Shri B. Munireddy, Mulbagal V. ITO, Kolar

ITA 474/BANG/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0612 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 01-10-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 15-05-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZIMIK VASHAI
• Assessee Lawyers: DINESH
• Keywords: Unexplained cash credit
• Section: 208; 68

Judgement Text

PAGE 1 OF 13 ITA NO.474/BANG/2009 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A' BEFORE SHRI K P T THANGAL, VICE PRESIDENT AND SHRI N L KALRA, A.M. ITA NO.474/BANG/09 (ASST. YEAR 2004-05) SHRI B MUNIREDDY, KAGGINAHALLI, MULBAGAL. - APPELLANT VS THE INCOME TAX OFFICER, WARD-1, KOLAR. - RESPONDENT APPELLANT BY : SHRI DINESH RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI O R D E R PER N L KALRA : THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDE R OF LEARNED CIT(A)-II, BANGALORE DATED 5TH MARCH, 20 09. 2. THE FIRST GRIEVANCE OF THE APPELLANT IS THAT TH E LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.4 LAKHS IN RESPECT OF CREDITS WITHOUT APPRECIATING TH E FACT THAT THE ASSESSEE HAS DISCHARGED THE PRIMARY ONUS BY FILIN G CONFIRMATION LETTERS. 2.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSING OFFICER NOTICED FROM THE STATEMENT OF AFF AIRS THAT PAGE 2 OF 13 ITA NO.474/BANG/2009 2 THE ASSESSEE HAS SHOWN LOANS OUTSTANDING. THE ASSE SSEE WAS ASKED TO SUBSTANTIATE THESE LOANS. IN RESPONSE TO THIS, THE ASSESSEE FILED CONFIRMATION LETTERS. PERUSAL OF TH ESE CONFIRMATION LETTERS REVEALED THAT CERTAIN PARTICUL ARS SUCH AS REASONS FOR TRANSACTION, MODE OF ADVANCE, DATE OF A DVANCE ETC. ARE NOT AVAILABLE IN THE CONFIRMATION LETTERS. ACC ORDINGLY, THE ASSESSEE WAS REQUESTED TO PRODUCE THESE CREDITORS F OR EXAMINATION OF THEIR CREDITWORTHINESS AND THE VERAC ITY OF THE TRANSACTIONS. IN RESPONSE TO THAT, THE ASSESSEE FI LED A LETTER DATED 22ND AUGUST, 2006 VIDE WHICH, THE ASSESSEE OF FERED THE AMOUNT OF RS.4 LAKHS FOR TAXATION. ACCORDINGLY, THE AMOUNT WAS ADDED. 2.2 BEFORE THE LEARNED CIT(A), THE ASSESSEE FILED THE WRITTEN SUBMISSIONS. IT IS MENTIONED IN THE WRITTE N SUBMISSIONS THAT THE ASSESSING OFFICER WANTED TO KNOW THE SOURC E OF SOURCE FOR WHICH SOME TIME WAS SOUGHT. HOWEVER, WI THOUT GRANTING TIME, THE ASSESSING OFFICER USED UNDUE INF LUENCE OVER THE ASSESSEE TO SIGN A LETTER, WHICH WAS DICTATED B Y THE ASSESSING OFFICER AND THE LETTER DATED 28TH AUGUST, 2006 CAME ON THE FILE OF THE ASSESSING OFFICER. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT THE APPELLANT IS IN A POSITION TO DEMONSTRATE THE GENUINENESS OF THE CREDITORS WITH R ELEVANT DETAILS. THE ASSESSING OFFICER HAS NOT POINTED OUT ANYTHING BUT HAS RELIED ONLY ON THE LETTER WHICH WAS SIGNED B Y THE ASSESSEE UNDER PRESSURE. THE ASSESSEE SUBMITTED TH AT HE HAS PAGE 3 OF 13 ITA NO.474/BANG/2009 3 NOT VOLUNTARILY WRITTEN ANY SUCH LETTER BEFORE THE AS SESSING OFFICER NOR DID AO HAS ANYTHING ESPECIALLY WHEN THE A SSESSEE SHOWED THE GENUINENESS OF THE CREDITORS. THE LEARN ED CIT(A) OBSERVED THAT MERE FURNISHING OF CONFIRMATION CANNO T PROVE THE GENUINENESS OF THE LOANS. THE LEARNED CIT(A) REFER RED TO THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT V PRECISION FINANCE PVT. LTD. 208 ITR 465 IN WHICH IT WAS HELD THAT MERE FURNISHING OF THE PARTICULARS IS NOT ENOU GH. THE LEARNED CIT(A) RELIED ON THE FOLLOWING DECISIONS IN SUPPORT OF THE PROPOSITION THAT MERE FILING OF CONFIRMATION LE TTERS IS NOT SUFFICIENT TO PROVE THE GENUINENESS OF THE CREDITS: - I) NIZAM WOOL AGENCY V CIT 193 ITR 79 (ALL.) II) G VENKATA REDDY & CO. V DCIT 73 TTJ 401 THE LEARNED CIT(A) FURTHER MENTIONED THAT THE ASSES SEE HAS NOT FILED ANY EVIDENCE DURING THE COURSE OF APPEAL H EARING TO SAY THAT THE ASSESSEE CAN DEMONSTRATE THE GENUINENES S OF THE LOAN CREDITORS. THE LEARNED CIT(A) THEREFORE CONFI RMED THE ADDITION OF RS.4 LAKHS. 2.3 DURING THE COURSE OF PROCEEDINGS BEFORE US, TH E LEARNED AR HAS FILED A PAPER BOOK CONTAINING 34 PAG ES. COPIES OF CONFIRMATION LETTERS ARE AVAILABLE AT PAGES 14 T O 27 OF THE PAPER BOOK. THE LEARNED AR DREW OUR ATTENTION TO P AGE 32 OF THE PAPER BOOK. THIS IS COPY OF THE LETTER FILED BE FORE THE PAGE 4 OF 13 ITA NO.474/BANG/2009 4 LEARNED CIT(A). ACCORDING TO THE LEARNED AR, THE A SSESSEE HAS DISCHARGED THE PRIMARY ONUS OF IDENTIFYING THE CREDIT ORS SOURCE OF CREDIT AND THE TRANSACTIONS. ALL THE CREDITORS ARE AGRICULTURISTS, WHO HAVE CONFIRMED THAT THE AMOUNT WAS LENT FROM THEIR PAST SAVINGS OF AGRICULTURAL INCOME. IT HAS BEEN FURTHER SUBMITTED THAT THE LETTER DATED 22ND AUGUST , 2006 WAS OBTAINED UNDER DURESS AND THE SAME WAS FILED IN THE COUNTER AT THE INSTANCE OF THE ASSESSING OFFICER HI MSELF. IT WAS THEREFORE SUBMITTED THAT NO EVIDENTIARY VALUE SH OULD BE GIVEN TO THE SAID LETTER. 2.4 ON THE OTHER HAND, THE LEARNED DR SUPPORTED TH E ORDERS OF THE AUTHORITIES BELOW. 2.5 WE HAVE HEARD BOTH THE PARTIES. WE HAVE GONE THROUGH THE STATEMENT OF FACTS FILED BEFORE THE LEA RNED CIT(A). IN THE STATEMENT OF FACTS, IT IS MENTIONED THAT THE ASSESSING OFFICER WITHOUT APPLYING HIS MIND TO THE C ONFIRMATION LETTERS FILED MADE AN ADDITION OF RS.4 LAKHS TOWARD S LOANS OUTSTANDING HOLDING THAT THE ASSESSEE FILED A LETTE R OFFERING THE SAID AMOUNT FOR TAXATION. IN THE STATEMENT OF FACTS, IT IS NOT MENTIONED THAT THE LETTER WAS OBTAINED UNDER DU RESS OR UNDER PRESSURE. THERE IS NO SPECIFIC GROUND OF APP EAL RAISED BEFORE THE LEARNED CIT(A) THAT THE LETTER WAS NOT G IVEN VOLUNTARILY. WE HAVE SEEN THE CONFIRMATION LETTERS AS AVAILABLE AT PAGES 14 TO 27 OF THE PAPER BOOK. ALL THE CONFI RMATION PAGE 5 OF 13 ITA NO.474/BANG/2009 5 LETTERS CONTAIN THE SAME LANGUAGE. WE ARE REPRODUC ING ONE OF THE CONFIRMATION LETTERS:- 'TO WHOMSOEVER IT MAY CONCERN THIS IS TO INFORM YOU THAT I HAVE ADVANCED A SUM OF RS._______ AN INTEREST FREE LOAN TO B MUNIREDDY, S/O K B REDDY AND THIS AMOUNT WAS AVAILABLE WITH ME OUT OF MY PAST SAVINGS FROM AGRICULTURAL INCOME. I FURTHER CONFIRMED THAT I AM NOT AN INCOME TAX ASSESSEE AND I AM NOT HAVING ANY BANK ACCOUNT'. 2.6 THE LANGUAGE EMPLOYED IN ALL THE CONFIRMATION LETTERS IS THE SAME AND THIS SHOW THAT THE CONFIRMA TION LETTERS WERE PREPARED BY THE ASSESSEE AND THESE WERE GOT SIG NED FROM THE CREDITORS. THE ASSESSING OFFICER HAS RIGHTLY PO INTED OUT THAT THESE CONFIRMATION LETTERS ARE NOT SUFFICIENT TO DISCHARGE THE ONUS CAST ON THE ASSESSEE U/S 68 OF THE I T ACT . THE CREDITORS HAVE NOT GIVEN THE DATE OF ADVANCE. THEY HAVE NOT EXPLAINED THE SOURCE FROM WHERE THEY HAVE OBTAINED T HE SAME FOR ADVANCING TO THE ASSESSEE. THUS, THESE CONFIRM ATION LETTERS ARE NOT SUFFICIENT FOR HOLDING THAT THE ASSESSEE HA S DISCHARGED THE ONUS CAST U/S 68 OF THE I T ACT. THE LETTER UN DER REFERENCE IS DATED 22ND AUGUST, 2006 AND HAS BEEN F ILED ON 24TH AUGUST, 2006. THE LETTER HAS BEEN FILED AT TH E RECEIPT COUNTER. IN THE LETTER, IT IS MENTIONED THAT IN CO NTINUATION TO HIS DISCUSSION ON THREE HEARINGS AND TO COOPERATE A ND TO BUY PAGE 6 OF 13 ITA NO.474/BANG/2009 6 PEACE WITH THE DEPARTMENT, THE ASSESSEE IS SUBMITTI NG THE DETAILS OF ADDITIONAL INCOME AS UNDER:- 'LOANS DECLARED IN THE YEAR 2004-05 FOR RS.4 LAKHS'. THE ASSESSING OFFICER HAS PASSED THE ASSESSMENT ORD ER ON 25TH AUGUST, 2006. THE ASSESSEE HAS NOT PRODUCED A NY EVIDENCE TO SAY THAT THE LETTER UNDER REFERENCE WAS OBTAINED UNDER PRESSURE. EVEN THE AFFIDAVIT OF THE ASSESSEE WAS NOT FILED BEFORE THE LEARNED CIT(A). THE LETTER HAS NO T BEEN RETRACTED. THOUGH A CONTENTION HAS BEEN RAISED THAT THE LETTER WAS OBTAINED UNDER PRESSURE BUT NO EVIDENCE HAS BEE N FILED. A CONTENTION CANNOT SUBSTITUTE AN EVIDENCE. AN ADMIS SION CAN BE CONSIDERED AS THE BASIC PIECE OF EVIDENCE. AN AD MISSION MAY NOT BE ADMISSIBLE IN CASE IT IS AGAINST THE PROVISI ONS OF LAW OR IT IS OBTAINED UNDER MISCONCEPTION OF FACTS OR LAW OR IS OBTAINED UNDER DURESS. NONE OF THE CONDITIONS STAND SATISFI ED IN THE INSTANT CASE. THE ASSESSING OFFICER HAS NOT SOLELY ACTED ON THE LETTER. THIS HAS BEEN TAKEN AS CORROBORATIVE EVIDE NCE. SINCE THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINE SS AND GENUINENESS OF THE TRANSACTIONS, THEREFORE, THE ASS ESSING OFFICER WAS JUSTIFIED IN MAKING THE ADDITION OF RS. 4 LAKHS. WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) AND THE ADDITION OF RS.4 LAKHS AS CONFIRMED BY THE LEARNED C IT(A) IS UPHELD. PAGE 7 OF 13 ITA NO.474/BANG/2009 7 3. THE SECOND GRIEVANCE OF THE APPELLANT IS THAT T HE LEARNED CIT(A) SHOULD HAVE DELETED THE ADDITION IN RESPECT OF TREATING PART OF THE AGRICULTURAL INCOME AS NON-AGR ICULTURAL INCOME AS THE ASSESSEE HAS FILED ALL THE DOCUMENTAR Y EVIDENCE TO SUPPORT THE CLAIM OF THE AGRICULTURAL INCOME. 3.1 THE ASSESSING OFFICER HAS MADE THE ADDITION AF TER OBSERVING AS UNDER:- 'IN THE RETURN OF INCOME, ASSESSEE ADMITTED AGRICULTURAL INCOME OF RS.4,50,000 AND HE WAS ASKED TO SUBSTANTIATE THE SAME. IN RESPONSE, ASSESSEE PRODUCED KUTCHA ACCOUNTS MAINTAINED BY HIM. EXAMINATION OF THESE ACCOUNTS REVEALED THAT ASSESSEE HAD INCURRED SUBSTANTIAL EXPENDITURE TOWARDS EARNING AGRICULTURAL INCOME DURING THE FINANCIAL YEAR 2003-04. ON QUANTIFICATION, IT WAS NOTICED THAT THE AGRICULTURAL INCOME WORKED OUT TO RS.1,00,000 AFTER CONSIDERING THE VARIOUS EXPENSES INCURRED AS AGAINST RS.4,50,000 ADMITTED. ACCORDINGLY, IT WAS PROPOSED TO RESTRICT THE AGRICULTURAL INCOME TO RS.1,00,000 AND BRING THE BALANCE AMOUNT OF RS.3,50,000 TO TAX UNDER THE HEAD 'INCOME FROM OTHER SOURCES'. IN RESPONSE, ASSESSEE HAS FILED A LETTER DATED 22/08/2006 OFFERING THE AMOUNT OF RS.3,50,000 FOR TAXATION'. 3.2 BEFORE THE LEARNED CIT(A) THE ASSESSEE FILED T HE WRITTEN SUBMISSIONS AND THE WRITTEN SUBMISSIONS HAV E BEEN PAGE 8 OF 13 ITA NO.474/BANG/2009 8 REPRODUCED BY THE LEARNED CIT(A) IN PARA 4.3 OF HIS ORDER. THESE ARE REPRODUCED AS UNDER FOR READY REFERENCE:- 'THE AO RELYING AGAIN SOLELY ON THE SAME LETTER, ALSO RESTRICTS THE AGRICULTURAL INCOME AT RS.1,00,000 WITHOUT ANY JUSTIFICATION, THEREBY MAKING AN ADDITION OF RS.3,50,000 AS INCOME FROM OTHER SOURCES. IT IS SUBMITTED THAT ANY PERSON WITH ORDINARY PRUDENCE WOULD CERTAINLY APPRECIATE THAT ON AN AVERAGE, AGRICULTURAL YIELD FROM ABOUT 13 ACRES OF AGRICULTURAL LAND SITUATED IN THE MANGO BELT OF KARNATAKA CAN NEVER BE JUST RS.1,00,000. WITH DUE RESPECT, IT IS SUBMITTED THAT IT COULD ONLY BE A PERVERT FINDING TO DENY THE BENEFIT FOR NO REASON, BUT RELYING SOLELY ON (HIS OWN) LETTER. HERE AGAIN, THE APPELLANT HAS PLACED ON RECORD HIS AGRICULTURAL LAND HOLDING DULY CERTIFIED BY THE VILLAGE ACCOUNTANT, YIELD FOR PREVIOUS YEARS, ETC. TO JUSTIFY THE CLAIM AT RS.4,50,000. IT IS THEREFORE PRAYED THAT THE ADDITIONS BE DELETED BY DISCARDING THE FINDING (?) OF THE AO'. 3.3 THE LEARNED CIT(A) MENTIONED THAT HE HAS EXAMINED THE EVIDENCE FURNISHED IN REGARD TO THE LA ND HOLDING. ACCORDING TO THE LEARNED CIT(A), THIS RELATE TO FIN ANCIAL YEAR 2005-06 AND NOT FOR THE FINANCIAL YEAR 2003-04. THU S, THE ACTUAL LAND HOLDING CANNOT BE ASCERTAINED ON THIS B ASIS. THE CERTIFICATE ISSUED BY THE SECRETARY, MANDAL PANCHAYAT IS DATED 17TH APRIL,2 007 AND DOES NOT INDICATE THE YEAR OF L AND HOLDING. IT IS FURTHER OBSERVED BY THE LEARNED CIT(A) THAT TH E PAGE 9 OF 13 ITA NO.474/BANG/2009 9 CERTIFICATE ITSELF WAS NOT SIGNED BY THE ISSUING AUT HORITY. THUS, THE ASSESSEE HAS FAILED TO PRODUCE CONCLUSIVE PROOF FOR EARNING AGRICULTURAL INCOME TO THE EXTENT OF RS.3,50,000/-. THE LEARNED CIT(A) CONFIRMED THE ADDITION. 3.4 DURING THE COURSE OF PROCEEDINGS BEFORE US, TH E LEARNED AR DREW OUR ATTENTION TO PAGE 1 OF THE PAPE R BOOK. THIS IS A CERTIFICATE ISSUED BY VILLAGE ACCOUNTANT. IN THIS CERTIFICATE, IT IS MENTIONED THAT THE ASSESSEE'S LA ND IS HAVING APPROXIMATELY 1000 MANGO TREES OF 12 TO 14 YEAR OLD. THE YIELD OF MANGOES IS APPROXIMATELY 50 TO 60 TON PER YEAR. O THER CROPS ARE ALSO GROWN. THE EXTENT OF AGRICULTURAL L AND HELD BY THE ASSESSEE IS ALSO MENTIONED IN THIS CERTIFICATE. THEREAFTER, THE LEARNED AR DREW OUR ATTENTION TO PAGE 2 OF THE PAPER BOOK. THE ASSESSEE HAS GIVEN THE QUANTUM OF AGRICULTURAL INCOME BEING EARNED FOR THE YEAR 2001 TO 2006. THE DETAIL S ALSO GIVEN THE EXTENT OF VARIOUS PRODUCTS SOLD. THE AGRICULTU RAL INCOME FROM YEAR 2001-02 TO 2005-06 VARY FROM RS.4 LAKHS TO RS.4,95,000/-. THE LEARNED AR FURTHER SUBMITTED TH AT AGRICULTURAL INCOME BEING REPORTED IN EARLIER YEARS HAS BEEN ACCEPTED BY THE REVENUE. IT WAS THEREFORE ARGUED TH AT THE LEARNED AO WAS NOT JUSTIFIED IN RESTRICTING THE AGR ICULTURAL INCOME TO RS.1 LAKH. 3.5 ON THE OTHER HAND, THE LEARNED DR SUPPORTED TH E ORDERS OF THE AUTHORITIES BELOW. PAGE 10 OF 13 ITA NO.474/BANG/2009 10 3.6 WE HAVE HEARD BOTH THE PARTIES. IT IS CLEAR F ROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HAS EXAMINED THE KUTCHA ACCOUNTS MAINTAINED BY THE ASSESSEE IN RE SPECT OF AGRICULTURAL INCOME. EXAMINATION OF KUTCHA ACCOUNT S REVEAL THAT THE ASSESSEE HAS INCURRED SUBSTANTIAL EXPENSES TOWA RDS EARNING AGRICULTURAL INCOME. THE ASSESSING OFFICER DID THE QUANTIFICATION AND ACCORDING TO THAT QUANTIFICATION , THE AGRICULTURAL INCOME WORKED OUT TO RS.1 LAKH. THE A SSESSEE FILED A LETTER DATED 22ND AUGUST, 2006 VIDE WHICH HE ACCE PTED THE AGRICULTURAL INCOME OF RS.1 LAKH. THE ACCEPTANCE O F AGRICULTURAL INCOME TO THE EXTENT OF RS.1 LAKH IS NOT WITHOUT AN Y BASIS BECAUSE THE AO EXAMINED THE KUTCHA ACCOUNT AND QUAN TIFIED THE AGRICULTURAL INCOME. BY FILING THE LETTER, THE ASSESSEE STOPPED THE REVENUE FOR MAKING FURTHER ENQUIRIES. THIS MIGHT HAVE BEEN PERHAPS DONE SO THAT EARLIER ASSESSMENTS MAY NOT BE REOPENED AS AGRICULTURAL INCOME WAS SUBSTANTIALLY DE CLARED IN EARLIER YEARS. NOW THE REVENUE CANNOT BE PUT IN A DISADVANTAGEOUS POSITION. MOREOVER, THE ADDITION I S NOT WITHOUT ANY BASIS AND THE REFERRED LETTER IS ONLY A CORROBORA TIVE EVIDENCE. THE LEARNED CIT(A) HAS MENTIONED IN PARA 4.7 OF HIS ORDER THAT THE ASSESSEE HAS WRITTEN TWO LETTERS, ON E HAND- WRITTEN AND THE OTHER IS A TYPED LETTER. THE LEARNE D CIT(A) HAS REPRODUCED THAT LETTER. FROM THE LETTER, THE LEARN ED CIT(A) HAS OBSERVED THAT THE LETTER WAS SIGNED BY THE ASSES SEE IN A CONSCIOUS STATE OF MIND. WE REQUIRED THE LEARNED A R TO GIVE THE DETAIL OF AGRICULTURAL INCOME DECLARED AFTER FI LING THE LETTER PAGE 11 OF 13 ITA NO.474/BANG/2009 11 DATED 22ND AUGUST, 2006. THE ASSESSEE HAS FILED RE TURN FOR THE ASST. YEAR 2006-07 ON 29TH MARCH, 2007. FOR THI S YEAR, THE ASSESSEE HAS DECLARED THE AGRICULTURAL INCOME T O THE EXTENT OF RS.1,85,000/- THOUGH IN EARLIER YEARS, THE AGRICU LTURAL INCOME WAS BEING DECLARED FROM RS.4 LAKHS TO RS.4,95,000/- . THE BOOK VALUE OF AGRICULTURAL LAND AS ON 31ST MARCH, 2006 I S THE SAME AS IN EARLIER YEARS. THUS, NO AGRICULTURAL LAND HAS BE EN DISPOSED OF BY THE ASSESSEE. THE FACT THAT THE ASSESSEE HAS DEC LARED LESSER AGRICULTURAL INCOME AFTER FILING OF THE LETT ER ALSO SUPPORT THE CASE OF THE REVENUE THAT AGRICULTURAL INCOME WA S INFLATED. THEREFORE, THE LEARNED CIT(A) WAS JUSTIFIED IN UPHO LDING THE ACTION OF THE ASSESSING OFFICER IN RESTRICTING THE AGRICULTURAL INCOME TO RS.1 LAKH AND TREATING THE BALANCE AGRICU LTURAL INCOME AS INCOME FROM OTHER SOURCES. 4. THE 3RD GRIEVANCE IS AGAINST THE ADDITION OF RS.1,50,000/- MADE TOWARDS INADEQUATE WITHDRAWALS. 4.1 THE ASSESSING OFFICER NOTICED THAT THE ASSESSE E HAS SHOWN A SUM OF RS.45,000/- AS DRAWING. THE AO HAS MENTIONED IN HIS ORDER THAT THE ASSESSEE HAS FILED A LETTER ADMITTING A FURTHER AMOUNT OF RS.1,50,000/- AS ADDI TIONAL DRAWING AND OFFERED THE SAME FOR TAXATION. CONSIDE RING THE ADMISSION MADE AND CONSIDERING THE STANDARD OF LIVI NG, THE AO ACCEPTED THE ADMISSION MADE VIDE LETTER DATED 22ND AUGUST, 2006. PAGE 12 OF 13 ITA NO.474/BANG/2009 12 4.2 ON THIS ISSUE, WE HAVE HEARD BOTH THE PARTIES. WE HAD EARLIER REFERRED THAT THE LETTER DATED 22ND AUG UST, 2006 WAS A CORROBORATIVE EVIDENCE FOR MAKING ADDITION FO R UNEXPLAINED CREDITS AND AGRICULTURAL INCOME. IN RE SPECT OF HOUSEHOLD DRAWING, THE AO HAS NOT DISCUSSED THE ISS UE. BEFORE US, THE LEARNED AR SUBMITTED THAT THERE ARE ONLY TWO MEMBERS IN THE FAMILY AND THE HOUSEHOLD EXPENSES SHOWN WERE ADEQUATE. SINCE THE AO HAS NOT DISCUSSED THE ISSUE AS TO HOW THE HOUSEHOLD EXPENSES CAN BE TO THE EXTENT OF RS.1,95, 000/-, THEREFORE, THE ADDITION OF RS.1,50,000/- COULD NOT HAVE BEEN MADE SIMPLY ON THE BASIS OF THE LETTER. HENCE, THE ISSUE OF ADDITION OF RS.1,50,000/- IS RESTORED BACK ON THE F ILE OF THE ASSESSING OFFICER. 5. BEFORE PARTING WITH THE ORDER, IT WILL BE RELEV ANT TO MENTION THAT THE ASSESSEE VIDE LETTER DATED 22ND AUGUST, 2006 MENTIONED THAT THE LONG TERM CAPITAL GAIN ON S ALE OF AGRICULTURAL LAND IS NOT TAXABLE. HOWEVER, THIS WA S SHOWN IN THE RETURN OF INCOME. THE AO HAS ACCEPTED SUCH SUBMISS ION FILED IN THE LETTER DATED 22ND AUGUST, 2006. THIS ALSO POIN TS OUT THAT THE LETTER DATED 22ND AUGUST, 2006 IS A VOLUNTARY AD MISSION OF ADDITIONAL INCOME. HENCE, THIS LETTER CAN BE ACTED UPON WHEN THERE ARE OTHER EVIDENCES SUPPORTING THE ADDITION. PAGE 13 OF 13 ITA NO.474/BANG/2009 13 6. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 9TH OCTOBER, 2009. SD/- SD/- (K P T THANGAL) (N L KALRA) VICE PRESIDENT ACCOUNTANT MEMBER BANGALORE, DTD.09/10/2009 COPY TO : 1. THE ASSESSEE 2.THE REVENUE 3. THE CIT( A) CONCERNED.4. THE CIT CONCERNED. 5. THE DR 6. GUAR D FILE. 7. GF, ITAT, NEW DELHI. MSP/06.10. BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.