DCIT, New Delhi V. Sh. Gagan Khosla, Delhi

ITA 208/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91520 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 29-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 13-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Assessee Lawyers: C S AGGARWAL
• Keywords: Unexplained investment; Unexplained expenditure; Capital asset; Fair market value; Valuation report
• Section: 69C; 69; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : C : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI H.S. SIDHU, JM ITA NO.208/DEL/2012 ASSESSMENT YEAR : 2008-09 DCIT, CIRCLE 9(1), R. NO.301-G, VIKAS BHAWAN, IP ESTATE, NEW DELHI. VS. GAGAN KHOSLA, A-340, NEW SUBZI MANDI, AZADPUR, DELHI. PAN: AASPK2110P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C.S. AGGARWAL, SR. ADVOCATE & SHRI RAVI PRATAP MALL, ADVOCATE DEPARTMENT BY : SHRI T. VASANTHAN, SR. DR DATE OF HEARING : 29.07.2015 DATE OF PRONOUNCEMENT : 31 .07.2015 ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 13.10.2011 IN RELATION TO THE ASSESSM ENT YEARS 2008-09. ITA NO.208/DEL/2012 2 2. GROUND NOS.1 AND 2 OF THIS APPEAL ARE INTERCONNE CTED AND, HENCE, THESE ARE BEING TAKEN UP TOGETHER FOR CONSIDERATION AND DECISION. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SOLE PROPRIETOR OF M/S NGK TRADING COMPANY WHICH IS ENGAGED IN THE BUS INESS OF PURCHASE AND SALE OF FRESH FRUITS. THE ASSESSEE IS ALSO A PROPRIETOR OF M/S FRESH PRODUCE SHOPPE AND RUNNING A DEPARTMENTAL STO RE FOR FRESH FRUITS. THE ASSESSEE PURCHASED A PROPERTY AT NAVI MUMBAI, B EARING FLAT NO.1502, 15 TH FLOOR, CUPOLA BUILDING, B-WING, BHUMIRAJ AT PLOT N O.1 AND 2, SECTOR 18, SANPADA, NEW MUMBAI AT A PRICE OF RS.34,65,000/- ON 18.1.2007. THE AO REFERRED THE MATTER OF VALUATION OF THIS PROPERTY TO THE DVO, WHO DETERMINED ITS VALUE AT RS.40,50,000/- . IT WAS ALSO INTIMATED THAT THE ASSESSEE HAD MADE ADDITIONS/ALTE RATIONS BY WAY OF FURNITURE AND FIXTURES AMOUNTING TO RS.3,81,999/-. ON BEING CALLED UPON TO EXPLAIN AS TO WHY DIFFERENCE OF RS.5,85,000/- (R S.40,50,000/- MINUS RS. 34,65,000/-) SHOULD NOT BE ADDED AS UNEXPLAINED INVESTMENT U/S 69 AND, FURTHER, WHY A SUM OF RS.3,81,999/- BE NOT ADD ED AS UNEXPLAINED EXPENDITURE U/S 69C FOR ADDITIONS/ALTERATIONS TO TH E SAID PROPERTY, THE ASSESSEE SUBMITTED THAT BESIDES THE ABOVE SALE CONS IDERATION OF RS.34.65 ITA NO.208/DEL/2012 3 LAC, THE ASSESSEE ALSO PAID RS.1,76,300/- TOWARDS S TAMP DUTY, RS.30,880/- TOWARDS REGISTRATION FEES AND RS.1,50,000/- TOWARDS COST OF PARKING SPACE. AS REGARDS THE SUM OF RS.3,81,999/-, THE AS SESSEE SUBMITTED THAT RENOVATION WAS CARRIED OUT IN THE SUCCEEDING FINANC IAL YEAR 2008-09 AND THE INVESTMENT/EXPENDITURE OF RS.3,81,999/- WAS DIS CLOSED IN THE BALANCE SHEET OF M/S NGK TRADING COMPANY. NOT CONVINCED WI TH THE ASSESSEES SUBMISSIONS, THE AO MADE ADDITION OF RS. 9,39,999/- (RS.5,85,000/- PLUS RS.3,81,999/-). THE LD. CIT(A ) ORDERED FOR THE DELETION OF THESE ADDITIONS. THE REVENUE IS AGGRIEV ED AGAINST SUCH DELETION. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT CAN BE OBSERVED THAT THE EN TIRE ADDITION MADE BY THE AO RESTS ON THE VALUATION REPORT OF THE DVO, WH O ESTIMATED THE VALUE OF PROPERTY AT RS.40.50 LAC AGAINST THE PURCH ASE PRICE AT RS.34,65,000/-. THE PROVISIONS OF SECTION 69, INVO KED BY THE AO PROVIDES THAT: `WHERE IN THE FINANCIAL YEAR IMMEDIA TELY PRECEDING THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS WHICH ARE NOT ITA NO.208/DEL/2012 4 RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINE D BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLAN ATION ABOUT THE NATURE AND SOURCE OF THE INVESTMENTS OR THE EXPLANA TION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATIS FACTORY, THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE THE INCOME OF THE A SSESSEE OF SUCH FINANCIAL YEAR. IT CAN BE OBSERVED FROM THIS PRO VISION THAT AN ADDITION TOWARDS UNEXPLAINED INVESTMENT CAN BE MADE ONLY WHE RE THE ASSESSEE HAS MADE INVESTMENTS , WHICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT. THE FACTUM OF THE ASSESSEE MAKING INVESTMENTS OUTSI DE THE BOOKS OF ACCOUNT IS REQUIRED TO BE POSITIVELY PROVED BY THE REVENUE WITH SOME COGENT EVIDENCE. A MERE DVOS REPORT, WHICH IS NOT HING MORE THAN AN ESTIMATE OF THE VALUE OF THE PROPERTY, CANNOT BE A SUBSTITUTE FOR AN EVIDENCE DIRECTLY INDICATING UNEXPLAINED INVESTMENT . A FAIR MARKET VALUE DETERMINED BY THE DVO NEED NOT NECESSARILY MA TCH WITH THE ACTUAL PRICE PAID INASMUCH AS THERE CAN BE SEVERAL REASONS FOR THE SALE OF A PROPERTY AT A HIGHER OR LOWER PRICE THAN ITS FAIR M ARKET VALUE. UNLESS THE AO BRINGS ON RECORD SOME AUTHENTIC MATERIAL DIVULGI NG THE ASSESSEE HAVING MADE INVESTMENT OVER AND ABOVE THAT DECLARED IN THE REGISTERED ITA NO.208/DEL/2012 5 SALE DEED, THERE CAN BE NO QUESTION OF INVOKING THE PROVISIONS OF SECTION 69 OF THE ACT. HERE IS A CASE IN WHICH THE ASSESSE E CLAIMED TO HAVE PURCHASED THE PROPERTY FOR A SUM OF RS.34.65 LAC AN D THE AO HAS MADE ADDITION OF RS.5.85 LAC SIMPLY ON THE BASIS OF DIFF ERENCE BETWEEN THE DVOS REPORT AND APPARENT SALE CONSIDERATION. NO A TTEMPT HAS BEEN MADE FOR VERIFYING THE PRICE FROM THE SELLER OF THE PROPERTY. IN OTHER WORDS, THERE IS NO POSITIVE MATERIAL EVIDENCING THE MAKING OF ACTUAL INVESTMENT BY THE ASSESSEE OVER AND ABOVE RS.34.65 LAC. UNDER SUCH CIRCUMSTANCES, THERE CAN BE NO POINT IN MAKING ANY ADDITION TOWARDS UNEXPLAINED INVESTMENT. HERE IT IS RELEVANT TO MENT ION THAT THE LEGISLATURE HAS CARRIED OUT AMENDMENT BY THE FINANC E ACT, 2013 W.E.F. 1.4.2014 BY SUBSTITUTING SECTION 56(2)(VII)(B) PROV IDING THAT WHERE AN INDIVIDUAL OR HUF RECEIVES ANY IMMOVABLE PROPERTY, INTER ALIA, FOR A CONSIDERATION WHICH IS LESS THAN THE STAMP DUTY VAL UE OF THE PROPERTY BY AN AMOUNT EXCEEDING RS.50,000/-, THE STAMP DUTY VAL UE OF SUCH PROPERTY AS EXCEEDED SUCH CONSIDERATION SHALL BE TAXED AS I NCOME FROM OTHER SOURCES. THE LEGISLATURE HAS BROUGHT IN SECTION 5 6(2)(VII)(B) WITH THE SOLE INTENTION OF BRINGING SUCH UNDER-PAYMENT OF SA LE CONSIDERATION OF ITA NO.208/DEL/2012 6 IMMOVABLE PROPERTY TO TAX. THIS PROVISION HAS BEEN ENSHRINED W.E.F. THE AY 2014-15 AND IS NOT APPLICABLE RETROSPECTIVELY TO THE AY 2008-09 UNDER CONSIDERATION. SINCE THIS PROVISION IS PRO SPECTIVE AND THERE IS NO OTHER AUTHENTIC EVIDENCE OF THE ASSESSEE HAVING ACT UALLY MADE ANY INVESTMENT OVER AND ABOVE THE DECLARED SALE CONSIDE RATION, WE ARE OF THE CONSIDERED OPINION THAT THE LD. CIT(A) WAS JUSTIFIE D IN DELETING THE ADDITION TO THE EXTENT OF RS.5,85,000/-. 4. AS REGARDS THE OTHER AMOUNT OF RS.3,81,999/-, WE FIND THAT THE ASSESSEE MADE A CATEGORICAL CLAIM BEFORE THE AUTHOR ITIES THAT THIS AMOUNT WAS SPENT ON FURNITURE AND FIXTURES DURING RENOVATI ON OF BUILDING WHICH WAS RECORDED IN THE BOOKS OF ACCOUNT FOR THE AY 200 8-09. THIS FACT HAS NOT BEEN DENIED BY THE AUTHORITIES THAT THE ASSESSE E, IN FACT, RECORDED THIS AMOUNT OF RS.3,81,999/- IN HIS BOOKS OF ACCOUNT OF M/S NGK TRADING COMPANY. ONCE THIS AMOUNT HAS BEEN DULY RECORDED I N THE BOOKS OF ACCOUNT OF A SUBSEQUENT YEAR AND THERE IS NO MATERI AL TO INDICATE THAT SUCH FURNITURE AND FIXTURE WAS PURCHASED IN THE YEA R IN QUESTION, WE ITA NO.208/DEL/2012 7 COUNTENANCE THE ACTION OF THE LD. CIT(A) IN DELETIN G THE ADDITION TO THIS EXTENT. THESE TWO GROUNDS ARE NOT ALLOWED. 5. GROUND NO. 3 IS AGAINST THE DELETION OF ADDITION OF RS.16,25,945/- MADE BY THE AO ON ACCOUNT OF THE INTEREST ON LOANS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HAD TAKEN SECURED AND UNSECURED LOANS TO THE TUNE OF RS.1,70, 25,179/- ON WHICH INTEREST OF RS.16,25,945/- WAS PAID. IT WAS ALSO N OTICED THAT THE ASSESSEE ADVANCED LOANS TO THE EXTENT OF RS.35 LAC TO EXOTIC FRESH PRODUCE PVT. LTD., AND RS.22,40,000/- TO NARCO EXPORTS ON WHICH NOMINAL INTEREST WAS CHARGED, WHICH WAS WITHOUT ANY BUSINESS EXPEDIE NCY. THE ASSESSEE WAS ALSO FOUND TO HAVE MADE ADDITIONAL PAYMENT OF R S.16,05,662/- FOR PURCHASE OF SHOP AT SOUTH CITY, GURGAON. IN SPITE OF THE ASSESSEE HAVING HUGE CASH AND BANK BALANCES OF RS.1,50,17,867/-, TH E AO OBSERVED THAT THE ASSESSEE HAD TAKEN INTEREST BEARING LOANS, WHIC H OUGHT NOT HAVE BEEN DONE. HE FURTHER NOTICED THAT THE ASSESSEE REPAID A SUM OF RS.60 LAC TO VARIOUS PERSONS FROM WHOM UNSECURED LOANS WERE TAKE N IN EARLIER YEARS. IN THE BACKGROUND OF THESE FACTS, HE OPINED THAT TH E ASSESSEE DIVERTED ITA NO.208/DEL/2012 8 BUSINESS FUNDS AND INTEREST BEARING FUNDS EITHER FO R GIVING LOANS AND ADVANCES OR INVESTMENT IN PROPERTIES OR FOR REPAYIN G OF LOANS. THE ASSESSEE WAS SHOW CAUSED AS TO WHY DEDUCTION FOR IN TEREST AMOUNTING TO RS.16.25 LAC BE NOT DENIED. THE ASSESSEE EXPLAINED ITS STAND THAT HAS BEEN REPRODUCED ON PAGE 4 OF THE ASSESSMENT ORDER, WHICH WE WILL SHORTLY ADVERT TO. NOT CONVINCED WITH THE ASSESSEE S SUBMISSIONS, THE AO MADE AN ADDITION OF RS.16,25,945/-. THE LD. CIT( A) ORDERED FOR THE DELETION OF ADDITION. THE REVENUE IS BEFORE US AGAI NST THE DELETION OF SUCH ADDITION. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOTED THAT THE AO HAS DI SCUSSED THE ISSUE OF ADVANCING LOANS IN VARIOUS SEGMENTS, THE FIRST BEIN G LOANS AND ADVANCES OF RS.57,40,000/- GIVEN TO SISTER CONCERNS, VIZ., E XOTIC FRESH FRUITS PRODUCE LTD., AND M/S NARCO EXPORTS. IN THIS REGAR D, IT IS PERTINENT TO NOTE THAT THE ASSESSEE CHARGED INTEREST @ 11% ON SU CH AMOUNTS WHICH WAS SHOWN AS INCOME IN ITS PROFIT & LOSS ACCOUNT. IT IS OBVIOUS THAT WHEN INTEREST HAS BEEN RECEIVED @ 11% AS AGAINST PA YMENT OF INTEREST ITA NO.208/DEL/2012 9 @ 10% TO 11% ON THE LOANS TAKEN BY THE ASSESSEE, TH ERE CAN BE NO QUESTION OF MAKING ANY DISALLOWANCE OF INTEREST. 7. THE SECOND COMPONENT IS ADDITIONAL PAYMENT O F RS.16,05,662/- MADE BY THE ASSESSEE FOR PURCHASE OF SHOP AT SOUTH CITY, GURGAON, WHICH WAS SHOWN AS INVESTMENT IN THE BALANCE SHEET OF M/S NGK TRADING COMPANY. WE HAVE GONE THROUGH THE ASSESSEE S BALANCE SHEET OF NGK TRADING COMPANY, A COPY OF WHICH IS AVAILABL E AT PAGE 5 OF THE PAPER BOOK. IT CAN BE SEEN THAT THE ASSESSEE MADE INVESTMENT OF RS.16,05,662/- IN SHOP AT SOUTH CITY-II, GURGAON D URING THE YEAR UNDER CONSIDERATION AND THE REMAINING AMOUNT OF RS.10 LAC WAS INVESTED IN THE PRECEDING YEAR, MAKING THE TOTAL FIGURE OF INVESTME NT IN SHOP AT RS.26.05,662 APPEARING IN THE BALANCE SHEET. THE CASE OF THE ASSESSEE IS THAT THIS SHOP WAS PURCHASED FOR CARRYING ON BUSINE SS. 8. SECTION 36(1)(III) OF THE ACT ALLOWS DEDUCT ION FOR THE AMOUNT OF INTEREST PAID IN RESPECT OF CAPITAL BORROWED FOR TH E PURPOSES OF BUSINESS OR PROFESSION. EVEN IF THE BORROWINGS ARE MADE FOR ACQUIRING CAPITAL ASSET BUT FOR BUSINESS PURPOSE, INTEREST PAID ON SU CH BORROWING IS ITA NO.208/DEL/2012 10 ALLOWABLE U/S 36(1)(III) BECAUSE ACQUIRING ASSETS F OR CARRYING ON BUSINESS IS ALSO A BUSINESS PURPOSE. WHAT IS SIGNIFICANT TO NOTE HERE IS THAT THE LEGISLATURE HAS INSERTED PROVISIONS TO SECTION 36(1 )(III) BY THE FINANCE ACT, 2003 W.E.F. 1.4.2004, WHICH PROVIDES THAT ANY AMOUNT OF INTEREST PAID IN RESPECT OF CAPITAL BORROWED FOR ACQUISITION OF AN ASSET, ETC., FOR ANY PERIOD BEGINNING FROM THE DATE ON WHICH THE CAP ITAL WAS BORROWED FOR ACQUISITION OF THE ASSET TILL THE DATE ON WHICH SUCH ASSET WAS FIRST PUT TO USE, SHALL NOT BE ALLOWED AS DEDUCTION. THE EFF ECT OF THE INSERTION OF THIS PROVISO IS THAT EVEN IN A RUNNING BUSINESS WHE RE INTEREST IS PAID FOR ACQUISITION OF AN ASSET, THE SAME SHALL NOT BE ALLO WED AS DEDUCTION TILL THE DATE ON WHICH SUCH ASSET IS FIRST PUT TO USE. IN SIMPLE WORDS, INTEREST FOR THE PERIOD UP TO THE DATE OF PUTTING THE ASSET TO USE FOR THE FIRST TIME IS NOT DEDUCTIBLE U/S 36(1)(III), BUT, IS REQUIRED TO BE CAPITALIZED. COMING BACK TO THE FACTS OF THE INSTANT CASE, IT IS FOUND AS AN ADMITTED POSITION THAT THE ASSESSEE MADE INVESTMENT IN SHOP AT SOUTH CITY, GURGAON, AMOUNTING TO RS.16.05 LAC IN THE CURRENT YEAR AND A SUM OF RS.10 LAC WAS PAID IN THE PRECEDING YEAR. THE CASE OF THE ASSESS EE IS THAT THE SHOP WAS ACQUIRED FOR CARRYING ON BUSINESS FROM THIS PREMISE S. THERE IS NO ITA NO.208/DEL/2012 11 MATERIAL ON RECORD MANIFESTING THE DATE FROM WHICH SUCH SHOP WAS ACTUALLY PUT TO USE. GOING BY THE PROVISO TO SECTIO N 36(1)(III), ANY INTEREST PAID FOR THE PERIOD UP TO THE DATE OF ACTU AL USE OF THE SHOP, CANNOT BE ALLOWED AS DEDUCTION. THE AO IS DIRECTED TO ASCERTAIN THE DATE FROM WHICH THE ASSESSEE TOOK POSSESSION OF THIS SHO P AND THEN PUT IT TO USE. INTEREST UP TO THE DATE OF PUTTING SUCH SHOP O F SOUTH CITY-II, GURGAON TO USE SHALL NOT BE ALLOWED AS DEDUCTION, B UT, WILL BE CAPITALIZED. IN THE ABSENCE OF ANY MATERIAL THROWIN G LIGHT ON THE ABOVE ISSUES, WE SET ASIDE THE IMPUGNED ORDER AND REMIT T HE MATTER TO THE FILE OF AO FOR DECIDING THIS ISSUE IN CONFORMITY WITH OU R ABOVE OBSERVATIONS. 9. THE NEXT ITEM IS LOANS ADVANCED TO SISTER CONCER NS, NAMELY, EXOTIC FRESH PRODUCE PVT. LTD., AND NARCO EXPORTS. THE AS SESSEE CHARGED INTEREST ON SUCH ADVANCES TO SISTER CONCERNS AT 11% AGAINST THE PAYMENT OF INTEREST AT 10% TO 11% ON LOANS AND ADVANCES TAK EN BY HIM. AS SUCH, THERE CAN BE NO QUESTION OF MAKING ANY DISALLOWANCE OF INTEREST TOWARDS THE USE OF INTEREST BEARING FUNDS FOR NON-BUSINESS PURPOSE. ITA NO.208/DEL/2012 12 10. THE NEXT ITEM IS CASH AND BANK BALANCE OF RS.1, 50,17,867/- WHICH INCLUDES DEMAND DRAFTS IN HAND AMOUNTING TO RS.51,0 3,840/-. THE VERY FACT THAT THIS MUCH CASH AND BANK BALANCE IS AVAILA BLE WITH THE ASSESSEE AT THE YEAR END, CANT BE A GROUND FOR MAKING ANY D ISALLOWANCE TOWARDS THE INTEREST PAID ON INTEREST BEARING LOANS TAKEN B Y THE ASSESSEE FOR THE SIMPLE REASON THAT RETAINING OF AMOUNT IN CASH AND BANK BALANCES DOES NOT IN ANY MANNER INDICATES THE DIVERSION OF FUNDS FOR NON-BUSINESS PURPOSE. IT IS FOR THE ASSESSEE TO DECIDE AS TO HO W HE HAS TO CONDUCT HIS BUSINESS BY KEEPING THE BORROWED FUNDS IN CASH OR O THERWISE. IF LOAN IS TAKEN FOR BUSINESS PURPOSE AND THE LOAN IS STILL IN THE POSSESSION OF THE ASSESSEE, THE INTEREST PAID THEREON HAS TO BE ALLO WED AS DEDUCTION. 11. THE NEXT ITEM IS REPAYMENT OF OLD UNSECURED LOA NS AMOUNTING TO RS.60 LAC. THE ASSESSEE REPAID THESE LOANS TAKEN E ARLIER FOR BUSINESS PURPOSE ON WHICH HE WAS PAYING INTEREST @ 11.33%, A S AGAINST FRESH LOANS TAKEN ON INTEREST @ 10% TO 11% PER ANNUM. IT IS, THEREFORE, SELF EVIDENT THAT THERE IS NO LOSS OF REVENUE IN THE REP AYMENT OF UNSECURED LOANS. EVEN OTHERWISE, THE REPAYMENT OF BUSINESS LO ANS TAKEN EARLIER OUT ITA NO.208/DEL/2012 13 OF THE FRESH INTEREST BEARING FUNDS BORROWED BY THE ASSESSEE, CANNOT BE A REASON FOR MAKING ANY DISALLOWANCE OF INTEREST PAID ON FRESH FUNDS TAKEN AS LOAN. 12. THE ABOVE DISCUSSION DISPOSES OF GROUND NO. 3 T AKEN BY THE REVENUE. 13. THE NEXT GROUND IS AGAINST THE DELETION OF ADDI TION OF RS.84,48,290/-. THE FACTS APROPOS THIS GROUND ARE THAT THE ASSESSEE MADE INVESTMENTS IN FOUR PROPERTIES ENLISTED ON PAGE 5 O F THE ASSESSMENT ORDER. THE AO OBSERVED THAT THESE INVESTMENTS WERE NOT SHOWN IN THE BOOKS OF ACCOUNT. ON BEING CALLED UPON TO EXPLAIN AS TO WHY THE PROVISIONS OF SECTIONS 69/69B BE NOT APPLIED, THE A SSESSEE STATED THAT THESE INVESTMENTS WERE MADE BY MEANS OF WITHDRAWALS FROM HIS CAPITAL ACCOUNT. NOT CONVINCED, THE AO MADE DISALLOWANCE O F RS.84.48 LAC U/S 69B OF THE ACT, WHICH CAME TO BE DELETED IN THE FIR ST APPEAL. THE REVENUE IS AGGRIEVED AGAINST THE DELETION OF THIS A DDITION. 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBVIOUS THAT THE ASSESSE E INSTEAD OF SEPARATELY ITA NO.208/DEL/2012 14 SHOWING INVESTMENTS IN THESE FOUR PROPERTIES HAS WI THDRAWN THE AMOUNT FROM HIS CAPITAL ACCOUNT, WHICH FACT WAS STATED BEF ORE THE AO AND HAS REMAINED UNCONTROVERTED. THERE IS HARDLY ANY DIFFE RENCE IN SHOWING INVESTMENT IN PROPERTIES EITHER BY WAY OF SEPARATE ASSET IN THE BALANCE SHEET OR BY REDUCING IT FROM THE CAPITAL ACCOUNT BY MEANS OF WITHDRAWALS. ONCE AN AMOUNT IS WITHDRAWN FROM CAPI TAL ACCOUNT, WHICH IS UTILIZED FOR MAKING AN INVESTMENT, IT CANNOT BE BROUGHT WITHIN THE PURVIEW OF SECTIONS 69/69B IN ANY MANNER. IT IS FU RTHER RELEVANT TO NOTE THAT EVEN AFTER MAKING THE ABOVE INVESTMENTS, WHICH ARE MEANT FOR NON- BUSINESS PURPOSE, THE ASSESSEE HAS STILL CREDIT BAL ANCE OF HIS CAPITAL ACCOUNT IN BOTH THE PROPRIETORSHIP CONCERNS. IT SH OWS THAT THESE INVESTMENTS WERE MADE BY THE ASSESSEE FOR NON-BUSIN ESS PURPOSE BY WITHDRAWING THE AMOUNTS FROM HIS CAPITAL ACCOUNT AN D EVEN AFTER SUCH WITHDRAWALS, THERE WAS SOME CREDIT BALANCE OF HIS C APITAL AVAILABLE WITH HIM. UNDER SUCH CIRCUMSTANCES, THERE CAN BE NO QUE STION OF MAKING ANY ADDITION U/SS 69/69B OF THE ACT. THIS GROUND IS NO T ALLOWED. ITA NO.208/DEL/2012 15 15. THE LAST GROUND IS AGAINST THE DELETION OF ADDI TION OF RS.3,98,689/- MADE BY THE AO FROM FOREIGN TRAVEL EXPENSES. THE A SSESSEE CLAIMED FOREIGN TRAVEL EXPENSES AMOUNTING TO RS.15.94 LAC. THE AO MADE AN AD HOC 25% DISALLOWANCE FROM FOREIGN TRAVEL EXPENSES BY O BSERVING THAT NO PROOF OF PURPOSE OF FOREIGN TRAVEL WAS FILED. THE LD. CIT(A) ORDERED FOR THE DELETION OF ADDITION. 16. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED FROM THE IMPUGNE D ORDER THAT THE ASSESSEE FILED ALL RELEVANT DETAILS WITH THE AO ABO UT THE FOREIGN VISITS UNDERTAKEN BY HIM, MEETING THE SUPPLIERS OF FRUITS AND ATTENDING VARIOUS CONFERENCES RELATED TO FRUITS IN VARIOUS COUNTRIES. THE ASSESSEE ALSO FURNISHED NAMES OF PARTIES OR COMPANIES WITH WHOM H E INTERACTED DURING HIS FOREIGN VISITS. THESE FINDINGS RECORDED BY THE LD. CIT(A) HAVE NOT BEEN CONTROVERTED BY THE LD. DR. UNDER SUCH CIRCUMS TANCES, WE ARE OF THE CONSIDERED OPINION THAT THERE CAN BE NO BASIS F OR MAKING ANY AD HOC DISALLOWANCE TOWARDS FOREIGN TRAVEL EXPENSES. WE, THEREFORE, APPROVE THE VIEW TAKEN BY THE LD. CIT(A) ON THIS SCORE. TH IS GROUND FAILS. ITA NO.208/DEL/2012 16 17. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 31.07.201 5. SD/- SD/- [H.S. SIDHU] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 31 ST JULY, 2015. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.