DCIT, Bhiwani V. Sh. Amit Kumar Garg, Bhiwani

ITA 2448/DEL/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9067 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 24-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGDISH SINGH DAHIYA
• Keywords: Unexplained investment; Corroborative evidences; Onus to prove
• Section: 40A(3); 143(3); 133A; 143(1); 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE MS. SUSHMA CHOWLA, VICE PRESIDENT DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (E-COURT MODULE) ITA NO. 2448/DEL/2017 : ASSTT. YEAR : 2012-13 DCIT, HUDA CITY CENTRE, BHIWANI VS AMIT KUMAR GARG, PROP. M/S AMIT SALES CORPORATION, PLOT NO. 2, NEAR OVER BRIDGE, CIRCULAR ROAD, BHIWANI (APPELLANT) (RESPONDENT) PAN NO. A DCPG3789K CO NO. 146/DEL/2017 : ASSTT. YEAR : 2012-13 AMIT KUMAR GARG, PROP. M/S AMIT SALES CORPORATION, PLOT NO. 2, NEAR OVER BRIDGE, CIRCULAR ROAD, BHIWANI VS DCIT, HUDA CITY CENTRE, BHIWANI (APPELLANT) (RESPONDENT) PAN NO. A DCPG3789K ASSESSEE BY : SH. GAUTAM JAIN, ADV. REVENUE BY : SH. JAGDISH SINGH DAHIYA, SR. DR DATE OF HEARING: 15.07.2020 DATE OF PRONOUNCEMENT: 10.08.2020 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE A GAINST THE ORDER OF THE LD. CIT(A), HISAR DATED 24.01.2017 . 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENU E: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT (APPEAL) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO AT RS.2,22,16,952/- ON ACCOUNT OF INVESTM ENT ITA NO. 2448/DEL/2017 CO NO. 146/DEL/2017 AMIT KUMAR GARG 2 FROM UNDISCLOSED SOURCE, USL, INTEREST DISALLOWANCE WITHOUT APPRECIATING THE FACTS THAT THE ADDITIONS A RE MADE ON THE FACTS OF THE CASE AND THE DOCUMENTARY STRENG TH IMPOUNDED DURING THE SURVEY U/S 133A. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT (APPEAL) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO AT RS. 7,53,000/- ON ACCOUNT OF UNSECURED LOAN RECEIVED WITHOUT APPRECIATING THE FACTS THAT THE AD DITIONS ARE MADE ON THE FACTS OF THE CASE THAT THE CREDITWORTHINESS/GENUINENESS HAVE NOT PROVED DURING THE ASSESSMENT PROCEEDINGS WHICH ARE NOT A BUSINESS INC OME. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT (APPEAL) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO AT RS. 23,25,000/- ON ACCOUNT OF DISALLOW ANCE OF INTEREST IN PROPORTIONATE TO NON-BUSINESS ADVANC ES GIVEN OUT OF INTEREST BEARINGS FUNDS AND INTEREST I S CLAIMED AS EXPENSES WITHOUT APPRECIATING THE FACTS THAT SUCH INTEREST EXPENSES ARE CLAIMED AFTER ESTIMATION OF GROSS PROFIT. 4.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT (APPEAL) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO AT RS. 92,79,740/- ON ACCOUNT OF UNDISCLO SED INVESTMENT MADE FROM UNDISCLOSED SOURCE AND EARNED INTEREST THERE UPON WITHOUT APPRECIATING THE FACTS THAT THE ADDITIONS ARE MADE ON THE STRENGTH OF IMPOUNDED DOCUMENTS. 5.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT (APPEAL) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO AT RS. 98,59,212/- ON ACCOUNT OF UNDISCLO SED INVESTMENT WITHOUT APPRECIATING THE FACTS THAT THE ADDITIONS ARE MADE ON THE STRENGTH OF IMPOUNDED DOCUMENTS. 3. IN CO NO.146/DEL/2017, FOLLOWING GROUNDS HAVE BE EN RAISED BY THE ASSESSEE: THAT LD. CIT (A) ROHTAK HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN NOT CONCLUDING THAT IMPUGNED ORDER OF ASSESSMENT DATED 31.03.2015 U/S 143(3) OF THE ACT W AS IN EXCESS OF JURISDICTION SINCE THE ADDITION MADE O F RS.11,13,296/- AND RS.98,59,212 ARE BEYOND THE SCOP E OF ASSESSMENT IS OTHERWISE TO UNTENABLE AND UNSUSTAINA BLE. ITA NO. 2448/DEL/2017 CO NO. 146/DEL/2017 AMIT KUMAR GARG 3 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE E- FILED RETURN OF INCOME DECLARING AN INCOME AT RS.2,41,147 ON 12. 09.2012, WHICH WAS PROCESSED U/S 143(1) OF THE INCOME TAX AC T, 1961. LATER ON, THE CASE WAS SELECTED FOR SCRUTINY THROUG H CASS. A SURVEY U/S 133A OF THE ACT WAS CARRIED OUT AT THE B USINESS PREMISES OF THE ASSESSEE ON 02.09.2014. THE IMPOUND ED MATERIAL HAS BEEN DULY EXAMINED WHILE COMPLETING TH E ASSESSMENT PROCEEDINGS. THE AO HAS BROUGHT TO TAX, THE ALLEGED UNEXPLAINED INVESTMENTS BASED ON THE IMPOUNDED MATE RIAL. THE LD. CIT (A) HAS DELETED THE ADDITION WHICH WERE BAS ED ON SUCH MATERIAL ON THE GROUNDS THAT NO SEPARATE ADDITION I S WARRANTED WHEN THE PROFITS OF THE ASSESSEE ARE ESTIMATED TAKE N INTO CONSIDERATION THE GROSS PROFIT OF THE YEAR. AGGRIEV ED THE REVENUE FILED APPEAL BEFORE THE TRIBUNAL AND THE AS SESSEE HAS FILED CROSS OBJECTION. 5. GROUND NO. 1: INVESTMENT FROM UNDISCLOSED SOURCE COMPREHENSIVE, DEALT IN DETAIL IN OTHER GROUNDS. GROUND NO. 2: UNSECURED LOANS 6. THE AO OBSERVED THAT THE ASSESSEE HAS RECEIVED T HE FOLLOWING LOANS DURING THE YEAR: S. NO. NAME OF THE PARTY AMOUNT B ROUGHT TO TAX AS INCOME PRINCIPAL INTEREST TOTAL 1. PARVEEN KUMAR BHARDWAJ 1,00,000 5,000 1,05,000 2. LALITA DEVI 1,00,000 - 1,00,000 3. BALKISHAN SUGLA 1,00,000 1,00,000 4. HUKAM CHAND RAJENDER KUMAR 4,00,000 48,000 4,48,000 TOTAL 7,00,000 53,000 7,53,000 ITA NO. 2448/DEL/2017 CO NO. 146/DEL/2017 AMIT KUMAR GARG 4 7. THE ASSESSEE HAS FILED COPY OF ACCOUNT OF THESE PERSONS AND COPY OF ITR. IN THE CASE OF BHARDWAJ, THE AO HE LD THAT THE ASSESSEE HAS NOT FURNISHED THE ID PROOF AND BANK ST ATEMENT. SIMILARLY, IN THE CASE OF LALITA DEVI, THE AO WAS N OT SATISFIED WITH THE COPY OF THE ITR ACKNOWLEDGMENT. THE AO HEL D THAT IN THE CASE OF BALKISHAN SUGLA AND HUKAM CHAND RAJENDE R KUMAR, THE ASSESSEE HAS NOT FILED THE PRIMARY DOCUMENTS TO PROVE THE GENUINENESS OF THE TRANSACTIONS. 