ITO, UDAIPUR V. Smt. Mohan Kunwar Devra, UDAIPUR

ITA 189/JODH/2013

• Counselvise Citation: 18923314 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-08-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 01-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Keywords: Income from undisclosed sources; Principle of natural justice
• Section: 143(3); 153A; 133(6); 131

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 189 /JODH/2013 (A.Y. 200 2 - 03 ) ITO, WARD - 2(1), UDAIPUR. VS. SMT. MOHAN KUNWAR DEV AD A , S H ING H AWATO KA WADA , DEBARI, UDAIPUR. (APPELLANT) PAN NO. AIXPD 9179 J (RESPONDENT) ASSESSEE BY : SHRI SHRAWAN KUMAR GUPTA. DEPARTMENT BY : SHRI O.P. MEENA - D.R. DATE OF HEARING : 05 / 0 8 /201 4 . DATE OF PRONOUNCEMENT : 15 /0 9 /201 4 . O R D E R PER N.K. SAINI, A.M TH IS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 2 3 /01 /2013 OF L D . CIT(A), UDAIPUR . THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN: - 1. DELETING THE ADDITION OF DAIRY INCOME OF RS. 3,000/ - 2. DELETING THE ADDITION OF RS. 32,000/ - OUT OF INTEREST EARNED FROM MONEY LENDING BUSINESS. 2 3. DIRECTING TO ASSESS AGRICULTURE INCOME FROM RS. 58,000/ - TO RS. 75,000/ - AS AGAINST DECLARED BY THE ASSESSEE AT RS. 1 LAC. 4. DELETING THE ADDITION OF RS. 14,40,240/ - MADE BY THE A.O., ON ACCOUNT OF UNEXPLAINED DEPOSITS IN BANK, INVESTMENT IN FDR AND INTE REST THEREON. THAT THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DELETE OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2 GROUND NO. 1 RELATES TO THE DELETION OF ADDITION OF DAIRY INCOME OF RS. 3,000/ - . 3. FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT A SEARCH ACTION U/S. 132(1) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) WAS CARRIED OUT ON 11/03/2005 AT THE RESIDENTIAL PREMISES OF SHRI BHIM SINGH DEVADA . DURING THE COURSE OF SE ARCH PROCEED INGS, CASH WAS FOUND AND SEIZED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF SHRI BHIM SINGH DEVDA U/S. 153A/143(3) OF THE ACT , THE ASSESSEE HAD SUBMITTED AN AFFIDAVIT , A CCORDING TO WHICH, SHE HAD CLAIMED THAT OU T OF RS. 18,17,001/ - A SUM OF RS. 4 LAC BELONG ED TO HER. THEREFORE, PROCEEDINGS U/S. 153C R.W.S. 153 A OF THE ACT WERE INITIATED AND NOTICE WAS ISSUED REQUIRING THE ASSESSEE TO PREPARE TRUE AND CORRECT RETURN OF HER INCOME INCLUDING UNDISCLOSED INCOME. THE ASSESSEE IN RESPONSE TO THE SAID NOTICE, FILED HER RETURN OF INCOME DECLARING AN INCOME OF RS. 52,000/ - AND AGRICULTURAL INCOME OF RS. 1 LAC, BUT NO INCOME ON THE UNDISCLOSED SOURCE HAD BEEN 3 DECLARED. THE ASSESSING OFFICER FRAMED THE ASSESSMENT U/S. 143(3) R.W.S. 153A OF THE ACT AND ADDED AN INCOME OF RS. 15,85,240/ - . AGAINST SUCH ORDER, THE ASSESSEE FILED AN APPEAL WHICH WAS DECIDED BY THE THEN LD. CIT(A) VIDE ORDER DATED 29/06/2009 HOLDING THAT THE ASSESSMENT ORDER WAS PASSED WITHOUT MAKING COMPLIANCE OF PRE - REQUISITE CONDITIONS I.E. RECORDING OF SATISFACTION NOTE BY THE ASSESSING OFFICER HAVING JURISDICTION OVER THE SEARCH ED PERSON , THEREFORE, IT COULD NOT BE LEGALLY JUSTIFIED AND ACCORDINGLY HE HAD QUASHED THE ORDER ON LEGAL GROUNDS WITHOUT CONSIDERING THE OTHER GROUNDS OF APPEAL OF THE ASSESSEE . AGAINST THE SAID ORDER, THE DEPARTMENT FILED APPEAL WHICH WAS DECIDED BY THE ITAT , JODHPUR BENCH IN I.T.A.NO. 505 TO 510/ JU/2009 DATED 02/06/2010 AND THE MATTER WAS REMITTED BACK TO THE LD. CIT(A) FOR THE DECISION ON MERITS ON OTHER GROUNDS RAISED IN THE ORIGINAL APPEAL. 4. IN THE PRESENT CASE, T HE ASSESSEE DECLARED DAIRY INCOME OF RS. 12,000/ - . THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HERSELF IN THE PRECEDING YEAR HAD DECLARED INCOME OF RS. 12,000/ - ON INVESTMENT OF RS. 40,000/ - . HE THEREFORE, ESTIMATED THE INCOME FROM THIS SOURCE AT RS. 15,000/ - AND MADE THE ADDITION OF RS. 3,000/ - . BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE ADDITION OF RS. 3,000/ - WAS BASED ON PRESUMPTION 4 AND ASSUMPTION ONLY WITHOUT ANY POSITIVE OR CORROBORATIVE EVIDENCE FOR THE SAME AS SUCH THE ADDITION WAS ILLEGAL . 5. THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT HIS PREDECESSOR HAS DELETED THE SIMILAR ADDITIONS FOR THE A.Y. 2005 - 06 IN APPEAL NO. 441/IT/UDR/ 2007 - 08 AFTER GIVING THE DETAILED FINDINGS BASED ON THE REASONING IN THE APPEAL FOR THE A.Y. 1999 - 2000 IN APPEAL NO . 47/SA . T HE LD. CIT(A) OBSERVED THAT THE FACTS FOR THE YEAR UNDER CONSIDERATION WERE IDENTICAL TO THE FACTS INVOLVED IN THE ABOVE SAID YEARS. HE, THEREFORE, DEL E TED THE IMPUGNED ADDITION. NOW THE DEPARTMENT IS IN APPEAL. 6 . LEARNED D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFICER WHILE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. IT WAS FURTHER STATED THAT THE SIMILAR ADDITIONS HAVE BEE N DELETED FOR THE A.Y. 2005 - 06 BY THE LD. CIT(A) AND AGAINST THE SAID DELETION OF ADDITION , THE DEPARTMENT HAD NOT FILED ANY APPEAL . THEREFORE, THE APPEAL OF THE REVENUE MAY BE DISMISSED ON THIS ISSUE. 7 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN OUR OPINION, THE LD. CIT(A) RIGHTLY DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER 5 ON THE BASIS OF PRESUMPTION AND ASSUMPTION PARTI CULARLY WHEN A SIMILAR ADDITION WAS DELETED FOR THE A.Y. 2005 - 06 AND THE DEPARTMENT HAD NOT PREFERRED ANY APPEAL AGAINST THE SAID DELETION. WE THEREFORE, DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 8 . NEXT ISSUE VIDE GROUND NO. 2 RELATES TO THE DELETION OF ADDITION OF RS. 32,000 / - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST EARNED FROM MONEY LENDING BUSINESS. 9 . FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSEE HAD DECLARED MONEY LENDING INCOME AT RS. 40,00 0/ - . THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE DETAILS OF DEBTORS AND INTEREST RECEIVED FROM THEM. THE ASSESSEE FURNISHED THE LIST OF PERSONS ALONG WITH OUTSTANDING BALANCE ON THE DATE OF SEARCH . T HE ASSESSING OFFICER OBSERVED THAT THE LIST WAS CONTAINING THE NAMES OF SOME PERSONS, BUT THE AMOUNT OF OUTSTANDING WAS NOT MENTIONED AND THE ASSESSEE HAD NEITHER PROVIDED ANY RECORDS FOR MONEY LENDING NOR G A VE ANY DETAILS OF LOAN AND INTEREST RECEIVED. THE ASSESSING OFFICER OBSERVED THAT DURING THE COURSE OF POST SEARCH PROCEEDINGS , THE DDIT(INV .) HAD RECORDED STATEMENTS OF SOME PERSONS WHO HAD TAKEN LOAN FROM THE FAMILY MEMBERS OF THE ASSESSEE A ND HAD STATED THAT THE RATE OF INTEREST WAS CHARGED @ RS. 1 / - TO 6 RS. 2 / - PER MONTH. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HERSELF HAD DECLARED MONEY LENDING DEBTORS AT RS. 4 LAC AND BY TAKING THE INTEREST @ 1.5% PER MONTH I.E. 18% PER YEAR , THE ASSESSING OFFICER ESTIMATED THE INCOME AT RS. 72,000/ - AND ACCORDINGLY MADE THE ADDITION OF RS. 32,000/ - . 10 . AGAINST THE SAID ADDITION, THE ASSESSEE PREFERRED AN APPEAL TO THE LD. CIT(A) AND SUBMITTED THAT THE ADDITION OF RS. 32,000/ - WAS BASED ON PRESUMPTION AND ASSUMPTION ONLY WITHOUT ANY POSITIVE OR CORROBORATIVE EVIDENCE FOR THE SAME. THE ASSESSEE ALSO RELI ED THE ORDER DATED 29/10/2009 OF THE THEN LD. CIT(A) FOR THE A.Y. 2005 - 06. 11 . THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT THE THEN LD. CIT(A) DELETED THE ADDITION FOR THE A.Y. 200 5 - 06 AFTER GIVING DETAILED FIND INGS BASED ON REASONING IN THE APPEAL FOR THE A.Y. 1999 - 2000 AND THAT THE FACTS WERE IDENTICAL FOR THE YEAR UNDER CONSIDERATION . HE THEREFORE, DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. NOW THE DEPARTMENT IS IN APPEAL. 12. LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT CONTROVERT THE AFORESAID FINDINGS GIVEN BY THE LD. CIT(A). 7 13 IN HIS RIVAL SUBMISSIONS , LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE SIMILAR ADDITIONS HAVE BEEN DELETED FOR THE A.Y. 2005 - 06 BY THE LD. CIT(A) AND AGAINST THE SAID DELETION OF ADDITION, THE DEPARTM ENT HAD NOT FILED ANY APPEAL. THEREFORE, THE APPEAL OF THE REVENUE MAY BE DISMISSED ON THIS ISSUE. 14 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN OUR OPINION, THE LD. CIT(A) RIGHTLY DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER ON THE BASIS OF PRESUMPTION AND ASSUMPTION PARTICULARLY WHEN A SIMILAR ADDITION WAS DELETED FOR THE A.Y. 2005 - 06 AND THE DEPARTMENT HAD NOT PREFERRED ANY APPEAL AGAINST THE SAID DELETION. WE THER EFORE, DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 15 VIDE GROUND NO. 3, THE GRIEVANCE OF THE DEPARTMENT RELATES TO THE DIRECTION OF THE LD. CIT(A) TO TREAT THE AGRICULTURAL INCOME AT RS. 75,000/ - AS AGAINST RS. 42,000/ - (WRONGLY MENTIONED AS RS. 58,000/ - ) ESTIMATED BY THE ASSESSING OFFICER. 16 FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSEE HAD DECLARED AGRICULTURAL INCOME OF RS. 1 LAC. D URING THE COURSE OF 8 ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE BASIS FOR THE AGRICULTURAL INCOME IN THE FORM OF SALE BILLS OF THE AGRICULTURE PRODUCE, PURCHASE BILLS OF MANURE, PESTICIDES AND JAMABANDI & GIRDAWARI REPORT ETC. THE ASSESSEE SUBMITTED THAT THE BA SIS OF AGRICULTURAL INCOME DECLARED WAS ON ESTIMATE AFTER CONSIDERING THE POSITION OF HOLDING OF AGRICULTURE LAND AND RELATED ACTIVITIES CONDUCTED BY THE FAMILY. HOWEVER, T HE ASSESSING OFFICER OBSERVED THAT IN THE YEAR UNDER CONSIDERATION THERE WAS SCARCITY OF RAIN AND THE ASSESSEE HAD VERY SMALL LAND, HAVING IRRIGATED FACILITY AS PER GIRDAWA RI REPORT . HE ALSO OBSERVED THAT THE FIGURES OF THE ASSESSEE FOR AGRICULTUR AL INCOME WERE NOT BASED ON ANY EVIDENCES BUT ALSO APPEARED HYPOTHETIC AS THERE WAS REGULAR INCREAS E IN AGRICULTUR AL INCOME . THE ASSESSING OFFICER POINTED OUT THAT IN THE A.Y. 2005 - 06 , THE AGRICULTURE INCOME OF THE ASSESSEE WAS ASSESSED AT RS. 54,000/ - AND THE PRICES OF THE CROP WERE LOW IN THE YEAR UNDER CONSIDERATION THAN RELEVANT TO T HE A.Y. 2005 - 06 . HE THEREFORE, ESTIMATED THE INCOME OF THE ASSESSEE AT RS. 42,000/ - AND THE REMAINING INCOME DECLARED I.E. RS. 58,000/ - (RS. 1,00,000 / - ( - ) RS. 42,000 / - ) WAS ADDED TO THE INCOME OF THE ASSESSEE AS INCOME FROM OTHER SOURCES. 17 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER WAS NOT IN 9 CONFORMITY WITH THE LAW AND CONTRARY TO THE FACTS OF THE CASE. IN ADDITION TO THE ABOVE, THE OTHER SUBMISSIONS WER E SIMILAR AS WERE FOR THE ISSUES AGITATED IN GROUND NOS. 1 & 2 (SUPRA) 18 THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, ESTIMATED THE AGRICULTURE INCOME AT RS. 7 5,000 / - BEING 75% OF RS. 1 LAC AND THE BALANCE AMOUNT SHOWN I.E. RS. 25,000/ - WAS HELD TO BE ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. THE LD. CIT(A) WHILE DOING SO FOLLOWED THE ORDER DATED 29/10/2009 OF HIS PREDECESSOR FOR THE A.Y. 2005 - 06 WHEREIN THE ADDITION WAS REDUCED AFTER GIVING DETAILED FINDINGS BASED ON THE REASONING GIVEN IN THE APPEAL FOR THE A.Y. 1999 - 2000 . NOW THE DEPARTMENT IS IN APPEAL. 19 AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND THE MATERIAL ON RECORD, IT APPEARS THAT THE ASSESSING OFFICER MADE THE ADDITION ON THE B ASIS OF SURMISES AND CONJECTURES. IT IS ALSO NOTICED THAT THE ASSESSEE HAS ALSO FURNISHED CHART BEFORE THE ASSESSING OFFICER WHICH HAS BEEN DISCUSSED AT PAGE NO.5 OF THE ASSESSMENT ORDER AND REVEALED THAT THE AGRICULTURE INCOME IN THE VARIOUS FINANCIAL YE ARS WAS SHOWN BY THE ASSESSEE AS UNDER: - 10 1998 - 99 1999 - 00 2000 - 01 20001 - 02 2002 - 03 2003 - 04 2004 - 05 50,000 66,000 70,000 1,00,000 1,50,000 1,75,000 2,00,000 FROM THE ABOVE CHART , IT WOULD BE CLEAR THAT THE INCOME SHOWN BY THE ASSESSEE IN THE PRECEDING YEAR WAS AT RS. 70,000/ - AND IT IS NOT THE CASE OF THE DEPARTMENT THAT THE SAID INCOME WAS NOT ACCEPTED. WE THEREFORE, ARE OF THE VIEW THAT THE LD. CIT(A) WAS JUSTIFIED IN ESTIMATING THE AGRICULTUR AL INCOME FOR THE YEAR UNDER CONSIDERATIO N AT RS. 75,000/ - . ACCORDINGLY, WE DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 20 THE LAST ISSUE VIDE GROUND NO. 4 RELATES TO THE DELETION OF ADDITION OF RS. 14,40,240/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED DEPOSITS IN THE BANK, INVESTMENT IN FDR AND INTEREST THEREON. 21 FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICE D THAT THE ASSESSEE HAD NOT FURNISHED ANY DETAILS OF BANK ACCOUN T AND ALSO HAD NOT DECLARED ANY BANK ACCOUNT IN HER STATEMENT OF AFFAIRS FILED DURING THE 11 COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER, THE ASSESSEE FURNISHED A COPY OF SAVING BANK ACCOUNT NO. 006546 TO THE ACIT, CENTRAL CIRCLE - 2, UDAIPUR DURING THE COURSE O F ASSESSMENT PROCEEDINGS IN THE CASE OF SHRI BHIM SINGH DEVADA . THE ASSESSING OFFICER POINTED OUT THAT IN THE SAID ACCOUNT THERE WAS DEPOSIT OF RS. 13,90,432/ - OUT OF WHICH RS. 1,60,000/ - WAS RECEIVED FROM THE BANK ACCOUNT NO. 10945 OF THE HUSBAND OF THE ASSESSEE AND RS. 19,439/ - & RS. 23,326/ - IN THE YEAR RELEVANT TO THE ASSESSMENT YEAR 2003 - 04 & 2004 - 05 RESPECTIVELY. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF DEPOSIT S . AS THERE WAS NO COMPLIANCE FORM THE ASSESSEE, THE ASSESSING OFFICER ADDED RS. 11,72,490/ - TO THE INCOME OF THE ASSESSEE. THE ASSESSING OFFICER ALSO OBSERVED THAT INFORMATION WAS CALLED FORM THE BANK U/S. 133(6) OF THE ACT WHICH RE VEALED THAT THE ASSESSEE INVESTED RS. 2,43,000/ - ON 16/01/2001 IN THE FDR AND AS THE AMOUNT REMAIN ED UNEXPLAINED, THE SAME WAS ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE RECEIVED INTEREST OF RS. 36,750/ - ON THE FDR WHICH WAS NOT DISCLOSED. HE ALLOWED DEDUCTION U/S. 80 L OF THE ACT AMOUNTING TO RS. 12,000/ - AND ADDED RS. 24,750/ - (RS. 36, 750/ - ( - ) RS. 12,000/ - ) TO THE INCOME OF THE ASSESSEE. 12 22 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: - THE LEARNED AO HAS MADE FOLLOWING ARBITRARY ADDITIONS AGAINST DEPOSIT IN BANK OR INVESTMENT IN FDR IN THE YEAR UNDER CONSIDERATION: - THAT THE LEARNED ASSESSING OFFICER HAS ERRED AT LAW IN ARBITRARY MAKING ADDITION ON ACCOUNT OF UNEXPLAINED SOURCES OF INVESTMENT IN FDR OR DEPOSIT IN SAVING BANK ACCOUNT ON ESTIMATED BASIS WITHOUT CONSIDERING AND APPRECIATING THE TRUE AND REAL FACTS OF THE CASE. THERE WERE SUFFICIENT EVIDENCES AVAILABLE ON RECORDS IN SUPPORT OF SOURCE OF DEPOSIT. THE LEARNED AO HAS NOT CO NSIDERED THE MATERIAL EVIDENCES AVAILABLE ON RECORDS AND HAS ALSO NOT CONSIDERED THE EXPLANATIONS FURNISHED BY THE ASSESSEE FROM TIME TO TIME. THE LEARNED AO HAS NEITHER POINTED OUT ANY SPECIFIC DEFECT IN THE STATEMENT OF AFFAIRS FURNISHED BY THE ASSESSEE NOR GIVEN ANY SPECIFIC INSTANCE OF SUPPRESSION OF INCOME BY THE ASSESSEE. THE SUBMISSIONS GIVEN AT THE TIME OF ASSESSMENT OF SEARCHED PERSON ALONG WITH AFFIDAVITS OF FAMILY MEMBERS AND RELATED PERSONS, ENQUIRY REPORT OF INSPECTORS OF INCOME TAX AND CONFIRM ATIONS OF VARIOUS CUSTOMERS ARE SELF EXPLANATORY REGARDING SOURCE OF INCOME AS WELL AS AVAILABILITY OF CASH AND FUNDS. CASH FLOW STATEMENTS, FUND FLOW STATEMENTS ALONG WITH STATEMENT OF AFFAIRS AT THE END OF EACH YEAR ARE AVAILABLE ON RECORDS OF AO AT THE TIME OF ASSESSMENT BUT HE HAS NOT CONSIDERED THE SAME. COPY OF RELATED DOCUMENTS IS ENCLOSED HEREWITH IN SUPPORT OF INCOME DECLARED UNDER VARIOUS HEADS BY THE ASSESSEE OR HIS FAMILY MEMBERS FOR YOUR PERUSAL AND CONSIDERATION. ASSESSMENT YEAR DEPOSIT IN BANK /FDR REMARK 2002 - 03 RS 1172490/ - RS 243000/ - RS 024750/ - SOURCES DULY EXPLAINED BUT NOT CONSIDERED BY AO. 13 THE LEARNED AO HAS NOT APPRECIATED THE FOLLOWING REPLY FURNISHED BY THE ASSESSEE WITH REGARDS TO EXPLANATION CALLED FOR AGAINST BANK DEPOSIT. AS REGARDS THE TRANSACTION RECORDED IN THE BANK STATEMENT WE LIKE TO DRAW YOUR ATTENTION TOWARDS THE FACT THAT THE CONCERN BANKS ARE NOT PROVIDING INFORMATIONS TO THE ASSESSEE BECAUSE THE DEPARTMENT HAS NOT VACATED THE PROHIBITORY ORDER DATED 11 - 03 - 2005 TILL DATE. THE ASSESSEE GROUP HAS APPLIED TO THE ADDITIONAL DIRECTOR (INVESTIGATION) AS WELL AS TO THE BRANCH MANAGER IN WRITING FOR V ACATION OF PROHIBITORY ORDER. NO POSITIVE RESPONSE HAS BEEN RECEIVED SO FAR. HENCE IN THE ABSENCE OF EVIDENCE THE DAY TO DAY TRANSACTION IN BANK CAN BE VERIFIED ONLY ON INSPECTION OF RECORDS OF BANK BECAUSE THE ASSESSEE HAS NOT MAINTAINED DAY TO DAY CASH B OOK. THE VERIFICATION IS REQUESTED TO BE MADE BY INVOKING POWERS U/S 133(6) OR U/S 131 IN THE INTEREST OF EQUITY AND JUSTICE WITH THE ASSESSEE. THE RELEVANT BANK ACCOUNT AND STATEMENTS WERE PROVIDED TO THE DEPARTMENT BY THE BANK IN THE MONTH OF MARCH 2005. NOTHING HAS BEEN ENQUIRED PRIOR TO PRESENT QUERY LETTER. AS THE SITUATION IS BEYOND THE CONTROL OF THE ASSESSEE DUE TO NON CO - OPERATION BY THE DEPARTMENT / BANK OFFICIALS, IT IS NOT PRACTICABLE BY NOW TO FURNISH THE SPECIFIC INFORMATION REGARDING EACH ENT RY IN THE BANK. THE ASSESSEE HAD IMMEDIATELY APPLIED FOR VACATION OF PROHIBITORY ORDER AGAINST HIS BANK ACCOUNT JUST AFTER FURNISHING OF THE SAME BEFORE YOUR GOOD SELF ALSO. HOWEVER AS MARK OF CO - OPERATION WE HAVE TO EXPLAIN THAT THE DEPOSIT IN BANK WERE FROM SAVING OF AGRICULTURAL INCOME, DAIRY INCOME REPAYMENT RECEIVED AGAINST MONEY LENDING, SALE OF AGRICULTURAL LAND AND CONTRIBUTION RECEIVED FROM CO OWNERS FOR INVESTMENT IN PLOT PURCHASED JOINTLY FROM UIT AT SUB CITY CENTRE, UDAIPUR. COPY OF DOCUMENTS RELATED TO JOINT INVESTMENT IN PLOT OF SUB CITY CENTRE IS FURNISHED ALONG WITH REPLY OF SMT. MOHAN KUNWAR ONE OF THE JOINT OWNER. THE LEARNED AO HAS NOT CONFRONTED THE COPY OF BANK ACCOUNT OBTAINED BY HIM USING HIS POWER UNDER THE ACT BEFORE MAKING ADDITIO N IN THE DECLARED 14 INCOME AGAINST THE AMOUNT DEPOSITED IN SUCH ACCOUNT. IN FACT THE AMOUNTS DEPOSITED WERE THROUGH ACCOUNT PAYEE CHEQUES BEING TRANSFER ENTRY APPEARING IN THE STATEMENT ITSELF. IT WAS NOTHING BUT SHARE OF CONTRIBUTION OF JOINT OWNERS IN THE PROPERTY PURCHASED FROM UIT. THIS FACT WAS VERIFIABLE FROM THE REPLIES AVAILABLE ON RECORDS OF AO ITSELF. THE ASSESSEE HAD SUPPLIED COPY OF ALL REPLIES FURNISHED IN THE CASE OF SEARCHED PERSON BEFORE ACIT CENTRAL - 2, UDAIPUR TO THE PRESENT AO ALSO FOR HIS CONSIDERATION. BUT THE AO HAS NOT CONFRONTED NOR ALLOWED PROPER OPPORTUNITY TO REBUT HIS OBSERVATIONS IN SUPPORT OF ADDITIONS. FURTHER THE LEARNED AO HAS WRONGLY STATED THAT THE BALANCE IN BANK ACCOUNTS WAS NOT APPEARING IN THE STATEMENT OF AFFAIRS. HE FAI LED TO UNDERSTAND THAT ONLY BALANCE AT THE LAST DAY OF ACCOUNTING IS APPEARING IN THE STATEMENT OF AFFAIRS. AS THE DEPOSITS CONSIDERED BY HIM WERE WITHDRAWN IMMEDIATELY FOR PAYMENT TO UIT THERE WAS NO QUESTION OF APPEARING THE SAME AS BALANCE IN BANK ON TH E DATE OF BALANCE SHEET/STATEMENT OF AFFAIRS. THE INVESTMENT IN UIT BY EACH PERSON HAS BEEN DECLARED IN THEIR RELATED STATEMENT OF AFFAIRS. THE LEARNED AO HAS RESORTED TO PICK AND CHOOSE METHOD FOR APPLYING STATEMENT OF AFFAIRS FURNISHED BY THE ASSESSEE IN THE ASSESSMENT WITHOUT ACCEPTING THE SAME IN TOTO. THE ADDITION IS BASED ON ASSUMPTIONS, PRESUMPTION, CONJECTURE AND SURMISES WITHOUT BRINGING ANY CORROBORATIVE MATERIAL ON RECORD. THE STATEMENT OF AFFAIRS AVAILABLE ON RECORDS REFLECTS THE TRUE POSITION OF ASSETS AND LIABILITIES AT THE END OF EACH YEAR AND HENCE THE ESTIMATES BY THE ASSESSEE CAN BE CONSIDERED TRUE AND FAIR BASED ON REAL TRANSACTIONS AND MATERIAL AVAILABLE ON RECORDS. THE LEARNED ASSESSING OFFICER HAS NOT APPRECIATED THE SUBMISSIONS OF THE ASSESSEE IN THEIR TRUE PERSPECTIVES NOR HE HAS SUPPORTED HIS CALCULATION OR LINKED THE AVAILABILITY OF CASH WITH THE ASSESSEE IN ANY INVESTMENT OTHER THAN THE DEPOSITS CLAIMED BY THE ASSESSEE IN THE STATEMENT OF AFFAIRS. THE ASSESSEE HAD SUFFICIENT FUNDS AT THE TIME OF DEPOSIT OF THE SAME IN THE BANK AND WHICH IS CROSS VERIFIABLE FROM THE INCOME ASSESSED BY THE AO HIMSELF IN THE VARIOUS YEARS. A CHART SHOWING RECEIPTS AND PAYMENTS 15 ACCORDING TO THE ASSESSEE AS WELL AS RECEIPTS AND PAYMENTS ASSESSED BY ASSES SING OFFICER FOR ALL THE YEARS IN THIS CASE IS ATTACHED HEREWITH FOR YOUR CONSIDERATION. ON PERUSAL OF THE CHART THE ADDITIONS BASED ON ILLOGICAL OBSERVATIONS AND ON ASSUMPTIONS AND PRESUMPTIONS FOR EACH YEAR IS SELF EXPLANATORY ABOUT THE ILLOGICAL AND IRR ATIONAL ESTIMATION BY HIM. FURTHER IN THIS CASE, EVEN THE LEARNED ASSESSING OFFICER HAS NOT APPRECIATED IN ITS TRUE SENSE THE ORDER OF SEARCHED PERSON IN THIS CASE, WHICH IS THE VERY BASE OF ASSESSMENT UNDER SECTION 153 C. AS IN THE CASE OF SEARCHED PERSON THE LEARNED ACIT CENTRAL - 2 HAS H E LD THAT THE CASH BALANCE FOUND AT THE TIME OF SEARCH FROM THE COMMON PREMISES BELONGED TO SHRI BHIM SINGH DEWARA (INDIVIDUAL) ONLY WHICH MEANS HE WAS OF THE VIEW THAT THERE WERE NO SAVINGS OUT OF INCOME OF THE OTHER FAMIL Y MEMBERS INCLUDING THE HUF. THE VIEW OF LEARNED ASSESSING OFFICER WARD 2(1) UDAIPUR IS ALTOGETHER DIFFERENT IN THIS REGARD. FURTHER THE LEARNED ASSESSING OFFICER HAS NOT COMMENTED ABOUT THE HOUSE HOLD EXPENSES HENCE IT IS PRESUMED THAT HE WAS SATISFIED AB OUT THE WITHDRAWALS BY EACH FAMILY MEMBERS FOR COMMON HOUSE HOLD EXPENSES PURPOSES. THE LEARNED ASSESSING OFFICER FAILED TO OBSERVE THAT ANY INCREASE/ADDITION IN INCOME WILL TANTAMOUNT TO INCREASE IN CASH SAVINGS OF THE ASSESSEE. AS THERE WAS NO CASH BALAN CE IN EXCESS OF THE CASH BALANCE DECLARED IN STATEMENT OF AFFAIRS BY THE ASSESSEE AND OTHER FAMILY MEMBERS THE INCREASE IN DECLARED INCOME IS UNJUSTIFIED AND AGAINST A L L CANONS OF NATURAL JUSTICE. THE ASSESSING OFFICER CANNOT BLOW HOT & COLD AT A SAME TIME. THE AO HAS NOT PROVED WITH ANY CORROBORATIVE MATERIAL THAT THE ASSESSEE HAD INVESTED THE WITHDRAWALS AGAINST SUCH DEPOSITS OTHER THAN THE DEPOSITS/ASSETS DECLARED BY HIM. HENCE NO ADDITION CAN BE MADE JUST ON ESTIMATED BAS I S WITHOUT PROVING ANY OTHE R SOURCE OF INCOME FOR SUCH DEPOSIT. THE AMOUNT DEPOSITED IN BANK ACCOUNT WAS THROUGH TRANSFER ENTRIES HENCE CANNOT BE TREATED AS UNEXPLAINED DEPOSIT WITHOUT INDEPENDENT ENQUIRY REGARDING TRANSFER OF FUNDS. THE EXPLANATIONS REGARDING SOURCES OF 16 DEPOSITS WE RE SUFFICIENT LOOKING TO PAYMENT TO UIT APPEARING IN THE SAME BANK STATEMENT AS VERIFIABLE FROM THE STATEMENT OBTAINED BY THE AO FROM THE BANK. THE LEARNED AO HAS NOT COMMENTED RATHER IGNORED THE WITHDRAWALS AGAINST SUCH DEPOSITS BEFORE TREATING THE DEPOSI TS FROM UNDISCLOSED INCOME OF THE ASSESSEE. 23 THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT THE ASSESSING OFFICER MADE THE ADDITION TREATING THE DEPOSITS IN BANK ACCOUNT AS CASH DEPOSITS WHEREAS ALMOST ALL THE DEPO SITS WERE IN FACT DEPOSITS THROUGH CHEQUES AND APPEARING IN THE BANK STATEMENT AS TRANSFER ENTRY ONLY. HE FURTHER OBSERVED THAT THE ASSESSEE HAD DEPOSITED AMOUNT THROUGH DEMAND DRAFT IN UIT AGAINST JOINT PURCHASE OF LAND FOR WHICH THE JOINT OWNERS HAVE CONTRIBUTED THEIR SHARE WHICH WAS RECEIVED THROUGH CHEQUES AND DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION . THE LD. CIT(A) POINTED OUT THAT THE FACTS RELATED TO PURCHASE OF SUCH LAND HAD BEEN EXPLAINED BY THE ASSESSEE IN THE CASE OF SEARCHED PERSON SHRI BHIM SINGH DEVADA AND COPY OF THE ASSESSMENT ORDER WAS ALSO PROV IDED TO THE ASSESSING OFFICER FROM WHICH IT TRANSPIRES THAT THE ASSESSEE HAD JOINTLY INVESTED IN PURCHASE OF PLO T AT SUB - CITY CENTRE, UDAIPUR WHICH WAS ORIGINALLY AUCTIONED BY THE UIT AND ACCEPTED THE BID OFFER ED BY SHRI MADANDAS VAISHNAV. HOWEVER, DUE TO ACCIDENTAL DEATH OF SHRI MADANDAS VAISHNAV, THE LAND WAS ALLOTTED BY 17 UIT IN THE NAME OF FAMILY MEMBERS OF THE ASSESSEE AND OTHER JOINT OWNERS WHO HAVE CONTRIBUTED THROUGH CHEQUE S TO THE ASSESSEE WHICH WAS CONSIDERED BY THE ASSESSING OFFICER AS CASH DEPOSITS INSTEAD OF TRANSFER CLEARLY APPEARING IN THE BANK STATEMENT ITSELF. THE LD. CIT(A) ALSO POINTED OUT THAT THERE WERE REGULAR SOURCE OF CASH EARNING S OF THE ASSESSEE AS WAS APPEARING FROM THE RECORDS AND T HE ASSESSING OFFICER HAD NOT BROUGHT ON RECORD ANY MATERIAL CONTRARY TO THE EXPLANATIONS FURNISHED BY THE ASSESSEE. THE LD. CIT(A) OBSERVED THAT THE ASSESSING OFFICER HAD NOT APPRECIATED THE STATEMENT S GIVEN AT THE TIME OF ASSESSMENT OF SEARCHED PERSON ALONG WITH AFFIDAVITS OF FAMILY MEMBERS AND RELATED PERSONS, ENQUIRY REPORT OF INSPECTOR OF INCOME - TAX AND CONFIRMATION OF VARIOUS CUSTOMERS FURNISHED BY THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS , WHICH WERE SELF EXPLANATORY REGARDING SOURCE OF INCOME AS WELL AS AVAILABILITY OF CASH AND FUNDS WITH THE ASSESSEE . THE LD. CIT(A) CATEGORICALLY STATED THAT ASSESSING OFFICER NEITHER POINTED OUT ANY SPECIFIC DEFECTS IN THE STATEMENT OF AFFAIRS FURNISHED BY THE ASSESSEE NOR GIVEN ANY SPECIFIC INSTANCE OF SUPPRESSION OF INCOME BY THE ASSESSEE . HE ALSO OBSERVED THAT FROM THE RECORDS, IT WAS EVIDENCED THAT THERE WERE SUFFICIENT SOURCE S OF INCOME IN CASH EVERY YEAR AND HENCE, THE CASH WAS AVAILABLE WITH THE ASSESSEE IN SUPPORT OF SOURCE OF DEPOSITS IN THE BANK. 18 THE LD. CIT(A) ALSO POINTED OUT THAT THE ASSESSING OFFICER HAD NOT CONSIDERED DEBIT AS WELL AS CREDIT ENTRIES IN THE BANK , THEREFORE, THE ARBITRARY ADDITION MADE BY THE ASSESSING OF FICER ON THE BASIS OF ASSUMPTIONS AND PRESUMPTIONS WITHOUT CONSIDERING THE RECEIPTS AND PAYMENTS OF THE YEAR AND WITHOUT LINKING THE WITHDRAWALS FROM THE BANK WITH ANY ASSETS OR INVESTMENT OR UTILIZATION CONTRARY TO THE EXPLANATIONS FURNISHED BY THE ASSESSEE , WAS NOT JUSTIFI ED . THE LD. CIT(A) MENTIONED THAT IT WAS FOUND ON THE RECORDS THAT THE SOURCE S OF DEPOSITS IN THE BANK WERE TRANSFER ENTRIES WHICH WERE DULY EXPLAINED, SO THE TREA T MENT OF THE CASH DEPOSITS AS INCOME FROM UNDISCLOSED SOURCES BY THE ASSESSING OFFICER WAS NOT JUSTIFIED . HE, THEREFORE, DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. NOW THE DEPARTMENT IS IN APPEAL. 24 LEARNED D.R. STRONGLY SUPPORTED THE ORDER PASSED BY THE ASSESSING OFFICER AND REITERATED THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER DATED 27/12/2007 . IT WAS FURTHER SUBMITTED THAT THE ASSESSEE DID NOT FURNISH ANY EVIDENCE BEFORE THE ASSESSING OFFICER, THEREFORE, THE ADDITION WAS RIGHT L Y MADE AND THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE SAID ADDITION. 25 IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR TH E ASSESSEE STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A) AND REITERATED THE SUBMISSIONS 19 MADE BEFORE HIM. IT WAS FURTHER STATED THAT THERE WAS SUFFICIENT EVIDENCE AVAILABLE ON RECORDS IN SUPPORT OF THE SOURCE OF DEPOSITS, BUT THE ASSESSING OFFICER HAD NOT CONSIDERED THE SAME AND ALSO D ID NOT CONSIDER THE EXPLANATION FURNISHED BY THE ASSESSEE FROM TIME TO TIME. IT WAS STATED THAT THE ASSESSING OFFICER HAD NEITHER POINTED OUT ANY SPECIFIC DEFECT IN THE STATEMENT OF AFFAIRS FURNISHED BY THE ASSESSEE NOR GIVE N ANY SPECIFIC INSTANCE OF SUPPRESSION OF INCOME. OUR ATTENTION WAS DRAWN TOWARDS PAGE NOS. 45 TO 55 OF THE PAPER BOOK WHICH ARE COPIES OF AFFIDAVITS, STATEMENT OF AFFAIRS FOR THE VARIOUS YEARS FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF SHRI BHIM SINGH DEVADA . IT WAS STATED THAT NOTHING CONTRARY TO THE EXPLANATION OF THE ASSESSEE WAS BR O UGHT ON RECORD BY THE ASSESSING OFFICER, THEREFORE, THE ADDITION MADE BY HIM WAS RIGHTLY DELETED BY THE LD. CIT(A). 26 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, ASSESSEE EXPLAINED THAT THE DEPOSITS IN THE BANK ACCOUNT WERE FROM THE FAMILY MEMBERS FOR PURCHASE OF LAND. THE CASH BALANCE WAS DECLARED IN THE STATEMENT OF AFFAIRS BY THE ASSESSEE AND OTHER FAMILY MEMBERS. THEREFORE, THE ADDITION ON ACCOUNT OF DEPOSITS IN THE BANK ACCOUNT WAS 20 NOT JUSTIFIED. THE ASSESSEE ALSO EXPLAINED THE SOURCE S FOR MAKING FDRS WHICH WERE FROM SAVING OF AGRICULTURE INCOME, DAIRY INCOME, REPAYMENT RECEIVED AGAINST MONEY LENDING . T HEREFORE, THE ADDITION ON ACCOUNT OF INVESTMENT IN FDR S AND INTEREST THEREON WAS ALSO NOT JUSTIFIED AND THE LD. CIT(A) RIGHTLY DELETED THE SAME. WE THEREFORE, CONSIDERING THE TOTALI T Y OF THE FACTS OF THE PRESENT CASE, ARE OF THE VIEW THAT THE ADDITION MADE BY THE ASSESSING OFFICER ON THE BASIS OF PRESUMPTION AND ASSUMPTION WAS RIGHTY DELETED BY THE LD. CIT(A). ACCORDINGLY, WE DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 27 IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSED . ( ORDER PRONOUNCED IN THE COURT ON 15 TH SEPTEMBER , 201 4) . S D/ - SD/ - ( HARI OM MARATHA ) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15 TH SEPTEMBER , 201 4 . VR/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R SR. PRIVATE SECRETARY , ITAT, JODHPUR .