The Asstt. Commissioner of Income-tax, Jalandhar V. Dr. Balraj Gupta, Jalandhar

ITA 111/ASR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0664 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 18-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SH BHAWANI SHANKER
• Assessee Lawyers: DINESH SARNA
• Section: 142(1); 133A; 68; 144; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. (CAMP AT JALANDHAR) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.111(ASR)/2015 ASSESSMENT YEAR:2010-11 PAN: AAPPG3485J ASSTT. COMMR. OF INCOME TAX VS. DR. BALRAJ GUPTA, CIRCLE-1, JALANDHAR. PROP. RATTAN HOSPITAL, JALANDHAR. JALANDHAR (APPELLANT) (RESPONDENT) APPELLANT BY: SH.SH.BHAWANI SHANKER, DR RESPONDENT BY: SH. DINESH SARNA, ADV. DATE OF HEARING: 20/06/2016 DATE OF PRONOUNCEMENT: 22 /06/2016 ORDER PER A.D. JAIN, JM; THIS IS THE DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2010-11, AGAINST THE ORDER DATED 03.12.2014, PASSED BY THE LD. CIT(A), JALANDHAR. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: 1. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.38,75,6 78/- WHICH WAS MADE BY THE AO BY DISALLOWING INTEREST U/S 36(1)(II I) OF THE INCOME TAX ACT, 1961. 2. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.11,66,6 00/- WHICH WAS MADE BY THE AOS TREATING ADVANCES FROM PROSPECTIVE CANDIDATES AS UNEXPLAINED INCOME OF THE ASSESSE. 2 ITA NO.111(ASR)/2015 A.Y. 2010-11 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A DOCTOR BY PROFESSION AND IS EARNING INCOME FROM RUNNING OF A HOSPITAL UNDER THE NAME AND STYLE OF M/S. RATTAN HOSPITAL. HE HAD NOT FILED RETURN FOR THE YEAR UNDER CONSIDERATION TILL THE START OF ASSESSMENT PROCEEDI NGS IN THIS CASE. APART FROM RUNNING OF A HOSPITAL, THE ASSESSEE WAS ALSO HAVING ANOTHER PROPRIETARY CONCERN NAMELY, M/S. CANN WINGS, IN WHICH, HE WAS P ROVIDING IMMIGRATION CONSULTANCY SERVICES. AS THE ASSESSEE HAD NOT FILED RETURN OF INCOME, THE AO ISSUED A NOTICE U/S 142(1) OF THE ACT DATED 5.12.20 11, ASKING THE ASSESSEE TO FILE THE RETURN OF INCOME. SINCE THERE WAS NO RESP ONSE FROM THE ASSESSEES SIDE, ANOTHER NOTICE U/S 142(1) WAS ISSUED ON 16.2.2012 BY THE AO. THIS NOTICE, HOWEVER, REMAINED UNCOMPLIED WITH. THE AO FINALLY I SSUED NOTICE U/S 144 OF THE ACT, ASKING THE ASESSEE AS TO WHY ASSESSMENT I N HIS CASE SHOULD NOT BE COMPLETED IN THE WAY PROVIDED UNDER THE PROVISIONS OF SECTION 144 OF THE ACT. HOWEVER, THE ASSESSEE FILED HIS RETURN OF INCOME FO R THE YEAR UNDER CONSIDERATION ON 19.03.2013 DECLARING THEREIN AN IN COME OF RS.83,10,183/-, WHICH, IN FACT, WAS A NON EST RETURN, AS IT WAS FI LED BEYOND THE TIME PRESCRIBE U/S 139(1), 139(4) AND 142(1) OF THE ACT. ON PERUSA L OF RECORD, IT WAS SEEN THAT A SURVEY OPERATION U/S 133A OF THE ACT WAS CONDUCTE D IN THE CASE OF THE ASSESSEE ON 3.3.2010 DURING WHICH THE ASSESSEE HAD SURRENDERED AN UNDISCLOSED INCOME OF RS.1,40,00,000/- AS PER FOLLO WING DETAILS: M/S. RATTAN HOSPITAL PROP. DR. BALRAJ GUPTA I) ON ACCOUNT OF EXCESS CASH FOUND RS.8,50,000/- II) ON ACCOUNT OF INVESTMENT IN CONSTRUCTION RS.25,00, 000/- 3 ITA NO.111(ASR)/2015 A.Y. 2010-11 TOTAL: RS.33,50,000/- M/S. CANNWINGS PROP. DR. BALRAJ GUPTA I) ON ACCOUNT OF EXCESS CASH FOUND RS.8,50,000/- II) ON ACCOUNT OF UNACCOUNTED RECEIPTS RS.38,00,000/- III) ON ACCOUNT OF AMOUNT RECEIVABLE RS.60,00,000/- TOTAL: RS.1,06,50,000/- 2.1. DURING ASSESSMENT PROCEEDINGS, THE AO EXAMINED THE BALANCE SHEETS OF M/S. RATTAN HOSPITAL AND M/S. CANN WINGS AND NOTICE D THAT THE ASSESSEE HAD GIVEN HUGE ADVANCES FOR THE PURCHASE OF IMMOVABLE P ROPERTY. THE LOANS AND ADVANCES AS PER THE BALANCE SHEET WERE TO THE TUNE OF RS.51,00,245/- IN THE CASE OF M/S. RATTAN HOSPITAL AND RS.5,35,64,803/- IN THE CASE OF M/S. CANN WINGS. THE EXPLANATION OFFERED BY THE ASSESSEE IN R ESPECT OF THESE LOANS AND ADVANCES WAS NOT FOUND SATISFACTORY BY THE AO AND H E TREATED THE SAME TO BE FOR NON BUSINESS PURPOSES AND DISALLOWED INTEREST TO THE EXTENT OF RS.41,75,678/- BY INVOKING THE PROVISIONS OF SECTIO N 36(1)(III) OF THE ACT. THE AO ALSO NOTICED THAT THE ASSESSEE HAD SHOWN ADVANCE FROM PROSPECTIVE APPLICANTS AT RS.1,96,63,107/- IN THE BALANCE OF M/ S. CANN WINGS. THE AO ASKED THE ASSESSEE TO PRODUCE EVIDENCE WITH REGAR D TO RECEIPT OF ADVANCE FROM PROSPECTIVE APPLICANTS/CANDIDATES AND ALSO TO FILE COPIES OF LEDGER ACCOUNTS OF THE APPLICANTS FROM WHOM ADVANCE OF RS.2,33,11,994/ - HAD BEEN RECEIVED DURING THE YEAR ALONG WITH THEIR CONFIRMATIONS. THE ASSESSEE WAS ALSO ASKED TO PRODUCE FOR VERIFICATION, THE APPLICANTS FROM WHOM ADVANCE OF RS.2,00,000/- 4 ITA NO.111(ASR)/2015 A.Y. 2010-11 OR MORE HAS BEEN RECEIVED. IN RESPONSE, IT WAS SUBM ITTED THAT THE PROSPECTIVE CANDIDATES PAY THEIR CONSULTANCY FEES IN INSTALME NTS AND AS PER THE ACCOUNTANCY FOLLOWED BY THE ASSESSEE, THE INCOME AC CRUES TO THE ASSESSEE WHEN THE NECESSARY FORMALITIES ARE COMPLETED AND T HE PROSPECTIVE APPLICANTS GET THEIR VISA. THE AMOUNT RECEIVED FROM THE APPLIC ANTS WHO GET THEIR VISA IS SHOWN AS CONSULTATION RECEIPTS UNDER THE HEAD ADV ANCES FROM APPLICANTS. 2.2. THE AO, ON VERIFICATION OF THE RECEIPT BOOKS O F M/S. CANN WINGS, FURTHER NOTICED ON A TEST CHECK BASIS, THAT A MAJORITY OF T HE RECEIPTS FROM PROSPECTIVE CANDIDATES WERE IN CASH. AS PER THE AO, THE ASSESS EE FAILED TO FILE CONFIRMATIONS FROM THE PROSPECTIVE APPLICANTS. IN T HE ABSENCE OF ANY CONFIRMATIONS, THE AO MADE ANOTHER ADDITION OF R.23 ,31,200/- (BEING 10% OF THE TOTAL ADVANCES RECEIVED DURING THE YEAR) U/S 68 OF THE ACT, TREATING THE SAME AS UNEXPLAINED INCOME. THE AO COMPLETED THE AS SESSMENT U/S 144 OF THE ACT VIDE ORDER DATED 28.03.2013, AT AN ASSESSED INC OME OF RS.1,49,43,493/-, APART FROM ANOTHER ADDITION OF RS.1,26,642/-, WHICH HAD NOT BEEN CONTESTED IN APPEAL. LATER ON, ADDITION OF RS.41,75,678/- WAS REDUCED TO RS.38,75,678/- BY THE AO U/S 154 OF THE ACT AND ASSESSED INCOME WA S REVISED TO RS.1,46,43,493/-. 3. THE ACTION OF THE AO IN MAKING ADDITIONS OF RS. 41,75,678/- AS REDUCED TO RS.38,75,678/- U/S 154 OF THE ACT, DISALLOWING I NTEREST U/S 36(1)(III) OF THE ACT, HAS BEEN CHALLENGED BY WAY OF GROUND NO.1, WHE REAS THE ADDITION OF RS.23.31.200/-, INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT AND TREATING 5 ITA NO.111(ASR)/2015 A.Y. 2010-11 THE ADVANCES FROM PROSPECTIVE CANDIDATES AS UNEXPL AINED INCOME OF THE ASSESSEE IS UNDER CHALLENGE BY WAY OF GROUND NO.2. 4. APROPOS GROUND NO.1, THE LD. DR CONTENDS THAT TH E LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.38,75,678/- CORRECTL Y MADE BY THE AO BY DISALLOWING INTEREST U/S 36(1)(III) OF THE ACT; AND THAT WHILE DOING SO, THE LD. CIT(A) ERRED IN IGNORING THE FACT THAT THE AO HAS C LEARLY ESTABLISHED THAT THE ASSESSEE HAD UTILIZED UNSECURED LOANS AMOUNT ON WHI CH INTEREST WAS PAID FOR NON-BUSINESS PURPOSES. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE STRONGLY RELIED ON THE IMPUGNED ORDER. 6. IN THIS REGARD, IT IS SEEN, THAT THE LD. CIT(A) HAS CATEGORICALLY FOUND THE ASSESSEE TO BE, AS CONTENDED, ENGAGED IN THE SALE A ND PURCHASE OF THE PROPERTY. MOST OF THE LOANS RAISED WERE FOUND TO HAVE BEEN US ED FOR THE PURCHASE OF IMMOVABLE PROPERTY. FROM THE BUSINESS OF PURCHASE A ND SALE OF IMMOVABLE PROPERTY, THE ASSESSEE DISCLOSED PROFIT OF RS.13,99 ,000/-. THIS PROFIT, HOWEVER, STOOD ILLEGALLY IGNORED BY THE AO WHILE MAKING THE ADDITION, WHEREAS THE ASSESSEES STAND OF HIS BEING ENGAGED IN THE BUSINE SS OF SALE AND PURCHASE OF IMMOVABLE PROPERTY WAS NOT REBUTTED BY THE A.O. T HE LD. CIT(A) FOUND AS FOLLOWS: 6.6 ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTI ON, I FIND A LOT OF FORCE IN THE ARGUMENTS TAKEN BY THE LD. AR OF THE ASSESSEE. ON PERUSAL OF BALANCE SHEET OF M/S. RATTAN HOSPITAL, IT HAS BEEN NOTICED THAT AN AMOUNT OF RS.39,17,052.93 HAS BEEN SHOWN AS UNSECURED LOAN FR OM M/S. CANN WINGS WHICH IS ANOTHER PROPRIETARY CONCERN OF THE A SSESSEE ON WHICH NO 6 ITA NO.111(ASR)/2015 A.Y. 2010-11 INTEREST HAS BEEN PAID. SIMILARLY, THE ASSESSEE HAS RECEIVED RS.5,00,000/- AS ADVANCE AGAINST PROPERTY ON WHICH NO INTEREST H AS BEEN PAID. TOTAL UNSECURED LOANS IN THE BOOKS OF M/S. RATTAN HOSPITA L HAVE BEEN SHOWN AT RS.73,01,774.93 WHICH ALSO INCLUDE LOAN OF RS.39,17 ,052.93 FROM M/S. CANN WINGS ON WHICH THE ASSESSEE IS NOT PAYING ANY INTEREST. APART FROM THIS, AN AMOUNT OF RS.14,60,000/- HAS BEEN SHOWN AS INTEREST FREE ADVANCE TO M/S. AD WINGS (ANOTHER PROPERTY CONCERN OF THE ASSESSEE) IN THE BOOKS OF ACCOUNT OF M/S. RATTAN HOSPITAL WHEREA S THE ASSESSEE HAS SHOWN AN AMOUNT OF RS.26,14,128/- AS PAYABLE TO M/S . AD WINGS IN THE BOOKS OF ACCOUNT OF M/S. CANN WINGS UNDER THE HEAD SUNDRY CREDITORS ON WHICH NO INTEREST HAS BEEN PAID. FROM THE ABOVE STA TED FACTS, IT CAN SAFELY BE PRESUMED THAT THE ASSESSEE WAS HAVING SUFFICIENT INTEREST FREE FUNDS IN THE BOOKS OF M/S. RATTAN HOSPITAL OUT OF WHICH I NTEREST FREE ADVANCES TO THE EXTENT OF RS.51,00,245.85 CAN BE MADE. IN OTHER WORDS, NO DISALLOWANCE CAN BE MADE OUT OF INTEREST AND BANK C HARGES PAID BY THE ASSESSEE ON SECURED LOANS SHOWN IN THE BOOKS OF M/S . RATTAN HOSPITAL AS THE ASSESSEE WAS HAVING SUFFICIENT INTEREST FREE AD VANCES OF RS.51,00,245.85. THE DISALLOWANCE OF INTEREST TO T HE EXTENT OF RS.6,12,030/- IS, THEREFORE, DIRECTED TO BE DELETED . 6.7. FURTHER, ON PERUSAL OF THE BALANCE SHEET OF M/ S. CANN WINGS, IT HAS BEEN NOTICED THAT THE ASSESSEE HAS RAISED VARIOUS L OANS WHICH HAVE FURTHER BEEN UTILIZED EITHER FOR THE PURPOSES OF GI VING ADVANCE FOR THE PURCHASE OF PROPERTIES OR FOR THE PURCHASE OF OFFIC E BUILDINGS OR FOR THE PURCHASE OF PROPERTIES OR FOR PURCHASING OTHER BUSI NESS ASSETS. THE OUTSTANDING LOAN TAKEN FOR THE PURCHASE OF CARS IS SHOWN AT RS.35,60,385/-. THE SECURED LOAN OF RS.69,64,489/- AND RS.38,67,353/- ARE THE BALANCE AMOUNT OF LOAN TAKEN FOR THE PURCHA SE OF OFFICE BUILDINGS STATED TO BE LOCATED AT 329, JAWAHAR NAGAR, JALANDH AR AND 535, NEW JAWAHAR NAGAR, JALANDHAR. RS.28,27,669/-, RS.30,35, 076/- AND RS.13,48,232/- ARE THE BALANCES OUT OF OVERDRAFT LI MITS AND THE CLAIM OF THE ASSESSEE IS THAT THE OVER DRAFT LIMITS HAVE EITHER BEEN UTILIZED FOR THE PURPOSE OF PURCHASING IMMOVABLE PROPERTIES OR FOR T HE PURPOSE OF GIVING ADVANCE FOR THE PURCHASE OF IMMOVABLE PROPERTIES. O THER LOAN AMOUNTS WERE ALSO STATED TO HAVE BEEN UTILIZED FOR THE PURC HASE OF PROPERTIES. IT HAS ALSO BEEN NOTICED THAT THE ASSESSEE HAS ALSO SHOWN INCOME FROM THE SALE AND PURCHASE OF PROPERTIES TO THE EXTENT OF RS.13,9 9,000/- WHICH HAS BEEN SHOWN AS RECEIPT IN THE BOOKS OF M/S. CANN WINGS. T HIS FACT CLEARLY SHOWS THAT THE ASSESSEE IS CERTAINLY ENGAGED IN TH E BUSINESS OF SALE AND PURCHASE OF IMMOVABLE PROPERTIES. MOREOVER, THE TOT AL ADVANCES SHOWN IN THE BOOKS OF M./S. CANN WINGS ALSO INCLUDE AN ADVAN CE OF RS.39,17,052/- TO M/S. RATTAN HOSPITAL, I.E., SELF ON WHICH NO DIS ALLOWANCE IS POSSIBLE. AS MOST OF THE SECURED LOANS HAVE BEEN UTILIZED BY THE ASSESSEE FOR THE PURPOSE OF HIS BUSINESS, NO DISALLOWANCE OUT OF INT EREST CAN BE MADE IN THE CASE OF THE ASSESSEE AS THE ADVANCES HAVE BEEN MADE EITHER FOR THE 7 ITA NO.111(ASR)/2015 A.Y. 2010-11 PURPOSE OF PURCHASE OF IMMOVABLE PROPERTIES OR FOR THE PURCHASE OF OTHER BUSINESS ASSETS. MOREOVER, THE AO HAS NOT BROUGHT A NYTHING ON RECORD TO SUGGEST THAT THE ASSESSEE IS NOT ENGAGED IN THE BUS INESS OF SALE AND PURCHASE OF IMMOVABLE PROPERTIES. IN VIEW OF THESE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE AO IS ALSO NOT JUSTIFIED IN MAKING FURTHER DISALLOWANCE OF RS.32,6 3,648/- OUT OF INTEREST PAID BY THE ASSESSEE MORE PARTICULARLY WHEN THE ASS ESSEE HAS SHOWN INCOME FROM THE SALE AND PURCHASE OF THEREFORE, AL SO DIRECTED TO BE DELETED. THE ADDITION TO THE EXTENT OF RS.3,00,000/ - HAS ALREADY BEEN REDUCED BY AO HIMSELF U/S 154 OF THE ACT. SO BALANC E ADDITION OF RS.38,75,468/- IS ALSO DELETED. IN THE RESULT, GROU ND NO,.2 OF APPEAL TAKEN BY THE ASSESSEE IS ALLOWED. 7. THE ABOVE FACTUAL OBSERVATIONS MADE BY THE LD. C IT(A) HAVE LED TO HIS CATEGORICAL FINDING THAT THE ADDITION WAS UNSUSTAIN ABLE. IT WAS IN VIEW OF THE SAME THAT THE ADDITION WAS DELETED. 8. BEFORE US, THE DEPARTMENT HAS NOT BEEN ABLE TO SUCCESSFULLY CHALLENGE THE PIN-POINTED DIRECT OBSERVATIONS, ITEM-WISE, AS RECORDED BY THE LD. CIT(A). THEREFORE, THESE DETAILED OBSERVATIONS AND WELL VER SED FINDINGS RECORDED IN THE IMPUGNED ORDER ARE CONFIRMED. GROUND NO. 1 IS REJEC TED. 9. SO FAR AS REGARDS GROUND NO. 2, THE AO MADE AN A DDITION OF RS.23,31,200/-, INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT, TREATING THE ADVANCES RECEIVED FROM PROSPECTIVE APPLICANTS AS UNEXPLAINED INCOME OF THE ASSESSEE. THIS WAS BECAUSE ON BEING ASKED TO FURNI SH EVIDENCE OF ADVANCES RECEIVED FROM THE APPLICANTS, THE ASSESSEE SUBMITTE D BEFORE THE AO THAT HE HAD RECEIVED RS.2,33,11,997/-; AND THAT HE COULD NOT PR ODUCE THE APPLICANTS, WHO HAD MADE THEIR PAYMENTS IN CASH. THE AO ADDED 10% O F THE SUM OF RS.2,33,11,997/-, AMOUNTING TO RS.23,31,200/-. 8 ITA NO.111(ASR)/2015 A.Y. 2010-11 10. THE ASSESSEE HAS MAINTAINED THAT THE PROCESS O F VISA APPLICATION IS THAT OF THREE YEARS AND IT IS WHEN THE APPLICANTS GET TH EIR VISA, THAT AMOUNT IS RECEIVED AS ADVANCE IS SHOWN AS CONSULTATION RECEIP T IN THE INCOME AND EXPENDITURE ACCOUNT AND IF THE APPLICANT FAILS TO O BTAIN THE VISA, THE ADVANCE AMOUNT IS REFUNDED; THAT THE ADVANCE AMOUNT INCLUDE S VISA APPLICATION FEE, TICKET CHARGES AND UNIVERSITY FEE; THAT THIS IS A C ASE OF A TRAVEL AGENT WHO DEALS WITH THE STUDENT VISA; THAT MOST OF THE CUSTOMERS O F THE ASSESSEE HAVE GOT THEIR VISAS AND HAVE LEFT INDIA; THAT THOSE WHO WERE NO T ABLE TO GET THEIR VISA GOT THEIR MONEY REFUNDED; AND THAT AS SUCH, IT WAS NOT POSSIBLE FOR THE ASSESSEE TO GET CONFIRMATIONS FROM THE CUSTOMERS, WHO HAD LEFT FOR ABROAD. 11. THE LD. CIT(A) DULY TOOK ALL THE FACTS INTO CO NSIDERATION AND RESTRICTED THE ADDITION FROM RS.23,31,200/- TO RS.11,66,600/- , HOLDING AS FOLLOWS: 7.5. I HAVE CONSIDERED THE OBSERVATIONS OF THE A.O. AS MADE BY HIM IN THE ASSESSMENT ORDER AS WELL AS REMAND REPORT. I HA VE ALSO CONSIDERED THE WRITTEN SUBMISSIONS OF THE ASSESSEE FILED VIDE LETT ERS DATED 230.01.2014 AND 3.12.2014 AS WELL AS HIS COUNTER COMMENTS ON TH E REPORT OF THE A.O. HAS MADE THE ADDITION OF RS.23,31,200/- U/S 68 OF T HE ACT FOR WANT OF CONFIRMATIONS FROM THE PROSPECTIVE CANDIDATES FROM WHOM ADVANCES HAVE BEEN RECEIVED DURING THE YEAR UNDER CONSIDERATION. DURING THE COURSE OF APPELLATE PROCEEDINGS, ALTHOUGH THE ASSESSEE HAD FI LED A LIST OF PROSPECTIVE CANDIDATES FROM WHOM ADVANCES HAVE BEEN RECEIVED AN D TO WHOM REFUND HAS BEEN ISSUED LATER ON OUT OF ADVANCES RECEIVED E ARLIER BUT HE FAILED TO FILE ANY CONFIRMATION FROM THESE CANDIDATES AS DE SIRED BY THE AO DURING THE ASSESSMENT PROCEEDINGS EVEN DURING APPELLATE P ROCEEDINGS. THE RECEIPT OF ADVANCES IN CASH IN ANOTHER GROUND FOR MAKING ADDITION. IN THE OPINION OF THE AO THE RECEIPT OF ADVANCE IN CASH RA ISES A DOUBT ABOUT THE GENUINENESS OF THESE ADVANCES. HOWEVER, LOOKING TO THE NATURE OF BUSINESS OF THE ASSESSEE AND FACTS BROUGHT ON RECOR D, I AM OF THE OPINION THAT IT WAS ALSO DIFFICULT FOR THE ASSESSEE TO FILE CONFIRMATIONS FROM ALL THE 9 ITA NO.111(ASR)/2015 A.Y. 2010-11 STUDENTS AS MOST OF THEM WERE STATED TO HAVE LEFT F OR ABROAD AND SOME OF THEM WHO COULD NOT GET VISA HAS TAKEN THEIR REFUND BACK. ALTHOUGH, IT IS THE DUTY OF THE ASSESSEE TO FILE CONFIRMATION FROM THE PROSPECTIVE CANDIDATES BUT IT IS ALSO A FACT THAT THE ASSESSEE WAS CERTAINLY HAVING DIFFICULTY IN PRODUCING THE PERSON OR FILING CONFIR MATION FROM THE PROSPECTIVE STUDENTS. ALTHOUGH THE AO HAS ALSO NOT BROUGHT SUFF ICIENT MATERIAL ON RECORD TO SUPPORT HIS ADDITION BUT THIS IS ALSO A F ACT THAT THE ASSESSEE HAS FAILED TO FILE CONFIRMATION EVEN FROM THE STUDENTS WHO WERE NOT GRANTED ANY VISA. LOOKING TO THE TOTALITY OF FACTS AND MORE PARTICULARLY THE NATURE OF BUSINESS BEING CARRIED ON BY THE ASSESSEE, I AM OF THE OPINION THAT THE ADDITION MADE BY THE AO APPEARS TO BE SOMEWHAT ON T HE HIGHER SIDE. I AM ALSO OF THE OPINION THAT IT WILL BE FARE AND REASO NABLE IF THE ADDITION MADE BY THE AO U/S 68 OF THE ACT IS RESTRICTED TO 5% OF THE TOTAL ADVANCES RECEIVED DURING THE YEAR. 7.6. IN VIEW OF ABOVE STATED FACTS AND IN THE CIRCU MSTANCES OF THE CASE, THE ADDITION OF RS.23,31,200/- MADE BY THE AO IS RE STRICTED TO RS.11,66,600/- (BEING 5% OF ADVANCES RECEIVED DURIN G THE YEAR) AND BALANCE ADDITION OF RS.11,66,600/- IS, THEREFORE, D IRECTED TO BE DELETED. 12. THE LD. DR CONTENDS THAT WHILE ILLEGALLY DELETI NG THE ADDITION OF RS.11,66,000/-, THE LD. CIT(A) HAS ERRED IN NOT ACC EPTING THE BASIS OF THE ADDITION, I.E., THAT THE ASSESSEE REMAINED UNABL E TO PRODUCE THE APPLICANTS FROM WHOM THE ADVANCES WERE CLAIMED TO HAVE BEEN RE CEIVED. 13. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, AGAIN STRONGLY RELIED ON THE IMPUGNED ORDER. 14. HERE, IT IS SEEN THAT THE VIEW TAKEN BY THE LD. CIT(A) IS, UNDER THE FACTS AND CIRCUMSTANCES, MOST REASONABLE. THE AO DID NOT BRING ANY MATERIAL ON RECORD TO SUPPORT THE ADDITION MADE, EVEN THOUGH I T REMAINED UNDISPUTED THAT THE NATURE OF THE ASSESSEES BUSINESS, I.E., THAT O F A TRAVEL AGENT SENDING STUDENTS ABROAD, WAS SUCH THAT INDISPUTABLY, THE AS SESSEE COULD NOT PRODUCE ALL THE PROSPECTIVE STUDENTS FOR CONFIRMATIONS OF H AVING ADVANCED THE AMOUNT 10 ITA NO.111(ASR)/2015 A.Y. 2010-11 TO THE ASSESSEE. THE ASSESSEE, ON THE OTHER HAND, R EMAINED UNABLE TO PRODUCE ANY CONFIRMATIONS AT ALL. UNDER THESE CIRCUMSTANCE S, WE FIND THE LD. CIT(A) TO BE JUSTIFIED IN REDUCING THE ADDITION TO RS. 5% OF THE TOTAL ADVANCES RECEIVED DURING THE YEAR. THEREFORE, GROUND NO.2 IS ALSO REJ ECTED. 13. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/06/ 2016 . SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 22/06/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:DR. BALRAJ GUPTA, JALANDHAR 2. THE ACIT, CIRCLE-1, JLR 3. THE CIT(A), JLR 4. THE CIT, JLR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.