SHASI VAISH, ALLAHABAD V. ACIT (CENTRAL CIRCLE), ALLAHABAD

ITA 3/ALLD/2019

AI Insights

The case involves three appeals by the assessee, Shashi Vaish, against the orders of the Commissioner of Income Tax (Appeals) for the assessment years 2009-10 to 2011-12. The appeals primarily challenged the additions made by the Assessing Officer under various heads, including unexplained investments and unexplained cash deposits, following a search and seizure operation under section 132 of the Income Tax Act. The Tribunal's decision addressed the validity of the assessments made under section 153C read with section 143(3) of the Act, the legality of the actions taken under section 132, and the adequacy of the opportunities provided to the assessee to explain the sources of the investments and deposits.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 114346 (ITAT-ALLAHABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-09-2022
• Assessment Year: misc
• Appeal Filed On: 11-01-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Gift; Business income; Search and seizure; Salary income; Corroborative evidences; Validity of assessment; Set aside
• Section: 68; 132; 143(3); 142(1); 133A; 153A; 48; 13; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH, ALLAHABAD BEFORE SHRI.VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI. RAMIT KOCHAR, ACCOUNTANT MEMBER ITA Nos.01 to 03/ALLD/2019 Assessment Years: 2009-10 to 2011-12 Shashi Vaish, 86, New Baiharana, Allahabad PAN-ADKPV3246N vs. Asstt. Commissioner of Income Tax, Central Circle, Allahabad (Assessee) (Respondent) Appellant by: Sh. Praveen Godbole, C.A. Respondent by: Sh. Ramendra Kumar Vishwakarma, CIT DR Date of hearing: 13.09.2022 Date of pronouncement: 25.11.2022 O R D E R PER SHRI VIJAY PAL RAO, JUDICIAL MEMBER: These three appeals by the assessee are directed against three separate orders of the CIT(A) all dated 29.10.2018 for the assessment years 2009-10 to 2011- 12, respectively. 2. For the assessment year 2009-10, the assessee has raised the following grounds:- “1. That in any view of the matter assessment passed u/s 153C r.w.s 143(3) of the IT Act vide order dated 29.03.2013 by the Assessing Officer and his action as partly maintained by the CIT(A) vide her order dated 29.10.2018 is bad both on the facts and in law in so for even no proper opportunity was allowed before framing the assessment. 2. That in any view of the matter the lower authority failed to considered that the entire action u/s 132 of the Act and in consequences to the same notice so issued u/s 153C of the IT Act is illegal and without jurisdiction and also the fact that huge and abnormal income was determined at Rs. 45,24,440/- as against the returned income of Rs. 2,98,420/- without support of any incriminating search material found and maintained partly is unjustified and illegal, hence the declared income should have been accepted in interest of justice and even no proper opportunity. ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 2 3. That in any view of the matter observations and findings of the two lower authorities in their orders for making and maintaining the additions under different heads are quite unjustified, general, incorrect and contrary to the actual facts of the case and hence the same are liable to be sponged off in the interest of justice. 4. That in any view of the matter the addition of Rs. 9,95,000/- as made by the Assessing Officer as per Para 2.3(i) of his order by alleging unexplained investment in flat and his action as upheld by the first appellate authority ignoring the correct fact is unjustified and illegal, therefore the addition is liable to be deleted. 5. That in any view of the matter the source of investment in purchase of flat no. E- 101, Vijaya Apartment, indrapuram, Ghaziabad was duly explained to the lower authorities but failed to consider true facts in proper manner with judicious approach hence the addition so made and confirmed by them is highly unjustified and illegal as the appellant discharged the burden about source of investment. Even in this regard observations of the Commissioner of Income Tax (appeal) in para 13, 14 and 15 of his order for confirming the addition are totally incorrect and away from the truth. 6. That in any view of the matter the addition of Rs. 1,54,000/- as made as per Para 2.3(ii) of the assessment order by the Assessing Officer by alleging unexplained investment in land and his action as maintained/confirming by the first appellate authority without appreciating the correct facts is highly unjustified and illegal, hence the addition is liable to be deleted in the facts and circumstances of the case. 7. That in any view of the matter the addition of Rs. 1,54,500/- as made and maintained by the lower authorities is wrong and illegal because the source of investment with documentary proof was fully explained but the two lower authorities ignored the correct fact and did not consider the issue in proper manner. Thus the appellant discharged his burden by discharging his burden with evidences, hence the addition is liable to be deleted in interest of justice. 8. That in any view of the matter the addition of Rs. 10,61,840/- as made as Para 2.4 of the assessment order by alleging unexplained cash deposit in bank and such action of the Assessing Officer maintained by the CIT(A) ignoring the correct facts of the case is highly unjustified and illegal therefore the addition maintained liable to be deleted in the facts and circumstances of the case. 9. That in any view of the matter the addition of Rs. 10,61,840/- as made and maintained by the two lower authorities is wrong because all the bank accounts are disclosed bank accounts to the department much before the date of search and not found in the course of search, hence the bank account is not incriminating material and inspite of this fact source of deposits in bank was also duly explained to the lower authorities, hence the basis of the addition is uncalled for and the same is liable to be deleted. ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 3 10. That in any view of the matter a sum of Rs. 8,47,780/- out of protective addition of Rs. 18,60,600/- as made as per Para 2.5 of the assessment order by the Assessing Officer as maintained by the CIT(A) ignoring the correct facts is highly unjustified and illegal and hence the same is liable to be deleted in the facts and circumstances of the case. 11. That in any view of the matter the addition of Rs. 18,60,000/- as made and maintained by the two lower authorities is unjustified and incorrect. Even in this regard observations and findings of the two lower authorities in their orders are quite unjustified, wrong and contrary to the actual facts of the case, hence the addition is liable to be deleted in all fairness and interest of justice. 12. That in nay view of the matter the additions so made and maintain under the different heads by the two lower authorities without incriminating material is unjustified and wrong, therefore as per the settled law question of making such arbitrary and wrong addition does not arise, hence the additions is liable to be deleted in interest of justice. 13. That in any view of the matter interest charged under different section of the Income Tax Act is highly unjustified in the facts and circumstances of the case. 14. That in any view of the matter the assessee reserves his rights to take any fresh ground of appeal before hearing of appeal.” 3. Ground nos. 1 to 3 are regarding the validity of assessment order passed under section 153C r.w.s. 143(3). At the time of hearing, the learned AR of the assessee has stated at Bar that the assessee does not press ground nos. 1 to 3 and the same may be dismissed as not pressed. The learned DR has raised no objection if ground nos. 1 to 3 of the assessee’s appeal are dismissed as not pressed. Accordingly, ground nos. 1 to 3 of the assessee’s appeal are dismissed being not pressed. 4. Ground nos. 4 and 5 are regarding the addition of Rs. 9,95,000/- on account of unexplained investment in the flat. There was a search and seizure action under section 132 of the Income Tax Act on 3 rd February, 2011 at the residential and business premises belonging to Vaish Group of cases. Besides search and seizure action, certain business premises of the group were surveyed under section 133A of the Income Tax Act. Thereafter, the AO issued notice under section 153A to the assessee on 22.11.2012. In response the assessee filed return of income on 4 th ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 4 February, 2013 declaring total income of Rs. 2,98,420/-. The AO vide order-sheet entry dated 13.02.2013 raised the queries regarding the investment made by the assessee for purchase of the flat no. E-101, Vijay Apartment, Indirapuram, Ghaziabad. In reply, the assessee submitted the property in Ghaziabad was purchased in the joint name with Abhishek Kulshreshth, who is a Doctor in a Government hospital and presently posted in Meerut. Since, the assessee could not get the details from Sh. Abhishek Kulshreshth therefore, he expressed his inability to explain the source of investment without going through the relevant documents which were in the possession of Sh. Abhishek Kulshreshth. The AO consequently made an addition of Rs. 9,95,000/- for want of confirmation from Sh. Abhishek Kulshreshth and treated the same as unexplained investment. The assessee challenged the action of the AO before the CIT(A) but could not succeed. 5. Before the Tribunal, the learned AR has submitted that the CIT(A) has confirmed the addition made by the AO on the ground that the assessee has not adduced any evidence to prove the source of investment made by Sh. Abhishek Kulshreshth. He has referred to the submissions of the assessee before the CIT(A) which is reproduced in para 10 of the impugned order and submitted that the total consideration of the flat was Rs. 30 Lac out of which Rs. 19,50,000/- was financed from the Punjab National Bank. The payment of Rs. 1,20,100/- on account of stamp duty was made by the assessee and Rs. 3 Lac was paid as an advance at the time of agreement to sell by Sh. Jaspal Singh, the uncle of Sh. Abhishek Kulshreshth. The learned AR of the assessee has further submitted that the flat was purchased in the joint name of assessee and Sh. Abhishek Kulshreshth. The remaining amount of Rs. 7,50,000/- was invested by Sh. Abhishek Kulshreshth through two cheque nos. 266564 and 266565 dated 10.10.2018 of Rs. 5 Lac and Rs. 2.50 Lac, respectively issued from State Bank of India, High Court Branch, Allahabad. The assessee produced the copy of receipt issued by M/s Vashishtha Builders and Engineering Pvt. Ltd. which was also part of the seized material. The assessee paid Rs. 2,45,100/- ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 5 for stamp duty and Rs. 5,900/- towards expenses total amounting to Rs. 2,51,000/-. All the details were furnished before the CIT(A) and the payment made by the assessee towards stamp duty and expenses is duly reflected in the cash flow statement of the respective years. The CIT(A) also called for a remand report from the AO and during the remand proceedings, the assessee produced all the relevant record including the confirmation placed at page no. 93 of the paper book. The learned AR has also referred to the receipt issued by the builder placed at page no. 94 of the paper book as well as the copy of the bank A/c. statement showing the cheque payments by Sh. Abhishek Kulshreshth from the joint bank account of the his father and mother. Thus, the learned AR has submitted that without considering the relevant evidence produced by the assessee, the AO as well as CIT(A) has confirmed the said addition. 6. On the other hand, the learned DR has submitted that the assessee did not produce any record before the AO during the assessment proceedings and consequently the addition was made by the AO for want of any explanation and supporting evidence. He has further submitted that the confirmation was filed by the assessee without PAN and address. The assessee has not explained the source of cash payment of Rs. 2,51,000/- therefore, for want of any evidence before the AO, the addition was made. He has relied upon the orders of the authorities below. 7. We have considered the rival submissions as well as relevant material on record. The AO has made the addition of Rs. 9,95,000/- on account of unexplained investment in the flat no. E-101, Vijay Apartment, Indirapuram, Ghaziabad. The AO has recorded the facts in the query raised vide order-sheet entry dated 13.02.2013 in para 2.3 of the assessment order as under:- ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 6 ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 7 ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 8 8. The AO has recorded the fact that the investment to the extent of Rs. 19,50,000/- was made by taking a loan from Punjab National Bank, Colonelganj Branch, Allahabad and Rs. 5 Lac was paid vide Cheque no. 266564 and Rs. 2,50,000/- was also paid vide Cheque no. 266565 both dated 10.10.2008 issued from the State Bank of India. The AO asked the confirmation towards these cheques from Sh. Abhishek Kulshreshth alongwith the copy of the bank statement. During the assessment proceedings the assessee could not furnish the relevant details and confirmation and expressed his inability as the assessee was not able to get the relevant details from Sh. Abhishek Kulshreshth, who is the joint investor and owner of flat in question. The AO consequently made an addition as under:- (1) Investment in flat at Ghaziabad Given the above discussion and the fact that no confirmation from Shri Abhishek Kulshreshth has been received, the amount of investment treated as unexplained comes to 9.95 lacs. Addition:9,95,000 ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 9 9. Before the CIT(A), the assessee has explained the source of this investment by giving details of these two cheque numbers which were already with the AO and also filed the confirmation as well as bank account statement from where the cheques were issued. The written submission of the assessee alongwith the evidence filed by the assessee were sent to the AO for remand report. In the remand report, the AO accepted the fact that these cheques were issued by Sh. Justice S.S. Kulshreshth and Smt. Alka Kulshreshth but could not accept the same for want of proper explanation. As regards, Rs. 2,51,000/- paid by the assessee and explained the source from cash flow statement, the AO was of the view that the assessee was not able to explain the cash flow. The CIT(A) has confirmed the addition in para 13 to 15 as under:- “13. I have examined the facts and circumstances of the case. I have considered the finding of the AO in the assessment order and in the remand report and the submission of the appellant made during appellate proceeding. The AO has made addition of Rs. 9,95,000/- on account of unexplained investment in flat No. E-101, Vijaya Apartment, Indirapuram, Ghaziabad. 14. The appellant has contended that the appellant alongwith Shri Jaipal Singh entered into an agreement to sale with M/s Vashishthe Builders on 15/10/2007 to purchase above mentioned flat for Rs. 30,00,000/- for which the assessee paid Rs. 1,20,100/- as stamp duty in cash and RS. 3,00,000/- was paid as advance in cash by Shri Jaipal Singh. The advance of Rs. 3,00,000/- from Sri Jaipal Singh was adjusted with Abhishek Kulshreshth, with whom the registered sale deed was executed. 15. On examination, I find that the appellant has not adduced any cogent evidence to prove the source of investment of Rs. 7,50,000/- made by Abhishek Kulshreshth. The cheques of Rs. 5,00,000/- and Rs. 2,50,000/- have been issued by Shri S.S. Kulshreshth and Smt.Alka Kulshreshth. The appellant has claimed that the payment of Rs. 7,50,000/- has been made by Abhishek Kuhshreshth. It is pertinent to note that no confirmation of Shri Abhishek Kulshreshth has been furnished by the appellant even during appellate proceeding. The appellant has merely furnished copy of the cheques of Rs. 5,00,000/- & Rs. 2,50,000/ issued by Shri Alka Kulshreshth and Shri S.S. Kulshreshth. Considering the aforesaid facts, I find that it is a settled principle of law primary onus is on the appellant to establish the identity of the creditor, creditworthiness of the credit and genuineness of transaction, which has not been discharged. In view thereof/ addition of Rs.9,95,000/- made by the AO is hereby upheld.” ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 10 10. The CIT(A) has stated in the order that the assessee has not furnished the confirmation of Sh. Abhishek Kulshreshth even during the appellate proceedings whereas the AO in the remand report has accepted the fact that the assessee produced the confirmation but rejected the same on the ground that the confirmation on simple paper does not serve any purpose and discharge his onus. It is pertinent to note that it is not a mere confirmation by Sh. Abhishek Kulshreshth but alongwith the confirmation copy of statement of the bank statement in the joint name of his father and mother was also filed which reflects the payment of Rs. 7,50,000/- through these cheque nos. 266564 and 266565. The confirmation given by Sh. Abhishek Kulshreshth at page no. 93 of the paper book reads as under:- “I, Abhishek Kulshreshth son of Justice S.S. Kulshreshth resident of Flat no.E-101 Block E Vijaya Apartment hereby confirm that during financial year 2008-09 I have purchased a flat no. E-101 Block E in Vijaya Apartment in Indirapuram Ghaziabad Uttar Pradesh along with Shri Shahsi Vaish son of Shri Ramji Vaish resident of 86 New Bairahana Allahabad for Rs. 30,00,000/- out of which 19,50,000/- was financed by Punjab National Bank Colonelganj Allahabad and out of remaining balance of Rs. 10,50,000/- was invested by me (Rs.7,50,000/ through two cheques numbered 266564 dated 10.10.2008 amounting Rs.5,00,000/- and cheque numbered 266565 dated 10.10.2008 amounting Rs.2.50,000/- both of State bank of India, High Court branch Allahabad in favor of M/s Vashishthe Builders & Engineers Private Limited, and Rs.300000/- in cash) and Rs. 2,51,000/- was given in cash by Shri Shashi Vaish. In this way my contribution in the said property is Rs. 10,50,000/- Since the said investment was made by me from definite sources and Shri Shashi Vaish is not concerned with the said investment except Rs. 2,51,000/- which was paid by him in cash towards stamp duty and other expenses for the purchase of said property. Sd/- Abhishek Kulshreshth” 11. So far as the objection of the AO of not giving the complete details of Sh. Abhishek Kulshreshth is concerned, it is pertinent to note that the complete details of Sh. Abhishek Shankar Kulshreshth has been given in the sale deed which is very much available with the AO having the father’s name as well as the address of both the purchasers. Further, these two cheques are duly reflected in the bank account statement of the joint bank account of father and mother of Sh. Abhishek Kulshreshth placed at page no. 95 as under:- ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 11 ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 12 12. When Sh. Abhishek Kulshreshth is the joint investor and owner of the flat in question alongwith the assessee and has confirmed the payment of Rs. 7,50,000/- through these two cheques issued from the joint account of his father and mother which is also proved from the bank account statement then the assessee cannot be held as failure to discharge its obligation. In any case, when the investment was made in the joint name and the payment of Rs. 7,50,000/- was through the cheques given by Sh. Abhishek Kulshreshth then the said payment cannot be added to the income of the assessee as an unexplained investment. Accordingly, the addition to the extent of Rs. 7,50,000/- is hereby deleted. 13. So far as the remaining addition of Rs. 2,45,000/-, the assessee has explained the source of payment towards stamp duty and expenses from the cash available with the assessee and in support of his contention, the assessee has relied upon the cash flow statement which was filed before the CIT(A) and also before the AO. The assessee is claiming that the opening cash in hand with assessee as per cash fow statement is Rs. 8,89,403/- which shall be also verified by the AO, in this context reference is drawn to appellate order dated 26.11.2020 passed by Division Bench, Alahabad( of which both of us were part of DB) in ITA no. 115/Alld/2017 for assessment year 2008-09 in the case of the assessee is relevant. The CIT(A) has not discussed anything about the remaining addition in the impugned order whereas the AO in the remand report has rejected the explanation of source of Rs. 2,50,000/- from the cash available with the assessee without giving any detailed reasons of not accepting the cash flow statement. Accordingly, in the facts and circumstances of the case and in the interest of justice, this issue of the balance addition of Rs. 2,45,000/- is remanded to the record of the AO for proper verification and examination of the source being available availability of the cash with the assessee as claimed by the assessee by producing the cash flow statement. Needless to say, the assessee be given an appropriate opportunity of hearing before passing the fresh order. ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 13 14. Ground nos. 6 and 7 is regarding addition of Rs. 1,54,000/- on account of unexplained investment in land. The details of investment has been given by the AO in the questionnaire in para 2.3 of the impugned order which has already been reproduced in the foregoing part of this order. In response to the said questionnaire regarding the investment in the land, the assessee replied that the assessee alongwith his elder brother Vijay Vaish has purchased the land in question and out of the total payment of Rs. 9,15,500/- Rs. 3,75,000/- was paid by the assessee through cheque no. 016721 dated 20 th January, 2009 and equal amount of Rs. 3,75,000/- was paid by Sh. Vijay Vaish through cheque no. 865415 issued from Punjab National Bank, Allahabad. The balance amount of Rs. 1,54,500/- was paid in cash. The assessee explained the cash payment of Rs. 1,54,000/- being made from the savings of the other family members. The AO accepted the cheque payment and made the addition of Rs. 1,54,000/- on the ground that no cash flow and books of accounts has been produced by the assessee. The assessee challenged the action of the AO before the CIT(A) and submitted that an identical amount has been added by the AO in the hand of Sh. Vijay Kumar Vaish and therefore, it is a double addition of the same investment in the hand of the assessee as well as in the hand of his brother Sh. Vijay Vaish. 15. Before the Tribunal, the learned AR has submitted that the said payment of Rs. 1,54,000/- was made by his brother Sh. Vijay who has also claimed the same in the return of income. Therefore, this is a double addition of the same amount. He has referred to the finding of the CIT(A) and submitted that the CIT(A) has not even considered this fact that an identical addition has been made by the AO in the hand of his brother who is the joint owner of the property in question. He has also referred to the cash flow statement of Sh. Vijay Vaish at page nos. 105 and 106 of the paper book and submitted that when his brother has claimed and owned this payment, the same cannot be added in the income of the assessee. The learned AR has further pointed out that even the AO has made the addition on this account ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 14 twice by considering the fact that an identical addition has been made in the hand of Sh. Vijay Vaish and therefore, the protective addition was also made in the hand of the assessee. The said addition has been deleted by the CIT(A) in para 40 of the impugned order. Thus, the learned AR has submitted that once the addition has been made in the hand of the brother of the assessee who has also claimed the payment of the said amount, then no addition can be made in the hand of the assessee. 16. On the other hand, learned DR has submitted that the assessee has not explained the source of this payment of Rs. 1,54,000/- in cash before the AO and reply of the assessee is very vague. The cash flow statement filed by the assessee cannot be accepted as it was held by the CIT(A) as an afterthought evidence created by the assessee. He has relied upon the impugned orders of the CIT(A). 17. We have considered the rival submissions as well as relevant material on record. The AO has made the addition of Rs. 1,54,500/- towards the payment in cash for purchase of the plot of land at Salkhan, Sonebhadra, vide sale deed dated 10.12.2008. At the outset, we note that the AO himself has accepted this fact and recorded in the assessment order that an identical addition has been made by the AO in the case of Vijay Vaish and consequently a protective addition was also made in the hand of the assessee. Accordingly, in the facts and circumstances of the case, when an addition of Rs. 1,54,500/- was made in the hand of Sh. Vijay Vaish who has also claimed the payment of said amount towards the purchase consideration of land in question then the said amount cannot be added to the income of the assessee as unexplained investment. This fact was pointed out by the assessee before the CIT(A), however, the CIT(A) has confirmed this addition in paragraph 21 to 23 as under:- “21. I have examined the facts and circumstances of the case. I have considered the finding of the AO in the assessment order and in the remand report and the submission of the appellant made during appellate proceeding. It is to be noted that the appellant has purchased a plot at Salkhan, Sonebhadra, for a total ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 15 payment of Rs. 8,61,000/- & Rs. 54,500/-. The AO has noted that out of the total payment appellant has paid Rs. 1,00,000/- & Rs. 54,500/- in cash for which no explanation has been furnished. 22. The appellant has contended that Rs. 1,54,500/- has been paid by his brother and claimed that it has been declared in his cash flow statement. 23. On examination, I find that submission of cash flow statement at the appellate stage is merely an afterthought, which is also not supported by any cogent evidence. In view thereof addition of Rs. 1,54,500/- made by the AO is found to be sustainable and is hereby upheld.” 18. It is manifest from the finding of the CIT(A) that the CIT(A) has confirmed the addition by rejecting the cash flow statement whereas the relevant fact that this payment was made by Sh. Vijay Vaish, who has also claimed the same then this amount cannot be treated as unexplained investment in the hands of the assessee. The assessee has filed the copy of the written submissions of Vijay Vaish before the CIT(A) wherein it was admitted by Sh. Vijay Vaish that Rs. 1,64,050/- was paid in cash by him which is duly reflected in the cash flow statement. Once this amount was claimed to have been paid by Sh. Vijay Vaish and the AO made the addition in the hand of the co-owner of the property in question, the same cannot be added in the hand of the assessee. Accordingly, in the facts and circumstances of the case , the AO is directed to make limited verification and if the aforesaid expenditure is owned by Mr. Vijay Vaish, then the addition cannot be sustained in the hands of the assessee. Thus, for limited verification as directed above, we are remitting this issue back to the file of the AO. We order accordingly 19. Ground nos. 8 and 9 are regarding the addition made on account of unexplained cash deposit in the bank account. The AO has given the details of deposit made in the bank account in para 2.4 as under:- Date Amount A.Y. Bank/A/c Shashi Vaish 27.05.2008 440340 2009-10 994 PNB 30.08.2008 40000 2009-10 19.09.2008 4000 2009-10 23.12.2008 300000 2009-10 26.12.2008 26500 2009-10 28.03.2009 15000 2009-10 ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 16 30.03.2009 75000 2009-10 12.01.2009 10000 2009-10 2781 PNB 31.01.2009 10000 2009-10 23.02.2009 25000 2009-10 16.05.2008 30000 2009-10 498 PNB 31.07.2008 15000 2009-10 27.09.2008 10000 2009-10 04.12.2008 26000 2009-10 14.01.2009 10000 2009-10 31.01.2009 10000 2009-10 31.01.2009 10000 2009-10 31.03.2009 5000 2009-10 Total 1061840 Addition: 10,61,840/- 20. The AO simply made addition of the entire deposit during the year under consideration total amounting to Rs. 10,61,840/-. The assessee challenged the action of the AO before the CIT(A) and submitted that the deposit as well as withdrawals from the bank account are from definite sources. The bank accounts are duly disclosed to the department before the date of search. The assessee also explained that one of the bank account was housing loan account and interests on such loan is duly disclosed by the assessee in the return of income. It was further contended that the AO has considered only the credit entries ignoring the debit in the bank account. In support of his explanation, the assessee produced the cash flow statement. The CIT(A) was not impressed with the explanation of the assessee and confirmed the addition made by the AO. 21. Before the Tribunal, the learned AR of the assessee has submitted that the assessee has explained the source of the deposit in the bank account from the cash flow statement placed at page no. 45 of the paper book. However, neither the AO nor the CIT(A) has verified and examined the cash flow statement of the assessee towards the source of deposit in the bank account. Thus, the learned AR has submitted that the matter may be remanded to the record of the AO for proper verification and examination of the cash flow statement and explanation of the assessee. ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 17 22. On the other hand, learned DR has submitted that the assessee has explained the source of the deposit by producing the cash flow statement at the appellate stage before the CIT(A) which cannot be accepted in the absence of any supporting evidence. 23. We have considered the rival submissions as well as relevant material on record. At the outset, we note that the AO has not discussed this issue in the assessment order but simply reproduced the details of deposit and made the addition of the entire amount of deposit in the bank to the income of the assessee. Thus, it appears that the assessee was not even confronted with this issue before the addition was made by the AO. The AO himself has stated in the assessment order that no books and no cash flow statement has been produced and consequently the deposits are to be treated as an unexplained. The assessee, in response to this objection of the AO has produced the cash flow statement before the CIT(A) but the same was not accepted by the CIT(A). Further, when the CIT(A) called for a remand report in respect of other issues of investment in the flat then it was fair and proper that the cash flow statement produced by the assessee ought to have been sent for verification and a remand report of the AO. Accordingly, in the facts and circumstances of the case, when the cash flow statement filed by the assessee has not been verified by the authorities below, the impugned order of the CIT(A) is set aside and the matter is remanded to the record of the AO for proper verification and examination of the cash flow statement as well as explanation of the assessee towards the source of deposit in the bank account. 24. Ground no. 10 is regarding protective addition of Rs. 18,60,600/-. The AO has made the protective addition in the hands of the assessee in para 2.5 as under:- “2.5 As discussed in para 2.5 in the case of Smt. Munni Devi(2009-10) the amount of cash deposit is being added protectively in the case of Shri Shashi Vaish. Addition: 18,60,600.00” ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 18 25. Thus, it is clear that since the substantive addition of this amount was made in the hand of Smt. Munni Devi, mother of the assessee therefore, only a protective addition was made in the hand of the assessee. The assessee challenged the action of the AO before the CIT(A). The CIT(A) has converted this protective addition into substantive addition in the hand of the assessee by considering the fact that the addition made in the hand of Smt. Munni Devi was deleted by the CIT(A). 26. Before the Tribunal, the learned AR of the assessee has submitted that a part relief was granted by the CIT(A) in respect of a sum of Rs. 12,12,820/- found to be deposited by M/s Manglam Service Station inadvertently shown in the bank account of the assessee and immediately transferred in the bank of M/s Manglam Service Station. However, for the balance amount of Rs. 8,47,780/-, the CIT(A) has rejected the cash flow statement submitted by the assessee on the ground that it is an afterthought. The learned AR has submitted that the assessee has explained the source of deposit from the cash flow statement and prior to the stage of appeal before the CIT(A) there was no occasion to produce the cash flow statement as the AO made only a protective addition without giving any opportunity to the assessee. He has referred to the bank account statement at page no. 48 and 49 of the paper book and submitted that the AO has made the addition without considering the contra entries in the bank account and further some of the addition as made by the AO of Rs. 10,61,840/- is also part of this addition of Rs. 18,60,600/- and thereby there is a double addition to the extent of other addition of Rs. 10,61,840/- on account of deposits in the bank account. Thus, the learned AR has submitted that the AO took the same deposits while making the two separate additions one of protective basis and another of substantive basis and the CIT(A) has confirmed the addition on the substantive basis which amounts to double addition. 27. On the other hand, learned DR has fairly submitted that the possibility of overlapping of the addition made on account of deposit in the bank account is not ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 19 ruled out however, this issue requires a proper examination of the correct facts and entries of the deposits in the bank account. 28. We have considered the rival submissions as well as the relevant material on record. As it is evident from the assessment order that the AO has simply made the addition on protective basis without even confronting the assessee on this issue. The CIT(A) has granted part relief but the addition to the extent of Rs. 8,47,780/- was confirmed on substantive basis in the hand of the assessee. The relevant finding of the CIT(A) in para 33 to 36 is as under:- “33. I have examined the facts and circumstances of the case. I have considered the finding of the AO in the assessment order, the remand report and the submission of the appellant made during appellate proceeding. It is to be noted that the addition of Rs. 18,60,600/- has made by the AO on account of cash deposits in the hands of Shri Shashi Vaish on protective basis and substantively in the hands of Smt. Munni Devi. In the case of Muni Devi for A.Y. 2009-2010 vide order dated 10/03/2016 of CIT(A)-III, Lucknow, has given the finding as under:. “5(4) I have examined the facts and circumstances of the case. I have considered the findings of the AO and the submissions of the appellant. I find that the AO has failed to consider the fact that account number 1001000100607994 with Punjab National Bank, Collectorganj, Allahabad was the account of Shri Shashi Vaish and the name of the appellant, was added in the account with effect from 25/06/2009 as joint holder. The financial year under consideration is 2008-2009 and during this financial year the appellant was not even the joint holder in the bank account, having been introduced on 25/06/2009. The deposit of Rs. 18,60,000/- cannot be added on substantive basis in the case of the appellant as she was not joint holder during the assessment year 2009-2010 under consideration. Such deposits have to be considered in the case of Shri Shashi Vaish who was the sole owner of the account during the year under consideration. Accordingly, the addition of Rs. 18,60,000/- made by the AO is deleted giving relief to the appellant.” Considering the aforesaid facts deposits of Rs. 18,60,000/- have to be considered in the hands of the appellant. 34. On examination, I find that the bank account is in the name of the appellant. The appellant has contended that Rs. 10,12,820/- has been deposited by M/s Manglam Service Station on 02/06/2008 inadvertently which was immediately transferred in the bank account of M/s Manglam Service Station. Further it has been stated that the amount belonged to M/s Manglam Service Station and is ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 20 duly reflected in the cash book of the firm. On perusal of the page No. 106 and Page No. 30 of the paper book, which is the cash book of the firm, the appellant's contention that Rs. 10,12,820/- belonged to the firm and is duly reflected in the cash book is found to be acceptable. 35. Further, with regard to the balance cash deposit of Rs. 8,47,780/-, I find that the appellant has not adduced any cogent evidence to explain the source of cash deposit in the aforesaid bank account. The cash flow statement submitted at the appellate stage clearly looks to be an afterthought, in the absence of any books of account or any supporting evidence and hence cannot be accepted. 36. Considering the facts and circumstances of the case, I find that onus is on the appellant to explain the source of cash deposit of Rs. 8,47,780/- which has not been discharged. In view thereof addition of Rs. 8,47,780/- is hereby upheld. Further addition of Rs. 10,12,820/- made by the AO is found to be satisfactorily explained and is hereby deleted.” 29. We are of considered opinion that the cash flow statement filed by the assessee ought to have been examined and verified instead of rejecting at the threshold specifically in view of the fact that the AO made this addition on protective basis without even confronting the assessee on this issue. Further, it is also a matter of record that the addition was also made by the AO on account of unexplained deposit in the bank account to the tune of Rs. 10,61,840/- and the entries as given by the AO in the table in respect of the said addition are also part of the bank account statement which was considered by the AO for making this addition of Rs. 18,60,600/-. Therefore, the possibility of some of the common entries of deposit in the bank account taken into consideration in respect of both the additions by the AO is not ruled out. Accordingly, in the facts and circumstances of the case, this issue is set aside to the record of the AO for proper verification of the correct facts and the entries in the bank account as well as verification of the cash flow statement as a source of the deposits and then decide the same after giving an opportunity to the assessee. We may clarify that the protective addition made by the AO in the hand of Smt. Munni Devi, the mother of the assessee was deleted by the CIT(A), vide order dated 13.03.2016, a copy of which has been filed by the learned DR. The assessee has also not disputed the fact that the deposits are made by him. Accordingly, the ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 21 addition on this account, if any, has to be treated on substantive basis in the hand of the assessee. 30. Ground nos. 12 to 14 are general in nature and does not require any specific adjudication. The appeal of the assessee for A.Y. 2009-10 is partly allowed. ASSESSMENT YEAR:2010-11 31. For the assessment year 2010-11, the assessee has raised the following grounds:- “1. That in any view of the matter assessment passed u/s 153C r.w.s 143(3) of the IT Act vide order dated 29.03.2013 by the Assessing Officer and his action as partly maintained by the CIT(A) vide her order dated 29.10.2018 is bad both on the facts and in law. The entire basis of additions is not correct and against the settled law. 2. That in any view of the matter the lower authority failed to understand that the entire action u/s 132 of the Act and in consequences to the same notice so issued u/s 153C of the IT Act is illegal and without jurisdiction and also the fact that huge and abnormal income was determined at Rs. 94,58,220/- as against the returned income of Rs. 4,42,600/- without support of any incriminating search material found and maintained partly is unjustified and illegal, hence the declared income should have been accepted in interest of justice. 3. That in any view of the matter observations and findings of the two lower authorities in their orders for making and maintaining the additions are quite unjustified, general, incorrect and contrary to the actual facts of the case and hence the same are liable to be sponged off in the interest of justice. 4. That in any view of the matter a sum of Rs. 16,82,700/ out of protective addition of Rs. 20,26,000/- as made as per Para 2.5 of the assessment order by the Assessing Officer as maintained by the CIT(A) ignoring the correct facts is highly unjustified and illegal and hence the same is liable to be deleted in the facts and circumstances of the case. 5. That in any view of the matter interest charged under different section of the IT Act is highly unjustified in the facts and circumstances of the case. 6. That in any view of the matter the assessee reserves his rights to take any fresh ground of appeal before hearing of appeal.” ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 22 32. Ground nos. 1 to 3 is regarding validity assessment and addition made by the AO. At the time of hearing, the learned AR of the assessee has stated at Bar that the assessee does not press ground nos. 1 to 3 and the same may be dismissed as not pressed. The learned DR has raised no objection if the ground nos. 1 to 3 are dismissed as not pressed. Accordingly, ground nos. 1 to 3 of the assessee’s appeal are dismissed being not pressed. 33. The assessee has also raised additional grounds, which read as under:- “1. That in any view of the matter the addition of Rs. 17,99,000/- as maintained by Ld CIT(A) as against Rs. 20,26,000/- as made by assessing officer is highly unjustified in the facts and circumstances of the case. 2. That in any view of the matter the cash deposit in bank account are from definite sources and assessee duly submitted details about deposit but the Ld CITA() only considered part amount as explained and added the balance of Rs. 17,29,000/ which is highly unjustified.” 34. The learned AR of the assessee has submitted that the additional grounds raised by the assessee are arising from the impugned order of the CIT(A) and due to inadvertence, the same were not taken at the time of filing the Form 36. Thus, the learned AR has submitted that when the issue involved in additional grounds was raised before the CIT(A) and it was decided against the assessee then the additional grounds filed by the assessee may be admitted for adjudication on merits. 35. On the other hand, learned DR has objected to the admission of the additional grounds. 36. Having considered the rival submissions as well as additional grounds raised by the assessee, we find that this issue was raised by the assessee before the CIT(A) in ground nos. 7 and 8 and the CIT(A) after calling for a remand report from the AO confirmed the addition to the extent of Rs. 17,29,000/- out of the total addition made by the AO of Rs. 20,26,000/-. Therefore, it is clear that this issue is very much emanating from the impugned order of the CIT(A) and not a fresh issue raised by ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 23 the assessee by way of additional grounds. Hence, in the facts and circumstances of the case, the additional grounds raised by the assessee which were not raised in Form 36 due to omission and inadvertence are admitted for adjudication on merits. ON MERITS OF THE ADDITIONAL GROUNDS: 37. The learned AR of the assessee has submitted that the assessee has duly explained the source of the deposits made in the bank accounts of the assessee. He has referred to the submissions of the assessee before the CIT(A) as reproduced at page no. 12 and 13 of the impugned order. The learned AR has pointed out that the assessee has three bank accounts in the Punjab National Bank, the deposits as well as withdrawals from the bank accounts are from definite source and the said bank accounts are duly disclosed to the department before the date of search. One of the bank account was the housing loan and interest on such loan are duly disclosed by the assessee in the return of income hence, the question of treating the bank accounts as unexplained is not correct. Another bank account is car loan account and regular EMIs were paid by the assessee. The assessee has declared the car rental income from the said vehicle in the return of income and therefore, the said bank account cannot be treated as unexplained. Once the car rental income is accepted which is part of the deposit in the bank account then making addition in respect of those deposits in the bank account is highly unjustified and arbitrary. The third account is a saving bank account and the AO has made the addition of the deposits in the bank account without considering the earlier withdrawal from the said bank account. The learned AR has pointed out that the actual deposit in all three bank accounts during the year is Rs. 44,45,070/- and not Rs. 20,26,000/- for which the AO has made the addition. He has submitted that the AO has worked out this amount which is duly reflected in the cash flow statement. The learned AR has thus submitted that the assessee is an employee of M/s Manglam Service Station and a sum of Rs. 15,12,500/- belonging to Manglam Service Station deposited in the saving bank account of the assessee which was returned to M/s Manglam Service ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 24 Station. The said amount was very much part of the income declared by the Manglam Service Station which is also assessed to tax for number of years and maintaining books of accounts. He has further submitted that this amount is duly reflected in the cash flow statement filed by the assessee which is placed at page no. 60 of the paper book. The amount shown in the cash flow statement is duly tallied with the books of accounts of Manglam Service Station. The learned AR has pointed out that an identical addition was made by the AO for the assessment year 2009-10 which was deleted by the CIT(A) by accepting the contention that the said amount belonging to the firm M/s Manglam Service Station. He has thus submitted that the cash flow statement is matching with the transactions in the bank account, however, neither the AO nor the CIT(A) has examined and verified cash flow statement filed by the assessee. As regards the gift received from Smt. Babita of Rs. 10 Lac, the learned AR has submitted that she has given the gift from definite source. She is income tax assessee and filing return regularly hence, the entire finding in the remand report is not correct. Further the AO made the addition by considering only credit entries and completely ignored the debit entries which is not justified. 38. On the other hand, learned DR has submitted that the assessee has explained the source of deposits on the basis of the cash flow and also claimed the gift of Rs. 10 Lac as well as the deposit made by M/s Manglam Service Station. The AO verified the claim of the assessee during the remand proceedings and given finding in the remand proceedings which has been reproduced by the CIT(A) in para no. 19 of the impugned order. The assessee was asked to produce the books of accounts of M/s Manglam Service Station in support of the transaction of deposit of Rs. 15,12,500/- but the assessee has failed to submit the same. As regards, the gift of Rs. 10 Lac the assessee has shown the gift of Rs. 10 Lac received from one Smt. Babita in the cash flow statement. The assessee has produced only a gift deed in respect of the said amount of Rs. 10 Lac given in cash without mentioning date of gift. The creditworthiness of the donor is not proved as the assesse has not produced any ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 25 supporting evidence like ITR or copy of bank account statement from where the cash was withdrawn or any other source of the gift. The AO specifically asked the donor to explain the said gift of Rs. 10 Lac and in reply dated 10.02.2013, Smt. Babita stated that no gift received during the year therefore, the same is not applicable. The learned DR has relied upon the order of the CIT(A) and submitted that the assessee has failed to explain the deposits in the bank as well as the opening cash balance in the absence of regular books of accounts. The business income, tution income were also not supported by any documentary evidence and hence the same cannot be accepted. Since the AO accepted the salary income of Rs. 2,97,000/- therefore, the CIT(A) has deleted the addition to the extent of the said amount and upheld the balance addition of Rs. 17,29,000/-. 39. We have considered the rival submissions as well as relevant material on record. The entire case of the assessee is based on the cash flow statement which is placed at page no. 60 of the paper book. The assessee has shown opening cash balance of Rs. 2,13,947/- and the availability of the said opening cash balance is dependent upon the correctness of the cash flow statement for the assessment year 2009-10. As we have already set aside the issue of deposit in the bank for the assessment year 2009-10 so far as the source was explained by citing cash flow statement then this availability of the opening cash balance is a matter depending upon the outcome of the enquiry and examination of the cash flow statement for the assessment year 2009-10. The other source of deposit is the salary income which was accepted by the AO and therefore, there is no dispute on this issue before us. The other deposit in the bank account of the assessee of Rs. 15,12,500/- claimed to be belonging to Manglam Service Station. We find that an identical issue was involved in the assessment year 2009-10 and the CIT(A) deleted the addition of Rs. 10,12,820/- by accepting the explanation that the said amount belongs to Manglam Service Station. The relevant finding of the CIT(A) for the assessment year 2009-10 was given in para 34 of the CIT(Appeal’s) order. Therefore, this claim of the assessee ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 26 is also required to be reconsidered on verification of the relevant record of Manglam Service Station. The AO has rejected the claim of the assessee on the ground that the assessee could not produce the complete books of accounts of Manglam Service Station regarding the above transaction and also doubted the claim on the ground that why the assessee take the cash from Manglam Service Station and deposited in the saving bank account and returned to the firm .Accordingly, this issue requires a proper verification and examination at the level of the AO who shall conduct a proper enquiry by calling the record and explanation from Manglam Service Station apart from verification and correctness cash flow statement of the assessee. 40. As regards the gift of Rs. 10 Lac received from Smt. Babita , the assessee produced the gift deed in support of the claim. The AO in the remand report has rejected this claim as under:- “5. Gift from Babita of Rs. 10,00,000/- In this connection, it is to state that the assessee has shown gift received of Rs. 10,00,000/- from Smt. Babita in cash flow. The assessee was asked to explain about gift. In response to which he has submitted only gift deed stating that gift of Rs. 10,00,000/ given in cash without mentioning date on which gift given, without proof of identification /ITR and without proof of creditworthiness alongwith copy of bank account statement from where the cash withdrawn and explaining source. Hence, the above submission is remained cash credit u/s 68 and only creation of documentary evidence. Further, it is also interesting to bring your kind notice that the cash of Smt. Babita was also assessed in this circle and case record is also available in this office. On the perusal of assessment folder of Smt. Babita vaish for A.Y. 2010-11, the AO had issued notice u/s 142(1) dated 27.11.2011 wherein at question No. 8 that then AO was asked to assessee to details of gift, if any either taken or given, alongwith their confirmation during the year under consideration. In response to which Smt. Babita has submitted her reply dated 11.02.2013 which as under:- "That with reference to query no. 8. No gift received during the year therefore the same is not applicable. Keeping in view of the above facts, it is clear that either Smt. Babita is not given gift to anybody or submitted wrong facts in her proceedings/ submitting wrong ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 27 facts before in this proceedings, hence, the above submission is totally contradictory and without merit. Hence, the findings of above may be relied.” 41. The AO asked the donor about the details of the gift, if any, either taken or given alongwith their confirmation. In response, the donor stated that no gift received during the year which appears to be the reply to the query of the AO regarding any gift taken during the year but there was no reply regarding any gift given during the year. It appears that there was some mis-communication and confusion in the mind of the donor regarding the query raised by the AO due to the reason that AO has not specifically asked the donor about the gift given to the assessee but a general question was asked about the gift, if any either taken or given, in response to which the donor has stated that no gift received. Therefore, the entire confusion in the reply of the donor is due to a general question asked by the AO instead of specific question about the gift given to the assessee. Hence, in the facts and circumstances of the case, this issue is also required to be properly examined and verified by AO by way of recording the statement of donor as well as the other documentary evidence, if any, filed by the assessee. 42. The AO has also rejected the claim of source of deposit from the return income of the assessee comprising of tution income, business income and income from Vijay Stone Products total amounting to Rs. 3,40,784/- on the ground that the assessee has not given any supporting evidence. The relevant part of the remand report of the AO is as under:- “3. Business income of Rs. 3,40,784/- includes as under:- The actual fact of above income in ITR file is as under:- (a) Tuition Income Rs. 2,18,600/- (b) Business Income u/s 44AE Rs. 45,615/- (c) Income from Vijay Stone Products Rs. 76,569/- Total Rs. 3,40,784/- In this connection, it is to state that the assessee has declared business income & tuition income of Rs. 3,40,784/-. Regarding tuition fees the ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 28 assessee has not given any declaration. Regarding business income of Rs. 76,569/- it is submitted that on the perusal of assessee's account in the firm M/s Vijay Stone Products it is found that Shri Shashi is partner in this firm and made addition of Rs. 8,00,000/- but no singly amount withdrawn. The above submission of assessee is on assumption and not on actual fact.” 43. The assessee has shown in the cash flow statement drawings of Rs. 70,000/- and therefore, this amount of Rs. 3,40,784/- which is the income declared by the assessee in the ITR cannot be denied as source of deposit in the bank account without proper verification and examination of the relevant facts of short drawings on the part of the assessee. Accordingly, in the facts and circumstances of the case, we set aside this issue to the record of the AO for re-adjudication after conducting a proper verification and enquiry on this issue. 44. Ground no. 4 is regarding an addition of Rs. 16,82,700/- sustained by the CIT(A) out of the protective addition of Rs. 35,75,700/- made by the AO. The AO has made an addition of Rs. 20,26,000/- on account of unexplained deposits in the bank account in the joint name of the assessee and Smt. Munni Devi. The said addition was made on substantive basis in the hand of Smt. Munni Devi, mother of the assessee and a protective addition was made in the hands of the assessee in para 2.4 and 2.5 of the assessment order as under:- “2.4 Given the above and the fact that cash deposits made in bank accounts have not been explained by the assessee, no personal books and no cash flow having been produced, the following deposits are being treated as unexplained. Date Amount A.Y. Bank/A/c Shashi Vaish 16.05.2009 10000 2010-11 2781 PNB 30.05.2009 10000 2010-11 30.01.2010 20000 2010-11 16.05.2009 13000 2010-11 498 PNB 30.6.2009 10000 2010-11 21.08.2009 18000 2010-11 21.11.2009 10000 2010-11 24.12.2009 10000 2010-11 30.01.2010 10000 2010-11 ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 29 30.03.2010 22000 2010-11 22.6.2009 209000 2010-11 994 PNB 23.6.2009 5000 2010-11 4.7.2009 12000 2010-11 7.7.2009 241000 2010-11 23.7.2009 11,000 2010-11 11.8.2009 24500 2010-11 22.9.2009 100000 2010-11 23.9.2009 25000 2010-11 25.9.2009 10000 2010-11 10.10.2009 184000 2010-11 12.10.2009 585000 2010-11 15.10.2009 5000 2010-11 15.10.2009 80000 2010-11 20.10.2009 28000 2010-11 20.10.2009 37000 2010-11 20.10.2009 235500 2010-11 21.10.2009 50000 2010-11 24.10.2009 4000 2010-11 21.12.2009 47000 2010-11 Addition: 20,26,000 2.5 As discussed in para 2.5 in the case of Smt. Munni Devi (2010-11) the amount of cash deposit is being added protectively in the case of Shri. Shashi Vaish. Addition: Rs. 35,75,700.00 Nature of addition Amount Income as per return of income Rs. 4,42,600 As per para :2.3 Unexplained investment Rs. 34,13,920 As per para: 2.4 Unexplained cash deposit Rs. 20,26,000 As per para: 2.5 Protective Addition Rs. 35,75,700 Total 94,58,220 45. On appeal, the CIT(A) held that for the relevant period when the deposit was made, the bank account with the PNB belongs to assessee in which Smt. Munni Devi is a joint holder. The bank account at the time of deposits belongs to the assessee and not to Smt. Munni Devi who was inducted as joint holder subsequently. Therefore, considering the fact that the substantive addition made in the hand of Smt. Munni Devi was deleted the CIT(A) has sustained the addition of Rs. ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 30 16,82,700/- on substantive basis in the hands of the assessee after deleting a sum of Rs. 18,93,000/- which was added twice by the AO and found to be a duplicate addition. 46. Before the Tribunal, the learned AR of the assessee has submitted that the AO has even not mentioned as which entries were added from the respective bank account statement to arrive to the figure of Rs. 35,75,700/-. He has pointed out that total deposit in the said bank account during the year was Rs. 43,00,700/- and the same is explained in the cash flow statement showing all the entries of deposit in the bank account. Thus, he has referred to the cash flow statement to explain the availability of the cash for the said deposit made in the bank account. Neither the AO nor the CIT(A) has verified and examined the correctness of the cash flow statement. The learned AR has further submitted that the assessee has claimed the deposit made in the bank account belongs to him and not his mother. He has also referred to the submissions before the CIT(A) in case of Smt. Munni Devi and submitted that there is no conflicts between the stand of the assessee and his mother so far as the deposit in the bank account was made by the assessee and not by the mother. Therefore, the assessee has not objected to the treatment of this addition made by the CIT(A) on substantive basis. However, the learned AR has submitted that when the assessee has explained the source of deposit through the entries in the cash flow statement from definite source then the addition sustained by the CIT(A) is not justified. 47. On the other hand, learned DR has submitted that in the absence of any supporting evidence, the cash flow statement filed by the assessee cannot be accepted. 48. We have considered the rival submissions as well as relevant material on record. We find that in the remand report, the AO has objected that the assessee has not prepared day to day cash book to reflect fund flow. Accordingly, the AO rejected ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 31 the explanation of the assessee for want of supporting evidence. The CIT(A) has decided this issue in para 31 to 34 as under:- “31. The appellant has contended that the AO has made an addition of Rs. 20,26,000/- as per para 2.4 of the assessment order from three bank accounts of PNB which are as under:- Name of Bank Bank Account No. Deposit during the year in Bank accounts as per A.O. Remarks Punjab National Bank 2781 40,000/- Belongs to Shashi Vaish Punjab National Bank 498 93,000/- Reflected in cash flow statement Punjab National Bank 994 18,93,000/- Total Deposit Rs. 2026000/- That likewise as per para 2.5 the Assessing Officer added an amount of Rs. 35,75,700/- in respect of cash deposit in the said bank account No. 1001000100607994 of Punjab National Bank. In this way the Assessing Officer added the amount of Rs. 18,93,000/- and Rs. 35,75,700/- (includes Rs. 18,93,000/- also) from the same bank account. Hence Rs. 1893000/- is the duplicate addition. 32. On examination, I find that bank account No. 1001000100607994 of Punjab National Bank, belongs to the assessee in which Munni Devi is a joint holder. The appellant has stated that the transactions in the said bank account belongs the assessee and not to Smt. Munni Devi. It is noted that AO has made addition of Rs. 20,26,000/- from three bank accounts which includes deposit of cash of Rs. 18,93,000/- in bank account No. 1001000100607994 with Punjab National Bank. Further AO has added RS. 35,75,700/- in respect of cash deposit in bank account No. 1001000100607994 with Punjab National Bank, which includes Rs. 18,93,000/- from the same bank account. Hence Rs. 18,93,000/- is a duplicate addition. 33. Considering the above mentioned facts, I find that transaction in bank account No. 1001000100607994 of Punjab National Bank, belongs to the appellant hence the cash deposits made in this account shall be considered in the hands of Shashi Vaish. I find that the addition of Rs. 18,93,000/- on account of cash deposit in bank account No.1001000100607994 of Punjab National Bank, being a duplicate addition is found to be unjustified and is hereby deleted. 34. Further, with regard to addition of Rs. 16,82,700/- the cash flow statement submitted by the appellant during appellate proceeding is not found to be acceptable in the absence of any supporting evidence. Hence appellant's contention that cash deposit of Rs. 35,75,700/- is duly covered in the cash flow statement and thus the deposit and withdrawal are from disclosed sources is found to be without any merit.” ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 32 49. Thus, the CIT(A) has held that the cash flow statement submitted by the assessee is not found to be acceptable in the absence of supporting evidence. However, neither the AO nor the CIT(A) has verified the correctness of the entries in the cash flow statement though some of them are not in dispute regarding the salary income and business income. Similarly, certain entries in the cash book are in respect of the loan accounts, house loan as well as car loan therefore, the correctness of the cash flow statement depends upon the source of the cash as claimed by the assessee which is also involved in the other grounds raised by the assessee and therefore, the availability of the cash with the asessee as a source of deposit in the bank account can be ascertained only after the outcome of the each and every issue of deposit made from Manglam Service Station, gift received from Smt. Babita, opening cash balance and business income. Hence, in the facts and circumstances of the case, we set aside this issue to the record of the AO for re- adjudication of the same after proper verification and examination of the relevant details and correctness of the cash flow statement by conducting a proper enquiry. Needless to the say, the assessee be given an appropriate opportunity of before passing the fresh order. 50. In the result, the appeal of the assessee for A.Y. 2010-11 is allowed for statistical purpose. ASSESSMENT YEAR:2011-12 51. For the assessment year 2011-12, the assessee has raised the following grounds:- “1. That in any view of the matter assessment passed u/s 153C r.w.s 143(3) of the IT Act vide order dated 29.03.2013 by the Assessing Officer and his action as maintained by the CIT(A) vide her order dated 29.10.2018 is bad both on the facts and in law. 2. That in any view of the matter the lower authority failed to understand that the entire action u/s 132 of the Act and in consequences to the same notice so issued u/s 153C of the IT Act is illegal and without jurisdiction and also the fact that huge ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 33 and abnormal income was determined at Rs. 1,10,15,670/- as against the returned income of Rs. 3,52,750/- without support of any incriminating search material found and maintained partly is unjustified and illegal, hence the declared income should have been accepted in interest of justice. 