TMI Blog2021 (7) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... /2020 against the CIT(A)-11, Hyderabad s order dt.11-09-2020 in appeal No.10275/2019-20, the latter assessee s appeals ITA Nos.784 785/Hyd/2020 arise against the very CIT(A) s orders dt.04-09-2020 all in appeal Nos. 10280/2019-20 10286/2019-20, involving proceedings u/s.143(3) r.w.s.153C in former and u/s.143(3) r.w.s.153A in latter twin assessee s; respectively. Heard both the assessees as well as the department. Case files perused. 2. It transpires at the outset that all these appeals involve delay in filing of 03 days (ITA No.782/H/20) and 06 days (ITA Nos.784 785/H/20); respectively, stated to be attributable to the reason(s) beyond their control as per the respective condonation petition(s)/affidavit(s). No rebuttal has come from the departmental side. The impugned delay is condoned in all the above said appeals therefore. 3. We notice at the outset that all the three instant appeals arise from the departmental search action dt.04-07-2017. The same led to initiation u/s.143(3) r.w.s.153C and 153A proceedings; as the case may be, finally culminating in Section 69B un-explained investment addition(s) in the nature of on-money payments involving varying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is not in appeal:- 7.2.3. On consideration of AO's findings and basis thereof and the contentions of the appellant, the following position emerges: i) The appellant has submitted documentary evidences to prove the identity, credit worthiness of the creditor and the genuineness of the transactions. There is no adverse finding on the documents produced by the appellant. ii) The enquiries at the Delhi and the statement recorded of Mr. Bardia create suspicion as to the transactions of the appellant company with the creditor. The suspicion should lead to investigation to bring out the facts and material on record to disprove the contention of the appellant. No such enquiries were conducted by the AO to bring out facts/material on record. Suspicion, however strong, cannot substitute for evidence. The AO ought to have conducted further enquiries to take it to the logical conclusion. iii) The appellant discharged, the initial 'burden of proof by producing all the documentary evidences. The AO has not contradicted any of the evidences produced by the appellant. Unless some evidence is brought on record and appellant is confronted with such eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Investment and finance 8. R.K Investment p ltd Investment and finance 9. Minimum Shares and Securities p ltd Investment and Finance 10. Gaiety Realtech p ltd Real estate investments 11. Micron precision engineering p ltd Not active 12. Rockhard Enterprises P Ltd Not active 13. Sunrise Agro Products Ltd Investment in MCX 14. Sunrise Distillieries Ltd Investment in MCX Q5. Are you related to any of the above companies? Ans: yes, I am director in Tarini Enterprises Ltd and in all other companies I am acting as retainer/consultant. Q6. Please furnish registered addresses of the following companies. S. No. Name of the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above companies/individual except Zara Investments P ltd as per the following details: i) Investments in Zainab Investments P ltd Name of the company FY Amount invested Gaiety Realtech P Ltd 2014-15 15000000 Minimum Shares and Securities P Ltd 2014-15 20000000 Jasnath Infrastructure P Ltd 2014-15 30000000 Karpo Builders P Ltd 2014-15 13000000 2015-16 12000000 Karo Real Estate P Ltd 2014-15 30000000 Tarini Enterprises Ltd 2014-15 30000000 Khatushyam Shares and Securities P Ltd 2014-15 25000000 R.K. Investment P Ltd 2014-15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : We met them through common friend Sri. V. P Anand. Q.14. What is the purpose of the above mentioned investments? Ans: The above mentioned advances/investments were made to collaborate real estate projects with the above mentioned companies/individual. Q.15. Please state whether the above mentioned investments are still receivable. Ans: Yes, the above mentioned investments are still receivable by our companies. Q.16. Have you received any benefit out of the above investments made.? Ans: No, we have not yet received any benefits out of the above investments as this money has been invested for the collaboration/joint ventures of the projects. Q.17. Please furnish the details of the proposed projects. Ans: The projects at various places which are still in process. Q.18. It is seen that the amounts invested by you has been used by Sri. Ajaz Farooqi for making investments in mutual funds, fixed assets and acquisition of immovable properties in Hyderabad. As such the money is fully invested and is being enjoyed by Sri. Ajaz Farooqi and his family members. In these circumstances do you justify the genuineness of your investments. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommodation entries. Therefore, we do not have any hesitation to delete the addition made by the Ld. AO on this issue which is omitted to be adjudicated by the Ld. CIT (A). Accordingly, addition made by the Ld. AO for ₹ 95 lakhs on the presumption that the assessee would have incurred commission expenditure for obtaining accommodation entries is hereby deleted. 10. Ground No.2: Addition made for ₹ 14,99,45,000/- invoking the provisions of section 69B of the Act.: 11. During the course of search and seizure operations in the residential premises of Mr. J.K. Datta, General Manager of M/s. K.V.R. Rail Infra Projects Pvt Ltd., and in the premises of the Accounts Manager employed in the concerns of Shri Ajaz Farooqi certain incriminating materials were found and seized containing details of cash paid by the assessee company M/s. Zainab Investments Private Limited to Ms. Adala Bhanu Rekha and Ms. Adala Indira Priyadarshini towards purchase of residential property admeasuring 2855 sq yds at Road No. 36, Jubilee Hills, Hyderabad. As per these documents, total sale consideration of the property is ₹ 33,50,00,000/- out of which ₹ 19,40,75,000/- was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty Limited, Jubilee Hills, Hyderabad-0020. Page No. of Annexure Date Name of the person Amount (Rs.) 8 03/11/2014 Smt. Bhanu Rekha 3,00,00,000 7 04/11/2014 Smt. Adala Indira Priyadarshini 3,00,00,000 6 05/11/2014 Smt. Adala Indira Priyadarshini 3,00,00,000 5 06/11/2014 Smt. Bhanu Rekha 3,00,00,000 4 07/11/2014 Smt. Adala Indira Priyadarshini 2,09,25,000 ---------------------------------------------------------------------------*Sri Dutta Reconfirmed the above in his statement recorded on 26/07/2017. 12. Further, on query with the sellers of the property Ms. Adala Bhanu Rekha and Ms. Adala Indira Priyadarshini confirmed the onmoney transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant company nor in the premises of appellant company with regard to the cash payment made to the sellers of the property. It was further argued that some data found in the Pendrive of the employee of the assessee which was recovered from the employee s house cannot have any bearing on the transaction made by the assessee. Further, it was submitted that provisions of section 65B(4) of the Evidence Act was not followed hence, the contents retrieved from the pen-drive does not have any evidentiary value. The Ld. AR further submitted that the Directors of the assessee company were not allowed to cross examine the vendors of the property. It was submitted that the Ld. Revenue Authorities had only relied on the documents found in the Pen-drive of the employee of the assessee and the statements recorded from the sellers of the property. Thus, there was no direct evidence, and all the evidence were by way of oral testimony which cannot be used against the assessee. Further, it was argued that the noting s and statements obtained from third parties cannot be treated as corroborative evidence as it is not a direct evidence of the transaction. It was further submitted that no evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o any document found with the assessee or in the premises of the Directors or any other employees of the assessee company. Similarly, the printout from the Pen-drive stating the property sale receipt extracted in page 55, 56, 57, 58 and 59 of the assessment order, also has the same deficiency to treat it as evidence against the assessee. Therefore, these documents appear to be dumb documents and cannot be made a basis for making addition in the hands of the assessee. Moreover, confessions were obtained from the employee of the assessee which were subsequently retracted by him. It is pertinent to mention that the CBDT vide Instruction F.No.286/2/2003-IT (INV.II), dated 10/3/2003 has condemned the forced confession made during the search and survey operations. Further the Hon ble High Court of Telangana and Andhra Pradesh in the case Gajjam Chinna Yellappa vs. ITO vide order dated 6/11/2014 reported in [2015] 59 Taxmann.com 69 (Andhra Pradesh and Telangana) has held that where assessment order passed on the basis of mere statement recorded during the course of survey which are retracted and where the Assessing Officer did not produce any other cogent material to suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 262 ITR 354 vide judgment dated 22/01/2003 had held that when a document shows a fixed price, there would be a presumption that it is the correct price agreed upon by the parties. It is true that on the basis of the agreement the sale deed is executed. But it is not necessary that the price stated in the agreement will be price shown in the sale deed . Further, the Hon ble Apex Court in the case CIT, Salem vs. P.V. Kalyanasundaram vide judgment dated 14/09/2007 reported in 294 ITR 49 it was held that the fact as to the actual sale price of the property, the implication of the contrary statements made by the vendor or whether reliance could be placed on the loose sheets recovered in the course of the raid were all question of fact. Therefore, there was no infirmity in the order of the High Court for having dismissed the Revenue s appeal. Considering the facts and circumstances of the case before us and the decisions cited herein above, we cannot conclusively agree on the finding of the Ld. Revenue Authorities that the assessee has paid on-money of ₹ 14,09,25,00/- to the sellers of the property because the two evidence relied by the Ld. Revenue Authorities viz., the data ret ..... X X X X Extracts X X X X X X X X Extracts X X X X
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