SHANKAR LAL KAHANDELWAL, Jaipur V. ACIT, Jaipur

ITA 152/JPR/2011

• Counselvise Citation: 15223114 RSA 2011
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 24-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K L MOOLCHANDAN I; R K KHUNTETA
• Keywords: Depreciation; Additional evidence
• Section: 40A(3); 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO.152/JP/2011 ASSESSMENT YEAR 2003-04 PAN: ADRPK 5003 F SHRI SHANKAR LAL KHANDELWAL VS. THE ACIT A-2, RANA PRATAP NAGAR CENTRAL CIRCLE- 1 JHOTWARA, JAIPUR JAIPUR (APPELLANT ) (RESPONDENT) ITA NO.226/JP/2011 ASSESSMENT YEAR 2003-04 PAN: ADRPK 5003 F THE ACIT VS SHRI SHANKAR LAL KHANDELWAL CENTRAL CIRCLE- 1 A-2, RANA PRATAP NAGAR JAIPUR JHOTWARA, JAIPUR (APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI K.L. MOOLCHANDANI & SHRI R.K . KHUNTETA DEPARTMENT BY : SHRI SUNIL MATHUR DATE OF HEARING: 7-07-2011 DATE OF PRONOUNCEMENT:19-08-2011 : ORDER PER N.L. KALRA, AM:- THE ASSESSEE AS WELL AS REVENUE HAVE FILED APPEALS AGAINST THE ORDER OF THE LD. CIT(A)-CENTRAL, JAIPUR DATED 31-12-2010 FOR THE ASSESSMENT YEAR 2003-04. 2 2.1 THE FIRST GROUND OF APPEAL OF THE ASSESSEE IS T HAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 3,18,073/- BY CONFIRMING THE DISALLOWANCE @ 15% ON CONSTRUCTION AND WIP EXPENSES AS AGAINST DISALLOWANCE OF RS. 12.00 LACS MADE BY THE AO. 2.2 THE REVENUE IN GROUND NO. 1 IS AGGRIEVED AGAINS T THE RELIEF ALLOWED BY THE LD. CIT(A) TO THE EXTENT OF RS. 8,81,927/- B Y RESTRICTING THE EXPENSES TO RS. 3,18,073/-. 2.3 WE HAVE HEARD BOTH THE PARTIES. THIS ISSUE IS T HE SAME WHICH WE HAVE CONSIDERED WHILE DECIDING THE APPEAL FOR THE ASSESS MENT YEARS 2008-09 AND 2007-08 OF THE ASSESSEE. IN CASE THE DISALLOWANCE A S CONFIRMED BY THE LD. CIT(A) IS ADDED TO THE NET PROFIT THEN THE NET PROF IT RATE WILL COME TO 20.89%. DURING THE YEAR, THE ASSESSEE HAS SOLD TWO PROPERTIES AND THE DETAILS ARE AVAILABLE AT PAGE 18 OF THE PAPER BOOK. THE CON STRUCTION COST ON TWO PLOTS PURCHASED IS RS. 370/- AND RS. 398/- PER SQ. FT. THE PROFIT DISCLOSED IS 9% ON BOTH THE PROPERTIES. IT IS TRUE THAT ALL EXPE NSES ARE NOT VERIFIABLE. THE CONSTRUCTION COST SHOWN BY THE ASSESSEE CANNOT BE C ONSIDERED AS UNREASONABLE. THE PROFIT SHOWN IS RS. 1,76,880/-. L OOKING TO THE QUANTUM OF PROFIT AND THE NET PROFIT RATE AS SHOWN AT 9% BY TH E ASSESSEE AND CONSIDERING THE TURNOVER OF RS. 20.10 LACS, WE FEEL THAT IT WI LL BE FAIR AND REASONABLE TO RESTRICT THE DISALLOWANCE AT RS. 24,000/-. 3 3.1 THE SECOND GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 1,85,24 0/- U/S 40A(3) OF THE ACT. 3.2 WE HAVE HEARD BOTH THE PARTIES. FOLLOWING OUR O RDER FOR THE ASSESSMENT YEAR 008-09, WE HOLD THAT NO DISALLOWANC E U/S 40A(3) OF THE ACT IS TO BE MADE BECAUSE THE BOOKS OF ACCOUNTS ARE BEI NG REJECTED. 4.1 THE THIRD GROUND OF APPEAL OF THE ASSESSEE IS T HAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 50,000/- OU T OF ADDITION OF RS. 1,35,100/- MADE BY THE AO BY ESTIMATING THE NET PRO FIT RATE FROM JOB WORK AT RS. 1,35,100/-. 4.2 THE ASSESSEE HAS SHOWN JOB WORK RECEIPTS OF RS. 3,47,485/- . THE ASSESSEE CLAIMED JOB WORK EXPENSES OF RS. 3,12,385/ -. THE NET PROFIT OF RS. 35,100/- WAS DECLARED. THE AO ESTIMATED THE NET PRO FIT AT RS. 1.35 LACS AND ACCORDINGLY MADE THE ADDITION OF RS. 1.00 LAC. 4.3 THE LD. CIT(A) RESTRICTED THE DISALLOWANCE OUT OF EXPENSES AT RS. 50,000/- AND THE BALANCE WAS DELETED. 5.1 THE REVENUE IN GROUND NO. 4 IS AGGRIEVED AGAINS T THE RELIEF OF RS. 50,000/-. 5.2 WE HAVE HEARD BOTH THE PARTIES. WHILE DECIDING THE APPEAL FOR THE ASSESSMENT YEAR 2004-05, WE HAVE UPHELD THE FINDING OF THE LD. CIT(A) ON THIS ISSUE. FOLLOWING OUR FINDINGS FOR THE ASSESSME NT YEAR 2004-05, WE FEEL 4 THAT THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION TO THE EXTENT OF RS. 50,000/-. HENCE, GROUND NO. 3 OF THE ASSESSEE A ND GROUND NO. 4 OF THE REVENUE ARE DISMISSED. 6.1 THE 4 TH GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OUT OF TAXI EX PENSES TO THE EXTENT OF 20% AS AGAINST DISALLOWANCE OF 1/3 RD OF TAXI EXPENSES MADE BY THE AO. 6.2 THE 5TH GROUND OF APPEAL OF THE ASSESSEE IS THA T THE LD. CIT(A) HAS ERRED IN RESTRICTING THE CLAIM OF DEPRECIATION ON T AXIES TO THE EXTENT OF THE POSITIVE INCOME FROM TAXIES. 6.3 THE REVENUE IN GROUND NO. 2 IS AGGRIEVED AGAINS T THE FINDING OF THE LD. CIT(A). 6.4 THIS ISSUE HAS BEEN CONSIDERED WHILE DECIDING T HE APPEAL IN THE CASE OF THE ASSESSEE FOR DIFFERENT ASSESSMENT YEARS. DUR ING THE YEAR UNDER REFERENCE, THE ASSESSEE WAS HAVING 5 TAXIES FOR THE FULL YEAR AND ONE TAXI FOR 147 DAYS. LOOKING TO THE HIRING RATES OF TAXIES DUR ING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION, WE FEEL THAT IT WILL BE FAIR AND REASONABLE TO ESTIMATE THE INCOME AT RS. 60,000 /- AFTER ALLOWING DEPRECIATION. THUS GROUND NO. 2 OF THE REVENUE AS W ELL AS GROUND NOS. 4 & 5 OF THE ASSESSEE ARE PARTLY ALLOWED. 5 7.1 THE 6 TH GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 30.00 LACS ON ACCOUNT OF ALLEGED SUPPRESSION AND SALE CONSIDERATION ON THE BASIS OF PAPER NO 25/23 OF ANNEXURE A-25. 7.2 THE FINDINGS OF THE AO AND THE LD. CIT(A) ARE S IMILAR AS GIVEN IN THE ASSESSMENT YEAR 2008-09 AND 207-08. 7.3 BEFORE US, THE LD. AR HAS FILED THE FOLLOWING S UBMISSIONS. OBVIOUSLY THE FINDINGS OF THE AUTHORITIES BELOW ON THE POINT ARE DEVOID OF MERITS AND ARE ASSAILED FOR THE FOLLOWING REASONS: (A) ON CAREFUL STUDY OF THE PAPER UNDER CONSIDERATION (PAGE 23-25 OF EX. A-25 WHICH IS PLAC ED IN THE PAPER BOOK AT PAGE NO. 21 & 22 FOR READY REFERE NCE) YOUR HONORS WOULD APPRECIATE THAT THE AFORESAID PAP ER IS ACTUALLY A DEAF AND DUMB PAPER FOR THE FOLLOWING RE ASONS: (I) ON PERUSAL OF THE SAID PAPERS, YOUR HONORS WOUL D NOTE THAT THESE ARE COPIES OF A PRINT OUT OF PROPE RTY A/C GROUP SUMMARY FOR TWO FINANCIAL YEARS I.E. 1 ST APRIL, 2006 TO 31 ST .MARCH, 2007 & 1ST APRIL, 2005 TO 31 ST MARCH, 2006. ON THE BLANK SPACE OF THESE SHEETS, TH ERE IS ROUGH JOTTINGS AND WORKING IN HAND. ON CAREFUL STUD Y OF THESE JOTTINGS YOUR HONORS WOULD NOTE THAT THERE IS NO MENTION OF ANY DATE, MONTH OR YEA R, MEASUREMENT OR ANY SIZE OF THE PLOT OR PROPERTY IN HAND WRITTEN JO TTINGS, THERE IS NO MENTION OF THE NATURE OF PROPERTY I.E. WHETHER IT IS A PLOT OR A FLAT, THERE IS NO SPECIFICATION OF THE DIGITS DENOTING THE EXACT AMOUNT OF THE SALE CONSIDERATION AS PER THE LIST OF THE PROPERTIES SOLD DURING THE YEAR UNDER CONSIDERATION. IT IS NOT UNDER-STOOD FROM WHERE THE AUTHORITIES BELOW COULD DEDUCE THE SHOWN FIGURES IN LACS , WHEN THERE IS NO SPECIFIC MENTION OF LAC ANY WHERE IN 6 THE HAND-WRITTEN JOTTINGS. IN THE CIRCUMSTANCES, TH E APPELLANT HAD BEEN CORRECTLY PLEADING THAT THESE AR E DEAF AND DUMB PAPERS ONLY CARRYING NO EVIDENTIARY VALUE AS OPINED BY NUMBER OF JUDICIAL AUTHORITIES IN NUMBER OF CASES AS REFERRED TO IN THE WRITTEN SUBMISSION MADE FROM TIME TO TIME .(KINDLY REFER TO PAGE NO. 11-12 OF PB). IN VIEW OF THESE FACTS, IT IS ESTABLISHED BEYOND DOUBT THAT THESE PAPERS ARE DEAF AND DUMB PAPERS AS BEING PLEA DED BEFORE THE AUTHORITIES BELOW. (II) NOW COMING TO THE CORRECTNESS OF THE CHART AS DRAWN BY THE LD. AO AT PAGE NO. 7 OF THE ASSESSM ENT ORDER, YOUR HONORS WOULD NOTE THAT THE PROPERTY FOR WHICH ADDITION OF RS.30,00000/- WAS MADE IS SHOWN AT S.N O.1 AS 8A, KALYANPURI. ON CAREFUL STUDY OF THE JOTTINGS ON THESE PAPERS, YOUR HONORS WOULD NOTE THAT THERE IS NO SPECIFIC MENTION OF ANY SUCH PROPERTY KNOWN AS 8A , KALYANPURI IN SUCH JOTTINGS. FURTHER IT WOULD BE NOTED THAT KALYANPURI HAD BEEN MENTIONED AT 4 PLACES IN BOTH THE SHEETS, MENTIONING DIFFERENT DIGITS AGAINST EA CH OF KALYANPURI LIKE 45, 15X2, 07- 25X2 30 ETC. IN THE CIRCUMSTANCES, IT IS NOT UNDERSTOOD ON WHAT BASIS T HE AO COULD CONCLUDE THAT THE PROPERTY KNOWN AS 8A, KALYANPURI WAS THE PROPERTY AGAINST WHICH 45 DIGIST WAS MENTIONED. MORE-OVER THE APPELLANT DID NEVER OWN SO MANY PROPERTIES IN KALYANPURI AS MENTINED ON SUCH SHEETS. ALL THESE FACT GO TO SHOW THAT ALL THESE JO TTINGS ARE ROUGH WORKING ONLY AND NOTHING ELSE. AGAIN IT IS AL SO RELEVANT TO POINT OUT HERE THAT THE SAID PLOT NO.8, KALYANPURI WAS SUB-DIVIDED IN TWO PARTS (1/2 EACH) AS 8 & 8A. ONE PART OF THIS PLOT WAS SOLD ON 20.04.2002 FOR RS.7 LAC AND SECOND PART WAS SOLD ON 16.8.2002 FOR RS. 8 LAC. IT IS WORTHWHILE TO MENTION THAT AO HAS ACCEPTED TH E PURCHASE AMOUNT OF THE SAID PLOT . AS BOTH THE PARTS OF THE SAID PLOT WERE SOLD LONG BACK SAY IN F.Y. 2002-03 SO THERE APPEARED NO LOGIC TO MENTION DETAILS OF THE S ALE OF SUCH PLOTS ON THE COMPUTERIZED PRINTS OUT FOR THE F .Y. ENDING ON 31.3.2006 & 31.3.2007 I.E. AFTER THE LAPS E OF 4- 5 YEARS. THUS IN THE GIVEN CIRCUMSTANCES, THE SA ID 7 JOTTINGS CAN SAFELY BE TAKEN A DEAF AND DUMB AS CONTENDED BY THE APPELLANT. IN VIEW OF ABOVE DISCUSSIONS, IT IS PROVED BEYOND DOUBT THAT THE JOTTINGS AS CONTAINED IN THE AFORESA ID EXHIBITS ARE DEAF AND DUMB JOTTINGS AND CARRY NO EVIDENTIARY VALUE. HERE IT WOULD NOT BE OUT OF PLAC E TO MENTION THAT AT THE TIME OF SEARCH OPERATIONS ALSO, THE APPELLANT WAS CONFRONTED WITH THESE PAPERS AND WAS SPECIFICALLY REQUIRED TO EXPLAIN THE NATURE OF THES E JOTTINGS. AT TIME ALSO, THE APPELLANT HAD EXPLAINED THE NATURE OF SUCH JOTTINGS FOR WHICH THE CONCERNED AUTHORIZED OFFICER FELT SATISFIED AND DID NOT ATTAC H MUCH IMPORTANCE TO SUCH DEAF AND DUMB PAPER AND ACCORDIN GLY DID NOT INSIST FOR ANY DISCLOSURE OF ADDITIONAL INC OME ON THE BASIS OF THESE EXHIBITS. RELEVANT EXTRACT FROM HIS STATEMENT IS REPRODUCED HERE-UNDER FOR READY REFERE NCE: IZU 18 ESA VKIDKS ANNEX. A-17, A-25 O A-28 FN[KK JGK GWA A D`I;K CRK;S FD BLESA FDL RJG DS FOOJ.K NTZ GS A MRRJ % BUESA LS VF/KDRJ PROPERTY DH [KJHN FCDZH LS LACAF/KR DKXTKR GS A ANNEX A-17 , IJ IST LA[;K 23 LS 47 ESA FOFHKUU O;FDR;KSA LS IZKIR DH XBZ JKFK;KSA RFKK FOFHKUU O;FDR;KSA DKS FD;S X;S HKQXRKUKSA DH DETAILS GS A ANNEX. A- 25 DS IST LA[;K 23 LS 25 ESA FOFHKUU PROPERTIES DH DETAILS 'KKFEY GS A RFKK BL ANNEX. DS IST LA[;K 1 LS 4 ESA GEKJS }KJK [KJHNS O CSPH XBZ PROPERTIES DH DETAILS FY[KH XBZ GS A FY[KH XBZ GS A FY[KH XBZ GS A FY[KH XBZ GS A A-28 ESA FOFHKUU FINANCIAL TRANSACTIONS FY[KS GQ, GS A ANNEX. A-24 ESA HKH BLH IZDKJ DH PROPERTIES DH DETAILS FY[KH GQBZ GS A FURTHER THE ABSURDITY OF THIS ADDITION CAN VERY WEL L BE UNDER-STOOD FROM THE FACTS AS DISCUSSED IN THE F ORE- GONE PARAS WHILE DISPUTING THE ADDITIONS OF RS. 12,00,000/- AS MADE BY AO. & REDUCED TO RS.3,18,07 3/- BY THE LD. CIT (A) UNDER THE HEAD OF CONSTRUCTION EXPENSES. WHILE MAKING AND CONFIRMING SUCH ADDITION 8 ON ACCOUNT OF CONSTRUCTION EXPENSES, THE AUTHORITIE S BELOW HAD OUT-RIGHTLY IGNORED THE ADDITION AS MADE AND CONFIRMED BY THEM ON THE BASIS OF SUCH DEAF AND DUM B PAPER ON ACCOUNT OF THE ALLEGED SUPPRESSED SALES AS BEING APPREHENDED BY THEM. WHILE MAKING AND CONFIRMING THE ADDITION ON ACCOUNT OF THE CONSTRUCT ION EXPENSES, NEITHER DID THEY HAD TAKEN CARE OF SUCH ALLEGED SUPPRESSED SALES NOR DID THEY TAKE CARE OF THE CONSEQUENT N.P RESULTS ON ACCOUNT OF SUCH ALLEGED SUPPRESSED SALES. IF ALL THE ADDITIONS AS CONFIRME D BY THE CIT (A) UNDER BOTH THE HEADS ARE TAKEN TOGETHER T HEN THE PERCENTAGE OF THE N.P. WOULD GO TO UN-IMAGINED HEIGHTS OF WHICH IS RATHER IMPOSSIBLE IN THIS LINE OF BUSINESS WHICH IS IN THE VICINITY OF 8 TO 10%. AS P ER RULES OF ACCOUNTANCY, SUPPRESSED SALES IS PART OF T RADING RESULTS ONLY. ONCE TRADING RESULTS ARE ESTIMATED AF TER REJECTING THE BOOKS U/S 145(3) OF THE ACT, THEN NO FURTHER ADDITION IS WARRANTED ON ACCOUNT OF ANY OTHER DEFEC T OR DEFICIENCY. BEFORE PARTING WITH THE POINT AT ISSUE, IT WOULD BE IN THE FITNESS OF THINGS TO BRING IT ON RECORD THAT THE JOTTINGS UNDER CONSIDERATION ARE APPEARING ON THE COMPUTER PRINT-OUTS OF THE PROPERTY A/C PERTAINING TO THE FINANCIAL YEARS 2006-07 AND PRECEDING YEAR, MEANIN G THEREBY THESE PRINT-OUTS COULD BE OBTAINED ONLY AFT ER THE FINANCIAL YEAR ENDING ON 31.03.2007. THUS AS A NATU RAL COROLLARY, THE JOTTINGS ON SUCH SHEETS COULD BE MAD E ONLY AFTER 31.03.2007 ONLY. IN THE CIRCUMSTANCES, SUCH J OTTINGS COULD NOT BE AUTHENTIC IN ANY CIRCUMSTANCES. HAVING CONSIDERED THE ABOVE FACTS, YOUR HONOR WOULD APPRECIATE THAT THE AUTHORITIES BELOW HAVE MA DE AND CONFIRMED THE ADDITION OF RS.30,00,000/- WITHOU T ANY VALID GROUND. WITHOUT PREJUDICE TO THE ABOVE CONTEN TIONS, THIS ADDITION IS FURTHER ASSAILED ON THE FOLLOWING LEGAL AND TECHNICAL GROUNDS:- 9 (I) WHILE MAKING SUCH ADDITION, THE LEARNED AO DID NOT MENTION ANY SECTION OF LAW UNDER WHICH HE WAS MAKING THIS ADDITION. AS PER JUDICIAL DISCIPLINE , THE LD. AO WAS LEGALLY REQUIRED TO MENTION THE RELEVANT SECTION OF LAW FOR WHICH HE WAS MAKING THE ADDITION. FOR SUCH LAPSE, THE ADDITION SO MADE IS BAD IN LAW AND DESERVES TO THE DELETED IN LIMINE. (II) AGAIN THE AUTHORITIES BELOW SEEM TO BE CONFUSED ABOUT THE EXACT NATURE OF THE ADDITION SOUGHT TO BE MADE/CONFIRMED BY THEM. THEY HAD OPINED THAT THESE ARE SUPPRESSED SALES. IN THAT CASE, ONLY N.P. EARNED ON SUCH SUPPRESSED SALES IS TO BE TAKEN INTO ACCOUNT, WHEREAS THE AUTHORITIES BELOW HAD ADDED THE ENTIRE AMOUNT OF THE SUPPRESSED SALES. THUS THE ADDITION SO MADE IS CONTRARY TO THE PRINCIPLES OF ACCOUNTANCY. IN SUCH CASE THE LOGICAL ADDITION WOULD BE TO THE EXTENT OF N.P. EARNED ON SUCH SUPPRESSED SALES ONLY AND NOT THE ENTIRE SALE CONSIDERATION AS DONE BY THE AUTHORITIES BELOW. IN VIEW OF ABOVE DISCUSSIONS, THE ADDITION AS CONFIRMED BY THE LEARNED CIT (A) ON THIS ACCOUNT IS NOT FACTUALLY AND LEGALLY MAINTAINABLE AND DESERVES TO BE DELETED. 7.4 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW AND REITERATED THE SAME SUBMISSIONS AS HAVE B EEN GIVEN WHILE ARGUING THE APPEAL IN THE CASE OF THE ASSESSEE FOR THE ASSE SSMENT YEAR 2008-09. 7.5 WE HAVE HEARD BOTH THE PARTIES. THE AO HAS ADOP TED THE SALE CONSIDERATION AT RS. 45.00 LACS AS AGAINST RS. 51.0 0 LACS SHOWN BY THE ASSESSEE IN RESPECT OF PROPERTY AT 8-A, KALYANPURI. WE HAVE CONSIDERED THE 10 WRITTEN SUBMISSION GIVEN BY THE LD. AR. THERE IS NO SPECIFIC REFERENCE OF THE PROPERTY OF 8-A, KALYANPURI IN PAGES 23 AND 25 OF A NNEXURE A-25. THE COMPUTER SHEET CONTAINS THE DETAILS OF PROPERTIES F OR FINANCIAL YEAR 2006-07 AND 2005-06. HENCE, THE ENTRIES ARE NOT RELEVANT FO R THE ASSESSMENT YEAR UNDER CONSIDERATION. THE AO HAS NOT COLLECTED ANY E VIDENCE TO SUGGEST THAT ADDITIONAL CONSIDERATION HAS BEEN RECEIVED. HENCE, WE FEEL THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 30.00 LACS. 8.1 THE 7 TH GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1,79,310/- U/S 68 OF THE ACT. 8.2 THE REVENUE IN GROUND NO. 3 IS AGGRIEVED AGAINS T DELETION OF ADDITION OF RS. 12.01 LACS FROM THE ADDITION OF RS. 23,80,31 0/- MADE BY THE AO. 8.3 THE REVENUE IN GROUND NO. 7 IS AGGRIEVED FOR AD MISSION OF ADDITIONAL EVIDENCES BY THE LD. CIT(A). 8.4 WE HAVE HEARD BOTH THE PARTIES. WE HAVE ALREAD Y HELD WHILE DECIDING THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09 THAT THE LD. CIT(A) WAS JUSTIFIED IN ACCEPTING THE ADDITIONAL EV IDENCES. HENCE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION ON TH E BASIS OF THE CONFIRMATIONS AND THE AFFIDAVITS. 8.5 THE LD. CIT(A) HAS CONFIRMED THE ADDITION OF RS . 1.00 LAC U/S 68 OF THE ACT IN THE NAME OF SHRI S.S. GUPTA. 11 8.6 BEFORE US, THE LD. AR HAS SUBMITTED THAT THE AS SESSEE HAS FILED THE CONFIRMATION LETTER CONTAINING THE DETAILS OF PAN , IDENTITY AND ADDRESS OF THE CREDITOR. THE DEPOSIT WAS MADE THROUGH BANK CHE QUE. HENCE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION BECAUSE THE ASSESSEE HAS FILED THE CONFIRMATIONS AND OTHER NECESSARY DETAILS AND ONUS STANDS DISCHARGED BY THE ASSESSEE. 8.7 THE LD. CIT(A) HAS CONFIRMED THE ADDITION OF RS . 5.00 LACS IN THE NAME SHRI SUSHIL JHALANI. THE ASSESSEE HAS PRODUCED THE BOOKS OF ACCOUNTS OF SHRI SUSHIL JHALANI AND HENCE THE CREDIT IN THE NAME OF SHRI SUSHIL JHALANI WAS REQUIRED TO BE ACCEPTED. SIMILARLY, THE CONFIRM ATION IN RESPECT OF SMT. LONG SHREE DEVI WAS ALSO FILED. SINCE THE ASSESSEE HAS FILED THE CONFIRMATIONS WHICH HAVE NOT BEEN FOUND AS FALSE OR INCORRECT, THEREFORE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDI TION OF RS. 11,79,310/-. HENCE GROUND NO. 7 OF THE ASSESSEE IS ALLOWED WHILE GROUND NO. 3 AND 7 OF THE REVENUE ARE DISMISSED. 9.1 THE REVENUE IN GROUND NO. 5 IS AGGRIEVED AGAINS T THE RELIEF ALLOWED BY THE LD. CIT(A) TO THE EXTENT OF RS. 17,19,200/-. 9.2 THE AO IN HIS ORDER HAS MENTIONED THAT THE ASSE SSEE HAS NOT FURNISHED THE PURCHASE DEED AND THEREFORE, THE CONSIDERATION FOR PURCHASE OF PROPERTY IS NOT VERIFIABLE. THE AO THEREFORE, ADDED A SUM OF RS. 17,19,200/-. 12 9.3 BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT TH E ASSESSEE WAS NOT HAVING PURCHASE DEED BECAUSE THE PROPERTY STOOD SO LD AND DEEDS HAVE BEEN GIVEN TO THE BUYER. 9.4 BEFORE THE LD. CIT(A), THE COPY OF SUCH DEEDS H AVE BEEN FURNISHED. IT WAS ALSO SUBMITTED BEFORE THE LD. CIT(A) THAT SUCH DEEDS WERE FURNISHED ON THE LAST DATE OF HEARING BEFORE THE AO. 9.5 SUCH DEEDS/ AGREEMENTS WERE GIVEN TO THE AO FOR HIS COMMENTS. THE PURCHASE CONSIDERATIONS ARE RECORDED IN THE BOOKS O F ACCOUNTS. THE LD. CIT(A) THEREFORE, DELETED THE ADDITION. 9.6 WE HAVE HEARD BOTH THE PARTIES. AFTER CONSIDERI NG THE FINDING OF THE LD. CIT(A), WE FEEL THAT THERE IS NO INFIRMITY IN T HE ORDER OF THE LD. CIT(A). HENCE, GROUND NO. 5 OF THE REVENUE IS DISMISSED. 10.1 THE REVENUE IN GROUND NO. 6 IS AGGRIEVED THAT THE LD. CIT(A) HAS ERED IN DELETING THE ADDITION OF RS. 1,58,600/- ON ACCOU NT OF DISALLOWANCE U/S 40A(3) OF THE ACT. 10.2 WE HAVE HEARD BOTH THE PARTIES. WE HAD ALREADY HELD THAT NO DISALLOWANCE U/S 40A(3) IS TO BE MADE WHEN THE BOOK S OF ACCOUNTS ARE TO BE REJECTED. HENCE GROUND NO. 6 OF THE REVENUE IS DISM ISSED. 13 11.1 THE GROUND NO. 8 OF THE REVENUE AND THE GROUND NO. 9 OF THE ASSESSEE ARE AGAINST THE DIRECTION OF THE LD. CIT(A ) TO GIVE SET OFF FOR THE UNACCOUNTED/ SUPPRESSED SALE CONSIDERATION. 11.2 THIS ISSUE IS ACADEMIC AS THERE IS NO CASE BEF ORE US FOR TELESCOPING THE ADDITION. 12.1 THE 8 TH GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. C IT(A) SHOULD HAVE HELD THE ASSESSMENT ORDER AS AB INITIO VOID. 12.2 WE HAVE HEARD BOTH THE PARTIES. WHILE DECIDING THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2004-05, WE HAD HE LD THAT THE ORDER CANNOT BE HELD AS AB INITIO VOID. 13. IN THE RESULT, THE APPEALS OF THE ASSESSEE AS W ELL AS OF THE REVENUE ARE PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 19-08 -2011 SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 19/08/2011 *MISHRA COPY FORWARDED TO :- 1. SHRI SHANKAR LAL KHANDELWAL, JAIPUR 2. THE ACIT, CENTRAL CIRCLE- 1 JAIPUR 3. THE LD. CIT BY ORDER 4. THE LD. CIT(A) 5. THE LD.DR 6. THE GUARD FILE (ITA NO.152/JP /11) A.R, ITAT, JAIPUR 14 15