ITO, Gwalior V. Shri Rajendra Prasad Agarwal, Gwalior

ITA 373/AGR/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62833 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-07-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 09-09-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: NAVIN GARGH
• Keywords: Corroborative evidences
• Section: 147; 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 373/AGRA/2009 ASSTT. YEAR : 2006-07 INCOME-TAX OFFICER, VS. SHRI RAJENDRA PRASAD AGAR WAL, WARD 2(2), GWALIOR. PROP. M/S. RAJENDRA PD. BRIJ MOHAN, DAL BAZAR, GWALIOR. (PAN : ABNPA 8905 C) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARSHAD, SR. D.R. RESPONDENT BY : SHRI NAVIN GARGH, ADVOCATE. DATE OF HEARING : 26.07.2012 DATE OF PRONOUNCEMENT OF ORDER : 09.08.2012 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), GWALIOR DATED 26.05.2009 FOR THE ASSESSMENT YEAR 20 06-07, CHALLENGING THE DELETION OF ADDITION OF RS.50.81 LACS ON ACCOUNT OF UNEXPLAINED BALANCE SHOWN IN THE CAPITAL ACCOUNT. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSING OFF ICER HAS MADE THIS ADDITION OF RS.52,28,955/- FOR THE REASONS MENTIONED AT PAGE 4 OF THE ASSESSMENT ORDER AS UNDER : ITA NO. 373/AGRA/2009 2 'THE RETURNS FILED DURING THE PROCEEDINGS U/S 147 O F IT ACT, 1961 REVEALED THAT SINCE A.Y. 1998-99 TILL A.Y. 200 6-07 THE ASSESSEE HAS BEEN EARNING SUCH INCOME BELOW TAXABLE LIMIT OR ONLY MARGINALLY ABOVE THE TAXABLE LIMIT. BUT EVEN THEN THERE WAS NO TAX LIABILITY BECAUSE OF THE TAX REBATE DUE TO LIC PREMIUM. THE A SSESSEE HAS ALSO GIVEN THE STATEMENT IN A.Y. 05-06 THAT HE IS IN TU THIS BUSINESS FOR THE LAST 15 TO 20 YEARS. AS PER ASSESSEE'S OWN ADMISSIO N HE STARTED THIS BUSINESS BY INVESTING ONLY RS. 10,000/- TO 20,000/- ONLY. HE HAD NEITHER INHERITED ANY SIGNIFICANT WEALTH FROM HIS F ATHER, NOR HE HAD GOT ANYTHING FROM HIS RELATIVES OR DURING MARRIAGE. THE WITHDRAWALS FOR A. Y. 2006-07, AS SHOWN IN THE CAPITAL ACCOUNT, IS RS. 58,025/-. THIS IS STILL ON THE LOWER SIDE FOR A FAMILY OF 7 M EMBERS. HOWEVER, EVEN IF WE CONSIDER IT AS GENUINE FOR A MOMENT, AND PRESUME THAT IN EARLIER YEARS ALSO THE ASSESSEE MUST BE WITHDRAWING SIMILAR AMOUNT FOR HOUSEHOLD AND PERSONAL EXPENSES, THEN, IT IS VE RY INTERESTING TO NOTE THAT THE WITHDRAWALS AND THE LIC PAYMENTS EXCE ED THE TOTAL INCOME EARNED EVERY YEAR SINCE 1998-99. PRIOR TO A. Y. 1998-99 WE DO NOT HAVE ANY DATA, BUT AS PER ASSESSEE'S OWN ADMISS ION, THE INCOME EARNED WAS EVEN LESSER THAN THOSE IN THE SUBSEQUENT YEARS. THUS THERE HAS BEEN NO ACCUMULATION OF WEALTH IF AS SESSEE'S STATEMENTS (IN A.Y. 05-06) ARE TO BE BELIEVED. UNDE R THE CIRCUMSTANCES, IT IS NOT UNDERSTOOD AS TO HOW ASSES SEE WOULD JUSTIFY A CAPITAL OF MORE THAN RS.50 LACS (SHOWN IN A.Y. 2006 -07). CONSIDERING THESE FACTS OF THE CASE, THE UNEXPLAINED OPENING CA PITAL BALANCE SHOWN IN THE CAPITAL A/C OF THE ASSESSEE FOR A.Y. 0 6-07 IS TREATED AS HIS INCOME FOR A.Y. 06-07. PENALTY PROCEEDINGS U/S 271 (1) (C) IS INITIATED FOR CONCEALMENT OF INCOME ON THIS POINT'. 3. BEFORE THE LD. CIT(A), THE LD. COUNSEL FOR THE A SSESSEE VEHEMENTLY CONTESTED THAT THE LD. ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.52,28,955/-. HE ALSO FILED WRITTEN SUBMISSIONS B EFORE THE LD. CIT(A) AS UNDER : ITA NO. 373/AGRA/2009 3 THAT, THE LD. ASSESSING OFFICER IS NOT JUSTIFIED I N MAKING THE ADDITION OF RS. 52,28,955/- MERELY ON THE BASIS OF STATEMENT IG NORING THE OTHER FACTUAL POSITION WHICH IS HAVING BEARING UPON THIS ISSUE AN D DISCUSSED AT PAGE 2 & 3 OF APPEAL ORDER DT. 24.06.08 IN APPEAL NO. 222/IT/0 6-07/GWL. FOR ASSESSMENT YEAR 2005-06 PASSED BY THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS), GWALIOR (M.P.), WHICH IS BEING REPRODUCE D AS UNDER :- 'SO FAR ACCUMULATION OF CAPITAL IS CONCERNED, CAPIT AL HAS BEEN ACCUMULATED SINCE 1979 WHEN THE APPELLANT HAD START ED THE BUSINESS AND GOT THE REGISTRATION WITH THE SALES TAX DEPARTM ENT. HE GOT SUBSTANTIAL CAPITAL FROM HIS FATHER BY WAY OF INHER ITANCE IN THE YEAR 1996 WHEN THE FATHER WAS DIED ON 18.08.96. FATHER O F THE APPELLANT WAS ALSO A BUSINESSMAN CARRIED ON BUSINESS OR MONEY LENDING SINCE 1975 AND THEREAFTER TRADING IN UTENSILS TILL HIS LI FETIME. THE APPELLANT HAS PRODUCED WILL OF HIS FATHER ALSO IN WHICH IT IS MENTIONED THAT THE FATHER OF THE APPELLANT GIVEN HIS CAPITAL AND ENTIR E ASSETS TO THE APPELLANT AMOUNTING TO RS. 38 LACS APPROX INVESTED IN THE MONEY LENDING AND BUSINESS OF UTENSILS. THE APPELLANT WAS RESIDING ALONG WITH HIS BROTHER SHRI KISHAN AGARWAL SITUATED AT MO RAR, GWALIOR (M,P.). THE APPELLANT VACATED THE HOUSE IN THE YEAR 1990 AND GOT RS. 6 LACS AS COMPENSATION FROM HIS BROTHER TO RELINQUI SH HIS RIGHTS IN THE HOUSE IN FAVOUR OF HIS BROTHER KISHAN AGARWAL. ALL THIS CAPITAL WAS INVESTED BY THE APPELLANT IN HIS OWN BUSINESS. THE APPELLANT HAS ALSO ACCUMULATED HIS OWN CAPITAL SINCE 1979 AND INVESTED IN THE BUSINESS. THEREFORE, THE LD. ASSESSING OFFICER IS NOT JUSTIF IED IN MAKING THE ADDITION OF RS.52,28,955/- IGNORING THESE FACTS. THAT THE APPELLANT HAD PRODUCED THE BOOKS OF ACCOUN T DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THIS FACT IS MENTIONED AT P AGE 3 OF THE ASSESSMENT ORDER, WHICH IS BEING REPRODUCED AS UNDER :- 'SHRI ASHOK VIJAYWARGIYA CA/AR OF THE ASSESSEE ATT ENDED ON 02.12.08 AND PRODUCED CASH BOOK, LEDGER, VOUCHERS/ BILLS IN RESPECT OF PURCHASE AND SALES' AFTER PRODUCING THE BOOKS OF ACCOUNT DURING COURSE OF ASSESSMENT PROCEEDINGS, THE SAME WERE EXAMINED BY THE LD. ASSE SSING OFFICER. AFTER ITA NO. 373/AGRA/2009 4 VERIFYING AND EXAMINING THE BOOKS OF ACCOUNT, THE S AME WERE ACCEPTED AND NOT REJECTED. IT IS FURTHER SUBMITTED THAT THE BOOKS OF ACCOUNT M AINTAINED BY THE APPELLANT, WHICH WERE PRODUCED DURING COURSE OF ASSESSMENT PRO CEEDINGS, WERE DULY AUDITED U/S. 44AB OF THE INCOME TAX ACT, 1961. THE OPENING BALANCE OF CAPITAL WAS DULY SHOWN IN THE BOOKS OF ACCOUNT MAIN TAINED AND PRODUCED DURING COURSE OF ASSESSMENT PROCEEDINGS. THE OPENIN G BALANCE SHEET AS ON 01.04.05 IS PREPARED ON THE BASIS OF OPENING BALANC ES SHOWN IN THE BOOKS OF ACCOUNT PRODUCED DURING COURSE OF ASSESSMENT PROCEE DINGS. A COPY OF OPENING BALANCE SHEET AS ON 01.04.05 PREPARED ON TH E BASIS OF BOOKS OF ACCOUNT PRODUCED DURING COURSE OF ASSESSMENT PROCEE DINGS IS ENCLOSED HEREWITH. THEREFORE, IN VIEW OF THE ABOVE, IT IS SUBMITTED TH AT THE ADDITION OF RS. 52,28,955/- FOR OPENING BALANCE OF CAPITAL IS NOT J USTIFIED BECAUSE NO ONE CAN EARN SO MUCH IN THE MORNING OF THE FIRST DAY OF THE RELEVANT YEAR. RELIANCE IS PLACED ON CIT VS. RAMESHWAR BOHRA (2007 ) 208 CTR (RAJ.) 218 IN WHICH IT WAS HELD INCOME FROM UNDISCLOSED SOU RCES - ADDITION U/S 68 - 69 - OPENING CAPITAL BALANCE - IT DOES NOT REQUIRE ANY ELABORATE ARGUMENT - THAT A CARRIED FORWARD AMOUNT OF THE PREVIOUS YEAR DOES NOT BECOME AN INVESTMENT OR CASH CREDIT GENERATED DURING THE RELE VANT YEAR. THIS ALONE IS SUFFICIENT TO SUSTAIN THE ORDER OF THE TRIBUNAL IN DELETING THE AMOUNT. THAT. WITHOUT PREJUDICE TO THE ABOVE, IT IS RESPECT FULLY SUBMITTED THAT THE APPELLANT HAD STARTED THE BUSINESS RIGHT FROM ASSES SMENT YEAR 1979-80 I.E. FOR LAST 27 YEARS APPROX TO THE YEAR UNDER CONSIDERATIO N AND NOT 15 TO 20 YEARS AS MENTIONED BY THE LD. ASSESSING OFFICER. HE ASSESSED TO TAX ALSO FROM ASSESSMENT YEAR 1979-80. ALTHOUGH THE RELEVANT PAPE R FROM INCOME TAX ASSESSMENT FROM ASSESSMENT YEAR 1979-80 IS NOT AVAI LABLE RIGHT NOW BUT FEW PAPERS, I.E., DEMAND NOTICE ETC. FOR THE ASSESSMENT YEAR 1981-82 ARE AVAILABLE WITH THE APPELLANT TO WITNESS THE FACT OF ASSESSING FROM THAT TIME, COPY OF WHICH IS ENCLOSED HEREWITH. 1. COPY OF NOTICE U/S 221 (1) DT. 14.08.1985 FOR AS SESSMENT YEAR 1981-82 2. COPY OF NOTICE OF DEMAND DT. 13.08.1985 TO DEFAU LTER AS PER SECOND SCHEDULE ISSUED BY TAX RECOVERY OFFICER ITA NO. 373/AGRA/2009 5 THE APPELLANT IS HAVING DETAILS OF INCOME TAX RETUR N FOR ASSESSMENT YEAR 1998-99 ONWARDS. HE HAS NOT HAVING ANY DETAIL FOR E ARLIER YEARS. IF THE INCOME OF THE APPELLANT FROM ASSESSMENT YEAR 1979-8 0 IS CONSIDERED EQUAL TO MINIMUM AMOUNT LIABLE TO INCOME TAX WITH THE CONSER VATIVE APPROACH, THEN THE POSITION OF ACCUMULATED INCOME WILL BE AS UNDER :- ASSESSMENT YEAR INCOME AS PER BASIC EXEMPTION LIMIT INSURANCE PREMIUM ETC. NET INCOME AVAILABLE 1979-80 8,000/- NIL 8,000/- 1980-81 8,000/- NIL 8,000/- 1981-82 8.000/- NIL 8.000/- 1982-83 15,000/- NIL 15,000/- 1983-84 15.000/- NIL 15.000/- 1984-85 15,000/- NIL 15,000/- 1985-86 15,000/- NIL 15,000/- 1986-87 18,000/- NIL 18,000/- 1987-88 18,000/- NIL 18,000/- 1988-89 18,000/- NIL 18,000/- 1989-90 18,000/- NIL 18,000/- 1990-91 20,000/- NIL 20,000/- 1991-92 22,000/- NIL 22,000/- 1992-93 22,000/- NIL 22,000/- 1993-94 28,000/- NIL 28,000/- 1994-95 30,000/- NIL 30,000/- 199596 35,000/- NIL 35,000/- 1996-97 40,000/- NIL 40,000/- 1997-98 40,000/- NIL 40,000/- 1998-99 INCOME RETURNED 35,000/- NIL 35,000/- 1999-2000 38,000/- 22,686/- 15,314/- 2000-01 64,000/- 22,686/- 41,314/- 2001-02 60,000/- 22,686/- 37,314/- 2002-03 72,000/- 22,686/- 49,314/- 2003-04 63,500/- 22,686/- 40,814/- 