Sh. Sukhnandan Premi, New Delhi V. ITO, New Delhi

CO 347/DEL/2010

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1203 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 9 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 16-07-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 18-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL SENIOR
• Assessee Lawyers: SHAILESH GUPTA S
• Keywords: Unexplained cash credit; Gift; Income from undisclosed sources; Opportunity of being heard; Peak credit; Additional evidence; Assessment record
• Section: 143(3); 142(1); 133(6); 131; 68; 69; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI J.S. REDDY, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY, JUDICIAL MEMBER ITA NO.3611/DEL./2010 (ASSESSMENT YEAR : 2005-06) ITA NO.3114/DEL./2010 (ASSESSMENT YEAR : 2006-07) ITO, WARD 27 (4), VS. SMT. MANJUSHA (WIFE) AND NEW DELHI. SHRI SAKEH TAYAL (SON) LEGAL HEIR OF LATE SHRI SUKHNANDAN PREMI, G 176, JAIL ROAD, HARI NAGAR, NEW DELHI. (PAN : AANPP4723E) ITA NO.3700/DEL./2010 (ASSESSMENT YEAR : 2005-06) CO NO.347/DEL/2010 (IN ITA NO.3114/DEL./2010) (ASSESSMENT YEAR : 2006-07) SMT. MANJUSHA (WIFE) AND VS. ITO, WARD 27 (4), SHR I SHRI SAKEH TAYAL (SON), NEW DELHI. LEGAL HEIRS OF LATE SHRI SUKHNANDAN PREMI, G 176, JAIL ROAD, HARI NAGAR, NEW DELHI. (PAN : AANPP4723E) (APPELLANT) (RESPONDENT) 2 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 ASSESSEE BY : S/SHRI SALIL AGGARWAL AND SHAILESH GUPTA, ADVOCATES REVENUE BY : SHRI K.K. JAISWAL, SENIOR DR DATE OF HEARING : 16.07.2015 DATE OF PRONOUNCEMENT : 14.08.2015 O R D E R PER A.T. VARKEY, JUDICIAL MEMBER : THESE APPEALS FILED BY THE REVENUE ARE DIRECTED AGA INST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XXIV, NEW DELHI DATED 26.05.2010 & 16.04.2010 FOR THE ASSESSMENT YEARS 20 05-06 & 2006-07 RESPECTIVELY. THE ASSESSEE HAS ALSO FILED THE APPE AL FOR ASSESSMENT YEAR 2005-06 AND FILED CROSS OBJECTION FOR THE ASSESSMEN T YEAR 2006-07. 2. FIRST, WE TAKE UP CROSS APPEALS FOR THE ASSESSME NT YEAR 2005-06 (ITA NOS.3611/DEL/2010 & 3700/DEL./2010). 3. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE READ AS UNDER :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) ERRED IN 1. DELETING THE ADDITION OF RS. 50,50,000/- ON ACCO UNT OF UNDISCLOSED CREDIT ENTRY WITH SAVINGS BANK ACCOUNT OF DENA BANK; 2. DELETING THE ADDITION OF RS. 13,00,000/- ON ACCO UNT OF UNDISCLOSED CREDIT ENTRY WITH SAVING BANK ACCOUNT O F DENA BANK; 3. DELETING THE ADDITION OF RS.9,00,000/- BEING CR EDIT IN THE NAME OF SHRI S.S.H. NAQVI AND RS.5.90 LACS BEING CR EDIT ENTRY IN THE NAME OF SHEEL MEHTA ON ACCOUNT OF UNDISCLOSE D CREDIT ENTRY WITH SAVINGS BANK ACCOUNT OF DENA BANK; 3 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 4. DELETING THE ADDITION OF RS.12,42,000/- ON ACCOU NT OF ADDITION OF UNEXPLAINED CASH PEAK CREDIT, RS. 12,42 ,000/- CASH DEPOSIT IN SAVINGS BANK ACCOUNT, RS. 9,15,000/- IN HSBC BANK AND RS.15,20,000/- UNEXPLAINED CASH DEPOSITS IN PNB BANK ACCOUNT; 5. DELETING THE ADDITION OF RS. 8,00,000/- ON ACCO UNT OF SALE OF PROPERTY. THE APPEAL OF THE ASSESSEE RAISES THE FOLLOWING EFF ECTIVE GROUNDS IN THE INSTANT YEAR :- 1. THAT THE LD. CIT (A)-XXIV, NEW DELHI, ERRED ON FACTS AND IN LAW IN SUSTAINING THE ADDITION OF AMOUNT OF RS.1 0,00,000/- BEING CREDITS IN BANK ACCOUNT OF THE ASSESSEE RECEI VED THROUGH ACCOUNT PAYEE CHEQUES FROM ASSESSEES DAUGHTERS. 2. THAT THE LD. CIT (A)-XXIV, NEW DELHI, ERRED ON F ACTS AND IN LAW IN NOT ACCEPTING CASH DEPOSIT OF RS.10,0 0,000/- IN BANK ACCOUNT OF THE ASSESSEE FROM CASH AVAILABLE AS PER CASH FLOW STATEMENT BEING ALLEGEDLY TAKEN AS MARRIAGE EX PENSES INCURRED ON ASSESSEES DAUGHTER MARRIAGE PURELY ON ESTIMATED BASIS OVER AND ABOVE THE AMOUNT OF RS.1,94,765/- SH OWN BY ASSESSEE AS ACTUALLY SPENT ON MARRIAGE EXPENSES. 4. BRIEF FACTS OF THE CASE ARE AS FOLLOWS : THE RETURN OF INCOME WAS FILED ON 31.10.2005 AT AN INCOME OF RS.4,04,020/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER THE ACT) AND NOTICE U/S 143 (2) / 142(1) ALONG WITH QUESTIONNAIRE WAS ISSUED TO THE ASSESSEE. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, THE AO TOOK NOTE OF THE FACT THAT THE ASSESSEE PURCHASED PROPERTY AT FRONT PORTION OF GROUND FLOOR FLAT OF L EFT SIDE BUILDING E 23, POORVI MARG, VASANT VIHAR, NEW DEHLI AND HIS WIFE A LSO PURCHASED 4 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 PROPERTY AT REAR PORTION OF GROUND FLOOR FLAT OF LE FT SIDE BUILDING E 23, POORVI MARG, VASANT VIHAR, NEW DELHI FROM SHRI RAJ SARAOGI AND MANU SAROAGI, R/O E-5, IIND FLOOR, MAHARANI BAGH, NEW DE LHI FOR CONSIDERATION OF RS.40 LAKHS EACH AND STAMP DUTY OF RS.3,20,000/- EACH WAS PAID. THE AO OBSERVED THAT THE ASSESSEE HAD NO DETAILS REGARD ING PARTICULARS OF PAYMENT MADE BY HIM; AND REGARDING THE SOURCE TO PU RCHASE THESE PROPERTIES OTHER THAN WHAT THE ASSESSEE INFORMED AB OUT A HOME LOAN FROM HSBC BANK FOR RS.55 LAKHS AND RS.25 LAKHS. THE AO OBSERVED THAT THE ASSESSEE WAS MAINTAINING THE SB A/C NO.1546 WITH DE NA BANK, HARI NAGAR, NEW DELHI AS PER THE RETURN OF INCOME FILED BY HIM. THE ASSESSEE SUBMITTED DETAILS OF HIS SAVING BANK ACCOUNT NO.154 6 AND THE AO ASKED THE MANAGER OF DELHI BANK UNDER SECTION 133 (6) OF THE ACT TO GIVE THE STATEMENT OF THE SAME BANK ACCOUNT. THE AO OBSERVED THAT THE CREDITS/DEPOSIT IN THE ACCOUNT OF THE ASSESSEE AS P ER BANK STATEMENT OBTAINED FROM THE DENA BANK WAS RS.1,58,52,816/- WH EREAS, IN THE BANK STATEMENT SUBMITTED BY THE ASSESSEE, THE TOTAL CRED ITS/DEPOSITS WERE OF RS.37,10,872.12. A COMPARISON OF THE TWO STATEMENT S SHOWED A SUBSTANTIAL DIFFERENCE AND ACCORDINGLY, THE AO ISSU ED A SHOW CAUSE NOTICE VIDE LETTER DATED 06.12.2007 TO EXPLAIN THE DIFFERE NCE IN TOTAL DEPOSIT/CREDIT IN THE SAID BANK ACCOUNT DURING THE FINANCIAL YEAR ( 01.04.2004 TO 31.03.2005) AS PER THE STATEMENT SUBMITTED BY THE A SSESSEE AND OBTAINED 5 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 FROM THE BANK. THE AO PROVIDED A COPY OF THE BANK STATEMENT OBTAINED FROM THE BANK TO THE ASSESSEE AND THE ASSESSEE WAS ASKED TO COMPLY WITH THE NOTICE DATED 06.12.2007 WHICH REMAINED UNCOMPLI ED WITH. THE AO OBSERVED THAT THE ASSESSEE WAS MAINTAINING A SAVING BANK ACCOUNT WITH HSBC WHICH HE HAD NOT DECLARED. THE AO ALSO CALLED FOR THE INFORMATION U/S 133 (6) VIDE LETTER DATED 06.12.2007 FROM HSBC REGARDING THE HOME LOAN ACCOUNT MAINTAINED BY THE ASSESSEE AND HIS WIF E JOINTLY. THE AO OBSERVED THAT ASSESSEE HAD MADE CASH DEPOSITS OF RS .9,15,000/- (ON DIFFERENT DATES) IN THE HSBC SAVING BANK ACCOUNT AN D THE AO SHOW-CAUSED THE ASSESSEE TO EXPLAIN THE SAID CASH DEPOSITS AND AS TO WHY THE SAME SHOULD NOT BE ADDED BACK TO THE INCOME U/S 68 OF TH E ACT, BUT THE SAID NOTICE ALSO REMAINED UNCOMPLIED WITH. THE AO ALSO OBSERVED FROM THE INFORMATION OF HSBC THAT THE ASSESSEE AND HIS WIFE, MS/ MANJUSHA WERE MAINTAINING PUNJAB NATIONAL BANK LOAN ACCOUNT TO WH ICH AN AMOUNT OF RS.27 LAKHS AND RS.28 LAKHS WERE RELEASED. THE AO ASKED THE INFORMATION FROM PUNJAB NATIONAL BANK AND FOUND THAT THE ASSESS EE WAS MAINTAINING HOME LOAN ACCOUNT IN HIS NAME AND ANOTHER ACCOUNT I N HIS WIFES NAME AND ONE JOINT ACCOUNT ALSO WHICH WERE NOT DECLARED BY THE ASSESSEE. THE AO, AFTER GOING THROUGH THE DETAILS OF THE BANKS AN D OTHER RELEVANT MATERIAL, MADE THE FOLLOWING ADDITIONS :- 6 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 (I) THE AO HELD THAT KEEPING IN THE VIEW THE DEPOSIT/WI THDRAWAL OF CASH IN THE DENA BANK A/C 1546, THE PEAK CREDIT OF RS.12,42,000/- (AS PER CASH FLOW STATEMENT GIVEN IN AOS ORDER) WAS FOUND UNEXPLAINED AND ADDED TO THE INCOM E OF THE ASSESSEE; (II) FURTHER, THE AO ADDED THE UNEXPLAINED CREDIT ENTRIE S WITH DENA BANK OF RS.88,94,226/- AND THE DETAILS OF THE SAME WERE GIVEN VIDE A CHART IN HIS ORDER; (III) THE AO ALSO ASKED THE ASSESSEE TO SUBMIT SOURCE OF CASH DEPOSIT OF RS.9,15,000/- ON DIFFERENT INTERVALS IN HSBC ACCOUNT BUT THE ASSESSEE HAD NOT FILED ANY EXPLANAT ION IN THIS REGARD AND ACCORDINGLY, MADE THE ADDITION TO HIS IN COME U/S 68 OF THE ACT; (IV) FURTHER, THE AO OBSERVED THAT THERE WERE CASH CREDI T ENTRIES OF RS.9 LAKHS ON 