Shri Saktipada Koley, Burdwan V. ITO, Ward - 1(2), Burdwan, Burdwan

ITA 1559/KOL/2008

• Counselvise Citation: 155923514 RSA 2008
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2011
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 12-08-2008
• Court: TRIBUNAL
• Department Lawyers: S BHA DRA
• Assessee Lawyers: J M THARD
• Keywords: Business income; Peak credit
• Section: 37; 133(6)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE . .. . . .. . , , , , , SHRI B.R.MITTAL, JUDICIAL MEMBER. /AND . .. .!' !'!' !'. .. . , #$ SHRI C.D.RAO, ACCOUNTANT MEMBER % % % % / ITA NO . 1559/KOL/2008 &' ()/ ASSESSMENT YEAR : 2004-05 (+, / APPELLANT ) SRI SHAKTIPADA KOLEY (PAN: AELPK 9206 M) - & - - VERSUS - . (./+,/ RESPONDENT ) I.T.O., WARD-1(2), BURDWAN +, 0 1 #/ FOR THE APPELLANT: SHRI J.M.THARD ./+, 0 1 #/ FOR THE RESPONDENT: SHRI S.BHADRA #2 / ORDER ( (( ( . .. .!' !'!' !'. .. . ) )) ), , , , #$ PER SHRI C.D.RAO, AM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 16.06.2008 OF THE CIT(A)-ASANSOL PERTAINING TO A.YR. 2004-05. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS OF APPEAL :- 1. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD. A.O. WAS NOT JUSTIFIED IN MAKING ADDITION ON ACCOUNT OF UNDISCLO SED PURCHASE OF RS.24,613.00 IN SPITE OF CONSIDERING RS.1,368.00 AS PROFIT ON SA LE OF UNDISCLOSED PURCHASE. THE C.I.T.(APPEAL), ASANSOL ALSO ERRED IN CONFIRMIN G THIS ADDITION. 2. FOR THAT ON THE FACT AND CIRCUMSTANCES OF THE CA SE THE LD. AO ERRED IN MAKING ADDITION OF RS.1,27,857.00 AS PEAK CREDIT ON ACCOUNT OF UNDISCLOSED BANK ACCOUNT, IN SPITE OF KNOWING THE FACT THAT IT WAS NOTHING BUT THE HBL MONEY. THE CIT(APPEAL),ASANSOL ALSO ERRED IN CONFIR MING THIS AND ENHANCING THE ADDITION BY RS.14,79,043.00 IN SPITE OF KNOWING THE FACT THAT A PORTION OF SALE PROCEEDS WAS KEPT IN THE SAID ACCOUNT AS ALSO DEPOSIT IN C.C.ACCOUNT. 3. FOR THAT ON THE FACT AND CIRCUMSTANCES OF THE CA SE THE LD. AO WAS NOT JUSTIFIED IN MAKING AN ADDITION OF RS.15,000.00 AS INCOME FROM BUS IN SPITE OF 2 THE FACT THAT THE BUS PLIED FOR ONLY THREE MONTHS I N THE YEAR UNDER CONSIDERATION. THE LD. CIT(APPEAL), ASANSOL ALSO ER RED IN CONFIRMING THE ADDITION. 4. FOR THAT ON THE FACT AND CIRCUMSTANCES OF THE CA SE THE LD. AO WAS NOT JUSTIFIED IN MAKING ADDITION OF RS.20,112.00 AS AN INTEREST FOR HBL ON THE PLEA THAT THE HBL MONEY WAS USED FOR THE BUSINESS PURPOS ES. THE LD. CIT(APPEALS) ASANSOL ALSO ERRED IN CONFIRMING THIS ADDITION. 5. FOR THAT ON THE FACT AND CIRCUMSTANCES OF THE CA SE THE LD. AO ERRED IN MAKING AN ADDITION OF RS.2,01,478.00 ON ACCOUNT OF FIXED DEPOSITS IN SPITE OF KNOWING THAT THE ACTUAL DIFFERENCE WAS ONLY RS.1,01 ,478.00 THE LD. CIT(APPEAL), ASANSOL ALSO ERRED IN CONFIRMING THIS ADDITION. 6.IT IS BEGGED BEFORE YOU HONOUR TO GIVE ME RELIEF IN FULL, EXCEPTING RS.1,368.00 ON ACCOUNT OF PROFIT ON UNRECORDED PURCHASE AND RS. 1,01,478.00 ON ACCOUNT OF THE DIFFERENCES IN THE FIXED DEPOSITS. 3. THE BRIEF FACTS OF THIS CASE ARE THAT WHILE DOIN G SCRUTINY ASSESSMENT THE AO MADE THE FOLLOWING ADDITIONS :- (I) ON ACCOUNT OF UNDISCLOSED PURCHASES/UNDISCLOSED SALES OF RS.24,613/- AND RS.1,368 BY OBSERVING THAT THE NATURE OF BUSINESS O F AN ASSESSEE IS MEDICINE DISTRIBUTOR. DURING THE COURSE OF HEARING ASSESSEE SUBMITTED THE LIST OF PARTIES FROM WHOM MEDICINE WAS PURCHASE AS WELL AS NAME AND ADDRESS OF THE PARTIES TO WHOM MEDICINE WAS SOLD. LETTER. SEEKING INFORMAT ION U/S 133(6) WAS SENT TO THE BUYER AS WELL AS TO THE SELLER. ON PERUSAL OF R EPLY RECEIVED FROM SELLER COMPANY AS WELL AS PARTIES WHO HAD PURCHASE MEDICIN E FROM THE ASSESSEE, FOLLOWING DISCREPANCIES WERE DETECTED :-. LETTER SEEKING INFORMATION U/S 133(6) WAS SENT TO M /S S.B.ENTERPRISE FROM WHOM ASSESSEE HAD PURCHASED MEDICINE DURING THE YEA R UNDER CONSIDERATION. ON CROSS EXAMINATION OF THE INFORMATION RECEIVED FR OM M/S. S.B.ENTERPRISE WITH ASSESSEES BOOKS OF ACCOUNTS IT WAS FOUND THAT PURCHASE AMOUNTING TO RS.24,613/- AS WELL AS CASH PAYMENT MADE TO SELLER COMPANY OF RS. 24,6131- WAS NOT RECORDED THERE IN ASSESSEES BOOKS OF ACCOU NTS. SHOW CAUSE LETTER WAS ISSUED TO THE ASSESSEE VIDE LETTER NO.565 DATED 19. 