ITO, Gwalior V. Smt. Harleen Kaur Anand, Gwalior

ITA 407/AGR/2009

• Counselvise Citation: 40720314 RSA 2009
• Duration Of Justice: 2 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 24-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Source of fund; Notional interest; Onus to prove
• Section: 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.380/AGR/2009 ASSESSMENT YEAR: 2005-06 HARLEEN KAUR ANAND, VS. INCOME TAX OFFICER, C-5/2, SAFDARGANG DEVELOPMENT WARD 1(2), GWALIOR. AREA, NEW DELHI. (PAN: AEXPA 4974 Q). ITA NO.407/AGR/2009 ASSESSMENT YEAR: 2005-06 INCOME TAX OFFICER, VS. HARLEEN KAUR ANAND, WARD 1(2), GWALIOR. C-5/2, SAFDARGANG DEVELOPMENT AREA, NEW DELHI. (PAN: AEXPA 4974 Q). (APPELLANTS) (RESPONDENTS) ASSESSEE BY : SHRI PANKAJ GARGH, ADVOCATE REVENUE BY : SHRI WASEEM ARSHAD, SR. D.R. DATE OF HEARING : 21.03.2012 DATE OF PRONOUNCEMENT : 23.03.2012 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: ITA NOS.380 & 407/AGR/2009 A.Y. 2005-06 2 THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND R EVENUE AGAINST THE ORDER DATED 30.06.2009 PASSED BY THE LD. CIT(A), GWALIOR FOR THE ASSESSMENT YEAR 2005-06. ITA NO.380/AGR/2009 BY THE ASSESSEE FOR A.Y. 2005- 06 2. THE GROUNDS RAISED BY THE ASSESSEE IN ITS APPEAL ARE AS UNDER :- 1. BECAUSE THE LD. CIT(A) HAS WRONGLY AND ILLEGALL Y HELD THE SERVICE OF NOTICE U/S 143(2) TO BE VALID SERVICE AN D IN TIME. THE SERVICE OF NOTICE U/S 143(2) DIRECTLY BY AFFIXTURE WITHOUT COMPLYING WITH THE PROCEDURE OF VALID SERVICE IS WRONG AND BA D IN LAW. THE ASSESSMENT MADE IN THE ABSENCE OF A VALID SERVICE O F NOTICE U/S 143(2) DESERVES TO BE QUASHED. 2. BECAUSE THE LD. CIT(A) HAS WRONGLY, ILLEGALLY AN D ARBITRARILY CONFIRMED THE ADDITION OF ` 4,79,307/- MADE BY THE ASSESSING OFFICER U/S 69 OF THE INCOME TAX ACT. THE LD. CIT(A) HAS E RRED IN IGNORING THE APPELLANT SUBMISSION AND THE EVIDENCES FILED. 3. BECAUSE THE LD. CIT(A) HAS ERRED IN IGNORING THE ASSESSING OFFICER REMAND REPORT REGARDING IMPUGNED ADDITION O F ` 4,79,307/- IN WHICH THE ASSESSING OFFICER HAS ACCEPTED THE SUBMIS SION OF THE APPELLANT TO BE CORRECT. 4. BECAUSE GROUND NO.7 RAISED BEFORE LD. CIT(A) REG ARDING CHARGEABILITY OF TAX ON SHORT TERM CAPITAL GAIN AT THE RATE AS PRESCRIBED U/S 111A OF HE INCOME TAX ACT HAS NOT BE EN ADJUDICATED UPON. ITA NOS.380 & 407/AGR/2009 A.Y. 2005-06 3 3. THE LD. AUTHORISED REPRESENTATIVE HAS NOT PRESSE D GROUND NO.1 RAISED BY THE ASSESSEE AND, THEREFORE, THE SAME IS DISMISSED AS N OT PRESSED. 4. GROUND NOS. 2 & 3 ARE EFFECTIVELY ONE GROUND REL ATE TO ADDITION OF ` 4,79,307/-. THE BRIEF FACTS OF THESE GROUNDS ARE T HAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DECLARED 2000 SHARES OF ZEE TELEFILMS IN THE BALANCE SHEET AS ON 31.03.2004. BUT, IN ASSESSMENT YEAR 2005-06 THE ASSESSEE SOLD 5500 SHARES OF ZEE T ELEFILMS. SINCE THE ASSESSEE DID NOT SHOW ANY PURCHASE OF SHARES OF ZEE TELEFILM S DURING THE YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER VALUED 3500 SH ARES OF ZEE TELEFILMS APPLYING THE RATE OF THE DATE WHEN SOLD AND MADE ADDITION OF ` 4,79,307/-. THE CIT(A) CONFIRMED THE ADDITION OBSERVING AS UNDER :- AFTER HAVING GONE THROUGH THE RIVAL CONTENTIONS, I HOLD THAT ONCE THE SHARES ARE NOT REFLECTED IN THE RELEVANT B ALANCE SHEET, THE INVESTMENT IN SAME IS TO BE TAKEN AS UNEXPLAINED AN D MADE FROM THE SOURCES OUTSIDE THE BOOKS OF ACCOUNTS. THE CONTENT ION OF A BONAFIDE ERROR IN THE BALANCE SHEET AS ON 31.3.04 IS NOT SUS TAINABLE, AS THE BALANCE SHEET & TRIAL BALANCE WOULD NOT TALLY WITH SUCH MISTAKE AND FURTHER CONTENTION OF INFLATING CASH BALANCE TO TAL LY THE BALANCE SHEET FURTHER RENDERS THE EXPLANATION OF THE APPELLANT UN TENABLE. THE ADDITION IS OF ` 4,79,307/- IS, THEREFORE, WELL BASED WHICH IS CONFI RMED HEREBY. ITA NOS.380 & 407/AGR/2009 A.Y. 2005-06 4 5. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER AND CIT(A) BOTH HAVE NOT APPRECIATED THE GENUINE MISTAK E IN PREPARATION OF BALANCE SHEET OF THE ASSESSEE. 2000 SHARES OF ZEE TELEFILM S HAS BEEN SHOWN BY THE ASSESSEE IN THE BALANCE SHEET AS ON 31.03.2004 ON T HE BASIS OF STATEMENT GIVEN BY BROKER MLB CAPITAL PVT. LTD. MLB CAPITAL PVT. LTD. HAS CONFIRMED THEIR MISTAKE THAT INSTEAD OF 5399 SHARES IN THE STATEMENT, IT HA S BEEN WRONGLY MENTIONED AS 2000 SHARES OF ZEE TELEFILMS. LD. AUTHORISED REPRESENTA TIVE FURTHER SUBMITTED THAT THE BALANCE SHEET AS ON 31.03.2003 OF WHICH COPY HAS BE EN PLACED AT PAGE NO.51 WHEREIN SHARES OF ZEE TELEFILMS HAS SHOWN AS 5399. THE ASSESSEE PURCHASED 101 SHARES DURING THE YEAR AND THE TOTAL SHARES IN STOC K AS ON 31.03.2004 WAS 5500. THIS WAS ALSO SUBMISSION OF THE LD. AUTHORISED REPR ESENTATIVE THAT THERE WAS A COMPENSATORY ERROR WHILE PREPARING THE BALANCE SHEE T AS ON 31.03.2004. THE DIFFERENCE OF SHARES OF ZEE TELEFILMS HAS BEEN COMP ENSATED UNDER THE HEAD CASH IN HAND. LD. AUTHORISED REPRESENTATIVE EXPLAINED THAT THE ASSESSEE DID NOT MAINTAIN THE REGULAR BOOKS OF ACCOUNT. HOWEVER, THE BALANCE SHEET WAS PREPARED ON THE BASIS OF TRANSACTIONS DURING THE YEAR. LD. AUTHORI SED REPRESENTATIVE SUBMITTED THAT CASH IN HAND AND ADVANCE AS ON 31.03.2004 WAS ` 26,49,580/- WHICH IS SUFFICIENT AND WERE INCREASED BY DIFFERENCE OF AMOUNT OF SHARE S OF ZEE TELEFILMS. ITA NOS.380 & 407/AGR/2009 A.Y. 2005-06 5 6. LD. AUTHORISED REPRESENTATIVE BY REFERRING VARIO US PAGES OF PAPER BOOK DEMONSTRATED THAT THERE WAS A GENUINE MISTAKE IN PR EPARATION OF THE BALANCE SHEET. 7. LD. DEPARTMENTAL REPRESENTATIVE, ON OTHER HAND, RELIED UPON THE ORDER OF CIT(A) AND CONFIRMED THAT THE ASSESSEE HAS FAILED T O RECONCILE THE MISTAKE. BEFORE THE ASSESSING OFFICER RECTIFICATION LETTER FROM MLB CAPITAL PVT. LTD WAS OBTAINED BY THE ASSESSEE DATED 21 ST OCTOBER, 2008 WHICH IS ALMOST AFTER 4 YEARS. LD. DEPARTMENTAL REPRESENTATIVE REFERRING THE FINDING O F CIT(A) SUBMITTED THAT THE ASSESSEE HAS FAILED TO MATCH THE DIFFERENCE. THERE FORE, THE CIT(A) HAS RIGHTLY SUSTAINED THE ADDITION OF ` ,4,79,307/- MADE BY THE ASSESSING OFFICER. 8. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE CASE OF THE ASSESSING OFFICER IS THAT THE ASSES SEE HAS SOLD 3500 SHARES OF ZEE TELEFILMS FOR WHICH THE ASSESSEE HAS FAILED TO EXPL AIN THE INVESTMENT IN THE SAID SHARES. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE PURCHASED 3500 SHARES OUT OF UNEXPLAINED SOURCES. ON PERUSAL OF R ECORDS, WE FIND THAT THE ASSESSEE HAS DEMONSTRATED THAT THE SHARES AS ON 31.03.2003 W AS 5399 AS EVIDENT FROM COPY OF BALANCE SHEET FILED BY THE ASSESSEE. WHEN THE A SSESSEE FILED A REASONABLE EXPLANATION, THE REVENUE AUTHORITIES OUGHT TO HAVE EXAMINED FURTHER IF THEY ARE NOT ACCEPTING THOSE PRIMA FACIE REASONABLE EXPLANAT ION. THE ASSESSING OFFICER ITA NOS.380 & 407/AGR/2009 A.Y. 2005-06 6 COULD HAVE VERIFIED THE DEMAT ACCOUNT OF THE ASSESS EE AND CAN EASILY FIND THAT WHEN THE SHARES OF 5399 WERE PURCHASED AND IT COULD ALSO BE VERIFIED WHETHER THE BALANCE SHEET OF THE ASSESSEE AS ON 31.03.2004 WAS CORRECT OR NOT, PARTICULARLY WHEN THE ASSESSEE HAS CLEARLY SHOWN 5399 SHARES IN EARLIER YEARS BALANCE SHEET I.E. 31.03.2004. UNDER THE CIRCUMSTANCES, IT CANNO T BE SAID THAT THE ASSESSEE HAS PURCHASED 3500 SHARES OUT OF UNDISCLOSED SOURCES. THE EXPLANATION OF THE ASSESSEE IS ACCEPTABLE UNDER THE CIRCUMSTANCES IN A CASE WHE RE THE ASSESSEE DID NOT MAINTAIN REGULAR BOOKS OF ACCOUNT BECAUSE UNDER SUCH CIRCUMS TANCES THE ASSESSEE CAN PREPARE A STATEMENT OF AFFAIRS AT THE YEAR END ON T HE BASIS OF TRANSACTION CARRIED OUT DURING THE YEAR. IN FACT, SO CALLED BALANCE SHEET CALLED BY THE ASSESSEE IS A STATEMENT OF AFFAIRS AT THE END OF THE YEAR AND IN PREPARING SUCH STATEMENT OF AFFAIRS THE MISTAKES POINTED OUT BY THE LD. AUTHORISED REPR ESENTATIVE CANNOT BE RULED OUT WHEN SUCH STATEMENT IS NOT PREPARED BY THE EXPERT. THEREFORE, MERELY ON THAT BASIS IT CANNOT BE HELD THAT THE ASSESSEE PURCHASED 3500 SHARES OUT OF UNDISCLOSED SOURCES, PARTICULARLY WHEN THE ASSESSEE HAS INVESTE D IN 5399 SHARES IN PRECEDING YEAR AND SHOWN IN BALANCE SHEET AS ON 31.03.2003. UNDER THE FACTS AND CIRCUMSTANCES AND IN THE LIGHT OF ABOVE DISCUSSIONS , WE ARE OF THE VIEW THAT THE ADDITION OF ` 4,79,307/- IS NOT WARRANTED. THEREFORE, THE SAME I S DELETED. ITA NOS.380 & 407/AGR/2009 A.Y. 2005-06 7 9. IN RESPECT OF GROUND NO.4, THE LD. AUTHORISED RE PRESENTATIVE POINTED OUT THAT THE ASSESSEE HAS RAISED GROUND NO.7 BEFORE THE CIT( A), BUT THE CIT(A) HAS NOT DECIDED THIS GROUND THAT IN CASE OF SHORT TERM CAPI TAL GAIN AT THE RATE AS PRESCRIBED UNDER SECTION 111A OF THE ACT IS TO BE A PPLIED INSTEAD OF HIGHER RATE APPLIED BY THE ASSESSING OFFICER. 10. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATI VE, WE SEND BACK THIS ISSUE TO THE FILE OF ASSESSING OFFICER WITH THE DIRECTION TO CHARGE THE RATE OF TAX AS PRESCRIBED UNDER SECTION 111A OF THE INCOME TAX ACT , 1961 AFTER PROVIDING OPPORTUNITY OF HEARING TO THE ASSESSEE. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.407/AGR/2009 BY THE REVENUE FOR A.Y. 2005-0 6 12. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL ARE AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT (APPEALS) HAS ERRED IN LAW AND FACTS BOTH IN DELETI NG THE ADDITION OF ` 32,19,897/- ON ACCOUNT OF UNSECURED LOANS U/S 68. ITA NOS.380 & 407/AGR/2009 A.Y. 2005-06 8 2. THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (APPEALS) HAS ERRED IN LAW AND FACTS BOTH IN DELETI NG THE ADDITION OF ` 3,05,000/- ON ACCOUNT OF NOTIONAL INTEREST ON LOAN AND ADVANCES. 13. THE BRIEF FACTS IN RESPECT OF FIRST GROUND OF R EVENUES APPEAL ARE THAT THE ASSESSING OFFICER MADE ADDITION OF ` 91,24,737/- UNDER SECTION 68 OF THE ACT. ITEM-WISE DETAILS HAS BEEN GIVEN BY THE CIT(A) IN H IS ORDER AT PAGE NO.2. THE ASSESSEE FURNISHED THE DETAILED SUBMISSIONS TO THE CIT(A). THE CIT(A) FORWARDED THE SAME TO THE ASSESSING OFFICER FOR HIS REMAND RE PORT. THE ASSESSING OFFICER FURNISHED REMAND REPORT DATED 25.06.2009. IN THE R EMAND REPORT, THE ASSESSING OFFICER SATISFIED WITH THE CASH CREDIT OF ` 59,04,840/- BUT HE DID NOT SATISFY WITH THE EXPLANATION OF THE ASSESSEE IN RESPECT OF BALANCE A MOUNT OF ADDITION ` 32,19,897/- AS DETAILED UNDER :- JAPINDER KAUR ` 555992 CHARANJEET SINGH SETHI ` 1307172 SHARANJEET SINGH SETHI ` 1356733 -------------- ` 3219897 ------------- 14. AFTER CONSIDERING THE ASSESSEES SUBMISSION AND REMAND REPORT OF THE ASSESSING OFFICER, THE CIT(A) DELETED THE ADDITION OF BALANCE AMOUNT ` 32,19,897/- AS UNDER :- ITA NOS.380 & 407/AGR/2009 A.Y. 2005-06 9 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE S UBMISSION MADE BY THE LEARNED A.R. ALSO THE COMMENTS OF A.O. IN THE REMAND REPORT. THE A.O. HAS VERIFIED THAT THE AMOUNT GIVE N TO THE APPELLANT BY ALL THE 3 PERSONS HAVE COME FROM THE AMOUNT THEY RECEIVED BY WAY OF REDEMPTION OF UNITS OF FRANKLIN TEMPLETON MANUAL FUNDS. THE PARTICULARS IN CASE OF JAPINDER KAUR HAS BEEN VERIF IED AND CONFIRMED THAT A SUM OF ` 535992/- HAS BEEN RECEIVED BY JAPINDER KAUR FROM TH IS MUTUAL FUND AND HAS BEEN CREDITED IN HER BANK A/C. THE EVIDENCES OF BOTH THE BANK A/C AND MUTUAL FUND ARE ON RECORD. T HIS HAS BEEN CREDITED IN HER BANK A/C ON 10.04.04 AND ` 555992/- HAS BEEN GIVEN TO THE APPELLANT ON 12.04.04. THE A.O. HAS FURTHER GO NE NEXT STEP TO VERIFY FROM WHERE THESE MFS WERE PURCHASED BY HER. THEY WERE PURCHASED IN PREVIOUS A.Y. 2004-05 IN MARCH 2004, H OWEVER NO SUCH WITHDRAWAL APPEARS IN CANARA BANK A/C OF JAPINDER K AUR, HENCE THE A.O. HAS NOT ACCEPTED. THE A.R. HOWEVER SAYS THAT IT IS NOT POSSIBLE FOR THE APPELLANT TO SHOW FROM WHERE THESE MFS WER E PURCHASED BY A THIRD PARTY AND THEY ARE ALSO NOT IN THIS A.Y. 2005 -06. HOWEVER IN CASE OF CHARANJEET SINGH THE A.O. HAS GO NE FURTHER. HE HAS VERIFIED THAT THE AMOUNT RECEIVED FROM FRANK LIN TEMPLETON MUTUAL FUND IS CREDITED IN HIS BANK A/C AND OUT OF THIS ` 1307172/- HAS BEEN GIVEN TO THE APPELLANT ON 12.04.04 AND OUT OF THIS ` 1 LAC. THE A.O. HAS VERIFIED THAT SHRI CHARANAJEET SINGH SETHI HAS PURCHASED THESE MFS FROM THIS BANK A/C ` 1 LAC ON 10.03.04 & 11.03.04 RESPECTIVELY IS APPEARING, HOWEVER, THE APPELLANT I S UNABLE TO EXPLAIN THE SOURCE OF THESE CREDITS IN A/C OF SHRI CHARANJE ET SINGH SETHI. THE SITUATION IN CASE OF SHARANJEET SINGH ANAND ` 1356766/- IS SIMILAR TO MS. JAPINDER KAUR. THE LEARNED COUNSEL FOR THE APPELLANT VEHEMENTLY AR GUED THAT TO ESTABLISH, GENUINENESS OF CREDIT THE APPELLANT H AS TO ESTABLISH IDENTITY GENUINENESS AND ALSO CREDIT WORTHINESS BY FILING ALL NECESSARY PAPERS INCLUDING THEIR AFFIDAVITS AND BANK A/C. TO MAKE APPELLANT RESPONSIBLE TO ESTABLISH SOURCE OF SOURCE IN CASE O F JAPINDER KAUR AND SHRANJEET KAUR AND SOURCE OF SOURCE OF SOURCE IN CA SE OF CHARANJEET SINGH ANAND IS TOO DIFFICULT FOR THE APPELLANT. IN FACT CHARANJEET SINGH ` 61600/- AND JAPINDER KAUR ` 120120/- IN THE SAME A.Y. HAS BEEN ACCEPTED BY THE A.O. HIMSELF. THE LEARNED A.R . HAS RELIED UPON THE SUBMISSION OF CONFIRMATION, AFFIDAVIT, THE SOUR CE FROM WHERE THESE ITA NOS.380 & 407/AGR/2009 A.Y. 2005-06 10 DEPOSITS ARE MADE, THE RECORD OF THEIR PERSONAL ASS ESSMENTS, THEIR BALANCE SHEET, THEIR BANK A/CS COPY OF STATEMENT OF A/C WITH FRANKLIN TEMPLETON MUTUAL FUNDS. ALL THESE SHOW TO ESTABLIS H THAT THE APPELLANT HAS DISCHARGED HIS ONUS TO PROVE THE IDEN TITY, GENUINENESS AND CREDIT WORTHINESS OF ALL THE THREE DEPOSITORS. 15. LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF ASSESSING OFFICER AND SUBMITTED THAT THE CIT(A) HIMSELF ADMITTED THE FACT THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF DEPOSIT. THE LD. DEPARTME NTAL REPRESENTATIVE FURTHER SUBMITTED THAT THE ASSESSING OFFICER IS EMPOWERED T O EXAMINE THE SOURCE OF SOURCE. HE RELIED UPON THE JUDGEMENT OF ALLAHABAD HIGH COURT IN THE CASE OF RAM LAL AGARWAL VS. CIT, 280 ITR 547 (ALL) AND THE JUDG EMENT OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. BIJU PATNAIK, 160 ITR 674 (SC). 16. LD. AUTHORISED REPRESENTATIVE, ON THE OTHER HAN D, RELIED UPON THE ORDER OF CIT(A) AND SUBMITTED THAT THE SOLE OBJECTION OF THE ASSESSING OFFICER WAS THAT THE ASSESSEE FAILED TO PROVE THE CAPACITY OF DEPOSITOR. LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS FURNISHED SUFFICIEN T EVIDENCE IN THE FORM OF BALANCE SHEET, COPY OF BANK ACCOUNT ETC. LD. AUTHO RISED REPRESENTATIVE REFERRED PAGE NOS. 3, 5, 6, 7 & 8 OF PAPER BOOK IN RESPECT O F JAPINDER KAUR FROM WHOM THE ASSESSEE ACCEPTED DEPOSIT OF ` 5,55,992/-. LIKEWISE, PAGE NOS.15, 16, 18 & 20 OF PAPER BOOK WAS REFERRED IN RESPECT OF CHARANJEET SI NGH SETHI AND PAGE NOS.28, 29, 30 & 33 OF PAPER BOOK WAS REFERRED IN CASE OF SHARA NJEET SINGH ANAND. ITA NOS.380 & 407/AGR/2009 A.Y. 2005-06 11 17. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. WE NOTICED THAT THE CIT(A) BEFORE DELETING THE ADDI TION CALLED THE REMAND REPORT FROM THE ASSESSING OFFICER AND THE ASSESSING OFFICE R HIMSELF ACCEPTED THE EXPLANATION OF THE ASSESSEE IN RESPECT OF PART CASH CREDIT FOR ` 59,04,840/-. THE CIT(A) HAS DELETED THAT ADDITION OF ` 59,04,840/- AGAINST WHICH THE REVENUE IS NOT IN APPEAL. IN RESPECT OF REMAINING THREE CASH CRED ITS, THE CIT(A) RECORDED THE FACT THAT THE ASSESSEE HAS SHOWN SOURCE OF FUND FROM WHE RE IT WAS DEPOSITED WITH THE ASSESSEE. THE ASSESSEE HAS FURNISHED THE RELEVANT EVIDENCE OF BANK ACCOUNT AND DETAILS OF MUTUAL FUNDS. THE ASSESSEE HAS ALSO FUR NISHED EXPLANATION OF INVESTMENTS IN MUTUAL FUND WHICH WERE MADE IN EARLI ER YEAR BY THE DEPOSITOR. THE CIT(A) HAS ALSO CONSIDERED THE CONFIRMATION, AFFIDA VIT AND SOURCE OF THE DEPOSITOR. THE CIT(A) OBSERVED THAT THE ASSESSEE IS UNABLE TO EXPLAIN THE SOURCE OF CREDITS IN THE ACCOUNT OF CHARANJEET SINGH SETHI WHICH MEANS T HAT THE ASSESSEE IS UNABLE TO EXPLAIN THE SOURCE OF THE SOURCE. WHEREAS, THE ASS ESSEE HAS SATISFACTORILY EXPLAINED THE IMMEDIATE SOURCE OF THE DEPOSITS, THE DEPOSITS WERE OUT OF MATURITY OF MUTUAL FUND OF DEPOSITOR. THUS, THE DECISION CITED BY THE LD. DEPARTMENTAL REPRESENTATIVE DOES NOT HELP THE REVENUE AS THE ASSESSEE HAS SHOWN EVEN IMMEDIATE SOURCE OF DEPOSIT. IN ADDITION TO THE ABOVE, THE REVENUE HAS FAILED TO POINT OUT ANY CONTRARY MATERIAL TO THE FINDING OF CIT(A). IN THE LIGHT OF THE FACTS AND ABOVE DISCUSSIONS, WE FIND THAT THE CIT(A) HAS RIGHTLY DELETED THE ADD ITION AS THE ASSESSEE HAS ITA NOS.380 & 407/AGR/2009 A.Y. 2005-06 12 DISCHARGED HER ONUS TO PROVE THE IDENTITY, GENUINEN ESS AND CREDIT WORTHINESS OF ALL THE THREE DEPOSITORS. 18. THE BRIEF FACTS IN RESPECT OF SECOND GROUND OF REVENUES APPEAL PERTAINING TO ADDITION OF ` 3,05,000/- ARE THAT THE DURING THE ASSESSMENT PROCE EDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS GIV EN ADVANCE OF ` 20,00,000/- AND ` 5,45,000/- TO SHAIVI BANSAL AND JASDEEP SINGH ANAND & SONS HUF. THE ASSESSING OFFICER HAS PRESUMED THAT THE ASSESSEE HA S GIVEN INTEREST FREE LOANS TO THESE PERSONS. THE ASSESSING OFFICER CALCULATED NO TIONAL INTEREST BY APPLYING 12% RATE OF INTEREST AND MADE ADDITION OF ` 3,05,400/-. THE CIT(A) DELETED THE SAID ADDITION ACCEPTING THE ASSESSEES CONTENTION THAT T HE ASSESSEE DID NOT PAY ANY INTEREST ON LOAN RECEIVED BY HER FROM THE FAMILY ME MBERS. INTEREST FREE ADVANCES WERE GIVEN OUT OF INTEREST FREE LOAN. THEREFORE, N OTIONAL INTEREST INCOME CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE. 19. AFTER HEARING THE LD. REPRESENTATIVES OF THE PA RTIES, WE FIND THAT THE ASSESSING OFFICER HAS CALCULATED NORMAL INTEREST BY APPLYING 12% RATE ON INTEREST FREE ADVANCES. THERE IS NO DISPUTE ABOUT THE FACT THAT THE ASSESSEE HAS NOT CLAIMED INTEREST EXPENSES AS NO INTEREST WAS PAID ON LOANS AND ADVANCES FROM RELATIVES OR FAMILY MEMBERS. THE INTEREST FREE LOANS AND ADVANC ES WERE GIVEN OUT OF INTEREST ITA NOS.380 & 407/AGR/2009 A.Y. 2005-06 13 FREE FUNDS AVAILABLE WITH THE ASSESSEE. WE, THEREF ORE, DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) AS THE ASSESSING OFFICER DID NO T HAVE ANY BASIS FOR MAKING THE ADDITION OF ` 3,05,400/- ON ACCOUNT OF NOTIONAL INTEREST. WE FIN D THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION. WE CONFIRM THE O RDER OF CIT(A). 20. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. 21. IN THE RESULT, ITA NO.380/AGR/2009 FILED BY THE ASSESSEE IS PARTLY ALLOWED AND PARTLY ALLOWED FOR STATISTICAL PURPOSE AND ITA NO.407/AGR/2009 FILED BY THE REVENUE IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 23.03.2012) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 23 RD MARCH, 2012 PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT RESPONDENT CIT CONCERNED CIT (APPEALS) CONCERNED D.R., ITAT AGRA BENCH, AGRA GUARD FILES BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY