Rakesh Sarin and Sons (HUF), CHENNAI V. DCIT, CHENNAI

ITSSA 19/CHNY/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8638 (ITAT-CHENNAI)
• Duration Of Justice: 4 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 03-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 24-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K RAVI
• Assessee Lawyers: DR M SRINIVASA RAO
• Keywords: Unexplained investment; Income from undisclosed sources; Peak credit; Source of fund; Block assessment
• Section: 143(3)

Judgement Text

, , IN THE INCOM E TAX APPELLATE TRIBUNAL , D BENCH, CHENNAI . , . , BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T. (SS) A.NO . 1 9 /CHNY/20 14 BLOCK PERIOD : 01.04.199 6 TO 27.03.2003 M/S. RAKESH SARIN & SONS HUF NO.15/4, MASILAMANI ROAD, BALAJI NAGAR, ROYAPETTAH, CHENNAI 600 014. VS THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II(1), CHENNAI - 34. PAN: A AAH R3518N ( / APPELLANT) ( / RESPONDENT ) / APPELLANT BY : DR. M. SRINIVASA RAO, CIT / RESPONDENT BY : SHRI K.RAVI, ADVOCATE / DATE OF HEARING : 29.01 . 201 9 / DATE OF PRONOUNCEMENT : 03 . 0 4 .2019 / O R D E R PER A. MOHAN ALANKAMONY, AM : - THIS A PPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A) (C) - II, C HENNAI , DATED 30.09 . 2014 IN ITA NO. 45 2 / 06 - 07 FOR THE BLOCK PERIOD 01.04.1996 TO 27.03.2003 PASSED U/S.250(6) R.W.S. 143(3) R.W.S. 158BC & 158B D OF THE ACT. 2 IT(SS)A NO.19/CHNY/2014 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS APPEAL HOWEVER THE CRUXES OF THE ISSUES ARE THAT : - I . THE LD.CIT(A) HAS ERRED IN UPHOLDING THE ORDER OF THE LD.AO TH AT THE ASSESSEE HAD NOT FILED IT S RETURN OF INCOME FOR THE ASSESSMENT YEARS FALLING WITHIN THE BLOCK P ERIOD BEFORE THE DATE OF SEARCH AND THEREBY MADE ADDITION OF RS.14,28,240/ - . II . THE LD.CIT(A) HAS ERRED IN SUSTAINING THE ADDITION MADE BY THE LD.AO AMOUNTING TO RS. 10 , 0 0,000/ - BEING THE MONEY ADVANCED TO M/S. VICKY FILMS AND RS.4,50,000/ - BEING THE MONEY ADVANCED TO M/S. NADIADWALA GRANDSON ENTERTAINMENT AS UNEXPLAINED INVESTMENT . III . THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.4,500/ - TOWARDS INVESTMENT IN SHARES, RS.5,00,000/ - TOWARDS INVESTMENT MADE IN RBI BONDS, RS.25,000/ - WITH RESPECT TO INVESTMENT MADE IN VARIOUS UTI/IDBI AND HDFC RELIEF BONDS, RS.2 0 ,000/ - BEING THE INVESTMENT MADE IN KISAN VIKAS PATRAS, RS. 3,50 ,000 / - AND RS.41,50,000/ - TOWARDS INVESTMENT IN RBI RELIEF BO NDS WHICH WAS ASSIGNED 3 IT(SS)A NO.19/CHNY/2014 TO STANDARD CHARTERED BANK AS THE UNDISCLOSED INVESTMENTS / INCOME OF THE ASSESSEE. IV . THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE LD.AO AMOUNTING TO RS.13,41,800/ - AS UNACCOUNTED INVESTMENT BEING THE CASH DEPOSITS IN THE BANK ACCOUNT AND RS.14,106/ - TOWARDS DEPOSIT IN R D ACCOUNT . V . THE LD.CIT(A) HAS ERRED IN SUSTAINING THE ADDITION MADE BY THE LD.AO AMOUNTING TO RS.4,72,112/ - TOWARDS NEGATIVE CASH BALANCE. VI . THE LD.CIT(A) HAS ERRED IN SUSTAINING THE ADDITION MADE BY THE LD.AO AMOUNTING TO RS. 25 , 50 ,000/ - AS THE UNDISCLOSED INVESTMENT OF THE ASSESSEE BEING THE UNACCOUNTED PRO - NOTES FOUND DURING THE COURSE OF SEARCH. VII . THE LD.CIT(A) HAS ERRED IN SUSTAINING THE ADDITION MADE BY THE LD.AO AMOUNTING TO RS.5,84,529/ - TOWARDS PUR CHASE OF FIXTUR ES AND AMENITIES AS UNEXPLAINED INVESTMENT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A HUF WHOSE KART A SHRI RAKESH SARIN WAS SEARCHED ON 27.03.2003 AND CONCLUDED ON 28.08.2003. THEREAFTER A NOTICE U/S.158BC R.W.S. 4 IT(SS)A NO.19/CHNY/2014 158BD WAS SERVED TO THE ASSESSEE ON 23.02 .2005 REQUESTING THE ASSESSEE TO FILE ITS RETURN OF INCOME. SUBSEQUENTLY THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE BLOCK ASSESSMENT PERIOD ON 18 .03.2005. THEREAFTER ASSESSMENT WAS COMPLETED U/S.143(3) R.W.S. 1 58BC & 158BD OF THE ACT VIDE ORDER DATED 28.02.2007 WHEREIN THE LD.AO MADE SEVERAL ADDITIONS WHICH WAS FURTHER SUSTAINED BY THE LD.CIT(A). 4. GROUND NO.2(I) : NON FILING OF INCOME TAX RETURNS : - DURING THE COURSE OF INVESTIGATION, IT WAS OBSERVED THAT THE ASSESSEE HAD MADE SUBSTANTIAL INVESTMENTS IN RECURRING DEPOSIT, RBI RELIEF BONDS, SHARES, KVP, HDFC RELIEF BONDS ETC., AND ALSO HAD ADVANCED HUGE LOANS TO VARIOUS PARTIES . IT WAS EXPLAINED BY THE ASSESSEE THAT THEY HAD DISCLOSED THE SAME IN ITS RETURN OF INCOME FOR ALL THE ASSESSMENT YEARS AND ALSO PRODUCED THE ACKNOWLEDGEMENTS FOR HAVING FILED THE RETURN OF INCOME. HOWEVER ON VERIFYING THE ACKNOWLEDGEMENTS SUBMITTED BY THE ASSESSEE, IT WAS OBSERVED THAT THE ACKNOWLEDGEMENT NUMBER DID NOT PERTAIN TO THE ASSESSEE BUT TO DIFFERENT PERSONS. THEREFORE THE LD.AO OPINED THAT THE RETURNS FILED BY THE ASSESSEE ARE BOGUS TOWARDS WHICH THE 5 IT(SS)A NO.19/CHNY/2014 ASSESSEE STRONGLY OBJECTED. ON APPEAL THE LD.CIT(A) HELD THE ISSUE IN FAVOUR OF THE REVENUE BY RELYING ON VARIOUS DECISIONS OF THE HIGHER JUDICIARIES. 4.1 BEFORE US THE LD.AR REITERATED THE SUBMISSIONS MADE BEFORE THE LD.REVENUE AUTHORITIES THAT THE LAPSE ON THE PART OF THE REVENUE TO MAINTAIN PROPER RECORDS CANNOT DETERMINE THE RETURNS FILED BY THE ASSESSEE TO BE BOGUS. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDERS OF THE LD.REVENUE AUTHORITIES. 4.