2004-05 56,000/- 22,686/- 33,314/- 2005-06 58,500/- 22,686/- 35,814/- TOTAL 8,40,000/- 1,58,802 6,81,198 ITA NO. 373/AGRA/2009 6 THAT THE WIFE OF THE APPELLANT SMT. SROJ DEVI AGARW AL IS ALSO ASSESSED TO TAX SINCE ASSESSMENT YEAR 1981-82. COPY OF ASSESSMENT ORDER FOR ASSESSMENT YEAR 1981-82 IS ENCLOSED HEREWITH TO WITNESS THE IN COME TAX STATUS OF SMT. SAROJ DEVI AGARWAL. SMT. SAROJ DEVI AGARWAL IS A REGULARLY ASSESSED TO TAX TILL TODAY VIDE PAN NO. ABNPA8906B. SHE HAS ALSO DECLARED TAXABLE INCOM E. SHE HAS BEEN DECLARING INCOME OF RS. ABOUT 1,00,000/- AFTER CLAI MING DEDUCTION FOR INSURANCE PREMIUM ETC. FOR LAST 3 YEARS. COPY OF AC KNOWLEDGEMENT OF RETURN OF INCOME OF SMT. SAROJ DEVI AGARWAL FOR ASSESSMENT YEAR 2004-05. 2005- 06 AND 2006-07 IS ENCLOSED HEREWITH. COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME OF SMT. SAROJ DEVI AGARWAL FOR ASSESSMENT YEAR 2004-05. COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME OF SMT. SAROJ DEVI AGARWAL FOR ASSESSMENT YEAR 2005-06. COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME OF SMT. SAROJ DEVI AGARWAL FOR ASSESSMENT YEAR 2006-07. THE HOUSEHOLD EXPENSES ARE BEING MET OUT FROM INCOM E OF THE WIFE SMT. SAROJ DEVI AGARWAL. ACCORDINGLY WHATEVER INCOME EAR NED BY THE APPELLANT HAS BEEN ACCUMULATED AND INVESTED IN THE BUSINESS A S HIS CAPITAL. ACCORDINGLY THE POSITION OF TOTAL CAPITAL AS ON 01 ST APRIL, 05 I.E. OPENING DAY OF THE FINANCIAL YEAR 2005-06 RELEVANT TO ASSESSMEN T YEAR 2006-07, THE YEAR UNDER APPEAL IS AS UNDER :- 1. CAPITAL INHERITED FROM FATHER AS DISCUSSED IN AP PEAL ORDER FOR ASSESSMENT YEAR 2005-06 IN APPEAL NO. 222/IT/06 -07/GWL. ORDER DT. 24.06.08 RS. 38.00 LACS 2. AMOUNT RECEIVED FROM BROTHER SHRI KISHAN AGARWAL IN LIEU OF RELINGUISHMENT OF HIS RIGHT IN THE HOUSE AS DISC USSED IN APPEAL ORDER FOR ASSESSMENT YEAR 2005-06 IN APPEAL NO. 222/IT /06-07 /GWL. ORDER DT. 24.06.08 RS. 6.0 0 LACS 3. AMOUNT ACCUMULATED OUT OF PRECEDING YEARS INCOM E AS PER TABLE ABOVE. RS. 6.81 LACS ITA NO. 373/AGRA/2009 7 RS.50.81 LACS THE APPELLANT HAD TAKEN THE OPENING BALANCE OF RS. 52,28,955/- I.E. 52.29 LACS APPROX. THE SHORT FALL IS ONLY OF RS. 1.48 (RS . 52.29 - RS. 50.81) LACS. THE DIFFERENCE IS VERY MEAGER ABOUT 2.8% OF TOTAL C APITAL. THE DIFFERENCE IS VERY MEAGER BECAUSE OF ESTIMATED INCOME HAS BEEN TA KEN FOR EARLIER PERIOD, WHERE THE RECORD IS NOT AVAILABLE. BUT, IN ANY CASE , THE ADDITION FOR OPENING CAPITAL DURING THE YEAR UNDER CONSIDERATION IS NOT JUSTIFIED. THEREFORE, THE OPENING CAPITAL AS SHOWN MAY KINDLY BE ACCEPTED AND THE ADDITION OF RS. 52.28,955/- MAY KINDLY BE DELETED. 3.1. THE LD. CIT(A) CONSIDERING THE EXPLANATION OF THE ASSESSEE DELETED THE ADDITION OF RS.50.81 LACS OUT OF TOTAL ADDITION OF RS.52.29 LACS AND CONFIRMED THE ADDITION OF RS.1.48 LACS. THE FINDINGS OF THE LD. C IT(A) IN THE IMPUGNED ORDER ARE REPRODUCED AS UNDER : I HAVE GONE THROUGH THE WRITTEN SUBMISSION AND ASS ESSMENT ORDER AND FIND THAT THE ASSESSING OFFICER HAS MADE THE ADDITION OF RS.52,28,955/- OF OPENING CAPITAL SHOWN IN THE CAPI TAL ACCOUNT. THE ASSESSING OFFICER HAS MADE THE ADDITION MENTIONING THAT THE APPELLANT IS IN BUSINESS FOR LAST 15 TO 20 YEARS AND COULD NO T EARN AND SAVE SUCH AMOUNT SHOWN AS OPENING CAPITAL. THE LD. A.R. OF TH E APPELLANT SUBMITTED THAT THE FACTS RELATED TO ACCUMULATION OF CAPITAL WERE DISCUSSED IN THE ASSESSMENT ORDER AND APPEAL ORDER FOR ASSESSMENT YEAR 2005-06 ALSO. THE RELEVANT PARA OF APPEAL ORDE R DATED 24.06.2008 IN APPEAL NO. 222/IT/06-07/GWL. FOR ASSE SSMENT YEAR 2005-06 HAS BEEN REPRODUCED IN THE WRITTEN SUBMISSI ON. ALL THESE FACTS WERE ON RECORD BY THE ASSESSING OFFICER HAS N OT CONSIDERED THOSE FACTS. COPY OF OPENING BALANCE SHEET AS ON 01 .04.05 SUBMITTED BEFORE ME AND PLACED ON RECORD, WHICH IS PREPARED O N THE BASIS OF BOOKS OF ACCOUNT PRODUCED DURING THE COURSE OF ASSE SSMENT PROCEEDINGS. THE FINDING GIVEN BY THE CIT(APPEALS) IN ORDER IN APPEAL NO. 222/IT/06-07/GWL DATED 24.06.08 IN A.T.05-06 RE ADS AS FOLLOWS : ITA NO. 373/AGRA/2009 8 SO FAR AS ACCUMULATION OF CAPITAL IS CONCERNED, C APITAL HAS BEEN ACCUMULATED SINCE 1979 WHEN THE APPELLANT HAD STARTED THE BUSINESS AND GOT THE REGISTRATION WITH THE SALES TA X DEPARTMENT. HE GOT SUBSTANTIAL CAPITAL FROM HIS FATHER BY WAY OF I NHERITANCE IN THE YEAR 1996 WHEN THE FATHER WAS DIED ON 18.8.96. FATH ER OF THE APPELLANT WAS ALSO A BUSINESSMAN CARRIED ON BUSINES S OF MONEY LENDING SINCE 1975 AND THEREAFTER TRADING IN UTENSI LS TILL HIS LIFETIME. THE APPELLANT HAS PRODUCED WILL OF HIS FATHER ALSO IN WHICH IT IS MENTIONED THAT THE FATHER OF THE APPELLANT GIVEN HI S CAPITAL AND ENTIRE ASSETS TO THE APPELLANT AMOUNTING TO RS.38 LACS APP ROX INVESTED IN THE MONEY LENDING AND BUSINESS OF UTENSILS. THE APPELLA NT WAS RESIDING ALONG WITH HIS BROTHER SHRI KISHAN AGARWAL SITUATED AT MORAR, GWALIOR (MP). THE APPELLANT VACATED THE HOUSE IN TH E YEAR 1990 AND GOT RS.6 LACS AS COMPENSATION FROM HIS BROTHER TO R ELINQUISH HIS RIGHTS IN THE HOUSE IN FAVOUR OF HIS BROTHER KISHAN AGARWA L. ALL THIS CAPITAL WAS INVESTED BY THE APPELLANT IN HIS OWN BUSINESS. THE APPELLANT HAS ALSO ACCUMULATED HIS OWN CAPITAL SINCE 1979 AND INV ESTED IN THE BUSINESS. ON THE BASIS OF ABOVE, IT IS EVIDENT THAT THE APPE LLANT HAD INHERITED CAPITAL OF RS.38 LACS APPROX FROM HIS FAT HER AND HAD RECEIVED RS.6 LACS FROM HIS BROTHER IN THE YEAR 199 0 TO RELINQUISH HIS SHARE IN THE ANCESTRAL PROPERTY AND ACCUMULATED CAP ITAL SINCE 1979. THESE FACTS WERE NOT CONSIDERED BY THE ASSESSING OF FICER. THE LD. AR OF THE APPELLANT HAS FURTHER RELIED UPON THE DECISI ON IN THE CASE OF CIT VS. PARMESHWAR BOHRA (2007) 208 CTR (RAJ.) 218. I H AVE CONSIDERED THE FACTS OF THE CASE AND GONE THROUGH THE DECISION S IN THE CASE OF CIT VS. PARMESHWAR BOHRA (2007) 208 CTR (RAJ.) 218. THE HONBLE HIGH COURT OF RAJASTHAN IN THE CASE OF CIT VS. PARMESHWA R BOHRA (2007) 208 CTR (RAJ.) 218 HAS HELD THAT IT DOES NOT REQUIR E ANY ELABORATE ARGUMENT THAT A CARRIED FORWARD AMOUNT OF THE PREVI OUS YEAR DOES NOT BECOME AN INVESTMENT OR CASH CREDIT GENERATED DURIN G THE RELEVANT YEAR. THIS ALONE IS SUFFICIENT TO SUSTAIN THE ORDER OF THE TRIBUNAL IN DELETING THE AMOUNT. IN ADDITION TO THIS, THE LD. A R OF THE APPELLANT HAS ALSO SUBMITTED THE DETAILS OF CAPITAL ACCUMULAT ION FOR ASSESSMENT YEAR 1979-80 FROM WHERE THE APPELLANT HAD STARTED T HE BUSINESS WITH SUPPORTING EVIDENCE OF DEMAND NOTICE FOR ASSESSMENT YEAR 1981-82 MENTIONING THAT THE OTHER RECORDS PRIOR TO ASSESSME NT YEAR 1998-99 ARE NOT AVAILABLE AT THIS TIME. THEREFORE, HE HAS T AKEN THE INCOME AS PER BASIC EXEMPTION LIMIT WITH THE VERY CONSERVATIV E APPROACH. HE ITA NO. 373/AGRA/2009 9 HAD GIVEN THE AMOUNT OF ACCUMULATED CAPITAL RS.6.81 LACS AFTER DEDUCTING THE INSURANCE PREMIUM. ACCORDINGLY, THE A CCUMULATED CAPITAL OUT OF INCOME EARNED, AMOUNT RECEIVED FROM BROTHER AND AMOUNT INHERITED FROM FATHER COMES TO RS.50.81 LACS . SO FAR HOUSEHOLD EXPENSES IS CONCERNED, THE LD. AR OF THE APPELLANT SUBMITTED THAT THEY WERE MET OUT FROM THE INCOME OF THE WIFE, WHO IS ALSO ASSESSED TO TAX SINCE ASSESSMENT YEAR 1981-82. COPIES OF ASSESSMENT ORDER OF SMT. SAROJ DEVI AGARWAL, WIFE O F THE APPELLANT FOR ASSTT. YEAR 1981-82 AND COPY OF ACKNOWLEDGMENT OF RETURN OF INCOME FOR ASSESSMENT YEAR 2004-05, 2005-06 AND 200 6-07 ASSESSED BY THE INCOME-TAX OFFICER, WARD 2(3), GWALIOR VIDE PAN ABNPA 8906B SUBMITTED BEFORE ME AND PLACED ON RECORD. AFT ER CONSIDERING ALL THESE, I AM OF THE CONSIDERED OPINION THAT THE ADDITION OF RS.52,28,955/- OF OPENING CAPITAL AS INCOME OF THE YEAR UNDER CONSIDERATION IS NOT SUSTAINABLE. HOWEVER, THE ACCU MULATED CAPITAL OF THE APPELLANT AS ON 01.04.05 COMES TO RS.50.81 LACS AS AGAINST RS.52.29 LACS. THEREFORE, THE AMOUNT OF CAPITAL AS ON 01.04.05 TAKEN AS OPENING CAPITAL RS.52.29 LACS IS NOT EXPLAINED A S SUCH. THE DIFFERENCE RS.1.48 LACS (RS.52.29 RS.50.81) LACS IS REMAIN UNEXPLAINED. THEREFORE, AFTER CONSIDERING THE FACTU AL POSITION, THE CAPITAL TO THE EXTENT OF RS.1.48 LACS REMAINED UNEX PLAINED. THEREFORE, THE ADDITION TO THE EXTENT OF RS.1.48 LACS IS HEREB Y CONFIRMED. 3.2 THE REVENUE IS AGGRIEVED AGAINST THE DELETION OF AD DITION OF RS.50.81 LACS OUT OF TOTAL ADDITION OF RS.52.29 LACS. THE ASSESSE E SEPARATELY FILED CROSS-OBJECTION NO. 13/AGRA/2010 FOR FURTHER DELETION OF RS.1.48 LA CS, WHICH IS SEPARATELY WITHDRAWN, BEING TIME BARED AND WAS DISMISSED AS SU CH VIDE SEPARATE ORDER DATED 26.07.2012. 4. THE LD. DR RELIED UPON THE ORDER OF THE AO AND S UBMITTED THAT WILL WAS NOT PRODUCED BEFORE THE AUTHORITIES BELOW AND IT WAS AL SO NOT PROBATED. NO SUFFICIENT ITA NO. 373/AGRA/2009 10 MATERIAL WAS PRODUCED BEFORE THE AUTHORITIES BELOW TO PROVE THE ACCUMULATION OF CAPITAL THROUGH THE WILL OF FATHER, THE AMOUNT RECE IVED FROM BROTHER AND AMOUNT ACCUMULATED FROM THE EARLIER YEARS. THE LD. DR SUBM ITTED THAT OPENING BALANCE OF RS.52.29 LACS WAS CLAIMED BY THE ASSESSEE FOR THE F IRST TIME FOR THE ASSESSMENT YEAR UNDER APPEAL. THEREFORE, IT WAS RIGHTLY CONSIDERED BY THE AO AND IN THE ABSENCE OF ANY EXPLANATION SUBMITTED SUPPORTED BY THE EVIDENCE , THE AO RIGHTLY MADE THE ADDITION. HE HAS SUBMITTED THAT IN EARLIER YEARS, N O BOOKS OF ACCOUNT HAVE BEEN MAINTAINED AND NO AUDIT REPORT WAS FILED, THEREFORE , THERE WAS NO QUESTION OF CONSIDERING IT TO BE THE AMOUNT CREDITED IN THE BOO KS OF ACCOUNT OF THE EARLIER YEAR. THEREFORE, THE DECISION RELIED UPON BY THE LD. CIT( A) IS NOT APPLICABLE TO THE FACTS OF THE CASE. THE LD. DR SUBMITTED THAT SINCE THERE WAS NO BASIS OF CLOSING BALANCE OF EARLIER YEAR, WHICH WAS ALSO NOT SUBJECTED TO AN Y VERIFICATION BY THE LD. CIT(A), THEREFORE, THE LD. CIT(A) WRONGLY DELETED THE ADDIT ION. THE LD. DR RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CONSOLIDATED PHOTO AND FINVEST LTD. VS. ACIT IN THE CASE OF 281 ITR 394. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND SUBMITTED THAT THE B OOKS OF ACCOUNT WERE PRODUCED BEFORE THE AO FOR THE ASSESSMENT YEAR UNDER APPEAL AND BOOKS HAVE BEEN ACCEPTED. THEREFORE, SUNDRY DEBTORS AND SUNDRY CREDITORS HAVE BEEN ACCEPTED BY THE AO. ITA NO. 373/AGRA/2009 11 THIS IS THE BASIS OF CAPITAL OF THE EARLIER YEARS. PB-29 IS THE AUDIT REPORT IN WHICH THE ASSESSEE HAS SHOWN OPENING BALANCE OF ACCUMULAT ED CAPITAL OF RS.52.28 LACS, WHICH WAS CARRIED FORWARD FROM EARLIER YEAR AND WAS AN OPENING BALANCE IN THE ASSESSMENT YEAR UNDER APPEAL. HE HAS REFERRED TO TH E ORDER OF THE LD. CIT(A), GWALIOR DATED 24.06.2008 FOR THE ASSESSMENT YEAR 20 05-06, IN WHICH THE LD. CIT(A) GAVE A FINDING ON ACCOUNT ON INHERITANCE OF CAPITAL OF RS.38 LACS BY THE ASSESSEE FROM HIS FATHER THROUGH HIS WILL WHICH IS REPRODUCED BY THE LD. CIT(A) IN THE APPELLATE ORDER ALSO. HE HAS, THEREFORE, SUBMIT TED THAT SINCE THE SAME ISSUE HAS ALREADY BEEN DECIDED IN THE PRECEDING ASSESSMENT YE AR 2005-06 WITH REGARD TO THE INHERITANCE OF THE CAPITAL OF RS.38 LACS THROUGH TH E WILL OF HIS FATHER, THEREFORE, THE LD. CIT(A) RIGHTLY DELETED THE ADDITION. HE HAS SUB MITTED THAT THE LD. CIT(A) RIGHTLY RELIED UPON THE DECISION OF HONBLE RAJASTH AN HIGH CURT IN THE CASE OF PARMESHWAR BOHRA (SUPRA) FOR THE PURPOSE OF DELETIN G THE ADDITION. THE COPY OF THE ORDER OF THE LD. CIT(A) DATED 24.06.2008 IS FILED A T PAGE 43 OF THE PAPER BOOK AND THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2 004-05 AND 2005-06 IS FILED AT PAGE 60 OF THE PAPER BOOK. HE HAS ALSO REFERRED TO PB-20, WHICH IS THE COMPROMISE DEED BETWEEN THE ASSESSEE AND HIS BROTHER THROUGH W HICH THE ASSESSEE RECEIVED THE AMOUNT OF RS.6,00,000/- FROM HIS BROTHER TO RELINQU ISH HIS SHARE IN ANCESTRAL PROPERTY. HE SUBMITTED THAT THE ASSESSEE IS DOING B USINESS FOR LAST SEVERAL YEARS AND THOUGH THE BOOKS OF ACCOUNT HAVE NOT BEEN MAINTAINE D IN EARLIER YEARS, BUT THE ITA NO. 373/AGRA/2009 12 SAME REMAINED THE SUBJECT MATTER OF APPEALS AT DIFF ERENT LEVELS BEFORE THE CIT(A) AND ITAT AND PART ADDITIONS HAVE BEEN MAINTAINED ON ACCOUNT OF ESTIMATE OF GROSS PROFIT. THEREFORE, TELESCOPING BENEFIT IS AVAILABLE TO THE ASSESSEE TO EXPLAIN THE OPENING CAPITAL. HE HAS ALSO REFERRED TO NET INCOME AVAILABLE TO THE ASSESSEE IN EARLIER YEAR AS IS REPRODUCED BY THE LD. CIT(A) IN THE IMPUGNED ORDER TO SHOW THAT THE LD. CIT(A) RIGHTLY GAVE BENEFIT OF RS.6.81 LACS IN FAVOUR OF THE ASSESSEE BECAUSE WIFE OF THE ASSESSEE WAS MAKING WITHDRAWALS FOR THE PURPOSE OF HOUSEHOLD EXPENSES. HE HAS, THEREFORE, SUBMITTED THAT THE LD. CIT(A) RIGHTLY DELETED THE ADDITION IN QUESTION. HE HAS ALSO RELIED UPON THE D ECISION OF ITAT, DELHI BENCH IN THE CASE OF JAGTAR SINGH VS. ITO, 65 TTJ 476, IN WH ICH IT WAS HELD THAT ASSESSEES STATEMENT OF AFFAIRS FOR THE PAST YEARS AVAILABLE O N RECORD, THEREFORE, GENUINENESS OF BROUGHT FORWARD CAPITAL CANNOT BE DOUBTED SIMPLY BE CAUSE THE ASSESSEE HAS FILED RETURN FOR THE FIRST TIME. THE LD. DR IN THE REJOIN DER SUBMITTED THAT SINCE NO BOOKS OF ACCOUNT HAVE BEEN MAINTAINED IN THE EARLIER YEAR AND NO STATEMENT OF AFFAIRS HAVE BEEN FILED AND INCOME HAVE BEEN ESTIMATED BY A PPLYING THE GROSS PROFIT, WHICH WAS VERY MARGINAL, THEREFORE, NO AMOUNT IS AV AILABLE TO THE ASSESSEE TO EXPLAIN THE OPENING CAPITAL. SINCE THE DEBTORS AND CREDITORS ARE ALSO NOT MAINTAINED IN THE EARLIER YEAR, THEREFORE, NO SUCH BENEFIT CAN BE GIVEN TO THE ASSESSEE AND FURTHER TELESCOPING OF INCOME WAS NEVER PLEADED BEF ORE THE AUTHORITIES BELOW AND ITA NO. 373/AGRA/2009 13 NO FACTS AND EVIDENCE ARE AVAILABLE ON RECORD. THER EFORE, NO FURTHER BENEFIT COULD BE GIVEN TO THE ASSESSEE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE DID NOT MAINTAIN A NY BOOKS OF ACCOUNT OR STATEMENT OF AFFAIRS OF THE EARLIER YEARS PRIOR TO THE ASSESS MENT YEAR UNDER APPEAL. THE LD. COUNSEL FOR THE ASSESSEE HAS REFERRED TO VARIOUS OR DERS OF THE TRIBUNAL IN PAPER BOOK WHICH ALSO CONFIRM THAT THE ASSESSEE WAS NOT M AINTAINING ANY BOOKS OF ACCOUNT IN THE EARLIER YEARS. EVEN THE PROFIT OF TH E ASSESSEE WAS ESTIMATED WHICH WAS VERY MARGINAL. THE ASSESSEE ALSO SUBMITTED BEFO RE THE LD. CIT(A) THAT HE WAS NOT HAVING ANY DETAILS OF EARLIER YEARS AND ACCUMUL ATED INCOME WAS EXPLAINED ON THE BASIS OF BASIC EXEMPTION LIMIT AND NET INCOME A VAILABLE TO THE ASSESSEE. THEREFORE, IT IS ESTABLISHED ON RECORD THAT THE ASS ESSEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT AND STATEMENT OF AFFAIRS IN THE EARLIER YEARS. THERE WAS NO BASIS SHOWN OF ANY CLOSING CAPITAL BALANCE IN THE PRECEDING ASS ESSMENT YEAR 2005-06. IN THE CASE OF PARMESHWAR BOHRA (SUPRA), HONBLE HIGH COUR T CONSIDERED THE ISSUE OF OPENING CAPITAL BALANCE. THE TRIBUNAL RECORDED CLEA R FINDING THAT THE IMPUGNED AMOUNT WAS CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE IN EARLIER YEAR AND WAS SHOWN AS CLOSING CAPITAL OF THAT YEAR. THEREFORE, C ARRIED FORWARD AMOUNT OF THE PREVIOUS YEAR WAS NOT CONSIDERED AS INVESTMENT OR C ASH CREDIT IN THE RELEVANT ITA NO. 373/AGRA/2009 14 ASSESSMENT YEAR UNDER APPEAL. SIMILARLY, ITAT, DELH I BENCH IN THE CASE OF JAGTAR SINGH (SUPRA) CONSIDERING THE ASSESSEES STATEMENT OF AFFAIRS OF PAST YEARS AVAILABLE ON RECORD HELD THAT THE GENUINENESS OF THE BROUGHT FORWARD CAPITAL CANNOT BE DOUBTED SIMPLY BECAUSE THE ASSESSEE FILED RETURN OF INCOME FOR THE FIRST TIME. THE FACTS OF BOTH THE CASES ARE CLEARLY DISTINGUISHED F ROM THE FACTS OF THE ASSESSEES CASE BECAUSE THE ASSESSEE IN THE PRESENT CASE DID N OT MAINTAIN ANY BOOKS OF ACCOUNT IN THE EARLIER YEARS AND EVEN NO STATEMENT OF AFFAI RS OF PAST YEAR WAS MAINTAINED OR FILED WITH THE RETURN OF INCOME. THEREFORE, NOTHING WAS ON RECORD TO SHOW THAT THE ASSESSEE HAS ANY ACCUMULATED CAPITAL IN THE PRECEDI NG ASSESSMENT YEAR. THESE DECISIONS HAVE WRONGLY BEEN APPLIED BY THE LD. CIT( A) FOR THE PURPOSE OF DELETING THE ADDITION. FURTHER, THE ASSESSEE HAS SHOWN OPENI NG CAPITAL BALANCE FOR THE FIRST TIME IN THE ASSESSMENT YEAR UNDER APPEAL. THEREFORE , THE AO WAS JUSTIFIED IN ASKING THE EXPLANATION OF THE ASSESSEE ABOUT THE SOURCE OF THE SAME. IT WAS RIGHTLY CONSIDERED IN THE ASSESSMENT YEAR UNDER APPEAL AS U NEXPLAINED OPENING CAPITAL BALANCE BEING INCOME OF THE ASSESSEE FROM UNEXPLAIN ED SOURCES. NOW, WE EXAMINE WHETHER THE ASSESSEE PRODUCED SUFFICIENT EVIDENCE O R MATERIAL BEFORE THE LD. CIT(A), WHICH JUSTIFY HIS ACTION IN DELETING THE AD DITION. THE ASSESSEE CLAIMED THAT RS.38,00,000/- APPROXIMATELY WAS INHERITED BY HIM F ROM HIS FATHER THROUGH HIS WILL. THE ASSESSEE PRODUCED COPY OF THE ORDER OF TH E LD. CIT(A) DATED 24.06.2008 FOR THE ASSESSMENT YEAR 2005-06 BEFORE THE LD. CIT( A). THE ASSESSEE PLACED ITA NO. 373/AGRA/2009 15 RELIANCE ON THE FINDINGS OF THE LD. CIT(A) IN ASSES SMENT YEAR 2005-06, WHICH IS REPRODUCED ABOVE, WHICH WE FIND THAT THE SAME IS ME NTIONED AT PAGE 2 & 3 OF THE ORDER OF THE LD. CIT(A) (PB-44 & 45). THE LD. CIT(A ) FOLLOWING THE FINDING GIVEN BY THE CIT(A) IN THE ORDER DATED 24.06.2008 FOUND T HAT THE ASSESSEE HAS INHERITED RS.38,00,000/- FROM HIS FATHER. WE ARE SURPRISED TH E WAY THE ASSESSEE HAS PLEADED THESE FACTS BEFORE THE LD. CIT(A) FOR GETTING UNDUE BENEFIT OF DELETION OF ADDITION OF RS.38,00,000/-. THE LD. CIT(A) REPRODUCED PART OF T HE OBSERVATIONS FROM HIS ORDER FOR THE ASSESSMENT YEAR 2005-06 IN THE IMPUGNED APP ELLATE ORDER. HOWEVER, THE ENTIRE ORDER OF THE LD. CIT(A) DATED 24.06.2008 REV EAL THAT THERE WAS NO FINDING OF FACT RECORDED BY THE LD. CIT(A) CONSIDERING THE INH ERITANCE OF RS.38 LACS BY THE ASSESSEE FROM HIS FATHER THROUGH WILL. THE LD. CIT( A) CONSIDERED THE ISSUE OF ADDITIONAL INCOME OF RS.9,02,277/- AT INTERNAL PAGE NO. 2 OF THE ORDER FOR THE ASSESSMENT YEAR 2005-06 AND THE SUBMISSIONS OF THE ASSESSEE HAVE BEEN RECORDED IN WHICH FURTHER SUBMISSIONS OF THE ASSESSEE WAS RE CORDED THAT SO FAR AS ACCUMULATION OF CAPITAL WAS CONCERNED ..INVESTED IN THE BUSINESS. THE LD. CIT(A) CONSIDERED THE SUBMISSIONS OF THE ASSESSEES COUNSEL AS FINDING OF THE LD. CIT(A) WITH REGARD TO INHERITANCE OF RS.38 LACS THR OUGH WILL DESPITE THE FACT IT WAS ONLY THE SUBMISSION OF THE ASSESSEES COUNSEL BEFOR E THE LD. CIT(A). THERE WAS NO FINDING OF FACT RECORDED BY THE LD. CIT(A) ON THE I SSUE OF INHERITANCE OF RS.38 LACS THROUGH WILL BY THE ASSESSEE. THE LD. CIT(A), THERE FORE, HAS NOT PROPERLY ITA NO. 373/AGRA/2009 16 APPRECIATED THE FACTS OF THE CASE AND MISUNDERSTOOD THE SUBMISSIONS OF THE ASSESSEE AS FINDINGS OF THE LD. CIT(A) IN ASSESSMENT YEAR 20 05-06. WE MAY, FURTHER NOTE THAT THE IMPUGNED ORDER IS PASSED BY THE SAME CIT(A ), GWALIOR WHO HAS PASSED THE APPELLATE ORDER FOR THE ASSESSMENT YEAR 2005-06.THE REFORE, IT IS HIGHLY IMPROPER ON THE PART OF THE LD. CIT(A) TO CONSIDER THE SUBMISSI ONS OF THE ASSESSEE AS HER FINDING IN THE APPELLATE ORDER. FURTHER, ON GOING THROUGH T HE SUBMISSIONS OF THE ASSESSEE AS NOTED IN THE APPELLATE ORDER FOR THE ASSESSMENT YEA R 2005-06, THE ASSESSEE PRODUCED WILL OF HIS FATHER FOR INHERITANCE OF CAPITAL OF RS .38,00,000/-, BUT NO EVIDENCE OR WILL WAS PRODUCED IN THE PRESENT PROCEEDINGS BEFORE THE LD. CIT(A) AND FURTHER THERE WAS NO ISSUE OF PRODUCTION OF WILL OF FATHER OF ASSESSEE FOR THE ASSESSMENT YEAR 2005-06. IT WAS AN ISSUE OF ESTIMATE OF INCOME BY APPLYING HIGHER PROFIT RATE WHICH WAS REDUCED TO BY THE LD. CIT(A). THEREFORE, THERE WAS NO FINDING OF FACT RECORDED WITH REGARD TO INHERITANCE OF RS.38,00,000 /- BY THE ASSESSEE THROUGH THE WILL OF HIS FATHER. THERE WAS NO OCCASION FOR ASSES SEE TO HAVE PRODUCED THE WILL AT ANY POINT OF TIME ON THE ISSUE WHICH WAS NEVER AGIT ATED IN APPEAL BEFORE THE LD. CIT(A) IN ASSESSMENT YEAR 2005-06. FURTHER, THE LAW PROVIDES THAT WILL COULD BE PROVED BY EXAMINING THE MARGINAL WITNESSES WHO HAVE APPENDED THEIR SIGNATURES ON THE WILL. THE LD. DR, THEREFORE, RIGHTLY CONTEND ED THAT NO EVIDENCES HAVE BEEN PRODUCED ON RECORD WHETHER THE WILL WAS GENUINE OR SUBJECT TO PROBATE. SINCE, IT WAS NOT AN ISSUE BEFORE THE LD. CIT(A) IN THE ASSES SMENT YEAR 2005-06 AND THE LD. ITA NO. 373/AGRA/2009 17 CIT(A) IN ASSESSMENT YEAR UNDER APPEAL WRONGLY TAKE N THE SUBMISSIONS OF THE ASSESSEE AS FINDING GIVEN IN EARLIER YEAR, WOULD ES TABLISH THAT THERE WERE NO EVIDENCES BEFORE THE LD. CIT(A) IN ASSESSMENT YEAR UNDER APPEAL TO PROVE THAT THE ASSESSEE GENUINELY RECEIVED RS.38,00,000/- FROM HIS FATHER. THE FINDING OF FACT RECORDED BY THE LD. CIT(A) IS THUS, NOT BASED ON AN Y EVIDENCE IN ASSESSMENT YEAR UNDER APPEAL. THE LD. CIT(A) WAS, THEREFORE, NOT JU STIFIED IN DELETING THE ADDITION OF RS.38,00,000/-. 6.1 THE ASSESSEE FURTHER CLAIMED THAT RS.6,00,000/- HAVE BEEN RECEIVED BY HIM FROM HIS BROTHER, KISHAN AGARWAL IN LIEU OF RELINQU ISHMENT OF HIS RIGHT IN THE HOUSE BY VACATING THE HOUSE AS DISCUSSED IN ASSESSMENT YE AR 2005-06. AGAIN THE FACT IS SAME THAT IT WAS NOT IN ISSUE BEFORE THE LD. CIT(A) IN ASSESSMENT YEAR 2005-06. IT WAS ONLY THE SUBMISSION OF THE ASSESSEE BEFORE THE LD. CIT(A) ON WHOLLY UNCONNECTED ISSUE OF ESTIMATE OF PROFIT RATE, ON WH ICH ALSO, THERE IS NO FINDING OF FACT GIVEN BY THE LD. CIT(A). THE LD. CIT(A) MISUND ERSTOOD THE SUBMISSIONS OF THE ASSESSEE IN THE ASSESSMENT YEAR 2005-06 AS FINDING OF FACT RECORDED IN EARLIER YEARS ORDER. THE FINDING RECORDED BY THE LD. CIT(A) FOR T HE PURPOSE OF DELETING THE ADDITION OF RS.6,00,000/- IS, THEREFORE, BASED ON N O EVIDENCE. FURTHER, THE LD. COUNSEL FOR THE ASSESSEE FILED COPY OF COMPROMISE D EED DATED 10.06.1990 IN PB- 20, IN WHICH IT IS STATED THAT BROTHER OF THE ASSES SEE HAS GIVEN RS.6,00,000/- TO THE ITA NO. 373/AGRA/2009 18 ASSESSEE FOR VACATING HIS HOUSE BY RELINQUISHING HI S RIGHT IN THE PROPERTY. THE DETAILS GIVEN IN THE COMPROMISE DEED WOULD SHOW THA T THE BROTHER OF THE ASSESSEE WAS OWNER OF THE PROPERTY WHICH IS VACATED BY THE A SSESSEE AND ALSO RELINQUISHED HIS RIGHT IN THE PROPERTY. THE LD. CIT(A) IN HIS FI NDING TOOK THE PROPERTY IN QUESTION AS ANCESTRAL PROPERTY OF ASSESSEE, IN WHICH HE RELI NQUISHED HIS SHARE FOR RECEIVING RS.6,00,000/- FROM HIS BROTHER. THUS, THE LD. CIT(A ) RECORDED INCORRECT FINDING OF FACT WITHOUT EXAMINING THE DOCUMENT IN QUESTION. NO EVIDENCE HAS BEEN PRODUCED AS TO WHY THE ASSESSEE RELINQUISHED THE RIGHT IN TH E PROPERTY OF HIS BROTHER. WHEN THE BROTHER OF THE ASSESSEE WAS OWNER OF THE PROPER TY AS PER COMPROMISE DEED, THERE WAS NO QUESTION OF RELINQUISHMENT OF RIGHT BY THE ASSESSEE. FURTHER, THE RELINQUISHMENT IN THE IMMOVABLE PROPERTY COULD BE D ONE THROUGH REGISTERED DOCUMENT ONLY. FURTHER, IT WAS NOT EXPLAINED AS TO WHO WAS THE OWNER OF THE PROPERTY AND WHAT WAS THE VALUATION OF THE IMMOVABL E PROPERTY ? THE COMPROMISE IS MADE ON PLAIN PAPER ON DATED 10.06.1990. THE AMO UNT WAS GIVEN IN CASH, BUT THE SOURCE OF THE SAME IS ALSO NOT EXPLAINED AND IT IS ALSO NOT EXPLAINED THAT SINCE JUNE, 1990, HOW THE CASH WAS PRESERVED BY THE ASSESSEE TI LL THE ASSESSMENT YEAR UNDER APPEAL, I.E., 2006-07. ON THE BASIS OF THE ABOVE EX ORBITANT FEATURES AND CONTRADICTIONS AND WRONG FINDINGS GIVEN BY THE LD. CIT(A), WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE AD DITION OF RS.6,00,000/-. THE LD. CIT(A) WITHOUT HAVING ANY EVIDENCE OR MATERIAL BEFO RE HIM AND WITHOUT ANY ITA NO. 373/AGRA/2009 19 JUSTIFICATION WRONGLY GAVE BENEFIT OF RS.6,00,000/- TO THE ASSESSEE TO EXPLAIN THE OPENING CAPITAL INTRODUCED BY THE ASSESSEE IN THE A SSESSMENT YEAR UNDER APPEAL. 6.2 THE ASSESSEE ALSO CLAIMED BENEFIT OF RS.6.81 LA CS ON ACCOUNT OF ACCUMULATED CAPITAL FROM THE EARLIER YEARS. THE DETAILS OF THE SAME ARE NOTED AT PAGE 5 OF THE IMPUGNED ORDER, IN WHICH ONLY SMALL AMOUNT IS STATE D TO BE AVAILABLE TO THE ASSESSEE IN DIFFERENT YEARS. NOTHING IS EXPLAINED A S TO FROM WHERE THE ASSESSEE MET HOUSEHOLD EXPENSES AND PERSONAL EXPENSES. THE AO GA VE SPECIFIC FINDING OF FACT AS NOTED ABOVE THAT THE ASSESSEE WAS HAVING BELOW T AXABLE LIMIT INCOME OR ONLY MARGINALLY ABOVE TAXABLE LIMIT AND AS PER ASSESSEE S OWN ADMISSION HE STARTED BUSINESS BY INVESTING TEN TO TWENTY THOUSAND RUPEES ONLY. HE WAS HAVING SEVEN FAMILY MEMBERS AND THE WITHDRAWALS FOR THE ASSESSME NT YEAR UNDER APPEAL WERE FOUND OF RS.58,025/-. CONSIDERING THE FAMILY SIZE A ND INVESTMENT OF MEAGER AMOUNT MADE IN THE BUSINESS AND RETURN OF INCOME FI LED AT LOW INCOME WOULD SHOW THAT THE ASSESSEE WAS NOT HAVING ANY SUFFICIENT AMO UNT FOR SAVING FOR ACCUMULATING ANY CAPITAL FOR THE ASSESSMENT YEAR UNDER APPEAL. T HE ASSESSEE CLAIMED THAT WIFE SPENT AMOUNT ON HOUSEHOLD EXPENSES, BUT HER RETURN OF INCOME WAS ALSO FILED AT RS.1,00,000/- FOR THREE YEARS. THEREFORE, OUT OF TH E SAID INCOME, IT IS DIFFICULT TO BELIEVE THAT SINCE 1979-80 TILL THE ASSESSMENT YEAR UNDER APPEAL, THE WIFE OF THE ASSESSEE WOULD HAVE SPENT CONSIDERABLE AMOUNT ON HO USEHOLD EXPENSES. NO ITA NO. 373/AGRA/2009 20 EVIDENCE OF SAVING OR ACCUMULATION OF ANY CAPITAL H AS BEEN FILED. NO EVIDENCES OF ANY HOUSEHOLD EXPENSES OR WITHDRAWALS HAVE BEEN FIL ED. THEREFORE, THE LD. CIT(A) WAS NOT JUSTIFIED IN GIVING BENEFIT OF RS.6.81 LACS IN FAVOUR OF THE ASSESSEE. THE FINDING OF FACT RECORDED BY THE LD. CIT(A) IS, THUS , NOT BASED ON ANY EVIDENCE. THE FINDINGS HAVE BEEN GIVEN MERELY ON PRESUMPTION WITH OUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE. HONBLE SUPREME COURT IN THE CASE OF CIT VS SHRI DURGA PRASAD MORE 82 ITR 540 AND IN THE CASE OF SMT . SUMATI DAYAL VS CIT 214 ITR 801 IN WHICH IT WAS HELD THAT THE COURTS AND TRIBUNALS HAVE TO JUDGE THE EVIDENCES BEFORE THEM BY APPLYING THE TEST OF HUMAN PROBABILITIES AFTER CONSIDERING THE SURROUNDING CIRCUMSTANCES. HOWEVER, IN THE PRESENT CASE, THE LD. CIT(A) WITHOUT ANY BASIS GRANTED RELIEF TO THE ASSESSEE. T HEREFORE, SUCH A FINDING CANNOT BE SUSTAINED IN LAW. AS NOTED ABOVE, SINCE NO BALANCE SHEET OR BOOKS OF ACCOUNT HAVE BEEN MAINTAINED IN EARLIER YEAR, THEREFORE, THERE C ANNOT BE ANY CARRY FORWARD OF CLOSING CAPITAL BALANCE TO THE ASSESSMENT YEAR UNDE R APPEAL AS OPENING BALANCE. THE ASSESSEE FOR THE FIRST TIME CLAIMED OPENING BAL ANCE. THEREFORE, IT WAS RIGHTLY CONSIDERED IN THE ASSESSMENT YEAR UNDER APPEAL. FUR THER, NO BASIS OF TELESCOPING OF INCOME WAS PRODUCED BEFORE THE AUTHORITIES BELOW OR BEFORE US. THIS FACT IS PLEADED FOR THE FIRST TIME, BUT NOT SUPPORTED BY AN Y EVIDENCE. FURTHER ON THE BASIS OF SUNDRY CREDITORS AND DEBTORS, NO RELIEF COULD BE GRANTED TO THE ASSESSEE BECAUSE NO DETAILS OF SUCH CREDITORS AND DEBTORS HAVE BEEN MAINTAINED. THE SUNDRY CREDITORS ITA NO. 373/AGRA/2009 21 AND DEBTORS HAVE NOT BEEN NOTED IN THE PRECEDING AS SESSMENT YEAR BECAUSE NO BOOKS OF ACCOUNT OR STATEMENT OF AFFAIRS HAVE BEEN MAINTAINED IN THE PRECEDING ASSESSMENT YEAR. THEREFORE, NO SUCH BENEFIT COULD B E GIVEN TO THE ASSESSEE. SAME WAS ALSO NOT PLEADED BEFORE THE LD. CIT(A) ALSO. CO NSIDERING THE ABOVE DISCUSSION, IT IS CLEAR THAT THE FINDING OF LD. CIT(A) IS PERVE RSE IN LAW. FURTHER, TELESCOPING ISSUE IS WHOLLY UNCONNECTED WITH THE THREE ITEMS ON WHICH THE ASSESSEE CLAIMED BENEFIT TO EXPLAIN OPENING CAPITAL BALANCE AND SUCH CONTENTION OF THE LD. COUNSEL CANNOT BE ACCEPTED. THE ORDER OF THE LD. CIT(A) IS, THUS, NOT SUSTAINABLE IN LAW. IN VIEW OF THE ABOVE DISCUSSION, WE SET ASIDE THE ORDE R OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.50.81 LACS AND RESTORE THE ORDER OF THE ASSESSING OFFICER. 7. IN THE RESULT, THE DEPARTMENTAL APPEAL IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY