Ramanbhai Bavabhai Vanzara, Gandhinagar V. The Dy. Commissioner of Income Tax, Central Circle-2(1), Ahmedabad

ITA 1699/AHD/2016

AI Insights

The case involves two appeals filed by Ramanbhai Bavabhai Vanzara against the orders of the CIT(Appeals)-12, Ahmedabad, concerning the assessment years 2010-11 and 2011-12. The primary issues in the appeals were the additions made by the Assessing Officer (AO) regarding unexplained investments in the Ramdev complex and unexplained cash found during a search operation at the assessee's premises. The Tribunal examined the valuation reports and the arguments presented by both the assessee and the revenue. The Tribunal's decision involved a detailed analysis of the valuation of the Ramdev complex and the sources of the cash found, leading to a partial relief for the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131459 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: D
• Next Hearing Date: 02-05-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 20-06-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Corroborative evidences
• Section: 131

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH Before: Ms. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member Ra man bhai Bavabh ai Vanzara, Ambica Bhavan , Village Rakanpur, Ta, Kalol Dist. Gandhing ar-3 82721 PAN: AB YP V631 6R (Appellant) Vs The Dy. CIT, Central Circle-2(1), Ah med abad (Resp ondent) Asses see b y : Shri M ehul Tha kkar, A.R. Revenue by : Shri Prathvi Ra j M eena, CIT-D. R. Date of hearing : 03-05 -2 023 Date of pronouncement : 12-05 -2 023 आदेश/ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- These are two appeals filed by the assessee against the order of Ld. CIT(Appeals)-12 Ahmedabad dated 04-01-2016 for assessment year 2010- 11 and 2011-12. We shall first take up the assessee’s appeal for assessment year 2010-11. ITA Nos. 1699 & 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 2 2. The assessee has taken the following grounds of appeal: “1. Both the Ld. A.O. has erred in making addition of Rs. 7,68,017/- toward investment on Ramdev Complex on the basis of valuation report only and Ld. CIT(A)-12, Ahmedabad have erred in directing A.O. to revise the estimate to 90% of the estimate made by the AVO for Ramdev Complex (Motibhoyan Account) 2. The appellant craves leave to file/modify any of the ground of the appeal.” 3. At the outset, we observe that the present appeals are time-barred by 12 days. The counsel for the assessee submitted that the appeals are time- barred owing to sickness of the assessee and he also filed an affidavit in support of the above contention, duly supported by a medical certificate. Considering the above facts placed on record by the counsel for the assessee, in the interest of justice, the delay of 12 days in filing of the present appeals are hereby being condoned. 4. On merits, the brief facts of the case in relation to the assessee’s appeal for assessment year 2010-11 are that search was carried out at the premises of the assessee on 06-01-2011. During the course of search of the assessee, cash of 60,30,000/- and jewellery of 18,66,690/-was found. The assessee filed return of income on 10-10-2012 declaring total income of 2,00,110/-. Prior to that, the assessee had not filed return of income and neither any of the family members of the assessee had filed return of income. During the course of search, it was noticed that assessee had incurred substantial amount of investment in Ramdev complex, a shopping building complex in which approximately 80 shops were constructed by the I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 3 assessee. In the statement recorded on oath under section 131 on 23-02- 2011, the assessee admitted that he was jointly holding the aforesaid shopping complex along with his son Shri Raju bhai. During the course of assessment, the assessee submitted certain details regarding investment made in the aforesaid shopping complex, however, the assessing officer was not convinced with these details and he referred the matter to the Assistant Valuation Officer (AVO). The AVO estimated the cost of construction at 55 lakhs approximately spread over 2 assessment years i.e. assessment year 2010-11 and 2011-12. The assessing officer sought to tax the difference shown by the assessee and that of the report of the valuation officer in the hands of the assessee, with respect to the assessee’s share in the aforesaid complex. The assessee submitted that no addition is called for since no expenses have been incurred on labour payments in the aforesaid complex and further there are no expenses for flooring since no tiles were used and the floors were made out of cement and accordingly, estimate made by the AVO is on the higher side. The assessee submitted that the AVO while preparing the estimate of cost has not taken into account the fact that element of labour cost to be further deducted from cost incurred after 01-04- 2011. However, the assessing officer was not convinced with the arguments of the assessee for the reason that it is not possible that 80 shops could be constructed only by the family members of the assessee, without use of any outside labour and that too within a short period of 2 years. Further, the assessing officer also held that the contention of the assessee that the total area of all shops is 1560 m² whereas the AVO has taken plinth area of 1758.56 m² is also not acceptable since the assessee has not submitted any details and documents to establish that the total area of all shops is 1560 m². I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 4 Accordingly, the assessing officer added a sum of 7,68,017/- being the assessee’s share of unexplained investment in the hands of assessee for assessment year 2010-11. 5. In appeal, Ld. CIT(Appeals) after looking at the facts of the case and the valuation done by the AVO, partially allowed the appeal of the assessee by firstly directing that the value of investment in land may be taken at 4,95,000/- since the same is supported by registered sale deed, and if the AVO has taken a higher value of investment in land then the same has to be replaced with the aforesaid value of land and secondly, since the AVO itself has opined that the real investment made can be plus or minus 10% of the valuation made by him, and considering the contention of the assessee that assessee had contributed its own labour in constructing of the aforesaid shops, he furthered give a reduction of 10% in the cost estimate calculated by the AVO. 6. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(Appeals). Before us, the counsel for the assessee submitted that there are certain discrepancies in the report submitted by the AVO. He filed before us written submission in which he pointed out certain discrepancies in the report prepared by AVO. Further, he drew our attention to the valuation report of a private value prepared by the assessee in support of the cost of construction. He further submitted that from the report of AVO it is not clear whether the cost of investment in the land has been taken into consideration or not. Further, he submitted that the primary reason for the difference in the report prepared by AVO and the private valuer appointed by the assessee is on account of labour cost since the AVO failed to appreciate that the entire I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 5 building complex was constructed out of the labour of family members only and no outside labour was engaged by the assessee. In response, the Ld. DR submitted that AVO in the valuation report has itself reduced the land cost while making the addition. Further, in spite of no concrete details having been furnished before Ld. CIT(Appeals), still the ld. CIT(A) has given reasonable relief to the assessee looking at the facts of the instant case. 7. We have heard the rival contentions and perused the material on record. On going through the report of the private valuer furnished by the assessee, we observe that while computing the cost of investment, he has taken the rate of 3500 per square metre, which is almost the same as the rate adopted by the AVO, which is 3535 per square metre. Therefore, the private valuer has computed the cost of construction at 27,30,000/- with respect to 40 shops constructed on the ground floor, while the AVO has computed the total cost of construction of 80 shops at 55.94 lakhs in which the AVO has allowed reduction of 10% towards contractor profit since the assessee himself is a contractor for construction. Accordingly, it is observed that the cost of investment by both the AVO as well as the private valuer appointed by the assessee is almost at par with each other. We further observe that Ld. CIT(Appeals) has given further reduction of 10% in the cost of investment looking into the facts of the instant case (in addition to giving the direction that the cost of the investment in the property may be taken at 4.65 lakhs in view of the same value taken in the registered sale deed). I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 6 Before us, the counsel for the assessee submitted that primarily the difference in the cost of investment is due to labour cost, which was not incurred by the assessee in the instant set of facts since all the shops were constructed/built by the assessee and his family members and no outside labour was involved in this construction. Therefore, while we are of the considered view that there is as such no substantive difference in the cost of investment as computed by AVO as compared to the valuation done by the private valuer appointed by the assessee, and also we find force in the argument of DR that it is difficult to conceive that the entire shopping complex comprising of 80 shops were built by the assessee and his family members (5 family members) without employing any outside labour, however, still taking into consideration the contention of the counsel for the assessee that in the instant facts labour cost could constitute up to 30% of the cost of construction, in the interest of justice, further relief of 20% on the estimate of cost of investment made by the AVO is allowed to the assessee (in addition to the relief of 10% already afforded by the Ld. CIT(Appeals) in the appellate order with respect to cost of construction estimated by AVO). 8. In the result, the appeal of the assessee is partly allowed for assessment year 2010-11. Now we shall take assessee’s appeal for assessment year 2011-12 9. The assessee has raised the following Grounds of Appeal: “1 (a) Both the Ld. A. O. Ld. CIT(A)-12, Ahmedabad erred in making addition of Rs. 60,30,000/- towards cash found at the time of search even though the complete details of the ownership of the cash so seized were provided to him for verification and Ld. CIT(A)-12, Ahmedabad have erred in granting part relief out of the cash found I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 7 and seized from the appellant premises even though it was explained to him that all the family members of the appellant have remained present before A.O. for remand proceedings and explained with necessary evidences that cash found and seized were belonging to family members including that of appellant. (b) Ld. CIT(A)-12, Ahmedabad ought to have considered the full amount of cash of Rs. 19,15,435/- belonging to the appellant as the appellant has disclosed the source of his income on oath u/s 132(4) of the I.T. Act, 1961 during the search and seizer action and further explained all the seized materials before the A.O. u/s 131 (1)A on 23/02/2011 and in particular search Authorities did not take any erase view and even did not ask for discloser of unaccounted income even though the cash amounting to Rs. 60,30,000/- was seized from the residential premises of the appellant. (c ) Ld. CIT(A)-12, Ahmedabad ought to have considered the full amount of cash of Rs. 21,87,134/- as belonging to Smt. Lilaben R. Vanzara, wife of the appellant, when she remained present before the A.O. during remand proceedings together with all necessary evidence as regards the proof of her income along with evidence and claimed the ownership of the cash so found from their residential house. (d) Ld. CIT(A)-12, Ahmedabad ought to have considered the full amount of cash of Rs. 4,68,800/- as belonging to Jamnaben R. Vanzara, daughter of the appellant, when she remained present before the A.O. together with all possible evidence as regards the proof of her income along with evidence and claimed the ownership of the cash so found from their residential house. (e) Ld. CIT(A)-12, Ahmedabad ought to have considered the full amount of cash of Rs. 7,68,7407- as belonging to Kamuben R. Vanzara, daughter of the appellant, when she remained present before the A.O. together with all possible evidence as regards the proof of her income along with evidence and claimed the ownership of the cash so found from their residential house. I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 8 2. Both the Ld. A.O. has erred in making addition of Rs. 5,00,783/- toward investment on Ramdev Complex on the basis of valuation report only and Ld. CIT(A)-12, Ahmedabad have erred in directing A.O. to revise the estimate to 90% of the estimate made by the AVO ignoring for Ramdev Complex (Motibhoyan Account) 3 The appellant craves leave to file/modify any of the ground of the appeal.” Grounds 1(a)-(e): 10. The brief facts in relation to the above grounds of appeal raised by the assessee are that search took place at the premises of the assessee on 06-01- 2011. During the course of search, cash of 60,30,000/- was found and out of it, cash of 58,66,000/-was seized. The assessing officer asked the assessee to explain the availability of cash of 60.30 lakhs as on the date of search. After the search was conducted at the premises of the assessee, the assessee prepared cash books and also filed a return of income for himself and his other family members residing at the premises where the search was conducted and gave a tabular account of cash belonging to each of the family members as below: Sr. No. Name of the person to whom the cash belongs Rs. 1 Ramanbhai Vanzara 19,15,435/- 2 Lilaben Vanzara 21,87,134/- 3 Jamnaben Vanzara 4,68,800/- I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 9 4 Kamuben Vanzara 7,68,740/- 5 Raju Raman Vanzara 5,32, 589 /- 11. Before the assessing officer, the assessee submitted that the cash claimed to be belonging to the family members is not only evidenced by the cash book prepared after the date of search, but the family members are also ready to testify the same. However, the assessing officer rejected the explanation given by the assessee on the ground that cash books are prepared after the date of search and hence not reliable, there is no justification or evidence for opening cash balance as on 01-04-2006 of either the assessee or his family members, receipts in the cash books are not supported by primary evidences and hence genuineness is doubtful, no proper proof of agricultural income is shown in the cash book, the family members have shown labour income but produced no voucher or proof for such income, the returns of income by family members are filed after the date of search, the transactions of the family members as per the cash book are in cash and hence not reliable and in the cash book, the appellant and his family members have simply passed accommodation entries without proper supporting evidence. Accordingly, the assessing officer added the amount of 60,30,000/- as unexplained income in the hands of the assessee. 12. In appeal for Ld. CIT(Appeals), he first permitted the assessee to file additional evidence in support of his contentions before him under Rule 46A. Further, after taking the submissions of the assessee on record and I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 10 various evidences filed by him, he substantially allowed the assessee’s appeal by holding that since the other family members of the assessee had filed return of income for the impugned years under consideration, the incomes which had been declared by them in their return of income should taken to have been substantiated and accordingly, the same are liable to be deleted as income in the hands of the assessee. Accordingly, Ld. CIT(Appeals) deleted the addition to the extent of 33,45,891/- and confirmed in addition to the extent of 28,84,109/-. The assessee is in appeal before us against the aforesaid confirmation made by Ld. CIT(Appeals) in the appellate order. 13. We have heard the rival contentions and perused the material on record. We observe that on perusal of the order passed by Ld. CIT(Appeals), he has taken a very reasonable approach and after considering all the facts placed by the assessee on record, the returns of income filed by the assessee post search and by taking into consideration additional evidences placed on record by the assessee during the course of appellate proceedings, he has given substantial relief to the assessee in the appellate proceedings. While allowing relief to the assessee, Ld. CIT(Appeals) made the following observations: “As the AO has not based his decision about cash found on any material available on record, I would proceed to do the same in light of the/material available on record with regard to cash found: i) The first observation that I have to make' is that the Id. AO has himself assessed the appellant's son Shri Raju Vanzara on the basis of returns filed u/s 153C. The perusal of the assessment orders in case of Raju Vanzara for A.Yrs.2009-10 to 2011-12, for which the appeals I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 11 have been filed by the Shri Raju Vanzara, shows that the Id. AO has accepted the returned incomes of Rs.1,45,840/-, Rs.l,52,250/-.and Rs.3,84,290/- for the respective assessment years to which also the AO has made further addition on-account of investment in Ramdev- Complex and on account of unexplauvechcash expenses. Thus, the Id. AO was clearly required, in sync with his acceptance of incomes returned by Shri Raju Vanzara, to also accept the ownership of cash of Rs.5,25,891/- as claimed by the appellant and also accepted by Shri Raju Vanzara not only in his return of income but also by way of submissions dated 7/3/2013 made before the AO. Additionally, the Id. AO has further recorded the statement u/s 131 of Shri Raju Vanzara during the course of remand proceedings wherein Shri Raju Vanzara has 'again confirmed the ownership of .Rs. 5,25,891/- and also produced the related books of accounts supporting such availability of cash on the day of the search. Thus, deafly the cash of Rs.5,25,891/- neither belongs to the appellant nor is it unexplained in appellant's hands ii) During the course of search itself, the cash found, as narrated earlier, to the tune of Rs.4,20,000/- was claimed by the. appellant's married daughter 'Kamubcn Vanzara and was accordingly inventorised. As per the preliminary statement recorded on the day of the search, Srnt. Kamuben's husband is stated to be engaged only in sand/kapchi carting. In view of this again, neither there is any justification for the AO to disbelieve the ownership of married daughter Smt. Kamubeh of Rs.4,20,000/-, which again, has been further admitted in statement u/s 131 dated 22/2/2015 before the AO. Though Smt. Karnuben has claimed the ownership of Rs.7-8 lacs in her statement u/s 131, after corisidering the totality of facts and circumstances, I am inclined to accept the truth of her ownership only to the extent of Rs.4,20,000/- as claimed during the course of the search. Thus, a further amount of Rs.4,2O,000/-neither belongs to the appellant nor does the same remain unexplained in appellant's hands. iii) During the course of remand proceedings, the Id. AO has recorded the statement of Smt. Lilaben, wife of the appellant on 24/4/2015. Smt. Lilaben admitted the ownership of cash of Rs.21-22 lacs in conformity, with what was claimed before the AO by the appellant during the assessment proceedings. Both before the AO and before me, the appellant has submitted the copies of cash books of I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 12 Smt. Lilaben, copy of 7/12 extracts evidencing the ownership of agricultural land, the bills of sale of agricultural produce issued by M/s. L'axminarayan Trading Co., Kadi and M/s. Jagdishkumar Naranbhai, Becharaji during F.Y.2009-10 and 2010-11. Smt. Lilaben has also filed returns of income showing the income from house property and agricultural income for rate purposes as per the following details: Sr. No. A.Y. Date of filing of return of income Returned Income \ Agricultural Income 1. 2009-10 29/3/2011 158880 305400 2 2010-11 29/3/2011 171503 490831 3 2011-12 30/7/2011 125730 1204220 4 2012-13 20/2/2014 161740 390915 5 2013-14 26/4/2014 161538 583038 6 2014-15 29/10/2014 250890 442210 The seized documents as also the statement u/s 131(1A) of the appellant' recorded on 23/2/2011 and also the reply to question no.26 in the preliminary statement recorded during the course of search on 6/1/2011, indicate that the "family" has a total of roughly 30 bighas of land situated at Village Sol and Village Irana, yielding a yearly net income of Rs. 1-2-lacs, as per preliminary statement of the appellant. After considering the totality 'of facts and circumstances and complete evidence on record including the seized documents and statements during and after the search and the returns of income filed by the family members, I am of the considered opinion that the ownership of and a reasonable quantum of cash owned up by the family members also needed to be rationally and to the best" of his judgment, quantified and considered as explained by the Id. AO. 'This exercise has not been done by the AO. Though the agricultural income shown I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 13 by Smt. Lilaben Vanzara in the belated/regular returns of income filed after the date of the search is at substantial variance with the preliminary statement of the appellant himself, the magnitude of the evidence with regard to her agricultural income seized/submitted can also at the same time, not be overlooked. The challenge before me is that on one hand there is riot only the submission on behalf of the appellant that about Rs.21-22 lacs out of the cash seized belongs .to- the wife Smt.. Lilaben, there are also returns of income filed by Smt. Lilaben and sworn statement of Smt. Lilaben before the AO during the remand proceedings. "confirming such ownership of cash seized during search. On the other hand, there is statement u/s 132(4) of the appellant, (though recorded under slightly abnormal circumstances of wife's illness) owning up the cash and found during search as his own. The third contention is that there are stray and 'scattered evidences coupled with statements u/s 132(4)/13I(1A) which do indicate that the appellant and his wife Smt. Lilaben have some rental incomes and some agricultural incomes apart from brokerage/land transaction incomes in the hands of the appellant, and most of which does not seem to have been received otherwise than by cash. -At the same time, the agricultural income shown by Smt. Lilaben in her belated returns of income so as to generate cash as on the date of search to the extent of Rs.21-22 lacs appears to be substantially on higher side, though primarily, in law, that may email adverse action, if any, only in the hands of Lilaben. and noi appellant. But appellant himself who is supposed to be leading the 'best .evidence' has not come forth with further evidences. In view thereof, I consider it fair and reasonable to arrive at a combined figure of agricultural income; of husband/wife, and the cash available out of the same as on the date of search, without going into determining whose agricultural income such sum may represent. The primary evidence I rely upon for this purpose is the preliminary statement recorded during the search and the bills of agricultural " ":produce seized/produced during remand proceedings. As it has been mentioned by the appellant in the preliminary statement vide answer to question no.26, though loosely, that the 'family' has agricultural income of' Rs.1-2 lacs, and as it is further stated by the appellant in answer to questions no. 6, 7 and 8 that Smt. Lilaben has received from her father some further agricultural land on 4/9/2008., I consider it fair and reasonable to hold firstly that the family as a whole is satisfactorily evidenced to be I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 14 earning yearly agricultural income to the extent of Rs.2.5 lacs during F.Y.2008-09 to 2010-11 and of Rs.1.5 lacs during earlier four financial years, of which, respectively Rs. 1.5 lacs for F. Y.2008-09. to 2010-11 and Rs. 1 lac per year for earlier period of four years would be available as accumulated cash on the date of search. This brings the total to Rs. 8.5 lacs of accumulated cash out of agricultural income available as explained' in the hands of the 'family' and consequently, explained in the hands of the appellant. Obviously, though Smt. Lilaben has filed the returns of income subsequent to search, I have preferred not to rely on those very returns substantiated further by her sworn testimony because the same are found by me to be far-fetched but that at the same time, cannot be conclusive of the fact that no explained cash at all could be available with her/family. Similarly, there are seized evidences as explained, being seized page no. 108, which depict the rental incomes from Ambika Bhuvan and Old Ramdev Complex, explained to be owned jointly by Lilaben and son Rajubhai. The estimated and extrapolated yearly rental" income for F.Y.2010-11 from j Ambica Bhuvan rooms as per page 108 appears to be in the range of Rs.70,000/- with deposit of Rs.6,000/-. Similarly, page 107 of BF-5 indicates prima facie that the old Ramdev Complex has been generating the rent per shop of Rs.4,000/- and deposit of roughly Rs.5,000/- and apparently such 14 shops . would generate, most conservatively, yearly income of roughly Rs. 2.5 to 3 lacs, of which, as shown by Lilaben in the chart, total accumulated cash can be estimated to be Rs. 4.5 lacs at Rs. 75000/- p.a. for 6 years. Thus, to the best of my judgment, a further sum of Rs. 8.5 lacs plus Rs.4.5 lacs totalling to lacs is to be considered explained in the hands of the appellant. iv) It is evident on the basis of preliminary statement that married daughter Smt. Kamuben, whose husband is engaged only in sand/kapchi carting had also accumulated, cash of Rs.4.20 lacs which I have held to be explained. Before the Id. AO, during remand- proceedings, Smt. Lilaben in her statement as also Shri Raju Vanzara, in his statement has stated that his sister Jamnaben Vanzara is also engaged in labour work and she has accumulated cash of Rs.4-5 lacs as on the date of search. Considering her age and the possibility of earning labour income, if at all, "and accumulating the same in the form of cash, and also considering the fact that Smt. Kamuben could I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 15 not accumulate more than Rs.4.20 lacs even after about 8 years of alleged labour income, I consider it fair and reasonable to allow further credit of Rs.l lac as available cash longing to Jamnaben Vanzara. v) The appellant himself has claimed the cash ownership to the tune of Rs. 19,15,435/-, which has beer, explained by wav of cash book prepared and statement of accumulation over a period of time submitted to the AO during remand proceedings. In this connection, I have to observe that though the Id. AO has rejected the books of accounts, and therefore, disbelieved the cash availability of Rs. 19,15,435/- in the hands of the appellant, the AO himself has not gone into the correctness or otherwise of various receipts like brokerage, rent and shop deposits shown as received by the appellant which resulted into accumulation of cash. Similarly, the Id. AO has also not gone into the adequacy of the household withdrawals and the possibility of other expenses/investments not recorded in the books of accounts prepared after the search. The incomes as shown have been assessed and brought to tax by the AO. However, the seized documents themselves indicate, as explained to me that the appellant has rental income. The Id. AR first drew my attention to page No. 112 of BF-5 wherein the receipt of rent from the shops/rooms in Shreeji Complex has been noted. I have gone through the same and noted that as per the seized document, there appears to be 11 shops and 5 rooms. The rent per month received appears to be in the range of Rs.2000 - Rs.5000 per month with deposit for each shop ranging between Rs.3000 to Rs. 10,000. Similarly, on the same page, the receipt of rent and deposit with respect to rooms in Shreeji Complex is also noted. While the rent ranges from.J200-1800 per month, the deposit is at Rs.1200 per room. The rent, on purely estimated extrapolation method can reasonably be estimated yearly to be in the range of Rs.3,00,000/-from shops plus Rs.75,000/- from rooms totalling to Rs.3,75,000/-. The rental income shown by the appellant in the statement of cash submitted before me, and offered for tax, is' far less, being Rs.1,86,000/- and Rs.2,30,000/- for F.Y.2009-10 and 2010-11. -Similarly, the household withdrawals are also shown in the statement/chart submitted by the appellant at unreasonably low amounts of Rs.60,000/- and Rs.1,05,000/- respectively. Considering the facts that appellant has shown lesser than evidenced rental income I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 16 and has also shown unreasonably low household withdrawals, obviously the cash balance .........available as on the date which is combination of accumulated brought forward cash balances shown and further accumulated during the financial years under reference, cannot be accepted on face value. At' the same time, however, the fact of shop deposit is evidenced by seized document and there is no material to challenge the estimated brokerage shown by the appellant. In view of all these facts, after considering the totality of facts and circumstances, I consider it fair and reasonable to hold that cash of Rs.10 lacs can reasonably be held to be explained accumulated cash as on the date of search in the hands of the appellant. The balance of Rs.9,15,435/- considered as unexplained would take care of understated rental incomes and corresponding household withdrawals. Thus, a further cash of Rs.10 lacs out of the total cash found is held explained. In view of the discussion above, after due consideration to the material available on record and to the best of my judgement, a total cash of Rs.33,45,891/- is held explained as belonging to either the appellant or his family members. The balance amount of Rs.28,84,109/- is held rightly considered unexplained by the AO and therefore, the addition to the extent of Rs. 28,84,109/- is upheld. Appellant gets a relief of Rs.33,45,891/-. Related ground partly succeeds.” 14. On going through the contents of the order passed by Ld. CIT(Appeals), we are of the considered view that he has taken a very reasonable approach while allowing relief to the assessee. Further, it also needs to be taken note that substantial cash was found at the premises of the assessee amounted to 60.30 lakhs approximately and neither the assessee nor any of his family members had filed any return of income prior to the date of search. No books of accounts were being maintained by the family members prior to the date of search. It was only when the search was conducted at the premises of the assessee that the assessee and his family I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 17 members filed return of income and prepared cash books etc. The Ld. CIT(Appeals) took into consideration all the details filed by the assessee during the course of appellate proceedings and give substantial relief to the assessee by following a very reasonable approach. Accordingly, we find no infirmity in the order of the Ld. CIT(Appeals) so as to call for any interference. 15. In the result, grounds 1(a)-(e) of the assessee’s appeal are dismissed. Ground number 2: addition of 5,00,783/ - towards investment in Ramdev complex 16. We have already dealt with this ground of appeal while adjudicating appeal of the assessee for assessment year 2010-11, wherein we have given further relief to the extent of 20% to the assessee in respect of valuation computed by AVO. Since, the cost of investment in the aforesaid commercial complex was added in the hands of assessee over assessment years 2010-11 and 2011-12, in light of our observations for assessment year 2010-11, a further relief to the extent of 20% is allowed to the assessee for assessment in 2011-12 as well, in the interest of justice. 17. In the result, ground number 2 of the assessee’s appeal is partly allowed. I.T.A Nos. 1699& 1700/Ahd/2016 A.Y. 2010-11 & 2011-12 Page No. Rmanbhai Bavabhai Vanzara vs. Dy. CIT 18 18. In the combined result, both the appeals of the assessee are partly allowed. Order pronounced in the open court on 12-05-2023 Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 12/05/2023 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/ आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद