DCIT, CENTRAL Cir.-1, NASHIK, Nashik V. MRS. ARUNA PRAKASH LADDHA, Nashik

ITA 817/PUN/2007

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1675 (ITAT-PUNE)
• Duration Of Justice: 9 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-01-2016
• Assessment Year: misc
• Appeal Filed On: 05-06-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S B MOREY
• Keywords: Unexplained investment; Search and seizure; Source of fund; Retrospective amendment; Valuation report; Block assessment; Tax effect; Retraction
• Section: 143(3); 133A; 133(6); 37(1); 131; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 707/PN/2007 BLOCK PERIOD: 1997-98 TO 2003-04 MRS. ARUNA PRAKASH LADDHA, KAUSHAL BUNGLOW, OPP. MEHATA HOSPITAL, S.V. ROAD, SHARANPUR, NASHIK-422002 PAN : AAXPL0464E ....... / APPELLANT ' / V/S. ASSTT. COMMISSIONER OF INCOME TAX, (CENTRAL), CIRCLE 1, NASHIK / RESPONDENT / ITA NO. 817/PN/2007 BLOCK PERIOD: 1997-98 TO 2003-04 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, NASHIK ....... / APPELLANT ' / V/S. MRS. ARUNA PRAKASH LADDHA, 6/7, FALCON PLAZA, NATIONAL URDU HIGHSCHOOL ROAD, NEAR SARDA CIRCLE, NASHIK PAN : AAXPL0464E+ / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI S.B. MOREY / DATE OF HEARING : 26-04-2016 / DATE OF PRONOUNCEMENT : 27-06-2016 2 ITA NOS. 707 & 817/PN/2007 ( / ORDER PER VIKAS AWASTHY, JM : THESE CROSS APPEALS HAVE BEEN FILED BY THE ASSESSEE AN D THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK DATED 30-03-2007 FOR THE BLOCK ASSESSMENT PERIOD 1997-98 TO 2003-04 (UP TO 09-10-2002). 2. A SEARCH AND SEIZURE ACTION U/S. 132 OF THE INCOME T AX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS CONDUCTED IN THE CASE OF LADDHA GROUP AT NASHIK. THE RESIDENTIAL AND BUSINESS PRE MISES OF THE ASSESSEE WERE SEARCHED BY THE DEPARTMENT ON 09-10-2 002. IN RESPONSE TO NOTICE DATED 10-03-2003 ISSUED U/S. 158 BC OF THE ACT THE ASSESSEE FURNISHED BLOCK RETURN ON 28-04-2003 DECLARING UNCLOSED INCOME AS NIL. THE ASSESSEE WAS REGULARLY ASSESSED TO IN COME TAX AND WAS REGULARLY FILING RETURN OF INCOME DURING THE ASSESSMENT YEARS 1997-98 TO 2003-04. THE ASSESSEE CONSTRUCTED A BUNG ALOW NAMED KAUSHAL AT NASHIK. AS PER THE MATERIAL AVAILABLE ON RE CORD, BUNGALOW WAS CONSTRUCTED DURING THE PERIOD 01-04-1997 TO 31-03 -2000 AND THE TOTAL INVESTMENT MADE BY THE ASSESSEE ON CONSTRUCTION OF BUNGALOW EXCLUDING COST OF LAND WAS DECLARED AT ` 39,90,018/-. DURING THE COURSE OF SEARCH, A STATEMENT OF SHRI PRAKASH P. LADDHA U/S. 132 (4) WAS RECORDED ON 10-10-2002. IN HIS STATEMENT SHRI PRAKASH P. LADDHA IN REPLY TO Q. NO. 37 ADMITTED THAT THE TOTAL INVESTMENT ON THE BUNGALOW IS TO THE TUNE OF ` 41,35,000/- AND THERE IS UNDERSTATEMENT OF INVESTMENT ON BUNGALOW BY ` 20 TO 25 LACS. DURING BLOCK ASSESSMENT, THE ASSESSING OFFICER REFERRED THE VALUATION OF BUNGALOW TO DEPARTMENTAL VALUATION OFFICER (DVO). THE DVO VIDE VALUATION R EPORT DATED 14-10-2004 ESTIMATED THE TOTAL COST OF CONSTRUCT ION AT 3 ITA NOS. 707 & 817/PN/2007 ` 70,43,923/-. THE ASSESSING OFFICER MADE ADDITION OF ` 36,76,275/- (I.E. DIFFERENCE BETWEEN THE VALUE DECLARED BY THE ASSESSEE AND THE VALUE OF BUNGALOW ESTIMATED BY DVO) IN THE INCOME RETURNE D BY THE ASSESSEE. THE ASSESSING OFFICER MADE FURTHER ADDITION OF ` 65,563/- ON ACCOUNT OF SHORTAGE OF CASH. THE ASSESSEE HAD CASH DE POSITS OF ` 2 LACS IN THE BANK ACCOUNT ON 02-06-2001. THE ASSESSEE COULD FURNISH DE TAILS OF CASH DEPOSITED TO THE EXTENT OF ` 1,34,437/-. THE ASSESSING OFFICER MADE ADDITION OF THE BALANCE AMOUNT AS UNEXPLAINED INVESTMENT. AGGRIEVED BY THE ASSESSMENT ORDER DATED 29-10-2004 P ASSED U/S. 158BC R.W.S. 143(3) OF THE ACT, THE ASSESSEE PREFERRED APP EAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF I NCOME TAX (APPEALS) VIDE IMPUGNED ORDER UPHELD THE FINDINGS OF ASS ESSING OFFICER IN RESPECT OF SHORTAGE OF CASH. WHEREAS, IN RESPECT OF UNEXPLAINED INVESTMENT IN KAUSHAL BUNGALOW BY THE ASSE SSEE, THE COMMISSIONER OF INCOME TAX (APPEALS) GRANTED RELIEF TO THE EXTENT OF ` 15,52,041/-. AGAINST THESE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) BOTH, THE ASSESSEE AND THE REVENUE ARE IN APPE AL BEFORE THE TRIBUNAL. 3. SHRI NIKHIL PATHAK APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED THAT ADDITION IN RESPECT OF INVESTMENT ON CONSTRUCTION OF KAUSHAL BUNGALOW HAS BEEN MADE SOLELY ON THE BASIS OF DVOS REP ORT. THE LD. AR FURTHER POINTED OUT THAT THE REPORT OF DVO WAS SOUG HT BY THE ASSESSING OFFICER BY MAKING REFERENCE U/S. 131(1)(D) AND NOT U NDER THE PROVISIONS OF SECTION 142A OF THE ACT. THUS, THE REFERENC E TO DVO ITSELF WAS INVALID. TO STRENGTHEN HIS SUBMISSION, THE LD. AR PLACED RELIANCE ON THE JUDGMENT OF HON'BLE SUPREME COURT OF INDIA IN TH E CASE OF SMT. 4 ITA NOS. 707 & 817/PN/2007 AMIYA BALA PAUL VS. COMMISSIONER OF INCOME TAX REPORTED AS 262 ITR 407 (SC). 3.1 THE LD. AR CONTENDED THAT THE ASSESSEE HAS MAINTAINE D THE ACCOUNTS FOR CONSTRUCTION OF HOUSE. THE TOTAL INVESTMEN T ON THE BUNGALOW IS ` 39.90 LACS, EXCLUDING THE COST OF LAND. DURING BLOCK ASSESSMENT PERIOD THE ASSESSING OFFICER REFERRED THE MATT ER TO THE DVO AND DVO VALUED THE SAME AT ` 70 LACS. WHILE ESTIMATING THE VALUE OF BUNGALOW THE DVO DID NOT REFER TO ANY DOCUMENT FOR VALUATION PURPOSE . THE LD. AR CONTENDED THAT NO ADDITION ON ACCOUNT OF INVE STMENT ON BUNGALOW CAN BE MADE DURING BLOCK ASSESSMENT PERIOD. DU RING REGULAR ASSESSMENT PROCEEDINGS NO MISTAKE WAS FOUND IN T HE BOOKS OF ACCOUNT OF THE ASSESSEE. EVEN DURING BLOCK ASSESSMENT PERIOD THE ASSESSING OFFICER HAS NOT REJECTED THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE. THE ONLY PAPER FOUND DURING SEARCH RELAT ING TO CONSTRUCTION OF BUNGALOW FOR ASSESSMENT YEAR 1997-98 IS WITH RESPECT TO SHAM TRANSACTION OF ` 5,200/- WHICH IS AT PAGE 163 OF THE PAPER BOOK. THE ASSESSEE STARTED MAINTAINING ACCOUNT IN RESPE CT OF INVESTMENT OF BUNGALOW FROM 1997 ONWARDS. THE DEPARTMEN T HAS ACCEPTED THE INVESTMENT IN BUNGALOW DURING REGULAR ASSES SMENT PROCEEDINGS AND NO INCRIMINATING DOCUMENT WAS FOUND DURING SEARCH WITH RESPECT TO INVESTMENT IN BUNGALOW EXCEPT FOR THE ST ATEMENT OF SHRI PRAKASH P. LADDHA. THE LD. AR CONTENDED THAT STATEMENT MADE BY SHRI PRAKASH P. LADDHA WAS NOT SUPPORTED BY ANY CORROBORA TIVE EVIDENCE AND THE SAID STATEMENT WAS SUBSEQUENTLY RETRACTED BY SHRI PRAKASH P. LADDHA ON 15-11-2002 BEFORE THE CONCLUSION OF SEARCH. T HE LD. AR SUBMITTED THAT NO ADDITION CAN BE MADE MERELY ON THE B ASIS OF STATEMENT WITHOUT ANY CORROBORATIVE EVIDENCE. IN SUPPO RT OF HIS SUBMISSIONS, THE LD. AR PLACED RELIANCE ON THE FOLLOWING DECISIONS: 5 ITA NOS. 707 & 817/PN/2007 I. COMMISSIONER OF INCOME TAX VS. S. KHADER KHAN SON, 352 IT R 480 (SC); II. COMMISSIONER OF INCOME TAX VS. S. KHADER KHAN SON, 300 IT R 157 (MAD). III. COMMISSIONER OF INCOME TAX VS. VINOD DANCHAND GHODAWAT, 247 ITR 448 (BOM); IV. SHALI HOTELS PVT. LTD. VS. ASSISTANT COMMISSIONER OF INCOME T AX, 66 TTJ (PUNE) 692; V. ESSEM INTRA-PORT SERVICES (P.) LTD. VS. ASSISTANT COMMISSION ER OF INCOME TAX, 72 ITD 228 (HYD.); 3.2 THE LD. AR FURTHER CONTENDED THAT THE COMMISSIONER O F INCOME TAX (APPEALS) HAS ERRED IN HOLDING THAT THE AMOUNT DECLARE D BY THE ASSESSEE UNDER VOLUNTARY DISCLOSURE OF INCOME SCHEME, 1 997 (VDIS) WAS NOT IN RESPECT OF KAUSHAL BUNGALOW. THE LD. AR REFERRE D TO THE STATEMENT OF INCOME DECLARED UNDER VDIS, 1997 AT PAGE 1 62 OF THE PAPER BOOK TO SHOW THAT ` 4,00,000/- WAS DECLARED DURING ASSESSMENT YEAR 1997-98 IN RESPECT OF BUNGALOW UNDER RENOVATION. I N THE DECLARATION MADE UNDER VDIS, THE ASSESSEE HAS USED THE TERM RENOVATION SINCE, THE ASSESSEE HAS CONSTRUCTED NEW BU NGALOW AFTER DEMOLISHING OLD BUILDING. THE AUTHORITIES BELOW HAVE ERRED IN DISBELIEVING THE STATEMENT OF THE ASSESSEE AND HAVE NOT GRANTED BENEFIT OF AMOUNT DECLARED UNDER VDIS, 1997 SCHEME. THE LD. AR PRAYED FOR SETTING ASIDE THE ADDITION CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IN RESPECT OF BUNGALOW KAUSHAL. 4. ON THE OTHER HAND SHRI S.B. MOREY REPRESENTING THE D EPARTMENT SUBMITTED THAT DURING BLOCK PERIOD ASSESSMENT PROCEEDING S THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAD DE POSITED CASH 6 ITA NOS. 707 & 817/PN/2007 ` 2,00,000/- IN HER BANK ACCOUNT. THE ASSESSEE WAS NOT A BLE TO EXPLAIN CASH DEPOSIT OF ` 65,563/-. THE LD. DR CONTENDED THAT INFERENCE CAN BE DRAWN FROM THE SHORTAGE OF CASH THAT THE BOOKS OF ACCO UNT MAINTAINED BY THE ASSESSEE DOES NOT SHOW TRUE AND CORRECT PICTU RE. THE EXPLANATION FURNISHED BY THE ASSESSEE THAT MONEY WAS GIV EN TO HER BY HER HUSBAND SHRI PRAKASH P. LADDHA FROM HIS UNDISCLOSED IN COME REMAINED UNPROVED. IN THE CASH FLOW SUMMARY OF SHRI PRAK ASH P. LADDHA THERE WAS NO PAYMENT OF CASH TO WIFE. 4.1 IN RESPECT OF BUNGALOW CONSTRUCTED BY THE ASSESSEE THE LD. DR SUBMITTED THAT DURING THE COURSE OF SEARCH PROCEEDING S DOCUMENTS MARKED AS A-12 AND A-19 WERE SEIZED FROM THE OFFICE PREM ISES OF M/S. PRAKASH CONSTRUWELL PVT. LTD. SHRI PRAKASH P. LADDHA IN HIS STATEMENT RECORDED U/S. 132(4) DURING THE COURSE OF SEARCH HAS AD MITTED THAT THE CASH WITHDRAWN FROM M/S. PRAKASH CONSTRUWELL PVT. LTD. ON ACCOUNT OF BOGUS EXPENSES WAS DIVERTED TOWARDS THE CONSTRUCTION OF HOUSE. SHRI PRAKASH P. LADDHA HAS ALSO ADMITTED IN HIS STATEMENT THA T INVESTMENT ON HOUSE WAS UNDER STATED BY ` 20 TO 25 LACS. THE ASSESSEE HAS NOT DISCLOSED THE HOUSE IN BALANCE SHEET FOR VARIOUS ASSESSM ENT YEARS, THEREFORE, THERE WAS NO QUESTION OF REFERRING IT TO THE DVO. 4.2 THE LD. DR CONTENDED THAT THE COMMISSIONER OF INCOM E TAX (APPEALS) HAS ERRED IN TINKERING WITH THE REPORT OF DVO. T HE DVO IS AN EXPERT IN GIVING HIS OPINION ON THE SUBJECT. THE COMMISSIO NER OF INCOME TAX (APPEALS) HAS ACCEPTED CERTAIN CLAIMS MADE BY ASSESSEE WHICH WERE NOT PUT FORTH BEFORE THE DVO. FURTHER, THE D VO HAS GIVEN THE BENEFIT OF 5% FOR SELF SUPERVISION. THE COMMISSIONER OF IN COME TAX (APPEALS) IN AN ARBITRARY AND UNJUSTIFIED MANNER HAS INCREA SED THE SAME TO 10% WITHOUT GIVING ANY VALID REASON. THE DVO HAS VALUED THE 7 ITA NOS. 707 & 817/PN/2007 BUNGALOW AT ` 68 LACS, WHEREAS THE ASSESSEE IN THE BOOKS OF ACCOUNT HAS SHOWN THE VALUE AS ` 40 LACS (APPROX.) AND THE HUSBAND OF THE ASSESSEE HAS ADMITTED THAT THERE WAS UNDERSTATEMENT OF INVESTME NT IN HOUSE BETWEEN ` 20 TO 25 LACS. THUS, THERE IS DIFFERENCE OF ` 3 TO 5 LACS ONLY BETWEEN THE VALUE ESTIMATED BY THE DVO AND THE VALUE D ECLARED BY THE ASSESSEE. IN SUPPORT OF HIS SUBMISSIONS THE LD. DR PLACED RELIANCE ON THE FOLLOWING DECISIONS : I. RAMESHCHANDRA M. LUTHRA VS. ASSISTANT COMMISSIONER OF INCOME TAX, 257 ITR 460 (GUJ); II. DEV KUMAR JAIN VS. INCOME TAX OFFICER, 4 SOT 258 (ITAT-DEL.); III. INCOME TAX OFFICER VS. FIVE STAR HEALTH CARE (P.) LTD., 42 SOT 153 (DEL.). THE LD. DR PRAYED FOR SETTING ASIDE THE FINDINGS OF COMMISSIO NER OF INCOME TAX (APPEALS) AND RESTORING THE FINDINGS OF ASSESS ING OFFICER ON THIS ISSUE. 5. THE LD. AR VEHEMENTLY REBUTTED THE SUBMISSIONS MADE ON BEHALF OF THE DEPARTMENT. THE LD. AR CONTENDED THAT SHRI PRAK ASH P. LADDHA RETRACTED FROM HIS STATEMENT. EXCEPT FOR THE STATEMENT OF SHRI PRAKASH P. LADDHA NO DOCUMENTARY EVIDENCE WAS FOUND OR SEIZED D URING SEARCH PROCEEDINGS WHICH WOULD SHOW THAT THE FUNDS FROM M/S. PRA KASH CONSTRUWELL PVT. LTD. WERE DIVERTED TOWARDS THE CONSTRUC TION OF BUNGALOW KAUSHAL. THEREFORE, NO ADDITION CAN BE MADE ON ACCOUNT OF ALLEGED DIVERSION OF FUNDS FOR THE CONSTRUCTION OF HOUSE. TH E LD. AR FURTHER SUBMITTED THAT NO ADDITION CAN BE MADE IN THE BLO CK ASSESSMENT MERELY ON THE BASIS OF STATEMENT. IN SUPPO RT OF HIS CONTENTIONS THE LD. AR PLACED RELIANCE ON THE DECISION OF CO -ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF MR. SANTOSH V. SHETTY VS. ASSTT. 8 ITA NOS. 707 & 817/PN/2007 COMMISSIONER OF INCOME TAX IN ITA NO. 213/PN/2005 FOR THE BLOCK PERIOD 01-04-1996 TO 23-07-2002 DECIDED ON 11-08-2005 . THE LD. AR FURTHER CONTENDED THAT THE CASE OF THE ASSESSEE IS ON A BETTER FOOTING AS THE RETRACTION MADE BY SHRI PRAKASH P. LADDHA WAS DURING PERIOD WHEN SEARCH HAS NOT CONCLUDED, IN THE CASE OF JYOTICHAND BHA ICHAND SARAF & SONS PVT. LTD. VS. DCIT REPORTED AS 139 ITD 10 (PUNE), THE TRIBUNAL ACCEPTED THE RETRACTION EVEN AFTER THE PERIOD OF ONE YEAR. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENT ATIVES OF RIVAL SIDES AT LENGTH AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO CONSIDERED THE DOCUMENTS AND DECISIO NS REFERRED BY BOTH THE SIDES. THE MAIN ISSUE IN THE CROSS APPEALS F ILED BY THE ASSESSEE AND THE REVENUE IS WITH RESPECT TO VALUATION O F BUNGALOW NAMED KAUSHAL, WHICH WAS CONSTRUCTED BY THE ASSESSE E DURING THE PERIOD 1997 TO 2000. THE ASSESSEE HAD DECLARED THE VA LUE OF INVESTMENT IN BUNGALOW, EXCLUDING THE COST OF LAND AS ` 39,90,018/- HOWEVER, THE COST INCLUDES THE COST OF FURNISHING, FURNITUR E, ELECTRONIC GOODS, KITCHEN APPLIANCES ETC. DURING THE BLOCK ASSESSMEN T PERIOD THE ASSESSING OFFICER REFERRED THE VALUATION OF BUNGALOW TO DVO WHO ESTIMATED THE TOTAL COST OF CONSTRUCTION AT ` 70,43,923/- EXCLUDING THE COST OF LAND, FURNITURE, ELECTRONIC ITEMS, KITCHEN APPLIANCES ETC. 7. THE FIRST ARGUMENT RAISED BY THE LD. AR OF THE ASSESS EE ASSAILING THE ADDITION CONFIRMED BY THE COMMISSIONER OF INCOME TAX (A PPEALS) IN RESPECT OF HOUSE IS THAT THE ASSESSING OFFICER HAS MADE R EFERENCE TO DVO U/S. 131(1)(D) OF THE ACT. THE ASSESSING OFFICER CANNOT IS SUE A COMMISSION FOR SEEKING VALUATION OF HOUSE FROM THE DVO UNDE R THE PROVISIONS OF SECTION 131(1)(D) OF THE ACT. THE AUTHORITIES BE LOW HAVE REJECTED THE OBJECTION RAISED BY THE ASSESSEE ON THE GROUND THAT 9 ITA NOS. 707 & 817/PN/2007 SUBSEQUENT TO THE REFERENCE MADE TO DVO U/S. 131(1)(D) OF THE ACT, THE ASSESSING OFFICER VIDE LETTER DATED 30-09-2004 DURING THE PENDENCY OF SUCH REFERENCE HAS ASKED THE DVO TO TREAT THE EARLIER REFERENCE UNDER THE PROVISIONS OF SECTION 142A(1) OF THE ACT. A PERUSAL OF RECORDS SHOW THAT THE ASSESSING OFFICER INITIALLY MADE REFERENCE TO THE D VO U/S. 131(1)(D) OF THE ACT VIDE LETTER DATED 26-05-2003. DURING T HE PENDENCY OF SUCH VALUATION, THE PROVISIONS OF SECTION 142A WERE INSER TED BY THE FINANCE (NO. 2) ACT, 2004 WITH RETROSPECTIVE EFFECT FROM 15-1 1-1972. THE ASSESSING OFFICER, THEREAFTER, VIDE LETTER DATED 30-09- 2004 ASKED THE DVO TO TREAT THE EARLIER REFERENCE MADE FOR VALUATION UNDER THE NEWLY INSERTED PROVISIONS OF SECTION 142A(1) OF THE ACT. TH E DVO SHORTLY THEREAFTER SENT HIS VALUATION REPORT TO THE AS SESSING OFFICER ON 14-10-2004. A PERUSAL OF THE REPORT AT PAGES 88 TO 10 1 OF THE PAPER BOOK SHOWS THAT THAT THE VALUATION HAS BEEN DONE IN PU RSUANCE TO REFERENCE MADE BY ASSESSING OFFICER U/S. 131(1)(D) OF THE ACT . ALTHOUGH, IT HAS BEEN MENTIONED IN THE ASSESSMENT ORDER THAT THE DVO VIDE COMMUNICATION DATED 20-10-2004 HAS CLARIFIED THAT THE VALUATION HAS BEEN PREPARED UNDER THE PROVISIONS OF SECTION 142A(2) OF THE ACT. 8. THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF S MT. AMIYA BALA PAUL VS. COMMISSIONER OF INCOME TAX (SUPRA) IN AN ELABOR ATE MANNER HAS MADE A DISTINCTION BETWEEN THE ENQUIRY MADE BY THE VALUATION OFFICER AND THE ASSESSING OFFICER WHO IS VESTED WITH THE POWERS TO ENQUIRE INTO THE NECESSARY FACTS FOR THE PURP OSE OF ASSESSING THE INCOME OF THE ASSESSEE. THE HONBLE APEX COURT IN T HE SAID CASE HAS CLEARLY HELD THAT THE ASSESSING OFFICER IS NOT COMPETE NT TO CALL FOR REPORT FROM VALUATION OFFICER U/S. 131 OF THE ACT. THE PO WER OF INQUIRY GRANTED TO ASSESSING OFFICER U/S. 131(1) AND 133(6) DOES N OT INCLUDE 10 ITA NOS. 707 & 817/PN/2007 POWER TO REFER A MATTER TO THE VALUATION OFFICER. THE HO NBLE APEX COURT HELD : .........................BUT CAN THE ASSESSING OFF ICER OTHERWISE MAKE A REFERENCE TO A VALUATION OFFICER FOR GENERALLY COMP UTING THE ASSESSEE'S TAXABLE INCOME ? THE RESPONDENTS SAY HE CAN, AND HA VE REFERRED US TO SECTIONS 131(1) AND 133(6) OF THE ACT. SECTION 131( 1) OF THE ACT IS IN PARI MATERIA WITH SECTION 37(1) OF THE WEALTH-TAX ACT AN D SECTION 133(6) OF THE ACT IS SUBSTANTIALLY SIMILAR TO SECTION 38 OF THE W EALTH-TAX ACT. ON A PARITY OF OUR EARLIER REASONING, THE POWER OF THE A SSESSING OFFICER UNDER THE SECTIONS 131(1) AND 133(6) OF THE INCOME-TAX AC T IS DISTINCT FROM AND DOES NOT INCLUDE THE POWER TO REFER A MATTER TO THE VALUATION OFFICER UNDER SECTION 55A. NOR DOES THE THIRD SECTION, VIZ. , SECTION 142(2), ON WHICH RELIANCE HAS BEEN PLACED BY THE RESPONDENTS A LLOW HIM TO DO SO. SECTION 142(2) OF THE ACT PROVIDES : 'FOR THE PURPOSE OF OBTAINING FULL INFORMATION IN R ESPECT OF THE INCOME OR LOSS OF ANY PERSON, THE ASSESSING OFFICER MAY MAKE SUCH ENQUIRY AS HE CONSIDERS NECESSARY.' THE COMMON FEATURE OF SECTIONS 133(6) AND 142(2) IS THAT THE ASSESSING OFFICER IS THE FACT-FINDING AUTHORITY. IT IS HIS OPINION ON THE BASIS OF THE FACTS AS FOUND ON AN ENQUIRY CONDUCTED BY HIMSELF WHICH RESULTS IN THE ASSESSMENT ORDER. A REPORT BY THE VA LUATION OFFICER UNDER SECTION 55A IS ON THE OTHER HAND THE OUTCOME OF AN I NQUIRY HELD BY THE VALUATION OFFICER HIMSELF AND REFLECTS HIS OPINION ON THE EVIDENCE BEFORE HIM. SUCH A REPORT WOULD NOT BE THE RESULT OF AN IN QUIRY BY THE ASSESSING OFFICER UNDER THE PROVISIONS OF SECTION 133(6) OR S ECTION 142(2). IT IS TRUE THAT THE ASSESSING OFFICER IS NOT BOUND BY STRICT R ULES OF EVIDENCE AND A REPORT OF A VALUATION OFFICER UNDER SECTION 55A MAY BE CONSIDERED BY THE ASSESSING OFFICER AS A PIECE OF EVIDENCE, IF IT IS RELEVANT (SEE CIT V. EAST COAST COMMERCIAL CO. LTD. [1967] 63 ITR 449, 457 (S C)). HOWEVER, THE POWER OF INQUIRY GRANTED TO AN ASSESSING OFFICER UN DER SECTIONS 133(6) AND 142(2) DOES NOT INCLUDE THE POWER TO REFER THE MATTER TO THE VALUATION OFFICER FOR AN ENQUIRY BY HIM. 9. IN THE PRESENT CASE AS HAS BEEN POINTED OUT EARLIER THE ASSESSING OFFICER INITIALLY MADE REFERENCE TO DVO UNDER THE PROVISIONS OF SECTION 131(1)(D) ON 26-05-2003 AND THEREAFTER VIDE COMMUNICATION D ATED 30-09-2004 ASKED THE DVO TO TREAT THE EARLIER REFERENC E AS UNDER THE 11 ITA NOS. 707 & 817/PN/2007 NEWLY INSERTED SECTION 142A OF THE ACT. THE FIRST REFERE NCE MADE BY ASSESSING OFFICER ON 26-05-2003 WAS ITSELF VOID-AB-INITIO. THE REFORE, THE ASSESSING OFFICER COULD NOT HAVE RECTIFIED THE REFERENCE BY SIMPLY WRITING A LETTER TO TREAT THE EARLIER REFERENCE U/S. 142A OF THE ACT. THE PROVISIONS OF SECTION 142A WERE INSERTED IN THE ACT (ON 10 -09-2004) MUCH AFTER THE REFERENCE WAS MADE BY ASSESSING OFFICER, ALB EIT WITH RETROSPECTIVE EFFECT FROM 15-11-1972. THE RIGHT COURSE FOR ASSESSING OFFICER WAS TO MAKE A FRESH REFERENCE TO DVO UNDER NEWLY INSERTED SECTION 142A OF THE ACT. THE HON'BLE APEX COURT HAS HE LD IN UNAMBIGUOUS TERMS THAT ASSESSING OFFICER HAS NO POWER U /S. 131(1), 133(6) OR U/S. 142(2) TO REFER THE MATTER TO THE VALUATION OFFICER FOR AN ENQUIRY BY LATTER. THUS, THE REFERENCE MADE BY ASSESSING OFFICER IN FIRST INSTANCE IS BAD IN LAW. 10. THE SECOND GROUND RAISED BY THE LD. AR OF THE ASSES SEE AGAINST THE ADDITION MADE IN RESPECT OF THE COST OF BUNGALOW IS TH AT THE ADDITION HAS BEEN MADE MERELY ON THE REPORT OF DVO WITH OUT THEIR BEING ANY INCRIMINATING MATERIAL FOUND AND SEIZED DURING THE SEARCH PROCEEDINGS. IT IS A WELL SETTLED LAW THAT DURING THE ASSE SSMENT PROCEEDINGS POST SEARCH, ADDITION CAN BE MADE ONLY ON T HE BASIS OF INCRIMINATING DOCUMENTS FOUND AND SEIZED DURING SEARCH AND SURVEY. IN THE PRESENT CASE THE ADDITION HAS BEEN MADE ON ACC OUNT OF UNDISCLOSED INVESTMENT IN BUNGALOW ON THE BASIS OF DVO REP ORT AND STATEMENT OF SHRI PRAKASH P. LADDHA RECORDED U/S. 132(4) OF THE ACT. SHRI PRAKASH P. LADDHA IN HIS STATEMENT WHILE REPLYING TO Q. NO. 37 ADMITTED THAT THERE WAS UNDERSTATEMENT OF INVESTMENT IN BUNGALOW BY ` 20 TO 25 LACS. THE RELEVANT EXTRACT OF THE STATEMENT O F SHRI PRAKASH P. LADDHA IS AS UNDER : 12 ITA NOS. 707 & 817/PN/2007 Q. NO. 37. PLEASE FURNISH COMPLETE DETAILS OF YOUR BUNGALOW KAUSHAL AT SHARANPUR ROAD, NASHIK I.E. TOTAL INVESTMENT IN CONSTRUCTION, INTERIORS, FURNITURE AND THE SOURCE OF FUNDS OF SUCH INVESTMEN T. ANS. THE PLOT WAS PURCHASED IN THE YEAR 1994. CONS TRUCTION STARTED FROM 1998 TO 2000-01 TOTAL INVESTMENT IS TO THE TUN E OF RS.41,35,000/- THE BREAK-UP UNDER VARIOUS HEADS IS AS UNDER: CONSTRUCTION A/C 15,45,000/- INTERIOR EXPENSES 4,64,000/- INSURANCE 2,300/- FURNITURE 4,90,000/- HOME APPLIANCES 1,50,000/- ELECTRIC FITTING 2,39,000/- THE CONSTRUCTION IS 5500 SQ. FTS. HERE I ADMIT THAT THIS INVESTMENTS ARE UNDERSTATED AND ACCORDING TO ME AROUND RS.20,00,000 /- TO 25,00,000/- WHICH IS FROM THE AMOUNTS WITHDRAWN FROM THE P.C.P.L . BY INFLATION OF EXPENSES. THE EXACT DETAILS WILL BE FILED ALONG WI TH THE BLOCK RETURN. SUBSEQUENTLY, SHRI PRAKASH P. LADDHA ON 15-11-2002 RET RACTED FROM HIS STATEMENT RECORDED DURING SEARCH. IT IS ALSO NO T DISPUTED THAT APART FROM THE STATEMENT OF SHRI PRAKASH P. LADDHA THER E IS NO OTHER DOCUMENT ON RECORD WHICH WOULD SHOW THAT THE ASSESSEE HAD MADE INVESTMENT OF ` 20 TO 25 LACS OVER AND ABOVE THE AMOUNT DECLARED IN TH E BOOK OF ACCOUNTS FOR THE CONSTRUCTION OF BUNGALOW. THE C BDT HAS DEPRECIATED THE PRACTICE OF MAKING ADDITION MERELY ON THE BASIS OF STATEMENT RECORDED DURING SEARCH/SURVEY PROCEEDINGS A LONE. THE RELEVANT EXTRACT OF THE CBDT INSTRUCTIONS DATED 10.03.2 003 AND 18.12.2014 ARE REPRODUCED HERE-IN-BELOW :- CONFESSION OF ADDITIONAL INCOME DURING THE COURSE OF SEARCH & SEIZURE AND SURVEY OPERATION F. NO. 286/2/2003-IT (INV) 13 ITA NOS. 707 & 817/PN/2007 GOVERNMENT OF INDIA MINISTRY OF FINANCE & COMPANY AFFAIRS DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES ROOM NO. 254/NORTH BLOCK, NEW DELHI, THE 10TH MARCH , 2003 TO ALL CHIEF COMMISSIONERS OF INCOME TAX, (CADRE CONTR A) & ALL DIRECTORS GENERAL OF INCOME TAX INV. SIR SUBJECT : CONFESSION OF ADDITIONAL INCOME DURING TH E COURSE OF SEARCH & SEIZURE AND SURVEY OPERATION -REGARDING INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHER E ASSESSEES HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE U NDISCLOSED INCOME DURING THE COURSE OF THE SEARCH & SEIZURE AND SURVE Y OPERATIONS. SUCH CONFESSIONS, IF NOT BASED UPON CREDIBLE EVIDENCE, A RE LATER RETRACTED BY THE CONCERNED ASSESSEES WHILE FILING RETURNS OF INC OME. IN THESE CIRCUMSTANCES, ON CONFESSIONS DURING THE COURSE OF SEARCH & SEIZURE AND SURVEY OPERATIONS DO NOT SERVE ANY USEFUL PURPOSE. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND CONCENTRATIO N ON COLLECTION OF EVIDENCE OF INCOME WHICH LEADS TO INFORMATION ON WH AT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE T HE INCOME TAX DEPARTMENTS. SIMILARLY, WHILE RECORDING STATEMENT D URING THE COURSE OF SEARCH IT SEIZURES AND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSION AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSELY. FURTHER, IN RESPECT OF PENDING ASSESSMENT PROCEEDIN GS ALSO, ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCES/MATERIALS G ATHERED DURING THE COURSE OF SEARCH/SURVEY OPERATIONS OR THEREAFTER WH ILE FRAMING THE RELEVANT ASSESSMENT ORDERS YOURS FAITHFULLY, SD/- (S. R. MAHAPATRA] UNDER SECRETARY (INV. II) ***************** ADMISSIONS OF UNDISCLOSED INCOME UNDER COERCION/PRE SSURE DURING SEARCH/SURVEY F. NO. 286/98/2013-IT (INV.II) 14 ITA NOS. 707 & 817/PN/2007 GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES ROOM NO. 265A, NORTH BLOCK NEW DELHI, THE 18TH DECEMBER, 2014 TO 1. ALL PRINCIPAL CHIEF COMMISSIONERS OF INCOME TAX 2. ALL CHIEF COMMISSIONERS OF INCOME TAX 3. ALL DIRECTORS GENERAL OF INCOME TAX (INV.) 4. DIRECTOR GENERAL OF INCOME TAX (I & CI), NEW DEL HI SUBJECT: ADMISSIONS OF UNDISCLOSED INCOME UNDER COE RCION/PRESSURE DURING SEARCH/SURVEY REG. REF: 1) CBDT LETTER F. NO. 286/57/2002-IT (INV.II) DT. 03-07-2002 2) CBDT LETTER F. NO. 286/2/2003-IT (INV.11) DT. 10 -03-2003 3) CBDT LETTER F. NO. 286/98/2013-IT (INV.11) DT. 0 9-Q1-2014 SIR/MADAM, INSTANCES/COMPLAINTS OF UNDUE INFLUENCE/COERCION HA VE COME TO NOTICE OF THE CBDT THAT SOME ASSESSEES WERE COERCED TO ADMIT UNDISCLOSED INCOME DURING SEARCHES/SURVEYS CONDUCTED BY THE DEP ARTMENT. IT IS ALSO SEEN THAT MANY SUCH ADMISSIONS ARE RETRACTED IN THE SUBSEQUENT PROCEEDINGS SINCE THE SAME ARE NOT BACKED BY CREDIB LE EVIDENCE. SUCH ACTIONS DEFEAT THE VERY PURPOSE OF SEARCH/SURVEY OP ERATIONS AS THEY FAIL TO BRING THE UNDISCLOSED INCOME TO TAX IN A SUSTAIN ABLE MANNER LEAVE ALONE LEVY OF PENALTY OR LAUNCHING OF PROSECUTION. FURTHER, SUCH ACTIONS SHOW THE DEPARTMENT AS A WHOLE AND OFFICERS CONCERN ED IN POOR LIGHT 2. I AM FURTHER DIRECTED TO INVITE YOUR ATTENTION T O THE INSTRUCTIONS/GUIDELINES ISSUED BY CBDT FROM TIME TO TIME, AS REFERRED ABOVE, THROUGH WHICH THE BOARD HAS EMPHASIZED UPON THE NEED TO FOCUS ON GATHERING EVIDENCES DURING SEARCH/SURVEY AND TO STRICTLY AVOID OBTAINING ADMISSION OF UNDISCLOSED INCOME UNDER COE RCION/UNDUE INFLUENCE. 3. IN VIEW OF THE ABOVE, WHILE REITERATING THE AFOR ESAID GUIDELINES OF THE BOARD, I AM DIRECTED TO CONVEY THAT ANY INSTANCE OF UNDUE INFLUENCE/COERCION IN THE RECORDING OF THE STATEMEN T DURING SEARCH/SURVEY/OTHER PROCEEDING UNDER THE I.T. ACT, 1961 AND/OR RECORDING A DISCLOSURE OF UNDISCLOSED INCOME UNDER UNDUE PRESSURE/ COERCION SHALL BE VIEWED BY THE BOARD ADVERSELY. 4. THESE GUIDELINES MAY BE BROUGHT TO THE NOTICE OF ALL CONCERNED IN YOUR REGION FOR STRICT COMPLIANCE. 15 ITA NOS. 707 & 817/PN/2007 5. I HAVE BEEN FURTHER DIRECTED TO REQUEST YOU TO C LOSELY OBSERVE/OVERSEE THE ACTIONS OF THE OFFICERS FUNCTIONING UNDER YOU I N THIS REGARD. 6. THIS ISSUES WITH APPROVAL OF THE CHAIRPERSON, CB DT (K. RAVI RAMCHANDRAN) DIRECTOR (INV.)-II, CBDT 11. THE HONBLE MADRAS HIGH COURT IN THE CASE OF COMMISS IONER OF INCOME TAX VS. S. KHADER KHAN SON REPORTED AS 300 IT R 157 (MAD) HELD AS UNDER : 7. FROM THE FOREGOING DISCUSSION, THE FOLLOWING PR INCIPLES CAN BE CULLED OUT : (I) AN ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE AND IT IS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT AND THAT THE ASSESSEE SHOULD BE GIVEN A PROPER OPPORTUNITY TO SHOW THAT THE BOOKS O F ACCOUNT DO NOT CORRECTLY DISCLOSE THE CORRECT STATE OF FACTS, VIDE DECISION OF THE APEX COURT IN PULLANGODE RUBBER PRODUCE CO. LTD. V. STATE OF K ERALA [1973] 91 ITR 18 ; (II) IN CONTRADISTINCTION TO THE POWER UNDER SECTIO N 133A, SECTION 132(4) OF THE INCOME-TAX ACT ENABLES THE AUTHORIZED OFFICER T O EXAMINE A PERSON ON OATH AND ANY STATEMENT MADE BY SUCH PERSON DURING S UCH EXAMINATION CAN ALSO BE USED IN EVIDENCE UNDER THE INCOME-TAX A CT. ON THE OTHER HAND, WHATEVER STATEMENT IS RECORDED UNDER SECTION 133A OF THE INCOME- TAX ACT IS NOT GIVEN ANY EVIDENTIARY VALUE OBVIOUSL Y FOR THE REASON THAT THE OFFICER IS NOT AUTHORISED TO ADMINISTER OATH AN D TO TAKE ANY SWORN STATEMENT WHICH ALONE HAS EVIDENTIARY VALUE AS CONT EMPLATED UNDER LAW, VIDE PAUL MATHEWS AND SONS V. CIT [2003] 263 I TR 101 (KER) ; (III) THE EXPRESSION 'SUCH OTHER MATERIALS OR INFOR MATION AS ARE AVAILABLE WITH THE ASSESSING OFFICER' CONTAINED IN SECTION 15 8BB OF THE INCOME-TAX ACT, 1961, WOULD INCLUDE THE MATERIALS GATHERED DUR ING THE SURVEY OPERATION UNDER SECTION 133A, VIDE CIT V. G. K. SEN NIAPPAN [2006] 284 ITR 220 (MAD) ; (IV) THE MATERIAL OR INFORMATION FOUND IN THE COURS E OF SURVEY PROCEEDING COULD NOT BE A BASIS FOR MAKING ANY ADDITION IN THE BLOCK ASSESSMENT, VIDE DECISION OF THIS COURT IN T. C. (A) NO. 2620 O F 2006 (BETWEEN CIT V. S. AJIT KUMAR [2008] 300 ITR 152 (MAD) ; (V) FINALLY, THE WORD 'MAY' USED IN SECTION 133A(3) (III) OF THE ACT, VIZ., 'RECORD THE STATEMENT OF ANY PERSON WHICH MAY BE US EFUL FOR, OR RELEVANT TO, ANY PROCEEDING UNDER THIS ACT', AS ALREADY EXTR ACTED ABOVE, MAKES IT CLEAR THAT THE MATERIALS COLLECTED AND THE STATEMEN T RECORDED DURING THE SURVEY UNDER SECTION 133A ARE NOT CONCLUSIVE PIECE OF EVIDENCE BY ITSELF. 16 ITA NOS. 707 & 817/PN/2007 8. FOR ALL THESE REASONS, PARTICULARLY, WHEN THE CO MMISSIONER AND THE TRIBUNAL FOLLOWED THE CIRCULAR OF THE CENTRAL B OARD OF DIRECT TAXES DATED MARCH 10, 2003, EXTRACTED ABOVE, FOR ARRIVING AT THE CONCLUSION THAT THE MATERIALS COLLECTED AND THE STATEMENT OBTAI NED UNDER SECTION 133A WOULD NOT AUTOMATICALLY BIND UPON THE ASSESSEE , WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE TRIBU NAL. THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF COMMISS IONER OF INCOME TAX VS. S. KHADER KHAN SON REPORTED AS 352 ITR 480 (SC) HAS UPHELD THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE AFORESAID CASE. 12 IN VIEW OF THE FACT THAT NO INCRIMINATING DOCUMENT WAS SEIZED DURING SEARCH SHOWING UNDISCLOSED INVESTMENT IN BUNGALOW, N O ADDITION CAN BE MADE MERELY ON THE BASIS OF STATEMENT MADE DURING THE COURSE OF SEARCH PROCEEDINGS ESPECIALLY WHEN THE STATEM ENT HAS BEEN RETRACTED. THUS, IN VIEW OF THE DECISIONS DISCUSSED ABOVE AND THE FACTS OF THE PRESENT CASE, WE ARE OF THE CONSIDERED OPINION THAT NO ADDITION CAN BE MADE IN RESPECT OF UNDISCLOSED INVESTMENT IN THE HOUSE. 13. DURING THE COURSE OF SUBMISSIONS, THE LD. DR HAS REFERRE D TO THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF RAMESHCHANDRA M. LUTHRA VS. ASSISTANT COMMISSIONER OF INC OME TAX (SUPRA). THE HON'BLE HIGH COURT IN THE AFORESAID CASE HAS OBSERVED THAT IT IS NECESSARY THAT EVERY FACT FOR AND AGAINST THE ASSESSEE MUST BE CONSIDERED WITH DUE CARE BY THE TRIBUNAL AND IT MUST GIVE ITS FINDINGS IN A MANNER WHICH WOULD CLEARLY INDICATE WHAT WERE THE Q UESTIONS WHICH AROSE FOR DETERMINATION, WHAT WAS THE EVIDENCE PRO AND CONTRA IN REGARD TO EACH ONE OF THEM. THE HON'BLE HIGH COURT HAS FURTHER OBSERVED THAT IT IS THE DUTY TO TRIBUNAL TO ASCERTAIN TH E REASONS WHICH WERE GIVEN BY THE COMMISSIONER OF INCOME TAX (APPEALS) IN T HE ORDER. THE JUDGMENT CITED BY THE LD. DR IS NOT DIRECTLY RELATED TO THE ISSUE. 17 ITA NOS. 707 & 817/PN/2007 HOWEVER, THE PRINCIPLE LAID DOWN BY THE HONBLE HIGH COUR T IS FOLLOWED WHILE DECIDING THE APPEALS BY THE TRIBUNAL. 14. THE ASSESSEE HAS RAISED ANOTHER ISSUE IN ITS APPEAL WITH REG ARD TO CONFIRMING OF ADDITION OF ` 65,563/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN BANK. DURING THE COURSE OF SEARCH CASH DEPO SITS OF ` 2 LACS ON 02-06-2001 WAS FOUND IN THE BANK ACCOUNT OF THE ASS ESSEE. THE ASSESSEE COULD EXPLAIN DEPOSITS OF ` 1,34,437/-. IN RESPECT OF REMAINING AMOUNT OF ` 65,563/-, THE ASSESSEE STATED THAT THE SAID AMOUNT WAS RECEIVED FROM HER HUSBAND SHRI PRAKASH P. LADDHA FROM HIS UNDISCLOSED INCOME. THE LOWER AUTHORITIES HAVE GIVEN A CAT EGORIC FINDING THAT IN THE CASH FLOW STATEMENT OF SHRI PRAKASH P. L ADDHA, HUSBAND OF THE ASSESSEE THERE IS NO ENTRY WHICH WOULD S UBSTANTIATE THE CONTENTIONS OF THE ASSESSEE. THEREFORE, THE AUTHORITIES BELOW REJECTED THE EXPLANATION FURNISHED BY THE ASSESSEE AND MADE THE ADDITION. EVEN BEFORE US, NEITHER THE ASSESSEE HAS BEEN ABLE TO S UBSTANTIATE THE DEPOSIT OF REMAINING UNEXPLAINED CASH NOR THE LD. AR OF THE ASSESSEE COULD CONTROVERT THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE. ACCORDINGLY, THE ADDITION OF ` 65,563/- ON ACCOUNT OF SHORTAGE OF CASH IS CONFIRMED. 15. NO OTHER ISSUE WAS RAISED BY THE LD. AR OF THE ASSE SSEE. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS PARTLY ACCEPTED. 16. THE DEPARTMENT IN APPEAL HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE ADDITION OF ` 15,52,041/- ON ACCOUNT OF CERTAIN ADJUSTMENTS AGAINST TH E VALUATION OF HOUSE PROPERTY. THE TAX EFFECT IN THE APPEAL BY DEPAR TMENT IS LESS THAN ` 10 LACS. THE CBDT VIDE CIRCULAR NO. 21/2015, DATED 10-12 -2015 18 ITA NOS. 707 & 817/PN/2007 HAS RAISED THE MONETARY LIMIT OF TAX EFFECT FOR FILING OF APPE ALS BY THE DEPARTMENT BEFORE THE TRIBUNAL TO ` 10 LAKHS. THE CIRCULAR APPLIES TO THE APPEALS TO BE FILED BY THE DEPARTMENT IN FUTURE, AS WE LL AS THE APPEALS PENDING BEFORE THE TRIBUNAL. THUS, IN VIEW OF THE CB DT CIRCULAR THE PRESENT APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON MONDAY, THE 27 TH DAY OF JUNE, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 27 TH JUNE, 2016 RK ()*%+,#-#.+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-I, NASHIK 4. ' / THE CIT(CENTRAL), NAGPUR 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE