Smt. Leena Cherian, Bhopal V. The ACIT, 3(1), Bhopal

ITSSA 183/IND/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 8812 (ITAT-INDORE)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-03-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 07-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRIDULA BAJPAI
• Assessee Lawyers: YASHWANT SHARMA
• Keywords: Unexplained investment; Search and seizure; Salary income; Loose papers; Source of fund; Additional evidence; Validity of assessment
• Section: 143(3); 153A; 234B; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : ABDPG0013R I.T(SS).A.NOS. 173 TO 178/IND/2012 A.Y S . : 2003 - 04 TO 2008 - 09 SHRI M.G.CHERIAN, ACIT, BHOPAL VS 3(1), BHOPAL APPELLANT RESPONDENT PAN NO. : AAQPC4178H I.T(SS).A.NOS. 179 TO 185/IND/2012 A.YS. : 2003-04 TO 2009-10 SMT.LEENA CHERIAN, ACIT, BHOPAL VS 3(1), BHOPAL APPELLANT RESPONDENT PAN NO. : ADKPA8557F I.T(SS).A.NOS. 145 TO 148/ IND/2012 A.Y S . : 2005 - 06 TO 2009 - 10 SHRI ASIM ANSARI, ACIT, BHOPAL VS 3(1), BHOPAL APPELLANT RESPONDENT -: 2: - 2 ASSESSEES BY : SHRI YASHWANT SHARMA, ADVOCATE DEPARTMENT BY : SMT. MRIDULA BAJPAI, CIT DR DATE OF HEARING : 25.02.2013 DATE OF PRONOUNCEMENT : 21 . 03 .201 3 O R D E R PER R. C. SHARMA, A.M. M. G. CHERIAN I.T(SS).A.NOS. 173 TO 178/IND/2012: THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINS T THE ORDER OF CIT(A) DATED 28.2.2012 IN THE MATTER OF OR DER PASSED U/S 153A OF THE INCOME-TAX ACT, 1961. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PE RUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS ACCOUNTS OF FICER OF RAJ HOMES PVT.LTD., BHOPAL. SEARCH AND SEIZURE ACTION U /S 132(1) WAS CONDUCTED ON 30.05.2008 IN THE ASSESSEES CASE. IN RESPONSE TO NOTICE U/S 153A, THE ASSESSEE SUBMITTED A LETTER IN WHICH HE STATED THAT THE RETURN FILED U/S 139(1) SHOULD BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE U/S 1 53A. WHILE -: 3: - 3 FRAMING THE ASSESSMENT, THE ASSESSING OFFICER OBSER VED THAT THE ASSESSEE WAS WORKING AS AN ACCOUNTANT IN M/S. R AJ HOMES PRIVATE LIMITED. THUS, MAIN SOURCE OF INCOME WAS FROM THE SALARY AND ASSESSEE WAS ALSO DOING PART TIME AC COUNTING JOB. WHILE FRAMING ASSESSMENT U/S 153A, THE ADDITIO N WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NSC AND KVP, WHICH WAS FOUND DURING COURSE OF SEARCH AS WELL AS ON ACCOUNT OF VARIOUS CASH DEPOSITS IN THE BANK ACCOUN T AND ALSO TOWARDS COST OF CONSTRUCTION INCURRED FOR THE HOUSE CONSTRUCTED BY THE ASSESSEE DURING THE YEARS UNDER CONSIDERATION. 3. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ADDITION TOWARDS THE CASH DEPOSITED BUT DELETED A P ART OF ADDITION MADE ON ACCOUNT OF HOUSE PROPERTY. HOWEVER , AGAINST DELETION OF PART ADDITION, THE REVENUE IS NOT IN AP PEAL BEFORE US. THE ASSESSEE IS BEFORE US TOWARDS ADDITION RETA INED BY THE LD.CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOU ND FROM RECORD THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION -: 4: - 4 SMT. LEENA CHERIAN W/O SHRI M. G. CHERIAN, AGE 40 W AS PRESENT. SHRI M. G. CHERIAN WAS NOT PRESENT AT THE TIME OF SEARCH OPERATION. THE SEARCH WAS CONDUCTED ON 30.5. 2009 AT THE RESIDENTIAL PREMISES OF SHRI M. G. CHERIAN, AT D-322, MINAL RESIDENCY, J.K. ROAD, BHOPAL. STATEMENT OF SM T. LEENA CHERIAN WAS RECORDED DURING THE COURSE OF SEARCH. S HE STATED THAT HER SOURCE OF INCOME IS FROM SALARY AND IS WOR KING IN ORIENT-FANS (DISTRIBUTORS) SITUATED AT MALVIYA 6, B HOPAL. SHE ALSO SAID THAT SHE IS WORKING AND GETTING SALARY OF RS. 5,000/- PER MONTH. SHRI M. G. CHERIAN HAS SAVING BANK ACCOU NT AT CANARA BANK, INDRAPURI BRANCH, BHOPAL AND THEY ARE NOT MAINTAINING ANY BANK LOCKER. SHRI M. G. CHERIAN IS WORKING M/S. RAJ HOMES PVT.LTD. AS A CHIEF ACCOUNTANT. DURI NG THE COURSE OF SEARCH SHRI M. G. CHERIAN WAS NOT AVAILAB LE IN THE HOUSE AS HE HAD GONE TO NEELAMPUR, DISTT. KALIKA TO ATTEND A MARRIAGE CEREMONY. 5. THE FAMILY MEMBERS OF CHERIAN FAMILY CONSISTS OF 1. SHRI M. G. CHERIAN, AGED 42 YEARS 2. SMT. LEENA CHERIAN W/O SHRI M. G. CHERIAN, AGE 40 YEARS. -: 5: - 5 3. SON, AGE 16 YEARS, 4. DAUGHTER, 8 YEARS, 6. DURING THE COURSE OF SEARCH CASH AMOUNTING TO RS. 600/- WAS FOUND AND GOLD JEWELLERY WAS FOUND WEIGHING 78 GMS. TWO FILES AND ONE DIARY WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH AND INVENTORISED AS ANNEXURE BS 1 TO 3. SMT. LEENA CHERIAN HAS STATED IN HER STATEMENT THAT THE DIARY WAS WRITTEN BY HER HUSBAND SHRI M. G. CHERIAN. 7. THE ADDITION MADE ON ACCOUNT NSC WAS DELETED BY THE LD.CIT(A). HOWEVER, IN RESPECT OF KVP AMOUNTING TO RS. 1.13 LAKHS IN THE ASSESSMENT YEAR 2005-06, THE ADDITION WAS SUSTAINED BY THE LD.CIT(A) BY OBSERVING THAT KVP WA S NOT DISCLOSED IN THE RETURN OF INCOME IN THE INVESTMENT . FROM THE RECORD, WE FOUND THAT BOTH THE PURCHASE OF NSC AND KVP WAS DULY DISCLOSED BY THE ASSESSEE IN THE CASH FLOW STA TEMENT FILED BEFORE THE ASSESSING OFFICER, WHICH WAS PURCHASED F ROM THE SAME SOURCES. SINCE THE ASSESSEE WAS HAVING INCOME FROM SALARY, HE WAS NOT REQUIRED TO SUBMIT BALANCE SHEET AS PER APPLICABLE INCOME TAX RETURN FORM. PURCHASE OF NSC WAS -: 6: - 6 ELIGIBLE FOR INVESTMENT REBATE U/S 88/88C, HENCE SH OWN IN THE RETURN, BUT KVP WAS NOT SHOWN AS IT WAS NOT ELIGIBL E FOR ANY DEDUCTION, HOWEVER, INTEREST INCOME OF KVP WAS DULY DISCLOSED AND OFFERED FOR TAXATION IN THE NEXT YEAR ON COMPLE TION OF YEAR. ACCORDINGLY, WE DO NOT FIND ANY JUSTIFICATION FOR T HE ADDITION OF RS. 1,13,000/- MADE ON ACCOUNT OF KVP, WHICH WAS PR OCURED OUT OF DISCLOSED SOURCES OF INCOME AND INTEREST INC OME WHICH WAS DULY DISCLOSED AND OFFERED FOR TAXATION IN THE RETURNS FILED PRIOR TO SEARCH. 8. WITH RESPECT TO THE VARIOUS CASH DEPOSIT IN THE BANK ACCOUNT, THE ASSESSEE HAS FURNISHED DETAILS OF SOUR CE OF BANK SO DEPOSITED BEFORE THE CIT(A), BUT THE CIT(A) DID NOT ACCEPT THE ADDITIONAL EVIDENCE ON THE PLEA THAT THE ASSESS EE DID NOT FILE THE SAME BEFORE THE ASSESSING OFFICER. AFTER G OING THROUGH THE ENTIRE MATERIAL PLACED ON RECORD, WE FOUND THAT THE ADDITIONAL EVIDENCE FILED BEFORE THE CIT(A) GOES TO THE ROOT OF THE ISSUE TO EXPLAIN THE SOURCE OF FUND DEPOSITED I N THE BANK ACCOUNT. IN THE INTEREST OF JUSTICE, WE RESTORE THI S GROUND IN ALL THE YEARS UNDER CONSIDERATION TO THE FILE OF ASSESS ING OFFICER -: 7: - 7 FOR DECIDING AFRESH AFTER GIVING DUE OPPORTUNITY. W E DIRECT ACCORDINGLY. 9. THE ASSESSING OFFICER HAS ALSO MADE ADDITION ON ACCOUNT OF INVESTMENT IN THE HOUSE PROPERTY. BY THE IMPUGNE D ORDER, FOR ASSESSMENT YEAR 2004-05, THE CIT(A) HAS DELETE D THE ADDITION OF RS. 4,78,912/- AFTER GIVING DETAILED RE ASONING, AGAINST WHICH THE REVENUE IS NOT IN APPEAL BEFORE U S. HOWEVER, THE CIT(A) HAS SUSTAINED ADDITION OF RS. 1 .31 LAKHS IN THE ASSESSMENT YEAR 2004-05. HE HAS ENHANCED TH E ADDITION FOR THE ASSESSMENT YEAR 2005-06 FROM RS. 2 2,712/- TO RS. 23,550/- AND FOR ASSESSMENT YEAR 2006-07 FROM R S. 55,500/- TO RS. 57, 548/-. 10. AFTER CONSIDERING THE ENTIRE MATERIAL PLACED ON RECORD, WE FOUND THAT TO ASCERTAIN THE COST OF CONSTRUCTION, T HE ASSESSING OFFICER HAS REFERRED THE MATTER TO THE DVO, WHO HAS NOT SENT HIS REPORT TILL COMPLETION OF ASSESSMENT BY THE ASS ESSING OFFICER. BEFORE THE CIT(A), THE DVOS REPORT WAS AV AILABLE, WHICH INDICATED FOLLOWING DIFFERENCE IN THE COST OF CONSTRUCTION SHOWN BY THE ASSESSEE VIS--VIS COST OF CONSTRUCTIO N ARRIVED AT BY THE DVO, WHICH READS AS UNDER :- -: 8: - 8 PARTICULARS EXPENDITURE AS STATED BY THE ASSESSEE ASSESSED COST OF CONSTRUCTION BY DVO COST OF HOUSE PURCHASED FROM PRIVATE PARTY ( RS. 6,84,000/- PAID TO BUILDER + RS. 12,500 PAID TOWARDS REGISTRY CHARGES) 6,96,500 6,96,500 YEAR-WISE CONSTRUCTION/EXTRA WORK : F.Y. 2003-04 ( A.Y. 2004-05) 1,31,000 1,35,834 F.Y. 2004-05 (A.Y. 2005 - 06) 22,712 23,550 F.Y. 2006-07 ( A.Y. 2007-08 WRONGLY MENTIONED BY DVO AS F.Y. 2005-06 ( A.Y. 2006-07) COPY OF SUBMISSIONS BEFORE DVO AT 55,500 57,548 TOTAL (B) 2,09,212 2,16,932 TOTAL INVESTMENT IN HOUSE RS. 9,05,712 9,13,432 DIFFERENCE ( 9134432 905712) = 7720 11. IT IS CLEAR FROM THE ABOVE THAT THERE WAS ONLY DIFF ERENCE OF RS. 7720/-, ACCORDINGLY, WE MODIFY THE ORDERS OF TH E AUTHORITIES BELOW AND DIRECT THE ASSESSING OFFICER TO RESTRICT -: 9: - 9 ADDITION TO THE EXTENT OF RS. 7720/- IN THE RESPECT IVE ASSESSMENT YEARS AS WORKED OUT HEREINABOVE. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART IN TERMS INDICATED HEREINABOVE. LEENA CHERIAN - I.T(SS).A.NOS. 179 TO 185/IND/2012 : 13. THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 28.02.2012, IN THE MATTER OF ORDER PASSED U/S 153C/143(3) OF THE INCOME-TAX ACT, 1961. 14. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS P ERUSED. A SEARCH & SEIZURE OPERATION U/S 132(1) OF THE INCO ME-TAX ACT, 1961, WAS CARRIED OUT AT THE RESIDENTIAL PREMISES O F SHRI M. G. CHERIAN, ACCOUNTS OFFICER, RAJ HOMES (P) LIMITED, D -322, MINAL RESIDENCY, J.K. ROAD, BHOPAL. THE SEARCH WAS CONDUCTED ON 30.05.2008. CONSEQUENTLY, AFTER RECORD ING REASONS NOTICE U/S 153C DATED 13.07.2010 AND 16.07. 2010 WAS ISSUED TO THE ASSESSEE TO FILE THE RETURN FOR A SSESSMENT YEAR 2003-04 TO 2008-09 IN RESPONSE TO NOTICE U/S 1 53A THE ASSESSEE HAS FILED THE RETURNS. DURING THE COURSE O F SEARCH, NSC AND KVP WERE FOUND. WHILE FRAMING ASSESSMENT U/ S 153C, THE ASSESSING OFFICER MADE ADDITION ON ACCOUN T OF NSC, -: 10: - 10 KVP, CASH DEPOSIT IN THE BANK ACCOUNT AND ALSO JEWE LLERY OF RS. 90,000/-. 15. BY THE IMPUGNED ORDER, THE LD. CIT(A) PARTLY AL LOWED ASSESSEES APPEAL FOR ASSESSMENT YEAR 2005-06 TO 20 07-08, 2008-09 AND 2009-10, WHEREAS APPEAL FILED FOR ASSES SMENT YEAR 2003-04, 2004-05 AND 2006-07 WAS DISMISSED. HO WEVER, REVENUE IS NOT IN APPEAL BEFORE US AGAINST THE ADDI TION DELETED BY THE LD.CIT(A). THE ASSESSEE IS IN FURTHER APPEA L BEFORE US. 16. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORIT IES BELOW AND ALSO CONSIDERED THE CONTENTION OF LD. AUTHORIZE D REPRESENTATIVE AND LD. SENIOR DR. FROM THE RECORD, WE FOUND THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION O F THE RESIDENCE OF M. G. CHERIAN,SMT. LEENA CHERIAN W/O S HRI M. G. CHERIAN, AGE 40 WAS PRESENT. SHRI M. G. CHERIAN WAS NOT PRESENT AT THE TIME OF SEARCH OPERATION. THE SEARCH WAS CONDUCTED ON 30.5.2009 AT THE RESIDENTIAL PREMISES OF SHRI M. G. CHERIAN, AT D-322, MINAL RESIDENCY, J.K. ROAD, B HOPAL. STATEMENT OF SMT. LEENA CHERIAN WAS RECORDED DURING THE COURSE OF SEARCH. SHE STATED THAT HER SOURCE OF INC OME IS FROM SALARY AND IS WORKING IN ORIENT-FANS (DISTRIBUTORS) SITUATED AT -: 11: - 11 MALVIYA 6, BHOPAL. SHE ALSO SAID THAT SHE IS WORKIN G AND GETTING SALARY OF RS. 5,000/- PER MONTH. SHRI M. G. CHERIAN HAS SAVING BANK ACCOUNT AT CANARA BANK, INDRAPURI B RANCH, BHOPAL AND THEY ARE NOT MAINTAINING ANY BANK LOCKER . SHRI M. G. CHERIAN IS WORKING M/S. RAJ HOMES PVT.LTD. AS A CHIEF ACCOUNTANT. DURING THE COURSE OF SEARCH SHRI M. G. CHERIAN WAS NOT AVAILABLE IN THE HOUSE AS HE HAD GONE TO NE ELAMPUR, DISTT. KALIKA TO ATTEND A MARRIAGE CEREMONY. 17. THE FAMILY MEMBERS OF CHERIAN FAMILY CONSISTS O F 1. SHRI M. G. CHERIAN, AGED 42 YEARS 2. SMT. LEENA CHERIAN W/O SHRI M. G. CHERIAN, AGE 40 YEARS. 3. SON, AGE 16 YEARS, 4. DAUGHTER, 8 YEARS, 18. DURING THE COURSE OF SEARCH CASH AMOUNTING TO RS. 600/- WAS FOUND AND GOLD JEWELLERY WAS FOUND WEIGHI NG 78 GMS. TWO FILES AND ONE DIARY WAS FOUND AND SEIZED D URING THE COURSE OF SEARCH AND INVENTORISED AS ANNEXURE BS 1 TO 3. SMT. -: 12: - 12 LEENA CHERIAN HAS STATED IN HER STATEMENT THAT THE DIARY WAS WRITTEN BY HER HUSBAND SHRI M. G. CHERIAN. 19. WE FOUND THAT SOURCE OF INVESTMENT IN NSC & KVP WERE EXPLAINED BY CASH FLOW STATEMENT PLACED BEFORE THE LOWER AUTHORITIES, WHICH INDICATED AVAILABILITY OF CASH O N THE RESPECTIVE DATES FOR ALL PURCHASES. HOWEVER, IT WAS NOT ACCEPTED BY THE ASSESSING OFFICER ON THE PLEA THAT CASH FLOW STATEMENT WAS PREPARED SUBSEQUENT TO THE SEARCH PROCEEDINGS. THE ASSESSING OFFICER HAS ALSO NOT ACC EPTED THE CONTRIBUTION FROM FATHER FOR HER HOUSE AMOUNTING TO RS. 35,000/-, WHICH WAS ALSO DULY REFLECTED IN THE CASH FLOW STATEMENT OF EARLIER YEARS PRIOR TO ASSESSMENT YEAR 2005-06. SIMILARLY, IN ASSESSMENT YEAR 2006-07 AND 2007-08, REPAYMENT OF VARIOUS LOANS CLAIMED TO HAVE BEEN GIV EN EARLIER SHOWN AS A SOURCE OF INCOME. HUSBAND OF ASSESSEE MR . M. G. CHERIAN, WAS WORKING WITH THE RAJ BUILDERS. THE ASS ESSEE WAS ALSO EMPLOYEE OF M/S. ORIENT FANS (DISTRIBUTORS), B HOPAL. HOWEVER, WHILE ASKING FOR THE SOURCE OF THE DEPOSIT IN THE BANK ACCOUNT , WHICH WAS PARTLY UTILIZED FOR PURCHA SE OF NSC, KVP, THE ASSESSING OFFICER HAS ASKED THE ASSESSEE T O EXPLAIN -: 13: - 13 DEPOSITS ABOVE RS. 20,000/- ONLY, WHEREAS HE HAS MA DE ADDITION OF CASH DEPOSIT EVEN UP TO RS. 20,000/-. W E FOUND THAT CASH DEPOSIT IN THE BANK HAVE COME OUT OF CASH AVAILABLE AS PER CASH FLOW STATEMENT ON THE PARTICULAR DATE, WHICH HAS MAINLY GIVEN FROM ACCOUNT CHARGES RECEIVED IN CASH. CHEQUE DEPOSITED IN THE BANK ACCOUNT WAS ONLY OUT OF SALAR Y AND INTEREST FROM BANK DEPOSITS. WE FOUND THAT ASSESSIN G OFFICER HAS NOT REJECTED THE CASH FLOW STATEMENT NOR HE HAS DISPROVED THE AVAILABILITY OF CASH. IT APPEARS THAT CASH FLOW OF STATEMENT SO FURNISHED BY THE ASSESSEE HAVE NOT BEEN CORRECTL Y APPRECIATED BY THE ASSESSING OFFICER. IN THE INTERE ST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE BACK TO THE FI LE OF ASSESSING OFFICER FOR EXAMINING IN DETAIL AFTER GIVING DUE OP PORTUNITY TO EXPLAIN THE DEPOSIT IN THE BANK ACCOUNT ON VARIOUS DATES. 20. IN THE RESULT, THE ADDITIONS MADE ON ACCOUNT OF CASH DEPOSIT IN THE BANK ACCOUNT AS WELL AS INVESTMENT T OWARDS NSC AND KVP ARE RESTORED BACK TO THE FILE OF ASSESS ING OFFICER FOR DECIDING AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. LEGALITY OF ASSESSMENT FRAMED U/S 153C, A S CHALLENGED B Y ASSESSEE HAS NO LEGS TO STAND IN SO FAR AS -: 14: - 14 INCRIMINATING DOCUMENTS WERE FOUND DURING SEARCH AN D ONLY AFTER RECORDING DUE SATISFACTION ASSESSING OFFICER HAS PROCEEDED TO FRAME ASSESSMENT U/S 153A READ WITH SE CTION 153C OF INCOME-TAX ACT, 1961. 21. IN THE RESULT, THE APPEALS ARE PARTLY ALLOWED I N PART IN TERMS INDICATED HEREINABOVE. ASIM ANSARI : I.T(SS).A.NOS. 145 TO 148/IND/2012 : 22. THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 289.2.2012 IN THE MATTER OF O RDER PASSED U/S 153A READ WITH SECTION 153C OF THE INCOME-TAX A CT, 1961, FOR THE ASSESSMENT YEARS 2003-04 TO 2008-09. 23. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS P ERUSED. THERE WAS SEARCH AND SEIZURE OPERATION U/S 132(1) A T THE RESIDENCE OF THE ASSESSEE AT HOUSE NO. 49, ABOVE JI YAJI SHOES, IBRAHIMPURA, BHOPAL, ON 30.5.2008. DURING THE COURS E OF SEARCH, VARIOUS INCRIMINATING DOCUMENTS WERE FOUND, ON THE BASIS OF WHICH ADDITIONS WERE MADE BY THE ASSESSING OFFICER. ACCORDINGLY, CONTENTION RAISED BY THE ASSESSEE TO T HE EFFECT THAT ASSESSMENT FRAMED U/S 153A WAS NOT JUSTIFIED O N THE PLEA OF NO INCRIMINATING DOCUMENTS FOUND DURING COURSE O F SEARCH, -: 15: - 15 IS NOT SUSTAINABLE. ACCORDINGLY, WE DISMISS THE LEG AL GROUND TAKEN BY THE ASSESSEE. IN THE ASSESSMENT YEAR 2005- 06 TO 2008-09 ADDITIONS WERE MADE BY THE ASSESSING OFFICE R IN RESPECT OF INVESTMENT IN HOUSE AT IBRAHIMPURA. THE FACTS OF THE CASE IN BRIEF ARE THAT DURING THE COURSE OF SEA RCH CERTAIN DOCUMENT FOR PURCHASE OF HOUSE AND FOR CONSTRUCTION OF HOUSE WERE FOUND AND WERE SEIZED IN THE FILE NO. LPS-1. T HE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF INVESTMENT IN THE PROPERTIES AND CONSTRUCTION, THE ASSESSEE DID NOT SUBMIT EXPLANATION FOR THE SAME HENCE THE A SSESSING OFFICER MADE THE FOLLOWING ADDITIONS :- A.Y. 2005-06 RS. 6,51,000/- A.Y. 2006-07 RS. 1,13,925/- A.Y. 2007-08 RS. 1,59,495/- A.Y. 2008-09 RS. 2,05,065/- 24. THE ASSESSING OFFICERS FINDING ON THE ISSUE IS AS UNDER :- DURING THE COURSE OF SEARCH OPERATION HELD AT TH E RESIDENTIAL PREMISE OF MR. ASIM ANSARI VARIOUS LOOS E PAPERS RELEASED TO CONSTRUCTION/PURCHASE OF HOUSE WERE FOUND WHICH WERE INVENTORISED AS LPS-1. -: 16: - 16 25. PERUSAL OF VARIOUS SHEETS OF LPS-1 PRODUCED THE FOLLOWING FACTS :- - PAGE NO. 5 OF LPS-1 CONTAINED MAP OF HOUSE AT H.NO.49, ABOVE JIYAJEE SHOE HOUSE, IBRAHIMPURA, BHOPAL AND NOC CERTIFICATE ISSUED BY BHOPAL NAGAR NIGAM VIDE LETTER NO.379/NAZUL B-121/04-05 DATED 22.7.2005 FOR CONSTRUCTION OF A HOUSE ON PLOT AREA 217 SQ.FT. FOR THESE FLOOR HOUSE, GROUND FLOOR TWO SHOPS, FIRST FLOOR THREE SHOPS AND SECOND FLOOR TWO BED ROOM. - THE NOC LETTER WAS ISSUED IN THE NAME OF THE HOUSE OWNER SHRI ASIM ANSARI. - THE BUILT UP AREA IS 217 SQ. FT. X 3 = 650 SQUARE FEET APPROXIMATELY. THE CONSTRUCTION WAS COMPLETED AT THE TIME OF SEARCH. 26. SHRI NASEEM ANSARI BROTHER OF SHRI ASIM ANSARI HAS STARTED IN HIS STATEMENTS RECORDED DURING SEARCH OP ERATIONS THAT THESE PAPERS RELATED TO SHRI ASIM ANSARI AND S HRI ASIM ANSARI CAN SAY ABOUT THESE PAPERS. -: 17: - 17 27. BEFORE THE CIT(A), THE ASSESSEE FILED APPLICATI ON UNDER RULE 46A TO SUPPORT THE CONTENTION REGARDING INVEST MENT IN HOUSE PROPERTY. IT WAS ALSO SUBMITTED THAT THE SAID PROPERTY BELONGS TO AUKAF AND THE ASSESSEE IS ONLY A TENANT THAT THE LAND ON WHICH CONSTRUCTION IS MADE WAS PURCHASED I N FINANCIAL YEAR 1991-92 FOR RS. 1,52,000/-. HENCE, A DDITION FOR PURCHASE OF LAND IS INVALID. IN RESPECT OF CONSTRUC TION IT IS CLAIMED THAT ONLY SHOPS HAS BEEN MADE AND NO OTHER CONSTRUCTION IS DONE. IN SUPPORT OF COST OF CONSTRU CTION A COPY OF BALANCE SHEET IS SUBMITTED. 28. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ADDITION IN ALL THE FOUR YEARS I.E. 2005-06 TO 2008 -09 AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 29. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS P ERUSED. FROM THE RECORD, WE FOUND THAT DURING COURSE OF SEA RCH, THE ASSESSING OFFICER ASKED QUERY REGARDING HOUSE AT H. NO.49, ABOVE JIYAJEE SHOE HOUSE, IBRAHIMPURA, BHOPAL, FOR WHICH ASSESSEE STATED THAT IT DID NOT BELONG TO HIM AND B ELONGS TO AUKAF. FROM THE RECORD, IT APPEARS THAT IN RESPECT OF THIS HOUSE NOC WAS BY NAZUL OFFICE, BHOPAL, FOR CONSTRUC TION OF -: 18: - 18 217 SQ. FT OF PLOT, WHICH IS AT PLOT NO. 49 ADJACEN T TO HOUSE NO. 49, ABOVE JIYAJI HOUSE, IBRAHIMPURA, BHOPAL. THIS L AND WAS STATED TO BE PURCHASED LONG BACK IN THE FINANCIAL Y EAR 1991-92 FOR WHICH RS. 1.52 LAKHS WAS PAID AND NOT IN THE FI NANCIAL YEAR 2004-05 AS STATED BY THE ASSESSING OFFICER. THE ASS ESSEE HAS FILED PURCHASE DEED WITH THE APPLICATION UNDER RULE 46A WITH THE CIT(A), BUT HE DID NOT ADMIT THE SAME. IT WAS S TATED THAT THE ORIGINAL DEED WAS LYING WITH NAGARIK SAHKARI BA NK LIMITED, MAIN BRANCH, BHOPAL, AGAINST LOAN FOR WHIC H ASSESSEE ALSO REQUESTED CIT(A) TO CALL THE SAME U/S 133(6). 30. WITH REGARD TO THE INVESTMENT ESTIMATED BY THE ASSESSING OFFICER ON THE SAID PLOT, WE FOUND THAT THE ASSESSE E GOT PERMISSION FOR CONSTRUCTING ONLY SHOP ON THE SAID P LOT, WHICH IS CLEAR FROM THE SEIZED MAP IN WHICH CONSTRUCTION OF FIRST FLOOR AND SECOND FLOOR WERE NOT PERMITTED AS INDICATED BY CROSSING/CUTTING THE MAP OF FIRST AND SECOND FLOOR. IT WAS ALSO SUBMISSION OF THE ASSESSEE THAT HE HAS CONSTRUCTED SHOP ON 270 SQ.FT. ON THE GROUND FLOOR IN THE ASSESSMENT YE AR 2006-07 AND THE COST OF CONSTRUCTION WAS RS. 100/- TO RS. 1 50/- SQ.FT. IN FINANCIAL YEAR 2005-06 AS AGAINST RS. 700/- PER SQ. FT. -: 19: - 19 ESTIMATED BY THE ASSESSING OFFICER. IT WAS ALSO EXP LAINED THAT THE SAID SHOP WAS SHOWN IN THE BALANCE SHEET AT RS. 1,72,000/-. AN AFFIDAVIT OF THE ASSESSEE WAS ALSO F ILED TO AFFIRM THESE FACTS ON OATH. 31. AS PER THE DISCUSSION MADE HEREINABOVE, THE ADD ITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE THE CIT(A) IN THE FORM OF COPY OF PURCHASE DEED GOES TO THE ROOT OF THE ISSUE . WE FOUND THAT THE ASSESSING OFFICER HAS MADE ADDITION WITHOU T TECHNICALLY VALUING THE PRICE NOR THE MATTER WAS RE FERRED TO THE DVO. IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE R ESTORE THE ADDITION IN ALL THE FOUR YEARS TO THE FILE OF THE A SSESSING OFFICER FOR DECIDING AFRESH AFTER CONSIDERING THE ADDITIONA L EVIDENCE FILED BY THE ASSESSEE BEFORE THE CIT(A) UNDER RULE 46A. WE DIRECT ACCORDINGLY. 32. IN THE ASSESSMENT YEAR 2008-09, THE ASSESSEE IS AGGRIEVED FOR ADDITION OF UNEXPLAINED INVESTMENT IN HOUSE PROPERTY AMOUNTING TO RS. 17,42,400/-. THE FACTS OF THE ISSUE IN BRIEF ARE THAT DURING THE COURSE OF SEARCH A COP Y OF AN AGREEMENT OF TRANSFER FOR PURCHASE OF LAND AT VILLA GE BEHTA, TEHSIL HUZUR WAS FOUND. IN THIS AGREEMENT DATED 25. 10.2007, -: 20: - 20 THE PROPERTY SOLD BY MAMUNA KHAN & BAHADUR KHAN TO THE ASSESSEE AND HIS WIFE SMT. NISHAT ANSARI ALONGWITH EIGHT OTHER PERSONS. THE TOTAL CONSIDERATION AS PER THIS AGREEM ENT IS RS. 87,12,000/-. THE ASSESSING OFFICER HELD THAT THE IN VESTMENT MADE BY THE ASSESSEE AND HIS WIFE HAS NOT EXPLAINED AND SINCE HIS WIFE DOES NOT HAVE ANY SOURCE OF INCOME, HE MAD E ADDITION FOR INVESTMENT MADE BY THE ASSESSEE IN HIS NAME AND HIS WIFES NAME. 33. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- THE APPELLANT HAD BOUGHT THE LAND ALONGWITH EIGHT OTHER PERSONS WITH THE PURPOSE TO SELL IT TO SOME OTHER PARTIES ON A LATER DATE. THE AGREEMENT SHOWS PAYMENT IN CASH OF RS. 30,12,000/- OUT OF TOTAL CONSIDERATION OF RS. 87,12,000/-. THE BALANCE AMOUNT CHEQUES WERE ISSUED IN FAVOUR OF THE SELLERS. THE SELLERS SIGNED THE DOCUMENT. IT IS AN ADMITTED FACT THAT THE APPELLANT AND OTHERS WANTED TO SELL THIS PROPERTY TO THIRD PA RTY. THE PURCHASERS DID NOT GET THE DOCUMENT REGISTERED -: 21: - 21 WITH THE PURPOSE TO SAFE STAMP DUTY AND REGISTRATIO N CHARGES SINCE IT WAS ALREADY DECIDED TO SELL THIS PROPERTY TO THIRD PARTY. THE FACT THAT PURCHASERS D ID NOT PRESENT CHEQUES FOR CLEARANCE LEAD TO A LOGICAL CONCLUSION THAT THEY WERE PAID IN CASH FOR THE CHEQ UE AMOUNT ALSO. IT IS CLEAR THAT THE LAND IN QUESTION HAS BEEN PURCHASED FOR TOTAL CONSIDERATION OF RS. 87,12,000/- PAID IN CASH. SINCE THE APPELLANT HAS 2 0 % OF INVESTMENT IN HIS OWN NAME AND HIS WIFES NAME, THE AMOUNT OF UNACCOUNTED INVESTMENT IS DETERMINED AT RS. 17,42,400/-,SINCE THE SOURCE OF ANY PART OF PAYMENT IS NOT EXPLAINED. THE ADDITION OF RS. 17,42,400/- IS CONFIRMED. 34. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FO UND FROM RECORD THAT AS PER THE AGREEMENT FOUND DURING THE COURSE OF SEARCH, THE ASSESSEE HAS PURCHASED THE LAND ALON GWITH EIGHT OTHER PERSONS. THE AGREEMENT SO FOUND CLEARLY INDICATED PAYMENT IN CASH OF RS. 30,12,000/- OUT OF TOTAL CON SIDERATION OF RS. 87,12,000/-, THE ONLY CONTENTION OF ASSESSEE WAS THAT THE CHEQUES ISSUED FOR THE BALANCE PAYMENT WERE NOT -: 22: - 22 ENCASHED BY THE SELLER, THEREFORE, THIS TRANSACTION WAS NOT MATERIALIZED, HAS NO LEGS TO STAND. A CLEAR FINDING HAS BEEN RECORDED BY THE LOWER AUTHORITIES TO THE EFFECT THA T A LOGICAL CONCLUSION FOR NOT ENCASHING THE CHEQUE IS THAT CAS H PAYMENT HAS BEEN MADE BY THE ASSESSEE. AS THE ASSESSEE HAS 20 % OF INVESTMENT IN HIS OWN NAME AND IN HIS WIFES NAME, THE LOWER AUTHORITIES WERE JUSTIFIED IN MAKING ADDITION OF RS . 17,42,400/- AS THE SOURCE OF FUND COULD NOT BE EXPL AINED BY ASSESSEE EITHER BEFORE ASSESSING OFFICER OR BEFORE CIT(A). 35. WITH REGARD TO THE ADDITIONAL EVIDENCE FILED BEFORE THE CIT(A), WE HAVE GONE THROUGH THE SAME AND FOUND THA T THESE EVIDENCES ARE NOT GOING TO HELP IN ANY WAY TO THE A SSESSEE IN SO FAR AS THE NON-ENCASHMENT OF CHEQUE, AS CERTIFIE D BY THE BANK DID NOT DISLODGE THE FINDING THAT AGREEMENT WA S FOUND AT THE RESIDENCE OF THE ASSESSEE DURING COURSE OF SEAR CH, WHICH CLEARLY INDICATE THAT CASH PAYMENT OF RS. 30,12,000 /-. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY FOR THE A DDITION OF RS. 17,42,400/- MADE BY THE ASSESSING OFFICER. ACCORDIN GLY, THE GROUND TAKEN BY ASSESSEE FOR RESTORATION OF MATTER IS DISMISSED. -: 23: - 23 36. IN THE ASSESSMENT YEAR 2008-09, THE ASSESSEE IS ALSO AGGRIEVED FOR INVESTMENT IN CASH CERTIFICATE. THE F ACTS OF THE ISSUE IN BRIEF ARE THAT DURING THE COURSE OF SEARCH CASH CERTIFICATE ISSUED BY NAGARIK SAHAKARI BANK WERE FO UND. THE ASSESSING OFFICER HELD THAT THE SOURCE OF INVESTMEN T IN THESE CASH CERTIFICATES WAS UNEXPLAINED AND MADE ADDITION OF RS. 2,24,094/- ON THIS ACCOUNT. THE ASSESSING OFFICERS FINDING ON THE ISSUE IS AS UNDER :- DURING THE COURSE OF SEARCH AND SEIZURE OPERATION HELD AT THE PREMISE OF THE ASSESSEE, A BUNCH OF LOOSE PAPERS CONTAINING 1 TO 9 PAGES WHICH ARE CASH CERTIFICATES ISSUED BY BHOPAL NAGARIK SAHAKARI BANK LIMITED, BHOPAL, IN THE NAME OF VARIOUS HOLDERS OF CASH CERTIFICATE WERE FOUND AND INVENTORISED AS LPS 2. 37. THE ASSESSING OFFICER ALSO OBSERVED THAT THE E NTIRE AMOUNT WAS FOUND TO BE INVESTED BY SHRI ASEEM ANSAR I, AS THE OTHER MEMBERS IN WHOSE NAME THE CASH CERTIFICATES W ERE ISSUED DID NOT HAVE ANY INCOME EARNING ACTIVITY OF THEIR OWN -: 24: - 24 SMT. NISHAT ANSARI IS THE WIFE OF MR. ASEEM ANSARI, A HOUSEWIFE AND HAS NO INCOME EARNING ACTIVITY OF HER OWN. DURING THE COURSE OF SEARCH, SHRI NASEEM ANSARI COU LD NOT EXPLAIN THE SOURCE OF RS. 2,24,094/- INVESTED IN CA SH CERTIFICATES BY VARIOUS INDIVIDUALS. HE MENTIONED I N HIS STATEMENT RECORDED ON OATH DURING SEARCH THAT MR. A SEEM ANSARI WOULD BE ABLE TO EXPLAIN THE SOURCE OF INVES TMENT IN THE ABOVE MENTIONED CASH CERTIFICATES. 38. BEFORE THE CIT(A), THE ASSESSEE FILED APPLICATI ON UNDER RULE 46A IN THE FORM OF CERTIFICATE OF BANK IN ORIG INAL. IT WAS SUBMITTED THAT ALL INVESTMENT INTO THESE CASH CERTI FICATES HAVE BEEN MADE PRIOR TO 1.4.2002, WHICH IS EARLIER TO TH E BLOCK PERIOD. IT WAS ALSO SUBMITTED THAT ACCRUED INTEREST ON FDRS OF ASSESSEE AND HIS BOTH SONS ABUDLLA AHMAD AND ADNAN AHMAD HAVE BEEN DULY SHOWN IN THE RETURN AND THE SAME HAV E BEEN EXPLAINED BEFORE THE ASSESSING OFFICER. 39. BY THE IMPUGNED ORDER, THE CIT(A) CONFIRMED THE ADDITION WITHOUT ADMITTING ADDITIONAL EVIDENCE FILED BEFORE HIM UNDER RULE 46A. -: 25: - 25 40. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FO UND FROM RECORD THAT SOME OF THE FDS FOUND WERE BELONGI NG TO THE CLOSE RELATIVES OF THE ASSESSEE. THE ADDITIONAL EVI DENCE FILED BEFORE THE CIT(A) IN THE FORM OF CERTIFICATE OF BAN K IN ORIGINAL GOES TO THE ROOT OF THE ISSUE. ONLY AFTER VERIFYING THE CONTENTS OF BANK CERTIFICATE, IT MAY BE ASCERTAINED AS TO TH E PERIOD IN WHICH INVESTMENT HAS BEEN MADE IN THESE CASH CERTIF ICATES (FDRS) TO FIND OUT AS TO WHETHER INVESTMENT WAS MAD E PRIOR TO 1.4.2002, WHICH FALLS BEYOND THE BLOCK PERIOD. IN T HE INTEREST OF JUSTICE, WE RESTORE THIS GROUND BACK TO THE FILE OF ASSESSING OFFICER FOR DECIDING AFRESH AFTER CONSIDERING THE A DDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE THE CIT(A). W E DIRECT ACCORDINGLY. 41. IN THE ASSESSMENT YEAR 2008-09, THE ADDITION WA S ALSO MADE IN RESPECT OF UNEXPLAINED SERVICE CHARGES AMOU NTING TO RS. 2,45,000/- . THE FACTS OF THE ISSUE IN BRIEF AR E THAT DURING THE COURSE OF SEARCH CASH RECEIPTS ISSUED BY M/S. B HASKAR MULTINET LIMITED WERE FOUND SHOWING PAYMENTS OF RS. 2,45,000/- RECEIVED FROM M/S. NSG COMMUNICATIONS. T HE ASSESSING OFFICER HELD THAT THE ASSESSEE WAS RUNNIN G THE -: 26: - 26 BUSINESS OF DISTRIBUTION OF CABLE NETWORK FOR LALGH ATI, BHOPAL, UNDER THE PROPRIETARY CONCERN M/S. NSG COMMUNICATIO NS. HE GAVE A FINDING THAT THE PAYMENT OF RS. 21,45,000/- WAS RECEIVED BY M/S. NSG COMMUNICATIONS AND MADE ADDITI ON OF THE SAME AMOUNT HOLDING THAT THE RECEIPT WAS NOT SH OWN IN THE BOOKS. 42. BY THE IMPUGNED ORDER, THE CIT(A) RESTORED THE MATTER BACK TO THE FILE OF ASSESSING OFFICER TO EXA MINE THE ISSUE RELATING TO NSG COMMUNICATIONS COVERING THE S OURCE OF PAYMENT OF RS. 3,50,000/- AS PER AGREEMENT DATED 31 .3.2008, THE SOURCE OF PAYMENT MADE TO BHASKAR MULTINET LIMI TED AND PROFIT EARNED BY NSC COMMUNICATIONS. PRECISE OBSERV ATION OF THE CIT(A) IN THIS REGARD WAS AS UNDER :- BEFORE ME IT IS STATED THAT THE PAYMENT IS NOT RECEIVED BY THE ASSESSEE BUT IT IS MADE BY M/S. NSG COMMUNICATIONS TO M/S. BHASKAR MULTINET LIMITED. IT IS ALSO PLEADED THAT M/S. NSG COMMUNICATION WAS A PARTNERSHIP CONCERN OF THE ASSESSEES WIFE AND TWO OTHER PERSONS AND THAT SHE HAS PURCHASED THIS CONCERN BY PAYING RS. 3,50,000/- TO THE OTHER TWO PARTNERS. IN SUPPORT OF THIS CLAIM THE ASSESSEE HAD SUBMITTED COPY OF AN AGREEMENT DATED 31.3.2008. -: 27: - 27 THESE DOCUMENTS WERE NOT PRESENTED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS HELD THAT PAYMENT WAS RECEIVED BY M/S. NSG COMMUNICATIONS WHILE THE RECEIPT SHOWS THAT PAYMENT IS DONE BY NSG COMMUNICATIONS. IT IS IMPORTANT TO NOTE THAT THE ASSESSEES WIFE DOES NOT HAVE ANY SOURCE OF INCOME. THE CLAIM OF INVESTMENT OF RS. 3,50,000/- IN CASH FOR PURCHASE OF NSG COMMUNICATIONS IS NOT EXAMINED BY THE ASSESSING OFFICER SINCE THIS WAS NOT CLAIM BEFORE HIM. THESE FACTS WARRANT AN ENQUIRY ON THE ISSUE BUT IN VIEW O F THE LIMITATION PROVIDED BY THE HON'BLE M.P. HIGH CO URT FOR PASSING THIS ORDER, IT IS NOT FEASIBLE TO BE DO NE BY ME. THE ASSESSING OFFICER IS DIRECTED TO EXAMINE TH E ISSUE RELATING TO NSG COMMUNICATIONS COVERING THE SOURCE OF PAYMENT OF RS. 3,50,000/- AS PER AGREEMENT DATED 31.3.2008, THE SOURCE OF PAYMENTS MADE TO BHASKAR MULTINET LIMITED AND THE PROFIT EARNED BY NSG COMMUNICATIONS COVERING THE SOURCE OF PAYMENT OF RS. 3,50,000/- AS PER AGREEMENT DATED 31.3.2008, THE SOURCE OF PAYMENTS MADE TO BHASKAR MULTINET LIMITED AND THE PROFIT EARNED BY NSG COMMUNICATIONS AND MAKE NECESSARY ADDITION AFTER ENQUIRY. 43. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FO UND FROM RECORD THAT DURING COURSE OF SEARCH, CASH RECE IPT OF RS. -: 28: - 28 2,45,000/- WAS FOUND, WHICH WAS ISSUED BY BHASKAR M ULTINET LIMITED. AFTER EXAMINING THE ISSUE IN DETAIL, AS PE R PARA 6.2 OF HIS APPELLATE ORDER AS REPRODUCED HEREINABOVE, WE D O NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DIRECTING THE ASSESSING OFFICER TO EXAMINE THE ISSUE. ACCORDINGLY, THE GROU ND TAKEN BY ASSESSEE IS DISMISSED. 44. A GROUND HAS BEEN TAKEN REGARDING CHARGING OF I NTEREST U/S 234B IN CASE OF ALL THE ASSESSEES I.E. M. G. CH ERIAN, MRS. LEENA CHEIRAN AND ASEEM ANSARI IN ALL THE YEARS UND ER CONSIDERATION. 45. PLEA OF LD. AUTHORIZED REPRESENTATIVE WAS THAT IN VIEW OF THE DECISION OF I.T.A.T. MUMBAI BENCH IN THE CASE O F DATAMATICS LIMITED VS. ACIT, (2008) 299 ITR 286 (A. T.) (MUM. I.T.A.T.), WHERE THERE WAS NO DEFAULT ON THE PART O F THE ASSESSEE IN PAYMENT OF ADVANCE TAX, NO INTEREST WAS LIABLE U/S 234B IN REGULAR ASSESSMENT. FOLLOWING WAS THE PRECI SE OBSERVATION OF THE BENCH :- THE CHARGING OF INTEREST U/S 234B IS MANDATORY. MANDATORY DOES NOT MEAN THAT IT IS MANDATORY UNDER ALL CIRCUMSTANCES. IT IS MANDATORY WHEN THE CONDITIONS ARE FULFILLED. THE CONDITION IS THAT THE ASSESSEE SHOULD HAVE DEFAULTED. A READING OF SECTIO N -: 29: - 29 234B(3) MAKES IT CLEAR THAT WHERE, AS A RESULT OF A N ORDER OF ORDER OF REASSESSMENT OR RE-COMPUTATION U/ S 147 OR SECTION 153A, THE AMOUNT ON WHICH INTEREST WAS PAYABLE UNDER SUB SECTION (1) IS INCREASED, THE ASSESSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF ONE PERCENT. THE SECTION FURTHER MAKES IT C LEAR THAT FIRST OF ALL THERE SHOULD BE A DEFAULT ON THE PART OF THE ASSESSEE IN THE REGULAR ASSESSMENT AND THE ASSESSEE SHOULD HAVE BEEN HELD LIABLE TO PAY INTERE ST U/S 234B.IN THAT CASE, IF THERE WAS REASSESSMENT OR RE-COMPUTATION U/S 147 OR 153A, THE LIABILITY OF TH E ASSESSEE IS INCREASED AND NOT OTHERWISE. IN THE INSTANT CASE, THERE WAS NO DEFAULT ON THE PART OF T HE ASSESSEE, IN PAYING THE ADVANCE TAX. FOR THE FIRST TIME, THE DISPUTE AROSE CONSEQUENT TO THE REASSESSMENT DONE U/S 143(3) READ WITH SECTION 147, INTEREST COULD NOT BE CHARGED U/S 234B. 45. IT WAS FURTHER ARGUED THAT IN VIEW OF THE DECIS ION OF KERALA HIGH COURT IN THE CASE OF B.LAKSHMIKANTHAN , (2011) 198 TAXMAN 485, INTEREST SHOULD BE CHARGED ON INCRE MENTAL INCOME ONLY I.E., ADDITIONAL INCOME ASSESSED U/S 15 3A AS COMPARED TO THE INCOME DETERMINED U/S 143(1)/143(3) . 46. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. IN VI EW OF DECISION OF KERALA HIGH COURT IN THE CASE OF LAKSHM IKANTHAN (SUPRA), WE DIRECT THE ASSESSING OFFICER TO RECOMPU TE THE INTEREST U/S 234B WHICH PROVIDES THAT WHERE ORIGINA L ASSESSMENT COMPLETED U/S 143 IS REVISED EITHER U/S 147 OR U/S 153A, THEN INTEREST FOR NON-PAYMENT OR SHORT PA YMENT OF -: 30: - 30 ADVANCE TAX IS PAYABLE ONLY FOR THE PERIOD MENTIONE D IN SECTION 234B(3) WHICH PROVIDES FOR INTEREST FROM TH E DATE OF COMPLETION OF REGULAR ASSESSMENT U/S 143(1) TILL TH E DATE OF COMPLETION OF REASSESSMENT. THE ASSESSING OFFICER I S DIRECTED ACCORDINGLY. 47. IN THE RESULT, APPEALS ARE ALLOWED IN PART IN T ERMS INDICATED HEREINABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 21 ST MARCH, 2013. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21 ST MARCH, 2013. CPU* 15203