TMI Blog2013 (11) TMI 1751X X X X Extracts X X X X X X X X Extracts X X X X ..... firming the addition of ₹ 2,42,00,000/- made by the AO on the ground that the said amount represent the investment made by the appellant in Sri Seetharamanjaneya Constructions. 4. The learned CIT(A) erred in enhancing the addition made by the AO of ₹ 2,42,00,000/- to ₹ 3,00,00,000/- and further erred in directing the AO to make a further addition of ₹ 58,00,000/-. The learned CIT(A) ought to have accepted the explanation submitted by the appellant herein and deleted the addition made by the AO. 5. The learned CIT(A) erred in confirming levy of interest u/s 234A, 234B and 234C of the IT Act. 2. Briefly stated, Assessee is an individual and is a partner in the firms M/s SVK Sri Sitharamanjaneya Constructions (SVK SSC) and M/s SVK Projects. There was a search and seizure operation conducted u/s 132(1) of the IT Act, on 29-10-2007, in the case of Sri D. Nagarjuna Rao, who is also a partner in the firm M/s SVK Sri Sitaramanjaneya Constructions. In the course of search and seizure proceedings, page 23 of the ledger account books seized vide Annexure A/DNR/04 dated 29-10-2007 was enquired into. Shri D. Nagarju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e persons have explained (extracted in pages 6 to 19 of the assessment order of 19 persons) and confirmed that they have advanced the funds on various dates to M/s SVK projects. However, as seen from para 5 of the order, all these confirmations were rejected and the AO made addition of ₹ 2,42,00,000/- stating as under: 5. From the above discussion, it can be seen that all the aforementioned persons claimed to have made the advances in cash and have failed to furnish documentary evidence in support of their accumulated savings. Further, the bank statements do not show the advancement of cash to the assessee on respective dates and the dates and amounts of withdrawal by above persons do not match with the cash advances claimed to have been made to the assessee. Thus, the details of the said withdrawals are far apart and well ahead of the said cash advances to the assessee. Even in cases where the source of finance is stated to be amounts received from overseas, there is no reason why the advances were received only in cash. 5.1 In the light of the discussion made above, the claim of the assessee regarding receipt of advances in cash fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Nagarjuna Rao dated 29.10.2007 and I confirm the contents of that statement. I will furnish the details of cast' contributed by me at ₹ 3,OO,OO,OOO/- by 19.11.2007. From the above, thus, it i? evident that he: has admitted cash investment of ₹ 3,00,00,000/- made by him on 30.12.2006' in the said firm M/s.SVK. Sri Seethararnanjaneya Constructions. Further, in the said submissions made before me, the Id. AR. has not explained with reference to the specific query raised by me. It is merely stated that the said amounts with~rawn by those partners were deposited with M/s. SVK Sri Seetharamanjaneya Constructions on 30.12.2006. However such plea cannot be accepted. As per the said kutcha cash book, copies of which were filed by the appellant earlier, sums of ₹ 75,00,000/- were paid by that firm M/s.SVK. Projects, to those four partners on 28.12.2006. Under this circumstance, it cannot be said that the said amounts were deposited by those four partners, after two days i.e. on 30.12.2006 in the said firm M/s.SVK. Sri Seetharamanjaneva Constructions. In fact, it cannot be accepted that such cash deposit of ₹ 3,00,000/- made by the appellant o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the said cash investment of ₹ 3,00,00,000/- made by the appellant as a partner in M/s SVK. Sri Seetharamanjaneya Constructions was actually made out of such advances received in the case of M/s SVK Projects. Since, the appellant has failed to explain the source of the said cash investment of ₹ 3,00,00,000/- made by him with credible evidence, the said amount is liable for addition, treating the same as unexplained investment made by him during the F.Y. 2006-07. However, as an amount of ₹ 2,42,OO,900/-only, has been added in the assessment, the balance amount of ₹ 58,00,000/- has to be further added to the income of the appellant, which would resu!t in consequential enhancement to the income of the appellant. The AO is directed accordingly. 7. The learned counsel for the assessee submitted that both the authorities have wrongly considered Assessee as owner of the entire investment whereas both Shri D. Nagarjuna Rao as well as Assessee in their statements submitted that the funds invested in M/s SVK Projects were through Assessee Shri D.V. Krishna Reddy and additions were made in the hands of Assessee whereas enquiries were made in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s SVK Projects prior to search as property was purchased on 17-08-2006 and 22-11- 2006 by the said firm. There are also cheque receipts as stated in page 5 of the assessment order to an extent of ₹ 58,90,000/-, which proves the existence of the said firm much prior to the date of search. Even Shri D. Nagarjuna Rao in his statement admitted that Assessee Shri D. V. Krishna Reddy, promoter of M/s SVK SSC is also representing M/s SVK Projects. Assessee also admitted on behalf of M/s SVK Projects that he has contributed the funds to a large extent in M/s SVK SSC and he gave details of various persons from whom the funds received by way of cheques and cash and the same were invested in M/s SVK Projects. It is also a fact that ADIT made enquiries with reference to various people, who have admitted the source of funds as well as confirmed that they have invested in M/s SVK projects. In spite of explanations and evidence furnished that the amounts were received by M/s SVK projects and these funds were withdrawn by the partners and invested in M/s SVK SSC, the AO considered the amounts in the hands of Assessee on a thin reason that Assessee Shri D.V. Krishna Reddy admitted to hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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