Rajesh Keshav Chavan, Pune V. Income-tax Officer,

ITA 1491/PUN/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1043 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 07-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE
• Assessee Lawyers: NILESH KHANDELWAL
• Keywords: Unexplained investment; Depreciation; Business expenditure
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE . . , BEFORE SHRI R.K. PANDA, AM . / ITA NO.1491/PN/2016 / ASSESSMENT YEAR : 2007-08 SHRI RAJESH KESHAV CHAVAN, C/O. SHAH KHANDELWAL JAIN & ASSOCIATES, CHARTERED ACCOUNTANT, LEVEL 3, BUSINESS BAY, PLOT NO.84, WELLESLEY ROAD, NEAR RTO, PUNE 411 001 PAN :AALPC3942N . / APPELLANT V/S ITO, WARD - 1(1) , PUNE . / RESPONDENT / APPELLANT BY : SHRI NILESH KHANDELWAL / RESPONDENT BY : SHRI ANIL CHAWARE / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 24-02-2016 OF THE CIT(A)-5, PUNE RELATING TO ASSES SMENT YEAR 2007-08. 2. GROUND OF APPEAL NO.1 BY THE ASSESSEE READS AS UNDER : 1. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE A ND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT THE PROVISIONS OF SECTION 194J A RE NOT APPLICABLE TO THE FACTS PREVAILING IN THE CA SE . CONSEQUENTLY PROVISIONS OF SECTION 40(A)(IA) ARE NO T APPLICABLE TO THE FACTS OF THE CASE . THE DISAL L OWANCE MADE BY THE AO AND THAT CONFIRMED BY THE HON ' BLE CIT(A) U/S 40 (A) (IA) MAY BE SET ASIDE . JUST AND PROPER RELIEF BE GRANTED TO THE APPELLANT IN THIS R ESPECT . / DATE OF HEARING :07.09.2016 / DATE OF PRONOUNCEMENT:09.09.2016 2 ITA NO.1491/PN/2016 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION UNDER THE NAME AND STYLE OF M/S. SRUJAN CONSTRUCTION. HE FILED HIS RETURN OF INCOME ON 29-10-2007 DECLARING TOTAL INCOME OF RS.9,75,471/-. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS THE AO OBSERVED THA T NO TAX HAS BEEN DEDUCTED AT SOURCE FOR AUDIT FEE OF RS.22,448/- AND PROFESSIONAL FEES OF RS.23,114/- TOTALLING TO RS.45,564/-. HE, THEREFORE, D ISALLOWED THE ABOVE AMOUNT OF RS.45,564/- U/S.40(A)(IA) OF THE I.T. ACT. 4. BEFORE CIT(A) THE ASSESSEE SUBMITTED THAT IT HAD ONLY MADE PROVISION FOR THE SAID EXPENSES AS HE WAS NOT CERTAIN TO WHOM HE WOULD ASSIGN THE AUDIT AND PROFESSIONAL WORK AND THEREFORE NO TAX WAS DEDUCTED AT SOURCE ON THE SAID EXPENSES. HOWEVER , THE CIT(A) WAS NOT SATISFIED WITH THE ARGUMENTS ADVANCED BEFORE HIM . HE HELD THAT ONCE SUCH AN AMOUNT TOWARDS AUDIT FEE AND PROFESS IONAL FEES WAS PAID/PAYABLE AND THUS HAS EXCEEDED THE LIMIT PRESCRIB ED U/S.194J OF THE ACT, IT WAS OBLIGATORY ON THE PART OF THE A SSESSEE TO DEDUCT TAX FROM SUCH PAYMENTS MADE/PAYABLE. FAILURE TO DO SO WOULD ATTRACT THE PROVISIONS OF SECTION 40(A)(IA) OF THE I.T. A CT. HE ACCORDINGLY UPHELD THE ADDITION MADE BY THE AO. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEA L BEFORE THE TRIBUNAL. 6. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET REL YING ON VARIOUS DECISIONS SUBMITTED THAT THE MATTER MAY BE SET ASIDE TO THE FILE OF THE AO WITH A DIRECTION TO VERIFY THAT THE RECIPIENT HAS ALREADY DECLARED SUCH AMOUNT IN HIS RETURN OF INCOME AND PAID TH E TAXES ON THE SAME. IF THE ASSESSEE IS ABLE TO PROVE THAT THE RE CIPIENT HAS 3 ITA NO.1491/PN/2016 ALREADY OFFERED THE SAME TO TAX AND PAID NECESSARY TAXE S THEN NO DISALLOWANCE IS CALLED FOR. 7. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND WHILE SUPPORTING THE ORDER OF THE CIT(A) FAIRLY CONCEDED THAT H E HAS NO OBJECTION IF THE MATTER IS SET ASIDE TO THE FILE OF THE AO W ITH A DIRECTION TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIAT E WITH EVIDENCE TO HIS SATISFACTION THAT THE RECIPIENTS HAVE OFFERED THE AMOUNT TO TAX . 8. AFTER HEARING BOTH THE SIDES, I DEEM IT PROPER TO RES TORE THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE WITH EVIDENCE TO HIS SATISFACTION THAT THE RECIPIENTS OF THE AUDIT FEES AND PROFESSIONAL FEES HAVE DE CLARED SUCH AMOUNT IN THEIR RESPECTIVE RETURN OF INCOME AND HAVE PAID TAX ON THE SAME. THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 9. GROUND OF APPEAL NO.2 BY THE ASSESSEE READS AS UNDER : 2. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CA SE AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT THE HON'BLE CIT(A ) ERRED IN CONFIRMING THE DISALLOWANCE OF SALES PROMO T I ON EXPENSES IS UNWARRANTED, UNJUSTIFIED & BASED ON SURMISES. IT CAN FURTHER BE HELD THAT CLAIM OF APPELLANT IN THIS RESPECT IS ALLOWABL E IN FULL AS PER THE SCHEME OF THE ACT. THE ASSESSMENT FRAMED BY THE AO AND THAT CONFIRMED BY THE HON'BLE CIT(A) ON THIS SCORE BE SE T ASIDE. JUST AND PROPER RELIEF BE GRANTED TO THE APPELLANT IN THIS R ESPECT. 10. AFTER HEARING BOTH THE SIDES, I FIND THE AO HAS MADE ADDITION OF RS.10,355/- ON THE GROUND THAT THE SALES PROMOTION EXPE NSES OF RS.10,355/- ARE NOT VERIFIABLE. IN APPEAL THE LD.CIT(A) UPHELD THE ADDITION MADE BY THE AO. WHILE DOING SO, HE OBSERVED THAT THE AO IN THE ASSESSMENT ORDER HAS CASUALLY DISALLOWED THE AFORESA ID EXPENSES OF RS.10,355/- WITHOUT ANY VERIFICATION OR CALLING FOR ANY DETA ILS IN 4 ITA NO.1491/PN/2016 THIS REGARD. HE HOWEVER UPHELD THE ADDITION ON THE GROU ND THAT THE ASSESSEE COULD NOT SUBSTANTIATE WITH EVIDENCE AS TO THE REQUIREMENT TO INCUR SUCH SALES PROMOTION EXPENSES. HE ACCORDINGLY UPHELD THE ADDITION MADE BY THE AO. 11. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPE AL BEFORE US. 12. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE RE IS NO QUESTION ASKED BY THE AO DURING THE COURSE OF ASSESSME NT PROCEEDINGS REGARDING THE EXPENDITURE INCURRED ON ACCO UNT OF SALES PROMOTION EXPENSES. HE SUBMITTED THAT THE ACCOUNTS AR E AUDITED AND THE AUDITORS HAVE NOT POINTED OUT ANY MISTAKE, THEREFORE , THE AO IN A CASUAL MANNER COULD NOT HAVE MADE ANY SUCH DISALLOWANCE. HE SUBMITTED THAT THE LD.CIT(A) WHILE ADMITTING THAT THE AO HA S MADE THE ADDITION IN A CASUAL MANNER, HOWEVER, HAS CONFIRMED THE ADDITION. THEREFORE, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE , THE ADDITION MADE BY THE AO AND SUSTAINED BY THE CIT(A) SHOULD BE DELETED. 13. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE NECESSITY OF SUCH SALES PROMOTION EXPENSES FOR A CONTRACTOR HAS NOT BEEN PROVED OR EXPLAINED. EVEN THE ASSESSEE BEFORE THE CIT(A) HAS NO T GIVEN ANY EVIDENCE TO SUBSTANTIATE THE CLAIM. THEREFORE, THE CIT(A) W AS FULLY JUSTIFIED IN SUSTAINING THE ADDITION MADE BY THE AO. 14. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PA PER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VA RIOUS DECISIONS CITED BEFORE ME. IT IS AN ADMITTED FACT THAT TH E AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS NEITHER ASKED ANY QUESTION 5 ITA NO.1491/PN/2016 REGARDING THE ALLOWABILITY OR OTHERWISE OF THE SALES PROMOTIO N EXPENSES NOR THE ASSESSEE HAS GIVEN ANY DETAILS FOR INCU RRING OF SUCH SALES PROMOTION EXPENSES. I FIND FROM PAGE 13 OF THE PAPE R BOOK THAT THE ASSESSEE IN HIS REPLY TO THE CIT(A) ON THIS ISSUE HAS STATED THAT THE EXPENDITURE WAS INCURRED FOR THE PURPOSE OF ASSESSE ES BUSINESS AND THE SAME IS SUPPORTED BY AN INTERNAL VOUCHER. SINCE THE ASSESSE E WAS ENGAGED IN THE CONSTRUCTION BUSINESS AND HAD PURCH ASED PROPERTY DURING THE YEAR AND NO PROJECT HAS BEEN EXE CUTED, THEREFORE, THE CIT(A) HELD THAT THERE WAS NO NECESSITY OF INCURRING S ALES PROMOTION EXPENSES. FURTHER, NO EVIDENCE WHATSOEVER WA S GIVEN BY THE ASSESSEE AS TO WHOM SUCH AMOUNT HAS BEEN PAID. M ERELY PASSING AN INTERNAL VOUCHER WITHOUT GIVING ANY DETAILS OF SUCH EXPE NDITURE IN MY OPINION CANNOT BE ALLOWED AS A DEDUCTION. IT IS THE SE TTLED PROPOSITION OF LAW THAT FOR CLAIMING ANY EXPENDITURE AS A DE DUCTION THE ASSESSEE MUST SATISFY THE AO REGARDING THE GENUINE NESS OF SUCH EXPENDITURE FOR THE PURPOSE OF BUSINESS. ALTHOUGH IN THE INSTANT CASE APPARENTLY THE AO HAS MADE THE ADDITION WITHOUT CALLING FO R SUCH DETAILS, HOWEVER, IT IS A FACT THAT BEFORE THE CIT(A) THE ASS ESSEE WAS UNABLE TO PRODUCE ANY DOCUMENTARY EVIDENCE OTHER THAN SIMPLY MENTIONING THE INCURRING OF SUCH EXPENDITURE THROUGH AN IN TERNAL VOUCHER. EVEN BEFORE ME ALSO NO SUCH DETAILS WERE PRODU CED SO AS TO TAKE A DIFFERENT VIEW THAN THE VIEW TAKEN BY THE CIT(A) O N THIS ISSUE. SINCE THE ASSESSEE FAILED TO GIVE THE DETAILS OF SUCH EXPE NDITURE SUCH AS THE NAME OF THE PERSON TO WHOM SUCH AMOUNT HAS B EEN PAID OR THE MANNER OF INCURRING OF SUCH EXPENDITURE, THEREFORE, I DO NO T FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE. ACCORDING LY, THE GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS DISMISSED. 6 ITA NO.1491/PN/2016 15. GROUND OF APPEAL NO.3 BY THE ASSESSEE READS AS UNDER : 3 . ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE A ND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT THAT THE HON'BLE CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 66 , 174/-MADE BY THE AO . LT BE HELD THAT THE ADDITION MADE IS AGAINST THE PRINC IPLE OF NATURAL OF JUSTICE AND IS BAD IN LAW. THE ASSESSMENT FRAMED BY THE AO AND THAT CONFIRMED BY THE HON ' BLE CIT(A) BE SET ASIDE. THE ADDITION SO MADE BE DELETED . JUST AND PROPER RELIEF BE GRANTED TO THE APPELLANT ON THIS SCORE . 16. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO DURING TH E COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE HA S INCURRED EXPENDITURE OF RS.3,30,869/- UNDER THE FOLLOWING HEADS : CAR EXPENSES RS.18,271/ - INTEREST ON CAR LOAN RS.10,503/ - INTEREST ON VEHICLE LOAN RS.56,634/ - VEHICLE RUNNING & MAINTENANCE RS.57,310/ - TELEPHONIC EXPENSES RS.16,579/ - DEPRECIATION RS.1,51,167/ - REPAIRING & MAINTENANCE EXPENSES RS.20,405/ - TOTAL RS.3,30,869/ - 17. SINCE THESE EXPENSES WERE NOT SUPPORTED BY PROPE R EVIDENCE AND HOLDING THAT PERSONAL ELEMENT ALSO CANNOT BE RULED OU T THE AO MADE ADHOC DISALLOWANCE OF 20% AMOUNTING TO RS.66,174/-. I N APPEAL THE LD.CIT(A) UPHELD THE ADDITION MADE BY THE AO ON THE GROUND THAT THE ASSESSEE WAS UNABLE TO SUBSTANTIATE H IS CLAIM WITH PROPER EVIDENCE EITHER BEFORE THE AO OR BEFORE HER. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE A CCOUNTS OF THE ASSESSEE ARE AUDITED AND THE AUDITORS HAVE NOT PO INTED OUT ANY MISTAKE, THEREFORE, NO DISALLOWANCE IS CALLED FOR. IN HIS ALTER NATE CONTENTION, HE SUBMITTED THAT DISALLOWANCE AT 20% IS HIGHLY EXCESSIVE AND UNREASONABLE. IT IS THE SUBMISSION OF THE LD. DEPAR TMENTAL REPRESENTATIVE THAT SINCE THE ASSESSEE COULD NOT SUBST ANTIATE THE NATURE OF EXPENSES, THEREFORE, THE ORDER OF THE CIT(A) ON THIS ISSUE IS FULLY JUSTIFIED. 7 ITA NO.1491/PN/2016 18. AFTER HEARING BOTH THE SIDES, I FIND THE AO HAS MADE ADDITION OF RS.66,174/- BEING 20% OF THE VARIOUS EXPENSES ON ADHOC B ASIS FOR WANT OF EVIDENCE. IT IS THE SETTLED PROPOSITION OF LAW THAT FOR CLAIMING ANY EXPENDITURE AS ALLOWABLE BUSINESS EXPENDITURE THE ONU S IS ALWAYS ON THE ASSESSEE TO SUBSTANTIATE WITH EVIDENCE TO THE SATISFACTION OF THE AO REGARDING THE GENUINENESS AND ALLOWABILITY OF SUCH EXPEN DITURE. ADMITTEDLY, THE ASSESSEE IN THE INSTANT CASE HAS FAILED TO SUBSTANTIATE WITH EVIDENCE TO THE SATISFACTION OF THE AO REGARDING INCUR RING OF SUCH EXPENDITURE FOR WHICH THE ACTION OF THE AO IN MAKING ADH OC DISALLOWANCE CANNOT BE HELD AS INCORRECT. HOWEVER, THE AD HOC DISALLOWANCE AT 20% APPEARS TO BE ON THE HIGHER SIDE. I THEREFORE DIRECT THE AO TO RESTRICT SUCH DISALLOWANCE TO 10% OF SUC H EXPENDITURE WHICH COMES TO RS.33,087/-. GROUND OF APPEA L NO.3 RAISED BY THE ASSESSEE IS ACCORDINGLY PARTLY ALLOWED. 19. GROUND OF APPEAL NO.4 BY THE ASSESSEE READS AS UNDER : 4 . ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE A ND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT THAT THE HON'BLE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS . 34 , 62,000/ - U/S. 69 MADE BY THE AO . IT BE HELD THAT THE ADDITION MADE IS IMPROPER, UNJU STIFIED AND CONTRARY TO THE PROVISIONS AND SCHEME OF THE ACT AN D FACTS PREVAILING IN THE CASE . THE ADDITION MADE BE DELETED. JUST AND PROPER RELIE F BE GRANTED TO THE APPELLANT IN THIS RESPECT. 20. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO DURING T HE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED FROM THE BANK ACCOUNT THAT THERE WERE HUGE CASH DEPOSITS IN ACCOUNT NO.812 WITH THE VISHW ESHWAR SAHAKARI BANK LTD. WHERE TOTAL OF SUCH CASH DEPOSITS AMO UNTED TO RS.25,13,500/- OUT OF WHICH CASH DEPOSITS OF RS.24,47,500/- W ERE MADE FROM 31-12-2006 TO 31-03-2007, I.E. MUCH AFTER THE T RANSFER OF DEVELOPMENT AGREEMENT. SIMILARLY, HE OBSERVED THAT IN ASS ESSEES ACCOUNT NO.2126 WITH JANASEVA SAHAKARI BANK LTD. CASH O F 8 ITA NO.1491/PN/2016 RS.9,48,500/- WERE DEPOSITED ON VARIOUS DATES. HE, THERE FORE, ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THESE CASH DEPOS ITS. IT WAS EXPLAINED BY THE ASSESSEE THAT HE BEING IN THE BUSINESS OF CIVIL CONSTRUCTION AS CIVIL CONTRACTOR HAS DEPOSITED THE CASH ON VARIOUS DATES WHICH WERE OUT OF PREVIOUS CASH WITHDRAWALS FROM TH E BANK. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLANATION GIVE N BY THE ASSESSEE. ACCORDING TO HIM, HUGE AMOUNT OF CASH OF RS.24, 47,500/- WAS DEPOSITED ON VARIOUS DATES IN THE VISWESHWAR SAHAK ARI BANK LTD. MUCH AFTER THE DEVELOPMENT AGREEMENT IN DECEMBER 2006. THERE IS NO PLAUSIBLE REASON FOR SUCH DEPOSITS WHEN THE TRANSACTIO N IN LAND DEALING IS OVER. THE ASSESSEE COULD NOT EXPLAIN THE NATUR E AND SOURCE FOR CREDITING THESE CASH AMOUNTS INTO THE TWO BANK ACC OUNTS. FURTHER, THE EXPLANATION OFFERED BY THE ASSESSEE IS ALSO N OT SATISFACTORY. THE AO, THEREFORE, MADE ADDITION OF RS.34,62,000 /- (RS.25,31,500 + RS.9,48,500) AS UNEXPLAINED INVESTMENT U/S.69 OF THE I.T. ACT. 21. BEFORE CIT(A) THE ASSESSEE MADE ELABORATE SUBMISSIONS . IT WAS EXPLAINED THAT ASSESSEE HAD WITHDRAWN CASH AT DIFFERENT IN TERVALS FROM THE SAVINGS ACCOUNT AND CURRENT ACCOUNT AS AND W HEN REQUIRED FROM THE BANKS FOR MAKING VARIOUS PAYMENTS. THE ASSESSE E ALSO RECEIVED CASH DURING THE YEAR FROM THE PRINCIPAL CONTRACT OR. WHENEVER THE ASSESSEE HAD SURPLUS CASH THE SAME WAS DEPOSITED INTO THE BANK ACCOUNT. THE ASSESSEE FILED THE RELEVANT EXTRA CTS OF THE CASH BOOK AND BANK STATEMENTS BEFORE THE CIT(A). RELYING ON THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. M/S. AVISHKAR BUILDERS IT WAS SUBMITTED THAT WHEN DEPOSITS MAD E ARE PART OF REGULAR BOOKS WHICH ARE DULY AUDITED UNDER THE I.T. A CT ADDITION U/S.69 CANNOT BE MADE WITHOUT SATISFYING THE REQUIRED CONDITION . 9 ITA NO.1491/PN/2016 22. HOWEVER, THE CIT(A) WAS ALSO NOT SATISFIED WITH THE AR GUMENTS ADVANCED BY THE ASSESSEE. SHE OBSERVED THAT THE ASS ESSEE COULD NOT FURNISH ANY COGENT EXPLANATION BEFORE THE AO ABOUT THE S OURCE OF CASH DEPOSITS. THE ASSESSEE MERELY MADE A SUBMISSION B EFORE THE AO WITHOUT ADDUCING TO ANY CASH FLOW STATEMENT OR SOURCE E XPLAINING SUCH CASH DEPOSITS MADE. EVEN BEFORE HER THE ASSESSEE COULD NOT FURNISH ANY SUCH STATEMENT OF ACCOUNTS OR CASH FLOW STAT EMENTS WHICH WOULD HAVE INDICATED THAT CERTAIN WITHDRAWAL FROM CER TAIN BANKS DULY DISCLOSED IN THE BOOKS OF ACCOUNTS SINCE NOT USED/UTILIZED BY THE ASSESSEE HAD BEEN RE-DEPOSITED WITHIN THE REASO NABLE TIME OF SUCH WITHDRAWAL. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND DISTINGUISHING THE DECISIONS CITED BEFORE HER THE LD.CIT(A) UPHELD THE ADDITION MADE BY THE AO. 23. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APP EAL BEFORE THE TRIBUNAL. 24. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALLENGED THE ORDER OF THE CIT(A). REFERRING TO PAGE 19 TO 40 OF THE PAPER BO OK HE DREW THE ATTENTION OF THE BENCH TO THE EXTRACTS OF THE CASH BOOK FROM 01- 04-206 TO 31-03-2007 WHICH WERE FILED BEFORE THE CIT(A). HE SUBMITTED THAT THE AO HAS NOT REJECTED THE BOOKS OF A CCOUNT STATING THE SAME TO BE FALSE OR UNTRUE. THEREFORE, WHEN THE ASS ESSEE HAD SUFFICIENT CASH BALANCE AVAILABLE WITH HIM THERE WAS NO QUEST ION OF INVOKING THE PROVISIONS OF SECTION 69 OF THE I.T. ACT FOR MAKING THE ADDITION. REFERRING TO THE PROVISIONS OF SECTION 69 HE SUBM ITTED THAT THE ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE O N ACCOUNT OF UNEXPLAINED INVESTMENT IF THE ASSESSEE HAS MADE ANY INVE STMENT WHICH HAS NOT BEEN RECORDED IN THE BOOKS OF ACCOUNT, IF A NY, 10 ITA NO.1491/PN/2016 MAINTAINED BY HIM OR THE ASSESSEE OFFERS NO EXPLANATION AB OUT THE NATURE AND SOURCE OF THE INVESTMENT OR IF THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT SATISFACTORY IN THE OPINION OF THE AO . HE SUBMITTED THAT IN THE INSTANT CASE THE ASSESSEE HAD SU FFICIENT CASH BALANCE AVAILABLE WITH HIM IN THE BOOKS OF ACCOUNT. THE EX TRACTS OF THE CASH BOOK WERE ALSO FILED BEFORE THE CIT(A). NEITHER TH E AO NOR THE CIT(A) HAS HELD THE BOOKS OF ACCOUNT TO BE FALSE. THE REFORE, ONCE SUFFICIENT CASH IS AVAILABLE WITH THE ASSESSEE TO MAKE DEPOS ITS IN THE BANK ACCOUNT THE PROVISIONS OF SECTION 69 CANNOT BE APP LIED. THE LD. COUNSEL FOR THE ASSESSEE ALSO RELIED ON THE DECIS ION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. AVISHK AR BUILDERS AND VICE VERSA VIDE ITA NO.1156/PN/2008 AND CO NO.08/PN /2009 ORDER DATED 31-10-2012. 25. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF THE DEPOSITS MADE IN THE VARIOUS BANK ACCOUNTS. THEREFORE, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) WAS FULLY JUSTIFIED IN SUSTAINING THE ADDITION MADE BY THE AO. 26. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VARIOU S DECISIONS CITED BEFORE ME. I FIND THE AO MADE ADDITION OF RS.34,62,000 /- U/S.69 OF THE I.T. ACT ON ACCOUNT OF CASH DEPOSITS MADE BY THE ASSESSEE IN THE TWO BANK ACCOUNTS NAMELY RS.24,47,500/ - IN A/C.NO.812 WITH VISHWESHWAR SAHAKARI BANK AND RS.9,48,500/ - IN A/C.NO.2126 WITH JANASEVA SAHAKARI BANK LTD. ON THE GROUN D THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF SUCH INVEST MENTS IN THE 11 ITA NO.1491/PN/2016 BANK ACCOUNT. DESPITE THE EXTRACTS OF THE CASH BOOK A ND LEDGER ACCOUNTS PRODUCED BEFORE THE CIT(A) I FIND SHE UPHELD TH E ADDITION MADE BY THE AO ON THE GROUND THAT ASSESSEE NEITHER C OULD FURNISH NOR COULD RECONCILE SUCH DEPOSITS OF CASH, VIS--VIS CASH FLOW STATEMENT TO SUBSTANTIATE ITS CLAIM. FROM THE ORDER OF T HE CIT(A) I FIND FROM PARA 6.1 ONWARDS THAT THE ASSESSEE IN ITS SUBMIS SION BEFORE THE CIT(A) APART FROM PRODUCING THE BANK ACCOUNTS, AUDITE D ACCOUNTS, CASH BOOK ETC. HAS ALSO SUBMITTED THAT THE D EPOSITS MADE ARE PART OF REGULAR BOOKS WHICH ARE DULY AUDITED UNDER THE INCOME TAX ACT AND AS SUCH THE ADDITION MADE U/S.69 WITHOUT SA TISFYING THE REQUIRED CONDITIONS IN THE SAID PROVISIONS DESERVES TO BE DELETED. HOWEVER, I FIND THE CIT(A) DID NOT CONSIDER THIS PART OF THE ARGUMENT ADVANCED BY THE ASSESSEE. 27. AS PER THE PROVISIONS OF SECTION 69 OF THE I.T. ACT A DDITION CAN BE MADE AS UNEXPLAINED INVESTMENT IF THE ASSESSEE HAS MA DE INVESTMENTS WHICH ARE NOT RECORDED IN THE BOOKS OF ACCO UNT, IF ANY, MAINTAINED BY HIM OR THE ASSESSEE OFFERS NO EXPLANATION AB OUT THE NATURE AND SOURCE OF THE INVESTMENT OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE AO, SATISFACTORY. HOWEVER, IN THE INSTANT CASE I FIND SUFFICIENT CASH IS AVAILABLE WITH THE ASSE SSEE IN THE CASH BOOK, THE EXTRACTS OF WHICH ARE PLACED AT PAGES 19 TO 39 OF THE PAPER BOOK. THE DEPOSITS MADE IN THE BANK ACCOUNT ARE MENTIONED IN THE SAID CASH BOOK. THERE IS NO DEFICIT CASH ON ANY O F THE DATES WHEN THE DEPOSITS ARE MADE. THE BOOKS OF ACCOUNT SO P RODUCED BEFORE THE AO AND THE CIT(A) HAVE NEITHER BEEN REJECTE D BY THE AO NOR BY CIT(A) AS FALSE OR UNTRUE. THEREFORE, WHEN SUFFICIEN T CASH BALANCE IS AVAILABLE WITH THE ASSESSEE AND THE DEPOSITS WE RE STATED TO BE MADE OUT OF SUCH CASH AVAILABLE WITH HIM AND THE DEPOS ITS ARE 12 ITA NO.1491/PN/2016 DULY RECORDED IN THE BOOKS OF ACCOUNT, THEREFORE, THE PR OVISIONS OF SECTION 69 IN MY OPINION ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THIS VIEW OF THE MATTER, I SET ASIDE THE ORDE R OF THE CIT(A) ON THIS ISSUE AND DIRECT THE AO TO DELETE THE ADDITION OF RS.2 4,62,000/- MADE BY HIM U/S.69 OF THE I.T. ACT, 1961. THE GROUND RAIS ED BY THE ASSESSEE IS ACCORDINGLY ALLOWED. 28. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 09-09-2016. SD/- ( R.K. PANDA ) ACCOUNTANT MEMBER PUNE ; DATED : 09 TH SEPTEMBER, 2016. '# $# / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE COPY // // TRUE COPY // // $ % //UE &' % * / SR. PRIVATE SECRETARY *, / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT (A) - 5 , PUNE 4. THE CIT-5, PUNE 5. $ %%* , * , SMC BENCH / DR, ITAT, SMC BENCH PUNE; 6. 2 / GUARD FILE.