TMI Blog2012 (10) TMI 1103X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration was worked out at ₹ 1,00,931/-. The Assessing Officer treated this amount as undisclosed investment in the construction and made addition for the same. 2.3 The assessee carried the matter to the ld. CIT(A) and submitted that for making any addition u/s 69B, the Assessing Officer is required to establish that the amount expended on making the investment was more than the amount recorded in the books of the assessee. It was stated that the assessee maintained complete books and complete details in respect of the expenses incurred in construction of the factory building and during the course of assessment proceedings, all those bills/ vouchers alongwith the construction account were filed before the Assessing Officer who had not pointed out any defect therein. The copies of the ledger account of construction of building alongwith vouchers were submitted even before the DVO who had also not pointed out any defect in the construction records maintained by the assessee. Therefore, reference, u/s 142A of the Act was not valid. Reliance was placed on the following case laws. 1. CIT vs Pratap Singh Amro Singh Rajendra Singh and Deepak Kumar, 200 ITR 788 (Raj.). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o that extent. 2.5 Now the assessee is in appeal. 2.6 The ld. counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the assessee maintained the proper books of accounts for the cost of construction and also maintained vouchers and bills for the same and no defect or short coming has been pointed out either by the Assessing Officer or the DVO or the ld. CIT(A). Therefore, the addition sustained was not justified. 2.7 In his rival submissions, the ld. DR supported the impugned order passed by the ld. CIT(A). 2.8 After considering the submissions of both the parties and the materials available on record, it appears that the Assessing Officer referred the valuation to the DVO u/s 142A of the Act but nothing is brought on record that books of accounts maintained by the assessee for the expenses incurred had not been rejected and it is not the case of the Department that the assessee had not maintained proper bills and vouchers regarding cost of construction. In a similar issue, the Hon'ble Supreme Court in the case of Sargam, Cinema vs CIT (2010) 328 ITR 513 held as under:- In the present case, we find that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d cheque on the very next date. Thereafter, till 28-09-2007, there was no entry in bank account except bank interest. The Assessing Officer was not convinced with the reply of the assessee and accordingly treated the credits in the name of both the persons as unexplained and made addition of ₹ 4.15 lacs (Rs. 90,000/- plus ₹ 3,25,000/-) 3.3 The assessee carried the matter to the ld. CIT(A). and submitted that Shri Tara Chand is employee of assessee whose statement was recorded by the Assessing Officer during the course of assessment proceedings wherein he accepted the fact of giving loan to the assessee and also explained the source being saving from salary and stitching. Further the loan was given by account payee cheque from his bank account. Similarly, Shri Khiya Ram was earning salary income and income from agriculture and his statement was recorded during the course of assessment proceedings wherein he accepted the fact of giving loan to the assessee and had explained the source of the same. It was also stated that Shri Khiya Ram is an income tax assessee and the copy of the balance sheet for the year under consideration and earlier year was filed. It was contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT(A) was not justified. Reliance was placed on the following case laws 1. Labh Chand Bohra vs ITO 219 CTR 571 (Raj.) 2. CIT vs Heera Lal Chagan Lal 257 ITR 281 (Raj.) 3. Kanhaia Lal Jangid vs ACIT, 217 CTR 354 (Raj.) 3.7 In his rival submissions, the ld. DR supported the orders of authorities below. 3.8 We have considered the submissions of both the parties and gone through the materials available on record. In the present case, the assessee received the loan from his employees. Their statements were recorded by the Assessing Officer. The creditors explained the source for giving loan. Shri Tara Chand who was drawing salary of ₹ 11,000/- per month and gave loan of ₹ 90,000/- to the assessee, explained the source from past savings and income from salary stitching. The Assessing Officer did not accept the explanation given by Shri Tara Chand. However, nothing is brought on record to substantiate that he was not in a position to give the loan of ₹ 90,000/- to the assessee out of his past savings and the income from salary as well as stitching. Merely on this basis that cash was deposited by the creditor in his bank account canno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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