ACIT, CHENNAI V. Shri V.N.Devadoss, CHENNAI

ITA 758/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58111 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-03-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 25-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A C JOSEPH JT
• Assessee Lawyers: K M MOHANDASS
• Keywords: Unexplained expenditure; Diversion of income
• Section: 69C; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI [BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER] I.T.A.NO. 758/MDS/2011 ASSESSMENT YEAR : 2003-04 THE ACIT CENTRAL CIRCLE I(3) CHENNAI VS SHRI V.N.DEVADOSS NO.333, POONAMALLEE HIGH ROAD CHENNAI 600 029 [PAN AAFPD4228E] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.C.JOSEPH, JT. CIT RESPONDENT BY : SHRI K.M.MOHANDASS DATE OF HEARING : 08-03-2012 DATE OF PRONOUNCEMENT : 16-03-2012 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVEN UE AGAINST THE ORDER OF THE LD.CIT(A) XII, CHENNAI, DATED 28.01.2011. 2. THE FIRST GROUND OF THIS APPEAL IS DIRECTED AGA INST THE ORDER OF THE LD.CIT(A) DELETING THE ENTIRE ADDITION TOWARDS DIVERSION OF INCOME AMOUNTING TO ` 39,99,000/- VIOLATING THE PROVISIONS OF RULE 46A O F THE INCOME-TAX RULES, 1962, BY ADMITTING ADDITIONAL EVI DENCE IN THE FORM OF SALE AGREEMENTS DATED 7.4.2003 AND 17.2.2002. I.T.A.NO. 758/11 :- 2 -: 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER DISALLOWED INTEREST OF ` 39,99,000/- ON THE GROUND THAT OUT OF THE BORROWED FUNDS, ` 2.31 CRORES WAS DIVERTED TO SISTER CONCEN, M/S V.G.N. ENTERPRISES, BY THE ASSESSEE WITHOUT CHARG ING ANY INTEREST. 4. ON APPEAL, THE LD.CIT(A) DELETED THE DISALLOWANCE ON THE GROUND THAT THE ASSESSEE HAD ADVANCED A SUM OF ` 2.31 CRORES TO M/S V.G.N. ENTERPRISES FOR PURCHASE OF LAND AT NOLLUMBU R VILLAGE, AMBATTUR TALUK, TIRUVELLORE DISTRICT, AS SALE CONSIDERATION OF ` 6.85 CRORES, RELYING ON SALE AGREEMENT DATED 7.4.2003 AND THE PR OFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31.3.2004 REFLECTING THE SAID PROPERTY AS STOCK-IN-TRADE OF THE ASSESSEE AND ALSO EVIDENCES SHOWING THAT M/S V.G.N. ENTERPRISES ADMITTED CAPITAL GAINS IN RESPEC T OF THE SAID LAND SOLD TO THE ASSESSE. 5. THE LD. DR SUBMITTED THAT THE DOCUMENTS IN THE FORM OF SALE AGREEMENT DATED 7.4.2003 AND THE PROFIT & LOSS ACCO UNT FOR THE YEAR ENDED 31.3.2004 WHERE THE PROPERTY HAS BEEN SHOWN B Y THE ASSESSEE AS STOCK-IN-TRADE WERE NOT FILED BEFORE THE ASSESSI NG OFFICER INSPITE OF REASONABLE OPPORTUNITY PROVIDED TO THE ASSESSEE AN D THAT THESE DOCUMENTS WERE FILED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE LD.CIT(A) AND THE LD.CIT(A), RELYING ON THESE DOCU MENTS, HAS DELETED THE DISALLOWANCE OF INTEREST OF ` 39,99,000/- WITHOUT ALLOWING ANY I.T.A.NO. 758/11 :- 3 -: OPPORTUNITY TO THE ASSESSING OFFICER FOR VERIFYING THE SAME. HENCE, IT WAS SUBMITTED THAT THE ORDER OF THE LD.CIT(A) SHOU LD BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 6. ON THE OTHER HAND, THE LD. A.R OF THE ASSESSEE SUB MITTED THAT THE DOCUMENTS RELIED UPON BY THE LD.CIT(A) WERE FI LED BEFORE THE ASSESSING OFFICER, BUT WERE NOT CONSIDERED BY THE A SSESSING OFFICER FOR DELAY IN SUBMISSION. FOR THIS, THE LD. A.R OF THE ASSESSEE RELIED UPON THE GROUNDS OF APPEAL TAKEN BEFORE THE LD.CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RE CORD. IN THE INSTANT CASE, WE FIND THAT THE RELIEF WAS ALLOWED BY THE L D.CIT(A) TO THE ASSESSEE BASED ON CERTAIN DOCUMENTS AND EVIDENCES W HICH ACCORDING TO THE DEPARTMENT WERE NOT FILED BEFORE THE ASSESS ING OFFICER AND ACCORDING TO THE ASSESSEE, THE SAME WERE FILED WIT H CONSIDERABLE DELAY BEFORE THE ASSESSING OFFICER AND THEREFORE, C OULD NOT BE CONSIDERED BY THE ASSESSING OFFICER. WE FIND THAT IT IS NOT IN DISPUTE THAT THE EVIDENCES AND DOCUMENTS RELIED UPON BY THE LD.CIT(A) WERE NOT CONSIDERED BY THE ASSESSING OFFICER BECAUSE OF CONSIDERABLE DELAY IN FURNISHING THE SAME BY THE ASSESSEE. IN THE AB OVE FACTS AND CIRCUMSTANCES, IN OUR CONSIDERED VIEW, TO MEET THE INTEREST OF JUSTICE, IT SHALL BE FAIR AND REASONABLE TO RESTORE THE ISSU E BACK TO THE FILE OF I.T.A.NO. 758/11 :- 4 -: THE ASSESSING OFFICER FOR ADJUDICATION AFRESH AFTER VERIFICATION AND CONSIDERATION OF ALL THE RELEVANT DOCUMENTS AND MAT ERIALS. THE ASSESSEE IS ALSO DIRECTED TO FURNISH ALL RELEVANT M ATERIALS WHICH HE WISHES TO RELY UPON AS AND WHEN CALLED FOR BY THE A SSESSING OFFICER. NEEDLESS TO MENTION THAT THE ASSESSING OFFICER SHAL L PASS THE FRESH ASSESSMENT ORDER AFTER ALLOWING REASONABLE OPPORTUN ITY OF HEARING TO THE ASSESSEE. THUS, THIS GROUND OF APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 8. GROUND NO.2 OF THE APPEAL OF THE REVENUE IS DIRECTE D AGAINST THE ORDER OF THE LD.CIT(A) DELETING THE ADDITION OF ` 1.5 LAKHS MADE BY THE ASSESSING OFFICER. 9. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS BORROWED MONEY FROM VARIOUS PERSONS. NOTICES WERE ISSUED TO THOSE PERSONS TO V ERIFY THE GENUINENESS OF THE TRANSACTION. IN THE CASE OF M/S SHANKAR PRASAD AGENCIES, KILPAUK, CHENNAI, FROM WHOM THE ASSESSEE HAD CLAIMED TO HAVE BORROWED A SUM OF ` 1.50 LAKHS IN EARLIER YEAR AND REPAID THE SAME WITH INTEREST DURING THE YEAR UNDER CONSIDERA TION, A NOTICE WAS ISSUED TO THE CREDITOR ASKING FOR CONFIRMATION FOR THE TRANSACTION WHICH WAS RETURNED BY THE POSTAL AUTHORITIES WITH THE REM ARK INCOMPLETE ADDRESS. AN INSPECTOR WAS DEPUTED TO MAKE ENQUIRI ES, WHO REPORTED I.T.A.NO. 758/11 :- 5 -: THAT IN ABSENCE OF COMPLETE ADDRESS OF THE CREDITOR HE WAS NOT ABLE TO VERIFY THE SAME. A NOTICE WAS ISSUED TO THE ASSES SEE ON 6.2.2006 REQUESTING TO FURNISH COMPLETE ADDRESS OF THIS CRED ITOR AND ON 20.2.2006, THE APPOINTED DATE FOR SUBMISSION OF THE COMPLETE ADDRESS, THE ASSESSEE FAILED TO FURNISH THE REQUIRED DETAIL S TO THE ASSESSING OFFICER. THEREFORE, THE ASSESSING OFFICER TREATED THE SUM AS UNEXPLAINED EXPENDITURE AND ADDED THE SAME TO THE I NCOME OF THE ASSESSE. 10. ON APPEAL, THE LD.CIT(A) OBSERVED THAT IN THE TAX AUDIT REPORT OF THE ASSESSEE IT CAN BE SEEN THAT ` 1.50 LAKHS WERE BORROWED FROM M/S SHANKAR PRASAD AGENCY ON 6.5.2002 THROUGH BANKING C HANNEL WHICH WAS OUTSTANDING IN THE BOOKS OF ACCOUNT OF THE AS SESSEE AT THE END OF THE YEAR AND THEREFORE, THE LD.CIT(A) HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN INVOKING THE PROVISION S OF SECTION 69C OF THE ACT AND MAKING THE ADDITION TO THE INCOME OF THE A SSESSE. 11. THE LD. DR SUPPORTED THE ORDER OF THE ASSESSING OFF ICER WHEREAS THE LD. A.R OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A). 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RE CORD. IN THE INSTANT CASE, THE ASSESSING OFFICER MADE ADDITION OF ` 1.50 LAKHS AS I.T.A.NO. 758/11 :- 6 -: UNEXPLAINED EXPENDITURE BY INVOKING THE PROVISIONS OF SECTION 69C OF THE ACT BY OBSERVING AS UNDER: 19. AS STATED IN THE ANNEXURE, THE ASSESSEE CLAIMS TO HAVE BORROWED MONEY FROM VARIOUS PERSONS AND HAD ALSO PA ID INTEREST ON THESE BORROWINGS. SEPARATE NOTICES WE RE ISSUED TO THESE PERSONS IN ORDER TO VERIFY THE GENUINENESS OF THE TRANSACTIONS. IN THE CASE OF SHRI SANKAR PRASAD AG ENCIES, KILPAUK, CHENNAI-10 WHERE THE ASSESSEE CLAIMS TO H AVE BORROWED A SUM OF ` 1,50,000/- IN THE EARLIER YEAR AND HAD REPAID THE SAME WITH INTEREST DURING THE YEAR UNDE R CONSIDERATION. A NOTICE WAS ISSUED TO THIS PERSON ASKING FOR CONFIRMATION OF THE TRANSACTIONS. THIS NOTICE WAS R ETURNED BY THE POSTAL AUTHORITIES WITH THE ENDORSEMENT 'INCO MPLETE ADDRESS'. THE INSPECTOR ATTACHED TO THIS OFFICE WAS DIRECTED TO MAKE ENQUIRIES END HE HAS ALSO REPORTED THAT IN THE ABSENCE OF THE COMPLETE ADDRESS OF THIS PARTY, HE WAS NOT I N A POSITION TO LOCATE THE CREDITOR AND ASCERTAIN THE DETAILS. A REFERENCE WAS THEREFORE ISSUED TO THE ASSESSEE ON 6.2.2006 AND IN THIS REFERENCE, THE ASSESSEE WAS REQUESTED TO FURNISH TH E COMPLETE ADDRESS OF THIS PERSON SO THAT THE GENUINE NESS OF THE TRANSACTIONS COULD BE EXAMINED. THOUGH THE CA SE WAS POSTED FOR A HEARING ON 20.2.2006, THE ASSESSEE HAS NOT FURNISHED THE DETAILS TILL DATE. AS THE OSSESSE E HAS FAILED TO DISCHARGE HIS RESPONSIBILITY OF ESTABLISHING THE I DENTITY OF THE CREDITOR AND HAS CLAIMED TO HAVE REPAID THE LOAN AMOUNT, AMOUNTING TO ` 1,50,000/- AS ON 1.4.2002 WITH INTEREST. AS THE IDENTITY OF THE CREDITOR HAS NOT BEEN ESTABL ISHED / I HAVE TO HOLD THAT THE EXPENDITURE CLAIMED BY THE ASSESS EE BY WAY OF REPAYMENT OF THE LOAN AMOUNT OF ` 1,50,000/- CAN NOT BE ALLOWED. IN TERMS OF PROVISIONS OF SECTION 69(C) OF THE ACT, THE EXPENDITURE IS THEREFORE DISALLOWED AND A SUM OF ` 1,50,000/- IS ADDED BACK TO THE INCOME RETURNED. 13. WE FIND THAT ACCORDING TO THE ASSESSING OFFICER, REPAYMENT OF ` 1.50 LAKHS OF LOAN TAKEN FROM M/S SHANKAR PRASAD A GENCIES WAS MADE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDE RATION AND AS THE MATERIAL TO ESTABLISH IDENTITY OF THE CREDITOR WAS NOT FURNISHED BEFORE HIM, HE ADDED ` 1.50 LAKHS TO THE INCOME OF THE ASSESSEE AS I.T.A.NO. 758/11 :- 7 -: UNEXPLAINED BY INVOKING THE PROVISIONS OF SECTION 6 9C OF THE ACT. WE FIND THAT ON MERE REPAYMENT OF LOAN, IT CANNOT BE HELD THAT THE ASSESSEE HAS CLAIMED EXPENDITURE OF THE LOAN AMOUN T AND THEREFORE, THE QUESTION OF DISALLOWING OF EXPENDITURE OF ` 1.50 LAKHS DOES NOT ARISE. FURTHER, THE SOURCE OF REPAYMENT OF LOAN OF ` 1.50 LAKHS WHICH WAS DULY RECORDED IN THE AUDITED BOOKS OF ACCOUNT O F THE ASSESSEE IS NOT IN DISPUTE AND THEREFORE, INVOKING OF PROVISION S OF SECTION 69C ALSO IS NOT SUSTAINABLE. FURTHER, AS THE LOAN IN QUESTI ON WAS BORROWED IN EARLIER YEAR, THE LOAN AMOUNT OF ` 1.50 LAKHS CANNOT BE ADDED TO THE INCOME OF THE ASSESSEE IN THE YEAR UNDER CONSIDERA TION UNDER ANY OTHER PROVISIONS OF THE INCOME-TAX ACT. IN THE CIR CUMSTANCES, IN OUR CONSIDERED VIEW, THE ADDITION MADE BY THE ASSESSING OFFICER IS UNSUSTAINABLE AND THEREFORE, WE CONFIRM THE ACTION OF THE LD.CIT(A) IN DELETING THE ADDITION OF ` 1.50 LAKHS. THEREFORE, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 14. GROUND NO.3 OF THE APPEAL OF THE REVENUE IS DIRECTE D AGAINST THE ORDER OF THE LD.CIT(A) DELETING THE ADDITION O F ` 1 LAKH MADE U/S 69 OF THE ACT. 15. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER MADE AN ADDITION OF ` 1 LAKH U/S 69 OF THE ACT FOR THE REASON THAT THE ASSESSEE HAD SETTLED THIS CREDIT OUTSIDE THE BOOKS OF ACCOUNT. ON I.T.A.NO. 758/11 :- 8 -: APPEAL, THE LD.CIT(A) OBSERVED THAT THE ASSESSING OFFICER HAS OBTAINED THE DETAILS FROM THE CREDITOR NAMELY, SHRI GOVINDRAM GOPALDAS, WHICH WERE AS FOLLOWS: 1. 01.04.2002 BALANCE B/F 2,00,000 2. 31.10.2002 BY CHEQUE NO.704105 1,00,000 3. 31.03.2003 BALANCE CARRIED DOWN 3,00,000 16. THE LD.CIT(A), FROM THE ABOVE TABLE, OBSERVED THAT THE ASSESSING OFFICER FAILED TO NOTE THAT THE AMOUNT OF ` 1 LAKH WAS OVER AND ABOVE ` 2 LAKHS WHICH WAS SHOWN AS OPENING BALANCE AND THA T ` 1 LAKH WAS TAKEN AS LOAN DURING THE IMPUGNED PERIOD. HE OBSERVED THAT IT WILL BE SEEN FROM THE ABOVE DETAILS THAT THE A SSESSEE HAD ACTUALLY SHOWN THE ENTIRE AMOUNT OF ` 3 LAKHS AS OUTSTANDING AGAINST THE NAME OF SHRI GOVINDRAM GOPALDAS AS AGAINST ` 2 LAKHS ONLY HELD BY THE ASSESSING OFFICER. HE, THEREFORE, HELD THAT THE SU M OF ` 1 LAKH HAD BEEN PROPERLY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AND DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 17. THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFF ICER WHEREAS THE LD. A.R OF THE ASSESSEE RELIED ON THE ORDER OF THE LD.CIT(A). 18. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RE CORD. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CLAIMED TO HAVE SETTLED THE I.T.A.NO. 758/11 :- 9 -: LOAN OF ` 1 LAKH FROM SHRI GOVINDRAM GOPALDAS AND NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AND THEREFORE, ADDED THE SAME TO THE INCOME OF THE ASSESSEE BY OBSERVING AS UNDER: 20. AS STATED IN THE ANNEXURE, THE ASSESSEE CLAIMS TO HAVE BORROWED MONIES FROM THE FOLLOWING GROUP OF PERSONS, AMONG THE 288 PERSONS MENTIONED IN THE ANNEXURE. AS PER THE ENTRY IN THE LIST MENTIONED IN ITEM NO. 46, THE ASSESSEE CLAIMS TO HAVE SETTLED THE LOAN AMOUNT OF ` 1,00,000/- FROM SHRI GOVINDRAM GOPALDAS AT DOOR NO. 32, PANTHEON R OAD, CHENNAI (PRESENTLY CARRYING ON BUSINESS AT DOOR NO. 299, PANTHEON ROAD, CHENNAI). SUMMONS U/S. 131 WERE ISSUED TO THIS PERSON ON 9.1.2006 AND IN RESPONSE TO THIS SUMMONS, THIS CREDITOR FILED A REPLY ON 3.2.2006. AS PER THE CREDITOR, THE ASSESSEE. HAD OWED A SUM OF ` 3,00,000/- AS ON 31.3.2003 AS DETAILED BELOW: 1. 01.04.2002 BALANCE B/F 2,00,000 2. 31.10.2002 BY CHEQUE NO.704105 1,00,000 3. 31.03.2003 BALANCE CARRIED DOWN 3,00,000 A REFERENCE WAS THEREFORE ISSUED TO THE ASSESSEE ON 6.2.2006 IN WHICH THE ASSESSEE WAS REQUESTED TO CLARIFY THE CORRECTNESS OF THE TRANSACTION AND THE CASE WAS POS TED FOR HEARING ON 20.2.2006. THE ASSESSEE HAS NOT FURNISHED THE DETAILS TO RECONCILE THE DISCREPANCY IN FIGURES AP PEARING IN THE ASSESSEE'S BOOKS AND THAT OF THE CREDITOR. IN THE ABSENCE OF A POSITIVE RESPONSE FROM THE ASSESSEE, I HAVE TO INFE R THAT THE ASSESSEE HAS NOT ACCOUNTED FOR THE RECEIPT OF THE C HEQUE FOR ` 1,00,000/- FROM SHRI GOVINDRAM GOPALDAS AND TH IS AMOUNT HAS NOT BEEN INCLUDED IN THE TOTAL AMOUNT OF BORROWINGS. AS SUCH THE LOAN AMOUNT OF ` 1,00,000/- HAS BEEN KEPT OUTSIDE THE BOOKS OF ACCOUNT WHICH THE A SSESSEE COULD HAVE REPAID FROM OUT OF INCOME UNDISCLOSED TO THE DEPARTMENT. AS THE CREDIT HAS NOT BEEN PROPERLY AC COUNTED FOR, I HAVE TO INFER THAT THE ENTIRE TRANSACTION H AS BEEN KEPT OUTSIDE THE BOOKS AND HENCE IT IS ASSESSABLE IN TE RMS OF PROVISIONS OF SECTION 69 OF THE ACT. THEREFORE A SU M OF ` 1,00,000/- IS ADDED BACK TO THE INCOME RETURNED. I.T.A.NO. 758/11 :- 10 -: 19. ON APPEAL, THE LD.CIT(A) HAS HELD AS UNDER: GROUND NO. 3 :- THE ASSESSING OFFICER HAS MADE AN ADDITION OF ` 1 . 00 LAKH U/S 69 OF THE INCOME-TAX ACT, 1961 FOR THE REASON THAT THE APPELLANT HAD SETTLED THIS CRED IT OUTSIDE THE BOOKS OF ACCOUNT . THE ASSESSING OFFICER HAD OBTAINED DETAILS FROM THE SAID CREDITOR AND AS COULD BE SEEN FROM THE IMPUGNE D ORDER, THE FOLLOWING IS THE POSITION. 1. 01.04.2002 BALANCE B/F 2,00,000 2. 31.10.2002 BY CHEQUE NO.704105 1,00,000 3. 31.03.2003 BALANCE CARRIED DOWN 3,00,000 THUS, THE ASSESSING OFFICER HAD FAILED TO, NOTE, TH AT FROM THE DETAILS OBTAINED FROM THE SAID CREDITOR, T HE AMOUNT OF ` 1.00 LAKH WAS OVER AND ABOVE ` .2.00 LAKHS WHICH WAS SHOWN AS OPENING BALANCE AND THAT ` 1.00 LAKH WAS TAKEN AS LOAN DURING THE IMPUGNED PERIOD. HENCE, FROM THE DETAILS AVAILABLE ON RECORD IT IS SEEN THAT THE APPELLANT HAD ACTUALLY SHOWN THE ENTIRE A MOUNT OF ` 3.00 LAKHS AS OUTSTANDING AGAINST THE NAME OF SHRI GOBINDARAM GOPALDOSS AS AGAINST ` 2.00 LAKHS ONLY HELD BY THE ASSESSING OFFICER. IN VIEW OF THE ABOVE POSITION AND IN THE LIGHT O F THE ABOVE DISCUSSIONS. I HOLD THAT THE SUM OF ` 1.00 LAKH HAD BEEN PROPERLY ACCOUNTED FOR BY THE APPELLANT IN HIS BOO KS AND HENCE, THE ADDITION MADE BY THE ASSESSING OFFICER I N RESPECT OF THIS AMOUNT STATING THAT THE LOAN WAS REPAID OUT OF INCOME UNDISCLOSED AND NOT PROPERLY ACCOUNTED AND' THAT TH E ENTIRE TRANSACTION WAS KEPT OUTSIDE THE BOOKS OF ACCOUNTS AND ASSESSED THE SAID AMOUNT U/S 69 OF THE INCOME-TAX A CT, 1961 STANDS DELETED. CONSEQUENTLY, THE ASSESSING OFFICER IS DIRECTED TO REVISE THE IMPUGNED ORDER ACCORDINGLY. THUS, THE APPELLANT SUCCEEDS IN THIS GROUND OF HIS APPEAL. 20. WE FIND THAT THE ADDITION OF ` 1 LAKH MADE BY THE ASSESSING OFFICER IS ON A WRONG FOOTING AND UNSUSTAINABLE. IT IS NOT THE CASE OF I.T.A.NO. 758/11 :- 11 -: THE REVENUE THAT DURING THE YEAR THE ASSESSEE HAS MADE ANY INVESTMENT OR PAYMENT OF ` 1 LAKH, SOURCE OF WHICH COULD NOT BE EXPLAINED BY THE ASSESSEE. FURTHER, IT IS ALSO NO T THE CASE OF THE REVENUE THAT THE ASSESSEE HAD CLAIMED TO HAVE RECE IVED ANY LOAN WHICH WAS BOGUS OR NOT GENUINE. ON THE CONTRARY, T HE CONTENTION OF THE REVENUE IS THAT THE ASSESSEE HAS GENUINELY BOR ROWED ` 1 LAKH FROM SHRI GOVINDRAM GOPALDAS AND HAS NOT RECORDED T HE SAME IN ITS BOOKS OF ACCOUNT. IN OUR CONSIDERED OPINION, IN SU CH CIRCUMSTANCES, THE INCOME-TAX ACT, 1961 DOES NOT EMPOWER THE ASSES SING OFFICER TO ADD THE GENUINE LOAN AMOUNT TO THE INCOME OF THE A SSESSEE. WE, THEREFORE, CONFIRM THE ORDER OF THE LD.CIT(A) IN D ELETING THE ADDITION OF ` 1 LAKH. THEREFORE, THIS GROUND OF APPEAL OF THE R EVENUE IS DISMISSED. 21. IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16- 03-2012. SD/- SD/- (GEORGE MATHAN) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER DATED: 16 TH MARCH, 2012 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR