DCIT CENTRAL 2, BHOPAL V. RAJU PERUMAL , BHOPAL

ITSSA 219/Ind/2019

AI Insights

The case involves multiple appeals related to the assessments of Shri Raju Perumal for the assessment years 2011-12, 2012-13, and 2014-15. The appeals were filed against the orders of the Commissioner of Income-Tax (Appeals) which had deleted various additions made by the Assessing Officer under sections 68, 69, 69A, and 69B of the Income-tax Act, 1961. The main issues revolved around unexplained cash deposits, unexplained foreign travel expenses, and unexplained investments in property. The Tribunal examined the evidence, including the cash books, agreements, and statements of the parties involved, and found that the additions were not substantiated.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132683 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 6 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-03-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-03-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 29-09-2019
• Other Referred Cases: ACIT Vs. Ashok Gupta, Signature Infra IT(SS)A No. 187 & 188/Ind/2018, Nitin Agarwal IT(SS)A No. 182/Ind/2019
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Unexplained investment; Unexplained expenditure; Opportunity of cross examination; TDS
• Section: 131; 68; 69; 132; 69C; 143(3); 153A; 69B; 271D; 69A; 13; 119; 22

Judgement Text

अपीलीय अिधकरण, इंदौर ायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER (Conducted through Virtual Court) IT(SS)A No. 217 to 219/Ind/2019 Assessment Year: 2011-12, 2012-13 and 2014-15 DCIT, Central-2 Bhopal बनाम/ Vs. Shri Raju Perumal, Siddhartha Mount View Villas, Chuna Bhatti, Bhopal (Appellant / Revenue) (Respondent / Assessee) PAN: ABZPP 3789 P IT(SS)A No. 198/Ind/2019 Assessment Year: 2012-13 Shri Raju Perumal, Siddhartha Mount View Villas, Chuna Bhatti, Bhopal बनाम/ Vs. DCIT, Central-2 Bhopal (Appellant / Assessee) (Respondent / Revenue) Assessee by Shri S.S. Deshpande, AR Revenue by Shri P.K. Mishra, CIT-DR Date of Hearing 30.11.2022 / 13.03.2023 Date of Pronouncement 31.03.2023 आदेश / O R D E R Per B.M. Biyani, AM: Feeling aggrieved by a consolidated appeal-order dated 30.07.2019 passed by learned Commissioner of Income-Tax (Appeals)-3, Bhopal [“Ld. CIT(A)”], which in turn arises out of a consolidated assessment-order dated Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 2 of 33 28.03.2016 passed by learned ACIT, Central Circle-II, Bhopal [“Ld. AO”] u/s 153A / 143(3) of Income-tax Act, 1961 [“the Act”], the revenue has filed these appeals for Assessment-Year [“AY”] 2011-12, 2012-13 and 2014- 15 and the assessee has filed cross-appeal for AY 2012-13. Since these appeals arise from common-orders of lower-authorities and certain issues are identical; they are being decided by this common order for the sake of convenience. 2. Heard the Ld. Representatives of both sides at length and case records perused. 3. Briefly stated the facts are such that the assessee-individual is earning income mainly from rent, transport contractor and share from partnership firms which are engaged in the business of builders and developers. A search u/s 132 was conducted on assessee and its associated concerns on 29.01.2014 and assessments were framed u/s 153A / 143(3). The Ld. AO completed assessments after making certain additions against which the assessee went in first-appeal and partly succeeded. Now, being aggrieved by the orders of first-appeal, the revenue/assessee have filed these appeals. 4. The grounds raised by parties are as under: Revenue’s IT(SS)A No. 217/Ind/2019 – AY 2011-12: “(1) On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 80,000/- made by the assessing officer on account of unexplained cash credits u/s 68 of Income-tax Act, 1961. (2) On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 1,87,500/- made by the assessing officer on account of unexplained foreign travel u/s 69C of Income-tax Act, 1961. (3) On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 17,047/- made by the assessing officer on account of undisclosed investment u/s 69B of the Income-tax Act, 1961. Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 3 of 33 (4) On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 2,00,00,000/- made by the assessing officer on account of unexplained investment in purchase of property.” Revenue’s IT(SS)A No. 218/Ind/2019 – AY 2012-13: “(1) On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 4,92,000/- made by the assessing officer on account of unexplained cash credits u/s 68 of Income-tax Act, 1961. (2) On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 1,12,500/- made by the assessing officer on account of unexplained foreign travel u/s 69C of Income-tax Act, 1961. (3) On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 2,00,00,000/- made by the assessing officer on account of unexplained investment in purchase of property. Assessee’s IT(SS)A No. 198/Ind/2019 – AY 2012-13: “(1) That on the facts and in the circumstances of the case, the Learned Commissioner of Income-tax III, Bhopal was not justified in holding that the Assessing Officer was justified in making additions in the years, where the assessment proceedings were not pending and no incriminating material was found during the course of search. (2) That on the facts and in the circumstances of the case, the Learned Commissioner of Income-tax, III, Bhopal was not justified in confirming addition of Rs. 12,66,000/- towards cash deposited in bank account of the assessee.” Revenue’s IT(SS)A No. 219/Ind/2019 – AY 2014-15: “(1) On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 2,95,000/- made by the assessing officer on account of unexplained cash u/s 69A of Income-tax Act, 1961. (2) On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 5,75,000/- made by the assessing officer on account of unexplained foreign travel u/s 69C of Income-tax Act, 1961. (3) On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 5,83,350/- made by the assessing officer on account of unexplained expenditure of the interest paid on cash loans. (4) On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 50,00,000/- & 1,50,00,000/- made by the Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 4 of 33 assessing officer on account of unexplained investment in purchase of property.” 5. We would proceed assessment-year wise, taking appeals/grounds of revenue and assessee together wherever necessary. Revenue’s IT(SS)A No. 217/Ind/2019 – AY 2011-12: Ground No. 1: 6. This ground relates to the addition of Rs. 80,000/- made by Ld. AO u/s 68 on account of unexplained cash-deposit made by assessee in bank a/c. 7. Facts apropos to this ground are such that during assessment- proceeding, Ld. AO observed that the assessee had made cash-deposit of Rs. 80,000/- in bank account. When the Ld. AO confronted the assessee on source of deposit, the assessee replied that it is fully recorded in his cash- book/cash flow chart. However, the Ld. AO rejected assessee’s explanation by observing thus in Para No. 8 of assessment-order: “The submission of assessee is considered carefully, however the same is not acceptable for the following reasons: (i) During the course of search proceedings various incriminating documents are found which are not found to be recorded in the books of account of the assessee. (ii) Various documents found and seized shows that the assessee is involved in unrecorded cash transactions for e.g. (a) transaction of Rs. 50 lakhs in cash with Lilwani Family as per page no. 85 and 87 of LPS-1, (b) page no. 67 to 83 and 156, 157 of LPS-1 shows unrecorded transactions of Rs. 90 lakhs etc. (iii) In view of above discrepancies, the books of assessee cannot be relied upon. Therefore, assessee’s contention is not acceptable.” 8. During first-appeal, the Ld. CIT(A) allowed relief by holding that the Ld. AO has not doubted the genuineness and authenticity of the entries Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 5 of 33 appearing in cash-book/cash flow chart; he had only found that certain entries were not recorded in the cash-book/cash-flow chart. Ld. CIT(A) observed and held that once the receipts of cash-inflow recorded in the cash-book/cash flow chart are not doubted, the AO was not justified in not accepting application of those receipts for making deposits in bank; accordingly he deleted the addition. 9. Before us, Ld. DR referred to the observations made by Ld. AO in assessment-order (already reproduced by us in foregoing paragraph) and argued that the Ld. AO has not rejected the cash-flow chart in a harried manner; in fact the AO has noted certain transactions which were not recorded in that chart. Therefore, according to Ld. DR, the Ld. AO has rightly rejected the cash-flow chart and treated the cash-deposits made by assessee in bank account as unexplained. 10. Per contra, Ld. AR referred to the same observations of Ld. AO but argued differently. He submitted that in point number (i) the Ld. AO has made a general remark that “various incriminating documents” were found but the Ld. AO has not mentioned as to which incriminating document qua the impugned cash-deposit in bank account was found. Going further Ld. AR argued that the transactions noted by AO in point No. (ii) are different transactions and even if those transactions were not found in the cash-book / cash-flow chart, we are concerned with the cash-deposits in bank account and those cash-deposits were duly recorded in the cash-book / cash-flow chart. Therefore, according to Ld. AR, the source of impugned cash deposits in bank a/c are at least duly explained. Hence, the addition made by Ld. AO treating the cash-deposits in bank as unexplained is absolutely bad and the same was rightly deleted by Ld. CIT(A) after a proper consideration. 11. We have considered rival submissions of both sides and perused the material held on record. From the orders of lower authorities as also the Paper-Book filed before us, we find that the assessee has maintained/filed Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 6 of 33 copies of cash-book/cash-flow chart to Ld. AO containing the details of inflows and outflows to explain the query raised by Ld. AO qua the sources of cash-deposits made in bank a/c. We further observe that the AO has not accepted the cash-book/cash-flow chart by observing that certain transactions were not recorded therein. But we believe that if certain transactions were not recorded, those transactions can alone be treated as unexplained and the AO could have a different recourse qua those transactions but it is not justified to reject the cash-book/cash-flow chart in toto. In fact, the Ld. CIT(A) has rightly observed that when the receipts mentioned in cash-flow chart are accepted, there is no reason to reject the application of those receipts qua the cash-deposits made in bank a/c which are very much appearing in the very same cash-book/cash flow chart. We do not find any infirmity in such observation / conclusion made by Ld. CIT(A). Being so, we are inclined .to agree with the action of Ld. CIT(A) in deleting the addition made by Ld. AO. This ground of revenue is therefore dismissed. Ground No. 2: 12. This ground relates to the addition of Rs. 1,87,500/- made by Ld. AO u/s 69C on account of unexplained expenditure on foreign travel. 13. During assessment-proceeding, Ld. AO observed that the assessee had undertaken foreign travels with his family members. When the Ld. AO called for details of foreign travels and sources of expenses incurred thereon, the assessee filed datewise details of travels. Regarding source of expenses, the assessee mentioned that the same were made out of his withdrawals. On analysis of reply submitted by assessee, Ld. AO found certain discrepancies, namely (i) the assessee had not given details of all travels, there were some more travels as per assessee’s passport; (ii) the assessee has not submitted full details of expenses incurred on travels; and (iii) the assessee’s contention of meeting those expenses from withdrawals was not correct because the assessee had not supplied evidences to that effect and moreover Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 7 of 33 the withdrawals were utilized for household expenses and not for foreign travels. Accordingly, the Ld. AO made a working of “estimated expenses” and “expenses shown by assessee” and added the difference of two figures u/s 69C. The working made by Ld. AO is given on Page No. 14 of the assessment-order, which we do not re-produce for the sake of brevity. 14. During first appeal, the assessee mainly challenged the quantum of “estimated expenses” made by Ld. AO as being baseless. The assessee also filed the details of the rates charged by various tour operators/agencies for arranging foreign travels. The Ld. CIT(A) observed that the AO has made estimation without any basis; simultaneously he also observed that the rates of tour operators/agencies supplied by assessee were also on lower side. After a due consideration, Ld. CIT(A) made his own estimation and granted a partial relief to assessee. 15. Before us, Ld. DR heavily supported the assessment-order. 16. Per contra, Ld. AR argued that a bare perusal of the estimation made by Ld. AO on Page No. 14 of assessment-order demonstrates that the AO has adopted figures like 1,00,000; 1,50,000; 2,00,000; 2,50,000; etc. which are adhoc figures without any basis as against which the Ld. CIT(A) has made a reasoned estimation and thereafter granted partial relief to assessee. Ld. AR submitted that the order of Ld. CIT(A) is much better qualitatively as compared to the Ld. AO. Therefore, his action must be upheld. 17. We have considered rival submissions of both sides and perused the orders of lower authorities. After a careful consideration, we observe that the Ld. AO has adopted adhoc figures for estimation of expenses without any basis but the Ld. CIT(A) has passed a reasoned order after due consideration and hence no interference is warranted by us in his decision. Although the Ld. DR dutifully supported the order of AO but could not contradict the conclusion derived by CIT(A). Being so, we are persuaded to uphold the Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 8 of 33 action of Ld. CIT(A) whereby he has granted partial relief to assessee. Accordingly, this ground of revenue is also dismissed. Ground No. 3: 18. This ground relates to the addition of Rs. 17,047/- made by Ld. AO u/s 69B on account of undisclosed investment. 19. During assessment-proceeding, Ld. AO observed that the assessee has made investment in construction of residential house situated at A-1, Siddharth Mount View Vilas, Chuna Bhatti, Bhopal. The Ld. AO made a reference to Departmental Valuation Officer (DVO) for ascertaining the investment in construction whereupon the DVO submitted report dated 18.03.2016. Based on such report, Ld. AO computed year-wise difference of the “investment declared by assessee” and “estimated by DVO”. Accordingly, the AO made an addition of Rs. 17,047/- in AY 2011-12. 20. During first-appeal, Ld. CIT(A) granted relief by observing mainly, based on several judicial rulings, that the Ld. DVO has made valuation on the basis of CPWD rates and not local PWD rates. He observed that a margin of 25% has been accepted in various judicial rulings for difference between CPWD rates and local PWD rates and a further margin of 5% is also allowable to assessee for self-supervision. Ld. CIT(A) also made an ancillary observation that the valuation-report is nothing but an estimation of valuation and DVO’s report is not conclusive proof of undisclosed investment. With such observations, Ld. CIT(A) held that the difference of Rs. 17,047/- is within the acceptable margin of 25%+5%=30%; thus deleted addition. 21. Before us, Ld. DR supported the assessment-order as against which the Ld. AR defended the order of CIT(A). After a careful consideration, we find that the Ld. CIT(A) has passed a well-reasoned order after allowing margin benefit to assessee as accepted in various judicial rulings, more Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 9 of 33 particularly the difference in CPWD rates and local PWD rates. Therefore, we do not have any valid reason to upset the finding/conclusion made by Ld. CIT(A). Hence, we approve his action and dismiss this ground of revenue too. Ground No. 4: 22. This ground relates to the addition of Rs. 2,00,00,000/- made by Ld. AO on account of unexplained investment in purchase of property. 23. Facts apropos to this addition are such that the assessee has executed a “sale-deed”, as a power of attorney (POA) holder of Shri Shiv Narayan Rajpoot (SNR), in favour of M/s Aradhya Bhumika Construction (ABC) for sale of 7.3 acres of land at Katra. During post-search enquiry, it was observed that SNR has made huge cash-deposits in his bank account. Accordingly, statement of SNR was recorded on 10.07.2014 wherein he admitted having sold the impugned land @ Rs. 95 lakh per acre, for Rs. 7 Crore which was received partly by cheque (Rs. 3 crore) and partly in cash (Rs. 4 crore). He further submitted that the deal was done through one Shri Pinki (broker). Based on such statement of SNR, Ld. AO framed a view that the assessee had purchased the impugned land for Rs. 7 crore and thereafter sold as POA holder; accordingly the Ld. AO made an addition of Rs. 4 crore (cash component) in the hands of assessee as unexplained investment. 24. During first-appeal, one of the arguments taken by assessee before Ld. CIT(A) was that the addition had been made without giving opportunity to cross-examine SNR. Therefore, Ld. CIT(A) directed the AO to provide such opportunity to assessee. In compliance to such direction, Ld. AO provided cross-examination on 20.06.2018. During cross-examination on 20.06.2018, SNR re-stated to have sold the land for Rs. 7 Crore but he stated that he did not know P. Raju (i.e. Raju Perumal, assessee) but he received amount from one Mr. Pinky (Q.No. 15 of statement). He further Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 10 of 33 agreed to supply the details of amounts received in writing by 25.06.2018. Finally on 25.06.2018, he filed a letter admitting to have sold the land @ Rs. 91 lakh per hectare and received consideration of Rs. 2,70,72,500/- only. Based on outcome of cross-examination, Ld. AO filed remand-report to Ld. CIT(A) on 27.06.2018, a copy of the same is re-produced by Ld. CIT(A) on Page No. 78 to 82 of his order. Finally, after taking into account the remand- report, the Ld. CIT(A) granted relief to assessee precisely for following reasons: (i) The addition has been made merely on the basis of statement of SNR; there was no incriminating material at all. (ii) The assessee has acted as a mere POA holder in the transaction and has not carried out transaction as owner. No agreement between the assessee and the seller (SNR) or the assessee and purchaser (ABC) has been found which could indicate that the assessee had first purchased the impugned land from SNR and thereafter sold to ABC. No evidence has been found evidencing any payment having been made by the assessee to SNR from his own sources or even any consideration having been received from ABC which has been utilized by assessee for his own benefit. There is no statement from SNR or ABC or even Pinki broker that the assessee had any interest in the property except acting as POA Holder. The assessee had also established that whatever consideration was received by him from ABC as POA holder, was passed on to SNR through account-payee cheques. Hence no addition can be made in the hands of assessee as per decision by ITAT, Indore in ACIT Vs. Ashok Gupta (2017) 31 ITJ 121 where it was held that if the assessee has acted only as a POA holder, tax cannot be assessed in the hands of assessee. (iii) The land was sold by SNR and purchased by ABC. The consideration was paid by ABC and is duly recorded in the books of ABC. Hence, the Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 11 of 33 assessee does not have any beneficial interest in the deal. The AO has made addition on mere suspicion. Suspicion, however strong, cannot be a basis for addition as held by Hon’ble Supreme Court in several decisions. (iv) The sole basis of addition is the statement of SNR recorded initially on 10.07.2014. Those statements were given without providing cross- examination to assessee. During first-appellate proceeding when cross-examination was provided, the original statements have been established to be false. The AO has also accepted in remand-report that the SNR was confused and was under the grip of impasse. SNR also filed a letter dated 25.06.2018 to AO and stated to have sold land of 2.975 hectare @ Rs. 91 lakh per hectare and received consideration of 2,70,72,500/-. Thus, the receipt of Rs. 7 crore is refuted by SNR himself during cross-examination. 25. Before us, Ld. DR strongly relied upon the observations/conclusions made by Ld. AO in assessment-order. Drawing our attention to Page No. 34 of assessment-order, Ld. DR submitted that the Ld. AO has analysed the statements of SNR and therefore concluded thus “In view of these facts and circumstances, as the cheques were issued in the name of seller and the power of attorney was also executed in favour of Shri P. Raju, it appears that the actual transactions were done by Shri P. Raju.” Then, carrying us to next Page No. 35 of assessment-order, Ld. DR submitted that the AO has finally observed that the assessee has made the deal for purchase of land and thereafter transferred to ABC; therefore the cash-payments have been made by assessee. Ld. DR submitted that these conclusions derived by Ld. AO are sound and based on analysis; they cannot be taken lightly. Ld. DR also opposed the observations/conclusions made by Ld. CIT(A) by submitting that the Ld. CIT(A) has made those observations/conclusions as a mere reproduction of what the assessee pleaded before him during first-appellate proceeding. With these submissions, Ld. DR contended that the AO has Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 12 of 33 rightly made addition which must be upheld and the relief given by Ld. CIT(A) should be reversed. 26. Per contra, the Ld. AR made vehement submissions and emphasized the reasonings adopted by Ld. CIT(A). He contested (i) the entire addition has been made on the sole basis of statement given by SNR and without having any material against assessee much less incriminating material; (ii) the assessee was a mere POA holder and not having any interest whatsoever in the transaction; (iii) the impugned transaction was a deal between SNR and ABC, the consideration was paid by ABC and duly recorded in the books of ABC; and (iv) there is a gross contradiction in the statements given by SNR initially on 10.07.2014 and later during cross-examination. Ld. AR submitted that initially he stated to have sold land @ Rs. 95 lakh per acre, whereas later he himself admitted to have sold for Rs. 91 lakh per hectare. Ld. AR submitted that 1 hectare is equivalent to approximately 2.47 acres and therefore the whole calculation would change. Ld. AR submitted that the entire addition is based on mere suspicion, without any material and on unreliable statements of SNR. 27. Then, Ld. AR gainfully took support from the decision of ITAT, Indore in Signature Infra IT(SS)A No. 187 & 188/Ind/2018 order dated 08.01.2021 where, on the set of similar facts, the Hon’ble Co-ordinate Bench has deleted the addition made by Ld. AO. The relevant paragraphs of the order are: “73. Now we take up Revenue’s appeal for Assessment Year 2012- 13 IT(SS)A No.02/Ind/2019. Ground No.1 raised by the revenue reads as follows:- (1) On the facts and in the circumstances of the case, the Id. ClT(A) erred in deleting the addition of Rs. 3,36,13,000/- made by the Assessing Officer on account of undisclosed investment u/s 69B. 74. Brief facts relating to this ground are that the assessee had purchased 6.40 acres of land at Village Bagli from Shri Motilal vide three registered purchase deeds dated 19.07.2011, 23.01.2012 and 31.05.2012 for a total purchase consideration of Rs. 2,91,62,000/- which was duly recorded in the regular books of accounts of the assessee. During post search investigation Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 13 of 33 statement of Mr. Motilal who was the seller of the land was recorded who stated that he has sold the land under consideration to Mr. Thakur Prasad @Rs. 1 crore per acre. Based on this statement show cause was issued to the assessee proposing an addition of Rs. 3,48,30,000/- as unexplained investment in purchase of the land (Rs. 6.40 crore – 2.92 crore). Detailed submissions were made before the AO on the proposed addition which were found not acceptable and the addition was made by the AO after making the following observation: i. The seller has specifically confirmed the sale at Rs. 1 Crore per acre. ii. The contention of the assessee that the seller has never had any interaction with them is not relevant as the land has been purchased by the assessee from the sellers and the payments are made by the assessee directly to the seller. iii. The assessee’s contention regarding not providing the details of utilisation of the sale proceeds is not relevant as the seller has specifically confirmed the sale rate of Rs. 1 crore per acre. 75. A specific request was made for supplying a copy of the statement of the seller and for providing an opportunity to cross examine the seller. However the request was not accepted. It was further submitted before the ld. A.O. that no evidence was found during the course of search or after words to substantiate that the assessee has made any payment over and above the value recorded in the books of accounts. It was further submitted that the assessee is entitled to claim adjustment of such expenses. The addition made on this count would ultimately result into squaring off the whole addition since on one side the addition is made and on the other side the deduction is to be allowed as cost of construction. The ld. A.O. however, did not accept the contention of the assessee and made the addition. 76. In appeal before the Ld. CIT(A) the contentions were raised. The Ld. CIT(A) was pleased to remand the matter and allow the assessee to cross examine the said person. The Ld. CIT(A) has reproduced the copy of the statement at Pg. 13 of the order. For reply to Q.6 the seller specifically said that the land in question has been sold for Rs.1 crore per hectare. The ld. CIT(A) on the basis of this statement concluded that the land in question was sold for Rs.1 crore per hectare and not 1 crore per acre. He further observed that in the remand report the A.O. has not brought on record any convincing material to disbelieve the statement. Accordingly, the CIT(A) has deleted the addition. 77. Now the revenue is in appeal before this Tribunal. 78. Ld. Departmental Representative supported the order of Ld. A.O. 79. Per contra Ld. Counsel for the assessee heavily relied on the detailed finding of Ld. CIT(A) and submitted that in the first statement of the seller he asserted that the land is agreed to be sold to Thakur Prasad Rajput and he is not in knowledge of the fact that the land is sold to Signature Infrastructure, Bhopal. The statement of the farmer was recorded after the search and the copy of the same was not provided to the assessee. Without providing any Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 14 of 33 opportunity to cross examine, the said statement is not binding on the assessee. The seller also was not able to give the complete account of the sale consideration. During the appellate proceedings the matter was remanded to the Ld. A.O. for giving the opportunity of cross examination. In the cross examination, the seller specifically asserted that the land has been sold for Rs. 1 crore per hectare and not Rs. 1 crore per acre (Pg.14 of ld. CIT(A) order). Thus, it is very clear that the land was sold for Rs.2.8 crores and not Rs.6.4 crores. Thus, the addition was made on the wrong assumption of facts. The ld. A.O. has not been able to bring on record any evidence to show that the land in question was purchased for more than the consideration shown in the registered document. There is no evidence found during the course of search which show that the assessee has paid any extra amount. Under these circumstances the ld. CIT(A) was right in deleting the addition. 80. We have heard rival contentions and perused the record placed before us and carefully gone through the submission filed by the assessee. Revenue has challenged the action of Ld. CIT(A) deleting the addition of Rs.3,36,13,000/- made by the Ld. A.O on account of unexplained investment u/s 69 of the Act. We find that during the course of post search investigation it was found that the assessee firm purchased land totalling to 2.59 hectare (6.40 acres) at Village Bagli from Shri Motilal S/o Shri Kaluram Rajpal resident of Village Katara vide 3 registries dated 19.7.11, 23.1.2012 and 31.5.2012 for a total consideration of Rs.2,91,62,000/-. During the course of post search enquiries statement of seller Shri Motital was recorded on oath u/s 131 of the Act on 9.6.2014 wherein he stated that he sold 6.40 acres of land oat village Bagli @ Rs.1 crore per acre. Before Ld. A.O it was submitted by the assessee that the statement of the farmer was recorded after the search and the copy of the same was not provided. Opportunity to cross examine the farmer is also not provided. The statement is not reliable and is not unsubstantiated. Also Mr. Motital (seller) had specifically confirmed that he had never interacted with the assessee or his representative and as such the statement is of third party. The market value of the land as per the Collector guideline for the purpose of calculation of stamp duty was Rs.3,04,99,111/- only as against the consideration paid at Rs.2,91,62,000/-. The difference in both the prices is less than 5%. All the payments were made through account payee cheque out of which Rs.1,20,00,000/- was paid to Shri Thakur Prasad (he is the person to whom the seller Mr. Motital has stated to have sold the land who has thereafter sold it to the assessee namely M/s. Signature Infrastructure) and the balance payment was made in the name of the seller. However Ld. A.O was not satisfied with the submissions and he applied the rate of Rs.1 crore per acre on the land purchased by the assessee and accordingly made addition for Rs.3,36,13,000/- for Assessment Year 2012-13 and Rs.20,25,000/- for Assessment Year 2013-14. The instant. appeal relates to Assessment Year 2012-13. When the matter travelled before the first appellate authority he after considering the submissions of the assessee called for remand report since the assessee was not given the opportunity to cross examine nor copy of the statement was provided to the assessee. The Ld. A.O after giving opportunity to cross examine submitted the remand report on 29.6.2018. In this remand report placed at page 16-17 of the impugned order of Ld. CIT(A) dated 30.10.2008, the statement of the seller Mr. Motilal was again taken. Incidentally in the original statement given during the course of Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 15 of 33 post search enquiry he stated to have sold the land at Rs. 1 crore per acre but in the remand proceedings in reply to Question no. 6 he stated to have sold the land @ Rs.1 crore per hactre. The assessee also filed a rejoinder to the remand report on 29.6.2018 which reads as follows:- The AO was also issued directions to provide the assessee with an opportunity to cross examine Shri. Motilal Rajput. The AO had provided the assessee with an opportunity to cross examine the said person on 20.06.2018 and have submitted her report on the cross examination along with copy of the statement of Mr. Motilal recorded during the course of cross examination. The said person in his initial statements recorded on 09.06.14 during post search proceedings have stated that he has sold the land under consideration to the assessee for Rs. l,OO,OO,000/-(per acre) total sale value Rs. 6.40 croee and have invested the sale proceeds in purchase of 10 acres of land in Obedullaganj, 15 acre in Sultanpur and 6 acre in Jhagaria and the balance amount was stated by him to have been used by him in repayments of loans earlier taken. In a separate reply made during the initial statement of 09.06.14 the cost of these investments was mentioned as Rs. 60 lac, Rs.40 Lac & Rs. 180 Lac respectively. The total value of investments recorded in the statement was Rs. 280 lakh. Accordingly after getting the above facts verified from Shri. Moti Lal he was informed that as per the details given by him in his initial statement he has received Rs. 6.40 crore (6.40 acre of land @ Rs. 1 Crore per acre) out of which he has invested Rs. 280 lac and have utilised the balance has been used for repayment of loans taken. The amount of loans claimed by him to have been repaid was mathematically computed and informed to him during cross examination at Rs.360 lakh and he was requested to provide the name of the persons who have given him such heavy loans. In reply to this question he has made a categorical statement that he has neither received any such loan and has nor repaid any loan. He was thereafter told that in such a situation either the sale price stated to have been received by him in his initial statement was wrong or the value of investments mentioned by him were wrong. In reply he made a categorical statement that he has made the sale at Rs.l Crore per hectre and not at Rs.l Crore per acre and also confirmed that the investments stated by him are correct. Thus Shri.Motilal on cross examination have admitted that the sale price of Rs.1 crore per acre stated by him in his initial statement dated 09.06.14 was not correct and the sale has actually been made by him at Rs. 1 Crore per hecter. Thus the sale value admitted Mr. Motilal is Rs. 2.59 Crore (1,00,00,000/2.47*6.40) as against the purchase value recorded in the books of assessee at Rs. 2.92 Crore. It may be mentioned that Mr. Motilal has specifically confirmed that he does not know the assessee and he had sold the property to Mr. Thakurdas who has sold the property to the assessee. Thus admission made solely on the basis of the statement of Mr.Motilal is requested to be deleted. After considering the remand report, rejoinder filed by the assessee and other submissions filed during the course of the appellate proceedings and also considering the fact that in the initial statement the seller have stated to sold the land @ Rs.1 crore per acre and in the remand proceedings he stated to have sold @Rs.1 crore per hectre and looking to this fact that 1 hectre is equivalent to 2.47 acre which completely changes the calculation of the investment made by the assessee in the land in question, Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 16 of 33 deleted the addition of Rs.3,36,13,000/- for Assessment Year 2012-13 observing as follows:- 5.4 Submission filed by appellant along with the details / material brought on record have been duly considered. Due consideration has been given to the findings arrived at in the assessment order and the remand report. It is seen that the addition is made solely on the basis of statement of Mr. Motilal recorded during post search enquiry. It is seen that during search no paper was found/seized which could indicate that the assessee has purchased the land under consideration for a consideration other than what is mentioned in the registered purchase deed. No evidence of the assessee having made any payment in excess of the amount recorded in the books/registered purchase deed was found. The assessee had purchased the land under consideration for a total purchase consideration of Rs.2,91,62,000/- as against its market value of Rs. 3,05,99,000/- fixed by collector of stamps for the purpose of payment of stamp duty and the difference between the two values is less than 5. 5.5 During post search enquiries statement of the seller Mr. Motilal was recorded on 09.06.14 who stated that he has sold 6.40 acre of land @ Rs. one crore per acre, aggregating to Rs. 6.40 Crore to Mr. Thakurdas against which the assessee has shown the purchase of land at Rs. 2,91,62,000/- The assessee had made a request before the AO to allow cross examination of the said person which was denied for various reasons. However in view of the well settled law that no statement recorded at the back of the assessee can be used against the assessee as evidence without providing the assessee with an opportunity of cross examination, directions were issued to the AO to provide the assessee an opportunity of cross examination of Mr. Motilal, the seller. During cross examination, the seller has retracted from his earlier statement dated 09.06.14 and have stated during cross examination that the land was sold by. him @ Rs. one crore per hectare which was erroneously stated in the earlier statement of 09.06.14 as Rs. one crore per acre. Thus the sale price received by him was Rs. 2.59 crore on sale of 6.40 acre (2.59 hectare). The AO in his remand report has not brought on record any convincing material to disbelieve the statement of the seller recorded during cross examination. Thus it is seen that the sole basis for the addition was the statement of Mr. Motilal recorded on 09.06.14 and no corroborative evidence was found during search to substantiate the statement and the statement itself having been retracted during cross examination no justifiable reason remains to sustain the addition. The addition is therefore directed to be deleted. In view of the above Ground no 3 for A.Y 2012-13 is allowed. The above finding of Ld. CIT(A) stands uncontroverted by the Ld. Departmental Representative who has failed to file any evidence in support of its contention and observation of Ld. A.O. We therefore in the given facts and circumstances of the case are of the considered view that the sole basis on which the impugned addition was the price of Rs.1 crore per acre stated by the seller which was subsequently revised/rectified in the remand proceedings by the seller stating at Rs.1 crore per hectare and the same if applied to the transaction under consideration and the same will arrive at 2.59 crores which is less than the actual purchase consideration paid by assessee at Rs.2.91 crores (approx.) and thus do not call for any addition for unexplained investment in the purchase of 2.59 ha of land at Village Bagli by the assessee. Since there is no inconsistency in the finding of Ld. CIT(A) we uphold the same and dismiss Revenue’s Ground No.1 Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 17 of 33 for Assessment Year 2012-13. 83. Now we take up Ground.2 for Assessment Year 2012-13 which reads as follows; (2) On the facts and in the circumstances of the Case, the Id. CIT(A) erred in deleting the addition of Rs. 4,32,40,000/-.:” 28. With these submissions, Ld. AR prayed that the Ld. CIT(A) has rightly considered the fats of case and thereafter deleted the addition. Ld. AR submits that there is no infirmity in the order of Ld. CIT(A) and the same must be upheld. 29. We have considered rival submissions of both sides, perused the material held on record including the orders of lower authorities. After a careful consideration, we find strong merit in the submissions of Ld. AR which are broadly reiteration of what had been analysed and considered by Ld. CIT(A). In foregoing paragraph, we have already enumerated the vital points considered by Ld. CIT(A) while granting relief and we do not wish to repeat the same for the sake of brevity. We agree with the various contentions accepted by Ld. CIT(A). We have also gone through the decision of Hon’ble Co-ordinate Bench in Signature Infra (supra) referred to by Ld. AR and observed that the facts of the said decision are very similar to the facts before us. Therefore, we are of the considered view that the decision taken by Hon’ble Co-ordinate Bench applies with equal force in the present case before us. Ld. DR could not contradict the applicability of decision. Thus, taking into all these aspects, we are of the considered view that the Ld. CIT(A) has rightly analysed the facts and evidences and thereafter made a reasoned conclusion that the addition made by AO was unsustainable. Being so, we are persuaded to uphold the action of Ld. CIT(A). Accordingly, this ground of revenue is also dismissed. 30. In view of above discussions, the Revenue’s ITA for AY 2011-12 is dismissed. Revenue’s IT(SS)A No. 218/Ind/2019 – AY 2012-13: Assessee’s IT(SS)A No. 198/Ind/2019 – AY 2012-13: Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 18 of 33 Revenue’s Ground No. 1 and Assessee’s Ground No. 2: 31. These grounds relate to the addition of Rs. 16,95,000/- made by Ld. AO u/s 68 on account of unexplained cash-deposit made by assessee in bank a/c. While the Ld. AO made addition of Rs. 16,95,000/-, Ld. CIT(A) granted part-relief of Rs. 4,29,000/- and upheld the remaining addition of Rs. 12,66,000/-. Now both sides are in appeal against the action of Ld. CIT(A). 32. These grounds are identical to ground No. 1 in Revenue’s ITA for AY 2011-12 and involve the same set of facts. Hence the decision taken by us therein would apply mutadis mutandis qua the ground raised by revenue. However, for adjudication of assessee’s ground, as stated earlier the Ld. AO made addition of Rs. 16,95,000/- but the Ld. CIT(A) granted part-relief of Rs. 4,29,000/- and upheld remaining Rs. 12,66,000/-. The reason given by Ld. CIT(A) for this is “As regards A.Y. 2012-13 it is seen that the total deposits appearing in the cash chart are Rs. 4,29,000/- only as against addition of Rs. 16,95,000/- made during the year. Thus cash deposits to the extent of Rs. 4,29,000/- only can be considered as explained. The assessee has claimed that the actual cash deposit in the bank account was Rs. 4,29,000/- only and the AO had wrongly considered the amount of cash deposit as Rs. 16,95,000/-. No evidence has however been produced in support of such contention.”. Before us, Ld. AR reiterated the same thing i.e. the actual cash-deposits in bank account were Rs. 4,29,000/- and not Rs. 16,95,000/-. Ld. AR has also filed copies of bank statements in the Paper- Book in support of this. Since the quantum of cash-deposits in Bank A/c is disputed and the lower authorities have not verified the claim of assessee, we are of the view that the ground raised by assessee should be remanded back to Ld. AO for the limited purpose of verifying the exact amount of cash- deposit made by assessee in the bank account. The Ld. AO shall restrict his exercise to such verification only and thereafter take a final decision in the matter. With this analysis, the revenue’s ground qua the wrong deletion of Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 19 of 33 Rs. 4,29,000/- by CIT(A) is dismissed and the assessee’s ground qua the upholding of Rs. 12,66,000/- is remanded back to Ld. AO. Revenue’s Ground No. 2: 33. This ground relates to the addition of Rs. 1,12,500/- made by Ld. AO u/s 69C on account of unexplained expenditure on foreign travel. 34. This ground is identical to ground No. 2 in Revenue’s ITA for AY 2011- 12 and involves the same set of facts. Hence the decision taken by us therein shall apply mutadis mutandis; accordingly this ground of revenue is dismissed. Revenue’s Ground No. 3: 35. This ground relates to the addition of Rs. 2,00,00,000/- made by Ld. AO on account of unexplained investment in purchase of property. 36. This ground is identical to ground No. 4 in Revenue’s ITA for AY 2011- 12 and involves the same set of facts. Hence the decision taken by us therein shall apply mutadis mutandis; accordingly this ground of revenue is dismissed. Assessee’s Ground No. 1: 37. In this ground, the assessee claims that the Ld. AO was not justified to make additions without having incriminating material. 38. We have already taken care of this ground while dealing with specific additions; therefore no separate adjudication is required. 39. In view of above discussions, the Revenue’s ITA for AY 2012-13 is dismissed and that of assessee is allowed for statistical purpose. Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 20 of 33 Revenue’s IT(SS)A No. 219/Ind/2019 – AY 2014-15: Ground No. 1: 40. This ground relates to the addition of Rs. 2,95,000/- made by Ld. AO on account of unexplained cash u/s 69A. 41. During the course of search, the authorities found physical cash balance of Rs. 2,95,000/- available in possession of assessee. During assessment-proceeding, when the Ld. AO asked the assessee to explain the source of such cash in hand, the assessee submitted that he is maintaining regular books of account and the impugned cash was duly recorded in such books. However, the Ld. AO disregarded this submission and made addition. During first-appeal, Ld. CIT(A) deleted addition for twin-reasons, viz. (i) the assessee has produced cash-book before Ld. AO and the claim of assessee that the cash is duly recorded therein, cannot be held to be incorrect; and (ii) looking to the status of assessee and income disclosed by him in Income- tax Return, holding of nominal cash of Rs. 2,95,000/- cannot be called improbable. 42. Before us, the Ld. DR supported the action of Ld. AO, while the Ld. AR defended the action of Ld. CIT(A). After a careful consideration, we find merit in the twin-reasons accepted by Ld. AO for granting relief to assessee. The Ld. AO has simply disbelieved assessee’s explanation and made addition; we are not inclined to accept such action of Ld. AO. Therefore, we subscribe to the view taken by Ld. CIT(A) whereby he has deleted the addition. This ground of revenue is thus dismissed. Ground No. 2: 43. This ground relates to the addition of Rs. 5,75,000/- made by Ld. AO u/s 69C on account of unexplained expenditure on foreign travel. Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 21 of 33 44. This ground is identical to ground No. 2 in Revenue’s ITA for AY 2011- 12 and involves the same set of facts. Hence the decision taken by us therein shall apply mutadis mutandis; accordingly this ground of revenue is dismissed. Ground No. 3: 45. This ground relates to the addition of Rs. 5,83,350/- made by Ld. AO on account of unexplained expenditure of interest paid on cash loans. 46. Facts relating to this addition are such that during the course of search-proceeding, the authorities seized “Page No. 67 to 83, 156 and 157 of LPS-1” which contained some hand-written papers, some copies of receipts showing each receipt at Rs. 9,58,335/- and copies of 10 post-dated cancelled cheques of the same amounts issued by assessee. Ld. AO has scanned these papers in assessment-order. During post-search/assessment enquiries, the assessee stated in statements u/s 131 recorded on 15.07.2014 that the loose papers have not been written by him but the receipts and cheques were signed by him. Based on these facts, the Ld. AO framed a view that the assessee must have received a loan of Rs. 90,00,000/- in cash and also repaid the same in cash alongwith interest. Thereafter, when the Ld. AO show-caused the assessee to explain the transactions reflected by those documents, the assessee submitted reply as under: “The assessee is a partner of the partnership firm M/s Signature Infrastructure. The assessee made an excess withdrawal of capital of Rs. 90,00,000/- on 07.08.2013. On coming to know about such unilateral and unauthorized withdrawal, the other partners of the firm raised an objection and asked the assessee to immediately refund the excess withdrawn capital. As the assessee was not in a position to refund such amount immediately, he was made to sign receipts/undertaking of the amounts received and was compelled to give post-dated cheques to the firm. The assessee thereafter within that month itself refunded the excess withdrawals. Thus, the amount received by the assessee was not his income. Further the amount refunded was out of the cash withdrawn by him from the firm and consequently the source of such repayment is also explained. It may be mentioned that the assessment of the said partnership firm is simultaneously being done by you Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 22 of 33 u/s 153A and the above facts can be verified by you from their records. However, in case you are not satisfied with the submission and desire that the assessee furnish some additional evidence, the same may kindly be communicated to the assessee to enable him to do the needful.” However, the Ld. AO rejected assessee’s submission and concluded that the assessee must have taken a loan of Rs. 90,00,000/- in cash and repaid the same in cash alongwith interest of Rs. 5,38,350/- [being the difference of Rs. 90,00,000/- (actual receipt) and Rs. 95,83,350/- (aggregate amount of 10 cancelled cheques)] from unexplained sources. Accordingly, Ld. AO made an addition of Rs. 5,38,350/- to the taxable income of assessee on account of unexplained expenditure. During first-appeal, the Ld. CIT(A) deleted the addition. 47. Before us, Ld. DR strongly argued that during search proceeding, various documents in the form of loose papers, receipts and cancelled cheques were seized by authorities from which it was deduced that the assessee had taken a loan of Rs. 90 lakh in cash. Ld. DR submitted that the factum of receipt of Rs. 90 lakh is undisputably accepted by assessee though the assessee has projected an unbelievable claim of unauthorized collection-cum-withdrawal of moneys belonging to his partnership firm. Referring to page number 45 of the assessment-order, Ld. DR submitted that the Ld. AO has pointed out several infirmities in the claim of assessee. Ld. DR submitted that the CIT(A) has overlooked those infirmities and merely accepted the version of arguments pleaded by assessee before him. Ld. DR submitted that the CIT(A) has wrongly deleted the addition; his action must be reversed and addition must be upheld. 48. Per contra, the Ld. AR strongly defended the order of first appellate authority. Ld. AR submitted that from very beginning, the assessee had been claiming that he had made unauthorized collection-cum-withdrawals relatable to his partnership firm and when other partners found such state of affairs, they forced the assessee to repay and also furnish security. Ld. AR submitted that other partners of M/s Signature Infrastructure, namely Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 23 of 33 Shri Raj Kumar Khilwani and Shri Vipin Chauhan have also filed a confirmatory letter, jointly signed by them, to the AO which is placed at Page No. 125 of the Paper-Book (filed in another ITAs of revenue relating to penalty-matters u/s 271D and 271E) which confirms such submission of assessee. Ld. AR submitted that the AO has merely disbelieved the submission of assessee and attempted to find infirmities therein rather than understanding the real-true state of affairs submitted by assessee. Drawing our attention to the order of first-appellate authority, Ld. AR submitted that the CIT(A) has given a proper and reasoned consideration to all submissions of assessee, factual as well as legal, and thereafter deleted the addition. Ld. AR also referred to Page No. 82 to 120 of the Paper-Book where a copy of the assessment-order of partnership firm M/s Signature Infrastructure is filed. Ld. AR submitted that the firm has offered undisclosed income relatable to unaccounted cash receipts (Page No. 33 and 37 of the assessment-order / Page No. 115 and 119 of the Paper-Book), part of which were the unauthorized collections made by assessee. Thus, according to Ld. AR, the firm has already paid tax with respect to the unauthorized collections made by assessee. Ld. AR submits that all these facts clearly prove that the assessee has not taken any loan and not paid any interest thereon as claimed by Ld. AO. Hence, according to Ld. AR, the Ld. CIT(A) has rightly and after a due consideration deleted the addition made by AO. 49. We have considered rival contentions and perused the material held on record. On a careful consideration, we note that the assessee has categorically claimed all through before the authorities that he had made unauthorized collections relatable to his partnership firm M/s Signature Infrastructure and this fact is also confirmed by other partners of the firm in a joint letter, copy of which is placed in the Paper-Book. Para No. 2 of the letter clearly vouches this fact. Further Para No. 4 of the letter also confirms that the partners of firm prepared the papers so that an acknowledgement could be taken from assessee and also obtained post-dated cheques as security to ensure the recovery of amount. We also find that it is not the Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 24 of 33 case of Ld. AO that those other partners were summoned / cross-examined which has led to discovery of any infirmity in their joint letter. We further observe that the Ld. AO has simply disbelieved all these factual submissions and made his own interpretation that the assessee must have taken/repaid loan in cash. Thus, we find that the assessee has given sufficient evidences to prove that the receipt of Rs. 90,00,000/- was relatable to unauthorized collections of firm made by assessee and not a loan taken by assessee; therefore there was no outflow of interest as claimed by Ld. AO. Hence the Ld. CIT(A) has rightly deleted the addition which does not warrant any interference from us. We therefore dismiss this ground of revenue. Ground No. 4: 50. This ground relates to the addition of Rs. 50,00,000/- and Rs. 1,50,00,000/- made by Ld. AO on account of unexplained investment in purchase of property. 51. This ground has two parts; we first deal with 1 st part i.e. the addition of Rs. 50,00,000/-. During search-action, the authorities found two cheques each of Rs. 25 lakh issued by “Shrimati The Big Saree Mall” in the name of assessee. When confronted, the assessee submitted that he advanced Rs. 50 lakh by way of loan to Shri Dinesh Lalwani, partner of “Shrimati The Big Saree Mall”. He further stated that Shri Nitin Agarwal has also given similar advance. Thereafter, when the statement of Shri Nitin Agrawal was recorded on 30.01.2014, he stated to have made advance of Rs. 50 lakh to Shri Dinesh Lilwani for purchase of property but the deal was cancelled and Shri Liwani issued two cheques of Rs. 25 lakh each which were also bounced. During post-search enquiries, this issue was against confronted to assessee as well as Shri Nitin Agarwal wherein they reiterated to have paid cash of Rs. 1 crore to Shri Dinesh Lilwani but they also stated that at the time of search, it was by mistake stated that the amount was given as loan whereas it was against the deal of the property from “Shrimati The Big Saree Mall”. Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 25 of 33 The assessee also filed a copy of agreement on stamp paper dated 07.11.2013 with Shri Dinesh Lilwani, wherein Shri Lilwani agreed for repayment of Rs. 1 crore in lieu of cancellation of earlier property deal. The assessee further submitted that the cash payment of Rs. 50 lakh is duly recorded in his cash-book. However, Ld. AO did not accept the submissions of assessee and made addition. 51.1 During first-appeal, the Ld. CIT(A), however, deleted the addition by observing and holding thus: “5.6.4 I have considered the facts of the case, evidences on record and findings of the AO. This is an undisputed fact that Shri P Raju in his statement recorded on oath has stated that he and the appellant has given loan of Rs. 50 lakhs each to Shri Dinesh Lilwani, partner of M/s Shrimati Big Saree Mall without interest. Shri P Raju further submitted that the said loan has not been received back by Shri Nitin Agarwal. Thereafter, statement of Shri Nitin Agarwal was recorded on oath on 30.01.2014 wherein, it was explained that an advance of Rs. 50 lakhs in cash was given to Shri Dinesh Lilwani for purchase of floor adjacent to head office, however, the transaction did not materialized and Shri Dinesh Lilwani gave two cheques of Rs. 25 lakhs each dated 15.12.2013 in the name of Shri P Raju which were also seized as page no 85 & 87 of LPS-1. Shri P Raju deposited the cheques in his bank and which were dishonored with reason "payment stopped by drawer". The return memo was also seized during the course of search vide page no 86 of LPS-1. Shri Nitin Agarwal, thereafter, moved to court against M/s Shrimati The Big Saree Mall and filed complaint u/s 200 of CRPC offence u/s 138 of NI Act 1881 r.w.s 420 of IPC 1860. The case of Shri Nitin Agarwal was fixed in court on 22.08.2017 vide notice no MCRC/10603/2017 dated 27.07.2017 and the same is pending in Court. 5.6.5 Nonetheless, the appellant before me as well as before AO has claimed that the amount was given in cash which is duly recorded in the books of account and thus the same is out of disclosed sources. The assessee has submitted copy of ledger account of Big Saree Mall and copy of the cash book of the relevant days in which adequate cash balance is available and the payment made to Big Saree Mall is duly recorded. The claim of the assessee that the amount given is appearing in the cash book produced by the assessee has also not been disputed by the AO. The genuineness of the credit entries mentioned in the cash chart has also not been doubted. The AO has however held the cash book to be unreliable on the basis that certain incriminating documents are seized which are not found recorded in the cash book. He has further doubted the source on account of change in version of the assessee regarding the purpose for which the amount was given and also the source of cash which was stated by the assessee during recording of statement as withdrawals from the bank account and during assessment proceedings as out of available cash. On care full consideration of the observations of the AO Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 26 of 33 it is seen that the ambiguity regarding the actual purpose of giving of loan is not relevant, and the only issue which needed to be decided was whether the source of the payment was explained. As regards the difference in the explanation regarding source it is seen that the available cash in hand can also be out of withdrawals from bank and not much weightage can be given in the change of source mentioned during assessment proceedings and during the recording of statement u's 131. As regards non recording of certain expenses/payments in the books, the argument of the assessee that unrecorded expenses(if any) have been separately added and these additions cannot result in disbelieving the payments recorded in the books produced carries weight. It is seen that the AO has not disputed the source of cash recorded in the cash book and in such a situation doubting the application of the duly explained cash is not justified is also seen that of c immediately price to the payment under consideration relates to cash withdrawn from the banks, receipt of income, and amounts received from Associated concerns which are also seed as 153A by the same AD Addition (if any) was required to be made for any unexplained e appearing in the cash book produced. Based on the above discussions it is held that the AO was not justified in making addition on account of unexplained investment in purchase of property. Therefore, addition made by the AO amounting to Rs.50,00,000/- is Deleted. Therefore, appeal on this ground is Allowed.” 51.2 Ld. AR also pointed out that the case of Nitin Agarwal involving the same issue, is already decided by ITAT, Indore in IT(SS)A No. 182/Ind/2019 order dated 25.03.2021 wherein the Hon’ble Co-ordinate Bench has deleted the addition of Rs. 50,00,000/- made by Ld. AO. Ld. AR submitted that the said decision being on the same facts is directly applicable. 51.3 After a careful consideration, we observe that the Ld. CIT(A) has made a vital finding that the advance of Rs. 50 lakh is duly recorded in the cash- book of assessee and based thereon concluded that no addition can be made. We further observe that an identical addition of Rs. 50 lakh made by authorities in the hands of Nitin Agarwal emanating from the same set of facts stands deleted by Hon’ble Co-ordinate Bench. Ld. DR, though vehemently supported the assessment-order but could neither contradict the findings made by Ld. CIT(A) nor the applicability of the aforesaid decision of Hon’ble ITAT in Nitin Agarwal. Therefore, in such circumstances, we are inclined to uphold the view taken by Ld. CIT(A) whereby he has deleted the addition of Rs. 50,00,000/- made by Ld. AO. Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 27 of 33 52. Now we take up the 2 nd part of ground i.e. the addition of Rs. 1,50,00,000/-. During search-action, the authorities found two types of agreements made by assessee for purchase of a residential house at Plot No. New-41, Shree Golden City, Village – Jatkhedi, Tehsil Huzur, Bhopal, one for a consideration of Rs. 1,61,00,000/- and other for Rs. 3,11,00,000/-, which were duly signed by the sellers Shri Amarpreet Singh Chawala & Others and by the assessee as purchaser. 52.1 During assessment-proceeding, when the Ld. AO show-caused the assessee as to difference in the consideration shown by those agreements, the assessee filed following reply which is re-produced on Page No. 39 of assessment-order: "As regards purchase of house at Golden City it may be mentioned that the said house has been purchased by the assessee for Rs. 1,61,00,000/-. The said property has been registered in the favour of the assessee on 08.03.2014 on which stamp duty expenses of Rs. 1296490/- were incurred. It may be mentioned that the market value of the said property as per registrar guidelines is also 1,61,00,000/- only. Thus the total cost of the house is Rs. 1,73,96,490/- which is duly recorded in the books of account and copy of the ledger account containing details of the payments made is enclosed. It may be mentioned that the entire payment has been made by cheque. In addition to above the assessee has also incurred an expense of Rs. 12405456/-on interior and furnishing of the said house which is duly recorded in the books of account. Copy of ledger account of renovation is enclosed. Thus the total expense incurred by the assessee on the house is Rs. 28505456/- As regards the agreement of Rs. 3,11,00,000/- referred to in your notice it may be mentioned that the said agreement was made under the impression that the building being constructed is a commercial building. Reference in this regards is drawn to Para 3A of the said agreement the content of which is reproduced herein below for your ready reference: "that the total sale consideration in respect of the said commercial building shall be Rs. 3,11,00,000/-.." Further the consideration agreed upon was inclusive of interiors and furnishing which was to be done by the sellers and on their expressing an inability was ultimately got done by the assessee himself. Reference in this regards is drawn to Para 3E of the agreement which states "That in the eventuality of any default in the aforesaid payments installment the persons of the first part shall have the right to stop the renovation work..." Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 28 of 33 It may be mentioned that no evidence has been found during the course of search or after words during the post search enquiries to substantiate that the assessee has made any unrecorded payment to the said builder and in absence of any such material any presumption of unrecorded cash payment is not justified. As regards cash payment of Rs. 20,50,000/- it may be mentioned that the said amount was paid as an advance for procurement of certain material of renovation which was refunded to the assessee when it was agreed that the renovation will be done by the assessee himself. The details of payment made and refund received is easily verifiable from the cash book a copy of which is enclosed here with". 52.2 However, the Ld. AO rejected the reply of assessee and made an addition of Rs. 1,50,00,000/- treating the difference of Rs. 3,11,00,000/- and Rs. 1,61,00,000/- as unexplained investment. The observations and findings made by Ld. AO in this regard are extracted below: “The submission of the assessee is considered carefully. However the same is not acceptable for the following reasons: (1) The assessee's contention that the said agreement of Rs 3.11 Crores was made under the impression that the building being constructed is a commercial building is not acceptable as the assessee himself is a renowned builder and he must be aware and having knowledge of nature of building to be purchased by him. Further, this agreement was duly signed by all the parties and also contains the schedule of payment earlier made and to be made subsequently. Therefore assessee's this contention is not acceptable. (ii) The assessee's contention that he has incurred an additional expenses of Rs 1,24,05,456/- on interior and furnishing of the said house and thus the total expenses incurred by him on this house is Rs 2,85,05,456/-, is also not relevant here as the issue involved is regarding difference in valuation mentioned in the two different agreements for sale of same property. (iii) The assessee's contention that the consideration of Rs 3.11 Crore was agreed upon inclusive of interior and furnishing which was to be done by the sellers, is not acceptable. The enquiry was conducted by the DDIT(Inv.) to ascertain the veracity of the amendment to agreement' dated 14th Aug 2013 showing the sale value as Rs. 1.61 crore which was produced by Shri Amarpreet Singh Chawla. This agreement is on a stamp paper bearing no. Z 628112 of Rs. 100/- denomination, which was issued on 14.08.2013 by the stamp vendor Shri Vishwanath Agrawal in the name of Shri Amarpreet Singh Chawla and others. The copy of register of stamp vendor bearing the details of sale of this stamp paper was obtained from Registrar office, Bhopal. It was noticed that the register did not reflect the name of Shri Amarpreet Singh Chawla or P. Raju against the stamp paper no. Z 628112 of Rs. 100/-. Thereafter, enquiry was conducted from stamp vendor Shri Vishwanath Agrawal and his statement on oath was recorded by DDIT (Inv.). He stated Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 29 of 33 that the stamp paper was sold to Shri Suresh Kumar Deshmukh, Advocate. He informed that he did not write the name of the purchaser Shri Suresh Kumar Deshmukh, Advocate on the back of the stamp paper at the time of the sale of stamp paper. He had not sold the stamp paper to Shri Amarpreet Chawla or Shri P. Raju. On the basis of investigation conducted by office of DDIT(Inv.) to examine the genuineness of the agreement dated 14.08.2013 showing the agreed sale value Rs. 1.61 Cr. produced by Shri Amrapreet Singh Chawla, it is clear that the stamp paper was not purchased by Shri Amarpreet Singh Chawla. It is gathered that as per rules and regulations framed by the government for the sale of stamp papers, the name of the person purchasing the stamp paper is to be mentioned on the register maintained by the stamp vendor as well as on the back of the stamp paper. It appears that Shri Amarpreet Singh Chawla/Shri P. Raju has purchased the back dated stamp paper from the market and got it printed the agreement showing less value i.e. Rs. 1.61 crore and signed by relevant parties for the sake of their vested interest to hide the real price of the property. It appears that the seized agreement at page nos. 24 to 26 showing price at Rs. 1.61 crore was signed simultaneously with that of agreement found at pages no. 115-116 showing the price Rs. 3.11 crore. The real price of the deal shall be Rs. 3.11 crore whereas it would have been intended by the parties to declare the price before Registrar Office and Income Tax Department as Rs. 1.61 crore. When enquired about the signing of the two types of agreements for the same house, Shri Chawla stated that the reason of signing new agreement was that he was not able to do the renovation work as per the earlier agreement therefore the price of the house was reduced. This contention appears to be an afterthought. It is nowhere mentioned in the agreement for Rs. 3.11 crore that the renovation work will be done by the sellers i.e. Shri Amarpreet Chawla and other. It is not understandable why any renowned builder having huge experience like Shri P. Raju would get his home renovated and furnished by some other person, who is an inexperienced salaried employee. Also, the price claimed to be agreed for furnishing is too high (Rs. 3.11 Cr. - Rs. 1.61 Cr. Rs. 1.50 Cr) for a house having built up area of less than 5000 sq ft. It is almost equal to the claimed sale price of the house. It was also pertinent to mention here that if the payment of Rs. 1.5 crore was for renovation work, which is in the nature of contract, then TDS as per the provisions of the Income-tax Act was also required to be deducted. It is apparent from the agreement itself that Rs. 20.50 lacs was paid in cash and Rs. 4.5 lacs was paid earlier through cheque. However, no TDS was deducted on the same amount. Thus, it is clear that the total payment was for the purchase of house not for the renovation work as claimed. It is pertinent to mention here that during the course of search action at the residence of the assessee he was confronted with the agreement found as per page no. 115-116 of LPS-1 showing purchase consideration at Rs. 3.11 crore. In response, he stated as under:- "These are Agreement made with Shri Bobby Chawla & some advance has been paid to him by cheque Rs. 4.5 lacs out of Rs. 286 lacs for Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 30 of 33 Golden City Bunglow-A-41, for purchase of the same. The Source of which are from my withdrawals from personal bank account (HDFC). All the other payments are made also through cheques. Remaining balance will also be paid through bank loan”. In view of the above, it is clear that at the time of search, the assessee did not deny this agreement showing purchase consideration at Rs. 3.11 crore, instead he accepted the sale consideration mentioned in this agreement and stated that the same have been paid through cash, cheques and remaining will be paid through bank loan. Thus it is clear that the argument of excess payment of Rs. 1.5 crore for renovation work is an afterthought. In view of the above facts, the difference amount of Rs 1.50 Crores is treated as unexplained investment of the assessee and added to the total income of the assessee for A.Y. 2014-15.” 52.3 During first-appeal, Ld. CIT(A) deleted the impugned addition mainly on following reasons: (i) The seller has confirmed in his statement to have sold the impugned property to assessee for Rs. 1.61 crore. (ii) The market value of the property as per circle rates fixed by collector was Rs. 1.61 crore. (iii) The sale-deed of property was registered at Rs. 1.61 crore. (iv) The total payment recorded in the books of assessee was Rs. 1.61 crore. (v) No evidence was found during search or even assessment proceeding to indicate any payment over and above Rs. 1.61 crore. (vi) The consideration of Rs. 3.11 Crore was agreed as inclusive of furnishing and interior work but when the seller did not carry out the same, the assessee himself got the renovation and interior work and spent over Rs. 1 crore (exact amount is Rs. 1,24,05,456/-). The change in value was on account of renegotiation and the copy of revised agreement (in fact, amendment-agreement dated 14.08.2013) was duly filed to AO during assessment-proceeding. The amendment- Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 31 of 33 agreement is on a stamp-paper issued in the name of advocate and not in the name of assessee; although it may be a procedural irregularity but cannot make the amendment-agreement non-genuine. 52.4 Before us, Ld. DR representing the revenue made strong submissions defending the assessment-order and opposing the order of first appellate authority. He submitted that during search action, the authorities have seized two types of agreements, one showing consideration of Rs. 3.11 crore and other showing at Rs. 1.61 crore. He submitted that both of these agreements were found from possession of assessee and this fact itself is sufficient to demonstrate that the assessee entered the agreement of Rs. 1.61 crore for income-tax purpose but the actual consideration was Rs. 3.11 crore. He submitted that the motive of assessee in entering into such agreements is self-proved and does not require any further proof from authorities. He submitted that the Ld. CIT(A) has simply relied upon and recorded the arguments/pleadings made by assessee before him and given relief, which is wrong. Ld. DR prayed us to reverse the action of Ld. CIT(A) and uphold the order of assessing officer. 52.5 Per contra, Ld. AR made vehement submission on the lines of reasoning as already considered by Ld. CIT(A). 52.6 We have considered rival submissions of both sides and perused the material held on record. After a careful consideration, we find merit in various contentions raised by assessee. Firstly, we find that although there were two types of agreements but the agreement showing consideration of Rs. 3.11 Crore was inclusive of furnishing and interior work and another agreement showing the consideration of Rs. 1.61 was for the reason that the seller did not carry out the furnishing and interior work. For this reason, the assessee also made an amendment-agreement dated 14.08.2013. It is also on record that the assessee himself carried out renovation and interior work and spent Rs. 1,24,05,456/- which is duly recorded in his books of account. Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 32 of 33 Secondly, we observe that the seller has been examined by the AO who has stated on oath to have sold for Rs. 1.61 crore. Thirdly, we find that the market value of the property as per circle rates fixed by collector was Rs. 1.61 crore and the sale-deed is also registered at Rs. 1.61 crore and stamps duty is paid accordingly. Fourthly, we note that no evidence was found during search or assessment proceeding to indicate any payment of on- money except the aforesaid two types of agreements which again stand adequately explained by the assessee. Thus, looking into all these facts and evidences, we believe that the Ld. CIT(A) has taken a proper and legitimate view that the addition of Rs. 1.50 crore made by Ld. AO was not justified in the present case and accordingly he was justified to grant relief to assessee. We agree to the decision taken by Ld. CIT(A) and uphold the deletion of addition made by him. Being so, this ground of revenue is also dismissed. 53. In view of above discussions, the Revenue’s ITA for AY 2014-15 is dismissed. 54. Resultantly, all ITAs of Revenue are dismissed and the assessee’s ITA is allowed for statistical purpose. Order pronounced as per Rule 34 of I.T.A.T. Rules, 1963 on 31/03/2023. Order pronounced in the open court on ....../....../2023. Sd/- sd/- (MADHUMITA ROY) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक /Dated :31.03.2023 Patel/Sr. PS Shri Raju Perumal IT(SS)A No. 217 to 219 & 198/Ind/2019 Assessment years 2011-12, 2012-13 & 2014-15 Page 33 of 33 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore 1. Date of taking dictation 5.1.23 2. Date of typing & draft order placed before the Dictating Member 5.1.23 3. Date on which the approved draft comes to the Sr. P.S./P.S. 5.1.23 4. Date on which the approved draft is placed before other Member 5. Date on which the fair order is placed before the Dictating Member for pronouncement 6. Date on which the file goes to the Bench Clerk 7. Date on which the file goes to the Head Clerk 8. Date on which the file goes to the Assistant Registrar for signature on the order 9. Date of dispatch of the Order