M.D.GARG & SONS, HUF, Alwar V. ACIT, Alwar

ITA 42/JPR/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2017 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 22-02-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 15-01-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: K L MULCHANDANI
• Keywords: Unexplained investment; Business income; Loose papers; Principle of natural justice; Corroborative evidences
• Section: 143(3); 133A; 69; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH DQY HKKJR , U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM VK;DJ VIHY LA- @ ITA NO. 42/JP/2015 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2010-11 M.D. GARG & SONS, HUF, PROP. M/S M.S. JEWELLERS, BAZAZA BAZAR, ALWAR CUKE VS. ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE-2, ALWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABHM8864P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ R ESPONDENT VK;DJ VIHY LA-@ ITA NO. 70/JP/2015 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2010-11 ITO, WARD-2(1) ALWAR CUKE VS. M.D. GARG & SONS, HUF, PROP. M/S M.S. JEWELLERS, BAZAZA BAZAR, ALWAR LFKK;H YS[KK LA-@THVKBZVKJ LA- / PAN/GIR NO.: AABHM8864P IZR;K{KSID / OBJECTOR IZR;FKH / RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI K.L. MULCHANDANI JKTLO DH VKSJ LS @ REVENUE BY : SHRI R.A.VERMA (ADDL. CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 08/09/2017 MN?KKS'K .KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 20/09/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 2 BOTH THESE CROSS APPEALS ARE AGAINST THE ORDER OF THE LD. CIT(A), ALWAR DATED 25-11-2014 FOR THE ASSESSMENT YEAR 2010 -11. THE GROUNDS OF APPEAL OF REVENUE AND ASSESSEE ARE AS UNDER: GROUNDS IN ASSESSEES APPEAL. (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LEARNED CIT(A) HAS FACTUALLY AND LEGALLY ERRED IN CONFIRMING THE ADDITION OF RS. 12,19,569/- OUT OF T HE ADDITION OF RS. 80,17,040/- ON ACCOUNT OF THE ALLEG ED EXCESS STOCKS WITHOUT APPRECIATING THE FACTS OF T HE CASE IN RIGHT PERSPECTIVE. THE SAME DESERVES TO BE DELETED. (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LEARNED CIT(APPEALS) HAS FACTUALLY AND LEGALLY ERRE D IN CONFIRMING ADDITION TO THE EXTENT OF RS. 72,702/- O UT OF THE ADDITION OF RS. 15,01,327/- MADE BY THE AO UNDER THE HEAD OF UNRECORDED DEBTORS WITHOUT APPRECIATING THE FACTS OF THE CASE IN RIGHT PERSPEC TIVE. THE SAME DESERVES TO BE DELETED. (III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS FACTUALLY AND LEGALLY ERRED IN CONFIRMING THE ADDITION OF RS. 4,00,000/- OUT OF ADDITION OF RS. 7,13,000/- MADE BY THE AO UNDER THE HEAD OF INVESTMENT IN IMMOVABLE PROPERTY WITHOUT APPRECIATING THE FACTS OF THE CASE IN RIGHT PERSPEC TIVE. THE SAME DESERVES TO BE DELETED. (IV) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS FACTUALLY AND LEGALLY ERRED IN CONFI RMING THE ADDITION OF RS. 876/- OUT OF ADDITION OF RS. 48,700/- MADE BY THE AO ON ACCOUNT OF THE ALLEGED EXCESS CASH WITHOUT APPRECIATING THE FACTS OF THE ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 3 CASE IN RIGHT PERSPECTIVE. THE SAME DESERVES TO BE DELETED. (V) THE APPELLANT CRAVES TO ADDED, AMEND OR WITHDRA W ANY OF THE GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF APPEAL. GROUNDS IN REVENUES APPEAL (I) THAT THE COMMISSIONER OF INCOME TAX (APPEALS) , ALWAR HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASES IN IGNORING THE STATEMEN T BY SHRI. DEEPAK GARG MEMBER HUF DURING THE COURSE OF SURVEY PROCEEDINGS. (II) THAT THE COMMISSIONER OF INCOME TAX (APPEALS) , ALWAR HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASES AS HE HAS ALLOWED RELIEF TO THE ASSESSEE WITHOUT APPRECIATING THE FACTS THAT TH E AO HAS REJECTED THE UPDATED BOOKS OF ACCOUNT U/S 145(3) OF THE ACT. (III) THAT THE COMMISSIONER OF INCOME TAX (APPEALS ), ALWAR HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN RESTRICTING THE ADDITI ON OF RS. 80,17,040/- TO RS. 12,19,569/- MADE BY THE AO ON A/C OF EXCESS STOCK WITHOUT APPRECIATING MATERIA L FACTS OF THE CASE. (IV) THAT THE COMMISSIONER OF INCOME TAX (APPEALS) , ALWAR HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN RESTRICTING THE ADDITI ON OF RS. 15,01,327/- TO RS. 72,702/- MADE BY THE AO ON A/C OF UNRECORDED DEBTORS WITHOUT APPRECIATING MATERIAL FACTS OF THE CASE. (V) THAT THE COMMISSIONER OF INCOME-TAX (APPEALS), ALWAR HAS ERRED IN LAW AS WELL AS ON THE FACTS AND ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 4 CIRCUMSTANCES OF THE CASE IN RESTRICTING THE ADDITI ON OF RS. 7,13,000/- TO RS. 4,00,000/- MADE BY THE AO ON A/C UNEXPLAINED INVESTMENT IN IMMOVABLE PROPERTY. (VI) THAT THE COMMISSIONER OF INCOME TAX (APPEALS) , ALWAR HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS. 1,00,000/- MADE BY THE AO ON THE A/C OF UNEXPLAINED INVESTMENT IN LOTTERY. (VII) THAT THE COMMISSIONER OF INCOME TAX (APPEALS ), ALWAR HAS ERRED IN LAW AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN RESTRICTING THE ADDITI ON OF RS. 48,700/- TO RS. 876/- MADE BY THE AO ON A/C OF EXCESS CASH FOUND DURING THE COURSE OF SURVEY PROCEEDINGS. 2. IN THIS CASE, THE RETURN OF INCOME WAS E-FILED ON 26.09.2010 DECLARING AN INCOME OF RS. 2,87,040/-. THE ASSESSME NT WAS FRAMED U/S 143(3) OF THE ACT. WHILE FRAMING THE ASSESSMENT, TH E AO MADE VARIOUS ADDITIONS VIZ. RS. 80,17,040/- ON ACCOUNT OF EXCESS STOCK, RS. 15,01,327/- ON ACCOUNT OF UNRECORDED DEBTORS, RS. 7 ,13,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN IMMOVABLE PROP ERTY, RS. 1,00,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN LOTTERY AND RS. 48,700/- ON ACCOUNT OF EXCESS CASH FOUND. AGGRIEVED , THE ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A), WHO AFTER CONS IDERING THE SUBMISSIONS OF THE ASSESSEE PARTLY ALLOWED THE APPE AL. NOW BOTH THE SIDES ARE IN APPEAL AGAINST THE ORDER OF LD. CIT (A ). ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 5 3. GROUND NO. 1 OF ASSESSEES APPEAL AND GROUND NO. 3 OF THE REVENUES APPEAL ARE ON THE ISSUE OF PARTLY DELETIN G AND /SUSTAINING THE ADDITION MADE ON ACCOUNT OF EXCESS STOCK. 4. DURING THE COURSE OF SURVEY PARTY WORKED OUT STO CK OF GOLD JEWELLERY OF RS. 5784.885 GMS. THE VALUE OF THIS ST OCK COMES TO RS. 76,93,897/- AND SILVER ORNAMENT VALUED AT RS. 3,23, 143/-. THUS ASSESSING OFFICER MADE IN ADDITION OF RS. 80,17,040 /-. BEFORE THE CIT(A) LD. AR FOR THE ASSESSEE SUBMITTED THAT ASSESSING OF FICER HEAVILY RELIED UPON INVALID STATEMENT GIVEN BY SHRI DEEPAK GARG RE CORDED DURING THE SURVEY OPERATIONS. HE ALSO SUBMITTED THAT IN THE PO ST-SURVEY AND ASSESSMENT PROCEEDINGS. THE ASSESSEE RAISED CERTAIN OBJECTIONS WHICH WERE NOT CONSIDERED BY THE AO IN PROPER PROSPECTS. HE ALSO SUBMITTED THAT THERE WAS NO CORROBORATIVE EVIDENCE WHATSOEV ER WHICH COULD SUBSTANTIATE THE ADDITIONAL INCOME AS OFFERED BY SH RI DEEPAK GARG. THE ASSESSEE SUBMITTED DOCUMENTARY EVIDENCES IN THE FOR M OF PURCHASE BILLS AND BANK REMITTANCE ETC, WITH REGARD TO THE PURCHAS ES WHICH REMAINED UNRECORDED IN BOOKS AT THE TIME OF SURVEY. THESE EV IDENCES HAVE NOT BEEN REBUTTED BY THE REVENUE. THESE EVIDENCES CLEAR LY ESTABLISHES THAT STATEMENT GIVEN BY SHRI DEEPAK GARG WAS NOT BASED O N ANY INCRIMINATING DOCUMENT. MOREOVER SHRI DEEPAK GARG H AS NO LOCUS STANDI ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 6 TO MAKE SUCH STATEMENT. THERE CANNOT BE A CASE FOR EXCESS STOCK AS THE SURVEY PARTY HAS WORKED OUT EXCESS STOCK ON THE BAS IS OF INCOMPLETE BOOKS. AFTER RE-DRAWING THE TRADING ACCOUNT ON THE BASIS OF UPDATED BOOKS, THERE WAS NO DISCREPANCY IN THE QUANTITIES O F THE STOCK TALLIED WITH THE QUANTITIES OF THE STOCK AS WORKED OUT BY T HE SURVEY TEAM. THE QUANTITIES OF THE STOCKS TALLIED WITH THE QUANTITIE S TO STOCKS AS FOUND AT THE SAME TIME OF SURVEY OPERATION. THERE WAS NO DIS CREPANCY IN THE QUANTITIES OF THE STOCK AS NOTED BY SURVEY TEAM AT THE TIME OF SURVEY OPERATION. THERE WAS NO DISCREPANCY IN THE QUANTITI ES OF THE STOCKS. THE ASSESSING OFFICER COULD NOT FIND ANY FAULT WITH SUC H TRADING ACCOUNT OF THE ASSESSEE AND ALSO IN THE STOCK POSITION. SIMILA RLY, THE CORRECTNESS AND GENUINENESS OF THE PURCHASES WHICH WERE NOT REC ORDED IN BOOKS AT THE TIME OF SURVEY OPERATION AND WHEN THE RECORDS W ERE UPDATED AND BOOKS AUDITED, THERE WAS NO DISCREPANCY THE ASSESSI NG OFFICER EXAMINED, VERIFIED AND FOUND NO DISCREPANCY IN THE AUDITED BOOKS OF ASSESSEE. IN THE ABSENCE OF ANY MATERIAL CONTRARY T O THE CLAIM OF THE HUF NO VALID ADDITION CAN BE MADE. THEREFORE THE CIT(A) HAS RIGHTLY DELETED THE ADDITIONS. HE FURTHER SUBMITTED THAT CI T(A) SHOULD HAVE DELETED THE WHOLE ADDITION. CIT(A) HAS GRANTED PART OF THE FURNISHING HOLDING AS UNDER: ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 7 5.3 I HAVE PERUSED THE ASSESSMENT ORDER AS WELL AS SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT AN ADDITION OF RS. 80,17,040/- HAS BEEN MADE BY THE AO ON ACCOUNT OF EXCESS STOCK OF GOLD AND SILVER ORNAMENTS FOUND DURING THE COURSE OF SURVEY AT THE BUSINESS PREMISES OF THE APPELLANT. DURING THE COURSE OF SUR VEY, EXCESS STOCK OF GOLD AMOUNTING TO RS. 76,93,897 WAS FOUND APART FROM EXCESS STOCK OF SILVER OF RS. 3,23,143. 5.4 THE APPELLANT HAS STATED THAT A SURVEY U/S 133A OF THE IT ACT WAS CONDUCTED ON 12.10.2009. THE SURVEY OPERATI ON HAD TO BE CARRIED ON DESPITE THE FACT THAT KARTA OF THE HUF I .E. THE ASSESSEE WAS HOSPITALIZED ON ACCOUNT OF ILLNESS AND THEREFOR E, THE REMAINING ACTIVITIES HAD TO BE CONCLUDED IN THE PRESENCE OF H IS SON. THE BOOKS OF ACCOUNTS WERE FOUND TO BE INCOMPLETE AT TH E TIME OF SURVEY OPERATION ON ACCOUNT OF CONTINUED ABSENCE OF THE ASSESSEE FROM THE BUSINESS DUE TO ILLENESS. THE AO HAS PLACE D RELIANCE ONLY ON THE DIFFERENCE FOUND IN THE VALUE OF STOCK AT TH E TIME OF SURVEY WITHOUT CONSIDERING THE BOOKS OF ACCOUNTS WHICH WER E COMPLETED AFTER INCORPORATING ALL THE PENDING BILLS AND VOUCH ERS. 5.5 IT IS SUBMITTED BY THE APPELLANT THAT IN THE DE TAILS PLACED BEFORE THE AO AS PER THE UPDATED BOOKS, THERE IS NO DISCREPANCY WEIGHT-WISE IN THE QUANTITIES OF THE GOLD ORNAMENTS . IT IS ALSO SUBMITTED THAT THE DIFFERENCE IN THE QUANTITY OF GO LD FOUND AT THE TIME OF SURVEY AND AS PER BOOKS OF ACCOUNTS IS DUE TO THE DIFFERENCES IN THE RATES OF GOLD ADOPTED BY THE VAL UER. IT IS FURTHER STATED THAT COPIES OF PURCHASE VOUCHERS AND BANK AC COUNTS STATEMENTS WERE PLACED ALONG WITH THE AUDITED BOOKS OF ACCOUNTS BEFORE THE AO AND NO CONTRADICTORY MATERIAL COULD B E BROUGHT ON RECORD. SIMILARLY, THE DIFFERENCE IN THE VALUE OF S ILVER STOCK WAS ON ACCOUNT OF VARIATION IN THE LEVEL OF PURITY TAKEN B Y THE APPROVED VALUER OF THE INCOME TAX DEPARTMENT. 5.6 DURING THE COURSE OF ASSESSMENT PROCEEDINGS COM PLETE BOOKS OF ACCOUNTS AND PURCHASE VOUCHERS OF STOCK WE RE PRODUCED BEFORE THE AO FOR EXAMINATION AND NO ADVANCE MATERI AL COULD BE GATHERED BY THE AO AND NO DEFECT IN THE BOOKS OF AC COUNTS WAS POINTED OUT. ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 8 5.7 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E, MATERIAL PLACED ON RECORD AND FIND THAT A COPY OF DAY-WISE S TOCK REGISTER OF GOLD ORNAMENTS WAS PRODUCED IN THE COURSE OF ASSESS MENT PROCEEDINGS. IT WAS STATED BEFORE THE AO THAT THE W EIGHT OF THE GOLD ORNAMENTS ON THE DATE OF SURVEY WAS 7173.77 GR AMS AS AGAINST THE WEIGHT OF 7284.30 GRAMS SHOWN IN THE VA LUATION REPORT PREPARED BY THE APPROVED VALUER AT THE TIME OF SURV EY OPERATIONS. THUS, THERE IS A DIFFERENCE OF 110.6 GRAMS IN THE Q UANTUM OF GOLD ORNAMENTS. THE APPELLANT HAS EXPLAINED THAT THIS DI FFERENCE IS ON ACCOUNT OF DIFFERENCES IN THE LEVEL OF PURITY, WHIC H IS NOTHING BUT A BALD STATEMENT WITHOUT ANY SUPPORTING EVIDENCES. 5.8 HOWEVER, AS REGARDS THE DIFFERENCES IN THE VALU E OF THE STOCK OF GOLD ORNAMENTS IS CONCERNED, THE VALUATION OFFICER HAD VALUED SUCH STOCKS AT RS. 95,15,730/- AS AGAINST TH E VALUE OF RS. 86,18,809 SHOWN IN THE BOOKS OF ACCOUNTS. THUS, THE RE IS DIFFERENCE OF RS. 8,96,921 IN THE VALUATION OF STOC K OF GOLD ORNAMENTS WHICH REMAINS UN-RECONCILED. THE APPELLAN T HAS THOUGH TRIED TO EXPLAIN THE SAME ON ACCOUNT OF DIFFERENCES IN THE LEVEL OF PURITY OF GOLD WHICH IS FOUND TO BE NOT ACCEPTABLE AND WITHOUT ANY SUPPORTING EVIDENCE. 5.9 SIMILARLY, AS REGARDS THE DIFFERENCES IN THE VA LUE OF STOCK OF SILVER IS CONCERNED THE NET WEIGHT OF SILVER ARTICL ES AND ORNAMENTS COMES TO RS. 27854 GRAMS AS AGAINST 19188 GRAMS SHO WN IN THE BOOKS ON THE DATE OF SURVEY. THUS THERE IS DIFFEREN CE OF 866 GRAMS. THE APPELLANT HAS EXPLAINED AGAINST THAT THI S DIFFERENCE IS MAINLY ATTRIBUTABLE TO THE PERCENTAGE OF PURITY TAK EN BY THE VALUER. HOWEVER, IN THE ABSENCE OF ANY MATERIAL BEI NG BROUGHT ON RECORD THE EXPLANATION FURNISHED BY THE APPELLANT I S FOUND TO BE NOT TENABLE AND ACCORDINGLY THE VALUE OF DIFFERENCE IN THE STOCK OF SILVER ARTICLES AND ORNAMENTS IS 8666 GRAMS X RS. 2 8 PER GRAM BEING THE RATE OF SILVER ADOPTED BY THE SILVER, WHI CH COMES TO RS. 2,42,648/-. 5.10 BESIDES, THE ABOVE I FIND THAT DURING THE COUR SE OF SURVEY PRECIOUS STONES WEIGHING 60 CARATS WERE FOUND AND W ERE VALUED AT RS. 80,000 BY THE APPROVED VALUER. NO EXPLANATIO N COULD BE GIVEN IN THE COURSE OF APPELLATE PROCEEDINGS WITH R EGARD TO THE STOCK OF PRECIOUS STONES FOUND AT THE BUSINESS PREM ISES. NO ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 9 ENTRIES IN THE BOOKS OF ACCOUNTS WERE ALSO STATED T O HAVE BEEN FOUND. 5.11 I FIND THAT AO HAS COMPUTED THE VALUE OF UNEXP LAINED INVESTMENT IN STOCK ON THE BASIS OF STOCK VALUATION DONE AT THE TIME OF SURVEY WITHOUT GIVING ANY CREDIT FOR THE PU RCHASE VOUCHERS WHICH WERE NOT ENTERED IN THE BOOKS OF ACCOUNTS. TH E AO HAS IN THE COURSE OF ASSESSMENT PROCEEDINGS ACCEPTED THE E NTRIES RECORDED IN THE BOOKS OF ACCOUNTS ALONGWITH THE BIL LS AND VOUCHERS PRODUCED BEFORE HIM AND HAS NOT BROUGHT ON RECORD A NY FACT OR FINDING CONTRARY TO THIS EFFECT. NO PURCHASE BILL O R THE PAYMENT MADE COULD BE PROVED BY THE AO AS NOT GENUINE IN TH E COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, THERE IS NO RATI ONALE IN THE QUANTUM OF UNEXPLAINED INVESTMENT WORKED OUT BY THE AO IN THE ORDER ON THE BASIS OF PRESUMPTIONS AND SURMISES. 5.12 IN VIEW OF THE ABOVE DISCUSSION, I HOLD THAT U NEXPLAINED INVESTMENT IN STOCK COMES TO RS. 8,96,921 IN GOLD O RNAMENTS; RS. 2,42,648 IN SILVER ARTICLES AND ORNAMENTS AND RS. 8 0,000 IN PRECIOUS STONES. ON THE BASIS OF ABOVE DETAILS, AS DISCUSSED IN THE PRECEDING PARAS, THIS UNEXPLAINED INVESTMENT IN STO CK COMES TO RS. 12,19,569 (RS. 8,96,921 + 2,42,648 + 80,000). T HEREFORE, I CONFIRM THE ADDITION OF RS. 12,19,569 ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE STOCK OUT OF THE TOTAL ADDITION O F RS. 80,17,040 MADE BY THE AO UNDER THIS HEAD. 5. ON THE OTHER HAND, LD. DR RELIED ON THE ORDER OF ASSESSING OFFICER. 6 WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NO TICED THAT THE ASSESSEE HAS SUBMITTED UPDATED COPY OF DAY-WISE STOCK REGIST ER OF GOLD ORNAMENTS. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, THE ASSESSING OFFICER COULD NOT FOUND ANY DISCREPANCY IN THE PURC HASES WHICH WERE NOT ENTERED IN THE BOOKS OF ACCOUNTS AT THE TIME OF SUR VEY. THE ONLY DISCREPANCY FOUND WAS ONLY 110.6 GRAMS IN THE QUANT UM OF GOLD ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 10 ORNAMENTS. THERE WAS THE DIFFERENCE IN THE VALUE OF THE STOCK OF THE GOLD ORNAMENTS. ON THAT BASIS, THE DIFFERENCE WORKE D OUT AT RS. 8,96,921/-. CIT(A) HAS SUSTAINED ADDITION TO THAT E XTENT. IN THE CASE OF SILVER ORNAMENTS THE DIFFERENCE WAS OF RS. 866 GRAM S AND CIT(A) HAS SUSTAINED ADDITION OF RS. 2,42,648/-. WITH REGARD T O THE PRECIOUS STONES WEIGHING 60 CARATS VALUED AT RS. 80,000, NO PROPER EXPLANATION WAS SUBMITTED BEFORE THE AUTHORITIES BELOW AND ALSO BEF ORE US ALSO, THEREFORE AFTER CONSIDERING ALL THE ASPECTS, THE ORDER OF CIT (A) ON THIS ISSUE IS SUSTAINED. IN THE RESULT APPEAL OF REVENUE AS WELL AS BY THE ASSESSEE ARE DISMISSED. 7. THE GROUND NO. 2 OF THE ASSESSEE AND GROUND NO. 4 OF THE REVENUES APPEAL ARE ON THE SAME ISSUE. AO MADE ADD ITION OF RS. 15,01,327 AND CIT(A) SUSTAINED ADDITION OF RS. 72,7 02/-. 8. DURING THE COURSE OF SURVEY OPERATION, A NOTEBOO K CONTAINING UNRECORDED DEBTORS WAS FOUND WHICH WAS IMPOUNDED AS ANNEXURE-A6. SHRI DEEPAK IN HIS STATEMENT STATED THAT SOME OF TH E DEBTORS ARE NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT. THE TOTAL OF THESE DEBTORS WAS RS. 24,27,005/-. THE DETAILS OF THE DEBTORS ARE AS PER PARA 6.1 OF THE ORDER OF CIT(A). THE ASSESSING OFFICER AFTER CONSID ERING THE REPLY OF THE ASSESSEE FOUND THAT DEBTORS FOR AMOUNTING 12,51,327 /- ARE UNRECORDED ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 11 AND ON THE BASIS OF STATEMENT OF SHRI DEEPAK GARG A LUMP SUM DISALLOWANCE OF RS. 2,50,000/- WAS ALSO ADDED AND T HE TOTAL DISALLOWANCE MADE WAS 15,01,37/-. 9. THE LD. CIT (A) GRANTED PART RELIEF TO THE ASSES SEE BY HOLDING AS UNDER: 6.3 I HAVE PERUSED THE ASSESSMENT ORDER AS WELL A S SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT AN ADDITION OF RS. 15,01,327 HAS BEEN MADE BY THE AO ON ACCOUNT OF UNRECORDED DE BTORS. THE ADDITION HAS BEEN MADE ON ACCOUNT OF CERTAIN PAPERS SHOWING SALE OF ITEMS OF JEWELLARY WERE FOUND IN THE COURSE OF S URVEY OPERATION AND WERE FOUND TO HAVE BEEN NOT RECORDED IN THE BOO KS OF ACCOUNTS. THE TOTAL AMOUNT OF THESE UNRECORDED SALE S WERE WORKED OUT AT RS. 12,51,327 AND AFTER MAKING A FURT HER ADDITION OF RS. 2,50,000/- A TOTAL ADDITION OF RS. 15,01,327 WAS MADE ON THIS ACCOUNT. 6.4 THE APPELLANT HAS STATED THAT THE ADDITION MADE ON THIS GROUND IS VAGUE AND AMBIGUOUS AS AO WAS NOT CLEAR A BOUT THE NATURE OF THE ADDITION TO BE MADE. THE AO HAS SPECI FIED THIS AMOUNT AS DISALLOWANCE OF UNRECORDED DEBTORS. THE D EBTORS ARE THE PART OF THE BALANCE SHEET ONLY AND ARE NOT DEBI TED TO P&L A/C, SO THE QUESTION OF DISALLOWANCE OF DEBTORS DOES NOT ARISE AS PER PRINCIPLES OF ACCOUNTANCY. MORE-OVER, ALL THE DEBTO RS AS RECORDED IN THE LOOSE PAPERS OF ANNEXURE A-6 WERE RECORDED I N THE AUDITED BOOKS. THEREFORE, THE BALANCE OF THESE DEBTORS CANN OT BE TREATED AS UNRECORDED INCOME. IT IS ALSO SUBMITTED THAT THE PROVISIONS OF SECTION 69 OF THE ACT WOULD COME INTO PLAY IN RESPE CT OF THE TRANSACTIONS WHICH ARE NOT RECORDED BUT THESE TRANS ACTIONS BEING RECORDED IN THE BOOKS DO NOT CALL FOR ANY ADDITION U/S 69 OF THE ACT. 6.5 THE APPELLANT HAS FURTHER STATED THAT AO HAS NE ITHER DISPUTED SUCH DEBTORS SO FOUND RECORDED IN THE UPDATED BOOKS OF ACCOUNTS NOR HAS BROUGHT ANY MATERIAL ON RECORD BY MAKING E NQUIRIES TO VERIFY THE CORRECTNESS OF SUCH DEBTORS. IN THE CIRC UMSTANCES, THE ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 12 DEBTORS ONCE FOUND RECORDED IN THE AUDITED BOOKS BE ING UNCONTRADICTED CANNOT BE REGARDED AS UN-ACCOUNTED F OR. IT IS PERTINENT TO NOTE THAT THE PROVISIONS OF SECTION 69 OF THE ACT WOULD COME INTO PLAY FOR MAKING DEEMING ADDITION ONLY IF THESE DEBTORS WERE OUT OF BOOKS. THIS IS PRE-CONDITION TO INVOKE PROVISIONS OF SECTION 69 OF THE ACT. AGAIN IT IS A SETTLED LAW TH AT ONCE BOOKS ARE REJECTED U/S 145(3) OF THE ACT ONLY THEN THE DEEMIN G ADDITIONS U/S 69 OF THE ACT CANNOT BE MADE LEGALLY. FURTHER, THER E WAS NO BASIS FOR MAKING LUMP SUM ADDITION OF RS. 2,50,000 WITHOU T BRINGING ANY MATERIAL ON RECORD. 6.6 I HAVE CAREFULLY EXAMINED THE SUBMISSIONS MADE IN THIS REGARD AND FIND THAT AO HAS FAILED TO CONDUCT ANY E NQUIRIES FROM THE SO CALLED UNRECORDED DEBTORS IN THE COURSE OF A SSESSMENT PROCEEDINGS. THE BOOKS OF ACCOUNTS WERE ADMITTED TO HAVE BEEN INCOMPLETE AT THE TIME OF SURVEY ON ACCOUNT OF ILLN ESS OF THE KARTA OF HUG. AO HAS FAILED TO BRING ON RECORD ANY ADVERS E MATERIAL IN THE ASSESSMENT PROCEEDINGS BEFORE MAKING THE ADDITI ON ON THIS GROUND. HOWEVER, I FIND THAT THESE PAPERS FOUND AT THE TIME OF SURVEY PERTAIN TO THE SALES TRANSACTIONS EXECUTED B Y THE APPELLANT AND AGAINST WHICH MONEY WAS TO BE COLLECTED. THEREF ORE, THE ADDITION WHICH COULD LEGALLY BE MADE ON THIS GROUND AND WOULD BE PERMISSIBLE IS THE PROFIT EARNED ON SUCH SALES RATH ER THAN THE GROSS AMOUNT OF UNRECORDED SALES. HOWEVER THE ARGUMENT OF THE APPELLANT THAT THESE SALES HAVE ALREADY BEEN INCORP ORATED IN THE BOOKS WHICH WERE COMPLETED AND PRODUCED BEFORE THE AO IS NOT ACCEPTED AS AFTER GOING THROUGH COPIES OF SUCH PAPE RS, IT IS SEEN THAT THESE ARE NOT REGULAR SALES BILLS BUT SMALL PU RCHIES, WHICH WERE NOT INTENDED TO HAVE BEEN ACCOUNTED FOR. 6.7 THE TOTAL SALES AS WORKED OUT (ON THE BASIS OF ANNX. A-6) IN THE COURSE OF SURVEY WAS RS. 12,51,327 AND THEREFOR E, I DO NOT AGREE WITH THE PROPOSITION OF MAKING A FURTHER LUMP SUM ADDITION OF RS. 2,50,000/- WITHOUT HAVING GIVEN ANY SPECIFIC INSTANCE OF UNRECORDED SALES BY THE AO. NOW THE ISSUE WHICH ARI SES FOR CONSIDERATION IS WHETHER ANY ADDITION COULD BE MAD E ON ACCOUNT OF UNRECORDED SUNDRY DEBTORS OR NOT. CONSIDERING A LL THESE FACTS AND JUDICIAL DECISIONS ON THIS ISSUE, I HOLD THAT O NLY THE UNACCOUNTED PROFITS FROM SUCH SALES COULD BE TAXED RATHER THAN WHOLE AMOUNT OF SALES. IT IS FURTHER STATED BY THE APPELLANT THAT ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 13 THESE SALES WERE RECORDED IN THE BOOKS OF ACCOUNTS AT THE TIME OF COMPLETING THE SAME AND THEREFORE, THE PROFIT EARNE D ON SUCH SALES HAS ALSO BEEN DISCLOSED IN THE ACCOUNT BOOKS. 6.8 I HAVE GONE THROUGH THE CASE RECORDS OF THE APP ELLANT AND FIND THAT A GP RATE OF 9.19% HAS BEEN DECLARED FOR THE PERIOD UNDER CONSIDERATION. THEREFORE, WHILE ESTIMATING TH E INCOME EARNED ON SUCH SALES, CREDIT NEEDS TO BE GIVEN FOR THAT ELEMENT OF PROFIT WHICH HAS ALREADY BEEN DECLARED BY THE APPEL LANT WHILE RECORDING SUCH SALES IN THE BOOKS OF ACCOUNTS. CONS IDERING A GP RATE OF 15% ON SALES OF RS. 12,51,327, THE UNACCOUN TED PROFIT ON SUCH SALES WOULD WORK OUT TO (15%-9.19% OF 12,51,32 7) RS. 72,702. ACCORDINGLY, I CONFIRM AN ADDITION OF RS. 7 2,702 ON ACCOUNT OF PROFITS EARNED ON UNRECORDED SALES OUT O F THE TOTAL ADDITION OF RS. 15,01,327 MADE BY THE AO ON THIS AC COUNT. 10. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE. WE NOTICED THAT CIT(A) HAS ESTIMATED THE GROSS PROFIT @15% ON THE S ALES RS. 12,51,327/- AND ESTIMATED THE PROFIT. CIT(A) ALSO R EDUCED GROSS PROFIT RATE OF 9.19% WHICH WAS DECLARED BY THE ASSESSEE. B EFORE US, BOTH THE SIDES ARE NOT ABLE TO CONTROVERT THE FINDINGS RECOR DED BY THE CIT(A). THEREFORE, WE ARE SUSTAINING THE ORDER OF CIT(A) ON THIS ISSUE. THUS GROUND NO. 2 OF THE ASSESSES AND GROUND NO. 4 OF TH E REVENUE STAND DISMISSED. 11. THE GROUND NO. 3 OF ASSESSEES APPEAL AND GROUN D NO. 5 IN THE REVENUES APPEAL ARE RELATED TO THE PARTLY SUSTAINI NG THE ADDITION MADE ON ACCOUNT OF INVESTMENTS IN BASED ON IMPOUNDED. DU RING THE COURSE OF THE SURVEY OPERATION, THE BRIEF FACTS OF THE ISSUE ARE AS UNDER PAGE NO. 3 ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 14 OF ANNEXURE-6. DURING THE COURSE OF SURVEY OPERATIO N SHOWS. IT WAS RELATED TO INVESTMENT PROPERTY. SHRI DEEPAK GARG WA S ASKED TO REGARDING THE PAYMENTS MADE OUT AS PER THIS IMPOUND ED PAPER AND HE SUBMITTED THAT HE WAS ANY AMOUNT UNDISCLOSED INCOME TO M/S M.S.JEWELLERS AND IT HAS ACCORDINGLY AND IT HAS ACC ORDINGLY TAKEN ON ACCOUNT. HOWEVER, AFTER CONSIDERING THE PLEADINGS O F THE ASSESSEE CIT(A) GRANTED THE PARTLY BY HOLDING AS UNDER: 7.3 I HAVE PERUSED THE ASSESSMENT ORDER AS WELL A S SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT AN ADDITION OF RS. 7,13,000 HAS BEEN MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE OF IMMOVABLE PROPERTY. THE ADDITION WAS MADE ON THE BASIS OF STATEMENT OF SON OF THE KARTA OF HUF I .E. THE ASSESSEE RECORDED AT THE TIME OF SURVEY. THE ADDITION HAS BE EN BASED ON NOTING MADE ON PAGE 3 OF ANNEXURE A6 OF THE PAPERS FOUND IN THE COURSE OF SURVEY. 7.4 THE APPELLANT HAS STATED THAT THE ADDITION SO M ADE IS CONTRARY TO THE PRINCIPLES OF EQUITY AND NATURAL JUSTICE A ND NO OPPORTUNITY WAS ALLOWED TO THE APPELLANT AT ANY STAGE OF THE AS SESSMENT PROCEEDINGS. AO HAS PLACED RELIANCE ON THE INVALID STATEMENT OF SHRI DEEPAK GARG, SON OF THE APPELLANT AND NO MATER IAL IN SUPPORT OF SUCH ADDITION WAS BROUGHT ON RECORD. IT IS SUBMI TTED THAT ON PERUSAL OF THIS PAGE, IT MAY BE SEEN THAT ALL THE T RANSACTIONS AS JOTTED DOWN ON THIS PAGE STAND CROSSED AND THEREFOR E IS NOT A VALID DOCUMENT. AO HAS FAILED TO DISTINGUISH ANY PA RTICULAR ENTRY WITH OTHERS APPEARING ON THE SAME PAGE FOR MAKING T HIS ADDITION. IN ABSENCE OF SUCH EXERCISE, NO VALID ADDITION CAN BE MADE ON THE PICK AND CHOOSE BASIS WITHOUT ASSIGNING ANY COGEN T REASON. 7.5 IT IS FURTHER SUBMITTED THAT THE APPELLANT HU F DID NOT ACQUIRE ANY PROPERTY DURING THE YEAR UNDER CONSIDER ATION. NO EVIDENCE OR ANY MATERIAL IS BROUGHT ON RECORD TO IN DICATE ANY INVESTMENT BY THE HUF IN ANY PROPERTY. IN ABSENCE OF ANY SUCH ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 15 MATERIAL OR EVIDENCE, NO VALID ADDITION CAN BE MADE ON PRESUMPTIONS AND SURMISES. 7.6 HAVING CONSIDERED THE MATERIAL AVAILABLE ON RE CORD, I FIND THAT IT WOULD BE PERTINENT TO EXAMINE THE NATURE OF NOTINGS MADE ON PAGE 3 OF ANNEXURE A6, WHICH IS BEING REPRODUCED FOR THE SAKE OF CONVENIENCE. 7.7 IT MAY BE SEEN FROM THE ABOVE, THAT THE NATURE OF TRANSACTIONS ON THIS PAGE PERTAIN TO FINANCIAL DEAL INGS WHICH CERTAIN PERSONS, WHOSE NAMES HAVE BEEN MENTIONED AG AINST THE AMOUNTS. THE CROSSED FIGURES RE-PRESENT, POSSIBLY T HE AMOUNTS WHICH HAVE BEEN SETTLED BY WAY OF RECEIPT/PAYMENT. IN THE MIDDLE OF THIS PAGE, THERE IS A NOTING TEHU AAA AGAINST WHICH RS. 4,00,000 HAVE BEEN WRITTEN AND WHICH ARE AFTER CROSSING CERT AIN OTHER FINDINGS. THE APPELLANT HAS FAILED TO SUBSTANTIATE THE NATURE OF SUCH PAYMENTS AND THEREFORE IT CAN BE TREATED AS UN EXPLAINED INVESTMENT IN THE PURCHASE OF PROPERTY WHICH HAS NO T BEEN DISCLOSED TO THE DEPARTMENT. HOWEVER, AS REGARDS TH E REMAINING NOTINGS ON THE PAPER ARE CONCERNED, THEY HAVE ALREA DY BEEN CONSIDERED WHILE WORKING OUT THE UNACCOUNTED SUNDRY DEBTORS (OF ANNEXURE A6) IN THE ABOVE MENTIONED GROUNDS OF APPE AL. ACCORDINGLY, I CONFIRM THE ADDITION OF RS. 4,00,000 ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PROPERTY AS AGAINST T HE TOTAL ADDITION OF RS. 7,13,000 ON THIS ACCOUNT. 12. AFTER HEARING BOTH THE SIDES WE FOUND THAT ASSE SSEE WAS NOT ABLE TO EXPLAIN THE INVESTMENTS OF RS. 4,00,000/- IN TEHU WHILE OTHER NOTINGS FIGURES AND IN THE PAPER WERE CONSIDERED WHILE WORK ING OUT ACCOUNT. THE UNACCOUNTED SUNDRY DEBTORS AS PER THE ANNEXURE A-6. 13. AFTER CONSIDERING ALL RELEVANT FACTS, WE FIND T HAT CIT(A) HAS RIGHTLY APPRECIATED THE FACTS ON THE ISSUE. THEREFORE, WE S USTAIN THE ORDER OF CIT(A). ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 16 14. GROUND NO. 4 IN ASSESSEE APPEAL AND GROUND NO. 7 IN THE REVENUE IN APPEAL RELATES TO THE PARTLY SUSTAINING/DELETING THE ADDITION MADE OF RS. 48,700/- ON ACCOUNT OF ALLEGED EXCESS CASH THE CIT(A) THE ISSUE AS UNDER: 9.3 I HAVE PERUSED THE ASSESSMENT ORDER AS WELL AS SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT AN ADDITION OF RS. 48,700 HAS BEEN MADE BY THE AO ON ACCOUNT OF EXCESS CASH FOUND AT THE TIME OF SURVEY. 9.4 THE APPELLANT HAS STATED THAT NO OPPORTUNITY WA S GIVEN TO THE APPELLANT BY THE AO FOR GIVING AN EXPLANATION B EFORE MAKING THE ADDITION ON THIS ISSUE. IT IS SUBMITTED THAT TH E BOOKS OF ACCOUNT WERE NOT COMPLETE AT THE TIME OF SURVEY AND AFTER COMPLETING THE SAME, ACCOUNTS WERE PRODUCED BEFORE THE AO AND NO DEFICIENCIES HAVE BEEN POINTED OUT ON THIS ISSUE . 9.5 CONSIDERING THE MATERIAL AVAILABLE ON RECORD, I FIND THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS AFTER COMPLETI NG THE BOOKS OF ACCOUNTS, IT WAS SUBMITTED BY THE APPELLANT THAT ON THE DATE OF SURVEY CASH OF RS. 88,700 WAS FOUND AND AS PER THE UPDATED BOOKS OF ACCOUNTS THE CASH BALANCE WORKS OUT TO RS. 87,824. THE APPELLANT HAS NOT BEEN ABLE TO GIVE AN EXPLANATION ON THIS AND I HOLD THAT THE EXCESS CASH AVAILABLE ON THE DATE OF SURVEY WORKS OUT TO RS. 876 ONLY AND ALSO THE AO COULD NOT BRING ON RECORD ANY MATERIAL TO JUSTIFY THE ADDITION MADE. ACCORDINGLY, I CONFIRM THE ADDITION OF RS. 876 OUT OF THE TOTAL ADDITION OF RS . 48,700 MADE BY THE AO ON THIS ACCOUNT. 15. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. SINCE BO TH SIDES ARE NOT ABLE TO CONTROVERT THE FINDING RECORDED BY CIT(A) WITH R ESPECT TO CASH BALANCE AVAILABLE WITH ASSESSEES ON THE DAY OF SUR VEY, THEREFORE, WE ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 17 SUSTAIN THE FINDINGS RECORDED BY CIT(A). IN THE RES ULT GROUND NO. 7 OF THE REVENUE GROUND NO. 4 OF THIS APPEAL STAND DISMI SSED. 16. GROUND NO. 6 IN THE REVENUE IN APPEAL IS AGAINS T THE DELETE THE ADDITION OF RS. 1,00,000/- ON ACCOUNT OF UNEXPLAINE D INVESTMENT IN THE LOTTERY THE CIT(A) HAS HELD. THIS ISSUE HAS BEEN CO NSIDERED BY CIT(A) IN HIS ORDER AT PARA 8.1 TO 8.5 WHICH READ AS UNDER: 8.2 THE AR OF THE APPELLANT HAS CONTENDED AS UNDER :- THIS ADDITION HAS BEEN DISCUSSED IN PARAS 9.1 TO 9. 4 AT PAGE NO. 12 & 13 OF THE ASSESSMENT ORDER. FOR MAKING THI S ADDITION ALSO, THE LEARNED AO HAD REFERRED TO ANNEXURE A9 AN D THE STATEMENT OF SHRI DEEPAK GARG WITHOUT CONFRONTING T HE APPELLANT ON THE POINT AND PROCEEDED TO MAKE THE ADDITION STR AIGHT AWAY WITHOUT ALLOWING ANY OPPORTUNITY TO THE APPELLANT. THIS FACT IS EVIDENT FROM THE BODY OF THE ASSESSMENT ORDER AND F ROM THE ASSESSMENT PROCEEDINGS AS WELL. IN ABSENCE OF PROPE R OPPORTUNITY, NO VALID ADDITION CAN BE MADE AS DISCUSSED AT LENGT H IN GROUND NO. 2(III) ABOVE. THUS THE ADDITION SO MADE DESERVE S TO BE DELETED SUMMARILY ON THIS GROUND ALONE. FURTHER, WHILE MAKING THIS ADDITION, THE LEARNED AO HAD ALSO OVER-LOOKED THE FACT THAT THE SO-CALLED INVESTMENT IN CHIT FUND (LOTTERY) STOOD DECLARED BY SHRI DEEPAK GARG IN HIS OWN INDIVIDUAL CASE IN THE RE-ASSESSMENT PROCEEDINGS INITIATED U/S 148 OF THE ACT. THE COPY OF THE COMPUTATION SHEETS AND BALANCE SHEE TS ETC. FOR THE RELEVANT YEARS ARE SUBMITTED HEREWITH FOR YOUR KIND PERUSAL AND RECORD. ON PERUSAL OF THESE DOCUMENTS, IT WOULD BE SEEN THAT SUCH INVESTMENT STOOD DULY SHOWN BY SHRI DEEPAK GAR G IN HIS CASE. AS SUCH NO ADDITION IS CALLED FOR ON THIS ACC OUNT IN THE CASE OF THE APPELLANT HUF FURTHER, WHILE MAKING SUCH ADDITION, NO CHARGING SE CTION HAS BEEN INVOKED. IN ABSENCE OF MENTIONING OF ANY C HARGING SECTION OF THE LAW, NO VALID ADDITION CAN BE MADE. THUS LEGALLY ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 18 ALSO, THE ADDITION SO MADE IS BAD IN LAW AND DESERV ES TO BE DELETED ON SUCH LEGAL FICTION AS WELL. 8.3 I HAVE PERUSED THE ASSESSMENT ORDER AS WELL AS SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT AN ADDITION OF RS. 1,00,000 HAS BEEN MADE BY THE AO ACCOUNT OF UNEXPLAINED INCO ME EARNED FROM THE INVESTMENT MADE IN CHIT-FUNDS. THE ADDITIO N WAS MADE ON THE BASIS OF PAPERS FOUND IN ANNEXURE A9 AND STA TEMENT RECORDED IN THE COURSE OF SURVEY. 8.4 THE APPELLANT HAS STATED THAT NO OPPORTUNITY WA S GIVEN BY THE AO TO THE APPELLANT FOR GIVING AN EXPLANATION O N THIS ISSUE BEFORE MAKING THE ADDITION. IT IS SUBMITTED THAT TH E ADDITIONAL INCOME ON THIS GROUND HAS ALREADY BEEN DECLARED IN THE INDIVIDUAL INCOME TAX RETURN OF SH. DEEPAK GARG AND COPIES OF THE ITRS FILED BY HIM ALONGWITH COMPUTATION OF INCOME, CASH FLOW S TATEMENT, INCOME AND EXPENDITURE ACCOUNT AND BALANCE SHEET FO R THE RELEVANT YEARS HAS BEEN FILED. 8.5 CONSIDERING THE SUBMISSIONS MADE AND MATERIAL A VAILABLE ON RECORD, I FIND THAT THE AMOUNT OF INCOME FROM CHITS AND INVESTMENT MADE STANDS DECLARED IN THE HANDS OF SH. DEEPAK GARG IN HIS PERSONAL CAPACITY AND THEREFORE DO NOT FIND ANY JUSTIFICATION IN MAKING THE ADDITION ON THIS GROUND. ACCORDINGLY, I DELETE THE ADDITION OF RS. 1,00,000 MADE BY THE AO ON THIS ACC OUNT. 17. AFTER HEARING BOTH THE SIDES WE HOLD THAT THIS INVESTMENTS HAS MADE BY SHRI DEEPAK GARG AND HAS BEEN DISCLOSED IN HIS PERSONAL INVESTMENT. THEREFORE, CIT(A) HAS RIGHTLY DELETED T HIS ADDITION. THEREFORE, WE FIND NO MERIT IN THIS GROUND OF REVEN UES APPEAL. 18. GROUND NO.5 OF THE ASSESSEES APPEAL IS GENERAL IN NATURE AND HENCE, REQUIRES NO SPECIFIC ADJUDICATION. ITA 42/JP/2015 & ITA 70/JP/2015_ MD. GARG & SONS, HUF, ALWAR VS. ASSTT. COMMISSIONER OF IT, ALWAR 19 19. GROUND NO. 1 AND 2 OF THE REVENUES APPEAL ARE GENERAL IN NATURE AND ALSO NOT PRESSED AT THE TIME OF HEARING. THEREF ORE THE SAME ARE DISMISSED. IN THE RESULT APPEAL OF BOTH SIDES ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/09/2017. SD/- SD/- DQY HKKJR HKKXP AN (KUL BHARAT) (BHAGCHAND) U;KF;D LNL;@ U;KF;D LNL;@ U;KF;D LNL;@ U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 20/09/2017 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M.D. GARG & SONS, HUF, ALWAR 2. IZR;FKHZ@ THE RESPONDENT- ASSTT. COMMISSIONER OF IT, CIRCLE-2 , ALWAR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 42/JP/2015 & 70/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR