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TMI Blog2011 (4) TMI 1451X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 and ₹ 5,50,000 which represent unsecured loans and advances. 3. The brief facts of the case are that the assessee is an individual. He is director of M/s. Prateek Resort Builders (P) Ltd. He was also running a proprietorship concern in the name and style of M/s. Sharma Associates. In these assessment years, he derives income from house property and business income from the business of real estates. A search under section 132 of the Income-tax Act, 1961was carried out at his residential premises comprised at 66-Pritam Road, Dehradun on 15.2.2008. A survey under section 133A was carried out simultaneously at his office premises situated at 78-Rajpur Road, Dehradun. During the course of search, a cash of ₹ 1,60,510 was found at the residence out of which a sum of ₹ 1,00,000 was seized. Jewellery having value of ₹ 6,59,900 found at the residence but nothing was seized. A notice under sec. 153A of the Act was issued upon the assessee on 17.8.2009. The assessee has filed his return of income on 5.10.2009 declaring total income at ₹ 3,02,055. Assessing Officer has passed the assessment order on 29.12.2009. He assessed the income of the assessee at S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amt. Of loan claimed to have been taken during the year Details of Evidences/documents not filed. 1. Sh. Ramesh Goel 40,000 Confirmation, Bank statement and copy of return not filed 2. Sh. Vishal Aggarwal 1,00,000 Confirmation, Bank statement not filed. 3. Sh. Anshul Jerath 1,50,000 Confirmation, Bank statement and copy of return not filed. 4. Sh. D.K. Aggarwal 2,00,000 Confirmation, Bank statement and copy of return not filed. Total 4,90,000 5. During the course of appellate proceedings, Learned First Appellate Authority has called for a remand report. In the remand report, Assessing Officer has admitted that as far as loan amounts mentioned against the names of Shri SK Sudan, Vijay Ramesh Goel are concerned, assessee has submitted bank statements, copies of income-tax returns confirmations etc. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer is the prosecuting as well as the adjudicating authority. He is satisfied that no addition deserves to be made with respect to the alleged loans as well as advances. To our mind, there should not be any grievance to the revenue after such a stand of the Assessing Officer. The revenue has not brought any material on the record which can suggest that Assessing Officer has committed factual error in the remand report or there was no such evidence possessed by the assessee to explain the advances/loans. We find that some of the advances are just brought forward from the earlier years, as observed by the Learned CIT(Appeals). Contrary to this factual finding, nothing has been brought to our notice by the revenue. In view of the above discussion, we do not find any merit in this appeal. It is rejected. C.O. No.62/Del/2011: 7. The assessee at the time of hearing, did not press the cro, hence it is also rejected. ITA No. 823/D/2011: A.Y. 2003-04 8. In this appeal also, the grounds taken by the revenue are not in consonance with rule 8 of ITAT Rules. They are descriptive and argumentative in nature. In brief, the first grievance relates to deletion of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee 3. Shri S.K. Sudan 60,000/- Bank statement not filed 4. Sushma Bareja 1,25,000/- Bank statement and copy of return not filed 5. Shri Vishal Aggarwal 2,50,000/- Bank statement and copy of return not filed Total 10,60,000/- Further, the details of parties from whom unsecured loans have been claimed by the assessee to have been received during the year but where even the confirmations have not been filed are as under :- S.No. Name Amount of loan claimed to have been taken during the year Details of Evidences / Documents not filed 1. Sh. M.C. Sehgal 3,50,000/- Confirmation, Bank statement and copy of return not filed 2. Shri S. K. Kandhari 1,50,000/- Confirmation, Bank statement not file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t ₹ 5,10,000/- in the sale deed. According to the AO, the market value of this property at the time of sale was ₹ 6,99,000/-. He made the addition of the difference i.e. a sum of ₹ 1,79,000/- has been added. The AO was of the view that assessee has received cash out of books. On appeal, Ld. CIT(A) has observed that there is no evidence with the AO which can demonstrate that assessee has received on money . He accordingly deleted the addition. 14. With the assistance of Ld. Representative, we have gone through the record carefully. We find that addition has been made by the AO without any basis. He simply stated that market value of the property was ₹ 6,99,000/-. In the remand proceeding also, he failed to substantiate as to how the market value of this property was ₹ 6,99,000/-.The AO was unable to disclose as to how he can replace the sale consideration disclosed in the sale deed. Inspite of search, department was unable to lay its hand on any evidence. In such situation, how it can say that assessee has received more amount than the one disclosed in the sale deed. Considering the finding of Ld. CIT(A), we do not see any reason to interfere in it. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank statement not filed 2 Sushma Bareje 7,50,000 Bank statement and copy of return not filed. 3 Savitri Devi 12,00,000 Bank statement and copy of return not filed 4 Richa Aggarwal 1,00,000 Bank statement and copy of return not filed 5 S.K. Sudan 6,00,000 Bank statement not filed 6. Vishal 2,00,000 Bank statement and Aggarwal copy of return not filed Total 37,50,000 19. The assessee has pleaded before the Learned CIT(Appeals) that assessment was completed within two and half months. Assessing Officer did not provide him sufficient opportunity for producing the confirmation from the creditors, their PAN and other details. Assessee submitted all these details before the Learned CIT(Appeals). Learned First Appellate Authority has called for a remand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t find any error in the order of Learned CIT(Appeals) and the ground in respect of deletion of ₹ 37,50,000 is rejected. 20. In ground No.6, the dispute relates to deletion of ₹ 5 lacs received from Siddharath Breja and ₹ 4 lacs from Smt. Sushma Breja. We find that this item has been considered by the Assessing Officer while making addition of ₹ 7,50,000 against the name of Smt. Sushma Breja. Assessee has taken a total sum of ₹ 9 lacs from the two individuals i.e. Smt. Sushma Breja and Siddharath Breja. Both these individuals have filed their affidavits and confirmed the transaction. Assessing Officer without verifying the facts has taken one amount in peace meal in two transactions. In a way, he has made double addition. Learned CIT(Appeals) deleted the addition from both the places i.e. a sum of ₹ 7,50,000 was included in the total addition of ₹ 37,50,000 disputed in ground No.1 and a sum of ₹ 9 lacs has been again added which has been deleted and disputed in ground No.6. Considering the findings of the Learned CIT(Appeals), ground No.6 is also rejected. 21. In ground No.1, a separate amount of ₹ 5 lacs is also disputed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence in WIP ₹ 3,36,774 iv. Addition u/s 68 on a/c of unexplained loans Rs.45,50,000 v. Addition u/s 69C on a/c of unexplained house hold expenditure ₹ 20,218 Total Rs.52,71,154 26. Assessing Officer has noticed the following details while making the addition of unsecured loans amounting to ₹ 45,50,000: The A.O. has given following reason while making the addition: The details of parties from whom unsecured loans have been claimed by the assessee to have been received during the year, where only confirmations have been filed and no other supporting documentary evidences like bank statements have been filed to prove the creditworthiness of the claimed loan creditors are as under: S. No. Name Amt of loan claimed to have been taken during the year Details of Evidence/documents not filed. 1 N.D. Bareja 2,50,000 Bank statement and copy of return not filed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the Assessing Officer, the closing WIP would be the opening WIP on Ist April 2004. He further observed that assessee had made an addition of ₹ 5 lacs and ₹ 8,45,250 in the WIP. Thus, according to the Assessing Officer, at the end of the year, WIP should be ₹ 42,62,118. As against this, assessee has shown WIP at ₹ 39,25,344. Assessing Officer made the addition of ₹ 3,36,774 being the difference in the WIP. 29. Before Learned CIT(Appeals), it was submitted by the assessee that Assessing Officer failed to appreciate the accounts of the assessee. The assessee has incurred a sum of ₹ 5 lacs which he has separately capitalized as part of fixed assets. This amount cannot be included in the WIP. If this amount is excluded then closing WIP would be ₹ 37,62,118 which is lower than the amount disclosed by the assessee at ₹ 39,25,344. Learned CIT(Appeals) has considered this aspect and perused the record. He was of the opinion that a dispute relates to the treatment of ₹ 5 lacs. Whether this amount is revenue expenses which will form as a part of the WIP or it is a capital expenditure which has been attributed towards capital asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of investment u/s 69 for purchase of stamp paper ₹ 6,60,000/- Total ₹ 2,32,27,000/- 33. On appeal Ld. CIT(A) deleted all the additions. 34. In ground No. 1, revenue is impugning the deletion of ₹ 1,50,25,000/-. This amount has been added by the AO on account of failure of assessee to prove genuineness of unsecured loans. The AO has noticed the details of parties from whom unsecured loans have been received by the assessee. These details have been reproduced by the Ld. CIT(A) also while taking note of the AO's finding. They read as under :- The details of parties from whom unsecured loans have been claimed by the assessee to have been received during the year, where only confirmations have been filed and no other supporting documentary evidences like bank statements have been filed to prove the creditworthiness of the claimed loan creditors are as under :- S.No. Name Amount of loan claimed to have been taken during the year Details of Evidences/Documents not filed 1. Indu B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and copy of return not filed Total 43,25,000/- 35. With the assistance of Ld. Representative, we have gone through the record carefully. We find that assessee has submitted an additional evidence before the Ld. CIT(A). He has alleged that AO did not grant proper opportunity of hearing to him. Ld. First Appellate Authority has called for a remand report from the AO. Ld. CIT(A) has reproduced the comments of AO in the remand report on each unsecured loans. The comments have been reproduced on pages No. 10,12,13,14,15,17 and 19,20,21,22,25 of the impugned order. We have gone through the comments of AO and find that he was satisfied with the evidence submitted by the assessee and conceded for deletion of the addition. Thus, the facts with regard to this ground of appeal are similar to that of asstt. Year 2002-2003. In view of our finding in asstt. Year 2002-03, we do not find any merit in this ground of appeal . It is rejected. 36. The next substantial ground is ground No. 6, wherein revenue is impugning the grant of interest expenses amounting to ₹ 3,65,309/- on the unsecured loans. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 3 lacs. Similarly, he purchased a property from Shri Prabhat Pandey for a sum of `1,10,000/-. These two purchases have not been declared by the assessee according to the AO. On appeal, Ld. CIT(A) has recorded a finding that both these properties have been accounted by the assessee. Shri Rajiv Berry has sold the property in a representative capacity on behalf of Shri Prabhat Pandey and assessee has shown in his books of accounts as land (Shri Rajiv Beri). The AO due to paucity of time could not verify this aspect and made the addition. The Ld. CIT (A) further observed that assessee has accounted the property purchased from Shri Jaideep in his books. After taking into consideration the finding of fact recorded by the Ld. CIT(A), we do not find any error in it. The revenue is unable to produce any evidence demonstrating the fact that these findings are factually incorrect. Once it is held that in the books both these properties have been noted by the assessee then how additions can be made on the ground that these properties have not been accounted by the assessee. The assessee has filed the sale deeds before the Ld. CIT(A). In view of the above discussion, ground No. 7 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 31,85,000/- Ld. CIT(A) has made following discussion :- b. Addition of ₹ 3,25,000/- According to the assessee, the addition is erroneous as the sale of ₹ 3,25,000/- was declared by assessee in financial year 2006-07 and does not pertain to financial year 2005-2006. The books of accounts of assessee for financial year 2006-07 were examined, with finding that the sale of ₹ 3,25,000/- was declared by assessee as part of sales credited in profit loss account for financial year 2006-07. It is a well accepted principle that any sale can only be considered as income of assessee only once and in this case since it was already declared by assessee as receipt for financial year 2006-07, adding it in financial year 2005-06 shall lead to double taxation. In the light of aforesaid facts, the addition of ₹ 3,25,000/- is hereby deleted. C. Addition of ₹ 5,50,000/-, ₹ 3,80,00/- and ₹ 5,00,00/- The addition was made by AO on the ground that the sale deeds of aforesaid amount were not declared as sales in profit and loss account of assessee. On the other hand, the assessee has stated that it was only the net profit arising to the tune of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 11.2.2006 was received from one Shri Govind Petwal by M/s. Sharma Associates. The AO asked the assessee to explain the receipt of this cheque. According to him, assessee failed to give any explanation and he construed that this amount must be received by the assessee towards sale of any land to this person by the assessee. Before Ld. CIT(A), it was contended that this cheque was never encashed by the assessee. This amount was not credited in the bank account of the assessee. Meaning thereby, no such amount was received by the assessee. Ld. CIT(A) after verification of the facts and the bank statement, deleted the addition. Once it is established that cheque was not encashed then it is just a waste paper. As and when cheque would be encashed, it would become the receipt of the assessee. In the above situation, the income cannot be added in the hands of assessee. Ld. CIT(A) has deleted the addition. Hence this ground of appeal is also rejected. 43. In the result, appeal of the revenue is dismissed. 44. Cross objection No. 66 assessee did not press the cross objection hence rejected. ITA No. 827/D/2011 A.Y. 2007-08 45. The grounds of appeal taken by the revenue are n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med by the assessee to have been received during the year, where only confirmations have been filed and no other supporting documentary evidences like bank statements have been filed to prove the creditworthiness of the claimed loan creditors are as under :- S. No. Name Amount of loan claimed to have been taken during the year Details of Evidences/Documents not filed 1. Gopal Dutt 4,00,000 Bank statement not filed 2. Lata Rawat 2,50,000/- Bank statement and copy of return not Bank statement and copy of return not filed filed 3. Hira Aswal 21,70,000/- Bank statement and copy of return not filed 4. Hukum Singh 5,50,000/- Bank statement and copy of return not filed 5. Ramesh Kumar 5,00,000/- Bank statement and copy of return not filed 6. JD A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn not filed 3. Prateek resorts 46,75,000/- Confirmation, Bank statement and copy of return not filed Total 54,75,000/- 49. With the assistance of Ld. Representative, we have gone through the record carefully. We find that AO did not provide sufficient opportunity to the assessee during the asstt. proceeding for explaining the nature of unsecured loans and the credit entries available in his books of accounts. The assessee has filed additional evidence before the Ld. CIT(A) and Ld. CIT(A) has called for remand report from the AO. In the remand report, AO has accepted the genuineness of the loan in respect of the creditors except Smt. Lata Rawat. This addition has been deleted by the Ld. CIT(A) after satisfying himself with the quality of evidence produced by the assessee. According to the Ld. CIT(A) assessee has filed confirmation by way of an affidavit. He has disclosed name and address alognwith her permanent account number with the Income Tax Department. He has also disclosed the jurisdictional ward of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d cash capital of ₹ 5,50,000/- on three occasions namely, `1,70,000/- on 29.8.2006, `1,50,000/- on 2nd September 2006 and ₹ 2,30,000/- on 3rd October 2006. The AO made the addition on the ground that assessee has failed to explain the source of the funds. Before Ld. CIT(A), it was contended that assessee has withdrawn a sum of ₹ 8,85,000/- from the firm in the month of June itself. He has re deposited ₹ 5,50,000/- in the month of August, September and October out of the cash withdraw in June. Ld. CIT(A) on verification of these facts, was satisfied with the explanation of assessee and deleted the addition. We do not find any error in the finding of Ld. CIT(A). The assessee has explained the source of funds available with him. 53. In this ground of appeal, grievance of the revenue is that Ld. CIT(A) has erred in deleting the addition of ₹ 10,40,200/-. The brief facts of the case are that during the course of search, a diary and certain loose papers were found at the residence of assessee which was inventoried as annexure LP-1 and annexure D1. On page No. 8 of annexure LP-1, an entry was noticed by the AO wherein a payment of ₹ 8 lac in cash to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee that there is no evidence on the record which can suggest that a sum of ₹ 18 lac was paid in cash. Ld. CIT(A) has deleted the addition by observing as under :- I have considered the AO's order, books of accounts of assessee and submissions of assessee. It is found that as per purchase deed, submitted by assessee, there was no mention of ₹ 18,00,000/- in the said purchase deed. The transaction of assessee is supported by a registered purchase deed, which in itself is a legal document. The ground of addition made by AO is only that ₹ 18,00,000/- were found written against the name of seller in one of the diaries seized during the search. However, there is no other document or evidence available in the hands of the AO, which could establish that such transaction of making payment of ₹ 18,00,000/- was made by assessee. Even the books of accounts of assessee do not establish the same. Therefore, additions merely on the basis of writing on loose diaries do not find any merit. Reference is also taken of the judgment laid down in the case of CIT v. D.K. Gupta 2009 308 ITR 230 (Del.) wherein it was held that Search party discover some notings and jot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was paid, or not, if paid, it was solely paid by the assessee etc. The assessee has explained the position about the entry at the time of search itself. He has explained about the certain other entries in the diary and submitted that there were rough calculations also. The AO instead of investigating the issue simply made the addition. Ld. First Appellate Authority has considered all these aspects and deleted the addition. After taking into consideration the finding of Ld. CIT(A) extracted supra, we do not find any merit in the ground of appeal raised by the revenue it is rejected. 57. In view of the discussion, appeal of the revenue is dismissed. CO No. 67/De/2011 58. Assessee did not press the cross objection, hence it is rejected. ITA No.828/Del/2011: 59. Ground Nos. 2 to 5 are general ground of appeal and in a way, these are the arguments in support of the ground numbers 1 6. In ground No.1, grievance of the revenue is that Learned CIT(Appeals) has erred in deleting the addition of ₹ 1,03,02,000 which was added by the Assessing Officer with the aid of section 68 of the Act. This ground is inter-connected with ground No.6 wherein it is pleaded that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secured loans have been claimed by the assessee to have been received during the year, where only confirmations have been filed and no other supporting documentary evidences like bank statements have been filed to prove the creditworthiness of the claimed loan creditors are as under: S. No. Name Amt of loan claimed to have been taken during the year Details of Evidences/Documents not filed. 1 Vishal Aggarwal 49,52,000 Bank statement and copy of return not filed. 2 N.D. Bareja 2,50,000 Bank statement and copy of return not filed. 3 V.P. Monga 2,50,000 Bank statement and copy of return not filed. 4 S.K. Sudan 13,50,000 Bank statement not filed. 5 D.K. Aggarwal 10,00,000 Bank statement and copy of return not filed. Total 78 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2008 and withdrawals were shown in the month of January as well as February 2008. To our mind, there is no substantial time gap between the withdrawals and the availability of the cash. Learned CIT(Appeals) has rightly accepted the explanation of the assessee and deleted the addition. The reasons assigned by the Assessing Officer are based on probability but conclusively it cannot be ascertained that cash withdrawals by the assessee and his wife in the month of January was spent on household or acquisition of any assets. In view of the above discussion, this ground of appeal is rejected. 63. In ground No.8, grievance of the revenue is that Learned CIT(Appeals) has erred in deleting the addition of ₹ 6,59,900. The brief facts of the case are that during the course of search, jewellery having value of ₹ 6,59,900 was found. The explanation of the assessee is that this jewellery belongs to his wife. Part of the jewellery was received at the time of their marriage and the part was acquired by her from her savings. Assessing Officer was not satisfied with the explanation of the assessee. He made the addition. On appeal, Learned CIT(Appeals) deleted the addition on the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... representatives, we have gone through the record carefully. The addition was made by the Assessing Officer on misconstruction of the facts when assessee has explained the true facts and submitted the documentary evidence, a reconciliation has been established and Learned CIT(Appeals) arrived at a conclusion that addition was made on misinterpretation of the documents. Considering the details noticed by the Learned CIT(Appeals) on pages 24 to 26, we do not see any reason to interfere in this order. This ground of appeal is rejected. 67. In ground No.10, the grievance of the revenue is that Learned CIT(Appeals) has erred in allowing the set off of ₹ 8 lacs from the surrendered amount. With the assistance of learned representatives, we have gone through the record carefully. Learned CIT(Appeals) has confirmed the addition of ₹ 8 lacs. However, he granted a tele-scoping against the surrendered amount of ₹ 1 crore. We do not see any merit in this ground of appeal raised by the revenue. The assessee has made a declaration of ₹ 1 crore in order to explain all unaccounted money. Learned CIT(Appeals) has observed that out of the total amount, a sum of ₹ 14,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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