Om Prakash Aggarwal, New Delhi V. ACIT, New Delhi

ITA 2448/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81767 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 15-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 26-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GUNJAN PRASHAD
• Assessee Lawyers: C S ANAND MISS SHIKHA NAGPAL
• Keywords: Search and seizure
• Section: 143(3); 142(1); 153A; 132

Judgement Text

1 ITA NO.2603/D/2013 & 2448/D/2013 ASSTT.YEAR : 2008-09 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `E NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER I.T.A.NO.2603/DEL/2013 ASSESSMENT YEAR : 2008-09 DY.COMMISSIONER OF INCOME TAX, VS SHRI OM PRAKA SH AGGARWAL, CENTRAL CIRCLE-13, NEW DELHI. 202, SEWAK CHAMBER, 2099/38, NAIWALA, KAROL BAGH, NEW DELHI. I.T.A.NO.2448/DEL/2013 ASSESSMENT YEAR : 2008-09 SHRI OM PRAKASH AGGARWAL, VS DCIT, CC-13 , NEW DELHI. NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY: MR. C.S. ANAND, MISS SHIKHA NAGPAL DEPARTMENT BY : SHRI GUNJAN PRASHAD, C IT DR O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THE ABOVE APPEALS HAVE BEEN FILED BY THE REVENUE AS WELL AS BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-I, NEW DELHI D ATED 22.02.2013 PERTAINING TO AY 2008-09. 2 ITA NO.2603/D/2013 & 2448/D/2013 ASSTT.YEAR : 2008-09 ITA NO. 2603/DEL/2013 OF THE REVENUE 2. THE REVENUE HAS RAISED FOUR GROUNDS IN THIS APPE AL. GROUND NO. 1 AND 4 ARE GENERAL IN NATURE WHICH NEED NO ADJUDICATION AND REMAINING EFFECTIVE GROUNDS OF THE REVENUE READ AS UNDER:- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 37,80,000/- BEING THE UNDISCLOSED AMOUNT PAID BY THE ASSESSEE T OWARDS THE PURCHASE OF PROPERTY WITHOUT APPRECIATING THE FACT THAT THE AO HAS MADE THE ADDITION ON THE BASIS OF SLIP FOUND DURING THE COURSE OF SEARCH PROCEEDINGS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 50,00, 000/- BEING THE UNDISCLOSED AMOUNT PAID BY THE ASSESSEE TOWARDS THE PURCHASE OF PROPERTY WITHOUT APPRECIATING THE FACT THAT THE AO HAS MADE THE ADDITION ON THE BASIS OF SLIP FOUND DURING THE COUR SE OF SEARCH PROCEEDINGS. 3. BRIEFLY STATED THE FACTS GIVING RISE TO THIS APP EAL ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT, 19 61 WAS CARRIED OUT IN THE CASE OF SWASTIK PIPES GROUP OF CASES ON 28.08.2008 AND ALL THE CASES WERE CENTRALIZED BY THE ORDER OF CIT, DELHI-XIII VIDE OR DER U/S 127(2) DATED 25.06.2009. IN RESPONSE TO NOTICE U/S 153A, THE AS SESSEE FILED RETURN OF INCOME DECLARING INCOME OF RS.16,00,780 ON 2.7.2010 . SUBSEQUENTLY, NOTICE U/S 143(2) AND 142(1) ALONG WITH QUESTIONNAIRE WAS ISSUED TO THE ASSESSEE ON 20.08.2008. THE AO COMPLETED ASSESSMENT U/S 143(3) R/W SECTION 153A OF 3 ITA NO.2603/D/2013 & 2448/D/2013 ASSTT.YEAR : 2008-09 THE ACT BY MAKING CERTAIN ADDITIONS AT THE TOTAL IN COME OF RS.1,60,75,308/- AS AGAINST THE AFOREMENTIONED RETURNED INCOME OF TH E ASSESSEE. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHICH WAS PARTLY ALLOWED O N THE MAIN ISSUES AND PARTLY DISALLOWED ON THE ISSUE OF ADDITION OF RS. 2 LAKH MADE BY THE AO ON ACCOUNT OF ADVANCE MONEY RECEIVED BY THE ASSESSEE F ROM SHRI MOTI RAM AGARWAL. NOW, THE AGGRIEVED REVENUE HAS PREFERRED EXTANT APPEAL ON TWO ISSUES WHICH ARE BEING REPRODUCED HEREINABOVE IN TH E GROUNDS RAISED BY THE REVENUE. GROUND NO. 2 OF THE REVENUE 5. APROPOS GROUND NO. 2, LD. DR SUBMITTED THAT THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 37,80,000/- BEI NG THE UNDISCLOSED AMOUNT PAID BY THE ASSESSEE TOWARDS THE PURCHASE OF PROPER TY WITHOUT APPRECIATING THE FACT THAT THE AO HAS MADE THE ADDITION ON THE B ASIS OF SLIP FOUND DURING THE COURSE OF SEARCH PROCEEDINGS. 6. REPLYING TO THE ABOVE, LD. COUNSEL FOR THE ASSES SEE HAS DRAWN OUR ATTENTION TOWARDS RELEVANT PARA NO. 9.2 AT PAGE 28 OF THE IMPUGNED ORDER AND SUBMITTED THAT THE ASSESSEE MADE INQUIRIES FROM PRO PERTY DEALERS/BROKERS FOR MAKING INVESTMENT IN THE PROPERTY AND THOSE ESTIMAT ES AND ROUGH NOTINGS WERE SEIZED BY THE DEPARTMENT DURING THE SEARCH AND DURING THE ASSESSMENT 4 ITA NO.2603/D/2013 & 2448/D/2013 ASSTT.YEAR : 2008-09 PROCEEDINGS, THE ASSESSEE DENIED THESE TRANSACTIONS , THEREFORE THE ONUS WAS SHIFTED TO THE REVENUE TO CAUSE INQUIRY AND ESTABLI SH THE CLAIM OF THE ASSESSEE AS FALSE. THE COUNSEL OF THE ASSESSEE VEHEMENTLY C ONTENDED THAT WHILE THE ASSESSEE HAS NOT MADE ANY INVESTMENT AND HAD NOT AC TED UPON THE INVESTMENT PROPOSALS OFFERED BY THE DEALERS AND BROKERS FOR MA KING INVESTMENT, THE AO COULD HAVE MADE AN INQUIRY TO ESTABLISH THE FACT TH AT WHETHER THE ASSESSEE HAS MADE ANY INVESTMENT IN THE PROPERTY AS PER SEIZ ED ROUGH NOTINGS AND ESTIMATES. 7. AT THE OUTSET, WE FIND IT APPROPRIATE TO REPRODU CE THE RELEVANT OPERATIVE PARA 9.2 AT PAGE 28 OF THE ORDER WHICH RE ADS AS UNDER:- 9.2 I HAVE CONSIDERED THE ASSESSMENT ORDER AND SUBMISSIONS OF THE APPELLANT. NO DOUBT IT IS THE O NUS OF THE APPELLANT TO ESTABLISH THE BONA FIDE OF A TRANSACTION OR HIS CLAIM. HOWEVER, THE ONUS SHIFTS TO THE REVENUE WHEN THE APPELLANT GIVES AN EXPLANATION REGARDING THE FINANCIAL TRANSACTIONS ENTERED INTO B Y' HIM. IN THE PRESENT CASE, THE APPELLANT MADE INQUIR IES FROM PROPERTY DEALERS / BROKERS FOR MAKING INVESTME NTS IN PROPERTIES. THOSE ESTIMATES / ROUGH NOTINGS WERE SEIZED BY THE DEPARTMENT DURING SEARCH. THE APPELLA NT GAVE HIS EXPLANATION DURING THE ASSESSMENT PROCEEDINGS AND DENIED THESE TRANSACTIONS. THEREAFT ER, IT WAS INCUMBENT ON THE REVENUE TO CAUSE ENQUIRY AN D ESTABLISH THE CLAIM OF THE APPELLANT AS FALSE. VERIFICATION OF THE PROPERTIES COULD HAVE ESTABLISH ED THE TRUTH OF THE MATTER. THIS DOES NOT APPEAR TO HA VE BEEN DONE AND, THEREFORE, IN THE ABSENCE, OF ANY EVIDENCE TO ESTABLISH ACTUAL INVESTMENTS IN SUCH PROPERTIES THE ADDITION CANNOT BE SUSTAINED AND IS 5 ITA NO.2603/D/2013 & 2448/D/2013 ASSTT.YEAR : 2008-09 DELETED. THE GROUND OF APPEAL IS ALLOWED AND APPELLANT GETS RELIEF OF RS. 37,80,000/-. 8. IN VIEW OF ABOVE, WE OBSERVE THAT THE AO HAS REP RODUCED NOTING NO. 1 & 2 AT PAGE 11 OF THE ASSESSMENT ORDER WHEREIN IN N OTING NO. 1, THE DETAIL OF 540 SQ FT PROPERTY @13000 PER SQ FT HAS BEEN MENTIO NED. ON THIS ISSUE, THE AO OBSERVED THAT IN ENTRY NO.1, THE ASSESSEE HAS ME NTIONED THAT FOR PROPERTY MEASURING 540 SQ FT, THE BOOKING RATE IS SHOWN AS R S.13,000/-. OUT OF THIS, RS. 6000 PER SQ. FEET IS MENTIONED AS THE WHITE C OMPONENT. THUS, AN AMOUNT OF RS.7000 PER SQ FEET FOR RS. 540 PER SQ. F EET IS TO BE PAID OUT OF THE BOOKS WHICH WORKS OUT TO RS.37,80,000/- AND THE AO MADE ADDITION IN THIS REGARD. BEFORE THE AO, THE ASSESSEE SUBMITTED AN E XPLANATION STATING THAT THE AGENT/BROKER HAD EXPLAINED TO THE ASSESSEE THAT AREA OF UNIT IS 540 SQ FT AND THE PARTY IS DEMANDING @ 13,000/- PER SQ FT AND THE ASSESSEE HAD NOT MADE ANY PAYMENT WHICH IS NOT ACCOUNTED FOR. LD. C OUNSEL OF THE ASSESSEE HAS DRAWN OUR ATTENTION TOWARDS OPERATIVE PARA 9.2 OF THE ASSESSEE AND SUBMITTED THAT THE ASSESSEE ACTUALLY PAID AMOUNT TO THE PROPERTY OWNER @ 13,000/- PER SQ FT AND THERE WAS NO ELEMENT OF UNAC COUNTED PAYMENT, THEREFORE, THE AO WAS NOT JUSTIFIED IN MAKING THE A DDITION. IN THIS REGARD, LD. DR SUBMITTED THAT THE ASSESSEE DID NOT SUBMIT ANY E XPLANATION BEFORE THE AO AND THE SAME WAS FIRST TIME SUBMITTED BEFORE THE CIT(A) WHICH REQUIRES 6 ITA NO.2603/D/2013 & 2448/D/2013 ASSTT.YEAR : 2008-09 COMMENTS OF THE AO, THEREFORE, THE CIT(A) GRANTED R ELIEF FOR THE ASSESSEE WITHOUT FOLLOWING STATUTORY PROVISIONS OF THE ACT A ND RULE 46A OF THE INCOME TAX RULES, 1962. 9. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS, W E ARE OF THE VIEW THAT THE AO RIGHTLY OBSERVED NOTING NO. 1 IN THE SP IRAL BOOKS OF THE ASSESSEE WHEREIN DETAIL OF INVESTMENT IN 540 SQ PROPERTY IS RECORDED BY THE ASSESSEE. PERHAPS THE AO MADE IMPUGNED ADDITION ON THE BASIS OF BIFURCATION IN THE AMOUNT WHICH STIPULATES RS. 6000 PER SQ FT IN WHIT E AND THEREFORE, THE AO HAS DRAWN THE CONCLUSION THAT THE ASSESSEE HAD MADE INVESTMENT OF RS.37,80,000 OUT OF BOOKS OF ACCOUNTS BY MAKING PA YMENT @7000 PER SQ FT FOR 540 SQ FT PROPERTY OUT OF BOOKS OF ACCOUNTS. A T THE SAME TIME, WE ALSO OBSERVE THAT LD. COUNSEL OF THE ASSESSEE SUBMITTED AT THE BAR THAT THE ASSESSEE ACTUALLY PAID CONSIDERATION OF THIS PROPER TY @13000 PER SQ FT AND THERE WAS NO ELEMENT OF INVESTMENT OUT OF BOOKS OF ACCOUNTS FROM THE UNACCOUNTED MONEY. THE CIT(A) HAS NOT ADOPTED THE PROPER COURSE FOR GRANTING RELIEF FOR THE ASSESSEE. THEREFORE, WE FI ND IT JUST AND PROPER TO RESTORE THE ISSUE TO THE FILE OF AO WITH A DIRECTIO N THAT THE AO SHALL AFFORD DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE AND THE ASSESSEE SHALL EXPLAIN THE DETAILS OF INVESTMENT BEFORE THE AO SUBSTANTIATING THE FACT THAT THE ASSESSEE HAD ACTUALLY PAID PURCHASE CONSIDERATION @13000 PER SQ FT FOR THE PROPERTY 7 ITA NO.2603/D/2013 & 2448/D/2013 ASSTT.YEAR : 2008-09 OF 540 PER SQ FT. HENCE, IMPUGNED ORDER PERTAINING TO THIS ISSUE IS SET ASIDE AND GROUND NO. 2 OF THE REVENUE IS DEEMED TO BE ALL OWED FOR STATISTICAL PURPOSES. GROUND NO. 3 10. APROPOS GROUND NO. 3, LD. COUNSEL OF THE ASSESS EE SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITIO N OF RS. 50,00,000/- BEING THE UNDISCLOSED AMOUNT PAID BY THE ASSESSEE TOWARDS THE PURCHASE OF PROPERTY WITHOUT APPRECIATING THE FACT THAT THE AO HAS MADE THE ADDITION ON THE BASIS OF SLIP FOUND DURING THE COURSE OF SEARCH PROCEEDINGS. LD. COUNSEL OF THE ASSESSEE HAS DRAWN OUR ATTENTION TOWARDS PAR A NO. 10.2 AT PAGE 30 OF THE IMPUGNED ORDER AND SUBMITTED THAT THE ASSESSEE NOTED PROPOSAL OF INVESTMENT ADVANCED BY THE AGENT AND THE PROPERTY B ROKER BUT ACTUALLY THE ASSESSEE HAD NOT ACTED UPON THIS PROPOSAL AND FINAL LY THE ASSESSEE HAD NOT MADE ANY INVESTMENT IN THIS REGARD. LD. COUNSEL OF THE ASSESSEE VEHEMENTLY CONTENDED THAT THE REVENUE AUTHORITIES HAD NOT BROU GHT OUT ANY FACT OR EVIDENCE TO SHOW THAT THE ASSESSEE MADE INVESTMENT OF RS.50 LAC TOWARDS 957 SQ FT PROPERTY AT PEARL BUSINESS @ 13,500 PER S Q FT AND ASSESSEE PAID RS.50 LAKH TOWARDS BOOKING AMOUNT. LD. COUNSEL SUB MITTED THAT THE CIT(A) RIGHTLY CONCLUDED THAT IN ABSENCE OF ANY EVIDENCE T O ESTABLISH ACTUAL INVESTMENT IN SUCH PROPERTY, THE ADDITION CANNOT BE SUSTAINED. 8 ITA NO.2603/D/2013 & 2448/D/2013 ASSTT.YEAR : 2008-09 11. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS, WE OBSERVE THAT THE CIT(A) GRANTED RELIEF FOR THE ASSESSEE WITH FOLLOWI NG FINDINGS AND CONCLUSION:- 10.2 I HAVE CONSIDERED THE ASSESSMENT ORDER AND SUBMISSIONS OF THE APPELLANT. NO DOUBT IT IS THE O NUS OF THE APPELLANT TO ESTABLISH THE BONA FIDE OF A TRANS ACTION OR HIS CLAIM. HOWEVER, THE ONUS SHIFTS TO THE REVENUE WHEN THE APPELLANT GIVES AN EXPLANATION REGARDING THE FINANCIAL TRANSACTIONS ENTERED INTO BY HIM. IN THE PRESENT CASE, THE APPELLANT MADE INQUIRIES FROM PROPERTY DE ALERS /BROKERS FOR MAKING INVESTMENTS IN PROPERTIES. THOS E ESTIMATES /ROUGH NOTINGS WERE SEIZED BY THE DEPARTM ENT DURING SEARCH. THE APPELLANT GAVE HIS EXPLANATION D URING THE ASSESSMENT PROCEEDINGS AND DENIED THESE TRANSACTIONS. THEREAFTER, IT WAS INCUMBENT ON THE R EVENUE TO CAUSE ENQUIRY AND ESTABLISH THE CLAIM OF THE APP ELLANT AS FALSE. VERIFICATION OF THE PROPERTIES COULD HAVE ESTABLISHED THE TRUTH OF THE MATTER. THIS DOES NOT APPEAR TO HAVE BEEN DONE AND, THEREFORE, IN THE ABSENCE OF ANY EVIDENCE TO ESTABLISH ACTUAL INVESTMENTS IN SUCH PROPERTIES THE ADDITION CANNOT BE SUSTAINED AND IS DELETED. THE GROUND OF APPEAL IS ALLOWED AND APPELL ANT GETS RELIEF OF RS. 50,00,000/-. 12. IN VIEW OF ABOVE, WE OBSERVE THAT THE ASSESSEE GAVE HIS EXPLANATION DURING THE ASSESSMENT PROCEEDINGS AND DENIED THESE TRANSACTIONS. THEREAFTER, IT WAS THE DUTY OF THE AO TO CONDUCT IN QUIRY AND ESTABLISH THE CLAIM OF THE ASSESSEE AS FALSE AND TO BRING OUT SUB STANTIAL MATERIAL AND EVIDENCE WHICH COULD ESTABLISH THAT THE ASSESSEE AC TUALLY MADE INVESTMENT OF RS. 50 LAKH TOWARDS THIS PROPERTY. IN VIEW OF ABOV E, WE ARE OF THE 9 ITA NO.2603/D/2013 & 2448/D/2013 ASSTT.YEAR : 2008-09 CONSIDERED VIEW THAT THE CIT(A) GRANTED RELIEF FOR THE ASSESSEE AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE AND WE ARE UNABLE TO SEE ANY PERVERSITY, INFIRMITY OR ANY OTHER VALID REASON TO INTERFERE WITH THE FINDINGS OF THE CIT(A). ACCORDINGLY, GROUND NO. 3 OF THE RE VENUE IS DISMISSED. ITA NO.2448/DEL/2013 13. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN TH IS APPEAL:- 1. THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ADDI TION OF RS.2,00,000/- MADE BY THE LD. AO ON ACCOUNT OF ADVA NCE MONEY RECEIVED BY THE ASSESSEE FROM SH. MOTI RAM AGGARWAL. 2. THAT ON THE FACTS OF THE CASE AND UNDER THE LAW , NO ADDITION ON ACCOUNT OF LOW WITHDRAWALS FOR HOUSEHOL D EXPENSES AND SCHOOL FEES OF CHILDREN, WAS CALLED FO R. 14. APROPOS GROUND NO.1 OF THE ASSESSEE, WE HAVE HE ARD ARGUMENTS OF BOTH THE SIDES AND CAREFULLY PERUSED THE RELEVANT M ATERIAL PLACED BEFORE US INTER ALIA THE ASSESSMENT ORDER AS WELL AS THE IMPU GNED ORDER OF THE CIT(A). LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASS ESSEE ORIGINALLY BELONGS TO MAHENDER GARH WHERE HE HAS INTEREST IN ANCESTRAL PROPERTY INCLUDING SHOP, GODOWN ETC. AND SINCE THE ASESSEE HAS LEFT M AHENDER GARH, THEREFORE, HE IS IN THE PROCESS OF DISPOSING OF HIS INTEREST/S HARE IN THE ANCESTRAL PROPERTY SITUATED AT MAHENDER GARH. LD. COUNSEL FURTHER SUB MITTED THAT HIS BROTHERS SHRI PANNA LAL AND SHRI MOTI RAM WHO LIVE IN MAHEND ER GARH HAVE THE FIRST 10 ITA NO.2603/D/2013 & 2448/D/2013 ASSTT.YEAR : 2008-09 RIGHT TO PURCHASE THE ASSESSEES SHARE IN THE JOIN T PROPERTY. THEREFORE, THE ASSESSEE AGREED TO SELL HIS INTEREST IN THE SHOP TO HIS BROTHER SHRI PANNA LAL AND HIS INTEREST IN THE GODOWN TO HIS OTHER BROTHER SHRI MOTI RAM. LD COUNSEL FURTHER POINTED OUT THAT THE IMPUGNED AMOUN T OF RS.2 LAKH WAS PAID BY SHRI MOTI RAM TO THE ASSESSEE VIDE AGREEMENT TO SALE OF GODOWN DATED 25.12.2007. THE AMOUNT OF RS. 1 LAKH WAS PAID TO A SSESSEE ON 25.12.2007 AT THE TIME OF EXECUTION OF AGREEMENT TO SELL AND ANOT HER RS. 1 LAKH ON 3.1.2008 AS A PART CONSIDERATION OF AGREEMENT TO SELL. LD. COUNSEL FURTHER CONTENDED THAT DESPITE THE FACT THAT THE ASSESSEE SUBMITTED C OPIES OF THE AGREEMENT, CONFIRMATION FROM SHRI MOTI RAM AGARWAL SUPPORTING THE PAYMENT OF PART SALE CONSIDERATION TO THE ASSESSEE WITH PAN NO. OF THE SAID PURCHASER, THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION IN THIS REGARD. LD. COUNSEL VEHEMENTLY CONTENDED THAT DURING FIRST APPELLATE PR OCEEDINGS, THE CIT(A) ALSO DISMISSED GROUND OF THE ASSESSEE WITHOUT ANY J USTIFIED AND COGENT REASON. LD. COUNSEL ALSO CONTENDED THAT IT WAS THE DUTY OF THE AO TO CONFIRM THE GENUINENESS OF THE TRANSACTION WITH SHRI MOTI R AM AGGARWAL WHO ACTUALLY GAVE THE IMPUGNED AMOUNT TO THE ASSESSEE UNDER AGREEMENT TO SALE OF GODOWN DATED 25.12.2007 BUT WITHOUT MAKING ANY FURTHER INQUIRY, THE AO SIMP LY MADE AN ADDITION WHICH WAS WRONGLY UPHELD BY THE CIT(A). 15. LD. DR SUPPORTED THE ASSESSMENT ORDER AS WELL A S THE IMPUGNED ORDER AND SUBMITTED THAT THE AGREEMENT TO SELL SHOULD BE LAWFULLY EXECUTED ON 11 ITA NO.2603/D/2013 & 2448/D/2013 ASSTT.YEAR : 2008-09 REQUISITE STAMP PAPER AS PRESCRIBED BY THE STATUTOR Y PROVISIONS AND AGREEMENT TO SELL AND TRANSACTION WAS NOT EFFECTED TILL THE PASSING OF ASSESSMENT ORDER EVEN AFTER PASSAGE OF THREE YEARS, THEREFORE, THE AUTHORITIES BELOW WERE RIGHT IN MAKING ADDITION IN THIS REGARD. 16. ON CAREFUL CONSIDERATION OF THE ABOVE CONTENTIO NS AND PERUSAL OF THE IMPUGNED ORDER, WE OBSERVE THAT THE CIT(A) UPHELD T HE ADDITION WITH FOLLOWING OBSERVATIONS AND CONCLUSION:- 6.2 I HAVE CONSIDERED THE ASSESSMENT ORDER AND SUBMISSIONS OF THE APPELLANT. THE APPELLANT IS A CH ARTERED ACCOUNTANT BY PROFESSION AND LIVES IN DELHI. HE ORI GINALLY BELONGS TO MAHENDER GARH WHERE HE HAS INTEREST IN ANCESTRAL PROPERTY INCLUDING SHOP, GODOWN, ETC. HE IS IN THE PROCESS OF DISPOSING OF HIS INTEREST / SHARE IN THE ANCESTRAL PROPERTY IN MAHENDER GARH. HIS BROTHERS, WHO LIVE I N MAHENDER GARH, HAVE FIRST RIGHT TO PURCHASE THE APP ELLANT'S SHARE IN THE JOINT PROPERTIES. ACCORDINGLY, APPELLA NT AGREED TO SELL HIS INTEREST IN THE SHOP TO HIS ONE BROTHER SH PANNA LAL AND HIS INTEREST IN THE GODOWN TO HIS OTHER BRO THER SH MOTI RAM. THE MONEY WAS PAID BY SH MOTI RAM TO THE APPELLANT VIDE AN AGREEMENT TO SELL DATED 25.12.200 7. ALONG WITH THIS AGREEMENT, AN AFFIDAVIT BY SH MOTI RAM CO NFIRMING THIS FACT WAS ALSO FILED. THE AO HAS DISBELIEVED TH E EVIDENCE FOR THE REASON THAT THE AGREEMENT WAS NOT EXECUTED ON THE REQUISITE STAMP PAPER AND THE TRANSFER OF THE PROPE RTY HAD NOT BEEN EFFECTED TILL DATE. THE APPELLANT, ON THE OTHER HAND, CONTENDS THAT AS THE AGREEMENT WAS BETWEEN REAL BRO THERS THERE WAS NO NEED TO GET THE DOCUMENT REGISTERED. T HE APPELLANT FURTHER CONTENDS THAT NO INQUIRY WAS MADE BY THE AO WITH SH MOTI RAM OR HIS SON WHO HAD SIGNED THE AGREEMENT AS WITNESS. I HAVE CONSIDERED THE RIVAL C LAIMS. EVEN IF THE TRANSACTION WAS A PRIVATE TRANSACTION B ETWEEN REAL BROTHERS, THE AGREEMENT TO SELL SHOULD HAVE BE EN LAWFULLY EXECUTED ON REQUISITE STAMP PAPER AS PRESC RIBED. 12 ITA NO.2603/D/2013 & 2448/D/2013 ASSTT.YEAR : 2008-09 THE AO WAS WITHIN HIS RIGHT TO DISBELIEVE THE DOCUM ENT AS IT WAS NOT EXECUTED ON THE REQUISITE STAMP PAPER AND N OT EFFECTED TILL THE DATE OF PASSING THE ASSESSMENT OR DER EVEN AFTER PASSAGE OF THREE YEARS. NO DOUBT, TAX WOULD H AVE BECOME DUE ONLY WHEN THE TRANSFER WAS COMPLETED. BU T THE CONSIDERABLE LAPSE OF TIME, NOT RECORDING THE AGREE MENT ON REQUISITE STAMP PAPER AND RECEIPT IN CASH ARE FACTS THAT LEAD TO LIKELIHOOD THAT THE TRANSACTION WOULD NOT BE DIS CLOSED FOR TAX PURPOSES. IT WAS FOR THE APPELLANT TO EXPLAIN T HE CASH RECEIPT TO THE SATISFACTION OF THE AO. THE APPELLAN T HAVING FAILED TO DO SO, THE APPEAL ON THIS GROUND CANNOT S UCCEED AND IS, THEREFORE, DISMISSED. 17. ADMITTEDLY AND UNDISPUTEDLY, THE PRESENT APPEAL IS PERTAINING TO AY 2008-09 AND AGREEMENT TO SELL WAS EXECUTED ON 25.12 .2007. THE ASSESSEE SUBMITTED COPY OF AN AGREEMENT TO SELL, CONFIRMATIO N FROM PURCHASER SHRI MOTI RAM AGGARWAL AND HIS PAN NUMBER BEFORE THE AO BUT THE AO, WITHOUT MAKING ANY FURTHER INQUIRY, HELD THAT THE T RANSFER OF THE SAID PROPERTY HAS NOT TAKEN PLACE EVEN TILL DATE I.E. DA TE OF PASSING ASSESSMENT ORDER DATED 27.12.2010 AND THE AGREEMENT TO SELL IS NOT A REGISTERED DOCUMENT AND NOT EXECUTED ON THE REQUISITE STAMP PA PER, HENCE, NEITHER THE AUTHENTICITY NOR THE DATE OF AGREEMENT IS VERIFIABL E. THE CIT(A) UPHELD THE ABOVE OBSERVATIONS OF THE AO IN A MECHANICAL MANNER WITHOUT CONSIDERING THE FACT THAT THE AO SHOULD HAVE EXAMINED THE DETAI LS, CONFIRMATION FROM THE INTENDED PURCHASER, SPECIFICALLY WHEN THE ASSESSEE HAD SUBMITTED HIS PAN NO. BEFORE THE AO. IN THIS SITUATION, WE ARE OF TH E CONSIDERED VIEW THAT THE 13 ITA NO.2603/D/2013 & 2448/D/2013 ASSTT.YEAR : 2008-09 ASSESSEE DISCHARGED HIS ONUS TO EXPLAIN CASH RECEIP TS AS SHOWN BY HIM BEFORE THE AO BUT THE AO DID NOT BRING ANY ADVERSE MATERIAL OR FINDING AGAINST THE ASSESSEE THAT THE CASH RECEIPTS WERE ME RELY AN EYE WASH AND IT WAS ACTUALLY THE CASH AMOUNT OF THE ASSESSEE WHO WA S INTRODUCED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE IN THE NAME OF HI S BROTHER SHRI MOTI RAM. BEFORE WE RECORD OUR CONCLUSION, WE MAKE IT CLEAR T HAT THE AO HAS ALL RIGHTS TO EXAMINE AND VERIFY THE TRANSACTION WHETHER IT WA S ACTUALLY EFFECTED OR NOT BUT FOR THE YEAR UNDER CONSIDERATION, THE AO CANNOT TAKE THIS STAND THAT THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF CASH RECEI PT TO HIS SATISFACTION. 18. IN VIEW OF ABOVE, GROUND NO. 1 OF THE ASSESSEE IS ALLOWED. GROUND NO.2 19. APROPOS GROUND NO. 2, LD. COUNSEL SUBMITTED THA T NO ADDITION ON ACCOUNT OF LOW WITHDRAWALS OF HOUSEHOLD EXPENDITURE AND SCHOOL FEE OF THE CHILDREN WAS CALLED FOR BECAUSE THE ASSESSEE HAS SH OWN WITHDRAWAL OF RS.72,000/- WHICH WAS SUFFICIENT TO MEET HIS HOUSEH OLD EXPENSES AND OTHER REQUIREMENTS. LD. COUNSEL FURTHER SUBMITTED THAT T HE OTHER FAMILY MEMBERS TOO HAD CONTRIBUTED TOWARDS HOUSEHOLD EXPENSES AND SCHOOL COLLEGE FEES ETC. DURING THE PREVIOUS YEAR RELEVANT TO AY 2008-09 AND THE TOTAL WITHDRAWALS MADE BY THE FAMILY MEMBERS INCLUDING THE ASSESSEE T O MEET OUT THE HOUSEHOLD EXPENSES HAD WORKED OUT TO RS.1,16,500/-. LD. COUNSEL POINTED 14 ITA NO.2603/D/2013 & 2448/D/2013 ASSTT.YEAR : 2008-09 OUT THAT THE CIT(A) RESTRICTED THE DISALLOWANCE TO RS.1,20,000 WHICH IS NOT SUSTAINABLE AND THE SAME MAY BE DELETED. 20. REPLYING TO THE ABOVE, LD. DR SUBMITTED THAT TH E EXPENDITURE ON THE FEE OF TWO CHILDREN WAS SHOWN SEPARATELY AT RS.5,50 0/- PER MONTH AND THE AO ESTIMATED HOUSEHOLD EXPENDITURE AND FEES AT RS.3 ,60,000 PER ANNUM, THEREFORE, THE AO WAS RIGHT IN GRANTING RELIEF OF R S.72,000 WHICH WAS DECLARED BY THE ASSESSEE. LD. DR FURTHER POINTED O UT THAT THE CIT(A) TOOK A LIBERAL AND IDEAL APPROACH RESTRICTING THE DISALLOW ANCE TO RS.1,20,000 WHICH IS SUSTAINABLE. 21. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS, WE OBSERVE THAT ADMITTEDLY THE ASSESSEE HAS SHOWN RS.1,16,500/- AS WITHDRAWAL FOR HOUSEHOLD EXPENSES AND COLLEGE/SCHOOL FEES WHICH CO MES TO LESS THAN RS.10,000/- PER MONTH. WE ALSO OBSERVE THAT ADMITT EDLY, THE ASSESSEE HAS SHOWN FEES OF TWO CHILDREN AT RS.5500 PER MONTH, OB VIOUSLY AFTER DEDUCTION OF FEES, REMAINING AMOUNT CANNOT BE HELD AS SUFFICI ENT TO MEET HOUSEHOLD EXPENSES OF THE ASSESSEE. THEREFORE, WE ARE IN AGR EEMENT WITH THE CONCLUSION OF THE CIT(A) WHEREIN HE RESTRICTED DISA LLOWANCE ON THIS COUNT OF RS.1,20,000/-. WE ARE UNABLE TO SEE ANY AMBIGUITY OR PERVERSITY IN THE IMPUGNED ORDER IN THIS REGARD AND WE UPHOLD THE SAM E. ACCORDINGLY, GROUND NO. 2 OF THE ASSESSEE IS DISMISSED. 15 ITA NO.2603/D/2013 & 2448/D/2013 ASSTT.YEAR : 2008-09 22. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY DISMISSED ON GROUND NO. 3 AND DEEMED TO BE PARTLY ALLOWED FOR STATISTICAL PUR POSES ON GROUND NO. 2 AND THE APPEAL OF THE ASSESSEE IS ALLOWED ON GROUND NO. 1 AND PARTLY DISMISSED ON GROUND NO.2. ORDER PRONOUNCED IN THE OPEN COURT ON 30.09.2014. SD/- SD/- (G.D. AGRAWAL) (CHANDRAMOHAN GARG) VICE PRESIDENT JUDICIAL MEMBER DT. 30TH SEPTEMBER, 2014 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. C.I.T.(A) 4. C.I.T. 5. DR BY ORDER ASSTT.REGISTRAR