Smt. Babita Jain, Gwalior V. A.C.I.T., Circle-1, Gwalior

CO 40/AGR/2011

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8292 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-03-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-03-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 19-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V BA
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Business expenditure; Search and seizure; Notional interest
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 151/AGRA/2011 ASSTT. YEAR : 2008-09 A.C.I.T., CIRCLE 1, VS. SMT. BABITA JAIN, GWALIOR. JAINA JEWELLERS, SARAFA BAZAR, LASHKAR, GWALIOR. (PAN : AESPJ 2883 A) C.O. NO. 40/AGRA/2011 (ITA NO. 151/AGRA/2011) ASSTT. YEAR : 2008-09 SMT. BABITA JAIN, VS. A.C.I.T., CIRCLE 1, JAINA JEWELLERS, SARAFA BAZAR, GWALIOR. LASHKAR, GWALIOR. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI WASEEM ARSHAD, SR. D.R. ASSESSEE BY : SHRI V. BAPANA, C.A. DATE OF HEARING : 05.03.2013 DATE OF PRONOUNCEMENT OF ORDER : 08.03.2013 ORDER PER BHAVNESH SAINI, J.M.: THE DEPARTMENTAL APPEAL AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A), GWALIOR DATED 11.0 2.2011 FOR THE ASSESSMENT YEAR 2008-09. ITA NO. 151 & C.O. NO. 40/AGRA/2011 2 2. THE BRIEF FACTS OF THE CASE ARE THAT SURVEY U/S. 133A, WHICH HAS BEEN CONVERTED INTO SEARCH AND SEIZURE OPERATION U/S. 13 2A, HAS BEEN CARRIED OUT AT THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE A ND FAMILY MEMBERS ON 20.02.2008. THE ASSESSEE FILED RETURN OF INCOME IN RESPONSE TO NOTICE DECLARING INCOME OF RS.3,01,919/- FROM SALARY, HOUSE PROPERTY , BUSINESS & PROFESSION AND INTEREST. DURING THE COURSE OF SEARCH OPERATION, AS SESSEES HUSBAND SHRI MUKESH KUMAR JAIN HAS MADE A DISCLOSURE OF RS.1.10 CRORES ON ACCOUNT OF VARIATION IN STOCK ALONG WITH RS.4,45,175/- AND RS.1,00,000/- FO R UNRECORDED BUSINESS EXPENSES AND HOUSEHOLD EXPENSES RESPECTIVELY ALONG WITH HIS BROTHER SHRI SUNIL JAIN, WHO HAS ALSO MADE DISCLOSURE OF RS.58,79,843/- AS INCOM E FROM UNDISCLOSED SOURCES AND THE SAME HAS BEEN REFLECTED FROM THE RETURN FIL ED FOR THE ASSESSMENT YEAR 2009. THE AO FRAMED ASSESSMENT ORDER DATED 24.12.2009 MAK ING CERTAIN ADDITIONS AGAINST THE ASSESSEE WHICH WERE CHALLENGED BEFORE T HE LD. CIT(A) AND SUBSTANTIAL ADDITIONS HAVE BEEN DELETED BY THE LD. CIT(A). BOTH THE PARTIES ARE THEREFORE IN APPEAL AND THE CROSS OBJECTIONS ABOVE, WHICH WE DEA L THEM SEPARATELY GROUND-WISE AS UNDER : ITA NO. 151/AGRA/2011 (DEPARTMENTAL APPEAL): 3. ON GROUND NO. 1, THE REVENUE CHALLENGED THE DELE TION OF ADDITION OF RS.31,35,000/- ON ACCOUNT OF UNEXPLAINED INCOME. AS PER RETURN, THE ASSESSEE HAS DECLARED IMMOVABLE PROPERTY AT SARAFA BAZAR, ACQUIR ED DURING THE YEAR FOR ITA NO. 151 & C.O. NO. 40/AGRA/2011 3 RS.11,01,000/-. AFTER PAYMENT OF STAMP DUTY, THE SA ME HAS BEEN SHOWN AT RS.15,70,000/-. THE REGISTRAR HAS, HOWEVER, VALUED THE PROPERTY AT RS.47,02,000/-. ACCORDINGLY, THE DIFFERENCE OF RS.31,35,000/- HAS B EEN ADDED TO THE INCOME OF THE ASSESSEE AS UNDISCLOSED INCOME IN PURCHASE OF PROPE RTY. IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT THE ASSESSEE HAS PURCHASED THE PROPERTY AND DIFFERENCE ON ACCOUNT OF SALE VALUE DECLARED BY THE ASSESSEE AND STAMP VALUATION ADOPTED BY REGISTRATION AUTHORITY HAS BEEN ADDED WHICH IS NOT JUSTIFIED. THE PROPERTY BELONGS TO SMT. SARITA JAIN, WHO IS A FAMILY MEMBER AND RS. 11,01,000/- WAS NOT PAID BUT CREDITED TO HER ACCOUNT BY ASSESSEE AND THE PURCHAS E OF THE PROPERTY IS FULLY SUPPORTED BY THE SALE DEED. THEREFORE, THE ADDITION IS UNJUSTIFIED. THE LD. CIT(A) FOUND THAT THE ADDITION IS MADE BY THE AO MERELY ON PRESUMPTION THAT IN REAL ESTATE, OWN MONEY IS ALWAYS PAID BY THE PURCHASERS. THE DIFFERENCE IN VALUE OF PROPERTY AS PER SALE DEED AND ITS MARKET VALUE ON T HE BASIS OF STAMP DUTY WAS ADDED WHICH IS NOT SHOWN IN THE BOOKS OF ACCOUNT. T HE AO HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO PROVE THAT THE ASSESSEE PAID THE DIFFERENCE OF AMOUNT. NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH TO P ROVE THE FINDINGS OF THE AO. THEREFORE, THE ADDITION MADE ON ACCOUNT OF ALLEGED OWN MONEY PAID IS WITHOUT ANY EVIDENCE. THE LD. CIT(A) RELIED UPON THE DECISION O F DELHI HIGH COURT IN THE CASE OF RAJAT SUGAR CO. LTD. 130 ITR 421 ON THE PROPOSIT ION THAT SECTION 50C WOULD NOT APPLY IN THE HANDS OF THE PURCHASE. THEREFORE, THE ADDITION IS WHOLLY UNJUSTIFIED. ITA NO. 151 & C.O. NO. 40/AGRA/2011 4 THE LD. CIT(A) ALSO RELIED UPON THE ORDER OF ITAT A HMEDABAD BENCH IN THE CASE OF ITO VS. VENU PROTEINS INDUSTRIES (4 ITR (TRIB) 6 02 AND DECISION OF MUMBAI BENCH IN THE CASE OF INDRALOK HOTELS PVT. LTD. 318 ITR 234 (AT), IN WHICH IT WAS HELD THAT THE PROVISIONS OF SECTION 50C ARE NOT APP LICABLE IN THE CASE OF THE PURCHASER. THEREFORE, THE ADDITION CANNOT BE MADE O UT OF VALUATION FOR STAMP DUTY PURPOSE. THE ADDITION WAS ACCORDINGLY DELETED. 4. THE LD. DR RELIED UPON THE ORDER OF THE AO. ON T HE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. 5. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE AR E OF THE VIEW THAT THE LD. CIT(A) ON PROPER APPRECIATION OF FACTS AND LAW RIGH TLY DELETED THE ADDITION. THE LD. CIT(A) RIGHTLY RELIED UPON THE DECISIONS OF ITAT, A HMEDABAD BENCH AND MUMBAI BENCH IN THE CASE OF VENU PROTEINS INDUSTRIES (SUPR A) AND INDRALOK HOTELS PVT. LTD. (SUPRA) FOR THE PURPOSE OF DELETING THE ADDITION, I N WHICH IT WAS HELD THAT THE PROVISIONS OF SECTION 50C WOULD NOT APPLY IN THE CA SE OF PURCHASER OF THE PROPERTY. NO EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH O R OTHERWISE TO PROVE THAT THE ASSESSEE MADE PAYMENT ON ACCOUNT OF OWN MONEY ALL EGEDLY PAID BY THE ASSESSEE TO THE SELLER, RATHER WHATEVER CHEQUES WERE GIVEN T O THE SELLER WERE NOT EN-CASHED ITA NO. 151 & C.O. NO. 40/AGRA/2011 5 WHICH WE WOULD BE DEALING WHILE CONSIDERING THE CRO SS-OBJECTION OF THE ASSESSEE. THEREFORE, THE ADDITIONS WERE MADE BY THE AO ON THE PRESUMPTION WITHOUT BRINGING ANY EVIDENCE AGAINST THE ASSESSEE. THEREFO RE, MERELY BECAUSE STAMP VALUATION AUTHORITY HAS ADOPTED HIGHER VALUE, IS NO GROUND TO MAKE ADDITION AGAINST THE ASSESSEE. THIS GROUND OF APPEAL OF THE REVENUE IS ACCORDINGLY DISMISSED. 6. ON GROUND NO. 2, THE REVENUE CHALLENGED THE DELE TION OF ADDITION OF RS.27,000/- ON ACCOUNT OF BOGUS LIABILITIES. THE AS SESSEE HAS SHOWN SMALL INVESTMENT OF RS.3,50,000/- AS AGAINST RS.2,00,000/ - SHOWN IN THE PREVIOUS YEAR. THUS, AN AMOUNT OF RS.1,50,000/- IS INVESTED DURING THE YEAR, BUT NO CONFIRMATION OF INVESTMENT IS FURNISHED NOR THE DETAILS WERE VER IFIABLE. THE INTEREST EARNED ON THESE DEPOSITS OF RS.1,50,000/- AMOUNTED TO RS.27,0 00/- NOT SHOWN IN THE ACCOUNTS OF THE ASSESSEE WAS TREATED AS UNEXPLAINED INCOME O F ASSESSEE AND ADDITION WAS ACCORDINGLY MADE BY THE AO. IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT THE ASSESSEE DID NOT CHARGE ANY INTEREST ON PETTY DEPOS ITS. NO INTEREST HAS ARISEN OR EARNED, HENCE, IT WAS NOT DECLARED. NOTHING WAS FOU ND AGAINST THE ASSESSEE TO PROVE SEARCH, THEREFORE, THE ADDITION IS HIGHLY UNJUSTIFI ED. THE LD. CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE BECAUSE MERELY THE ASSES SEE INVESTED RS.1,50,000/- WOULD NOT LEAD TO THE CONCLUSION THAT THE ASSESSEE HAS INTEREST ON THESE DEPOSITS. THEREFORE, THE ADDITION WAS MADE BY THE AO MERELY O N NOTIONAL BASIS WITHOUT ITA NO. 151 & C.O. NO. 40/AGRA/2011 6 SUPPORTED BY ANY SEIZED MATERIAL. THUS, THERE WAS N O BASIS, WHATSOEVER, TO MAKE THE ADDITION AND ACCORDINGLY, ADDITION MADE ON ACCO UNT OF EARNING OF NOTIONAL INTEREST WAS DELETED. 7. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE AR E OF THE VIEW THAT THE ADDITION HAS BEEN RIGHTLY DELETED BY THE LD. CIT(A) .THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE ORDER OF ITAT, AGRA BENCH IN THE GR OUP CASES OF ACIT VS. MUKESH KUMAR JAIN AND SMT. BABITA JAIN IN ITA NO. 262 ETC. OF 2010 DATED 23.03.2012 IN WHICH IN PARA 11, SIMILAR ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. PARA 11 READS AS UNDER : 11. ANOTHER ADDITION OF RS.4,21,650/- IN CASE OF S HRI MUKESH KUMAR JAIN AND RS.1,01,700/- IN CASE OF SMT. BABITA JAIN WHICH WERE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTERES T EARNED ON HUNDIES MENTIONED IN LPS PAGE 26 & 28 LOOSE PAPER FOUND AT THE TIME OF SEARCH, THE ASSESSING OFFICER CALCULATED TH E AMOUNT OF INTEREST APPLYING 18% RATE OF INTEREST ON RS.23,42,500/- ON PRESUMPTION THAT THE ASSESSEE HAS INVESTED THE AMOUNT MENTIONED IN L OOSE PAPER LPS PAGE 26 AND CALCULATED THE INTEREST FOR ALL THE SIX YEARS OF WHICH CALCULATION COMES TO RS.4,21,650/-. THE CIT(A) DEL ETED THE SAID ADDITIONS ON THE GROUND THAT THE ASSESSING OFFICER DID NOT MAKE ANY ENQUIRY FROM ANY OF THE PERSONS MENTIONED IN THE DO CUMENTS TO SHOW THAT THE ASSESSEE HAS EARNED INTEREST FROM AMOUNTS ALLEGED TO HAVE BEEN LENT. THE CIT(A) RELIED UPON THE JUDGMENT OF DELHI HIGH COURT IN THE CASE OF CIT VS. JUPITER BUILDERS PVT. LTD, 2 87 ITR 287 WHEREIN IT HAS BEEN HELD THAT THE ASSESSMENT PROCEEDINGS UN DER CHAPTER XIV-B ARE TAKEN ONLY IN RESPECT OF UNDISCLOSED INCOME WHI CH IS UNEARTHED AS A RESULT OF SEARCH. THE CIT(A) HAS FOLLOWED THIS O RDER FOR ASSESSMENT YEAR 2002-03 AND SUBSEQUENT ASSESSMENT YEARS 2003-0 4 TO 2007-08. AFTER CONSIDERING THE FACTS OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) AS THE ASSESSING OFFICER MADE T HE ADDITION ON ITA NO. 151 & C.O. NO. 40/AGRA/2011 7 PRESUMPTION BASIS. APART FROM THE FACT THAT AS PER DETAILED DISCUSSION MADE IN PARAGRAPH NOS.8 TO 10 ABOVE, WE HOLD THAT T HE LOOSE PAPER FOUND I.E. LPS-26 IS NOT PERTAINING TO THE ASSESSME NT YEAR 2002-03. THERE IS NO MATERIAL ON RECORD BASED ON WHICH IT CA N BE SAID THAT THE ASSESSEE WAS EARNING INTEREST ON THAT AMOUNT IN SUB SEQUENT YEAR FROM ASSESSMENT YEARS 2002-03 TO 2007-08. THEREFORE, NO TIONAL INCOME CANNOT BE TAXED IN THE FORM OF INTEREST. IN THE LI GHT OF THE ABOVE DISCUSSION, WE CONFIRM THE ORDER OF CIT(A) ON THE I SSUE. HE HAS, THEREFORE, SUBMITTED THAT THE ISSUE IS COVE RED IN FAVOUR OF THE ASSESSEE. 8. ON CONSIDERATION OF THE SUBMISSIONS OF THE PARTI ES IN THE LIGHT OF THE EARLIER ORDER OF THE TRIBUNAL IN THE CASE OF THE SAME ASSES SEE AND HER HUSBAND, WE ARE OF THE VIEW, THE ADDITION HAS BEEN RIGHTLY DELETED BY THE LD. CIT(A). THE AO HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO PROVE THAT ANY IN TEREST ACCRUED OR AROSE OR RECEIVED BY THE ASSESSEE. THEREFORE, NOTIONAL INCOM E CANNOT BE ADDED FOR THE PURPOSE OF TAXATION. THIS GROUND OF APPEAL OF THE R EVENUE IS ACCORDINGLY DISMISSED. 9. ON GROUND NO.3, THE REVENUE CHALLENGED THE DELET ION OF ADDITION OF RS.12,61,440/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN GOLD. THE AO NOTED THAT DURING THE COURSE OF SEARCH, THE STATEMENT OF ASSES SEE WERE RECORDED AND THE ASSESSEE HAS STATED THAT SHE HAS GIVEN 800 GRAMS OF GOLD JEWELLERY TO HER HUSBAND SHRI MUKESH JAIN. SHE WAS DIRECTED TO EXPLAIN THE V ERSION WITH DOCUMENTARY ITA NO. 151 & C.O. NO. 40/AGRA/2011 