8. THE LD. CIT (A) DELETED THE ADDITION ON THE GROU NDS THAT THE INCOME OF THE ASSESSEE HAS BEEN ESTIMATED BY CA LCULATING THE GP, HENCE NO SEPARATE ADDITION IS CALLED FOR ON ACCOUNT OF UNSECURED LOANS. 9. BEFORE US, THE LD. DR TAKEN UP ARGUMENTS IN TWO FOLDS, 1. THAT THE DECISION OF THE LD. CIT (A) THAT NO SEPARA TE ADDITION IS CALLED FOR ON ACCOUNT OF LOANS, ONCE TH E INCOME HAS BEEN ESTIMATED IS TOTALLY ON A WRONG INTERPRETA TION OF JUDGMENTS AND FACTS OF THE CASE. 2. IT WAS ARGUED THAT THE ASSESSEE HAS FAILED TO DISCH ARGE THE ONUS OF IDENTITY, GENUINITY AND CREDITWORTHINESS OF THE FOUR LOAN PARTIES. IT WAS FURTHER ARGUED THAT THE AO HAS CLEARLY MENTIONED THAT THE BASIC DETAILS TO PROVE IDENTITY, GENUINITY AND CREDITWORTHINESS OF THE LOAN PARTIES HAVE NOT BEEN PROVIDED. 10. BEFORE US, THE LD. AR REITERATED THE ARGUMENTS TAKEN BEFORE THE LD. CIT (A). 11. REGARDING THE ADDITION ON ACCOUNT OF LOANS RECE IVED, IT WAS ARGUED THAT LOANS WERE RECEIVED FROM IDENTIFIABLE P ARTIES AND ITA NO. 2448/DEL/2017 CO NO. 146/DEL/2017 AMIT KUMAR GARG 5 THROUGH BANKING CHANNEL. IT WAS, THUS ARGUED THAT B URDEN OF THE ASSESSEE IN RESPECT OF THE LOANS RECEIVED FROM VARI OUS PARTIES STANDS DISCHARGED AND THEREFORE NO ADDITION IS TENA BLE. IT WAS ARGUED THAT ONCE THE AMOUNT HAS BEEN RECEIVED BY AC COUNT PAYEE CHEQUES AND THE CREDITORS HAVE DULY CONFIRMED THE TRANSACTIONS NO ADVERSE REFERENCE CAN BE DRAWN. IN ADDITION, THE LD. AR RELIED ON THE FOLLOWING JUDGMENTS: ADDL. CIT VS HANUMAN AGARWAL 151 ITR 150 (PAT) MATHER & PLATT (INDIA) LTD VS CIT 168 ITR 493 (CAL) ADDL. CIT BIHAR VS BAHRI BROS P. LTD. 154 ITR 244 ( PAT) NEMI CHAND KOTHARI VS. CIT 136 TAXMAN 213 (GAU) LABH CHAND BOHRA VS. ITO 219 CTR 571 (RAJ) 12. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PER USED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE DECI SION OF THE LD. CIT (A), THAT NO SEPARATE ADDITION ON ACCOUNT OF UN SECURED LOANS IS WARRANTED AS THE INCOME OF THE ASSESSEE HA S BEEN ESTIMATED FOR THE YEAR IS FOUND TO BE ON INCORRECT INTERPRETATION OF THE RATIO LAID DOWN BY THE HONBLE COURTS. THE L D. CIT (A) MISREAD THE JUDGMENTS AND COMBINED, TRANSPOLATED, B AMBOOZLED HERSELF IN CONSIDERING THE ITEMS OF P&L ACCOUNT WIT H THAT OF BALANCE SHEET ITEMS INTERCHANGEABLE. THE CASE LAWS REFERRED PERTAINS TO PURCHASES, DISALLOWANCES U/S 40A(3) AND ON ACCOUNT OF EXPENSES ON TRADING ACCOUNT. EXTRAPOLATION OF JU DGMENTS RENDERED IN CONNECTION WITH THE ITEMS OF TRADING AC COUNT CANNOT BE EXTENDED TO THE ADDITION OF UNSECURED LOANS WHIC H IS BALANCE SHEET ITEM. THE UNSECURED LOANS DO NOT HAVE IMPACT ON THE ESTIMATION OF GROSS PROFIT AS THEY DO NOT CONSTITUT E A PART OF THE TRADING ACCOUNT. HENCE, THE ISSUE OF UNSECURED LOAN S HAS TO BE ADJUDICATED INDEPENDENTLY ON THE MERITS OF THE CASE . ITA NO. 2448/DEL/2017 CO NO. 146/DEL/2017 AMIT KUMAR GARG 6 13. WITH REGARD TO THE LOANS FROM FOUR PEOPLE, WHIL E THE LD. DR ARGUED THAT EVEN THE COPY OF THE BANK STATEMENT HAS NOT BEEN FURNISHED BY THE ASSESSEE THUS FAILING TO DISCHARGE THE PRIMARY ONUS IN THE CASE OF THE LOANS RECEIVED FROM VARIOUS PARTIES, WE FIND FROM THE PAPER BOOK, THE RELEVANT DOCUMENTS PR OVING IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE L OANERS. WE FIND THAT ALL THE BANK STATEMENTS OF THE LOAN PARTI ES HAVE BEEN DULY SUBMITTED BEFORE THE AO. THE REVENUE HAS NOT D ISPUTED THE PRESENCE OF THE PRIMARY DOCUMENTS BEFORE THE LD. CI T (A) AT THIS JUNCTURE. HENCE, IT CAN BE HELD THAT THE ASSES SEE HAS DISCHARGED THE PRIMARY ONUS TO PROVE THE LOANS WHER EAS THE REVENUE HAS NOT ACTED UPON SUCH EVIDENCES FILED BY THE ASSESSEE TO BRING ANYTHING CONTRA. THE ADDITION HAS BEEN MADE WITHOUT CONDUCTING ANY ENQUIRY ON THE GROUNDS THAT THE ASSESSEE HAS NOT FILED THE PRIMARY DOCUMENTS NECESS ARY TO PROVE THE GENUINENESS OF THE LOANS, THE OBSERVATION OF WHICH, WE FIND CONTRARY TO THE FACTS ON RECORD. HENCE, THE ADDITION MADE ON ACCOUNT OF THE LOANS FROM THE ABOVE PARTIES IS DIRECTED TO BE DELETED. GROUND NO. 3 : DISALLOWANCE OF INTEREST 14. THE AO HELD THAT THE ASSESSEE HAS ADVANCED RS. RS.1,99,35,720/- TO VARIOUS PARTIES AND NO INTEREST HAS BEEN RECEIVED. THE AO CALCULATED INTEREST @ 12% ON THESE ADVANCES AND DISALLOWED AN AMOUNT OF RS.23,25,000/- AND DEDU CTED THE SAME FROM THE INTEREST EXPENSES PAID. 15. BEFORE US, IT WAS SUBMITTED THAT PERUSAL OF THE FINANCIAL STATEMENTS ON RECORD WOULD SHOW THAT THE ASSESSEE H AD CLAIMED ITA NO. 2448/DEL/2017 CO NO. 146/DEL/2017 AMIT KUMAR GARG 7 EXPENDITURE ON INTEREST OF UNSECURED LOAN OF RS. 5, 84,432/- AND RS. 24,56,648/- ON INTEREST ON LOAN RAISED FROM THE BANK. THUS, AGGREGATE INTEREST ON EXPENDITURE CLAIMED IS RS. 30 ,41,080/-. IT WAS SUBMITTED THAT THE SECURED LOAN STOOD AT RS. 1, 77,05,427/- AT THE END OF THE YEAR, WHICH IS A CC LIMIT RISED F ROM THE BANK AGAINST THE HYPOTHESIS OF THE STOCK. IT WAS SUBMITT ED THAT THE STOCK OUTSTANDING LYING AT THE CLOSE OF THE YEAR AS PER THE BALANCE SHEET IS RS. 2,31,50,849/-. IT WAS THUS SUB MITTED THAT APPARENTLY, NO DISALLOWANCE COULD HAVE BEEN MADE IN RESPECT OF INTEREST PAID ON SECURED LOAN RECEIVED FROM THE BAN K AS THE ENTIRE BORROWED MONEY STOOD REPRESENTED BY STOCK AT THE CLOSE OF THE YEAR AND THEREFORE, DISALLOWANCE MADE TO THI S EXTENT WAS ABSOLUTELY UNTENABLE AND THERE CAN BE NO GROUND FOR DIVERSION OF MONEY RAISED FROM THE BANK FOR NON BUSINESS PURP OSES. IT WAS ARGUED THAT THE DISALLOWANCE WAS MADE ON ASSUMP TION THAT ADVANCES HAVE BEEN MADE BY THE ASSESSEE FOR NON BUS INESS PURPOSES AND THEREFORE, INTEREST CLAIMED AS BUSINES S EXPENDITURE HAS BEEN DISALLOWED ON PRESUMPTIVE BASI S IS ABSOLUTELY UNCALLED FOR AND THEREFORE, UNTENABLE. I T WAS SUBMITTED THAT AS REGARDS INTEREST PAID ON UNSECURE D LOAN OF RS. 5,84,432/-, THE SUBMISSION OF THE ASSESSEE WAS THAT SUCH INTEREST HAS BEEN PAID ON UNSECURED LOANS AGGREGATI NG TO RS.63,51,020/- FROM 25 PARTIES. IT WAS SUBMITTED TH AT THE AFORESAID LOAN RAISED STOOD INVESTED IN THE FORM OF STOCK AND ADVANCES PAID TO THE SUPPLIERS AND SUNDRY CREDITORS AND HENCE, NO DISALLOWANCE WAS CALLED FOR. IT WAS SUBMITTED TH AT OUT OF THE AFORESAID LOANS OF RS. 63,51,020/- LOAN AGGREGATING TO RS.52,51,020/- HAD BEEN RAISED IN THE EARLIER YEARS AND A RESPECT OF WHICH, INTEREST HAS BEEN PAID IN EARLIER YEAR ALSO AND ITA NO. 2448/DEL/2017 CO NO. 146/DEL/2017 AMIT KUMAR GARG 8 STANDS ALLOWED AND NO DISALLOWANCE MADE IN THE PREC EDING ASSESSMENT YEAR. 16. THE FACTS ARE UNDISPUTED BY BOTH THE PARTIES. H ENCE, WE PROCEED TO ADJUDICATE THIS ISSUE ON MERITS OF THE C ASE. THE TOTAL EXPENDITURE ON ACCOUNT OF INTEREST CLAIMED BY THE A SSESSEE WAS RS.30,41,080/- OUT OF WHICH AN AMOUNT OF RS.24,56,6 48/- HAS BEEN PAID TO THE BANK ON ACCOUNT OF THE CC LIMIT RI SED. THE REMAINING AMOUNT OF RS.5,84,432/- HAS BEEN PAID NEA RLY TO 25 OUTSTANDING UNSECURED LOAN PARTIES. HENCE, IT CANNO T BE SAID THAT THE AMOUNT DEBITED ON ACCOUNT OF INTEREST HASN T BEEN UTILIZED FOR BUSINESS PURPOSE. THE NOTIONAL INTERES T CALCULATED ON THE ADVANCES GIVEN IS WITHOUT ANY LEGAL BASIS AN D HENCE HEREBY DIRECTED TO BE DELETED. GROUND NO. 4: UNDISCLOSED INVESTMENT 17. DURING THE SURVEY OPERATION, THE REVENUE IMPOUN DED DOCUMENT NO. 78 WHEREIN THE FOLLOWING ENTRIES COUL D BE READ: AMOUNT PERIOD MONTH RATE INTEREST AMOUNT FROM TO 90,58,000 SEP. 2009 OCT. 2011 25 @25 PS 5,66,125/- 50,58,000 NOV. 2011 AUG. 2013 22 @25 PS 2,78,190/- 18. ON ENQUIRY BY THE AO, THE ASSESSEE EXPLAINED TH AT THIS PAGE IS A ROUGH CALCULATION OF INTEREST ON THE ADVA NCE AMOUNT GIVEN TO ONE M/S S.K. TRADERS HANSI. IT WAS EXPLAIN ED THAT DUE TO THE DISPUTE BETWEEN THE PARTIES, MINIMUM INTERES T WAS CALCULATED TO SETTLE THE DISPUTE BUT THE PARTY DID NOT AGREE AND THE ASSESSEE ULTIMATELY RECEIVED THE PRINCIPLE AMOU NT IN THE YEAR 2013-14. IT WAS ALSO STATED THAT AS ON 31.03.2 012 AN AMOUNT OF RS.65,23,720/- WAS SHOWN IN THE BALANCE S HEET IN ITA NO. 2448/DEL/2017 CO NO. 146/DEL/2017 AMIT KUMAR GARG 9 THE SCHEDULE OF LOANS AND ADVANCES. THE ASSESSING O FFICER BROUGHT THE AMOUNT OF RS.90,58,000/- ALONG WITH INT EREST TO TAX. 19. BEFORE US, IT WAS SUBMITTED THAT THIS PAGE PERT AINS TO OLD LOAN RECEIVED FROM ONE M/S S.K. TRADERS WHICH HAS B EEN DULY REFLECTED IN THE REGULAR BOOKS OF ACCOUNTS FROM THE FINANCIAL YEAR 2008-09. THE AMOUNT AS IT 31.03.2009 WAS RS.85 ,23,720/- AND AS ON SEPTEMBER 2009, IT WAS RS.90,23,720/-. IT WAS ARGUED THAT AN AMOUNT OF RS.65,23,720/- HAS BEEN SH OWN IN THE BALANCE SHEET OF THE ASSESSEE UNDER THE HEAD LOANS AND ADVANCES FOR THE ASSESSMENT YEAR 2012-13. THERE IS NO DISPUTE THAT THIS IS A FINANCIAL TRANSACTION INVOLVING RECE IPT OF MONEY EITHER ON CASH BASIS OR MERCANTILE BASIS. 20. HEARD. SINCE, THE ADVANCE OF RS.65,23,720/- HAS BEEN DULY REFLECTED IN THE BALANCE SHEET, NO ADDITION ON THIS ACCOUNT IS REQUIRED. THAT LEAVES US WITH THE QUESTION WHETHER THE INTEREST ACCRUED ON THIS AMOUNT CAN BE BROUGHT TO TAX OR NOT . WE FIND THAT THE ASSESSEE HAS BEEN FOLLOWING MERCANTILE SYS TEM OF ACCOUNTING AND THE FACT OF ADVANCE GIVEN TO M/S S.K . TRADERS IS NOT IN DISPUTE. HENCE, IN TUNE WITH THE ACCOUNTING PROCEDURE AND AS PER THE IMPOUNDED DOCUMENT, THE INTEREST @3% PER ANNUM STANDS ACCRUED TO THE ASSESSEE ON THE ADVANCE OF RS.65,23,720/- WHICH THE ASSESSEE OMITTED TO SHOW A S INTEREST RECEIPT. HENCE, WE CONFIRM INTEREST @ 3% ON THE PRI NCIPLE AMOUNT OF RS.65,23,720/-. THE PRINCIPLE AMOUNT OF RS.65,23,720/- STANDS REFLECTED IN THE NAME OF M/S S.K. TRADERS, IN THE REGULAR BOOKS OF ACCOUNTS OF THE AS SESSEE, HENCE, WE HOLD THAT NO ADDITION OF THIS AMOUNT IS R EQUIRED. ITA NO. 2448/DEL/2017 CO NO. 146/DEL/2017 AMIT KUMAR GARG 10 21 . GROUND NO.5 RELATES TO ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT BASED ON THE IMPOUNDED MATERIAL. THE REL EVANT PART OF THE ASSESSMENT ORDER IS AS UNDER: 8. THE ASSESSEE WAS ASKED TO EXPLAIN THE ENTRIES O N THE PAGES 89, 90, 91 & 92 OF IMPOUNDED DOCUMENT NO. 82. IN RESPON SE TO SAME THE ASSESSEE REPLIED THAT THESE PAGES MAY BELONG TO HIS FATHER SH. PREM KUMAR GARG, WHO IS POPULARLY KNOWN AS AMIT JI/AMIT DHARAM KANTA WALE. THERE IS NO FORCE IN ASSESSEES CONTENTION THESE PA GES ARE INTER RELATED AND ON THE TOP OF PAGE NO. 92 AMIT JI BHIW ANI HAS BEEN WRITTEN. THIS PAGE IS A LEDGER ACCOUNT OF AMIT IN T HE BOOKS OF SAME ONE ELSE. ON THE CREDIT SIDE THE OTHER PERSON HAS C REDITED AMIT (ASSESSEE) ON 20.11.2011 BY AN AMOUNT OF RS.55,25,8 80/- ON ACCOUNT OF 40% SHARE OF PLOT AT ROHTAK ROAD. THIS I S NOTHING BUT THE INVESTMENT. OTHER ENTRIES ALSO REFLECT IN OTHER DAT ES. ON 07.05.2011 THE ASSESSEE HAS PAID ADVANCE AGAINST ROHTAK ROAD PLOT AMOUNTING TO RS.13,33,332/- OTHER ENTRIES OF INVESTMENT ARE 1 0,00,000/- ON 10.07.2011, RS.10,00,000/- ON 16.07.2011, RS.7,50,0 00/- ON 12.11.2011 AND RS.2,50,000/- ON 30.03.2012. IN THIS WAY THE TOTAL INVESTMENT COMES TO RS.98,59,212/- (55,25,880 + 13, 33,332 + 10,00,000 + 7,50,000 + 2,50,000). THE ASSESSEE HAS FAILED TO EXPLAIN THE ENTRIES MENTIONED IN THIS PAGE WHICH IS HIS LEDGER ACCOUNT AND SIMPLY SAID THAT THIS PAPER MAY RELATE TO THIS PAGE WHICH IS HIS LEDGER ACCOUNT AND SIMPLY SAID THAT TH IS PAPER MAY RELATE TO HIS FATHER. THE ASSESSEE HAS NOT BROUGHT ANY EVIDENCES IN THIS REGARD. THESE ENTRIES SHOWING INVESTMENT HAS N OT BEEN SHOWN BY THE ASSESSEE IN HIS RETURN OF INCOME AND THEREFO RE, THE UNEXPLAINED INVESTMENT OF RS.9859212/- IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ITA NO. 2448/DEL/2017 CO NO. 146/DEL/2017 AMIT KUMAR GARG 11 22. DURING THE ARGUMENT BEFORE US, THE LD. AR ARGUE D THAT NO ADDITION IS WARRANTED FOR THE REASON THAT IT DO NOT SHOW ANY INVESTMENT MADE BY THE ASSESSEE DURING THE YEAR. IT WAS VEHEMENTLY ARGUED THAT THERE IS NO SUCH PLOT AT ROH TAK ROAD, AND NO PURCHASE OF PLOT WAS MADE. EVEN, THE DEPARTM ENT COULD NOT PROVE THE EXISTENCE AND PURCHASE OF THE SAID PL OT. IT WAS ARGUED THAT AT THE MOST IT CAN BE CONSIDERED AS SOM E FINANCIAL TRANSACTION AS THERE WAS NARRATION SUCH AS LENE BA AKI. IT WAS ARGUED THAT THERE ARE ENTRIES ON THE LEFT SIDE OF T HE PAPER AND ON THE RIGHT SIDE OF THE PAPER AND THE AO HAS MISLE AD HIMSELF TO TREAT ONE SIDE OF ENTRIES AS THE UNEXPLAINED INVEST MENT OF THE ASSESSEE. HE WAS ALSO ARGUED THAT THE DOCUMENT DO N OT BELONG TO THE ASSESSEE HENCE NO ADDITION IN THE HANDS OF T HE ASSESSEE IS WARRANTED. 23. ON THE OTHER HAND, THE LD. DR ARGUED THAT THE R EGULAR FLOW OF THE ACCOUNTS AND THE EXACTNESS OF THE FIGURES WI LL REVEAL THAT THIS IS NOT A DUMB DOCUMENT AND THAT THIS DOCUMENT IS A CUSTODIAN OF THE BUSINESS TRANSACTIONS AND THE INVE STMENTS OF THE ASSESSEE. IT WAS ARGUED THAT THE ONUS IS ON THE ASSESSEE TO PROVE THAT THE DOCUMENT WHICH WAS FOUND AT THE PREM ISES OF THE ASSESSEE DOESNT BELONG TO THEM. IT WAS ARGUED THAT THE NOTING OF ROHTAK ROAD JAGAH ON THE DOCUMENT PROVES THE I NVESTMENT AT ROHTAK ROAD. REGARDING THE OTHER ENTRIES, HE ARG UED THAT THEY ALSO PERTAIN TO THE PURCHASE OF PROPERTY AND T HE PAYMENTS MADE ON DIFFERENT DATES FOR ACQUISITION OF SUCH PRO PERTY. HE ARGUED THAT THE ADDITION HAS BEEN RIGHTLY MADE HENC E NEEDS TO BE CONFIRMED. ITA NO. 2448/DEL/2017 CO NO. 146/DEL/2017 AMIT KUMAR GARG 12 24. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PER USED THE MATERIAL AVAILABLE ON RECORD. ITA NO. 2448/DEL/2017 CO NO. 146/DEL/2017 AMIT KUMAR GARG 13 25. WE FIND THAT THE AMOUNT OF RS.55,72,043/- BEING THE TRANSACTIONS ON BOTH SIDES OF THE PAPER CAN CERTAIN LY BE AN ABSOLUTE FINANCIAL TRANSACTION. THIS FIGURE PERTAIN TO THE FINANCIAL YEAR 2009-10 (AY 2010-11). HOWEVER, WE AL SO FIND THAT THE REVENUE HAS NOT BROUGHT ANYTHING ON RECORD AS TO WHAT ARE THESE TRANSACTIONS. WHILE THE ASSESSEE EXPLAINS THAT THERE WAS NO PURCHASE OF ALLEGED PLOT AT ROHTAK ROAD, THE REVENUE WENT ON MAKING ADDITION ON ACCOUNT OF PURCHASE OF A PLOT WHICH HAVE NOT BEEN PROVED. THE FIGURES REFLECT AS UNDER: LEFT SIDE RIGHT SIDE S. NO. DATE AMOUNT NARRATION DATE AMOUNT 1. 0 7. 0 5.2011 13,33,332 BAY ANA ROHTAK ROAD PLOT 27. 0 5.2011 1,00,000 2. 10. 0 7.2011 10,00,000 BAYANA TUKAN MANDI 24. 0 8.2011 10,00,000 3. 16. 0 7.2011 10,00,000 NO NARRATION 0 5. 0 9.2011 10,00,000 4. 12.11.2011 7,50,000 BAYANA JAMAA 22. 0 3.2012 7,50,000 5. 30. 0 3.2012 2,50,000 NO NARRATION 25. 0 3.2012 5,00,000 6. 14. 0 6.2012 8,00,000 NO NARRATION 0 5. 0 4.2012 7,00,000 7. 23. 0 4.2012 5,00,000 NO NARRATION 0 2. 0 3.2013 5,50,000 8. 0 1. 0 7.2011 3,15,631 AMIT JI PURCHI 9. 20. 0 9.2013 4,98,600 HISAR BYAZ TOTAL RS.64,47,603/- TOTAL RS.64,47,603/- 26. WE FIND THAT THE TOTAL OF THE SIDES IS RS.64,47 ,603/-. THE AMOUNTS VARY FROM ASSESSMENT YEARS 2012-13 TO 2014- 15. THIS AT THE MOST COULD BE A COMPREHENSIVE SHEET CONTAINI NG THE TRANSACTIONS OF THE ASSESSEE OVER A PERIOD OF THREE YEARS. IN SUCH CIRCUMSTANCES, THE REVENUE HAS TO BROUGHT ON R ECORD, THE SUM AND SUBSTANCE OF SUCH TRANSACTIONS MENTIONED ON THE DOCUMENT. WE HAVE SPECIFICALLY ASKED THE REVENUE AS TO THE STATEMENT RECORDED ON THE DATE OF SURVEY AND THE RE PLY OF THE ITA NO. 2448/DEL/2017 CO NO. 146/DEL/2017 AMIT KUMAR GARG 14 ASSESSEE PERTAINING TO THESE TRANSACTIONS ON THE DA TE OF SURVEY. WE FIND NO MENTION OF STATEMENT RECORDED AT THE TIM E OF SURVEY EITHER ON THE ASSESSMENT ORDER OR IN THE ORDER OF T HE LD. CIT (A). NO STATEMENT RECORDED AT THE TIME OF THE SURVE Y HAS BEEN PRODUCED EVEN BEFORE US AS TO WHAT THE TRANSACTIONS PERTAIN TO. NO ENQUIRIES HAVE BEEN CONDUCTED BY THE REVENUE TO SUBSTANTIATE TO UNEXPLAINED INVESTMENTS. THE FIGURE S PERTAINING TO THREE DIFFERENT YEARS CANNOT BE BROUGHT TO TAXAT ION WITHOUT PROVING AS TO WHAT TYPE OF TRANSACTIONS THE DOCUMEN T SIGNIFIES. HENCE, IN THE ABSENCE OF ANY PRIMARY, SECONDARY OR CORROBORATIVE EVIDENCES, NO ADDITION CAN BE MADE BA SED ON THE IMPOUNDED DOCUMENT. THE REVENUE COULD NOT EVEN PROV E WITH CERTAINTY TO WHOM THE DOCUMENT BELONGS NOR TESTED T HE HAND WRITING ON THE DOCUMENT EITHER BY THE WAY OF STATEM ENT OR BY THE WAY OF FORENSICS. HENCE, KEEPING IN VIEW THE EN TIRE GAMUT OF EVENTS PECULIAR TO THE FACTS OF THIS CASE, WE HE REBY HOLD THAT NO ADDITION IS WARRANTED IN THE HANDS OF THE ASSESS EE FOR THE INSTANT YEAR. 27. WITH REGARD TO THE CROSS OBJECTION OF SUSTAININ G OF RS.11,13,298/- MADE BY THE AO ON ACCOUNT OF ESTIMAT ION OF GP, HAVING HEARD THE ARGUMENTS AND KEEPING IN VIEW THE MARKET AVERAGES, THE GP IS REDUCED TO 25% FROM 35% ON THE SALE OF SCRAP AND FROM 15% TO 10% ON THE SALE OF OTHER ELEC TRONIC GOODS. THE AO IS HEREBY DIRECTED TO RE-COMPUTE THE TAXABLE INCOME TAKING INTO CONSIDERATION THE REVISED GP RAT E. ITA NO. 2448/DEL/2017 CO NO. 146/DEL/2017 AMIT KUMAR GARG 15 28. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND CROSS OBJECTION BY THE ASSESSED PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/08/2020. SD/- SD/- (SUSHMA CHOWLA) (DR. B. R. R. KUMAR) VICE PRESIDENT ACCOU NTANT MEMBER DATED: 10/08/2020 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR