ITO, New Delhi V. M/s. A I Developers Private Ltd., New Delhi

ITA 2102/DEL/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7253 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 28-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL
• Keywords: Unexplained investment; Search and seizure; Document seized; Additional evidence; Question of law; Assessment record; Documents seized
• Section: 143(3); 133(6); 131; 69; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI A.T.VARKEY, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO.2102/DEL./2011 ASSESSMENT YEAR : 2007-08 ITO, WARD 1 (1), VS. M/S. A I DEVELOPER PRIVATE LT D., NEW DELHI. C 9 /9534, VASANT KUNJ, NEW DELHI 110 070. (PAN : AAFCA4565L) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRAMOD JAIN, CA REVENUE BY : SMT. ANIMA BARNWAL, DR O R D E R PER A.T. VARKEY, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE ARISES FROM THE OR DER OF COMMISSIONER OF INCOME-TAX (APPEALS)-IV, DELHI DATED 23.02.2011 AND RELATES TO ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE COMPANY IS A PRIVATE LIMITED COMPAN Y INCORPORATED UNDER THE PROVISIONS OF COMPANIES ACT, 1956 AND IS ENGAGED IN THE BUSINESS OF SALE/PURCHASE OF PLOTS AND DEVELOPMENT OF COMMERCIA L PROPERTIES AT GURGAON. THE ASSESSEE FILED E-RETURN DECLARING INCOME OF RS.2,06 ,146/- ON 07.09.2009 AND THE 2 ITA NO.2102/DEL/2011 SAME WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT , 1961 (HEREINAFTER THE ACT). THE ASSESSEES CASE WAS SELECTED FOR SCRUTI NY AND IN RESPONSE TO THE STATUTORY NOTICES, THE AR OF THE ASSESSEE ATTENDED THE PROCEEDINGS AND FILED THE DETAILS / DOCUMENTS. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 21.12.2009 AT A TOTAL TAXABLE INCOME AT RS.2,34,57, 779/- BY MAKING VARIOUS ADDITIONS/DISALLOWANCES. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL TO T HE FIRST APPELLATE AUTHORITY AND THE CIT (A) ALLOWED THE APPEAL OF THE ASSESSEE BY DELETING THE ADDITIONS/DISALLOWANCES. 4. THE REVENUE, BEING AGGRIEVED, IS IN APPEAL BEFOR E US BY TAKING THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING ADDITION OF RS.92,95,000/- MADE U/S 68 OF THE INCOM E TAX ACT, 1961, ON ACCOUNT OF SHARE APPLICATION MONEY. THE CASE LAW RELIED ON BY LD. CIT(A) ARE DISTINGUISHABLE FROM THE PRESENT CAS E AS THE IDENTITY OF THE CONTRIBUTOR IS NOT ESTABLISHED HERE. THE AO MADE DETAILED INVESTIGATION BY SENDING NOTICE U/S 133(6) TO THE C ONTRIBUTOR OF SHARE APPLICANT. NO CONFIRMATION WAS RECEIVED DURING THE ASSESSMENT PROCEEDINGS. 2. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN DELETING ADDITION OF RS.52,48,820/- MADE U/S 68 OF THE INCO ME TAX ACT, 1961, ON ACCOUNT OF UNSECURED LOANS. THE CASE LAW R ELIED ON BY LD.CIT(A) ARE DISTINGUISHABLE FROM THE PRESENT CASE AS THE IDENTITY OF THE CONTRIBUTOR IS NOT ESTABLISHED HERE. THE AO MADE DETAILED INVESTIGATION BY SENDING NOTICE U/S 133(6) TO THE P ROVIDERS OF UNSECURED LOAN. NO CONFIRMATION WAS RECEIVED DURING THE ASSESSMENT PROCEEDINGS. 3 ITA NO.2102/DEL/2011 3. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN DELETING ADDITION OF RS.74,84,106/- MADE U/S 69 OF THE INCO ME TAX ACT, 1961, ON ACCOUNT OF PURCHASE OF FIXED ASSETS. THE I SSUE OF VERIFYING THE BOOKS OF ACCOUNT AT THE REMAND REPORT STAGE WAS NOT CONSIDERED BY LD. CIT(A). FURTHER, WHETHER THE GROUND CITED BY THE ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCE WAS COVERED UNDER RULE 46A OF THE INCOME TAX RULES? 4. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING ADDITION OF RS.12,23,707/- MADE ON ACCOUNT OF PURC HASE OF PLOT. THE ISSUE OF VERIFYING THE BOOKS OF ACCOUNT AT THE REMA ND REPORT STAGE WAS NOT CONSIDERED BY LD. CIT(A). FURTHER, WHETHER THE GROUND CITED BY THE ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENC E WAS COVERED UNDER RULE 46A OF THE INCOME TAX RULES? 5. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIG HT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEA L AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 5. GROUND NO.1 OF REVENUES APPEAL IS AGAINST DELET ING THE ADDITION OF RS.92,95,000/- MADE U/S 68 OF THE ACT ON ACCOUNT OF SHARE APPLICATION MONEY. 6. THE AO ISSUED A QUESTIONNAIRE DATED 16.07.2009 TO THE ASSESSEE TO FILE THE DETAILS IN RESPECT OF THE SHARE APPLICATION OF RS. 92,95,000/- AND SPECIFIC DETAILS WERE SOLICITED. THE ASSESSEE IN ITS REPLY DATED 24 .08.2009 FILED DETAILS AND WITH REGARD TO SHARE CAPITAL AND SHARE PREMIUM OF THE CO MPANY, IT WAS STATED THAT THE DETAILS ARE WITH CBI. THE AO WAS OF THE OPINION TH AT THE NAME AND ADDRESS OF SHARE APPLICANTS HAD NOTHING TO DO WITH THE SEIZURE OF RECORDS BY THE CBI. HOWEVER, THE ASSESSEE FILED ANOTHER LETTER DATED 04 .09.2009 IN WHICH A LIST OF PERSONS WHO HAD INVESTED IN SHARE CAPITAL WERE FILE D. THE AO OBSERVED THAT NO DETAILS WITH REGARD TO THE IDENTITY, CREDITWORTHINE SS AND GENUINENESS OF THE TRANSACTIONS WERE FILED. THE AO REFERRED THE MATTER TO THE CBI VIDE LETTER DATED 4 ITA NO.2102/DEL/2011 05.11.2009 BUT NO REPLY WAS RECEIVED FROM THEM. AC CORDINGLY, THE AO PROCEEDED TO MAKE AN ADDITION OF RS. 92,95,000/-. 7. THE LD. CIT (A) DELETED THE ADDITION BY OBSERVIN G AS UNDER :- 5. THE MATTER WAS REMANDED TO THE LD. AO, VIDE MY LETTER NO. 252 DATED 24.11.2010. THIS REFERENCE WAS UNDER RULE 46A (1). THE AO HAS REPLIED VIDE LETTER NO.635 DATED 07.01.2011, WHEREIN HE REQUESTED FOR A MONTH'S TIME. THIS WAS GRANTED VIDE MY LETTER NO. 309 DATED 12.01.2011. EVENTUALLY, THE REMAND REPORT WAS RECEIVED VIDE LETTER NO. 1204 DATED 24/1/2011. THE LD. AO HA S MADE A REFERENCE TO RULE 46A (1) AND HAS MENTIONED THAT SI NCE THE APPLICATION OF THE ASSESSEE CONTAINED THE WORDS THA T THE DOCUMENTS HAD BEEN ACQUIRED FROM DIFFERENT SOURCES, THE ASSES SEE COULD HAVE OBTAINED THE SAME DURING THE ASSESSMENT PROCEEDINGS ITSELF. ON THE OTHER HAND, THE ASSESSEE KEPT INSISTING THAT THE DO CUMENTS WERE WITH THE CBI. IN SHORT, THE LD. AO HAS OPPOSED ANY ADDUC EMENT OF ADDITIONAL EVIDENCE, AS PRAYED BY THE ASSESSEE. 6. COPY OF THE REMAND REPORT WAS HANDED OVER TO THE ASSESSEE TO FILE A REJOINDER. THE ASSESSEE FILED A REJOINDER ON 17/2/2011, WHEREIN HE STATED THAT ALL THE DOCUMENTS WERE NOT ADDITIONA L EVIDENCES. FURTHER, IT WAS STATED THAT ALL THE DOCUMENTS WERE SEIZED BY THE CBI. THIS LED THE MANAGEMENT OF THE APPELLANT TO BE UNDE R TREMENDOUS STRESS AND ENORMOUS PRESSURE. DUE TO CBI ENQUIRIES , EVEN THE THIRD PARTIES FROM WHOM DOCUMENTS COULD BE OBTAINED NOW W ERE NOT COOPERATING AT THE TIME OF ASSESSMENT. IT WAS ADDED THAT DETAILS OF ALL THE SHAREHOLDERS ALONG WITH THEIR NAMES, ADDRESSES, PAN, CONFIRMATIONS ETC. WERE FILED AT THE TIME OF HEARIN G BEFORE THE LD. AO. IT WAS REITERATED THAT OUT OF THE TOTAL ADDITIO N, AN AMOUNT OF RS.41,00,000/- DID NOT EVEN RELATE TO THE YEAR IN I SSUE. THE CONTENTION OF THE AO THAT NO DETAILS HAD BEEN FILED WAS FALSE. THE APPELLANT VIDE ITS LETTER DATED 16/11/2009, SENT BY SPEED POST, HAD FILED THE NAMES, ADDRESSES, PAN, PAYMENT DETAILS OF ALL THE SHARE APPLICANTS AND THUS COULD NOT BE CONSTRUED AS ADDIT IONAL EVIDENCE. INSPITE OF HAVING ALL DETAILS, THE LD. AO DID NOT D O ANYTHING FURTHER. 7. I HAVE CAREFULLY PERUSED THE IMPUGNED ORDER AND THE SUBMISSIONS MADE BY THE LD. AR OF THE ASSESSEE. THE ASSESSMENT RECORD HAS ALSO BEEN VETTED. THE FIRST AND THE FORE MOST THING WHICH 5 ITA NO.2102/DEL/2011 NEEDS ADJUDICATION IS WHETHER THE ADDITIONAL EVIDEN CE (TO THE EXTENT RELEVANT) SHOULD BE ADDUCED OR NOT. THERE CAN BE NO DOUBT THAT THE POWERS OF CIT(A) TO ADDUCE ADDITIONAL EVIDENCE UNDE R RULE 46A(1) IS RATHER FETTERED. ADDITIONAL EVIDENCE CAN BE ADDU CED, ONLY IF THE ASSESSEE IS IN A POSITION TO ESTABLISH THAT IT FELL UNDER ONE OF THE EXCEPTIONAL CLAUSES AS PROVIDED FOR IN RULE 46A(1). 8. THE POWERS OF CIT(A) HAVE BEEN DEALT BY THE DEL HI TRIBUNAL IN ITO VS. M/S MITTAL INTERNATIONAL (I) PVT. LTD. I N 2008-TIOL-474- ITAT-DEL. IN A DETAILED ORDER, IT WAS HELD BY THE H ON'BLE TRIBUNAL AS UNDER: 'WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSA L OF THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEAL S) SHOWS THAT HE HAD CALLED FOR A REMAND REPORT FROM THE ASS ESSING OFFICER IN REGARD TO THE ADDITIONAL EVIDENCES, WHIC H HAD BEEN SUBMITTED BY THE ASSESSEE. A PERUSAL OF PARA 8 AT P AGE 3 OF THE LD. CIT (A)'S ORDER SHOWS THAT THE ID. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ADMITTED THE FRESH EVIDENC ES IN TERMS OF RULE 46A OF THE I.T. RULES 1962 AND THEN T HE ASSESSING OFFICER HAS BEEN PROVIDED THE COPIES OF T HE DOCUMENT FILED BY THE ASSESSEE IN SUPPORT OF ITS CL AIM OF SERVICES RENDERED BY THE COMMISSION AGENT. FOR CONV ENIENCE THE PROVISIONS OF RULE 46A (1) (2) & (3) ARE EXTRAC TED BELOW:- 46A.(1) THE APPELLANT SHALL NOT BE ENTITLED TO PR ODUCE BEFORE THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)] ANY EVIDENCE, W HETHER ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENCE PRODUC ED BY HIM DURING THE COURSE OF PROCEEDINGS BEFORE THE [AS SESSING OFFICER], EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NA MELY:- (A) WHERE THE [ASSESSING OFFICER] HAS REFUSED TO A DMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIEN T CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPO N TO PRODUCE BY THE [ASSESSING OFFICER): OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIEN T CAUSE FROM PRODUCING BEFORE THE [ASSESSING OFFICER] ANY E VIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL, OR 6 ITA NO.2102/DEL/2011 (D) WHERE THE [ASSESSING OFFICER] HAS MADE THE ORD ER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUN ITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB -RULE (1) UNLESS THE [DEPUTY COMMISSIONER (APPEALS)] [OR AS T HE CASE MAY BE, THE COMMISSIONER (APPEALS)] RECORDS IN WRIT ING THE REASONS FOR ITS ADMISSION . (3) THE [DEPUTY COMMISSIONER(APPEALS)] [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)] SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-RULE (1) UN LESS THE [ASSESSING OFFICER] HAS BEEN ALLOWED A REASONABLE OPPORTUNITY- (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROS S- EXAMINE THE WITNESS PRODUCED BY THE APPELLANT, OR (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WIT NESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT. 5. READING OF THE PROVISIONS OF RULE 46A OF THE IT RULES 1962 SHOW THAT THE RULES SPECIFICALLY BARS AN ASSES SEE FROM PRODUCING ANY ORAL OR DOCUMENTARY EVIDENCES OTHER T HAN THE EVIDENCES PRODUCED BY HIM DURING THE COURSE OF PROC EEDINGS BEFORE THE ASSESSING OFFICER EXCEPT UNDER THE CONDI TIONS PROVIDED IN CLAUSE (A), (B), (C) & (D) OF SUB-RULE (1) OF RULE 46A. SUB-RULE (2) OF RULE 46A MAKES IT COMPULSORY O N THE APPELLATE AUTHORITY WHO IS ADMITTING SUCH ADDITIONA L EVIDENCES TO RECORD HIS REASONS IN WRITING FOR SUCH ADMISSION. THE NATURE OF ADDITIONAL EVIDENCE INCLUDING RELEVAN CY THEREOF ALONE CANNOT BE GROUND ENOUGH TO ADMIT SUCH ADDITIO NAL EVIDENCE. IT IS THE EXCEPTIONAL CIRCUMSTANCES AS EN VISAGED BY SUB-RULE (1) OF RULE 46A THAT IS TO BE THE FOUNDATI ON FOR THE ADMISSION OF THE ADDITIONAL EVIDENCE ALONG WITH THE RELEVANCY THEREOF OF THE ADDITIONAL EVIDENCE. SUB-RULE (3) OF RULE 46A MAKES IT COMPULSORY FOR THE APPELLATE AUTHORITY WHO HAS ADMITTED THE ADDITIONAL EVIDENCES UNDER SUB-RULE (1 ) AFTER RECORDINGS HIS REASONS IN WRITING AS PER SUB-RULE ( 2) TO GRANT THE SAME TO THE ASSESSING OFFICER TO EXAMINE THE EV IDENCES OR DOCUMENTS OR TO CROSS-EXAMINE THE WITNESS PRODUCED BY THE APPELLANT OR TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PROD UCED BY THE APPELLANT. 7 ITA NO.2102/DEL/2011 9. MORE RECENTLY IN THE CASE OF M/S MOSER BAER IND IA LTD. & ORS. VS. ADDL. CIT (DEL) (2009) 17 OTR (DEL) 98, AT PAGES 123 AND 124, THE DELHI HIGH COURT HAS HELD AS UNDER: '15. A CLOSE READING OF THE OBSERVATION WOULD SHOW THAT THE DICTUM OF' THE HOUSE OF LORDS IF APPLIED WOULD COVE R THOSE CASES WHERE AN AGGRIEVED PARTY HAS AN UNBRIDLED RIG HT OF APPEAL ON FACTS AND LAW, AND A COMPLETE FREEDOM TO FILE EVIDENCE WHICH WAS NOT FILED BEFORE THE ORIGINAL AU THORITY. IN OTHER WORDS THE APPELLATE AUTHORITY IS REQUIRED TO EXAMINE THE CIRCUMSTANCES 'DE NOVO ON WHATEVER EVIDENCE THAT MA Y BE PUT BEFORE THE APPELLATE COURT'. IN THE INSTANT CASE IT CANNOT BE DISPUTED THAT UNDER THE PROVISIONS OF SUB-SO (4) OF S. 92CA THE AO IS REQUIRED TO COMPUTE THE TOTAL INCOME OF T HE ASSESSEE IN CONFORMITY WITH THE ALP DETERMINED BY T HE TPO. AGAINST THE ORDER OF THE AO, AN APPEAL IS MAINTAINA BLE UNDER S. 246A OF THE ACT. WHILE THE CIT(A) UNDER SUB-SO ( 4) OF S. 250 IN DISPOSING OF ANY APPEAL BEFORE IT IS EMPOWER ED TO MAKE FURTHER INQUIRY EITHER HIMSELF OR BY DIRECTING THE AO TO DO SO AND RECEIVE THE RESULT OF THE SAME, THE ASSES SEE CANNOT FILE ANY FRESH EVIDENCE EXCEPT IN ACCORDANCE WITH T HE PROVISIONS OF R. 46A. THE R. 46A INTER ALIA PERMITS AN ASSESSEE TO ADDUCE ADDITIONAL EVIDENCE ONLY IF HE IS ABLE TO ESTABLISH THAT HE FALLS UNDER ONE OF THE FOLLOWING SITUATIONS ENVISAGED UNDER THE SAID RULE: (I) WHERE AN AO HAS EITHER REFUSED TO ADMIT EVIDEN CE WHICH HE OUGHT TO HAVE ADMITTED; OR (II) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIE NT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPO N TO PRODUCE BY THE AO: OR (III) WHERE THE APPELLANT WAS PREVENTED BY SUFFICI ENT CAUSE FROM PRODUCING BEFORE THE AO ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL. (IV) WHERE THE AO HAS MADE THE ORDER APPEALED AGAI NST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO ADDUCE EVI DENCE RELEVANT TO ANY GROUND OF APPEAL. 8 ITA NO.2102/DEL/2011 16. IT IS EVIDENT UPON A BARE READING OF R. 46A THA T THE ASSESSEE DOES NOT HAVE A RIGHT TO FILE ADDITIONAL E VIDENCE UNLESS HIS CASE FALLS WITHIN ONE OF THE SITUATIONS PRESCRIBED UNDER THE R. 46A. THE DISCRETION TO PERMIT THE ASSE SSEE TO ADDUCE ADDITIONAL EVIDENCE LIES WITH THE CIT(A). TH EREFORE, IT CANNOT BE SAID THAT THE CIT(A) IS DUTY BOUND TO ADM IT ANY EVIDENCE THAT THE ASSESSEE WISHES TO ADDUCE, BASED ON WHICH HE WOULD CONDUCT A DE NOVO EXAMINATION OF THE CASE BEFORE HIM.' (EMPHASIS, IN BOLD, SUPPLIED) 10 ON THE TOUCHSTONE OF THE LAW LAID DOWN BY THE D ELHI HIGH COURT AND THE DELHI TRIBUNAL, THE PRAYER OF THE ASS ESSEE TO ADDUCE FRESH EVIDENCE NEEDS TO BE DISSECTED. THERE IS NO DOUBT THAT AS AND WHEN A CBI ENQUIRY IS INITIATED, THE MANAGEMENT USU ALLY COMES UNDER TREMENDOUS PRESSURE. IT IS ALSO TRUE THAT EVE N CLOSE BUSINESS RELATIONS DO NOT COOPERATE AT THIS STAGE. PERUSAL O F THE ASSESSMENT RECORD SUGGESTS THAT IN ORDER TO OBTAIN THE PHOTOCO PIES OF THE SEIZED DOCUMENTS, THE ASSESSEE THROUGH ITS ADVOCATE, HAS F ILED AN APPLICATION DATED 23/3/2009 BEFORE THE SPECIAL COUR T OF THE CBI. THEREIN, IT WAS SUBMITTED AS UNDER: 'IN VIEW OF THE FACTS AND CIRCUMSTANCES MENTIONED H EREIN ABOVE IT IS RESPECTFULLY PRAYED THAT THIS HON'BLE C OURT MAY KINDLY DIRECT THE OFFICIALS OF CBI TO PROVIDE A PHO TOCOPY OF ALL DOCUMENTS, SO SEIZED/IMPOUNDED BY THE OFFICIALS OF CBI ALONGWITH THE ORIGINAL TITLE DEED OF PROPERTY, CONS ISTING OF PLOT NO. 6 & 7, OLD JUDICIAL COMPLEX, JHARSA ROAD, GURGAON, (HR) , FOR ITS DEPOSITS WITH BANK OF BARODA, S.M.E. BRANCH, GURGAON (HR).' 11. THE ABOVE WERE EXTRACTS OF THE APPLICATION FIL ED BEFORE THE SPECIAL COURT OF CBI. I AM UNAWARE OF THE FATE OF T HE APPLICATION BUT THE SAME CLEARLY PROVES THAT IT WANTED TO OBTAIN CO PIES OF SEIZED DOCUMENTS FOR PURPOSES LISTED THEREIN. THE CBI ALSO DID NOT GIVE PHOTOCOPIES OF SEIZED DOCUMENT INSPITE OF LETTER FR OM THE AO. AS SUCH, DUE TO THE SPECIAL SITUATION, I AM CONVINCED THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE NOT TO HAVE ADDUC ED THE DOCUMENTS AT THE TIME OF ASSESSMENT PROCEEDINGS. IN OTHER WORDS, THE ADDITIONAL DOCUMENTS AS REQUESTED FOR ARE ALLOW ED TO BE BROUGHT ON RECORD FOR THE PURPOSE OF DISPOSAL OF THE APPEAL . 9 ITA NO.2102/DEL/2011 12. FROM THE DETAILS FILED BY THE ASSESSEE, IT IS OBSERVED THAT THE ASSESSEE HAD FILED DOCUMENTS RELATING TO SHARE APPL ICATION OF SMT. INDU KUMAR AND SHRI AVINAV KUMAR, BOTH OF WHOM ARE PROMOTERS OF THE COMPANY. THEY HAVE FILED CONFIRMATION OF INVEST MENT IN EQUITY SHARES, COPY OF ACKNOWLEDGEMENT OF ITR, COPY OF BAN K ACCOUNT STATEMENT, COPY OF PAN CARD, COPY OF PASSPORT AND T HE ELECTION CARD. ALSO FILED ARE SIMILAR DOCUMENTS RELATING TO SH. PR AVEEN MEHTA, SMT. SAVITRI DEVI, SH. RADHEY SHYAM MEHTO. MIS GOLD STON E FINANCIAL SERVICES PVT. LTD. M/S MARUDHAR BUILDING PVT. LTD., M/S UPPERCON MARKETING PVT. LTD., M/S SUPER SADIQ ENTERPRISES PV T. LTD., M/S MEGATRONIX SYSTEM PVT. LTD., M/S U.P. ELECTRICALSL. TD., M/S SHARDA INDIA PVT. LTD AND M/S UDHAV FASHION APPARELS PVT. LTD. IF THE PAN FOR SOME REASON HAS NOT BEEN GIVEN, THE ITR OR ASSESSMENTS/INTIMATION ISSUED BY THE DEPARTMENT HAS BEEN SUBMITTED. ONLY IN THE CASE OF SMT. SAVITRI DEVI, NO PAN CARD OR INCOME-TAX DETAILS HAVE BEEN GIVEN, BUT COPY OF ELE CTION CARD AND COPY OF HER BANK STATEMENT HAS BEEN PROVIDED BY THE ASSESSEE. THE SHARE APPLICATION WAS GIVEN BY CHEQUE AND THROUGH B ANKING CHANNELS. IN THE CASE OF SMT. SAVITRI DEVI, HER HU SBAND IS AN AGRICULTURIST AS EVIDENT FROM THE CONFIRMATION FILE D BY HER AND EVEN SHE HAS MADE THE PAYMENT FOR 10,000 SHARES BY CHEQU E. 13. BE THAT AS IT MAY, IT MAY BE GAINFUL TO REFER TO THE DECISION OF THE SUPREME COURT IN M/S LOVELY EXPORTS (P) LTD. (2 008) 216 CTR (SC) 195: (2008) 6 DTR (SC) 308 WHEREIN IT HAS BEEN HELD AS UNDER: DELAY CONDONED. 2. CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDISCLOSED INCOME UNDER S. 68 OF IT ACT, 1961? WE FIND NO MERIT IN THIS SPECIAL LEAVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE A SSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAME S ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS FREE TO PRO CEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE W ITH LAW. HENCE, WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGM ENT. 3 SUBJECT TO THE ABOVE, SPECIAL LEAVE PETITION IS DISMISSED. ' 14. FROM THE ABOVE DECISION, IT WAS BEING INTERPRE TED THAT THE ASSESSEE HAS TO ONLY PROVE THE IDENTITY OF THE SHAR EHOLDERS HOWEVER, THE DECISION IN M/S LOVELY EXPORTS (SUPRA) HAS NOW BEEN INTERPRETED 10 ITA NO.2102/DEL/2011 BY THE JURISDICTIONAL HIGH COURT IN ITA NO. 2093 OF 2010 IN THE CASE OF OASIS HOSPITALITIES (P) LTD. AT PARAS 11 TO 14, THE FOLLOWING HAS BEEN THE POSITION TAKEN BY THE JURISDICTIONAL HIGH COURT :- '11. IT IS CLEAR FROM THE ABOVE THAT THE INITIAL B URDEN IS UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF TH E SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE. IN ORDE R TO DISCHARGE THIS BURDEN, THE ASSESSEE IS REQUIRED TO PROVE : (A) IDENTITY OF SHAREHOLDER; (B) GENUINENESS OF TRANSACTION; AND (C) CREDIT WORTHINESS OF SHAREHOLDERS. 12. IN CASE THE INVESTOR/SHAREHOLDER IS AN INDIVIDU AL, SOME DOCUMENTS WILL HAVE TO BE FILED OR THE SAID SHAREHO LDER WILL HAVE TO BE PRODUCED BEFORE THE AO TO PROVE HIS IDEN TITY. IF THE CREDITOR/SUBSCRIBER IS A COMPANY, THEN THE DETA ILS IN THE FIRM OF REGISTERED ADDRESS OR PAN IDENTITY, ETC. CA N BE FURNISHED. 13. GENUINENESS OF THE TRANSACTION IS TO BE DEMONST RATED BY SHOWING THAT THE ASSESSEE HAD, IN FACT, RECEIVED MO NEY FROM THE SAID SHAREHOLDER AND IT CAME FROM THE COFFERS FROM THAT VERY SHAREHOLDER. THE DIVISION BENCH HELD THAT WHEN THE MONEY IS RECE IVED BY CHEQUE AND IS TRANSMITTED THROUGH BANKING OR OTHER INDISPU TABLE CHANNELS, GENUINENESS OF TRANSACTION WOULD BE PROVED. OTHER D OCUMENTS SHOWING THE GENUINENESS OF TRANSACTION COULD BE THE COPIES OF THE SHAREHOLDERS REGISTER, SHARE APPLICATION FORMS, SHA RE TRANSFER REGISTER, ETC. 14. AS FAR AS CREDITWORTHINESS OR FINANCIAL STRENGT H OF THE CREDIT/SUBSCRIBER IS CONCERNED, THAT CAN BE PROVED BY PRODUCING THE BANK STATEMENT OF THE CREDITORS/SUBSCRIBERS SHOWING THAT IT HAD SUFFICIENT BALANCE IN ITS ACCOUNTS TO ENABLE IT TO SUBSCRIBE TO THE SHARE CAPITAL. THIS JUDGEMENT FURTHER HOLDS THAT ONCE THE SE DOCUMENTS ARE PRODUCED, THE ASSESSEE WOULD HAVE SATISFACTORILY DI SCHARGE THE ONUS CAST UPON HIM. THEREAFTER, IT IS FOR THE AO TO SCRU TINIZE THE SAME AND IN CASE HE NURTURES ANY DOUBT ABOUT THE VERACITY OF THESE DOCUMENTS TO PROBE THE MATTER FURTHER. HOWEVER, TO DISCREDIT THE DOCUMENTS PRODUCED BY THE ASSESSEE ON THE AFORESAID ASPECTS, THERE HAS TO BE SOME COGENT REASONS AND MATERIALS FOR THE AO AND HE CANNOT GO INTO THE REALM OF SUSPICION. 11 ITA NO.2102/DEL/2011 15. BASED ON THE DECISION OF THE DELHI HIGH COURT I N OASIS HOSPITALITIES (SUPRA), WE HAVE TO DISSECT WHETHER T HE ASSESSEE HAS PROVED THE IDENTITY OF SHAREHOLDERS, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE SHAREHOLDERS. IN THE CASE O F THE INDIVIDUALS, BUT FOR ONE CASE, THE ASSESSEE HAS PRODUCED THE PAN CARD OF THE PERSON. COPY OF THE ELECTION CARD, BANK STATEMENT A ND CONFIRMATIONS HAVE ALSO BEEN FILED. IN THE CASE OF THE INDIVIDUAL WHO HAS NOT FILED THE ITR AND WHOSE PAN CARD HAS NOT BEEN SUBMITTED, A CONFIRMATION IS ALREADY ON RECORD THAT SHE WAS A WIFE OF AGRICUL TURIST HOLDING HUGE TRACTS OF AGRICULTURAL LAND. IN THE CASE OF THE COM PANY, COPY OF BANK STATEMENT, COPY OF ANNUAL RETURN FILED WITH THE REG ISTRAR OF COMPANIES, CONFIRMATIONS ETC. HAVE BEEN FILED. IN S OME CASES, EVEN CERTIFICATES OF INCORPORATIONS HAVE ALSO BEEN SUBMI TTED. EACH OF THE PAYMENTS, BOTH FOR INDIVIDUALS AND CORPORATE SHAREH OLDERS HAVE BEEN MADE BY CHEQUE WHICH HAS BEEN CONSIDERED TO BE AN I NDISPUTABLE CHANNEL BY THE DELHI HIGH COURT. AS, BANK STATEMENT S HAVE BEEN SUBMITTED, THE CREDITWORTHINESS ALSO STOOD PROVED. IN SUCH CIRCUMSTANCE, IT IS FOR THE AO TO SCRUTINIZE THE SA ME AND IN CASE HE NURTURES ANY DOUBT ABOUT THE VERACITY OF THE DOCUME NTS, THE DISCRETION IS UPON HIM TO PROBE THE MATTER FURTHER, WHICH HAS NOT BEEN DONE IN THE CASE IN HAND. HE HAS DISCREDITED T HE DOCUMENTS, WITHOUT GIVING ANY COGENT REASONS AND MATERIAL. IN SUCH CIRCUMSTANCE, I AM OF THE BELIEF THAT THE ASSESSEE HAS DISCHARGED THE ONUS CAST UPON HIM. 16. WHILE ON THE ISSUE, I MAY MENTION THAT IT CANNO T BE ADJUDICATED THAT WHETHER THE ASSESSEE HAD RS.41,00, 000/- AS SHARE APPLICATION MONEY COMING FORTH FROM THE PREVIOUS YE AR, AS HAS BEEN ARTICULATED DURING THE PROCEEDINGS BEFORE ME. HOWEV ER, THE FACTS ARE VERY CLEAR AND THE ASSESSEE DESERVES TO SUCCEED. GR OUND OF APPEAL NO.2 GOES IN FAVOUR OF THE ASSESSEE. 8. LD. DR RELIED ON THE ORDER OF THE AO AND SUBMITT ED THAT THE CASE LAW RELIED ON BY LD. CIT(A) ARE DISTINGUISHABLE FROM THE PRESE NT CASE AS THE IDENTITY OF THE CONTRIBUTOR IS NOT ESTABLISHED HERE AND THE AO MADE DETAILED INVESTIGATION BY SENDING NOTICE U/S 133(6) TO THE CONTRIBUTOR OF SHA RE. HE SUBMITTED THAT NO CONFIRMATION WAS RECEIVED DURING THE ASSESSMENT PRO CEEDINGS. ACCORDINGLY, HE 12 ITA NO.2102/DEL/2011 PLEADED THAT THE ORDER OF THE CIT (A) BE SET ASIDE AND THAT OF THE AO BE UPHELD ON THIS ISSUE. 9. LD. COUNSEL FOR THE ASSESSEE, REITERATING THE SU BMISSIONS MADE BEFORE THE LD. CIT (A), SUBMITTED THAT AS REGARDS SHARE APPLIC ATION MONEY, THE AO FAILED TO OBSERVE THAT OUT OF THE AMOUNT OF RS.92,95,000/-, T HE AMOUNT OF RS.41,00,000/- WAS NOT EVEN RELATED TO THE YEAR UNDER CONSIDERATIO N AND WAS RECEIVED IN AY 2006-07. HE SUBMITTED THAT THE ASSESSEE VIDE ITS L ETTER DATED 16.11.2009 HAD FILED THE NAMES, ADDRESSES, PAN, PAYMENT DETAILS ETC. OF ALL THE SHARE APPLICANTS BEFORE THE AO. HE FURTHER SUBMITTED THAT DESPITE HAVING FU LL PARTICULARS OF SHARE APPLICANTS, THE AO DID NOT ENQUIRE ANY FURTHER ABOU T THE VERACITY OF THE DETAILS OF THE SHARE-HOLDERS DURING ASSESSMENT PROCEEDINGS AND THE FACT WAS THAT ALL DOCUMENTS WERE SEIZED BY THE CBI; AND FURTHER DOCU MENTS WERE SUBMITTED UNDER RULE 46A(1) WHICH CONTAINED COPY OF FORM NO.2 FILE D WITH ROC, COPY OF SHARE APPLICATION MONEY, COPY OF PAN OF APPLICANTS, COPY OF MASTER DATA FROM ROC, COPY OF ELECTION CARD, CONFIRMATION OF SHARE APPLIC ANTS, COPY OF FINANCIAL STATEMENTS .OF SHARE APPLICANTS, COPY OF BANK STATE MENTS OF SHARE APPLICANTS AND COPIES OF ITR ACKNOWLEDGEMENT OF THE SHARE APPLICAN TS. LD. AR FURTHER SUBMITTED THAT THE ASSESSEE WAS AN ARTIFICIAL JURIDICAL PERSO N AND IT COULD NOT HAVE ITS OWN UNACCOUNTED CASH. HE SUBMITTED THAT ALL THE PAYMENT S FOR SHARE APPLICATIONS WERE RECEIVED BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUES T HROUGH BANKING CHANNELS WHICH HAS NOT BEEN REBUTTED BY THE AO. THE LD. AR O F THE ASSESSEE RELIED ON THE DECISIONS, WHICH WERE RELIED UPON BEFORE THE LD. CI T (A), I.E. CIT VS. DIVINE 13 ITA NO.2102/DEL/2011 LEASING & FINANCE LTD. [2008] -TIOL-118-SC-IT, CIT VS LOVELY EXPORT (P) LTD. 216 CTR )SC) 195, CIT VS. DIVINE LEASING & FINANCE LTD. (2007) 207 CTR 38 (DEL.), CIT VS. STELLER INVESTMENT LTD. [2001] 251 ITR 263 (SC), CIT VS. M/S ELECTRO POLYCHEM LTD. [2008] 217 CTR (MADRAS) 371 A ND CIT VS. ORISSA CORPORATION PVT. LTD. [1986] 159 ITR 78 (SC). AMONG OTHERS. THEREFORE, LD. COUNSEL FOR THE ASSESSEE WANTS US NOT TO INTERFERE WITH THE ORDER OF LD. CIT (A). 10. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MA TERIAL ON RECORD. WE FIND THAT LD. CIT(A) HAS ELABORATELY DISCUSSED THE ISSUE IN DISPUTE BY RELYING UPON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F LOVELY EXPORTS (SUPRA) AND OF THE HONBLE JURISDICTIONAL HIGH COURT IN IT A NO. 2093 OF 2010 IN THE CASE OF OASIS HOSPITALITIES (P) LTD., AS SEEN ABOV E. WE FURTHER NOTE THAT ON THE ANVIL OF THE AFORESAID HONBLE DELHI HIGH COURT DEC ISION IN THE CASE OF OASIS HOSPITALITIES, THE ISSUE IN DISPUTE HAS BEEN ADJUDI CATED BY THE LD. CIT (A) TO ARRIVE AT THE IMPUGNED DECISION. IN THE PRESENT CASE, THE ASSESSEE HAS PRODUCED THE PAN CARD OF THE SHARE-HOLDERS, COPY OF THE ELECTION CAR D, BANK STATEMENT AND CONFIRMATIONS HAVE ALSO BEEN FILED. IN THE CASE OF THE INDIVIDUAL WHO HAS NOT FILED THE ITR AND WHOSE PAN CARD HAS NOT BEEN SUBMITTED, A CONFIRMATION IS ALREADY ON RECORD THAT SHE IS THE WIFE OF AN AGRICULTURIST HOLDING HUGE TRACTS OF AGRICULTURAL LAND. IN THE CASE OF THE COMPANIES, WHO ARE THE SHA RE-HOLDERS, COPY OF ITS BANK STATEMENT, COPY OF ANNUAL RETURN FILED WITH THE REG ISTRAR OF COMPANIES, CONFIRMATIONS ETC. HAVE BEEN FILED. IN SOME CASES, EVEN CERTIFICATES OF INCORPORATIONS HAVE ALSO BEEN SUBMITTED. ALL THE PA YMENTS, BOTH FOR INDIVIDUALS 14 ITA NO.2102/DEL/2011 AND CORPORATE SHAREHOLDERS, HAVE BEEN MADE BY CHEQU E. BANK STATEMENTS REVEAL THEIR CREDITWORTHINESS. THE ASSESSEE COULD NOT PROD UCE ALL THE DOCUMENTS BEFORE THE AO DURING ASSESSMENT BECAUSE OF THE FACT THAT A LL DOCUMENTS WERE IN THE CUSTODY OF CBI AND ASSESSEE HAD FILED APPLICATION B EFORE THE SPECIAL COURT (CBI) FOR THE COPIES OF DOCUMENTS BUT COULD NOT GET ANY F AVORABLE ORDER. THE AO HIMSELF HAD WRITTEN TO CBI AUTHORITIES FOR COPIES O F DOCUMENTS, WHICH DID NOT INVOKE ANY RESPONSE FROM CBI. THE ASSESSEE VIDE LET TER DATED 16.11.2009 HAD FURNISHED THE NAME, PAN, ADDRESSES, PAYMENT DETAILS TO THE AO. WHEN THERE WAS CBI ENQUIRY IN ASSESSEES CASE, THE NOTICE OF THE A O DID NOT INVOKE ANY RESPONSE FROM SHARE-APPLICANTS IS PLAUSIBLE, HOWEVER THAT CA NNOT BE THE SOLE GROUND TO JUSTIFY THE ADDITION UNLESS THE AO IS ABLE TO SHOW THAT DETAILS FURNISHED BY THE ASSESSEE IN RESPECT TO THE IDENTITY OF THE SHARE-HO LDERS ARE BOGUS, THEIR PAN DETAILS ARE FALSE, ADDRESSES ARE WRONG AND PAYMENT DETAILS ARE FALSE. THE AO OUGHT TO HAVE VERIFIED THE FACTS DURING ASSESSMENT PROCEEDINGS OR EVEN HE COULD HAVE DONE WHEN THE LD. CIT (A) HAS FORWARDED ALL TH E DETAILS FILED BEFORE HIM UNDER RULE 46A, WHICH HE DID NOT AFTER SEEKING ONE MONTHS TIME AND TOOK THREE MONTHS TO SENT THE REMAND REPORT WHICH WAS GRANTED BY CIT (A). SO, WE FIND THAT THERE WAS SUFFICIENT CAUSE FOR NON-FILING OF EVIDEN CE BEFORE THE AO. THE AO OUGHT TO HAVE SCRUTINIZED THE EVIDENCE AND IN CASE, HE NURTURES ANY DOUBT ABOUT THE VERACITY OF THE DOCUMENTS, THE DISCRETION IS UP ON HIM TO PROBE THE MATTER FURTHER, WHICH HAS NOT BEEN DONE IN THE CASE IN HAN D. HE COULD NOT HAVE DISCREDITED THE DOCUMENTS, WITHOUT GIVING ANY COGEN T REASONS AND MATERIAL. 15 ITA NO.2102/DEL/2011 THEREFORE, IN VIEW OF THE MATERIAL FILED BY THE ASS ESSEE, WE FIND THAT THAT THE ASSESSEE HAS DISCHARGED THE ONUS CAST UPON HIM. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING TH E PRECEDENT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A), HENCE, WE UPHOLD THE SAME AND DECIDE THE GROUND NO.1 AGAINST THE REVENUE. 11. GROUND NO.2 IS AGAINST THE DELETION OF ADDITION OF RS.52,48,820/- MADE U/S 68 OF THE ACT ON ACCOUNT OF UNSECURED LOANS . 12. THE AO, ON THE BASIS OF THE REASONING MADE U/S 68 OF THE ACT FOR MAKING THE ADDITION ON ACCOUNT OF SHARE CAPITAL, MADE THE ADDITION ON ACCOUNT OF UNSECURED LOAN OF THE ASSESSEE U/S 68 OF THE ACT. 13. THE LD. CIT (A) DELETED THE ADDITION AND THE RE LEVANT PORTION OF THE LD. CIT (A)S ORDER IS REPRODUCED AS UNDER :- 17. GROUND OF APPEAL NO. 3 PERTAINS TO ADDITION U /S. 68 OF RS. 52,48,820/- ON ACCOUNT UNSECURED LOANS. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS BEFORE HIM, IT WAS OBSERVED BY THE LD. AO THAT THERE WAS AN INCREASE OF RS. 52,48,8207- ON AC COUNT OF UNSECURED LOAN THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SAME. VIDE LETTER DATED 4/9/2009. THE ASSESSEE GAVE A LIST OF PERSONS FROM WHOM UNSECURED LOAN HAD BEEN OBTAINED. VIDE LETTER DATED 18/9/2009. THE ASSESSEE FURTHER FILED A LETTER CONTAINING THE NAME AND ADDRESSES OF PERSONS WHO HAD GIVEN UNSECURED LOAN. IT HAD FILED CONFIRMATION LETTER FROM THESE PARTIES. NO PAN OR ASSESSMENT PAR TICULARS WERE GIVEN WITH REGARD TO THE PROOF OF THEIR EXISTENCE. IN RESPONSE, THE ASSESSEE STATED THAT THE AO'S CONTENTION THAT THE D ETAILS WERE NOT SUBMITTED WAS TOTALLY FALSE. THE APPELLANT, VIDE LE TTER DATED 16/9/2009 (DELIVERED BY HAND) AND LETTER DATED 16/1 1/2009 (SENT BY POST) HAD FILED THE NAMES, ADDRESSES, DETAILS ETC. OF ALL LOAN CREDITORS AND EVEN FILED THEIR CONFIRMATIONS AS ON DATE. RS. 41 LACS WAS RECEIVED FROM THE DIRECTORS AND THEIR RELATIVES AND EVEN THEIR SOURCE WAS DULY EXPLAINED. COPY OF PAN, COPY OF MASTER DAT A OBTAINED FROM REGISTRAR OF COMPANIES CONTAINING CIN, COPY OF FINANCIAL 16 ITA NO.2102/DEL/2011 STATEMENTS OF SHARE APPLICANTS AND COPY OF BANK STA TEMENTS WERE ALSO FILED. IT WAS ARGUED THAT EACH OF THE PAYMENTS WERE RECEIVED BY A/C PAYEE CHEQUE THROUGH PROPER BANKING CHANNEL. 18. THERE IS NO DOUBT THAT THE ASSESSEE HAS GIVEN DETAILS WITH REGARD TO LOANS OF M/S UPPERCON MARKETING PVT. LTD. IN TERMS OF CONFIRMATION, TDS CERTIFICATES, BANK STATEMENT AND ASSESSMENT PARTICULARS. IN THE CASE OF LOANS FROM SMUG PHARMA PVT. LTD., DEEAS COMPUTRADE PVT. LTD., MARUDHAR BUILDERS PVT. LTD., M/S INDERJEET TRADE LINKS PVT. LTD., SIMILAR DETAILS HAVE BEEN FI LED. AS AND WHERE INTIMATIONS REGARDING 143(1) HAVE NOT BEEN ISSUED O R ARE NOT AVAILABLE, THE PERMANENT ACCOUNT NUMBER HAS BEEN SU BMITTED. IN EACH OF THE CASES, THE PAYMENT WAS MADE VIDE CHEQUE . 19. WE HAVE ALREADY DISCUSSED THE DECISION OF THE DELHI HIGH COURT IN OASIS HOSPITALITIES (SUPRA) ABOVE. AT THIS STAGE, IT WOULD BE GAINFUL TO REFER TO THE SUPREME COURT DECISION IN C IT VS. ORISSA CORPORATION (P) LTD. [1986] 159 ITR 78 (SC) WHICH D EALT WITH UNSECURED CREDITORS. IN THAT CASE, THE ASSESSEE, AT THE RELEVANT TIME, WAS A PRIVATE LIMITED COMPANY AND MAINTAINED ACCOUN TS ACCORDING TO THE CALENDAR YEAR. FOR THE ACCOUNTING YEAR ENDING O N 31ST DEC., 1961, CORRESPONDING TO THE ASSTT. YEAR 1962-63, THE ITO DID NOT ACCEPT THE ASSESSEE'S ACCOUNTS SHOWING CASH CREDITS OF RS.1,50,000. THREE AMOUNTS WERE SHOWN TO HAVE BEEN RECEIVED BY W AY OF LOANS FROM THREE INDIVIDUAL CREDITORS OF CALCUTTA UNDER H UNDIS. THE ASSESSEE PRODUCED BEFORE THE ITO, THE LETTERS OF CO NFIRMATION, THE DISCHARGED HUNDIS AND PARTICULARS OF THE DIFFERENT CREDITORS WHOSE GENERAL INDEX NUMBERS WERE WITH THE IT DEPARTMENT. ATTEMPTS HAD BEEN MADE TO BRING THOSE CREDITORS BEFORE THE ITO B Y ISSUE OF NOTICES UNDER S. 131 OF THE ACT, BUT THE SAID NOTICES WERE RETURNED WITH THE ENDORSEMENT LEFT. THE ITO, THEREFORE, TREATED TH E ENTIRE AMOUNT OF RS.1,50,000 AS UNPROVED CASH CREDIT AND ADDED THE S AME TO THE INCOME OF THE ASSESSEE. IT WAS HELD AT PARA NO.13 O F THE ORDER AS UNDER :- '13 IN THIS CASE, THE ASSESSEE HAD GIVEN THE NAMES AND ADDRESSES OF THE ALLEGED CREDITORS. IT WAS IN THE K NOWLEDGE OF THE REVENUE THAT THE SAID CREDITORS WERE INCOME-TAX ASSESSEES. THEIR INDEX NUMBERS WERE IN THE FILE OF THE REVENUE . THE REVENUE, APART FROM ISSUING NOTICES UNDER S. 131 AT THE INSTANCE OF THE ASSESSEE, DID NOT PURSUE THE MATTER FURTHER. THE REVENUE DID NOT EXAMINE THE SOURCE OF INCOME OF THE SAID ALLEGED CREDITORS TO FIND OUT WHETHER THEY WER E 17 ITA NO.2102/DEL/2011 CREDITWORTHY OR WERE SUCH WHO COULD ADVANCE THE ALL EGED LOANS. THERE WAS NO EFFORT MADE TO PURSUE THE SO-CA LLED ALLEGED CREDITORS. IN THOSE CIRCUMSTANCES, THE ASSE SSEE COULD NOT DO ANYTHING FURTHER. IN THE PREMISES. IF THE TR IBUNAL CAME TO THE CONCLUSION THAT THE ASSESSEE HAS DISCHARGED THE BURDEN THAT LAY ON HIM, THEN IT COULD NOT BE SAID THAT SUC H A CONCLUSION WAS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. IF THE CONCLUSION IS BASED ON SOME EVIDEN CE ON WHICH A CONCLUSION COULD BE ARRIVED AT, NO QUESTION OF LAW AS SUCH ARISES.' 20. ON THE TOUCHSTONE OF THE DECISION OF THE SUPREM E COURT, IT MAY BE WORTHWHILE TO DISSECT THE FACTS OF THE CASE. VIDE LETTER DATED 18/9/2009, THE ASSESSEE HAD INFORMED REGARDING THE NAME AND ADDRESSES OF PERSONS WHO HAD GIVEN UNSECURED LOANS. LETTERS OF CONFIRMATIONS HAD ALSO BEEN FILED. ASSUMING FOR A MOMENT INCOME TAX PARTICULARS WERE NOT FILED (WHICH IS DISPUTED B Y THE ASSESSEE), THE LD. AO HAD ENOUGH POWERS TO CALL FOR THE INFORMATIO N, TO SATISFY HIMSELF. NOTHING HAS BEEN DONE BY THE AO. THE CASE OF THE ASSESSEE BECOMES EVEN STRONGER ON THE ADDUCING OF ADDITIONAL EVIDENCE WHICH HAS BEEN SUBMITTED DURING THE APPELLATE STAGE. THE BASIC DETAILS WERE WITH AO TO MAKE ENQUIRIES, WHICH HE HAS NOT DO NE. I FIND NO REASON HOW THE ADDITION CAN BE SUSTAINED. THUS, I A M DELETING THE ADDITION MADE TO THE EXTENT OF RS.52,48,820/-. THE ASSESSEE SUCCEEDS IN GROUND OF APPEAL NO.3. 14. LD. DR RELIED ON THE ORDER OF THE AO AND SUBMIT TED THAT THE CASE LAW RELIED ON BY LD. CIT(A) ARE DISTINGUISHABLE FROM THE PRESE NT CASE AS THE IDENTITY OF THE CONTRIBUTOR IS NOT ESTABLISHED HERE. THE AO MADE DE TAILED INVESTIGATION BY SENDING NOTICE U/S 133(6) TO THE PROVIDERS OF UNSECURED LOA N AND NO CONFIRMATION WAS RECEIVED DURING THE ASSESSMENT PROCEEDINGS. HE PLE ADED TO SET ASIDE THE ORDER OF THE LD. CIT (A) AND UPHOLD THE AO ON THIS ISSUE. 15. THE LD. AR FOR THE ASSESSEE SUBMITTED THAT DURING THE C OURSE OF THE ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THERE WAS AN INCREASE OF RS.52,48,820/- ON ACCOUNT OF UNSECURED LOAN AND THE AO REQUIRED THE ASSESSEE TO 18 ITA NO.2102/DEL/2011 EXPLAIN THE SAME. HE SUBMITTED THAT VIDE LETTER DAT ED 04.09.2009, THE ASSESSEE GAVE A LIST OF PERSONS FROM WHOM UNSECURED LOAN HAD BEEN OBTAINED AND FURTHER VIDE LETTER DATED 18.09.2009, THE ASSESSEE FILED A LETTE R CONTAINING THE NAME AND ADDRESSES OF PERSONS WHO HAD GIVEN UNSECURED LOAN. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD ALSO FILED CONFIRMATION LETTER FROM TH ESE PARTIES, PAN OR ASSESSMENT PARTICULARS WERE GIVEN WITH REGARD TO THE PROOF OF THEIR EXISTENCE. HE SUBMITTED THAT THE AO'S CONTENTION THAT THE DETAILS WERE NOT SUBMITTED, WAS TOTALLY FALSE. THE ASSESSEE, VIDE LETTER DATED 16.09.2009 AND LETTER D ATED 16.11.2009 HAD FILED THE NAMES, ADDRESSES, DETAILS ETC. OF ALL LOAN CREDITOR S AND EVEN FILED THEIR CONFIRMATIONS AS ON DATE. HE SUBMITTED THAT RS.41 L ACS WAS RECEIVED FROM THE DIRECTORS AND THEIR RELATIVES AND EVEN THEIR SOURCE WAS DULY EXPLAINED. HE FURTHER SUBMITTED THAT COPY OF PAN, COPY OF MASTER DATA OBT AINED FROM REGISTRAR OF COMPANIES CONTAINING CIN, COPY OF FINANCIAL STATEME NTS OF SHARE APPLICANTS AND COPY OF BANK STATEMENTS WERE ALSO FILED. HE SUBMITT ED THAT EACH OF THE PAYMENTS WAS RECEIVED BY A/C PAYEE CHEQUE THROUGH PROPER BAN KING CHANNEL. THUS, HE SUBMITTED THAT THE LOAN TRANSACTION STOOD PROVED AN D THE LD. CIT (A) RIGHTLY DELETED THE ADDITION OF RS.52,48,820/-. ACCORDINGLY, HE P LEADED THAT THE ORDER OF THE LD. CIT (A) BE UPHELD ON THIS ISSUE. 16. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MA TERIAL ON RECORD. WE FIND THAT LD. CIT(A) HAS TO REFERRED THE JUDGMENT OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. ORISSA CORPORATION (P) LTD. [1986] 159 ITR 78 (SC), AS SEEN ABOVE, IN WHICH THE HONBLE SUPREME COURT D EALT WITH SIMILAR CASE AS THAT 19 ITA NO.2102/DEL/2011 OF UNSECURED CREDITORS. ON THE YARDSTICK OF THE DE CISION OF THE HONBLE SUPREME COURT (SUPRA), WE NOTE THAT VIDE LETTER DATED 04.09 .2009, THE ASSESSEE GAVE A LIST OF PERSONS FROM WHOM UNSECURED LOAN HAD BEEN OBTAINED. WE FURTHER NOTE THAT THE ASSESSEE, VIDE LETTERS DATED 16.09.2009 AND 16.11.2 009 HAD FILED THE NAMES, ADDRESSES, DETAILS ETC. OF ALL LOAN CREDITORS AND E VEN FILED THEIR CONFIRMATIONS AS ON DATE. HE SUBMITTED THAT RS.41 LACS WAS RECEIVED FRO M THE DIRECTORS AND THEIR RELATIVES AND EVEN THEIR SOURCE WAS DULY EXPLAINED AND FURTHER SUBMITTED COPY OF PAN, COPY OF MASTER DATA OBTAINED FROM REGISTRAR OF COMPANIES CONTAINING CIN, COPY OF FINANCIAL STATEMENTS OF SHARE APPLICANTS AN D COPY OF BANK STATEMENTS WERE ALSO FILED. WE ALSO NOTE THAT EACH OF THE PAYMENTS WAS RECEIVED BY A/C PAYEE CHEQUE THROUGH PROPER BANKING CHANNEL. WE FURTHER NOTE THAT WITH REGARD TO CONFIRMATION OF LOANS FROM M/S UPPERCON MARKETING P VT. LTD., TDS CERTIFICATES, BANK STATEMENT AND ASSESSMENT PARTICULARS WERE FILE D. LIKEWISE, IN THE CASE OF LOANS FROM SMUG PHARMA PVT. LTD., DEEAS COMPUTRADE PVT. LTD., MARUDHAR BUILDERS PVT. LTD. AND M/S INDERJEET TRADE LINKS PV T. LTD., SIMILAR DETAILS HAVE BEEN FILED. IF THE AO NURTURED ANY DOUBT ABOUT THE VERACITY OF THE AFORESAID DOCUMENTS, THEN THE AO HAD ENOUGH POWERS TO CALL FO R THE INFORMATION, TO SATISFY HIMSELF, HOWEVER, NOTHING HAS BEEN DONE BY THE AO. IT IS NOT THE CASE OF THE REVENUE THAT ADDITIONAL EVIDENCES FILED DURING THE APPELLATE PROCEEDINGS WERE NOT FORWARDED TO THE AO UNDER RULE 46A. THE CIT (A) NO T ONLY FORWARDED THE ADDITIONAL EVIDENCES BUT ALSO GRANTED ON MONTHS TI ME SOUGHT BY THE AO TO VERIFY THE VERACITY OF THE DOCUMENTS AND THE AO SENT THE R EMAND REPORT AFTER THREE 20 ITA NO.2102/DEL/2011 MONTHS. WE TAKE NOTE THAT AO IN HIS REMAND REPORT HAS NOT ADVERSELY COMMENTED UPON THE ADDITIONAL DOCUMENTS WHICH WAS IN FRONT OF HIM FOR THREE MONTHS TIME WHEN HE COULD HAVE EASILY CROSS-CHECKED ABOUT THE V ERACITY OF IT. AS STATED EARLIER, THE BASIC DETAILS WERE WITH AO AT THE ASSE SSMENT STAGE ITSELF, BUT HE PREFERRED NOT TO MAKE ENQUIRIES, AND MADE THE ADDI TION WHICH WAS RIGHTLY DELETED BY THE LD. CIT (A). THEREFORE, IN VIEW OF THE ABOV E, WE FIND THAT THE ASSESSEE HAD DISCHARGED THE ONUS CAST UPON HIM. IN THE BACKGROU ND OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE HONBLE SUPREME COUR T IN CIT VS. ORISSA CORPORATION PVT. LTD. (SUPRA), WE DO NOT FIND ANY I NFIRMITY IN THE ORDER OF THE LD. CIT(A), HENCE, WE UPHOLD THE SAME AND DECIDE THE GR OUND NO. 2 AGAINST THE REVENUE. 17. GROUND NO.3 OF THE REVENUES APPEAL READ AS UND ER :- 3. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW I N DELETING ADDITION OF RS.74,84,106/- MADE U/S 69 OF THE INCOME TAX AC T, 1961, ON ACCOUNT OF PURCHASE OF FIXED ASSETS. THE ISSUE OF VERIFYING THE BOOKS OF ACCOUNT AT THE REMAND REPORT STAGE WAS NOT CONSIDERED BY LD. C IT(A). FURTHER, WHETHER THE GROUND CITED BY THE ASSESSEE FOR ADMISS ION OF ADDITIONAL EVIDENCE WAS COVERED UNDER RULE 46A OF THE INCOME T AX RULES? 18. THE AO OBSERVED THAT NO DOCUMENTARY EVIDENCE WA S FILED ON ACCOUNT OF INCREASE OF FIXED ASSETS. AS SUCH, THE AO PROCEEDE D TO ASSESS THE AMOUNT OF RS.74,84,106/- AS UNEXPLAINED INVESTMENT AND ADDED U/S 69 OF THE ACT. THE AO OBSERVED THAT SECTION 69 WOULD ONLY BE APPLICABLE W HERE INVESTMENT IS NOT RECORDED IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE AND MADE THE ADDITION OF RS.74,84,106/-. 21 ITA NO.2102/DEL/2011 19. IN APPEAL THE LD. CIT (A) DELETED THE ADDITION AND THE RELEVANT FINDING OF THE LD. CIT (A)S ORDER ON THIS ISSUE IS REPRODUCED BELOW :- 22. .IN THE CASE, THE INVESTMENTS IN BUILDING WIP WAS DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AND THE BALAN CE SHEET HAS BEEN DULY AUDITED BY A QUALIFIED CHARTERED ACCOUNTANT. THUS, THE ADDITION OF RS.74,84,106/- WAS AGAINST THE PROVISIONS OF SECTIO N 69. IN THE PAPER BOOK FILED, THE ASSESSEE HAS SUBMITTED, AT PAGE 330 AND 331, DETAILS OF PLOT NO.6 & 7, OLD JUDICIAL COMPLEX, GURGAON OF HUDA. IT IS OBSERVED THAT THE PURCHASE OF LAND WAS FOR RS. 46,58,000/-. FURT HER, EXPENDITURE WAS MADE TO THE TUNE OF RS. 28,26,106/- TOWARDS CONSTRU CTION ON THE SAID PLOT OF LAND. FROM THE DETAILS FILED, IT IS EVIDENT THAT ON THE PURCHASE OF LAND, THE PAYMENTS WERE MADE BY CHEQUE. THE BANK STATEMEN T ALSO SUGGESTS THE SAME. EACH OF THE PAYMENTS MADE FOR CONSTRUCTION HA VE ALSO BEEN MADE BY CHEQUE. THE BOOKS OF ACCOUNTS OF THE ASSESSEE WE RE ALSO AUDITED BY R.A. KILA & CO. IN OTHER WORDS, THE BOOKS OF ACCOUN TS OF THE ASSESSEE HAD BEEN AUDITED AND ENTRY REFLECTED IN THE RETURN OF I NCOME. 23 SECTION 69 PROVIDES FOR '69. WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECE DING THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS W HICH ARE NOT 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] OFFIC ER, SATISFACTORY, THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE TH E INCOME OF THE ASSESSEE OF SUCH FINANCIAL YEAR. 24. IN THE CASE IN HAND, THE INVESTMENT IN THE PLOT AND CONSTRUCTION THEREON WAS MADE BY THE ASSESSEE. WHILE, IT MAY BE TRUE, THAT THE LD. AO COULD NOT HAVE THE OPPORTUNITY TO PERUSE THE BOOKS OF ACCOUNTS OF THE ASSESSEE, DURING THE ASSESSMENT STAGE, THE FACT OF THE MATTER IS THAT EVEN AT THE REMAND STAGE, THE MATTER COULD HAVE BEEN LOOKED INTO. AO COULD HAVE REQUESTED FOR PERMISSION TO ENQUIRE U/S 250(4) WHIC H HAS NOT BEEN DONE. I AM AFRAID THAT THE SAME HAS NOT BEEN DONE. WHEN THE BANK ACCOUNT IS DISCLOSED, THROUGH WHICH THE CHEQUES HAVE BEEN ISSU ED IN EACH OF THE CASES, THE INVESTMENT IN THE SAID PLOT AND THE CONS TRUCTION THEREON CANNOT BE TAKEN AS NOT RECORDED IN THE BOOKS OF ACCOUNTS O F THE ASSESSEE. CIRCUMSTANTIAL EVIDENCE SUGGESTS OTHERWISE. THUS, T HE ASSESSEE DESERVES TO SUCCEED IN GROUND OF APPEAL NO.4. 22 ITA NO.2102/DEL/2011 20. LD. DR RELIED ON THE ORDER OF THE AO AND SUBMIT TED THAT THE ISSUE OF VERIFYING THE BOOKS OF ACCOUNT AT THE REMAND REPORT STAGE WAS NOT CONSIDERED BY LD. CIT(A). FURTHER, HE SUBMITTED THAT THE GROUN D CITED BY THE ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCE WAS NOT COVERE D UNDER RULE 46A OF THE INCOME TAX RULES. 21. LD. AR REITERATED THE SUBMISSIONS MADE BEFORE T HE LD. CIT (A) AND WANTED US NOT TO INTERFERE WITH THE ORDER OF THE LD . CIT (A) ON THIS ISSUE. 22. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE AND PERUSED THE MATERIAL ON RECORD. BEFORE ADJUDICATING THE ISSUE IN DISPUTE, WE CAN GAINFULLY REFER THE PROVISIONS OF SECTION 69 OF THE I.T. ACT AS UNDER:- 69. WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECE DING THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS W HICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINT AINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS N O EXPLANATION ABOUT THE NATURE AND SOURCE OF THE INVE STMENTS OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINI ON OF THE [ASSESSING] OFFICER, SATISFACTORY, THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF S UCH FINANCIAL YEAR. 23. ON THE TOUCHSTONE OF THE PROVISIONS OF SECTION 69, WE FIND THAT IN THE PRESENT CASE, THE INVESTMENT IN THE PLOT AND CONSTR UCTION THEREON WAS MADE BY THE ASSESSEE AND ALL THE TRANSACTIONS WERE THROUGH BANK ING CHANNEL AS IS EVIDENT FROM THE BANK STATEMENT FILED BY THE ASSESSEE. THE LD. CIT (A) HAS GIVEN A CLEAR FINDING IN PARA 22 OF THE IMPUGNED ORDER THAT THE INVESTMEN TS IN BUILDING WIP WAS DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AND THE BALAN CE SHEET HAS BEEN DULY AUDITED 23 ITA NO.2102/DEL/2011 BY A QUALIFIED CHARTERED ACCOUNTANT AND THUS, ACCOR DING TO HIM, THE ADDITION OF RS.74,84,106/- WAS AGAINST THE PROVISIONS OF SECTIO N 69. WE FIND THAT IN THE PAPER BOOK FILED, AT PAGE 330 AND 331, DETAILS OF PLOT NO .6 & 7, OLD JUDICIAL COMPLEX, GURGAON OF HUDA. IT IS OBSERVED THAT THE PURCHASE O F LAND WAS FOR RS. 46,58,000/-. FURTHER, EXPENDITURE WAS MADE TO THE TUNE OF RS. 28,26,106/- TOWARDS CONSTRUCTION ON THE SAID PLOT OF LAND. FROM THE DET AILS FILED, IT IS EVIDENT THAT ON THE PURCHASE OF LAND, THE PAYMENTS WERE MADE BY CHEQUE. THE BANK STATEMENT ALSO SUGGESTS THE SAME. EACH OF THE PAYMENTS MADE FOR CO NSTRUCTION HAVE ALSO BEEN MADE BY CHEQUE. THE BOOKS OF ACCOUNTS OF THE ASSESS EE WERE ALSO AUDITED BY R.A. KILA & CO. THUS, WE CONCUR WITH THE LD. CIT (A) THA T THE BOOKS OF ACCOUNTS OF THE ASSESSEE HAD BEEN AUDITED AND ENTRY REFLECTED IN TH E RETURN OF INCOME AND THE BALANCE SHEET HAS BEEN DULY AUDITED BY A QUALIFIED CHARTERED ACCOUNTANT. WE FIND FORCE IN THE SUBMISSIONS OF THE LD. AR THAT EVEN IF THE AO COULD NOT HAVE THE OPPORTUNITY TO PERUSE THE BOOKS OF ACCOUNTS OF THE ASSESSEE, DURING THE ASSESSMENT STAGE BECAUSE, ACCORDING TO ASSESSEE, IT WAS ALL WI TH CBI AND THE FACT OF THE MATTER IS THAT EVEN AT THE REMAND STAGE, THE MATTER COULD HAVE BEEN LOOKED INTO BY THE AO, WHICH HAS NOT BEEN DONE. SO, IN THE LIGHT OF TH E TRANSACTIONS THROUGH BANKING CHANNEL AND AUDITED BOOKS OF ACCOUNT, IT CANNOT BE SAID THAT THE INVESTMENTS WERE NOT REFLECTED IN THE BOOKS OF ACCOUNT WHEN THERE IS A CLEAR FINDING OF THE CIT (A) THAT THE INVESTMENTS IN BUILDING WIP WAS DULY ACCOU NTED FOR IN THE BOOKS OF ACCOUNT AND THE BALANCE SHEET HAS BEEN DULY AUDITED BY A QUALIFIED CHARTERED ACCOUNTANT. THUS, IN OUR OPINION, WHEN THE BANK AC COUNT IS DISCLOSED, THROUGH 24 ITA NO.2102/DEL/2011 WHICH THE CHEQUES HAVE BEEN ISSUED IN EACH OF THE C ASES, THE INVESTMENT IN THE SAID PLOT AND THE CONSTRUCTION THEREON CANNOT BE TAKEN A S NOT RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A), HENCE, WE UPHOLD THE SAME AND DECIDE THE GROUND NO. 3 AGAINST THE REVENUE. 24. GROUND NO.4 OF THE REVENUES APPEAL READ AS UND ER :- 4. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING ADDITION OF RS.12,23,707/- MADE ON ACCOUNT OF PURC HASE OF PLOT. THE ISSUE OF VERIFYING THE BOOKS OF ACCOUNT AT THE REMA ND REPORT STAGE WAS NOT CONSIDERED BY LD. CIT(A). FURTHER, WHETHER THE GROUND CITED BY THE ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENC E WAS COVERED UNDER RULE 46A OF THE INCOME TAX RULES? 25. THE AO BASICALLY MADE THE ADDITION DUE TO THE A SSESSEES INABILITY TO PRODUCE THE BOOKS OF ACCOUNTS BEFORE HIM SINCE ALL DOCUMENTS HAD BEEN SEIZED BY CBI. HOWEVER, LD. CIT (A) DELETED THE ADDITION BY OBSERVING AS UNDER :- 27. I HAVE CONSIDERED THE ORDER OF THE LD. AO AND THE SUBMISSIONS MADE BY THE LD. AR OF THE ASSESSEE. IT IS REITERATED, AS IN GROUND OF APPEAL NO.4 THAT THE ADDITION HAS BEEN MADE BECAUSE OF THE INABILITY OF THE ASSESSEE TO PRODUCE THE BOO KS OF ACCOUNTS OF THE ASSESSEE. HOWEVER, NO CASE HAS BEEN MADE OUT BY THE LD. AO THAT THE INVESTMENTS MADE THROUGH DEMAND DRAFTS AND HAVE PASSED THROUGH REFLECTED BANK ACCOUNT WERE NOT REFLECTED I N THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THUS, THE PROVISIONS OF S ECTION 69 HAVE NOT BEEN MET. AS SUCH, THE ASSESSEE SUCCEEDS IN GROUND OF APPEAL NO.5 26. LD. DR RELIED ON THE ORDER OF THE AO AND SUBMIT TED THAT THE ISSUE OF VERIFYING THE BOOKS OF ACCOUNT AT THE REMAND REPORT STAGE WAS NOT CONSIDERED BY LD. CIT(A). 25 ITA NO.2102/DEL/2011 27. LD. AR FOR THE ASSESSEE REITERATED THE SUBMISSI ONS MADE BEFORE THE LD. CIT (A) AND SUBMITTED THAT THE AMOUNTS RELATED TO PURC HASE OF PLOTS OF LAND AMOUNTING TO RS.12,23,707/-. HE SUBMITTED THAT MOST OF THE P AYMENTS WERE MADE TO HUDA, A GOVERNMENT AGENCY, FOR INSTALLMENTS OF PLOTS. HE FURTHER SUBMITTED THAT EACH OF THE PAYMENTS WAS MADE BY ACCOUNT PAYEE D.D. HE FUR THER SUBMITTED THAT THE AO FAILED TO NOTE THAT THE PLOTS HAVE BEEN SHOWN AS CL OSING STOCK AT THE YEAR END. HE SUBMITTED THAT THE APPLICATION UNDER RULE 46A WAS M ADE FOR PLOTS PURCHASED ALONG WITH COPIES OF RELEVANT DOCUMENTS. HE ALSO SUBMIT TED THAT IN THE PAPER BOOK, THE DETAILS OF INSTALLMENTS HAVE BEEN SUBMITTED AT PAGE S 331 & 332 AND DETAILS OF THE DEMAND DRAFTS HAVE ALSO BEEN FURNISHED WHICH WERE P AID THROUGH A/C NO.590011000518, ING VYASA BANK, VASANT VIHAR, NEW DELHI. ACCORDINGLY, THE LD. AR WANTS US NOT TO INTERFERE WITH THE ORDER OF THE LD. CIT (A). 28. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MA TERIAL ON RECORD. WE FIND THAT THE ADDITION IN DISPUTE HAS BEEN MADE BECAUSE OF THE INABILITY OF THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNTS OF THE ASSESSEE BE CAUSE ALL DOCUMENTS HAD BEEN IN THE CUSTODY OF CBI. WE TAKE NOTE THAT THE INVES TMENTS WERE INSTALLMENTS FOR PLOTS WHICH WERE MADE TO HUDA, A GOVERNMENT AGENCY AND MADE THROUGH DEMAND DRAFTS AND HAVE PASSED THROUGH BANKING CHANN ELS AND THE FACT IS THAT THE BOOKS OF THE ASSESSEE WAS DULY AUDITED AS PER THE S TATUTE AND REFLECTED IN THE BALANCE SHEET. THE VERIFICATION OF THE BOOKS OUGHT TO HAVE BEEN DONE BY THE AO DURING THE REMAND PROCEEDINGS WHICH TOOK THREE MONT HS TIME BUT HE HAS NOT MADE ANY ATTEMPT TO DO SO AND THE ADDITION WAS BASED ON CONJECTURES AND SURMISES. 26 ITA NO.2102/DEL/2011 SINCE THE INSTALLMENTS FOR THE PLOT HAVE BEEN PAID THROUGH DD TO A GOVERNMENT AGENCY AND THE BOOKS OF THE ASSESSEE ARE STATUTORIL Y AUDITED AS STATED BY THE LD. CIT (A) ON THE BASIS OF EVIDENCE, WE DO NOT FIND TH E IMPUGNED ORDER TO BE PERVERSE, WHICH DOES NOT NEED ANY INTERFERENCE ON O UR PART, HENCE, WE UPHOLD THE SAME AND DISMISS THE GROUND NO. 4 RAISED BY THE REV ENUE. 29. GROUND NO.5 IS GENERAL IN NATURE. 30. IN THE RESULT, THE REVENUES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON THIS DAY OF 27 TH JANUARY, 2016. -SD- -SD- (L.P. SAHU) (A.T.VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 27 TH DAY OF JANUARY, 2016 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-IV, DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.