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TMI Blog2016 (5) TMI 1381X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed by ld CIT(A). The ground taken by the appellant is accordingly dismissed. Undisclosed investment u/s 69 - Held that:- Section 69 of the Act provides that where the appellant has made an investment which is not recorded in the books of accounts, if any maintained by the appellant and the appellant offers no explanation about the nature and source of investment or explanation so offered by the appellant is not satisfactory in the opinion of the AO, the value of the investment so made shall be deemed to be income of the appellant for the said financial year. On reading of the relevant provisions, we find that there is nothing which suggest that where the source has been explained and there is some time gap between the receipt and the ultimate utilisation, that would call for disallowance under section 69 of the Act. All it provides is that the appellant has to provide an appropriate explanation regarding the nature and source of investment which has been duly provided by the appellant in the instant case. In light of the same, we delete the addition as undisclosed investment u/s 69 of the Act Treatment of agricultural income treated as income from other sources - Held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of ₹ 1,16,400/- and treating it as agricultural income as claimed by the assessee. 2. Firstly regarding ground no. 1, briefly the facts of the case are that search and seizure operations were carried out under section 132 of the Act against Shri Shankar Lal Khandelwal. During the course of search proceedings Shri Shankar Lal Khandelwal was found involved in developing a real estate project in the name of Gobal City. Statement of Shri Shankar Lal Khandelwal were recorded u/s 132(4) on 16.11.2007 wherein he stated that Shri Mohd. Sharif khan, the appellant, was a partner in the Global City project and had invested a sum of ₹ 56,50,000/- in cash in the partnership firm constituted for the purpose of developing the Global city project. During the course of search proceedings in the business premises of Shri Shankar Lal Khandelwal, one alleged partnership deed was found wherein Shri Mod. Sharif Khan was mentioned as a partner. A statement of Shri Mohd. Sharif Khan was also recorded u/s 131 of the Act on the same date ie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning that returning the money on the same day does not materially affect the moot issue of giving cash of ₹ 56,50,000/- by appellant. Whereas this is the most important question to be answered as in practical life one never comes across a situation where partner introduces huge cash of ₹ 56,50,000/- and withdraws the entire amount on the very same day. It is important to note that the so called ledger account submitted by Shri Shankarlal Khandelwal and appearing at page 4 of Ld. AO Order was not found during search but was submitted later on during assessment proceedings by Shankarlal Khandelwal. The ld. CIT(A) has not considered the time which would require to count ₹ 1,13,00,000/-. If one gives careful thought to this situation the answer would be that the event of giving cash and withdrawing the same has not taken place. Ld AR further placed reliance on the judgement of Hon ble Supreme Court in the case of Sumati Dayal 214 ITR 801 wherein it was held that For considering whether the apparent is real, matter has to be considered by applying the test of human probabilities. It was further submitted that it is equally important fact that during the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ras) wherein he was asked about any agreement for this Global City project. He has averred that no written agreement was executed for this project and the agreement was only oral. (2.3.1) It is pertinent to mention that not only the appellant has admitted to have given ₹ 56.50 lakhs for Global City project to Shri S.L. Khandelwal but Shri Khandelwal has also admitted in his statement recorded during the course of search that he has received ₹ 56.50 lakhs from Shri Mohd. Sharif Khan i.e. the appellant. The subsequent filing of affidavit of Shri S.L. Khandelwal by the appellant during assessment proceeding on 17.06.2010 before the AO is of no value and has been rightly rejected by the AO. because when Shri S.L. Khandelwal was confronted by the issue of summon u/s 131, he has accepted that he has received a sum of ₹ 56.50 lakhs on 20.10.2007 from Mohd. Sharif Khan and same were refunded. In support of the same, he also submitted the copy of ledger account of Shri Mohd. Sharif Khan appearing in his books. Thus the contents of affidavit of Shri Khandelwal filed by the appellant has been rebutted by Shri Khandelwal himself and are thus found to be incorrect by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he maker of the said statement and not on the Revenue. In the present case, the appellant has not produced any material to show that the admission made by him and corroborated by the statement of Shankar lal Khandelwal were incorrect. Once there is a clear admission, voluntarily made, on the part of the appellant, that would constitute a good piece of evidence at the hands of the Revenue authorities. Further, once the appellant has admitted to the undisclosed income and surrendered the same, Revenue has refrained from enquiring any further into attendant circumstances. The theory of preponderance of probabilities as canvassed by the ld AR doesn t advance the case of the appellant in the facts of the present case. The statements recorded u/s 131 of the appellant and corroborated by the statement of Shri Shankar lal Khandelwal recorded u/s 132(4) of the Act are thus clearly relevant and admissible as evidence against the appellant. In light of that, we are of the considered view that the addition of undisclosed income of ₹ 56,50,000 has been rightly made and confirmed by ld CIT(A). The ground taken by the appellant is accordingly dismissed. 3. Ground No.2 is regarding additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 2.4.2007. Further, he supported the findings of the lower authorities. 3.3 We have heard the rival contentions and pursued the material available on record. In the instant case, firstly, it is noted that as against the investment of ₹ 8,13,010/- in the subject property, what is being disputed by the Revenue is source of investment to an extent of ₹ 6,40,000 only. In this regard, the appellant has submitted before the lower authorities that he has received the said amount of ₹ 6,40,000/- as gift from his brother Shri Rasool Bux Khan through normal banking channels which was deposited in his bank account on 18.10.2005 and 25.11.2005 and later on withdrawn on 08.12.2005 and paid as advance to the seller of the said property. The facts relating to receipt of gift of ₹ 6,40,000 from the appellant s brother Shri Rasool Bux Khan and subsequent withdrawal has not been disputed by the Revenue and thus stand admitted. The next question that arises is whether the appellant has utilised the said gift amount towards part payment of the purchase consideration for the purchase of the subject property. As per ld CIT(A), the property in consideration has been purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant provisions, we find that there is nothing which suggest that where the source has been explained and there is some time gap between the receipt and the ultimate utilisation, that would call for disallowance under section 69 of the Act. All it provides is that the appellant has to provide an appropriate explanation regarding the nature and source of investment which has been duly provided by the appellant in the instant case. In light of the same, we delete the addition of ₹ 8,13,010/- as undisclosed investment u/s 69 of the Act. Ground no. 2 is accordingly allowed. 4. Ground No.3 is regarding treatment of agricultural income of ₹ 1,16,400/- treated as income from other sources. Undisputedly, the appellant owns agricultural land situated in Fatehpur Tehsil Sikar District and he has consistently been declaring agriculture income of past couple of years. From the perusal of ld CIT(A) s order, it is noticed that the appellant has declared agriculture income ₹ 1,16,400/- during the year under consideration as against agricultural income of ₹ 1,10,500 in AY 2007-08 and ₹ 80,500 in AY 2006-07. There is thus no major variation of agricultural in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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