Dr. Raja Ram Shukla, V. DCIT, Faizabad

ITA 324/LKW/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48352 (ITAT-LUCKNOW)
• Duration Of Justice: 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 02-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K B AJAJ
• Assessee Lawyers: M P MISHRA
• Keywords: Unexplained investment; Gift; Valuation report
• Section: 142(1); 133A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A - BENCH, LUCKNOW. BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT AND SHRI N.K.SAINI, ACCOUNTANT MEMBER I.T.A.NOS.324, 325 & 326(LKW.)/2011 A.YS. : 2002-03, 2003-04 & 2005-06 DR. RAJA RAM SHUKLA, VS. THE DY.CIT, RAMGARGH ROAD, JALALPUR, CIRCLE-FAIZABAD, FAIZABAD. DISTRICT-AMBEDKAR NAGAR. PAN AGKPS8832J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.P.MISHRA, ADVOCATE RESPONDENT BY : SHRI P.K.BAJAJ, SR.D.R. O R D E R PER BENCH THESE THREE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS EACH DATED 22.3.2011 OF THE LD.CIT(A)-I, LUCKNOW. SOME OF THE ISSUES INVOLVED ARE COMMON AND THE APPEALS WERE HEARD TOGETHER, SO THESE APPEALS ARE DISPOSED OF BY CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE WILL DEAL WITH I.T.A.NO.324(LKW)/2011. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL. 1. THAT THE LEARNED C.I.T.(APPEALS) HAS ERRED IN LAW AND ON FACTS IN FAILING TO ANNUL THE ASSESSMENT ORDER DATED 20-12-2007 PASSED U/S 147 READ WITH SECTION 148 OF THE I.T.ACT, 1961, SINCE THE NOTICE U/S 148 WAS ISSUED BY THE INCOME-TAX OFFICER, AFTER EXPIRY OF FOUR YEARS FROM THE END THE ASSESSMENT YEAR WITHOUT HAVING THE SATISFACTION OF THE JOINT COMMISSIONER RECORDED AS PER PROVISIONS OF SECTION 151(2) IF THE I.T. 2 ACT,1961. 2. THAT THE LEARNED C.I.T.( APPEALS) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ACTION U/S 147/148 OF THE I.T. 1961, WHICH THE LEARNED AO HAS TAKEN SOLELY ON THE BASIS OF DVOS REPORT WITHOUT APPLYING HIS OWN MIND. 3. THAT WITHOUT PREJUDICE TO GROUNDS OF APPEAL NO.1 & 2, IT IS SUBMITTED THAT THE LEARNED C.I.T.(APPEALS) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING ARBITRARILY THE DISALLOWANCE OF RS.12,000 OUT OF SALARY PAID. 4. THAT WITHOUT PREJUDICE TO GROUNDS OF APPEAL NO.1 & 2, IT IS SUBMITTED THAT THE LEARNED C.I.T. (APPEALS) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ARBITRARY ADDITION FOR INADEQUATE WITHDRAWALS TO THE EXTENT OF RS.22,500. 5. THAT THE APPELLANT CRAVES FOR PERMISSION TO AMEND ANY ONE OR ALL THE AFORESAID GROUNDS OF APPEAL AND/OR TO RAISE FRESH GROUNDS OF APPEAL. 3. GROUNDS NO.1AND 2 WERE NOT PRESSED, SO THESE ARE DISMISSED AS NOT PRESSED. 4. VIDE GROUND NO.3, THE GRIEVANCE OF THE ASSESSEE RELATES TO THE DISALLOWANCE OF RS.12,000 OUT OF SALARY. 5. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 6.8.2002 DECLARING TOTAL INCOME OF RS.1,09,052. NO ASSESSMENT WAS FRAMED. THE AO ISSUED NOTICE UNDER SECTION 148 ON 18.12.2006 AFTER RECORDING THE PROPER REASONS. IN RESPONSE TO THE SAID NOTICE, NO RETURN WAS FILED. IN ORDER TO COMPLETE THE ASSESSMENT, THE AO ISSUED NOTICES UNDER 3 SECTION 142(1) AND 143(2) OF THE INCOME-TAX ACT,1961. DURING THE ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT A SURVEY UNDER SECTION 133A WAS CONDUCTED ON 21.6.2006 IN THE BUSINESS PREMISES OF THE ASSESSEE AND THE STATEMENT OF THE ASSESSEE WAS RECORDED DURING THE COURSE OF SURVEY. THE ASSESSEE STATED THE NAMES OF ALL THE EMPLOYEES AND THEIR PER MONTH SALARY AS PER FOLLOWING DETAILS: RAKESH YADAV X-RAY MAN 1,000 PER MONTH SATISH - 500 P.M. SATYA PAL COMPOUNDER 500 P.M. SHARMA-VIJAY HELPER FREE SURENDRA COMPOUNDER 300 P.M. CHIKHARU SWEEPER 500 P.M. 5.1 THE AO POINTED OUT THAT DURING THE YEAR UNDER CONSIDERATION, THERE WAS NO X-RAY MACHINE. THUS, THE SALARY DURING THE YEAR SHOULD NOT BE MORE THAN RS.1,800 (RS.500 + RS.500 + RS.300 + RS.500) PER MONTH. HE FURTHER OBSERVED THAT THE ASSESSEE HAD CLAIMED SALARY EXPENSES OF RS.63,695 AND THAT THE VOUCHERS FOR VERIFICATION WERE NOT PRODUCED. HE ADDED A SUM OF RS.42,095 (RS.63,695- 12 X 1800). 6. THE ASSESSEE CARRIED THE MATTER TO THE LD.CIT(A), WHO CONFIRMED THE ADDITION OF RS.12,000 BY OBSERVING AS UNDER : (III) (IV) 3.1 I HAVE CAREFULLY CONSIDERED THE FACTS AND I FIND THAT THE AMOUNTS OF SALARY STATED IN THE STATEMENT RECORDED DURING THE SURVEY COULD NOT BE TAKEN AS THE SOLE BASIS FOR EXAMINING THE ADMISSIBILITY OF CLAIM WITHOUT ANY REFERENCE TO THE POSITION REFLECTED IN THE BOOKS OF ACCOUNTS. BESIDES A FACT STATED ON THE DATE OF SURVEY IN JUNE 2006 COULD NOT BE PRESUMED TO EXIST DURING THE ACCOUNTING YEAR 2001-02 RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. HOWEVER, AS REGARDS THE CLAIM FOR SALARY TO THE X-RAY MACHINE OPERATOR, IT IS A FACT THAT THE ASSESSEE DID NOT HAVE ANY X-RAY MACHINE AND, THEREFORE, NO SUCH SALARY COULD OBVIOUSLY BE PAID . IN THESE CIRCUMSTANCES, THE DISALLOWANCE OF CLAIM FOR SALARY TO THE EXTENT OF RS.12,000/- CLAIMED TO HAVE BEEN PAID TO X-RAY MACHINE OPERATOR (@RS.1,000/- P.M.) IS CONFIRMED AND THE BALANCE CLAIM OF RS.51,695/- IS ALLOWED. 4 7. BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL. 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) HAS SUSTAINED THE DISALLOWANCE ON THE BASIS OF THE FACT THAT DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE DID NOT HAVE ANY X-RAY MACHINE WHEREAS IN THE STATEMENT RECORDED DURING THE SURVEY UNDER SECTION 133A, THE ASSESSEE ALLEGED THAT RS.1,000 WAS BEING PAID TO THE TECHNICIAN, WHO OPERATED THE X-RAY MACHINE. IT WAS STATED THAT THE SAID TECHNICIAN WAS OPERATING THE X-RAY MACHINE SINCE 2004-05 AND WAS CALLED AS X-RAY MAN ON 21.6.2006 I.E. THE DATE OF SURVEY, BUT IN EARLIER YEARS HE WAS EMPLOYED AT THE CLINIC AND WORKING AT ULTRASOUND MACHINE, WHICH WAS PURCHASED IN THE YEAR 2000. THEREFORE, THE LD.CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE DISALLOWANCE OF SALARY TO THE EXTENT OF RS.12,000. 9. IN HIS RIVAL SUBMISSIONS, THE LD.D.R. SUPPORTED THE ORDER OF THE LD.CIT(A). 10. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND THE MATERIAL ON RECORD IT APPEARS THAT THE LD.CIT(A) CONFIRMED THE DISALLOWANCE OF RS.12,000 FOR THE REASON THAT THE ASSESSEE CLAIMED THAT THE SAID SALARY WAS PAID TO SHRI RAKESH YADAV, X-RAY MAN, BUT THERE WAS NO X RAY MACHINE. ON THE CONTRARY, THE CONTENTION OF THE ASSESSEE IS THAT THE SAID PERSON WAS DESIGNATED AS X-RAY MAN SINCE 2000 WHEN X-RAY MACHINE WAS IN OPERATION, BUT LATER ON HE WAS WORKING FOR ULTRASOUND. IN THE INSTANT CASE, NOWHERE, IT IS STATED THAT SHRI RAKESH YADAV WAS NOT AN EMPLOYEE OF THE ASSESSEE AND WAS NOT RENDERING SERVICE TO THE ASSESSEE, SO, MERELY ON THIS BASIS THAT HIS DESIGNATION WAS X-RAY MAN, BUT THERE WAS NO X-RAY MACHINE, THE DISALLOWANCE CANNOT BE MADE, PARTICULARLY WHEN THE ASSESSEE WAS AVAILING 5 THE SERVICES OF THE SAID PERSON, NAMELY, SHRI RAKESH YADAV. IN OUR OPINION, THE MERE DESIGNATION IS NOT SUFFICIENT TO DISBELIEVE THE PAYMENT OF SALARY, PARTICULARLY WHEN IT IS NOT BROUGHT ON RECORD THAT THE SAID PERSON WAS NOT EMPLOYED BY THE ASSESSEE. WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS, DELETE THE ADDITION SUSTAINED BY THE LD.CIT(A). 11. VIDE GROUND NO.4, THE GRIEVANCE OF THE ASSESSEE RELATES TO THE ADDITION OF RS.22,500 SUSTAINED BY THE LD.CIT(A) ON ACCOUNT OF INADEQUATE WITHDRAWAL FOR HOUSEHOLD EXPENSES. 12. THE FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE AO ASKED THE ASSESSEE TO FURNISH NAME AND AGE OF THE FAMILY MEMBERS AND DETAILS OF FUNDS AVAILABLE FOR HOUSEHOLD EXPENSES. THE ASSESSEE SUBMITTED THAT THE FAMILY CONSISTED OF : (I) HIMSELF (II) HIS WIFE SMT. SARITA SHUKLA (III) DAUGHTER-KM. SHIPRA SHUKLA (18 YRS.) (IV) DAUGHTER-KM.MANALI (10 YRS.) (V) SON-RIZUL (7 YRS.) 12.1 THE ASSESSEE ALSO SUBMITTED THAT HIS ELDER DAUGHTER, SHIPRA WAS LIVING WITH HER TAU, SHRI A.K.SHUKLA. IN SUPPORT OF THE AFORESAID SUBMISSIONS, EVIDENCE WAS ALSO FURNISHED. THE AO ACCEPTED THE SAID CLAIM OF THE ASSESSEE. HOWEVER, HE CONSIDERED THE WITHDRAWAL OF RS.49,500 DEBITED TO CAPITAL ACCOUNT AS DOMESTIC EXPENSES, INADEQUATE AND ESTIMATED THE HOUSEHOLD EXPENSES AT RS.84,000. ACCORDINGLY, AN ADDITION OF RS.34,500 WAS MADE. 6 13. THE ASSESSEE CARRIED THE MATTER TO THE LD.CIT(A) AND SUBMITTED THAT THE DRAWING ADMITTED BY HIM WERE ADEQUATE LOOKING TO THE FACT THAT HE HAD ONLY ONE SCHOOL GOING DAUGHTER STUDYING IN 1 ST STANDARD AND HIS SON WAS HARDLY TWO YEARS OLD. IT WAS FURTHER CONTENDED THAT THE PARENTS OF THE ASSESSEE HAD AGRICULTURAL INCOME AND THEY ALSO SUPPORTED THE ASSESSEES FINANCIAL NEEDS FOR THE HOUSEHOLD EXPENSES. 14. THE LD.CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT THE ASSESSEE HIMSELF DID NOT HAVE ANY AGRICULTURAL INCOME AND FINANCIAL SUPPORT CLAIMED TO BE RECEIVED FROM HIS PARENTS WAS NOT DULY SUBSTANTIATED. HOWEVER, THE LD.CIT(A) FOUND IT FAIR AND REASONABLE TO ESTIMATE THE ANNUAL HOUSEHOLD EXPENSES AT RS.72,000 AND AFTER DEDUCTING THE ADMITTED DRAWINGS OF RS.49,500, THE ADDITION WAS RESTRICTED TO RS.22,500. 15. NOW, THE ASSESSEE IS IN APPEAL. 16. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO HAD FAILED TO APPRECIATE THE PAST RECORDS AND THE WRITTEN SUBMISSIONS FILED. A REFERENCE WAS MADE TO THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 1996-97, COPY OF WHICH IS PLACED AT PAGES 9 AND 10 OF THE PAPER BOOK AND IT WAS SUBMITTED THAT THE AO HIMSELF ACCEPTED THE CLAIM OF THE ASSESSEE THAT THE FATHER OF THE ASSESSEE WAS HAVING 30 BIGHAS OF AGRICULTURAL LAND AND HOUSEHOLD EXPENSES WERE INCURRED FROM THE SAID AGRICULTURAL INCOME. IT WAS STATED THAT THE LD.CIT(A) HAS ARBITRARILY ESTIMATED THE ANNUAL HOUSEHOLD EXPENSES AT RS.72,000 AND SUSTAINED THE ADDITION OF RS.22,500 BY OVERLOOKING THE VITAL FACT THAT THE ASSESSEES PARENT HAD AGRICULTURAL LAND AND SUPPORTED HIS FINANCIAL NEEDS FOR HOUSEHOLD EXPENSES. IT WAS FURTHER STATED THAT THE SAID 7 AGRICULTURAL LAND MEASURING 30 BIGHAS WAS ANCESTRAL AND THE ASSESSEE HAD SUBSTANTIAL INTEREST THEREIN, THEREFORE, THE ADDITION SUSTAINED BY THE LD.CIT(A) WAS NOT JUSTIFIED. 17. THE LD.D.R., IN HIS RIVAL SUBMISSIONS, SUPPORTED THE ORDER OF THE LD.CIT(A). 18. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO PERUSED THE ASSESSMENT ORDER DATED 30.3.1998 FOR ASSESSMENT YEAR 1996-97 WHEREIN THE AO ACCEPTED THE WITHDRAWAL OF RS.24,000 FOR HOUSEHOLD EXPENSES AND ALSO ACCEPTED THIS CONTENTION OF THE ASSESSEE THAT SOME OF THE HOUSEHOLD EXPENSES WERE MET OUT OF THE AGRICULTURAL INCOME. IN OUR OPINION, THERE WAS NO VALID REASON TO DEVIATE FROM THE AFORESAID STAND BY THE AO. THE CONTENTION OF THE ASSESSEE THAT THE AGRICULTURAL LAND MEASURING 30 BIGHAS IS ANCESTRAL AND THE ASSESSEE WAS HAVING INTEREST IN THE SAID LAND HAS NOT BEEN CONTROVERTED. WE, THEREFORE, ARE OF THE OPINION THAT THE ADDITION SUSTAINED BY THE LD.CIT(A) IS ON HIGHER SIDE. TO MEET THE ENDS OF JUSTICE, WE THINK IT FAIR AND REASONABLE TO SUSTAIN THE ADDITION OF RS.4,500 BY KEEPING IN VIEW THIS FACT THAT SOME OF THE EXPENSES WERE MET OUT FROM THE AGRICULTURAL INCOME. ACCORDINGLY, THE ASSESSEE GETS A RELIEF OF RS.18,000. 19. IN I.T.A.NO.325(LKW)/2011, FOLLOWING GROUNDS HAVE BEEN RAISED: 1. THAT THE LEARNED C.I.T.(APPEALS) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ACTION U/S 147/148 OF THE I.T.ACT,1961, WHICH THE LEARNED A.O. HAS TAKEN SOLELY ON THE BASIS OF DVOS REPORT, WITHOUT APPLYING HIS OWN MIND. 8 2. THAT WITHOUT PREJUDICE TO THE GROUND OF APPEAL NO.1, IT IS SUBMITTED THAT THE LEARNED C.I.T.(APPEALS) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING ARBITRARILY THE DISALLOWANCE OF RS.12,000/- OUT OF SALARY PAID. 3. THAT WITHOUT PREJUDICE TO THE GROUNDS OF APPEAL NO.1, IT IS SUBMITTED THAT THE LEARNED C.I.T.(APPEALS) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ARBITRARY ADDITION FOR INADEQUATE WITHDRAWALS TO THE EXTENT OF RS.34,000/-. 4. THAT WITHOUT PREJUDICE TO THE GROUNDS OF APPEAL NO.1, IT IS SUBMITTED THAT THE LEARNED C.I.T.(APPEALS) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE UNJUST ADDITION OF RS.1,60,450/- AS UNEXPLAINED INVESTMENT IN CONSTRUCTION OF PROPERTY, WHICH IS FULLY ACCOUNTED FOR IN THE REGULAR BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE. 5. THAT THE APPELLANT CRAVES FOR PERMISSION TO AMEND ANYONE OR ALL THE AFORESAID GROUNDS OF APPEAL AND/OR TO RAISE FRESH GROUNDS OF APPEAL. 20. GROUND NO.1 WAS NOT PRESSED, SO IT IS DISMISSED AS NOT PRESSED. 21. THE FACTS RELATING TO THE ISSUE INVOLVED IN GROUND NO.2 ARE SIMILAR TO THE FACTS INVOLVED IN GROUND NO.3 FOR THE ASSESSMENT YEAR 2002-03. THEREFORE, OUR FINDINGS GIVEN THEREIN SHALL APPLY MUTATIS MUTANDIS FOR THIS YEAR ALSO AND ACCORDINGLY, THE DISALLOWANCE OF RS.12,000 IS DELETED. 22. AS REGARDS TO THE GROUND NO.3 RELATING TO THE ADDITION ON ACCOUNT OF INADEQUATE WITHDRAWAL TO THE EXTENT OF RS.34,000 THE FACTS ARE SIMILAR AS WERE INVOLVED IN GROUND NO.4 FOR THE ASSESSMENT YEAR 2002-03. THEREFORE, KEEPING IN VIEW THIS FACT THAT SOME OF THE EXPENSES WERE INCURRED OUT OF THE 9 AGRICULTURAL INCOME, THE ADDITION OF RS.6,000 IS SUSTAINED AS THE ASSESSEE HAD ALREADY SHOWN WITHDRAWAL OF RS.50,000 FOR HOUSEHOLD EXPENSES. THUS,T HE ASSESSEE WILL GET A RELIEF OF RS.28,000. 23. THE NEXT ISSUE VIDE GROUND NO.4 RELATES TO THE SUSTENANCE OF ADDITION OF RS.1,60.450 ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION OF PROPERTY. 24. THE FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE AO POINTED OUT THAT IN THIS CASE, DURING THE COURSE OF SURVEY UNDER SECTION 133A, NEWLY CONSTRUCTED HOSPITAL CUM RESIDENTIAL BUILDING WAS NOTICED AND THE MATTER RELATING TO VALUATION OF COST OF CONSTRUCTION WAS REFERRED TO THE DEPARTMENTAL VALUATION OFFICER, WHO SUBMITTED HIS REPORT VIDE LETTER DATED 23.11.206 AND ESTIMATED THE COST OF CONSTRUCTION AS UNDER : FINANCIAL YEAR DECLARED COST IN CONSTRUCTION/INVESTMENT BY ASSESSEE(RS.) F.Y. WIFE ESTIMATE COST OF CONSTRUCTION (RS.) 15/4/90-31/3/95 351000 13,65,501 1995-96 65000 2,52,871 1996-97 20000 77,806 1997-98 174000 6,76,915 1998-99 15351 59,720 2001-02 71857 2 ,79,547 2002-03 569328 22,14,867 2004-05 1484 573 TOTAL 1268020 49,33,000 24.1 ON FURTHER REFERENCE BY THE THEN AO, THE DVO RAISED THE ESTIMATE VIDE HIS REPORT DATED 30.11.2006 AS UNDER : FINANCIAL YEAR YEARWISE INVESTMENT OF F.Y. WISE ESTIMATED COST 10 ASSESSEE (RS.) OF CONSTRUCTION (RS.) 2001-02 6,97,228 31,99,670 2002-03 5,69,328 26,12,720 2003-04 ----- ---- 2004-05 1,484 6,810 TOTAL 12,68,040 58,19,200 24.2 DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED DETAILS AND EVIDENCES DECLARING YEARWISE INVESTMENT IN CONSTRUCTION AS UNDER : FINANCIAL YEAR INVESTMENT TOTAL AMOUNT INVESTMENT FROM 90 TO 95 3,51,000 95-96 65,000 65,000 96-97 20,000 20,000 97-98 174000 1,74,000 610000 98-99 15371 15371 99-2000 X X 625371 2000-2001 X X 2001-02 71857 71857 697228 2002-03 569328 569328 2003-04 X X 2004-05 1484 1484 1268040 2005-06 648945 648945 1916985 2006-07 549258 549258 TOTAL 2466243 24.3. THE ASSESSEE ALSO FILED OBJECTIONS ON THE REPORT OF THE DVO. THE OBJECTIONS OF THE ASSESSEE WERE FORWARDED BY THE AO TO THE DVO FOR HIS FURTHER COMMENTS. HOWEVER, THE AO DID NOT WAIT FOR THE COMMENTS OF THE DVO SINCE THIS WAS A TIME BARRING CASE. HE ADOPTED TOTAL COST ESTIMATED BY THE DVO AT RS.49,33,000FOR THE REASON THAT THERE WAS NO BASIS GIVEN BY THE 11 DVO FOR REVISING THE COST TO RS.58,19,200. THE AO ALSO ACCEPTED THE QUANTUM OF INVESTMENT DECLARED BY THE ASSESSEE FROM THE ASSESSMENT YEAR 1995-96 TO 2007-08. HE WORKED OUT THE YEAR-WISE DIFFERENCE OF COST ESTIMATED BY THE DVO AND INVESTMENT DECLARED BY THE ASSESSEE AS UNDER: FINANCIAL YEAR A.Y. INVESTMENT DECLARED BY ASSESSEE (RS.) ESTIMATED COST BY DVO VIDE HIS REPORT DT.23.11.2006 CALCULATED ON PRO RATA BASIS. DIFFERENCE (RS.) 15/4/90- 31/3/95 UPTO 199596 351000 7,02,073 3,51,073 1995-96 1996-97 65000 1,30,014 65,014 1996-97 1997-98 20000 40,004 20,004 1997-98 1998-99 174000 3,48,036 1,74,036 1998-99 1999-2000 15351 30,705 15,354 1999-2000 2000-01 --- --- --- 2000-01 2001-02 --- --- --- 2001-02 2002-03 71857 1,43,729 71,872 2002-03 2003-04 569328 11,38,775 5,69,447 2003-04 2004-05 --- --- -- 2004-05 2005-06 1484 2,968 1,484 2005-06 2006-07 648945 12,98,025 6,49,080 2006-07 2007-08 549258 10,98,630 5,49,372 TOTAL 2466243 49,33,000 24,66,757 ACCORDINGLY, THE ADDITION OF RS.5,69,447 WAS MADE TO THE INCOME OF THE ASSESSEE CONSIDERING THE SAME AS UNEXPLAINED SOURCE OF INVESTMENT IN CONSTRUCTION OF THE HOUSE PROPERTY. 25. THE ASSESSEE CARRIED THE MATTER TO THE LD.CIT(A), WHO OBSERVED THAT THE AO WHILE COMPLETING THE ASSESSMENT IN THE ASSESSEES CASE FOR THE ASSESSMENT YEAR 2007-08, HAS GOT THE YEAR-WISE INVESTMENT IN CONSTRUCTION REVALUED WHEREBY THE DIFFERENCE BETWEEN THE INVESTMENT ESTIMATED BY THE ASSESSEE AND THE INVESTMENT REVALUED, WORKED OUT TO RS.1,60,450. HE, 12 THEREFORE, CONSIDERED THE SUM OF RS.1,60,450 AS UNEXPLAINED INVESTMENT AND RESTRICTED THE ADDITION TO THAT EXTENT. 26. NOW, THE ASSESSEE IS IN APPEAL. 27. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) FAILED TO APPRECIATE THE FACT THAT HE AO HAS NOT DETECTED ANY DEFECT IN THE BUILDING WORK IN PROGRESS. THE REFERENCE AS MADE TO PAGES 37 & 38 OF THE ASSESXSEES COMPILATION, WHICH IS COPY OF THE LEDGER ACCOUNT OF BUILDING WORK IN PROGRESS. IT WAS STATED THAT THE ASSESSEE HAD ENTERED ITEMS-WISE EXPENDITURE MADE IN THE CONSTRUCTION OF THE BUILDING AND NO DEFECT WAS POINTED OUT IN THE SAID ACCOUNT. THEREFORE, THE ADDITION SUSTAINED BY THE LD.CIT(A) WAS NOT JUSTIFIED. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: (I) CIT VS. MEERUT CEMENT COMPANY PRIVATE LTD. (2006) 202 CTR 506(ALL.), (II) DECISION OF THE ITAT, A-BENCH, LUCKNOW IN THE CASE OF DR.SURYA MANI DWIVEDI VS. ACIT, FAIZABAD, ITA NOS.192 AND 193(LUC.)/2010 DATED 16.6.2010. (III) ITO VS. VIJETA EDUCATIONAL SOCIETY, 2008 (12) MTC 203, 214 (TRIB.), (V) ITO VS. LUCKNOW PUBLIC EDUCATIONAL SOCIETY, 2007 (10) MTC 1079(TRIB.), (VI) CIT VS. PRATAPSINGH AMROSINGH RAJENDRA SINGH & DEEPAK KUMAR (1993) 200 ITR 788, 790, 792. 28. THE LD.D.R., IN HIS RIVAL SUBMISSIONS, STRONGLY SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 29. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND GONE THROUGH THE MATERIAL ON RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE AO DID NOT ACCEPT THE REVISED ESTIMATE OF THE DVO BY STATING THAT THE ESTIMATE WAS WITHOUT ANY BASIS. THE LD.CIT(A) ALSO CATEGORICALLY STATED THAT THE AO 13 REVISED THE ESTIMATE FOR THE SUCCEEDING YEAR I.E. ASSESSMENT YEAR 2007-08, WHICH CLEARLY SHOWS THAT THERE WAS VARIATION IN THE ESTIMATE OF COST OF CONSTRUCTION WORKED OUT BY THE AO AND ESTIMATED BY THE DVO. IT APPEARS THAT THE LD.CIT(A) ACCEPTED THE INVESTMENT, WHICH WAS ESTIMATED BY THE AO IN THE SUCCEEDING YEAR, BUT IGNORED THIS VITAL FACT THAT THE ASSESSEE MAINTAINED THE BOOKS OF ACCOUNT AND ITEM-WISE EXPENSES WERE DEBITED IN THE BOOKS OF ACCOUNTS. HE ALSO IGNORED THAT THE ASSESSEE RAISED CERTAIN OBJECTIONS BEFORE THE AO IN THE VALUATION ESTIMATED BY THE DVO, IN THE SAID OBJECTION THE ASSESSEE CLEARLY STATED VIDE LETTER DATED 18.12.2007 PLACED AT PAGE 25 OF THE ASSESSEES COMPILATION, THAT ALL THE YEAR-WISE INVESTMENTS WERE VERIFIABLE FROM THE INCOME-TAX RETURNS FILED BY THE ASSESSEE IN DUE COURSE AND ALSO FROM THE VOUCHES. IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSEE WAS MAINTAINING THE DETAILS OF THE EXPENSES INCURRED FOR COST OF CONSTRUCTION IN HIS BOOKS OF ACCOUNT, COPY OF WHICH IS PLACED AT PAGES 37 AND 38 OF THE ASSESSEES COMPILATION. NO DEFECT HAS BEEN POINTED OUT IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. RECENTLY, THE HON'BLE SUPREME COURT IN THE CASE OF SARGAM CINEMA VS. CIT (2010) 328 ITR 513(SC) HAS HELD AS UNDER : THAT THE ASSESSING AUTHORITY COULD NOT REFER THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER IN A CASE WHERE THERE WAS A CATEGORICAL FINDING RECORDED BY THE TRIBUNAL THAT THE BOOKS OF ACCOUNT WERE NEVER REJECTED. 29.1 IN THE PRESENT CASE ALSO, THE AO, WITHOUT REJECTING THE BOOKS OF ACCOUNTS, REFERRED THE MATTER TO THE DVO AND MADE THE ADDITION ON THAT BASIS, THEREFORE, WITHOUT REJECTING THE BOOKS OF ACCOUNTS AND POINTING OUT ANY DEFECT IN THE DETAILS OF INVESTMENT IN BUILDING MAINTAINED BY THE ASSESSEE IN HIS LEDGER, THEREFORE, THE ADDITION MADE BY THE AO AND 14 SUSTAINED BY THE LD.CIT(A) WAS NOT JUSTIFIED. ON A SIMILAR ISSUE, THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. MEERUT CEMENT CO. (P.) LTD. [2006] 150 TAXMAN 7(ALL.) OBSERVED AS UNDER : 4. IF THE ASSESSEE MAINTAINED BOOKS OF ACCOUNT IN THE REGULAR COURSE OF BUSINESS AND NECESSARY ENTRIES RELATING TO THE EXPENDITURE TOWARDS COST OF CONSTRUCTIONS ARE ENTERED IN THE BOOKS OF ACCOUNT, WHICH ARE OPEN TO VERIFICATION, AND ITS CORRECTNESS IS NOT DOUBTED, IT SHOULD BE ACCEPTED. IN CASE OF DOUBT, THE ASSESSING AUTHORITY CAN REFER THE MATTER TO THE VALUATION CELL FOR DETERMINATION OF COST OF CONSTRUCTION AND RELY UPON SUCH REPORT AS AN EVIDENCE, BUT IT IS OPEN TO THE ASSESSEE TO CHALLENGE THE CORRECTNESS OF SUCH VALUATION REPORT AND IN CASE IF IT ESTABLISHES THAT SUCH REPORT IS NOT CORRECT AND RELIABLE ,EXPENDITURE SHOWN IN THE CONSTRUCTION AS PER THE BOOKS OF ACCOUNT IS LIABLE TO BE ACCEPTED. 29.2 IN THE INSTANT CASE ALSO, THE ASSESSEE MAINTAINED THE BOOKS OF ACCOUNTS AND NECESSARY ENTRIES RELATING TO THE EXPENDITURE TOWARDS COST OF CONSTRUCTION ARE ENTERED IN THE BOOKS OF THE ACCOUNTS, WHICH WERE OPEN TO VERIFICATION AND THEIR CORRECTNESS WAS NOT DOUBTED. EVEN THE AO DID NOT RELY ON THE REVISED VALUATION MADE BY THE DVO, THEREFORE, THE EXPENDITURE SHOWN IN THE CONSTRUCTION AS PER THE BOOKS OF ACCOUNTS WAS LIABLE TO BE ACCEPTED. WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AS DISCUSSED HEREINABOVE, ARE OF THE VIEW THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.1,60,450. ACCORDINGLY, THE SAME IS DELETED. 30. IN I.T.A.NO.326(LKW)/2011, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : 1. THA T THE LEARNED C . I . 1 . ( APP E ALS) HAS ERRED IN LAW AND ON FAC TS IN UPHOLDIN G T HE ACTION U/S 147/ 1 48 OF THE I.T.ACT, 196 1 , WHICH THE LEARNE D A . O . H A S T AKEN SOLELY ON T HE BASIS OF DV O ' S REPORT , WITHOU T APP LYING HIS OWN M IND . 15 2. THAT WITH O UT PREJUDICE TO THE GROUND OF APPEAL NO .1, IT IS SUBM I TTED T H A T THE LEAR N E D C . I .T. ( APPEALS) HAS ERRED IN L AW AND O N FACTS IN SUSTAININ G ARBITRARILY THE DIS A LLOWANCE OF RS.12,000 OUT OF SALARY PAID . 3. THAT WIT H OUT PREJUDICE TO THE GROUNDS OF APPEA L NO . 1 , I T I S S UBMIT T E D THAT THE LEARNED C . I .T. (APPEALS) HAS ERRED IN LAW AND O N FACT S IN SUSTAININ G THE ARBITRARY ADDITION FOR INADEQUATE WITHDRAWALS FOR H O US E HOLD EXPENSES T O THE EXTENT OF RS .53,000/- . 4. THA T W I T H O U T PREJUDICE T O T HE G R OUNDS O F APPE AL NO.1, IT IS SUBMITTED THAT THE L EARNED C.I .T. ( APPEALS ) H AS E RR E D IN L A W AND ON FACTS IN SUSTAIN I NG THE UNJUST ADDITION OF RS .75,000/- AS UN E X P L A INED I NVES TMENT I N PURCHA S E O F I ND I CA CAR W H I CH WAS RECEIVED BY THE ASSESSEE AS A GIFT. 5. THAT THE APPELLANT CRAVES FOR PERMISSION TO AMEND ANYONE OR ALL THE AFORESAID GROUNDS OF APPEAL AND/OR TO RAISE FRESH GROUNDS OF APPEAL. 31. GROUND NO.1 WAS NOT PRESSED SO IT IS DISMISSED AS NOT PRESSED. 32. GROUND NO.2 IS SIMILAR TO THE GROUND NO.3 AND 2 FOR THE ASSESSMENT YEARS 2002-03 AND 2003-04, WHICH WE HAVE ALREADY ADJUDICATED IN THE FORMER PART OF THIS ORDER. THEREFORE, THIS ADDITION OF RS.12,000 IS NOT SUSTAINABLE. ACCORDINGLY, THE SAME IS DELETED. 33. VIDE GROUND NO.3 RELATING TO INADEQUATE WITHDRAWAL FOR HOUSEHOLD EXPENSES. THE FACTS ARE SIMILAR AS WERE IN THE EARLIER YEARS. WE, THEREFORE, KEEPING THE SAME VIEW INTO CONSIDERATION AS WAS TAKEN IN THE EARLIER YEARS, SUSTAIN THE ADDITION OF RS.5,000 SINCE THE ASSESSEE HAD ALREADY SHOWN WITHDRAWAL OF RS.55,000. ACCORDINGLY, THE ASSESSEE WILL GET RELIEF OF RS.48,000 ON THIS COUNT. 16 34. THE NEXT ISSUE VIDE GROUND NO.4 RELATES TO THE ADDITION OF RS.75,000 ON ACCOUNT OF INVESTMENT IN PURCHASE OF INDICA CAR. 35. THE FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE AO POINTED OUT THAT THE ASSESSEE IN HIS STATEMENT RECORDED ON OATH DURING THE COURSE OF SURVEY, STATED THAT HE HAD RECEIVED SECOND-HAND INDIA CAR BEARING REGISTRATION NO.U.P.50L-2831 FROM SHRI B.R.GUPTA, M.D., BRAWN, NEW DELHI IN THE YEAR 2005 AS GIFT. THE AO ASKED THE ASSESSEE EXPLANATION AND EVIDENCES ON THE STATEMENT OF THE ASSESSEE, WHO VIDE REPLY DATED 26.11.2007 STATED THAT HE NEITHER PURCHASED NOR OTHERWISE RECEIVED ANY FOUR- WHEELER AND RECEIVED GIFT OF ONE INDIA CAR UP50L-2831, MODEL 2000 FROM SHRI B.R.GUPTA, M.D. DURING 2005, WHICH IS NOT RELATED TO ASSESSMENT YEAR 2002-03. THE ASSESSEE ALSO FILED COPY OF REGISTRATION CERTIFICATE FROM THE R.T.O. WHEREIN THE VEHICLE HAD BEEN REGISTERED IN THE NAME OF THE ASSESSEE ON 15.2.2005. THE ASSESSEE ALSO FILED CERTIFICATE OF REGISTRATION DATED 1.3.2000 WHEREIN THE SAID VEHICLE WAS REGISTERED IN THE NAME OF SHRI B.R.GUPTA. ACCORDING TO THE AO., THE BURDEN LIES ON THE ASSESSEE TO PROVE THE GENUINENESS OF GIFT AND ESTABLISH NATURAL RELATIONSHIP WITH THE ALLEGED DONOR. ACCORDING TO HIM, THE ALLEGED DONOR WAS MANAGING DIRECTOR OF A PHARMACEUTICAL CONCERN, THEREFORE, AT THE MOST THE RELATIONSHIP OF THE ASSESSEE WITH THE ALLEGED DONOR MAYBE CONSIDERED AS PROFESSIONAL RELATIONSHIP ONLY, BUT NOT NATURAL RELATIONSHIP TO JUSTIFY THE GIFT. HE CONSIDERED THAT THE VEHICLE RECEIVED BY THE ASSESSEE WAS IN CONSIDERATION OF HIS PROFESSIONAL RELATIONSHIP. THE AO ESTIMATED THE VALUE OF THE VEHICLE AT RS.75,000 AND ADDED TO THE INCOME OF THE ASSESSEE. 17 36. THE ASSESSEE CARRIED THE MATTER TO THE LD.CIT(A), WHO CONFIRMED THE ACTION OF THE AO BY OBSERVING AS UNDER : 7. AS REGARDS THE ADDITION OF RS.75,000/- BEING THE ESTIMATED VALUE OF INDICA CAR, CLAIMED BY THE APPELLANT TO HAVE BEEN RECEIVED AS GIFT FROM SHRI B.R.GUPTA, THE APPELLANT CONTENDS THAT THE SAID GIFT WAS RECEIVED ON 22.08.2004. THE ALLEGED DATE OF GIFT ITSELF IS A MATTER OF SPECULATION SINCE THE VEHICLE IN QUESTION WAS GOT REGISTERED IN THE NAME OF THE APPELLANT ON, 15.02.2005. PERHAPS THE DATE OF ALLEGED GIFT IS SOUGHT TO BE SHOWN AS 22.08.2004 IN ORDER TO AVOID THE APPLICATION OF PROVISIONS OF SECTION 56(2)(V) WHEREBY A GIFT OF A SUM OF MONEY EXCEEDING RS.25,000/- RECEIVED ON OR AFTER 01.09.2004 BUT BEFORE 01.04.2006 WAS LIABLE FOR TAX AS INCOME. IN CASE THE ALLEGED GIFT REALLY TOOK PLACE ON 22.08.2004 IT IS NOT UNDERSTOOD AS TO WHY THE VEHICLE WAS GOT REGISTERED IN THE APPELLANT'S NAME ON 15.02.2005, ALMOST SIX MONTHS AFTER THE CLAIMED DATE OF GIFT. THE GIFT AS CLAIMED WAS OF A VEHICLE AND NOT ANY SUM OF MONEY AND THE APPELLANT WAS UNDER OBLIGATION TO SUBSTANTIATE THE GENUINENESS OF THE TRANSACTION IN QUESTION, SIMPLY BECAUSE THE PROVISIONS OF SECTION 56(2)(V) MADE THE GIFT OF ANY SUM OF MONEY EXCEEDING RS.25,000/-DURING THE SPECIFIED PERIOD TAXABLE AS INCOME IT DID NOT MEAN THAT THERE WAS AN IMMUNITY FROM EXPLAINING THE SOURCE OF ACQUISITION OF AN ASSET (I.E. CAR IN THIS CASE) WHICH WAS CLAIMED TO BE ACQUIRED AS GIFT. THE FACTS CONCERNING THE ALLEGED TRANSACTION AND ITS LEGAL IMPLICATIONS HAVE BEEN ADEQUATELY BROUGHT OUT IN PARA 5 OF THE ASSESSMENT ORDER. ONCE THE CLAIM OF GIFT AS SOURCE OF ACQUISITION WAS NOT SUBSTANTIATED BY THE APPELLANT. THE CORRESPONDING VALUE OF THE ASSET ACQUIRED WAS CLEARLY LIABLE TO BE HELD AS UNEXPLAINED INVESTMENT AND TO BE TREATED AS INCOME OF THE, APPELLANT. THIS FINDING OF THE AO AND THE RESULTANT ADDITION ARE NOT FOUND, TO SUFFER FROM ANY FACTUAL OR LEGAL INFIRMITY. ACCORDINGLY THE ADDITION OF RS.75,000/- AS MADE BY THE AO IS CONFIRMED. 37. NOW, THE ASSESSEE IS IN APPEAL. 38. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ASSESSEE RECEIVED 18 A GENUINE GIFT AND THE DONOR ISSUED A GIFT CERTIFICATE DATED 22.8.2004 STATING THEREIN THAT THE INDICA CAR HAVING REGISTRATION NO.DLICG5754 WAS GIFTED TO THE ASSESSEE. IT WAS FURTHER STATED THAT THE ASSESSEE HAS RECEIVED THE GIFT OUT OF LOVE AND AFFECTION AND THE SAID VEHICLE WAS REGISTERED IN THE ASSESSEES NAME HAVING REGISTRATION NO. UP50L 2831 ON 15.2.2005, THEREFORE, THE GIFT WAS GENUINE AND THE ADDITION WAS ARBITRARILY MADE BY THE AO. IT WAS CONTENDED THAT UNDER SECTION 56(2)(V) OF THE I.T.ACT ONLY THE MONEY EXCEEDING RS.25,000 CAN BE TAXED AS INCOME FROM OTHER SOURCES AND NOT ANY OTHER MOVABLE OR IMMOVABLE ASSET OR PROPERTY. THEREFORE, THE ADDITION WAS NOT JUSTIFIED. 39. IN HIS RIVAL SUBMISSIONS, THE LD.D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 40. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IT IS NOTICED THAT THE ASSESSEE RECEIVED AN INDIA CAR AS A GIFT FROM SHRI B.R.GUPTA, M.D., BRAWN LABORATORIES LTD., 4/4 B, ASAF ALI ROAD, NEW DELHI-110002. THE DONOR ISSUED A GIFT CERTIFICATE, COPY OF WHICH IS PLACED AT PAGE 22 OF THE ASSESSEES COMPILATION AND READS AS UNDER : BRAWN LABORATORIES LTD. CORPROATE OFFICE:DELHI STOCK EXCHANGE BUILDING 4/4 B, ASAF ALI ROAD, NEW DELHI-110002 TEL. : [phone] FAX: [phone] EMAIL: [e-mail] WEBSITE: WWW.BRAWNPHARMA.COM GIFT CERTIFICATE 19 OUT OF LOVE, AFFECTION AND DUE TO MY OLD ASSOCIATION WITH DR.RAJA RAM SHUKLA, I GIFTED INDICA CAR HAVING ITS REGISTRATION NO.DLICG5754 MODEL 2000 (CHASIS NO.600101 MQQP34800 & ENGINE NO.MQQP 35558) ON 22 ND AUG., 2004. DR. RAJA RAM SHUKLA SHALL BE AT LIBERTY TO GET IT REGISTERED IN HIS NAME FROM THE DATE OF GIFT. HE WILL BE COMPLETE OWNER OF THIS VEHICLE. SD.(B.R.GUPTA) M.D. 40.1 AFTER RECEIVING THE GIFT, THE ASSESSEE GOT THE SAID VEHICLE REGISTERED IN HIS OWN NAME VIDE REGISTRATION NO.UP 50L: 2831 AND THE CERTIFICATE OF REGISTRATION DATED 15.2.2005 IS PLACED AT PAGE 24 OF THE ASSESSEES COMPILATION. IN THE PRESENT CASE, IT IS NOTICED THAT THE AO INVOKED THE PROVISIONS OF SECTION 56(2)(V) OF THE I.T.ACT,1961, WHICH HAS BEEN INSERTED BY THE FINANCE (NO.2) ACT,2004 WITH EFFECT FROM 1.4.2005. THE PROVISIONS CONTAINED IN THE SAID SECTION READ AS UNDER: SECTION 56(2)(V) (2) IN PARTICULAR, AND WITHOUT PREJUDICE TO THE GENERALITY OF THE PROVISIONS OF SUB-SECTION (1), THE FOLLOWING INCOMES, SHALL BE CHARGEABLE TO INCOME-TAX UNDER THE HEAD INCOME FROM OTHER SOURCES, NAMELY- . (V) WHERE ANY SUM OF MONEY EXCEEDING TWENTY-FIVE THOUSAND RUPEES IS RECEIVED WITHOUT CONSIDERATION BY AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY FROM ANY PERSON ON OR AFTER THE 1 ST DAY OF SEPTEMBER, 2004 [BUT BEFORE THE 1S DAY OF APRILO,2006], THE WHOLE OF SUCH SUM: 40.2 FROM THE ABOVE PROVISIONS, IT IS CRYSTAL CLEAR THAT THE SECTION 56(2)(V) OF THE I.T. ACT IS APPLICABLE WHEN MONEY EXCEEDING RS.25,000 IS 20 RECEIVED WITHOUT CONSIDERATION BY AN INDIVIDUAL OR AN HUF FROM ANY PERSON ON OR BEFORE THE 1ST DAY OF SEPTEMBER,2004 BUT BEFORE THE 1 ST DAY OF APRIL, 2006. IN THE INSTANT CASE, THE ASSESSEE DID NOT RECEIVE ANY MONEY, THE INDICA CAR WAS RECEIVED AS A GIFT ON 22.8.2004 I.E. BEFORE 1 ST DAY OF SEPTEMBER, 2004, THEREFORE, THE PROVISIONS CONTAINED IN SECTION 56(2)(V) ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THAT VIEW OF THE MATTER, WE ARE OF THE VIEW THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE AO BECAUSE THE AO MADE THE ADDITION BY APPLYING THE PROVISIONS OF SECTION 56(2)(V) OF THE I.T.ACT. THEREFORE, WE DELETE THE ADDITION MADE BY THE AO, WHICH HAS BEEN CONFIRMED BY THE LD.CIT(A). 41. IN THE RESULT, ALL THE THREE APPEALS ARE PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 28.6.2011. SD. SD. (H.L.KARWA) (N.K.SAINI) VICE PRESIDENT ACCOUNTANT MEMBER JUNE 28TH ,2011. COPY TO THE : 1. APPELLANT 2. RESPONDENT 3. CIT(A) (4) CIT 5.DR. A.R.,ITAT, LUCKNOW. SRIVASTAVA.