Shri B.B. Sharma, Dehradun V. ACIT, Meerut

CO 64/DEL/2011

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 5924 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 10-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B B SHARMA
• Assessee Lawyers: SANJAY PURI
• Keywords: Unexplained cash credit; Unexplained investment; Capital asset; Business income; Loose papers; Source of fund; Additional evidence; Bogus loan; Revenue expenditure; Capital expenditure
• Section: 69C; 143(3); 142(1); 133A; 153A; 68; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A NEW DELHI) BEFORE G.E. VEERABHADRAPPA, HON'BLE VICE-PRESIDENT AND SHRI RAJPAL YADAV: HONBLE JUDICIAL MEMBER ITA NOS. 822 TO 828/DEL/2011 ASSESSMENT YEARS: 2002-03 TO 2008-09 ASSISTANT CIT, VS. B.B. SHARMA, CENTRAL CIRCLE, 66-PITAM ROAD, MEERUT. DALANWALA, DEHRADUN. (PAN: ABSPS9903R) (APPELLANT) (RESPONDENT) CROSS OBJ. NOS.62 TO 68/DEL/2011 ITA NOS. 822 TO 828/DEL/2011 ASSESSMENT YEARS: 2002-03 TO 2008-09 B.B. SHARMA, VS. ASSISTANT CIT, 66-PITAM ROAD, CENTRAL CIRCLE, DALANWALA, NEW DELHI. DEHRADUN. (CROSS-OBJECTOR) (RESPONDENT) APPELLANT BY: SHRI SANJAY PURI, CIT(DR) RESPONDENT BY: SHRI B.B. SHARMA, ASSESSEE ORDER PER BENCH: PER BENCH: PER BENCH: PER BENCH: THE PRESENT SEVEN APPEALS ARE DIRECTED AT THE INST ANCE OF REVENUE AGAINST SEPARATE ORDERS OF EVEN DATE I.E. 23.11.201 0 PASSED BY THE LEARNED CIT(APPEALS) ON THE APPEALS OF THE ASSESSEE FOR ASS ESSMENT YEAR 2002-03 UP TO 2008-09. ON RECEIPT OF NOTICES IN THE REVENUES APPEALS, ASSESSEE HAS FILED 2 CROSS-OBJECTIONS BEARING NOS. 62/DEL/11 TO 68/DEL/1 1 IN ASSESSMENT YEARS 2002-03 TO 2008-09. IN RESPONSE TO THE NOTICE OF HE ARING, ASSESSEE APPEARED IN PERSON. ITA NO.822/DEL/2011: 2. THE GROUNDS OF APPEALS TAKEN BY THE REVENUE ARE NOT IN CONSONANCE WITH RULE 8 OF THE ITAT'S RULES, THEY ARE DESCRIPTI VE AND ARGUMENTATIVE IN NATURE. IN BRIEF, THE GRIEVANCE OF THE REVENUE IS T HAT LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITIONS OF RS.17,15,000 AND RS.5,50,000 WHICH REPRESENT UNSECURED LOANS AND ADVANCES. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL. HE IS DIRECTOR OF M/S. PRATEEK RESORT & BUILDERS (P) LTD. HE WAS ALSO RUNNING A PROPRIETORSHIP CONCERN IN THE NAME AND STYLE OF M/S . SHARMA ASSOCIATES. IN THESE ASSESSMENT YEARS, HE DERIVES INCOME FROM HOUS E PROPERTY AND BUSINESS INCOME FROM THE BUSINESS OF REAL ESTATES. A SEARCH UNDER SECTION 132 OF THE INCOME-TAX ACT, 1961WAS CARRIED OUT AT HIS RESIDENT IAL PREMISES COMPRISED AT 66-PRITAM ROAD, DEHRADUN ON 15.2.2008. A SURVEY UND ER SECTION 133A WAS CARRIED OUT SIMULTANEOUSLY AT HIS OFFICE PREMISES S ITUATED AT 78-RAJPUR ROAD, DEHRADUN. DURING THE COURSE OF SEARCH, A CASH OF RS .1,60,510 WAS FOUND AT THE RESIDENCE OUT OF WHICH A SUM OF RS.1,00,000 WAS SEIZED. JEWELLERY 3 HAVING VALUE OF RS.6,59,900 FOUND AT THE RESIDENCE BUT NOTHING WAS SEIZED. A NOTICE UNDER SEC. 153A OF THE ACT WAS ISSUED UPON THE ASSESSEE ON 17.8.2009. THE ASSESSEE HAS FILED HIS RETURN OF INC OME ON 5.10.2009 DECLARING TOTAL INCOME AT RS.3,02,055. ASSESSING OF FICER HAS PASSED THE ASSESSMENT ORDER ON 29.12.2009. HE ASSESSED THE INC OME OF THE ASSESSEE AT RS.25,67,255. ASSESSING OFFICER HAS MADE THE FOLLOW ING ADDITIONS: ADDITION UNDER SEC. 68 ON ACCOUNT OF UNEXPLAINED LO ANS RS.17,15,000 ADDITION UNDER SEC.68 ON A/C OF UNEXPLAINED ADVANCE RS. 5,50,000 TOTAL RS.22,65,000 4. ON SCRUTINY OF THE ACCOUNTS, ASSESSING OFFICER F OUND THAT OUT OF THE TOTAL UNSECURED LOANS AMOUNTING TO RS.17,15,000, AS SESSEE HAS GIVEN ONLY CONFIRMATION WITH RESPECT TO FIVE PARTIES INVOLVING RS.12,25,000. FOR REST OF THE AMOUNT, ASSESSEE FAILED TO GIVE THE CONFIRMATIO N. ASSESSING OFFICER HAS NOTICED THE DETAILS OF PARTIES, LOAN AMOUNT AND THE DETAILS OF EVIDENCE ON PAGE NO.3 OF THE ASSESSMENT ORDER WHICH HAS BEEN RE PRODUCED BY THE LEARNED CIT(APPEALS) ALSO ON PAGE 4, WHICH READS A S UNDER: THE DETAILS OF PARTIES FROM WHOM UNSECURED LOANS H AVE BEEN CLAIMED BY THE ASSESSEE TO HAVE BEEN RECEIVED DURING THE YE AR, WHERE ONLY CONFIRMATION HAVE BEEN FILED AND NO OTHER SUPPORTIN G DOCUMENTARY 4 EVIDENCES LIKE BANK STATEMENTS HAVE BEEN FILED TO P ROVE THE CREDITWORTHINESS OF THE CLAIMED LOAN CREDITORS ARE AS UNDER: 5 S.NO . NAME AMOUNT OF LOAN CLAIMED TO HAVE BEEN TAKEN DURING THE YEAR. DETAILS OF EVIDENCES/DOCUMENTS NOT FILED. 1. SH. S.K. SUDAN 1,70,000 BANK STATEMENT AND COPY OF RETURN NOT FILED. 2. SHRI VIJAY 2,00,000 BANK STATEMENT NOT FILED 3. SH. SUSHIL GANDHI 2,7 5,000 BANK STATEMENT AND COPY OF RETURN NOT FILED 4. SH. VEENU GUPTA 3,50,000 BANK STATEMENT AND COPY OF RETURN NOT FILED 5. SH. K.K. SUDAN 2,30,000 BANK STATEMENT AND COPY OF RETURN NOT FILED. TOTAL 12,25,500 FURTHER, THE DETAILS OF PARTIES FROM WHOM UNSECURED LOANS HAVE BEEN CLAIMED BY THE ASSESSEE TO HAVE BEEN RECEIVED DURING THE YE AR BUT WHERE EVEN THE CONFIRMATIONS HAVE NOT BEEN FILED ARE AS UNDER: S.NO. NAME AMT. OF LOAN CLAIMED TO HAVE BEEN TAKEN DURING THE YEAR DETAILS OF EVIDENCES/DOCUMENTS NOT FILED. 1. SH. RAMESH GOEL 40,000 CONFIRMATION, BANK STATEMENT AND COPY OF RETURN NOT FILED 2. SH. VISHAL AGGARWAL 1,00,000 CONFIRMATION, BANK STATEMENT NOT FILED. 3. SH. ANSHUL JERATH 1,50,000 CONFIRMATION, BANK STATEMENT AND COPY OF RETURN NOT FILED. 4. SH. D.K. AGGARWAL 2,00,000 CONFIRMATION, BANK STATEMENT AND COPY 6 OF RETURN NOT FILED. TOTAL 4,90,000 5. DURING THE COURSE OF APPELLATE PROCEEDINGS, LEAR NED FIRST APPELLATE AUTHORITY HAS CALLED FOR A REMAND REPORT. IN THE REM AND REPORT, ASSESSING OFFICER HAS ADMITTED THAT AS FAR AS LOAN AMOUNTS ME NTIONED AGAINST THE NAMES OF SHRI SK SUDAN, VIJAY & RAMESH GOEL ARE CON CERNED, ASSESSEE HAS SUBMITTED BANK STATEMENTS, COPIES OF INCOME-TAX RET URNS CONFIRMATIONS ETC. HE ALSO OBSERVED THAT THESE LOANS ARE BROUGHT FORWA RD FROM THE EARLIER YEARS AS ON 31.3.2001. LEARNED CIT(APPEALS) HAS REPRODUCED TH E COMMENTS OF THE ASSESSING OFFICER IN THE REMAND REPORT, IN THIS CON NECTION, AT PAGE NO.8 OF THE IMPUGNED ORDER. THEREAFTER, LEARNED CIT(APPEALS) H AS OBSERVED THAT THESE LOANS WERE TAKEN IN EARLIER YEARS. THEY ARE B ROUGHT FORWARD, HENCE THEY CANNOT BE ADMITTED TO THE INCOME OF THE ASSESS EE FOR CURRENT YEAR. SIMILARLY, LEARNED FIRST APPELLATE AUTHORITY HAS RE PRODUCED THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER IN RESPEC T OF OTHER LOANS WHEREIN ASSESSING OFFICER WAS SATISFIED WITH REGARD TO THE QUALITY OF EVIDENCE 7 SUBMITTED BY THE ASSESSEE IN ORDER TO DISCHARGING T HE ONUS. LEARNED DR SUBMITTED BEFORE US THAT LEARNED CIT(APPEALS) OUGHT TO HAVE NOT RELIED UPON THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICE R RATHER HE SHOULD HAVE INDEPENDENTLY EXAMINED THE EVIDENCE SUBMITTED BY TH E ASSESSEE AND THEREAFTER DECIDED THE FATE OF SUCH LOANS AND ADVAN CES. IN OTHER WORDS, ACCORDING THE LEARNED DR, LEARNED FIRST APPELLATE A UTHORITY OUGHT TO HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES IN RESPECT O F THE LOANS WITHOUT GETTING INFLUENCED BY THE OBSERVATIONS OF THE ASSESSING OFF ICER IN THE REMAND REPORT, WHEREBY HE WAS SATISFIED ABOUT THEIR GENUINENESS AN D CREDITWORTHINESS OF THE CREDITORS ETC. HE RELIED UPON THE ARGUMENTS RAISED IN THE GROUNDS OF APPEAL AS WELL AS ON THE ASSESSMENT ORDER. ON THE OTHER HA ND, ASSESSEE HAS POINTED OUT THAT IN THE ASSESSMENT PROCEEDINGS SUFFICIENT O PPORTUNITY WAS NOT GRANTED TO THE ASSESSEE BY THE ASSESSING OFFICER. THE RETURN WAS SUBMITTED ON 5 TH OCTOBER 2009 AND ASSESSMENT WAS PASSED ON 29.12.200 9 I.E. WITHIN TWO AND HALF MONTHS. THE SEARCH WAS CONDUCTED IN FEBRUA RY 2008. THE DEPARTMENT DID NOT INITIATE THE PROCEEDINGS AT AN E ARLY STAGE RATHER STARTED THE INVESTIGATION AT THE FAG END AND THEN MADE THE ADDITION OF THE AMOUNTS WHICHEVER CAME TO THE NOTICE OF THE ASSESSING OFFIC ER WITHOUT VERIFYING THEIR GENUINENESS AND WITHOUT GIVING AN OPPORTUNITY TO TH E ASSESSEE. DURING THE 8 APPELLATE PROCEEDINGS WHEN LEARNED FIRST APPELLATE AUTHORITY CALLED FOR A REMAND REPORT AND ASSESSEE SUBMITTED THE DETAILS. A SSESSING OFFICER WAS SATISFIED WITH THE QUALITY OF EVIDENCE. 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE REMAND REPORT REPRODUCED BY THE LEARNED CIT(APPEALS) IN HIS ORDER. ASSESSING OFFICER IS THE PROSECUTING AS WELL AS THE ADJUDICATING AUTHORITY. HE IS SATISFIED THAT NO ADDITION DESERVES TO BE MADE W ITH RESPECT TO THE ALLEGED LOANS AS WELL AS ADVANCES. TO OUR MIND, THERE SHOUL D NOT BE ANY GRIEVANCE TO THE REVENUE AFTER SUCH A STAND OF THE ASSESSING OFF ICER. THE REVENUE HAS NOT BROUGHT ANY MATERIAL ON THE RECORD WHICH CAN SUGGES T THAT ASSESSING OFFICER HAS COMMITTED FACTUAL ERROR IN THE REMAND REPORT OR THERE WAS NO SUCH EVIDENCE POSSESSED BY THE ASSESSEE TO EXPLAIN THE A DVANCES/LOANS. WE FIND THAT SOME OF THE ADVANCES ARE JUST BROUGHT FORWARD FROM THE EARLIER YEARS, AS OBSERVED BY THE LEARNED CIT(APPEALS). CONTRARY TO THI S FACTUAL FINDING, NOTHING HAS BEEN BROUGHT TO OUR NOTICE BY THE REVEN UE. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY MERIT IN THIS APPEAL . IT IS REJECTED. 9 C.O. NO.62/DEL/2011: 7. THE ASSESSEE AT THE TIME OF HEARING, DID NOT PRES S THE CRO, HENCE IT IS ALSO REJECTED. ITA NO. 823/D/2011: A.Y. 2003-04 8. IN THIS APPEAL ALSO, THE GROUNDS TAKEN BY THE RE VENUE ARE NOT IN CONSONANCE WITH RULE 8 OF ITAT RULES. THEY ARE DESC RIPTIVE AND ARGUMENTATIVE IN NATURE. IN BRIEF, THE FIRST GRIEVA NCE RELATES TO DELETION OF ` 15,60,000/- WHICH WAS ADDED BY THE AO ON ACCOUNT OF UN EXPLAINED UNSECURED LOANS AVAILABLE IN THE BOOKS OF THE ASSESSEE. THE NEXT GRIEVANCE RELATES TO DELETION OF INTEREST AMOUNTING TO ` 34,500/- WHICH PAID ON THE ALLEGED BOGUS LOAN. THIS AMOUNT WAS DISALLOWED BY THE AO ON THE GROUND THAT LOANS ARE H ELD AS BOGUS, THEREFORE, THERE CANNOT BE ANY INTEREST EXPENDITURE . THE NEXT GRIEVANCE RELATES TO DELETION OF ` 1,79,000/- WHICH WAS ADDED BY THE AO ON THE GROUND THAT ASSESSEE FAILED TO DISCLOSE F ULL SALE CONSIDERATION IN RESPECT OF DEHRADUN LAND. 9. THE BRIEF FACTS, AS DISCUSSED IN ASSTT. YEAR 200 2-03, ARE SIMILAR 10 IN THIS ASSTT. YEAR ALSO. RETURN WAS FILED ON 5.10. 2009 IN RESPONSE TO THE NOTICE RECEIVED U/S 153A. ASSESSEE DECLARED AN INCOME OF ` 3,33,374/-. THE ASSTT. WAS COMPLETED BY THE AO ON 2 9.12.2009 AS WAS DONE IN ASSTT. YEAR 2002-03. HE DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS. 21,16,874/-. THE AO HAS MADE FO LLOWING ADDITIONS :- I. ADDITION UNDER SECTION 68 ON ACCOUNT OF UNEXPLAI NED LOANS. RS.15,60,000 II. ADDITION OF UNDISCLOSED PORTION OF SALE CONSIDE RATION RS. 1,89,000 III. ADDITION ON A/C OF DISALLOWANCE OF INTEREST RS. 34,500 TOTAL RS.17,83,500 9.1 DURING THE ASSTT. PROCEEDINGS, LD. AO HAS NOTIC ED DETAILS OF UNSECURED LOANS AS UNDER:- THE DETAILS OF PARTIES FROM WHOM UNSECURED LOANS H AVE BEEN CLAIMED BY THE ASSESSEE TO HAVE BEEN RECEIVED DURING THE YE AR, WHERE ONLY CONFIRMATIONS HAVE BEEN FILED AND NO OTHER SUPPORTI NG DOCUMENTARY 11 EVIDENCES LIKE BANK STATEMENTS HAVE BEEN FILED TO P ROVE THE CREDITWORTHINESS OF THE CLAIMED LOAN CREDITORS ARE AS UNDER:- S. NO. NAME AMOUNT OF LOAN CLAIMED TO HAVE BEEN TAKEN DURING THE YEAR DETAILS OF EVIDENCES / DOCUMENTS NOT FILED 1. RICHA AGGARWAL 2,50,000/- BANK STATEMENT AND C OPY OF RETURN NOT FILED 2. SH. SIDDHARTHA BAREJA 3,75,000/- BANK STATEMEN T AND COPY OF RETURN NOT FILED. IN THE CONFIRMATION, THE CLAIMED CREDITOR HAS SHOWN AMOUNT OF RS. 2.50 LACS ONLY TO HAVE BEEN GIVEN TO THE ASSESSEE 3. SHRI S.K. SUDAN 60,000/- BANK STATEMENT NOT FILED 4. SUSHMA BAREJA 1,25,000/- BANK STATEMENT AND CO PY OF RETURN NOT FILED 5. SHRI VISHAL AGGARWAL 2,50,000/- BANK STATEMENT AND COPY OF RETURN NOT FILED TOTAL 10,60,000/- FURTHER, THE DETAILS OF PARTIES FROM WHOM UNSECURED LOANS HAVE BEEN CLAIMED BY THE ASSESSEE TO HAVE BEEN RECEIVED DURIN G THE YEAR BUT WHERE EVEN THE CONFIRMATIONS HAVE NOT BEEN FILED ARE AS U NDER :- S.NO. NAME AMOUNT OF LOAN CLAIMED TO HAVE BEEN TAKEN DURING THE YEAR DETAILS OF EVIDENCES / DOCUMENTS NOT FILED 1. SH. M.C. SEHGAL 3,50,000/- CONFIRMATION, BANK STATEMENT AND COPY OF RETURN NOT FILED 2. SHRI S. K. KANDHARI 1,50,000/- CONFIRMATION, BAN K 12 STATEMENT NOT FILED TOTAL 5,00,000/- THE SUBMISSION MADE BY THE ASSESSEE HAS BEEN CONSID ERED CAREFULLY BUT WERE FOUND UNCONVINCING AS ASSESSEE HAS FAILED TO F URNISH NECESSARY DOCUMENTS INCLUDING BANK STATEMENTS OF THE ABOVE ME NTIONED CLAIMED LOAN CREDITORS. 10. BEFORE LD. CIT(A), IT WAS CONTENDED BY THE ASSE SSEE THAT AO DID NOT GRANT SUFFICIENT OPPORTUNITY FOR EXPLAINING THESE LOANS AND FOR COLLECTING THE RELEVANT DOCUMENTARY EVIDENCE I.E. B ANK STATEMENT, PERMANENT ACCOUNT NUMBER, CONFIRMATION ETC. LD. CIT (A) ALLOWED THE ASSESSEE TO PLACE ON RECORD ALL THESE EVIDENCES AND CALLED FOR REMAND REPORT. IN THE REMAND PROCEEDING, AO HAS ACC EPTED THE GENUINENESS OF THE CLAIM. LD. CIT(A) HAS REPRODUCED THE REMAND REPORT IN RESPECT OF EACH CREDIT AT PAGE 8,9,10,11, 12,13 OF THE IMPUGNED ORDER. AFTER GOING THROUGH THE REMAND REPO RT AND THE RELEVANT EVIDENCE, LD. FIRST APPELLATE AUTHORITY HA S DELETED THE ADDITION. 11. WITH THE ASSISTANCE OF LD. REPRESENTATIVE, WE HAVE GONE THROUGH THE RECORD CAREFULLY. THERE IS NO DISPARITY OF FACTS IN THE PRESENT ASSTT. YEAR VIZ A VIZ ASSTT. YEAR 2002-03. LD. DR RELIED UPON THE ASSTT. ORDER AS WELL AS THE GROUNDS RAISED BY T HE REVENUE. 13 ACCORDING TO HIM, LD. CIT(A) OUGHT TO HAVE NOT PUT RELIANCE ON THE REMAND REPORT RATHER EXAMINE THE FACTS AND CIRCUMST ANCES OF EACH CASH CREDIT. IN OUR OPINION, LD. FIRST APPELLATE AU THORITY HAS GONE THROUGH THE EVIDENCE AS WELL AS THE REMAND REPORT. CONSIDERING OUR FINDING IN ASSTT. YEAR 2002-03, WE DO NOT FIND ANY MERIT IN GROUND NO. 1 RAISED BY THE REVENUE. THE DELETION OF ` 15,60,000/- IS UPHELD. 12. IN GROUND NO. 6, THE REVENUE HAS CHALLENGED DEL ETION OF ` 34,500/-. THIS AMOUNT WAS CLAIMED BY THE ASSESSEE A S INTEREST EXPENSES INCURRED ON THE ABOVE LOANS. SINCE WE HAVE UPHELD THE GENUINENESS OF THE LOANS TAKEN BY THE ASSESSEE, CON SEQUENTLY INTEREST EXPENSES ON SUCH LOANS DESERVES TO BE ALLO WED. LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY DELETED THE INTERES T EXPENSES. THIS GROUND OF APPEAL IS ALSO REJECTED. 13. IN THE NEXT GRIEVANCE, REVENUE HAS PLEADED THAT LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 1,79,000/-. THE BRIEF FACTS ARE THAT ASSESSEE HAS SOLD THE PROPERTY BEARING UNIT NO. 26/ 17, GROUND FLOOR, SHREE RADHA PALACE, RAJPURA ROAD, DEHRADUN. THE SAL E CONSIDERATION HAS BEEN DISCLOSED AT ` 5,10,000/- IN THE SALE DEED. 14 ACCORDING TO THE AO, THE MARKET VALUE OF THIS PROPE RTY AT THE TIME OF SALE WAS ` 6,99,000/-. HE MADE THE ADDITION OF THE DIFFERENCE I.E. A SUM OF ` 1,79,000/- HAS BEEN ADDED. THE AO WAS OF THE VIEW THAT ASSESSEE HAS RECEIVED CASH OUT OF BOOKS. ON APPEAL, LD. CIT(A) HAS OBSERVED THAT THERE IS NO EVIDENCE WITH THE AO WHIC H CAN DEMONSTRATE THAT ASSESSEE HAS RECEIVED ON MONEY. HE ACCORDINGLY DELETED THE ADDITION. 14. WITH THE ASSISTANCE OF LD. REPRESENTATIVE, WE H AVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT ADDITION HAS BEEN MADE BY THE AO WITHOUT ANY BASIS. HE SIMPLY STATED THAT MAR KET VALUE OF THE PROPERTY WAS ` 6,99,000/-. IN THE REMAND PROCEEDING ALSO, HE FAI LED TO SUBSTANTIATE AS TO HOW THE MARKET VALUE OF THIS PROPERTY WAS ` 6,99,000/-.THE AO WAS UNABLE TO DISCLOSE AS TO HOW HE CAN REPLACE THE SALE CONSIDERATION DISCLOSED IN THE SALE DEED. INSPITE OF SEARCH, DEPARTMENT WAS UNABLE TO LAY ITS HAND ON ANY EVIDEN CE. IN SUCH SITUATION, HOW IT CAN SAY THAT ASSESSEE HAS RECEIVE D MORE AMOUNT THAN THE ONE DISCLOSED IN THE SALE DEED. CONSIDERI NG THE FINDING OF 15 LD. CIT(A), WE DO NOT SEE ANY REASON TO INTERFERE I N IT. IN VIEW OF THE ABOVE DISCUSSION, THE APPEAL OF THE REVENUE IS DISM ISSED. CO NO. 63 /D/11 15. THE ASSESSEE DID NOT PRESS THE CROSS OBJECTION. HENCE, IT IS ALSO REJECTED. ITA NO.824/DEL/2011: 16. IN THIS APPEAL ALSO, THE GROUNDS OF APPEAL TAKEN BY THE REVENUE ARE NOT IN CONSONANCE WITH RULE 8 OF THE ITAT'S RULES, THEY AR E DESCRIPTIVE AND ARGUMENTATIVE IN NATURE. THE FACTS AND CIRCUMSTANCE S ARE SIMILAR TO THAT OF ASSESSMENT YEAR 2002-03. IN RESPONSE TO THE NOTICE U NDER SEC. 153A, ASSESSEE HAS FILED THE RETURN ON 5 TH OCTOBER 2009 DECLARING AN INCOME OF RS.2,94,230. ASSESSEE FRAMED THE ASSESSMENT IN JUST TWO AND HALF MONTHS ON 29.12.2009. HE DETERMINED THE TAXABLE INCOME OF THE ASSESSEE AT RS.54,99,073. HE HAS MADE THE FOLLOWING ADDITIONS: I. ADDITION ON A/C OF DISALLOWANCE OF COMMISSION RS.35,500 16 II. ADDITION ON A/C OF BASIS OF RECEIPTS NOT DECLAR ED BY THE ASSESSEE BUT EVIDENT FROM AFFIDAVITS OF SU SHMA RS.9,00,000 BREJA & SIDDHARTHA BAREJS III. ADDITION UNDER SEC.68 ON A/C OF UNEXPLAINED L OANS RS.37,50,000 IV. ADDITION UNDER SEC. 68 ON A/C OF UNEXPLAINED A DVANCE CREDITS RS.5,00,000 V. ADDITION UNDER SEC. 69C ON A/C OF UNEXPLAINED RS. 19,342 EXPLAINED. TOTAL RS. 52,04,842 17. ON APPEAL, LEARNED CIT(APPEALS) DELETED THESE A DDITIONS. 18. THE REVENUE IS CHALLENGING THE DELETION OF THES E ADDITIONS. LEARNED FIRST APPELLATE AUTHORITY HAS NOTICED THE UNSECURED LOANS WHILE REPRODUCING THE FINDINGS OF THE ASSESSING OFFICER AT PAGE 3 WHI CH READ AS UNDER: THE A.O. HAS GIVEN FOLLOWING REASON WHILE MAKING THE ADDITION: THE DETAILS OF PARTIES FROM WHOM UNSECURED LOANS H AVE BEEN CLAIMED BY THE ASSESSEE TO HAVE BEEN RECEIVED DURING THE YE AR, WHERE ONLY CONFIRMATIONS HAVE BEEN FILED AND NO OTHER SUPPORTI NG DOCUMENTARY EVIDENCES LIKE BANK STATEMENTS HAVE BEEN FILED TO P ROVE THE CREDITWORTHINESS OF THE CLAIMED LOAN CREDITORS ARE AS UNDER: S.NO. NAME AMT. OF LOAN CLAIMED TO HAVE BEEN TAKEN DURING THE YEAR DETAILS OF EVIDENCE/DOCUMENTS NOT FILED 17 1 INDU BALA SINGH 9,00,000 BANK STATEMENT NOT FILED 2 SUSHMA BAREJE 7,50,000 BANK STATEMENT AND COPY OF RETURN NOT FILED. 3 SAVITRI DEVI 12,00,000 BANK STATEMENT AND COPY OF RETURN NOT FILED 4 RICHA AGGARWAL 1,00,000 BANK STATEMENT AND COPY OF RETURN NOT FILED 5 S.K. SUDAN 6,00,000 BANK STATEMENT NOT FILED 6. VISHAL AGGARWAL 2,00,000 BANK STATEMENT AND COPY OF RETURN NOT FILED TOTAL 37,50,000 19. THE ASSESSEE HAS PLEADED BEFORE THE LEARNED CIT (APPEALS) THAT ASSESSMENT WAS COMPLETED WITHIN TWO AND HALF MONTHS . ASSESSING OFFICER DID NOT PROVIDE HIM SUFFICIENT OPPORTUNITY FOR PROD UCING THE CONFIRMATION FROM THE CREDITORS, THEIR PAN AND OTHER DETAILS. AS SESSEE SUBMITTED ALL THESE DETAILS BEFORE THE LEARNED CIT(APPEALS). LEARNED FI RST APPELLATE AUTHORITY HAS CALLED FOR A REMAND REPORT FROM THE ASSESSING O FFICER. WITH RESPECT TO THE LOAN OF RS.9 LACS APPEARING AGAINST THE NAME OF INDU BALA SINGH, LEARNED CIT(APPEALS) HAS REPRODUCED THE RELEVANT P ORTION OF THE REMAND REPORT ON PAGE 7 OF THE IMPUGNED ORDER. WITH REGAR D TO THE UNSECURED LOAN APPEARING AGAINST THE NAME OF SMT. SUSHMA BREJA IS CONCERNED, ASSESSING OFFICER HAS ACCEPTED THE GENUINENESS TO THE EXTENT OF RS. 5 LACS. HE 18 SUBMITTED TO THE LEARNED CIT(APPEALS) THAT RS.2,50, 000 IS TAXABLE IN THE HANDS OF THE ASSESSEE. LEARNED CIT(APPEALS) TAKEN N OTE OF THIS REMAND REPORT ON PAGE 8 AND THEN CONFRONTED THE ASSESSEE W ITH THE OBSERVATIONS TO THE ASSESSING OFFICER. ASSESSEE HAS SUBMITTED A DET AILED REPLY TO THE REMAND REPORT WHICH HAS BEEN NOTICED BY THE LEARNED CIT(AP PEALS) ON PAGE 9. ASSESSEE HAS CONTENDED THAT A TOTAL AMOUNT OF RS.9 LACS WAS TO BE PAID BY THE ASSESSEE TO SMT. SUSHMA BREJA AND SIDDHARATH BR EJA. SMT. SUSHMA BREJA HAS SHOWN RS.5 LACS AS RECEIVABLE FROM THE ASSESSEE . SIDDHARATH BREJA HAS SHOWN RS. 4 LACS AS RECEIVABLE FROM THE ASSESSEE. T HE ASSESSEE HAS SHOWN LIABILITY OF RS.7,50,000 TOWARDS SMT. SUSHMA BREJA AND RS.1,50,000 TOWARDS SIDDHARATH BREJA. LEARNED CIT(APPEALS) HAS VERIFIED THIS FACT AND THEN ARRIVED AT A CONCLUSION THAT ASSESSING OFFICER HAS ERRED IN ACCEPTING THE AMOUNT OF RS.5 LACS SHOWN BY SMT. SUSHMA BREJA AS R ECEIVABLE. IN FACT, ASSESSEE HAS EXPLAINED THE TOTAL AMOUNT OF RS.9 LAC S REQUIRED TO BE PAID TO SMT. SUSHMA BREJA AND SIDDHARATH BREAJ. IN THIS WAY , LEARNED CIT(APPEALS) HAS DELETED THE ADDITION IN RESPECT OF RS.7,50,000 MENTIONED AT SR. NO.2 OF THE TABLE. AS FAR AS THE ADDITION OF RS.12 LACS IN RESPECT OF THE AMOUNT SHOWN AGAINST THE NAME OF SMT. SAVITA DEVI I S CONCERNED, WE FIND THAT ASSESSING OFFICER HAS ACCEPTED THE CLAIM OF AS SESSEE TO THE EXTENT OF RS.10 LACS. LEARNED CIT(APPEALS) HAS GONE THROUGH T HE EVIDENCE SUBMITTED 19 BY THE ASSESSEE IN RESPECT OF RS.2 LACS ALSO. WE HA VE SPECIFICALLY GONE THROUGH THE FINDINGS OF THE LEARNED CIT(APPEALS) AT PAGE NO.11 IN PARAGRAPH 6.3 (V). TAKING INTO CONSIDERATION THIS F INDING OF THE LEARNED CIT(APPEALS), WE DO NOT FIND ANY ERROR IN IT. TAKIN G INTO CONSIDERATION THE PARITY OF FACTS IN RESPECT OF OTHER CASH CREDITS AN D THE STAND OF THE ASSESSING OFFICER IN THE REMAND REPORT VIA-A-VIS THE DISCUSSI ON MADE BY THE LEARNED CIT(APPEALS), WE DO NOT FIND ANY ERROR IN THE ORDER OF LEARNED CIT(APPEALS) AND THE GROUND IN RESPECT OF DELETION OF RS.37,50,000 IS REJECTED. 20. IN GROUND NO.6, THE DISPUTE RELATES TO DELETION OF RS. 5 LACS RECEIVED FROM SIDDHARATH BREJA AND RS. 4 LACS FROM SMT. SUSH MA BREJA. WE FIND THAT THIS ITEM HAS BEEN CONSIDERED BY THE ASSESSING OFFI CER WHILE MAKING ADDITION OF RS.7,50,000 AGAINST THE NAME OF SMT. SU SHMA BREJA. ASSESSEE HAS TAKEN A TOTAL SUM OF RS.9 LACS FROM THE TWO IND IVIDUALS I.E. SMT. SUSHMA BREJA AND SIDDHARATH BREJA. BOTH THESE INDIVIDUALS HAVE FILED THEIR AFFIDAVITS AND CONFIRMED THE TRANSACTION. ASSESSING OFFICER WI THOUT VERIFYING THE FACTS HAS TAKEN ONE AMOUNT IN PEACE MEAL IN TWO TRANSACTI ONS. IN A WAY, HE HAS MADE DOUBLE ADDITION. LEARNED CIT(APPEALS) DELETED THE ADDITION FROM BOTH THE PLACES I.E. A SUM OF RS.7,50,000 WAS INCLUDED I N THE TOTAL ADDITION OF 20 RS.37,50,000 DISPUTED IN GROUND NO.1 AND A SUM OF R S. 9 LACS HAS BEEN AGAIN ADDED WHICH HAS BEEN DELETED AND DISPUTED IN GROUND NO.6. CONSIDERING THE FINDINGS OF THE LEARNED CIT(APPEALS ), GROUND NO.6 IS ALSO REJECTED. 21. IN GROUND NO.1, A SEPARATE AMOUNT OF RS.5 LACS IS ALSO DISPUTED. THE BRIEF FACTS OF THE CASE IN RESPECT OF THIS AMOUNT A RE THAT ASSESSEE HAS RECEIVED SUM OF RS.4 LACS AND RS. 1,00,000 FROM ONE PARUL GO EL AND BIMAL SHARMA. THESE LOANS HAVE BEEN TREATED AS BOGUS BY THE ASSES SING OFFICER IN THE ASSESSMENT ORDER. 22. WE HAVE PERUSED THE ORDER OF THE LEARNED CIT(AP PEALS). ON PAGE 19 OF THE IMPUGNED ORDER, LEARNED CIT(APPEALS) HAS REP RODUCED THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER ON 21.10. 2010. IN THIS REMAND REPORT, ASSESSING OFFICER WAS SATISFIED WITH THE EV IDENCE SUBMITTED BY THE ASSESSEE FOR EXPLAINING THE UNSECURED LOANS OF RS. 4 LACS RECEIVED FROM PARUL GOEL AND OF RS. 1 LAC RECEIVED FROM SHRI BIMO L SHARMA. WE ALSO NOTICE THAT ASSESSEE HAS SUBMITTED THE DETAILS OF P AN CARD, MARRIAGE CERTIFICATE OF PARUL GOEL, COPY OF HER INCOME-TAX R ETURN FOR ASSESSMENT YEAR 2002-03. SIMILAR EVIDENCE HAS BEEN PRODUCED IN RESP ECT OF SHRI BIMOL SHARMA. CONSIDERING THE SATISFACTION OF THE ASSESSI NG OFFICER AND THE 21 EVIDENCE DISCUSSED BY THE LEARNED CIT(APPEALS), WE DO NOT FIND ANY REASON INTERFERE IN THE ORDER OF THE LEARNED CIT(APPEALS) ON THIS ISSUE, HENCE THIS GROUND OF APPEAL IS ALSO REJECTED. C.O. NO. 64/DEL/2011 : 23. THE ASSESSEE DID NOT PRESS THE CROSS-OBJECTION, HENCE IT IS DISMISSED. ITA NO.825/DEL/2011: 24. IN THIS APPEAL, REVENUE HAS TAKEN NINE GROUNDS OF APPEAL. GROUND NOS. 1 TO 6 ARE INTER-CONNECTED TO EACH OTHER. IN THESE GROUNDS OF APPEAL, REVENUE IS IMPUGNING THE DELETION OF RS.45,50,000 AND OF RS .3,66,655. ADDITION OF RS.45,50,000 WAS MADE BY DISBELIEVING THE GENUINENE SS OF UNSECURED LOAN TAKEN BY THE ASSESSEE. THE ADDITION OF RS.3,63,655 WAS MADE BY MAKING A DISALLOWANCE OF INTEREST EXPENSES WHICH WERE CLAIME D BY THE ASSESSEE AS PAID TO THE LOANERS ON SUCH UNSECURED LOANS. 25. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT RETURN IN RESPO NSE TO THE NOTICE RECEIVED UNDER SEC. 153A OF THE ACT WAS FILED ON 5 TH OCTOBER 2009 DECLARING AN INCOME OF RS.5,39,141. ASSESSING OFFICER HAS COMPLE TED THE ASSESSMENT ON 29.12.2009. HE MADE THE FOLLOWING ADDITIONS: 22 I. ADDITION ON A/C OF DISALLOWANCE OF INTEREST RS.3,63,655 II. ADDITION ON A/C OF DISALLOWANCE OF WATER TAX RS. 707 III. ADDITION ON A/C OF DIFFERENCE IN WIP RS . 3,36,774 IV. ADDITION U/S 68 ON A/C OF UNEXPLAINED LOANS RS.45,50,000 V. ADDITION U/S 69C ON A/C OF UNEXPLAINED HOUSE HOLD EXPENDITURE RS. 20,218 TOTAL RS.52,71,154 26. ASSESSING OFFICER HAS NOTICED THE FOLLOWING DET AILS WHILE MAKING THE ADDITION OF UNSECURED LOANS AMOUNTING TO RS.45,50,0 00: THE A.O. HAS GIVEN FOLLOWING REASON WHILE MAKING TH E ADDITION: THE DETAILS OF PARTIES FROM WHOM UNSECURED LOANS HA VE BEEN CLAIMED BY THE ASSESSEE TO HAVE BEEN RECEIVED DURING THE YEAR, WHERE ONLY CONFIRMATIONS HAVE BEEN FILED AND NO OTHER SUPPORTI NG DOCUMENTARY EVIDENCES LIKE BANK STATEMENTS HAVE BEEN FILED TO P ROVE THE CREDITWORTHINESS OF THE CLAIMED LOAN CREDITORS ARE AS UNDER: S. NO. NAME AMT OF LOAN CLAIMED TO HAVE BEEN TAKEN DURING THE YEAR DETAILS OF EVIDENCE/DOCUMENTS NOT FILED. 1 N.D. BAREJA 2,50,000 BANK STATEMENT AND 23 COPY OF RETURN NOT FILED. 2 SAVITRI AGGARWAL 5,00,000 BANK STATEMENT AND COPY OF RETURN NOT FILED. 3 D.K. AGGARWAL 16,00,000 BANK STATEMENT AND COPY OF RETURN NOT FILED. 4 SUSHMA BAREJA 5,00,000 BANK STATEMENT AND COPY OF RETURN NOT FILED. 5 SIDDHARTHA BAREJA 2,50,000 BANK STATEMENT AND COPY OF RETURN NOT FILED. 6 VISHAL AGGARWAL 14,50,000 BANK STATEMENT AND COPY OF RETURN NOT FILED. TOTAL 45, 500,000 27. FROM THE PERUSAL OF LEARNED CIT(APPEALS)S, WE FIND THAT FACTS AND CIRCUMSTANCES ARE SIMILAR TO THAT OF ASSESSMENT YEA R 2002-03. IN THE REMAND PROCEEDINGS, ASSESSING OFFICER HAS ACCEPTED THE GEN UINENESS OF THE UNSECURED LOANS. IN THE FOREGOING PARAGRAPHS OF THI S ORDER, WE HAVE OBSERVED THAT ASSESSEE WAS NOT GRANTED SUFFICIENT OPPORTUNIT Y IN THE ASSESSMENT 24 PROCEEDINGS. DURING THE FIRST APPELLATE PROCEEDINGS , HE HAS SUBMITTED THE REQUISITE DETAILS AND LEARNED CIT(APPEALS) CALLED F OR A REMAND REPORT FROM THE ASSESSING OFFICER. IN THE REMAND PROCEEDINGS, A FTER GOING THROUGH THE EVIDENCE SUBMITTED BY THE ASSESSEE, ASSESSING OFFIC ER WAS SATISFIED. LEARNED CIT(APPEALS) CONSIDERING THE REMAND REPORT AS WELL AS THE EVIDENCE SUBMITTED BY THE ASSESSEE DELETED THE ADDITION. WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LEARNED CIT(APPEALS). CONSEQUENTLY , WE UPHOLD THE DELETION OF RS.45,50,000. THE INTEREST EXPENSES WER E DISALLOWED TO THE ASSESSEE ON THE GROUND THAT UNSECURED LOANS WERE BO GUS. ONCE UNSECURED LOANS ARE TREATED AS GENUINE, CONSEQUENT PAYMENT OF INTEREST ON SUCH LOANS IS TO BE ALLOWED. LEARNED CIT(APPEALS) HAS RIGHTLY ALL OWED THE CLAIM TO THE ASSESSEE, HENCE, GROUND NO.6 IS ALSO REJECTED. 28. IN THE NEXT SUBSTANTIAL GROUND NO.7, THE GRIEVA NCE OF THE REVENUE IS THAT LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.3,36,744. THE BRIEF FACTS OF THE CASE ARE THAT THE ON SCRUTI NY OF THE ACCOUNTS, ASSESSING OFFICER HAS OBSERVED THAT ASSESSEE HAS DECLARED WOR K-IN-PROGRESS AT RS.29,16,868 AS ON 31.3.2004 RELEVANT FOR ASSESSMEN T YEAR 2004-05. ACCORDING TO THE ASSESSING OFFICER, THE CLOSING WIP WOULD BE THE OPENING WIP ON IST APRIL 2004. HE FURTHER OBSERVED THAT ASS ESSEE HAD MADE AN 25 ADDITION OF RS.5 LACS AND RS.8,45,250 IN THE WIP. T HUS, ACCORDING TO THE ASSESSING OFFICER, AT THE END OF THE YEAR, WIP SHOU LD BE RS.42,62,118. AS AGAINST THIS, ASSESSEE HAS SHOWN WIP AT RS.39,25,34 4. ASSESSING OFFICER MADE THE ADDITION OF RS.3,36,774 BEING THE DIFFEREN CE IN THE WIP. 29. BEFORE LEARNED CIT(APPEALS), IT WAS SUBMITTED B Y THE ASSESSEE THAT ASSESSING OFFICER FAILED TO APPRECIATE THE ACCOUNTS OF THE ASSESSEE. THE ASSESSEE HAS INCURRED A SUM OF RS.5 LACS WHICH HE H AS SEPARATELY CAPITALIZED AS PART OF FIXED ASSETS. THIS AMOUNT CANNOT BE INCL UDED IN THE WIP. IF THIS AMOUNT IS EXCLUDED THEN CLOSING WIP WOULD BE RS.37, 62,118 WHICH IS LOWER THAN THE AMOUNT DISCLOSED BY THE ASSESSEE AT RS.39, 25,344. LEARNED CIT(APPEALS) HAS CONSIDERED THIS ASPECT AND PERUSED THE RECORD. HE WAS OF THE OPINION THAT A DISPUTE RELATES TO THE TREATMENT OF RS. 5 LACS. WHETHER THIS AMOUNT IS REVENUE EXPENSES WHICH WILL FORM AS A PAR T OF THE WIP OR IT IS A CAPITAL EXPENDITURE WHICH HAS BEEN ATTRIBUTED TOWAR DS CAPITAL ASSETS. THE ASSESSEE HAS CAPITALIZED THIS AMOUNT AND EXCLUDED F ROM THE REVENUE EXPENDITURE WHICH HAS REDUCED THE VALUE OF WIP. 30. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMST ANCES, WE ARE OF THE VIEW THAT ASSESSING OFFICER WAS NOT JUSTIFIED IN MA KING THE ADDITION. THE 26 ASSESSEE HAS ALREADY SHOWN EXCESS WIP THEN THE ONE WORKED OUT BY THE ASSESSING OFFICER. THE ASSESSEE HAS SHOWN CLOSING W IP AT RS.39,25,344. ACCORDING TO THE WORKING OF THE ASSESSING OFFICER, AFTER EXCLUSION OF RS. 5 LACS, IT COMES OUT TO RS.37,62,118. IN THIS SITUATI ON, THERE CANNOT BE ANY ADDITION IN THE HANDS OF ASSESSEE. LEARNED CIT(APPE ALS) HAS RIGHTLY DELETED THE ADDITION. IN VIEW OF THE ABOVE DISCUSSION, APPE AL OF THE REVENUE IS DISMISSED. CO NO.65/DEL/2011 : 31. ASSESSEE DID NOT PRESS THE CROSS-OBJECTION, HEN CE IT IS REJECTED. ITA NO. 826/D/2011: A.Y. 2003-04 32. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE ARE NOT IN CONSONANCE WITH RULE 8 OF ITAT RULES. THEY ARE DESC RIPTIVE AND ARGUMENTATIVE IN NATURE. THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 5 TH OCTOBER, 2009 IN RESPONSE TO THE NOTICE RECEIVED U /S 153A. HE HAS DECLARED AN INCOME OF ` 8,37,930/-. THE AO HAS PASSED THE ASSTT. ORDER ON 29.12.2009. HE DETERMINED THE TAXABLE INC OME OF THE ASSESSEE AT ` 2,40,64,990/-. HE HAS MADE FOLLOWING ADDITIONS :- IV. ADDITION ON ACCOUNT OF DISALLOWANCE OF INTEREST RS. 1,43,000/- V. ADDITION ON ACCOUNT OF DISALLOWANCE OF COMMISSIO N RS. 60,000/- 27 VI. ADDITION ON ACCOUNT OF DISALLOWANCE OF LAND IMP ROVEMENT EXPENSES RS. 2,14,000/- VII. ADDITION ON ACCOUNT OF UNDISCLOSED SALE DEED M ADE TO PRATEEK RESORTS & BUILDERS PVT. LTD. RS. 56,85,000/- VIII. ADDITION ACCOUNT OF UNDISCLOSED SALE FOR WHIC H CHEQUE HAS BEEN RECEIVED RS . 5,50,000/- IX. ADDITION U/S 68 ON ACCUNT OF UNEXPLAINED LOANS/ ADVANCES RS. 1,50,25,000/- X. ADDITION ON ACCOUNT OF INVESTMENT FOR PURCHASE O F LAND RS. 4,80,000/- XI. ADDITION ON ACCOUNT OF INVESTMENT FOR PURCHASE OF LAND FROM PRBHAT PANDEY AND JAIDEEP RS. 4,10,000/- XII. ADDITION ON ACCOUNT OF INVESTMENT U/S 69 FOR P URCHASE OF STAMP PAPER RS. 6,60,000/- TOTAL RS. 2,32,27,000/- 33. ON APPEAL LD. CIT(A) DELETED ALL THE ADDITIONS . 34. IN GROUND NO. 1, REVENUE IS IMPUGNING THE DELET ION OF ` 1,50,25,000/-. THIS AMOUNT HAS BEEN ADDED BY THE AO ON ACCOUNT OF FAILURE OF ASSESSEE TO PROVE GENUINENESS OF UNSECUR ED LOANS. THE AO HAS NOTICED THE DETAILS OF PARTIES FROM WHOM UNS ECURED LOANS HAVE BEEN RECEIVED BY THE ASSESSEE. THESE DETAILS H AVE BEEN REPRODUCED BY THE LD. CIT(A) ALSO WHILE TAKING NOTE OF THE AOS FINDING. THEY READ AS UNDER :- THE DETAILS OF PARTIES FROM WHOM UNSECURED LOANS H AVE BEEN CLAIMED BY THE ASSESSEE TO HAVE BEEN RECEIVED DURING THE YEAR, WHE RE ONLY CONFIRMATIONS HAVE 28 BEEN FILED AND NO OTHER SUPPORTING DOCUMENTARY EVID ENCES LIKE BANK STATEMENTS HAVE BEEN FILED TO PROVE THE CREDITWORTHINESS OF TH E CLAIMED LOAN CREDITORS ARE AS UNDER :- S.NO. NAME AMOUNT OF LOAN CLAIMED TO HAVE BEEN TAKEN DURING THE YEAR DETAILS OF EVIDENCES/DOCUMENTS NOT FILED 1. INDU BALA SINGH 8,00,000/- BANK STATEMENT NOT FI LED 2. SAVITRI DEVI AGGARWAL 20,00,000/- BANK STATEMENT AND COPY OF RETURN NOT FILED 3. SIDDHARTHA BAREJA 2,00,000/- BANK STATEMENT AND COPY OF RETURN NOT FILED 4. HIRA ASWAL 8,00,000/- BANK STATEMENT AND COPY OF RETURN NOT FILED 5. N.D. BAREJA 2,00,000/- BANK STATEMENT AND COPY OF RETURN NOT FILED 6. PARUL GOEL 5,00,000/- BANK STATEMENT AND COPY OF RETURN NOT FILED 7. RITA 2,00,000/- BANK STATEMENT NOT FILED 8. M.M. SINGHA 16,00,000/- BANK STATEMENT AND COPY OF RETURN NOT FILED 9. VISHAL AGGARWAL 44,00,000/- BANK STATEMENT AND COPY OF RETURN NOT FILED TOTAL 1,07,00,000/- FURTHER, THE DETAILS OF PARTIES FROM WHOM UNSECURED LOANS HAVE BEEN CLAIMED BY THE ASSESSEE TO HAVE BEEN RECEIVED DURING THE YEAR BUT WHERE EVEN THE CONFIRMATION HAVE NOT BEEN FILED ARE AS UNDER :- S.NO. NAME AMOUNT OF LOAN CLAIMED TO HAVE BEEN TAKEN DURING THE YEAR DETAILS OF EVIDENCES/DOCUMENTS NOT FILED 1. S.K. KANDHARI 2,00,000/- CONFIRMATION, BANK STATEMENT NOT FILED 29 2. S.R. MATTA 1,75,000/- CONFIRMATION, BANK STATEMENT AND COPY OF RETURN NOT FILED 3. SHRUTI SINGH 3,00,000/- CONFIRMATION, BANK STATEMENT AND COPY OF RETURN NOT FILED 4. PRAGATI ASSOCIATES 20,00,000/- CONFIRMATION, BANK STATEMENT AND COPY OF RETURN NOT FILED 5. BALAJI ASSOCIATES 16,50,000/- CONFIRMATION. BANK STATEMENT AND COPY OF RETURN NOT FILED TOTAL 43,25,000/- 35. WITH THE ASSISTANCE OF LD. REPRESENTATIVE, WE H AVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT ASSESSEE HAS SUBMITTED AN ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A). HE HAS A LLEGED THAT AO DID NOT GRANT PROPER OPPORTUNITY OF HEARING TO HIM. LD. FIRST APPELLATE AUTHORITY HAS CALLED FOR A REMAND REPORT FROM THE A O. LD. CIT(A) HAS REPRODUCED THE COMMENTS OF AO IN THE REMAND REPORT ON EACH UNSECURED LOANS. THE COMMENTS HAVE BEEN REPRODUCED ON PAGES NO. 10,12,13,14,15,17 AND 19,20,21,22,25 OF THE IMP UGNED ORDER. WE HAVE GONE THROUGH THE COMMENTS OF AO AND FIND TH AT HE WAS SATISFIED WITH THE EVIDENCE SUBMITTED BY THE ASSESS EE AND CONCEDED FOR DELETION OF THE ADDITION. THUS, THE FACTS WITH REGARD TO THIS GROUND OF APPEAL ARE SIMILAR TO THAT OF ASSTT. YEAR 2002-2 003. IN VIEW OF OUR 30 FINDING IN ASSTT. YEAR 2002-03, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL . IT IS REJECTED. 36. THE NEXT SUBSTANTIAL GROUND IS GROUND NO. 6, WH EREIN REVENUE IS IMPUGNING THE GRANT OF INTEREST EXPENSES AMOUNTI NG TO ` 3,65,309/- ON THE UNSECURED LOANS. THIS AMOUNT WAS DISALLOWED BY THE AO ON THE GROUND THAT ASSESSEE FAILED TO ESTABLISH GENUIN ENESS OF THE UNSECURED LOANS. LD. CIT(A) HAS ACCEPTED THE GENUIN ENESS OF LOAN CONSEQUENTLY INTEREST EXPENSES INCURRED TOWARDS PAY MENT OF INTEREST ON THE LOANS HAVE ALSO BEEN ALLOWED. WE HAVE ALREAD Y UPHELD THE FINDING OF LD. CIT(A) WITH REGARD TO THE GENUINENES S OF THE LOANS AND CONSEQUENTLY INTEREST EXPENSES HAS TO BE ALLOWED. T HEREFORE, THIS GROUND IS DEVOID OF ANY MERIT. HENCE REJECTED. 37. IN GROUND NO. 7, REVENUE IS IMPUGNING THE DELET ION OF ` 4,80,000/- AND ` 4,10,000/-. THE BRIEF FACTS IN RESPECT OF THE ADDIT ION OF ` 4,80,000/- ARE THAT ACCORDING TO THE AO, ASSESSEE HAS PURCHASED PROPERTIES FROM SHRI ANUJ & TANUJ KUMAR AND SHRI S UNIL KUMAR NAGPAL FOR A SUM OF ` 1,40,000/- AND ` 3,40,000/-. HE DID NOT 31 DISCLOSED PURCHASE OF THESE PROPERTIES IN THE TOTAL PURCHASES DECLARED BY THE ASSESSEE. HE TREATED IT AS UNEXPLAI NED INVESTMENT AND MADE THE ADDITION. ON APPEAL, IT WAS CONTENDED BY THE ASSESSEE THAT THESE PURCHASES HAVE DULY BEEN NOTICE D BY THE ASSESSEE. THE PROPERTIES WERE SOLD DURING THE YEAR AND A NET PROFIT / LOSS WERE ACCOUNTED BY THE ASSESSEE. THE PROPERTIES WERE SOLD TO PRATEEK RESORTS & BUILDERS PVT. LTD. ASSESSEE HAS P RODUCED PURCHASE DEED AND SALE DEED FOR BUTTERACING HIS CON TENTION. LD. FIRST APPELLATE AUTHORITY HAS VERIFIED THESE ASPECTS AND OBSERVED THAT IF IT IS FOUND THAT INVESTMENT / PURCHASES WAS RECORDED I N THE BOOKS OF ACCOUNTS THEN HOW THE SAME HAS BEEN TREATED IN COM PUTING THE INCOME IS A DIFFERENT ISSUE. THE ASSESSEE HAS ACCO UNTED THE PURCHASE VIS A VIS SALES. THE PURCHASE DEED FORM PA RT OF THE TOTAL PURCHASES IN THE STATEMENT BECAUSE THE PROPERTIES H AVE ALSO BEEN SOLD. THE ADDITION HAS BEEN MADE BY THE AO SIMPLY F OR THE REASONS THAT HE WAS NOT IN A POSITION TO VERIFY THE COMPLET E FACTS BECAUSE HE HAS INITIATED THE INVESTIGATION AT A VERY FAG END A ND COMPLETED THE ASSESSMENT FOR SEVEN ASSTT. YEARS IN JUST TWO AND A HALF MONTHS. IT WAS NOT PRACTICALLY POSSIBLE FOR HIM TO ENQUIRE ALL THESE YEARS. AFTER 32 TAKING INTO CONSIDERATION THE FINDING OF LD. CIT(A) , WE DO NOT FIND ANY ERROR IN IT . THIS GROUND OF APPEAL IS REJECTED. 38. AS FAR AS DELETION OF ` 4,10,000/- IS CONCERNED, WE FIND THAT AO HAS MADE THIS ADDITION ON THE GROUND THAT ASSESSEE HAS PURCHASED A PIECE OF LAND THROUGH SHRI PRABHAT PANDEY FOR CONSI DERATION OF ` 3 LACS. SIMILARLY, HE PURCHASED A PROPERTY FROM SHRI PRABHAT PANDEY FOR A SUM OF ` 1,10,000/-. THESE TWO PURCHASES HAVE NOT BEEN DECLA RED BY THE ASSESSEE ACCORDING TO THE AO. ON APPEAL, LD. CIT(A) HAS RECORDED A FINDING THAT BOTH THESE PROPERTIES HAVE BEEN ACCOUNTED BY THE ASSESSEE. SHRI RAJIV BERRY HAS SOLD THE PROPERT Y IN A REPRESENTATIVE CAPACITY ON BEHALF OF SHRI PRABHAT PANDEY AND ASSESSEE HAS SHOWN IN HIS BOOKS OF ACCOUNTS AS LAND (SHRI RAJIV BERI). THE AO DUE TO PAUCITY OF TIME COULD NOT VERI FY THIS ASPECT AND MADE THE ADDITION. THE LD. CIT (A) FURTHER OBSERVED THAT ASSESSEE HAS ACCOUNTED THE PROPERTY PURCHASED FROM SHRI JAID EEP IN HIS BOOKS. AFTER TAKING INTO CONSIDERATION THE FINDING OF FACT RECORDED BY THE LD. CIT(A), WE DO NOT FIND ANY ERROR IN IT. THE REVENUE IS UNABLE TO PRODUCE ANY EVIDENCE DEMONSTRATING THE FACT THAT TH ESE FINDINGS ARE FACTUALLY INCORRECT. ONCE IT IS HELD THAT IN THE BO OKS BOTH THESE 33 PROPERTIES HAVE BEEN NOTED BY THE ASSESSEE THEN HOW ADDITIONS CAN BE MADE ON THE GROUND THAT THESE PROPERTIES HAVE NO T BEEN ACCOUNTED BY THE ASSESSEE. THE ASSESSEE HAS FILED T HE SALE DEEDS BEFORE THE LD. CIT(A). IN VIEW OF THE ABOVE DISCUSS ION, GROUND NO. 7 IS REJECTED. 39. IN GROUND NO. 8, GRIEVANCE OF THE REVENUE IS TH AT LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 6,60,000/-. THIS ADDITION WAS MADE BY THE AO ON THE GROUND THAT ASSESSEE FAILED TO ACC OUNT PURCHASE OF STAMP PAPERS. LD. CIT(A) HAS DELETED THE ADDITION O N THE GROUND THAT FOR PURCHASE OF ANY PROPERTY, THE BUYER HAS TO PRO DUCE THE STAMP PAPER ACCORDING TO THE STAMP DUTY FEE FIXED BY THE STATE GOVERNMENT. THIS IS AN UNAVOIDABLE COST AND IS BOUND TO BE INCU RRED WHENEVER ANY IMMOVABLE PROPERTY IS PURCHASED. THE ASSESSEE I S INVOLVED IN THE BUSINESS OF SALE AND PURCHASE OF PROPERTY. IN A NY PURCHASE OF PROPERTY, INCURRENCE OF ANY EXPENSE IN THE SHAPE OF STAMP DUTY WOULD BE A DIRECT EXPENDITURE. LD. CIT(A) FURTHER OBSERVE D THAT PURCHASE OF STAMP DUTY HAS BEEN ACCOUNTED FOR AND RECORDED IN T HE BOOKS OF ACCOUNTS OF ASSESSEE. HE HAS VERIFIED THE BOOKS. CO NTRARY TO THIS FINDING THERE IS NO EVIDENCE BROUGHT ON RECORD BY T HE REVENUE NOR 34 THERE IS ANY PLEADING THAT IT IS FACTUALLY INCO RRECT. WE COULD UNDERSTOOD THE CASE OF REVENUE IF IT HAD FILED THE PAPER BOOK CONTAINING BOOKS OF ACCOUNTS, EXHIBITING THE FACT T HAT NO SUCH EXPENSES WERE ACCOUNTED BY THE ASSESSEE. THE AO HAS MADE THE ADDITION IN A SWEEPING WAY WHATEVER HE NOTICED IN T HE ACCOUNTS WITHOUT VERIFYING THE FACTS. THUS, IN OUR OPINION N O INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT(A) ON THIS ISSUE . 40. IN GROUND NO. 9, GRIEVANCE OF THE REVENUE IS THAT LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 56,85,000/-. THIS ADDITION WAS MADE BY THE AO ON THE GROUND THAT ASSESSEE HAS NOT DISCLOSED SALE OF PROPERTY MADE TO PRATEEK RESORT AND BUILDERS PVT . LTD. LD. CIT(A) HAS DISCUSSED THIS ISSUE IN PARA 13.3. HE RECORDED A FINDING THAT IN THE REMAND PROCEEDING, AO HIMSELF AGREED FOR DELETI ON OF ` 25 LACS. ACCORDING TO THE AO, THE SALE DEED WAS EXECUTED ON 21.4.2006 FOR CONSIDERATION OF ` 25 LACS. HE MISCONSTRUED THIS DATE AND TOOK IT AS 21.4.2005 IN THE ASSTT. ORDER. THE RECEIPT IS FOR F .Y. 2006-07 AND NOT FOR F.Y. 2005-06. THE ASSESSEE HAS DISCLOSED SALE C ONSIDERATION OF ` 25 LACS IN ASSTT. YEAR 2006-07. THE AO IN THIS WAY ADMITTED THE 35 DISCLOSURE OF SALE CONSIDERATION TO THE EXTENT OF ` 25 LACS. LD. CIT(A) KEEPING IN VIEW THE STAND OF AO DELETED THE ADDITIO N OF ` 25 LACS OUT OF THE TOTAL ADDITION OF ` 56,85,000/-. WITH REGARD TO THE ADDITION OF ` 31,85,000/- LD. CIT(A) HAS MADE FOLLOWING DISCUSSIO N :- B. ADDITION OF RS. 3,25,000/- ACCORDING TO THE ASSESSEE, THE ADDITION IS ERRONEOUS AS THE SALE OF RS. 3,25,000/- WAS DECLARE D BY ASSESSEE IN FINANCIAL YEAR 2006-07 AND DOES NOT PERTAIN TO FINANCIAL YEAR 2005 -2006. THE BOOKS OF ACCOUNTS OF ASSESSEE FOR FINANCIAL YEAR 2006-07 WERE EXAMINE D, WITH FINDING THAT THE SALE OF RS. 3,25,000/- WAS DECLARED BY ASSESSEE AS PART OF SALES CREDITED IN PROFIT & LOSS ACCOUNT FOR FINANCIAL YEAR 2006-07. IT IS A WELL A CCEPTED PRINCIPLE THAT ANY SALE CAN ONLY BE CONSIDERED AS INCOME OF ASSESSEE ONLY O NCE AND IN THIS CASE SINCE IT WAS ALREADY DECLARED BY ASSESSEE AS RECEIPT FOR FIN ANCIAL YEAR 2006-07, ADDING IT IN FINANCIAL YEAR 2005-06 SHALL LEAD TO DOUBLE TAXA TION. IN THE LIGHT OF AFORESAID FACTS, THE ADDITION OF RS. 3,25,000/- IS HEREBY DEL ETED. C. ADDITION OF RS. 5,50,000/-, RS. 3,80,00/- AND RS . 5,00,00/- THE ADDITION WAS MADE BY AO ON THE GROUND THAT THE SALE DEEDS OF AFO RESAID AMOUNT WERE NOT DECLARED AS SALES IN PROFIT AND LOSS ACCOUNT OF ASS ESSEE. ON THE OTHER HAND, THE ASSESSEE HAS STATED THAT IT WAS ONLY THE NET PR OFIT ARISING TO THE TUNE OF RS. 2,18,000/- THAT WAS DECLARED BY THE ASSESSEE IN HIS RETURN OF INCOME AS INSTEAD OF SHOWING THE SALES, ON THE RECEIPTS SIDE OF PROF IT & LOSS ACCOUNT AND CORRESPONDING PURCHASES ON THE PAYMENT SIDE OF PRO FIT & LOSS ACCOUNT, THE ASSESSEE DECLARED NET PROFIT AFTER REDUCING PURCHAS ES FROM SALES OF THE PROPERTIES. 36 I HAVE CONSIDERED ASSESSMENT ORDER, BOOKS OF ACCOUN TS OF ASSESSEE AND ALSO THE SUBMISSIONS OF ASSESSEE. IT IS CONCLUDED THAT AS P ER ACCOUNTING PRINCIPLES, THE ASSESSEE SHOULD HAVE DECLARED SALES AS RECEIPT AND CORRESPONDING PURCHASES AS PAYMENT IN PROFIT & LOSS ACCOUNT. BUT, IT IS A LSO IMPORTANT TO CONSIDER THAT THE ASSESSMENT PROCEDURE IS A METHODOLOGY TO ARRIVE AT THE NET INCOME OF THE ASSESSEE. IN THIS CASE THOUGH THE ASSESSEE HAS NOT DECLARED THE SALES AS RECEIPTS AND PURCHASES AS PAYMENT, YET THE NET PRO FIT ARISING OUT OF THE SALE OF THE PROPERTIES HAS BEEN DECLARED. THE BOOKS OF ACCOUNT OF ASSESSEE ALSO SUBSTANTIATE THE FACT. THEREFORE, IT CAN BE SAID THAT THE SALE OF PROPERTIES WAS WRONGLY ACCOUNTED BY ASSESSEE BUT IT CANNOT BE SAI D THAT THESE SALE OF PROPERTIES REMAINED UNACCOUNTED. D. ADDITION OF RS. 14,30,000/- THE AO MADE THE ADDITION ON THE BASIS OF THREE SALE DEEDS OF RS. 5,50,000/-, RS. 3,80,000/- AND RS . 5,00,000/- SUBMITTED BY ASSESSEE DURING THE ASSESSMENT PROCEEDINGS BUT NOT FOUND IN DETAILS OF SALES SUBMITTED BY ASSESSEE. THE ASSESSEE IN HIS SUBMISS IONS HAS STATED THAT THESE AFORESAID THREE SALES DEEDS AGGREGATING TO RS. 14,3 0,000/- WERE NONE OTHER THAN THE SALES MENTIONED IN THE TABLE ABOVE AND WER E FORWARDED TO THE AO FOR COMMENTS, IN RESPONSE TO WHICH, THE AO NEITHER GAVE ANY COMMENTS ON THE MATTER NOR PRODUCED ANY SUCH SALE DEED WHICH APART FROM SALE OF RS. 42,55,000/- WERE IN THE RECORD OF AO. THEREFORE, I T IS APPARENT THATTHERE ARE NO SUCH SALE DEEDS REMAINING UNACCOUNTED. HENCE, THE ADDITION OF RS. 14,30,000/- IS DELETED. 37 41. AFTER GOING THROUGH THE DETAILED DISCUSSION MAD E BY THE LD. CIT(A) WE DO NOT FIND ANY REASON TO INTERFERE IN IT . THE AO HAS MADE THE ADDITION WITHOUT PROPER VERIFICATION OF THE FAC TS AND CIRCUMSTANCES. IN VIEW OF THE FINDING RECORDED BY T HE LD. CIT(A), THIS GROUND OF APPEAL IS REJECTED. 42. IN GROUND NO. 10, GRIEVANCE OF REVENUE IS THAT LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 5,50,000/-. ACCORDING TO THE AO A CHEQUE OF ` 5,50,000/- DATED 11.2.2006 WAS RECEIVED FROM ONE S HRI GOVIND PETWAL BY M/S. SHARMA ASSOCIATES. THE AO ASK ED THE ASSESSEE TO EXPLAIN THE RECEIPT OF THIS CHEQUE. ACC ORDING TO HIM, ASSESSEE FAILED TO GIVE ANY EXPLANATION AND HE CONS TRUED THAT THIS AMOUNT MUST BE RECEIVED BY THE ASSESSEE TOWARDS SAL E OF ANY LAND TO THIS PERSON BY THE ASSESSEE. BEFORE LD. CIT(A), IT WAS CONTENDED THAT THIS CHEQUE WAS NEVER ENCASHED BY THE ASSESSEE . THIS AMOUNT WAS NOT CREDITED IN THE BANK ACCOUNT OF THE ASSESSE E. MEANING THEREBY, NO SUCH AMOUNT WAS RECEIVED BY THE ASSESSE E. LD. CIT(A) AFTER VERIFICATION OF THE FACTS AND THE BANK STATE MENT, DELETED THE ADDITION. ONCE IT IS ESTABLISHED THAT CHEQUE WAS NO T ENCASHED THEN IT IS JUST A WASTE PAPER. AS AND WHEN CHEQUE WOULD BE ENCASHED, IT 38 WOULD BECOME THE RECEIPT OF THE ASSESSEE. IN THE AB OVE SITUATION, THE INCOME CANNOT BE ADDED IN THE HANDS OF ASSESSEE. LD . CIT(A) HAS DELETED THE ADDITION. HENCE THIS GROUND OF APPEAL IS ALSO REJECTED. 43. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. 44. CROSS OBJECTION NO. 66 ASSESSEE DID NOT PRESS T HE CROSS OBJECTION HENCE REJECTED. ITA NO. 827/D/2011 A.Y. 2007-08 45. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE ARE NOT IN CONSONANCE WITH RULE 8 OF ITAT RULES . THEY ARE DES CRIPTIVE AND ARGUMENTATIVE IN NATURE. THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 5 TH OCTOBER, 2009 IN RESPONSE TO THE NOTICE RECEIVED U /S 153A OF THE ACT. HE HAS DECLARED AN INCOME OF ` 10,53,865/-. THE AO HAS PASSED THE ASSTT. ORDER ON 29.12.2009. HE DETERMINE D THE TAXABLE INCOME OF THE ASSESSEE AT ` 3,58,60,763/- AFTER MAKING THE FOLLOWING ADDITIONS :- S.NO. PARTICULARS AMOUNT 1. DISALLOWANCE OF INTEREST 3,65,300/- 39 2. DISALLOWANCE OF EXPENSES CLAIMED FOR DEVELOPMENT OF LAND 88,82,390/- 3. DISALLOWANCE OF EXPENSES CLAIMED FOR SAHASTRADHARA PROJECT 39,45,000/- 4. ADDITION U/S 68 ON ACCOUNT OF UNEXPLAINED LOANS/ADVANCES AS DISCUSSED ABOVE 1,79,95,000/- 5. UNEXPLAINED INVESTMENT FOR CAPITAL INTRODUCTION IN FIRM 5,50,000/- 6. UNEXPLAINED CASH PAYMENT MADE TO MR. PINTOO (RS. 8 LACS + RS. 1.32 LACS + RS. 1,08,200) AS DISCUSSED ABOVE 10,40,200/- 7. UNEXPLAINED CASH PAYMENT MADE TO MR. MEHTA A/C 2,29,000/- 8. UNEXPLAINED CASH INVESTMENT IN GMS PROPERTY 18,00,000/- TOTAL 3,48,06,890/- 46. ON APPEAL, LD. CIT(A) DELETED ALMOST ALL THE AD DITIONS. 47. GROUND NO. 1 & 6 ARE INTERCONNECTED TO EACH OTH ER. IN THESE GROUND OF APPEAL, THE GRIEVANCE OF REVENUE IS THAT LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 1,79,95,000/- AND ADDITION OF ` 1,43,060/-. THESE ADDITIONS WERE MADE BY TREATING T HE LOANS AND ADVANCES AS NON GENUINE AND DISALLOWANCE OF INTERES T PAYMENT ON SUCH LOANS. 48. GROUND NO. 2 TO 5 ARE ARGUMENTS IN SUPPORT OF T HESE GROUNDS. THE AO HAS NOTICED THE DETAILS OF PARTIES FROM WHOM UNSECURED LOANS HAVE BEEN RECEIVED BY THE ASSESSEE. THESE DET AILS HAVE BEEN REPRODUCED BY THE LD. CIT(A) ALSO WHILE TAKING NOTE OF THE AOS FINDING THEY READ AS UNDER :- 40 THE DETAILS OF PARTIES FROM WHOM UNSECURED LOANS HA VE BEEN CLAIMED BY THE ASSESSEE TO HAVE BEEN RECEIVED DURING THE YEAR, WHERE ONLY CONFIRMATIONS HAVE BEEN FILED AND NO OTHER SUPPORTI NG DOCUMENTARY EVIDENCES LIKE BANK STATEMENTS HAVE BEEN FILED TO P ROVE THE CREDITWORTHINESS OF THE CLAIMED LOAN CREDITORS ARE AS UNDER :- S. NO. NAME AMOUNT OF LOAN CLAIMED TO HAVE BEEN TAKEN DURING THE YEAR DETAILS OF EVIDENCES/DOCUMENTS NOT FILED 1. GOPAL DUTT 4,00,000 BANK STATEMENT NOT FILED 2. LATA RAWAT 2,50,000/- BANK STATEMENT AND COPY OF RETURN NOT BANK STATEMENT AND COPY OF RETURN NOT FILED FILED 3. HIRA ASWAL 21,70,000/- BANK STATEMENT AND COPY O F RETURN NOT FILED 4. HUKUM SINGH 5,50,000/- BANK STATEMENT AND COPY OF RETURN NOT FILED 5. RAMESH KUMAR 5,00,000/- BANK STATEMENT AND COPY OF RETURN NOT FILED 6. JD ASSOCIATES 8,00,000/- BANK STATEMENT AND COPY OF RETURN NOT FILED 7. K.K. SUDAN 1,25,000/- BANK STATEMENT AND COPY OF RETURN NOT FILED 8. S.K. SUDAN 3,75,000/- BANK STATEMENT AND COPY OF RETURN NOT FILED 9. GYAN MURTI DEVI 4,00,000/- BANK STATEMENT AND CO PY OF RETURN NOT FILED 10. MANJU SEMWAL 10,00,000/- BANK STATEMENT AND COP Y OF RETURN NOT FILED 11. HIMALAYAN TRADER 1,00,000/- BANK STATEMENT AND COPY OF RETURN NOT FILED 12. MANOJ SURI 3,00,000/- BANK STATEMENT AND COPY O F RETURN NOT FILED 13. PRADEEP SINGH NEGI 9,00,000/- BANK STATEMENT AND COPY OF RETURN NOT FILED TOTAL 1,25,20,000/- FURTHER, IN THE AFFIDAVIT FILED, SH. MANOJ SURI HAS CERTIFIED THAT AMOUNT OF LOAN OF RS. 36,00,000/- WAS GIVEN BY HIM TO THE ASS ESSEE IN THE EARLIER YEARS AND AMOUNT HAS BEEN BROUGHT FORWARD FROM EARL IER YEARS AND NO LOAN WAS GIVEN BY HIM DURING THE YEAR UNDER CONSIDE RATION. HOWEVER, FROM THE EARLIER YEAR RECORDS, IT IS NOTICED THAT NO SUC H LOAN IN THE NAME OF SH. MANOJ SURI WAS SHOWN BY THE ASSESSEE AND HENCE, IT IS CLEAR THAT THIS CLAIMED LOAN HAS BEEN SHOWN ONLY IN THE YEAR UNDER CONSIDERATION. 41 FURTHER, THE DETAILSOF PARTIES FROM WHOM UNSECURED LOANS/ADVANCES HAVE BEEN CLAIMED BY THE ASSESSEE TO HAVE BEEN RECEIVED DURING THE YEAR BUT WHERE EVEN THE CONFIRMATIONS HAVE NOT BEEN FILED AR E AS UNDER :- S. NO. NAME AMOUNT OF LOAN/ADVANCES CLAIMED TO HAVE BEEN TAKEN DURING THE YEAR DETAILS OF EVIDENCES/DOCUMENTS NOT FILED 1. LAXMAN SINGH 4,00,000/- CONFIRMATION, BANK STATEMENT AND COPY OF RETURN NOT FILED 2. PANKAJ CHETRI 4,00,000/- CONFIRMATION, BANK STATEMENT AND COPY OF RETURN NOT FILED 3. PRATEEK RESORTS 46,75,000/- CONFIRMATION, BANK STATEMENT AND COPY OF RETURN NOT FILED TOTAL 54,75,000/- 49. WITH THE ASSISTANCE OF LD. REPRESENTATIVE, WE H AVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT AO DID N OT PROVIDE SUFFICIENT OPPORTUNITY TO THE ASSESSEE DURING THE ASSTT. PROCE EDING FOR EXPLAINING THE NATURE OF UNSECURED LOANS AND THE CR EDIT ENTRIES AVAILABLE IN HIS BOOKS OF ACCOUNTS. THE ASSESSEE HA S FILED ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A) AND LD. CIT(A) HAS C ALLED FOR REMAND REPORT FROM THE AO. IN THE REMAND REPORT, AO HAS AC CEPTED THE GENUINENESS OF THE LOAN IN RESPECT OF THE CREDITORS EXCEPT SMT. LATA RAWAT. THIS ADDITION HAS BEEN DELETED BY THE LD. CI T(A) AFTER SATISFYING HIMSELF WITH THE QUALITY OF EVIDENCE PRO DUCED BY THE ASSESSEE. ACCORDING TO THE LD. CIT(A) ASSESSEE HAS FILED 42 CONFIRMATION BY WAY OF AN AFFIDAVIT. HE HAS DISCLOS ED NAME AND ADDRESS ALOGNWITH HER PERMANENT ACCOUNT NUMBER WITH THE INCOME TAX DEPARTMENT. HE HAS ALSO DISCLOSED THE JURISDICT IONAL WARD OF THE INCOME TAX AUTHORITY OVER THIS CREDITOR. AS FAR AS THE OTHER ENTRIES ARE CONCERNED, LD. CIT(A) HAS NOTICED THE SATISFACTION OF THE AO OVER THE EXPLANATION OF ASSESSEE ON PAGES 10,12 TO 24. WE HA VE GONE THROUGH ALL THESE COMMENTS OF THE AO AND FIND THAT FACTS AND CIRCUMSTANCES ARE SIMILAR TO THAT OF ASSTT. YEAR 2 002-03. NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT( A). LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION OF ` 1,79,95,000/-. ONCE THE LOANS ARE TREATED AS GENUINE, THE PAYMENT OF INTEREST ON SUCH LOAN IS TO BE ALLOWED. THEREFORE, GROUND NO. 1 TO 6 ARE REJECTED. GROUND NO. 7 50. IN THIS GROUND OF APPEAL GRIEVANCE OF THE REVEN UE IS THAT LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 88,82,390/-. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAS DEVELOPED T WO PROPERTIES NAMELY SELAQUI LAND AND SAHASTRADHARA ROAD LAND. HE HAS INCURRED A SUM OF ` 88,82,390/-. THE AO HAS DISALLOWED THIS DEVELOPMEN T EXPENSES ON THE GROUND THAT LAND WAS SOLD TO M/S. H BL POWER SYSTEM LTD. FOR THE CONSIDERATION OF RS. 66,68,000 /-. ACCORDING TO THE 43 AO, NO PRUDENT BUSINESSMAN WOULD INCUR THIS MUCH OF AMOUNT FOR DEVELOPING THE LAND WHICH COULD BE SOLD AT A LOWER RATE. IN THE APPELLATE PROCEEDING, IT WAS EXPLAINED BY THE ASSES SEE THAT SELAQUI LAND WAS SOLD FOR ` 66.68 LAC AND A SUM OF ` 49,37,390/- WAS ONLY INCURRED ON THIS PROJECT. REST OF THE AMOUNT WAS IN CURRED FOR DEVELOPMENT OF SAHASTRADHARA LAND WHICH WAS RETAINE D AS STOCK IN TRADE. LD. CIT(A) VERIFIED THESE ASPECTS AND THEN D ELETED THE ADDITION. 51. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTA NCES AND THE ORDER OF LD. CIT(A), WE DO NOT FIND ANY REASON TO I NTERFERE IN IT. LD. AO HAS MADE THE DISALLOWANCE BY MISCONSTRUING THE FACTS. HE FAILED TO APPRECIATE THE TRUE FACTS AND CIRCUMSTANCES. HE TOOK THE TOTAL SALE CONSIDERATION AT ` 66.68 LACS. ON THIS LAND ONLY A SUM OF ` 49,27,390/- WAS INCURRED BY THE ASSESSEE. REST OF THE EXPENSES WAS INCURRED ON OTHER LAND WHICH WAS HELD AS STOCK IN TRADE. THE RE VENUE FAILED TO BRING ANY EVIDENCE TO OUR NOTICE WHICH CAN PERSUADE US TO TAKE DIFFERENT OPINION THAN THE ONE TAKEN BY THE LD. CIT (A) ON THIS ISSUE. GROUND NO. 8 52. IN THIS GROUND OF APPEAL, GRIEVANCE OF REVENUE IS THAT LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 5,50,000/-. THE BRIEF FACTS OF THE 44 CASE ARE THAT ASSESSEE IS A PARTNER IN THE FIRM M/S PRATYUSH AND ASSOCIATES. HE HAS INTRODUCED CASH CAPITAL OF ` 5,50,000/- ON THREE OCCASIONS NAMELY, ` 1,70,000/- ON 29.8.2006, ` 1,50,000/- ON 2 ND SEPTEMBER 2006 AND ` 2,30,000/- ON 3 RD OCTOBER 2006. THE AO MADE THE ADDITION ON THE GROUND THAT ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF THE FUNDS. BEFORE LD. CIT(A), IT WAS CONT ENDED THAT ASSESSEE HAS WITHDRAWN A SUM OF ` 8,85,000/- FROM THE FIRM IN THE MONTH OF JUNE ITSELF. HE HAS RE DEPOSITED ` 5,50,000/- IN THE MONTH OF AUGUST, SEPTEMBER AND OCTOBER OUT OF THE CASH WITHD RAW IN JUNE. LD. CIT(A) ON VERIFICATION OF THESE FACTS, WAS SATI SFIED WITH THE EXPLANATION OF ASSESSEE AND DELETED THE ADDITION. W E DO NOT FIND ANY ERROR IN THE FINDING OF LD. CIT(A). THE ASSESSEE HA S EXPLAINED THE SOURCE OF FUNDS AVAILABLE WITH HIM. GROUND NO. 9 53. IN THIS GROUND OF APPEAL, GRIEVANCE OF THE REVE NUE IS THAT LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 10,40,200/-. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF SEA RCH, A DIARY AND CERTAIN LOOSE PAPERS WERE FOUND AT THE RESIDENCE OF ASSESSEE WHICH WAS INVENTORIED AS ANNEXURE LP-1 AND ANNEXURE D1. O N PAGE NO. 8 45 OF ANNEXURE LP-1, AN ENTRY WAS NOTICED BY THE AO WH EREIN A PAYMENT OF ` 8 LAC IN CASH TO ONE SHRI PINTOO HAS BEEN RECORDED . THE ASSESSEE WAS CONFRONTED WITH THIS ENTRY DURING THE COURSE OF SEARCH VIDE QUESTION NO. 25 AND 26. IN RESPONSE TO THESE Q UESTIONS, IT WAS CONTENDED BY THE ASSESSEE THAT ENTRY MIGHT NOT HAVE BEEN RECORDED IN THE BOOKS. HE WILL VERIFY. SIMILARLY, IN THE DI ARY INVENTORIED AS D1, TWO ENTRIES WERE RECORDED ON 9 TH MARCH, 2007 AND 11 TH MARCH, 2007 WHEREBY ASSESSES HAS PAID A SUM OF ` 1,32,000/- AND ` 1,08,200/- IN CASH TO SHRI PINTOO. THE AO HAS MADE THE ADDITION O F ` 10,40,200/-. LD. CIT(A) HAS DELETED THIS ADDITION ON THE GROUND THAT WHEN ASSESSEE WAS CONFRONTED WITH THE ENTRIES BOOKS OF A CCOUNTS WERE NOT BEFORE HIM. BOOKS WERE LYING WITH THIS ACCOUNTANT. HE DISCLOSED HIS MOBILE NUMBER. AT THE END OF THE YEAR, ASSESSEE HAS RECEIVED A SUM OF ` 8 LAC FROM SHRI PINTOO AND THE BALANCE REMAINED AT ` 2,40,200/-. THUS ACCORDING TO THE LD. CIT(A) AGAINST THE PAYMEN T OF ` 10,40,200/- , A SUM OF ` 8 LAC HAS ALREADY BEEN RECEIVED BY THE ASSESSEE AN D HAS BEEN ACCOUNTED IN THE BOOKS. THERE CANNOT BE ANY AD DITION ON ACCOUNT OF UNACCOUNTED TRANSACTION. HE DELETED ` 8 LAC AND CONFIRMED THE ADDITION OF ` 2,40,200/-. 46 54. WITH THE ASSISTANCE OF LD. REPRESENTATIVE, WE H AVE GONE THROUGH THE RECORD CAREFULLY. IN THE DIARY, A PAYME NT OF ` 8 LAC WAS DISCLOSED TO SHRI PINTOO. ASSESSEE HAS RECEIVED BAC K THIS AMOUNT FROM SHRI PINTOO AND ACCOUNTED IT IN THE BOOKS. MEA NING THEREBY THE ENTRIES TO THE EXTENT OF ` 8 LAC HAS BEEN SQUARED UP LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION. 55. IN THE NEXT GROUND OF APPEAL, GRIEVANCE OF THE REVENUE IS THAT LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` 18 LAC. THE BRIEF FACTS OF THE CASE ARE THAT DIARY INVENTORIED AS AN NEXURE D 3 WAS FOUND FROM THE RESIDENCE OF ASSESSEE. AT PAGE NO. 1 OF THE DIARY, AN ENTRY WAS NOTICED BY THE AO WHEREBY IT IS DISCLOSED THAT ASSESSEE HAS PURCHASED THE PROPERTY AT GMS ROAD FOR WHICH HE PAID ` 37 LACS THROUGH CHEQUE AND ` 18 LACS WAS CASH. THE AO HAS MADE THE ADDITION OF ` 18 LACS ON THE GROUND THAT THIS MUCH AMOUNT WAS PA ID OUT OF BOOKS. THE AO HAS OBSERVED IN THE ASSTT. ORD ER THAT INITIALLY ASSESSEE HAS TOOK THE PLEA THAT DEAL WAS MADE TO PU RCHASE THE PROPERTY AT ` 55 LACS BUT LATER ON THE ACTUAL PURCHASE WAS MADE FOR ` 47 44 LACS. BEFORE LD. CIT(A), IT WAS CONTENDED BY THE ASSESSEE THAT THERE IS NO EVIDENCE ON THE RECORD WHICH CAN SUGGES T THAT A SUM OF ` 18 LAC WAS PAID IN CASH. LD. CIT(A) HAS DELETED THE ADDITION BY OBSERVING AS UNDER :- I HAVE CONSIDERED THE AOS ORDER, BOOKS OF ACCOUNT S OF ASSESSEE AND SUBMISSIONS OF ASSESSEE. IT IS FOUND THAT AS PER PU RCHASE DEED, SUBMITTED BY ASSESSEE, THERE WAS NO MENTION OF RS. 18,00,000/ - IN THE SAID PURCHASE DEED. THE TRANSACTION OF ASSESSEE IS SUPPO RTED BY A REGISTERED PURCHASE DEED, WHICH IN ITSELF IS A LEGAL DOCUMENT. THE GROUND OF ADDITION MADE BY AO IS ONLY THAT RS. 18,00,000/- WERE FOUND WRITTEN AGAINST THE NAME OF SELLER IN ONE OF THE DIARIES SEIZED DURING THE SEARCH. HOWEVER, THERE IS NO OTHER DOCUMENT OR EVIDENCE AVAILABLE IN THE HANDS OF THE AO, WHICH COULD ESTABLISH THAT SUCH TRANSACTION OF MAKI NG PAYMENT OF RS. 18,00,000/- WAS MADE BY ASSESSEE. EVEN THE BOOKS OF ACCOUNTS OF ASSESSEE DO NOT ESTABLISH THE SAME. THEREFORE, ADDI TIONS MERELY ON THE BASIS OF WRITING ON LOOSE DIARIES DO NOT FIND ANY M ERIT. REFERENCE IS ALSO TAKEN OF THE JUDGMENT LAID DOWN IN THE CASE OF CIT V. D.K. GUPTA 2009 308 ITR 230 (DEL.) WHEREIN IT WAS HELD THAT SEARCH PAR TY DISCOVER SOME NOTINGS AND JOTTINGS IN THE DIARIES AND DOCUMENTS S EIZED. ADDITION WERE MADE RAISING PRESUMPTION U/S 132(4)(A) ABOUT THE NO TINGS. ADDITIONS WERE DELETED BY CIT APPEALS AND ITAT. HELD THAT TRIBUNAL HAD RECORDED A FINDING THAT THERE WAS NO CORROBORATIVE OR DIRECT E VIDENCE TO PRESUME THAT NOTINGS AND JOTTINGS HAD MATERIALIZED INTO TRANSACT IONS GIVEN RISE TO INCOME NOT DISCLOSED IN THE BOOKS. THERE WAS NO PERVERSITY IN TRIBUNALS FINDINGS. IN THE LIGHT OF THE ABOVE JUDICIAL GUIDELINES AND F ACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITION OF RS. 18,0 0,0000/- IS DELETED. 56. WITH THE ASSISTANCE OF LD. REPRESENTATIVE, WE H AVE GONE THROUGH THE RECORD CAREFULLY. IN PARAGRAPH NO. 13.1 OF THE IMPUGNED ORDER, LD. CIT(A) HAS REPRODUCED THE FINDING OF THE AO ON THIS ISSUE. ACCORDING TO THE AO, A DIARY WAS FOUND AND SEIZED V IDE ANNEXURE D- 3 FROM THE RESIDENCE OF THE ASSESSEE. IN THIS DIARY , CERTAIN TRANSACTIONS WERE WRITTEN. ONE OF THE TRANSACTIONS RELATES TO PURCHASE 48 OF PROPERTY AT GMS ROAD. AGAINST THIS PURCHASE OF P ROPERTY, IT HAS BEEN SHOWN THAT ` 18 LACS IS PAID IN CASH AND ` 37 LACS THROUGH CHEQUE ON 26 TH FEBRUARY, 2007. THE ASSESSEE WAS CONFRONTED WITH THESE ENTRIES AT THE TIME OF SEARCH VIDE QUESTION N O. 15. THE ASSESSEE HAS ACCEPTED THAT HE HAS PURCHASED A PROPE RTY WITH MR. KAILASH GULATI ALIAS PINTOO. THE PAYMENTS WERE MADE THROUGH CHEQUE AS WELL AS CASH. THE AO ASKED THE ASSESSEE T O EXPLAIN AS TO WHY CASH INVOLVED OF AT ` 18 LAC SHOULD NOT BE TREATED AS HIS UNEXPLAINED INVESTMENT. THE ASSESSEE IN RESPONSE TO THIS QUERY SUBMITTED THAT INITIALLY THE DEAL WAS MADE TO PURCH ASE THE PROPERTY FOR ` 55 LACS. BUT LATER ON, THE ACTUAL PURCHASE WAS MAD E FOR ` 44 LACS. THERE WAS A FALL IN THE PRICE IN THAT AREA AND THER EFORE, PURCHASE PRICE WAS REDUCED. THE AO HAS NOT MENTIONED ANY OTHER CIR CUMSTANCE IN HIS FINDING. HE OBSERVED THAT ASSESSEE FAILED TO PR OVE THAT ABOVE CASH PAYMENT OF ` 18 LAC WAS NOT MADE BY HIM OUTSIDE BOOKS OF ACCOUNTS. TO OUR MIND, IT IS THE AO, FIRST WHO HAS TO PROVE THAT ` 18 LAC WAS PAID IN CASH BY THE ASSESSEE OVER AND ABOVE. TH E PURCHASE PRICE MENTIONED IN THE REGISTER DEED. THE ASSESSEE IS NOT SUPPOSED TO PROVE NEGATIVE THAT NO CASH WAS PAID. HE HAS BEE N ALLEGING FROM 49 THE VERY BEGINNING THAT NO CASH WAS PAID BY HIM. TH E AO COULD HAVE RECORDED THE STATEMENT OF VENDOR . HE SHOULD HAVE V ERIFIED FROM SHRI KAILASH GULATI I.E. ANY CASH WAS PAID, OR NOT, IF P AID, IT WAS SOLELY PAID BY THE ASSESSEE ETC. THE ASSESSEE HAS EXPLAINED THE POSITION ABOUT THE ENTRY AT THE TIME OF SEARCH ITSELF. HE HAS EXPL AINED ABOUT THE CERTAIN OTHER ENTRIES IN THE DIARY AND SUBMITTED TH AT THERE WERE ROUGH CALCULATIONS ALSO. THE AO INSTEAD OF INVESTIGATING THE ISSUE SIMPLY MADE THE ADDITION. LD. FIRST APPELLATE AUTHORITY H AS CONSIDERED ALL THESE ASPECTS AND DELETED THE ADDITION. AFTER TAKIN G INTO CONSIDERATION THE FINDING OF LD. CIT(A) EXTRACTED SUPRA, WE DO NO T FIND ANY MERIT IN THE GROUND OF APPEAL RAISED BY THE REVENUE IT IS RE JECTED. 57. IN VIEW OF THE DISCUSSION, APPEAL OF THE REVEN UE IS DISMISSED. CO NO. 67/DE/2011 58. ASSESSEE DID NOT PRESS THE CROSS OBJECTION, HEN CE IT IS REJECTED. ITA NO.828/DEL/2011: 59. GROUND NOS. 2 TO 5 ARE GENERAL GROUND OF APPEAL AND IN A WAY, THESE ARE THE ARGUMENTS IN SUPPORT OF THE GROUND NUMBERS 1 & 6. IN GROUND NO.1, GRIEVANCE OF THE REVENUE IS THAT LEARNED CIT(APPEALS ) HAS ERRED IN DELETING 50 THE ADDITION OF RS.1,03,02,000 WHICH WAS ADDED BY TH E ASSESSING OFFICER WITH THE AID OF SECTION 68 OF THE ACT. THIS GROUND I S INTER-CONNECTED WITH GROUND NO.6 WHEREIN IT IS PLEADED THAT THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.1,13,131. THIS AMOUNT WA S DISALLOWED BY THE ASSESSING OFFICER OUT OF INTEREST PAYMENT TOWARDS U NSECURED LOANS. THERE IS NO DISPARITY ON FACTS BETWEEN THIS ASSESSMENT YEAR AND OTHER ASSESSMENT YEARS. THE ASSESSEE HAS FILED HIS RETURN OF INCOME O N 14.10.2009 DECLARING AN INCOME OF RS.1,26,60,118. THIS RETURN WAS FILED IN RESPONSE TO THE NOTICE UNDER SEC. 142(1) OF THE ACT. AN ASSESSMENT ORDER HA S BEEN PASSED UNDER SEC. 143(3) ON 29.12.2009. ASSESSING OFFICER HAS DETERMINE D THE TAXABLE INCOME OF THE ASSESSEE AT RS.3,11,72,657. HE HAS MADE THE FO LLOWING ADDITIONS: S. NO. PARTICULARS AMOUNT 1 DISALLOWANCE OF INTEREST 1,13,131 2 INCOME SURRENDERED BY THE ASSESSEE AS DISCUSSED IN THE BODY OF ORDER 1,00,00,000 3 UNEXPLAINED CAS H FOUND AT THE TIME OF SEARCH 1,60,000 4 UNEXPLAINED JEWELLERY 6,59,900 51 FOUND AT THE TIME OF SEARCH 5 UNEXPLAINED CASH PAID TO SH. IP ARORA AS DISCUSSED ABOVE 47,00,000 6 ADDITION U/S 68 ON A/C OF UNEXPLAINED LOANS AS DISCUSSED ABOVE 1,03,00,000 7 UNEXPLAINED CASH PAYMENT MADE TO MR. MEHTA A/C 1,47,000 8 UNEXPLAINED CASH CREDIT AS MENTIONED ON PAGE 2 OF DIARY D-1 8,00,000 9 UNEXPLAINED RECEIPT FROM MR. SEMWAL 16,00,000 10 UNEXPLAINED CASH PAYMENT TO PINTOO 30,000 TOTAL 2,85,12 ,931 60. ON APPEAL, LEARNED CIT(APPEALS) HAS PARTLY ALLOWE D THE APPEAL. HE HAS DELETED ALMOST ALL THE ADDITIONS EXCEPT AN ADDI TION OF RS.8 LACS WHICH IS MENTIONED AT SR. NO.8. AS FAR AS GROUND NOS. 1 TO 6 ARE CONCERNED, THE DETAILS OF UNSECURED LOANS HAVE BEEN NOTICED BY THE LEARNED CIT(APPEALS) 52 FROM THE FINDINGS OF THE ASSESSING OFFICER ON PAGES 4 AND 5 OF THE IMPUGNED ORDER WHICH READ AS UNDER: THE DETAILS OF PARTIES FROM WHOM UNSECURED LOANS HA VE BEEN CLAIMED BY THE ASSESSEE TO HAVE BEEN RECEIVED DURING THE YEAR, WHERE ONLY CONFIRMATIONS HAVE BEEN FILED AND NO OTHER SUPPORTI NG DOCUMENTARY EVIDENCES LIKE BANK STATEMENTS HAVE BEEN FILED TO P ROVE THE CREDITWORTHINESS OF THE CLAIMED LOAN CREDITORS ARE AS UNDER: S. NO. NAME AMT OF LOAN CLAIMED TO HAVE BEEN TAKEN DURING THE YEAR DETAILS OF EVIDENCES/DOCUMENTS NOT FILED. 1 VISHAL AGGARWAL 49,52,000 BANK STATEMENT AND COPY OF RETURN NOT FILED. 2 N.D. BAREJA 2,50,000 BANK STATEMENT AND COPY OF RETURN NOT FILED. 3 V.P. MONGA 2,50,000 BANK STATEMENT AND COP Y OF RETURN NOT FILED. 4 S.K. SUDAN 13,50,000 BANK STATEMENT NOT FILED. 5 D.K. AGGARWAL 10,00,000 BANK STATEMENT AND COPY OF RETURN NOT FILED. TOTAL 78,02,000 S.NO. NAME AMT OF LOAN CLAIMED TO DETAILS OF EVIDENCES/DOCUMENTS 53 HAVE BEEN TAKEN DURING THE YEAR NOT FILED. 1 PRAGATI ASSOCIATES 25,00,000 CONFIRMATION, BANK STATEMENT AND COPY OF RETURN NOT FILED. THIS AMOUNT HAS BEEN WORKED OUT AFTER ADJUSTING LOAN OF RS.20 LACS CLAIMED BY THE ASSESSEE IN A.Y. 2006- 07. 61. WE FIND THAT IN THE REMAND REPORT, ASSESSING OFF ICER HAS ACCEPTED THE GENUINENESS OF THE LOAN AND ALL OTHER INGREDIENTS R EQUIRED TO BE FULFILLED BY THE ASSESSEE UNDER SECTION 68 OF THE ACT. LEARNED C IT(APPEALS) HAS REPRODUCED THE REMAND REPORT OF THE ASSESSING OFFIC ER. REMAND REPORT IN CONNECTION WITH EACH CREDITOR HAS BEEN REPRODUCED O N PAGE NOS. 9 TO 14 AND 16 OF THE IMPUGNED ORDER. TAKING INTO CONSIDERAT ION THE FINDINGS OF THE LEARNED CIT(APPEALS) AND THE SATISFACTION OF THE ASSE SSING OFFICER, WE ARE OF THE VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LEARNED CIT(APPEALS). THE FACTS IN CONNECTION WITH THE UNSECUR ED LOANS ARE SIMILAR TO 54 ASSESSMENT YEAR 2002-03 DISCUSSED BY US IN THE EARL IEST PARAGRAPHS OF THIS ORDER. ONCE UNSECURED LOANS ARE TREATED TO BE GENUI NE THEN INTEREST PAYMENT ON SUCH LOAN IS TO BE ALLOWED. HENCE, GROUND NOS. 1 & 6 ARE DE VOID OF ANY MERIT, THEY ARE REJECTED. WHEREAS GROUND NOS. 2 TO 5 ARE CONCERNED, THEY ARE JUST ARGUMENTS IN SUPPORT OF THESE GROUNDS. THEY ARE ALSO REJECTED. 62. IN GROUND NO.7, LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.1,60,510. THE BRIEF FACTS OF THE CASE A RE THAT A CASH OF RS.1,60,510 WAS FOUND AT THE TIME OF THE SEARCH. THE E XPLANATION OF THE ASSESSEE IS THAT IT IS THE SAVINGS OF THE WITHDRAWA LS FROM THE MONTH OF JANUARY AND FEBRUARY. THE ASSESSEE HAS SUBMITTED THE DETAILS OF THE BANK STATEMENT PERTAINING TO HIS WIFE AND HIS BUSINESS ASSOCIATES. ASSESSING OFFICER DISBELIEVED THE STORY ON THE GROUND THAT POSSIBILIT Y OF AVAILABILITY OF CASH FROM THE WITHDRAWALS MADE IN THE MONTH OF JANUARY IS BLE AK. HE ACCORDINGLY MADE THE ADDITION. LEARNED CIT(APPEALS) HAS DELETED T HE ADDITION ON THE GROUND THAT IN THE CASE OF ASSESSEES WIFE A SIMILA R QUERY WAS RAISED BY THE ASSESSING OFFICER AND SHE MADE THE SIMILAR EXPLANAT ION. HER EXPLANATION WAS ACCEPTED. THE SEARCH WAS CONDUCTED ON 15.2.2008 AND W ITHDRAWALS WERE SHOWN IN THE MONTH OF JANUARY AS WELL AS FEBRUARY 2 008. TO OUR MIND, THERE 55 IS NO SUBSTANTIAL TIME GAP BETWEEN THE WITHDRAWALS AND THE AVAILABILITY OF THE CASH. LEARNED CIT(APPEALS) HAS RIGHTLY ACCEPTED THE E XPLANATION OF THE ASSESSEE AND DELETED THE ADDITION. THE REASONS ASSIG NED BY THE ASSESSING OFFICER ARE BASED ON PROBABILITY BUT CONCLUSIVELY I T CANNOT BE ASCERTAINED THAT CASH WITHDRAWALS BY THE ASSESSEE AND HIS WIFE IN THE MONTH OF JANUARY WAS SPENT ON HOUSEHOLD OR ACQUISITION OF ANY ASSETS . IN VIEW OF THE ABOVE DISCUSSION, THIS GROUND OF APPEAL IS REJECTED. 63. IN GROUND NO.8, GRIEVANCE OF THE REVENUE IS THA T LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.6,59,900. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF SEARCH, JEWELLERY HAV ING VALUE OF RS.6,59,900 WAS FOUND. THE EXPLANATION OF THE ASSESSEE IS THAT T HIS JEWELLERY BELONGS TO HIS WIFE. PART OF THE JEWELLERY WAS RECEIVED AT THE TIME OF THEIR MARRIAGE AND THE PART WAS ACQUIRED BY HER FROM HER SAVINGS. ASSE SSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. HE MADE THE ADDITION. ON APPEAL, LEARNED CIT(APPEALS) DELETED THE ADDITION ON THE GROUND THAT SIMILAR QUERY WAS ASKED FROM THE WIFE OF ASSESSEE IN HER RE GULAR PROCEEDINGS. THE DEPARTMENT WAS SATISFIED BY HER EXPLANATION AND NO ADDITION WAS MADE. LEARNED CIT(APPEALS) MADE A REFERENCE TO THE ORDER O F THE ITAT IN THE CASE OF 56 JAWAHARLAL JAIN REPORTED IN 48 TTJ 653 WHEREIN JEWELL ERY WAS ACCEPTED ON THE BASIS OF HUMAN PROBABILITY. THE QUANTITY OF JEWE LLERY WAS NOT ON A VERY HIGH SIDE. POSSIBILITY OF ACQUIRING THIS MUCH OF JE WELLERY AT THE TIME OF MARRIAGE AND OVER A TIME THEREAFTER FROM DAY TO DAY SAVINGS CANNOT BE RULED OUT. CONSIDERING THE FINDINGS OF THE LEARNED CIT(APPE ALS), WE DO NOT SEE ANY REASON TO INTERFERE IN IT. 64. IN THE NEXT GROUND OF APPEAL, GRIEVANCE OF THE REVENUE IS THAT LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS .47 LACS WHICH WAS ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISC LOSED PAYMENT TO IP ARORA. 65. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD PAID AN AMOUNT OF RS.1,85,00,000 TO ONE SHRI I.P. ARORA. A SUM OF RS.61 LACS WAS PAID THROUGH ACCOUNT PAYEE CHEQUE AND IT WAS REFLECTED IN THE BO OKS OF THE ASSESSEE. A SUM OF RS.47 LACS WAS PAID IN CASH BUT ACCOUNTED IN THE BOOKS OF THE ASSESSEE AND THE BALANCE RS. 77 LACS WAS PAID TO SH RI I.P. ARORA OUT OF BOOKS. THIS AMOUNT WAS SURRENDERED BY THE ASSESSEE A T THE TIME OF SEARCH AND IT FORMS PART OF TOTAL DISCLOSURE OF RS. 1 CRORE . THE ASSESSEE HAS FILED A 57 CIVIL SUIT AGAINST SHRI I.P. ARORA FOR RECOVERY OF R S.1.85 CRORES. ASSESSING OFFICER CONSTRUED THE SUBMISSIONS OF THE ASSESSEE A S IF RS. 47 LACS WAS PAID OVER AND ABOVE, THIS RS.1.85 CRORES. HE MADE THE ADD ITION OF RS. 47 LACS. THE ASSESSEE CONTENDED THAT IN THE CIVIL SUIT, AMOUNT H AS BEEN MENTIONED AT RS.1,85,00,000. HE HAS SUBMITTED THE BREAK UP OF THE AMOUNT WHICH HAS BEEN REPRODUCED BY THE LEARNED CIT(APPEALS) ON PAGE 24 OF THE IMPUGNED ORDER. LEARNED CIT(APPEALS) CALLED FOR A REMAND REPOR T FROM THE ASSESSING OFFICER AND THE REMAND REPORT HAS BEEN REPRODUCED I N PARAGRAPH NO.10.3 ON PAGE 26. IN THE REMAND REPORT, ASSESSING OFFICER WAS SATISFIED WITH THE EXPLANATION OF ASSESSEE AND SUBMITTED THAT EXPLANAT ION MADE BY HIM IS VERIFIABLE FROM THE BOOKS AND IT MAY BE CONSIDERED BY THE LEARNED CIT(APPEALS). ON THE BASIS OF THE BOOKS OF ACCOUNT AN D THE REMAND REPORT, LEARNED CIT(APPEALS) DELETED THE ADDITION. 66. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. THE ADDITION WAS MADE BY THE ASSESSING OFFICER ON MISCONSTRUCTION OF THE FACTS WHEN ASSESSEE HAS EXPL AINED THE TRUE FACTS AND SUBMITTED THE DOCUMENTARY EVIDENCE, A RECONCILIATIO N HAS BEEN ESTABLISHED AND LEARNED CIT(APPEALS) ARRIVED AT A CONCLUSION THAT ADDITION WAS MADE ON 58 MISINTERPRETATION OF THE DOCUMENTS. CONSIDERING THE DETAILS NOTICED BY THE LEARNED CIT(APPEALS) ON PAGES 24 TO 26, WE DO NOT SEE ANY REASON TO INTERFERE IN THIS ORDER. THIS GROUND OF APPEAL IS RE JECTED. 67. IN GROUND NO.10, THE GRIEVANCE OF THE REVENUE IS THAT LEARNED CIT(APPEALS) HAS ERRED IN ALLOWING THE SET OFF OF RS. 8 LACS FROM THE SURRENDERED AMOUNT. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. LEARNED CIT(APPEA LS) HAS CONFIRMED THE ADDITION OF RS. 8 LACS. HOWEVER, HE GRANTED A TELE- SCOPING AGAINST THE SURRENDERED AMOUNT OF RS. 1 CRORE. WE DO NOT SEE ANY MERIT IN THIS GROUND OF APPEAL RAISED BY THE REVENUE. THE ASSESSEE HAS MADE A DECLARATION OF RS. 1 CRORE IN ORDER TO EXPLAIN ALL UNACCOUNTED MONEY. LE ARNED CIT(APPEALS) HAS OBSERVED THAT OUT OF THE TOTAL AMOUNT, A SUM OF RS. 14,30,520 REMAINED UNUTILIZED HENCE TELESCOPING AGAINST THIS AMOUNT CA N BE GRANTED. CONSIDERING THE FINDINGS OF THE LEARNED CIT(APPEALS), THIS GROUND OF APPEAL IS REJECTED. 68. IN GROUND NO.11, GRIEVANCE OF THE REVENUE IS THAT LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS. 16 LACS. 59 69. THE BRIEF FACTS OF THE CASE ARE THAT A DIARY WAS FOUND WHEREIN ON PAGE NO.4, THREE ITEMS WERE MENTIONED. ASSESSEE HAS RECE IVED A SUM OF RS.10 LACS THROUGH ACCOUNT PAYEE CHEQUES FROM MANJU SEMWAL. HE HAS FURTHER WRITTEN RS. 9 LACS AND RS. 7 LACS TO BE RECEIVED IN CASH. A CCORDING TO THE ASSESSEE, AS PER AGREEMENT DATED 26.6.2006 MANJU SEMWAL WAS R EQUIRED TO PAY RS. 9 LACS BY JANUARY 2007 AND RS. 7 LACS BY MAY 2007. SHE HAS NOT PAID THESE AMOUNTS. ASSESSING OFFICER DID NOT ACCEPT THIS CONT ENTION ON THE GROUND THAT ASSESSEE HAS RECEIVED A SUM OF RS. 10 LACS THROUGH A CCOUNT PAYEE CHEQUES. HE MUST HAVE RECEIVED SUM OF RS. 16 LACS ALSO IN CAS H. LEARNED CIT(APPEALS) HAS DELETED THE ADDITION ON THE GROUND THAT EXCEPT AVAILABILITY OF THIS DIARY, NO OTHER CORROBORATIVE PEACE OF EVIDENCE WAS COLLEC TED BY THE ASSESSING OFFICER. 70. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. IN ASSESSMENT YEAR 2007-08, A N ADDITION OF RS.10 LAC WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNS ECURED LOANS APPEARING AGAINST THE NAME OF MRS. MANJU SEMWAL. THIS ADDITION WAS DELETED BY THE LEARNED CIT(APPEALS) ON THE GROUND THAT PAYMENT WAS M ADE THROUGH 60 ACCOUNT PAYEE CHEQUES BY MS. MANJU SEMWAL. SHE HAS SHOWN THE AMOUNT AS RECEIVABLE IN HER BOOKS OF ACCOUNT. IN OTHER WORD S, ASSESSEE WAS ABLE TO EXPLAIN THE AMOUNT OF ALLEGED UNSECURED LOAN. ASSES SING OFFICER HAS NEITHER RECORDED THE STATEMENT OF MS. MANJU SEMWAL WHICH CA N GIVEN AN INDICATION WHETHER SHE HAS PAID MONEY IN CASH OR NOT. HE HAS N OT VERIFIED THE OCCASION FOR WHICH THE MONEY WAS TO BE PAID, WHETHER MS. MAN JU SEMWAL HA PURCHASED ANY PROPERTY BECAUSE THE PAYMENT OF RS.10 LACS THROUGH ACCOUNT PAYEE CHEQUE IS CONCERNED, THAT HAS BEEN SHOWN BY T HE ASSESSEE AS UNSECURED LOAN FROM MS. SEMWAL. HIS STAND FOR THE D IARY IS THAT NO CASH PAYMENT WAS EVER RECEIVED. ASSESSING OFFICER IS EXP ECTING THAT ASSESSEE SHALL PROVE THE NON RECEIPT OF THE CASH PAYMENT. THI S EXPECTATION IS HIGHLY IMPROBABLE. LEARNED CIT(APPEALS) HAS CONSIDERED ALL T HESE ASPECTS AND THEN DELETED THE ADDITION. WE DO NOT FIND ANY MERIT IN T HE GROUND OF APPEAL RAISED BY THE REVENUE. IT IS REJECTED. C.O. NO. 68/DEL/2011: 71. ASSESSEE DID NOT PRESS THE CROSS-OBJECTION, HENC E IT IS REJECTED. 72. IN THE RESULT, ALL THE APPEALS AND THE CROSS-OBJ ECTIONS ARE DISMISSED. 61 DECISION PRONOUNCED IN THE OPEN COURT ON 29.04.2011 (G.E. VEERABHADRAPPA ) ( RAJPAL YADAV ) VICE-PRESIDENT JUDICIAL MEMBER DATED: 29/04/2011 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR