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TMI Blog2019 (12) TMI 671X X X X Extracts X X X X X X X X Extracts X X X X ..... order of CIT(A), we dismiss the ground raised by the assessee on this issue. Unexplained investment - HELD THAT:- We find that the assessee himself has admitted by filing an affidavit that he has advanced an amount of ₹ 5 lakhs to Shri K. Naganatham, but, we do not know what is the reason for denial of the same. Before the AO, CIT(A) and even before us, the assessee failed to explain the source for advancing the amount of ₹ 5 lakhs, hence, the assessee failed to discharge the burden cast upon him to prove that he has not advanced the amount. We find no infirmity in the order of the CIT(A) in confirming the addition made by the AO, therefore, upholding the order of CIT(A) we dismiss the ground raised by the assessee on this issue. Unexplained investment in jewellery - We are of the view that CIT(A) has reasonably held that 500 grams of gold by the wife of the assessee is reasonable and hence, we confirm the decision of the CIT(A) and dismiss the grounds raised by the assessee on this issue. Unexplained investment in construction of house based on the valuation report of the DVO - AO to ascertain the investment in the house property, referred the case t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee and it was also very much evident that based on the above documents, the assessee had advanced loan to Smt. Naragoni Radha. Accordingly, the AO made the addition u/s 68 of the Act treating the amount of ₹ 45,00,000/- as unexplained investment. 3. When the assessee preferred an appeal before the CIT(A), the CIT(A) confirmed the order of AO. 4. Aggrieved by the order of CIT(A), the assessee is in appeal before us raising the following grounds of appeal: 1. The order of the learned CIT(A) is erroneous both on facts and in law. 2. The learned CIT(A) erred in confirming the addition of Rs,45,00,000/- on the ground that there is material to suggest that the assessee has advanced loans without appreciating the fact the investigation wing during post search enquires has enquired and found that there was no such advances and that what is found during the search is only copies and not originals and that such amounts were advanced since the other party failed to fulfil the mortgage conditions. 3. The learned CIT(A) in not appreciating the plea of the assessee to direct the AO to conduct enquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant. It is the contention of the appellant hat since the conditions of the MoU were not satisfied, the alleged amount of ₹ 45 lakhs was not advanced by the appellant. I have gone through the said MoU filed by the appellant. At page 3 of the said MoU it is clearly mentioned that the party of the second part i.e. Naragoni Radha have received a sum of ₹ 45 lakhs from the parties of the first part i.e. the appellant on 23-1-2007. It is also declared and affirmed that the parties of the second part had received the said amount on 23-1-2007 and on the said date, they have executed a promissory note and received the said amount in favour of the first party as collateral security. They have also affirmed that the second party being the lawful owners of the scheduled properties, have deposited the original title deeds relating to the properties with the first party on 23-1-2007 with an intention to create equitable mortgage thereof and for securing the said advance amount of ₹ 45 lakhs. Thus it is proved beyond doubt that the appellant had paid ₹ 45 lakhs to Naragoni Radha on receipt of the original title deeds. It is therefore clearly established th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 I have gone through the fact of the case and the submission of the appellant. I have also gone through the assessment record. It is not disputed that the addition has been made by the AO based on the document seized during the course of search which was in possession of the appellant. It is the contention of the appellant that the addition made by the AO is no justified since no such loan was advanced. I do not agree with the contention of the appellant. In fact, during the course of search, as stated earlier, a statement was recorded from the appellant u/s.132( 4) wherein the appellant had submitted that he had advanced an amount of ₹ 5 lakhs to Sri K.Naganatham but the sources are not explainable. Apparently, he had admitted this sum as his undisclosed investment. Assessment records also indicate that the appellant had filed an affidavit before the AO wherein he had affirmed on oath as under. I do hereby declare that I admitted income in the assessment year 2008-09 is ₹ 15 lakhs and assessment year 2009-10 as Nil instead of AY 2008-09 is ₹ 5 lakhs and AY 2009-10 is ₹ 10 lakhs. I further state that I have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the jewellery belonged to others without appreciating the fact that it might not have been known to the assessee since the facts are known only to family members. 6. The learned CIT(A) erred in observing that ample opportunity is given to )he assessee for explaining the jewellery when the posting of the ~se for hearing itself was only on few dates and not many and posting was there even on 31-12-2010 the last date of time barring. 7. The learned CIT(A) erred in not directing to delete the addition on account of difference in valuation if the difference is less than 10% after reworking the value and further erred in not directing to enquire About the value of unfinished works . 8. The learned CIT(A) erred in not giving directions to delete the interest u/s.234 B which is not leviable if the department fail to adjust the seized cash towards advance tax in spite of request to do so. 9. Any other ground that may be urged at the time of hearing 15. Ground Nos. 1 9 are general in nature, hence, need no adjudication. 16. As regards ground Nos. 2 3 relating to the addition of ₹ 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from wife's bank accounts. As regards the amount shown in page No.8, it was stated that though the pro note was for ₹ 15 lakhs, but actually a sum of ₹ 2 lakh was given as loan by way of cheque. As regards the amount appearing in pagee No.20, 25 and 26, it was stated that he had advanced an amount of ₹ 5 lakhs to Sri K.Naganatham and B Manohar but the source is not explainable. The AO observed that the appellant had advanced an amount of ₹ 15 lakhs to B. Manohar and Sri Naganathan and admitted the same. Further, ₹ 15 lakhs advanced to Ramachandra Rao was stated to have been made from out of available fund and wife s bank account. But he denied to have extended ₹ 15 lakhs to Madhavi but it was only ₹ 2 lakh. He has also denied to have extended any loan to K.Anjaneyulu and Naragoni Radha amounting to ₹ 1,10,00,000/- though the seized pro-notes along with cash receipts were in his possession. It clearly shows that he had in fact advanced the amount as mentioned in the seized papers. After considering the explanation the AO held that ₹ 78 lakhs paid to K. Anjaneyulu and B. Madhavi in the FY 2008-09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has to explain that as to why these documents are in his possession without making any payment. We are, therefore, of the view that the assessee has failed to discharge the burden cast upon him to prove that he has not advanced any amount to Shri K. Anjaneyulu. The facts otherwise prove that he has advanced an amount of ₹ 15 + 50 lakhs, totalling to ₹ 65 lakhs to Shri K. Anjaneyulu. Therefore, the addition to the extent of ₹ 65 lakhs, in our opinion, the revenue authorities have rightly made and the decision does not call for any interference. 20.1 In so far as ₹ 15 lakhs loan extended to Smt. B. Madhavi, the assessee has contended that he had given only ₹ 2 lakhs and not ₹ 15 lakhs. As per the seized document, it was an understanding between the assessee and Smt. B. Madhavi that the assessee has advanced ₹ 15 lakhs and Smt. Madhavi has to replay along with interest @ 30% per annum. Even collateral security had offered for the said loan. Therefore, the assessee has failed to prove that he has only advanced ₹ 2 lakhs and not ₹ 15 lakhs. We find that the assessee has rightly made the addition and the CIT(A) confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of Understanding was for ₹ 15 lakhs which Smt. Madhavi was to repay along with interest @ 30% per annum. Even collateral securities had been offered for the said loan. , there is no basis of the claim of the appellant that he had given only ₹ 2 lakhs. I therefore hold that the AO was justified in adding the balance amount of ₹ 13 lakhs while assessing the income of the appellant. In other words, the addition of ₹ 78 lakhs made by the AO is sustained. In view of the above discussion, we do not find any reason to interfere in the order of CIT(A) and, therefore, same is upheld and the grounds raised by the assessee on this issue are dismissed. 21. As regard ground Nos. 4, 5 6 relating to the addition of ₹ 21,65,282/- being the unexplained investment in jewellery, the AO observed in the assessment order that during the course of search gold jewellery weighing 1,482 grams and silver articles of 14.88 kgs valued at ₹ 18,08,162/- and ₹ 3,57,120/- respectively were found. The assessee explained the above jewellery to be belonging to himself, his mother, his wife and his daughter. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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