DCIT, Bangalore V. Smt. Mamatharaj, Bangalore

ITA 297/BANG/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0630 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-01-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 29-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BIJOY KUMAR
• Assessee Lawyers: C RAMESH
• Keywords: Income from undisclosed sources; Search and seizure; Peak credit; Additional evidence; Bad and doubtful debts
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N. BARATHVAJA SANKAR, VICE PRESIDENT AND SHRI N.V. VASUDEVAN, JUDICIAL MEMBER ITA NO.150/BANG/2012 ASSESSMENT YEAR : 2009-10 MRS. MAMATHARAJ, NO.50, SREE SANJEEVENI, FORT C STREET, S.K.R. ROAD, KALASIPALYAM, BANGALORE. PAN : ADDPR 6611G VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1), BANGALORE. APPELLANT RESPONDENT ITA NOS.297 TO 302/BANG/2012 ASSESSMENT YEAR : 2003-04, 2005-06 TO 2009-10 THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1), BANGALORE. VS. MRS. MAMATHARAJ, NO.50, SREE SANJEEVENI, FORT C STREET, S.K.R. ROAD, KALASIPALYAM, BANGALORE. PAN : ADDPR 6611G APPELLANT RESPONDENT ASSESSEE BY : SHRI C. RAMESH, C.A. REVENUE BY : SHRI BIJOY KUMAR PANDA, ADDL.CIT(DR) DATE OF HEARING : 30.01.2013 DATE OF PRONOUNCEMENT : 08.02.2013 ITA NOS.150, 297 TO 302/B/12 PAGE 2 OF 17 O R D E R PER BENCH ITA NOS.297 TO 302/BANG/2012 ARE APPEALS BY THE RE VENUE AGAINST THE COMMON ORDER DATED 30.12.2011 OF THE CIT(APPEAL S)-VI, BANGALORE RELATING TO ASSESSMENT YEARS 2003-04, 2005-06 TO 20 09-10. ITA NO.150/BANGA/2012 IS AN APPEAL BY THE ASSESSEE AGAI NST THE SAME COMMON ORDER OF THE CIT(APPEALS) DATED 30.12.2011 R ELATING TO ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE IS AN INDIVIDUAL. SHE IS THE WIFE OF SHRI R.V. DEVARAJ, WHO IS A SENIOR PARTY MEMBER OF A RECOGNIZED POLITI CAL PARTY. THERE WAS A SEARCH AND SEIZURE OPERATION CARRIED OUT BY THE REV ENUE U/S. 132 OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'T HE ACT'] IN THE CASE OF SHRI R.V. DEVARAJ. SEARCH WAS CONDUCTED ON 6.1.200 9. IN THE COURSE OF SEARCH, A DIARY MARKED AS A/RVD/08 WAS FOUND. WHEN SHRI DEVARAJ WAS QUESTION ABOUT THIS SEIZED DIARY, HE ADMITTED THAT THE SAME BELONGED TO HIS WIFE AND THAT IT CONTAINED DETAILS OF TRANSACTIONS RELATING TO MONEY LENDING BUSINESS CARRIED ON BY HER IN CASH. IT IS NOT DISC LOSED BY HER IN THE RETURNS OF INCOME FILED. THE QUESTION AND ANSWER ON THIS D OCUMENT WAS AS FOLLOWS:- PLEASE GO THROUGH THE SEIZED MATERIALS MARKED AS RVD/08- 09/1 TO - AND EXPLAIN THE CONTENTS IN EACH OF THE EXHIBI T. A/RVD/08-09/7--- THESE ARE THE DETAILS OF CHEQUES R ECEIVED BY MY WIFE FOR THE LOANS ADVANCED BY HER. I HAVE CONSU LTED MY WIFE TO REPLY TO THIS EXHIBIT- MY WIFE IS NOT AWARE OF T HE AMOUNTS INVESTED BY HER, AND THE RATES OF INTEREST ALSO. WE WILL GET BACK TO YOU LATER. I WOULD LIKE TO CLARIFY THAT MY WIFE HAS STATED THAT SHE HAS INVESTED AN AMOUNT OF RS.65 LAKHS TO 70 LAKHS F OR ADVANCING LOANS. THE RATES OF INTEREST ARE NOT PRE-DETERMINED . ON RETURN OF ITA NOS.150, 297 TO 302/B/12 PAGE 3 OF 17 THE LOAN SHE WILL BE GETTING A PROFIT. PRESENTLY NO LOANS HAVE BEEN RETURNED BACK BY ANY OF THE PARTIES. THE DETAILS OF THE PARTIES WILL BE TOLD LATER. A/RVD/08-09/8 - THIS IS A DIARY WHIC H BELONGS TO MY WIFE. 3. SINCE THE MATERIAL FOUND IN THE COURSE OF SEARCH OF SHRI R.V. DEVARAJ BELONGED TO HIS WIFE, SMT. MAMATHA RAJ, THE ASSESSE E IN ALL THESE APPEALS; PROCEEDINGS U/S. 153C OF THE ACT WERE INITIATED AGA INST THE ASSESSEE FOR THE ASSESSMENT YEARS 2003-04 TO 2009-10. BASED ON THE ENTRIES IN THE SEIZED DIARY, THE AO CAME TO THE CONCLUSION THAT TH E ASSESSEE HAD ADVANCED LOAN OF A SUM OF RS.2,16,53,000 AND EARNED INTEREST OF RS.81,47,700 FOR ALL THE AFORESAID ASSESSMENT YEARS AS PER THE TABLE GIVEN BELOW:- F.Y. A.Y. PRINCIPAL INTEREST TOTAL 2002-03 2003-04 2,30,000 27,600 2,57,600 2003-04 2004-05 --- 55,200 55,200 2004-05 2005-06 95,000 87,200 1,82,200 2005-06 2006-07 24,60,000 6,49,200 31,09,200 2006-07 2007-08 41,68,000 15,77,400 57,45,400 2007-08 2008-09 35,00,000 24,47,200 59,47,200 2008-09 2009-10 1,12,00,000 33,03,900 1,45,03,900 GRAND TOTAL 2,16,53,000 81,47,700 2,98,00,700 ACCORDING TO THE AO, THE ENTRIES IN THE DIARY CONTA INED DETAILS OF LOANS GIVEN TO VARIOUS PERSONS AND INTEREST CHARGED FROM THEM AND THE ADDITION ON ACCOUNT OF UNDISCLOSED INCOME AS PROPOSED TO BE MADE BY THE AO AS ABOVE IS BASED ON THE ENTRIES IN THE SEIZED DIARY. 4. IN REPLY, THE ASSESSEE SUBMITTED THAT THE QUANTI FICATION OF INCOME AS DETERMINED BY THE AO WAS NOT CORRECT. THE ASSESSEE SUBMITTED THAT ITA NOS.150, 297 TO 302/B/12 PAGE 4 OF 17 BECAUSE HER HUSBAND WAS A PROMINENT POLITICIAN, PEO PLE USED TO APPROACH HIM FOR HELP. AS A WIFE OF PROMINENT POLITICIAN, S HE USED TO HELP PERSONS, WHO APPROACHED HER HUSBAND FOR HELP BY PROVIDING FI NANCE. IT WAS SUBMITTED THAT FUNDS FOR LENDING MONEY WERE NOT ASS ESSEES OWN FUNDS AND THAT HER FRIENDS AND RELATIVES ALSO GAVE MONEY, WHI CH IN TURN WAS LENT BY THE ASSESSEE. THE ASSESSEE SUBMITTED THAT THE ASSE SSEES DIARY CONTAINED ENTRIES REGARDING RECEIPT OF MONEY AND TH OSE RECEIPTS WERE MONEY GIVEN BY THE FRIENDS FOR THE PURPOSE OF ADVAN CING LOANS TO THE PERSONS, WHO APPROACHED THE ASSESSEES HUSBAND FOR FINANCIAL HELP. THE ASSESSEE ACCORDINGLY GAVE A COMPUTATION OF WORKING OF THE PEAK CREDIT AND SUBMITTED THAT A SUM OF RS.2,95,000 AND RS.28,28,00 0 HAS TO BE TAXED AS PEAK CREDIT ONLY IN THE A.YS. 2006-07 AND 2009-10 R ESPECTIVELY. THE COMPUTATION OF PEAK CREDIT AS DONE BY THE ASSESSEE IS GIVEN IN ANNEXURE-I TO THIS ORDER. 5. THE AO, HOWEVER, DID NOT ACCEPT THE PLEA PUT FOR TH ON BEHALF OF THE ASSESSEE. FIRSTLY, THE AO REJECTED THE CONTENTION THAT THE ASSESSEE WAS ONLY ACTING AS A INTERMEDIARY BY GETTING FUNDS FROM OTHERS AND GIVING IT AS ADVANCE TO PERSONS, WHO APPROACHED THE ASSESSEES H USBAND FOR HELP AND THAT NO FUND WAS HER OWN FUNDS, WHICH CAN BE BROUGH T TO TAX. THE AO ALSO REJECTED THE CONTENTION OF THE ASSESSEE THAT THE RE CEIPTS FOUND IN THE DIARY WERE FUNDS GIVEN TO THE ASSESSEE FOR THE PURPOSE OF LENDING TO THIRD PARTIES AND THAT THOSE FUNDS WERE NOT HER OWN FUNDS. IN TH IS REGARD, THE AO HAS OBSERVED THAT THE ASSESSEE DID NOT FILE CONFIRMATIO N FROM THE PARTIES FROM WHOM THE MONEY IS CLAIMED TO HAVE BEEN RECEIVED FRO M. THE AO ITA NOS.150, 297 TO 302/B/12 PAGE 5 OF 17 THEREAFTER COMPUTED THE UNDISCLOSED INCOME FROM MON EY LENDING ACTIVITY FOR THE VARIOUS ASSESSMENT YEARS AS FOLLOWS:- 5.1.17 THE ASSESSEE DID NOT FURNISH ANY CONFIRMAT ION FROM THE PARTIES FROM WHOM MONEY IS CLAIMED TO HAVE BEEN RECEIVED AS PER LETTER DATED 16-11-2010 WHICH IS EXTRACTED IN P ARA 5.1.4 ABOVE. HENCE, WITHOUT BEING SUBSTANTIATED, THE ASSE SSEES CLAIM OF HAVING RECEIVED ADVANCES IS NOT ACCEPTED. THE AD VANCES AS APPEARING IN THE DIARY AND WHICH ARE NOT SCORED OFF AS ON THE DATE OF SEARCH ARE THEREFORE CONSIDERED AS THE ASSESSEE S UNACCOUNTED INCOME USED IN HER MONEY LENDING BUSINESS. WHEREVER AMOUNTS ARE STATED TO BE RECEIVED BY HER, CREDIT HAS BEEN G IVEN TO SUCH ENTRIES, FOR EXAMPLE ON PAGE 2 OF THE DIARY RS.1,50 ,000/- AND RS.50,000/- ARE STATED TO BE WITH HER RELEVANT FOR AY 2008-09 AND 2009-10 AND ADVANCES TAKEN FROM SMT. LEELA HAS ALSO BEEN CONSIDERED AS APPEARING IN THE DIARY. FURTHER, THES E DEBTORS ARE NOT REFLECTED IN HER RETURNS OF INCOME FILED U/S 13 9(1). AS SUCH, THE MONEY LENDING ACTIVITY OF THE ASSESSEE IS COMPL ETELY OUTSIDE THE BOOKS. THESE ADVANCES ARE COMPILED YEAR-WISE AS UNDER: - 6. APART FROM THE ABOVE DIARY, CERTAIN CHEQUES WERE FOUND FROM THE BANK LOCKER OF THE ASSESSEE. IT WAS EXPLAINED BY TH E ASSESSEE THAT THESE CHEQUES WERE GIVEN BY THE PERSONS TO WHOM MONIES WE RE LENT AS A SECURITY. BASED ON THESE CHEQUES AND AFTER EXAMINA TION OF THE PERSONS WHO HAD GIVEN THE CHEQUES, THE AO CAME TO THE CONCL USION THAT A FURTHER SUM OF RS.14,38,800 WAS GIVEN AS LOAN BY THE ASSESS EE, ON WHICH INTEREST OF RS.48,000 WAS RECEIVED BY THE ASSESSEE. THE CAL CULATIONS DONE BY THE FINANCIAL YEAR PRINCIPAL 2002-03 2,30,000 2003-04 2004-05 95,000 2005-06 24,60,000 2006-07 31,68,000 2007-08 16,00,000 2008-09 87,50,000 GRAND TOTAL 1,63,03,000 ITA NOS.150, 297 TO 302/B/12 PAGE 6 OF 17 AO IN THIS REGARD ARE CONTAINED IN PARA 6.2 OF HIS ORDER FOR THE A.Y. 2009- 10. BASED ON BOTH THE ASSESSEES DOCUMENT AS WELL AS CHEQUES FOUND IN THE LOCKER, THE AO QUANTIFIED THE UNDISCLOSED INCOM E IN THE VARIOUS ASSESSMENT YEARS AS FOLLOWS:- AY AMOUNTS ADVANCED INTEREST EARNED TOTAL 2003-04 2,30,000 2,30,000 2004-05 - 2005-06 95,000 10,000 95,000 2006-07 24,60,000 34,000 24,94,000 2007-08 31,68,000 24,000 32,22,000 2008-09 14,50,000 10,000 14,60,000 2009-10 97,50,000 + 2,00,000 = 99,50,000 40,000 99,90,000 TOTAL 1,73,53,000 1,18,000 7. AGGRIEVED BY THE AFORESAID ADDITIONS, THE ASSESS EE PREFERRED APPEALS BEFORE THE CIT(APPEALS). THE CIT(A) ON A C ONSIDERATION OF THE STAND TAKEN BY THE ASSESSEE BEFORE THE AO, WAS OF T HE VIEW THAT THE COMPUTATION OF PEAK CREDIT AS DONE BY THE AO WAS ER RONEOUS. THE CIT(A) WORKED OUT THE PEAK CREDIT ON THE BASIS OF THE SEIZ ED DIARY, WHICH IS GIVEN AS ANNEXURE-II TO THIS ORDER BY MAKING THE FOLLOWING OBSERVATIONS :- 6. THE A.O. HAS NOT TAKEN INTO ACCOUNT THE COMPLE TE ENTRIES IN THE DIARY AS TRUE AND CORRECT, PARTICULARLY IN R ESPECT OF SOME OF THE AMOUNTS WHICH ARE RECEIVED FROM OTHERS INCLUDIN G THE APPELLANTS FRIENDS AND RELATIVES. THE BEST COURSE OF QUANTIFICATION COULD HAVE BEEN TO ARRIVE AT THE TOTAL AMOUNTS LENT , TO DEDUCT THE AMOUNTS RECEIVED BACK FROM THE BORROWERS AND AFTER GIVING CREDITS TO THE AMOUNTS RECEIVED FROM FRIENDS AND RE LATIVES, THE UNACCOUNTED AMOUNT COULD HAVE BEEN WORKED OUT. THE BALANCE SUM COULD HAVE BEEN REGARDED AS THE APPELLANTS ACC RETION OF MONEY OUT OF MONEY LENDING ACTIVITIES, WHICH ALSO T AKES INTO ACCOUNT THE UNACCOUNTED INTEREST. IT IS ALSO NOTE W ORTHY TO MENTION THAT THE NARRATION IN THE DIARY DO NOT APPE AR IN ITA NOS.150, 297 TO 302/B/12 PAGE 7 OF 17 CHRONOLOGICAL ORDER NEITHER DATE WISE NOR ON THE BA SIS OF THE AMOUNTS LENT. IT IS ALSO NOT POSSIBLE TO MAKE OUT F ROM THE ENTRIES IN THE DIARY THAT THE AMOUNTS MENTIONED IN THE FIRS T FEW SHEETS ARE LENT FIRST AND AMOUNTS MENTIONED IN THE SUBSEQUENT PAGES ARE LENT LATER. WHEREVER THERE WAS SPACE AVAILABLE, THE APPE LLANT HAS GONE ON MAKING ENTRIES AND IN THIS CONTEXT, IT IS RELEVA NT TO NOTE THAT A SUM OF 55,00,000/- RECEIVED FROM MR BALAJI IS NOT T AKEN INTO ACCOUNT BY THE A.O. THOUGH IT IS STRUCK OFF AND THE A.O. HERSELF HAS CERTIFIED THAT WHEREVER THE ENTRY IS STRUCK OF F; IT IS TREATED THAT THE AMOUNTS HAVE BEEN RECEIVED BACK AS CONFIRM ED BY THE ASSESSEE (PARA 5.1.4 PAGE 10 OF ASSESSMENT ORDER F OR A.Y. 2003-04). MERELY BECAUSE THE AMOUNT OF RS. 55,00,00 0/- WHICH IS STRUCK OFF APPEARS IN AN EARLIER PAGE, THE A.O, CON SIDERED IT AS STILL OUTSTANDING. PERHAPS NOT CONSIDERING THIS SIN GLE TRANSACTION COUPLED WITH NOT GIVING CREDIT FOR THE AMOUNTS RECE IVED FROM HER FRIENDS AND RELATIVES AS REFLECTED IN THE SAME SEIZ ED MATERIAL HAS RESULTED IN THE QUANTIFICATION AS MADE BY THE A.O. HAD THE SAME BEEN CONSIDERED AND SOME MARGIN ALLOWED FOR THE POS SIBLE BAD DEBTS, THE ACCRETION TO NET ASSETS METHOD COULD HAV E BEEN USED TO QUANTIFY THE UNDISCLOSED INCOME FOR VARIOUS YEARS. AFTER GIVING CREDIT FOR THE ENTRIES APPEARING IN THE SEIZED DOCU MENTS, REGARDING MONIES RECEIVED FROM HER FRIENDS AND FAMI LY MEMBERS AS REFLECTED IN THE SEIZED DIARY AND GIVING CREDIT FOR RS. 55,00,000/- RECEIVED BACK FROM MR BALAJI, THE PEAK CREDIT WAS WORKED OUT ... 8. FROM THE WORKING OF THE PEAK CREDIT SO MADE BY T HE CIT(A), HE FURTHER HELD AS UNDER:- FROM THE ABOVE WORKING, IT CAN BE SEEN THAT A SUM OF RS. 10,45,000/- IS ASSESSABLE FOR A.Y. 2006-07, A SUM O F RS. 19,98,000/- IS ASSESSABLE FOR A.Y. 2007-08 AND A SU M OF RS. 12,50,000/- IS ASSESSABLE FOR A.Y. 2008-09 AND THE TOTAL PEAK CREDIT WORKS OUT TO RS. 42,93,000/- FOR THESE THREE YEARS. IN ADDITION TO THE SAME, AS WORKED OUT BY THE A.O., IN PARAGRAPH 6.1 INTEREST OF 24,000/- EACH FOR A.Y. 2006-07 AND 2007 -08 ARE ALSO TO BE RETAINED OUT OF RS. 1,18,000/- COMPUTED IN PA RAGRAPH 6.3. HOWEVER, CONSIDERING THE FACT THAT THE APPELLANT TH EMSELVES HAVE OFFERED TO TAX FOR A.Y. 2009-10, A SUM OF RS. 28,28 ,000/-, IT IS DIRECTED TO RETAIN THIS SUM AS OFFERED BY THE APPEL LANT AS IT IS. IN GIVING THIS DIRECTION, THE APPELLANTS ARGUMENTS AS QUOTED IN PARA 5 ABOVE, VIDE POINT NOS. (A) TO (F) ARE ALSO CONSID ERED. HENCE, THE A.OS QUANTIFICATION IS CONFIRMED TO THE EXTENT OF RS. 10,45,000/- ITA NOS.150, 297 TO 302/B/12 PAGE 8 OF 17 + RS. 24,000/- (INTEREST) FOR A.Y. 2006-07, RS.19,9 8,000/- + RS. 24,000/- (INTEREST) FOR A.Y. 2007-08, RS.12,50,000/ - FOR A.Y. 2008-09 WITH A DIRECTION TO RETAIN THE OFFER OF RS. 28,28,000/- AS OFFERED BY THE APPELLANT FOR A.Y. 2009-10. THE BALA NCE ADDITIONS FOR THE ALL YEARS (OTHER THAN THE QUANTIFICATION AS NOTED ABOVE) EXCEPT INTEREST ON SAVINGS BANK ACCOUNT OF 14,102/- FOR A.Y. 2009-10 ARE DELETED. 7. IN THE RESULT, THE APPEALS FOR A.Y. 2003-04 AND 2005-06 ARE ALLOWED AND APPEALS FOR A.Y. 2006-07, 2007-08 , 2008-09 AND 2009-10 ARE PARTLY ALLOWED. 9. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E HAS PREFERRED THE APPEALS FOR THE AYS 2003-04, 2005-06 TO 2009-10. T HE ASSESSEE HAS PREFERRED AN APPEAL, AGGRIEVED BY THE ORDER OF THE CIT(A), FOR TAXING A SUM OF RS.28,28,000 FOR AY 2009-10 CONTENDING THAT EVEN AS PER THE WORKING OF THE PEAK CREDIT GIVEN BY THE CIT(A) IN HIS ORDER, T HE ADDITION SHOULD HAVE BEEN ONLY TO THE EXTENT OF RS.43,92,000 AND THE ADD ITIONAL SUM OF RS.28,28,000 SHOULD NOT HAVE BEEN TAXED. IT IS THE STAND OF THE ASSESSEE THAT THE SUM OF RS.28,28,000 HAS BEEN TAXED BY THE CIT(A) ONLY BECAUSE IT HAS BEEN OFFERED TO TAX IN THE RETURN OF INCOME FOR THE A.Y. 2009-10. IT IS THE GRIEVANCE OF THE ASSESSEE THAT THE ACTION OF TH E CIT(A) IN THIS REGARD WAS NOT CORRECT. 10. THE REVENUE IS AGGRIEVED BY THE ORDER OF THE CI T(A) IN AS MUCH AS THE CIT(A) HAS GIVEN CREDIT FOR LOANS RECEIVED FROM FRIENDS AND RELATIVES OF THE ASSESSEE, EVEN THOUGH THOSE FRIENDS AND RELATIV ES HAVE NOT GIVEN CONFIRMATION THAT THEY HAVE PROVIDED THE FUNDS TO T HE ASSESSEE FOR ADVANCING THE LOANS TO THE PERSONS, WHO APPROACHED THE ASSESSEES HUSBAND FOR FINANCIAL HELP. THE REVENUE IS ALSO AG GRIEVED BY THE FACT THAT THE CIT(A) WORKED OUT THE PEAK CREDIT WITHOUT GIVIN G OPPORTUNITY TO THE AO ITA NOS.150, 297 TO 302/B/12 PAGE 9 OF 17 AND TAKING INTO CONSIDERATION THE MATERIAL WHICH WA S NOT BEFORE THE AO. THE GRIEVANCE OF THE REVENUE WHICH IS COMMON IN ALL ITS APPEALS IS PROJECTED IN ITS GROUNDS OF APPEAL THUS:- (1) WHETHER CIT(A) WAS CORRECT IN HOLDING THAT TH E SOURCES FOR ADVANCING THE LOANS AS ADVANCES RECEIVED FROM R ELATIVES AND FRIENDS IN THE ABSENCE OF CONFIRMATION FROM SUCH PA RTIES. (2) WHETHER LD. CIT(A) IS CORRECT IN WORKING PEAK CREDIT WITHOUT GIVING OPPORTUNITY TO THE AO. 11. THE GROUNDS OF APPEAL AS PROJECTED BY THE ASSES SEE READS THUS:- 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) IS OPPOSED TO THE FACTS OF THE CASE AND L AW APPLICABLE TO IT. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN RETAINING THE INCOME OF RS.28,28,000/- AS UNDISC LOSED REPRESENTING INVESTMENT IN MONEY LENDING ACTIVITY. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN IGNORING THE FACT THAT THE PEAK CREDIT REPRESENT ING INVESTMENT IN MONEY LENDING ACTIVITY WAS ALREADY TAXED AND CONFIR MED FOR THE A.YS. 2006-07 TO 2008-09 AND THERE WAS NO FURTHER I NVESTMENT TO BE CONSIDERED FOR THE A.Y. 2009-10. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN HOLDING THAT THE PEAK CREDIT OF INVESTMENT IN MO NEY LENDING ACTIVITY HAS TO BE TAXED IN THE A.YS. 2006-07 TO 20 08-09 AND THE INCOME FOR THE A.Y.2009-10 TO THE EXTENT OF RS.28,2 8,000/- IS RETAINED NOT FOR THE REASON THAT THERE IS ANY UNDIS CLOSED INVESTMENT BUT ONLY FOR THE REASON THAT THE SAME HA S BEEN OFFERED FOR TAX BY THE APPELLANT. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN NOT APPRECIATING THE FACT THAT THE APPELLANT HAD OFFERED THE INCOME OF RS.28,28,000/- IN THE RETURN FILED FOR TH E A.Y.2009-10 TOWARDS UNDISCLOSED INVESTMENT IN MONEY LENDING ACT IVITY UNDER THE IMPRESSION THAT THE SAME WAS TAXABLE FOR THAT Y EAR BUT AFTER GIVING A FINDING THAT THE INCOME OF RS.28,28,000/- IS NOT TAXABLE ITA NOS.150, 297 TO 302/B/12 PAGE 10 OF 17 FOR THE A.Y.2009-10 BUT IN THE EARLIER YEARS, THE S AME SHOULD HAVE DELETED AS INCOME FOR THE A.Y.2009-10. 6. THE APPELLANT CRAVES PERMISSION TO ADD, DELETE OR ALTER ANY OF THE GROUNDS AT THE TIME OF HEARING. PRAYER THE APPELLANT REQUEST THE HONOURABLE TRIBUNAL TO KI NDLY DELETE THE ADDITION OF RS.28,28,000/- AS UNDISCLOSED INVES TMENT IN THE MONEY LENDING ACTIVITY. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS. FROM A PE RUSAL OF THE ORDER OF THE CIT(A) AND THE WORKING OF THE PEAK CREDIT THERE IN, IT IS CLEAR THAT HE HAS GIVEN CREDIT FOR MONIES SAID TO HAVE BEEN RECEIVED BY THE ASSESSEE FROM THIRD PARTIES AND THOSE HAVE BEEN EXPLAINED AS A SO URCE FOR MONIES LENT BY THE ASSESSEE AS RECORDED IN THE SEIZED DIARY. ACCO RDING TO THE LD. COUNSEL FOR THE ASSESSEE, IN DOING SO, THE CIT(A) HAS ONLY CONSIDERED THE ENTRIES IN THE SEIZED DOCUMENT. WE HAVE PERUSED THE SEIZED DO CUMENT, A COPY OF WHICH HAS BEEN PLACED BY THE ASSESSEE IN PAGES 3 TO 39 OF PAPERBOOK-II. E.G., IN PAGE 5 OF THE SEIZED DIARY, THERE IS AN EN TRY REGARDING RECEIPT OF RS.2,30,000 FROM MYSORE AUNTY ON 25.09.2002. THIS HAS BEEN CONSIDERED AS MONEY RECEIVED FROM MYSORE AUNTY AND AVAILABLE F OR CIRCULATION BY THE ASSESSEE AS A LOAN. THE ENTRY IN THE SEIZED DIARY DOES NOT CONTAIN ANY NARRATION OF RECEIPT. IN SUCH CIRCUMSTANCES, WITHO UT A CONFIRMATION FROM THE CONCERNED PARTY, AVAILABILITY OF CASH IN THE HANDS OF THE ASSESSEE SHOULD NOT HAVE BEEN ACCEPTED TO THE EXTENT OF RS.2,30,000 . THIS IS EXACTLY THE GRIEVANCE PROJECTED BY THE REVENUE IN ITS GROUNDS O F APPEAL. APART FROM THE ABOVE, THE BASIS ON WHICH THE PEAK CREDIT HAS BEEN WORKED OUT BY THE CIT(A) NEEDS TO BE VERIFIED BY THE AO. IN THIS REG ARD, IT WOULD HAVE BEEN ITA NOS.150, 297 TO 302/B/12 PAGE 11 OF 17 APPROPRIATE FOR THE CIT(A) TO HAVE CALLED FOR A REM AND REPORT FROM THE AO, WHICH HAS NOT BEEN DONE. 13. WE ALSO FIND THAT AFTER HAVING COME TO THE CONC LUSION THAT A SUM OF RS.42,93,000 IS THE PEAK CREDIT WHICH IS TO BE ADDE D FOR THE A.Y. 2009-10, THE CIT(A) HAS FURTHER DIRECTED ADDITION OF RS.28,2 8,000 ON THE BASIS OF DECLARATION OF INCOME ON ACCOUNT OF PEAK CREDIT BY THE ASSESSEE IN THE RETURN OF INCOME FILED FOR THE A.Y. 2009-10. BY DO ING SO HE HAS NEGATED HIS OWN FINDING WITH REGARD TO THE PEAK CREDIT. THIS I S THE GRIEVANCE OF THE ASSESSEE PROJECTS IN ITS GROUNDS OF APPEAL. WE ARE OF THE PRIMA FACIE VIEW THAT BOTH THE ADDITIONS CANNOT BE MADE IN THE A.Y. 2009-10, THAT CAN BE ADDED IN THAT PARTICULAR ASSESSMENT YEAR. 14. WE ARE THEREFORE OF THE VIEW THAT IT WOULD BE J UST AND APPROPRIATE TO SET ASIDE THE ORDER OF THE CIT(A) AND REMAND THE IS SUE WITH REGARD TO THE WORKING OF PEAK CREDIT TO THE CIT(A) FOR FRESH CONS IDERATION. THE CIT(A) WILL CALL FOR A REMAND REPORT FROM THE AO WITH REGARD TO THE ADDITION ON ACCOUNT OF PEAK CREDIT. THE ASSESSEE IS ALSO DIRECTED TO F ILE CONFIRMATION WHEREVER SHE CLAIMS AVAILABLE OF FUNDS BY REASON OF RECEIPTS FROM THIRD PARTIES. BASED ON THE EVIDENCE SO PRODUCED BY THE ASSESSEE A ND THE REMAND REPORT OF THE AO, THE CIT(A) WILL COMPUTE THE PEAK CREDIT FOR THE VARIOUS ASSESSMENT YEARS. THE CIT(A) WILL AFFORD OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE BEFORE DECIDING THE ISSUE. THE ASSESSEE W ILL BE AT LIBERTY TO FILE ADDITIONAL EVIDENCE TO SUBSTANTIATE HER CASE. ITA NOS.150, 297 TO 302/B/12 PAGE 12 OF 17 15. FOR STATISTICAL PURPOSES, ALL THESE APPEALS BY THE REVENUE AND THE ASSESSEE ARE TREATED AS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF FEBRUARY, 2013. SD/- SD/- ( N. BARATHVAJA SANKAR ) ( N.V. VASU DEVAN ) VICE PRESIDENT JUDIC IAL MEMBER BANGALORE, DATED, THE 8 TH FEBRUARY, 2013. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE. ITA NOS.150, 297 TO 302/B/12 PAGE 13 OF 17 ANNEXURE-I TO ORDER ITA NOS.150, 297 TO 302/B/12 PAGE 14 OF 17 (ANNEXURE-I TO ORDER) ITA NOS.150, 297 TO 302/B/12 PAGE 15 OF 17 ANNEXURE-II TO ORDER ITA NOS.150, 297 TO 302/B/12 PAGE 16 OF 17 (ANNEXURE-II TO ORDER ) ITA NOS.150, 297 TO 302/B/12 PAGE 17 OF 17 (ANNEXURE-II TO ORDER)