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TMI Blog2006 (8) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... h action was taken upon the assessee on 17th Aug., 1990 in which certain incriminating documents were found and seized. As per Annexs. A-6 to A-8 of the Panchnama, one notebook and loose papers relating to the construction of the house were seized, the total investment in construction on the basis of which was worked out at Rs. 11,77,807. These seized papers contained bills and vouchers, etc. On being called upon to explain the loose papers, it was stated on behalf of the assessee that the expenses recorded in a number of papers seized were repetitive and also included delivery challans for supply of material, which were substituted by bills later on and the Department had taken into account both the challans as well as the bills. After com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approach adopted by the AO. Valuation is a technical matter, which cannot be handled by all and sundry. The DVOs are experts in the field of valuation. The AO cannot step into the shoes of the Valuation Officer to presume further investment after receipt of report from the DVO that there is still some leakage, which has not been considered by the Departmental Valuation Cell. If the arbitrary enhancement is unloaded from the value determined by the DVO, we find that there is a total investment of Rs. 5,49,566 as determined by the DVO. The AO at p. 10 has discussed that the assessee had shown construction expenses in his balance sheet at Rs. 1,92,503. Further, the assessee's brother Shri Govind Ram surrendered a sum of Rs. 1.50 lakhs and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of assessment proceedings, the assessee was called upon to explain the source of deposits in the two accounts. It was submitted that these deposits were made by Shri Ghanshyam Balani and his son Shri Hargundas Balani and they were income-tax assessees. The AO observed that all the slips for deposits and all the cheques for withdrawals were made by the assessee from these bank accounts and even the forms for opening these accounts were prepared by him. Considering these facts, he made an addition of Rs. 34,000, which was deleted in the first appeal. 7. We have heard both the sides and perused the relevant material on record. It is noted that Shri Ghanshyam Balani is related to the assessee as uncle and Shri Hargundas Balani as cousin. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to note that the assessee was not allowed to cross-examine Shri Ghanshyam Balani to bring out a case in his favour. By considering these facts in totality, we are of the considered opinion that the learned CIT(A) was justified in deleting this addition. This ground is not allowed. 8. Third ground is against the deletion of addition of Rs. 39,458 representing interest on deposits found in the names of various family members. 9. Facts of this ground are that during the course of search, bank passbooks of assessee's wife, mother, sons and other relatives were found from the bedroom of the assessee in which huge deposits were made. The AO determined the total of the deposits at Rs. 5,48,069. It was observed that the genuineness of the deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition of Rs. 1,21,095, being interest receivable on the advance made to relatives was made which came to be deleted in the first appeal. 13. We have heard both the sides and perused the relevant material on record. It is obvious that the AO made addition by presuming that the assessee had diverted interest-bearing funds by advancing loans to the relatives without interest. No nexus worth the name has been established that interest-bearing funds were advanced by the assessee to these parties. We further note that the Tribunal in the case of assessee's brother in Govind Ram Chhugani vs. Asstt. CIT (2002) 77 TTJ (Jd) 339 has deleted similar addition which fact has not been controverted by the learned Departmental Representative. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative nature. After allowing deduction for speculative loss suffered by the assessee, the AO came to hold that there was net speculative loss of Rs. 34,829, which was added back. In the first appeal, the learned CIT(A) deleted this addition by observing that the AO had not been able to prove that there was no actual delivery of goods purchased by the assessee on which this loss was claimed. 16. After considering the rival submissions and perusing the relevant material on record, we observe that the bone of contention in this ground is the applicability or otherwise of s. 43(5), according to which, speculative transaction means a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is perio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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