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TMI Blog2016 (1) TMI 1200X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act no more empowers the CIT(A) to remand a case w.e.f. 01.06.2001. The fact also remains that the assessee has already made out a case for admitting additional evidence before the CIT(A). We observe in these facts that the main reason on the part of the CIT(A) for directing the Assessing Officer to verify the facts once again is because of the fact that the assessee has been able to file complete set of relevant documents only in rebuttal stage. We take into account the bar imposed by the legislature on the CIT(A)’s jurisdiction in section 251(1)(a) hereinabove and interfere to the limited extent that the impugned remand directions shall form part of our instant findings. In other words, we interfere on this legal aspect only. However, we direct the Assessing Officer to re-decide this entire issue afresh after taking into account the material on record submitted by way of additional evidence after affording adequate opportunity of hearing. CIT(A) confirming the impugned unexplained cash credit addition in case of Chandrikaben Thakkar to the tune of ₹ 17,000/- this creditor is neither having any PAN card nor has she been able to explain her source. We find no reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat:- The assessee fails in leading any evidence to prove that he had been using any other telephone or other communication system exclusively for his personal and non-business use. We see no reason to interfere with both the lower authorities’ action in invoking the impugned disallowance. - IT(SS)A No.828/Ahd/2010, IT(SS)A No.849/Ahd/2010, IT(SS)A No.829/Ahd/2010, IT(SS)A No.850/Ahd/2010, CO No.16/AHD/2011 in IT(SS) A No.836/AHD/2010 - - - Dated:- 18-1-2016 - SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER For The Assessee : Shri S.N. Soparkar, A.R. For The Respondent : Shri Nagendra Singh, Sr. D.R. ORDER PER S.S. GODARA, J.M. This is a set of 6 cases. The Revenue has filed three appeals i.e. IT(SS)A Nos.828, 829 and 836/Ahd/2010 in assessment years 2001-02, 2002-03 2003-04 and the assessee has filed two appeals i.e. IT(SS)A Nos.849 850/Ahd/2010 in former two assessment years and a Cross Objection No.16/Ahd/2011 in the third one. All these cases arise against three separate orders of the CIT(A), Ahmedabad, all dated 18.10.2010, in proceedings under section 153A(b) of the Income Tax Act, 1961. 2. We proceed Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. We come to facts of the case first. The assessee individual is engaged in construction and Hotel business. He filed return on 31.10.2010 stating income of ₹ 2,37,230/-. The department carried out a search in his case as well as that of M/s Dharamdev Builders group on 09.02.2005 allegedly seizing incriminating material and evidence. This culminated in section 153A notice being issued on 17.04.2005. The assessee filed its return in response thereto on 02.02.2006 admitting the very income disclosed earlier. The Assessing Officer thereafter completed regular assessment on 29.12.2006, inter alia, making various additions subject matter of the instant adjudication. These cross appeals which have been partly interfered in lower appellate proceedings as indicated hereinabove leading both parties aggrieved. 7. We come to Department s appeal IT(SS) A No.828/Ahd/2010. Its first ground challenges the lower appellate order deleting interest disallowance of ₹ 4,52,089/-. The assessee s profit loss account of different proprietary concern reveals his interest claim of ₹ 4,32,129/- in case of Avkar Guest House and ₹ 19,960/- in relation to Shri Sanjay H. Thakkar (p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 938 (Mad.) iv) I Bay Co. 254 ITR 248 (Kerala) v) Abhishek Industries 286 ITR 1 (Punjab Haryana) 7.1 The appellant in this connection submitted that first of all the A.O. has appreciated the fact that there are adequate interest free funds available with the appellant and, therefore, there was no reason for disallowance of any interest. In this connection, the A. R. referred to the decision of the ITAT, Ahmedabad in the case of Torrent Financiers reported at 73 TTJ 684. The appellant's A.R. further referred to the Supreme Court decision in the case of Munjal Sales reported at 298 ITR 298 and stated that as held by the Supreme Court, when the assessee is having adequate interest free funds, no disallowance was justified for any interest free advances given. In support of this argument, the appellant's A.R. furnished details of interest free funds available with him in different proprietary concerns in the form of own capital and also interest free advances from various concerns, according to which they are having interest, free funds of aggregate amount of ₹ 1,75,25,534/-. Apart from this, on facts, it is submitted by the A.R. that the amount of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground seeks to restore unexplained cash credit addition of ₹ 47,11,849/- made in the course of assessment but remitted back to the assessing authority for fresh verification of evidence. We find that the assessee s third substantive ground (supra) is found connected thereto. 11. Relevant facts to this common issue in these cross appeals are that assessee s balance sheet revealed various deposits/cash credits from different parties aggregating to above stated gross figure. The Assessing Officer sought to confirm identity, genuineness and credit worthiness qua assessee s concerns M/s Dev Priya Builders, Miloni Builders and Dharamnandan Builders received through cheques. He quoted assessee s failure in filing all necessary details along with creditors confirmation for invoking section 68 of the Act thereby addition to the impugned sum of ₹ 47,81,849/- being made in assessment order. 12. We come to lower appellate proceedings now. The assessee, inter alia, pleaded lack of sufficient time to prove all the three aspects of his claim. He lead additional evidence by placing on record his creditor s PAN details, account copies, credit confirmation and addresses etc. He pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant has given the details that they had taken loan for investment in house property from the bank and from such loan, they had given deposit, for which contra account from bank statement is given. Thus considering the fact that the source of amount deposited with the appellant in the case of Shital Ajitkumar, Sonal Goswami and Geetaben Goswami is from the bank loan obtained by them, the A.O. is directed to consider the said evidence and if the same is found to be in order, he shall delete the addition with reference to the deposit of said parties. 8.7 As regards to the loan in the case of Chandrika N. Thakkar, where the depositors is not having P.A. No. and she failed to explain her source for deposit, therefore, the addition is of ₹ 70,000/- is confirmed. 13. This leaves both the parties aggrieved to the extent indicated hereinabove. 14. We have heard rival contentions. There is no dispute that the assessee in rebuttal has furnished correct PAN details with Bank account copies, creditors confirmations and their Income Tax returns. We find that section 251(1)(a) of the Act no more empowers the CIT(A) to remand a case w.e.f. 01.06.2001. The fact also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Officer who filed his report on 15.12.2006 ascertaining value of the residential property in question to be of ₹ 1,46,28,300 as on 31.03.2005 as against that shown in books of ₹ 64,51,242/-. The DVO ascertained cost of the land appurtenant to the house as of ₹ 30,97,500/- on 13.10.2000 turning out to be much higher than that declared of ₹ 6,17,100/-. The Assessing Officer adopted the DVO s value as on 31.03.2005 as the basis for determining cost of construction on 31st March of each relevant previous year thereby working out the same as per the above stated valuation report. This formula resulted in addition of differential amount in cost of construction of ₹ 49,40,563/- and R.24,80,400/- relevant to the land cost aggregating to the impugned addition of ₹ 74,20,963/-. 17. The CIT(A) partly agreed with assessee s argument raised in the lower appellate proceeding as under :- 9.7 I have considered the assessment order, the DVO's report and the above submissions. First of all, I find that the land value as per the books of the appellant and his wife is at the cost of ₹ 12.34 lakh for which the land was purchased. The DVO has app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant be.ng in construction business, he gets discount in material cost, labour cost etc. Apart from this, they have not to incur architect fees, interior fees, engineer's fees which are considered by the DVO in his report. As such those figures are required to be excluded from the estimate of cost made by DVO. The appellant has also pointed out that the cost of construction includes flooring cost whereas the DVO has separately added flooring items of ₹ 19 lakh which results into duplication in the estimate. However, in the absence of any evidence and supporting material, this contention of the appellant is not accepted. In that case the estimated cost of DVO would be reduced as under: Rs. In lakh Rs. In lakh Cost of construction as per DVO 146.28 Less: 1) Adjustment to the extent of 10% for probable weightage as per instruction of DVO 13.61 2) Architect Fees, interior fees and contingencies estimated by DVO which is not required 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the eye of law. Next case law is Good Luck Automobiles vs. ACIT (2013) 359 ITR 306 (Gujarat). The Hon ble Jurisdictional High Court holds in this case law that a DVO report cannot form basis for rejecting an assessee s books stating cost of construction in question. Similar is the legal position with case law in Sargam Cinema vs. CIT, 328 ITR 513 (SC) holding that an assessing authority cannot make a DVO s reference under section 142A without rejecting books. We accept assessee s argument accordingly and hold that the Assessing Officer s action in invoking section 142A reference without rejecting assessee s books stating cost of construction of residential property in question as well as the land appurtenant thereto is not based on any incriminating material found in the course of search or any infirmity being pointed out there. We follow the above stated judicial precedents and delete the entire addition amount of ₹ 74,20,963/- being made in assessment order (supra). Our this legal adjudication rejects Revenue s corresponding ground and accepts the corresponding assessee s plea hereinabove. 20. The Revenue s next substantive ground challenges disallowance/addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is submitted that no supporting evidence is found as a result of search so as to show that the appellant has any further household expense. 6.2 On consideration of the fact stated by the appellant, it is noticed that the appellant has shown withdrawal of ₹ 66,000/- by himself and his wife. The A.O. has not found any material evidence to show that there was any further expenditure on household expenditure. However, looking to the status of the appellant he has to estimate the expenditure of ₹ 91,000/-. He may be justified in making-estimate having regard to the status of the appellant family. However, looking to the facts that expenditure on telephone, vehicles etc. are debited in the books of the business concern, the estimate made by the A.O. is excessive. I estimate the household expenses for the year at ₹ 72,000/- and accordingly the addition is reduced to ₹ 6,000/-. 22. We have heard rival contentions. Case file perused. We do not wish to repeat the entire facts relevant to the issue so as to avoid repetition. The CIT(A) has already taken into account assessee s socio-economic circumstances for estimating the impugned household withdrawa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of evidence submitted in the course of lower appellate proceedings, restricting addition made on account of unexplained investment in cost of construction to ₹ 24,31,000/- thereby directing to delete ₹ 21,52,150/- out of addition of ₹ 30,62,802/- and disallowance of ₹ 7,529/- on account of excess depreciation made in course of a search assessment being framed on 29.12.2006. Both the parties are further unanimous that we have rejected Revenue s identical grounds except that involved in above stated unexplained cash credit which has been accepted for statistical purposes in a similar Revenue s appeal decided hereinabove in Assessment Year 2001-02. No distinction on facts or law is pointed out. We observe, in these facts and circumstances, that all the grounds raised therein deserve follow suit in accordance with those decided in preceding Assessment Year. The Revenue s substantive ground on the issues of interest expenses, unexplained investment and excess depreciation claim stand declined and that of unexplained cash credit is allowed for statistical purposes. 28. IT(SS)A No.829/Ahd/2010 stands partly accepted for statistical purposes. 29. We come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit addition in the name of Lalitkumar Babulal of ₹ 3,00,000/- and in confirming addition to the extent of ₹ 24,31,000/- qua cost of construction of his residential house. 33. Both the learned Representatives are fair enough in pointing out that our findings on identical issues in their similar cross appeals in Assessment Year 2001-02 decided hereinabove would apply mutatis mutandis herein as well. We appreciate their fair stand. It is to be seen in Revenue s appeal that we have already upheld the CIT(A) s action in deleting interest disallowances. The second ground of unexplained cash credit has been accepted for statistical purposes. The third one pertaining to unexplained investment stands decided in assessee s favour. So has been the outcome of fourth and last ground on the issue of excess depreciation. We follow the suit herein as well and reject the Revenue s all substantive grounds except the second one on the issue of unexplained cash credit accepted for statistical purposes. The Revenue s appeal IT(SS)A No. 836/Ahd/2010 is partly accepted for statistical purposes. 34. We come to the assessee s Cross Objection now. We have already upheld telephone expen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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