9911796707
TMI Blog2014 (10) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... 8% on these receipts - Therefore this ground is partly allowed. Unexplained cash credits u/s 68 – Held that:- The matter was remanded to the AO and the AO has made enquiries - In response to the query u/s 133(6) Matchless Associates had clearly mentioned the fact regarding purchase of property jointly with Pritam Singh i.e the assessee and the fact that M.S. 5 lakh withdrawn by Hardeep Singh on various dates which becomes clear from the copy of the bank account placed - Hardeep Singh has clearly stated in his letter that he was employed by the assessee and was deputed to Gurdaspur site and the amounts were withdrawn from the bank and were handed over to Pritam Singh - clearly the assessee has discharged the onus which was put on the assessee and the AO has not made any further inquiry – the AO is not right to reject this evidence without further enquiry – the order of the CIT(A) is set aside – Decided in favour of assessee. Addition of opening/closing work in progress – Total contract receipts received from PBIL Apex Consortium Ltd. treated as income – Held that:- The income and expenditure account clearly show that opening stock of 214700/- closing stock is also shown at 214700/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction, only document filed is a letter from M.S. Alagh stating that he has purchased a truck and a jeep - Even PAN No is not mentioned in such letter - during hearing whether evidence in the form of transfer of vehicles by way of endorsement in the registration certification is there, the assessee showed inability to file such evidence - in respect of the transaction the assessee has not discharged his burden and the addition has been rightly made by the CIT(A) - Decided partly in favour of assessee. Validity of transaction - Cash withdrawal or cheque withdrawal – Held that:- The contention of the assessee is to be accepted that once additional evidence was accepted and during verification in the remand proceedings certain further documents were filed - all the evidences were filed including a certificate from bank - Certificate from the bank show that through cheque No. 252583 cash was withdrawn - This evidence cannot be brushed aside by simply saying that cash was withdrawn through Sarabjit Singh who is only a domestic help - If the Revenue had any doubt the AO should have made further enquiry during assessment proceedings – thus the order of the CIT(A) is to be set aside – ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) with a request to admit additional evidence. 3. The Ld. CIT(A) had admitted the additional evidence and referred the same to Assessing officer for remand verification. In this background most of the enquiries were conducted during appeal / remand. 4. ITA No. 1177/Chd/2012 - A.Y 2003-04 - Late Shri Pritam Singh In this appeal the assessee has raised the following grounds: "1. That authorities below has erred in law and facts in framing the assessment without affording proper opportunity of being heard to the appellant. 2. That authorities below has erred in law and facts to appoint Special Auditor in an automatic manner without considering the facts of the case and consequently the appointment of the auditor is bad in law. 3. That the appointment of special auditor is bad in law and is not in accordance with the spirit of law under the provisions of section 142(2A) of the Act but only to gain time for completing the assessment which is barred by limitation. 4. That Ld. CIT(A) has erred in law and facts in confirming the additions of ₹ 15,000/- comprising ₹ 10,000/- on account of purchase of DD in cash and ₹ 5,000/- paid for purchase of DD for IELTS. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 078810/-. Therefore according to the Assessing officer the assessee had under reported the income to the tune of ₹ 6473615/- and therefore this sum was added to the income of the assessee. 7. Before the Ld. CIT(A) it was mainly submitted that addition is made on the basis of statement of accounts prepared by the special auditor. It was pointed out that some wrong entries were made in the profit and loss account and therefore entire addition was not justified. It was pointed out that certain receipts from Drainage Division, Amritsar in the proprietary concern known as Matchless Associates were there. Most of these receipts were on account of earlier securities etc. 8. In respect of other receipts amounting to ₹ 2053687/-in the hands of G.M. Construction etc it was stated that for including these works the assessee had incurred expenses also which was mainly consisting of cash. The Cash was withdrawn from the banks which was not taken by the Special auditor. Supplementary cash book was maintained which gave correct picture and had been verified by the Assessing officer during remand proceedings. 9. The Ld. CIT(A) after examining the submissions noted that Executive Eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the credit entries and has not considered the self withdrawals for recording expenses. That is why the profit has been reflected at 80 to 90% of the receipts by the special auditor. The assessee has further prepared a supplementary cash book which was submitted before the Ld. CIT(A) as additional evidence which incorporated the receipts as well as withdrawals in the respective years. In respect of this additional evidence it has been observed at page 9 of the Ld. CIT(A) as under: "Therefore considering the facts and circumstances of the case, and in all fairness, I hold that the request for admission of additional evidence filed u/Rule 46 A (1)(d) deserves to be acceded to being necessary for disposal of the appeals(s) on merits. However, the nature of the evidence in respect of each of the issues concerned is discussed respectively thereunder. As such, the additional evidence is allowed to be admitted at this juncture and the appeal of the assessee is disposed on merits of the case." After making above observation the remand report was sent to the Assessing officer. Copy of the remand report has been enclosed at page 16 to 30 of the paper book and at page 28 & 29 rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidence but while giving relief the supplementary cash book was not accepted despite the fact that same was verified by the Assessing officer. Therefore this finding is not correct. 17. On the other hand, the Ld. D.R. for the Revenue supported the order of the Ld. CIT(A). 18. After considering the rival submissions and the material on record, we would like to point out that after verification of supplementary cash book Assessing officer should have given effect to consequential facts. However, in any case since we have already accepted the theory and this ground has become infructuous and we decline to adjudicate this ground in detail. 19. In the result, ITA No. 11 77/Chd/201 2 is partly allowed. 20. ITA No. 1173/Chd/2012 - A.Y 2004-05 - Late Shri Pritam Singh 21. In this appeal the assessee has raised the following grounds: "1. That authorities below has erred in law and facts in framing the assessment without affording proper opportunity of being heard to the appellant. 2. That authorities below has erred in law and facts to appoint Special Auditor in an automatic manner without considering the facts of the case and consequently the appointment of the auditor is bad i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince the same have bearing on the issues required to be adjudicated before us, therefore in the interest of justice this application is being allowed and assessment orders in case of S.P. Singh for various years and order of the Settlement Commission in case of K.D. Sharma is admitted. 26. Ground No. 4 - Since no evidence was filed during assessment proceedings therefore a sum of ₹ 2035832/- was added to the income of the assessee. 27. Before the Ld. CIT(A) it was submitted that accounts of certain parties were running accounts and special auditor has simply taken the credit entries without giving any benefit of the debit account of same parties. It was further stated that a sum of ₹ 536500/- was received from M.S & Co. out of which ₹ 436500/- was directly paid by this party against property No. BMM 373 Ph 11, Mohali which was purchased along with assessee and this party had 30% share in the said property. The balance of ₹ 1 Lakh was given on 27.11.2003 by bank draft. The Assessing officer made enquiries in respect of receipts during remand report but observed that reply given by Manjit Singh do not prove ingredients of Sec 68 of the Act. In the counter co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee firm. Hardeep Singh in response to the query has confirmed this fact vide letter dated 11.6.2012 to the Assessing officer and copy of the letter is placed at page 66 of the paper book. 31. On the other hand, the Ld. D.R. for the Revenue strongly supported the order of the Assessing officer and the Ld. CIT(A). 32. After considering the rival submissions and the material on record, we find that the matter was remanded to the Assessing officer and the Assessing officer has made enquiries. In response to the query u/s 133(6) Matchless Associates had clearly mentioned the fact regarding purchase of property jointly with Pritam Singh i.e the assessee and the fact that M.S. & Co. kept 30% share. PAN number and acknowledgement of return etc. have been filed. Even the copy of agreement showing 30% share belonging to him has been filed at page 35 of the paper book. We fail to understand that after receiving this information no further enquiry has been made then such evidence cannot be ignored. Therefore we are of the opinion that this addition is not justified. 33. Similarly as far as addition on account of receipt of ₹ 5 lakh has been made this amount has been withdrawn by Ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out that ₹ 1579700/- was credited in the books of G.M. Construction which comprised following items: GM Construction Co. 29.05.2003 PBIL APEX CONSORTIUM LTD 295,000.00 25.06.2003 PBIL APEX CONSORTIUM LTD 120,000.00 25.06.2003 PBIL APEX CONSORTIUM LTD 100,000.00 25.06.2003 PBIL APEX CONSORTIUM LTD 300,000.00 25.06.2003 PBIL APEX CONSORTIUM LTD 550,000.00 TOTAL 13,65,000.00 Opening Work-in- Progress 2,14,700.00 15,79,700.00 The amount of ₹ 1600174/- were shown in the books of Matchless Associates and comprised of the following amounts: 30.04.2003 DRAINAGE DIVISION AMRITSAR 700,174.00 29.05.2003 PBIL APEX CONSORTIUM LTD 250,000.00 25.06.2003 PBIL APEX CONSORTIUM LTD 150,000.00 04.08.2003 PBIL APEX CONSORTIUM LTD 450,000.00 06.08.2003 PBIL APEX CONSORTIUM LTD 50,000.00 TOTAL 1,600,174.00 It was pointed out that as far as sum of ₹ 1365000/- received from PBIL Apex Consortium Ltd (in short PBIL), same consist of construction receipts ₹ 214700/- pertain to opening and closing work in progress which we have discussed above while adjudicating ground no. 5. Similarly sum of ₹ 9 lakhs shown in Matchless Associates comprise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from S.P. Singh. Since on the same day a sum of ₹ 4,50,000/- from S.P. Singh was received, so this mistake was committed. In fact this DD was purchased out of cash and same was added in the supplementary cash book. In respect of other amounts relevant evidence was filed and the same has been accepted by the Ld. CIT(A) and addition amounting to ₹ 955223/- was deleted by the Ld. CIT(A) against which the Revenue is in appeal. 45. The Ld. CIT(A) did not accept the explanation for ₹ 450000/- because according to her theory of supplementary cash book was in contravention of rule 46A. 46. Before us, the submissions made before the Ld. CIT(A) were reiterated. Reference was made to the remand report wherein supplementary entries are stated to be verified by the Assessing officer. 47. On the other hand, the Ld. D.R. for the Revenue strongly supported the order of the Ld. CIT(A). 48. After considering the rival submissions and the material on record we find force in the submissions of Ld. Counsel for the assessee. As observed in Assessment year 2003-04 in ITA No. 1177/Chd/2012 the supplementary cash book was originally admitted by the Ld. CIT(A) and sent for remand rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd ₹ 2,00,000/- from Sharma Associates. 5. That LD. CIT(A) has erred in law and facts in confirming a disallowance of ₹ 50,000/- on account of Life Insurance Premium paid despite the fact that such expense has not been allowed as an expenditure." 53. Grounds No. 1 to 3 and 5 were not pressed before us, therefore same are dismissed as not pressed before us. 54. Ground no. 4 - After hearing both the parties we find that during assessment proceedings the Assessing Office noticed that special auditor has made observations that following amounts were found to have been received from various parties and are shown in the table below: Pritam Singh Credit Debit Balance Gurjit Singh 545,615 2997730 - Sharma Associates 200,000 Nil 200,000 M/s Matchless Associates (Prop. Pritam Singh) R.K. Associates 450,000 Nil 450,000 Executive Engineers 1,087,717 1,087,717 0 Amritsar Drainage R N Highways 425,000 1600000 - M/S GM Construction (Prop. Pritam Singh) M.S. Alagh 300,000 Nil 300,000 R.K. Associates 400,000 Nil 400,000 Total 3,408,333 1350000 Special auditor had asked the assessee to file confirmation along with balance sheet etc of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er had any doubt he should have conducted further enquiry and could not have rejected this evidence without any further enquiry. Therefore we are of the opinion that the assessee has discharged the burden of proving the genuineness of this transaction of ₹ 2 lakhs. 59. In respect of a sum of ₹ 4.50 lakhs and ₹ 4 lakhs received from R.K. Associates, in response to the enquiry by the Assessing officer a letter was written by R.K. Associates in which it was clearly stated that they were having 25% share in property No. BMM 373 Ph 11, Mohali which was purchased through auction. Other details of payment through DD were also furnished. Even copy of the agreement was filed. However, PAN of R.K. Associates was not mentioned in the confirmation. Thus the assessee had clearly failed to discharge the onus and therefore we direct the Assessing Officer to confirm this addition of ₹ 8.50 lakhs. 60. As far as a sum of ₹ 3 lakhs received from G.M. Construction is concerned, only document filed is a letter from M.S. Alagh stating that he has purchased a truck and a jeep. Even PAN No is not mentioned in such letter. We have asked the Counsel for the assessee during he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced before the Ld. CIT(A) after admitting the same u/r 46A(1)(d) and despite the fact that Assessing officer has confirmed the verification of debit/credit entries recorded in the supplementary cash book." 64. Out of above grounds, grounds No. 1,2, & 3 were not pressed before us, therefore same are dismissed as not pressed before us. 65. In this case the assessee has filed an application for admission of following documents: (i) Order of Settlement Commission - Pg 1 to 10 of application (ii) Copy of reasons recorded in the case of S.P. Singh by the D.C.I.T Internal Taxation Pg 11-12 It was stated that these documents were obtained by the assessee after the order was received from Ld. CIT(A). It was further stated that the assessee has raised many loans from K.D. Sharma and who has surrendered these amounts before the Settlement Commission. Therefore this document is relevant. Similarly the reasons recorded for reopening of the assessment in the case of S.P. Singh are relevant because S.P. Singh happens to be son of the assessee from whom various amounts were received as loan/gift. The Ld. Counsel for the assessee made a prayer that since these documents are relevant they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting to ₹ 10297500/- in the name of TRN Land Developers Private Ltd (in short TRN) following comments were given by the DCIT in the remand report: Assessee has contended that a sum of ₹ 1,02,97,500/- from M/s TRN Land Developers Private Limited was received during the year. Out of above, a sum of ₹ 15,97,500/- was paid vide DD No. 10548 drawn on Punjab & Sind Bank on 20.01.2006 against a property purchased by Late Sh. Pritam Singh (Plot 374, Phase - XI, Mohali) and Balance of ₹ 8700000/- (comprising ₹ 22,00,000/- vide Ch no 48204 dated 24.01.2006 drawn on Punjab & Sindh Bank, ₹ 40,00,000/- vide Ch No 48205 dated 24.01.2006 drawn on Punjab & Sind Bank & ₹ 2500000/-vide Ch No. 48209 dated 01.03.2006 drawn on Punjab & Sind Bank) was directly paid by M/s TRN Land Developer P Ltd. to Ashok Kumar against a property purchased by Late Sh. Pritam Singh (#3060, Sector - 20, Chandigarh. The Assessing officer had further pointed out that balance sheet as on 31.3.2006 of the said company was also filed which clearly depicts that a sum of ₹ 10297500/- was paid to Apex Exports Proprietor Gurjit Singh. 72. The Ld. CIT(A) did not find force in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y thereafter does the burden shift to the AO. Here, it is not understood as to why such a huge sum of ₹ 2,05,00,000/- is ostensibly shown as paid to the company by one KD Sharma, and on his apparent directions, the company in turn advances ₹ 1.02 lakhs to the assessee. Thus considering the gamut of the case and the inter-twining of the transactions without any shred of evidence is held to be fallacious. The assessee is therefore held not to have discharged the burden cast upon him to substantiate the genuineness of the credit. In other words the action of the AO is upheld." In respect of addition amounting to ₹ 950000/- said to have been received from Sharma Associates by transfer of funds the Assessing officer in his remand report stated that a copy of return was filed by Mohinder Sharma Proprietor Sharma Associates but the same did not prove the ingredients of Sec 68. In his comments the assessee has stated that it is not clear that which ingredients were not complied and if the Assessing officer had any doubt he should have asked the assessee to file further documents. The Ld. CIT(A) did not find force in the submissions and observed that these submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the Ld. CIT(A) wrongly confirmed this addition by observing that these documents were not given earlier. Once additional evidence was admitted under rule 46A, same has to be considered and acted upon. 74. On the other hand, the Ld. D.R. for the Revenue strongly relied on the order of Ld. CIT(A). 75. After considering the rival submissions and the material on record, we find force in the submissions of the Ld. Counsel for the assessee that once additional evidence was admitted and same was sent for remand proceedings and during assessment proceedings Sharma Associates confirmed having paid a sum of ₹ 950000/- and even PAN was given then either the Assessing officer should have accepted the same or made further enquiries. Evidence can not be brushed aside simply because it is filed late therefore we set aside the order of the Ld. CIT(A) and delete the addition of ₹ 950000/-. 76. As far as addition on account of TRN is concerned we find force in the submissions of the Ld. Counsel for the assessee. In response to the enquiry made during assessment proceedings TRN has stated vide letter dated 11.6.2012 as under: Dated: 11.06.2012 To, Deputy Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were made with assessee group. In fact K.D. Sharma had surrendered a sum of ₹ 12 crore and therefore sources in the hand of the TRN stand explained. Once the source of investment and PAN was available and if the Assessing officer still had doubt then he should have asked the assessee or that party to furnish further papers. The detailed evidence cannot be brushed aside particularly because of the fact that the depositor had already paid taxes and sources stand explained in the hands of the assessee. Therefore we set aside the order of the Ld. CIT(A) and delete the addition of ₹ 10297500/-. 77. Ground No. 5 - After hearing both the parties we find that during assessment proceedings the Assessing Office noticed that special auditor has observed that from perusal of books of accounts it was found that there was some withdrawal from bank which was shown as cash withdrawal. Details are as under: Centurion Bank of Punjab 25945 Pritam Singh Date Particular Amount 27.07.2005 Sarabjit Singh 4,00,000 Total 4,00,000 Special auditor has further observed that this bank transaction was cheque payment but wrongly shown as cash in hand. Since the assessee failed to file any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same is filed. As these details were not filed during the course of assessment proceedings as such the same should not be accepted at this stage." Above clearly show that all the evidences were filed including a certificate from bank (copy placed at page 46 of the paper book). Certificate from the bank show that through cheque No. 252583 cash was withdrawn. This evidence cannot be brushed aside by simply saying that cash was withdrawn through Sarabjit Singh who is only a domestic help. If the Revenue had any doubt the Assessing officer should have made further enquiry during assessment proceedings therefore we set aside the order of the Ld. CIT(A) and delete the addition of ₹ 4 lakhs. 83. Ground No. 7 - After considering the rival submissions and the material on record, we find that during assessment proceedings the Assessing officer noticed that there were certain credits in the books of accounts of the assessee which are shown as under: Name of the Concern Gross Turnover Net Profit Indirect Income credited to P&L account Net profit from business Matchless Associates 42,21,515/- 36,81,683/- 21,309/-(interest on FDR) 36,60,374/- G.M. Construction Co. 68 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olding the same is cheque withdrawal and not a cash withdrawal. 5. That Ld. CIT(A) has erred in law and facts in confirming an addition of ₹ 5,21,024/- on account of undisclosed investment in jewellery. 6. That Ld. CIT(A) has erred in law and facts in confirming the addition of ₹ 2,00,000/- on account of amount credited in the bank account." 89. Out of above grounds , grounds No. 1 to 3 & 6 were not pressed before us, therefore same are dismissed as not pressed. 90. Ground No. 4 - After hearing both the parties we find that during assessment proceedings the Assessing Officer noticed that special auditor had examined the books of accounts and found that there were some withdrawal from bank which was shown as cash withdrawal as per following detail: Centurion Bank of Punjab 18735 Pritam Singh Date Particular Amount 05.05.2008 Dalip Singh 8,54,000 08.05.2008 Dalip Singh 7,00,000 21.05.2008 Dalip Singh 9,00,000 Total 24,54,000 Special auditor had further observed that these payments are cheque payments. In response to the query raised by the Assessing officer the assessee failed to file any plausible explanation. Therefore the Assessing officer adde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bank to withdraw the cash. Therefore we set aside the order of the Ld. CIT(A) and delete this addition. 96. Ground no. 5 - After hearing both the parties we find that during assessment proceedings the Assessing Office noticed that jewellery valued ₹ 1423406/- was found from the residence of the assessee and Smt. Amrit Kaur. Detail of jewellery is as under: Sl.No. Date of seized Name of the assessee and premises Gross weight in gms. Amount(Rs.) 1. 27.06.2008 Shri Pritam Singh & Smt. Amrit Kaur, Locker No. 387, Punjab & Sind Bank, Phase 5, Mohali 1040.790 Rs.12,52,726/- 2. Do Shri Pritam Singh & Amrit Kaur, Locker No. 64, Canara Bank, Phase 7, Mohali 142.250 Rs.1,70,680/- Total 1183.04 Rs.14,23,406/- In response to a query it was mainly stated that jewellery was negligible and was received by the assessee at the time of marriage and birth of his children from his parents and from his in-laws. Further reliance was placed on the instructions issued by CBDT vide Instruction No. F.286/63/93-IT(Inv)-11 dated 11.5.1994. The Assessing officer accepted jewellery of 750 gms in view of the instructions of the CBDT and added the balance jewellery of 433 gms as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rinderpal Singh is reduced and further credit in terms of Board Instruction is allowed then position becomes as under: Total jewellery found 2779.987 gm Less Jewellery belonging to him 731.500 gm Net jewellery 2048.480 gm Further credit required to be given for married female is 500 gm each, unmarried female at 250 gm and male members at 100 gm. Therefore credit would be as under: Mrs. Amrit Kaur w/o Pritam Singh 500 gm Mrs. Ranjit Kaur w/o Gurjit Singh (son) 500 gm Ms. Ravnit Kaur (grand daughter of Pritam Singh and daughter of Gurjit Singh 250 gm Pritam Singh and Gurjit Singh @ 100 gm 200 gm 1450 gm Therefore net jewellery which is required to be added because no explanation is available is 598.48 gms. This jewellery is required to be added in the hands of Pritam Singh and Gurjit Singh. Since this issue has been considered jointly no details have been furnished before us for individual jewellery and therefore we hold that out of this jewellery weighing 298.48 gms should be added in the hands of the assessee and balance 300 gms should be added in the hands of Gurjit Singh (since those appeals are also being adjudicated through this order). This proposal was accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly when the amount is received from outside India the same should be credited through authorized dealer only and if the assessee has filed the bank account from a Bank which is not authorized dealer then the amount could not be given except through authorized dealer. In this background and further discussion the amount received during the year was not accepted and addition of ₹ 1405223/-was made in the hands of the assessee. 106. Before the Ld. CIT(A) certain documents were filed which were sent for verification during remand proceedings. In the remand report Assessing officer again reiterated that in the absence of FIR's these credits have not been established by the assessee. The assessee also gave certain comments. The Ld. CIT(A) after examining this issue decided the same in favour of the assessee. 107. Before us, the Ld. D.R. for the Revenue strongly supported the order of Assessing officer. 108. On the other hand, the Ld. Counsel for the assessee submitted that Shri Surinderpal Singh son of the assessee was living in Dubai and is an NRI. Pursuant to a search on the assessee, even the cases of Surinderpal Singh were reopened specifically to verify the gifts made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransaction. Once the gift has been held to be genuine, there can be no dispute that the same will have to be accepted as genuine in the hand of the assessee. The assessee further has discharged his onus cast upon him by producing the order of assessment of Shri. S.P. Singh dated 30.12.2011 for AY 2009-10 Passed by the DDIT, International Taxation, Chandigarh. Thus, I accept the contention of the assessee and the ground of appeal is allowed." Thus from above it becomes clear that the Revenue has already accepted the fact of giving gifts by Shri Surinderpal Singh. We have already admitted the application for additional evidence in ITA No. 1174/Chd/2012 in case of assessee. Relevant portion of reasons recorded for reopening of the assessment reads as under: "The assessee S.P. Singh has given gifts of ₹ 4216458/- to his father Shri Pritam Singh and ₹ 1490000/- to his brother, Gurjit Singh during the year. The assessee has not field income tax return for Assessment year 2005-06. Entire amount has been remitted by him from UAE. Thus the source of gift of ₹ 5706458/- (Rs. 4216458 + ₹ 1490000) made by the assessee needs to be verified with respect to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived from Smt. Amrit Kaur when assessee failed to prove the genuineness of the gift?" 114. Grounds No. 1 to 3 - This issue is identical to the issues raised in ITA No. 1193/Chd/2012 for Assessment year 2004-05. Since the facts and contentions are same, therefore following that order we confirm the deletion of gifts received by the assessee from Surinderpal Singh. 115. Ground no. 5 - After hearing both the parties we find that during assessment proceedings the Assessing officer noticed that a few credits were found in the books of the assessee from Smt. Ranjit Kaur (daughter-in-law): Sr.No. Date Particulars Amount 1. 02.07.2004 Payment made by Ranjit Kaur to AK Sahney for const. 23,297 2. 10.01.2005 By Canara Bank - 495 being maturity of FDR made in Ranjit Kaur 5,45,616 5,68,913 Initially special auditor asked for various details of the gifts which were not given to the auditor. Assessing officer further observed that perusal of the assessment recorded by Smt. Ranjit Kaur showed that she was asked to furnish the details of the gifts made during the year but she had replied that no gifts were made by her. In this background a sum of ₹ 560913/-was added t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Hence I do not think it material that the addition should be sustained because the donor had made no such claim in her assessment proceedings. The relationship between in the assessee and the donor is also not in dispute. Hence the only issue left is the genuineness / purpose of transaction and in view of the fact that it is within the close family, the addition is therefore deleted." Above clearly show that once the gifts have been correctly reflected in the accounts and the details of the cheques etc. were found to be correct by the Assessing officer then there was no scope for denying the same and the Ld. CIT(A) has correctly accepted the pleadings of the assessee. Therefore we confirm the order of the Ld. CIT(A). 121. Ground No. 5 - In case of gifts from Smt. Amrit Kaur, addition was made on the same footing and similar contentions were raised before the Ld. CIT(A) as in case of Smt. Ranjit Kaur. This addition was also deleted by the Ld. CIT(A) on similar reasoning as in case of Smt. Ranjit Kaur. Even before us both the parties made similar contentions as in case of Smt. Ranjit Kaur. 122. After considering the above submissions the LD. CIT(A) has noted the comments of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. CIT(A) has correctly accepted the pleadings of the assessee. Therefore we confirm the order of the Ld. CIT(A). 123. In the result, appeal of the Revenue is dismissed. 124. ITA No. 1195/Chd/2012 - AY 2006-07 - Revenue 125. In this appeal the Revenue has raised the following grounds: "1. Whether the Ld. CIT(A) is justified in law and on facts in deleting the addition of ₹ 155,50,000/- on account of gift received from Shri S.P. Singh when assessee failed to prove the genuineness of the gift. 2. Whether on facts and circumstances of the case LD. CIT(A) was justified in accepting the genuineness of a gift from Non Resident Indian (NRI) brother of the assessee, in total disregard to the ratio laid down by the Hon'ble Supreme Court in the case of CIT Vs. P.R. Ganapathy, (2012-TIOL-76-SC- IT) that the assessee has to show adequacy of funds in the hands of foreign donor for aforesaid gift donation? 3. Whether on facts of the case adverse and rebuttable presumption should have been drawn about genuineness of the gift when the assessee over a period of seven Assessment year s has received a total sum of ₹ 667,05,848/- crores as gift." 126. After hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect. His only objection was that the donor during the course of her own assessment proceedings had made no such claim of gifting any amount to her husband. Be that as it may these transactions had been verified by the Assessing officer. Hence I do not think it material that the addition should be sustained because the donor had made no such claim in her assessment proceedings. The relationship between in the assessee and the donor is undisputed. The credit worthiness and the identity of the donor is also not in dispute. Hence the only issue left is the genuineness / purpose of transaction and in view of the fact that it is within the close family, the addition is therefore deleted." 133. We find nothing wrong with the order of the Ld. CIT(A) because the Assessing officer has himself accepted that the contention of the assessee was correct. Accordingly we confirm the order of the Ld. CIT(A). 134. In the result, appeal of the Revenue in ITA No. 1195/Chd/2012 is dismissed. ITA No. 1196/Chd/2012 - AY 2007-08 - Revenue 135. In this appeal the Revenue has raised the following grounds: "(i) Whether the Ld. CIT(A) is justified in law and on facts in deleting the addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, in total disregard to the ratio laid down by the Hon'ble Supreme Court in the case of CIT Vs. P R Ganapathy (2012-TIOL-76-SC- IT) that the assessee has to show adequacy of funds in the hands of foreign donor for aforesaid gift donation ? (iii) Whether on facts of the case adverse and rebuttable presumption should have been drawn about genuineness of the gift when the assessee over a period of seven Assessment Years has received a total sum of ₹ 6,67,05,848/- crores as gift? (iv) Whether the Ld. CIT(A) on facts and circumstances of this is justified in law and on facts in deleting the addition of ₹ 20,32,632/- on account of money received from Smt. Amrit Kaur when assessee failed to prove the genuineness of the gift?" 140. Grounds No. 1 to 3 - After hearing both the parties we find that the issues raised through these grounds are identical to the issues raised in ITA No. 11 93/Chd/2012. Since the facts of the case and the contentions of both the parties are identical to the issues raised in ITA No. 1193/Chd/2012 for Assessment year 2004-05, following that we have decide these issues against the Revenue. 141. Through ground No. 4 the Revenue has raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the contention in the remand report but still gift amounting to ₹ 23497/- was not accepted because Smt. Ranjit Kaur has not stated in her statement that such gift was given. The Ld. CIT(A) allowed relief on the basis of remand report by holding that merely because Smt.Ranjit Kaur did not mention about this gift during her statement would not prove anything when the documents clearly show the fact of gift. Therefore following our reasoning given for acceptance of gift in case of Smt. Amrit Kaur in Assessment year 2006-07 and 2007-08 we confirm the order of the Ld. CIT(A). 146. Ground No. 5 - Through this ground the Revenue has raised the issue of gifts received from Smt. Amrit Kaur which has been deleted by the LD. CIT(A) on the basis of remand report which is identical as in Assessment year 2006-07 in ITA No. 11 95/Chd/2012, therefore following that order in respect of ground no. 4 we decide this issue against the Revenue. 147. In the result, appeal of the Revenue in ITA No. 1198/Chd/2012 is dismissed. ITA No. ITA No. 1166/Chd/2012 - A.Y 2003-04 - Gurjit Singh 148. In this appeal the Revenue has raised the following grounds: "1. That authorities below has erred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 1939238/- was added to the income of the assessee. 151. On appeal before the Ld. CIT(A) various details were filed which were sent for remand report. In the remand report the Assessing officer noted that the assessee has claimed that these were running accounts and ultimately net balance of ₹ 51205/- is recoverable from the said company. However, since the confirmation and PAN was also not filed, the credit could not be accepted. 152. Before the Ld. CIT(A) in counter comments to the remand report, it was stated that these transactions were verified by the Assessing officer and the Assessing officer has accepted that ultimately net balance of ₹ 51205/- was recoverable from the said company. Since the Assessing officer did not make any further enquiry, therefore addition was not justified. 153. In respect of other sum of ₹ 544238/- stated to have been received from G.M. Hirer it was claimed before the Ld. CIT(A) that these amounts were received in the following concerns: i GM Hirer ₹ 4,00,000/- received in the hands of Gurjit Singh ii GM Hirer ₹ 1,34,238/- received in the hands of M/s Suridnerpal Singh iii GM Hirer ₹ 10,000/- received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... took place in the name of Gurjit Singh and his proprietary concern, Pritam Singh & Sons and Surinderpal Singh. Copy of the running account was filed (copy of which is available at page 13 to 15 of paper book). The company had sufficient capital. In this regard reference was made to page 16 which is copy of the report from ROC showing that said company had paid up capital of ₹ 7.99 crores. It was further contended that the Assessing officer has accepted running accounts because addition has been made only of the peak amount which means that other transactions have been accepted by the Assessing officer. 158. On the other hand, the Ld. D.R. for the Revenue submitted that identity, credit worthiness and genuineness of the party has not been proved. The assessee has failed to prove the credit. It is wrong to say that the Assessing officer has applied peak theory because the Assessing officer has basically made addition of balance outstanding in the firm. Merely existence of high amount of share capital does not prove anything. No details of PBIL were filed. 159. We have gone through the rival submissions carefully. As far as various amounts received from G.M. Hirer are concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /C No. 50384 REceipt 1 2000000 9.4.2002 To Andhra Bank A/C No. 50384 Payment 2 1500000 20.5.2002 To Andhra Bank A/C No 50384 Payment 14 130000 25.5.2002 To Andhra Bank A/c No. 50384 Payment 15 550000 5.6.2002 To Andhra Bank A/C No. 50384 Payment 17 200000 7.6.2022 By Andhra Bank A/c No. 50384 Receipt 5 850000 19..7.2002 To Andhra Bank A/C No. 50384 Ch No. 0797754 Payment 23 1500000 1.8.2002 To Interest due by Andhra Bank A/C No. 50384 Ch Receipt 6 1510418 No. received from Pbil 1.1 1.2002 By Andhra Bank A/C No. 50384 Receipt 14 300000 To closing balance 3890418 1270000 5160418 5160418 5160418 1.4.2003 By opening balance Journal 3 1270000 1.4.2003 To S.P. Singh Prop Gurjit singh Being PBIL balance THEREFORE to M/s SP Singh Journal 3 1270000 1270000 1270000 The above clearly show that the amounts have been taken for some purpose because the assessee was also director there. Further admittedly the amounts have been finally paid and ultimately there is a debit balance of ₹ 15205/- therefore in our opinion, this seems only a current account and this addition is not justified. Accordingly we set aside the order of the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 to 38, therefore allowances like depreciation are not separately allowable if income is assessed u/s 44AD. Therefore in view of this provisions,, in our opinion, once the income has been assessed u/s 44AD then further disallowance should not have been made. Accordingly we set aside the order of the Ld. CIT(A) and delete this addition. 167. In the result, appeal of assessee in ITA No. 1166/Chd/2012 is partly allowed. ITA No. 1167/Chd/2012 - A.Y 2004-05 - Gurjit Singh 168. In this appeal the assessee has filed the following grounds: "1. That authorities below has erred in law and facts in framing the assessment without affording proper opportunity of being heard to the appellant. 2. That authorities below has erred in law and facts to appoint Special Auditor in an automatic manner without considering the facts of the case and consequently the appointment of the auditor is bad in law. 3. That the appointment of special auditor is bad in law and is not in accordance with the spirit of law under the provision of section 142(2A) of the Act but only to gain time for completing the assessment which is barred by limitation. 4. That CIT(A) has erred in law and facts in confirmi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from M.S. & Co. during the year from Manjit Singh son of Raj Singh Porp M.S. & Co. PAN AQPPS6409 "A reply to notice u/s 133(6) was filed alongwith copy of account & a copy of return has been filed by one Shri Manjit Singh, Prop. M.S. & COMPANY. The documents filed by Shri Majit Singh do not prove the ingredients of s. 68. Therefore, the claim of assessee can not be accepted." Assessee in his counter comments has stated that "The documents were filed by one Manjit Singh Prop M.S. & Co. do not prove the ingredients of s. 68". It is very difficult to understand as to which ingredient is not proved as explanations put forth by M.S. & Co. is self explanatory. That in case AO needs further clarification he was free to ask from Manjit Singh which he chooses not to do. As such there is no justification in confirming any addition on this account. iii. G M HIRER ₹ 300000/- DCIT in has comments has stated that Assessee has contended that M/s. Surinder Pal Singh has received a sum of ₹ 3,00,000/- during the year from M/s. G.M. Hirer Prop. Mahender Sharma son of Nitya Nand Sharma PAN ALNPF0611P A reply to notice u/s 133(6) was filed alongwith copy of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that in response to the enquiry u/s 133(6) Manjit Singh on behalf of M.S. & Co. explained the nature of money given as under: "1. That I have jointly purchased one property in Bulk Material Market popularly known as BMM 373, Phase-11, Mohali through PUDA auction in the name of Pritam Singh Oberoi. The property was purchased in consideration of ₹ 29,10,000/- auction price to be paid in installment. The interest is to be paid to PUDA along with installments. That I was having 30% share in the property under consideration and a part of money amounting ₹ 436,500/- was directly deposited with PUDA on 27/11/2003 and a sum of ₹ 1,00,000/- was paid to Pritam Singh Oberoi. That subsequent payment of ₹ 2,00,000/- was paid on 28.01.2004 drawn on my ICICI Bank A/c No. 005805000292, similarly ₹ 2,90,000/- was paid on 19.11.2004 to Bikas Deb on the directions of Pritam Singh and as such total amount of ₹ 10,26,500/- was paid on account of 30% share in the property under consideration." Copy of confirmation has also been filed. No doubt the conformation is only initialed but it cannot be said that it is not signed. Copy of agreement for purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 175500/- from Balu Singh Jamadar." 5. That learned CIT(A) has erred in law and facts in not taking reliance of entries recorded in Supplementary Cash Book produced before the CIT(A) after admitting the same u/s 46A(1)(d) and despite the fact that AO has confirmed the verification of debit / credit entries recorded in the supplementary Cash Book." 178. Out of above grounds, grounds No. 1 to 3 and 5 were not pressed therefore same are dismissed as not pressed. 179. In this year the assessee has moved an application for admission of additional evidence. The Ld. Counsel for the assessee referred to the application and pointed out that copy of reasons recorded for reopening of the assessment of S.P. Singh Oberoi as well as his assessment order for Assessment year 2005-06 is being filed as additional evidence because same was on 28.2.2013 i.e. after passing the impugned order. This order is relevant because gifts and loans received from S.P. Singh were verified in his own case by the Revenue and found to be correct. This being a assessment order only, therefore in the interest of justice this evidence can be admitted. 180. On the other hand, the Ld. D.R. for the Revenue o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e material on record, we find that as far as credit of ₹ 290000/- from M.S. & Co. same has been explained during enquiry made in assessment proceedings. In the explanation it is stated as under: ""1. That I have jointly purchased one property in Bulk Material Market popularly known as BMM 373, Phase-11, Mohali through PUDA auction in the name of Pritam Singh Oberoi. The property was purchased in consideration of ₹ 29,10,000/- auction price to be paid in installment. The interest is to be paid to PUDA along with installments. That I was having 30% share in the property under consideration and a part of money amounting ₹ 436,500/- was directly deposited with PUDA on 27/11/2003 and a sum of ₹ 1,00,000/- was paid to Pritam Singh Oberoi. That subsequent payment of ₹ 2,00,000/- was paid on 28.01.2004 drawn on my ICICI Bank A/c No. 005805000292, similarly ₹ 2,90,000/- was paid on 19.11.2004 to Bikas Deb on the directions of Pritam Singh and as such total amount of ₹ 10,26,500/- was paid on account of 30% share in the property under consideration." Copy of the confirmation of the account as well as agreement for making investment j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identical to the issues raised by the Revenue in ITA No. 1193/Chd/2012 in case of Late Shri Pritam Singh which we have adjudicated in above paras. Since the facts of the case and the contentions of both the parties are identical to the issues raised in ITA No. 1193/Chd/2012 for Assessment year 2004-05, following that order we have decide these issues against the Revenue. 193. Ground No. 5 - After hearing both the parties we find that during assessment proceedings the Assessing Office noticed that the assessee has claimed interest expenses amounting to ₹ 196011/- against the income from interest on FDR. He has observed that interest was not paid for earning interest and accordingly query was raised in this regard. No reply was given and therefore a sum of ₹ 196011/- was added to the income of the assessee. 194. On appeal before the LD. CIT(A) it was mainly submitted that interest on FDR relates to Pritam Singh and Sons proprietary concern which was doing business of civil construction. The FDRs were purchased from business funds for obtaining bank guarantee for execution of contract. No FDR was purchased during the year. The interest on FDR was declared as income of bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deleting the addition of ₹ 1490000/- on account of gift received from Sh. S.P. Singh when assessee failed to prove the genuineness of the gift? (ii) Whether on facts and circumstances of the case CIT(A) was justified in accepting the genuineness of a gift from Non Resident Indian (NRI) brother of the assessee, in total disregard to the ratio laid down by the Hon'ble Supreme Court in the case of CIT Vs. P R Ganapathy (2012-TIOL-76-SC- IT) that the assessee has to show adequacy of funds in the hands of foreign donor for aforesaid gift donation? (iii) Whether on facts of the case adverse and rebuttalbe presumption should have been drawn about genuineness of the gift when the assessee over a period of seven Assessment Years has received a total sum of ₹ 48648199/- crores as gift and another sum of ₹ 9480000/- as loan? (iv) Whether the Ld. CIT(A) is justified in law and on facts in deleting the disallowance of ₹ 193,146/- on account of expenses on interest paid on loan against FDR claimed against interest income from other sources in violation of section 57(iii)?" 200. Grounds No. 1 to 3 - After hearing both the parties we find that the issues raise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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