ACIT, Chandigarh V. Shri Pritam Singh, Mohali

ITA 1193/CHANDI/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77096 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-04-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 12-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMARVEER SINGH
• Keywords: Unexplained cash credit; Gift; Business income; Opportunity of being heard; Peak credit; Additional evidence; Assessment record
• Section: 44AD; 40A(3); 143(3); 133(6); 69; 148; 92; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITAS NO. 1173 TO 1177/CHD/2012 ASSESSMENT YEARS : 2004-05 TO 2006-07, 2009-10 & 2003-04 LATE SHRI PRITAM SINGH VS. D.C.I.T, CENTRAL CIRCL E I THROUGH L/R GURJIT SINGH CHANDIGARH H NO. 748 PHASE 3B-I MOHALI AMNPS 8064P ITAS NO. 1193 TO 1198/CHD/2012 ASSESSMENT YEARS : 2004-05 TO 2009-10 A.C.I.T. VS. SHRI PRITAM SINGH CENTRAL CIRCLE I H NO. 748 CHANDIGARH PHASE 3B-I MOHALI AMNPS 8064P ITAS NO. 1166 TO 1168/CHD/2012 ASSESSMENT YEARS : 2003-04 TO 200 5-06 SHRI GURJIT SINGH VS. D.C.I.T, CENTRAL CIRCLE I H NO. 748 CHANDIGARH PHASE 3B-I MOHALI ANEPS 7778N ITAS NO. 1187 & 1188/CHD/2012 ASSESSMENT YEARS : 2004-05 & 2005 -06 A.C.I.T, CENTRAL CIRCLE I VS. SHRI GURJIT SINGH CHANDIGARH H NO. 748 PHASE 3B-I MOHALI ANEPS 7778N (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI ROHIT GOEL DEPARTMENT BY: SHRI A MARVEER SINGH DATE OF HEARING 16.4.2014 DATE OF PRONOUNCEMENT 6.6.2014 2 O R D E R PER BENCH THESE ARE CROSS APPEALS AND ARE DIRECTED AGAINST TH E ORDERS DATED 25.9.2012 OF THE LD CIT(A)(C), GURGAON . SOME ISSUES ARE COMMON IN THESE APPEALS WHICH WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORD ER. 2 IN THIS GROUP OF CASES SEARCH WAS CONDUCTED ON 11.6.2008. LATER ON SPECIAL AUDIT WAS ALSO ORDERED AND ULTIMATELY REPORT OF THE SPECIAL AUDITOR WAS ISSUE D ON 25.6.2011. NOTICE WAS ACCORDINGLY ISSUED ON 27.7.2 011 FIXING THE CASE ON 1.8.2011. ASSESSMENT WAS COMPLETED ON 25.8.2011. THEREFORE MANY DETAILS COULD NOT BE FIL ED. IT WAS CONTENDED BEFORE THE LD. CIT(A) THAT MERELY 23 DAYS WAS AVAILABLE FOR FILING OF DETAILS WHICH WAS NOT POSSI BLE THEREFORE MANY DETAILS WERE FILED BEFORE THE LD. CIT(A) WITH A REQUEST TO ADMIT ADDITIONAL EVIDENCE. 3 THE LD. CIT(A) HAD ADMITTED THE ADDITIONAL EVIDEN CE AND REFERRED THE SAME TO ASSESSING OFFICER FOR REMAND V ERIFICATION. IN THIS BACKGROUND MOST OF THE ENQUIRIES WERE CONDU CTED DURING APPEAL / REMAND. 4 ITA NO. 1177/CHD/2012 A.Y 2003-04 LATE SHRI PRI TAM SINGH IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS: 1 THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACT S IN FRAMING THE ASSESSMENT WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 2 THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACTS TO APPOINT SPECIAL AUDITOR IN AN AUTOMATIC MANNER WITHOUT CONS IDERING THE FACTS OF THE CASE AND CONSEQUENTLY THE APPOINTMENT OF THE AUDITOR IS BAD IN LAW. 3 THAT THE APPOINTMENT OF SPECIAL AUDITOR IS BAD IN LAW AND IS NOT IN ACCORDANCE WITH THE SPIRIT OF LAW UNDER THE PROVISIONS OF 3 SECTION 142(2A) OF THE ACT BUT ONLY TO GAIN TIME FO R COMPLETING THE ASSESSMENT WHICH IS BARRED BY LIMITATION. 4 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING THE ADDITIONS OF RS. 15,000/- COMPRISING RS. 10,000/- O N ACCOUNT OF PURCHASE OF DD IN CASH AND RS. 5,000/- PAID FOR PUR CHASE OF DD FOR IELTS. 5 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING AN ADDITION OF RS. 17,47,056/- BEING PROFIT ON CONTRAC T PAYMENTS OF RS. 20,53,687/- COMPRISING RS. 7,73,687/- RECEIVED FROM PBIL APEX CONSORTIUM LTD AND A SUM OF RS. 12,80,000/- RECEIV ED FROM GKS & CO. AND DG ENTERPRISES. 6 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT TAKING RELIANCE OF ENTRIES RECORDED IN SUPPLEMENTARY CASH BOOK PRODUCED BEFORE THE LD. CIT(A) AFTER ADMITTING THE SAME U/S 46A(1)(D) AND DESPITE THE FACT THAT ASSESSING OFFICER HAS CONFIRM ED THE VERIFICATION OF DEBIT/CREDIT ENTRIES RECORDED IN TH E SUPPLEMENTARY CASH BOOK. 5 GROUNDS NO. 1 TO 4 WERE NOT PRESSED BEFORE US, TH EREFORE SAME ARE DISMISSED AS NOT PRESSED BEFORE US. 6 GROUND NO. 5 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICE NOTICED THAT PERUSAL OF INCOME AND EXPENDITURE STATEMENT FOR THE YEAR SHOWS FOLLOWING RECEIPTS WHICH WERE SHOWN AS INDIRE CT RECEIPTS: PBIL APEX AND XEN DRAINAGE OF RS. 6,73,687/- AND RS . 47,26,559/- RESPECTIVELY IN GM CONSTRUCTION CO. M/S PBIL APEX AT RS. 4,00,000/- IN THE BOOKS OF MAT CHLESS ASSOCIATES M/S PBIL APEX AT RS. 12,80,000/- IN THE BOOKS OF MA TCHLESS ASSOCIATES AGAINST ABOVE RECEIPTS NO EXPENDITURE WERE CLAIMED. THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE ABOV E AMOUNTS SHOULD NOT BE ADDED BACK TO THE TAXABLE INC OME OF THE ASSESSEE BECAUSE SAME WAS SHOWN AS INDIRECT RECEIPT S AND NO EXPENDITURE WERE CLAIMED. IT WAS FURTHER NOTICED T HAT FOLLOWING RECEIPTS WERE SHOWN IN PROFIT AND LOSS ACCOUNT: NAME OF THE CONCERN GROSS TURNOVER NET PROFIT INDIRECT INCOME CREDITED TO P&L ACCOUNT NET PROFIT FROM BUSINESS MATCHLESS ASSOCIATES 16,80,000/- 18,63,340/- 1,84,136/- (INTEREST ON FDR) 16,79,204/- G.M. CONSTRUCTIONS CO. 54,00,246/- (SHOWN AS INDIRECT INCOMES AND NO 53,99,606/- - 53,99,606/- 4 EXPENSES CLAIMED) PRITAM SINGH 6,16,950/- 3,34,493/- 3,34,493/- -- TOTAL 70,78,810/- IN THIS CONNECTION SPECIAL AUDITOR HAD OBSERVED THA T IN THE COURSE OF AUDIT AND BOOKS OF ACCOUNTS THE ASSESSEE HAD NOT SHOWN ANY EXPENSES AGAINST THESE INCOMES. THE ASSE SSING OFFICER FURTHER NOTED THAT IN THE RETURN OF INCOME THE ASSESSEE HAS SHOWN INCOME FROM BUSINESS & PROFESSION AT RS. 605195/- WHEREAS AS PER BOOKS OF ACCOUNTS THE RECEIPTS ARE R S. 7078810/-. THEREFORE ACCORDING TO THE ASSESSING OF FICER THE ASSESSEE HAD UNDER REPORTED THE INCOME TO THE TUNE OF RS. 6473615/- AND THEREFORE THIS SUM WAS ADDED TO THE I NCOME OF THE ASSESSEE. 7 BEFORE THE LD. CIT(A) IT WAS MAINLY SUBMITTED THA T ADDITION IS MADE ON THE BASIS OF STATEMENT OF ACCOU NTS PREPARED BY THE SPECIAL AUDITOR. IT WAS POINTED OU T THAT SOME WRONG ENTRIES WERE MADE IN THE PROFIT AND LOSS ACCO UNT AND THEREFORE ENTIRE ADDITION WAS NOT JUSTIFIED. IT WAS POINTED OUT THAT CERTAIN RECEIPTS FROM DRAINAGE DIVISION, AMRIT SAR IN THE PROPRIETARY CONCERN KNOWN AS MATCHLESS ASSOCIATES W ERE THERE. MOST OF THESE RECEIPTS WERE ON ACCOUNT OF EARLIER S ECURITIES ETC. 8 IN RESPECT OF OTHER RECEIPTS AMOUNTING TO RS. 20 53687/- IN THE HANDS OF G.M. CONSTRUCTION ETC IT WAS STATED THAT FOR INCLUDING THESE WORKS THE ASSESSEE HAD INCURRED EXP ENSES ALSO WHICH WAS MAINLY CONSISTING OF CASH. THE CASH WAS WITHDRAWN FROM THE BANKS WHICH WAS NOT TAKEN BY THE SPECIAL A UDITOR. SUPPLEMENTARY CASH BOOK WAS MAINTAINED WHICH GAVE C ORRECT 5 PICTURE AND HAD BEEN VERIFIED BY THE ASSESSING OFFI CER DURING REMAND PROCEEDINGS. 9 THE LD. CIT(A) AFTER EXAMINING THE SUBMISSIONS NO TED THAT EXECUTIVE ENGINEER, AMRITSAR DRAINAGE DIVISION HAS CERTIFIED THAT THE PAYMENTS WERE MADE IN ASSESSMENT YEAR 2003-04 BUT PERTAINED TO 1999-2000. THEREFORE IN T HE ABSENCE OF ANY OTHER MATERIAL ADDITION ON ACCOUNT OF RECEIP TS FROM EXECUTIVE ENGINEER, DRAINAGE DIV. AMRITSAR WERE DEL ETED. HOWEVER, THE LD. CIT(A) DID NOT ACCEPT THE THEORY OF SUPPLEMENTARY CASH BOOK AND CONFIRMED THE ADDITION OF OTHER RECEIPTS. 10 THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THE ADDITION WHICH HAS BEEN DELETED BY THE LD. CIT(A), THEREFORE WE ARE NOT REQUIRED TO DISCUSS THAT ASPECT. 11 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REIT ERATED THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER AND T HE LD. CIT(A). HE FURTHER SUBMITTED THAT A SUM OF RS. 377 687/- IN THE BOOK PROFIT G.M. CONSTRUCTION, SAID TO HAVE BEEN RE CEIVED FROM PBIL APEX CONSTRUCTION LTD. AND THE PAYMENT OF RS. 4 LAKHS RECEIVED IN THE BOOKS OF MATCHLESS ASSOCIATES DID N OT RELATE TO CONSTRUCTION PAYMENT AND THEY WERE WRONGLY BOOKED U NDER THE CONSTRUCTION PAYMENT. IN RESPECT OF CONSTRUCTION PAYMENTS IT WAS SUBMITTED THAT IT IS NOT POSSIBLE TO EARN 80 TO 90% PROFIT IN CONSTRUCTION JOBS AS REFLECTED IN PROFIT AND LOSS A CCOUNT PREPARED BY SPECIAL AUDITOR WHO HAS NOT CONSIDERED THE EXPENSES WHICH WERE INCURRED IN CASH AND SUCH EXPEN SES WERE LATER INCORPORATED IN THE SUPPLEMENTARY CASH BOOK W HICH WAS FURNISHED BEFORE THE LD. CIT(A) AS ADDITIONAL EVIDE NCE. IN FACT SUCH ADDITIONAL EVIDENCE WAS ADMITTED BEFORE THE LD . CIT(A). 6 IN THIS REGARD HE REFERRED TO PAGE 9 OF IMPUGNED OR DER. HE ALSO REFERRED TO THE REMAND REPORT WHEREIN THE ASSE SSING OFFICER HAS VERIFIED THE SUPPLEMENTARY CASH BOOK. THEREFORE AT BEST ESTIMATED PROFIT SHOULD BE TAXED. 12 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF LD. CIT(A). 13 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CAREF ULLY IN THE LIGHT OF MATERIAL ON RECORD AND RELEVANT ORDER. TH E MAIN CASE OF THE REVENUE IS THAT THE ASSESSEE HAS NOT MAINTAINED TH E BOOKS OF ACCOUNT AND THAT IS WHY NO SUCH BOOKS WERE FOUND DU RING SEARCH OR PRODUCED EVEN DURING ASSESSMENT PROCEEDINGS. FURTH ER BECAUSE OF THE COMPLEXITIES IN THE ACCOUNTS THE ASSESSING OFFI CER ORDERED SPECIAL AUDIT. ENTIRE ADDITION IN RESPECT OF THE I SSUE IN THIS GROUND HAS BEEN MADE ON THE BASIS OF BOOKS PREPARED BY SP ECIAL AUDITOR. ON THE OTHER HAND, THE CASE OF THE ASSESSEE IS THA T SPECIAL AUDITOR HAD PUNCHED ONLY THE CREDIT ENTRIES AND HAS NOT CON SIDERED THE SELF WITHDRAWALS FOR RECORDING EXPENSES. THAT IS WHY TH E PROFIT HAS BEEN REFLECTED AT 80 TO 90% OF THE RECEIPTS BY THE SPECI AL AUDITOR. THE ASSESSEE HAS FURTHER PREPARED A SUPPLEMENTARY CASH BOOK WHICH WAS SUBMITTED BEFORE THE LD. CIT(A) AS ADDITIONAL E VIDENCE WHICH INCORPORATED THE RECEIPTS AS WELL AS WITHDRAWALS IN THE RESPECTIVE YEARS. IN RESPECT OF THIS ADDITIONAL EVIDENCE IT H AS BEEN OBSERVED AT PAGE 9 OF THE LD. CIT(A) AS UNDER: THEREFORE CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN ALL FAIRNESS, I HOLD THAT THE REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE FILED U/RULE 46 A (1)(D) DESERVES TO BE ACCEDED TO BEING NECESSARY FOR DISPOSAL OF THE APPEALS(S) ON MERITS. HOWEVER, THE NATURE OF THE EVIDENCE IN RESPECT OF EACH OF THE ISSUES CONCERNED IS DISCUSSED RESPECTIVELY THEREUNDER. AS SUCH, THE ADDITIONAL EV IDENCE IS ALLOWED TO BE ADMITTED AT THIS JUNCTURE AND THE APPEAL OF THE ASSESSEE IS DISPOSED ON MERITS OF THE CASE. 7 AFTER MAKING ABOVE OBSERVATION THE REMAND REPORT WA S SENT TO THE ASSESSING OFFICER. COPY OF THE REMAND REPORT H AS BEEN ENCLOSED AT PAGE 16 TO 30 OF THE PAPER BOOK AND AT PAGE 28 & 29 RELEVANT PORTION READS AS UNDER: WITH REGARDS TO RECEIPTS FROM PBIL APEX CONSORTIUM LTD. AMOUNTING RS. 777687/- AND RECEIPTS OF RS. 290000/- FROM M/S G.K.S. & CO. AND PAYMENT OF RS. 990000/- RECEIVED F ROM D.G. ENTERPRISES, THE ASSESSEE HAS CONTENDED THAT ENTIR E WORK DON E IS ADDED AS INCOME WHEREAS RETURN OF INCOME WAS FILED BY APPLYING A FLAT PROFIT RATE OF 8% WAS DECLARED ON THESE PAYMEN TS. THE CONTENTION OF ASSESSEE THAT BOOKS OF ACCOUNTS PRODU CED BEFORE SPECIAL AUDITOR WERE NOT COMPLETE AS SUCH EXPENDITU RE ARE NOT REFLECTED IN SUPPLEMENTARY CASH BOOK CAN NOT BE ACC EPTED. WITH REGARD TO CLAIM OF EXPENSES DEBITED THROUGH SUPPLEM ENTARY CASH TOO, THE ENTRIES, THE DEBIT/CREDIT ENTRIES IN THIS SUPPLEMENTARY CASH BOOK IS VERIFIED. HOWEVER, THE SUPPLEMENTARY CASH BOOK NOW FILED BY ASSESSEE IS IN CONTRAVENTION TO RULE 46AS OF THE IT RULES, 1962 AND THE SAME MAY NOT BE ADMITTED AS TANTAMOUNT TO ADDITIONAL EVIDENCE. THE SE PAYMENTS WERE NOT RECORDED IN THE BOOKS PRODUCED BEFORE SPEC IAL AUDITOR AND THEREFORE THESE AMOUNTS HAVE BEEN RIGHTLY ADDED BACK AS UNEXPLAINED INCOMES OF THE ASSESSEE U/S 69 OF THE I T ACT, 1961. THE HIGHLIGHTED PORTION CLEARLY SHOWS THAT SUPPLEME NTARY CASH BOOK HAS BEEN VERIFIED. WE FAIL TO UNDERSTAND THAT AFTER MAKING SUCH VERIFICATION HOW WHOLE RECEIPTS WERE AD DED TO THE INCOME. IT IS NOT POSSIBLE IN CASE OF VARIOUS CONST RUCTION RECEIPTS TO HAVE 90-100% RATE OF PROFIT WHICH IS SH OWN IN PROFIT AND LOSS ACCOUNT BY SPECIAL AUDITOR WHICH ITSELF SH OWS THAT CONTENTION OF THE ASSESSEE HAS MERITS. 14 HOWEVER, AT THE SAME TIME THERE IS NO EVIDENCE BEFORE US TO SHOW THAT RECEIPTS OF RS. 377687/- IN THE HANDS OF G.M. CONSTRUCTION COMPANY PROPRIETARY CONCERN AND RS. 4 LAKHS IN THE HAND OF MATCHLESS ASSOCIATES WERE SECURITY RECE IPTS. NOW ADMITTEDLY THESE RECEIPTS DO NOT RELATE TO CONSTRUC TION PAYMENT THEREFORE WHOLE OF THESE AMOUNTS I.E. RS. 777687/- IS REQUIRED TO BE ADDED TO THE INCOME. 15 AS FAR AS RECEIPTS OF RS. 12,80,000/- ARE CONCE RNED, WE ACCEPT THE PLEA THAT THESE ARE CONSTRUCTION RECEIPT S AND 8 THEREFORE DIRECT RECEIPTS AND THEREFORE DIRECT THE ASSESSING OFFICER TO APPLY NET PROFIT RATE OF 8% ON THESE REC EIPTS. THEREFORE THIS GROUND IS PARTLY ALLOWED. 16 GROUND NO. 6 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT INITIALLY AT PAGE 9 OF THE IMPUGNED ORDER THE LD. CIT(A) HAS CLEARLY ADMITTED ADDITIONAL EVIDENCE BUT WHILE GIVING RELIEF THE SUPPLEMENTARY CASH BOOK WAS NOT A CCEPTED DESPITE THE FACT THAT SAME WAS VERIFIED BY THE ASS ESSING OFFICER. THEREFORE THIS FINDING IS NOT CORRECT. 17 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE SUPPORTED THE ORDER OF THE LD. CIT(A). 18 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD, WE WOULD LIKE TO POINT OUT THAT AFTER VE RIFICATION OF SUPPLEMENTARY CASH BOOK ASSESSING OFFICER SHOULD HA VE GIVEN EFFECT TO CONSEQUENTIAL FACTS. HOWEVER, IN ANY CA SE SINCE WE HAVE ALREADY ACCEPTED THE THEORY AND THIS GROUND HA S BECOME INFRUCTUOUS AND WE DECLINE TO ADJUDICATE THIS GROUN D IN DETAIL. 19 IN THE RESULT, ITA NO. 1177/CHD/2012 IS PARTLY A LLOWED. 20 ITA NO. 1173/CHD/2012 A.Y 2004-05 LATE SHRI PRI TAM SINGH 21 IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1 THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACT S IN FRAMING THE ASSESSMENT WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 2 THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACTS TO APPOINT SPECIAL AUDITOR IN AN AUTOMATIC MANNER WITHOUT CONS IDERING THE FACTS OF THE CASE AND CONSEQUENTLY THE APPOINTMENT OF THE AUDITOR IS BAD IN LAW. 3 THAT THE APPOINTMENT OF SPECIAL AUDITOR IS BAD IN LAW AND IS NOT IN ACCORDANCE WITH THE SPIRIT OF LAW UNDER THE PROVISIONS OF SECTION 142(2A) OF THE ACT BUT ONLY TO GAIN TIME FO R COMPLETING THE ASSESSMENT WHICH IS BARRED BY LIMITATION. 4 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING THE ADDITIONS OF RS. 10,35,813/- U/S 68 COMPRISING RS. 5,00,000/- FROM HARDEEP SINGH AND RS. 5,35,813/- FROM M.S. & CO. 9 5 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING AN ADDITION OF RS. 2,14,700/- BEING OPENING/CLOSING WO RK IN PROGRESS AS INCOME FOR THE YEAR. 6 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING THE ADDITION OF RS. 22,65,000/- TREATING TOTAL CONTRACT RECEIPTS OF RS. 22,65,000/- RECEIVED FROM PBIL APEX CONSORTIUM LTDL AS INCOME OF THE ASSESSEE FOR THE YEAR. 7 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING THE ADDITION OF RS. 4,50,000/- BEING CASH DEPOSITED FOR PURCHASE OF DEMAND DRAFT AND SHOWN IN SUPPLEMENTARY CASH BOOK. 8 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT TAKING RELIANCE OF ENTRIES RECORDED IN SUPPLEMENTARY CASH BOOK PRODUCED BEFORE THE LD. CIT(A) AFTER ADMITTING THE SAME U/R 46A(1)(D) AND DESPITE THE FACT THAT ASSESSING OFFICER HAS CONFIRM ED THE VERIFICATION OF DEBIT/CREDIT ENTRIES RECORDED IN TH E SUPPLEMENTARY CASH BOOK. 22 OUT OF ABOVE GROUNDS, GROUNDS NO. 1, 2 & 3 WERE NOT PRESSED BEFORE US, THEREFORE SAME ARE DISMISSED AS NOT PRESSED. 23 FURTHER THE ASSESSEE HAS MOVED AN APPLICATION FO R ADMISSION OF ADDITIONAL EVIDENCE. IN THIS APPLICAT ION THE ORDER OF SETTLEMENT COMMISSION IN CASE OF K.D. SHARMA AND ASSESSMENT ORDER IN CASE OF S.P. SINGH HAVE BEEN FI LED. IT WAS PLEADED THAT THESE TWO ORDERS WILL EXPLAIN MANY ISS UES RAISED BEFORE THE TRIBUNAL AND THESE ORDERS CAME INTO EXIS TENCE AFTER PASSING OF THE ORDERS BY THE ASSESSING OFFICER AND THE LD. CIT(A) AND THAT IS WHY THESE ARE BEING FILED BY WAY OF ADDITIONAL EVIDENCE. SINCE THESE DOCUMENTS WOULD T HROW LIGHT ON MANY ISSUES, IT WAS PRAYED THAT SAME MAY BE ADMI TTED. 24 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE OPPOSED THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE . 25 AFTER HEARING BOTH THE PARTIES WE FIND THAT ADDI TIONAL EVIDENCE IS ONLY IN THE FORM OF ORDERS PASSED BY TH E ASSESSING OFFICER AND SETTLEMENT COMMISSION. THE ORDERS HAVE BEEN PASSED AFTER PASSING THE ASSESSMENT ORDER AND SINCE THE SAME HAVE BEARING ON THE ISSUES REQUIRED TO BE ADJUDICAT ED BEFORE 10 US, THEREFORE IN THE INTEREST OF JUSTICE THIS APPLI CATION IS BEING ALLOWED AND ASSESSMENT ORDERS IN CASE OF S.P. SINGH FOR VARIOUS YEARS AND ORDER OF THE SETTLEMENT COMMISSIO N IN CASE OF K.D. SHARMA IS ADMITTED. 26 GROUND NO. 4 SINCE NO EVIDENCE WAS FILED DURIN G ASSESSMENT PROCEEDINGS THEREFORE A SUM OF RS. 20358 32/- WAS ADDED TO THE INCOME OF THE ASSESSEE. 27 BEFORE THE LD. CIT(A) IT WAS SUBMITTED THAT ACCO UNTS OF CERTAIN PARTIES WERE RUNNING ACCOUNTS AND SPECIAL A UDITOR HAS SIMPLY TAKEN THE CREDIT ENTRIES WITHOUT GIVING ANY BENEFIT OF THE DEBIT ACCOUNT OF SAME PARTIES. IT WAS FURTHER STAT ED THAT A SUM OF RS. 536500/- WAS RECEIVED FROM M.S & CO. OUT OF WHICH RS. 436500/- WAS DIRECTLY PAID BY THIS PARTY AGAINST PR OPERTY NO. BMM 373 PH 11, MOHALI WHICH WAS PURCHASED ALONG WIT H ASSESSEE AND THIS PARTY HAD 30% SHARE IN THE SAID P ROPERTY. THE BALANCE OF RS. 1 LAKH WAS GIVEN ON 27.11.2003 B Y BANK DRAFT. THE ASSESSING OFFICER MADE ENQUIRIES IN RES PECT OF RECEIPTS DURING REMAND REPORT BUT OBSERVED THAT REP LY GIVEN BY MANJIT SINGH DO NOT PROVE INGREDIENTS OF SEC 68 OF THE ACT. IN THE COUNTER COMMENTS BEFORE THE LD. CIT(A) IT WAS S TATED ON BEHALF OF THE ASSESSEE THAT THE ASSESSING OFFICER H AS SIMPLY BRUSHED ASIDE THIS EVIDENCE WITHOUT POINTING OUT HO W THE INGREDIENTS OF SEC 68 WERE NOT FULFILLED. 28 THE LD. CIT(A) CONFIRMED THIS PORTION OF THE ADD ITION BY OBSERVING THAT THIS CONTENTION WAS RAISED FOR THE F IRST TIME. THERE WAS ANOTHER ADDITION OF RS. 10.00 LAKHS RECEI VED FROM S.P. SINGH WHICH WAS ACCEPTED BY THE ASSESSING OFFI CER DURING REMAND REPORT AND DELETED BY THE LD. CIT(A). SINCE REVENUE HAS NOT FILED ANY APPEAL AGAINST THIS DELETION, THI S ISSUE DOES 11 NOT REQUIRE TO BE GONE INTO IN DETAIL. BALANCE ADD ITION OF RS. 5 LAKH WAS SAME WHICH WAS STATED TO BE WITHDRAWN FROM THE BANK BY ONE HARDEEP SINGH WHO WAS STATED TO BE AN E MPLOYEE OF THE ASSESSEE. IN THE REMAND REPORT THE ASSESSIN G OFFICER STATED THAT NO PROOF HAS BEEN FILED BY THE ASSESSEE TO SHOW THE PURPOSE OF WITHDRAWAL AND ON THE BASIS OF THIS REMA ND REPORT, ADDITION WAS CONFIRMED BY THE LD. CIT(A). 29 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REIT ERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A). HE FURTHER POINTED OUT THAT PROPERTY NO. BMM 373 PH 11, MOHALI WAS PUR CHASED FOR RS. 29,10,000/- THROUGH AUCTION. MONEY WAS TO BE PAID IN INSTALLMENTS. SHARE OF MANJIT SINGH WAS 30%. MANJ IT SINGH PAID A SUM OF RS. 436500/- DIRECTLY TO PUDA ON 27.1 1.2003 AND RS. 1 LAKH WAS PAID LATER ON. BALANCE OF AMOUNT WA S PAID TO GURJIT SINGH ON THE INSTRUCTIONS OF THE ASSESSEE. ALL THESE ISSUES WERE VERIFIED BY THE ASSESSING OFFICER DURIN G REMAND PROCEEDINGS AND IN RESPONSE TO ENQUIRIES U/S 133(6) . MANJIT SINGH HAD FILED A LETTER BEFORE THE ASSESSING OFFIC ER IN RESPONSE TO QUERY GIVING ALL THESE DETAILS (COPY OF WHICH IS AVAILABLE AT PAGE 62 OF PAPER BOOK). HE HAS FILED C OPY OF ACCOUNT, ACKNOWLEDGEMENT OF RETURN AND AGREEMENT SH OWING SHARE OF PROPERTY. DESPITE ALL THESE INFORMATIONS REVENUE HAS NOT ACCEPTED THE EXPLANATION WHICH IS NOT CORRECT. 30 IN RESPECT OF ADDITION ON ACCOUNT OF CASH OF RS. 5 LAKH IT WAS STATED THAT THIS AMOUNT WAS WITHDRAWN BY HARDEE P SINGH WHO WAS AN EMPLOYEE DEPUTED AT GURDASPUR. HE ALSO REFERRED TO PAGE 41 OF PAPER BOOK WHICH IS COPY OF BANK ACCO UNT IN PUNJAB NATIONAL BANK IN THE NAME OF MATCHLESS ASSOC IATES WHICH IS A PROPRIETARY CONCERN OF THE ASSESSEE AND POINTED OUT 12 THAT NAME OF HARDEEP SINGH IS CLEARLY MENTIONED. TH IS CASH WAS HANDED OVER TO THE ASSESSEE FIRM. HARDEEP SING H IN RESPONSE TO THE QUERY HAS CONFIRMED THIS FACT VIDE LETTER DATED 11.6.2012 TO THE ASSESSING OFFICER AND COPY OF THE LETTER IS PLACED AT PAGE 66 OF THE PAPER BOOK. 31 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND TH E LD. CIT(A). 32 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE MATTER WAS REMANDED TO THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS MAD E ENQUIRIES. IN RESPONSE TO THE QUERY U/S 133(6) MATC HLESS ASSOCIATES HAD CLEARLY MENTIONED THE FACT REGARDING PURCHASE OF PROPERTY JOINTLY WITH PRITAM SINGH I.E THE ASSES SEE AND THE FACT THAT M.S. & CO. KEPT 30% SHARE. PAN NUMBER AN D ACKNOWLEDGEMENT OF RETURN ETC. HAVE BEEN FILED. EV EN THE COPY OF AGREEMENT SHOWING 30% SHARE BELONGING TO HIM HAS BEEN FILED AT PAGE 35 OF THE PAPER BOOK. WE FAIL TO UND ERSTAND THAT AFTER RECEIVING THIS INFORMATION NO FURTHER ENQUIRY HAS BEEN MADE THEN SUCH EVIDENCE CANNOT BE IGNORED. THEREFOR E WE ARE OF THE OPINION THAT THIS ADDITION IS NOT JUSTIFIED. 33 SIMILARLY AS FAR AS ADDITION ON ACCOUNT OF RECEI PT OF RS. 5 LAKH HAS BEEN MADE THIS AMOUNT HAS BEEN WITHDRAWN B Y HARDEEP SINGH ON VARIOUS DATES WHICH BECOMES CLEAR FROM THE COPY OF THE BANK ACCOUNT PLACED AT PAGE 41 OF THE P APER BOOK. HARDEEP SINGH HAS CLEARLY STATED IN HIS LETTER (COP Y OF WHICH IS AVAILABLE AT PAGE 66 OF PAPER BOOK) THAT HE WAS EMP LOYED BY THE ASSESSEE AND WAS DEPUTED TO GURDASPUR SITE AND THE AMOUNTS WERE WITHDRAWN FROM THE BANK AND WERE HANDE D OVER 13 TO PRITAM SINGH. THEREFORE CLEARLY THE ASSESSEE HAS DISCHARGED THE ONUS WHICH WAS PUT ON THE ASSESSEE AND THE ASSE SSING OFFICER HAS NOT MADE ANY FURTHER INQUIRY. THEREFORE IN OUR OPINION, THE ASSESSING OFFICER IS NOT RIGHT TO REJ ECT THIS EVIDENCE WITHOUT FURTHER ENQUIRY. ACCORDINGLY WE SE T ASIDE THE ORDER OF THE LD. CIT(A) AND DELETE THE ADDITION OF RS. 10,35,813/-. 34 GROUND NO. 5 & 6 AFTER HEARING BOTH THE PARTI ES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OF FICE NOTICED THAT ASSESSEE HAD RECEIVED A SUM OF RS. 296 4462/- COMPRISING OF RECEIPTS IN MATCHLESS ASSOCIATES AMOU NTING TO RS. 1600174/- AND IN G.M. CONSTRUCTION AMOUNTING TO RS. 1579700/- WHICH FURTHER COMPRISED RS. 214700/- AS O PENING WORK PROGRESS. WHOLE OF THESE RECEIPTS EXCEPT FOR PROFIT SHOWN BY THE ASSESSEE AMOUNTING TO RS. 61757/- WAS ADDED TO THE INCOME. ON APPEAL ACTION OF THE ASSESSING OFFICER H AS BEEN CONFIRMED BY THE LD. CIT(A). 35 IN RESPECT OF THE AMOUNT OF RS. 214700/- IT WAS SUBMITTED THAT THIS IS THE FIGURES OF OPENING WORK IN PROGRES S. IN THIS REGARD HE REFERRED TO THE INCOME AND EXPENDITURE ST ATEMENT PLACED AT PAGE 73 OF THE PAPER BOOK. 36 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE STRONGLY RELIED ON THE ORDERS OF ASSESSING OFFICER AND THE L D. CIT(A). 37 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE INCOME AND EXPENDITURE ACCOUNT WHICH IS AVAILABLE AT PAGE 73 CLEARLY SHOW THAT OPE NING STOCK OF RS. 214700/- CLOSING STOCK IS ALSO SHOWN AT RS. 214700/-. THEREFORE THERE IS NO JUSTIFICATION IN ADDITION OF OPENING STOCK WHICH HAS BEEN SHOWN AS CLOSING STOCK AND ACCORDING LY WE SET 14 ASIDE THE ORDER OF THE LD. CIT(A) AND DELETE THE AD DITION OF RS. 214700/-. 38 GROUND NO. 6 AFTER HEARING BOTH THE PARTIES WE FIND THAT AS NOTED ABOVE WHILE ADJUDICATING GROUND NO. 5 THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 2902705/-. THIS C OMPRISED VARIOUS AMOUNTS AND CLOSING STOCK OF RS. 214700/-. 39 BEFORE THE LD. CIT(A) IT WAS POINTED OUT THAT RS . 1579700/- WAS CREDITED IN THE BOOKS OF G.M. CONSTRU CTION WHICH COMPRISED FOLLOWING ITEMS: GM CONSTRUCTION CO. 29.05.2003 PBIL APEX CONSORTIUM LTD 295,000.00 25.06.2003 PBIL APEX CONSORTIUM LTD 120,000.00 25.06.2003 PBIL APEX CONSORTIUM LTD 100,000.00 25.06.2003 PBIL APEX CONSORTIUM LTD 300,000.00 25.06.2003 PBIL APEX CONSORTIUM LTD 550,000.00 TOTAL 13,65,000.00 OPENING WORK-IN- PROGRESS 2,14,700.00 15,79,700.00 THE AMOUNT OF RS. 1600174/- WERE SHOWN IN THE BOOKS OF MATCHLESS ASSOCIATES AND COMPRISED OF THE FOLLOWING AMOUNTS: 30.04.2003 DRAINAGE DIVISION AMRITSAR 700,174.00 29.05.2003 PBIL APEX CONSORTIUM LTD 250,000.00 25.06.2003 PBIL APEX CONSORTIUM LTD 150,000.00 04.08.2003 PBIL APEX CONSORTIUM LTD 450,000.00 06.08.2003 PBIL APEX CONSORTIUM LTD 50,000.00 TOTAL 1,600,174.00 IT WAS POINTED OUT THAT AS FAR AS SUM OF RS. 136500 0/- RECEIVED FROM PBIL APEX CONSORTIUM LTD (IN SHORT PBIL), SAME CONSIST OF CONSTRUCTION RECEIPTS RS. 214700/- PERTAIN TO OPENI NG AND CLOSING WORK IN PROGRESS WHICH WE HAVE DISCUSSED AB OVE WHILE ADJUDICATING GROUND NO. 5. SIMILARLY SUM OF RS. 9 LAKHS SHOWN IN MATCHLESS ASSOCIATES COMPRISED OF CONSTRUCTION R ECEIPTS RECEIVED FROM PBIL. THE BALANCE OF RS. 700174/- WA S THE PAYMENT RECEIVED ON ACCOUNT OF WORK WHICH WAS EXECU TED IN 15 ASSESSMENT YEAR 1999-2000. THE LD. COUNSEL FOR THE ASSESSEE RAISED THE SAME CONTENTIONS THAT THE EXPENSES WERE NOT BOOKED WHICH WAS ULTIMATELY BOOKED IN SUPPLEMENTARY CASH B OOK WHICH WAS VERIFIED BY THE ASSESSING OFFICER. 40 THE LD. CIT(A) DELETED THE ADDITION IN RESPECT O F OLD PAYMENTS RECEIVED AGAINST THE WORK OF DRAINAGE DIV, AMRITSAR AMOUNTING TO RS. 700174/-. HOWEVER, OTHER ADDITIO NS WERE CONFIRMED BECAUSE OF THE REASONS GIVEN IN CASE OF A SSESSMENT YEAR 2003-04 FOR SIMILAR ADDITIONS. 41 BEFORE US, BOTH THE PARTIES MADE SIMILAR SUBMISS IONS AS MADE IN RESPECT OF GROUND NO. 5 IN ITA NO. 1177/CHD /2012 FOR ASSESSMENT YEAR 2004-05. 42 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD, WE FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE. IT IS CLEAR THAT FOR EXAMPLE IN G .M. CONSTRUCTION CASE AGAINST THE PAYMENT OF RS. 157970 0/-, NET PROFIT IS SHOWN AT RS. 1364715/- WHICH IS ALMOST 90 % WHICH IS NOT POSSIBLE IN CONSTRUCTION BUSINESS. THEREFORE W E ARE SATISFIED WITH THE REASONING THAT THE EXPENSES WERE BOOKED IN THE SUPPLEMENTARY CASH BOOK WHICH WAS VERIFIED BY T HE ASSESSING OFFICER DURING REMAND REPORT IN ASSESSMEN T YEAR 2003-04. THEREFORE WE SET ASIDE THE ORDER OF THE L D. CIT(A) AND DIRECT THE ASSESSING OFFICER TO APPLY RATE OF P ROFIT AT 8% IN RESPECT OF RECEIPTS OF RS. 2265000/- (RS. 1365000 + RS. 900000/-) AND DELETE THE ADDITION MADE ON ACCOUNT O F CONSTRUCTION RECEIPTS. 43 GROUND NO. 7 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICE NOTICED THAT ASSESSEE HAS RECEIVED VARIOUS AMOUNTS FROM S. P. SINGH 16 TOTALING TO RS. 1405223/-. IT WAS MAINLY STATED T HAT EXCEPT FOR RS. 450,000/- WHICH WAS WRONG ENTRY THAT THE AMOUNT S WERE RECEIVED AS GIFT FROM THE SON OF THE ASSESSEE, S.P. SINGH. THE ASSESSING OFFICER DID NOT ACCEPT BECAUSE THERE WAS NO EVIDENCE BEFORE HIM AND ACCORDINGLY MADE ADDITION O F RS. 1405223/-. 44 BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT ENT RY FOR RS. 4,50,000/- WAS WRONGLY MADE AND IN FACT IT PERTAINS TO TRANSACTION OF PURCHASE OF PROPERTY IN PLOT NO. 4B, MOHALI ALONG WITH S.P. SINGH. AGAINST THIS DEMAND DRAFT WAS GOT MADE FOR RS. 4,50,000/- WHICH WAS WRONGLY TAKEN AS RECEIVED FROM S.P. SINGH. SINCE ON THE SAME DAY A SUM OF RS. 4,50,000 /- FROM S.P. SINGH WAS RECEIVED, SO THIS MISTAKE WAS COMMIT TED. IN FACT THIS DD WAS PURCHASED OUT OF CASH AND SAME WAS ADDED IN THE SUPPLEMENTARY CASH BOOK. IN RESPECT OF OTHER AMOUNTS RELEVANT EVIDENCE WAS FILED AND THE SAME HAS BEEN A CCEPTED BY THE LD. CIT(A) AND ADDITION AMOUNTING TO RS. 955 223/- WAS DELETED BY THE LD. CIT(A) AGAINST WHICH THE REVENUE IS IN APPEAL. 45 THE LD. CIT(A) DID NOT ACCEPT THE EXPLANATION FO R RS. 450000/- BECAUSE ACCORDING TO HER THEORY OF SUPPLEM ENTARY CASH BOOK WAS IN CONTRAVENTION OF RULE 46A. 46 BEFORE US, THE SUBMISSIONS MADE BEFORE THE LD. C IT(A) WERE REITERATED. REFERENCE WAS MADE TO THE REMAND REPORT WHEREIN SUPPLEMENTARY ENTRIES ARE STATED TO BE VERI FIED BY THE ASSESSING OFFICER. 47 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 17 48 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD WE FIND FORCE IN THE SUBMISSIONS OF LD. C OUNSEL FOR THE ASSESSEE. AS OBSERVED IN ASSESSMENT YEAR 2003 -04 IN ITA NO. 1177/CHD/2012 THE SUPPLEMENTARY CASH BOOK W AS ORIGINALLY ADMITTED BY THE LD. CIT(A) AND SENT FOR REMAND REPORT. IN THE REMAND REPORT WHICH HAS BEEN PLACED AT PAGE 49 TO 66 RELEVANT COMMENTS IN RESPECT OF THIS ENTRY AR E INCORPORATED AT PAGE 54 AND READS AS UNDER: WITH REGARD TO PAYMENT OF RS. 450000/- CLAIMED TO HAVE BEEN PAID OUT OF FUNDS AVAILABLE AS RECORDED IN SUPPLEME NTARY CASH BOOK, THE ENTRIES OF RS. 450000/- IS DEBITED IN THE SUPPLEMENTARY CASH BOOKS, THE DEBIT/CREDIT ENTRIES IN THIS CASH BOOK IS VERIFIED. HOWEVER, THE SUPPLEMENTARY CASH BOOK NOW FILED BY ASSESSEE IS IN CONTRAVENTION TO RULE 46A O F IT RULES, 1962 AND THE SAME MAY NOT BE ADMITTED AS TANTAMOUNT TO A DDITIONAL EVIDENCE. THESE PAYMENTS WERE NOT RECORDED IN THE BOOKS PRODUCED BEFORE SPECIAL AUDITOR AND THEREFORE THESE AMOUNTS HAVE BEEN RIGHTLY ADDED BACK AS UNEXPLAINED INCOMES OF T HE ASSESSEE U/S 69 OF IT ACT, 1961. HIGHLIGHTED PORTION CLEARLY SHOW THAT ENTRY IN RESP ECT OF RS. 450000/- WAS VERIFIED BY THE ASSESSING OFFICER. IF THE ASSESSING OFFICER HAD ANY FURTHER DOUBT HE SHOULD H AVE MADE FURTHER ENQUIRY BUT HE COULD NOT SIMPLY REJECT THIS EVIDENCE. THEREFORE WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DELETE THE ADDITION OF RS. 450000/-. 49 GROUND NO. 8 THIS ISSUE HAS ALREADY BEEN DECID ED BY US WHILE ADJUDICATING ITA NO. 1177/CHD/2012 FOR ASS ESSMENT YEAR 2003-04 VIDE PARA 18 WHEREIN THIS GROUND WAS HELD TO BE INFRUCTUOUS AND FOLLOWING THE SAME WE HOLD THIS GRO UND TO BE INFRUCTUOUS. 50 IN THE RESULT, ITA NO. 1173/CHD/2012 IS PARTLY A LLOWED. 51 ITA NO. 1174/CHD/2012 A.Y 2005-06 LATE SHRI PRI TAM SINGH 52 IN THIS APPEAL THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: 18 1 THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACT S IN FRAMING THE ASSESSMENT WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 2 THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACTS TO APPOINT SPECIAL AUDITOR IN AN AUTOMATIC MANNER WITHOUT CONS IDERING THE FACTS OF THE CASE AND CONSEQUENTLY THE APPOINTMENT OF THE AUDITOR IS BAD IN LAW. 3 THAT THE APPOINTMENT OF SPECIAL AUDITOR IS BAD IN LAW AND IS NOT IN ACCORDANCE WITH THE SPIRIT OF LAW UNDER THE PROVISIONS OF SECTION 142(2A) OF THE ACT BUT ONLY TO GAIN TIME FO R COMPLETING THE ASSESSMENT WHICH IS BARRED BY LIMITATION. 4 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING THE ADDITIONS OF RS. 13,50,000 U/S 68 COMPRISING RS. 3, 00,000/- RECEIVED FROM M.S. ALAGH, RS 8,50,000/- FROM R.K. A SSOCIATES AND RS. 2,00,000/- FROM SHARMA ASSOCIATES. 5 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING A DISALLOWANCE OF RS. 50,000/- ON ACCOUNT OF LIFE INS URANCE PREMIUM PAID DESPITE THE FACT THAT SUCH EXPENSE HAS NOT BEE N ALLOWED AS AN EXPENDITURE. 53 GROUNDS NO. 1 TO 3 AND 5 WERE NOT PRESSED BEFORE US, THEREFORE SAME ARE DISMISSED AS NOT PRESSED BEFORE US. 54 GROUND NO. 4 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICE NOTICED THAT SPECIAL AUDITOR HAS MADE OBSERVATIONS THAT FOL LOWING AMOUNTS WERE FOUND TO HAVE BEEN RECEIVED FROM VARIO US PARTIES AND ARE SHOWN IN THE TABLE BELOW: PRITAM SINGH CREDIT DEBIT BALANCE GURJIT SINGH 545,615 2997730 - SHARMA ASSOCIATES 200,000 NIL 200,000 M/S MATCHLESS ASSOCIATES (PROP. PRITAM SINGH) R.K. ASSOCIATES 450,000 NIL 450,000 EXECUTIVE ENGINEERS 1,087,717 1,087,717 0 AMRITSAR DRAINAGE R N HIGHWAYS 425,000 1600000 - M/S GM CONSTRUCTION (PROP. PRITAM SINGH) M.S. ALAGH 300,000 NIL 300,000 19 R.K. ASSOCIATES 400,000 NIL 400,000 TOTAL 3,408,333 1350000 SPECIAL AUDITOR HAD ASKED THE ASSESSEE TO FILE CONF IRMATION ALONG WITH BALANCE SHEET ETC OF THE SAID PARTIES WH ICH WAS NOT FILED. DURING ASSESSMENT PROCEEDINGS NO EVIDENCE W AS FILED, THEREFORE THIS SUM OF RS. 1350000/- WAS ADDED TO TH E INCOME OF THE ASSESSEE U/S 68 OF THE ACT. 55. BEFORE THE LD. CIT(A) CERTAIN DOCUMENTS WERE FI LED WHICH WERE SENT FOR REMAND REPORT. THE ASSESSING OFFICER DURING REMAND PROCEEDINGS MADE CERTAIN ENQUIRIES IN RESPEC T OF CERTAIN DOCUMENTS WHICH WERE FILED BUT ASSESSING OF FICER OBSERVED THAT SUCH DOCUMENTS DO NOT PROVE GENUINENE SS OF CREDITS. THE LD. CIT(A) FOLLOWING THESE COMMENTS C ONFIRMED THE ADDITION. 56. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUB MITTED THAT A SUM OF RS. 2 LAKHS WAS RECEIVED FROM SHARMA ASSOCIATES VIDE CHEQUE NO. 810359 AS UNSECURED LOAN AND DURING ENQUIRIES BY THE ASSESSING OFFICER DURING ASSESSMEN T PROCEEDINGS IN RESPONSE TO QUERY U/S 133(6) CONFIRM ATION WAS FILED BY SHARMA ASSOCIATES (COPY OF WHICH IS PLACED AT PAGE 50 OF THE PAPER BOOK). IN RESPECT OF SUM OF RS. 4500 00/- AND RS. 4 LAKHS RECEIVED FROM R.K. ASSOCIATES IT WAS STATED THAT THE ASSESSEE HAD JOINTLY PURCHASED PROPERTY NO. BMM 37 3 PH 11, MOHALI ALONG WITH MS. RAVINDER KAUR PROPRIETOR OF R.K. ASSOCIATES FROM PUDA. A SUM OF RS. 450000/- AND R S. 4 LAKH FOR 25% SHARE IN THE ABOVE PROPERTY WAS PAID BY R.K . ASSOCIATES. THE ASSESSING OFFICER HAS ALREADY ISSU ED A LETTER U/S 133(6) IN RESPONSE TO WHICH SHE HAS CONFIRMED T HESE 20 AMOUNTS AND RELEVANT DOCUMENTS WHICH ARE AT PAGE 86 TO 89 OF PAPER BOOK. IN RESPECT OF LAST ITEM OF RS. 3 LAKHS IT WAS SUBMITTED THAT THIS AMOUNT WAS RECEIVED FROM M.S. A LAGH FOR PURCHASE OF ONE MOHINDRA JEEP NO. PBJ 1001 AND TRU CK NO. PNP 9951. AGAINST THIS THE ASSESSING OFFICER HAS C ONDUCTED ENQUIRIES AND IN RESPONSE TO WHICH DOCUMENTS WERE F IELD (COPY OF WHICH IS AVAILABLE AT PAGE 90 & 91 OF PAPER BOOK ). 57 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 58 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CAREF ULLY. AS FAR AS A SUM OF RS. 2 LAKH IS SAID TO HAVE RECEIVED FROM SHARMA ASSOCIATES THE ASSESSEE HAS FILED A COPY OF CONFIRMATION (COPY OF WHICH IS AVAILABLE AT PAGE 50 OF PAPER BOOK) COPY OF ACCOUNT IS SENT BY THE ASSESSEE TO SH ARMA ASSOCIATES IN WHICH MAHINDER SHARMA HAS SIMPLY SIGN ED. PAN NO. HAS ALSO BEEN GIVEN. THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY. ONCE THE DEPOSITOR HAS GIVEN THE CONF IRMATION AND PAN, IF THE ASSESSING OFFICER HAD ANY DOUBT HE SHOULD HAVE CONDUCTED FURTHER ENQUIRY AND COULD NOT HAVE REJECT ED THIS EVIDENCE WITHOUT ANY FURTHER ENQUIRY. THEREFORE WE ARE OF THE OPINION THAT THE ASSESSEE HAS DISCHARGED THE BURDEN OF PROVING THE GENUINENESS OF THIS TRANSACTION OF RS. 2 LAKHS . 59 IN RESPECT OF A SUM OF RS. 4.50 LAKHS AND RS. 4 LAKHS RECEIVED FROM R.K. ASSOCIATES, IN RESPONSE TO THE E NQUIRY BY THE ASSESSING OFFICER A LETTER WAS WRITTEN BY R.K. ASSOCIATES IN WHICH IT WAS CLEARLY STATED THAT THEY WERE HAVING 2 5% SHARE IN PROPERTY NO. BMM 373 PH 11, MOHALI WHICH WAS PURCHA SED THROUGH AUCTION. OTHER DETAILS OF PAYMENT THROUGH D D WERE ALSO FURNISHED. EVEN COPY OF THE AGREEMENT WAS FIL ED. 21 HOWEVER, PAN OF R.K. ASSOCIATES WAS NOT MENTIONED I N THE CONFIRMATION. THUS THE ASSESSEE HAD CLEARLY FAILED TO DISCHARGE THE ONUS AND THEREFORE WE DIRECT THE ASSE SSING OFFICER TO CONFIRM THIS ADDITION OF RS. 8.50 LAKHS. 60 AS FAR AS A SUM OF RS. 3 LAKHS RECEIVED FROM G.M . CONSTRUCTION IS CONCERNED, ONLY DOCUMENT FILED IS A LETTER FROM M.S. ALAGH STATING THAT HE HAS PURCHASED A TRUCK AN D A JEEP. EVEN PAN NO IS NOT MENTIONED IN SUCH LETTER. WE HA VE ASKED THE COUNSEL FOR THE ASSESSEE DURING HEARING WHETHER EVIDENCE IN THE FORM OF TRANSFER OF VEHICLES BY WAY OF ENDOR SEMENT IN THE REGISTRATION CERTIFICATION IS THERE, COUNSEL FOR TH E ASSESSEE SHOWED INABILITY TO FILE SUCH EVIDENCE. THEREFORE WE ARE OF THE OPINION THAT IN RESPECT OF THIS TRANSACTION THE AS SESSEE HAS NOT DISCHARGED HIS BURDEN AND THIS ADDITION HAS BEE N RIGHTLY MADE BY THE LD. CIT(A) AND WE CONFIRM THE SAME. 61 TO CONCLUDE OUT OF TOTAL ADDITION OF RS. 1350000 /- U/S 68 WE ALLOW RELIEF IN RESPECT OF RS. 2.00 LAKHS FROM SHARMA ASSOCIATES. OTHER RECEIPTS OF RS. 1150,000/- (RS. 850,000/- FROM R.K. ASSOCIATES AND RS. 3 LAKHS RECEIVED FROM M.S. ALAGH IS NOT FOUND TO BE GENUINE AND THEREFORE THAT ADDIT ION IS BEING CONFIRMED. THEREFORE THIS GROUND IS PARTLY ALLOWED . 62 IN THE RESULT, ITA NO. 1174/CHD/2012 IS PARTLY ALLOWED. ITA NO. 1175/CHD/2012 A.Y 2006-07 LATE SHRI PRI TAM SINGH 63 IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1 THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACT S IN FRAMING THE ASSESSMENT WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 2 THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACTS TO APPOINT SPECIAL AUDITOR IN AN AUTOMATIC MANNER WITHOUT CONS IDERING THE 22 FACTS OF THE CASE AND CONSEQUENTLY THE APPOINTMENT OF THE AUDITOR IS BAD IN LAW. 3 THAT THE APPOINTMENT OF SPECIAL AUDITOR IS BAD IN LAW AND IS NOT IN ACCORDANCE WITH THE SPIRIT OF LAW UNDER THE PROVISIONS OF SECTION 142(2A) OF THE ACT BUT ONLY TO GAIN TIME FO R COMPLETING THE ASSESSMENT WHICH IS BARRED BY LIMITATION. 4 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING THE ADDITIONS OF RS. 9,50,000 U/S 68 ON ACCOUNT OF AMOU NT RECEIVED FROM SHARMA ASSOCIATES. 5 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING AN ADDITION OF RS. 4,00,000/- BEING CASH WITHDRAWAL BY CHEQUE THROUGH SARABJIT SINGH HOLDING THE SAME IS CHEQUE W ITHDRAWAL AND NOT A CASH WITHDRAWAL. 6 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING THE ADDITION OF RS. 1,02,97,500/- U/S 68 ON ACCOUNT OF AMOUNT RECEIVED FROM TRN LAND DEVELOPERS PRIVATE LIMITED. 7 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING THE ADDITION OF RS. 93,35,846/- HOLDING UNDER REPORTED PROFIT ON CONTRACT PAYMENTS OF RS. 1,10,70,110/-. 8 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT TAKING RELIANCE OF ENTRIES RECORDED IN SUPPLEMENTARY CASH BOOK PRODUCED BEFORE THE LD. CIT(A) AFTER ADMITTING THE SAME U/R 46A(1)(D) AND DESPITE THE FACT THAT ASSESSING OFFICER HAS CONFIRM ED THE VERIFICATION OF DEBIT/CREDIT ENTRIES RECORDED IN TH E SUPPLEMENTARY CASH BOOK. 64 OUT OF ABOVE GROUNDS, GROUNDS NO. 1,2, & 3 WERE NOT PRESSED BEFORE US, THEREFORE SAME ARE DISMISSED AS NOT PRESSED BEFORE US. 65 IN THIS CASE THE ASSESSEE HAS FILED AN APPLICATI ON FOR ADMISSION OF FOLLOWING DOCUMENTS: (I) ORDER OF SETTLEMENT COMMISSION PG 1 TO 10 OF APPLICATION (II) COPY OF REASONS RECORDED IN THE CASE OF S.P. S INGH BY THE D.C.I.T INTERNAL TAXATION PG 11-12 IT WAS STATED THAT THESE DOCUMENTS WERE OBTAINED BY THE ASSESSEE AFTER THE ORDER WAS RECEIVED FROM LD. CIT( A). IT WAS FURTHER STATED THAT THE ASSESSEE HAS RAISED MANY LO ANS FROM K.D. SHARMA AND WHO HAS SURRENDERED THESE AMOUNTS B EFORE THE SETTLEMENT COMMISSION. THEREFORE THIS DOCUMENT IS RELEVANT. SIMILARLY THE REASONS RECORDED FOR REOPE NING OF THE 23 ASSESSMENT IN THE CASE OF S.P. SINGH ARE RELEVANT B ECAUSE S.P. SINGH HAPPENS TO BE SON OF THE ASSESSEE FROM W HOM VARIOUS AMOUNTS WERE RECEIVED AS LOAN/GIFT. THE LD . COUNSEL FOR THE ASSESSEE MADE A PRAYER THAT SINCE THESE DOC UMENTS ARE RELEVANT THEY MAY BE ADMITTED. 66 ON THE OTHER HAND, THE D.R. FOR THE REVENUE OPPO SED THE SUBMISSIONS. 67 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD, WE ARE SATISFIED WITH THE REASONS GIVEN BY THE LD. COUNSEL FOR THE ASSESSEE. IN ANY CASE THESE ARE OR DERS OF VARIOUS INCOME TAX AUTHORITIES AND THEY CANNOT BE F ABRICATED DOCUMENTS, THEREFORE SAME WERE ADMITTED. 68 GROUND NO. 4 & 6 THESE TWO GROUNDS ARE BEING T AKEN TOGETHER BECAUSE THE ASSESSING OFFICER HAS ADJUDICA TED THESE ISSUES THROUGH COMMON PARAS. 69 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS THE ASSESSING OFFICE NOTICED THAT THE AMOUNTS WERE FOUND TO BE RECEIVED BY THE ASSESSEE W HICH WAS REFLECTED IN THE BALANCE SHEET BUT NO CONFIRMATIONS WERE FILED WHEN THE SAME WERE ASKED BY THE SPECIAL AUDITOR, T HEREFORE THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE THAT WHY THESE AMOUNTS SHOULD NOT BE TREATED AS INCOME OF THE ASSE SSEE U/S 68 OF THE ACT. THE DETAILS OF THE AMOUNTS ARE AS U NDER: PRITAM SINGH GURJIT SINGH 2,120,000 61,60,230 PRITAM SINGH & SONS 525,610 RADIANT EMPIRE PVT. LTD. 1,000,000 0 1,000,000 TRN LAND DEVELOPERS 10,297,500 0 10,297,500 R.N. HIGHWAYS 2,850,165 3,00,00,00 M/S MATCHLESS ASSOCIATES (PROP. PRITAM SINGH ) JOGINDER SINGH 2,494,490 0 2,494,490 24 SHARMA ASSOCIATES 950,000 0 950,000 RAJAT MINERALS PVT. LTD 6,720,690 8336840 - M/S GM CONSTRUCTIONS (PROP. PRITAM SINGH ) K. D. SHARMA 3,369,565 68,48,595 0 - 30,328,020 1,47,41,990 (THE AMOUNT OF RAJAT MINERALS PVT. LTD INCLUDE WORK DONE PAYMENTS OF RS. 42,21,515/-, WHICH HAS BEEN CONSIDERED SEPAR ATELY. AMOUNT OF RS. 33,69,565 FROM K D SHARMA HAS BEEN CONSIDERE D SEPARATELY) SINCE THE ASSESSEE DID NOT FULFILL THE BASIC INGRED IENTS OF SEC 68 OF THE ACT, THESE AMOUNTS WERE ADDED TO THE INCO ME OF THE ASSESSEE BY MAKING ADDITION OF RS. 14744990/-. 70 ON APPEAL DETAILED SUBMISSIONS WERE MADE AND CER TAIN DOCUMENTS WERE ALSO FILED, THEREFORE THE LD. CIT(A) SENT THE MATTER TO THE ASSESSING OFFICER FOR REMAND PROCEEDI NGS FOR VERIFICATION OF CERTAIN ISSUES. ADDITION ON ACCOUN T OF CREDIT IN THE NAME OF RADIANT EMPIRE AMOUNTING TO RS. 10LAKHS , JAGIR SINGH RS. 2494492/- WERE DELETED ON THE BASIS OF RE MAND REPORT, THEREFORE NO FURTHER DISCUSSION IS REQUIRED SINCE THE REVENUE HAS FILED NO APPEAL AGAINST THESE DELETIONS . 71 IN RESPECT OF ADDITION AMOUNTING TO RS. 1029750 0/- IN THE NAME OF TRN LAND DEVELOPERS PRIVATE LTD (IN SHORT T RN) FOLLOWING COMMENTS WERE GIVEN BY THE DCIT IN THE RE MAND REPORT: ASSESSEE HAS CONTENDED THAT A SUM OF RS. 1,02,97,50 0/- FROM M/S TRN LAND DEVELOPERS PRIVATE LIMITED WAS RECEIVED DURING THE YEAR. OUT OF ABOVE, A SUM OF RS. 15,97,500/- WAS PAID VIDE DD NO . 10548 DRAWN ON PUNJAB & SIND BANK ON 20.01.2006 AGAINST A PROPERTY PURCHASED BY LATE SH. PRITAM SINGH (PLOT 374, PHASE XI, MOHALI) AND BALANCE OF RS. 8700000/- (COMPRISING RS. 22,00,000/- VIDE CH NO 48 204 DATED 24.01.2006 DRAWN ON PUNJAB & SINDH BANK, RS. 40,00, 000/- VIDE CH NO 48205 DATED 24.01.2006 DRAWN ON PUNJAB & SIND BANK & RS. 2500000/- VIDE CH NO. 48209 DATED 01.03.2006 DRAWN ON PUNJAB & SIND BANK ) WAS DIRECTLY PAID BY M/S TRN LAND DEVELOPER P LTD. TO A SHOK KUMAR AGAINST A PROPERTY PURCHASED BY LATE SH. PRITAM SINGH (# 30 60, SECTOR 20, CHANDIGARH. 25 THE ASSESSING OFFICER HAD FURTHER POINTED OUT THAT BALANCE SHEET AS ON 31.3.2006 OF THE SAID COMPANY WAS ALSO FILED WHICH CLEARLY DEPICTS THAT A SUM OF RS. 10297500/- WAS PA ID TO APEX EXPORTS PROPRIETOR GURJIT SINGH. 72 THE LD. CIT(A) DID NOT FIND FORCE IN THE SUBMISS IONS AND DECIDED THE ISSUE AGAINST THE ASSESSEE VIDE FOLLOWI NG PARAS: I HAVE CONSIDERED THE REPORT OF THE AO AS WELL AS T HE SUBMISSIONS OF THE ASSESSEE. THE COMPANY TNR (SUPRA), WHEREIN T HE DAUGHTER- IN-LAW OF THE ASSESSEE SMT. RANJIT KAUR IS A DIRECT OR, IN ITS RESPONSE TO REQUISITION UNDER SECTION 133(6) DATED 11.06.2012 HAS EXPLAINED AS BELOW: .THAT IN FACT OUR COMPANY HAS RECEIVED A SUM OF R S. 2,05,00,000/- FROM MR. K.D. SHARMA OF ORISSA AS ADV ANCE AND OUT OF THIS A SUM OF RS. 1,02,97,500/- WAS PAID TO PRIT AM SINGH AND HIS ASSOCIATES AS TEMPORARY ADVANCE. IN FACT, THE A MOUNT WAS RECOVERABLE BY PRITAM SINGH AND HIS SON GURJIT SING H FROM OTHER BUSINESS CONCERNS OF K.D. SHARMA ETC. THE AMOUNT W AS GIVEN AS TEMPORARY ADVANCE TO GURJIT SINGH ON THE DIRECTIONS OF K.D. SHARMA WHO HAS DEPOSITED FUNDS WITH THE SAID COMPAN Y TILL THE ACCOUNTS OF GURJIT SINGH ARE SETTLED AND REPAID BY K.D. SHARMA FROM THE RESPECTIVE CONCERNS WHERE THE AMOUNT WAS P AYABLE TO GURJIT SINGH. THAT IN THE MEAN TIME, A DISPUTE HAS ARISEN AMONGST K.D. SHARMA HIS BUSINESS CONCERNS AND GURJIT SINGH AND HIS FAMILY MEMBERS AND TRN LAND DEVELOPERS PRIVATE LIMI TED. AN FIR WAS LODGED BY K.D. SHARMA AGAINST GURJIT SINGH AND HIS FAMILY MEMBERS, WHERE KD SHARMA HAD CLAIMED THAT THE AMOUN T DEPOSITED WITH TRN WAS AMOUNT PAID TO FAMILY MEMBER S OF GURJIT SINGH. THE MATTER IS PENDING IN THE COURT OF CIVIL JUDGE SENIOR DIVISION CHANDIGARH. IT IS FURTHER RELEVANT TO MENTION THAT NO BUSINESS WAS TRANSACTED IN TRN LAND DEVELOPERS PVT. LTD. EXCEPT FOR RECEIPT OF FUNDS FROM K.D. SHARMA AND TRANSFER OF FUNDS IN FAVOUR OF GURJ IT SINGH AND HIS FAMILY MEMBERS. THE AO IN HIS COMMENTS HAS POINTED OUT THAT THE COM PANY HAD FURNISHED A COPY OF BALANCE SHEET AS ON 31.03.2006 WHICH REFLECTS THE SUM AS PAID TO APEX EXPORTS, PROP. SH. GURJIT S INGH. THE BALANCE SHEET IS FOUND TO BE UNAUDITED AND THE EXPL ANATION GIVEN U/S 133(6), AS AFORESAID , CANNOT BE THEREFORE ACCE PTED AT FACE VALUE. THE SOURCE OF THE MONEY HAS NOT BEEN SUITABL Y SUBSTANTIATED. THE COMPANY TNR HAS THE DAUGHTER-IN- LAW OF THE ASSESSEE AS ONE OF THE DIRECTORS AS EVIDENT FROM TH E SIGNATORY TO THE INFORMATION SUPPLIED TO THE AO. WHEN THE ADDITI ON HAS BEEN MADE U/S 68, IT IS CLEAR THAT THE PRIMARY ONUS IS O N THE ASSESSEE TO PROVE THE THREE INGREDIENTS OF IDENTITY, CREDITW ORTHINESS AND GENUINENESS OF THE TRANSACTION AND ONLY THEREAFTER DOES THE BURDEN SHIFT TO THE AO. HERE, IT IS NOT UNDERSTOOD AS TO WHY SUCH A HUGE SUM OF RS. 2,05,00,000/- IS OSTENSIBLY SHOWN A S PAID TO THE COMPANY BY ONE KD SHARMA, AND ON HIS APPARENT DIREC TIONS, THE COMPANY IN TURN ADVANCES RS. 1.02 LAKHS TO THE ASSE SSEE. THUS CONSIDERING THE GAMUT OF THE CASE AND THE INTER-TWI NING OF THE TRANSACTIONS WITHOUT ANY SHRED OF EVIDENCE IS HELD TO BE FALLACIOUS. THE ASSESSEE IS THEREFORE HELD NOT TO H AVE DISCHARGED THE BURDEN CAST UPON HIM TO SUBSTANTIATE THE GENUIN ENESS OF THE CREDIT. IN OTHER WORDS THE ACTION OF THE AO IS UPHE LD. 26 IN RESPECT OF ADDITION AMOUNTING TO RS. 950000/- SA ID TO HAVE BEEN RECEIVED FROM SHARMA ASSOCIATES BY TRANSF ER OF FUNDS THE ASSESSING OFFICER IN HIS REMAND REPORT ST ATED THAT A COPY OF RETURN WAS FILED BY MOHINDER SHARMA PROPRIE TOR SHARMA ASSOCIATES BUT THE SAME DID NOT PROVE THE INGREDIEN TS OF SEC 68. IN HIS COMMENTS THE ASSESSEE HAS STATED THAT I T IS NOT CLEAR THAT WHICH INGREDIENTS WERE NOT COMPLIED AND IF THE ASSESSING OFFICER HAD ANY DOUBT HE SHOULD HAVE ASKE D THE ASSESSEE TO FILE FURTHER DOCUMENTS. THE LD. CIT(A) DID NOT FIND FORCE IN THE SUBMISSIONS AND OBSERVED THAT THESE SU BMISSIONS ARE BEING PUT FORTH FOR THE FIRST TIME AND CANNOT B E CONSIDERED AUTHENTIC AND THEREFORE THIS ADDITION WAS CONFIRMED . 73 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REFE RRED TO PG 77 OF PAPER BOOK WHICH WAS THE INFORMATION GIVEN BY TRN DURING ASSESSMENT PROCEEDINGS WHERE LOAN OF RS. 102 97500/- WAS CONFIRMED. IN THE MEANTIME K.D. SHARMA HAS FILE D AN FIR (COPY PLACED ON RECORD) IN WHICH IT WAS STATED THAT HE HAS GIVEN A SUM OF RS. 13,28NCRORES TO THE ASSESSEE GRO UP AND BECAUSE OF THE FIR AND SEARCH IN CASE OF ASSESSEE, HIS STATEMENT WAS ALSO RECORDED. IN THE STATEMENT SHRI K.D. SHARMA CLEARLY STATED THAT GURJIT SINGH INDUCED HIM TO MAKE VARIOUS INVESTMENTS AND ULTIMATELY ON THE BASIS OF FIR, K.D. SHARMA HAD SURRENDERED A SUM OF RS. 12 CRORES. HE FURTHER SUBMITTED THAT PRITAM SINGH I.E THE ASSESSEE HAS RE CEIVED A SUM OF RS. 10297500/- FROM TRN AS UNSECURED LOAN. OUT OF THIS AMOUNT A SUM OF RS. 1597500/- WAS PAID VIDE DD NO. 10548 ON 20.1.2006 AGAINST THE PROPERTY PLOT NO. 37 4 PHASE IX, MOHALI PURCHASED BY THE ASSESSEE AND BALANCE OF RS. 87 27 LAKHS COMPRISING THREE CHEQUES, WAS DIRECTLY PAID T O TRN AGAINST THE PROPERTY PURCHASED BY THE ASSESSEE NO. 3060, SECTOR 20, CHANDIGARH. HE REFERRED TO A COPY OF ACC OUNT OF THIS COMPANY AND THE BOOKS OF THE ASSESSEE WHICH IS PLAC ED AT PAGE 42 OF PAPER BOOK. HE SUBMITTED THAT THIS COMP ANY WAS REGULARLY ASSESSED TO INCOME TAX AND PAN WAS ALSO F URNISHED BEFORE THE ASSESSING OFFICER BECAUSE HE HAS MADE IN VESTMENT IN TRN WHERE THE ASSESSEES DAUGHTER-IN-LAW WAS DIR ECTOR. ONCE THE SOURCE IN THE HANDS OF THE DEPOSITOR HAS B EEN EXPLAINED IN VIEW OF THE ORDER OF SETTLEMENT COMMIS SION THESE ADDITIONS COULD NOT HAVE BEEN MADE PARTICULARLY BE CAUSE DURING REMAND PROCEEDINGS, TRN HAD CONFIRMED GIVING THESE ADVANCES. IN RESPECT OF A SUM OF RS. 950000 RECEIV ED FROM SHARMA ASSOCIATES IT IS SUBMITTED THAT SHARMA ASSOC IATES HAD FILED CONFIRMATION IN RESPONSE TO ENQUIRY MADE BY A SSESSING OFFICER U/S 133(6) AND COPY OF THE SAME IS ENCLOSED AT PAGE 44 OF THE PAPER BOOK. CONFIRMATION CLEARLY SHOW THAT EVEN PAN OF MOHINDER SHARMA PROPRIETOR OF SHARMA ASSOCIATES WAS ALSO THERE. MONEY WAS GIVEN BECAUSE THE ASSESSEE HAD PUR CHASED PROPERTY JOINTLY IN PUDA AUCTION FOR A CONSIDERATIO N OF RS. 6520000/- WHEREIN SHARE OF SHARMA ASSOCIATES WAS 15 %. TOTAL SHARE CAME TO 150000/- WHICH WAS PAID BY THIS PARTY . IT WAS FURTHER SUBMITTED THAT THE LD. CIT(A) WRONGLY CONFI RMED THIS ADDITION BY OBSERVING THAT THESE DOCUMENTS WERE NOT GIVEN EARLIER. ONCE ADDITIONAL EVIDENCE WAS ADMITTED UND ER RULE 46A, SAME HAS TO BE CONSIDERED AND ACTED UPON. 74 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE STRONGLY RELIED ON THE ORDER OF LD. CIT(A). 28 75 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD, WE FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE THAT ONCE ADDITIONAL EVIDENCE WAS ADMITTED AND SAME WAS SENT FOR REMAND PROCEEDINGS AND DURING ASSESSMENT PROCEEDINGS SHARMA ASSOCIATES CONFIRMED HAVING PAID A SUM OF RS. 950000/- AND EVEN PAN WAS GIVEN T HEN EITHER THE ASSESSING OFFICER SHOULD HAVE ACCEPTED T HE SAME OR MADE FURTHER ENQUIRIES. EVIDENCE CAN NOT BE BRUSHE D ASIDE SIMPLY BECAUSE IT IS FILED LATE THEREFORE WE SET AS IDE THE ORDER OF THE LD. CIT(A) AND DELETE THE ADDITION OF RS. 95 0000/-. 76 AS FAR AS ADDITION ON ACCOUNT OF TRN IS CONCERN ED WE FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL FO R THE ASSESSEE. IN RESPONSE TO THE ENQUIRY MADE DURING A SSESSMENT PROCEEDINGS TRN HAS STATED VIDE LETTER DATED 11.6.2 012 AS UNDER: DATED: 11.06.2012 TO, DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE I CHANDIGARH SIR, SUB: INFORMATION U/S. 133(6) OF THE INCOME TAX ACT IN THE CASE OF PRITAM SINGH PLEASE REFER TO YOUR LETTER DATED 1-6-2012 WHEREIN YOU HAVE STATED THAT PRITAM SINGH HAS CLAIMED TRANSACTION WI TH OUR COMPANY. THE FOLLOWING DESIRED INFORMATION IS GIVEN FOR YOUR PURPOSE: 1. THE TRANSACTION WITH PRITAM SINGH WHEREIN A SUM OF RS. 1,02,97,500/- WAS PAID TO PRITAM SINGH IS CONFIRMED AND A CONFIRMED COPY OF ACCOUNT IS ATTACHED. 2. THAT IN FACT OUR COMPANY HAS RECEIVED A SUM OF R S. 2,05,00,000/- FROM MR. K. D. SHARMA OF ORISSA AS AD VANCE AND OUT OF THIS A SUM OF RS. 1,02,97,500/- WAS PAID TO PRIT AM SINGH AND HIS BUSINESS ASSOCIATES AS TEMPORARY ADVANCE. IN FA CT, THE AMOUNT WAS RECOVERABLE BY PRITAM SINGH AND HIS SON GURJIT SINGH FROM OTHER BUSINESS CONCERNS OF K.D. SHARMA ETC. TH E AMOUNT 29 WAS GIVEN AS TEMPORARY ADVANCE TO GURJIT SINGH ON T HE DIRECTIONS OF K.D. SHARMA WHO HAS DEPOSITED FUNDS WITH THE SAI D COMPANY TILL THE ACCOUNTS OF GURJIT SINGH ARE SETTLED AND R EPAID BY K.D. SHARMA FROM THE RESPECTIVE CONCERNS WHERE THE AMOUN T WAS PAYABLE TO GURJIT SINGH. THAT IN THE MEAN TIME, A D ISPUTE HAS ARISEN AMONGST K.D. SHARMA HIS BUSINESS CONCERNS AN D GURJIT SINGH AND HIS FAMILY MEMBERS AND TRN LAND DEVELOPER S P LTD. AN FIR WAS LODGED BY K.D. SHARMA AGAINST GURJEET SI NGH AND HIS FAMILY MEMBERS, WHERE KD SHARMA HAD CLAIMED THAT TH E AMOUNT DEPOSITED WITH TRN WAS AMOUNT PAID TO FAMILY MEMBER S OF GURJIT SINGH. THE MATTER IS PENDING IN THE COURT OF CIVIL JUDGE SENIOR DIVISION CHANDIGARH. IT IS FURTHER RELEVANT TO MENTION THAT NO BUSINESS WAS TRANSACTED IN TRN LAND DEVELOPERS PVT LTD. EXCEPT FOR RECEIPT OF FUNDS FROM K.D. SHARMA AND TRANSFER OF FUNDS IN FAVOUR OF GURJ IT SINGH AND HIS FAMILY MEMBERS. 3. THE COMPANY IS HAVING PAN AACCT5001D. NO INCOME TAX RETURN WAS FILED AS A DISPUTE HAS ARISEN AMONGST TH E SHAREHOLDERS AND DIRECTORS OF THE COMPANY AND SUIT IS PENDING IN COURTS. A COPY OF BALANCE SHEET IS ATTACHED FOR YOUR KIND PERUSAL. THANKING YOU, YOURS TRULY, FORM TRN LAND DDEVELOPERS PRIVATE LIMITED SD/- DIRECTOR ABOVE CLEARLY SHOW THAT TRN HAD CONFIRMED THE FACT OF GIVING ADVANCE TO PRITAM SINGH I.E. THE ASSESSEE. SOURCE IN THE HANDS OF THE TRN WAS BY WAY OF DEPOSITS RECEIVED FR OM K.D. SHARMA WHO HAS LODGED AN FIR AGAINST THE ASSESSEE G ROUP ALLEGING THAT THE INVESTMENT TO THE EXTENT OF RS. 1 3,85 CRORES WERE MADE WITH ASSESSEE GROUP. IN FACT K.D. SHARMA HAD SURRENDERED A SUM OF RS. 12 CRORE AND THEREFORE SOU RCES IN THE HAND OF THE TRN STAND EXPLAINED. ONCE THE SOURCE OF INVESTMENT AND PAN WAS AVAILABLE AND IF THE ASSESSI NG OFFICER STILL HAD DOUBT THEN HE SHOULD HAVE ASKED THE ASSES SEE OR THAT PARTY TO FURNISH FURTHER PAPERS. THE DETAILED EVID ENCE CANNOT BE BRUSHED ASIDE PARTICULARLY BECAUSE OF THE FACT T HAT THE DEPOSITOR HAD ALREADY PAID TAXES AND SOURCES STAND EXPLAINED IN THE HANDS OF THE ASSESSEE. THEREFORE WE SET ASI DE THE ORDER OF THE LD. CIT(A) AND DELETE THE ADDITION OF RS. 10 297500/-. 30 77 GROUND NO. 5 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICE NOTICED THAT SPECIAL AUDITOR HAS OBSERVED THAT FROM PERUSA L OF BOOKS OF ACCOUNTS IT WAS FOUND THAT THERE WAS SOME WITHDRAWA L FROM BANK WHICH WAS SHOWN AS CASH WITHDRAWAL. DETAILS A RE AS UNDER: CENTURION BANK OF PUNJAB 25945 PRITAM SINGH DATE PARTICULAR AMOUNT 27.07.2005 SARABJIT SINGH 4,00,000 TOTAL 4,00,000 SPECIAL AUDITOR HAS FURTHER OBSERVED THAT THIS BANK TRANSACTION WAS CHEQUE PAYMENT BUT WRONGLY SHOWN AS CASH IN HAN D. SINCE THE ASSESSEE FAILED TO FILE ANY EXPLANATION D URING ASSESSMENT PROCEEDINGS THIS AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE. 78 ON APPEAL IT WAS CONTENDED THAT THIS AMOUNT WAS WITHDRAWN BY SARABJIT SINGH VIDE BEARER CHEQUE NO. 252583 ON BEHALF OF THE ASSESSEE AND AFTER WITHDRAWAL CASH WA S HANDED OVER THE ASSESSEE. CERTIFICATE FROM BANK WAS ALSO FILED. WHEN THE MATTER WAS SENT FOR REMAND VERIFICATION THE ASS ESSING OFFICER SIMPLY STATED THAT THESE DETAILS WERE NOT F ILED DURING ASSESSMENT PROCEEDINGS. THE ASSESSEE IN HIS COMMENT S REITERATED THE SUBMISSIONS MADE EARLIER AND POINTED OUT THAT OBJECTION OF THE ASSESSING OFFICER IS NOT JUSTIFIED ONCE ADDITIONAL EVIDENCE HAS BEEN ADMITTED BY THE LD. CI T(A) AND SENT TO HIM FOR VERIFICATION. 79 THE LD. CIT(A) DID NOT FIND FORCE IN THE SUBMISS IONS BECAUSE SARABJIT SINGH WAS A DOMESTIC HELP IN THE R ESIDENCE OF 31 THE ASSESSEE AND THEREFORE THE CONTENTIONS COULD NO T BE ACCEPTED WITHOUT FURTHER EVIDENCE. 80 BEFORE US THE LD. COUNSEL FOR THE ASSESSEE REITE RATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND EMPHASIZ ED THAT IF ANY FURTHER EVIDENCE WAS REQUIRED THE ASSESSING OFF ICER SHOULD HAVE DEMANDED THE SAME. HE ALSO REFERRED TO THE BAN K CERTIFICATE WHEREIN IT IS CLEARLY CLARIFIED THAT CA SH WAS WITHDRAWN VIDE CHEQUE NO. 252583 (COPY PLACED AT PA GE 46 OF PAPER BOOK). 81 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE RELIED ON THE ORDER OF THE LD. CIT(A). 82 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD, WE FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE. ONCE ADDITIONAL EVIDENCE WAS ACC EPTED AND DURING VERIFICATION IN THE REMAND PROCEEDINGS CERTA IN FURTHER DOCUMENTS WERE FILED. THE ASSESSING OFFICER IN HIS COMMENTS HAS STATED AS UNDER: ASSESSEE HAS CONTENDED THAT AN ADDITION OF RS. 4, 00,000/- WAS MADE BY AO CHEQUES PAYMENTS BUT ARE WRONGLY SHOWN IN BOOKS O F ACCOUNT AS CASH IN HAND IN BANK ACCOUNT NO. 25945 WITH CENTURION B ANK OF PUNJAB. IT WAS FURTHER CONTENDED BY ASSESSEE THAT MR. SARABJIT SINGH HAS WITHDRAWN RS. 400000/- VIDE BEARER CH NO. 252583 DR AWN ON CENTURION BANK OF PUNJAB A/C NO. 254945 ON BEHALF OF ASSESSEE AND AFTER WITHDRAWAL HANDED OVER THE CASE TO ASSESSEE. A CERT IFICATE FROM BANK IS ALSO FILED TO CLARIFY THAT AMOUNT WITHDRAWN WAS BEA RER CHEQUE. TO VERIFY THE CONTENTION OF ASSESSEE NOTICE U/S 133 (6) WAS ISSUED TO SARABJIT SINGH WHO HAS FILED A REPLY AND COPY OF TH E SAME IS FILED. AS THESE DETAILS WERE NOT FILED DURING THE COURSE OF A SSESSMENT PROCEEDINGS AS SUCH THE SAME SHOULD NOT BE ACCEPTED AT THIS STA GE. ABOVE CLEARLY SHOW THAT ALL THE EVIDENCES WERE FILE D INCLUDING A CERTIFICATE FROM BANK (COPY PLACED AT PAGE 46 OF TH E PAPER BOOK). CERTIFICATE FROM THE BANK SHOW THAT THROUGH CHEQUE NO. 252583 CASH WAS WITHDRAWN. THIS EVIDENCE CANNOT BE BRUSHED 32 ASIDE BY SIMPLY SAYING THAT CASH WAS WITHDRAWN THRO UGH SARABJIT SINGH WHO IS ONLY A DOMESTIC HELP. IF THE REVENUE HAD ANY DOUBT THE ASSESSING OFFICER SHOULD HAVE MADE FU RTHER ENQUIRY DURING ASSESSMENT PROCEEDINGS THEREFORE WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DELETE THE ADDITION OF RS. 4 LAKHS. 83 GROUND NO. 7 AFTER CONSIDERING THE RIVAL SUBMI SSIONS AND THE MATERIAL ON RECORD, WE FIND THAT DURING AS SESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THER E WERE CERTAIN CREDITS IN THE BOOKS OF ACCOUNTS OF THE ASS ESSEE WHICH ARE SHOWN AS UNDER: NAME OF THE CONCERN GROSS TURNOVER NET PROFIT INDIRECT INCOME CREDITED TO P&L ACCOUNT NET PROFIT FROM BUSINESS MATCHLESS ASSOCIATES 42,21,515/- 36,81,683/- 21,309/- (INTEREST ON FDR) 36,60,374/- G.M. CONSTRUCTION CO. 68,48,595/- 66,35,947/- - 66,35,947/- PRITAM SINGH 9,88,421/- 8,35,107 8,35,107 - TOTAL 1,02,96,321/- (THE ABOVE GROSS TURNOVER INCLUDES FIGURES OF WORK DONE FROM RAJAT MINIERS PVT LTD AT RS. 4221515/- AND RS. 3369565/- FROM K.D. SHARMA WHICH WERE NOT CONSIDERED IN PARA ABOVE). HERE AGAIN THE ISSUES REMAIN SAME THAT THE RECEIPTS WERE ON ACCOUNT OF CONSTRUCTION TURNOVER. FROM ABOVE TABLE IT BECOMES CLEAR THAT THERE CANNOT BE A NET PROFIT OF RS. 3681 683/- AGAINST TURNOVER OF RS. 4221515/- I.E. HIGH PROFIT OF 85%. IN FACT THIS ISSUE HAS BEEN ADJUDICATED IN ASSESSMENT YEAR 2003 -04 WHICH WE HAVE ADJUDICATED IN FAVOUR OF THE ASSESSEE VIDE PARA NOS.13 TO 15. 33 84 IN THE PRESENT CASE ALSO THE FACTS AND CONTENTIO NS ARE IDENTICAL TO THE FACTS AND CONTENTIONS IN ASSESSMEN T YEAR 2003-04 IN ITA NO. 1177/CHD/2012. FOLLOWING THAT O RDER WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE. IN T HIS CASE THE GROSS RECEIPTS ARE RS. 10296321/- ON WHICH ASSESSIN G OFFICER IS DIRECTED TO CHARGE PROFIT @ 8% AND DELETE THE AD DITION AMOUNTING TO RS. 9335846/-. 85 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD, WE WOULD LIKE TO POINT OUT THAT AFTER VE RIFICATION OF SUPPLEMENTARY CASH BOOK ASSESSING OFFICER SHOULD HA VE GIVEN EFFECT TO CONSEQUENTIAL FACTS. HOWEVER, IN ANY CA SE SINCE WE HAVE ALREADY ACCEPTED THE THEORY AND THIS GROUND HA S BECOME INFRUCTUOUS AND WE DECLINE TO ADJUDICATE THIS GROUN D IN DETAIL. 86 IN THE RESULT, ITA NO. 1175/CHD/2012 IS PARTLY A LLOWED. 87 ITA NO. 1176/CHD/2012 A.Y 2009-10 LATE SHRI PR ITAM SINGH 88 IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1 THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACT S IN FRAMING THE ASSESSMENT WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 2 THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACTS TO APPOINT SPECIAL AUDITOR IN AN AUTOMATIC MANNER WITHOUT CONS IDERING THE FACTS OF THE CASE AND CONSEQUENTLY THE APPOINTMENT OF THE AUDITOR IS BAD IN LAW. 3 THAT THE APPOINTMENT OF SPECIAL AUDITOR IS BAD IN LAW AND IS NOT IN ACCORDANCE WITH THE SPIRIT OF LAW UNDER THE PROVISIONS OF SECTION 142(2A) OF THE ACT BUT ONLY TO GAIN TIME FO R COMPLETING THE ASSESSMENT WHICH IS BARRED BY LIMITATION. 4 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING THE ADDITIONS OF RS. 24,54,000/- BEING CASH WITHDRAWAL BY CHEQUE THROUGH DALIP SINGH HOLDING THE SAME IS CHEQUE WITH DRAWAL AND NOT A CASH WITHDRAWAL. 5 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING AN ADDITION OF RS. 5,21,024/- ON ACCOUNT OF UNDISCLOSE D INVESTMENT IN JEWELLERY. 6 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING THE ADDITION OF RS. 2,00,000/- ON ACCOUNT OF AMOUNT CRE DITED IN THE BANK ACCOUNT. 34 89 OUT OF ABOVE GROUNDS , GROUNDS NO. 1 TO 3 & 6 WE RE NOT PRESSED BEFORE US, THEREFORE SAME ARE DISMISSED AS NOT PRESSED. 90 GROUND NO. 4 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT SPECIAL AUDITOR HAD EXAMINED THE BOOKS OF ACC OUNTS AND FOUND THAT THERE WERE SOME WITHDRAWAL FROM BANK WHI CH WAS SHOWN AS CASH WITHDRAWAL AS PER FOLLOWING DETAIL: CENTURION BANK OF PUNJAB 18735 PRITAM SINGH DATE PARTICULAR AMOUNT 05.05.2008 DALIP SINGH 8,54,000 08.05.2008 DALIP SINGH 7,00,000 21.05.2008 DALIP SINGH 9,00,000 TOTAL 24,54,000 SPECIAL AUDITOR HAD FURTHER OBSERVED THAT THESE PAY MENTS ARE CHEQUE PAYMENTS. IN RESPONSE TO THE QUERY RAISED B Y THE ASSESSING OFFICER THE ASSESSEE FAILED TO FILE ANY PLAUSIBLE EXPLANATION. THEREFORE THE ASSESSING OFFICER ADDED A SUM OF RS. 2454000/- TO THE INCOME OF THE ASSESSEE. 91 BEFORE THE LD. CIT(A) IT WAS SUBMITTED THAT DILI P SINGH WAS ONE OF THE EMPLOYEE OF THE ASSESSEE AND HAD WIT HDRAWN VARIOUS AMOUNTS ON VARIOUS DATES ON BEHALF OF THE A SSESSEE AND IN THIS REGARD A CERTIFICATE FROM HDFC BANK (SI NCE CENTURION BANK HAS MERGED WITH HDFC) WAS FILED. T HE ASSESSING OFFICER REJECTED THESE EVIDENCES IN THE R EMAND PROCEEDINGS BY OBSERVING THAT THESE DETAILS WERE NO T FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE A SSESSEE IN HIS COMMENTS SIMPLY REITERATED THE SUBMISSIONS AND 35 EMPHASIZED THAT A CERTIFICATE FROM DALIP SINGH WAS FILED IN RESPONSE TO THE PROCEEDINGS U/S 133(6). 92 THE LD. CIT(A) DID NOT FIND FORCE IN THE SUBMISS IONS BECAUSE CONFIRMATION LETTER WAS NOT DATED AND FURTH ER SAME WAS NOT SUPPLEMENTED BY ANY EVIDENCE AND THEREFORE CONFIRMED THE ADDITION. 93 BEFORE US, THE SUBMISSIONS MADE BEFORE THE ASSES SING OFFICER AND CIT(A) WERE REITERATED. IT WAS POINTED OUT THAT BANK CERTIFICATE SHOULD HAVE BEEN TRUSTED. 94 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 95 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CAREF ULLY AND FIND THAT COPY OF THE CERTIFICATE FROM HDFC BANK IS AVAILABLE AT PAGE 48 OF THE PAPER BOOK WHICH CLEARLY SHOW THAT F OLLOWING AMOUNTS WERE WITHDRAWN. THE CERTIFICATE READS AS U NDER: DATED: 02.05.2012 TO WHOMSOEVER IT MAY CONCERN THIS IS TO CERTIFY THAT WE ARE HOLDING IN THE NAME OF MR. PRITAM SINGH ACCOUNT NO. 110001000187350 ( 13071570002545) WITH OUR BRAN CH FOLLOWING CHEQUES WERE PAID FROM ACCOUNT AS PER DETAILS: CHEQUE NO. DATE AMOUNT MODE OF PAYMENT 806882 05/05/08 8,54,000.00 CASH WITHDRAWAL SELF/BE ARER 806884 08/05/08 7,00,000.00 CASH WITHDRAWAL SELF/BE ARER 806881 20/05/2008 9,00,000.00 CASH WITHDRAWAL SELF/ BEARER 806887 04/09/08 1,00,000.00 CASH WITHDRAWAL SELF/BE ARER THIS LETTER IS ISSUED ON THE REQUEST OF ACCOUNT HOL DER. FOR HDFC BANK LTD. YOURS FAITHFULLY SD/- (AUTHORISED SIGNATORY) 36 ABOVE CLEARLY SHOW THAT VARIOUS AMOUNTS HAVE BEEN W ITHDRAWN BY CASH. THE AMOUNT HAS BEEN WITHDRAWN FROM SAME A CCOUNT WHICH WAS DOUBTED BY THE SPECIAL AUDITOR. IN OUR OP INION, IT DOES NOT MAKE DIFFERENCE THAT WHO HAS WITHDRAWN THE AMOUNT. ONCE THE BANK HAS CERTIFIED THAT CASH HAS BEEN WITH DRAWN THEN SAME CANNOT BE ADDED TO THE INCOME BECAUSE IT DOES NOT MATTER WHO HAS GONE TO THE BANK TO WITHDRAW THE CAS H. THEREFORE WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DELETE THIS ADDITION. 96 GROUND NO. 5 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICE NOTICED THAT JEWELLERY VALUED RS. 1423406/- WAS FOUND FROM THE RESIDENCE OF THE ASSESSEE AND SMT. AMRIT KAUR. DET AIL OF JEWELLERY IS AS UNDER: SL.NO. DATE OF SEIZED NAME OF THE ASSESSEE AND PREMISES GROSS WEIGHT IN GMS. AMOUNT(RS.) 1. 27.06.2008 SHRI PRITAM SINGH & SMT. AMRIT KAUR, LOCKER NO. 387, PUNJAB & SIND BANK, PHASE 5, MOHALI 1040.790 RS, 12,52,726/- 2. DO SHRI PRITAM SINGH & AMRIT KAUR, LOCKER NO. 64, CANARA BANK, PHASE 7, MOHALI 142.250 RS. 1,70,680/- TOTAL 1183.04 RS. 14,23,406/- IN RESPONSE TO A QUERY IT WAS MAINLY STATED THAT JE WELLERY WAS NEGLIGIBLE AND WAS RECEIVED BY THE ASSESSEE AT THE TIME OF MARRIAGE AND BIRTH OF HIS CHILDREN FROM HIS PARENTS AND FROM HIS 37 IN-LAWS. FURTHER RELIANCE WAS PLACED ON THE INSTRU CTIONS ISSUED BY CBDT VIDE INSTRUCTION NO. F.286/63/93-IT(INV)-11 DATED 11.5.1994. THE ASSESSING OFFICER ACCEPTED JEWELLER Y OF 750 GMS IN VIEW OF THE INSTRUCTIONS OF THE CBDT AND ADD ED THE BALANCE JEWELLERY OF 433 GMS AS UNEXPLAINED INCOME. 97 ON APPEAL, IT WAS MAINLY SUBMITTED THAT FAMILY O F THE ASSESSEE CONSIST OF (1) PRITAM SINGH (ASSESSEE), (2 ) MRS. AMRIT KAUR (WIFE), (3) GURJIT SINGH (SON), MRS. RANJIT KA UR (DAUGHTER- IN-LAW) AND (5) RAVNIT KAUR (GRAND DAUGHTER). IT WA S SUBMITTED THAT JEWELLERY RELATE TO THESE FIVE PERSONS AND SUR INDERPAL SINGH OBEROI AND SMT. MANINDER KAUR WIFE OF S.P. SI NGH OBEROI. IT WAS POINTED OUT THAT SURINDERPAL SINGH W AS RESIDING IN DUBAI AND 731.50 GMS OF JEWELLERY DIRECTLY RELAT E TO HIM FOR WHICH RELEVANT VOUCHERS FROM DUBAI WERE ALSO FOUND DURING SEARCH. SURINDERPAL SINGH HAS PURCHASED THIS JEWELL ERY ON DIFFERENT DATES AND COPY OF THE SAME IS AVAILABLE I N THE PAPER BOOK. 98 THE LD. CIT(A) REJECTED THESE CONTENTIONS MAINLY VIDE PARA 13.3 WHICH ARE AS UNDER: BE THAT AS IT MAY, IN THE PRESENT CASE, THE REMAND REPORT OF THE AO ON THE ASSESSEE SUBMISSION INDICATES THAT TOTAL JEWEL LERY FOUND WAS 2779.98 GMS AND APART FROM THAT, JEWELLERY WEIGHING 731.50 GMS RELATED TO SHRI SP SINGH AS PER PURCHASE VOUCHERS SEIZED. T HUS IT IS APPARENT THAT THE LD. AO HAD ALREADY GIVEN DUE BENEFIT AS PE R THE BOARDS INSTRUCTIONS AND HAS ACCEPTED THE SOURCE OF INVESTM ENT TOO. HENCE, I DO NOT THINK THERE IS ANY NEED TO INTERFERE WITH THE C ONCLUSIONS DRAWN BY THE LD. AO. 99 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REIT ERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND FURTHER SUBMITTED THAT JEWELLERY IN CASE OF SURINDERPAL SINGH AS WELL AS OTHER 38 FAMILY MEMBERS, HAS NOT BEEN ALLOWED AS PER INSTRUC TIONS OF THE BOARD. 100 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE RELIED ON THE ORDER OF THE LD. CIT(A). 101 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD, WE FIND THAT TOTAL JEWELLERY FOUND DURI NG SEARCH WAS AS UNDER: THAT FOLLOWING JEWELERY WAS FOUND DURING THE COURS E OF SEARCH: GURJIT SINGH 1596.94 GM PRITAM SINGH 1183.04 GM 2779.98 GM UNDISPUTEDLY OUT OF THIS SOME JEWELLERY WEIGHING 73 1.500 GMS WAS BELONGING TO SURINDERPAL SINGH AND HIS FAMILY W HO IS SON OF THE ASSESSEE AND RESIDING IN DUBAI. IN FACT THE RE WAS SOME DISPUTE WHETHER CREDIT HAS BEEN GIVEN FOR THAT JEWE LLERY OR NOT HOWEVER, UNDISPUTEDLY FACT REMAINS THAT THE JEWELLE RY WEIGHING 731.50 GMS RELATES TO HIM BECAUSE ALONG WITH THIS J EWELLERY VOUCHERS SHOWING PURCHASE OF THIS JEWELLERY IN DUBA I WERE ALSO FOUND. FURTHER ONCE THIS JEWELLERY BELONGING TO SU RINDERPAL SINGH IS REDUCED AND FURTHER CREDIT IN TERMS OF BOA RD INSTRUCTION IS ALLOWED THEN POSITION BECOMES AS UND ER: TOTAL JEWELLERY FOUND 2779.987 GM LESS JEWELLERY BELONGING TO HIM 731.500 GM NET JEWELLERY 2048.480 GM FURTHER CREDIT REQUIRED TO BE GIVEN FOR MARRIED FEM ALE IS 500 GM EACH, UNMARRIED FEMALE AT 250 GM AND MALE MEMBER S AT 100 GM. THEREFORE CREDIT WOULD BE AS UNDER: 39 MRS. AMRIT KAUR W/O PRITAM SINGH 500 GM MRS. RANJIT KAUR W/O GURJIT SINGH (SON) 500 GM MS. RAVNIT KAUR (GRAND DAUGHTER OF PRITAM SINGH AND DAUGHTER OF GURJIT SINGH 250 GM PRITAM SINGH AND GURJIT SINGH @ 100 GM 200 GM 1450 GM THEREFORE NET JEWELLERY WHICH IS REQUIRED TO BE ADD ED BECAUSE NO EXPLANATION IS AVAILABLE IS 598.48 GMS. THIS JE WELLERY IS REQUIRED TO BE ADDED IN THE HANDS OF PRITAM SINGH A ND GURJIT SINGH. SINCE THIS ISSUE HAS BEEN CONSIDERED JOINTL Y NO DETAILS HAVE BEEN FURNISHED BEFORE US FOR INDIVIDUAL JEWELL ERY AND THEREFORE WE HOLD THAT OUT OF THIS JEWELLERY WEIGHI NG 298.48 GMS SHOULD BE ADDED IN THE HANDS OF THE ASSESSEE AN D BALANCE 300 GMS SHOULD BE ADDED IN THE HANDS OF GURJIT SING H (SINCE THOSE APPEALS ARE ALSO BEING ADJUDICATED THROUGH TH IS ORDER). THIS PROPOSAL WAS ACCEPTED BY THE LD. COUNSEL FOR T HE ASSESSEE. ACCORDINGLY WE SET ASIDE THE ORDER OF TH E LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO MAKE ADDITION O N ACCOUNT OF JEWELLERY WEIGHING 298.48 GMS IN CASE OF THE ASSESS EE. 102 IN THE RESULT, ITA NO. 1176/CHD/2012 IS PARTLY ALLOWED. 103 ITA NO. 1193/CHD/2012 A.Y 2004-05 REVENUE APPEA L 104 IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLO WING GROUNDS: (I) WHETHER THE LD. CIT(A) IS JUSTIFIED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 9,55,223/- ON ACCOUNT OF GIFT R ECEIVED FROM SH. S.P. SINGH WHEN ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE GIFT ? (II) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE CIT(A) WAS JUSTIFIED IN ACCEPTING THE GENUINENESS OF A GIFT FR OM NON RESIDENT INDIAN (NRI) BROTHER OF THE ASSESSEE, IN TOTAL DISREGARD T O THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. P R GANAPATHY (2012 TIOL 76 SC IT) THAT THE ASSESSEE HAS TO SHO WN ADEQUACY OF FUNDS IN THE HANDS OF FOREIGN DONOR FOR AFORESAID G IFT DONATION? (III) WHETHER ON FACTS OF THE CASE ADVERSE AND REBU TTABLE PRESUMPTION SHOULD HAVE BEEN DRAWN ABOUT GENUINENESS OF THE GIF T WHEN THE 40 ASSESSEE OVER A PERIOD OF SEVEN ASSESSMENT YEARS HA S RECEIVED A TOTAL SUM OF RS. 6,67,05,848/- CRORES AS GIFT ? 105 AFTER HEARING BOTH THE PARTIES WE FIND THAT DUR ING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERV ED THAT SPECIAL AUDITOR HAS NOTICED VARIOUS CREDITS IN THE NAME OF SURINDERPAL SINGH OBEROI WHO IS THE SON OF THE ASSE SSEE. CONFIRMATION FROM SURINDERPAL SINGH WAS SUBMITTED B EFORE THE SPECIAL AUDITOR BUT SPECIAL AUDITOR OBSERVED THAT S OURCE IN THE HANDS OF SURINDERPAL SINGH WERE NOT EXPLAINED. CERT AIN DOCUMENTS WERE FILED BEFORE THE ASSESSING OFFICER I NCLUDING A LETTER FROM SURINDERPAL SINGH IN WHICH IT WAS CONFI RMED THAT HE HAS GIVEN A SUM OF RS. 54974186/- BETWEEN THE PERIO D 7.10.2002 TO 1.1.2009. IT WAS ALSO CERTIFIED THAT SURINDERPAL SINGH HAD MADE CERTAIN GIFTS TO THE ASSESSEE. COMP UTATION SHEETS OF INCOME IN RESPECT OF SURIDNERPAL SINGH SH OWING INCOME OF RS. 23376309/- FOR ASSESSMENT YEAR 2010- 11 WAS ALSO FILED. BANK STATEMENT OF RAK BANK WERE ALSO F ILED. IT WAS OBSERVED THAT SOURCE OF INCOME FOR ASSESSMENT YEAR 2010-11 WAS BEYOND THE PERIOD UNDER CONSIDERATION. FURTHER THE ASSESSEE HAD NOT FILED FOREIGN INWARD REMITTANCES C ERTIFICATE. IT WAS ALSO OBSERVED THAT NORMALLY WHEN THE AMOUNT IS RECEIVED FROM OUTSIDE INDIA THE SAME SHOULD BE CREDITED THRO UGH AUTHORIZED DEALER ONLY AND IF THE ASSESSEE HAS FILE D THE BANK ACCOUNT FROM A BANK WHICH IS NOT AUTHORIZED DEALER THEN THE AMOUNT COULD NOT BE GIVEN EXCEPT THROUGH AUTHORIZED DEALER. IN THIS BACKGROUND AND FURTHER DISCUSSION THE AMOUN T RECEIVED DURING THE YEAR WAS NOT ACCEPTED AND ADDITION OF RS . 1405223/- WAS MADE IN THE HANDS OF THE ASSESSEE. 41 106 BEFORE THE LD. CIT(A) CERTAIN DOCUMENTS WERE FI LED WHICH WERE SENT FOR VERIFICATION DURING REMAND PROCEEDING S. IN THE REMAND REPORT ASSESSING OFFICER AGAIN REITERATED TH AT IN THE ABSENCE OF FIRS THESE CREDITS HAVE NOT BEEN ESTABL ISHED BY THE ASSESSEE. THE ASSESSEE ALSO GAVE CERTAIN COMME NTS. THE LD. CIT(A) AFTER EXAMINING THIS ISSUE DECIDED THE S AME IN FAVOUR OF THE ASSESSEE. 107 BEFORE US, THE LD. D.R. FOR THE REVENUE STRONGL Y SUPPORTED THE ORDER OF ASSESSING OFFICER. 108 ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT SHRI SURINDERPAL SINGH SON OF THE AS SESSEE WAS LIVING IN DUBAI AND IS AN NRI. PURSUANT TO A SEARC H ON THE ASSESSEE, EVEN THE CASES OF SURINDERPAL SINGH WERE REOPENED SPECIFICALLY TO VERIFY THE GIFTS MADE BY SURINDERPA L SINGH. IN THIS REGARD HE REFERRED TO AN APPLICATION FOR ADMIS SION OF ADDITIONAL EVIDENCE FILED IN ASSESSMENT YEAR 2005- 06 IN ITA NO. 1174/CHD/2012 WHEREIN COPY OF REASONS RECORDED FOR REOPENING AS WELL AS ASSESSMENT ORDER OF SURINDERPA L SINGH BY DY DIRECTOR (INTERNATIONAL TAXATION) HAS BEEN SUBMI TTED. HE POINTED OUT THAT ASSESSMENT FOR ASSESSMENT YEAR 20 05-06 WAS REOPENED PARTICULARLY TO VERIFY THE GIFTS MADE BY SURINDERPAL SINGH TO THE ASSESSEE. ASSESSMENT FOR ASSESSMENT Y EAR 2006-07 AND 2007-08 WERE NOT REOPENED AND ASSESSMEN T FOR ASSESSMENT YEAR 2009-10 HAS ALSO BEEN COMPLETED A ND COPY OF THE ASSESSMENT ORDER IS FILED AT PAGE 36 TO 39 O F THE PAPER BOOK. EVEN ASSESSMENT ORDER FOR ASSESSMENT YEAR 2 010-11 WAS COMPLETED LATER ON AND HE FIELD A COPY OF THE S AME. SINCE THE REVENUE HAS ALREADY VERIFIED THE FACT OF GIFTS GIVEN BY SURINDERPAL SINGH IN THESE ASSESSMENT YEARS AND THE REFORE 42 ADDITION HAS BEEN CORRECTLY DELETED BY THE LD. CIT( A). WHILE CONCLUDING HE STRONGLY SUPPORTED THE ORDER OF THE L D. CIT(A). 109 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CARE FULLY AND FIND THAT THE LD. CIT(A) HAS DECIDED THIS ISSUE VID E PARA 8.1 WHICH IS AS UNDER: I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE ASSESSEE, THE REMAND REPORT AND THE IMPUGNED ASSESSMENT ORDER. CE RTAIN FACTS ARE FOUND UNDISPUTED VIZ. THAT SHRI SP SINGH IS THE SON OF THE ASSESSEE AND IS AN NRI, BASED IN DUBAI; THAT THE AMOUNTS WERE RE CEIVED FROM SP SINGH AS REVEALED FROM THE BANK ACCOUNTS AND ARE RE FLECTED IN THE TRIAL BALANCE AND BALANCE SHEET OF THE ASSESSEE. IMPORTAN TLY, THE CREDITWORTHINESS AS WELL AS THE IDENTITY OF THE PER SON HAS NOT BEEN DISPUTED EITHER. THE ONLY APPARENT DOUBT IN THE MIN D OF THE LD. AO IS THE GENUINENESS OF THE TRANSACTIONS CLAIMED BY THE ASSE SSEE AND HIS SON AS GIFTS, BESIDES THE NON-FILING OF FIRCS. IN CONNECTI ON WITH THE NATURE OF THE RECEIPT, THE ASSESSEE HAS IN HIS SUBMISSIONS ST ATED THAT IN THE ASSESSMENT PROCEEDINGS FOR AY 2009-10, THE DCIT, IN TERNATIONAL TAXATION, CHANDIGARH HAS ACCEPTED THE GIFT AS GENUI NE. THE LD AO IS SILENT ON THIS MATTER EXCEPT STATING THAT THE CERTI FICATE OBTAINED FROM DUBAI AS WELL AS AVAILABILITY OF SUFFICIENT FUNDS W ITH SURINDER PAL SINGH DOES NOT PROVE THE PURPOSE OF REMITTANCE. BE THAT A S IT MAY, AS REGARDS THE NATURE OF THE REMITTANCE, IT IS CLEAR THAT THE INCOME-TAX AUTHORITIES CANNOT TAKE TWO STANDS FOR THE SAME TRANSACTION. ON CE THE GIFT HAS BEEN HELD TO BE GENUINE, THERE CAN BE NO DISPUTE THAT TH E SAME WILL HAVE TO BE ACCEPTED AS GENUINE IN THE HAND OF THE ASSESSEE. TH E ASSESSEE FURTHER HAS DISCHARGED HIS ONUS CAST UPON HIM BY PRODUCING THE ORDER OF ASSESSMENT OF SHRI. S.P. SINGH DATED 30.12.2011 FOR AY 2009-10 PASSED BY THE DDIT, INTERNATIONAL TAXATION, CHANDIGARH. TH US, I ACCEPT THE CONTENTION OF THE ASSESSEE AND THE GROUND OF APPEAL IS ALLOWED. THUS FROM ABOVE IT BECOMES CLEAR THAT THE REVENUE H AS ALREADY ACCEPTED THE FACT OF GIVING GIFTS BY SHRI S URINDERPAL SINGH. WE HAVE ALREADY ADMITTED THE APPLICATION FO R ADDITIONAL EVIDENCE IN ITA NO. 1174/CHD/2012 IN CASE OF ASSESS EE. RELEVANT PORTION OF REASONS RECORDED FOR REOPENING OF THE ASSESSMENT READS AS UNDER: THE ASSESSEE S.P. SINGH HAS GIVEN GIFTS OF RS. 421 6458/- TO HIS FATHER SHRI PRITAM SINGH AND RS. 1490000/- TO HIS B ROTHER, GURJIT SINGH DURING THE YEAR. THE ASSESSEE HAS NOT FIELD INCOME TAX RETURN FOR ASSESSMENT YEAR 2005-06. ENTIRE AMOUNT HAS BEEN REMITTED BY HIM FROM UAE. THUS THE SOURCE OF GIFT OF RS. 5706458/- (RS. 4216458 + RS. 1490000) MADE BY THE A SSESSEE NEEDS TO BE VERIFIED WITH RESPECT TO THE CAPACITY T O MAKE SUCH HUGE GIFTS AND THIS EXPENDITURE REMAINS UNEXPLAINED . AS A RESULT I HAVE REASON TO THAT THIS INCOME OF RS. 5706458/- HA S ESCAPED TAXATION AND THE CASE NEEDS TO BE OPENED U/S 147. 43 110 AFTER ISSUING NOTICE U/S 148 ON THE BASIS OF AB OVE NOTED REASONS THE ASSESSMENT WAS ULTIMATELY COMPLETED U/S 143(3) R.W.S. 148 IN CASE OF SHRI SURINDERPAL SINGH VIDE O RDER DATED 28.2.2013 FOR ASSESSMENT YEAR 2005-06 IN WHICH IT IS CLEARLY MENTIONED THAT THE GIFTS GIVEN BY SURINDERPAL SINGH TO PRITAM SINGH AND GURJIT SINGH WERE VERIFIED. IT IS ALSO A CCEPTED IN THE ASSESSMENT ORDER THAT SURINDERPAL SINGH IS AN NRI A ND RUNNING MANY BUSINESS ORGANIZATIONS AND ASSESSABLE INCOME I N INDIA WAS NIL. THEREFORE IT BECOMES CLEAR THAT SOURCE OF GIFTS STAND EXPLAINED. THEREFORE REASONING GIVEN BY THE LD. CI T(A) FOR DELETING THIS ADDITION, IS TOTALLY CORRECT AND ACCO RDINGLY WE CONFIRM THE ORDER OF THE LD. CIT(A). 111 IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 1193/CHD/2012 IS DISMISSED. 112 ITA NO. 1194/CHD/2012 A.Y 2005-06 REVENUE A PPEAL 113 IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: (I) WHETHER THE LD. CIT(A) IS JUSTIFIED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 42,16,458/- ON ACCOUNT OF GIFT RECEIVED FROM SH. S.P. SINGH WHEN ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE GIFT ? (II) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE CIT(A) WAS JUSTIFIED IN ACCEPTING THE GENUINENESS OF A GIFT F ROM NON RESIDENT INDIAN (NRI) BROTHER OF THE ASSESSEE, IN TOTAL DISG REGARD TO THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CI T VS. P R GANAPATHY (2012-TIOL-76-SC-IT) THAT THE ASSESSEE HA S TO SHOW ADEQUACY OF FUNDS IN THE HANDS OF FOREIGN DONOR FOR AFORESAID GIFT DONATION ? (III) WHETHER ON FACTS OF THE CASE ADVERSE AND REBU TTABLE PRESUMPTION SHOULD HAVE BEEN DRAWN ABOUT GENUINENESS OF THE GIF T WHEN THE ASSESSEE OVER A PERIOD OF SEVEN ASSESSMENT YEARS HA S RECEIVED A TOTAL SUM OF RS. 6,67,05,848/- CRORES AS GIFT ? (IV) WHETHER THE LD. CIT(A) ON FACTS AND CIRCUMSTAN CES OF THIS IS JUSTIFIED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS. 5,68,913/- ON ACCOUNT OF MONEY RECEIVED FROM SMT. RANJIT KAUR WHE N ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE GIFT ? (V) WHETHER THE LD. CIT(A) IS JUSTIFIED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 7,76,410/- ON ACCOUNT OF MONEY RECEIVED FROM SMT. AMRIT KAUR WHEN ASSESSEE FAILED TO PROVE THE GENUIN ENESS OF THE GIFT ? 44 114 GROUNDS NO. 1 TO 3 THIS ISSUE IS IDENTICAL TO THE ISSUES RAISED IN ITA NO. 1193/CHD/2012 FOR ASSESSMENT YEAR 2004- 05. SINCE THE FACTS AND CONTENTIONS ARE SAME, THER EFORE FOLLOWING THAT ORDER WE CONFIRM THE DELETION OF GIF TS RECEIVED BY THE ASSESSEE FROM SURINDERPAL SINGH. 115 GROUND NO. 5 - AFTER HEARING BOTH THE PARTIES W E FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT A FEW CREDITS WERE FOUND IN THE BOOKS OF THE A SSESSEE FROM SMT. RANJIT KAUR (DAUGHTER-IN-LAW): SR.NO. DATE PARTICULARS AMOUNT 1. 02.07.2004 PAYMENT MADE BY RANJIT KAUR TO AK SAHNEY FOR CONST. 23,297 2. 10.01.2005 BY CANARA BANK 495 BEING MATURITY OF FDR MADE IN RANJIT KAUR 5,45,616 5,68,913 INITIALLY SPECIAL AUDITOR ASKED FOR VARIOUS DETAILS OF THE GIFTS WHICH WERE NOT GIVEN TO THE AUDITOR. ASSESSING OFFI CER FURTHER OBSERVED THAT PERUSAL OF THE ASSESSMENT RECORDED BY SMT. RANJIT KAUR SHOWED THAT SHE WAS ASKED TO FURNISH TH E DETAILS OF THE GIFTS MADE DURING THE YEAR BUT SHE HAD REPLIED THAT NO GIFTS WERE MADE BY HER. IN THIS BACKGROUND A SUM OF RS. 560913/- WAS ADDED TO THE INCOME OF THE ASSESSEE. 116 ON APPEAL VARIOUS DOCUMENTS WERE FILED AND THE SAME WAS SENT FOR VERIFICATION IN THE REMAND PROCEEDINGS . THE DETAILS WERE FOUND TO BE CORRECT DURING REMAND PROC EEDINGS BY THE ASSESSING OFFICER BUT HE INSISTED THAT IN VIEW OF HER REPLY THE GIFTS COULD NOT BE ACCEPTED. 117 THE LD. CIT(A) DID NOT ACCEPT THIS POSITION AND ALLOWED RELIEF. 118 BEFORE US. THE LD. D.R. FOR THE REVENUE SUPPORT ED THE ORDER OF THE ASSESSING OFFICER. 45 119 ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASS ESSEE STRONGLY SUPPORTED THE IMPUGNED ORDER. 120 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIN D THAT THE LD. CIT(A) HAS NOTED THE COMMENTS OF ASSESSING OFFI CER AND COUNTER COMMENTS OF THE ASSESSEE WHICH ARE AS UNDER : ASSESSEE HAS CONTENDED THAT A SUM OF RS. 5,68,913/- FROM SMT. RANJIT KAUR (DAUGHTER IN LAW OF ASSESSEE) HAVING PAN- ASPP K9215N, OUT OF WHICH RS. 23297/- PAID BY RANJIT KAUR TO MR. A.K. S AWHNEY VIDE CH NO. 981356 DRAWN ON ORIENTAL BANK OF COMMERCE DATED 02. 07.2004 ON BEHALF OF LATE SH. PRITAM SINGH & BALANCE AMOUNTING RS. 54 5616/- WAS PAID BY WAY OF DIRECT TRANSFER OF FDR MATURITY IN A/C NO. 4 95 WITH CANARA BANK MAINTAINED BY LATE SH. PRITAM SINGH ON 10.01.2005. IT WAS FURTHER CONTENDED THAT SMT. RANJIT KAUR WIFE OF GURJIT SING H IS ALSO ASSESSED WITH YOUR OFFICE AND SUBJECT TO SEARCH. ON VERIFICATION, THE CONTENTION OF THE ASSESSEE I S FOUND TO BE CORRECT. HOWEVER, A PERUSAL OF ASSESSMENT RECORD OF SMT. RAN JIT KAUR SHOWED THAT VIDE QUESTIONNAIRE DATED 02.08.2011, SMT. RANJ IT KAUR WAS ASKED TO FURNISH THE DETAILS OF GIFTS MADE / RECEIVED DURING THE YEAR. SMR. RANJIT KAUR FILED REPLY TO THE ABOVE QUESTIONNAIRE VIDE HE R REPLY DATED 27.11.2010 BUT NO SUCH CLAIM OF HAVING MADE THE GIF T TO THE ASSESSEE WAS FURNISHED BY SMT. RANJIT KAUR. ASSESSEE IN HIS COUNTER COMMENTS HAS STATED THE L EARNED DCIT HAS ACCEPTED THE CONTENTION OF ASSESSEE AS SUCH THERE I S NO JUSTIFICATION IN ANY ADDICTION ON THIS ACCOUNT. THEREAFTER SHE DECIDED THE ISSUE AS UNDER: THE LD. AO IN THE REMAND REPORT, AFTER VERIFICATION HAD SUBMITTED THAT THE CONTENTION OF THE ASSESSEE WAS FOUND TO BE CORR ECT. HIS ONLY OBJECTION WAS THAT THE DONOR DURING THE COURSE OF H ER OWN ASSESSMENT PROCEEDINGS HAD MADE NO SUCH CLAIM OF GIFTING ANY A MOUNT TO HER FATHER- IN-LAW. BE THAT AS IT MAY THESE TRANSACTIONS HAD BE EN VERIFIED BY THE LD. AO. HENCE I DO NOT THINK IT MATERIAL THAT THE ADDIT ION SHOULD BE SUSTAINED BECAUSE THE DONOR HAD MADE NO SUCH CLAIM IN HER ASS ESSMENT PROCEEDINGS. THE RELATIONSHIP BETWEEN IN THE ASSESS EE AND THE DONOR IS ALSO NOT IN DISPUTE. HENCE THE ONLY ISSUE LEFT IS T HE GENUINENESS / PURPOSE OF TRANSACTION AND IN VIEW OF THE FACT THAT IT IS WITHIN THE CLOSE FAMILY, THE ADDITION IS THEREFORE DELETED. ABOVE CLEARLY SHOW THAT ONCE THE GIFTS HAVE BEEN CO RRECTLY REFLECTED IN THE ACCOUNTS AND THE DETAILS OF THE CH EQUES ETC. WERE FOUND TO BE CORRECT BY THE ASSESSING OFFICER T HEN THERE WAS NO SCOPE FOR DENYING THE SAME AND THE LD. CIT(A ) HAS CORRECTLY ACCEPTED THE PLEADINGS OF THE ASSESSEE. THEREFORE WE CONFIRM THE ORDER OF THE LD. CIT(A). 46 121 GROUND NO. 5 IN CASE OF GIFTS FROM SMT. AMRIT KAUR, ADDITION WAS MADE ON THE SAME FOOTING AND SIMILAR C ONTENTIONS WERE RAISED BEFORE THE LD. CIT(A) AS IN CASE OF SMT . RANJIT KAUR. THIS ADDITION WAS ALSO DELETED BY THE LD. CI T(A) ON SIMILAR REASONING AS IN CASE OF SMT. RANJIT KAUR. E VEN BEFORE US BOTH THE PARTIES MADE SIMILAR CONTENTIONS AS IN CASE OF SMT. RANJIT KAUR. 122 AFTER CONSIDERING THE ABOVE SUBMISSIONS THE LD. CIT(A) HAS NOTED THE COMMENTS OF THE ASSESSING OFFICER AND THE COUNTER COMMENTS OF THE ASSESSEE AS UNDER: ASSESSEE HAS CONTESTED THAT ASSESSEE HAS RECEIVED A SUM OF RS. 776410/- FROM SMT AMRIT KAUR (WIFE OF ASSESSEE) HAV ING PAN-AAMPO- 7291-D, OUT OF WHICH RS. 17000/- WAS GIVEN BY SMT A MRIT KAUR ON 15.05.2004 VIDE CH NO. 191242 DRAWN ON CANARA BANK TO CHARANJIT SINGH ON BEHALF OF LATE SH. PRITAM SINGH, A SUM OF RS. 10 0000/- WAS GIVEN BY AMRIT KAUR ON 26.08.2004 VIDE CH NO. 191243 DRAWN O N CANARA BANK AND BALANCE AMOUNTING RS. 6,59,410/- WAS GIVEN BY AMRIT KAUR BY WAY OF DIRECT TRANSFER OF FDR MATURITY IN A/C NO. 495 WITH CANARA BANK MAINTAINED BY LATE SH. PRITAM SINGH ON 10.02.2005. ON VERIFICATION, THE CONTENTION OF THE ASSESSEE IS FOUND TO BE CORRECT. HOWEVER, A PERUSAL OF ASSESSMENT RECORD OF SMT. AMR IT KAUR SHOWED THAT VIDE QUESTIONNAIRE DATED 02.08.2011, SMT. AMRIT KAU R WAS ASKED TO FURNISH THE DETAILS OF GIFTS MADE / RECEIVED DURING THE YEAR. SMT. AMRIT KAUR FILED REPLY TO THE ABOVE QUESTIONNAIRE VIDE HE R REPLY DATED 27.11.2010 BUT NO SUCH CLAIM OF HAVING MADE THE GIF T TO THE ASSESSEE WAS FURNISHED BY SMT. AMRIT KAUR. ASSESSEE IN HIS COUNTER COMMENTS HAS STATED. THE LEARNED DCIT HAS ACCEPTED THE CONTENTION OF ASSESSEE AS SUCH THERE I S NO JUSTIFICATION IN ANY ADDITION ON THIS ACCOUNT. THEREAFTER SHE DECIDED THE ISSUE AS UNDER: THE LD. AO IN THE REMAND REPORT, AFTER VERIFICATIO N HAD SUBMITTED THAT THE CONTENTION OF THE ASSESSE WAS FOUND TO BE CORRE CT. HIS ONLY OBJECTION WAS THAT THE DONOR DURING THE COURSE OF HER OWN ASS ESSMENT PROCEEDINGS HAD MADE NO SUCH CLAIM OF GIFTING ANY AMOUNT TO HER HUSBAND. BE THAT AS IT MAY THESE TRANSACTIONS HAD BEEN VERIFIED BY THE LD. A.O. HENCE I DO NOT THINK IT MATERIAL THAT THE ADDITION SHOULD BE S USTAINED BECAUSE THE DONOR HAD MADE NO SUCH CLAIM IN HER ASSESSMENT PROC EEDINGS. THE RELATIONSHIP BETWEEN IN THE ASSESSEE AND THE DONOR IS UNDISPUTED. THE CREDIT WORTHINESS AND THE IDENTITY OF THE DONOR IS ALSO NOT IN DISPUTE. HENCE THE ONLY ISSUE LEFT IS THE GENUINENESS / PURP OSE OF TRANSACTION AND IN VIEW OF THE FACT THAT IT IS WITHIN THE CLOSE FAM ILY, THE ADDITION IS THEREFORE DELETED. ABOVE CLEARLY SHOW THAT ONCE THE GIFTS HAVE BEEN CO RRECTLY REFLECTED IN THE ACCOUNTS AND THE DETAILS OF THE CH EQUES ETC. 47 WERE FOUND TO BE CORRECT BY THE ASSESSING OFFICER T HEN THERE WAS NO SCOPE FOR DENYING THE SAME AND THE LD. CIT(A ) HAS CORRECTLY ACCEPTED THE PLEADINGS OF THE ASSESSEE. THEREFORE WE CONFIRM THE ORDER OF THE LD. CIT(A). 123 IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. 124 ITA NO. 1195/CHD/2012 AY 2006-07 REVENUE 125 IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLO WING GROUNDS: 1 WHETHER THE LD. CIT(A) IS JUSTIFIED IN LAW AND O N FACTS IN DELETING THE ADDITION OF RS. 155,50,000/- ON ACCOUN T OF GIFT RECEIVED FROM SHRI S.P. SINGH WHEN ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE GIFT. 2 WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE LD . CIT(A) WAS JUSTIFIED IN ACCEPTING THE GENUINENESS OF A GI FT FROM NON RESIDENT INDIAN (NRI) BROTHER OF THE ASSESSEE, IN T OTAL DISREGARD TO THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. P.R. GANAPATHY, 2012-TIOL-76-S.C -IT) THAT THE ASSESSEE HAS TO SHOW ADEQUACY OF FUNDS IN THE HANDS OF FOREI GN DONOR FOR AFORESAID GIFT DONATION? 3 WHETHER ON FACTS OF THE CASE ADVERSE AND REBUTTAB LE PRESUMPTION SHOULD HAVE BEEN DRAWN ABOUT GENUINENES S OF THE GIFT WHEN THE ASSESSEE OVER A PERIOD OF SEVEN ASSES SMENT YEAR S HAS RECEIVED A TOTAL SUM OF RS. 667,05,848/- CRORES AS GIFT. 126 AFTER HEARING BOTH THE PARTIES WE FIND THAT THE ISSUES RAISED THROUGH THESE GROUNDS ARE IDENTICAL TO THE I SSUES RAISED IN ITA NO. 1193/CHD/2012. SINCE THE FACTS OF THE C ASE AND THE CONTENTIONS OF BOTH THE PARTIES ARE IDENTICAL TO TH E ISSUES RAISED IN ITA NO. 1193/CHD/2012 FOR ASSESSMENT YEAR 2004- 05, FOLLOWING THAT ORDER VIDE PARA 109 TO 111 WE HA VE DECIDED THESE ISSUES AGAINST THE REVENUE. 127 GROUND NO. 4 AFTER HEARING BOTH THE PARTIES W E FIND THAT FROM THE BOOKS OF ACCOUNTS AND STATEMENT OF AFFAIRS IT WAS NOTED THAT THE ASSESSEE HAS RECEIVED FOLLOWING AMOU NTS FROM HIS WIFE, SMT. AMRIT KAUR: S DATE PARTICULARS AMOUNT 48 NO 1 22.8.2005 PUNJAB NATIONAL BANK 145139 TRANSFERRED FROM A/C NO. 4741 PUNJAB NATIONAL BANK 66,481 66,481 THIS AMOUNT WAS SHOWN AS GIFT BUT NO EVIDENCE TO S UBSTANTIATE THE SAME WAS FILED BEFORE THE ASSESSING OFFICER AND THEREFORE THIS AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE . 128 ON APPEAL CERTAIN DOCUMENTS WERE FILED WHICH WA S SENT FOR VERIFICATION DURING ASSESSMENT PROCEEDINGS. TH E COMMENTS OF THE ASSESSING OFFICER AND THE ASSESSEE HAVE BEE N NOTED BY THE LD. CIT(A) AS UNDER: THE LD. AO IN THE REMAND REPORT, AFTER VERIFICATION HAD SUBMITTED THAT THE CONTENTION OF THE ASSESSEE WAS FOUND TO BE CORR ECT. HIS ONLY OBJECTION WAS THAT THE DONOR DURING THE COURSE OF H ER OWN ASSESSMENT PROCEEDINGS HAD MADE NO SUCH CLAIM OF GIFTING ANY A MOUNT TO HER FATHER- IN-LAW. BE THAT AS IT MAY THESE TRANSACTIONS HAD BE EN VERIFIED BY THE LD. AO. HENCE I DO NOT THINK IT MATERIAL THAT THE ADDIT ION SHOULD BE SUSTAINED BECAUSE THE DONOR HAD MADE NO SUCH CLAIM IN HER ASS ESSMENT PROCEEDINGS. THE RELATIONSHIP BETWEEN IN THE ASSESS EE AND THE DONOR IS ALSO NOT IN DISPUTE. HENCE THE ONLY ISSUE LEFT IS T HE GENUINENESS / PURPOSE OF TRANSACTION AND IN VIEW OF THE FACT THAT IT IS WITHIN THE CLOSE FAMILY, THE ADDITION IS THEREFORE DELETED. 129 THE LD. CIT(A) AFTER EXAMINATION OF THE SAME AL LOWED RELIEF AND DELETED THIS ADDITION. 130 BEFORE US. THE LD. D.R. FOR THE REVENUE SUPPORT ED THE ORDER OF ASSESSING OFFICER. 131 ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASS ESSEE SUPPORTED THE IMPUGNED ORDER. 132 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY THE LD. CIT(A) AS UNDER: THE ASSESSING OFFICER IN THE REMAND REPORT AFTER V ERIFICATION HAD SUBMITTED THAT THE CONTENTION OF THE ASSESSEE WAS F OUND TO BE CORRECT. HIS ONLY OBJECTION WAS THAT THE DONOR DURING THE CO URSE OF HER OWN ASSESSMENT PROCEEDINGS HAD MADE NO SUCH CLAIM OF G IFTING ANY AMOUNT 49 TO HER HUSBAND. BE THAT AS IT MAY THESE TRANSACTIO NS HAD BEEN VERIFIED BY THE ASSESSING OFFICER. HENCE I DO NOT THINK IT MATERIAL THAT THE ADDITION SHOULD BE SUSTAINED BECAUSE THE DONOR HAD MADE NO SUCH CLAIM IN HER ASSESSMENT PROCEEDINGS. THE RELATIONSHIP BE TWEEN IN THE ASSESSEE AND THE DONOR IS UNDISPUTED. THE CREDIT W ORTHINESS AND THE IDENTITY OF THE DONOR IS ALSO NOT IN DISPUTE. HENC E THE ONLY ISSUE LEFT IS THE GENUINENESS / PURPOSE OF TRANSACTION AND IN VI EW OF THE FACT THAT IT IS WITHIN THE CLOSE FAMILY, THE ADDITION IS THEREFO RE DELETED. 133 WE FIND NOTHING WRONG WITH THE ORDER OF THE LD. CIT(A) BECAUSE THE ASSESSING OFFICER HAS HIMSELF ACCEPTED THAT THE CONTENTION OF THE ASSESSEE WAS CORRECT. ACCORDINGLY WE CONFIRM THE ORDER OF THE LD. CIT(A). 134 IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 1195/CHD/2012 IS DISMISSED. ITA NO. 1196/CHD/2012 AY 2007-08 REVENUE 135 IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLO WING GROUNDS: (I) WHETHER THE LD. CIT(A) IS JUSTIFIED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 28,73,798/- ON ACCOUNT OF GIFT RECEIVED FROM SH. S.P. SINGH WHEN ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE GIFT ? (II) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE CIT(A) WAS JUSTIFIED IN ACCEPTING THE GENUINENESS OF A GIFT FR OM NON RESIDENT INDIAN (NRI) BROTHER OF THE ASSESSEE, IN TOTAL DISREGARD T O THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. P R GANAPATHY (2012- TIOL-76-SC-IT) THAT THE ASSESSEE HAS TO SHOW ADEQUA CY OF FUNDS IN THE HANDS OF FOREIGN DONOR FOR AFORESAID GIFT DONATION ? (III) WHETHER ON FACTS OF THE CASE ADVERSE AND REBU TTABLE PRESUMPTION SHOULD HAVE BEEN DRAWN ABOUT GENUINENESS OF THE GIFT WHEN THE ASSESSEE OVER A PERIOD OF SEVEN ASSESSMENT YEARS HAS RECEIVED A T OTAL SUM OF RS. 6,67,05,848/- CRORES AS GIFT ? (IV) WHETHER THE LD. CIT(A) ON FACTS AND CIRCUMSTAN CES OF THIS IS JUSTIFIED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 13 ,76,836/- ON ACCOUNT OF MONEY RECEIVED FROM SMT. AMRIT KAUR WHEN ASSESSEE F AILED TO PROVE THE GENUINENESS OF THE GIFT ? 136 GROUNDS NO. 1 TO 3 - AFTER HEARING BOTH THE PAR TIES WE FIND THAT THE ISSUES RAISED THROUGH THESE GROUNDS A RE IDENTICAL TO THE ISSUES RAISED IN ITA NO. 1193/CHD/2012. SIN CE THE FACTS OF THE CASE AND THE CONTENTIONS OF BOTH THE PARTIES ARE IDENTICAL TO THE ISSUES RAISED IN ITA NO. 1193/CHD/2012 FOR A SSESSMENT YEAR 2004-05, FOLLOWING THAT ORDER WE HAVE DECIDE THESE ISSUES AGAINST THE REVENUE. 50 137 GROUND NO. 4 THROUGH GROUND NO. 4 THE REVENU E HAS RAISED THE ISSUE OF GIFTS RECEIVED FROM SMT. AMRIT KAUR WHICH HAS BEEN DELETED BY THE LD. CIT(A) ON THE BASIS OF REMAND REPORT WHICH IS IDENTICAL AS IN ASSESSMENT YEAR 20 06-07 IN ITA NO. 1195/CHD/2012, THEREFORE FOLLOWING THAT ORDER I N RESPECT OF GROUND NO. 4 WE DECIDE THIS ISSUE AGAINST THE REVEN UE. 138 IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 1196/CHD/2012 IS DISMISSED. ITA NO. 1197/CHD/2012 A.Y 2008-09 REVENUE 139 IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS: (I) WHETHER THE LD. CIT(A) IS JUSTIFIED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 152,33,693/- ON ACCOUN T OF GIFT RECEIVED FROM SH. S.P. SINGH WHEN ASSESSEE FAILED T O PROVE THE GENUINENESS OF THE GIFT ? (II) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE CIT(A) WAS JUSTIFIED IN ACCEPTING THE GENUINENESS OF A GIFT FR OM NON RESIDENT INDIAN (NRI) BROTHER OF THE ASSESSEE, IN TOTAL DISR EGARD TO THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. P R GANAPATHY (2012-TIOL-76-SC-IT) THAT THE ASSESSEE HAS TO SHOW ADEQUACY OF FUNDS IN THE HANDS OF FOREIGN DONOR FOR AFORESAID GIFT DONATION ? (III) WHETHER ON FACTS OF THE CASE ADVERSE AND REBU TTABLE PRESUMPTION SHOULD HAVE BEEN DRAWN ABOUT GENUINENES S OF THE GIFT WHEN THE ASSESSEE OVER A PERIOD OF SEVEN ASSES SMENT YEARS HAS RECEIVED A TOTAL SUM OF RS. 6,67,05,848/- CRORE S AS GIFT ? (IV) WHETHER THE LD. CIT(A) ON FACTS AND CIRCUMSTAN CES OF THIS IS JUSTIFIED IN LAW AND ON FACTS IN DELETING THE AD DITION OF RS. 20,32,632/- ON ACCOUNT OF MONEY RECEIVED FROM SMT. AMRIT KAUR WHEN ASSESSEE FAILED TO PROVE THE GENUINENESS OF TH E GIFT ? 140 GROUNDS NO. 1 TO 3 - AFTER HEARING BOTH THE PAR TIES WE FIND THAT THE ISSUES RAISED THROUGH THESE GROUNDS A RE IDENTICAL TO THE ISSUES RAISED IN ITA NO. 1193/CHD/2012. SIN CE THE FACTS OF THE CASE AND THE CONTENTIONS OF BOTH THE PARTIES ARE IDENTICAL TO THE ISSUES RAISED IN ITA NO. 1193/CHD/2012 FOR A SSESSMENT YEAR 2004-05, FOLLOWING THAT WE HAVE DECIDE THESE ISSUES AGAINST THE REVENUE. 51 141 THROUGH GROUND NO. 4 THE REVENUE HAS RAISED THE ISSUE OF GIFTS RECEIVED FROM SMT. AMRIT KAUR WHICH HAS BEEN DELETED BY THE LD. CIT(A) ON THE BASIS OF REMAND REPORT WHICH IS IDENTICAL AS IN ASSESSMENT YEAR 2006-07 IN ITA NO. 1195/CHD/ 2012, THEREFORE FOLLOWING THAT ORDER IN RESPECT OF GROUN D NO. 4 WE DECIDE THIS ISSUE AGAINST THE REVENUE. 142. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO . 1197/CHD/2012 IS DISMISSED. ITA NO. 1198/CHD/2012 A.Y 2009-10 REVENUE 143 IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS: (I) WHETHER THE LD. CIT(A) IS JUSTIFIED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.278,79,676/- ON ACCOUNT OF GIFT RECEIVED FROM SH. S.P. SINGH WHEN ASSESSEE FAILED T O PROVE THE GENUINENESS OF THE GIFT ? (II) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE CIT(A) WAS JUSTIFIED IN ACCEPTING THE GENUINENESS OF A GIFT FR OM NON RESIDENT INDIAN (NRI) BROTHER OF THE ASSESSEE, IN TOTAL DISR EGARD TO THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. P R GANAPATHY (2012-TIOL-76-SC-IT) THAT THE ASSESSEE HAS TO SHOW ADEQUACY OF FUNDS IN THE HANDS OF FOREIGN DONOR FOR AFORESAID GIFT DONATION ? (III) WHETHER ON FACTS OF THE CASE ADVERSE AND REBU TTABLE PRESUMPTION SHOULD HAVE BEEN DRAWN ABOUT GENUINENES S OF THE GIFT WHEN THE ASSESSEE OVER A PERIOD OF SEVEN ASSES SMENT YEARS HAS RECEIVED A TOTAL SUM OF RS. 6,67,05,848/- CRORE S AS GIFT ? (IV) WHETHER THE LD. CIT(A) ON FACTS AND CIRCUMSTAN CES OF THIS IS JUSTIFIED IN LAW AND ON FACTS IN DELETING THE AD DITION OF RS. 23,447/- ON ACCOUNT OF MONEY RECEIVED FROM SMT. RAN JIT KAUR WHEN ASSESSEE FAILED TO PROVE THE GENUINENESS OF TH E GIFT ? (V.) WHETHER THE LD. CIT(A) IS JUSTIFIED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 3,00,000/- ON ACCOUNT OF MONEY RECEIVED FROM SMT. AMRIT KAUR WHEN ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE GIFT ? 144 GROUNDS NO. 1 TO 3 - AFTER HEARING BOTH THE PAR TIES WE FIND THAT THE ISSUES RAISED THROUGH THESE GROUNDS A RE IDENTICAL TO THE ISSUES RAISED IN ITA NO. 1193/CHD/2012. SIN CE THE FACTS OF THE CASE AND THE CONTENTIONS OF BOTH THE PARTIES ARE IDENTICAL TO THE ISSUES RAISED IN ITA NO. 1193/CHD/2012 FOR A SSESSMENT 52 YEAR 2004-05, FOLLOWING THAT ORDER WE HAVE DECIDE THESE ISSUES AGAINST THE REVENUE. 145 GROUND NO. 4 THIS ISSUE IS IDENTICAL TO THE I SSUE OF GIFTS RECEIVED FROM SMT. AMRIT KAUR BECAUSE HERE AGAIN TH E ASSESSING OFFICER HAS ACCEPTED THE CONTENTION IN TH E REMAND REPORT BUT STILL GIFT AMOUNTING TO RS. 23497/- WAS NOT ACCEPTED BECAUSE SMT. RANJIT KAUR HAS NOT STATED IN HER STAT EMENT THAT SUCH GIFT WAS GIVEN. THE LD. CIT(A) ALLOWED RELIEF ON THE BASIS OF REMAND REPORT BY HOLDING THAT MERELY BECAUSE SMT .RANJIT KAUR DID NOT MENTION ABOUT THIS GIFT DURING HER STA TEMENT WOULD NOT PROVE ANYTHING WHEN THE DOCUMENTS CLEARLY SHOW THE FACT OF GIFT. THEREFORE FOLLOWING OUR REASONING GIVEN FOR A CCEPTANCE OF GIFT IN CASE OF SMT. AMRIT KAUR IN ASSESSMENT YEAR 2006-07 AND 2007-08 WE CONFIRM THE ORDER OF THE LD. CIT(A). 146 GROUND NO. 5 - THROUGH THIS GROUND THE REVENUE HAS RAISED THE ISSUE OF GIFTS RECEIVED FROM SMT. AMRIT KAUR WHICH HAS BEEN DELETED BY THE LD. CIT(A) ON THE BASIS OF REMAND REPORT WHICH IS IDENTICAL AS IN ASSESSMENT YEAR 20 06-07 IN ITA NO. 1195/CHD/2012, THEREFORE FOLLOWING THAT ORDER I N RESPECT OF GROUND NO. 4 WE DECIDE THIS ISSUE AGAINST THE REVEN UE. 147 IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 1198/CHD/2012 IS DISMISSED. ITA NO. ITA NO. 1166/CHD/2012 A.Y 2003-04 GURJI T SINGH 148 IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLO WING GROUNDS: 1 THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACT S IN FRAMING THE ASSESSMENT WITHOUT AFFORDING PROPER OPPORTUNIT Y OF BEING HEAR TO THE APPELLANT. 2 THAT THE AUTHORITIES BELOW HAS ERRED IN LAW AND F ACTS TO APPOINT SPECIAL AUDITOR IN AN AUTOMATIC MANNER WITH OUT CONSIDERING 53 THE FACTS OF THE CASE AND CONSEQUENTLY THE APPOINTM ENT OF HE AUDITOR IS BAD IN LAW. 3 THAT THE APPOINTMENT OF SPECIAL AUDITOR IS BAD IN LAW AND IS NOT IN ACCORDANCE WITH THE SPIRIT OF LAW UNDER THE PROVISIONS OF SECTION 142(2A) OF THE ACT BUT ONLY TO GAIN TIME F OR COMPLETING THE ASSESSMENT WHICH IS BARRED BY LIMITATION. 4 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING THE ADDITIONS OF RS. 19,39,238/- U/S 68 ON ACCOUNT OF A LLEGED UNEXPLAINED CASH CREDITS COMPRISING RS. 13,95,000/- FROM PBIL APEX CONSORTIUM LTD AND RS. 544238/- FROM G.,M. HIR ER. 5 THAT THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING THE DISALLOWANCE U/S 40A(3) OF THE ACT AMOUNTING TO RS. 2,73,544/- 6 THAT LD. CIT(A) HAS ERRED IN LOWER AUTHORITIES AN D FACTS IN NOT TAKING RELIANCE OF ENTRIES RECORDED IN SUPPLEME NTARY CASH BOOK PRODUCED BEFORE THE LD. CIT(A) AFTER ADMITTING THE SAME U/S 46A(1)(D) . AND DESPITE THE FACT THAT ASSESSING OFF ICER HAS CONFIRMED THE VERIFICATION OF DEBIT/CREDIT ENTRIES RECORDED IN THE SUPPLEMENTARY CASH BOOK. 149 OUT OF ABOVE GROUNDS, GROUNDS NO. 1,2,3 & 6 WER E NOT PRESSED BEFORE US, THEREFORE THESE GROUNDS ARE DISM ISSED AS NOT PRESSED BEFORE US. 150 GROUND NO. 4 AFTER HEARING BOTH THE PARTIES W E FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICE NOTICED THAT THERE WERE CERTAIN CREDITS IN THE VARIOUS PRO PRIETARY CONCERNS OF THE ASSESSEE AS BELOW: GURJIT SINGH CREDIT DEBIT BALANCE PBIL APEX CONSORTIUM LTD 125000 125000 GM HIRER 400000 NIL 400000 M/S SURINDER PAL SINGH OBERROI (PROP GURJIT SINGH) GM HIRER 134238 NIL 134238 PBIL APEX CONSORTIUM LTD 1259171 1259171 0 JASWANT SINGH & CO 250000 250000 0 PARKASH SINGH & CO 210000 210000 0 DRAINAGE DIV, LUDHIANA 1510320 1510320 0 M/S PRITAM SINGH & SONS (PROP GURJIT SINGH) GM HIRER 100000 NIL 10000 PBIL APEX CONSORTIUM LTD 5160418 3890418 1270000 PUNJAB URBAN PLANNING DEV AUTHORITY 200000 200000 0 RR PAUL 400000 400000 0 DRAIANGE DIV, AMRITSAR 190278 190278 0 TOTAL 9939425 1939238 54 SINCE THE ASSESSEE DID NOT FILE ANY CONFIRMATION AN D OTHER EVIDENCES THEREFORE A SUM OF RS. 1939238/- WAS ADDE D TO THE INCOME OF THE ASSESSEE. 151 ON APPEAL BEFORE THE LD. CIT(A) VARIOUS DETAILS WERE FILED WHICH WERE SENT FOR REMAND REPORT. IN THE REMAND R EPORT THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS CLAIM ED THAT THESE WERE RUNNING ACCOUNTS AND ULTIMATELY NET BAL ANCE OF RS. 51205/- IS RECOVERABLE FROM THE SAID COMPANY. HOWE VER, SINCE THE CONFIRMATION AND PAN WAS ALSO NOT FILED, THE CR EDIT COULD NOT BE ACCEPTED. 152 BEFORE THE LD. CIT(A) IN COUNTER COMMENTS TO TH E REMAND REPORT, IT WAS STATED THAT THESE TRANSACTIONS WERE VERIFIED BY THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS ACCEPTED THAT ULTIMATELY NET BALANCE OF RS. 51205/- WAS REC OVERABLE FROM THE SAID COMPANY. SINCE THE ASSESSING OFFICER DID NOT MAKE ANY FURTHER ENQUIRY, THEREFORE ADDITION WAS NO T JUSTIFIED. 153 IN RESPECT OF OTHER SUM OF RS. 544238/- STATED TO HAVE BEEN RECEIVED FROM G.M. HIRER IT WAS CLAIMED BEFOR E THE LD. CIT(A) THAT THESE AMOUNTS WERE RECEIVED IN THE FOLL OWING CONCERNS: I GM HIRER RS. 4,00,000/- RECEIVED IN THE HANDS OF GURJIT SINGH II GM HIRER RS. 1,34,238/- RECEIVED IN THE HANDSA O F M/S SURIDNERPAL SINGH III GM HIRER RS. 10,000/- RECEIVED IN THE HANDS OF M/S PRITAM SINGH & SONS RS. 5,44,238/- 154 THE ASSESSING OFFICER DURING REMAND PROCEEDINGS ISSUED A NOTICE U/S 133(6) TO G.M. HIRER TO FILE CONFIRMAT ION FOR THESE TRANSACTIONS AS WELL AS TO FILE PAN AND RETURN OF INCOME. IN RESPONSE CONFIRMATION OF MOHINDER SHARMA PROPRIETOR G.M. 55 HIRER WAS FILED BUT THE ASSESSING OFFICER OBSERVED THAT THIS DOES NOT PROVE ANY THING. 155 THE LD. CIT(A) AFTER EXAMINING THE SUBMISSIONS CONFIRMED THE ADDITION OF RS. 13,95,000/- ON ACCOUNT OF AMOUN T RECEIVED FROM PBIL APEX CONSORITUM LTD. BECAUSE COMPLETE ADD RESS, PAN AND OTHER REMAND DETAILS AS WELL AS CONFIRMATIO NS WERE NOT FILED. IN RESPECT OF ADDITION OF RS. 544238/- THE LD. CIT(A) OBSERVED THAT CONFIRMATION OF MOHINDER SHARMA WAS W ITHOUT SIGNATURES OF MR. SHARMA AND THEREFORE THESE AMOUNT S WERE ALSO ADDED. 156 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUB MITTED THAT THE ASSESSEE HAS RECEIVED FOLLOWING AMOUNTS FR OM G.M. HIRER IN FOLLOWING CONCERNS: G.M. HIRER - RS. 400000/- RECEIVED IN THE HANDS OF GURJIT SINGH G.M. HIRER RS. 134238/- RECEIVED IN THE HANDS OF SURINDERPAL SINGH G.M. HIRER RS. 10,000/- RECEIVED IN THE HANDS OF PRITAM SINGH AND SONS RS. 544238/- A SUM OF RS. 4 LAKHS WAS ON ACCOUNT OF PURCHASE OF TRUCK AND CONFIRMATION IN THIS RESPECT WAS FILED BEFORE THE A SSESSING OFFICER. (COPY OF WHICH IS PLACED AT PAGE 27 OF THE PAPER BOOK). A SUM OF RS. 134238/- RECEIVED IN THE HANDS OF SURI NDERPAL SINGH WAS ON ACCOUNT OF SECURITY DEPOSIT WITH THE S AID COMPANY AND THIS SHOULD HAVE BEEN DECIDED IN FAVOUR OF THE ASSESSEE. SIMILARLY IN CASE OF RS. 1 LAKH RECEIVED IN THE HANDS OF PRITAM SINGH AND SONS WAS ON ACCOUNT OF SECURITY DEPOSIT WITH THE SAID FIRM ON 31.3.2002.THE SECURITY WAS RS . 224600/- AND THE AMOUNT WAS RECOVERED ON ACCOUNT OF SECURITY DEPOSIT. IN THIS REGARD HE REFERRED TO VARIOUS PAPERS AT PAG E 44 TO 52 OF 56 THE PAPER BOOK. HE ALSO CONTENDED THAT ONCE THE AM OUNT WAS RECEIVED THROUGH CHEQUE THEN SAME COULD HAVE BEEN A CCEPTED AND IN THIS REGARD HE RELIED ON THE DECISION OF HON 'BLE PUNJAB AND HARYANA HIGH COURT IN CASE OF CIT VS. AMARCHAN D, ITA NO. 243 OF 2011. 157 IN RESPECT OF AMOUNT RECEIVED FROM PBIL APEX CO NSORTIUM IT WAS SUBMITTED THAT THE ASSESSEE WAS ACTING AS DI RECTOR IN THIS COMPANY WHICH WAS HAVING OFFICE AT 409-410, PA DMA TOWER, RAJENDRA PLACE, NEW DELHI. VARIOUS TRANSACTI ONS TOOK PLACE IN THE NAME OF GURJIT SINGH AND HIS PROPRIETA RY CONCERN, PRITAM SINGH & SONS AND SURINDERPAL SINGH. COPY OF THE RUNNING ACCOUNT WAS FILED (COPY OF WHICH IS AVAILAB LE AT PAGE 13 TO 15 OF PAPER BOOK). THE COMPANY HAD SUFFICIE NT CAPITAL. IN THIS REGARD REFERENCE WAS MADE TO PAGE 16 WHICH IS COPY OF THE REPORT FROM ROC SHOWING THAT SAID COMPANY HAD PAID UP CAPITAL OF RS. 7.99 CRORES. IT WAS FURTHER CONTENDE D THAT THE ASSESSING OFFICER HAS ACCEPTED RUNNING ACCOUNTS BEC AUSE ADDITION HAS BEEN MADE ONLY OF THE PEAK AMOUNT WHIC H MEANS THAT OTHER TRANSACTIONS HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER. 158 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE SUBMITTED THAT IDENTITY, CREDIT WORTHINESS AND GENU INENESS OF THE PARTY HAS NOT BEEN PROVED. THE ASSESSEE HAS FA ILED TO PROVE THE CREDIT. IT IS WRONG TO SAY THAT THE ASSES SING OFFICER HAS APPLIED PEAK THEORY BECAUSE THE ASSESSING OFFIC ER HAS BASICALLY MADE ADDITION OF BALANCE OUTSTANDING IN T HE FIRM. MERELY EXISTENCE OF HIGH AMOUNT OF SHARE CAPITAL DO ES NOT PROVE ANYTHING. NO DETAILS OF PBIL WERE FILED. 57 159 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CARE FULLY. AS FAR AS VARIOUS AMOUNTS RECEIVED FROM G.M. HIRER ARE CONCERNED, NO DOUBT THE CONFIRMATION FROM ONE MOHIN DER SINGH HAS BEEN FILED BUT AT THE SAME TIME THERE IS NO EVI DENCE TO SHOW THAT THE ASSESSEE HAS SOLD THE TRUCK FOR RS. 4 LAKH. THERE IS NO EVIDENCE TO SHOW THAT THE ASSESSEE HAS PURCHA SED THE TRUCK (WHICH COULD HAVE BEEN SOLD) AND SAME WAS REF LECTED IN THE BALANCE SHEET OF THE ASSESSEE AND IN THE ABSENC E OF THIS EVIDENCE, THIS ENTRY CANNOT BE ACCEPTED. SIMILARLY FOR OTHER TWO ENTRIES THE CONTENTIONS REGARDING SECURITY CANN OT BE ACCEPTED IN THE ABSENCE OF EVIDENCE THAT SUCH SECUR ITY WAS REALLY OUTSTANDING AND FOR WHAT PURPOSE THE SECURIT Y WAS GIVEN. ALL THESE ASPECTS HAVE NOT BEEN EXPLAINED BEFORE TH E ASSESSING OFFICER OR THE LD. CIT(A) OR EVEN BEFORE US. AS FAR AS THE CONTENTION THAT ONCE THE ASSESSEE HAS RECEIV ED THE AMOUNT THROUGH CHEQUE THEN SAME HAS TO BE ALLOWED, CANNOT BE ACCEPTED. HON'BLE PUNJAB AND HARYANA HIGH COURT IN CASE OF CIT VS. AMARCHAND (SUPRA) WAS CONCERNED WITH A C ASE WHERE THE TRIBUNAL HAS DELETED THE ADDITION OF RS. 3311510/-. THE ASSESSEE WAS A PARTNERSHIP FIRM ENGAGED IN THE TRADING IN IRON STEELS AS WELL AS TRADING OF BICYCLES. IT HAS SHOWN CREDIT TOTALING TO RS. 7286519/- AS ON 31.3.2007 FROM 18 P ERSONS. THE DETAIL OF CREDITORS WAS CALLED FOR WHICH WAS EX AMINED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER CAME TO CONCLUSION THAT THE IDENTITY OF THE CREDITORS WAS P ROVED BUT HE WAS NOT SATISFIED WITH THE CREDIT WORTHINESS AND GE NUINENESS OF TRANSACTIONS OF 15 CREDITORS AND THUS MADE ADDI TION OF RS. 3311510/-. ALL THE CREDITORS WERE FOUND TO BE INCOM E TAX PAYEE, THEREFORE OBSERVATION OF HON'BLE HIGH COURT THAT T HE REASON 58 WAS GIVEN FOR SOURCE OF SOURCES AND THE FACT THAT T HE PAYMENT WAS RECEIVED THROUGH CHEQUE WAS SUFFICIENTLY PROVED . THEREFORE THE CASE IS TOTALLY DISTINGUISHABLE ON FA CTS. 160 AS FAR AS ADDITION OF RS. 1395000/- IS CONCERNE D, COPY OF ACCOUNT FILED AT PAGE 13 TO 15 CLEARLY SHOW THAT TH E AMOUNTS HAVE BEEN REGULARLY TAKEN AND GIVEN. COPY OF ACCOU NT DURING THE YEAR READS AS UNDER: DATE PARTICULARS VCH TYPE VCH NO DEBIT CREDIT 10.3.2003 BY CITY BANK 5- 0502/3- 184 RECEIPT 13 125000 125000 TO CLOSING BALANCE 125000 125000 125000 1.4.2003 BY OPENING BALANCE 125000 1.4.2003 TO S.P. SINGH PROP GURJIT SINGH BEING AMOUNT TRF JOURNAL 1 125000 125000 125000 DATE PARTICULARLS VCH TYPE VCH NO DEBIT CREDIT 3.4.2002 BUY ANDHRA BAK A/C NO. 50384 RECEIPT 1 2000000 9.4.2002 TO ANDHRA BANK A/C NO. 50384 PAYMENT 2 1500000 20.5.2002 TO ANDHRA BANK A/C NO 50384 PAYMENT 14 130000 25.5.2002 TO ANDHRA BANK A/C NO. 50384 PAYMENT 15 550000 5.6.2002 TO ANDHRA BANK A/C NO. 50384 PAYMENT 17 200000 7.6.2022 BY ANDHRA BANK A/C NO. 50384 RECEIPT 5 850000 19..7.2002 TO ANDHRA BANK A/C NO. 50384 CH NO. 0797754 PAYMENT 23 1500000 1.8.2002 TO INTEREST DUE BY ANDHRA BANK A/C NO. 50384 CH RECEIPT 6 1510418 59 NO. RECEIVED FROM PBIL 1.11.2002 BY ANDHRA BANK A/C NO. 50384 RECEIPT 14 300000 TO CLOSING BALANCE 3890418 1270000 5160418 5160418 5160418 1.4.2003 BY OPENING BALANCE JOURNAL 3 1270000 1.4.2003 TO S.P. SINGH PROP GURJIT SINGH BEING PBIL BALANCE THEREFORE TO M/S SP SINGH JOURNAL 3 1270000 1270000 1270000 THE ABOVE CLEARLY SHOW THAT THE AMOUNTS HAVE BEEN T AKEN FOR SOME PURPOSE BECAUSE THE ASSESSEE WAS ALSO DIRECTOR THERE. FURTHER ADMITTEDLY THE AMOUNTS HAVE BEEN FINALLY PA ID AND ULTIMATELY THERE IS A DEBIT BALANCE OF RS. 15205/- THEREFORE IN OUR OPINION, THIS SEEMS ONLY A CURRENT ACCOUNT AND THIS ADDITION IS NOT JUSTIFIED. ACCORDINGLY WE SET ASIDE THE ORD ER OF THE LD. CIT(A) AND DELETE THE ADDITION OF RS. 1395000/- OUT OF TOTAL ADDITION OF RS. 1939238/- MADE IN RESPECT OF CREDI TS. 161 GROUND NO. 5 AFTER HEARING BOTH THE PARTIES W E FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICE NOTICED THAT A LUMP SUM EXPENSES OF RS. 1489957/- CLAIMED B Y THE ASSESSEE IN THE BOOKS OF ACCOUNTS INCLUDED LUMP SUM CASH PAYMENT OF RS. 1365722. NO REPLY WAS FILED, THEREF ORE THE ASSESSING OFFICER INVOKED PROVISIONS OF SECTION 40 A(3) AND 20% OF CASH EXPENSES AMOUNTING TO RS. 273144/- WAS DISALLOWED. 162 ON APPEAL BEFORE THE LD. CIT(A) IT WAS MAINLY S UBMITTED THAT THE ASSESSEE HAS RETURNED INCOME U/S 44AD AND THIS CONTENTION WAS ACCEPTED BY THE ASSESSING OFFICER AL SO, 60 THEREFORE THERE WAS NO SCOPE FOR FURTHER DISALLOWAN CE IN VIEW OF THE PROVISIONS OF SECTION 44AD. 163 THE LD. CIT(A) DID NOT ACCEPT THIS CONTENTION A ND CONFIRMED THE ADDITION. 164 BEFORE US, THE SUBMISSION MADE BEFORE THE LD. C IT(A) WERE REITERATED AND IT WAS POINTED OUT THAT SEC 44A D SPECIFICALLY PROVIDES THAT NO FURTHER DISALLOWANCES ARE POSSIBLE U/S 28 TO 43C WHERE INCOME OF THE ASSESSEE IS RETUR NED U/S 44AD AND THEREFORE DISALLOWANCE WAS NOT JUSTIFIED. 165 ON THE OTHER HAND, LD. D.R. FOR THE REVENUE STR ONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 166 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD, WE FIND THAT RELEVANT PORTION OF 44AD R EADS AS UNDER: (1) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAI NED IN SECTIONS 28 TO 43C , IN THE CASE OF AN ELIGIBLE ASSESSEE ENGAGED IN AN ELIGIBLE BUSI NESS, A SUM EQUAL TO EIGHT PER CENT OF THE TOTAL TURNOVER OR GROSS RECEIPTS OF THE ASSESSE E IN THE PREVIOUS YEAR ON ACCOUNT OF SUCH BUSINESS OR, AS THE CASE MAY BE, A SUM HIGHER THAN THE AFORESAID SUM CLAIMED TO HAVE BEEN EARNED BY THE ELIGIBLE ASSESSEE, SHALL BE DEEMED TO BE THE PROFITS AND GAINS OF SUCH BUSINESS CHARGEABLE TO TAX UNDER THE HEAD ' PROFITS AND GAINS OF BUSINESS OR PROFESSION'. (2) ANY DEDUCTION ALLOWABLE UNDER THE PROVISIONS OF SECTIONS 30 TO 38 SHALL, FOR THE PURPOSES OF SUB-SECTION (1), BE DEEMED TO HAVE BEEN ALREADY GIVEN FULL EFFECT TO AND NO FURTHER DEDUCTION UNDER THOSE SECTIONS SHALL BE ALL OWED : PLAIN READING OF ABOVE PROVISION CLEARLY SHOW THAT ONCE THE INCOME IS ASSESSED U/S 44AD THEN THERE CANNOT BE AN Y FURTHER DISALLOWANCE U/S 28 TO 43C. SIMILARLY NO FURTHER AL LOWANCE CAN BE GIVEN U/S 30 TO 38, THEREFORE ALLOWANCES LIKE DE PRECIATION ARE NOT SEPARATELY ALLOWABLE IF INCOME IS ASSESSED U/S 44AD. THEREFORE IN VIEW OF THIS PROVISIONS,, IN OUR OPINI ON, ONCE THE INCOME HAS BEEN ASSESSED U/S 44AD THEN FURTHER DISA LLOWANCE SHOULD NOT HAVE BEEN MADE. ACCORDINGLY WE SET ASID E THE ORDER OF THE LD. CIT(A) AND DELETE THIS ADDITION. 61 167 IN THE RESULT, APPEAL OF ASSESSEE IN ITA NO. 1166/CHD/2012 IS PARTLY ALLOWED. ITA NO. 1167/CHD/2012 A.Y 2004-05 GURJIT SINGH 168 IN THIS APPEAL THE ASSESSEE HAS FILED THE FOLLO WING GROUNDS: 1. THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACT S IN FRAMING THE ASSESSMENT WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 2. THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACT S TO APPOINT SPECIAL AUDITOR IN AN AUTOMATIC MANNER WITHOUT CONS IDERING THE FACTS OF THE CASE AND CONSEQUENTLY THE APPOINTMENT OF THE AU DITOR IS BAD IN LAW. 3. THAT THE APPOINTMENT OF SPECIAL AUDITOR IS BAD I N LAW AND IS NOT IN ACCORDANCE WITH THE SPIRIT OF LAW UNDER THE PROVISI ON OF SECTION 142(2A) OF THE ACT BUT ONLY TO GAIN TIME FOR COMPLETING THE ASSESSMENT WHICH IS BARRED BY LIMITATION. 4. THAT CIT(A) HAS ERRED IN LAW AND FACTS IN CONFIR MING THE ADDITIONS OF RS. 5,00,000/- UNDER SECTION 68 ON ACCOUNT OF AL LEGED UNEXPLAINED CASH CREDITS COMPRISING RS. 2,00,000/- FROM M.S. & COMPANY AND RS. 3,00,000/- FROM G.M. HIRER. (PARA 23 PAGE 9-10 OF ASSESSMENT ORDER) (PARA 9 PAGE 13-17 OF CIT(A) ORDER) 5 THAT LEARNED CIT(A) HAS ERRED IN LAW AND FACTS IN NOT TAKING RELIANCE OF ENTRIES RECORDED IN SUPPLEMENTARY CASH BOOK PRODUCED BEFORE THE CIT(A) AFTER ADMITTING THE SAME U/S 46A( 1)(D) AND DESPITE THE FACT THAT AO HAS CONFIRMED THE VERIFICATION OF DEBI T / CREDIT ENTRIES RECORDED IN THE SUPPLEMENTARY CASH BOOK. 169 OUT OF ABOVE GROUNDS, GROUNDS NO. 1 TO 3 AND 5 WERE NOT PRESSED BEFORE US AND THEREFORE THESE ARE DISMISSED AS NOT PRESSED. 170 GROUND NO. 4 AFTER HEARING BOTH THE PARTIES W E FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICE NOTICED THAT SPECIAL AUDITOR HAD NOTED CERTAIN CREDITS WER E THERE IN THE BALANCE SHEET FOR WHICH NO CONFIRMATION ETC WAS FIL ED. THEREFORE THE ASSESSING OFFICER GAVE A SHOW CAUSE N OTICE WHY THESE AMOUNTS SHOULD NOT BE ADDED. COPY OF THE LED GER ACCOUNT WAS FILED AND IT WAS SUBMITTED THAT SPECIAL AUDITOR HAS TAKEN INTO ACCOUNT ALL THE CREDITS DURING THE YEAR WITHOUT GIVING ANY BENEFIT OF DEBITS IN SUCH ACCOUNTS. THE ASSESS ING OFFICER NOTICED THE DETAILS OF SUCH ACCOUNTS AS UNDER: 62 GURJIT SINGH 2004-05 R N HIGHWAYS PVT LTD 400000 400000 M&S CO. 200000 0 200000 APPEX EXPORT SH. SURINDER PAL SINGH 100000 0 100000 M/S SURINDER PAL SINGH OBEROI ) PROP. GURJIT SINGH) GM HIZER 300000 300000 PBIL APEX CONSORTIUM 6652545 6703750 - TOTAL 7652545 600000 HE FURTHER NOTED THAT SINCE THE BASIC INGREDIENTS O F SEC 68 WERE NOT COMPLIED THEREFORE A SUM OF RS. 6 LAKHS WA S ADDED TO THE INCOME OF THE ASSESSEE. 171 ON APPEAL BEFORE THE LD. CIT(A) CERTAIN FURTHER DOCUMENTS WERE FILED WHICH WERE SENT FOR REMAND REP ORT. THE LD. CIT(A) DELETED THE ADDITION OF RS. 1 LAKH ON AC COUNT OF GIFTS RECEIVED FROM S.P. SINGH AGAINST WHICH APPEAL HAS B EEN FILED BY THE REVENUE AND THEREFORE WE SHALL DISCUSS THIS ISSUE WHILE ADJUDICATING THE APPEAL OF THE REVENUE. IN RESPECT OF OTHER TWO ITEMS THE CONTENTS OF THE REMAND REPORT AND COU NTER COMMENTS OF THE ASSESSEE ARE NOTED BY THE LD. CIT(A ) AS UNDER: DCIT IN HIS COMMENTS HAS STATED THAT I. M.S. & COMPANY RS. 2,00,000/- ASSESSEE HAS CONTENDED THAT A SUM OF RS. 2,00,000/- WAS RECEIVED FROM M.S. & CO. DURING THE YEAR FROM MANJI T SINGH SON OF RAJ SINGH PORP M.S. & CO. PAN AQPPS6409Q 63 A REPLY TO NOTICE U/S 133(6) WAS FILED ALONGWITH COPY OF ACCOUNT & A COPY OF RETURN HAS BEEN FILED BY ONE SH RI MANJIT SINGH, PROP. M.S. & COMPANY. THE DOCUMENTS FILED BY SHRI MAJIT SINGH DO NOT PROVE THE INGREDIENTS OF S. 68. THEREFORE, THE CLAIM OF ASSESSEE CAN NOT BE ACCEPTED. ASSESSEE IN HIS COUNTER COMMENTS HAS STATED THAT THE DOCUMENTS WERE FILED BY ONE MANJIT SINGH PROP M.S. & CO. DO NOT PROVE THE INGREDIENTS OF S. 68. IT IS VERY DIF FICULT TO UNDERSTAND AS TO WHICH INGREDIENT IS NOT PROVED AS EXPLANATIONS PUT FORTH BY M.S. & CO. IS SELF EXPLAN ATORY. THAT IN CASE AO NEEDS FURTHER CLARIFICATION HE WAS FREE TO ASK FROM MANJIT SINGH WHICH HE CHOOSES NOT TO DO. AS SUCH TH ERE IS NO JUSTIFICATION IN CONFIRMING ANY ADDITION ON THIS AC COUNT. III. G M HIRER RS. 300000/- DCIT IN HAS COMMENTS HAS STATED THAT ASSESSEE HAS CONTENDED THAT M/S. SURINDER PAL SINGH HAS RECEIVED A SUM OF RS. 3,00,000/- DURING THE YEAR FR OM M/S. G.M. HIRER PROP. MAHENDER SHARMA SON OF NITYA NAND SHARMA PAN ALNPF0611P A REPLY TO NOTICE U/S 133(6) WAS FILED ALONGWITH CO PY OF ACCOUNT & A COPY OF RETURN HAS BEEN FILED BY ONE SH RI MOHINDER SHARMA, PORP. M/S G.M. HIRER. THE DOCUMENT S FILED BY SH. MOHINDER SHARMA DO NOT PROVE THE INGREDIENTS OF S.68. THEREFORE, THE CLAIM OF ASSESSEE CAN NOT BE ACCEPTE D. ASSESSEE IN HIS COUNTER COMMENTS HAS STATED THAT THE LEARNED DCIT HAS ISSUED NOTICE U/S. 133(6) TO M/S. G.M. HIRER WHO HAS EXPLAINED THE TRANSACTIONS WITH THE ASSESSE E AS AN AMOUNT AS AMOUNT PAID FOR PURCHASE OF MAHINDRA TRAC TOR. THE COPY OF INCOME TAX RETURN WAS FILED BY MOHINDER SHA RMA. THE LEARNED OFFICER HAS SIMPLY REMARKED IN HIS COMM ENTS THAT THE DOCUMENTS WERE FILED BY SH. MOHINDER SHARMA D O NOT PROVE THE INGREDIENTS OF S. 68. IT IS VERY DIFFICU LT TO UNDERSTAND AS TO WHICH INGREDIENT IS NOT PROVED AS EXPLANATION S PUT FORTH BY G.M.HIRER IS SELF EXPLANATORY. THAT IN CASE AO N EEDS FURTHER CLARIFICATION HE WAS FREE TO ASK FROM MOHIN DER SHARMA PROP. G.M. HIRER WHICH HE CHOOSES NOT TO DO. AS SUC H THERE IS NO JUSTIFICATION IN CONFIRMING ANY ADDITION ON THIS ACCOUNT. THE LD. CIT(A) THEREAFTER OBSERVED THAT IN CASE OF CREDIT OF RS. 2.00 LAKH FROM M.S. & CO. IN THE CONFIRMATION THER E ARE NO SIGNATURES AND THEREFORE CONFIRMATION WAS NOT ACCEP TED AND THIS AMOUNT ADDED TO THE INCOME OF THE ASSESSEE. I N CASE OF CREDIT OF RS. 3 LAKHS FROM G.M. HIRER AGAIN CONFIRM ATION WAS 64 WITHOUT SIGNATURES AND THEREFORE THIS AMOUNT WAS AD DED TO THE INCOME OF THE ASSESSEE. 172 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUB MITTED THAT IN RESPECT OF CREDIT OF RS. 2 LAKHS FROM M.S. & CO. THE ASSESSING OFFICER HAS MADE ENQUIRIES U/S 133(6) AND HIS CONFORMATION AND OTHER DOCUMENTS WERE FILED BEFORE THE ASSESSING OFFICER (COPY AVAILABLE AT PAGE 36 TO 40 OF PAPER BOOK). IN RESPECT OF A SUM OF RS. 3 LAKHS RECEIVE D FROM G.M. HIRER IT WAS POINTED OUT THAT ENQUIRY WAS MADE BY T HE ASSESSING OFFICER AGAINST WHICH A REPLY WAS ALSO FI LED VIDE REPLY DATED 2.6.2012 (COPY AVAILABLE AT PAGE 41 OF THE PAPER BOOK). IT WAS SUBMITTED THAT A SUM OF RS. 3 LAKH W AS PAID BY G.M. HIRER ON ACCOUNT OF PURCHASE OF MOHINDRA TRACT OR MAKE 495 WITH JACK NO. PBJ 2141 (14X7X2) MODEL 1998. NO FURTHER ENQUIRIES HAVE BEEN MADE, THEREFORE THIS AMOUNT SHO ULD HAVE BEEN ACCEPTED. 173 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 174 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD, WE FIND THAT IN RESPONSE TO THE ENQUIRY U/S 133(6) MANJIT SINGH ON BEHALF OF M.S. & CO. EXPLAINED THE NATURE OF MONEY GIVEN AS UNDER: 1. THAT I HAVE JOINTLY PURCHASED ONE PROPERTY IN B ULK MATERIAL MARKET POPULARLY KNOWN AS BMM 373, PHASE-11, MOHALI THROUG H PUDA AUCTION IN THE NAME OF PRITAM SINGH OBEROI. THE PROPERTY WAS P URCHASED IN CONSIDERATION OF RS. 29,10,000/- AUCTION PRICE TO B E PAID IN INSTALLMENT. THE INTEREST IS TO BE PAID TO PUDA ALONG WITH INSTA LLMENTS. THAT I WAS HAVING 30% SHARE IN THE PROPERTY UNDER CONSIDERATIO N AND A PART OF MONEY AMOUNTING RS. 436,500/- WAS DIRECTLY DEPOSITE D WITH PUDA ON 27/11/2003 AND A SUM OF RS. 1,00,000/- WAS PAID TO PRITAM SINGH OBEROI. THAT SUBSEQUENT PAYMENT OF RS. 2,00,000/- W AS PAID ON 28.01.2004 DRAWN ON MY ICICI BANK A/C NO. 005805000 292, SIMILARLY RS. 2,90,000/- WAS PAID ON 19.11.2004 TO BIKAS DEB ON T HE DIRECTIONS OF PRITAM SINGH AND AS SUCH TOTAL AMOUNT OF RS. 10,26, 500/- WAS PAID ON ACCOUNT OF 30% SHARE IN THE PROPERTY UNDER CONSIDER ATION. 65 COPY OF CONFIRMATION HAS ALSO BEEN FILED. NO DOUBT THE CONFORMATION IS ONLY INITIALED BUT IT CANNOT BE SAI D THAT IT IS NOT SIGNED. COPY OF AGREEMENT FOR PURCHASE OF PROPERTY JOINTLY WITH PRITAM SINGH HAS ALSO BEEN FILED AND COPY OF RETURN HAS ALSO BEEN FILED. IN OUR OPINION, WHEN THESE DOCUMENTS A RE CONSIDERED TOGETHER THEN IT SEEMS THAT M.S. & CO. H AS FILED PROPER CONFIRMATION. IN CASE THE ASSESSING OFFICER HAD ANY DOUBT HE SHOULD HAVE MADE FURTHER ENQUIRY AND IN TH E ABSENCE OF SUCH FURTHER ENQUIRY THIS EVIDENCE CANNOT BE BRU SHED ASIDE AND ADDITION CANNOT BE MADE WITHOUT ANY FURTHER ENQ UIRY. THEREFORE WE DELETE THE ADDITION. AS FAR AS A SUM OF RS. 3 LAKH RECEIVED FROM G.M. HIRER IS CONCERNED, NO DOUBT ENQ UIRY HAS BEEN CONDUCTED BY THE ASSESSING OFFICER AND MOHINDE R SHARMA ON BEHALF OF G.M. HIRER HAS REPLIED THAT THIS MONEY WAS PAID ON ACCOUNT OF PURCHASE OF MOHINDRA TRACTOR. NO PAN ETC , HAS BEEN GIVEN. FURTHER THERE IS NO EVIDENCE BEFORE US TO SHOW THAT THE ASSESSEE OWNED THIS TRACTOR. NO EVIDENCE FOR TRANSFER OF REGISTRATION OF THIS TRACTOR HAS BEEN FURNISHED BEFORE THE ASSESSING OFFICER OR CIT(A) OR EVEN BEFORE US. THE REFORE WE ARE OF THE OPINION THAT THIS ADDITION HAS BEEN CORR ECTLY MADE AND ACCORDINGLY WE CONFIRM THE SAME. THUS THIS GROU ND IS PARTLY ALLOWED BY HOLDING THAT THE ADDITION OF RS. 2 LAKH FROM M.S. CO, SHOULD BE DELETED AND ADDITION OF RS. 3 LA KH FROM G.M. HIRER SHOULD BE CONFIRMED. 175 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE STRONGLY RELIED ON THE ORDER OF THE LD. CIT(A). 176 IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO . 1167/CHD/2012 IS PARTLY ALLOWED. ITA NO. 1168/CHD/2012 A.Y 2005-06 GURJIT SINGH 66 177 IN THIS APPEAL THE ASSESSEE HAS RAISED FOLLOWIN G GROUNDS: 1. THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACT S IN FRAMING THE ASSESSMENT WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 2. THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACT S TO APPOINT SPECIAL AUDITOR IN AN AUTOMATIC MANNER WITHOUT CONS IDERING THE FACTS OF THE CASE AND CONSEQUENTLY THE APPOINTMENT OF THE AU DITOR IS BAD IN LAW. 3. THAT THE APPOINTMENT OF SPECIAL AUDITOR IS BAD I N LAW AND IS NOT IN ACCORDANCE WITH THE SPIRIT OF LAW UNDER THE PROVISI ON OF SECTION 142(2A) OF THE ACT BUT ONLY TO GAIN TIME FOR COMPLETING THE ASSESSMENT WHICH IS BARRED BY LIMITATION. 4. THAT CIT(A) HAS ERRED IN LAW AND FACTS IN CONFIR MING THE ADDITIONS OF RS. 461500/- UNDER SECTION 68 ON ACCOUNT OF ALLE GED UNEXPLAINED CASH CREDITS COMPRISING RS. 2,90,000/- FROM M.S. & COMPA NY AND RS. 175500/- FROM BALU SINGH JAMADAR. 5 THAT LEARNED CIT(A) HAS ERRED IN LAW AND FACTS IN NOT TAKING RELIANCE OF ENTRIES RECORDED IN SUPPLEMENTARY CASH BOOK PRODUCED BEFORE THE CIT(A) AFTER ADMITTING THE SAME U/S 46A( 1)(D) AND DESPITE THE FACT THAT AO HAS CONFIRMED THE VERIFICATION OF DEBI T / CREDIT ENTRIES RECORDED IN THE SUPPLEMENTARY CASH BOOK. 178 OUT OF ABOVE GROUNDS, GROUNDS NO. 1 TO 3 AND 5 WERE NOT PRESSED THEREFORE SAME ARE DISMISSED AS NOT PRESSED . 179 IN THIS YEAR THE ASSESSEE HAS MOVED AN APPLICAT ION FOR ADMISSION OF ADDITIONAL EVIDENCE. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE APPLICATION AND POINTED OU T THAT COPY OF REASONS RECORDED FOR REOPENING OF THE ASSESSMENT OF S.P. SINGH OBEROI AS WELL AS HIS ASSESSMENT ORDER FOR AS SESSMENT YEAR 2005-06 IS BEING FILED AS ADDITIONAL EVIDENCE BECAUSE SAME WAS ON 28.2.2013 I.E. AFTER PASSING THE IMPUGN ED ORDER. THIS ORDER IS RELEVANT BECAUSE GIFTS AND LOANS RECE IVED FROM S.P. SINGH WERE VERIFIED IN HIS OWN CASE BY THE REV ENUE AND FOUND TO BE CORRECT. THIS BEING A ASSESSMENT ORDER ONLY, THEREFORE IN THE INTEREST OF JUSTICE THIS EVIDENCE CAN BE ADMITTED. 180 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE OPPOSED THE SUBMISSIONS. 67 181 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD, WE FIND THAT THIS IS VERY RELEVANT EVID ENCE AND IS ONLY AN ASSESSMENT ORDER PASSED BY THE DEPARTMENT. THE ORDER CAME INTO EXISTENCE ONLY AFTER PASSING OF IMPUGNED ORDER AND THEREFORE SAME IS BEING ADMITTED IN THE INTEREST OF JUSTICE. 182 GROUND NO. 4 AFTER HEARING BOTH THE PARTIES W E FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICE NOTICED THAT VARIOUS CREDITS WERE FOUND TO BE APPEARING IN THE BOOKS OF ACCOUNTS. THE DETAILS OF THE SAME ARE AS UNDER: GURJIT SINGH 2004-05 CREDIT DEBIT BALANCE R N HIGHWAYS PVT LTD. 300000 0 300000 APEX EXPORT PRITAM SINGH OBEROI 1520000 0 1520000 MS & CO. 290000 0 290000 M/S PRITAM SINGH & SONS (PROP. GURJIT SINGH) PRITAM SINGH 139200 0 139200 BALU SINGH JAMADAR 171500 0 171500 TOTAL 2420700 2420700 183 SINCE CONFIRMATION ETC. WAS NOT FILED, THEREFOR E A SUM OF RS. 2420700/- WAS ADDED TO THE INCOME OF THE ASSESS EE. 184 DURING ASSESSMENT PROCEEDINGS OUT OF ABOVE ADDI TION ON ACCOUNT OF PRITAM SINGH AMOUNTING TO RS. 1520000/- AND RS. 139000/- WAS DELETED BY THE LD. CIT(A) AGAINST WHIC H NO APPEAL HAS BEEN FILED BY THE REVENUE. THEREFORE WE ARE NOT DISCUSSING THIS ISSUE. OTHER TWO ADDITIONS AMOUNTI NG TO RS. 290000/- ON ACCOUNT OF M.S. & CO. AND RS. 171500/- ON ACCOUNT OF BALU SINGH JAMADAR WERE CONFIRMED BY THE LD. CIT(A) BY FOLLOWING THE REASONS GIVEN IN A.Y 2004-0 5 AND ALSO 68 THE COMMENTS OF THE ASSESSING OFFICER DURING ASSESS MENT PROCEEDINGS. 185 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUB MITTED THAT ENQUIRIES WERE MADE BY THE ASSESSING OFFICER F ROM M.S. & CO. U/S 133(6) AND COPY OF THE ACCOUNT WAS CONFIRME D BY M.S. & CO. IN RESPECT OF SUCH ENQUIRY (COPY AVAILABLE A T PG 28 & 29 OF PAPER BOOK). FURTHER DETAILS WERE ALSO GIVEN SH OWING NATURE OF THE CREDIT AS WELL AS COPY OF THE AGREEMENT SHOW ING JOINT INVESTMENT (COPY AVAILABLE AT PAGE 53 TO 55 OF PAPE R BOOK). 186 IN RESPECT OF CREDIT OF RS. 171500/- IT WAS ST ATED THAT THIS AMOUNT WAS RECOVERABLE FROM THIS PARTY WHICH BECOME S CLEAR FROM THE BALANCE SHEET OF PRITAM SINGH & SONS (COPY AVAILABLE AT PAGE 37 OF THE PAPER BOOK) AND HE HAS REPAID THE MONEY. 187 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF LD. CIT(A). 188 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD, WE FIND THAT AS FAR AS CREDIT OF RS. 29 0000/- FROM M.S. & CO. SAME HAS BEEN EXPLAINED DURING ENQUIRY M ADE IN ASSESSMENT PROCEEDINGS. IN THE EXPLANATION IT IS S TATED AS UNDER: 1. THAT I HAVE JOINTLY PURCHASED ONE PROPERTY IN BULK MATERIAL MARKET POPULARLY KNOWN AS BMM 373, PHASE-11, MOHALI THROUG H PUDA AUCTION IN THE NAME OF PRITAM SINGH OBEROI. THE PROPERTY WAS P URCHASED IN CONSIDERATION OF RS. 29,10,000/- AUCTION PRICE TO B E PAID IN INSTALLMENT. THE INTEREST IS TO BE PAID TO PUDA ALONG WITH INSTA LLMENTS. THAT I WAS HAVING 30% SHARE IN THE PROPERTY UNDER CONSIDERATIO N AND A PART OF MONEY AMOUNTING RS. 436,500/- WAS DIRECTLY DEPOSITE D WITH PUDA ON 27/11/2003 AND A SUM OF RS. 1,00,000/- WAS PAID TO PRITAM SINGH OBEROI. THAT SUBSEQUENT PAYMENT OF RS. 2,00,000/- W AS PAID ON 28.01.2004 DRAWN ON MY ICICI BANK A/C NO. 005805000 292, SIMILARLY RS. 2,90,000/- WAS PAID ON 19.11.2004 TO BIKAS DEB ON T HE DIRECTIONS OF PRITAM SINGH AND AS SUCH TOTAL AMOUNT OF RS. 10,26, 500/- WAS PAID ON ACCOUNT OF 30% SHARE IN THE PROPERTY UNDER CONSIDER ATION. COPY OF THE CONFIRMATION OF THE ACCOUNT AS WELL AS AGREEMENT FOR MAKING INVESTMENT JOINTLY HAS ALSO BEEN FILED B EFORE THE 69 ASSESSING OFFICER. HOWEVER, WE FIND THAT IN THE CON FIRMATION PAN IS NOT THERE, THEREFORE IN OUR OPINION, THE SOU RCE CANNOT BE ACCEPTED AND ACCORDINGLY WE CONFIRM THE ORDER O F THE LD. CIT(A). 189 SIMILARLY THE AMOUNT OF RS. 171500/- WAS RECOVE RABLE FROM BALU SINGH JAMADAR. THIS FACT BECOMES CLEAR F ROM BALANCE SHEET WHICH IS PLACED AT PAGE 37 OF THE PAP ER BOOK WHERE THIS AMOUNT IS SHOWN OUTSTANDING. ONCE THE AM OUNT WAS OUTSTANDING THEN NO ADDITION CAN BE MADE WHEN THE S AME WAS RECEIVED BACK BECAUSE THEN IT CANNOT BE SAID TO BE A FRESH CREDIT AND ACCORDINGLY WE SET ASIDE THE ORDER OF TH E LD. CIT(A) AND DELETE THIS ADDITION ALSO. 190 IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO . 1168/CHD/2012 IS PARTLY ALLOWED. ITA NO. 1187/CHD/2012 A.Y 2004-05 REVENUE 191 IN THIS APPEAL THE REVENUE HAS RAISED FOLLOWING GROUNDS: (I) WHETHER THE LD. CIT(A) IS JUSTIFIED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.2674000/- ON ACCOUNT OF GIFT REC EIVED FROM SH. S.P. SINGH WHEN ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE GIFT ? (II) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE CIT(A) WAS JUSTIFIED IN ACCEPTING THE GENUINENESS OF A GIFT FR OM NON RESIDENT INDIAN (NRI) BROTHER OF THE ASSESSEE, IN TOTAL DISREGARD T O THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. P R GANAPATHY (2012- TIOL-76-SC-IT) THAT THE ASSESSEE HAS TO SHOW ADEQUA CY OF FUNDS IN THE HANDS OF FOREIGN DONOR FOR AFORESAID GIFT DONATION ? (III) WHETHER ON FACTS OF THE CASE ADVERSE AND REBU TTALBE PRESUMPTION SHOULD HAVE BEEN DRAWN ABOUT GENUINENESS OF THE GIF T WHEN THE ASSESSEE OVER A PERIOD OF SEVEN ASSESSMENT YEARS HA S RECEIVED A TOTAL SUM OF RS. 48648199/- CRORES AS GIFT AND ANOTHER SU M OF RS. 9480000/- AS LOAN ? (IV) WHETHER THE LD. CIT(A) ON FACTS AND CIRCUMSTAN CES OF THIS IS JUSTIFIED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS. 1,00,000/- U/S 68 ON ACCOUNT OF ALLEGED UNEXPLAINED CASH CREDIT FR OM SHRI SURINDER PAL SINGH? (V.) WHETHER THE LD. CIT(A) IS JUSTIFIED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS. 196,011/- ON ACCOUNT OF EXP ENSES ON INTEREST PAID ON LOAN AGAINST FDR CLAIMED AGAINST INTEREST I NCOME FROM OTHER SORUCES IN VIOLATION OF SECTIOHN 57(III)? 70 192 GROUND NO. 1 TO 4 AFTER HEARING BOTH THE PART IES WE FIND THAT THE ISSUES RAISED THROUGH THESE GROUNDS ARE ID ENTICAL TO THE ISSUES RAISED BY THE REVENUE IN ITA NO. 1193/CH D/2012 IN CASE OF LATE SHRI PRITAM SINGH WHICH WE HAVE ADJUDI CATED IN ABOVE PARAS. SINCE THE FACTS OF THE CASE AND THE C ONTENTIONS OF BOTH THE PARTIES ARE IDENTICAL TO THE ISSUES RAI SED IN ITA NO. 1193/CHD/2012 FOR ASSESSMENT YEAR 2004-05, FOLLOWI NG THAT ORDER WE HAVE DECIDE THESE ISSUES AGAINST THE REVEN UE. 193 GROUND NO. 5 AFTER HEARING BOTH THE PARTIES W E FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICE NOTICED THAT THE ASSESSEE HAS CLAIMED INTEREST EXPENSES AMO UNTING TO RS. 196011/- AGAINST THE INCOME FROM INTEREST ON FD R. HE HAS OBSERVED THAT INTEREST WAS NOT PAID FOR EARNING INT EREST AND ACCORDINGLY QUERY WAS RAISED IN THIS REGARD. NO RE PLY WAS GIVEN AND THEREFORE A SUM OF RS. 196011/- WAS ADDED TO THE INCOME OF THE ASSESSEE. 194 ON APPEAL BEFORE THE LD. CIT(A) IT WAS MAINLY S UBMITTED THAT INTEREST ON FDR RELATES TO PRITAM SINGH AND SO NS PROPRIETARY CONCERN WHICH WAS DOING BUSINESS OF CIV IL CONSTRUCTION. THE FDRS WERE PURCHASED FROM BUSINES S FUNDS FOR OBTAINING BANK GUARANTEE FOR EXECUTION OF CONTR ACT. NO FDR WAS PURCHASED DURING THE YEAR. THE INTEREST ON FDR WAS DECLARED AS INCOME OF BUSINESS WHICH HAS BEEN ACCEP TED BY THE ASSESSING OFFICER. THEREFORE INTEREST PAID AGA INST LOAN IS REQUIRED TO BE NETTED OUT AND IN THIS REGARD RELIAN CE WAS PALCED ON THE DECISION OF HONBLE SUPREME COURT IN CASE OF ACG ASSOCIATED CAPSULES PVT LTD. VS. CIT, 343 ITR 89.( S.C). 195 THE LD. CIT(A) ACCEPTED THIS CONTENTION AND DEL ETED THE ADDITION. 71 196 BEFORE US, THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) WERE REITERATED. IT WAS FURTHER SUBMITTED THAT INC OME WAS RETURNED AS BUSINESS INCOME AND IN THIS REGARD REFE RENCE WAS MADE TO COMPUTATION OF INCOME (COPY PLACED AT PAGE 14 & 15 OF PAPER BOOK). HE ALSO REFERRED TO PG 48 TO 61 AND P OINTED OUT THAT IN THIS YEAR THERE WAS NO BUSINESS WHICH BECOM E CLEAR FROM COPY OF PROFIT AND LOSS ACCOUNT (PG 48 OF PAPE R BOOK). THE TOTAL FDR WERE FOR RS. 41.63 LAKHS AND LOANS FR OM FDR IS 26.05 LAKHS. ASSESSEES OWN CAPITAL WAS RS. 27.25 LAKHS. ALL THE FDRS ARE MADE FROM EARLIER YEARS. THESE FDRS W ERE PURCHASED FOR COMMERCIAL PURPOSES I.E. FOR OBTAININ G BANK GUARANTEE ETC. AND THE LOAN AGAINST FDRS WAS USED F OR CONSTRUCTION BUSINESS. THUS CLEARLY THE INTEREST O N FDRS WAS BUSINESS INCOME AGAINST WHICH INTEREST PAID, IF ANY , HAS TO BE ALLOWED IN THE ABSENCE OF ANY BUSINESS RECEIPTS DUR ING THE YEAR. HE AGAIN RELIED ON THE DECISION OF ACG ASSOC IATED CAPSULES PVT LTD. VS. CIT (SUPRA) AND CIT VS. SHRI RAM HONDA POWER EQUIP, 289 ITR 475 (DELHI). 197 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CAR EFULLY AND FIND THAT ADMITTEDLY THE INCOME FROM INTEREST ON FD R WAS RETURNED AS INCOME FROM BUSINESS AND HAS ALSO BEEN ASSESSED AS INCOME FROM BUSINESS. FURTHER FDRS WERE PURCHAS ED FOR THE PURPOSE OF OBTAINING BANK GUARANTEE ETC. FOR CO NSTRUCTION BUSINESS I.E. AGAINST BUSINESS PURPOSES. IF ANY LO AN HAS BEEN TAKEN AGAINST THESE FDRS FOR BUSINESS PURPOSES THEN SUCH EXPENDITURE HAS TO BE ALLOWED. SINCE THERE WERE NO BUSINESS RECEIPTS IN THIS PARTICULAR YEAR I.E. WHY THE ASSES SING OFFICER HAS NOT ACCEPTED THIS CONTENTION. BUT WE ARE OF THE OPINION THAT 72 LOAN WAS OBTAINED FOR BUSINESS PURPOSES SUCH INTERE ST HAS TO BE ALLOWED. ACCORDINGLY WE CONFIRM THE ORDER OF THE LD. CIT(A). 198 IN THE RESULT, REVENUE APPEAL IN ITA NO. 1187/C HD/2012 IS DISMISSED. ITA NO. 1188/CHD/2012 A.Y 2005-06 REVENUE 199 IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLO WING GROUNDS: (I) WHETHER THE LD. CIT(A) IS JUSTIFIED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS 1490000/- ON ACCOUNT OF GIFT RECEIVED FROM SH. S.P. SINGH WHEN ASSESSEE FAILED TO PROVE T HE GENUINENESS OF THE GIFT ? (II) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE CIT(A) WAS JUSTIFIED IN ACCEPTING THE GENUINENESS OF A GIFT FR OM NON RESIDENT INDIAN (NRI) BROTHER OF THE ASSESSEE, IN TOTAL DISR EGARD TO THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. P R GANAPATHY (2012-TIOL-76-SC-IT) THAT THE ASSESSEE HAS TO SHOW ADEQUACY OF FUNDS IN THE HANDS OF FOREIGN DONOR FOR AFORESAID GIFT DONATION ? (III) WHETHER ON FACTS OF THE CASE ADVERSE AND REBU TTALBE PRESUMPTION SHOULD HAVE BEEN DRAWN ABOUT GENUINENES S OF THE GIFT WHEN THE ASSESSEE OVER A PERIOD OF SEVEN ASSES SMENT YEARS HAS RECEIVED A TOTAL SUM OF RS. 48648199/- CRORES A S GIFT AND ANOTHER SUM OF RS. 9480000/- AS LOAN ? (IV) WHETHER THE LD. CIT(A) IS JUSTIFIED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS. 193,146/- ON ACCOU NT OF EXPENSES ON INTEREST PAID ON LOAN AGAINST FDR CLAIMED AGAINS T INTEREST INCOME FROM OTHER SOURCES IN VIOLATION OF SECTION 5 7(III)? 200 GROUNDS NO. 1 TO 3 AFTER HEARING BOTH THE PAR TIES WE FIND THAT THE ISSUES RAISED THROUGH THESE GROUNDS A RE IDENTICAL TO THE ISSUES RAISED IN ITA NO. 1193/CHD/2012. SIN CE THE FACTS OF THE CASE AND THE CONTENTIONS OF BOTH THE PARTIES ARE IDENTICAL TO THE ISSUES RAISED IN ITA NO. 1193/CHD/2012 FOR A SSESSMENT YEAR 2004-05, FOLLOWING THAT ORDER WE HAVE DECIDE THESE ISSUES AGAINST THE REVENUE. 201 GROUND NO. 4 THIS ISSUE IS IDENTICAL TO THE I SSUE RAISED IN GROUND NO. 5 BY THE REVENUE IN ITA NO. 1187/CHD/ 2012, A.Y 2004-05 WHICH HAS BEEN ADJUDICATED BY AND FOLLOWING THE SAME WE DECIDE THE ISSUE AGAINST THE REVENUE. 73 202 IN THE RESULT APPEAL OF THE REVENUE IN ITA NO. 1188/CHD/2012 IS DISMISSED. 203 IN THE RESULT, ALL THE APPEALS OF ASSESSEE AND REVENUE ARE DISPOSED OFF IN THE FOLLOWING MANNER: ITA NO. NAME OF THE PARTY RESULT 1177/CHD/2012 ASSESSEE PARTLY ALLOWED 1173/CHD/2012 ASSESSEE PARTLY ALLOWED 1174/CHD/2012 ASSESSEE PARTLY ALLOWED 1175/CHD/2012 ASSESSEE PARTLY ALLOWED 1176/CHD/2012 ASSESSEE PARTLY ALLOWED 1193/CHD/2012 REVENUE DISMISSED 1194/CHD/2012 REVENUE DISMISSED 1195/CHD/2012 REVENUE DISMISSED 1196/CHD/2012 REVENUE DISMISSED 1197/CHD/2012 REVENUE DISMISSED 1198/CHD/2012 REVENUE DISMISSED 1166/CHD/2012 ASSESSEE PARTLY ALLOWED 1167/CHD/2012 ASSESSEE PARTLY ALLOWED 1168/CHD/2012 ASSESSEE PARTLY ALLOWED 1187/CHD/2012 REVENUE DISMISSED 1188/CHD/2012 REVENUE DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 6.6.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 6.6.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR