Mr. Vijay Agarwal, Noida V. ACIT, Faridabad

ITA 311/DEL/2013

• Counselvise Citation: 31120114 RSA 2013
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 27-08-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 17-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R S MEENA
• Keywords: Gift; Search and seizure; Onus to prove
• Section: 80C; 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H , NEW DELHI) BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NOS.307, 308, 309, 310, 311 /DEL/2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2008-09, 2009- 10 & 2010-11 & C.O. NO.113/DEL/2013 (ASSESSMENT YEAR 2010-2011) MR. VIJAY AGARWAL, VS. ACIT, CENTRAL CIRCLE -1, HOUSE NO.854, SECTOR 15A, FARIDABAD FARIDABAD GIR / PAN:AAZPA6461C I.T.A.NO. 609/DEL/2013 (ASSESSMENT YEAR 2010-2011) DCIT, CENTRAL CIRCLE-1, VS. MR. VIJAY AGARWAL, FARIDABAD HOUSE NO.854, SECTOR 15A, FARIDABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DEEPAK KAPOOR, ADV. RESPONDENT BY : SHRI R. S. MEENA, CIT DR ORDER PER T.S. KAPOOR, AM: THIS IS A BUNCH OF APPEALS FILED BY THE ASSESSEE A GAINST SEPARATE ORDERS OF LD. CIT(A) ALL DATED 19.11.2012. I.T.A.N O. 609 IS FILED BY THE REVENUE FOR ASSESSMENT YEAR 2010-11 AGAINST THE DEL ETION OF AN AMOUNT OF RS.22 LACS BY LD. CIT(A). C.O. 113 ALSO RELATES TO ASSESSMENT YEAR 2010-11 WHICH HAS BEEN FILED BY ASSESSEE AGAINST AP PEAL FILED BY THE REVENUE. SINCE THESE APPEALS WERE HEARD TOGETHER, THEREFORE, FOR THE SAKE OF CONVENIENCE, COMMON AND CONSOLIDATED ORDER IS BEING PASSED. 2 ITA NO.307-311,609/DEL/2013 C.O.NO.113/DEL/2013 2. THE FACTS OF THE CASES ARE THAT A SEARCH AND SEI ZURE OPERATION U/S 132(1) WAS CARRIED OUT ON 06.11.2009 ON M/S. ACTION CONSTRUCTION EQUIPMENT LIMITED AND A SEARCH OPERATION U/S 132(1) WAS ALSO CARRIED OUT AT THE RESIDENCE OF THE DIRECTOR OF THIS COMPANY AT 854, SECTOR 15-A, FARIDABAD. IN CONSEQUENCE OF THE SEARCH, THE CASES OF THE ASSESSEE WERE REOPEN4ED U/S 153A OF THE ACT AND ASSESSMENTS WERE COMPLETED U/S 153A READ WITH SECTION 143(3) OF THE ACT. 3. ONE OF THE COMMON ISSUES INVOLVED IN THESE APPEA LS IS CONFIRMATION OF DENIAL OF CLAIM U/S 24(B) AND U/S 8 0C OF THE ACT. THIS ISSUE HAS BEEN TAKEN BY THE ASSESSEE IN HIS GROUNDS OF APPEAL AS GROUNDS NO.2 TO 6 IN ASSESSMENT YEAR 2006-07, GROUND NO.2 T O 4 IN ASSESSMENT YEAR 2007-08, GROUND NO.2 TO 4 IN ASSESSMENT YEAR 2 008-09, GROUND NO.2 TO 4 IN ASSESSMENT YEAR 2009-10 AND AS GROUND NO.4 TO 6 IN ASSESSMENT YEAR 2010-11. THE FACTS ABOUT THIS ISSU E IS THAT THE ASSESSEE HAD CLAIMED LOSS UNDER THE HEAD INCOME FROM HOUSE P ROPERTY BY CLAIMING DEDUCTION U/S 24(B) OF THE ACT IN RESPECT OF INTEREST PAID FOR PURCHASE OF HOUSE PROPERTY AND FURTHER DEDUCTION U/ S 80C WAS CLAIMED IN RESPECT OF REPAYMENT OF LOAN. LD. CIT(A) HAS CONFI RMED THE DENIAL OF SUCH DEDUCTIONS CLAIMED BY OBSERVING SIMILAR FINDIN GS IN EACH YEAR. FOR THE SAKE OF CONVENIENCE, THE FINDINGS OF LD. CIT(A) FOR ASSESSMENT YEAR 2006-07 ARE REPRODUCED BELOW: 5.1 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND THE IMPUGNED ORDER. THE ASSESSEE CONTENDED THAT THE PLOT PURCHASED WAS A HOUSE PROPERTY FOR WHICH A LOAN OF RS. 32 LAKHS WAS TAKEN FROM ICICI AS EVIDENCED BY THE BANK CERTI FICATE AND THAT, THE PROPERTY WAS ALSO RENTED OUT. ON THE OTHER HAND THE AO, IN PARA3.1 STATES THAT SPOT ENQUIRY WAS CONDUCTED AND THAT THE PLOT IN QUESTION WAS A VACANT PLOT ON WHICH SOME CONSTRUCTI ON WAS CARRIED ON. IT WAS THEREFORE HELD BY THE AO THAT TH E PROPERTY WAS 3 ITA NO.307-311,609/DEL/2013 C.O.NO.113/DEL/2013 NOT BEING UTILIZED FOR RESIDENTIAL PURPOSE AS NO RE NT AGREEMENT OR RENTALS WERE PUT FORTH. I FIND THAT THE LOAN WAS TA KEN ON 31.12.2005 ( DISBURSEMENT DATE) WHILE THE ENTIRE SALE CONSIDER ATION OF RS. 36,00,000/- WAS PAID VIDE CHEQUES DATED 04.10.2005 OF RS. 5 LAKHS AND RS. 7.5 LAKHS THROUGH HDFC BANK FARIDABAD WHILE RS. 23,50,000/- WAS PAID VIDE CHEQUES DATED 25.11.2005 OF ICICI BANK, FARIDABAD. THESE PAYMENTS ARE EVIDENT AT PAGE 6 OF THE COPY OF SALE DEED DATED 25.11.2005. IT WAS FURTHER THE C ASE OF THE ASSESSEE THAT NO BANK IN INDIA GIVES LOAN FOR PURCH ASE OF VACANT PLOT. THIS TO MY MIND IS INCORRECT AS BANK LOANS AR E ALSO OBTAINABLE FOR PURCHASE OF PLOTS BY REAL ESTATE DEVELOPERS. BE THAT AS IT MAY, FROM THE PAYMENT DETAILS IT IS EVIDENT THAT THE CON SIDERATION WAS PAID BEFORE THE LOAN COULD COME THROUGH. FURTHER TH ERE IS NO EVIDENCE TO SUBSTANTIATE THAT THE OSTENSIVE PLOT WI TH BUILDING HAS BEEN RENTED OUT AS ALSO OBSERVED BY THE AO. THE SAL E DEED NO DOUBT INDICATES PURCHASE OF RESIDENTIAL PLOT AND TH AT THE APPROVED BUILDING PLAN FOR CONSTRUCTION ON THE SAID PLOT WAS DONE BY THE VENDOR. IT IS HOWEVER DISCERNIBLE FROM THE IMPUGNED ORDER THAT THE ASSESSEE WAS AWARE OF THE ENQUIRY REPORT AS IN SUPP ORT OF ITS CLAIM THAT THERE WAS A BUILDING, THE ASSESSEE FURNISHED E LECTRICITY BILL WHICH I FIND PERTAINS TO THE PERIOD 24.11.2005, AS WELL AS WATER BILLS. THESE BILLS HOWEVER DO NOT NECESSARILY MEAN THAT THE BUILDING HAS BEEN LET- OUT. THE SPOT ENQUIRY REPORT SAYS CON STRUCTION IS CARRIED ON IN THE PLOT WHICH WOULD INDICATE THAT TH E ELECTRICITY/WATER BILL COULD BE RELATING TO THE BUI LDING UNDER CONSTRUCTION OR RENOVATION. IF IT WAS LET OUT THEN A RENT AGREEMENT COULD HAVE BEEN FILED AS A SUBSTANTIATION. HENCE, I AM AFRAID THE ASSESSEE HAS NO CASE AS THE ONUS TO PROVE THAT ITS CONTENTION OF RENTING OUT THE PROPERTY AND IN THIS CASE A HOUSE P ROPERTY IS LEGALLY AND FACTUALLY CORRECT REMAINS UN-DISCHARGED. HENCE THE DISALLOWANCE MADE BY THE AO U/S 24 AND U/S 80C ARE CONFIRMED. 4. AGGRIEVED WITH THE ORDER OF LD. CIT(A), THE ASSE SSEE IS IN APPEAL BEFORE US WHEREIN HE HAS TAKEN GROUND NO.1 IN ALL T HE YEARS AS A LEGAL GROUND BY WHICH HE HAD CLAIMED THAT NO INCRIMINATIN G MATERIAL WAS FOUND DURING THE SEARCH AND THEREFORE, THE ADDITION WAS N OT WARRANTED. HOWEVER, DURING PROCEEDINGS BEFORE US, LD. A.R. SUB MITTED THAT HE WILL 4 ITA NO.307-311,609/DEL/2013 C.O.NO.113/DEL/2013 NOT BE PRESSING THIS LEGAL GROUND AS CONTAINED IN G ROUND NO.1. THEREFORE, GROUND NO.1 IN ALL THE YEARS IS DISMISSED AS NOT PR ESSED. 5. REGARDING MERITS OF THE CASE IN RESPECT OF DENIA L OF DEDUCTION/ CLAIMED FROM INCOME FROM HOUSE PROPERTY, THE LD. A. R. SUBMITTED THAT IN THE 1 ST YEAR, I.E. IN ASSESSMENT YEAR 2006-07, PROPERTY WA S SELF OCCUPIED AND, THEREFORE, THERE WAS NO QUESTION OF RENT DEED. HOWEVER, IN RESPECT OF SUBSEQUENT YEARS, THE PROPERTY WAS RENTED OUT AND T HE RENT WAS DECLARED AS INCOME FROM HOUSE PROPERTY. IT WAS SUBMITTED TH AT NAME, ADDRESS, PAN OF THE TENANT WERE PROVIDED TO THE A.O. AND THE REFORE, THE ASSESSEE HAD COMPLETED HIS PART OF ONUS. IT WAS FURTHER SUB MITTED THAT THE ASSESSEE HAD PURCHASED A HOUSE PROPERTY WITH THE HELP OF HOU SING LOAN FORM ICICI BANK ON WHICH INTEREST WAS PAID AND ALSO REPAYMENT WAS MADE. IN SUPPORT OF HIS ARGUMENTS, THE LD. A.R. TOOK US TO P AGE 47 TO 63 OF THE PAPER BOOK WHERE A COPY OF SALE DEED WAS PLACED. OUR SPECIFIC ATTENTION WAS INVITED TO PAPER BOOK PAGE 49, WHEREIN THE FACT OF CONSTRUCTION OF BUILDING ON THE SAID PLOT WAS MENTIONED. AT PAGE 6 4 WHERE A CERTIFICATE ISSUED BY ICICI BANK WAS PLACED WHEREIN IT WAS MENT IONED THAT ASSESSEE HAD AVAILED A LOAN OF RS.32 LACS FOR PURCHASE OF SA ID PROPERTY. LD. A.R. ALSO TOOK US TO PAGE 61 WHERE A COPY OF ELECTRICITY BILL FOR THE ABOVE SAID PROPERTY WAS PLACED. PAGE 62 WAS ALSO REFERRED TO BY LD. A.R. TO SUBSTANTIATE THAT WATER CONNECTION WAS ALSO THERE I N THE SAID PROPERTY. IN VIEW OF ALL THESE DOCUMENTS, IT WAS ARGUED THAT IT WAS NOT A PLOT AS HELD BY LD. CIT(A) AS ELECTRICITY AND WATER CONNECTION C ANNOT BE GIVEN ON A VACANT PLOT. THEREFORE, HE ARGUED THAT FINDINGS OF LD. CIT(A) WERE NOT CORRECT. AS REGARDS THE SPOT ENQUIRY REFERRED TO B Y LD. CIT(A) IN HIS ORDER, LD. A.R. ARGUED THAT NO SUCH SPOT ENQUIRY WA S CONDUCTED AND IF SUCH ENQUIRY WAS CONDUCTED, THIS WAS NOT CONFRONTED TO THE ASSESSEE. 5 ITA NO.307-311,609/DEL/2013 C.O.NO.113/DEL/2013 6. LD. D.R. ON THE OTHER HAND ARGUED THAT THE ASSES SEE IN THE 1 ST YEAR HAD SUBMITTED THAT IT WAS SELF OCCUPIED PROPERTY AN D REFERRED TO PAGE 2 OF THE ASSESSMENT ORDER IN ASSESSMENT YEAR 2006-07. R EGARDING CLAIM OF THE LD. A.R. THAT ELECTRICITY AND WATER CONNECTIONS WERE EXISTING IN THE SAID PROPERTY LD. D.R. TOOK US TO PAPER BOOK PAGE 61 WHERE A COPY OF ELECTRICITY BILL WAS PLACED AND SUBMITTED THAT AS P ER THE BILL IT WAS ONLY FOR 66 UNITS WHICH SUGGESTS THAT BUILDING WAS NOT UTILI ZED FOR HOUSING PURPOSE AS OTHERWISE THE CONSUMPTION OF UNITS COULD NOT BE MERE 66 UNITS. HE SUBMITTED THAT NOBODY WOULD LIVE IN SUCH A BUILDING WHERE A SMALL CONSTRUCTION OF ABOUT 1000 SQ. FT WAS DONE ON A PLOT OF 1000 SQ. FEET WHICH SEEMS TO HAVE BEEN BUILT TO COMPLY WITH THE C ONDITIONS OF HOUSING DEVELOPMENT AUTHORITY. LD. D.R. FURTHER SUBMITTED THAT THE ASSESSEE DID NOT FILE ANY BILL OF WATER AND ELECTRICITY RELATING TO SUCCEEDING YEARS AND FILED THE SAME COPY OF BILLS FOR ALL THE YEARS. HE SUBMITTED THAT HAD IT BEEN A HABITABLE HOUSE PROPERTY, THE ASSESSEE COULD HAVE SUBMITTED ELECTRICITY BILL FOR VARIOUS YEARS IN SUPPORT OF HI S CLAIM. IT WAS SUBMITTED THAT EVEN BEFORE THIS TRIBUNAL, THE BILLS FOR SUCCE EDING YEARS HAS NOT BEEN FILED. AS REGARDS CERTIFICATE OF ICICI BANK PLACED AT PAPER BOOK PAGE 64, THE LD. D.R. SUBMITTED THAT IT IS CLEARLY MENTIONED ON THE CERTIFICATE THAT LOAN WAS FOR PLOT NO.86 SECTOR 21A, FARIDABAD AND N OWHERE, IT HAS BEEN MENTIONED THAT THE PROPERTY WAS A CONSTRUCTED PROPE RTY. WITHOUT PREJUDICE TO THE ABOVE, THE LD. D.R. ARGUED THAT LO AN FROM ICICI BANK WAS AVAILED AFTER PURCHASE OF PROPERTY AND THEREFOR E, SAME LOAN CANNOT BE SAID TO HAVE BEEN USED BY THE ASSESSEE FOR ACQUIRIN G HOUSE PROPERTY. THEREFORE, DEDUCTION U/S 24(B) AND 80C WERE RIGHTLY DENIED. 6.1 IN HIS REJOINDER, LD. A.R. SUBMITTED THAT AS PE R SALE DEED, THERE WAS A CONSTRUCTION OF 1250 SQ. FT AND THEREFORE, IT CAN NOT BE SAID TO BE A VACANT PLOT. IT WAS FURTHER SUBMITTED THAT EXISTENCE OF EL ECTRICITY AND WATER CONNECTION ITSELF WERE SUFFICIENT TO PROVE THAT BUI LDING WAS BEING USED FOR RESIDENCE BY TENANT WHO HAD BEEN PAYING RENT ALSO. 6 ITA NO.307-311,609/DEL/2013 C.O.NO.113/DEL/2013 7. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ASSESSEE HAD PU RCHASED THE PROPERTY ON 25 TH DAY OF NOVEMBER 2005 FOR A TOTAL CONSIDERATION OF RS.36 LACS FOR WHICH HE HAD MADE PAYMENT OF RS.36 LACS IN THE FORM OF 3 CHEQUES FOR RS.5 LACS, RS.7.50 LACS AND RS.23.50 LACS VIDE CHEQ UES DATED 04.10.2005, 04.10.2005 AND 25.11.2005. THESE FACTS ARE MENTION ED ON THE COPY OF THE SALE DEED ITSELF WHICH IS PLACED AT PAGES 50-52 AND THESE FINDINGS ALSO SUPPORT FINDINGS OF LD. CIT(A). ICICI BANK DISBURS ED THE AMOUNT OF RS.32 LACS ON 31.12.2005 WHICH IS APPARENT FROM PAP ER BOOK PAGE 63 WHERE A COPY OF LETTER ISSUED BY ICICI BANK IS PLAC ED. THEREFORE, THE LOAN TAKEN BY ASSESSEE FROM ICICI BANK CANNOT BE SAID TO BE TAKEN FOR THE PURPOSE OF PURCHASE OF THE SAID PROPERTY AS THE SAI D PROPERTY WAS ALREADY PURCHASED ON 25.11.2005 AND FULL PAYMENT OF CONSIDE RATION WAS ALREADY PAID AS IS APPARENT FROM THE COPY OF THE SALE DEED. ONE OF THE FACTORS WHICH WAS TAKEN INTO ACCOUNT BY LD. CIT(A) IS THAT ASSESSEE HAD NOT UTILIZED BORROWED FUNDS FOR ACQUISITION OF PROPERTY . THESE FACTS ARE VERIFIABLE FROM THE COPY OF SALE DEED ITSELF. THER EFORE, IN OUR CONSIDERED OPINION, LD. CIT(A) HAD ARRIVED AT THE CORRECT CONC LUSION THAT DEDUCTION U/S 24(B) AND U/S 80-C CANNOT BE ALLOWED TO THE ASS ESSEE. SECTION 24(A) AND 24(B) DEALS WITH THE DEDUCTIONS FROM HOUSE PROP ERTY, WHICH READS AS UNDER: 24. INCOME CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY SHALL BE COMPUTED AFTER MAKING THE FOLLOW ING DEDUCTIONS, NAMELY:- (A) A SUM EQUAL TO THIRTY PER CENT OF THE ANNUAL VALUE; (B) WHERE THE PROPERTY HAS BEEN ACQUIRED, CONSTRUCTED, REPAIRED, RENEWED OR RECONSTRUCTED WITH BORROWED CAPITAL, THE AMOUNT OF ANY INTEREST PAYABLE ON SUCH CAPITAL; 7 ITA NO.307-311,609/DEL/2013 C.O.NO.113/DEL/2013 7.1 THEREFORE, FROM THE ABOVE, IT IS APPARENT THAT DEDUCTION CAN BE ALLOWED TO ASSESSEE ONLY IF PROPERTY WAS ACQUIRED O UT OF BORROWED CAPITAL WHICH IS NOT THE CASE IN THE PRESENT APPEALS AS CLE ARLY HELD BY LD. CIT(A) AND BY US. THEREFORE, LD./ CIT(A) HAS RIGHTLY CONF IRMED THE ACTION OF A.O. AS REGARDS DEDUCTION U/S 80C FOR REPAYMENT OF LOANS, WE FIND THAT SECTION 80C ALSO APPLIES ONLY IF THE REPAYMENT IS M ADE FOR LOANS TAKEN FOR ACQUIRING HOUSE PROPERTY ASSETS. IN THE PRESENT CA SES, IT HAS BEEN ESTABLISHED THAT LOAN WAS NOT TAKEN FOR THE PURPOSE OF ACQUIRING ASSET AS ASSET WAS ALREADY ACQUIRED BEFORE DISBURSEMENT OF L OAN. THEREFORE, WE CONFIRM THE ACTION OF LD. CIT(A) TO THIS EFFECT ALS O. IN VIEW OF THE ABOVE, GROUNDS TAKEN BY THE ASSESSEE AGAINST THIS ISSUE IN VARIOUS YEARS IS DECIDED AGAINST THE ASSESSEE AND THE ORDER OF LD. C IT(A) IS CONFIRMED. 8. THE SECOND ISSUE TAKEN BY THE ASSESSEE RELATES T O ADDITION OF RS.5 LACS MADE BY A.O. IN ASSESSMENT YE2007-08. THE A.O . HAS MADE THIS ADDITION ON ACCOUNT OF UNACCOUNTED ESTIMATED EXPENS ES INCURRED BY THE ASSESSEE ON ACCOUNT OF BIRTHDAY OF HIS GRANDSON. L D. CIT(A) HAS CONFIRMED THE ACTION OF THE A.O. BY HOLDING AS UNDE R: 7.1 I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTI ONS. IT IS NOT IN DISPUTE THAT THE ASSESSEE CELEBRATED HIS GRANDSON'S BIRTHDAY BY ORGANIZING A PARTY AT THE MARRIOT HOTEL. FROM THE I MPUGNED ORDER IT IS SEEN THAT THE ASSESSEE WAS ASKED TO EXPLAIN T HE SOURCE OF EXPENSES INCURRED ON THE BIRTHDAY PARTY TO WHICH VI DE LETTER DATED 30.08.2011, IT WAS SUBMITTED AS UNDER:- AS FAR AS FUNCTION OF BIRTHDAY OF GRANDSON OF SHRI VIJAY AGGARWAL MARRIOT HOTEL IN 2006, THE BILL IS NOT TRACEABLE AN D TO BUY PEACE OF MIND, THE ASSESSEE SURRENDERS AMOUNT OF RS. 50,000/ - SUBJECT TO NO PENAL ACTION WHICH IS THE APPROXIMATE EXPENDITURE I NCURRED ON THAT FUNCTION. ON BEING ASKED AGAIN TO EXPLAIN THE SOURC E OF EXPENSES IT WAS MERELY SUBMITTED THAT 'IT WAS A SMALL PARTY ORG ANIZED AT MARRIOT WELCOME ON 07.10.2006 AND THE EXPENSES ON T HIS ACCOUNT WERE METED OUT BY MATERNAL SIDE OF THE CHILD AND CA SH GIFTS RECEIVED FROM THE GUESTS'. 8 ITA NO.307-311,609/DEL/2013 C.O.NO.113/DEL/2013 IT WAS THEREFORE THE AO'S CASE THAT THE CONTENTION AS EVIDENT FROM THE STATEMENT WERE CONTRADICTORY AND CONSIDERING TH E SOCIAL STATUS AND ASSESSEE HIMSELF HAVING SUFFICIENT SOURCES OF H IS OWN, THE CONTENTION THAT THE EXPENSES OF THE FUNCTION WAS OR GANIZED BY THE MATERNAL SIDE AND GIFTS RECEIVED FROM GUESTS WAS FO UND NOT ACCEPTABLE. I FIND THAT THE AO'S ARGUMENTS HAVE SOM E STRENGTH. THE UNDISPUTED FACT IS THAT THE BIRTHDAY PARTY WAS HELD IN A FIVE STAR. THAT THE AO ASKED THE ASSESSEE TWICE TO EXPLAIN THE EXPENSES INCURRED BUT THE BILL WAS STATED NOT TRACEABLE. IN THIS BACKDROP, MERE OFFERING OF RS. 50,000/- TOWARDS THE EXPENSES IS NOT REALLY JUSTIFIABLE. NO DOUBT ADDITIONS SHOULD NOT BE MADE ON ESTIMATES BASIS BUT IN THIS CASE THE UNDISPUTED FACTS DO NOT GO IN FAVOR THE ASSESSEE. HENCE CONSIDERING THE FACTS AND CIRCUMSTA NCES OF THE CASE I AM INCLINED TO UPHOLD THE ADDITION OF RS. 5 LAKHS. HENCE ASSESSEE FAILS ON THIS GROUND OF APPEAL. 9. BEFORE US, LD. A.R. SUBMITTED THAT THE ASSESSEE HIMSELF HAD OFFERED RS.50,000/- AS EXPENSES FOR THE SAID BIRTHDAY. IT WAS FURTHER SUBMITTED THAT THE ASSESSEES SON HAD INVITED FOR THE SAID BI RTHDAY PARTY AND IN THIS RESPECT, OUR ATTENTION WAS INVITED TO PAPER BOOK PA GE 82 WHERE A COPY OF INVITATION LETTER WAS PLACED. THE LD. A.R. SUBMITT ED THAT THE ESTIMATE WAS MADE WITHOUT ANY BASIS AND WITHOUT CONSIDERING THAT FATHER WOULD HAVE INCURRED THE EXPENSES AND MOREOVER RELATIVES FROM T HE MATERNAL SIDE WOULD ALSO HAVE CONTRIBUTED TO THE EXPENSES AND WIT HOUT CONSIDERING THESE FACTS, THE A.O. ESTIMATED THE EXPENSES ARBITR ARILY AND ON ASSUMPTIONS ONLY. 10. LD. D.R. ON THE OTHER HAND SUBMITTED THAT DESPI TE VARIOUS REQUESTS, THE ASSESSEE DID NOT SUBMIT DETAILS OF EXPENSES INC URRED ON THE OCCASION OF BIRTHDAY PARTY AND THEREFORE, THE A.O. KEEPING I N VIEW THE FACT THAT ASSESSEE HAD ORGANIZED THE PARTY AT A FIVE STAR HOT EL AND KEEPING IN VIEW HIS STATUS, HAD ESTIMATED THE EXPENSES. HE FURTHER ARGUED THAT THE CLAIM OF THE ASSESSEE THAT EXPENSES WERE INCURRED OUT OF GIF TS RECEIVED FROM THE GUESTS, DOES NOT HAVE ANY FORCE. 9 ITA NO.307-311,609/DEL/2013 C.O.NO.113/DEL/2013 11. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THOUG H THE MATERIAL PLACED ON RECORD. WE FIND THAT INVITATION AS PLACE D IN PAPER BOOK PAGE 82 IS FROM SAURABH AND NISHU AGARWAL WHO ARE SON AND D AUGHTER IN LAW OF THE ASSESSEE. THE A.O. HAS MADE WHOLE OF THE ADDIT ION IN THE HANDS OF THE ASSESSEE WHICH IS NOT JUSTIFIED. THEREFORE, KE EPING IN VIEW ALL THE FACTS AND CIRCUMSTANCES, WE HOLD THAT THE ADDITION OF RS.2.50 LACS WILL MEET THE ENDS OF JUSTICE AND IN VIEW OF THE ABOVE, GROUND NO.5 IN ASSESSMENT YEAR 2007-08 IS PARTLY ALLOWED. 12. THE 3 RD ISSUE RAISED BY THE ASSESSEE RELATES TO ASSESSMENT YEAR 2010-11 WHEREBY ASSESSEE IS AGGRIEVED WITH THE CONF IRMATION OF THE ADDITION MADE BY THE A.O. ON ACCOUNT OF 89 LIQUOR B OTTLES FOUND AT THE RESIDENCE OF THE ASSESSEE. LD. CIT(A) HAS CONFIRME D THIS ADDITION BY HOLDING AS UNDER: 4.1 DECISION: THE ASSESSEE'S SUBMISSION HAS BEEN S EEN AS ALSO THE IMPUGNED ORDER. THE AO HAS CLEARLY STATED THAT ASSE SSEE HAS NOT CLARIFIED WHICH OF THE LIQUOR BOTTLES WERE GIFTED/ PURCHASED NOR THE SOURCE OF INVESTMENT FOR THE LATTER. MERELY STATING THAT THE WITHDRAWAL WERE RS. 20,00,000/- CANNOT BE TAKEN PER -SE TO COVER THE INVESTMENT IN THESE LIQUOR BOTTLES IN THE ABSEN CE OF ANY SORT OF CORROBORATION. IT WAS THEREFORE IMPERATIVE ON THE P ART OF THE ASSESSEE TO CLARIFY THE POSITION SO THAT THE LD AO IS ABLE TO COME TO A FINDING. THIS HAS NOT BEEN DONE. NO DOUBT THE BRA NDS OF THE LIQUOR BOTTLES HAS NOT BE ELUCIDATED BUT I FIND THA T THE AO HAS MENTIONED THAT SOME OF THE BOTTLES ARE HIGH VALUE A S EXPENSIVE AS RS. 10,000/- PER BOTTLE WHILE OTHER COST BETWEEN RS . 1500/- TO RS. 5000/- . HENCE I AM STRONGLY INCLINED TO HOLD THAT THE ADDITION OF RS.2,22,500/- ON THIS ACCOUNT IS FAIR AS THE AVERAG E RATE HAS BEEN TAKEN AT RS. 2500/- PER BOTTLE. CONSEQUENTLY THE AS SESSEE FAILS ON THIS GROUND OF APPEAL. 13. BEFORE US, LD. A.R. SUBMITTED THAT THE ASSESSEE WAS LIVING ALONG WITH HIS SON AND DAUGHTER IN LAW AND THE WHOLE ADDI TION HAS BEEN MADE IN THE HANDS OF THE ASSESSEE WHICH IS NOT JUSTIFIED. IT WAS FURTHER SUBMITTED 10 ITA NO.307-311,609/DEL/2013 C.O.NO.113/DEL/2013 THAT WHISKY BOTTLES WERE ACCUMULATED OVER THE YEARS AND WERE PURCHASED OUT OF WITHDRAWALS MADE BY THE ASSESSEE DURING VARI OUS YEARS AND, THEREFORE, THE ENTIRE VALUE OF THE BOTTLES CANNOT B E ADDED IN THE HANDS OF THE ASSESSEE IN ONE YEAR SPECIFICALLY KEEPING IN VI EW THE FACT THAT ASSESSEE HAS BEEN MAKING SUBSTANTIAL AMOUNTS FOR WITHDRAWALS AND MOREOVER PART OF BOTTLES WERE RECEIVED AS GIFTS. IT WAS FURTHER SUBMITTED THAT ASSESSEE WAS A NON DRINKER, THEREFORE, BOTTLES KEPT ON ACCUM ULATING. 14. LD. D.R. ON THE OTHER HAND SUBMITTED THAT BOTTL ES WERE FOUND IN THE HOUSE OF THE ASSESSEE AND THIS WAS ADMITTED BY THE ASSESSEE THAT THE SAME BELONGS TO HIM AND, THEREFORE, THE ADDITION WAS RIG HTLY MADE. 15. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROU GH THE MATERIAL PLACED ON RECORD. WE FIND THAT DURING THE ASSESSME NT PROCEEDINGS, THE ASSESSEE HAD CLAIMED THAT HE IS A NON DRINKER AND B OTTLES WERE ACCUMULATED OVER A PERIOD OF YEARS AS PART OF GIFTS FROM FRIENDS AND RELATIVES AND SINCE HE WAS NON DRINKER, THE BOTTLES KEPT ON ACCUMULATING. HE HAD FURTHER SUBMITTED THAT HE HAD ONLY PURCHASED 12 BOTTLES FOR AN AMOUNT OF RS.14,400/- WHICH WAS A SMALL AMOUNT KEEP ING IN VIEW HIS WITHDRAWALS. HOWEVER, THE A.O. DID NOT ACCEPT HIS CONTENTION AND LD. CIT(A) ALSO DID NOT ACCEPT THE SUBMISSIONS OF THE A SSESSEE. IN OUR VIEW, SINCE THE ASSESSEE WAS STAYING IN A JOINT FAMILY CO NSISTING OF HIS SON AND DAUGHTER IN LAW AND MOREOVER ALL BOTTLES CANNOT BE SAID TO HAVE BEEN PURCHASED IN ONE YEAR AND THE EXISTENCE OF SO MANY BOTTLES CAN ONLY POINT OUT TO THE FACT THAT THESE MUST HAVE BEEN ACCUMULAT ED OVER A PERIOD OF TIME. THEREFORE, IN THE INTEREST OF JUSTICE & KEE PING IN VIEW ALL FACTS AND CIRCUMSTANCES, WE HOLD THAT AN ADDITION OF RS.1 LA C WILL MEET THE ENDS OF JUSTICE. IN VIEW OF THE ABOVE, GROUNDS NO.2 & 3 IN ASSESSMENT YEAR 2010-11 ARE PARTLY ALLOWED. 11 ITA NO.307-311,609/DEL/2013 C.O.NO.113/DEL/2013 16. THE REST OF THE GROUNDS IN ALL THE APPEALS RELA TE TO DEDUCTION / EXEMPTION U/S 24(B) AND 80C OF THE ACT WHICH HAVE ALREADY BEEN DEALT WITH. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES , THE APPEALS FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2006-07, 2008-09 A ND 2009-10 ARE DISMISSED WHEREAS, APPEALS IN ASSESSMENT YEAR 2007- 08 AND 2010-11 ARE PARTLY ALLOWED. 17. NOW, COMING TO APPEAL FILED BY THE REVENUE IN I .T.A.NO. 609/DEL/2013, THE REVENUE IS AGGRIEVED WITH THE DEL ETION OF RS.22 LACS OUT OF CASH FOUND AT THE PREMISES OF THE ASSESSEE. 18. LD. D.R. SUBMITTED THAT THERE WAS NO ENTRY REC ORDED IN THE CASH BOOK AND ASSESSMENT ORDER WITH RESPECT TO ADDITION OF RS.22 LACS WAS READ. IT WAS SUBMITTED THAT LD. CIT(A)S ORDER IN THIS REGARD IS CRYPTIC AND NON SPEAKING. IT WAS FURTHER SUBMITTED THAT TH ERE WAS NO MATERIAL TO SHOW THE ADJUSTMENT BETWEEN 01.11.2009 TO 06.11.200 9. HE FURTHER ARGUED THAT ASSESSEE VIDE LETTER DATED 30.11.2010 H AD SUBMITTED THAT RECONCILIATION OF CASH BOOK WILL BE FILED BUT THERE IS NO EVIDENCE AS TO WHEN RECONCILIATION WAS FILED. SO, IT WAS ARGUED T HAT MATTER SHOULD BE REVERTED BACK TO THE A.O. FOR READJUDICATION. 19. LD. A.R. ON THE OTHER HAND REFERRED TO PAPER BO OK PAGE 5 WHERE RECONCILIATION OF CASH FOUND WAS PLACED AND ALSO RE LIED UPON PARA 6 PAGE 6 OF THE LD. CIT(A)S ORDER IN THE CASE OF ACTION C ONSTRUCTION CO. AND SUBMITTED THAT ADDITION ON ACCOUNT OF EXCESS CASH F OUND WAS EXPLAINED TO LD/. CIT(A) AND LD. CIT(A) HAS HELD THAT THERE WAS NO EXCESS CASH AS THE CASH WAS EXPLAINED AS PER BOOKS OF ACCOUNTS. 20. AS REGARDS C.O. FILED BY THE ASSESSEE, THE LD. A.R. SUBMITTED THAT ENTIRE CASH FOUND AT THE COMMON RESIDENCE CANNOT BE ADDED IN THE HANDS OF ASSESSEE AND MOREOVER, IT WAS SUBMITTED THAT REC ONCILIATION STATEMENT, 12 ITA NO.307-311,609/DEL/2013 C.O.NO.113/DEL/2013 AND STATEMENTS RECORDED U/S 132(4) CANNOT BE IGNORE D. LD.D.R. HOWEVER REITERATED HIS SUBMISSIONS. 21. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT IN THE CASE OF ACTI ON EQUIPMENTS LTD., THE LD. CIT(A) VIDE ORDER DATED 09.08.,2012 HAS DELETED THE ADDITION ON ACCOUNT OF EXCESS CASH. LD. CIT(A) HAD DELETED THE ADDITION BY HOLDING THAT TOTAL CASH IN HAND FOR THE COMPANY AS A WHOLE AS PER BOOKS OF ACCOUNTS WAS MORE THAN TOTAL CASH FOUND DURING SURV EY AND THERE WAS NO UNACCOUNTED CASH. LD. CIT(A) HAS RECORDED HIS FIND INGS AS UNDER:: 5.1 DECISION: I HAVE CONSIDERED THE RIVAL CONTENTI ONS OF BOTH THE LD. A.O. AND THE ASSESSEE. IT IS AMPLY CLEAR FROM THE STATEMENT OF MR. P K BANSAL RECORDED UNDER SECTION 132(4) OF THE INCOME TAX ACT, 1961 WHICH HAS BEEN RELIED UPON BY THE LD. A.O . HIMSELF THAT THE CASH BALANCE OF THE COMPANY M/S. ACTION CONSTRU CTION EQUIPMENT LTD. WAS RS.23,32,290.28 AS ON 25.03.2009 , CERTIFIED COPY OF WHICH WERE SUBMITTED IN APPEAL. THIS COPY OF THE STATEMENT WHICH I HAVE NO REASON TO DISCARD BEING DULY CERTIF IED, PERTAINS TO AN APPARENT OVER-WRITING OF THE DATE WHICH IS NOW C LEAR TO BE 25.03.2009. THE ASSESSEE ALSO FILED THE PHOTOCOPY OF THE CASH BOOK OF THE SAID COMPANY FOR THE PERIOD FROM 15.03.2009 TO 31.03.2009. THE CASH BALANCE OF THE SAID COMPANY AS ON 31.10.20 09 WAS RS.83,90,721/-. ON THE DATE OF THE SEARCH I.E. 6.1 1.2009 THE CASH BALANCE WAS RS. 83,90,721/- LESS ADJUSTMENT (FOR TH E PERIOD FROM 1.11.2009 TO 6.11.2009). I FIND THAT THE ADDITION OF RS./22,00,000/- TO THE INCOME OF THE ASSESSEE BY THE LD. A.O. IS MA INLY ON THE GROUND THAT THE CASH BALANCE OF THE SAID COMPANY WA S 23.32.290/- ON THE DATE OF SEARCH. SINCE THE CASH BALANCE ON THE DATE OF SEARCH HAS BEEN WRONGLY TAKEN BY THE LD. A.O. AT RS .23,32,290/- INSTEAD OF 83,90,721/-, I HOLD THAT THE CASH BALANC E FOUND WITH THE ASSESSEE AT THE TIME OF SEARCH STANDS EXPLAINED. I THEREFORE, DELETE THE ADDITION OF RS.22,00,000/-. 22. WE ARE IN AGREEMENT WITH THE FINDINGS OF LD. C IT(A) THEREFORE, APPEAL FILED BY THE REVENUE IS DISMISSED. 13 ITA NO.307-311,609/DEL/2013 C.O.NO.113/DEL/2013 23. IN VIEW OF THE ABOVE, C.O. FILED BY THE ASSESSE E HAS BECOME INFRUCTUOUS AND, THEREFORE, SAME IS ALSO DISMISSED. 24. IN A NUTSHELL, THE APPEALS IN I.T.A.NO. 307, 3 09 AND 310/DEL/2013 FILED BY THE ASSESSEE ARE DISMISSED WHEREAS APPEALS IN I.T.A.NO. 308, 311/DEL2013 ARE PARTLY ALLOWED AND C.O. NO.113/DEL/ 2013 STAND DISMISSED AS INFRUCTUOUS AND APPEAL IN I.T.A.NO. 60 9/DEL/2013 FILED BY THE REVENUE IS DISMISSED. 23. ORDER PRONOUNCED IN THE OPEN COURT ON 15.10.201 4. SD./- SD./- (I.C. SUDHIR) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 15.10.2014 SP COPY FORWARDED TO:- THE APPELLANT THE RESPONDENT THE CIT THE CIT (A)-, NEW DELHI. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING DATE OF DICTATION DATE OF TYPING DATE OF ORDER SIGNED BY BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET & SENT TO THE BENCH CONCERNED.