3. That in any view of the matter observations and findings of the two lower authorities in their orders for making and maintaining the additions are quite unjustified, general, incorrect and contrary to the actual facts of the case and hence the same are liable to be sponged off in the interest of justice. 4. That in any view of the matter a sum of Rs. 3,96,500/- out of the addition of Rs. 72,49,000/- as made so Para 2.4 of the assessment order by alleging unexplained cash deposits in bank as maintained by the CIT(A) ignoring the correct facts of the case is highly unjustified and illegal therefore the addition made to be deleted in the facts and circumstances of the case. 5. That in any view of the matter the addition of Rs. 3,96,500/ on the basis of disclosed bank accounts as maintained by the Commissioner of Income Tax (Appeal) without appreciating the correct facts is highly unjustified, wrong and injustice because the bank accounts are not incriminating material, hence as per the settled law the addition is liable to be deleted in all fairness.” 52. Ground nos. 1 to 3 is regarding the validity of assessment year passed under section 153C r.w.s. 143(3). At the time of hearing, the learned AR of the assessee has stated at Bar that the assessee does not press ground nos. 1 to 3 and the same may be dismissed as not pressed. The learned DR has raised no objection if ground nos. 1 to 3 of the assessee’s appeal are dismissed as not pressed. Accordingly, ground nos. 1 to 3 of the assessee’s appeal are dismissed being not pressed. 53. Ground nos. 4 and 5 are regarding addition of Rs. 3,96,500/- sustained by the CIT(A) out of the total addition of Rs. 72,49,000/- made by the AO. The learned AR of the assessee has submitted that the AO made the addition in question in respect of the deposit made in the bank accounts belonging to the other persons / firms whereas only two accounts with PNB belong to the assessee. He has further submitted that the addition sustained by the CIT(A) of Rs. 3,96,500/- is unjustified as the CIT(A) has not considered the availability of fund as per the cash flow statement placed at page no. 50 of paper book. He has referred to the various entries of cash flow statement and submitted that the opening cash balance itself is ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 34 sufficient to explain this deposit which is sustained by the CIT(A) but neither the AO nor the CIT(A) has verified the correctness of the cash flow statement and rejected the same on the ground that it is an afterthought in the absence of books of accounts or any supporting evidence, the same cannot be accepted. Thus, the learned AR has submitted that the addition sustained by the CIT(A) is not justified when the assessee has explained the source of deposit before the CIT(A) by producing the cash flow statement and explaining the same in the written submissions. 54. On the other hand, learned DR has submitted that before the AO, the assessee has stated that the cash deposit in the bank account is from the definite source and a rotation of withdrawal and deposit to be considered. The learned DR has further submitted that the cash withdrawal from the bank account cannot be accepted as a further deposit when the assessee has not declared any business income for the year under consideration. He has relied upon the orders of the CIT(A). 55. We have considered the rival submissions as well as relevant material on record. Though, the AO made the addition of Rs. 72,49,000/- while passing the assessment order on account of unexplained deposit in the bank account however, the CIT(A) deleted the addition to the extent of Rs. 68,52,500/- by considering the fact that the said deposit was not in bank accounts of the assessee but in the bank accounts of the firms M/s R.J. Stone and M/s Manglam Stone Products etc,. The relevant finding of the CIT(A) in para 11 to 14 as under:- “11. I have examined the facts and circumstances of the case. I have considered the finding of the AO in the assessment order and in the remand report and the submission of the appellant made during appellate proceeding. The AO has noted that the cash deposit amounting to Rs. 72,48,920/- in three bank accounts 1001008700001501 (501) (5144), Punjab National bank, 1001002100505144(5144),Punjab National Bank, 1001008700001529 (0029) Punjab National Bank details of which have been given in para 2.4. of the assessment order has not been satisfactorily explained by the appellant. 12. The appellant has contended that it has bank accounts in PNB account No. 100100NC99902781(2781) and 1001001NG99901498 (498). Where as in the assessment order the Assessing Officer has mentioned account ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 35 No.1001008700001501 (501) in Punjab National Bank which is in the name of M/s R.J. Stone Products. Apart from this account no.1001002100505144 (5144) & 1001008700001529 (0029) in Punjab National Bank is in the name of M/s Mangalam Stone Products. In this way the Assessing Officer wrongly added the deposit entries in the said Punjab National Bank account No. 501, 5144 & 0029 which does not relate to the assessee. In this regard copy of bank statements of above bank account are enclosed at page no.64 to 68 of the paper book. The said bank accounts has duly been disclosed by the respective firms namely M/s R.J. Stone Products & M/s Mangalam Stone Products and in their cases bank accounts are duly reflected in the respective Audited balance sheet and copies of those balance sheet along with return receipt are enclosed. In the case of M/s R.J. stone Products even Assessment was made U/s 153C is enclosed. That regarding bank account No. 1001001NG99901498 in PNB and bank account No. 02261930016183 in HDFC the deposits are duly reflected in the cash flow statement and the deposit are from disclosed sources and out of earlier withdrawals. 13. On perusals of the bank statement and the audit report at page 63 to 100 of paper book it is noted that Account no. 1001001 NG99901498 with PNB pertains to Manglam Stone Product, account No.1001008700001501 with PNB pertains to R.J. Stone Products, Account No. 0029 pertains to Manglam Stone Product which are partnership concerns and are separately assessed to tax. Hence out of the total deposits of Rs. 72,49,000/- a sum of Rs. 68,52,500/- are the deposits which do not relate to the appellant and they belong to separate entities namely M/s R.J. Stone Products and M/s Manglam Stone Product, which are separately assessed to tax. 14. Considering the facts and circumstances of the case and the supporting evidence adduced by the appellant, I find that credit of RS. 68,52,500/- do not relate to the appellant but to the partnership firms namely M/s R.J. Stone Products and M/s Manglam Stone Product, hence the addition of Rs. 68,52,500/- made by the AO is held to be totally unjustified. Further with regard to the credit of Rs. 3,96,500/- I find that appellant has not adduced any cogent evidence to explain the source of deposit in the aforesaid bank accounts. The cash flow statement submitted at the appellate stage clearly looks to be an afterthought, in the absence of any books of account or any supporting evidence and hence cannot be accepted. In view thereof it is held that source of cash deposit of Rs. 3,96,500/- has not been satisfactorily explained and the addition of Rs. 3,96,500/- made by the AO, is hereby upheld. The appellant gets relief of Rs. 68,52,500/-. 56. Thus, the addition of Rs. 3,96,500/- was sustained by the CIT(A) by rejecting cash flow statement filed by the assessee. We find that the opening balance shown by the assessee in the cash flow statement itself is Rs. 7,97,474/- and there are withdrawals from the bank account to the tune of Rs. 59,60,925/-. The other source ITA Nos.1 to 3/ALLD/2019 Shashi Vaish 36 of fund shown is Rs. 1,50,000/- from Vijay Stone Products and Rs. 48,000/- from R.J. Stone Products. Therefore, all these entries are required to be verified by conducting a proper enquiry and specifically availability of the opening cash balance is dependent upon the outcome of the finding of the preceding assessment years and particularly in respect of the cash flow statement of the preceding years. Hence, in the facts and circumstances of the case, we set aside this issue to the record of the Assessing Officer for proper verification and examination and availability of the fund and correctness of the cash flow statement by conducting a proper enquiry as well as the availability of the opening cash balance as per the outcome of the enquiry of the preceding assessment year. Needless to say, the assessee be given an appropriate opportunity of hearing before passing the fresh order. The appeal of the assessee for A.Y. 2011-12 is allowed for statistical purpose. 57. In the result, the appeal of the assessee for assessment year 2009-10 is partly allowed and for assessment years 2010-11 and 2011-12 are also allowed for statistical purpose. Order pronounced in the open Court on 25.11.2022. Sd/- Sd/- [RAMIT KOCHAR] [VIJAY PAL RAO] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25/11/2022 Allahabad Sh Copy forwarded to: 1. Appellant-Shashi Vaish 2. Respondent-Asstt. Commissioner of Income Tax, C.C., Allahabad 3. CIT(A) 4. CIT 5. DR By order Sr. P.S.