DCIT, Mysore V. Dr. H. Krishna, Mandya

ITA 1011/BANG/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7000 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-07-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 04-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRISCILLA SINGST
• Assessee Lawyers: D DEVARAJ
• Keywords: Unexplained cash credit; Capital asset; Gift; Business expenditure; Additional evidence; Cost of acquisition
• Section: 133A; 153A; 133(6); 68

Judgement Text

ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 1 OF 37 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE C BENCH, BANGALORE BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NOS.1008 TO 1012/BANG/2011 (ASSESSMENT YEARS: 2003-04 TO 2006-07 & 2009-10) DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, MYSORE VS. DR. H. KRISHNA PROP. OF M/S. KAVERI NURSING HOME, ASHOKNAGAR, MANDYA 571401 PAN: AMCPK 9963 C (APPELLANT) (RESPONDENT) DEPARTMENT BY: MS.PRISCILLA SINGST, CIT (DR) ASSESSEE BY: SHRI D. DEVARAJ, CA DATE OF HEARING: 30/07/2014 DATE OF PRONOUNCEMENT: 08/08/2014 O R D E R PER RAJPAL YADAV, J.M. THE PRESENT FIVE APPEALS ARE DIRECTED AT THE INSTA NCE OF THE REVENUE AGAINST THE COMMON ORDER OF THE LEARNED CIT (A) DATED 22.08.2011 PASSED FOR ASSESSMENT YEARS 2003-04 TO 2 006-07 AND 2009-10. SINCE COMMON ISSUES ARE INVOLVED, THER EFORE, WE HEARD ALL THE APPEALS TOGETHER AND DEEM IT APPROPRI ATE TO DISPOSE OF THEM BY THIS COMMON ORDER. 2. THE GROUNDS OF APPEAL FILED BY THE REVENUE ORIGI NALLY WERE ARGUMENTATIVE AND NOT IN CONSONANCE WITH THE RULE 8 OF THE ITAT RULES. THESE GROUNDS HAVE BEEN REVISED. ON PERUSAL OF THE GROUNDS IN ALL THE YEARS, WE FIND THAT THE FIRST TH REE GROUNDS OF ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 2 OF 37 APPEAL ARE COMMON. IN THESE GROUNDS, THE REVENUE HA S PLEADED THAT THE LEARNED CIT (A) HAS ENTERTAINED ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A AND FAILED TO GIVE AN OPPORTU NITY OF REPRESENTATION TO THE ASSESSING OFFICER. IT ALSO PL EADED THAT THE LEARNED CIT (A) HAS ERRED IN NOT EXAMINING THE EVID ENCE AVAILABLE ON RECORD. BEFORE ADVERTING TO THE SPECIFIC GRIEVAN CE OF THE REVENUE IN EACH ASSESSMENT YEAR, FIRST WE TAKE THES E LEGAL GROUNDS OF APPEAL RAISED BY THE REVENUE. ITA NO.1008/BANG/2011 ASSESSMENT YEAR 2003-04 3. THOUGH THE FACTS ON ALL VITAL POINTS ARE COMMON IN ALL THE ASSESSMENT YEARS, BUT FOR THE FACILITATION OF REFER ENCE, WE ARE TAKING UP THE FACTS MAINLY FROM ASSESSMENT YEAR 200 3-04. THE BRIEF FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND A GYNAECOLOGIST BY PROFESSION. HE IS RUNNING A NURSIN G HOME AT MANDYA IN THE NAME AND STYLE OF M/S KAVERI NURSING HOME. ON 12.04.2008, THE ASSESSEE WAS INTERCEPTED BY THE POL ICE POSSESSING A SUM OF RS.3,21,50,000/- IN HIS CAR. HE WAS UNABLE TO SPECIFICALLY EXPLAIN THE SOURCE OF CASH. THUS IT WAS SEIZED BY THE POLICE AUTHORITIES IN MANDYA AND AN INFORMATION WAS SENT TO THE I.T.DEPARTMENT. THE CASH SO SEIZED BY THE POLCI E WAS REQUISITIONED U/S 132A ON 16.04.2008. IN THIS WAY, A SHOW CAUSE NOTICE U/S 153A WAS ISSUED UPON THE ASSESSEE AND HE WAS DIRECTED TO FILE RETURNS OF INCOME FOR ALL THESE AS SESSMENT YEARS. IN RESPONSE TO THE NOTICE, THE ASSESSEE HAS FILED H IS RETURNS OF INCOME ON 23.04.2009. WITH REGARD TO ASSESSMENT YEA R 2003-04 IT WAS SUBMITTED BY THE ASSESSEE THAT HE HAS DISCLO SED AN INCOME OF RS.5,67,430/- IN A RETURN FILED ON 24.11. 2003 U/S ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 3 OF 37 139(1) OF THE I.T. ACT. THE SAME AMOUNT HAS BEEN DI SCLOSED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A. TH E LEARNED ASSESSING OFFICER HAD ISSUED NOTICE U/S 143(2) ON 1 4.09.2009. HE PASSED THE ASSESSMENT ORDER ON 28.12.2010 AND DE TERMINED THE TAXABLE INCOME OF THE ASSESSEE IN ASSESSMENT YE AR 2003-04 AT RS.34,67,430/-. THE LEARNED ASSESSING OFFICER HA S MADE THE FOLLOWING ADDITIONS TO THE INCOME OF THE ASSESSEE: A) GIFT FROM DR.PRABHAKAR SHETTY RS.18,00,000 B) GIFT FROM SRI JAYESH KUMAR RS. 3,00,000 C) GIFT FROM SRI SHANKAR LAL RS. 3,00,000 D) ADVANCE RECD FROM SRI H B RS. 5,00,000 KRISHNAPPA TOTAL = RS.29,00,000 INCOME DECLARED RS. 5,67,430 RS.34,67,430 =========== 4. BEFORE THE LEARNED FIRST APPELLATE AUTHORITY, IT WAS CONTENDED BY THE ASSESSEE THAT A SUM OF RS.18.00 LA KHS WAS GIVEN BY DR. PRABHAKAR SHETTY VIDE CHEQUE NO.495971 OF VIJAYA BANK DATED 31.10.2002. ACCORDING TO THE ASSESSEE DR . PRABHAKAR SHETTY IS A RENOWNED CARDIOLOGIST OF INTERNATIONAL REPUTE AND WAS WORKING IN U.S. HE HAD NRE ACCOUNT BEARING NO.5 6. OUT OF THAT ACCOUNT, THIS AMOUNT WAS GIVEN TO THE ASSESSEE AS A GIFT. HE COULD NOT PRODUCE DR. SHETTY BEFORE THE ASSESSING O FFICER, BUT NOW DR.SHETTY CAME BACK FROM U.S. AND PRESENTLY WOR KING AS INTERVENTIONAL CARDIOLOGIST, CHIEF OF CARDIOLOGY DE PARTMENT IN COLUMBIA ASIA HOSPITAL, BANGALORE. THEREFORE, A CON FIRMATION FROM DR.SHETTY WAS SOUGHT TO BE PLACED ON RECORD BY WAY OF AN ADDITIONAL EVIDENCE. THE APPLICATION UNDER RULE 46A WAS MOVED. ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 4 OF 37 DR. SHETTY APPEARED BEFORE THE LEARNED CIT (A) ALON G WITH THE ASSESSEE AND CONFIRMED THE GIFT MADE BY HIM TO THE ASSESSEE. 5. THE LEARNED CIT (A) CALLED FOR A REMAND REPORT F ROM THE ASSESSING OFFICER AND THEREAFTER ENTERTAINED THE AD DITIONAL EVIDENCE. HE ACCORDINGLY DELETED THE ADDITION OF RS .18.00 LAKHS. 6. THE LEARNED DR WHILE IMPUGNING THE ORDER OF THE CIT (A) CONTENDED THAT THE LEARNED FIRST APPELLATE AUTHORIT Y HAS FAILED TO FOLLOW THE PROCEDURE PROVIDE IN RULE 46A WHILE ENTE RTAINING THE ADDITIONAL EVIDENCE. SHE FURTHER CONTENDED THAT THE ASSESSING OFFICER HAS SPECIFICALLY SUBMITTED BEFORE THE CIT ( A) THAT A NOTICE FOR PERSONAL HEARING SHOULD BE GIVEN TO HIM. INSPTI E OF THAT THE LEARNED CIT (A) FAILED TO PROVIDE OPPORTUNITY OF HE ARING TO THE ASSESSING OFFICER. SHE CALLED FOR THE ORIGINAL FOLD ER OF CIT (A)S APPEAL AND PRODUCED IN THE COURT ROOM. SHE DEMONSTR ATED AS TO HOW THE LEARNED FIRST APPELLATE AUTHORITY FAILED TO COMPLY WITH THE REQUIREMENT OF SUB RULE-3 OF RULE 46A. 7. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE FIRST APPELLATE AUTHORITY HAS CA LLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER ON THE ADD ITIONAL EVIDENCE SOUGHT TO BE PRODUCED BY THE ASSESSEE. THE REFORE, THERE IS NO VIOLATION OF RULE 46A. THE ASSESSING OFFICER WAS GIVEN DUE OPPORTUNITY OF HEARING BEFORE ADMISSION OF ADDITION AL EVIDENCE AND ITS CONSIDERATION. HE RELIED UPON THE ORDER OF THE CIT (A). ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 5 OF 37 8. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AND GONE THROUGH THE RECORD CAREFULLY. RULE 46A HAS A DIRECT BEARING ON THE CONTROVERSY. THEREFORE, IT IS A SALUTARY UPON U S TO TAKE NOTE OF THIS RULE. IT READ AS UNDER: 46A. (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRO DUCE BEFORE THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)], ANY EVID ENCE, WHETHER ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENC E PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BE FORE THE [ASSESSING OFFICER], EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY : (A) WHERE THE [ASSESSING OFFICER] HAS REFUSED T O ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED ; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFIC IENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE [ASSESSING OFFICER] ; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFI CIENT CAUSE FROM PRODUCING BEFORE THE [ASSESSING OFFICER] ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL ; OR (D) WHERE THE [ASSESSING OFFICER] HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUN ITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO AN Y GROUND OF APPEAL. (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB-RULE (1 ) UNLESS THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)] RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. (3) THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)] SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-RULE (1) U NLESS THE [ASSESSING OFFICER] HAS BEEN ALLOWED A REASONAB LE OPPORTUNITY (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO C ROSS- EXAMINE THE WITNESS PRODUCED BY THE APPELLANT, OR (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT. ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 6 OF 37 (4) NOTHING CONTAINED IN THIS RULE SHALL AFFECT THE POWER OF THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CAS E MAY BE, THE COMMISSIONER (APPEALS)] TO DIRECT THE PRODU CTION OF ANY DOCUMENT, OR THE EXAMINATION OF ANY WITNESS, TO ENABLE HIM TO DISPOSE OF THE APPEAL, OR FOR ANY OTH ER SUBSTANTIAL CAUSE INCLUDING THE ENHANCEMENT OF THE ASSESSMENT OR PENALTY (WHETHER ON HIS OWN MOTION OR ON THE REQUEST OF THE [ASSESSING OFFICER]) UNDER CLAUS E (A) OF SUB-SECTION (1) OF SECTION 251 OR THE IMPOSITION OF PENALTY UNDER SECTION 271.] 9. ON A BARE PERUSAL OF THIS RULE WOULD SUGGEST THA T SUB RULE-1 PUTS AN EMBARGO UPON THE ASSESSEE TO SEEK PE RMISSION FOR PRODUCING ADDITIONAL EVIDENCE EITHER ORAL OR DO CUMENTARY. SUCH EVIDENCE CAN ONLY BE PERMITTED TO BE PRODUCED, IF CONDITIONS ENUMERATED IN SUB CLAUSE A TO D ARE AVAI LABLE. THE LEARNED COMMISSIONER HAS TO RECORD IN WRITING AS TO WHY HE HAD ADMITTED THE ADDITIONAL EVIDENCE. SUB RULE-3 CONTEM PLATES THAT IF ADDITIONAL EVIDENCE IS TAKEN ON RECORD, THEN IT CANNOT BE CONSIDERED ON MERIT, UNLESS AN OPPORTUNITY TO THE A SSESSING OFFICER IS BEING GIVEN TO COMMENT THE EVIDENCE OR D OCUMENTS OR TO CROSS EXAMINE THE WITNESS PRODUCED BY THE ASSESS EE. APART FROM THAT THE LEARNED ASSESSING OFFICER WOULD BE GI VEN AN OPPORTUNITY TO PRODUCE ANY EVIDENCE OR DOCUMENTS OR ANY EVIDENCE IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRO DUCED BY THE ASSESSEE. SUB RULE-4 IS AN EXCEPTION TO ALL OTHER S UB RULES. THIS RULE AUTHORIZES THE CIT (A) TO DIRECT ANY PART FOR PRODUCTION OF ANY DOCUMENTS OR EXAMINATION OF ANY WITNESS TO ENAB LE HIM TO DISPOSE OF THE APPEAL OR FOR ARRIVING AT A JUST CON CLUSION. 10. IN THE LIGHT OF THE ABOVE, LET US CONSIDER THE FACTS OF THE PRESENT CASE. ON PERUSAL OF THE REMAND REPORT AS WE LL AS THE ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 7 OF 37 ORDER OF THE CIT (A) AVAILABLE IN THE ORIGINAL FOLD ER INDICATE THAT THE ASSESSING OFFICER HAS RAISED OBJECTION FOR ADMI SSION OF ADDITIONAL EVIDENCE. THE LEARNED FIRST APPELLATE AU THORITY HAS OVER RULED THOSE OBJECTIONS AND ENTERTAINED THE ADD ITIONAL EVIDENCE. THE ORDER PASSED BY THE CIT (A) IS AVAILA BLE IN THE ORIGINAL RECORD OF CIT (A). WE HAVE GONE THROUGH TH IS ORDER, IT IS RUNNING INTO FEW LINES. THE LEARNED CIT (A) HAS JUS T OBSERVED, WHY THIS EVIDENCE IS BEING TAKEN ON THE RECORD. 11. TO OUR MIND BY THIS STAGE, THE LEARNED FIRST AP PELLATE AUTHORITY HAS FOLLOWED THE PROCEDURE PROVIDED IN SU B RULE 1 & 2. WE FIND THAT DR. SHETTY APPEARED BEFORE HIM AND CON FIRMED THE GIFT MADE BY HIM IN FAVOUR OF THE ASSESSEE. IT IS N OT THE CASE OF THE ASSESSEE THAT DR. SHETTY APPEARED BEFORE THE CI T (A) ON THE DIRECTION OF THE CIT (A) WHILE EXERCISING THE POWER S CONTEMPLATED IN SUB RULE-4. HE APPEARED ALONG WITH THE ASSESSEE AS A WITNESS OF THE ASSESSEE. THE LEARNED CIT (A) IN SUCH SITUAT ION OUGHT TO HAVE DIRECTED THE PARTIES TO APPEAR BEFORE THE ASSE SSING OFFICER FOR CROSS EXAMINATION. IF HIS STATEMENT WAS RECORDE D BY THE CIT (A) UNDER SUB RULE-4, THEN PROBABLY THERE COULD NOT BE ANY VIOLATION. HE APPEARED ALONG WITH THE ASSESSEE AS A WITNESS OF THE ASSESSEE, IN SUCH A SITUATION, THE REQUIREMENT OF SUB RULE-3 REMAINED UNFULFILLED. THE LEARNED CIT (A) HAS COMMI TTED AN ERROR WHILE CONSIDERING THE EVIDENCE ON MERIT WITHOUT GIV ING AN OPPORTUNITY OF HEARING TO THE ASSESSING OFFICER. TH EREFORE, TO THIS EXTEND GROUND NO.1 AND 2 OF THE REVENUES APPEAL IN ASSESSMENT YEAR 2003-04 IS ALLOWED. WE SET ASIDE TH E ORDER OF THE CIT (A) AND REMIT THIS ISSUE FOR RE-ADJUDICATIO N. THE LEARNED ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 8 OF 37 FIRST APPELLATE AUTHORITY SHALL CALL FOR A REMAND R EPORT FROM THE ASSESSING OFFICER ON MERIT. 12. NOW WE TAKE THE REVENUES OTHER GROUNDS OF APPE AL IN ASSESSMENT YEAR 2003-04. IN GROUND NO.4, THE REVENU E HAS PLEADED THAT THE CIT (A) HAS ERRED IN ACCEPTING THE EXPLANATION OF THE ASSESSEE WITH REGARD TO THE GIFT RECEIVED FROM DR. PRABHAKAR SHETTY. SINCE THIS ISSUE HAS BEEN SET ASIDE TO THE FILE OF THE CIT (A) FOR RE-ADJUDICATION, THEREFORE, NO SPECIFIC FIN DING IS REQUIRED TO BE RECORDED. 13. IN GROUND NO.5, THE REVENUE PLEADED THAT THE LE ARNED CIT (A) HAS ERRED IN ACCEPTING THE EXPLANATION OF THE A SSESSEE WITH REGARD TO THE GIFTS RECEIVED FROM MR. JAYESH KUMAR AND SHRI SHANKAR LAL. WE FIND FROM THE RECORD THAT THESE TWO PERSONS HAVE MADE A GIFT OF RS.3.00 LAKHS EACH. THE LEARNE D CIT (A) HAS CONFIRMED THE ADDITION. THEREFORE, THE GROUND IS MI SCONCEIVED, HENCE REJECTED. 14. THE LEARNED DR POINTED OUT THAT BASICALLY THE G RIEVANCE OF THE REVENUE IS THAT THESE AMOUNT OUGHT TO HAVE BEEN ASSESSED AS INCOME FROM OTHER SOURCES, INSTEAD OF PROFESSION AL RECEIPTS. WE FIND FROM THE RECORD THAT NOWHERE THE ASSESSING OFFICER HAS DEMONSTRATED THAT THE ASSESSEE HAS ANY OTHER SOURCE OF INCOME EXCEPT THE PROFESSIONAL INCOME. THE ALLEGED GIFT CO ULD BE INTRODUCED FROM UNEXPLAINED PROFESSIONAL INCOME. TH EREFORE, WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE LEAR NED DR RAISED DURING THE COURSE OF HEARING. ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 9 OF 37 15. IN GROUND NO.7, THE REVENUE HAS CONTENDED THAT THE LEARNED CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.5.00 LAKHS WHICH WAS RECEIVED FROM SHRI H.B. KRISHNAPPA. THE BRIEF FACTS OF THE CASE ARE THAT ON PERUSAL OF CAPITAL AC COUNT FILED BY THE ASSESSEE AS AN ANNEXURE ALONG WITH THE RETURN, A SUM OF RS.5.00 LAKHS HAS BEEN CREDITED AS ADVANCE RECEIVED TOWARDS SITE SALE. IT EMERGES OUT FROM THE RECORD THAT THE ASSES SEE HAD PURCHASED A SITE BEARING NO.876 IN MANDYA FROM THE MUDA. THE SITE HAS THE DIMENSION OF 50 X 80. IT WAS TO BE PUR CHASED BY SHRI H.B. KRISHNAPPA WHO HAS ADVANCED A SUM OF RS.5.00 L AKHS TO THE ASSESSEE. SOMEHOW THE ASSESSEE FAILED TO SEPARA TE HIS KHATHA, THE SALE COULD NOT BE MATERIALIZED. THE LEA RNED ASSESSING OFFICER HAS REJECTED THE CONTENTION OF TH E ASSESSEE ON THE GROUND THAT THE ASSESSEE COULD NOT PRODUCE EVEN BASIC DETAILS LIKE NAME OF THE PERSON, OR THE SITE FOR WH ICH HE HAD TAKEN THE ADVANCE, THE AMOUNT OF RS.5.00 LAKHS HAS BEEN DIRECTLY CREDITED TO THE CAPITAL ACCOUNT WITHOUT AN Y NAME OR DATE. THE ASSESSEE HAD GIVEN THE NAME AND BROUGHT THE PER SON ONLY AFTER ISSUANCE OF THE SHOW CAUSE NOTICE. THE ASSESS EE HAS NOT MENTIONED THE ADVANCE FOR SALE OF SITE, IN THE BOOK S OF ACCOUNTS. THEREFORE, HIS EXPLANATION IS NOT ACCEPTABLE. ON AP PEAL THE LEARNED CIT (A) RE-APPRECIATED THE CONTROVERSY AND DELETED THE ADDITION. 16. THE LEARNED DR RELIED UPON THE ORDER OF THE ASS ESSING OFFICER. SHE ALSO FILED WRITTEN SUBMISSION AND TOOK US THROUGH HER SUBMISSION. SHE EMPHASIZED THAT IF CIRCUMSTANTI AL EVIDENCE ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 10 OF 37 IS TAKEN INTO CONSIDERATION, THEN IT WOULD REVEAL T HAT THE ASSESSEE HAD INTRODUCED A STORY AFTER BEING CAUGHT BY THE ASSESSING OFFICER. ON THE OTHER HAND THE LEARNED CO UNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF THE C IT (A). HE POINTED OUT THAT SHRI H.B. KRISHNAPPA WAS PRODUCED BEFORE THE A SSESSING OFFICER AND HIS STATEMENT WAS RECORDED. HE HAS EXPL AINED THE TRANSACTION. 17. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS A ND CAREFULLY GONE THROUGH THE RECORD. THE LEARNED FIRST APPELLAT E AUTHORITY NOTICED THE FOLLOWING IMPORTANT ASPECTS WITH REGARD TO THIS TRANSACTION. (I) MR. H.B. KRISHNAPPA IS AN AGRICULTURIST AND H AS CONFIRMED HAVING ADVANCED A SUM OF RS.5.00 LAKHS TOWARDS PURCHASE OF A SITE. (II) HE IS AN AGRICULTURIST BY PROFESSION AND IS A GROWE R OF SUGARCANE HAVING SUBSTANTIAL HOLDINGS. (III) HE HAS ADVANCED THE AMOUNT OF RS.5,00,000/- BY CASH. (IV) HE HAS CONFIRMED HAVING KNOWN DR. KRISHNA FOR PAST 25 YEARS. (V) HE HAS SUBMITTED AFFIDAVIT TO THE FACT THAT HE HAS ADVANCED THE MONEY. (VI) SINCE THE TRANSACTION IS NOT COMPLETE HE HAS STATED THAT THE MONEY IS STILL RECEIVABLE AND IN VIEW OF THEIR LONG MUTUAL UNDERSTANDING, IT IS STILL OUTSTANDING IN THE ABSENCE OF TR5ANSACTIONS HAVING BEEN COMPLETED. 18. WE HAVE PERUSED THE EXPLANATION OF THE ASSESSEE FILED BY WAY OF A LETTER DATED 2.11.2010 WHICH WAS RECEIVED IN THE OFFICE OF THE ASSESSING OFFICER ON 15.11.2010. WE HAVE AL SO GONE ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 11 OF 37 THROUGH THE STATEMENT OF SHRI H.B. KRISHNAPPA RECOR DED BY THE ASSESSING OFFICER. THE CASE OF THE ASSESSEE IS THAT HE HAD PURCHASED A SITE FROM MUDA. HE WANTED TO SELL THE S ITE. SHRI H.B. KRISHNAPPA HAD ADVANCED A SUM OF RS.5.00 LAKHS WHICH WAS TAKEN INTO CAPITAL ACCOUNT AS AN ADVANCE FOR TH E SITE. THIS TREATMENT IN THE ACCOUNTING ENTRY WAS GIVEN BY THE ASSESSEE BEFORE THE CLOSURE OF THE ACCOUNTING YEAR. AT THAT POINT OF TIME HE NEVER THOUGHT THAT A HUGE CASH WOULD BE CAUGHT IN H IS CAR AND THIS ASSESSMENT WILL BE REOPENED AS A SEARCH ASSESS MENT. THUS IT IS NOT A COOKED UP STORY. THE LEARNED ASSESSING OFFICER HAS RECORDED THE STATEMENT OF THE ASSESSEE, BUT NOWHERE CONFRONTED HIM WITH REGARD TO THIS ISSUE. HE HAS NOT DIGGED OU T THE DETAILS OF SHRI H.B. KRISHNAPPA FROM THE ASSESSEE. ON PERUS AL OF THE STATEMENT OF SHRI H.B. KRISHNAPPA SUGGEST THAT HE H AS RESPONDED TO THE QUERY OF THE ASSESSING OFFICER AND EXPLAINED THAT HE HAS ADVANCED SUM OF RS.5.00 LAKHS. THE DEFE CTS POINTED OUT BY THE ASSESSING OFFICER BASED ON CIRCUMSTANCES ARE NOT DIRECTLY FLOWING FROM THE TRANSACTION. HIS GRIEVANC E IS WHY THE ASSESSEE HAS NOT MENTIONED THE NAME OF THE PERSON I N THE BOOKS OF ACCOUNTS AGAINST THE AMOUNT. TO OUR MIND, THIS I S NOT A DEFECT WHICH IS OF SUCH A NATURE WHICH CAN FALSIFY THE CLA IM OF THE TRANSACTION BECAUSE THE ASSESSEE HAS MENTIONED THE AMOUNT AS ADVANCE. SIMILARLY THE ASSESSING OFFICER HAS ALLEGE D THAT WHY THE ASSESSEE FAILED TO EXPLAIN ABOUT THIS ISSUE ON 09.0 8.2010. THIS AMOUNT WAS TAKEN BEFORE THE CLOSURE OF ASSESSMENT Y EAR 2003- 04, THE LEARNED ASSESSING OFFICER WANTS AN INSTANT REPLY IN THE YEAR 2010. FURTHER THE ASSESSEE HAS A RIGHT TO ANAL YSE THE DETAILS AND THEN RESPOND. IT IS NOT SUCH A SERIOUS ISSUE. T HUS WE ARE OF THE VIEW THAT THE LEARNED FIRST APPELLATE AUTHORITY HAS ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 12 OF 37 APPRECIATED THE FACTS AND CIRCUMSTANCES IN RIGHT PE RSPECTIVE ON THIS ISSUE AND NO INTERFERENCE IS CALLED FOR. AS FA R AS GROUND NO.6 & 7 ARE CONCERNED, THEY ARE GENERAL GROUNDS OF APPE AL, NOT SPECIFICALLY EMERGING OUT FROM THE ASSESSMENT ORDER . HENCE NO SPECIFIC FINDING IS TO BE RECORDED. 19. IN THE RESULT, APPEAL IN 2003-04 IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. ITA NO.1009/BANG/2011 ASSESSMENT YEAR 2004-05 20. AS FAR AS GROUND NOS. 1, 2 AND 3 ARE CONCERNED, THEY VERBATIM SAME AS TAKEN IN ASSESSMENT YEAR 2003-04. IN THESE GROUNDS, THE REVENUE HAS PLEADED THAT THE LEARNED C IT (A) HAS ENTERTAINED ADDITIONAL EVIDENCE IN VIOLATION TO RUL E 46A. IN THE LIGHT OF THE DISCUSSIONS MADE IN ASSESSMENT YEAR 20 03-04, WE HAVE PERUSED THE RECORDS IN THIS YEAR. WE FIND THAT NO ADDITIONAL EVIDENCE WAS PRODUCED BY THE ASSESSEE IN THIS YEAR. THEREFORE, THESE GROUNDS ARE NOT RELEVANT. 21. IN GROUND NO.4 AND 5 SAME ISSUE HAS BEEN TAKEN TWICE. IN THESE GROUNDS REVENUE HAS PLEADED THAT THE ASSESSEE HAS CLAIMED PROFESSIONAL RECEIPTS FROM JSS DIALYSIS CEN TRES PRIOR TO ITS COMMENCEMENT AND THE LEARNED FIRST APPELLATE AU THORITY HAS ACCEPTED THE CLAIM OF THE ASSESSEE WITHOUT ANY CORR OBORATIVE EVIDENCE. FROM THE ASSESSMENT ORDER IT IS NOT DISCE RNIBLE AN WHICH ARE THE RECEIPTS AND WHICH IS THE ADDITION MA DE BY THE ASSESSING OFFICER ON THIS ISSUE IN THIS ASSESSMENT YEAR. NO SUCH ISSUE IS BEING EMERGED OUT, NO ARGUMENTS HAVE BEEN ADVANCES, HENCE THESE GROUNDS ARE REJECTED. ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 13 OF 37 22. IN GROUND NO.6, IT HAS BEEN PLEADED BY THE REVE NUE THAT THE CIT (A) HAS ERRED IN ACCEPTING THE GIFT OF SHRI LALIT KUMAR MEHTA WITHOUT PROOF. IT IS BROUGHT TO OUR NOTICE TH AT IN THIS YEAR, THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 23.0 4.2009 DECLARING THE INCOME OF RS.14,47,498/- WHICH IS EQU IVALENT TO THE AMOUNT RETURNED IN THE ORIGINAL RETURN FILED ON 2.12.2004 U/S 139(1) OF THE I.T. ACT. THE ASSESSING OFFICER F OUND THAT THE ASSESSEE HAD RECEIVED A GIFT OF RS.5.00 LAKHS FROM SHRI LALIT KUMAR MEHTA. HE TREATED THE GIFT AS UNEXPLAINED AND MADE AN ADDITION. THE LEARNED COUNSEL FOR THE ASSESSEE POIN TED OUT THAT THE LEARNED CIT (A) HAS ALSO CONFIRMED THE ADDITION THEREFORE, THERE CANNOT BE ANY GRIEVANCE TO THE REVENUE. WHEN WE CONFRONTED THE LEARNED DR ON THIS ISSUE, SHE AGREED THAT THE ADDITION WAS CONFIRMED, BUT THE LEARNED CIT (A) HAS TREATED THIS RECEIPT AS PROFESSIONAL RECEIPT. 23. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTA NCES, WE FIND THAT THE LEARNED FIRST APPELLATE AUTHORITY HAS RECORDED THE FOLLOWING OBSERVATIONS ON THIS ISSUE: 4.3 RATHER THAN DOUBTING ABOUT THE GIFT, IT IS TO BE SEEN, AS TO WHETHER RECEIPT HAS AN ELEMENT OF PROFESSIONAL FEES RECEIPT. IN ANSWER TO QUESTION NO .43, THE APPELLANT HAD STATED TO THE QUESTION ON WHAT OCCASION DID SRI LALIT KUMAR MEHTA GIFT YOU AN AMOU NT OF RS. 5 LAKHS THE APPELLANT HAD ANSWERED SINCE I HAD TREATED THE FAMILY OF SHRI SHANKAR LAL DURING T HE ACCIDENTS AND SINCE I WAS WITH HIM DURING THAT PERI OD, HE GIFTED ME THAT AMOUNT. IN THEIR SUBMISSIONS, TH E APPELLANT HAS STATED THAT YOUR APPELLANT RECEIVED GIFT FROM A FIND WHO IS KNOWN TO HIM FOR THE PAST 12 YEA RS, WHO WAS IN TOUCH WITH YOUR APPELLANT, WHO IS HAVING ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 14 OF 37 HUMANITARIAN ATTITUDE FOR SAVING THE FAMILY MEMBERS DURING ACCIDENT. THIS STATEMENT ITSELF INDICATES T HAT THE AMOUNT RECEIVED IS IN THE NATURE OF PROFESSIONA L RECEIPTS AND THE APPELLANT HAD RENDERED SERVICES IN THE FORM OF TREATING THE FAMILY MEMBERS OF THE DONO R, THOUGH SOME YEARS BACK AND THE CLAIM OF GIFT HAS AN ELEMENT OF PROFESSIONAL RECEIPTS. THOUGH THE APPELL ANT COULD ARGUE THAT THEY HAVE PRODUCED THE DONOR, HIS PAN NO. HIS INCOME TAX RECORDS, HIS ADDRESS FOR COMMUNICATION AND OTHER RELEVANT RECORDS, EVEN IF I T IS CONSIDERED AS MONEYS RECEIVED FROM HIM, IT CANNOT BE REGARDED AS GIFT SINCE IT HAS AN ELEMENT OF PROFESS IONAL RECEIPTS AS SOME SERVICES WERE RENDERED BY THE APPELLANT SOME YEARS BACK BY TREATING THE INJURED MEMBERS OF THE FAMILY IN AN ACCIDENT AND HENCE IT I S HELD AS PROFESSIONAL CHARGES RECEIVED BY THE APPELLANT. ACCORDINGLY THIS ADDITION IS CONFIRMED A S RECEIPTS ARE IN THE NATURE OF PROFESSIONAL CHARGES AND NOT NECESSARILY AS BOGUS GIFTS. 24. SINCE THE LEARNED CIT (A) DID NOT ACCEPT THE CO NTENTION OF THE ASSESSEE AND FOUND AS A MATTER OF FACT THAT IT WAS A PROFESSIONAL CHARGE FROM SHRI LALIT KUMAR MEHTA, DI SMISSED THE APPEAL. WE DO NOT FIND ANY ERROR IN THE ORDER OF T HE LEARNED CIT (A). 25. GROUND NO.7 IS GENERAL IN NATURE, WHEREIN THE R EVENUE RESERVES ITS RIGHT FOR RAISING ANY OTHER GROUND OF APPEAL. NO ARGUMENTS WERE ADVANCED ON THIS ISSUE. HENCE THIS G ROUND IS ALSO REJECTED. 26. IN THE RESULT, APPEAL OF THE REVENUE IS REJECTE D. ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 15 OF 37 ITA NO.1010/BANG/2011 ASSESSMENT YEAR 2005-06 27. GROUND NOS. 1 TO 3 ARE SIMILAR AS WERE IN ASSES SMENT YEAR 2003-04. THE REVENUE PLEADED THAT THE LEARNED CIT ( A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE WITHOUT FOLLOWING THE PROCEDURE PROVIDED IN RULE 46A OF I.T. RULES. IT IS ALSO ALLE GED THAT THE LEARNED CIT (A) FAILED TO EXAMINE THE EVIDENCE AVAI LABLE ON RECORD. WITH THE ASSISTANCE OF THE LEARNED REPRESEN TATIVES, WE HAVE GONE THROUGH THE RECORD IN THIS YEAR, NO ADDIT IONAL EVIDENCE WAS PRODUCED BY THE ASSESSEE. THEREFORE, THESE GROU NDS ARE NOT RELEVANT. THE ONLY ISSUE IN THIS YEAR REMAINS FOR A DJUDICATION IS WHETHER THE ADDITION OF RS.30.00 LAKHS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CREDITS IN THE BO OKS OF THE ASSESSEE IS REQUIRED TO BE UPHELD OR NOT. 28. THE BRIEF FACTS OF THE CASE ARE THAT ONE TRUST NAMELY SHIVAPPA NAYAKA INSTITUTE OF MEDICAL SCIENCES HAD P AID A SUM OF RS.30.00 LAKHS TO THE ASSESSEE FOR ASSISTING THE TR UST FOR PURCHASE OF MEDICAL EQUIPMENTS LIKE X-RAY MACHINE, SCANNER AND O.T. MACHINE. THESE MACHINES COULD NOT BE PURCH ASED AND ULTIMATELY THE ASSESSEE HAD PAID RS.12.00 LAKHS BAC K TO THE TRUST AND THE REST REMAINED UNPAID. THE ASSESSING O FFICER CALLED FOR BANK STATEMENT OF THE TRUST BY EXERCISING HIS P OWERS U/S 133(6) OF THE I.T. ACT. HE OBSERVED THAT A SUM OF R S.29.00 LAKHS WAS DEPOSITED ON 31 ST MARCH, 2005 IN CASH AND A CHEQUE OF RS.30.00 LAKHS WAS ISSUED TO THE ASSESSEE. THE LEAR NED ASSESSING OFFICER HAS DOUBTED THE CREDENTIAL OF THE ASSESSEE FOR HELPING THE TRUST IN PURCHASING EQUIPMENTS. ACCORDI NG TO THE ASSESSING OFFICER DR. KRISHNA WAS NOT PRACTICING IN A PLACE LIKE ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 16 OF 37 BANGALORE OR DELHI FROM WHERE HE CAN RENDER ANY ASS ISTANCE. HE ALSO OBSERVED THAT IN THE SUBMISSION MADE BY DR. KR ISHNA VIDE LETTER DATED 2.11.2010 HE SUBMITTED THAT IT WAS A L OAN TAKEN BY HIM. HE SUBMITTED THAT HE HAD BORROWED THE MONEY FO R INVESTING IN SITE, WHEREAS THE TRUST HAD DEPOSED THAT IT WAS AN ADVANCE GIVEN TO BUY SOME SPECIALIZED EQUIPMENTS. THEREFORE , THERE IS INHERENT CONTRADICTION BETWEEN THE STATEMENTS OF TH E TRUST VIS-- VIS THE CLAIM OF THE ASSESSEE. HE ALSO OBSERVED THA T DR. KRISHNA HAS NOT MADE ANY ADDITION TO THE NURSING HOME FOR T HE PAST 8 YEARS EXCEPT FOR SMALL ADDITION DURING ONE YEAR. TH EREFORE, HE CANNOT RENDER ANY HELP TO THE TRUST. IN THIS WAY TH E LEARNED ASSESSING OFFICER TREATED THIS AMOUNT OF RS.30.00 L AKHS AS UNEXPLAINED CASH CREDIT OF THE ASSESSEE AND ADDED B ACK TO THE ASSESSEES TOTAL INCOME. ON APPEAL THE LEARNED CIT (A) DELETED THE ADDITION BY OBSERVING AS UNDER: 5.3 AFTER CONSIDERING THE APPELLANTS ARGUMENTS O N THIS ISSUE, IT IS HELD AS UNDER: (I) M/S. SHIVAPPA NAYAKA INSTITUTE OF MEDICAL SCIENCES IS AN ESTABLISHED TRUST AND IT HAS GIVEN A SUM OF RS.30.00 LAKHS BY CHEQUE TO THE APPELLANT. (II) IT WAS ALSO STATED THAT THE ABOVE AMOUNT WAS GIVEN FOR PURCHASE OF HOSPITAL EQUIPMENTS THROUGH DR. KRISHNA AS DR. KRISHNA WAS WELL EXPERIENCED IN THIS FIELD WHO IS A GYNECOLOGIST HAVING 20 YEARS OF EXPERIENCE AND HAVING HIS OWN HOSPITAL AND IS EXPERIENCED IN BUYING HOSPITAL EQUIPMENTS. (III) SRI M.S. SRIDHAR, MANAGING TRUSTEE OF M/S SHIVAPPA NAYAKA INSTITUTE OF MEDICAL SCIENCES HAS GIVEN CONFIRMATION TO THIS EXTENT AND HIS STATEMENT IS RECORDED WHICH IS REPRODUCED BY THE A.O IN PARA 4, 5 & 6 OF THE ASSESSMENT ORDER. ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 17 OF 37 (IV) M/S SHIVAPPA NAYAKA INSTITUTE OF MEDICAL SCIENCES WANTED TO START A MEDICAL COLLEGE AT SHIMOGA THAT WAS FORMED IN MARCH 2004, PURCHASED LAND IN SEPT 2004 AND STARTED CONSTRUCTION IN THE BEGINNING OF 2005. ALONG WITH THE BUILDING CONSTRUCTION, THEY WANTED TO PURCHASE MEDICAL EQUIPMENTS FOR WHICH THEY TOOK THE HELP OF DR. KRISHNA WHO WAS EXPERT IN THE FIELD IN BUYING X-RAY MACHINES, SCANNERS AND OT MACHINES WHICH IS AS PER ANSWER TO QUESTION NO.14 RECORDED BY THE ASSESSING OFFICER IN PAGE 5 OF THE ASSESSMENT ORDER. (V) AS THERE WAS A PUBLIC INTEREST LITIGATION, THEY HAD TO STOP THE WORK OF CONSTRUCTION AND STOP THE PURCHASE OF MEDICAL EQUIPMENTS IN BETWEEN. (VI) TOWARDS PURCHASE OF MEDICAL EQUIPMENTS THROUGH DR. KRISHNA THEY HAD ADVANCED A SUM OF RS.30.00 LAKHS. (VII) OUT OF THIS RS.30.00 LAKHS, RS. 12.00 LAKHS WAS RETURNED BACK AS CAN BE SEEN FROM THE BANK ACCOUNT OF DR. KRISHNA IN STATE BANK OF MYSORE, JAYANAGAR 4 TH BLOCK, BANGALORE ON 26.07.2005 VIDE CHEQUE NO.00052004 AMOUNTING TO RS.12.00 LAKHS. (VIII) THE SOURCE OF MONEY ETC., IS TO BE EXPLAINED BY M/S. SHIVAPPA NAYAKA INSTITUTE OF MEDICAL SCIENCES AS TO WHO WERE THE TRUSTEES AND HOW MUCH WAS OBTAINED FROM THEM AND FROM OTHERS AND IT WAS NOT FOR THE APPELLANT WHO RECEIVED THE MONEY AS ADVANCE FOR EQUIPMENT PURCHASE. (IX) IT WAS STATED AT THE TIME OF APPELLATE HEARING THAT THEY HAD TO STOP LOOKING FOR EQUIPMENTS IN VIEW OF THE COURT CASES OF THE TRUST AND STOPPAGE OF FURTHER CONSTRUCTION. ACCORDINGLY, IT IS HELD THAT M/S SHIVAPPA NAYAKA INSTITUTE OF MEDICAL SCIENCES IS AN EXISTING CONCER N WHICH HAD GIVEN RS.30.00 LAKHS TOWARDS PURCHASE OF MEDICAL EQUIPMENTS TO DR. KRISHNA BUT IN VIEW OF THE PUBLIC INTEREST LITIGATION, THE CONSTRUCTION OF THE HOSPITAL BUILDING DID NOT GO FORWARD WHICH RESULTED ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 18 OF 37 IN STOPPAGE OF PURCHASE OF X-RAY MACHINES, SCANNERS AND OT MACHINES AS STATED BY THE MANAGING TRUSTEE IN ANSWER TO QUESTION NO.14 RECORDED BY THE A.O IN PAGE 5 OF THE ASSESSMENT ORDER. IN THE STATEMENT RECORDED, WHEN THE MANAGING TRUSTEE WAS ASKED TO FURNISH THE NAMES AND ADDRESSES, HE HAD ONLY STATED THAT HE HAD THE DETAILS WHICH WOULD BE PRODUCED LATER AND THAT ITSELF DOES NOT AMOUNT TO N OT HAVING THE DETAILS AS THE TRANSACTIONS WAS IN MARCH 2005 AND THE STATEMENT WAS RECORDED ON 09.12.2010 AFTER 5 YEARS 9 MONTHS. OBVIOUSLY, FOR FURNISHING NAMES AND ADDRESSES HE HAD TO LOOK INTO THE RECORDS AND HE COULD NOT REMEMBER THE NAMES AND ADDRESSES OF THE PERSONS WHO HAD GIVEN MONEY TO THE TRUST. AS THE APPELLANT HAS PRODUCED CONFIRMATION AND M/S. SHIVAPPA NAYAKA INSTITUTE OF MEDICAL SCIENCES HAS CONFIRMED HAVING GIVEN THE ADVANCE AND THE TRANSACTION IS THROUGH CHEQUE AND PART OF THE MONEY AMOUNTING TO RS.12.00 LAKHS WAS ALSO REPAID ON 26.07.2005 BY CHEQUE AND IN A DETAILED STATEMENT BEFORE THE ASSESSING OFFICER, TH E MANAGING TRUSTEE SRI M.S. SRIDHAR HAD CONFIRMED HAVING GIVEN THE MONEY, EXISTENCE OF THE CREDITOR A ND GENUINENESS OF THE TRANSACTION IS ESTABLISHED. AS REGARDS, THE DONATIONS ETC FROM THE TRUSTEES AND OTHER PERSONS RECEIVED BY THE TRUST WHICH HAS NO RELATIONSHIP WITH THE APPELLANT, IT IS FOR THE TRUS T TO ESTABLISH THE IDENTIFY AND THE CREDIT WORTHINESS OF THE DONORS AND NOT FOR THE APPELLANT AS THE APPELLA NT HAS RECEIVED THIS MONEY ONLY FOR ARRANGING MEDICAL EQUIPMENTS SUPPLY. ACCORDINGLY, THE ADDITION OF RS.30.00 LAKHS IS DELETED. 5.4 IN THE RESULT, THE APPEAL IS ALLOWED. 29. THE LEARNED DR HAS FILED WRITTEN SUBMISSIONS, W HEREAS THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE OR DER OF THE CIT (A). ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 19 OF 37 30. ON DUE CONSIDERATION OF THE RECORD, WE ARE OF T HE VIEW THAT WHENEVER ANY EXPLANATION AT THE END OF THE AN ASSES SEE SUPPORTED WITH DOCUMENTARY AS WELL AS ORAL EVIDENCE REQUIRED CONSIDERATION THAN THE EXPLANATION WOULD BE APPRECI ATED BY CONSIDERING THE SETTING OF ALL CIRCUMSTANCES AS A W HOLE WITHOUT ATTACHING ANY IMPORTANCE TO A SINGLE FACT IN ISOLAT ION. THE LEARNED ASSESSING OFFICER HAS APPRECIATED THE CONTR OVERSY WITH A LIMITED PERSPECTIVE OF SECTION 68 WITHOUT APPLYING HIS MIND ABOUT THE NATURE OF THE TRANSACTION AND HOW IT COULD HAVE HAPPENED IN A PLACE LIKE MANDYA WHERE A SENIOR PRACTICING DOCTO R MUST HAVE INFLUENCED ALL THE LOCAL MEDICAL FRATERNITY. THE LE ARNED FIRST APPELLATE AUTHORITY HAS APPRECIATED THAT THE ASSESS EE IS A GYNECOLOGIST HAVING A PRACTICAL EXPERIENCE OF MORE THAN 20 YEARS. HE IS HAVING HIS OWN HOSPITAL AND THE LEARNED ASSES SING OFFICER HAD MADE IRRELEVANT COMMENTS ON THE COMPETENCE OF S UCH A SENIOR PERSON. WE DO NOT HAVE ANY HESITATION IN CON CURRING WITH THE OBSERVATION OF THE CIT (A) BECAUSE BEFORE DOUBT ING THE VERSION PUT FORTH BY THE ASSESSEE AS WELL AS THE TR UST, THE LEARNED ASSESSING OFFICER OUGHT TO HAVE COLLECTED S OME MATERIAL OR ASSIGNED SOME PLAUSIBLE REASONS. HE HAS SIMPLY R AISED THE SUSPICION WITHOUT ANY SUBSTANCE. THE ENTITY, WHO HA D GIVENRS.30.00 LAKHS TO THE ASSESSEE HAD STOOD WITH ITS STAND. A SUM OF RS.12.00 LAKHS WAS REPAID BY THE ASSESSEE TH ROUGH ACCOUNT PAYEE CHEQUE ON 22.07.2005, MUCH PRIOR TO A NY INVESTIGATION STARTED IN HIS CASE. THE CHEQUE WAS A LSO CLEARED. FOR SUBSTANTIATING THIS CLAIM THE ASSESSEE HAS PLAC ED ON RECORD PHOTOCOPY OF THE CHEQUE AS WELL AS THE BANK STATEME NTS. THESE DOCUMENTS ARE AVAILABLE ON PAGE NOS. 12 AND 14. THE REMAINING AMOUNT WAS NOT REMITTED BY THE ASSESSEE SIMPLY FOR THE REASON ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 20 OF 37 THAT THERE WAS LOT OF DISPUTES GOING ON WITH THE TR UST AND THE TRUST HAS DISCLOSED THAT A LARGE NUMBER OF CASES HA VE BEEN INITIATED AGAINST IT, THEREFORE THE COLLEGE ULTIMAT ELY COULD NOT BE STARTED. THE FACTS OUGHT TO HAVE BEEN APPRECIATED KEEPING IN VIEW THESE CIRCUMSTANCES. THE LEARNED FIRST APPELLA TE AUTHORITY HAS APPRECIATED THE FACTS IN RIGHT PERSPECTIVE AND WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LEARNED CIT (A), HENC E THIS APPEAL IS ALSO DISMISSED. ITA NO.1011/BANG/2011 ASSESSMENT YEAR 2006-07 31. IN THIS YEAR THE ASSESSEE HAS FILED ORIGINAL RE TURN OF INCOME U/S 139(1) ON 31.01.2006 DECLARING AN INCOME OF RS. 23,26,433/. IN RESPONSE TO THE NOTICE RECEIVED U/S 153A, THE AS SESSEE HAS FILED THE RETURN ON 23.04.2009 DECLARING AN INCOME OF RS.23,76,833/-. THE ASSESSING OFFICER HAS PASSED AS SESSMENT ORDER ON 30.12.2010 AND DETERMINED THE TAXABLE INCO ME OF THE ASSESSEE AT RS.53,26,430/-. HE MADE TWO ADDITIONS W ITH THE AID OF SECTION 68 NAMELY (A) BORROWING FROM SHRI P. RAMESH RS.25.00 LAKHS (B) BORROWING FROM HOSPITECH IND. - RS. 5.00 LAK HS 32. THE ASSESSEE CHALLENGED THE ORDER OF THE ASSESS ING OFFICER BEFORE THE CIT (A) AND LEARNED CIT (A) HAS DELETED BOTH THE ADDITIONS. 33. WITH THE ASSISTANCE OF THE LEARNED REPRESENTATI VE, WE HAVE GONE THROUGH THE RECORD CAREFULLY. THE FIRST THREE GROUNDS TAKEN ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 21 OF 37 THIS YEAR ARE VERBATIM SAME AS HAVE TAKEN IN 2003-0 4. HOWEVER, IT WAS BROUGHT TO OUR NOTICE THAT NO ADDITIONAL EVI DENCE WAS PRODUCED BY THE ASSESSEE IN THIS YEAR. THEREFORE, T HESE GROUNDS ARE REDUNDANT AND NOT EMERGING OUT FROM THE RECORD. 34. IN GROUND NO.4 THE ASSESSEE HAS CHALLENGED THE DELETION OF ADDITION OF RS.25.00 LAKHS TAKEN AS A LOAN FROM SHR I P. RAMESH. THE REVENUE HAS NOT CHALLENGED THE DELETION OF RS.5 .00 LAKHS ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPL AINED CASH RECEIPT APPEARING AGAINST THE NAME OF HOSPITECH IND USTRIES. THUS THE ONLY ISSUE WHICH IS TO BE ADJUDICATED BY U S, IS WHETHER THE LOAN RECEIVED BY THE ASSESSEE FROM SHRI P. RAME SH IS TO BE TREATED AS UNEXPLAINED CREDIT U/S 68 OF THE I.T. AC T OR NOT?. 35. THE BRIEF FACTS ARE THAT THE ASSESSEE HAD RECEI VED A SUM OF RS.25.00 LAKHS FROM SHRI P. RAMESH THROUGH A/C PAYE E CHEQUE. OUT OF THIS AMOUNT, RS.15.00 LAKHS WERE REPAID BY T HE ASSESSEE ON 25.06.2005 AND THE REMAINING RS.10.00 LAKHS ON 2 6.02.2011. SHRI P.RAMESH APPEARED BEFORE THE ADIT, MYSORE AND HAD CONFIRMED THE TRANSACTION. THE ASSESSEE HAD PRODUCE D THE ADDRESS OF SHRI P. RAMESH BEFORE THE ASSESSING OFFI CER. THE LEARNED ASSESSING OFFICER WAS NOT SATISFIED WITH TH E EXPLANATION GIVEN BY THE ASSESSEE AND IN THE ABSENCE OF ANY CON FIRMATION, HE MADE THE ADDITION. 36. ON APPEAL THE LEARNED CIT (A) DELETED THE ADDIT ION, WHILE OBSERVING AS UNDER: ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 22 OF 37 6.13 AFTER CONSIDERING THE APPELLANTS ARGUMENTS O N THIS ISSUE, IT IS HELD AS UNDER: (I) SRI P. RAMESH HAS GIVEN BY WAY OF CHEQUE OF SB A/C NO.01190010852 A SUM OF RS.25.00 LAKHS ON 16.05.2005 WHICH HAS BEEN CLEARED BY THE BANK ON 18.05.2005. (II) SRI P. RAMESH WAS PRODUCED BEFORE THE ADIT, MYSORE AND HE HAS CONFIRMED THE TRANSACTION. (III) SRI P. RAMESH IS ASSESSED TO TAX WITH DCIT, CIRCLE 2(2) BANGALORE AND HIS PAN NO. WAS ALSO FURNISHED TO THE A.O. (IV) THE BORROWED AMOUNT WAS ALSO REPAID TO THE EXTENT OF RS.15.00 LAKHS MUCH BEFORE THE DATE OF SEARCH I.E. ON 25.06.2005 VIDE CHEQUE NO.00052002 OF SBM, SMC BRANCH, JAYANAGAR 4 TH BLOCK, BANGALORE. (V) THE BALANCE BORROWED AMOUNT WAS ALSO REPAID TO THE EXTENT OF RS.10.00 LAKHS ON 26.02.2011 VIDE CHEQUE NO.35405 OF SBM, SMC BRANCH, JAYANAGAR, 4 TH BLOCK BANGALORE. (VI) THE STATEMENT RECORDED BY THE ADIT WHEN HE SUMMONED SRI P. RAMESH IS NOT BROUGHT ON RECORD. (VII) THE ILL HEALTH, THE REPETITIVE DIRECTION FOR APPEARING BEFORE THE AUTHORITIES AND STRAINED RELATIONSHIP BETWEEN THE BORROWER AND THE LENDER HAD LED TO HIS NON APPEARANCE BEFORE THE A.O AGAIN AS HE HAD ALREADY APPEARED BEFORE THE ADIT. SINCE THE APPELLANT HAS PRODUCED DETAILS OF THE CREDITOR AND HIS ASSESSMENT PARTICULARS WHO IS ASSESSED WITH THE DCIT, CIRCLE 2(2), BANGALORE AND HAS PRODUCED THE LENDER BEFORE THE ADIT, THE TRANSACTION IS THROUGH BANKING CHANNELS BY CHEQUE AND SINCE THE AMOUNT TO THE EXTENT OF RS.15.00 LAKH S WAS ALREADY REPAID AND THE BALANCE RS.10.00 LAKHS I S NOW REPAID, THERE WAS NO REASON FOR DOUBTING THE TRANSACTION AND TO TREAT THE AMOUNT AS UN-EXPLAINED CREDIT. ACCORDINGLY, THE ADDITION OF RS.25.00 LAKHS IS DELETED. ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 23 OF 37 THE LEARNED DR RELIED UPON THE ORDER OF THE ASSESSI NG OFFICER, WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF THE CIT (A). 37. A PERUSAL OF SECTION 68 WOULD REVEAL THAT WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF ACCOUNTS OF AN ASSES SEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE O FFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF, OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE ASSESSING OFFICER, SATISFACTORY, THE SUMS SO CREDITED MAY BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR. IN ORDER TO EXPLAIN THE NATURE AND SOURCE OF THE DE POSITS, AN ASSESSEE IS REQUIRED TO PROVE THE IDENTITY OF THE C REDITOR, HIS CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION S. IN THE PRESENT CASE THE ASSESSING OFFICER WAS NOT SATISFIE D WITH THE EXPLANATION OF THE ASSESSEE, BECAUSE THE ASSESSEE H AD PRODUCED ONLY THE ADDRESS OF SHRI P. RAMESH, BUT NOT PRODUCE D THE CONFIRMATION. HE HAS PRODUCED OTHER DETAILS. THE CA SE OF THE ASSESSEE IS THAT DURING INVESTIGATION, SHRI P. RAME SH WAS CALLED BY THE ADIT AND HIS STATEMENT WAS RECORDED. HE WAS LITTLE CONFUSED AS TO WHY HE HAD BEEN CALLED AGAIN BY THE INCOME TAX OFFICER. BEFORE THE ADIT, HE HAD CONFIRMED THE TRAN SACTION. THUS, HIS IDENTITY IS NOT IN DISPUTE. THE NEXT INGREDIENT IS HIS CREDITWORTHINESS. HE PAID THE AMOUNT TO THE ASSESSE E THROUGH ACCOUNT PAYEE CHEQUE AND HIS BANK ACCOUNT WAS DISCL OSED TO THE ASSESSING OFFICER. HE IS ASSESSED TO TAX ALSO. PAR TICULARS OF HIS ASSESSMENT WERE ALSO GIVEN TO THE ASSESSING OFFICER . THUS HIS ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 24 OF 37 CREDITWORTHINESS CANNOT BE DOUBTED BECAUSE THE MONE Y WAS GIVEN THROUGH ACCOUNT PAYEE CHEQUE AND HE IS AN INC OME TAX ASSESSEE. THE GENUINENESS OF THE TRANSACTION WAS AL SO NOT DOUBTFUL BECAUSE BOTH THE PARTIES HAVE CONFIRMED TH E TRANSACTION AND IT IS THROUGH BANKING CHANNEL. THE ASSESSEE HAS ALREADY REPAID A SUM OF RS.15.00 LAKHS JUST AFTER O NE MONTH OF THE RECEIPT. THE REMAINING RS.10.00 LAKHS HAS BEEN PAID DURING THE PENDENCY OF THE APPELLATE PROCEEDINGS. IN THE F INDINGS OF THE LEARNED FIRST APPELLATE AUTHORITY EXTRACTED (SUPRA) , IT IS DISCERNIBLE THAT ALL THESE FACTORS HAVE BEEN CONSID ERED BY THE LEARNED FIRST APPELLATE AUTHORITY BEFORE DELETING T HIS ADDITION. ON DUE CONSIDERATION OF THE RECORD, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LEARNED CIT (A). THIS GROUND OF APPEAL IS REJECTED. NO OTHER SUBSTANTIAL GROUND HAS BEEN RAISED. HENCE APP EAL FOR THIS YEAR IS DISMISSED. ITA NO.1012/BANG/2011 A.Y 2009-10 38. IN THIS YEAR THE FIRST THREE GROUNDS TAKEN BY T HE REVENUE ARE VERBATIM SAME AS TAKEN IN ASSESSMENT YEAR 2003- 04. THE REVENUE HAS PLEADED THAT THE LEARNED CIT (A) HAS ER RED IN ENTERTAINING ADDITIONAL EVIDENCE IN VIOLATION OF RU LE 46A. IT IS FURTHER PLEADED THAT THE LEARNED CIT (A) HAS PASSED THE ORDER WITHOUT SCRUTINIZING THE EVIDENCE AVAILABLE ON THE RECORD. IT WAS DEMONSTRATED BEFORE US THAT NO APPLICATION LEADING ADDITIONAL EVIDENCE WAS FILED IN THIS YEAR. THEREFORE, THESE G ROUNDS ARE NOT EMERGING OUT FROM THE RECORD. AS FAR AS THE PLEA TA KEN IN GROUND NO.3 THAT THE CIT (A) HAS PASSED THE ORDER WITHOUT SCRUTINIZING THE EVIDENCE AVAILABLE ON RECORD IS CONCERNED, WE W ILL DEAL WITH ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 25 OF 37 THIS ASPECT ALONG WITH THE SPECIFIC GROUND OF APPEA L RAISED BY THE REVENUE. 39. IN GROUND NO.4, THE REVENUE HAS PLEADED THAT TH E LEARNED CIT (A) HAS ERRED IN ACCEPTING THE COMPUTATION OF C APITAL GAIN CLAIM BY THE ASSESSEE ON SALE OF J.C. ROAD PROPERTY . THE REVENUE HAS SEGREGATED THIS ISSUE IN SEVEN SUB GROUNDS OF A PPEAL I.E. A TO H. THE BRIEF FACTS ARE THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10 ON 29.04.2009 DE CLARING AN INCOME OF RS.10,27,22,270/-. M/S. BLUE CROSS BUILDE RS & INVESTORS LTD WAS OWNER AND IN POSSESSION OF A VACA NT LAND BEARING NO.5/1 SITUATED AT 1 ST CROSS, JC ROAD, NEW MISSION COMPOUND, BANGALORE. THIS COMPANY HAD ENTERED INTO AN AGREEMENT FOR SALE OF THIS PROPERTY TO THE ASSESSEE ON 01.06.2005. THE SALE CONSIDERATION WAS SETTLED AT RS.9,92,75,000/-. THE ASSESSEE HAD PAID A SUM OF RS .2.00 CRORES AT THE TIME OF AGREEMENT. THE PAYMENT WAS STARTED F ROM 05.05.2005 UP TO 30.06.2007. THE DETAILS OF PAYMENT HAVE BEEN NOTICED IN CLAUSE (I) OF THE AGREEMENT ON PAGE 42 O F THE PAPER BOOK. THE ASSESSEE FAILED TO FULFILL THE AGREEMENT. THEREFORE, THE VENDOR HAS ISSUED A LEGAL NOTICE ON 10.11.2006 AND INTENDED TO TERMINATE THE AGREEMENT. THE ASSESSEE RESPONDED TO THE VENDOR AND RE-NEGOTIATED THE TERMS. A SUPPLEMENTARY AGREEM ENT WAS EXECUTED ON 02.01.2007. ALL THE TERMS AND CONDITION S REMAINED SAME, BUT THE SALE CONSIDERATION WAS ENHANCED TO RS.11,82,50,000/-. THE SALE HAS TO BE AFFECTED ON O R BEFORE 30.06.2007. THE ASSESSEE HAD MADE THE PAYMENT AND V ENDOR I.E. M/S BLUE CROSS BUILDERS & INVESTORS LTD HAD EXECUTE D A SPECIFIC POWER OF ATTORNEY IN FAVOUR OF THE ASSESSEE ON 01.0 9.2007. IN ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 26 OF 37 THIS DOCUMENT IT HAS BEEN ALLEGED THAT THE ASSESSEE HAD PAID THE TOTAL AMOUNT. THE ASSESSEE THEREAFTER ENTERED INTO AN AGREEMENT TO SELL THIS PROPERTY TO ONE MR. RAJENDRA KUMAR JAI N. THE PROPERTY HAD ULTIMATELY BEEN SOLD TO SHRI RAJENDRA KUMAR JAIN FOR A SUM OF RS.18,50,00,000/-. HOWEVER, IT EMERGES OUT FROM THE RECORD THAT BLUE CROSS HAD RECEIVED A SUM OF RS.11,32,50,000/- AND THE ASSESSEE WAS TO RECEIVE RS.7,17,50,000/-. THE ASSESSING OFFICER HAS NOTICED THAT APART FROM THIS RS.7,17,50,000/- RECEIVED BY CHEQUE, THE ASSESSEE HAD RECEIVED A SUM OF RS.3,75,00,000/- IN CASH. THE LEA RNED ASSESSING OFFICER HAS NOTICED THE DETAILS OF CASH O N PAGE 5 & 6 OF THE ASSESSMENT ORDER. TO THIS EXTENT, THERE IS NO D ISPUTE BETWEEN THE PARTIES. 40. THE ASSESSEE WHILE COMPUTING THE CAPITAL GAIN O N SALE OF THIS PROPERTY HAS ALLEGED THAT HE HAS TO PAY RS.50. 00 LAKHS TO M/S BLUE CROSS, BECAUSE AS PER THE AGREEMENT RS.11,82,50,000/- WAS TO BE PAID BY THE ASSESSEE, W HEREAS IT HAS PAID ONLY RS.11,32,50,000/-. THE DIFFERENCE OF RS.50.00 LAKHS IS THE COST OF ACQUISITION AND IT IS TO BE DE DUCTED FROM THE SALE CONSIDERATION WHILE COMPUTING THE CAPITAL GAIN . APART FROM THIS ONE ITEM, THE ASSESSEE HAS FILED REVISED RETUR N ON 14.12.2010 AND CLAIMED THE FOLLOWING EXPENSES: A) LIQUIDIATED DAMAGES TO MANJUNATH - RS. 7,00,00 0 B) LIQUIDATED DAMAGES TO GURUSHREE PROP. - RS.30,00 ,000 C) INTEREST CAPITALISED - RS.15,59,000 THE ASSESSING OFFICER DID NOT ALLOW THE CLAIM OF TH E ASSESSEE WITH REGARD TO INTEREST EXPENSES PAID TO DR. MANJUNATH. WITH REGARD ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 27 OF 37 TO THE PAYMENT OF RS.30.00 LAKHS MADE TO GURUSHREE PROPERTIES, THE LEARNED ASSESSING OFFICER HAS ALLOWED ONLY RS.2 0.00 LAKHS AND DID NOT ALLOW RS.10.00 LAKHS. SIMILARLY, HE DID NOT ALLOW CAPITALIZATION OF ALLEGED INTEREST EXPENSES OF RS.1 5,59,000/- AND ALLEGED PAYMENT OF RS.50.00 LAKHS TO M/S. BLUE CROS S BUILDERS & INVESTORS LTD. THE LEARNED ASSESSING OFFICER HAS AR RIVED AT THE COST OF ACQUISITION AT RS.11,12,50,000/-. THE SALE CONSIDERATION IS RS.21,75,00,000/-. AFTER DEBITING THE COST OF AC QUISITION, THE CAPITAL GAIN HAS BEEN COMPUTED AT RS.10,62,50,000/- AS AGAINST RS.992.05 LAKHS DISCLOSED BY THE ASSESSEE. 41. ON APPEAL, THE LEARNED CIT (A) HAS DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER IN THE CAPITAL GAIN E XCEPT A SUM OF RS.40.00 LAKHS WHICH WAS ALLEGED TO BE RECEIVED FRO M ONE SHRI SRINIVASA RAJU. 42. LET US TAKE EACH ITEM INDEPENDENTLY. THE FIRST MAJOR ISSUE IS WHETHER A SUM OF RS.50.00 LAKHS IS TO BE ADDED T OWARDS THE COST OF ACQUISITION. THIS CLAIM OF THE ASSESSEE IS BASED ON THE PLEA THAT AS PER THE SUPPLEMENTARY AGREEMENT DATED 02.01.2007, THE ASSESSEE WAS TO PAY A SUM OF RS.11,82,50,000/-. HE HAS TO PAY A SUM OF RS.50.00 LAKHS TO M/S. BLUE CROSS AND THEREFORE, THIS AMOUNT BE ADDED TOWARDS THE COST OF ACQUISITIO N. WITH THE ASSISTANCE OF THE LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. THE COPY OF THE FIRST AGREEME NT ENTERED ON 01.06.2005 IS AVAILABLE ON PAGE 40 OF THE PAPER BOO K. THE ASSESSEE FAILED TO COMPLY WITH THE CONDITIONS OF TH IS AGREEMENT, THEREFORE, A LEGAL NOTICE WAS SERVED UPON HIM BY TH E VENDOR. ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 28 OF 37 ULTIMATELY, SUPPLEMENTARY AGREEMENT WAS EXECUTED AN D AS PER THIS SUPPLEMENTARY AGREEMENT, THE SALE CONSIDERATIO N WAS FIXED AT RS.11,82,50,000/-. THE STAMP DUTY PAID BY THE AS SESSEE IS ON RS.11,32,00,50,000/-. THE ORIGINAL COPY OF THE AGRE EMENT HAS NOT BEEN PRODUCED BEFORE US. FROM THE BARE EYES, IT GIVES A SUSPICION IN THE PHOTOSTAT COPY THAT ACTUALLY IT WA S AN AMOUNT REPRESENTING RS.11,32,50,000/-. ANYWAY THAT IS NOT THE CRITERIA TO ADJUDICATE THE ISSUE AT THIS STAGE. WE FIND THAT ONCE THE VENDOR HAS EXECUTED THE SPECIFIC POWER OF ATTORNEY IN FAVOUR OF THE ASSESSEE, WHICH IS RUNNING INTO FIVE PAGES, THE VENDOR HAS NOWHERE MENTIONED THAT IT HAS TO RECEIVE RS.50.00 L AKHS FROM THE ASSESSEE. THE ASSESSEE AND THE VENDOR BOTH ACTE D AS A VENDOR FOR MR. RAJENDRA KUMAR JAIN. THE SALE DEED I S AVAILABLE ON PAGE 55 OF THE PAPER BOOK. IT IS A VERY DETAILED DOCUMENT RUNNING INTO 24 PAGES AND NOWHERE IT HAS BEEN MENTI ONED THAT THE BLUE CROSS BUILDERS IN THE CAPACITY OF VENDOR W OULD RECEIVE RS.50.00 LAKHS APART FROM THE CONSIDERATION RECEIVE D FROM THE ASSESSEE. THE OTHER IMPORTANT FACTOR IS WHAT EXECUT IONABLE CAUSE IS AVAILABLE TO THE VENDOR AFTER EXECUTING THE SPEC IFIC POWER OF ATTORNEY AS WELL AS THE SALE DEED TO RECOVER THE AM OUNT OF RS.50.00 LAKHS FROM THE ASSESSEE EXCEPT BALD ASSERT ION OF THE ASSESSEE TO SAY THAT HE WOULD HAVE TO PAY RS.50.00 LAKHS TO BLUE CROSS BUILDERS, THERE IS NO CORROBORATIVE MATERIAL ON THE RECORD. THEREFORE, THE LEARNED CIT (A) HAS ERRED IN HOLDING THAT RS.50.00 LAKHS BE ADDED IN THE COST OF ACQUISITION. THE LEAR NED ASSESSING OFFICER HAS RIGHTLY DID NOT GRANT ANY BENEFIT OF RS .50.00 LAKHS TO THE ASSESSEE TOWARDS THE COST OF ACQUISITION WHILE COMPUTING THE CAPITAL GAIN ON SALE OF THE CAPITAL ASSET. THE FIND INGS OF THE ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 29 OF 37 LEARNED CIT (A) IS SET ASIDE AND THAT OF THE ASSESS ING OFFICER IS RESTORED ON THIS ISSUE. 43. THE NEXT ITEM IS OF RS.7.00 LAKHS. ACCORDING TO THE ASSESSEE HE HAS RECEIVED A SUM OF RS.30.00 LAKHS FROM DR. Y. S. MANJUNATH. RS.5.00 LAKHS WAS RECEIVED ON 29.03.2005 AND RS.25.00 LAKHS ON 03.06.2005. THESE AMOUNTS HAVE BE EN REPAID ON 25.07.2007 WITH AN INTEREST OF RS.7.00 LAKHS. TH E CONTENTION OF THE ASSESSEE IS THAT THIS AMOUNT WAS USED FOR PU RCHASE OF J.C. ROAD PROPERTY AND THEREFORE, THE INTEREST EXPENSES INCURRED BY HIM HAS TO BE ADDED TOWARDS THE COST OF ACQUISITION WHILE COMPUTING THE CAPITAL GAIN. THE LEARNED ASSESSING O FFICER HAS REJECTED THE CLAIM OF THE ASSESSEE ON THE BASIS OF CIRCUMSTANCES AVAILABLE ON THE RECORD. THE CONTENTION OF THE ASSE SSING OFFICER IS THAT THERE IS NO DIRECT NEXUS BETWEEN THESE LOANS A ND INVESTMENT IN THE PROPERTY. NO AGREEMENT WAS EXECUTED WITH DR. Y.S. MANJUNATH FOR PAYMENT OF INTEREST. THE ASSESSEE HAD ADVANCED THE MONEY TOWARDS PURCHASE OF BANASKARI SITE IN THE SAME YEAR AND THEREFORE, ANY INTEREST PAYMENT CANNOT BE DIREC TLY RELATABLE TO THE ACQUISITION OF PROPERTY AT J.C. ROAD, BANGAL ORE. THE MONEY HAS BEEN BROUGHT INTO HIS REGULAR BOOKS, IT M IGHT HAVE GONE TO THE REGULAR BUSINESS AND PROFESSION ALSO. T HE MONEY HAS BEEN REPAID TO DR. Y.S. MANJUNATH, PRIOR TO THE SAL E OF THE PROPERTY. THE ASSESSEE PLEADED THAT IN A FRIENDLY L OAN, IT WAS ONLY AN ORAL UNDERSTANDING. NO AGREEMENT WAS NECESSARY. IT IS THE LEVEL OF CONFIDENCE BETWEEN THE TWO PERSONS. THE AG REEMENT WAS EXECUTED ON 01.06.2005 AND THE ASSESSEE TOOK THE LO AN ON 3.6.2005 FROM DR. MANJUNATH. THEREFORE, THE INVESTM ENT WAS MADE SIMULTANEOUSLY AND IT MUST HAVE BEEN USED FOR THIS ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 30 OF 37 PURPOSE. THE LEARNED CIT (A) HAS ACCEPTED THE CONTE NTION OF THE ASSESSEE BY OBSERVING THAT THE GENUINENESS HAS NOT BEEN DOUBTED. THE ASSESSEE HAS REPAID THE AMOUNT. EVEN T HOUGH IF IT WAS REGULATED THROUGH THE BOOKS OF ACCOUNTS, THEN I T COULD BE CONSIDERED AS USED IN THE BUSINESS OR PROFESSION, T HEN ALSO INTEREST EXPENSES HAS TO BE ALLOWED TO THE ASSESSEE AS BUSINESS EXPENDITURE. 44. BEFORE US, THE LEARNED DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER, WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF THE CIT (A) AND POINTED OU T THAT THE AMOUNT WAS USED FOR THE PURCHASE OF HOUSE PROPERTY AND THEREFORE, INTEREST EXPENSES HAS TO BE ADDED IN THE COST OF ACQUISITION. 45. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. FIRST CHEQUE WAS RECEIVED BY THE ASSESSEE ON 29.03.2005 AND THE SECOND ON 03.06.2005. THE ASS ESSEE HAD ENTERED INTO AN AGREEMENT FOR PURCHASING THIS PROPE RTY ON 01.06.2005. THE SCHEDULE OF THE PAYMENT IS AVAILABL E IN CLAUSE (I) OF THE FIRST AGREEMENT. THE ASSESSEE HAD PAID A SUM OF RS.2.00 CRORES THROUGH ACCOUNT PAYEE CHEQUE BY 31.05.2005 M EANING THEREBY THE AMOUNT RECEIVED ON 3.6.2005 DID NOT TRA VEL TOWARDS PAYMENT MADE FOR THIS PROPERTY. THE FIRST CHEQUE IS DATED 5.5.2005 AND LAST 31.05.2005. THEREAFTER THE ASSESS EE DID NOT MAKE PAYMENT AND A DISPUTE AROSE THAT LED TO CANCEL LATION OF THE AGREEMENT VIDE LEGAL NOTICE DATED 10.11.2006. THE N EW AGREEMENT WAS EXECUTED ON 2.1.2007. THE ASSESSEE HA D STARTED ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 31 OF 37 MAKING PAYMENTS THEREAFTER. HE HAS RETURNED THIS AM OUNT TO DR. Y.S. MANJUNATH ON 25.7.2007. TEHREFORE, FROM THE DE TAILS AVAILABLE ON THE RECORD, WE DO NOT FIND ANY NEXUS B ETWEEN THIS LOAN, VIS--VIS INVESTMENT IN THE PROPERTY. THE ASS ESSEE HAS NOT FILED ANY FUND FLOW STATEMENT DEMONSTRATING HOW HE HAS RECEIVED THIS AMOUNT AND HOW THAT WENT TO THE INVESTMENT. TH E LEARNED FIRST APPELLATE AUTHORITY ERRED IN REVERSING THE FI NDINGS OF THE ASSESSING OFFICER. THE FINDINGS OF THE LEARNED CIT (A) IS SET ASIDE ON THIS ISSUE AND THAT OF THE ASSESSING OFFICER IS RESTORED. THIS AMOUNT OF RS.7.00 LAKHS IS NOT TO BE INCLUDED IN TH E COST OF ACQUISITION. 46. THE NEXT ITEM IS OF RS.30.00 LAKHS. THE FINDING S OF THE LEARNED CIT (A) ON THIS ISSUE READ AS UNDER: 7.3 LIQUIDATED DAMAGES PAID TO GURUSHREE PROPERTIES: RS.10,00,000/-. 7.3.1 THE APPELLANT HAD CLAIMED THAT AN AMOUNT OF RS.30.00 LAKHS AS LIQUIDATED DAMAGES WERE PAID TO GURUSHREE PROPERTIES AS EXPENSES TOWARDS EARNING THE SHORT TERM CAPITAL GAIN ON THE SALE OF J.C. ROA D PROPERTY. THE APPELLANT, HAD ENTERED INTO AN AGREEMENT FOR SALE WITH M/S. GURUSHREE PROPERTIES O N 12.05.2006 FOR THE SALE OF THE ABOVE PROPERTY AND H AD RECEIVED RS.430.00 LAKHS IN A PHASED MANNER. THE MONEY WAS REPAID ON 30.06.2007 TO THE EXTENT OF RS.100 LAKHS AND ON 5.9.2007 TO THE EXTENT OF RS.350.00 LAKHS. THUS THE APPELLANT HAD REPAID RS.20.00 LAKHS EXCESS THAN BORROWING AND M/S GURUSHREE PROPERTIES HAD CONFIRMED THAT THEY HAD RECEIVED A PROFIT OF RS.20.00 LAKHS FROM THE TRANSACTION AND THE ASSESSING OFFICER HAS RECORDED THE STATEMENT OF SRI G. SURESH. THE ASSESSING OFFIC ER HAS ACCEPTED THIS SUM OF RS.20.00 LAKHS BUT HAS STATED THAT THE APPELLANT HAS CAPITALISED RS.30.00 ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 32 OF 37 LAKHS TOWARDS COST OF THE PROPERTY AND HENCE ADDED THE BALANCE OF RS.10.00 LAKHS AS NOT TOWARDS THE CO ST OF THE PROPERTY. 7.3.2 THE APPELLANT HAS STATED THAT, IT WAS TRUE TH AT THEY PAID ONLY RS.450 LAKHS TILL 05.09.2007 AND HAS FURTHER PAID A SUM OF RS.10.00 LAKHS ON 25.06.2009 TOWARDS THE SAME TRANSACTION AND HENCE THE TOTAL LIQUIDATED DAMAGES PAYABLE AS ON 31.03.2009 WAS RS.30.00 LAKHS AND ACCORDINGLY THEY HAVE CLAIMED TH E SAME. AGAINST RS.430 LAKHS TAKEN FROM M/S.GURUSHREE PROPERTIES, THEY HAVE IN ALL PAID RS.460 LAKHS, OUT OF WHICH RS.450 LAKHS WAS PAID BEFORE 31.03.2009 AND ANOTHER RS.10.00 LAKHS WAS PAYABLE ON 31.03.2009 WHICH WAS ALSO PAID ON 25.06.2009 VIDE CHEQUE NO.803154 OF SBM, MANDYA BRANCH OF THE APPELLANT, THEY HAVE CLAIMED THIS AMOUNT, IT WAS STATED. ACCORDINGLY, IT IS STATED TH AT THEY WERE ENTITLED TO CLAIM OF RS.30.00 LAKHS LIQUIDATED DAMAGES PAID TO M/S.GURUSHREE PROPERTIES OUT OF WHICH RS.20.00 LAKHS WAS ALREADY PAID BEFORE 31.03.2009 AND RS.10.00 LAKHS WAS PAYABLE ON 31.03.2009 WHICH WAS PAID ON 25.06.2009. 7.3 AFTER CONSIDERING THE APPELLANTS ARGUMENTS ON THIS ISSUE, IT IS HELD AS UNDER: (I) THERE IS NO DOUBT THAT THE APPELLANT HAS PAID RS.460 LAKHS AS AGAINST RS.430 LAKHS INVESTED BY M/S GURUSHREE PROPERTIES. (II) OUT OF THE ABOVE RS.30 LAKHS (RS.460 LAKHS RS.430 LAKHS) RS.20 LAKHS WAS PAID MUCH BEFORE 31.03.2009 AND A FURTHER SUM OF RS.10 LAKHS WAS PAYABLE AS ON 31.03.2009 WHICH WAS SUBSEQUENTLY PAID ON 25.06.2009 VIDE CHEQUE NO.803154 OF SBM, MANDYA BRANCH OF THE APPELLANT. THIS AMOUNT IS ALSO REFLECTED IN THE SBM A/C NO.54008875338 OF SBM, MANDYA WHEREIN THE APPELLANTS ACCOUNT IS DEBITED TO THE EXTENT OF RS.10,01,750/- THE BALANCE RS.1,750 IS TOWARDS DD COMMISSION/BANK CHARGES. ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 33 OF 37 IN VIEW OF THE SAME, APPELLANTS LIABILITY WAS TO T HE EXTENT OF RS.30 LAKHS OUT OF WHICH RS.20 LAKHS WAS ALREADY PAID BEFORE 31.03.2009 AND THE BALANCE AMOUNT OF RS.10.00 LAKHS WAS PAID ON 25.06.2009, THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE FULL AMOUNT OF RS.30.00 LAKHS INCLUDING THE ACCRUED LIABILITY AS ON 31.03.2009, WHICH WAS DISCHARGED SUBSEQUENTLY. HENCE, THE ADDITION OF RS.10.00 LAKHS IS DELETED. 47. WITH THE ASSISTANCE OF THE LEARNED REPRESENTATI VES, WE HAVE GONE THROUGH THE RECORD. THE ASSESSING OFFICER HAD RECORDED THE STATEMENT OF SHRI G. SURESH, PARTNER OF GURUSHREE P ROPERTIES. HE CONFIRMED GIVING ADVANCE TO THE ASSESSEE BUT HE DIS CLOSED THAT HE HAD A PROFIT OF RS.20.00 LAKHS FOR THIS TRANSACT ION. THE QUESTION NO.6 & 7 OF HIS STATEMENT READ AS UNDER: Q 6. WHAT IS THE STATUS OF THAT AGREEMENT? ANS. THE AGREEMENT WAS CANCELLED IN 208 OR 2007, I DO NOT REMEMBER THE DATE. I RECEIVED THIS MONEY BAC K ON VARIOUS DATES. I UNDERTAKE TO FURNISH THE DETAIL S WITHIN ONE WEEKS TIME. Q 7. HAVE YOU GAINED ANY PROFIT OUT OF THIS TRANSACTION?. HAVE YOU OFFERED THIS FOR INCOME?. ANS. YES. I HAVE GAINED RS.20.00 LAKHS FROM THIS TRANSACTION. OUR FIRM WAS SURVEYED U/S 133A ON 26.8.2009. OUR FIRM MEANS VSR PROJECTS IN WHICH I A M A PARTNER ALONG WITH SRI B.C. JANARDHANA AND SRI B.C.SATISH. DURING THAT SURVEY WE ALSO DECLARED THE INCOME UNDER THE NAME AND STYLE OF M/S GURUSHREE PROPERTIES. 48. THIS IS THE ONLY PIECE OF EVIDENCE WHICH IS IN FAVOUR OF THE ASSESSING OFFICER. CONTRARY TO THIS IT HAS BEEN DEM ONSTRATED THAT PAYMENT OF RS.10.00 LAKHS WAS MADE THROUGH ACCOUNT PAYEE ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 34 OF 37 CHEQUE. THE LEARNED FIRST APPELLATE AUTHORITY HAS C ONSIDERED THIS ASPECT IN THE FINDINGS EXTRACTED (SUPRA). THERE IS NO DISPUTE ABOUT THE TRANSACTION AND THE PAYMENT MADE BY THE A SSESSEE. THE ONLY DISPUTE IS THE QUANTUM. THE ASSESSING OFFI CER IS GIVING CREDIT OF RS.20.00 LAKHS, WHEREAS THE ASSESSEE CLAI MED THAT HE HAS PAID RS. 30.00 LAKHS. TO OUR MIND, THE ASSESSIN G OFFICER FAILED TO COLLECT THE CONCLUSIVE EVIDENCE SUGGESTIN G THAT ONLY RS.20.00 LAKHS WAS PAID. THE SUM OF RS.10.00 LAKHS WAS PAID THROUGH ACCOUNT PAYEE CHEQUE AND THIS ASPECT CANNOT BE IGNORED. THERE CANNOT BE ANY REASON TO THE ASSESSEE TO PAY RS.10.00 LAKHS TO GURUSHREE PROPERTIES. THEREFORE, WE DO NOT FIND ANY ERROR IN THE FINDINGS OF THE LEARNED CIT ( A). 49. THE NEXT ITEMS RELATES TO CAPITALIZATION OF INT EREST. THE ASSESSEE HAD BORROWED MONEY FROM THE BANKS AND MADE INVESTMENT IN THE PROPERTIES. THE ASSESSING OFFICER HAS NOT DOUBTED THE BORROWING AS WELL AS THE PAYMENT OF INT EREST. HIS DOUBT IS THAT THE ASSESSEE FAILED TO PROVE DIRECT N EXUS BETWEEN THE BORROWED FUND AND ULTIMATE INVESTMENT. HE ALSO MADE OBSERVATION THAT THE ASSESSEE HAD MADE INVESTMENT A T BANASHANKARI SITE. THE ASSESSEE FAILED TO PROVE THA T MONEY WAS SPECIFICALLY BORROWED FOR MAKING INVESTMENT IN THE J.C. ROAD PROPERTY. THE LEARNED CIT (A) HAS DELETED THE ADDIT IONS BY OBSERVING AS UNDER: 7.4.3 AFTER CONSIDERING THE APPELLANTS ARGUMENTS ON THIS ISSUE, IT IS HELD AS UNDER: (I) THE ASSESSING OFFICER HAS NOT DOUBTED THE BORROWINGS FROM BANKS AND INTEREST PAYMENT THEREON. ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 35 OF 37 (II) THE A.O HAS NOT DOUBTED THE PAYMENT OF INTEREST OF RS.15,59,000/-. (III) THE PROPERTY AT 5/1, 1 ST CROSS, J.C ROAD WAS TRANSACTED DURING THE PERIOD FROM 5.5.205 TO 30.6.2007 AS RECORDED BY THE A.O IN PAGE 4 AND BORROWINGS WERE MADE DURING THIS PERIOD. (IV) IN PAGE 12, THE A.O HERSELF HAS RECORDED AS UNDER: THE MONEY HAS BEEN BROUGHT INTO HIS REGULAR BOOKS THROUGH WHICH IT HAS GONE TO THE REGULAR BUSINESS AND PROFESSION ALSO. WHEN THE A.O HERSELF IS ACCEPTING THAT THEY HAD GONE TO HIS BUSINESS/PROFESSION, EVEN IF IT IS CLAIMED AGAINST THEIR BUSINESS/PROFESSIONAL INCOME, THE INTEREST IS OTHERWISE ALLOWABLE. (V) THE A.O IS NOT EMPOWERED TO DICTATE TO THE BUSINESSMEN AS TO HOW THEY SHOULD CONDUCT AND CARRY ON THEIR BUSINESS. (VI) THE A.O HAS NOT BEEN ABLE TO ESTABLISH THE BORROWED MONEY HAS BEEN UTILISED FOR PURCHASE OF SOME OTHER PROPERTY LIKE BANASHANKARI SITES SINCE THE MONEY HAS BEEN BORROWED FROM BANK AS PER APPELLANTS BOOKS AND SHE CANNOT PRESUME THAT IT HAS GONE TOWARDS PURCHASE OF SOME OTHER ASSET WHEN CONSOLIDATED ACCOUNTS ARE MAINTAINED BY THE APPELLANT. (VII) IT IS STRANGE TO NOTICE THE A.OS REMARKS THAT IT WAS NOT INCUMBENT ON THE PART OF THE ASSESSEE TO MAKE THIS INTEREST PAYMENT TO ACQUIRE THE PROPERTY( EMPHASIS SUPPLIED). AGAIN, THE ABOVE REMARK IN POINT NO.(V) IS TO BE REPEATED HERE AS TO WHAT SHOULD BE THE AMOUNT FOR WHICH THE PROPERTY SHOULD BE PURCHASED, HOW MUCH MONEY THEY HAD WITH THEM, HOW MUCH WAS THE REQUIRED BORROWINGS AND WHAT SHOULD BE THE RATE AT WHICH INTEREST IS TO BE PAID, ARE ALL THE BUSINESSMENS DISCRETIONS AND THE TAXATION AUTHORITIES SHOULD NOT INTERFERE ON THESE ISSUES AND THE A.O COULD HAVE REFRAINED FROM MAKING SUCH UN-NECESSARY AND UN- CALLED FOR OBSERVATIONS. SINCE THE APPELLANT HAS BORROWED FROM BANKS DURING THE SAME PERIOD AND HAS UTILISED THE MONEY TOWARDS ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 36 OF 37 THE PURCHASE OF THE PROPERTY ON WHICH THEY HAVE DECLARED AS HIGH AS RS.992.5 LAKHS TOWARDS SHORT TERM CAPITAL GAIN AND HAS PAID RS.15,59,000/- TOWARDS INTEREST, THE APPELLANT IS ENTITLED TO CLAI M THAT INTEREST AGAINST THE SHORT TERM CAPITAL GAINS AND THE A.O IS DIRECTED TO ALLOW THE SAME. 50. WITH THE ASSISTANCE OF THE LEARNED REPRESENTATI VE, WE HAVE GONE THROUGH THE RECORD. WE FIND THAT THE ASSESSING OFFICER HAS NOT POINTED OUT ANY SPECIFIC DEFECT IN THE CLAIM OF THE ASSESSEE. HE HAS REFERRED CERTAIN CIRCUMSTANCES, BUT THOSE CI RCUMSTANCES ALSO DO NOT EXHIBIT ANY SPECIFIC DETAILS. THEY ARE IN THE SHAPE OF SUSPICION ONLY. CONTRARY TO HIS OBSERVATION LEARNED CIT (A) HAS OBSERVED THAT LOAN WAS TAKEN WHEN INVESTMENT IN J.C . ROAD PROPERTY WAS IN PROGRESS. THE SUSPICION OF THE ASSE SSING OFFICER IS THAT THE ASSESSEE MUST HAVE USED THE MONEY IN PU RCHASE OF SOME OTHER PROPERTY BUT HE HAS NOT PIN POINTED OUT, WHETHER THAT PROPERTY WAS PURCHASED OR NOT. HE ALSO OBSERVE D THAT MONEY HAS NOT BEEN BORROWED WITH ANY SPECIFIC PURPO SE. IT IS DIFFICULT TO BRING DEMONSTRATIVE PROOF OF THIS NATU RE. THE ASSESSEE HAD BORROWED THE MONEY AND USED IT. IT IS FOR THE A SSESSING OFFICER TO DEMONSTRATE THAT THIS BORROWED MONEY WAS USED SOMEWHERE ELSE AND NOT FOR PURCHASE OF THE PROPERTY . WHILE DISALLOWING THE CLAIM OF THE ASSESSEE WITH REGARD T O THE INTEREST PAID TO SHRI MANJUNATH, WE HAVE OBSERVED THAT MONEY PAID BY THE ASSESSEE FOR PURCHASE OF THE PROPERTY WAS PRIOR TO THE LOAN TAKEN BY HIM AND THAT MONEY WAS NOT USED. THEREFORE , WE DID NOT ALLOW ADDITION OF THAT AMOUNT IN THE COST OF AC QUISITION. BUT HERE NO EVIDENCE IS AVAILABLE TO DISPEL THE CLAIM O F THE ASSESSEE. THEREFORE, WE DO NOT SEE ANY ERROR IN THE FINDINGS OF THE CIT (A). THE ASSESSEE WILL BE ENTITLED TO CLAIM THIS EXPENDI TURE AS A PART ITA NOS.1008 TO 1012DR.H.KRISHNA MANDYA PAGE 37 OF 37 OF COST OF ACQUISITION WHILE COMPUTING THE CAPITAL GAIN. THE APPEAL OF THE REVENUE IS PARTLY ALLOWED. 51. WE SUMMARISE THE RESULT AS UNDER: (I) ITA NO.1008/BANG/2012 PARTLY ALLOWED FOR STATISTICAL PURPOSES. (II) ITA NOS. 1009 TO 1011/BANG/2012 DISMISSED. (III) ITA NO.1012 PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH AUGUST, 2014. SD/- SD/- (JASON P. BOAZ) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED 8 TH AUGUST, 2014. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCHES, BANGALORE