ACIT, New Delhi V. Sh. Punit Beriwal, New Delhi

ITA 1021/DEL/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0175 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 30-06-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 29-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK WADEK
• Assessee Lawyers: RAJESH ARORA
• Keywords: Unexplained investment; Unexplained expenditure; Search and seizure; Document seized; Additional evidence; Documents seized
• Section: 69C; 143(3); 133A; 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F : NEW DELHI BEFORE SHRI J.S. REDDY , ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA NO. 1021/DEL /2012 ASSESSMENT YEAR : 200 5 - 200 6 ACIT, CENTRAL CIRCLE - 2, VS. PUNIT BERIWAL ROOM NO.323, 3 RD FLOOR, 15/10, SARVAPRIYA VIHAR E - 2, JHANDEWALAN EXTN. NEW DELHI. NEW DELHI (PAN ADLPB0195R ) (APPELLANT) (RESPONDENT) DATE OF HEARING : 30 .0 6 .2015 DATE OF PRONOUNCEMENT : 29. 0 7 . 2015 ASSESSEE BY : SRI VIVEK WADEK AR, CIT DR RESPONDENT BY: SRI RAJESH ARORA, CA. ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER 1. THIS APPEAL BY THE REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF THE CIT(A) - I II, DELHI DATED 1 4 . 12 .2011 IN APPEAL NO. 491 /0 8 - 0 9 FOR AY 200 5 - 0 6 . ITA NO. 1021/DEL/2012 2 2. GROUND NOS. 5 & 6 OF THE REVENUE ARE GENERAL IN NATURE , WHICH NE ED AT NO ADJUDICATION. REMAINING GROUNDS OF THE REVENUE FOR ADJUDICATION READS AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CLT ( A ) HAS ERRED IN LAW AND ON FACTS IN DE LETING THE ADDITION OF RS. 15,50, 000 / - MADE BY THE ASSESSING OFFICER U/S 69B OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF UNEXPLAINED INVESTMENT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED, IN VIOLATION OF RULE 46A OF THE INCOM E TAX RULE, 1962, BY NOT FOLLOWING THE DECISION OF HON,BLE DELHI HIGH COURT IN THE CASE OF MANISH BUILD WELL PVT, LTD, 204 TAXMAN 106, WHEREIN IT WAS HAS HELD BY THE HON,BLE JURISDICTIONAL HIGH COURT TO GIVE TWO STAGE OPPORTUNITY UNDER RULE 46A, I.E. FIRS T BEFORE ADMISSION OF ADDITIONAL AND SECOND AFTER ADMISSION OF ADDITIONAL EVIDENCES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CLT ( A ) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 84,274/ - MADE BY THE ASSESSING OFFICER ON AC COUNT OF LOW HOUSEHOLD WITHDRAWALS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT ( A ) HAS ERRED IN HOLDING THAT NO ADDITION COULD BE MADE IN ABSENCE OF INCRIMINATING EVIDENCE FOUND DURING SEARCH TO SUBSTANTIATE THE ADDITION. 3. BRIEFLY STAT ED THE FACTS GIVING RISE TO THIS CASE ARE THAT THE SEARCH AND SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT, 1961 (FOR THE SHORT THE ACT ) WAS CARRIED OUT IN VIPUL GROUP OF CASES ON 01.06.2006 DURING WHICH THE FLAG SHIP OF THE GROUP M/S VIPUL LTD. AND T HEIR DIRECTORS WERE ALSO COVERED. THE SAID SEARCH ACTION WAS ALSO CONDUCTED AT THE RESIDENCE OF THE ASSESSEE SHRI PUNEET BERIWALA AT 15/10, SARVPRIYA VIHAR, NEW DELHI. ORIGINAL RETURN OF INCOME IN THIS CA S E WAS FILED ON 23.08.2005 DECLARING INCOME OF RS.16 ,93,520/. SUBSEQUENTLY NOTICE U/S 153A OF THE ACT WAS ISSUED AND SERVED ON THE ASSESSEE ITA NO. 1021/DEL/2012 3 ON 20.03.2007 IN RESPONSE TO WHICH RETURN OF INCOME DECLARING INCOME FOR RS.2,8 1 ,39,100/ - WAS FILED ON 26.07.2007. THE RETURN WAS SUBSEQUENTLY REVISED ON 24.12.2008 FOR TAXABLE INCOME OF RS.2,85,39,100/ - WHICH INCLUDED THE ADDITIONAL AMOUNT OF RS.2,62,60,015/ - WHICH WAS SURRENDERED U/S 132(4) OF THE ACT RELATABLE TO AY 2005 - 06 BY THE ASSESSEE. THE ASSESSMENT U/S 153A R.W.S. 143(3) OF THE ACT WAS COMPLETED ON A TOTAL TAXA BLE INCOME OF RS.3,01,73,370/ - . THE AO MADE ADDITION OF RS.15,50,000/ - U/S 69B OF THE ACT ON ACCOUNT OF UNEXPLAINED INVESTMENT AND ALSO MADE ADDITION OF RS.84,274/ - ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS. THESE ADDITIONS WERE DELETED BY THE CIT(A) BY PASS ING IMPUGNED ORDER. THE AGGRIEVED REVENUE BEFORE THIS TRIBUNAL WITH THE GROUNDS MENTIONED HEREINABOVE. GROUND NO S . 1& 2 4. THE LD. DEPARTMENTAL REPRESENTATIVE POINTED OUT PAGES 16,25 & 26 OF THE IMPUGNED ORDER OF THE CI T(A) AND SUBMITTED THAT THE CIT(A) H AS ERRED IN VIOLATION OF RULE 46A OF THE INCOME TAX RULE, 1962 BY NOT FOLLOWING THE DECISION OF THE HON BLE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF CIT V S. MANISH BUILD WELL PVT. LTD. [2011] 16 TAXMANN.COM 27 (DELHI) WHEREIN IT WAS HELD THAT THERE A RE TWO STAGES ALL CONSIDERING AND REMAINED OF ADDITIONAL EVIDENCE FIRST BEFORE ADMISSION OF ADDITIONAL EVIDENCE AND SECOND AFTER ADMISSION OF ADDITIONAL EVIDENCE AND ASSESSING OFFICER SHOULD BE GIVEN ITA NO. 1021/DEL/2012 4 OPPORTUNITY TO COMMENT ON THE ADMISSIBILITY AS WELL AS M ERITS OF THE ADDITIONAL EVIDENCE ON BOTH THE STAGES. 5. REPLYING TO THE ABOVE, THE LD. ASSESSEE S REPRESENTATIVE (AR) SUBMITTED THAT THERE IS NO ADJUDICATION OF ADDITIONAL EVIDENCE UNDER R ULE 46A OF THE INCOME TAX RULES EXPRESSLY BUT WHEN THERE IS A DETAIL S OF EXPLANATION AND DELIBERATIONS ON THE ADMISSIBILITY AND CONSIDERATION OF ADDITIONAL EVIDENCE THEN IT WOULD BE PRESUME THAT THE APPLICATION HAS BEEN CONSIDERED PROPERLY AND ADDITIONAL EVIDENCE SOUGHT TO BE ADMITTED HAS BEEN ADMITTED AND CONSIDERED AFTER CONSIDERING THE REMAND REPORT OF THE AO. 6. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSION, WE ARE OF THE VIEW THAT FOR FILING ADDITIONAL EVIDENCE UNDER R ULE 46A OF THE I.T. RULES THE APPELLANT ASSESSEE SHALL NOT BE ENTITLED TO PRODUCE ANY EVIDENCE WHETH ER ORAL OR DOCUMENTARY EVIDENCE PRODUCED BEFORE HIM DURING COURSE OF PROCEEDING BEFORE THE AO EXCEPT IN FOUR CIRCUMSTANCES MENTIONED IN SUB RULE 1 OF RULE 46A OF THE RULES. 7. IN THE PRESENT CASE, THE AO DECIDED THE ISSUE WITH FOLLOWING CONCLUSION AND OBS ERVATION: - 7. THE ASSESSEE HAS ALSO SURRENDERED AN AMOUNT OR RS. 95.00.000/ - BEING ADVANCE PAID TO BHAI MOHAN SINGH IN CASH FOR PURCHASE OF PROPERTY AT PRITHVI RAJ ROAD. DURING THE COURSE OF SURVEY ON 19.9.2008 PAGE NO.51 TO 60 OF ANNEXURE A - I, WAS SEIZE D BY PARTY B - 2 WHICH RELATED TO A PROPERTY TRANSACTION BETWEEN THE ASSESSEE AND BHAI MANJIT SINGH, HUF FOR PURCHASE OF PROPERTY AT ITA NO. 1021/DEL/2012 5 28 - A. PRITHVI RAJ ROAD, NEW DELHI. THESE DOCUMENTS REVEAL THAT PAYMENTS IN CASH AS WELL AS BY CHEQUES AMOUNTING TO RS.1,64,5 0,000/ - HAS BEEN MADE TO BHAI MANJIT SINGH (HUF) BY THE ASSESSEE WHICH IS EVIDENT FROM RECEIPT OF BHAI MANJIT SINGH DATED 3.1.2005 (PAGE NO.51 OR ANNEXURE A - I). THE ASSESSEE WAS ASKED TO RECONCILE THE PAYMENTS MADE FOR PURCHASE OF THIS PROPERTY AND SUBMIT DETAILS OF SOURCE OF INVESTMENT. 7.1 THE ASSESSEE HAS SUBMITTED THAT PART OF THE CONSIDERATION AMOUNTING TO RS. 5 4,00,000 / - HAS BEEN MADE BY CHEQUES AND AN AMOUNT OF RS.95,00,000/ - HAS BEEN PAID IN CASH WHICH WAS SURRENDERED DURING THE COURSE OF SEARCH ON 1.6.2006 AND HAS BEEN OFFERED AS ADDITIONAL INCOME DURING THE YEAR. AS PER SEIZECL DOCUMENTS, TOTAL PAYMENT RECEIVED BY SH. BHAI MANJIT SINGH AMOUNTED TO RS. 1, 64, 50 ,000 / - AGAINST WHICH THE ASSESSEE HAS SHOWN PAYMENT OF RS. 1, 49.00 , 000 / - ONLY. THE ASSESSEE H AS NOT FURNISHED ANY EXPLANATION IN RESPECT OF BALANCE PAYMENT OF RS. 15,50,000/ - . SINCE THE ASSESSEE HAS FAILED TO FURNISH THE DETAIL OF SOURCE OF PAYMENT THE AMOUNT OF RS. 15,50,000/ - - IS ADDED AS UNEXPLAINED INVESTMENT U/S 69B OF I.T. ACT. 8. FROM RELEV ANT PART OF THE IMPUGNED ORDER OF THE CIT(A) , WE NOTE THAT IN THE APPLICATION SUBMITTED BY THE ASSESSEE UNDER RULE 46A OF THE INCOME TAX RULES ASSESSEE SUBMITTED THAT THE SAME VIDE LETTER DATED 18.05.2011 AND IN THE PRAYER CLAUSE IT HAS BEEN MENTIONED THAT THE ASSESSEE WAS NOT ALLOWED OPPORTUNITY TO RECONCILE THE INVESTMENTS AS PER SEIZED MATERIAL AND REFLECT IN THE STATE OF AFFAIRS COMPLIED BY THE ASSESSEE, THEREFORE, THE ADDITIONAL EVIDENCE MAY KINDLY BE ADMITTED AND CONSIDERED. THE CIT(A) SEND APPLICATIO N ALONG WITH ADDITIONAL EVIDENCE TO THE AO FOR HIS REMAND WHICH WAS SUBMITTED VIDE LETTER DATED 26.05.2011OBJECTING TO THE ADMISSION OF ADDITIONAL EVIDENCE AND WITHOUT MAKING ANY COMMENT ON THE MERITS OF THE ADDITIONAL EVIDENCE. THE ITA NO. 1021/DEL/2012 6 ASSESSING OFFICER ALSO PLACED REJOINDER DATED 10.06.2011 BEFORE THE CIT(A) AND SUBMITTED THAT APPLICATION UNDER RULE 46A BEING FILED AS PER PROVISIONS OF THE ACT MAY PLEASE BE CONSIDERED FAVORABLY AND ALSO SUBMITTED DETAILED COMMENTS ON THE MERITS OF THE ADDITIONAL EVIDENCE SOUG HT TO BE ADMITTED BY THE ASSESSEE. THE ASSESSEE ALSO PLACED REPLY DATED 07.12.2011 TO THE REMAND REPORT DATED 26.05.2011 AND REJOINDER DATED 10.06.2011 OF THE AO. FROM OPERATING PART IN PARA 5 AT PAGE 25 OF THE IMPUGNED ORDER ON THIS ISSUE WE NOTE THAT THE CIT(A) GRANTED RELIEF FOR THE ASSESSEE WITH FOLLOWING OBSERVATIONS AND CONCLUSION: - 5. FINDING ON GROUND OF APPEAL NO.1 : - ON A CONSIDERATION OF THE FINDING IN THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLANT AS WELL AS THE REMAND REPORT OF THE AO AND COUNTER SUBMISSIONS THEREON FILED BY THE APPELLANT IT IS OBSERVED THAT THE FACTS RELATING TO THE ADDITION ON ACCOUNT OF INVESTMENT U/S 69B FOR RS.15,50,000/ - , WHICH RELATES TO ADVANCES GIVEN IN CASH TO ONE BHAI MOHAN SINGH( HUF) FOR PURCHASE OF PROP ERTY AT PRITHVI RAJ ROAD LIES IN A NARROW COMPASS. TO BRIEFLY RECAPITULATE THE FACTS, INITIALLY THERE HAD BEEN A SEARCH AND SEIZURE ACTION U/S 132 IN CASE OF THE APPELLANT ON 01.06.06 WHEN THE ASSESSEE MADE A DISCLOSURE FOR RS. 2,62,60,015/ - FOR ASSESSMENT YEAR 2005 - 06 U/S 132(4) OF THE IT ACT. THIS ADDITIONAL INCOME FOR RS. 2,62,60,015/ - INCLUDED THE AMOUNT OF RS.95 LACS BEING ADVANCE PAID IN CASH TO BHAI MANJIT SINGH FOR PURCHASE OF PROPERTY AT PRITHVI RAJ ROAD WHICH CONSEQUENTLY WAS INCLUDED IN THE COMPU TATION AND RETURN OF INCOME FILED BY THE APPELLANT ON 26.07.07 ( REVISED ON 24.12.08). MEANWHILE A SURVEY U/S 133A WAS CONDUCTED ON THE ASSESSEE'S BUSINESS PREMISES AT GURGAON ON 19.09.08 DURING WHICH CERTAIN DOCUMENTS WERE FOUND. FROM PAGE NO. 51 OF ANNEX URE A - I, IN PARTICULAR IT WAS NOTED THAT BHAI MANJIT SINGH HAD RECEIVED AN AMOUNT OF RS. 1,64,50,000/ - IN CASH AS WELL AS BY CHEQUE. THIS DOCUMENT IS DATED 03.01.05. AS THE ASSESSEE HAD ITA NO. 1021/DEL/2012 7 SUBMITTED THAT THE TOTAL PAYMENT MADE TO BHAI MANJIT SINGH UPTILL THE END OF THE FINANCIAL YEAR WAS ONLY THE RS. 1,49,00,000/ - WHICH COMPRISED OF A PAYMENT OF RS.54 LACS THROUGH SEVERAL CHEQUES AND ANOTHER RS.95 LACS IN CASH AND WHICH HAD BEEN SURRENDERED DURING THE COURSE OF SEARCH ON 01.06.06 THEREFORE CONSIDERING THE DIFF ERENCE BETWEEN THE AMOUNT REFLECTED IN THE IMPOUNDED RECEIPT AT PAGE 51 DATED 03.01.05 (RS. 1,64,50,000/ - )AND THE AMOUNT AS SHOWN HAVING PAID TO BHAI MANJIT SINGH ( RS. 1,49.00.000/) AN AMOUNT OF RS. 15.50,000/ - HAS BEEN ADDED .AS UNEXPLAINED INVESTMENT U/ S 698 OF THE IT ACT BY THE AO. 9. IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES AS NOTED ABOVE, WE ARE OF THE VIEW THAT FROM THE OPERATIVE PART IN PARA 7 AND 7.1 OF THE ASSESSMENT ORDER AS REPRODUCED HEREINABOVE, WE NOTE THAT THE AO ASKED TO RECONCILE TH E PAYMENTS MADE FOR PURCHASE OF PROPERTY AND DETAILS OF SOURCE OF INVESTMENT AND THE ASSESSEE TRY TO EXPLAIN THE SAME ON THE BASIS OF SEIZED DOCUMENTS BUT THE AO WAS NOT SATISFIED AND HE PROCEEDED TO MAKE ADDITION IN RESPECT OF UNEXPLAINED AMOUNT OF RS.15, 50,000/ - THE ASSESSING OFFICER RECORDED THAT THE ASSESSEE HAS FAILED TO FURNISH THE DETAILS OF SOURCE OF PAYMENTS. IN THE LIGHT OF OBSERVATION MADE BY THE AO, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER ASKED TO RECONCILE THE PAYMENT MADE FOR PURCHASE OF PROPERTY BUT THE AO DID NOT PROVIDE SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO ADDUCE EVIDENCE RELEVANT TO THIS ISSUE. IN THIS SITUATION, CLAUSE (D) OF SUB RULE (1) OF RULE 46A OF THE RULES PROVIDE THAT WHERE THE ASSESSING OFFICER HAS MADE THE ORDER APPELL ATE AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL THEN THE ADDITIONAL EVIDENCE CAN BE ADMITTED AND CONSIDERED. IN THE PRESENT CASE, THE PRAYER OF THE ASSESSEE FOR ADMISSION OF ITA NO. 1021/DEL/2012 8 ADDITIONAL E VIDENCE FALLS WITHIN THE PURVIEW OF SAID PROVISION AND WE HAVE NO HESITATION TO HOLD THAT THE ADDITIONAL EVIDENCE WAS RIGHTLY ADMITTED DURING FIRST APPELLATE PROCEEDING. HOWEVER, AS WE HAVE ALREADY NOTED THAT THE CIT(A) HAS NOT EXPRESSLY MADE ANY OBSERVATI ON AND CONCLUSION FOR ADMISSIBILITY OF ADDITIONAL EVIDENCE BUT IMPLIEDLY WHEN THE CIT(A) PROCEEDED TO CONSIDER THE ADDITIONAL EVIDENCE IT CAN SAFELY TO PRESUME THAT THE ADDITIONAL EVIDENCE HAS BEEN ADMITTED AND CONSIDERED BY THE CIT(A) AFTER CALLING REMAND ON ADMISSIBILITY AND REJOINDER ON MERITS AND IN VIEW OF OUR FOREGOING DISCUSSION THE CIT(A) WAS CORRECT UP TO THIS EXTENT IN ADMITTING ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE DURING FIRST APPELLATE PROCEEDINGS. . 10. NOW, WHEN WE CONSIDER THE RATIO OF THE JUDGMENT OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VVS. MANISH BUILD WELL PVT. LTD. (SUPRA) IT IS VIVID THAT AFTER ADMITTING THE ADDITIONAL EVIDENCE THE SAME CAN ONLY BE CONSIDERED AFTER ALLOWING THE AO TO COMMENT ON THE MERITS OF THE ADDITIONAL EVIDENCE AND ONLY AFTER CONSIDERING THE REMAND REPORT ON MERIT THE ADDITIONAL EVIDENCE MAY BE CONSIDERED FOR ADJUDICATION. IN THE PRESENT CASE, ON CAREFUL PERUSAL OF THE REMAND REPORT DATED 26.05.2011 AND REJOINDER DATED 10.06.2011 OF THE A O WE NOTE THAT THE AO HAS ELABORATELY OBJECTED TO THE ADMISSIBILITY OF ADDITIONAL EVIDENCE AND ALSO SUBMITTED COMMENTS ON MERITS ALONG WITH NO OBJECTION TO THE ADMISSIBILITY OF ADDITIONAL EVIDENCE . FROM OPERATIVE PART OF THE ORDER OF THE CIT(A), WE NOTE TH AT THE CIT(A) CONSIDERED ADDITIONAL EVIDENCE ITA NO. 1021/DEL/2012 9 AND GRANTED RELIEF FOR THE ASSESSEE BY PROPERLY FOLL OWING REQUIRED PROCEDURE OF R ULE 46A OF THE RULES AS PER RATIO OF THE DECISION OF HON BLE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF CIT VVS. MANISH BUILD WELL PVT. LTD. (SUPRA) AND THERE IS NO VIOLATION OF RULE 46A OF THE RULES IN THE IMPUGNED ORDER . 11. ON CAREFUL CONSIDERATION OF ABOVE CONCLUSION OF THE CIT(A) WE FURTHER OBSERVE THAT ASSESSEE SUBMITTED RECONCILIATION OF PAYMENTS MADE TO M/S BHAI MANJEET SINGH (HUF) SHOWING DETAILS OF PAYMENTS AMOUNTING TO RS.1,69,00,000/ - , CONFIRMED COPY OF LEDGER ACCOUNT OF THE ASSESSEE. SH. PUNIT BERIWALA IN THE BOOKS OF ACCOUNTS OF M/S ENTREPRENEURS (CALCUTTA) P. LTD. AS ON 31.03.2005 AND AS ON 31.03.2006, CONFIRMED C OPY OF JOURNAL ENTRY IN THE BOOKS OF COMPANY M/S ENTREPRENEURS (CALCUTTA) P. LTD. DATED 19.11.2006 AND SET OF BALANCE SHEETS ALONG WITH SCHEDULES AS ON 31.03.2005 OF M/S ENTREPRENEURS (CALCUTTA) P. LTD. SHOWING BALANCE OF M/S BHAI MANJEET SINGH (HUF) AMOU NTING TO RS.20,00,000/ - WHICH ARE ALSO AVAILABLE BEFORE US FROM PAGES 116 TO 137 OF ASSESSEE S PAPER BOOK. 12. ON VALUATION OF ADDITIONAL EVIDENCE WHICH WAS PROPERLY ADMITTED AND CONSIDERED BY THE CIT(A) WE OBSERVE THAT THAT FROM THE COPY OF THE BANK ACCO UNT OF M/S ENTREPRENEURS (CALCUTTA) P. LTD. IT IS CLEAR THAT AN AMOUNT OF RS.20 LACS HAS BEEN PAID TO BHAI MANJIT SINGH (HUF) THROUGH CHEQUE NO. 871104 ON 03.06.2004. FROM THE LETTER OF CONFIRMATION ISSUED BY M/S ENTREPRENEURS (CALCUTTA) P. LTD. DATED 02. 12.2011 IT IS ALSO CLEAR THAT THE ITA NO. 1021/DEL/2012 10 AFORESAID AMOUNT OF RS.20 LACS LYING DEBITED IN THE ACCOUNT OF BHAI MANJIT SINGH (HUF) HAS BEEN SUBSEQUENTLY TRANSFERRED TO THE ACCOUNT OF THE ASSESSEE M R. PUNIT BERIWALA ON 19.11.2005. THESE FACTS FURTHER GET SUPPORTED FR OM THE DETAILS OF CHEQUE GIVEN TO BHAI MANJIT SINGH (HUF) BY THE ASSESSEE AS THE FIRST PAYMENT OF CHEQUE FOR RS.10 LACS WAS GIVEN AS EARLY AS 24.04.2004 FROM THE INDIAN OVERSEAS BANK ACCOUNT OF THE ASSESSEE WHICH ALSO MAKE IT CLEAR THAT THE PAYMENT FROM M/ S ENTREPRENEURS (CALCUTT) P. LTD. MADE TO BHAI MANJIT SINGH ON 03.06.2004 WAS ON BEHALF OF THE ASSESSEE. UNDER ABOVE NOTED FACTS AND CIRCUMSTANCES, WE ARE AN AGREEMENT WITH THE CONCLUSION OF THE CIT(A) THAT THE EXPLANATION GIVEN BY THE ASSESSEE WAS REASONA BLE AND PLAUSIBLE WHICH MAKES THE TOTAL INVESTMENT MADE BY THE ASSESSEE FOR PURCHASE OF PROPERTY SITUATED AT PRITHVI RAJ ROAD AS ON 31.03.2005 AT RS.1,69,00,000/ - INSTEAD OF RS.1,49,00,000/ - AS SHOWN IN THE STATEMENT OF AFFAIRS , WHICH CLEARLY EXPLAINED THE SOURCE OF INVESTMENT FOR RS.15,50,000/ - . 13. AS THE ASSESSEE IS PROPERLY EXPLAINED THAT THE TOTAL PAYMENT MADE TO BHAI MANJIT SINGH (HUF) UP TO THE END OF FINANCIAL YEAR 2004 - 05 PERTAINING TO ASSESSMENT YEAR UNDER CONSIDERATION 2005 - 06 ONLY RS.1,49,00,00 0/ - WHICH WAS COMPRISED OF PAYMENT OF RS.54 LACS SEVERAL CHEQUES AND PAYMENT OF RS. 95 ,00,000/ - IN CASH WHICH HAD BEEN SURRENDERED BY THE ASSESSEE DURING THE COURSE OF SEARCH AS 01.06.2006 THEREFORE, THE AO MADE DISALLOWANCE U/S 69B OF THE ACT AS UNEXPLAINE D INVESTMENT OF RS.15,50,000/ - CONSIDERING THE ITA NO. 1021/DEL/2012 11 DIFFERENCE BETWEEN THE AMOUNT REFLECTED IN THE AMOUNT RECEIPT DATED 03.01.2005. AS WE HAVE ALREADY NOTED ABOVE THAT THE CIT(A) RIGHTLY ADMITTED AND CONSIDERED THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND THE CONCLUSION OF THE FIRST APPELLATE AUTHORITY IS AS PER FACTS REVEALED FROM THE ADDITIONAL EVIDENCE. ON THE BASIS OF FOREGOING DISCUSSION, WE ARE INCLINED TO HOLD THAT THE ASSESSEE IS PROPERLY EXPLAINED THE DIFFERENCE OF RS.15,50,000/ - MADE BY THE ASSES SEE FOR PURCHASE OF PROPERTY SITUATED AT PRITHVI ROAD FROM BHAI MANJIT SINGH (HUF) AND THEREFORE, ADDITION MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S 69B OF THE ACT CANNOT BE HELD AS SUSTAINABLE AND THE CIT(A) WAS RIGHT IN DIRECTING THE AO TO DELETE THE SAME. WE ARE UNABLE TO SEE ANY INFIRMITY, PERVERSITY OR ANY OTHER VALID REASON TO INTERFERE WITH THE CONCLUSION OF THE CIT(A) ON THIS ISSUE AND THEREFORE, WE UPHELD THE SAME. ACCORDINGLY, GROUND NOS. 1 & 2 OF THE REVENUE BEING DEVOID OF MERITS D ESERVES TO BE DISMISSES AND WE DISMISS THE SAME. GROUND NO S .3 AND 4 14 . APROPOS GROUND NOS. 3 AND 4, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.84,274/ - MADE BY THE AO ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS. THE LD. CIT(A) HAS GROSSLY ERRED IN HOLDING THAT NO ADDITION COULD BE MADE IN ABSENCE OF INCRIMINATING EVIDENCE FOUND DURING SEARCH TO SUBSTANTIATE THE ADDITION. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSING ITA NO. 1021/DEL/2012 12 OFFICER RIGHTLY HO LD ING THAT IN VIEW OF STATUS AND SIZE OF THE ASSESSEE FAMILY EXPENDITURE OF HOUSEHOLD/DRAWINGS OF THE ASSESSEE CAN BE ESTIMATED AT RS.3,00,000/ - PER ANNUM AND AFTER CONSIDERING THE TOTAL CONTRIBUTION MADE BY THE ASSESSEE AND HER WIFE THE BALANCE AMOUNT OF RS.84,274/ - WAS RIGHTLY TREATED AS UNEXPLAINED EXPENDITURE U/S 69C OF THE ACT. THE LD. DR SUBMITTED THAT THE CIT(A) WITHOUT ANY JUSTIFIED REASON DELETED THE SAID ADDITION THEREFORE, THE IMPUGNED ORDER MAY BE SET ASIDE BY RESTORING THAT T HE OF THE AO. 15 . REPLYING TO THE ABOVE, LD. ASSESSEE S REPRESENTATIVE (AR) SUPPORTED THE IMPUGNED ORDER AND SUBMITTED THAT NO ADDITION U/S 1 53A R.W.S 143(3) CAN BE MADE UNLESS THERE ARE CERTAIN INCRIMINATING DOCUMENTS OR MATERIAL FOUND IN THE SEARCH. THE LD. AR FURTHER SUBMITTED THAT NO INCRIMINATING DOCUMENT OR MATERIAL FOR SUBSTANTIATING UNACCOUNTED ADDITION ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWAL WAS FOUND DURING THE SEARCH AND THERE WAS NO MATERIAL TO SUPPORT THE VIEW OF THE AO THAT UNACCOUNTED EXPENSE S WERE ACTUALLY INCURRED. THE LD. AR FINALLY SUBMITTED THAT FOR MAKING ADDITION U/S 69C OF THE ACT IT IS INCUMBENT UPON THE AO TO BRING OUT THIS ALLEGATION OF FACT THAT THE ASSESSEE ACTUALLY INCURRED UNEXPLAINED EXPENSES WHICH ATTRACT ADDITION U/S 69C OF T HE ACT. 16 . ON CAREFUL CONSIDERATION OF ABOVE SUBMISSION , FIRSTLY , WE NOTE THAT THE CIT(A) GRANTED RELIEF FOR THE ASSESSEE ON THE FOLLOWING CONCLUSION AND OBSERVATION: - ITA NO. 1021/DEL/2012 13 6. FINDING ON GROUND OF APPEAL NO.2 : - AS REGARDS THE ISSUE OF ADDITION TO INCOME M ADE FOR RS. 84,274/ - ON ACCOUNT OF LOW HOUSE HELD WITHDRAWAL THE APPELLANT'S ARGUMENTS ARE TWOFOLD. FIRSTLY, IT HAS BEEN SUBMITTED THAT APART FROM THE CASH DRAWINGS OF RS. 1, 05,000 / - MADE BY THE APPELLANT HE HAS ALSO MADE SEPARATE WITHDRAWAL FOR RS. 35,050 / - FOR SCHOOL FEES AND RS. 78,612/ - FO R LIC PREMIUM. FURTHER SMT. SUN ITA BERIWALA HAS ALSO APART FROM THE CASH DRAWINGS OF RS. 66,618/ - MADE A SEPARATE WITHDRAWAL OF RS.1,10,726 / - AS L IC PREMIUM. THAT THUS THE CONSOLIDATED DRAWINGS OF THE ASSESSEE AND HIS S POUSE COMES TO RS. 3,96,007/ - , WHICH IS ARGUED TO BE REASONABLE ACCORDING TO THE STATUS OF THE FAMILY. IT HAS ALSO BEEN ADDED THAT THERE WAS FOREIGN TRAVEL DURING THE 'YEAR AND THE EXPENSES OF LOCAL TRAVELLING ARE REIMBURSED FROM THE COMPANIES WHERE ASSESS EE IS DESIGNATED AS A DIRECTOR. ALSO THAT THERE ARE NO MAJOR CEREMONIES ORGANIZED BY THE ASSESSEE FOR WHICH ANY EXTRA EXPENSES ARE REQUIRED TO BE INCURRED. THE APPELLANT HAS ALSO CITED SECTION 69C AND ARGUED THAT FOR MAKING AN ADDITION TO INCOME UNDER THI S SECTION THE REVENUE HAS TO PROVE THAT THE EXPENDITURE WAS ACTUALLY BEING INCURRED. THAT THERE HAS BEEN NO MATERIAL FOUND DURING THE SEARCH TO SUPPORT THE VIEW OF THE AO THAT UNACCOUNTED EXPENSES WERE ACTUALLY INCURRED. THE OTHER ARGUMENT OF THE APPELLANT IS THAT NO ADDITION U / S 153A CAN BE MADE UNLESS THERE ARE CERTAIN DOCUMENTS, OR MATERIAL FOUND IN THE SEARCH. RELIANCE IN THIS REGARD HAS BEEN PLACED ON THE DECISION IN ANIL KUMAR BHATIA 1 ITR (TRIB.) 484 & OTHER CASES. ON A CONSIDERATION OF THE TOTALITY OF THE SUBMISSION OF THE APPELLANT AND THE CASE LAWS RELIED UPON AND CONSIDERING THE FACT THAT NO INCRIMINATING EVIDENCE FOR SUBSTANTIATING UNACCOUNTED ADDITION DURING THE YEAR HAS BEEN FOUND DUFING THE SEARCH ADDITION MADE FOR RS.84,274/ - ON ACCOUNT OF LO W HOUSEHOLD WITHDRAWAL IS DIRECTED TO BE DELETED. 17 . ON CAREFUL CONSIDERATION OF THE CONCLUSION OF THE AO AS WELL AS FINDINGS OF THE CIT(A), WE NOTE THAT PERHAPS THE AO PROCEEDED TO MAKE ADDITION ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWAL/UNEXPLAINED EXPEND ITURE U/S 69C OF THE ACT. LD. AO ESTIMATED THE HOUSEHOLD EXPENSES AT RS.3,00,000/ - PER ANNUM , BUT WE ARE UNABLE TO SEE ANY BASIS OR COGENT REASON FOR THIS ESTIMATION. LD. CIT(A) ITA NO. 1021/DEL/2012 14 OBSERVED THAT AS PER PROVISION OF SECTION 69C OF THE ACT THE ONUS WAS ON THE A O WHETHER THE EXPENDITURE ESTIMATED BY HIM WAS ACTUALLY SPENT FOR THE HOUSEHOLD PURPOSES WHICH HE CLAIMS TO HAVE ESTABLISHED BUT THE AO HAS NOT ESTABLISHED BY WAY OF ANY INCRIMINATING MATERIAL OR DOCUMENTARY EVIDENCE THAT ADDITIONAL EXPENDITURE WAS ACTUALL Y INCURRED BEYOND HOUSEHOLD WITHDRAWAL OF THE ASSESSEE AND HER SPOUSE . IN THIS SITUATION, WE FIND THAT THE ADDITION IN THIS CASE HAS BEEN MADE BY THE AO ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS IN A PURELY ARBITRARY MANNER WITHOUT ANY BASIS AND INCRIMINATIN G DOCUMENTARY EVIDENCE FOUND DURING THE SEARCH SUPPORTING THE VIEW TAKEN BY THE AO. UNDER THESE CIRCUMSTANCES, WE ARE INCLINED TO HOLD THAT THE CIT(A) HAS TAKEN A CORRECT VIEW THAT FOR MAKING AN ADDITION U/S 69C OF THE ACT TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS, THE REVENUE HAS TO PROVE THAT THE EXPENDITURE WAS ACTUALLY BEING INCURRED BY THE ASSESSEE DURING THE RELEVANT FINANCIAL PERIOD. WE ALSO AN AGREEMENT OF THE CONCLUSION OF THE CIT(A) THAT NO ADDITION IN REASSESSMENT PROC EEDING U/S 153A R.W.S. 143(3) OF THE ACT CAN BE MADE UNLESS THERE ARE CERTAIN DOCUMENTS OR INCRIMINATING FOUND DURING THE COURSE OF SEARCH SUBSTANTIATING UNACCOUNTED EXPENDITURE. HENCE, WE ARE UNABLE TO SEE ANY INFIRMITY, PERVERSITY OR ANY OTHER VALID REAS ON TO INTERFERE WITH THE IMPUGNED ORDER OF THE CIT(A) ON THIS ISSUE AND WE UPHELD THE SAME. ACCORDINGLY, THE GROUND NOS. 3 AND 4 OF THE REVENUE BEING DEVOID OF MERITS ARE DISMISSED. ITA NO. 1021/DEL/2012 15 18 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 2 9 TH JULY , 2015. SD/ - SD/ - ( J.S. REDDY ) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 9 TH JULY , 2015. AKS/ - COPY FORWAR DED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI