I..T.O. WARD 1(1), Nagpur V. SHRI ASHOK GULABCHAND CHANDAK, Nagpur

ITA 396/NAG/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7579 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 14-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 14-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K BARAL
• Keywords: Business expenditure; Additional evidence; Corroborative evidences
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.396/NAG./2014 ( ASSESSMENT YEAR : 200910 ) INCOME TAX OFFICER WARD1(1), NAGPUR APPELLANT V/S SHRI ASHOK GULABCHAND CHANDAK PROP. M/S. CHANDAK FIRE WORKS IND. MAIN ROAD, SITABULDI, NAGPUR 440 012 PAN AATPC4151B .... RESPONDENT ASSESSEE BY : SHRI MUKESH AGRAWAL REVENUE BY : SHRI R.K. BARAL DATE OF HEARING 07.05.2018 DATE OF ORDER 09.05 .2018 O R D E R PER SHAMIM YAHYA, A.M. AFORESAID APPEAL AT THE INSTANCE OF THE REVENUE IS AGAINST THE IMPUGNED ORDER DATED 17 TH JUNE 2014, PASSED BY THE LEARNED COMMISSIONER (APPEALS)I, NAGPUR, RELEVANT TO THE A SSESSMENT YEAR 200910. 2. THE GROUNDS RAISED BY THE REVENUE ARE REPRODUCED BE LOW: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN ADMITTING THE ADDITIONAL EVIDENCE IN CONTRAVENTION OF THE PROVISIONS OF RULE 46A(B) & 46A(C) OF THE L. T.RULES IN AS MUCH AS THE ASSESSEE HAS FAILED TO ESTABLISH WITH E VIDENCE THAT HE WAS PREVENTED BY SUFFICIENT CAUSE IN NOT PRODUCING THE EVIDENCE WHICH WAS CALLED UPON BY THE AO AND WHICH WAS RELEV ANT TO THE GROUNDS OF APPEAL RAISED BEFORE THE CIT (A); 2 SHRI ASHOK GULABCHAND CHANDAK 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT (A) ERRED IN DELETING THE ADDITIONS/ DISALLOWAN CES MADE IN THE BEST JUDGMENT ORDER WITHOUT APPRECIATING THE FACT T HAT THE ASSESSMENT WAS COMPLETED EX-PARTE BY THE AO FOR NON - COMPLIANCE OF THE STATUTORY NOTICES ON THE PART OF THE ASSESSEE; 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT (A) ERRED IN DELETING THE ADDITIONS OF RS. 22,5 3,200/- AS INVESTMENT IN LAND WITHOUT APPRECIATING THE FACT TH AT GENUINENESS OF CASH RECEIPT TO THE EXTENT OF RS. 20 LACS FOR TH E ALLEGED SALE OF LAND WAS NOT PROVED BY THE ASSESSEE BEFORE CIT (A) AND THE ASSESSEE HAD PRODUCED THE EVIDENCE WHICH WAS NOT SU BJECTED TO THE TEST OF GENUINENESS; 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT (A) ERRED IN ACCEPTING GENUINENESS OF THE LOAN OF RS. 3 LACS FROM MR. PRAMOD BHOYAR IN AS MUCH AS THE ASSESSEE H AD NEITHER ESTABLISHED THE GENUINENESS OF THE LOAN NOR ANY CON FIRMATION FROM THE CREDITOR WAS FILED; 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT (A) ERRED IN DELETING THE ADDITION IN RESPECT O F INTRODUCTION OF CAPITAL OF RS. 16,50,000/- WITHOUT APPRECIATING THE FACT THAT THE ACCOUNT WITH JANSEWA URBAN CO-OPERATIVE BANK WAS NE ITHER DISCLOSED ACCOUNT NOR THE GENUINENESS OF THE CREDIT S IN THIS ACCOUNT WERE EXPLAINED BY THE ASSESSEE BEFORE THE C IT (A) AND ALSO THAT SOURCES OF CONTRIBUTION OF RS. 3 LACS FRO M CHANDAK CUT PIECE STORES WERE NEITHER PROVED BY THE ASSESSEE NO R ANY CONFIRMATION WAS FILED; 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION AS INCOME FRO M OTHER SOURCES OF RS. 1,48,944/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD NOT FURNISHED ANY EVIDENCE IN SUPPORT OF EXPENSES; 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN DELETING 20% DISALLOWANCE OF THE BU SINESS EXPENSES IN ABSENCE OF EVIDENCE AS REGARDS THE GENU INENESS OF THE BUSINESS EXPENSES: 8. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONCLUDING FROM THE WOR DS USED BY THE AO IN THIS REMAND REPORT 'THE CONTENTS THEREOF AND HOWEVER FOUND TO CORRECT' THAT THE AO HAD VERIFIED THERE AD DITIONAL DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE AND FOUN D IT CORRECT. WHEN THE AO HAD NOT MADE ANY SUCH VERIFICATION. 3 SHRI ASHOK GULABCHAND CHANDAK 2. BRIEF FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL R UNNING A PROPRIETARY CONCERN IN THE NAME AND STYLE OF CHANDAK FIRE WORKS INDUSTRIES ENGAGED IN MANUFACTURING AND TRADING OF FIREWORKS. ASSESSMENT WAS FRAMED UNDER SECTION 144 OF THE INCO ME TAX ACT, 1961 (FOR SHORT THE ACT ) ON THE GROUND THAT THE ASSESSEE HAS NOT GIVEN NECESSARY DETAILS. IN THE ASSESSMENT ORDER, T HE ADDITION FOR INVESTMENT IN AGRICULTURAL PROPERTY OF ` 22,53,200, WAS MADE AS UNEXPLAINED INCOME OF THE ASSESSEE ON THE GROUND TH AT THE ASSESSEE DID NOT SUBMIT THE SOURCE OF INVESTMENT. FURTHER, T HE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS TAKEN UNSECURED LOAN OF ` 38,13,277 AND GIVEN DETAILS ONLY FOR ` 23,98,000, HENCE, THE ASSESSING OFFICER ADDED ` 14,15,277 AS AN UNEXPLAINED INCOME. FURTHER, THE A SSESSING OFFICER DISALLOWED 20% OF THE EXPENDITURE ON ADHOC BASIS. THE ASSESSING OFFICER ALSO MADE ADDITION OF ` 16,50,000 ON ACCOUNT OF UNEXPLAINED ADDITION IN PROPRIETORS CAPITAL ACCOUNT. LASTLY, T HE ASSESSING OFFICER ALSO ADDED ` 1,48,994, FOR LACK DETAILS OF AGRICULTURAL INCOME. THE ASSESSEE BEING AGGRIEVED BY THE ORDER OF THE ASSESS ING OFFICER FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. THE ASSESSEE, BEFORE THE LEARNED CIT(A), SUBMITTED VARIOUS DETAILS. THE LEARNED CIT(A) ALSO OBTAINED REMAND RE PORT WHEREIN THE ASSESSING OFFICER REITERATED THE EARLIER ASSESSING OFFICERS ORDER, HOWEVER, IN THE CONCLUDING REMARK, THE ASSESSING OF FICER STATED THAT 4 SHRI ASHOK GULABCHAND CHANDAK THE HONBLE CIT(A) MAY KINDLY DECIDE ABOUT THE ADMI SSION OF FRESH EVIDENCE AND THE CONTENTS THEREOF ARE, HOWEVER, FOU ND TO BE CORRECT. THE FINDINGS OF THE LEARNED CIT(A) ARE REPRODUCED B ELOW: 6.0 GROUND NO.2: IN GROUND NO.2, THE APPELLANT HAS OBJECTED TO THE ADDITION OF RS.54,67,421/- MADE UNDER FOUR DIFF ERENT HEADS AS UNDER: INVESTMENT IN LAND : RS. 22,53, 200/- I) UNSECURED LOANS : RS. 14,15,277/- II) CAPITAL : RS. 16,50,000/- III) AGRICULTURAL INCOME : RS. 1,48,9 44/- TOTAL RS. 54 ,67,421/- 6.1 ADDITION ON ACCOUNT OF INVESTMENT IN LAND OF RS .22,53,200/- : THE AC IN THE COURSE OF ASSESSMENT PROCEEDINGS NO TICED THAT THE ASSESSEE HAD PURCHASED AN IMMOVABLE PROPERTY, BEING AGRICULTURAL LAND BEARING NO.83/2, R.G. 1.04 HECTARES SITUATED A T NAGPUR RURAL, DIST. NAGPUR FOR RS.21,00,000/- ON 12.06.200 8 FROM SHRI MANOHAR KISAN THAKRE, ON WHICH STAMP DUTY OF RS. 1, 18,000/- AND REGISTRATION CHARGES OF RS.35,200/- WERE PAID BY TH E ASSESSEE. THE AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF INVE STMENT IN LAND TO THE TUNE OF RS.22,53,200/-. THE AC HAS RECORDED FINDING IN THE ASSESSMENT ORDER THAT SINCE NO EXPLANATION HAS BEEN FILED, THEREFORE, THE ENTIRE INVESTMENT IN LAND IS TREATED AS UNEXPLAINED. 6.2 THE AR OF THE APPELLANT FILED A WRITTEN SUBMISS ION DATED 08.10.2013 ENCLOSED WITH THE EVIDENCES IN SUPPORT O F HIS SUBMISSIONS. THE AR IN PARA 6 OF HIS SUBMISSION APP EARING ON PAGE NO.4 TO 6 OF THE PAPER BOOK HAS EXPLAINED THE SOURCE OF INVESTMENT IN PURCHASE OF LAND. THE AR HAS SUBMITTE D THAT THE ASSESSEE IS OWNING AN AGRICULTURAL LAND ADMEASURING 2.3 HECTARES AT MOUZA SONEGAON. THE AR FURTHER SUBMITTED THAT TH E ASSESSEE ENTERED INTO AN AGREEMENT TO SALE WITH ONE MR.DINES H MAHESHWARI AND OTHERS FOR SALE OF TWO ACRES OF LAND ON 01.04.2 008 FOR A TOTAL CONSIDERATION OF RS.40 LAKHS, OUT OF WHICH RS.20 LA KHS RECEIVED AS ADVANCE. IN SUPPORT OF HIS CLAIM, A COPY OF AGREEME NT OF SALE HAS BEEN FILED ON RECORD. THE AR OF THE ASSESSEE HAS EX PLAINED THE INVESTMENT IN LAND AS UNDER: 6) INVESTMENTS IN PURCHASE OF AGRICULTURAL LAND I. THAT DURING THE YEAR ON 12.06.2008 THE ASSESSEE HAS PURCHASED AGRICULTURAL AD-MEASURING 1.04 HECTRES AT MOUZA WAK ESHWAR FROM 5 SHRI ASHOK GULABCHAND CHANDAK MANOHAR THAKRE AND RAVI WALDE, THE DETAILS OF INVES TMENTS MADE ARE AS UNDER - PAYMENTS TO SELLERS DATE AMOUNT MODE 01.04.2008 5,00,000.00 CASH 11.04.2008 5,00,000.00 CASH 01.05.2008 5,00,000.00 CASH 01.06.2008 4,00,000.00 CASH 12.06.2008 2,00,000.00 CHEQUE ` 21,00,000.00 STAMP DUTY 12.06.2008 ` 1,18,00.00 REGISTRATION CHARGES, ETC. 12.06.2008 ` 35,200.00 GRAND TOTAL ` 22,53,200.00 II. THE ASSESSEE IS OWNING AGRICULTURAL LAND ADMEA SURING 2.34 HECTARES (APPROX 5.78 ACRES) AT MOUZA SONEGAON. III. HE ENTERED IN TO AN AGREEMENT OF SALE WITH DIN ESH MAHESHWARI AND OTHER FOR SALE OF 2 ACRES OF LAND FOR THE CONSI DERATION OF ` 40,00,000 ON 01.04.2008, FROM THE ABOVE LAND AND RE CEIVED SUM OF ` 20,00,000 AS ADVANCE IN CASH ON 01.04.2008. TH E DETAILS ARE AS UNDER: I. DINESH MAHESHWARI RS. 5,00,000.00 II. RAJENDRA MAHESHWARI RS. 8,00,000.00 III. SMT. SAVITRI MAHESHWARI RS. 3,00,000.00 IV. BRIJMOHAN MAHESHWARI RS. 4,00,000.00 RS.20,00,000.00 IV. THE SOURCE OF INVESTMENTS ARE FROM FOLLOWING SO URCES (1) ADVANCE RECEIVED ON AGREEMENT OF SALE AS ABOVE RS. 20,00,000.00 (2) PAYMENT MADE TO ON OF THE SELLERS BY TWO CHEQUES DT. 12.06.2008 TO RAVI WALDE RS. 2,00,000.00 (3) CASH WITHDRAWALS FROM O.D. A/C WITH JANSEWA URBAN CO.OP. BANK ON 11.06.2008 RS.1,25,000.00 (4) PAYMENT OF REGISTRATION FEE SUB REGISTRAR, BY CHEQUE FROM JAN SEWA URBAN COOP. BANK ON 12.06.2008 RS. 29,580.00 RS.23,54,580.00 6 SHRI ASHOK GULABCHAND CHANDAK V. THE INVESTMENTS OF RS.22,53,200 AS PER PARA (I) ABOVE, ARE FROM THE ABOVE SOURCES. VI. THAT IN THE CONTEXT IT IS SUBMITTED WITH GREAT RESPECT AND HUMILITY THAT THE FOLLOWING WITHDRAWALS / PAYMENTS WHICH ARE BY CHEQUE / CASH CANNOT BE DISPUTED. I) CASH ON 12.06.2008 RS. 1,25,000.00 II) CHEQUE FROM BANK TO SUB REGISTRAR 12.06.2008 RS. 29,580.00 III) CHEQUE TO SELLOR RAVI WALDE ENCASHED ON 12.06.2008 RS. 1,00,000.00 IV) CHEQUE TO SELLOR RAVI WALDE ENCASHED ON 12.06.2008 RS. 1,00,000.00 RS. 4,54,580.00 VII. THE ADVANCE RECEIVED AMOUNTING TO ` 20,00,000 AS PER PARA (III) ABOVE RETURNED TO THEM ON THE FOLLOWING MENTIONED D ATES SINCE ASSESSEE COULD NOT GET THE NECESSARY SANCTION FROM NIT & TOWN PLANNING DEPARTMENT. DATE AMOUNT MODE 08.06.2011 5,00,000.00 BY DEMAND DRAFT 06.09.2011 3,00,000.00 BY DEMAND DRAFT 14.01.2012 3,00,000.00 BY DEMAND DRAFT 18.06.2012 3,75,000.00 BY A/C PAYEE CHEQUE 18.06.2012 2,25,000.00 BY A/C PAYEE CHEQUE 24.07.2012 3,00,000.00 BY A/C PAYEE CHEQUE 20,00,000.00 VIII. THE GENUINENESS OF THE ADVANCES RECEIVED COUL D NOT BE VERIFIED AT THE TIME OF ASSESSMENT FOR WANT OF PROO F CONFIRMATIONS. ALL THE PERSONS FROM WHOM THE ADVANCES RECEIVED ARE LAND LORDS HAVING SUBSTANTIAL LAND. THEIR CONFIRMATIONS AND AG REEMENT ARE ALSO ENCLOSED. IX. IN THIS CONNECTION IT IS SUBMITTED WITH GREAT H UMILITY THE ADVANCES REFUNDED ON 08.06.2011 AND 06,09.2011 AMOU NTING RS. 5,00,0001- AND RS. 3,00,0001- I.E ARE BEFORE THE DA TE 30. 12.2011 ON WHICH THE ORDER U/S. 144 OF I. T. ACT HAS BEEN P ASSED. IN THE CIRCUMSTANCES IT IS REQUESTED TO DELETE THE ADDITIONS MADE.' 6.3 THE SUBMISSIONS MADE BY THE AR OF THE APPELLANT WERE REMANDED TO THE AG FOR NECESSARY VERIFICATION. THE AG SUBMITTED 7 SHRI ASHOK GULABCHAND CHANDAK HIS REMAND REPORT DATED 17.10.2013. THE AG IN HIS R EMAND REPORT HAS REITERATED THE SAME FACTS MENTIONED IN THE ASSE SSMENT ORDER. HOWEVER, AT THE END OF HIS REPORT, THE AG HAS RECOR DED THE FOLLOWING FINDING: 'THE HON'BLE CIT(A) -I, NAGPUR, MAY KINDLY DECIDE A BOUT ADMISSION OF FRESH EVIDENCE. THE CONTENTS THEREOF AND HOWEVER FOUND TO CORRECT.' 7.0 ON CAREFUL EXAMINATION OF THE FACTS, IT IS SEEN THAT THE AR OF THE APPELLANT HAS DEMONSTRATED THE SOURCES OF FUNDS APPLIED FOR PURCHASE OF LAND BY THE APPELLANT. THE AR HAS ALSO FILED THE NECESSARY SUPPORTING EVIDENCES IN THE FORM OF SALE AGREEMENT WITH FOUR PARTIES FROM WHOM ADVANCE OF RS. 20 LAKHS, AS STATED ABOVE, WAS RECEIVED, WHICH HAS BEEN UTILISED BY THE APPELL ANT TOWARDS PURCHASE OF LAND. THESE DOCUMENTS WERE FORWARDED TO THE AO CALLING FOR HIS REMAND REPORT AND THE AO AFTER EXAM INATION HAS CONCLUDED THAT THE CONTENTS OF THE DOCUMENTS AND EV IDENCES FILED BY THE AR OF THE APPELLANT ARE FACTUALLY FOUND CORR ECT, THE AO HOWEVER HAS REFRAINED TO GIVE ANY COMMENTS AS REGAR DS TO THE ADMISSIBILITY OR OTHERWISE OF THE ADDITIONAL EVIDEN CES FILED BY THE AR. SINCE THE EVIDENCES FILED BY THE AR ARE PIVOTAL IN DETERMINING THE GROUNDS OF APPEAL, COUPLED WITH THE FACT THAT A SSESSMENT HAS BEEN COMPLETED EXPARTE U/S 144 OF THE ACT BY THE A .O., THE ADDITIONAL EVIDENCES FILED BY THE AR CANNOT BE DISC ARDED, HENCE THE SAME ARE CONSIDERED WHILE DECIDING THE ISSUES IN HA ND AND ALSO THAT NON-COGNIZANCE OF SUCH EVIDENCES WOULD CAUSE G ROSS INJUSTICE TO THE APPELLANT. THEREFORE, THE ADDITIONAL EVIDENC ES FILED BY THE AR HAVING DIRECT CORRELATION WITH THE GROUNDS OF APPEA L, ARE ACCEPTED. THUS, KEEPING IN VIEW OF THE FINDING OF THE AO IN H IS REMAND REPORT AND THE EVIDENCES FURNISHED BY THE AR OF THE APPELL ANT, IT IS SEEN THAT THE SOURCES OF THE INVESTMENT IN PURCHASE OF L AND ARE SATISFACTORILY EXPLAINED BY THE APPELLANT. THEREFOR E, I DO NOT FIND ANY JUSTIFICATION IN MAKING ANY ADDITION ON THIS AC COUNT AND ACCORDINGLY, THE ADDITION MADE BY THE AO IS DIRECTE D TO BE DELETED. 8.0 UNSECURED LOANS RS.14,15,277/-: THE AO IN THE ASSESSMENT PROCEEDINGS NOTICED THAT T HE ASSESSEE HAD TAKEN UNSECURED LOANS OF RS.38,13,277/-. THE AO HAS STATED THAT THE ASSESSEE COULD PROVIDE THE DETAILS OF UNSE CURED LOANS TO THE TUNE OF RS.23,98,000/- ONLY AND NO EXPLANATION, ACCORDING TO THE AO, WAS OFFERED IN RESPECT OF REMAINING LOAN AM OUNT OF RS.14,15,277/-. THE AO, THEREFORE, HAS TREATED THE SAME AS UNEXPLAINED INCOME IN THE HANDS OF THE ASSESSEE IN THE EX-PARTE ORDER PASSED U/S 144 OF THE ACT. 8.1 THE AR OF THE APPELLANT HAS FILED THE SUBMISSI ON AS UNDER: '4) ADDITION OF UNSECURED LOANS 8 SHRI ASHOK GULABCHAND CHANDAK I. THE LEARNED A.O. HAS MADE ADDITION OF RS. 14,15,277 /- ON THIS COUNT. II. THE UNSECURED LOANS AS AT 31.03.2008 AND 31.03.2009 ARE AS UNDER - I. 31.03.2008 RS. 38,38,277.00 II.31.03.2009 RS. 38,13,277.00 III.THAT NO SUCH ADDITION WAS MADE IN THE YEAR ENDING ON 31. 03.2008. IV. THE COMPARATIVE DETAILS OF ADDITION MADE AS UNDER: NAME BALANCE ON 31.3.2008 BALANCE ON 31.3.2009 REMARKS BHOYAR DEVELOPERS 8,75,000 8,75,000 OPENING BALANCE AS ON 01.04.2008 G.K. TRADERS 61,459 61,459 OPENING BALANCE AS ON 01.04.2008 H.G. GUPTA 40,000 40,000 OPENING BALANCE AS ON 01.04.2008 MAHESHWARI JARDA STORES 57,818 57,818 OPENING BALANCE AS ON 01.04.2008 PRAMOD BHOYAR 3,00,000 NEW LOAN BY A/C P. CH. ON 20.02.2009 RAJESH SHARMA 20,000 20,000 OPENING BALANCE AS ON 01.04.2008 GAYATRI CHANDAK 19,000 19,000 OPENING BALANCE AS ON 01.04.2008 MANJU CHANDAK 18,000 18,000 OPENING BALANCE AS ON 01.04.2008 MAHESH CHANDAK 24,000 24,000 OPENING BALANCE AS ON 01.04.2008 11,15,277 14,15,277 V. THAT FROM THE ABOVE CHART IT IS WELL APPARENT THAT EXCEPT LOAN VIDE ENTRY NO.5 IN THE NAME OF PRAMOD BHOYAR, ALL OTHER ARE OLD LOANS AND ACCEPTED AS GEN UINE IN PAST. SHRI PRAMOD BHOYAR IS ASSESSED TO INCOME T AX, CONFIRMATION IS ENCLOSED. 9 SHRI ASHOK GULABCHAND CHANDAK VI. THAT IF ON VERIFICATION THE ABOVE IS FOUND TO BE CORRECT, THE A.O. MAY BE DIRECTED TO DELETE THE ADD ITION MADE. 8.2 ON CAREFUL EXAMINATION OF THE FACTS, IT IS SEEN THAT THE CONTENTION OF THE AR OF THE APPELLANT THAT ALL LOAN S, EXCEPT THE AMOUNT OF RS.3,00,000/- APPEARING AT SR.NO.5 IN THE NAME OF PRAMOD BHOYAR ARE OLD LOANS APPEARS TO BE CORRECT. IN RESPECT OF THE LOAN AMOUNT OF RS. 3,00,000/-, WHICH IS TAKEN D URING THE RELEVANT FINANCIAL Y EAR, IT IS FOUND THAT THE AMOUNT HAS BEEN RECEIVED BY ACCOUNT-PAYEE CHEQUE, WHICH IS VERIFIAB LE FROM THE BANK ACCOUNT OF THE APPELLANT. SINCE THE AO HAS ADD ED THIS AMOUNT WITHOUT VERIFICATION FOR WANT OF DETAILS SUB MITTED BY THE ASSESSEE, THE ADDITION MADE BY THE AO DOES NOT SUST AIN. EVEN IN RESPECT OF OLD BROUGHTFORWARD LOANS, NO PROPER INV ESTIGATION HAS BEEN DONE BY THE AO DURING THE ASSESSMENT PROCEEDIN GS AND THE ADDITION HAS BEEN MADE IN A ROUTINE AND CASUAL MANN ER. THE DETAILS FURNISHED BY THE APPELLANT DURING THE APPEL LATE PROCEEDINGS WERE PROVIDED TO THE AG FOR VERIFICATION. HOWEVER, IT CLEARLY TRANSPIRES FROM THE FINDING GIVEN BY THE AG IN HIS REMAND REPORT DATED 17.10.2013, VIDE PARA B ON PAGE NO.1, THAT NO WORTHWHILE INVESTIGATION HAS BEEN MADE IN RESPECT OF THE VERAC ITY OF UNSECURED LOANS. THE AG, HOWEVER, AT THE END OF HIS REPORT HAS RECORDED THE FOLLOWING FINDING: 'THE HON 'BLE CIT (A) -I, NAGPUR, MAY KINDLY DECIDE ABOUT ADMISSION OF FRESH EVIDENCE. THE CONTENTS THEREOF A ND HOWEVER FOUND TO CORRECT.' 8.3 THUS, AFTER HAVING CONSIDERED THE MATERIAL FACT S AVAILABLE ON RECORD, I DO NOT FIND ANY MERITS IN THE ADDITION MA DE BY THE AG AND THE SAME IS DIRECTED TO BE DELETED. 9.0 CAPITAL RS.1650,000/-: THE AG HAS DISCUSSED THIS ISSUE IN PARA 10 OF THE A SSESSMENT ORDER. THE AG FOUND THAT THE ASSESSEE HAS MADE AN A DDITION OF RS.16,50,000/- IN THE CAPITAL ACCOUNT OF N/S CHANDA K FIREWORKS INDUSTRIES, NAGPUR. THE AG HAS STATED THAT INTRODUC TION OF CAPITAL HAS NOT BEEN EXPLAINED, HENCE TREATED AS UNEXPLAINE D INCOME IN THE HANDS OF THE ASSESSEE IN THE ORDER PASSED EX-PA RTE U/S 144 OF THE ACT. THE AR OF THE APPELLANT HAS FILED SUBMISSION AS UND ER: 5) CREDITS IN CAPITAL AMOUNT ` .16,50,000 (I) THE DETAILS ARE AS UNDER: 10 SHRI ASHOK GULABCHAND CHANDAK DATE AMOUNT PARTICULARS 30.06.2008 5,00,000 WITHDRAWALS FROM O.D. A/C WITH JANSEWA URBAN CO.OP BANK PERSONAL LOAN A/C 06.08.2008 1,00,000 WITHDRAWALS FROM O.D. A/C WITH JANSEWA URBAN CO.OP BANK PERSONAL LOAN A/C 21.08.2008 2,00,000 WITHDRAWALS FROM O.D. A/C WITH JANSEWA URBAN CO.OP BANK PERSONAL LOAN A/C 24.01.2009 5,00,000 WITHDRAWALS FROM O.D. A/C WITH JANSEWA URBAN CO.OP BANK PERSONAL LOAN A/C 12.02.2009 5,00,000 WITHDRAWALS FROM O.D. A/C WITH JANSEWA URBAN CO.OP BANK PERSONAL LOAN A/C 26.03.2009 3,00,000 TRANSFER FROM CHANDAK CUT PIECE STORES 16,50,000 (II) THE COPY OF BANK ACCOUNT AND COPY OF ACCOUNT FROM CHANDAK CUT PIECE STORES ARE ENCLOSED. (III) THAT SINCE ALL THE CREDITS ARE DULY VERIFIABL E AND FROM KNOWN SOURCES THE LEARNED A.O. MAY BE DIRECTED TO DELETE THE ADDITION.' 9.2 IT IS SEEN FROM THE ABOVE EXPLANATION FILED BY THE AR OF THE APPELLANT THAT THE APPELLANT HAS EXPLAINED THE SOUR CE OF CAPITAL INTRODUCED IN THE PROPRIETARY CONCERN BY WAY OF WIT HDRAWALS FROM THE OVERDRAFT ACCOUNT OF JANSEWA URBAN CO-OPERATIVE BANK AND TRANSFER FROM CHANDAK CUT-PIECE STORES. THE AR HAS ALSO FILED THE SUPPORTING DOCUMENTS IN THE FORM OF COPY OF BANK AC COUNT AND ACCOUNT OF CHANDAK CUT-PIECE STORES. THE AO IN HIS REMAND REPORT HAS CERTIFIED THE CONTENTS AS TRUE, THEREFORE THE A DDITION IS DIRECTED TO BE DELETED IN THE ABSENCE OF ANY EVIDENCE CONTRA RY TO THE RECORDS. 10.0 AGRICULTURAL INCOME RS.1,48,944/-: THE AO HAS DISCUSSED THIS ISSUE IN PARA 11 OF THE A SSESSMENT ORDER. THE AO HAS RECORDED A FINDING THAT SINCE THE ASSESS EE HAS FAILED TO OFFER ANY EXPLANATION AS REGARDS TO THE AGRICULTURA L INCOME, THEREFORE THE EXEMPTION CLAIMED BY THE ASSESSEE IS WITHDRAWN AND TREATED AS INCOME FROM OTHER SOURCES. 10.1 THE AR OF THE APPELLANT HAS FILED SUBMISSION A S UNDER: 'AGRICULTURAL INCOME 11 SHRI ASHOK GULABCHAND CHANDAK I. THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME AT RS . 148,944/- THE DETAILS OF WHICH ARE AS UNDER - PARTICULARS AMOUNT (I)SOYABIN SOLD TO GYNESHWAR MOTIRAM GAJBHIYE RS. 70,535.00 ON 16.12.2008 PAYMENT RECEIVED BY CHEQUE. (II) SOYABIN SOLD TO GYNESHWAR MOTIRAM GAJBHIYE RS. 1,13 ,049.00 ON 24.12.2008 PAYMENT RECEIVED BY CHEQUE. (III) THAR SOLD TO GYNESHWAR MOTIRAM GAJBHIYE ON RS. 34,2 23.00 21.01.2009 PAYMENT RECEIVED BY CHEQUE. (IV) SOYABIN SOLD TO GYNESHWAR MOTIRAM GAJBHIYE RS. 30,4 33.00 ON 26.02.2009 PAYMENT RECEIVED BY CHEQUE TOTAL RS. 2,80,420.00 (V) LESS: EXPENSES RS.99,296.00 NET RS. 1,48,944.00 II. THE ASSESSEE OWNS AGRICULTURAL LAND AD-MEASURING AB OUT 15 ACRES AT SONEGAON WHICH IS IRRIGATED. LOOKING TO TH E AREA OF THE LAND THE INCOME SHOWN IS REASONABLE. THE SAME MAY P LEASE BE ACCEPTED. THE PHOTO-STAT COPIES OF SALE BILLS ARE E NCLOSED. III. IN THE CIRCUMSTANCES IT IS REQUESTED TO DELETE THE ADDITION MADE ON THIS COUNT.' 10.3 IT IS SEEN FROM THE SUBMISSION FILED BY THE AR OF THE APPELLANT THAT THE APPELLANT HAS GIVEN THE DETAILS OF SALE OF AGRICULTURAL PRODUCTS TO VARIOUS PARTIES AND THE SALE CONSIDERAT ION FOR THE SAME HAS BEEN RECEIVED BY CHEQUE FROM THE BUYERS. THE AP PELLANT HAS ALSO APPORTIONED THE EXPENSES AMOUNTING TO RS. 99,2 96/- AGAINST THE GROSS RECEIPTS OF RS.2,80,420/- TO ARRIVE AT TH E NET AGRICULTURAL INCOME OF RS.1,48,944/-. IT IS NOT DISPUTED THAT TH E APPELLANT OWNS AN AGRICULTURAL LAND ADMEASURING 15 ACRES AT SONEGA ON, WHICH IS FERTILE AND IRRIGATED LAND. THE AO HAD MADE THE ADD ITIONS FOR WANT OF DETAILS IN THE ASSESSMENT ORDER, HOWEVER THE SAM E WERE MADE AVAILABLE TO THE AO DURING THE REMAND PROCEEDINGS, THE CONTENTS OF WHICH HAS BEEN CONCEDED TO BE CORRECT BY THE AO IN HIS REMAND REPORT DATED 17.10.2013. IN THE LIGHT OF THESE MATE RIAL FACTS, THE ADDITION MADE BY THE AO CANNOT BE SUSTAINED, KEEPIN G IN VIEW OF THE DECISION OF THE HONBLE ITAT, NAGPUR BENCH, NAG PUR, IN THE CASE OF M/S. LINKHOUSE INDUSTRIES LTD., NAGPUR FOR A.Y. 201011, WHEREIN THE YIELD PER ACRE OF RS. 30,463 HAS BEEN H ELD TO BE REASONABLE IN RESPECT OF A FERTILE AND IRRIGATED LA ND ON WHICH CROPS ARE GROWN. IN VIEW THEREOF, THE AGRICULTURAL INCOME DECLARED BY THE APPELLANT IS QUITE REASONABLE, HENCE THE ADDITION M ADE BY THE AO IS DIRECTED TO BE DELETED. 11.0 GROUND NO.3 : IN THIS GROUND, THE APPELLANT HA S OBJECT TO THE DISALLOWANCE OF BUSINESS EXPENSES TO THE TUNE OF RS .1,27,299/-, WHICH REPRESENTS 20% OF THE TOTAL BUSINESS EXPENDIT URE. 12 SHRI ASHOK GULABCHAND CHANDAK 11.1 THE AO HAS DISCUSSED THIS ISSUE IN PARA 9 OF THE ASSESSMENT ORDER. THE AO IN THE COURSE OF ASSESSMENT PROCEEDIN GS CALLED FOR THE DETAILS OF BOOKS OF ACCOUNT AND BILLS AND VOUCH ERS FOR EXPENSES, WHICH THE APPELLANT FAILED TO FURNISH. TH EREFORE, THE AO IN HIS ORDER PASSED EX-PARTE U/S 144 OF THE ACT DIS ALLOWED 20% OF THE EXPENSES ON AD-HOC BASIS FOR WANT OF PRODUCTION OF BOOKS OF ACCOUNT AND BILLS AND VOUCHERS. 11.2 THE AR OF THE APPELLANT IN THIS REGARD, HAS F ILED THE FOLLOWING SUBMISSION: 'AD-HOC DISALLOWANCE OUT OF EXPENSES I. THAT DURING THE YEAR UNDER REFERENCE THE ASSESSE E HAS CLAIMED EXPENDITURE OF RS. 6,36,495/- (INCLUDING DEPRECIATI ON RS. 6,59,320/-). THE LEARNED A.O. HAS OBSERVED THAT THE EXPENDITURE CLAIMED ARE EXCESS, THEREFORE HE DISALLOWED SUM OF RS. 1,27,2991-, BEING 20% OF RS.6,36,495/-. II. ALL THE EXPENDITURE CLAIMED AS DEDUCTION ARE BONAFI DE BUSINESS EXPENDITURE. THE COMPARATIVE CHART OF EXPE NSES CLAIMED IN THE YEAR ENDING ON 31.03.2008 AND 31.03.2009 IS ENCLOSED. III. THE COMPARATIVE FIGURES OF SALES AND EXPENSES IS AS UNDER: YEAR ENDING PARTICULARS 31.3.2008 31.3.2009 SALES 52,32,814 60,96,162 EXPENDITURE 5,09,011 6,36,495 NET PROFIT 3,74,934 4,67,072 7.16% 7.66% IV. THAT IN THE PAST NO DISALLOWANCE OUT OF EXPENSE S DEBITED TO PROFIT AND LOSS ACCOUNT WAS MADE. V. IN THE CIRCUMSTANCES IT IS REQUESTED TO DELETE T HE DISALLOWANCE MADE.' 11.3 IT IS SEEN FROM THE DETAILS SUBMITTED BY THE A R THAT THE EXPENDITURE CLAIMED BY THE APPELLANT IN THE YEAR UN DER CONSIDERATION REPRESENTS 7.66%, AS AGAINST 7.16% IN THE IMMEDIATELY PRECEDING FINANCIAL YEAR. THE SLIGHT IN CREASE IN THE EXPENDITURE SEEMS TO BE QUITE REASONABLE TO THE COR RESPONDING INCREASE IN THE TURNOVER OF THE ASSESSEE TO RS.60.9 6 LAKHS, AS AGAINST RS.52.32 LAKHS IN THE IMMEDIATELY PRECEDING FINANCIAL YEAR. THE AO HAS MADE THE DISALLOWANCE ON AD-HOC AND ESTI MATED BASIS @ 20% FOR WANT OF PRODUCTION OF BOOKS OF ACCOUNT AN D BILLS AND 13 SHRI ASHOK GULABCHAND CHANDAK VOUCHERS. THE AO HAS NOT EXAMINED THE BOOKS OF ACCO UNT AND BILLS & VOUCHERS EVEN DURING THE REMAND PROCEEDINGS AND R EFRAINED TO GIVE ANY FINDING ON SUBMISSIONS OF THE AR. THEREFOR E, THE ADDITION MADE BY THE AO IS WITHOUT ANY BASIS, HENCE DIRECTED TO BE DELETED. 4. AGAINST THE ABOVE ORDER, THE REVENUE IS IN APPEAL B EFORE THE TRIBUNAL. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE REVENUE, IN ITS SUBMISSION S, STATED THAT THE ASSESSING OFFICER AND THE LEARNED CIT(A) HAVE NOT P ROPERLY VERIFIED THE MATTER, HENCE, THE ORDER PASSED BY THE ASSESSING OF FICER SHOULD BE CONFIRMED. UPON CAREFUL CONSIDERATION, WE FIND THAT THE REVENUE HAS MADE A VERY STRANGE SUBMISSION. WE NOTE THAT THE AS SESSEE HAS SUBMITTED ALL THE NECESSARY DETAILS BEFORE THE LEAR NED CIT(A). THE LEARNED CIT(A) HAS REMANDED THE SAME TO THE ASSESSI NG OFFICER. THE ASSESSING OFFICER IN HIS CONCLUDING REMARK HAS HELD THAT THE CONTENTS OF THE ADDITIONAL EVIDENCES WERE FOUND CORRECT. BASE D ON THIS AND AFTER EVALUATING IN DETAIL THE ADDITIONAL DOCUMENTARY EVI DENCE SUBMITTED BY THE ASSESSEE, THE LEARNED CIT(A) HAS GRANTED NECESS ARY RELIEF. IN SUCH A SCENARIO, WE FAIL TO UNDERSTAND AS TO WHAT IS THE GRIEVANCE OF THE REVENUE FOR WHICH IT IS BEING REQUESTED THAT THE MA TTER BE AGAIN REMANDED. WHEN THE ADDITIONAL DOCUMENTARY EVIDENCES ON THE BASIS OF WHICH THE LEARNED CIT(A) HAD GRANTED RELIEF AND THE CONTENTS THEREOF ARE FOUND TO BE CORRECT BY THE ASSESSING OFFICER WH O HAD DULY VERIFIED 14 SHRI ASHOK GULABCHAND CHANDAK THESE ADDITIONAL DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE, THEN IN THAT CASE, THERE REMAINS NOTHING TO BE ADJUDICATED ANY MORE. IN THE BACKDROP OF THE AFORESAID DISCUSSION AND IN VIEW OF THE DETAILED ORDER PASSED BY THE LEARNED CIT(A), IN OUR CONSIDERED OPI NION, THERE IS NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A). CONSE QUENTLY, THE ORDER OF THE LEARNED CIT(A) IS HEREBY UPHELD BY DISMISSING T HE GROUNDS RAISED BY THE REVENUE. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.05.2018 SD / - RAM LAL NEGI JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER NAGPUR, DATED: 09.05.2018 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. P.S./P.S.) ITAT, NAGPUR