Dadasaheb Haribhau Gondkar, Ahmednagar V. ITO, Ward 1, Ahmednagar

ITA 824/PUN/2013

• Counselvise Citation: 82424514 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 09-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Business income; Income from undisclosed sources; Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.824/PN/2013 ASSESSMENT YEAR : 2009-10 DADASAHEB HARIBHAU GONDKAR C/O K D BHANDARI, TAX PRACTITIONERS, B-3, ANAND PARK, SARASNAGAR ROAD, AHMEDNAGAR. APPELLANT PAN: AENPG8229A VS. THE INCOME TAX OFFICER, WARD 1, AHMEDNAGAR RESPONDENT APPELLANT BY : B.B. MANE RESPONDENT BY : SANTOSH KUMAR DATE OF HEARING : 04-02-2015 DATE OF PRONOUNCEMENT : 20-02-2015 O R D E R PER SUSHMA CHOWLA, J.M: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF C IT(A)-I, PUNE, DATED 31.01.2013 RELATING TO ASSESSMENT YEAR 2009 -10 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED COMMISSIONER OF INCOME TAX APPEAL (LD. CIT (A) AND LEARNED ASSESSING OFFICER (LD. AO) ERRED UNDER CIRCUMSTANCES AND FACTS OF THE CASE AND IN LAW BY U PHOLDING AND MAKING ADDITION OF RS.1,81,819/- TO THE TRADING RESU LTS BY REJECTING BOOKS OF ACCOUNTS OF APPELLANT AND ADOPTIN G NET PROFIT @ 2.50% OF SALES. ADDITION OF RS.21,30,000/- AS INCOME FROM UNDISCLOSE D SOURCE REPRESENTING UNEXPLAINED INVESTMENT.: 2 ITA NO.824/PN/2013 DADASAHEB HARINHAU GONDKAR 2. THE LD. CIT (A) AND LD. AO ERRED UNDER CIRCUMSTANCES AND FACT S OF THE CASE AND IN LAW NOT APPRECIATING THAT APPELLAN T AUDITED BALANCE SHEET AS ON 31 ST MARCH 2009 DISCLOSES UNDER THE HEAD INVESTMENT, PLOT ADVANCE OF RS.39,00,500/-. 3. THE LD. CIT (A) AND LD. AO ERRED UNDER CIRCUMSTANCES AND FACTS OF THE CASE AND IN LAW WITHOUT APPRECIATING THAT APPELLANT BEING AGRICULTURALIST HE HAS INVESTED ACCUMULATED CASH AGRIC ULTURAL INCOME TO PURCHASE AGRICULTURAL LAND AT NADURKHI BK TAL RAHATA, DIST. AHMADANAGAR. 4. WITHOUT PREJUDICE TO GROUND NO.1 THE LD. CIT (A) ERRE D ON FACTS OF THE CASE AND IN LAW BY NOT APPRECIATING THAT THE LD, AO HAS WORKED OUT APPELLANT'S INCOME FOR AY 2009-10 IS OF RS . 4,82,573/- ONLY AND NOT UNEARTH ANY OTHER TAXABLE SOURCE OF INCOME. 5. THE LD. CIT(A) UNDER CIRCUMSTANCES AND FACTS OF THE CA SE AND IN LAW NOT PROVIDED REASONABLE AND SUFFICIENT OPPORTUNIT Y TO EXPLAIN HIS CASE. 6. RELIEF CLAIMED: THE APPELLANT REQUEST THAT ADDITION EFFE CTED BY LD. AO AND CONFIRMED BY HON'BLE CIT (A) BE DIRECTED T O BE DELETED AND ALLOW APPELLANT'S APPEAL. 7. THE APPELLANT CRAVES LEAVE TO ADD/MODIFY /DELETE/AMEND ALL/ ANY OF GROUND OF APPEAL. 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE O F LAND AT NANDURKHI, TAL-RAHATA, DIST. AHMADANAGAR, AMOUNTING TO RS.21,30,000/- AND ALSO AGAINST REJECTION OF BOOKS OF ACCOU NT AND ESTIMATION OF PROFIT IN THE HANDS OF THE ASSESSEE. 4. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE WA S ENGAGED IN THE BUSINESS OF TRADING EMPTY LIQUOR BOTTLES ON WHOLESALE B ASIS. THE ASSESSEE PURCHASED EMPTY BOTTLES FROM UN-REGISTERED DE ALERS IN THE SCRAP MARKET AND SOLD THE SAME TO THE LIQUOR MANUFACTU RERS. FROM THE EXAMINATION OF THE BOOKS OF ACCOUNT, THE ASSESSING OFFICER N OTED THAT THE ENTIRE PURCHASES WERE SUPPORTED ONLY WITH SELF MADE VOUCHERS. FURTHER, THE ASSESSEE HAD NOT KEPT ANY QUANTITATIVE DE TAILS AND ALSO MAJOR ITEMS OF EXPENDITURE WERE SUPPORTED ONLY WITH SELF MADE VOUCHERS. THE ASSESSEE ALSO FAILED TO FURNISH THE PRELIMINA RY DETAILS 3 ITA NO.824/PN/2013 DADASAHEB HARINHAU GONDKAR I.E. FULL NAME AND ADDRESS OF THE EMPLOYEE AND THE DATE/S S INCE WHEN HE WAS WORKING, IN RESPECT OF THE CLAIM OF EXPENDITURE UNDE R THE HEAD SALARIES. THE PLEA OF THE ASSESSEE WAS THAT, IT WAS PRO CURING EMPTY BOTTLES FROM UN-REGISTERED SCRAP DEALERS, WHO IN TURN MA DE THEIR PURCHASES FROM HAWKERS AND HAD NO OTHER RECORD. THE ASSESSEE HOWEVER, AGREED WITH THE OTHER DEFECTS IN THE BOOKS OF A CCOUNT, BUT POINTED OUT THAT ALL THE SALES WERE PROPERLY SUPPORTED AND BOOK RESULTS BE ACCEPTED. 5. THE SECOND ISSUE CONSIDERED BY THE ASSESSING OFFICER W AS THE INVESTMENT IN PURCHASE OF LAND AT GUT NOS.176 AND 177, AT NANDURKHI, TAL. RAHATA. THE ASSESSING OFFICER NOTED THAT THE ASSESS EE HAD DECLARED THE FIGURE AT LOWER THAN THE ACTUAL AMOUNT REFLEC TED IN THE PURCHASE DEED AND ALSO SHOWING LIABILITY TO A PATSANSTHA O F AN AMOUNT GREATER THAN WHAT ACTUALLY IT WAS. AS PER THE PURCHAS E DEED, DATED 20.08.2008, THE ASSESSEE HAD PAID CONSIDERATION OF RS.50,00 ,000/- IN THE PRECEDING AND THE CURRENT YEAR AS DETAILED AT PAGE 4 OF THE ASSESSMENT ORDER. THE ASSESSEE EXPLAINED THAT THE SOU RCE OF INVESTMENT WAS WITHDRAWAL FROM THE BUSINESS BOOKS ONLY. HOWEVER, HE POINTED OUT THAT BOOKS REFLECTED THE INVESTMENT UNDER T HE HEAD PLOT ADVANCE AT RS.39,00,500/-. THE CLAIM OF THE ASSESSEE IN T HIS REGARD WAS THAT, IT WAS BECAUSE OF WRONG ACCOUNTING ENTRY. HOW EVER, THE ASSESSEE WAS UNABLE TO SUBSTANTIATE THE CLAIM BY PRODUC ING SUPPORTING EVIDENCES. ANOTHER ISSUE NOTED BY THE ASSESSING OFFICER W AS THAT AS PER THE ACCOUNTS EXTRACT APPEARING IN THE BOOKS OF ACC OUNT OF SHRI SAI NAGARI SAHAKARI PATPURVARTHA SANSTHA, THE DEBIT BALANCE AS ON 31.03.2009 WAS RS.5,30,168/-. HOWEVER, THE LEDGER ACCOUNT OF THE SANSHTA IN THE ASSESSEES BOOK SHOWED CREDIT BALANCE O F RS.5,49,995/-. 4 ITA NO.824/PN/2013 DADASAHEB HARINHAU GONDKAR WHEN CONFRONTED, THE LEARNED AUTHORIZED REPRESENTATIVE FO R THE ASSESSEE CONCEDED THAT THE LIABILITY WAS WRONGLY SHOWN. 6. IN THE ABOVE SAID BACKGROUND, THE ASSESSEE WAS SHO W CAUSED AS TO WHY THE BOOKS OF ACCOUNT SHOULD NOT BE REJECTED UN DER SECTION 145(3) OF THE ACT AND THE NET INCOME BE COMPUTED BY ADO PTING THE NET PROFIT RATE OF 2.5% ON THE DISCLOSED TURNOVER. REJECTING T HE EXPLANATION OF THE ASSESSEE VIS--VIS NATURE OF BUSINESS, THE ASSESSI NG OFFICER COMPUTED THE INCOME FROM BUSINESS BY ESTIMATING THE NET PROFIT @ 2.5% ON THE DISCLOSED TURNOVER OF RS.1.93 CRORES AND THE NET PROFIT WAS WORKED OUT AT RS.4,82,573/- AS AGAINST THE NET PROFIT D ISCLOSED IN THE BOOKS OF ACCOUNT AT RS.3,00,754/-. WITH REGARD TO THE INVESTMENT IN THE LAND AT NANDURKHI, THE ASSESSEE WAS CALLED UPON TO E XPLAIN THE SOURCE FOR THE DIFFERENTIAL AMOUNT OF INVESTMENT OF RS.21,30,00 0/- I.E. INVESTMENT + STAMP DUTY + REGISTRATION CHARGES PAID ON 20.08.2008. IN REPLY, THE ASSESSEE MAINTAINED THAT THERE WAS IN FACT, DIFFE RENCE OF RS.13,29,500/- I.E. THE COST OF PLOT AT RS.52,30,000/- LESS BA LANCE FIGURE OF RS.39,00,500/-. THE CONTENTION OF THE ASSESSEE WA S THAT THE BALANCE FIGURE OF RS.13,29,500/- WAS PAID OUT OF HIS ACCUMULAT ED AGRICULTURAL INCOME, WHICH WAS NOT DISCLOSED IN THE BOOKS OF ACCOUNT. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD NEVER DISCLOSED ANY AGRICULTURAL INCOME IN HIS RETURN OF INCOME. FURTHER, THE CO PY OF 7/12 EXTRACT REFLECTS THAT THE ASSESSEE OWNS ONLY 0.30 R OF AGRICULTURAL LAND AT S.NO.64 OF SHIRDI. IN THE ABSENCE OF ANY CONCLUSIVE EV IDENCE, THE DIFFERENTIAL AMOUNT OF RS.21,30,000/- WAS HELD TO BE THE ASS ESSEES INCOME FROM UNDISCLOSED SOURCES. 7. THE CIT(A) UPHELD THE REJECTION OF BOOKS OF ACCOUNT AN D ESTIMATION OF INCOME FROM BUSINESS IN THE HANDS OF THE ASSE SSEE. FURTHER, THE CIT(A) IN RESPECT OF SECOND ADDITION OF UNACCO UNTED 5 ITA NO.824/PN/2013 DADASAHEB HARINHAU GONDKAR INVESTMENT IN LAND AT NANDURKHI NOTED THAT AS PER THE B OOKS OF ACCOUNT, THE ASSESSEE HAD SHOWN THE INVESTMENT OF RS. 39,00,500/-. HOWEVER, THE TOTAL INVESTMENT IN THE PRECEDING AND THE CURRENT YEAR AS PER THE PURCHASE DEED DATED 20.08.2008 WAS RS.51,30,000/ - I.E. RS.28,00,000/- DURING THE ASSESSMENT YEAR 2008-09 AND RS.23,30,000/- DURING THE YEAR UNDER APPEAL. THE ASSESSE E WAS UNABLE TO EXPLAIN THE SOURCE OF INVESTMENT OF RS.21,30,000/- PAID IN CASH DURING THE YEAR, EXCEPT FOR THE STATEMENT THAT IT WAS OUT OF WITHDRAWAL FROM THE BOOKS OF ACCOUNT. THE ASSESSING OFFICE R NOTED THAT THERE WERE NO CASH WITHDRAWALS ON OR ABOUT THE D ATE OF PURCHASE. THE OBJECTION OF THE ASSESSEE WAS THAT THERE WAS ONLY A DIFFERENCE OF RS.13,29,500/- WAS REJECTED BY THE ASSESSING OFFICER SINCE THE ASSESSEE HAD NEVER DISCLOSED ANY AGRICULTURAL INCOME AND EVEN LANDH OLDING OF THE ASSESSEE WAS ON THE LOWER SIDE. IN RESPECT OF THE EXPLANATION OF INVESTMENT OF RS.21,30,000/-, THE PLEA OF THE ASSESSEE WAS REJECTED BY THE CIT(A) AND IT WAS HELD AS UNDER:- 4.2 THESE SUBMISSIONS ARE DULY CONSIDERED. IT SEEN T HAT THE FACTUAL POSITION SUBMITTED WITH REFERENCE TO CHEQUE TOT ALING RS.15,00,000/- WHICH ARE MADE FROM APPELLANTS ANDHRA BANK ACCOUNT, ACTUALLY PERTAIN TO A.Y. 2008-09. NO ADDITION H AS BEEN MADE BY THE ASSESSING OFFICER ON THIS ACCOUNT. AS RE GARDS ADDITION OF RS.21,30,000/- DURING THE YEAR, IT IS SIMPLY ST ATED TO BE PAID FROM BOOKS OF ACCOUNT. FURTHER, IT IS SUBMITT ED THAT ASSESSEE HAS PAID BALANCE AMOUNT OUT OF HIS SAVING FROM AGRICULTURE & BUSINESS. THE EXTRACT OF ANDHRA BANK STATEMENT PROVIDED HAS BEEN EXAMINED WHICH GIVES ACCOUNT STAT EMENT FOR THE PERIOD 25.03.2008 TO 31.03.2008, WHICH IS NOT RELEVANT TO THE IMPUGNED A.Y. NO OTHER EVIDENCES ARE FILED TO SUBSTANT IATE THE APPELLANTS CLAIM THAT THE INVESTMENTS IN LAND MADE IN CASH ARE OUT OF UNACCOUNTED INCOME AS PER BOOKS. THEREFORE, I HAVE NO HESITATION, IN CONFIRMING THE ADDITION OF RS.21,30,000/- UNDER THIS HEAD. 8. THE ASSESSEE IS IN APPEAL AGAINST BOTH THE ABOVE SAID ADDITIONS. 9. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSE SSEE TOOK US THROUGH THE FACTS OF THE CASE AND POINTED OUT THAT TH E ESTIMATION OF 6 ITA NO.824/PN/2013 DADASAHEB HARINHAU GONDKAR INCOME FROM BUSINESS WAS NOT CORRECT IN VIEW OF THE FACTS OF THE CASE . IT WAS POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTATIV E FOR THE ASSESSEE THAT AS PER THE REGISTERED SALE DEED DATED 2 0.08.2008, THE TOTAL CONSIDERATION WAS RS.50,00,000/- AND FURTHER, SUM OF RS.2,30,000/- WAS PAID AS STAMP DUTY. THE NEXT PLEA OF T HE ASSESSEE WAS THAT, IN ADDITION TO THE PAYMENTS IN ASSESSMENT YEA R 2008-09 TOTALING RS.28,00,000/- WHICH WAS OUT OF WITHDRAWAL FROM THE BANK ACCOUNT AND THE BALANCE CONSIDERATION OF RS.23,30,000/- WA S PAID IN THE CURRENT YEAR. THE SOURCE OF INVESTMENT WAS OUT OF BUSINESS AND OUT OF ACCUMULATED AGRICULTURAL INCOME. AS PER THE ASSESS EE, SUM OF RS.39,00,500/- WAS RECORDED IN THE BOOKS OF ACCOUNT AND BALANCE SUM OF RS.13,29,500/- WAS PAID OUT OF ACCUMULATED AGRICULTURAL INC OME. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT THE ASSESSING OFFICER HAD NOT ALLOWED THE CREDIT FOR WHAT W AS SHOWN IN THE BOOKS OF ACCOUNT. ANOTHER ALTERNATE PLEA WAS MADE BEFORE US THAT IN CASE, THE ADDITION ON ACCOUNT OF BUSINESS INCOME IS UPHE LD, THEN THE SET OFF OF ADDITION TO THE EXTENT OF RS.1,81,819/- BE ALLOWE D TO THE ASSESSEE. 10. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE RECORD. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF TRADING EMPTY LIQUOR BO TTLES ON WHOLESALE BASIS. THE PURCHASES WERE BEING MADE FROM UN-R EGISTERED DEALERS IN THE SCRAP MARKET AND THE SALES WERE MADE TO THE LIQUOR MANUFACTURERS. ON THE EXAMINATION OF BOOKS OF ACCOUNT, TH E ASSESSING OFFICER NOTED CERTAIN DEFECTS. THE FIRST DEFECT NOTED BY TH E ASSESSING OFFICER WAS THAT THE ENTIRE PURCHASES WERE SUPPORTED BY ONLY SELF MADE VOUCHERS. THE PLEA OF THE ASSESSEE IN THIS REGARD WAS T HAT SINCE IT WAS 7 ITA NO.824/PN/2013 DADASAHEB HARINHAU GONDKAR PROCURING THE EMPTY BOTTLES FROM UN-REGISTERED SCRAP DE ALERS, WHO IN TURN, WERE MAKING THE PURCHASES FROM HAWKERS, DID NOT HA VE ANY SALES TAX NUMBER AND AS SUCH, THE ASSESSEE WAS UNABLE TO OB TAIN BILLS FROM THE SUPPLIERS. THE OTHER DEFECTS NOTED BY THE ASSESSING OFFICER WAS THAT NON-MAINTENANCE OF QUANTITATIVE DETAILS AND EVEN VARIOUS EXPE NSES BEING INCURRED ON SELF MADE VOUCHERS. THE ASSESSEE HAD INCURRED EXPENDITURE OF RS.7,65,575/- ON ACCOUNT OF SORTING EXPENSE S, IMPLYING THAT THE ASSESSEE AFTER MAKING PURCHASES, SORTED OUT THE BOTTLES AND SUPPLIED TO DIFFERENT LIQUOR MANUFACTURERS. ONCE THE BOTTLE S WERE BEING SORTED OUT, THE QUANTITATIVE DETAILS COULD HAVE BEEN MAINT AINED BY THE ASSESSEE. FURTHER, THE ASSESSEE DID NOT FURNISH ANY DET AILS IN RESPECT OF THE EXPENDITURE BOOKED UNDER THE HEAD SALARIES. DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE ADMITTED THAT E VEN IF THERE WERE ANY DEFECTS IN THE BOOKS OF ACCOUNT, THE SALES MADE BY HIM WERE FULLY SUPPORTED. IN THE ENTIRETY OF THE ABOVE FACTS AND CIRCUMSTANCES, WHERE THE ASSESSEE HAD FAILED TO MAINTAIN PROPER RECORD AND THE EXPENSES NOT BEING BACKED BY PROPER DETAILS, WE HOLD THA T THE PROVISIONS OF SECTION 145(3) OF THE ACT ARE ATTRACTED AND THE BOOK RESULTS DECLARED BY THE ASSESSEE CANNOT BE RELIED UPON. AFTER DISMISSING BOOKS OF ACCOUNT, NEXT RESORT WAS TO ESTIMATION OF INCOME. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD DISCLOSED TURNOVER OF RS.1,93,02,933/- ON WHICH, IT HAD DECLARED NET P ROFIT OF RS.3,00,754/-. THE ASSESSING OFFICER HOWEVER, APPLIED NP RATE AT 2.5% ON TOTAL SALES AND COMPUTED THE INCOME AT RS.4,82,573/-. WE UPHOLD THE ORDER OF ASSESSING OFFICER IN THIS REGARD AND DISMISS T HE GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE. 12. THE SECOND ISSUE RAISED BY THE ASSESSEE WAS AGAINS T THE ADDITION OF RS.21,30,000/- AS INCOME FROM OTHER SOURCES. THE ASSES SEE HAD 8 ITA NO.824/PN/2013 DADASAHEB HARINHAU GONDKAR MADE INVESTMENT IN THE PURCHASE OF PROPERTY IN NANDURKH I. ON THE EXAMINATION OF BOOKS OF ACCOUNT, IT WAS NOTED THAT THERE WERE NO WITHDRAWALS ON OR ABOUT THE DATE OF PURCHASE OF LAND. T HE ASSESSEE HAD MADE THE SAID INVESTMENT IN THE PROPERTY IN TWO FINA NCIAL YEARS I.E. IN 2007-08 AND 2008-09. THE ASSESSEE HAD PLACED THE C OPY OF PURCHASE DEED AT PAGES 7 TO 18 OF THE PAPER BOOK. TH E PERUSAL OF THE SAID PURCHASE DEED REFLECTS THAT THE ASSESSEE HAD MADE THE UNDER- MENTIONED PAYMENTS IN FINANCIAL YEAR 2007-08:- SR. NO. CHEQUE NO. CHEQUE DATE NAME OF BANK AMOUNT (RS.) I CASH DEPOSITED IN ANDHRA BANK 22 ND JAN. 2008 3,00,000 II CASH DEPOSITED IN ANDHRA BANK 14 TH MAR. 2008 3,00,000 III 405368 17 TH MAR. 2008 ANDHRA BANK 5,00,000 IV 407601 28 TH MAR. 2008 ANDHRA BANK 5,00,000 V 407602 28 TH MAR. 2008 ANDHRA BANK 5,00,000 VI 407603 28 TH MAR. 2008 ANDHRA BANK 4,00,000 VII 407604 28 TH MAR. 2008 ANDHRA BANK 4,00,000 TOTAL 29,00,000 13. A SUM OF RS.2,00,000/- WAS PAID BY CHEQUE NO.407611, D ATED 04.04.2008 DRAWN ON ANDHRA BANK. THE BALANCE SUM OF RS.19,00,000/- WAS PAID IN CASH ON 20.08.2008 AS MENTIONED IN THE PURCHASE DEED. THE SAID PAYMENTS IN CASH WERE MADE ON THE DATE OF REGISTRATION. IN ADDITION, THE ASSESSEE HAD INCURRED THE EXPENDITURE OF STAMP DUTY AND REGISTRATION CHARGES TOTALING RS.2,30,000/- . THE TOTAL INVESTMENT MADE BY THE ASSESSEE WAS RS.21,00,000 + 2,30,0 00/- I.E. RS.23,30,000/-. THE ASSESSING OFFICER WHILE COMPUTING THE DET AILS OF INVESTMENT YEAR-WISE AT PAGE 4 OF THE ASSESSMENT ORDER , HAS COMMITTED AN ERROR IN TOTALING THE PAYMENT FOR FINANCIAL YEAR 2007-08 AT RS.28 9 ITA NO.824/PN/2013 DADASAHEB HARINHAU GONDKAR LAKHS AS AGAINST THE TOTAL PAYMENT OF RS.29 LAKHS MADE BY THE ASSESSEE, WHICH RECOGNIZED IN THE SECOND COLUMN, BUT IN TH E FIRST COLUMN BY MISTAKE, THE FIGURE OF RS.17 LAKHS WAS PICKED UP. 14. NOW, COMING TO THE INVESTMENT FOR THE YEAR UNDER CO NSIDERATION, THE PLEA OF THE ASSESSEE WAS THAT SUM OF RS.39,00,500/- HAD BEEN PAID BY CHEQUES OR BY WAY OF DEPOSITS IN CASH IN THE SELLERS B ANK ACCOUNT MAINTAINED WITH ANDHRA BANK BRANCH AT SHIRDI. THE SOURCE OF THE SAID SUM OF RS.39,00,500/- WAS OUT OF THE BUSINESS INCOME OF THE ASSESSEE. THE BALANCE CONSIDERATION AND STAMP DUTY EXPENSES WERE CLAIMED BY THE ASSESSEE TO HAVE BEEN PAID BY THE OTHER FAMILY MEM BERS AS WELL THE ASSESSEE OUT OF ACCUMULATED AGRICULTURAL INCOME. THE BALAN CE OF SUCH PAYMENT WAS RS.13,29,500/-. THE FIRST GRIEVANCE OF ASSESS EE WAS THAT THE ASSESSING OFFICER HAD ERRED IN ADDING RS.21,30,000/- AS INCOME FROM UNDISCLOSED SOURCES REPRESENTING UN-EXPLAINED INVESTM ENT IN THE PURCHASE OF LAND AT NANDURKHI, WHICH HAS BEEN CONFIRMED BY THE CIT(A). WE FIND MERIT IN THE PLEA OF THE ASSESSEE THAT OUT OF TOTAL INVESTMENT OF RS.21,30,000/- MADE DURING THE YEAR UNDER CONSIDERATION, A SUM OF RS.2,00,000/- HAS BEEN PAID BY WAY OF CHEQUE DATED 04.04.2008 DRAWN ON ANDHRA BANK. THE BALANCE CHE QUES IN THE PRECEDING YEAR WERE ALSO DRAWN ON ANDHRA BANK WHICH IS THE BUSINESS BANK ACCOUNT OF THE ASSESSEE, HENCE, THERE IS NO MERIT IN MAKING ANY ADDITION ON ACCOUNT OF SAID PAYMENT OF RS.2,00,000/-. 15. NOW, COMING TO BALANCE PAYMENT OF RS.19,00,000/- IN CA SH AND THE EXPENDITURE INCURRED ON STAMP DUTY AND REGISTRATIO N CHARGES TOTALING RS.2,30,000/-. THOUGH THE ASSESSEE CLAIMS THAT TH E SAME WAS OUT OF ITS AGRICULTURAL INCOME AND THAT OF HIS FAMILY, SOME PO RTION WAS ALSO CLAIMED TO BE INVESTED OUT OF THE BUSINESS INCOME OF THE ASSESSEE. THE PERUSAL OF AUDITED FINANCIAL STATEMENTS RELATING TO THE FINANCIAL 10 ITA NO.824/PN/2013 DADASAHEB HARINHAU GONDKAR YEAR 2008-09 AT PAGES 22 TO 32 OF THE PAPER BOOK REFLE CTS THAT THE ASSESSEE HAD DECLARED THE INVESTMENT IN PLOT AT RS.39,00,5 00/- IN ITS BALANCE SHEET AS ON 31.03.2009. ONCE THE AMOUNT HAS BE EN DECLARED BY THE ASSESSEE IN THE BALANCE SHEET AS ON 31.03.2009 A S INVESTMENT IN THE PURCHASE OF PLOT, THEN INVESTMENT TO THAT EXTENT M ERITS TO BE ACCEPTED IN THE HANDS OF THE ASSESSEE. ONE POINT ALSO B E CLARIFIED HEREIN THAT THE SUM OF RS.2,00,000/- PAID BY CHEQUE DRAWN ON ANDHRA BANK, DATED 04.04.2008 STANDS COVERED IN THE INVESTMENT OF RS.39,00,500/-. THE ASSESSEE HAD DECLARED THE INVESTMENT UPTO RS.29,00,000/- IN THE FINANCIAL YEAR 2007-08 AND THE BALANCE OF RS.10,00,500/- WAS DECLARED AS THE INVESTMENT MADE DURING THE YEAR UNDER CONSIDERATION. ACCORDINGLY, INVESTMENT TO THE EXTE NT OF RS.39,00,500/- MERITS TO BE ACCEPTED IN THE HANDS OF THE ASSESSEE AS BEING MADE OUT OF DECLARED SOURCE OF INCOME. 16. NOW, COMING TO THE BALANCE INVESTMENT OF RS.13,29,500/ -. THOUGH THE ASSESSEE CLAIMS THAT THE SAID INVESTMENT HAD BEEN MADE BY HIS FAMILY MEMBERS AND HIMSELF OUT OF AGRICULTURAL INCOME, BUT EXCEPT TO FILING THE EVIDENCE OF 7/12 EXTRACT OF AGRICULTURAL LAND AT SHIRDI, THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE AS TO THE QUAN TUM OF AGRICULTURAL PROCEEDS RECEIVED BY THE ASSESSEE IN THE PR ECEDING YEAR OR IN THE YEAR UNDER CONSIDERATION. IN THE ABSENCE OF THE SAME, WE FIN D NO MERIT IN THE CLAIM OF THE ASSESSEE IN THIS REGARD. THE PER USAL OF THE ASSESSMENT ORDER REFLECTS THAT THE ASSESSEE HAD ONLY DECLARED INCOME OF RS.2,91,150/- AND NO AGRICULTURAL INCOME HAD BEEN OFFERED TO TAX. IN THE ABSENCE OF THE SAME, WE FIND NO MERIT IN THE PLEA OF TH E ASSESSEE THAT THE BALANCE INVESTMENT TOTALING RS.13,29,500/- WAS M ADE OUT OF AGRICULTURAL INCOME. 11 ITA NO.824/PN/2013 DADASAHEB HARINHAU GONDKAR 17. NOW, COMING TO THE ALTERNATE PLEA RAISED BY THE ASSE SSEE THAT THE ADDITIONAL INCOME ASSESSED IN THE HANDS OF THE ASSESSEE U NDER THE HEAD INCOME FROM BUSINESS I.E. RS.1,81,819/- BEING SET OFF A GAINST THE BALANCE ADDITION MADE IN THE HANDS OF THE ASSESSEE I.E. RS.13,29,500/- . WE FIND MERIT IN THE PLEA OF THE ASSESSEE IN THIS REGARD. ACCORDINGLY, W E DIRECT THE ASSESSING OFFICER TO GIVE THE BENEFIT OF SET OFF O F THE ADDITIONAL INCOME AGAINST THE SOURCE OF INVESTMENT IN THE PURCHASE OF PLOT. ACCORDINGLY, THE ADDITION IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF UNDISCLOSED INVESTMENT IN THE PURCHASE OF PLOT OF LAND IS R ESTRICTED TO RS.13,29,500/- - 1,81,819/- = 11,47,681/-. THE GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS THUS, PARTLY ALLOWED. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 20 TH DAY OF FEBRUARY 2015. SD/- SD/- (G.S. PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 20 TH FEBRUARY, 2015 GCVSR COPY OF THE ORDER IS FORWARDED TO: - 1. THE DEPARTMENT; 2. THE ASSESSEE; 3. THE CIT(A)-I, PUNE; 4. THE CIT-I, PUNE; 5. THE DR B BENCH, I.T.A.T., PUNE; 6. GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE