ITO, BUNDI V. SHRI LOKESH THAKUR, BUNDI

ITA 1050/JPR/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7886 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-08-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 02-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROSHANTA MEENA
• Assessee Lawyers: MAHENDRA KUMAR JAIN
• Keywords: Unexplained investment; Opportunity of being heard; Additional evidence; Reason to believe
• Section: 143(3); 133(6); 147; 131; 148; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.K. SAINI ) ITA NO. 1050/JP/2011 ASSESSMENT YEAR : 2005-06 PAN: ACHPT 8879 P THE ITO VS. SHRI LOKESH THAKUR WARD- BUNDI S/O LATE SHRI BHIKAM SINGH BUNDI NEW COLONY, BUNDI (APPELLANT) (RESPONDENT) DEPARTMENT BY : MISS. ROSHANTA MEENA ASSESSEE BY : SHRI MAHENDRA KUMAR JAIN DATE OF HEARING : 23.08.2012. DATE OF PRONOUNCEMENT: .28.08.2012 ORDER PER N.K. SAINI, A.M. THIS IA AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 29-09-2011 OF THE LD. CIT(A), KOTA FOR THE ASSESSMENT YEAR 2005-06. 2.1 THE FIRST ISSUE IN THIS APPEAL RELATES TO THE A DDITION OF RS. 12.50 LACS ON ACCOUNT OF UNEXPLAINED DEPOSITS. 2.2 THE FACTS RELATING TO THIS ISSUE IN BRIEF ARE T HAT THE ASSESEE FILED HIS RETURN OF INCOME ON 31-03-2006 DECLARING THE TOTAL INCOME OF RS 87,000/- AND AGRICULTURAL INCOME AT RS.65,000/- WHICH WAS PROCESSED U/S 143(1) OF TH E INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON 20-07-2006. SUBSEQUEN TLY, THE AO NOTICED THAT THE ASSESSEE HAD MADE CAPITAL INVESTMENT OF RS.12.50 LACS WITH A OP M/S KIRODI MAL & PARTY, 9 LEENA MANSION CIVIL LINES, JAIPUR. THE SOURCE OF SAID INV ESTMENT WAS NOT FOUND TO BE EXPLAINED / GENUINE. THEREFORE, THE AO ISSUED NOTI CE U/S 148 OF THE ACT BY HAVING THE 2 REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX TO THE ABOVE EXTENT HAD ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. SINCE THE ASSESSEE HAD FAILED TO MAKE COMPLIANCE OF THE NOTICE U/S 148 OF THE ACT W ITHIN THE PRESCRIBED TIME, THE AO FRAMED THE ASSESSMENT U/S 144 OF THE ACT. THE AO O BSERVED THAT THE ASSESSEE HAD MADE DEPOSITS OF RS. 12.50 LACS AND TIME AND AGAIN HE WA S REQUIRED TO EXPLAIN THE SOURCE OF THE SAID DEPOSITS WITH SUPPORTING DOCUMENTARY EVIDENCES . THE AO POINTED OUT THAT THE ASSESSEE VIDE LETTER DATED 07-07-2010 HAD STATED AS UNDER:- THAT HE MADE INVESTMENT OF RS. 12.50 LACS DURING THE FINANCIAL YEAR 2004-05 WITH AOP M/S. KIRODIMAL & PARTY, JAIPU R