ATTENTION TO THE CERTIFICATE ISSUED BY THE BANK TO STATE THAT THE LOAN WAS TAKEN FOR A RESIDENTIAL PROPERTY AND THERE FORE REPAYMENT OF PRINCIPAL OF SUCH LOAN IS TO BE ALLOWED U/S 80C OF THE ACT SUBJECT TO THE MAXIMUM OF RS.1.00 LAKH. WE FIND THA T THE CIT (A) HAS HELD THAT THE INTEREST CERTIFICATE GIVEN BY BAN K OF INDIA DOES NOT ESTABLISH THAT THE SAID PROPERTY WAS USED AS A COMMERCIAL PROPERTY AND ALSO THAT THE ASSESSEE HAS NOT FILED A NY RENTAL AGREEMENT DURING THE APPELLATE PROCEEDINGS TO SUBST ANTIATE HIS CLAIM. 8. WE HAVE GONE THROUGH THE CERTIFICATE ISSUED BY T HE BANK OF INDIA AND FIND THAT THE LOAN IS GIVEN FOR P URCHASE OF A FLAT. THE NATURE OF THE SAID FLAT PURCHASED BY THE ASSESS EE IS NOT MENTIONED IN THE CERTIFICATE. IT COULD BE A RESIDEN TIAL FLAT ALSO. IN VIEW OF THE SAME WE DEEM IT FIT AND PROPER TO REMA ND THIS ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO VERIFY TH E NATURE OF THE PROPERTY AND IF IT IS FOUND TO BE A RESIDENTIAL PR OPERTY PURCHASED BY THE ASSESSEE AGAINST WHICH THE ASSESSEE HAS BEEN GIVEN LOAN BY THE BANK OF INDIA THEN IRRESPECTIVE OF THE USE OF THE BUILDING THE CLAIM OF DEDUCTION U/S 80C OF THE ACT SHALL BE ALLOWED IN RESPECT OF THE REPAYMENT OF THE PRINCIPAL AMOUNT O F COURSE SUBJECT TO THE MAXIMUM LIMIT. THUS THE GROUNDS OF APPEAL FOR ALL THE A.YS ON THIS ISSUE ARE TREATED AS ALLOWED FOR S TATISTICAL PURPOSES. ITA NOS 962 966 TO 968 AND 998 OF 2015. PAGE 7 OF 15 9. FOURTH ISSUE ONLY FOR THE A.YS 2008-09 & 2009-10 IS ENHANCEMENT OF INCOME AS ACCRETION TO CAPITAL. BRIE F FACTS ARE THAT DURING THE APPELLATE PROCEEDINGS FROM THE CAPITAL ACCOUNT FURNISHED BY THE ASSESSEE THE CIT (A) OBSERVED THA T AS ON 31.3.2007 THERE IS AN INCREASE OF RS.6.38 LAKHS IN ITS CAPITAL ACCOUNT FOR A.Y 2008-09. HE OBSERVED THAT THE ASSES SEE HAS SHOWN TOTAL INCOME OF RS.3.34 LAKHS IN ITS RETURN O F INCOME FILED FOR THE A.Y 2008-09 AND THEREFORE HE ASKED THE ASS ESSEE TO SHOW- CAUSE AS TO WHY THE INCREASE OF CAPITAL OF RS.3.04 LAKHS SHOULD NOT BE TREATED AS UNSUBSTANTIATED AND SHOULD NOT BE TREATED AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. IN EFFECT THE CIT (A) ASKED THE ASSESSEE TO PROVE THE SOURCE OF INVESTMEN T OF CAPITAL. THE ASSESSEE SUBMITTED THAT ON THE OCCASION OF HIS BIRTH DAY HE HAS RECEIVED A GIFT OF RS.5.00 LAKHS FROM HIS PATER NAL UNCLE AND FURTHER THAT HE HAD RECEIVED A GIFT OF RS.2 08 460 AND RS.52 000 FROM HIS FATHER AND MOTHER RESPECTIVELY WHICH ARE T HE SOURCES OF HIS INVESTMENT. THE CIT (A) WAS NOT CONVINCED WITH THE CONTENTIONS OF THE ASSESSEE. HE THEREFORE HELD THA T THE ASSESSEES CONTENTIONS ARE NOTHING BUT AN AFTERTHOUGHT AND TRE ATED THE SUM OF RS.3.04 LAKHS AS UNEXPLAINED INVESTMENT U/S 69 O F THE ACT. SIMILAR ADDITION OF RS.3 28 000 WAS MADE IN THE A.Y 2009-10 AS WELL AND THE ASSESSEE IS IN APPEAL BEFORE US. 10. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE LOWER A UTHORITIES AND SUBMITTED THAT THE ASSESSEE HAS INCOME IN THE E ARLIER A.YS SUFFICIENT TO EXPLAIN THE INCREASE IN ITS CAPITAL D URING THE A.Y 2008-09 AND 2009-10. HE HAS ALSO FILED BEFORE US CO PIES OF HIS CAPITAL ACCOUNT AND STATEMENT OF AFFAIRS OF THE ASS ESSEE FOR THE ITA NOS 962 966 TO 968 AND 998 OF 2015. PAGE 8 OF 15 RELEVANT PREVIOUS YEARS TO EXPLAIN THE SOURCE FOR T HE INCREASE IN THE CAPITAL. ON PERUSAL OF THE SAME WE FIND THAT T HE ASSESSEE HAS NOT BEEN MAINTAINING ANY BOOKS OF ACCOUNT PRIOR TO THE DATE OF SEARCH AND HAS PREPARED THE CAPITAL A/C AND STATEME NT OF AFFAIRS ONLY FROM THE A.Y 2005-06 ONWARDS. IT IS SEEN THAT FROM THE A.Y 2005-06 ONWARDS THE ASSESSEE HAS SHOWN OPENING CAP ITAL AND THERE IS INCREASE IN CAPITAL YEAR AFTER YEAR. THE S OURCE IS ALSO EXPLAINED AS INCOME FROM CHIT FUND BUSINESS AND PAS T SAVINGS. WE THEREFORE DEEM IT FIT AND PROPER TO REMAND THIS ISSUE IN BOTH THE A.YS TO THE FILE OF THE AO FOR VERIFICATION OF THE ABOVE SOURCES FOR INCREASE IN THE CAPITAL. 11. THE FIFTH ISSUE ARISING IN THESE APPEALS IS THE ADDITION MADE AS UNEXPLAINED INVESTMENT BASED ON THE DOCUMEN TS OTHER THAN RELATING TO CHITS FOUND DURING THE COURSE OF SEARCH. WE FIND THAT FOR THE A.YS 2006-07 2007-08 2009-10 2010-1 1 & 2011- 12 THE AO HAS MADE THE ADDITIONS TOWARDS UNEXPLAIN ED INVESTMENT. BRIEF FACTS ARE THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION U/S 132 OF THE I. T. ACT CERTAIN PROPERTY DOCUMENTS WERE FOUND AND SEIZED. THE ASSESSEE WAS A SKED TO EXPLAIN THE NATURE OF THE TRANSACTION AND THE SOURC E OF FUNDS FOR SUCH INVESTMENTS IN THE RESPECTIVE A.YS. 12. FOR THE A.Y 2006-07 THE ASSESSEE EXPLAINED THA T THE ASSESSEE HAS PURCHASED AGRICULTURAL LAND MEASURING 1.22 ACRES IN SURVEY NO.371 & 371 E OF MANGALAPALLI VILLAGE IBRA HIMPATNAM FOR A SUM OF RS.2.00 LAKHS WHICH IS BEING REFLECTED IN HIS HUF RETURN OF INCOME AND THAT AN EXTENT OF AC 5.02 GTS OF AGRICULTURAL LAND IN SURVEY NO.7 SAHUBGUDA MANGALAPALY IBRAHI MPATNAM ITA NOS 962 966 TO 968 AND 998 OF 2015. PAGE 9 OF 15 WAS PURCHASED FOR A SUM OF RS.6 31 500 AND THE SAME IS ALSO BEING REFLECTED IN HIS HUF RETURNS OF INCOME. THE A O HOWEVER HELD THAT THE ASSESSEE HAS NOT PRODUCED ANY EVIDENC E IN SUPPORT OF HIS CONTENTION THAT THESE INVESTMENTS ARE DECLAR ED IN THE ASSESSEES HUF RETURNS. HE THEREFORE MADE THE ADDI TION OF RS.8 31 500. THE CIT (A) ALSO CONFIRMED THIS ADDITI ON. 13. FOR THE A.Y 2007-08 THE ASSESSEE HAS STATED TH AT HE HAS PURCHASED AC 2.11. GTS OF AGRICULTURAL LAND IN SURVEY NO.285 284 284A AND 283 IN PENJARLA VILLAGE KOTHUR MANDA L MAHABOOBNAGAR FOR A SUM OF RS.1 26 500 AND THAT THE SAME IS BEING REFLECTED IN THE HIS HUF RETURN OF INCOME. AS REGARDS THE SOURCE OF INVESTMENT IN OTHER AGRICULTURAL LAND AS STATED IN TABLE 3 & 4 OF THE ASSESSMENT ORDER FOR THE RELEVANT A.Y THE ASSESSEE EXPLAINED THE SOURCE TO BE FROM SALE PROCEEDS OF AG RICULTURAL LAND AT VARIOUS PLACES PARTICULARLY THUMALOOR VILLAGE. THE AO HOWEVER WAS NOT CONVINCED WITH THE ASSESSEES CONT ENTION AND MADE THE ADDITION OF RS.44 04 075. ON APPEAL THE CIT (A) CONFIRMED THE ADDITION OF RS.1 26 500 AS THE ASSESS EE COULD NOT PRODUCE BOOKS OF ACCOUNT OF THE HUF AND ALSO BECAUS E THERE WAS NO MENTION OF HUF IN THE PURCHASE DEED OF THE PROPE RTY. AS REGARDS THE SOURCES FOR INVESTMENT IN OTHER PROPERT IES THE CIT (A) ACCEPTED THE SOURCE TO THE EXTENT OF RS.34 77 575. THE CIT (A) GAVE THE BENEFIT OF TELESCOPING OF RS.7.00 LAKHS OU T OF THE BALANCE OF THE SALE PROCEEDS OF RS.15.00 LAKHS OUT OF THUMA LOOR LAND AND CONFIRMED THE ADDITION OF RS.8.00 LAKHS. ITA NOS 962 966 TO 968 AND 998 OF 2015. PAGE 10 OF 15 14. FOR THE A.Y 2009-10 THE ASSESSEE HAS SHOWN TO HAVE PURCHASED A PLOT AT TUMMALAKUNTA VILLAGE FOR A SUM OF RS.30 35 000. THE ASSESSEE COULD NOT EXPLAIN THE SO URCE OF INVESTMENT THEREFORE THE AO MADE ADDITION OF THIS AMOUNT AS UNEXPLAINED INVESTMENT AND BROUGHT IT TO TAX. BEFO RE THE CIT (A) THE ASSESSEE REITERATED HIS SUBMISSIONS BUT AFTER VERIFYING THE CASH IN HAND OF THE ASSESSEE FOR THE PREVIOUS ASSES SMENT YEAR THE CIT (A) CONFIRMED THE FINDING OF THE AO THAT TH E ASSESSEE HAS FAILED TO PROVE WITH NECESSARY EVIDENCE THE SOURCE FOR SUCH INVESTMENT. 15. THE ASSESSEE IS IN APPEAL BEFORE US AGAINST ALL THESE ADDITIONS FOR THE RELEVANT A.YS. 16. FOR THE A.Y 2006-07 THE LEARNED COUNSEL FOR TH E ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AO BUT HAS NOT BEEN ABLE TO PRODUCE ANY EVIDENCE IN SUPPORT OF HIS CONTENTION THAT THEY ARE REFLECTED IN HUF RETURNS. IN THE ABSENCE OF ANY EVIDENCE IN SUPPORT OF HIS CLAIM WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE CIT (A). THE ASSESS EES GROUNDS OF APPEAL RELATING TO THE ADDITIONS OF RS.8 31 500 ARE THEREFORE REJECTED. 17. IN THE A.Y 2007-08 THERE ARE TWO ADDITIONS. AS REGARDS THE SUM OF RS.1 26 500 WE FIND THAT THE AS SESSEE HAS NOT BEEN ABLE TO PRODUCE THE BALANCE SHEET OF THE HUF T O DEMONSTRATE THAT THE PROPERTY WORTH OF RS.1 26 500 IS REFLECTED IN THE HUF ITA NOS 962 966 TO 968 AND 998 OF 2015. PAGE 11 OF 15 RETURN OF THE ASSESSEE. THEREFORE WE CONFIRM THE A DDITION OF RS.1 26 500. 18. AS REGARDS ADDITION OF RS.8.00 LAKHS WE FIND T HAT AT PAGES 60 TO 62 OF THE PAPER BOOK THE ASSESSEE HAS FILED THE COPY OF THE CAPITAL A/C AND THE STATEMENT OF AFFAIRS AS ON 31.3.2006 TO DEMONSTRATE THAT AS ON 1.4.2005 THE ASSESSEE HAD A N OPENING CAPITAL AMOUNT OF RS.30 87 987 AND THE CLOSING BALA NCE OF RS.53 46 710. THE ASSESSEE HAS EXPLAINED THIS AMOUN T TO BE THE SOURCE FOR INVESTMENT OF RS.8.00 LAKHS. WE FIND THA T NEITHER THE CIT (A) NOR THE AO HAVE ACTUALLY VERIFIED THIS CLAI M OF THE ASSESSEE. THEREFORE WE DEEM IT FIT AND PROPER TO R EMIT THIS ISSUE TO THE FILE OF THE AO FOR VERIFICATION OF THE ASSES SEES CLAIM AND IF IT IS FOUND THAT THE ASSESSEE HAD SUFFICIENT CAPITAL F OR MAKING THE INVESTMENT OF RS.8.00 LAKHS DURING THE PREVIOUS YEA R RELEVANT TO THE A.Y 2007-08 THEN NO SUCH ADDITION SHALL BE MAD E. IN THE RESULT THE GROUNDS AGAINST THE ADDITION OF RS.8.00 LAKHS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 19. AS REGARDS THE ADDITION OF RS.30 35 000 IN THE THE A.Y 2009-10 THE ASSESSEE HAS EXPLAINED THE SOURCE AS ( I) CASH IN HAND AS ON 31.3.2008 AND (II) LOAN AMOUNT FROM HIS HUF. WE FIND THAT THE CIT (A) HAS VERIFIED THE CASH BOOK OF THE ASSESSEE AND FOUND THAT THE CLOSING BALANCE OF CASH IN HAND WAS RS.4 263/-. FURTHER HE DID NOT ACCEPT THE BALANCE OF INVESTMENT OF RS.12.00 LAKHS AS LOAN FROM HIS HUF BECAUSE THE ASSESSEE FAI LED TO PRODUCE ANY DOCUMENTARY EVIDENCE MUCH LESS THE BOO KS OF ACCOUNT OF HUF. EVEN BEFORE US THE ASSESSEE HAS NO T FURNISHED ANY EVIDENCE IN SUPPORT OF HIS CONTENTION. HOWEVER SINCE THE ITA NOS 962 966 TO 968 AND 998 OF 2015. PAGE 12 OF 15 ASSESSEE HAS CLAIMED TO HAVE SUFFICIENT BALANCE IN HIS CAPITAL A/C ON THE OPENING DAY OF THE RELEVANT PREVIOUS YEAR AN D FOR THE A.Y 2007-08 WE HAVE REFERRED THE MATTER TO THE FILE OF THE AO TO CONSIDER ITS ACCEPTABILITY AS A SOURCE OF INVESTMEN T WE DEEM IT FIT AND PROPER TO REMIT THIS ISSUE FOR THIS YEAR ALSO T O THE FILE OF THE AO FOR VERIFICATION AND DECISION IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A FAIR OPPORTUNITY OF HEARING. HOWEVER AS REGARDS THE SUM OF RS.12.00 LAKHS WHICH IS EXPLAINE D TO BE THE LOAN AMOUNT FROM HIS HUF A/C THE ASSESSEE HAS NOT FILED ANY EVIDENCE BEFORE THE AUTHORITIES BELOW OR EVEN BEFOR E US TO CONSIDER THE SAME. THEREFORE THE ADDITION OF RS.12.00 LAKHS IS CONFIRMED. GROUNDS RELATING TO THIS ADDITION ARE THEREFORE TR EATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 20. FOR THE A.Y 2009-10 THERE IS AN ADDITIONAL ISS UE OF ADDITION OF RS.12 02 000 AS UNEXPLAINED CASH CREDIT . DURING THE COURSE OF SEARCH THE AO FOUND CERTAIN DOCUMENTS SH OWING THAT THE ASSESSEE HAS PAID RS.2 32 000 AS FEES TO ORCHID SCHOOL AND RS.8 00 000 TO MATRUSRI EDUCATIONAL SOCIETY TOWARDS DEVELOPMENT FUND. WITH REGARD TO THE SOURCE FOR SUCH PAYMENTS THE ASSESSEE EXPLAINED THAT THE FEE PAID TO ORCHID SCHOOL IS REF LECTED IN HIS HUF RETURN AND THAT THE SUM OF RS.8.00 LAKHS WAS DE POSITED BY HIS UNCLE IN HIS BANK A/C AND THE ASSESSEE HAS DRAW N THE DD IN FAVOUR OF MATRUSRI EDUCATION SOCIETY. IN THE ABSENC E OF ANY EVIDENCE TO PROVE THIS CONTENTION BOTH THE AO AND THE CIT (A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE. THE ASSE SSEE HAS NOT FILED ANY EVIDENCE EVEN BEFORE US. THEREFORE THE A DDITION OF RS.12 02 000 IS CONFIRMED. ITA NOS 962 966 TO 968 AND 998 OF 2015. PAGE 13 OF 15 21. FOR THE A.YS 2010-11 THE ADDITION U/S 69 OF TH E ACT IS TO AN EXTENT OF RS.1 37 63 400. THE ASSESSEE HAD EX PLAINED THE SOURCE AS THE AMOUNT RECEIVED BACK FROM HIS DEBTOR. IT WAS SUBMITTED THAT HE HAD GIVEN A LOAN OF RS.80.00 LAKH S TO ONE MR. MOHD. SULEMAN AND AS A SECURITY FOR THE SAID LOAN MR.SULEMAN THROUGH HIS PARTNER HAS OFFERED THE PROPERTY BEAR ING MUNICIPAL NO.16-6-33/P CHADERGHAT HYDERABAD AND AN AGREEMEN T OF SALE FROM GPA WAS EXECUTED TO PROTECT THE ASSESSEES INT EREST. THE AO WAS NOT CONVINCED WITH THE ASSESSEES CONTENTION AN D TREATED THE AMOUNTS MENTIONED IN THE GPA MOU AND ALSO THE RECE IPTS AS UNEXPLAINED INVESTMENT. THE SAID ADDITION WAS CONFI RMED BY THE CIT (A). 22. THE ASSESSEE HAS FILED AN APPLICATION DATED 8.4 .2017 BEFORE US REQUESTING US TO ADMIT THE ADDITIONAL EV IDENCE FILED BY THE ASSESSEE AND TO REMAND THE SAME TO THE FILE OF THE AO FOR VERIFICATION. IN THE ADDITIONAL EVIDENCE THE ASSES SEE HAS FILED COPIES OF (1) BANK A/C STATEMENT OF BANK OF INDIA MALAKPET BRANCH HYDERABAD FOR THE PERIOD FEB. 2009 TO JAN. 2011 AND (2) ENCUMBRANCE CERTIFICATE DATED 22.3.2013 REFLECTING THAT THE GPA- CUM-POA DATED 23.2.2010 WAS CANCELLED IN MARCH 201 1. IT IS SUBMITTED THAT IF THESE TWO DOCUMENTS ARE CONSIDERE D IT WOULD BE EVIDENT THAT THE ASSESSEE HAS ADVANCED THE LOAN OF RS.80 LAKHS TO MR. MOHD. SULEMAN AND FURTHER THAT ALL THE OTHER DO CUMENTS ARE EXECUTED ONLY TO SECURE SUCH TRANSACTION. 23. THE LEARNED DR OBJECTED TO THE ADMISSION OF THI S ADDITIONAL EVIDENCE. ITA NOS 962 966 TO 968 AND 998 OF 2015. PAGE 14 OF 15 24. WE FIND THAT THE DOCUMENTS NOW FILED BY THE ASS ESSEE ARE ONLY BANK STATEMENTS AND THE ENCUMBRANCE CERTIF ICATES WHICH ARE ISSUED BY THE BANK AUTHORITIES AND THE GOVT. AG ENCIES RESPECTIVELY. IN OUR OPINION THESE DOCUMENTS BEIN G THIRD PARTY RECORDS CAN BE ADMITTED. SIMILARLY FOR THE A.Y 20 11-12 ALSO THE ASSESSEE HAS FILED THE ADDITIONAL EVIDENCE BEING TH E BANK A/C COPY AND THE ENCUMBRANCE CERTIFICATE FOR THE VERY S AME PROPERTY. THEREFORE WE ARE INCLINED TO ADMIT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND REMIT THE SAME TO THE FILE OF THE AO FOR VERIFICATION AND WE DIRECT THE AO TO CONSIDER THE A LLOWABILITY OF THE ASSESSEES CLAIM IN ACCORDANCE WITH THE LAW. IN THE RESULT ASSESSEES GROUND OF APPEAL FOR THE A.YS 2010-11 & 2011-12 AGAINST THESE ADDITIONS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 25. FOR THE A.Y 2008-09 THERE IS AN APPEAL FILED B Y THE REVENUE. IN THIS APPEAL THE REVENUE IS AGGRIEVED B Y THE ORDER OF THE CIT (A) DELETING THE ADDITION OF RS.40.00 LAKHS WHICH WAS MADE BY THE AO AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. THE CIT (A) HAS ACCEPTED THE ASSESSEES CONTENTION THAT THE AGREEMENT OF SALE IN RESPECT OF AGRICULTURAL LAND IN SURVEY N O.191 & 192 OF MANKHAL VILLAGE MAHESWARAM MANDAL WAS TAKEN ONLY AS A MEASURE OF SECURITY AGAINST THE PRIZE MONEY FOR THE CHIT BUSINESS RUN BY HIS FATHER SHRI A. NARASIMHA REDDY. WE FIND THAT THIS ISSUE IS SIMILAR TO THE ISSUE IN THE ASSESSEES BRO THERS CASE I.E. SHRI A. PANDU RANGA REDDY IN ITA NO. 797/HYD/2015 T O 803/HYD/2015 FOR THE A.YS 2005-06 TO 2011-12 AND TH E TRIBUNAL AT PARA 12 OF ITS ORDER HAS OBSERVED THAT THE AO DI D NOT MAKE INQUIRY WITH REGARD TO THE CONTENTION OF THE ASSESS EE AND ITA NOS 962 966 TO 968 AND 998 OF 2015. PAGE 15 OF 15 THEREFORE HAD REMITTED THE MATTER TO THE FILE OF T HE AO WITH A DIRECTION TO VERIFY THE ASSESSEES CLAIM AND ALSO A LLOW THE ASSESSEE TO FURNISH NECESSARY DOCUMENTS/EVIDENCE/CONFIRMATIO N/ AFFIDAVITS IN SUPPORT OF HIS CONTENTION. RESPECTFUL LY FOLLOWING THE DECISION OF THE COORDINATE BENCH ON SIMILAR SET OF FACTS THIS GROUND OF APPEAL RAISED BY THE REVENUE IS ALSO REMI TTED TO THE FILE OF THE AO WITH SIMILAR DIRECTION. 26. IN THE RESULT REVENUES APPEAL IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. 27. TO SUM UP ASSESSEES APPEALS FOR THE A.YS 2005 -06 TO 2011-12 ARE TREATED AS PARTLY ALLOWED AND REVENUES APPEAL FOR A.Y 2008-09 IS TREATED AS ALLOWED FOR STATISTICAL P URPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER 2017. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD DATED 30 TH NOVEMBER 2017. VINODAN/SPS COPY TO: 1 K.VASANTKUMAR A.V RAGHURAM P.VINOD ADVOCATES 610 BABUKHAN ESTATE BASHEERBAGH HYDERABAD 500001 2 DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 3( 1) HYDERABAD 3 CIT (A)-XI HYDERABAD 4 CIT CENTRAL HYDERABAD 5 THE DR ITAT HYDERABAD 6 GUARD FILE BY ORDER