Sri Rajesh Singh, Bangalore V. ACIT, Bangalore

ITA 941/BANG/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5631 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-03-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 22-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V SRINIVASAN
• Assessee Lawyers: JACINTA ZIMIK VASHAI
• Keywords: Unexplained cash credit; Unexplained investment; Depreciation; Additional evidence; Reassessment proceedings
• Section: 143(3); 234B; 68; 69; 132

Judgement Text

PAGE 1 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE SHRI GEORGE GEORGE K, J.M. AND SHRI A MOHAN ALANKAMONY, A.M ITA NO. ASST. YEAR APPELLANT RESPONDENT 940 TO 942/BANG/09 2001-02, 2003-04 & 2004-05 SRI RAJESH SINGH, NO.2, R R CHAMBERS, IV FLOOR, 11 TH MAIN, VASANTHNAGAR, BANGALORE ACIT, C.C.-1(2), BANGALORE.. C.O.NO.50/B/09 2002-03 SRI RAJESH SINGH, BANGALORE ACIT, C.C.-1(2) , BANGALORE 842/BANG/09 2002-03 ACIT, C.C.-1(2), BANGALORE. SRI RAJESH SINGH, BANGALORE APPELLANT BY : SMT. JACINTA ZIMIK VASHAI, ADDL. CIT RESPONDENT BY : SHRI V SRINIVASAN, C.A. ORD ER PER BENCH : THESE APPEALS INSTITUTED BY THE ASSESSEE AS WELL A S THE REVENUE ARE DIRECTED AGAINST THE CONSOLIDATED ORDER OF THE LD. CIT (A)-VI, BANGALORE IN ITA NOS. 366 TO 372/ ACIT(CC-2)/BLR/CIT(A)-VI/2007-08 DATED: 30.4.2009 FOR THE ASSESSMENT YEARS 2001-02, 2002-03, 2003- 04 AND 2004-05 (WHICH ARE APPEALED AGAINST) RESPECTIVELY. I. ITA NOS: 940, 941 AND 942/09 AYS 2001-02, 2003-0 4, & 04- 05 BY THE ASSESSEE: A.Y. 2001-02 (ITA NO.940/BANG /2009) : 2. THE ASSESSEE HAD RAISED SIX GROUNDS, IN WHICH, GROUND NO.1 BEING GENERAL, IT DOESNT QUALIFY FOR ADJUDICATION. IN GROUND NOS: 2 & 3 , THE ASSESSEE HAD CHALLENGED THE VALIDITY OF THE IMP UGNED ORDER PASSED U/S PAGE 2 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 2 153C RWS 143(3) OF THE ACT AND ALSO FOR ASSUMING JU RISDICTION U/S 153 OF THE ACT WHICH WERE TOTALLY ABSENT AND, THUS, THE ORD ER IN QUESTION DESERVES TO BE CANCELLED ETC., HOWEVER, DURING THE COURSE O F HEARING BEFORE THIS BENCH, THE LD. AR CAME UP WITH A SUBMISSION THAT GR OUND NOS.2 AND 3 WERE NOT PRESSED AND, ACCORDINGLY, THEY ARE DISMISSED AS NOT PRESSED. GROUND NO.5 I S NOT MAINTAINABLE AS CHARGING OF INTEREST U/S 234A , 234B AND 234C BEING MANDATORY AND CONSEQUENTIAL IN NATURE AND THUS , THIS GROUND IS DISMISSED AS NOT MAINTAINABLE. IN GROUND NO.6, THE ASSESSEE PLEADED, IN A NUT SHELL, THAT THE APPEAL MAY BE ALLOWED AND THE AP PELLANT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS. AFTER DUE CO NSIDERATION OF THE ASSESSEES PLEA, THIS GROUND IS DISMISSED. THUS, T HE LONE GROUND SURVIVED FOR ADJUDICATION IS THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING AN ADDITION OF RS.3.5 LAKHS BEING THE AMOUNT PAYABLE T O SMT.ARATHY SHETTY AS A CASH CREDIT U/S 68 OF THE AC T. A.Y. 2003-04 (ITA NO.941/2009) : 2.1. FOR THIS AY, THE ASSESSEE HAD RAISED SEVEN GR OUNDS, OUT OF WHICH, EXCEPT GROUND NO.4 AND 5, THE OTHER GROUNDS WERE IDENTICAL TO THAT OF THE GROUNDS RAISED IN THE IMMEDIATELY PREVIOUS AY REFERRED ABOVE, AND, THUS, THE REASONS RECORDED THERETO HOLD GOOD FOR TH IS AY TOO. IN THE REMAINING GROUNDS, THE CRUXES OF THE ISSUES ARE THA T (I) THE AUTHORITIES BELOW ERRED IN DISALLOWING RS.57,28 0/- AND RS.1.46,157/- BEING DEPRECIATION ON ZEN CAR AND LAN CER CAR RESPECTIVELY; & PAGE 3 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 3 (II) THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN DISALLO WING RS.27553/- BEING INTEREST PAID TO ICICI BANK FOR LO AN AVAILED FOR THE PURCHASE OF LANCER CAR. A.Y. 2004-05 (ITA NO.945/2009) : 2.2. FOR THIS AY ALSO, THE ASSESSEE HAD RAISED SEV EN GROUNDS, IN WHICH, EXCEPT GROUND NOS.4 AND 5 THE OTHER GROUNDS WERE IDENTICAL TO THAT OF THE GROUNDS RAISED IN THE IMMEDIATELY PREVIOUS AY REFERRED ABOVE, AND, THUS, THE REASONS RECORDED THERETO HOLD GOOD FOR TH IS AY TOO. HENCE, THE REMAINING GROUNDS ARE REFORMULATED, IN A CONCISE MA NNER, AS UNDER: - THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIE D IN BIFURCATING RENT FROM GUEST LINE NETWORKS AND ASSESSING RS.3. 36 LAKHS UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND RS.2.6 4 LAKHS AS INCOME FROM OTHER SOURCES AS AGAINST ACTUAL RECEI PT OF RS.4.59 LAKHS; - THAT THE AUTHORITIES BELOW HAVE FAILED TO APPRECIAT E THAT THERE WAS NO SEPARATE RENT FOR LETTING OUT ANY FURNITURE AND FIXTURES OF RS.2.64 LAKHS AS ASSESSED BY THE AO; & - DISALLOWANCE OF DEPRECIATION ON LANCER AND SKODA CA RS. ITA NO: 842/09 AY 2002-03 BY THE REVENUE: 3. THE REVENUE HAD RAISED FIVE GROUNDS, IN WHICH, GROUND NOS.1 AND 5 BEING GENERAL AND NO SPECIFIC ISSUES INVOLVED, THEY HAVE NOT BEEN ADDRESSED TO. IN THE REMAINING GROUNDS, THE SUBSTAN CE OF THE ISSUE RAISED WAS THAT THE CIT (A) HAD ERRED IN DELETING THE ADDITION OF RS.7.7 LAKHS MADE U/S 68 OF THE ACT WITHOUT PROPERLY APPRECIAT ING THE ISSUE. PAGE 4 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 4 C.O NO: 50/09 (AY 2002-03) BY THE ASSESSEE: 3.1. THE ASSESSEE HAD RAISED NINE GROUNDS OF CROSS OBJECTION , OUT OF WHICH, GROUND NOS.1 & 9 DO NOT SURVIVE FOR ADJUDICATION AS BEING GENERAL IN NATURE. IN GROUND NOS: 2 & 3 , THE ASSESSEE HAD CHALLENGED THE VALIDITY OF THE IMPUGNED ORDER PASSED U/S 153C RWS 1 43(3) OF THE ACT AND ALSO FOR ASSUMING JURISDICTION U/S 153 OF THE ACT W HICH WERE TOTALLY ABSENT AND, THUS, THE ORDER IN QUESTION DESERVES TO BE CAN CELLED ETC., HOWEVER, DURING THE COURSE OF HEARING BEFORE THIS BENCH, THE LD. AR CAME UP WITH A SUBMISSION THAT GROUND NOS.2 AND 3 WERE NOT PRESSED AND, ACCORDINGLY, THEY WERE DISMISSED AS NOT PRESSED . GROUND NO.8 IS NOT MAINTAINABLE AS CHARGING OF INTEREST U/S 234A, 234B AND 234C BEING MANDATORY AND CONSEQUENTIAL IN NATURE, THIS GROUND IS DISMISSED A S NOT MAINTAINABLE. IN THE REMAINING GROUNDS, THE ESSENCES OF THE ISSUES RAISE D ARE REPRODUCED, IN A CONCISE MANNER, AS UNDER: (I) THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN DISALLO WING DEPRECIATION OF RS.71600/- AND RS.1.82 LAKHS IN RES PECT OF ZEN CAR AND LANCER CAR; (II) ALSO THEY WERE NOT JUSTIFIED IN DISALLOWING RS.67,1 06/- BEING INTEREST PAID TO ICICI BANK FOR A LOAN AVAILED FOR THE PURCHASE OF LANCER CAR; (III) THAT THE AUTHORITIES BELOW ERRED IN ADDING RS.9.5 L AKHS AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT IN RESPECT OF KODIGEHALLI PROPERTY HOLDING THAT NO EVIDENCE WAS P RODUCED IN SUPPORT OF SUCH A CLAIM; & (IV) THAT THE AUTHORITIES BELOW ERRED IN TREATING RS.1 L AKH PAYABLE TO M/S.GAGAN CONSTRUCTION AS UNEXPLAINED CASH CREDI T U/S 68 OF THE ACT. PAGE 5 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 5 4. AS MOST OF THE ISSUES INVOLVED IN THESE APPEALS BEING IDENTICAL AND INTER-LINKED, FOR THE SAKE OF CONVENIENCE AND C LARITY, THEY WERE HEARD, CONSIDERED TOGETHER AND DISPOSED OFF IN THIS COMMON ORDER. 5. WE SHALL NOW PROCEED TO ADJUDICATE THE ISSUES R AISED BY THE ASSESSEE IN A CHRONOLOGICAL MANNER AFTER DUE CONSID ERATION OF THE RIVAL SUBMISSIONS MADE DURING THE COURSE OF HEARING, METI CULOUS PERUSAL OF THE RELEVANT CASE RECORDS AS WELL AS THE DOCUMENTARY EVI DENCES PRODUCED BY THE LD. A R IN THE SHAPE OF VOLUMINOUS PAPER BOOKS. A.Y 2001-02 (ITA NO.940/2009) : 6. THE ISSUE, IN BRIEF, WAS THAT THE ASSESSEE, AN INDIVIDUAL, ADMITTED HIS INCOME AT RS.1.23 LAKHS. SUBSEQUENTLY, THERE WAS AN ACTION U/S 132 OF THE ACT ON 30.9.2005 IN THE RESIDENTIAL PREMISES OF THE ASSESSEES FATHER LAKHAN SINGH AND DURING THE SEARC H, ACCORDING TO THE REVENUE; INCRIMINATING DOCUMENTS SUCH AS INVESTMENT S IN IMMOVABLE PROPERTIES MADE BY THE ASSESSEE WERE UNEARTHED. TH E ASSESSEE WAS SLAPPED WITH A NOTICE U/S 153C OF THE ACT REQUIRING HIM TO FURNISH A RETURN OF INCOME. HOWEVER, IN COMPLIANCE TO SUBSEQUENT NO TICE U/S 142 OF THE ACT; THE ASSESSEE HAD FURNISHED HIS RETURN, ADMITTING RS .1.23 LAKHS AS ORIGINALLY RETURNED. 6.1. DURING THE COURSE OF REASSESSMENT PROCEEDINGS , THE AO HAD, AMONG OTHERS, NOTICED THAT THE ASSESSEE HAD SHOWN O NE SMT. ARATHY SHETTY AS A SUNDRY CREDITOR FOR RS.3.5 LAKHS. AS THE ASSESSEE HAD FAILED TO FURNISH EITHER THE ADDRESS OR CONFIRMATION LETTER O F THE ALLEGED SUNDRY PAGE 6 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 6 CREDITOR, THE SAME WAS TREATED BY THE AO AS CASH CRE DIT U/S 68 OF THE ACT. 6.2. WHEN THE ASSESSEE HAD FAILED TO PRODUCE ANY DO CUMENTARY PROOF AT THE APPELLATE STAGE, THE LD. CIT (A) UPHEL D THE ADDITION. 7. DURING THE COURSE OF HEARING BEFORE THIS BENCH, THE LD. A R HAD VALIANTLY PLEADED THAT THE ASSESSEE DERIVES INCO ME ONLY FROM RENTS AND OTHER SOURCES AND THUS, HE WAS NOT CARRYING ON ANY BU SINESS AND, THEREFORE, NO BOOKS OF ACCOUNTS HAVE BEEN MAINTAINED, THAT THE ASSESSEE WAS NOT AWARE OF THE PRESENT WHEREABOUTS OF THE SAID CREDIT OR AND, THEREFORE, UNABLE TO OBTAIN HER CONFIRMATION LETTER ETC., HE H AD ALSO SOUGHT REFUGE IN THE RULING OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V. P.K.NOORJAHAN REPORTED IN 237 ITR 570 (SC) WHEREIN THE HONBLE COURT HAD REASONED THAT THE DISCRETION HAD NOT BEEN PROPERLY EXERCISED BY THE INCOME-TAX OFFICER AND THE AAC IN TAKING INTO ACCOU NT THE CIRCUMSTANCES IN WHICH THE ASSESSEE WAS PLACED AND THE TRIBUNAL H AD FOUND THAT THE SOURCES OF INVESTMENTS COULD NOT BE TREATED AS INCO ME OF THE ASSESSEE. 7.1. WITH DUE RESPECTS, WE WOULD LIKE TO POINT OUT THAT THE FACTS OF THE ISSUE BEFORE THE HONBLE COURT WAS ENTIRELY O N A DIFFERENT FOOTING AND, THUS, THE RULING OF THE HONBLE APEX COURT CAN NOT COME TO THE RESCUE OF THE PRESENT ASSESSEE. THE ASSESSEE HAD SINCE FA ILED TO DISCHARGE HIS ONUS OF FURNISHING A CONFIRMATION LETTER FROM THE A LLEGED SUNDRY CREDITOR; WE ARE IN AGREEMENT WITH THE FINDING OF THE LD. CIT (A) ON THIS COUNT. IT IS ORDERED ACCORDINGLY. PAGE 7 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 7 A.Y 2003-04 (ITA NO.941/2009) : 8. THE TWIN GROUNDS RAISED FOR THIS AY ARE PERTAIN ING TO THE DISALLOWANCE OF DEPRECIATION ON CAR AND ALSO INTERE ST ON BANK LOAN TO PURCHASE A LANCER CAR. THE AUTHORITIES BELOW HAVE T AKEN A STAND THAT THE APPELLANT HAD NOT SHOWN ANY PROOF OF OWNERSHIP OVER THE ZEN CAR. TO BECOME ELIGIBLE TO CLAIM DEPRECIATION, THE APPELLAN T HAD TO SHOW NOT ONLY ITS USE IN THE BUSINESS, BUT, ALSO OWNERSHIP WHICH HAD NOT BEEN FORTH-COMING. LIKEWISE, INTEREST ON ALLEGED VEHICLE LOAN WAS ALSO DENIED IN THE ABSENCE OF PROPER EVIDENCE ETC., 8.1. IT WAS SUBMITTED DURING THE COURSE OF HEARING BEFORE US THAT- - THE ASSESSEE COULD NOT BE IN A POSITION TO PRODUCE THE PROOF DUE TO PAUCITY OF TIME AND LACK OF INFORMATION AVAIL ABLE AT THE RELEVANT POINT OF TIME. HOWEVER, IN COURSE OF THE HEARING BEFORE THE CIT[A], FILED A COPY OF THE INVOICE OF TH E ZEN CAR AS WELL AS THE LANCER CAR AND A COPY OF THE VEHICLE LOAN STATEMENT OF ICICI PRINTED ON THEIR STATIONERY, HOWE VER, THE CIT [A], WITHOUT CONSIDERING THE EVIDENCES, HAD CON FIRMED THE DISALLOWANCES MADE, THAT COPIES OF INVOICE OF THE ZEN CAR AS WELL AS THE LANCER CAR AND THE LOAN STATEMENT PLACE D AT PAGES NO.19 TO 22 OF THE PAPER BOOK SHOW THAT THE ASSESS EE WAS THE OWNER OF THE CARS AND BORROWED THE LOAN FROM IC ICI BANK FOR THE PURCHASE OF THE CAR ETC., AND PRAYED THAT THE DISALLOWANCES MADE BY THE A.O REQUIRED TO BE DELETED . 8.2. ON A CRITICAL PERUSAL OF THE EVIDENCES PLACE D AT P 19 22, FOR EXAMPLE, WE FIND THAT THOUGH MANDOVI MOTORS PVT. LT D. HAVE ACKNOWLEDGED THAT THE MARUTI ZEN WAS PRICED AT RS.3.58 LAKHS DUR ING DECEMBER, 1997, HOWEVER, IT HAD NOT SPECIFICALLY INDICATED THAT THE VEHICLE WAS SOLD TO THE PAGE 8 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 8 ASSESSEE. IN THE INTERESTS OF FAIR-PLAY, WE VENTURE TO REMIT BACK THIS ISSUE TO THE AO WITH A SPECIFIC DIRECTION TO LOOK INTO TH E EVIDENCES WHICH WILL BE FURNISHED BY THE ASSESSEE IN THE SHAPE OF INVOICE IN THE NAME OF THE ASSESSEE, RCC BOOK(S) [IN THE NAME OF THE ASSESSEE] AND ALSO THE RELEVANT BANK STATEMENTS FOR HAVING AVAILED THE VEHICLE LOAN TO PURCHASE LANCER CAR ETC., AND TO ALLOW DEPRECIATION ALLOWABLE AT THAT R ELEVANT TIME AND ALSO INTEREST PAID TO THE BANK FOR THE VEHICLE LOAN AVAI LED, IF FOUND TO BE SATISFACTORY. IT IS ORDERED ACCORDINGLY. A.Y 2004-05 (ITA NO.942/2009) : 9. THE ASSESSEE HAD SHOWN GROSS RENT OF RS.4.59 LA KHS FROM GUEST LINE NETWORK. HOWEVER, BRUSHING ASIDE THE AS SESSEES CLAIM AND ON THE BASIS OF ALLEGED LEASE DEED UNEARTHED DURING TH E SEARCH, THE AO, FOR THE REASONS RECORDED IN THE IMPUGNED ORDER, WORKED OUT THE RENT AT RS.3.36 LAKHS, BESIDES RS.2.64 LAKHS UNDER THE HEAD INCOME FROM OTHER SOURCES. 9.1. AGGRIEVED, THE ASSESSEE CARRIED THE ISSUE BEF ORE THE CIT (A) FOR RELIEF [AS COULD BE SEEN FROM THE GROUNDS OF AP PEAL RAISED BEFORE THE CIT (A) AT GROUND NOS: 8 & 8.1 ]. HOWEVER, ON A CRITICAL ANALYSIS OF HIS IMPUGNED ORDER, WE FIND THAT THIS ISSUE HAS NOT BEE N SPECIFICALLY DEALT WITH BY THE LD. CIT (A). 9.2. DURING THE COURSE OF HEARING BEFORE US, IT WA S VEHEMENTLY ARGUED BY THE LD. AR THAT THE CIT [A] HAS DELETED THE SIMILAR ADDITION MADE IN RESPECT OF OTHER PROPERTIES BELONGING TO TH E APPELLANT AND HIS PAGE 9 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 9 BROTHER RAKESH SINGH FOR EARLIER YEARS AS WELL AS FO R THE YEAR UNDER APPEAL. ACCORDINGLY, THE A.O BE DIRECTED TO FOLLOW THE CONCLUSIONS OF THE CIT [A] IN RESPECT OF THE INCOME FROM THIS PROPERTY AS WELL. CONSEQUENTLY, IT IS PRAYED THAT THE ENTIRE RENT ACTUALLY RECEIVED M AY ALONE BE BROUGHT TO TAX UNDER THE HEAD HOUSE PROPERTY AS THE ORDER OF THE CIT [A] ON THIS POINT HAS BEEN ACCEPTED BY THE DEPARTMENT. 9.3. IN VIEW OF THE ABOVE STATE OF AFFAIRS, WE ARE OF TH E CONSIDERED VIEW THAT THIS ISSUE SHOULD BE REMITTED BACK ON THE FILE OF THE AO FOR FRESH CONSIDERATION IN LIEU OF THE FINDING O F THE CIT (A) AT PARA 11 OF HIS IMPUGNED ORDER WITH A DIRECTION TO TAKE FURT HER APPROPRIATE ACTION IN ACCORDANCE WITH LAW AFTER AFFORDING AN OPPORTUNITY T O THE ASSESSEE OF BEING HEARD. IT IS ORDERED ACCORDINGLY. 9.4. THE OTHER GRIEVANCE OF THE ASSESSEE BEING DISALLOWANCE OF DEPRECIATION ON LANCER AND SKODA CARS. THE STAND OF THE AO WAS THAT 11..FOR THE REASONS DISCUSSED IN DETAIL IN THE ASST. ORDER OF EVEN DATE FOR THE AY 2002-03, DEPRECIATION ON LANCER CAR CLAI MED RS.1.62,750 IS DISALLOWED. THE ASSESSEES MAIN SOURCE OF INCOME IS FROM LET-OUT PROPERTY. THE PERSONAL USE OF CARE CANNOT BE RULED OUT. CONS IDERING THIS, 25% DEPRECIATION ON SKODA CAR IS DISALLOWED 9.4.1. THOUGH THE ASSESSEE HAD SPECIFICALLY AGITATE D OVER DISALLOWANCE OF ENTIRE DEPRECIATION ON LANCER CAR A ND SCALING DOWN OF DEPRECIATION ON SKODA CAR IN HIS GROUNDS OF APPEAL, THE LD. CIT (A) HAD RATHER GENERALIZED THE ISSUE AND SUSTAINED THE DISA LLOWANCE WITHOUT LOOKING INTO THE ISSUES AS AGITATED BY THE ASSESSEE. PAGE 10 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 10 9.4.2. WELL. BEFORE US, IT WAS ARGUED BY THE LD. A R, THE SUBSTANCE OF WHICH, THAT THE RELEVANT FACTS WERE SIMILAR FOR THE YEAR UNDER APPEAL TO THAT OF THE AY 2002-03 AND, ACCORDINGLY, PRAYED THAT FOR THE REASONS STATED THEREIN, THE DISALLOWANCES MADE BY THE A.O RE QUIRE TO BE DELETED. 9.4.3. WE HAVE DULY CONSIDERED THE SUBMISSION OF TH E LD. A R AS WELL AS THE RELEVANT RECORDS. AS FAR AS DEPRECIATION ON LANCER CAR IS CONCERNED, WE REAFFIRM OUR FINDINGS RECORDED FOR THE AY 2003-0 4 REFERRED SUPRA. WITH REGARD TO THE AOS ACTION IN SCALING DOWN THE DEPRECIATION ON SKODA CAR, WE FIND QUITE REASONABLENESS IN THE STAND OF T HE AO AS THE ASSESSEES MAIN SOURCE(S) OF INCOME BEING LETTING OF PROPERTIE S AND, THUS, PERSONAL USE OF THE SAID VEHICLE COULD NOT BE RULED OUT. THUS, W E ARE IN TOTAL AGREEMENT WITH THE STAND OF THE AO ON THIS COUNT. IT IS ORD ERED ACCORDINGLY. 10. WE SHALL NOW MOVE ON TO ADDRESS THE GRIEVANCES OF THE REVENUE. A.Y 2002-03 (ITA NO.842/2009) : 11. SOLITARY GROUND SURVIVES FOR ADJUDICATION IS TH AT THE CIT (A) HAD ERRED IN DELETING THE ADDITION OF RS.7.7 LAKHS MADE U/S 68 OF THE ACT. TO ILLUSTRATE FURTHER, THE REVENUES MAIN APPREHENS ION WAS THAT - THE CIT(A) OUGHT TO HAVE CONSIDERED THAT THE ASSESS EE FAILED TO FURNISH THE CONFIRMATION LETTERS BEFORE THE AO AT T HE TIME OF ASSESSMENT PROCEEDINGS; & - THE CIT(A) ERRED IN CONSIDERING THE ADDITIONAL EVID ENCES FURNISHED BY THE ASSESSEE WITHOUT REFERRING TO THE AO FOR VERI FICATION AS REQUIRED UNDER RULE 46A. PAGE 11 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 11 11.1. ON HIS PART, THE LD. A R CAME UP WITH A SPIR ITED ARGUMENT THAT- - THE A.O. HAD MADE THE ADDITIONS ON THE GROUND TH AT THE ASSESSEE HAD NOT FILED THE CONFIRMATION LETTERS IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, THAT BEFORE THE CIT[ A], THE ASSESSEE HAD FILED THE CONFIRMATION LETTERS AND CON SIDERING THE SAID EVIDENCE TENDERED, THE CIT[A] HELD THAT TH E ADDITIONS MADE WERE UNCALLED FOR. FURTHERMORE, THE AMOUNT RECEIVED WAS THROUGH NORMAL BANKING CHANNELS AND, T HEREFORE, THE CIT[A] WAS JUSTIFIED IN DELETING THE AFORESAID ADDITIONS. 11.1.1. WHILE RESTRICTING THE ADDITION TO RS.1 LAK H OUT OF RS.8.7 LAKHS, THE LD. CIT (A) HAD OBSERVED THAT CONFIRMATION LETT ERS IN RESPECT OF THE CREDITORS EXCEPT IN THE CASE OF M/S. GAGAN CONSTRUC TION [RS.1 LAKH] HAVE BEEN FURNISHED AND ALSO SOME OF THE RECEIPTS WERE T HROUGH BANKING CHANNELS I.E., CHEQUES. THE IDENTITY OF THOSE PERSO NS WERE KNOWN AND NOT DOUBTED AND ALSO THE SAID LETTERS CONTAINED THEIR P ANS AND, THUS, HE HAD DELETED THE ADDITIONS. HOWEVER, THE CIT (A) RETAI NED THE ADDITION IN THE CASE OF GAGAN CONSTRUCTIONS AS NEITHER CONFIRMATION LETTER NOR OTHER EVIDENCE WAS PRODUCED EVEN AT THE APPELLATE STAGE. 11.1.2. AFTER HEARING THE RIVAL CONTENTIONS AND PE RUSING THE MATERIALS ON RECORD, WE ARE IN TOTAL AGREEMENT WITH THE FINDI NG OF THE LD. CIT (A) ON THIS COUNT. IT IS AN UNDISPUTED FACT THAT THE AM OUNTS ARE RECEIVED THROUGH NORMAL BANKING CHANNELS. MOREOVER, TWO PER SONS FROM WHOM MONEY IS RECEIVED IS SISTER AND BROTHER-IN-LAW OF THE ASS ESSEE. THE FACTUAL FINDING OF THE CIT(A) HAS NOT BEEN DISPELLED BY THE LEARNED DR AND HENCE, PAGE 12 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 12 WE HOLD THAT THE CIT(A)S ORDER ON THIS ISSUE IS CO RRECT AND IN ACCORDANCE WITH LAW AND THUS, NO INTERFERENCE IS CALLED FOR. CROSS OBJECTIONS OF THE ASSESSEE (C.O.NO.50/2009) : THE CROSS OBJECTIONS RAISED BY THE ASSESSEE ARE DE ALT WITH SERIALLY AS UNDER: 12. WITH REGARD TO (I) THE DISALLOWANCE OF DEPRECI ATION OF RS.71600/- AND RS.1.82 LAKHS IN RESPECT OF ZEN CAR AND LANCER CAR; AND (II) DISALLOWANCE OF RS.67,106/- BEING INTEREST PAID TO ICICI BANK FOR THE LOAN AVAILED FOR THE PURCHASE OF LANCER CAR; WE WOULD LI KE TO POINT OUT THAT THE ISSUES RAISED NOW ARE SIMILAR TO THE ISSUES WHICH HAVE BEEN DEALT WITH BY US FOR THE ASSESSMENT YEAR 2003-04. OUR FINDINGS RE CORDED AT PARA 8.2 SUPRA HOLD GOOD FOR THIS AY ALSO. IT IS ORDERED AC CORDINGLY. 12.1. THE OTHER OBJECTION WAS THAT THE AUTHORITIES BELOW ERRED IN ADDING RS.9.5 LAKHS AS UNEXPLAINED INVESTMENT U/S 6 9 OF THE ACT IN RESPECT OF KODIGEHALLI. 12.1.1. AFTER PERUSING THE ELABORATE SUBMISSION MA DE BY THE ASSESSEE, THE LD. CIT (A) HAD OBSERVED THUS 14..THE SUM AND SUBSTANCE OF THE ABOVE WRITTEN SUBMISSION IS THAT THE APPELLANT TOOK LOAN FROM ONE SRI NARAYANDAS BODARAM TO PAY TOWARDS THE COST OF LAND AT KODEGAHALLI TO THE OWNER SMT N.SHANTA BUT UNFORTUNATELY, BUT, ADMITTEDLY NEITHER THE ALLEGED LO AN FROM NARYANDAS BODARAM NOR THE PAYMENT TO MRS. N SHANTA THROUGH BANKERS CHEQUE DATED 5.11.2002 WERE PAGE 13 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 13 ENTERED IN THE BOOKS OF THE APPELLANT. DURING THE ASSESSMENT PROCEEDINGS, THE CONFIRMATION LETTER FRO M SRI NARAYANDAS BODERAM COULD NOT BE PROVIDED BY THE APPELLANT RESULTING IN ADDITION OF THE ENTIRE INVES TMENT AS UNEXPLAINED ONE. DURING THE APPELLATE HEARING THE CONFIRMATION LETTERS WERE FILED AS ADDITIONAL EVIDE NCES. SUCH ADDITIONAL EVIDENCES WERE ALSO FURNISHED IN TH E CASE OF SRI RAJESH SIGH (SIC) RAKESH SINGH THE CO-PURCHASER AND BROTHER OF THE APPELLANT WHICH WAS SENT IN AUGU ST 2008 FOR A REMAND (REPORT) TO AO ON WHICH NO COMMEN T OR EXAMINATION WAS MADE BY THE AO. IT IS ALSO PLEAD ED BY THE AO (SIC) APPELLANT THAT THE LOAN OF THE APPELLANT HAS ALREADY BEEN REPAID TO NARAYANDAS BODARAM ON 31.3.2004 BY THE FATHER OF THE APPELLANT. 15. I FIND A SMELL OF DEAD RAT IN THE WHOLE OF SUC H TRANSACTIONS. THE ALLEGED SOURCE OF MONEY FOR THE PURCHASE IS A STRANGER AND THAT STRANGER IS REPAID BY THE FATHER OF THE APPELLANT. ADMITTEDLY NEITHER THE LOA N TRANSACTIONS NOR THE PAYMENT OF RS.9,50,000/- DATED 5.1.2002 WERE REFLECTED IN THE BOOKS OF THE APPELLA NT. I CONCLUDE THAT THE EXPLANATION OFFERED BY THE APPELLA NT IS ONLY AFTERTHOUGHT AND HAD THERE BEEN NO SEARCH AND T HE SEIZURE OF THE SALE AGREEMENT MARKED AS SEIZURE MEM O NO.A1/LS/03 PAGE NOS:15 TO 24, THE INVESTMENT MADE IN KODIGEHALLY PROPERTY WOULD HAVE GONE UNRECORDED/UNDETECTED. I SEE NO TRUTH IN THE ARGUM ENT OF APPELLANT THAT NO TRANSFER OF MONEY TOOK PLACE FR OM HIM TO THE SELLER MRS. N.SHANTHA BECAUSE EVIDENCE REFLECT THAT MRS. SHANTHA HAS ACKNOWLEDGED THE RECE IPT OF BANKERS CHEQUE OF RS.9,50,000/- WHICH WAS ADMITT EDLY NOT ENTERED IN THE BOOKS OF THE APPELLANT AND LATER ON IT WAS EXPLAINED TO HAVE GONE FROM THE GROUP FUNDS AND NOT THE INDIVIDUAL ACCOUNTS OF THE APPELLANT. CONSIDER ING THE TOTALITY OF CIRCUMSTANTIAL EVIDENCES, THE SOURCE OF PAYMENT OF RS.9.5 LAKHS REMAINS UNEXPLAINED AND, HEN CE, THE ADDITION IS CONFIRMED.. PAGE 14 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 14 12.1.2. REFUTING THE LD. CIT (A) FINDINGS, THE LD. AR CAME UP WITH A CONTRADICTING VERSION THAT - THAT THE CROSS-OBJECTOR AND HIS BROTHER SRI RAKESH SINGH HAD ENTERED INTO AN ORAL UNDERSTANDING WITH SMT. N. SHA NTHA FOR THE PURCHASE OF HER PROPERTY AT KODIGEHALLI AND SINCE TH EY DID NOT HAVE SUFFICIENT FUNDS FOR PURCHASE OF THE PROPERTY AND ON E NARAYANDAS BODARAM PROVIDED FINANCE BY MAKING PAYMENTS DIRECTLY T O SMT. N. SHANTHA. HOWEVER, THE CROSS-OBJECTOR HAD NEITHER R ECORDED THE LOAN FROM NARAYANDAS BODHARAM NOR THE ADVANCE GIVEN TO PURCHASE THE PROPERTY IN HIS STATEMENT OF AFFAIRS FOR THE YEA R UNDER APPEAL; - THAT THE A.O. MADE THE ADDITION OF THE INVESTMENT M ADE IN THE PURCHASE OF THE PROPERTY CONSIDERING THE SAME AS UND ISCLOSED. BEFORE THE CIT[A], IT WAS CONTENDED THAT THE CROSS- OBJECTOR HAD ENTERED INTO THE ARRANGEMENT WHERE-UNDER, SEVERAL C HEQUES/DD RECEIVED FROM SRI NARAYANDAS BODARAM WERE MADE OVER DIRECTLY TO SMT. SHANTA FROM TIME TO TIME DURING AUGUST 1996, A PRIL 1998, ETC. SUBSEQUENTLY, SMT.N.SHANTHA ENTERED INTO TWO SEPARAT E AGREEMENTS, WITH THE CROSS-OBJECTOR AND HIS BROTHER RAKESH SING H ON 05/01/2002 WHEREIN, IT WAS ACKNOWLEDGED BY SMT. SHAN THA THAT SHE HAD RECEIVED A SUM OF RS.9,50,000/-. THE RELEVANT PORTION OF THE AGREEMENT READS ASTHAT AN AMOUNT OF RS.9,50,000/- ( RS. NINE LAKH FIFTY THOUSAND ONLY) IS ALREADY PAID BY THE PURCHASER T O THE SELLER BY BANKERS CHEQUE - THAT THE CIT[A] UPHELD THE ADDITION, HOLDING THAT THE EXPLANATION TENDERED IS A COCK AND BULL STORY. HOWEVER, THE CIT [A] HAD DELETED THE ADDITION MADE IN THE CASE OF RAKESH SINGH AND THE DEPARTMENT HAVE FILED AN APPEAL ON THE SAME ISSUE; - THAT THE CIT[A] OUGHT TO HAVE APPRECIATED THAT THE CROSS-OBJECTOR HAS SUBSTANTIATED THE EXPLANATION TENDERED BY HIM WI TH REGARD TO THE ARRANGEMENT ENTERED INTO WITH .NARAYANDAS BODARA M BY FILING CONFIRMATION LETTERS FROM BODARAM AS WELL AS THE E VIDENCE TO SHOW THE RE-PAYMENT MADE BY THE CROSS-OBJECTORS FATHER TO NARAYANDAS BODHARAM DURING F.Y. 2003-04 AND 2004-05, WHICH ARE DULY REFLECTED IN THE BALANCE SHEET OF .LAKHAN SINGH AS AT 31/03/2004. HAVING REGARD TO THE CONFIRMATION GIVEN BY SRI NARAYA NDAS AS WELL AS THE OTHER DETAILS FILED BY THE APPELLANT DURING THE COURSE OF THE PAGE 15 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 15 APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT[A], WH ICH ARE PLACED AT PAGE NOS. 11 TO 18 OF THE PAPER BOOK, THE ADDITI ON MADE BY THE A.O. AND SUSTAINED BY THE LEARNED CIT[A] IS UNJUSTIF IED AND LIABLE TO BE DELETED. THE LD. D.R. PRESENT WAS HEARD. 12.1.3. LOOKING INTO THE GAMUT OF THE ISSUE AND AL SO A GLANCE AT THE IMPUGNED ORDER OF THE AO, WE FIND THAT THE AO H AD RESORTED TO TREAT THE SAID SUM U/S 69 OF THE ACT ON THE SOLE GR OUND THAT THE ASSESSEE HAD NOT PRODUCED ANY DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CLAIM THAT THE BANKERS CHEQUE WAS RECEIVED FROM NA RAYANDAS AND SO ON AND SO FORTH. HOWEVER, WHEN ADDITIONAL EVIDENCES W ERE PRODUCED BEFORE THE CIT (A), THE CIT (A) HAD DISBELIEVED TH E ASSESSEES VERSION AND TOOK A STAND THAT THE SOURCE OF PAYMENT OF RS.9 .5 LAKHS REMAINS UNEXPLAINED. 12.1.4. IT MAY NOT BE OUT OF PLACE TO MENTION HERE THAT IN THE CASE OF RAKESH SINGH WHO WAS AN ALLEGED CO-PURCHASE R OF THE SUBJECT PROPERTY WHEREIN THE CIT(A) TOOK COGNIZANCE OF THE EVIDENCES PRODUCED BY RAKESH SINGH AND DECIDED THE ISSUE IN HI S FAVOUR. 12.1.5. SINCE THE ASSESSEE HAD NOW COME UP WITH TH E CONFIRMATION LETTERS WHICH WERE NOT PRODUCED AT THE TIME OF ASSESSMENT PROCEEDINGS AND ALSO THE LD. CIT (A) HAD TAKEN A DIVERGENT VIEW ON AN IDENTICAL ISSUE AS POINTED OUT IN THE FO RE-GOING PARAGRAPH, WE ARE OF THE CONSIDERED VIEW THAT THIS ISSUE ALSO (AS IN THE CASE OF RAKESH SINGH ON A SIMILAR ISSUE) SHOULD BE REMITTED BACK O N THE FILE OF THE AO FOR A FRESH LOOK INTO THE WHOLE GAMBIT OF THE ASSES SEE AND TO TAKE PAGE 16 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 16 APPROPRIATE ACTION IN ACCORDANCE WITH THE PROVISION S OF THE ACT, AFTER PERUSING THE EVIDENCES/PARTICULARS WHICH WILL BE FU RNISHED BY THE ASSESSEE IN THE SHAPE OF CONFIRMATION LETTERS, BAN K STATEMENTS (AS THE TRANSACTIONS ALLEGED TO HAVE TAKEN PLACE THROUGH CH EQUES/DEMAND DRAFTS), LEDGER EXTRACTS ETC., IT IS ORDERED ACCOR DINGLY. 12.2. THE OTHER CROSS-OBJECTION BEING THAT THE AUTHORITIES BELOW ERRED IN TREATING RS.1 LAKH PAYABLE TO M/S.GA GAN CONSTRUCTION AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 12.2.1. AS COULD BE GAUGED FROM THE IMPUGNED ORDER S UNDER APPEAL THAT THE AUTHORITIES BELOW HAVE RESORTED TO DISALLOW THE SAID CLAIM OF THE ASSESSEE IN THE ABSENCE OF ANY DOCUMENT ARY PROOF TO FIND OUT ITS GENUINENESS. 12.2.2. BEFORE US, IT WAS ARGUED BY THE LD. A R TO THE EFFECT THAT THE CROSS-OBJECTOR WAS UNABLE TO OBTAIN THE CO NFIRMATION LETTER FROM THE SAID CREDITOR OWING TO THE LAPSE OF CONSID ERABLE NUMBER OF YEARS. HOWEVER, IT WAS CLAIMED THAT THE CREDIT WAS G ENUINE IN AS MUCH AS IT WAS RECEIVED THROUGH NORMAL BANKING CHANNEL AND HAD SINCE BEEN REPAID ALSO THROUGH THE BANKING CHANNEL, THEREFORE, THERE WAS NO WARRANT TO MAKE THE IMPUGNED ADDITION, ETC. 12.2.3. WE HAVE DULY CONSIDERED THE PLEA OF THE LD. A.R. WE ARE, OF COURSE, IN AGREEMENT WITH HIS CLIENTS INAB ILITY TO OBTAIN THE CONFIRMATION LETTER FROM THE ALLEGED CREDITOR AS TH E TRANSACTION TOOK PLACE PAGE 17 OF 17 ITA NOS. 940-942 & 842/B/09 & CO NO.50/BANG/09 17 A DECADE AGO. HOWEVER, AT THE SAME BREATH, THE LD. A R HAD AVERRED THAT THE ALLEGED TRANSACTION TOOK PLACE THROUGH BANKING CHANNEL AND, THUS, IT DID NOT WARRANT ADDITION. WHAT PREVENTED HIM TO PRODUC E THE RELEVANT BANK PASS BOOKS/STATEMENT ETC., TO PROVE THE GENUINENESS OF SUCH A CLAIM IS ANYBODYS GUESS? IN THE ABSENCE OF ANY DOCUMENTARY PR OOF, THE ASSESSEES REQUEST FOR DELETION OF SUCH AN ADDITION CANNOT BE ACCEDED TO. IT IS ORDERED ACCORDINGLY. IN THE RESULT : I) I) ASSESSEES APPEAL FOR AY 2001-02 IS DISMISSED. II) ASSESSEES APPEAL FOR AY 2003-04 IS ALLOWED FOR STA TISTICAL PURPOSES. III) ASSESSEES APPEAL FOR AY 2004-05 IS PARTLY ALLOWED F OR STATISTICAL PURPOSES. II) I) DEPARTMENTS APPEAL FOR AY 2002-03 IS DISMISSED. II) CROSS OBJECTION FILED BY THE ASSESSEE FOR AY 2002-03 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED ON 21 ST DAY OF APRIL, 2011 AT BANGALORE. SD/- SD/- (A MOHAN ALANKAMONY) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMB ER COPY TO :- 1.THE ASSESSEE 2. THE REVENUE 3. THE CIT (A) CONCERNED. 4. THE CIT CONCERNED. 5. THE DR 6. GF BY ORDER MSP/21.3. ASSISTANT REGISTRAR, ITAT, BANGALORE.