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TMI Blog2014 (4) TMI 818X X X X Extracts X X X X X X X X Extracts X X X X ..... are involved in both these appeals, we refer to the facts from AY 2002-03. Briefly the facts are, there was a search and seizure operation u/s 132 of the IT Act, 1961 conducted in the case of Sri K.C. Reddeppa Naidu, Tirupati on 27/09/2009. Subsequently, the case of the assessee was notified to ACIT, Central Circle, Tirupathi. The AO assuming jurisdiction u/s 153C of the Act, issued a notice to the assessee calling upon him to file his return of income. 3. During the assessment proceedings, the AO noted from the information submitted by assessee that there were cash credits of Rs. 10,000/- and Rs. 2,90,000/- on 01-04-2001 and 12-08-2001, in the capital account of the assessee. Since according to the AO, the assessee could not reply for the source of cash credits even after allowing lot of time and several opportunities, the said amounts totaling to Rs. 3,00,000/- was treated as unexplained cash credit and added to the income returned. 4. The AO further noted that during the year the assessee purchased one shop and ½ share in flat for which the assessee stated to have taken loan from SBI amounting to Rs. 5 lakhs. However, as noted by the AO, since the assessee has not addu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenging the action of the CIT(A) in deleting the additions made by the AO. 9. The learned DR strongly contending against the deletion of addition made by the AO submitted that the AO can take into consideration any other material apart from what has been seized during the search and seizure operation for making an assessment u/s 153C of the Act. In this context, learned DR relied on the decision of jurisdictional High Court in case of Gopal Lal Bhadruka, 346 ITR 106. 10. The learned AR, on the other hand strongly supporting the order of the CIT(A) submitted that there being absolutely no incriminating material found during the search action or any other material to indicate that the assessee has undisclosed income and the assessment made u/s 153C of the Act is without jurisdiction. The learned AR further submitted that pre-condition for making assessment u/s 153C having not been fulfilled in the present case and the CIT(A) was perfectly justified in deleting the addition. 11. We have heard the submissions of the parties and perused the orders of the revenue authorities as well as other materials on record. Undisputedly, in the present case the AO has proceeded to make the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee, the AO could not have proceeded to make assessment u/s 153C of the Act. The ratio laid down by the Hon'ble Gujarat High Court in the case of Vijayabhai N. Chandrani Vs. ACIT, 231 CTR 474 (Guj.) relied upon by the assessee and referred to by the CIT(A) clearly supports the case of the assessee. In the aforesaid view of the matter, we do not find any reason to interfere with the order of the CIT(A) which is accordingly upheld. Ground raised by the revenue is dismissed. 12. As the issues in AY 2005-06 are similar to that of AY 2002- 03, following the decision in that year, we dismiss the grounds of appeal of the revenue in AY 2005-06 also. 13. In the result, appeals of the revenue in AY 2002-03 and 2005-06 are dismissed. 14. Since the C.Os filed by the assessee for AY 2002-03 and 2005-06 are in support of the orders of CIT(A) and since the orders of CIT(A) were upheld by us while deciding revenue appeals, the COs have become infructuous and the same are dismissed as infructuous. ITA NO. 663/H/2011 - appeal by the assessee 15. At the outset, the learned AR for the assessee submitted that there is a delay of 19 days in filing the appeal. In this regard, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence. Though, on a perusal of the balance sheet as at 31/03/06, it is found that the assessee has shown the land as an asset and even though the confirmation letter placed at page 15 of the paper book mentions about payment of annual lease rental of Rs. 75,000/-, but, there is no other evidence to show that Sri K. Subhash Chandra Bose was carrying on agricultural operation on the said land. Furthermore, the household card of Sri K. Subhash Chandra Bose, a copy of which is at page 16 of the paper book submitted by the assessee mentions his annual income at Rs. 18,000/-. Therefore, it raises serious doubt as to how a person having annual income of Rs. 18,000/- can pay lease rental of Rs. 75,000/- to the assessee. The assessee has not at all proved with sufficient evidence that agricultural operation was being carried on the said land or it was generating income from agriculture. In the aforesaid view of the matter, we do not find any infirmity in the order of the CIT(A) in sustaining the addition of Rs. 75,000/- as income from other sources. 22. Ground No. 3 is pertaining to the addition of Rs. 4 lakhs being the gift received by the assessee form his father-in-law. 23. During the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s development charges, for which no details were given like bills/vouchers, nature of expenditure, mode of payment, date of payment etc. In the absence of said details, the AO disallowed the claim of expenditure. The CIT(A) confirmed the same on the ground that expenses incurred for agricultural land development cannot be allowed since the sale of agricultural land and profit derived therefrom cannot be assessed for capital gains. 28. After considering the submissions of the parties and perusing the findings of the revenue authorities as well as other materials on record, we do not find any reason to interfere with the order of CIT(A) on this issue since the assessee has not produced even a semblance of evidence to prove the expenditure incurred towards development charges. Therefore, in the absence of any evidence assessee's claim cannot be accepted on the face of it. In that view of the matter, the addition is upheld and ground raised is dismissed. 29. In the result, appeal of the assessee is dismissed. ITA No. 664/H/11 - by the assessee for AY 2008-09 30. At the outset, the learned AR for the assessee submitted that there is a delay of 19 days in filing the appeal. In this r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we find that the assessee had purchased a Santro car on 06/05/2003 for a consideration of Rs. 3,65,070/- and the said car was sold on 19/07/2007 for Rs. 2,35,000/- as per delivery letter dated 19-07-2007, at page 83 of the paper book. However, the fact remains that the assessee is estimating his income from business, hence, the contention of the learned DR that depreciation is deemed to have been allowed to the assessee requires to be looked into. We, therefore, remit this issue to the file of the AO for deciding afresh keeping in view all these aspects and after giving due opportunity of hearing to the assessee. This ground is allowed for statistical purposes. 36. Ground No. 3 is pertaining to the addition of Rs. 3,78,493/-. 37. The assessee admitted short term capital gain of Rs. 1,18,757/- on sale of site at Sivajyothi Nagar, Tirupati. While arriving at short term capital gain, the assessee debited cost of site at Rs. 3,78,493/-. When the AO asked to produce copy of purchase document, he failed to produce any evidence and, hence, the AO disallowed the same. On appeal, the CIT(A) confirmed the action of the AO observing that the assessee did not explain with relevant details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through legal means only as Smt. Santoshamma worked as Head Nurse and she had given above said amount to the assessee through banking channel only, hence, the same should not have been disbelieved by the AO. Similarly, with respect to the the amounts received from Sri Sudhkar (NRI) and Sri Ananda Kumar (NRI) also, it was submitted that, since they have sent the money to the assessee through banking channel only which are reflected in bank account of the assessee the credits are genuine. In support of the above argument, the AR had furnished copies of bank accounts of Smt. Santhoshamma and assessee's bank account copies. After considering the submissions of the AR of the assessee, and verifying the details furnished, the CIT(A) observed that the details furnished before him were also submitted before the AO. He, therefore, held that having verified the facts and circumstances of the case, as the loans received by the assessee are through banking channel only, therefore, there was nothing adverse found with regard to the loans received, hence, deleted the addition of Rs. 11,19,560/- made by the AO. 45. Aggrieved by the order of CIT(A), the revenue is in appeal before us. 46. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), he has deleted the addition solely on the ground that they are made through banking channel. However, this may be correct in case of Smt. Santhoshamma in whose case Assessee furnished copies of bank account of the creditor as well as his own bank account reflecting the advancement of Rs. 5 lakhs. The fact that Smt. Santhoshamma worked as a head nurse also to a certain extent proves her capacity to make the gift. However, so far as the other two creditors are concerned, namely, Sri Sudhakar and Sri Ananda Kumar admittedly both are non-resident Indians residing outside India, hence, in their case strict proof of evidence is required with regard to creditworthiness and genuineness of the loan. Therefore, it is required to be verified from their bank accounts whether they had source to advance the amount to the assessee. Only because the money has come to the assessee's bank account, the loan cannot be accepted as genuine. Therefore, while we accept the CIT(A)'s finding with regard to the amount of Rs. 5 lakhs from Smt. Santoshamma but so far as loan of Rs. 4,17,670/- and Rs. 2,01,890/- from Sri Sudhakar and Sri Ananda Kumar are concerned, we remit the matter back to the file of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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