ACIT, Circle-23(1), V. Suresh Monga,

ITSSA 118/DEL/2006

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0633 (ITAT-DELHI)
• Duration Of Justice: 8 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-01-2015
• Assessment Year: misc
• Appeal Filed On: 20-04-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A MISRA
• Assessee Lawyers: K SAMPATH RAJAN KUMAR ADOCATES
• Keywords: Unexplained cash credit; Loose papers; Question of law; Block assessment
• Section: 68

Judgement Text

IT(SS) NO.118/D/2006 & CO NO.161/D/2008 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES A NEW DELHI BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI CHANDRAMOHAN GARG, JUDICIAL MEMBER IT(SS)A NO. 118/DEL/2006 BLOCK PERIOD 1.4.96 TO 25.4.02 ASSTT.COMMISSIONER OF INCOME TAX, VS SHRI S URESH MONGA, CIRCLE 23(1), NEW DELHI. S-190, GREATER KAILASH- II, NEW DELHI. C.O. NO. 161/DEL/2008 (IN IT(SS)A NO. 118/DEL/2006) BLOCK PERIOD 1.4.96 TO 25.4.02 SHRI SURESH MONGA, VS ACIT, C IRCLE 23(1), NEW DELHI. N EW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI A. MISRA CIT DR RESPONDENT BY: S/SHRI K. SAMPATH, RAJAN KUMAR ADOCATES DATE OF HEARING: 19.1.2015 O R D E R PER CHANDRAMOHAN GARG, J.M. THE ABOVE CAPTIONED APPEAL OF THE REVENUE AS WELL AS CROSS OBJECTION OF THE ASSESSEE HAVE BEEN DIRECTED AGAINST THE ORDE R OF THE CIT(A)-XXIII, NEW DELHI DATED 31.1.2006 IN APPEAL NO. 271/ 2004-0 5 FOR BLOCK PERIOD RECKONING FROM 1.4.96 TO 25.4.2002. IT(SS) NO.118/D/2006 & CO NO.161/D/2008 2 ADDITIONAL GROUND OF THE REVENUE 2. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES ON ADM ISSIBILITY OF ADDITIONAL GROUND. LD. DR SUBMITTED THAT ADDITIONA L GROUND SUBMITTED BY THE REVENUE IS NECESSARY FOR PROPER ADJUDICATION OF THE APPEAL, THEREFORE THE SAME MAY BE SUBMITTED. LD. DR HAS FURTHER DRAW N OUR ATTENTION TOWARDS IMPUGNED ORDER AND SUBMITTED THAT THE CIT(A ) DELETED ADDITION OF RS.12,72,707 AND RS. 91,817 BEING AGGREGATE OF VARI OUS FIGURES SCRIBBLED ON LOOSE SLIPS WHICH WERE FOUND AND SEIZED DURING THE COURSE OF SEARCH, THEREFORE, THIS GROUND PERTAINING TO MIXED QUESTION OF LAW AND FACT MAY KINDLY BE TAKEN FOR ADJUDICATION. 3. LD. COUNSEL OF THE ASSESSEE OBJECTED TO THE ADMI SSIBILITY OF ADDITIONAL GROUND AND SUBSEQUENTLY, THE LD. COUNSEL OF THE ASS ESSEE SUBMITTED THAT IN ALL FAIRNESS IF IT IS FOUND JUST AND PROPER TO ADMI T ADDITIONAL GROUND OF THE REVENUE, THEN THE ASSESSEE HAS NO SERIOUS OBJECTION IF THE SAME IS ADJUDICATED ON MERITS. IN VIEW OF ABOVE SUBMISSION S OF BOTH THE PARTIES AND ON CAREFUL PERUSAL OF THE IMPUGNED ORDER, WE OB SERVE THAT THE ADDITIONAL GROUND RAISED BY THE REVENUE HAVING MIXE D ESSENCE OF LAW AND FACT IS NECESSARY FOR PROPER ADJUDICATION OF THE GR IEVANCE OF THE REVENUE, THEREFORE, THE ADDITIONAL GROUND SUBMITTED BY THE R EVENUE IS ADMITTED FOR ADJUDICATION. IT(SS) NO.118/D/2006 & CO NO.161/D/2008 3 APPEAL OF THE REVENUE IT(SS)A NO.118/DEL/2006 4. THE REVENUE HAS RAISED ONE MAIN GROUND AND ONE A DDITIONAL GROUND WHICH READ AS UNDER:- THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.6,08,000 MADE ON ACCOUNT OF CASH DEPOSITS IN BAN K ON VARIOUS DATES. THE LD. CIT(A) HAS ALSO ERRED IN DELETING THE ADD ITION OF RS.12,72,707/- AND RS. 91,817/- BEING AGGREGATE OF VARIOUS FIGURES SCRIBBLED ON LOOSE SLIPS, FOUND AND SEIZED DURING THE COURSE OF SEARCH. 5. BRIEFLY STATED THE FACTS GIVING RISE TO THESE CA SES ARE THAT A SEARCH OPERATION U/S 132A OF THE INCOME TAX ACT, 1961 WAS CONDUCTED ON 26.04.2002 IN THE RESIDENTIAL PREMISES OF THE ASSES SEE. AS A RESULT OF SEARCH, CERTAIN DOCUMENTS WERE FOUND AND SEIZED AND THEREFORE, THE AO ASKED THE ASSESSEE TO EXPLAIN ENTRIES AMOUNTING TO RS.91,870 ALONG WITH SUFFICIENT EVIDENCES AND THE AO CONCLUDED THAT THE ASSESSEE FAILED TO EXPLAIN THESE ENTRIES AND THEREFORE TOTAL AMOUNT OF RS.91,870 WAS ADDED BACK AS UNDISCLOSED INCOME OF THE ASSESSEE. THE AO FURTHER OBSERVED THAT ON SOME OF THE BILLS, THERE APPEARED THE NAME OF TH E ASSESSEES WIFE SMT. MONGA REVEALING INVESTMENT IN JEWELLERY AND THE AO WAS OF THE VIEW THAT THE ASSESSEE COULD NOT DISOWN THE RESPONSIBILITY OF EXPLAINING ENTRIES IN THESE DOCUMENTS. THE AO CONCLUDED THE ASSESSMENT P ROCEEDINGS BY HOLDING THAT SINCE THE ASSESSEE FAILED TO DISCHARGE HIS ONUS, THE TOTAL IT(SS) NO.118/D/2006 & CO NO.161/D/2008 4 AMOUNT OF RS.6,79,890 WAS TREATED AS UNDISCLOSED IN COME OF THE ASSESSEE AND ALSO THE SCRIBBLING SHOWED VARIOUS EXPENSES AMO UNTING TO RS.5,92,817 AND SINCE THE ASSESSEE COULD NOT SUBMIT ANY COGENT EXPLANATION, THEREOF, THESE AMOUNTS WERE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE BY MAKING TOTAL ADDITION OF RS.12,72,707 ON PROTECTIVE BASIS AND ORDERED TO BE TREATED THE SAME AMOUNT AS SUBSTANTIVE INCOME IN TH E HANDS OF ASSESSEES WIFE SMT. AVINASH MONGA. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHICH WAS PARTLY ALLOWED DELETING THE ADDITI ON OF RS.91,970 AND PROTECTIVE ADDITION OF RS.12,72,707. THE CIT(A) AL SO DELETED THE ADDITION OF RS.6,08,000 BEING CASH DEPOSITS FOUND IN THE BANK A CCOUNT OF THE ASSESSEE ON VARIOUS DATES. NOW, BEING AGGRIEVED BY THE ABOV E IMPUGNED ORDER OF THE CIT(A), THE REVENUE IS BEFORE THIS TRIBUNAL WIT H THE AFOREMENTIONED GROUND. MAIN GROUND NO. 1 OF THE REVENUE 6. APROPOS MAIN GROUND OF THE REVENUE, LD. DR, SUPP ORTING THE ACTION OF THE AO, SUBMITTED THAT AS PER DETAILS OF NARRATION OF BANK DETAILS SUBMITTED BY THE ASSESSEE, THE ASSESSEE RECEIVED LOAN OF RS. 1 LAKH ON 20.5.1998 AND RS. 5 LAKH ON 20.5.1999 FROM SHRI GYAN GUPTA AND AS SESSEE HAS FAILED TO FURNISH ANY EVIDENCE TO SUPPORT THE FACT THAT THE T RANSACTION HAD ACTUALLY TAKEN PLACE WITH SHRI GYAN GUPTA. THE DR FURTHER PO INTED OUT THAT THE ASSESSEE FAILED TO FURNISH REQUIRED CONFIRMATION AN D OTHER DETAILS AND IT(SS) NO.118/D/2006 & CO NO.161/D/2008 5 DOCUMENTARY EVIDENCE, THEREFORE, THE AO WAS RIGHT I N HOLDING THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE FOR AY 1999-2000 AND 2000-01 RESPECTIVELY. THE DR FURTHER POINTED OUT THAT THE CIT(A) DELETED THE ADDITION WITHOUT ANY BASIS, THEREFORE, CONCLUSION O F THE CIT(A) ON GROUND NO. 5 MAY BE SET ASIDE BY RESTORING THAT OF THE AO ON THIS ISSUE. REPLYING TO THE ABOVE, LD. AR SUBMITTED THAT THE AO DID NOT AFF ORD DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE AND THE CIT(A) AFTER CONSI DERING THE EXPLANATION, SUBMISSION AND OTHER RELEVANT DOCUMENTARY EVIDENCE OF THE ASSESSEE WAS JUSTIFIED IN DELETING THE ADDITION. 7. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSI ONS AND CAREFUL PERUSAL OF THE IMPUGNED ORDER, WE FIND THAT THE CIT (A) IN GROUND NO. 5 OF THE ASSESSEE HAS DEALT WITH THIS ISSUE ON ADDITION OF RS.6,08,000/-. THE OPERATIVE PART OF THE ORDER OF THE CIT(A) DELETING THE ADDITION READS AS UNDER:- NOW THE CONTENTION OF THE APPELLANT IS FOUND TO B E CORRECT. THE STATEMENT OF THE BANK ACCOUNT WHICH ON ONE HAND REVEALS CASH DEPOSITS AS BROUGHT OUT BY THE AO IN HIS ORDER FOR THE PURPOSE OF ITS TAXATION U/S 68, THE S AME BANK ACCOUNTS ON THE OTHER HAND REVEAL WITHDRAWALS ALSO PRIOR TO SUCH CASH DEPOSITS. THEREFORE, THE ASSESSEE'S PLEA THAT THE SAME FUNDS WERE DEPOSITED IN CASH WHICH HAD BEEN WITHDRAWN EARLIER CANNOT BE SIMPLY BRUSHED ASIDE. N O MATTER HOW FARFETCHED THE PROPOSITION IS, STILL IT INDICATES THE AVAILABILITY OF FUNDS WITH THE APPELLANT. A SEARCH WAS CARRIED OUT IN THE RESIDENTIAL PREMISES OF THE APPELLANT AN D IF THE FUNDS SO WITHDRAWN WERE INVESTED OR SPENT ELSEWHERE , SOME CORROBORATING EVIDENCES WOULD HAVE BEEN FOUND AND I N THAT IT(SS) NO.118/D/2006 & CO NO.161/D/2008 6 CASE THE AO WOULD HAVE BEEN JUSTIFIED TO MAKE ADDIT IONS U/S 68 FOR THE UNEXPLAINED CASH DEPOSITS. HOWEVER, FOR WANT OF SUCH EVIDENCES, THE SOURCE OF SUBSEQUENT CASH DEPOS ITS STANDS CORRELATED WITH THE EARLIER CASH WITHDRAWALS. THE PROBABILITY OF THE FUNDS WITHDRAWN AND HAVING BEEN RETAINED BY THE APPELLANT IN CASH MAY BE DOUBTFUL, STILL IN ABSENCE OF ANY PROOF THAT IT HAD ALREADY BEEN UTILIZED AND WAS NOT AVAILABLE AT THE TIME OF DEPOSITS, THE APPELLANT'S EXPLANATION CANNOT BE DISREGARDED. THE RATIO AS LAID DOWN BY TH E HON. APEX COURT IN THE CASE OF CIT VS DURGA PRASAD MERE (1971) 82 ITR 540 (SC) WOULD BE VERY RELEVANT IN THE PRESE NT CASE WHICH SAYS 'APPARENT MUST BE CONSIDERED THE REAL UN TIL IT IS SHOWN THAT THERE ARE REASONS TO BELIEVE THAT THE AP PARENT IS NOT THE REAL AND THAT THE TAXING AUTHORITIES ARE EN TITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY AND THE MATTER HAS TO BE CONSIDERED BY APPL YING THE TEST OF HUMAN PROBABILITIES'. IN THE INSTANT CASE A LSO WHAT IS APPARENT HAS TO BE TAKEN AS REAL IN ABSENCE OF PROO F AS TO WHAT WAS ACTUALLY REAL. BECAUSE OF THE TIME GAP BET WEEN THE WITHDRAWAL OF FUNDS AND THEIR RE-DEPOSIT, THE ASSES SEE'S EXPLANATION MAY NOT APPEAR CONVINCING, BUT SUCH TIM E GAP ALONE CANNOT BE THE REASON TO REJECT THE APPELLANT' S EXPLANATION. SO FAR AS DEPOSIT OF RS.2 LAKHS IN THE BANK ACCOUNT NO. 56317 FOUND CREDITED ON 29.10.1997 IS CONCERNED, IT STANDS WELL EXPLAINED BY THE WITHDRAW AL OF RS.2 LAKHS ON 31.7.1997 BECAUSE A GAP OF THREE MONTHS TI ME CANNOT BE SAID TO BE A LONG GAP. THE FUND WITHDRAWN ON 31.7.1997 WAS AVAILABLE WITH THE APPELLANT FOR REDE POSIT ON 29.10.1997 AND ONCE THE SOURCE OF CREDIT STANDS PRO VED IT CANNOT BE ADDED U/S 68. THE TIME GAP IN RESPECT OF DEPOSITS IN THE BANK ACCOUNT NO. 16488 OF CENTRAL BANK OF IN DIA AND WITHDRAWAL OF FUNDS FROM THE SAME APPEARS TO BE LON GER BUT AS IT REMAINS UNPROVED THAT THE FUNDS WITHDRAWN WER E SPENT OR INVESTED SOMEWHERE ELSE, THE ASSESSEE'S EXPLANAT ION WILL HAVE TO BE ACCEPTED. SO FAR AS DEPOSIT OF RS.1 LAKH AND RS.1,25,000/- ON 12.7.2000 IS CONCERNED, THESE ARE NOT TWO INDEPENDENT DEPOSITS ON PERUSAL OF THE PHOTOCOPY OF THE PASS BOOK IT IS FOUND THAT THE ASSESSEE HAD DEPOSITED RS .1LAKH IN CASH ON 12.7.2000 AND FUNDS TO THE EXTENT OF RS.30, 392/- WAS ALREADY AVAILABLE AS OLD BALANCE. OUT OF THE TOTAL CREDIT BALANCE OF RS.1,30,392/- ONLY, CASH OF RS.1,05,000/ - WAS INITIALLY WITHDRAWN. THIS WAS FOR THE PURPOSE OF PR EPARATION IT(SS) NO.118/D/2006 & CO NO.161/D/2008 7 OF THE BANK DRAFT AND AS CONFIRMED BY THE BANK CERT IFICATE DATED 12.7.2000, PAY ORDER NO. 9243 WAS PREPARED ON THIS DATE I.E. 12.7.2000 FOR RS.1,25,000/-. SINCE IT WAS GOT CANCELLED BY THE APPELLANT ON THE SAME DAY, CREDIT OF RS.1,25,000/- WAS GIVEN TO APPELLANT'S SAVING ACCOU NT AND THAT IS HOW THE DEPOSIT OF RS.1,25,000/- AGAIN APPE ARED ON 12.7.2000. THUS SO FAR AS THIS SUBSEQUENT DEPOSIT O F RS.1,25,000/- IS CONCERNED, DEPOSIT TO THE EXTENT O F RS.1,05,000/- AT LEAST STANDS PROVED. BALANCE OF RS .20,000/- IS BEING CONSIDERED SEPARATELY WITH REFERENCE TO OT HER EARLIER WITHDRAWALS. APART FROM THIS THERE WAS DEPOSIT TO T HE EXTENT OF RS.2,03,000/- BETWEEN 17.1.2001 AND 30.1.2001. A S AGAINST THIS THERE WAS HEAVY WITHDRAWAL TOTALLING T O RS.5 LAKHS ON 2ND AND 4TH FEBRUARY, 1999 AND AGAIN THERE WAS WITHDRAWAL OF RS.1,50,000/- ON 4 TH JULY, 1999. THE ASSESSEE'S RELIANCE ON THE DECISION OF THE HON. PATNA HIGH COU RT IN THE CASE OF ADDL. CIT BIHAR VS MOHAN ENGG. CO. LTD. REP ORTED IN (1985) 151 ITR 571 (PATNA) IS SQUARELY APPLICABLE I N HIS CASE. IN THAT CASE THE DEPOSIT WAS WITHDRAWN FROM T HE ACCOUNT OF 'R' BETWEEN NOVEMBER 28, 1961 TO FEBRUAR Y 6, 1963 AND THE DEPOSITS IN THE NAME OF 'D' HAD BEEN M ADE BETWEEN APRIL 26, 1963 AND SEPTEMBER 2, 1963 AND ON REFERENCE IT WAS HELD THAT 'THE DEPOSIT WAS MADE OU T OF THE FUNDS WITHDRAWN IN THE IMMEDIATELY PRECEDING YEAR A ND HENCE THE ALTERNATIVE PLEA HAD BEEN PROVED BY POSIT IVE EVIDENCE. THE ASSESSEE HAD NOT ONLY DISCHARGED THE ONUS PLACED ON HIM U/S 68 BUT HAD ADDUCED EVIDENCE IN SU PPORT OF HIS PLEA. IT WAS THEREFORE HELD THAT THE DELETION O F THE AMOUNT CREDITED IN THE NAME OF 'D' FROM HIS TOTAL I NCOME WAS VALID. IN THE INSTANT CASE ALSO THE TIME GAP IS ALMOST THE SAME AND THE CASH DEPOSITS HAVE BEEN MADE OUT OF TH E FUNDS WITHDRAWN IN THE PRECEDING YEARS AND THEREFORE THE APPELLANT'S PLEA STANDS PROVED BY POSITIVE EVIDENCE S. AS AGAINST THIS, THERE HAS NOT BEEN BROUGHT EVEN-AN IO TA OF EVIDENCE ON RECORD, EVEN AFTER SEARCHING THE APPELL ANT'S RESIDENTIAL PREMISES TO DISPROVE THE APPELLANT'S CL AIM AND TO PROVE THAT HE DID NOT HAVE SUCH FUNDS AVAILABLE AT THE TIME OF SUBSEQUENT CASH DEPOSITS. SINCE THE ASSESSEE HAS DI SCHARGED HIS ONUS PLACED ON HIM U/S 68 BY ADDUCING EVIDENCE IN SUPPORT OF HIS PLEA ON THE BASIS OF THE SAME PASS B OOKS, THE ADDITION U/S 68 WAS NOT CORRECT AND VALID. EVEN OTH ERWISE THE ASSESSEE HAD CASH CREDIT OF RS.L LAKH ON 20.5.1 998 AND IT(SS) NO.118/D/2006 & CO NO.161/D/2008 8 RS.5 LAKHS ON 20.5.1999 PURPORTED TO HAVE BEEN RECE IVED FROM SHRI GYAN GUPTA AVAILABLE WITH HIM. AS THE SAM E HAS ALREADY BEEN TAXED AS UNEXPLAINED CASH CREDIT AND A S THE ADDITION HAS BEEN HELD TO BE CORRECT ON ACCOUNT OF FAILURE ON THE PART OF THE APPELLANT TO PROVE ITS SOURCE, THE FUNDS TO THE EXTENT OF RS.6 LAKHS AT LEAST WERE AVAILABLE WITH T HE APPELLANT TO EXPLAIN THE CREDITS OF THE SUBSEQUENT PERIOD. IN THE CASE OF CIT VS RAM SANEHI GYAN CHAND (1972) 86 ITR 724 (P&H) IT HAS BEEN HELD 'ON THE INTANGIBLE ADDITIONS MADE IN THE PREVIOUS YEARS, THE ASSESSEE HAD PAID THE INCOM E TAX AND POSSIBLY PENALTY FOR NOT DISCLOSING IT, AND IF THE LAW PERMITS THE ASSESSEE TO CONTEST ADDITION OF THIS INTANGIBLE ADDITIONS FOR EXPLAINING THE CAPITAL IN THE SUBSEQUENT ASSTT YEARS, THE OPPORTUNITY SHOULD BE ALLOWED TO IT IN THE INTEREST OF EQUITY AND FAIR PLAY'. SINCE CASH CREDIT TO THE EXTENT OF RS.6 LAKHS HAS ALREADY BEEN HELD TO BE UNDISCLOSED INCOME OF T HE APPELLANT AS DISCUSSED SUPRA, THE APPELLANT DESERVE S ITS CREDIT IN RESPECT OF SUBSEQUENT CREDIT ENTRIES FOUN D IN THE BANK STATEMENT. IN THIS VIEW OF THE MATTER ALSO ADD ITION OF RS.6,08,000/- WAS NOT CALLED FOR. ACCORDINGLY FOR T HE REASONS DISCUSSED ABOVE, THE SAME IS HEREBY DELETED. 8. ON LOGICAL ANALYSIS OF THE ABOVE CONCLUSION OF T HE CIT(A) IN THE IMPUGNED ORDER, WE NOTE THAT THE FIRST APPELLATE AU THORITY GRANTED RELIEF FOR THE ASSESSEE BY FOLLOWING THE DECISION OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS RAM SANEHI GIAN CH AND (1972) 86 ITR 724 (P&H) WHEREIN IT HAS BEEN HELD THAT ON THE TANGIBLE ADDI TIONS MADE IN THE PREVIOUS YEARS, THE ASSESSEE HAD PAID THE INCOM E TAX AND IF THE LAW PERMITS THE ASSESSEE TO CONTEST ADDITION OF THIS IN TANGIBLE ADDITION FOR EXPLAINING THE CAPITAL IN THE SUBSEQUENT ASSESSMENT YEARS, THE OPPORTUNITY SHOULD BE ALLOWED TO IT IN THE INTEREST OF EQUITY A ND FAIR PLAY. IN THE PRESENT CASE, THE CASH CREDIT TO THE EXTENT OF RS. 6 LAKH H AS ALREADY BEEN HELD TO BE IT(SS) NO.118/D/2006 & CO NO.161/D/2008 9 UNDISCLOSED INCOME OF THE APPELLANT AND THE APPELLA NT DESERVES ITS CREDIT IN RESPECT OF SUBSEQUENT CREDIT ENTRIES FOUND. 9. COMING TO THE FACTS AND CIRCUMSTANCES OF THE PRE SENT CASE, WE NOTE THAT THE IMPUGNED CASH DEPOSITS HAVE BEEN MADE OUT OF THE FUNDS WITHDRAWN IN THE PRECEDING YEARS AND HENCE, WE ARE IN AGREEMENT WITH THE CONCLUSION DRAWN BY THE CIT(A) THAT ASSESSEES STAN D ON THIS ISSUE HAS BEEN PROVED BY POSITIVE EVIDENCES. PER CONTRA, THE AO H AS NOT BROUGHT OUT ANY MATERIAL OR EVIDENCE IN SPITE OF SEARCH OPERATION A T THE RESIDENTIAL PREMISES OF THE ASSESSEE TO DISMISS ASSESSEES CLAIM/STAND T HAT THE ASSESSEE ACTUALLY HAS SUCH FUNDS AVAILABLE AT THE TIME OF SUBSEQUENT CASH DEPOSITS. WE ARE ALSO INCLINED TO HOLD THAT THE CIT(A) WAS QUITE JUS TIFIED IN REACHING TO A CONCLUSION THAT THE ASSESSEE HAS DISCHARGED ITS ONU S INCUMBENT UPON HIM U/S 68 OF THE ACT BY SUBMITTING SUPPORTIVE AND RELI ABLE EVIDENCE AND EXPLANATION VIZ. SAME BANK PASS BOOK ETC. THEREFOR E, THE ADDITION U/S 68 OF THE ACT WAS NOT SUSTAINABLE. HENCE, WE ARE UNABLE TO SEE ANY AMBIGUITY OR ANY OTHER VALID REASON TO INTERFERE WITH THE IMPUGN ED ORDER ON THIS ISSUE AND WE UPHOLD THE DECISION OF THE CIT(A) DELETING T HE SAID ADDITION MADE BY THE AO U/S 68 OF THE ACT. ACCORDINGLY, GROUND NO. 1 OF THE REVENUE IS DISMISSED. IT(SS) NO.118/D/2006 & CO NO.161/D/2008 10 GROUND NO. 2 OF THE REVENUE 10. APROPOS GROUND NO.2, LD. DR SUBMITTED THAT CIT( A) HAS ALSO ERRED IN DELETING THE ADDITION OF RS.12,72,707 AND 91,817 BE ING AGGREGATE OF VARIOUS FIGURES SCRIBBLED ON LOOSE SLIPS, FOUND AND SEIZED DURING THE COURSE OF SEARCH. SUPPORTING THE STAND OF THE AO, LD. DR FUR THER CONTENDED THAT THE ASSESSEE WAS ASKED TO FURNISH SUFFICIENT EVIDENCE R EGARDING SOME ENTRIES AMOUNTING TO RS.91,870 BUT ASSESSEE FAILED TO EXPLA IN THESE ENTRIES DURING ASSESSMENT PROCEEDINGS AND, HENCE, IN THIS SITUATIO N, IN THE ABSENCE OF ANY EXPLANATION FROM THE ASSESSEE, THE SAID AMOUNT WAS RIGHTLY ADDED TO THE INCOME OF THE ASSESSEE. LD. DR HAS FURTHER DRAWN O UR ATTENTION TOWARDS PARA 3 OF THE ASSESSMENT ORDER AND SUBMITTED THAT T HE AMOUNT OF RS.6,79,890 WHICH WAS TOTAL OF LOOSE SLIPS, WAS RIG HTLY TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE AND THERE WERE S CRIBBLINGS WHICH SHOWED VARIOUS EXPENDITURE AMOUNTING TO RS.5,92,817 /- AND THERE WAS NO COGENT AND SUSTAINABLE EXPLANATION FROM THE ASSESSE E, THEREFORE, THE SAID AMOUNT WAS ALSO DISALLOWED AND ADDED TO THE UNDISCL OSED INCOME OF THE ASSESSEE. LD. DR VEHEMENTLY CONTENDED THAT THE TOT AL ADDITION UNDER THE SAID CAME TO RS.12,72,707/- AND PROTECTIVE ADDITION WAS MADE IN THE HANDS OF ASSESSEE AND THE SAME WAS RIGHTLY TREATED AS SUB STANTIVE INCOME IN THE HANDS OF ASSESSEES WIFE SMT. AVINASH MONGA. IT(SS) NO.118/D/2006 & CO NO.161/D/2008 11 11. LD. DR VEHEMENTLY CONTENDED THAT THE CIT(A) WAS NOT JUSTIFIED IN GRANTING RELIEF FOR THE ASSESSEE AS THE APPELLATE O RDER IN THE CASE OF SMT. AVINASH MONGA HAS NOT ATTAINED FINALITY AND THE ADD ITION COULD NOT BE DELETED ONLY ON THIS BASIS. THE DR FINALLY PRAYED THAT THE IMPUGNED ORDER MAY BE SET ASIDE BY RESTORING THAT OF THE AO. 12. REPLYING TO THE ABOVE, LD. COUNSEL OF THE ASSES SEE SUPPORTED THE ORDER OF THE FIRST APPELLATE AUTHORITY AND SUBMITTED A CO PY OF THE ORDER OF ITAT DELHI A BENCH IN ITA NO.389/DEL/2005 AND C.O. NO. 160/DEL/2008 IN THE CASE OF ACIT VS AVINASH MONGA DATED 8.11.2011 AND S UBMITTED THAT THE ORDER OF THE CIT(A) IN THE CASE OF ASSESSEES WIFE SMT. AVINASH MONGA DATED 25.07.2005 HAS BEEN UPHELD BY THE TRIBUNAL DISMISSI NG THE PLEA OF THE REVENUE ON THIS ISSUE. LD. COUNSEL FURTHER SUBMITT ED THAT THE IMPUGNED ADDITION WAS MADE IN THE HANDS OF ASSESSEE ON PROTE CTIVE BASIS AND THE SUBSTANTIVE ADDITION FOR THE AFORESAID AMOUNT HAD B EEN MADE IN THE HANDS OF WIFE OF THE ASSESSEE SMT. AVINASH MONGA AND WHEN THE ADDITION IN THE HANDS OF SMT. AVINASH MONGA HAS BEEN DELETED, THEN PROTECTIVE ADDITION IN THE CASE OF ASSESSEE IS NOT SUSTAINABLE AND, THEREF ORE, THE CIT(A) WAS RIGHT IN GRANTING RELIEF FOR THE ASSESSEE. 13. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISS IONS OF BOTH THE PARTIES AND RELEVANT MATERIAL PLACED ON RECORD, INT ER ALIA, THE ORDER OF THE TRIBUNAL IN THE CASE OF THE ASSESSEES WIFE SMT. AV INASH MONGA DATED IT(SS) NO.118/D/2006 & CO NO.161/D/2008 12 8.11.2011 (SUPRA), WE NOTE THAT UNDISPUTEDLY, THE S UBSTANTIVE ADDITION WAS MADE IN THE HANDS OF ASSESSEES WIFE AND FOR THE SA ME AMOUNT PROTECTIVE ADDITION WAS MADE IN THE CASE OF PRESENT ASSESSEE. WE FURTHER NOTE THAT THE CIT(A) GRANTED RELIEF FOR THE ASSESSEE BY NOTICING DECISION OF THE FIRST APPELLATE AUTHORITY VIZ. CIT-XXX, NEW DELHI DATED 2 5.07.2005 IN APPEAL NO.224/2004-05 AND THIS ORDER ON THIS ISSUE HAS BEE N UPHELD BY THE TRIBUNAL ORDER DATED 8.11.2011 (SUPRA). NOW, WE TA KE COGNIZANCE OF THIS WELL-ACCEPTED PROPOSITION THAT WHEN SUBSTANTIVE ADD ITION IN THE HANDS OF OTHER ASSESSEE WAS NOT FOUND TO BE SUSTAINABLE, THE N PROTECTIVE ADDITION IN THE HANDS OF THE PRESENT ASSESSEE CANNOT BE HELD AS SUSTAINABLE. IN THE PRESENT CASE, THERE WAS A PROTECTIVE ADDITION IN TH E CASE OF PRESENT ASSESSEE I.E. SHRI SURESH MONGA AND SUBSTANTIVE ADDITION IN THE HANDS OF HIS WIFE SMT. AVINASH MONGA WHICH HAS BEEN DELETED BY THE CIT(A) VIDE ORDER DATED 25.07.2005 AND THIS ORDER OF THE FIRST APPELLATE AU THORITY HAS BEEN UPHELD BY THE TRIBUNAL BY ORDER DATED 8.11.2011 WITH FOLLO WING OBSERVATIONS AND CONCLUSION:- 23. CONCERNING THE ADDITION OF RS.12,72,707/-, THI S FIGURE REPRESENTED THE TOTAL OF THE FIGURES APPEARI NG ON PAGES 1 TO 22 OF THE SEIZED ANNEXURE A-1. OUT OF THESE, PAGE 1 OF ANNEXURE A-1 CONTAINED VARIOUS FIGURES, TOTAL AMOUN TING TO RS.95,000/-. THIS SLIP CONTAINED THE NAME OF SMT. MONGA, WITH 10,000 WRITTEN AGAINST HER NAME. THE LD. C IT(A) SUSTAINED THE ADDITION TO THIS AMOUNT OF RS.10,000/ -, WHICH WAS MENTIONED AGAINST THE NAME OF THE ASSESSEE. W E DO NOT IT(SS) NO.118/D/2006 & CO NO.161/D/2008 13 FIND ANY ERROR IN THIS ACTION OF THE LD. CIT(A). THE SEIZED SLIP DID NOT CONTAIN ANY DETAIL OF AS TO WHAT THE FIGURE S CONTAINED THEREIN REPRESENTED THE NAMES MENTIONED ON THE SLI P WERE ONLY OF LADIES, LEADING THE CIT(A) TO THE OBSERVATI ON THAT THE AMOUNTS REPRESENTED SOME SORT OF CONTRIBUTION LIKE A KITTY PARTY. SINCE THE REMAINING AMOUNTS, TOTALLING TO RS. 85,000/- WERE NOT RELATABLE TO THE ASSESSEE, THE ADDITION TO THIS EXTENT WAS RIGHTLY DELETED. 24. NOW WE TURN TO THE ADDITION OF RS. 12,62,707/-. THIS FIGURE REPRESENTS THE AMOUNTS MENTIONED IN PAGES 2 TO 24 OF THE SEIZED ANNEXURE A-1. AS PER THE LD. CIT(A), S OME OF THE SEIZED SLIPS CONTAINED NARRATIONS THAT THE FIGURES MENTIONED THEREIN RELATED TO THE JEWELLERY. THE REST OF THE SLIP DID NOT CONTAIN ANY SUCH RECITAL. THE AO ASSUMED THE FIGU RES ON ALL THE SLIPS TO REPRESENT THE EXPENDITURE FOR PURCHASE OF JEWELLERY, EVEN THOUGH NO JEWELLERY RELATABLE TO TH E ADDED AMOUNT WAS SEIZED IN THE SEARCH OPERATION, THE AO C ONCLUDED THAT THE FIGURES MENTIONED IN THE SEIZED SLIPS REPR ESENTED JEWELLERY PURCHASED BY THE ASSESSEE. PERTINENTLY, ADDITION OF THESE AMOUNTS WAS MADE IN THE BLOCK ASSESSMENT OF N OT ONLY THE ASSESSEE, BUT ALSO HER HUSBAND, SURESH MONGA. IT IS ALSO UNDISPUTED THAT THE AO HAS NOT BEEN ABLE TO RELATE THE AMOUNTS TO THE ASSESSEE OR TO CORROBORATE THE SAME WITH THE JEWELLERY OR OTHER ASSETS DISCOVERED IN THE SEARCH. FURTHER , SURESH MONGA, THE HUSBAND OF THE ASSESSEE IN HIS STATEMENT , HAD STATED THAT THE JEWELLERY WHICH WAS FOUND IN THE H OUSE WAS THE STRIDHAN OF HIS WIFE, THE ASSESSEE OR PURCHASED FR OM THEIR OWN SOURCES. THESE FACTS REMAIN UNCONTROVERTED. 25. THE STAND OF THE DEPARTMENT IN THIS REGARD IS T HAT THE LD. CIT(A) HAS IGNORED THE FACTUM OF THE SLIPS CONTAINI NG THE ENTRIES HAVING BEEN FOUND FROM THE PREMISES OF THE ASSESSEE AND THE ASSESSEE HAVING FAILED TO DISCHARGE HER ONU S U/S 132(4A) OF THE ACT WITH REGARD TO SUCH SLIPS. IN T HIS REGARD, WHEREAS IT IS UNDENIABLE THAT THE ONUS U/S 132(4A) OF THE ACT WAS ON THE ASSESSEE, THE SLIPS SEIZED IN THE SEARCH OPERATION WERE NEITHER IN THE HAND-WRITING OF THE ASSESSEE, N OR DID THEY IT(SS) NO.118/D/2006 & CO NO.161/D/2008 14 CONTAIN THE NATURE OF THE FIGURES MENTIONED THEREIN , NOR AS TO WHETHER THE FIGURES REPRESENTED GOODS OR MONEY, SAL ES OR PURCHASE, THE RECEIPT OR PAYMENT, ETC. THEREFORE, THE SEIZED SLIPS WERE NOTHING MORE THAN DUMB DOCUMENTS. AND, MORE PERTINENTLY, NO MATERIAL WAS FOUND DURING THE SEAR CH, WHICH COULD BE CO-RELATED TO THESE SEIZED SLIPS. 26. IN VIEW OF THE ABOVE, FINDING NO MERIT THEREIN, THE GRIEVANCE OF THE DEPARTMENT IN THIS REGARD IS ALSO REJECTED. AS SUCH, GROUND NOS. 1 TO 4 ARE REJECTED. 14. IN VIEW OF ABOVE, WE ARE INCLINED TO HOLD THAT THE SUBSTANTIVE ADDITION WAS MADE IN THE HANDS OF SMT. AVINASH MONGA AND IN THE ASSESSEES CASE, THERE WAS MERELY A PROTECTIVE ADDITION. WE FURTHER NOTE THAT THE CIT(A)-XXX, NEW DELHI, AFTER DETAILED DELIBERATIONS FOUND THAT THE SUBSTANTIVE ADDITION IS NOT SUSTAINABLE AND BOTH THE ADDITIONS OF RS.12,72,707/ - AND RS.91,870 EXCEPT ADDITION TO THE EXTENT OF RS.10,000 WERE DELETED. WE ARE ALSO IN AGREEMENT WITH THE CONCLUSION OF THE CIT(A) IN THE IMPUGNED ORDER THAT WHATEVER UNDISCLOSED INCOME HAD TO BE TAXED BASED ON THESE LOOSE PAPERS, HAS BEEN TAXED IN THE HANDS OF ASSESSEES WIFE SMT. AVINASH MONGA SUBSTANTIVELY AND AS THE REST OF SUBSTANTIVE ADDITION HAS BEEN DELETED, THEN THERE I S NO GROUND TO UPHOLD THE PROTECTIVE ADDITION IN THE HANDS OF PRESENT ASSESSE E SHRI SURESH MONGA. FINALLY, UNDER ABOVE NOTED FACTS AND CIRCUMSTANCES, WE REACH TO A LOGICAL CONCLUSION THAT THE CIT(A) WAS RIGHT IN GRANTING RELIEF FOR THE ASS ESSEE AND DELETING THE PROTECTIVE ADDITION. ACCORDINGLY GROUND NO. 2 OF T HE REVENUE IS ALSO DISMISSED. IT(SS) NO.118/D/2006 & CO NO.161/D/2008 15 C.O. OF THE ASSESSEE 15. THE ASSESSEE HAS RAISED FOLLOWING CROSS OBJECTI ON:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE AUTHORITIES BELOW ERRED IN LAW IN HOLDING THAT THE LOAN AMOUNTING TO RS.6 LAKHS RECEIVED BY THE ASSESSEE WA S UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX AC T, 1961. 16. SINCE BY THE EARLIER PART OF THIS ORDER, WE HAV E DISMISSED THE MAIN GROUND NO.1 OF THE REVENUE, THEREFORE, C.O. OF THE ASSESSE ON THE SAME ISSUE BECOME INFRUCTUOUS AND WE DISMISS THE SAME AS HAVING BECOM E INFRUCTUOUS. 17. IN THE RESULT, THE APPEAL OF THE REVENUE AS WEL L AS C.O. OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.2.2015. SD/- SD/- (PRAMOD KUMAR) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 23RD FEBRUARY, 2015 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. C.I.T.(A) 4. C.I.T. 5. DR BY ORDER AS STT. REGISTRAR