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. THE LD.REVENUE AUTHORITIES HAD REJECTED THE ACKNOWLEDGEMENTS OF THE RETURNS FILED BY THE ASSESS EE BECAUSE IT DID NOT MATCH WITH THE RECORDS MAINTAINED BY THE LD.REVENUE AUTHORITIES. HOWEVER THE LD.REVENUE AUTHORITIES HAVE NOT CONDUCTED ANY INVESTIGATION ON THAT REGARD. THE LD.REVENUE AUTHORITIES ALSO OUGHT TO HAVE EXAMINED THE COPY OF THE RETURNS FI LED BY THE ASSESSEE THAT WAS PRODUCED BEFORE THEM AND THEREAFTER ARRIVED AT A PROPER CONCLUSION. FURTHER THE LD.REVENUE AUTHORITIES HAD NOT TAKEN ANY COERCIVE ACTION FOR THE ALLEGED FRAUD 6 IT(SS)A NO.19/CHNY/2014 COMMITTED BY THE ASSESSEE. IN THIS SITUATION WE CAN NEITHER HOLD THE MATTER IN FAVOUR OF THE REVENUE NOR THE ASSESSEE. IT IS PERTINENT TO MENTION THAT ON THE IDENTICAL FACTS IN THE CASE OF THE ASSESSEES RELATED PARTIES SMT. RENU SARIN IN IT(SS)A NO.17/CHNY/2014 VIDE ORDER DATED 20.03.2019 , SHRI RAKESH SARIN IN IT(SS)A NO. 66/CHNY/2007 VIDE ORDER DATED 11.03.2019 , SHRI AKSHAY SARIN IN IT(SS)A NO.18/CHNY/2014 VIDE ORDER DATED 28.03.2019 AND M/S. B.R. SARIN & SONS IN IT(SS)A NO.11/CHNY/2014 VIDE ORDER DATED 01.04.2019 ALSO WE HAD EXPRESSED SIMILAR VIEW. CONSIDERING THESE FACTS WE ARE OF THE VIEW THAT THE ADDITION MADE BY THE LD.AO FOR RS. 14,28,240 / - IN THE BLOCK ASSESSMENT IS DEVOID OF MERITS BECAUSE THERE IS NO CONCLUSIVE FINDING BY THE REVENUE T HAT THE ASSESSEE HAD NOT FILED I T S RETURN OF INCOME FOR THE ASSESSMENT YEARS 1997 - 98 TO 2003 - 04. HENCE WE HEREBY DIRECT THE LD.AO TO DELETE THE ADDITION MADE BY THE LD.AO FOR RS. 14,28,240 / - IN THE BLOCK ASSESSMENT. 5. GROUND NO.2(II) : ADDITION OF RS.10,00,000/ - TOWARDS MONEY ADVANCED TO M/S. VICKY FILMS AND RS.4,50,000/ - BEING THE 7 IT(SS)A NO.19/CHNY/2014 MO NEY ADVANCED TO M/S. NADIADWALA GRANDSON ENTERTAINMENT AS UNEXPLAINED INVESTMENT : - DURING THE COURSE OF INVESTIGATION, IT WAS REVEALED THAT SHRI RAKESH SARIN HAS BEEN UTILIZING SB A/C NO.3315 OPENED ON 11.03.2002 FOR TRANSACTING UNDISCLOS ED FUNDS. THE LD.AO FURTHER OBSERVED THAT AN AMOUNT OF RS.40 LAKHS WAS RECEIVED BY THE ASSESSEE IN THIS ACCOUNT WHICH THE ASSESSEE CLAIMS TO HAVE RECEIVED FROM SHRI N.KUMAR OF M/S. VICKY FILMS, MUMBAI. THE LD.AO ALSO OBSERVED THAT ON ENQUIRY IT WAS PROVED OTHERWISE. FURTHER ENQUIRY IN MUMBAI REVEALED THAT SHRI RAKESH SARIN HAD RECEIVED RS.50 LAKHS UNDER VARIOUS DENOMINATIONS BY WAY OF DEMAND DRAFT DRAWN ON BANK OF BARODA FAVORING VARIOUS PERSONS. ONE AMONG THEM IS M/S. RAKESH SARIN & SONS HUF. THE LD.AO FURTHER OBSERVED THAT THE AMOUNT OF RS.50 LAKHS RECEIVED BY M/S. RAKESH SARIN & SONS HUF, THROUGH M/S. ADLAB FILMS LTD., WAS IN CONNECTION WITH THE LOAN ADVANCED BY SHRI RAKESH SARIN FOR THE PRODUCTION OF FILM KRANTHI. THE LD.AO FURTHER MADE A FI NDING THAT THE TWO BANK DRAFT DATED 08.03.2002, DD NO.034404 & 05 DRAWN ON BANK OF BARODA FOR RS.9 LAKH S & RS.1 LAKH S RESPECTIVELY WAS NOT REFLECTED IN THE ACCOUNTS REGULARLY MAINTAINED IN THE 8 IT(SS)A NO.19/CHNY/2014 COMPUTER. THEREFORE THE L D .AO ADDED THE AMOUNT OF RS.10 LAKHS A S THE UNEXPLAINED INCOME OF THE ASSESSEE. ON APPEAL, THE L D.CIT(A) CONFIRMED THE ADDITION. 5.1 SIMILARLY IT WAS OBSERVED BY THE LD.AO THAT THE ASSESSEE HAD ADVANCED RS.4,50,000/ - TO M/S. NADIADWALA GRANDSONS THROUGH M/S. AKSHAY MERCANTILE LTD AND THE SAM E WAS NOT ACCOUNTED IN THE ACCOUNTS MAINTAINED IN THE COMPUTER OF THE ASSESSEE. THEREFORE THE LD.AO MADE ADDITION OF RS.4,50,000/ - AS UNEXPLAINED INVESTMENT. 5.2 WITH RESPECT TO THE ADDITION MADE TOWARDS THE ADVANCE OF RS.10,00,000/ - EXTENDED TO M/S. VICKY FILMS, WE FIND THAT THE FINDING OF THE LD.AO TO BE VOGUE WHICH IS FURTHER CONFIRMED BY THE LD.CIT(A) BY GENERAL DISCUSSION IN HIS ORDER AT PARA NO.6 TO 6.4. FUR THER FROM THE FACTS OF THE CASE IT IS APPARENT THAT THE REVENUE HAD SIMPLY REJECTED THE RETURNS FILED BY THE ASSESSEE AND ALSO NOT EXAMINED THE DETAILED EXPLANATION OFFERED BY THE ASSESSEE, NEEDLESS TO MENTION THAT THE BOOKS OF ACCOUNTS OF THE ASSESSEE WAS INCOMPLETE. IN THIS SITUATION, WE DO NOT FIND ANY MERIT IN THE 9 IT(SS)A NO.19/CHNY/2014 ORDER OF THE LD.REVENUE AUTHORITIES FOR MAKING ADDITION FOR RS.10,00,000/ - AND RS.4,50,000/ - TOWARDS ADVANCE EXTENDED TO M/S. VICKY FILMS AND M/S. NADIADWALA GRANDSON ENTERTAINMENT WITHOUT CON CLUSIVE FINDING . THEREFORE WE HEREBY DIRECT THE LD.AO TO DELETE THE ADDITION MADE FOR RS.10,00,000/ - AND RS.4,50,000/ - WITH REGARD TO THE ADVANCE S EXTENDED TO M/S. VICKY FILMS AND M/S. NADIADWALA GRANDSON ENTERTAINMENT RESPECTIVELY. 6 . GROUND NO.2( III ): ADDITION OF RS.4,500/ - TOWARDS INVESTMENT IN SHARES, RS.50,000/ - TOWARDS INVESTMENT IN RBI BONDS, RS.25,000/ - TOWARDS INVESTMENT IN VARIOUS UTI/IDBI AND HDFC RELIEF BONDS, RS.2 0 ,000/ - TOWARDS INVESTMENT IN KISAN VISAN PATRAS, RS.3,50,000/ - AND RS.41,50, 000/ - TOWARDS INVESTMENT IN RBI RELIEF BONDS AS UNDISCLOSED INVESTMENT / INCOME: - ON THE IDENTICAL ISSUE AND ON THE SAME FACTS, THIS BENCH OF THE TRIBUNAL HAD DELETED THE ADDITIONS IN THE CASE OF ASSESSEES RELATED PARTIES SMT. RENU SARIN IN IT(SS)A NO.17 /CHNY/2014 , SHRI RAKESH SARIN IN IT(SS)A NO.66/CHNY/2007 , SHRI AKSHAY SARIN IN IT(SS)A NO.18/CHNY/2014 AND M/S. B.R. SARIN & SONS HUF IN 10 IT(SS)A NO.19/CHNY/2014 IT(SS)A NO.11/CHNY/2014 . IN THE CASE OF SMT. RENU SARIN, THIS BENCH OF THE TRIBUNAL HAS OBSERVED AS UNDER: - DURING THE COURSE OF SEARCH IT WAS OBSERVED BY THE LD.AO THAT THE ASSESSEE HAD MADE INVESTMENTS IN VARIOUS BONDS, SHARES, PATRAS, INSURANCE POLICIES ETC., AMOUNTING TO RS.84,53,375/ - , RS.45,75,000/ - AND RS.4,27,500/ - . IT WAS EXPLAINED BY THE ASSESSEE THAT THE INVEST MENTS WERE FULLY ACCOUNTED AND DISCLOSED IN THE RETURN OF INCOME. HOWEVER SINCE THE LD.AO HAD REJECTED THE CLAIM OF THE ASSESSEE THAT SHE HAS FILED HER RETURN OF INCOME, THE LD.AO TREATED THE SAME AS THE UNACCOUNTED INCOME/INVESTMENT OF THE ASSESSEE AS THE SOURCE WAS NOT EXPLAINED. ON APPEAL THE LD.CIT(A) AGREEING WITH THE VIEW OF THE LD.AO CONFIRMED THE ADDITION. ON PERUSING THE FACTS OF THE CASE, WE DO NOT FIND ANY JUSTIFICATION IN THE ORDER OF THE LD.REVENUE AUTHORITIES. IT IS AN ADMITTED FACT THAT THE A SSESSEE HAD PRODUCED THE RETURN FILED BY HER BEFORE THE LD.AO, HOWEVER THE LD.AO HAD REJECTED THE SAME BECAUSE IN THE REVENUE RECORDS NO SUCH RETURN WAS FILED. FOR THE ABOVE STATED REASONS THE LD.AO ALSO DID NOT VENTURE INTO EXAMINE THE RETURN FILED BY THE ASSESSEE OR TO EXAMINE THE SOURCE OF INVESTMENT DISCLOSED IN THE RETURN OF INCOME. IT IS PERTINENT TO MENTION THAT IT WAS THE PRIMARY DUTY OF THE LD.AO TO EXAMINE THE DISCLOSURE MADE IN THE RETURN OF INCOME ALONG WITH THE AMOUNT OF TAX PAID BY THE ASSESSE E DURING THE RELEVANT ASSESSMENT YEARS AND ALSO TO EXAMINE THE SOURCE OF FUNDS FLOWING THROUGH THE BANK ACCOUNTS FOR MAKING THE INVESTMENTS AND THEREAFTER ARRIVED AT AN APPROPRIATE CONCLUSION. BUT IN THE CASE OF THE ASSESSEE IT APPEARS THAT NO SUCH EXERCIS E WAS CARRIED OUT. ON APPEAL THE LD.CIT(A) ALSO CONFIRMED THE ORDER OF THE LD.AO BY SIMPLY AGREEING WITH THE VIEW OF THE LD.AO. IN THE IDENTICAL SITUATION, IN THE CASE OF ASSESSEES HUSBAND SHRI RAKESH SARIN IN ITA NO.66/CHNY/2007 FOR THE BLOCK ASSESSMENT YEARS 199 - 97 TO 2002 - 03 AND PART OF 2003 - 04, THIS BENCH OF THE TRIBUNAL VIDE ORDER DATED 11.03.2019 HAD OBSERVED IN PARA NO.16.3 THAT, THE LD.AOS FINDINGS WITH RESPECT TO THE RETURN OF INCOME FILED BY THE ASSESSEE TO BE BOGUS AND FALSE, DO NOT CARRY MUCH WEIGHT, BECAUSE FROM THE MATERIALS ON RECORD, IT WAS EVIDENT THAT, NO LEGAL ACTION WERE INITIATED AGAINST THE ASSESSEE FOR HAVING PRODUCED SUCH BOGUS RETURN OF INCOME BEFORE THE LD.REVENUE AUTHORITIES, IS ALSO RELEVANT IN THE CASE OF THE ASSESSEE BECAUSE T HE FACTS ARE SIMILAR. FURTHER IN THE CASE OF THE ASSESSEES HUSBAND SHRI. RAKESH SARIN THE LD.CIT(A) HAD GRANTED RELIEF BY DELETING THE ADDITION ON THIS ISSUE. SINCE IN THE CASE OF THE ASSESSEE ALSO THE LD.REVENUE AUTHORITIES HAD FAILED TO EXAMINE THE EVID ENCE PRODUCED BY THE ASSESSEE, WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION MADE IS NOT SUSTAINABLE. MOREOVER AT THIS STAGE, IT WOULD BE IMPRACTICABLE TO REMIT THE MATTER BACK TO THE FILE OF LD.AO FOR DE - NOVA 11 IT(SS)A NO.19/CHNY/2014 CONSIDERATION AS THE MATTER RELATES TO THE B LOCK PERIOD 1997 - 98 TO 2002 - 03 WHEREIN THE FACTS HAD OCCURRED BEYOND 20 YEARS AGO. THEREFORE WE HEREBY DIRECT THE LD.AO TO DELETE THE ADDITION MADE FOR RS.84,53,375/ - , RS.45,75,000/ - AND RS.4,27,500/ - TOWARDS INVESTMENT IN SHARES, BONDS, PATRAS, ETC., RBI BONDS AND HDFC STANDARD LIFE INSURANCE. SINCE THE FACTS AND THE ISSUE BEING SAME, THE DECISION RENDERED IN THE CASE OF THE ASSESSEES RELATED PARTIES SHRI RAKESH SARIN AND SMT. RENU SARIN , SHRI AKSHAY SARIN & M/S. B.R. SARIN & SONS HUF HOLDS GOOD IN THE CASE OF THE ASSESSEE ALSO AND ACCORDINGLY WE HEREBY DIRECT THE LD.AO TO DELETE THE ADDITION OF RS.4,500/ - TOWARDS INVESTMENT IN SHARES, RS.50,000/ - TOWARDS INVESTMENT IN RBI BONDS, RS.25,000/ - TOWARDS INVESTMENT IN VARIOUS UTI/IDBI AND H DFC RELIEF BONDS, RS.2 0 ,000/ - TOWARDS INVESTMENT IN KISAN VISAN PATRAS, RS.3,50 ,000 / - AND RS.41,50,000/ - TOWARDS INVESTMENT IN RBI RELIEF BONDS WHICH WAS ASSIGNED TO STANDARD CHARTERED BANK AS THE UNDISCLOSED INVESTMENTS / INCOME OF THE ASSESSEE 7. GR OUND NO.2(IV) : ADDITION OF RS. 1 3, 41,800/ - TOWARDS CASH DEPOSIT IN BANK ACCOUNT AS UNACCOUNTED INVESTMENT AND RS.14,106/ - TOWARDS DEPOSIT IN R D ACCOUNT: - 12 IT(SS)A NO.19/CHNY/2014 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE LD.AO THAT THE ASSESSEE HAD DEPOSITED CASH IN ITS BANK ACCOUNT FOR RS. 13,41,800 / - AND RS. 14,106 / - IN RECURRING DEPOSIT ACCOUNT DURING THE BLOCK PERIOD. THE LD.AO ADDED THE SAME TO THE UNDISCLOSED INCOME OF THE ASSESSEE BECAUSE THE TRANSACTIONS WERE NOT ACCOUNTED IN THE ASSESSEES BOOKS OF ACCO UNTS. THE LD.AO FURTHER OBSERVED THAT THE ASSESSEE HAD NOT FILED ANY RETURN OF INCOME BEFORE THE DATE OF SEARCH. ON APPEAL THE LD.CIT(A) CONFIRMED THE ORDER OF THE LD.AO BY AGREEING WITH HIS VIEW. IN SIMILAR SITUATION HEREIN ABOVE, WE HAVE DELETED THE ADDITION MADE BY THE LD.AO BECAUSE THE LD.AO HAD FAILED TO EXAMINE THE RETURN FILED BY THE ASSESSEE AND THE EXPLANAT ION SUBMITTED. THEREFORE THE SAME DECISION HOLDS GOOD FOR THIS ISSUE ALSO. ACCORDINGLY AS WE HAVE HELD IN THE CASE OF THE ASSESSEES RELATED PARTIES SMT. RENU SARIN IN IT(SS)A NO.17/CHNY/2014 , SHRI RAKESH SARIN IN IT(SS)A NO.66/CHNY/2007 , SHRI AKSHAY SARIN IN IT(SS)A NO.18/CHNY/2014 AND M/S. B.R. SARIN & SONS HUF IN IT(SS)A NO.11/CHNY/2014 WE HEREBY DIRECT THE LD.AO TO DELETE THE ADDITION MADE FOR RS. 13,41,800 / - TOWARDS UNEXPLAINED CASH DEPOSIT IN BANK ACCOUNT & RS. 14,106 / - TOWARDS RECURRING DEPOSIT. 13 IT(SS)A NO.19/CHNY/2014 8 . GR OUND NO.2(V ) : ADDITION OF RS.4,72,112/ - TOWARDS NEGATIVE CASH BALANCE: - FROM THE FACTS OF THE CASE, IT IS APPARENT THAT THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE IN ITS COMPUTER WERE INCOMPLETE; HOWEVER THE ASSESSEE HAD FURNISHED CERTAIN EXPLANATIONS ALONG WITH THE COPIES OF THE RETURN OF INCOME FILED BY IT . IT IS ALSO APPARENT THAT THE LD.A.O HAD REJECTED THE RETURNS FILED BY THE ASSESSEE AND FAILED TO EXAMINE THE PARTICULARS FILED ALONG WITH THE RETURN OF INCOME. IN THIS CIRCUMSTANCE W E DO NOT FIND MERIT IN THE ADDITION MADE BY THE LD.AO TOWARDS NEGATIVE CASH BALANCE OF RS.4,72,112/ - BECAUSE THE ADDITION IS MADE WITHOUT PROPER INVESTIGATION AND CONCLUSIVE FINDING . THEREFORE WE HEREBY DIRECT THE LD.AO TO DELETE THE ADDITION MADE ON ACCOUNT OF NEGATIVE CASH BALANCE AMOUNTING TO RS.4,72,112/ - . 9 . GROUND NO.2(VI ) : ADDITION OF RS.25,50,000/ - TOWARDS UNACCOUNTED PRO - NOTES: - DURING THE COURSE OF SEARCH CERTAIN PRO - NOTES WERE FOUND IN THE ASSESSEES PREMISES AND SINCE NO EXPLANATION COULD BE OBT AINED FROM THE KARTA OF THE HUF SHRI RAKESH SARIN WHO WAS UNAVAILABLE 14 IT(SS)A NO.19/CHNY/2014 AT THAT TIME AND THE MANAGER WHO WAS PRESENT, THE LD.AO ADDED THE AGGREGATE OF THE SAME AS THE UNDISCLOS ED INVESTMENT OF THE ASSESSEE BECAUSE THEY WERE NOT ACCOUNTED IN THE BOOKS OF ACCOUNTS. ON THE IDENTICAL ISSUE AND FACTS, THIS BENCH OF THE TRIBUNAL IN THE CASE OF THE ASSESSEES RELATED PARTIES SMT. RENU SARIN IN IT(SS)A NO.17/CHNY/2014 , SHRI RAKESH SARIN IN IT(SS)A NO.66/CHNY/2007 , SHRI AK SHAY SARIN IN IT(SS)A NO.18/CHNY/2014 AND M/S. B.R. SARIN & SONS HUF IN IT(SS)A NO.11/CHNY/2014 HELD THE ISSUE IN FAVOUR OF THE ASSESSEE. IN THE CASE OF THE SHRI RAKESH SARIN THIS BENCH OF THE TRIBUNAL HAD OBSERVED AS UNDER: - 7.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. FROM THE FACTS OF THE CASE, IT IS APPARENT THAT THE PRO - NOTES WERE INCOMPLETE IN ALL ASPECTS AND THEREFORE PRESUMPTION CANNOT BE MADE THAT THE ASSESSEE HAD LEND MONEY THOUGH THERE IS SOME AIR OF DOUBT. MOREOVER PEAK CREDIT CONCEPT MAY ALSO BE APPLICABLE IN THE CASE OF THE ASSESSEE DUE TO ROTATION OF ADVANCES AND REPAYMENTS. IT APPEARS THAT THE LD.AO HAS NOT EXAMINED THOSE ASPECTS. THERE IS EVERY PROBABILITY THAT IF SUCH EXER CISE WOULD HAVE BEEN CARRIED OUT THE SOURCE OF THE AMOUNT UTILIZED IN THE FINANCE BUSINESS WOULD HAVE BEEN EXPLAINABLE AS THE AMOUNT UTILIZED IN THE BUSINESS WOULD HAVE BEEN MUCH LESS THAN THE ADDITION MADE BY THE LD.AO. THEREFORE ADHOC ADDITION OF THE AMO UNT MENTIONED IN THE ENTIRE PRO - NOTES IS NOT JUSTIFIABLE. FURTHER THE LD.AO HAS ALSO NOT MADE ANY INVESTIGATION IN THE MARKET TO FIND OUT WHETHER ANY AMOUNT BORROWED FROM THE ASSESSEE WAS PENDING TO BE RETURNED TO THE ASSESSEE. FURTHER THE LD.AO HAD ALSO NOT MADE PROPER INVESTIGATION FROM THE BORROWERS. WHEN THE LD.AO HAS NOT MADE ANY INVESTIGATION ON 15 IT(SS)A NO.19/CHNY/2014 THIS REGARD ADDITION MADE ONLY ON THE BASIS OF PRESUMPTION IS NOT JUSTIFIABLE. MOREOVER THERE IS NO CORROBORATIVE EVIDENCE TO SUPPORT THE CASE OF THE LD.AO. EVEN BEFORE US THE LD.DR WAS NOT ABLE TO SUCCESSFULLY CONTROVERT TO THE FINDINGS OF THE LD.CIT(A). THE DECISION CITED BY THE LD.DR IS ALSO NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCE OF THE CASE OF THE ASSESSEE. THE ASSESSEE HAS ALSO EXPLAINED VARIOUS SIT UATIONS WHEREIN SUCH DOCUMENTS ARE ACCUMULATED IN THE PREMISES OF THE ASSESSEE. THE LD.DR COULD ALSO NOT FURNISH ANY MATERIALS TO REJECT THE EXPLANATION OFFERED BY THE ASSESSEE. HENCE WE DO NOT FIND IT NECESSARY TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) ON THIS REGARD. THUS THIS GROUND IS ALSO DECIDED IN FAVOUR OF THE ASSESSEE. SINCE THE FACTS AND THE ISSUE BEING SAME, THE SAME DECISION HOLDS GOOD IN THE CASE OF THE ASSESSEE ALSO AND ACCORDINGLY WE HEREBY DIRECT THE LD.AO TO DELETE THE ADDITION OF RS.25 ,50,000/ - MADE TOWARDS UNACCOUNTED PRO - NOTES. 10 . GROUND NO.2( VII ) : ADDITION OF R S.5,84,529/ - TOWARDS PURCHASES OF FIXTURES & AMEN I TIES AS UNEXPLAINED INVESTMENT: I T WAS OBSERVED BY THE LD.AO THAT THE ASSESSEE HAD ENT ERED INTO AN AGREEMENT WITH HIS LANDLORD SHRI T. CHANDRAMOULI ON 10.07.2002 FOR PURCHASE OF FIXTURES AND AMENITIES IN THE PROPERTY FOR RS.5,84,529/ - . THE LD.AO WAS OF THE VIEW THAT THE ASSESSEE HAD PAID THE AMOUNT OF RS.5,84,529/ - AND THE SAME W AS NOT ACCOUNTED IN ITS BOOKS OF ACCOUNTS M AINTAINED IN THE COMPUTER. 16 IT(SS)A NO.19/CHNY/2014 THEREFORE THE LD.AO ADDED THE SAME AS THE UNEXPLAINED INVESTMENT OF THE ASSESSEE. ON APPEAL, THE LD.CIT(A) ENDORSED WITH THE VIEW OF THE LD.AO. 1 0 .1 AT THE OUTSET WE ARE OF THE VIEW THAT THE LD.REV ENUE AUTHORITIES HAVE NOT ARRIVED AT ANY CONCLUSIVE FINDING ON THE ISSUE AFTER PROPER INVESTIGATION. THEREFORE WE DO NOT FIND ANY MERIT IN THE ORDERS OF THE LD.REVENUE AUTHORITIES FOR MAKING ADDITION OF RS.5,84,529/ - IN THE HANDS OF THE ASSESSEE. HENCE WE HEREBY DIRECT THE LD.AO TO DELETE THE ADDITION OF RS.5,84,529/ - 11 . IN THE RESULT , THE APPEAL OF THE ASSESSEE IS ALLOWED. O RDER PRONOUNCED ON THE 03 RD APRIL , 2019 AT CHENNAI. SD/ - SD/ - ( ) (DUVVURU R.L REDDY) / JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER / CHENNAI, / DATED 03 RD APRIL , 2019 RSR / COPY TO: 1. / APPELLANT 2. /RESPONDENT 3. ( ) / CIT(A) 4. / CIT 5. / DR 6. / GF