BUT THE DD NO & DATE WHICH YOU MENTIONED IN LETTER IS NOT TRUE. DUR ING THE YEAR, THE ASSESSEE INVESTED TOTAL AMOUNT OF RS. 12,50,000/-. ON 28-05-2004, THE ASSESSEE INVESTED RS. 6,50,000/- VIDE DD NO. 624443 AND BALANCE AMOUNT OF RS. 6,00,000/- VIDE DD NO624497 ON 03-06-2004. S TATEMENT OF AOP ENCLOSED HEREWITH. SHARE OF THE ASSESSEE IN AOP WAS @ 5.25% AND ACCORDING TO STATEMENT OF CAPITAL ACCOUNT OF AOP TO TAL AMOUNT DEPOSITED OF RS. 12,50,000/- AND DURING THE YEAR TOTAL WITHDR AWALS OF 10,60,000/- RECORDED AND CLOSING BALANCE OF RS. 19,00,000/- ON 31-03-2005 WAS RECORDED BY THE ASSESSEE IN HIS BALANCE SHEET. TOTA L AMOUNT FOR INVESTMENT OF RS. 12,50,000/- WAS TAKEN FROM M/S. VIJENDRA SIN GH HADA & PARTY (AOP). 2.3 SUBSEQUENTLY, THE ASSESSEE FILED THE WRITTEN RE PLY DATED 23-07-2010 BY STATING AS UNDER:- DURING THE F.Y. 2004-05, THE ASSESSEE RECEIVED A SUM OF RS. 12.50 LACS FROM M/S. VIJENDRA SINGH HADA & PARTY T O MAKE DEPOSIT WITH M/S KIRODI MAL & PARTY, JAIPUR. STATEMENT AND CONFI RMATION OF SAID AOP HAVE ALREADY PRODUCED BY THE ASSESSEE ON 16-07-2010 . THE MATTER OF THE ASSESSEE IS ABOVE SIX YEARS OLD NAMELY M/S. VIJENDR A SINGH HADA & PARTY WAS DISSOLVED. THE ACCOUNT BOOKS OF THE SAID AOP WA S KEPT AT HEAD OFFICE SITUATED AT UDAIPUR AND TO CALL THE STATEMEN T OF THE ASSESSEE HAVE ALREADY WRITTEN A LETTER AND SENT TO HO AT UDIAPUR BUT ON THE DATE 23-07- 2010 SAME WAS NOT RECEIVED BY THE ASSESSEE. SO THE ASSESSEE CONTACTED THE HO AT UDAIPUR, TELEPHONICALLY THEY SAYS THAT IT WIL L BE PRODUCED AND SENT WITHIN 7-10 DAYS. 3 2.4 THE ASSESSEE VIDE WRITTEN STATEMENT DATED 06-08 -2010 REPEATED HIS EARLIER SUBMISSION AND ALSO STATED THAT AOP NAMELY M/S. VIJ ENDRA SINGH HADA & PARTY DEBITED THE AMOUNT OF RS. 6,50,000/- ON 24-05-2004 THROUGH PNB A/C NO. 370 VIDE CHEQUE NO. 850453 AND A SUM OF RS. 6,00,000/- WAS DEBITED ON 0 3-06-2004 THROUGH PNB BANK A/C NO. 370 VIDE CHEQUE NO. 850457, THESE ENTRIES WERE PROPERLY RECORDED IN THE STATEMENTS OF AOP IN LEDGER ACCOUNT OF ASSESSEE, THE SAME WAS RECORDED IN THE BALANCE SHEET AND CLOSING BALANCE WITH AOP OF RS. 3,19,722/- WAS ALSO RECORDED IN BALANCE SHEET AND THESE ENTRIES WERE CONFIRMED WITH THE STATEMENT OF AOP M/ S. VIJENDRA SINGH HADA & PARTY. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLANAT ION OF THE ASSESSEE BY OBSERVING THAT THE ASSESSEE FAILED TO FURNISH ANY SUPPORTING DOCUM ENTARY EVIDENCE WHICH COULD PROVE / SHOW THAT THE ABOVE VERSIONS / CONTENTIONS WERE COR RECT. THE AO ALSO MENTIONED THAT REPLY DATED 06-08-2010 WAS NOT ACCEPTABLE AS THE SA ME WAS NOT CONFIRMED BY M/S. VIJENDRA SINGH HADA & PARTY , BEING DID NOT BEAR AN Y SIGNATURE OF ITS MEMBER. ACCORDINGLY, THE AO MADE THE ADDITION OF RS. 12.50 LACS. 2.5 THE ASSESSEE CARRIED THE MATTER TO THE LD CIT( A) AND SUBMITTED AS UNDER: IN THIS REGARD IT IS VERY KINDLY SUBMITTED THAT A PPELLANT HAS DRAWN RS. 6,50,000/- AND 6,00,000/- ON 28 TH MAY, 2004 AND 3 RD JUNE, 2004 RESPECTIVELY FROM AOP M/S. VIJENDRA SING H HADA & PARTY WHERE HE IS ONE OF MEMBERS IN THE SHAPE OF TWO DDS ONE ON 28 TH MAY, 2004 NO 624443 OF RS. 6,50,000/- AND ANOTHER ON 3 RD JUNE, 2004 NO. 624497 OF RS. 6,00,000/- TOTALING TO RS. 12,50,000/- WAS DEPOSITED WITH AOP M/S KIRODI MAL & PARTY. THEREAFTER ON 30 TH MARCH, 2005 RS. 10 60,000/- WAS DRAWN BY THE APPELLANT FROM AOP M/S KIRODI MAL & PARTY AND REPAI D TO AOP M/S. VIJENDRA SINGH HADA & PARTY , CERTIFIED COPIES OF ACCOUNTS OF BOTH AOP M/S. VIJENDRA SINGH HADA & PARTY AND M/S KIRODI MAL & PARTY ARE ENCLOSED. IT IS VERY KINDLY SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS ENTIRE ABOVE FACTS/ DETAILS WERE EXPLAINED BEFORE THE LEARNED ITO. IT WAS ALSO SUBMITTED AT TH AT TIME THAT AOP M/S. VIJENDRA SINGH HADA & PARTY DEBITED THE AMOUN T RS. 4 6,50,000/- ON 28-05-2004 THROUGH PNB ACCOUNT NO. 37 0 VIDE CHEQUE NO. 850453 AND SUM OF RS. 6,00,000/- WAS DEB ITED ON 3-06- 2004 THROUGH PNB ACCOUNT NO. 370 VIDE CHEQUE NO. 85 0457 AND ALL THESE ENTRIES WERE PROPERLY RECORDED IN THE STATEME NT OF AOP LEDGER ACCOUNT IN THE NAME OF ASSESSEE AND SAME WER E REFLECTING IN BALANCE SHEET, ALL THESE ENTRIES WERE VERY CONFIRME D WITH THE STATEMENT OF AOP M/S. VIJENDRA SINGH HADA & PARTY. THE BANK STATEMENT OF ACCOUNTNO. 370 OF AOP M/S. VIJENDRA SI NGH HADA & PARTY AT PNB BANK KHOJA GATE ROAD, BUNDI WHICH IS JUST OPPOSITE TO INCOME TAX OFFICE, BUNDI IS HERE BY SUBMITTED FO R YOUR KIND PERUSAL. THEREFORE, IT WAS OPEN TO THE LD. ITO TO M AKE PROPER ENQUIRY, BUT WITHOUT DOING SO HE HAS ADDED RS. 12.5 0 LACS IN INCOME TO APPELLANT. IT IS ALSO VERY KINDLY SUBMITTED THAT THE LD. ITO H AS STARTED ACTUAL ASSESSMENT PROCEEDINGS ON 28 TH JUNE, 2010 AND COMPLETED EX-PART ASSESSMENT U/S 148 ON 17 TH AUG 2010 WHEREAS LIMITATION FOR COMPLETION OF ASSESSMENT WAS UPTO 31 ST DEC 2010. FURTHER IT IS ALSO VERY KINDLY SUBMITTED THAT SAID AOP M/S. VIJEN DRA SINGH HADA & PARTY HAS CLOSED HIS BUSINESS AND HIS OLD B OOKS WERE LYING AT UDAIPUR HEAD OFFICE. THEREFORE, APPELLANT WAS IN REQUIREMENT OF SOME MORE TIME TO PRODUCE CONFIRMATI ON OF CAPITAL ACCOUNT FROM THE SAID AOP M/S. VIJENDRA SINGH HADA & PARTY BECAUSE IT WAS OUT OF CONTROL FOR THE APPELLANT TO PRODUCE REQUIRED PAPERS IN SUCH A SHORT PERIOD AND WHEN DURING THE C OURSE OF ASSESSMENT PROCEEDINGS EVERY THING WAS BROUGHT IN T HE NOTICE OF THE LEARNED ITO THEN IT WAS OPEN TO HIM TO MAKE PRO PER ENQUIRY BUT WITHOUT DOING SO THE LD ITO WITHOUT ALLOWING RE ASONABLE OPPORTUNITY OF BEING HEARD IN THIS OLD ASSESSMENT A ND IN SUCH A SITUATION COMPLETED EX-PART ASSESSMENT AND MADE ADD ITION OF RS. 12,50,000/- IN THE INCOME OF THE APPELLANT WHICH IS NOT REASONABLE JUSTIFIED AND THEREFORE, REQUIRE TO BE DELETED. CASE LAW MENTIONED BY THE LD. ITO HAS NO RELEVANCY IN THE PRESENT CASE BECAUSE APPELLANT WAS READY TO PRODUCE EACH AND EVERY EVIDENCE BUT THE LD. ITO HAS NOT ALLOWED REAS ONABLE OPPORTUNITY OF BEING HEARD, ALTHOUGH IN HIS ORDER H E HAS TRIED TO ESTABLISH THAT HE HAS ALLOWED REASONABLE OPPORTUNIT Y BUT NO FACTS. 2.6 THE ASSESSEE ALSO SUBMITTED THE APPLICATION UND ER RULE 46A OF INCOME TAX RULES FOR ADMISSION OF FOLLOWING ADDITIONAL EVIDENCES. 1. ATTESTED COPIES OF CAPITAL ACCOUNT AT BOTH AOP M/S. VIJENDRA SINGH HADA & PARTY AND M/S KIRODI MAL & PARTY. 5 2. COPY OF PUNJAB NATIONAL BANK ACCOUNT NO. 370 AT KHO JA GATE, BUNDI OF M/S. VIJENDRA SINGH HADA & PARTY. 3. SALES AGREEMENT OF PLOT FOR RS. 5,67,000/- SOLD TO M/S. JAI MAHAVIR KULFI CENTRE, BUNDI 4. PHOTOCOPY OF ASSESSMENT ORDER PASSED U/S 143(3) FOR ASSESSMENT YEAR 2001-02 IN THE CASE OF APPELLANT HIMSELF ON 27-02-2004 BY THE ITO, BUNDI 2.7 THE LD CIT(A) FORWARDED THE ABOVE EVIDENCES TO THE AO AND HIS COMMENTS WERE SOUGHT. THE AO OBJECTED TO THE ADMISSION OF THE ADD ITIONAL EVIDENCES. THE LD CIT(A) HOWEVER, ADMITTED THE ADDITIONAL EVIDENCES BY OBSER VING AS UNDER :- 1 THE ASSESSEE AT THE TIME OF ASSESSMENT ALSO TOOK TH E SAME PLEA AND THE A/C NO., CHEQUE NO. AND NAME OF BANK AND BRANCH SUBMITT ED BEFORE THE ASSESSING OFFICER. 2 THE ASSESSING OFFICER COULD HAVE VERIFIED THESE FAC TS U/S 133(6) OR U/S 131 WHICH HE FAILED. 3 THE DETAILS OF ASSESSMENT ORDER ETC. WERE ALWAYS AV AILABLE WITH ASSESSING OFFICER THE SAME CAN ONLY HELP US IN ARRIVING AT RI GHT CONCLUSION. 4 CIRCUMSTANTIAL EVIDENCE SHOW THAT A SHOP WAS SHOWN IN OLD BALANCE SHEET, WHICH IS NOT SHOWN IN CURRENT BALANCE SHEET. THE AS SESSEE ALSO TOOK THIS PLEA BEFORE ASSESSING OFFICER, WHO COULD HAVE VERIF IED THESE FACTS. THE DOCUMENTS NOW SUBMITTED ONLY ENLARGE THE SCOPE OF ASSESSEES CLAIM BEFORE ASSESSING OFFICER BUT DOES NOT CREATE A NEW CASE ALL TOGETHER THEREFORE, I ACCEPT THE ADDITIONAL EVIDENCE FILED B EFORE HIM. 2.8 THE LD CIT(A) AFTER ADMITTING THE ADDITIONAL EV IDENCES GAVE AN OPPORTUNITY TO THE AO VIDE LETTER DATED 05-08-2011 FOR EXAMINING THE D OCUMENTS / EVIDENCES SUBMITTED BY THE ASSESSEE AND TO PRODUCE ANY EVIDENCE OR DOCUMEN T OR ANY WITNESS FOR REBUTTAL OF THE ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE. THE AO VIDE LETTER DATED 08-09-2011 SUBMITTED THAT PUNJAB NATIONAL BANK, BUNDI INFORMED THAT CHEQUES IN FAVOUR OF M/S 6 KIRODI MAL & PARTY FOR RS. 6.50 LACS AND RS. 6.00 L ACS WERE ISSUED ON 28-5-2004 AND 03-06-2004 WHICH WERE GOT PREPARED BY M/S. VIJENDRA SINGH HADA & PARTY. HOWEVER, HE OBJECTED FOR ADMISSION OF THE ADDITIONAL EVIDENCES BY STATING THAT TIME AND AGAIN OPPORTUNITIES WERE GIVEN TO THE ASSESSEE TO PRODUCE THE INFORMATION / EVIDENCE AND SINCE THE ASSESSEE DID NOT PRODUCE ANY INFORMATION / EVID ENCE, THEREFORE, THE INFORMATIONS/EVIDENCES NOW PRODUCED WERE NOT LIABLE TO BE ACCEPTED. HOWEVER, THE LD CIT(A) DID NOT FIND MERIT IN THE COMMENTS OF THE AO RELATING TO NON-ADMISSIBILITY OF THE ADDITIONAL EVIDENCES AND DELETED THE ADDITION BY OB SERVING THAT RS. 12.50 LACS PAID TO M/S KIRODI MAL & PARTY WAS WITHDRAWN FROM AOP M/S. VIJE NDRA SINGH HADA & PARTY FROM A/C NO. 370 OF PUNJAB NATIONAL BANK AND THE SAME W AS CONFIRMED BY THE AO. NOW THE DEPARTMENT IS IN APPEAL. 2.9 THE LD. DR SUPPORTED THE ORDER OF THE AO. 2.10 THE LD COUNSEL FOR THE ASSESSEE SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD CIT(A). 2.11 AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES, IN THE PRESENT CASE, IT APPEARS THAT THE ASSESSEE COULD NOT PRODUCE THE REQ UIRED DOCUMENTS DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE AO. HOWEVER, THE SAME HAS BEEN FURNISHED TO THE LD CIT(A) AS ADDITIONAL EVIDENCES AND THE LD CIT(A) A LLOWED THE OPPORTUNITY TO THE AO FOR HIS COMMENTS ON THE SAID ADDITIONAL EVIDENCES. THE AO ALTHOUGH OBJECTED FOR ADMISSION OF THE ADDITIONAL EVIDENCES YET CONFIRMED THAT A SU M OF RS. 12.50 LACS PAID BY M/S KIRODI MAL & PARTY, JAIPUR WAS WITHDRAWN FROM AOP M/S. VIJ ENDRA SINGH HADA & PARTY FROM A/C NO. 370 OF PUNJAB NATIONAL BANK, BUNDI. WE, THE REFORE, DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD CIT(A) SINCE THE AO HIMSELF VER IFIED FROM THE BANK THAT TRANSACTION WAS GENUINE. 7 3.1 THE GROUND NO. 2 RELATES TO THE ISSUE OF DELETI ON OF ADDITION OF RS. 3,19,722/- MADE BY AO THE ON ACCOUNT OF UNEXPLAINED LOAN/CASH CREDIT. 3.2 THE FACTS RELATING TO THIS ISSUE IN BRIEF ARE THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE HA D SHOWN LOAN FROM M/S. VIJENDRA SINGH HADA & PARTY AT RS. 3,19,722/-. THE AO ASKED THE ASSESSEE TO FURNISH THE CONFIRMATION OF THE SAID LOAN SHOWING PAN AND COMPL ETE POSTAL ADDRESSES. SINCE THE ASSESSEE COULD NOT FURNISH THE CONFIRMATION OF LOAN S AND THE CONFIRMATION FURNISHED VIDE REPLY DATED 06-08-2010 DID NOT BEAR ANY SIGNATURE O F THE MEMBER OF M/S. VIJENDRA SINGH HADA & PARTY, HE ACCORDINGLY MADE THE ADDITION OF R S. 3,19,722/-. THE ASSESSEE CARRIED THE MATTER TO THE LD CIT(A). 3.3 THE LD CIT(A) AFTER HAS CONSIDERING THE SUBMI SSION OF BOTH THE PARTIES DELETED THIS ADDITION BY OBSERVING THAT THE AMOUNT APPEARED IN THE BALANCE SHEET, SO IT COULD NOT BE CONSIDERED AS AN ISSUE WHEREIN THE INCOME HAD ES CAPED ASSESSMENT. NOW THE DEPARTMENT IS IN APPEAL. 3.4 AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE P ARTIES AND THE MATERIALS AVAILABLE ON RECORD, IT IS NOTICED THAT THE FACTS RELATING TO THIS ISSUE ARE SIMILAR TO THE FACTS INVOLVED IN GROUND NO (I) OF THE DEPARTMENT WHICH WE HAVE A LREADY ADJUDICATED IN THE FORMER PART OF THIS ORDER AND SINCE THE COPY OF ACCOUNT FURNISH ED BY THE ASSESSEE BEFORE THE LD CIT(A) WAS ADMITTED AS AN ADDITIONAL EVIDENCE AND THE COMM ENTS OF THE AO WERE ASKED. THE AO ALSO ADMITTED THAT IN THE BALANCE SHEET FILED BY TH E ASSESSEE, THE BALANCE OF M/S. VIJENDRA SINGH HADA & PARTY WAS AT RS. 3,19,722/-. IN THE P RESENT CASE, THE ADDITION WAS MADE ONLY FOR THE REASON THAT CONFIRMATION LETTER WAS NO T FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER, THE SAME WAS FURNI SHED BEFORE THE LD CIT(A) IN THE 8 APPELLATE PROCEEDINGS AND THE AO ALSO ADMITTED THIS FACT. THEREFORE, THE LD CIT(A) WAS JUSTIFIED IN DELETING THIS ADDITION. 4.1 VIDE GROUND NOS. (III), (IV) AND (V), THE GRIEV ANCE OF THE DEPARTMENT RELATE TO DELETION OF ADDITION OF RS. 3.31 LACS, 5.07 LACS AN D RS. 50,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PLOT WITH CONS TRUCTION, UNEXPLAINED LOANS/ ADVANCES AND UNEXPLAINED INVESTMENT IN SHARES RESPECTIVELY. 4.2 THE FACTS RELATING TO THESE ISSUES IN BRIEF ARE THAT THE AO FROM THE BALANCE SHEET FURNISHED BY THE ASSESSEE WITH WRITTEN REPLY DATED 16-07-2010 NOTICED THAT THE ASSESSEE HAD SHOWN INVESTMENT OF RS. 3.31 LACS IN THE PLOT S ITUATED AT NEW COLONY, BUNDI. HE ALSO NOTICED THAT THE ASSESSEE HAD SHOWN LOAN/ ADVANCE IN THE NAMES OF SHRI KEWAL SAGAR, SHRI KIRORIMAL MODI AND SHRI MAHAVIR AMOUNTING TO R S. 1.60 LACS, RS. 1.90 LACS AND RS. 1.57 LACS RESPECTIVELY TOTALING TO RS. 5.07 LACS AN D THE SAME WERE APPEARING IN THE BALANCE SHEET. THE AO ALSO NOTICED THAT THE ASSESSEE HAD SH OWN INVESTMENT IN SHARES OF RS. 50,000/- AS MENTIONED IN THE BALANCE SHEET. ACCORDI NG TO THE AO, THE ASSESSEE DESPITE ALLOWING SUFFICIENT OPPORTUNITY HAD FAILED TO EXPLA IN THE SOURCE OF THE ABOVE INVESTMENTS. HE ACCORDINGLY MADE THE IMPUGNED ADDITION. THE ASSE SSEE CARRIED THE MATTER TO THE LD CIT(A) WHO ALLOWED THESE ISSUES ON TECHNICAL GROUND S BY OBSERVING AS UNDER:- IN THIS REGARD EXPLANATION 3 OF SECTION 147 IS RELEVANT AND THE SAME IS REPRODUCED AS UNDER:- EXPLANATION 3:-FOR THE PURPOSE OF ASSESSMENT OR RE-ASSESSMENT UNDER THIS SECTION, THE ASSESSING OFFICER MAY ASSESS OR R EASSESS THE INCOME IN RESPECT OF ANY ISSUE, WHICH HAS ESCAPED ASSESSMENT, AND SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEE DINGS UNDER THIS SECTION, NOTWITHSTANDING THAT THE REASONS FOR SUCH ISSUE HAV E NOT BEEN INCLUDED IN THE REASONS RECORDED UNDER SUB-SECTION (2) OF SECTION 1 48. (EMPHASIS SUPPLIED) THIS EXPLANATION CLEARLY PROVIDES THAT ONCE AN ASS ESSMENT OR RE- ASSESSMENT IS MADE U/S 147, THE ASSESSING OFFICER M AY ASSESS OR RE-ASSESS THE 9 INCOME IN RESPECT OF ANY ISSUE WHICH HAS ESCAPED AS SESSMENT AND SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY. THOUGH EXPLANATION 3 WIDENS THE SCOPE OF ASSESSMEN T /RE-ASSESSMENT U/S 147, HOWEVER RESTRICTS IT TO THE NATURE OF INCOME I N RESPECT OF ANY ISSUE WHICH HAS ESCAPED ASSESSMENT. IN MY OPINION AFTER THE INSERTION OF EXPLANATION 3 BY THE FINANCE ACT, 2009 W.R.E.F. 01-04-1989, THE CONTROVERSY HAS BEEN SET AT REST. NOW, THE ASSESSING OFFICER CAN ASSESS OR RE-ASSESS ANY INCOM E WHICH WAS NOT PART OF THE REASONS RECORDED U/S 148(2). HOWEVER, THE SAID INCOME HAS TO BE IN RESPECT OF ANY ISSUE WHICH HAS ESCAPED ASSESSMENT. IN OTHER WORDS, GENERAL DISALLOWANCES ETC (WHICH CANNOT BE TREATED AS ISSUE S WHICH HAS ESCAPED ASSESSMENT CANNOT BE SUBJECT MATTER OF ASSESSMENT / RE-ASSESSMENT U/S 147.. AS ALL THE ITEMS COVERED IN GROUND NO. 4 TO 7 APPE ARED IN THE BALANCE SHEET, NONE OF THE ITEMS CAN BE CONSIDERED AS ISSUE WHEREIN INCOME HAS ESCAPED ASSESSMENT. 4.3 NOW THE DEPARTMENT IS IN APPEAL. 4.4 THE LD. DR ALTHOUGH SUPPORTED THE ORDER OF THE AO YET SHE COULD NOT CONTROVERT THE FINDINGS GIVEN BY THE LD CIT(A) . 4.5 IN HIS RIVAL SUBMISSIONS, THE LD COUNSEL FOR T HE ASSESSEE STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD CIT(A) . 4.6 AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE P ARTIES IN THE PRESENT CASE, IT APPEARS THAT THE AO MADE THE GENERAL DISALLOWANCE W ITHOUT BRINING ANY MATERIAL ON RECORD THAT THE INCOME HAD ESCAPED ASSESSMENT. ALL THOSE ITEMS WERE APPEARING IN THE BALANCE SHEET OF THE ASSESSEE. THE EXPLANATION GIVE N BY THE ASSESSEE WHICH IS MENTIONED BY THE AO AT PAGE NOS. 10 AND 11 OF THE ASSESSMENT ORDER HAD NOT BEEN REBUTTED WITH COGENT REASONS. THEREFORE, THE ADDITION MADE BY TH E AO WAS NOT JUSTIFIED. IT IS ALSO NOTICED THAT THE AO AT PAGE NOS. 10 AND 11 OF THE A SSESSMENT ORDER HAD MENTIONED THAT THE ASSESSEE EXPLAINED THAT HE PURCHASED THE PLOT A T NEW COLONY, BUNDI HAVING COST OF RS. 1.00 LAC AND STAMP DUTY OF RS. 31,430/- DURING THE FINANCIAL YEAR 2004-05 AND SPENT A 10 SUM OF RS. 1,99,750/- ON BOUNDARY WALL ETC. DURING THE YEAR UNDER CONSIDERATION. HE ALSO MENTIONED THAT THE ASSESSEE VIDE WRITTEN REPLY DATE D 23-07-2010 FURNISHED THE POSTAL ADDRESSES OF THE PERSONS TO WHOM LOANS/ ADVANCES WE RE GIVEN. THE ASSESSEE ALSO EXPLAINED TO THE AO THAT HE INVESTED RS. 50,000/ FO R PURCHASE OF LISTED SHARES. THEREFORE, ALL THE INFORMATIONS WERE GIVEN BY THE ASSESSEE TO THE AO VIDE LETTER DATED 23-07-2010. SINCE NOTHING WAS BROUGHT ON RECORD TO CONTROVERT T HE FINDINGS OF THE LD. CIT(A), WE THEREFORE, DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) IN SPITE OF THE FACT THAT HE HAS NOT DISCUSSED THE ISS UES ON MERIT BUT ALLOWED THE APPEAL OF THE ASSESSEE ON TECHNICAL GROUND WHICH WAS NOT CHALLENG ED BY THE DEPARTMENT BEFORE US. IN VIEW OF THIS, WE DO NOT SEE ANY MERIT IN GROUND NOS , (III), (IV) AND (V) OF THE DEPARTMENTAL APPEAL. 5.0 IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 28-08-201 2 ) SD/- SD/- ( R.K. GUPTA ) ( N.K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER JODHPUR, *MISHRA COPY FORWARDED TO :- 1.THE ITO, WARD- BUNDI 2. SHRI LOKESH THAKUR, BUNDI BY ORDER 3. THE LD CIT (A) 4. THE LD. CIT 5. THE D/R 6. GUARD FILE (ITA NO. 1050/JP/2011) AR ITAT JAIPUR.