Commissioner Of Income-Tax-Iii v. Ramachandra Rao

HON'BLE SRI JUSTICE G.CHANDRAIAH& HON’BLE SRI JUSTICE CHALLA KODANDA RAMI.T.T.A. No. 204 of 2015 DATE: 22.09.2015 Between: Commissioner of Income-Tax-III .. Appellant And V. Ramachandra Rao .. Respondent JUDGMENT:- (per Hon’ble Sri Justice G. Chandraiah) This appeal filed by the Revenue under Section 260-A of the Income Tax Act, 1961 (for brevity “the Act”) arisesout of the Order dated 22.11.2013 in I.T.A.No.468/Hyd/2012 passed by the Income-Tax AppellateTribunal (for short “the Tribunal”), Hyderabad Bench “B”,Hyderabad relating to the assessment year 2008-2009. The following substantial question of law is said to bearising from the orders of the Tribunal for adjudication: “In the facts and circumstances of the case, whether theHon’ble Tribunal (ITAT) is correct in law in upholding thedeletion of addition of Rs.13.81 crores as an unaccountedincome of the respondent-assessee based on the seizeddocument when the said document was reflected in the finaldocument of registration supporting the transaction?” The respondent-assessee is an individual. Consequent upon the search and seizure operationsconducted in the residential premises of the assessee,notice under Section 153-A was issued to the assessee,and in response thereto, the assessee filed returns ofincome for the assessment years from 2002-2003 to2007-2008. The assessing officer, while assessing theincome of the assessee, found suppression of receipts on sale of land by the assessee and made an addition ofunaccounted income based on seized document i.e.Memorandum of Understanding in respect of the landtransaction. When the assessee challenged theassessment order dated 31.12.2009, the Commissioner ofIncome Tax (Appeals), while partly allowing the appeal,directed the Assessing Officer to delete the addition ofRs.1.85 crores as the seized and unsigned Memorandumof Understanding has no evidentiary value. However, onfurther appeal by the Department, the Tribunal, vide orderdated 22.11.2013, dismissed the appeal upholding thefindings of the appellate authority on the aspect of deletionof addition of unaccounted income. Sri B. Narasimha Sarma, learned Standing Counselfor Income-Tax Department has contended that theaddition made by the assessing officer is based on theimpugned seized document which was ultimately reflectedin the final registration document and the Tribunal erred indeleting the addition. The Tribunal in its order has held to the followingeffect: “We heard the parties and perused the material available onrecord including the impugned orders of the lower authorities. As can be seen from the material on record, the addition ofRs.13.81 crores was made by the Assessing Officer only relyingupon the draft MOU which is an unsigned one. There is noother corroborative evidence brought on record either as aresult of search or enquiry made by the Assessing Officer,which could establish the fact that the contents of the draft MOUwere true and the MOU was in fact acted upon. Therefore, in The Tribunal in its order has held to the followingeffect: “We heard the parties and perused the material available onrecord including the impugned orders of the lower authorities. As can be seen from the material on record, the addition ofRs.13.81 crores was made by the Assessing Officer only relyingupon the draft MOU which is an unsigned one. There is noother corroborative evidence brought on record either as aresult of search or enquiry made by the Assessing Officer,which could establish the fact that the contents of the draft MOUwere true and the MOU was in fact acted upon. Therefore, in the absence of any such evidence, the MOU is merely a dumbdocument having no evidentiary value and hence cannot bemade the basis for making an addition. That apart, as has beenelaborately discussed by the CIT(A), even assuming the draftMOU to be correct, there is neither mention of the considerationpaid nor mode of such payment. Moreover, when as per thedraft MOU, the consideration has to be paid both to theassessee and M/s.Radha Realty Corporation Ltd., the entirepayment being the differential amount could not have beenassessed in the hands of the assessee alone. It is also a fact totake note of that the final sale deed dated 22.08.2007 in favourof DLF with regard to sale of land in dispute, does not mentionabout any payment being made to the assessee or hisnominees. That being the case, it cannot be said that theassessee has received the amount of Rs.13.81 crores in cashtowards the sale of land merely on the basis of the draft MOU. In this view of the matter, we find no infirmity in the reasonsdiscussed by the CIT (A) in the impugned order while deletingthe impugned addition made by the Assessing officer. Weaccordingly uphold the same, rejecting the grounds of theRevenue in this appeal. In the result, appeal of the Revenue for the assessment year2008-09, being I.T.A.No. 468/Hyd/2012, is dismissed.” In view of the categorical findings of fact recorded bythe Tribunal and there being no material to disprove thosefindings, we are of the considered opinion that there is noperversity in the order of the Tribunal and it is purely aquestion of fact and there is no question of law much lesssubstantial question of law warranting interference by thisCourt with the order under appeal. Hence, this appeal is devoid of merits anddismissed. No order as to costs. As a sequel to dismissal of the appeal,Miscellaneous Petitions, if any pending, shall stand disposed of as infructuous. _________________ G. CHANDRAIAH, J22.09.2015 bcj ______________________ CHALLA KODANDARAM,J