8 EVIDENCE. THE ASSESSEE EXPLAINED THAT SHE HELD 1678 GRAMS OF GOLD OUT OF WHICH 1168 GRAMS OF GOLD IS DEPOSITED WITH JAINA JEWELLER S AND ABOUT 150 GMS. IN PNB LOCKER AT MORAR AND REMAINING 350 GMS. WAS IN REGUL AR USE. THE AO, HOWEVER, NOTED THAT NO DOCUMENTARY EVIDENCE WITH REGARD TO 1 168 GRAMS OF GOLD WAS FURNISHED AND EVEN THE ASSESSEE DID NOT FURNISH WEA LTH-TAX RETURN FOR THE ASSESSMENT YEAR 2007-08, FOR WHICH WEALTH TAX NOTIC ES WERE ISSUED. THEREFORE, ADDITION OF RS.12,61,440/- WAS ACCORDINGLY MADE. IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT THE JEWELLERY HAS BEEN DECLARED IN WEAL TH TAX RETURN FILED UPTO THE ASSESSMENT YEAR 2006-07. HOWEVER, FOR THE YEAR UNDE R CONSIDERATION, NO RETURN WAS FILED, AS THERE BEING NO TAXABLE WEALTH. THE ASSESS EE PROVED THE POSSESSION OF JEWELLERY GIVEN TO JAINA JEWELLERS, THEREFORE, THE ADDITION SHOULD NOT HAVE BEEN MADE. THE LD. CIT(A) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE MATERIAL ON RECORD FOUND THAT THE ASSESSEE HAS FILED HER REG ULAR WEALTH-TAX RETURNS FROM THE ASSESSMENT YEAR 2001-02 TO 2006-07 AND JEWELLERY HA VE BEEN DECLARED IN 1678.23 GRAMS. THE ASSESSEE HAS THEREFORE, EXPLAINED POSSES SION AND OWNERSHIP OF THE JEWELLERY AND MERELY BECAUSE NO RETURN FOR THE ASSE SSMENT YEAR 2007-08 HAS BEEN FILED IS NO GROUND TO MAKE THE ADDITION AGAINST THE ASSESSEE. THE LD. CIT(A), ACCORDINGLY, DELETED THE ADDITION. ITA NO. 151 & C.O. NO. 40/AGRA/2011 9 10. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE A RE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) IN DELETING THE AD DITION. THE LD. CIT(A) ON VERIFICATION OF THE WEALTH TAX RETURN FILED BY THE ASSESSEE FOR SEVERAL PRECEDING ASSESSMENT YEARS 2001-02 TO 2006-07, RIGHTLY HELD T HAT THE ASSESSEE SUITABLY EXPLAINED THE POSSESSION OF GOLD JEWELLERY UNDER CO NSIDERATION. COPIES OF WEALTH- TAX RETURNS FOR THESE YEARS ARE FILED IN THE PAPER BOOK AT PAGE 7 TO 19 WHICH SUPPORT THE CONTENTION OF THE ASSESSEE. THUS, THE LD. CIT(A ) ON PROPER APPRECIATION OF THE FACTS AND MATERIAL ON RECORD RIGHTLY DELETED THE AD DITION. THIS GROUND OF APPEAL OF THE REVENUE IS ACCORDINGLY DISMISSED. 11. ON GROUND NO. 4, THE REVENUE CHALLENGED THE DEL ETION OF ADDITION OF RS.48,730/- ON ACCOUNT OF UNEXPLAINED CASH. DURING THE COURSE OF SEARCH, CASH AMOUNTING TO RS.48,730/- WAS FOUND, SOURCE OF WHICH WAS NOT EXPLAINED. THEREFORE, THE ADDITION WAS MADE. IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT AVAILABILITY OF CASH IS REFLECTED IN THE RECORDS AN D AS PER CASH BOOK, CASH AS ON 16.02.2008 IS SHOWN AT RS.48,752/-. THEREFORE, THE ADDITION IS UNJUSTIFIED. THE LD. CIT(A) ACCEPTED THE EXPLANATION OF THE ASSESSEE AND DELETED THE ADDITION. 12. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE A RE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THE SOURCE OF CAS H FOUND AT THE TIME OF SEARCH IS ITA NO. 151 & C.O. NO. 40/AGRA/2011 10 EXPLAINED THROUGH CASH BOOK. NO ADVERSE MATERIAL IS PRODUCED BEFORE US TO CONTRADICT THE FINDINGS OF THE AUTHORITIES BELOW. T HIS GROUND IS, ACCORDINGLY, DISMISSED. 13. ON GROUND NO. 5, THE REVENUE CHALLENGED THE DEL ETION OF ADDITION OF RS.1,93,000/- ON ACCOUNT OF UNEXPLAINED HOUSEHOLD G OODS. THE LD. CIT(A) HAS NOTED SEVERAL HOUSEHOLD ITEMS, SOURCE OF WHICH WAS NOT EXPLAINED, FOR WHICH THE ADDITION WAS MADE BY THE AO IN A SUM OF RS.1,93,000 /-. THE LD. CIT(A) FOUND THAT AGGREGATE OF THE ADDITION SHOULD BE RS.1,83,500/- O NLY AND OUT OF THIS AMOUNT, THE LD. CIT(A) FOUND THAT COMPUTER FLAT SCREEN VALUED A T RS.30,000/- HAS BEEN SHOWN BY THE ASSESSEE IN HIS RETURN, WHICH HAS BEEN ACCEP TED BY THE AO. ADDITION TO THE EXTENT OF RS.39,500/- WAS DELETED. THE LD. DR ACCEP TED THAT THE GROUND OF APPEAL OF THE REVENUE, THEREFORE, SHOULD HAVE BEEN CONFINE D TO RS.39,500/- ONLY INSTEAD OF RS.1,93,000/-. 14. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE D O NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. WHATEVER ITEMS HAV E BEEN SHOWN BY THE ASSESSEE IN HER RETURNS AND ACCEPTED BY THE AO CANNOT BE TRE ATED AS UNEXPLAINED HOUSEHOLD GOODS. THE LD. CIT(A), THEREFORE, TO THAT EXTENT, R IGHTLY DELETED THE ADDITION. THIS ITA NO. 151 & C.O. NO. 40/AGRA/2011 11 GROUND IS THEREFORE, DISMISSED. IN THE RESULT, THE DEPARTMENTAL APPEAL FAILS AND IS DISMISSED. C.O. NO. 40/AGRA/2011 (BY ASSESSEE): 15. THE ASSESSEE HAS RAISED ONLY ONE GROUND IN THE CROSS-OBJECTION, CHALLENGING THE ADDITION OF RS.11,01,000/- AS BOGUS LIABILITY. WHILE MAKING SAID ADDITION, THE AO HAS MENTIONED THAT IN RESPECT OF PROPERTY PURCHA SED AT SARAFA BAZAR FROM SMT. SARITA JAIN, THE ASSESSEE HAS MADE PAYMENT ON 30.10 .2007 VIDE CHEQUES NO. 227585 DRAWN ON PNB, MORAR FOR RS.6,80,000/-. THE C HEQUE WAS CLEARED ON 02.11.2007 IN THE NAME OF VIKAS JAIN. ON 30.10.2007 , CHEQUES NO. 227586 DRAWN ON PNB, MORAR FOR RS.4,21,000/-. THIS CHEQUE IS NOT REFLECTED IN THE BANK ACCOUNT STATEMENT. THEREFORE, IT WAS PRESUMED THAT THE SAME WAS PAID IN CASH TO THE SELLER AND THE SAID CHEQUE WAS DESTROYED. THE AO IN VIEW O F THIS FOUND THAT THERE IS NO LIABILITY AS ON THE DATE OF BALANCE SHEET WHEREAS I N THE BALANCE SHEET AS ON 31.03.2008, THE ASSESSEE HAS SHOWN CURRENT LIABILIT Y OF RS.11,01,000/-. THEREFORE, THE SAME WAS TREATED AS UNEXPLAINED LIABILITY IN TH E NAME OF SARITA JAIN AND THE SAME WAS ADDED. IT WAS SUBMITTED BEFORE THE LD. CIT (A) THAT THE PROPERTY IN QUESTION AT SARAFA BAZAR, BELONG TO OTHER FAMILY ME MBER, SMT. SARITA JAIN, TO WHOM NO PAYMENT HAS BEEN MADE BUT THE PROPERTY WAS TRANSFERRED IN THE NAME OF ASSESSEE BY MAKING BOOK ENTRIES. THEREFORE, IT WAS NOT A BOGUS LIABILITY. THE LD. ITA NO. 151 & C.O. NO. 40/AGRA/2011 12 CIT(A) ON CONSIDERATION OF THE MATERIAL ON RECORD F OUND THAT THE ASSESSEE HAS DECLARED VALUE OF THE PROPERTY FOR RS.15,17,000/- A S ON 31.03.2008 WHICH INCLUDES THE PURCHASE VALUE OF PROPERTY AT RS.11,01,000/- AN D STAMP DUTY WITH REGISTRATION CHARGES ETC. AND THE SAME WAS SHOWN AS LIABILITY IN THE BALANCE SHEET IN THE NAME OF SARITA JAIN. THE LD. CIT(A) FOUND THAT COPY OF THE AGREEMENT DATED 30.10.2007 IS SIGNED BY THE PURCHASER AND THE SELLER IN THE PRESE NCE OF THE WITNESSES THROUGH WHICH THE SELLER, SMT. SARITA JAIN HAS RECEIVED AMO UNT OF RS.6,80,000/- VIDE CHEQUES NO. 227585 DATED 30.10.2007 AND RS.4,21,000 /- VIDE CHEQUES NO. 227586 DATED 30.10.2007 DRAWN ON PNB, MORAR. HOWEVER, AS P ER BANK BOOK OF PNB, IT WAS SEEN THAT THE ASSESSEE HAS SHOWN RECEIPT OF RS. 6,80,000/- FROM JAINA JEWELLERS TO WHOM THE SAME AMOUNT WAS PAID IN THE NAME OF VIK AS JAIN. THERE IS NO WITHDRAWAL OF RS.4,21,000/- ON ANY DATE WHICH WERE STATED TO BE PAID TO SMT. SARITA JAIN. FURTHER, THERE IS NO WITHDRAWAL THROUG H CHEQUES GIVEN AS SALE CONSIDERATION AND NO AMOUNT IS REFLECTED IN THE BAN K STATEMENT AS WELL AS CASH BOOK. THEREFORE, IT WAS FOUND THAT THE LIABILITY IS BOGUS FOR ALLEGED PURCHASE OF PROPERTY AND ACCORDINGLY, THE ADDITION WAS CONFIRME D AND THIS GROUND OF APPEAL OF THE ASSESSEE WAS DISMISSED. 16. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT THE PROPERTY W AS PURCHASED FROM SARITA JAIN ITA NO. 151 & C.O. NO. 40/AGRA/2011 13 SITUATED AT SARAFA BAZAR FOR A SUM OF RS.11,01,000/ -. TWO CHEQUES WERE GIVEN TO THE SELLER IN A SUM OF RS.6,80,000/- AND RS.4,21,00 0/-, BUT THESE CHEQUES WERE NOT CLEARED. THEREFORE SAME WAS SHOWN AS LIABILITY IN T HE BALANCE SHEET. FURTHER CHEQUE NO. 227586 ISSUED IN FAVOUR OF SMT. SARITA JAIN HAS BEEN CLEARED FROM THE BANK AS ON 06.02.2009. IN ADDITION TO THIS, INSTEAD OF CHEQ UES NO. 227586 OF RS.6,80,000/-, A CHEQUES NO.758267 FOR RS.2,60,000/- HAS BEEN PAID ON 30.01.2010 TO SMT. SARITA JAIN. THEREFORE A SUM OF RS.4,20,000/- REMAINED STI LL PAYABLE, WHICH IS SHOWN IN THE BALANCE SHEET AS ON 30.03.2010. COPY OF BANK AC COUNT IN RESPECT OF THE CLEARANCE OF THE ABOVE AMOUNT IS FILED IN THE PAPER BOOK ALONG WITH THE BALANCE SHEET AS ON 31.03.2010. THE LD. COUNSEL FOR THE ASS ESSEE SUBMITTED THAT THE ISSUE IS SAME AS IS CONSIDERED IN GROUND NO. 1 IN THE DEPART MENTAL APPEAL. SINCE THE CHEQUES ISSUED FOR SALE CONSIDERATION REMAINED UNPA ID, WHICH WERE PARTLY PAID LATER ON WHICH CLEARLY PROVE THAT THE ADDITION IS W HOLLY UNWARRANTED AND UNJUSTIFIED. THE LD. DR RELIED UPON THE ORDERS OF T HE AUTHORITIES BELOW AND SUBMITTED THAT NO CONFIRMATION FROM THE SELLER HAS BEEN FILED. SINCE IN THE SALE DEED, PAYMENT IS STATED TO BE MADE BUT NOT PROVED. THEREFORE, THE ADDITION WAS CORRECTLY MADE BY THE AUTHORITIES BELOW. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND TH E MATERIAL AVAILABLE ON RECORD AND FIND THAT THIS ISSUE IS SAME AS HAS BEEN CONSIDERED IN GROUND NO. 1 IN ITA NO. 151 & C.O. NO. 40/AGRA/2011 14 THE DEPARTMENTAL APPEAL. THE ASSESSEE PURCHASED PRO PERTY AT SARAFA BAZAR, FROM SMT. SARITA JAIN, WHO IS STATED TO BE THE FAMILY ME MBER FOR A SUM OF RS.11,01,000/-. THE SALE CONSIDERATIONS WERE PAID T HROUGH TWO CHEQUES OF RS.6,80,000/- AND RS.4,21,000/-. ACCORDING TO THE A SSESSEE BOTH THESE CHEQUES WERE NOT CLEARED. THEREFORE, THE SAME WERE SHOWN AS CURRENT LIABILITY IN THE BALANCE SHEET ENDING ON 31.03.2008. SINCE THE AO DI D NOT DISPUTE THE PURCHASE OF PROPERTY BY THE ASSESSEE AND THAT THE CHEQUES ISSUE D FOR SALE CONSIDERATION WERE NOT CLEARED, THEREFORE, SAME WAS CORRECTLY SHOWN AS LIA BILITY IN THE BALANCE SHEET OF THE ASSESSEE. SINCE THE PURCHASE OF PROPERTY WAS NOT DO UBTED BY THE AO AND NO PAYMENT IS CLEARED THROUGH BANK ACCOUNT OF THE ASSE SSEE OR THE CASH BOOK OF ASSESSEE, THEREFORE, THE SAME COULD NOT BE TREATED AS UNEXPLAINED LIABILITY FOR THE PURPOSE OF MAKING ADDITION AGAINST THE ASSESSEE. ON GROUND NO. 1 OF THE DEPARTMENTAL APPEAL, THE REVENUE HAS TAKEN DIFFEREN CE OF THE SALE CONSIDERATION AS COMPARED TO THE VALUE TAKEN BY THE STAMP VALUATION AUTHORITY AND MADE ADDITION OF RS.31,35,000/-, WOULD CLEARLY PROVE THAT THE AO HAS ACCEPTED THE PURCHASE OF PROPERTY BY THE ASSESSEE. THEREFORE, WHEN NO AMOUNT IS PAID TOWARDS THE SALE CONSIDERATION DURING THE ASSESSMENT YEAR UNDER APPE AL, THE SAME WAS CORRECTLY SHOWN AS LIABILITY IN THE BALANCE SHEET AND AS SUCH COULD NOT BE CONSIDERED AS UNEXPLAINED LIABILITY OR BOGUS LIABILITY IN THE NAM E OF SMT. SARITA JAIN. THE ASSESSEE HAS PRODUCED SUFFICIENT EVIDENCE BEFORE US , I.E., BANK ACCOUNT, AND ITA NO. 151 & C.O. NO. 40/AGRA/2011 15 BALANCE SHEET ENDING ON 31.03.2010 OF THE ASSESSEE TO PROVE THAT PART OF THE SALE CONSIDERATION WAS CLEARED IN SUBSEQUENT YEAR AND PA RT WAS STILL PAYABLE TO SMT. SARITA JAIN. THEREFORE, THE TRANSACTION IN QUESTION HAS BEEN PROPERTY EXPLAINED WITH CURRENT LIABILITY OF SMT. SARITA JAIN. WE, THEREFOR E, DO NOT FIND ANY JUSTIFICATION TO SUSTAIN THIS ADDITION. WE ACCORDINGLY, SET ASIDE TH E ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION OF RS.11,01,000/-. THIS GRO UND OF CROSS OBJECTION IS ACCORDINGLY ALLOWED. IN THE RESULT, THE CROSS OBJEC TION OF THE ASSESSEE IS ALLOWED. 18. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMI SSED AND THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY