Appeal Details
Counselvise Citation
[2015] 122 COUNSELVISE.COM (IT) 1010 (ITAT-INDORE)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
2 year(s) 4 month(s) 20 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
18-08-2015
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
DB
Assessment Year
2004-2005
Appeal Filed On
28-03-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.(SS).A. NO. 47 TO 53/IND/2013 A.Y. : 2004-05 TO 2010-11 SHRI ASHOK KUMAR RAI, ACIT, AH-14, RAJIV NAGAR, VS. 2(1), BHOPAL BHOPAL APPELLANT RESPONDENT PAN NO. ADUPR7278B I.T.(SS).A. NO. 66 TO 72/IND/2013 A.Y. : 2004-05 TO 2010-11 ACIT, SHRI ASHOK KUMAR RAI, 2(1), VS. AH-14, RAJIV NAGAR, BHOPAL BHOPAL APPELLANT RESPONDENT ASSESSEE BY : SHRI S. S. DESHPANDE, C. A. DEPARTMENT BY : SHRI RAJIV VARSHANE, CIT DR -: 2: - 2 DATE OF HEARING : 21.07.2015 DATE OF PRONOUNCEMENT : 18 .08.2015 O R D E R PER BENCH THESE SEVEN CROSS APPEALS ARE DIRECTED AGAINST THE ORDER OF CIT(A)-I, BHOPAL, DATED 14.01.2013 FOR THE ASSES SMENT YEARS 2004-05 TO 2010-11. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL AND DERIVES INCOME FROM SALARY AND INCOM E FROM OTHER SOURCES INCLUDING INTEREST. THE ASSESSEE HAS FURNISHED THE ORIGINAL RETURN OF INCOME FOR ASSESSMENT YEARS 2004-05 TO 2008-09 U/S 139 OF THE INCOME-TAX ACT, 1961. THE SE ARCH AND SEIZURE OPERATION U/S 132(1) WAS CONDUCTED ON 23.07 .2009. ACCORDING TO THE NOTICE U/S 153A, WHICH WAS ISSUED ON 15.04.2011 REQUIRING THE ASSESSEE TO FURNISH THE RE TURNS U/S 153A OF THE ACT FOR ASSESSMENT YEARS 2004-05 TO 200 9-10. IN RESPECT OF ASSESSMENT YEARS 2004-05 TO 2009-10, THE RETURNS -: 3: - 3 WERE FILED ON 03.08.2011 AND IN RESPECT OF ASSESSME NT YEAR 2010-11, THE ASSESSEE FURNISHED THE INCOME DECLARIN G INCOME OF RS. 5,35,680/-. AFTER ISSUING NOTICES U/S 143(2) AND 142(1) AND CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, TH E AO COMPLETED THE ASSESSMENTS FOR ASSESSMENT YEARS 2004 -05 TO 2010-11 ON 09.12.2011. THE POSITION OF ORIGINAL RET URNS FILED AND RETURNS FILED U/S 153A AND ASSESSMENTS MADE CAN BE SUMMARIZED AS UNDER :- A.Y. DATE OF FILING OF RETURN U/S 139 INCOME DECLARED DATE OF FILING OF RETURN U/S 153A INCOME DECLARED IN RETURN U/S 153A ASSESSED INCOME 2004-05 13.07.2004 1,24,710 03.08.2011 1,24,710 4,62,710 2005-06 22.07.2004 1,19,228 03.08,2011 1,19,228 5,4 1,230 2006-07 28.07.2006 1,31,564 03.08.2011 1,31,564 4,8 7,300 2007-08 26.07.2007 2,29,750 03.08.2011 2,29,750 9,8 0,080 2008-09 31.07.2008 1,66,330 03.08,2011 4,56,330 27,60,130 2009-10 - - 03.08.2011 6,24,450 24,67,219 2010-11 03.08.2011 5,35,680 - - 19,37,490 3. THE MATTER CARRIED TO LD. CIT(A) AND THE LD. CIT(A) HAS PARTLY ALLOWED THE APPEAL BY OBSERVING AS UNDER :- 6.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND FACTS OF THE CASE. THOUGH THE APPELLANT WAS REGULAR INCOME TAX ASSESSEE SINCE ASSESSMENT YEAR 2000-01, BUT THE APPELLANT HAD NOT -: 4: - 4 FURNISHED ANY EVIDENCE BEFORE THE AO OR DURING THE APPELLATE PROCEEDINGS REGARDING THE SOURCE OF AVAILABILITY OF CASH OF RS. 75,000/- SHOWN AS CASH IN HAND AS ON 01.04.2003. AS OBSERVED BY THE AO, HE HAD NOT SHOWN ANY WITHDRAWALS FOR HOUSE HOLD EXPENSES IN THESE CASH BOOKS. IT IS ALSO NOTICED TH AT THE APPELLANT WAS REGULARLY MAINTAINING BANK ACCOUNTS IN A NUMBER OF BANKS SUCH AS AXIS BANK, BHOPAL, NAGRIK BANK, BANK OF INDIA, CANARA BANK, STATE BANK OF INDIA, STATE BANK OF INDORE AND UCO BANK. THE SOURCES OF INCOME IN EARLIER YEARS WERE FROM SALARY AND HE HAD SHOWN INVESTMENT IN FDRS OF RS. 3,69,7765/- AS WELL AS IN PURCHASE OF THE HOUSE FOR WHICH HE HAD BEEN PAYING INSTALLMENTS. THEREFORE, THE APPELLANT FAILED TO ADDUCE ANY COGEN T EVIDENCE THAT HE WOULD HAVE CASH IN HAND OF RS. 75,000/- AFTER MEETING HOUSE HOLD EXPENSES AND OTHER INVESTMENTS. IT IS NOTICED THAT THE APPELLANT HAD SHOWN CASH IN HAND OF RS. 75,000/- IN ORDER TO EXPLAIN THE SUBSEQUENT DEPOSITS OF CASH IN BANK ON -: 5: - 5 06.06.2003 OF RS. 60,000/-. THEREFORE, CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CAS E, I AM OF THE VIEW THAT IT WOULD BE REASONABLE TO ESTIMATE AN AMOUNT OF RS. 15,000/- IN CASH ONLY AS SAVINGS OUT OF EARLIER YEARS INCOME OF THE APPELLAN T. THUS, THE APPELLANT FAILED TO EXPLAIN SATISFACTORIL Y THE SOURCE OF CASH OF RS. 60,000/-. ACCORDINGLY, ADDITI ON TO THE EXTENT OF RS. 60,000/- IS CONFIRMED OUT OF T OTAL ADDITION OF RS. 75,000/-. THUS, THE APPELLANT GETS A RELIEF OF RS. 15,000/-. 4. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSEE HAS TAKEN THE CONTENTION THAT THE ASSESSEE IS A REGULAR INCOME TAX ASSESSEE SINCE ASS ESSMENT YEAR 2000-01 AND FOR THE PURPOSE OF PREPARING CASH BOOK AN OPENING BALANCE AS ON 1.4.2003 OF RS. 75,000/- IS T AKEN ON ESTIMATE BASIS, WHICH IS NOT UNREASONABLE. THE LD. AUTHORIZED REPRESENTATIVE FURTHER SUBMITTED THAT DURING THE CO URSE OF SEARCH, CASH IN HAND OF RS. 1,14,850/- WAS FOUND IN -: 6: - 6 POSSESSION OF THE ASSESSEE. THEREFORE, OPENING CASH BALANCE AS ON 31.3.2003 CANNOT BE TAKEN AS RS. 75,000/-. WE FI ND THAT THE LD. CIT(A) AND THE AO HAS OBSERVED THAT THE AS SESSEE IS FILING THE RETURN OF INCOME, BUT THE ASSESSEE HAS N OT MADE ANY WITHDRAWAL FOR HOUSE HOLD EXPENSES AND SHOWN IN HIS CASH BOOK. THE ASSESSEE WAS REGULARLY MAINTAINING THE B ANK ACCOUNT IN NUMBER OF BANKS, SUCH AS AXIS BANK, BHOP AL NAGRIK BANK, BANK OF INDIA, CANARA BANK, STATE BANK OF INDIA, STATE BANK OF INDORE AND UCO BANK. THE SOURC ES OF INCOME IN EARLIER YEARS WERE FROM SALARY AND HE HAD MADE INVESTMENT IN FDR AT RS. 3,69,765/-. THEREFORE, THE ASSESSEE FAILED TO PROVE THAT HE HAD RS. 75,000/- CASH IN HA ND AFTER MEETING HOUSE HOLD EXPENSES. THEREFORE, THE LD. CIT (A) HAS ESTIMATED RS. 15,000/- CASH IN HAND AS REASONABLE O N ESTIMATE BASIS AND HE CONFIRMED THE ADDITION OF RS. 60,000/-. IN OUR OPINION, THE LD. CIT(A) IS JUSTIFIED IN HIS ACTION. 5. DURING THE COURSE OF HEARING, THE LD. AUTHORIZED REPRESENTATIVE COULD NOT PRODUCE ANY CONTRARY EVIDE NCE AGAINST THE FINDING OF LD. CIT(A). THEREFORE, WE AR E OF THE VIEW -: 7: - 7 THAT THE LD. CIT(A) IS JUSTIFIED IN HIS ACTION AND WE DISMISS THE ASSESSEES APPEALS AS WELL AS DEPARTMENTS APPEALS. GROUND NO. 4 FOR A.YS. 2004-05 TO 2008-09, GROUND NO. 3 FOR A.Y. 2005-06 TO 2007-08 AND 2008-09, AND GROUND NO. 6 FOR ASSESSMENT YEAR 2010-11 : 6. ALL THESE GROUNDS ARE AGAINST THE ADDITION FOR THE UNEXPLAINED HOUSE HOLD EXPENSES, WHICH ARE AS UNDER :- A.Y. AMOUNT (RS.) 2004 - 05 1,20,000/ - 2005 - 06 1,50,000/ - 2006 - 07 1,80,000/ - 2007 - 08 2,10,000/ - 2008 - 09 2,40,000/ - 2009 - 10 2,70,000/ - 2010 - 11 3,00,000/ - 7. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO FURNISH DETAILS OF FAMILY PAR TICULARS, THEIR ACTIVITIES, HOUSE HOLD EXPENSES AND SOURCES T HEREOF. THE ASSESSEE WAS LIVING IN JOINT FAMILY WITH HIS BROTHE R IN HIS OWN HOUSE. THE ASSESSEE IS HAVING AGRICULTURAL LAND, TH EREFORE, HE HAD TAKEN THE CONTENTION THAT HE HAS NOT PURCHASED ANY FOODGRAINS FROM OUTSIDE. THE AO CONSIDERING THE REP LY WAS OF -: 8: - 8 THE VIEW THAT THE ASSESSEE HAS NOT SHOWN ANY EXPENS ES ON ELECTRICITY, WATER CHARGES, MAINTENANCE OF HOUSE, M ILK, VEGETABLES AND FRUITS, MEDICINES, CLOTHES, ATTENDIN G SOCIAL FUNCTIONS, EXPENDITURES ON ENTERTAINMENT ETC. CONSI DERING THE LIFE STYLE AND STANDARD OF LIVING, THE AO HAS ESTIM ATED THE HOUSE HOLD EXPENSES AT RS. 1,20,000/- FOR ASSESSMEN T YEAR 2004-05, AT RS. 1,50,000/- FOR ASSESSMENT YEAR 2005 -06, AT RS. 1,80,000/- FOR ASSESSMENT YEAR 2006-07, RS. 2,1 0,000/- FOR ASSESSMENT YEAR 2007-08, RS. 2,40,000/- FOR ASS ESSMENT YEAR 2008-09, RS. 2,70,000/- FOR ASSESSMENT YEAR 20 09-10 AND RS. 3,00,000/- FOR ASSESSMENT YEAR 2010-11. 8. THE MATTER CARRIED TO LD. CIT(A). THE LD. CIT(A) CONFIRMED THE ADDITIONS. 9. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED BEFORE THAT THE ASSESSEE IS LIVING IN JOINT FAMILY ALONGWI TH HIS BROTHER HAVING COMMON KITCHEN IN SELF OWNED HOUSE AND ASSES SEE WAS NOT MAINTAINING ANY VEHICLE. THE ASSESSEE AND HIS W IFE BOTH ARE WORKING AND ASSESSEE WAS HAVING SUBSTANTIAL AGR ICULTURAL LAND. THEREFORE, THE ASSESSEE HAS NOT TO INCUR ANY EXPENDITURE -: 9: - 9 FOR HOUSE HOLD EXPENSES. THEREFORE, ALL THE ADDITIO NS MAY BE DELETED. 10. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. THE ASSESSEE HAD NOT SHOWN ANY AMOUNT OF WITHDRAWALS FOR MEETING HIS HOUSE HOLD EXPENSES FRO M HIS DECLARED SOURCES OF INCOME. THE ASSESSEE WAS REQUIR ED TO INCUR EXPENSES ON ELECTRICITY, WATER CHARGES, MAINT ENANCE OF HOUSE, MILK, VEGETABLES AND FRUITS, MEDICINES, CLOT HES, ATTENDING SOCIAL FUNCTIONS, EXPENDITURES ON ENTERTA INMENT ETC., BUT HE HAS NOT SHOWN ANY EXPENDITURE ON ANY OF THE ABOVE HEADS. THE ASSESSEE CLAIMED THAT HIS WIFE AND HIS F ATHER WERE HAVING AGRICULTURAL INCOME, BUT THE ASSESSEE DID NO T FURNISH ANY EVIDENCE REGARDING THE AMOUNT OF INCOME RECEIVE D FROM THE ALLEGED AGRICULTURAL LAND OWNED BY THEM. THE AS SESSEE HAS ALSO NOT GIVEN ANY FIGURE OF THE AMOUNT OF HOUSE HO LD EXPENSES INCURRED BY HIM AND SPECIFIC SOURCES THEREOF. THE A O ESTIMATED THE HOUSE HOLD EXPENSES FROM RS. 10,000/- TO RS. 25,000/- PER MONTH FROM ASSESSMENT YEAR 2004-05 TO 2010- 11, WHICH IN OUR VIEW IS FAIR AND REASONABLE. OUR I NTERFERENCE IS NOT CALLED FOR. SINCE THE ASSESSEE FAILED TO FUR NISH ANY -: 10: - 10 SATISFACTORY EXPLANATION/EVIDENCE REGARDING SOURCES OF THE AMOUNTS UTILIZED FOR HOUSE HOLD EXPENSES, THE ADDIT IONS ON ACCOUNT OF UNEXPLAINED HOUSE HOLD EXPENSES MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) A T RS. 1,20,000/- FOR ASSESSMENT YEAR 2004-05, AT RS. 1,50 ,000/- FOR ASSESSMENT YEAR 2005-06, AT RS. 1,80,000/- FOR ASSE SSMENT YEAR 2006-07, RS. 2,10,000/- FOR ASSESSMENT YEAR 20 07-08, RS. 2,40,000/- FOR ASSESSMENT YEAR 2008-09, RS. 2,7 0,000/- FOR ASSESSMENT YEAR 2009-10 AND RS. 3,00,000/- FOR ASSESSMENT YEAR 2010-11 ARE HEREBY CONFIRMED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED ON THESE GROUNDS. GROUND NO. 5 ( A.YS.2004-05 & 2008-09), GROUND NO. 4 ( A.YS. 2005-06 TO 2007-08 AND 2009-10) AND GROUND NO . 7 ( A.Y.2010-11): 12. THE AO HAS MADE THE ADDITIONS ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN THE BANK ACCOUNTS MAIN TAINED BY THE ASSESSEE AS UNDER :- -: 11: - 11 A.Y. AMOUNT (RS.) 2004 - 05 1,43,000/ - 2005 - 06 2,72,000/ - 2006 - 07 1,69,000/ - 2007 - 08 3,88,245/ - 2008 - 09 2,45,000/ - 2009 - 10 1,37,000/ - 2010 - 11 1,17,000/ - 13. DURING THE ASSESSMENT PROCEEDINGS, ON VERIFICATION OF THE BANK ACCOUNT, THE AO NOTICED THAT THE ASSESSEE HAS DEPOSITED CASH AMOUNT IN VARIOUS BANKS IN VARIOUS Y EARS. WHEN THE ASSESSEE WAS ASKED TO FURNISH THE EVIDENCE REGARDING SOURCES OF THOSE AMOUNT IN CASH DEPOSITED IN THE BANK ACCOUNT, THE ASSESSEE SUBMITTED BEFORE THE AO THAT THESE AMOUNTS WERE DEPOSITED OUT OF CASH AVAILABLE AS SHOWN IN CASH BOOK PREPARED FOR THIS PERIOD. THE AO DID N OT ACCEPT THE SUBMISSION OF THE ASSESSEE ON THE GROUND THAT T HE BOOKS OF ACCOUNT PREPARED BY THE ASSESSEE AFTER THE DATE OF SEARCH WAS DEFECTIVE AND NOT RELIABLE AND, ACCORDINGLY, TH E AO HAS MADE THE ADDITIONS AS UNEXPLAINED CASH DEPOSITS IN RESPECTIVE ASSESSMENT YEARS. -: 12: - 12 14. THE MATTER CARRIED TO LD. CIT(A). THE LD. CIT(A) DE LETED THE ADDITIONS BY OBSERVING AS UNDER :- 8.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND FACTS OF THE CASE. I HAVE ALSO PERUSED THE PAPER BOOK CONTAINING CASH BOOK AND LEDGER PREPARED BY THE APPELLANT. IN THE CASH BOOK, THE APPELLANT HAD EXPLAINED THE CASH FLOW I.E. INFL OW AND OUTFLOW OF THE CASH FOR THE PERIODS RELEVANT TO THESE ASSESSMENT YEARS. THE AO HAD POINTED OUT DEFECTS IN THESE CASH BOOKS MAINLY ON THE GROUND THAT THE APPELLANT HAD NOT SHOWN ANY AMOUNT OF WITHDRAWAL FOR HOUSE HOLD EXPENSES. IT IS NOTICED THAT THE AO HAD ALREADY MADE SPECIFIC ADDITIONS ON ACCOUNT OF UNEXPLAINED HOUSE HOLD EXPENSES IN THESE ASSESSMENT YEARS. AN ADDITION OF RS. 60,000/- OUT O F OPENING CASH IN HAND CLAIMED AT RS. 75,000/- HAS BEEN CONFIRMED IN EARLIER GROUND OF APPEAL AND THIS AMOUNT HAS ALSO TO BE CONSIDERED WHILE EXAMINING AVAILABILITY OF CASH FOR DEPOSIT IN BANK. SINCE, TH E AO HAD MADE SEPARATE ADDITION FOR UNEXPLAINED HOUSE -: 13: - 13 HOLD EXPENSES, THE DECLARED INCOME OF THE APPELLANT DURING THESE YEARS OUT OF SALARY INTEREST AS WELL A S ADDITIONAL INCOME DECLARED WAS AVAILABLE WITH THE APPELLANT, OUT OF WHICH SUCH AMOUNTS WERE DEPOSITED IN THE BANK ACCOUNTS. MOREOVER, THERE WAS NO CREDIT ENTRY REGARDING INFLOW OF CASH IN THE CASH BOOK WHICH WAS NOT EXPLAINED OUT OF DECLARED SOURCES OF INCOME. IT IS NOTICED THAT APPELLANT HAD RECEIVED AMOUNTS FROM FOLLOWING INCOME DURING THESE ASSESSMENT YEARS :- PARTICULARS 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 201 0-11 SALARY 1,35,451 1,44,708 1,63,032 1,97,141 2,35,597 3,01,788 4,29,356 TUITION FEES 19,200 3,000 1,00,000 - 51,490 62,000 GAS CLAIM - - 50,000 - - - - MISC. RECEIPTS SHOWN AS INCOME - - - - 2,90,000 2,36,000 92,000 MATURITY OF KVP - - - 80,232 - - 49,173 FROM THE ABOVE, IT IS CLEAR THAT THE APPELLANT HAD SUFFICIENT AMOUNT FROM HIS DISCLOSED SOURCES OF INCOME IN THE RETURNS OF INCOME TO MAKE DEPOSITS IN THE VARIOUS BANK ACCOUNTS, ESPECIALLY WHEN NO -: 14: - 14 WITHDRAWALS FOR HOUSE HOLD EXPENSES WAS MADE OUT OF THESE INCOMES. IN THE CASH BOOKS, THERE WAS NO CREDIT ENTRY OF CASH WHICH WAS FOUND UNEXPLAINED. THEREFORE, THE DEPOSITS IN CASH IN HIS BANK ACCOUNT S STAND EXPLAINED AND, HENCE, NO ADDITION ON THIS ACCOUNT WAS CALLED FOR. ACCORDINGLY, ADDITIONS IN ASSESSMENT YEAR 2004-05 OF RS. 1,43,000/-, IN ASSESSMENT YEAR 2005-06 OF RS. 2,72,000/-, IN ASSESSMENT YEAR 2006-07 OF RS. 1,69,000/-, IN ASSESSMENT YEAR 2007-08 OF RS. 3,88,245/-, IN ASSESSMENT YEAR 2008-09 OF RS. 2,45,245/-, IN ASSESSMENT YEAR 2009-10 OF RS. 1,37,000/-, AND IN ASSESSMENT YEAR 2010-11 OF RS. 1,17,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CAS H DEPOSIT IN BANK ACCOUNTS ARE DELETED. 15. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE LD. CIT(A) HAS DELETED THE ADDITIO NS ON THE GROUND THAT THE AO HAS POINTED OUT THE DEFECTS IN C ASH BOOK. -: 15: - 15 THEREFORE, THE LD. CIT(A) HAS CONFIRMED THE ADDITIO N ON ACCOUNT OF WITHDRAWAL FOR HOUSE HOLD EXPENSES. MORE OVER, ADDITION OF RS.60,000/- WAS ALSO CONFIRMED IN THE O PENING BALANCE. THEREFORE, CONSIDERING THIS AMOUNT, MOREOV ER, THE LD. CIT(A) HELD THAT THE ASSESSEE IS A SALARIED PERSON AS WELL AS ADDITIONAL INCOME DECLARED BY THE ASSESSEE, THIS AM OUNT WAS RECEIVED BY THE ASSESSEE FROM THE FOLLOWING ASSESSM ENT YEARS WHICH IS REPRODUCED IN CIT(A)S ORDER. THEREFORE, H E HAS DELETED THE ADDITIONS. 16. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. SENIOR D.R. COULD NOT PRODUCE ANY CONTRARY EVIDENC E AGAINST THE FINDING OF THE CIT(A). WE ARE OF THE VIEW THAT THE LD. CIT(A) IS JUSTIFIED IN HIS ACTION AND OUR INTERFERENCE IS NOT REQUIRED. THEREFORE, THE APPEAL OF THE DEPARTMENT IS DISMISSE D. GROUND NOS. 5 ( A.Y. 2006-07, 2007-08 & 2009-10) AN D GROUND NO. 6 ( A.Y.2008-09 : 17. THE FOLLOWING ADDITIONS WERE MADE AS UNEXPLAINED INVESTMENT IN FDRS :- -: 16: - 16 A.Y. AMOUNT (RS.) 2006 - 07 6,740/ - 2007 - 08 80,088/ - 2008 - 09 1,50,291/ - 2009 - 10 3,65,321/ - 18. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION, FOLLOWING FDRS WERE FOUND AND SEIZED :- DATE AMOUNT BANK IN THE NAME OF A.Y. 19.01.2006 6,740/ - BHOPAL NAGRIK SAHKARI BANK ASHOK KUMAR RAI (APPELLANT) 2006 - 07 6,740/ - 15.02.2007 60,088/ - BANK OF INDIA ASHOK KUMAR RAI (APPELLANT) 2007 - 08 18.04.2006 1 20,000/ - CENTRAL BANK OF INDIA SMT. SAVITRY DEVI 2007 - 08 80,088/ - 13.03.2008 64,687/ - UCO BANK ASHOK KUMAR RAI (APPELLANT) 2008 - 09 26.03.2008 27,322/ - BHOPAL NAGRIK SAHKARI BANK ASHOK KUMAR RAI (APPELLANT) 2008 - 09 26.03.2008 12,282/ - BHOPAL NAGRIK SAHKARI BANK ASHIKA RAI D/O APPELLANT 2008 - 09 25.10.2007 26,000/ - CENTRAL BANK OF INDIA SMT. SAVITRY DEVI 2008 - 09 25.03.2008 20,000/ - CENTRAL BANK OF INDIA SMT. SAVITRY DEVI 2008 - 09 1,50,291/ - - 20.09.2008 99,764/ - STATE BANK OF INDIA ASHIKA RAI D/O APPELLANT 2009 - 10 20.10.2008 84,357/ - UCO BANK ASHIKA RAI D/O APPELLANT 2009 - 10 20.10.2008 1 84,180/ - UCO BANK ASHIKA RAI D/O APPELLANT 2009 - 10 -: 17: - 17 24.05.2008 84,357/ - UCO BANK ASHITA RAI 2009 - 10 08.12.2008 7,417/ - BHOPAL NAGRIK SAHKARI BANK ANIKA RAI D/O APPELLANT 2009 - 10 18.10.2008 5,246/ - BHOPAL NAGRIK SAHKARI BANK BHOPAL NAGRIK SAHKARI BANK 2009 - 10 3,65,321/ - . 19. 19. THE ASSESSEE WAS REQUESTED TO EXPLAIN THE SO URCE OF INVESTMENTS IN FDR ALONGWITH DOCUMENTARY EVIDENCE. THE ASSESSEE SUBMITTED THAT THESE WERE OLD FDRS RENEWED FROM TIME TO TIME AND ASSESSEE PREPARED CASH CHART AND I NVESTMENT WAS REFLECTED IN THE SAME ALONGWITH SOURCE OF INVES TMENT, BUT THE AO DID NOT CONVINCE WITH THE SUBMISSION OF THE ASSESSEE AND HE HAS MADE THE ADDITION ON ACCOUNT OF UNEXPLAI NED INVESTMENT IN FDRS. 20. THE MATTER CARRIED TO LD. CIT(A) AND THE LD. CIT(A) HAS DELETED THE ADDITIONS BY OBSERVING AS UNDER :- 9. 4 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND FACTS OF THE CASE. ON PERUSAL OF CERTIFICATES F ROM BHOPAL NAGRIK SAHKARI BANK LTD. AND BANK OF INDIA THE POSI TION OF DIFFERENT FDRS FOUND WAS AS UNDER :- -: 18: - 18 A.Y. DATE AMOUNT OF FDR REMARKS 2006 - 07 19.01.2006 6740/ - THIS WAS RENEWAL OF FDR DATED 30.10.2002 OF RS.5,237/- SINCE, THE FDR OF RS. 6,740/- DATED 19.01.2006 FOUN D AND SEIZED WAS MADE ON RENEWAL OF EARLIER FDR DATED 30.10.2002, NO ADDITION IN INVESTMENT OF THIS FDR CAN BE MADE IN A.Y. 2006-07. HENCE, THE ADDITION OF RS.6,740/- IN A.Y. 2006-07 IS DELETED. A.Y. DATE AMOUNT OF FDR REMARKS 2007 - 08 15.02.2007 60,088/ - INITIALLY FDR WAS MADE OF RS.40,000/- ON 04.12.2002 WHICH WAS RENEWED ON 04.12.2004, 04.12.2006 AND AGAIN ON 15.02.2007 AT RS.60,088/- SINCE, THE ABOVE FDR OF RS.60,088/- DATED 15.02.200 7 FOUND AND SEIZED WAS MADE ON ACCOUNT OF RENEWALS OF ORIGINAL FDR DAT ED 04.12.2002 OF RS.40,000/-, NO ADDITION IN INVESTMENT OF THIS FDR CAN BE MADE IN A.Y. 2007-08. HENCE, THE ADDITION OF RS.60,088/- IN A.Y. 2007-08 IS DELETED. HOWEVER, ANOTHER FDR OF RS.20,000/- DATED 18.04.200 6 IN THE NAME OF THE MOTHER OF THE APPELLANT SMT. SAVITRI DEVI FOUND AT HIS RESIDENCE, THE APPELLANT HAD NOT FURNISHED ANY EVIDENCE REGARDING SOURCE OF INVESTMENT MADE IN THIS FDR EXCEPT STATING THAT IT WAS IN THE NAME OF HIS MOTHER, SMT. -: 19: - 19 SAVITRI DEVI. THE FDR WAS FOUND IN POSSESSION OF TH E APPELLANT AND WAS IN THE NAME OF HIS MOTHER AND HE HAD NOT EXPLAINED THE SOURCE OF INVESTMENT, THEREFORE, THE AO WAS JUSTIFIED IN MAKING ADDITION OF RS.20,000/- AS UNEXPLAINED INVESTMENT IN FDR IN THE NAME OF HIS MO THER. IT MAY BE NOTED THAT THE APPELLANT HAD BEEN TAKING FDRS IN THE NAME OF HIS FAMILY MEMBERS SUCH AS IN THE NAME OF HIS DAUGHTERS AND HI S MOTHER. THEREFORE, THE ADDITION OF RS.20,000/- ON ACCOUNT OF UNEXPLAIN ED INVESTMENT IN THIS FDR IN A.Y. 2007-08 IS CONFIRMED. A.Y. DATE AMOUNT REMARKS OF FDR 2008 - 09 26.03.2008 27,322/ - INITIALLY FDR WAS MADE FOR RS. 15,000/- ON 01.11.2000 WHICH WAS SUBSEQUENTLY ON 31.03.2004, 27.03.2005 AND ON 26.03.2008. 2008 - 09 26.03.2008 12,282/ - THIS FDR IN THE NAME OF ASHIDA RAI WAS INITIALLY TAKEN ON 05.12.2001 FOR RS.7,865/ - WHICH WAS RENEWED ON 22.12.2004 AND AGAIN ON 26.03.2008. TOTAL 39,604/ SINCE, THE ABOVE FDRS OF RS.27,322/- DATED 26.03.20 08 AND OF RS. 12282/- DATED 26.03.2008 WERE MADE ON ACCOUNT OF RE NEWALS OF ORIGINAL FDRS DATED 01.11.2000 AND ON 05.12.2001, N O ADDITION IN INVESTMENT OF THESE FDRS CAN BE MADE IN A.Y. 2008-0 9. HENCE, THE -: 20: - 20 ADDITION OF RS.39,604/- ON ACCOUNT OF THESE FDRS IN A.Y. 2008-09 IS DELETED. HOWEVER, THE APPELLANT HAD NOT FURNISHED ANY EVIDEN CE IN RESPECT OF FDR OF RS.64,687/- DATE OF ISSUE 13.03.2008 OF UCO BANK IN THE NAME OF APPELLANT. SINCE, THE APPELLANT FAILED TO EXPLAI N THE SOURCE OF INVESTMENT IN TAKING FDR OF RS.64,687/-, THE ADDITI ON MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THIS FDR OF RS.64,687/- IS CONFIRMED. THERE ARE OTHER TWO FDRS OF RS.20.000/- DATED 25.03.2008 AND OF RS.26,000/- DATED 25.10.2007 IN THE NAME OF THE APPELLANTS MOTHER SMT. SAVITRI DEVI AND THE APPELLANT FAILED T O FURNISH ANY COGENT EVIDENCE TO PROVE THE INVESTMENT MADE IN THESE TWO FDRS. THEREFORE, THE AO WAS JUSTIFIED IN MAKING ADDITION OF RS.46,00 0/- (RS.20,000 + RS.26,000) ON ACCOUNT OF UNEXPLAINED INVESTMENTS IN THESE FDRS AND, THUS, THE ADDITION OF RS.46,0OO/- IS CONFIRMED. ACC ORDINGLY, THE TOTAL ADDITION IN A.Y.2008-09 OF RS. 1,10,687/- (RS.64,68 7 + RS.20,000 + RS.26,000/-) IS CONFIRMED. THUS, THE APPELLANT GETS A RELIEF OF RS.39,604/- (RS. 1,50,291 - RS. 1,10,687) OUT OF AD DITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN FDRS IN A.Y. 2 008-09. A.Y. DATE AMOUNT OF FDR REMARKS -: 21: - 21 2009 - 10 20.09.2008 99,764/ - INITIALLY FDR WAS MADE FOR RS.80,000/- ON 16.12.2004 WHICH WAS RENEWED ON 16.12.2006, 14.07.2008 AND AGAIN ON 20.09.2008. THE INITIAL PAYMENT WAS MADE BY CHEQUE FROM HIS BANK ACCOUNT IN S.B.I. 2009 - 10 20.10.2008 84,357/ - INITIALLY FDR WAS TAKEN FOR RS.54,144/- ON 07.06.2001 FROM UCO BANK WHICH WAS RENEWED ON 29.05.2003, 29.05.2004, 30.6.2005 AND AGAIN ON 20.10.2008. 2009 - 10 V - 20.10.2008 84,180/ - INITIALLY FDR WAS TAKEN FOR RS.54,031/- ON 07.06.2001 FROM UCO BANK WHICH WAS RENEWED ON 29.05.2003, 29.05.2004, 30.6.2005 AND AGAIN ON 20.10.2008 FOR RS.84,180/-. TOTAL 2,68,301/ - SINCE, THE ABOVE FDRS OF RS.84,180/- DATED 20.10.20 08 AND OF RS.84,357/- DATED 20.10.2008 WERE MADE ON ACCOUNT O F RENEWALS OF ORIGINAL FDRS DATED 07.06.2001, NO ADDITION IN INVE STMENT OF THESE FDRS CAN BE MADE IN A.Y. 2009-10. SIMILARLY, IN CASE OF FDR OF RS.99,764/- DATED 20.09.2008, IT WAS INITIALLY TAKEN FOR RS.80, 000/- ON 16.12.2004 BY ISSUE OF CHEQUE FROM THE APPELLANTS BANK ACCOUNT W ITH S.B.I. THEREFORE, NO ADDITION CAN BE MADE ON ACCOUNT OF UNEXPLAINED INVE STMENT IN THESE FDRS IN A.Y. 2009-10. HENCE, THE ADDITION OF RS.2,68.301 /- MADE ON ACCOUNT OF THESE THREE FDRS IN A.Y. 2009-10 IS DELETED. 9.5 IN REGARD TO ADDITION ON ACCOUNT OF FDR OF RS.84,35 7/- DATED 24.05.2008, IT IS FOUND THAT THE AMOUNT WAS WRONGLY MENTIONED AND THE -: 22: - 22 ACTUAL AMOUNT OF THE FDR IN THE NAME OF ASHITA RAI WAS OF RS.68,294/-. IT IS ALSO NOTICED THAT THIS FDR WAS A RENEWAL OF EARL IER FDR TAKEN ON 06.03.2006 OF RS.57,701/- WHICH WAS RENEWED ON 17.0 5.2007 AND AGAIN ON 24.05.2008 FOR RS.68,294/-. HOWEVER, THE APPELLA NT HAD NOT FURNISHED ANY EVIDENCE REGARDING THE SOURCE OF' INVESTMENT IN THE INITIAL PURCHASE OF FDR ON 06.03.2006 FOR RS.57,701/- IN THE NAME OF HI S DAUGHTER ASHITA RAI AND, THEREFORE, ADDITION OF RS.57,701/- IS CALLED F OR IN A.Y.2006-07 AND NO ADDITION WAS REQUIRED IN A.Y.2009-10. THE AO IS, AC CORDINGLY, DIRECTED TO MAKE ADDITION OF RS.57,701/- IN A.Y. 2006-07 AND CO NSEQUENTLY THE ADDITION OF RS.84,357/- MADE IN A.Y. 2009-10 ON ACC OUNT OF THIS FDR IS DELETED. 9.6 AS REGARDS, FDR OF RS.7,417/- DATED 08.12.2008 IN T HE NAME OF THE DAUGHTER OF THE APPELLANT ANIKA RAI, IT IS NOTICED FROM THE CERTIFICATE OF THE BHOPAL NAGRIK SAIL. BANK LTD. THAT INITIAL FDR WAS MADE ON 18.10.2003 FOR RS.5,240/- WHICH WAS RENEWED ON 08.12.2008. BUT THE APPELLANT HAD NOT FURNISHED ANY EVIDENCE REGARDING THE SOURCE OF INVESTMENT MADE IN THIS FDR ON 18.10.2003 FOR RS.5,240/- AND, THEREFOR E, AN ADDITION OF RS.5,240/- IS REQUIRED TO BE MADE IN A.Y.2004-05 ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THIS FDR AND CONSEQUENTLY , ADDITION OF RS.7,417/- ON ACCOUNT OF THIS FDR MADE IN A.Y.2009- 10 IS DELETED. -: 23: - 23 IN THE CASE OF FDR DATED 15.10.2008 OF RS.5,246/- T HE APPELLANT HAD NOT FURNISHED ANY EVIDENCE REGARDING THE SOURCE OF INVE STMENT AND, THEREFORE, THE ADDITION MADE BY THE AO IN A.Y. 2009-10 IS CONF IRMED. IN THE RESULT, THE ADDITIONS ON ACCOUNT OF UNEXPLAI NED INVESTMENTS IN FDRS DURING THE PERIODS RELEVANT TO DIFFERENT ASSESSMENT YEARS IS REQUIRED TO BE MADE AS UNDER:- A.Y. DATE OF FDR AMOUNT REMARKS 2004 - 05 18.10.2003 5,240/ - IN THE NAME OF ANIKA RAI, DAUGHTER OF THE APPELLANT. 5,240/ - 2006 - 07 06.03.2006 57,701/ - IN THE NAME OF ASHITA RAI, DAUGHTER OF THE APPELLANT. 57,701/ - 2007 - 08 18.04.2006 20,000/ - IN THE NAME OF SMT. SAVITRI DEVI, MOTHER OF THE APPELLANT. 20,000/ - ) 2008 - 09 13.03.2008 64,687/ - IN THE NAME OF SHRI ASHOK KUMAR RAI, THE APPELLANT. 2008 - 09 25.03.2008 20,000/ - IN THE NAME OF SMT. SAVITRI DEVI, MOTHER OF THE APPELLANT. 2008 - 09 25.10.2007 26,000/ - IN THE NAME OF SMT. SAVITRI DEVI, MOTHER OF THE APPELLANT. 1,10,687/ - 2009.10 15.10.2008 5,246/ - IN THE NAME OF SHRI ASHOK KUMAR RAI, THE APPELLANT. -: 24: - 24 5,246/ - ACCORDINGLY, THE AO IS DIRECTED TO MAKE ADDITIONS O N ACCOUNT OF UNEXPLAINED INVESTMENTS IN FDRS BY THE APPELLANT OF RS.5,240/- IN A.Y. 2004-05; OF-RS.57,701/- IN A.Y. 2006-07; OF RS .20,000/- IN A.Y. 2007-08; OF RS. 1,10,687/- IN A.Y.2008-09; AND OF R S.5,246/- IN A.Y.2009- 10. THUS, THESE GROUNDS OF APPEALS ARE PA RTLY ALLOWED. 21. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE LD. CIT(A) HAS DELETED THE FDR ON THE GROUND THAT IN ASSESSMENT YEAR 2006-07, THE FDR WAS RENEWE D AND FDR WAS PURCHASED ON 30.10.2002. THEREFORE, THE AMO UNT CANNOT BE ADDED IN ASSESSMENT YEAR 2006-07. SIMILAR LY, THE FDR FOR ASSESSMENT YEAR 2007-08, THE FDR WAS PURCHA SED ON 4.12.2002, THEREFORE, NO ADDITION CAN BE MADE IN AS SESSMENT YEAR 2007-08. SIMILARLY, THE LD. CIT(A) HAS VERIFIE D ALL THE FDRS, WHICH WERE PURCHASED EARLIER AND SUBSEQUENTLY RENEWED. THEREFORE, HE HAS DELETED THE ADDITION. -: 25: - 25 22. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. SENIOR D.R. COULD NOT PRODUCE ANY CONTRARY EVIDENCE AGAINST THE FINDING OF THE LD. CIT(A). THEREFORE, WE CONFIR M THE ACTION OF THE LD. CIT(A). 23. IN THE RESULT, THE DEPARTMENTS APPEALS ARE DISMISS ED. GROUND NO. 3 : 24. THE DEPARTMENTS APPEALS FOR ASSESSMENT YEAR 2008- 09 AND FOR ASSESSMENT YEAR 2010-11, WHEREIN THE LD. CIT(A) HAS DELETED THE ADDITION OF RS.74,563/- IN ASSESSME NT YEAR 2008-09 AND RS. 3,05,490/- FOR ASSESSMENT YEAR 2010 -11. THE AO NOTICED AS UNDER :- 10.2 THE AO NOTICED THAT DURING THE COURSE O F SEARCH, THE FOLLOWING BILLS FOR THE PURCHASE OF JEW ELLERY PERTAINING TO THE PERIODS RELEVANT TO A.YS.2008-09 AND 2010- 11 WERE SEIZED FROM THE RESIDENCE OF THE APPELLANT. A.Y.2008-09 : RS.91,643/- (I) BILL NO.3447 DATED 22.12.2007 OF M/S AGRAWAL JEWELLERS IN THE NAME OF SMT. SUMAN MALVIYA AMOUNTING TO RS.7,105/-. (II) BILL NO.5672 DATED 22.12.2007 OF M/S AGRAWAL -: 26: - 26 JEWELLERS IN THE NAME OF SMT. I SUMAN MALVIYA AMOUNTING TO RS.9,975/-. (III) BILL NO.2605 DATED 22.12.2007 OF M/S AGRAWAL JEWELLERS IN THE NAME OF SHRI ASHOK RAI AMOUNTING TO RS.67,263/-. (IV) BILL NO.6341 DATED 31.01.2008 OF M/S AGRAWAL JEWELLERS IN THE NAME OF SHRI ASHOK RAI AMOUNTING TO RS.7,300/-. V , A.Y.2010-11 : RS.40.500/- BILL NO.906 DATED 12.06.2009 OF M/S SWARN PUSHP IN THE NAME OF MRS. RAI AMOUNTING TO RS.40,500/- THE APPELLANT WAS ASKED TO EXPLAIN THE SOURCE OF IN VESTMENT IN THE PURCHASE OF ABOVE JEWELLERY ALOGNWITH NECESS ARY DOCUMENTARY EVIDENCE. IN RESPONSE, THE APPELLANT SU BMITTED BEFORE THE AO THAT THE AMOUNT APPEARING IN HIS NAME WERE ACCOUNTED FOR AS INVESTMENT AND HAD DULY BEEN SHOWN IN THE CASH BOOK. REGARDING THE BILLS IN THE NAME OF SMT. SUMAN MALVIYA, MOTHER-IN-LAW OF THE APPELLANT, IT WAS SUB MITTED THAT THESE WERE NOT ACCOUNTED. IN RESPECT OF BILL NO. 906 DATED 12.06.2009 OF RS.4 0,500/-, THE APPELLANT SUBMITTED THAT THE PAPER PERTAINS TO MRS. RAI, -: 27: - 27 MOTHER OF THE APPELLANT. IT WAS ALSO SUBMITTED THAT THE BILLS IN THE NAME OF SMT. SUMAN MALVIYA (MOTHER-IN-LAW) AND MRS. RAI (MOTHER) BELONGED TO THEM. THE AO DID NOT ACCEPT TH E SUBMISSION OF THE APPELLANT REFERRING TO THE PROVIS IONS OF SECTION 132(4A) THAT IN CASE OF ANY BOOKS OF ACCOUN TS OR OTHER DOCUMENTS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON DURING THE COURSE OF SEARCH, IT MAY BE PRESUMED THA T THE SAID BOOKS OF ACCOUNTS OR OTHER DOCUMENTS BELONG TO SUCH PERSON. AS PER THE AO, SINCE THE APPELLANT FAILED TO FURNIS H ANY EXPLANATION / EVIDENCE REGARDING THE NATURE AND SOU RCE OF AMOUNT UTILIZED FOR PURCHASE OF JEWELLERY AS APPEAR ING IN THE SEIZED DOCUMENTS, HE TREATED THE INVESTMENT MADE IN THESE BILLS AS UNEXPLAINED INVESTMENT. ACCORDINGLY, THE A O MADE ADDITION OF RS.91,643/- IN A.Y.2008-09 AND RS.40,50 0/- IN A.Y. 2010-11. 25. THE MATTER CARRIED TO LD. CIT(A). THE LD. CIT(A) HA S ALLOWED BY OBSERVING AS UNDER :- 10.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND FACTS OF THE CASE. IT IS NOTICED THAT THE APPELLANT HAD SHOWN INVESTMENT PERTAINING TO BILL NO. 2605 OF RS.67,263/- DATED 22.12.2007 AND BILL NO. 6341 DATE D 31.01.2008 OF RS.7,300/-, WHICH WERE IN THE NAME OF THE -: 28: - 28 APPELLANT IN THE CASH BOOK PREPARED AFTER THE SEARC H. IT MAY ALSO BE RELEVANT TO MENTION HERE THAT DURING THE YE AR, THE APPELLANT HAD DISCLOSED ADDITIONAL INCOME OF RS.2,9 0,000/- AND THAT AMOUNT WAS ALSO AVAILABLE WITH THE APPELLA NT. HENCE, NO ADDITION ON ACCOUNT OF THESE TWO BILLS FO R THE PURCHASE OF JEWELLERY COULD BE MADE. ACCORDINGLY, T HE ADDITION TO THE EXTENT OF RS.74,563/- (RS.67,263 + RS.7,300) IN A.Y. 2008-09 IS DELETED. HOWEVER, AS REGARDS OTHER BILLS IN THE NAME OF SMT. SUMAN MALVIYA (MOTHER-IN-LAW) AND MRS. RAI (MOTHER), IT I S NOTICED THAT THESE PURCHASE BILLS WERE FOUND AT THE RESIDEN CE OF THE APPELLANT AND ONUS WAS ON THE APPELLANT TO EXPLAIN THE SOURCE OF INVESTMENTS IN THE PURCHASE OF JEWELLERY THROUGH THESE BILLS. BUT THE APPELLANT HAD NEITHER DURING ASSESSMENT PRO CEEDINGS NOR IN APPELLATE PROCEEDINGS FURNISHED ANY EVIDENCE REGARDING THE SOURCE OF INVESTMENT MADE IN THE PURCHASE OF JE WELLERY THROUGH THESE BILLS BY THE APPELLANT OR BY THE LADI ES. THEREFORE, THE AO WAS JUSTIFIED IN MAKING ADDITION TO THE EXTENT OF RS. 17,080/- ( RS. 7105/- + RS. 9905/-_ O F THE BILLS FOR JEWELLERY PURCHASE IN ASSESSMENT YEAR 2008-09 A ND RS 40,500/- IN ASSESSMENT YEAR 2010-11. THUS, THE APPE LLANT -: 29: - 29 GETS A RELIEF OF RS. 74,563/- IN ASSESSMENT YEAR 20 08-09 IN THESE GROUNDS. 26. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT THE LD. CIT(A) HAS VERIFIED ALL THE DOCUMENTARY EVIDENCE AND ALSO CONSIDERED THE UNDISC LOSED INCOME AND CONSIDERING ALL THESE FACTS AND SOME OF THE BILLS WERE FOUND NOT IN THE NAME OF THE ASSESSEE. THEREF ORE, THE LD. CIT(A) CONSIDERING ALL HAS DELETED THE ADDITIONS AN D OUR INTERFERENCE IS NOT CALLED FOR. 27. SIMILARLY, FOR ASSESSMENT YEAR 2010-11, THE LD. CIT (A) HAS ALSO DELETED THE ADDITION OF RS. 3,05,490/- CON SIDERING THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF KAILASHBEN MANHARLAL CHAKSHI VS. CIT, (2010) 328 IT R 411 (GUJ) AND DELETED THE ADDITION. WE ARE OF THE VIEW THAT THE ISSUE IN CONTROVERSY IS COVERED BY THE ABOVE MENTIO NED DECISION. GROUND NOS. 7 & 8 FOR ASSESSMENT YEAR 2008-09 AND GROUND NOS. 6 & 7 FOR ASSESSMENT YEAR 2009- 10 AND GROUND NO. 8 FOR ASSESSMENT YEAR 2010-11 : -: 30: - 30 28. THESE GROUNDS ARE AGAINST THE ADDITION ON ACCOUNT O F UNEXPLAINED INVESTMENT IN CONSTRUCTION HOUSE IN ASS ESSMENT YEAR 2008-09 TO 2010-11, WHICH READS AS UNDER :- A.Y. AMOUNT (RS.) 2008 - 09 GROUND NO. 7 : RS.2,66,723/ - GROUND NO. 8 : RS. 13,09,898/ - 2009 - 10 GROUND NO. 6 : RS.3,67,581/ - GROUND NO. 7: RS. 17,02,867/ - 2010-1 1 GROUND NO. 8 : RS.5,23,969/ - 13.1 DURING-THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE AO THAT APPELLANT WAS THE OWNER OF HOUSE NO. AH-14, RAJEEV NAGAR, AYODHYA BY PASS, BHOPAL WHICH WAS CONSTRUCTE D/ RENOVATED BY HIM. THE MATTER REGARDING COST OF INVE STMENT IN THE BUILDING WAS REFERRED TO THE VALUATION OFFICER INCO ME TAX DEPARTMENT, BHOPAL. THE VALUATION OFFICER SUBMITTED THE VALUATION REPORT DATED 25.11.2011 ESTIMATING THE TOTAL INVEST MENT IN THE CONSTRUCTION OF THE HOUSE AT RS.45,84,642/- AS AGAI NST THE INVESTMENT DECLARED BY THE APPELLANT BEFORE THE VAL UATION OFFICER OF RS. 17,50,000/-. THE YEAR-WISE ESTIMATE OF INVESTME NT BY THE VALUATION OFFICER AND THE INVESTMENT DECLARED BY TH E APPELLANT BEFORE DEPARTMENTAL VALUATION OFFICER (DVO) WAS AS UNDER : - -: 31: - 31 THE AO PROVIDED A COPY OF DVO REPORT TO THE APPELLA NT AND ASKED TO EXPLAIN THE SOURCE OF INVESTMENT IN THE CONSTRUCTIO N OF HOUSE AND TO SHOW- CAUSE AS TO WHY THE DIFFERENCE IN INVESTMENT SHOULD NOT BE ADDED TO THE TOTAL INCOME AS UNEXPLAINED INVESTMENT. THE AO NOTE D THAT THE APPELLANT HAD NOT SUBMITTED ANY OBJECTION OR EXPLANATION IN T HIS REGARD. ACCORDINGLY, THE AO HELD THAT THE AMOUNT OF EXCESS INVESTMENT MADE IN THE CONSTRUCTION OF THE HOUSE REMAINED UNEXPLAINED. ACCORDINGLY, THE AO MADE ADDITION OF RS.2,66,723/- (THE AMOUNT SHOWN BY THE APPELLANT INVESTED IN CONSTRUCTION DURING A.Y.2008-09 IN THE CASH BOOK) AS WELL AS THE TOTAL AMOUNT OF ESTIMATE OF CONSTRUCTION OF RS. 13,09,898/- IN A.Y. 2008-09. THE AO MADE ADDITION OF RS. 17,02,867/- IN A.Y.2009-10 I.E. THE TOTAL AMOUNT OF ESTIMATE OF INVESTMENT BY THE V ALUATION OFFICER AND THE AO FURTHER MADE AN ADDITION OF RS.3,67,581/- WHICH CONSISTS OF COST OF MATERIAL AS PER SEIZED DOCUMENTS OF RS.2,94,065/- P LUS 25 % OF THE COST OF BUILDING MATERIAL, FOR LABOUR AND OTHER RELATED EXPENSES OF RS.73,516/- TOTALING TO RS.3,67,581/-. IN A.Y.2010-11, THE AO M ADE ADDITION OF F. Y. A. Y. EXPENDITURE DECLARED BY THE ASSESSEE (RS.) VALUATION COST (RS.) DIFFERENCE IN COST (RS.) 2007 - 08 2008 - 09 500000 1309898 809898 2008 - 09 2009 - 10 650000 1702867 1052867 2009 - 10 2010 - 11 200000 523959 323959 2010-11 2011-12 400000 1047918 647918 TOTAL 1750000 4584642 2834642 -: 32: - 32 RS.5,23,959/- I.E. THE TOTAL AMOUNT OF INVESTMENT E STIMATED BY THE VALUATION OFFICER.. 29. THE MATTER CARRIED TO LD. CIT(A). THE LD. CIT(A) HA S PARTLY ALLOWED THE APPEAL BY OBSERVING AS UNDER :- 13.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND FACTS OF THE CASE. AS REGARDS THE ADDITION OF RS.2,66,723/- IN A.Y.2008-09 AND OF RS.3,67,581/- I N A.Y. 2009-10, IT IS NOTICED THAT THESE ADDITIONS WERE MA DE IN ADDITION TO THE TOTAL ESTIMATED INVESTMENTS BY THE DVO IN THESE ASSESSMENT YEARS. WHEN THE AO HAD MADE ADDITI ON OF THE TOTAL INVESTMENT AS ESTIMATED BY THE DVO, THERE WAS NO JUSTIFICATION IN MAKING FURTHER ADDITION OF THE INV ESTMENT SHOWN BY THE APPELLANT. IT IS ALSO PERTINENT TO NOT E THAT IN A.Y. 2008-09, THE AO HAD NOT DISCUSSED AT ALL THE ISSUE OF ADDITION OF RS.2,66,723/- IN THE ASSESSMENT ORDER A ND SIMPLY MADE ADDITION IN THE COMPUTATION OF INCOME. IN A.Y. 2009-10 ALSO, THE ADDITION WAS CALCULATED ON THE BASIS OF P URCHASE BILLS OF BUILDING MATERIAL OF RS.2,94,065/- SEIZED DURING THE COURSE OF SEARCH AND FURTHER ESTIMATING EXPENDITURE ON LABOUR AND OTHER RELATED EXPENSES AT 25 % OF THE COST OF B UILDING MATERIAL. WHEN THE AO HAD MADE ADDITION OF TOTAL IN VESTMENT -: 33: - 33 AS ESTIMATED BY THE DVO, THERE WAS NO QUESTION OF M AKING SEPARATE ADDITION FOR THE EXPENDITURE INCURRED ON M ATERIAL AND LABOUR USED FOR THE CONSTRUCTION OF HOUSE. THER EFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE , I AM OF THE CONSIDERED VIEW THAT THE AO WAS NOT JUSTIFIED I N MAKING ADDITION OF RS.2,66,723/- IN A.Y.2008-09 AND OF RS.3,67,581/- IN A.Y.2009-10. ACCORDINGLY, THE ADDI TION OF RS.2,66,723/- IN A.Y. 2008-09 AND OF RS.3,67,581/- IN A. Y. 2009-10 ARE DELETED. AS REGARDS THE ESTIMATION OF THE INVESTMENT IN THE CONSTRUCTION OF THE HOUSE BY THE VALUATION OFFICER AT RS.45,84,6 42/-, IT IS NOTICED FROM THE VALUATION REPORT THAT DVO HAD ESTI MATED THE INVESTMENT FOR THE GROUND FLOOR AND FIRST FLOOR OF THE HOUSE. HOWEVER, FROM THE DOCUMENTS FURNISHED BY THE APPELL ANT, IT IS SEEN THAT THE APPELLANT HAD PURCHASED THIS HOUSE FR OM M.P. HOUSING BOARD IN 2000 FOR A TOTAL CONSIDERATION OF RS.7,95,450/-, WHICH INCLUDED THE PRICE OF LAND AS WELL AS THE COST OF CONSTRUCTION AT RS.4,55,794/-. THOUGH IT IS NOTICED FROM THE VALUATION REPORT THAT THE APPELLANT HAD NOT ONL Y CONSTRUCTED THE FIRST FLOOR, AS ADMITTED BY THE APP ELLANT ALSO, BUT ALSO HAD RENOVATED THE GROUND FLOOR, WHICH IS E VIDENT FROM THE FACT THAT MARBLE FLOORING, KOTA STONE FLOORING, CERAMIC DEDO -: 34: - 34 AND OTHER WOOD WORK WAS DONE IN THIS HOUSE INCLUDIN G THE GROUND FLOOR. IT IS NORMALLY NOTICED THAT THE CONST RUCTION BY THE I LOUSING BOARD IS NOT GENERALLY OF A HIGH QUALITY. WHEN A HOUSE IS RENOVATED, IT REQUIRES MAJOR CHANGES EXCEP T THE USE OF BARE OLD STRUCTURE OF WALLS AND ROOF. THEREFORE, CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE , IT WOULD BE FAIR AND REASONABLE IF A CREDIT OF COST OF RS.4,00, 000/- IS GIVEN ON ACCOUNT OF THE EARLIER CONSTRUCTED GROUND FLOOR USED AT THE TIME OF RENOVATION OF GROUND FLOOR AND CONSTRUCTION OF FIRST FLOOR OF THE HOUSE. THEREFORE, THE ESTIMATION OF COST FOR THE FIRST F.Y. 2007-08 RELEVANT TO A.Y. 2008-09 MADE BY THE VALUAT ION OFFICER WOULD BE REDUCED BY RS.4,00,000/- AND IT WO ULD ACCORDINGLY BE AT RS.9,09,898/- (RS. 13,09,898 - RS.4,00,000/-). AS REGARDS THE CLAIM OF THE APPELLA NT REGARDING REBATE OF SELF SUPERVISION OF 10%, IT IS NOTICED THAT THE DVO HAD ALREADY GIVEN A REBATE OF 7.5% FOR SELF PURCHASE AND SUPERVISION WHICH IS REASONABLE AND NO INTERFER ENCE IS WARRANTED ON THIS ISSUE. IN REGARD TO INVESTMENT SHOWN BY THE APPELLANT, OF RS.2,93,656/- IN A.Y. 2008-09 AND OF RS.4,41,485/- IN A.Y. 2009-10, IT IS NOTICED, ON PERUSAL OF DOCUMENTS FUR NISHED BY THE APPELLANT AND SUBMISSION MADE, THAT IT WAS MADE , OUT OF DISCLOSED SOURCES FROM HIS INCOME FROM SALARY, INTE REST AND -: 35: - 35 ALSO THE ADDITIONAL INCOME DISCLOSED OF RS.2,90,000 /- IN A.Y. 2008-09 AND RS.3,36,000/- IN A.Y. 2009-10. THESE AM OUNTS HAVE BEEN EXPLAINED THROUGH THE CASH FLOW OF THE AP PELLANT DURING THIS PERIOD. HOWEVER, IN REGARD TO INVESTMEN T SHOWN IN THE NAME OF SMT. DEEPALI RAI, APPELLANTS WIFE AND SMT. RANI RAI, WIFE OF APPELLANTS BROTHER OF RS.3,00,000/- E ACH I.E. RS. 1,00,000/- IN EACH YEAR, IT IS NOTICED THAT APPELLA NT HAD NOT ADDUCED ANY COGENT AND UN-IMPEACHABLE EVIDENCE IN S UPPORT OF INVESTMENT MADE BY THEM. THE APPELLANT HAD NOT R ECEIVED ANY AMOUNT FROM THEM BY CHEQUE AND NO SPECIFIC INVE STMENT MADE BY THEM ON ITEMS USED IN THE CONSTRUCTION WAS EXPLAINED. IT MAY BE MENTIONED THAT THE BALANCE SHE ET OF THESE LADIES WERE ALSO PREPARED AFTER THE DATE OF S EARCH AND, THEREFORE, MUCH RELIANCE CANNOT BE PLACED ON THESE BALANCE SHEETS. ACCORDINGLY, THE INVESTMENT OF RS.2,93,656/ - IN A.Y. 2008-09 AND OF RS.4,41,485/- IN A. Y.2009-10 MADE B Y THE APPELLANT IN THE CONSTRUCTION OF THE HOUSE IS CONSI DERED FROM DISCLOSED SOURCES. IN VIEW OF THE ABOVE, THE POSITI ON OF ACTUAL INVESTMENT IN HOUSE, THE INVESTMENT SHOWN BY THE AP PELLANT AND DIFFERENCE WOULD WORKED OUT AS UNDER :- A.Y. ACTUAL INVESTMENT IN THE CONSTRUCTION OF HOUSE INVESTMENT EXPLAINED BY THE APPELLANT DIFFERENCE. 2008-09 9,09,898 (13,09,898 -4,00,000) 2,93,656 6,16,242 -: 36: - 36 2009-10 17,02,867 4,41,485 12,61,382 2010-11 5,23,959 - 5,23,959 ACCORDINGLY, THE ADDITION TO THE EXTENT OF RS.6,16, 242/- IN A.Y. 2008-09; OF RS. 12,61,382/- IN A.Y. 2009-10 ; AND OF RS.5,23,959/- IN A.Y. 2010-11 ARE CONFIRMED . 30. THE DEPARTMENT IS IN APPEAL AGAINST REDUCING THE AMOUNT IN ASSESSMENT YEAR 2008-09 AND 2009-10 AND ASSESSEE IS IN APPEAL AGAINST CONFIRMING THE ADDITI ON IN ALL THE ASSESSMENT YEARS. 31. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. DURING THE COURSE OF HEARING OF THE APPEAL , THE LD. AUTHORIZED REPRESENTATIVE FAIRLY CONCEDED BEFORE US THAT THE ASSESSEE HAS PURCHASED THIS PROPERTY FROM HOUSING B OARD AND AFTER PURCHASING THIS PROPERTY, HE HAS CONSTRUCTED THE BUILDING AND WHILE VALUING THE PROPERTY, THE DVO, H AS NOT CONSIDERED THAT HOUSE WAS PURCHASED IN 2002 AND THE PERMISSION WAS TAKEN FOR FIRST GROUND IN 2007 AND O NLY CONSTRUCTED FIRST FLOOR DURING THIS PERIOD. THEREFO RE, WHILE MAKING THE CONSTRUCTION, THE DVO HAS ESTIMATED THE COST OF -: 37: - 37 CONSTRUCTION AT RS. 45,84,642/-, WHICH IS ON HIGHER SIDE AND DVOS REPORT MUST BE REVISED ON THE GROUND THAT STA TE P.W.D. RATES ARE LOWER THAN THE C.P.W.D. RATES. THEREFORE, THE ADDITION CONFIRMED BY THE LD. CIT(A) MAY BE REDUCED TO 25% AND 75% OF THE ADDITION MAY BE CONFIRMED. THE LD. S ENIOR D.R. OBJECTED TO IT. WE FIND THAT THE DVO HAS ESTI MATED THE INVESTMENT ON GROUND FLOOR AND FIRST FLOOR OF THE H OUSE AND THE ASSESSEE HAS PURCHASED THE HOUSE FROM M.P.HOUSING B OARD IN THE YEAR 2002. THEREFORE, WHEN SOMEBODY RENOVATED T HE HOUSE, BUT THE ESTIMATION OF THE COST IS ON HIGHER SIDE. THEREFORE, WE AGREE WITH THE SUBMISSION OF THE LD. AUTHORIZED REPRESENTATIVE AND WE DELETE THE ADDITION OF 25% OF THE TOTAL ADDITION IN ALL THE YEARS I.E. RS. 6,16,242/- IN AS SESSMENT YEAR 2008-09, RS. 12,61,382/- IN ASSESSMENT YEAR 2009-10 AND RS. 5,23,959/- IN ASSESSMENT YEAR 2010-11. OUT OF THIS 25% OF THIS TOTAL ADDITION IS DELETED AND 75 % IS SUSTAINE D. -: 38: - 38 32. IN THE RESULT, THE DEPARTMENTAL APPEALS ARE DISMISS ED AND ASSESSEES APPEALS ARE PARTLY ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 18 TH AUGUST, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 18 TH AUGUST, 2015. CPU* 2718
Other Referred Cases
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Laws Referred To
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1:1 Consultation on Tax Litigation
₹1
1:1 Consultation on Startup Compliance
₹1
1:1 Consultation with family dentist -Your Smile Deserves the Best Care!
₹250
Initial LLP Agreement
₹0
Declaration of Gift
Mehul₹500
Why Meesho got ₹1,500 Crore Tax Demand ?
Team Counselvise - March 09, 2026
Residency Rules: Income Tax Act, 1961 vs Income Tax Bill, 2025 — A Subtle Yet Significant Shift!
Team Counselvise - February 18, 2026
Transfer Pricing and International Tax Reforms under Finance Bill, 2026: A Practical Overview
Team Counselvise - February 07, 2026