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TMI Blog1989 (1) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... siness of the assessee was exporting of man power out ofIndiain the name and style of M/s Selective Powers as a proprietor. One Saudi Arabian firm, M/s CEDARCO, Jeeddha appointed the assessee as its agent for recruiting personnel for various works or jobs inSaudi Arabia. The assessee himself worked for M/s CEDARCO in the year 1975 and rose to the rank of Personnel Director within a period of three years. While he was in service he used to carry on the business of recruitment of labour personnel on behalf of the foreign company. As years passed by he was able to develop his own contacts and on that basis he left his job with the Saudi Arabian concern and started the present business. 2.1 The business involved recruitment of various labourers, arrange for their pass ports, visas, medical clearance, air line tickets and other emigration formalities. Various persons, who were desirous of going abroad, used to deposit monies with the assessee for all the above, as well as towards the service charges. In course of the search conducted the Revenue Department had seized certain materials, which included blank receipts, which were partly used, in which the amounts were not specified but t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount was in the nature of security deposit only, which was why the amount was added as unexplained by the assessing officer. 3. As against these facts the CIT(A) had deleted the addition on the plea that the statements of Shri Mohammed Illias and Shri Nazar Ahmed had no validity in the eyes of law for the reason that they were recorded at the back of the assessee. The only other reason that emerges out of the CIT(A)'s order was that the assessee having shown Rs. 70,500 as having been refunded, it could not be said that the amount is not in the nature of security deposit and that is not intended to be refunded. The plea of the learned Sr. Deptl. Rep., Mrs. Kacker was that it is, thus, clear that CIT(A) had failed to examine the issue on merits and various evidences on the basis of which the assessing officer had made the addition. Reliance was placed on Nihori Lal Prabhu Dayal vs. CIT (1951) 19 ITR 240 (All), CIT vs. Rameshwar Prasad Bagla (1968) 68 ITR 653 (All), Newton Chikli Collieries Ltd. vs. CIT (1962) 44 ITR 495 (SC) and Workmen of Associated Rubber Industries Ltd. vs. Associated Rubber Industries and Anr. (1985) 48 CTR (SC) 355 : (1986) 157 ITR 77 (SC). 4. On this iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by passage of time and it shall remain the same as at the time when the receipt occurred. Since in the instant case the nature of receipt was that of a security deposit, it can never partake the character of Revenue. Reliance was placed on 22 ITD 9, Addl. CIT vs. Netar Krishna Sahgals Pvt. Ltd. (1983) 34 CTR (Del) 376 : (1983) 143 ITR 681 (Del); CIT vs. MP State Agro Industries Development Corporation (1983) 139 ITR 312 (MP); Bijli Cotton Mills (P) Ltd. vs. CIT (1971) 81 ITR 400 (All) and Parimisetti Seetharamamma vs. CIT (1965) 57 ITR 532 (SC). 5. Referring to pages 1 to 4 of his paper book, he submitted that in the cases of persons, who could not get their jobs, the amounts that were received had been refunded by means of cheques to them, which also goes to establish that the intention of the assessee was to refund the amount in case their jobs, for which they had approached the assessee, could not be done. This also goes to establish that the nature of the receipt, as was shown by the assessee, was in the nature of security deposit. 6. On this issue we have given our very careful considerations to the arguments advanced by the parties and that have been placed on our record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d observed earlier while referring to Exhibit A-18, that the receipts, which contained particulars of the persons, have been correlated with the persons with whom the agreements have been entered into and that these persons are listed in the registers and full particulars have been found to have been entered. Thus, doubting the veracity of these registers would be improper on facts. The agreement that was normally entered into with the person, gives the nature of job, which the particular person has sought out of India, the amount that he has deposited with the assessee for meeting of air ticket, medical expenses, service charges etc., the amount that was retained as deposit, which would be refundable on completion of the contract period with his employer and that the deposit shall not bear any interest. Each such format had been signed by the respective persons, whose passport number and full particulars are available in the registers. The security deposit in some cases is as high as 800 rupees. The service charges that had been charged from each of the labourers was a fixed sum of Rs. 300. Therefore, on these facts we find it rather difficult to reject or even suspect that the bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and respective advance accounts were transferred to the general advance a/c to which debits were appearing for the amounts refunded back to them. In a few other cases it represented squared up accounts, namely, who had sought the services of the assessee for going out of India but could not succeed in doing so, were refunded by means of cheques the amounts provided by them to the assessee. The CIT(A) found that the amount of Rs. 2,65,000 and Rs. 1,78,400 was part and parcel of the same item and accordingly he found after verifying the records, the amounts were in fact refunded to the persons and cannot be said to be unexplained. Against this the Revenue has come up in appeal and reliance was placed by the Sr. Deptl. Rep. on the order of the ITO while the assessee only placed reliance on the order of the CIT(A). 9. On these issues the assessee had provided in his paper book pages 1 to 4, the amount of advances received which were refunded in full and also copies of accounts in respect of advances received, which clearly indicate that they were transferred from the respective advances only. Therefore, to treat them as unexplained would be totally improper on facts and accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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