12.2006 FOR EXPLANATION. BUT ASSESSES VIDE HIS WRITTEN SUBMISSION DATED 22.12.20 06 ACCEPTED THAT PURCHASE OF RS. 24,613/- IS NOT RECORDED IN HIS BOOKS OF ACC OUNTS. I THEREFORE ADD BACK RS.24,613/- WITH THE TOTAL INCOME AS UNDISCLOSED EX PENDITURE. SO IT IS CLEAR FROM THE ABOVE THAT ASSESSEE HAD PURCHASE MEDICINE OF RS. 24,613/- AND SAME IS NOT RECORDED THERE IN ASSESSEES BOOKS OF ACCOUN TS. WHEN PURCHASE IS NOT RECORDED THERE IN ASSESSEES BOOKS OF ACCOUNTS THEN THAT UNDISCLOSED PURCHASE SOLD BY THE ASSESSEE IS ALSO NOT RECORDED THERE IN HIS BOOKS OF ACCOUNTS. CONSIDERING THE G.P PERCENTAGE DISCLOSED BY THE ASS ESSEE I.E.( 5.56% OF G.P. PERCENTAGE DRS.24,613/-)WHICH COMES TO RS.1,368/- I S ALSO ADDED BACK WITH TOTAL INCOME OF THE ASSESSEE AS UNDISCLOSED SALE. 3 3.1. ON ACCOUNT OF UNDISCLOSED BANK ACCOUNT HE ADDE D AN AMOUNT OF RS.1,27,857/- BY OBSERVING THAT : ON VERIFICATION OF SAVING ACCOUNT NO.00150065750 O F STATE BANK OF INDIA,. AD.BRANCH, MEMARI WITH RETURNED OF INCOME SUBMITTED TO THE DEPARTMENT IT WAS FOUND THAT SAVING ACCOUNT WHICH WAS OPEN FROM 2 9.09.2003 WAS UNDISCLOSED ACCOUNT OF THE ASSESSEE, WHICH IS NOT D ISCLOSED BEFORE THE DEPARTMENT. ON EXAMINATION OF THAT ACCOUNT IT WAS FOUND THAT NOT ONLY THE LOAN AMOUNTS BUT THERE ARE OTHER CASH AS WELL AS CH EQUES DEPOSITED AND WITHDRAWAL ARE THERE. ON EXAMINATION OF EACH DATE C REDIT BALANCE OF THAT ACCOUNT ,CREDIT BALANCE OF DATED 22.11.2003 IS. RS. 1,27,857/- WHICH IS PECK CREDIT IN THAT ACCOUNT DURING THE PERIOD FROM 29.09 .2003 TO 31.03.2004. SHOW CAUSE NOTICE WAS ISSUED VIDE LETTER NO.565 DATED 19 .12.2006 TO ASSESSEE TO EXPLAIN WHY AN AMOUNT OF RS. 1,27,857/- WHICH IS PE AK CREDIT BALANCE OF UNDISCLOSED ACCOUNT SHOULD NOT BE ADDED BECK WITH T HE TOTAL INCOME FOR FAILURE ON YOUR PART TO DISCLOSE THAT BANK ACCOUNT TO THE D EPARTMENT. ASSESSEE VIDES HIS WRITTEN SUBMISSION DATED 22.12.2006 CLARIFY THE NATURE OF ENTRIES IN THAT SAVING ACCOUNT ONLY BUT FAILED TO EXPLAIN WHY HE DI D NOT DISCLOSE THAT ACCOUNT BEFORE THE DEPARTMENT. HOWEVER I DO NOT AGREE WITH THE SUBMISSION MADE BY THE ASSESSEE AND ADDED BACK PEAK CREDIT BALANCE AN THE DATE OF 22.11.2003 AN AMOUNT OF RS.1,27,857/- WITH THE TOTAL INCOME OF TH E ASSESSEE. 3.2. ON ACCOUNT OF BUS INCOME AT RS.15,000/- BY OBS ERVING THAT : DURING THE COURSE OF HEARING IN SUPPORT OF INCOME FROM BUS ASSESSEE PRODUCED DAILY INCOME AND EXPENDITURE SHEETS AND SHEETS CONT AINING WHOLE YEAR NET COLLECTION. ON PERUSAL OF THE SAME IT WAS FOUND THA T AVERAGE DAILY NET INCOME HAS BEEN SHOWN AT RS.100/- PER DAY AFTER DEDUCTING ALL THE EXPENSES LIKE FUEL, FOODING OF DRIVER, HANDY BOY AND THEIR SALARY. TOTA L CAPACITY OF A BUS IS 42 SEATS AS STATED BY THE ASSESSEE HIMSELF. CONSIDERING THE CAPACITY OF A BUS NET INCOME DISCLOSED BY THE ASSSESSEE OF RS.30,000/- PER ANNUM IS VERY LOW. HENCE HE ADDED BACK RS.15,000/- WITH THE TOTAL INCOME OF THE ASSESSEE WHICH IS QUITE REASONABLE. 3.3. ON ACCOUNT OF HOUSE BUILDING INTEREST OF RS.20 ,112/- BY OBSERVING THAT : DURING THE COURSE OF HEARING ASSESSES WAS ASKED TO EXPLAIN WHY HOUSE PROPERTY WAS NOT DISCLOSED THERE IN THE ASSET SIDE OF THE BALANCE SHEET SUBMITTED ALONG WITH THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. A/R OF THE ASESSEE AND ASSESEE HIMSELF EXPLAIN THAT IT IS NOT REFLECTED IN THE ASSET SIDE OF THE BALANCE SHEET AS BECAUSE INVESTMENT IN THE HOUS E PROPERTY WAS MADE AFTER WITHDRAWING FROM CAPITAL ACCOUNT IN SUPPORT OF THER E CLAIM ASSESSEE SUBMITTED WRITTEN SUBMISSION STATING THEREIN YEAR WISE INVEST MENT IN HOUSE PROPERTY AND SOURCE OF SAME IS STATED AS WITHDRAWAL FROM CAPITAL ACCOUNT FROM THE A.YEAR 2003-04 ONWARDS. BUT IN THE BALANCE SHEET ASSESSEE HAD SHOWN HOUSE BUILDING LOAN TAKEN FROM S.B.I, ADB, MEMARI. ON QUERY ASSESS ES STATED THAT HOUSE BUILDING LOAN AMOUNT WAS UTILIZED IN HIS BUSINESS A CTIVITIES WHEN ASSESSEE WAS 4 ASKED TO PROOF THAT THE LOAN AMOUNT WAS. UTILIZED F OR BUSINESS PURPOSE, ASSESSEE PRODUCED PASS BOCK OF SAVING BANK ACCOUNT WHICH IS MAINTAINED IN THE SBJ,ADB,MEMARI. ON EXAMINATION OF SAID ACCOUNT IT W AS FOUND THAT HOUSE BUILDING LOAN AMOUNT WAS CREDITED IN THAT SAVING AC COUNT ON DIFFERENT DATES. AGAIN THAT AMOUNT WAS TRANSFERRED TO ASSESSESS CAS H CREDIT ACCOUNT MAINTAINED IN THE SAME BANK ON DIFFERENT DATES. SO IT WAS FOUND THAT THE LOAN AMOUNT WAS UTILIZED BY THE ASSESSEE FOR HIS BUSINES S PURPOSE. BAT IN THE RETURNED OF INCOME FOR THE A.YEAR 2003-04 AND 2004- 05 ASSESSEE HAD CLAIMED DEDUCTION OF REPAYMENT OF HOUSE BUILDING LOAN INTER EST. SO IT WAS FOUND THAT LOAN WAS NOT UTILIZED FOR CONSTRUCTION OF HOUSE BUI LDING BUT UTILIZED THE SAME IN HIS BUSINESS ACTIVITIES. HOUSE BUILDING WAS CONSTRU CTED AFTER MAKING WITHDRAWAL FROM CAPITAL ACCOUNT HENCE DEDUCTION CLA IMED FOR REPAYMENT OF HOUSE BUILDING INTEREST IS NOT ALLOWABLE AS BECAUSE HOUSE BUILDING LOAN AMOUNT WAS UTILIZED BY THE ASSESSEE IN HIS BUSINESS ACTIVI TIES AND HOUSE BUILDING WAS CONSTRUCTED WITH ASSESSEES OWN CAPITAL I THEREFORE DISALLOW THE INTEREST PAID AGAINST HOUSE BUILDING LOAN CLAIMED BY THE ASSESSEE FOR THE A. YEAR 2003-04 AND A.YEAR 2004-05. 3.4. ON ACCOUNT OF FIXED DEPOSITS OF RS.2,01,478/- BY OBSERVING THAT : ON PERUSAL OF BALANCE SHEET FOR THE YEAR UNDER CON SIDERATION, IT WAS FOUND THAT FIXED DEPOSIT VALUE OF RE. 2,62,774/- WAS SHOWN BY THE ASSESSEE. LETTER SEEKING INFORMATION WAS SENT TO BANK AUTHORITY. ON PERUSAL OF INFORMATION RECEIVED FROM BANK AUTHORITY, IT WAS FOUND THAT TWO FIXED DE POSITS ARE KEPT AS LIEN IN THE STATE BANK OF INDIA, A.D BRANCH, MEMARI. ON PERUSAL OF COPY OF FIXED DEPOSIT CERTIFICATES SENT BY THE BANK AUTHORITY, IT WAS FOU ND THAT BOTH THE DEPOSITS ARE OLD DEPOSITS. ON PERUSAL OF TDR NO. 551083 INITIAL DEPOSIT WAS ON 19,1.2000 AID MATURITY DATE IS 19.12.2003 AND INITIAL DEPOSIT WAS 1,89,584/- AND RATE OF INTEREST WAS 10% THAT MATURITY AMOUNT OF RS.2,54,96 9/- WAS AGAIN REINVESTED W.E.F 19.12.2003 FOR ANOTHER 36 MONTHS AND INTEREST RATE. WAS 5.5%. THEREFORE, VALUE OF FIXED DEPOSIT AS ON 31.03.2004 IS RS. 2,54 ,969/- PLUS INTEREST FAR 3 MONTHS 21 DAYS COMES TO RS.3,442/-. HENCE TOTAL VAL UE OF FIXED DEPOSIT INCLUDING INTEREST AS ON 31.03.2004 IS RS.2,58,411/ -. ON PERUSAL OF PHOTOCOPY OF ANOTHER FIXED DEPOSIT CE RTIFICATE SENT BANK AUTHORITY, IT WAS FOUND THAT TDR NO. 183036 AND VAL UE OF FIXED DEPOSIT WAS RE. 2,03,279/- AS ON 09.07.2003. THAT MATURITY VALU E WAS AGAIN REINVESTED W.E.F. 09.07.2003 FOR 60 MONTHS AT THE INTEREST RAT E OF 6% THEREFORE VALUE OF FIXED DEPOSIT AS ON 31.03.2004 INCLUDING INTEREST O F RS. 2,562/- COMES TO RS.2,05,841/- TOTAL VALUE OF TWO FIXED DEPOSIT CERT IFICATES COMES TO RS.4,64,252/-. VALUE OF FIXED DEPOSIT SHOWN IN THE BALANCE SHEET BY THE ASSESEE IS RS.2,62,774/-. SO THERE COMES THE DIFFERENCE OF RS.2,01,478/- WHICH IS LESS VALUE OF FIXED DEPOSIT SHOWN BY THE ASSESSEE. SHOW CAUSE LETTER WAS ISSUED TO ASSESSEE. TO EXPLAIN THE SAME. IN COMPLIANCE TO SHO WN CAUSE LETTER ASSESSEE SUBMITTED WRITTEN SUBMISSION AND SATED THAT DUE TO ACCOUNTING MISTAKE IT HAS NOT BEEN SHOWN PROPERLY. NO OTHER EXPLANATION WAS O FFERED BY ASSESSEE. HENCE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSED AC TUAL VALUE OF FIXED DEPOSIT, 5 DIFFERENCE IN VALUE OF FIXED DEPOSIT OF RE. 2,01,47 8/- IS ADDED BACK WITH THE TOTAL INCOME OF THE ASSESSES AS UNDISCLOSED INVESTM ENT. 3.5. ON APPEAL THE LD. CIT(A) HAS CONFIRMED ALL THE ADDITIONS MADE BY THE AO AND IN ADDITION TO THAT, HE ENHANCED INCOME FORM UNDISC LOSED BANK ACCOUNT FROM RS.1,27,857/- TO RS.14,79,043/- BY OBSERVING THAT T HE ASSESSEE HAS FAILED TO EXPLAIN THE CASH DEPOSITS MADE ON DIFFERENT DATES IN THE SAID B ANK ACCOUNT.. 3.6. AGGRIEVED BY THIS THE ASSESSEE IS IN APPEAL BE FORE US. 4. AT THE TIME OF HEARING THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE HAS SUBMITTED THAT THE APPELLANT IS CARRYING ON BUSINESS AS A WHOLESA LE DEALER IN MEDICINE AT P.O. MEMARI DIST. BURDWAN (WEST BENGAL) IN THE NAME & STYLE OF KOLEY MEDICAL STORES AS SOLE PROPRIETOR. THE APPELLANT HAS INCOME FROM HOUSE RENT AND F.D. INTEREST ALSO. RETURN WAS FILED SHOWING TOTAL INCOM E OF RS.92,260/-. THE A.O. COMPUTED THE TOTAL INCOME AT RS.4,61,210/- BY MAKIN G SOME ADDITIONS. ON APPEAL, THE C.I.T.(APPEALS) NOT ONLY DISMISSED THE ASSESSEE S APPEAL BUT ENHANCED THE ADDITION BY RS.4,21,043/- + RS. 10,58,000/- (TOTAL ENHANCEMENT RS. 14,79,043/-). THE APPELLANT SUBMITS THAT THE ORDER PASSED BY THE LD. CIT(APPEALS) IS ERRONEOUS UNJUSTIFIED AND ILL CONCIEVED. THE APPELLANTS SUBM ISSIONS IN RESPECT OF THE GROUNDS TAKEN IN THE APPEAL ARE AS UNDER: 4.1. GR. NO.1 & 6: ADDITION FOR UNDISCLOSED PURCHAS ES RS.24,613/- AND FURTHER ADDITION OF RS. 1,368/- FOR ESTIMATED PROFIT ON SAL E OF SUCH UNDISCLOSED PURCHASES: THE SAID PURCHASE OF MEDICINE FROM ONE M/S S. B. ENTERP RISES IS NOT RECORDED IN THE ASSESSEES ACCOUNTS. IT MAY BE PROBABLE THAT THE PU RCHASE WAS MADE AT THE INSTANCE OF SOME BUYER AND SIMULTANEOUSLY SOLD BY TAKING SOME P ROFIT AND THEREFORE NO RECORDING WAS MADE THEREOF IN THE ACCOUNTS, WHATEVER THE FACT MAY BE, ASSUMING BUT NOT ADMITTING THAT THERE WAS AN OMISSION ON THE PART OF THE APPELLANT, THEN ALSO THE ADDITION OF THE PURCHASE PRICE AS UNDISCLOSED EXPEN DITURE IS BASICALLY WRONG, BECAUSE THE APPELLANT HAS NOT CLAIMED ANY SUCH EXPENDITURE. AT THE MOST, THE ESTIMATED PROFIT ON SALE OF SUCH PURCHASE MAY BE ADDED. THE A.O. HIM SELF HAS ESTIMATED AND ADDED THE PROFIT ON SALE OF THIS PURCHASE AT RS.1,368/- WHICH MAY SUSTAINED AND THE ADDITION OF 6 RS.24,613/- FOR THE VALUE OF THE PURCHASES BE DELET ED. IN SUPPORT OF THIS THE APPELLANT RELIES ON THE DECISION IN THE CASES NOTED BELOW. I) MANMOHAN SADANI VS- CIT 304-ITR-52 (M.P.) II) CIT VS- PRESIDENT INDUSTRIES 258-ITR-654 (GU J). IN BOTH THESE CASES, IT WAS HELD THAT WHERE THE PUR CHASES & SALES ARE NOT ACCOUNTED FOR, ONLY THE INCOME ARISING FROM THE TURNOVER CAN BE TR EATED AS INCOME NOT THE ENTIRE TURNOVER. 4.2. GR. NO.2: - IN THIS GROUND THE APPELLANT HAS O BJECTED TO THE ADDITION OF RS.L,27,857/- IN RESPECT OF THE CREDITS IN THE ASSE SSEES SAVINGS A/C.NO.001 50 065750 WITH SBI A.D.BRANCH, MEMARI BY TREATING THE A/C AS UNDISCLOSED. THE APPELLANT HAS ALSO OBJECTED TO THE ENHANCEMENT OF INCOME BY RS. 1 4,79,043/- BY THE C.I.T.(A). THE A.O. HAD MADE THE ADDITION FOR TWO REASONS. FIRSTLY , IT WAS ALLEGED THAT THE BANK ACCOUNT WAS NOT DISCLOSED TO THE DEPARTMENT AND SEC ONDLY IT WAS OPENED ON 29.09.03, THEREFORE, HE CALCULATED THE PEAK CREDIT BALANCE IN THIS ACCOUNT AT RS. 1,27,857/- AND ADDED SAME AS UNDISCLOSED INCOME OF THE ASSESSEE. I T WAS EXPLAINED BEFORE THE LD. CIT(A) THAT IT WAS NEITHER AN UNDISCLOSED ACCOUNT N OR IT WAS OPENED ON 29.09.03. BOTH THE REASONS WERE MERE PRESUMPTIONS OF THE A.O. THE ACCOUNT EXISTED SINCE LONG AND ALL THE DEPOSITS AND WITHDRAWALS IN THIS BANK ACCOU NT DURING THE YEAR WERE DULY RECORDED IN THE REGULAR ACCOUNT BOOKS OF THE APPELL ANT. IN THE COURSE OF THE APPEAL IT WAS ALSO SUBMITTED BEFORE THE LD. A.O. THAT THE QUE STION OF MAKING ANY ADDITION BY ARRIVING AT A PEAK CREDIT OF SUCH ACCOUNT DID NOT A RISE, AS ALL THE DEPOSITS AND WITHDRAWALS IN THE ACCOUNT WERE DULY RECORDED IN TH E REGULAR ACCOUNTS AND WERE EXPLAINED, AND THE RETURN WAS PREPARED ON THE BASIS OF THESE A/CS. THE A.O. TREATED THE ACCOUNT WITH SBI AS HAVING BEEN OPENED ON 29.09.03 DUE TO MISUNDERSTANDING OF THE BANK STATEMENT BECAUSE THE COMPUTERISED BANK STATEM ENT STARTED FROM 29.09.03 AND PRIOR TO THAT IT WAS THE OLD FASHIONED HAND WRITTEN BANK PASSBOOK. A PHOTO COPY OF THE SAID BANK ACCOUNT, BOTH FOR THE HAND-WRITTEN PERIOD AND THE COMPUTERISED PERIOD IS ENCLOSED IN THE PAPER BOOK AT PAGES 18-24. ALL DEPO SITS AND WITHDRAWALS IN THIS BANK ACCOUNT ARE DULY RECORDED IN THE CASH BOOK OF THE A PPELLANT. A COPY OF RELEVANT PAGES OF THE CASH BOOK FOR THE FINANCIAL YEAR - 1.4.03 TO 31.3.04 FROM WHERE THE CASH DEPOSITS WERE MADE IS ALSO ANNEXED IN THE PAPER BOOK AT PAGE S 30-43. IT IS NOT DENIED THAT THERE 7 WERE SOME SMALL MISTAKES IN THESE ACCOUNTS BUT THES E MISTAKES WERE TOO SMALL SO AS TO CALL FOR ANY ADDITION BY TREATING ALL THE TRANSACTI ONS IN THE BANK ACCOUNT AS UNDISCLOSED MONEY OF THE ASSESSEE. THE ACCOUNTANT WRITING THE A CCOUNTS HAD COMMITTED SOME FOOLISH MISTAKES LIKE THAT HE HAD NOT RECORDED IN T HE CASH BOOK THE OPENING BALANCE IN THE BANK ON 01.04.03 WHICH WAS RS.2,727/- ONLY(VIDE BANK STATEMENT AT P.B. PAGE 21) AND ALSO THE CLOSING BALANCE AT THE CLOSE OF THE YE AR WHICH TOO WAS A SMALL AMOUNT OF RS.3,895/- ONLY (BANK STATEMENT AT P.B. PAGE 24). H OWEVER, ALL DEPOSITS AND WITHDRAWALS IN THE BANK A/C WERE FULLY ACCOUNTED FO R AND ARE EXPLAINED BY THE REGULAR ACCOUNTS OF THE APPELLANT. IN THE COURSE OF HEARING BEFORE THE LD. CIT(A), HE ALSO PROCEEDED WITH A CLOSED MIND AS IF THE ACCOUNT WAS OPENED ON 29.09.03 AND WAS AN UNDISCLOSED ACCOUNT OF THE ASSESSEE. 4.3. WITHOUT CONSIDERING THE ASSESSEES EXPLANATION AGAINST THE ADDITION OF RS.1,27,857/- MADE BY THE A.O., THE CIT(A) RATHER I SSUED A SHOW CAUSE LETTER DTD. 16.4.08 (COPY AT P.B. PAGES 8-9) CALLING UPON THE A SSESSEE TO STATE WHY THE DEPOSITS OF RS.5,48,900/- IN THE SAID BANK ACCOUNT AS UNDER SHO ULD NOT BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE AND THE QUESTION OF GIVING B ENEFIT OF THE PEAK CREDIT DID NOT ARISE. SL.NO. DATE PARTICULARS OF AMOUNT (IN RS) DEPOSITS 1. 28.04.2003 CASH 50,000/- P.B.PAGE 34 2. 05.05.2003 CASH 1,25,000/- P.B.PAGE 35 3. 12.09.2003 CASH 8,900/- P.B.PAGE 36 4. 12.11.2003 CASH 75,000/- FROM HBL 5. 22.11.2003 CASH 1,25,000/- LOAN A/C 6. 05.01.2004 CASH 1,00,000/- P.B.PAGE 28 7. 06.02.2004 CASH 25,000/- 8. 29.03.2004 CASH 40,000/- CC A/C PB PAG E 27 HE ALSO STATED THAT THE INCOME WAS PROPOSED TO BE E NHANCED BY RS.4,21,043/- (RS.5,48,900/- BEING TOTAL DEPOSITS MINUS RS. 1,27, 857/- ADDED BY A.O. IN THE ASSESSMENT). THIS SHOW CAUSE LETTER WAS REPLIED BY LETTER DTD. 21.04.08 (SUBMITTED ON 23.04.08) P.B. PAGE 10 ALONG WITH WHICH XEROX COPY OF THE LEDGER ACCOUNT OF THE S.B.ACCOUNT WITH A COPY OF THE BANK PASS-BOOK AND T HE BANK STATEMENT WERE ALSO FURNISHED TO THE LD. CIT(A) (P.B. PAGES 18-24) AND IT WAS SUBMITTED THAT HE COULD VERIFY EACH AND EVERY ENTRY IN THE BANK ACCOUNT WIT H THE CASH BOOK. IT WAS SPECIFICALLY 8 SUBMITTED THAT ALL CASH DEPOSITS WERE OUT OF SALE P ROCEEDS AND WERE INCORPORATED IN THE CASH BOOK AND THE COPY OF CONCERNED CASH BOOK PAGES HAD ALREADY BEEN SUBMITTED EARLIER. LATER BY LETTER DTD.04.06.2008 TO THE CIT( A) (P.B. PAGE 13), THE DEPOSITS IN THE S.B.A/C WITH S.B.I. WERE AGAIN EXPLAINED. IT WAS SH OWN THAT THE THREE DEPOSITS IN CASH WERE OUT OF SALE PROCEEDS AND BALANCE OF THE DEPOSI TS WERE BY WAY OF TRANSFER FROM OTHER BANK A/CS OF THE ASSESSEE-NAMELY HBL LOAN A/C & C.C. A/C WITH THE SAME BANK. IT WAS SUBMITTED THAT EACH DEPOSIT WAS PROPER LY EXPLAINED AND THERE WAS NO OMISSION AND THE ADDITION PROPOSED WAS NOT JUSTIFIE D. 4.4. CURIOUSLY, IN PLACE OF UNDERSTANDING AND APPR ECIATING THE FACTS AND THE ACCOUNTS THE LD. CIT(A) ISSUED ANOTHER LETTER DTD.2 7.05.2008 (P.B.PAGES- 1 1&12) GIVING ANOTHER LIST OF THE DEPOSITS IN THE ASSESSEE S C.C. ACCOUNT (CASH-CREDIT A/C) WITH THE BANK TOTALLING RS. 10,48,000/- AND REQUIRI NG THE ASSESSEE TO EXPLAIN THE SOURCE OF THESE DEPOSITS AND TO STATE WHY THE DEPOSITS OF RS. 10,48,000/- IN THE BANK A/C AND A REPAYMENT OF LOAN OF RS. 10,000/- IN THE HBL A/C SH OULD NOT BE FURTHER ADDED TO THE INCOME AND THAT HE PROPOSED TO ENHANCE THE INCOME B Y THE SAID FURTHER SUM OF RS.10,58,000/-OVER AND ABOVE THE ENHANCEMENT OF RS. 4,21,043/- PROPOSED BY HIS EARLIER LETTER. 4.5 THE APPELLANT REPLIED TO THIS SECOND SHOW-CAUS E BY LETTER DATED 04.06.2008 CLEARLY EXPLAINING THE SOURCE OF ALL THE DEPOSITS M ADE IN THE SAID BANK ACCOUNT (LETTER DTD.04.06.2008 IS AT P.B PAGE-13). ALONGWITH THIS L ETTER COPIES OF THE STATEMENTS OF THE ASSESSEES C. C. ACCOUNT & HBL LOAN A/C WITH THE BA NK WERE ALSO ENCLOSED. THE APPELLANT EXPLAINED THAT THE DEPOSITS WERE ALL BY W AY OF REPAYMENTS TO THE BANK IN THE CC LOAN A/C AND WERE OUT OF SALE PROCEEDS CREDITED IN THE SALES ACCOUNT IN THE CASH BOOK. IT WAS ALSO SHOWN THAT THE REPAYMENTS TO THE BANK WERE DULY DEBITED IN THE CASH BOOK AND THE RELEVANT CASH BOOK PAGES WERE ALSO SUB MITTED (VIDE P.B. PAGES 30-35, 37-41). 4.6. THE C.I.T.(A), HOWEVER REJECTED THE EXPLANATIO N OF THE APPELLANT IN LIMINI BY MAKING IRRELEVANT OBSERVATIONS WITHOUT TRYING TO UN DERSTAND AND APPRECIATE THE DOCUMENTS SUBMITTED BEFORE HIM. HIS OBSERVATION THA T THE APPELLANT HAS NOT FURNISHED DETAILS OF SALE-PROCEEDS IS MATERIALLY INCORRECT & MISCONCEIVED. THE NARRATIONS IN THE CASH BOOK ARE CLEAR AND THE ENTRIES OF CASH RECEIPT S FROM SALES ARE CLEARLY STATE IN THE 9 CASH BOOK AS SALES MEMO NO. AND THE AMOUNT OF S ALE PROCEEDS. IN PASSING THE LD. CIT(A) ALSO MADE AN OBSERVATION THAT THE APPELL ANT ALSO FAILED TO PRODUCE ANY EVIDENCE TO SUPPORT HIS CONTENTION THAT SOME OF THE DEPOSITS WERE FROM HBL LOAN TRANSFER AND DOCUMENTARY EVIDENCE REGARDING LOAN SA NCTION ETC. WERE NOT PRODUCED. IT IS RESPECTFULLY SUBMITTED THAT THESE OBSERVATIONS A RE MADE IN A CASUAL MANNER. THE COPY OF THE BANK STATEMENTS SUBMITTED BEFORE HIM CL EARLY SHOW THE TRANSFERS FROM THE HBL LOAN A/C FOR EXAMPLE THE DEPOSITS IN THE S.B. A/C OF 75,000/-, 1,25,000/-, 1,00,000/- & 25,000/- ON 12.11.03, 22.11.03, 05.01. 04 & 06.02.04 RESPECTIVELY (P.B.PAGE 24) CLEARLY SHOW THAT THEY ARE TRANSFERS AND ARE SUPPORTED BY THE WITHDRAWALS FROM THE HBL A/C (VIDE HBL LOAN A/C STA TEMENT AT P.B.PAGE-28). 4.7. IN FACT EACH AND EVERY DEPOSIT IN THE BANK AC COUNTS ARE FULLY EXPLAINED EITHER BY THE SALE PROCEEDS RECORDED IN THE CASH BOOK OR BY I NTER-TRANSFERS FROM ONE BANK- ACCOUNT TO OTHER. THE BANKS STATEMENT REGARDING TH E HBL LOAN A/C SUFFICIENTLY PROVES THE GENUINENESS OF THE DEPOSITS IN THE SB A/ C. IN THE FACTS STATED ABOVE THE ADDITION MADE BY THE A.O. FOR UNEXPLAINED DEPOSITS IN THE S.B.A/C OF RS.L,27,857/- AND THE FURTHER ENHANCEMENT OF THE ADDITION BY THE LD. CIT(A) BY RS.14,79,043/- ARE WHOLLY WRONG AND DESERVE TO BE DELETED. 4.8. GR. NO.3 ADDITION OF RS.15,000/- AS INCOME FROM BUS : - THE APPELLANTS BUS PLIED FOR THREE MONTHS ONLY AND ACCORDINGLY HE HAS SHOWN INCOME FORM BUS AT RS. 15,000/-. THE A.O. HAS ESTIMATED THE INCOME AT RS.3 0,000/- WITHOUT APPRECIATING THE FACT AND MADE AN ADDITION OF RS.15,000/-. THE CIT(A ) HAS UPHELD THE ADDITION ON THE GROUND THAT THERE WERE NO EVIDENCE THAT THE BUS PLI ED ONLY FOR THREE MONTHS. THE ESTIMATION MADE BY THE A.O. IS HIGH AND EXCESSIVE. 4.9. GR. NO.4 THIS GROUND IS AGAINST NOT ALLOWIN G DEDUCTION OF THE INTEREST OF RS.20,112/- PAID TO S.B.I. IN RESPECT OF THE HBL A/ C (HOUSING BUILDING LOAN A/C) ON THE GROUND THAT THE MONEY WAS USED FOR BUSINESS PUR POSES. THE FACT IS THAT THE APPELLANT HAD MIXED FUNDS AND THE AMOUNTS WITHDRAWN FROM HBL A/C WERE SOMETIMES USED FOR THE PURPOSE OF BUSINESS ALSO. TH E A.O. DISALLOWED THE EXPENDITURE ON THE GROUND THAT THE LOAN FOR WHICH INTEREST WAS PAID WAS USED FOR THE PURPOSE OF BUSINESS. IN THAT EVENT THE INTEREST SHOULD HAVE BE EN ALLOWED AS AN EXPENDITURE UNDER 10 THE HEAD BUSINESS ULS.37. IN THE ALTERNATIVE INTERE ST SHOULD HAVE BEEN ALLOWED PARTLY UNDER THE HEAD BUSINESS AND PARTLY UNDER THE HEAD H OUSE PROPERTY. 4.10. . GR. NO.5 THIS GROUND IS AGAINST AN ADDITI ON OF RS.2,01,478/- IN RESPECT OF THE FIXED DEPOSITS WITH SBI. THE BALANCE SHEET FILE D BY THE ASSESSEE SHOWED FIXED DEPOSITS OF RS.2,62,774/- AS UNDER. FIXED DEPOSITS B/F ----- 2,47,900/- ADD : INTEREST ----- 14,874/- 2,62,774/- ON THE BASIS OF THE INFORMATION RECEIVED FOR VERIFY ING THE FIXED DEPOSITS, A CERTIFICATE WAS OBTAINED FORM THE BANK ON THE BASIS OF WHICH TH E AO HAS OBSERVED AS UNDER :- ON PERUSAL OF INFORMATION RECEIVED FORM BANK AUTHOR ITY, IT WAS FOUND THAT TWO FIXED DEPOSITS ARE KEPT AS LIEN IN THE STATE BANK OF INDI A, A.D. BRANCH, MEMARI. ON PERUSAL OF COPY OF FIXED DEPOSIT CERTIFICATES SENT BY THE B ANK AUTHORITY, IT WAS FOUND THAT BOTH THE DEPOSITS ARE OLD DEPOSITS. ON PERUSAL OF TDR NO .551083 INITIAL DEPOSIT WAS ON 19.12.2000 AND MATURITY DATE IS 19.12.2003 AND INIT IAL DEPOSIT WAS 1,89,584/- AND RATE OF INTEREST WAS 10%. THAT MATURITY AMOUNT OF RS.2,5 4,969/- WAS AGAIN REINVESTED W.E.F 19.12.2003 FOR ANOTHER 36 MONTHS AND INTEREST RATE WAS 5.5%. THEREFORE, VALUE OF FIXED DEPOSIT AS ON 31.03.2004 IS RS.2,54,969/- PLU S INTEREST FOR 3 MONTHS 21 DAYS COMES TO RS.3,442/-. HENCE TOTAL VALUE OF FIXED DEP OSIT INCLUDING INTEREST AS ON 31.03.2004 IS RS. 2,58,411/-. 4.11. ON PERUSAL OF PHOTOCOPY OF ANOTHER FIXED DEPO SIT CERTIFICATE SENT BANK AUTHORITY, IT WAS FOUND THAT TDR NO.183036/- AND VA LUE OF FIXED DEPOSIT WAS RS.2, 03,279/- AS ON 09.07.2003. THAT MATURITY VALUE WAS AGAIN REINVESTED W.E.F 09.07.2003 FOR 60 MONTHS AT THE INTEREST RATE OF 6%. THEREFORE VALUE OF FIXED DEPOSIT AS ON 31.03.2004 INCLUDING INTEREST OF RS.2,562/- COMES T O RS.2,05,841/-. TOTAL VALUE OF TWO FIXED DEPOSIT CERTIFICATES COMES TO RS. 4,64,252/-. VALUE OF FIXED DEPOSIT SHOWN IN THE BALANCE SHEET BY THE ASSESSEE IS RS. 2,62,774/-. SO THERE COMES THE DIFFERENCE OF RS. 2,01,478/- WHICH IS LESS VALUE OF FIXED DEPOSIT SHO WN BY THE ASSESSEE. SHOW CAUSE LETTER WAS ISSUED TO ASSESSEE TO EXPLAIN THE SAME. IN COMPLIANCE TO SHOW CAUSE LETTER ASESSEE SUBMITTED WRITTEN SUBMISSION AND STATED THA T DUE TO ACCOUNTING MISTAKE IT HAS NOT BEEN SHOWN PROPERLY 11 THE A.O. THEREFORE ADDED THE SUM OF RS.2,01,478/- A S UNDISCLOSED INVESTMENT IN THE ABSENCE OF A SATISFACTORY EXPLANATION BY THE ASSESS EE ABOUT THE DIFFERENCE. 4.12. THE APPELLANT SUBMITS THAT TWO FDS WERE OF RS. 1,00,000/- EACH WERE MADE LONG-BACK IN 1995 AND 1997 RESPECTIVELY AND TH EY WERE RENEWED FROM YEAR TO YEAR ON MATURITY AS UNDER. I) F.D. OF RS.1,00,000/- MADE IN 1995 MATURED ON 19 .12.2000 AT RS.1,89,584/- RENEWED FOR 36 MONTHS FOR RS.L,89,584/- MATURITY VA LUE ON 19.12.2003 RS.2,54,969/- II) F.D. OF RS.1,00,000/- MADE IN 1997 ON MATURITY RENEWED FOR THE MATURITY AMOUNT OF RS.2,03,279/- ON 09.07.2003 FOR FURTHER 60 MONTH S. ORIGIN OF THESE FDS IS GIVEN IN THE CERTIFICATE ISS UED BY THE BANK, A COPY OF WHICH IS ENCLOSED AT PAGE-29A OF THE PAPER BOOK. 4.13. THE FACT IS THAT DURING THE YEAR THE APPELLA NT HELD THE AFORESAID TWO FDS OF RS.2,54,969/- AND RS.2,03,279/- WHICH WERE TO MATUR E IN SUCCEEDING YEARS. BOTH THESE FDS WERE ALL ALONG LYING AS A SECURITY WITH THE BAN K IN THE C.C. A/C. NO NEW FDS WERE MADE DURING THE YEAR AND THEREFORE THE QUESTIO N OF THERE BEING ANY UNDISCLOSED INVESTMENT DURING THE YEAR DID NOT ARISE. IT WAS ON LY BECAUSE OF ACCOUNTING MISTAKE THAT THE FDS WERE NOT SHOWN IN THE BALANCE SHEET PR OPERLY AFTER ADDING THE INTEREST ACCRUED THEREON FROM YEAR TO YEAR PROPERLY. BOTH TH ESE FDS WERE DULY SHOWN IN THE YEARS IN WHICH THEY WERE MADE, BUT THEY WERE NOT PR OPERLY CARRIED FORWARD AFTER ADDING INTEREST ACCRUED THEREON, AND BECAUSE OF THA T THERE WAS MISTAKE IN SHOWING THE CORRECT VALUE OF THESE F.DS. THE ADDITION OF RS.2,0 1,478/- AS UNDISCLOSED INVESTMENT BY THE ASSESSEE DURING THE YEAR IS THEREFORE WHOLLY WRONG AND UNJUSTIFIED. 4.14. . WITHOUT PREJUDICE IT IS SUBMITTED THAT IN A NY CASE THE ASSESSEE HAS ALREADY OFFERED FOR TAX THE INTEREST ACCRUED FROM YEAR TO Y EAR ON THESE FDS ON ESTIMATE TO THE EXTENT OF RS.1,62,774/- AS UNDER. ASST. YR. FD INTEREST 1997-1998 ... 16,500.00 1998-1999 ... 21,200.00 1999-2000 ... 25,200.00 2000-2001 ... 20,000.00 200 1-2002 ... 20,000.00 2002-2003 ... 25,000.00 12 2003-2004 ... 20,000.00 2004-2005 ... 14,874.00 1,62,774.00 ON THIS BASIS ITSELF THE VALUE OF FDS SHOULD HAVE BEEN SHOWN AT RS.3,62,774/- (FDS MADE RS.2,00,000/- PLUS INTEREST ASSESSED TO TAX RS . 1,62,774/-). 4.15. . THEREFORE EVEN TAKING AN EXTREME VIEW THE A DDITION COULD NOT HAVE EXCEEDED RS. 1,01,478/- (RS.4,64,2521/- MINUS RS.3,62,774/-) . THIS SUBMISSION IS BEING MADE WITHOUT PREJUDICE TO THE CONTENTION THAT THE APPELL ANT HAVING NOT MADE ANY INVESTMENT BY WAY OF FDS IN THIS YEAR, ANY ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT WILL NOT BE JUSTIFIED. 5. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE RS OF THE REVENUE AUTHORITIES AND FURTHER POINTED OUT THAT THE ASSESSEE HIMSELF H AS ACCEPTED THAT THE PURCHASES AND SALE ARE NOT RECORDED IN THE BOOKS OF ACCOUNT. THER EFORE, THE ACTION OF THE REVENUE IN MAKING THE ADDITIONS ON ACCOUNT OF UNACCOUNTED PURC HASES AS WELL AS G.P. ON SALES INVOLVED IN THE SAID PURCHASES IS JUSTIFIABLE. 5.1. AS REGARDING THE ADDITIONS ON ACCOUNT OF PEAK CREDIT AND FURTHER ENHANCEMENT BY THE LD. CIT(A) THE LD. DR RELIED ON THE ORDERS O F THE LD. CIT(A). 5.2. AS REGARDING BUS INCOME, HE SUBMITTED THAT THE ESTIMATE MADE BY THE REVENUE IS JUSTIFIABLE. 5.3. AS REGARDING THE DISALLOWANCE OF INTEREST, HE RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 5.4. AS REGARDING THE ADDITIONS ON ACCOUNT OF FIXED DEPOSITS, SINCE THE ASSESSEE HAS NOT SHOWN THE TRUE FIXED DEPOSITS WHICH WERE KEPT A S SECURITY FOR CC ACCOUNT IT HAS BEEN RIGHTLY ADDED BY THE REVENUE AUTHORITIES. HE R EQUESTED TO CONFIRM THE SAME. 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIAL AVAILABLE ON RECORD, IN RESPECT OF GROUND NO.1 AND 2 WHICH IS THE ADDITION MADE ON ACCOUNT OF UNDISCLOSED PURCHASED AND THE PROFIT ELEMENT OF THE SAID PURCHASE KEEPING IN VIEW OF THE FACT THAT THE ASSESSEE IN HIS LETTER DATED 22.1 2.2006 ADDRESSED TO THE AO HAS ACCEPTED THAT THE PURCHASES OF RS.24,613/- IS NOT R ECORDED IN HIS BOOKS OF ACCOUNTS AND 13 THE AO HAS GIVEN A FINDING THAT THE ASSESSEE HAS AL SO RECORDED THE SALES FROM UNDISCLOSED PURCHASES. WE FIND NO INFIRMITY IN THE ORDERS OF THE REVENUE AUTHORITIES TO MAKE ADDITION ON ACCOUNT OF UNDISCLOSED PURCHAS ES AS WELL AS G.P. PERCENTAGE DISCLOSED BY THE ASSESSEE OF RS.24,613/- WHICH COME S TO RS.1,368/-. THE CASE LAWS RELIED ON BY THE LD. COUNSEL IS NOT APPLICABLE TO T HE ABOVE SPECIFIC FACTS MENTIONED BY US. THEREFORE, WE CONFIRM THE SAME OF THE REVENUE A ND GROUND NO.1 AND 6 OF THE ASSESSEE ARE DISMISSED. 6.1. AS REGARDING GROUND NO.2 I.E. ADDITION MADE IN THE UNDISCLOSED BANK ACCOUNT ON CAREFUL PERUSAL OF THE WRITTEN SUBMISSIONS AND T HE PAPER BOOK REFERENCE MADE BY THE LD. COUNSEL. WE CONSIDER THAT THIS REQUIRES FRE SH VERIFICATION AS POINTED OUT BY THE LD. COUNSEL IN THE WRITTEN SUBMISSIONS. IT IS FURTH ER OBSERVED THAT THE AO WHILE MAKING ADDITIONS ON PEAK CREDIT HE HAS NOT EVEN REC ORDED THE SUBMISSIONS MADE BY THE ASSESSEE AND SIMPLY GIVEN THE FINDING THAT I D O NOT AGREE WITH THE SUBMISSIONS MADE BY THE ASSESSEE. THE LD. CIT(A) HAS FURTHER E NHANCED THE TRANSACTIONS RECORDED IN THE SAID BANK ACCOUNT BY OBSERVING THAT THE ASSE SSEE HAS NOT OFFERED AN EXPLANATION. FROM THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AND WITH REFERENCE TO THE PAPER BOOK AS RECORDED IN THE EARLIER PARAGRAPHS THE SUBM ISSIONS HAS NOT BEEN CONSIDERED BY THE REVENUE AUTHORITIES. THEREFORE, WE CONSIDER TO SET ASIDE THIS ISSUE TO THE FILE OF AO FOR FRESH ADJUDICATION AFTER GIVING DUE CONSIDERATI ON TO THE SUBMISSIONS MADE BY THE ASSESSEE. IN THE RESULT GROUND NO.2 IS ALLOWED FOR STATISTICAL PURPOSES. 6.2. AS REGARDING GROUND NO.3 RELATING TO ADDITIONS ON ACCOUNT OF BUS INCOME, WE FIND NO JUSTIFICATION TO MAKE ADDITION ON THE BASIS OF ESTIMATION OF FULL CAPACITY OF THE BUS WHICH IS NOT PRACTICABLE IN ALL CIRCUMSTANCES. THEREFORE, GROUND NO.3 OF THE ASSESSEE IS ALLOWED. 6.3. AS REGARDING GROUND NO.4 I.E. DEDUCTION OF INT EREST OF RS.20,112/- WE FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL AND IN THIS C ASE SINCE THE ASSESSEE IS HAVING BOTH HOUSE PROPERTY INCOME AS WELL AS BUSINESS INCOME AN D THE ASSESEE HAS UTILIZED THE HOUSE BUILDING ADVANCE DRAWN FOR THE PURPOSE OF CON STRUCTION OF THE HOUSE FOR BUSINESS PURPOSES WHICH WAS ACCEPTED BY THE REVENUE THEN THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 37 OF THE IT ACT. GROUND NO.4 OF THE ASSESSEE IS ALLOWED. 14 6.4. AS REGARDING GROUND NO.5 REGARDING FIXED DEPOS IT AGAIN THIS REQUIRES FRESH CONSIDERATION KEEPING IN VIEW OF THE SUBMISSIONS MA DE BY THE ASSESSEE WHICH WERE NOT PROPERLY CONSIDERED BY THE REVENUE AUTHORITIES. THEREFORE WE SET ASIDE THIS ISSUE TO THE FILE OF THE AO TO DECIDE THE SAME AFTER TAKI NG INTO CONSIDERATION THE ABOVE SUBMISSIONS MADE BY THE ASSESSEE. GROUND NO.5 IS AL LOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED IN PART FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 05.04.2011. SD/- SD/- . .. . . .. . , , , , B.R.MITTAL, JUDICIAL MEMBER . .. .!' !'!' !'. .. . , ,, , #$ #$ #$ #$ , C.D.RAO, ACCOUNTANT MEMBER. ( (( ('$ '$ '$ '$) )) ) DATE: 05.04.2011. #2 0 .3 4#3(5- COPY OF THE ORDER FORWARDED TO: 1. SHRI SHAKTIPADA KOLEY, BAMUNPARA, P.O.MEMARI, DIST. BURDWAN. 2 THE I.T.O., WARD-1(2), BURDWAN 3. THE CIT, 4. THE CIT(A)-ASANSOL. 5. DR, KOLKATA BENCHES, KOLKATA /3 ./ TRUE COPY, #2&:/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES R.G.(.P.S.) 15