Uttaranchal Tourist Motels Private Limited, Chandigarh V. ITO, Chandigarh

ITA 269/CHANDI/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57583 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 16-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIGYAN ARORA
• Assessee Lawyers: N K SAINI
• Keywords: Unexplained investment; Income from undisclosed sources; Opportunity of being heard; Assessment record
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI D.K.SRIVASTAVA, ACCOUNTANT MEMBER ITA NO. 274/CHD/2011 ASSESSMENT YEAR: 2007-08 THE ITO, VS M/S UTTRANCHAL TOURIST MOTELS PVT LTD ., WARD-3(2), CHANDIGARH CHANDIGARH PAN NO. AAACU8017C & ITA NO. 269/CHD/2011 ASSESSMENT YEAR: 2007-08 M/S UTTRANCHAL TOURIST MOTELS PVT LTD., VS THE ITO, CHANDIGARH WARD-3(2), CHANDIGARH PAN NO. AAACU8017C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K. SAINI RESPONDENT BY : SHRI VIGYAN ARORA DATE OF HEARING : 12.01.2012 DATE OF PRONOUNCEMENT : 12.01.2012 ORDER PER H.L.KARWA, VP THESE TWO APPEALS BY THE REVENUE AND ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT(A) CHANDIGARH DATED 27.9.2010 RELA TING TO ASSESSMENT YEAR 2007-08. 2 2. FIRSTLY, WE WILL TAKE UP REVENUES APPEAL I.E. I TA NO. 274/CHD/2011 RELATING TO ASSESSMENT YEAR 2007-08. 3. GROUND NO.1 OF THE APPEAL READS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION O F RS. 8 LACS MADE ON ACCOUNT OF UNEXPLAINED LOAN / DEPOSITS IN THE NAME OF SHRI SUDHIR MEHRA, AS IT IS SEEN THAT THERE ARE CASH DEPOSITS OF RS. 8 LACS IMMEDIATELY BEFORE THE ISSUANCE OF THE CHEQUE OF AN EQUAL AMOUNT AND THE SOURCE OF CASH DEPOSITS REMAINS TO BE EXPLAINED. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE COMPANY IS RUNNING A HOTEL IN MUSSORRIE. THE LD. AR NOTICED THAT SHRI SUDHIR MEHRA, PROPRIETOR, SUNDER FRUIT CO. 133/107, O BLOCK, SU BZI MANDI, KIDWAI NAGAR, KANPUR, ADVANCED LOAN OF RS. 8 LAC TO THE AS SESSEE COMPANY M/S UTTRANCHAAL TOURS AND HOTELS P. LTD VIDE CHEQUE NO. 130554 DATED 8.9.2006 OF J & K BANK LTD, KANPUR NO.0262 AND HIS PAN NUMBER IS AJJPM6310P. COPY OF THE RETURN FOR THE ASSESSMENT Y EAR 2009-10 WAS ALSO FURNISHED. ON PERUSAL OF THE BANK ACCOUNT OF M/S S UNDER FRUIT COMPANY, PROP SHRI SUDHIR MEHRA,KANPUR FOR THE YEAR 2006-07, THE ASSESSING OFFICER FOUND THAT THERE WAS OPENING BALANCE OF RS. 9840.92 ON 1.4.2006 ONLY. ON 4.9.2006, CASH WAS DEPOSITED RS. 5.50 LACS AND CHEQ UE OF RS. 8 LACS WAS ISSUED ON 8.9.2006 AND THERE WAS NO OTHER ENTRY EXC EPT RECEIPT AND PAYMENT OF ENTRIES REGARDING THIS LOAN OF RS. 8 LACS. THE A SSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE SOURCE OF DEPOSIT OF RS . 8 LACS. IN THIS REGARD, 3 THE ASSESSEE SUBMITTED THAT SHRI MEHRA IS DEALING IN FRUITS AT KANPUR AND THERE WERE SO MANY CASH ENTRIES RELATING TO THE BUS INESS AND THIS CASH WAS DEPOSITED OUT OF THAT DEPOSITS. THE ASSESSING OFF ICER OBSERVED THAT THERE WERE NO OTHER ENTRY IN THE BANK ACCOUNT EXCEPT THIS CASH DEPOSIT AND LOAN RELATED ENTRIES. THEREFORE, SOURCE OF DEPOSIT OF R S. 8 LAC WAS NOT ACCEPTED BY THE ASSESSING OFFICER HOLDING THAT RS. 8 LACS WA S ASSESSEES OWN INCOME FROM UNDISCLOSED SOURCES. CONSEQUENTLY, THE ASSESS ING OFFICER ADDED A SUM OF RS. 8 LACS TO THE TOTAL INCOME OF THE ASSESS EE. 5. ON APPEAL, THE CIT(A) DELETED THE ADDITION OBSER VING AS UNDER;- 6. I HAVE CAREFULLY CONSIDERED RIVAL CONTENTIONS AND MATERIAL AVAILABLE ON RECORD. IT IS CLEAR FROM THE ASSESSMENT RECORD THAT THE APPELLANT HAD GIVEN A CERTIFIED COP Y OF PAN OF SHIR SUDHIR MEHRA AND A CERTIFICATE TO THE EFFECT T HAT THE LOAN WAS INDEED PAID VIDE CHEQUE NO. 130554 THROUGH TERM LOAN RELEASED BY STATE BANK OF PATIALA, SECTOR 17, CHAND IGARH VIDE TERM LOAN ACCOUNT NO. 05012449212 OF STATE BANK OF PATIALA, CHANDIGARH AND THAT HE WAS ASSESSED IN IT, RANGE-3, KANPUR. A COPY OF ITR FOR ASSESSMENT YEAR 2009-10 SHOWING I NCOME OF RS. 3,21,960/- HAS ALSO BEEN FILED. ALL THIS DEFIN ITELY ESTABLISHES THE IDENTITY AND CREDITWORTHINESS OF TH E LENDER. THE ASSESSING OFFICER COULD HAVE INFORMED THE IT RA NGE-3, KANPUR ABOUT THE TRANSACTION FOR ANY ACTION REQUIRE D TO BE TAKEN BECAUSE AN INCOME TAX ASSESSEE IS CERTIFYING BY GIVING AN AFFIDAVIT SHOWING BANK STATEMENT TO PROVE THAT H E LEND A CERTAIN AMOUNT TO THE COMPANY. I DO NOT SEE ANY PL AUSIBLE REASON FOR DISBELIEVING WHEN THE ESSENTIAL REQUIREM ENTS ARE MORE OR LESS FULFILLED. WHATEVER LITTLE WAS LEFT CO ULD BE DONE BY ITO, RANGE-3, KANPUR IN THE CASE OF SHRI SUDHIR MEHRA. 4 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS SEEN THAT DUR ING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED AN AFFIDAVIT OF MRS SUDHIR MEHRA ALONGWITH CASH BOOK ACCOUNT OF M/S SUNDER FRUIT COM PANY FROM WHICH HE HAS WITHDRAWN THE MONEY AND BANK STATEMENT OF THE L ENDER FOR THE FIRST TIME. IT IS APPARENT FROM THE RECORD THAT THE ABOVE TWO DOCUMENTS WERE NEVER PRODUCED BEFORE THE ASSESSING OFFICER NOR ANY OPPORTUNITY WAS GIVEN BY THE ASSESSING OFFICER TO COMMENT UPON THESE TWO DOCUMENTS. WE, THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY , THINK IT APPROPRIATE TO REMAND THIS ISSUE TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER AFFOR DING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THIS GROUND OF APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES. 7. GROUND NO.2 READS AS UNDER:- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 5 LACS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF SHARES IN THE NAME OF SHRI SANJAY KUMAR TUTEJA, DIRECTOR OF THE COMPANY AS IT IS SEEN THAT THERE ARE CASH DEPOSITS OF RS. 5 LACS IMMEDIATELY BEFORE THE ISSUANCE OF THE CHEQUE OF AN EQUAL AMOUN T AND THE SOURCE OF CASH DEPOSITS REMAINS TO BE EXPLAINED. 8. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT SHRI SANJAY KUMAR TUTEJA PARTNER OF M/S TOMY FRUIT CO. 133/107, O BLOCK, SUBZI MANDI, KIDWAI NAGAR, KANP UR PAID RS. 5 LACS TO M/S UTTRANCHAL TOURS & MOTELS (P) LTD THROUGH CH EQUE NO. 1284999 5 DATED 26.7.2006 OF HDFC BANK, KANPUR. HE WAS BEING ASSESSED TO TAX AT KANPUR AND HE HAD WITHDRAWN THIS AMOUNT FROM M/S TO MY FRUIT COMPANY, NEAR SBI, KANPUR. THE ASSESSING OFFICER NOTICED TH AT EACH WITHDRAWAL WAS PRECEDED BY CASH DEPOSIT OF EQUAL AMOUNT SO WAS WITH RESPECT TO THE IMPUGNED AMOUNT. THE ASSESSING OFFICER THEREFORE, T REATED THE AMOUNT IN QUESTION AN UNDISCLOSED INCOME OF THE ASSESSEE AND CONSEQUENTLY WAS ADDED TO THE TOTAL INCOME. 9. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) AND SUBMITTE D THAT SHRI SANJAY KUMAR TUTEJA HAD PURCHASED THE SHARES OF THE COMPAN Y AMOUNTING TO RS. 5 LACS THROUGH CHEQUE NO. 1284999 DATED 26.7.2006 OF HDFC BANK LTD, KANPUR. FURTHER, IT WAS SUBMITTED THAT MS SANJAY K UMAR TUTEJA WAS ALSO INCOME TAX PAYEE AND HE HAD GIVEN HIS CONFIRMATION AND HIS INCOME TAX PERMANENT ACCOUNT NUMBER WITH WARD. IT WAS ALSO S TATED BY SHRI SANJAY KUMAR TUTEJA THAT HE WAS AN ARTHI AND COMMISSION AGENT OF FRUITS AND VEGETABLES IN SUBZI MANDI OF KANPUR AND HAD WITHDRA WN THIS MONEY FROM M/S TOMY FRUITS COMPANY, KANPUR. AN AFFIDAVIT FROM SHRI SANJAY TUTEJA CERTIFYING THAT HE HAD PURCHASED THE SHARE OF RS. 5 LACS THROUGH CHEQUE NO. 1284999 DATED 26.7.2006 OF HDFC BANK LTD, KANPUR AN D THAT HE IS BEING ASSESSED BY THE INCOME TAX RANGE-III, KANPUR VIDE P AN NO. AAYPT7599K WAS ALSO SUBMITTED. 10. THE CIT(A) DELETED THE ADDITION STATING THAT TH E LENDER IS EXISTING INCOME TAX ASSESSEE. IN THIS REGARD, THE LENDER H AS FURNISHED PAN NUMBER, COPY OF INCOME TAX RETURN SHOWING AN INCOME OF RS. 8,63,394/-. 6 THEREFORE, THE CIT(A) OBSERVED THAT THE ASSESSEE HA S PROVED THE IDENTITY AND CREDITWORTHINESS OF THE LENDER. HE ALSO OBSERVE D THAT THE TRANSACTIONS ARE THROUGH BANKING CHANNEL. RELYING UPON THE DECI SION OF HON'BLE SUPREME COURT IN THE CASE OF CIT V LOVELY EXPORTS P VT LTD (2008) 216 CTR 195 (SC) HELD THAT THE ADDITION WAS NOT JUSTIFI ED. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE AL SO PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THIS CASE, THE ASSESSEE HAS PROVED THE IDENTITY AND CREDITWORTHINESS OF THE LENDER AS WELL AS GENUINENESS OF THE TRANSACTION. IN OUR VIEW, THE ASSESSEE HAS DISCHAR GED THE ONUS OF PROVING THE NATURE AND SOURCE OF DEPOSIT U/S 68 OF THE INCO ME TAX ACT, 1961 (IN SHORT 'THE ACT'). THERE IS NO DISPUTE THAT SHRI SA NJAY KUMAR TUTEJA WAS BEING ASSESSED TO TAX AT KANPUR AND HE HAD WITHDRAW N THIS MONEY FROM M/S TOMY FURIT COMPANY, NEAR SBI, KANPUR. . HE HAS AL SO FILED AN AFFIDAVIT CERTIFYING THAT HE HAD PURCHASED THE SHARES OF RS. 5 LAC THROUGH CHEQUE NO. 1284999 DATED 26.7.2009 OF HDFC BANK, KANPUR. CONS IDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE DO NOT SEE ANY VALID GROUND IN INTERFERING WITH THE ORDER OF THE CIT(A) ON THIS ISSUE. ACCORDINGLY, WE UPHOLD THE ORDER OF CIT(A) AND DISMISS GROUND NO.2 OF THE APPEAL. 12. GROUND NO.3 READS AS UNDER:- 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 2.5 LACS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF SHARES IN THE NAME OF SMT. SHYAMA TUTEJ A, DIRECTOR OF THE COMPANY, FOR WHICH NO SOURCE OF PAYMENT WAS FURNISHED BEFORE THE ASSESSING OFFICER. 7 13. WHILE FRAMING THE ASSESSMENT ORDER, THE ASSESSI NG OFFICER OBSERVED THAT SMT. SHAYAMA TUTEJA, DIRECTOR OF THE COMPANY, CONTRIBUTED RS. 2.5 LACS TOWARDS SHARE HOLDING FOR WHICH NO SOURCE OF T HIS PAYMENT WAS FURNISHED. AS SUCH, THIS AMOUNT WAS ALSO ADDED AS INVESTMENT OUT OF THE UNDISCLOSED INCOME OF THE ASSESSEE. 14. ON APPEAL, THE CIT(A) DELETED THE ADDITION OBSE RVING AS UNDER:- 12. DURING APPELLATE PROCEEDINGS, THE LD. COUNSEL SUBMITTED THAT THE AMOUNT WAS GIVEN THROUGH CHEQUE NO. 207887 DATED 76.1.2007 OF HDFC BANK LTD, KANPUR. SHE ALSO GAVE THE CONFIRMATION THAT SHE IS AN INCOME TAX ASSESSEE FOR WARD 3(2), KANPUR ALONG WITH HER INCOME TAX PERMANENT ACCOUNT NUMBER, FURTHER, AN AFFIDAVIT OF SHYAMA TUTEJA ALONGWITH TH E CASH BOOK ACCOUNT OF M/S DILIP CHAND SUNDER LAL OF SUBZI MAND I, KANPUR WAS ALSO SUBMITTED. MRS SHYAMA TUTEJA IS A PROPRIE TOR OF THIS FIRM. THE APPELLANT ALSO SUBMITTED A JUDGMENT OF M /S BHAV SHAKTI STEEL MINES PVT LTD VS CIT, 179 TAXMAN 25 W HEREIN HON'BLE DELHI HIGH COURT AFTER QUOTING APEX COURT I N CIT VS LOVELY EXPORTS PVT LTD 216 CTR 195 HELD AS UNDER:- IN ANY EVENT WE ALSO NOTE THAT THE SUPREME COURT I N THE CASE OF CIT V LOVELY EXPORTS (P) LTD [2008] 126 CTR 195 CONSIDERED THE QUESTION AS TO WHETHER THE SHARE APPLICATION MONEY CAN BE REGARDED AS UNDISCLOSED INCOME U/S 68 OF THE INCOME TAX ACT, 1961. THE SUPREME COURT DISMISSED THE SLP OBSERVED THAT IF THE SHARE MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THEN THE DEPARTMENT IS FREE TO PROCEED TO ASSESS THEM INDIVIDUALLY, IN ACCORDANCE WITH LAW. THE SUPREME COURT DID NOT FIND ANY INFIRMITY WITH THE IMPUGNED JUDGMENT OF THE HIGH COURT WHICH WAS A COMMON ORDER 8 ALONG WITH THE DECISION IN CIT V DIVINE LEASING AND FINANCE LTD [2008] 299 ITR 268 (DELHI). SINCE THE CIT(A) HAS NOT ONLY FOUND THAT THE IDENTITY OF EACH OF THE SHAREHOLDERS STOOD ESTABLISHED, BUT HAS ALSO EXAMINED THE FACT THAT EACH OF THEM WERE INCOME TAX ASSESSEES AND HAD DISCLOSED THE SHARE APPLICATION MONEY IN THEIR ACCOUNTS WHICH WERE DULY REFLECTED I N THEIR INCOME TAX RETURN AS WELL AS IN THEIR BALANCE SHEETS. IN THESE CIRCUMSTANCES WE SEE MERIT IN WHA T THE LD. COUNSEL FOR THE APPELLANT HAS SUBMITTED THA T WE FEEL THAT THE TRIBUNAL WAS UNJUSTIFIED IN COMING TO THE CONCLUSION THAT THE CIT(A) HAD NOT CONSIDERED THE MATTER IN THE RIGHT PERSPECTIVE. 13. IN VIEW OF THE ABOVE DISCUSSION, THE ADDITION O F RS. 2.5 LACS IS DELETED ALLOWING THIS GROUND OF APPEAL. 15. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF CIT(A) ON THIS ISSUE. IN OUR CO NSIDERED VIEW, THE LD. CIT(A) HAS CORRECTLY OBSERVED THAT THE ASSESSEE HAS EXPLAINED THE NATURE AND SOURCE OF THE DEPOSIT. THIS AMOUNT WAS GIVEN T HROUGH CHEQUE NO. 207887 DATED 6.1.2007 OF HDFC BANK LTD, KANPUR. SM T. SHYAMA TUTEJA ALSO SUBMITTED THE CONFIRMATION STATING THAT SHE IS AN INCOME TAX ASSESSEE OF WARD 3(2), KANPUR ALONGWITH HER INCOME TAX PERMA NENT ACCOUNT NUMBER. SHE HAS ALSO SUBMITTED AN AFFIDAVIT ALONG WITH CASH BOOK ACCOUNT OF M/S DILIP CHAND SUNDER LAL OF SUBZI MAND I, KANPUR WHEREIN SHE IS A PROPRIETOR OF THE SAID FIRM. IN OUR VIEW, THE CIT(A) HAS CORRECTLY FOLLOWED THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS PVT LTD (2008) 216 CTR 195 A ND ALSO THE RATIO LAID DOWN BY THE HON'BLE DELHI HIGH COURT IN M/S BH AV SHAKTI STEEL MINES 9 PVT LTD V CIT, 179 TAXMAN 25. IN THIS CASE THE AS SESSEE HAS PROVED THE IDENTITY OF THE CREDITOR, CAPACITY OF THE CREDITOR AND GENUINENESS OF THE TRANSACTIONS. 16. IN VIEW OF THE ABOVE, WE DECLINE TO INTERFERE W ITH THE DECISION OF THE CIT(A) ON THIS ISSUE. THE APPEAL OF THE REVENUE IS PARTLY ALLOWED . 17. ITA NO. 269/CHD/2011 18. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND IN ITA NO. 269/CHD/2011. THE ADDITION OF RS. 8 LACS ON ACCOUNT OF UNEXPLAINE D CASH DEPOSIT IN BANK ACCOUNTS IS AGAINST THE FACTS OF THE CASE. 19. THE ASSESSING OFFICER HAS DISCUSSED THIS ISSUE IN PARA 7 OF THE ASSESSMENT ORDER DATED 13.12.2009, WHICH READS AS U NDER:- 7. IN THE COPY OF ACCOUNT OF THE COMPANY WITH STAT E BANK OF PATIALA, SECTOR 17-C, CHANDIGARH (ACCOUNT NO. 65012453375) THERE ARE TWO CASH DEPOSIT ENTRIES OF RS. 6 LACS AND 2 LACS ON 28.3.2007. THE ASSESSEE WAS ASK ED TO EXPLAIN THE SOURCE OF RS. 8 LACS CASH DEPOSIT, BUT IT COULD NOT EXPLAIN THE SOURCE OF THESE CASH DEPOSIT OF RS. 8 L ACS. HENCE THE SAME IS ADDED TO THE TOTAL INCOME OF THE ASSESS EE BEING CASH DEPOSITS OUT OF INCOME FROM UNDISCLOSED SOURCE S OF THE ASSESSEE. 20. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION FO R THE REASONS STATED IN PARA 16 OF THE ORDER. 10 21. WE HAVE HEARD THE RIVAL SUBMISSIONS. SHRI VIGY AN ARORA, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AMOUNT OF RS. 9 LACS WAS WITHDRAWN ON 13.12.2006 BY SHRI ASHOK SETHI, DIRECT OR OF THE COMPANY THROUGH CHEQUE OF STATE BANK OF PATIALA, SECTOR 17, CHANDIGARH FOR BUSINESS PURPOSES BECAUSE THE HOTEL IS SITUATED IN MUSSORRIE AND FOR DAY TO DAY RUNNING OF THE HOTEL, THE ASSESSEE WAS IN NEED OF MONEY. HE FURTHER SUBMITTED THAT SEPTEMBER TO MARCH ARE THE LEAN PERI OD FOR HOTEL BUSINESS IN MUSSORRIE. SO, THE ASSESSEE COMPANY WAS IN NEED OF MONEY FOR RUNNING THE HOTEL. SHRI VIGYAN ARORA, LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE ASSESSEE HAD DEPOSITED RS. 8 LACS I .E. RS. 6 LACS AND RS. 2 LACS OUT OF RS. 9 LACS WITHDRAWN ON 13.12.2006. IT IS OBSERVED THAT THERE WERE TWO CASH DEPOSITS OF RS. 6 LACS AND RS. 2 LACS ON 28.3.2007. ACCORDING TO SHRI VIGYAN ARORA, LD. COUNSEL FOR THE ASSESSEE, THESE DEPOSITS WERE MADE BY SHRI ASHOK SETHI, DIRECTOR OF THE COMPANY FOR BUSINESS PURPOSES BECAUSE THE HOTEL IS SITUATED IN MUSSORRIE AND FOR DAY- TO-DAY RUNNING OF THE HOTEL, THE ASSESSEE WAS IN NE ED OF MONEY. IN OUR CONSIDERED VIEW, THERE IS MERIT IN THE ABOVE EXPLAN ATION OF THE ASSESSEE. IN FACT, THERE IS NO MATERIAL ON RECORD TO SHOW THA T THE AMOUNT OF RS. 9 LACS WITHDRAWN BY SHRI ASHOK SETHI, THE DIRECTOR OF THE COMPANY WAS INVESTED SOMEWHERE ELSE. FURTHERMORE, THERE IS HARDLY THREE MONTHS TIME GAP IN BETWEEN THE WITHDRAWAL OF THE AMOUNT AND THE AMOUNT DEPOSITED IN THE BANK ACCOUNT AND, THEREFORE, THE EXPLANATION TENDER ED BY THE ASSESSEE APPEARS TO BE PLAUSIBLE AND CONVINCING. IN OUR VIE W, THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER MERELY ON THE BASIS O F SURMISES AND CONJECTURES. WE ALSO OBSERVE THAT LD. CIT(A) HAS N OT CORRECTLY APPRECIATED THE EXPLANATION OF THE ASSESSEE AND CON FIRMED THE ADDITION 11 WITHOUT ASSIGNING ANY COGENT REASONS. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE DELETE THE AD DITION OF RS. 8 LACS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). 22. IN THE RESULT APPEAL OF THE REVENUE I.E. ITA NO . 274/CHD/2011 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES WHILE ASSES SEES APPEAL I.E. ITA NO. 269/CHD/2011 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF JANUARY, 2012. SD/- SD/- (D.K.SRIVASTAVA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 12 TH JANUARY, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR