DCIT, New Delhi V. Sh. Ganga SIngh, New Delhi

ITA 1416/DEL/2013

• Counselvise Citation: 141620114 RSA 2013
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 08-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Keywords: Unexplained cash credit; Sale consideration of property below Jantri Value; Capital asset; Gift; Cost of acquisition; Corroborative evidences
• Section: 50C; 68; 69

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: C NEW DELHI BEFORE SHRI RAJPAL YADAV , JM AND SHRI T.S.KAPOOR, A.M. ITA NO: 1416 /DEL/2013 ASSESSMENT YEAR : - 200 9 - 10 DCIT, CIRCLE 32(1) VS. SH. GANGA SINGH NEW DELHI C/O MS. SEEMA SAHAI 180, DEFENCE COLONY NEW DELHI 110 024 PAN: AMJPS 6493 A A N D C.O. 102/DEL/2013 (IN ITA NO: 6002/DEL/2013 ) ASSESSMENT YEAR : - 2008 - 09 SH. GANGA SINGH, NEW DELHI VS. DCIT, CIR.32(1),NEW DELHI (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. SATPAL SINGH, SR.D.R. ASSESSEE BY : SH. P.C.YADAV, ADV. O R D E R PER RAJPAL YADAV , JUDICIAL MEMBER AGGRIEVED WITH THE ORDER OF LD.CIT(APPEALS) DATED 31 ST DECEMBER,2012 PASSED FOR THE AY 2009 - 10 THE REVENUE HAS COME UP IN APPEAL BEFORE US. ON RECEIPT OF NOTICE IN THE REVENUE S APPEAL THE ASSESSEE HAS FILED CROSS OBJECTION BEARING NO. C.O.102/DEL/2013. THE ISSUES TAKEN UP IN THE APPEAL AS WELL AS THE CROSS OBJECTION ARE INTER CONNECTED. THE ASSESSEE HAS TAKEN SIX GROUNDS IN THE CROSS OBJECTION. SIMILARLY THE REVENUE HAS TAKEN 9 GROUNDS IN ITS APPEAL. 2. IN BRIEF THE GRIEVANCE OF THE ASSESSEE IS TWO FOLD WHEREIN HE HAS PLEADED THAT THE LD.CIT(APPEALS) H AS ERRED IN NOT GIVING THE BENEFIT OF INDEXATION FOR THE PURPOSE OF COMPUTING CAPITAL GAIN IN RESPECT OF SALE OF TWO 2 PLOTS; AND (B) LD.CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF EXPENSES OF RS.3,37,000/ - . 2.1. THE GRIEVANCE OF THE REVENUE IS (A) THAT THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF LONG TERM CAPITAL GAIN OF RS.82 LAKHS; (B) LD.CIT(A) HAS ERRED IN DELETING ADDITION OF RS.25 LAKHS WHICH WAS MADE BY THE LD.AO U/S 69 OF THE INCOME TAX ACT . 3. WITH THE INSISTENCE OF LD. COUNSEL WE HAVE GONE THROUGH THE RECORD CAREFULLY. THE ASSESSEE IS AN INDIVIDUAL. HE HAS FILED HIS RETURN OF INCOME ELECTRONICALLY ON 27.3.2010 DECLARING AN INCOME OF RS.21,41,760/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND A NOTICE U /S 143(2) WAS ISSUED AND SERVED ON THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT REVEALED TO THE LD.AO THAT THE ASSESSEE HAS SOLD THREE PROPERTIES AND DECLARED LONG TERM CAPITAL GAIN OF RS.16,06,483/ - . THE COMPUTATION OF LONG TERM CAPITAL GAIN READ AS UNDER: COMPUTATION OF LONG TERM CAPITAL GAIN LONG TERM CAPITAL GAIN: AGRICULTURE LAND 2 1.1.2009 VALUE U/S 50C SALE CONSIDERATION RECEIVED SALE CONSIDERATION LESS: INDEXED COST MARKET VALUE AS ON 1.4.1981 F.Y. 1981 - 82 419300/100 X 582 RS.35,16,000/ - RS.35,16,000/ - RS.24,40,326/ - RS.35,16,000/ - 24,40,326/ - RS.10,75,674 / - PLOT 30.12.2008 VALUE U/S 50C SALE CONSIDERATION RECEIVED SALE CONSIDERATION LESS: INDEXED COST MARKET VALUE AS ON 1.4.1981 F.Y. 1981 - 82 21411/100X582 RS.5,20,000/ - RS.3,00,000/ - RS.1,24,612/ - RS.5,20,000/ - RS.1,24,612/ - RS.3,95,388/ - PLOT 30.12.2008 VALUE U/S 50C SALE CONSIDERATION RECEIVED SALE CONSIDERATION LESS: INDEXED COST RS.1,78,000/ - RS.1,50,000/ - RS.42,579/ - RS.1,78,000/ - 3 MARKET VALUE AS ON 1.4.1981 F.Y. 1981 - 82 21411/100X582 TOTAL LONG TERM CAPITAL GAIN RS.42,579/ - RS. 1,35,421/ - RS.16,06,483/ - ================ 3.1. AS FAR AS COMPUTATION OF LONG TERM CAPITAL GAIN ON TRANSFER OF AGRICULTURAL LAND IS CONCERNED THE ASSESSEE HAS COMPUTED IT AT RS.10,75,674/ - . THE LD.AO HAS NOT DISPUTED THIS COMPUTATION. THE DISPUTE RELATES TO THE COMPUTATION OF CAPITAL GAIN FOR SALE OF PLOTS MADE ON 30 TH DECEMBER,2008. THE ASSESSEE HAS DECLARED CAPITAL GAIN OF RS.3,95,388/ - AND RS.1,35,421/ - . THE ASSESSEE HAS COMPUTED THE COST OF ACQUISITION BY ADOPTING THE MARKET VALUE AS ON 1.4.1981. THE LD.AO WAS OF THE VIEW THAT THESE PLOTS HAVE BEEN INHERITED BY THE ASSESSEE FROM HIS MOTHER BY WAY OF A WILL. THE PLOTS WERE DEVOLVE D UPON THE ASSESSEE AFTER THE DEATH OF HIS MOTHER ON 22.11.1995. THEREFORE, ACCORDING TO THE LD.AO THE COST OF ACQUISITION OUGHT TO BE CONSIDERED FROM THIS DATE AND ASSESSEE IS NOT ENTITLED TO THE BENEFIT OF INDEXATION W.E.F. 1.4.1981. HE CONFRONTED THE ASSESSEE AND THE ASSESSEE HAS REVISED THE COMPUTATION. ACCORDINGLY THE ASSESSEE TOOK THE ACQUISITION OF PLOTS IN 1995 - 96. HE COMPUTED THE CAPITAL GAIN AT RS.4,75,6 54/ - INSTEAD OF RS.3,95,388/ - COMPUTED ORIGINALLY FOR THE FIRST PLOT . FOR THE SECOND PLOT , HE COMPUTED THE GAIN AT RS.1,62,487/ - INSTEAD OF RS.1,35,421/ - . THE LD.AO HAS COMPUTED THE CAPITAL GAIN ACCORDINGLY. 3.2. THE ASSESSEE HAS CHALLENGED THIS COMPUTATION BEFORE THE LD.CIT(A) . H E CONTENDED THAT SINCE HE HAS INHERITED THE PROPERTY FROM HIS MOTHER ON HER DEATH , THE CAPITAL GAIN OUGHT TO BE COMPUTED BY TAKING INTO ACCOUNT THE COST OF ACQUISITION IN THE HANDS OF THE PREVIOUS OWNER. IN ORDER TO BUTTRESS HIS CONTENTIONS HE RELIED UPON THE JUDGEMENT OF SPECIAL BENCH OF ITAT IN THE CASE OF DCIT VS. MANJULA J .SHAH (2009) REPORTED IN 318 ITR (AT) 417 (MUM)(SB) . IT WAS CONTENDED THAT THIS JUDGEMENT HAS BEEN UPHELD BY THE HON BLE MUMBAI HIGH COURT REPO RTED IN 204 TAXMAN 42 (BOM) . IT WAS 4 ALSO CONTENDED THAT THE HON BLE DELHI HIGH COURT IN THE CASE OF ARUN KUMAR SHUNGLOO TRUST (2012) REPORTED IN 18 TAXMAN.COM 261 HAS ALSO UPHELD THIS VIEW. 4. THE LD.CIT(A) HAS CALLED FOR A REMAND REPORT FROM THE LD.AO . THE LD. LD.AO HAS OBJECTED THE PLEA OF THE ASSESSEE ON THE GROUND THAT WHEN HE CONFRONTED THE ASSESSEE WITH THIS ISSUE DURING THE ASSESSMENT PROCEEDINGS , THEN , THE ASSESSEE HAS SURRENDERED THIS AND FILED A REVISED COMPUTATION. THEREFORE THE ASSESSEE HAS NO RIGHT TO CHALLENGE THIS ISSUE IN AN APPEAL. HOWEVER LD.CIT(A) HAS REJECTED THIS PLEA OF THE LD.A.O. AND OBSERVED THAT IT IS A LEGAL ISSUE ; THAT THE ASSESSEE CANNOT BE PROHIBITED FROM TAKING SUCH A PLEA ; THE CAPITAL GAIN HAS TO BE COMPUTED AS PER PROVISIONS OF LAW AND NOT ON THE BASIS OF SOME CON CESSION GIVEN BY THE ASSESSEE UNDER A MISTAKEN BELIEF OR MISCONS TRUCTION OF FACTS. THE LD.FIRST APPELLATE AUTHORITY HAS MADE AN ELABORATE DISCUSSION ON THE POSITION OF LAW IN PARAGRAPH NO.17, BUT SOMEHOW FAILED TO GIVE LOGICAL DIRECTIONS OR A FINDING AS TO HOW CAPITAL GAIN IS TO BE COMPUTED. IN PARAGRAPH 18 THE LD.CIT(A) AL L OF A SUDDEN PICKED UP THE SECOND LIMB OF CAPITAL GAIN WHICH IS A DIFFERENT ISSUE. 5. ON AN ANALYSIS OF THE LD.CIT(A) S ORDER IN THE LIGHT OF THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF ARUN SHUNGLOO TRUST VIS - A - VIS SPECIAL BENCH DECISION OF T HE ITAT IN THE CASE OF MANJULA JESHA WHICH HAS BEEN AFFIRMED BY THE HON BLE HIGH COUR , IT IS CLEAR THAT ON A CON JOINT READING OF S.4 5 , 48 AND 49 , THE COST OF ACQUISITION FOR COMPUTATION OF CAPITAL GAIN SHALL BE DEEMED TO BE THE COST FOR WHICH THE PREVIO US OWNER OF THE PROPERTY ACQUIRED IT. THE LD.CIT(A) HAS REPRODUCED THE OBSERVATIONS OF THE TRIBUNAL AND IT IS WORTH TO TAKE NOTE OF THESE OBSERVATIONS. FOR THE REASONS GIVEN ABOVE, WE ARE OF THE VIEW THAT FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL G AIN ARISING FROM THE TRANSFER OF THE CAPITAL ASSET WHICH HAD BECOME THE PROPERTY OF THE ASSESSEE UNDER GIFT, THE FIRST YEAR IN WHICH THE CAPITAL ASSET WAS HELD BY THE ASSESSEE HAS TO BE DETERMINED TO WORK OUT THE INDEXED COST OF ACQUISITION AS ENVISAGED IN EXPLANATION (III) TO SECTION 48 AFTER TAKING INTO ACCOUNT THE PERIOD FOR WHICH THE SAID CAPITAL ASSET 5 WAS HELD BY THE PREVIOUS OWNER. IN THAT VIEW OF THE MATTER, WE HOLD THAT INDEXED COST OF ACQUISITION OF SUCH CAPITAL ASSET HAS TO BE COMPUTED WITH REFER ENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET. ACCORDINGLY, WE ANSWERED THE QUESTION REFERRED TO US IN FAVOUR OF THE ASSESSEE AND UPHOLD THE IMPUGNED ORDER OF LD.CIT(A) ON THIS ISSUE. 5.1. THE LD.AO HAS NOT DISPUTED WITH THESE PLOTS D EVOLVED UPON THE ASSESSEE AFTER THE DEATH OF HIS MOTHER BY VIRTUE OF A WILL WHICH WAS EXECUTED IN 1995 - 96. THE LD.AO HAS GIVEN THE BENEFIT OF INDEXATION FROM THIS DATE. IN VIEW OF THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT IN ARUN SHUNGLOO TRUS T, OF HON BLE BOMBAY HIGH COURT IN THE CASE OF MANJ ULA J SHAH AND OF THE TRIBUNAL, THE COST OF ACQUISITION AS ENVISAGED IN EXPLANATION III TO S.48 WOULD BE THE SAME WHICH WAS IN THE HANDS OF THE PREVIOUS OWNER. THE NEXT QUESTION WHICH POSED BEFORE US I S WHEN THE MOTHER OF THE ASSESSEE SMT. SITA DEVI HAD ACQUIRED THESE PLOTS , IF SHE HAD ACQUIRED PRIOR TO 1.4.1981 THEN INDEXATION BENEFIT AS ON 1.4.1981 WOULD BE ADMISSIBLE FOR THE ASSESSEE, OTHERWISE FROM THE DATE ON WHICH SHE HAD ACQUIRED THE FLATS. ON THE RECORD WE DO NOT FIND ANY EVIDENCE FOR ASCERTAINING THIS DATE. SOME ROUGH REFERENCE IS AVAILABLE IN THE WILL. THEREFORE WE DIRECTED THE LD.COUNSEL FOR THE ASSESSEE TO PRODUCE SOME DOCUMENT INDICATING THE COST OF ACQUISITION IN THE HANDS OF HIS MOTHER . THE ASSESSEE HAD PRODUCED COPY OF A DECREE SHEET IN ORIGINAL SUIT NO. 72/1970 AND CONTENDED THAT HIS MOTHER HAS RECEIVED THE DISPUTED PROPERTY ON PARTITION BY WAY OF THIS DECREE. 6. AFTER TAKING INTO CONSIDERATION THIS ASPECT WE DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE TO THE FILE OF L D .AO WITH THE DIRECTION THAT THE LD. L D .AO SHALL DETERMINE THE DATE ON WHICH ASSESSEE S MOTHER HAD ACQUIRED THESE PLOTS AND THEREAFTER GIVE THE BENEFIT OF INDEXATION ACCORDINGLY. IF S HE ACQUIRED THE PLOTS IN QUESTION BEFORE 1.4.1981 THEN BENEFIT OF INDEXATION WOULD BE FROM 1.4.1981 OTHERWISE FROM THE DATE ON WHICH SHE ACQUIRED THE PLOTS. THE LD.AO IS DIRECTED TO RECOMPUTED CA PITAL GAIN ON SALE OF TWO PLOTS, AFTER DETERMINING THE DAT E OF ACQUISITION IN THE HANDS OF PREVIOUS OWNER I.E. SMT. SITA DEVI. 6 7. THE NEXT ISSUE AGITATED BY THE ASSESSEE IS WITH REGARD TO DISALLOWANCE OF RS.3,37,000/ - . THE ASSESSEE HAD INCURRED EXPENDITURE FOR PROVIDING CONSULTANCY SERVICES. HE MADE PAYMENT OF RS.3,37,000/ - TO THREE INDIVIDUALS NAMELY : SHRI M.K.SHERWANI RS.1,80,000/ - ; SHRI MOHAMMED KHALID KHAN RS.1,32,000/ - AND SHRI ANIL KR.VARSHNEY RS.25,000/ - . 7.1. T HE L D .AO DISALLOWED THIS CLAIM OF ASSESSEE FOR TWO REASONS. HE OBSERVED THAT THE ASSESS EE FAILED TO DEDUCT TDS WHILE MAKING THESE PAYMENTS. IN HIS SECOND REASON HE OBSERVED THAT THE ASSESSEE HAD MADE PAYMENT IN CASH. AS FAR AS FIRST REASON IS CONCERNED THE LD.CIT(A) HAS HELD THAT THE INCOME OF THE ASSESSEE IS NOT SUBJECT TO TAX AUDIT. HE IS AN INDIVIDUAL. THEREFORE TDS PROVISIONS ARE NOT APPLICABLE. THE REVENUE DID NOT CHALLENGE THIS FINDING OF THE LD.CIT(A) . W ITH REGARD TO VIOLATION OF S.40A(3) , THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT PAYMENTS EXCEEDING RS.20,000/ - WAS NOT MAD E ON A SINGLE DAY , RATHER IT IS SPREAD OVER DURING THE YEAR. HE DREW OUR ATTENTION TO PAGE NO.141 WHERE DETAILS OF PAYMENT O F SHRI MK SERWANI ARE AVAILABLE. HE SUBMITTED THAT A CONFIRMATION GIVEN BY THE PAYEE ALONG WITH DETAILS OF PAYMENTS WERE SUBMITTED BEFORE THE LD.AO . THE LD.AO DID NOT CROSS VERIFY THIS ASPECT. 7.2. ON THE OTHER HAND LD.D.R. RELIED UPON THE ORDER OF LD.A O . 8. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTANCES , WE ARE OF THE VIEW THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSEE HAD FILED CONFIRMATION FROM THE RECIPIENTS. HE HAS SUBMITTED THE SCHEDULE OF PAYMENT. ACCORDING TO THE ASSESSEE PAYMENTS ON EACH DAY WERE NOT EXCEEDING RS.20,000/ - PRESCRIBED U/S 40A(3). THUS ACCORDING TO THE ASSESSEE THERE IS NO VIOLATION. THE PAYMENTS WERE MADE IN CASH. THERE IS NO COURSE TO VERIFY THE CLAIM EXCEPT CROSS EXAMINING THE RECIPIENTS. LD.AO DID NO T CARRY OUT THAT EXERCISE. SINCE WE HAD SET ASIDE ONE OF THE ISSUES TO THE FILE OF LD.AO WE DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE ALSO FOR READJUDICATION. ACCORDINGLY WE SET ASIDE THE ORDERS OF REVENUE AUTHORITIES AND DIRECT THE LD.AO TO RE - EXAMINE THIS ISSUE. NO OTHER ISSUE WAS PRESSED 7 BY THE LD.COUNSEL FOR THE ASSESSEE WITH REGARD TO THE CROSS OBJECTIONS RAISED BY THE ASSESSEE. 9. IN THE APPEAL OF REVENUE FIRST SUBSTANTIAL ISSUE IS, THAT LD.CIT(A) HAS ERRED IN DELETION OF LONG TERM CAPITAL GAIN O F RS.82 LAKHS. 10. THE BRIEF FACTS ARE THAT THE LD.AO HAD RECEIVED INFORMATION THROUGH ANNUAL INFORMATION WING THAT THE ASSESSEE HAS SOLD THE LAND FOR A CONSIDERATION OF RS.87 LAKHS. HE HAS NOT DISCLOSED ANY CAPITAL GAIN ON SALE OF THE PLOT. THE LD.AO H AS OBTAINED THE SALE DEED REGISTERED ON 2 ND DECEMBER,2008 AND CONFRONTED THE ASSESSEE THAT LAND WAS SOLD FOR A CONSIDERATION OF RS.1 LAKHS WHEREAS THE VALUE OF THE PROPERTY AS PER CIRCLE RATE IS RS.87 LAKHS. IN RESPONSE TO THE QUERY OF LD.AO IT WAS CONTE NDED THAT VENDEE HAS PLAYED A FRAUD ON THE ASSESSEE. THE VENDEE W ANTS THE ASSESSEE TO STAND AS SURETY FOR A LOAN. THE SIGNATURE OF THE ASSESSEE WAS TAKEN FOR THE PURPOSE OF SECURITY OF A CAR LOAN. HE HAS MIS USED THE RELATIONSHIP AND FRAUDULENTLY WROTE TRANSFER OF LAND. THE ASSESSEE HAS NOT RECEIVED ANY MONEY. WHEN THE ASSESSEE CAME TO KNOW ABOUT THIS , HE FILED A CIVIL SUIT AND ULTIMATELY THE HON BLE COURT ON 5 TH APRIL,2011 DECLARED THE SALE DEED AS NULL AND VOID. THE LD.AO HAS REJECTED THIS CONTENTION ON THE GROUND THAT THE SALE DEED HAS BEEN DECLARED NULL AND VOID IN SUBSEQUENT YEAR , AS PER THE SALE DEED , LAND WAS TRANSFER RED DURING THE ACCOUNT ING YEAR RELEVANT TO AY 2009 - 10. THE HON BLE COURT HAS PASSED THE DECREE I N APRIL,2011. THEREFORE IN AY 2009 - 10 , THE ASSESSEE OUGHT TO HAVE DECLARED CAPITAL GAIN. LD.AO HAS MADE ADDITION OF RS.82 LAKHS. 11. ON APPEAL THE LD.CIT(A) DELETED THE ADDITION. 12. BEFORE US THE LD.D.R. RELIED ON THE ORDER OF LD.AO. ON THE OTHER HAND LD.COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TOWARDS THE COPY OF THE JUDGEMENT PASSED BY THE TRIAL COURT. HE SUBMITTED THAT THE LAND WAS GOT TRANSFERRED FRAUDULENTLY. THE ASSESSEE HAS CHALLENGED THE SALE DEED BEFORE THE CIVIL COURT. ULTIMATELY THE SA LE DEED WAS DECLARED AS NULL AND VOID, MEANING THEREBY THAT LAND WAS NEVER STOOD TRANSFERRED IN THE NAME OF VENDEE. 8 13. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AND HAVE GONE THROUGH THE RECORD CAREFULLY. S.45 OF THE I.T. ACT CONTEMPLATES THAT ANY PROFITS OR GAINS ARISING FROM THE TRANSFER OF A CAPITAL ASSET EFFECTED IN THE P.Y. SHALL SAVE AS OTHERWISE PROVIDED IN S.54, 54B, 83C BE CHARGEABLE TO INCOME TAX UNDER THE HEAD CAPITAL GAINS AND SHALL BE DEEMED TO BE THE INCOME OF THE P.Y. IN WHICH THE T RANSFER TOOK PLACE. IN THE GIVEN FACT THE TRANSFER HAD NEVER TAKEN PLACE. IT WAS A FRAUDULENT ATTEMPT AT THE END OF THE VENDEE. THE ASSESSEE HAD NEVER RECEIVED SALE CONSIDERATION. HE HAS NEVER GIVEN POSSESSION TO THE VENDEE. THE MOMENT HE CAME TO KNOW ABOUT THE ALLEGED SALE DEED, HE CHALLENGED IT IN THE CIVIL COURT AND ULTIMATELY THE SALE DEED WAS DECLARED AS NULL AND VOID. IN SUCH SITUATION WHERE IS THE RIGHT TO RECEIVE SALE CONSIDERATION, WHICH CAN AUTHORISE THE LD.AO TO SAY THAT CAPITAL GAIN HAD AR ISEN TO THE ASSESSEE. LD.FIRST APPELLATE AUTHORITY HAD RIGHTLY DELETED THE ADDITION. 14. IN THE NEXT FOLD OF GRIEVANCE THE REVENUE HAS PLEADED THAT THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.25 LAKHS. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS A SAVINGS A/C WITH HDFC BANK. HE HAS MADE DEPOSITS IN THIS BANK AND ALSO MADE WITHDRAWALS. LD.AO WAS OF THE VIEW THAT THE ASSESSEE HAD MADE INVESTMENTS OF RS.25 LAKHS BY DEPOSITING THE AMOUNTS IN CASH IN THE BANK ACCOUNT AND HE HAS NO SOURCE OF SUCH DEPOSITS. 15. ON APPEAL THE LD.FIRST APPELLATE AUTHORITY HAS MADE A DETAILED ANALYSIS AND THEREAFTER DELETED THE ADDITION. THE EXPLANATION OF THE ASSESSEE BEFORE THE AO WAS AS UNDER. 28.11.2008 7,00,000/ - OUT OF THE CASH WITHDRAWAL FROM THE SAME BANK ACCOUNT ON 26.9.2008 27.12.2009 7,00,000/ - OUT OF THE CASH WITHDRAWAL FROM THE SAME BANK ACCOUNT ON 27.9.2008 21.09.2008 7,00,000/ - RS.3,50,000/ - OUT OF THE CASH WITHDRAWAL FROM THE SAME BANK ACCOUNT ON 29.9.2008; RS.3,50,000/ - OUT OF OWN CASH HOLDING 6.2.2009 1,50,000/ - OUT OF SALE PROCEEDS OF A LAND BEING RS.1,50,000/ - 6.2.2009 3,00,000/ OUT OF SALE PROCEEDS OF A LAND BEING RS.3,00,000/ - 9 THE AMOUNTS DEPOSITED ON 28.11.2008, 27.12.2008, 21.9.2008 AND 6 TH FEB.2009 IS CONCERNED, THERE IS NO DISPUTE. THE AO GOT THE INFORMATION THROUGH ANNUAL INFORMATION WING AND ALSO COLLECTED THE BANK STATEMENT. THE STAND OF THE ASSESSEE IS THAT HE HAS WITHDRAWN AMOUNTS ON 26 TH SEPTEMBER,2008 AND OUT OF THAT CASH , RS.7 LA KHS WAS DEPOSITED. SIMILARLY ON 27.9.2008 HE HAS WITHDRAWN THE AMOUNT WHICH WAS DEPOSITED. THE LD.FIRST APPELLATE AUTHORITY HAS MADE AN ANALYSIS OF THESE WITHDRAWALS AND THEREAFTER DELETED THE ADDITION BY OBSERVING AS UNDER. HAVE GONE THROUGH THE ASSE SSMENT ORDER DT. 14.12.2011 AND CONSIDERED THE WRITTEN SUBMISSIONS AND OTHER SUPPORTING EVIDENCES FILED BY THE APPELLANT. AN ADDITION OF RS.25,50,000/ - WAS MADE AS UNEXPLAINED CASH CREDIT U/S 68 BY THE AO WHICH THE AO HAS ALLEGED BEFORE ME WAS WITHOUT PRO VIDING SUFFICIENT AND ADEQUATE OPPORTUNITY TO PRESENT HIS CASE. THE FACTS IN BRIEF ARE THAT THE APPELLANT HAD MADE PERIODICAL WITHDRAWAL AND ALSO PERIODICALLY DEPOSITED CERTAIN SUMS OF MONEY IN HIS ACCOUNT MAINTAINED WITH HDFC BANK. AS I HAVE HELD IN THE EARLIER PARAGRAPHS, THE AO HAS NOT BROUGHT OUT SUFFICIENT MATERIAL ON RECORD TO JUSTIFY THE ADDITION UNDER THE HEAD CAPITAL GAINS FOR ALLEGED SALE OF PROPERTY AT KOIL, ALIGARH. THE AO HAS ALSO ADDITIONALLY MADE OUT A CASE FOR CREATING THE DEPOSIT AS AN U NEXPLAINED BY STATING THAT THE EXPLANATION OF THE APPELLANT FOR DEPOSIT OF CASH FROM WITHDRAWAL OF RS.24,50,000/ - IS NOT JUSTIFIED IN VIEW OF THE DIFFERENCE IN DENOMINATIONS OF NOTES WITHDRAWN AND SUBSEQUENTLY DEPOSITED. THE REVENUE IS CONCERNED WITH THE SOURCE OF DEPOSIT AND THE DIFFERENCE IN DENOMINATION OF NOTES DOES NOT IN FACT THE EXPLANATION OF THE SOURCE . IT IS UNDISPUTED THAT THE AMOUNT OF RS.24,50,000/ - AS PER THE DATE CHART REPRODUCED BY THE AO AT PAGE NO.6 OF HIS ASSESSMENT ORDER MENTIONED (SUP RA), WAS WITHDRAWN BY THE APPELLANT FROM HIS ACCOUNT MAINTAINED IN HDFC BANK WHICH HE SUBSEQUENTLY DEPOSITED AMOUNTING TO RS.25,50,000/ - . THE AO CANNOT DOUBT THE SOURCE OF THE DEPOSIT IN VIEW OF THE WITHDRAWALS HAVING BEEN UTILISED FOR HAVING MADE SUBSEQU ENT DEPOSITS. THE APPELLANT ALSO HAS FURNISHED AN AFFIDAVIT DURING THE COURSE OF THE APPELLATE PROCEEDINGS TO REITERATE THAT WITHDRAWALS MADE BY HIM WERE UTILISED FOR DEPOSITING THE SUM OF RS.25,50,000/ - SUBSEQUENTLY IN HIS HDFC BANK ACCOUNT. THEREFORE, IN VIEW OF THE ABOVE DISCUSSION, THE ADDITION MADE BY THE AO AMOUNTING TO RS.25,50,000/ - TREATING THE CASH DEPOSITS AS UNEXPLAINED IS HEREBY DELETED. 16. ON AN ANALYSIS OF THE RE CORD, WE FIND THAT LD.AO HAS OVERLAPPED THE FACTS. HE ASSUMED THAT THE ASS ESSEE HAD TRANSFERRED AGRICULTURAL LAND AND MUST HAVE RECEIVED RS.87 LAKHS. HE HAS MADE REFERENCE TO THE 10 DENOMINATION OF NOTES ETC. BUT THE LD.FIRST APPELLATE AUTHORITY HAS OBSERVED THAT THE REVENUE IS CONCERNED WITH THE SOURCE OF DEPOSIT AND NOT WITH REG ARD TO DIFFERENCE IN THE DENOMINATION OF NOTES. IT APPEARS THAT LD.AO HAS AN EXPECTATION THAT SAME NOTES OUGHT TO BE POSSESSED BY ANY INDIVIDUAL WHICH WERE WITHDRAWN FROM THE BANK FOR REDEPOSIT. IN OTHER WORDS THE AMOUNT WITHDRAWN SHOULD NOT BE USED FOR ANY OTHER PURPOSE AND THE SAME NOTES SHOULD BE REDEPOSITED. TO OUR MIND SUCH AN EXPECTATION IN THE ORDINARY COURSE OF LIFE IS LITTLE IMPRO BABLE . LD.FIRST APPELLATE AUTHORITY HAD APPRECIATED THE FACTS AND CIRCUMSTANCES OF THE CASE AND FELT THAT THE ASSESS EE HAS EXPLAINED THE FACTS AND SOURCE AND THEREFORE NO ADDITION SHOULD BE MADE. WE DO NOT FIND ERROR IN THE ORDER OF LD.CIT(A) ON THIS ISSUE. HENCE THIS GROUND IS REJECTED. 17. IN VIEW OF THE ABOVE DISCUSSION , THE APPEAL OF THE REVENUE STANDS DISMISSED AND THE CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND OCTOBER, 2014. SD/ - SD/ - ( T.S.KAPOOR ) ( RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE 22 ND OCTOBER, 2014 *MANGA 11 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR