Smt. Kamini Sharma, Solan V. ITO, Baddi

ITA 1365/CHANDI/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68562 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 21-10-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 30-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Depreciation; Income from undisclosed sources; Deemed to accrue or arise in india
• Section: 143(3); 68; 145; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS. 1365 TO 1369/CHD/2010 A.YS. : 2002-03 TO 200 6-07 SMT.KAMINI SHARMA, VS THE INCOME TAX OFFICER, M/S B.L.CENTRAL PUBLIC SCHOOL, BADDI, H.B. COLONY, (H.P.). BADDI, DISTT. SOLAN (HP) PAN NO.ALJPS-8597B (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI HARRY RIKHY RESPONDENT BY : SHRI AKHILESH GUPTA DATE OF HEARING : 21.10.2013 DATE OF PRONOUNCEMENT : 07.11.2013 O R D E R PER SUSHMA CHOWLA, J.M. THE PRESENT BUNCH OF APPEALS ARE DIRECTED AGAINST T HE ORDER OF THE CIT(APPEALS) DATED 27.09.2010 RELATING TO ASSES SMENT YEARS 2002-03 TO 2006-07 RESPECTIVELY AGAINST THE ORDER P ASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 ( 'THE A CT' FOR SHORT). ALL THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPO SED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA 1365/CHD/2010 :: A.Y. 2002-03 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THAT THE ORDER OF THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS), SHIMLA IS DEFECTIVE BOTH IN LAW AND FACTS OF THE CA SE. 2 2. THAT THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS), SHIMLA IS UNJUSTIFIED IN UPHOLDING THE ORDER OF THE LD. ASSES SING OFFICER PASSED U/S 143(3) READ WITH SECTION 148 OF THE INCOME TAX ACT, 1961 WHICH IS BAD IN LAW IN AS MUCH AS THE ASSESSMENT HAS BEEN FR AMED WITHOUT ISSUING NOTICE U/S 143(2) AND ALSO NO RETURN HAVING BEEN FILED IN RESPONSE TO NOTICE ISSUED U/S 148. THE ASSESSMENT I S THUS BAD IN LAW AND DESERVES TO BE QUASHED. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) IS UNJUSTIFIED IN UPHOLDING THE ADDITION OF RS.1,68,50 0/- ON ACCOUNT OF TREATING THE UNSECURED LOAN AS DEEMED INCOME OF THE ASSESSEE U/S 68 OF THE INCOME TAX ACT, 1961. THIS ADDITION MADE IS ILL EGAL AND UNCALLED FOR WHICH DESERVES TO BE DELETED. 4. ANY OTHER GROUND WHICH MAY BE TAKEN WITH THE PERMIS SION OF THE HON'BLE TRIBUNAL AT THE TIME OF HEARING. 3. THE GROUND NO. 1 RAISED BY THE ASSESSEE IS GENER AL IN NATURE AND HENCE, THE SAME IS DISMISSED. 4. THE GROUND NO. 2 RAISED BY THE ASSESSEE IS NOT P RESSED AND HENCE THE SAME IS ALSO DISMISSED. 5. THE ISSUE IN GROUND NO. 3 RAISED BY THE ASSESSEE IS AGAINST THE ADDITION MADE UNDER SECTION 68 OF THE INCOME TA X ACT AT RS. 168,500/-. 6. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT D URING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD RAISED SEVERA L UNSECURED LOANS FROM DIFFERENT PERSONS AND THE ASSESSEE WAS A SKED TO EXPLAIN WITH DOCUMENTARY EVIDENCE THE SOURCE AND CREDIT WOR THINESS OF THE LENDERS. THE ASSESSEE HAD RECEIVED A SUM OF RS. 19 ,500/- FROM ONE MRS. MEENAKSHI, RS. 19,500/- FROM MS. TANU TYAGI, R S. 19,500/- FROM MRS. RAJESH KUMARI AND A SUM OF RS.1,10,000/- FROM MRS. YASHODA SHARMA. ALL THE THREE LENDERS WERE SCHOOL TEACHERS, WORKING IN THE SCHOOL OWNED BY THE ASSESSEE AND WER E DRAWING PELTRY SALARY RANGING BETWEEN RS. 1700/- TO RS. 210 0/- PER MONTH RESPECTIVELY. THE EXPLANATION OF THE ASSESSEE WAS THAT THE SAID 3 PERSONS WERE ALSO DOING TUITION WORK AND THAT WAS T HE SOURCE OF ADVANCING THE LOANS. THE FOURTH LOAN WAS CLAIMED TO HAVE BEEN RECEIVED FROM THE MOTHER OF THE ASSESSEE. THE ASSE SSING OFFICER, REJECTING THE EXPLANATION OF THE ASSESSEE MADE AN A DDITION OFRS. 168,500/- UNDER SECTION 68 OF THE INCOME TAX ACT. 7. BEFORE THE CIT(APPEALS), THE CLAIM OF THE ASSESS EE WAS THAT THREE LOANS I.E. FROM SMT. MEENAKSHI, SMT. TANU TYA GI AND SMT. RAJESH KUMARI WERE RECEIVED IN CASH. HOWEVER, THE LOAN FROM SMT. YASHODA SHARMA WAS TRANSFERRED FROM HER BANK A CCOUNT WITH PUNJAB NATIONAL BANK, SOLAN. HOWEVER, THE ASSESSEE WAS UNABLE TO PRODUCE THE COPY OF SAID BANK ACCOUNT. THE CIT(APP EALS) ASKED THE ASSESSING OFFICER TO RECORD THE STATEMENT OF TH E CREDITORS AND THEIR CREDIT WORTHINESS. THE STATEMENT OF TWO OF TH E LADIES I.E. SMT. TANU TYAGI AND SMT. RAJESH KUMARI WERE RECORDED, WH O DURING THE YEAR WERE EARNING SALARY OF RS. 2700/- AND RS. 1800 /- EACH. BOTH THE LADIES HAD NO BANK ACCOUNT AND LOAN WAS ADVANCE D IN CASH. REJECTING THE EXPLANATION OF THE ASSESSEE IN RESPEC T OF THE CREDIT WORTHINESS OF THE SAID PERSONS, THE CIT(APPEALS) CO NFIRMED THE ADDITION ON ACCOUNT OF THE SAID LOANS RECEIVED IN C ASH. CERTAIN DISCREPANCIES WERE FOUND IN THE STATEMENT OF AFFAIR S OF SMT. YASHODA SHARMA AND THE EXPLANATION FILED BY THE ASS ESSEE WAS REJECTED. FURTHER, MRS. MEENAKSHI, ANOTHER CASH CR EDIT OR, WHO HAD ADVANCED RS. 19,500/ COULD NOT BE PRODUCED AND HENC E, IT WAS HELD BY CIT(APPEALS) THAT THE IDENTITY AND THE CREDIT WO RTHINESS AND GENUINENESS OF THE TRANSACTIONS COULD NOT BE ESTABL ISHED, RESULTING IN CONFIRMATION OF ADDITION OF RS. 168,500/-. 4 8. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF C IT(APPEALS). THE LD. AR FOR THE ASSESSEE POINTED OUT THAT DURING THE COURSE OF REMAND PROCEEDINGS, THE STATEMENT OF THE PERSONS WE RE RECORDED AND THEY ADMITTED TO HAVING ADVANCED THE SAID LOANS TO THE ASSESSEE. IN VIEW THEREOF, LD. AR FOR THE ASSESSEE SUBMITTED THAT THERE WAS NO MERIT IN ANY ADDITION ON THAT ACCOUNT. IN RESPECT OF THE THIRD CASH CREDITOR, IT WAS POINTED OUT BY THE LD. AR FOR THE ASSESSEE THAT THE SAID PERSON WAS A TEACHER IN THE SCHOOL WHO HAD LEFT AND THE ASSESSEE WAS UNABLE TO PRODUCE THE SAI D PERSON. FURTHER, LD. AR FOR THE ASSESSEE POINTED OUT THAT T HE LOAN RECEIVED FROM THE MOTHER OF THE ASSESSEE WAS THROUGH BANKING CHANNELS AND THE SAME MERITS TO BE ACCEPTED. 9. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON TH E ORDER OF THE CIT(APPEALS). 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ONUS IS UPON THE ASSESSEE TO EXPLAIN EACH AND E VERY CREDIT ENTRY IN THE BANK ACCOUNT OR BOOKS OF ACCOUNT AND W HERE THE ASSESSEE IS UNABLE TO PROVE THE SAME, PROVISIONS OF SECTION 68 ARE ATTRACTED. IT IS FOR THE ASSESSEE TO ESTABLISH THE IDENTITY AND CREDIT WORTHINESS OF THE CREDITOR IN ORDER TO PROVE THE GE NUINENESS OF THE TRANSACTIONS. THE ASSESSEE IN THE PRESENT SET OF F ACTS MAY HAVE ESTABLISHED THE IDENTITY OF THE CREDITOR BUT HAS MI SERABLY FAILED TO ESTABLISH THE CREDIT WORTHINESS OF THE PERSONS WHO HAD MADE THE SAID CASH ADVANCES TO THE ASSESSEE. THE ASSESSEE W AS RUNNING A SCHOOL AND THE LOAN CREDITORS OF THE ASSESSEE WERE EMPLOYED IN THE SCHOOL OF THE ASSESSEE WHO WERE EARNING SALARIES RA NGING BETWEEN RS. 1700/- TO RS. 2700/- PER MONTH FROM WHOM, IN TU RN CASH CREDITS OF RS. 19,500/- EACH HAD BEEN RECEIVED. IN THE TOTA LITY OF THE FACTS 5 AND CIRCUMSTANCES OF THE CASE, WE FIND NO MERIT IN THE CLAIM OF THE ASSESSEE AND IN THE ABSENCE OF THE ASSESSEE HAVING ESTABLISHED THE CREDIT WORTHINESS OF THE SAID CASH LOAN CREDITORS, THE GENUINENESS OF THE TRANSACTIONS NOT BEING PROVED, MERITS ADDITI ON UNDER SECTION 68 OF THE INCOME TAX ACT. 11. ANOTHER SET OF ADDITION WAS ON ACCOUNT OF THE L OAN RECEIVED BY THE ASSESSEE FROM HER MOTHER SMT. YASHODA SHARMA OF RS.1,10,000/-. THE SAID AMOUNT HAD BEEN RECEIVED B Y CHEQUE BY THE ASSESSEE FROM HER MOTHER. EXPLANATION IN RESPE CT OF VARIOUS AMOUNTS RECEIVED FROM THE MOTHER OF THE ASSESSEE HA VE BEEN FILED BY THE ASSESSEE BUT COMPLETE INFORMATION COULD NOT BE FILED BY THE ASSESSEE. HOWEVER, IN THE INTEREST OF JUSTICE, WE DEEM IT FIT TO RESTORE THIS ISSUE BACK TO FILE OF ASSESSING OFFICE R, WHO SHALL DECIDE THE SAME AFTER CONSIDERING THE EVIDENCE AVAI LABLE WITH THE ASSESSEE. ITA NO. 1366/CHD/2010 :: A.Y. 2003-04 12. THE GROUND NO. 1 RAISED BY THE ASSESSEE IS GENE RAL AND THE SAME IS DISMISSED. 13. THE GROUND NO. 2 & 3 RAISED BY THE ASSESSEE AG AINST RE- OPENING OF ASSESSMENT UNDER SECTION 148 OF THE ACT WERE NOT PRESSED AND HENCE, THE SAME ARE DISMISSED AS NOT PR ESSED. 14. THE GROUND NO. 4 RAISED BY THE ASSESSEE READS A S UNDER : THAT THE LD. CIT(APPEALS) SHIMLA IS UNJUSTIFIED IN UPHOLDING THE ADDITION OF RS. 2,65,082/- ON ACCOUNT OF UNEXPLAINED INVESTMENT DUE TO DIFFERENCE IN VALUATI ON OF THE SCHOOL BUILDING. THIS ADDITION MADE IS UNCALLE D FOR AND DESERVES TO BE DELETED AS ASSESSEE'S BOOKS OF ACCOUNT HAVE NOT BEEN REJECTED. 6 15. THE GROUND NO. 4 RAISED BY THE ASSESSEE IS AGAI NST THE ADDITION OF RS. 2,65,082/-. THE BRIEF FACTS RELATI NG TO THE ISSUE ARE THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSES SEE HAD CONSTRUCTED THE SCHOOL BUILDING AND HAD SHOWN THE I NVESTMENT AT RS. 12,25,933/-. THE ASSESSING OFFICER REFERRED TH E CASE OF THE ASSESSEE TO THE VALUATION CELL, PATIALA FOR ESTIMAT ION OF COST OF CONSTRUCTION, WHO IN TURN ESTIMATED THE SAME AT RS. 28,01,000/- AS AGAINST RS. 23,03,020/- SHOWN BY THE ASSESSEE. FOR THE YEAR UNDER CONSIDERATION, THE COST OF INVESTMENT WAS ESTIMATED AT RS. 14,91,015/-. THE ASSESSEE WAS SHOW CAUSED TO EXPLA IN WHY THE DIFFERENCE OF RS. 2,65,082/- SHOULD NOT BE DEEMED T O BE HER INCOME UNDER SECTION 69B OF THE ACT. THE EXPLANATION OF T HE ASSESSEE WAS THAT THE OVERALL DIFFERENCE IN VALUATION OF THE PRO PERTY WAS LESS THAN 10% AND THEREFORE, THE SAME SHOULD BE IGNORED. FURTHER, IT WAS EXPLAINED BY THE ASSESSEE THAT THE VALUATION OF FICER HAD APPLIED CPWD RATES WHEREAS THE STATE PWD RATES SHOU LD HAVE BEEN APPLIED. THE ASSESSING OFFICER, REJECTING THE EXPL ANATION OF THE ASSESSEE MADE AN ADDITION OF RS. 2,65,082/-. 16. THE CIT(APPEALS) UPHELD THE SAID ADDITION. 17. THE LD. AR FOR THE ASSESSEE REFERRED TO THE VAL UATION REPORT OF THE DVO PLACED AT PAGES 25 TO 34 OF THE PAPER BO OK AND POINTED OUT THAT THE ESTIMATION OF VALUATION OF COST OF CON STRUCTION MADE BY THE DVO WAS FOR THE PERIOD UPTO 31.3.2007 WHEREAS T HE INSPECTION OF THE PROPERTY WAS CARRIED OUT ON 25.10.2007. IT WAS FURTHER POINTED OUT BY THE LD. AR FOR THE ASSESSEE THAT THE PERUSAL OF THE DETAILS AT PAGE 30 OF THE PAPER BOOK REFLECTS THAT YEARWISE, THERE WAS A MARGINAL DIFFERENCE WHICH WAS ATTRIBUTABLE TO THE CPWD RATES APPLIED BY THE ASSESSEE AND ONCE THE BENEFIT OF 10% 7 DIFFERENCE IN THE VALUATION IS ALLOWED, THERE WOULD BE NO DIFFERENCE FROM YEAR TO YEAR. 18. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON T HE ORDER OF THE AUTHORITIES BELOW. 19. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE HAD CONSTRUCTED THE SCHOOL BUILDING OV ER A PERIOD OF TIME. DURING THE YEAR UNDER CONSIDERATION AND HAD DECLARED INVESTMENT IN COST OF CONSTRUCTION OF THE SCHOOL BU ILDING AT RS. 12,25,933/-. THE ASSESSING OFFICER HAD REFERRED TH E ISSUE OF VALUATION OF THE SAID BUILDING TO THE DVO, WHO IN T URN HAD ESTIMATED THE TOTAL COST OF CONSTRUCTION AT RS. 28, 01,000/- AS AGAINST RS. 23,03,020/- SHOWN BY THE ASSESSEE. THE FIRST ISSUE RAISED BY THE ASSESSEE WAS THAT THE VALUE DECLARED BY THE ASSESSEE HAS BEEN ADOPTED FOR THE FINANCIAL YEAR 2003-04 TO 2007-08 WHEREAS INSPECTION OF THE PROPERTY TOOK PLACE AFTER THE CLOSE OF THE FINANCIAL YEAR 2006-07 I.E. ON 25.10.2007 UNDER WHI CH, CERTAIN MORE ADDITIONS WERE MADE TO THE BUILDING. THE SECO ND PLEA RAISED BY THE ASSESSEE WAS THAT THE BENEFIT OF THE RATES A PPLIED BY THE DVO AND THOSE TO BE APPLIED I.E. STATE PWD RATES AS AGAINST CPWD RATES HAVE NOT BEEN ALLOWED TO THE ASSESSEE. WE FI ND MERIT IN BOTH THE PLEAS OF THE ASSESSEE AND ARE OF THE VIEW THAT ONCE THE SAME ARE APPLIED, THE DIFFERENCE BETWEEN THE VALUE ESTIMATED BY THE DVO AND THE VALUE DECLARED BY THE ASSESSEE WOULD BE MAR GINAL WHICH IN- TURN WOULD BE COVERED BY THE CONCEPT THAT WHERE THE DIFFERENCE BETWEEN THE VALUE DECLARED BY THE ASSESSEE AND THE VALUE ESTIMATED BY THE DVO IS LESS THAN 10%, THE SAME SHOULD BE IGN ORED. 8 20. IN THE ABOVESAID FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO MERIT IN THE ADDITION OF RS. 265,082/- AND THE A SSESSING OFFICER IS DIRECTED TO DELETE THE SAME. GROUND NO. 4 RAISED BY THE ASSESSEE IS THUS, ALLOWED. 21. THE GROUND NO. 5 RAISED BY THE ASSESSEE READS A S UNDER : THAT THE LD. CIT(APPEALS) SHIMLA IS UNJUSTIFIED IN UPHOLDING THE ADDITION OF RS. 92,000/- ON ACCOUNT O F SOURCE OF INVESTMENT IN CAPITAL AND TREATING IT AS DEEMED INCOME. THIS ADDITION MADE IS UNCALLED FOR AND DESE RVES TO BE DELETED. 22. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE HAD MADE AN ADDITION OF RS. 92,000/- TO HER CAPITAL ACC OUNT. THE EXPLANATION OF THE ASSESSEE VIS--VIS THE SOURCE OF INVESTMENT WAS THAT SHE WAS GETTING RENT FROM RESIDENTIAL BUILDING TO THE TUNE OF RS. 66,000/- PER ANNUM AND THE BALANCE WAS MANAGED BY INTERNAL ACCRUALS AND PERSONAL SAVINGS. THE ASSESSING OFFIC ER NOTED THAT AS PER LEDGER ACCOUNT, THE SUM OF RS. 52,000/- WAS INT RODUCED BY CHEQUE ON 30.1.2003 AND RS. 40,000/- WAS INTRODUCED BY CHEQUE ON 20.2.2003 WHEREAS THE RENT WAS BEING RECEIVED BY TH E ASSESSEE ON MONTHLY BASIS. REJECTING THE CLAIM OF THE ASSESSEE , THE ASSESSING OFFICER MADE AN ADDITION OF RS. 92,000/- AS INCOME FROM UNDISCLOSED SOURCES. THE CIT(APPEALS) UPHELD THE SA ID ADDITION OF RS. 92,000/-. 23. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT TH E SAID ACCOUNTS WERE RECEIVED VIDE CHEQUES WHICH IN TURN WERE OUT O F THE LOAN ACCOUNT RAISED BY THE ASSESSEE FROM STATE BANK OF P ATIALA. THE ASSESSEE CLAIMS THAT IT HAD RAISED HOME LOAN AND OU T OF THAT HOME LOAN, THE SAID SUM OF RS. 40,000/- WAS WITHDRAWN WH EREAS THE OTHER ADDITION OF RS. 52,000/- WAS CASH RECEIVED AGAINST CHEQUES. 9 24. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. WE FIND NO MERIT IN THE PLEA OF THE ASSESSEE IN THE ABSENCE OF COMPLETE EVIDENCE HAVING BEEN PRODUCED BY THE ASSES SEE. THE ASSESSEE HAD RAISED HOME LOAN WHICH ADMITTEDLY IS F OR THE PURPOSE OF INVESTMENT IN THE HOME AND MERE WITHDRAWAL FROM THE SAID ACCOUNT IN CASH DOES NOT ESTABLISH THE SOURCE OF TH E CAPITAL INTRODUCED BY THE ASSESSEE IN HER CAPITAL ACCOUNT. IN THE ABSENCE OF THE ASSESSEE HAVING ESTABLISHED THE SOURCE OF RS . 92,000/- INTRODUCED BY HER DURING THE YEAR UNDER CONSIDERATI ON BY WAY OF CAPITAL TO HER CAPITAL ACCOUNT, WE FIND NO MERIT IN THE EXPLANATION OF THE ASSESSEE AND THE SAME IS REJECTED. UPHOLDIN G THE ADDITION OF RS. 92,000/-, WE DISMISS GROUND NO. 4 RAISED BY THE ASSESSEE. ITA 1367/CHD/2010 :: A.Y. 2004-05 25. THE GROUND NO. 1 RAISED BY THE ASSESSEE IS GENE RAL IN NATURE AND IS DISMISSED. 26. THE GROUND NOS. 2 & 3 ARE NOT PRESSED BY THE AS SESSEE AND THE SAME ARE DISMISSED AS NOT PRESSED. 27. GROUND NO. 4 RAISED BY THE ASSESSEE READS AS UN DER : THAT THE LD. CIT(APPEALS) SHIMLA IS UNJUSTIFIED IN UPHOLDING THE ADDITION OF RS. 22,837/- ON ACCOUNT O F DIFFERENCE IN VALUATION OF THE SCHOOL BUILDING. THI S ADDITION MADE IS UNCALLED FOR AND DESERVES TO BE DE LETED. 28. THE ISSUE IN GROUND NO. 4 RAISED BY THE ASSESSE E IS IDENTICAL TO THE ISSUE RAISED VIDE GROUND NO. 4 IN ASSESSMENT YEAR 2003-04 I.E. IN RESPECT OF ADDITION MADE ON ACCOUNT OF DIFF ERENCE IN VALUATION OF SCHOOL BUILDING AS SHOWN BY THE ASSESS EE AND AS ESTIMATED BY THE DVO. IN LINE WITH OUR OBSERVATION S IN THE PARAS 10 HEREIN ABOVE, WE FIND NO MERIT IN THE AFORESAID ADD ITION OF RS.22,837/- AND THE GROUND NO. 4 RAISED BY THE ASSE SSEE IS ALLOWED. ITA 1368/CHD/2010 :: A.Y. 2005-06 29. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL : 1. THAT THE ORDER OF THE LD. CIT(APPEALS) SHIMLA IS DE FECTED BOTH IN LAW AND FACTS OF THE CASE. 2. THAT THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), SHIMLA UPHOLDING THE ORDER OF THE LEARNE D ASSESSING OFFICER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 IS UNJUSTIFI ED AND ILLEGAL IN AS MUCH AS THE ASSESSMENT HAS BEEN FRAMED ON THE BASIS OF NOTI CE ISSUED U/S 143(2) BEYOND A PERIOD OF 12 MONTHS IN CONTRAVENTION TO THE PROVI SIONS OF SECTION 143(2)(II) OF THE I.T. ACT. THE ORDER PASSED IS BAD IN LAW AND DESERVES TO BE QUASHED. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) IS UNJUSTIFIED IN UPHOLDING THE ADDITION OF RS. 10,47,428/- BASED UPO N ESTIMATE OF FEE PER STUDENT ON THE BASIS OF FEES CHARGED DURING THE F.Y . 2005-06. THIS ADDITION MADE IS UNCALLED FOR AND DESERVES TO BE DELETED AS ASSESSEEE'S BOOKS OF ACCOUNT HAVE NOT BEEN REJECTED AS PER THE PROVISION S OF SECTION 145 OF THE I.T. ACT. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) SHIMLA IS UNJUSTIFIED IN UPHOLDING THE ADDITION OF RS.L 1,27 4/- ON ACCOUNT OF SALE OF BOOKS. THIS ADDITION MADE IS UNCALLED FOR AND DESER VES TO BE DELETED 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) SHIMLA IS UNJUSTIFIED IN UPHOLDING THE ADDITION OF RS 30,000/ - ON ACCOUNT OF EXPENDITURE ON TOUR AND TRAVEL. THIS ADDITION MADE IS UNCALLED FOR AND DESERVES TO BE DELETED. 6. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) SHIMLA IS UNJUSTIFIED IN UPHOLDING THE ADDITION OF RS. 83, 8 807- ON ACCOUNT OF EXCESS CLAIM OF EXPENDITURE OF SALARY AND WAGES. TH IS ADDITION MADE IS UNCALLED FOR AND DESERVES TO BE DELETED. 7. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S), SHIMLA IS UNJUSTIFIED IN UPHOLDING THE ADDITION OF RS. 50, 00 07- ON ACCOUNT OF TREATING THE UNSECURED LOAN AS DEEMED INCOME OF THE ASSESSEE U/S 68 OF THE INCOME TAX ACT, 1961 . THIS ADDITION MADE IS UNCALLED FOR AND DESERVES TO BE DELETED. 8. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS), SHIMLA IS UNJUSTIFIED IN UPHOLDING THE ADDITION OF RS.L,16,2 08/- ON ACCOUNT OF UNEXPLAINED INVESTMENTS DUE TO DIFFERENCE IN VALUAT ION OF THE SCHOOL BUILDING. THIS ADDITION MADE IS UNCALLED FOR AND DE SERVES TO BE DELETED AS ASSESSEE'S BOOKS OF ACCOUNT HAVE NOT BEEN REJECT ED. 9. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS). SHIMLA IS UNJUSTIFIED IN UPHOLDING THE ADDITION OF RS. 36.06 8/- ON ACCOUNT OF DEPRECIATION CLAIMED. THIS ADDITION MADE IS UNCALLE D FOR AND DESERVES TO BE DELETED. 11 30. THE GROUND NO. 1 RAISED BY THE ASSESSEE IS GENE RAL IN NATURE AND THE SAME IS DISMISSED. 31. THE GROUND NOS. 2 TO 5 AND 7 AND 9 ARE NOT PRES SED BY THE ASSESSEE AND HENCE, THE SAME ARE DISMISSED AS NOT P RESSED. 32. THE ISSUE IN GROUND NO. 8 RAISED BY THE ASSESSE E IS IDENTICAL TO THE ISSUE RAISED VIDE GROUND NO. 4 FOR ASSESSMEN T YEAR 2003-04 I.E. IN RESPECT OF ADDITION MADE ON ACCOUNT OF DIFF ERENCE IN VALUATION OF SCHOOL BUILDING AS SHOWN BY THE ASSESS EE AND AS ESTIMATED BY THE DVO. IN LINE WITH OUR OBSERVATION S IN THE PARAS HEREIN ABOVE, WE FIND NO MERIT IN THE AFORESAID ADD ITION OF RS.116,208/- AND THE GROUND NO. 8 RAISED BY THE ASS ESSEE IS ALLOWED. 33. THE ISSUE IN GROUND NO. 6 RAISED BY THE ASSESSE E IS AGAINST ADDITION OF RS. 83,880/-. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE WAS RUNNING A SCHOOL AND HAD CLAI MED EXPENDITURE ON SALARY AND WAGES TO THE TUNE OF RS. 5,82,728/- B UT AS PER THE WAGES REGISTER, THE SAME TOTAL TO RS. 498,848/-. T HE EXPLANATION OF THE ASSESSEE WAS THAT THE EXCESS CLAIM OF EXPENSES WAS IN RELATION TO THE PAYMENT TO NON-REGULAR EMPLOYEES I.E. MUSIC TEACHER, KARATE TEACHER ETC. AS THE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE BEFORE THE ASSESSING OFFICER, SUM OF RS. 83,880/- BEING TH E EXCESS CLAIM OF EXPENDITURE WAS DISALLOWED BY THE ASSESSING OFFI CER. 34. THE CIT(APPEALS) UPHELD THE ORDER OF ASSESSING OFFICER. 35. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE BEFORE US HAS PLACED ON RECORD THE CER TIFICATES FROM THE MUSIC TEACHER AND THE OTHER PERSONS IN RELATION TO THE SAID 12 EXPENDITURE OF RS. 83,880/-. IN VIEW OF THE SMALLN ESS OF THE CLAIM, WE FIND NO MERIT IN SETTING ASIDE THE SAME FOR VERI FICATION TO THE ASSESSING OFFICER. HOWEVER, AN ESTIMATED DISALLOWA NCE OF RS. 30,000/- IS UPHELD IN ORDER TO PLUG ANY LEAKAGE OF REVENUE AND GROUND OF APPEAL NO. 6 IS THUS, PARTLY ALLOWED. ITA 1369/CHD/2010 : A.Y. 2006-07 36. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL : 1. THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), SHIMLA IS DEFECTIVE BOTH IN LAW AND FACTS OF THE CASE. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS), SHIMLA IS UNJUSTIFIED IN UPHOLDING THE ORDER OF THE LD. ASSES SING OFFICER AS THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE INCOME TA X ACT, 1961 IS BAD IN LAW AND NEEDS TO BE QUASHED AS PER THE CB DT GUIDELINES. 3 THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) IS UNJUSTIFIED IN UPHOLDING THE ADDITION OF RS. 1,80,264 /- MADE ON A CCOUNT OF FAILURE TO RECORD THE RECEIPTS. THIS ADDITION MADE IS UNCALLED FOR AN D DESERVES TO BE DELETED AS THIS ADDITION HAS BEEN MADE WITHOUT REJECTING THE B OOKS OF ACCOUNT OF THE ASSESSEE. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) IS UNJUSTIFIED IN UPHOLDING THE ADDITION IN UPHOLDING THE ADDITION OF RS. 14,326/- ON ACCOUNT OF DIFFERENCE IN VALUATION OF PROPERTY. THIS ADDITI ON MADE IS UNCALLED FOR AND DESERVES TO BE DELETED. 37. THE GROUND NO. 1 RAISED BY THE ASSESSEE IS GENE RAL IN NATURE AND THE SAME IS DISMISSED. 38. THE GROUND NOS. 2 & 3 ARE NOT PRESSED BY THE AS SESSEE AND HENCE, THE SAME ARE DISMISSED AS NOT PRESSED. 39. THE ISSUE IN GROUND NO. 4 RAISED BY THE ASSESSE E IS IDENTICAL TO THE ISSUE RAISED IN GROUND NO. 4 FOR ASSESSMENT YEAR 2003-04 I.E. IN RESPECT OF ADDITION MADE ON ACCOUNT OF DIFFERENC E IN VALUATION OF PROPERTY AS SHOWN BY THE ASSESSEE AND AS ESTIMAT ED BY THE DVO. 13 IN LINE WITH OUR OBSERVATIONS IN THE PARAS HEREIN A BOVE, WE FIND NO MERIT IN THE AFORESAID ADDITION OF RS.14,326/- AND THE GROUND NO. 4 RAISED BY THE ASSESSEE IS ALLOWED. 40. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF NOVEMBER, 2013. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 7 TH NOVEMBER, 2013 POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR BY ORDER ASSISTANT REGISTRAR, ITAT,