Dr. Akilan Ramnathan, CHENNAI V. ACIT, CHENNAI

ITA 964/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8490 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 15-04-2016
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: M P SENTHIL KUMAR
• Keywords: Reopening of assessment; Unexplained cash credit; Unexplained investment; Gift; Salary income
• Section: 147; 68; 148; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . , ! . # , $ % & [ BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ] ./ I.T.A.NOS.964 TO 966/MDS/2016 / ASSESSMENT YEARS : 2006-07,2007-08 AND 2008-0 9 DR. AKILAN RAMANATH AN #9, STATE BANK COLONY SHASTRI NAGAR ADYAR, CHENNAI 600 020 VS. T HE ASSTT. COMMISSIONER OF INCOME-TAX NON-CORPORATE CIRCLE 15(1) CHENNAI [PAN ACQPA 2957 G] ( '( / APPELLANT) ( )*'( /RESPONDENT) / APPELLANT BY : SHRI M.P.SENTHIL KUMAR, ADVOCATE /RESPONDENT BY : SHRI SHIVA SRINIVAS, JCIT / DATE OF HEARING : 09 - 08 - 2016 ! / DATE OF PRONOUNCEMENT : 16 - 09 - 2016 + / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER THESE APPEALS OF THE ASSESSEE ARE DIRECTED AGAI NST SEPARATE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-15, CHENNAI, DATED 11.3.2016 FOR ASSESSMENT YEARS 2006- 07, 2007-08 AND 2008-09. 2. FIRST WE TAKE UP I.T.A.NO.964/MDS/2016 FOR ASSESSME NT YEAR 2006-07. ITA NO. 964 TO 966/16 :- 2 -: 3. FACTS APROPOS ARE THAT THE ASSESSEE, HOLDING A DOC TORATE DEGREE FROM ANNA UNIVERSITY, CHENNAI, WAS IN CIVIL SERVICE SINCE 1997. HE RESIGNED FROM SUCH SERVICE IN JUNE 2005 AND THER EAFTER WORKED AS PRO-CHANCELLOR, BHARATH UNIVERSITY, CHENNAI FROM JU LY 2005 TO JUNE 2009. AFTER THIS TENURE, HE WORKED AS ADVISOR TO MA HATMA GANDHI MEDICAL COLLEGE FROM AUGUST 2005 TO NOVEMBER 2010. THEREAFTER HE WORKED AS CONSULTANT IN ONE M/S INFO PLUS PVT. LTD FROM APRIL 2010 TO MARCH, 2011. ASSESSEE WAS RECEIVING SALARY, CONSUL TANCY FEES ON RETAINERSHIP SERVICES AND INCOME FROM OTHER SOURCES . 4. FOR THE IMPUGNED ASSESSMENT YEAR, ASSESSEE FILED R ETURN OF INCOME DECLARING INCOME OF ` 6,68,500/-. ASSESSMENT WAS REOPENED BY ISSUING NOTICE U/S 148 OF THE ACT. IN PURSUANC E OF THE NOTICE, THE ASSESSEE REQUESTED THE ASSESSING OFFICER TO TREAT T HE RETURN ORIGINALLY FILED AS THE ONE IN RESPONSE TO THAT NOTICE. DURIN G THE COURSE OF ASSESSMENT, IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD SAVINGS BANK ACCOUNT WITH STATE BANK OF INDIA, INDIRANAGAR BRANCH, INDIAN OVERSEAS BANK, ADYAR BRANCH AND ANOT HER ACCOUNT WITH INDIAN BANK, MG ROAD, PONDICHERRY. ASSESSEE HAD D URING THE COURSE OF ASSESSMENT PROCEEDINGS FILED A CASH FLOW STATEME NT. THE ASSESSING OFFICER FOUND THAT ASSESSEE HAD MADE A CASH DEPOSI T OF ` 1 LAKH IN HIS ACCOUNT IN STATE BANK OF INDIA ON 27.12.2005. SOUR CE OF DEPOSIT ITA NO. 964 TO 966/16 :- 3 -: EXPLAINED BY THE ASSESSEE WAS A WITHDRAWAL OF ` 2 LAKHS FROM THE SAME ACCOUNT ON 21.10.2005. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THIS CONTENTION. ACCORDING TO HIM, ASSESSE E COULD NOT ADDUCE ANY EVIDENCE OR REASON FOR KEEPING SUFFICIENT CASH WITH HIM FOR TWO MONTHS. AN ADDITION OF ` 1 LAKHS WAS MADE U/S 68 OF THE ACT. 5. AGGRIEVED, ASSESSEE MOVED IN APPEAL BEFORE THE CIT (A). APART FROM CHALLENGING THE REOPENING OF ASSESSMENT, ON MERITS IT WAS SUBMITTED BY THE ASSESSEE THAT DEPOSIT HAD COME OU T OF THE WITHDRAWAL FROM THE SAME SB ACCOUNT. HOWEVER, CIT( A) SOUGHT REMAND REPORT FROM THE ASSESSING OFFICER. IN THE R EMAND REPORT THE ASSESSING OFFICER STATED THAT EVIDENCE FURNISHED BY THE ASSESSEE WAS NOT SATISFACTORY. ADDITION WAS CONFIRMED BY THE CI T(A). 6. NOW BEFORE US, THE ASSESSEE HAS TAKEN ALTOGETHER S EVEN GROUNDS OF WHICH GROUND NOS.1,4, 5, 6 & 7 ARE GENER AL NEEDING NO SPECIFIC ADJUDICATION. 7. IN GROUND NO.2 THE ASSESSEE ASSAILS THE REOPENING OF ASSESSMENT. LD. AR SUBMITTED THAT HE WAS NOT PRESS ING THIS GROUND. GROUND NO.2 IS DISMISSED AS NOT PRESSED. 8. IN GROUND NO.3 ASSESSEE ASSAILS ADDITION OF ` 1 LAKH U/S 68 OF THE ACT. 9. THE LD.AR, STRONGLY ASSAILING THE ORDERS OF THE LO WER AUTHORITIES, SUBMITTED THAT COPY OF THE SBI BANK A CCOUNT PLACED AT ITA NO. 964 TO 966/16 :- 4 -: PAGE 9 OF THE PAPER BOOK CLEARLY REFLECTED WITHDRAW AL OF ` 2 LAKHS ON 21.10.2005. AS PER THE LD. AR, MERELY BECAUSE THER E WAS A SHORT GAP OF TWO MONTHS BETWEEN THE WITHDRAWAL AND DEPOSIT, T HE LOWER AUTHORITIES OUGHT NOT HAVE TAKEN A VIEW THAT THE SO URCE OF DEPOSIT WAS UNEXPLAINED. 10. PER CONTRA, THE LD. DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 11. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. COPY OF THE SBI BA NK ACCOUNT PLACED AT PAGE 9 OF THE PAPER BOOK SHOWS THAT ASSESSEE HA D WITHDRAWN ` 2 LAKHS ON 21.10.2005 AND MADE A DEPOSIT OF ` 1 LAKHS ON 27.12.2005. OBSERVATION OF THE LOWER AUTHORITIES WAS THAT THE ASSESSEE BEING NOT IN THE BUSINESS OR PROFESSION AS SUCH, THERE IS NO NEED FOR KEEPING SO MUCH CASH IN HIS HANDS. IN OUR OPINION, THIS IS ON LY A SURMISE AND COULD NOT BE A VALID REASON FOR MAKING THE ADDITION . ASSESSEE HAS A CHOICE OF KEEPING THE MONEY PERSONALLY WITH HIM OR IN THE BANK. JUST BECAUSE ASSESSEE IS NOT A BUSINESSMAN OR PROFESSIO NAL WOULD NOT BE A REASON TO DISENTITLE HIM FROM CLAIMING THE BENEFI T THAT WOULD OTHERWISE BE AVAILABLE. ASSESSEE COULD HAVE MYRIA D OF REASONS FOR KEEPING THE CASH IN HAND WITH HIM. WE CANNOT SAY T HAT ASSESSEE COULD NOT HAVE SHOWN THE SOURCE AS WITHDRAWAL MADE BY HIM FROM THE ITA NO. 964 TO 966/16 :- 5 -: BANK ACCOUNT. WE ARE OF THE OPINION THAT ADDITION WAS NOT JUSTIFIED. SUCH ADDITION IS DELETED. 12. IN THE RESULT, APPEAL FOR ASSESSMENT YEAR 2006-07 I S PARTLY ALLOWED. 13. NOW COMING TO I.T.A.NO.965/MDS/2016 FOR ASSESSMENT YEAR 2007-08, ASSESSEE HAS ALTOGETHER TAKEN NINE GROUND S OF WHICH GROUND NOS.1,6,7,8 & 9 ARE GENERAL IN NATURE NEEDING NO SP ECIFIC ADJUDICATION. 14. GROUND NO.2 WITH REGARD TO REOPENING OF ASSESSMENT WAS NOT PRESSED BY THE LD. AR. ACCORDINGLY, GROUND NO. 2 IS DISMISSED AS NOT PRESSED. 15. IN GROUND NO.3, ASSESSEE IS AGGRIEVED OF THE ADDIT ION OF ` 31,39,000/- U/S 68 OF THE ACT WHICH WAS CONFIRMED BY THE CIT(A). 16. FACTS APROPOS RE THAT THE ASSESSEE HAD DURING THE RELEVANT PREVIOUS YEAR DEPOSITED CASH OF ` 31,39,000/- IN HIS SB ACCOUNT WITH INDIAN OVERSEAS BANK, ADYAR. THE SOURCE THEREOF WA S EXPLAINED TO BE WITHDRAWALS TOTALLING ` 69,61,850/- FROM THE SAME BANK AND FROM HIS ACCOUNT WITH SBI, PRIOR TO THE DATE OF DEPOSIT. A SSESSEE ALSO FURNISHED COPIES OF THE BANK ACCOUNTS. HOWEVER, TH E ASSESSING OFFICER WAS ONCE AGAIN OF THE OPINION THAT THERE BEING A CO NSIDERABLE GAP BETWEEN WITHDRAWALS AND PLACEMENT OF THE DEPOSIT, EXPLANATION OF THE ASSESSEE COULD NOT BE ACCEPTED. AS PER THE ASSESSI NG OFFICER, ASSESSEE OUGHT TO HAVE PROVED THAT WHAT WAS DEPOSIT ED WAS THE SAME ITA NO. 964 TO 966/16 :- 6 -: MONEY WHICH WAS WITHDRAWN. HE HELD THAT IN THE ABS ENCE OF A DETAILED CASH FLOW, IT WOULD BE DIFFICULT TO BELIEV E THAT THE AMOUNTS WITHDRAWN MUCH PRIOR TO THE DEPOSIT COULD BE ACCEPT ED AS THE SOURCE. HE MADE AN ADDITION OF ` 31,39,000/- U/S 68 OF THE ACT. 17. IN HIS APPEAL BEFORE THE CIT(A), ARGUMENT OF THE A SSESSEE WAS THAT BOOKS OF ACCOUNT WERE REQUIRED TO BE MAIN TAINED ONLY IF A PERSON WAS CARRYING ON PROFESSION OR BUSINESS. REL YING ON RULE 6(F), ASSESSEE SUBMITTED THAT UNLESS AND UNTIL ASSESSEE WAS CARRYING ON ONE OF THE PROFESSION MENTIONED IN THE SAID RULE, I T WAS NOT REQUIRED TO MAINTAIN A CASH BOOK. THE CIT(A) SOUGHT A REMAN D REPORT FROM THE ASSESSING OFFICER. IN HIS REMAND REPORT DATED 27.1 .2016, THE ASSESSING OFFICER SIMPLY STATED THAT EVIDENCES FURN ISHED BY THE ASSESSEE WERE NOT SATISFACTORY. THE CIT(A) RELYING ON SUCH REMAND REPORT CONFIRMED THE ADDITION. 18. NOW BEFORE US, STRONGLY ASSAILING THE ORDERS OF THE AUTHORITIES BELOW, LD. AR SUBMITTED THAT THE DEPOSI TS CONSIDERED FOR ADDITION WERE AS UNDER: CASH DEPOSITS BANK DATE AMOUNT DEPOSITED IOB, ADYAR 03.05.2006 14,00,000/ - IOB, ADYAR 07.11.2006 2,00,000/ - IOB, ADYAR 25.11.20 06 5,00,000/ - ITA NO. 964 TO 966/16 :- 7 -: IOB, ADYAR 02.01.2007 1,64,000/ - IOB, ADYAR 04.01.2007 1,50,000/ - IOB, ADYAR 08.01.2007 1,50,000/ - IOB, ADYAR 25.01.2007 3,00,000/ - IOB, ADYAR 28.02.2007 2,00,000/ - IOB, ADYAR 28.02.2007 75,000/ - TOTAL 31,39,000/ - 19. AS PER THE LD. AR, OUT OF THE ABOVE DEPOSITS, THE F OLLOWING AMOUNTS WERE WITHDRAWN FROM VARIOUS BANK ACCOUNTS H ELD BY THE ASSESSEE ON EARLIER DATES: S.NO. DATE BANK AMOUNT IN RS. 1. 11.04.2006 FROM SBI, INDIRA NAGAR BRANCH 5,00,000/ - 2. 26.04.2006 FROM IOB, AD YAR BRANCH 5,00,000/ - 3. 26.04.2006 FROM SBI, INDIRA NAGAR BRANCH 1,00,000/ - 4. 26.04.2006 FROM SBI, INDIRA NAGAR BRANCH 2,00,000/ - 5. 01.04.2006 CASH IN HAND 1,64,343/ - TOTAL 14,64,343/ - FURTHER, AS PER THE LD. AR, DEPOSIT OF ` 5,00,000/- ON 25.11.2006 WAS OUT OF WITHDRAWAL OF ` 4,80,000/- ON 17.11.2006 AND ` 30,000/- ON 20.11.2006. DEPOSIT OF ` 1,64,000/- ON 2.1.2007 AND ` 3,00,000/- ON 25.1.2007, AS PER THE LD. AR WERE OUT OF THE AMOUNT EARLIER ADVANCED BY THE ASSESSEE TO HIS FRIEND SHRI RAGHUPATHY WHIC H WAS REFUNDED BY THE LATTER. INSOFAR AS DEPOSIT OF ` 2,00,000/- AND ` 75,000/- ON 28.2.2007, AS PER THE LD. AR, THESE CAME OUT OF THE FOLLOWING WITHDRAWALS FROM HIS SB ACCOUNT WITH INDIAN BANK, P ONDICHERY: ITA NO. 964 TO 966/16 :- 8 -: DATE CHEQUE NO. AMOUNT 10.01.2007 426456 RS.50,000/- 10.01.2007 426458 RS.50,000/- 10.01.2007 426455 RS.50,000/- 23.01.2007 426462 RS.60,000/- 23.01.2007 426469 RS.20,000/- 17.02.2007 426463 RS.60,000/- THUS, AS PER THE LD. AR, THERE WERE SUFFICIENT WIT HDRAWALS FROM VARIOUS BANKS IN CASH FOR MAKING DEPOSITS. CONTENT ION OF THE LD. AR WAS THAT TIME GAP BETWEEN THESE WITHDRAWALS AND DEP OSITS WAS ONLY TEN MONTHS, THIS WAS NOT SO SIGNIFICANT SO AS TO D OUBT THE SOURCE OF DEPOSITS. RELIANCE WAS PLACED ON THE COPIES OF BAN K ACCOUNTS PLACED IN THE PAPER BOOK. 20. PER CONTRA, LD. DR SUBMITTED THAT IT WAS DIFFICULT TO BELIEVE THAT ASSESSEE KEPT SO MUCH CASH IN HAND WITHOUT AN Y SPECIFIC REASON, ESPECIALLY WHEN ASSESSEE WAS A SALARIED EMPLOYEE. 21. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. COPY OF ASSESSEE S SB ACCOUNT WITH STATE BANK OF INDIA, INDIRANAGAR BRANCH, IS PLACED AT PAGES 4 TO 5 OF THE PAPER BOOK AND THAT OF INDIAN OVERSEAS BANK IS PLACED AT PAGES 1 TO 3 OF THE PAPER BOOK. COPY OF SB ACCOUNT WITH IN DIAN BANK, PONDICHERRY IS PLACED AT PAGES 7 TO 8 OF THE PAPER BOOK. WITHDRAWALS MENTIONED BY THE LD.AR AND WHICH ARE REPRODUCED BY US AT PARA 19 ITA NO. 964 TO 966/16 :- 9 -: APPEAR IN THESE ACCOUNTS EITHER AS SELF WITHDRAWAL S OR AS CASH WITHDRAWALS. EARLIEST DATE OF THE WITHDRAWAL FROM STATE BANK OF INDIA WAS 11.4.2006 FOR A SUM OF ` 2,00,000/-. THE LAST OF THE DEPOSITS MADE WITH INDIAN OVERSEAS BANK, ADYAR CONSIDERED FO R THE ADDITION WAS ` 2,75,000/- DATED 28.2.2007. THUS, THE TIME GAP BETWEEN THE EARLIEST WITHDRAWAL AND LAST OF THE DEPOSITS WAS LE SS THAN 11 MONTHS. ASSESSEE HAD GIVEN EXPLANATION AS TO WHY HE WAS WIT HDRAWING THE AMOUNTS. AS PER THE ASSESSEE, HE WAS ENGAGED IN H OUSE CONSTRUCTION IN STATE BANK COLONY, SHASTRI NAGAR, ADYAR AND WAS NEGOTIATING FOR A PROPERTY AT UK THROUGH AN INDIAN REAL ESTATE AGENT . JUST BECAUSE THERE WAS A GAP OF ABOUT 11 MONTHS, WE ARE OF THE O PINION THAT THE CASH WITHDRAWALS MADE BY THE ASSESSEE PRIOR TO TH E DATE OF THE DEPOSITS OUGHT NOT HAVE BEEN DISBELIEVED. THE CASH BALANCE OF `1,64,343/- AS ON 1.4.2006 CLAIMED AS A SOURCE IS ALSO IN OUR O PINION REASONABLE CONSIDERING THE SOCIAL STANDING OF THE ASSESSEE. HOWEVER, FOR THE DEPOSIT OF ` 1,64,000/- ON 2.1.2007 AND ` 3,00,000/- ON 25.1.2007, CLAIM OF THE ASSESSEE IS THAT IT WAS GI VEN BY SHRI RAGHUPATHY AS REFUND OF ADVANCES EARLIER GIVEN BY THE ASSESSEE TO SHRI RAGHUPATHY. AS PER THE ASSESSEE, THE AMOUNTS GIVEN BY HIM TO SHRI RAGHUPATHY WAS THROUGH CHEQUES. IF SO, THERE IS NO REASON WHY SHRI RAGHUPATHY RETURNED THE AMOUNT IN CASH. IN OU R OPINION, NO RELIABLE EVIDENCE HAS BEEN FILED BY THE ASSESSEE F OR EXPLAINING THE ITA NO. 964 TO 966/16 :- 10 -: VERSION GIVE BY THE ASSESSEE. THUS, SOURCE OF DE POSITS TO THE EXTENT OF ` 4,64,000/-, IN OUR OPINION, REMAINED UNEXPLAINED. INSOFAR AS THE BALANCE AMOUNT IS CONCERNED, ASSESSEE WAS ABLE TO CO-RELATE WITH THE WITHDRAWALS AND DEPOSITS FROM HIS VARIOUS BANK ACCO UNTS. HENCE, WE HAVE NO HESITATION TO RESTRICT THE ADDITION MADE FO R UNEXPLAINED TO ` 4,64,000/-. ASSESSEE GETS A RELIEF OF ` 26,75,000/-. THIS GROUND IS PARTLY ALLOWED. 22. IN GROUND NO.4 GRIEVANCE RAISED BY THE ASSESSEE IS THAT LOANS TAKEN BY HIM FROM HIS WIFE AND FATHER WERE DI SBELIEVED BY THE ASSESSING OFFICER AND AN ADDITION OF ` 26,60,000/- WAS MADE. 23. FACTS APROPOS ARE THAT IN THE CASH FLOW STATEMENT F ILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER, AN AMOU NT OF ` 19 LAKHS WAS SHOWN AS REFUND OF LOANS EARLIER TAKEN BY THE ASSESSEE FROM HIS WIFE SMT.ANANDHI AKILAN. SIMILARLY, ANOTHER SUM OF ` 7,60,000/- WAS SHOWN AS REFUND OF LOAN EARLIER TAKEN FROM HIS FATH ER SHRI V. RAMANATHAN. ASSESSING OFFICER WAS OF THE OPINION T HAT ASSESSEE WAS UNABLE TO PROVE CREDITWORTHINESS OF THESE PERSONS A ND MADE AN ADDITION OF ` 26,60,000/-. 24. IN APPEAL BEFORE THE CIT(A), ARGUMENT OF THE ASSES SEE WAS THAT THE ADDITION AS SUCH WAS MADE BY THE ASSESSING OFFICER WITHOUT ITA NO. 964 TO 966/16 :- 11 -: ANY SPECIFIC DISCUSSION OR REASON. AS PER THE ASS ESSEE, THE ASSESSING OFFICER HIMSELF HAD NOTED WHY THE AMOUNTS WERE EAR LIER RECEIVED FROM SMT. ANANDHI AKILAN AND SHRI V. RAMANATHAN. CONTENT ION OF THE ASSESSEE WAS THAT THESE WERE NOT FRESH LOANS. AS PER THE ASSESSEE, HE HAD DISCHARGED THE ONUS OF PROVING THE IDENTITY OF THE CREDITOR AND ALSO FURNISHED THEIR FULL ADDRESS AND PAN. ARGUMEN T OF THE ASSESSEE WAS THAT SMT. ANANDHI AKILAN HAD GIVEN THE SUM OUT OF A SALE CONSIDERATION OF ` 1,38,00,000/- RECEIVED BY HER FOR SALE OF PROPERTY AT KARAPAKKAM. THE SUM AS PER THE ASSESSEE WAS EARL IER GIVEN BY HIS WIFE FOR CONSTRUCTION OF HOUSE AT SHASTRI NAGAR, C HENNAI. INSOFAR AS ` 7,60,000/- RECEIVED FROM HIS FATHER SHRI R. RAMANAT HAN WAS CONCERNED, ARGUMENT OF THE ASSESSEE WAS THAT SMT. ANANDHI AKILAN HAD GIVEN AN ADVANCE OF ` 36,50,000/- TO SHRI V. RAMANATHAN OUT OF WHICH THE LATTER HAD GIVEN THE SUM. THE CIT(A) S OUGHT A REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSESSING O FFICER IN HIS REMAND REPORT DATED 27.1.2006 STATED THAT EVIDENCES FURNI SHED BY THE ASSESSEE WERE NOT SATISFACTORY. THE CIT(A) CONFIRME D THE ADDITION OF ` 26,60,000/-. 25. NOW BEFORE US LD. AR STRONGLY ASSAILING THE ORDER O F THE CIT(A) SUBMITTED THAT REPAYMENT OF UNSECURED LOANS TAKEN AT AN EARLIER DATE COULD NOT BE CONSIDERED AS UNEXPLAINED CREDIT FOR MAKING ADDITION U/S 68 OF THE ACT. FURTHER, AS PER THE LD . AR, THE FULL ADDRESS ITA NO. 964 TO 966/16 :- 12 -: AND PAN OF BOTH SMT. ANANDHI AKILAN AND SHRI V. RAM ANATHAN WERE FURNISHED TO THE ASSESSING OFFICER. ACCORDING TO T HE LD. AR, SMT. ANANDHI AKILAN HAD ENTERED INTO AN AGREEMENT ON 29 .1.2007 FOR SELLING A PROPERTY TO M/S SRI ABISAI BUILDERS. LD. AR SUBMITTED THAT THE PROPERTY WHICH WAS SOLD BY SMT. ANANDHI AKILAN DEVO LVED ON HER THROUGH A SETTLEMENT DEED DATED 27.10.2006. RELIAN CE WAS PLACED ON THE COPY OF THE SALE AGREEMENT PLACED AT PAGES 14 T O 20 OF THE PAPER BOOK AND COPY OF SETTLEMENT DEED DATED 27.10.2006 P LACED AT PAGES 28 TO 33 OF THE PAPER BOOK. THUS, AS PER THE LD. A R, THE CIT(A) OUGHT NOT TO HAVE DISBELIEVED THE SOURCE OF SMT. ANANDHI AKILAN. INSOFAR AS THE SOURCE OF SHRI V. RAMANATHAN WAS CONCERNED, LD. AR SUBMITTED THAT SHRI V. RAMANATHAN HAD GIVEN A CONFIRMATION LE TTER WHICH GAVE HIS PAN AND ADDRESS. REFERRING TO PAGE 45 OF THE P APER BOOK, LD. AR SUBMITTED THAT THE LOANS ORIGINALLY GIVEN BY THESE PERSONS THROUGH ACCOUNT PAYEE CHEQUES. AS PER THE LD. AR, THEY HAD SUFFICIENT SOURCE TO ADVANCE THE LOAN HENCE, THE ASSESSING OFFICER CO ULD NOT HAVE DISBELIEVED THEIR SOURCE NOR THE REPAYMENT MADE BY THE ASSESSEE. 26. PER CONTRA, LD. DR SUBMITTED THAT ASSESSEE COULD N OT SHOW WHY HE HAD TAKEN SO MUCH LOANS FROM HIS FATHER AND WIFE. AS PER THE LD. DR, VERSION GIVEN BY THE ASSESSEE COULD NOT BE BELIEVED. 27. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. ADDITIONS WERE MA DE BASED ON FIGURES ITA NO. 964 TO 966/16 :- 13 -: APPEARING IN THE CASH FLOW STATEMENT FILED BY THE ASSESSEE. IN THE CASH FLOW, ASSESSEE HAD SHOWN LOAN FROM HIS FATHER AND HIS WIFE AND ALSO REPAYMENT THEREOF. ASSESSEE HAD ALSO FURNISH ED CONFIRMATION LETTERS FROM SMT. ANANDHI AKILAN AND SHRI V. RAMANA THAN, COPIES OF WHICH ARE PLACED AT PAGE 13 AND 44 AND 45 OF THE PA PER BOOK. IN THE CONFIRMATION LETTER SMT ANANDHI AKILAN HAD GIVEN HE R ADDRESS AND PAN AND ALSO CONFIRMED HER SOURCE. SMT ANANDHI AKILAN HAD CLEARLY STATED THAT THE AMOUNTS WERE GIVEN OUT OF THE CONSIDERATIO N RECEIVED BY HER FOR SALE OF LAND AT KARAPAKKAM OWNED BY HER. SHRI V. RAMANATHAN HAD EXPLAINED HIS SOURCE AS ADVANCE RECEIVED BY HIM FOR SALE OF FLAT NO.A001 OWNED BY HIM AT EAST AVENUE, KESAVAPERUMALP URAM. THE LOWER AUTHORITIES DID NOT BRING ANY EVIDENCE ON REC ORD TO SHOW HOW AND WHY THESE CONFIRMATIONS COULD NOT BE BELIEVED. IN OUR OPINION, ASSESSEE HAD PROVED THE GENUINENESS OF THE TRANSACT ION AND CREDITWORTHINESS OF THE CREDITORS. THE AMOUNTS WERE RECEIVED BY ACCOUNT PAYEE CHEQUES. WE ARE OF THE OPINION THAT THE ADDITION MADE BY THE ASSESSING OFFICER HAS NO LEGS TO STAND. THE ADDITION STANDS DELETED. GROUND NO.4 IS ALLOWED. 28. IN GROUND NO.5, THE ASSESSEE AGGRIEVED ON ADDITION S MADE FOR THE FOLLOWING UNSECURED LOANS U/S 68 OF THE AC T: (I) BHARAT UNIVERSITY ` 3,00,000/- (II) JERUSULAM COLLEGE ` 1,50,000/- (III) JAY JEE ENTERPRISES ` 5,00,000/- ITA NO. 964 TO 966/16 :- 14 -: (IV) SHRI VENKATRAMAN ` 5,00,000/- (V) SHRI MOHAN ` 1,00,000/- (VI) SHRI B. NAGARAJAN ` 5,00,000/- (VII) SHRI JAYAGANTHAN ` 3,00,000/- (VIII) SHRI MOHAN KUMAR ` 4,00,000/- TOTAL ` 27,50,000/- 29. FACTS APROPOS ARE THAT IN THE CASH FLOW STATEMENT F ILED BY THE ASSESSEE, THE ABOVE AMOUNTS WERE SHOWN AS LOAN S. ASSESSING OFFICER WAS OF THE OPINION THAT ASSESSEE COULD NOT ESTABLISH THE CREDITWORTHINESS OF THE PARTIES AND ADDITION OF ` 27.50 LAKHS WAS MADE. 30. BEFORE THE CIT(A), ARGUMENT OF THE ASSESSEE WAS TH AT CONFIRMATION OF BHARAT UNIVERSITY SHOWING ITS PAN W AS FILED. SIMILARLY, AS PER THE ASSESSEE, HE HAD FILED CONFIRMATION FRO M JERUSULAM COLLEGE. INSOFAR AS JAY JEE ENTERPRISES IS CONCERNED, ARGUME NT OF THE ASSESSEE WAS THAT NOT ONLY IT WAS CONFIRMED BY THE SAID PART Y BUT ITS FULL ADDRESS AND PAN WERE FILED. SIMILARLY, AS PER THE ASSESSE E HE HAD PROVIDED ALL THE DETAILS OF SHRI VENKATARAMAN, SHRI MOHAN, SHRI B. NAGARAJAN, SHRI JAYAGANTHAN AND SHRI MOHAN KUMAR. THE CIT(A) SOUGH T A REMAND REPORT FROM THE ASSESSING OFFICER. IN THE REMAND R EPORT DATED 27.1.2016 THE ASSESSING OFFICER STATED THAT EXPLANA TION OF THE ASSESSEE WAS NOT SATISFACTORY. THE CIT(A) CONFIRME D THE ADDITION OF ` 27,50,000/-. 31. NOW BEFORE US, LD. AR STRONGLY ASSAILING THE ORDER OF THE CIT(A), SUBMITTED THAT CONFIRMATION LETTER GIVEN BY BHARAT UNIVERSITY A ITA NO. 964 TO 966/16 :- 15 -: COPY OF WHICH WAS PLACED AT PAGE 79 OF THE PAPER BO OK CLEARLY GAVE THEIR ADDRESS AND PAN. SIMILARLY AS PER THE LD. AR , CONFIRMATION LETTER GIVEN BY JERUSULAM COLLEGE A COPY OF WHICH IS PLAC ED AT PAGE 79 OF THE PAPER BOOK ALSO GAVE THEIR FULL DETAILS AND PAN . LD. AR SUBMITTED THAT THE COPY OF THE LEDGER ACCOUNT OF ASSESSEE AP PEARING IN THE BOOKS OF ACCOUNT OF JERUSULAM COLLEGE IS PLACED AT PAGE 80 OF THE PAPER BOOK. IN SO FAR AS JAY JEE ENTERPRISES IS CO NCERNED, LD. AR SUBMITTED THAT CONFIRMATION ALONGWITH THE ADDRESS A ND PAN WAS PLACED AT PAGE 81 OF THE PAPER BOOK ALONGWITH STATE MENT OF ACCOUNT OF THE ASSESSEE IN THEIR BOOKS AT PAGES 82 AND 83 OF THE PAPER BOOK. INSOFAR AS SHRI VENKATARAMAN WAS CONCERNED, LD. AR SUBMITTED THAT ASSESSEE HAD FILED COPY OF THE LEDGER ACCOUNT OF TH E ASSESSEE IN THE BOOKS OF SHRI VENKATARAMAN. STRONG RELIANCE WAS P LACED ON PAGE 84 OF THE PAPER BOOK. SIMILARLY, SHRI B. NAGARAJAN AL SO GAVE CONFIRMATION LETTER COPY OF WHICH IS PLACED AT PAGE 87 OF THE PA PER BOOK. AS PER THE LD. AR, THE SAID CONFIRMATION GAVE THE ADDRESS OF SHRI B. NAGARAJAN ALONGWITH HIS PAN. LD. AR SUBMITTED THAT BANK ACCOU NT OF SHRI B. NAGARAJAN COPY OF WHICH WAS AVAILABLE AT PAGE 86 OF THE PAPER BOOK CLEARLY PROVED CLEARING OF THE CHEQUE IN THE NAME O F THE ASSESSEE ON 28.1.2007. INSOFAR AS SHRI JAYAGANTHAN WAS CONCERN ED, LD. AR SUBMITTED THAT SUCH PERSON HAD ALSO GIVEN CONFIRMAT ION WITH HIS ADDRESS AS WELL AS PAN. SHRI JAYAGANTHAN HAD ALSO IN SUPPORT OF HIS ITA NO. 964 TO 966/16 :- 16 -: SOURCE FURNISHED COPIES OF INCOME TAX RETURNS FOR A SSESSMENT YEARS 2004-05, 2005-06, 2006-07 AND 2007-08. INSOFAR AS SHRI MOHAN KUMAR WAS CONCERNED, THE LD. AR PLACED RELIANCE ON THE CONFIRMATION LETTER FILED BY HIM WHICH WAS PLACED AT PAGE 105 OF THE PAPER BOOK. LD. AR SUBMITTED THAT THE ADDITIONS WERE MADE BY TH E LOWER AUTHORITIES IGNORING ALL THE ABOVE DETAILS FURNISHE D BY THE ASSESSEE. 32. PER CONTRA, SUPPORTING THE ORDERS OF THE AUTHORITIE S BELOW, LD. DR SUBMITTED THAT CREDITWORTHINESS OF THE ABOVE PAR TIES WERE NOT PROVED BY THE ASSESSEE. ACCORDING TO HIM UNLESS A ND UNTIL CREDITWORTHINESS OF THE PARTIES WERE SHOWN MERELY B ECAUSE ALLEGED LOANS WERE RECEIVED CHEQUES, WOULD NOT MAKE IT GEN UINE. AS PER THE LD. DR, THE SUPPORTING CASH FLOW STATEMENT FILED COULD NOT BE RELIED UPON. 33. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. INSOFAR AS LOAN O F ` 3,00,000/- FROM BHARAT UNIVERSITY, THE ASSESSEE HAS PLACED ON RECO RD CONFIRMATION FROM THE UNIVERSITY AT PAGE 78 OF THE PAPER BOOK. SUCH CONFIRMATION IS IN THE LETTER PAD OF THE SAID UNIVERSITY AND GIVES DETAILS LIKE ADDRESS AND ITS PAN. SIMILARLY, FOR THE LOAN OF ` 1,50,000/- CLAIMED TO HAVE BEEN RAISED BY JERUSULAM COLLEGE ALSO, ASSESSEE HA D PLACED A SIMILAR CONFIRMATION AT PAGE 79 OF THE PAPER BOOK. IN OUR OPINION, LOWER ITA NO. 964 TO 966/16 :- 17 -: AUTHORITIES BRUSHED ASIDE THESE CONFIRMATIONS WHICH GAVE DETAILS OF THE PERSONS WITHOUT ANY PROPER REASON. THE ASSESSING O FFICER OUGHT NOT HAVE ASSUMED THAT THEY WERE NOT CREDITWORTHY SINCE THEY WERE INSTITUTIONS OF REPUTE. 34. COMING TO THE ADVANCE RECEIVED FROM JAY JEE ENTERPR ISES OF ` 5,00,000/-, ASSESSEE HAD FILED CONFIRMATION WHICH IS PLACED AT PAGE 81 OF THE PAPER BOOK. THIS SUM OF ` 5,00,000/- WAS RECEIVED BY CHEQUE AND THE PAN AND ADDRESS OF THE SAID FIRM WAS AVAILA BLE. A COPY OF THE ASSESSEES ACCOUNT IN THEIR BOOKS WAS ALSO MADE AVA ILABLE. IN OUR OPINION, THESE EVIDENCE WERE UNFAIRLY REJECTED BY T HE LOWER AUTHORITIES. 35. COMING TO THE ADVANCE OF ` 5,00,000/- FROM SHRI VENKATARAMAN, ASSESSEE HAS PLACED ON RECORD A COPY OF THE LEDGER OF VENKARATAMAN FOR THE PERIOD 1.3.2011 TO 31.3.2011 AT PAGE 84 OF THE PAPER BOOK. LOWER AUTHORITIES HAD REJECTED IT FOR NO GOOD REASON. 36. INSOFAR AS THE ADVANCE OF ` 5,00,000/- FROM SHRI B. NAGARAJAN, ASSESSEE HAD PLACED ON RECORD THE CONFI RMATION FROM THE SAID PERSON WHICH IS AVAILABLE AT PAGE 85 OF THE PA PER BOOK. THE SAID SHRI NAGARAJAN HAD GIVEN DETAILS OF THE CHEQUE AND ALSO STATED THAT HE WAS AN NRI RESIDING IN DUBAI. COPY OF HIS BANK ACCO UNT WITH CORPORATION BANK IS PLACED AT PAGE 86 OF THE PAPER BOOK. HERE ALSO, ITA NO. 964 TO 966/16 :- 18 -: THE LOWER AUTHORITIES HAD TAKEN AN UNFAIR PRESUMPTI ON THAT SHRI NAGARAJAN WAS NOT CREDITWORTHY. 37. COMING TO THE LOAN OF ` 3,00,000/- FROM SHRI JAYAGANTHAN CLAIMED TO HAVE BEEN RAISED FROM SHRI JAYAGANTHAN, ASSESSEE HAD FILED COPY OF THE BANK ACCOUNT OF SHRI JAYAGANTHAN WITH INDIAN OVERSEAS BANK, ADYAR BRANCH. COPY OF THE CONFIRMAT ION LETTER OF SHRI JAYAGANTHAN IS PLACED AT PAGE 87 OF THE PAPER BOOK AND THIS GIVES HIS PAN AND ADDRESS. ASSESSEE HAD ALSO FILED COPIES OF RETURNS OF SHRI JAYAGANTHAN FOR VARIOUS ASSESSMENT YEARS. NO DOUBT, IN THESE RETURNS, THE SAID PERSON HAD NOT SHOWN ANY SIGNIFICANT INCOM E. HOWEVER, THE BALANCE SHEET FILED BY THE SAID PERSON ALONG WITH H IS RETURN WHICH IS AVAILABLE ON RECORD SHOW THAT FOR THE YEAR ENDED 31 .3.2004 HE HAD ADVANCED ` 2,07,800 WHICH HAD INCREASED TO ` 5,90,500/- BY THE YEAR ENDED ON 31.3.2005. ADVANCES SHOWN BY THE SAID PERS ON IN HIS BALANCE SHEET AS ON 31.3.2006 CAME TO ` 6,85,600/-. HENCE TO SAY THAT THE CONCERNED PERSON WAS NOT CREDITWORTHY, BAS ED ON THE INCOME TAX RETURNS WAS IN OUR OPINION NOT CORRECT. ASSES SEE HAD DISCHARGED THE ONUS OF SHOWING THE CREDITWORTHINESS OF SHRI J AYAGANTHAN AND ALSO GENUINENESS OF THE TRANSACTION. ITA NO. 964 TO 966/16 :- 19 -: 38. COMING TO THE LOAN OF ` 4,00,000/- FROM SHRI MOHAN KUMAR, ASSESSEE HAS FILED CONFIRMATION FROM SHRI MOHAN KUM AR WHICH IS AVAILABLE AT PAGE105 OF THE PAPER BOOK. HOWEVER, T HE SAID CONFIRMATION WAS NOT SUPPORTED BY ANY EVIDENCE. EX CEPT STATING THAT THE AMOUNT OF ADVANCE WAS OUT OF HIS SAVINGS, NOTHI NG IS AVAILABLE TO SHOW WHAT WAS THE SOURCE OF INCOME OF SHRI MOHAN KU MAR. HENCE, IN OUR OPINION, ASSESSEE WAS NOT ABLE TO SHOW THAT TH E LOAN OF ` 4,00,000/- CLAIMED TO HAVE RAISED FROM SHRI MOHAN K UMAR WAS GENUINE. 39. INSOFAR AS LOAN OF ` 1 LAKH FROM SHRI MOHAN WAS CONCERNED, NO EVIDENCE WHATSOEVER WAS ADDUCED BY THE ASSESSEE . IN OUR OPINION, ASSESSEE HAS BEEN ABLE TO PROVE SOURCE OF LOANS TO THE FOLLOWING PERSONS: (I) BHARAT UNIVERSITY ` 3,00,000/- (II) JERUSULAM COLLEGE ` 1,50,000/- (III) JAY JEE ENTERPRISES ` 5,00,000/- (IV) SHRI VENKATARAMAN ` 5,00,000/- (V) SHRI B, NAGARAJAN ` 5,00,000/- (VI) SHRI JAYAGANTHAN ` 3,00,000/- TOTAL ` 22,50,000/- WE FIND THAT THE ADDITIONS MADE TO THE EXTENT OF RS ` 22,50,000/- OUT OF THE TOTAL SUM OF ` 27,50,000/- HAS TO BE DELETED. WE DELETE SUCH ADDITION AND SUSTAIN THE ADDITION TO THE EXTENT OF ` 5,00,000/-. GROUND NO.5 IS PARTLY ALLOWED. ITA NO. 964 TO 966/16 :- 20 -: 40. IN THE RESULT, APPEAL OF THE ASSESSEE FOR ASSESSME NT YEAR 2007-08 IS PARTLY ALLOWED. 41. COMING TO ASSESSMENT YEAR 2008-09 IN I.T.A.NO. 966/MDS/2016, THE ASSESSEE HAS TAKEN ALTOGETHER TW ELVE GROUNDS OF WHICH GROUND NOS.1,9,10,11 & 12 ARE GENERAL IN NATU RE, REQUIRING NO SPECIFIC ADJUDICATION. LD. AR DID NOT PRESS GROUND NO.2 WHICH ASSAILS THE REOPENING OF ASSESSMENT U/S 147 OF THE ACT. H ENCE, THIS GROUND IS DISMISSED AS NOT PRESSED. 42. IN GROUND NO.3, THE GRIEVANCE OF THE ASSESSEE IS R EGARDING ADDITION OF ` 14,00,000/- MADE U/S 68 OF THE ACT FOR INVESTMENT BROUGHT BACK FROM M/S TRIPLE A TECHNOLOGY WHICH WAS CONFIRMED BY THE CIT(A). 43. FACTS APROPOS ARE THAT THE ASSESSEE HAD IN ITS CAS H FLOW STATEMENT FOR THE RELEVANT PREVIOUS YEAR SHOWN A SU M OF ` 14,00,000/- AS RECEIVED FROM M/S TRIPLE A TECHNOLOGY. M/S TRIPL E A TECHNOLOGY WAS A COMPANY FLOATED BY THE ASSESSEE ALONGWITH HI S WIFE. AS PER THE ASSESSEE, THE SAID COMPANY DID NOT DO ANY BUSINESS ACTIVITY AND THE SUM OF ` 14,00,000/- INVESTED BY THE ASSESSEE IN THE SAID C OMPANY WAS RETURNED DURING THE RELEVANT PREVIOUS YEAR. HO WEVER, THE ASSESSING OFFICER WAS OF THE OPINION THAT EXCEPT A BOOK ENTRY , THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE IN SUPPORT OF HIS VERSION. HE ITA NO. 964 TO 966/16 :- 21 -: REFUSED TO BELIEVE THE CLAIM OF THE ASSESSEE AND M ADE ADDITION U/S 68 OF THE ACT. 44. IN APPEAL BEFORE THE CIT(A), ARGUMENT OF THE ASSES SEE WAS THAT HE HAD INVESTED A SUM OF ` 2,00,000/- IN FINANCIAL YEAR 2005-06 AND ` 15,00,000/- IN FINANCIAL YEAR 2006-07 IN M/S TRIPLE A TECHNOLOGY. AS PER THE ASSESSEE, THE SAID COMPANY HAD REFUNDED A SUM OF ` 14,00,000/- OUT OF THE SAID AMOUNT. THE CIT(A) SOU GHT A REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSESSING O FFICER IN HIS REMAND REPORT DATED 27.1.2016 STATED THAT THE EVIDENCE PRO DUCED BY THE ASSESSEE WAS NOT SATISFACTORY. THE CIT(A) THEREFOR E, SUSTAINED THE ADDITION. 45. NOW BEFORE US, LD.AR STRONGLY ASSAILING THE ORDERS OF THE AUTHORITIES BELOW, SUBMITTED THAT THE ASSESSEE HAD MADE INVESTMENT OF ` 2,00,000/- IN FINANCIAL YEAR 2005-06 WHICH WAS REF LECTED IN HIS CASH FLOW STATEMENT FOR THE SAID YEAR PLACED AT PAG E 1 OF THE PAPER BOOK. ACCORDING TO HIM, ASSESSEE FURTHER MADE INV ESTMENT OF ` 15,00,000/- DURING FINANCIAL YEAR 2006-07 WHICH WAS SHOWN IN THE CASH FLOW STATEMENT FOR FINANCIAL YEAR 2006-07 PLAC ED AT PAGE 2 OF THE PAPER BOOK. ACCORDING TO THE LD.AR THE BALANCE SHE ET OF M/S TRIPLE A TECHNOLOGIES AS ON 31.3.2006 PACED AT PAGE 4 OF THE PAPER BOOK CLEARLY PROVED THAT OUT OF THE TOTAL SHARE APPLICAT ION MONEY OF ITA NO. 964 TO 966/16 :- 22 -: ` 5,00,000/- RECEIVED BY THE SAID COMPANY, SHARES WER E ISSUED ONLY FOR ` 1,00,000/- AND BALANCE WAS PENDING WITH IT. AS PE R THE LD. AR THE REFUND WAS MADE OUT OF SUCH SUMS INVESTED BY THE A SSESSEE IN M/S TRIPLE A TECHNOLOGIES. 46. PER CONTRA, THE LD. DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 47. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. AS PER THE ASSES SEE, HE HAD INVESTED ` .2,00,000/- DURING THE FINANCIAL YEAR 2005-06 AND ` 15,00,000/- DURING FINANCIAL YEAR 2006-07 IN SHARES OF M/S TRIP LE A TECHNOLOGIES. THE ONLY EVIDENCE PLACED ON RECORD IS THE BALANCE S HEET OF M/S TRIPLE A TECHNOLOGIES FOR FINANCIAL YEAR 31.3.2006. IN TH E SAID BALANCE SHEET NO DOUBT AN AMOUNT OF ` 4,00,000 /- IS SHOWN AS SH ARE APPLICATION MONEY PENDING ALLOTMENT. HOWEVER, ASSESSEE COULD NOT BRING IN ANY EVIDENCE TO SHOW WHETHER THIS WAS REFUNDED DURING T HE RELEVANT PREVIOUS YEAR AND WHETHER THE ADDITIONAL FUNDS OF ` 15,00,000/- CLAIMED BY THE ASSESSEE TO HAVE BEEN INVESTED DURI NG FINANCIAL YEAR 2006-07 WAS RECEIVED BACK DURING THE RELEVANT PREVI OUS YEAR. NO DOUBT IF THE MONEY HAS BEEN RETURNED BY THE SAID CO MPANY TO THE ASSESSEE, CREDIT COULD BE GIVEN TO THE ASSESSEE TO THAT EXTENT. HOWEVER, IN OUR OPINION, THE ISSUE REQUIRES FRESH L OOK BY THE ASSESSING ITA NO. 964 TO 966/16 :- 23 -: OFFICER. WE, THEREFORE, SET ASIDE THE ORDERS OF TH E AUTHORITIES BELOW AND REMIT THE ISSUE REGARDING RECEIPT OF ` 14,00,000/- FROM M/S TRIPLE A TECHNOLOGIES BACK TO THE ASSESSING OFFICER FOR CONS IDERATION AFRESH IN ACCORDANCE WITH LAW. GROUND NO.3 IS ALLOWED FOR ST ATISTICAL PURPOSES. 48. IN GROUND NO.4, GRIEVANCE OF THE ASSESSEE IS REGAR DING CONFIRMATION OF AN ADDITION OF ` 22,14,000/- BEING CREDITS TO THE BANK ACCOUNT. 49. FACTS APROPOS ARE THAT THE ASSESSEE HAD DURING THE PREVIOUS YEAR DEPOSITED CASH OF ` 22,14,000/- IN HIS ACCOUNT WITH INDIAN OVERSEAS BANK, ADYAR BRANCH. EXPLANATION OF THE A SSESSEE WAS THAT HE HAD PRIOR TO THE SAID DATE WITHDRAWN ` 30,65,000/- FROM THE VERY SAME BANK ACCOUNT WHICH WAS UTILIZED FOR MAKING DEP OSITS. HOWEVER, THE ASSESSING OFFICER WAS OF THE OPINION THAT THERE WAS A SIGNIFICANT TIME GAP BETWEEN THE WITHDRAWAL AND DEPOSIT. ACCORD ING TO HIM, CLAIM OF THE ASSESSEE THAT THE VERY SAME MONEY WHICH WAS WITHDRAWN WAS USED FOR MAKING THE DEPOSITS COULD NOT BE ACCEPTED. AS PER THE ASSESSING OFFICER, ASSESSEE WAS NOT DOING ANY BUS INESS AND WAS ONLY A SALARIED EMPLOYEE. FURTHER, ASSESSEE HAD NOT MAINTAINED ANY BOOKS OF ACCOUNT. THUS, AS PER THE ASSESSING OFFICE R, VERSION GIVEN BY THE ASSESSEE COULD NOT BE ACCEPTED. ADDITION OF ` 22,14,000/- WAS MADE U/S 68 OF THE ACT. ITA NO. 964 TO 966/16 :- 24 -: 50. IN APPEAL BEFORE THE CIT(A), ARGUMENT OF THE ASSES SEE WAS THAT BOOKS OF ACCOUNT WERE NOT REQUIRED TO BE MAINT AINED SINCE ASSESSEE WAS NOT CARRYING ON ANY BUSINESS OR PROFES SION AS LAID DOWN U/S 44AA. AS PER THE ASSESSEE, HE WAS ALSO NOT DOI NG ANY PROFESSION IN THE NATURE PRESCRIBED IN RULE 6F OF THE INCOME T AX RULES. ASSESSEE ARGUED THAT WITHDRAWALS MADE EARLIER FROM THE VERY SAME BANK ACCOUNT WERE UTILIZED FOR MAKING DEPOSITS. TH E CIT(A) SOUGHT A REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSE SSING OFFICER IN HIS REMAND REPORT DATED 27.1.2016 STATED THAT THE EVIDE NCE FURNISHED BY THE ASSESSEE WAS NOT SATISFACTORY. CONSIDERING TH E REMAND REPORT OF THE ASSESSING OFFICER, THE CIT(A) CONFIRMED THE ADD ITION. 51. NOW BEFORE US STRONGLY ASSAILING THE ORDERS OF THE LOWER AUTHORITIES, LD. AR SUBMITTED THAT THE FOLLOWING DE POSITS WERE CONSIDERED FOR MAKING ADDITION U/S 68 OF THE ACT : BANK DATE AMOUNT DEPOSITED IOB, ADYAR 07.05.2007 2,00,000/- IOB, ADYAR 22.05.2007 2,50,000/- IOB, ADYAR 02.07.2007 3,00,000/- IOB, ADYAR 24.10.2007 9,00,000/- IOB, ADYAR 31.10.2007 1,50,000/- IOB, ADYAR 13.11.2007 64,000/- IOB, ADYAR 01.12.2007 60,000/- IOB, ADYAR 04.12.2007 50,000/- IOB, ADYAR 07.01.2008 80,000/- IOB, ADYAR 06.02.2008 80,000/- IOB, ADYAR 06.03.2008 80,000/- TOTAL 22,14,000/- ITA NO. 964 TO 966/16 :- 25 -: AS PER THE LD. AR, A SUM OF ` 7,00,000/- WAS RECEIVED AS GIFT FROM HIS CO-BROTHER SHRI A. SUDAMANI WHO WAS WORKING AS AN E NGINEER IN A MULTINACTIONAL COMPANY. DETAILS OF THE GIFT GIVEN BY THE SAID PERSON WERE AS UNDER: 07.05.2007 ` 2,00,000/- 02.07.2007 ` 3,00,000/- 31.10.2007 ` 1,50,000/- 04.12.2007 ` 50,000/- ` 7,00,000/- LD. AR FURTHER SUBMITTED THAT OUT OF THE DEPOSITS M ENTIONED ABOVE, A SUM OF ` 2,00,000/- ON 7.5.2007, ` 3,00,000/- ON 2.7.2007, ` 1,50,000/- ON 31.10.2007 AND ` 50,000/- ON 4.12.2007 CAME OUT OF THE ABOVE GIFTS. DESPITE CONFIRMATION FROM SHRI A. SUDAMANI PLACED AT PAGE 15 OF THE PAPER BOOK, AS PER THE LD.AR, THE AS SESSING OFFICER DISBELIEVED THE GIFT RECEIVED BY THE ASSESSEE. AR GUMENT OF THE LD. AR WAS THAT PARENTS OF THE SAID SHRI SUDAMANI WERE HOS TED BY THE ASSESSEE WHEN THEY CAME FOR MEDICAL TREATMENT IN CH ENNAI. IT WAS FOR PURE LOVE AND AFFECTION THE SAID SHRI SUDAMANI GAVE GIFT TO THE ASSESSEE. LD. AR FURTHER SUBMITTED THAT COPIES OF TAX RETURNS OF SHRI SUDAMANI FOR ASSESSMENT YEARS 2005-06, 2006-07 AND 2007-08 WERE FURNISHED BEFORE THE ASSESSING OFFICER WHICH WERE D ISREGARDED. AS FAR AS CASH DEPOSIT OF ` 2,50,000/- MADE ON 22.5.2007, LD. AR SUBMITTED THAT IT CAME OUT OF THE EARLIER WITHDRAWAL OF ` 3,00,000/- ON 12.4.2007 ITA NO. 964 TO 966/16 :- 26 -: AND ` 4,00,000/- ON 21.4.2007. AS FAR AS THE CASH DEPOSI T OF ` 9,00,000/- ON 24.10.2007, ARGUMENT OF THE LD. AR WA S THAT THE SAME AMOUNT WAS WITHDRAWN ON 23.10.2007 FOR PURCHASE OF LAND AND SINCE THE DEAL DID NOT MATERIALIZE MONEY WAS DEPOSITED BA CK ON THE VERY NEXT DAY. 52. INSOFAR AS THE FOLLOWING CASH DEPOSITS WERE CONCERN ED, LD. AR SUBMITTED THAT IT CAME OUT OF THE SALARY SAVINGS WITHDRAWN FROM INDIAN BANK, PONDICHERRY ON 23.11.2007: SL.NO DATE DEPOSITED AMOUNT ON RS. 1. 13.11.2007 64,000/- 2. 01.12.2007 60,000/- 3. 07.01.2008 80,000/- 4. 06.02.2008 80,000/- 5. 06.03.2008 80,000/- TOTAL 3,64,000/- ACCORDING TO THE LD. AR, THE DEPOSITS STOOD CLEARLY EXPLAINED BUT THESE WERE REJECTED BY THE LOWER AUTHORITIES FOR NO REASO N. 53. PER CONTRA, LD. DR STRONGLY SUPPORTING THE ORDERS O F THE LOWER AUTHORITIES SUBMITTED THAT THE ASSESSEE COULD NOT SUBSTANTIATE THE TIME GAP BETWEEN THE RECEIPT OF MONEY AND DEPOSIT I N THE BANK ACCOUNT. ITA NO. 964 TO 966/16 :- 27 -: 54. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. INSOFAR AS THE SUM OF ` 2,00,000 /- DEPOSITED ON 7.5.2007, ` 3,00,000/- DEPOSITED ON 2.7.2007, ` 1,50,000/- DEPOSITED ON 31.10.2007 AND ` 50,000/- DEPOSITED ON 4.12.2007, CLAIM OF THE ASSESSEE IS THAT IT CAME O UT OF A GIFT OF ` 7,00,000/- RECEIVED FROM HIS CO-BROTHER, SHRI A. SU DAMANI. IN SUPPORT, THE ASSESSEE HAS PLACED BEFORE US COPY OF THE CONFIRMATION LETTER DATED 16.11.2012 GIVEN BY SHRI A. SUDAMANI. SHRI SUDAMANI HAS GIVEN HIS PAN AND ADDRESS. HE HAS ALSO FURNISHED C OPIES OF THE INCOME TAX RETURNS FOR ASSESSMENT YEARS 2005-06, 20 06-07 AND 2007- 08. NO DOUBT THE INCOME ADMITTED BY SHRI A. SUDAM ANI FOR ASSESSMENT YEAR 2005-06 CAME TO ` 1,88,520/-, FOR ASSESSMENT YEAR 2006-07 IT CAME TO ` 4,65,970 AND FOR ASSESSMENT YEAR 2007-08 IT CAME TO ` 7,04,747/- AFTER CLAIMING VARIOUS DEDUCTIONS. INCI DENTALLY, SHRI A. SUDAMANI WAS AN ENGINEER IN AN MNC AND THUS HAD SOURCE OF INCOME FOR GIVING GIFT TO THE ASSESSEE. THE LOWER AUTHORITIES HAVE NOT DISPUTED THE CLAIM OF THE ASSESSEE THAT SHRI A. SU DAMANI IS CO-BROTHER OF THE ASSESSEE. IN SUCH SITUATION, WE ARE OF THE OPINION THAT THE ASSESSEE HAD BROUGHT ON RECORD SUFFICIENT EVIDENCE TO PROVE THE CREDITWORTHINESS OF SHRI A. SUDAMANI AND ALSO THE F ACTUM OF THE GIFT. ITA NO. 964 TO 966/16 :- 28 -: 55. COMING TO THE DEPOSIT OF ` 2,50,000/- ON 22.5.2007, IT IS NOT DISPUTED THAT THE ASSESSEE HAD WITHDRAWN ` 3,00,000/- ON 12.4.2007 AND ` 4,00,000/- ON 21.4.2007 FROM HIS ACCOUNT WITH INDIA N OVERSEAS BANK, ADYAR. ASSESSEE COULD VERY WELL SAY THAT TH E DEPOSIT OF ` 2,50,000/- ON 22.5.2007 HAD COME OUT OF THE ABOVE D RAWINGS. IN OUR OPINION, THE PERIOD OF ONE MONTH WAS NOT LONG ENOUG H TO DISBELIEVE CLAIM OF THE ASSESSEE THAT EARLIER WITHDRAWALS WERE USED FOR MAKING DEPOSIT. 56. COMING TO THE DEPOSIT OF ` 9,00,000/- ON 24.10.2007, ASSESSEE HAD EQUAL WITHDRAWAL OF CASH ON THE PRECED ING DAY AS EVIDENT FROM COPY OF THE BANK OF THE ASSESSEE WITH INDIAN OVERSEAS BANK PLACED AT PAGE 10 OF THE PAPER BOOK. INSOFAR A S THE REMAINING AMOUNT OF ` 3,64,000/- IS CONCERNED, WE FIND THAT ASSESSEE HAD WITHDRAWN OUT OF HIS SALARY EARNINGS PARKED IN HIS ACCOUNT WITH INDIAN BANK, PONDICHERY, SUM OF ` 3,50,000/- ON 23.11.2007. COPY OF THIS BANK STATEMENT HAS BEEN PLACED AT PAGES 11 TO 13 OF THE PAPER BOOK. THE SAID BANK ACCOUNT HAS IN ITS CREDIT SIDE THE SA LARY INCOME RECEIVED BY THE ASSESSEE. IN SUCH A SITUATION, WE ARE OF T HE OPINION THAT THE ASSESSEE COULD CLAIM THE WITHDRAWAL OF ` 3,50,000/- ON 23.11.2007 AS PROPER SOURCE FOR THE DEPOSITS MADE ON 13.11.200 7, 1.12.2007, 7.1.2008, 6.2.2008 AND 6.3.2008 MORE PARTICULAR GIV EN IN PARA 5.2 ITA NO. 964 TO 966/16 :- 29 -: ABOVE. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HAD SHOWN AGRICULTURAL INCOME OF ` 14,79,500/- IN HIS RETURN FOR THE IMPUGNED ASSESSMENT YEAR. SO, WE CANNOT SAY THAT THE SUM OF ` 3,64,000/- DEPOSITED BY THE ASSESSEE ON THE ABOVE DATES WERE FROM UNEXPLAINED SOURCES. WE ARE OF THE OPINION THAT THE ASSESSEE HAD SUFFICIENTLY EXPLAINED THE DEPOSITS OF ` 22,14,000/- IN HIS BANK ACCOUNT. IN VIEW OF THE ABOVE, ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE IS SET ASIDE AND ADDITION OF ` 22,14,000/- STANDS DELETED. GROUND NO.4 IS ALLOWED . 57. IN GROUND NO.5, ASSESSEES GRIEVANCE IS THAT ADDI TION OF ` 7,00,000/- WAS MADE DISBELIEVING THE GIFT CLAIMED B Y THE ASSESSEE TO HAVE BEEN RECEIVED FROM SHRI A. SUDAMANI, CO-BROTHE R OF THE ASSESSEE. 58. THE ABOVE ISSUE HAS ALREADY BEEN CONSIDERED BY US W HILE ADJUDICATING GROUND NO.4 IN THE EARLIER PART OF TH IS ORDER REGARDING SOURCE OF DEPOSIT OF ` 22,14,000/- IN HIS BANK ACCOUNT WITH INDIAN OVERSEAS BANK. WE HAVE HELD THEREIN THAT THE ASSE SSEE WAS ABLE TO SHOW THE SOURCE AND CREDITWORTHINESS OF SHRI SUDAMA NI. IN THE LIGHT OF THE FINDINGS GIVEN IN PARA 54 ABOVE, WE ARE OF T HE OPINION THAT ADDITION OF ` 7,00,000/- WAS NOT CALLED FOR. WE SET ASIDE THE OR DERS OF THE LOWER AUTHORITIES ON THIS ISSUE AND DELETE THE ADDITION. GROUND NO.5 IS ALLOWED. ITA NO. 964 TO 966/16 :- 30 -: 59. IN GROUND NO.6, THE GRIEVANCE RAISED BY THE ASSESS EE IS ADDITION OF ` 3,04,077/- MADE FOR DIFFERENCE IN SALARY AS ADMITTE D IN THE RETURN OF INCOME AND AS SHOWN IN THE CASH FLOW STAT EMENT WHICH WAS CONFIRMED BY THE CIT(A). 60. FACTS APROPOS ARE THAT THE ASSESSEE HAD SHOWN ` 26,90,000/- AS SALARY INCOME FROM BHARATH UNIVERSIT Y IN HIS RETURN OF INCOME. HOWEVER, IN CASH FLOW STATEMENT, HE HAS SHO WN ` 29,94,777/- AS INCOME FROM THE SAID UNIVERSITY. AS PER THE ASS ESSING OFFICER, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAD AGRE ED FOR THE ADDITION OF THE DIFFERENCE OF ` 3,04,777/-. ACCORDINGLY, ADDITION OF ` 3,04,777/- WAS MADE BY THE ASSESSING OFFICER. 61. AGGRIEVED THE ASSESSEE WENT IN APPEAL BEFORE THE C IT(A). ARGUMENT OF THE ASSESSEE BEFORE THE CIT(A) WAS THA T THE DIFFERENCE BETWEEN THE AMOUNT SHOWN IN THE RETURN OF INCOME A ND THAT SHOWN IN THE CASH FLOW STATEMENT WAS ON ACCOUNT OF TAX DEDUC TION AT SOURCE. HOWEVER, IN THE REMAND REPORT FURNISHED BY THE ASSE SSING OFFICER, IT WAS STATED THAT SUFFICIENT EVIDENCE IN THIS REGARD WAS NOT PRODUCED BY THE ASSESSEE. THE CIT(A) CONFIRMED THE ADDITION. 62. NOW BEFORE US, LD. AR SUBMITTED THAT THE CASH FLOW STATEMENT REFLECTED INCOME TAX PAYMENT OF ` 6,13,215/- . AS PER THE ITA NO. 964 TO 966/16 :- 31 -: LD. AR, SUCH INCOME TAX PAYMENT OF ` 6,13,215/- COMPRISED OF THE FOLLOWING ITEMS: DESCRIPTION AMOUNT INCOME TAX (SELF ASSESSMENT ) 1,65,000 TDS FROM MAHATMA GANDHI MEDICAL COLLEGE 1,43,438 TDS FROM BHARAT UNIVERSITY 3,04,777 INCOME TAX AS REFLECTED IN CASH FLOW FOR F.Y 2006-07 6,13,215 LD. AR SUBMITTED THAT IF THE TDS OF ` 3,04,777/- WAS REDUCED FROM THE GROSS AMOUNT OF ` 29,94,777/- THEN THE SALARY INCOME OF ` 26,90,000/- REFLECTED IN THE RETURN OF INCOME WAS CORRECT. 63. PER CONTRA, THE LD. DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 64. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. WHAT WE FIND IS TH AT THE ASSESSEE HAD SHOWN ` 26,90,000/- AS SALARY INCOME IN HIS RETURN. HOWEVE R, ACTUAL SALARY WAS ` 29,94,777/- AGAINST WHICH THERE WAS A TAX DEDUCTION OF ` 3,04,777/-. IT MEANS THAT THE GROSS SALARY RECEIVE D BY THE ASSESSEE WAS ` 29,94,777/- AND NOT ` 26,90,000/- SHOWN BY THE ASSESSEE IN HIS RETURN OF INCOME. THUS, IT IS CLEAR THAT THE ASSESSEE HAD UNDERSTATED HIS SALARY AT ` 26,90,000/-. WE FIND THAT THE ADDITION WAS ITA NO. 964 TO 966/16 :- 32 -: RIGHTLY DONE BY THE AUTHORITIES BELOW. WE DO NOT F IND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). GROUND NO. 6 IS DISMISSED. 65. IN GROUND NO.7, GRIEVANCE OF THE ASSESSEE IS REGAR DING ADDITION OF ` 5,27,753/- BEING THE DIFFERENCE IN TOTAL COST OF CONSTRUCTION OF HOUSE AS ADMITTED BY THE ASSESSEE AND AS VALUED BY THE DVO. 66. FACTS APROPOS ARE THAT ASSESSEE HAD PURCHASED A HO USE ON 3.5.2006 AND CLAIMED EXPENDITURE OF ` 23,46,170/- TO HAVE BEEN INCURRED DURING THE ASSESSMENT YEAR 2007-08 AND ` 12,05,077/- DURING THE ASSESSMENT YEAR 2008-09. THE TOTAL CONSTRUCTIO N COST AS PER THE ASSESSEE CAME O ` 35,51,247/-. THE ASSESSING OFFICER REFERRED THE VALUATION OF CONSTRUCTION TO THE DVO. THE DVO IN H IS REPORT VALUED THE COST OF CONSTRUCTION AT ` 40,79,000/-. CLARIFICATION OF THE ASSESSEE WAS SOUGHT. IN HIS REPLY THE ASSESSEE STATED THAT DVO HAD CONSIDERED CPWD RATES WHEREAS STATE PWD RATES ALONE COULD BE APPLIED. IF STATE PWD RATES WERE CONSIDERED, AS PE R THE ASSESSEE, THE DIFFERENCE WOULD BE ONLY ` 1,82,804/- FOR GROUND FLOOR AND ` 1,24,468/- FOR THE FIRST FLOOR. ASSESSEE ALSO CLA IMED THAT THE BUILDING WAS CONSTRUCTED UNDER SELF-SUPERVISION AND ADDITION AL 5% REBATE HAD TO BE GIVEN FOR IT. THUS, THE CLAIM OF THE ASSESSE E WAS THAT THERE WAS NO REASON TO MAKE ANY ADDITION FOR UNEXPLAINED VALU E OF CONSTRUCTION. ITA NO. 964 TO 966/16 :- 33 -: HOWEVER, THE ASSESSING OFFICER WAS NOT IMPRESSED. ACCORDING TO HIM, THE REPORT OF THE DVO WAS TECHNICALLY CORRECT ONE. ASSESSEE HAD NOT ASSAILED THE SAID REPORT ON ANY PARTICULAR POINT. THUS, HE HELD THT THE DIFFERENCE BETWEEN THE VALUE ESTIMATED BY THE DVO A ND THE COST FURNISHED BY THE ASSE WAS UNEXPLAINED INVESTMENT OF THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR. ACCORDINGLY, ADDITIO N OF ` 5,27,753/- WAS MADE. 67. APPEAL OF THE ASSESSEE DID NOT MEET WITH SUCCESS B EFORE THE CIT(A). 68. NOW BEFORE US, LD. AR STRONGLY ASSAILING THE ORDER OF THE AUTHORITIES BELOW SUBMITTED THAT THE STATE PWD RATE S ALONE SHOULD BE ADOPTED FOR WORKING OUT THE COST OF CONSTRUCTION. IN SUPPORT, RELIANCE WAS PLACED ON THE JUDGMENT OF THE MADRAS HIGH COUR T IN THE CASE OF A. ABDUL RAHIM VS ITO, 258 ITR 714. 69. PER CONTRA, THE LD. DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 70. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. WHAT WE FIND IS T HAT THE ASSESSEE HAD NOT GIVEN ANY VALUATION OF ITS OWN FOR ADOPTION OF STATE PWD RATES. WHEN THE VALUATION MADE BY THE DVO WAS PUT TO THE ASSESSEE, HE SOUGHT SUBSTITUTION OF CPWD RATES WITH STATE PWD R ATES. NO DOUBT, ITA NO. 964 TO 966/16 :- 34 -: IN VIEW OF JUDGMENT OF MADRAS HIGH COURT IN A. ABDU L RAHIM(SUPRA) THE ASSESSEE COULD VERY WELL SAY THAT THE STATE PW D RATES WERE MORE APPROPRIATE SINCE IT CONSIDERED THE LOCATION SPECIF IC DIFFERENCES. ANOTHER CONCERN OF THE ASSESSEE IS THAT IT WAS NOT GIVEN BENEFIT OF SELF-SUPERVISION. IN OUR OPINION, THE ISSUE REQUIR ES FRESH LOOK BY THE ASSESSING OFFICER. THE ASSESSEE SHOULD BE GIVEN A N OPPORTUNITY TO EXPLAIN WHY STATE PWD RATES SHOULD BE ADOPTED AND W HY REBATE FOR SELF-SUPERVISION SHOULD BE GIVEN TO HIM. ACCORDING LY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ISSUE IS RE MITTED BACK TO THE ASSESSING OFFICER FOR DECIDING AFRESH IN ACCORDANCE WITH LAW. GROUND NO.7 IS ALLOWED FOR STATISTICAL PURPOSES. 71. IN GROUND NO.8 GRIEVANCE OF THE ASSESSEE IS THAT C IT(A) SUSTAINED ADDITION OF ` 14,79,500/- OUT OF TOTAL AGRICULTURAL INCOME OF ` 25,74,979/- CLAIMED BY THE ASSESSEE. 72. FACTS APROPOS ARE THAT THE ASSESSEE HAD IN HIS CAS H FLOW STATEMENT SHOW A SUM OF ` 14,79,500/- AS NET INFLOW FROM AGRICULTURAL OPERATIONS. WHEN EXPLANATIONS WERE SOUGHT IT WAS S TATED THAT IT HAD A GROSS AGRICULTURAL INCOME OF ` 25,74,979/-. ASSESSEE WAS REQUIRED TO SUPPORT THE CLAIM OF AGRICULTURAL INCOME. IN RE PLY, THE ASSESSEE STATED THAT THE AGRICULTURAL OPERATIONS WERE DONE I N AN UNORGANIZED WAY AND BILLS AND VOUCHERS WERE NOT AVAILABLE. ASS ESSEE SUBMITTED ITA NO. 964 TO 966/16 :- 35 -: PATTA AND CHITTA TO SUPPORT THE CLAIM OF AGRICULTUR AL INCOME. ASSESSING OFFICER WAS OF THE OPINION THAT PATTA AND CHITTA SI MPLY GIVE THE AREA WHICH WAS USED FOR AGRICULTURAL PURPOSE BUT DID NOT GIVE ANY HINT ABOUT THE INCOME FROM SUCH OPERATION. NEVERTHELESS , THE ASSESSING OFFICER ACCEPTED THAT ASSESSEE WAS HAVING 36.90 AC RES OF AGRICULTURAL LAND. HE HELD THAT IN THE ABSENCE OF BOOKS OF ACCO UNT AND DETAILS, THE EARNING OF THE AGRICULTURAL INCOME COULD AT THE BES T BE ESTIMATED AT ` 15,000/- PER ACRE. THUS, AS PER THE ASSESSING OFFI CER FOR 36.90 ACRES, AGRICULTURAL INCOME EARNED BY THE ASSESSEE AT THE BEST WOULD BE ` 5,53,500/- AGAINST THE ASSESSEES CLAIM OF ` 25,74,979/-. THE BALANCE OF ` 20,21,479/- WAS ADDED AS UNEXPLAINED INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. 73. AGGRIEVED THE ASSESSEE MOVED IN APPEAL BEFORE THE CIT(A) ARGUMENT OF THE HE WAS THAT ASSESSEE WAS CULTIVAT ING WATER MELON, KOREAN GRASS AND BLACK GRAM. AS PER THE ASSESSEE THE NET AMOUNT OF ` 25,74,979/- CLAIMED ON THE AGRICULTURAL OPERATION WAS AFTER EXPENDITURE OF ` 10,95,479/- INCURRED. FURTHER AS PER THE ASSESSEE , THE TOTAL INFLOW IN THE CASH FLOW STATEMENT WAS ONL Y ` 14,79,500/- AND THEREFORE, THERE COULD BE NO CASE FOR ANY ADDITION IN EXCESS OF THIS AMOUNT. THE CIT(A) SOUGHT A REMAND REPORT FROM THE ASSESSING OFFICER. IN THE REMAND REPORT THE ASSESSING OFFICE R STATED THAT ITA NO. 964 TO 966/16 :- 36 -: ASSESSEE WAS UNABLE TO FURNISH ANY EVIDENCE IN SUPP ORT OF ITS CLAIM. HOWEVER, AS PER THE CIT(A) SINCE ASSESSEE HAD SHO WN RECEIPT OF ` 14,79,500/- ALONE AS INFLOW FROM AGRICULTURAL OPERA TION, ADDITION HAD TO BE RESTRAINED TO THIS SUM. HE THEREFORE, RESTRICTED THE ADDITION TO ` 14,79,500/- EFFECTIVELY GIVING A RELIEF OF `10,95,479/- TO THE ASSESSEE. 74. NOW BEFORE US, LD. AR SUBMITTED THE DETAILS OF AGRI CULTURAL CROP AS UNDER: NAME OF THE CROP INCOME (IN RS.) EXPENDITURE (IN RS.) PROFIT (IN RS.) WATER MELON 16,10,152 8,22,347 7,87,805 KOREAN GRASS 8,15,535 2,46,210 5,69,325 URAD DHAL 1,49,292 26,922 1,22,370 TOTAL 25,74,979 10,95,479 14,79,500 75. AS PER THE LD. AR, THE AVERAGE INCOME PER ACRE COME S TO ` 40,095/- WHICH WAS NOT CONSIDERED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAD UNFAIRLY ESTIMATED THE INCOME FROM THE AGRICULTURAL ACTIVITIES AT ` 15,000/- PER ACRE. THEREFORE, ACCORDING TO THE LD. AR, THE ADDITION WAS NOT WARRANTED. 76. PER CONTRA, THE LD. DR STRONGLY SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. ITA NO. 964 TO 966/16 :- 37 -: 77. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AD PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IT IS NOT DISPUTED THAT THE ASSESSEE WAS HAVING 36.90 ACRES OF AGRICULTURAL LAND. CLAIM OF THE ASSESSEE IS THAT IT WAS CULTIVATING WATER MELON, KOREAN GRASS A ND BLACK GRAM IN THE ABOVE AGRICULTURAL LAND AND IT HAD AN INCOME OF ` 40,095/- PER ACRE. AS AGAINST THIS THE ASSESSING OFFICER HAS ES TIMATED ` 15,000/- PER ACRE. CONSIDERING THE LAND HOLDING OF THE ASS ESSEE, WE ARE OF THE OPINION THAT AN INCOME OF ` 20,000/- PER ACRE WOULD BE REASONABLE. THUS, THE AGRICULTURAL INCOME OF THE ASSESSEE FOR 36.90 ACRES OF LAND IN OUR OPINION COULD HAVE BEEN BETTER ESTIMATED AT ` 7,38,000/-. ASSESSEE HAD SHOWN IN THE CASH FLOW STATEMENT ONLY ` 14,79,500/-. SO ADDITION IN OUR OPINION HAS TO BE RESTRICTED TO ` 7,41,500/-. WE THEREFORE, DELETE THE BALANCE ADDITION OF ` 7,38,000/- AND RELIEF OF ` 7,41,500/- IS GIVEN TO THE ASSESSEE. GROUND NO.8 I S TREATED AS PARTLY ALLOWED. 78. GROUND NO.8.4 IS ALTERNATIVE TO THE GROUND NO.8 TAK EN BY THE ASSESSEE. SINCE WE HAVE ALREADY GIVEN DIRECTION THA T THE ADDITION HAS TO BE RESTRAINED TO ` 7,38,000/-, THE ABOVE GROUND HAS BECOME REDUNDANT. ITA NO. 964 TO 966/16 :- 38 -: 79. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. 80. TO SUMMARIZE, ALL THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH SEPTEMBER, 2016, AT CHENNAI. SD/- SD/- ( . # ) (G. PAVAN KUMAR) $ / JUDICIAL MEMBER ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED: 16 TH SEPTEMBER, 2016 RD %& '()( / COPY TO: 1 . / APPELLANT 4. * / CIT 2. / RESPONDENT 5. (+, - / DR 3. *./ / CIT(A) 6. ,01 / GF