Shri Pravinchandra N. Pandya, Bhavnagar V. The Income tax Officer, Ward-1(2), Bhavnagar

ITA 588/AHD/2006

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6015 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-06-2010
• Assessment Year: 1997-1998
• Appeal Filed On: 08-03-2006
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K M SHAH
• Assessee Lawyers: M J SHAH
• Keywords: Unexplained investment; Unexplained expenditure; Business income; Income from undisclosed sources; Deemed to accrue or arise in india; Onus to prove
• Section: 69C; 142(1); 133A; 69B; 251; 148; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' [BEFORE SHRI BHAVNESH SAINI,JM & SHRI A N PAHUJA,AM ] ITA NOS.587, 588, 589, 590, 591 AND 592/AHD/2006 (AYS:-96-97, 97-98, 98-99, 99-00, 00-01 & 01-02) SHRI PRAVINCHANDRA N PANDYA, ASHISH, PLOT NO.15, NEAR NILAMBAUG CIRCLE, BHAVNAGAR V/S INCOME-TAX OFFICER, WARD- 1(2), BHAVNAGAR [APPELLANT] [RESPONDENT] ITA NO.375/AHD/2006 (ASSESSMENT YEAR:-1997-98) INCOME-TAX OFFICER, WARD- 1(2), BHAVNAGAR V/S SHRI PRAVINCHANDRA N PANDYA, ASHISH, PLOT NO.15, NEAR NILAMBAUG CIRCLE, BHAVNAGAR [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI K M SHAH, DR ASSESSEE BY:- SHRI M J SHAH, AR O R D E R PER BENCH: THESE SEVEN APPEALS-SIX BY THE ASSESSEE AND ONE BY THE REVENUE AGAINST SIX SEPARATE ORDERS DATED 30-1 1-2005 OF THE LD. CIT(APPEALS)-XIX, AHMEDABAD, FOR THE AYS 1996-9 7, 1997-98, 1998-99, 1999-2000, 2000-01, 2001-02, RAISE THE FOL LOWING GROUNDS. ITA NO.587/AHD/2006[AY 1996-97] 1 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED I N UPHOLDING THE ESTIMATION OF SALES AND THE ADOPTION OF GROSS PROFI T @ 5%. 2 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION TO EXTENT OF RS.115938/- OUT OF AGRICULTUR AL INCOME. 3 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN ENHANCING THE ASSESSMENT BY RS.230000/-. THE ENHANCEMENT IS NOT J USTIFIED. ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 2 ITA NO.588/AHD/2006[ AY 1997-98] 1. THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE ESTIMATION OF SALES AND THE ADOPTION OF GROSS PROFI T @ 5%. 2. THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED I N UPHOLDING THE ADDITION OF RS.127500/- AS UNEXPLAINED CAPITAL. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED I N UPHOLDING THE ADDITION TO THE EXTENT OF RS.29130/- OUT OF AGRICUL TURAL INCOME. 4. THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED I N ENHANCING THE ASSESSMENT BY RS.73775/- AS UNEXPLAINED INVESTMENT MADE DURING THE YEAR. THE ENHANCEMENT IS NOT JUSTIFIED. ITA NO.589/AHD/2006[AY 1998-99] 1 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED I N UPHOLDING THE ESTIMATION OF SALES AND THE ADOPTION OF GROSS PROFI T @ 5%. 2 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.12328/- AS UNEXPLAINED ADVANCE TO FA THER. 3 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.101433/- OUT OF AGRICULTURAL INCOME. 4 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.10000/- AS UNEXPLAINED RECEIPT NOT D ISCLOSED. 5 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.9921/- AS UNEXPLAINED EXPENDITURE. ITA NO.590/AHD/2006[AY 1999-2000] 1 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED I N UPHOLDING THE ESTIMATION OF SALES AND THE ADOPTION OF GROSS PROFI T @ 5%. 2 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.2,05,109/- OUT OF AMOUNTS CREDITED I N THE BANK. ITA NO.591/AHD/2006[ AY 2000-01] 1 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED I N UPHOLDING THE ESTIMATION OF SALES AND THE ADOPTION OF GROSS PROFI T @ 5%. ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 3 2 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.1,00,000/- ON ACCOUNT OF DEPOSIT IN THE BANK. 3 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.33120/- OUT OF INVESTMENT IN PURCHAS E OF AGRICULTURAL LAND. ITA NO.592/AHD/2006[AY 2001-02] 1 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED I N UPHOLDING THE ESTIMATION OF SALES AND THE ADOPTION OF GROSS PROFI T @ 5%. 2 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.35,987/- OUT OF AGRICULTURAL INCOME. ITA NO.375/AHD/2006[AY 97-98- REVENUE] 1 THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.20,000/- OUT OF TOTAL ADDITION O F RS.32,600/- MADE ON ACCOUNT OF TRADING. 2 THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN D ELETING THE ADDITION OF RS.2,70,000/- MADE ON ACCOUNT OF COMMISSION / BROKERAGE. 3 THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN D ELETING THE ADDITION OF RS.1,31,333/- OUT OF TOTAL ADDITION OF RS.2,04,130/- MADE ON ACCOUNT OF NON AGRICULTURAL INCOME. 4 THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN D ELETING THE ADDITION OF RS.6,21,190/- MADE U/S 69 OF THE AC T. 5 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO 6 IT IS , THEREFORE, PRAYED THAT THE ORDER OF THE A SSESSING OFFICER MAY BE RESTORED TO THE ABOVE EXTENT. SINCE SIMILAR ISSUES ARE INVOLVED, THESE APPEALS WERE HEARD SIMULTANEOUSLY FOR THE SAKE OF CONVENIENCE AND ARE BEING DISPOSED OF THROUGH THIS COMMON ORDER. 2. ADVERTING FIRST TO GROUND NO. 1 IN THE AFOR ESAID SIX APPEALS OF THE ASSESSEE AND GROUND NO.1 IN THE APPEAL OF TH E REVENUE FOR ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 4 THE AY 1997-98, FACTS, IN BRIEF, AS PER RELEVANT OR DERS ARE THAT A SURVEY U/S 133A OF THE INCOME-TAX ACT, 1961 [HEREIN AFTER AFTER REFERRED TO AS THE ACT] WAS CONDUCTED IN THE BUSI NESS PREMISES OF M/S SHIVANI ENTERPRISES, PROP. SMT. JAYSHREEBEN P P ANDYA, WIFE OF THE ASSESSEE ON 21.1.2003. DURING THE COURSE OF SUR VEY, STATEMENT OF THE ASSESSEE AND HIS WIFE WAS RECORDED, WHEN IT TRANSPIRED THAT THE ASSESSEE WAS HAVING FOLLOWING ASSETS IN HIS NAM E: (A) AGRICULTURAL LAND -10 VIGHAS AT VILLAGE VAVADI, TAL: SIHOR (B) AGRICULTURAL LAND OF 18 VIGHAS AT VILLAGE SANES , AT BHAL (C) TENANCY RIGHTS OF OVER 12 YEARS FOR THE SHOP KN OWN AS ASHISH TRADERS, NIRMALNAGAR, BHAVNAGAR (D) A COMPLEX KNOWN AS ASHISH RATNA, AT PLOT NO.2 4, PURCHASED IN 1994-1995 AT KUMUDWADI, BORTALAV ROAD, BHAVNAGAR INCLUDING COST OF LAND AT RS.4,00,000/- AND COST OF CONSTRUCTION AT RS.10,00,000/- APPROX. (E) A PLOT NO.15 IN VIRBHADRA CO-OP. HOUSING LTD. , AND BUILDING CONSTRUCTED ON THE SAID PLOT TOGETHER WITH SHOP IN WHICH SHIVANI ENTERPRISE DOING BUSINESS, AND TOTAL INVE STMENT MADE AT RS.3,60,000/-. (F) A PLOT OF LAND BEARING NO.1882 OF 320 SQ. YARDS , NR. RUPANI CIRCLE, BHAVNAGAR PURCHASED IN 1992 AT THE COST OF RS.6.23 LACS. (G) A SHOP AT MAHIDHARPURA, SURAT PURCHASED IN 1993 WITH THE COST OF RS.1,30,000/-. (H) ONE HERO HONDA, NO. GJ.4-3432 PURCHASED DURING FY 1997-98 WITH FINANCE FROM ASHOK FINANCE. ALSO ONE MARUTI CA R NO. GJ.4-D-21441 CLAIMED TO BE BELONGING TO OTHER BUT IN POSSESSION OF THE ASSESSEE. 2.1 SINCE THE ASSESSEE NEVER FILED ANY RETURN OF IN COME HITHERTO, THE ASSESSING OFFICER[AO IN SHORT] ISSUED A NOTICE U/S 148 OF THE ACT ON 24-01-2003 FOR THE AYS 1996-97 TO 2001-02 ,AFTE R RECORDING REASONS IN WRITING ON THE BASIS OF FACTS FOUND DURI NG THE COURSE OF SURVEY. HOWEVER, THE ASSESSEE DID NOT COMPLY WITH T HE SAID NOTICE NOR WITH THE NOTICES ISSUED U/S 142(1) OF THE ACT. AFTER A NUMBER OF REMINDERS, THE ASSESSEE FILED RETURN DECLARING INCO ME OF RS.32,170/- ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 5 BESIDES AGRICULTURAL INCOME OF RS.1,75,940/- FOR TH E AY 1996-97 ONLY ON 01-03-2004. LIKEWISE RETURNS FOR THE OTHER ASSES SMENT YEARS WERE FILED ONLY ON 1.3.2004.DURING THE COURSE OF AS SESSMENT PROCEEDINGS FOR THE AY 1996-97, THE AO NOTICED THAT THOUGH THE ASSESSEE REFLECTED NET PROFIT OF RS.14,650/- IN TER MS OF PROVISIONS OF SEC. 44AF OF THE ACT, ON RETAIL SALES OF RS.2,92,72 5/- FROM HIS DIAMOND CUTTING BUSINESS, THE BASIS OF THE SAID AMO UNT OF RS.2,92,725/- WAS NOT DISCLOSED. THE ASSESSEE MERE LY CONTENDED THAT THESE SALES HAD BEEN DISCLOSED TO THE SALES TA X DEPARTMENT, SINCE THE ASSESSEE DID NOT DISCLOSE ANY BASIS FOR THESE SALES, THE AO ESTIMATED NET PROFIT OF RS. 50,000/-,RESULTING I N ADDITION OF RS.35,350/- IN THE AY 1996-97. 2.2 LIKEWISE , THE AO ESTIMATED PROFIT OF R S. 50,000/-IN THE AY 1997-98 TO 2000-01 RESULTING IN ADDITION OF I) RS .32,600/- IN THE AY 1997-98, II) RS.34,386/- IN THE AY 1998-99,III) RS. 34,764/- IN THE AY 1999-2000, AND IV)RS. 34,567/- IN THE AY 2000-01. I N THE AY 2001- 02, NET PROFIT WAS ESTIMATED AT RS. 1 LAC, RESULTIN G IN ADDITION OF RS. 47,832/-. 3 ON APPEAL, THE LD. CIT(A) REDUCED THE ADDITION IN THE AY 1996- 97 ON THE ESTIMATED SALES OF RS. 5 LACS IN THE FOLL OWING TERMS: 3.1 DURING THE COURSE OF APPELLATE PROCEEDINGS, IT IS SUBMITTED THAT:- THE APPELLANT HAD FILED SALES TAX RETURN IN TIME, THE SALES TAX DEPARTMENT HAS COMPLETED ASSESSMENT AFTER VERIFICATION AND THE FIGURE OF RS.2,92,725/- ARE THE SALES, WHICH HAVE BEEN DECLAR ED BEFORE SALES TAX AUTHORITIES AND ACCEPTED BY THEM. THE ASSESSMENT YEAR 1996-97 RELATES TO ACCOUNTING P ERIOD 95-96 AND ASSESSMENT PROCEEDINGS WERE INITIATED IN 2003 I.E. AFTER A LONG PERIOD OF TIME. IN VIEW OF THIS FACT THE APPELLANT HAD NET PR ESERVED THE PAPERS FOR ACCOUNTING PERIOD 1995-96. HOWEVER, THE SALE FIGURE IS DULY SUPPORTED BY SALES TAX DEPARTMENT AFTER DUE VERIFICATION. ASSESS ING OFFICER WAS, THEREFORE, NOT JUSTIFIED IN HOLDING THAT WAS NO BAS IS WITH THE ASSESSEE FOR SALE FIGURE OF RS.2,92,725/-. THE APPELLANT, THEREF ORE, SUBMITS THAT THE ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 6 ESTIMATE OF INCOME AT RS.50,000/- AS AGAINST RS.14, 650/- AND THE RESULTANT ADDITION OF RS.35,350/- IS UNWARRANTED AND UNJUSTIF IED'. 3.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE. I HAVE ALSO GIVEN DUE THOUGHT TO THE WRITTEN SUBMISSION OF THE APPELL ANT. THE APPELLANT HAS CARRIED OUT TRADING ACTIVITIES IN THE NAME OF ASHIS H TRADERS. IT IS A FACT THAT NEITHER THE APPELLANT HAS MAINTAINED BOOKS OF ACCOU NT NOR PURCHASE & SALES VOUCHERS. IN ABSENCE OF PURCHASE AND SALE VOU CHERS, THE CORRECTNESS OF DISCLOSED SALES REMAINED UNVERIFIED. THE CONTENTION OF THE APPELLANT THAT THE SALES TAX DEPARTMENT HAD VERIFIE D HIS SALES IS FOUND TO BE NOT CORRECT BECAUSE THE SALES STATEMENT STATED TO H AVE BEEN FILED WITH SALES TAX DEPARTMENT WAS ACCEPTED IN SUMMARY MANNER WITHOUT MAKING ANY SCRUTINY. IN ABSENCE OF PRIMARY VOUCHERS IN THE FORM OF SALES BILLS, THE SALES DISCLOSED CANNOT BE SAID AUTHENTIC, TRUE AND CORRECT. THE STATEMENT OF SALES SUBMITTED TO THE SALES TAX DEPARTMENT IS A LSO NOT SUPPORTED BY ANY AUTHENTIC EVIDENCE. IN VIEW OF THESE FACTS, AND CONSIDERING THE VOLUME AND NATURE OF BUSINESS ACTIVITIES AND ASSETS ACQUIR ED, THE ASSESSING OFFICER HAD NO ALTERNATIVE BUT TO ESTIMATE THE BUSI NESS INCOME. HOWEVER, THE ESTIMATE MADE BY THE ASSESSING OFFICER APPEARS TO BE EXCESSIVE. THEREFORE, THE ESTIMATED INCOME IS REDUCED TO RS.25 ,000/- AT THE RATE OF 5% ON ESTIMATED SALES OF RS.5 LAKH, WHICH IN MY OPI NION, APPEARS TO MOST REASONABLE. THUS, THE TRADING ADDITION TO THE EXTEN T OF RS.10,350/- SUSTAINED AND BALANCE OF RS.25,000/- IS DELETED. 3.1 FOLLOWING HIS OWN FINDINGS IN THE AY 1996-97, THE LD. CIT(A) REDUCED THE NET PROFIT AND SUSTAINED THE FOLLOWING ADDITION IN THE SUCCEEDING ASSESSMENT YEARS : AY ESTIMATED SALES NET PROFIT ADDITION SUSTAINED 1997-98 6,00,000 30,000 12,600 1998-99 6,50,000 32,500 16,886 1999-2000 7,00,000 35,000 19764 2000-2001 8,50,000 42,500 27,067 2001-2002 15,00,000 75,000 22,832 4 THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. AR ON BEHALF OF THE ASSESSEE REITERATED THEIR SUBMISSIONS BEFORE THE LD. CIT(A) WHILE THE LD. DR SUPPORTED THE ORDER OF THE AO. ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 7 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE. UNDISPUTEDLY, THE ASSESSEE NEVER FILED HI S RETURNS OF INCOME BEFORE THE SURVEY ON 21.1.2003. EVEN IN RESP ONSE TO NOTICE DATED 24.1.2003 ISSUED U/S 148 OF THE ACT, THE ASSE SSEE FILED RETURNS FOR THESE ASSESSMENT YEARS ONLY ON 1.3.2004 . THE LD. CIT(A) FOUND THAT THE ASSESSEE WAS NOT MAINTAINING ANY BOO KS OF ACCOUNTS IN RESPECT OF HIS BUSINESS IN THE NAME OF ASHISH TR ADERS NOR PRODUCED ANY PURCHASE OR SALE BILLS. IN THE ABSENCE OF ANY EVIDENCE OF PURCHASE AND SALES, THE AO AND THE LD. CIT(A) HA D NO ALTERNATIVE BUT TO ESTIMATE PROFIT. WE ARE OF THE OPINION THAT NO DOUBT THE AO/CIT(A) SHOULD TRY TO MAKE AN HONEST AND FAIR ESTIMATE OF T HE INCOME EVEN IN A BEST JUDGMENT ASSESSMENT AND SHOULD NOT ACT TOTALLY ARBI TRARILY, BUT THERE IS NECESSARILY SOME AMOUNT OF GUESS WORK INVOLVED IN A BEST JUDGMENT ASSESSMENT, AND IT IS THE ASSESSEE HIMSELF WHO IS TO BLAME AS H E DID NOT SUBMIT PROPER ACCOUNTS AND DETAILS.[ KACHWALA GEMS VS JCIT, 288 I TR 10 (2007)(SC) ]. THE LD. AR APPEARING ON BEHALF OF THE ASSESSEE DID NOT REFER US TO ANY MATERIAL IN ORDER TO CONTROVERT THE FINDINGS OF THE LD. CIT(A) IN ANY OF THESE YEARS. IN THE ABSENCE OF ANY MATERIAL SO AS T O ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER, WE HAVE NO HES ITATION IN UPHOLDING THE FINDINGS OF THE LD. CIT(A). THEREFORE , GROUND NO.1 IN ALL THESE SIX APPEALS OF THE ASSESSEE AND GROUND NO.1 I N THE APPEAL OF THE REVENUE FOR THE AY 1997-98 IS DISMISSED. 6. GROUND NO.2 IN THE APPEALS OF THE ASSESSEE FOR T HE AYS 1996- 97 & 2001-02 AS ALSO GROUND NO. 3 IN THEIR APPEALS FOR THE AY 1997- 98 & 1998-99 AND GROUND NO.3 IN THE APPEAL OF THE R EVENUE FOR THE AY 2001-02 RELATES TO THE ADDITION IN RELATION TO A GRICULTURAL INCOME. THE AO NOTICED DURING THE COURSE OF ASSESSMENT PROC EEDINGS FOR THE AY 1996-97 THAT THE ASSESSEE REFLECTED NET AGRICULT URAL INCOME OF RS.1,75,938/- AFTER REDUCING ESTIMATED EXPENSES OF RS.45,000/- I.E., NEARLY 20% OF THE GROSS RECEIPTS OF RS.2,20,938/-.T O A QUERY BY THE AO, THE ASSESSEE PRODUCED A COPY OF THE SALE BILL NO. 846 DATED 18- ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 8 12-1995 MENTIONING 'KAPAS' SOLD TO 'AMBICA COTTON C OMPANY', IDAR, DIST. SABARKANTHA. THE SAID BILL REVEALED SALE OF T OTAL COTTON OF 9,345 KG. @ RS.473.50 PER KG, AND ACCORDINGLY, GROSS VALUE WA S SHOWN AT RS.2,21,243/-.AFTER DEDUCTION OF UNLOADING CHARGES OF RS.305/-, NET VALUE HAS BEEN SHOWN AT RS.2,21,243/- . ON CLOSER SCRUTINY OF THE SAID BILL ,THE AO NOTICED THE CORR ECT DATE AS 18-12- 1993 AND NOT 18-12-1995 AND AT 3 PLACES, OVER WRITI NGS WERE MADE BY THE ASSESSEE IN THE BILL. WHILE SIGNING THE BILL , SELLER DATED IT 18- 12-1995 AND THE SAME TYPE OF HAND WRITING IN FIGURE WAS SEEN ON THE TOP OF THE BILL, WHICH HAD ORIGINALLY BEEN MADE BY THE PURCHASER BUT AFTER ERASING AND OVERWRITING 1993 WAS CHANGED TO 1 995. THE ASSESSEE EXPLAINED THAT DUE TO SLIP OF PEN SUCH TYP E OF OVER WRITINGS WERE MADE. ON VERIFICATION FROM AMBICA COTTON CO. , IDDER, DIST. SABARKANTHA, A COPY OF THE DUPLICATE BILL NO.846, D ATED 18-12-1993 FOR THE AMOUNT OF RS.2,20,938/- ALONG WITH FORWARDI NG LETTER DATED 27-3-2004 WAS RECEIVED THROUGH ANGADIA ON 29-3-2004 , WHICH REVEALED THAT THE ORIGINAL BILL ISSUED BY THE ABOVE PARTY WAS DATED 18-12-1993 AND NOT DATED 18-12-1995 AS MANIPULATED BY THE ASSESSEE. IN THESE CIRCUMSTANCES, ESPECIALLY WHEN M ANIPULATIONS WERE MADE BY THE ASSESSEE IN THE BILL DATED 18-12- 1993 ,THE AO ADDED AN AMOUNT OF RS.2,20,938/- AS INCOME FROM UNDISCL OSED SOURCES. 6.1 LIKEWISE IN THE AY 1997-98, THE ASSESSEE REFL ECTED AGRICULTURAL INCOME OF RS. 1,64,113/- AFTER REDUCIN G ESTIMATED EXPENSES OF RS. 40,000/- FROM THE GROSS RECEIPTS OF RS.2.04,113/-. TO A QUERY BY THE AO, THOUGH THE ASSESSEE PRODUCED CERTAIN BILLS, NONE OF THESE BILLS WAS SIGNED WHILE ONE BILL DATED 22.2.1997 WAS IN THE NAME OF SHRI PRAVIN.. THE AO FURTHER NOTICED TH AT IN THE 7/12 EXTRACTS, CROP WAS SHOWN AS KAPAS WHILE SALE BILLS REFLECTED SALE OF SHING AND TIL.. THE ASSESSEE EXPLAINED THAT SHING A ND TIL WERE GROWN BY HIM ON SOME OTHER PLOT OF LAND AND CROP H AD BEEN SOLD BY HIM AFTER TWO YEARS. HOWEVER, THE AO REJECTED THESE CONTENTIONS AND ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 9 RESTRICTED THE CLAIM OF AGRICULTURAL INCOME TO RS.4 3,650/- ON THE BASIS OF SALE BILL DATED 8.11.1996 .THE REMAINING A MOUNT OF RS. 1,60,463/-WAS ADDED AS INCOME FROM UNDISCLOSED SOU RCES. 6.2 IN THE AY 1998-99 ALSO, THE FACTS ARE SIMILA R AS IN AY 1997-98. THE ASSESSEE HAD SHOWN NET AGRICULTURAL INCOME OF R S.2,20,433/-. THOUGH 7/12 EXTRACTS REFLECTED THE CROP AS KAPAS, T HE ASSESSEE PRODUCED SALE BILLS OF SHING & TIL .HOWEVER, THE AO REJECTED THE SIMILAR CONTENTIONS AS WERE RAISED IN THE AY 1997-9 8 AND RESTRICTED THE CLAIM OF AGRICULTURAL INCOME TO RS.44,994/- ON THE BASIS OF SALE BILL DATED 21.5.1997 FOR AN AMOUNT OF RS.74,990/-.T HE REMAINING AMOUNT OF RS. 2,31,439/-WAS ADDED AS INCOME FROM U NDISCLOSED SOURCES. 6.3 LIKEWISE IN THE AY 2001-02, THE ASSESSEE REFLEC TED NET AGRICULTURAL INCOME OF RS.1,71,990/- AFTER REDUCING ESTIMATED EXPENSES OF RS. 44,000/-.TO A QUERY BY THE AO, THE ASSESSEE PRODUCED A COPY OF SALE BILLS DATED 5.12.2000 & 1 6.12.2000, REFLECTING SALE OF KAPAS TO SHRI PADMAVATI DEVI COT TON COMPANY, BOTED, FOR AN AMOUNT OF RS.88,413/- & RS.1,25,574/- RESPECTIVELY. BESIDES THE ACCOUNT OF THE ASSESSEE REVEALED AN AMO UNT OF RS. 2,000/- RECEIVED ON 8.2.2001 FROM BHAYABHAL SANESH, FRO WHICH NO EVIDENCE WAS PRODUCED. ON CLOSER SCRUTINY OF BILLS , THE AO NOTICED THAT BILLS DATED 5.12.2000 & 16.12.2000 WERE ACTUAL LY DATED 17.12.1994 AND THE DATE HAD BEEN ERASED AND OVERWR ITTEN. THERE WERE NO SIGNATURES ON THESE BILLS. TO A QUERY BY TH E AO, THE ASSESSEE EXPLAINED THAT THIS OVERWRITING WAS DUE TO SLIP OF PEN. SINCE THE ASSESSEE DID SIMILAR MANIPULATION IN THE AY 1996-97 ALSO, THE AO REJECTED THE CONTENTIONS OF THE ASSESSEE AND BROUGHT THE ENTIRE AMOUNT OF RS. 2,15,987/- TO TAX AS INCOME FR OM UNDISCLOSED SOURCES. ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 10 7. ON APPEAL IN THE AY 1996-97, THE LEARNED CIT(A) SUSTAINED THE ADDITION OF RS.1,15,938/- AND DELETED THE REMAINING AMOUNT IN THE FOLLOWING TERMS:- 6.1 DURING THE COURSE OF APPELLATE PROCEEDINGS, IT IS SUBMITTED THAT:- THE APPELLANT IS AN AGRICULTURIST HAVING 10 VIGHAS . IN THIS CONNECTION REFERENCE IS INVITED TO LETTER DATED 26-02-2004 AND 25-03-2004 (COPIES FOR READY REFERENCE PAGE 1 TO 15 OF THE PAPER BOOK). AS REGARDS THE BILL ISSUED BY THE PURCHASER OF AGRI CULTURAL PRODUCE ARE PRINTED BILL HAVING THE DETAILS OF NAME AND ADDRESS OF THE PURCHASER THE SAME ARE ALSO HAVING OFFICE AND RESIDENCE TELEPHONE NO. & G. S. T. AND C.S. NO. ETC. UNDER THE CIRCUMSTANCES THESE BILLS I TSELF PROVES THE IDENTIFICATION OF THE PURCHASER. THE LEARNED INCOME TAX OFFICER COULD HAVE VERIFIED THESE BILLS VERY EASILY, BUT UNFORTUNATELY IT WAS NOT DONE. FURTHER, IF THE BILLS WERE NOT SIGNED BY THE PURCHASER IT IS A VERY TECHNICAL & MINOR MISTAKE ON THE PART PURCHASER NOT ON PART OF APPELL ANT. ACCORDINGLY A MINOR TECHNICAL MISTAKE CANNOT BE THE CAUSE OF ADDITION O F THE WHOLE OF AGRICULTURAL INCOME AS MY INCOME OTHER THAN AGRICUL TURAL INCOME. AS REGARDS THE PRODUCT MENTION IN THE BILLS AS WELL AS REVENUE UTARA ARE CONCERNED IT IS SUBMITTED THAT MYSELF, MY FATHER, M Y HUF AND MY WHOLE FAMILY ARE AGRICULTURIST SINCE LONG. I AM HAVING IN COME FROM AGRICULTURAL FROM MY AGRICULTURAL LAND & ALSO HAVING THE AGRICUL TURAL INCOME ON THE SALE AGRICULTURAL PRODUCTS PRODUCE BY US AS 'BHAGIA'. AC CORDINGLY, THESE QUESTION OF DIRECT CONNECTION OF THE PRODUCTS MENTI ON IN MY BILL WITH THE 7/12 UTARA DOES NOT ARISE. THESE FACTS WERE BEFORE THE ASSESSING OFFICER BUT THE SAME WERE NOT TAKEN INTO CONSIDERATION. FURTHER IT IS ROUTINE PRACTICE OF ALL AGRICULTURIST TO KEEP THE GOODS OR WHOLE THE PRODUCTS TO GET BETTER PRIZES FROM THE MARKET. ACCORDINGLY, ONE CAN NOT TALLY YEAR WISE AGRICULTURAL PRODUCTS WITH YEAR WIS E REVENUE RECORDS, UNDER THE CIRCUMSTANCES, YOUR HONOUR THE REQUEST TO DELET E THE MADE ON THOSE BASIS. THE APPELLANT HAS DECLARED THE AGRICULTURAL INCOME FOR THE PURPOSE OF DETERMINING THE RATE OF TAX. THE AGRICULTURAL INCOM E HAS NOT BEEN DEPOSITED IN ANY BANK ACCOUNT. THE AGRICULTURAL INC OME WAS DECLARED AT RS.1,75,938/-ES UNDER:- SALE PROCEEDS RS.2,20,938/- LESS: EXPENSES ESTIMATED RS. 45,000/- ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 11 ---------------- BALANCE RS.1,75.938/- THE AGRICULTURAL INCOME HAS BEEN ACCEPTED IN ALL TH E SUBSEQUENT ASSESSMENT YEARS. THE ADDITION IN THE SUBSEQUENT AS SESSMENT YEARS ARE ON THE BASIS OF ESTIMATED EXPENDITURE AND NOT ON TH E BASIS OF THE SALE PROCEEDS OF THE AGRICULTURAL PRODUCT. THE APPELLANT HAD AGRICULTURAL INCOME DURING THE AC COUNTING PERIOD. IT IS AN EXEMPTED INCOME. HOWEVER, IT WAS TO BE DECLARED FOR THE PURPOSE OF DETERMINING FOR THE RATE. AS MENTIONED HEREIN ABOVE THE AGRICULTURAL INCOME HAS NOT BEEN CREDITED IN ANY BANK ACCOUNT. WHILE PREPARING THE RETURN THERE WAS MERELY A GENUI NE MISTAKE, WHICH WAS UNINTENTIONAL. PROVISIONS OF SECTION 69, 69A, 69B ARE NOT APPLICABLE WHERE THE AGRICULTURAL INCOME HAS NOT BEEN CREDITED IN BA NK ACCOUNT. IN THE SUBSEQUENT ASSESSMENT YEARS THE ACCEPTED AGRICULTUR AL INCOME AS UNDER:- ASSESSMENT YEAR INCOME SHOWN OF. INCOME ACCEPTED BY RS. THE ASSESSING OFFICER --------------------------------------------------- ------------------- 1997-98 2,04,113/- 43.650/- 1998-99 2,76.433/- 44,994/- 1999-00 2,25,570/- 1,33,570/- 2000-01 2,63,441/- 1,73,109/- 2001-02 2,15.987/- NIL THE APPELLANT SUBMITS THAT THE ADDITION OF RS.2,20, 938/- AS INCOME OF THE APPELLANT AND TAXABLE DURING THE ACCOUNTING PERIOD IS NEITHER JUSTIFIED IN LAW NOR JUSTIFIED ON FACTS. IF MAY KINDLY BE DELETE D.' ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 12 6.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE. I HAVE ALSO GIVEN DUE THOUGHT TO THE WRITTEN SUBMISSION OF THE APPELL ANT. IT IS A FACT THAT A SALE VOUCHER PRODUCED TO PROVE THE AGRICULTURE INCO ME WAS NOT FOUND TO BE RELEVANT TO THE YEAR UNDER CONSIDERATION. FURTHER, SAID SALE VOUCHER WAS FOUND UNSIGNED. ON INQUIRY FROM THE CONCERNED PARTY , THE ASSESSING OFFICER FOUND THAT THE ORIGINAL BILL ISSUED BY M/S. AMBICA COTTON COMPANY, IDAR, DISTT. SABARKANTHA WAS DATED 18.12.1993. THER EFORE, THE ASSESSING OFFICER HAS TREATED WHOLE AGRICULTURE INCOME AS NOT GENUINE. HOWEVER, THE ASSESSING OFFICER HAS NOWHERE DOUBTED THAT THE ASSE SSEE POSSESSES 10 BIGHAS OF AGRICULTURE LAND AND HAS BEEN CARRYING OU T AGRICULTURE ACTIVITIES SINCE LONG. NO INQUIRY APPEARS TO HAVE BEEN MADE TO ASCERTAIN THE GENUINE AGRICULTURE INCOME OF THE ASSESSEE. THOUGH THE SALE VOUCHER DOES NOT PERTAIN TO THIS YEAR, BUT THAT DOES NOT ME AN THAT THE ASSESSEE DOES NOT HAVE ANY AGRICULTURE INCOME. IT IS PROVED FROM THE ASSESSING OFFICER'S INQUIRY THAT THE ASSESSEE HAS AGRICULTURE INCOME IN PRECEDING YEAR. AGRICULTURE INCOME, IF ANY, CANNOT BE IGNORED ONLY ON THE GROUND THAT THE SALE VOUCHER DOES NOT PERTAIN TO THIS YEAR. THE ASSESSEE HAD PRODUCED FORM NO.7/12 TO PROVE THE POSSESSION OF AGRICULTURE LAND BEFORE THE ASSESSING OFFICER. WITHOUT MAKING INQUIRY FOR AGRIC ULTURE ACTIVITIES CARRIED OUT BY THE ASSESSEE, E CONCLUSION DRAWN BY THE ASSE SSING OFFICER APPEARS TO BE NOT CORRECT. THE ASSESSEE OWNED 10 BIGHAS OF LAND AND IT IS STATED TO BE FERTILE AND WELL IRRIGATED. PARTICULARLY IN SAUR ASHTRA AREA, GROSS INCOME FROM AGRICULTURE ACTIVITIES IS STATED TO VARY FROM RS.15,000/- TO RS.20,000/- PER BIGHA, WHILE CULTIVATION EXPENDITURE INVOLVED I S STATED TO BE ABOUT 40% OF GROSS AGRICULTURE RECEIPTS. WITH THIS BACKGROUND , THE GROSS AGRICULTURE INCOME OF THE APPELLANT FROM AGRICULTURAL HOLDINGS IS ESTIMATED AT RS.1,75,000/- AT THE AVERAGE RATE OF RS.17,500/- PE R BIGHA. ESTIMATED EXPENDITURE AT THE RATE OF 40% OF GROSS AGRICULTURE RECEIPTS COMES TO RS.70,000/-. THUS NET AGRICULTURAL INCOME SHOULD BE RS.L,05,000/-(L,75,000 - 70,000) FROM TOTAL AGRICULTURAL LAND HOLDINGS. IN VIEW OF THIS, THE ASSESSING OFFICER IS DIRECTED TO ALLOW CREDIT OF AG RICULTURE INCOME TO THE EXTENT OF RS.1,05,000/- AND DIFFERENCE OF RS.1,15,9 38/-(RS.2,20,938 - 1,05,000) MAY BE TREATED AS INCOME FROM UNDISCLOSED SOURCES. THUS, THE ADDITION TO THE EXTENT OF RS.1,15,938/- IS SUSTAINE D AND BALANCE OF RS.L,05,000/- IS DELETED. 7.1 IN THE LIGHT OF HIS AFORESAID FINDINGS IN THE AY 1996-97, THE LD. CIT(A) ACCEPTED THE NET AGRICULTURAL INCOME OF RS. 1,05,000/- IN THE AYS 1997-98 & 1998-99 AND SUSTAINED THE ADDITIO N OF RS.29,130/- & RS.1,01,433/- RESPECTIVELY. IN THE A Y 2001-02 ALSO, THE LD. CIT(A) ACCEPTED THE NET AGRICULTURAL INCOME OF RS.1 ,08,000/- AND SUSTAINED THE REMAINING ADDITION OF RS.35,987/-. ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 13 8. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A) IN SUSTAINING THE ADDITI ONS IN THE AFORESAID FOUR ASSESSMENT YEARS WHILE THE REVENUE IS IN APPEA L IN THE AY 1997-98 AGAINST THE FINDINGS OF THE LD. CIT(A),DELETING THE ADDITIO N OF RS.1,31,333/-. THE LD. AR ON BEHALF OF THE ASSESSEE WHILE INVITING OUR ATTENTION TO PAGE 52-53 OF THE PAPER BOOK SUBMITTED THAT APART FROM 10 BIGHAS OF OWN LAN D , THE ASSESSEES FATHER HAD 15 BIGHAS OF LAND BESIDES 19 BIGHAS OF BHAGIA LAND . THEREFORE, A REASONABLE ESTIMATE OF AGRICULTURAL INCOME BE MADE. ON THE OTH ER HAND, THE LD. DR SUPPORTED THE FINDINGS OF THE AO. 9. WE HAVE HEARD BOTH THE PARTIES AND GONE THR OUGH THE FACTS OF THE CASE. THOUGH THE LD. AR ON BEHALF OF THE ASSESS EE SUBMITTED BEFORE US THAT APART FROM 10 BIGHAS OF OWN LAND , T HE ASSESSEES FATHER HAD 15 BIGHAS OF LAND BESIDES 19 BIGHAS OF BHAGIA LAND, THE RELEVANT DETAILS OF CROPS GROWN ON SUCH BHAGIA LAND OR LAND BELONGING TO FATH ER AND WHETHER THE ASSESSEE HAD INCURRED ANY EXPENSES IN CULTIVATING THESE LAN DS OR EVEN THE DETAILS OF AGRICULTURAL INCOME OR DETAILS OF PARTIES TO WHOM A GRICULTURAL PRODUCE WAS SOLD, HAS NOT BEEN PLACED BEFORE US NOR ANY SUCH DETAILS SEEM TO HAVE BEEN PLACED BEFORE THE AO OR THE LD. CIT(A). EVEN WHEN CERTAIN BILLS WERE PRODUCED BEFORE THE AO IN THE AY 1996-97 AND 2001-02, DATES ON THESE WE RE FOUND TO BE INTERPOLATED. THE ASSESSEE CHANGED THE DATES ON THE BILLS OF THE EARLIER YEARS AND TRIED TO SHOW THAT THESE BILLS RELATED TO THESE TWO ASSESSMENT YEARS. DESPITE OBSERVATIONS OF THE AO, THE LD. CIT(A) DID NOT RE CORD HIS SPECIFIC FINDINGS ON THESE INTERPOLATIONS. THE ASSESSEE ALSO DID NOT FU RNISH DETAILS OF ANY EXPENDITURE ON CULTIVATION OF LAND AND INSTEAD ATTRIBUTED 20% O F THE GROSS RECEIPTS AS EXPENDITURE WHILE DISCLOSING AGRICULTURAL INCOME IN HIS RETURNS FOR THESE ASSESSMENT YEARS. IN THESE CIRCUMSTANCES, ESPECIALL Y WHEN NEITHER COMPLETE DETAILS OF AGRICULTURAL RECEIPTS OR EXPENDITURE WER E AVAILABLE ON RECORD WHILE THE ASSESSEE OWNED 10 BIGHAS OF FERTILE AND IRRIGATED L AND, THE LD. CIT(A) ESTIMATED THE AGRICULTURAL INCOME AND ATTRIBUTED 40% OF THE GROSS RECEIPTS TOWARDS EXPENDITURE AND SUSTAINED THE REMAINING ADDITION. BEFORE US, APART FROM STATING THAT ASSESSEES FATHER HAD 15 BIGHAS OF LAND AND 19 BIGHAS WAS BHAGIA LAND, NOT ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 14 AN IOTA OF EVIDENCE EITHER REGARDING EXPENDITURE IN CURRED TOWARDS CULTIVATION OF LAND OR THE NATURE OF CROPS GROWN AND TO WHOM SUCH CROPS WERE SOLD OR EVEN DETAILS OF RECEIPTS ATTRIBUTED TO AGRICULTURE WERE PLACED NOR THESE DETAILS SEEM TO HAVE BEEN PLACED BEFORE THE LOWER AUTHORITIES. T HE ONUS IS ON THE ASSESSEE, CLAIMING A PARTICULAR RECEIPT AS AGRICULTURAL INCOM E TO ESTABLISH THE CLAIM WITH PROPER EVIDENCE. THE ASSESSEE DID NOT SUBSTANTIATE THE CLAIM WITH ANY EVIDENCE WHATSOEVER EITHER BEFORE LOWER AUTHORITIES AND EVEN BEFORE US. IN THESE CIRCUMSTANCES, ESPECIALLY WHEN THERE IS NO MATERIAL BEFORE US SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER WHILE UNDISP UTEDLY,THE ASSESSEE MISLED THE AO BY CHANGING DATES ON BILLS RELATING TO SALE OF A GRICULTURAL PRODUCE IN THE EARLIER YEARS, WE ARE NOT INCLINED TO INTERFERE WITH THE A PPROACH OF THE LD. CIT(A) IN ESTIMATING THE NET AGRICULTURAL INCOME AND SUSTAINI NG THE ADDITION IN ANY OF THESE FOUR ASSESSMENT YEARS. THEREFORE, GROUND NO.2 IN TH E APPEALS OF THE ASSESSEE FOR THE AY 1996-97 & 2001-02 AS ALSO GROUN D NO. 3 IN THEIR APPEALS FOR THE AY 1997-98 & 1998-99 AND GROUND NO. 3 IN THE APPEAL OF THE REVENUE FOR THE AY 2001-02, ARE DISMI SSED. 10. GROUND NO.3 IN THE APPEAL OF THE ASSESSEE F OR THE AY 1996- 97 RELATES TO ENHANCEMENT OF INCOME BY RS.2,30,000/ -. THE LEARNED CIT(A) WHILE ADJUDICATING THE APPEAL OF THE ASSESSE E FOR THE AY 2000-01 IN RESPECT OF AN ADDITION OF RS.2,63,120/- U/S 69C OF THE ACT ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF AN OPEN LAND, SUSTAINED THE ADDITION TO THE EXTENT OF RS.33,120/ - AND DELETED THE REMAINING AMOUNT OF RS.2,30,000/- ON THE GROUND TH AT INVESTMENT WAS MADE DURING FINANCIAL YEAR 1995-96 RELEVANT TO ASSESSMENT YEAR 1996-97. THE LEARNED CIT(A) NOTICED THAT DURIN G THE COURSE OF SURVEY CONDUCTED U/S 133A OF THE ACT ON 21-1-2003 IN THE BUSINESS PREMISES OF M/S. SHIVANI ENTERPRISE, A DOCUMENT IN THE FORM OF PURCHASE DEED DRAWN ON 30-9-1999, INVENTORISED AT P AGE NO.46 OF ANN.X-5, REVEALED PAYMENT OF RS.2,30,000/- BY THE A SSESSEE AS UNDER.- ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 15 'AMT. DESCRIPTION ------------- -------------------------- RS.46,000/- CHEQUE BEARING NO. 905 453 DT.26.6.95 DRAWN ON BHAVNAGAR DISTRICT CO-OP.BANK, BHAVNAGAR. RS.46,000/- CHQUE BEARING NO.905454 DT.26.6.95 DRAWN ON BHAVNAGAR DISTRICT CO- OP.BANK, BHAVNAGAR. RS.46,000/- CHEQUE BEARING NO.905 455 DT. 27.6.95 DRAWN ON BHAVNAGAR DISTRICT CO-OP.BANK, BHAVNAGAR. RS.47,000/- CHEQUE 'BEARING NO.905456 DT. 29.6.95 DRAWN ON BHAVNAGAR DISTRICT CO-OP.BANK, BHAVNAGAR RS.45,000/- CHEQUE BEARING NO,2179776 DT. RS.2,30,000/- 26.6.95 DRAWN ON STATE BANK O F SAURASHTRA, BHAVNAGAR. 10.1 SINCE THE INVESTMENT WAS MADE IN THE PERIOD R ELEVANT TO THE AY 1996-97 AND THE EXPLANATION OF THE ASSESSEE WAS NOT FOUND SATISFACTORY, THE LD. CIT(A) SHOWCAUSED THE ASSESS EE VIDE HIS LETTER DATED 28-11-2005 AS TO WHY THE SAID INVESTMENT BE NOT TREATED AS DEEMED INCOME FOR ASSESSMENT YEAR 1996-97. IN REPLY , THE ASSESSEE EXPLAINED IN HIS WRITTEN SUBMISSION DATED 29.11.2005 THAT THE SAID INVESTMENT WAS MADE OUT OF AGRICULTURAL IN COME AND OTHER INCOME ,IN ADDITION TO THE ACCUMULATED FUND OF THE EARLIER YEARS, DEPOSITED IN HIS BANK A/C. THEREFORE, IT WAS PLEADE D THAT NO ADDITION SHOULD BE MADE. HOWEVER, THE LD. CIT(A) ADDED THE AMOUNT IN THE FOLLOWING TERMS: I HAVE CAREFULLY CONSIDERED THE WRITTEN SUBMISSIO N OF THE APPELLANT. I HAVE GONE THROUGH THE ASSESSMENT ORDERS OF ASSESSMENT YEARS 1 996-97 AS WELL AS 2000- 01. THE STAMP PAPERS WERE PURCHASED ON 27-9-1999 AN D PURCHASE DEED WAS PREPARED ON 30.9.1999. HAVING NOT BEEN SATISFIED WI TH THE EXPLANATION OF THE ASSESSEE, THE ASSESSING OFFICER MADE AN ADDITION OF RS.2,63,120/-IN ASSESSMENT YEAR 2000-01 BUT HE FAILED TO APPRECIATE THAT THE I NVESTMENT IN SAID OPEN LAND WAS MADE IN F.Y.1995-96 RELEVANT TO ASSESSMENT YEAR 1996-97 AND ACCORDINGLY, IN VIEW OF LEGAL POSITION, ADDITION FOR UNEXPLAINED INVESTMENT WAS TO BE MADE IN ASSESSMENT YEAR 1996-97 INSTEAD OF ASSESSMENT YEAR 2000-01. THE APPEALS FOR BOTH THESE YEARS ARE BEFORE ME AND IN VIEW OF THE D ECISION OF HON'BLE PATNA HIGH COURT IN THE CASE OF CIT VS. CM. RAJGARIA REPORTED IN 121 ITR 778, CIT(A) IS COMPETENT U/S 251 TO DECIDE THE YEAR IN WHICH THIS UNEXPLAINED INVESTMENT IS ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 16 LIABLE TO BE ASSESSED. THE LAW IS CLEAR THAT WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR THE ASSES SEE HAS MADE INVESTMENTS WHICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME AND THE ASSESSEE OFFER S NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE INVESTMENTS OR THE EXPLANA TION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. IN THE PRESENT CASE, PAYMENT OF RS.2,30,000/- WAS MADE IN F.Y.1995-96, RELEVANT TO ASSESSMENT YEAR 1996-97. THE EXPLANATION OFFERED BY THE APPELLANT IS OF A GENERAL IN NATURE AND NOT SUPPORTED BY ANY AUTHENTI C DOCUMENTARY EVIDENCE. THUS, INVESTMENT OF RS.2,30,000/- MADE IN OPEN LAND DURING F.Y.1995-96 RELEVANT TO ASSESSMENT YEAR 1996-97, REMAINED UNEXP LAINED, IN VIEW OF THE PROVISIONS OF SECTION 69 OF THE INCOME TAX ACT, SAI D INVESTMENT IS TREATED AS DEEMED INCOME OF THE APPELLANT FOR ASSESSMENT YEAR 1996-97 AND ACCORDINGLY, INCOME TO THAT EXTENT IS ENHANCED. 11. IN THE AY 1997-98, THE ASSESSEE RAISED GRO UND NO.2 IN RESPECT OF AN ADDITION OF RS.1,27,500 ON ACCOUNT OF UNEXPLAINED CAPITAL. THE AO ADDED THE SAID AMOUNT BROUGHT IN T OWARDS CAPITAL IN A PARTNERSHIP FIRM NAMELY, M/S EVEREST CONSTRUCTION CO. SINCE THE ASSESSEE DID NOT EXPLAIN THE SOURCE OF SUCH AMOUNTS . ON APPEAL, THE LEARNED CIT(A) SUSTAINED THE ADDITION WITH THE FOLLOWING OBSERVATIONS: 4.1 DURING THE COURSE OF APPELLATE PROCEE DINGS, THE AUTHORIZED REPRESENTATIVE SUBMITTED THAT-THE AMOUNT OF RS.1,27 ,500/- WAS INTRODUCED BY THE APPELLANT IN THE EARLIER YEARS AND NOT IN TH IS ACCOUNTING PERIOD. COPY OF ACCOUNT OF THE APPELLANT FILED BEFORE THE ASSESS ING OFFICER SHOWS THAT RS.1,27,500/- WAS OLD BALANCE AND NO FRESH CAPITAL WAS INTRODUCED BY THE APPELLANT DURING THE RELEVANT ACCOUNTING PERIOD. CO PY OF THE ACCOUNT FROM M/S. EVEREST CONSTRUCTION CO. WAS FILED. 4.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE. I HAVE ALSO PERUSED THE FACTS BROUGHT ON RECORD IN THE ASSESSME NT ORDER BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS MENTIO NED THAT THE EXPLANATION PUT FORTH BY THE ASSESSEE WAS NOT FOUND CONVINCING AND ACCEPTABLE BECAUSE IT WAS GENERAL IN NATURE AND NO SPECIFIC INSTANCE WAS BROUGHT OUT OF WHICH SOURCE THE SAID INVESTMENT IN QUESTION WAS MADE. NO BOOKS OF ACCOUNT WERE MAINTAINED BY THE ASSESSEE. F URTHER, THE BOOKS OF ACCOUNT EXPLAINED TO HAVE BEEN MAINTAINED BY THE FI RM I.E. M/S. EVEREST CONSTRUCTION CO. WERE ALSO NOT PRODUCED FOR VERIF ICATION. THE BURDEN LIES ON THE ASSESSEE TO PROVE THAT CAPITAL WAS INTR ODUCED IN M/S. EVEREST CONSTRUCTION CO. IN PRECEDING YEAR. IN FACT, M/S. E VEREST CONSTRUCTION CO. CAME INTO EXISTENCE ON 18/3/1995 AS IS SEEN FROM TH E PARTNERSHIP DEED PRODUCED DURING THE COURSE OF APPELLATE PROCEEDINGS . IT IS SEEN FROM THE ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 17 SAID PARTNERSHIP DEED THAT DURING THE F.Y. 1995-96 RELEVANT TO ASSESSMENT YEAR 1996-97 THE PARTNERSHIP FIRM HAS CARRIED OUT BUSINESS ACTIVITIES FOR ONLY 13 DAYS. AS PER PARA 5 OF THE PARTNERSHIP DEED, IT S MENTIONED THAT CAPITAL WILL BE INTRODUCED AS AND WHEN IT IS R EQUIRED AND FOR THAT CAPITAL, INTEREST AT THE RATE OF 18% WILL BE PAID. DURING THIS SHORT PERIOD NO BUSINESS APPEARS TO HAVE BEEN CARRIED OUT. NO BOOK S OF ACCOUNT WERE PRODUCED TO PROVE THAT CAPITAL WAS INTRODUCED DURIN G THE FIRST FINANCIAL YEAR RELEVANT ASSESSMENT YEAR 1996-97, WHICH WAS ON LY OF 13 DAYS. THE ASSESSING OFFICER HAD NO ALTERNATIVE BUT TO HOLD TH AT ALL THE BUSINESS ACTIVITIES WERE CARRIED OUT DURING THE FINANCIAL YE AR RELEVANT TO ASSESSMENT YEAR 1997-98 AND CAPITAL WAS ALSO INTRODUCED DURING THAT PERIOD. THE APPELLANT HAD NOT PRODUCED ANY AUTHENTIC EVIDENCE B EFORE ME TO REBUT THE FACTS DISCUSSED BY THE ASSESSING OFFICER IN THE ASS ESSMENT ORDER. THE APPELLANT WAS ASKED TO PROVE WHEN THE CAPITAL WAS I NTRODUCED BUT NO AUTHENTIC DOCUMENTARY EVIDENCE WAS PRODUCED EXCEPT A COPY OF ACCOUNT OF THE ASSESSEE STATED TO BE MAINTAINED IN THE BOOK S OF M/S. EVEREST CONSTRUCTION CO. IN THE ABSENCE OF BOOKS OF ACCOUNT , THE ALLEGED COPY OF ACCOUNT REMAINED UNVERIFIED. THE COPY OF THE ACCOUN T CANNOT SAID TO BE AUTHENTIC EVIDENCE. THE ASSESSEE FAILED TO DISCHARG E HIS ONUS TO PROVE THE SOURCE OF INTRODUCTION OF CAPITAL. IN RESPECT OF C APITAL CONTRIBUTED BY PARTNERS, THE HON'BLE ALLAHABAD HIGH COURT HAS HELD THAT 'THE ONUS TO PROVE THE SAME IS ON THE PARTNERS TO EXPLAIN THE SO URCE, AND IF THEY FAILED TO DO SO, THE AMOUNT COULD BE ADDED AS UNDISCLOSED SOURCES IN THE HANDS OF THE PARTNERS ONLY'. (INDIA RICE MILLS VS. CIT) [218 ITR 508] (ALL.). THEREFORE, ACTION OF THE ASSESSING OFFICER FOR TREA TING IT AS UNEXPLAINED INVESTMENT IN CAPITAL OR OF THE PARTNERSHIP FIRM IS FOUND TO BE CORRECT IN THE EYES OF LAW. ADDITION ON THIS ACCOUNT IS SUSTAINE D. 12.. GROUND NO.4 IN THE APPEAL OF THE ASSESSEE FOR THE A 1997-98 RELATES TO ENHANCEMENT OF INCOME BY RS.73,775/- AS UNEXPLAINED INVESTMENT MADE DURING THE YEAR WHILE GROUND NO.4 I N THE APPEAL OF THE REVENUE RELATES TO DELETION OF ADDITION OF RS.6 ,21,190. THE LD. CIT(A) NOTICED THAT DURING THE COURSE OF SURVEY IN THE PREMISES OF M/S. SHIVANI ENTERPRISES, A DOCUMENT IN THE FORM OF PURCHASE DEED INVENTORISED AT PAGE NO. 26 TO 42 OF ANNEXURE A-8 REVEALED THAT THE ASSESSEE HAD PURCHASED A PIECE OF LAND ADMEASURING 325 YDS. AT KRISHNA NAGAR RUPANI CIRCLE, BHAVNAGAR, FOR AN AMOU NT OF RS.6,21,190/-. SINCE THE SOURCE OF INVESTMENT WAS N OT SATISFACTORILY EXPLAINED BY THE ASSESSEE, THE AO ADDED THE AMOUNT OF RS.6,21,190/- AS UNEXPLAINED INVESTMENT U/S 69C OF THE ACT. ON APPEAL, THE LEARNED CIT(A) DELETED THE ADDITION OF RS.6,21,190 WHILE ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 18 SUSTAINING THE ADDITION OF RS.73,775/- WITH THE FOL LOWING OBSERVATIONS: 7.1 DURING THE COURSE OF APPELLATE PROCEEDINGS, TH E APPELLANT HAS SUBMITTED THAT:- 'THE APPELLANT HAD PURCHASED A RESIDENTIAL PLOT OF LAND AND MADE THE PAYMENT IN 1993-94. A COPY OF REGISTERED PURCHASE D EED IS ENCLOSED FOR READY REFERENCE. THE PAYMENTS HAVE BEEN MADE BY CHE QUE IN 1993 AS SHOWN AT PAGE NO.7 OF THE REGISTERED PURCHASE DEED. (COPY OF SAID PURCHASE DEED PAGE 17 TO 34 OF THE PAPER BOOK). THE PAYMENTS ARE AS UNDER: 1. RS.1,20,000/- CHEQUE NO.66170 DATED 5.8.1993 2. RS.4,00,000/- CHEQUE NO.80817 DATED 3.12.93 3. RS.1,01,190/- CHEQUE NO.5624875 DATED 4.1.94 IN THIS CONNECTION REFERENCE IS INVITED TO APPELLAN T'S LETTER DATED 26-2-2004, PAGE NO.8 (COPY ENCLOSED FOR READY REFERENCE PAGE-3 5 TO 45 OF THE PAPER BOOK) REFERENCE IS ALSO INVITED TO LETTER DATED 25-03-200 4 PARA-7 OF THE LETTER (COPY ENCLOSED FOR READY REFERENCE PAGE 1 TO 6 OF T HE PAPER BOOK). NO INVESTMENT HAS BEEN MADE BY THE APPELLANT DURING TH E ACCOUNTING PERIOD. THE ASSESSING OFFICER HAS MADE THE ADDITION ON THE GROUND THAT THE REGISTERED PURCHASE DEED HAS BEEN EXECUTED DURING T HE ACCOUNTING PERIOD AND THEREFORE THE INVESTMENT IS MADE IN THE ACCOUNT ING PERIOD. THE CONCLUSION OF THE ASSESSING OFFICER IS OBVIOUSL Y INCORRECT. THE PAYMENTS HAVE BEEN MADE CHEQUE IN FINANCIAL YEAR 19 93-94 THE AMOUNT OF RS.6,21,190/- IS EXACTLY THE SAME AMOUNT WHICH H AS BEEN PAID BY THREE CHEQUES IN THE FINANCIAL YEAR 1993-94. IF THE QUESTION OF THE INVESTMENT OF RS.6,21,190/- IS TAKEN INTO CONSIDERATION THE SOURCE OF THE SAID AMOUNT HAS ALS O BEEN CLEARLY PROVED AS INDICATED BY BANK ACCOUNTS BY PAYMENT OF THE AMO UNT BY CHEQUE. NO EXPENDITURE HAS BEEN INCURRED DURING THE ACCOUNTING PERIOD. UNDER PROVISION OF SECTION 69C AN ADDITION CAN BE M ADE ON ACCOUNT OF ANY EXPENDITURE FOR WHICH THE ASSESSEE OFFERS NO EXPLAN ATION OR THE EXPLANATION OFFERED BY HIM IS NOT SATISFACTORY. THE APPELLANT HAS NOT ONLY GIVEN THE EXPLANATION BU T THE EXPLANATION IS ALSO SUPPORTED BY THE DOCUMENT, WHICH CLEARLY INDIC ATES THAT THE PAYMENT WAS MADE AND ALSO CLEARLY INDICATES THE MODE OF PAY MENT BY CHEQUE. THE ADDITION IS NOT JUSTIFIED ON FACTS NOR JUSTIFIED IN LAW.' ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 19 7.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE. I HAVE VERIFIED THE IMPOUNDED PURCHASE DEED ON THE BASIS OF WHICH THE A SSESSING OFFICER MADE ADDITION. I HAVE ALSO GIVEN DUE THOUGHT TO THE WRITTEN SUBMISSION AS WELL AS ORAL ARGUMENT MADE BY THE AUTHORIZED REPRES ENTATIVES. IT IS EVIDENT FROM THE PURCHASE DEED THAT THE APPELLANT H AD PURCHASED A LEASEHOLD PLOT NO.L497/A/L/B&C FROM SHRI PRAGJIBHAI RATHOD AT THE COST OF RS.6,21,190/-. THE PURCHASE DEED WAS GOT PREPARED O N 8-8-1996 AND GOT REGISTERED ON 25-10-1996 THOUGH THE PAYMENT OF PLOT WAS MADE DURING F.Y.1993-94. ON PAGE NO.8 OF THE PURCHASE DEED, PAY MENT MADE WAS SHOWN AS UNDER:- 1. RS.1,20,000/- BY CHEQUE BEARING NO.66170 DATED 5-8-93 OF DENA BANK, BHAVNAGAR. 2. RS.4,00,000/- BY CHEQUE BEARING NO.80817 D ATED 3.12.93 OF DENA BANK, BHAVNAGAR. 3. RS.1,01,190/- BY CHEQUE BEARING NO.56248 75 DATED 4-1-94 DENA BANK, BHAVNAGAR THE EXPLANATION GIVEN FOR ABOVE PAYMENTS BY THE ASS ESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND THE SAME WAS TREATED AS UNEXPLAINED AND AN ADDITION OF RS.6,21,190/- U/S.69 C OF THE INCOME TAX ACT. SECTION 69C SAYS THAT WHERE IN ANY FINANCIAL Y EAR AN ASSESSEE HAS INCURRED ANY EXPENDITURE AND HE OFFERS NO EXPLANATI ON ABOUT THE SOURCE OF SUCH EXPENDITURE OR PART THEREOF OR EXPLANATION IF ANY OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTO RY, THE AMOUNT COVERED BY SUCH EXPENDITURE OR PART THEREOF, AS THE CASE MAY B E, WILL BE DEEMED TO BE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. IN THE INSTANT CASE, THE PAYMENT WAS MADE DURING THE F.Y. 1993-94 WHICH IS R ELEVANT TO ASSESSMENT YEAR 1994-95, HENCE ADDITION TO THE EXTE NT OF RS.6,21,190/- MADE BY THE ASSESSING OFFICER IN ASSESSMENT YEAR 19 97-98 FOR THE PAYMENT MADE IN F.Y.1993-94, IS NOT FOUND TO BE JUS TIFIED AND CORRECT IN THE EYES OF LAW AND ACCORDINGLY, THE SAME IS DELETE D IN THIS YEAR. IN FACT, PAYMENTS MADE FOR PURCHASE OF PLOT IS AN INVESTMENT AND NOT EXPENDITURE. THE CORRECT SECTION FOR UNEXPLAINED INVESTMENT IS S ECTION 69 OF THE INCOME TAX ACT AND NOT SECTION 69C AS HELD BY THE ASSESSIN G OFFICER. HOWEVER, THE APPELLANT HAD INCURRED EXPENSES OF RS.73,775/- FOR PURCHASE OF STAMP AND REGISTRATION OF THE PURCHASE DEED WHICH IS PART AND PARCEL OF THE INVESTMENT, DURING THE FINANCIAL YEAR RELEVANT TO A SSESSMENT YEAR 1997- 98, THEREFORE, THE APPELLANT WAS GIVEN SHOW CAUSE V IDE THIS OFFICE LETTER DATED 25/11/2005 THAT WHY NOT INCOME TO THE EXTENT OF RS.73,775/- MAY BE ENHANCED. THE APPELLANT SUBMITTED A COMMON EXPLANAT ION DATED 29/11/2005 FOR ASSESSMENT YEARS 1996-97 AND 1997-98 IN WHICH HE HAS MORE OR LESS REPEATED THE SAME EXPLANATION WHICH WA S GIVEN BEFORE THE ASSESSING OFFICER DURING THE REGULAR ASSESSMENT PRO CEEDINGS. THE EXPLANATION GIVEN IS OF GENERAL NATURE AND NOT SUPP ORTED BY ANY AUTHENTIC DOCUMENTARY EVIDENCE. THUS, THE SOURCE OF INVESTMEN T OF RS.73,775/- INCURRED DURING FINANCIAL YEAR RELEVANT TO ASSESSME NT YEAR 1997-98 ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 20 REMAINED UNEXPLAINED AND ACCORDING TO THE PROVISION OF SECTION 69 OF THE INCOME TAX ACT, THE SAME IS TREATED AS DEEMED TO BE THE INCOME OF THE APPELLANT FOR ASSESSMENT YEAR 1997-98. IN VIEW OF T HE ABOVE FACTS AND LEGAL POSITION, THE INCOME TO THE EXTENT OF RS.73,7 75/- IS ENHANCED IN ASSESSMENT YEAR 1997-98. THE APPELLANT GETS RELIEF OF RS.6,21,190/- IN THIS YEAR. 13. IN AY 1998-99, GROUND NO.2 IN THE APPEAL OF THE ASSESSEE RELATES TO ADDITION OF RS.12,328/- AS UNEXPLAINED A DVANCE TO FATHER. THOUGH THE ASSESSEE EXPLAINED THAT THE AMOUNT WAS G IVEN OUT OF HIS AGRICULTURAL INCOME, THERE BEING NO EVIDENCE, T HE AO ADDED THE AMOUNT. ON APPEAL, THE LEARNED CIT(A) CONFIRMED T HE ADDITION, HOLDING AS UNDER: 5.1 DURING THE COURSE OF APPELLATE PROCEEDINGS, TH E APPELLANT SUBMITTED WRITTEN EXPLANATION WHEREIN IT IS MENTIONED THAT AS PER CHITHI FOUND DURING THE COURSE OF SURVEY, A SUM OF RS.12,328/- WAS GIVE N BY THE APPELLANT TO HIS FATHER. IN THIS CONNECTION REFERENCE IS INVITED TO LETTER DATED 25.03.2004, PARA 6 PAGE 5 (PAGE 1 TO 10 OF THE PAPER BOOK). THE APPELLANT'S FATHER WAS ALSO HAVING AGRICULTURAL INCOME AND THE ADDITIO N IS NOT JUSTIFIED.' 5.2 I HAVE CAREFULLY CONSIDERED THE WRITTEN SUBMISS ION OF THE APPELLANT. I HAVE ALSO CONSIDERED THE FACTS BROUGHT OUT ON RECOR D BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. IT IS EVIDENT FROM THE PIECE OF PAPER FOUND DURING THE COURSE OF SURVEY THAT AND AN AMOUNT OF R S.12,328/- WAS GIVEN BY THE APPELLANT TO HIS FATHER. THE SOURCE OF THE S AID AMOUNT WAS EXPLAINED TO BE OUT OF AGRICULTURAL INCOME. THE EXPLANATION GIVEN BY THE APPELLANT IS GENERAL IN NATURE AND NOT SUPPORTED BY ANY AUTHENTIC PROOF THAT THE SAID AMOUNT WAS GIVEN OUT OF AGRICULTURAL INCOME. HON'BLE SUPREME COURT HAS HELD IN THE CASE OF KALE KHAN MOH AMMAD HANIF VS. CIT [50 ITR 1] THAT 'THE ONUS OF PROVING THE SOURCE OF A SUM OF MONEY FOUND TO HAVE BEEN RECEIVED BY THE ASSESSEE IS ON H IM. IF HE DISPUTES LIABILITY FOR TAX, IT IS FOR HIM TO SHOW EITHER THA T THE RECEIPT / PAYMENT WAS NOT INCOME OR THAT, IF IT WAS, IT WAS EXEMPT FROM T AXATION UNDER THE PROVISIONS OF THE ACT. IN ABSENCE OF SUCH PROOF, TH E ASSESSING OFFICER IS ENTITLED TO TREAT IT AS TAXABLE INCOME'. IN THE CAS E OF ROSHAN DI HATTI VS.CIT 107 ITR 938), HON'BLE SUPREME COURT HAS HELD THAT W THE LAW IS WELL SETTLED THAT THE ONUS OF PROVING THE SOURCE OF A SU M OF MONEY FOUND TO HAVE BEEN RECEIVED / (PAID) BY AN ASSESSEE IS ON HI M. WHERE THE NATURE AND SOURCE OF A RECEIPT, WHETHER IT BE OF MONEY OR OTHER PROPERTY, CANNOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE, IT IS OPEN TO THE REVENUE TO HOLD THAT IT IS THE INCOME OF THE ASSESSEE AND NO F URTHER BURDEN LIES ON THE REVENUE TO SHOW THAT THE INCOME IS FROM ANY PARTICU LAR SOURCE'. IN THE INSTANT CASE, THE BURDEN LIES ON THE APPELLANT TO P ROVE THE SOURCE OF THE ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 21 AMOUNT OF RS.12,328/-. AS THE APPELLANT FAILED TO P ROVE THE SOURCE OF AMOUNT OF RS.12,328/-, HENCE THE ACTION OF THE ASSE SSING OFFICER IS FOUND TO BE JUSTIFIED AND ACCORDINGLY, ADDITION OF RS.12, 328/-IS CONFIRMED. 14. GROUND NO.4 IN THE APPEAL OF THE ASSESSEE FOR THE AY 1998-99 RELATES TO ADDITION OF RS.10,000/- AS UNEXPLAINED R ECEIPT NOT DISCLOSED. THE AO NOTICED ON SCRUTINY OF PAGE NOS. 89, 90 & 91 OF THE LETTER DATED 17.11.1997 THAT THE ASSESSEE HAD R ECEIVED AMOUNTS OF RS.10,000/-, RS.15,000/- AND RS.5,000/-, WHILE R S.14,187 AND RS.2,935/-WERE SHOWN AS OUTSTANDING. SINCE THE EXPL ANATION GIVEN BY THE ASSESSEE REGARDING SOURCES OF THE SAID AMOUN TS WAS NOT SATISFACTORY, THE AO ADDED THE AMOUNT OF RS.30,000/ - .ON APPEAL, THE LEARNED CIT(A) REDUCED THE ADDITION TO RS.10,00 0/- IN THE FOLLOWING TERMS: 7.1 DURING THE COURSE OF APPELLATE PROCEEDINGS THE APPELLANT SUBMITTED THAT:- AS PER THE ORIGINAL QUERY LETTER THE ASSESSING OFF ICER HAD ASKED ABOUT THE PAGES NO.89,90 & 91 DATED 17/11/1997 BY HIS QUERY N O.32(I), I WOULD LIKE TO DRAW YOUR KIND ATTENTION TO OUR REPLY DTD. 16/01 /04 AND TO THE ANNEX-G AND ANNEX-H (PAGE NOLL TO 13 O THE PAPER BOOK OF TH E SAME ANNEX SHOW THE COMPLETE DETAILS SALES AS WELL AS THE DETAILS O F MY-RETAIL BUSINESS UNDER THE NAME AND STYLE OF 'M/S. ASHISH TRADERS'. AS PER THE RETURN OF INCOME AS I HAD NOT MAINTAINED REGULAR BOOKS OF ACCOUNTS HENCE THE NET PROFIT @ 5% OF THE TOTAL SAL ES WAS DECLARED. THE STATEMENT OF SALES & PURCHASE WAS FILED ALONG WITH THE SUBMISSION DTD. 16/01/04 AS ANNEX-G & H NOS. 89, 90 & 91 OF THE IMP OUNDED MATERIALS (PAGER NO. 11 TO 13 OF THE PAPER BOOK), SHOW THE PU RCHASE AND SALE ENTRY OF THE RETAIL BUSINESS OF YOUR APPELLANT. THE SAME ARE AS UNDER: (1) RS.10,000/- SALES (2) RS.29,187/- SALES (3) RS. 7,935/- PURCHASE BUT THE ASSESSING OFFICER HAD NOT VERIFIED THE FACT S AND JUST ADDED THE FIGURES OF MY GROSS SALES AND GROSS PURCHASE AS MY PROFIT EVEN THOUGH ON THE INCOME ON THE SAME SALES & PURCHASE HAS ALREADY BEEN DECLARED AS PER THE PROVISIONS OF SEC. 44AFOF THE INCOME TAX AC T. ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 22 THE SECOND ENTRY OUT OF THE ABOVE MENTIONED THREE E NTRIES THE ASSESSING OFFICER HAS ASKED FOR RS.15,000/- OF PAGE NO.90 BUT THE SAME PAGE WAS OF THE TOTAL SALES OF RS.29,187/- WHICH HAS BEEN SHOWN IN THE STATEMENT INCLUDING RS.15,000/-. ALL THE FACTS CAN BE VERIFIE D SHOWN THE RECORD IMPOUNDED AND LYING WITH THE DEPARTMENT ITSELF' 7.2 I HAVE VERIFIED THE FACTS OF THE CASE. I HAVE A LSO GIVEN DUE THOUGHT TO THE WRITTEN SUBMISSION OF THE APPELLANT. I HAVE VERIFIED THE IMPOUNDED MATERIAL ON THE BASIS OF WHICH THE ASSESSING OFFICE R MADE ADDITION OF RS.30,000/-. ON PAGE NO.89 OF ANNEXURE X-5, CASH OF RS.10,000/- DATED 17/11/1997 HAS BEEN WRITTEN. ON PAGE NO.90 TOTAL OU TSTANDING BALANCE OF RS.14,187/- HAS BEEN SHOWN ALONG WITH NAMES OF THRE E PERSONS. PAGE NO.91 IS A BILL OF RS.9,735/-. IN SAID BILL, AN ADV ANCE OF RS.5,000/- AGAINST THE BILL AMOUNT OF RS.9,735/- HAS BEEN WRITTEN. THE RE IS NO ENTRY OF RS.15,000/- AS MENTIONED BY THE ASSESSING OFFICER I N THE ASSESSMENT ORDER. FROM PAGE NO.89, NO DESCRIPTION OF ANY SALE OR PURCHASE ITEM IS SEEN. THEREFORE, CASH OF RS.10,000/- REMAINED UNEXP LAINED. IN THE CASE OF A. 6OVIND RAJULU MUDALIAR VS. CIT 34 ITR 807, HON'B LE SUPREME COURT HAS HELD THAT 'THERE IS AMPLE AUTHORITY FOR TH E PROPOSITION THAT WHERE AN ASSESSEE FAILS TO PROVE SATISFACTORILY THE SOURCE A ND NATURE OF CERTAIN AMOUNTS OF CASH RECEIVED DURING THE ACCOUNTING YEAR , THE ASSESSING OFFICER IS ENTITLED TO DRAW THE INFERENCE THAT THE RECEIPTS ARE OF AN ASSESSABLE NATURE.' IN THE CASE OF DI HATTI VS. CIT (107 ITR 938), HON'BLE SUPREME COURT HAS HELD THAT 'THE LAW IS WELT SETTLE D THAT THE ONUS OF PROVING THE SOURCE OF A SUM OF MONEY FOUND TO HAVE BEEN RECEIVED / (PAID) BY AN ASSESSEE IS ON HIM. WHERE THE NATURE AND SOUR CE OF A RECEIPT, WHETHER IT BE OF MONEY OR OTHER PROPERTY, CANNOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE, IT IS OPEN TO THE REVENUE TO HOLD THAT IT IS THE INCOME OF THE ASSESSEE AND NO FURTHER BURDEN LIES ON THE REVE NUE TO SHOW THAT THE INCOME IS FROM ANY PARTICULAR SOURCE'. IN THE INSTA NT CASE, THE ONUS LIES ON THE APPELLANT TO EXPLAIN THE NATURE AND SOURCE OF R S.10,000/- BUT HE FAILED TO DO SO. HENCE, ADDITION TO THE EXTENT OF RS.10,00 0/- IS SUSTAINED. ON PAGE NO.90 TRANSACTION OF 'BEARING' IS WRITTEN WHIC H IS ALSO RELATED TO THE TRADING ACTIVITIES OF THE APPELLANT BUT AS THE INCO ME FROM THE RETAIL TRADING ACTIVITIES OF THE APPELLANT HAS BEEN COMPUTED UNDER THE PROVISIONS OF SECTION 44 AF OF THE INCOME TAX ACT AND THE TRANSAC TIONS MENTIONED ON PAGE 90 AND 91 AT ANNEXURE X-5 ARE APPARENTLY FOUND RELEVANT TO THE TRADING ACTIVITIES AND HENCE NO SEPARATE ADDITION O N THIS ACCOUNT IS REQUIRED. FURTHER, ON PAGE NO.9I, A WITHDRAWAL OF R S.5,000/- HAS BEEN SHOWN WHICH CANNOT BE SAID AS TAXABLE RECEIPTS. THE RE IS NO FIGURE OF RS.15,000/- AS MENTIONED BY THE ASSESSING OFFICER I N THE ASSESSMENT ORDER. IT APPEARS THAT THE ASSESSING OFFICER HAS RO UNDED OF F THE FIGURE OF RS.14,187/- AS WRITTEN ON PAGE NO.90 OF ANNEXURE X- 5. THESE TRANSACTIONS ARE COVERED WHILE COMPUTING THE INCOME U/S.44AF OF THE INCOME TAX ACT AND HENCE NO SEPARATE ADDITION ON ACCOUNT OF THESE TRANSACTIONS IS REQUIRED. HENCE, ADDITION OF RS.5,000/- AND RS.15,0 00/- (14,187) ARE DELETED AND ADDITION TO THE EXTENT OF RS.10,000/- I S SUSTAINED. THE APPELLANT GETS RELIEF OF RS.20.000/-. ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 23 15. GROUND NO.5 IN THE APPEAL OF THE ASSESSEE FOR THE AY 1998-99 RELATES TO ADDITION OF RS.9921/- ON ACCOUNT OF EXP ENSES INCURRED . ON PERUSAL OF BILL INVENTORISED AT PAGE NO.92 OF AN NEXURE X-5 ,FOUND IN THE PREMISES OF M/S. SHIVANI ENTERPRISE, THE AO NOTICED THAT THE ASSESSEE HAD PURCHASED COTTON CLOTHES AND OTHER ITE MS AGGREGATING COST OF RS.9,921/-. SINCE THE ASSESSEE DID NOT EXPL AIN SOURCE OF THE SAID EXPENDITURE, THE AO ADDED THE AMOUNT .ON APPEA L, THE LD. CIT(A) UPHELD THE ADDITION WITH THE FOLLOWING OBSER VATIONS: 8.1 DURING THE COURSE OF APPELLATE PROCEEDINGS THE APPELLANT SUBMITTED THAT' THE ADDITION HAS BEEN MADE ON ACCOUNT OF BILL DATED 24.09.1997 FOR MAKING OF GADLAS. THEE GADLAS WERE MADE FOR SHIVANI ENTERPRISE WHOSE PROPRIETOR IS JAYSHRIBEN PANDYA, THE WIFE OF THE AP PELLANT. THIS AMOUNT HAS BEEN DEBITED IN THE BOOKS OF SHIVANI ENTERPRISE AND THE ADDITION IS NOT JUSTIFIED.' 8.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF T HE APPELLANT. I HAVE ALSO PERUSED THE FACTS, WHICH HAVE BEEN BROUGHT ON RECOR D BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. I HAVE ALSO VERIFI ED THE IMPOUNDED BILL INVENTORISED AT PAGE NO.92 OF ANNEXURE X-5. THIS BI LL IS PREPARED IN THE NAME OF SHRI PRAVINCHANDRA N. PANDYA, THE APPELLANT . THE EXPLANATION OF THE AUTHORISED REPRESENTATIVE OF THE APPELLANT THAT THIS AMOUNT IS DEBITED UNDER THE HEAD 'FURNITURE EXPENSES' IN THE BOOKS OF M/S. SHIVANI ENTERPRISES WAS NOT FOUND CORRECT BECAUSE THE APPEL LANT COULD NOT PRODUCE ANY AUTHENTIC PROOF IN THIS REGARD. THE ONU S LIES ON THE APPELLANT TO PROVE THE SOURCE OF EXPENDITURE INCURRED FOR PUR CHASE OF CUSHION, GADDA, COTTON ETC. AS THE BILL IS IN THE NAME OF TH E APPELLANT, ADDITION TO THE EXTENT OF RS.9,921/- IS CONFIRMED. 16. GROUND NO.2 IN THE APPEAL OF THE ASSESSEE FOR THE AY1999-2000 FOR THE RELATES TO ADDITION OF RS. 2,05,109. DURING THE COURSE OF SURVEY A LOOSE PAPER INVENTORISED AT PAGE NO.60 OF ANNEXURE A-5 REVEALED CASH OF RS.1,85,000/- DEPOSITED ON 14-10-1 998 IN ACCOUNT NO.109 IN THE NAME OF ASHISH TRADERS, MAINTAINED WI TH SIMCO BANK, BHAVNAGAR. FURTHER, A CLEARING CHEQUE OF RS.20,109/ - WAS ALSO DEPOSITED IN SAID BANK ACCOUNT ON 23-9-1998. SINCE THE ASSESSEE DID NOT EXPLAIN SOURCE OF THESE DEPOSITS SATISFACTO RILY, THE AO MADE ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 24 THE ADDITION OF RS.2,05,109/-. ON APPEAL, THE ASSES SEE REITERATED THAT AMOUNTS WERE DEPOSITED OUT OF HIS AGRICULTURAL AND BUSINESS INCOME . THE LEARNED CIT(A) UPHELD THE ADDITION IN THE FOLLOWING TERMS: 7.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSION O THE APPELLANT. I HAVE ALSO PERUSED THE FACTS OF THE CASE WHICH HAVE BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. I HA VE ALSO VERIFIED THE BANK STATEMENT OF SIMCO BANK, BHAVNAGAR. THE APPELL ANT HAD DEPOSITED A CLEARING CHEQUE OF RS.20,109/- ON 23/9/1998 IN CU RRENT ACCOUNT NO.109 MAINTAINED WITH MERCANTILE CO. OP. BANK LTD., SHASH TRINAGAR BRANCH, BHAVNAGAR. HE HAS ALSO DEPOSITED CASH OF RS.1,85,00 0/- ON 14/10/1998 IN THE SAME BANK ACCOUNT. THE EXPLANATION GIVEN BY THE APPELLANT FOR SAID DEPOSITS IS OF GENERAL IN NATURE AND NOT SUPPORTED BY ANY AUTHENTIC EVIDENCE. THE BURDEN LIES ON THE ASSESSEE TO PROVE THE RECEIPTS DEPOSITED IN THE BANK ACCOUNT. HON'BLE SUPREME COUR T HAS HELD IN THE CASE OF A. GOVIND RAJULU MUDALIAR VS. CIT 34 ITR 80 7 THAT 'THERE IS AMPLE AUTHORITY FOR THE PROPOSITION THAT WHERE AN ASSESSE E FAILS TO PROVE SATISFACTORILY THE SOURCE AND NATURE OF CERTAIN AMO UNTS OF CASH RECEIVED DURING THE ACCOUNTING YEAR, THE ASSESSING OFFICER I S ENTITLED TO DRAW THE INFERENCE THAT THE RECEIPTS ARE OF AN ASSESSABLE NA TURE.' IN THE CASE OF KALE KHAN MOHMMAD KHAN REPORTED IN 50 ITR 1, THE HO N'BLE SUPREME COURT HAS HELD THAT 'THE ONUS OF PROVING THE SOURCE OF A SUM OF MONEY FOUND TO HAVE BEEN RECEIVED BY THE ASSESSEE IS ON H IM. IF HE DISPUTES LIABILITY FOR TAX, IT IS FOR HIM TO SHOW EITHER THE RECEIPT WAS NOT INCOME OR THAT IF IT WAS, IT WAS EXEMPT FROM TAXATION UNDER T HE PROVISION OF THE ACT. IN ABSENCE OF SUCH PROOF, THE ASSESSING OFFICER IS ENT ITLED TO TREAT IT AS A TAXABLE INCOME.' IN THE CASE OF ROSHAN DI HATTI VS. CIT (107 ITR 938), HON'BLE SUPREME COURT HAS HELD THAT' THE LAW IS WEL L SETTLED THAT THE ONUS OF PROVING THE SOURCE OF A SUM OF MONEY FOUND TO HA VE BEEN RECEIVED / (PAID) BY AN ASSESSEE IS ON HIM. WHERE THE NATURE A ND SOURCE OF A RECEIPT, WHETHER IT BE OF MONEY OR OTHER PROPERTY, CANNOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE, IT IS OPEN TO THE REVENUE TO HOLD THAT IT IS THE INCOME OF THE ASSESSEE AND NO FURTHER BURDEN LIES ON THE REVE NUE TO SHOW THAT THE INCOME IS FROM ANY PARTICULAR SOURCE'. IN THE INSTA NT CASE, THE APPELLANT HAS DEPOSITED CASH IN THE BANK ACCOUNT FOR WHICH HE WAS REQUIRED TO EXPLAIN THE NATURE AND SOURCE OF SUCH DEPOSIT. BUT HE FAILED TO DISCHARGE HIS DUTY TO PROVE THE NATURE OF THE RECEIPT. THEREF ORE, THE ACTION OF THE ASSESSING OFFICER IS FOUND CORRECT IN TREATING IT A S UNEXPLAINED DEPOSITS. I DO NOT FIND ANY MERIT IN THE CONTENTION OF THE APPE LLANT THAT THESE DEPOSITS DO NOT SHOW THE NATURE OF HIS TAXABLE INCOME. IN VI EW OF THE OBSERVATION MADE BY HONBLE SUPREME COURT IN ABOVE QUOTED CASES THE ACTION OF THE AO IS FOUND TO BE CORRECT AND ACCORDINGLY, THE ADDI TION MADE BY HIM IS CONFIRMED. ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 25 17. NEXT GROUND NO. 2 IN THE APPEAL OF THE ASSE SSEE FOR THE AY 2000-01 RELATES TO THE ADDITION OF RS.1,00,000/- ON ACCOUNT UNEXPLAINED DEPOSITS IN THE BANK. DURING THE COURS E OF SURVEY, A PAY-IN-SLIP OF STATE BANK OF SAURASHTRA DATED 25-10 -1999 REVEALED DEPOSIT OF RS.1,00,000/-. SINCE THE ASSESSEE DID NO T EXPLAIN THE SOURCE OF SAID DEPOSIT SATISFACTORY, THE AO ADDED T HE SAID AMOUNT. ON APPEAL, THE LEARNED CIT(A) UPHELD THE ADDITION, HOLDING AS UNDER: 4.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT. I HAVE ALSO CONSIDERED THE FACTS BROUGHT ON RECORD BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. IT IS EVIDENT FROM THE IMPOUNDED PAY-IN-SLIP AT PAGE NO.3I OF ANNEXURE A-15 THAT THE APPELLANT HAD DEPOS ITED RS.1,00,000/- IN HIS SAVINGS BANK ACCOUNT MAINTAINED WITH STATE BANK OF SAURASHTRA, NIRMALNAGR BRANCH. BHAVNAGR. THE EXPLANATION GIVEN BY THE APPELLANT THAT HE WAS HAVING INCOME FROM RETAIL TRADING BUSINESS I N ADDITION TO THE AGRICULTURAL INCOME OF SELF AS WELL AS OF HUF WAS N OT FOUND TO BE HELPFUL TO THE ASSESSEE IN ABSENCE OF ANY AUTHENTIC EVIDENCE. AS NO BOOKS OF ACCOUNT OF ANY SOURCE OF INCOME HAS BEEN MAINTAINED BY THE APPELLANT, THE EXPLANATION GIVEN BY THE APPELLANT IS FOUND TO BE GENERAL IN NATURE AND NOT SUPPORTED BY ANY AUTHENTIC DOCUMENTARY PROOF. T HE BURDEN LIES ON THE ASSESSEE TO PROVE THE SOURCE OF THE DEPOSIT MADE IN SAVING BANK ACCOUNT. HON'BLE SUPREME COURT HAS HELD IN THE CASE OF A. GO VIND RAJULU MUDALIAR VS. CIT 34 ITR 807 THAT 'WHERE A RECEIPT IS TO BE T REATED AS INCOME OR NOT, MUST DEPEND VERY LARGELY ON THE FACTS AND CIRCUMSTA NCES OF EACH CASE. WHEN BOTH EXPLANATION OF ASSESSEE WERE REJECTED, AS THEY HAVE BEEN, IT WAS CLEARLY OPEN TO THE ITO TO HOLD THAT THE INCOME MUST BE CONCEALED INCOME. THERE IS AMPLE AUTHORITY FOR THE PROPOSITIO N THAT WHERE AN ASSESSEE FAILS TO PROVE SATISFACTORILY THE SOURCE A ND NATURE OF CERTAIN AMOUNTS OF CASH RECEIVED DURING THE ACCOUNTING YEAR , THE ASSESSING OFFICER IS ENTITLED TO DRAW THE INFERENCE THAT THE RECEIPTS ARE OF AN ASSESSABLE NATURE.' IN THE INSTANT CASE, THE APPELL ANT FAILED TO DISCHARGE HIS ONUS BY PROVING THE SOURCE OF DEPOSIT MADE IN H IS SAVING BANK ACCOUNT. THEREFORE, THE ACTION OF 1 HE ASSESSING OF FICER IS FOUND TO BE CORRECT AND ACCORDINGLY THE ADDITION MADE IS CONFIR MED. 18. GROUND NO. 3 IN THE APPEAL OF THE ASSESSEE FO R THE AY 2000-01 RELATES TO ADDITION OF RS.33,120/- ON ACCOUNT OF I NVESTMENT IN PURCHASE OF AGRICULTURAL LAND. AS DETAILED IN PARA 14 ABOVE, A DOCUMENT IN THE FORM OF PURCHASE DEED, INVENTORISED AT PAGE NO.46 OF ANN.X-5 FOUND DURING THE COURSE OF SURVEY ON 21- 1-2003 IN THE BUSINESS PREMISES OF M/S. SHIVANI ENTERPRISE REVEA LED THAT THE ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 26 ASSESSEE HAD MADE PAYMENT OF RS.2,30,000. SINCE TH E ASSESSEE DID NOT EXPLAIN THE SOURCES OF INVESTMENT SATISFACT ORILY, THE AO ADDED THE AMOUNT IN THE AY 2000-01.HOWEVER, THE LD. CIT(A) FOUND THAT INVESTMENT HAD BEEN MADE IN THE AY 1996-97 AND THE ASSESSEE HAVING NOT EXPLAINED THE SOURCES SATISFACTORILY, TH E ADDITION WAS MADE IN THE AY 1996-97 AS DISCUSSED HEREINABOVE IN PARA 14. SINCE AN AMOUNT OF RS. 33,120 WAS INCURRED FOR PAYMENT OF STAMP DUTY ON 27.9.1999 AND THE ASSESSEE DID NOT EXPLAIN THE SOUR CE OF THE SAID AMOUNT, THE LD. CIT(A) UPHELD THE ADDITION OF RS.33 ,120/- IN THE FOLLOWING TERMS: 8.2 I HAVE CAREFULLY CONSIDERED THE WRITTEN SUBMIS SION OF THE APPELLANT. I HAVE GONE THROUGH THE ASSESSMENT ORDERS OF ASSESSME NT YEARS 1996-97 AS WELL AS 2000-01. THE STAMP PAPERS WERE PURCHASED ON 27-9-1999 AND PURCHASE DEED WAS PREPARED ON 30.9.1999. HAVING NOT BEEN SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, THE ASSESSING OFFI CER MADE AN ADDITION OF RS.2,63,120/-IN ASSESSMENT YEAR 2000-01 BUT HE FAIL ED TO APPRECIATE THAT THE INVESTMENT IN SAID OPEN LAND WAS MADE IN F.Y.19 95-96 RELEVANT TO ASSESSMENT YEAR 1996-97. AS PER THE PROVISIONS OF S ECTION 69 OF THE INCOME TAX ACT, THE ADDITION FOR UNEXPLAINED INVEST MENT WAS TO BE MADE IN ASSESSMENT YEAR 1996-97 INSTEAD OF ASSESSMENT YE AR 2000-01. THE APPEALS FOR BOTH THESE YEARS ARE BEFORE ME AND IN V IEW OF THE DECISION OF HON'BLE PATNA HIGH COURT IN THE CASE OF CIT VS. C M RAJGARIA REPORTED IN 121 ITR 778, CIT(A) IS COMPETENT U/S 251 TO DECIDE THE YEAR IN WHICH THIS UNEXPLAINED INVESTMENT IS LIABLE TO BE ASSESSED. TH E LAW IS CLEAR THAT WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING T HE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS WHICH ARE NOT REC ORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURC E OF INCOME AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE INVESTMENTS OR THE EXPLANATION OFFERED BY HIM IS NO T, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE VALUE OF THE I NVESTMENTS MAY BE DEEMED TO BE INCOME OF THE ASSESSEE FOR SUCH FINANC IAL YEAR. IN THE PRESENT CASE, PAYMENT OF RS.2,30,000/- WAS MADE IN F.Y.1995-96, RELEVANT TO ASSESSMENT YEAR 1996-97. IN VIEW OF THE FACTS AND LEGAL POSITION AS DISCUSSED ABOVE AND ALSO IN VIEW OF THE DECISION GIVEN IN MY APPELLATE ORDER OF EVEN DATE IN APPELLANTS CASE FO R AY 1996-97, THE ADDITION OF RS.2,30,000/- MADE U/S 69C IN THIS AY I .E. 2000-01 IS DELETED. BALANCE AMOUNT OF RS.33,120/- (2,63,120 2,30,000) WAS INVESTED IN THIS YEAR AND REMAINED UNEXPLAINED. THE EXPLANATION GIVE N BY THE APPELLANT IS OF GENERAL NATURE AND NOT SUPPORTED BY ANY DOCUMENT ARY EVIDENCE. IN VIEW OF THE PROVISIONS OF SECTION 69 OF THE INCOME TAX A CT, INVESTMENT TO THE EXTENT OF RS.33,120/- IS TREATED AS INCOME OF THE A PPELLANT FOR THE AY 2000-01 AND ADDITION TO THAT EXTENT IS CONFIRMED. T HUS, FROM OUT OF TOTAL ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 27 ADDITION OF RS.2,63,210/- THE APPELLANT GETS RELIEF OF RS.2,30,000/- AND REMAINING AMOUNT OF RS.33,120/- IS SUSTAINED. 19. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINS T THE AFORESAID FINDINGS OF THE LD. CIT(A) IN THE AYS 1996-97 TO 20 00-01 AS DETAILED IN PARA 10 TO 18 ABOVE. THE LD. AR APPEARING ON BEH ALF OF THE ASSESSEE IN RELATION TO GROUND NO.3 IN THEIR APPEA L FOR THE AY 1996- 97, GROUND NOS. 2 &4 IN THEIR APPEAL FOR THE AY 199 7-98,GROUND NOS. 2,4 & 5 IN THEIR APPEAL FOR THE AY 1998-99,GROUND N O.2 IN THEIR APPEAL FOR THE AY 1999-2000 AND GROUND NOS 2 & 3 IN THEIR APPEAL FOR THE AY 2000-01, WITHOUT EVEN DISPUTING THE FIND INGS OF THE LD. CIT(A) CONTENDED THAT AT LEAST TELESCOPING BENEFIT SHOULD BE GIVEN IN RESPECT OF THESE ADDITIONS VIS-A-VIS BUSINESS I NCOME OR ATTRIBUTABLE TO ADDITIONS IN RELATION TO AGRICULTUR AL INCOME. THE LD. DR APPEARING ON BEHALF OF THE REVENUE DID NOT OPPO SE THIS CONTENTION OF THE LD. AR. AS REGARDS ISSUE RAISED I N GROUND NO. 4 IN THE APPEAL OF THE REVENUE FOR THE AY 1997-98, THE L D. DR MERELY SUPPORTED THE ORDER OF THE AO. 20. WE HAVE HEARD BOTH THE PARTIES AND GONE THRO UGH THE FACTS OF THE CASE IN RESPECT OF ADDITIONS DETAILED IN PARA 10 TO 18 ABOVE. THE LD. CIT(A) UPHELD THE ADDITION OF RS. 2,30,000/ - IN THE AY 1996- 97, RS.27,500+73,775/- IN THE AY 1997-98,RS. 12,328 /-+10,000/- +9,921 IN THE AY 1998-99,RS.2,05,109/- IN THE AY 19 99-2000 & RS.1,00,000+33,120 IN THE AY 2000-01, SINCE THE ASS ESSEE DID NOT ESTABLISH THE SOURCE OF INVESTMENT /EXPENDITURE SAT ISFACTORILY. THE LD. AR ON BEHALF OF THE ASSESSEE DID NOT PLACE ANY MATERIAL BEFORE US SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER. IT IS WELL SETTLED THAT ONUS IS ON THE ASSESSEE TO ESTABLISH T HE SOURCE OF THE AFORESAID INVESTMENTS/EXPENDITURE WITH PROPER EVIDENCE. SINCE THE ONUS PLACED ON THE ASSESSEE HAS NEITHER BEEN DISCHARGED BEFORE THE LOW ER AUTHORITIES AND EVEN BEFORE US, WE HAVE NO ALTERNATIVE BUT TO UPHOLD THE VIEW T AKEN BY THE LD. CIT(A) IN SUSTAINING THE AFORESAID ADDITIONS. AS REGARDS ALTERNATE PLE A OF TELESCOPING, SINCE THIS PLEA WAS ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 28 NEVER RAISED BEFORE THE LOWER AUTHORITIES, IN THE I NTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THE ISSUE OF TELESCOPING TO THE FILE OF TH E AO WITH THE DIRECTIONS TO EXAMINE THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW WH ILE ALLOWING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. WHILE CONSIDERING THE BENEFIT OF T ELESCOPING, THE ASSESSING OFFICER SHALL KEEP IN VIEW THE VARIOUS JUDICIAL PRONOUNC EMENTS, INCLUDING THE DECISIONS IN THE CASE OF CIT V. DEVI PRASAD VISWANATH PRASAD [19 69] 72 ITR 194 (SC) AND CIT VS. JHAVERBHAI BIHARILAL & CO.160 ITR 634(PATNA) . SUBJECT TO THESE DIRECTIONS, GROUND NO.3 IN THE APPEAL OF THE ASSESSEE FOR THE AY 1996-97, GROUND NOS. 2 &4 IN THEIR APPEAL FOR THE AY 1997-98 ,GROUND NOS. 2,4 & 5 IN THEIR APPEAL FOR THE AY 1998-99,GROUND NO.2 IN THEIR APPEAL FOR THE AY 1999-2000 AND GROUND NOS 2 & 3 IN THEIR APPEAL FOR THE AY 2000-01, ARE DISMISSED. 20.1 AS REGARDS GROUND NO.4 IN THE APPEAL OF THE REVENUE FOR THE AY 1997-98, WE FIND THAT THE LD. CIT(A) DELETED THE ADDITION SINCE THE THE PURCHASE DEED REGISTERED ON 25-10-199 6 REVEALED THE PAYMENTS AS UNDER:- 1. RS.1,20,000/- BY CHEQUE BEARING NO.66170 DATED 5-8-93 OF DENA BANK, BHAVNAGAR. 2. RS.4,00,000/- BY CHEQUE BEARING NO.80817 D ATED 3.12.93 OF DENA BANK, BHAVNAGAR. 3. RS.1,01,190/- BY CHEQUE BEARING NO.56248 75 DATED 4-1-94 DENA BANK, BHAVNAGAR SINCE THE PAYMENTS WERE MADE DURING THE F.Y. 1993 -94, RELEVANT TO THE ASSESSMENT YEAR 1994-95, THE LD. CIT(A) DELETED TH E ADDITION OF RS.6,21,190/- MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT YE AR 1997-98. THE LD. DR APPEARING BEFORE US DID NOT POINT OUT ANY INFIRMITY IN THIS APPROACH OF THE LD. CIT(A). IN THESE CIRCUMSTANCES, WE DO NOT FIND ANY JUSTIFICATION FOR THE ADDITION OF RS.6,21,190 IN THE AY 1997-98. THEREFORE, GROUND NO .4 IN THE APPEAL OF THE REVENUE FOR THE AY 1997-98 IS DISMISSED. 21 ADVERTING NOW TO GROUND NO.2 IN THE APPEAL OF T HE REVENUE FOR THE AY 1997-98 , THE AO NOTICED THAT DURING THE COU RSE OF SURVEY, ONE DOCUMENT INVENTORISED AT PAGE NO.14 AND 15 OF A NNEXURE A-8 ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 29 REVEALED THAT THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS. 44 LACS ON 21.11.1996 AND RS. 37 LACS WERE TO BE RECEIVED O N 21.12.1996. AN AMOUNT OF RS. 9 LACS WAS TO BE RECEIVED AT THE TIME OF CLEARANCE BY MUNICIPAL CORPORATION IN RESPECT OF TRANSACTION OF LAND ADMEASURING 5000 SQ. YARDS AT MARKETING YARD ,CHITR A. TO A QUERY BY THE AO, THE ASSESSEE EXPLAINED THAT THE SAID LA ND WAS TO BE PURCHASED BY SHRI HANUBHAI OF VILLAGE NAVNALYA AND HE(THE ASSESSE) ACTED AS A BROKER. IN HIS STATEMENT, SHRI HANUBHAI REVEALED ON 25.3.2004 THAT HE HAD KNOWLEDGE OF EITHER THE OWNE RSHIP OF LAND OR EVEN ABOUT PURCHASER OR SELLER NOR WAS HE AWARE OF ANY BROKERAGE. CONSIDERING THE FACT THAT TRANSACTION OF RS. 90 LAC S WAS BROKERED BY THE ASSESSEE, THE AO ADDED AN AMOUNT OF RS. 2,70,00 0/- BEING BROKERAGE AT THE RATE OF 3% ON THE PROPOSED VALUE O F RS.90 LAKHS. 22. ON APPEAL, THE LEARNED CIT(A) DELETED THE ADDIT ION IN THE FOLLOWING TERMS::- 6.1 DURING THE COURSE OF APPELLATE PROCEEDINGS, TH E APPELLANT SUBMITTED THAT HE HAD NOT MADE ANY INVESTMENT IN RE AL ESTATE BUT ON BEHALF SHRI HANUBHAI WALABHAI, HE MADE NEGOTIATION FOR PUR CHASE OF A PIECE OF LAND MARKETING YARD, CHITRA. IT IS FURTHER SUBMITTE D THAT:- 'THE ASSESSING OFFICER HAS ADDED A SUM OF RS.2,70,0 00/- AT THE RATE OF 3% AS ESTIMATED DALALI ON THE PAYMENT OF RS.44,00,000/ -. THERE WAS AN AGREEMENT TO PURCHASE OF 20-9-1996 BY ONE SHRI HANUBHAI VALJIBHAI FROM SHRI INDUBHAI VAGHANI AND SHRI ANILB HAI PATEL. COPY OF THE AGREEMENT DATED 20-09-1996 IS SUBMITTED HEREWITH( P AGE 11 TO 12 OF THE PAPER BOOK) IN PAPGE-1 OF THE SAID AGREEMENT IT IS MENTIONED TH AT A SUM OF RS.44,00,000/- WAS PAID ON 21-11-1996 THIS WRITING IS OBVIOUSLY IN CORRECT. IN VIEW OF THE FACT THAT THE PAYMENT IS SHOWN TO HA VE BEEN MADE ON 21-11- 1996 IN AGREEMENT DATED 20.09.1996. ACTUALLY NO PAY MENT HAS BEEN MADE. SHRI HANUBHAI VALJIBHAI WAS EXAMINED BY THE A SSESSING OFFICER AND HE HAS STATED BEFORE HIM THAT NO PAYMENT HAD MADE B Y HIM. (PAGE NO.13 TO 16 OF PAPER BOOK). IT IS NOBODY'S CASE THAT BROK ERAGE OF RS.2,70,000/- WAS PAID TO THE APPELLANT. BEFORE THE ASSESSING OFFICER, IT HAS BEEN POINTED O UT THAT THE LAND CONTINUED TO BE IN THE NAMES OF THE ORIGINAL OWNERS THE SAUDA WAS NEVER ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 30 COMPLETED. THERE IS THUS NO QUESTION OF RECEIVING A N AMOUNT OF RS.2,70,000/- BY THE APPELLANT AS BROKERAGE. THE AD DITION IS UNWARRANTED AND UNJUSTIFIED.' 6.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE. I HAVE ALSO VERIFIED THE IMPOUNDED MATERIAL INVENTORISED AT PAGES 14 AND 15 OF ANNEXURE A-8. AS PER THIS DOCUMENT, TERMS AND CONDITIONS WERE DRA WN FOR PROPOSED SALE OF 5000 YARDS OF LAND AT MARKETING YARD, CHITRA. TH IS DOCUMENT IS DRAWN BETWEEN SELLER AND PURCHASER THROUGH THE AGENT I.E. THE APPELLANT. THIS DOCUMENT IS UNSIGNED. THE ASSESSING OFFICER HAS EXA MINED SHRI HANUBHAI, WHO WANTED TO PURCHASE THE SAID LAND. HE HAS ALSO RECORDED HIS STATEMENT ON OATH WHEREIN HE HAS STATED IN REPL Y TO QUERY NO.4 THAT A 'SAUDHA' WAS UNDER NEGOTIATION BUT THE SAME COULD N OT BE MATERIALISED. ENGLISH TRANSLATION OF THE RELEVANT PORTION OF HIS STATEMENT IS REPRODUCED FOR READY REFERENCE: Q.4 'GIVE DETAILS AS TO WHETHER (I) ANY 'SAUDHA' FOR THE PURCHASE OF LAND HAS BEEN MADE, (II) THE PRICE OF THE LAND H AS BEEN FIXED, (HI) OR ANY ADVANCE HAS BEEN GIVEN. ALSO GIVE THE NAME O F THE LANDHOLDER.? A.4 SHRI PRAVINBHAI N. PANDYA HAS NOT DISCLOSED THE LANDHOLDER'S NAME. HE ONLY MADE A VERBAL STATEMENT THAT THERE IS 5000 YARDS OF LAND, THE COST OF WHICH, AT THE RATE OF RS.1,800/-P ER YARD IS RS.90 LAKHS FOR WHICH THERE IS NEITHER ANY WRITTEN AGREEM ENT NOR ANY ADVANCE HAS BEEN GIVEN. ACCORDING TO ME, THERE IS O NLY 4000 YARDS OF LAND COSTING RS. 72 LAKHS. ONLY. I HAVE NOT MET SHRI PRAVINBHAI AFTER HIS VERBAL STATEMENT AND THE SAUDHA' COULD N OT BE MATERIALISED. Q.7 WHO HAS GIVEN THE PAYMENT TOWARDS THE REPAIR ING THE FENCING OF LAND? A.7 I HAVE NOT MADE ANY PAYMENT TOWARDS REPAIRIN G THE FENCING OF LAND AND NO 'SUADHA' HAS BEEN MADE. Q.8 WHETHER ANY OTHER CONDITION HAS BEEN MADE WI TH SHRI PRAVINBHAI EXCEPT FOR THE PURCHASE OF LAND? A.8 I HAVE DISCUSSED ABOUT THE PURCHASE OF LAND AND PLOTTING OF LAND FOR WHICH COMMISSION WAS TO BE PAID TO SHRI PR AVINBHAI BUT THE RATE OF COMMISSION HAS NOT BEEN FIXED.' IT WAS EXPLAINED THAT THE PROPOSED SELLER HAD NO RI GHT, TITLE OR INTEREST IN SAID LAND. HENCE, THE SAID DEAL WAS CANCELLED. THE LAND IS STATED TO BE STILL IN TACT. THE ASSESSING OFFICER HAS NOT MADE ANY INQ UIRY FROM THE ALLEGED SELLERS I.E. SHRI INDUBHAI VAGHANI AND ANILBHAI PAT EL. THERE IS NO DOUBT THAT THE APPELLANT HAS BEEN SHOWN AS A BROKER AS PE R THIS DOCUMENT BUT THE PROPOSED 'SAUDHA' IS TO HAVE NOT BEEN MATERIALI SED. NO ATTEMPT ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 31 APPEARS TO HAVE BEEN MADE ASSESSING OFFICER TO ASCE RTAIN THE OWNERSHIP OF SAID LAND FROM THE REVENUE RECORD. IT IS NOT ASC ERTAINED THAT AT PRESENT THE LAND IS IN WHOSE CONTROL. IN VIEW OF THIS, THE ESTIMATION OF BROKERAGE INCOME MADE BY THE AO IS HELD TO BE NOT BASED ON AN Y AUTHENTIC PROOF EXCEPT THIS UNSIGNED DOCUMENT WHICH HAS NO EVIDENTI ARY VALUE UNDER THE EVIDENCE ACT. AS PER THE STATEMENT OF SHRI HANUBHAI , THE SAID SAUDHA WAS NOT MATERIALIZED. HENCE, BROKERAGE INCOME ESTIM ATED BY THE AO IS FOUND TO BE NOT JUSTIFIED AND ACCORDINGLY THE SAME IS DELETED. 23. THE REVENUE IS NOW IN APPEAL BEFORE US AGAIN ST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LEARNED DR SUPPORTE D THE ORDER OF THE AO WHILE THE LEARNED AR ON BEHALF OF THE ASSESSEE S UPPORTED THE FINDINGS OF THE LEARNED CIT(A). 24. WE HAVE HEARD BOTH THE PARTIES AND GONE T HROUGH THE FACTS OF THE CASE. THE LD. CIT(A) AFTER EXAMINING THE TERMS AND CONDIT IONS OF AN UNSIGNED AGREEMENT INVENTORISED AT PAGES 14 AND 15 OF ANNEXURE A-8 AND PERUSAL OF STATEMENT OF SHRI HANUBHAI, WHO WANTED TO PURCHASE THE SAID LAND OBSERVED THAT THE DEAL IN TERMS OF THE SAID UNSIGN ED DOCUMENT WAS CANCELLED AND THE LAND WAS STATED TO BE STILL IN TACT. SINCE THE AO DID NOT MAKE ANY INQUIRY FROM THE ALLEGED SELLERS I.E. SHRI INDUBHAI VAGHANI AND ANILBHAI PATEL NOR ASCERTAINED AS TO WHETHER OR NOT DEAL WAS MATERIALI ZED THE LD. CIT(A) CONCLUDED THAT ESTIMATION OF BROKERAGE INCOME BY THE AO WAS WITHOUT ANY BASIS AND ACCORDINGLY, DELETED THE ADDITION. THE LD. DR DID NOT REFER US TO ANY MATERIAL, CONTROVERTING THESE FINDING OF FACTS RECORDED BY TH E LD. CIT(A). IN THE ABSENCE OF ANY MATERIAL SO AS TO ENABLE US TO TAKE A DIFFER ENT VIEW IN THE MATTER, WE HAVE NO HESITATION IN UPHOLDING THE FIND INGS OF THE LD. CIT(A). THEREFORE, GROUND NO.2 IN THE APPEAL OF TH E REVENUE IS DISMISSED. 25. GROUND NOS. 5 & 6 IN THE APPEAL OF THE REVENUE FOR THE AY 1997- 98 BEING GENERAL IN NATURE, DO NOT REQUIRE ANY SEPA RATE ADJUDICATION AND ARE, THEREFORE, DISMISSED. ITA NOS.587 TO 593/AHD/2006 SHRI PRAVINCHANDRA N PANDYA 32 26. IN THE RESULT, SUBJECT TO OUR DIRECTIONS REGARD ING TELESCOPING OF ADDITIONS IN PARA 20 ABOVE, ALL THE SEVEN APPEALS A RE DISMISSED. ORDER PRONOUNCED IN THE COURT TODAY ON 11 -06-2010 SD/- SD/- (BHAVNESH SAINI) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 11 -06-2010 COPY OF THE ORDER FORWARDED TO : 1. SHRI PRAVINCHANDRA N PANDYA, ASHISH, PLOT NO.1 5, NR. NIL AMBAUG CIRCLE, BHAVNAGAR 2. THE ITO, WARD-1(2), BHAVNAGAR 3. CIT CONCERNED 4. CIT(A)-XX, AHMEDABAD 5. THE DR,C BENCH ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD