C.GOPI KRISHNA ,HYDERABAD vs. DY. COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE-(2), HYDERABAD

1666/Hyd/2019 2. These appeals are filed with a delay of 60 days each and the reason for such delay is attributed to the ill-health of the assessee. Medical certificate is enclosed and the assessee swore to the facts. Having regard to the facts and circumstances of the case, we inclined to condone the delay in both the assessment years and proceed to hear these appeals on merits.

Assessee is an individual and claims to have been deriving income from agriculture. He filed his return of income for the assessment year 2009-10 declaring agricultural income. There was a search and seizure operation under section 132 of the Income Tax Act, 1961 (for short “the Act”) on 25/11/2010 in the business premises of M/s. Sri Krishna Constructions and residential premises of one Sri C. Satyanarayana, pursuant to which, notice under section 153C of the Act was issued to the assessee and the assessee filed the return of income showing the very same income as was shown in the original return of income.

Basing on the material seized during the search, Learned Assessing Officer found that the assessee purchased an immoveable property at Potladurthi of Kamalapuram from one Ch. Pitchaiah Naidu for a consideration of Rs. 1.3 lakhs which was not disclosed in the balance sheet furnished by the assessee and, therefore, the learned Assessing Officer added such Rs. 1.3 lakhs as un-disclosed investment. Apart from this, the learned Assessing Officer found that the income of the assessee from the agricultural land during the assessment year 2009-10 was phenomenally high when compared to the agricultural income of assessment year 2007- 08 and, therefore, learned Assessing Officer added the increase to the tune of Rs. 2.39 lakhs to the income of the assessee.

Aggrieved, assessee preferred appeal before the learned CIT(A) and the learned CIT(A) vide order dated 28/06/2019, confirmed the addition of Rs. 1.3 lakhs holding that this addition has nexus to the seized document and also that the investment remained un-explained. Learned CIT(A), However, deleted the other addition stating that such an addition has no reference to any seized material.

Challenging the upholding of the addition on account of the un- explained investment, assessee filed this appeal contending that for the purpose of section 69 of the Act, what is relevant is ‘books of accounts’ but not the income tax returns and the investment in the immoveable property of the value of less than Rs. 30 lakhs is not required to be reported. Further, in support of the contention of the assessee that the assessee had sufficient amounts to make investment during the assessment year 2009-10 and 2010-11 inasmuch as a sum of Rs. 16 lakhs was credited to his account @ Rs. 12 lakhs on 07/11/2007 and Rs. 4 lakhs on 26/11/2007 and, therefore, it cannot be said that the investments went un-explained. He further submitted that according to the Revenue, investment during the assessment year 2009-10 was Rs. 1.3 lakhs whereas for the assessment year 2010-11, it was only Rs. 1,51,500/- and Rs. 3,87,200/- and Rs. 62,800/- on account of purchase of agricultural land, investment in chits and dividend earned respectively. He, therefore, submits that all these things are covered by the bank balance of the assessee wherein a sum of Rs. 16 lakhs was available as on 26/11/2007 having withdrawn from Sri Krishna Constructions. He, therefore, prays that the investment stands explained by the bank account book of the assessee.

Per contra, learned DR submits that the assessee produced the ledger account of Sri Krishna Constructions as on 31/03/2008 for the first time and this being an aspect of fact, cannot be accepted without any verification at the end of the learned Assessing Officer.

We have gone through the record in the light of the submissions made on either side. Plea of the assessee that he had withdrawn a sum of Rs. 12 lakhs on 07/11/2007 and a sum of Rs. 4 lakhs on 26/11/2007 from Sri Krishna Constructions and these amounts received in the account of the assessee explain the investments made by the assessee during the assessment years 2009-10 and 2010-11. This is a verifiable fact and requires verification at the end of the learned Assessing Officer. We, therefore, are inclined to set aside the impugned order and restore this issue to the file of the learned Assessing Officer for verification of fact with reference to the material to be produced by the assessee in the shape of ledger and bank accounts, and to take a view according to law. We order accordingly.

Since the facts of 2010-11 are identical to one as decided by us in (supra) for the assessment year 2009-10 and, therefore, our findings in the said appeal, mutatis mutandis, would apply to this appeal as well. Hence, this appeal of assessee is also treated as allowed for statistical purposes.

To sum-up, both the appeals are treated as allowed for statistical purposes.