04.02.2005, RS.5 LAKHS ON 05.02.2005 AND RS.1,20,000/- ON 08.03.2005 IN ANOTHER JOINT BANK A CCOUNT WITH PUNJAB NATIONAL BANK, HARI NAGAR, NEW DELHI AN D THE ASSESSEE HAD NOT DISCLOSED THIS BANK ACCOUNT. THER EFORE, THE AO OBSERVED THAT THE PEAK CASH CREDITS IN THIS ACCO UNT WERE UNEXPLAINED AND MADE AN ADDITION OF RS.15,20,000/- (RS.9 LAKHS + RS.5 LAKHS + RS.1,20,000); 7 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 (V) THE AO OBSERVED, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THAT ASSESSEE HAD FILED ONLY CASH RECE IPT IN RESPECT OF SALE OF PROPERTY BEARING NO.CB-133, RING ROAD, NARAIN, NEW DELHI FOR RS.8 LAKHS FROM SHRI MANGTU R AM GUJJAR. THE AO ASKED THE ASSESSEE TO FURNISH COPY OF SALE DEED VIDE QUESTIONNAIRE DATED 16.11.2007 AND ASSESS EE WAS ALSO ASKED TO PRODUCE CONFIRMATION FROM SHRI MANGTU RAM FOR THE PURCHASE OF THE SAID PROPERTY. THE AO ALSO ISSUED SUMMON U/S 131 TO SHRI MANGTU RAM ON 16.120.2007 WH ICH RECEIVED BACK UNSERVED WITH THE REMARKS THAT RECIPI ENT IS NOT THERE. THE AO OBSERVED THAT THE ASSESSEE HAD NOT F ILED ANY DOCUMENTARY EVIDENCE OF HIS OWNERSHIP PRIOR TO ALLE GED SALE OF RS.8 LAKHS AND HELD THE ALLEGED SALE OF THE SAID PROPERTY AS INCOME FROM UNDISCLOSED SOURCES. IN VIEW OF THE AFORESAID ADDITIONS, THE AO MADE THE ASSESSMENT U/S 143 (3) AT RS.1,37,75,290/-. 5. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL TO T HE FIRST APPELLATE AUTHORITY. THE CIT (A), AFTER REPRODUCING THE ORDE R OF THE AO IN HIS ORDER, GOING THROUGH THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AND THE REMAND REPORT OF THE AO, PARTLY ALLOWED THE APPEAL AS UNDE R :- 8 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 FINDINGS/ DECISIONS 5. THE ASSESSEE MOVED APPLICATION FOR ADMITTANCE OF ADDITIONAL EVIDENCE CONTENDING THAT THE ASSESSEE WA S PREVENTED BY SUFFICIENT CAUSE IN NOT FILING THE SAME BEFORE T HE AO AND THE EVIDENCE GO TO THE VERY ROOT OF THE MATTER AND HAVE A DIRECT AND SUBSTANTIAL BEARING IN DETERMINING THE CORRECT INCO ME AND TAX LIABILITY OF THE ASSESSEE FOR THE YEAR UNDER CONSID ERATION. THE PAPER BOOK CONTAINING VARIOUS DOCUMENTS/SUBMISSIONS WAS FORWARDED TO THE AO FOR SUBMISSIONS OF HIS COMMENTS . THE AO OBJECTED ADMISSION OF ADDITIONAL EVIDENCE VIDE HIS LETTER 11.11.2008 AND 12.1L.2008 BY STATING VARIOUS FACTS ALREADY MENTIONED IN THE ASSESSMENT ORDER. THE AR PLACED RE LIANCE ON THE FOLLOWING JUDGMENTS FOR ADMISSION OF THE ADDITI ONAL EVIDENCE :- 1. TARA DEVI GOENKA V. CIT [(1980) 122 ITR 14(CAL) ], 2. THE FACTS OF CIT VS. BABU LAL JAIN [1989) 176 IT R 411, 413(MP)], 3. ITO VS. SAHEBJADI DEVI 205 TAXATION 184 (CAL ITA T) (2007), 4. SHAHRUKH KHAN VS DCIT 2007 13 SOT 61 (MUMBAI ITAT), 5. CIT VS PODDAR SWADESH UDYOG (P) LTD 295 ITR 252, 6. BADRI KRISHNAMURTHY AND ACIT 208 TAXATION 64 (DE LHI ITAT), 7. SMT. PRABHAVATI S. SHAH V. CIT, [(1998) 231 ITR 1, 9 (BOM)]. 5.1 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E BY THE AR AND THE OBJECTIONS OF THE AO REGARDING ADMISSION OF THE ADDITIONAL EVIDENCE. I HAVE GONE THROUGH THE ABOVE MENTIONED JUDGMENTS. THE AR HAS CONTENDED THAT THE ASSESSEE W AS PREVENTED BY SUFFICIENT CAUSE OWING TO ILLNESS OF H IS RELATIVE. THIS FACT WAS INFORMED TO THE AO DURING THE ASSESSM ENT PROCEEDINGS. THE APPELLANT WAS REPRESENTING HIS CAS E BEFORE THE AO AS HE HAS NOT ENGAGED ANY TAX EXPERT/ADVISOR/CHA RTERED ACCOUNTANT. FURTHER, HE HAS NOT DONE COMPLIANCE IN THE 9 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 DECEMBER 2007 AS HE WAS REQUIRED TO GO OUT OF STATI ON DUE TO ILLNESS OF HIS CLOSE RELATIVE/BROTHER AS EVIDENT FR OM THE CASE RECORDS. FOR AN APPELLATE AUTHORITY, IT IS IMPLICIT IN COMING TO A PROPER CONCLUSION. IT IS FOR THIS REASON THAT THOUG H THE RULES REQUIRE NEW EVIDENCE TO BE ADMITTED ONLY WHERE THER E IS REASON FOR THE ASSESSEE FOR NOT BEING ABLE TO PRESENT SUCH EVIDENCE BEFORE THE AO. HERE, ON THE FACTS AND CIRCUMSTANCES , I AM CONVINCED THAT THE APPELLANT HAS GENUINE REASONS FO R NON- COMPLIANCE. FURTHER, IT IS CONSIDERED NOT ONLY FAIR BUT JUSTIFIED, WHERE THE APPELLATE AUTHORITY ITSELF CONSIDERS SUCH EVIDENCE NECESSARY. VARIOUS COURTS HAVE HELD THAT- WHERE THE RE IS OMISSION TO SUBMIT PART OF DOCUMENTS AS REQUIRED 'B Y THE AO, THE APPELLATE AUTHORITY MAY NOT BE JUSTIFIED MERELY BY DRAWING AN ADVERSE INFERENCE AGAINST THE ASSESSEE FAILING T O FURNISH CERTAIN DOCUMENTARY EVIDENCES AS IT WOULD AMOUNT TO A PUNITIVE MEASURE. THE APPELLATE AUTHORITY MAY WELL UNDERTAKE TO MAKE GOOD SUCH OMISSION. THEREFORE; IN THE INTEREST OF N ATURAL JUSTICE AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE, ADD ITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE IS ADMITTED. 5.2 LATER ON THE AO WAS ALSO DIRECTED TO MAKE CERTA IN ENQUIRIES U/S 250(4) OF THE ACT. THE AO SUBMITTED T HE REMAND REPORT VIDE LETTER DT. 08.02.2010, WHICH IS REPRODU CED AS UNDER: 'AT THE OUTSET, I STRONGLY OBJECT FOR THE ADMISSION OF ADDITIONAL EVIDENCE AS THE ASSESSEE HAD BEEN GRANTE D SEVERAL OPPORTUNITIES TO EXPLAIN THE CREDIT ENTRIES IN THE BANK ACCOUNT NO. 1546 OF DENA BANK. THE ASSESSEE NEVER AT ANY STAGE SUBMITTED THAT HE HAD TAKEN UNSE CURED LOANS OR ADVANCES FROM ANY PERSONS. HOWEVER ON MERITS, AS DIRECTED ENQUIRIES HAVE BEEN MADE IN RESPECT OF THE FOLLOWING UNSECURED LOANS :- 1. SILKY TAYAL SILKY TAYAL IS DAUGHTER OF ASSESSEE WHO GAVE INTERE ST FREE LOAN BY WAY OF TRANSFER ENTRY ON 08.02.2005. IN THE ACCOUNT OF SAID LADY THERE WAS A CASH DEPOSIT OF RS .3 LACS ON THE SAME VERY DATE I.E. 08/2/2005 FOR WHICH NO SATISFACTORY EXPLANATION TENDERED. 10 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 2. SVETA SVETA IS A DAUGHTER OF THE ASSESSEE WHO GAVE INTERE ST FREE LOAN OF RS. 7 LACS FROM HER BANK ACCOUNT THROUGH TRANSFER ENTRY ON 08.02.2005. ON PERUSAL OF BANK O F SAID LADY THERE WAS CASH DEPOSIT OF RS. 10 LACS ON 02.02 .2005 AND RS.2 LACS ON 08.02.2005 FOR WHICH NO SATISFACTO RY EXPLANATION TENDERED. 3. S.S.H. NAQWI ONLY THE CONFIRMED COPY OF ACCOUNT IN THE BOOKS OF ASSESSEE WAS FILED, NO BANK STATEMENT HAS BEEN FILE D. SH. S.S.H. NAQWI HAS STATED THAT THE TRANSACTION AMOUNT ING TO RS.10,51,000/- CARRIED WITH SH. SUKHNANDAN PREMI WE RE TOTALLY INTEREST FREE TRANSACTIONS. IT IS SEEN THAT THE ASSESSEE RETURNED THE AMOUNT OF RS.10,51,000/- TO S H. NAQWI DURING THE YEAR ITSELF. HENCE NO COMMENTS. 4. SH. SHEEL MEHTA & O.P. MEHTA IN THIS REGARD NOTICE U/S 133(6) ISSUED TO THE PROP ERTY DEALER NAMELY M/S PERFECT PROPERTIES, 47, COMMUNITY CENTRE, NARAINA INDUSTRIAL AREA, PHESE-I, NEW DELHI WHO VIDE THEIR REPLY DATED 07.01.2010 (AUTHORIZED SIGNA TORY OF M/S PERFECT PROPERTIES) HAS STATED THAT 'I HAD ARRA NGED TO LEASE THE PROPERTY NO. B- 2, LSC, DDA MARKET, 1 ST FLOOR, RING ROAD, NARAINA VIHAR, NEW DELHI BELONGING TO S. N. PREMI. THE TENANT SH. SHEEL MEHTA HAD GIVEN ADVANCE OF RS.90 LACS ONLY TO SH. S.N. PRETNI. HOWEVER ON ENQU IRY SH. S.N. PREMI DID NOT FIND THE TENANT SUITABLE AND THEREFORE THE AMOUNT OF RS.5.50 LACS WAS REFUNDED T O THE TENANT. I HAVE CHARGED RS.40,000/- BY CASH AS MY COMMISSION AS PER DETAILS GIVEN BELOW:- 1. RS. 15,000/- ON 07.03.2005 2. RS. 15,000/- ON 10.03.2005 3. RS. 10,000/- ON 15.03.2005 TOTAL RS. 40,000/- 11 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 IT IS VERIFIED THAT THE AMOUNT OF RS.5.50 LACS WAS RETURNED TO SH. SHEEL MEHTA DURING THE YEAR. HENCE NO COMMENTS. 5. MANJUSHA IT IS SUBMITTED BY THE LADY THAT MR. S. N. PREMI IS MY HUSBAND AND HAVING JOINT ACCOUNT IN PNB AND JOINTLY HELD HOUSING LOAN ACCOUNTS. REPAYMENT OF HOUSING LO AN IS GENERALLY MADE BY MY HUSBAND AND I ONLY REIMBURS E THE AMOUNT TO HIM. IN GENERAL ALL TRANSACTIONS IN T HE ACCOUNTS ARE RELATED TO HOUSING LOAN. THIS FACT HAS BEEN VERIFIED FROM THE BANK E/C OF MS. MANJUSHA. 6. PADMA BHANDARI THE COUNSEL OF PADMA BHANDARI VIDE HIS REPLY DATED 09.01.2010 STATED THAT THE ASSESSEE MRS. PADMA BHAN DARI PASSED AWAY ON 18.04.2008. THE LEGAL HEIR OF THE ASSESSEE IS NOT MUCH AWARE OF SPECIFIC INFORMATION. THE LADY WAS ASSESSED AT PAN AARPBL131G WITH CIRCLE 24(1), NEW DELHI. COPY OF ASSESSMENT ORDER U/S 143( 3) OF THE I. T. ACT FOR A.Y. 2005-06 IS ENCLOSED. HOWE VER A NOTICE U/S 133(6) ISSUED TO HDFC BANK FOR CALLING B ANK STATEMENT OF MRS. PADMA BHANDARI. ON PERUSAL OF BAN K STATEMENT IT IS FOUND THAT ON THE SAME VERY DAY WHE N THE LADY HAD GIVEN CHEQUES TO THE ASSESSEE, SIMILAR AMO UNT WAS RECEIVED BY THE LADY THROUGH CHEQUES FOR WHICH NO POSSIBLE EXPLANATION FILED.' 5.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND TH E WRITTEN SUBMISSIONS FILED BY THE AR, I HAVE PERUSED THE MAT ERIAL ON RECORD. IT HAS BEEN NOTICED THAT THE APPELLANT HAS SUBMITTED THE COPY OF BANK ACCOUNT ON 14.08.2007 THROUGH HIS COVE RING LETTER (PAGE 39 TO 43 OF THE RECORD). THIS BANK STATEMENT CONTAINS THE STAMP OF THE CONCERNED BRANCH. IT IS AN UNDISPUTED FACT THAT THIS BANK STATEMENT DOES NOT CONTAIN THE TRUE AFFAIRS OF THE TRANSACTIONS. WHEN IT WAS SPECIFICALLY ASKED FOR TH E PURPOSE BEHIND SUBMISSION OF SUCH BANK STATEMENT BY THE APP ELLANT; THE APPELLANT, IN PERSON HAS ADMITTED BEFORE ME THAT HE HAS NOT GIVEN THE BANK STATEMENT REFERRED BY THE AO AS FABR ICATED BANK 12 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 STATEMENT IN THE ASSESSMENT ORDER. BUT THIS ADMISSI ON HAS NEVER BEEN BROUGHT BEFORE THE AO DURING THE ASSESSMENT PR OCEEDING AND OR THERE AFTER THOUGH THE AO HAS REFERRED IT IN HIS SHOW CAUSE NOTICES. HENCE, THE AO'S INFERENCE REGARDING SUBMISSION OF FABRICATED BANK STATEMENT BY THE ASSESSEE HAS SU BSTANCE BECAUSE WHY AN ASSESSING OFFICER WILL PUT SUCH DOCU MENTS ON THE RECORD AND CALL THE EXPLANATION OF THE ASSESSEE . 5.4 THE CHART IN RESPECT OF UNEXPLAINED CREDIT ENT RIES WITH DENA BANK HARI NAGAR IS AS UNDER:- DATE DETAILS AMOUNTS (RS.) 25/08/2004 1546 TRF 400000 28/08/2004 1589 TRF 250000 13/11/2004 123248 CHEQUE 900000 13/11/2004 537873 CHEQUE 5000 17/11/2004 1589 TRF 50000 04/12/2004 28470 CHEQUE 2550000 16/12/2004 371127 CHEQUE 2550000 08/02/2005 12188 TRF 300000 08/02/2005 1589 TRF 600000 08/02/2005 9980 TRF 700000 05/03/2005 493120 CHEQUE 590000 07/03/2005 127223 CHEQUE 49226 88,94,226 5.5 TOTAL DEPOSITS THROUGH CHEQUES AND BANK TRANSFE R IN DENA BANK, HARI NAGAR, ACCOUNT TREATED AS UNEXPLAINED DE POSITS AND THUS INCOME DURING THE RELEVANT: ASSESSMENT YEAR (A Y) IS RS.88,94,226/- AS MENTIONED IN PARA 7 OF THE ASSESS MENT ORDER. ALL THESE CREDITS ARE THROUGH CHEQUES/TRANSFER ENTR Y. ALL THE TRANSFER ENTRIES ARE FROM THE BANK ACCOUNTS OF THE FAMILY MEMBERS OF THE APPELLANT (SAVING BANK ACCOUNT NUMBE R 1589, 12188 AND 9980 OF SMT MANJUSHA: RS. 13.00 LAKHS, MS . SILKY: RS. 3.00 LAKHS AND MS. SWETA: RS. 7.00 LAKHS RESPEC TIVELY IN THE SAME BRANCH OF DENA BANK). REMAINING CREDITS ARE TH ROUGH CHEQUES FROM SMT. PADMA BHANDARI: RS.50,50,000/-, S HRI S.S.H. NAQWI : RS. 9.00 LAKHS, RENT OF THE PROPERTY : 13 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 RS.5,000/-, SHRI SHEEL MEHTA: RS.5,90,000/- AND INC OME TAX REFUND : RS.49,226/-. 5.6 THE CREDIT OF RS. 50,50,000/- IN THE APPELLANT' S BANK ACCOUNT HAS BEEN EXPLAINED AS LOAN RECEIVED THROUGH CHEQUES BY SMT. PADMA BHANDARI, NOW DECEASED. THE AR SUBMIT TED THE DETAILS OF ASSESSMENT, PAN, ETC TO PROVE THE EXISTE NCE AND CREDIT WORTHINESS OF LATE SMT. PADMA BHANDARI AND GENUINENESS OF THE TRANSACTIONS. EVEN THE AO, IN HI S REMAND REPORT, HAS NOT DOUBTED THE EXISTENCE OF LATE SMT. PADMA BHANDARI. THE AO'S OBSERVATION IN THE REMAND REPORT IS EXTRACTED AS UNDER FOR PROPER APPRECIATION OF THE F ACTS: THE COUNSEL OF PADMA BHANDARI VIDE HIS REPLY DATED 09.01.2010 STATED THAT THE ASSESSEE MRS. PADMA BHAN DARI PASSED AWAY ON 18.04.2008. THE LEGAL HEIR OF THE AS SESSEE IS NOT MUCH AWARE OF SPECIFIC INFORMATION. THE LADY WAS AS SESSED AT PAN AARPBL131G WITH CIRCLE 24(1), NEW DELHI. COPY O F ASSESSMENT ORDER U/S 143(3) OF THE LT. ACT FOR A. Y . 2005-06 IS ENCLOSED. HOWEVER A NOTICE U/S 133(6) ISSUED TO HDF C BANK FOR CALLING BANK STATEMENT OF MRS. PADMA BHANDARI. ON PERUSAL OF BANK STATEMENT IT IS FOUND THAT ON THE SAME VERY DAY WHEN THE LADY HAD GIVEN CHEQUES TO THE ASSESSEE, SIMILAR AMOUNT WAS RECEIVED BY THE LADY THROUGH CHEQUES FOR WHICH NO P OSSIBLE EXPLANATION FILED. 5.6.1 AT MOST, THE AO HAS DOUBTED THE CREDITWORTHIN ESS OF LATE SMT. PADMA BHANDARI IN THE REMAND REPORT. THE AR FI LED THE CONFIRMATION OF LOAN GIVEN BY SHRI ROMESH BHANDARI, LEGAL HEIR OF SMT. PADMA BHANDARI. IT HAS BEEN DEMONSTRATED TH AT THE CREDITS APPEARING IN THE BANK ACCOUNT OF SMT. PADMA BHANDARI IS NOTHING BUT THE SALE CONSIDERATION OF IMMOVABLE PROPERTY RECEIVED BY HER. THE PAGE 217 OF THE ASSESSMENT REC ORD SHOWS THAT THE APPELLANT HAS SUBMITTED THE DETAILS IN THI S REGARD DURING THE ASSESSMENT PROCEEDINGS, BUT FAILED TO FILE THE CONFIRMATION FROM THE LENDER. THE ASSESSMENT OF LATE SMT. PADMA BHANDARI FOR AY 2005-06 WAS COMPLETED U/S 143(3) OF THE ACT. THEREFORE, IT CAN NOT BE RULED OUT THAT THE BANK AC COUNTS HAVE NOT BEEN EXAMINED THE LOAN HAS BEEN SQUARED UP/REPA ID DURING THE YEAR. CONSIDERING ALL FACTS AND CIRCUMSTANCES A ND VARIOUS JUDICIAL PRONOUNCEMENTS, I AM OF THE CONSIDERED VIE W THAT THIS CREDIT TREATED UNEXPLAINED BY THE AO IS NOT JUSTIFI ED AS ALL 14 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 CONDITIONS OF THE SECTION 68 GET FULFILLED. THE ADD ITION ON THIS SCORE IS THEREFORE, DELETED. ACCORDINGLY, THE APPEL LANT GETS RELIEF OF RS. 50,50,000/-. 5.7 THE SUM OF RS.13.00 LAKHS CREDITED IN DENA BANK IS NOTHING BUT BANK TRANSFERS FROM THE ACCOUNTS OF SMT . MANJUSHA, W/O SHRI S. N. PREMI, THE APPELLANT. THE AO HAS VER IFIED IT DURING THE REMAND PROCEEDINGS. THE RELEVANT PORTION OF THE REPORT IS EXTRACTED AS UNDER: 'IT IS SUBMITTED BY THE LADY THAT MR. S.N. PREMI IS MY HUSBAND AND HAVING JOINT ACCOUNT IN PNB AND JOINTLY HELD HO USING LOAN ACCOUNTS. REPAYMENT OF HOUSING LOAN IS GENERALLY MA DE BY MY HUSBAND AND I ONLY REIMBURSE THE AMOUNT TO HIM. IN GENERAL ALL TRANSACTIONS IN THE ACCOUNTS ARE RELATED TO HOUSING LOAN. THIS FACT HAS BEEN VERIFIED FROM THE BANK A/C OF MS. MAN JUSHA. 5.7.1 THE PAGE NUMBERED 205-209 AND 222 OF THE.9SSE SSMENT RECORD SHOW THAT THE APPELLANT HAS SUBMITTED THE DE TAILS IN THIS REGARD DURING THE ASSESSMENT PROCEEDING, BUT FAILED TO FILE THE CONFIRMATION FROM HIS WIFE, THE LENDER. THE LENDER IS ADMITTING THE TRANSACTIONS, CONSIDERING ALL FACTS AND CIRCUMS TANCES AND VARIOUS JUDICIAL PRONOUNCEMENTS, I AM OF THE CONSID ERED VIEW THAT THE CREDIT OF RS.13,00 LAKHS TREATED UNEXPLAIN ED BY THE AO IS NOT JUSTIFIED AS ALL CONDITIONS OF THE SECTION 6 8 GET FULFILLED, THE ADDITION ON THIS SCORE IS THEREFORE, DELETED, A CCORDINGLY, THE APPELLANT GETS RELIEF OF RS.13,00,000/-. 5.8 THE CREDITS IN RESPECT OF SHRI S.S.H. NAQWI: RS .9,00 LAKHS, RENT OF THE PROPERTY: RS.5,000/-, SHRI SHEEL MEHTA: RS.5,90,000/- AND INCOME TAX REFUND: RS. 49,226/- A RE ALSO TREATED EXPLAINED IN VIEW OF THE AR'S SUBMISSION, T HE AO'S REMAND REPORT AND THE FACT THAT THE RENT OF RS. 5,0 00/- HAS ALREADY BEEN TAXED AND INCOME TAX REFUND CAN NOT BE TREATED AS INCOME; FURTHER, THE CHEQUE OF I.T. REFUND WAS DEBI TED AS THE CHEQUE IS BARRED BY LIMITATION. THE CREDITS RELATIN G TO SHRI S.S.H. NAQWI: RS. 9,00 LAKHS AND SHRI SHEEL MEHTA: RS.5,90,000/- HAVE BEEN SQUARED UP/REPAID DURING TH E YEAR. THESE REPAYMENTS ALSO ESTABLISH THE FACT THAT THESE ARE GENUINE. CONSIDERING ALL FACTS AND CIRCUMSTANCES AND VARIOUS JUDICIAL PRONOUNCEMENTS, I AM OF THE CONSIDERED VIEW THAT TH E CREDIT OF RS.15,44,226/- TREATED UNEXPLAINED BY THE AO IS NOT JUSTIFIED AS 15 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 ALL CONDITIONS OF THE SECTION 68 GET FULFILLED. THE ADDITION ON THIS SCORE IS THEREFORE, DELETED. ACCORDINGLY, THE APPELLANT GETS RELIEF OF RS.15,44,226/-. 5.9 THE CREDITS IN RESPECT OF MS. SILKY: RS. 3.00 L AKHS AND MS. SWETA: RS.7.00 LAKHS APPEARING IN THE DENA BANK ACCOUNT OF THE APPELLANT, THE AR SUBMITTED THAT THESE TWO A RE DAUGHTERS OF THE APPELLANT, WHO HAVE GIVEN THE SUM OUT OF THE GIFTS RECEIVED BY THEM. THE CREDIT WORTHINESS OF THESE TW O PERSONS WAS EXPLAINED BY SUBMITTING THE SALARY CERTIFICATES AND FDRS MATURITY DETAILS, ETC. BUT THE FACT IS THAT THE BAN K ACCOUNTS THROUGH WHICH THESE TRANSFERS CAME REVEAL THAT THES E TWO PERSONS HAVE ISSUED CHEQUES IN FAVOUR OF THE APPELL ANT BY DEPOSITING CASH TO THE EQUAL SUM IN THEIR ACCOUNTS. THUS THE LOANS WERE NOT OUT OF ANY EARLIER SAVINGS AND OR DE POSITS. HENCE, THE CREDIT WORTHINESS TO THE EXTENT OF CASH DEPOSITS IS NOT OUT OF SALARY SAVINGS, FDRS, ETC. BASICALLY, IT IS FROM THE GIFTS OF RS. 7.00 LAKHS RECEIVED BY MS. SILKY AND MS. SWE TA FROM SHRI PAWAN KUMAR JAIN AND SMT. PUSHPA DEVI JAIN W/O SHRI PAWAN KUMAR JAIN R/O 76/577, KULI BAZAR, KANPUR, UP (THE DONORS HAVE GIVEN RS. 3.50 LAKHS TO EACH DONEE). IN SUPPORT OF THIS THE AR FILED GIFT DEEDS, WHICH ARE PLACED ON T HE RECORD. THESE GIFT DEEDS WERE DATED 21.01.2005. THESE ARE N OT NOTARIZED DOCUMENTS BUT ATTESTED BY THE NOTARY. TH ESE ARE NOT ON STAMP PAPERS. THE GIFTS ARE IN CASH. IT IS SURPR ISING TO NOTE THAT WHY THE APPELLANT HAS NOT SUBMITTED THE COPY O F GIFT DEEDS BEFORE THE AO WHEN THE AO HAS SPECIFICALLY ASKED TO EXPLAIN THESE CREDITS. THIS RAISES DOUBTS. THESES GIFT DEE DS SHOW NO ACCEPTANCE OF GIFTS BY DONEES. THE CREDIT WORTHINES S OF DONEES WAS NOT FILED TO SUBSTANTIATE THE GENUINENESS OF TR ANSACTIONS AS THESE TWO DONORS ARE NOT ASSESSED TO INCOME TAX AND WEALTH TAX. IN CASE THEY ARE RICH AND NOT HAVING TAXABLE INCOME THEN THE HUGE CASH ALONG WITH OTHER ASSETS, VIZ: JEWELLARY, CARS, ETC. MIGHT BE CHARGEABLE TO WEALTH TAX. 5.9.1 I HAVE CAREFULLY CONSIDERED THE OBSERVATION O F THE AO, WRITTEN SUBMISSIONS OF THE AR. THE GIFT IS NOTHING BUT CREDIT IN THE LENDER'S CASE. SO THE APPELLANT HAS TO ESTABLIS H THE CREDIT WORTHINESS OF LENDERS VIS-A-VIS THE GENUINENESS OF THE GIFTS RECEIVED BY HIS DAUGHTERS. IN THE NUTSHELL, UNDER T HE PREVAILING CIRCUMSTANCES, NEITHER THE DONORS ARE FOUND TO BE A CREDIBLE PERSON HAVING ESTABLISHED SOURCE OF INCOME, KNOWN C APACITY OF 16 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 MAKING A GIFT; AND FURTHER IN THE LIGHT OF DECISION OF HON'BLE SUPREME COURT IN THE CASE OF P. MOHAN KALA AND OBSE RVATIONS TO DECIDE THE ISSUE IN LIGHT OF DECISION IN THE CAS E OF SUMATI DAYAL, IT EMERGES THAT THE LENDERS HAVE NO CREDIT W ORTHINESS TO ADVANCE LOAN TO THE ASSESSEE. THE ADDITION OF RS.10 /00 LAKHS MADE BY THE A.O. IS THEREBY SUSTAINED. 6. THE NEXT ISSUE IS RELATED WITH THE CASH DEPOSITS IN VARIOUS BANK ACCOUNTS. THE PEAK OF DEPOSITS IN DENA BANK, C ASH DEPOSITS IN PNB AND HSBC BANK ACCOUNTS HAVE BEEN TR EATED UNEXPLAINED AND THEREFORE, ASSESSED AS INCOME. THE SOURCE OF OVER ALL INCOMING CASH TO SUBSTANTIATE THE CASH DEP OSITS IN VARIOUS BANK ACCOUNTS SUBMITTED BY THE AR IS AS UND ER : I. SALE OF GENERATOR SET AND AIR CONDITIONERS : RS .20,00,000/- II. SALE OF PROPERTY SITUATED AT CB-133, NARAINA F OR RS.8,00,000/- III. RENT RECEIPTS IN CASH : RS.1,44,490/- IV. RECEIPT FROM SHRI GANPAT SHARMA : RS.2,50,000 /- V. OPENING CASH IN HAND : RS.31,500/- VI. CASH RECEIVED FROM SMT. MANJUSHA W/O THE APPEL LANT:RS.4,87,500/- VII. CASH RECEIVED FROM SHRI S H H NAQVI : RS. 50, 000/- VIII. BANK WITHDRAWALS FROM VARIOUS BANK ACCOUNTS: RS.38,43,500/- 6.1 THE AR SUBMITTED THE CASH BOOK/CASH FLOW STATEM ENT PREPARED ON THE BASIS OF VARIOUS CASH TRANSACTION, WHICH IS ON THE RECORD. THE OPENING CASH IN HAND AND CASH RECE IPTS DURING THE YEAR AS SPECIFIED ABOVE HAVE BEEN CLAIMED TO EX PLAIN THE CASH DEPOSITS IN BANK ACCOUNTS. 6.2 THE GENERATOR AND SEVEN AIR CONDITIONERS WERE P URCHASED FROM M/S SUKHBIR PROPERTIES PRIVATE LIMITED ON 19.0 1.2005 AS EVIDENT FROM PURCHASE RECEIPTS PLACED AT PAGE 56 OF THE PAPER BOOK (PB). THE PAYMENTS WERE DONE VIDE CH. NO. 1659 94 DATED 15.11.2004 FOR RS.10 LAKHS AND CH.NO.179655 D ATED 19- 1-2005 FOR RS.10 LAKHS DRAWN ON DENA BANK HARI NAGA R (PB 11 & 12 - DENA BANK STATEMENT). OUT OF THIS, 7 ACS WER E SOLD FOR RS.7.00 LAKHS IN CASH TO SATYAM FURNISHERS ON 01.02 .2005. THE CASH RECEIPT OF THE SAME DULY CONFIRMED BY THE BUYE R WAS FILED AT PB 57 WITH PAN OF SAT YAM FURNISHERS, PROPRIETOR : SHRI NARANDER : ADRPN8017E. THE DG SET WAS SOLD FOR RS. 13.00 LAKHS IN CASH TO SHIVAM ENTERPRISES ON 31ST JANUARY 2005. THE CASH RECEIPT OF THE SAME WAS FILED AT PB 58 DULY CO NFIRMED BY 17 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 THE SHIVAM ENTERPRISES: PROPRIETOR: SHRI MAHENDER K UMAR WITH HIS PAN: ADZPK0960B. THE PURCHASE OF GENERATOR SET AND AIR CONDITIONERS ARE THROUGH CHEQUES WHERE AS S ALE ARE IN CASH. THE ACQUISITION OF THESE ASSETS BY THE ASSESS EE GETS ESTABLISHED BY THE SALE BILL OF THE SELLER, M/S SUK HBIR PROPERTIES PRIVATE LIMITED ON 19.01.2005. SINCE THESE ASSETS A RE NOT REFLECTED IN THE STATEMENT OF AFFAIRS OF THE ASSESS EE AS ON 31.03.2005, THEREFORE, ITS SALES CAN NOT BE DOUBTED AS THE APPELLANT HAS SHOWN ALL MOVABLE AND IMMOVABLE ASSET S IN HIS STATEMENT OF AFFAIRS FILED OVER THE PERIOD INCLUDIN G THE RELEVANT YEAR. THEREFORE, THE MODE OF RECEIPT CAN ALSO NOT B E DOUBTED UNLESS PROVED OTHER WISE. THE CASH, RECEIVED FROM T HE SALE OF THE DG SET AND AIR CONDITIONERS, THEREFORE, IS HELD JUSTIFIED AND EXPLAINED. HOWEVER, THE AO MAY PASS ON THIS INFORMA TION TO THE CONCERNED AOS OF SHRI MAHENDER KUMAR PAN: ADZPK0960B AND SHRI NARANDER PAN: ADRPN8017E FOR TAKING REMEDIAL ACTION IN THEIR HANDS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 40A(3)/69C/69/69B OF THE ACT AS THE CASE MAY BE. 6.3 THE CASH RECEIVED FROM THE SALE OF THE PROPERTY AT NARAINA IS NOT QUESTIONABLE AS IT HAS BEEN SHOWN IN THE RETURN FILED U/S 139 OF THE ACT. THE CASH RECEIVED FROM TH E SALE OF THIS ASSET, THEREFORE, IS HELD JUSTIFIED AND EXPLAINED. THE DETAILS IN THIS REGARD WILL BE DISCUSSED IN THE SUBSEQUENT PAR A. 6.4 THERE IS NO DISPUTE ON THE RENT RECEIPT IN CAS H AS IT HAS BEEN ASSESSED AS SUCH. THE APPROPRIATION OF IT THRO UGH DEPOSITS IN BANK ACCOUNT IS THEREFORE, HELD JUSTIFIED. 6.5 IN RESPECT OF CASH RECEIPT OF RS. 2.50 LAKHS FR OM SHRI GANPAT SHARMA, THE APPELLANT FILED THE COPY OF AGRE EMENT FOR SALE OF ROOF RIGHTS IN RESPECT OF PROPERTY AT JAIL ROAD, NEW DELHI. THE AR FILED THE COPY OF PAN: ANXPS9651H AND ADDRESS OF VENDEE MR. GANPAT SHARMA. THE CASH RECEI PT OF RS. 2,50,000/- IS AN ADVANCE (PB 83-86) FOR SALE OF ROO F RIGHTS G- 176 HARI NAGAR. FURTHER, THE APPELLANT RECEIVED RS. 2,00,000/- IN AY 2006-2007. THIS SUM OF RS. 2.00 LAKHS HAS BEE N ACCEPTED BY THE AO IN THE ASSESSMENT ORDER PASSED U /S 143(3) OF THE ACT. THEREFORE, THE CASH RECEIPT OF RS. 2.50 LAKHS FROM SHRI GANPAT SHARMA IN THE RELEVANT YEAR IS ALSO ACC EPTED IN VIEW OF AR'S SUBMISSION. THE AO MAY PASS ON THIS IN FORMATION 18 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 TO THE CONCERNED AO FOR TAKING .REMEDIAL ACTION IN THE HANDS OF SHRI GANPAT SHARMA IN ACCORDANCE WITH THE PROVISION S OF SECTION 40(IA)/40A(3)/69C/69/69B OF THE ACT AS THE CASE MAY BE. 6.6 IN VIEW OF FACTS, STATEMENT OF AFFAIRS AS ON 31 .03.2004 OF THE APPELLANT, THE AO'S REMAND REPORT, BANK WITHDRA WALS AND THE AR'S SUBMISSION, I AM OF THE CONSIDERED VIEW TH AT THE INCOMING CASH IS NOT QUESTIONABLE IN RESPECT OF FOL LOWINGS: I. OPENING CASH IN HAND: RS.31,500/- II. CASH RECEIVED FROM SMT. MANJUSHA W/O THE APPEL LANT: RS.4,87,500/- III. CASH RECEIVED FROM SHRI S H H NAQVI: RS. 50,0 00/- IV. BANK WITHDRAWALS FROM VARIOUS BANK ACCOUNTS: RS.38,43,500/- 6.6.1 THE APPROPRIATION OF THESE INCOMING CASH AS E XPLAINED IN THE CASH FLOW STATEMENT IS PURELY MECHANICAL WHEN T HE HOUSE HOLDS EXPENSES AND MARRIAGE EXPENSES OF THE DAUGHTE R OF THE APPELLANT ARE CONSIDERED DURING THE RELEVANT YEAR. THE TOTAL EXPENSES/WITHDRAWAL FOR MARRIAGE I.E. RS.1,94,765/- . THE HOUSE HOLD EXPENSES HAVE TO BE SUBDIVIDED INTO FOLLOWING SUB-HEADS FOR PROPER ESTIMATION PER ANNUM IN THE CASE OF THE APPELLANT: HOUSE TAX, WATER TAX, ELECTRICITY, TELEPHONE INCLUD ING MOBILES, DOMESTIC HELP, FOOD INCLUDING MILK, WASHING AND WAS HER MAN, COMMON SOCIETY SECURITY GUARD AND SWEEPER, CLOTHES, MEDICAL, CHARITY, CONVEYANCE, ENTERTAINMENT INCLUDING CABLE CHARGES, NEWS PAPERS AND MAGAZINES, MISCELLANEOUS NOT GROUPE D ABOVE, ETC, ETC. AFTER ANALYZING THE HOUSE HOLD EXPENSES I N ENTIRETY AND THE CASH SAVINGS/CASH IN HAND WITH EACH INDIVIDUAL, NON UNIFORMITY OF WITHDRAWALS AND MARRIAGE EXPENSES: EN GAGEMENT, RING CEREMONY, JEWELLERY, CLOTH, FOOD ING, RECEPTIO N, PHOTOGRAPHY, VIDEOGRAPHY, MUSIC, MEHANDI RASM, VEHICLE/CONVEYANCE, MARRIAGE VENUE PLACE EXPENSES, DECORATION AND LIGHTS, BARAT ACCOMMODATION, GIFTS, ETC, ETC, I AM OF THE CONSIDERED VIEW THAT THE TOTAL EXPENDITURE ON THIS ACCOUNT CAN NOT BE LESS THAN RS.10.00 LAKHS IN ADDITION TO WITH DRAWALS FOR HOUSE HOLD AND MARRIAGE EXPENSES, WHICH HAVE BEEN M ET OUT OF 19 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 THE ABOVE INCOMING CASH. THEREFORE, THE CASH OF RS. 10.00 LAKHS SHOWN TO HAVE BEEN DEPOSITED OUT OF ABOVE INCOMING CASH IS HELD UNEXPLAINED. THE BANK DEPOSIT OF RS.10.00 LAKH S THEREFORE, IN AGGREGATE OUT OF THE TOTAL ADDITION MADE UNDER T HE HEAD PEAK OF DEPOSITS IN DENA BANK, CASH DEPOSITS IN PNB AND HSBC BANK ACCOUNTS, IS UPHELD. ACCORDINGLY, THE APPELLAN T GETS RELIEF OF RS. 26,77,000/-. 7. VIDE GROUND NO. 7 THE ASSESSEE HAS CHALLENGED AD DITION OF RS. 8,00,000/- MADE BY THE AO ON ACCOUNT OF SALE OF PROPERTY. THE AO NOTED THAT THE ASSESSEE WAS NOT ABLE TO ESTA BLISH THE FACTUM OF SALE OF PROPERTY. RELEVANT TEXT OF THE AO 'S ORDER IS REPRODUCED HEREUNDER :- 10. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE HAS FILED RECEIPT IN RESPECT OF SALE OF PR OPERTY BEARING NO.CB 133, RING ROAD, NARAINA, NEW DELHI SOLD FOR A CONSIDERATION OF RS.8,00,000/- FOR WHICH HE HAS ONLY FURNISHED COPY OF CASH RECEIPT OF RS.8,00,000/ - RECEIVED FROM SH MANGTU RAM GUJJAR 5/0 SH BALU RAM GUJIER, R/O AT PRESENT E-L, GAZIPUR, DAIRY FARM, GA ZIPUR, NEW DELHI FOR SALE OF PROPERTY NO. CB- 133, RING RO AD, NARAINA, NEW DELHI COMPRISING OF TWO ROOMS, ONE HAL L, ONE LATRINE-BATHROOM. THE ASSESSEE WAS ASKED TO FUR NISH COPY OF SALE DEED FOR SALE OF PROPERTY NO CB-133, R ING ROAD, NARAINA, NEW DELHI VIDE QUESTIONNAIRE DATED 16/11/2007. ASSESSEE WAS ALSO ASKED TO PRODUCE CONFIRMATION FROM SH MANGTU RAM FOR THE PURCHASE OF THE SAID PROPERTY. SUMMON U/S 131 WAS ALSO ISSUED T O SH MANGTU RAM ON 16/10/2007 WHICH RECEIVED BACK UNSERVED WITH POSTAL AUTHORITY REMARKS THAT RECEIPT ANT IS NOT THERE. THE ASSESSEE HAS NOT FILED ANY DOCUMENTARY EVIDENCE OF HIS OWNERSHIP PRIOR TO ALLEGED SALE FOR RS. 8,00,000/-, THE CASH PROCEEDS HAS BEEN UTILISED BY THE ASSESSEE FOR CASH DEPOSIT- IN BANK RS. 5,00,000/- 22/01/2005 AND RS. 3,00,000/- S PENT ON PURCHASE OF ANOTHER PROPERTY. THE ALLEGED SALE OF A BOVE PROPERTY IS TREATED AS INCOME FROM UNDISCLOSED SOUR CES.' 7.1 THE AR'S SUBMISSION IN THIS REGARD IS REPRODUC ED AS UNDER: 20 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 THE ASSESSEE DULY FILED THE RECEIPT DURING THE CO URSE OF ASSESSMENT AT PN 44 OF THE ASSESSMENT RECORD IN RES PECT OF SALE OF PROPERTY BEARING NO. CB-133, RING ROAD, NARAINA, NEW DELHI SOLD TO SH. MANGTU RAM GUJJAR FOR A CONSIDERA TION OF RS. 8 LACS. THE ADDITION WAS MADE AS THE ASSESSEE FAILED TO P ROVIDE DOCUMENTARY EVIDENCE OF HIS OWNERSHIP PRIOR TO ALLE GED SALE IGNORING THE FACT THAT THE SAID PROPERTY WAS DULY B EEN DISCLOSED BY THE ASSESSEE IN HIS STATEMENT OF AFFAIRS OF THE LAST YEAR I. E. A Y 2003-2004 & AY 2004-2005, COPIES OF THE SAME ARE AT PB 72 & 73 SHOWING THE COST OF THE PROPERTY AT RS. 7,86,6 00/-. THE OTHER DOCUMENTARY EVIDENCES COULD NOT BE PROD UCED DURING THE COURSE OF ASSESSMENT AS THE ASSESSEE WAS NOT ABLE TO LOCATE THE SAME. THESE EVIDENCES OF PURCHASE AND SA LE OF THIS PROPERTY ARE AT PB 63-86 OF THE PAPER BOOK. PROPERTY NO. CB-133 NARAINA WAS SHOWN IN THE ASSESSEE'S INCOME TAX RETURN FOR LAST SEVERAL YEARS AT RS. 7,86,000/- (PB 70-75) AND. THE SAID PROPERTY WAS PU RCHASED BY THE ASSESSEE IN 1980 AT RS. 48000/- (PB 63-69) AND WITH SUBSEQUENT IMPROVEMENTS THE COST IN ASSESSEE'S STAT EMENT OF AFFAIRS AS ON 31.3.2004 WAS RS. 7,86,000/- AS DULY FILED WITH HIS ITR FOR AY 2004-2005 (PB 70-75). COPY OF DOCUME NTS REGARDING PURCHASE OF SAID PROPERTY IS AT PB 63-69. COPY OF SALE DOCUMENTS REGARDING THE SALE OF SAID PROPERTY ARE AT PB 76- 82. COMPUTATION OF LONG TERM CAPITAL LOSS ON SALE O F SAID PROPERTY IS AT PB 115. THE SAID PROPERTY IS SOLD TO MR. MANGTU RAM GUJJAR AT RS.8,00,000/- IN CASH. 7.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE AND THE SUBMISSION OF THE APPELLANT IN THIS REGARD. THE PRO PERTY UNDER REFERENCE HAS BEEN SHOWN TRANSFERRED OUT IN THE DET AILS ANNEXED WITH THE RETURN. THIS PROPERTY FOUND MENTIONED IN T HE STATEMENT OF AFFAIRS OF EARLIER YEARS BUT NOT IN THE STATEMEN T OF AFFAIRS FILED ALONG WITH THE RETURN OF THE RELEVANT YEAR. THE BUY ER OF THE PROPERTY WAS THE TENET OF THE ASSESSEE. AFTER THE S ALE, THIS PROPERTY WAS ACQUIRED BY THE DEFENCE. MAXIMUM, CAP ITAL GAINS DERIVED ON THE TRANSFER OF THIS PROPERTY SHOULD BE ASSESSED IN THE HANDS OF THE APPELLANT. THE TOTAL SALE OF THE PROPE RTY, EVEN 21 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 UNDISCLOSED CAN NOT BE TAXED IN THE HANDS OF THE AP PELLANT IN THE RELEVANT YEAR. IN CASE THE INVESTMENT IN THE PROP ERTY, IF UNEXPLAINED, SHOULD BE TAXED IN THE YEAR OF PURCHAS E, WHICH IS NOT THE RELEVANT YEAR. IT IS ALSO SURPRISE TO NOTE THAT THE SALE CONSIDERATION IN CASH CLAIMED TO HAVE BEEN DEPOSITE D IN THE BANK HAS BEEN TAXED AS SUCH AS UNEXPLAINED CASH DEP OSIT IN BANK AND AGAIN AS SALE CONSIDERATION. THIS DOUBLE A DDITION, EVEN IN EXTREME CIRCUMSTANCES, CAN NOT BE CALLED F OR. THE ADDITION IS THEREFORE, DELETED. THE APPELLANT THERE FORE, GETS CONSEQUENTIAL RELIEF OF RS. 8.00 LAKHS. 6. GROUND NOS.1, 2 & 3 OF THE REVENUES APPEAL AND GROUND NO.1 OF ASSESSEES APPEAL RELATES TO THE DELETION OF ADDITI ON OF RS.78,40,000/- (RS.50,50,000/- + RS.13,00,000/- + RS.9,00,000/- + RS.5,90,000/- = RS.78,40,000/-) AND THE GROUND NO.1 OF THE ASSESSEE CHALLENGES THE SUSTENANCE OF THE ADDITION OF RS.10 LACS. 7. WE FIND THAT THE ASSESSEE BEFORE THE AO HAD PROD UCED A BANK STATEMENT THROUGH A COVERING LETTER DATED 14.08.200 7 OF DENA BANK. THE AO TOOK THE BANK STATEMENT FROM THE CONCERNED BRANC H OF THE DENA BANK AND HE FOUND THAT THERE WAS DISCREPANCY IN THE BANK STATEMENT FILED BY THE ASSESSEE AND WHICH WAS PROVIDED BY THE BANK AUTHORI TIES. WE FIND THAT THE AO HAS ADDED THE UNEXPLAINED CREDIT ENTRIES WITH TH E DENA BANK TO THE TUNE OF RS.88,94,266/- AS ADDITION TO THE TOTAL INC OME OF THE ASSESSEE. THE FIRST APPELLATE AUTHORITY HAS OBSERVED THAT AOS IN FERENCE REGARDING THE ASSESSEE FILING FABRICATED BANK STATEMENT IS CORREC T. ON MERITS, THE AO TOOK NOTE THAT ALL THE CREDITS FROM 25.08.2004 TO 0 7.03.2005 ARE THROUGH 22 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 CHEQUES/TRANSFER ENTRIES. HE ALSO TOOK NOTE OF THE FACT THAT AN AMOUNT OF RS.23 LAKHS ARE TRANSFER ENTRIES FROM THE BANK ACCO UNTS OF THE FAMILY MEMBERS OF THE ASSESSEE WHO WERE HIS WIFE AND DAUGH TERS WHO WERE HAVING ACCOUNT IN THE SAME BRANCH OF THE DENA BANK. THE REMAINING CREDITS WERE THROUGH CHEQUES FROM SMT. PADMA BHANDA RI OF RS.50,50,000/- , SHRI S.S.H. NAQWI OF RS.9 LAKHS, RENT OF THE PROP ERTY RS.5,000/-, SHRI SHEEL MEHTA OF RS.5,90,000/- AND INCOME-TAX REFUND OF RS.49,226/-. 7.1 IN RESPECT TO THE CREDIT OF RS.50,50,000/-, W E FIND THAT THE CIT (A) HAS CALLED FOR THE REMAND REPORT WHICH HAS BEEN REP RODUCED (SUPRA IN PARA 5.6 OF THE CIT (A)S ORDER) WHEREIN, THE AO HAD STA TED THAT THE SAID SMT. PADMA BHANDARI HAS PASSED AWAY ON 18.04.2008 AND TH E LEGAL HEIRS OF THE ASSESSEE ARE NOT AWARE OF THIS PARTICULAR SPECIFIC INFORMATION. THE AOS SUSPICION IS ONLY BASED ON THE FACT THAT ON THE DAY THE LADY HAS GIVEN CHEQUES TO THE ASSESSEE, SIMILAR AMOUNT WAS RECEIVE D BY THE LADY ON THE SAME DAY THROUGH CHEQUES FOR WHICH NO POSSIBLE EXPL ANATION WAS FILED BY THE ASSESSEE. OTHER THAN THE SAID OBSERVATION OF T HE AO, THERE WAS NOTHING TO CHALLENGE THE IDENTITY OF THE LENDER. THE LD. C IT (A) HAS STATED THAT THE ASSESSMENT OF LATE SMT. PADMA BHANDARI WAS COMPLETE D FOR AY 2005-06 U/S 143 (3) OF THE ACT AND HAS STATED THAT CREDITS APPEARING IN THE BANK ACCOUNT OF SMT. PADMA BHANDARI WERE FROM THE SALE C ONSIDERATION OF AN IMMOVABLE PROPERTY, THEREFORE, JUST BECAUSE CONFIRM ATION WAS NOT GIVEN IN 23 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 RESPECT TO LENDING OF THIS AMOUNT WHICH HAS BEEN RE PAID DURING THE YEAR, CANNOT BE SAID TO BE UNDISCLOSED INCOME OF THE ASSE SSEE AND, THEREFORE, RIGHTLY DELETED BY THE LD. CIT (A) WHICH DOES NOT R EQUIRE ANY INTERFERENCE FROM OUR SIDE. THEREFORE, THE REVENUES GROUND NO. 1 STANDS DISMISSED. 7.2 GROUND NO.2 DEALS WITH THE ADDITION OF RS.13 LA KHS ON ACCOUNT OF UNDISCLOSED CREDIT ENTRY FROM SAVING BANK ACCOUNT O F DENA BANK. THE LD. CIT (A) HAS DELETED THE SAME SINCE THE AMOUNT HAS B EEN CREDITED BY BANK TRANSFER FROM THE ACCOUNT OF THE WIFE OF THE ASSESS EE. IN THE REMAND REPORT OF THE AO WHICH IS REPRODUCED IN PARA 5.7 OF THE CI T (A)S ORDER (SUPRA), THE AO HAS NOT MADE ANY ADVERSE OBSERVATION AGAINST THE TRANSFER OF THE AMOUNT INTO THE ACCOUNT OF THE ASSESSEE. THE CIT ( A) NOTES THAT JUST BECAUSE THE WIFE DID NOT FILE THE CONFIRMATION OF L ENDING THE SAID AMOUNT, CANNOT BE THE GROUND TO MAKE THE ADDITION AS INCOME FROM UNDISCLOSED SOURCES WHEN THE FACT IS THAT SMT. MANJUSHA (ASSESS EES WIFE) HERSELF HAS ADMITTED ABOUT THE TRANSACTION. IN THE SAID FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE ON THIS GROUND AND WE UPHOLD THE DECISION OF THE LD. CIT (A) ON TH IS ISSUE AND DISMISS GROUND NO.2 OF REVENUES APPEAL. 7.3 GROUND NO.3 OF REVENUES APPEAL IS AGAINST DELE TING ADDITION OF RS.9 LACS BEING CREDIT ENTRY IN THE NAME OF SHRI S.S.H. NAQWI AND RS.5,90,000/- BEING CREDIT ENTRY IN THE NAME OF SHRI SHEEL MEHTA. WE FIND THAT THE CIT 24 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 (A) HAS CALLED FOR THE REMAND REPORT WHICH HAS BEEN EXTRACTED IN PARA 5.2.3 AND 5.2.4 (SUPRA) WHEREIN THE AO HAS SAID IN RESPEC T TO SHRI S.S.H. NAQWI THAT THE SAID PERSON HAD TRANSACTED AN AMOUNT OF RS .10,51,000/- TO THE ASSESSEE AS INTEREST FREE TRANSACTION AND THE ASSES SEE HAD RETURNED THE AMOUNT OF RS.10,51,000/- DURING THE RELEVANT ASSESS MENT YEAR ITSELF, SO THE AO HAD NO OTHER ADVERSE COMMENTS ABOUT THE SAID ISS UE. IN THE LIGHT OF THE SAID REMAND REPORT, THE LD. CIT (A) HAS FOUND T HAT THE SAID AMOUNT HAS BEEN AN INTEREST FREE LOAN BY SHRI S.S.H. NAQWI TO THE ASSESSEE AND THE SAID AMOUNT BORROWED HAS BEEN REPAID BY THE ASSESSEE ALS O DURING THE YEAR UNDER CONSIDERATION, THEREFORE, THE TRANSACTIONS AR E GENUINE AND SO HE DIRECTED TO DELETE THE SAME. LIKEWISE, IN THE CASE OF SHRI SHEEL MEHTA TOO, AN AMOUNT OF RS.5,90,000/- WAS SAID TO HAVE BEEN GI VEN AS AN ADVANCE AND THE SAID SHRI SHEEL MEHTA WAS THE TENANT OF THE ASS ESSEE AND HAS GIVEN AN ADVANCE FOR THE SAID PROPERTY. THE AO TOOK NOTE OF THE FACT THAT THE SAID SHRI SHEEL MEHTA LATER ON CHANGED HIS MIND AND DID NOT WANT THE PROPERTY, SO THE AMOUNT OF RS.40,000/- WAS TAKEN AS COMMISSIO N AND THE BALANCE AMOUNT OF RS.5,50,000/- WAS PAID BACK TO SHRI SHEEL MEHTA DURING THE SAME YEAR. IN THE REMAND REPORT, THE AO HAD EXPRES SED HIS SATISFACTION ABOUT THE REPAYMENT OF THE SAID ADVANCE TAKEN FROM SHRI SHEEL MEHTA. IN THE LIGHT OF THE SAID FACTS, THE CIT (A) HAS HELD T HAT THE TRANSACTIONS OF BOTH THE PERSONS WERE GENUINE AND, THEREFORE, THE AMOUNT WHICH WAS CREDITED IN 25 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 ASSESSEES ACCOUNT CANNOT BE TERMED AS INCOME FROM UNDISCLOSED SOURCES AND THEREFORE, RIGHTLY DELETED THE SAID ADDITION. ACCORDINGLY, WE CONFIRM THE ACTION OF THE LD. CIT (A) AND DISMISS THE GROUN D NO.3 OF THE REVENUES APPEAL. 7.4 GROUND NO.1 OF THE ASSESSEES APPEAL IS RELATIN G TO SUSTENANCE OF ADDITION OF AN AMOUNT OF RS.10 LAKHS WHICH WAS CRED ITED TO THE ASSESSEES ACCOUNT BY ACCOUNT PAYEE CHEQUES FROM THE ASSESSEE S DAUGHTERS. WE FIND THAT AN AMOUNT OF RS.3 LAKHS WAS DEPOSITED BY MS. S ILKY TAYAL AND AN AMOUNT OF RS.7 LAKHS WAS DEPOSITED BY MS. SVETA WHO WERE ACCOUNT HOLDERS OF THE SAME BRANCH OF DENA BANK. THE LD. C IT (A) HAS CALLED FOR THE REMAND REPORT WHEREIN THE AO HAS TAKEN NOTE OF THE FACT THAT IN SILKYS CASE, THE INTEREST FREE LOAN WAS GIVEN BY TRANSFER ENTRY ON 08.02.2005. HOWEVER, HE TAKES NOTE THAT THERE WAS A CASH DEPOSI T OF RS.3 LAKHS ON THE SAME VERY DATE I.E. 08.02.2005 FOR WHICH NO SATISFA CTORY EXPLANATION WAS TENDERED BY MS. SILKY OR ASSESSEE. BEFORE THE LD. CIT (A), IT WAS CONTENDED BY THE ASSESSEE THAT THE AMOUNT OF RS.3 L AKHS AND RS.7 LAKHS WERE GIVEN AS GIFT. THE SAID GIFT DEEDS DATED 21.0 1.2005 WERE NOT BELIEVED BY THE CIT (A) BECAUSE THEY WERE NEITHER NOTARIZED NOR IT WERE ON THE STAMP PAPER AND THE CIT (A) WONDERED WHY THE ASSESS EE COULD NOT PRODUCE THE SAID DOCUMENTS BEFORE THE AO. THEREFOR E, THE LD. CIT (A) DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE THAT THE DAUGHTERS RECEIVED THE 26 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 GIFT DEEDS FROM SHRI PAWAN KUMAR JAIN AND SMT. PUSH PA DEVI JAIN (DONORS). BEFORE US, IT WAS CONTENDED BY THE LD. A R THAT THE DONORS WERE NONE OTHER THAN THE GRAND-PARENTS OF THE DONEE. TH EREFORE, ACCORDING TO HIM, THE LD. CIT (A) OR THE AO SHOULD NOT HAVE BRUS HED ASIDE THE FACT THAT GRAND-PARENTS GIVING A GIFT TO THE GRAND-DAUGHTERS IS NOT UNUSUAL FACT. ON THE OTHER HAND, THE LD. DR QUESTIONED THE CREDITWOR THINESS OF THE DONORS, WHICH ACCORDING TO HIM, HAS NOT BEEN PROVED BY THE ASSESSEE, SO THE ADDITION WAS MADE. WE HAVE HEARD BOTH THE PARTIES AND WE FIND THAT THIS ISSUE OF GIFT, WHICH IS BEING CONTENDED BY THE ASSE SSEE, AS OBTAINED AS A GIFT TO GRAND-DAUGHTERS FROM GRAND-PARENTS, WHO IN TURN HAS TRANSFERRED THE SAME TO THE FATHER (ASSESSEE) NEEDS TO BE DE NOVO C ONSIDERED BY THE AO. THEREFORE, WE SET ASIDE THE ORDER OF THE CIT (A) ON THIS ISSUE AND REMAND THE MATTER BACK TO THE FILE OF THE AO FOR DE NOVO C ONSIDERATION OF THIS ISSUE. 8. GROUND NO.4 OF THE REVENUES APPEAL IS AGAINST T HE DELETION OF ADDITION OF RS12,42,000/- ON ACCOUNT OF ADDITION OF UNEXPLAINED CASH PEAK CREDIT IN SAVING BANK ACCOUNT FROM DENA BANK, RS.9, 15,000/- IN HSBC BANK ACCOUNT AND RS.15,20,000/- AS UNEXPLAINED CASH DEPOSIT IN PNB BANK ACCOUNT (I.E. TOTAL RS.36,77,000/-) AND GROUND NO.5 IS AGAINST DELETION OF RS.8 LAKHS ON ACCOUNT OF SALE OF PROPERTY AND GR OUND NO.2 OF ASSESSEES APPEAL IS AGAINST THE SUSTENANCE OF ADDITION OF RS. 10 LACS. 27 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 9. THE LD. CIT (A) HAS TAKEN NOTE THAT THE AO HAS T AKEN THE PEAK OF DEPOSITS IN DENA BANK AND CASH DEPOSITS IN PNB & HS BC BANK AS UNEXPLAINED AND ADDED TO THE INCOME OF THE ASSESSEE . BEFORE THE LD. CIT (A), IN ORDER TO SUBSTANTIATE THE SOURCE OF THE CAS H WHICH WAS DEPOSITED IN ASSESSEES VARIOUS ACCOUNTS, THE FOLLOWING WAS FUR NISHED BEFORE HIM :- I. SALE OF GENERATOR SET AND AIR CONDITIONERS : RS .20,00,000/- II. SALE OF PROPERTY SITUATED AT CB-133, NARAINA F OR RS.8,00,000/- III. RENT RECEIPTS IN CASH : RS.1,44,490/- IV. RECEIPT FROM SHRI GANPAT SHARMA : RS.2,50,000 /- V. OPENING CASH IN HAND : RS.31,500/- VI. CASH RECEIVED FROM SMT. MANJUSHA W/O THE APPEL LANT:RS.4,87,500/- VII. CASH RECEIVED FROM SHRI S H H NAQVI : RS. 50, 000/- VIII. BANK WITHDRAWALS FROM VARIOUS BANK ACCOUNTS: RS.38,43,500/- THE CIT (A) TOOK NOTE OF THE FACT THAT THE ASSESSEE HAD SUBMITTED THE CASH BOOK AND CASH FLOW STATEMENT WHICH HAS BEEN PREPARE D ON THE BASIS OF VARIOUS CASH TRANSACTIONS AND WAS PLACED ON RECORD. BEFORE THE CIT (A), THE ASSESSEE HAD CONTENDED THAT OPENING CASH IN HAN D AND CASH RECEIPTS DURING THE YEAR HAVE BEEN CLAIMED TO EXPLAIN THE CA SH DEPOSITS IN THE BANK ACCOUNT. THE LD. CIT (A) HAS TAKEN NOTE OF THE FAC T THAT THE ASSESSEE HAD PURCHASED A GENERATOR AND SEVEN AIR CONDITIONERS FR OM M/S. SUKHBIR PROPERTIES PRIVATE LIMITED ON 19.01.2005 (PURCHASE RECEIPTS PLACED AT PAGE 56 OF THE PB) AS NOTED BY THE CIT (A). THE LD. CIT (A) TOOK NOTE OF THE FACT THAT THE SAID TRANSACTION WAS BY CHEQUE NO.165 994 DATED 15.11.2004 FOR RS.10 LAKHS AND CHEQUE NO.179655 DATED 19.01.20 05 FOR RS.10 LAKHS DRAWN ON DENA BANK, HARI NAGAR (PB PG. 11 & 12- DEN A BANK STATEMENT). 28 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 OUT OF THESE SEVEN AIR-CONDITIONERS WHICH WERE PURC HASED, THE CIT (A) NOTES THAT THE SAME HAD BEEN SOLD FOR RS.7 LAKHS TO IN CASH TO M/S. SATYAM FURNISHERS ON 01.02.2005 AND THE CASH RECEIPT OF TH E SAME WAS CONFIRMED BY THE BUYER WHICH WAS PLACED AT PB 57 WITH PAN OF M/S. SATYAM FURNISHERS, PROPRIETOR, SHRI NARANDER. THE CIT (A) TOOK NOTE OF THE FACT THAT DG SET WAS SOLD BY THE ASSESSEE FOR RS.13 LAKH S IN CASH TO SHIVAM ENTERPRISES ON 31.01.2005 AND THE CASH RECEIPT FOR THE SAME WAS FILED AT PB PG. 58 WHICH WAS ALSO CONFIRMED BY SHIVAM ENTERP RISES WHOSE PAN HAS ALSO BEEN FURNISHED. THE CIT (A) TOOK NOTE THA T THE PURCHASES OF DG SET AND AIR-CONDITIONERS WERE THROUGH CHEQUES WHERE AS THE SALE OF THE SAID GOODS WERE BY CASH. THE LD. CIT (A) TOOK NOTE OF T HE FACT THAT SINCE THE SALES HAD TAKEN PLACE ON 19.01.2005 AND THESE GOODS /ASSETS ARE NOT REFLECTED IN THE STATEMENT OF AFFAIRS OF THE ASSESS EE AS ON 31.03.2005, THEREFORE, HE DOES NOT DOUBT THE SALES AND MODE OF RECEIPT AS CLAIMED BY THE ASSESSEE AND SO HE HELD THAT THERE WAS NO JUST IFICATION TO HOLD THAT THE SAID ENTRIES IN THE ACCOUNT ARE UNEXPLAINED AND HE BELIEVED THAT BY THE SAID TRANSACTION, AN AMOUNT OF RS.20 LAKHS OF CASH WAS D EPOSITED IN ASSESSEES ACCOUNT. LD. DR COULD NOT FURNISH ANY MATERIAL BEF ORE US TO CONTROVERT THE SAID FINDING OF THE LD. CIT (A). IN THE ABSENCE OF ANY OTHER MATERIAL TO CONTRADICT THE SAID TRANSACTIONS MADE BY THE ASSESS EE, WE ARE INCLINED TO UPHOLD THE FINDING OF THE CIT (A) THAT RS.20 LAKHS CASH DEPOSITED IN THE 29 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 ASSESSEES ACCOUNT STANDS EXPLAINED AND CANNOT BE T ERMED AS UNDISCLOSED INCOME FROM UNKNOWN SOURCES. 9.1 THE AO HAS NOT ACCEPTED THE SOURCE OF RS.8 LAKH S WHICH THE ASSESSEE CLAIMED TO HAVE EARNED BY SALE OF PROPERTY WHICH HE HAD SHOWN IN HIS RETURN OF INCOME. THE AO HAS STATED THAT THE P ROPERTY BEARING NO.CB- 133, NARAINA WAS SOLD FOR A CONSIDERATION FORS.8 LA CS FOR WHICH, ACCORDING TO THE AO, THE ASSESSEE HAD ONLY PRODUCED COPY OF C ASH RECEIPT FOR THE SAID SUM RECEIVED FROM SHRI MANGTU RAM GUJJAR ALONG WITH HIS ADDRESS FOR SALE OF THE SAID PROPERTY COMPRISING OF TWO ROOMS WITH A TTACHED BATH AND ONE HALL. THE AO HAS MADE THE ADDITION ON THE SOLE GRO UND THAT THE SALE DEED COPY WAS NOT PRODUCED AND THE SUMMONS SENT TO SHRI MANGTU RAM GUJJAR (PURCHASER) HAD COME WITH POSTAL REMARK THAT THE R ECIPIENT IS NOT THERE AND ALSO ON THE GROUND THAT THE ASSESSEE HAD FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE OF HIS OWNERSHIP PRIOR TO THE ALLEGED SALE OF THE SAID PROPERTY FOR THE CASH RECEIPT OF RS.8 LAKHS. DURIN G THE APPELLATE PROCEEDINGS BEFORE THE CIT (A), THE ASSESSEE BROUGH T TO THE NOTICE OF THE LD. CIT (A) THAT THIS PROPERTY WAS PURCHASED BY THE ASSESSEE IN THE YEAR 1980 AT RS.48,000/- ( PAPER BOOK 63 69) AND THE S AME WAS REFLECTED IN THE INCOME-TAX RETURNS FOR THE LAST SEVERAL YEARS A T RS.7,86,000/- AFTER SUBSEQUENT IMPROVEMENTS MADE ON THE SAID PROPERTY D ATED 31.03.2004. TAKING NOTE OF THE SAID FACTS, THE LD. CIT (A) HAS FOUND THAT THE PROPERTY IN 30 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 QUESTION WAS BOUGHT BY THE TENANT OF THE ASSESSEE A ND THE SAID PROPERTY HAS NOW BEEN ACQUIRED BY THE DEFENCE. THE LD. CIT (A) RIGHTLY NOTED THAT TOTAL COST OF THE PROPERTY CANNOT BE TAXED AT THE HANDS O F THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR AND IN CASE, INVESTMENT IN THE PROPERTY IS UNEXPLAINED SHOULD BE TAXED IN THE YEAR OF PURCHASE WHICH IS NOT THE RELEVANT ASSESSMENT YEAR. THE LD. CIT (A) WONDERED AS TO HOW THE SALE CONSIDERATION IN CASH, CLAIMED TO HAVE BEEN DEPOSIT ED IN THE BANK HAS BEEN TAXED AS SUCH AS UNEXPLAINED CASH-DEPOSIT IN BANK A ND AGAIN AS SALE CONSIDERATION, WHICH AMOUNTS TO DOUBLE ADDITION AND HE FROWNED UPON THIS PRACTICE AND THUS ORDERED DELETION OF RS.8 LAKHS, W HICH, ACCORDING TO US, IS VALID BECAUSE ON ASSUMPTIONS AND PRESUMPTIONS THE A O HAS TAKEN THE VIEW THAT THE SALE CONSIDERATION OF THE SAID PROPERTY IS UNEXPLAINED INCOME OF THE ASSESSEE AND HAS MADE THE ADDITION. THE LD. DR COULD NOT CONTROVERT THE FACTUAL FINDINGS RECORDED BY THE LD. CIT (A). IN SUCH A SCENARIO, WE UPHOLD THE ORDER OF THE CIT (A) AND WE CONFIRM THE SAME. THE ADDITION OF RS.8 LAKHS DELETING THE ADDITION IS UPHELD. 9.2 THE AO HAS NOT ACCEPTED THE SOURCE OF RS.2,50,0 00/- WHICH THE ASSESSEE CLAIMED TO HAVE EARNED BY SALE OF ROOF RIG HTS IN RESPECT OF PROPERTY AT JAIL ROAD, NEW DELHI. THOUGH THE COPY OF THE AGREEMENT OF SALE WAS FURNISHED ALONG WITH THE PAN OF THE VENDEE , SHRI GANPAT SHARMA AND THE CASH RECEIPT OF RS.2,50,000/- WHICH WAS MA DE IN ADVANCE FOR SALE 31 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 OF THE ROOF RIGHTS OF G-176, HARI NAGAR WAS NOT ACC EPTED BY THE AO. THE ASSESSEE BROUGHT BEFORE THE NOTICE OF THE FIRST APP ELLATE AUTHORITY THAT THE ASSESSEE HAD RECEIVED RS.2,50,000/- IN ASSESSMENT Y EAR 2006-07 WHICH HAS BEEN ACCEPTED BY THE AO IN THE ASSESSMENT ORDER PAS SED U/S 143 (3) OF THE ACT. THE LD. CIT (A) TAKING NOTE OF THE FACT THAT WHEN THE AO HAS ACCEPTED THE SOURCE OF RS.2,50,000/- IN THE SUBSEQU ENT YEAR AS ADVANCE FOR THE ROOF RIGHTS OF THE PROPERTY AT JAIL ROAD, NEW D ELHI AND THERE WAS NO JUSTIFICATION IN NOT ACCEPTING THE SOURCE OF THIS R S.2,50,000/- FROM THE SALE OF THE ROOF RIGHTS OF THE AFORESAID PROPERTY WHICH HE HAD SOLD IN THE RELEVANT A.Y. TAKING THIS FACT INTO CONSIDERATION, THE LD. CIT (A) HAD DELETED THE SAID ADDITION. WE FIND THAT THE LD. DR COULD NOT CONTROVERT THIS FACTUAL ASPECT THAT HAS BEEN BROUGHT OUT IN THE IMP UGNED ORDER. IN SUCH A SCENARIO, WE HAVE NO OTHER OPTION BUT TO UPHOLD THE ORDER OF THE LD. CIT (A). THUS, WE CONFIRM THE DELETION OF ADDITION OF RS.2,50,000/-. 9.3 THE SOURCE OF INCOME FROM THE RENT HAS ALSO BEE N BROUGHT TO THE NOTICE OF THE LD. CIT (A) THAT RS.1,44,490/- HAS AL SO BEEN FOUND TO BE ACCEPTED. THEREFORE, BY DOING SO, THE LD. CIT (A) HAS ACCEPTED THE SOURCE OF INCOME OF RS.20 LACS ON ACCOUNT OF SALE OF DG SE T AND AIR-CONDITIONERS FOUND EXPLAINED, RS.2,50,000/- ON ACCOUNT OF SALE O F ROOF RIGHTS AND RENT OF RS.1,44,490/- ALSO FOUND EXPLAINED, AND SALE OF PRO PERTY OF RS.8 LACS, 32 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 THEREFORE THE ASSESSEES CASH OF RS.31,94,490/-STAN DS EXPLAINED BY THE ASSESSEE. 9.4 HOWEVER, WE FIND THAT THE LD. CIT (A) HAD, IN P ARA 6.6 OF HIS IMPUGNED ORDER, TAKEN NOTE OF THE STATEMENT OF AFFA IRS AS ON 31.03.2004 OF THE ASSESSEE, THE AOS REMAND REPORT, BANK WITHDRAW ALS AND OTHER EVIDENCES BROUGHT TO HIS NOTICE AND ACCEPTED THE IN COMING CASH AS NOT QUESTIONABLE IN RESPECT OF THE FOLLOWING :- (I) OPENING CASH IN HAND : RS.31,500/- (II) CASH RECEIVED FROM SMT. MANJUSHA W/O THE APPEL LANT: RS.4,87,500/- (III) CASH RECEIVED FROM SHRI S H H NAQVI : RS.50, 000/- (IV) BANK WITHDRAWALS FROM VARIOUS BANK ACCOUNTS : RS.38,43,500/- THE LD. CIT (A) WAS NOT SATISFIED WITH THE APPROPRI ATION OF THIS INCOMING CASH AS EXPLAINED IN THE CASH FLOW STATEMENT. HE P OINTED OUT THAT THE ASSESSEE HAS APPROPRIATED AN AMOUNT OF RS.1,94,765/ - AS TOTAL EXPENSES FOR THE MARRIAGE OF HIS DAUGHTER WHICH HAS NOT BEEN FOU ND TO BE PALATABLE TO HIM. THE LD. CIT (A) OBSERVED THAT THE HOUSE HOLD EXPENSES HAVE TO BE SUBDIVIDED INTO SUB-HEADS I.E. HOUSE TAX, WATER TAX , ELECTRICITY, TELEPHONE INCLUDING MOBILES, DOMESTIC HELP, FOOD INCLUDING MI LK, WASHING AND WASHER MAN, COMMON SOCIETY SECURITY GUARD AND SWEEP ER, CLOTHES, MEDICAL, CHARITY, CONVEYANCE, ENTERTAINMENT INCLUDI NG CABLE CHARGES, NEWS PAPERS AND MAGAZINES, MISCELLANEOUS NOT GROUPED ABO VE, ETC, ETC., FOR 33 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 PROPER ESTIMATION PER ANNUM IN THE CASE OF THE ASSE SSEE. LD. CIT (A), AFTER ANALYZING THE HOUSE HOLD EXPENSES IN ENTIRETY AND T HE CASH SAVINGS/CASH IN HAND WITH EACH INDIVIDUAL, NON UNIFORMITY OF WITHDR AWALS AND MARRIAGE EXPENSES/ENGAGEMENT, RING CEREMONY, JEWELLERY, CLOT H, FOODING, RECEPTION, PHOTOGRAPHY, VIDEOGRAPHY, MUSIC, MEHANDI RASM, VEHI CLE/CONVEYANCE, MARRIAGE VENUE PLACE EXPENSES, DECORATION AND LIGHT S, BARAT ACCOMMODATION, GIFTS, ETC, ETC, WAS OF THE VIEW THA T THE TOTAL EXPENDITURE ON THIS ACCOUNT CAN NOT BE LESS THAN RS.10 LAKHS IN ADDITION TO WITHDRAWALS FOR HOUSE HOLD AND MARRIAGE EXPENSES, WHICH HAD BEE N MET OUT OF THE ABOVE INCOMING CASH. THEREFORE, HE HELD THAT THE CA SH OF RS.10 LAKHS SHOWN TO HAVE BEEN DEPOSITED OUT OF ABOVE INCOMING CASH TO BE UNEXPLAINED. ACCORDINGLY, THE LD. CIT (A) MADE THE BANK DEPOSIT OF RS.10 LAKHS IN AGGREGATE OUT OF THE TOTAL ADDITION UNDER THE HEAD PEAK OF DEPOSITS IN DENA BANK, CASH DEPOSITS IN PNB AND HSBC BANK AC COUNTS AND THE ASSESSEE GOT A RELIEF OF RS. 26,77,000/- FROM THE I MPUGNED ORDER. 9.5 FROM THE AFORESAID ORDER OF THE LD. CIT (A) OF SUSTENANCE OF RS.10 LACS, WE FIND THAT HE HAS GIVEN A RELIEF OF RS.26,7 7,000/- OUT OF RS.36,77,000/- OF PEAK CREDIT ADDED FROM BANK ACCOU NTS OF DENA BANK, HSBC AND PNB. HOWEVER, WE FIND THAT THE LD. CIT (A ) HAS ACCEPTED THE CLAIM OF THE ASSESSEE THAT HE HAD RECEIVED RS.20 LA KHS FROM THE SALE OF DG SET AND AIR-CONDITIONERS, RS.8 LAKHS FROM SALE OF P ROPERTY AND RENT OF 34 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 RS.1,44,490/-, SALE OF ROOF RIGHTS OF RS.2,50,000/- , THUS AMOUNTING TO RS.31,94,490/-. THEREFORE, ONCE HE HAS ACCEPTED TH E CASH OF RS.31,94,490/- WHICH HAS COME INTO THE BANK ACCOUNT S OF THE ASSESSEE, THEN MAXIMUM SUSTENANCE THAT CAN BE MADE TO THE DIF FERENCE OF RS.36,77,000/- MINUS RS.31,94,490 I.E. RS.4,82,510/ -. THE TOTAL EXPENSES/ WITHDRAWALS OF MARCH AS PER THE CASH FLOW STATEMENT SUBMITTED BY THE ASSESSEE IS ONLY RS.1,94,765/- FOR MARRIAGE EXPENS ES OF HIS DAUGHTER, WHICH, ACCORDING TO US, IS ALSO ABYSMAL LOW FIGURE WHEN CONSIDERING THE ASSESSEES INCOME, STATUS AND BUSINESS WHICH HE UND ERTAKES. THEREFORE, THE AMOUNT OF RS.4,82,510/- WOULD BE A REASONABLE A MOUNT TO BE SUSTAINED. THUS, THE ASSESSEES GROUND NO.2 IS PARTLY ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE FOR TH E ASSESSMENT YEAR 2005- 06 IS DISMISSED AND THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 11. NOW, WE TAKE UP REVENUES APPEAL (ITA NO.3114/D EL/2010) AND CROSS OBJECTION OF THE ASSESSEE (CO NO.347/DEL/2010 ) FOR ASSESSMENT YEAR 2006-07. 12. THE GROUND OF THE REVENUES APPEAL IS AGAINST T HE DELETION OF ADDITION OF RS.72,50,000/- WITHOUT INVOKING THE PRO VISIONS OF RULE 46A OF THE INCOME-TAX RULES, 1962 (HEREINAFTER THE ACT) AND THE ASSESSEE IN THE CROSS APPEAL HAS CHALLENGED THE SUSTENANCE OF ADDIT ION OF RS.1 LAKH. 35 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 13. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE R ETURNED THE INCOME OF RS.3,04,172/-. THE MATTER WAS TAKEN UP IN SCRUTINY . THE AO FOUND THAT THE ASSESSEE DERIVED INCOME MAINLY FROM HOUSE PROPE RTY. DURING THE RELEVANT ASSESSMENT YEAR, THE AO FOUND THAT SOME CR EDITS/DEBITS IN HIS BANK ACCOUNTS AND THE AO WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND ADDED RS.1 LAKH ON CASH DEPOSITS I N THE BANK ACCOUNT AND RS.72,50,000/- CLAIMED TO HAVE BEEN RECEIVED AS AN ADVANCE FROM VIVEK TITUS AGAINST AGREEMENT TO SALE OF PROPERTY AS INCO ME FROM UNDISCLOSED SOURCES AND TOTAL INCOME OF THE ASSESSEE WAS COMPUT ED TO BE RS.76,54,170/- IN PLACE OF THE ASSESSEES RETURNED INCOME OF RS.3,04,172/-. AGGRIEVED BY THE SAID ORDER OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) WHO WAS PLEASED TO GIVE PART REL IEF TO THE ASSESSEE BY DELETING THE ADDITION TO THE TUNE OF RS.72,50,000/- . AGAINST THE SAME, THE REVENUE IS IN APPEAL BEFORE US. 14. THE LD. CIT (A) HAS SUSTAINED THE ADDITION OF R S.1 LAKH AS UNEXPLAINED CASH DEPOSIT AND AGAINST THE SAME, THE ASSESSEE IS IN CROSS APPEAL BEFORE US. 15. THE REVENUE IS AGGRIEVED BY THE ORDER OF THE LD . CIT (A) BECAUSE HE HAS ADMITTED CERTAIN DOCUMENTS FOR THE FIRST TIME B EFORE THE APPELLATE AUTHORITY AND THE LD. CIT (A) HAS NOT FOLLOWED THE RULES PRESCRIBED UNDER RULE 46A OF THE ACT I.E. HE DID NOT GIVE AN OPPORTU NITY TO THE AO TO MAKE 36 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 HIS OBSERVATIONS ON THE DOCUMENTS FILED BEFORE THE LD.CIT (A) WHICH ACTION ACCORDING TO REVENUE HAS VITIATED THE IMPUGNED ORDE R; AND THE LD. DR TOOK OUR ATTENTION TO PAGE NO.2 OF THE IMPUGNED ORDER OF THE CIT (A) WHEREIN THE CIT (A) HAS TAKEN NOTE THAT THE APPELLANT/ASSES SEE HAS SUBMITTED COPY OF THE FOLLOWING DOCUMENTS IN SUPPORT OF HIS CLAIM :- (I) COPY OF BALANCE SHEET AS ON 31.03.2006. (II) COPY OF SALE DEED IN RESPECT OF SALE OF ABOVE NOTED PROPERTY. (III) COPY OF PAN OF MR. VIVEK TITUS (IV) COPY OF CASH FLOW HSBC BANK ACCOUNT IN ASSESS EES BOOKS (V) COPY OF THE BANK STATEMENT REFLECTING THE AMOUN T DEPOSITED OF RS.1,00,000/- DATED 15 TH JUNE, 2005 (VI) COPY OF CASH FLOW STATEMENT FILED BEFORE THE A O TO DEMONSTRATE THAN RS.1 LAKH OF CASH WAS AVAILABLE WI TH THE ASSESSEE DURING THE YEAR. TAKING THESE EVIDENCES INTO CONSIDERATION, WE FIND THAT THE CIT(A) HAS BELIEVED THE CLAIM OF ASSESSEE THAT THE PROPERTY SI TUATED AT E-24, POORVI MARG, VASANT VIHAR, NEW DELHI WAS SOLD BY THE ASSES SEE TO SHRI VIVEK TITUS AND THE PROPERTY WAS FINALLY SOLD ON 12.06.20 06 I.E. ASSESSMENT YEAR 2007-08. THEREFORE, THE AMOUNT OF RS.72,50,000/- W HICH IS REMITTED IN THE ACCOUNT OF THE ASSESSEE AND CLAIMED BY THE ASSESSEE SHOULD HAVE BEEN THE ADVANCE FOR THE SAID PROPERTY, HAS BEEN ACCEPTED BY THE LD. CIT (A). THE LD. CIT (A) HAS COME TO THE CONCLUSION BASED ON THE EVIDENCES WHICH HAD BEEN FOR THE FIRST TIME PRODUCED BEFORE HIM AS STAT ED ABOVE. SO WE FIND FORCE IN THE SUBMISSION OF THE LD. DR THAT THESE DO CUMENTS SHOULD HAVE BEEN SENT TO THE AO FOR SEEKING THE REMAND REPORT A S PRESCRIBED UNDER 37 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 RULE 46A OF THE RULES. THE LD. AR DOES NOT HAVE AN Y OBJECTION IF WE SEND THE MATTER BACK TO THE FILE OF THE AO FOR VERIFICAT ION. IN THE LIGHT OF THE ABOVE, WE ARE INCLINED TO SET ASIDE THE ORDER OF TH E CIT (A) AND REMIT THE MATTER BACK TO THE AO FOR FRESH CONSIDERATION TAKIN G THE EVIDENCES WHICH HAD BEEN SUBMITTED BEFORE THE CIT (A) AFTER PROVIDI NG ASSESSEE AN OPPORTUNITY OF BEING HEARD. IT IS ORDERED ACCORDIN GLY. 16. AS REGARDS THE ADDITION OF RS.1 LAKH U/S 68 OF THE ACT, THE AO OBSERVED THAT THE ASSESSEE HAD DEPOSITED CASH OF RS .1 LAKH ON 15.06.2005 IN HIS SAVING BANK ACCOUNT MAINTAINED WITH HSBC. T HE LD. CIT (A) HAVE STATED IN THE IMPUGNED ORDER THAT HE HAS PERUSED TH E BANK ACCOUNT AND FOUND THAT THERE IS SUCH DEPOSIT IN THE BANK ACCOUN T AND HE HAS GONE THROUGH THE CASH BOOK SUBMITTED BY THE ASSESSEE DUR ING THE COURSE OF THE APPELLATE PROCEEDINGS. THE LD. CIT (A) TOOK NOTE O F THE FACT THAT THE ASSESSEE HAD CASH IN HAND AMOUNTING TO RS.1,83,338/ - ON 07.06.2005 (RS.1,98,338/- - RS.15,000/-). AFTER THE SAME, NEX T ENTRY IS DATED 18.06.2005 REGARDING CASH DEPOSIT OF RS.35,000/- IN HSBC. SO, THE LD. CIT (A) AGREED WITH THE AO THAT THE DEPOSIT OF CASH AMOUNTING TO RS.1 LAKH ON 15.06.2005 IS UNEXPLAINED AND HE CONFIRMED THE ADDITION U/S 69 OF THE ACT. WE FIND THAT FROM THE CASH FLOW STATEMENT FILED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW THAT ON 15.06.2005, CA SH IN HAND AS PER CASH BOOK WAS MORE THAN RS.1 LAKH BETWEEN 07.06.2005 AND 18.06.2005. IN 38 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 THAT CASE, IF THE ASSESSEE HAS NOT MADE ANY ENTRY I N HIS CASH BOOK DOES NOT MEAN THAT THE AMOUNT DEPOSITED IN THE BANK ACCOUNT CAN BE TERMED AS UNEXPLAINED INCOME OF THE ASSESSEE. SINCE THE MATT ER IS BEING SET ASIDE AND SENT BACK TO THE AO FOR FRESH ADJUDICATION FOR THE SOLE GROUND OF THE REVENUE, WE ARE OF THE OPINION THAT THIS MATTER ALS O BE REMITTED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION. THEREFORE, WE SET ASIDE THE ORDER OF THE CIT (A) AND REMAND THE MATTER BACK TO THE AO FO R DE NOVO ASSESSMENT. NEEDLESS TO SAY, AN OPPORTUNITY OF BEING HEARD SHOU LD BE PROVIDED TO THE ASSESSEE. 17. IN THE RESULT, THE APPEAL OF THE REVENUE AND TH E CROSS OBJECTION OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07 ARE ALLOWE D FOR STATISTICAL PURPOSES. 18. TO SUM UP : THE APPEAL OF THE REVENUE FOR THE ASSESSMENT YEAR 2005- 06 IS DISMISSED AND THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES; AND THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07 ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 14 TH DAY OF AUGUST, 2015. SD/- SD/- (J.S. REDDY) (A.T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 14 TH DAY OF AUGUST, 2015/TS 39 ITA NOS.3611-3114-3700/DEL./2010 CO NO.347/DEL/2010 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXX, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.