NANDKISHOR GOKULPRASAD HARSH, Nagpur V. ITO WAD 4(2), Nagpur

ITA 47/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1554 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Business income; Opportunity of being heard; Diversion of income; Cost of acquisition

Judgement Text

1 ITA NOS.47&48/NAG/2014 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NOS. 47 & 48/NAG/2014 ASSESSMENT YEARS : 2008 - 09 & 2009 - 10. NANDKISHOR GOKUL PRASAD HARSH, THE INCOME - TAX OFFICER, NAGPUR. VS. WARD - 4(2), NAGPUR. PAN AAIPH9012M APPELLANT. RESPONDENT. APPELLANT BY : SHRI SANDEEP JAIN. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 0 3 - 1 1 - 2015. DATE OF PRONOUNCEMENT : 18 TH DEC., 2015. O R D E R PER SHRI SHAMIN YAHYA, A.M . THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF LEARNED CIT(APPEALS) - I, NAGPUR DATED 29 - 11 - 2013 FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 RESPECTIVELY. SINCE THE ISSUES ARE CONNECTED AND APPEALS WERE HEARD TOGETHER, THESE HAVE BEEN CONSOLIDATED AND DISPOSED OF TOGETHER. 2. ITA NO.47/NAG/201 4 : THE GROUNDS OF APPEAL READ AS UNDER: 1 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT ( A ) ERRED BY CONFIRMING THE REOPENING OF THE CASE UNDER SECTION147 O F THE INCOME - TAX ACT, 1961 (THE ' ACT') BY THE ASSESSING OFFICER, HAVING FAILED TO APPRECIATE THAT INFORMATION IN POSSESSION OF ASSESSING OFFICER WAS NOT SUFFICIENT TO FORM A BELIEF THAT THERE WAS INCOME WHICH HAS ESCAPED ASSESSMENT . 2 ITA NOS.47&48/NAG/2014 2. WITHOUT PREJUDICE TO ABOVE GROUND NO - I , ON THE FA CTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LEARNED CIT (A) ERRED AND WAS NOT J UST I F I ED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER, THAT SALE CONSIDERATION, AS DETERMINED BY AO RS 1,38,79,367/= IS TOWARDS SALE OF LAND ONLY WITHOUT APPRECIATING T HE FACT THAT PROPORTIONATE SALE CONSIDERATION IS TOWARDS LAND AND MULTI STORED BUILDING TAKEN TOGETHER . 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT ( A ) ERRED BY CONFIRMING THE ORDER OF THE ASSESSING OFFICER, WHEREAS INCOME FROM PROPORTIONATE SALE CONSIDERATION WAS CONSIDERED CHARGEABLE AS CAPITAL GAIN BUT IN FACT IT IS BUSINESS INCOME/LOSS. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LEARNED CIT ( A ) ERRED BY NOT ALLOWING DEDUCTION ON ACCOUNT OF COST OF CONSTRUCTION AND EXPENSES RELATED TO CONSTRUCTION OF MULTISTORIED BUILDING I N THE LAND OF APPELLANT FROM PROPORTIONATE SALE CONSIDERATION OF RS 1 , 38,79,367/= . 5. IN THE ALTERNATE AND WITHOUT PREJUDICE TO ABOVE GROUND NO 2 , 3 AND 4 , ON THE FACTS AND CIRCUMSTANCES OF THE CASE PROPORTIONATE SALE CONSIDERATION MAY BE BIFURCATED UNDER HEAD CAPITAL GAIN AND BUSINESS INCOME / LOSS AND TOTAL INCOME CAN BE CALCULATED ACCORDINGLY . 6. IN THE SECOND ALTERNATE AND WITHO UT PREJUDICE TO ABOVE GROUND NO 2 , 3 , 4 AND 5 , ON THE FACTS AND C I RCUMSTANCES OF THE CASE TOTAL CONSIDERAT I ON MA Y BE CALCULATED BY SUITABLE METHOD , ATTRIBUTABLE TO LAND OF APPLICANT AND INCOME MAY BE COMPUTED ACCORDINGLY . 7. THAT THE ORDER OF THE LEARNED CIT (A ) IS CONTRARY TO THE FACTS OF THE CASE AND THE LAW APPLICABLE THERETO , AND THE SAME NEEDS TO BE MODIFIED SUITABLY . 3. AT THE OUTSET THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT HE SHALL NOT BE PRESSING GROUND NO. 1 WHICH IS WITH RESPECT TO REOP ENING. ACCORDINGLY THIS GROUND IS DISMISSED AS NOT PRESSED. 4. THE OTHER ISSUE RAISED PERTAINS TO THE TREATMENT OF A SUM OF RS.1,38,79,367/ - AS SALE CONSIDERATION RECEIVED AT THE HANDS OF THE ASSESSEE. THE AO IN THIS CASE NOTED THAT THE ASSESSEE JOINTLY WITH HIS BROTHER SHRI NAVAL G. HARSH HAS SOLD AN IMMOVABLE PROPERTY FOR RS.3,50,00,000/ - . THE AO PROPOSED TO ADD THE PROPORTIONATE SHARE OF THE ASSESSEE AS SALE CONSIDERATION IN THE HANDS OF THE ASSESSEE. THE ASSESSEE IN THIS REGARD SUBMITTED THAT THE ASSE SSEE SHOULD BE 3 ITA NOS.47&48/NAG/2014 GRANTED RELIEF ON ACCOUNT OF EXPENSES INCURRED FOR DEMOLITION OF OLD STRUCTURE ON WHICH THE NEW BUILDING WAS CONSTRUCTED. THE ASSESSEE FURTHER CONTENDED THAT HOUSING LOAN WAS OBTAINED FROM SAMTA SAHAKARI BANK LTD. FOR THE CONSTRUCTION OF TH E BUILDING. THEREFORE THE INDEX COST ATTRIBUTABLE TO SUCH LOAN OBTAINED FOR CONSTRUCTION OF BUILDING SHOULD BE ALLOWED AS COST OF ACQUISITION. IN THIS REGARD THE AO NOTED THAT THE LOAN WAS TAKEN IN THE NAME OF BROTHER OF THE ASSESSEE AND THE ASSESSEE HAS GIVEN POWER OF ATTORNEY IN FAVOUR OF HIS BROTHER FOR DEVELOPMENT AND SALE OF THE PROPERTY. THE AO FURTHER NOTED THAT THE ASSESSEE HAS FAILED TO FURNISH DETAIL OF CONSTRUCTION OF PROPERTY. IN THESE CIRCUMSTANCES THE AO DENIED THE ASSESSEES CLAIM AND PROCE EDED WITH THE COMPUTATION BY GIVING THE ASSESSEE DEDUCTION ONLY ON ACCOUNT OF THE AMOUNT PAID FOR PURCHASE OF LAND. 5. UPON ASSESSEES APPEAL LEARNED CIT(APPEALS) CONFIRMED THE ADDITION HOLDING AS UNDER : 7.0 I HAVE CAREFULLY CONSIDERED THE ORAL AND WRI TTEN SUBMISSIONS AND JUDICIAL DECISIONS RELIED UPON BY THE APPELLANT. IT IS UNDISPUTED THAT THE APPELLANT IS THE SOLE OWNER OF THE PLOT ADMEASURING AREA 209.17 SQ. MTRS. EQUIVALENT TO 2250 SQ. FT. OUT OF THE TOTAL AREA OF 5675 SQ. FT. WHICH BUILDING WAS CO NSTRUCTED. IT IS ALSO UNDISPUTED THAT THE APPELLANT HAD ISSUED A POWER OF ATTORNEY IN FAVOUR OF HIS BROTHER FOR DEVELOPMENT AND CONSTRUCTION OF A MULTI - STOREYED BUILDING. IT IS ALSO AN ADMITTED FACT THAT THE BROTHER OF THE APPELLANT HAD TAKEN A LOAN OF RS. 6.50 CRORES FOR CONSTRUCTION OF THE SAID PROPERTY FROM THE SAMTA SAHKARI BANK LTD. THE APPELLANT HAS NOT DISPUTED THE CHARGING OF CAPITAL GAINS BEFORE THE AO. HOWEVER, IN THE COURSE OF APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT IN HIS WRITTEN SUBMISS ION HAS CONTENDED THAT THE PROPERTY BEING A MULTI - STOREYED BUILDING CONSTRUCTED JOINTLY BY THE APPELLANT, WITH HIS BROTHER WAS SOLD ON 15.03.2008, THEREFORE ONLY THE UN DIVIDED SHARE IN THE LAND ON WHICH CONSTRUCTION IS DONE IS LIABLE TO BE TAXED IN THE HANDS OF THE APPELLANT AS LTCG FOR THE REASON THAT THE FUNDS IN THE CONSTRUCTION OF THE BUILDING, BEING LOAN FROM BANK, WERE TAKEN IN THE NAME OF THE APPELLANTS BROTHER SHRI NAVAL G. HARSH WHICH WERE UTILISED FOR THE CONSTRUCTION OF THE SAID PROPERTY. THE APPELLANT, THUS, IN HIS WRITTEN SUBMISSIONS HAS SUBMITTED THAT CONSTRUCTION COST BEING 39.65% OF LOAN AMOUNT WHICH 4 ITA NOS.47&48/NAG/2014 COMES TO RS.257.72 LAKHS SHOULD BE DEDUCTED AS COST OF ACQUISITION/CONSTRUCTION IN ADDITION TO THE PURCHASE COST OF RS.13.13 LAKHS, RESULTIN G INTO LOSS OF RS.132.06 LAKHS. 7.1 THE ABOVE SUBMISSIONS MADE BY THE APPELLANT IS NOT ONLY AMBIG U OUS BUT ALSO SUFFERS FROM INHERENT CONTRADICTION OF HIS OWN VERSION IN AS MUCH AS FIRSTLY, THAT ON THE ONE HAND THE AR CONTENDS THAT ONLY THE UNDIVIDED SHARE IN LAND SHOULD BE TAXED IN THE HANDS OF THE APPELLANT AQS LONG TERM CAPITAL GAINS, WHEREAS SIMULTANEOUSLY, THE APPELLANT CONTENDS THAT THE TWO PLOTS OF LANDS OWNED BY BOTH THE BROTHERS WERE JOINTLY DEVELOPED. SECONDLY THAT ON THE ONE HAND THE APPELLANT CO NTENDS THAT THE BORROWED FUNDS SINCE ARE IN THE SOLE NAME OF THE BROTHER OF THE APPELLANT, THEREFORE, THE APPELLANT HAS NOT INVESTED IN THE CONSTRUCTION OF BUILDING, WHEREAS ON THE OTHER HAND, THE AR OF THE APPELLANT HAD MADE THE CLAIM FOR C OST OF CONSTRU CTION OF BUILDING AND THE INTEREST COMPONENT PAID AGAINST LOAN AS COST OF ACQUISITION TO BE ALLOWED WHILE COMPUTING THE CAPITAL GAINS, WHICH ACCORDING TO THE APPELLANT RESULS INTO LOSS, LEAVING THEREBY NO CHARGEABLE CAPITAL GAINS. 7.2 IT IS QUITE MANIFEST FROM THE CONTENTIONS OF THE APPELLANT THAT THE APPELLANT HAS GROSSLY FAILED TO SUBSTANTIATE HIS CLAIM FOR COST OF ACQUISITION AS WELL AS FOR COST OF CONSTRUCTION. THE APPELLANT HAS NOT FILED ANY DETAILS AS REGARDS TO THE C OST OF CONSTRUCTION OF THE PROPE RTY JOINTLY CONSTRUCTED, BY THE APPELLANT, WITH HIS BROTHER. ACCORDING TO APPELLANTS OWN VE R SION, THE COST OF PROPERTY CONSTRUCTED HAS BEEN MET OUT WITH THE FUNDS BORROWED BY THE BROTHER OF THE APPELLANT IN HIS NAME. ONCE THE FUNDS ARE BORROWED, IN THE NA ME OF THE BROTHER OF THE APPELLANT, THE SAME CANNOT BE ALLOWED AS DEDUCTION AGAINST THE INCOME OF THE APPELLANT. THE APPELLANT OWNS THE PLOT NO. 1107 IN HIS NAME AND SINCE THE APPELLANT HAS FAILED TO PROVIDE THE DE T AILS OF CONSTRUCTION OF PROPERTY, THEREFO RE, THE QUESTION OF TAXING ONLY THE UNDIVIDED SHARE OF LAND IN THE PROPERTY DOES NOT ARISE, MORE PARTICULARLY, WHEN THE APPELLANT HAS SUBMITTED AND ISSUED A POWER OF ATTORNEY IN FAVOUR OF HIS BROTHER TO DEVELOP THE PLOT OF LAND JOINTLY TO CONSTRUCT A MULTI - STORIED BUILDING. THE APPELLANT HAS, THUS, FAILED TO BRING OUT A CASE TO CLAIM THE COST OF CONSTRUCTION AND INTEREST AS DEDUCTION BEING COST OF ACQUISITION, BOTH BEFORE THE AO AND DURING THE APPELLATE PROCEEDINGS. THE APPELLANT HAS ALSO NOT PROVIDED THE COPY OF POWER OF ATTORNEY ISSUED BY APPELLANT IN FAVOUR OF HIS BROTHER. UNDER THE CIRCUMSTANCES, THE AO IS JUSTIFIED IN CHARGING THE LTCG ON THE SALE VALUE OF PROPERTY IN PROPORTION TO THE SHARE OF LAND OWED BY THE APPELLANT. I, THEREFORE, DECLINE TO INTE RFERE WITH THE ORDER OF THE AO. THUS, THE GROUND IS DISMISSED. 5 ITA NOS.47&48/NAG/2014 6. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. AT THE OUTSET LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE SAID BUILDING AND PLOT WAS SOLD BY THE BANK AND THE PROCEEDS WERE ADJUSTED AGAINST THE LOAN TAKEN BY THE BROTHER. HE SUBMITTED THAT NO AMOUNT WHATSOEVER WAS RECEIVED BY THE ASSESSEE. LEARNED COUNSEL SUBMITTED THAT THE ASSESSEE HAS GIVEN A POWER OF ATTORNEY FOR HIS LAND TO HIS BROTHER. THE BROTHER HAD TAKEN LOAN FROM THE BANK AND CONSTRUCTED THE BUILDING THEREON. DUE TO THE INABILITY TO PAY ALL THE LOAN, THE BANK HAD SOLD THE PROPERTY AND ADJUSTED THE PROCEEDS TOWARDS THE SAID LOAN. IN THESE CIRCUMSTANCES LEARN ED COUNSEL OF THE ASSESSEE SUBMITTED THAT THERE WAS DIVERSION OF INCOME AT SOURCE AND THE ASSESSEE HAD NOT RECEIVED ANY AMOUNT WHATSOEVER. HENCE LEARNED COUNSEL PLEADED THAT NO AMOUNT OF TAX SHOULD BE LEVIED ON THE ASSESSEE. FURTHER MORE IN THE ALTERNATIVE LEARNED COUNSEL SUBMITTED THAT IT IS UNDENIABLE THAT THE BUILDING WAS CONSTRUCTED ON THE SAID LAND AND THE SAME WAS SOLD BY THE BANK ALSO. HE FURTHER SUBMITTED THAT THE EXPENDITURE WERE INCURRED IN THE CONSTRUCTION OF THE BUILDING AND INTEREST EXPENSE W AS INCURRED FOR THE LOAN TAKEN. LEARNED COUNSEL SUBMITTED THAT REQUISITE CREDITS FOR THESE EXPENDITURE SHOULD BE GIVEN IN COMPUTING THE GAIN IF ANY. HOWEVER, LEARNED COUNSEL SUBMITTED THAT THE LOAN WAS TAKEN AND EXPENDITURE WAS INCURRED BY THE ASSESSEES B ROTHER. HENCE HE SUBMITTED THAT THE ASSESSEE WAS NOT IN A POSITION TO SUBMIT THE NECESSARY EVIDENCES. 8. PER CONTRA LEARNED D.R. RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 9. ON CAREFUL CONSIDERATION WE FIND THAT IT IS THE CLAIM OF THE ASSESSEE THAT TH E ASSESSEE HAS NOT RECEIVED ANY AMOUNT WHATSOEVER OUT OF THE SALE. THE ASSESSEE HAD GIVEN A POWER OF ATTORNEY TO HIS BROTHER. THE BROTHER HAD TAKEN LOAN FROM THE BANK AND CONSTRUCTED A BUILDING. FOR THE FAILURE TO REPAY THE LOAN, THE BANK HAS TAKEN OVER TH E PROPERTY AND SOLD THE SAME AND A D JUSTED THE SALE 6 ITA NOS.47&48/NAG/2014 PROCEEDS TOWARDS THE LOAN AMOUNT. THOUGH THE ABOVE FACTUAL BACKGROUND IS NOT FULLY EMANAT ING FROM THE ORDERS OF THE AUTHORITIES BELOW BUT IN OUR CONSIDERED OPINION, THE INTEREST OF JUSTICE MANDATES THAT TH IS PLEA OF THE LEARNED COUNSEL OF THE ASSESSEE WHICH GOES TO THE ROOT OF THE MATTER SHOULD BE EXAMINED. THE DOCUMENTS WHICH HAVE BEEN SUBMITTED BY THE ASSESSEE IN THIS CONNECTION HA S NOT BEEN DISPUTED BY THE REVENUE. SO IT CANNOT BE SAID THAT THIS SUBMIS SION OF THE LEARNED COUNSEL OF THE ASSESSEE IS DEVOID OF ANY COGENCY. HOWEVER, IN OUR CONSIDERED OPINION THE SAME WOULD NEED FURTHER VERIFICATION AT THE LEVEL OF THE AO. WE FURTHER FIND THAT CONCEPT OF DIVERSION OF OVERRIDING TITLE HAS BEEN ACCEPTED AND IS RECOGNIZED IN TAX LAWS. IN THIS REGARD THE HONBLE APEX COURT DECISION IN THE CASE OF CIT VS. SI T ALDAS TIRATHDAS 41 ITR 367, CIT VS. TOLLYGUNGE CLUB LTD. 107 ITR 776 AND CIT VS. BIJ LI COTTON MILLS (P) LTD. 116 ITR 60 ARE RELEVANT. FURTHERMORE WHAT WAS THE TREATMENT G IVEN TO BROTHERS ASSESSMENT, WHO WAS A CO - OWER HAS ALSO TO BE CONSIDERED. NO EXPLANATION IN THIS REGARD IS ON RECORD. 10. IN THE LIGHT OF ABOVE DISCUSSION, WE REMIT THIS ISSUE TO THE FILE OF TH E AO. THE AO SHALL EXAMINE THIS ISSUE AFRESH KEEPING IN MIND OUR OBSERVATIONS AS ABOVE. NEEDLESS TO ADD THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. 11. ITA NO. 48/NAG/2014 . THE GROUNDS OF APPEAL READ AS UNDER : 1. ON THE FACTS AND CIR CUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.20 LACS, EVEN THOUGH IT WAS MADE AS PROTECTIVE ADDITION, WITHOUT APPRECIATING THE FACT OF THE CASE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED BY CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER OF RS. 4 LACS, WITHOUT APPRECIATING THE FACT OF THE CASE. 7 ITA NOS.47&48/NAG/2014 3. THAT THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO THE FACTS OF THE CASE AND THE LAW APPLICABLE THERETO, AND THE SAME NEEDS TO BE MODIFIED SUITABLY. 12. APROPOS THE ADDITION OF RS.20 LACS AS PROTECTIVE ADDITION. ON THIS ISSUE AO FOUND THAT RS.10 LACS EACH WAS DEPOSITED IN ASSESSEES BANK ACCOUNT ON 06 - 05 - 2008 AND 07 - 05 - 2008 AGGREGATING TO RS.20,00,000/ - . UPON ENQUIRY THE ASSESSEE STATED THAT THESE AMOUNTS WERE DEPOSITED IN HIS BANK ACCOUNT BY SHRI PRADEEP K. PALANDURKAR AND SHRI KRISHNA B. KHANORKAR. THAT THESE TWO PERSONS APPROACHED HIM WITH REQUEST THAT THEY REQUIRED CHEQUES FOR THE PURPO SE OF THEIR BUSINESS. SO THEY DEPOSITED THE CASH INTO ASSESSEES ACCOUNT AND THE ASSESSEE ISSUED CHEQUES TO THEM. UPON ENQUIRY THE AO FOUND THAT THE SAID TWO CHEQUES OF RS.10 LAKHS EACH WERE DEPOSITED IN THE BANK ACCOUNTS OF THOSE TWO PERSONS. THE AO ISS UED SUMMONS TO THOSE PERSONS BUT THEY DID NOT COMPLY. THE AO PROCEEDED TO ADD RS.20 LAKHS IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS. 13. BEFORE THE LEARNED CIT(APPEALS), THE ASSESSEE SUBMITTED THAT IT WAS ASSESSEES OWN FUNDS AND THE ABOVE TWO PE R SO NS WERE FAMILY FRIENDS. THEY REQUIRED LOANS. THAT THE ASSESSEE IS A SMALL TRADER AND FILING INCOME - TAX RETURN U/S 44AF. THAT HE IS NOT REQUIRED TO MAINTAIN ANY BOOKS OF ACCOUNTS AND USED HIS OWN MONEY TO ADVANCE LOANS TO THESE PERSONS. LEARNED CIT(APPEALS) FOUND THESE EXPLANATIONS UNCONVINCING. HE HELD THAT DEHORSE ANY EVIDENCE THESE STATEMENTS CANNOT BE RELIED UPON. HE FURTHER HELD THAT WITHOUT MAKING ASSESSMENTS OF THE AMOUNT INVOLVED IN THE HANDS OF THE PERSONS WHO RECEIVED THE CHEQUES , THE AO HAS BEEN W RONG IN MAKING THE PROTECTIVE ASSESSMENT IN THE HANDS OF THE ASSESSEE. HE HELD THAT THE ASSESSMENT SHOULD BE MADE IN THE HANDS OF HE ASSESSEE ON SUBSTANTIVE BASIS. 14. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEAL BEFORE US. 8 ITA NOS.47&48/NAG/2014 15. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT DEPOSIT OF THE CHEQUES IN THE ACCOUNTS OF THE TWO RECIPIENTS HAS BEEN VERIFIED BY THE AO. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, IT WAS INCUMBENT UPON THE AO TO FIND ABOUT THE FATE OF ASSESSMENT O F THESE AMOUNTS IN THE HANDS OF THOSE TWO RECIPIENTS. FURTHER MORE LEARNED CIT(APPEALS) HAS CONVERTED THE PROTECTIVE ASSESSMENT INTO SUBSTANTIVE ASSESSMENT , IT DOES NOT MANIFEST FROM THE CIT(APPEALS) ORDER THAT THE ASSESSEE HAS BEEN GIVEN ADEQUATE OPPORTUN ITY IN THIS REGARD. HENCE IN OUR CONSIDERED OPINION, INTEREST OF JUSTICE MANDATES THAT THE ISSUE BE REMITTED TO THE FILE OF THE AO. THE AO IS DIRECTED TO EXAMINE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. THE AO SHALL ALSO TAKE INTO ACCOUNT OUR OBSERVATIONS ABOVE. 16. APROPOS THE ADDITION OF RS,4 LACS. ON THIS ISSUE THE AO FOUND THAT CASH OF RS.4 LACS HAS BEEN DEPOSITED ON 03 - 05 - 2008 IN ASSESSEES BANK ACCOUNT. THE ASSESSEE EXPLAINED THAT THIS WAS HIS BUSINESS RECEIPT. HOWEVER, THE AO NOTED THAT IN EARLIER S UBMISSION THE ASSESSEE EXPLAINED THE SAME AS RETURN OF CAPITAL INVESTMENT. THE AO CALLED FOR THE DETAIL OF CAPITAL INVESTMENT WHICH THE ASSESSEE COULD NOT PRODUCE. HENCE THE AO MADE AN ADDITION OF RS.4,00,000/ - . 17. BEFORE THE LEARNED CIT(APPEALS) , ASSES SEE SUBMITTED THAT THE CASH DEPOSIT IN SAMTA SAHAKARI BANK IS OUT OF PAST SAVINGS AND BUSINESS RECEIPTS. THAT T HE ASSESSEE IS A SMALL TRADER. IT DOES NOT MAINTAIN ANY BOOKS OF ACCOUNTS AND HAS BEEN FILING RETURN U/S 44AF OF THE I.T. ACT. LEARNED CIT(APPEAL S) FOUND THE EXPLANATION OF THE ASSESSEE CONTRADICTORY AND SHIFTING. HE HELD THAT THE ASSESSEE HAS NOT BROUGHT OUT A CASE OF ACCUMULATIVE PAST SAVINGS TO THE TUNE OF RS.4 LAKHS DEPOSITED ON 03 - 05 - 2008 ON LUMPSUM. THAT THE ASSESSEE IS REQUIRED TO EXPLAIN THE AVAILABILITY OF CASH WITH REFERENCE TO THE RETURN OF INCOME FILED AS ON 31 - 03 - 2008 AS THE DEPOSIT IS MADE IMMEDIATELY AFTER THE END OF THE FINANCIAL 9 ITA NOS.47&48/NAG/2014 YEAR WHICH THE ASSESSEE FAILED TO DO SO. HENCE LEARNED CIT(APPEALS) CONFIRMED THE ADDITION. 18. AGAINS T THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE US. 19. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT IN THIS CASE ALSO THE ASSESSEES SUBMISSION THAT THE DEPOSIT WAS OUT OF HIS SAVINGS AND BUSINESS RECEIPTS HAS BEEN REJECTED BY THE AUTHORITIES BELOW. WE FIND THAT THE REASONING ADOPTED IS THAT THE ASSESSEE HAS CHANGED HIS EXPLANATION AND HAS NOT FURNISHED NECESSARY DETAILS. IN OUR CONSIDERED OPINION, AS WE HAVE ALREADY REMITTED THE EARLIER ISSUE IN THIS APPEAL, THIS ISSUE ALSO DE SERVES TO BE REMITTED TO THE FILE OF THE AO IN THE INTEREST OF JUSTICE. THE AO IS DIRECTED TO EXAMINE THE ISSUE AFRESH AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. 20. IN THE RESULT, THIS APPEAL BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 21. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF DEC., 2015. SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 18 TH DEC., 2015. 10 ITA NOS.47&48/NAG/2014 COPY FORWARDED TO : 1. SHRI NANDKISHOR GOKULPRASAD HARSH, A - 3, DEV KRUPA APT., WADHAMAN NAGAR, 2. I.T.O., WARD - 4 ( 2 ), NAGPUR. 3. C.I.T. , NAGPUR. . 4. CIT(APPEALS) - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, NAGPUR WAKODE.