Income-tax Officer, V. Shri Laxman Bhaurao Jadhav, Aurangabad

ITA 675/PUN/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2258 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 07-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Unexplained investment; Business income; Search and seizure; Source of fund; Tax effect
• Section: 69

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . , , ! ' BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.631/PN/2014 !$ $ / ASSESSMENT YEAR : 2009-10 SHRI LAXMAN BHAURAO JADHAV, JADHAV GALLI, KACHNER, TALUKA & DIST. AURANGABAD PAN NO.AMPPJ0248J . / APPELLANT V/S ITO, WARD-2(3), AURANGABAD . / RESPONDENT . / ITA NO.675/PN/2014 !$ $ / ASSESSMENT YEAR : 2009-10 ITO, WARD-2(3), AURANGABAD . / APPELLANT V/S SHRI LAXMAN BHAURAO JADHAV, JADHAV GALLI, KACHNER, TALUKA & DIST. AURANGABAD PAN NO.AMPPJ0248J . / RESPONDENT / APPELLANT BY : SHRI SUNIL PATHAK & SHRI NIKHIL PATHAK / DEPARTMENT BY : SHRI DHEERAJ KUMAR JAIN / DATE OF HEARING : . 17.12.2015 / DATE OF PRONOUNCEMENT: 18.12.2015 2 / ORDER PER R.K. PANDA, AM : THESE ARE CROSS APPEALS. THE FIRST ONE IS FILED BY THE ASS ESSEE AND THE SECOND ONE FILED BY THE REVENUE AND ARE DIRECTED AG AINST ORDER DATED 31-01-2014 OF THE CIT(A)-AURANGABAD RELATING TO ASSESSM ENT YEAR 2009- 10. FOR THE SAKE OF CONVENIENCE, THESE APPEALS WERE HEA RD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSSEE IS AN INDIVIDUAL. A NOTICE U/S.148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 15-03-2012 AFTER RECORDING THE REASONS. THE ASSESSEE FILED THE RETURN OF INCOME ON 10-01- 2013 SHOWING TOTAL INCOME OF RS.1,08,674/- AND AGRICULTURAL IN COME OF RS.2,05,380/-. DURING THE COURSE OF ASSESSMENT PROCEEDING S THE AO NOTICED THAT ASSESSEE HAS GIVEN AN ADVANCE OF RS.40 LAKH S TO MR. ASHISH MUDGIYA TOWARDS PURCHASE OF A SHOP. THE SAID TRANSAC TION FOR PURCHASE OF SHOP HAS NOT YET MATERIALIZED TILL DATE. THE AO ASKED T HE ASSESSEE TO SUBSTANTIATE THE SOURCE OF ADVANCE AMOUNTING TO RS.40 LA KHS MADE DURING THE YEAR. THE ASSESSEE SUBMITTED THAT THE ADVA NCE OF RS.40 LAKHS HAS BEEN MADE OUT OF CASH AVAILABLE WITH HIM OUT OF AGRICUL TURAL INCOME OF THE FAMILY OVER A PERIOD OF YEARS. 3. THE AO ANALYSED THE BALANCE SHEET AND CAPITAL ACCOU NT FOR THE YEAR ENDING 31-03-2006 AND 31-03-2009 AND NOTED THAT THE ASSESSEE APART FROM CREDITING AGRICULTURAL INCOME OF SELF HAS ALSO CREDITED TH E AGRICULTURAL INCOME OF THE FAMILY MEMBERS AND IN THIS WAY HA S GENERATED CASH TO SUBSTANTIATE THE ADVANCE OF RS.40LAKHS. THE DET AILS OF AGRICULTURAL INCOME DECLARED BY THE ASSESSEE IN THE NAME OF SELF AND DIFFERENT FAMILY MEMBERS FOR THE F.Y. 2005-06 TO 2008-09 ARE AS UNDER : 3 4. THE AO CALLED FOR 7/12 EXTRACT AND SALE PATTIES OF AGR ICULTURAL PRODUCE SOLD TO SUBSTANTIATE THE CLAIM OF AGRICULTURAL INCOM E OF SELF AND THE FAMILY MEMBERS OF THE ASSESSEE. IT WAS EXPLAINED BY THE ASSESSEE THAT THE SALE PATTIES ARE NOT AVAILABLE. THE AO, THEREFORE ASKED THE ASSESSEE TO SUBSTANTIATE THE ADVANCE OF RS.40 LAKHS GIV EN BY HIM. THE AO ALSO ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE ADVANCE HAS N OT BEEN ROUTED THROUGH THE BANK ACCOUNTS AND WHY THE MONEY FROM AGRICULTURAL ACTIVITY WAS NOT DEPOSITED IN THE BANK ACCOUNT WHEN THE ASSESSEE IS MAINTAINING 2 BANK ACCOUNTS. THE AO ALSO RECORDED THE S TATEMENT OF THE ASSESSEE. AFTER CONSIDERING THE VARIOUS SUBMISSIONS FILED B Y THE ASSESSEE FROM TIME TO TIME THE AO TREATED THE AMOUNT OF RS.40 LAKH S ADVANCED BY THE ASSESSEE TO MR. ASHISH MUGDIYA AS UNEXPLAINED BY ST ATING THE FOLLOWING REASONS : (1) THE TRANSACTION OF PURCHASE OF SHOP FROM MR.ASHISH MUGDIYA CLAIMED BY THE ASSESSEE HAS NOT BEEN MATERIALIZED TILL THE DATE OF ASSESSMENT ORDER. (2) THE TRANSACTION FOR PROPOSED PURCHASE OF SHOP HAS N OT BEEN ROUTED THROUGH BANKING CHANNEL THOUGH THE ASSESSEE IS HAVING BA NK ACCOUNT. NAME OF THE FAMILY MEMBER OPENING F.Y. F.Y. F.Y. F.Y. BALANCE 2005 - 06 2006 - 07 2007 - 08 2008 - 09 RS. RS. RS. RS. RS. 1. SHRI LAXMAN B. J ADHAV, 3,78,486 1,13,352 1,61,730 1,84,248 2,05,375 ASSESSEE 2. SHRI RAVI J ADHAV, -- 50,000 1,50,000 1,50,000 2,00,000 SON 3. SHRI RAHUL J ADHAV, -- 1,00,000 1,50,000 1,50,000 2,50,000 SON 4. SMT.KANTABAI J ADHAV, -- 1,62,000 3,50,000 4,00,000 3,50,000 WIFE 5. SHRI SUDHIR J ADHAV, SON -- 50,000 2,50,000 2,50,000 2,00,000 TOTAL 3,78,486 4,75,352 10,61,730 11,34,248 12,05,375 4 (3) THE ASSESSEE AND HIS SON MR.RAHUL ARE HAVING BANK ACC OUNT AND THEREFORE, THE AGRICULTURAL INCOME CLAIMED BY THE ASSESSEE SHOULD HAVE BEEN DEPOSITED IN THE BANK ACCOUNT INSTEAD OF ACCUMULATING THE SAME IN CASH. (4) IN F.Y.2007-08, THE ASSESSEE HAS RAISED TRACTOR LOAN ACCOUNT OF RS.3.50 LAKHS AND ALSO RAISED GOLD LOAN OF RS.33,000/-. THE ASSESSE E HAS NOT SHOWN THIS LOAN LIABILITY IN THE BALANCE SHEET. FURTHER, IF THE ASSESSEE WOULD HAVE GOT SUCH A SUBSTANTIAL CASH IN HAND, HE WOULD NOT HAVE RAISE D THE ABOVE MENTIONED LOANS. THE ASSESSEE HAS ALSO RAISED GOLD LOANS OF RS.48,000/- AND RS.1,12,000/- IN F.Y.2009-10 & 2011-12 RESPECTIVELY. (5) THE ASSESSEE HAS ALSO RAISED CROP LOANS AS MENTIONED ON 7/12 EXTRACTS AMOUNTING TO RS.1,42,000/- AND RS.3,00,000/- IN SPITE OF HAVING SUBSTANTIAL CASH IN HAND AS CLAIMED BY HIM. (6) IT HAS BEEN NOTICED FROM THE DEPOSITION MADE BEFO RE THE ITO, WARD-2(1), BY THE ASSESSEE IN THE CASE OF SHRI MUGDIYA THAT THE ASS ESSEE HAS ADVANCED RS.5,00,000/- TO SHRI SATISH WASUNDEKAR OF LAKHEGAON F OR THE PURPOSE OF DIGGING WELL AND PIPELINE. THE SAID ADVANCE IS NOT AP PEARING IN THE BALANCE SHEET. (7) FROM THE BANK ACCOUNT OF THE ASSESSEE, IT HAS BEEN N OTICED THAT THE ASSESSEE HAS DEPOSITED CHEQUES IN RESPECT OF CANE PAYMENTS , GOLD LOAN ETC., AND HAS IMMEDIATELY WITHDRAWN THE AMOUNT ON THE NEXT DAY BY KEEPING MINIMUM BALANCE IN THE BANK ACCOUNT. (8) MERE HOLDING OF AGRICULTURAL LAND DOES NOT GENER ATE AGRICULTURAL INCOME AND IT IS THE DUTY OF THE PERSON CLAIMING EXEMPT INCO ME TO PROVE THAT HE HAS IN FACT EARNED THE SAID INCOME. (9) THE SOURCE OF OPENING BALANCE OF CASH AND ACCUMUL ATED CASH BALANCE IS TO BE PROVED AND IN THE ABSENCE OF THE PROOF, THE SAME I S LIABLE TO BE TREATED AS UNEXPLAINED INCOME. (10) IN THE FAMILY OF THE ASSESSEE TWO MARRIAGES TOOK PL ACE IN F.Y.2006-07 AND 2008-09 AND THE EXPENDITURE INCURRED ON MARRIAGE OF SONS HAS BEEN CLAIMED ONLY AT RS.25,000/- EACH. (11) THE ASSESSEE HAS NOT FILED CONFIRMATION LETTERS IN RESPECT OF AGRICULTURAL INCOME CLAIMED TO HAVE BEEN RECEIVED FROM THE LANDS IN THE NAMES OF WIFE AND 3 SONS. IN VIEW OF THE ABOVE THE AO MADE ADDITION OF RS.40 LAKHS T O THE TOTAL INCOME OF THE ASSESSEE U/S.69 OF THE I.T. ACT, 1961. 5. BEFORE CIT(A) THE ASSESSEE MADE VARIOUS SUBMISSIONS WHIC H HAS BEEN SUMMARIZED BY THE LD.CIT(A) AT PARA 6.2 OF THE ORDER AND WHICH READ AS UNDER : (1) THE APPELLANT IS AN UNEDUCATED AGRICULTURIST AN D IS AFRAID OF GOVERNMENT AUTHORITIES AND HENCE WAS RELUCTANT TO APP EAR BEFORE THE ASSESSING OFFICER. 5 (2) THE APPELLANT DID NOT HAVE FAITH IN BANK AS SOME OF THE BANKS AND CREDIT SOCIETIES HAVE BECOME BANKRUPT AND HENCE HAS KEPT CASH WITH HIM AND HAS NOT DEPOSITED THE SAME IN BANK. THE AR OF THE APPELLA NT STATED THAT IN FACT THE APPELLANT HAS OPENED BANK ACCOUNT ONLY FOR THE PURPO SE OF ENCASHMENT OF CHEQUES IN RESPECT OF CANE PAYMENT ETC. (3) THE ABOVE CONTENTION IS EVIDENT FROM THE BANK AC COUNT OF THE APPELLANT WHICH IS APPEARING ON PAGE NO.4 OF THE ASSESSMENT ORDER IN TABULAR CHART FROM WHICH IT CAN BE NOTED THAT THE CHEQUES DEPOSITED HAVE BEEN IMMEDIATELY WITHDRAWN ON THE NEXT DAY AND MINIMUM BALANCE HAS BE EN KEPT WITH THE BANK. (4) THE ASSESSEE IS AN UNEDUCATED AGRICULTURIST AND HAS NO T MAINTAINED RECORD OF SALE OF AGRICULTURAL PRODUCE AS IT IS NOT T HE PRACTICE OF THE FARMERS TO MAINTAIN OR PRESERVE SUCH RECORD. (5) THE AGRICULTURAL INCOME OF THE APPELLANT AND HI S FAMILY CAN CERTAINLY BE ESTIMATED ON THE BASIS OF 7/12 EXTRACT SHOWING AREA UN DER CULTIVATION AND CROPS GROWN. THE APPELLANT HAS FILED TABULAR CHARTS SHOWING GROSS AGRICULTURAL INCOME FOR F.YS.2005-06 TO 2008-09 AT RS.2,01,500/- AND HA S CLAIMED NET AGRICULTURAL INCOME AT RS.18,50,000/-. (6) THE APPELLANT HAS OBTAINED SMALL LOANS FROM FINANC IAL INSTITUTIONS AS THE LOANS ARE AVAILABLE TO AGRICULTURISTS AT LESSER INTEREST RATES AND MANY TIMES GOVERNMENT WAIVES SUCH LOANS ADVANCED TO FARMERS. THE ASSESSEE BEING FATHER AND LEADER OF THE MEMBERS OF THE FAMILY I.E. WIFE & SONS HAS KEPT CASH BALANCE WITH HIM FOR PURCHASING A SHOP AND WHENEVER C ASH IS DEMANDED/REQUIRED BY HIS SONS, THE SAME HAS BEEN MANY TI MES RAISED BY OBTAINING SMALL LOANS BY PLEDGING GOLD ORNAMENTS ETC. , SO THAT THE SONS ARE UNDER OBLIGATION TO REPAY THE SAME. (7) SHRI MUGDIYA, DURING HIS SCRUTINY ASSESSMENT, HAS PROD UCED SHRI LAXMAN JADHAV BEFORE HIS A.O. AND IN THE STATEMENTS RECORDED BY THE A.O. ON OATH, SHRI MUGDIYA AND ALSO SHRI LAXMAN IADHAV HAVE CONFIRMED T HE FACT OF RECEIVING AND PAYING ADVANCE OF RS.40,00,000/- IN RESPECT OF PR OPOSED PURCHASE OF SHOP AND HAVE ALSO FILED BEFORE THE A.O. RECEIPT FOR PAYM ENT ON BOND PAPER OF RS.50/-. (8) THE IMPUGNED LAND ON WHICH THE BUILDING IS TO BE CONSTRUCTED BY SHRI MUGDIYA WAS DISPUTED PROPERTY AND HENCE THE BUILDING COULD NOT BE CONSTRUCTED AND CONSEQUENTLY THE SHOP COULD NOT BE PUR CHASED. THE LD.AR OF THE APPELLANT HAS SUBMITTED THAT IN VIEW OF BALANCE SHEETS AND CAPITAL ACCOUNTS FILED FOR F.Y.2005-06 TO 2008-09, THE SOURCE OF PAYMENT OF RS.40,00,000/- FOR PROPOSED PURCHASE OF SHOP STANDS EXPL AINED. (9) THE APPELLANT BEING LEADER OF THE FAMILY MEMBER S I.E. WIFE AND HIS 3 SONS IS EMPOWERED TO TAKE ALL THE FINANCIAL DECISIONS AND IT IS NOT PRACTICE IN THE RURAL AREA PARTICULARLY IN AGRICULTURIST FAMILIES TO OBTAIN RECEIPTS OR CONFIRMATION FROM FATHER/SONS IN RESPECT OF AGRICULTURAL INCOME FR OM THE AGRICULTURAL LANDS IN THE NAMES OF SONS AND WIFE UTILIZED BY THE FATHER B EING LEADER OF THE FAMILY. IN FACT, THE ANCESTRAL AGRICULTURAL LAND OF THE FAMI LY IS GENERALLY BIFURCATED IN THE NAMES OF FAMILY MEMBERS BY THE FATHER TO AVOID FU TURE DISPUTES. (10) IN THE RURAL AREA AND PARTICULARLY IN AGRICULTURIST FAM ILIES, THE MARRIAGE EXPENDITURE IN RESPECT OF SON'S MARRIAGE IS ALWAYS ON L OWER SIDE AS THE SAME IS GENERALLY INCURRED BY THE FAMILY OF BRIDE. 6 THE TABULAR CHARTS SUBMITTED BY THE APPELLANT CLAIMI NG GROSS AND NET AGRICULTURAL INCOME FOR F.YS.2005-06 TO 2008-09 I.E. A.YS.2006-07 TO 2009-10 ARE ENCLOSED WITH THIS ORDER AS ANNEXURE-L, 2, 3 & 4 RESPECTIVELY. AS PER THE SAID ANNEXURES, THE APPELLANT HAS WORKED THE GROSS AGRIC ULTURAL INCOME ON THE BASIS OF AREA OF THE LAND UNDER CULTIVATION, CROPS GRO WN, QUANTITY PRODUCED PER ACRE, SALE PRICE AND TOTAL SALE PROCEEDS. THE GROSS AGRICULTURAL INCOME AND NET AGRICULTURAL INCOME CLAIMED BY THE APPELLANT FO R ABOVE MENTIONED YEARS ARE AS UNDER FINANCIAL YEAR GROSS AGRICULTURAL INCOME NET AGRICULTURAL INCOME RS. RS. 2005-06 3,71,000 3,50,000 2006-07 4,46,500 4,00,000 2007-08 5,47,000 5,00,000 2008-09 6,46,000 6,00,000 TOTAL 20,10,500 18,50,000 THE APPELLANT HAS ALSO CLAIMED THAT THE LOANS OBTAINED BY HIM AS MENTIONED BY THE AO. IN THE ASSESSMENT ARE AVAILABLE TO HIM AS SOURCE FOR INVESTMENT TO THE TUNE OF RS.11.44 LAKHS ALONGWITH OPE NING CASH BALANCE ON 01/04/2005 RS.3.78 LAKHS. 6. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE T HE LD.CIT(A) SUSTAINED ADDITION OF RS.20 LAKHS AND DELETED AN AMOUNT OF RS.20 LAKHS BY OBSERVING AS UNDER : 6.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE AND RIVAL CONTENTIONS. ON PERUSAL OF THE SAME IT HAS BEEN NOTICED THAT THE AP PELLANT IS HOLDING SUBSTANTIAL AGRICULTURAL LAND ADMEASURING 29 ACRES IN T HE NAMES OF HIS WIFE AND 3 SONS. THE APPELLANT HAS ADVANCED AN AMOUNT OF RS. 40,00,000/- TO SHRI ASHISH MUGDIYA FOR PURCHASING SHOP. THE APPELLANT HAS CL AIMED THE SOURCE OF THE SAID ADVANCE OUT OF AGRICULTURAL INCOME FROM THE LANDS IN THE NAME OF HIMSELF, HIS WIFE AND 3 SONS. THE APPELLANT CLAIMED THA T HIS FAMILY IS STAYING TOGETHER AND CARRYING ON AGRICULTURAL ACTIVITY TOGE THER UNDER HIS SUPERVISION AND GUIDANCE. ON THE OTHER HAND THE AO. HAS HELD TH AT THE APPELLANT HAS NOT EARNED INCOME TO THE EXTENT CLAIMED AND THE INVESTME NT OF RS.40,00,000/- IN ADVANCE FOR PURCHASING SHOP IS UNEXPLAINED INVESTMENT. IN SUPPORT OF THE ABOVE CONTENTION, THE A.O. HAS STATED VARIOUS REASONS WH ICH HAVE BEEN REPRODUCED IN THE PRECEDING PARAGRAPH NO.6.1. FURTH ER, THE AR OF THE APPELLANT HAS REPLIED AND REASONABLY REBUTTED THE SAID OBJECTIONS WHICH HAVE BEEN REPRODUCED IN PARA NO.6.2. IN ORDER TO DE CIDE THE CONTENTION OF THE APPELLANT ABOUT THE QUANTUM OF AGRICULTURAL INCOME, THE SAME IS TO BE ESTIMATED AFTER CONSIDERING THE AREA UNDER CULTIVATIO N AND CROPS GROWN AS APPEARING IN THE 7/12 EXTRACTS ON SOME REASONABLE BASIS. THE AGRICULTURAL INCOME OF THE APPELLANT AND HIS FAMILY MEMBERS IS ESTIM ATED IN SUBSEQUENT PARAGRAPHS. 6.4 FROM THE CHART IN THE PRECEDING PARAGRAPH IN RESPECT OF AGRICULTURAL INCOME CLAIMED BY THE APPELLANT, IT HAS BEEN NOTICE D THAT THE APPELLANT HAS CLAIMED NET AGRICULTURAL INCOME AT 92% OF GROSS AGRIC ULTURAL INCOME. THE 7 EXPENDITURE CLAIMED BY THE APPELLANT IS ON LOWER SIDE AND HENCE THE SAME IS ESTIMATED AT 35% OF THE GROSS AGRICULTURAL INCOME AND ACCORDINGLY THE NET AGRICULTURAL INCOME FOR THE ABOVE MENTIONED 4 YEARS IS ESTIMATED AT RS.13,07,000/- AS AGAINST CLAIMED BY THE APPELLANT AT RS.18,50,000/-. FURTHER, THE HOUSEHOLD EXPENSES FOR THE ABOVE MENTIONED 4 YEARS OF THE FAMILY IS PARTLY CONTRIBUTED OUT OF BUSINESS INCOME DECLARED BY THE APPELLANT AND ALSO OUT OF AGRICULTURAL INCOME WHICH ARE CONSIDERED AT R S.50,000/- PER ANNUM I.E. RS.2,00,000/-. THE NET SAVINGS FROM AGRICULTURAL INCOM E WORKS OUT TO RS.11,07,000/-. THE APPELLANT HAS FURTHER CLAIMED VIDE LETTER DATED 26/12/2013 AN AMOUNT OF RS.15,00,000/- FROM VARIOUS SOURCES AS UNDER 'A. DURING THE COURSE OF HEARING OF ASSESSMENT P ROCEEDINGS THE APPELLANT HAD GIVEN THE BALANCE SHEETS OF HIS WHOLE FAMILY. IN THE BALANCE SHEET OF THE APPELLANT I.E. MR. LAXMAN JADHAV'S OPENING CAPITAL ACCOUNT WAS RS. 3,78,468/-. THE LEARNED A.O. HAS NEVER RAISED ANY OBJECTION FOR THE SAID AMOUNT IN HIS ASS ESSMENT ORDER VIDE PARA NO.2 PAGE NO.2. HENCE IT WAS AN UNDISPUTED FUNDS RS.3,78,468/- B. AS PER ASSESSMENT ORDER OF THE VIDE PARA 2.1(E) & (F), THE LEARNED A.O. HAS CONFIRMED THE FOLLOWINGS. GOLD LOAN DATED 15/05/2007 RS. 33,000/- . GOLD LOAN DATED 17/01/2009 RS.38,000 CROP LOAN DURING THE YEAR RS.1,42,500 LOAN FROM C.S.R.S.S.K. RS.3,00,000/- -------------------- RS.5,13,000/- C. AS PER ASSESSMENT ORDER VIDE PARA NO.9 PAGE NO.1 2 & FINDINGS OF ITO OF WARD 2(1), THE ITO HAS CONFIRMED. THE FOLLO WING LOANS TAKEN BY THE APPELLANTS FAMILY. A COPY OF THE SAID ORDER I S ENCLOSED FOR YOUR KIND REFERENCE. LOAN FROM MAHARASHTRA BANK RS.50,000/- LOAN FROM I.C.I.C.I. BANK RS.3,73,000/- ----------------- RS.4,23,000/- D. AS PER ASSESSMENT ORDER VIDE PARA NO.D.6 THE LEA RNED A.O. HAS AGREED FOR AGRICULTURAL INCOME OF RS.1,00,000/- ONL Y. RS.1,00,000/- E. RETURNED INCOME AS PER ROI WAS RS.1,06,674/- RS.1,06,674/- F. TOTAL OF A,B,C,D & E A RS.3,78,486/- B RS.5,13,000/- C RS.4,23,000/- D RS.10,00,000/- E RS.1,08,674/- -------------------------- RS.15,23,100/- SIR, AS PER ABOVE PARAS RS.15 LAC CASH FUND WAS AVA ILABLE WITH THE APPELLANT DURING THE YEAR UNDER CONSIDERATION. 8 THE TOTAL SOURCES CLAIMED BY THE APPELLANT ARE TO B E CONSIDERED AT RS.26,07,000/- (RS.11,07,000/- + RS.15,00,000/-) 6.5 CONSIDERING THE TOTALITY OF THE FACTS AND THE FA CT THAT THE APPELLANT HAD ADVANCED RS.5,00,000/- TO SHRI SATISH VASUNDEKAR OF LA KHEGAON FOR THE PURPOSE OF DIGGING WELL AND PIPELINE AS PER DEPOSITION MADE BEFORE THE ITO, WARD-2(L), AURANGABAD, TWO MARRIAGES HAVE TAKEN PLAC E IN F.Y.2006-07 & 2008-09 IN THE APPELLANT'S FAMILY, THE EXPENDITURE O N THESE COUNTS IS CONSIDERED AT RS.6,07,000/- AND THE SOURCE OF INVESTMEN T IN SHOP IS ACCEPTED TO THE EXTENT OF RS.20,00,000/- [RS.26,07,000/- (-) R S.6,07,000/-]. 6.6 IN VIEW OF THE ABOVE FACTS AND DISCUSSION, THE ADD ITION MADE BY THE A.O. OF RS.40,00,000/- ON ACCOUNT OF UNEXPLAINED INV ESTMENT IN MAKING ADVANCE FOR PURCHASE OF SHOP IS RESTRICTED TO RS.20,00,0 00/-. GROUND NOS.2 & 3 ARE PARTLY ALLOWED. 7. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE A S WELL AS THE REVENUE ARE IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : GROUNDS BY ASSESSEE : THE FOLLOWING GROUNDS ARE TAKEN WITHOUT PREJUDICE T O EACH OTHER - ON FACTS AND IN LAW, 1] THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDI TION U/S 69 TO THE EXTENT OF RS.20 LACS ON THE GROUND THAT THE ASSESSEE HAD MADE UNEXPLAINED INVESTMENT TOWARDS PURCHASE OF SHOP FROM SHRI ASHISH MUGD IYA AND HENCE, THE ADDITION WAS JUSTIFIED. 2] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT TH E SOURCES OF THE TOTAL INVESTMENT OF RS.40 LACS MADE BY THE ASSESSEE WERE DULY EX PLAINED BY HIM AND THUS, THERE WAS NO REASON TO SUSTAIN AN ADDITION OF RS.20 LACS OUT OF THE ABOVE. 3] THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH AT THE ASSESSEE IS MAINLY AN AGRICULTURIST LIVING IN A JOINT FAMILY AND SUBSTANTIAL AGRICULTURAL INCOME WAS ALSO DERIVED BY THE THREE SONS AND WIFE OF T HE ASSESSEE WHICH WAS UTILISED FOR THE PURPOSE OF MAKING THE ABOVE INVESTMEN T TOWARDS PURCHASE OF SHOP AND HENCE, THE ADDITION MADE WAS NOT JUSTIFIED. 4] THE LEARNED CIT(A) ERRED IN ESTIMATING THE AGRIC ULTURAL EXPENSES INCURRED BY THE ASSESSEE AT RS. 5,43,000/- AS AGAINST RS. 1,60,000/- AS CLAIMED BY THE APPELLANT. 4.1] WITHOUT PREJUDICE, THE ASSESSEE SUBMITS THAT THE AG RICULTURAL INCOME SHOWN IS NET AND NOT GROSS. 4.2] WITHOUT PREJUDICE, THE ASSESSEE SUBMITS THAT THE AG RICULTURAL EXPENSES ESTIMATED BY THE LEARNED CIT(A) ARE VERY HIGH AND TH E SAME MAY BE ESTIMATED AT A REASONABLE AMOUNT. 5] THE LEARNED CIT(A) ERRED IN ESTIMATING THE EXPEN DITURE INCURRED BY THE ASSESSEE ON TWO MARRIAGES IN THE ASSESSEE'S FAMILY AT RS.1 .07 LACS AS AGAINST THE EXPENDITURE OF RS.50,000/- CLAIMED BY THE ASSESSEE. 9 5.1] WITHOUT PREJUDICE, THE ASSESSEE SUBMITS THAT THE MA RRIAGE EXPENSES ESTIMATED BY THE LEARNED CIT(A) ARE VERY HIGH AND TH E SAME MAY BE ESTIMATED AT A REASONABLE AMOUNT. 5.2] WITHOUT PREJUDICE, THE APPELLANT SUBMITS THAT T HE DRAWINGS ESTIMATED BY THE LEARNED CIT(A) ARE UNREASONABLE. THE FAMILY D RAWINGS ARE MET OUT FROM AGRICULTURAL BALANCE CROPS ONLY. 6] THE APPELLANT CRAVES LEAVE TO ADD, ALTER, .AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. GROUNDS BY REVENUE : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE CIT(A) HAS ERRED IN RESTRICTING THE ADDITION MADE BY THE AO U/S. 69 OF THE ACT, AT RS. 40 LAKHS TO RS. 20 LAKHS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE CIT(A) HAS ERRED IN CONSIDERING THE VARIOUS SOURCES OF FUNDS FOR ADVANCE IN QUESTION WITHOUT APPRECIATING THE SPECIFIC FINDINGS GIVEN BY THE AO IN ASSESSMENT ORDER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE CIT(A) HAS ERRED IN CONSIDERING THE AGRICULTURAL INCOME OF RS. 1 LAKH TWICE IN THE SOURCE OF FUNDS AVAILABLE WITH THE ASSESSEE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE CIT(A) HAS ERRED IN CONSIDERING THE OPENING BALANCE IN THE CAPITAL AC COUNT OF THE ASSESSEE AS SOURCES OF FUNDS WITHOUT APPRECIATING THE FACTS THAT TH E ENTIRE SOURCES FOR THE LAST 4 YEARS HAVE ALREADY BEEN CONSIDERED BY HIM. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE CIT(A) HAS ERRED IN CONSIDERING THE ENTIRE GROSS AGRICULTURAL INCOME AS CLAIMED BY THE ASSESSEE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE FOR ESTIMATING THE NET AGRICULTURAL INCOME WITHOUT ANY EVIDENCE/PROOF IN SU PPORT OF THE SAME. 6. THE ORDER OF THE AO BE RESTORED AND THAT THE ORDE R OF THE CIT(A) MAY BE VACATED. 7. THE APPELLANT CRAVES, LEAVES, TO ADD, ALTER/AMEND ANY GROUNDS OF APPEAL AT THE TIME OF HEARING. 8. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMIT TED THAT THE ARGUMENTS ADVANCED BEFORE THE LD.CIT(A) WILL HOLD GOOD FOR THE APPEAL FILED BY THE ASSESSEE. SO FAR AS THE APPEAL FILED BY THE RE VENUE IS CONCERNED HE SUBMITTED THAT THE TAX EFFECT BEING LESS TH AN RS. 10 LAKHS THE APPEAL FILED BY THE REVENUE SHOULD BE DISMISSED. 9. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAN D HEAVILY RELIED ON THE ORDER OF THE AO. 10 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE AO MADE ADDITION OF RS .40 LAKHS U/S.69 OF THE I.T. ACT IN THE HANDS OF THE ASSESSEE ON THE GROUND THAT THE SOURCE OF ADVANCE OF RS.40 LAKHS PAID BY THE ASSESSEE T O MR. ASHISH MUGDIYA TOWARDS PURCHASE OF A SHOP COULD NOT BE EXPLA INED BY THE ASSESSEE. WE FIND THE LD.CIT(A) AFTER CONSIDERING THE VARIO US SUBMISSIONS FILED BEFORE THE AO AS WELL AS BEFORE HIM NOTED T HAT THE ASSESSEE IS HOLDING 29 ACRES OF AGRICULTURAL LAND IN HIS NAME AND IN THE NAMES OF HIS WIFE AND 3 SONS. HE HAS ALSO GIVEN A FACTUAL FINDING THAT THE ASSESSEE HAS OBTAINED GOLD LOAN ON 15-05-2007 AMOUNTING TO RS.33,000/- AND ON 17-01-2009 AMOUNTING TO RS.38,000/-, C ROP LOAN OF RS.1,42,500/- AND LOAN FROM C.S.R.S.S.K. AMOUNTING TO RS.3,00,000/ - TOTALING TO RS.5,13,000/-. HE HAS ALSO CONSIDERED LOAN FROM MAHARASHTRA BANK RS.50,000/- AND LOAN FROM ICICI BANK RS.3,73,000/-. A FTER CONSIDERING THE INCOME FROM AGRICULTURAL ACTIVITY OF THE ASSE SSEE AND HIS FAMILY MEMBERS AND THE VARIOUS LOANS RAISED AND CONSIDERIN G THE HOUSEHOLD EXPENSES AS WELL AS THE ADVANCES GIVEN BY THE ASSESSEE TO SHRI SATISH VASUNDEKAR OF LAKHEGAON FOR THE PURPOSE OF DIGGING OF WELL AND PIPELINE AMOUNTING TO RS.5 LAKHS, MARRIAGE EXPENSES OF THE 2 DAUGHTERS THAT TOOK PLACE IN F.Y. 2006-07 AND 2008-09 IN THE ASSE SSEES FAMILY, THE LD.CIT(A) DETERMINED THE AVAILABILITY OF CASH WITH THE ASSESS EE TOWARDS ADVANCE FOR PURCHASE OF SHOP AT RS.20 LAKHS. THE ABOVE REASONED ANALYSIS AND FACTUAL FINDING GIVEN BY THE LD.CIT(A) COULD NOT BE CONTROVERTED EITHER BY THE LD. DEPARTMENTAL REPRESENTA TIVE OR THE LD. COUNSEL FOR THE ASSESSEE. SINCE THE ORDER OF THE LD.CIT(A ) IS QUITE EXHAUSTIVE AND A REASONED ONE, THEREFORE, WE FIND NO INFIRM ITY IN THE SAME. ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT(A) GIVIN G PART RELIEF TO THE ASSESSEE BY SUSTAINING THE ADDITION OF RS.20 LAKHS ADD ED BY THE AO. 11 THE GROUNDS RAISED BY THE REVENUE AS WELL AS THE ASSES SEE ARE ACCORDINGLY DISMISSED. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE AS WE LL AS THE REVENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 18-12-2015. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) ! / JUDICIAL MEMBER / ACCOUNTANT MEMBER IQ.KS PUNE ; DATED : 18 TH DECEMBER, 2015. LRH'K ' (!* + / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. $ ( ) , / THE CIT(A), AURANGABAD 4. $ , / THE CIT, AURANGABAD 5. ' **+ , + , IQ.KS / DR, ITAT, A PUNE 6. / / GUARD FILE. / BY ORDER , ' * //TRUE COPY// 12 * + / SR. PRIVATE SECRETARY +, IQ.KS / ITAT, PUNE