2005 (9) TMI 222 - AT - Income Tax

Issues Involved:
1. Dismissal of cross-objection and appeal by the assessee.
2. Departmental appeals against the CIT(A) order for unexplained investments in property for various assessment years.
3. Reducing additions made by AO on account of unexplained investments in properties.

Detailed Analysis:

1. Dismissal of Cross-Objection and Appeal by the Assessee:
The learned counsel for the assessee did not press C.O. No. 3/Asr/1998 and ITA No. 571/Asr/1997 filed by the assessee for the assessment year 1993-94. Consequently, the cross-objection and appeal were dismissed.

2. Departmental Appeals Against the CIT(A) Order for Unexplained Investments in Property for Various Assessment Years:
The Departmental appeals in ITA Nos. 595/Asr/1997 and 596/Asr/1997 were filed against the common order of the CIT(A), Jalandhar, dated 8th September 1997, for the assessment years 1991-92 and 1993-94. The appeals arose from the search conducted under section 132 of the IT Act at the premises of the assessee, a property dealer, where various documents related to investments in real estate were found. The AO made certain additions against the assessee, which were subsequently deleted by the CIT(A).

3. Reducing Additions Made by AO on Account of Unexplained Investments in Properties:

ITA No. 595/Asr/1997 - Assessment Year 1991-92:
- Issue: The Revenue challenged the reduction of an addition of Rs. 2 lakhs to Rs. 69,500 made on account of unexplained investment for the purchase of a plot at Basti Danishmandan, Jalandhar.
- Facts: The AO made the addition based on the assessee's disclosure during the search. The assessee explained the investments through a cash flow statement and bank withdrawals. The CIT(A) found the source of Rs. 43,000 to be explained but did not believe the gift of Rs. 7,000 and part of the investment of Rs. 62,500.
- Judgment: The Tribunal upheld the CIT(A)'s decision, confirming the reduction of the addition to Rs. 69,500, as the assessee provided sufficient evidence to explain the investments.

ITA No. 596/Asr/1997 - Assessment Year 1993-94:
- Ground No. 1: Not pressed by the Departmental Representative as the CIT(A) had set aside the matter for reconsideration.
- Ground No. 2: The Revenue challenged the reduction of an addition of Rs. 1 lakh to Rs. 50,000 made on account of undisclosed investment in a 6 Marlas property in Avtar Nagar, Jalandhar.
- Facts: The AO made the addition based on the assessee's disclosure. The assessee explained the source of the investment through cash in hand and bank withdrawals. The CIT(A) accepted part of the explanation and restricted the addition to Rs. 50,000.
- Judgment: The Tribunal upheld the CIT(A)'s decision, confirming the reduction of the addition as the assessee provided sufficient evidence to explain the investment.

- Ground No. 3: The Revenue challenged the deletion of an addition of Rs. 88,400 out of a total addition of Rs. 1 lakh made on account of advance payment for a plot in Tagore Nagar, Jalandhar.
- Facts: The AO made the addition based on the assessee's disclosure. The CIT(A) found that the assessee had sufficient withdrawals from the bank to explain the investment and allowed the credit of Rs. 88,400.
- Judgment: The Tribunal upheld the CIT(A)'s decision, confirming the deletion of the addition as the assessee provided sufficient evidence to explain the investment.

- Ground No. 4: The Revenue challenged the deletion of an addition of Rs. 1,40,000 made on account of unexplained investment in a plot at Basti Sheikh, Jalandhar.
- Facts: The AO made the addition based on the assessee's disclosure. The CIT(A) found that the investment pertained to an AOP and not to the individual assessee.
- Judgment: The Tribunal upheld the CIT(A)'s decision, confirming the deletion of the addition as the investment was related to an AOP and not the individual assessee.

Conclusion:
Both the appeals of the Revenue were dismissed, and the appeal and cross-objection filed by the assessee were also dismissed. The Tribunal confirmed the CIT(A)'s decisions on all the issues, finding no merit in the Revenue's appeals.

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