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Grandhi VVSLN Subba Rao L.R. of late Grandhi Chalapathi Rao, Secunderbad Versus ACIT, Central Circle, Rajahmundry

2018 (1) TMI 599 - ITAT VISAKHAPATNAM

Undisclosed income of the assessee - search u/s 132 - transactions recorded in the loose sheets - burden with regard to the ownership of the documents mentioned in Annexure GVS/3 & GVS/4 - Held that:- Merely relying on the statement of the assessee’s son, the A.O. cannot make addition in the hands of the assessee without bringing any tangible evidence. Once the assessee furnished the details of the transactions, the name and address of the person, the burden of the assessee stands discharged and .....

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the hands of the assessee. Accordingly, the additions made on the basis of Annexure GVS/3 & GVS/4 stands deleted. - With regard to the additions made in respect of the seized material marked as Annexure GVS/1, the assessee’s son in question No.4 has stated that the copies of the relevant documents in page Nos.18 to 22 represents the money lending transaction done by his father. This fact was neither disputed by the assessee nor disputed by his son. In the subsequent replies filed before the .....

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tement dated 18.3.2009. Accordingly, we uphold the additions for the assessment years 2005-06 to 2006-07 accordingly - decided partly in favour of assessee - I.T.A.Nos.389 to 392/Vizag/2014 - Dated:- 10-1-2018 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER For The Appellant : Shri G.V.N. Hari, AR For The Respondent : Shri Debakumar Sonowal, DR ORDER PER Bench: These appeals are filed by the assessee against order of the Commissioner of Income Tax (Appeals), Gu .....

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Rao, the assessee s son, loose sheets containing the promissory notes related to the money lending business were stated to be found and seized as Annexure GVS/1, GVS/3 & GVS/4. Shri Subba Rao, the son of the assessee was questioned regarding the contents of the loose sheets and he has explained that the loose sheets are related to his father and his relatives money lending transactions. The A.O. summarized the contents of the loose sheets found and quantified the unaccounted transactions ye .....

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57 309437 2006-07 Quantification of year wise Unaccounted Income S.No. Financial year Assessment year Unaccounted income Total addition 1 2004-05 2005-06 Principal- 563400 Interest - 117243 680643 2 2005-06 2006-07 Principal - 482200 Interest - 26034 508234 3 2006-07 2007-08 Principal - 459437 Interest - 459437 4 2007-08 2008-09 Nil 5 2008-09 2009-10 Principal - 50000 Interest - 50000 3. The A.O. called for the explanation of the assessee as to why the above sum should not be assessed as undisc .....

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none of the transactions recorded in the loose sheets does belong to him, hence requested not to make the assessment in his hands. The A.O. rejected the explanation of the assessee since the assessee failed to furnish any supporting evidence and assessed the sums as unaccounted income for the assessment year 2005-06 to 2009-10 as under: S.No. Financial year Assessment year Unaccounted income Total addition 1 2004-05 2005-06 Principal- 563400 Interest - 117243 680643 2 2005-06 2006-07 Principal - .....

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statement recorded on 18/03/2009 Shri G.V.V.S.L.N. Subba Rao, son of the assessee had stated that the loose sheets in Annexure No.GVS/3, Page Nos.2,3,7,9,11,13,17,21 were promissory notes executed by his father G. Subba Rao in the period of 2004-05 to 2005-06 in favour of S.V. Ratnam and the addition was made in the hands of the assessee without any evidence to disprove the statement of Sri Subba Rao which is unjustified and required to be deleted. 5.1 The Ld. A.R. referring to page No.15 of pap .....

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itted a letter to the Dy. Director of Investigation (Income Tax) stating that the loose sheets marked as Annexure GVS/4 from page 1 to 57 and GVS/3 from page Nos.1 to 28 belongs to her but not belonged to the assessee. She has also submitted a letter to the effect that that a sum of ₹ 1,90,000/- was deposited in Dhanalakshmi MAC Society and receiving the interest through Mr. Subba Rao. The assessee Late Mr. G. Chalapathi Rao has submitted a letter dated 20.12.2010 stating that the loose sh .....

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MAC Society in the name of Smt. S.V. Ratnam. The Ld.A.R submitted that as explained by the assessee and as per the submissions made by S.V. Ratnam the entire material found and seized during the course of search marked as Annexure GVS/3 and GVS/4 belongs to S.V. Ratnam, his aunt but does not belong to the assessee. The Ld.A.R. argued that the A.O. is incorrect in making the assessment in the hands of the assessee instead of assessing the same in the hands of Smt S.V. Ratnam. 7. On the other hand .....

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the assessee has denied same before the A.O. as well as the DDIT. The assessee has discharged his burden with regard to the ownership of the documents mentioned in Annexure GVS/3 & GVS/4 and it is incumbent up on the A.O. to make further verifications of the ownership and the contents of the Annexure GVS/3 & GVS/4 and required to be assessed in the hands of the correct person by taking appropriate action as available in law. Though assessee has discharged his burden the A.O. s has not s .....

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